(The brief heretofore referred to is as follows:) BRIEF ON BEHALF OF PENNYPACK WOODS HOME OWNERSHIP ASSOCIATION For several years the residents of Pennypack Woods, Philadelphia, have been directing their efforts toward the eventual purchase of this development by themselves under the mutual home ownership plan. To date we have been unsuccessful. Our lack of success has not been, as we shall endeavor to prove, due to any failure on our part, but rather to a certain hesitance on the part of Government negotiators to get down to brass tacks; an unwillingness on their part to enter into specific agreements written down in documentary form and signed by both parties, which today could be cited as evidence of legal commitments to substantiate our claims. The people of Pennypack have never thought it necessary to require Government representatives who negotiated with them, to guarantee the truthfulness of their statements by writing it all down and signing their names. It has always been the understanding by Pennypack residents that these negotiations were entered into in good faith, a bond stronger by far than any legal document, which must always exist between a Government and its people. Because of this, we feel that there is a moral obligation on the part of Government to honor the promises it has made to, and accepted in good faith by, its people. We caution those who may be concerned with this statement that it is not intended to be a legal brief of our arguments, to be scrutinized by a legal staff in a search for loopholes; but rather it is an outpouring of the hearts and minds of the people of Pennypack through the medium of the board of directors of their association. We expect it to be studied with understanding, and answered with candor. We ask that evasion and efforts to justify previous decisions made be purged from future negotiations and replies. Briefly, our aim is to show: 1. That a housing_development to be known as Pennypack Woods was built in Philadelphia with Lanham Act funds. 2. That this same Pennypack Woods was designed for mutual home ownership. 3. That mutual home ownership is a home-buying plan very specifically outlined by representatives of the Government. 4. That the people of Pennypack have done everything required of them in carrying out their end of the bargain. 5. That they have actively entered into negotiations with Government representatives on price and terms of sale. 6. That in spite of this, the Administrator of the Federal Public Housing Authority has reversed his previous position. 7. That his reversal is not based on any act of Congress. In the following paragraphs we hope to substantiate the points made above. 1. Under date of May 17, 1942, the Philadelphia Inquirer printed a news article, announcing the availability of homes at Pennypack Woods (exhibit No. 1 (a) attached). This article was based on a release put out for publication by Mr. Frank H. Welfer for the Federal Public Housing Authority. In general, it outlines the conditions under which tenants would be accepted, and tells how the development would later be purchased by the residents. We refer to it only as an indication of what was being held out to prospective tenants, as an inducement for moving in. To build this housing development, funds were provided under the provisions of the Lanham Act. 2. Pennypack Woods was not only a "Federal project ready to house war workers"; it was much more than that. It was designed by our Government as a development to be purchased by the residents from the Federal Public Housing Authority, and it was presented to the people as such. We refer to publicity put out by representatives of Government at various intervals from 1942 to 1944: (a) An editorial printed in the Philadelphia Record under date of May 23, 1942, entitled "Cooperative Housing Solves an Old Problem" (exhibit No. 1 (b) attached), which states: "The tests are being made by the Mutual Ownership Defense Housing Division of the National Housing Authority, at Audubon Village, a 500-dwelling-unit development across the river at Audubon, N. J., and at Pennypack Woods, a 1,000-dwelling unit adjoining Pennypack Park. Under this plan, homes will be owned by a mutual housing corporation, the stock of which will be held by the families who live in the homes." (b) A brochure entitled "Pennypack Woods, a Defense Home Plan" (exhibit No. 3 attached). This brochure was published by our Government and circulated, over the stamp of Frank H. Welfer, housing manager of Pennypack, to As we have pointed out, Pennypack was one of eight projects originally built by the Government. These projects were built not merely as real-estate ventures, not merely as commercial transactions for the enrichment of the Government. These projects had a social philosophy behind them. I do not think we ought to be ashamed of frankly avowing that doctrine. The rationale behind these projects was the fact that people wanted to own their own homes, but people in many instances could not afford to own their own homes, and that the Government was going to help them fulfill this lifetime ambition. It might well be asked why it has taken so long for Pennypack, Audubon, and Bellmawr to consummate a sale with representatives of the Government. The files of the Agency will very clearly show that it has not been the responsibility or the fault of the residents of these projects; that they have repeatedly engaged in negotiations sincerely trying to reach a conclusion. However, there have been several stumbling blocks placed in our path, chief of which was the hearings held by the Banking and Currency Committee under the Eightieth Congress. Although these hearings never resulted in actual legislation, it did cause the Administrator of the Housing and Home Finance Agency to publish a regulation-Public Regulation No. 1that endeavored to do away with the original idea of the "Westbrook plan." Our negotiations for the past 2 years have been concerned with that regulation alone. Once again, the viewpoint of the people of Pennypack Woods and of the other projects is very clearly pointed out in our brief. Public Regulation No. 1 had the effect of changing legislation already on the books, even though it was only based, in the words of Mr. Foley, on what he supposed to be "the intent of Congress." We have been saying to Mr. Foley for the past 9 months that the philosophy of the Eightieth Congress was very thoroughly repudiated by the American people in the last national election. It is our opinion that representatives of the Government have not been seriously attempting to conclude an agreement with us, simply because the philosophy of the present housing administration is diametrically opposed to the hopes that were enunciated by President Roosevelt, and are being carried on in the present administration. This constitutes a breach of good faith. If title II of the legislation now under consideration is enacted into law, or if by resolution of the committee that title becomes in effect the same as law, then not only will the hopes and aspirations of the residents of the three projects be destroyed, but also mass evictions will result, affecting veterans because of their inability to meet the terms and conditions this title will impose on them. It must be remembered that when the promises we refer to were made to us in Pennypack, we were not veterans-we were war workers-we later became veterans. While 70 percent of us were away becoming veterans, it appears the Housing Agency was working to deprive us of the homes to which we looked forward with all our hearts to return. We feel sure that the members of this committee will recognize the moral obligations that exist on the part of the Government toward the residents of "Westbrook plan" projects, and that you will want to see those moral obligations fulfilled. Therefore, we ask that the three remaining "Westbrook plan" projects be exempted for the provisions of this title. (The brief heretofore referred to is as follows:) BRIEF ON BEHALF OF PENNYPACK WOODS HOME OWNERSHIP ASSOCIATION For several years the residents of Pennypack Woods, Philadelphia, have been directing their efforts toward the eventual purchase of this development by themselves under the mutual home ownership plan. To date we have been unsuccessful. Our lack of success has not been, as we shall endeavor to prove, due to any failure on our part, but rather to a certain hesitance on the part of Government negotiators to get down to brass tacks; an unwillingness on their part to enter into specific agreements written down in documentary form and signed by both parties, which today could be cited as evidence of legal commitments to substantiate our claims. The people of Pennypack have never thought it necessary to require Government representatives who negotiated with them, to guarantee the truthfulness of their statements by writing it all down and signing their names. It has always been the understanding by Pennypack residents that these negotiations were entered into in good faith, a bond stronger by far than any legal document, which must always exist between a Government and its people. Because of this, we feel that there is a moral obligation on the part of Government to honor the promises it has made to, and accepted in good faith by, its people. We caution those who may be concerned with this statement that it is not intended to be a legal brief of our arguments, to be scrutinized by a legal staff in a search for loopholes; but rather it is an outpouring of the hearts and minds of the people of Pennypack through the medium of the board of directors of their association. We expect it to be studied with understanding, and answered with candor. We ask that evasion and efforts to justify previous decisions made be purged from future negotiations and replies. Briefly, our aim is to show: 1. That a housing_development to be known as Pennypack Woods was built in Philadelphia with Lanham Act funds. 2. That this same Pennypack Woods was designed for mutual home ownership. 3. That mutual home ownership is a home-buying plan very specifically outlined by representatives of the Government. 4. That the people of Pennypack have done everything required of them in carrying out their end of the bargain. 5. That they have actively entered into negotiations with Government representatives on price and terms of sale. 6. That in spite of this, the Administrator of the Federal Public Housing Authority has reversed his previous position. 7. That his reversal is not based on any act of Congress. In the following paragraphs we hope to substantiate the points made above. 1. Under date of May 17, 1942, the Philadelphia Inquirer printed a news article, announcing the availability of homes at Pennypack Woods (exhibit No. 1 (a) attached). This article was based on a release put out for publication by Mr. Frank H. Welfer for the Federal Public Housing Authority. In general, it outlines the conditions under which tenants would be accepted, and tells how the development would later be purchased by the residents. We refer to it only as an indication of what was being held out to prospective tenants, as an inducement for moving in. To build this housing development, funds were provided under the provisions of the Lanham Act. 2. Pennypack Woods was not only a "Federal project ready to house war workers"; it was much more than that. It was designed by our Government as a development to be purchased by the residents from the Federal Public Housing Authority, and it was presented to the people as such. We refer to publicity put out by representatives of Government at various intervals from 1942 to 1944: (a) An editorial printed in the Philadelphia Record under date of May 23, 1942, entitled "Cooperative Housing Solves an Old Problem" (exhibit No. 1 (b) attached), which states: "The tests are being made by the Mutual Ownership Defense Housing Division of the National Housing Authority, at Audubon Village, a 500-dwelling-unit development across the river at Audubon, N. J., and at Pennypack Woods, a 1,000-dwelling unit adjoining Pennypack Park. Under this plan, homes will be owned by a mutual housing corporation, the stock of which will be held by the families who live in the homes." (b) A brochure entitled "Pennypack Woods, a Defense Home Plan" (exhibit No. 3 attached). This brochure was published by our Government and circulated, over the stamp of Frank H. Welfer, housing manager of Pennypack, to thousands of war workers in the Philadelphia area. A section of it is devoted to "A brief outline of the mutual ownership plan," and states: "This plan has for its purpose the providing of adequate homes for carefully selected, medium-income families with definite assurance of home security. Recognizing the fact that neither straight rental nor installment methods meet the changing requirements of the average family, this plan offers a program for ultimate mutual ownership of homes. All residents become members of the Management Corp.; this corporation, and through it the residents, will become the permanent owners of the whole property. * * *"" (c) A leaflet entitled "Pennypack Woods Homes for War Workers." This flier was approved and circulated by Government representatives in 1944. It says in part: "The Federal Public Housing Authority has programed this project for mutual ownership-eventual ownership of the project by the resident." (exhibit No. 3 attached). We are not arguing that the above represents any legal commitment on the part of the Government. That is a matter to be decided by legal minds, not ours. However, we do claim that they constitute a moral obligation that must be recognized. 3. In the documents referred to above and in many others, the term "Mutual home ownership" has been described in great detail. We in Pennypack had the plan outlined to us on many, many occasions by official representatives of the Government agencies, including FPHA; so many times, in fact, that it was clearly understood beyond a question of doubt just what mutual home ownership is and how it would be obtained. As an example we cite the editorial in the Philadelphia Record already referred to and attached hereto as exhibit No. 1 (B). We quote from it: "Under this plan homes will be owned by a mutual housing corporation, the stock of which will be held by the families who live in the homes. While for the first few years the Government will retain control of these housing corporations, eventually the entire control will pass to the residents. At the end of 33 years they will own the homes free and clear of Government mortgages. "Monthly charges for the dwelling units are as low as rents, but include allowances for paying off the mortgage, for maintenance and repairs, as well as a reserve for vacancies * * *. "There is no down payment, which is a very important factor in housing war workers * * * "The advantages of the plan over the old renting system are already strikingly apparent in Audubon Village. While the plan is not yet fully in effect, the tenants know that it will go into operation shortly. The rents which they have been paying will be credited to their equity in the housing corporation." Further, in an article in Colliers magazine, Col. Lawrence Westbrook devoted himself to explaining mutual home ownership under the title: "No Down Payment," emphasizing this as the most important feature of the whole program (exhibit No. 4 attached). In his article, Colonel Westbrook refers to a sale made to Greenmount Village, in Dayton, Ohio. Attached hereto (exhibit No. 5) is a release sent out by the Office of War Information, National Housing Agency, which also refers to Greenmount, and further explains what mutual home ownership is. We quote: "After the sale price has been determined, the corporation may consummate the sale within a period of 60 days. When the sale is completed the corporation is to receive credit on the purchase for any savings (net return) effected during the period of operation of the project under the lease." This release goes on to explain the terms of sale with regard to period of amortization and rate of interest. It further states as follows: "A similar lease was signed in July with tenant corporation at Walnut Grove, a 250-dwelling-unit project in South Bend, Ind. "Other projects built under the mutual ownership plan of the defense-housing program in 1941 include the following: Avion Village, 300 units, Grand Prairie, Tex.; Dallas Park, 300 units, Dallas, Tex.; Bellmawr project, 500 units, Bellmawr township, near Camden, N. J.; Audubon Village, 500 units, near Camden, N. J.; Pennypack Woods, 1,000 units, Philadelphia; and Winfield Park, 700 units, Winfield, near Newark, N. J. "It is expected that within the next year corporations on each of the projects now scheduled for mutual ownership will have been formed by a majority of the project residents and will have leases with the Government." As another example, we refer to an article, The Mutual Home Ownership Plan, by Warren Jay Vinton, Chief Economist, Federal Public Housing Authority (exhibit No. 6 attached). Mr. Vinton goes into the plan very thoroughly as to price, amortization period, interest rate, and so forth. More than that, he very specifically states: "No down payment, other than a membership fee of $50, is required from either the original or subsequent occupants." Mr. B. F. Fitzpatrick, of the Housing and Home Finance Agency, in his letter to Mr. Henry J. Andreas, Audubon Mutual Housing Corp., dated June 11, 1948, seeks to brush off this statement of Mr. Vinton by saying it applied only to dealings between tenant and corporation. Such was certainly not our understanding when the whole matter was explained to us. Our understanding has always been that there would be no down payment between corporation and Government, and that any moneys made over and above operating expenses would be applied against the purchase price. Pennypack Woods has made money. It has operated in the black. If it is the desire of Government to have this sum, whatever it may be, applied against the purchase price as a down payment, then we are in accord. 4. The residents of Pennypack have worked diligently to bring mutual home ownership to our community. Under date of March 4, 1946, a letter was received from the New York regional office, FPHA, over the signature of Mr. Arthur M. Blaine, stating: "The Government is giving consideration to a possible sale of this housing project to the present occupants, acting through a mutual ownership corporation. If a sufficient number of tenants desire, they may organize a nonprofit cooperative corporation to purchase the housing from the Government at its fair market value under an arrangement whereby the down payment will be in such amount as the mutual ownership corporation deems necessary to insure the sincere interest of the occupants" (exhibit No. 7 attached). A meeting of residents interested in mutual ownership was called on March 28, 1946. Over 500 were present. Mr. Blaine, Mr. Belay, and Mr. Rice outlined the mutual ownership plan. The residents were informed that the mortgage period would be 45 years, the interest rate 3 percent, final purchase price decided by joint appraisal, and that all profit realized on the project up to the time of purchase would be deducted from the final price. At that same meeting a mutual ownership committee was selected, and started the action which led to the formation of the Pennypack Woods Home Ownership Association, with a present membership of over 800. Our bylaws and articles of incorporation were drawn up and submitted to the courts in September of 1946 (exhibit No. 8 attached). Mr. M. H. Goldstein was appointed as our attorney, and he entered into negotiations with the Federal Public Housing Authority in our behalf, as is evidenced by the letters numbered exhibit Nos. 9, 10 and 11 attached. 5. The letters between Mr. Goldstein and Mr. Rice, copies of which are attached hereto, indicate our willingness to enter into agreement on terms and price. The only reason the actual price was not brought into the discussions was the delay on the part of Government in getting an appraisal figure on which price was to be based. This appraisal was requested by Mr. Goldstein in his letter to Mr. Rice under date of October 29, 1946 (exhibit No. 10 attached). We quote: "Pursuant to such negotiations, I would respectfully request on behalf of my client, the Pennypack Woods Home Ownership Association, that your office arrange for the making of an appraisal of the project by individual units." In his reply Mr. Rice states: "For your information, we have requested an appraisal of the project which will probably require some 30 to 45 days to complete." (Letter dated November 7, 1946, exhibit No. 11 attached.) The appraisal referred to has never been received. Because the purchase price would be based on the appraisal, it was obviously impossible to discuss matters concerning price until the appraisal was made. However, our corporation, speaking for the residents of Pennypack, had entered into these negotiations in good faith, and had every right to expect, without question, good faith in return. This contention is borne out by a letter from Mr. Rice, dated September 26, 1946 (exhibit No. 9 attached), formally opening negotiations, from which letter we quote: "We will be pleased to meet with you and a committee of the association's trustees for the purpose of commencing negotiations for the sale of this war housing ptoject to the present occupants acting through a nonprofit corporation. If you will advise us what date would meet with your convenience, we will endeavor to make arrangements accordingly, "We assure you that we will be pleased to do everything possible to expedite a decision in this matter, and will cooperate to the limit of our responsibilities." 94397-49- -22 |