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that will refuse to meet their obligations, and even those whom we have had to evict from our project because of absolute inability to meet the income requirements, after they had left the project for a period of years, and had reestablished employment and made savings have come back voluntarily to our project from which they were actually evicted-members of our own union who instead of feeling resentful for being evicted understood the situation and came back and paid their back rent.
We think there is ample experience in the management of consumersponsored projects over a period of years, to completely warrant assuming the safety of such provision of that sort that there would be no loss to the Government.
We think that that can be checked, that the Federal Public Housing Authority has got a very careful record of the regularity and the consistency of payments in their Mutual Housing Division, with projects with which they have been dealing and the Amalgamated Clothing Workers, for instance, could bring in very real evidence of straight cooperative type of housing development and its operation.
We wish to recommend very strongly also that the language of last year's act, regarding the so-called displaced persons in slumclearance projects, be somewhat reinvestigated so that in the urban redevelopment features of the bill, with specific reference to the slumclearance projects-to those persons who were dehoused as a result of other undertakings, say a new artery opened and a new part established and there should be some specific priority for those individuals, and I think that should be stated in the bill.
We would like to call your attention to the fact that completely related to this problem with which you are grappling here, we are trying to get construction under way for various needs and for various parts of the country, different types of housing, but it does all go back, Mr. Senator, to the problem of building materials.
The cartel, as Mr. Nicholas said, does not operate merely from the standpoint of restrictions at the actual point of assembling materials to erect housing at the site, but we feel very strongly, sir, that any investigation would prove that there is definite holding back in the production of materials, and certainly there are not enough materials being produced, and I think that in connection with the enactment of your program here that you will have to call the CPA up and talk to them about what they reasonably can expect to be produced in the way of building materials.
You can have a swell program here and cost limitations, and you will not be able to come within the terms of your act because you do not have the stuff to build with, and there are all kinds of reasons for that. I will not take the time of this committee but I will just indicate that that is an important avenue of investigation because I am afraid, sir, under present circumstances, this stuff is not there.
The whole question of lumber, the whole question of variety of materials, in addition to all of those things which are covered by specific categories, such as plumbing materials.
Let me just relate my personal experience very briefly. It will take just 2 or 3 months, in relation to this question of our request and recommend, sir, that the provisions of S. 1592 be reestablished in relation to the 95 percent insurance nonprofit mutual type of housing project.
Let me also refer to the fact, since Senator Flanders has mentioned the fact, that this identical provision-and almost the identical language if you will look up the history of it-was in early drafts of the first Wagner bill, and was, if you will look up the record of it, eliminated in Senate committee and Senate debate, some portions of it in conference.
It was all in there and what we are now asking you, sir, is as a result of 11 years' struggle to bring these causes back into a Government housing program. We testified here last year-and we urge you to read our testimony, of a series of witnesses that we brought up here, say, from Audubon Village, Camden, N. J., where there was an admirable Lanham Act project.
I must parenthetically call your attention to the fact that there is a project, Senator, that the workers today have not got the money, are are not prepared from years of thinking to negotiate a sale of that project to the Government which may constitute an excellent buy to the Government, the Government could get back a very substantial, if not the entire, portion of its expenditure for that project but it would substantially recoup itself for its outlay. It is held up, sir, by the most fantastic and ludicrously irrelevant building-code regulation which follows the title of that project which makes it impossible for this sale proposition to go through, handicapping not only the individuals involved, sir, but the Government in making a businesslike transaction which will recoup it for a
The CHAIRMAN. What is the strength behind that set-up?
Mr. EDELMAN. The shipyard workers sponsored with the Government a mutual housing project in which they-
The CHAIRMAN. Yes; but what is the set-up of the feature that holds this work up?
Mr. EDELMAN. It is a code, it is a violation. The local building code claims a technical violation, in this federally erected project between what its regulation is and the type of construction.
It is admitted by every technician that this is an admirable house, physically and from every planning standpoint superior. It has been a project, sir, which has been put on by housing experts all over Europe as a perfectly swell example
The CHAIRMAN. Have you approached the mayor of Camden and put the matter before him?
Mr. EDELMAN. It is not Camden, it is the borough of Audobon. The CHAIRMAN. The borough commissioners?
Mr. EDELMAN. Yes, sir.
The CHAIRMAN. And what do they say? You point out the exhibit of a monstrosity holding up a good project. What do they say when you ask them about it? Somebody has authority over that building code.
Mr. EDELMAN What happens is here is a group of industrial workers on the fringe of a middle class community. The middle class community, sir that is the real trouble-the middle class community does not want this group of industrial workers living as a matter of fact under superior conditions and very much lower costs, I mean the per units construction of the industrial workers project on the edge of this middle class community is actually a lower cost per unit than the individually owned houses. They are utterly jealous as to the political situation and they refuse to accede to this problem.
The CHAIRMAN. Class conscious?
Mr. EDELMAN. Exactly and that is a very frequent situation that you will discover here.
The CHAIRMAN. That is a part of human nature.
Mr. EDELMAN. That is part of human nature, sir, but ultimately there will have to be an effort made under the leadership of the Federal Government to cooperate with States, local governments, to remove of course this type of restriction, and we feel very strongly, sir, that if some investigation is made here, formerly by the Congress that that whole problem should be included within the purview of this investigation, to highlight it and ultimately bring about some changes. Just let me say one final question.
We said last year that these mutuals, these nonprofit type of developments, would develop rapidly, that they would come up and they would offer their, as it were, volunteer leadership, their volunteer services to help meet the needs of this situation, and to relieve the Government, so to speak, of any obligation to meet that problem if we were met with these slightly relaxed financial features.
We can tell you, sir, that there has been an enormous expansion of interest in that field, that we now have groups in virtually every important community in the United States, not merely composed of that, say, of CIO people, but a cross section of consumers and CIO members.
We are very much interested in undertaking, particularly these veteran groups, at this time, for housing. A number of projects have been undertaken, of that description.
The CHAIRMAN. You agree with me, do you, that there is a great field for help to mankind in the housing problem through cooperative housing units?
Mr. EDELMAN. We have been preaching that, sir, for 12 years. And just to say why this 1 percent is needed, we find, to put it into a concrete nutshell, in my project at Front Royal-when I say "my project," I happened to be chairman of the corporation, my union asked me to undertake this, a nonprofit development for a group of rayon_workers; we could not man a plant which was a high priority war plant, for tire fabric. Senator Maybank might jump on me for treachery to cotton, but the fact is that we were faced with that requirement. We could not man the plant with the type of housing in the community. We had to do something about it.
We tried to break the bottleneck by undertaking to demonstrate something ourselves.
Many of the workers, even before we had a corporation established, before we had any organization whatsoever, the workers that were there that had worked a while, most of the workers in that plant were new people that had no savings, they were people who were brought from the rural districts. They were brought in there. Anybody who had a few dollars was willing to gamble.
We got the work done, hired the technicians, lawyers, engineers. We got the whole thing cleared, up to the point where the FHA said to us, "Now, everything is set; our commitment goes into effect, but where is your money for development? You have to have some capital to work with. You have to have some capital here to get along with." And at that point we were completely stuck, sir. were completely licked.
The CHAIRMAN. Am I right or wrong that in the Government set-up for aiding projects like this there is a field where loans can be made to people on a corporate basis?
Mr. EDELMAN. Under the present circumstances, none whatsoever. The CHAIRMAN. You are quite certain of that?
Mr. EDELMAN. I am quite certain of that. What you really do is get the conventional type of payment to the contractors under the FHA type of financing.
Now, bankers, we found, sir, are very willing to go far beyond what FHA requires of them, to advance us funds, but under no circumstances can we, under present circumstances-the time schedule does not permit them to give us advance loans.
We had to go out to our own local unions. We had to run to our local unions throughout the country and borrow money from them, which was not a good thing to do.
The CHAIRMAN. Here is a committee sitting on a very complicated subject, you will agree.
Mr. EDELMAN. Yes, sir.
The CHAIRMAN. It has many shades, and things we do not understand. We are searching for wisdom and you men are attempting to supply it to us. We all know there is a shortage. We all desire to be helpful. We may differ about the modus operandi.
We have a lot of people who, the most important thing in the world, are suffering for lack of housing. There are a lot of torpedoes in the way, so to speak. You have stated some. Others have cited some. My own philosophy, speaking for myself, is that we have to have the philosophy of Farragut in Mobile Bay, "Damn the torpedoes! Full speed ahead!"
Speaking for myself, it is possible to bring order out of chaos if we do that. Back of it I see people, the most important thing in the world. It is not a system of government or banking, but it is housing for people. We cannot give them homes. That is something they have to do. But we can give them housing. As Edgar Albert Guest said, "It takes a heap of living in a house to make it home."
I do not know how this will wind up. But speaking for myself, this is a heart-burning project. It is a tough one. The objective is housing for people, and it is not much of a country if people cannot find places in which to live, decent places in which to live.
Mr. NICHOLAS. Mr. Chairman, the CIO commends the position you take.
The CHAIRMAN. It is my purpose and my heart.
Mr. NICHOLAS. It is my sincere hope that that same view will be taken by Congress.
Mr. EDELMAN. Senator, this little saying that is now going around might interest this committee. I notice that somebody mentioned it to me the other day: "Have you heard about this housing shortage?" And the answer was, "Housing shortage? What is that?" The reply was, "There is a rumor, sir, if you please, started by people who have no place to live."
The CHAIRMAN. That is a fundamental source, is it not?
Mr. EDELMAN. Yes, sir.
The CHAIRMAN. We will call to the stand Mr. Edward Weinfeld, of the National Public Housing Conference.
STATEMENT OF EDWARD WEINFELD, APPEARING FOR NATIONAL PUBLIC HOUSING CONFERENCE, WASHINGTON, D. C.
Mr. WEINFELD. My name is Edward Weinfeld. I am appearing here as chairman of the legislative committee of the National Public Housing Conference. I was formerly the State commissioner of housing in New York State.
Mr. William J. Guste, president of the National Public Housing Conference, testified before this committee in support of S. 1592, Seventy-ninth Congress. His testimony will be found on pages 643-659, part 2 of the printed hearings. Since the National Public Housing Conference likewise is supporting S. 866, in the interest of conserving time let me say that to the extent provisions of S. 1592 are in S. 866, the conference offers, by reference, Mr. Guste's testimony. As chairman of National Public Housing Conference's legislative committee, I should like very briefly to comment on one or two provisions of S. 866.
First, we believe the creation of a National Housing Commission-as provided in title II—is not as effective, administratively, as the permanent National Housing Agency provided for in S. 1592. We are of the opinion that the diversified character of the Federal Government's far-flung housing activities requires a top-level agency with an administrator possessed of policy-making functions. The technique employed in S. 866, of a National Housing Commission consisting of an Administrator, Coordinating Council, and a staff, strikes us as being a weak and halfway measure. A glance at the functions of the Administrator to develop, to collaborate, to interpret, to coordinate, to recommend, to prepare, to preside-indicates the powerless character of the Administrator.
Such an organization leaves the FHLBA, the FHA, and the FPHA as dangling independent agencies. Such an organization is in direct conflict with the recommendations of the Taft committee report. Such an organization is quite inconsistent with the unanimous report of this committee when it reported out S. 1592.
We urge you, in your deliberations on this bill, to review the arguments in favor of a permanent National Housing Agency with constituent members, as opposed to the paper type of organization provided for in title II of S. 866.
The CHAIRMAN. May I interrupt you there? You pointed out the old bill and the new bill. The hearings on this piece of legislation, S. 866, are of necessity much more brief than they were a year ago. That is a comprehensive series of hearings, and they covered this whole subject matter in those hearings. The printed records are available to this committee now.
So we have considered, and I think justly and wisely, that we will take up particularly what you are doing now, the changes in the bill, and contrast those, rather than go into the whole matter of the subject matter brought out in S. 1592. So it will be no lack of interest or understanding of housing propositions as a whole, by virtue of the fact that we are conscious of the changes.
I think you will approve of that.
Mr. WEINFELD. We not only approve of that, we are in agreement with it. It is for that very reason that we have not gone into the entire housing picture, and the need for a general housing bill, and are