We think that we ought to make every effort to provide assistance to these people who need assistance, and we should do it by a method which would attract private lending. Mr. MASON. That is if we can get it done. Mr. COLE. Yes, if we can get it done that way. We would be willing to look at other methods if it doesn't accomplish the purpose. Mr. RAINS. The point I make is, the section in the bill which I introduced follows the pattern of college loans and somehow I can't help but think it is just as important to get housing for elderly people as it is to get domitories, et cetera, for colleges. Mr. COLE. I think that is very true. I must say I don't approve of the present method of getting college dormitory loans, particularly the artificially low interest rate. I am for college dormitory loans. I think it is a good program, but I think this proves our point. We were doing a good job. We were making domitory loans to the colleges which needed them. We were at the same time encouraging private lending. The Congress in its wisdom decided that they would change this procedure. Now it is all becoming direct Government lending and this would happen in the program for the elderly, I think. Mr. RAINS. That is not my recollection. Mr. COLE. Prior to the amendment last year, we were providing all the need for any college that made application. There was no delay-no colleges going without loans because of the charges or because of the program which had been set up. Mr. RAINS. I would like for you to put in the record the number of loans you made during the last 2 years prior to enactment of the present college loan provision and also the number of loans that have been made since then. Mr. COLE. That is true. We will be happy to do that. I must point out to you that my point is we were making and the colleges were securing all of the college domitory loans that they needed. Mr. RAINS. Let's get ourselves together. What you are really talking about is prior to last year's amendments? Mr. COLE. That is very true. Mr. RAINS. That changes the whole conversation considerably because prior to the Government's aid and assistance to college loans, they weren't making any, were they? Mr. COLE. You mean the Government was not making any or not guaranteeing any, that is correct. Yes. (The requested information follows:) College housing program Loans approved July 1, 1951, through July 31, 1955. 180 72 Mr. RAINS. I notice, too, as I recall it, the college housing interest rate is 234, isn't it? Mr. COLE. That is right. Mr. RAINS. The provision for elderly housing which is in H. R. 10157, is 31% percent. Do you think that is more realistic? Mr. COLE. It is better. Mr. RAINS. For elderly housing than the college housing loans? Mr. COLE. I think it is better. Mr. RAINS. The subcommittee found that the people who were most interested in getting housing for elderly people were nonprofit corporations like Friends, labor unions, American Legion, and foundations. The proposals which you make in the sections of the bill which Mr. Widnall introduced, do you think that will meet the needs of those people who I am speaking of nonprofit corporations nowwho seem to be more interested in doing the work in elderly housing than any other? Mr. MASON. We developed this with the help of these people. We believe it is what they wish and what they believe will work. Mr. RAINS. I assume you read the hearings of the subcommittee? Mr. MASON. We certainly did. Mr. RAINS. That doesn't seem to be the information that we gathered. When you say you developed it in conjunction with them, who are you speaking about, the leaders of these various nonprofit organizations? Mr. MASON. Yes, sir. We have a so-called public interest group, which comes in and advises me, an advisory committee, members of the AFL-CIO, members of the various Jewish welfare organizations, and the teachers' groups, et cetera. We also have worked very closely, as I am sure your staff knows, with people who are actually trying some of these projects, such as out in Denver, Colo., at the present time. Mr. RAINS. Another thing that impressed me with your presentation a moment ago was that you seemed inclined to make the loans for the elderly under section 207, is that correct? Mr. MASON. That is correct. That is, we have both provisions for that and for sales housing under 203. Mr. RAINS. 270, as a matter of fact, has never done much business, it? Mr. MASON. The provisions so far as the loan is concerned, the down payment, et cetera, are different than the regular 207 terms, however. Mr. RAINS. They are more liberal than the regular 207 terms. How many units were built last year, some 2,000? Mr. MASON. I haven't the figures in front of me. They were not large. Mr. RAINS. What you seek to do, then, is to liberalize the terms of 207 on downpayment sufficiently to where you think that the FHA loans could be made to these nonprofit corporations for building of homes under title 207? Mr. MASON. Yes, sir. Mr. COLE. Mr. Rains, I am reminded with respect to our colloquy about the interest rates that the elderly housing loans for nonprofit private institutions would not necessarily be tax exempt or have the advantage of local real property tax exemption, as is the case in the college dormitory loans, so the spread between them is not quite as important as I may have indicated. Mr. RAINS The interest rate, of course, one carries the exemption for income tax and the other may not. Mr. COLE. That is correct. Mr. MASON. Mr. Rains, I believe we insured 5,000 units last year under the 207 program and we feel that much of the hesitancy of builders is due to the cost certification program that your bill and H. R. 9537, are both seeking to correct. Mr. RAINS. In Mr. Cole's statement, he mentioned the fact in public housing that it would be up to the local authority as to the type and number of units that would go to housing for the elderly. Then any local authority under that section could turn the entire units that they secured over to housing for the elderly. Is that correct? Mr. COLE. I think that would not be a realistic point of view, Mr. Rains. I don't think that would occur. Mr. RAINS. It could occur, as a matter of fact, in some places, could it not? Mr. COLE. Our answer is that it possibly could occur, but we think it would be entirely unrealistic to suggest that it would occur. any event, it could occur only as to those units suitable to the needs of the elderly. Mr. RAINS. That would also wipe out veterans' preference and preference for people displaced by slum clearance in that section, wouldn't it? Mr. COLE. No, I don't think it would wipe it out. Mr. RAINS. If they turned it all over to housing for the elderly? Mr. COLE. Surely if they turned all over to housing for the elderly, but I don't think that would occur. A local housing authority, responsive to local needs, would not be likely to take such action. Mr. RAINS. Whatever percentage they turned over to housing for the elderly. Mr. COLE. That may be a point of argument, Mr. Rains, but that is true in any authorized amount. Also, among eligible elderly persons, a first preference would be given to displaced persons. Mr. KAINS. What I am driving at, what is the objection to specifying the number of units over and above the minimum of public housing you want and saying "this is for housing for the elderly." Mr. COLE. I wonder if we might have Mr. Slusser comment on that. Mr. RAINS. Yes, sir. Mr. COLE. Will you comment on that, Mr. Slusser? Mr. SLUSSER. The preference to the elderly person would be given on the basis of the availability of units that are suitable for them. That is, the smaller units in the projects. Mr. RAINS. I can't understand why it is that you would seek to include in the other public housing units the housing for the elderly. Why not set aside a certain number of units as a starter program and say, specifically, so many public housing units for the elderly can be built and amalgamated in the public housing program. What is the objection to that? Mr. SLUSSER. There is no objection. We are doing that in some communities. They are building units in the housing project for the elderly. That is being done in several cities at the present time. Mr. RAINS. I understand. I am talking about now writing into the law some prescription as to the number of public housing units which shall be available to housing for the elderly. Is there any serious objection to that! Mr. SLUSSER. I can see none, except, Congressman, that we are now housing the elderly as the demands are made upon us, by separate buildings and in present buildings. Mr. RAINS. You are already without any legislation at all taking elderly citizens into public housing units throughout the country; aren't you? Mr. SLUSSER. That is right. Mr. RAINS. Already? Mr. SLUSSER. That is right. Mr RAINS. How long can they stay there? As long as they live, under the present regulation? Mr. SLUSSER. Yes; as long as they are within the income limits. Mr. SLUSSER. Under present law; yes. Mr. RAINS. No single persons at all? Mr. SLUSSER. No. Single persons are not admitted. We are asking for that change in the law. Mr. RAINS. The point I was getting at, is there any serious objection to prescribing in the law specific number of units instead of just saying that the local housing authorities may build those units for housing for the elderly. I assume there would be changes in the type of construction; wouldn't there? Mr. SLUSSER. I think it would restrict the program in this sense, that in some locations the impact of the elderly may be greater than it is other places, and we would have the necessary flexibility as long as they have the right to house the elderly and we get the changes in the law that we are asking for admission of single persons and giving the elderly a preference. Vacancies in the smaller units could be used to absorb those units into the elderly portion of the program. We can reconstruct those and use them for that purpose. Mr. RAINS. In other words, you can changes the present units, you mean? Mr. SLUSSER. Yes; by some changes in the present units we can; and in some instances, there have been built specially designed buildings within a project for the elderly. Mr. RAINS. We saw some of those in Cleveland, for instance. Mr. SLUSSER. There are some in San Francisco, Nashville, Cleveland, a number of other places. Mr. RAINS. One or two other questions. I can't go into too much detail, but I want to ask Mr. Cole a question or two about the workable program. Of course, 1955 housing amendments eliminated the workable program insofar as public housing was concerned. Now, your contention is that the workable program requirement should be reinstated. Mr. COLE. Yes, Mr. Rains. It seems to me that, No. 1, the program has been carried out in a flexible manner by the agency. No. 2, it is a help to the communities, a real help to them. No. 3 is that it seems also to me that a community that asks for Federal assistance in the problem of assisting the people of the community to obtain better housing, should meet the same requirements in public housing as it meets in the FHA program or in the other program, the urban renewal program. I personally can't see any real differentiation between the programs in the overall objective of providing decent housing in decent neighborhoods. Our great desire in this program of attempting to raise the level of living for the benefit of the community, to raise the level of living on the part of everyone, is to ask the communities to recognize that they have, not only responsibility but they have many things that they can accomplish to do this, and that if they only attack it in une segment, one operation, using one of the facilities, they are not complying or not meeting all of the things which they can do to help their community. We have found in a number of instances that the mayors, the officials of the community, believe that the workable program has pointed up to the community what they can do, and they are very happy to have had the opportunity to plan to think together with all the segments of the community, to determine what this can do to help their community. I think it would be a tragic error and I underscore it, it would be a tragic error if we say now to the communities, let's return to the idea of just getting some kind of a project in your community and not looking at the community as a whole, for the benefit of all of the people involved. This is for the benefit of the people who are in the lowest income classes, as well as the middle income and somewhat higher income. Mr. RAINS. I don't think, Mr. Cole, that the Congress last year-and I know I don't in my own viewpoint share the idea that we want to break down good city planning. But to those of us who represent districts which have small cities in them, and small towns, which do not have the personnel and cannot get it, the workable program presents a great obstacle. Some of them are barely able to get the forms filled out. Now a city like New York, where you find almost as many housing specialists as you do in Washington, sure they can handle the workable program requirements, but if it is to be a nationwide program, the workable program requirements, such as ones that were in the regulations, would strangle the programs of small towns to death. That is the complaint we had, the committee had, and the Congress had before I think we could use a workable, workable program. You don't visualize the same type of a workable program of land use planning, etc., in a big city that you do in a small community, do you? Mr. COLE. Mr. Rains, definitely no. We recognize that there is a great difference between the needs of a town of 2,000, let's say, and a town of 10,000, a town of 200,000, etc. The workable program has been tailored to that differentiation in conditions. I feel very clearly that our regulations with respect to the workable program, if not now tailored to those needs, can be and are being tailored to those needs. Administratively, we must recognize that a small town such as the one that I came from, does not have city planners. We have a city attorney who has a very small retainer-not enough to pay his office rent, frankly. We have a city clerk. Some of them have city managers. It must be tailored so that the small town can comply with the seven requirements, and the seven requirements is community cooperation-well, that can be done in a small town as well as a big; that they have certain financial requirements sufficient to carry out some their operations; that they have some zoning and some codes. All towns have some zoning and some codes. In that regard, we don't say that they must have a code, or zoning or ordinances that would be the same in all of the communities. We want them to look at what the community itself can do. Mr. RAINS. I believe we have more small towns in Alabama having approved workable programs than almost any other State. I may be wrong. I think you will find that true, with the exception of the State of Georgia. Take the mayor of the city of Birmingham, who is no |