Mr. TALLE. Will you yield to me, Dr. Smith? Do you recommend that, Mr. Richards? Mr. RICHARDS. We have no recommendations. Mr. TALLE. Mr. Richards, are there municipalities which grant tax exemptions to cooperatives in the housing field? Mr. RICHARDS. I believe New York City does. Mr. TALLE. Will you supply the names of those municipalities for the record? Mr. RICHARDS. I will be glad to get what we can for you. (The information referred to appears on p. 56.) Mr. O'HARA. Mr. Chairman. The CHAIRMAN. Mr. O'Hara. Mr. O'HARA. Mr. Foley, I wonder if you could clarify this point which has been puzzling me somewhat: The Federal Housing Administration, with offices in the Merchandise Mart in Chicago, is letting off a good many people, reducing its force. How does that fit in with your picture of increased Federal Housing Administration business? Mr. FOLEY. If there are separations there, it is probably because of the budget limitations, and Commissioner Richards has already explained that general problem, Congressman. I do not know whether at this time there are releases taking place in Chicago. Perhaps he can answer that, since it is his operation. But it ties very directly in to the proposal in this bill, which he has explained, and which I think is extremely important. We have here a situation which we cannot predict a year or a year and a half in advance, as we must do for budget purposes, what is going to be the volume of demand for the services of our field staff. That fluctuates. It has risen to an all-time high during the past several months, far beyond anything we could have predicted when the budget request went before Congress for approval. Yet, when it comes to processing the business, that, of course, means having a sufficient staff to process the business. We are unable to move as an ordinary business-type operation would to take care of the volume as it comes, with the result that we are backlogged-very heavily now-so much so that in some States and cities I am receiving the petitions from city councils to increase the staff in the Federal Housing Administration offices so that the building operations of private builders will not be held up. It cannot be done, of course, without authorized funds to expand. What the Federal Housing Administration has had in the past from the Appropriations Committees of Congress is an authorization to expend out of its earnings, not appropriations out of the Treasury, and what is proposed here is that they be permitted to proceed on the nonadministrative expense system, with regard to those field operations, so that they can meet that kind of situation, and not, because of an exhaustion of the budget funds, for instance, have to be laying off people at a time when we probably should be hiring people. Mr. O'HARA. What I am interested in, Mr. Foley, is this: Are the reductions in the Chicago office comparable to the reductions in the offices in other metropolitan centers? Mr. RICHARDS. Yes sir. Mr. O'HARA. Then the reductions there do not indicate a lessening of governmental cooperation with the builders in Chicago? Mr. RICHARDS. No; no more so than in any other area of the country. It is a result of a restricted authorization to spend our income. Mr. O'HARA. Then the Federal Housing Administration at the present time is hampered in the work that it is doing by the lack of a sufficient appropriation; is that it? Mr. RICHARDS. We are hampered by lack of sufficient authorization to spend our income; yes. Mr. O'HARA. And, at the present time, there is an increased demand for the services of Federal Housing Administration, and yet the giving of that service is delayed because of the lack of the necessary money and there are reductions when, as a matter of fact, there should be additions to the staff. Is that right? Mr. RICHARDS. That is right. Mr. O'HARA. Thank you very much for clarifying the point for me. Our people in Chicago were very much concerned, because they felt that our efforts to effect a solution of the housing-shortage problem are being very seriously retarded by the laying off of these men in the Federal Housing Administration office in Chicago. Thank you. The CHAIRMAN. The House is in session, and we must go to the floor. We will adjourn until 10 o'clock tomorrow morning. (Whereupon, at 12:15 p. m., the committee adjourned, to reconvene at 10 a. m., Tuesday, July 26, 1949.) HOUSING AMENDMENTS OF 1949 TUESDAY, JULY 26, 1949 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., Hon. A. S. Monroney presiding. Present: Messrs. Monroney, Brown, Patman, Rains, Buchanan, Multer, O'Brien, McKinnon, Dollinger, O'Hara, Gamble, Kunkel, Talle, Cole, Scott, and Nicholson. Mr. MONRONEY. The committee will come to order. Our first witness today is Mr. George Korink, Bureau of Yards and Docks, Navy Department. We also have Mr. Leonard Niederlehner, counsel for the Munitions Board. I understand you gentlemen wish to testify together. Mr. NIEDERLEHNER. M. Chairman, I have a prepared statement I would like to read. Mr. MONRONEY. You may proceed with your statement, and you may supplement it with oral testimony if you wish. STATEMENT OF LEONARD NIEDERLEHNER, COUNSEL, MUNITIONS BOARD, ACCOMPANIED BY GEORGE KORINK, BUREAU OF YARDS AND DOCKS, NAVY DEPARTMENT Mr. NIEDERLEHNER. The Munitions Board has been designated by the Office of the Secretary of Defense to provide your committee with a coordinated National Military Establishment report on H. R. 5631, a bill to amend the National Housing Act, as amended, and for other purposes. It is requested that title II of the bill be amended to add to the proposed new title VI of the act entitled "An act to expedite the provision of housing in connection with national defense and for other purposes," approved October 14, 1940, a new section to read as follows: SEC. 609. (a) Notwithstanding any provisions of law or of this title, no temporary or permanent housing which was constructed with funds made available to the Administrator or his predecessors by the Departments of the National Military Establishment, or which has been requested for transfer by the respective Secretaries of the Departments of the National Military Establishment pursuant to section 4 of this act, or which was constructed originally to service primarily an installation of the National Military Establishment, shall be transferred, sold, relinquished or otherwise disposed of by the Housing and Home Finance Agency, except upon written consent of the Secretary of Defense or his designee. (b) Preference in filling vacancies in housing specified in subsection (a) of this section which remains under the jurisdiction of the Administrator, shall be given to service personnel and to persons engaged in national defense work or mobilization activities. Housing projects Pennsylvania 36011, Pennsylvania 36012, Rhode Island 37013, and Virginia 44131, which have been requested by the Secretary of the Navy for transfer to the Navy Department pursuant to section 4 of the act of October 14, 1940, should be deleted from the list of projects contained in section 606 (a) of the proposed new title VI of the act of October 14, 1940, pending review and concurrence by the Navy Department in the proposed conveyance thereof to the respective local public housing agencies indicated. Project Virginia 44131, consisting of 300 family units, was constructed originally by the Navy Department with Navy appropriations. Release of the project to the National Housing, predecessor of the Housing and Home Finance Agency, was effected in accordance with the requirements of Executive Order No. 9070, dated February 24, 1942. Alabama projects Nos. 1031, 1033 and, 1035, and Texas project No. 41121, which have been requested by the Air Force, should likewise be deleted from the list. The addition of the proposed section 609 under the proposed new title VI of the act of October 14, 1940, is believed necessary for the protection of the interests of the Federal Government and the National Military Establishment. The proposed requirement that the Secretary of Defense concur prior to the disposal of housing projects, which were originally constructed with funds made available by the Departments of the National Military Establishment, or which were constructed originally from other appropriations for the primary purpose of servicing installations of the National Military Establishment, will insure that the original "defense" purpose for which the housing was constructed has been fully met before the Government disposes of the facilities to local agencies. The requirement that the Secretary of Defense shall concur in the transfer of projects which have been previously requested by one of the military departments will preclude the possibility of the disposition of housing which is not in fact surplus to the needs of the Government and the transfer of which would necessitate the expenditure of additional appropriated funds for the replacement thereof. In the event that the foregoing proposed limitations on the transfer of the described housing projects are not acceptable, it is believed that the minimum protection for the needs of the National Military Establishment will require amendments of the proposed bill to provide the following: (a) That a State, political subdivision or local public agency filling vacancies in any permanent housing transferred to it shall give such preference to military personnel and to persons engaged in national defense work or mobilization activities as the Secretary of Defense or his designee shall prescribe to the transferee. (b) That with respect to personnel for whom a preference is prescribed by the Secretary of Defense or his designee, the maximum income limitations on occupancy of "low-rent" housing shall be waived. This report has been coordinated among the Departments and Boards in the National Military Establishment in accordance with procedures prescribed by the Secretary of Defense and has been approved in principle by the Bureau of the Budget. Mr. Chairman, in substance, what we consider the situation to be, the purpose for which the housing was originally constructed can still be served. If the transfer is made, there are two possibilities which might hamper our operations: First, the failure to have some preference in the occupancy of the housing in order to serve personnel who are attached to these outlying establishments; and, second, the possibility that some of the personnel, upper enlisted pay grades and civilians, may not be able to meet the minimum salary requirements for occupancy. I am not familiar with the background of the Lanham Act projects, but Mr. Korink, from the Navy Department, is familiar with that phase of it and I think he can answer the committee's questions in that regard. The experience of the Navy, of course, is typical of that of the Army and Air Force. The Air Force has already made a selection and has recommended a number of projects for deletion. The Army, in accordance with the second portion of our suggestion, would have the opportunity of a second look and a suggestion to the Administrator prior to the time that the transfer is made. Mr. MONRONEY. Those projects which you mentioned, and which you want to keep, today are being operated by the Public Housing Agency for the Navy and Army and Air Force? Mr. KORINK. Yes, sir; that is correct. Mr. MONRONEY. That is, title still remains in the National Defense Establishment? Mr. KORINK. No, sir. Title remains in the Housing and Home Finance Agency, but they administer these projects through the local housing authorities with certain preference considerations in making assignments to serve us on a preference basis. Mr. MONRONEY. And any of these projects that you are interested in are not operated now as low-rent housing or subsidized housing, but are operated for Navy personnel or Army personnel by the Housing Administration? Mr. KORINK. Yes, sir. Mr. MONRONEY. And you have first claim on the quarters for military personnel; is that it? Mr. KORINK. Yes, sir. Mr. KUNKEL. I did not understand that it was that way. I thought that unless the Military Establishment took them over they were not operated that way. We have one down in Pennsylvania, and the Air Corps eventually took it over. The reason they took it over was because there was no preference for regular Air Corps personnel, or even for the civilians working at the depot. That was given as the Air Corps reason for taking it over. Mr. KORINK. Well, our request has been made. Mr. KUNKEL. What happened was that they had a veterans' preference, and they listed with the housing authority the people they wanted to get in-the enlisted personnel of the Air Corps and perhaps some of the noncommissioned officers-and then they would have to wait, and the more veterans applied the more veterans would get ahead of the people in the service; and eventually, as a result of that, the Air Corps took over the whole project and is using it now entirely for Air Corps personnel, military or civilian. |