Title VII. Urban Planning and Reserve of Planned Public Works: We favor the objectives sought by this title with respect to both urban planning and a reserve for planned public works. The aid for urban planning would be appropriate under the Division of Slum Clearance and Urban Renewal but the aid for advance planning of public works might be more appropriate under some other department in the Federal Government. In any event, we believe that the aid extended to localities will involve a minimum of Federal control-and no control with respect to design.

In conclusion, we wish to express our gratification concerning the methods which have been used by the administration in developing a housing policy. The study which has been given by the many experts chosen to serve on the President's Committee on Housing has produced a program which is essentially sound and will be supported by the country at large. It is not revolutionary and it does not abolish many of the housing functions which have been developed under preceding administrations. It seeks, instead, to weed out the needless functions and to improve the administration of those functions which are retained. We heartily concur in the program as a whole.

Mr. Chairman, we appreciate the opportunity of appearing before you.

The CHAIRMAN. We are very, very happy to have had your testimony, Mr. Ditchy.

Are there questions of Mr. Ditchy?

Mr. O'BRIEN. Mr. Chairman.

The CHAIRMAN. Mr. O'Brien.

Mr. O'BRIEN. Mr. Ditchy, you refer to the report of the American Institute of Architects on page 1 of your statement. I don't know what that is, but is it compact enough to be included in our hearings, and do you think it would be helpful?

Mr. DITCHY. Having the author here, I would like to refer your inquiry to him.

Mr. JUSTEMENT. It is quite lengthy, Mr. O'Brien. It is about, I think, 30 or 35 pages long.

Mr. O'BRIEN. That might be too lengthy to be included.

Mr. JUSTEMENT. I would be glad to furnish you with copies.

The CHAIRMAN. Would you make it available to the committee members?

Mr. JUSTEMENT. We will be glad to make it available to you, sir. The CHAIRMAN. We will be glad to have it.

Thank you very much, Mr. Ditchy, and Mr. Justement.

That concludes the testimony of witnesses for today. We will proceed tomorrow morning and, without objection, the committee will stand in recess until tomorrow morning at 10 o'clock.

(Whereupon, at 12:32 p. m., the committee adjourned to meet at 10 a. m., Wednesday, March 17, 1954.)

HOUSING ACT OF 1954

WEDNESDAY, MARCH 17, 1954

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met at 10 a. m., the Honorable Jesse P. Wolcott, chairman, presiding.

Present Chairman Wolcott (presiding), Messrs. Gamble, Talle, Kilburn, McDonough, Widnall, Betts, D'Ewart, Mumma, McVey, Hiestand, Van Pelt, Spence, Brown, Patman, Multer, Deane, Addonizio, Hays, and O'Hara.

The CHAIRMAN. The committee will come to order.

We will proceed with the consideration of H. R. 7839.

We have with us this morning the National Association of Real Estate boards, represented by Mr. Waltemade, chairman of the Washington committee, Mr. Summer of Newark, N. J., and Mr. Burns of Los Angeles, Calif.

We are very glad to have you back with us, gentlemen, and we are very happy to have your testimony.

If it is agreeable to the committee, you may proceed without interruption with your presentation. At the conclusion of your presentation the committee members may want to ask you some questions in connection with it.

Mr. WALTEMADE. Thank you, Mr. Chairman.

STATEMENT OF HENRY G. WALTEMADE, CHAIRMAN, REALTORS' WASHINGTON COMMITTEE, NATIONAL ASSOCIATION OF REAL ESTATE BOARDS, ACCOMPANIED BY ALEXANDER SUMMER, NEWARK, N. J., PAST PRESIDENT, NATIONAL ASSOCIATION OF REAL ESTATE BOARDS, AND MEMBER OF THE PRESIDENT'S ADVISORY COMMITTEE ON HOUSING; AND FRITZ B. BURNS, LOS ANGELES, CALIF., CHAIRMAN, BUILD AMERICA BETTER COUNCIL, NATIONAL ASSOCIATION OF REAL ESTATE BOARDS

Mr. WALTEMADE. Mr. Chairman and members of the committee, I am Henry G. Waltemade, chairman of the realtors' Washington committee of the National Association of Real Estate Boards. I am president of Henry Waltemade, Inc., with offices in New York, a trustee of the Dollar Savings Bank of the City of New York, the fifth largest savings bank in the country, and a director of the Manhattan Life Insurance Co., and a member of the real estate mortgage committees of both institutions. I have been actively engaged in all phases of the real-estate industry for more than 30 years.

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The realtors' Washington committee is the legislative committee of the National Association of Real Estate Boards. Our association consists of more than 51,500 realtor firms who are members of 1,151 local real-estate boards in all 48 States.

We are most appreciative of this opportunity to present the views of our association with respect to the important housing legislation now before you. All of the subjects covered in the bill have been considered from time to time by the national conventions of our association, and the views to be expressed and amendments proposed herein have been under study for several years.

Following my testimony, which will be limited to titles I and II of the bill, we should like to present Mr. Alexander Summer of Newark, N. J., a past president of the National Association and a member of the President's Advisory Committee on Housing Policies and Programs, to discuss the secondary mortgage market provisions of title III. After Mr. Summer's testimony we should like to have Mr. Fritz Burns of Los Angeles Calif., chairman of the build America better council of the national association, discuss the slum clearance and urban renewal provisions of title IV. These latter two titles are probably the most important in the bill and we are proud to present such eminently qualified persons to testify with respect to them.

Before proceeding to the FHA amendments, may I state that our association concurs generally in the objectives sought by this legislation. These objectives were appropriately characterized by the President in his housing message to the Congress, that

Needed progress can best be made by full and effective utilization of our competitive economy with its vast resources for building and financing homes for our people.

During the course of this testimony we shall suggest certain amendments which we believe will improve the workability of certain FHA sections.

The proposed amendments to the FHA mortgage insurance system substantially follow the recommendations of the President's Advisory Committee, and unquestionably will make that system a far more effective device for the construction of new and acquisition, and repair of existing housing for many people seeking adequate homes for their families. The bill recognizes the importance of modernizing and rehabilitating the thousands of homes which almost daily are withdrawn from the Nation's inventory of acceptable housing because of needed repairs. The increase in the maximum permitted mortgage amounts as well as the permissible terms will greatly aid in accomplishing the desired objectives. Also the proposals for eliminating differences in the terms of the debentures offered in payment of the insurance and in allowances of foreclosure costs applicable to certain sections of the National Housing Act will materially assist in meeting these objectives.

The increase in the maximum mortgage limits and maturity for section 203 loans, and the increase in limits for section 207 loans will bring both of these important sections closer to the broad market coverage role they were intended to play when first enacted in 1934. The Federal Housing Administration is a self-supporting operation, and the benefits of the insurance system should be distributed as widely as possible. Also the wider range of its activity increases

opportunities to distribute risk and thus improve the stability of the system.

However, we note that the amendment to section 207 would extend that section to existing construction located in slum or blighted areas, as defined in the act, provided that part of the loan is used for repair and rehabilitation as the FHA may require. "Slum or blighted area" is a rather restricted term, while section 220, which for all practical purposes is a more liberal 207, is not so restricted because it is applicable to designated urban renewal areas. It is very likely that people relocated from urban renewal areas may desire housing outside such areas which may not necessarily be slum or blighted areas. We believe that it would be essential not to restrict the application of section 207 to existing housing in such areas, but to permit the Commissioner to apply the section to particular structures without requiring that the structures be located in a slum or blighted area. This could be accomplished by deleting lines 18 and 19 on page 10 of the bill.

The availability of sections 207 and 220 for existing housing on the same basis as new construction will help increase the availability of considerable adequate rental housing for families of low and moderate income. For obvious reasons satisfaction of total housing demands cannot be met entirely by new construction. Adoption of this provision will underscore FHA's service to the whole mortgage market, not just a part of it. Repair and rehabilitation of existing housing will likewise be stimulated by this recommended approach to the insurance of loans on existing dwellings, and thus prevent creation of slums at their source.

While the title I, section 8, loan insurance authority is to be terminated because of the liberalized section 203 program there is nothing in the latter section which insures that the section 8 authority will be duplicated therein. Perhaps the committee might wish to clarify the intent of the Congress in this respect so that FHA will make certain exceptions from its minimum construction requirements for housing normally financed under this section and, if necessary, authorize a service charge to compensate for additional costs of making and servicing small loans. There is ample authority for this, and both of these factors are now part of the title I, section 8, loan authority.

We also recommend that the mortgage limits for this type of housing should be $7,600, the same limit which we are recommending for section 221.

In order to maintain stability in the home building market we urge an amendment whereby outstanding FHA commitments on the day of enactment of this bill would be able to take advantage of the changes in the maximum limits, permissible terms, and ratios of loan to value provided in this legislation.

This I cannot emphasize too greatly because right now there are a great many projects being held up, applications being held up, awaiting the outcome of this bill. And certainly we urge this amendment. Before leaving sections 203 and 207, it is noted that the proposed maximum mortgage limits and ratios of loan to value will go into effect not upon enactment of this bill but upon the exercise of discretionary authority by the President. Such authority, even when exercised, may not result in the increase in these mortgage amounts to their maximum limits. In the interest of long-range stability for the home