Mr. TALLE. About 20 projects and each one involves many units, I presume?

Mr. KAZAN. That is right. In our case, we have 2,500 units. Each project has from about 600 to 1,500 units.

Mr. TALLE. I suppose the tax exemption applies also to the publichousing units?

Mr. KAZAN. Yes, definitely.

Mr. TALLE. Thank you, Mr. Chairman.

Mr. PATMAN. Are there any other questions, gentlemen? If not, thank you very much, Mr. Kazan; we appreciate your testimony.

Mr. KAZAN. I have a bulletin published by the Bureau of Labor Statistics which describes our projects.

Mr. PATMAN. Yes, if you will leave that with the committee, that would be very helpful. It will not be inserted in the record.

The committee will stand in recess until 2 o'clock at which time Mr. Foley will be here.

Tomorrow morning the committee will hear the two witnesses referred to by Mr. Westbrook in his testimony.

We will now recess until 2 o'clock.

(Whereupon, at 12:35 p. m., the committee was adjourned, to reconvene at 2 p. m. the same day.)

AFTERNOON SESSION

Present: Messrs. Spence, Brown, Patman, Rains, Buchanan, Multer, McKinnon, Addonizio, Bollinger, O'Hara, Gamble, Kunkel, Cole, and Mrs. Woodhouse.

The CHAIRMAN. The committee will be in order.

We will resume the testimony of Mr. Foley.

Before that, Mr. McKinnon would like to have something inserted in the record.

Mr. MCKINNON. I would like to have inserted in the record the testimony of the city manager of the city of Richmond, Calif., who has a particular problem in the matter of disposal of warehousing. The CHAIRMAN. Without objection, that may be done. (The testimony referred to above is as follows:)

DEAR MR. CHAIRMAN: I believe that you and your staff are aware of the peculiar housing situation which obtains in the city of Richmond, Calif., The population of the city at present is approximately 102,000 of which approximately 60,000 are living in temporary war and veterans' housing, the disposition of which is covered by title II of H. R. 5631.

In order to meet the special situation in Richmond we would propose that there be added to S. 2246 provisions which would accomplish the following:

1. Make inapplicable the provisions of section 601 to temporary housing located in any municipality in which the total number of persons, who, on December 31, 1948, were living in temporary family accommodations provided by the United States since September 8, 1939, exceeds 75 percent of the total population of such municipality, as shown by the 1940 census.

2. Provide that, in the case of any city in the category described in No. 1 above, any such temporary housing may, notwithstanding any of the provisions of this act or any other law, be transferred only to a local public agency organized for slum clearance and community redevelopment where such request for transfer or relinquishment is approved by the governing body of the locality.

3. That, in the case of any such transfer or relinquishment, the following general conditions would obtain:

(a) If the temporary housing were located on land owned in fee by the United States, that such local public agency pay for such land in the manner provided by paragraph 1 of section 601 (b) of title II of H. R. 5631, or

(b) If such temporary housing is located on land in which the United States has an interest less than a fee interest, that such transfer be made only where such local public body has acquired by purchase or condemnation a fee simple interest in the land. We have discussed this particular problem with the Office of the Administrator, Housing and Home Finance Agency, who have indicated that they have no objection to this particular method of dealing with the special problem faced by the city of Richmond. They have also indicated that they will prepare and submit to your committee the technical amendments to title II of H. R. 5631 to accomplish this purpose. WAYNE E. THOMPSON, City Manager, Richmond, Calif.

The CHAIRMAN. Mr. Foley, you may proceed with your statement on title II.

STATEMENT OF RAYMOND M. FOLEY, HOUSING AND HOME FINANCE ADMINISTRATOR-Resumed

Mr. FOLEY. Mr. Chairman, before I proceed, I have some tables which I will refer to in my testimony and which I would like to have inserted in the record.

The CHAIRMAN. Without objection that may be done. (The tables referred to above are as follows:)

TABLE I.—Lanham Act housing: Volume, cost, income, as of Dec. 31, 1948

1 Net management income only. Does not include other returns such as $22,600,000 net receipts from disposition, $1,000,000 miscellaneous receipts.

2 Data as of Mar. 31, 1949. These data exclude a number of units removed in accordance with sec. 313 of the Lanham Act and 122,947 units transferred under the McGregor Act to educational institutions. For a summary of McGregor Act disposition, see table IV.

TABLE II.-Temporary units eligible for transfer under the proposed bill,1 as of

Dec. 31, 1948

1 Active units only. Excludes 20,500 inactive temporary units in war housing program. Excludes income from units transferred under McGregor Act in fiscal 1949.

TABLE III.-Amount of housing subject to disposition, by State,' as of Dec. 31, 1948

1 Includes temporary and stop-gap units in inactive management.

Between Dec. 31, 1948, and Mar. 31, 1949, an additional 6,840 units have been transferred to educational institutions under the McGregor Act.

TABLE IV.-Relinquishments and transfers to educational institutions under the McGregor Act (Pnblic Law 796, 80th Cong.), as of Mar. 31, 1949

Mr. FOLEY. Title II of H. R. 5631 addresses itself to the problem of disposing of war and veterans' housing. This title covers disposition of temporary housing, transfer of certain permanent housing for low-rent use, and the sale of the balance of the permanent housing. It seeks to provide feasible methods by which the Government may get out of the business of operating, managing, or supervising such housing at the earliest practicable date.

In my judgment, it would provide an equitable and practicable program for the disposition of this housing with a great reduction of the sort of delays and difficulties thus far encountered. It recognizes a fundamental principle in the Federal Government's housing policy —that, to the fullest extent possible, decisions involving the local housing supply should be made by the communities affected. The bill, accordingly, provides that the initial decision as to whether temporary housing should be removed or continued in housing or any other use is to be made by the governing body of the municipality or county in which the housing is located. Similarly, the decision of such governing body is required prior to the transfer of any permanent war housing for low-rent use, if authorized by Congress.

Proposed legislation, in many respects similar to the provisions of this title regarding temporary housing, was submitted at the last session of the Congress. However, legislation enacted last year was limited to veterans' reuse housing on land owned or controlled by educational institutions and for which contracts had been entered into with such institutions.

The housing under our jurisdiction to which this bill is applicable is of two main classes-war housing and veterans' reuse housing.

The war housing was provided by the Federal Government for defense and war workers, under the authority of the Lanham Act and related statutes, during the period from 1940 to 1945. Since the cessation of hostilities it has been made available to veterans and servicemen and their families as vacancies occurred.

The veterans' reuse housing, on the other hand, was provided immediately following the war under the authority of title V of the Lanham Act. For the most part, this housing was produced through the moving and conversion of temporary war housing and barracks buildings either by the Federal Government or by the municipalities, educational institutions, and nonprofit organizations to which they were made available. With a few exceptions neither the sites on which this housing is located nor the housing itself is owned by the Government. On the contrary, they are owned by cities and other municipalities, educational institutions, and nonprofit organi

zations. In those cases where the local bodies were required to expend local funds to a substantial extent, the only substantial obligations of such bodies to the Federal Government are contractual obligations to rent the dwellings to eligible veterans and to remove them in accordance with section 313 of the Lanham Act. In other cases, the local bodies have additional contractual obligations requiring them to pay to the Government net revenues derived from such housing.

Table I shows the amount of the housing involved in this title. It shows that a total of nearly 467,000 units of all types are affected. Of the 339,000 remaining units of war housing, 142,500 are now classified as of permanent character and about 196,500 are classified as temporary. There are approximately 127,500 units of veterans' reuse housing remaining in this program. As table III shows, the housing remaining in these programs and to be disposed of is located in every State of the Union, in each of the Territories, and in Puerto Rico and the District of Columbia.

As a result of the enactment of Public Law 796 by the last Congress, there have already been relinquished and transferred to educational institutions a total of 1,054 veterans' reuse projects consisting of nearly 123,000 units. Table IV contains the statistics with respect to the disposition accomplished by the Agency under the so-called McGregor Act.

Basic information as to the cost of the housing is also shown in table I. The cost to the Federal Government in providing war housing_amounted to $1,702,100,000. About $253,000,000 has been returned to the Government from this housing in the form of net income, proceeds of disposition, and other proceeds. Approximately $1,166,000,000 was expended by the Government for the remaining war housing and about $297,600,000 for the remaining veterans' housing. Thus, all of the housing to be disposed of represents a total capital expenditure by the Government of $1,463,800,000. Of course, this housing was provided as a part of the war effort and it was understood that a large part of its cost, particularly expenditures for temporary housing, would not be recovered by the Government. Expenses of providing this housing were considered in the same light as other expenses incurred at the time-for guns, tanks, and other war material—as a part of the total cost of the war.

In any consideration of housing disposition, the occupancy situation is particularly important. Substantially all of the veterans' reuse housing is occupied. Occupants of this housing are limited to veterans and servicemen and their families. The war housing is also almost completely occupied and more than 60 percent of the tenants are veterans and servicemen. The percentage of occupancy of dwell, ing units in war housing by veterans and servicemen has, of coursesteadily increased, since preference is given to them in filling all vacancies.

Section 313 of the Lanham Act requires the removal of all temporary housing units of both war and veterans' reuse housing as soon as practicable and in the public interest, but not later than January 1, 1950, with the exception only of such housing as the Administrator, after consultation with the local communities, finds to be still needed in the orderly demobilization of the war effort. All such exceptions must be reexamined annually and reported to the Congress. As you