TABLE III.-Amount of housing subject to disposition, by State, as of Dec. 31, 1948

1 Includes temporary and stop-gap units in

inactive

management.

2 Between Dec. 31, 1948, and Mar. 31, 1949, an additional 6,840 units have been transferred to educational institutions under the McGregor Act.

TABLE IV.-Relinquishments and transfers to educational institutions under the McGregor Act (Pnblic Law 796, 80th Cong.), as of Mar. 31, 1949

Mr. FOLEY. Title II of H. R. 5631 addresses itself to the problem of disposing of war and veterans' housing. This title covers disposition of temporary housing, transfer of certain permanent housing for low-rent use, and the sale of the balance of the permanent housing. It seeks to provide feasible methods by which the Government may get out of the business of operating, managing, or supervising such housing at the earliest practicable date..

In my judgment, it would provide an equitable and practicable program for the disposition of this housing with a great reduction of the sort of delays and difficulties thus far encountered. It recognizes a fundamental principle in the Federal Government's housing policy -that, to the fullest extent possible, decisions involving the local housing supply should be made by the communities affected. The bill, accordingly, provides that the initial decision as to whether temporary housing should be removed or continued in housing or any other use is to be made by the governing body of the municipality or county in which the housing is located. Similarly, the decision of such governing body is required prior to the transfer of any permanent war housing for low-rent use, if authorized by Congress.

Proposed legislation, in many respects similar to the provisions of this title regarding temporary housing, was submitted at the last session of the Congress. However, legislation enacted last year was limited to veterans' reuse housing on land owned or controlled by educational institutions and for which contracts had been entered into with such institutions.

The housing under our jurisdiction to which this bill is applicable is of two main classes-war housing and veterans' reuse housing.

The war housing was provided by the Federal Government for defense and war workers, under the authority of the Lanham Act and related statutes, during the period from 1940 to 1945. Since the cessation of hostilities it has been made available to veterans and servicemen and their families as vacancies occurred.

The veterans' reuse housing, on the other hand, was provided immediately following the war under the authority of title V of the Lanham Act. For the most part, this housing was produced through the moving and conversion of temporary war housing and barracks buildings either by the Federal Government or by the municipalities, educational institutions, and nonprofit organizations to which they were made available. With a few exceptions neither the sites on which this housing is located nor the housing itself is owned by the Government. On the contrary, they are owned by cities and other municipalities, educational institutions, and nonprofit organi

zations. In those cases where the local bodies were required to expend local funds to a substantial extent, the only substantial obligations of such bodies to the Federal Government are contractual obligations to rent the dwellings to eligible veterans and to remove them in accordance with section 313 of the Lanham Act. In other cases, the local bodies have additional contractual obligations requiring them to pay to the Government net revenues derived from such housing.

Table I shows the amount of the housing involved in this title. It shows that a total of nearly 467,000 units of all types are affected. Of the 339,000 remaining units of war housing, 142,500 are now classified as of permanent character and about 196,500 are classified as temporary. There are approximately 127,500 units of veterans' reuse housing remaining in this program. As table III shows, the housing remaining in these programs and to be disposed of is located in every State of the Union, in each of the Territories, and in Puerto Rico and the District of Columbia.

As a result of the enactment of Public Law 796 by the last Congress, there have already been relinquished and transferred to educational institutions a total of 1,054 veterans' reuse projects consisting of nearly 123,000 units. Table IV contains the statistics with respect to the disposition accomplished by the Agency under the so-called McGregor Act.

Basic information as to the cost of the housing is also shown in table I. The cost to the Federal Government in providing war housing amounted to $1,702,100,000. About $253,000,000 has been returned to the Government from this housing in the form of net income, proceeds of disposition, and other proceeds. Approximately $1,166,000,000 was expended by the Government for the remaining war housing and about $297,600,000 for the remaining veterans' housing. Thus, all of the housing to be disposed of represents a total capital expenditure by the Government of $1,463,800,000. Of course, this housing was provided as a part of the war effort and it was understood that a large part of its cost, particularly expenditures for temporary housing, would not be recovered by the Government. Expenses of providing this housing were considered in the same light as other expenses incurred at the time-for guns, tanks, and other war material-as a part of the total cost of the war.

In any consideration of housing disposition, the occupancy situation is particularly important. Substantially all of the veterans' reuse housing is occupied. Occupants of this housing are limited to veterans and servicemen and their families. The war housing is also almost completely occupied and more than 60 percent of the tenants are veterans and servicemen. The percentage of occupancy of dwell, ing units in war housing by veterans and servicemen has, of coursesteadily increased, since preference is given to them in filling all vacancies.

Section 313 of the Lanham Act requires the removal of all temporary housing units of both war and veterans' reuse housing as soon as practicable and in the public interest, but not later than January 1, 1950, with the exception only of such housing as the Administrator, after consultation with the local communities, finds to be still needed in the orderly demobilization of the war effort. All such exceptions must be reexamined annually and reported to the Congress. As you

may remember, the removal date was extended last year from July 25, 1949, to January 1, 1950.

Section 313 was enacted to prevent the extended use of temporary housing which might be unacceptable to the local community for other than emergency use, and which, if permitted to remain, might adversely affect property values in the area in which it is located. We believe this objective still to be desirable. As you know, in the design and construction of this housing bare minimum standards were followed, not only because of the relatively short contemplated use, but also to permit speedy construction, to conserve critically scarce materials and manpower, and to reduce expenditures. As a result, while the temporary housing meets minimum standards for temporary emergency use, it does not in most cases comply with local building regulations and some of it is rapidly deteriorating.

However, most of the remaining temporary housing is located in areas where there is still an acute housing shortage and where the percentage of occupancy, as I have already indicated, is still very high. Accordingly, it does not appear possible to remove any substantial volume of this remaining temporary housing by January 1, 1950, without resort to large-scale evictions and serious consequences to the municipalities and educational institutions where the housing is located. It may also be noted that some communities are very desirous that the housing remain for an indefinite period.

On the basis of continued need we have no doubt that most of the temporary housing could be continued in use under the authorized exceptions to the present removal requirements of the Lanham Act. However, we do not believe that it would be advisable to permit its continued use through this method. Under such a procedure, the exceptions would become the rule and a great administrative burden would be involved in examining and reexamining specific local conditions and housing needs in the many communities in which the housing is located. More important, the necessity for annual determinations as to removal, and the consequent indefiniteness of the life of the housing would not permit the owner, whether the Federal Government or a municipality or educational institution, to properly plan for the economical maintenance and repair of the structures. Because of the relatively short life for which the housing was constructed and the fact that it has already been used for 6 or 7 years, much of it is now in need of extensive repairs or will be in the near future.

The further deferment or postponement of the removal date specified in section 313 of the Lanham Act would not meet this latter objection. The only sound solution to this problem would appear to lie in making possible an early determination in each case as to whether the housing should be removed and, if so, when. Such determinations must be based on factors of local need and local acceptability, both of which vary from community to community. The local governing body should, therefore, have the basic responsibility in each case for deciding these purely local questions.

We also believe that the municipalities and educational institutions should, where the need for housing exists, themselves assume responsibility for meeting this need by taking over and operating the temporary housing and by removing it when the community determines that it should be removed. This is the general approach taken by title II of H. R. 5631 with respect to temporary housing.

This title would authorize the transfer of all the Government's rights in the temporary structures, without reimbursement, to munici palities, or local housing authorities, or, under certain conditions, to educational institutions or States, counties, to other local public agencies or nonprofit organizations, provided the transferee pays the cost to the Government of any federally owned land involved. Payment for such land could be made over a period of years. Certain representations would be required of the transferee in each case as to its intentions with respect to the use of the property.

Transfer of these structures without reimbursement would, of course, involve a loss in net revenues to the Government. For the fiscal year 1949 the net revenues from this temporary housing as shown in table II are estimated to be about $28,000,000. Accordingly, if all of this temporary housing were transferred under the bill, the maximum loss for the first full year thereafter would be in the neighborhood of this figure. However, several considerations must be noted in this connection. First, as the housing is of a temporary character, municipalities and educational institutions cannot be expected in most cases to take it over unless they have some assurance of revenues sufficient to defray the cost of managing, and eventually removing, the projects. Net revenues may decline in subsequent years as a result of the increasing maintenance and repair costs which may be expected because of the temporary character of the housing. Whether the housing is removed by the Government or by a transferee under the bill, the salvage may possibly be insufficient to pay removal costs. In this event, the excess cost of salvage would reduce any net returns from operation of the housing. As soon as the transfers are completed, of course, the Government would not be involved in the problem of the removal of such housing, and the administrative costs of the Government in connection with temporary housing will be reduced.

While we might hope that under these provisions the responsibility for substantially all of the temporary housing would be transferred from Federal to local control, as a practical matter we realize that there will undoubtedly be some volume of this housing which will remain under the jurisdiction of the Housing Agency. In some cases its transfer may not be requested. In others, the requesting agency may not be able to meet conditions to the transfer, such as land acquisition. In still other cases, land tenure or other difficulties might make the transfer impracticable.

In some of these situations, while the municipality might not itself be able or desirous of taking transfer of a housing project, it would be willing to have it remain in place for continued use. To care for such cases, provision is made in the bill that the Agency may sell such housing for housing or nonhousing use where the governing body of the municipality or county adopts a resolution conditionally or unconditionally approving such disposition.

Even with its provisions for transfer and sale, the title recognizes that some temporary housing may remain under the jurisdiction of the Housing Agency and may, because of local need and continued high occupancy, have to be continued in use beyond the present removal date of January 1, 1950. It is obvious that compliance with this removal date in such cases would mean large-scale evictions and serious difficulties. Accordingly, to assure the removal of any such housing as soon as practicable and without serious impact upon the