LUXURY ACCOMMODATIONS

The committee has included a provision which will decontrol socalled luxury housing accommodations, which are defined as any unfurnished apartment occupied by a single family rented for $290 per month or more. Your committee sees little justification for retaining under rent control accommodations of this type. Persons who can afford to pay this amount for rental quarters hardly need the protection of the Federal Government in the matter of the amount they pay for shelter. Inasmuch as in certain areas of the country luxury accommodations might command a lesser figure, authority is given to the Housing Expediter to fix any lesser figure he determines is representative of rentals for luxury accommodations in any defense-rental area or portion thereof.

RIGHT TO HEARING AND APPEAL

In order to assure representative groups of tenants or landlords an adequate hearing and prompt decision in connection with petitions for decontrol, recontrol, or general rent adjustments in a defense-rental area or portion thereof, the bill provides that the local board in such cases shall give notice to interested parties and hold a public hearing in accordance with the procedures now contained in the Housing and Rent Act of 1947, as amended.

The bill further provides that if for any reason the board fails to provide petitioners with an adequate hearing on such matters within a reasonable time, the Housing Expediter must provide such a hearing and render a prompt decision. Recommendations of local boards are to be submitted to the Expediter for review as at present. However, if any representative group of interested parties or the local board itself is dissatisfied with the decision reached by the Housing Expediter, they may appeal from his decision to the Emergency Court of Appeals. A similar right of appeal is afforded to such groups or the local board in cases where the local board or Housing Expediter makes a recommendation or decision within the scope of the act on its or his own initiative and in the absence of any petition for such recommendation or decision. The committee wishes to assure any representative group of tenants or landlords of an opportunity to be heard in the appropriate forums on matters affecting their interests when decisions are made on decontrol, recontrol, or general rent adjustments.

LANDLORD CERTIFICATION

Since it is expected that the landlord will receive, by virtue of the provisions of this bill, more income from rental properties than he is receiving at present, the committee felt it fair to require that the landlord, in seeking an individual adjustment in the maximum rent, must certify that he is then maintaining and will continue to maintain all services furnished in connection with the housing accommodations as of the date the maximum rent for such accommodations was last determined prior to the date of his petition for an adjustment, and that such services will be maintained so long as any adjustment granted by virtue of such petition remains in effect. It should be particularly noted that the services as to which the landlord is required

to certify, are those being furnished on the date the maximum rent for the accommodations was last adjusted, in the event one or more adjustments have been made in such maximum rent since the date upon which the maximum rent was established for such accommodations under Federal rent control.

ADMINISTRATION AND ENFORCEMENT

Under existing law the tenant may sue for treble damages for rent overcharges in excess of the maximum rent, within 1 year after the date of such violation. This provision has not proven effective in securing compliance with the law. For various reasons tenants are reluctant to report violations or to pursue their remedies under the law. Accordingly the committee has included a provision that if the tenant fails to institute such action within 30 days, the United States may institute the action and thereafter the tenant would be barred from bringing an action for the same violation. This provision should be a deterrent to any black market in overceiling rents.

There are no criminal penalties for violation of the existing rent law. It is true that the Housing Expediter may enforce compliance by injunctive process but this is not too effective, and inasmuch as the committee believes that any control in this field should be effective control the committee has included a provision subjecting willful violators to a fine of not more than $5,000 or imprisonment for not more than 1 year, or both. The law will apply to violations of the act or any regulation or order issued thereunder and false statements or entries in documents or reports required to be kept or filed under the act. The committee desires to emphasize that it is only willful violations that are punishable.

The bill would also give the Housing Expediter authority to issue regulations governing the eviction of tenants from controlled housing accommodations. This will permit uniformity in the operation of eviction provisions, which under existing law are the subject of variation between local courts which results in actions that are discriminatory as between tenants in different local court jurisdictions. The committee believes that restrictions on evictions should be the same in every locality.

As an aid in administration and enforcement, the bill authorizes the Housing Expediter to conduct investigations and hearings and to issue administrative subpenas for purposes of obtaining documents or witnesses. Certain other new provisions, with appropriate safeguards to affected parties, would be included to clarify procedure and facilitate enforcement of the act and regulations.

In connection with the need for the foregoing strengthening provisions in the administration and enforcement of the law the committee desires to quote the following pertinent statement from the report of the Committee on Banking and Currency of the House on this bill (H. Rept. No. 215, 81st Cong., 1st sess., p. 6):

While the present law permits tenants to bring suits for overcharges and to defend themselves in local courts against illegal evictions, the facts are that these provisions have proven totally inadequate to secure reasonable compliance with the law. It is evident that tenants are paying overcharges without resort to court actions. Tenants are reluctant to report violations to area rent offices because of their fear of eviction. Despite widespread violations, the number of tenants' complaints filed and compliance actions started under the 1947 and 1948 acts is far less than the corresponding figures for the previous 12 months. Thus,

the average number of tenants' complaints filed each month since July 1, 1947, was 34,000 as compared with a monthly average of 52,000 during the preceding 12 months. Similarly, the number of compliance actions averaged 17,600 per month since July 1, 1947, as compared with a monthly average of 49,300 during the preceding year. In surveys of military establishments, where violations were definitely established in interviews, 55 percent of the tenants refused to file a complaint and 60 percent of these gave "fear of eviction" as the reason. This is also the principal explanation given by tenants who refuse to supply area rent offices with evidence upon which action could be taken. The record reflects that many tenants have acceded to landlords' demands because of eviction fears. Given the alternative of paying black-market rents or being evicted, tenants choose to pay the overcharge without complaint. In some instances, of course, such fears may well be unfounded because the tenant could have successfully defended himself against illegal eviction in the local courts. Nevertheless, many tenants will not run this risk. In other words, the present system just has not worked. The result is a gradual break of the legal ceiling.

ASSISTANCE TO TENANTS AND SMALL LANDLORDS

In order to afford assistance to tenants and small landlords there is included in the bill a provision authorizing and directing the Housing Expediter to designate officers for defense-rental areas whose function will be to assist tenants and small landlords by (a) informing them concerning the conditions under which rent adjustments may be obtained, (b) helping in the preparation of applications for rent adjustments, and (c) providing them with such other information and services as may be necessary and appropriate. It has come to the attention of your committee that unfamiliarity with the law has been a contributing factor in failure of some persons to take advanagte of its provisions, including the hardship provision, and this amendment will be of considerable value in alleviating that situation. The Expediter is encouraged to use every practical means to acquaint small landlords and tenants with the forms to be used in obtaining the adjustments the act makes possible.

DEFINITION OF RENT

The committee deemed it advisable to redefine "rent," in order to be certain that it will include not only the formal rent specified but also all additional consideration received by the landlord, by whatever device obtained, in connection with the occupancy by the tenant of the particular rental accommodations involved. This definition is the one now contained in the regulations of the Housing Expediter.

EXPLANATION OF AMENDMENT BY THE SENATE BANKING AND CURRENCY COMMITTEE TO H. R. 1731 BY TITLES AND SECTIONS Section 1

This section provides for a short title: "Housing and Rent Act of 1949."

TITLE I-AMENDMENT TO TITLE I OF HOUSING AND RENT ACT OF 1947, AS AMENDED

Section 2

This section amends section 4 of the Housing and Rent Act of 1947, as amended, to continue to June 30, 1950, and strengthen the preference to World War II veterans and their families for the purchase or rental of housing accommodations completed after June 30, 1947.

This veterans' preference applies to accommodations created by conversion in the same manner as newly constructed accommodations. It applies in any resale or rerenting as well as on a first sale or rent except that the preference period on a resale or rerenting is 7 days instead of the construction period plus 30 days. Veterans' preference applies to prefabricated houses and to dwelling units covered by any cooperative mutual-ownership plan. The provisions for veterans' preference may be terminated prior to June 30, 1950, by Presidential proclamation.

Subsection (a) of section 4, in reference to sales, provides that no housing accommodations designed for single-family residence, the construction or conversion of which is completed after June 30, 1947, shall be offered for sale or resale, sold or resold, to persons other than veterans of World War II or their families, unless such housing accommodations have been publicly offered for sale or resale exclusively to such veterans or their families (a) during the period of construction or conversion and for 30 days thereafter, prior to a sale or offering for sale to such nonveterans and (b) for a period of 7 days prior to a resale or offering for resale to such nonveterans.

Subsection (a), in reference to rentals, provides that no housing accommodations designed for occupancy by other than transients, the construction or conversion of which is completed after June 30, 1947, shall be offered for rent or rerent, rented or rerented, to persons other than veterans of World War II or their families, unless such housing accommodations have been publicly offered for rent exclusively to such veterans or their families (a) during the period of construction or conversion and for 30 days thereafter, prior to a first rent or offering for rent to such nonveterans and (b) for a period of 7 days prior to a subsequent renting or offering for rent to such nonveterans.

Paragraphs (3) and (4) of subsection (a) provide, in addition, that sales or offerings for sale, and rents or offerings for rent, to persons other than veterans of World War II or their families shall not be made at a price less than the price for which the accommodations had been last offered to veterans or their families.

Subsection (b) defines the terms "person" and "housing accommodations" for purposes of this section.

Subsection (c) authorizes the Housing Expediter to issue regulations and orders and to grant exceptions to the provisions of the section for hardship cases.

Subsection (d) provides for the termination of this section at the close of June 30, 1950, or upon the date that the President proclaims that the protection to veterans of World War II or their families provided by this section is no longer needed, whichever date is the earlier.

Willful violators of the provisions of this section are subject to a fine of not more than $5,000 or to imprisonment of not more than 1 year or to both such fine and imprisonment. There is no specific provision in this section for such penalties since section 205 amends section 206 of the Housing and Rent Act of 1947, as amended, to include criminal sanctions for willful violations of any provision of the act.

Section 201

TITLE II-MAXIMUM RENTS

This section amends section 202 (c) and 202 (e) of the Housing and Rent Act of 1947, as amended.

Paragraph (1) of section 202 (c) would be amended to exclude. from the definition of "controlled housing accommodations" any housing accommodations in hotels, which accommodations were, on June 30, 1947, used for transient occupancy. Thus, any housing accommodations in hotels, which accommodations were, on June 30, 1947, used for permanent occupancy would be recontrolled and made subject to the provisions of this title, but at rents being charged on October 31, 1948, as prescribed in section 204 (h) of the act.

Paragraph (2) of section 202 (c) would be amended to continue to exclude from control tourist homes, serving transient guests exclusively, motor courts, motels, trailers or trailer spaces, or any part thereof except that recontrol of housing accommodations in any motor court, motel, trailer, or trailer space or any part thereof which on March 1, 1949 were rented for permanent occupancy may be effected on recommendation of a local advisory board.

Paragraph (3) of section 202 (c) would be amended to exclude from the definition of controlled housing accommodations any housing accommodations created by a change from a nonhousing to a housing use on or after February 1, 1947. This has been done by regulation under the present law. The exemption in the present law of additional housing accommodations created by conversion on or after February 1, 1947, is continued, but a proviso is added providing that housing accommodations resulting from conversion created after the effective date of the Housing and Rent Act of 1949 shall continue to be controlled housing accommodations unless the Expediter issues an order decontrolling them, which he shall issue if he finds that the conversion resulted in additional self-contained family units as defined by regulations issued by him. In addition, the bill continues to exclude from the definition of controlled housing accommodations those which for any successive 24-month period from February 1, 1945, to March 30, 1948, were not rented (other than to members of the immediate family of the landlord) as housing accommodations; however, the local board may recommend the recontrol of this group of housing accommodations if in its judgment the demand for such housing accommodations has not been reasonably met, as is more fully provided by section 203 (c) of this bill amending section 204 (e) (1) of the Housing and Rent Act of 1947, as amended.

Section 202 (c) would be further amended by adding a paragraph (5). This would exclude from the definition of controlled housing accommodations luxury housing accommodations. Luxury housing accommodations are defined as any unfurnished apartment occupied by a single family, renting for $290 a month or more or any lesser figure which the Housing Expediter may determine is representative of rentals for luxury accommodations in any defense-rental area or part thereof.

Subsection (e) of section 202 would be amended to expand the definition of the term "rent" to include any bonus, benefit, or gratuity demanded or received in connection with the occupancy of housing accommodations or the transfer of a lease for such housing accommodations.

Section 202

This section relates to the transfer of records to local governments that may be charged with the administration of local rent control after termination of Federal rent control. This section rewrites section