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Mr. STERN. As Mr. Colloms said, those who were on relief and those who had no funds could not qualify for these houses.
Mr. SMITH. Are you aware of the fact that there are millions of families in the United States that have less than $800 a year income annually?
Mr. STERN. Yes, sir.
Mr. SMITH. Can they qualify for this project?
Mr. STERN. No, sir.
Mr. SMITH. All right. What about those people? And they are not being supported by public funds. They are making their own way in the world. They are paying taxes to support people in an income group above their own.
Mr. STERN. We feel that in a really well-thought-out housing program-where we gear our industry, finance, and labor to the aid of these people-a sufficiently broad and sizable program could accommodate even those in the income level to which you are referring. But the Government has always operated on a scarcity level in relation to public housing, and it has helped to control and restrict the whole industry.
Mr. SMITH. My point is that you are making a plea here for the downtrodden, the poor. Why do you not accommodate that type of people before you consider accommodating people with a higher income?
Mr. STERN. You are turning the tables on us, I see-at least you are attempting to. But, in your attempt, we would like to be able to present to you a broad housing program geared to aid all people in this country, no matter what their income levels are.
I think the way this Congress has thrown out the Patman Act, the way it has destroyed the Wyatt program-the administration included-and you are attempting now to force an inflated building industry to build only for higher income families. I do not think, if I may say so, that the members of this committee who are not recommending a better program than is now included in the Taft-Ellender-Wagner bill can challenge us for the reasons you have describedfor housing for the lowest-income families.
Mr. SMITH. I do not suppose you do realize that what you are advocating can become harmful to these poor people rather than benefit them.
Mr. STERN. I presume harmful in the sense that they will become demoralized and more indigent. I do not think people work less because they have more income.
The CHAIRMAN. We will have to suspend our hearings at this time as memorial services are about to begin on the floor of the House. We will recess to reconvene at 2:30 this afternoon.
(Whereupon, the committee recessed, to reconvene at 2:30 p. m. of the same day.)
Present: Messrs. Wolcott (Chairman), Gamble, Smith, Talle, Cole, Banta, Brown, Folger, and Buchanan.
The CHAIRMAN. The committee will come to order.
This afternoon we will hear from Mr. George Edwards, vice president of the Americans for Democratic Action. Mr. Edwards also is chairman of the Detroit Common Council, is that right?
STATEMENT OF GEORGE EDWARDS, PRESIDENT OF THE COMMON COUNCIL OF THE CITY OF DETROIT
Mr. EDWARDS. I am president of the Detroit Common Council, yes sir. Mr. Chairman.
The CHAIRMAN. We are glad to have you. You may proceed. Mr. SMITH. May we have some of his background, Mr. Chairman? The CHAIRMAN. Mr. Smith suggests that you give us something of your background.
Mr. EDWARDS. I am a member of the Detroit City Council and have been elected for four terms to that post. Prior to that time, I was director and secretary of the Detroit Housing Commission of Detroit. Mr. SMITH. Are you an attorney?
Mr. EDWARDS. Yes, sir.
Mr. SMITH. How long were you with the housing commission?
Mr. SMITH. That is what we call a local housing authority?
Mr. SMITH. What was your position.
Mr. EDWARDS. I think when I took the position, my salary was $6,000 a year and when I left it was $7,000 a year.
Mr. SMITH. What did you call the position?
Mr. EDWARDS. Director-secretary.
It was the top executive position in the local housing authority in Detroit.
Mr. SMITH. Director-secretary?
Mr. EDWARDS. Yes.
Mr. SMITH. Was that the highest office?
Mr. EDWARDS. Yes. I was responsible to a commission. The commission had a president. The commission was appointed by the mayor. In our city government all of the departments are headed, in authority, by appointive commissioners who passed on all the policy questions. I was the executive responsible to that commission for the operation of the Detroit Housing Commission.
Mr. SMITH. But you are no longer connected with the Detroit Housing Commission?
Mr. EDWARDS. No, sir.
Mr. SMITH. Does the city council have anything to do at all with the operations of the commission?
Mr. EDWARDS. Yes, we pass on the budget of the Detroit Housing Commission, we pass on those of its policies which are not determined by Congress.
Mr. SMITH. Then you do have something to do with the commission? Mr. EDWARDS. Oh, yes. But I am not an official of the commission. I am an elected official of the city of Detroit.
Mr. SMITH. I understand. Thank you.
Mr. EDWARDS. Mr. Chairman, my name is George Edwards. I am president of the Common Council of the City of Detroit. I am appearing here on behalf of Americans for Democratic Action. I am a vice chairman of that organization.
Americans for Democratic Action is a non-Communist progressive organization which is dedicated to the achievement of economic secu
rity for all people within a framework of universal political freedom. Americans for Democratic Action has 110 local organizations in 38 States. Our student organization, Students for Democratic Action has chapters on 140 campuses.
I have just come from a large city in this small world of ours where great numbers of human beings are living under intolerable physical conditions. Much of the heart of the city is rotting in slum. Other parts have begun to show signs of a familiar kind of blight-overcrowding, dirt, noise, smoke, and other diseases of cities that are affecting the health of thousands of its citizens. A depression and a war have stepped up the creeping pace of its spreading slums. That city is sick with a disease that paint and patch-up cannot cover up and cannot cure. The cure must be quick, drastic. Because of long neglect, the cure will be a costly one. Mr. Chairman, I am not talking about a corner of devastated Europe. I am talking about my own home town, Detroit.
I see no value in burdening you with the sorry statistical story which I presented to recent hearings of the Joint Senate-House Committee on Housing of which Representative Gamble was chairman. I would only recall that the last time our town got a physical examination, it turned out that 70,000 families were living doubled up. There were 37,000 married veterans holed up in rooms, cabins, shacks, trailer camps, or poaching on friends or in-laws. The other side of the picture was equally grim. In the entire metropolitan area of Detroit there were only 300 habitable vacant dwellings, 300 houses against 107,000 families. The odds are so slim it would be impossible even to run a decent housing lottery.
This might be tolerable as the exception which proved the rule. But a quick look at the record of hearings on 32 other cities clearly reveals that I could be talking about any one of them.
The history of legislation in the field of housing is a story of makeshift and hodge podge; patchwork and piecemeal; and closely catering to emergencies.
Americans for Democratic Action believes, as I believe, that this bill to set up a national housing objective and a national policy is shockingly overdue. At least two things are essential to the continued prosperity, health and welfare of our Nation and its citizens. We must do everything within our power to make sure that houses are being built for people who can afford to buy them. And we must step in with direct financial assistance to house low-income families whose depleted resources force them to live in the malignant slums which infect our cities and drain our city treasuries.
A free demoncratic economy should set its sights on raising income levels or reducing costs-or both-to the point where every family can afford to live in a decent house. Not necessarily a new housejust a house which meets minimum standards of health and decency. A house to live in-not a house to dream about. The brutal facts of life tell us however, that people with moderate and low incomes simply cannot afford the current high cost of what decent housing is now available. That was true then years ago, when the Temporary National Economic Committee made its exhaustive investigation of the construction industry.
It is even more true today when the subcommittee of the Joint Senate-House Committee on Housing says: "We, the American people,
have long been unable to supply our own housing need." The final majority report of this committee, submitted by Mr. Gamble, officially recognized what we all knew to be true.
The costs of residential construction have gone up even further and faster than the cost of living. An increasing number of families are being priced right out of the market. Just last Friday, the leading front-page story in the Wall Street Journal carried this headline: "Demand for new houses falters as prices rise 5 to 20 percent over a year ago." The story went on to say:
More and more would-be buyers are turning their backs on this season's crop of new houses. The price tags are too big for their pocketbooks. Builders say today's houses cost 5 percent to 20 percent more than those of a year ago and warn they may become even more costly. The need for housing is as great as ever. But each price rise chips away another group of customers. As one builder puts it: "The industry is pricing itself out of its biggest market-the low-priced field."
Instances of buyer resistance were cited from cities in every section of the country-Philadelphia, Pittsburgh, Minneapolis, Dallas, Binghamton, New York, Boston, and San Francisco. The story was based on a survey made in 16 cities. The reports from all over echoed the statement of one regional Federal Housing Administration representative, "People just cannot afford to pay the prices demanded today."
If this cost situation continues, even our present feeble little boomlet of private-housing construction will peter out before the housing shortage has been met. This drop will affect the ability of our economy to maintain maximum employment.
You gentlemen remember what happened 20 years ago. In 1926, building reached its peak. The drop-off helped to nudge us along into the 1929 depression. The building decline followed a building boom in which prices ran far ahead of the ability to pay. The relation of housing costs to the ability of homebuilders to pay got so out of kilter that the building boom turned into a bust. This decline in building was unquestionably one of the major factors in the 1929 economic collapse.
Americans for Democratic Action believes and I believe that housing construction is an important bellwether of our economy. If houses are going up, we need not worry too much about a depression. Home building is the generator that activates hundreds of other industries. If houses are not going up, we should take warning.
Americans for Democratic Action believes and I believe that the bill this committee is now considering will do these things:
It will make possible construction of enough houses to start cutting down our shortage.
It will keep houses going up in numbers large enough to approach the total need.
It will do this at prices that bear some resemblance to people's pocketbooks. Let us not forget that the design of this bill is the result of years of study by various committees of the House and Senate. Nearly 3 years ago July 3, 1945, the House Special Committee on Postwar Economic Policy and Planning issued a report on Postwar Public Works and Construction which said:
It has long been a matter of public concern that construction of small units in general, and home building in particular is too expensive to be within reach of those who most critically need it.
The committee then discussed various things Government could do to stimulate housing production. It advocated Government stimulus not only to private building but provision for public housing as well. As a matter of fact, that report made a positive statement about Federal responsibility for public housing which deserves repeating in the light of questions raised periodically about Federal responsibility in the field.
The committee said:
The committee recognizes that there is an area of housing at the lowest rent levels which private industry cannot afford to serve and which local government is not fully capable of serving. The problem of public housing is therefore one of national as well as of local concern. Any program of Federal cooperation with local governments for postwar construction must accord a permanent place to the making up of the large deficiency in housing for low-income families.
I think that statement answers all the questions raised before the committee and by some members of this committee about the propriety of the Federal Government assuming responsibility and concern in the housing field. I subscribe to it. Millions of homeless Americans subscribe to it. And your chairman, Representative Wolcott, who was a prominent member of that committee, deserves our congratulations for subscribing to it. Cooperation of the Federal Government in public housing is a responsibility of a democratic government. And no time-worn cliches about socialism or communism or anything else should blind us to the responsibility which the committee declaration assumed.
No one can honestly question that Federal responsibility exists. It has been clearly recognized by various acts of Congress-when Congress established the Home Owners Loan Corporation, the National Housing Act, and the Federal Housing Administration; when it set up the Home Loan Bank Administration and the United States Housing Act of 1937. All these acts were segments of one broad policy which this bill fits together so that we may operate more efficiently and more effectively.
Congress took the first step when it established a permanent housing and home finance agency to unify and direct the total Federal housing operation. This bill is necessary as a framework for an undertaking we have already begun. But we must go much further if we are going to do the whole housing job.
From June 1, 1944, to February 7, 1945, the Subcommittee on Housing and Urban Redevelopment of the Special Committee on Postwar Economic Policy and Planning, headed by Senator Taft, held exhaustive hearings during which every conceivable point of view on these questions was minutely explored. The record runs to more than 2,000 pages. The report of that committee, submitted by Mr. Taft on August 1, 1945, made recommendations which were incorporated in Senate bill, 1592. Over 1,200 pages of testimony were taken in hearings on that bill, and it was favorably reported and passed by the Senate in 1946. The Legislative Reference Service of the Library of Congress prepared a complete printed digest of the testimony both pro and con. Because the bill expired with the Seventy-ninth Congress, another bill-S. 866-substantially the same as S. 1592, was introduced in the Congress and again hearings were held which ran to 647 printed pages.