Expenditures for new residential construction in nonfarm and farm areas; nonfarm by source of funds, 1915 to 1947

Mr. FOLEY. I think you are probably right in such an anticipation, to some extent, Congressman. And I think the nature of this operation is encouraging in that direction because it is destined to allow the land to be sold for its most appropriate use-and that use might be commercial or it might be industrial, as distinguished from housing. The land would be worth more for such uses and therefore sell for more, thus reducing the loss very considerably over what it would probably be if this clearance is tied necessarily to low-rent housing. Mr. GAMBLE. I wonder if you would mind inserting in the record this information: On page 2 (transcript, pp. 12, 13) you give the figures as to the peak number of houses. I think it might be helpful to the committee if there were a statement of the number of houses constructed over the years, say, from 1920. I know you have it available, and I think it is in part II of the Joint Housing Committee's hearings.

Mr. FOLEY. We have those statistics and will be glad to provide them for the record at this point, Congressman.

(The information above referred to is as follows:)

New privately financed nonfarm dwelling units started, by type of structure, 1920 to 1947

Data for 1945, 1946, and 1947 adjusted for lapsed building permits and for lag between issuance of permit and actual start of construction.

Sources: 1920-29-National Bureau of Economic Research; 1930-47-U. S. Department of Labor, Bureau of Labor Statistics.

Expenditures for new residential construction in nonfarm and farm areas; nonfarm by source of funds, 1915 to 1947

Mr. GAMBLE. I think we all agree with you on the national housing policy, which you discussed in detail.

Mr. FOLEY. I am very happy to hear you say that because I think it is one of the most important problems before us.

Mr. GAMBLE. I do, too. That point was made out in Chicago. Phil Klutznick said that if the joint committee would arrive at a conclusion on a national housing policy, it would pay dividends, because we have never had any housing policy in this country.

75674-48-5

Mr. FOLEY. It would at least pay dividends in the saving of time and discussion in the future, sir.

Mr. BUCHANAN. One question, Mr. Chairman.

The CHAIRMAN. Mr. Buchanan.

Mr. BUCHANAN. Under the section dealing with yield insurance, pages 13 to 16 of your statement (transcript, pp. 26 to 30), in 1944, when a plan was worked out with the insurance-company representa tives, it looked pretty good to a number of companies, but since that time, and especially in 1946 and 1947, they have lost all interest and are going ahead on their own now. Various spokesmen for leading insurance companies have stated flatly that they would not operate. under the yield insurance plan if enacted.

Without the active interest of the insurance companies, then, would you say that title IV, yield insurance, is a dead duck to start with? Mr. FOLEY. No, I would not, Congressman, as I indicated in my statement. The field of possible participants is not, in the first place, limited to insurance companies, although naturally they are the largest, and if they were active immediately it would probably bring larger, immediate results.

The fact of the matter is that when this was first under discussionor, at least, when it was previously under discussion, about the time I came to Washington as Commissioner of FHA-we had various groups in to discuss the various proposals for amendment, particularly as it affected the Federal Housing Administration, and at that time there was considerable interest, although I would not say a firm commitment was finally made, on the part of the insurance companies and others, in the yield insurance plan.

There were various objections on the part of the insurance companies, particularly to some of the detailed provisions of the bill as it had previously been in S. 1592. It is my understanding that the changes in some of the details which appear in the present bill are the result of conversations with representatives of insurance companies, particularly. That does not mean, again, that they have committed their companies to proceeding under the bill at once. However, it is my feeling that there are very considerable numbers of other types of possible investors to whom the bill would appeal.

I do not anticipate that it would produce a large amount of rental housing at very early date. I think it would; one of those things which, like the original 80-percent mortgage of the Federal Housing Administration and the later 90 percent, and even title VI, takes same time to obtain acceptance. A few good projects would probably cause a wide acceptance thereafter.

Mr. BUCHANAN. Thank you.

Mr. BOGGS. Mr. Chairman.

The CHAIRMAN. Mr. Boggs.

Mr. BOGGS. Mr. Foley, did you have occasion to read the answers to the questionnaires put out by the joint committee, on the question of slum clearance, to the Governors and mayors of the States and cities?

Mr. FOLEY. I have not had a chance to read the detailed answers, but I have been reasonably aware, I think, of the burden of them, Congressman.

Mr. BOGGS. You are aware of the fact that the replies were practically unanimous that some Federal assistance for slum clearance was required, are you not?

Mr. FOLEY. Yes, sir.

Mr. BOGGS. Mr. Chairman, I would like those replies to be made a part of the record. They are in the report of the joint committee. The CHAIRMAN. You mean a synopsis of them?

Mr. BOGGS. Yes, sir.

The CHAIRMAN. Without objection, they will be made a part of the record.

(The letters above referred to are as follows:)

Hon. ROBERT F. WAGNER,

United States Senator, Washington, D. C.

STATE OF ARKANSAS,
OFFICE OF THE GOVERNOR,
Little Rock, October 17, 1947.

DEAR SENATOR, WAGNER: Please pardon the delay in replying to your letter of October 10. I have been out of the office for the past week and on returning find your letter on the desk.

Complying with your request, I am giving you herewith my answers to the questions which you have compounded relative to the survey of urban redevelopment and public housing.

1. (a) Just at this time I do not think that private enterprise will be able to provide decent housing adequate for low income families. Of course, there is no way for me to say when they will be able to do this. Prices are skyrocketing and no one can foresee what may happen. Rents, unless controlled, will go beyond the means of a large majority of our people.

(b) The basis of my opinion is my observation on the earning capacity of the people and the cost of housing units.

2. (a) Either the Government or private enterprise must take the loss if low-rent housing is constructed at the present price levels, and of course private enterprise cannot bear this burden. Perhaps the Government can.

(b) The cities in our State, from the municipality standpoint, will not be able to finance the cost of constructing any housing units, low rent or high rent. (c) None of the cities in my State are able to furnish annual subsidies.

(d) No state loan funds or subsidy funds are available.

3. (a) This will possibly be the only way in which housing facilities for low rent families can be made available.

(b) I have no suggestions to make regarding the modification of the program. (c) I have no suggestions to make as to an alternative in this case.

4 to 7 (inclusive). We have no urban redevelopment legislation in our State. States and cities are not able to finance write-off of excessive costs of acquiring and clearing slums. From a local standpoint, I do not see any possible relief which can come from the cities' or States' sources.

Yours very truly,

BEN LANEY, Governor.

Hon. BEN LANEY,

Governor of Arkansas, Little Rock, Ark.

DEAR GOVERNOR LANEY: Thank you for your letter of October 17, in which you answered my questionnaire on housing and urban redevelopment. The response from governors to this questionnaire has been very gratifying, and I feel that the information obtained will be most useful in evaluating the problem and possible solutions.

I should appreciate further clarification of your replies on urban redevelopment. You stated that your State has no urban redevelopment legislation. My information is that such a law was enacted in 1945. It is possible that in your reply you had in mind something quite different from the type of legislation we intended to cover in this questionnaire. Therefore, you may wish to review and perhaps revise your answers to the questions on urban redevelopment.

Sincerely yours,

Hon. ROBERT F. WAGNER,

STATE OF ARKANSAS, Little Rock, November 28, 1947.

United States Senator, Washington, D. C. DEAR SENATOR WAGNER: This will acknowledge receipt of your letter of November 24 relative to your questionnaire on housing and urban redevelopment. The 1945 Housing Act to which you refer is act 212 of 1945 which so far as I know has not operated and for which there has been no appropriation made. I therefore count it as of no effect and certainly do not think that it woud help solve the housing problem in our State.

Yours very truly,

Senator ROBERT F. WAGNER,

Committee on Banking and Currency,

BEN LANEY, Governor.

OFFICE OF THE GOVERNOR, Atlanta, Ga.. December 2, 1947.

United States Senate, Washington, D. C.

DEAR SENATOR WAGNER: Since receiving your letter of October 10 asking for a report from Georgia to your Joint Committee on Housing, we have endeavored to work out answers to all of the questions propounded in the questionnaire attached to your letter. The delay in complying with your request has been occasioned by the tremendous amount of business in this office and to the necessity for considerable traveling on the part of officials with whom I wished to confer before making a definite reply to you.

Attached is the information covering the situation in this State.

Sincerely yours,

M. E. THOMPSON, Governor.

1. (a) There is no doubt that while private enterprise today is finding the opportunity through shorter profits to reach lower in the field of housing individuals, still it cannot now or ever reach sufficiently far enough to adequately house the lowest income groups who now live in slums in our towns and cities, and maintain the profit motive.

(b) The above opinion is based upon actual surveys by those interested in housing in this State and statements by many real estate men themselves. Also, upon the fact that in a good many instances, projects of slum clearance in cities and towns have been submitted to private capital with the request that they ascertain their ability to solve the problem and in each instance their answer has been that they could not.

2. (a) The public housing projects which have been built in Georgia have proved conclusively that publicly assisted low-rent housing is the only feasible means by which families of the lowest income groups can obtain decent housing. (b) The cities and towns of our State are in the position that they can only participate in the capital cost of low-rent housing through the medium of normal improvements such as streets, sewers, water, etc.

(c) Because of the financial status of our cities and towns and anticipated revenues, there is but one method through which they can participate in annual subsidies needed to permit low-rent housing and that is by tax exemption.

(d) There are not now, nor is it anticipated there will be in the near future, any State loan or subsidy funds available for the above purposes.

3. (a) The low-rent housing program as initiated under the United States Housing Act of 1937, while it has made some mistakes in its pioneering course, has, I believe, rendered a tremendous contribution to the general economy of living standards of America and has transposed a group of people who were a financial burden upon the public treasury, into a group of stabilized citizens who are distinctly an asset to the community. Therefore, I, without equivocation, make the statement that I favor a continuation of this program.

(b) In general I am in accord with the provisions of the Taft-Wagner-Ellender bill which is now pending in Congress.

4. (a) The State of Georgia has passed its own laws to put their municipalities in position to participate in the urban-redevelopment program when such a program is initiated by the Federal Congress. I believe that this would be one of the most important steps that could be taken in the achievement of eradication of slums.