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graded rent system the extent to which higher income families stay in this housing diminishes the amount of subsidy that the Government provides. I will call attention to that as we go along later on.
Chart 11 discloses that the gross rents rise in accordance with the rise in income. It shows the average gross rents charged in low-rent housing. These gross rents include shelter rent, plus the cost of heat and all other utilities. Shelter rents are approximately $5 less than the gross rents shown. For all types of localities, the average rent per month at admission was $19.11. This rent at admission ranged from $22.34, including all utilities, in the larger cities, to $14.55 for Negro families in the South.
Whenever the incomes of families in public housing go up, the rents are proportionately increased. When family income increases sufficiently, they are charged the maximum rent permitted by the Office of Price Administration, being the rent prevailing in the locality for quarters comparable to the public housing unit occupied by the families. As a result of these increases in rents, chart 11 shows that the average rent for all families in 1944, including all utilities, was $27.08, in contrast to the $19.11 charged the same families at the time they were admitted to low-rent housing. There have been proportionate increases in the rents in all types of localities.
The effect of the increases in rent is, of course, to decrease the subsidy paid by the Federal Government. Families whose incomes are high enough to permit them to pay economic rents receive the benefit of no Federal subsidy, pending the time when private housing becomes available to them, and they are required to vacate their public housing accommodations.
So much for section 701. All the provisions in this section of the bill emphasize the objective that public housing is to serve only those families whom private enterprise is unable adequately to serve, and that aid should be extended for public housing only to those localities which assume the responsibility for determining their own requirements. I should like to endorse this section with the one reservation I have made about the gap theory, namely, that the gap theory is only workable so long as you provide for an expanded private enterprise program in the middle market, or whatever market you wish to call it. Without it, it is indefensible. I should like also to state that, by and large, these measures have been a matter of regulation of the Federal Public Housing Authority, but we welcome their being introduced into the law, because of the greater dignity and weight they
will then have.
The CHAIRMAN. Of course, you do examine occasionally the wages of the people that are paying rent in these substandard houses, or the new houses?
Mr. KLUTZNICK. Yes, sir.
The CHAIRMAN. How often is that done?
Mr. KLUTZNICK. It varies with localities. During the war, because of the sudden shift, some localities found it necessary to do it monthly. Others do it semiannually, but most do it annually, because of the sheer weight of the problem. Any extraordinary changes that take place in any interval are called to the attention of the management. The CHAIRMAN. Of course they always have to have some place to go.
Mr. KLUTZNICK. That is right. That has been our biggest problem, Senator, during the war.
The CHAIRMAN. All right.
VETERAN'S PREFERENCE: SECTION 702
Mr.KLUTZNICK. Now I shall discuss section 702, entitled "Veterans' preference." Under this section, for 4 years after his discharge, a veteran would be entitled to a preference for admission in any housing provided under the United States Housing Act. This preference is also extended to families of servicemen, including families of servicemen who died in the service. All other things being equal, that is, if the veteran is otherwise eligible for occupancy in the housingexcept for the fact that he does not have to come from substandard housing he gets the preference. We think this is completely workable. As a matter of fact, most localities are giving this preference now. There is very little intake in low-rent housing in this country that is not servicemen's families and veterans' families these days, and this is increasing each month. Similar preferences would be established by law as a national policy for all future projects assisted by FPHA.
Such a preference recognizes the specially acute problem facing these families. Many of the married men who entered the service were compelled to break up their homes. As returning veterans, these men and their families are anxious to reestablish their own homes, so they can enjoy the normal life to which they are now so richly entitled. Many of the veterans who left as single men will soon be marrying and seeking a home to start their family life. Such special needs of returning veterans justify the special treatment which would be afforded by this amendment. The experience in the low-rent-housing program to date shows that such a provision is not only workable, but highly desirable.
The preference granted by this section is in addition to the preferential treatment afforded families of servicemen and veterans under section 701. That section makes the requirements as to prior residence in substandard housing inapplicable to families of servicemen and veterans who are otherwise eligible.
Section 702 also provides that low-rent projects may serve veterans and other individuals without families. This change would bring the Federal law into harmony with most of the State laws. It would make it possible to serve single veterans as well as aged survivors of families and other single persons of low income in need of decent housing.
The only thing I would like to call your attention to-because there has been considerable discussion about it on the floor of Congressis the problem of providing housing for GI's at schools and universities. I wouldn't want to leave the impression that the terms of this bill, as it is presently worded, will treat that problem completely. It will cover that problem in any community where there is a long-term need for families of low income, either for family housing or dormitory housing.
In the case of family units, such projects would be undertaken by the local public agency in accordance with the provisions of this bill (requiring local determination of need, approval by the local governing
body, local contributions, and so forth) and would be made available by that agency to veterans on a preferential basis. To the extent that housing units would not be needed by veterans entitled to such a preference, the units would be rented to other low-income families. In short, such housing would constitute a part of the total supply of public housing in that community for low-income families, with preference to veterans.
In the case of dormitory units, there may be instances where there would be a permanent need for accommodations for single persons of low income in the community and where the local public agency would be prepared to initiate a permanent project to provide such accommodations. As in the case of the family units, such a project would have to meet all the requirements of the act, and there would have to be a demonstrated permanent need in that community for such accommodations for low-income single persons such as working girls or men, or aged people. If such permanent dormitories were built by a local public agency, the needs of single veterans could be met on a preferential basis during the immediate postwar years.
Under those circumstances during the pressure period as far as veterans are concerned, veterans would be entitled to preference, and the houses could be used during that period for veterans, and thereafter for other families of low income.
This program would, however, not cover the more usual situation of a typical college town where there is a permanent need for additional dormitory space and where there is no permanent need for housing families of low income. In such a case, it may be more appropriate to meet that permanent need for college dormitories as part of financing the educational facilities of the university, rather than as a part of a general housing program. In any event, it should be recognized that S. 1592 is not specifically directed to situations where the need for permanent housing accommodations is exclusively for students, but is rather directed to cases where there is a permanent need for the housing accommodations for low-income families or single persons in the population generally, and where the needs of veterans can be temporarily met on a preferential basis. The bill is not designed to treat that problem, and I doubt whether it should be designed that way. That is a special educational problem, rather then a problem of housing low-income families.
Nor does the bill cover the temporary housing program that was referred to in the hearing the other day. There is a growing need for temporary accommodations for veterans in college towns, university towns, and for that matter, other cities.
Title V of the Lanham Act does manage to deal in a small way with that problem. It grants adequate legislative authority to the National Housing Administrator and the Federal Public Housing Authority to meet this need, provided that funds are appropriated for this purpose. It is for Congress to determine whether funds should be appropriated to assist in making temporary housing available for veterans attending educational institutions in localities where there is no long-term need for the housing. It would appear that such a determination should be made through appropriation measures rather than through the medium of S. 1592.
In view of the absence of funds to assist in providing such housing, the National Housing Administrator has formulated policies under which FPHA is making temporary housing available to educational institutions which are prepared to bear the expense of moving such houses from the places where they are now located to the places where they are needed. Some of the temporary needs are being met in this manner and will continue to be met to the extent that the educational institutions are prepared to bear the expenses of moving and reerecting housing and to the extent that a supply of such temporary housing is available.
I want to make it perfectly clear that this veterans' preference provision of the low-rent housing bill does not treat any veterans' problems other than those that I have outlined.
Senator BUTLER. Have you put into the record a complete list of projects to date?
Mr. KLUTZNICK. We did put that in the record in the hearings before the subcommittee of the Postwar Committee in the Senate. We would be glad to repeat it.
Senator BUTLER. It wouldn't take up much room, would it?
Mr. KLUTZNICK. Well, it takes a few pages, but it is available. Senator BUTLER. I think that should be inserted here, because I would like to know just where the projects are.
Mr. KLUTZNICK. We will be delighted to put it in at the end of my testimony.
(The information requested, "Low-Rent Housing Program Under the United States Housing Act" appears on p. 241.)
Senator BUCK. Would you agree with me this section ought to include families of servicemen who have died in the war, where the wife has not remarried?
Mr. KLUTZNICK. I think it should.
Senator BUCK. So do I. Do
The CHAIRMAN. Yes; I do.
Mr. KLUTZNICK. As a matter of fact, this point is already covered in section 702. It extends the preference to families of servicemen who died in the armed forces.
COST LIMITS: SECTION 703
Now I come to section 703, which is entitled "Cost limits." Before we get into the details of that section, I should like to give you a little of the background of our cost experience.
Chart 12 will tell you what the total cost per dwelling unit has been in urban localities under the United States Housing Act program to date. The national average is $4,649 per unit. In metropolitan districts of over 1,000,000 population the average cost has been $5,104; in metropolitan districts of 500,000 to 1,000,000 population, $4,972; from 250,000 to 500,000, $4,448; and from 100,000 to 250,000, $4,296. In smaller localities the average cost per dwelling has been $3,884. In farm localities, where the local authorities had a very limited. experience to date, the cost per dwelling averaged $2,350. Now, that is the over-all cost, including the cost of acquiring slum sites together with the old slum buildings (where we used a slum site) the cost of their clearance, cost of construction, and the local authority
overhead. Half of the dwellings in this program have been built on the sites of former slums.
(See chart 12 which follows Mr. Klutznick's statement.)
Senator BUCK. What do you put up in rural areas-single-family, or two-family units, or what?
Mr. KLUTZNICK. In farm localities they have been customarily three-bedroom units, with sanitary privies. We discuss that under title VIII, which is the title relating to the rural program.
Senator BUCK. It is just a home for single families?
Now, this committee is considering urban redevelopment provisions, and while I am not testifying on that title of S. 1592 in any sense of the word, I think you may be interested in our experience in the cost of using slum sites instead of vacant sites. This cost includes land, old buildings demolished, and necessary site improvements. In metropolitan districts over 500,000-as chart 13 shows-we had a median cost for slum sites per dwelling unit of $1,637. That is for the sites prepared for re-use. In metropolitan districts of 100,000 to 500,000 population, the median cost per unit was $1,279. In smaller localities the median cost has been $815. You will notice on this chart that in each instance there is a distribution of the percentage of those sites that fell into categories from $600 to $2,000, in intervals of $200. In 9 percent of the cases in the large metropolitan districts, for example, the cost of slum sites has been $2,000.
(See chart 13 which follows Mr. Klutznick's statement.) Senator BUCK. That is per unit?
Mr. KLUTZNICK. That is per unit. As was to be expected, the costs of slum sites are relatively less in the smaller communities. Chart 14 illustrates our experience in the write-down in cost of slum sites per new dwelling. It shows the write-down which would be necessary in the cost of slum sites to bring them down to the same relative prices which we have paid for vacant sites ready for use. (See chart 14 which follows Mr. Klutznick's statement.)
Mr. KLUTZNICK. Assuming that 15 percent of the total development cost is an appropriate site cost-and that I think is generally accepted in a number of places-the median write-down in metropolitan districts of over 500,000 would be $961 per unit. In other words, it costs $961 per dwelling unit for the privilege of removing some of these houses you referred to earlier, Senator Buck. In metropolitan districts of 100,000 to 500,000 the median write-down would be $724. In smaller localities the median write-down would be $276. Of course, the variation goes all the way from virtually nothing up to $1,400 in 3 percent of the cases in large metropolitan districts. The percentage distribution is shown on this chart 14. In other words, when you are considering the cost per dwelling unit under the United States Hous ng Act and you want to compare it with private experience, wherever a slum site is used, the only fair way to do it is to subtract the cost of the appropriate write-down in the value of the slum site as against a vacant site, because that is also value received in the sense that you have eliminated some substandard housing.
Now, chart 15 is merely the same story in percentages. You may find it interesting as you consider the urban redevelopment and slum removal titles. In metropolitan districts over 500,000, the median there would be a 58 percent mark-down from cost to value. In