Mr. CHAIRMAN. That is what we want.

Mr. ALESSANDRONI. I am a graduate of Villa Nova College; graduate of the University of Pennsylvania Law School; Secretary of the Philadelphia Bar Association; Secretary of the Board of Governors of the Bar Association; practicing in Philadelphia for 10 years. I have been executive secretary to the present mayor of Philadelphia and to the past mayor of Philadelphia. Presently I am executive director of the Philadelphia Housing Authority; chairman of the American Legion's National Housing Committee; judge advocate of the Philadelphia County Council of the American Legion. Mr. SMITH. Thank you.

The CHAIRMAN. Mr. Alessandroni, under your bill, H. R. 4488, what is the limit of the mortgage?

Mr. ALESSANDRONI. It is limited to $10,000 units. The mortgage is a full, complete mortgage for the total amount. But it cannot exceed $10,000. In other words, a veteran can purchase a house with no down payment, so theoretically, if he had the highest price of the unit, he could go as high as $10,000.

The CHAIRMAN. What is the largest amount of a Federal Housing Administration mortgage?

Mr. ALESSANDRONI. You mean under the same situation?

The CHAIRMAN. Yes. It is $8,100, is it not?

Mr. ALESSANDRONI. Yes.

The CHAIRMAN. Do you take any position on what influence there might be from raising this ceiling from $8,100 to $10,000, on the cost of the house to the veteran?

Mr. ALESSANDRONI. As I have indicated before, I think every effort of Congress to ease the situation, unfortunately, has attached to it a corresponding increase in the cost of the house itself. That does not mean, of course, that we should not raise these limits in an effort to make available this money to people who can buy houses at what they are being built for today.

The CHAIRMAN. What I am getting at is this: Might there not be encouragement under your H. R. 4488, which raises the ceiling of the insured mortgage from $8,100 to $10,000?

Mr. ALESSANDRONI. Yes.

The CHAIRMAN. Might that not be an influence leading towards an increase in cost to the veteran rather than a stabilization of the cost at the present level?

Mr. ALESSANDRONI. I see the chairman's question now. That was only put in there because, trying to get legislation for the whole country became very difficult. We had hoped that the $10,000 limitation would only be reached in a few cases, but in order to take care of, perhaps, in New York City, Philadelphia, and San Francisco, that we had to raise the level to $10,000. But we are hoping that these houses which will be erected will be more in the $7,000 class. Because in the first place, if they are not, if they are all put up at $1,000, we are not going to be able to take care of the veteran we are really trying to take care of. It is not really a good feature, we would like to drop it lower. But from a practical standpoint, we felt we had to spread it a little thinner, although we can appreciate that it is not a good idea.

The CHAIRMAN. I am asking these questions relative to H. R. 4488 without having studied the bill, because it has never been before the

committee, but this $10,000 is the limitation of the mortgage. In other words, are we to understand that under the provisions of H. R. 4488 that a hundred-percent insurance of the cost is not more than $10,000?

Mr. ALESSANDRONI. That is right.

The CHAIRMAN. But if the cost of the home is more than $10,000, then, the limitation is $10,000?

Mr. ALESSANDRONI. They would not get permission from the Veterans' Administration to put them up in the first place.

The CHAIRMAN. They do not have the authority?

Mr. ALESSANDRONI. That is right. They must see the plans in advance, and it must be in comparison with other types of housing being put up in the neighborhood by other people.

The CHAIRMAN. Under title VI, Federal Housing Administration provisions, the veterans' preference, on purchase, is under section 603, and the priority for rental under 608. Of course, title VI, Federal Housing Administration financing is of inestimable benefit to the veteran in that respect.

Mr. ALESSANDRONI. Do you mean the provision which says that the property must be retained for a period of time?

The CHAIRMAN. For 30 days.

Mr. ALESSANDRONI. It is helpful, but it does not give the veteran all he needs, if the house in the first instance is over his head in cost, and, of course, in our bill we are hoping to bring down the cost by eliminating these other charges that must necessarily be a part of a house, where it is built by an independent individual. But the 30-day provision in many instances is evaded by the builder who builds 300 homes, and puts the first 5 up, holds them for 30 days and then sells them to anybody. So there are two reasons: although there is a preference in there, it is not so rockbound that it is as helpful to the veteran as it should be.

The CHAIRMAN. Under the present GI set-up, there is little or no inspection. Houses are not built according to any statutory standards. I do not want to infer that all GI building is shoddy building. Most of the so-called shacks which have been built to sell for $10,000 or $12,000, which we would all agree probably are not worth more than $3,000 or $3,500, have been built under the GI bill of rights. What inspection service, and what standards are set up under H. R. 4488 to protect the veteran in that respect?

Mr. ALESSANDRONI. We have in the bill the provisions, plus the additional authority of the Administrator, to set up additional rules and regulations for what we believe will be the necessary checks to see that the veteran gets his full dollar's worth. Because obviously

The CHAIRMAN. Would you attempt to legislate the standards or would you do that in the regulations?

Mr. ALESSANDRONI. The bill makes no provision for it. It is left to regulation.

The CHAIRMAN. The veteran has no statutory assurance that the house he is going to get under H. R. 4488 is going to stand up during the period of occupancy.

Mr. ALESSANDRONI. Except that legislatively, under the provision that the Administrator must make the regulations, that is, a provision which says that a house that is going to sell for $8,000 must be at least comparable to other houses in the community selling for $8,000.

The CHAIRMAN. The thing which has concerned me more than anything else with respect to veterans' housing is that I think the veterans have been, in many instances, taken advantage of. We would like to think that the veteran would not buy a house, or that anyone else would not buy a house which is not worth the money paid for it, but I think if you look around the United States, you will see a good many thousands of units which have been put up which you and I and all of us would agree are not worth more than half of what has been paid for them. The veteran is put in a position where he thinks perhaps he has to buy a house in order to get a roof over his head, and is considering the monthly payments that he makes as rental, and sometimes has no more interest in the house than that. You cannot blame him too much for that, I suppose, because he would not have bought the house otherwise, if conditions were not so. But it is going to be our endeavor, in the study of this legislation, to put GI construction in such a position where the GI paper incident to the financing of those projects will be as marketable as the Federal Housing Administration

paper.

The market for GI paper has dissolved. There is very little market for it now, even though 50 percent of it is guaranteed up to $4,000. The reason for that is partly the yield. I assume that is why the Senate, in its judgment, provided for a flexible interest rate on GI mortgages. The other deterring factor is that these properties, many of them, are not worth the 50 percent guaranteed by the Government. We are going to try to overcome that in some manner, and to reactivate GI loans with respect to housing construction.

That is why it surprises me a little bit, because of the history of the GI loans, and because of the types of homes which are being built, generally and under the GI bill of rights in particular, that thought has not been given to the creation of standards under H. R. 4488 to protect the veteran in that respect.

Mr. ALESSANDRONI. I might add, Mr. Chairman, that the American Legion is heartily in agreement that they should be a part of it. It is just a question as to whether, mechanically, they should be put in legislatively or by regulation, and in discussing it with those people who are familiar with the drawing of legislation, it was found that they felt it would be unwise to make too narrow the function of the Administrator by legislatively providing for the minimum standards which should be provided. Unquestionably, we are for seeing that the veteran gets all he should for every dollar he spends, and the Legion would have no objection to providing those safeguards. We did it by advice, that mechanically it is better to provide it through regulations than to spell it out in the act itself. I do not know which is the best way.

The CHAIRMAN. We passed a bill in this committee over a year ago, with respect to the disposition of what we call Lanham permanents. We created some very high veteran priorities with respect to the disposition of those units and provided for Federal Housing Administration insurance on them. As I recall it, the American Legion was very enthusiastically in favor of that bill. What did the Legion do when S. 866 was before the Senate Banking and Currency Committee, or on the Senate floor, to get them tacked onto this bill?

Mr. ALESSANDRONI. We did nothing, sir. The only committee before which we appeared was the House Veterans' Committee and now before your committee.

The CHAIRMAN. Have you had any opportunity to appear before the Senate committee?

Mr. ALESSANDRONI. I would not know the answer to that question. The CHAIRMAN. You did not ask for one?

Mr. ALESSANDRONI. It would be a legislative function. I do not know the answer to that. I might add that in my function here today, as chairman of the Legion's national housing committee, I have no obligation to advise the Congress or to plan for the legislative enactment of this. That belongs to another committee and another chairman.

The CHAIRMAN. Colonel Taylor, what is the status of that bill over in the Senate? What have you done by prying that loose and getting it tacked onto this bill?

Colonel TAYLOR. H. R. 4488?

The CHAIRMAN. No, the Lanham permanents disposition bill, which we were so enthusiastic about last year?

Colonel TAYLOR. We have been trying to get it pried loose, yes, sir. The CHAIRMAN. Why did you not try to get it pried loose as an amendment to this bill, S. 866? Did you have an opportunity to appear before the committee over there?

Colonel TAYLOR. We did not request any opportunity, sir. We did not request any opportunity to appear before the Senate committee on S. 866.

The CHAIRMAN. All right.

Mr. COLE. May I ask one question, Mr. Chairman?

The CHAIRMAN. Mr. Cole.

Mr. COLE. As a matter of practical application, how long did the hearings before the House Veterans' Affairs Committee on H. R. 4488 last?

Mr. ALESSANDRONI. I would say over a total period, from the first of this year up to last week. I appeared personally myself perhaps 6 or 7 times, and various other people did. It has had long and involved hearings.

Mr. COLE. Thank you.

The CHAIRMAN. Åre there further questions of Mr. Alessandroni? Mr. BANTA. I have a question.

The CHAIRMAN. Mr. Banta.

Mr. BANTA. I am not at all familiar with the provisions of H. R. 4488, but may I inquire of you what provisions are made in it for rental housing for veterans?

Mr. ALESSANDRONI. Yes, sir. As I explained earlier, we felt that emphasis must be given to rental housing, even though we would like to see every veteran own his own home. It is more beneficial for the association to build rental housing than privately owned housing, and it is done with the purpose of agitating that sort of cooperative, because it can be done cheaper, with a longer amortization period, and we feel that the greatest amount of housing under the bill would bé rental housing.

Mr. BANTA. What are the provisions which stimulate the construction of rental housing under H. R. 4488?

Mr. ALESSANDRONI. As distinguished from the sale?

Mr. BANTA. Just exactly that. What are the provisions in the bill which stimulate the construction of rental housing? How will that be done under H. R. 4488?

Mr. ALESSANDRONI. Well, the provisions are in effect, except for the length of time of amortization for both rental and sale housing. Mr. BANTA. Separate them.

Mr. ALESSANDRONI. You mean how does it actually operate for rental housing?

Mr. BANTA. Yes.

Mr. ALESSANDRONI. The association is able to get its interim financing, and its long term financing, by going to the Veterans' Administration and borrowing the money at one-quarter of 1 percent above what the Secretary of the Treasury must pay for it. So that we immediately save the cost

Mr. BANTA. We do not care about that. I want the provisions which will stimulate the construction of rental housing, and just how it works. You say "the association." What is the "association"?

Mr. ALESSANDRONI. Any five or more veterans may secure a Federal charter, a charter issued by the Administrator of Veterans' Affairs. Mr. BANTA. And they become an association formed for the purpose of constructing housing?

Mr. ALESSANDRONI. That is correct.

Mr. BANTA. With funds which they will borrow fom the Veterans' Administration?

Mr. ALESSANDRONI. That is correct.

Mr. BANTA. And they must be veterans of World War II?
Mr. ALESSANDRONI. Yes.

Mr. BANTA. Are they limited to the number of units they may construct?

Mr. ALESSANDRONI. Yes, the Administrator of Veterans' Affairs has the power to limit the number of projects and the number of units in each project, depending on what claim is made for the need in that community?

The CHAIRMAN. Are there further questions?

Mr. BANTA. I would like to develop it, but there is a quorum call. The CHAIRMAN. We will have to recess at this time, because of the quorum call, and we will have to recess until tomorrow morning. I was hoping that we might finish with Mr. Alessandroni.

Mr. BANTA. I am afraid I will not have time to go into the things I want to cover at this time, Mr. Chairman.

The CHAIRMAN. Do you care to make any supplemental statement, Mr. Alessandroni?

Mr. ALESSANDRONI. I think not.

The CHAIRMAN. If you wish to do so, you may do so.

The House is convening at 11 o'clock this morning for the reading of the Government corporations appropriation bill and will have another bill following that which is rather controversial, so it is apparent that we will not be able to get permission to sit this afternoon.

At 3 o'clock we will have a conference on the Reconstruction Finance Corporation bill also.

So the committee will stand in recess until tomorrow morning at 10 o'clock.

(Whereupon, at 11:30 a. m., the committee recessed, to reconvene at 10 o'clock a. m., Wednesday, May 12, 1948.)