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We believe that these requirements are not only Philadelphia's but most of the large cities in the country. We hope that your committee will take the necessary steps to amend the legislation along the lines suggested.

TABLE 1.-Comparison of arrests based on residence in blighted versus nonblighted areas, city of Philadelphia, 1953

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1 Areas declared blighted by the City Planning Commission of the City of Philadelphia fall in the police districts here cited. Since there is no exact correlation between boundaries of the police districts and the boundaries of certified blighted areas, allowance was made for overlapping into fringe areas. It should also be noted that two areas were completely omitted: the Aramingo area, which is principally an industrial community, and the Rittenhouse-Germantown area, which constitutes only a small part of several census tracts, which are not generally blighted.

TABLE 2.-Dwelling units added 1950-53 by year of permit
[All dwelling units according to the United States census, 1950-599,495]

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1 Of these, 761 were razed as result of permits issued to the housing and redevelopment authorities. NOTE.-Estimated total dwelling units in Philadelphia, Jan. 1, 1954 (including those under construction),


Source: Philadelphia Housing Association, October 1953.

TABLE 3.-Total income received during 1949 by families and unrelated individuals in certified redevelopment areas and Philadelphia

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12 areas were completely omitted: the Aramingo area, which is principally an industrial community, and the Rittenhouse-Germantown area, which constitutes only a small portion of several census tracts, which are not generally blighted. The boundaries of redeveloped areas are close to but do not cofneide exactly with those of census tracts.

Source: Philadelphia City Planning Commission, Mar. 15, 1954.


My name is Jerry Bialac, of Beverly Hills, Calif. My specialty is rental housing. Together with my father, Samuel G. Bialac and our associates, we plan, build, and operate low-, medium-rent apartment projects. I have the honor and privilege of appearing before you for the second time to present, as a private citizen, the opinions of many of my colleagues and myself and we feel that through our practical experience and specialized study of the rental housing field and the mortgage market relative to rental housing, we may be able to contribute material that may help you in your endeavors to improve the housing bill before you and solve serious inadequacies in the universally important industry I serve. I want to thank you for the courteous, helpful treatment I received on my first appearnce before this important body. I return, confident and at ease, knowing that my suggestions will receive full consideration. This is doubly reassuring as I seem to be the only one testifying to any length on the vital rental problem. Last year I predicted a great decline in FHA housing starts. This came to pass. This year, in spite of the slow start of the first 2 months, will be the biggest year in housing starts since the war. The reason being, there will be plenty of financing available. Unfortunately this is only a temporary condition and as the ever-changing financial cycle runs on and demands on money increase from other sources, less and less will be available to the builders and construction will again slow down. This need not happen. You have heard expert testimony before me on the huge number of living units needed in future years and a smooth flow fulfilling that need could be realized with the proper secondary or support market that would be brought into play when needed, not as a competition to private financing but rather as an aid to it.

A fine start has been made on this under title III of this bill. However, while the basic idea behind this is sound and could solve the problem, it is a obvious, by the many changes and criticisms of the actual workings and fees, which you have heard in previous testimony by both the builders and the bankers, and which I shall not repeat now, that a more extensive study be made of the section. As the revison of FNMA now stands, for rental housing at any rate, it only offers to give the builder a push as he stands on the precipice overlooking the chasm of certain failure. I therefore respectfully submit:

1. That FNMA should be continued in its present form for another year. With a renewal of a plan similar to the 1-1 program but changed to a ratio of 9 to 10.

In other words, for every mortgage of $100 bought, a certificate would be issued for a $90 commitment. This would allow FNMA to diminish its portfolio by 10 percent. No further funds would be necessary if FNMA would be allowed to sell short-term debentures secured by its portfolio.

2. A commission of experts be appointed to investigate further and recommend more realistic fees and make further recommendations to perfect this very complicated and controversial title III of the housing bill which, I am sure, can become very workable for everyone.

Even distribution of mortgage money

I am sure that you gentlemen who are from the South, Middle West, and Far West have heard many times from your constitutents that the farther away from New York, the more difficult it is to get financing for a mortgage and the greater discount you must pay. This is not because the mortgages are not just as desirable but the mortgagees are reluctant to expand any substantial sums in areas which are not thoroughly familiar to them and where they have to rely on others for servicing and general supervision of their investment. They naturally consider these greater risks.

One of the greatest hazards to our housing economy is growing daily. While the center of population moves westward at an accelerated pace, the center of finance remains in the Far East. Therefore we suggest:

3. That the term of the debentures that would be issued (only in case of failure of a project) would decrease and the interest rate increase proportionately with the distance from the point of origin of the loan to the city that the actual project would be built.

For example, the present debentures under 207 are for a term of 10 years, at 234 percent. Under the proposal loans made in New York to a project in New York or near proximity would be entitled to debentures at that rate. A loan made in New York to a project in Indiana would get 9-year debentures at 2% percent and a loan made in New York to a project in Portland, Oreg., would receive 8-year debentures at 3 percent. These rates are only arbitrary; the actual rates would be set by the Housing Administrator and would compensate the lender for his additional risk and would divert the flow of moneys more realistically into their proper markets.


We support paragraphs 1 and 2 of title II, section 115, and the first part of paragraph 3, up to and including $2,400 per room for elevator-type structures. As builders of large-scale apartments we have concentrated mostly on gardentype structures because of the more realistic financing-to-cost ratio and the availability of land close in to the heavily populated area. However, in an alarmingly short time, because of the large tracts of buildings filling in these areas and the fantastic pyramiding of land costs, which make the per-unit price economically unwise, we are forced farther and farther away from the center of the city. The dangers of this condition are multifold. First, it is forcing more and more people to rely on their cars for transportation to their jobs in already overly congested streets; secondly, it is forcing the population to spread out, adding to the great and ever-increasing load on the school system's shortages of schools and has made proper patrolling by police departments impossible. I 'could go on and on, but I'm sure that isn't necessary.

The cure for this condition lies in more elevator-type structures which can stand the higher land cost by dividing the cost of the land into many more units. A step in the right direction has been taken by increasing the allowable room mortgage amount to $2.400 in the elevator-type structures which is a 17-percent increase over room mortgage amount of walkup apartments (the actual difference in cost is over 20 percent), but then cancels this gain by limiting it to only $7.500 per family unit which amounts to only a 4-percent increase when the average room count is under 4. In order to make the provision workable the figures must be changed proportionately (17 percent). Therefore, this section should be corrected to read:

4. That in elevator-type structures the mortgage amount limitation be $2,400 per room and $8,500 per family unit (less than 4 rooms). This increase would be in exact proportion to the walk-up structures.

5. We are opposed to the proviso that present statutory mortgage limits would continue unless the President has prescribed higher limits. These higher limits are needed now and should be incorporated in this bill.


Clarification of present statute

In the President's Advisory Committee on Housing Report, page 40, recommendation No. 14, reads as follows:

"Your subcommittee recommends that section 207 of the present statute be amended to clarify the authority of FHA to insure loans up to 90 percent of value but not in excess of $7,200. The statute is presently interpreted to restrict this special aid to projects in which all units have two or more bedrooms. The subcommittee recommends that this be changed to projects in which the average number of bedrooms is not less than two per unit."


6. We are in favor of eliminating any termination date on this section as we feel it fulfills a definite need in the rental field.

The construction industry in this country has grown far beyond the position it formerly occupied and is now one of the most important industries in the United States today. I include all phases of construction in this category, housing, commercial, road-building, dams, and general construction which takes in construction of public buildings, schools, defense factories, etc.

The economic growth, health, defense, education, and wealth of this country are all directly dependent on this industry, yet, the Government does not fully recognize or make full use of the mighty, but now disassembled arm.

A Department of Housing and Construction should be set up and a new Cabinet post of Secretary of Housing and Construction created. I know this is not pertinent to this bill, but we felt by bringing it to the attention of your Action Committee, at this time, that the movement would start. The choice of a Secretary of Housing and Construction is ready-made and proven in the present Housing Administrator, Mr. Albert Cole.

I again thank you for your consideration.


The United Community Defense Services wishes to take this opportunity to express for the record its concern regarding the continuing acute situation of many communities affected by a concentration of defense activities and their need for special measures to assist them in meeting the housing and related requirements of a rapidly expanding population. Specifically we wish to express support for certain features of H. R. 7839 but also to request that it be amended to extend the provisions of title IX (Defense Housing Act) of the National Housing Act and title III of the Defense Community Facilities and Services Act of 1951.

The United Community Defense Services is a federation of national voluntary agencies extending aid and service to communities affected by a heavy concentration of defense activities. Our own activities are financed entirely by voluntary contributions and are directed largely to facilitating local community adjustment to defense-created conditions. As a result of the work of our own UCDS fieid representatives and those of our affiliate organizations in over 400 such communities, however, we have had an excellent opportunity to observe the local impact of Federal decisions and policies and the extent to which Federal aid is necessary in their solution.

In titles VIII and IX of the National Housing Act and in the Defense Community Facilities and Services Act of 1951, the Congress recognized the responsibility of the Federal Government to aid defense communities in providing the necessary housing and related facilities, such as water supply and sewage-disposal facilities, without which community expansion is impossible. This has been a necessary aspect of defense policy, since expansion of the Military Establishment and defense production could not move forward without an adequate labor supply, and labor supply-in a free society and especially in peacetimecannot be attracted to the centers of defense production without the basic necessities of family living. Fundamental among these basic necessities is a decent place to live, within reasonable distance of the place of employment, at a nonexploitive rent and supplied with community services which are a normal and accepted part of the American standard of living. Repeatedly in our work we have seen examples of situations where defense activity was delayed,

rendered more costly by reason of heavy labor turnover, or reduced in efficiency by the necessity to utilize labor less skilled than the job properly required because acute housing shortages made it impossible to attract or retain the needed labor supply.

It is obvious from the President's messages to the Congress and from the continuing tension in the world situation that the defense program must continue to utilize a considerable share of our productive capacity. The President's budget message shows 68 cents of every Federal budget dollar going into our national security programs. Moreover, it is clear from this same message that considerable readjustment in the specific implementation of defense policy must be anticipated as a result of the basic strategic decision to rely more heavily on airpower and nuclear weapons than in the past. The very development of those weapons in itself involves continuing readjustment in military installations and in plant location and expansion.

The Atomic Energy Commission, in its 14th semiannual report, stated that its monthly constructions costs would reach "a peak of about $130 million during the early part of 1954. They will then approximate 5 percent of total estimated United States new construction expenditures." The importance of this to the present discussion is indicated in a recent reply to a UCDS inquiry in which the Atomic Energy Commission stated its policy of relying on nearby communities, aided by such Federal measures as those whose extension we now urge, to meet the housing and related needs of these workers.1

Our own field representative, working in the vicinity of the Pike County, Ohio, Atomic Energy installation, sends us one example of continuing need when he reports that defense-housing construction is now virtually complete, that there are virtually no vacancies in the area, and nearly 10,000 workers still to come. Another type of continuing dislocation resulting from changes in our military strategy is reported by one of our agencies in terms of an acute situation in the vicinity of Camp Carson, Colo., which has recently been obliged to absorb the personnel of Camp Atterbury, Ind., as a result of the so-called New Look in defense policy. This type of military relocation-with its accompanying changes in defense-production requirements-is certain to create a continuing pattern of population shift and community dislocation.

In view of these facts, it would seem extremely short-sighted to permit these two basic legislative authorities to expire on June 30, 1954. In view of the difficulty of predicting the exact and detailed nature of defense-housing needs in the future or the capacity of private enterprise to meet such unpredictable needs when they arise, it would appear to us to be the better part of wisdom to continue these two authorities, at the very least on a standby basis (as was recommended by the President's Advisory Committee on Government Housing Policies and Programs with respect to Wherry Act military housing under title VIII). It is basic to the very nature of a defense program to be prepared in advance against all possible contingencies.

On the broader front, we recognize that it is fundamental to meeting the special housing needs created by defense adjustments that there should exist a sufficient total supply of housing, credit arrangements favorable to adequate and flexible private housing construction or renovation, aids to communities in carrying out their own planning responsibilities, and-where necessary-provision for public housing to meet the otherwise unmet housing needs of low-income groups. To the extent that the President's housing program and the Housing Act of 1954 carry cut these objectives, we wish to express our support.

We should like to comment particularly on the value of title VII, providing grants to State, metropolitan, or regional area agencies for metropolitan or regional planning, and to State planning bodies to assist municipalities under 25,000 population in urban planning. It is our own observation that this is one of the most urgent needs of small communities in adjusting to rapid expansion due to defense or other Federal activity. In one instance of extreme urgency (the Savannah River area) we ourselves financed a physical planning survey, but our resources are not adequate for such a function except on a demonstration basis. In another locality of rapid industrial expansion (Bucks County, Pa.) we have had an opportunity to observe the value of State-financed planning services. Problems of incorporation, of zoning, of taxing and property assessment, of districting for various types of services, of physical planning in the extension of roads, water, sewage, and other facilities of related economic and social adjust

1 Copy of AEC letter appended at end of statement.

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