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Mr. MULTER. Agreeing that we need a $7,000 house, and assuming that you can build a good $7,000 house, and assuming further that you can get mortgage money for that $7,000 house, have you seen any indication where there are any builders who are willing to build that $7,000 house?

Mr. WEITZER. Well, I think the experience of the last 8 or 9 years— since the end of World War II-indicates that the builder is going to get into building houses where he can make the most money and, of course, those who are equipped and have the know-how to build houses at $20,000 or $25,000 or $35,000, they are certainly not going to go down in the lower groups.

Mr. MULTER. From what you know of this industry, certainly a builder can, with the same effort, and with very little more money invested, build a $10,000 house and make more profit than he can building a $7,000 house.

Mr. WEITZER. Well, that is just a matter of business. These fellows have to make a profit if they are going to stay alive, so they are going to go for the profit where it is easiest to make. We can't expect them to be philanthropists. They have got to make a living just as do the carpenters and bricklayers they hire.

Mr. MULTER. Nobody can blame them for that.

Mr. WEITZER. So their emphasis is going to be where they can make the money most easily and most plentifully.

Mr. O'BRIEN. Will you yield?"

Mr. MULTER. I yield.

Mr. O'BRIEN. When Mr. Hollyday was testifying, on the same subject, he said, "The city of Detroit and New Orleans were trial cities for putting that into effect." Do you think that is a realistic program in the city of Detroit, $7,000 homes, 100 percent mortgages, 40-year duration?

Mr. WEITZER. Unfortunately I wasn't here when he testified and didn't see a copy of his testimony, but I think I have seen some advertisements of houses, apparently way out in the outskirts of Detroit, that were advertised for, I think, $7,990.

Mr. O'BRIEN. Of course we are talking about urban renewal. I take it from your testimony here that you don't consider that a realistic program. Now, I would like to ask you this question: Are there any changes that you would consider might make it a realistic program?

Mr. WEITZER. Well, I am not a technician on what kind of housing will last and what the housing would cost. My testimony has been based on observations that I made a great many years ago when I traveled all over the country in connection with some work for the National Retail Lumber Dealers Association and, of course, costs then were a lot different than they are now. They used to think then that they could put up a pretty good house for six or seven thousand dollars. That same house today would cost fifteen or sixteen thousand dollars.

Mr. O'BRIEN. Do you think a $7,000 maximum mortgage would warrant a 40-year loan in our northern cities?

Mr. WEITZER. I don't know who would make the loan. I heard some of these bankers talk about it, and they certainly didn't talk as though they wanted to make those loans.

Mr. O'BRIEN. I think that answers my question in that regard.

But would you want to suggest any modifications of that program? For instance, what maximum would provide a realistic program? Mr. WEITZER. That would be pretty hard to say because, you see, the point is that you are getting into a situation here where the monthly cost, on the basis of the interest rates computed by the President's committee, and $8,000 home, as I recall, runs up to close to $73.

Mr. O'BRIEN. Seventy-three dollars a month?

Mr. WEITZER. Yes. You are getting to a point there where a fellow has to have a pretty good job to meet those costs, even if he does not have to have any money for a downpayment. If you are going to put it up to $9,000 you add another $10 a month and you have got an $85 a month, approximately, rental per month. That might help the people in that classification of wage-earning capacity, the people who can pay that much rent.

Mr. O'BRIEN. But the $7,000 house, in one of the typical northern cities, is a sort of a dream house. It is all right if you can get them to build it.

Mr. WEITZER. Yes. My point is that I don't think it fits into the picture. In a very great part of the country that thing is admittedly out of the question. Mr. Cole said as much here when he testified, and when we discussed this thing in the course of these shirt-sleeve conferences that he referred to. He admitted it there, in the same way.

It certainly sounds attractive, and in some parts of the country it may be feasible. I don't think it is in the more largely populated areas, certainly of the North.

Mr. O'BRIEN. That is all.

Mr. MULTER. If you are going to try to use it in lieu of public housing, it is a worst thing because it becomes almost a misrepresentation. Because, assume you can get a builder who will build for $7,000, assume you get a 100-percent mortgage for $7,000, even running over the 40 years, that is going to cost at least $60 a month, I think $62 a month, to carry.

Mr. WEITZER. That is right.

Mr. MULTER. If you are going to try to give that to the family in the public housing project you have got 71 percent of the families, of all families, earning less than $2,500 a year. You have 93 percent of families of 1 person, and 79 percent of 2-person families, earning less than $2,000 a year.

How can those people buy a $7,000 house and pay $60 a month for it? Mr. WEITZER. Well, that is exactly the point that I made. The implications that seemed to me to be in some of the testimony, were that this was similar to public housing, and the President thought that 35,000 units a year were going to be sufficient. I think that was presumably predicated on this $7,000 house. And I think that is pure fantasy.

Mr. MULTER. First, you have to get a builder to build, a mortgagor who will lend, and then boost the income of the person in the publichousing project so he can buy.

Mr. WEITZER. I don't know who is going to boost the income.

Mr. MULTER. I don't know, either. I would like to do it but I don't know how.

The CHAIRMAN. Are there further questions?

Mr. WIDNALL. Mr. Chairman.
The CHAIRMAN. Mr. Widnall.

Mr. WIDNALL. One comment: I, too, feel that it would be very difficult to build a $7,000 house in most communities in the United States, but addressing my remarks to your comments on Levittown, didn't they have some unusual expenses there? They started from scratch and had to provide all the community facilities, sewage disposal, water, and everything else which would involve unusual expense, that the average builder would not have to face.

Mr. WEITZER. Well, of course, what you come to is this: You start out and provide the needed facilities, and your final cost, the builder figures, is less than trying to buy the land, pay the price of the lots in the areas where you have the facilities. The plus value is that this is out in the country. Of course, it is no longer country now, with all these houses there., I lived not far from where Levittown now is, on the south shore of Long Island, for many years. That was very nice country. Now you have these thousands of houses, and the country atmosphere has disappeared.

Of course, another thing you have is, if you are going to get on this cheap land, you have a transportation problem unless you can build right in the heart of the city. If you are going to condemn land and turn it over to some builder who will put a $7,000 house on it and charge him nothing for the land, then if a $7,000 house can be built on land that costs nothing, you might conceivably get a house that could outlast a 40-year mortgage.

They tell me that these Levittown houses will stand up more than 40 years. Of course, that is still to be determined. They used some new and original methods of construction, and some new materials. Say you could get a Levittown established in the heart of some big city, where you could put up a thousand houses on an area which had been cleared of slums, in some parts of the country perhaps you could arrive at this $7,000 house. The city would condemn the land, pay the owners for it, and turn it over for free to the builder that was going to put up the $7,000 houses. That is about the only possibility that I see of that being done in any of the large metropolitan areas of the North.

I am not suggesting it should be done. You asked me how it could be done. That might be one way to do it.

Mr. WIDNALL. Thank you, sir.

The CHAIRMAN. Thank you very much, Mr. Weitzer, for your testimony.

Our next witness is Mr. Clair W. Ditchy, president of the American Institute of Architects.

We are very glad to have you, Mr. Ditchy. You may proceed. Mr. DITCHY. Thank you very much, Mr. Chairman.


Mr. DITCHY. Mr. Chairman and gentlemen, I am Clair W. Ditchy, a practicing architect of 5 West Larned Street, Detroit, Mich. I am appearing here as president of the American Institute of Architects to discuss H. R. 7839, the Housing Act of 1954.

The American Institute of Architects is a national professional organization which geographically covers the country. Its 116 chapters and 11 State organizations are located in every State of the Union and in certain United States possessions. The organization's membership of nearly 10,000 registered architects comprises the majority of all practicing architects in the country. The institute is qualified to express the views of the profession.

The institute has long-term interest and a deep concern with matters of housing and urban redevelopment. Over the years individual members and special committees of our organization have studied many aspects of the problems involved in this complex field. Many of the solutions, which have been adopted, have resulted in part, at least, from our efforts.

In 1947 Mr. Louis Justement, who has accompanied me here today, headed an American Institute of Architects committee that developed a plan for an urban renewal administration, similar in many respects to the current proposals. The Justement report and recommendations were adopted in 1947 as the long-range policy on urban planning and housing for the American Institute of Architects.

We are pleased to see in this legislation an urban renewal plan which, although it might not be entirely identical to the urban renewal administration at one time propounded by the American Institute of Architects is, nevertheless, in its aims and objectives, entirely in tune with the thinking of the architectural profession.

Two distinguished members of our organization, Past President Ralph Walker of New York, and Paul Williams of Los Angeles, served as members of President Eisenhower's Advisory Committee on Government Housing Policies and Programs. With this special background, and after further thoughtful study, the institute's board of directors, meeting in Washington last week, adopted the following policies regarding the Housing Act of 1954.

The American Institute of Architects wholeheartedly supports the objectives of the Housing Act of 1954. We have, however, a number of suggestions to make concerning some of the provisions of the bill. We wish to make it clear that we endorse the bill, as a whole, and that our endorsement of the bill is not conditioned upon the acceptance of these suggestions. For ease of reference we have set forth our comments below under the various titles of the bill:

Title I. Federal Housing Administration: Most of the amendments proposed under this title will tend to bring cost limitations in line with present-day construction costs, to simplify administration, to abolish or transfer certain housing emergency measures, and to abolish the program for yield insurance that has never been used. We heartily concur in all of this portion of title I.

We seriously question, however, the advisability of section 221. We are opposed to the underlying principle contained in this section for 40-year 100-percent loans with no down payment. It seems contrary to the maintenance of sound incentives for ownership. A further comment by one of our members, Henry Churchill of Philadelphia, who is an eminent authority in the housing field, is as follows: "The thinner the equity, the greater the danger come hard times; the longer the mortgage, the shoddier the construction; the longer the mortgage, the greater the buyer's cost; the shoddier the construction, the higher the

upkeep; the higher the upkeep the greater the slum potential." Let us not on the one hand establish a broad forward-looking program of urban renewal and, on the other, permit and even encourage the slums of the future.

Title II. Housing mortgage interest rates and terms: We agree fully with this title.

Title III. Federal National Mortgage Association: Architects are perhaps less qualified to express an opinion on this feature of the bill than they are with respect to the other phases of the legislation. In general, however, we do not favor the secondary mortgage market plan as proposed in the present bill. We suggest its reconsideration along the lines recommended by the President's Advisory Committee on Government Housing Policies and Programs.

Title IV. Slum Clearance and Urban Renewal: In many respects this is the utmost important part of the legislation from the point of view of developing a long-range program. We believe that the provisions of this bill are all distinct improvements on the Housing Act of 1949. Especially noteworthy and praiseworthy is the new definition for "urban renewal project" which recognizes the problems posed by commercial and industrial slums as well as residential slums.

When the legislation on urban redevelopment was being considered in 1949, we were fearful that its inclusion in a housing bill would place an excessive emphasis on housing. The American Institute of Architects believed then-and we believe now-that housing is only a part of the urban renewal problem and that, logically, a division of slum clearance and urban renewal should not be subordinated to a Federal housing agency. If the two functions are to be joined administratively, the relationship might well be reversed. Housing could, quite properly, be made a division of an urban renewal administration.

The institute fully endorses the urban renewal plan as contained in title IV. We believe that it will broaden the present slum clearance and redevelopment program and that it will assist communities in taking effective action to meet their overall problems of urban renewal; they will be enabled, not only to eliminate and prevent the spread of slums and urban blight, but to rehabilitate those areas that are worth saving.

We believe that section 414 is a wise provision as it will tend to permit experimentation in a new field in which new ideas should be encouraged and tested on a small scale before being accepted as a basis for action on a large scale.

Title V. Low-rent public housing: We concur in this title in its entirety and wish especially to commend the changes in the provisions concerning preferences for admission to low-rent housing.

As a very long range program, we believe that it may ultimately be possible to house all of our citizens adequately without the necessity of public housing. But this would necessitate great changes in our present system of amortizing FHA mortgages and presuppose a longcontinued rise in the American standard of living.

Under the conditions which now exist-conditions which are likely to continue for some years to come-we believe that public housing is a necessary part of a complete program for urban renewal and housing.

Title VI. Home Loan Bank Board: We have no comment on this portion of the bill.

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