dence that it can be accomplished by Government. You can be certain that the very effort to accomplish it, even though the effect may fail, will bring about profound changes in the relationship of the Government to the citizen. We are apprehensive that at the end you may find that we are without freedom-and without homes. Thus fundamentally, the policy which you determine charts the future relationships among Federal, State, and local Governments as to housing. Nowhere do we find in the policy declaration of S. 138 the recognition of States' rights, even as they are defined in the United States Housing Act of 1937. Reference to States in the policy statement and some other sections of the bill are conspicuous by their absence. As a matter of fact, one of the Nation's outstanding proponents of Federal public housing went out of his way to lambast publicly New York State Housing Commissioner Herman Stickman. Charles Abrams, author of several books and outstanding proponent of Federal public housing, said in a bylined article which appeared January 19, 1949, in the New York Post, and I quote: The New York City Housing Authority looms as the big plum in the political orchard, and the politician who dominates the housing authority controls the city's political destiny. He continued: Within a few years the families in housing projects will be nearly 10 percent of the city's (New York City) total, and the investment of the authority will exceed $2,000,000,000 with all this means in construction contracts, patronage, and other rewards for the worthy. Selection of sites enables carving out blocks where hostile voters are numerous and then re-tenanting the project with those who vote "right," while tenant relocation of vacant areas could change a whole neighborhood's political complexion overnight. Mr. Abrams was criticizing a bill in the New York State Legislature which would require every local housing authority to submit to the New York State Housing Authority every housing project, Federal or State, for approval. In a letter to its membership, identified as "NPHC Legislative Newsletter" (August 13, 1948) the National Public Housing Conference said that there are danger signals in a policy for Federal aid to the States and not cities for public housing, and for a policy which seeks to limit the use of public housing to welfare tenants. As a matter of fact, as I mentioned earlier, the United States Housing Act of 1937 reflects exactly that policy. We are of the firm belief that it is not the responsibility of the Federal Government to provide a home in a suitable living environment for every one of the Nation's citizens. We are of the firm conviction that the relations between local communities and their respective States, and between the States and the Federal Government would be threatened by the Federal Government dealing directly with the community. We urge extreme caution in the adoption by the Congress of any policy which will distort such existing relationships. It seems to us that policy of the Congress must first be determined before the public housing, slum clearance, and other sections of this bill have any meaning. Mr. Raymond Foley in his testimony the other day before this committee said: The Congress has from time to time enacted separately many important measures dealing with one aspect or another of the housing problem. However, there has not as yet been a declaration by the Congress of a national housing objective and a comprehensive national housing policy. Perhaps Mr. Foley actually was referring to the conflicting policies of the agencies within the Government that directly or indirectly have something to do with the housing. I am not referring to the agencies within Mr. Foley's own Housing and Home Finance Agency. As far as I know, Mr. Foley has been a good administrator. I am referring, however, to the Government finance agencies as opposed to the housing agencies. Let me illustrate the chaos and confusion within the Federal Government which, in effect, has said to builders on the one hand, "Go ahead and build at top speed," and on the other have insisted, "Don't you dare." What better ammunition could the public housing advocates, who belittle the record results, desire than a situation in which private industry does not know whether the Federal Government is for or against its efforts. Let me review statements of the two Government policies. Chairman Maple T. Harl of the Federal Deposit Insurance Corporation Board said in a June 30, 1946, report to the insured banks, and I quote: * * Although the amount of real estate owned by commercial banks is no longer large enough to give cause for concern banks should exercise great care in making real-estate loans at the present time to avoid the mistakes of earlier years which resulted in the acquisition of "other real estate." Marriner S. Eccles on November 25, 1947, in a statement before the Joint Committee on the Economic Report, as Chairman of the Board of Governors of the Federal Reserve System, recommended as a step to curb inflation: Legislation giving the Federal Reserve System such authority as may be necessary to restrict further over-all expansion of bank credit. The need for this authority would be less if Congress authorized other anti-inflationary measures * * and if stricter appraisals and less liberal credit terms were applied under the Veterans' Administration, the FHA, and the home-loan bank programs of housing finance. In a joint statement of the Federal Reserve Board, Comptroller of the Currency Preston Delano, the Federal Deposit Insurance Corporation, and the executive committee of the National Association of Supervisors of State Banks, November 24, 1947, these agencies and persons said, and I quote: Under existing conditions, however, the banks should curtail all loans either to individuals or businesses for speculation in real estate, commodities, or securities. Mr. S. R. Carpenter, secretary of the Federal Reserve Board of Governors, in a letter to Senator Tobey, then chairman of the Senate Banking and Currency Committee, enclosed a resolution of the Advisory Council of the Federal Reserve Board which said, in part, and I quote: The Council is in general agreement with the analysis of the problem stated by Mr. Eccles before the Joint Committee on the Economic Report on November 25, 1947. * * The capacity of the building industry is limited. Attempts to force building beyond that capacity by excessive loans or unsound subsidies lead to shortages of labor and materials, higher prices, and poor quality construction by speculative and unqualified builders. As recently as July 19, 1948, Mr. Harl said in a prepared news release: The continued rise in the amount of real-estate loans held by insured commercial banks and their increase in importance in the bank asset picture indicates the necessity for caution. For more than 2 years, from the top on down to the visiting bank examiners, this arm of the Government has sought to depress the financing of real estate. On the other hand we review the policies of the housing agencies to learn that in hearings in a comparable period before the Senate and House Banking and Currency Committees in 1945 and 1946, the Wagner-Ellender-Taft bill, known as the W-E-T bill, was strongly advocated by the National Housing Agency, forerunner to Housing and Home Finance Agency, the FHA, the Federal Home Loan Bank Board, and the Federal Public Housing Administration. The W-E-T bill, which sought much the same action as the present bill, S. 138, was followed by the Taft-Ellender-Wagner bill, known as the T-E-W bill. It was supoprted by the same housing agencies, among others. John Blandford, then Administrator of NHA, said, according to the record, on November 27, 1945, and I quote: The basic reason for the condition of our housing supply is economic, and any forthright approach to the housing problem ought to be an economic approach. Mr. Blandford continued: And so with the 12,600,000 units of new construction required over a 10-year period (1945-55) the nature of the need in summary follows: * The 1948 hearings on the TEW bill again brought out the convictions of those in the housing agencies to dump literally billions into a market which the Federal Reserve banks by downward pressure were trying to depress. There is no doubt in our minds that both Government groups approached their problems with great sincerity. The effect on the market was terriffic. The builder on one hand was told that unless he built houses at low cost and quickly he would have Government public housing. On the other hand the local banks, his only source of credit, told him that funds were not available for real estate. This is not an attempt, Mr. Chairman, to throw the spotlight on another faction. It is a sincere effort to bring all factors to light so that your committee might explore them in its effort to develop sound, practical, and effective housing legislation. Despite these conflicting policies, however, the private housing industry in 1948 completed a record number of housing units, and since 1940 has increased the Nation's nonfarm housing supply by more than 22 percent. But for a complete story on the housing picture, may I present Mr. Gerholz. Senator SPARKMAN. All right, Mr. Gerholz, do you want to go right ahead with your statement before we do any questioning? Mr. GERHOLZ. Any time you say. Senator SPARK MAN. Suppose you go right ahead. STATEMENT OF ROBERT P. GERHOLZ, CHAIRMAN, THE REALTORS' WASHINGTON COMMITTEE OF THE NATIONAL ASSOCIATION OF REAL ESTATE BOARDS Mr. GERHOLZ. Mr. Chairman and members of the committee, my name is Robert P. Gerholz. I live in Flint, Mich., and have been a realtor and community developer for 27 years. I have been actively identified with the industry at local, State, and national levels. In 1945 I was president of the National Association of Home Builders. I am appearing today as chairman of the Realtors' Washington Committee of the National Association of Real Estate Boards. I deeply appreciate this opportunity of appearing before your committee. I was considerably disturbed when I read that my good friend and former neighbor, Ray Foley, painted a dark and gloomy housing picture. Figures somehow or other lend themselves to more than one point of view. For example, John Blandford told the Senate Banking and Currency Committee back in November 1945 that we needed in the next 10 years, 1945 to 1955, 12,500,000 new housing units. Now, 3 years later, we have constructed 3,000,000 new housing units and are told that we need between 17,000,000 and 18,000,000 new units. After World War I, it took the housing industry 7 years to hit a peak year. After World War II, we did it in 2 years. Permit me to tell you something about this industry which is second only to agriculture in total worth. We entered 1949 with more housing, better housing, and more home ownership than ever before in our history. Moreover, a smaller proportion of the population is living in so-called substandard housing than ever before. And a far larger proportion of the population is living in well-equipped houses in good repair. In every respect-except one-we are better off than we were before the war in that last peacetime year, 1940. We still do not have as many vacancies in proportion to the total number of dwellings as we had then, which means we have less opportunity to shop around in buying or renting a home. However, vacancies are beginning to show up. We are catching up fast. But in all other respects we are better off-even to having more living space per person than in 1940. We even have a smaller percentage of married couples living doubled up with other families than in 1940. That wasn't true, of course, at the peak of the housing shortage in 1947-but it is true now. If this seems amazing, please note that the building industry has caught up with, and passed, the marriage rate. The net increase in nonfarm married couples since 1940 has been at the rate of 83 every hour. But the net increase in nonfarm dwelling units has been at the rate of nearly 87 every hour. Our housing advances, as determined on the basis of Bureau of the Census surveys and Bureau of Labor Statistics reports, have been of such spectacular proportions, on such a wide front, that we could hardly believe them to be possible if we hadn't become accustomed by this time to the miracles of American production and purchasing power. It must seem fantastic indeed to the rest of the world that in the past 9 years-four of those years completely shadowed by war-we have not only made housing gains but have also made them on an unprecedented scale. There is no cause for complacency in this fact, but rather a challenge to keep on with the job. Our housing improvement has come about in spite of difficulties-in spite of the curtailment of house building during the war, the shifts of population to meet the requirements of war production, and the abnormally high rate of new-family formation since the war. Yet, in the face of these conditions, we are better housed than in 1940. Let's put together the parts that make up this favorable picture as we enter this tenth year of a remarkable decade. In the first place, we have fed into our housing supply the tremendous total of 7.6 million dwelling units-an average of about 850,000 a year. The great bulk of these-6.7 million-were in nonfarm areas-our cities, suburbs, and small towns where the housing situation had been most acute. Those 6.7 million units that have been added would be enough to house the people of seven cities the size of Chicago. That much production certainly speaks for itself as one of the major contributions to the progress made since 1940. This contribution is not only one of sheer quantity. It also ups our housing stock as to quality. Of these 6.7 million nonfarm additions, nearly 4.9 million were in new structures, and all but a negligible amount of these came equipped with private bath and the similar refinements that we take for granted in the modern house. The remainder of the additional units, about 1.8 million, were created by conversion of existing houses or other buildings to give added living quarters. These conversions do not always result in improved quality of the housing, but there is evidence indicating that, for the most part, conversions have been accompanied by modernization to give a substantial improvement over the condition of the buildings before they were remodeled. But, before we go into a more careful analysis of how much better our housing supply is as a whole, let's settle the question of how much housing we have for how many people, in an objective way. We now have 36.3 million nonfarm dwellings. This is a net increase of 6.6 million houses and apartments since 1940, allowing, as mentioned before, for various additions to and withdrawals from the supply. Since we have had a net increase of 6.4 million nonfarm married couples in the same period, it seems to have been a neck-and-neck race with construction coming out ahead of Cupid in the home stretch. Another off-the-cuff comparison that may be made on the question of how much housing we have for how many people is to measure the nonfarm population increase since 1940 against the amount of nonfarm living space added since 1940. The nonfarm population increase is about 18 million, excluding members of the armed forces, and the number of rooms added since 1940 is more than 30 million. we have added at least one and a half rooms for every additional person. So These comparisons just given are intended merely to give a rough idea of housing growth in relation to population and family growth. |