(The information above referred to is as follows:)

RENTS CHARGED TENANTS IN LOW-RENT HOUSING PROJECTS EACH YEAR, 1941-47

The average rents charged in low-rent projects developed under the original United States Housing Act (Public Law 412) are shown in the following table. These rents in almost all cases include heat and other utilities.

In order to show the actual trend in rents for identical groups of projects, they are arranged in groups depending upon the calendar year in which the projects' first fiscal years ended. The average rents charged for all projects is shown in the last column of the table.

1 Includes also (in last 3 years) 2 projects containing 156 units, with first fiscal years ending subsequent to 1944.

The rents charged in low-rent housing projects are based upon the incomes of the tenants. The increases in rents in successive years accordingly reflect the increases in the rent-paying ability of the tenants in the projects.

It will be noted that the general level in rents is somewhat different for the various groups of projects. This is due to the fact that the geographical and racial distribution of the projects is different in each of the groups. For instance, group 2 has lower average rents than groups 1 or 3, due to a larger proportion of projects in southern localities and a larger proportion for Negro occupancy. The average rents for group 4 are low because of the inclusion of Puerto Rico projects with 4,850 units.

Mr. GAMBLE. Mr. Gwinn wanted to ask you a question.

Mr. GWINN. When I yielded to Dr. Smith we were on the question, Mr. Egan, of your statement, which I now quote:

Private enterprise has nothing to fear from the competition of such a program of public housing.

Do you still want to make that statement?

Mr. EGAN. Well, maybe that is too broad a statement. What I want to say is this: That private enterprise has nothing to fear that we are going to compete for the same market which they are serving.

Mr. GWINN. Let us just summarize it, then, to make it clear. Would you say that a private borrower or lender of money was in difficulty if he was competing with a lender who was buying a bond with these guaranties which Dr. Smith described, providing that the Federal Government, from taxation, would make a contribution equal, or substantially equal, to the interest and the amortization on the building which is a security for this bond? That would be some disadvantage, would it not?

Mr. EGAN. That would be, sir.

Mr. GWINN. And that in the event that the whole project was also free from municipal taxation, except for a nominal amount, say 5 percent of the normal, that would also be a disadvantage to private borrowers and private lenders, would it not?

Mr. EGAN. If they were competing for that market, it certainly would be.

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Mr. GWINN. That is what we are talking about. We are talking about competing for the building of houses, private enterprise against public enterprise. Is that not what we are talking about?

Mr. EGAN. Yes. But, Mr. Congressman, private enterprise never reached the families who could not afford an economic rent.

Mr. GWINN. I know that is Government propaganda. You do not prove that when you say it. Let us take an illustration of that, if you want to shift to that, because you have made that statement a number of times.

You are familiar with New York City, are you not?

Mr. EGAN. Yes, sir.

Mr. GWINN. You know of the slums in New York City, between 1920 and 1930?

Mr. EGAN. Yes; I know them. I have been through them.

Mr. GWINN. Yes. Do you know that the slums in New York City were 70 percent vacant in the 1920's-from 1920 to 1930?

Mr. EGAN. I would not be able to give you an opinion on that point. I would not know what the percentage of vacancy was.

Mr. GWINN. Studies of the subject show that the slums in New York City-that is, the slum areas, from 1920 to 1930-reached a stage of 70 percent vacancy.

Mr. BOGGS. Mr. Chairman, may I request that our distinguished colleague insert in the record documentary evidence of that? Mr. GWINN. I will supply that.

Mr. MULTER. You will recall that in 1920 we had an act in New York State dealing with emergency rent laws, for New York City, so that landlords, some owners of slum properties, could not overcharge those tenants because there was no place for them to go.

Mr. GWINN. That was a thing the city could do to clean up its own slums, which it did through private enterprise in the Bronx, in Long Island, and in New Jersey. The people of the slums moved out in the ordinary way, in a free economy, but only to move back again, under Government management of housing, from 1930 to 1940.

Mr. EGAN. Mr. Congressman, there was a very clear regulation by the New York City Housing Authority that every family that went into their federally aided projects had to come from a slum.

Mr. GWINN. Yes. But the point is that people moved out. You condemned private enterprise and extolled Government clearing of slums.

Now, we do not have any proof that I can see, yet, that your statement is true: That private enterprise does not clear slums.

Mr. EGAN. Congressman, they have cleared slums in New York. I have known locations where they have gone in and cleaned them up, for example, Stuyvesant Village, built by the Metropolitan Life Insurance Co. But they are not reaching the families that lived in that area. The families living in that area could never move back into the new private projects.

Mr. GWINN. I do not have any proof that I have seen that public housing is clearing slums, either, and that more slums are cleared. than are created.

Mr. EGAN. I know that in New York City there are areas where the local housing authority has actually cleaned slums. Vladek Homes is one.

Mr. GWINN. You made a specific point, Mr. Egan, and I think it is very interesting: That the Federal Government would not move except to clear slums under this new bill. Is that right?

Mr. EGAN. No. I said this: That there is a provision, title V, in the bill which would permit localities to clear slums under certain financial arrangements with the Federal Government.

Mr. GWINN. But the Federal Government could not be moved to make financial arrangements except to clear slums.

Mr. EGAN. Under the present statute. Under the present statute, in any locality into which we went, we would have to be certain that they eliminated one slum dwelling for every new dwelling built. Mr. GWINN. All right.

Now, you will admit that the overwhelming majority-possibly 80 to 85 percent-of the type of slums that you are going to help remove with Federal funds are in the large cities; is that right?

Mr. EGAN. I would not know about the percentage. I would say the majority are, Congressman.

Mr. GWINN. Well, you would say it was a big majority, would you not?

Mr. EGAN. I would say so; yes, sir.

Mr. GWINN. All the big slums are in the big cities, are they not? Substantially all of them?

Mr. EGAN. Well, there are a great many localities. For instance, there are a great many cities of 100,000 population and less where there are a lot of slums.

Mr. GWINN. Yes, I know. But we are talking about the big jobs. You would still say that the majority of those were in the big cities, would you not?

Mr. EGAN. In numbers, I would say yes; perhaps.

Mr. GWINN. And all our big cities are in our richest States, are they not?

Mr. EGAN. I do not know. I do not know what the conditions of the States are. I know that there are large cities in almost any State. Mr. GWINN. Well, it is your job to know. Are not the biggest slums in the biggest cities? Are not the majority of slums in the largest cities of this country?

Mr. EGAN. I would say the majority; yes.

Mr. GWINN. Well, I would thing you would say so.

Mr. EGAN. Surely.

Mr. GWINN. That is one admission.

Are not all of the big cities in our richest States?

Mr. EGAN. I do not know.

Mr. BOGGS. Do you consider Louisiana one of our richest States? Mr. GWINN. Yes, I would.

Mr. EGAN. There are a lot of large cities in Southern States, which I do not think are rich States.

Mr. BOGGS. It is the best State.

Mr. GAMBLE. It is rich in many things, including its Congressman. Mr. BOGGS. No question about it, Mr. Chairman.

Mr. GWINN. New York City, Boston, Chicago, St. Louis, San Francisco, Los Angeles are all in the richest States, are they not? Mr. EGAN. What about the southern large cities?

Mr. GWINN. Well, I ask you that question. Is it, or is it not, so?

Mr. EGAN. I do not see how I could admit that-that they are all in rich States-because I do not know the situation of the States.

Mr. GWINN. I am talking about the majority. We started to speak about the majority. A large majority-and that is all I am asking. Mr. EGAN. I could not answer that question categorically.

Mr. GWINN. Well, will you please tell me why the farmers, the miners, the fishermen of this country, should set up a Federal Housing Authority to tax the people in New York, in Massachusetts, in Illinois, in California, in Ohio, and other States to take money from the cities, bring it down here to Washington and mush it around, as you mean to, and then send part of it back to the places whence it came to clear slums? Does that seem reasonable to you?

Mr. EGAN. Well, Congressman, let me say this: I know that there have been housing projects built in counties, under county authorities, in small localities, and in particular in mining localities.

Mr. GWINN. Will you please answer that question? Is it reasonable to tax the citizens of these great cities in the rich States, bring the money to Washington, and send it back whence it came in the first place to clear their slums, that money containing the money of the farmers, fishermen, and miners?

Mr. EGAN. Is that not the way our Government operates?

Mr. GWINN. I know, but is it fair? You are an architect and an American citizen. Is it a sound proposition to do that, in politics or in economics?

Mr. EGAN. I cannot make an admission to that, Mr. Congressman. I just feel that that is the way government in the United States, both Federal, State, and local, operates.

Mr. BOGGS. A point of information, Mr. Chairman.

I mentioned 12:30. I thought that I would have at least 5 minutes to examine this witness. It is now 12: 25, and I want 10 minutes now to examine this witness.

Mr. FLETCHER. Is he not coming back?

Mr. GAMBLE. We are going to ask Mr. Egan to come back.

Tomorrow morning the first witness, by prearrangement, and because he had rearranged his schedule to appear tomorrow, is Mr. Brannan, Under Secretary of Agriculture, who will talk on the rural housing features of the bill. Mr. Brannan will be followed by Mr. Egan.

Mr. Egan, can you return tomorrow morning?

Mr. BOGGS. Mr. Chairman, I ask unanimous consent to examine this witness for 5 minutes.

Mr. GAMBLE. It is all right.

Mr. MONRONEY. May I ask a question?

Mr. GAMBLE. If Mr. Boggs will yield.

Mr. BOGGS. I yield.

Mr. MONRONEY. Mr. Egan, are you familiar with the national highway program?

Mr. EGAN. Yes, sir.

Mr. MONRONEY. In which Government funds are invested in all the States?

Mr. EGAN. That is correct.

Mr. MONRONEY. I believe you are familiar with the Public Health Service, in which Government funds are invested in all the States?

Mr. EGAN. That is right.

Mr. MONRONEY. And with old-age assistance, I might add, in which Government funds are invested in all the States?

Mr. EGAN. That is right.

Mr. MONRONEY. So that the same argument used against an amount to promote better housing for the lowest economic levels in all States would apply with equal validity, would it not, against the roads program, or against old-age assistance, or against public health, or even rivers and harbors improvement, and things of that kind?

Mr. EGAN. Exactly so, including agricultural improvements. Mr. BOGGS. Reconstruction Finance Corporation, Federal Deposit Insurance Corporation, Federal Housing Administration?

Mr. EGAN. That is right. And I might add that we do a lot for people outside of the United States.

Mr. MONRONEY. And getting down specifically to housing, it would even apply to Federal Housing Administration and various aids being given at the present time in the amount, I believe, of almost $6,000,000,000.

Mr. BOGGS. Nine billion dollars.

Mr. EGAN. That is correct.

Mr. MONRONEY. So I hardly think that that argument would hold too much water, unless we wanted to abolish the whole thing. If the gentleman does, why, then, we will consider the bills.

Mr. BANTA. Would you say the highway program would be comparable to the public housing program?

Mr. MONRONEY. The argument being made was that these rich States were bringing money to Washington to whence it was being dispersed back to the States.

Mr. BANTA. Persons of all economic status have use of the highways throughout the country.

Mr. MONRONEY. But the same argument of bringing money to Washington and disbursing it back to the rich and the poor States applies here.

Mr. BOGGS. Do you make the same statement about parity payments? Mr. BANTA. Yes.

Mr. BOGGS. The people of New York participate in parity payments to the farmers.

Mr. BANTA. The people of New York are still farmers and get a very substantial part of the payment.

Mr. BOGGS. Mr. Egan, there were some questions asked about the tenants who occupy these projects. Now, is it not a fact that after the Housing Act of 1937 was passed-the war came along shortly thereafter that in all of these projects there were established, by and large, military establishments of some nature, either Army and Navy or otherwise?

Mr. EGAN. That is right.

Mr. BOGGS. So that the War Production Board and the Army and Navy moved in and requested the public housing authority to remove this income limitation on occupancy?

Mr. EGAN. To be absolutely clear on it, they came in and asked us if we would, under Public Law 671, which is an amendment to our act, use those funds which went into those projects to house war workers.