Mr. Vanderslice also complains that the regulations do not permit the adjustment of rents to the rent generally prevailing in hotels in Chicago on March 1, 1949. In recontrolling hotel accommodations in Chicago and New York in the 1949 act, Congress provided that the rents in effect on March 1, 1949, would be the maximum rents. We found from experience that these rents varied greatly, from freeze date rents to rents which were 200 percent or more of the freeze date rents. In view of this rental picture, any attempt to elect a point as representing the rent generally prevailing would be unrealistic and arbitrary. It would be an impossible task, and any application of the March 1, 1949 comparability formula would result in gross inequities to tenants.

(The following statement was submitted for the record by Hon. John C. Kluczynski:)

STATEMENT OF PAUL A. C. ANDERSON FILED WITH THE HOUSE BANKING AND CURRENCY COMMITTEE ON BEHALF OF THE GREATER CHICAGO HOTEL ASSOCIATION

FEDERAL RENT CONTROL IN CHICAGO HOTELS

My name is Paul A. C. Anderson, of Chicago, Ill., and I operate the Fairfax Hotel located at Hyde Park Boulevard and Dorchester Avenue in Chicago. This statement is filed on behalf of the Greater Chicago Hotel Association, of which I am privileged to be chairman of its board of directors, having served as its president during the years 1949 and 1950.

All hotels in the country were decontrolled by action of Congress as of June 30, 1947, and you will recall that residential hotels in Chicago and New York were recontrolled as of April 1, 1949. Inasmuch as New York hotels have been placed under local rent control, the result is that Chicago residential hotels are the only hotels in the United States under the Housing and Rent Act of 1947, as amended. Certainly this is discriminatory.

Our

Chicago hotels are the same as other hotels throughout the country. hotels render the same services and operate in substantially the same manner as hotels elsewhere. There is no need for rent control in Chicago residential hotels. In March of 1951 a survey of occupancy of Chicago residential hotels by Harris, Kerr, Forster & Co., and Horwath & Horwath, the two outstanding accounting firms of the hotel industry, disclosed the following figures:

Harris, Kerr, Forster & Co. (for 26 residential hotels with 10,199 rooms): Occupancy 87.09 percent.

Horwath & Horwath (27 residential hotels with 11,740 rooms): Occupancy 86.37 percent

This shows a vacancy of approximately 13 percent, which certainly proves that no shortage of hotel accommodations exists in Chicago.

Last year when rent control was extended, the Senate adopted an amendment to the Rent Control Act, which would have exempted Chicago residential hotels from rent control. No such amendment was suggested in the House of Representatives, and the proposal was striken by the Senate-House conferees.

We respectfully request your committee to correct this discriminatory situation at this time, and urge the adoption of an amendment to decontrol hotels in Chicago.

The CHAIRMAN. Call the next witness, Mr. Clerk.

Mr. HALLAHAN. The next witness is Mr. Louis V. Ramoneda, president of the American Motor Hotel Association.

STATEMENT OF LOUIS V. RAMONEDA, PRESIDENT, AMERICAN MOTOR HOTEL ASSOCIATION; DIRECTOR, UNITED MOTOR COURTS, PAST PRESIDENT LOUISIANA MOTOR COURT ASSOCIATION

Mr. RAMONEDA. Mr. Chairman, my name is Louis Ramoneda, president of the American Motor Hotel Association.

Motels, motor courts, motor hotels, or tourist courts, as the choice of name may be, have developed along with the automobile and our wonderful system of highways. Nowadays a motor court can be

found in almost every village or town, they are in operation the yearround and have become a part of the great American way of living. Friends and acquaintances often agree to meet at certain motor courts often several hundred miles away. The commercial traveler has adopted the motor court as his home while on the road. At the end of the day he can find friends and acquaintances who too have planned to stop overnight at the same motor court.

The greatest growth or building of motor courts has been within the past 5 years and many of them are of the super de luxe type which represents the best that free enterprise can devise to meet the wants and desires of the traveling public. Any proposed control of or for motor courts would only retard or hamper the future development of a great business enterprise. Instead of controls the best solution would be to allow motor-court construction in designated emergency areas either by private capital or by long-term loans to individuals or corporations organized expressly for the purpose in the emergency area. When a recent ban on certain types of construction was placed in effect, motor courts and hotels were among the very first named to be curbed and future construction would be by permission only. This evidently meant that the Government agencies who wrote this reguladid not consider that there was or would be a shortage of transient housing facilities, either in motor courts or hotels.

Since the ban was placed on motor-court construction, there has been no report of hardship or shortage of transient housing facilities in any locality. This could mean only one thing and that is that there is sufficient housing facilities available and that no housing shortage is predicted as far as motor courts are concerned. There are only a few motor courts located near any of our large industrial areas, instead the motor courts located on the most traveled highways where the business proves better. Motor courts are now being constructed primarily for overnight accommodations for transients and the old-time housekeeping facilities are fast disappearing. Guests staying more than 1 week in a place constitute less than 10 percent of the total average motor-court business. Due to a great number of motor courts now in operation and the amount of business available, there does not appear to be any indication that a rise in rental rates will be coming soon, supply and demand have been the controlling factors and will continue. to be unless controls are placed on the business.

The census report on motor courts recently released by the Bureau of the Census tabulated 25,919 motor courts as of 1948 as compared to 13,521 in 1939 or an increase of 95 percent. If we take these figures as a basis there are over 30,000 motor courts in the United States at the present time. Rental units, consist of one or more bedrooms usually rented as a unit. The number of rental units listed in 1948 was 303,900 and the estimated number of rental units as of this year based on the same percentage as above would place the present number of rental units at or about 500,000.

The reported receipts in 1939 showed $37 million and in 1948 figures showed $196 million, thereby a gain of 432 percent for the period. These figures issued by the Bureau of Census and using the same percentage of gain would place the receipts of 1951 at or about $250 million. The seven States of Arizona, California, Colorado, Florida, Oregon, Texas, and Washington, have the largest concentration of motor courts according to the 1948 census. These seven States

accounted for 40 percent of the total volume of business of motor courts yet there are motor courts in every section of the country. These figures prove that, while the bulk of the tourist court business is concentrated in seven States, every section of the country has shown remarkable gains in the past 10 years. There is no section where competition among motor courts can be ignored and unfair rates. charged.

Should it be necessary in any area designated as defense area to improve controls of any type upon the motor-court industry, consideration should be taken as to whether the individual section operates on an annual or seasonable basis. On or after the effective date when rent controls should become active and the administrator imposes rent controls upon motor courts in the given area, the ceiling should be set if it be seasonal on either the highest price prevailing during the previous year or the highest price prevailing in either season of the previous year.

Areas wherein the rate structure is based on an entire year of operation, the rate ceiling should be based on the highest rate prevailing at any one time during that year. Consideration must at all times be given to the increase of cost of operation and maintenance for only in this manner can the traveling public be assured should an emergency arise that the establishments may be maintained properly for their health, comfort, and convenience. With unfair ceiling rates imposed, proper operation cannot be maintained.

The CHAIRMAN. Motor courts are not under control now, are they? Mr. RAMONEDA. No.

The CHAIRMAN. When were they under control?

Mr. RAMONEDA. They were decontrolled in 1947.

The CHAIRMAN. How do the rates of motor hotels compare with rates in transient hotels?

Mr. RAMONEDA. We can only give you a figure set up on the basis of a 60 to 70 percent occupancy, which stipulates that the proper price should be $5.58 per unit.

That is based on a motor court that has 60 units. However, according to our recent figures, we stipulate how much per person we charge, two or three, so we can print that in our book-so this is not prepared for this meeting-the price is below the average that is recommended as a sound basis for operation.

The reason for that is that a good majority of the motor courts being operated by the owner, can be operated for less. So we can say that our prices, instead of going up, are coming down.

We have reached that point already in most parts of the country, where the old "No vacancy" sign has brought about the investment of private capital until now, it won't be long before we will be asking for a fair-trade price instead of an OPA.

It has gotten that way already. In many sections of the country it has gotten to that point. You put out a "$4 a night," and I drop down to $3, and so on. We have that situation in New Orleans.

A few years ago it was $5. Jack filled at $5 so Harry cut his price to $4. Then Harry was full at $4 and Jack cut his to $3. That is the way it has been going. It just takes 30 to 60 days to set up a complete motor court.

The CHAIRMAN. What are the qualifications for membership in your organization?

83473-51-pt. 3-26

Mr. RAMONEDA. In our national association?

The CHAIRMAN. Yes, sir.

Mr. RAMONEDA. Our qualification for membership in our national association is, a man must be a motor-court operator, and must not run a playhouse. His place must be sanitary. We don't say he has to have a five or ten or fifty thousand dollar unit.

In other words, in our national association we represent everybody who has a motor court which is operating decently and is sanitary. The CHAIRMAN. Do you have any control over the rates they charge? Mr. RAMONEDA. No; we do not have, other than, if you should raise your rates unreasonably, through our State associations we can boycott you by not sending anybody to your place.

Mr. BROWN. Your business is mostly transient business, is it not? Mr. RAMONEDA. Ninety percent of our business is, Mr. Brown. The CHAIRMAN. Do you have any permanent tenants in motor hotels?

Mr. RAMONEDA. Very few. Along the highways, where the traffic is moving across the Nation, from coast to coast, the majority are strictly transient trade.

Mr. NICHOLSON. You charge about as much for a motel room as a hotel does, don't you?

Mr. RAMONEDA. We don't charge as much, sir, in most cases. Mr. NICHOLSON. You charge $7 or $8 in New Jersey for a little place that you can barely squeeze into, with no accommodations. Hotels don't charge any more than that.

Mr. RAMONEDA. Well, let's get back to this, then, sir. Remember that the motel industry started in the West. It is just beginning to come into the East. The boys have gone West and seen the motels, and they have come to the East.

Just give them a little while. When the other fellow sees he is getting $7, it won't be long before it will be down to $4. It is just a question of a short time.

Mr. NICHOLSON. Competition?

Mr. RAMONEDA. Competition. We had it in California. We had it in Arizona. We had it in Texas. We represent 26 States of the Union in our association, and we have seen it crawl across the country. A certain location, where the rates were high-maybe a boy from Texas would come through there and say, "I can't find a place to sleep. What am I going to do?" He has got a quarter of a million or a half a million dollars, and he goes in there and throws up a motor court. Mr. NICHOLSON. That is not really so, because when these cabins were established, you had to pay $1 a night or $2 a night 15 to 20 years ago. It sounds as though with competition it is gradually getting

worse.

I suppose that is because if you stop in a hotel, they say, "Have you got a reservation," and you haven't, and they say, "sorry." Everybody knows you can get a room there. I was in Trenton Saturday night, and I couldn't get in.

But I walked out and went to a motel.

At the

Mr. RAMONEDA. Let's come back to your dollar rate now. time you had a dollar rate, they were truly cabins. Today these motels are not the same at all. Your average bathroom today, with your tile and modern fixtures, air-conditioned the year-round, furniture of modern type, drapes, everything, porter service, maid service,

open night and day, telephone service, all on a part with the hotel, and in some instances it is better, plus the convenience of having your car in front of your door.

At that time a maid would work for you for $7 or $8 a week. Today you are required to pay her $30 or $35 a week. You bought a dozen sheets at that time for around $8 a dozen. Today you are paying around $25 and $30 a dozen.

Your cost of operation has gone up.

If you put in a carpenter at that time, he charged you $2.50 a day, perhaps. Today he gets $2.25 an hour. It has all gone up. You know that as I do. I didn't bring that out because I didn't think it was necessary. I thought that was generally understood. We go on the basis of the Horwath & Horwath figures.

Mr. NICHOLSON. Well, it is understood by everybody except Mr. Woods, I guess. He doesn't recognize any increases.

Mr. RAMONEDA. That is why we came to you gentlemen. We feel you are reasonable. We know you know our headaches. We are not trying to tell you what to do with our case. We merely place it before you, knowing that you are reasonable. You are just like ourselves. The CHAIRMAN. You have a right to come here and present your case, and we are glad to have your views. Thank you very much. Mr. RAMONEDA. Thank you, sir.

The CHAIRMAN. Mr. Clerk, call the next witness.

Mr. HALLAHAN. Patrick J. O'Donovan, representing the California State Apartment Conference.

The CHAIRMAN. Mr. O'Donovan, identify yourself, and proceed.

STATEMENT OF PATRICK J. O'DONOVAN, ASSISTANT SECRETARY TREASURER, CALIFORNIA STATE APARTMENT CONFERENCE

Mr. O'DONOVAN. My name is Patrick J. O'Donovan. I am assistant secretary-treasurer of the California State Apartment Conference and secretary manager of the Apartment Association of Los Angeles County, Inc. I appreciate the courtesy you have extended in permitting our group to be heard by your committee. We oppose the adoption of H. R. 3871, the Defense Production Act. Particularly do we oppose title IV-A of the act. We maintain that there is no need for Federal rent control. It should have been abolished at the time all other controls were allowed to lapse-shortly after World War II.

Federal rent control drove many thousands of rental units out of the rental market. It caused tremendous hardships not only on the property owners of this Nation, but on the tenants as well. Recognizing this fact, the Congress, in 1949, adopted legislation which permitted local communities and States to rid themselves of Federal rent control. Many States, and hundreds of communities took advantage of the local-option provision and decontrolled rents. In the State of California, nearly every large community, with the exception of Oakland and San Francisco, decontrolled. Such cities as San Diego, Long Beach, Pasadena, Glendale, Burbank, Santa Monica, Bakersfield, Fresno, Sacramento, Ventura, and Santa Barbara all took this action. Not one of these cities has suffered because of rent decontrol.

Some of the cities whose names I have just read, have military installations within their corporate boundaries. Long Beach and San Diego are two cities. Other communities have large numbers of