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title. Today these title companies are getting into this field so it costs you either $10 or $20 to search title on a $2,000 loan. That is quite reasonable. And we are delighted to see the title companies doing it. Mr. MUMMA. Do they certify and guarantee it?
Mr. NORTHUP. Yes.
Mr. MUMMA. There would be a difference between certifying it and guaranteeing it, wouldn't there?
Mr. NORTHUP. Yes, they guarantee it.
Mr. MUMMA. Then it is up to them.
Mr. NORTHUP. They are taking the risk, that is right.
Mr. MUMMA. When the banker does it the mortgage company takes it?
Mr. NORTHUP. Yes.
Mr. OAKMAN. If it is a property that has an existing mortgage, it is much more easily traceable than one that hasn't.
Mr. NORTHUP. That is right.
Mr. OAKMAN. The mortgagee usually keeps the tax bills right there in the file. It was a first mortgage when he took it, and nobody can get a priority lien except the tax collector who slips a couple on there a year, so if you have your tax bills you are in pretty good shape. It is just a routine, mechanical affair.
Mr. NORTHUP. That is right. This whole problem is another question of educating many of the lending institutions. The savings and loans have been doing this for years, but the commercial banks and many of the mortgage bankers, and, as I stated, many of the insurance companies have been doing it, but it hasn't been generally done because there has been no pressure to do it.
Now that we really need some adequate long-term credit for modernization and repair work, we believe this is the soundest way to get that credit, and the best for the customer as well as for the industry, and the owner of the primary mortgage.
Mr. OAKMAN. A spokesman for the commercial banks testified against the open-end mortgage, and he thought that the cost of clearing the old mortgage, putting a new mortgage on the property, would be I don't think he used this word, but, in effect, incidental? Do you feel that is the case? You are not a mortgage banker? Mr. NORTHUP. I am not a mortgage banker.
Mr. MUMMA. You are familiar with the cost of discharging a mortgage, recording the discharge, and then in our State there is a mortgage tax on the new mortgage, and a filing fee, and recording fee, and all of that-it seems to me that, as others have testified, in opposition to the testimony of our good friend from the commercial bankers, that there would be a good deal of expense.
Mr. NORTHUP. Much more so than there would be under the openend mortgage, making use of these new title company facilities which are being made more useful to us and on a broadening scale all over the country today.
Mr. OAKMAN. Thank you.
Mr. MUMMA. Do they make a record at the courthouse when this open-end mortgage is put on?
Mr. NORTHUP. Yes, sir; they do. You get these title companies to come into a town now, with this new scheme. They are out after that business.
Mr. MUMMA. It might pay you to start your own.
Mr. NORTHUP. I think you will find this book very illuminating, sir. This is not any promotion for the idea, this is a legal discourse on the idea, and what you can do in the various States of the Union. The CHAIRMAN. Are there further questions of Mr. Northup? If not, we are very glad to have your testimony, Mr. Northup. Mr. NORTHUP. Thank you, sir.
The CHAIRMAN. And we very much appreciate your splendid contribution.
Mr. Ira S. Robbins, president of the National Housing Conference, accompanied by Mr. Edward F. Barry, chairman of the board.
We are very glad to have your testimony, Mr. Robbins. You may proceed.
STATEMENT OF IRA S. ROBBINS, PRESIDENT, NATIONAL HOUSING
Mr. ROBBINS. Mr. Chairman and members of the committee; my name is Ira S. Robbins. I am president of the National Housing Conference, Inc. For 11 years, I served as a housing official of New York State in the administrations of both Governor Lehman and Governor Dewey. I am an attorney and presently am executive vice president of the Citizens' Housing and Planning Council of New York City.
The National Housing Conference, for which I am speaking today, is a nonprofit citizens organization founded 23 years ago. It is supported entirely by memberships and contributions, and a a matter of policy does not accept memberships from official agencies of government such as local housing or redevelopment authorities receiving Federal assistance. We have appeared before this committee on questions of major housing policy over the last 20 years.
The National Housing Conference takes a comprehensive approach to the housing problem. Its interest covers the entire housing field, both private and public. It is good to be joined by an ever-increasing number of voices urging more effective slum clearance, redevelopment, and now urban renewal programs. We are delighted that representatives of the housing industry are devoting increased attention to the problem of cleaning up our cities, thereby protecting urban investments. We have always encouraged national housing programs that would assist private enterprise to increase vastly its scope of operations so as to provide homes for families of low and middle income.
We have always championed, and still do, a realistic program of low-rent public housing for families of low income, presently living under intolerable conditions, and for whom private enterprise cannot build. Indeed, without a substantial low-rent public housing program all of our best laid plans for slum clearance, redevelopment, and urban renewal are certain to fail.
With me today is Mr. Edward F. Barry, NHC's board chairman, lawyer, prominent businessman, and banker of Memphis, Tenn. Among his many public services for which he receives only spiritual compensation is that of chairman of the Memphis Housing Authority.
He is admirably qualified to answer questions you may have from. the point of view of the impact of housing on a typical American city.
To conserve the time of the committee, I will not attempt detailed suggestions regarding the several titles of H. R. 7839. We have read with interest and concur in the constructive recommendations presented in excellent testimony by the American Federation of Labor, the Congress of Industrial Organizations and the National Association of Housing and Redevelopment Officials.
We of the National Housing Conference were encouraged by the overall approach of the report of the President's Advisory Committee on Government Housing Policies and Programs. The President's message on housing submitted to the Congress on January 25 was received with general enthusiasm. It struck an affirmative note in describing our national housing policy. We are, however, disappointed in the legislative recommendations that would carry out the President's policies.
Housing Administrator Albert M. Cole dwelt at some length in his testimony concerning the intensive study of the President's Advisory Committee, and of his own excellent "shirt sleeve" conferences with people representing many points of view, all interested in the housing problem.
In his first "shirt-sleeve" conference held in Washington last summer, the National Housing Conference participated. Our first questions of Mr. Cole was this:
Do you have in mind assembling all data, published and unpublished, on housing needs existing throughout the Government, and putting them in such form as to permit the President's Committee to measure whatever it recommends against the known housing needs of our country?
We repeated that question at subsequent conferences.
It seemed to us then, as it does now, that no program can be prepared to do a total job, no matter how long it may take to do it, until the job itself is defined. We did not suggest that new research be undertaken because we are fully aware that funds for gathering, sifting, and publishing basic data have been steadily curtailed. But we urged that known data be brought into focus so that the best job could be accomplished on the basis of the best information presently available.
When the administration's housing program was announced, no evidence was presented as to how large a housing program it would help to sustain. There was nothing to indicate that it had been created against a blueprint of housing needs. It was like building a house without knowledge of the site on which it was to go, the neighborhood in which it was to be built, and without clearly defined plans. If we, outside of Government, were to comment intelligently on the recommendations of the administration, it was necessary that we do our own digging for facts so that we could judge the proposed program against the known housing needs of the American people. The National Housing Conference undertook that assignment. We obtained the services of Dr. William L. C. Wheaton, a well-known authority in the housing and planning fields and presently professor of city planning at the University of Pennsylvania, to make an analysis of housing needs which we might present to the Congress and to all of those interested in this problem. Needless to say, we had neither the time nor the resources to do original research. What we were able to do was to go to the records of the Bureau of the Census, the Housing
and Home Finance Agency, and all of its constituents and to other public and private groups, pulling together all of the data that we could assemble. We believe that this study will prove of value to the committee. I have it here for inclusion in the record, if the committee approves.
I might say, Mr. Chairman, the title is "American Housing Needs, 1955 to 1970," and I would like to leave it for inclusion in the record, if I may.
The CHAIRMAN. Is it voluminous?
Mr. ROBBINS. It is 16 pages with some tables.
The CHAIRMAN. Without objection, it may be inserted in the record. (The information referred to is as follows:)
A PRELIMINARY ESTIMATE OF HOUSING NEEDS, 1955-1970
(Prepared by Dr. William L. C. Wheaton, professor of city planning, University of Pennsylvania, for the National Housing Conference, Inc., Washington, D. C., March 11, 1954)
Acknowledgments: The author wishes to acknowledge the assistance provided by the Housing and Home Finance Agency, Office of the Administrator, Federal Housing Administration and Public Housing Administration, the Bureau of the Census, the Twentieth Century Fund, the American Federation of Labor, the Congress of Industrial Organizations, the National Association of Real Estate Boards, and the National Association of Home Builders in supplying data for this study. He is especially indebted to several of the directors of research of these organizations for critical comments and suggestions. The conclusions are, of course, those of the author.
EARLIER ESTIMATES OF HOUSING NEED
Estimates of housing need have been prepared by a large number of organizations and individuals in recent years. During the debates which preceded the adoption of the Housing Act of 1949, leaders of the home building industry or their spokesmen generally adopted the view that the sustained construction of more than 900,000 units a year was impossible or in any event undesirable. A number of estimates in the range of 600,000 to 900,000 units per year were proposed to congressional committees considering housing policy. The subsequent achievements of the industry in producing nearly twice the volume suggested by these leaders is evidence of the inadequacy of their estimates.
In 1944 the National Housing Agency estimated postwar housing needs at 1,200,000 units per year. This estimate, called fantastic by some business leaders at the time, has proven to be much closer to subsequently attained levels. On the other hand, even this estimate appears to have understated the potentials of the economy, for it assumed that a very large share of the estimated needs could be met only by the replacement of existing housing. Later and higher estimates by the Housing and Home Finance Agency are based upon similar assumptions. Perhaps the dominant characteristic of these estimates is their pessimism concerning the ecomonic future of the country. This was most succinctly stated by one distinguished housing expert in a report prepared for an industry group which suggested that production levels of more than 900,000 units a year would be undesirable because they could not be sustained for more than a short period of time. This expert predicted that the construction of 1.5 million homes would produce "immense and immediate" instability. These dire consequences have not appeared in the boom building years 1950-53.*
1 Hearings before the Subcommittee on Housing and Urban Redevelopment of the Special Committee on Postwar Economic Policy and Planning, pp. 1658-1675 ff., p. 1841, p. 1986, p. 2078, p. 2171 ff., p. 2210, Washington, Government Printing Office, 1946.
2National Housing Agency, Housing Needs, National Housing Bulletin No. 1, Washington, 1944.
Housing and Home Finance Agency, How Big Is the Housing Job?, Washington, 1951. Miles L. Colean, Future Housing Demand, the Producers Council, Washington, 1948.
If the estimates of business leaders and official agencies have underestimated our capacity to produce and consume housing, other estimates of higher requirements have failed to be realized. Thus the National Housing Conference and the American Federation of Labor estimates of the same period, calling for the construction of 1,800,000 units or more per year assumed very high levels of replacement of existing units, and substantial programs of slum clearance and public housing." Although the Congress authorized such programs, these authorizations were subsequently reduced and have never been carried forward at the levels intended. It is now evident that all of these estimates have underestimated the market demand for new housing under conditions of full employment and high output, and have overestimated the willingness or capacity of the country to replace substandard housing through slum clearance and public housing programs.
ASSUMPTIONS OF THIS STUDY
The major weaknesses of many earlier studies derive from the assumptions, stated and unstated, which underlay them. They have assumed a stable or declining national output while the postwar economy has been characterized by steadily rising employment and productivity. They were based upon population forecasts which have proven to be consistently below subsequent population growth. Estimates of family formation, too, have been substantially below ultimate levels. In their analysis of the housing market itself many of these studies have apparently underestimated the willingness of families to purchase homes, the influence of liberalized federally aided credit upon the market, and the vast extent of suburban building.
The assumptions upon which this study is based are as follows:
1. Continued expansion of our economy at a steady rate, full employment, and continuing increases in productivity.
2. Expenditures for national defense no greater than those of 1953-54. 3. Continued high increases in population and family formation in keeping with a prosperous economy.
4. An active desire on the part of the American people for higher standards of living, including higher housing standards, but not at the expense of other essential expenditures.
5. Extension and expansion of Federal and local aids to housing to assist in achieving these goals.
These assumptions will be adhered to in the estimates of this study. It is further assumed that housing will be utilized to the fullest extent possible to stabilize economic trends and to assure continued economic expansion, in short that hous ing production wil be maintained or increased in the event of marked downturns in economic activity.
FACTORS AFFECTING HOUSING REQUIREMENTS
Future housing requirements are a function of population growth, family formation, migration, losses of housing units, obsolescence and deterioration, undoubling of families, and vacancy and occupancy rates. These factors are influenced to a considerable extent by changing housing standards, changing market preferences, by general economic conditions, and by market demands in the light of available credit. The most important of the above-named factors are discussed in the following sections and are summarized in table 1.
Estimates of family formation have been developed from marriage rates, less allowances for divorce, death, and other dissolutions. When so developed the estimates considerably understate housing requirements. While most, but not all marriages result in additional requirements for separate housing accommodations, few dissolutions of families result in reduced housing requirements. The
Estimates by 14 organizations and persons are summarized in U. S. Congress, 80th Cong., 1st sess., hearings of the Joint Committee on Housing, September 10-19, 1947, pp. 49-55.
For other estimates of. J. Frederick Dewhirst & Associates, America's Needs and Resources, Twentieth Century Fund, New York, 1947; Charles Abrams, The Future of Housing, Harper & Brothers, New York, 1945; and XII, Law and Contemporary Problems 1, 1947.