Mr. OAKMAN. What is the monthly carrying charge of that $9,500 home?

Mr. LEVITT. Fifty-nine dollars a month.

Mr. OAKMAN. That includes taxes?

Mr. LEVITT. That includes everything.

Mr. OAKMAN. It was a lovely clear Sunday when we were there, and we just noticed hundreds of those young veterans out there doing all sorts of work, with their wives, too.

Mr. LEVITT. There is 36,000 people that live there now.

Mr. OAKMAN. They were painting and putting in everything around the place.

Mr. LEVITT. They were.

Mr. OAKMAN. They don't hire that work done. They do it themselves.

Mr. LEVITT. That is the interesting part I want to stress.
Mr. OAKMAN. They won't do it in a rented house.

Mr. LEVITT. That is exactly the point. When we first started Levittown, N. Y., that was shortly after the war, and there was the clamor for housing. We built under 603. We built 6,000 rental units which we sold part of them, part of them this chap bought and he is selling to homeowners. Right after the 6,000 we built 12,000 more for sale, and the difference between the maintenance of the rental house and the house that was homeowner occupied is just like chalk and cheese. One was maintained beautifully. The lawns were beautiful. What painting had to be done was done. The tenant paid no attention. He said it wasn't his, why should he. The minute he becomes a homeowner the whole house is different. Its real-estate value goes up because it looks better, and is in a better neighborhood.

Mr. OAKMAN. The other thing is, in referring or recommending a 35-year mortgage, open-end, would you discriminate between the age of your buyers?

Mr. LEVITT. That unfortunately you must do. You must do that because among other things it is practically an inflexible FHA rule. The mortgage, according to FHA, and again it is somewhat unrealistic, must mature at age 70, so that a 35-year mortgage means a 35-year-old individual, if he is 40 it has to be somewhat less, 5 years less. We do that all the time now even with the current 25-year mortgage. If a man comes to us to buy a house, he is 50 years old, he gets a 20-year mortgage instead of 25. In view of FHA's own experience on the maturity of mortgages when they actually get paid up or refinanced, it doesn't make sense. On the one hand they have a set of figures, and, on the other, they become theoretical.

Mr. OAKMAN. It is your firm conviction these people want to get these homes paid for as rapidly as possible?

Mr. LEVITT. I don't think there is a question about it. We get the request from 99 out of 100, because this is 25 or 30 years can't we pay it off earlier if we can? Every single purchaser asks that question. Mr. GEORGE. Mr. Chairman.

The CHAIRMAN. Mr. George.

Mr. GEORGE. Is it your contention that the home-buying field is practically unlimited if we lower the downpayment and extend the term of interest or the time of the mortgage?

Mr. LEVITT. From a practical standpoint, Mr. George, yes.
Mr. GEORGE. Up to 2 million homes every year?

Mr. LEVITT. I would guess so. There are so many collateral things that come in here. If, for instance, you could get the pension trusts of the United States to break down and flood the market with mortgage money, which they should do and which we all try to get them to do, and you had an abundance of mortgage money, where the mortgage money was cheap, where we didn't have to pay premiums for it, either, where you could give intrinsic value in a house rather than so many things that the customer doesn't see at all-he doesn't see that $300 that we have to pay on a $10,000 mortgage. That $300 ought to be translated into something tangible in the house and some day it will. If you could do that, plus the fact of competition; when you build a million and a half or two million houses everybody is competing for that market. The result is you get more and more value. Then you have a market, just as the automobile people this year are breaking their corporate heads to bring out looks and styling, and everything else, to keep this market.

Mr. GEORGE. Do you think FNMA's operation should be curtailed? Mr. LEVITT. I was hoping you wouldn't ask anything about FNMA because I have my own preconceived notions on that.

Mr. GEORGE. I would be interested in seeing.

Mr. LEVITT. I would take leaf out of the Canadian system. That is to set up a fund and if we can't get money the Government lends, but you will get the mortgage money. If the Government were to announce tomorrow morning we have $5 billion we are going to lend on mortgages if you can't get it individually we would have every banker and his brother on our neck begging us to take away money. Mr. GEORGE. I think you are right.

Mr. LEVITT. That is the simple approach. It is a little too simple. Canada does it, incidentally.

Mr. MUMMA. Do they guarantee private loans like we do?

Mr. LEVITT. Yes. The Canadian economy is in pretty good condition. They have an excellent housing commission there. It is the counterpart of our FHA.

The CHAIRMAN. Thank you, Mr. Levitt, for your contribution. Mr. LEVITT. Thank you, gentlemen.

The CHAIRMAN. The committee will stand in recess until 2:30, subject to my being able to get permission for the committee to sit this afternoon.

(Whereupon, at 12:35 p. m., a recess was taken in the committee hearing.)

AFTERNOON SESSION
H. R. 7839

The committee met at 2:30 p. m., the Honorable Jesse P. Wolcott (chairman) presiding.

Present: Chairman Wolcott, Messrs. Talle, Kilburn, McDonough, Betts, Mumma, McVey, Oakman, Hiestand, Stringfellow, Spence, Brown, O'Hara, and McCarthy.

The CHAIRMAN. The committee will come to order.

We will proceed with consideration of H. R. 7839.

I am very glad to have back with us Monsignor O'Grady who has been with us so often. We consider you an ex officio member of this committee, Monsignor O'Grady. We would like to have you proceed. I am glad to have you back with us.

STATEMENT OF RT. REV. MSGR. JOHN O'GRADY, SECRETARY, NATIONAL CONFERENCE OF CATHOLIC CHARITIES

Monsignor O'GRADY. I am glad to be back, Mr. Chairman. I appreciate your kindness, your interest, and I sort of feel at home in this discussion, I have been in it so many years-more than I would like to say.

I am, of course, very much interested in this housing movement. As I pointed out I think my friends in the home business hardly believe me when I tell them I am a conservative. I am for the free economy, you see, and sometimes they insinuate that that isn't so, and that I am quite radical, but I have to keep on denying that, and for that reason I think I have been impressed by the many things in these newer developments, and these new programs around here, and I don't want to be just merely a critic of them.

I like to look at myself more as an analyst than just a mere critic. I am hoping that these movements will work, and that these implements--new implements-that are handed to the private enterprise people may attain the purposes for which they are designed. That is my hope.

I have been, since I have returned to the country a few weeks ago, trying to get around in a number of cities to see what the picture is, and my picture is not yet as complete as I want to try to make it. I am interested in getting around and studying the housing conditions firsthand in these different cities. I spent all of yesterday and part of Saturday in the old downtown area of Cincinnati, that I have known for so many years, and I spent some time last week in going over the city of Detroit, that I have also known for many years, and I have just been trying to get up to date.

Now, when we were discussing this matter first, beginning in 1932, of course, at that time we were interested in work and housing, and I shall ever remember when we got this provision for loans and grants to local communities on housing, and Mr. Sincovitch and I were rather surprised at the ease with which that can be made a part of the Recovery Act. I think it was clear, but nobody had ever given much attention to it, I don't think General Johnson had when he agreed to put it into the bill, but at that time we thought about housing as a work program, and because it was one of the measures of a dynamic economy-at least those were the expressions we used in those days.

I have always, of course, liked to regard housing as a part of an allover dynamic economy, and I, of course, was surprised when I got in the outskirts of Cincinnati yesterday. I find a considerable vacancy in this high-income, high-priced housing, and, of course, I find that the supply of houses in the downtown area is gradually contracting and population of the downtown area declined, and this is characteristic of many other American cities, I am quite sure-contracted until about 1950, and it has been growing ever since, and the housing supply is being reduced downtown all the time.

Of course, I realize that there is some movement of Negro families from the downtown areas, some of those in the upper middle income brackets into the outlying areas. I saw several evidences of that yesterday. I visited several of those families and talked to them about the prices they paid for their homes. They have kept up pretty well.

I hope that is so in the future, that they can maintain the houses and prevent the spread of blight to those areas. That is the challenge of Cincinnati just as is the challenge of Detroit, to prevent the spread of blight to new areas. But I am afraid Detroit has not succeeded

in doing that.

We have come to regard housing for families as a part of an allover plan for the use of city land. We need land, of course, for other purposes-for educational purposes, for recreation, for health facilities, business, communication.

We have a great deal of competition at the present time between the different interests for the use of city land and each interest has its own techniques, its own power block, and I don't know what the cure for that is. Sometimes I think I do, and we find the same division among these specialists up at the top here in Washington, too. You would never think, for instance, that PHA and the slum-clearance group belonged to the same agency, and, above all, FHA, and, of course, the greatest problem of all, as I see it today in this effort that this bill represents toward the rebuilding of our cities, is in the highway departments. They are proceeding as if there was no other interest concerned than the use of city land, as if housing didn't mean anything, and they are tearing down a man's house.

I saw them last week as they drove that highway through Detroit. It is all right while they were driving it through the places that I know so well, people who can afford to buy a $20,000 house in the hinterland, but now they are tearing down a great number of houses for the lower middle class. They may not be the best houses, but they are just as good-they are better than many of the houses that are being repaired in Detroit at the present time, in my judgment, as far as I have been able to see them last week.

They tell me they are going to drive a new highway through the city of Cincinnati, through the whole downtown area. It will wreck thousands of housing units that they can ill afford. It will further decrease the housing supply.

That is being carried out. Chicago, of course, goes through all the formalities. They are supposed to work with housing. They work with the Public Housing Authority on a relocation program. There is very little relocation as far as I can see on the boulevard. I think they are being crowded into other areas, and you are blighting more houses.

I feel that is the greatest danger in any program of redevelopment, because there isn't any central plan for the use of land. Each one is competing. For instance, I saw yesterday again in Cincinnati three areas that have been cleaned out for a new school. I realize schools are important, and then in another place it was being cleared out for a new firehouse. Of course, many houses are demolished.

Is that going to be done by each agency independent, as if no other interest was concerned? These are the facts now. You can deny it, you can say they are not true, just as when I say that they are not relocating. I have said many times in Detroit they are not relocating anybody. They say you exaggerate. All right. I could take vou to cities and streets that have been blighted in the past 2 years. How about that? Well, nobody seems to want to take it up somehow or another, and at one time we did have a little discussion out there with

one big builder. We agreed to go on a tour, but somehow or other it never matured. Our tour never matured. I wanted to get around and see what had happened in these areas.

I am not proposing any particular brand of doctrine. I am trying to report the facts. I am trying to report my observation in these different areas, and I am trying to take a new look at this matter. I think that is what this bill is designed to do.

I asked, for instance, last week in a certain area in Detroit in which now they are trying very hard-trying a sample in the enforcement of city codes. I said to one of the officials, who was along with meone of the city officials-I said, "How long is this enforcement going to keep up?" It is a nice thing to talk about, and sometimes we get on a little bit of a crusade, but then to keep it up consistently, get the support of the police department, for instance-you can't have any enforcement if the police aren't with you, enthusiastically.

I remember the mayor of Chicago told about a certain area in which I was interested in the South Side. He said, "Of course, you are going to have the cooperation of the police department." We could never get the captain to our meetings. Well, finally, we got the neighbors stirred up and developed a neighborhood group there, and we noticed the two aldermen and the captain came to our meeting, and were very enthusiastic about the program once we involved the neighborhood, and, of course, we didn't have an easy time in developing a neighborhood organization. That is an easy thing to talk about but a difficult thing to accomplish.

There is a very strange situation today in regard to this whole housing field, and that is the difficulty of getting at the facts locally, as to what is happening. I called this matter to the attention of the President's Committee in my two appearances before them, and I said, "If you could only get it for 10 cities, then we wouldn't have all this speculation about it." But we don't have, for instance, the facts in regard to relocation. The officials in Detroit say they have a program of relocation; others say no, you don't have any program of relocation. You have a program on paper. I have said that of the city of Chicago. You have a program on paper, but you are really not relocating people. You are making new slums.

Of course, we wouldn't have to engage in speculation if we had the facts, and I think the facts can be made available, but I know now that they are not available at any central point, and I don't know what the reason for that is, and I think some of the houseowners are as much at fault as anybody else. They feel they have an interest in this matter and are going through the process of organizing a relocation program. It is not a real program, I am afraid. They feel they have to defend that program. I think that is probably one of the reasons why it is so difficult to get any facts about the realities at the present time in American local communities. There is this competition for land, and you have got your schools and your health centers, your recreation groups, then your new terminal groups, the groups that are interested in new truck terminals, and you have all this struggle going on. Each one wants a piece of this land.

If there were any definite plans of approach, then I think we could develop a better approach, more constructive approach, toward this