be constructed a building or buildings designed principally for residential use or upon which there is located or there is to be constructed facilities for trailer coach mobile dwellings; and the term 'first mortgage' means such classes of first liens as are commonly given to secure advances (including but not being. limited to advances during construction) on, or the unpaid purchase price of, real estate under the laws of the State in which the real estate is located, together with the credit instrument or instruments, if any, secured thereby, and may be in the form of trust mortgages or mortgage indentures or deeds of trust securing notes, bonds, or other credit instruments.

"SEC. 207 (a) (6) The term "rental housing" means housing, the occupancy of which is permitted by the owner thereof in consideration of the payment of agreed charges, whether or not, by the terms of the agreement, such payment over a period of time will entitle the occupant to the ownership of the premises, or space in a trailer court or park properly arranged and equipped to accommodate trailer coach mobile dwellings.

"SEC. 207 (c) (2) not to exceed 80 per centum of the estimated value of the property or project (when the proposed improvements are completed): Provided, That except with respect to a mortgage executed by a mortgagor coming within the provisions of paragraph numbered (b) (1) of this section or a mortgage on a trailer court or park, such mortgage shall not exceed the amount which the Commissioner estimates will be the cost of the completed physical improvements on the property or project exclusive of public utilities and streets and organization and legal expenses; ***; and

"SEC. 207 (c) (3) not to exceed, for such part of such property or project as may be attributable to dwelling use, $2,000 per room (or $7.200 per family unit in the number of rooms in such property or project is less than four per family unit) or not to exceed $1,000 per space or $300,000 per mortgage for trailer courts or parks; Provided, That as to projects to consist of elevator type structures, the Commissioner may, in his discretion, increase the dollar amount limitation of $2,000 per room to not to exceed $2,400 per room and the dollar amount limitation of $7,200 per family unit to not to exceed $7,500 per family unit, as the case may be, to compensate for the higher costs incident to the construction of elevator type structures of sound standards of construction and design." The effect of this amendment would be to permit the FHA Commissioner to insure the mortgages on trailer parks which meet proper standards with the following safeguards, namely, that no mortgage can exceed 80 percent of the value of the property, including utilities, or more than $300,000, and also limits the cost to no more than $1,000 per space.

We feel, Mr. Chairman, that the proposed amendment would provide a number of advantages, and no serious disadvantages to the public that we can foresee. We have summarized for the committee information on the trailercoach mobile-home industry which, we believe, supports the proposed amendments to include trailer parks in the National Housing Act:

(1) Some 800,000 trailer coaches are providing permanent homes for more than 2 million people. Mobile homes and parks are the homes of military personnel who are enabled to have their families with them wherever stationed in the United States, of defense workers and their families, of newlyweds, of retired folks, of construction and agricultural workers and others in mobile or semimobile employment. For many of these workers it is their only practical solution for family living and homeownership.

(2) The modern trailer-coach mobile home has been developed to meet high standards of living. It has become, by apartment standards, a livable 2-bedroom dwelling unit with a fully equipped bathroom and kitchen, and includes all the essential house furnishings. The modern trailer park is developing into an attractive, suburban development with landscaping, recreation areas, and utilities equal in every respect to the average garden apartment.

(3) The proposed amendment will improve general property values and community relations by encouraging modern standards for trailer-coach dwelling. Wherever substandard conditions do exist in trailer parks this proposed legislation would permit private enterprise to do the job of property improvement and modernization.

(4) There are no subsidies involved in this proposal. Not a cent of cost to the taxpayer. Not a cent to tack onto the national debt. We are talking here of extending credit on secured loans with reasonable limitations and conditions. In our opinion the insurance premiums which the FHA will receive would very substantially exceed the losses. This will be a fully self-supporting and self-amortizing program.

(5) By 1952, purchases of trailer coaches amounted to $320 million, an increase of 300 times, and today almost all of the trailer coaches are purchased for year-round, permanent dwellings. It is not simply chance but choice that has made the trailer-coach mobile dwelling the fastest-growing segment of the housing industry and, indeed, one of the very fastest growing industries in the country.

(6) The people that are buying trailer coaches are present owners of trailer coaches. It is estimated that 60 percent of the people that buy a trailer coach now own one, which means that they are becoming permanent housing for the people who have either no other practical solution for homeownership, or the people who have tried them and now prefer to live in the trailer-coach mobile dwellings as their permanent-housing solution. In 1937, vacationers accounted for about 50 percent of trailer coach purchasers. Many more vacationers are purchasing trailer coaches today than 17 years ago but the vacationer is only 1 percent of today's trailer coach market. Ninety-two percent of today's purchases are for dwelling purposes.

(7) Military personnel purchase 1 out of every 4 trailer coaches sold today. For the serviceman the trailer-coach dwelling has many advantages. No longer need he rent converted barns and chicken coops or other substandard quarters at exorbitant prices. No longer need he speculate on the length of his assignment at any one station and hurriedly sell a home if he gets orders to report elsewhere. He and his family can continue to live in their own home, moving quickly and easily to anywhere in the country where he may next be stationed. His current living costs are lower and his payments help build a good family saving the equity in his mobile home. The feeling of having a succession of quarters, none of which can be called home, is replaced. The comfortable completely equipped and furnished modern trailer coach dwelling is home to the serviceman and his family regardless of the installation to which he is assigned.

(8) The older folks have taken to trailers in large numbers. Retired people are accounting for 10 percent of trailer-coach purchases. Typically, the retired couple desires independence; the trailer-coach dwelling is easy to keep and provides a practical home which can be brought along for visits to children. Also the retired couple usually has an adjustment problem; new interests are found in trailer-coach living to supplement the feeling of being discarded by the workaday world. In modern trailer parks in every part of the country, retired couples are making new friends, enjoying new hobbies, and sports. Then again, the ability to avoid the extremes of hot summers and cold winters is of particular importance to older people; many retired couples are enjoying the opportunity of being in a pleasant climate the year around. For the modern retired couple, no other housing possesses anything like these advantages of the trailer-coach mobile dwelling.

(9) An important fact is that 2 out of 3 purchasers of trailer-coach mobile dwellings have owned such dwellings previously. About 90 percent of the purchasers of trailer-coach mobile dwellings are planning to live in them for at least 5 years and many of the purchasers are planning to live in them indefinitely. (10) The 12,000 trailer parks are widely distributed over the country, with a significant number located in such States as California, Florida, Arizona, and Texas. Under the proposed amendment, with its provision for the establishment of FHA standards, these parks will develop into an increasingly valuable community asset.

(11) The trailer park resources represents an investment of roughly $550 million. The addition and modernization each year is estimated at least 10 percent, or $50 million. Even if one-third of this amount required FHA insurance, it would have a negligible effect on the authorizations under title II.

(12) The modern mobile-home park is the same as the suburban garden apartment except that the tenant owns his housing unit and rents the space and the utilities. All the essential requirements for planning and good quality construction such as FHA minimum property requirements, national plumbing code and regulation of the National Underwriters, would apply to trailer parks just as they apply to apartments. The establishment of such standards to trailer parks by FHA would have the effect of raising standards wherever substandard conditions exist.

The National Housing Act has failed to take account of this important part of the housing industry. The failure to note the tiny industry of the 1930's was understandable. Today, however, a failure to accept the trailer-coach mobile dwelling as a part of the housing program would be a failure to recog

nize the low-cost branch and the fastest growing branch of the industry. More important it would mean continued discrimination against the families of defense and essential civilian workers, military personnel, and against retired people. More than 2 million people have found that the trailer-coach mobile dwelling is meeting their housing needs best. Two hundred thousand persons are joining the trailer-coach population each year. These are Americans who are looking forward to the same treatment that Congress has provided others in the National Housing Act.

On behalf of the many thousands of families owning trailer coach mobile homes, and the industry that serves them, the Trailer Coach Association strongly urges that the committee consider and pass the proposed amendment.

Thank you, Mr. Chairman, for permitting us to be heard. Our association will be pleased to compile and furnish any detailed information that the committee may need.

Mobile homes

STATEMENT OF E. RAY MYERS ON BEHALF OF THE MOBILEHOME DEALERS NATIONAL ASSOCIATION

My name is E. Ray Myers and I am the president of the Molibehome Dealers National Association, 39 South La Salle Street, Chicago, Ill. My written statement submitted to you is on behalf of our association, and it is in substitution for my personal appearance in the interest of conserving the time of this committee. The Mobilehome Dealers National Association is a trade association consisting of 800 members who are engaged in the mobile-home industry throughout all parts of the United States.

The purpose of my statement today is to endorse H. R. 6164, which provides for an amendment to the National Housing Act authorizing loans for the construction of mobile-home parks, sometimes referred to as trailer-coach courts. We join with the two other associations of the mobile-home industry, Mobile Home Manufacturers Association and Trailer Coach Association, in urging adoption of the amendments relating to parks.

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 1, section 8, of the National Housing Act, mobile homes are the greatest source of low-cost housing today. About 90 per cent of the housing units sold under $6,000 are mobile homes. There are some 800,000 mobile-home dwellings occupied by 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 per cent of the park operators own more than one park. The parks are limited in size. Our survey discloses they have accommodations as follows:

50 per cent of the parks accommodate 50 to 75 mobile-home units; 11 per cent of the parks accommodate 76 to 125 units; and 12 per cent 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:

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 of the investment is sometimes as high as 15 percent. Nevertheless the lack of available financing has prevented mobilehome 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 mobilehome parks on the national scale. First, as an adjunct to metropolitan living, a mobile-home park with its separate water supply, electric power, and sewerage 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.

It is our understanding that the amendment to section 207 (c) (2) will include the cost of the property, public utilities, and streets in the evaluation for loan purposes. This will mean that in mobile-home park financing the usual rule of excluding public utilities and streets from the evaluation for loan purposes will be excepted. We sincerely urge the adoption of the amendments in H. R. 6164.

Senator SPARKMAN. Our next witness will be Mr. Nichols, representing the Home Improvement Contractors National Association. We are glad to have you. You have a prepared statement. I am not sure you were here when we started off and I mentioned the necessity of budgeting our time. I suggested that the prepared statement be offered for the record and perhaps you can summarize it, because we have 1 hour until the Senate convenes.

Home repair and modernization

STATEMENT OF C. N. NICHOLS, MANAGING DIRECTOR, HOME IMPROVEMENT CONTRACTORS NATIONAL ASSOCIATION, INC.

Mr. NICHOLS. Mr. Chairman, I believe I heard you say we were budgeted to 15 minutes each.

Senator SPARKMAN. That is fine.

Mr. NICHOLS. I am going to summarize the first part of my prepared statement and also a great deal of my latter part, but in the in-between part I am going to ask for the permission of the committee to do as ex-Senator Lucas did and read it verbatim.

Senator SPARKMAN. All right. Follow your own procedure.

Mr. NICHOLS. But I will not exceed the time limit. Mr. Chairman, I am C. N. Nichols, managing director of the NERSICA, Inc., with headquarters at 12 East 41st Street, New York City. NÉRSICA is a copyrighted abbreviation of a lengthy name for an association representing the home-improvement contractors of the United States.

These contractors install or apply principally roofing, siding, insulating, combination storm windows and doors, metal awnings, jalousies, modern kitchens and garages, for old homes. They are mostly small-business men doing an average of between fifty and one. hundred thousand dollars of business annually.

Their sales represent 50 percent of the total loans and over 52 percent of the total dollar volume insured under FHA title I.

The Department of Commerce estimates the home-improvement and modernization market of the United States in 1956 will be $12 billion. About 50 percent of this total is sold for cash, leaving about $6 billion to be financed. Many State laws prevent terms and rates

on unsecured loans favorable to the homeowner. Most rural banks everywhere, I feel, might have to discontinue this type of loan without FHA title Í. Only under FHA title I can the small income homeowner keep his property in livable condition.

Mr. Chairman, before proceeding with my formal statement I wish to be registered with your committee that I am also speaking for millions upon millions of low-income homeowners who have no organization to represent them. They need title I of the FHA.

There are three things we want to suggest. One is a permanent FHA title I. Two, larger insured amounts and longer periods of time to repay the loans. Three, elimination of the 6-month occupancy section from the National Housing Act of 1954.

We believe title I legislation should be placed on a permanent basis. It was all right to have an expiration date on title I when it was in its experimental state. I believe this is the 14th extension asked for FHA title I. Back in the days when the idea was new, unproven, and there was considerable question as to whether it was good or bad legislation, a mere extension was justified. Surely, Mr. Chairman, after 21 years of operation all doubts as to the value of title I as a Government. agency have been eliminated.

The plan has proved good for all segments of the public, particularly the homeowner in the lower brackets. It has also been valuable to the banks as well as the suppliers of building materials used in the renovation and modernizing of old homes and buildings. FHA title I has built this new $12 billion industry which I represent here today. The program has been self-supporting and without cost to the taxpayers.

Now that the title I plan has proven itself, nothing is gained by setting up an expiration date. The program is either good or bad, it has operated for or against the homeowners and should be judged that way. True, we feel keenly that we want Congress to review all Government agencies from time to time and consider their operations in the light of current developments.

The Commissioner of FHA must make an annual report to Congress; also annually he must appear before a committee of Congress to obtain an appropriation for the current year. This periodic scrutiny, plus a ceiling on the amount of loans that may be outstanding at any one time, are in my opinion necessary safeguards to assure proper ministration of title I on a permanent basis.

ad

May I interject here my hope that if FHA title I is put on a permanent basis, or even if its expiration is only extended again, Congress should check its progress and operations more thoroughly than they have done in the past.

To put title I legislation on a permanent basis would be helpful to everyone interested in its benefits the homeowner, the lender, the contractor and, finally, the FHA administration. Each would know where he is going and plan accordingly.

Senator CAPEHART. Will the gentleman yield?

Mr. NICHOLS. Yes, sir.

Senator CAPEHART. What is to be gained by putting it on a permanent basis?

Mr. NICHOLS. I am just about to point out that I am going to plead with this subcommittee again, as I have done before in appearances