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This period in most cases extends beyond the years of greater family need-the years when children are in the home.
The second group is made up of families who have been unable to obtain the credit needed to construct or make changes in existing service buildings which must be done if they are to keep pace with changing agricultural patterns. For example, for a family to shift successfully from a one-crop system of farming to a diversified program in which dairy cattle, beef cattle, swine, or poultry are included, or a combination of such enterprises, requires adjustments in housing facilities.
The third group are families living in rural areas but who because of inadequate land resources or other reasons are not engaged in farming on a full-time basis. Among the majority of these families, farming operations of a subsistence nature are carried on to supplement whatever income is earned from off-farm sources. Families of this type would be eligible for housing credit under title V of the Housing Act if the agricultural commodities produced for home use or sale have an annual gross value of at least $400 based on 1944 commodity prices.
Before families may receive farm-housing loans under this act, they must be farm owners, be unable to get a loan from conventional sources and lack the necessary capital to make the needed improvements. Although tenants and farm laborers are not eligible, owners may borrow to repair or build houses or other farm buildings for the use of tenants and farm laborers.
The original act authorized appropriations of $275 million to be made available for credit to rural families. Only about one-third of this amount was actually made available. The building material shortage held up the programs for 2 years. The Farmers Union strongly urges that the balance of amount authorized under the original act be made available.
The farm-housing loan program has been embraced by rural families throughout the Nation. Inquiries and requests for loans began coming in weeks before funds were available at the inception of the program in 1949. More than 21,700 written applications were made in local offices of the Farmers Home Administration between the date of the first loan, November 17, 1949, and June 30, 1950. Less than 4,000 loans were made during this period. This interest on the part of rural families has not subsided. The scope of the program has been limited only by the funds available. During the 1953 fiscal year the demand for farm housing loans was so heavy that funds were exhausted in most States in the fall and early winter. Lending activity was suspended in February 1953 because applications from eligible families were far in excess of the funds available.
Families numbering 19,082 have benefited from the $94,356,000 of farm-hous ing funds that have been made available. With these funds they built or repaired over 16,000 farm homes, almost 14,000 farm-service buildings and 7,200 water systems.
The largest number of new homes have been constructed in the Southern States where the need is greatest. The average cash cost of the new homes was only $6,377 a relatively low figure because most families used materials produced locally and contributed to the building of the house with their own labor. The practicality of the program is illustrated in the many cases in which salvaged material and timber, sand, gravel, and stone came from the farm. The value of labor and material furnished by participating families averaged $650.
Among the improvements made were additional rooms, new roofs, porches, steps, and repainting and installation of modern conveniences. Improvements in the form of modern conveniences included running water in 1,235 homes, electricity in 1,043, both fixtures in 1,171, hot water heaters in 699, and central heating in 402. The average cost of repairs and improvements was only $2,711 including $389 in labor and materials contributed by the families.
Repayments on farm-housing loans are scheduled by the Farmers Home Administration according to the amount advanced and the family's ability to pay. largest loans, those made for new construction, have been set up for period of 20, 25, or 33 years, and the smaller loans, those made for repairs and improvements, have been set up for 5, 10, or 15 years. As of January 31, 1953, 95 percent of the borrowers had paid all that was due, and 28 percent had paid an average of $215 in advance of scheduled payments. Although none of the loans have matured, 877 have been repaid in full. About 150 of these loans were repaid when borrowers were able to obtain refinancing from banks or other conventional sources.
The repayment record of these families is of particular significance when consideration is given to the fact that they did not have sufficient resources to
meet the credit requirements of conventional lenders for a construction or improvement loan.
As can be readily seen, these families need only adequate credit on reasonable terms to demonstrate that they are good credit risks.
We have accomplished marvels of production during the past years beginning with World War II. To bring about the orderly transition to a peacetime economy, we must maintain and increase this production. One of the ways to maintain and increase production is to make broad plans in the housing field. Where during the 10 years before the war an average of less than 275,000 nonfarm houses were built each year, we should now set a goal of over 1,500,000 houses a year, including farm and nonfarm units. Instead of investing about $1 billion a year in the building of housing, we must invest $7 or $8 billion a year. But such a program cannot be developed through timidity such as that displayed by those who fail to recognize the housing needs of our rural people. On the other hand, the type of rural housing program I visualize will be developed through new, bold measures.
The kind of growth we need cannot all take place on credit supplied by private sources. Public funds are needed to raise the housing standards on the farm. Long-term loans at low interest rates, such as those provided for in title V of the Housing Act of 1949, are needed to stimulate the construction of housing for farmers and other low-income groups-who do not need subsidy, but who cannot obtain credit from private lenders. We cannot have a well-rounded housing program unless the credit needs of farm families are adequately met.
The kind of public and farm housing program I am referring to creates a market for the products of private industry. I believe also that a comprehensive program of public housing will stimulate housing demands. These demands will in turn open a bigger market for private home builders.
The effect of an adequate rural housing program in providing employment must not be overlooked. It has been estimated that 505 man-hours of skilled labor and 500 man-hours of unskilled labor, a total of 1,005 man-hours, is represented in labor at the site for the complete construction of a house. While no estimate is available for the hours of labor in off-site construction or related activities in the building of a rural house, the figures available as a result of the USHA urban program are significant. These show that the urban housing program requires 360 man-hours of direct labor for every $1,000 of development cost and 530 manhours of indirect off-site labor for every $1,000 of development cost.
The economic and social problems associated with inadequate housing on 20 percent of our Nation's farms are too great to be carelessly pushed aside.
The idea that privation and hardship necessarily are a part of farm life or that moral fibers are strengthened by such living standards was accepted during the settling of the country, but today farm families want and are entitled to the same conveniences that city people enjoy.
Farm families of today no longer accept the idea that because they chose farming as a way of life they need to live in homes that are inconvenient, inadequate, and substandard. Government loan guaranties and insurance have encouraged private capital to finance improved housing for our city and urban families on a substantial scale. When private credit was not available, direct Government loans have been provided. What farm families want and need is a like opportunity to finance farm buildings and improvements.
There is no question as to the effectiveness of the farm housing program as it has been administered by the Farmers' Home Administration. There is no question that this program has been a vitally essential part of our national housing program which has had as its objective the progressive improvement of our housing standards with the eventual realization of a decent home for every American family.
The National Farmers Union urges that S. 2949 and H. R. 7902, recently introduced by Senator John Sparkman and Congressman Robert E. Jones. Jr., Eighth District, Alabama, to extend title V of the Housing Act of 1949, be given favorable consideration in the hearings now being held.
STATEMENT OF FERN M. COLBORN, SECRETARY, SOCIAL EDUCATION AND ACTION, NATIONAL FEDERATION OF SETTLEMENTS AND NEIGHBORHOOD CENTERS, RE H. R. 7839
The National Federation of Settlements and Neighborhood Centers is an organization made up of nearly 300 local units in some 86 cities across the United
States. There is never a business meeting of our national organization, but that a resolution favoring an adequate housing program is adopted. We consider an adequate housing program to be one that provides for families of all income levels in the field of housing.
We would urge you to strengthen the bill now being considered by your committee in the following ways:
We doubt if the private housing program as envisioned in titles I and II amendments of the new bill will provide the amount of housing estimated. We believe that a larger program should be envisioned so that we may be assured of sufficient housing for an increasing population, and as a means of undergirding the economic needs of our country at this time.
We are pleased to see the section on slum clearance, urban redevelopment and renewal program in the bill. It is our opinion that the sponsors of the bill are overoptimistic as to what can be accomplished by this program. The lack of an adequate housing program has put a wear and tear upon the present housing supply so that houses are worn out considerably ahead of their usual life span. This we are aware of in every city wherein we work because we know how houses are being overused, building codes disregarded, and a doubling up far beyond any time in the history of our Nation, so that once this program gets underway we think that the number of buildings that can be rehabilitated and made livable, can only be done at such great expense that they will of necessity turn out to be housing in a considerably higher cost category than the bill envisions.
A further concern that we have regarding this program is that the slum clearance program will displace many more low-income families than the rest of your program provides rehousing for. We have already had many sad experiences with title I of the Housing Act of 1949, where communities have disregarded their responsibility to find housing for those displaced. We should not create other hardships with this legislation unless more protection is put into this bill, this is exactly what will happen.
Our great disappointment is that you have failed to provide for a proper public-housing program in the bill, but that this is left purely to the Appropriations Committee. In our opinion you certainly should ask for more publichousing units to be built each year than was envisioned in the Housing Act of 1949. Our population is now larger and the need is greater due to the fact that the Housing Act of 1949 was not carried out.
The substitute experimental program in place of public housing which offers home ownership to low-income families for a long mortgage payment with a minimum downpayment is in our opinion shortchanging the low-income and housing consumer. What house built for $7,000 today will hold up for 40 years? In an economy where one-half of all families have incomes of $3,420 or less and 25 percent of this number, incomes less than $2,000, is it reasonable to assume that these families with the present high cost of living will be able to maintain mortgage payments of $62 per month? Moreover, for how many of these families is home ownership desirable? We provide in our economy an abundance of housing, both for rental and sale, for the consumer who can pay $80 per month and up so that free competition can operate. We do not provide even sufficient housing for the low income consumer let alone providing for a competitive market. In our opinion public housing must provide for a much larger proportion of the population than we have thus far. These are problems that must be met. They should be met in the Housing Act of 1954.
STATEMENT OF JOSEPH H. EHLERS, FIELD REPRESENTATIVE, AMERICAN SOCIETY OF CIVIL ENGINEERS
My name is Joseph H. Ehlers. I am field representative of the American Society of Civil Engineers and am making this statement on behalf of that society.
The American Society of Civil Engineers, with a membership of about 37,000, is the oldest national engineering society in the United States with branches throughout the country. It is the technical society most actively concerned with the designing of engineering public works and shares an interest in public buildings with the American Institute of Architects.
Our interest in this bill lies particularly in section 702 entitled "Reserve of Planned Public Works." I will limit my observations to that section. It is grouped with section 701 "Urban Planning" in title VII of the bill. The con
nection between the two sections is remote. My remarks deal principally with the matter of the authorization to the Housing and Home Finance Administrator, in addition to supporting the basic concept of advance planning.
Despite the fact that we hold the present Administrator of the Agency in high regard and greatly admire the forceful manner in which he is attacking the housing problem, we do not believe that the Federal direction of a reserve of planned public works, as a matter of principle, is a proper function of the Housing and Home Finance Agency. This is particularly true of such a program designed to stimulate construction activity whenever the economic situation makes this desirable. We do favor the concept of advance planning both of housing as well as of all types of public works. We concur in the statements made by Administrator Cole in his testimony on this section of the bill.
Public works activities involving the design of water supply and sewerage plants, roads, bridges, and other engineering works should never be considered as mere adjuncts to housing activities. They have little relationship to and require a different type of personnel from slum clearance activities. They should not be placed in charge of agencies dealing with public housing and slum clearance activities of the Federal Government. They affect not only metropolitan development but also rural and State development. The planning and Federal approval of public works of this nature should be under the direction of Federal agencies professionally experienced and qualified in these special fields. In the December 1953 report of the President's Advisory Committee on Government Housing Policies and Programs, the advance planning of nonFederal public works is referred to only as an activity in liquidation. The new program of section 702 had not then been considered. The same principle would seem to apply to it as to the agency's school building program about which the President's Committee had this to say, "It is the conclusion of the Committee that this is not a proper activity of a housing agency. It should be assigned to the Office of Education, Department of Health, Education, and Welfare." A similar conclusion was reached about the college housing program.
The advance planning and other programs of the Bureau of Community Facilities were assigned to the Housing Agency for liquidation, several years ago, following the abolition of the Federal Works Agency. At that time several groups most familiar with the subject, including the American Institute of Architects and the National Society of Professional Engineers, expressed disapproval of the assignment of this planning and community facilities work to the Housing Agency even for the purpose of liquidation. Our organization did not comment at the time since the work was only to be liquidated. Now that its reactivation is proposed, we feel that we should express our views.
Assignment of such work as this to the Housing and Home Finance Agency seems to violate the principle laid down by the Commission on the Organization of the Executive Branch of the Government in 1949. That principle was to assign the engineering work to the agency dealing with the basic function, e. g., transportation, public health, education, etc. In accordance with this principle, the Bureau of Public Roads was transferred to the Department of Commerce. Responsibility for the planning of other projects has been assigned to the agencies dealing with the basic functions involved-housing to the Housing and Home Finance Agency, provision of office space to the Public Buildings Service, airports to the Civil Aeronautics Administration, and so forth. The major exception seems to be certain planning and building programs now handled in the Housing and Home Finance Agency which are of vital concern to the newly created Department of Health, Education, and Welfare.
Since about 80 percent of the work under the advance planning program now nearing completion relates to educational, sanitary, or health facilities, the Department of Health, Education, and Welfare is far more concerned with the type of work involved than is any other agency. Comprehencive planning in these fields is among the already recognized responsibilities of this Department. Able engineers are already on its rolls. Public Law 139, 82d Congress-assigned the functions in connection with community facilities planning relating to health, refuse disposal, sewage treatment, and water purification to the Public Health Service. Stream pollution abatement and hospital planning have also been assigned to it.
Thus, if the proposed advance planning were limited to health and educational facilities, it would constitute a comprehensive program for the types of work for which advance planning is most urgently needed. Of the 20 percent not
included in such a limited program, many facilities such as firehouses, police stations, etc., can be designed in a reasonably short time and should not be the subject of Federal advances for advance planning.
The proposed advance-planning program of section 702 is by no means an overall program, but would simply be one segment of a public-works reserve, principally the segment relating to health and educational facilities. Coordination between highway, airport, educational, and other construction used to stimulate activity in any recession would need to be provided, regardless of which agency handles the program.
If a public-works program should be undertaken to stimulate construction, some billions of dollars of projects would be required. A glance at the work undertaken from 1934 to 1938 will indicate how remote such a program is from housing. The Public Works Administration during this period was concerned with such projects as New York's Triborough Bridge and Lincoln Tunnel, costing nearly $100 million; sewage-disposal plants for Cleveland, Chicago, New York, and the Twin Cities costing over $100 million, as well as others in dozens of cities; great bridges spanning the Ohio, the Missouri, and other great waterways throughout the country; educational buildings, State buildings, courthouses, dams, and power projects; even such enterprises as the New York-Washington electrification of the Pennsylvania Railroad. If the need again arises, the establishment of some similar supervisory agency would appear to be a logical development.
Advance planning of public works was devised to lessen the delays in commencing construction work needed for economic stimulation. The greatest part of the delay often occurs in making preliminary economic analyses, foundation studies, and acquiring of land rather than in making final plans. Fully completed designs may become obsolete before construction is started because of changed requirements and improvements in technology. This is especially true at a time of high prospective construction activity such as the present, because an emergency public-works program is principally helpful for stimulating a depressed construction industry rather than for remedying unemployment situations that may occur in other industries. A considerable part of the proposed advance planning should therefore consist of careful preliminary planning so developed that final plans can be completed in a few additional months. Incidentally, I have urged this in connection with previous advance-planning programs. Mr. Cole agrees with this view. An agency that specializes in a particular field is more competent to deal with such basic preliminary work than one concerned largely with having a reserve of blueprints. Thus, for example, the Public Health Service is intimately concerned with the basic planning of water-treatment and sewage facilities and hospitals.
The American Society of Civil Engineers favors sound advance planning for the purpose stated in section 702. This work of the Division of Community Facilities should be kept separate from that of divisions handling slum-clearance planning. The President's Committee on Government Housing Policies, under the chairmanship of Mr. Cole, recently recommended the transfer of all the functions of this division to other divisions or to other agencies. The major projects in the architectural field (hospitals, schools, etc.), either are presently handled in or are recommended for transfer to the Department of Health, Education, and Welfare. The same policy should apply even more forcefully to engineering projects. It would be logical to assign the program proposed in section 702 to the Department of Health, Education, and Welfare as a program of advance planning for sanitary, health, and educational facilities. Inasmuch as the President's Advisory Committee on Housing has recommended transfer of the personnel engaged on the presently most active work of this Division to the Office of Education, it would be logical to transfer the Division of Community Facilities to the Department of Health, Education, and Welfare to be maintained as a unit for carrying on the proposed advance planning work in addition to these continuing programs, in close cooperation with the Public Health Service and the Office of Education. The authorization in section 702, should, we believe, be to the Secretary of Health, Education, and Welfare; or to the President to assign to agencies along the lines of their major responsibilities.