Mr. TALLE. Yes.

Mr. FOLEY. There is a very definite field in which we have been able to do some, but not enough, work in connection with new materials and new methods. For instance, a matter that was of great interest to various committees of this Congress is modular coordination, which has been developed to a very considerable extent, and which should be developed much further. There is presently no central place to do it unless it be done by the Government.

In the field of building techniques, the distance to which prefabrication can be adapted, not only it toto but in partial prefabrication, to what is otherwise called conventional construction is another promising area. Others are: the testing of the materials already in use for their better use or more economical use and many matters of techniques. For instance we have put out a bulletin recently on proper methods for nailing, which has created tremendous interest, and is being used in apprentice schools everywhere.

There is a wide variety of things. But I have in mind, in considering the responsibilities that, in the event of passage of this title of the bill, would rest upon the Administrator, it would be something like this, Congressman. There is a great deal which has been done and is being done, in connection with research, both as to materials and as to technical, statistical and economic research, privately and publicly. There has never been anybody, however, who has had the authority or the means to call together all of the major groups that are interested in production particularly and say, "Here is what the over-all need in research is. Let us map it out. Let us find out what could well be done," and then piece together the various things which are already being done, and thus determine what are the gaps, and decide which of those ought to be properly done by private enterprise, and can be so done-and certainly as many of them as can should be so assigned and then the inevitable gaps which cannot otherwise be filled, would become the task of the Federal Government.

But there presently is no one required, having the authority and responsibility to draw together what has already been done, and to make it most widely useful because most widely known. That would be what I would broadly envision as the type of task to be done in the way of technical research under this title. Its key, it would seem to me, would be working in close cooperation with private industry and close coordination of the activities already, or to be, assumed by the Government.

Mr. TALLE. I assume that under technical research you perhaps would not pay attention to zoning regulations, or would you?

Mr. FOLEY. That is one of the fields in which a great deal of work needs to be done. Model codes, I should have mentioned-one of the outstanding things in that field, I think, is the draft of a model plumbing code which has been developed under the leadership of the Housing and Home Finance Agency, by the people most interested in the business and labor field. Then there is the subject of local codes for building, in general, building codes. Many States, for instance, have a very cluttered situation with respect to building codes, which, in one place, add unnecessarily to costs, and in another place in the same State, leave the community with little or no protection-those are all subjects for such an activity, sir. But, of course, this activity would

not involve any power, or desire to have power, to enforce the adoption by the local communities or the States.

Mr. TALLE. The two broad factors that must be brought together in building any housing unit are materials and labor-I am leaving out the land because of the fact that there is much variation because of location.

Mr. FOLEY. Yes.

Mr. TALLE. In the total cost of the housing unit, how do those two broad factors stack up, percentage-wise?

Mr. FOLEY. I think I would like to ask one of our people what the latest figures on that are. By that, are you referring to on-site labor, Congressman?

Mr. TALLE. Yes.

Mr. FOLEY. I am sorry I do not have it in mind at the moment. Apparently no one else here has an exact figure. I am told that on-site labor, before the war, was 30 percent. The difficulty, of course, is in dividing labor as you go back down the line.

Mr. GAMBLE. Did you say on-site labor?

Mr. FOLEY. Yes.

Mr. GAMBLE. It was 322 percent last year, I think

Mr. FOLEY. That was about the figure that I had in mind, Congressman. I was going to say 34 percent. It would be approximately that. Mr. GAMBLE. I think someone in the building trades stated it was around 33 or 34 percent.

Mr. FOLEY. Thirty-four percent was the figure I had in mind.

Mr. TALLE. And did you have in mind to look into both of those two broad factors to see what could be done in the case of both of them, to bring costs down?

Mr. FOLEY. That is true, sir. We hear a great deal about what causes costs to be high in building-restrictive practices, inefficiency, undue profits, and so on. It has been my feeling, and I think everyone else's feeling who is familiar with the situation, that we are not going to bring the costs down with some few big cuts anywhere, but by the accumulation of many small savings and that would require a very careful examination of all phases.

The CHAIRMAN. Will you yield to me, Mr. Talle?

Mr. TALLE. Yes.

The CHAIRMAN. There is a very important document of the Housing Congress of America, on page 45, with respect to labor costs. They have the statement, reported by Mr. Gray in support of his concession that the percent of on-site labor cost in construction varies from 29 to 34 percent of the total cost and has not changed substantially. Mr. FOLEY. The report and I were in agreement, then.

Mr. TALLE. That is all for the moment.

Mr. FLETCHER. Mr. Chairman.

The CHAIRMAN. Mr. Fletcher.

Mr. FLETCHER. In your study of the whole field of public housing, did you endeavor to find any alternative to the program by which the Government could own the house and rent to those who could least afford? I have given some study to the Government having a private contractor build these houses out of materials which would stand a long-term loan, 50 years, let us say, using an interest rate of something

approaching the present Government bond rate, and not renting but selling to these people who can least afford to own a home, and selling therefore on a basis which would be comparable to what they would be able to rent them for under the proposed plan as contained in this bill. Has your Department given any study to any alternative plan, say, home ownership, giving these people home ownership, rather than allowing them to just continue living in a Government-owned house as a ward?

Mr. FOLEY. Yes, Congressman. Fundamentally, I think our objective constantly must be to broaden the opportunity for home ownership, at all income levels, and again various of the proposals of this bill are aimed in that direction. It remains true, however, that under our present set-up, there are and probably will continue to be a great many families for whom it is impractical, if not impossible, to assume home ownership. And so a plan built solely around the possibility of making a purchase of a home available would not solve the total problem.

Mr. FLETCHER. But if they could afford the rent, which would be greatly reduced as compared to the economic rent, on the basis of which I am speaking, they could also afford to purchase the home at that same rent. Worked out on a long-term plan, at a low interest rate, you will reach the same point, and give them something that they would not have otherwise and you will also prevent something taking place in this country which I think will deteriorate the moral fiber of the country, which is socialized housing.

Mr. FOLEY. What you are discussing, Congressman, of course, is an effort to find another method, an alternative, or perhaps a supplemental method, of providing public aid without public ownership and management.

Mr. FLETCHER. Yes; I think that management would be a very important item. Not only do we build these, but for many, many years we must maintain a very expensive management.

Mr. FOLEY. It has seemed to me, and I have publicly stated before the committees of Congress many times in the past, that we should all be seeking, eventually, to find some praticable method which would contain the assurances that the objectives sought to be served by the housing would continue to be served, but whereby we can at least limit the growth of the necessity for public ownership and manage

ment.

Now, what you are suggesting certainly seems to me to be worth exploring. It would seem to me again only to solve a part of the problem, but in solving a part of the problem, it would be desirable. But in the meantime, as I stated in my testimony, we have not developed any other method. This one has worked reasonably well up to now, so it is proposed that it be continued, in what is, after all, a relatively moderate program as compared to the total possible needs. Mr. FLETCHER. The plan which I suggest would have the advantage of keeping these properties on the tax rolls in these various localities. Furthermore, I believe that the cities and States would be willing more readily to assist under such a plan. Because they could make contributions, perhaps of land, which the city or State owned-there are so many possibilities there.

Mr. FOLEY. I think, Congressman, we should not cease studying every possible alternative method. I also think we should not stop and wait until we have developed one.

(The material referred to above is as follows:)

1 The figures used in this column are actual average figures for local housing authority fiscal years ending in the calendar year 1947.

250-year amortization at interest rate of 21 percent per annum.

3 Actual total average development cost per unit of projects developed under the United States Housing Act of 1937.

Actual average of payment in lieu of taxes.

Service cost on mortgage based on one-half of 1 percent of average balance.

Mr. FLETCHER. I also wanted to know whether you are aware of the danger that a certain number of people who are going to get houses under this plan, and properly so, if they are the most needy and cannot pay the going economic rent-where are we going to draw the line? Does that not mean that the person in the next bracket just above that person who gets a house is going to be the next person to demand a house, and if the Federal Government provides it for this person, it must provide it for the next and the next? Where do you envision the end of this? Does it mean we are going to socialize all the housing of the country before we get through?

Mr. FOLEY. No; I envision the end of it, Congressman-and I have very strong conviction and enthusiasm on this point-in our really being able to accomplish, through private enterprise, what needs to be accomplished with the tools we have which are imperfect, it is true, and by other tools which we will develop as we go on. I am unable to make myself believe that in a nation that has been able to do so much industrially, and in the application of democratic principles in the use of our resources to meet our other needs, that we are not going to be able to develop a system of building houses and of renting or selling them, whereby the great mass of the people of this country will be able to proceed through private channels.

I think our major effort must be in that direction. It is true, as you state, that wherever you draw a dividing line, as you must-especially where a program is partial-there will be those on the other side of the line who think they ought to be in it. That experience we have had, of course, in everything else we have attempted to do in the way of

governmental aid in other fields, and we do have to draw a dividing line.

Mr. BUCHANAN. One further final question, Mr. Foley. Could you give us an estimate of the total authorization for the over-all program? Mr. FOLEY. An estimate of the total authorization?

Mr. BUCHANAN. Yes.

Mr. FOLEY. We have a table on that. I will not try to give it to you from memory.

Mr. BUCHANAN. It seems to me the figure amounts to $6,500,000,000. I am just wondering whether that is correct.

Mr. FOLEY. This table, which I will be glad to furnish for the record, by the way, analyzes and merely sets out in tabular form the various authorizations contained in the bill.

Mr. GAMBLE. Which title, Mr. Foley?

Mr. FOLEY. For instance, the Federal Housing Administration title VI extension authorizes up to $1,600,000,000 additional authorization. The Federal Housing Administration title I program authorizes 10,000,000 dollars additional contingent risk to be taken-that is 10,000,000 dollars of insurance authorization to support it.

The Federal Housing Administration yield insurance program, capital subscriptions, would be 10,000,000 dollars. The authorization for risk would be 1,000,000,000 dollars.

The secondary market program, as set up in the bill, involves a 5-million-dollar capitalization, 250,000,000 dollars direct authority to buy loans, and 250 million dollars in the present, for a total of a half billion dollars plus the amount required to pay for loans taken over from the Federal National Mortgage Association.

Slum clearance and urban redevelopment, as I outlined before, $1,010,000,000-that is on loans-and 500,000,000 dollars maximum on capital grants.

The low rent housing part of the program, on an ascending schedule, up to 160,000,000 dollars per year of assistance through subsidies, which would be reached at the end of 5 percent, and which could continue for the remainder of 40 years.

I will be glad to furnish this table for the record.

The CHAIRMAN. Will that give us the total amount of obligations provided for in the bill?

Mr. FOLEY. That is true, Mr. Chairman.

Mr. GAMBLE. What is the total?

Mr. FOLEY. I do not have them totaled up here.

Mr. BUCHANAN. $6,400,000,000, I believe.

Mr. MONRONEY. A lot of that is just contingent.

Mr. FOLEY. That is right. You see there is a variety of situations. Some are contingent risk and insurance, others are capital grants. Mr. MONRONEY. I think you should separate that in your totals because Federal Housing Administration up to now is showing a profit and we certainly do not want to show it as a $6,400,000,000 expense. Mr. FOLEY. They are set up in this table on that basis.

The CHAIRMAN. That table may be inserted in the record at this point.