MAINTENANCE COSTS Mr. RHODES. I notice that you do not have anything in your list of expenditures here for janitorial service, but we have already covered that. However, do you have anything in here for other than maintenance and operations? In other words, do you have anything for major repairs, renovations and that sort of thing? Mr. EDWARDS. Yes; that is nonroutine. In the submitted material you are supplied with the figure for nonroutine, $399,380 for fiscal year 1961. That has been increased to a figure of $514,530. That is all it is at the present time for this fiscal year. Mr. SERVAITES. And, perhaps, I ought to explain there, sir, that this increase is due to the fact that we are in the midst of an accelerated maintenance program, in compliance with the Executive order of the President, to be used as an antirecession device. So, this is work that would have been planned 2 or 3 years hence but we are now going to accomplish it this year. Mr. RHODES. What is the average life of these units? Mr. SERVAITES. The average life of the housing units? Mr. SERVAITES. That is difficult to answer because it depends upon the degree of maintenance which you give them. Mr. RHODES. Under the degree of maintenance which you are now giving them, will these units last beyond the period for which they are financed? Mr. SERVAITES. Oh, yes; without question. Mr. RHODES. Considerably? Mr. SERVAITES. Beyond the 40-year period for which they are financed today. Mr. RHODES. A 40-year period? Mr. SERVAITES. Yes, sir. Mr. RHODES. And they will last considerably beyond that period? Mr. SERVAITES. Certainly, beyond that under normal maintenance, because most of them are durable brick structures. BREAKDOWN OF EMPLOYMENT Mr. RHODES. Looking at page 10 of your justifications, with reference to two items under routine administration: One item is nontechnical salaries. Could you furnish us a breakdown of this particular item? Mr. SERVAITES. Yes, we could. Mr. RHODES. In other words, furnish us the green sheets for this particular item. (The information requested follows:) NATIONAL CAPITAL HOUSING AUTHORITY Detail on personal services per budget revised Feb. 16, 1961, fiscal year ending June 30, 1961 NOTE. Temporary employees engaged in nonruotine maintenance are not included in these estimates LEGAL EXPENSES Mr. RHODES. The other item has to do with legal expense in the amount of practically $27,000. What requires legal expense of this magnitude? Mr. SERVAITES. We have a going problem in dealing with tenants who are delinquent and do not pay. This represents considerable legal activity in the area of evicting tenants and in handling collections. Mr. RHODES. Of course, you have an item under "General expense" known as collection losses, which I assumed took care of that?" Mr. SERVAITES. The collection losses as shown are those which we will write off as being uncollectible. Mr. RHODES. I assume that you do your accounting on an accrual basis and you clear your revenues with all the rent for the units which are rented and then charge off actually that rental which is not collectible; is that correct? Mr. HASKELL. That is correct. Mr. RHODES. So, the legal expense is mainly involved in, say, a service of rent collection from tenants or eviction of those who do not pay? Mr. SERVAITES. That is a great part of it. The other activity lies in the field of acquisition of properties, appraisals and contracts as we go into development, and negotiation of financing, insurance, and major personal service contracts? Mr. THOMAS. Does he have his own legal staff or does he hire someone to assist from the standpoint of legal services? Mr. SERVAITES. No; we have our own legal staff, because of the recurring nature of the work. Mr. RHODES. How many lawyers do you have? Will you break this legal expense item down for us? Mr. SERVAITES. We have actually two lawyers. Mr. RHODES. Is this item of $26,940 all for salaries? Mr. SERVAITES. That is right. TAX COSTS Mr. RHODES. Under "General expense" you have an item called "Pilot" of $304,150. Mr. SERVAITES. That is the payment in lieu of taxes which we make to the District. It is the 10-percent item which we spoke of earlier. Mr. RHODES. Do you have any idea as to how this payment would compare with the payment which you would make if you computed the payment on the basis of the appraised value of this property, and from that figure the tax at the ad valorem rate? Mr. SERVAITES. Yes; we could do that. Mr. HASKELL. Our payment in lieu of taxes is about 38 percent to 40 percent of the full tax. Mr. RHODES. Is this figure negotiated with the District government? Mr. HASKELL. No; it is in accordance with the formula prescribed by the Public Housing Administration. We subtract the actual utility cost from the gross rent and take 10 percent of the answer. Mr. BOLAND. Is this the formula used in other areas? Mr. HASKELL. Yes, sir; generally speaking. Mr. BOLAND. Generally speaking, this is true throughout all the other States where we have public housing? Mr. SERVAITES. That is correct, sir. MAINTENANCE COSTS Mr. JONAS. Is not the sum of $1.6 million in maintenance cost a high percentage of your total receipts? Your total receipts are $4 million. Mr. THOMAS. $3.8 million. Mr. JONAS. That is what percentage? That is more than one-third, is it not? Mr. SERVAITES. I would like to point out, Congressman Jonas, that these maintenance costs can be attributed to several reasons. Some of these costs spring from the nature of the families which we have to house. They are families for the most part who are unaccustomed to taking good care of property. Consequently, they make more demands upon property maintenance than a normal family would. Mr. JONAS. You mean they commit more waste and destruction than the ordinary family? Mr. SERVAITES. Yes, more waste and destruction. In addition to that we have so many children living in our properties, so many pairs of feet that destroy the planted areas. We have to replant grass and shrubbery which larger concentrations of children tend to abuse. Mr. JONAS. That is a tremendous upkeep cost. Do you know any private housing group that even approximates that figure? Mr. SERVAITES. Offhand, I am not too familiar with private experience on this. Mr. JONAS. Does anyone present know? Mr. THOMAS. About 10 percent is considered a fair maintenance figure. Take, for instance, your Government buildings throughout the District of Columbia and all over the United States, you do not even spend that on the day-to-day maintenance. Mr. RHODES. Off the record. (Discussion off the record.) Mr. JONAS. This is about one-third. Mr. SERVAITES. We are not getting the values out of this at all, if you apply private experience. GRADED RENT SYSTEM Mr. JONAS. What do you get for a unit with four people in it-a man, wife, and two children? Mr. SERVAITES. You mean by way of return of rent? Mr. JONAS. Yes; rent per month. Mr. SERVAITES. It depends upon the family income under the graded rent system. Mr. JONAS. You grade the rent according to the income of the family? Mr. SERVAITES. That is correct. Mr. THOMAS. And, not the size of the family? Mr. SERVAITES. That is correct. Mr. JONAS. Not the size of the unit? Mr. SERVAITES. Our average rent comes to about $48 a month. Mr. JONAS. That includes the furnishing of utilities, janitor service, and everything? That is the total the tenant pays? Mr. SERVAITES. This is the gross rent; this is all the tenant pays. Mr. SERVAITES. Yes, sir. PROXIMITY OF PUBLIC HOUSING TO SCHOOLS Mr. RHODES. I have one other question, Mr. Chairman. I happen to be on the District of Columbia Subcommittee of the Appropriations Committee also and, of course, we are building schools as fast as we can in the District of Columbia and my question is this: When you locate a new housing development, do you do what you can to locate it in an area where schools are adequate and will be adequate after the construction is completed? Further, do you have any liaison with the Board of Education or the government of the District so that there can be some advanced planning to take care of the school situation when the housing project is completed if present or planned facilities will be inadequate. Mr. SERVAITES. This school requirement, sir, is an important part of the feasibility determination of a project. If it is a question of moving a large group of families into an area where there are no school facilities, we would not construct that project unless proper facilities could be made available to service the children. As to liaison with the District School Board, it is a constant one. We are in check with them all the time, and in many instances they have accelerated their building program in order to fit in with our own building plans so that the two of them will come out together when they are needed We are quite cognizant of the importance of this. FUTURE PLANS FOR HOUSING DEVELOPMENTS Mr. THOMAS. What are your future plans? How many units are you going to ask for the next 2 years or the next 3 years? You have about 1,400 now that you are fixing to let contracts for. What are your future plans? Mr. SERVAITES. Our future plans have got to recognize this unmet need that lies ahead of us in the District. Precisely how many units we can develop depends in great part on the availability of sites. This is one of our serious problems in planning this type of housing for the District. A great deal of the land in the District is just not available for public housing units or public housing uses. So, we anticipate in all future development that we are going to have to face rising costs. of acquisition of land occupied now by slums that must be cleared. I am afraid we will have to play it by ear, working this thing out in conjunction with the National Capital Planning Commission as best we can in order to get sites. Mr. BOLAND. In the Southwest here you have plans for future public housing development in that area? |