STATEMENT OF COLEMAN WOODBURY, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF HOUSING OFFICIALS

Mr. WOODBURY. Mr. Chairman, I have here a short statement which I think will take me about 5 minutes to read, possibly. The CHAIRMAN. Go ahead.

Mr. WOODBURY. My name is Coleman Woodbury and I am the executive director of the National Association of Housing Officials. The association's primary purpose is to help in improving standards and practices in the administration of official-housing programs. Although it does not formally act on housing bills, Federal, State, or local, I am confident that an overwhelming majority of its members do strongly endorse the objectives, principles, and substantive content of S. 866.

I understand that your committee wishes witnesses to confine their discussion of the bill largely to differences between its provisions and those of S. 1592 passed by the Senate of the last Congress. To save as much of your time as possible, may I limit my remarks to suggestions on three points:

(1) First, there is wide agreement, I believe, on the need for better information and analysis of local housing needs and markets. Probably no activity comparable to housing in size and importance proceeds with so little reliable, up-to-date information on the nature and extent of the needs it is trying to fill. This accounts in part for the sharp ups and downs in volume of housing produced. It also contributes to the volume of misunderstanding and of heated but often unnecessary controversy among the various kinds of housing producers and agencies.

S. 1592 not only authorized the National Housing Administrator to encourage local market analyses and surveys of need but also authorized him to give financial help on a 50-50 matching basis to official local bodies for these purposes.

S. 866 drops out the provision for financial aid. I would suggest that the committee might consider putting it back for a limited period of time; the amount would be small as housing figures go; it could benefit the whole range of local housing agencies and enterprise; the results would also be of real value to Federal housing agencies in their programs and to the Congress itself in determining national housing policy.

(2) Both S. 1592 and S. 866 would provide a 20 percent gap between the upper rent limits in public housing and the lowest rent in a locality at which a substantial supply of decent housing is available—either newly built or second-hand.

Although the provisions of the two bills are the same on this point, I venture to call it to your attention today because I believe that during the last year or more, the movement of housing costs and family incomes probably has increased substantially the proportion of families who, under this policy, would have access to no supply of decent housing-privately built, secondhand, or local authority.

Although I firmly believe that public housing should be confined to needs safely below those served by private builders, I would suggest that your committee might consider whether the 20 percent gap provision, under present conditions, is not unnecessarily severe.

If you should agree on this point, the provision might be modified without endangering the principle of adequate separation. The gap, for example, might be reduced from 20 percent to, say, 10 percent. Or it might be kept at 20 percent but be measured between the upper limits of local authority rents and the rents of newly built private housing. Under the latter provision, families whose rentals fall within the gap would often be able to get acceptable housing via the handing-down process.

(3) The earlier bill provided for a national housing agency, the Administrator of which would have general supervision of three operating constituents, each of which, however, would keep a very substantial amount of administrative discretion and responsibility. S. 866 created no such agency but in its place, provides for an eightman coordinating council presided over by a National Housing Administrator who, in addition to his responsibilities as leader and spokesman for the council, is also responsible for administering the Federal aids for land assembly and redevelopment. And he is specifically prohibited from delegating any of his functions and powers in respect to urban redevelopment.

Although the parallels are not exact, the committee-coordinator arrangement has many similarities to the set-up of the Central Housing Committee, established as an administrative device in 1935, and the Division of Defense Housing Coordination, organized in 1940.

I would suggest that the committee might find the record of these two organizations pertinent in deciding whether the proposed National Housing Commission is the best set-up for its purpose. If some such arrangement is kept, I believe the position of the National Housing Administrator would be somewhat more tenable if he were able to delegate his functions in respect to urban redevelopment. In closing, may I thank you for this opportunity to comment on some phases of the bill. May I also say again that with or without the changes suggested, its passage would, in my opinion, be a real milestone in housing progress in this country.

The CHAIRMAN. Thank you very much.

STATEMENT OF F. H. LAGUARDIA, CHAIRMAN, NATIONAL FAIR RENT COMMITTEE, WASHINGTON, D. C.

The CHAIRMAN. Fiorello LaGuardia, sometimes known as the Little Flower, but I paraphrase that. I call him the little giant. Here he is.

Mr. LAGUARDIA. Thank you very much.

It is my understanding that a basketful of rent-control bills has been introduced into the Congress and, if you put them together, the schemes run all the way from abolishing control of rents to throwing an essentially administrative function into the courts and bogging down the local judicial administration to flat increases varying from 10 to 20 percent.

I want to judge these various proposals by a rather simple measuring stick: Will they maintain stable rents throughout the United States during this acutest housing shortage in our history or will they not?

If they fail to maintain stable rents, I do not care what kind of administrative language you write into the bill and what formula you

use and what confusion may be spread. I and the committee I represent are opposed to them.

We are not launching on the discussion of a new problem about which there is no past experience to guide us. Effective rent control has been in operation 5 years. Nobody has come before this committee and maintained that in the over-all this has not been one of the most successful Government programs of the war and the postwar period. Now why should we wreck it? Why should we want to destroy what we already have?

At this stage of the housing shortage, what is the purpose of departing on all kinds of newfangled schemes which have never been tried out and which nobody knows anything about? What is behind it all? Effective rent control?

We have got effective rent control. It is perhaps possible that the real intention behind this basketful of bills is to have less effective rent control; to raise rent ceilings all over the United States in one form or another.

In many ways, the frank bill, which abolishes rent control outright, is the most honest and most straightforward. There are others which aim to achieve the same purpose by subterfuge or beating around the bush, but their real intent is the same.

Now I have had some rather substantial experience with the current administration of rent control in New York City, and through my contacts with mayors throughout the United States I have a pretty good idea about what has happened elsewhere.

You do not have the mayors of the United States coming to you and asking for 10 percent increases or a law which throws the whole problem onto the courts, or peculiar language provisions which end up by making public utility cases out of every one of the 16,000,000 rental units in the United States. You do not have the State Governors of the United States coming to you with the request that they be given this burdensome and thankless task of controlling rents. They do not want the hot potato.

What, then, is the force behind this drive to kill effective controls? As far as I can see, it stems from one source, a powerful lobby of the National Real Estate Board composed of equally interested boards operated throughout the United States. And what do these men want? Something very simple. They want to charge all tenants in the United States whatever the market will bear. They want to be able to evict any tenant at will and to throw him out because he will not pay the rent increases they demand.

Now, I believe in free enterprise and I believe in free bargaining among Americans but I do not believe in monopoly. At the present moment, there is not a single city in the United States which has vacant a fraction of 1 percent of habitable rental units.

Under such circumstances, there is a condition of virtual monopoly on the part of those landlords who have control of the housing facilities of this country. There can be no free bargaining under such conditions. If we give such a monopoly full play, then we do not have free American bargaining and we do not have free enterprise, we have extortion.

Adequate protection of 16,000,000 American families who are tenants require that the Government control rentals as long as it is impossible to have free bargaining.

But let us look at the other side of the ledger. What about the landlords? Have they been suffering under the existing system of rent control? When an industry is hard pressed and is in bad shape there are usually certain indications which any American can look at Well, let us look at the real estate industry. First, what about real estate prices? When an industry is not earning decent profits and is in a position of so-called hardship, one would expect that sales prices would be on the decline. But what are the facts? If you look at any of the indices of real estate bonds in New York, and other metropolitan centers, you will find that they have been rising and are still rising. You will find that big apartment houses are today being passed from hand to hand at higher prices than they ever have been. Is this an index of a suffering industry?

In the past, there have been periods when real estate was hard up and everybody in the country heard about it. There were thousands upon thousands of foreclosures. What about the rate of foreclosures today? A very careful index is kept by the Federal Home Loan Bank Administration and from this index it appears that the rate of foreclosures in the United States today is lower than it has been in our whole history.

If real estate bonds are going up and foreclosures are almost nonexistent, why the outcry? There is a further indication of the profit position of landlords over a period of 5 years. Government accountants have sampled the books of real estate management in more than 90 cities in the United States. They have actually gone to the record and have copied data from these records without change. They have compared the current operating position of landlords with their position in the prewar period and during the years of the war.

No committee of the real estate board has been able to come in here with any samples of operating records which are comparable to what these Government accountants have presented to the Congress year after year. They neither have the facilities nor the will to undertake any such authentic survey. They can only make generalizations without facts.

Now, what have these accountancy surveys shown? These accountancy surveys have revealed that the current operating position of landlords is 43 percent better in small structures and 27 percent better in apartment houses than it was in the prewar period.

As long as such manifestly profitable position is maintained, I can see no earthly reason why proposals are forthcoming to burden 16,000,000 American families with a 10 to 15 or 20 percent increase in

rents.

According to expert testimony before your committee, a 10 percent increase in rent would jump the operating position of landlords 60 percent; a 15 percent increase, 80 percent; and a 20 percent increase, up to 100 percent.

What justification would exist for giving this windfall to the landlords of the United States? What reason moves us to this? It has been maintained that rent control is an absolute freeze; that a landlord never gets an increase.

Well, I went into the facts. I asked the administrators of rent control to show me the records. I saw the figures myself and what did these records show? They revealed that in the 5 years of rent control, a total of 1,700,000 petitions for increases on various grounds

allowed under the regulation were presented to local area directors in some 600 offices throughout the United States, and of these 1,700,000 petitions, fully 1,000,000 were granted.

True, three out of every four were a rent increase under the regulations because the landlord was expending more money on some improvement or increase in service. But at least one out of every four of these petitions was the result of a showing by the individual landlord that he was in a position of hardship as the result of some peculiar circumstance or as a result of the record of his operation.

Now, I consider that a very adequate record of administrative flexibility rather than inflexibility and this is the process which I would like to see continued.

Individual landlords are getting increases today at the rate of 30,000 a month. This seems to me to be a fair and just showing. If we were to have legislation which allows for hundreds of thousands or millions of increases, then we are really beating about the bush achieving in a subtle manner what many of us do not care to say openly, namely, cracking the rent ceilings of the United States.

Now, landlords as a class are in a rather enviable position. They suffered none of the difficulties of the transition from the prewar period to the war economy or the transition from wartime economy to a peacetime economy. They are assured of 100 percent occupancy, house full up, for at least the next 5 years. They do not have to do any competitive decorating or repair or maintenance to attract tenants. In reality, they are keeping their painting and decorating and other maintenance to a minimum, as any American tenant will testify.

Let us consider the risks and dangers of any over-all increase in rents. We have obtained in the last month a relative stability of labor-management relations; contracts are now being negotiated. Now, surely the Congress does not want to throw a bombshell into these negotiations. A further increase in rents would force labor leaders to raise their demands in order to protect the standard of living.

Is this the skyrocketing cycle we want to give another push to? What about the old people of this country-the hundreds of thousands who live on small pensions? What about the veterans to whom we have given an opportunity to go to school on a budget which is hardly adequate for subsistence? Are these the people we want to impose upon? Surely it is not the policy of this Congress to reduce their standard of living still further.

I have heard a lot of nonsense about ending rent control in order to end the housing shortage. I have heard the real estate lobby come before you and maintain that if you end rent control, there will be more space; a lot of single people living alone will be forced to double up and veterans with families will thus have better places to live.

In my life I have never heard a more vicious argument. If you take ceilings off rent, it stands to reason that the family man with a brood of children is the one who is hit first and hardest. He is the man who will have to double up to the detriment of his family's health and welfare. The single person will somehow be able to get along and pay the increase.

I have heard that rent control is a hindrance to new construction and conversion. There are proposals to let new construction go sky