Mobile home living is already extensive, and it is becoming increasingly more popular. During the past year 76,000 mobile home units were sold at a value of $324 million. Under the definition of low-cost housing in title I, section 8, of the National Housing Act, mobile homes are the greatest source of low-cost housing today. About 90 percent of the housing units sold under $6,000 are mobile homes. There are some 800,000 mobile home dwellings occupied by about approximately 2 million persons. Recent surveys reveal that there are about 12,000 mobile home parks in operation. At least half of these parks are inadequately equipped. Only about 5 percent of the park operators own more than one park. The parks are limited in size. Our survey discloses they have accommodations as follows:

Fifty percent of the parks accommodate 50 to 75 mobile home units; 11 percent of the parks accommodate 76 to 125 units; 12 percent of the parks accommodate in excess of 126 units.

It is quite clear that park facilities for this great source of low-cost housing is critically inadequate.

I do not mean to state that only the very low income class of our population enjoy mobile living. These low-cost housing units are very frequently occupied by preference rather than by necessity. In some families where the husband's occupation requires him to move from place to place the mobile home provides the only method whereby family unity can be preserved. In one of our recent surveys we learned that occupants of mobile homes on a national basis could be categorized in the following percentages: Construction and defense workers, 40.5 percent; military, 18.5 percent; newlyweds, 10 percent; retired, 11 percent; students, 5 percent; other groups, 15 percent.

The people of our country are rapidly learning of the utility and comfort of the mobile home. Since World War II the development of mobile homes into completely self-contained family units has been profound. However, the availability of adequate park areas has grossly limited the utilization of these homes. The construction and operation of a mobile home park is a sound investment and business venture. The annual return on the investment is sometimes as high as 15 percent. Nevertheless, the lack of available financing has prevented mobile home park operators from keeping pace with other developments in this housing industry. The National Housing Act at this time makes absolutely no provision for the financing of mobile home parks.

I have been impressed recently by two important needs for adequate mobile home parks on the national scale. First, as an adjunct to metropolitan living, a mobile home park with its separate water supply, electric power, and sewage system can accommodate city workers without adding to the overloaded public utilities. Second, in the event of a national emergency quarters for large groups of people can be moved to or away from a vital area. In fact, recently the Civil Defense, recognizing the value of the mobile home, experimented with them in some of its atomic tests.

Our proposed amendment, which is quoted below as part of this statement, would provide for a maximum mortgage amount of $300,000 with a further limit of 1,000 per mobile home space. All other characteristics of the section 207 loan would apply except that the estimated value of the mobile home parks would include the cost of public utilities and streets. This is now applicable to certain Government supervised corporations. We believe that the peculiar characteristics of the mobile home park, wherein the park operatorbuilder must construct streets, walks, and bring utilities within the park, makes such exception a reasonable one.

The proposed amendment is as follows:

(1) After the words "residential use" and before the semicolon in section 207 (a) (1) (B), insert "or upon which there is located or to be constructed facilities for trailer coach mobile dwellings."

(2) Replace the period with a comma at the end of section 207 (a) (6) and add "or space in a trailer court or park properly arranged and equipped to accommodate trailer coach mobile dwellings."

(3) After the words "of this section" and before the comma in the first proviso of section 207 (c) (2) insert "or a mortgage on a trailer court or park." (4) After the words "per family unit" and before the colon immediately preceding the proviso in section 207 (c) (3) insert "or not to exceed $1,000 per space or $300,000 per mortgage for trailer courts or parks."

I wish to thank the committee for the opportunity of being present to submit our recommendations. We commend them to your sympathetic consideration. Respectfully submitted,

W. Bryon SORRELL.

Mr. BROWN. Thank you very much, Mr. Fleischut. You may be excused.

The committee will stand in recess, to reconvene tomorrow morning at 10 o'clock.

(Whereupon, at 12: 40 p. m., the committee adjourned.)

HOUSING AMENDMENTS OF 1955

FRIDAY, JUNE 3, 1955

HOUSE OF REPRESENTATIVES,

Committee on Banking and Currency,

Washington, D. C.

The committee met at 10 a. m., Hon. Brent Spence (chairman) presiding.

President: Chairman Spence, and Messrs. Brown, Patman, O'Hara, Talle, Hiestand, and Nicholson.

The CHAIRMAN. The committee will come to order.

We will resume the hearings on the housing bill.

Mr. Fink, call the first witness.

Mr. FINK. Mr. Wallace J. Campbell, director of the Cooperative League of America.

The CHAIRMAN. You may proceed as you desire, Mr. Campbell. Mr. CAMPBELL. Mr. Chairman, I have a statement which I shall read.

The CHAIRMAN. Very well, you may proceed as you wish.

STATEMENT OF WALLACE J. CAMPBELL, DIRECTOR, WASHINGTON OFFICE, COOPERATIVE LEAGUE OF THE UNITED STATES OF AMERICA

Mr. CAMPBELL. My name is Wallace J. Campbell. I am director of the Washington office of the Cooperative League of the United States of America, a national federation of consumer, service, and purchasing cooperatives. The league serves regional and national Cooperatives with a direct membership of 2 million farm and city families. We also include in membership the Credit Union National Association with 8 million members, and the National Rural Electric Cooperative Association with nearly 4 million family members.

The Cooperative League is, of course, vitally interested in the general housing bills which are before this committee. For us, however, there is one extremely significant situation which cries for immediate attention.

The cooperative housing program within FHA has come to a grinding halt. Many thousands of consumers will lose their only opportunity to become homeowners at a price they can afford. Many hundreds of thousands of dollars of investment are in danger of being lost. These are investments in both time and money by both veterans and nonveterans in consumer-sponsored cooperative housing projects. There are also substantial investments made by builders who are sponsoring cooperative housing projects which are in danger of being lost if the law stands as it is today.

The crucial situation has arisen because of a slight change made in the Housing Act last year. You may remember that we and several other nongovernmental organizations appeared before the committee last year and warned of the effect if the procedure of using "estimated replacement cost" were knocked out of the act and "estimated value" substituted for it. The effect has been even more drastic than we had anticipated. As of 1 year later the program has been almost completely destroyed.

It is somewhat difficult to explain the effect of what appears to be a slight technical change. The formulas used by FHA to arrive at "estimated value" are based on the assumption that the housing project is a rental project, that is, that the dwellings were built by a speculator or real-estate operator who intends to rent the project to tenants to make a profit on his investment. There is nothing wrong with this procedure, but it does not fit the experience in the cooperative housing field.

The cooperative housing projects are built by their prospective owners to provide a maximum of livability with no concern on the part of the prospective owner-occupant for securing a profit on his investment. With the change in attitude the cooperative often seeks out-of-the-way locations in order to save money for the members. The members almost invariably want a larger number of bedrooms than a speculative builder would build, for the occupant is concerned with having room enough for a growing family. The members are concerned in turn for a modern approach to livability and are often willing to experiment with types of architecture which a profit operator would find too risky in terms of capital return.

Under the FHA procedure of arriving at "estimated value" the appraisers are instructed to disregard all of the factors in livability which are essential to the co-op, and make their appraisal strictly on the basis of what return on capital a similar project would bring to an investor.

When the Congress created the FHA cooperative housing program, now known as section 213, just 5 years ago, it specified that mortgage ceilings should be based on "estimated replacement cost." In the 5 years which followed, 32,000 homes or apartments were built and projects were in the planning and development stage which would bring the program to 50,000 units with a mortgage value in excess of $500 million. While there have been some abuses of the program by builder-sponsors, there was no scandal involved in the program; and FHA had established safeguards to prevent any violation in its intent in the use of "estimated replacement cost." FHA procedures have been tightened even more by the cost certification requirement instituted about a year ago.

There were no compelling reasons for the change, and there are tremendous reasons for changing back to the original statute.

We would like to give you a few specific examples. The American Friends Service Committee in Philadelphia launched a rehabilitation project in the center of the city which had the support of city and civic authorities and great community support. Under this program an entire city block was to be rehabilitated. In order to make the project economically feasible it was divided into two sections. Friends, Service, Inc., rehabilitated 52 apartments. The mortgage on the project was $8,100 per unit, which is the ceiling. This repre