(The following letter was submitted for the record by the Office of the Assistant Secretary of Defense :) Hon. BRENT SPENCE, OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE, Chairman, Committee on Banking and Currency, House of Representatives. DEAR MR. CHAIRMAN: With further reference to the testimony of Mr. John H. Arrington on H. R. 10157 before your committee on May 9, 1956, I should like to present certain information which was requested for the record and to recommend certain technical changes with regard to the pending bill on the Housing Act of 1956. In response to the committee's request for suggested language to exempt title VIII construction contracts from coverage under the Renegotiaion Act, the following is offered: "Section 106 (a) (9) of the Renegotiation Act of 1951, as amended, be amended to read as follows: '(9) any contract awarded as a result of competitive bidding for the construction of any building, structure, improvement, or facility'." With respect to the committee's request for more precise information on failure of Air Force military personnel to reenlist, the following is provided, based on data supplied by the Department of the Air Force: Of the officers whose tours of duty ended during the current fiscal year, 50 percent of the pilots and 85 percent of the nonpilots failed to remain on active duty. Of all officers who left the service during this period, 95 percent were first lieutenants. Among the airmen whose periods of enlistment ended between July 1955 and March 1956, inclusive, 65 percent or 107,300 failed to reenlist. Losses by rank were as follows: Loss experience in selected technical specialties during fiscal year 1955 (the latest available) was as follows: Personnel who retired during the periods covered are not included in the above figures. It is also recommended that H. R. 10157 be amended to make it clear that the provisions of the Miller Act (40 U. S. C. 270a) are not applicable to title VIII housing. It appears more appropriate to provide for use of the FHA dual obligee bond form for both performance and payment bonds. The cost of the FHA bond is substantially less than the cost of bonds required by the Miller Act for public works, so that the proposed amendment will serve to decrease the cost of construction and otherwise facilitate contractual relationships. Accordingly, it is suggested that the following amendment be added to the bill: "Section 403 (a) of the Housing Amendments of 1955 is amended by adding before the final sentence thereof the following: ‘Any such contract shall provide for the furnishing by the Contractor of a performance bond and a payment bond with a surety or sureties satisfactory to the Commissioner and the Secretary of Defense, or their designees, and the furnishing of such bonds shall be deemed sufficient compliance with the provisions of section 1 of the Act of August 24, 1935, and no additional bonds will be required under such section'." It is noted that S. 3855 as passed by the Senate contains the following language in section 108 (h): "The second sentence of section 406 of the Housing Amendments of 1955 is amended by inserting after the colon immediately following the first proviso the following: 'Provided further, That such plans, drawings, and specifications shall follow the principle of modular measure, in order that the housing may be built by conventional construction, on-site fabrication, or factory fabrication, which ever the successful bidder may elect, or, in the case of a negotiated contract, whichever the contracting officer may determine to be in the best interest of the Government:'." The Department of Defense supports greater use of the principle of modular dimensioning in building design and is currently undertaking exhaustive studies to determine the specific benefits which this system may produce in military construction. However, it is believed that certain provisions of the language proposed in the Senate bill would be unworkable and would severely handicap implementation of the title VIII program. First, application of the modular system to designs already underway would result in costly revisions to plans and specifications. Inasmuch as architectengineer fees in many cases already approach the maximum allowed by statute, it would not be possible to expend the additional money required to accomplish redesign. Even in cases where such additional costs might be possible, the time required for complete redesign would seriously delay the provision of urgently needed housing. Second, designation of the bidder, rather than the military, as the party to determine the construction method to be used would be inconsistent with the basic concept of competitive bidding and might result in impossible delay and confusion. In order to protect the best interest of the Government, determination of the most feasible method of construction, as well as design, must remain with the military; otherwise much time would be lost in reviewing bids based on infeasible systems. Moreover, if a number of bids involving different construction techniques and specifications were received, it might be necessary to obtain from FHA a separate appraisal and eligibility statement on each bid; this would, in effect, invalidate the FHA estimate obtained prior to bidding and result in considerable additional expense and loss of time. It is believed that the present language of section 406 of the Housing amendments of 1955 is adequate to encourage the use of prefabrication, and that the studies already being made by the military departments in the use of the modular dimensioning system will soon provide sufficient experience to show to what extent modular dimensioning can successfully be employed, and just what will be the most appropriate procedures to be followed in introducing it into the title VIII program. Accordingly, it is strongly recommended that there be no change in the present provisions of section 406 of the Housing Amendments of 1955. Although it is considered that new language on this subject is unnecessary, the following paragraph is suggested in the event the committee desires to amend the present provisions of section 406 of the Housing Amendments of 1955: "In the design of the family housing and other repetitive-type buildings in the continental United States authorized by this act, the military departments shall, to the extent deemed practicable, use the principle of modular design in order that the facility may be built by conventional construction, on-site fabrication or factory fabrication." The Bureau of the Budget has advised that it has no objection to the submission of this report. Sincerely yours, RICHARD A. BUDDEKE, Director, Legislative Programs, HOUSING ACT OF 1956 THURSDAY, MAY 10, 1956 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, The committee met at 10 a. m., Hon. Brent Spence (chairman) presiding. Present: Messrs. Spence, Brown, Rains, Barratt, O'Hara, Mrs. Sullivan, Messrs. Vanik, Talle, Kilburn, Widnall, Betts, Mumma, Nicholson, and Bass. The CHAIRMAN. The committee will be in order. We are honored today by having 2 mayors of 2 great American cities, and we are glad to have them come here and give us the benefit of their views and experience. Mr. Clerk, call the first witness. The CLERK. Mr. Chairman, the first witness is the Honorable Donald H. Mead, mayor of Syracuse, N. Y. The CHAIRMAN. Mr. Mayor, you may proceed as you please. If you have a written statement, you may read it without interruption. Mr. KILBURN. Mr. Chairman, I would like to say that coming from the northern part of New York State myself, we are especially delighted to welcome the mayor of our neighboring city of Syracuse. It is very nice of you folks to come down here and spend your time and effort on this matter. STATEMENT OF HON. DONALD H. MEAD, MAYOR OF SYRACUSE, N. Y., REPRESENTING THE AMERICAN MUNICIPAL ASSOCIATION Mr. MEAD. Thank you very much, Congressman. Mr. Chairman and members of the committee, my name is Donald Mead. I am the mayor of the city of Syracuse, N. Y., and I appear here today on behalf of the American Municipal Association which represents 12,000 municipalities throughout the United States. With me is Arthur J. Reed, director of our city's newly established office of urban renewal. I am not an expert on the technicalities of housing legislation. My testimony will be that of a mayor of a city of 220,000 people, the center of a metropolitan area which had 340,000 people at the time of the 1950 census but has since left that figure far behind. Since my last appearance before your subcommittee, we have accumulated another year of experience with the perplexing problem of blight elimination, arrest, and prevention. Our attack on our slums was started before the Housing Act of 1954 was enacted. That legislation gave us new hope and new tools with which to work. We believe the present urban renewal legislation is basically sound. It heartens us to see that the Congress has recognized the need of preventing future slums. We welcome the attempts to bring private enterprise into maximum play, based on the recognition that private owners, developers, and investors cannot be expected to redevelop or rehabilitate unless it is economically feasible for them to do so. However, in trying to utilize the housing act benefits, we and other municipalities for whom I speak have encountered difficulties which must be corrected if this program is to realize its full potential. Your committee has overwhelming evidence as to the size and gravity of the urban slum problem. We may differ on the method and the approach, but nearly all of us agree that steps be taken to preserve the Nation's tremendous investment in urban centers, and to make it possible for people to live in decent homes in wholesome neighborhoods. While we in Syracuse take great pride in the growth of our metropolitan area, we are concerned by the progressive deterioration which rings the core of our city. We are alarmed that so much of the thriving postwar development is taking place outside our corporate limits. We can no longer think narrowly in terms of artificial city lines. However, we have the disturbing conviction that much of this development belongs closer to the metropolitan area, yet is being driven elsewhere by the decay and congestion at the core. We know that there is a close relationship between the economic health of the suburbs and the economic health of the city. These and other considerations lead me to believe that the urban renewal program is one of the most vital affecting our cities. I know that mayors throughout the country share this belief. With your permission, Mr. Chairman, I would like to have the American Municipal Association's policy statement on housing made a part of the record of this hearing. The CHAIRMAN. Without objection, that may be done. (The policy statement follows:) AMERICAN MUNICIPAL ASSOCIATION NATIONAL MUNICIPAL POLICY ON HOUSING, ADOPTED AT PHILADELPHIA, NOVEMBER 1954 Whereas the need for decent homes in suitable living environments is far from being met for American families; and Whereas each year more dwellings are being added to the 10 million nonfarm units found substandard by the 1950 Census; and Whereas the private construction industry is still unable to provide decent shelter for low-income groups and a significant portion of our middle-income families; and Whereas as recognized by President Eisenhower's Advisory Committee on Government Housing Policies and Programs, local governments which function under limited taxing powers are not in a position to provide the fiscal aid necessary; and Whereas the Housing Act of 1954 ignored the Federal Government's responsibility for low-rent public housing and increased slum clearance in line with the 1949 act; and Whereas only 350,000 of the $10,000 (only 43 percent) low-rent public-housing units have been authorized in the 6 years stipulated in the act of 1949: Now, therefore, be it Resolved, That Congress be petitioned by the American Municipal Association to adopt legislation in the coming session authorizing the construction of 200,000 low-rent public housing units, the maximum permitted under the 1949 act; and be it further Resolved, That increased Federal financial aid be given to municipalities for slum clearance and redevelopment, particularly in those areas where the maximum has already been allotted under the original $500 million appropriation in the 1949 act; and be it further Resolved, That legislative steps be taken by Congress to encourage construction of new homes to meet the needs of families in the middle-income brackets ($3,000-$5,000 per year), providing, if necessary, Government aid to reduce the financing costs of the home purchaser; and be it further Resolved, That the American Municipal Association call upon State governments to supplement Federal aid in the above fields. Mr. MEAD. Before I presume to offer any suggestions for housing act amendments, let me qualify my city as a witness. In April 1950, according to United States Census criteria, we had approximately 14,000 dwelling units which were constructurally substandard in varying degrees. Thousands of others were substandard by reason of land overcrowding, mixed uses, and other factors of environmental blight. When I took office in January 1954, I was committed to a vigorous attack on our slum problem. Any doubts we may have had as to the urgency of this problem were erased within a few weeks. A series of slum fires broke out. In one of them a child was burned to death. The death of that one child was far more important than thousands of dollars of property losses. It helped waken our community to the fact that thousands of other children were living under hazardous and intolerable conditions. I appointed a strong citizens' advisory committee, and gave it the full backing of my administration. We started eliminating the most serious dwelling hazards. Then we proceeded with a systematic block-by-block inspection and enforcement program. We doubled our code-enforcement budget and staff. My advisory committee sought to stimulate voluntary cooperation of owners and residents in making our blighted neighborhoods better places to live. But we ran head-on into several major obstacles, which grew, instead of diminished, as time went on. We discovered that enforcement alone was not the answer. We could not compel a landlord to bring substandard housing up to par, if he could not afford to comply. We served notice: "Fix it up, board it up, or tear it down." Then we found that although many living units had been made more habitable, our housing situation was tighter than ever. We learned another hard fact of life. Although public housing was the only solution for 40 or 50 percent of the families displaced by enforcement, many of the families were ineligible for admittance to public housing because of family size, income or because they are classed as undesirables. Enactment of the Housing Act of 1954 found us well ahead of many other communities in meeting part of the requirements of the so-called workable program. However, our first slum clearance project, although initiated in a previous city administration soon after the passage of the act of 1949, was still stalemated. This situation was due in part to the low priority which our slum clearance program had previously been given. It also underlined |