STATEMENT OF RUFUS S. LUSK, NATIONAL ASSOCIATION OF HOME BUILDERS, WASHINGTON, D. C.-Resumed

Mr. LUSK. I think you have this chart which was made up showing the percentage of tenants on relief in public housing as of 1944. It goes from nothing in Alabama up to about 30 percent in one project in Chicago.

(The chart referred to will be found on p. 416.)

Mr. LUSK. Private enterprise is still taking care of those who cannot afford to pay even the rents in public housing.

I think Senator Taft spoke of the fact that public housing was going to take people who really need it. It has not done it to date.

I have tried to reduce in this chart showing the cost of the public housing unit over 45 years to simplest terms. It leaves out subsidies and differentials and interest rates and so forth.

The only money that comes in from public housing, other than that the taxpayer pays, is from the tenant, and according to this book that I have in my hand here, the tenant over a 45-year period would pay $12,700. That is all of the money that goes into the cost of that house. During its lifetime it costs $23,400, as made up on the right side of this chart. The difference is paid by the taxpayers, whether it is a subsidy or whatever it is. It has to be made up by them.

Then below the chart you see the happy tenant sitting there in his arm chair. There are further costs to that figure, such as the city tax loss of $3,300 and the Federal tax loss of $2,100.

That Federal tax loss, gentlemen, is based upon the fact that the bonds of the local authority, interest on those bonds is not subject to the Federal taxation, because it is issued by a State authority or a city authority.

The CHAIRMAN. You say that the city tax loss is a loss on new property that they would get, but they would not get it if it was not built. There would be no tax if it was not built.

Mr. LUSK. Wait a minute.

The CHAIRMAN. Is that not true?

Mr. Lusk. That is the differential between the taxes that would be paid if that were privately built, instead of being public housing. That is the differential.

That is based on analysis of about 30,000 housing units in the public housing units in nine different cities.

The CHAIRMAN. That is a graphic chart.

Mr. LUSK. We worked 2 months trying to figure it out.

Do I make that clear, sir, the differential, if the housing were privately built, instead of publicly built, the average loss over the period of the house in these nine cities would be about $2,100.

The CHAIRMAN. But they might not be built at all if privately built; and they might be built if built under this plan. Therefore you have lost not a tangible thing. You have lost an intangible in futuro, a potential return, is that correct?

Mr. LUSK. We have lost something.

The CHAIRMAN. If I am wrong, correct me.

Mr. DECKMAN. In the city of Washington these builders pledged to build 24,000 of these units if this bill of ours was passed, which we

had passed. The only thing in that bill that states if they fail to do it, the public housing will do the job, and they shall build for the lowest 20 percent.

Statements have been made by the public housers that if they have to build for the lowest 20 percent of the population, it wrecks public housing because they cannot do it.

Senator MCCARTHY. I think you gentlemen overlooked one point entirely, and no one has discussed this so far in all of the hearings. That is the question of whether or not it may be necessary to always have a certain degree of slum area as the result of a mental condition, as well as a financial condition, and that it is entirely possible that we cannot give every individual a home that would normally rent for $50 or $60.

I have heard none of you discuss that at all. It is like compared to the necessity of always having a million or two million unemployed people. You cannot have full employment. Perhaps we can not always have all people housed properly.

Mr. Lusk. My wife has been after me to get baked Alaska for the last 20 years, and I have not yet.

Mr. VINTON. These figures are grossly unfair. He is comparing things not comparable at all. He is comparing in the United States a rent which does not include utilities and includes the rents of all of the slum dwellings in the average. He is including that with the rent of public housing that does include all utilities, and that is for decent housing. I would like to call your attention to Mr. Myer's supplemental statement that points out that if you compare the rents of decent housing including utilities, the rent for it as a whole is approximately $45, and the rents being charged tenants admitted to public housing on comparable housing is just half that, or $22.50. That is about the rent that is being charged for the slum housing.

In other words, public housing is doing the job of housing slum families who are now paying an average of $24.50. It is housing them at $22.50. In other words, it is accomplishing its job of housing them at rents that they can afford. That is very far removed from competition with private housing that on comparable houses is charging $45 on a Nation-wide average.

Mr. DECKMAN. My rent comparison is based on a long background of cost comparisons, and so forth; that rent is based on a unit that would cost $3,000, and I showed you a house that could be built at the time that was made.

Mr. VINTON. I am talking about your comparison of the census figures.

Mr. DECKMAN. I told you they were the median rent as of 1945. Mr. VINTON. I told you that was not fair, because it did not include utilities and includes all of the slum dwellings in the average.

Mr. DECKMAN. If you will read that report, you will find that 89 percent of the houses of 1945 are not in need of major repairs. Seventy-one percent had plumbing and heating in them, and 11 percent that are in need of major repairs. Twenty-two percent of them have both plumbing and heating in them.

One point I would like to point out, when these hearings were held in 1945, this whole information is based on the 1940 census figures, and the progress that has been made by private enterprise in the 5year period, the figures that I gave you, is startling, and yet the whole

propaganda and the basis of their argument is on figures outmoded 6 years.

That is typical of how this sort of thing is being sold to the country, and my rent analysis is comparative rent analysis, and I think if you will read the foregoing explanation it will be quite clear that their arguments are not sound with regard to what I am analyzing on it.

Mr. Lusk. Mr. Chairman, may I ask the gentleman a question? How many units did you say should be built in cities the night that I appeared at the seminar? How many did you say the Government should build?

Mr. VINTON. I said we should build half a million units.
Mr. LUSK. Between three and four million.

Mr. VINTON. The most that I ever heard would say that if you gave him carté blanché, he would not ask for more than half a million.

Mr. LUSK. Between three and four million. I want that in the record.

The CHAIRMAN. We have been here together for 2 hours and a half on this very involved matter. We are all troubled and all interested. It is our job and we have to do the best we can with it. We have had the benefit of the kind cooperation of Mr. Deckman and Senator Taft, and the attachés from the Housing Administration. It has been helpful. We have established a record which involves the ideas of these gentlemen. We can scan these very carefully. We may want to have some supplementary data later on.

This is the kind of hearing that is very fruitful and I want on behalf of the committee to express my appreciation to Mr. Vinton and your associates, and to you, Mr. Deckman and Mr. Lusk, for your kindness in coming. You have been very forthright. We respect you very much indeed.

Mr. DECKMAN. I would like to state in behalf of the National Home and Property Owners Foundation I certainly appreciate this opportunity, and personally this is a dream come true for me. I have been in this since October 1942, and for the past 2 years I have wished many times over that I could sit down at a table with Senator Taft and discuss this matter, and my ambition is now fully realized. What you all do is your own fault, not mine.

The CHAIRMAN. We are grateful to you.

We will stand recessed.

(Thereupon at 12 noon, the committee adjourned.)

(The following was later submitted for the record.)

Senator ROBERT TAFT,

Senate Office Building, Washington, D. C.

ALAMEDA, CALIF., March 24, 1947.

DEAR SENATOR TAFT: In view of your concern over veterans' housing, you might be interested in this little side light.

The background: My husband was born and brought up in Cincinnati, living with his family at 4947 Glenway Avenue, Price Hill, until his enlistment in the Navy in September 1942. He served 22 months overseas, and when he returned we were married in California. He was discharged in October 1945, and ever since then we have wanted to move to Cincinnati so my husband can go into business with his father. His parents, relatives, and friends have been on the look-out for a place for us to live all of this time.

Imagine our delight when my husband's father notified us last December that he had lined up a brand new apartment in a fourplex which was to be finished this spring. The owner had agreed to give us one of the first-floor apartments because of our baby girl (who was born in June 1946).

My father-in-law was lucky enough to find us this place because he is a roofing contractor and had the contract for this building. We felt that without Mr. Kramer Sr.'s connection with the building industry we would be waiting for months to come.

So we felt more fortunate than most house-hunting veterans. The new apartment, at 3047 Glenmore, Westwood, was to be ready April 1. We sold our furniture here and prepared to move out of the duplex we rented here. Two days before we were to move, Mr. Kramer, Sr., telephoned us that the new apartment in Cincinnati would not be rented to us. They had driven over to see how work was progressing, and the owner's wife informed them that no babies would be allowed. This in spite of the fact that the owner knew we had a baby when he promised the apartment would be for us several months ago.

Now we are living here with my parents, waiting till our baby furniture arrives in Cincinnati. Then we will have to live back there with my husband's parents. We pay the penalty of no place to live because we have a baby.

Certainly today the housing situation is desperate enough without further restrictions being imposed on veterans. Maybe the landlords would like Congress to pass a law forbidding veterans to have children. Wonder if those landlords were ever babies themselves?

Very truly yours,

Mrs. ROBERT L. KRAMER.

YECK & YECK,

Hon. ROBERT A. TAFT,

United States Senate, Wsahington, D. C.

*

Dayton 2, Ohio, March 27, 1947.

MY DEAR SENATOR: I again see the newspaper headlines that "Congress is to do something about Housing" * * and, again, that you are designing housing bills which may serve to eliminate some of the intra-agency confusion in Washington.

I certainly hope you can.

I am interested in a system of building which has been presented to so many Washington agencies that I'd go dizzy trying to count them all. The pattern is invariably the same-up to a point.

It goes like this:

1. "Your building system for houses can't be any good, but if you want to spend about weeks in Washington getting it presented to six different specialists in our technical department, you can."

2. We do.

3. The technical boys then raise one point after another, all "proving" that it "can't be any good"-then, one after another they admit they're wrong (this usually takes a few months) and finally, give the building system a clean bill of health (usually with one or two minor suggested changes which we make immediately).

4. Then back to the contact man in the department. All his objections have now been met, but that's all. Now, for one reason or another (they all differ), there is "nothing he can do at the present."

Why do we want Government help in the first place? Well, that's a fair question. And the fair answer is what we wish we didn't have to ask for it. Unfortunately, our system of building is somewhat "different" at the moment, and its effectiveness depends a little bit on mass production and one or two large projects.

This, however, is our situation:

A. We have a system.

1. It will work. Technical experts always come around to that fact-although only one agency (FHA) has actually sent a technical man to see houses which have been standing for 8 or 10 years.

2. It has the values of “mass production" without the evils of “prefabrication.” It is essentially the use of a new erection method. 3. It cuts down labor time and costs.

Its erection technique is absurdly simple. It goes up like an erector set, one piece hooking onto another (let me remind you that its sturdiness has been tested by time).

4. It uses sheet steel. It would construct a fireproof, verminproof, "everlasting" house (a decade has failed to touch our prewar houses).

5. Houses built by this method are attractive. They look like wood. You could live in them and never know the difference except that you would know

that paint lasted much longer on them. They can be built to any architect's specifications-just like wood.

B. It has great advantage

* * *

1. Quoted prices from steel fabricators show that, once production on the pieces is under way, it is reasonable to believe that the cost of these houses (in addition to their low depreciation) will be lower than similar houses in wood.

2. For Government housing, it would have the virtue of sturdiness, nondecay, and would suffer less from neglect and filth than wood.

3. Possibly the most important of all. This type of construction can reach the little fellow and give him solid, honest, good-looking, cheap housing. Even the farmer can share, for he can easily erect houses or outbuildings himself from the parts-buildings that are fireproof, ratproof, verminproof, their own lightning rod, etc.

C. We have fabricators at satisfactory prices.

1. Three large fabricators have quoted satisfactory prices for production of parts.

2. Expansion is effortless. Because 90 percent of the pieces are adaptable to fabrication on roll-die equipment (one $20,000 “roll” can easily produce pieces for 3,000 houses a year), and the parts are interchangeable no matter where manufactured.

D. Basic materials needed are sheet metal and cement.

1. No wood is necessary in the construction of the house (doors and windows can be either wood or metal-roof can be either wood or metal).

2. Sheet steel is not abundant now, but it's coming along fast. E. The trouble is:

1. Mass housing needs mass financing. Money seems to have an inertia that we cannot overcome.

2. Perhaps we do not understand Government agencies; but we cannot seem to progress with them after they finally accept the building system as a "good thing." Perhaps we don't get to high enough levels with them, I don't know. Facts:

1. Here is a system of buildings-adaptable to mass production-simple to erect-apparently cheaper, certainly better, than conventional construction. 2. Even as few as 500 houses would prove the system once and for all. That would spread initial costs far enough to show the economies.

3. Any help given this system by Government would also help private home building, in that it would give the benefits of this new system to the private builder.

4. We're stumped. We've spent 15 years and considerable money developing a system that we can't seem to get off dead center.

What could you do?

Frankly, I don't know. Housing is a national emergency. This system seems to make it possible to get mass production and easy erection without prefabrication. It could easily be given a good test this summer-fabrication plants are available, some assurance has been given us by United States Steel that a reasonable steel could be made available. The hitch seems to be in financing-because the building of even a few houses, as you know, takes big money. Have you any suggestions?

Sincerely,

Hon. CHARLES TOBEY,

The Senate, Washington, D. C.

JOHN D. YECK.

THE SHOEMAKER CLINIC, Cincinnati, Ohio, April 1, 1947.

DEAR SENATOR TOBEY: The board of directors of the Shoemaker Clinic urge your approval of the Wagner-Ellender-Taft general housing bill (Senate bill 866, House bill 2523). This bill is essentially the same as the previous WagnerEllender-Taft housing bill which passed the Senate by a large majority. We are therefore familiar with its provisions.

This clinic serves a low-economic group in our city and we have occasion to see in the west end the detrimental effects of overcrowding and bad housing. Without such Federal aids as are proposed in this bill, we know of no way by which the housing problem can be solved. Certainly no local community can replace insanitary and unhealthful houses with good homes at rents families with low incomes can afford, without assistance.