determines that such demolition would reasonably be expected to create undue housing hardship in the community.

SECTION 106. GENERAL PROVISIONS

This section gives the Administrator the technical powers necessary for the performance of his duties under this title. In so doing, it provides for the appointment of a director to administer the provisions of this title under the direction and supervision of the Housing and Home Finance Administrator.

SECTION 107. PAYMENT FOR LAND USED FOR LOW-RENT PUBLIC HOUSING

This section assures that the financial assistance under this title will not result in a double subsidy to federally assisted low-rent public housing, by providing that any land in the project area made available for such low-rent public housing must be paid for by the public housing agency undertaking such low-rent public housing project.

SECTION 108. SURPLUS FEDERAL REAL PROPERTY

This section authorizes the sale of any Federal real property surplus to the needs of the Government and within the area of a land assembly project, to the local public agency undertaking the project, at a price equal to its fair market value. The proceeds from any such sales would be deposited in the Treasury as miscellaneous receipts.

SECTION 109. PROTECTION OF LABOR STANDARDS

This section, designed for the protection of labor standards, requires that not less than prevailing wages be paid to those employed in the development of any project assisted under this title, makes the "kickback" statute applicable to all such projects, and requires monthly reports by all contractors used on the project to the Secretary of Labor as to the number of persons employed by them, the aggregate amount of their pay rolls, the total man-hours worked, and expenditures for materials. Demolition or removal work or site-improvement work paid for by the State, city, or other public body (other than the local public agency undertaking the project) are not included within the scope of this section due to the obvious difficulties which would result where the city or other public body is making its local grantin-aid in the form of project work. For example, the city (as a part of its local grants-in-aid) may install streets in the project area as part of a general city paving contract which also covers street work in areas other than the project area. Or the city may perform demolition or removal work with salaried personnel in its engineering department.

SECTION 110. DEFINITIONS

This section sets forth the definitions of the basic terms used in the title. Through these definitions, the section provides that no project area would qualify for Federal aid unless it involves either a slum area or a deteriorated or deteriorating area which is predominantly residential in character; or any other deteriorated or deteriorating area which is to be developed or redeveloped for predominantly residential uses;

or platted urban or suburban land which is predominantly open and which because of obsolete platting, diversity of ownership, deterioration of structures or of site improvements, or otherwise substantially impairs or arrests the sound growth of the community and which is to be developed for predominantly residential uses; or open unplatted urban or suburban land necessary for sound community growth which is to be developed for predominantly residential uses. (In the last case the project thereon, as provided in sec. 103 (a), is not eligible for any capital grant.) Through these definitions also, the section limits Federal assistance to the furtherance of such purposes as (1) the acquisition of the land in the area requiring development or redevelopment; (2) the removal of existing structures and improvements; (3) the provision of streets, utilities, and other site improvements essential for the new land uses contemplated; and (4) the making of the land available for development or redevelopment at prices consistent with its proposed new uses. Aid under this title to assist the construction of any of the buildings contemplated by the redevelopment plan is expressly barred, except in the case of the temporary loans authorized by section 102 (b) for the provision of school or other public buildings or facilities necessary to serve or support the new uses of land in projects on land which is open or predominantly open.

TITLE II-LOW-RENT PUBLIC HOUSING

This title provides for an extension of the low-rent public-housing program to serve urban and rural nonfarm families whose incomes are so low that they are not being adequately housed in new or existing private housing. This program will be administered by the Public Housing Administration, a constituent of the Housing and Home Finance Agency, under the terms of the United States Housing Act of 1937, as amended, including the amendments made by this bill.

This title contains provisions to assure complete consistency with the basic objectives of primary reliance upon private enterprise to do as much of the total housing job as possible; increasing emphasis on local responsibility and initiative; special preferences to meet the needs of veterans of low income and their families; enlistment of private capital to finance substantially all of the capital cost of lowrent public-housing projects; and an adaptation to current needs with respect to the amount and period of Federal annual subsidy to achieve low rents. The title also contains a miscellany of technical and perfecting amendments to the United States Housing Act of 1937 that the 11 years of operations under it have indicated to be necessary and desirable.

SECTION 201. LOCAL RESPONSIBILITIES AND DETERMINATIONS; TENANCY ONLY BY LOW-INCOME FAMILIES

This section provides that no contract for a preliminary loan for surveys and planning for low-rent housing projects shall be made with a local public-housing agency unless (1) the governing body of the locality has approved the application for said loan, and (2) the local public-housing agency has satisfied the Public Housing Administration that there is a need for low-rent housing in that locality which is not being met by private enterprise. It is also made clear that preliminary loans made under the lending powers of the PHA are to

be repaid out of the development funds of the projects for which financial assistance contracts are subsequently entered into.

Before any contract on a project initiated after March 1, 1949, is made for loans (other than preliminary loans) or for annual contributions in respect to a low-rent housing project, the governing body of the locality must have entered into an agreement with the local public housing agency to provide the local cooperation and assistance which is required by the PHA pursuant to this act. Moreover, the local public housing agency must have demonstrated to the satisfaction of the PHA that a gap of at least 20 percent has been left between the upper rental limits for admission to the proposed project and the lowest rents at which private enterprise unaided by public subsidy is providing (through new construction and available existing structures) a substantial supply of decent, safe, and sanitary housing toward meeting the need of an adequate volume thereof. This section thus establishes as basic national policy that even with respect to the segment of housing need which the regular operations of private enterprise are not now serving, every opportunity is to be given to it to extend its servicing capacity downward in the income scale.

This section also provides that every annual contributions contract for a project initiated after March 1, 1949, shall require the local public housing agency to fix, subject to approval by the PHA, maximum income limits for admission and for continued occupancy in the project. Such limits must be revised by the local public housing agency if required by PHA because of changed conditions. Such contract shall also require reports showing that, as indicated by actual investigation, every family admitted to the project had at the time of admission an income below the established maximum limit, and that every such family came from an unsafe, insanitary, or overcrowded dwelling, or was to be displaced by another low-rent housing project or by a public slum-clearance or redevelopment project, or was (without fault of its own) either without housing or was about to be without housing pursuant to a court order of eviction. For a period of 5 years, however, these requirements as to previous housing conditions do not apply to veterans or servicemen of low income. In the selection of tenants for low-rent housing, it is also required that there be no discrimination against families otherwise eligible on the ground that their incomes are derived in whole or in part from public assistance. In the initial selection of tenants for a project, preference shall be given (subject to the overriding preferences in Section 202 relating to veterans' preference) to families having the most urgent housing needs; thereafter in selecting tenants due consideration shall be given to the urgency of housing needs. After admission, periodic examinations must be made of the incomes of all families who are tenants in the project so that, if their incomes are found to have increased to the point where they exceed the applicable income limits for continued occupancy, they will be required to move from the project.

SECTION 202. VETERANS' PREFERENCE

Section 202 extends preferences to families displaced by low-rent housing projects or public slum-clearance or redevelopment projects. Such preferences are necessary to enable the rehousing of such displaced families and permit such projects to go forward. Both within

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this group and all other groups, low-income families of veterans and servicemen of World War II will be given preference in admission for a 5-year period. Definitions of the terms "veteran" and "servicemen" are provided in this section.

Specifically, under this section preference is given in all projects initiated after March 1, 1949, to families which are to be displaced by any low-rent housing project or by any public slum-clearance or redevelopment project, or which were displaced by such a project within 3 years prior to applying for admission. As among such families, there is a first preference to the families of disabled veterans and a second preference to the families of other veterans and servicemen (including families of deceased veterans and servicemen). A similar veterans' preference is extended as among families who have not been displaced by a slum-clearance project. All of these preferences, of course, apply only if the family seeking admission is otherwise eligible, and if a dwelling of suitable size and rent is available.

SECTION 203. COST LIMITS

This section is designed to end certain inequities and uncertainties resulting from present cost limits on low-rent housing assisted by the Federal Government, and to compensate for the drastic increase in building costs since the enactment of the United States Housing Act in 1937.

Experience has indicated that existing provisions, which place a ceiling on dwelling-unit costs as well as on room costs, and which provide for higher cost ceilings for cities of more than 500,000 population, are inadequate or faulty, in that (1) a limitation on cost of the entire dwelling unit hampers the provision of housing for larger-sized families of low income and so discriminates against such families; and (2) a differential in cost limits based solely on the size of the community is no longer realistic due to the increasing uniformity in construction costs, including both labor and material, irrespective of city size. The section, therefore, eliminates the limitation on dwelling-unit cost (but not the limitation on room cost, so that the essential limitation on construction costs is still retained in the act) and establishes a uniform ceiling, not dependent upon city size, for the cost of dwelling construction and equipment. In addition, the section simplifies determination of compliance with the cost limitations by specifically basing these limitations upon the cost of dwelling construction and equipment. This will ordinarily permit firm determination of compliance with the cost limitations of the act at the time the main construction contract is awarded.

In order that the drastic increase in building costs may not prevent the provision of housing needed for families of low income, the section provides for a higher cost limitation of $1,750 per room, as compared with existing limitations of $1,000 and $1,250 in small and large cities, respectively. It also authorizes an increase in this cost limitation by not more than $750 per room in areas where it would not be feasible without such an increase to construct the project without sacrifice of sound standards of construction, design, and livability, and where there is an acute need for such housing. The percentage of increase in the cost limitation as provided in this section is substantially less than the percentage of increase in construction costs which has actually occurred since 1937.

Because of special cost problems in Alaska, the section also has special provisions permitting higher costs in that Territory if found

necessary.

This section also will require that the Public Housing Administration, taking into account the level of construction costs in the respective localities, shall approve the amount of all main construction contracts before they are awarded by the local public housing agencies. This is in lieu of a present requirement as to comparison with the average costs of private construction in the locality.

The authorization increasing cost limits is applicable to any lowrent project completed after January 1, 1948. This will make the increased cost limitations available in the case of low-rent projects which were deferred during the war, on some of which a small amount of construction work was done before they were deferred. It will also make the increased cost limitations applicable to, and permit the revision of contracts for, any projects which have proceeded (prior to enactment of this bill) under the provisions of Public Law 301, Eightieth Congress.

SECTION 204. PRIVATE FINANCING

The basic purpose of this section is to amend the financing provisions of the United States Housing Act of 1937 so as to make possible the permanent financing of substantially all of the capital cost of lowrent housing projects by the sale of bonds to private investors, and thus in effect limit Federal lending assistance for low-rent housing primarily to the temporary interim financing necessary prior to the issuance of definitive bonds.

The sale of bonds for the permanent financing of low-rent projects at low-interest rates has been made possible through a pledge of the Federal annual contributions as security for the bonds. Subsection (a) relates to this pledge, and makes it possible, in the event there is more than one issue or class of bonds, to pledge appropriate amounts of annual contributions separately to each issue or class of bonds.

Pursuant to subsection (b), every annual contributions contract (including amending or superseding contracts) may provide that, in the event of a substantial default by a local public housing agency in its covenants to the Public Housing Administration, such local agency shall at the option of PHA be obligated to convey title to or deliver possession of the project to PHA (subject to the right of the local public housing agency to reconveyance or redelivery upon a satisfactory curing of the default). Conveyance of title rather than delivery of possession would be required only when PHA determines that this is necessary to achieve the purposes of the act. After taking title or possession, PHA would continue to make annual contributions for the project, but not in excess of the amounts contracted for pursuant to statute. This would assure both (1) that the project will continue to operate as a low-rent housing project, and (2) that investors who have furnished the capital funds for its construction in reliance upon the continuance of its low-rent character and the making of annual contributions therefor during the entire life of the loan, will have their investment adequately protected. With this assurance there is every reason to anticipate that private capital will be willing to furnish practically all of the capital cost through long-term loans and to do so at low-interest rates.