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Mr. HAYS. Well out in my section prices are considerably below what they are in this area, and I have had occasion to look at some houses lately with a view of making a loan on them, and they were fantastic little cheese boxes. They tell me that they cost fourteen and fifteen thousand dollars, and should be so appraised.

Mr. COLE. Mr. Hays, I just can repeat that in the best careful judgment, and best investigation that I can make, it can be done, and we are willing to stake that judgment on this recommendation. Once more, and continually, I must repeat: We don't expect that this will be a palatial luxury home. It can't be. It cannot be built in some specific spots where land costs are high. It must be built in low-cost land areas. There isn't any question about that.

All I am saying to the committee is that here is an effort, this is one more step. Congress is not going to permit direct subsidy, direct building of homes in this class. I am merely saying, let's do something to try to get houses for people with low incomes. That is all I say. Let's try it. Let's make an effort to do it. Are we just going to sit and say "We are not going to do anything about it?" Not me. I am going to say "I want to do something about this problem," and I face it practically and realistically, by saying that as I see the problem, the present housing program-and again, I underscore the fact that this is not a substitute for public housing in the lower income brackets--but as I see the public housing program, Mr. Hays, I don't see that Congress is ever going to establish a great program of 150,000 or 125,000 units a year of public housing.

I want to do something to help people in the lower income brackets get adequate homes.

Mr. HAYS. Mr. Cole, I think you misinterpreted my intent. I am sympathetic to the housing program and I am not an advocate of a tremendous public housing program. I think you should know that from being on the committee.

Mr. COLE. Yes, I know that.

Mr. HAYS. I do believe that there is a certain amount of public housing necessary, at least three times as much as this bill calls for, but I have never been one who thought the Federal Government should go into an unlimited program. I am trying to be realistic. I built a little addition to my barn this fall, with labor much cheaper than you can hire it here. I bought no land. The land was already there. It isn't finished on the inside. There is no plumbing in it except three drinking cups, and the thing cost me $4,000 for a 20 by 30 building.

Now, I just know a little bit from personal experience about building costs and I just don't think that you can get a house for $7,000 that anybody wants to live in long enough to get it paid for.

Mr. COLE. I think to carry this discussion further would be pointless, because I am not a builder.

Mr. HAYS. Well, I am not either.

Mr. COLE. And I am not an expert in it. But there will be people following who are supposed to know more about it than I, and I hope you will question them closely upon this point.

Mr. HAYS. I hope they can do it. I think it would be grand if they can. But I was just trying to get some information on how it can be done. Thank you, Mr. Multer.

Mr. MULTER. Thank you, Mr. Chairman.

Mr. MCDONOUGH. Mr. Chairman.

The CHAIRMAN. Mr. McDonough.

Mr. MCDONOUGH. Without attempting to be out of order, Mr. Chairman, I just wanted to continue the reading of the amendment, Mr. Multer read to the committee in last year's housing bill concerning public housing units, and from where you stopped I am beginning to read, Mr. Multer, which reads:

And during the fiscal year 1954, the housing and Home Finance Administrator shall make a complete analysis and study of the low-rent public housing program, and on or before February 1, 1954, shall transmit to the Appropriations Committee of the House and the Senate his recommendations with respect to such low-rent public housing program

which is in relationship to the proposal the President made, and indicates that it is the desire of the administration to see that so many public housing units shall be built during the fiscal year. What the report of the Administrator to the House and Senate will be, I don't know, but that is part of the amendment, and consequently the desire of the Congress.

You say there isn't any legislation available. It is there. The authority is there. Any added authority that this committee might add to this bill is just a repetition to what is already on the books.

Mr. MULTER. How anything that you read in this law, requiring a report to be made to the Appropriations Committee, can affect the number of houses to be built is beyond me.

Mr. MCDONOUGH. It is certainly up to the judgment of the Housing Administrator.

Mr. MULTER. You have just read that all he is supposed to do is study and report. You can't get housing out of a study or report. You get it pursuant to authorizing legislation, not from a study or report. There is nothing in this that says if we report we need a hundred thousand units, that we will build a hundred thousand units. The study and report is merely informative to the Appropriations Committee. But why should the Appropriations Committee get that kind of information rather than this committee?

Mr. MCDONOUGH. Well, when Congress adopted the amendment they asked that the report be made.

Mr. MULTER. The President has said regardless of the report we need 35,000 new units a year.

Mr. MCDONOUGH. That is an indication of what the Administrator will recommend.

Mr. MULTER. That is what the President recommends as a minimum. It is a strange thing that the minority party must argue for the program of the President who was the candidate of the majority party. Mr. MCDONOUGH. Mr. Chairman, I have a question. The CHAIRMAN. Mr. McDonough.

Mr. MCDONOUGH. Mr. Cole, before I came in I understand Mr. Hiestand reviewed the possibility of an amendment to the bill which would limit the authority of the public housing authorities throughout the country so that they would be responsible to some extent to the appointive power. Do you think such legislation should be added to this bill, or do you think that the power of the public housing authority is a little too broad, and that there should be something in the bill to reduce it so that we wouldn't override or attempt to override the local authority?

Mr. COLE. Mr. McDonough, I am sure that some of the unfortunate occurrences which happened in the past would be eliminated perhaps if that were done. May I point out to you, however, that my own personal basic philosophy_about matters of this sort would oppose that type of an approach. I don't believe the Federal Government should intrude on matters which are appropriately within the area of State control by State and local legislation.

I believe in this program being a local program, within all of the areas possible. It should be locally conceived, locally planned, locally programed, locally carried out.

Now, saying it in as nice a way as I can, if a community has badly planned, badly contracted for, carried out the program erroneously, we have certain responsibilities because we have a support-the Federal Government, I mean, we are assisting by subsidy. So we have a certain support.

But if you will take time to examine all of the reasons for local responsibility of the authorities in this bill, I would hesitate very much before I would recommend that the Congress, in its legislation, say that certain things must be done locally, and control taken away from the local people.

Mr. MCDONOUGH. I wouldn't say that any control should be taken away from them. I mean to say that they should have complete control, and that they should also have some jurisdiction over the autonomy that the public housing authorities now have.

Mr. COLE. I have been very disturbed about that problem, Mr. McDonough, not only as administrator but as Congressman. I have been very disturbed about the fact that an autonomous agency is set up in a community without any responsibility flowing to the elected offcials, but I think it is their job to see that that does not happen. That is clearly a matter for the States to decide themselves.

In my judgment there are so many overriding reasons why the Federal Government should not interpose its judgment, either on the State Legislature or on the city in connection with this public housing authority, that I can't recommend it, even though I am quite disturbed about it.

Mr. McCDONOUGH. Let me give you an instance. If there had not been a voluntary compromise arrived at between the Federal Government and the Los Angeles public housing authority, the public housing authority could have proceeded, in defiance of the vote of the people of Los Angeles and of the State of California, to seek the funds from a bond issue, an attractive bond issue, that was bought very readily by the financial institutions, to build 10,000 public housing units in Los Angeles.

Mr. FITZPATRICK. It is not a matter of cooperative agreement, Mr. McDonough. It is a matter of the provisions in the State laws. Most of the State laws, as I recall them offhand, do provide for the appointment of commissioners on staggered terms, and also provide that they may be removed by the appointing power for malfeasance in office or failure to perform their statutory duties.

I do not know of any offhand which provide that they serve at the pleasure of the appointing power; there may be some. In any event, the State legislatures can so provide if, in their discretion, they deem

it wise.

Mr. MERRILL. I think that under Indiana law the mayor has the power to remove every person he appoints in the city administration, which would mean in Indiana that we have decided we want to keep our finger on those things.

Mr. FITZPATRICK. I can check Indiana law for you, but it is a matter of the choice of the State legislature.

Mr. MERRILL. What we want to do is in our own wisdom, or foolishness, make our decision.

Mr. FITZPATRICK: That is right.

The CHAIRMAN. May I request some information from Mr. Fitzpatrick. Is there anything, other than in the definitions of the Public Housing Act, which has to do with the setting up of these authorities? Does a local housing authority come under the definition of a public housing agency under the law?

Mr. FITZPATRICK. Yes, sir, it does.

The CHAIRMAN. All right, let us settle this now and see if we cannot get somewhere on this question.

Section 9 of the United States Housing Act of 1937 states:

The definition of a public housing agency—

a public housing agency—

means any State, any county, any municipality, or other governmental entity or public body, exclusive of the authority—

that is the Federal authority

which is authorized to engage in the development or administration of low rent housing and slum clearance.

Now, I assume from that that the local housing authority must have been set up by the State legislature, under such terms and conditions and limitations as stated in the enabling act setting up the authority, over which the Federal public housing authority has no jurisdiction any more than it would have jurisdiction over a municipality or State. Mr. FITZPATRICK: That is entirely correct, Mr. Chairman.

The CHAIRMAN. I think that perhaps we might place some limitation upon the authority which they have to meet the Los Angeles situation or any other situation, but under existing law, according to the law as I read it, I must agree with Mr. Cole that they have not any jurisdiction, administratively, over the local housing authority which has been set up under State law, any more than they would have over a municipality or a State which in itself is a distinct entity. The State can create a distinct political entity, which they call a housing authority, to deal with the Federal public housing authority in those respects; unless the act sets up other standards, then Mr. Cole is correct, that we have no jurisdiction over it.

There may be a looseness in the law in that respect, but, of course, if there is a looseness in the law then we must take into consideration that any tightening up of the law must apply as well to the States, themselves, or the municipalities.

Mr. FITZPATRICK. In Mr. Wolcott's own State, the legislature did choose to deal with it in a different way. They chose there to vest the basic powers in the city. Under the Michigan law, the power to issue the bonds, for example, may be exercised only by the city.

In Michigan the Housing Commissions function solely as an agent of the city, and the basic control, basic powers, are invested in the city.

There are 2 or 3 other States that have followed the same pattern as Michigan.

The CHAIRMAN. Let us be clear on this Los Angeles situation, now that we are on it. As I understand it, and I may be wrong, a new mayor was elected; a day or so before he was to take office the outgoing mayor appointed a public housing authority thereby, under the enabling act, tying the hands of the new mayor so that the new mayor could do nothing whatsoever about it.

Now, I ask Mr. McDonough and Mr. Hiestand this question: Is the public housing authority set up in Los Angeles a self-perpetuating unit, over which the State legislature has no jurisdiction?

Mr. MCDONOUGH. They have so declared.

The CHAIRMAN. Who has so declared?

Mr. MCDONOUGH. The Public Housing Authority.

The CHAIRMAN. Or is it a contract between the State and the Public Housing Authority which cannot be terminated by State law?

I have always sympathized with your problem out there, but I think it is purely and simply a State question and not a Federal question.

Mr. MCDONOUGH. The situation stems to the original contract made by the original Public Housing Authority of the previous mayor of the city of Los Angeles.

The CHAIRMAN. I am sure the question came to the Public Housing Authority here in Washington early. But the State legislature could have acted and made it possible for the new administration of Los Angeles to set up a new housing authority, which could have rescinded by resolution or otherwise the action of the housing authority which was given this autonomy the day before it took office.

I am sure the situation in Los Angeles would have been different, because the new public housing authority would have abided by the wishes of the new authority.

Mr. MCDONOUGH. The previous housing authority, under the previous mayor of Los Angeles, the judicial review of this authority in relation to the original contract was reviewed by the State Supreme Court, that it was a contract entered into in good faith and would have to be abided by.

The CHAIRMAN. It could have been rescinded, of course, only by the same agency that entered into the contract in the first place, so a new public housing agency, set up under a new concept of public housing under State law, could have rescinded the action taken by the then existing public housing authority.

I have never understood why the people of Los Angeles did not seek relief through the State legislature. I do not think we have any jurisdiction over the matter down there.

Mr. COLE. Mr. McDonough, isn't part of the answer to your question the fact that the Los Angeles situation has been settled, completely?

Mr. MCDONOUGH. No, I would not say that. The question that I am concerned about is that, from the autonomous action of the public housing authority in Los Angeles, that it appears to me that under

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