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Senator SPARKMAN. Senator Bricker?
Senator BRICKER. No questions.

Senator SPARKMAN. Mr. Kreutz, I think of a good number of questions I might ask, but I will limit myself to only one: Am I correct in understanding that last night you became a grandfather?

Mr. KREUTZ. Yes; that is right. For the first time.

Senator BRICKER. That means another house will be necessary some day.

Senator SPARKMAN. Thank you very much.
Mr. Donald Monson.
Will you identify yourself for the benefit of the record, please.

STATEMENT OF DONALD MONSON, ON BEHALF OF SCHOOLCRAFT

GARDENS, DETROIT, MICH.

Mr. MONSON. I am one of these middle-income people. I represent Schoolcraft Gardens Cooperative, a group that has been trying to build one of these cooperatives, and is now in the process of getting started on one in Detroit.

Senator SPARKMAN. Do you wish to be seated?
Mr. MONSON. Thank you.
Senator SPARKMAN. Proceed, please.
You do not have a prepared statement?
Mr. MONSON. I do not, sir.
Senator SPARKMAN. Proceed in your own way, please.

Mr. Monson. Our group started in Detroit about 3 years ago, when a group of families interested in the development of a cooperative project, as an attempt to get better housing at lower cost, bought a piece of land and started to see what we could do in this particular line.

Senator BRICKER. How many families? Mr. Monson. We have now about 100 people in our association who have gotten together into what we call Detroit Cooperative Housing Association. In the course of this period we got the aid of members of the labor organizations, of veterans' groups, and so forth, to form an advisory board, to which we presented all of our difficulties, and what we proposed to do. Among others on that board are Governor Williams, who represented the veterans organizations of Detroit before he was elected Governor of Michigan, and is still on the advisory board of ours, but in our brochure which we have passed aroundthis gray-covered book-Governor Williams makes the statement that cooperative housing is a fine manifestation of the American way of doing things of the capacity of our people to get together and help themselves to meet their own needs.

Together with public housing projects and the private building industry cooperative housing has a definite role to play in providing adequate homes for all our people.

Among others on our board we have Mr. Finlay C. Allan, secretary of the Detroit Building frades Council, AFL. He made the statement, also, that:

Inasmuch as the possibilities of private home ownership are usually limited to families in the higher income brackets, cooperative housing offers advantages to families of moderate income through large-scale planning and lower financing

costs.

Organized labor has a stake in cooperative housing both as consumers and as producers. As consumers, we are the majority of the families of moderate income who need good housing and, so far, have found difficulty in securing it at a price we can pay. As producers, we are interested in providing decent homes for all income levels in order to insure a continuing market and a prosperous Nation.

I have worked with the sponsors of Schoolcraft Gardens Cooperative from the beginning and have been particularly impressed with the careful planning that has gone into it and by the fact that these plans are workable plans made by practical people.

Victor G. Reuther, educational director, UAW-CIO, also writes:

I have no hesitation in calling the homes in Schoolcraft Gardens the "best buy' in Detroit today. The member family will get bigger rooms and better design and equipment for his money than in any other housing now on the market.

Good homes in a good neighborhood, plus genuine cooperative ownership, mean lower prices as well as security for the family savings. I have participated in organizing this co-op, and I have great hopes that this is but the first of a growing number of cooperative housing developments in which our members, together with other American families, may get much-needed homes at prices they can afford.

Senator SPARKMAN. May I ask you, Mr. Monson, are you an architect, yourself?

Mr. Monson. I am working mostly as a city planner; up until the last few months I have been employed by the Detroit City Planning Commission.

Senator SPARKMAN. I noticed the reproduction of the article you had written for the American City. It says senior architectural planner, Donald Monson. That is you, is it not?

Mr. MONSON. Yes.

Senator SPARKMAN. I notice you have a very good mimeographed statement here that I think could very well be incorporated in the record in toto, if you would like to have that done.

Mr. Monson. If you wish.

Senator SPARKMAN. You have some charts that I fear we will not be able to put in, although I wish we might, because you give a good illustration of how a cooperative project is detailed and developed and some of the things that you are hoping to accomplish by it.

I wonder if I might ask you to tell us in a few words how did you start, or how did this cooperative start? What prompted it?

Mr. MONSON. The situation in Detroit was that we in the middleincome groups, those of us who were in the white-collar classes, working in government and the unions, and so forth, found that our only choices, after the war, were that we could buy, or rent 608's which started—for one bedroom-around $80, but two bedrooms you paid a minimum of $95, and then you had to pay your utilities; and you didn't get an adequate house for family life. You got a 600-squarefoot, cramped apartment, which is not meeting with very much favor in Detroit.

Senator SPARKMAN. At a price that was difficult to pay.

Mr. Monson. That is right. Secondly, we could buy the economy house, two bedrooms, 24 by 24 feet, that is the usual size if you had more than one child, and many of our members have up to four children.

Presently we are on our first 54 groups, and our first Morgan unit, which we have just supplied the building plan to the building department on, are clearing the last details of an FHE mortgage insurance.

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We have 10 four-bedroom units. When it came to those families with many children, two or more, it was impossible to get an adequate house in Detroit at a price they could afford. For that reason we felt that we should explore the question of cooperative housing and find out what we could do by eliminating the various speculative charges made, and secure to ourselves the benefit of these certain things which in rental housing are done, naturally, at a price, by the entrepreneur. We also felt that because we would have one mortgage over a number of groups, and we do our own bill collecting, posting, and so forth, one of our group would do that, we could reduce the costs, and we felt that we would be justified in asking a lower interest rate on that.

Senator SPARKMAN. You haven't built any yet?
Mr. Monson. We have not.

Senator SPARKMAN. You are just getting ready to build your first project?

Mr. MONSON. Yes, sir.
Senator SPARKMAN. That is to be a 10-family unit?

Mr. Monson. No; we have 54 in our first mortgage unit. have land, which we own now, and which is available for extending, which will hold a total of 450 dwellings.

Senator SPARKMAN. Your plan is to put in 50?

Mr. Monson. We are planning on starting 50 as soon as possible. We hope before the end of the month.

Senator SPARKMAN. Fifty units?
Mr. Monson. Fifty-four.
Senator SPARKMAN. What type will that be?

Mr. Monson. Twelve apartments in a single building of which two will have one bedroom, living room, and so forth, and the rest of them will be two-bedroom apartments. The rest of the units will be two, three, and four bedrooms, with terraces.

The larger units, as much as the four-bedrooms, are in two-unit dwellings, while the three's come in two and four units to a building, We have laid it out so as to have the most economical use of roads, and so forth.

Senator SPARKMAN. I believe that you present in the mimeographed paper a comparison of rents?

Mr. Monson. That is right.
Senator SPARKMAN. That you will have to pay?
Mr. MUNSON. That is right.

Each member is a shareholder in the Schoolcraft, in the whole development. He then rents from the cooperative his own apartment. He is in that apartment for an unlimited tenure, so long as he abides by the rules of the cooperative. We have in our bylaws an elaborate procedure that you would have to go through to determine a termination of rent. If such lease were terminated, the member would have to be given his equity at the point of termination, If he wants to leave the co-op, he must offer his equity. That is, the share capital and the accumulated equity. That he must offer first to the cooperative. If the cooperative cannot buy it, when they have first option of purchase, then he is free to sell that equity to whomever he may.

There are other provisions, such as in case of stress, the cooperative can rent that, and so on.

Senator SPARKMAN. From whom are you obtaining the money? I don't mean individually. From private lenders, or FHA, or whom?

Mr. Monson. We have now set up under the Cooperative Act that was passed by the Eightieth Congress; that provides that we must ask roughly 12.5 percent equivalent down payment which is the share capital as to each member. We have all of that for our first group paid in now. We are ready to go on that. We having under that act a mortgage insurance from the FHA and we have our bank of deposit, which has agreed to process the loan, to take both the shortterm building money and to handle the loan. That is the system we now have.

Senator SPARKMAN. Did you have any difficulty in arranging your financing under the FHA program?

Mr. Monson. Yes; when we first began, this was before the Eightieth Congress, we applied as a section 608.

Senator SPARKMAN. I mean since that time; since the adoption of the Housing Act of 1948 when the cooperative feature that you mentioned was included.

Mr. Monson. It took us about a year to clear that to the point where the FHA was going along and seeing to it that this would work. Up to that time we had difficulty in getting the people to understand what we were talking about.

Senator SPARKMAN. Did you have any difficulty in getting local financing?

Mr. MONSON. Well

Senator SPARKMAN. With the understanding that it was to be insured under the FHA program?

Mr. MONSON. Well, sir

Senator SPARKMAN. Are you getting your financing from local banks?

Mr. Monson. Yes. Senator SPARKMAN. Or insurance company, or what? Mr. Monson. We are getting our financing from a local bank. However, if for instance a local bank can buy mortgages of various types with FHA insurance, it obviously is not interested in any mortgages written, say, up to 90 percent of cost, which are not FHA insured. We found it necessary to clear with FHA to get a mortgage commitment from FHA, which we have. Once we had that, we had no difficulty. However, the point I wanted to raise in regard to this cooperative, and the reason why the group asked me to come and testify in favor of this bill is that under the present provisions we can take up only the upper levels of the middle-income group. The people who need these houses and whom we really want to serve and who are the vast majority of the membership of the unions are somewhat lower than the incomes of this first group there.

Senator SPARKMAN. That applies both to the amount they will have to pay and the initial payment, 12.5 percent?

Mr. Monson. Yes.

Senator SPARKMAN. In other words, the lower middle-income family, having to pay $90 a month rent, can't squeeze any additional savings?

Mr. Monson. That is right. May I run through what the bill would do for us, as we understand it, on the one bedroom unit? We would save on the monthly charges about $19.30 on the one-bedroom apartment. On the two-bedroom apartment, we would save $22.50.

On the three-bedroom interior apartments, we would save $25.20. Four bedrooms would be about the same. Now, that would apply to bring our total housing costs for most down on a monthly basis, which includes utilities, reading across, about $55.70 for a one-bedroom unit, our lowest two-bedroom units would be about $63.45. The threebedroom about $71.80. Four bedrooms would be $82.50. I want to point out this is not shelter rent. It includes all utilities. The complete landscaping, paving of the streets. These include houses which are of the following size: Our one-bedroom apartments have 760 square feet; two bedrooms, middle, will be 1,000; our two-bedroom terraces have 1,040 square feet; our three-bedrooms have 1,200 and our four bedrooms have about 1,500 square feet at the ends. We believe these are about the sizes of housing, dwelling units, which are necessary for adequate family life.

When you have four children you cannot cram them into a small living room and try to operate a kitchen which does not have room to serve the children.

We found that through the cooperative we can do those things to bring our costs down. We have made a comparison between a typical two-bedroom terrace and a typical two-bedroom house, which was published and advertised in the Detroit News of June 6, 1949. If I may, I will run through that to show how we stack up against the best that the builder has to offer in Detroit.

Senator SPARKMAN. May I ask this: You refer to apartments and terraces. By terrace, do you mean the two or three-family individual units, or a one-family house?

Mr. Monson. Well, a terrace in Detroit is an attached house. It is a completely separate house. You have no group living of any kind. . You have a piece of land on which the house sits. It is the common form of middle class housing in the city of Washington, and if as the previous witness said, we are advocating group socialized living, the city of Washington is already socialized.

Senator SPARKMAN. In Washington they are called "row houses." Mr. Monson. That is right. Our apartments are two-story units. They have the same stairway. Each with its own individual basement. There are no common facilities, except the entrance, the walk to the apartments, but in the row houses, it is a completely individual unit. The only thing is they are attached.

We use this form-
Senator BRICKER. Something like we used to call “flats.”

Mr. Monson. They are called "row houses” here. In Detroit they are terraces. Practically all of the Detroit production is by private builders under section 608, and they are putting up terraces. So we are not introducing any new, untried form of housing.

This is quite common, and the builders and the mortgage bankers have found them quite acceptable and desirable units.

Senator SPARKMAN. Of course, all the row houses put up in Washington were put up by private builders.

Mr. MONSON. Yes.

We believe we have improved this form. We have made the house more shallow. Every room has light. We have made them wider. We have made them much lighter. We are giving everything that the builder has, plus a lot of things he leaves out. For instance, our house, two-bedroom attached, is one thousand square feet, and the

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