(The information referred to is as follows:) GOVERNMENT OF THE DISTRICT OF COLUMBIA, May 11, 1954. Memorandum to: Gerard M. Shea, Director of Public Welfare. Subject: Public assistance recipients in National Capital Housing Authority dwellings. On April 28, 1954, you asked for the number of public assistance recipients who are now in public housing. Eight and three one-hundredths percent of the cases receiving assistance during April, or 626 cases, occupied living quarters in public housing. The largest assistance family in public housing numbered 14 persons. The mother and 12 children received aid to dependent children and the father aid to the permanently and totally disabled. There was 1 family of 12 persons, 2 families of 11 persons, and 7 families of 10 persons each. The smallest ADC case in size consisted of one person, a child living with a grandmother receiving old-age assistance. The number of cases by District and category was as follows: Cases receiving ADC represent 72 percent of all the assistance cases in public housing. The average number of persons per case in the total ADC caseload is 4.2. The average ADC case living in public housing is larger in size by a half person. Although there were 626 cases in NCHA projects, the number of housing units occupied by these cases was $579: 25 represented district I cases and 554 district II cases. In.47 housing units, the recipients of assistance represented 2 categories of assistance. Also in an undetermined number of housing units recipients of assistance were living with one or more relatives who were self-supporting. The number of housing units occupied by public-assistance cases, according to the housing project, follows: Mr. WILCOX. In Corpus Christi, Tex., the housing authority reveals an amazing account of providing public housing without the use of Federal subsidy. In that city out of 3 projects, one saved $21,831, out of its $77,998 contract subsidy; the second, of 490 units, had a contract subsidy of $54,420 and its income above operating expenses was $108, 63137-55- -26 906; so it did not need any of its contract subsidy, but returned an apparent profit of $54,486. In the third project of 250 units, the housing authority returned an apparent profit of $3,730 (pp. 2330, 2348, 2350, ibid). The Father Panik project in Bridgeport, Conn., of 1,239 units during fiscal years 1954 and 1955 needed no Federal subsidy, and in fiscal year 1953 returned a net profit of $7,325 (p. 2345, ibid). The Louisville, Ky., Housing Commission saved $368,824 out of its contract subsidy of $1,123,500 for fiscal year 1954 (pp. 2332, 2346-47, ibid). Birmingham, Ala., did not use $226,987 (pp. 2340, 2349, ibid); Chicago, Ill., $457,831 (pp. 2342, 2349, 2352, ibid), and the charts appearing on pages 2327-2353 of the House Independent Offices appropriations hearings for fiscal 1955 contain a vast number of similar savings aggregating almost $30 million in unused subsidies for fiscal year 1955. We must at this point recall Mr. Keyserling's prediction, referred to on page 11 of this testimony, that he visualizes a public-housing program of decreasing Federal subsidy because of the wider range of higher-income groups who would be brought within its reach. His prediction is borne out by the record of subsidies unused, which means the housing of higher-income groups, and this, we respectfully submit, gives substance to our charge that the ultimate goal of public housers is the socialization of family shelter in the United States, not the housing of the neediest as an exercise of a welfare function. We have insisted that public housing systematically excludes those in the greatest need in order to use less of the Federal subsidy and thereby move closer to its ultimate goal of supplanting private enterprise and private home ownership. Here is a sample of the technique employed in this systematic exclusion of needy families and an account of how it is proposed to function in Asheville, N. C. Here in 1953 the housing authority.had a permissible contract subsidy of $137,020 and used only $89,340, leaving an unused subsidy of $47,680 [p. 2329, ibid]. For each of the fiscal years 1954 and 1955 the unused portion of the subsidy amounts to $19,793. The Asheville Housing Authority was recently advised that it was using too much subsidy and was requested to revise the rent ranges for the different income groups in order to use less subsidy. This, then, is what was proposed for the public-housing project in Asheville: Please note that 32 apartments now rented to families who can afford to pay no more than $21 per month will not be rented to families in that income bracket when the present occupants vacate. They will be rented to higher income families. Under the proposal, and it is expected to be adopted shortly, families who can afford to pay no more than $31 per month will lose 36 apartments, and families who can afford to pay $32 and more per month will have 52 more apartments than they have now. Thirteen, the number of apartments now used by families who can afford to pay $42 and more per month, will be increased to 30. We recently sent telegrams to approximately 40 housing authorities inquiring as to how their units were allocated according to rent ranges. Some did not even reply. Only a few gave the desired breakdown. The majority disclaimed any such pattern for excluding low-income families. This seems strange in view of the fact that the low-rent housing manual of PHA, section 405.1, sets forth in considerable detail the technique to be employed in determining the quotas to be applied to each income group. We appreciate that some technique may be necessary in order to make the project financially feasible. However, to employ it in order to reduce the amount of subsidy considerably below that fixed in the annual contributions contracts, and thereby deny this subsidized shelter to those in the greatest need, is nothing less than a perversion of the welfare function and underscores a principal reason why public housing is the wrong approach to the care of the needy and the destitute. The committee has been very kind in listening patiently to our views and our recital of certain facts gleaned from the annual reports of local housing authorities. For the past year we have endeavored through our local real-estate boards to obtain copies of many of these annual reports for our study. However, many housing authorities advise our boards either that they do not publish an annual report or, if they do, copies are not available. Of the more than 400 housing authorities from whom we requested annual reports only about 40 complied. This year the Congress will give these local authorities $87 million. Next year it will be more, and more the year after, even if this requested expansion is rejected." We respectfully urge therefore that you not only reject this proposed expansion of the public housing program but that you proceed with a thorough investigation, not of the Public Housing Administration, which is nothing more than the conduit through which the subsidy is drained, but of the 811 local housing authorities who are receiving the huge subsidies, to demand an accounting of their stewardship, and to examine into the special privileged class of Federal tenants whose shelter is being subsidized. Again, I wish to reiterate our sympathy with the goals sought by this committee, goals which we have long accepted as our own and which we have transformed into action through our build America better program. The upgrading of homes through rehabilitation of existing housing, continued construction of homes in excess of family formations, the shift of millions of families every year to higher incomes, and a stepped-up program where required for the payment of rental allowances to needy families by local welfare agencies, far outweigh the arguments of 1930 depression vintage that we are a nation of the poor and the ill-housed and that we need to breathe more life into this offspring of the depression, public housing. We appreciate your courtesy in hearing our testimony and we commend it to your sympathetic consideration. (The appendixes referred to are as follows:) APPENDIX A PROPOSED AMENDMENT TO H. R. 5827 RE FEDERAL INSURANCE OF URBAN RENEWAL BONDS Amend title I of the Housing Act of 1949, as amended, by adding the following new section at the end thereof: "SEC.. The Administrator is authorized, upon such terms and conditions as he may prescribe, to guarantee the payment of principal and interest upon bonds, notes, and other obligations payable from special assessments (or special taxes in the nature of special assessments) imposed upon real estate and issued by municipalities, counties, local public agencies, or other public entities for the installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for carrying out the urban renewal objectives of this title in accordance with urban renewal plans in urban renewal areas as defined by section 110 (a). The Administrator shall fix a premium charge for any guaranty undertaken under this section which shall not exceed an amount equivalent to one-half of 1 percent per annum of the amount of such bonds, notes, or other obligations for the term thereof, which charge shall be payable at such time or times and in such manner as may be prescribed by the Administrator. Contracts for such guaranties shall be deemed to be contracts for loans within the purview of subsection 102 (e) but shall not be deemed to be contracts for financial aid within the meaning of sections 105 and 109." EXPLANATION OF PROPOSED AMENDMENT TO PROVIDE FOR FEDERAL INSURANCE OF LOCAL URBAN RENEWAL BONDS Federal loans and grants to aid urban renewal under title I of the Housing Act of 1949, as amended, can do scarcely more than scratch the surface in urban areas that need some curative action against deterioration. Cities clearly need a method of financing municipal urban renewal costs such as those for planning, public works, acquisition,and removal of adverse land uses that does not depend upon transfers of money from the Federal Treasury to the cities. One of the first urban redevelopment actions to move from the planning stage into construction was the Lake Meadows project of a little more than 100 acres in Chicago. Acquisition of the site cost the city about $14 million. Reuse value of the site, when it was sold to an insurance company for redevelopment, was set at about $2 million. The resulting $12 million loss will be borne two-thirds by the Federal Government and one-third by the city of Chicago. Some idea of the limited potential of this process is gained from the fact that Chicago, according to its planning commission, has a total of some 25 square miles that need some kind of corrective treatment. If you apply a Federal cost of $8 million per 100 acres to the 25 square miles in Chicago which need attention, you arrive at a Federal cost for Chicago alone of more than $1 billion, or twice as much as Congress authorized in grants for all the cities of the Nation. After studying the possibilities under this formula, President Eisenhower's Advisory Committee on Housing reported to him that if we rely on demolition alone and continue at the present rate, it will take us 200 years to get rid of the slums. Now gaining support throughout the Nation is a proposal to fill this gap in municipal finance through the benefit assessment principle. Under this plan, a delineated urban renewal area would also be a benefit assessment district. Under State enabling legislation urban renewal costs would be assessed against owners of property in the area being benefited, with each property owner being given 10 years in which to pay his assessment. The city would launch the program by issuing neighborhood conservation benefit assessment bonds, secured by assessment liens, but not by the general faith and credit of the city. In order to provide ready marketability for such bonds at favorable interest rates, it is proposed that they be federally insured, and that authority to issue such insurance, on the basis of an insurance premium, be placed in the HHFA Administrator through an amendment to title I of the Housing Act of 1949 as amended. Assisting a municipality to obtain a favorable interest rate to be made available to renewal bonds will permit a more favorable interest rate to be made available to individual property owners on unpaid balances of their assessments over the 10-year period. The insurance premium of one-half of 1 percent of the amount of the bonds will provide an insurance fund out of which claims can be paid. The following data is based on returns from 209 local real-estate boards. The communities mentioned are named in terms of the jurisdiction of the local realestate board and in some instances the designation is therefore in terms of an area. APPENDIX B Results of a survey by National Association of Real Estate Boards (MarchApril 1955) on enforced and voluntary demolition of unfit properties |