« PreviousContinue »
least, that is a matter of perhaps 5 to 10 years, before the full effect of this legislation is over.
But if you also follow the history of higher education, as you have indicated, it did drop back and then continued to go up almost constantly straight through until 1940 when the enrollment was the highest in the history of higher education.
Senator HICKENLOOPER. Doctor, one of the-I wouldn't say objections I don't mean it that way exactly-but one of the difficulties, as I understand your argument, is that you apparently propose that the Government go in now and establish, in one way or another, permanent housing for these universities and colleges on the basis of an immediate emergency need, but that emergency is going to be substantially over in say 4 years at the outside. I think when you say it will go on for 10 years, there will be what you might call the tag end, but that will be a very small percentage of the number that will then want college facilities. This emergency situation developed because young men and women have not been able to go to college for 3 or 4 years.
It seems to me that will be over in an average of 3 to 5 years. There will be some taking professional courses longer than that, but many of these people coming back to college have already had 1 or 2 years of college.
I cannot quite justify in my own mind the Federal Government going in and providing permanent housing at Government expense which will become the permanent property of the college after the emergency need is over.
It seems to me our problem is to meet the emergency now and any permanent housing would be more or less up to the institutions themselves as a permanent part of their program.
Mr. BROWN. I think there are two aspects of that problem. One is the one that you have emphasized. That is, this is to meet an emergency issue which can, to some degree, be met by the temporary housing, Quonset houses, trailers, et cetera-not too likely a way of meeting it as far as university campuses are concerned, but that is not the worry on their part. Their chief problem now is to find a place for them to have their homes.
However, there is the other problem, namely, that there has developed as a result of the war two things. First, a serious shortage of housing on the university campuses by the absolute cessation of housing construction for 4 years.
Secondly, and this is in the minds of a good many and is the reason why it may be justifiable for Congress to assist in some kind of a grantin-aid, and that is the very large increase in building costs as a result of the war.
For example, one institution has a small construction planned and funds raised which would have been allotted to a contractor at $250,000. They have recently resubmitted it for bids and the lowest bid is $240,000.
I don't want to get into that because I know nothing about realty or the legal aspects of it.
Senator TAFT. Not only that, but the theory of subsidizing expenses because costs are increasing is something that would break the Government wide open. I don't think we can take that into account. Presumably the increase in income to the institution, on the other
end of the scales, the possibility of increase in fees and so on should balance the increase in cost on, over a fair period I mean over a reasonable period. I don't think we can undertake to subsidize something just because costs have gone up.
Senator HICKENLOOPER. It seems to me what is being proposed here is the construction of housing units let us just take arbitrarily 30 years as their reasonable useful life. The proposal is being made that the Government go in and virtually subsidize a substantial portion of that permanent construction in order to meet an emergency for 4 or 5 or 6 years.
Now, it seems to me that if it is a question of subsidy I would rather subsidize, as suggested by Senator Taft a moment ago, the GI, and pay his rent; let the building carry itself on a normal proposition; let the college or university-the State, in some cases-make the capital investment, own the property and receive a fair return that will in due course amortize it.
I don't know much about the housing experiences of colleges and universities generally. I have a very little knowledge of the experiences of several, maybe a half dozen at the outside. I don't know of any in the last 15 years that have built dormitories, but what have not only been able to secure money to build them, but to amortize them and pay for them with much more rapidity than they anticipated, at very modest rates, and they didn't have any subsidy.
Mr. BROWN. I don't want to overemphasize the subsidy side of this, because the point at which the committee definitely went along was in terms of the provisions of S. 1592 which mean a guarantee on the part of the Government as part of this over-all building program. Perhaps it was an error to even throw in this other proposal, but I do know that in doing so I am expressing the wish of a good many of the institutions.
Senator HICKENLOOPER. I can see the urgent necessity of immediate housing that will require housing of a type that maybe a lot of us wouldn't care to live in permanently, that is, these Quonset huts and various other types of houses, but that is the immediate way of meeting this emergency. These people have to be housed this winter and next fall. There are some other things that enter into it in the way of the type of building to develop, but that is another story. But when you are talking about permanent dormitories or housing units I cannot justify in my own mind the contribution of the Government by way of a subsidy or otherwise directly to institutions for these permanent units when the emergency need will be over at least so far as the present is concerned in a very few years.
I would rather see it be given to the individuals who occupy them and let them pay a reasonable fair value for those things, but financed on the bases they have always been.
Mr. BROWN. That would not imply that three things provided in this bill might not be a very definite assistance to them, namely, the long period of payment, and low interest rate and the high guarantee.
Senator HICKENLOOPER. Didn't we hear yesterday, Mr. Chairman, that the FHA
Senator TAFT. The FHA thinks it is too liberal and unsound the way it is now.
Senator HICKENLOOPER. The amortization becomes unsound.
Senator TAFT. May I ask, Mr. Brown, I notice you say there is a definition beyond these provisions that you would like to recommend. I take it that is your own personal view rather than the official view of the council.
Mr. BROWN. That is correct, sir, and I indicated the two things that are the official expression of the judgment of the American Council through this committee on relationships. The first was support of the over-all bill S. 1592, and the second, support for the immediate action on the Lanham Act, section 5. Beyond that it is a matter of discussion with a considerable number of people, and I should not want it to have the same weight that the other recommendations have. Senator TAFT. Do you know of any universities that have sat down with the FHA and the present FHA law and tried to work out the financing of a dormitory?
Mr. BROWN. I haven't discussed that in detail enough to answer it. Senator TAFT. I have always thought it would be perfectly possible. I would like to see the actual figures of some project to see if that could not be done even under the present law. I am in favor of making it more liberal, but I wondered if you had to wait for the law or whether you couldn't go right ahead under the present law. Mr. BROWN. I would assume we could go ahead, but we are anxious for these more liberal provisions.
Senator TAFT. The term would be a little shorter, but I don't see why the interest rate should be higher.
Senator HICKENLOOPER. Do you happen to have any figures on the usual cost for apartments such as, these married students might need per unit-for apartments in an apartment building?
Mr. BROWN. I was talking yesterday by telephone with one of the representatives of the Land Grant College Association. Possibly I ought not to pass on their action on that, but I know it will come officially to this committee.
To answer your question unofficially entirely, they have requested that that thousand dollar per room limit be raised and the statement to me was that it was wholly inadequate. He didn't tell me how much they wanted it raised.
Senator HICKENLOOPER. Well, just by way of illustration, I would say that a $3,000 unit would probably be amortized very easily at 4 percent over a period of 10 years. That is about $30 a month$27 or $28 a month, somewhere along in there, at 4 percent, would amortize itself in somewhere near 10 years.
The CHAIRMAN. Do you mean per room? $3,000 per room?
Senator HICKENLOOPER. No; I am speaking of apartment housing, for a $3,000 unit. It might be in a building that had 100 apartments in it and that would cost $300,000. But at somewhere near $30 a month that apartment would amortize itself over a 10-year period at 4 percent.
Senator TAFT. Can the buildings being built for married couples be of any value to single people after they are actually through with these married people in colleges?
Mr. BROWN. There is a general feeling among the colleges that this marriage problem is going to continue. It has been more or less traditional that one didn't marry until one was through college, particularly because there just were no facilities for married people, but once these apartments are made available college people will be likely
to marry while in college. Whether that is true or not I don't know. I am just giving you the general impression and nothing more.
Senator TAFT. I wondered if they can be built in a way that would make them economical to use for single or double purposes?
Mr. BROWN. That is the plan I know one institution has under way now. They are one-room apartments which can be used also without kitchen facilities, making them as convertible as is possible. I know also at the University of Minnesota they have had housing for married students for a decade or more for which there has always been much more demand among their graduate students than supply is available.
The CHAIRMAN. Well, thank you very much, Doctor.
Mr. BROWN. You are entirely welcome.
The CHAIRMAN. Tomorrow, Friday, at 10:30, we are going to have John H. Fahey, Commissioner Federal Home Loan Bank Association; Mr. Sidney Maslen, . American Association of Social Workers, and Mr. Clark Mock, Family Welfare Association of America.
Tomorrow morning at 10:30, and I hope everybody will be here on time.
(Whereupon, at 3:45 p. m., an adjournment was taken until Friday, November 30, 1945, at 10:30 a. m.)
GENERAL HOUSING ACT OF 1945
FRIDAY, NOVEMBER 30, 1945
UNITED STATES SENATE,
COMMITTEE ON BANKING AND CURRENCY,
Washington, D. C. The committee met at 10:30 a. m., pursuant to adjournment on yesterday, in room 301, Senate Office Building, Senator Robert F. Wagner, chairman, presiding.
Present: Senators Wagner (chairman), Murdock, Taylor, Carville, Butler, and Buck.
Present also: Senator Ellender.
The CHAIRMAN. The committee will come to order. This morning we have the distinction of having Mr. Fahey as our first witness. You gentlemen of the committee all know him well and favorably, and I am sure admire him very much.
Mr. FAHEY. Well, I certainly appreciate the time which this committee devotes to its work and the privilege of appearing before it. The CHAIRMAN. Mr. Fahey, would you rather proceed with your statement first and have any questions, that members may want to propound to you, asked after you conclude?
Mr. FAHEY. I think, perhaps, it would be better to let me go through my statement first and then be questioned. I think that would probably save a good deal of the committee's time.
The CHAIRMAN. All right; you may proceed.
Mr. FAHEY. But I do not care. It is agreeable to me either way. The CHAIRMAN. All right; you may proceed.
STATEMENT OF JOHN H. FAHEY, COMMISSIONER, FEDERAL HOME LOAN BANK ADMINISTRATION, WASHINGTON, D. C.
Mr. FAHEY. Mr. Chairman and gentlemen of the committee, I have been advised that your committee would like first to have my views, with reference to sections 301 to 306, inclusive, of S. 1592, and then as to other portions of the bill.
Title III of the bill contains in sections 301 through 306 proposed amendments of the basic statutes which deal with the Federal home loan banks, Federal savings and loan associations, and the Federal Savings and Loan Insurance Corporation, units of the Federal Home Loan Bank Administration.
Separate measures incorporating similar amendments have been pending before your committee since the spring of 1944. These measures are S. 179, a bill to amend the Federal Home Loan Bank Act, which was introduced by the chairman of your committee; S. 180, a bill to amend section 5 of the Home Owners' Loan Act of 1933,