Mr. COCHRAN. One of the basic problems that we run into in dealing with community facilities and housing in small towns in rural areas is a national state of mind which I refer to here in my statement as a "metropoliana." It's very difficult to get a lot of people to even talk to you seriously and think about towns of even 50,000, and below, and certainly, the smaller ones; and once a culture or a community or a society gets in this frame of mind the whole focus tends to go in one direction and people really forget that there's something out there that may be spoiling what they are trying to do in the direction they are looking. This is always apparent to us.

However ineptly we may have phrased it, metropoliana is here; it's the main thing which stands in the way of getting anything done. Apparently, the tacit assumption over the years has been that if people really wanted the good things of life they could go to town or make enough money out of price supports or something to become like the northern Virginia hunt country where anything less than a $40,000 home is considered a burden on the community, but it hasn't happened that way.

I won't take time to review the figures on rural need. They are spelled out in the statement. In the bills before you, something like 25 percent of the funds, is a maximum available to the nonmetropolitan areas, and yet, 60 odd percent of the substandard housing is outside the metropolitan areas and over half of the poor families are out there. None of these programs seem to address themselves adequately to that. The reason for the disproportionate need, of course, is lower income and the fact that the housing laws really have not been designed to work well in small towns and rural areas over the years.

As we take more and more cognizance of this discrimination we hope something can be done. The deficiencies run to all of the housing programs including public housing, which has provided only enough housing in rural areas to take care of 3 percent of their potential clientele in 30 years-not an outstanding record.

As to S. 2049, we have very little to say. It's mostly a bill for reshuffling the agencies and, we find nothing in there that would indiIcate that it would enable the HUD agencies to serve the small town and rural areas any better than they have been serving them, which is not well.

On the Community Development Assistance Act, ostensibly aimed at urban communities, the only trouble is that it seems to almost dignify the mal-distribution of funds for community development and other purposes, and we hope that will be given careful study before the bill is finally reported out.

Neither of the major bills run to the heart of our concern and that's title V of the Housing Act of 1949. The rural housing program as now administered by the Farmer's Home Administration suffers from three major shortcomings: inadequate grants for water and sewage, the subsidy in its housing programs do not run deep enough to reach the poor; and Congress and the White House starve the agency for administrative funds, keeping its operations at about 10 percent of what we consider the minimum effort required.

If Farmer's Home is going to make a major contribution to meeting the needs of lower income groups in rural areas, it's simply going to have a deeper subsidy. We are suggesting that Congress pick up a

basic idea from the Norwegians. Howard Birch tried very hard to get this program enacted into the law several years ago to enable Farmer's Home to make loans to people at lower income levels.

We also would like to see that applied not only to section 502 but 504 loans (loans for rehabilitating and improving older homes), and some provision made to extend this to section 515 (rental loans). If it cannot be added to section 515, Congress should remove another discriminatory thing and provide rent supplements for Farmer's Home instead of restricting them to FHA. The basic need there is to deepen the subsidies.

On the self-help housing program, Farmer's Home has finally gotten underway. Very shortly we'll be faced with a shortage of funds rather than a shortage of applications. The amount available is very limited.

We make some references in our statement to revision of procedures on the revolving land loan funds because we think they are cumbersome and are interfering with the use of the program, and that Farmer's Home should go back and borrow some ideas from OEO where the original self-help idea came through and try to improve its handling of the land loan funds.

Everywhere we talk to people in the rural areas on housing, we run into the problem of bad land titles and we have a suggestion on that. We wish that Congress would take some action to enable people who have not what you'd call a bad land title-but one poor enough that the ordinary insured lender will not lend money on it because the title insurance companies won't insure. We think that with a modest amount of money Congress could, if necessary, insure those titles while the appropriate agencies, including the legal services agencies of OEO, could take the year or 2 or 3 years that it takes to propertly clear up those land titles. Once a title is cleared the revolving insurance money could be used over and over to insure land titles for other people.

Noninsurable land titles is a fairly widespread problem, as I'm sure the Farmer's Home director from Alabama will agree.

We continue to urge that the territory and population served by Farmer's Home to be expanded. They can't operate in Guam or the trust territories, and one of our staff who consults out there says there's a terrible need for housing and no credit for taking care of it.

HUD and the USDA agreed that HUD programs, except for public housing, doesn't reach towns below 25,000 in population. We still think that that vacuum has got to be filled, and we hope it can be filled by expanding the territory on Farmer's Home.

We know there will be problems; we know there are problems in changing the 5,500 population ceiling on water and sewage, but the problem is shortage of funds. Farmer's Home shudders at having additional burdens on it when they have not been provided with adequate funds to do the jobs already assigned to it.

Another area where we see "metropoliana" is in research fundsresearch and demonstration. HUD has had a program for years; Farmer's Home hasn't. They don't even have funds to analyze the rural housing problems. Farmer's Home does not have enough money to even track that problem adequately; to point to the areas of difficulty. Congress provides USDA with the research funds, but that's broad na

tional research. It's no guide to policy for Farmer's Home and the agency is really crimped.

Imagine a professional staff in Washington of 12 people lending a billion and a half dollars a year. No wonder they tend to tighten up on restrictions because if you don't have the personnel, you tend to tighten the restrictions and this is one of the problems people have in dealing with Farmer's Home. Everywhere you look at the agency it suffers from a lack of funds and in some cases a lack of authority.

I'm sorry Senator Mondale left because he has pushed a program for HUD to let private organizations help the agency with an outreach function, section 106 (a). It's taken over 2 years to teach the HUD lawyers to read the English language, but, it's finally cleared up and some money is coming through this year. A part of that money-with an expanded appropriation should be sent over to Farmer's Home for the same purpose. It would be easier to get funds allocated to Farmer's Home than to try to get it from the agricultural appropriations subI committee under USDA. But such funds are needed; for example, for promoting the new farm labor legislation which you authorized last year. When Farmer's Home knows they don't have the staff to put a program together and make people aware of it and utilize the funds, they could fund other agencies to lend them a hand.

The CHAIRMAN. Mr. Cochran, I think we are going to have to quit. You know the rollcall is in progress, now. I've enjoyed your statement very much. I have been greatly interested in farm housing and I know something about some of the difficulties in getting an adequate housing program in rural sections.

Let me just ask you this one concluding question. In the President's proposal to reorganize the governmental departments, including the Department of Agriculture, it is proposed to move the Farmer's Home Administration, the housing part at least, over into HUD. I believe that's right. What would you think of that?

Mr. COCHRAN. Senator, the machinery that Farmer's Home has with that outreach function and the Federal people out there and the source of credit secured nationally and loaned locally, is essential and it would be disastrous to turn this program over to HUD.

The CHAIRMAN. I am glad to hear you say it because I know there have been statements from time to time from different persons that it ought to be under HUD because they had a farflung authorization, whereas, the Farmer's Home Administration is small. But there's a personal attention given to these projects and proposals by the man who represents the Farmer's Home Administration and lives in the county where the people live, and he can run out in a few mintues to see a project actually in the course of construction. I think it means a great deal. It may slow down the program, but nevertheless, I have been pleased with the housing that we have gotten under Farmer's Home Administration ever since the 1949 act when we started it.

Mr. COCHRAN. Yes, sir. I don't want to delay you, Senator, but if FHA and HUD had had a program for dealing with lower income people closer to Farmer's Home's program in the rural areas, the lowincome people in the big cities would be a lot better off. If we're going to change anything, let's move the Farmer's Home structure and procedures into the cities; not destroy it in the rural areas and turn them over to HUD.

The CHAIRMAN. Well, I said a while ago you may have heard me say that Mr. Garrett, under his leadership and under his predecessors, a tremendous, a very fine farm housing program has been running in my State. I had the pleasure about a year ago of going with the Secretary of HUD down to my home county along with Mr. Garrett, and we visited some of the farm housing under some of the later programs, and I have suggested many times that there be a coordinating program between Federal housing and Farmer's Home in which there could be worked out a program that would bring good housing to both groups.

(The complete statement of Mr. Cochran and additional informa tion follows:)

STATEMENT ON MAJOR 1971 HOUSING LEGISLATION

Committee on Banking, Housing
and Urban Affairs

CLAY L. COCHRAN, CHAIR'LAN
NATIONAL RURAL HOUSING COALITION

September 17, 1971

Mr. Chairman and Members of the Committee:

My name is Clay Cochran. I am the Chairman of the Board of the National Rural Housing Coalition. The Coalition is a voluntary membership organization, financed by membership dues and voluntary contributions and dedicated to the task of attempting to solve the problem of housing, including water and sewer for people in small towns and rural areas.1/ Organized late in 1969, the Coalition was officially launched early in 1970.

e hope,

by research and education and persuasion to raise the

problem of bad rural housing to a sufficiently high level in the public consciousness that it will compell corrective action. 2/

1/ NRHC By-laws, Article I, Section 2: "The purpose of this organization is to carry on a program of education and organization designed to provide a decent home and environment for every family or person in rural America."

2/ Our interest is not in 'saving' small towns and rural areas or turning New York City into a public park, but in providing shelter for people wherever they are, there and now.