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(b) To provide architectural advice to prospective rehabilitators at moderate cost.
The importance of this cannot be overemphasized.
SIMPLE SLUM PREVENTION
We have discussed the elimination and the prevention of slums for many years. We have discussed the so-called causes of slums, but we have failed to do the one thing which will do more to prevent slums than any one thing provided for to date.
Slums are blamed on many things, for a fundamental analysis shows that these are not the basic causes but rather contributing factors or symptoms of slums. It would be foolish to say that aged buildings cause slums or that locations cause slums-or that foreigners or colored people cause slums, or that a dense occupancy causes slums. The Housing Committee mentioned neglect by city governments as a cause for slums.
Reduced to its lowest common denominator the cause of slums is a loss in the desirability of a house, a location, or a district. It is wrong for us to think it is age-are the New England towns to be considered as slums? It is wrong for us to think it is location-are the rebuilt parts of New York to be considered slums? It is wrong for us to think it is people as such. If we check some of the other so-called causes we will find that most of them are symptoms rather than the causes of slums.
SAVE THE EXTERIOR AND YOU SAVE ALL
I have already mentioned the cause of slums as a loss of desirability which in turn is caused by a loss of eye appeal. What is the first thing that happens to start neighborhood deterioration? Do the roofs leak, does the plumbing give out, do porches sag, are windows broken, are lawns overgrown? The first move toward deterioration starts when 1 or 2 or 3 houses on the street are unpainted and unkept and remain so to the obvious discouragement of their neighbors.
Those who have had the opportunity to watch neighborhoods disintegrate will remember that exterior painting is the first thing to be discarded once a neighborhood starts down the path toward slums. If we are to save our neighborhoods from a few penurious owners and a few avaricious landlords, we will follow the forward step of many European cities. They have found the solution in local laws compelling proper maintenance of the exterior of their buildings. Consequently, our second recommendation is as follows:
2. Every city requesting certification will be asked to pass a local ordinance requiring the refinishing of all painted surfaces of the exteriors of all buildings 1 coat no less than once every 5 years unless waived for cause by the city building department.
Every citizen should be held responsible for the condition of the premises on which he lives regardless of whether he is landlord or tenant. Too many cities have ordinances which hold only the property owner responsible for the debris and litter on the premises. To help prevent slums the tenant must and should be held equally responsible. Local city councils back away from passing such ordinances for
obvious reasons. mendation:
Consequently, we have the following recom
3. That every city requesting certification be required to pass an ordinance, if they do not already have one, making the occupants of premises responsible for any debris, rubbish, or litter found on those premises.
We believe that every incentive must be used to encourage the rebuilding of urban renewal areas. Consequently, we are in accordance with the provision of section 220 which increases, as added inducement for such rebuilding, the loans available from the 80 percent of section 207 to 90 percent permitted under this section. For the same reason we think it is a mistake to place any limitation on rents in these structures.
We believe that rents should not be controlled here for several reasons. The difference in benefits between sections 207 and 220 are not sufficiently great to encourage the prospective builder to choose the renewal area rather than the suburban area. Rent control itself is wrong in principle and favors the unscrupulous and dishonest operator. In addition we believe that rent control is unnecessary because the area itself will preclude the charging of unreasonable rents.
I would like to add there that I think we should give the builder, in these areas, extra encouragement by giving him an extra large depreciation charge on his building.
SECTION 220 (D), PARAGRAPH 2, SUBSECTION (B) (P. 18), BELIEVED UNFAIR COMPETITION
Under a liberal construction almost any instrumentality whether it be Federal, State, municipal, or private, whether it be a limited. dividend or redevelopment or housing corporations or nonprofit organizations either public, quasi-public, or private could become organized and start construction under this provision of section 220. It could become another form of public housing.
This would make it undesirable, in fact impossible, for private enterprise to compete. If it is the avowed purpose of this bill to have private enterprise carry on the urban renewal program, then this provision (sec. 220 (d), par. 2, subsec. B, p. 18) should be deleted.
This is the section which provides for the system of relocating families displaced as a result of governmental action in a community which has certified to the commissioner according to this act. We would like to make the following suggestions:
1. The same limitation be placed on section 221 that was placed on 220; briefly, the required services of an architect.
2. That this type of financing provided under section 221 be available only in certified renewal areas.
(a) Under the generous provisions of this section people will be encouraged to rebuild the core of the city. Given an alternative they would obviously pick some other location.
(b) The 95-percent financing provisions for a $7,000 home under section 203 would obviate any great hardship to anyone desiring to leave the renewal area.
(c) This would encourage home ownership in renewal areas which would be a beneficial situation for the entire area.
Section 221, paragraph (d), subsection 3, provides that a nonprofit corporation or association regulated under Federal or State laws, or by political subdivsions of State or agencies thereof, may borrow money for the construction and operation of housing. The preference given public or quasi-public organizations is obvious. The private builder is granted financing of 85 percent of appraised value on individual homes—the public association is granted 100-percent financing of appraised value and up to $5 million in funds.
In addition this public organization could build any place at 100percent financing, while the private builder under section 220 will be restricted to slum renewal areas at 90-percent financing. We object to the inclusion of this provision for several reasons:
1. Because we believe it permits unfair competition with private enterprise.
2. Because it will discourage the entrepreneur from constructing and operating housing in renewal areas.
3. Because the 100-percent financing coupled with a nonprofit organization "regulated or supervised under Federal or State laws" makes this very closely related to public housing. This provision could be used to circumvent limitations placed on the construction of public housing.
This section 221, paragraph (d), subsection 3, should be deleted in its entirety.
We regret that the need for more public housing will not be reviewed this year. It has become more and more apparent that public housing is not being occupied by the indigent or the needy but by people in moderate circumstances who could provide for themselves. The relief client, the pensioner, the public charge, is the exception rather than the rule.
Frankly it is impossible to determine just exactly who occupies public housing and the legal right to their being there. Nor are the financial operations available for review. The directors of public housing are reluctant to divulge any information concerning both their tenancy and their operations. Inasmuch as these are quasipublic institutions subsisting on public money, we believe that Congress should make it mandatory for all public housing directors to make available their books for review to responsible organizations.
We believe that public housing should be made available to the people for whom it was meant. All public housing now standing and under construction should be available under priority to:
1. Indigent families supported by relief.
2. Veterans dependent principally on their pensions or disability
3. Any dwellings left over should be available to the lowest economic tenth of the community.
Unless this is provided the existence of public housing cannot be reconciled. When these limitations are adopted we can then determine with comparative accuracy our need for future public housing, if any.
We believe that all Lanham housing should be sold or disposed of as quickly as possible. There is little or no reason for the continuation of Government operation of this type of housing at the present time. Many public housing administrators refuse to relinquish their control of these housing units for private or personal reasons or as a matter of ideology. However, they have served their purpose and their sale will not diminish the amount of housing available for the American public. They should be sold as soon as possible-in any event within the next 12 months.
In conclusion, we have discussed the various provisions of the bill concerning rehabilitation, slum elimination, and urban renewal. We believe that this program is practical and that thereby sound civic goals can be achieved. However, as we stated previously, money is not the only tool necessary to insure the success of this program. We need planning and guidance for the borrowers to insure actual improvement to their homes.
Occupants must be held responsible for the exterior housekeeping of their premises. We must recognize that responsibility for exterior maintenance must be mandatory upon the owner if we are to prevent future slums.
We do not believe that the present generous provisions for the financing of homes should be increased at this time. We are maintaining a very high rate of construction. Any overproduction would be deflationary, thereby wiping out the slim equities of the very homeowners created by this bill.
At the beginning of our testimony we suggested that we would limit our consideration of the housing bill to its possible impact on our existing housing inventory. I use the word "inventory" purposely in the hope that it will remind us of our superabundant inventory in other products. These inventory problems are tremendous-and they are rising every day-not only in farm products but in so many commodities such as autos, steel, and so forth.
If there is any purpose for my being here it is in the hope that I have shown you that housing can stand just so much of the hypodermic needless before it too can be overbuilt. In fact, I hope I have shown you that the overproduction of butter is child's play compared to the overproduction of housing. Butter spoils in a relatively short time-but it takes years to work off an overbuilt housing situation.
I hope I have shown you that in considering this bill we are deciding not so much the future of the housing to be built as the future of the 43 million nonfarm housing units now on hand. And if, at this critical stage, we are to become concerned, let us also be concerned with the 30 or more million homeowners who have had the courage and thrift to save for their homes as well as with the few who haven't.
Under this bill we believe we may increase the construction of housing abnormally. We maintain such abnormal stimulation is the most dangerous thing possible to our economy. We are debasing the biggest asset owned by the majority of our people-their home. We are
endangering its value, its desirability and the financial standing of all homeowners.
This bill, unless substantially modified, offers a sure method for deliberately creating overbuilding, overfinancing, abnormal rise in private debt, and, as the end result, a financial depression caused by inability of the borrowers to meet their mortgage obligations. Basic housing is now available to everyone at very small effort through modest savings. Little more can be asked or should be granted.
The CHAIRMAN. Thank you very much, Mr. DuLawrence.
Mr. DULAWRENCE. On the next page I have added a few statistics, which I will offer as part of the evidence.
The CHAIRMAN. They may be incorporated as part of your remarks. (The statistics referred to are as follows:)
Increase adult population, 14 million plus; increase housing, 12,700,000, (Census, p. 20, No. 41) (Census, HC-8, No. 1).
Number of vacant dwelling units of housing used as in 1940
Vacancy factor, percent_.
8,400,000 12, 700, 000
The CHAIRMAN. Are there questions of Mr. DuLawrence? If not, thank you very much for your contribution, Mr. DuLawrence. I am sorry you have had to wait around so long.
Mr. Shaw, of the Trailer Coach Association. You may proceed, Mr. Shaw. We are very glad to have your testimony.