Page images

"it became evident that some of the family incomes are temporary. In one case a tenant listed as having more than $5,000 said that both he and his wife recently have been let out of Government employ and today have no income. Does a private landlord desire this family as tenants? In another case a woman with children has living with her, her father and mother. She, her father and mother all are gainfully employed and their combined earnings total more than $5,000. They require a three-bedroom dwelling. If they cannot find such a dwelling, the family may split up. Her earnings alone will not be enough to support her and her children with the present cost of living. Moreover, she will be deprived of her mother's assistance in caring for the house and the children. Is this in the public interest?

"Another instance was that of a man with a veteran son and an employed daughter whose earnings bring the family income above $5,000. Compelled to move, this family may split up because it is easier to secure a single room or to secure a one-bedroom apartment than it is to secure a dwelling adequate for the present family group. Is this in the public interest? It will leave the father and mother still tenants of public housing because, deprived of the earnings of their son and daughter, the family income will be only $2,017.60.

"Another instance is that of the widow of a World War I veteran with a monthly pension of $65 and with three employed children and four younger children. If the employed children leave, the mother and younger children will have only the pension. But if the family group stays together it requires a fourbedroom dwelling.

"These and many similar instances," Mr. Ihlder asserted, "raise the question of the sizes of dwellings now being provided by private home builders. Families with incomes of $4,000 or more should be provided with proper private housing, but at a recent discussion representatives of private builders said that they cannot afford to build rental dwellings with more than one or two bedrooms. A large proportion of NCHA's highest-income families require more than two bedrooms. What are they to do if evicted from public housing? In spite of these difficulties the Authority has notified the families with $4,000 and $5,000 income to seek private dwellings.

"Another and quite different instance is that of a tenant family which desires to buy a house. The head of the family said that he has an agreement with a private builder who has promised to complete the house by next September. 'But,' he added, 'you know that such promises are not always fulfilled. Suppose the house is not completed until November. Must I move out and pay a high rent during the intervening months? That means not only cost of moving twice, but difficulty in finding a rental house because the owner will not wish such a short-term tenant.

"At a hearing before a committee of the House of Representatives last spring, a spokesman for private housing interests said that he had investigated one of the National Capital Housing Authority's properties and had found a considerable number of tenants who could afford to live in private housing. When asked to give the addresses of private dwellings into which these tenants could move, he was silent. Since then there have been promises of additional moderate-rental dwellings and the Authority is acting on the basis of those promises. It is giving its highest-income tenants 6 months from now to find private housing, and, this being the beginning of the building season, it is counting upon the private builders to provide the house."


Place: Commissioner Guy Mason's office.

Date and time: March 13, 1947, at 2:20 p. m.

Present were: Commissioner Guy Mason; Mr. Harold Booch, representing Congressman Horan; Messrs. Huff, Clapp, and Gray, representing the District of Columbia Board of Public Welfare; and Mr. Ihlder and Mrs. Conlin, representing the National Capital Housing Authority.

Subject: Proposal that NCHA meet the 20 percent cut in the budgets of those client families who are its tenants, by reducing their rents in proportion, so that their allowance for food and other necessities will remain at the same level it was in February, provided (a) that the Board of Public Welfare will not further reduce the allowances of those families from the February level and

(b) that the Board of Public Welfare shall not take this as a precedent which will enable it to reduce its future budgets, counting upon the Authority to supplement funds given it by Congress.

After long discussion the representatives of the Board of Public Welfare made the following statement:

The Board must apply its rule impartially; therefore, if the NCHA reduces the rents of any of its tenants who are recipients of public relief, the Board will reduce the allowances of those tenants in accordance with the rent reduction, so those tenants will not receive any benefit.

On behalf of the Board, Mr. Huff said that it has sought to meet the situation by asking for a supplementary appropriation.

Mr. Ihlder proposed that the "impartial" item be met by applying it to private landlords on the same terms. NCHA always assumes that any change or interpretation of practice or regulations it advocates shall be equally applicable to private agencies. Therefore, if the Authority's first proposal (a) was accepted it would be extended to any private landlord who will reduce his rents in the same way.

This was refused on the score that it would be partial to the tenants of those landlords who may reduce rents.

Attached is a copy of the statement made by Mr. Ihlder and read at the meeting in full.

This statement was accepted by Mr. Huff as presenting the case fairly. He emphasized the fact that the Board had not asked the Authority to give anything and agreed with the Authority thoroughly in principle. Mr. Ihlder said that this is true; that this year the requests had come from the tenants, not from the Board. Question was raised as to whether item 3 of the attached, "But the Authority cannot let its tenants who are dependent upon another Government agency suffer from hunger," would lead the Authority beyond its proper field into the field of welfare. Commissioner Mason was especially emphatic on this.

Mr. Ihlder said that what it was intended to do was to avoid having the Authority go into the field of public welfare as is emphasized by the succeeding stipulation that the Board will not reduce the allowances of the families affected. Such a reduction of allowances, following a reduction of rents, would mean that the Authority subsidizes the Board of Public Welfare by turning over to the Board of Public Welfare the amount of the rent reduction with the Board then free to use this money for general relief purposes.

Mr. Huff said that the Board had no such intention but on questioning admitted that was exactly what would happen. Mr. Ihlder asked if it was the consensus that the Authority must maintain its rents and evict those tenants who do not pay the rent. This gives the tenant the alternative of hunger or refusal to pay rent. If he refuses to pay rent then he incurs a debt which may remain for his whole life, because the Board of Public Welfare will not and in all probability the tenant will not be able to discharge it.

Mr. Huff said that if the deficiency bill goes through the amounts will be retroactive to March 1, and so the rents could be paid. Mr. Booch, however, was not confident of this.

Mr. Ihlder then asked if it was the consensus that in cases where the tenants do not pay rents the Authority should evict. The answer was "Yes."


The National Capital Housing Authority provides proper dwellings for a cross section of the District's low-income population: i. e., those whose incomes are insufficient to cause private enterprise to provide proper dwellings for them in an adequate amount.

Each lease states the economic or cost rent of the dwelling. This economic rent includes all items of cost: Interest and amortization, operation and administration, repairs, maintenance and replacement, etc., and full real-estate taxes. Omitted is a profit to the owner. A tenant who pays the economic or cost rent is

receiving no financial assistance; he is getting a proper dwelling which otherwise would not be available and is paying the cost of what he gets. This economic rent will, of course, vary from time to time as costs change.

A considerable part of the District's low-income, self-supporting population cannot pay the full economic or cost rent. Because of inability to pay the rent of proper dwellings these low-income families have lived in the slums in substandard houses, in single rooms, under conditions of gross overcrowding. At present these conditions are aggravated by the scarcity of proper moderaterental dwellings.

To meet the needs of these families, the National Capital Housing Authority accepts from them rental payments less than the economic or cost rent, set in accordance with their ability to pay. The difference between the economic or cost rent and the rent charged a tenant is made up by a subsidy derived in part from an annual Federal contribution and in part from partial District tax exemption. In the fiscal year 1946 the amount of the Federal contribution was $82,041.20 and the amount of the District contribution was $46,806.14. At the same time the Authority paid to the District $85,522.83 in lieu of taxes on its low-rent housing and $141,759.86 in lieu of taxes on the war housing under its management in the District of Columbia—a total of $227,282.69.

At the time of their admission all the tenants of the federally aided low-rent housing had incomes so low that they were charged less than economic or cost rents. At present the great majority have progressed and some 70 percent are now paying the full economic or cost rent. While this progress has been due chiefly to increased employment opportunities, the National Capital Housing Authority believes that increased health, efficiency, optimism, and confidence due to their improved housing have had an important part.

The Authority's method is to raise rents as the tenant's income increases, charging a larger proportion as the income grows. The tenant's income, in accordance with the United States Housing Act of 1937, may not at time of admission exceed five times, or the cases of families with three or more minor dependents, six times the rent charged. With a $15 rent, therefore, a tenant's monthly income may not exceed $75. Subtracting $15 from $75 leaves $60 a month for food, clothes, and other necessities for a family of four persons. If this $60 were spent for food alone, it would amount to about 16 cents a meal. Recognizing that a $75 income does not provide for more than the bare necessities of life, the Authority makes only a $1.50 increase of rent with a $5 increase of monthly income above this amount, leaving the other $4 for other expenditures. As the income approaches the economic rent level the proportion for rent increases.

This system has worked. The great majority of our self-supporting tenants have progressed. They have learned that industry and thrift bring tangible rewards and a sense of security for them and their children.

With relief families, however, the picture is quite different. When a selfsupporting family becomes an Authority tenant its family income remains the same. If the Authority rent is less than the rent it had been paying in a substandard or overcrowded dwelling, the balance is available for food and clothes. But if a public relief family becomes an Authority tenant at a lower rent than it had been paying in substandard housing, its allowance is reduced, because the allowance covers only what it has to pay. So the whole psychology is reversed. This would be the result if the National Capital Housing Authority were to reduce its rents for relief families in accordance with the 20-percent cut in allowances. As Mr. Huff reminded me yesterday, if the Authority were to reduce its rents, the Board of Public Welfare would cut its allowances. The Authority's tenants would therefore be little, if at all, better off.

The practical result would be that the Authority would assume part of the relief burden of the Board of Public Welfare. The Authority would subsidize the Board by relieving it of part of its obligations and so permitting it to spend public money that had been provided for housing to provide food for clients who are not Authority tenants. In this the Authority would be usurping a function of Congress.

This means that the Authority would supplement a relief budget that has been approved by Congress by adding to that budget funds which Congress had designated for another purpose. This, I believe, the Authority has no right to do.

This is not a new question. When the Authority began its work in 1934 it had no subsidy fund. Consequently it had to charge all its tenants economic or cost rents. From the beginning the Authority accepted as tenants the clients of private and of public relief agencies. When later the United States Housing Act was enacted and subsidies became available they were intended for self-supporting 99279-47-35

families to make up the difference in cost between proper housing and slum housing. At first other public housing authorities refused to accept relief families, saying that relief agencies were responsible for the housing of their dependents. With this the National Capital Housing Authority never agreed. It recognized that the relief agencies are not able to provide and manage dwellings and that there was not an adequate supply of proper low-rent privately owned dwellings. With this position other public housing authorities are now in agreement. But the National Capital Housing Authority has always maintained that the relief agency is responsible for the cost of housing its clients.

With this the private agencies in the District of Columbia have agreed. Obviously it would be improper for a public agency to use public funds to subsidize a private agency. It would be subsidizing a private agency if it paid part of the private agency's bills and by so doing enabled it to use the money so saved in order to finance other work.

The Board of Public Welfare also agreed in principle, recognizing that it is improper for one public agency to supplement the authorized and approved budget of another public agency. But when its appropriations proved inadequate and it had to cut the allowances of its dependents the Board has asked the Authority to make up for this cut in part by reducing the rents of client-tenants. This the Authority felt it had no right to do. Moreover the Board did not secure a cut in the rents charged by private landlords.

This inability to secure a reduction in rents charged by private landlords is accepted as an unchangeable fact. Consequently in all discussions in re the 20-percent cut with representatives of other agencies, so far as I have heard, a basic consideration has been that because rents will not be cut, therefore, the 20-percent cut becomes a 30-percent cut on the family's food allowance.

This year the Board has not asked the Authority to compensate it for the cut. Instead its clients who are the Authority's tenants (222 families) are individually asking the Authority to reduce their rents below the cost level, saying, “If we pay the rent, we cannot eat."

That puts it up to the Authority in dramatic and urgent form. Hungry people, even if living in good dwellings, become demoralized. Having accepted these relief tenants, the Authority has a sense of responsibility for them. The problem is so difficult that I have sought advice from several sources, including Members of Congress. On the basis of this advice I have come to the following conclusions:

1. The allowance granted to its clients by the Board of Public Welfare represents a minimum standard of living. Therefore an appreciable cut in these allowances means that the dependents cannot maintain even a minimum standard of living.

2. The National Capital Housing Authority has no right to supplement the authorized and approved budget of the Board of Public Welfare.

3. But the Authority cannot let its tenants who are dependent upon another Government agency, suffer from hunger.

4. The only apparent remedy is for the Authority to reduce the rents of the dependent tenant families enough to restore their allowances for other necessities to the minimum level obtaining before the cut, on two conditions:

(a) that the Board of Public Welfare will not further reduce the allowances of these families from the February level.

To reduce the allowances of these families in accordance with the Authority's reduction in rent would result in their getting no benefit. Instead it would merely enable the Board to use the funds so saved for purposes for which the Authority has no responsibility.

(b) that the Board of Public Welfare shall not take this as a precedent which will enable it to reduce its future budgets, counting upon the Authority to supplements funds given it by Congress.

In acordance with these tentative conclusions I have asked the executive of the Board to tell the Authority the approved budget of each of the 222 clienttenant families and the amount of the Board's allowance. It is this allowance (which may be all that the family has, or may be only supplementary to other sources of income) on which the cut is made. By compensating for this cut these families would be restored to the standard of living they had last month.

I still have to learn whether the Authority can secure the money necessary to finance this proposal. But even if it can the suggestion is limited to meeting this ehergency. It is definitely limited to that.


Executive Officer, National Capital Housing Authority.


Olympia, March 29, 1947.

Secretary, Committee on Banking and Currency,

United States Senate, Washington, D. C. DEAR MR. HILL: This is to advise you that we object to the wording of that part of section 502 of the Taft-Ellender-Wagner bill having to do with Federal savings and loan associations converting to State chartered institutions wherein it is required that such conversion be approved by the Federal Home Loan Bank Administration and the Federal Savings and Loan Insurance Corporation.

It is our belief and is the democratic right of everyone in the business conducted by these cooperative and mutual institutions to be freely permitted to convert to Stae charter as is permitted for them to change to a Federal charter and supervision.

It seems to us that to take any other view or to in any way interfere with this free and rightful attitude is putting the administration in Washington in the wrong public light and is inadvisable from any and all standpoints.

Yours very truly,

GEORGE L. BARNER, Supervisor, Division of Savings and Loan, State of Washington.


HERMAN A. ACKER, CORP., New York 22, N. Y., March 31, 1947.

Senate Office Building, Washington, D. C.

DEAR SENATOR: Your attention is respectifully called to the need of granting real estate property owners relief from the continued increased costs of operation by granting them an increase of 15 percent in rents.

Practically every line of business has been permitted to increase their prices but real estate has been discriminated against although it is the very foundation of the wealth of our country, the one in which the small property owner as well as the millions of depositors in savings banks, building and loan associations, and insurance companies have a very vital interest due to the fact that their savings have been invested by these corporations in mortgages.

Therefore, unless real estate is given an opportunity to operate at a profit, these millions of people will suffer losses through foreclosure unless some relief is given by permitting property owners to increase the rent 15 percent. I trust that you will see the wisdom of granting this relief.

You should strongly oppose the W-E-T bill. It will not bring the necessary relief to housing, but will only increase the cost to the Federal Government from $6,000,000,000 to $7,000,000,000 with no benefit to our people. Please use your persuasive powers to defeat this misleading bill.

Thanking you in advance for your kind cooperation, I beg to remain
Yours very truly,



Senate Banking and Currency Committee,

MAGEE ELECTRIC CO., Glendale, Calif., March 28, 1947.

Senate Office Building, Washington 25, D. C.

DEAR SIR: The W-E-T bill, S. 866, which is supposed to be a general housing bill, is a deceitful piece of legislation, which tends to hoodwink the public in an attempt to put over a social housing scheme, which will not only cripple the housing program, but will be one more step in the socialization of our industry. If this bill is approved by the Banking and Currency Committee and Congress accepts that action, our Government will then launch a 45-year program of meeting and appropriating public funds for the benefit of those who would change our system of free enterprise to that of totalitarianism. Bungling by existing house control agencies is directly responsible for the housing shortage which exists today.

I ask that you do all in your power to kill this particular piece of legislation, and also bring an end to all existing controls over our entire economy.

Very truly yours,


« PreviousContinue »