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I think it is a dog-in-the-manger program in that is absorbs so much subsidy that is more than sufficient to take care of the entire problem. I don't think the segregation of human beings is the American way, sir.

Mr. O'HARA. Then for the people past 65, and those in the lowincome group, you have words of kindness, but when any suggestion is made of something to help them you find many reasons why it isn't practical ?

Mr. SUMMER. I made a suggestion, sir. I have made the suggestion that it be the community's responsibility to see that that man does live in adequate housing. It doesn't mean he must live in brandnew housing, necessarily, but it must be housing that meets a minimum standard.

I don't think that is the role of the Federal Government.
Mr. O'HARA. Why are you so bitter against public housing?

The CHAIRMAN. Mr. O'Hara, may I call attention to the fact that it is 4 o'clock, and we have spent 2 hours this morning developing their opposition to public housing. Now I hope that you won't start that all over again, because some of us have to get home and get to bed.

Mr. O'HARA. This being St. Patrick's Day, and wishing to participate in the remarks in the House, I did leave the committee in season to reach the floor at the time of convening. I am sorry I missed out on the public housing discussion.

The CHAIRMAN. Well, we have enjoyed this, but I think we should have some sympathy for these men who have been sitting here since 10 o'clock this morning. They have been very tolerant, but I am commencing to feel a little sorry for them.

Mr. DOLLINGER. Mr. Chairman, I forgot to welcome my friend from the Bronx, Henry Waltemade. I may disagree with him, but I like him.

The CHAIRMAN. When you read the record tomorrow morning, Mr. O'Hara, if you don't find that question is sufficiently answered by the gentleman, he will probably be glad to come back.

Mr. O'HARA. Mr. Chairman, I am afraid I am taking the time of the committee to no purpose, because I know I can't convert the witnesses and I know they can't convert me.

The CHAIRMAN. Thank you, Mr. O'Hara.

Mr. DEANE. Mr. Chairman, since Mr. Shanks, of the Prudential Life Insurance Co., testified the other day, previous to his testimony I had the urge to build more and more houses. I wonder if his philosophy, practically speaking, isn't sound. The Congress and the home builders and the real-estate people are pushing and pushing and pushing for more and more houses. Do you think that is a sound philosophy?

Mr. SUMMER. I will be glad to answer that, sir. I think FHA is to be complimented on a very sound underwriting policy, and one of the tests is, in a given area, the determination as to whether there is a market for that house.

Mr. DEANE. Right on that point, my observation is that more and more housing is going into the heavily populated areas, and the areas where housing is really needed it is not being built.

Mr. SUMMER. I am one of those who made recommendations, sir, for a 10-point program to make it possible for money to flow into the so-called isolated areas and smaller communities.

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Mr. DEANE. I am impressed with the idea advanced that some service charge that would not be abused, would help to channel houses into the areas where they are needed.

Another factor that disturbs me is that in 1953 there were 21,473 nonfarm real-estate foreclosures. That is the highest since 1950. I wonder if it isn't time for us to begin to take stock of our housing. Stop pointing our fingers necessarily at public housing, or the supporters of public housing pointing fingers at us, but to try to arrive at what is the right approach that we should have. Because I don't believe the President would come in and recommend a broad housing program, which includes public housing as well as other features, if he wasn't sincerely interested in the overall picture.

Mr. SUMMER. I would say, No. 1, the best price control regulating the prices of houses, and the best rent control, regulating the rents on rental housing, is a reasonable surplus so that people can pick and choose, and again bargain for space.

I am not speaking of a 10-percent vacancy, but I think that the soundest thing that could happen to the housing economy of this Nation is a surplus up to 5 percent, in both rental housing and for-sale housing. That is the most effective price control there has ever been.

Secondly, I concur that if in a given area, in a given price bracket, there exists a vacancy, then lending in that particular area should stop and FHA has had the reputation of keeping its pulse on that.

My only criticism would be that a little vacancy is the healthiest thing in the world to bring prices and rents down.

Mr. BURNS. I would like to add to that, if I might, Mr. Deane, and Mr. Chairman: I believe that this continuous production on a boom scale justifies some conservative viewpoint, as you indicate, has been expressed by some of the men in the lending business.

I do not believe that we could continue to add—this is my personal opinion--to our present housing supply, on the scale that we have, without at this time taking some steps to demolish those houses or that portion of our housing inventory which is worn out.

That does not-to do that, you don't have to visualize any wholesale exodus of populations. We have got to realize first that we just add to this housing supply at the rate of 2 percent a year, and maybe a 10th of 1 percent a year of demolition, would be a help in sustaining the new market, the continuous new market. But I think that we are at a point when, after we have arrived at this normal vacancy factor that Mr. Summer speaks of—and I think we are approaching thatthat we must rely upon a demolition program to sustain our new production.

Mr. DEANE. Well now, what I am afraid of is that you are going to see business structures rise where rental housing, poor rental housing, formerly existed.

Mr. Burns. Not necessarily. Demolition probably is a badly chosen word on my part, because you visualize a sort of blockbusting, and that is really not what we are thinking about.

It is picking out the old ramshackle dwelling that has seen its best days, but probably is in a close-in area, probably has convenient transportation facilities, maybe is even within walking distance of down

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town, and eliminating that ramshackle building and replacing it with a new structure.

The idea that you can't inject new housing into older areas is a misconception. We find that going on in our downtown areas all the time, where we have the very highest values, and in apartment areas, where you have high values. An old building is torn down and a new one is put up. I think in most instances in these older neighborhoods, that the new building will probably be a rental building, rental units, and probably, by reason of the fact that it is an older neighborhood, but now rehabilitated, I would say that those rental units would be on the low side, and there is in this bill provision for financing rental units in these older areas.

Mr. McVEY. Mr. Chairman.
The CHAIRMAN. Mr. McVey.

Mr. McVEY. I am only going to take a moment, and I should like to take the discussion away from public housing because this bill is concerned with slum areas to a great extent.

Before doing that I want to say that I was interested in what Congressman Dollinger said a moment ago, when he gave us the formula that a week's wages should pay for a month's rent.

I have great respect for that formula, but I am afraid some of the Congressmen are paying too much for rent.

I want to go back to this report of Mr. Burns for just a moment.

You have quoted, Mr. Burns, from the President's Advisory Committee report on housing, on page 111: "If we continue only at the present rate of clearance and rely on demolition alone to eliminate slums, it will take us something over 200 years to do this job.”

Now I have always been interested in research and documentation. I am wondering if the committee had any documentation for that particular statement or were the figures just picked out of the air?

Mr. Burns. I explored the statement to some degree. Frankly, Congressman, I don't think it makes much difference whether it would take a hundred years or two hundred, but I explored it to the extent where, what they were talking about, in making that statement, was doing the job on a basis of complete demolition to the extent of razing the area to the ground, tearing the buildings down, replaning the area and building it new, at the present rate of what was formerly known as urban redevelopment and is now known as urban renewal.

Mr. McVey. Of course, in 200 years we may develop a great many more slums.

Mr. Burns. It would be a losing proposition. You never could catch up with yourself.

Mr. SUMMER. The complete summary of that is on page 111 of the President's Advisory Committee report.

Mr. McVey. I was interested in that 200-year figure.

Mr. SUMMER. But to save the Committee's time, I suggest that you have this report.

Mr. McVey. I don't think it is necessary.

Mr. SUMMER. It breaks it down right to a unit and how that figure is arrived at, and it wasn't a bald guess, sir.

Mr. BURNs. If we defer the job to the extent of where another generation has to be brought up in the slums, that is very serious. I think our program should be aimed at eliminating the slums within the next 5 or 10 years.

Now as far as perfecting certain areas, and tearing everything down and putting curves into straight streets, and so forth, I would rather leave that until we have done the first part of the job.

Mr. McVey. It certainly shows that it is a tremendous job and some of it will have to be done by our grandchildren.

Mr. BURNS. I don't imagine they will mind doing part of it. I don't suppose they would like to have to do their part of the job and also pay for our part. I think that is the thing we should watch out for.

Mr. McVey. You have a point there. That is all, Mr. Chairman. The CHAIRMAN. Are there further questions of these gentlemen? If not, we are very grateful to you for this very valuable contribution to our considerations, and the tolerance which you have shown to our questions, which you have answered very fully and very frankly. Thank you very much.

Mr. WALTEM ADE. Mr. Chairman, may I just apologize that my associates and myself sometimes inadvertently and in our enthusiasm have failed to address the Chair in our remarks, and we want to thank you and the committee for the thoughtful consideration given to us; we appreciate the opportunity of appearing before you, as we always have.

We want to assure you that the National Association of Real Estate Boards will continue in its effort to cooperate with this Committee and the members of this committee, and further I might state that if our staff can be of any assistance to you, and if any of our remarks want any further development, we will be glad to supplement our testimony.

You only have to call upon our staff to do so.
The CHAIRMAN. Thank you.

We next have Mr. DuLaurence of the National Apartment Owners Association.

We are very glad to have you with us, Mr. DuLaurence.

Mr. DuLAURENCE. Thank you very much, Mr. Chairman. I shall try to be as brief as possible.

STATEMENT OF HENRY DULAURENCE, CHAIRMAN, LEGISLATIVE

COMMITTEE, NATIONAL APARTMENT OWNERS ASSOCIATION. INC.

Mr. DuLAURENCE. My name is Henry DuLaurence, and I am chairman of the legislative committee of the National Apartment Owners Association. My home is Cleveland, Ohio. The National Apartment Owners Association appreciates the privilege of being permitted to give its views on the proposed housing bill under consideration.

At the outset, I would like to say that we are unalterably opposed to Government's interference or participation in activities which are part of or competitive to private business. We believe that none of these activities should be continued by Government unless they are absolutely essential to the national welfare and cannot be provided just as efficiently and economically by private enterprise.

The housing bill now being considered is very broad in scope. It includes "aid in the provision and improvement of housing, the elimination and prevention of slums, and the conservation and the develon

ment of urban communities.” It will affect our banks, savings and loans, and mortgage banking institutions. The National Apartment Owners Association will limit itself to the consideration of its effect on our present supply of housing.

I would like to emphasize that we believe it highly desirable and extremely beneficial to have virtually every American family own its own home. We believe the family and society benefit through home ownership. Nevertheless since the Second World War we have been living under laws designed for the encouragement of home construction and ownership. We have had increasingly generous provisions for higher financing and lower downpayments. We must face the fact that some time, if we have not already done so, we will reach a point where all these seeming benefits will work a great disfavor to their recipients, and a hardship on the entire Nation.

In coming here as a representative of the association, I wish to emphasize that, of necessity, I must speak for all housing, whether privately owned or rental. Private and rental housing are joined together with the common purpose of furnishing homes for our people. What affects one segment of our housing very quickly affects the other. With but minor exceptions their economic life is inseparable.

In our considerations we are deciding not only the fate of future housing but, more importantly, solving the fate of our present housing as well. There are approximately 43 million non-farm-housing units. This total is composed of approximately 24 million owneroccupied units, 18 million tenant units, with about 1 million unclassified. These 43 million housing units are the Nation's largest single asset. It is larger than any industry in the country and may well be of more value than all industries combined.

The importance of maintaining the values of our present stock of housing becomes evident when we realize that to 24 million families the equity in their home is their largest asset. Any situation which may adversely affect the values of their homes will in turn affect the financial stability of their owners and the Nation.

This bill is of equal interest to some 7 million citizens, owners of the 18 million rental units in the country. To a large extent this property represents the savings of the great American middle class. These people are equally anxious to prevent a chain reaction causing vacancies, cheaper housing, cheaper rents, followed by a deflation in the values of homes and rental property.

We have studied the report of the President's Advisory Committee on Housing, and have been impressed by the diligent effort it represented and the laudable purposes which it liberally expressed. However, I would also like to suggest that a well-planned housing program could help keep our economy on an even keel. Conversely, an illconceived plan could further emphasize our excessive inventory in all goods and throw us into a serious depression.

In considering this problem we should remember the significant fact that virtually every serious depression in this country has occurred when there was a recession in industry coupled with a recession in real estate. The depressions of the 1840's, 1870's, 1890's, and 1930's are examples of this economic phenomenon.

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