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Here is the public housing project called Fort Dupont Dwellings; right across the street is the private operation. These are directly opposite each other. The private one is called Greenway, built by Cafritz, Fort Dupont was built in 1940, Greenway in 1941. The public has 326 units; the private, 792 units.
The public enterprise cost $4,724 per unit. The private enterprise cost $2,772. One has 1,323 rooms. The private enterprise has-2,604 rooms. The cost per room is $1,164 for that built by the Government; $849 for that built by private enterprise.
Incidentally there is no comparison between the quality of these two buildings.
Before these structures were erected this was all a farm, where most slum-clearance projects, incidentally, are built. The District of Columbia received $482 annually from the site of the public-enterprise structure, and $636 annually from the vacant ground on which Mr. Cafritz built his buildings.
Today the National Capital Housing Authority has paid the District in lieu of taxes $9,094, about 15 times what they collected before anything was built there.
The private-enterprise structure is paying $48,882 in taxes, approximately 60 times what was paid previously.
The public enterprise is paying $27.58 a unit in taxes today, and private enterprise $61.72.
When you break that down, Mr. Chairman, you can see how that argument almost collapses of its own weight.
Just to take one city, so you can see it clearly, what the tax loss is from public housing under present conditions, and what it would be under this 500,000 units in your bill, 5,000,000 or 10,000,000 units, the loss would be 25 percent if 5,000,000 units are built, and if 10,000,000 units are built, it would be 48 percent.
Incidentally, almost half of the houses in San Antonio, half of the housing units, would be Government-owned and operated and financed.
Gentlemen, I know Mr. Carr wants to get along here, and I will stop. Senator ROBERTSON of Virginia. Before you end, would you tell us in just a word what aid to housing which we now have you would like to see kept?
Mr. LUSK. I think the FHA should be kept, and any program, sir, which is not paternalistic which will do things that private finance companies cannot do, such as has been done under the FHA bill, is an excellent thing. If I had purchased my house when they had FHA financing, I would have saved $2,000 on that house. I think that is a good thing. That $2,000 would be in interest and commissions that I would not have had to pay. It has been helpful to builders, too. (The prepared statement of Mr. Lusk is as follows:)
STATEMENT OF RUFUS S. LUSK OF WASHINGTON, D. C., THURSDAY, MARCH 27, 1947, BEFORE THE SENATE BANKING AND CURRENCY COMMITTEE ON S. 866 ON BEHALF OF THE NATIONAL ASSOCIATION OF HOME BUILDERS
My name is Rufus S. Lusk. My office address is 1508 H Street NW., Washington, D. C. For almost 20 years I have conducted a real estate statistical and publishing business. In addition, I am president of the Washington Taxpayers Association, and the secretary of the Building Owners and Managers of Metropolitan Washington.
I was retained by the National Association of Home Builders in the spring of 1946 to make a study of the effect of the public-housing program upon the financial structure of American cities and also to ascertain, as nearly as possible, what the cost of this program, as outlined by its advocates, will be to this country.
The real program of those who advocate public housing is not the mere pittance of 500,000 housing units as proposed in the bill before this committee. Their real purpose is for the Government to design, finance, build, own and operate upwards of 10,000,000 urban housing units.
This assertion is based on the statements made over a period of years by public housers. It is also based on what has actually occurred during the years since public housing has become a reality in the United States.
Below are a few of the statements made by well-known advocates of public housing. They either categorically, or by implication, indicate clearly that the 500,000 units proposed in this bill are only the start: what believers in public housing really want is a minimum of at least 10,000,000 public housing units. Some advocate many more, even up to 18,000,000.
The following are extracts from writings and speeches of well-known public housers. They show that the program of the public housing advocates is not the erection of 500,000 urban public housing units in the United States as provided in the W-E-T bill, but rather the building of at least 5 to ten million.
THERE'S NO PLACE LIKE HOME
(CIO Political Action Committee Pamphlet of the Month, No. 6, Pp. 11 and 12.)
"Nearly 18,000,000 American families cannot afford to buy privately built homes. Private builders will not build for people who cannot afford to pay. For these 18,000,000 families, private builders never built any new homes."
THE GENERAL HOUSING BILL, S. 1592
(Remarks of its sponsors in the United States Senate, Wednesday, November 14, 1945, Senator Wagner, pp. 3 and 4)
"Our total housing need is pressing and enormous. It is estimated that, exclusive of farm areas, we ought to build about 1,260,000 units of housing a year for the next 10 years. Of these, about 420,000 units will be required for the upper-income groups who can pay more than $40 a month, on the average, for their housing. About 480,000 units will be needed for the middle-income groups who can pay, on the average, between $20 and $40 a month for their housing. And about 360,000 units will be needed for the low-income groups who can pay, on the average, below $20 a month for their housing."
EIGHTH ANNUAL MEETING OF THE NATIONAL PUBLIC HOUSING CONFERENCE, JANUARY 27 AND 28, 1939
(Irving Brant, contributing editor of the St. Louis Star-Times; consultant to the Department of the Interior, p. 13)
"It has also been found that two-thirds of the American people cannot afford to buy or rent a decent new home. So it is perfectly plain that the lowest third of the Nation-those in city slums and village and farm hovels-cannot get decent housing through private building industry."
HEARINGS BEFORE THE COMMITTEE ON EDUCATION AND LABOR, UNITED STATES SENATE, ON S. 4424 APRIL 20, 21, 22, 23, 24, 25, AND 29, 1936
(Excerpt from statement of Robert Mifflin Sentman, national president, Federation of Architects, Engineers, Chemists and Technicians.)
"Amendments to S. 4424 recommended (p. 224–226)
** (2) A Federal housing fund to be created out of the Treasury of the United States of sufficient size to provide for the building of at least 1,000,000 dwelling units per year over a 10-year period
PUBLIC HOUSING-4 YEARS OF ACHIEVEMENT
(Government Printing Office, 1941) John M. Carmody, Federal Works Agency; Nathan Straus, U. S. Housing Authority)
"Arguments and statistics in favor of public housing
"Three hundred thousand people already out of the slums, and now in USHA communities ** * Three-quarters of a million when all the homes now planned are occupied Ten million homes still needed. Nathan Straus, first. Public Housing Administrator, in his book "The Seven Myths of Housing," publishes a table purporting to show that at least twothirds of all urban families must be housed in Government housing.
A CITIZEN'S GUIDE TO PUBLIC HOUSING, 1940, BY CATHERINE BAUER
"Only the upper income groups, the richest third, can pay the price which will induce private builders to produce new homes for them. Even an average American family is outside the market, for a product which is one of the three necessities of life."
In his testimony before the Senate Banking and Currency Committee, November 1945, Philip M. Klutznick, then Commissioner, Federal Public Housing Authority, exhibited a chart purporting to show that between 24 and 27 percent of all urban families must be housed by the Federal Government.
Here are some of the effects of the program of the public housers to build at least 10,000,000 public housing units:
1. The financial structure of our cities will be wrecked. Because full taxes are not paid by the Government on public housing units, there will be a loss in tax income of American cities varying from 19 to 50 percent. No city can stand such a loss in revenue. (See attached table and formula.)
2. America will become a Nation of tenants with the Federal Government in Washington as their landlord.
3. The cost of this program is staggering. Cutting through the intricate and almost unintelligible method of financing of public housing, one fact stands out: Every public housing unit, even though built at 1944 prices, will cost the taxpayers in direct and indirect taxes a minimum of $15,000. The indirect cost, which cannot be calculated, will greatly increase this figure.
4. A large number of public housing units means a complete disruption of our present economic system of distribution. The Government bypasses the retail hardware dealer, plumber, painter, coal dealer and all others who make their living supplying maintenance needs of housing. To a considerable extent it bypasses the wholesaler. Not a single ton of coal has been sold in Washington, for example, to heat any of the thousands of housing units erected in the District of Columbia, by the Federal Government.
5. With the Federal Government as the landlord of even only one-third of our population, America will become a totalitarian state. The public housing program is socialism pure and simple. This Nation cannot exist as a republic with two-thirds of our people paying a large part of the rent bill of the other third.
If further proof be needed that the public housers intend to build for at least two-thirds of the population it is only necessary to point out the class of people in public houses today and their incomes.
According to a study made by the FPHA in 1944, in 20 housing projects scattered throughout the United States, with over 13,000 tenants, only 6.7 percent of all of the tenants in all of these houses were on relief. In one, not a single relief family lived.
In these same units the average income at that time-it is unquestionably much higher today-was $1,860 a year. In a Detroit project it was $2,600 and in only one, was it as low as $1,200. Obviously, public housers are not building for those people for whom public housing was intended; the low-income families. Actions of the public housers speak louder than any utterance they make. Last year, after a long controversy on public housing, the proponents of private enterprise agreed that the District of Columbia Re-development bill should provide that all families in the bottom 20 percent income class should be eligible to occupy housing. This made the public housing advocates furious and they staged a bitter battle to prevent its inclusion in the bill which is now law. By their action it is clear that they do not want their activities confined to the lower income groups. Under the law as it now stands, over 200,000 persons in Washington are eligible to become tenants in any public housing that may be built. This does not satisfy the believers in public housing. What they really want is the right and the opportunity to house not 200,000 people in Washington but about 600,000.
TAX LOSS ON PUBLIC HOUSING
The sources of information in connection with the study made by Rufus S. Lusk on present and potential losses in municipal taxes resulting from public housing, and the methods used to compile the results obtained, are listed herewith.
This method can be applied to any city. All of the information needed should be available either at the Housing Authority or in the Public Library.
Sources of information on public housing
1. Number of low-rent public housing dwelling units, development costs, payments in lieu of taxes-annual reports of the individual housing authorities, 1944 or 1945.