Mr. SERVAITES. We use a proration of number of units.

Mr. JONAS. A strict proration?

Mr. SERVAITES. A strict proration in the management area. We may in one management area operate four or five properties of which one could be a title I property.

DEFERMENT OF OPERATING IMPROVEMENTS

Mr. JONAS. I notice you say: "An effort is being made in the 1961 and 1962 budgets to absorb this increased expense (pay act increase) by deferring most operating improvements at the present time." That is a strange way to absorb a pay increase, to defer necessary improvements, is it not?

Mr. SERVAITES. The standards of some of the units are not up to our standards on other properties. A great deal of improvement could be made in these units to bring them more in line with our title II program or improvements could be deferred.

Mr. JONAS. What was the amount of the pay increase, $1,000?
Mr. SERVAITES. Approximately that.

Mr. JONAS. Could you not absorb this amount by cutting off another one-third of a man or another one-fourth of a man, instead of deferring the necessary improvements?

Mr. EDWARDS. If I may explain, most of our title I properties-we have 11 areas area 6 has most of those title I properties. It also has a small number of title II properties, so when it is prorated it is higher than in some of our other areas. We have 174 units of title II under construction now that will come in that area in 1961, and that will bring down the area costs.

Mr. JONAS. Are the properties being damaged by deferring these improvements?

Mr. EDWARDS. We do not think so. Unit costs, we think, will come down in 1962 so that we will be able to do the routine maintenance work which we deferred for a year.

Mr. JONAS. That is all, Mr. Chairman.

TITLE II PROGRAM

Mr. THOMAS. Tell us about title II. First let use insert pages 16 and 17 of the justification.

(The pages referred to follow :)

TITLE II

GENERAL STATEMENT

All activities under title II of the Alley Dwelling Act are conducted under supervision of Public Housing Administration.

As of July 1, 1960, all title II dwelling units under management were placed under one annual contribution contract. Operating costs, debt service, and provisions for operating reserves are met from rental income and Federal contributions.

Development activities are initially financed by loan notes which are subsequently retired with proceeds from bonds sold to private investors. At the end of the development period, debt service on bonds and costs of operation are met from rental receipts and Federal contributions. The contributions permit the Authority to reduce rents for low-income families below cost levels.

The maximum permissible Federal contribution by contract approximates debt service on the development cost of properties. The actual contribution received annually is based upon the difference between rental income and (1) operating costs, (2) debt service, and (3) provision for operating reserves.

INCOME LIMITS FOR ADMINISTRATION AND CONTINUED OCCUPANCY

As of July 1, 1960, the income limits for admission to and continued occupancy of NCHA low-rent housing are as follows:

ANNUAL REEXAMINATION OF TENANT INCOMES

The Authority's rental program is based upon serving a true cross-section of the low income families in the District of Columbia. To insure that we house only low income families we reexamine the incomes of all tenants (except those who have been tenants for less than a year) on an annual basis. Presented herewith is the income pattern of our present tenant families, taken from our fiscal year 1960 records.

The above tabulation shows that 37 percent of our tennants have incomes at or below $1,950; while 77 percent have incomes at or below $3,300.

Families receiving public assistance constitute an appreciable number of our total tenants. The number of public assistance families is constantly changing as a result of families going on and coming off the rolls. As of June 30, 1960, there were among our tenants 1,048 families who received all or a major part of their support from the Board of Public Welfare. Those families receiving public assistance amounted to 16 percent of our total tenant population.

Mr. THOMAS. How many units do you have completed and occupied, what is the turnover on them, how many do you have under construction, when will they be completed, and what is the unit cost of the new ones? And tell us how many applications you have on hand now, how many units you are requesting for new construction, and when you expect to get some new construction.

You have 374 employees in the Housing Authority and 2 are charged to title I. That gives you 372 in title II.

What is the overall operational cost for salaries and expenses, and what is your annual contribution? It is my understanding it is around $2.5 million. Is that correct?

Mr. EDWARDS. The annual contribution is $3,102,770 at the present time.

Mr. THOMAS. $3,102,000?

Mr. EDWARDS. That is right, $3,102,770.

Mr. THOMAS. I notice you state 16 percent of your total occupancy in your title II houses are getting some type of assistance from the District of Columbia. Does that mean the Welfare Department of the District of Columbia pays the rent on these 16 percent?

Mr. SERVAITES. That is correct, Mr. Chairman.

Mr. THOMAS. Who wants to talk generally on title II?

NUMBER AND TYPE OF UNITS

Mr. SERVAITES. Mr. Chairman, we have approximately 8,000 units in the entire program, of which these 96 units under title I are a portion.

Mr. THOMAS. You have more than that. It is almost 9,100, is it not?

Mr. SERVAITES. That figure includes some in the construction stage. We have under actual construction now 174 units. They will become available for occupancy later in the year. We have on the drawing boards approximately 1,050 units which are in the hands of architects and final drawings are being prepared for advertising.

Our occupancy turnover amounts to about 75 units per month, principally in the smaller sized units. We attempt to refurbish, redecorate, these units as quickly as possible because we have a waiting list of over 5,000 families that we have been unable to accommodate. So much for the general picture, Mr. Chairman.

Mr. THOMAS. What are these units mainly, one-, two-, and threebedroom units? Do you have any four- or five-bedroom units?

Mr. SERVAITES. We have one-, two-, three-, four-, five-, and even six-bedroom units, and of late, in order to meet the demand upon us for housing larger families, we have had to accelerate the production of six-bedroom units, which we were unable to do in years past because of a cost limitation; but now these limitations have been lifted and larger units are possible.

This program is operated, as you know, under the supervision of PHA.

Mr. JONAS. Mr. Chairman, will you yield?

Mr. THOMAS. Yes.

DISTRICT OF COLUMBIA HOUSING CODE REQUIREMENTS

Mr. JONAS. You have a statute in the District that restricts the number of occupants in a bedroom. What is that?

Mr. DAVENPORT. The housing code says you must have at least 50 feet per person. Therefore, a two-person bedroom must have 100 feet.

Mr. JONAS. Regardless of whether they are babies or adults?

Mr. DAVENPORT. Yes.

Mr. JONAS. So a husband and wife with twins would have to have 200 square feet?

Mr. DAVENPORT. I think infants, a small child up to about 6 months, can sleep in the same bedroom with the parents, but after a certain age they must occupy a separate bedroom.

Mr. JONAS. Which would be better, to modify these requirements and house more people or to keep more people underhoused?

Mr. FINLEY. Mr. Chairman, we are very distressed to find we are having problems of overcrowding within the projects of the Housing Authority itself. The families are getting bigger and we have difficulty keeping up with the PHA standards as to how many people should be in a two-bedroom unit. We have held back moving families from one size unit to another in the last 2 years or so.

Mr. JONAS. The chances are that many of the 5,000 families, to which reference has been made, are living under more adverse conditions than those in the Housing Authority's units, and it might be better to be overcrowded in a good housing unit than overcrowded in substandard housing.

Mr. FINLEY. That is right. That is why about 22 years ago the Board took the position we could not move families already in Authority housing into less crowded units.

Mr. THOMAS. That code is not enforced outside the Housing Authority. The rule does not apply to private housing. It just applies to public housing. Here is a family with three or four children and they live wherever they can. The Police Department doesn't go check to see how many children are sleeping in a room?

Mr. FINLEY. There are periodic checks based principally on complaints.

Mr. THOMAS. All right, but what do they do about it when they find a family of four or five children are sleeping in one bedroom? Do they throw them out on the street?

Mr. SERVAITES. No, they are generally referred to us and we try to accommodate them.

Mr. THOMAS. I cannot imagine that rule being enforced outside of some public housing units.

Mr. JONAS. I do not think you should crowd people and not leave enough room for ventilation and so forth, but if you have a serious housing problem I should think you might consider relaxing the rule to some extent.

Mr. SERVAITES. There is something more, and that is that overcrowding is always looked upon as one of the substandard features that makes families eligible for public housing. We attempt as much as possible to limit occupancy to two people per bedroom, so that a four-bedroom unit generally will accommodate nine people, assuming there may be an infant who could share a bedroom with the parents. Mr. JONAS. Have you ever heard of college dormitory rooms with three-decker beds housing three students?

Mr. SERVAITES. Our Planning Division has been thinking of building dormitory accommodations for these very large families. However, we still have the District Code to adhere to.

OPERATING COSTS

Mr. THOMAS. What is your total operating cost?

Mr. EDWARDS. The routine costs for this fiscal year are $3,883,710. Mr. THOMAS. What does that cover?

Mr. EDWARDS. Administration, utilities, ordinary maintenance and operation, and general expense of insurance and payment in lieu of taxes and so on.

Mr. THOMAS. You are not including insurance in there, are you? Mr. EDWARDS. Yes.

Mr. THOMAS. I am talking about salaries and expenses.

Mr. EDWARDS. Administration salaries are $951,820.

Mr. THOMAS. Break down that figure, please.

Mr. EDWARDS. For nontechnical salaries, $115,000; technical salaries, $26,940.

Mr. BOLAND. That is not right, is it? Am I looking at the same table on page 10? That item of $26,940 strikes me as being legal

expense.

Mr. EDWARDS. No. Some of those salaries have increased. Oh, yes, I see. The nontechnical salaries are $569,260; technical salaries $115,000; legal expense $26,940; employment benefit contribution, $130,960; and other administration expense, $109,670.

Mr. THOMAS. Making a total of how much?

Mr. EDWARDS. $951,820.

Mr. THOMAS. That is for salaries?

Mr. EDWARDS. And employment benefit contribution and other administration expense, which are not salaries; $240,000 out of the $951,000 is not for salaries.

Mr. THOMAS. Do you charge any rent or utilities cost against your employees?

Mr. EDWARDS. That is not included in this figure. There is rent of the central office building that is included. That is about $57,000 or $58,000. That is included in the $109,000 for other administration expense.

Mr. THOMAS. And that adds up to $3 million?

Mr. EDWARDS. $3,883,000.

Mr. THOMAS. What kind of insurance do you have?

Mr. EDWARD. Fire, and extended coverage, public liability, boiler explosion, and theft, $48,000.

Mr. THOMAS. You insure all your properties against fire and theft? Mr. EDWARDS. Yes.

Mr. SERVAITES. Except for the title I projects which are not covered by any insurance.

Mr. THOMAS. Do all public housing units carry insurance, fire and tornado and so forth?

Mr. FINLEY. Yes.

Mr. THOMAS. Is that one of the prerequisites of the 1987 act?

Mr. SERVAITES. I believe it is.

Mr. EDWARDS. The $359,150 we anticipate paying the District in lieu of taxes is included in this $3 million figure.

Mr. JONAS. What is that based on? Is it a percentage of income? Mr. EDWARDS. A percentage of income less utilities.

Mr. JONAS. It is not based on appraised value?

Mr. SERVAITES. No, it is based on our shelter rent that we collect, 10 percent of our shelter rent.