last year which we think reflect significant national trends toward improved intergroup relations.

The former Racial Relations Service was changed to Intergroup Relations Service with a corresponding change in title of personnel in this work. The change was made because the former title seemed outdated and perhaps gave the connotation of racial separateness in both thinking and performance.

A new position of specialist in intergroup relations was established to work especially in States and localities over the nation where nondiscrimination housing laws have been enacted.

By way of further implementing FHA's philosophy of full equality of opportunity, qualified intergroup-relations advisers have been promoted to other operating sections within the agency. One of them now is serving as market analyst and another as insurance-programs adviser.

Also, in this connection, FHA has given considerable attention to President Eisenhower's Government-employment program reaffirming the policy of the Government that equal opportunity in employment be afforded all qualified persons. We in FHA look upon the enforcement of this policy as a reflection of our efforts to provide equal opportunity for all, regardless of race, color, or creed.

Employment of members of minority groups has had steady increase in FHA in the last 4 or 5 years. Our field offices report that members of various minority groups are serving in such technical positions as appraisers, loan examiners, attorney advisers, architects, construction examiners, and chief closing clerks in several programs.

In conclusion, we would like to point to the fact that the changing national scene necessarily requires continuing examination of certain phases of FHA operations in order to assure their most effective use. In this regard, and especially pertinent to the availability of housing and home financing to members of minority groups, we spent considerable time and effort during 1957-58 in examination of our program benefits along three important lines:

1. FHA's appraising techniques as they relate to race.

2. Downpayment requirements, aimed at effecting a larger volume of participation of racial minorities with medium and lower-than-medium incomes.

3. Policies and procedures regarding secondary earnings in mortgage-credit examination.

The results of this Administration's efforts in all three of these areas represent a significant milestone in the march toward a fuller supply of decent housing available to minority groups.

We are drafting further correspondence to all FHA directors, urging them to take all possible steps to increase the supply of good housing for minority groups.

We are convinced that sound progress in the intergroup-relations field will depend increasingly on education and understanding. FHA is stepping up its program in intergroup relations through some reorganization along functional lines and some augmentation of staff. Major aspects of this reorganization will, of course, have greatest impact in communities with antibias housing legislation and in urban renewal, especially the section 221 relocation program. We can assure this Commission that in this connection we will continue to encourage the production of FHA-insured open-occupancy housing.

Chairman HANNAH. Thank you very much, Mr. Snowden.

Mr. MASON. Mr. Chairman, Dr. Snowden has told you about the private-industry approach. The Federal Housing Administration, that agency of government whose services are used by individuals, is paid for by them. This agency accumulates each year added reserves of upward of $100 million, so it is an agency which depends upon the people it serves for its expenses.

We now have the other side of this picture, Mr. Sadler, who is the adviser and Director of the Intergroup Relations Service of the Public Housing Administration. He will tell you about his program.

TESTIMONY OF PHILIP G. SADLER, DIRECTOR OF INTERGROUP RELATIONS, PUBLIC HOUSING ADMINISTRATION

Mr. SADLER. Mr. Chairman and members of the Commission, I am Philip G. Sadler, Director of Intergroup Relations for the Public Housing Administration. I consider it a privilege to appear before the Commission to assist in your considerations of Federal Government housing programs.

Public housing first came about as a sort of byproduct of a madework program back in 1934. This more or less experimental program showed there was a real need for public housing as a program, in itself, and in 1937 the first Public Housing Act was passed. You will remember there were many thousands of people in this country of ours who did not live in decent homes and could not afford them. The Federal Government recognized the fact that it had responsibility to provide housing for this segment of our population.

Public Law 412, enacted by the 75th Congress, provided the legislative impetus to a broad program designed to combat urban blight and slums and provide decent, safe, and sanitary dwellings for families in the low-income groups. To carry out this program, Congress created the U.S. Housing Authority, forerunner of the Federal Public Housing Authority and the present Public Housing Administration.

Today, the Public Housing Administration provides assistance to local housing authorities in the development, financing, construction, and operation of their low-rent homes. The program, however, is a local one. Public housing may be developed only where

(1) the State legislature has enacted enabling legislation providing for the establishment of a local housing authority;

(2) the local government has established such an authority; (3) the housing authority has demonstrated a need for lowrent housing units; and

(4) a formal application, initiated by the housing authority and approved by the local governing body, has been submitted for the needed units.

An explanation of the organization of a local housing authority is attached as exhibit A, and a more detailed description of PHA, “Current Work," is attached as exhibit B.1

Public housing serves a real need. It helps American families with substandard incomes have decent housing and build toward the future. It is the force that many times helps the family stricken by illness or death of the wage earner. Public housing also helps the aging and those who cannot earn an economic wage. In a country as large as ours we must have a program of housing that provides for people who for one reason or another cannot pay an economic

rent.

Not only is this Government's responsibility, but it is an investment that pays dividends in making better citizens.

Thousands of families have been moved from dilapidated housing, the only kind they could afford, into clean, new, standard housing which, paradoxically, they can afford, thanks to public housing. And I can assure you that the agency is constantly at work attempting to improve its operations.

Let me tell you of some of the areas in which we are making real progress. Particularly in large metropolitan cities, housing projects have tended to be many-storied and to cover great areas of land. This is because of the scarcity of vacant land and the desire of local authorities to clear sprawling slums, replacing the slums with public housing. Although the purpose has been accomplished, the resulting project may look more like an institution than good housing.

To get away from this institutionalized appearance, the ideas of scattered sites and rehabilitation of existing housing have recently come to the fore. Instead of using one large site for a project, some local authorities are clearing out substandard housing on several small sites in their communities and replacing them with units of public housing. This housing thus becomes a part of the community, not apart from it. Other localities are contemplating the rehabilitation

1 Exhibits referred to are printed in the appendix.

of blighted but salvable existing housing for use as low-rent public housing.

In Cedartown, Ga., a pilot project was developed utilizing scattered vacant sites and since then an increasing number of localities have planned for scattering their units. Philadelphia, Pa., is an example of a locality planning to purchase and improve existing housing to fill its low-rent need.

As to site selection, in which there is also real progress, let me make it clear at once that the local housing authority makes the selection and feels that it has good reason for the site or sites it chooses. PHA views the authority's choice and checks it for certain technical requirements which are spelled out in our manual, section 205.1. The sites are not always what others might consider the best possible sites, but they are considered by the local authorities to be the best available sites. PHA, itself, does not always agree that they are the best possible sites, but if they meet the requirements it has no basis for disapproval. It must be remembered that this is a local program, in which the local housing authority makes its own plans, selects its own sites, constructs and manages its own projects. PHA feels that it was the intent of the enabling legislation that it make only broad general requirements and that it not attempt to dictate to the localities. We are getting better sites, I believe, through experience and leadership.

PHA has an Intergroup Relations Service which works with the local housing authorities to the end that minority groups share equitably in the benefits of the public housing programs. The responsibility is carried out by a central-office staff under the Management Division, and by an intergroup-relations officer in six of the seven PHA regional offices. The Service assists in the formulation of policy and procedure with respect to minority-group participation. The scope of its responsibility and work includes not only policy but the actual review of operations. In addition, it exerts a force of leadership to improve housing conditions for all.

PHA's official racial policy is embodied mainly in two manual sections, copies of which are attached as exhibits C and D. In addition, racial considerations are pointed up in numerous other manual releases.2

Our racial policy requires that the local housing authority in the provision of housing units assures equitable treatment of all races in the eligible market. As of March 31, 1959, Negroes occupied 45.5 percent of the total low-rent units. (Table 2 of the Statistics Branch release 200.0 as of that date, is attached as exhibit E.)3

2 See appendix.

3 Ibid.

In the very early days of public housing, a formula was devised and adopted to insure the equitable employment of Negroes in the construction of projects, and this formula has been in use ever since.

In this agency, implementation of the procedures has been handled by a professional in the Intergroup Relations Office. When the President's Committee on Government Contracts was established, we believe it was found that this agency was the only one with established procedures and operations in this field.

The procedure has worked well, and reports show that it has, in fact, minimized discrimination against Negro construction workers. In addition to construction labor, Negroes are employed by local housing authorities in central offices and on projects, and a number of Negroes are members of local housing authorities and/or advisory committees.

As to open occupancy, the decision, like others I have cited, is up to the local housing authority. When a locality decides on open occupancy, PHA offers every assistance. Results of our leadership in this field are shown in the attached document, "Open Occupancy in Public Housing" (exhibit F, attached). Annually, we issue a compilation called "Trends Toward Open Occupancy" (exhibit G, attached). Even if a locality decides on projects separated by race, we require that there be equity.

As of March 31, 1958, 385 of 1,964 public housing projects were integrated. Eleven of 42 States with federally-aided public housing had nondiscrimination laws governing public housing and in 19 other States some localities had open-occupancy policies in public housing. In all, 310 of 879 localities had such open-occupancy policies and/or practices. The copy of "Trends," attached, gives details as to these localities, their policies, practices, and projects, along with several comparative tables.

We believe we are making real progress-progress that is gaining

momentum.

Chairman HANNAH. Thank you very much, Mr. Sadler.

Mr. MASON. Mr. Chairman, may we proceed with Commissioner Steiner, of the Urban Renewal Administration?

TESTIMONY OF RICHARD L. STEINER, COMMISSIONER, URBAN RENEWAL ADMINISTRATION, HOUSING AND HOME FINANCE AGENCY

Mr. STEINER. Mr. Chairman and Members of the Commission; I very much appreciate the opportunity to appear this afternoon and talk with you regarding the Urban Renewal Administration's program.

See appendix.