ing for veterans. Have you any specific suggestions along that line to offer to the committee? Mr. GREEN. I have not at the moment, Senator Mitchell, but will be glad to offer some specific suggestions later, and send them to the chairman. Senator MITCHELL. We would be glad to have them. Mr. GREEN. That is important, I realize, and I will be glad to offer some suggestions. The CHAIRMAN. Thank you very much, Mr. Green. Mr. GREEN. That you for the opportunity of coming up here. Mr. GREEN. Thank you. (Thereupon Mr. Green left the committee table.) The CHAIRMAN. We will now have the pleasure of hearing Mr. Harry Bates, who is also an old friend of mine. He is the chairman of the committee on housing, American Federation of Labor, and has been for some time, as I recall. We will be glad to hear from you. Mr. BATES. I thank you. The CHAIRMAN. You may proceed. STATEMENT OF HARRY C. BATES, CHAIRMAN, HOUSING COMMIT. TEE, AMERICAN FEDERATION OF LABOR, WASHINGTON, D. C. Mr. BATES. For the past 10 years the housing committee of the American Federation of Labor has kept in close touch with the housing needs and problems facing wage earners in some 900 communities throughout the United States. Local housing committees of central labor unions and activities of our affiliated organizations enable us to keep currently informed about the housing requirements of wage earners' families throughout the country. The responsibility of our housing committee is to express the interest and serve the requirements of wage earners in all trades and occupations for better housing for them and their families. More than one-fifth of the wage earner's income is spent for shelter. Workers have a vital concern in housing as producers, as consumers, and as citizens. It is the function and the duty of the A. F. of L. Housing Committee to place before Congress the views which are representative of the largest single group of Americans who have had the opportunity to consider and give democratic expression to their views and judgment on this matter so vital to them through the representative channels of the trade-union movement. The general housing legislation now before you has the overwhelming support of the American Federation of Labor membership. Housing is today, and for the years to come will remain, an issue of paramount importance to every American family. The decision Congress is about to make with regard to long-term housing policy will vitally affect the every course of the economic and the political life of our Nation. What Congress is about to do with regard to this legislation will be carefully watched and well noted by most families throughout the land. This is one issue on which the American people are prepared to make sure that the public interest is truly served by legislation and will tolerate no sacrifice of the public interest to accommodate special interests. On behalf of millions of American wage earners, I place before the Congress of the United States their overwhelming and unequivocal mandate, their urgent plea and insistent demand for prompt enactment of this legislation. I plead, on behalf of millions of American citizens who hope for and expect an early and determined decision of this Congress, a decision which will vitally affect the future welfare, job opportunities, and security for the American people. Labor and friends of labor place the responsibility for America's postwar reconstruction where it properly belongs they place it squarely upon Congress. They place that responsibility on Congress here and now, for they know that on the legislative calendar of this postwar session of the United States Congress there is no other measure which will give direct and positive aid to private enterprise, to local communities, and to the mass of our people, to help them achieve full production, full employment, and a better living in the years to come. American wage earners are seeking from this Congress the enactment of several important measures, important as a defense against mass unemployment and against the threat of insecurity and depression. Labor awaits action on these bills. The housing legislation now before Congress differs in one significant respect from all other proposals. It embodies a program which is not defensive. It is a positive, affirmative, construction program. Of all pending legislation it is the only program which will provide a major tangible outlet for investment and savings, which will directly generate construction and, with it, a large volume of production. It is the only program which will directly yield employment opportunities, not for a month or a year, but over a long-term period. S. 1592 embodies the major proposals for a postwar housing program adopted unanimously by the American Federation of Labor Convention held in New Orleans in November 1944. They represent years of study on our part. It is significant that the first call for a comprehensive, universal housing program was placed before Congress by the American Federation of Labor as early as December 1940. The bill therefore reflects the considered judgment of thousands of labor organizations and millions of wage earners who are members of the American Federation of Labor. For the record, I should like to file the complete text of the 1944 convention report of the American Federation of Labor on postwar housing. You will find that the basic objectives of our program are embodied in S. 1592. The CHAIRMAN. The convention report will be made a part of the record at this point. (The report referred to is as follows:) POSTWAR HOUSING (Report unanimously adopted by the American Federation of Labor Convention, November 1944) When the war draws to a close, the task of reconstruction and development of our communities will offer a challenge to every segment of our Nation. Labor, private enterprise, and government-Federal, State, and local-must work concertedly to blueprint and execute plans for providing homes worthy of demobilized veterans and war workers, in rebuilding and rehabilitating our slum and blighted areas, and in erasing the vast housing deficit caused by building inactivity during the depression and war years. The winning of this war will usher in a new era, not only in the United States but throughout the world-an era of reconstruction. It is our responsibility, the responsibility of labor, to do its part so that every community will be prepared to take advantage of the opportunities for building growth and assumes its full share of organized responsibility to sustain that growth. Years of chronic deficiency in home construction have created a large deficit of adequate shelter in virtually every city and town. Shifts of population precipitated by the war and drastic curtailment of all construction during those years have augmented these deficits. The immediate task before us is to ascertain the most urgent need for homes in every community and to make sure that this need is soundly met. Equally great is the further task of assuring maximum volume of sound residential construction attainable through private initiative and effort that in the years to come will achieve stability and will, in turn, contribute to the growth and stability of employment and production throughout our economy. The average American worker wants, above everything else, security of employ ment and income. The average American worker wants to be a home owner. The outright and independent ownership of a home is the expressed desire of the vast majority of our wage earners. In recent years a great many workers' families have learned from bitter experience, however, that lacking assurance of stable incomes and stable jobs and in the absence of safeguards of sound construction and financing, they cannot afford to undertake the burden of long-term home purchasing, and that if they do so it is only in the constant dread of the prospect of eviction and complete loss of all their savings. Conscious of this and aware of the fact that residential construction offers the major generator of maximum employment, not only in the building industry but throughout the industry and trade of the Nation, we believe it imperative that the following be made the guiding principles and procedures of the Nation's postwar housing policy: (1) The financial basis of home purchasing should be modified in order to (a) meet the pressure for employment mobility; (b) safeguard the worker's investment in the home he is buying by making the equity transferable; (c) reduce the interest rates; (d) assure soundness of construction through a review of estab lished standards and the legal requirements that noncompliance with such standards be made subject to penalties. (2) Assurance that postwar housing developments be closely related to the realinement of employment opportunities in each neighborhood, each community, each region, and the entire Nation. Stable growth can be assured and suitable housing can be developed only in relation to long-range neighborhood and metropolitan master plans designed for growth and the best use of the resources of our cities, towns, and rural areas. (3) Urban redevelopment programs for entire communities with full participation of private enterprise should be made an instrument for developing and serving a larger housing market to operate in the public interest of the entire community. In such programs no public subsidy or privilege must be permitted to redound to private profit of real-estate speculators or promoters and should not be extended except on the basis of firm minimum standards. A properly constituted public agency of the municipality should be authorized for the purpose of carrying out such programs. (4) The USHA low-rent housing and slum clearance program interrupted by the war should be resumed and expanded. Certain features of the United States Housing Act should be improved to enable local housing authorities to borrow funds from private investors instead of the Federal Government and to facilitate the expansion and usefulness of the low-rent program. (5) Provision should be made for Federal grants for project planning to individual communities. (6) The Lanham Act should be amended to authorize local housing authorities to acquire permanent war housing. (7) Temporary public war housing should be removed as rapidly as possible and as soon as provision is made for suitable permanent accommodations for workers and families still occupying these temporary projects. Wherever possible, suitable sites of temporary war housing projects should be utilized for the construction of permanent low-rent housing. (8) Mutual home ownership should be encouraged as a means of making home ownership available for families of moderate income. In many communities war housing projects of permanent construction can be sold to their present occupants on a mutual basis where employment stability is assured. Provision should be made in the National Housing Act for 100 percent insurance and long-term amor tization for mutual home ownership and similar cooperative housing develop ments. (9) A comprehensive program for rural housing should be developed and put into effect under the supervision of county housing authorities created for the purpose, with adequate farm representation assured to farmers. Demountable housing built during the war should be made available to farm families on equitable terms through such county housing authorities. Such rural housing programs should be a part of farm rehabilitation and farm-security plans, with full protection against inflated land values and with option to purchase any property acquired on a rental basis. (10) The National Housing Agency should be established as a permanent statutory agency responsible for over-all policy and should be headed by a fiveman board, of which the chairman should act as the administrator, one member to be representative of private housing agencies of the Federal Government, one representative of the public housing agencies of the Government, one member drawn from private business, and one member representing organized labor. Labor representation should be assured in the policy and operating functions of the agency. Strategy for meeting the housing need in every community must be developed locally. Workers have a right and a responsibility both as citizens and workers to participate in shaping plans for community development. Full labor representation must be assured on all local housing agencies. So that the approach of organized labor is both sound and effective, we must have plans which can be dapted to different community situations. Wherever possible a local land and housing authority should be established, (1) empowered to direct the over-all course of the community reconstruction and development; (2) equipped to facilitate maximum provisions for needed private residential building within standards of sound housing construction and consistent with long-range plans for community growth; and (3) constituted to carry out a long-range program of slum clearance and low-rent housing for low-income families. In other situations the city planning commission will be the logical agency to direct the broad lines of community redevelopment, while the housing authority should be the public agency designated for the acquisition of land for private redevelopment as well as to carry on the low-rent and slum-clearance program. The general pattern of community planning and housing machinery should insure coordinated and simplified machinery serving the public interest. Details of organization will, of course, vary in different communities. Urban redevelopment by private enterprise can be an effective tool for serving a larger housing market if it is operated in the public interest. The initiative for over-all community redevelopment should clearly rest in a local public agency Such as the land and housing authority or the city planning commission. The local agency should (1) determine officially the areas which require redevelopment; (2) announce the conditions for redevelopment, including major street changes, land use, rehousing policy, and density and rent limits; (3) entertain and pass upon proposals from private developers. The agency should prepare a master plan for the land use and development of the whole metropolitan area so that suburban areas, shack-towns, as downtown blighted areas would be dealt with as a part of a single redevelopment plan. A public agency such as the housing authority should be empowered to condemn and purchase the land and lease it for short renewable terms for private development. Unless this is done, an area could be developed with public assistance only to become blighted again after a period of years. Responsibility for determining that decent housing, suitably located and at the right price, is made available to persons displaced by redevelopment should be clearly vested in the local government. Any provision for partial tax exemption should be used to change the basis of assessment from an ad valorem to a rental income basis which would help to obtain housing on the redeveloped land which the former occupants could afford. In strengthening the United States Housing Act the Federal Government should be empowered to lend, grant and extend guaranties to local public agencies, preferably housing authorities, for metropolitan planning and land acquisition. The Federal Government should be empowered, to the extent that it is not already so empowered, to extend guaranties to such local public housing agencies for preliminary development, development of site improvements, construction of housing and provision of community facilities for disposition to cooperatives and limited dividend corporations. Local housing authorities should be permitted to borrow from private sources the entire amount of loan funds, eliminating the need for Federal loans. The present cost limitation of the act should be changed to the cost per room rather than the cost per unit to permit adequate housing of large families. The act should provide for loans and annual contributions to local housing authorities for the acquisition and clearance of land in slum and blighted areas so that the land can be used for low-rent housing or leased to private developers at use value. The housing provisions of the GI bill of rights will have an important bearing on the housing market after the war. They could induce a serious speculative boom unless carefully administered, since they provide for Governmentguaranteed Joans which make it possible for the veteran to purchase a home without any security and with the interest paid free by the Government for the first year. Any plans for housing legislation must include suitable provisions to assure sound home ownership for veterans as well as the rest of the Nation. Of utmost importance is to safeguard veterans against excessive interest charges foreshadowed in the housing title of the GI bill. Postwar housing can be important in providing full employment and better living for our Nation if there is active support for a comprehensive housing program in every community. Mr. BATES. Let me briefly review the major proposals which the American Federation of Labor has advocated and most of which are embodied in S. 1592. Home ownership for families of moderate incomes: Title III of the bill provides for a series of changes in the FHA system of mortgage insurance. The combined effect of these changes is to provide for so substantial a reduction in the monthly payments of home buyers as to bring home ownership within the financial reach of families with moderate incomes. The objective of these changes is to enable the FHA to truly serve the interests of the home buyers. This basic reform of the FHA system of home insurance is long overdue. Despite the fact that the legislative intent of the National Housing Act, under which the FHA has operated, clearly establishes the congressional purpose to have the FHA serve the broad interests of home buyers, the FHA has been primarily a service agency to money lenders, the real-estate interests, and the home builders. The record of the FHA operations shows, for example, that it has failed in the responsibility, delegated to it by Congress, of assuring for the public the minimum structural standards of sound home construction. The standards developed by the FHA in different regions of the country have been weak and their enforcement has been extremely lax. The FHA inspection of completed homes has long been a standing joke among the builders themselves. Senator RADCLIFFE. Mr. Bates, you do not mean that that statement should cover the entire situation, do you? Mr. BATES. I think that is generally true Senator RADCLIFFE. I think in Baltimore, as to which I have some knowledge, the general opinion is that the inspection has been satisfactory. Mr. BATES. I am glad to learn that. Senator RADCLIFFE. I have heard much favorable comment on it. Mr. BATES. I am glad to hear that. Senator MURDOCK. You will admit, Senator Radcliffe, will you not, that that is an important phase of this problem? Senator RADCLIFFE. Yes; but I wanted comment on the fact that as to that particular phase, with which I am more or less familiar, I do not think I have heard anything but favorable comment. The man in charge there is a good man, and a good many citizens and a |