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Now, the most controversial thing in the bill is in title the thing that really, I think, proposed all the opposition in the bill-is title IX, page 69, which continues the Federal public housing program. There has been no money authorized for additional public housing since I came to the Senate in 1939. Efforts to increase the amount authorized in 1939 were not successful, and the housing built since that time has been entirely on the basis of war and not on the basis of housing to take care of low-income groups.
The proposal is that we authorize 500,000 units under substantially the same formula of Federal subsidy which was pursued before. The 500,000 units to cover 4 years.
Roughly speaking, our idea was that during those 4 years public housing would be about one-tenth of the 1,250,000 houses which we felt the program should produce.
I have said, myself, frequently that I have no desire to run a publichousing program over 10 percent of the current construction. The whole subject of public housing is discussed in this report, and in the speech which I made here of which I will send a copy to each member of the committee.
My feeling about the housing problem and the necessity for public housing arises from these circumstances: Housing is a necessity just like food, clothing, and Federal care. It is almost a greater necessity, because every family must have shelter and reasonably satisfying shelter.
Unfortunately, housing has a problem that the others do not have. It is out of proportion in its cost to food or clothing or other necessities of life. The cost of building a house is out of proportion to the income of the people. A new house-well, it is pretty hard to talk figures, because figures have changed so rapidly, but the figures that I used here back in 1940, before the war-you can take a house which cost $4,000. That was about the lowest you could build a house in any city at that time-that $4,000 house cannot be bought or lived in with any payment of a return on the value of the property, for less we will say than $30 a month rent, $360 a year.
That is 9 percent, and as a rule it really comes pretty close to 10 percent. A man cannot pay $30 a month rent very well unless he is making about $1,500. That makes him pay about 25 percent of his income in rent rather than 20, which is the more usually accepted standard.
So that in 1940, a $4,000 house, a new one, could not be lived in by anybody with $1,500 or less income or less than $1,500 income. About half of the nonfarm families had less than $1,500. In other words, your market for new houses then-and the same thing is true today with relatively similar increases in costs and wages, the market for new houses is confined to half the population. The other half cannot buy a new house.
You say they can buy a second-hand house. It is true, but a decent second-hand house ought not to depreciate in value very much from the new house. There is no particular reason why, if the neighborhood remains decent and the house is in good condition, that it should not rent for just about the same as a new house, and the result is that the cost of housing, old and new, is almost beyond the means of half the population. It is said that you are going to take care of the lower income families by hand-me-down houses. They
buy a second-hand house, third-hand house, and so forth, and, of course, that is true to a considerable extent.
It is also true that a lot of houses on the outskirts of cities, without water facilities, and so forth, and decent surroundings where children can grow up properly, cost still less, and you take care of a certain number of people there, and so the hand-me-down theory works until you get down perhaps to people who have less, we will say, at that time than a thousand dollars a year income people who have to pay rent of $15-who cannot pay $15 a month—or less.
There is no possibility of building a house or buying an old house and making it decent for people who only get $15 a month rent except well out in the periphery of cities, well out in the outer sections, where there are no facilities to pay for it, practically semirural houses. Senator BUCK. Is the situation today worse than what you cite? Senator TAFT. I think the situation today is worse. I have not got the relative figures but that is the situation we have to meet.
Now what has happened is that you have had this hand-me-down theory working and it works down to a point where the five or six million lowest income families live in these five or six million substandard houses, and they are going to go on living in them because nobody can afford to make them higher standard at the rents that those five or six million can pay.
The private enterprise system says, "Let us do it and we will provide these houses," but they never have provided the houses. We have always had the slum conditions. We have always had a large number of indecent houses, under the play of the private enterprise system, for the simple reason that they cannot do it. They say that public housing would compete with them. It does not compete with them because they cannot possibly construct houses for people in the lower income groups, and what happened in 1925 is exactly what is going to happen over again.
You built up the number of houses after the last war very rapidly until you got 225 or '26 and then new housing began to fall off, although we were in the most prosperous period we have ever had in 1927, '28, and '29, still housing fell off because the market had been exhausted. They were unable to take care of the lower income groups and they did not have enough of the upper groups to buy any more
Of course most people are not in the market for houses. Most people once they build a house they have got that house for life, and they are out of the market. I do not think there is any competition because the people who live in public houses are perfectly unable to buy a new house or even unable to rent a house which is in first-class condition today, so that my feeling is that the justification for public housing is that if we are going to solve the problem we not only have to come in from the top, we not only have to encourage private enterprise to build cheaper and cheaper and reach down, we not only have to have intelligent plans for rehabilitating old housing and getting it perhaps a little cheaper than new housing but we have to come in from the bottom and eliminate the disgraceful type of housing in which the very poorest groups live.
Senator Buck. Does this bill provide in the public-housing section that you remove some part of the slum area in the city?
Senator TAFT. Yes; it has that provision as in the old one.
Senator BUCK. It is compulsory.
Senator TAFT. Yes. That must be part of the condition. It also provides that no one can live in or remain in a house, whose income is within 20 percent of the figure necessary to rent old type of decent housing in that city. Sometimes I thought we ought to have a more definite standard. I have urged the opponents of this bill, if you do not think that standard is so, if you think there is going to be abuse of this thing and people are going to be allowed to live here who ought to buy the new houses, then come in with a more definite restriction, put a dollar restriction, people with incomes of more than so many dollars cannot live in this housing.
You would have to vary it in towns of different sizes, but I think what we have got here is all right. If it is criticized put in another one. Certainly the theory of the authors of this bill is, first, that the Federal Government shall not do this at all unless the local district and the local city government asks that it be done and makes the plans for doing it and prepares to put up some assistance to carry it out.
Second, that no such housing shall be used by anybody except people who are wholly unable to buy new housing or even live in current old housing that is of a decent character.
If the restrictions aren't strong enough, make them stronger. The authors of the bill certainly agree that that shall be done. It has been abused. Anybody has been able to point to people who have lived in public housing with incomes of $3,000 or $3,500. I think that condition may be the Housing Administration was to blame-but in general the condition was caused by the fact that during the war, with the shortage of housing, we had to permit war workers to come in, people who had been getting a low income went to work in the plants and their income doubled and tripled and under the policies of the Administration you could not put them out because there was no place to put them and you had to have them there for war workers. There was serious abuse. You can have all sorts of testimony to that effect. We have tried to tighten up this bill so that that would be impossible, so that in substance as far as a place like Cincinnati is concerned a man cannot live in the house if he has more than $1,000 income. It is to take the thing off the very lowest group.
I may say that I justify Federal interference in my general theory that the Federal Government is interested to see that there is a floor under the necessities of life for all the people in this country, to give equality of opportunity, particularly to the children, in all fields.
As you know, I have introduced a bill to give a better minimum education. We have introduced a bill to give free medical care to those unable to get it at the bottom basis. There are necessarily restrictions and conditions on which that kind of aid must be given, but I do not think that there is any field in which it is more important than in housing.
I do not think it is any more socialistic to provide Government assistance for the furnishing of minimum housing standards to people than it is to give free medical care, as we do in every general hospital, to give relief to people who through their own misfortune or otherwise are unable to even get the very necessities of life. It happens that housing has not been a field in which government has done job at all in the past but I see no reason why the same principles do not apply,
and for some reasons I think they ought to. I might say one thing, that it has been proposed that we take care of this by rent certificates, that is to say that everybody who cannot afford to live in a house we will give him a rent certificate and he will go around and use that as money in effect as rent to rent a house.
We went rather elaborately at that plan in the committee, and we did not think it would serve the purpose. We did not think that people would build houses on the chance that 4 or 5 years from now somebody would be getting rent certificates or would not get rent certificates. We did not think it would stimulate the construction of the houses necessary. We did not see how it would get rid of the existing slum areas. It might even make them more profitable and more difficult to buy because people would get their rent certificates and you would have to have quite a control because you would have to go around and see what they were giving their rent certificates for.
We considered the matter of subsidizing private people to build housing of this sort, and of course under the FHA provisions in a way you are stimulating that and trying to assist it, but an absolutely low rent housing project, where the Government directly subsidized tenants, in our opinion would not be attractive to anybody who wanted to put money into housing. They have to submit themselves to a 100 percent Government regulation; they have to have the Government tell them exactly what rents they shall pay. They become in effect, Government agencies, and we could not find any practical plan, and no one proposed any plan to us, in our committee, that seemed a practical method of getting rid of the slums through the subsidy of private housing developments of the general nature of public housing developments.
Now, that is the general question. As I say, the opposition to the bill really arises while there is a lot of talk and discussion of various features of it, it really arises from the opposition to public housing, and the thing this committee has to decide basically is whether or not the Federal Government will continue with a public housing program.
Senator Buck. Thank you, Senator.
Are there any questions?
Senator FULBRIGHT. On that last point, is there a limit on the amount?
Senator TAFT. Last year we had four years at $22,000,000 a year which made $88,000,000, was the permanent subsidy the Federal Government would put up to subsidize low rent housing, in addition to what they do now which is around $30,000,000, I think; $88,000,000. Senator FULBRIGHT. For 4 years?
Senator TAFT. That covers a construction program for 4 years. This only deals so far as public housing is concerned, with a construction program for 4 years. It probably will take longer to do it than that, but that is the program, the theory being that when you get through with that you take another look at the whole proposition. Maybe conditions will have changed. Maybe you have got the cost of housing down. Maybe it will be unnecessary to continue the program at all.
If you completed that program it would cost the Government from that time on, for a good many years to come, under the old bill, $88,000,000-we have raised this $26,000,000 a year because of the
increase in costs-which would be $104,000,000 a year, for the Federal Government contribution to public housing.
Senator FULBRIGHT. You said $104,000,000 a year?
Senator TAFT. $104,000,000 a year for some 40 or 50 years to come. It would be a permanent subsidy of low rent housing: In effect, you are subsidizing the tenants who are living in those houses from time to time. I will not try to describe the whole formula which is very elaborate. You add that to the $27,000,000 and the $20,000,000 and the urban redevelopment, and it would be about $150,000,000 a year.
If we can make a very substantial step forward in housing and even take the edge off the present problem I do not think $150,000,000 a year in a total Federal budget of $25,000,000,000 or $30,000,000,000 is an unreasonable amount to try to solve what I think is one of the most serious social and economic problems the country has before it. Senator BUCK. Any other questions?
Senator ROBERTSON. Mr. Chairman.
Senator BUCK. Senator Robertson.
Senator ROBERTSON. Senator, I recognize that we are dealing with a very serious and vital problem. There is no doubt about the fact that there are many farm homes that are poor and many small towns that are poor, and in many of our large cities there are slum conditions that are really distressing, but I have attempted to bring to consideration of public spending the same principles that I have been forced to apply to my own.
I consider a project that I think is very desirable to go into and then I ask myself what it would cost and then I say, "Can I afford it?"
I have listened with the greatest of interest to your able and illuminating speeches on the proposal to put a limit on the budget. While I did not go along with your proposal of a 6 billion dollar cut I did. vote for a 42 billion dollar cut because I wanted to see economy, if not at possible expense to the essential defense.
Senator TAFT. May I say that I was opposed to the 6 billion dollars and voted for the 42 billion dollars also.
Senator ROBERTSON. Yes; that is right.
Senator BUCK. Was that to make leeway for this housing program? Senator TAFT. One of the reasons.
Senator ROBERTSON. This is my question: Would you be willing to increase the national debt if it was necessary to do that, in order to carry this program through?
Senator TAFT. No. And I would say this: My own theory has been that we ought to increase the total expenditures of the Federal Government in the general field of social welfare. I think the health bill is about $220,000,000 and the education about $250,000,000 and this is $150,000,000-that we ought to be willing to increase the total expenditures of the Federal Government for public welfare by something like a billion dollars before we finally get through with setting up what I think the Federal activity ought to be.
I am perfectly willing to limit this bill and any of the other bills to an over-all determination by the Appropriations Committee, whether we can start it this year or not. If we cannot start it this year-in fact, in one of the bills I wrote a provision that the first year of operation should be postponed a year, if the Appropriations Committee found that it could not be included within the over-all plans for this year.