OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE (PROPERTIES AND
INSTALLATIONS)-Continued

Family housing projects approved for development under title VIII of the
National Housing Act, as amended by Public Law 345, 84th Cong.-Con.

OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE (PROPERTIES AND
INSTALLATIONS)—Continued

Family housing projects approved for development under title VIII of the National Housing Act, as amended by Public Law 345, 84th Cong.-Con.

Army:

OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE (PROPERTIES AND
INSTALLATIONS)-Continued

Projects approved since Apr. 6, 1956

Mr. BROWN. Mr. Rains, do you have any questions?
Mr. RAINS. I have several questions, Mr. Chairman.

Generally, Mr. Arrington, I think your statement is a real good one. I would like to start off by asking the question that was in everybody's mind last year when title VIII was first enacted, and seems to be fading away, but still comes up.

The Department of Defense is not planning on building under the title VIII program any military housing where there is an adequate supply of private housing in the area to house military personnel? Mr. ARRINGTON. No, sir.

Mr. RAINS. In other words, in locating this housing you take into consideration the availability of housing near the military installations, and what might happen to Government-guaranteed financing on homes before you proceed to set aside any title VIII housing for that area?

Mr. WIDNALL. Don't you sometimes change your criteria as to need, and say all of a sudden that you need all of the personnel on the base because of defense needs?

Mr. ARRINGTON. You will find that different military commanders will place varying emphasis on the proportion of their personnel that they feel they need on base, and of course there is a great deal of difference, depending on the missions of various installations.

For instance, fighter-interceptor stations in the Air Defense Com

mand have an extremely high percentage of personnel whose presence is required on board on short call, and they must live within the 3-mile, 5-minute radius.

Mr. WIDNALL. Isn't it within the discretion of the commander of the base, though, to decide all of a sudden that we need them on-base rather than off-base, as has been the practice in past years?

Mr. ARRINGTON. It would not be possible for a base commander to make such a unilateral decision. That would have to be reviewed by the military department concerned and also by our office before new housing would be built.

Mr. WIDNALL. Isn't that a very important factor in your final decision, that is, in addition to what you have described to Congressman Rains?

Mr. ARRINGTON. You mean the factor of military necessity for people on the post?

Mr. WIDNALL. Yes, sir.

Mr. ARRINGTON. That is true.

Mr. WIDNALL. So that it isn't purely a consideration of whether or not you have got housing off the base?"

Mr. ARRINGTON. No. In other words, when we say that we consider the availability of private housing, we mean to the extent that it can meet the military requirement, based on the particular conditions and the mission of the base in question.

For many types of activities, housing in the civilian community, if it is available at reasonable rentals, reasonable distances, and adequate as to facilities, is entirely adequate to meet the total need.

Mr. RAINS. But in the case of an installation such as the Air Force Base at Omaha, General Lemay's headquarters, it would be reasonable to assume that you need more housing on base in this type of an installation, isn't that correct?

Mr. ARRINGTON. That is correct.

Mr. RAINS. In other words, the military necessity is one of the factors taken into consideration.

Mr. ARRINGTON. That is true.

Mr. RAINS. We have heard a lot of talk, on this committee, and on the floor of the House, that you can build a much cheaper military home by appropriated funds."

I want to see if you will agree with what I state to you, as to whether or not it is correct.

The average cost of appropriated-fund housing is $13,500, isn't it? Mr. ARRINGTON. That has been true; yes, sir; particularly in the fiscal 1955 program.

Mr. RAINS. That $13,500 of appropriated funds includes only the cost of the structure and those incurred within 5 feet line of the structure, isn't that correct?

Mr. ARRINGTON. In general that is correct, sir.

Mr. RAINS. In other words, the appropriated funds cover what is known as the cost up to the 5 feet line.

Now, if the appropriatd funds housing required side improvements and the other things which are necessary to complete any housing project, whether it be military or civilian, is it not true that the average cost of an appropriated funds house would be $16,000 to $16,400? Mr. ARRINGTON. That is true.

Mr. RAINS. So the statement that appropriated funds housing is vastly cheaper than housing built under title VIII, is a myth; isn't that correct?

Mr. ARRINGTON. We feel that the margin is actually fairly small, two and three thousand dollars a unit over the period taken to amortize the investment, and that difference is totally due to the difference in assumed interest rates.

Mr. RAINS. On page 12 of your statement you have a recommendation which you list as the third recommendation.

What do you mean by that? I don't understand the third recommendation.

It says that you recommend that section 407 be amended by adding a new subsection providing for the use of military construction funds for capital expenditures authorized by sections 403 through 406 of the Housing Act of 1955.

Mr. ARRINGTON. Well, for example, the cost of acquiring land or housing under section 404 should be charged against appropriations for construction rather than appropriations for quarters allowances. Mr. RAINS. Well now, of course that is a matter for the Armed Services Committee.

Has the Department cleared that matter with the Armed Services Committee?

Mr. MAYER. No, sir; we have not cleared that particular provision with the Armed Services Committee. However, this is really by means to a great extent it is a clarification of what I think is intended here.

In other words, if we use the funds for the acquisition of housing, we ought to be able to use them also for improvement of such housing to whatever extent is necessary to make it usable for the purposes of this act.

Mr. RAINS. If my recollection is correct, the Armed Services Committee objected seriously and prohibited you using revolving fund money for capital expenditures, isn't that correct?

Mr. MAYER. I don't know.

Mr. ARRINGTON. I don't have the answer to that either, Mr. Rains. Mr. RAINS. How much money would you expect that to be? What kind of savings could you utilize for capital expenditures?

Mr. ARRINGTON. As this is written, it would permit us to utilize unexpended appropriated funds in the military construction program. Mr. RAINS. Wouldn't that be a way for the Defense Department to have funds for capital expenditures without them being cleared with the Appropriations Committee?

Mr. ARRINGTON. Well, for example, one case where this would be necessary would presumably be to purchase equities in Wherry projects, in cases where we should buy them, and to continue the mortgage. Mr. RAINS. I have very serious doubt about that recommendation. Now, on page 12, at the bottom of the page, you make the recommendation that $15,000 average cost per unit be applied to a servicewide basis. And you ask for the average cost set at $16,500.

First of all, let me ask you, will the quarters allowances amortize on a 25-year basis a $16,500 cost?

Mr. ARRINGTON. Yes, sir.

Mr. RAINS. All right.