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Mr. KLUTZNICK. That is right. That has been our biggest problem, Senator, during the war.

The CHAIRMAN. All right.

VETERAN'S PREFERENCE: SECTION 702

Mr. KLUTZNICK. Now I shall discuss section 702, entitled "Veterans' preference." Under this section, for 4 years after his discharge, a veteran would be entitled to a preference for admission in any housing provided under the United States Housing Act. This preference is also extended to families of servicemen, including families of servicemen who died in the service. All other things being equal, that is, if the veteran is otherwise eligible for occupancy in the housingexcept for the fact that he does not have to come from substandard housing he gets the preference. We think this is completely workable. As a matter of fact, most localities are giving this preference now. There is very little intake in low-rent housing in this country that is not servicemen's families and veterans' families these days, and this is increasing each month. Similar preferences would be established by law as a national policy for all future projects assisted by FPHA.

Such a preference recognizes the specially acute problem facing these families. Many of the married men who entered the service were compelled to break up their homes. As returning veterans, these men and their families are anxious to reestablish their own homes, so they can enjoy the normal life to which they are now so richly entitled. Many of the veterans who left as single men will soon be marrying and seeking a home to start their family life. Such special needs of returning veterans justify the special treatment which would be afforded by this amendment. The experience in the low-rent-housing program to date shows that such a provision is not only workable, but highly desirable.

The preference granted by this section is in addition to the preferential treatment afforded families of servicemen and veterans under section 701. That section makes the requirements as to prior residence in substandard housing inapplicable to families of servicemen and veterans who are otherwise eligible.

Section 702 also provides that low-rent projects may serve veterans and other individuals without families. This change would bring the Federal law into harmony with most of the State laws. It would make it possible to serve single veterans as well as aged survivors of families and other single persons of low income in need of decent housing.

The only thing I would like to call your attention to-because there has been considerable discussion about it on the floor of Congressis the problem of providing housing for GI's at schools and universities. I wouldn't want to leave the impression that the terms of this bill, as it is presently worded, will treat that problem completely. It will cover that problem in any community where there is a long-term need for families of low income, either for family housing or dormitory housing.

In the case of family units, such projects would be undertaken by the local public agency in accordance with the provisions of this bill (requiring local determination of need, approval by the local governing

body, local contributions, and so forth) and would be made available by that agency to veterans on a preferential basis. To the extent that housing units would not be needed by veterans entitled to such a preference, the units would be rented to other low-income families. In short, such housing would constitute a part of the total supply of public housing in that community for low-income families, with preference to veterans.

In the case of dormitory units, there may be instances where there would be a permanent need for accommodations for single persons of low income in the community and where the local public agency would be prepared to initiate a permanent project to provide such accommodations. As in the case of the family units, such a project would have to meet all the requirements of the act, and there would have to be a demonstrated permanent need in that community for such accommodations for low-income single persons such as working girls or men, or aged people. If such permanent dormitories were built by a local public agency, the needs of single veterans could be met on a preferential basis during the immediate postwar years.

Under those circumstances during the pressure period as far as veterans are concerned, veterans would be entitled to preference, and the houses could be used during that period for veterans, and thereafter for other families of low income.

This program would, however, not cover the more usual situation of a typical college town where there is a permanent need for additional dormitory space and where there is no permanent need for housing families of low income. In such a case, it may be more appropriate to meet that permanent need for college dormitories as part of financing the educational facilities of the university, rather than as a part of a general housing program. In any event, it should be recognized that S. 1592 is not specifically directed to situations where the need for permanent housing accommodations is exclusively for students, but is rather directed to cases where there is a permanent need for the housing accommodations for low-income families or single persons in the population generally, and where the needs of veterans can be temporarily met on a preferential basis. The bill is not designed to treat that problem, and I doubt whether it should be designed that way. That is a special educational problem, rather then a problem of housing low-income families.

Nor does the bill cover the temporary housing program that was referred to in the hearing the other day. There is a growing need for temporary accommodations for veterans in college towns, university towns, and for that matter, other cities.

Title V of the Lanham Act does manage to deal in a small way with that problem. It grants adequate legislative authority to the National Housing Administrator and the Federal Public Housing Authority to meet this need, provided that funds are appropriated for this purpose. It is for Congress to determine whether funds should be appropriated to assist in making temporary housing available for veterans attending educational institutions in localities where there is no long-term need for the housing. It would appear that such a determination should be made through appropriation measures rather than through the medium of S. 1592.

In view of the absence of funds to assist in providing such housing, the National Housing Administrator has formulated policies under which FPHA is making temporary housing available to educational institutions which are prepared to bear the expense of moving such houses from the places where they are now located to the places where they are needed. Some of the temporary needs are being met in this manner and will continue to be met to the extent that the educational institutions are prepared to bear the expenses of moving and reerecting housing and to the extent that a supply of such temporary housing is available.

I want to make it perfectly clear that this veterans' preference provision of the low-rent housing bill does not treat any veterans' problems other than those that I have outlined.

Senator BUTLER. Have you put into the record a complete list of projects to date?

Mr. KLUTZNICK. We did put that in the record in the hearings before the subcommittee of the Postwar Committee in the Senate. We would be glad to repeat it.

Senator BUTLER. It wouldn't take up much room, would it?

Mr. KLUTZNICK. Well, it takes a few pages, but it is available. Senator BUTLER. I think that should be inserted here, because I would like to know just where the projects are.

Mr. KLUTZNICK. We will be delighted to put it in at the end of my testimony.

(The information requested, "Low-Rent Housing Program Under the United States Housing Act" appears on p. 241.)

Senator BUCK. Would you agree with me this section ought to include families of servicemen who have died in the war, where the wife has not remarried?

Mr. KLUTZNICK. I think it should.

Senator BUCK. So do I. Do you think so, Mr. Chairman?

The CHAIRMAN. Yes; I do.

Mr. KLUTZNICK. As a matter of fact, this point is already covered in section 702. It extends the preference to families of servicemen who died in the armed forces.

COST LIMITS: SECTION 703

Now I come to section 703, which is entitled "Cost limits." Before we get into the details of that section, I should like to give you a little of the background of our cost experience.

Chart 12 will tell you what the total cost per dwelling unit has been in urban localities under the United States Housing Act program to date. The national average is $4,649 per unit. In metropolitan districts of over 1,000,000 population the average cost has been $5,104; in metropolitan districts of 500,000 to 1,000,000 population, $4,972; from 250,000 to 500,000, $4,448; and from 100,000 to 250,000, $4,296. In smaller localities the average cost per dwelling has been $3,884. In farm localities, where the local authorities had a very limited experience to date, the cost per dwelling averaged $2,350. Now, that is the over-all cost, including the cost of acquiring slum sites together with the old slum buildings (where we used a slum site) the cost of their clearance, cost of construction, and the local authority

80525-46-pt. 1-14

overhead. Half of the dwellings in this program have been built on the sites of former slums.

(See chart 12 which follows Mr. Klutznick's statement.)

Senator BUCK. What do you put up in rural areas—single-family, or two-family units, or what?

Mr. KLUTZNICK. In farm localities they have been customarily three-bedroom units, with sanitary privies. We discuss that under title VIII, which is the title relating to the rural program.

Senator BUCK. It is just a home for single families?
Mr. KLUTZNICK. That is what it amounts to today.

Now, this committee is considering urban redevelopment provisions, and while I am not testifying on that title of S. 1592 in any sense of the word, I think you may be interested in our experience in the cost of using slum sites instead of vacant sites. This cost includes land, old buildings demolished, and necessary site improvements. In metropolitan districts over 500,000-as chart 13 shows-we had a median cost for slum sites per dwelling unit of $1,637. That is for the sites prepared for re-use. In metropolitan districts of 100,000 to 500,000 population, the median cost per unit was $1,279. In smaller localities the median cost has been $815. You will notice on this chart that in each instance there is a distribution of the percentage of those sites that fell into categories from $600 to $2,000, in intervals of $200. In 9 percent of the cases in the large metropolitan districts, for example, the cost of slum sites has been $2,000.

(See chart 13 which follows Mr. Klutznick's statement.) Senator BUCK. That is per unit?

Mr. KLUTZNICK. That is per unit. As was to be expected, the costs of slum sites are relatively less in the smaller communities. Chart 14 illustrates our experience in the write-down in cost of slum sites per new dwelling. It shows the write-down which would be necessary in the cost of slum sites to bring them down to the same relative prices which we have paid for vacant sites ready for use.

(See chart 14 which follows Mr. Klutznick's statement.)

Mr. KLUTZNICK. Assuming that 15 percent of the total development cost is an appropriate site cost-and that I think is generally accepted in a number of places-the median write-down in metropolitan districts of over 500,000 would be $961 per unit. In other words, it costs $961 per dwelling unit for the privilege of removing some of these houses you referred to earlier, Senator Buck. In metropolitan districts of 100,000 to 500,000 the median write-down would be $724. In smaller localities the median write-down would be $276. Of course, the variation goes all the way from virtually nothing up to $1,400 in 3 percent of the cases in large metropolitan districts. The percentage distribution is shown on this chart 14. In other words, when you are considering the cost per dwelling unit under the United States Hous ng Act and you want to compare it with private experience, wherever a slum site is used, the only fair way to do it is to subtract the cost of the appropriate write-down in the value of the slum site as against a vacant site, because that is also value received in the sense that you have eliminated some substandard housing.

Now, chart 15 is merely the same story in percentages. You may find it interesting as you consider the urban redevelopment and slum removal titles. In metropolitan districts over 500,000, the median there would be a 58 percent mark-down from cost to value. In

metropolitan districts of 100,000 to 500,000 population, 54 percent would be the median write-down and in smaller localities, 34 percent. You will notice that in the metropolitan districts the distribution is all up-almost all up above 50 percent, and a large percentage of the sites had a mark-down in excess of 60 percent.

(See chart 15 which follows Mr. Klutznick's statement.)

Now, with that introduction as to actual costs, I would like to consider what this section 703 actually accomplishes and what problems it meets.

Under the present United States Housing Act we have a provision that in communities having a population of over 500,000, the dwelling facilities shall not exceed a cost of $5,000 per unit, or $1,250 per room. In communities under 500,000, the limit is $1,000 per room, or $4,000 per dwelling unit. It should be noted that these limits relate only to the costs of dwelling facilities excluding the costs of sites and their improvements which are so highly variable.

I would like to say that this portion of the bill does not give consideration in any substantial way to the problem of meeting increases in price levels. Thus, the dollar limitation on the room cost is not increased, although we recognize (as we explain later) that the present limits may prove too low under certain circumstances. It approaches the rather technical problems that are involved in cost limits.

The amendments are principally designed to eliminate discriminatory and undesirable features that result from the present language of the act. Three critical situations have arisen under the present cost limits which the amendments should cure:

The first thing it would do is to apply the higher cost limits now applicable to communities having a population of over 500,000, to smaller communities which are located in metropolitan districts. having a population of over 500,000. The reason for that is that our experience discloses that the cost levels are not determined by the population of the corporate limits of a city as much as they are by the population of the district or area in which the city exists. Chart 16 shows that this is our actual experience. In cities of over 500,000 we had a median average dwelling facilities cost of $3,631. Two percent was striking right up against the top limitation of $5,000. In cities under 500,000, but which are located in metropolitan districts having a population of over 500,000, the costs were almost the same. The median was $3,515, or only $116 difference, whereas in cities under 500,000 not located in metropolitan districts of over 500,000, the median was $3,072, or a spread of $559. It should also be noted that in smaller cities in metropolitan districts over 500,000, fully 52 percent of the units built at prewar prices very closely approached the limitation on the cost per dwelling unit. This illustrates that it is important, in order not to discriminate against cities having a population of under 500,000, but being in metropolitan districts of over 500,000, that they be put into the same class with cities of over 500,000.

(See chart 16 which follows Mr. Klutznick's statement.)

Mr. KLUTZNICK. Now, the next chart, 17, on a room basis, emphasizes the same thing. In cities of over 500,000 the median dwelling facilities cost per room was $829, and in cities under 500,000, but in metropolitan districts over 500,000, the median was $825, or a spread of only $4 per room. In contrast, in cities under 500,000 not located

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