70 cities in the summer of 1946 disclosed that, in most cities, between 25 and 40 percent of married veterans are without homes of their own. The difficulties of veterans in the search for decent shelter for their families as an alternative to living in rented rooms, hotels, and tourist camps, or doubled up with in-laws or others, are typical in most American communities today. Their difficulties have been further compounded by the low level of the incomes of most veterans in relation to the present prices of both existing and newly constructed housing.

At the start of 1947, there were about 2,200,000 married couples in nonfarm areas living as extra families doubled up in homes with other families, and about 300,000 married couples were living in hotels, rooming houses, tourist camps, and similar places. The net number of new families which will be formed during 1947 is estimated at about 500,000. Even allowing for the most optimistic estimates as to the number of dwellings which will be completed during 1947, it is obvious that at the end of the year more than 2,000,000 families will still be in need of homes of their own.

In addition to this numerical shortage, millions of American families, veterans and nonveterans alike, are compelled, for reasons wholly beyond their control, to live in substandard housing and in slums and blighted areas. In the aggregate, the volume of house construction has for decades been so small in relation to the housing needs of our people that practically all of our housing supply has had to be kept in use. Consequently, we have never been able to replace any substantial amount of existing housing that becomes inadequate. A substantial portion of our existing housing supply is substandard, and slums and blighted areas have spread to an alarming extent. Despite some slight decrease in the number of substandard urban dwellings between 1940 and 1945, it is generally conceded that a minimum of 6,000,000 houses in nonfarm areas should be torn down and replaced. The provision of an adequate supply of decent housing for the American people involves a twofold task. The current critical housing shortage must be overcome, and new house construction maintained in a volume sufficient to accommodate the annual net increase in the number of new families. At the same time our whole housing supply must be raised to levels of quality and decency compatible with American standards of living, through the rehabilitation of substandard dwellings where economically feasible, large-scale elimination of slums and blighted areas, and the provision of decent housing for families who live in those areas and at prices they can afford to pay.

It is clear that home construction in urban and rural areas at an average rate of 1,500,000 houses a year for a sustained period will therefore be required. Both the Subcommittee on Housing and Urban Redevelopment of the Special Senate Committee on Postwar Economic Policy and Planning, and the Senate Banking and Currency Committee of the Seventy-ninth Congress, agreed on an objective of average construction of about 1,500,000 houses a year during the first postwar decade, including about 1,250,000 houses a year in nonfarm areas and about 250,000 in farm areas. There are numerous estimates from other sources, both governmental and private, which give general support to this view of the dimensions of an adequate program of house construction. The Federal Reserve Board has estimated a need for between 1,200,000 and 1,500,000 new nonfarm dwellings annually.

Mr. J. Frederic Dewhurst, of the Twentieth Century Fund, in the hearings before the Senate Special Committee to Study and Survey the Problems of Small Business Enterprises, has estimated that 19,500,000 nonfarm dwellings should be built during the 15-year period 1945 to 1960-an average of 1,300,000 per year.

The magnitude of the housing job which must be done is emphasized by comparison with the country's past performance in housing construction. In the years 1920-29, representing the decade of greatest home-building activity, nonfarm residential construction averaged 703,000 units a year, reaching a peak of 937,000 units in 1925. Between 1930 and 1939, construction averaged only 273,000 units a year. In the immediate prewar period, the nearest approach to the all-time high of 937,000 dwellings started in 1925, was in 1941, when 715,000 dwellings were started.

The committee is convinced that we must take the measures which are necessary not only to meet the housing needs of our expanding population, but also to replace the backlog of bad housing within the foreseeable future. The committee is convinced that we cannot safely face the difficult years to come with the burden of hardship and discontent which unsatisfactory housing imposes upon the people and that these conditions can no longer be accepted as unavoidable.

III. BACKGROUND OF THE BILL

The committee calls attention to the fact that the preparation of the bill was preceded by detailed investigations and extensive hearings by committees of the Senate, and that every opportunity has been given for full discussion of the problem and for the presentation of every side of the question by every affected interest.

The bill has its origin in a Senate resolution introduced during the Seventy-eighth Congress which called for the establishment of a special committee composed of members from the Banking and Currency and Education and Labor Committees-the committees which at that time had jurisdiction over housing matters. This resolution provided that the special committee should investigate every phase of the housing problem and the housing activities of the Federal Government and prepare a comprehensive postwar program, with special reference to the encouragement of home ownership, the elimination of slums and blighted areas, and the extent of the necessity of federally subsidized housing for low-income families.

After this resolution had been favorably reported to the Senate, the Senate Special Committee on Postwar Economic Policy and Planning was established, and a subcommittee was established to make the housing investigation and report called for by the earlier resolution. This subcommittee was headed by the senior Senator from Ohio [Mr. Taft], with representation from the Committee on Banking and Currency and the Committee on Education and Labor. In 1944 this subcommittee examined every aspect of the housing problem, and communicated with the major organizations concerned with housing, from the financing, construction, management, or consumer standpoint. In 1945, extensive hearings were held by the subcommittee and testimony was presented by every source of informed opinion. In August of 1945, the subcommittee issued its report setting forth its recommendations for the comprehensive post

war housing program required to meet the housing needs of the country.

On the basis of these studies and investigations and the recommendations of the subcommittee, and after many meetings to reconcile specific methods in the search for those best suited to accomplish the desired objectives, S. 1592, a comprehensive housing bill similar to S. 866, was introduced in November of 1945, under the joint sponsorship of Senators Wagner, Ellender, and Taft. The Senate Committee on Banking and Currency conducted hearings on that bill for a period of several months. After further consideration by a subcommittee, it was taken up by the full committee, reported to the Senate, and passed. Before the House had completed hearings on the bill, the Seventy-ninth Congress adjourned.

During the early part of the Eightieth Congress, S. 866 was introduced by the same three cosponsors and is now being favorably reported to the Senate without amendment.

IV. GENERAL PURPOSE OF THE BILL

The general purpose of the bill is to establish by congressionar action a consistent housing policy on the part of the Government, to provide for the coordination of the housing agencies and activities of the Government and to improve existing statutory tools, so as to provide effectively for the housing needs of the Nation.

This bill gives attention at every stage to the needs of the veteran and at the same time avoids the mistakes of hasty and temporary action. It gives the fullest practicable assistance to private enterprise in filling the maximum housing need within its capacity, and it brings public housing into play for only a minor but important proportion of the need which private enterprise clearly has not met and cannot be expected to meet.

The bill seeks to create the favorable conditioning factors under which the objective of the construction of 1,500,000 homes a year can be accomplished, with maximum reliance upon private enterpise and local initiative. It would do this by providing for the coordination of the housing functions of the Government through a single agency; by authorizing a program of technical housing research to aid industry in progressively reducing the costs of housing; by perfecting the existing aids to private home financing administered by the Federal Home Loan Bank Administration and the Federal Housing Administration; by providing special supplemental systems of FHA mortgage insurance for families of lower income; by extending the principle of FHA insurance to direct investments in rental housing; and by extending aid to cities for the assembly and preparation of land in slums and blighted areas for redevelopment. At the same time, it recognizes that there are families in the lowest income group for whom adequate shelter in new or existing housing cannot be provided by private enterprise, and therefore authorizes a carefully restricted extension of the program of aid to localities for low-rent public housing for such families. Provision is made for a program of farm housing through assistance by the Secretary of Agriculture and an adaptation of the urban low-rent public housing program to provide similar housing for rural families of low income not living on farms.

V. COORDINATION OF GOVERNMENT HOUSING ACTIVITIES

The attainment of satisfactory progress in providing better housing conditions can best be achieved if all the housing activities of the Govérnment are made subject to a common national policy and there is an effective grouping of such activities. This has been the considered conclusion of previous congressional committees, and it is the considered conclusion of this committee also. There must be a central agency of the Government to whom the President and the Congress can look to appraise national needs in housing and the progress being made toward meeting these needs; to insure the consistent execution of the policies established by the Congress with respect to housing; to eliminate duplication and overlapping of activity by the various Government agencies operating in the housing field, and prevent their working at cross purposes; and to report to the President and the Congress the progress of the national housing program and recommend modifications which experience indicates to be desirable. A central agency of the Government is essential also for the appraisal and carrying out of the research necessary to housing progress, particularly with respect to the all-important objective of reduction of housing costs.

Admittedly, several fairly distinct approaches might reasonably be taken to achieve this end, involving variations in administrative organization and operating techniques. The plan of this bill is to provide for a National Housing Commission composed of an Administrator (with an administrative staff), and a Coordinating Council composed of the Administrator, the heads of the Federal Home Loan Bank Administration, the Federal Housing Administration, and the Federal Public Housing Authority, and representatives of the Treasury Department, the Department of Agriculture, the Veterans' Administration, the Reconstruction Finance Corporation, and any other Federal agencies that the President may designate. The Coordinating Council, which would be an advisory body, would provide the means for working out harmonious relationships with respect to the housing functions of the participating agencies.

It would be the function and responsibility of the Administrator to develop, with the active advice and assistance of the Coordinating Council, coordinated housing policies and programs for application by the Federal departments and agencies to the execution of the housing functions vested in them, to interpret general policies and seek to resolve differences or disagreements that may arise with respect to housing functions and activities administered in the agencies represented on the Coordinating Council, and to report to the President and to the Congress on the progress being made toward meeting national housing needs and recommend legislation necessary or desirable in the furtherance of the national housing objective and policy established by the bill.

Each agency represented on the Coordinating Council is specifically charged with the duty to cooperate actively in the work of the National Housing Commission, and to coordinate and administer its housing programs consistently with the general housing policies and programs developed by the Administrator under the bill and consistent with its other responsibilities and policies established by law.

The bill recognizes that there are to be no directive controls or detailed administrative supervision by the Administrator over the agencies represented on the Coordinating Council, who are instead to have full operating responsibility for the functions and activities (including budgetary and personnel functions) relating to housing which have been vested in them by the Congress.

Under this plan, the FHLBA, FHA, and FPHA would not revert to their status, prior to Executive Order 9070, as parts of the Federal Loan and Federal Works Agencies. However, all of the direct housing functions of the Government (such as Lanham Act and other war and emergency housing) previously scattered among numerous agencies. and which were consolidated into FPHA by Executive Order 9070 would, under the bill, remain so consolidated in FPHA. Similarly, the Home Owners' Loan Corporation, the Federal Savings and Loan Insurance Corporation, and the Federal Savings and Loan and Home Loan Bank Systems would continue to be administered in the Federal Home Loan Bank Administration under a single Administrator rather than by a board, as was the case prior to Executive Order 9070.

VI. AIDS TO PRIVATE HOUSING ENTERPRISE

The main obstacle which has prevented private enterprise from sustaining a sufficiently large volume of home building has been that the monthly costs of the housing produced have been too high for a large proportion of the people who need housing. This has limited. the amount of new housing which can be sold or rented and, in consequence, has limited production. A high and sustained annual volume of house production by private enterprise depends upon the development of means and methods which will enable it to serve a much larger portion of the housing market. A main purpose of the bill, therefore, is to expand the area of the housing market in which private enterprise can operate effectively. In so doing, the bill will particularly aid veterans of moderate income, with respect to both their home ownership and rental housing needs.

Private enterprise has the capacity to build housing in much greater volume, but it cannot be expected to build what it cannot market. Unless additional aids are made available by the Government which will make possible reductions in the monthly costs at which housing produced by private enterprise can be made available to families of moderate income, a high volume of home construction cannot be sustained except for relatively short periods of time. The whole history of home-building activity testifies to this essential fact.

Specifically, the bill would provide the following additional aids to make it possible for private enterprise to serve much more of the housing need than it has been able to serve in the past, and would thus aid in assuring a high and stable volume of house production by private enterprise:

(1) To assist in progressively reducing housing costs, and in making available data on national housing needs, demand, and supply, the bill provides for a program of technical housing research and studies, and for technical advice and guidance to communities for local housing studies and surveys.

(2) The bill strengthens the existing facilities of the Federal Home Loan Bank Administration and the Federal Housing Administration to enable them to serve moderate-income families more effectively.