Senator CAIN. We hope to help as a committee in getting the housing you need, and we would like to get it in the easiest and most practical and cheapest way.

Admiral MAHER. Yes, sir.

Senator CAIN. We are in entire agreement there, I take it.
The CHAIRMAN. Will you proceed, Admiral?

Admiral MAHER. This does not take into account 39,842 temporary low-cost rental units presently controlled by the Navy and consisting of defense housing, Homoja-Quonset huts-and trailer units, substandard as to size and suitability of facilities and conveniences, which are in an extremely poor maintenance status and of which it is estimated that 14,000 units should be replaced within the near future by permanent housing of standard size with modern facilities.

Senator CAIN. May I ask one question? In reference to your phrase "Which are in an extremely poor maintenance status"-does that infer that you think some of them are not subject to repair and proper maintenance and you are just going to write them off?

Admiral MAHER. This 39,842 includes some nearly 27,000 units we obtained through FHA. The others are Quonset huts and very, very substandard housing.

Now, it is those 14,000 substandard Quonset huts, and so on, I am stating we now should replace, but we cannot replace them until we can get some more housing. They are better than nothing.

Senator CAIN. Yes, sir.

Admiral MAHER. It is realized that it is impossible to secure funds in an amount sufficient to provide new or converted housing for all naval personnel during a period of Nation-wide housing shortage and therefore representatives of the Navy have given a great deal of personal attention to this important problem and have conferred with many private builders in an attempt to interest them in constructing rental housing in the vicinity of naval activities. However, these efforts have met with little success since the builders hesitate to take the risk involved in constructing housing primarily to serve naval personnel.

That is because they haven't the adequate legislation at present.

It appears that construction of rental housing in cities where naval activities are located offers no advantages to large investors under present conditions. These advantages are readily obtainable in larger measure in the civilian market. There is a large backlog demand for construction of civilian rental housing in many sections of the country, and almost every large city offers investors a guaranteed market for any rental housing undertaken. The problem confronting large investors is the accomplishment of construction within cost limits at today's price levels that will permit establishment of rents which can be afforded by average civilian income groups. Construction of housing for naval personnel confronts an investor with having to reach lower rent levels than those he can establish for average civilian groups, since a large part of the Navy's needs are for enlisted personnel. The investor is also faced with a higher rate of turn-over, which is costly, and if he operates on the basis of some understanding with the Navy regarding occupancy, he ceases to be a free agent to play the competitive market.

The CHAIRMAN. Admiral, would you furnish the allowance for the enlisted men?

Admiral MAHER. $37.50-oh, you want it for all, to have it inserted in the record.

The CHAIRMAN. I would like to have the allowances.

Admiral MAHER. Allowances for all pay grades inserted in the record?

(The following was later submitted for the record in response to

the above :)

Question. List the rental allowances for all pay grades.

Answer. The rental allowances for officers are listed below, with those for the enlisted personnel following.

1 In the above calculation on family allowance no consideration is made for increase allowance for children; i. e., $30 first child and $20 for each thereafter.

2 Pay grades 1 to 3 checked $27 ($0.90 per day), reducing amount received to $32.50.

3 Optional in lieu of subsistence in kind.

The CHAIRMAN. That is a statement you made, and I know it is true. You say:

since a large part of the Navy's needs are for enlisted personnel

all of which I know.

Admiral MAHER. The reason I would like to obtain it and insert it, for enlisted men and officers, there are 77 different rates of pay.

The CHAIRMAN. You have so many highly skilled men.
Admiral MAHER. Yes. I think I had better submit it.

The CHAIRMAN. Another thing I wish you would submit if you could I feel Senator Cain and all of us would like to have it-is a report of the Navy's expenditures for housing on Guam.

Admiral MAHER. About 212 to 1.

The CHAIRMAN. There are so many bases throughout the world, I mean so many permanent ones, if you could submit for the record also your estimate of the

Admiral MAHER. Cost index in the various locations?

The CHAIRMAN. That is right, as compared with the United States. Senator SPARKMAN. Including the Canal Zone.

(The following was later submitted for the record in response to the above:)

Question: Compare the cost of construction of family quarters in the continental United States with that at various overseas areas.

Roads, walks, and outside services ($2,500×1.4).

Caribbean area, basic construction cost plus 40 percent (cost factor 1.4) :
Construction ($14,000×1.4)‒‒‒‒

19, 600 3,500

Total__

23, 100

Construction ($14,000×1.6).

Hawaiian Islands, basic construction cost plus 60 percent (cost factor 1.6):

Roads, walks, and outside services ($2,500×1.6).

Total___.

Marianas, Samoa, and Philippine Islands, basic construction cost plus 100 percent (cost factor 2.0):

26, 400

Construction ($14,000×2.0) –.

Roads, walks, and outside services ($2,500×2.0).

Total----

Marshall, Caroline, Kwajalein, Johnston, and Midway Islands, and
Newfoundland, basic construction cost plus 70 percent (cost factor

1.7):

Construction ($14,000×1.7) –

Roads, walks, and outside services ($2,500×1.7) –

Total__

Ryukyu, Volcano, Wake and Marcus Islands, South Alaska, Kodiak, and Dutch Harbor, basic construction cost plus 160 percent (cost factor 2.6):

Construction ($14,000 × 2.6).

Roads, walks, outside services ($2,500 × 2.6).

Total.

Costs of family quarters—Continued

OVERSEAS continued

Aleutian Islands, basic construction cost plus 200 percent (cost factor

3.0):

Construction ($14,000 × 3.0).

Roads, walks, and outside services ($2,500 × 3.0).

Total___

$42, 000 7,500

49, 500

NOTE. The figures listed above for both continental and overseas construction, do not include costs of collateral equipment (furniture, ranges, and refrigerators).

Senator CAIN. Admiral, one question. You are pretty well posted on today's construction costs.

Admiral MAHER. Yes.

Senator CAIN. Do you think with reference to those costs that units. can comfortably be constructed for the cost set out in the proposed legislation of $9,000 in the continental United States?

Admiral MAHER. In continental United States it will

Senator CAIN. That means a varying figure, as I read the proposal, of anywhere from $12,000 on the top side to $5,000 or $6,000 on the low side.

Admiral MAHER. Of course $9,000, 95 percent would be about $9,500, the total cost.

Senator CAIN. No, I think the bill

Admiral MAHER. The $9,000 is the insurance, the top insurance cost. The 95 percent would make it a little under $9,500. I think for that amount you could get a reasonable house, with the way it is provided for in the bill. The inducement of the Government land or leased land reduces the over-all cost.

I do not think you get very much of a house for that money, but anything we get is better than what we have got now. In other words, we are looking for relief and not adequate housing. I would not say that you would get what you would call or I would call adequate housing from this bill, but I do say it will give the services a very considerable relief.

Senator CAIN. Well, most-I would not say most, because I am not an authority in that field, but there are thousands of well-constructed, nicely designed small houses being constructed privately in this country today for figures around $7,000, $7,500. If that can be done for the average American family to live in, I think it would be construed that to spend $9,500 you would get a habitable, adequate home for the average family of the National Military Establishment.

Admiral MAHER. I do not believe, Senator, that the average construction cost for American families is $7,500. I think it is over $10,000.

Senator CAIN. I say there are thousands of such accommodations being constructed.

Admiral MAHER. Yes, sir.

Senator SPARKMAN. Admiral, the personnel in the Navy-and I am sure this is true in all branches of the service-who need this housing help most are your noncommissioned personnel?

Admiral MAHER. Yes, sir.

Senator SPARKMAN. And your junior grade officers, is that right? Admiral MAHER. Yes, sir; and I think I should add this, in answering Senator Cain: That it is not my understanding that all of this housing is going to be constructed at a cost of $9,000. Otherwise, the

enlisted men, in my opinion, could not afford to rent it. The average cost, I would say, would be considerably lower than that.

Senator CAIN. That is the top ceiling.

Admiral MAHER. This is the top ceiling; yes, sir. In other words, for $9,000 you have got to get a rental of something like $70 or $75 a month if you are going to amortize it unless there are certain inducements in here that reduce cost. It is just a matter of arithmetic.

Senator CAIN. We take one example of a thousand units for a naval station, and assume there would be $10,000 houses, $5,000, $6,500 houses, and so on, the average of which would not exceed the limit of the bill. Admiral MAHER. Yes; of course, the conditions will also tend to increase the average cost, the overseas area where your price index is 2 or 212 or 3 to 1, and in those areas it will be difficult to get very much housing out of this bill.

The CHAIRMAN. This is merely a maximum.

Admiral MAHER. That is right; yes, sir; that is my understanding. Senator SPARKMAN. If your noncommissoned personnel are to get the relief they have got to find housing that will rent for around $50 a month, have they not, $50 or $60 a month?

Admiral MAHER. Yes; I would assume so, and of course by an administrative decision it could be-whatever average is struck you should add $10 on the officers per month and cut off $10 from the enlisted men, and strike an average. I mean some administrative decision could be made whereby it would be possible for the enlisted men to get relief from this bill.

The CHAIRMAN. Proceed, Admiral.

Admiral MAHER. The Department of the Navy would like to point out at this time that S. 1184 will not, in itself, serve as an answer to all of the Navy's housing problems since all of our personnel cannot afford to pay the rents required to offset the high construction costs.

It may be that construction costs will be cut down in some cases since the land factor will be considerably less in areas near isolated stations or the project will be built on Government-owned land. However, it is doubtful whether or not such a factor will overcome the other increasing costs such as labor, transportation of materials, and so forth, so that a rental may be established low enough to accommodate the majority of enlisted personnel.

In other words, administrative decision would probably have to be made to overcome that if they could not afford it. The officers might be required to pay $10 more and the enlisted men $10 less.

Senator CAIN. Admiral, do you see any virtue in a possible amendment which would require that all of the construction should be on the military establishment, if there was an availability of space to accommodate the size of the program? I ask that question because of one of your last sentences in which you said there may be a lesser cost because of a lower land cost.

I personally think that such a provision would make the bill more effective in a good many instances. Not to require that the buildings be on site if there is a congested area, but with reference to many military establishments with which I personally am acquainted, I would be distressed to think the project was built 8 miles from the confines of the project when the project itself has more space than can be used for 50 years at the present time. We want to save every penny, get more houses, and fulfill your desire.