In the public interest, the Trailer Coach Association presents the basic facts and a specific proposal for amending the National Housing Act so that the people who live in trailers can receive equal consideration for FHA insured loans with the people who live in nonmobile low-cost dwellings.

Did you know that the trailer coach mobile dwelling is supplying the bulk of the really low-cost housing today?

As evidenced by section 8 of title I of the National Housing Act, the really low-cost dwelling is one that sells for $6,000 or less.

Less than one-half of 1 percent of fixed-to-site FHA insured dwellings built in the last few years are in the category of really low-cost housing. Put another way, about 6,000 really low-cost fixed-to-site homes are being produced under FHA annually and these are the bulk of nonfarm dwellings in this price category. By contrast, there has been an annual production of more than 80,000 trailer coach mobile dwellings selling for less than $6,000 each.

This means that about 90 percent of the market for really low-cost homes--the kind for which section 8 of title I was intended-are actually being supplied by trailer coaches.

This is all the more startling when account is taken of two other facts:

1. The price of a trailer coach mobile dwelling includes furniture and complete equipment. The typical fixed-to-site low-cost home requires a large additional investment in equipment and furnishing.

2. The terms of financing trailer coach mobile dwellings-by reason of their being overlooked heretofore in Federal housing legislation-have been unreasonably harsh in comparison with the very generous terms provided by the Congress for low-priced fixed-to-site dwellings.

Does it make sense or is it fair to provide generous terms under FHA guaranty to the small number of low-cost housing purchasers who choose the fixed-to-site dwellings and to ignore the 90 percent who prefer and need the low-cost trailer coach mobile dwellings?

More than 2 million people have found the trailer coach mobile houses the best answer to their housing needs

At the time Congress was first considering and enacting legislation to provide credit on reasonable terms for home ownership, there was no such thing as a trailer coach mobile dwelling. The total retail sales of trailer coaches in 1930 amounted to only $1.3 million and practically all of that was for vacationists. By 1952, purchases of trailer coaches amounted to $320 million, an increase of 300 times, and today almost all of the trailer coaches are purchased for yearround, permanent dwellings.

It is not simply chance but choice that has made the trailer coach mobile dwelling the fastest-growing segment of the housing industry and, indeed, one of the very fastest growing industries in the country.

More than 2 million people live in three-quarters of a million trailer coach homes because they find their needs met better that way.

In 1937, vacationers accounted for about 50 percent of trailer coach purchasers. Many more vacationers are purchasing trailer coaches today than 17 years ago but the vacationer is only 1 percent of today's trailer coach market. Ninety-two percent of today's purchases are for dwelling purposes. They are the homes of military personnel and their families, of defense workers and their families, of newlyweds, of retired folks, of construction workers and others in mobile or semimobile employment.

About 60 percent of trailer coach buyers are workers in defense and essential civilian industries. Some of these in construction, crop harvesting and other esential migratory occupations have no alternative-the trailer coach is the only practical solution for living with their families.

Others choose mobile dwellings to increase their employment security and reduce the risk of losing their investment in a home.

As economic conditions change and their jobs in one location are finished, they are not tied down by fixed-to-site housing commitments and thus influenced to remain in and add to a pool of local unemployment. Workers in mobile dwellings can move to wherever their skills are needed and thus assist the economy in its continual readjustment and assist themselves to continuous employment.

And remember this: The mobile dwelling owners no longer have to buy or rent under conditions of local boom; nor do they have to unload their houses when local employment conditions take a turn downward and there is a local

oversupply of housing. In this respect the mobile dwelling investment is a sounder investment.

Thus, the defense worker and the essential civilian worker-the purchasers of 3 out of 5 trailer coaches today-are assured of more continuous employment, avoidance of boomtown overpayments and of ghost-town liquidations, and, at the same time, are saving on current housing costs because no other form of housing matches the trailer coach dwelling in low costs.

Military personnel purchase 1 out of every 4 trailer coaches sold today. For the serviceman the trailer coach dwelling has many advantages. No longer need he rent converted barns and chicken coops or other substandard quarters at exorbitant prices. No longer need he speculate on the length of his assignment at any one station and hurriedly sell a home if he gets orders to report elsewhere. He and his family can continue to live in their own home, moving quickly and easily to anywhere in the country where he may next be stationed. His current living costs are lower and his payments help build a good family saving the equity in his mobile home. The feeling of having a succession of quarters, none of which can be called home, is replaced. The comfortable completely equipped and furnished modern trailer coach dwelling is home to the serviceman and his family regardless of the installation to which he is assigned. The older folks have taken to trailers in large numbers. Retired people are accounting for 10 percent of trailer-coach purchases. Typically, the retired couple desires independence; the trailer-coach dwelling is easy to keep and provides a practical home which can be brought along for visits to children. Also the retired couple usually has an adjustment problem; new interests are found in trailer-coach living to supplement the feeling of being discarded by the workaday world. In modern trailer parks in every part of the country, retired couples are making new friends, enjoying new hobbies, and sports. Then again, the ability to avoid the extremes of hot summers and cold winters is of particular importance to older people; many retired couples are enjoying the opportunity of being in a pleasant climate the year round. For the modern retired couple, no other housing possesses anything like these advantages of the trailer coach mobile dwelling.

Newlyweds are taking to trailer coach living in increasing numbers. Buying a trailer coach does not present the same awesome decision to the newlyweds that is involved in buying a fixed-to-site home, particularly when consideration is given to the fact that the trailer-coach dwelling comes equipped with furniture and, in fact, with almost everything but linens and dishes. First of all, the cost is lower. Secondly, it does not cut off the opportunity to try out other jobs and lines of business that may open up in other communities. It reduces housekeeping chores, a factor of particular importance, when the young housewife is continuing to work. And when a child comes, the young wife finds the trailer coach home in a modern trailer park—an ideal combination of a compact, well-ordered, small home in a garden-type of community.

The National Housing Act has failed to take account of these developments. The failure to note the tiny industry of the 1930's was understandable. Today, however, a failure to accept the trailer-coach mobile dwelling as a part of the housing program would be a failure to recognize the low-cost branch and the fastest growing branch of the industry. More important it would mean continued discrimination against the families of defense and essential civilian workers, military personnel, and against retired people. More than 2 million people have found that the trailer coach mobile dwelling is meeting their housing needs best. Two hundred thousand persons are joining the trailer-coach population each year. These are Americans who are looking forward to the same treatment that Congress has provided other homeowners in the National Housing Act.

Why handicap millions of people who need and prefer trailer-coach mobile dwellings?

The decision to recognize the trailer-coach mobile dwelling as a part of the housing resources of the country entitled to the benefits of the National Housing Act cannot be deferred. It is not a transitory problem. The trailer-coach mobile dwelling is an essential part of the modern industrial and farm economy and society.

An important fact is that 2 out of 3 purchasers of trailer-coach mobile dwellings have owned such dwellings previously. About 90 percent of the purchasers of trailer-coach mobile dwellings are planning to live in them for at least 5 years and many of the purchasers are planning to live in them indefinitely.

A breakdown of the trailer-coach market gives further proof that we are dealing with permanent growing trends and with problems which are not transitory and must be faced by the Congress.

One-fourth of the purchasers of trailer-coach mobile dwellings are under 30 years of age and 60 percent are under 40. The encouragement of home ownership in the early formative years is basic in our national housing policy.

Newlyweds are an important and growing part of the market for trailer-coach dwellings.

On the other end of the age spectrum, the increase in older people in our national population is one of the basic economic facts of our time. Some 12 million people are in the 65-and-over age group. By 1980 they will number 22 million. The immensely favorable and growing demand for trailer coach mobile homes for retired couples promises therefore not merely to continue but to increase sharply in coming years.

As long as we have national defense to worry about, the serviceman subject to repeated reassignment within the United States will have the choice of having a succession of dwellings but no home or of taking his home and family along with him. Experience is showing that an increasing number will be choosing the trailer-coach mobile dwelling.

Finally, in a dynamic economy, many defense and essential civilian workers will continue to have the problem of relocating from where the economy no longer needs their skills to the places where the economy will need them. The average family income of the trailer coach population is about $5,000 a year. In periods of less-than-full employment, the divergence is likely to increase on account of the ability of the trailer coach family to seek out the areas of greatest economic strength. Thus, this segment of the trailer coach market will also continue to be strong and to grow.

The fact is that the trailer coach mobile dwelling is here to stay. The people who live in them and the people who would like to live in them are an important segment of our population.

To a family which has chosen a trailer coach for a home, there is no sense whatever in being excluded from the financing assistance which the Federal Government provides other homeowners. The offhand objections of trailer-coach critics are easily answered:

1. The trailer coach is not real property.-The distinctions that have been evolved between real and personal property are far less pertinent than the fact that the trailer coach is used as a dwelling like any other housing. There is no reason in our day and age why the National Housing Act should not make provision for all low-cost housing whether in the legal concept of real property or not. Incidentally, the trailer park which is indisputably real property-closely akin to a garden-apartment property in the function of renting out space-is also completely neglected in the National Housing Act.

2. It would be risky to lend money on housing that doesn't stay put.-No such thing. The experience of banks and other lending institutions which have made loans to trailer-coach dealers and their customers demonstrates that such loans are safe and not risky. Only 1 percent of these banks and lending institutions experienced losses involving more than onehalf of 1 percent of the loans made. That is a remarkable record backed up by the fact that the trailer coach is a low-cost dwelling and that its owner can move to areas of employment demand.

3. The trailer-coach purchaser doesn't need the benefits of the National Housing Act.-Had it not been for the disadvantageous credit terms, many more people would be enjoying the advantages of trailer-coach mobile dwellings today. Also, many people in defense areas would have bought a mobile dwelling rather than rely on the Government to furnish them public housing at the taxpayers' expense. The purchaser of a $5,000 fixed-to-site house under section 8 of title I puts down only $250 and under the longterm FHA-insured mortgage pays less than $31 a month. For a $5,000 mobile dwelling, the purchaser might have to lay out $1,667 and would have monthly payments to pay of about $100 plus an average of about $25 for ground rent and utilities. At the end of several years, of course, the trailercoach purchaser will be in a much better position than the fixed-to-site homeowner who will have to continue his payments for many more years. However, the intitial financial lead of purchasing a trailer-coach mobile dwelling is a hardship for most purchasers and prohibitive for many. It would cost the United States Government nothing to provide the same kind

of credit insurance for trailer-coach purchasers as it does for such purposes as property improvement.

The trailer coach mobile dwelling needs and deserves FHA credit guaranties such as are extended to the low-cost housing or property improvements. Until the National Housing Act is amended to accomplish that purpose, millions of Americans are penalized for exercising a choice in selecting the type of dwelling most suited to their own needs.

A proposal to the Congress of the United States for legislative recognition of the trailer coach dwelling as an essential part of the national housing resources. Congress can remedy the major credit difficulties of the trailer coach mobile dwelling purchaser by amending the National Housing Act in two ways:

1. To authorize FHA to insure lending institutions against losses of up to 10 percent of their outstanding loans to finance the purchase of trailer coaches for occupancy as dwellings by their owners: Provided that each such loan shall not be for a term of more than 7 years or exceed $5,000 or 75 percent of the purchase price of the trailer, whichever is less; and that the dwellings are certified to the lenders as meeting minimum FHA standards for trailer coach mobile home construction.

2. To authorize FHA to insure mortgage loans to finance the construction or sale of trailer parks meeting FHA minimum standards: Provided that no loan shall exceed $1,000 per trailer space or $300,000 in the aggregate; and that the term of the loan shall not exceed 30 years.

The first of these amendments is patterned along the general lines of title I, class 1 (a) of the National Housing Act and the second follows the general lines of section 207 of title II. These tested provisions of the existing law have provided assistance to homeowners and builders without loss to the United States Government. In the same way, they can be adapted constructively for trailer coach mobile dwellings and trailer coach parks. The results will benefit the people of every State

The benefits of the proposed amendments will be of lasting advantage, not only to the purchasers of trailer coaches but also to the public at large:

1. Trailer coaches are sold by 3,000 dealers, in every State. Very substantial quantities are sold in Ohio, Indiana, Michigan, Texas, Illinois, Pennsylvania, California, New York, Iowa, and Florida.

2. The 150 manufacturers of trailer coaches-whose plants are located in Illinois, Michigan, Indiana, Ohio, Wisconsin, and California and other States are mostly in the small-business category, employing an average of somewhat more than 100 employees per company. They are heavy purchasers of parts and equipment from the lumber industry, the automotive parts industry, the appliance industry, the housefurnishings industry, and others.

3. The 12,000 trailer parks are widely distributed over the country, with a significant number located in such States as California, Florida, Arizona, and Texas. Under the proposed amendment, with its provision for the establishment of FHA standards, these parks will develop into an increasingly valuable community asset.

4. Finally, and most important, there are no housing facilities better adapted for emergencies than the trailer coach mobile dwelling. The trailer coach use during the river flood disaster of 1952, the trailer coach use during such emergency housing shortages as existed at Paducah and Savannah River atomic installations are just two examples. Should natural or military disaster strike, the trailer coach dwelling would be the most useful type of housing in our national resources.

Sober consideration of the public interest fully supports the legislative proposals for the inclusion of the trailer coach mobile dwelling within the provisions of the National Housing Act.

(Attachment E)

QUESTIONS AND ANSWERS CONCERNING PROPOSED LEGISLATION FOR MOBILE

DWELLINGS

(Prepared by the Kaul Co., Washington, D. C., for the Trailer Coach

Association)

The proposed inclusion of trailer-coach and trailer-park financing under the credit insurance provisions of the National Housing Act naturally gives rise to

some basic questions about the industry's practices and experience. The following questions and answers are intended to provide information for those seeking to understand the practical effect of the proposal.

Q. To what extent does the trailer-coach mobile home supply the market for low-cost housing?

A. According to the Sixth Annual Report of the Housing Agency, some 6,200 houses costing less than $6,000 each were built under FHA insurance in 1952. This represents the bulk of nonfarm housing in this cost category. The 83,000 trailer-coach mobile dwellings sold that year under $6,000 each constitute about 90 percent of the housing in this low-cost category.

Q. Who are the people that live in trailer-coach mobile homes?

A. More than 2 million people, the families of service personnel, defense workers, construction workers, agricultural workers, and others in mobile or semimobile occupations; newlyweds; retired folks. Most of these people live permanently or indefinitely in trailer-coach dwellings. About 2 out of 3 trailer coach dwellings are sold to people who have lived in such dwellings previously.

Q. What are the terms now for trailer coach financing and how would it be if it were included as proposed under title I of the National Housing Act? A. There are some $400 million of outstanding loans on trailer coaches. Present terms provide for downpayment of one-fourth to one-third of price, 3- to 5-year term, 5- to 7-percent discount. Under proposal, eligible loans would require downpayment of 25 percent and would have a maximum term of 7 years and interest would be at 5-percent discount.

Q. How are trailer parks now financed and how does it compare with what is proposed?

A. Trailer parks are now financed under a great variety of terms and conditions. Mortgages not infrequently call for 6 percent interest with repayment in 15 years or less.

Q. Are trailer coaches now included in the National Housing Act?

A. Under the Defense Housing Act, Public Law 189, the Housing Administrator was authorized to buy trailer coaches as temporary defense housing, but this authority expires June 30, 1954, and its renewal is not being sought in the pending Housing Act of 1954. The trailer-coach mobile dwelling has never been included in the homeownership FHA credit-insurance program.

Q. As a practical matter, isn't it true that there just is no shortage of trailercoach financing at this time?

A. Frequently money is not available at reasonable terms and conditions when compared with what is available for fixed-to-site housing. The terms and conditions of financing are often reminiscent of those which are more appropriate when trailer coaches were tourist items and were financed along the lines of automobile financing. What is needed is financing on terms which will permit this low-cost housing to be purchased with reasonable downpayments and reasonable monthly payments. That kind of financing is practically nonexistent now. Q. Have you made any estimates of the volume of loans that would be made under your proposals?

A. FHA insurance is used in only one-sixth of the loans for property improvements. By analogy when we take into account downpayments of 25 percent, it seems reasonable that FHA-insured loans probably would amount to about $50 million of a total of 350 or 400 million dollars of sales.

Q. Can you illustrate how the trailer coach buyer would benefit from the proposal?

A. Let us look at a family which is buying a trailer coach for $5,000. Under the most favorable financing generally available today the buyer would make a downpayment of $1,250 and would pay $78 a month on the 5-year loan. To this is added about $25 a month for trailer space, bringing total payments to $103 a month.

Under the proposal, assuming the same downpayment, monthly payments on the 7-year loon would be $60 a month and total payments $85 a month, a reduction of $18 a month.

In addition, there would be the indirect benefits from improved trailer park facilities, perhaps at lower rent. The family would also have a better chance to trade in their present trailer dwelling because the sale of used trailers would be helped by the proposed legislation.

Q. Will it be necessary to increase the FHA authorization under this proposal? A. We think not: Title I has an authorization of $1,750 million and it revolves rapidly due to the relatively short term of loans. On December 30, 1953, au