The CHAIRMAN. Isn't there some peril in building in proximity of military and naval installations because of the fact there might be a war? What effect do you think that would have on private investors?

Captain VAN METRE. I believe the bases we will select and certify as being a good risk will, in general, be those establishments which can be considered permanent as far as we can foresee at least for the rumber of years which would be necessary to amortize the investment. We realize we cannot ask for this housing in some of our isolated stations which might be closed up in a few years. We would have to be careful in selecting those areas in which we can interest private contractors in building this type of housing.

Mr. BUCHANAN. All these confines are within the continental part of the United States?

Captain VAN METRE. Continental United States, Puerto Rico, Alaska

Mr. BUCHANAN. Alaska is not included, is it?

Captain VAN METRE. Alaska, Hawaii, Puerto Rico, the District of Columbia, and the Virgin Islands, sir.

Mr. COLE. Captain, is this the only bill that the armed services will ask for with reference to housing? Is there another plan in the making now?

Captain VAN METRE. I think there is another plan that has been considered, sir. I am not sure how far along the plans are in any other proposal.

Mr. COLE. I read something in the paper the other day-I believe that Secretary Johnson mentioned it-whereby the services themselves might build housing. Are you familiar with that?

Captain VAN METRE. I do not believe I am, sir.

General REEDER. I believe you are referring to the construction authorization bill which is being sent from the National Military Establishment to the Bureau of the Budget and thence to Congress. Captain VAN METRE. That is in our regular public-works program. Mr. COLE. That is a housing program, is it not?

General REEDER. That is right.

Mr. COLE. About $300,000,000?

Captain VAN METRE. I believe it was.

Mr. COLE. I am rather vague about it. I only have information from news reports.

Captain VAN METRE. I believe, Mr. Congressman, the idea was because of the more or less critical housing situation, they separated the housing from the public-works project. They are submitting it as a separate request for housing.

Mr. COLE. I understand, then, that is now being presented to the Bureau of the Budget and will be later presented to the proper committee in Congress.

Captain VAN METRE. Yes.

Mr. DEANE. Will you yield?

Mr. COLE. Yes.

Mr. DEANE. I heard this morning similar legislation was in the process of clearing. I was wondering to what extent we are overlapping our efforts.

Captain VAN METRE. I think when we have solved this, we will not solve the entire situation. We all intend to pursue a request for housing under the public-works funds.

Mr. DEANE. Do you not think we ought to have a picture of the entire needs?

Captain VAN METRE. I think we all have an idea of the general needs. On these isolated stations, where there is a relative danger, we will ask for only one or two houses on the public works program where we can house our commanding officer and those necessary to live on the station for command, administrative and security responsibilities. We will still seek that housing under the works program. Mr. DEANE. Could you point out where serious housing conditions exist at naval bases?

Captain VAN METRE. In the naval district, in Norfolk, they have a shortage of 3,000 units in that area. That would be for the shorebased personnel as well as our fleet.

A lot of our fleet is based there. There is a great lack of housing. Pawtuxant is a serious place for the Navy. We have a large number of fleet air units which operate out of there. It is a small community. It is the only supporting establishment in that area.

Mr. DEANE. Thank you.

Mr. MCKINNON. You used to allow, according to rank, a certain amount of money for each rank for housing. If this particular person is moved and put in naval housing such as this type, will that commutation be reestablished and probably graded down in a case where the fellow is in a $40-a-month house when you have allowed him $80 a month?

Captain VAN METRE. This would be entirely rental housing. He would be paid his rental allowance.

Mr. MCKINNON. The change in commutation affects only a person who goes into something he owns himself?

Captain VAN METRE. When he moves into the quarters which the Navy owns, he is not paid the commutation for quarters.

Mr. MCKINNON. This would not affect his commutation if you allowed him $80 and he would move into a place like this for $40, you would still pay him $80?

Captain VAN METRE. As Mr. Zuckert pointed out, the scale would vary from $55 to $85. The enlisted personnel who are paying $37.50 would have to be paid in the neighborhood of $35. The junior officers would pay an amount of rental almost equal to that.

Mr. MCKINNON. The Navy followed the same policy the Air Force enunciated a minute ago.

Captain VAN METRE. Yes, sir; we intend to work the same way. It is primarily to provide for our enlisted personnel and junior officers. Mr. MCKINNON. Would this be an aid at the Marine camp at Pendleton?

Captain VAN METRE. I can't remember how serious the situation is there. We have had a need of about 500 houses there.

Mr. BUCHANAN. We reported a bill before this committee. I do not think the testimony stated whether or not you could build houses in Alaska or any of the outlying Territories at the figures proposed in this legislation.

Captain VAN METRE. The construction is two to three times as much as it is in the continental United States.

Mr. MITCHELL. Captain, in view of the fact, as has been testified here, the rental will be from $55 to $85, in that neighborhood, why is

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the risk to the private builder so great in connection with a military establishment? Most of these houses will go into permanent bases. Captain VAN METRE. That is only true except where the establishment is completely isolated. Many of our naval establishments are in communities where we still have a housing shortage and our personnel cannot get adequate housing. In those cases, I think private contractors are reluctant to build housing specifically for the military because of the transient nature. They move out, and the contractor has to redecorate. If he can get a permanent resident from the civilians, he would rather have him than the military.

In isolated stations, where there are no communities to support it, the private contractor would hesitate to build housing out there. He might be afraid it might close up and he would have the housing on his hands.

Mr. MITCHELL. As far as the isolated establishment is concerned, I can understand. Where you have a permanent establishment, it seems to me the constancy of the military pay would be an incentive. Captain VAN METRE. It works the other way. Most of the contractors prefer to have civilian people occupy their quarters because of the unpermanency of the military personnel.

Mr. MITCHELL. The American Home Builders told us they could build houses which would rent from $29 a month up. This seems to me to be a fertile field for their operation.

Captain VAN METRE. In discussions with one contractor in the Pawtuxant case, they indicated they could build them for $40 a month rental.

Mr. MITCHELL. What is his explantion for not building them, the added cost of upkeep?

Captain VAN METRE. Under the existing law, the FHA was hesitant to insure the construction because Pawtuxant is the only installation in the area. If it folded up, there would be no housing.

Mr. MITCHELL. Then it is FHA which does not want to take a chance on the permanency of the Military Establishment.

Captain VAN METRE. They have to certify there is no risk before they will insure the loan for a private construction.

Mr. MITCHELL. Can you not give them assurance of the permanency of the base? Is that the question?

Captain VAN METRE. That depends so much on Congress. We hope they will be permanent.

Mr. MITCHELL. Every house depends on an industry of some kind. You cannot guarantee in any community the permanency of an industry.

Captain VAN METRE. That is correct.

General REEDER. This bill breaks the bottleneck under which the FHA labors. They must have an alternate rental or use for the project. At many of the installations which are relatively permanent in our foresight, there is no alternate for them and the FHA is prevented from insuring. It is the FHA that comes in and not the desire of the contractor to build.

The contractor wants the reassurance and the FHA cannot give it to him.

The CHAIRMAN. Any further questions? You may stand aside. Thank you.

Maj. Gen. W. O. Reeder.

STATEMENT OF MAJ. GEN. W. O. REEDER, DIRECTOR OF
LOGISTICS, UNITED STATES ARMY

The CHAIRMAN. Identify yourself, please.

General REEDER. I am Maj. Gen. W. O. Reeder, Director of Logistics, United States Army.

Mr. Chairman and gentlemen, the Department of the Army is vitally interested in H. R. 4491 and strongly recommends that your committee consider it favorably.

The Secretary of the Air Force has told you of the critical housing shortage existing in the armed services. This shortage of housing facilities is not peculiar to any one service; it is a problem that adversely affects all of them. The Department of the Army does not believe that the legislation being considered by your committee today is a panacea for all its housing troubles. It does, however, believe that the enactment of this legislation will be a major step in the right direction.

At the present time, there are approximately 134,000 military and civilian personnel in the Department of the Army, excluding occupied areas, who are entitled by law and regulation to public quarters. However, the Department of the Army has only 33,500 units of all types of public quarters. Of this latter number, only 8,780 are permanent-type quarters.

I would like to point out that the essential feature of this bill is to break certain bottlenecks which have handicapped the private investor from going to the rescue of the armed forces in this matter.

First of all, the FHA required an alternate use for the project at our most isolated stations. There was no alternative use. The FHA could not, therefore, insure the mortgage. Without that insurance, the private investor was unwilling to proceed.

Another point is the provision of utilities. This bill permits the furnishing of utilities in such places by the Government and guarantees they will be so furnished. Again, it protects the investor from what seems to be arbitrary action in regard to the land upon which he may build. If it is used for military purposes, it protects his rights. Those are essential things which are needed to allow the private capital, which is otherwise interested in this type of work, to proceed.

We have some pictures of the conditions under which some of our junior officers and noncommissioned officers are living. We will be glad to show them to the committee, if they have the time to look at them.

The CHAIRMAN. We shall be glad to see them.

General REEDER. Mr. Cole asked a question which perhaps was not as fully answered as you should like. We are proceeding with our normal construction in the Army under public works appropriations, but at the rate at which we foresee we will get appropriations, we will not solve our housing problem now or within the lifetime of anyone in this room.

The economic situation of the United States comes ahead of our needs. The Congress is most unlikely to appropriate in 1 year or any succession of years the amount of money which would house 100,000 military personnel.

This program and the public works program are a complementary thing. There are many places where this particular program is inapplicable either because we cannot guarantee the permanence or because it is so close to a city. Take Washington, D. C.; certainly a place of ample civilian housing. Normally, we would not expect to construct public housing except for a definite purpose, where the necessity for living on the job requires it.

Mr. TALLE. Mr. Chairman.

The CHAIRMAN. Mr. Talle.

Mr. TALLE. Pointing to this picture which was just passed around for members to see, what is the purpose of all of the rubbish in front of the house? It seems to me the occupants could have removed that. General REEDER. This is in Alaska. I expect some of this they would burn. Wood is worth its weight in gold.

Mr. TALLE. A picture which displays an occupant's attitude such as this, rubbish at the front door, is not a good exhibit.

Mr. COLE. When you have pictures of slums, you always have pictures of the wash hanging out.

General REEDER. That comes to an old thing which I have discussed a lot of times around Washington. They say you put a man in a place and charge him too much for it because he does not take care of it. He says he will not take care of it because they charge too much. It is true here in Washington. There are thousands of people here living in poor accommodations who are paying exorbitant

rent.

Mr. COLE. Do you know what the per family unit cost of the housing will be under the bill?

General REEDER. I think it has to average. For a $9,000 house, you have to rent it for $80 to $90 a month. I do not think private capital is going to be so eleemosynary in its operation that they fail to include things like taxes and insurance, amortization and upkeep and profit.

Mr. COLE. It is my understanding that if the armed services provide houses under your public-works program, their family unit cost will exceed the family unit cost in this bill.

General REEDER. That is correct.

Mr. COLE. Do you know how much?

General REEDER. The average figure which takes into account all housing proposed in the public housing authorization is $14,000. This is $9,000. That $14,000 includes the streets and some extensions which are not included here. We also run into a cost in complying with all the laws of Congress regarding labor. That increases our labor cost when we build a public job about 13 percent over what a private contractor needs when not complying with those laws.

Our inspection standards are more rigid. That costs us money both to do it and require it. Furthermore, we build with the idea that the over-all long-term cost, both initial and recurring, due to maintenance, will be less when we put a little more money into it. Does that answer your question, sir?

Mr. COLE. Yes, sir.

The CHAIRMAN. The more houses we build under this, the less direct appropriation we will have to make to build; is that not true? It will effect a savings to the Government?