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American cities as targets for enemy attack. We believe that sections 803 and 701 of the bill before you, taken in conjunction with its other provisions, will enable the Administrator of the Housing and Home Finance Agency to foster progressive reduction in the target value of these cities and thus lessen the likelihood that they will be the objects of enemy action.

It is well known that a large portion of this country's industrial capacity, both in terms of production facilities and trained labor forces, is now concentrated in a limited number of our major cities. The 1950 census revealed that two-fifths of the Nation's entire population and over half of all persons employed in manufacturing lived in the 40 largest metropolitan areas. Despite the current trend to the suburbs, most of the homes of those people and the facilities used in production lie within the lethal range of attack which a ruthless enemy might launch against our cities.

Such concentration in limited areas is a continuing source of danger to this country. Fortunately, it can be materially lessened over the years if the future growth of American cities is guided into proper channels.

As is well known to this committee, the United States is now undergoing a period of great expansion. The construction rate for urban dwellings is running in excess of a million units a year and the building of homes and apartments is being matched by the construction of stores, factories, schools, churches, streets, and all the other elements that make up city structure; the equivalent each year of a complete new metropolitan community the size of Philadelphia.

The more this new construction is concentrated in the already densely populated sections of our larger cities, the more profitable they become as enemy targets and the more vulnerable to crippling damage becomes the Nation that depends on them for a substantial part of its industrial production. Conversely, the more this new construction can be used to decrease densities in central cities and build up outer suburbs and smaller cities outside of the potential damage areas, the less attractive become the central targets. The more the American industrial and population target is diluted, the more difficult it is to attack decisively and hence the less likely it is to be attacked at all.

For the past several years, the Federal Government has urged industrialists to locate new defense-supporting plants a safe distance from potential target zones in major cities and this movement has had wide support. But industry cannot operate without labor and there is need for definite encouragement to builders to erect housing in outlying suburbs and communities that serve the dispersed factories.

Action is also needed to hold the density of new in-town housing developments to the lowest practicable level and to improve standards of spacing and construction so as to minimize the threat of blast damage and conflagration. We believe that much can be accomplished in that direction within the framework of the proposed housing bill.

Section 803 of the bill states that all Federal agencies having powers. functions or duties with respect to housing shall exercise them, consistent with applicable provisions of law, so that they will "facilitate progress in the reduction of the vulnerability of congested urban areas to enemy attack." This enables the Administrator to utilize the various measures under his jurisdiction in a manner to promote national security.

The President's Advisory Committee on Government Housing Policies and Programs, on page 11 of its report, recommended that "A close relationship should be established between housing and defense officials and when defense criteria affecting urban vulnerability are established, studies should be made of all housing programs to insure conformance. Additional legislation should be proposed if necessary." The recommended studies are being undertaken by staff members of the agencies concerned. If these studies indicate that housing legislation should be modified or new legislation introduced to accomplish the desired purpose, appropriate recommendations will be made.

Section 701 of H. R. 7839 is of particular interest in this regard because it would tend to stimulate State and local action to plan for lowered urban vulnerability on a metropolitan basis. Workable and adequate plans for reducing the target value of major cities generally can be worked out most effectively in terms of the entire trade territory. When this is done, new industrial, commercial and residential growth in the outer portions of the territory can be developed in a way that will contribute to the city's economic support without increasing its target value.

Unfortunately, the outer areas in which new growth is most appropriate are often the ones least equipped by past experience to deal with urban problems

and there often is no agency with sufficiently broad jurisdiction to plan and guide the development of all parts of the trade territory as a single economic unit. The provisions of section 701, through the stimulus of Federal aid, should help to overcome that deficiency.

It is not our purpose at this time to suggest specific measures for the reduction of urban vulnerability that might be taken under this bill. They will be the responsibility of the departments and agencies exercising housing functions and, in many cases, are still to be worked out on the basis of the studies to which we referred earlier. It is our belief that H. R. 7839 and particularly sections 803 and 701 will provide opportunities for constructive action, which will promote security against attack and improve the Nation's peacetime supply of housing at the same time.

STATEMENT OF WILLIAM E. MURRAY IN BEHALF OF FLORIDA SUN DECK HOMES CO., LEISURE CITY, FLA.

In 1949 Florida Sun Deck Homes Co. of Miami began to get inquiries from people who desired to retire and come to Florida to live out the remainder of their days. Since this was nothing particularly new in the history of Florida, not much attention was paid to it. The requests, however, continued to come in increasing volume, and, in 1950, some investigation was made on the subject of retirement housing. To find out if there was a demand for this or not, we placed ads in the leading papers east of the Missouri River. We expected to get some replies. What we got was so great that no matter how the letter was addressed, we got it. Mail sack after mail sack of inquiries came in. The mail clerks did a remarkable job, for there were letters simply addressed "Florida Sun Deck Retired Homes" and nothing more, yet we received them. On the first ad that we placed in these papers we received over 50,000 inquiries. The amount is way over 200,000 now and still climbing. Let us say to you that we are very certain that if any of the congressional offices got 50,000 letters about one subject, you would try to do something about it. Since this demand is general and nationwide, it is felt that you are entitled to know what was done. This demand on the part of our neighbors throughout the United States was indeed a challenge. With what little resources we had for research, it developed that the concept of retirement had changed materially in the last number of years. We found that employers have set up an arbitrary retirement age of 65 where wage earners have to retire whether they want to or not. It appeared that some type of housing would be needed to take care of these particular classes of our citizens since they were no longer in a position to pay the rents which are in effect throughout the country. We felt, personally, that anything we could do to provide a retirement home for people, to which they could look forward with a ray of hope rather than dread, was a worthwhile contribution to America. In the consideration of this problem, there are certain human traits that must not be ignored.

We were able to determine that the vast majority of people who retire do not want to move from the locality in which they live. This is due to the fact that they wish to be near their family ties and among friends of many years standing. It does not mean, however, that what they want is the answer to what they can do. During the last 15 years people planning to retire have placed their money into those investments that 15 years ago seemed to be a source of a good income in the future. These investments have simply not worked out. For example, in the late thirties, savings and loan associations paid dividends of 4 percent and 5 percent. Now they are from 2% to 34 percent. This means that the anticipated income has been cut around 30 percent, but this is indeed not the worst side of the picture. While the income went down, the cost of living went up. Hence, due to the situation which many of these people now find themselves in, they are obliged to forego the luxury of what they want to do, and must follow some way out of their economic plight.

We also found that there were many people who wanted to get away from the cold weather in certain parts of the country and be able to enjoy a less severe climate.

Therefore, we went to work on the problem, and since no other subdivider or developer in the United States had ever tackled or attempted to do this sort of a job, there was no criteria to work from or to.

The FHA did not have any records with which to give a rating from the credit standpoint. Indeed, it was a shock to some lenders to have a mortgage offered to them, from a man and wife who were over 65, to run for 25 years. Now, on

snap judgment, all of us who have negotiated loans on houses would dismiss a loan application for 20 to 30 years from a person over 65 with the thought that the applicant was sure optimistic if he thought he would live that long. However, a careful study indicates that it is not so out of order as it would first appear to be, particularly in a project such as Leisure City. For every retired person who dies there is a constant increasing number of people who are retiring, and they can, and do, buy the equity in the house. We have had some deaths. The houses were resold to other people who had retired, and so the chain goes on and on.

As was said above, the FHA did not have any records with which to give a rating from the credit standpoint, and there was simply not available any credit experience for this type of buyer. Now, they do have some credit background, and it is good. No borrower under the FHA loans is delinquent. Most of them are paid several months in advance, and they seem to want their monthly payments in the hands of the lender on or before the 1st rather than on the 15th of the month. Neither did the FHA have the amortization tables worked out for the low loans that some of these people needed. These things have been overcome

now.

We were able to get several hundred acres which were selected for what we thought to be sound reasons. If we were to take care of people on a low monthly payment, we obviously had to get away from high-priced land; yet we had to be close enough to a community so that they could have access to churches and merchants dealing in the necessities of life. The land which we selected was 21⁄2 miles northeast of Homestead, Fla., and on U. S. 1.

We did not know what kind of housing facilities or what kind of housing units people who were going to retire would prefer. After considerable experimenting, offering various types of floor plans which ranged from a 2-room, 1-bath house with 1 bedroom and 1 living room that was also the kitchen and dining room, to a 7-room, 2-bath house with a swimming pool; we have found that the average couple does not want to lower their standard of living. What they want is comfort *** but they do want limited space. They do not want a lot of rooms to take care of. We found out that these people desire a very large living room; 1 bedroom which must be of good size; a kitchen-dining combination of not less than 80 square feet; a good tiled bathroom; and ample closet space. Indeed, the people buying these houses demand larger closet space than that which the FHA minimum property requirements specify. They also want a carport and plenty of room in the utility room. These people are very insistent that there be plenty of window space to afford sunlight and ventilation.

There seems to be some pretty sound reasoning on the part of these people in their desire for a one-bedroom house. It cannot be stated too strongly that the love and affection these people have for their children and other relatives is great; yet they do not want to issue a standing invitation for their relatives and friends to come down and use that extra bedroom in the winter. Rather than have two very small bedrooms, they want a large one, with the extra space in the living room. They want just 1 bedroom to take care of, not 2; and just 1 bedroom to furnish, not 2. Any demand for the second bedroom seems to be met by the use of modern sofas in the living room.

There are a great many people in Leisure City who can afford to own houses over $30,000, yet they want one bedroom. When company comes, they simply take them over to one of the very modern motels that have been built or enlarged, within a mile of their home. It works out fine for everyone. In fact, since we started this development, two large motels have been built, and every other one within a mile, enlarged.

Along with the creation of the type of house these people want, a certain lending pattern developed which seems to run very consistently throughout the entire development of over 500 houses. These people pay more cash on the downpayment than has been the custom for the last 8 years.

In section 1 of Leisure City, which consisted of 311 houses, the number who paid cash, or so much cash that all they needed was a 50-percent direct-reduction loan, was 21 percent. These direct-reduction loans were made by one of the Federal savings and loan associations. The interest range was from 5 to 6 percent. The term from 7 to 15 years. In section 2, the percentage is reaching 44 percent. Our experience tells us that these figures on cash sales and low conventional loans are the keystone of the proposed legislation we are suggesting. It is the answer to the repayment of construction funds.

In the consideration of the amount of loan, the fixed income is more important than any other factor. A 95-percent loan on a fixed income is far better than a 60-percent loan where the buyer can be laid off or be the victim of the other

hazards of employment. Therefore, while it is desirable, of course, to have a small downpayment to take care of those who do not have large amounts of cash for a downpayment, the percentage of the loan is not the important factor. The most important item to consider when these loans are being negotiated is "How much will it cost for housing per month?" In this area, it would appear that $40 is the correct amount; in other sections of the country it will have to be from $10 to $15 per month more. This should include:

Interest; amortization; FHA insurance fee

Service charge, if any; hazard insurance; taxes

Sewer charge; water

The consideration of this program must be on a national basis. for some of the lower housing expenses in Florida are:

1. SAVINGS IN COST OF FUEL

The reasons

There is a great saving in the cost of fuel to keep the house comfortable. Florida Sun Deck Homes Co. takes violent exception with those organizations and people who claim you do not need heat. In all our houses we put in a walltype vented gas heater so that if the occupants need heat, they can have it. It is very true that there are winters after winters in which no heat is ever required; but then again there are days, occasionally, when the temperature takes a drop and heat should be available.

Florida Sun Deck Homes took the position that they were trying to do something for people who have reached that age in life where their resistance is not so great, and that they should, therefore, remove, or at least cut down the chances for contracting severe colds by living in a house that for 2 or 3 days might be cold. In a winter where we have the most severe cold spell of record, the cost of heating one of these houses will run about $12. This, of course, is a great monly saving over those sections of the United States which require some kind of heat from October until the middle of April.

2. REAL-ESTATE TAXES

Another thing which is to the advantage of those people who come to Florida is the fact that the State constitution provides for homestead exemption to everyone who will apply for it up to $5,000 of the assessed valuation. Out of the 600 houses which we have built or are constructing in this development, those retired people who applied for homestead exemption in Leisure City paid no real-estate tax. Of course, it must also be stated that if the homeowner does not apply for homestead exemption, he then has to pay taxes; and these will run approximately $95 a year.

3. CLOTHING

In many sections of the country the climate demands several changes of wearing apparel. This can be little or of great deal, but in our end of the United States there is little call for heavy clothing.

4. HEALTH

Mr. Frank A. Vellanti, president, and Mr. Thomas F. Palmer, secretary, of the Florida Sun Deck Homes Co., took the position that the most favorable climate throughout the year should be selected for the location of a retired village. The reason for this was that they knew such a climate would substantially reduce the budget of people making Leisure City their home. They further realized that such healthy climates lessen the burdens on all health facilities, both public and private.

Florida Sun Deck Homes Co. also found that people who are growing much older prefer to live in a house which is free from the dangers of fire and hurricanes. Therefore, they continued to build their solid concrete house reinforced with steel, which has the lowest insurance rate of any building in south Florida. It must be borne in mind that the question of providing houses for those people who are to retire either willingly or unwillingly, presents a very serious challenge to the entire housing program of the United States. A check by the committee with the Department of Labor will verify the fact that the many pension plans inaugurated in the 1930's will turn out an astonishing number of retirees, beginning in 1954. When the committee adds that to the increasing number who

will become eligible for social-security benefits; and also takes into consideration the increase in life span in the country due to medical advancements as well as more favorable working conditions; it becomes very apparent that housing for the aged is more than ever a major problem.

Since we pioneered this particular type of housing, and since we have built and are building more than any other builder or developer in the United States, we want to present to the Congress some very definite thoughts for legislation which will be applicable anywhere in the 48 States and which we believe to be the soundest approach to this problem.

We feel that a very good job was done in starting this development with the limitations then in effect under the National Housing Act. At that time the only financial tool we had to operate with was a title I mortgage in the sum of $4,750, and we were allowed 25 dual commitments carrying an insured loan to the builder of $4,150. With this miserable amount of money available, we had to engineer the entire project, cut streets, put up bonds that the streets would be finished, provide a water system, and hope that the first 25 houses built would be sold. Believe us, those hardy individuals who purchased the first 25 houses were indeed pioneers in the true sense of the word. When we look back, we marvel at what was done with so little. We would never undertake such a program again, even in spite of the experience we have obtained under title I, section 8, of the National Housing Act. Such limited financial backing is not enough. This is not a single-shot operation where a few commitments can be obtained, and to start such a program is fraught with danger both to the builder and the home buyer.

Some system similar to that which is now done under the defense housing law, should be worked out whereby the developer could lay out a master plan, go forward with his water and sewage system, plan roads and build a sufficient number of homes, assured that his project will be a success. We cannot think of anything more discouraging than to get 25 or 50 people into a retirement area where they have had sound and good reasons to believe that eventually hundreds of people of their age group would form a community, only to have it abandoned because the developer could not withstand the teriffic initial expenses. Therefore, we feel that legislation should be enacted into a law setting

up

1. An insured mortgage of not less than 2 million and not more than 5 million; and not in excess of $6,300 per family unit; the mortgage to run for 12 years; the amortization on the unpaid balance to start not later than 24 months from the date of recording; the mortgage to carry release clauses and shall provide for the insuring of individual mortgages for 40 years at 41⁄2 percent to applicants that are approved by the FHA as to credit.

2. Such a mortgage should provide for the construction of all the off-site requirements where they are needed, such as (a) streets; (b) sidewalks; (e) gutters; (d) water; (e) sewage-disposal system; (f) a sheltered "community gathering place" of not less than 2,000 square feet for the first 100 families, and additional 1,000 square feet for each additional 100 families.

3. The mortgage should be only available to a developer when he can furnish to the insuring office a valid lease from merchants who will assure that the area will have the following minimum places of business: (a) A grocery store; (b) a place to buy meats; (c) a drug store; (d) a lease from some doctor or physician setting forth that he will open an office.

It is also felt that definite means of transportation from any project to the nearest town where more general shopping is available and to churches and places of amusement, is required.

The regulations should also stipulate that the developer had to assure that there would be gas, electricity, telephones, mail service, street lights, in the development.

In some cases, the developer, or sponsor, may have to install a sewer system and water system. Since the cost of these will come from the proposed mortgage, the question of who will own and operate these items can, it appears, he best answered by causing each property owner to belong to a nonprofit, cooperative association that will hold title to and maintain the community meeting place, the water system, if any, and the sewage system, if any.

It is further felt that in the rating of these mortgage applications, greater allowance should be given to those units which are designed to withstand the hazards of nature and man. In other words, if the builder makes the houses safer for those people who are not as able to take care of themselves in case of

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