provided in the bill, the present requirements of the United States Housing Act as to the elimination of substandard dwellings in connection with low-rent housing projects would be repealed.

Preference in occupancy of low-rent public housing projects is provided for low-income veterans of World War II for a 5-year period, subject only to the preference to families displaced by slum clearance. As among such displaced families, veterans with service-connected disabilities would have first preference, the families of deceased veterans whose death was service-connected would have second preference, and other veterans or servicemen would have a third preference. As among families who have not been displaced by slum clearance, veterans and servicemen would have similar preferences. Veterans are also exempt for a 5-year period from the requirement that they must have been living in substandard housing at the time of their admission. Your committee was very favorably impressed by the testimony of witnesses representing the Paralyzed American Veterans with respect to the need for providing dwelling units in low-rent public housing projects which are adaptable for paralyzed veterans and others who are condemned to living their life in wheel chairs. The adaptation of dwelling units for such use would only require wider doors, larger bathrooms, and ramps in place of steps. Your committee is in full accord that provision for this unfortunate class should be made. In view of the fact that it would be inadvisable to require a statutory percentage of each project to be so reserved, due to the varying need for such facilities in different localities, your committee believes that the problem could best be handled by administrative determination in each project area after proper surveys and determination of need therefor. In this broad public-housing program the committee believes that provision should be made for these specialized cases.

Charges have been made from time to time by the opponents of public low-rent housing that the program does not actually serve families of low income. Your committee has found this charge to be unfounded in terms of actual experience, which will be reviewed briefly later in this report.

The pending bill, however, includes a number of requirements not now in the act which would give positive assurance that the program will serve only families of low income. For example, the bill requires that, before any contract for annual contributions can be made, the local housing authority must show a gap of at least 20 percent has been left between the upper rental limits for admission to the proposed projects and the lowest rents at which private enterprise, unaided by public subsidy, is providing (through new construction and available existing structures) a substantial supply of decent, safe, and sanitary housing toward meeting the need of an adequate volume thereof.

Your committee is convinced that private enterprise has never had anything to fear from public housing, and believes that the 20-percent gap provision represents a sound further reassurance that competition does not and will not exist between public housing and private enterprise.

Further, under the terms of the bill, local housing authorities will be required to set maximum income limits for the admission of tenants to low-rent housing. The authorities must also set maximum limits for continued occupancy, generally at a somewhat higher level than those for admission. All maximum income limits will be subject to

approval by the Public Housing Administration. In the case of limits for admission, the bill specifically provides that net family income cannot exceed five times the gross rent, including heat and all other utilities. In computing family income, a deduction of $100 is allowed for each minor dependent. The incomes of all tenant families must be periodically reexamined; and, if their incomes exceed the maximum limits for continued occupancy, they are required to move from the project.

In selecting tenants, local housing authorities will be prohibited from discriminating against families whose incomes are derived in whole or in part from public assistance but who are otherwise eligible for admission. Moreover, in the initial selection of tenants for a project, the bill requires local authorities to give preference among eligible families to those with the most urgent housing needs, subject to the preferences to families displaced by slum clearance and to

veterans.

AMENDMENTS RELATING TO CONTRIBUTIONS AND COSTS

In addition to the foregoing amendments, which leave no doubt whatsoever that only low-income families will be eligible for public housing, your committee desires to call particular attention to several other amendments to the United States Housing Act which will make substantial improvements in the operation of the public low-rent housing program.

Requirements governing local contributions have been perfected to take advantage of actual experience. The present act calls for local contributions equal to 20 percent of the Federal contributions and authorizes the local contributions in the form of cash, tax remissions, or tax exemptions. In practice they have always been made through the exemption of the low-rent projects from real and personal property taxes granted pursuant to State legislation. In view of this fact, and in order to put projects in all localities on an equal basis, the bill simply requires that projects be exempt from real and personal property taxes.

With respect to projects assisted under this title, the bill authorizes payments in lieu of taxes not in excess of 10 percent of shelter rents. This is the amount formerly authorized by the Public Housing Administration. In the judgment of your committee, this represents an amount which is both fair to the cities and at the same time assures an adequate local contribution through tax exemption, The bill also repeals the prohibition against any payments in lieu of taxes (other than amounts originally contracted for) which was included in the Government Corporations Appropriations Acts for 1948 and 1949 in respect to projects requiring Federal contributions in those fiscal years; and payments in lieu of taxes equal to 5 percent of shelter rents are authorized to be made retroactively as to these 2 years for all projects, whether or not Federal contributions were required for those 2 years.

A very necessary amendment in the bill revises the provisions relating to the capital costs of low-rent projects. The present dollar cost limits, adopted in 1937, are obviously unrealistic in view of present building costs. Accordingly, the bill raises the limitation on the cost of construction and equipment of dwelling facilities to $1,750 per room.

It also authorizes an increase in this cost limitation by not more than $750 per room in areas where it would not be feasible without such an increase to construct public housing without sacrifice of sound standards of construction, design, and livability, and where there is an acute need for such housing.

In reviewing the question of necessary increases in cost limits, your committee was presented with information on this subject by the Public Housing Administration. A number of local housing authorities requested their contractors to reestimate existing projects on the basis of the cost levels prevailing at the end of 1948. This study showed the following expected average costs per room of dwelling construction and equipment:

Cost per room:

$1,000 to $1,249. $1,250 to $1,499.

$1,500 to $1,749. $1,750 to $1,900_

$2,000 to $2,249_

Number of projects

88775

These figures indicate the wide diversity in costs which are to be expected in different parts of the country. The projects represented in these estimates range from very simple projects in small communities to large multifamily projects which are necessary in New York and other metropolitan centers.

These figures indicate that it will be necessary to go over the proposed normal limit of $1,750 per room in only about one-third of the cases, and even then it will probably not be necessary to make full use of the additional authorized amount. The authorization to exceed the normal limit by $750 per room is, however, in the opinion of your committee, necessary unless we are to risk depriving high-cost metropolitan areas, such as New York, Newark, Chicago, Detroit, Philadelphia, San Francisco, and Boston, of their rightful chance to participate in the program.

Your committee has noted the contentions sometimes advanced that the costs of public housing authorized in this title should be reduced to the lowest levels at which private housing is being produced.

Your committee does not believe that these contentions are realistic or well-founded. In the first place, the fact that some private housing is being produced in some sections of the country at prices of $6,000 or $7,000 does not establish that even in those sections housing of this type would be suitable for the intensive, long-term use required in public housing or for the wide range of family sizes which clearly should be accommodated in publicly assisted projects.

In the second place, these arguments ignore the fact that the publichousing program is a national program which must be workable in all sections of the country where there is a demonstrable need for such housing. Your committee calls attention to the fact that isolated examples of low costs cannot be accepted as a valid basis for a maximum cost limitation to cover all conditions everywhere in a country as vast and as varied as ours. It is well known that building conditions and costs vary greatly in this country. In some areas, climatic conditions permit lighter construction than in other areas. In some sections, the entire level of prices and incomes is lower than in others. It follows that while the costs of both private and public construction will be relatively low in some localities, any over-all limitation that

would have the practical effect of barring construction except in those areas would be manifestly unjust and unreasonable.

The bill also reduces the maximum period for loans and annual contributions from 60 to 40 years (except that 60-year loans may be made on projects not assisted by Federal annual contributions) and the maximum contribution rate is correspondingly increased. The shorter amortization period is expected to result in lower interest rates on local housing-authority bonds. The saving in total interest paid, as a result both of such lower rates and the shorter repayment period, will more than compensate for the increased contribution rate.

RURAL NONFARM AREAS

The housing needs of low-income families who live in rural nonfarm areas are as serious as those of low-income families in urban areas. Two provisions have, therefore, been written into the bill with specific reference to this problem. First, your committee has provided for a specific 3-year reservation of 10 percent of the authorizations for annual contributions contracts for rural nonfarm housing. Under this proviso, your committee expects the Public Housing Administration to undertake a program of assistance to local housing authorities in the provision of low-rent housing in rural nonfarm areas. Secondly, the bill provides for the transfer of farm labor camps administered by the Secretary of Agriculture to the Public Housing Administration for use as low-rent housing, and authorizes the reservation of all or a part of the accommodations in such camps, for migratory agricul tural workers and their families. The bill requires that the rents for such accommodations as are reserved for migrating agricultural workers shall be amounts which they can afford to pay, and permits funds of the agency to be used to make up any deficits, and authorizes appropriations to reimburse agency funds for expenditures for such purposes.

RENTS ACHIEVED AND FAMILIES SERVED UNDER EXISTING LOW-RENT PUBLIC HOUSING PROGRAM

In recommending the foregoing amendments to the United States Housing Act of 1937, and in proposing an expanded program under that act, your committee is joining the many previous congressional committees which have, over the past several years, carefully considered the problem of rehousing slum dwellers, and have repeatedly reaffirmed the conclusion that a public low-rent housing program, aided by Federal and local governments, is the best solution to the problem.

In support of this conclusion, your committee wishes to call particular attention to the low rents which it has been possible to achieve under the present program, and to the low incomes of the families living in the projects.

Rents actually charged in the original low-rent projects, as shown by the Annual Report of the Public Housing Administration for 1947, averaged only $27.24 per month, including substantially all utilities, such as heat, electricity, and gas. This was approximately $1.25 per month less than the average rent charged in substandard dwellings in urban areas, and indicates that low-rent housing was being made

available at about the same prices which low-income families were accustomed to pay for slum housing.

The actual annual incomes of families in the original low-rent housing projects for the first 6 months of 1948 are shown in the following table:

Annual incomes of families in low-rent housing projects, percent_distributions and medians (Public Law 412 and PWA projects, first 6 months of 1948)

The income of the families admitted to the projects during the first half of 1948 are shown in the first column of this table. Over 52 percent of the families admitted had incomes of less than $1,500, only 9.3 percent had incomes in excess of $2,000. The incomes of the families admitted averaged $1,481.

and

The incomes of all the families living in the projects in the first half of 1948 (as shown by reexaminations of income) averaged $1,884 per year. This average covers a substantial number of ineligible families then living in the projects whom it had been impossible to remove because of acute housing shortages, and because of a congressional prohibition against eviction which has since been repealed. All ineligible tenants are now being required to move from low-rent housing projects under a plan for gradual removal, pursuant to which they will all have received notice to vacate by the end of 1949.

In order to indicate how far down in the income scale public housing is actually reaching, it is interesting to compare the average incomes of tenants with the incomes of all urban families. The Bureau of the Census recently reported that in 1947 a figure of $2,630 per year marked the top of the lowest income third of city families, while the average income of such families in the lowest third was $1,789. The average income of $1,481 of families admitted to low-rent projects at about the same time was 17 percent below the average income of all families in the lowest income third, while the income of eligible families living in the projects averaged 11 percent below the same figure. In short, it is clearly apparent that the families admitted to, and the families living in, public housing not only come from the lowest income third, but from the lower segments of that income group.

Based on evidence such as the foregoing, your committee is convinced that the present low-rent program has been a successful pro

H. Repts., 81-1, vol. 3——————-74