INDIVIDUAL VIEWS OF MR. TOWER

The passage of the Housing and Urban Development Act of 1968 hopefully was to preclude the necessity for major revision and program initiation for some ensuing years; and it was anticipated that any legislation during this session would constitute an aid for implementing the prior bill. Such is not the case. Some measures contained in this bill, as reported, are unnecessarily far reaching, broad based, and will create less housing in the long run; some fly into the teeth of what has been requested by the agency which is to administer the programs; and some which would give the greatest impetus to housing at the lowest cost have been summarily deleted.

The inclination of this legislation to encourage attainment of the national goal of 26 million housing starts and 6 million federally subsidized units in the next 10 years is not absolute and the everincreasing tendency to prescribe control and spending by the Federal Government as the panacea for our housing ills is reflected throughout. Once again, local housing authorities have asked for Federal amphetamine to alleviate their housing pains, when the utilization of various programs besides the Federal dole could possibly suffice. Additionally, there is further encouragement to construct housing for persons who are not in those financial straits for which the programs are designed, and there are certain provisions which could potentially create vast problems in the future.

HOUSING AUTHORIZATIONS

The new authorizations for fiscal year 1972 approach $4.7 billion; this amount appears to be within reason considering that our nationaĺ goal of 26 million starts is married to spiraling housing costs and present building methods. There is, however, compounding of a grave dilemma in this legislation. By increasing the maximum principal mortgage amounts and giving easier terms, the Federal Government is effectively underwriting our increased housing costs. We should, rather, hold mortgage limits down, thereby applying pressure upon the construction industry to utilize new technologies and advanced building techniques in order to construct units at a lower cost. If we keep raising the limits with each price rise, urging lower downpayments, and extending the time for principal payment, there is no incentive for holding these building costs down. Also, experience has shown, very pointedly, that mortgage ceilings act as a floor for housing costs; when ceilings are raised to the limits herein proposed, we have truly left the area of low-income housing. This is brought out by the fact that the ceilings on low-income housing now may approach very closely the maximum loan limits under standard (203) FHA loans. This is not low-cost housing; it is a circumvention of the initial legislative intent of providing low cost housing for those who could not otherwse afford it. By increasing these limits and tying the increases to building costs, the long-range effect will be to create less, not more, housing units.

ACQUISITION AND SALE OF LAND FOR HOUSING

In two sections of this legislation (411 and 412) there exists a potential for grave problems. First, section 411 authorizes the Secretary to lend money to public organizations for the acquisition of land to be subdivided and sold to individuals. I am vehemently opposed to the Federal Government lending money to be utilized to condemn the property of an individual which is later to be subdivided and sold. Eminent domain is necessary to acquire property for many legitimate governmental functions, but we should not underwrite this type land acquisition for use as a subdivision. This is a job for free enterprise. Section 412 presents yet another problem. Pursuant to that section, governmental lands may be sold to individuals at a cost below fair market value for use in low-cost housing. This conveyance is in fee and there is no reversion if the land is not used for low-cost housing after the initial 20 years. In reality, the purchaser is getting a windfall; the price which he pays the Federal Government could in many instances be much below the actual value of the land and after 20 years he can use it for any purpose he so desires. The Federal Government must pay fair market value when it acquires land, and it should receive the same when it sells lands.

UTILIZATION OF NEW TECHNOLOGIES

Much time and many millions of dollars are now being spent by HUD for the creation of mass housing. The primary program is "Operation Breakthrough." This is an attempt to get private industry to develop the means by which housing can be mass produced on a large scale. During executive session, I introduced an amendment which would instruct the Secretary to utilize these new technologies, whenever they would save money, in all federally assisted housing programs. The amendment was defeated. I feel that new technologies and mass-produced housing are the answers to many of our housing problems, yet if we cannot and do not utilize the products and systems so devised, then we are completely defeating ourselves and depriving many Americans of that decent home which we are attempting to get for them.

PUBLIC HOUSING

Once again this year, public housing authorities asked that the Federal Government pick up an additional portion of their tab. It is my feeling that something must be done in this area in order that it function and meet the goals which it now attempts to achieve. I can see great potential in the public housing field for the use of Turnkey III and industrialized housing to meet the need. Local housing authorities should work diligently to attempt to utilize the flexibility of Turnkey III in combining public housing with other subsidized and conventional facilities in one development, thereby alleviating most of the financial problems brought out in the hearings. Creation of such systems appears to me to be a much better solution to the economic woes of public housing than a continued cry for additional Federal funds.

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JOHN G. TOWER.

91ST CONGRESS 1st Session

SENATE

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REPORT No. 91-393

PROVIDING FOR LOANS TO INDIAN TRIBES AND TRIBAL CORPORATIONS, AND FOR OTHER PURPOSES

SEPTEMBER 9, 1969.-Ordered to be printed

Mr. BURDICK, from the Committee on Interior and Insular Affairs, submitted the following

REPORT

[To accompany S. 227]

The Committee on Interior and Insular Affairs, to which was referred the bill (S. 227) to provide for loans to Indian tribes and tribal corporations, and for other purposes, having considered the same, reports favorably thereon with amendments and recommends that the bill as amended do pass.

The amendments are as follows:

On page 2, lines 2, 3, and 4, strike the words "will be subject to the interest rate provisions of section 307 (a) of said Act as now or hereafter amended, and".

On page 3, line 1, insert commas around the phrase "free of such trust or restrictions"

On page 3, strike all of section 5 and insert a new section 5 as follows:

SEC. 5. Loans made pursuant to this Act will be subject to the interest rate provisions of section 307 (a) of the Consolidated Farmers Home Administration Act of 1961, as amended, and to the provisions of Subtitle D of that Act except sections 340, 341, 342 and 343 thereof: Provided, That section 334 thereof shall not be construed to subject to taxation any lands or interests therein while they are held by an Indian tribe or tribal corporation or by the United States in trust for such tribe or tribal corporation pursuant to this Act.

PURPOSE

The purpose of S. 227 is to authorize the Secretary of Agriculture, through the Farmers Home Administration, to make loans to any Indian tribe or tribal corporation for the purpose of acquiring lands within the tribe's reservation.

NEED

The provisions of the bill will be of assistance to tribes and to individual Indians in three main ways. First, it will provide authority for the Farmers Home Administration to make loans to tribes to enable them to purchase some lands which are in multiple ownership status, and thus to help solve the Indian heirship land problem. There are now over 11 million acres of trust or restricted land in individual ownership. It is estimated that between 60 and 70 percent of this land is owned by more than one person as tenants in common. Although the availability of loans is not the complete answer to the Indian heirship land problem, loans will be of assistance in some instances.

Second, individually owned trust or restricted land is passing out of Indian ownership at a rapid rate. Tribes are becoming increasingly concerned with the erosion of the Indian land base. Loans will enable tribes that are without funds to purchase such lands when offered for sale.

Third, tribes sometimes need to purchase non-Indian owned land and block it out for Indian use. The availability of loans will enable them to do so.

The scope of the need of financing for land purchases is indicated by the fact that as of June 1, 1969, tribes had indicated that they need nearly $121 million for tribal land purchases. Tribes are using their own funds to the extent available for this purpose, but in most instances they do not have adequate available funds. The revolving fund of the Bureau of Indian Affairs from which loans for tribal land purchases may be made is presently overcommitted. Loans from banks or other customary lenders are generally unavailable because of the inability of most tribes to mortgage or otherwise encumber tribally owned land as security. Even the land purchased with a loan cannot be given as security if title thereto is taken in the name of the United States in trust for the tribe, in most instances. The inability of tribes to sue or to be sued also is a deterrent. The proposed bill will eliminate these constraints insofar as loans by the Farmers Home Administration are concerned.

The committee believes the enactment of S. 227 will provide Indian tribes with an added source of credit, and help them to meet some of their present needs for land financing.

AMENDMENTS

The Departments of the Interior and Agriculture have suggested several clarifying amendments which have been incorporated into the bill.

S. Rept. 91-393