VUt Qongress, IstiSession.

__-_

House Report No.:590

HOUSING ACT OF 1949

REPORT
FROM THE

COMMITTEE ON BANKING AND CURRENCY

TO ACCOMPANY

H. R. 4009
A BILL TO ESTABLISH A NATIONAL HOUSING OBJECTIVE AND THE POLICY TO BE FOLLOWED IN THE ATTAINMENT THEREOF, TO PROVIDE FEDERAL AID. TO ASSIST SLUMrCLEARANCE PROJECTS AND LOW-RENT PUBLIC HOUSING PROJECTS INITIATED BY LOCAL AGENCIES, TO PROVIDE .FOR FINANCIAL ASSISTANCE BY THE SECRETARY OF AGRICULTURE FOR FARM HOUSING, AND FOR OTHER PURPOSES

MAY 16,1949. Reported with amendments, committed to the Committee of the Whole House on the State of the Union and ordered to be printed

UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1949

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CONTENTS
I. History of legislation. ; II. Major subjects covered by II. R. 4009 ..._ III. Tlfe housing need-. " " .'-IV. Declaration of national-housing policy . V. Slum dearance and community development and redevelopment VI. Low-rent public-housing VII. Housing research... . VIII. .Farm housing..-. IX. Miscellaneous provisions X. Maximum rates of financial commitments under the bill XI. Scction-by-section analysis of the bill as amended XII. Changes in-existing law Minority views, of Hon. Frederick C. Smith 6 8 8 lly 13 17 26 29. 31 35 35 62 81

ta

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81ST CONGRESS ) HOUSE OF. EEPEESENTATIVES ( REPORT - 1st Session J . _ ( N o . 590

HOUSING ACT OF 1949

MAY 16, 1949.Committed to, the Committee of the Whole House oh the State of the Union and ordered to be printed

; SPENCE, from the Committee on Banking and Currency, sub~ mitted the following

REB'ORT
[To accompany H-. K- -1009]

The Committee on Banking and Currency to whom was referred the bill (H. R. 4009) to establish a national housing objective and the policy .to bo followed in the attainment thereof, to provide Federal aid to Assist slum-clearance projects and low-rent public housing projects initiated by local agencies, to provide for financial assistance by the Secretary of Agriculture for farm housing, and for other.Jpurposcs, having considered the same, report favorably thereon, with amendments, and recommend that the bill as amended, do pass. The amendments arc as follows: 1. Page 8, lines 5 and 6, and page 10, lino 18, strike out "not'to exceed in any fiscal year an additional" in each place where such appears therein and insert in lieu thereof "additional amounts aggregating not more than". 2. Page 17, lino 12j insert a comma after "3709" and the following '^'as amended,". 3. Pago 19, line 6, strike out "sections 1 and 2 of the", strike out all of lino 7 and "and 276c)" ou lino 8, and insert hi liou thereof "title 18 U. S. C., section 874, and-of title 40 U. S. C., section 276c,". 4. Pago 21, lino 2, strike out "platted urban or suburban"; and on lines 7 and 8 strike out "unplatted urban or suburban". 5. Pngc 28, lino f>, strike out "need" and insert in lieu thereof "needs". 6. Pago 28, lino 24, strike out "initiated after March 1, 1949,". 7. Pago 29, lino 6, after the word "project" insert "initiated after the date of enactment of the Housing Act of 1949,". 1

HOUSING ACT OF 1949

S. Page 2.9, olrike out nil of line 16 and strike out through "scrviccr inch)" oh line 17, and insert in lieu thereof:
families of-decwcd veterans and scruecinen whose d..ath ha .been: determined, .by the Yetcrai-a' Adininistratiuu to be scr\ice-connected, and third preference shall bt-given to families o'f'other veterans.and servicemen;

9. Page 29, lilies 23 Jjd ?4, strike out "(including families of deceased veterans or servicemen)'" where such appears therein; 10. Page 30, line 4, insert ~& comma immediately following "connected" and the.following:
and second preference shall be given to families of deceased veterans and servicemen whose death has-been (Ictcnnincd by the Veterans' Administration to be service-connected . . ~- -^ " -

11. Page 30, line 22, after "(5)" strike out the remainder uf said line and strike out oil of lines 23, 24, and 25 and.strike out all of lines I through 6, inclusive, on page 31 and insert in licu-llii-rcui.
Even, contract made pursuant to this Act fur loans (other than.preliminary loans) annual contributions, or -capital grants for any low-rent housing project completed.after January 1, 1948, shall provide that the cost fcr construction and equipment.of aiich project (excluding land, demolition, and nondwelling facilities! shall not- exceed 81,750 per room (82,500 per room in the case, of Alaska)

12. Page 31, line 2i, strike out "The Authority sliaH mnke'lonns,", strike out all of-Ijnes 22,23 and strike out through the word "projects" on line 24 and insert-in lien thereof: - -Every contract made pursuant jo-this Act (or loans (other than preliminary loans),/un.iial contributions, or capital grants \\ith respect to any l.o\\-rcnt housing project initiated after March 1, 1949, shall provide that such project shall be .undertaken in such a itmnncr that it

13. Page 32, line 0, following the comma strike out "every contract for", strike out all of line 7 and strike out through "March 1, 1949," on,line 8, and insert in lieu thereof " every such contract". 1,4. Page 32, line 24, insert a comma following the word "shall" and the following "if the Authority so requires,". 15. Page 35, line 5, immcdiatcly~following the word "Act" ai.d before the close pui cnthesis insert "and notwithstanding any other provisions of law'L. 16. Page 35, lino_17, strike out "provisions of this Act" and insert in lien thereof "first proviso of subsection 10 (b), or, where applicable, the- second proviso of subsection 10 (c)". 17. Page 41, lines 17 and 18, strike out "not to exceed in any fiscal year an additional amount of" where such appears therein and insert in lieu thereof "additional amounts aggregating not more than". 18. Pago 42, line 17, strike out "not to exceed in any fiscal year an additional" and insert in lieu thereof "additional amounts aggregating not more than"; and on line 20 strike out "not to exceed in any fiscal year" and insert in lieu thereof "amounts aggregating not more than". 19. Pago 43, lino 4, strike out "development" and insert in lieu thereof "commencement of construction". 20. Pago 43, lino 24, before the comma following the word "exemption" insert "and the authorization of payments in lieu of taxes". 21. Pago 44, lino 10, strike out "contributions were payable" and insert in lieu thereof "contribution dates occurred"; and on lines 22 and 23 strike out "contributions arc payable" where such appears therein, and insert in lieu thereof "contribution dates occur".

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22. Page 45, line 21, strike out "familitics" and insert in lieu thereof "families". 23. Page 48,. immediate fdlloAvahg Jine 11 insert the following new section 208:
TRAXSFEH AND-OPERATION* OF LABOR .CAMPS

SEC. 20S. (a) Section 2 (d) of the Farmers' Home Administration Act oJF 1940, as amende'1., section 43 (f) of the Bankhcad-Jones Fann Tenant Act,.as amended; and Public Law 29S, approved July 31, 1947, arc repen.led effective as of the date of the transfer of the property and funds authorized hercundcr. (b) The United-States Housing Act of 1937, as anicndcd, is hereby amended as follows: (1> By adding the following new subsection (f) to section 12: "(f) There is'hereby-transferred to the Authority, effective not later than sixty days after the effective date of the Housing Act of 1949, all right, title, and interest, including contractual rights and reversionary interests, held by the Federal. Government in and with respect-to all labor-supply center*,-labor homes.Jabor camps, and facilities hcUbin connection therewith and heretofore administered by the Secretary of Agriculture, for use by-the Authority as low-rent housing projects in rural nonfarm areas for families and persons of low income. Such projects when so transferred .shall (notwithstanding any other provision of.Iaw) be low-rent hvisiiiR projects subject-to the provisions of this Act, except as otherwise provided in this subsect' ;n. Any or all of the accommodations in-any of such projects, other than standard family dwellings a.!i:dctcrinincd by the Administrator (where preference shall also be given migratory farm workers and their families), may be rcscryd for rental-to migratory agricultural-workers and their families and the runts of the accommodations, so reserved shall not be higher than such workers can afford. The provisions .of the second and third sentences of subsection 2 (1) of this Act shall not bc.applicablo to the occupants of accommodations other than standard'family dwellings. The Authority is authorized to enter into contracts for disposal of said projects by any of the method* .pro\ided in this Act, including disposal of any such project to a public housing agency for a consideration consisting of the pay incut by the public housing agency to the Aut hyrity. during a term of not less than twenty \ oars of al. income t hercfrum after deduction of the amount* necessary for (i) reasonable and proper costs of management, operation, maintenance, and improvement of such project, (ii) payments in lieu of taxes not in excess of 10 per centum of shelter rents, (iii) establishment and maintenance of reasonable and proper reserves, and l'i\) the payment, of currently maturing installments of principal and interest on any indebtedness incurred in connection with such project by the public housing agency with the approval of the Authority. Pending sale or lease of said projects to public housing agencies, the Authority may continue present leases and permits, or may enter into new leases with public bodies or nonprofit organizations for the operation of such projects. Pending sale of such project*, the Authority may make anyncce-v-ary improvements thereto and may [my any deficits iuciu.ud in their improvement and administration out of any of the" funds available to it under this Act. Appropriations to reimburse the Authority for any amounts expended pursuant to this subsection, in excess of the funds transferred with such projects, are hereby authorized."; (2) By inserting in subsection 12 (b) following the w-ord "Federal" the words "low-rent housing"; (3) By inserting in the first sentence of subsection 12 (c) following the.word "Federal" the words "low-rent housing"; (4) By deleting in subsection 12 (d) the word "project" in the three, places where it occurs and substituting tho word "projects"; and (5) By deleting from subsection 12 (e) the word "any" where it first occurs and substituting therefor tho word "the", and by deleting thr word 'project" in the two places \\hcrc it occurs in subsection 12 (c) and substituting tho \\oul "projects". (c) All unexpended balances of funds available f</r the maintenance, operation, and liquidation of the properties transferred Uereunder and for administrative expenses in connection therewith shall bu transferred, upon tho transfer of such properties, to the Public Housing Administration to bu available, until expended, in accordance with the provisions of tho United States Housing Act of 1937, as anicndcd.

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HOUSING JtCT .OF 1940-

24. Page 53, line 12, strike out "321b" and insert in lieu thereof "321h". 25. Page 54- line 6 after the period on said lino insert the following he\v sentence:
To facilitate the cooperation of Federal agencies in carrying out such studies or surveys, such Federal agencies are hereby authori/cd to accent funds and re.imbufse their appropriation for the cost of such studies or surveys.

26. Page 55, immediately following line 8 insert the following new section:
Sue. 304. The Administrator shall appoint a Director to administer the pryvisions of thi:: title under the direction and supervision of the Administrator, and the basic rate of compensation of such position shall be the same as the basic rate of compensation established for the heads of the Constituent agencies of the Housing and Home Finance Agency.

27. Page 72, line 8, strike out "51* nncl i:\sertah lieu thereof "501". 28. Page 73, lines 19, 20 and 23 and pa^a 75, li:^ 2, 3 and 6, strike put "moneys" where such appears in each place therein and in each instance insert in lieu thereof "monies". 29. Page 77, Jines 3 and 4, strike out "the State or" wl ere such appears therein. 30. Page 78, immediately following line 8 insert the following new sections, section 508 and section 509:
NATIONAL CAPITAL HOUSING AUTHORITY SEC. 508. Notwithstanding any other provisions of la_w, the National Capital Housing Authority is hereby authorized to acquire sites for low-rent public housing projects assisted under the provisions of the United States Housing Act of 1937, as amended.
DISTRICT OF COLUMBIA PARTICIPATION

SKC. 509. To make available to the District of Columbia, and to authorize the appropriate agencies operating therein to accept, the benefits provided by titles 1 and II of this Act, the District of Columbia Redevelopment Act of 1945.is hereby amended by renumbering sections 20, 21, and 22 thereof as sections 21, 22, and 23, respectively, and by adding after section 19 a new section to read as follows: "SKc. 20. (a) As an alternative method of financing its authorized operations and functions under the provisions of this Act (in addition to that provided in section 16 of this Act), the Agency is hereby.authorized and ci.ipoweTed to accept financial assistance from the Housing and Home Finance Administrator (hereafter iii this section referred to as the Administrator), in the form of advances of funds, loans, and capital grants, pursuant to I'tlo I of tho Housing Act of 1949, to assist the Agency ii. acquiring real property lor redevelopment of project areas and carrying out any functions authorized undor this Act for which advances of funds, loans, or capital grants may be made to a local public agency under title I of the Housing Act of 1949, and the Agency, .subject to the approva_l of the District Commissioners and subject to such terms, covenants, ai.,1 conditions as may be prescribed by the Administrator pursuant to title I of the Housing Act of 1949, may enter into such contracts and agreements as may be necessary, convenient, or desirable for such purposes. "(b) Subject to the approval of the District Commissioners, the Agency is authorized to accept from the Administrator advances of funds for surveys and plans in preparation of a project or project." .'.tithorizcd by this Act which may be assisted under title I of the Housing Act of 1949, and the Agency is authorized to transfer to the Planning Commission so much of the funds so advanced as the District Commissioners shall determine ti be necessary for the Planning, Commission to carry out its functions under this Act with respect to the project or projects to be assisted under title I of the Housing Act of 1949. "(c) The District Commissioners arn authorized to include in their annual estimates of appropriations items for administrative expenses which, in addition to

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loan or .other funds available therefor,.arc necessary for the Agency in carrying out its functions under this section. "(d) Nutwitlistanding the limitation contained in the lost sentence of section 110 (d) or-in any other provision of title I of the HousingrAct oM949, the Administrator is authorized to allow and credit to the Agency, such. local grants-in-aid as are appro,able pursuant to said section 110 (d) with respect to any-project or project? undertaken by the Agency under a contract or contracts entered into under this section and assisted tinder title I of the Housing Act of 1949. In the event such local grant-s-ih-aid as arc so allowed by the Administrator are no'f sufficient to meet the requirements for local grantSrih-aid pursuant to title I of the ilousing Act of 1949, -the District Commissioners arc hereby authorized to entjr into agreements with the Agency, upon.which agreements the Administrator iiay.rely, to.make cash payments of such-deficiencies from-fuiids of IHc District of Columbia. The District Commissioners shall include items for such cash payments in their annual, estimates of appropriations, and there arc hereby authorized to be appropriated, out of any money, in the Treasury not otherwise appropriated, the amounts necessary to nrovide 'for - jch cash payments. Any amounts due the Administrator pursuant to any sn.ch agreements shall be paid promptly from funds appropriated for such purpose. "(c). All receipts of the Agency in connection with any project or projects financed in accordance with this section with assistance under title I of the Hou-ing Act of 1949, whether in the form of advances of funds, loans, or capital grants made by the Administrator to the Agcncj', or in the form of proceeds, rentals, or revenues derived' by the Agency from any such project or projects, shall be deposited in the Treasury of the LnitecTStatcs to the credit of a special fund or funds, and all moneys in such special fund or-funds are hereby made available for carrying out the purposes of this Act with respect to such.project or projects, including the payment of any advances-of funds or loans, together with interest thereon, made by the Administrator or by private sources to the Agency. Expenditure^ from such fund shall be audited, disbursed, and accounted for as arc other funds of the District of Columbia. "(0 With respect to any project, or projects undertaken by the Agency which arc financed in accordance with this section with assistance under title I of the Housing Act ori949 "(1) sections 3 (f), 3 (k), and 7 (g), and the last sentence of section 6 (b) (2) of this Act shall not be applicable to those pieces of real property which, in accordance with the approved project area redevclcr^icnt -plan, arc tobe devoted to public housing to be undertaken under Public Law 307, Seventy-third Congress, approved June 12, 1934, as amended; "(2) the site and use plan for the redevelopment of the area, included in the redevelopment plan of the project area pursuant to section 6 (b) (2) of this Act, shall include the. approximate extent and location of any land wit<hin the area which is proposed to be used for public housing to be undertaken under Public Law 307, Seventy-third Congress, approved June 12, 1934, as amended; "(3) notwithstanding any other provisions of this Act, the Agency, pursuant to section 7 (a) of this Act, shall have power to transfer to and shall at a practicable time or times transfer by deeds to the National Capital Ilousing Authority those pieces of real property which, in accordance with the approved ].riiject, area redevelopment plan, are to be devoted to public housing to be undertaken under Public Law 307, Scvcnty-lhiru Congress, approved June 12, 1934, as amended, and, in accordance with the requirement;; of section 107 of the Ilousing Act of 1949, the National Capital Housing Authority shall pay for the same out of any of its funds available for such acquisition. "'fO It is the purpose and intent of this section to authorize the District Commissioners and the appropriate agencies operating within the District of Columbia to do any and all things necessary to secure financial aid under title I of the Housing Act of 1949. The District of Columbia Redevelopment Land Agency is licrcoy declared to be a local public agency for all of the purposes of title I of the Housing Act of 1049. As such a local public agency for all of the purposes of title I of the Housing Act of 1949, the Agency is also authorized to borrow nionoj from the Administrator or from private .sources as contemplated bj title I of the Housing Act of 1949, to issue its obligations evidencing such loans, and to pledge as .security for the payment of such loans, and the interest thereon, the property, income, revenues, and-other assets acquired in connection with thp project or projects financed in accordance with this section with assistance under

ii. Kept. r.no, 8i-i-

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HOUSING ACT OF 1949

title I of the Housing Act of 1949, but such obligations or such pledge shall not constitute a debt or obligation of cither the United States of of the District of Columbia. "(h) Nothing contained in this section or in any other section of this Act shall relieve the Administrator of his responsibilities and duties under section 105 (c) or any other section of the Housing Act of 1949." " _ ""

31. Page 84, line 6, strike out "508" and insert in lieu thereof "510"; and on line 10 strike out "509" and insert in lieu thereof ?'511". / ~ * I. HISTORY OF THE LEGISLATION' -j .'
HEARINGS ON BII,L

H. R. 4009 is one of the large number of housing bills which have been referred to your committee on Banking and Currency during the first session of the Eighty-first Congi ess. The bill would establish a national housing policy, would provide Federal financial assistance for the clearance of slums, for low-rent public housing, and for rural housing, find would authorize a comprehensive program of housing research. These are, in substance, tho uncnacted provisions of housing legislation which, previously, have received extensive study by the Congress, have been passed three times by the Senate, and which were also approved last year by this committee in the Eightieth Congress (H. R. 6888, Kept. No. 2340). In view of the long con; sideration and widespread approval which these proposals had already received, and in view of the further fact that they arc designed to meet several, of the most urgent problem areas in the field of housing, it was the judgment of your committee that first attention should be directed to II. 11. 4009 before taking up various other housing proposals consisting, in the main, of furthe.- improvements to financing aids for private housing. Hearings on II. II. 4009 were held by your committee during the period from April 7 through May 9. Your commit tee heard testimony r b} a great number of witnesses and was impressed not only by the ovpvwhehninn; support of its provisions from spokesmen of a wide variety of citizen groups, but also by the increasing acceptance of its major objectives even by industry leaders who disagreed with detailed provisions. In addition, your committee had (he benefit of evidence gathered by several congressional committees o\er a period of five years regarding the nature of (he housing problem and various solutions which have been proposed. These studies and findings are summarized in the following paragraphs.
SBVBNTY-NINTII CONGRESS

In July 19-15 the House Special Committee on Postwar Economic Policy find Planning submitted its report on Postwar Public Works and Construction. The conclusions of this special committee with respect to the matters covered by titles 1 and 11 of the bill now being favorably reported were as follows:
The Government should establish the legal basis upon uliicli State and local jurisdictions mn\ be encouraged to undertake a systematic program of community development in which the stimulation of lou-rent- housing occupies a major place. This program contemplates local initiative in construction, financing and opera-

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tion. Tlic responsibility of the Federal Government shruld be to provide incentives through the purchase of a percentage of the construction bonds, or yearly payments over a specified period.to the lo.cal authorities of the difference between the income from rentals and the coats of operation, including interest and amort ization on capital indebtedness.

. In. 1916,-during the second session of the Seventy-ninth Congress, the Senate, following recommendations both of its Committee on Banking^ and Currency and of the Subcommittee on Housing and Urban Redevelopment of the Senate Committee on Postwar Economic Policy ami Planning, passed S. 1592, known as the WagrierEllender-Taft biL. The bill contained a declaration of national housing policy and objectives and provided for the establishment of a permanent ovev-all Federal Housing Agency, the continuance and improvement of Federal financing aids to encourage long-term mortgage financing; the cslablishmcnL of Federal yield insurance for privately owned reht.l housing, the extension of Federal financial assistance for additional low-rent public housing under the United States Housing Act of 1937; the establishment of Federal financial assistance to help cities eliminate slums and blighted areas; the development of plans for an attack on deficiencies in farm housing and the authorization of a comprehensive Federal research program in housing. In the House, the Banking and Currency Committee was unable to conclude hearings on S. 1592 before the adjournment of Congress.
EIGHTIETH CONGRESS

Legislation closely parallelling the Wagner-Ellender Taft bill was introduced during the first session of the Eightieth Congress. Before acting on Jicsc bills, the Congress decided to conduct a further investigation of the housing problem. In July of 1947, the Eightieth Congress created the Joint Committee on Housing, consisting of seven members of this committee anil an equal number from the Committee on Banking and Currency of the Senate. This committee held hearings in 33 cities in all sections of the country and received more than 6,000 printed pages of testimony. In addition, several of its members conducted special studies on specifii; aspects of the housing problem. The legislative recommendations of (lie Joint Committee on Housing (IT. Kept. 1564, 80th Cong.. 2d scss.) corresponded closely with, and strongly supported, the major provisions of S. 1592 considered by the Seventy-ninth Congress, and of the successor bill S. 866 which was pending in the last Congress. S. 866, Eightieth Congress, was modified to conform to the recommendations of the Joint Committee on Housing and was approved by the Senate in April 1948. The House Banking and Currency Committee held further extensive hearings from May 3 through June 8, 1948. At the conclusion of these heatings, this committee reported favorably II. II. 6888, a substantially similar bill. This bill, however, was tabled by the Committee o'n Rules. In August of 1948, during the special session of the Congress called by the President, with comprehensive housing legislation as one of its principal purposes, the Congress enacted the Housing Act of 1948, which incorporated some of the provisions of the legislation.,Jho_ history of which Jliis report has traced. The Enacted provisions"

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HOUSING ACT OP 1949

included most of the private financing aids contained in the earlier legislation as well as a limited program for housing research directed at building codes and standardized measurements. However, the Housing Act of 1948 did;not contain ihcjm>poscd_provisions of the ejirJiejJcgislatiQn^oi giuir^.clearance, low-rentLpubh'c_hojjsmg. farm housing, or comprehensive housing research, nor did it contain provisions establishing national housing policy and objectives. The unenacted portions of these earlier .comprehensive housing bills arc the subjects covered by the major titles of the bill now being favorably reported by your committee. II. MAJOR SunjECTS COVERED BY H. R. 4009 Your committee is convinced, from the- evidence presented during the recent hearings and made available from previous studies of the housing problem, that this bill, in combination with existing legislation, will provide a sound foundation for a comprehensive housing program. The bill covers five major subjects. First, the bill would set forth a declaration by the Congress of our national housing objectives and the policies to be followed in attaining them. Such a declaration, your committee believes, is warranted by the importance of housing to the growth,' wealth and security of the Nation. Second, the bill would authorize Federal loans and grants to enable communities to make an effective start on the clearance of slums and blighted areas. The overwhelming evidence, both from the lack of progress generally throughout the country and the testimony presented to the committee, is that Federal financial assistance is essential if local communities are to deal effectively with this problem. Third, the bill would authorize Federal financial assistance to communities in order (lint they may resume local programs of low-rent public housing. This assistance offers the only hope within the foreseeable future of providing adequate housing for urban and rural nonfarm families of low income who arc inadequately housed. Fourth, (lie bill would authorize a comprehensive program of technical research and studies in housing, directed particularly at obtaining progressive reductions in costs which now prevent private enterprise from serving a larger portion of the need. Fifth, the bill would extend Federal financial assistance for the provision of decent housing for farm families \\lio do not otherwise have moans of obtaining adequate shelter. Your committee recommends the enactment of H. R. 4009 as essential to an}* effective housing program which will contribute townrd increasing and improving the general supply of housing throughout the country. Your committee docs not claim that this legislation deals w i t h nil facets of the housing problem, cither alone or in unibinatiun w i t h legislation all udy enacted. During its hearings on II. R. 4009 the committee recched many helpful suggestions as to additional legislation and has before it bills which deal with, other phases of housing not covered in H. R. 4009. III. THE HOUSING NKED There is little disagreement that housing constitutes one of the Nation's most serious economic and social proolcms today.

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Although the seriousness of the Nation's housing situation lias been high-lighted since the end of the war by the urgent housing problems of returning veterans, the basic problem itself is not a new one. It has been building up over several decades. It results from the fact that over the years vre have never been able to produce enough housing, at prices which a large proportion of the American people can afford. Consequently, housing has never been replaced as rapidly as it should, and many families have been obliged to.live iu wholly inadequate and unsuitable accommodations. Unfortunately, the effects of poor housing leave their heaviest imprint upon the millions of children who are being .obliged to spend their formative years either in dreary, iinhcalthful slums, or in overT crowded dwellings in which, normal family life cannot be achieved. The maintenance of our way of life and our aspirations as a people and a dcmocracj' depend to a large extent upon these children whose attitudes and minds are being foi mod for the future in the homes of today. In attempting to get some mensvie of the magnitude of our present and prospective housing requirements, your committee had available to it the comprehensive studies and investigation of-the Joint Committee on Housing. This data and other material-made available to your .committee leads to the conclusion that the Nation must be prepared to build or rehabilitate at least 1,300,000 uonfarm dwelling units and between 200,000 and 300,000 farm units a year each year from now to I960, if substantial progress is to be made in bettering our housing conditions. The latest Census Bureau reports show that, in April of 1947, after deducting seasonal accommodations ami houses held off the market for one or another reason, effective nonfnrni-housing inventory for year-round use was about 32,729,000 dwelling units. When allowance is made for the fact that about 2,100,000 new and converted units were added to the supply since April 1947, the effective nonfarmhousiug inventory t the beginning of 1949 is estimated at 34,829,000 units (table 1). Looking ahead to 1960, the Bureau of the Census estimate that, there will be approximately 39K million nonfarin families which will require separate housing. When allowance is made for a sufficient number of vacancies to provide for reasonable freedom of choice in the selection of the sixe and type of home desired, this means there will be need for an effective housing supply of approximately 41,100,000 nonfarin dwellings in 19(50. Just to keep up with the increase in the rate of family formation, therefore, we will require 6,300,000 additional nonfarin units to our inventory between now and 1960. If no more than this is accomplished, the quality of our housing supply would hr worse in I960 than it is today. No progress would have been made" in eliminating the substantial number of imiu which fail to come up to any do :cnt American standard. Nor would anything have been done to cope with those currently adequate imfl* which, will deteriorate during the years ahead. Currently available data docs not permit a full statistical measurement of all deficiencies ii: the housing inventory. However, a conservative measure of the number of substandard nonfarin uniu> \\hicli need to be replaced or rehabilitated is the number of nonfarin units which the Census Bumvu data indicates heed major repairs, together

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HOUSING ACT OF 1949

\\ ith those units in urban nrcns which, although not needing major repairs, lacked inside private bath and flush toilet. In April 1947 approximately 5,600,000 units, both occupied and vacant, were in these t\vo categoric1'. This figure fails to take into account, however, substandard or inadequate housing in the densely populated suburban communities which surround most of our large cities but which arc not included in the Census Bureau statistics for urban places. It also fails to include the effects of continued use upon old houses which today arc in satisfactory condition. In this connection, your committee calls attention to the fact that the Joint Committee on Housing concluded that ah allowance of 2,000,000 units is a conservative estimate of the additional replacement or rehabilitation needed takeover these two categories Allowance should also be made for the replacement of housing lost as a result of disaster or similar causes, and of temporary war and veterans' housing units not a part of the permanent housing supply. The replacement of these units, together with the rehabilitation and replacement of substandard housing, brings up to some 14,725,000 units (or an average of slightly more than 1,300,000 units a year) the total job that would have to be done in nonfarm areas by I960 to make substantial progress in meeting the housing problem. Your committee appreciates the fact that the problem is not limited to nonfarm areas, and that a distressingly large proportion of farm housing fails to measure up to minimum standards for health and decency. Some of the worst overcrowding occurs in farm housing. Some of the most dilapidated housing is to be found in rural communities. In April 1947 the Census Bureau survey showed tlmt 1,400,000, or roughly one-fifth of all farm dwellings, were in need of major repairs, and in addition, over half the units not in need of major repairs failed to have running water, bathtubs, or inside toilets. On the basis of the census statistics and testimony presented in the course of the hearings, it appears that between 2 and 3 million farm homes will need to be built or rehabilitated between now and 1960. All told, the total job, including both nonfarm and farm housing, involves the construction, conversion, or rehabilitation of some seventeen to eighteen million dwelling units (table 2).
TAIII.K 1.Effective nonjarm housing inventory as a/beginning of 10 j9 (in thousands) Tot.il number of nonfnrin duelling units, April 1917, according to Bureau of Census , ' 34,2-18 SuMi.iut: Uninhabitable dwellings 137 Seasonal collages, limiting lodges, etc 001 Vacant units held off the market (hoarded up mansions, units sold or renled but not vet occupied) ', 301 1,510 Effective supply of housing (o meet nonfarm needs of as April 10-J7 ' 32,720 Add: Estimated additions to supply in 10>>7and 10'lS through new construction and conversion 2, 100 Estimated effective nonfnrin supply, beginning of 101!) 34, 820 i U. S. Itiin-.li] o( llic OMJIIS. Cnrronl Population Deport*, rcrlra P-70 N'o. I II(>u;lnc Clinnwtfrlstlcs or tlio United Smirc, April 1017, table 1. <

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TABLED.Housing needs of the United Stales in 1060 (in thousands)

Number of nonfnrm fainiliss which will require housing in I960.. Add: Allowance for 4 percent effective vacancy rate for rent or sale Total.effective supply of dwelling units needed in I960 Subtract: Estimated effective supplv, beginning of 1949 (from table 1) Net additional number of units which need to be added to the supply by I960 to keep up with rate of family format iun Add: Total replacement and rehabilitation need (from table 2).. Total nonfarm ne\v construction conversion and rehabili. tation iiced : Add: Total farm new construction and rehabilitation need Total United States housing needs to J9GO
> Huremi of the Census estimate of nonfarm families.

' 39, 500 1, COO 41,100 34,829

G, 271 8, 470 14,741 2, 000-3, 000 1C, 741-17, 741

IV. DECLARATION OF NATIONAL HOUSING POLICY

Since the establishment of the Home Loan "Bank System \>y the Seventy-second Congress in 1932, every successive Congress lias given attention to housing, and numerous measures dealing separately with various aspects of the housing problem have been enacted. A great part of this legislation was orginally enacted to deal with acute problems which became apparent during national emergencies, including the economic crisis of the early thirties, the necessity of shelter to meet the production requirements of World War II, and the postwar veterans' housing emergency. It is now well recognized that housing is not a temporary problem \\hich can be solved by emergcncj* measures; that it requires a comprehensive, long-range program. Some of the programs of strictly emergency or experimental character have been discontinued and have been 01 are being liquidated. But from a considerable part of (his legislation have emerged permanent, programs which hnve been continually revised and impro\ed by the Congress to scr\ e changing needs. These include a system of aids to home financing institutions which is administered by the Home Loan Bank Board; the credit insurance programs of the Federal Housing Administration; and the low-rent public-housing program administered by the Public Housing Administration. Underlying tho development of these programs, as \\ell as the establishment of several emergency programs, has been the implied recognition that the well-being and security of tho home are matters of national public policy, and that the stability of I he home-building industry is essential to the health of the economy. There has never been, however, a statement by the Congress of the national housing objectives or of basic policies as to the respective spheres of activity for industry, labor, communities, and tho Federal Government in the attainment of those objectives. Your committee believes that such a declaration of national housing goal and policies is needed. It would provide a frame of reference for the use of the Congress, the administrative agencies, the local communities, and industry and labor in appraising housing activities and progress.

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HOUSING ACT OF 1949

The policy declaration in H. R. 4009 reflects-the 17 j'cars of experience by the Federal Government in housing activities and the consideration which has been given to basic legislation during the last fe\v 3'ears. Your committee notes that such policy declarations were contained iii the comprehensive housing bills referred to this committee during the Seventy-ninth Congress and the Eightieth Congress and that a similar declaration was recommended by the Joint Committee on Housing. The statement in H. R. 4009, while it contains certain improvements, is in full accord with those earlier declarations and recommendations. The poiicj- declaration in H. II. 4009 staler that the general welfare and security of the Nation require the realization as soon as feasible of the goal of a decent home and a suitable living environment for every American family. It recognizes the necessity of attaining a rate of housing production sufficient to overcome the serious housing shortage and to replace slums anil other inadequate housing, and to enable the housing industry to make its full contribution to an economy of maximum cmplo3'incnt, production, and purchasing power. In defining the policy to be followed in attaining this national housing objective, the bill recognizes that primary reliance has been and must continue to be on private enterprise. It provides that private housing enterprise shall be encouraged to seiye as large a part of the total need ns it can and that governmental assistance should be utilized to the extent fca&ibje to enable prhatc enterprise to serve more of this need. Furthermore, the bill calls for assistance to communities in undertaking positive programs to encourage the production of lower cost; housing of good quality. The definition of national policy also includes the extension of Federal assistance for slum clearance and for the provision of decent housing for low-inconu families in cities and rural areas, to the extent that those needs cannot be met through reliance upon private enterprise. To obtain further assurance that all housing acti\ itic& of the Federal Government, at the regional and Wai levels as well as in Washington, will be administered within the letter and (he spiiit of this defined national policy, the policy declaration contains a specific congressional charge and directive to the administrative agencies of the Federal Government to exercise all powers, functions, and duties with respect to housing, so as to encourage and assist the attainment of the following specific objectives: 1. The production of housing of sound standards of design, construction, iivability,,and size for adequate family life; 2. The reduction of the costs of housing without snurifico of such sound standards; 3. The use of new designs, materials, techniques, and methods in residential const ruction, the use of standardized dimensions and methods of assembly of home-building materials and equipment, and the increase of efficiency in residential construction; 4. The de\eloj)incnt of well-planned, integrated residential neighborhoods and the development and redevelopment of communities; and 5. The stabilization of the housing industry at a high annual volume of residential construction. Such a declaration of national housing policy can provide tltc ncccssai'3 guide lines now lacking for the concerted and sustained efforts

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HOUSING ACT OP 1949

'

13;

by industry, labor, communities; and the Federal Government which arc required to help overcome the national housing problem. .It will define our policies aiut objectives not only for the substantive programs contained in the pending bill, but likewise for existing.prograins arid for the fiirtlierjegislalion wJu'ch the Congress will consider in the future. ~~ V. SLUM CLEARANCE AND COMMUNITY DEVELOPMENT AND REDEVELOPMENT' NEED FOR A SLUMrCLEAIlANCE PROGRAM The provisions of this title offer, for the first time, a greatly desired, but long-delayed, program to eliminate the Nation's slums. Today about one-fifth of our city families live in shuns and blighted areas. They obviously do. not live there by choice. They live there primarily because only in the slums can they find an}' sort of housing accommodations at .prices and .rents which they can afford to pay. From city after c\i.y throughout the coimtiy has come evidence, of the extravagant wastes of human and other resources arising from slum conditions. Slums and blighted areas foster delinquency, disease, and crime, the effects of which can only be partly measured in the statistics available to j'our committee. They create demands for welfare, lire, police, and other financial outlays grenllj' in excess of the revenues which cities receive from them. Communities have long been aware of the social and economic costs of these areas but have been unable to take effective steps toward their eradication because of their inadequate resources. A few> like Baltimore, h a v e attempted to alleviate these conditions through the exercise of local pulice power in requiring the compulsory repair or closing of substandard housing. Such efforts frequently have been credited \\ilh offering an adequate solution to the problem. While your committee bclicM's thai nil cities should utilize effectively police powers to mitigate some of the worst effects of slums and to help prevent 'their spread, it is cominced, from th- o\er\\ helming evidence presented by majors ami from many others, that this-method alono will eliminate neithci the slums nor the conditions \\hich they create. The committee was impressed by the testimony of 'the mayor of Baltimore, as to the limitations of law enforcement as a solution to the slum problem. He stated:
Thu Haltiiiiori plan illicit.bucoin|mrcil tofir.^uul administered in the temporary nb>ence of a doctor, \\liicli \\ould nut bu i.ucc.^nrv if the doctor \\unj payout to begin uitli, nmluliicli in no\\u\ eliminates lliee\entiml need for tin; doctor's services.

Your committee is convinced that ihe only way by wliich slums ma.\ be effecti\ ul.\ eliminated is by the public acquiMtjon and cleara.iieo of shim areas ami bj assuring that they will be jvdc\ eloped in accordance \\illi sound plans as to land uses, density, and other factors contributing to good neigliborlioods, ami be properly related to tho growth and development of the city as a whole. Because of their present intensive use, the prices which must bo paid for .slum and blighted areas, together \\ith the ,:osl.s of clearing and preparing them for reuse, \\ill generally exceed the return \\hich \\ill~bu reali/.ud from sale or lease of the land fur appropriate mle\ clopmont.
H. Kept. 000, Sl-1-

. j

J ,

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HOUSING ACT OF 1949'

These arc the costs which prevent slum clearance from being a profitable venture for private enterprise. These arc the costs which, together with the large capital, outlays required; have prevented the loca) communities, with very few ahd'Jipited exceptions, from moving ahead with this task within their own limited rcscfurccs,. The objective of the programs contained in title I of this bill is to provide the necessary financial assistance that will enable local communities to Jhake an effective start toward eradicating the slums. " The overwhelming evidence presented to this and other congressional committees is that only through such Federal assistance can substantial progress be made in dealing with this problem. It is in the national interest that iip further delays in starting an effective attack on the slum problem should be countenanced. Slum clearance is a time-consuming process and any further postponement of the already long-delayed start in meeting this problem would merely set back for a further indefinite period any hope for progress toward its ultimate solution.
FEDERAL ASSISTANCE ATJIIORIZED IN H. K. 4009

S.. R. 4009 would authorize the Housing and Home Finance Administrator to assist L"-alities in carrying out slum-clearance projects. The appropriate local public body in each city would select the project areas, prepare the redevelopment plans; acquire the project sites, and prepare them for disposition f^r redevelopment. The role of the Federal Government would be restricted to the making of loans and capital grants, furnishing technical assistance, and assuring compliance with statutory requirements. Federal loans would be utilized.to finance the capital cost of acquiring, clearing, and preparing the sites for appropriate reuse. The grants would help the local communities absorb the losses which represent the difference between the costs>of the slum-clearance operation anil the reuse value for whHi the land is sold or leased for redevelopment. The loan authorization aggregating $1,000,000,000 would become available over a 5-year period, will. $25,000,000 becoming available on July 1, 1949, $225,000,000 on July 1, 1950, and further amounts of 250,01)11,000 on July 1 of each of the three succeeding years. The bill penults the initial loan authorization, and any of the authorized increases therein becoming available in any yoir, to bo increased (subject to the total lonn' authorization of $1,000,000,000), at any time or times, by not to exceed additional amounts aggregating' not more than $250,000,000 .upon a determination by the President, after receiving ad\ice from the Council of Economic Advisers as tp the general effect of such increase upon the conditions in the building industry and upon llic.national economy, that such action is in (he public ir(.crest. . The capital-grant authorization totals $500,000,000 and would become available in f i \ o annual installments of $100;000,000 beginning July 1, 1949. The bill permits the initial -capital-grant authorization, ' and any of the. authorized iiiuruasi's therein becoming uailablo in any year to bo incruasud (subject to the total oapital-gra..t authorization of $500,000,000), at. any time or times, by not to exceed additional amounts aggregating not more than 8100,000,000 upon a detennina-

HOUSING ACT OF

1949

tiqn by the President,,after receiving advice from the Council of Eco,nomic Advisers as to the general effect of such increase \ipon the conditions in the building industry and upon the national economy, that such action is in the public interest.
HOW THE FEDERAL ASSISTANCE WOULD BE USED

UndeV H. R. 4009; Federal assistance would be available only to finance the costs of acquiring and clearing slum sites and preparing them for redevelopment; none' of the fuiu!s would be available to finance the construction of buildings on the cleared sites (except that temporary lou. may be used to finance certain public facilities foe open sites as indicated below). Temporary FederuHonns would be available to finance the costs of planning of local projects, .land acquisition, and the clearance and preparation of the sites for reuse. On disposition of the land for redevelopment, the temporary loans would be repaid'out of the proceeds of sale of the land (or, in the case of lease, from the proceeds of longterm-loans), the Federal grants, and the local cash contributions. I^png^term Federal loaiis would be available to refinance, on the basis 6f thcj^usc value, portions of the. sites which are leased and wduld~T>e sccufcTT by the rentals from the leased land. The net loss involved in this slumrclearance operation would be shared by the Federal Government and the local community on a 2-to-l basis. Thus, the Federal grants may not exceed two-thirds of the losses on all clearance projects undertaken in anj one locality. The balance of the losses must be borne by the local public agencies eithcrjn^ cash or through contributions other than cash, such as the7" provision bf parks or schools necessary, tojupport the JicwTiscs^of the IanaT tne^ojisjruction or relocationjof-strccts and utiliticsjbrjhc use inunicipaTTabpx-anjjffiuipmcnt for the cleatunce operation^ Cvidence before your conYnutlee indicatesTIiaTa substantial writeoff of excessive costs will be necessary if redevelopment of the slum areas is to be in accordance with the appropriate uses. In the light of the best informed judgment as to the ability of the cities to contribute to slum-clearance programs, therefore, your committee is cpnvin -od that the 2-to-l sharing formula is necessary if the purposes of the program are to be achieved. It is obvious that the aid extended must be sufficient if the program is not to bo self-defeating. If it is inadequate, it would either prevent the initiation of local slumclearance projects or, by forcing the overbuilding of the redeveloped areas, make them susceptible to deterioration into slums again in the future. The evidence presented to your committee on behalf of the United. States Conference of Mayors an,d by other city officials, as well as the findings of previous congressional investigations of this matter, afford convincing evidence that any change in this sharing formula to require larger contributions by the cities, would severely restrict or defeat the basic objective of this program. The clearance of land in residential slums in central city areas and its redevelopment in accord with a plan for tho:most appropriate use of the land, such as for liouajng tif less density, for jndiistry_ojL|oy jjublic j)un)oacs7\v ill necessitate a ihsporsion or a consulcrablo portiort oftKo'families now living in such areas. Your committee is convinced
*

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HOUSING ACT OF 1949

thnt Federal assistance for the acquisition and preparation of open and predominantly open lund to bo developed for predominantly residential use is essential so that adequate provision ran be made for the necessary dispersion of sona- portion of the central city population. In the case of predominantlyopen land, both loans and capital grants are authorized, but in the case of open land no-capital grants may be made. As already noted, l\\c bill authorizes temporary loans als'o to finance schools or otJjcr public facilities necessary to serve or support the new uses of open or predominantly open land. Such loans arc to be repaid with interest as soon as the development of die area and its tax base permits the appropriate local body to refinance the loan from the proceeds of a regular bond issue, and in airy-event within 10 years.
SLUM CLEAHAXCE AND HOUSING

While the slum-clearance program pjovided in this title is separate from those provisions .dealing directly with housing, your committee wishes to emphasize that the primary justification fqi Federal assistance for this purpose is the improvement of housing conditions for urban families. This program must be conducted in such a manner that.it will contribute to, rather than detract frjin, this essential objective. Jl. JR. 4009 would assure the adhcience to Ihe primary Jiousing purpose in two principal-respects. In the first place, the bill clearly recognizes that the clearance of slums and the provision of decent housing for families who live in them arc insopaiable. Any slum clearance which fails to assure adequate housing for the families who presently live in shuns would bo merely forcing them into worse conditions. This applies with particular force to families of minority races for whom the problems of relocation arc particularly difficult. The slum-clearance program, therefore, i-. set in the context of a bill which has .as one qf its major purposes the provision of adequate housing for such families. There are, in addition, three specific safeguards. First, the extension of Federal financial aid to a local public agency for slum clearance is prohibited unless a feasible method is provided foi tlia temporary relocation of families displaced from project areas and unless permanent housing has-been or is being provided for them either, in the .project areas or elsewhere. The permanent housing Jinist. coiisiot of decent, safe, and .sanitary dwellings which are located in areas not generally loss desirable in regard to public and commercial facilities and which arc available at rents nnd pric.es within the financial means of displaced families. Second, the demolition of resident inj. structures in slum-clearance projects is prohibited prior to July 1, .1051, if the local governing body determines that undue hardship, y.ould result. ThiiM, first preference for occupancy of low-rent public, housing projects assisted under this bill must be extended to families displaced' from slum-clearance projects if they are otherwise, eligible, for admission. The second basic principle relating the slum-clearance program to tluunajor purposes of this legislation is through, flic restrictions on the nature of the project* fur which Federal assist .nice may-he provided. Federal aid to localities for slum clearance is .restricted to those areas which-are- predominantly residential or whii.ii \\ill be redovcl -pod for predominantly residential use. It is important to point out, however,

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that this requirement will not interfere with but will.rather assist t\\c broad-scale redevelopment of oiir in ban areas. .Slums and blighted areas as they exist today are predominantly residential. It is also "true that in residential slum-clearance projects, it will normally be necessaiy to include some adjacent nonresidential blighted areas in order to.assure thn.proper kind of redevelopment. The bill requires 'Mt the redevelopment plans for the locality afford maximum opportunity for private enterprise. Much of the construct ion required in connection with-the development orj-edevclopr inent of these areas would be under private au&pices, although there will necessarily be some public participation through the provision of schools, parks, and other public facilities, and of public housing where the localities determine that the sites are best suited for that use..
LOCAL. ItESrO.NSiRILITIES

As indicated above, H. R. 4009 fully recognizes the importance of local initiative and local responsibility. Your committee believes that local slum-clearance programs should be locally executed in such manner as to promote the achieycmi-nl of the objectives stated elsewhere in-this bill. Thus, in addition to providing the limitations already described; H. II. 4009 inquires the Administrator in t \lcnding financial assistance to give consideration to the extent to which localitiu1- have encouraged housing coat reductions through the adoption, improvement, and modernization and other local codes. Ti.iC'bill also requires that, in extending financial assistance under this iiljc, the Administrator shall give consideration to local codes and. egulations \\ ith respect to land use, mintmum standards of health,, safe.y and sanitation, and-other mallei's relating to the prevention of j.hc recurrence or spread of slums and blighted areas. Your committee feels that maximum benefits from the Federal aids provided for slum clearance can be obtained only if excessive P4ic.es are not paid for the areas.to.-b.c...clear.cd. The bill therefore authorizes the Administrator to include in any contracts or instruments for financial aid such covenants, conditions, and provision?, as will prevent the payment of such excessive prices, ami requires that the provisions of the title be administered so-as not to permit speculation, inland holding: Further, your committee calls attention to the fact that the carrying-out of a slum-clearance, and redevelopment project will naturally be a relatively long-term job. Accordingly, your committee fully expects that the administering agency will* require that there be used every practicable device to assure that the prices paid by the local public agency for the land in theproject area will be held at the absolute minimum. For example, once an area has been selected locally, the administering agency should require that the local government exercise its police- power to the fullest possible extent in such area so that prices paid for the land ^yill not reflect any excels values which may arise fro.m uses in violation of.local regulations as to health, safety, and sanitation. VI. LOW-RENT PUBLIC HOUSING TitleII of the bill would extend the low-rent public housing program which was originially established-by the United States Housing Act of

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HOUSING ACT 6" 1949

1937. That program would be augmented by the jprovision of a;i additional 1,050,000 homes for both city and iural nohfarm families who cannot afford^ to pay for adequate shelter-neither in new or existing private housing. ^^,
S -

HOW THE PUBLIC HOUSING PROGRAM OPERATES

.

The public housing program in Uie various localities is directly administered by local housing authoi itics which develop, own, and opei ate the low-rent projects. Local authorities are cieated pursuant to State lawj and their inembers are usually appointed by ihe mayors of the respective localities. The basic responsibility for the prevision of low-rent housing is tlius-rescrvcd to the various localities. The role of the Federal Government is appropriately restricted to the provision of financial assistance to the local authorities, the furnishing of technical aid and advice, and assuring compliance 'yith statutory requirements. . . . -" Two types of -Federal financial assistance arc provided under the United Slates Housing Actloans and annual contributions. Loans may be made to assist local autlioiities iiv-thc capital financing of their projects, but under the proposed finarcing provisions of this bill it is expected tliat local authorities will bo able to meet tlie great bulk of thftir.capital requirements by the sale of bonds to private investors. - The Federal loaning power will be used primarily in connection with the temporafy financing of piojccts during the construction period. The annual contributions paid by the Federal Government, together with the contributions made by local governments, serve to make-up the difference between the rents which families of low income can afford- to pay aad the annual operating costs and dcW service of the projects. The Federal contributions nrcjiinitcd to maximuiii.amounts .fixed in relation to the cost of the projects, but tlie amounts actually paid .each 3 cur are restricted to the amounts actually yoeded in such year. On the basis of .pnst experience, it is expected ihat. ^over a period of years, not more than two-thirds or three-quarters of the maximum amount will be required. -^ The local go\ernments contribute to the reduction of rents through the complete exemption of the low-rent projects from all real and persoiml properly taxation, subject to the making of small payments in lieu of taxes. Local contributions for the present projects under a sinulaf.sy.stcm have averaged well over half the amount of tlie Federal contributions. "^^ . "~ Tho.present low-rent housing program hns \vorked wolMn practice. IJL. has taken families from the slums and has provided I hem with simple but adequate homes. It has provided these homes at rents wiluiu the means of low-income families, without forcing them to deplete their meager budgets for food, clothing, and other necessities. This program has received the almost unanimous support of public officials and public-minded citizens in the municipalities where it has operated.
NKRD FOR PUBUC HOUSING

^^T

Tho extension of .the low-rent housing program ns provided in title II of H. II. 4009 is a basic;necessity if-wo arc to move toward the goal of a decent home and suitable living environment for every American

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family. As the Administrator of the Housing and Home Finance Agency stated in his testimony before your committee:
We cannot ignore the fact that there remains .today, and will undoubtedly rc-iain for years to coino, a considerable iM.-rccntagc.of our.families whose incomes arc so low that they must continue to live in slums or other inadequate housing unless we. take action to prevent it. The breadwiiihers of most, of these families are usually gainfully employed, and with proper budgeting their incomes are usually sufficient to'supply all the basic needs of their families except adequate shelter. Adequate shelter is not available to these families becausp rents or prices charged for such shelter would represent an .unduly aiid prohibitively high proportion of their limited income. The problem, both in its extent and imturc, is not the sort which can be solved in the foreseeable futuii by pri\;i|p cnicrprise even with further possible financial aids.

The testimony presented to your committee makes it abundantly clear (hat the great majority of the families living in the slums dp so only because they cannot afford to pay \\hat private enterprise must ch..rge for decent existing housing.. The rents which they can pay represent an even smaller portion of what private enterprise wo'uld have to charge on the basis of a sound economic return if it were to supply new housing for these families from the slums. Despiti-high postwar 1 -vels of employment and income, the rcpprts of the Bureau of the Census show that 19.7 percent of utban-families had money incomes.in 1047 of less than $2,000, while 30.3 percent had incomes of less than-$2,1500. On the -generally accepted-rule that the cost of housing should, if possible, not exceed one-fifth of income, the average rent which the urban families hi this lowest 30 percent income group can afford to pay would be approximately $27 pelmonth, including heat and nil other utilities. If the families now living in the slums are to be provided with decent homes, it is, therefore, evident that a large additional supply of adequate housing must be provided at rents which will average somewhat under S30 per month) including all utilities. Your committee is convinced that this can be done only with the assistance of substantial public subsidies, both Federal and local. Your committee is equally convinced that the public interest amply justifies the provision of such subsidies.
PROGRAM AUTIIOUI55KD U.N'pKR II. R. -1009

The bill authorizes the construction of not to exceed 1,050,OOQ new low-rent dwellings in urban and rural nonfarm areas. This autho^ization will become available in. 7 ni^iual installments of 150,000 units. After weighing all the-evidence presented to it, your committee has concluded that the number of dwellings authorized over the 7-year period is essential in view of the acute and urgent need for housing by underprivileged slum-dwellers. The bill authorizes the commencement of constriction on the first installment of 150,000 units after July 1, 1949. Each year thereafter this authorization is increased by 150,000 units until the full program of 1,050,000 units is authorized in 7 stages. In order that the progress of the new program may be adjusted, if necessary, to changing economic 'conditions, the 1'resident is authorized (after receiving the advice of the Council of Economic Advisers as to the effect of such action on conditions in the building industry and on the national economy) to increase or to decrease any of such authorizations at

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HOUSING ACT OF 1949

any time or times by amounts aggregating IT"' more than 100,000 dwellings, provided that the total authorization can never exceed 1,050,000. Any of the authorizations could, accordingly, be increased by 100,000 units at tiny time, m, for example, it could be increased by 50,000 units at one time and increased by a further 50,000 units at a subsequent time; but, after any authorization was increased by a total of 100,000 units, no further increase could ever be made with respect thereto. Thus, under the provisions of the bill, the President can adjust -any of the authorizations between a top limit of 250,000 units and a bottom-limit of 50,000 units. In the event that the full number of starts, authorized in respect to the beginning of any fiscal year was not fully used in that year, such authorization woiikl, of course, remain effective for subsequent use, subject, of course, to the total limitation of l,050;00q units. The Public. Housing Administration is authorized under the pending bill to enter iiito annual contributions contracts for 885,000,000 after July 1, 1949. This liinit will be increased by three annual increments of 880,000,000 and a final 875,000,000 on July 1, 1953. The total maximum contributions thus authorized would amount to 8400,000,000 per year. Although contracts may be written up to this maximum amount, it is expected that, on the average, the contributions actually paid will not exceed more than -two-thirds or three-quarters of this amount. Subject to the total of 8400,000,000 per year, the authorization for.annual contributions can also be accelerated by the President, and authorizations which become available at the beginning of one fiscal 3'earniay, if unused in suchycar, be carried over for subsequent , The total amount which the PIIA may borrow from the Treasury and have outstanding at any time is increased to Sl,500jObO,000, instead of the present authorization of $800,000,000. It also places the borrowing power on a revolving-fund basis. This borrowing power \\ill be used primarily to provide security for short-term loans made by the local authorities from private investors during the construction period. It is therefore anticipated that the funds actually borrowed from the Treasury will be very substantially less than the authorized amount.
AMENDMENTS KELATING TO SELECTION OF TENANTS

Alhiost 12 years' experience in the operation of the United States Housing Act has disclosed the desirability of a number of amendments to that net. JI. K. 4009 therefore includes several amendments which your committee believes to be desirable improvements and which will make the United Slates Housing Act a more flexible and useful device for providing adequate housing for low-income families. The first of these proposed amendments is designed to relate the public housing program to the new slum clearance program. Lowinconic families who are. displaced or arc about to be displaced by public slum-clearance or redevelopment projects or by low-rent housing projects will l>e given a-firsf. preference for admission to low-rcn\ housing. In this way, suilnblo'dwellings will become available to families who are to be displaced and \\ill aid slum-clearance projects in complying with the requirement in this connection which is included Jh the slum-clearance title. Since a positive program of slum clearance is

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HOUSING ACT OF 1949

21

provided in the bill, the present requirements of the United States Housing Actas to the elimination of substandard dwellings in connection with lowfrcnt 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-yoar period, . subject only to the preference to families displaced by slum clearance. As among such displaced families, veterans with service-connected dis^ abilities would have first preference, the families of deceased veterans whose death was scrviccTCohnectcd would have second preference,.and other veterans or servicemen would have a third preference. As among families who have not been displaced by alum clearance, vct> crans and servicemen would have similar preferences. Veterans are also exempt for a 5-ycar period, from the requirement that they must have been living in substandard housiiig 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 \\ould be inadvisable to require a statutory .percentage of each project to be so reserved, due to the-varying need for such facilities) iii 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 die committee be^ lievcs that provision.should be made for these socialized 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 oflow income. Your committee has found this charge to be unfounded hi terms of actual experience, which will be reviewed 'briefly later in this report. The pending bill, however, includes a number of requirements not how in tho act which \\ould gi\e 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 lo.thc proposed projects and the lowest rents nt-which private enterprise, unaided by public subsidy, is pro\iding (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 i convinced that private enterprise has never had anything to fear froin 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 cnlcr? prise. Further, under the terms of the bill, local housing authorities.-will Lo required to set maximum income limits for the admission of tenants to low-rent housing. The authorities must also set maximum limits for continued pepipahoy, generally at. a somewhat higher levol than those for admission. All maximum income limits will he subject to
II. Kept. 500, Sl-l 1

22

HOUSING ACT OF 1949

approval .by the Public Housing Administration. In the case of limits for admission, the bill specifically provides that hc.t family income cannot exceed five-times the gross rent, including heat and nil 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 fccxnmmcd; and, if their incomes exceed the maximum limits for continued occupancy, they arc required to move from the .project. In selecting tenants, local housing authorities will be prohibited from discriminating against families whose incomes arc 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 unjent housing needs, subject to the preferences to families displaced ^>y sl.im clearance and to veterans.
AMENDMENTS RELATING TO CONTRUIUTIO.NS 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 bntributioris 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 cosh, 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. lii view of this fact, and in .order to put projects in nil localities on nil 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 authorised 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 repeal" the prohibition against any payments in lieu of tax$s (other than amounts originally contracted for) which was included in the Government Corporations Appropriations Acts-for-194S and 1949 in respect to .projects requiring Federal contributions in those fiscal years, mid payments in lien of taxes equal to 5 percent of shelter rents arc authorized to be made retroactively ns to these 2 years for all projects, whether or mt 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 ] 937, arc obviously unrealistic in view of present building costs. Accordingly, the bill raises the limitation on the cost of constniction.and equipment of dwelling-facilities to $1,750 per room.

HOUSING ACT OF 1949

23

It also authorizes ajv increase in this cost limitation by not more than $750 per room in areas wl ere it would not be feasible without such an increase to construct public housing without sacrifice of sound standards of construction, design, and liability; and where there is an acute need for such housing. In-reviewing the question of necessary increases in cost liniiis, your committee was presented with information on this subject by the Public Housing Administration., A number of local housing authorities requested their contractors to rcestimate existing project^ 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: Sl,OOOtoSl,249.._. S1.250 to 1,499.. $1,500 to S1J49 SI,750 to SI,900.^ . S2.000 to 82,249..

.._.......__ - ,

Numlm o] projtett 8 . ^ 7 S 7 .5

These figures indicate tbe wide diversity in costs which arc 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 SI ,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 isj however, in the opinion of your committee, necessary unless we nre to risk dcprivingjiigh-cost metropolitan areas, such as New York, Xcwark, Chicago, Detroit, Philadelphia, San Francisco, and Boston, of their rightful chance to participate in the program. Your committee brio noted the contentions soim-timcs advanced that the costs of public housing authorized in t1;is title should be reduced to thciowcst levels at \\ Inch private housing is being produced. Your committee docs not believe that these contentions arc realistic or well-fo'intLcd. tn 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 oven in (hose sections housing of this type would bo suitable for the intensive, long-term use required in public housing or for the wide range of family sizes which clearly should bo 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 every where-in a country as vast and as varied as ours. Tt is well known (hat building conditions and costs vary greatly in tliis 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 pri\utc ami-public construction will be relatively low in some localities, any over-nil limitation that

425

24

HOUSING ACT OF 1049

would have the practical effect of barring construction except iii 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 GO-year loans may be made on projects not assisted bjr 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-authpritj bonds. The saving in total interest paid, as a. result both of such lower rates and the shorter repaynnnt period, will more than compi-n^itc for the increased contribution rate.
RURAL NOXFAKM AREAS

TL. housing needs of low-income fauilies who live in rural nonfarm areas are as serious-as those of low-income families-in urban areas. Two provisions Inni ..therefore,been written mlu'iheT>ijl with specific reference to this problem. First, yor.r committee has provided for a specific 3-ycar reservation of 10 percent of the authorizations for annual contributions contracts for rural nonfarm housing. Under this proviso, j-our committee expccts-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 pro\ ides for the transfer of farm labor camps administered by the {secretary of Agriculture to the Public Housing Administration for use as low-rent ihousiiig, and authorizes the reservation of all or a part of the accommodations In such camps, for migratory agri^ultural workers.and their families. The bill requires that the rents for such accommodations as are reserved for migrating agricultural workers shiill be amounts which they cam afford to pay, and permits funds of the agency to be used to make up any deficits, and authorizes appropriations to reimburse agcnc}' funds for expenditures for such purposes.
RENTS ACHIEVED AND FAMILIES SKUVED V N D E U EXISTING LOW-KENT PUIiMC HOUSING PROGRAM

In recommending the foregoing amendments to the United Stales Housing Act of 10:J7, and in proposing an expanded program under that aa, your commiliro is joining the many previous congressional committees which'hn\e, over the past several yem.-., carefully considered tbii problem of rohotising slum duellers, 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 tl;'* conclusion, yo ir cc mmittee \\ islics to call particular attention to the low rents which it Ju; been possible to achieve under the present piogram, and to the low incomes of tho families living in the projects. Rents actually charged in the original low-rent projects, ns shown by (lie Annual Keporlof the Public Housing Administration for 1047, n\crngcd only $27.24 per month, including substantially all utilities, such as heat, electricity, and gas. This wns approximately SI.25 per month less than the a\urnge rent charged in substandard dwelling* in urban areas, and indicates that low-rent housing was being made

426

HOUSING ACT OF

25

available at about the same prices which low-income families wero 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 11948 are shown in the following table: Annual income* of families in low-rent Tiouting projcctt, percent distribution* and mediant: (Public Law 412 and PWA project*, first 6 months of 1946)
Rccxamlmtlon for continued occupancy All tenants Eligible to Ineligible ' rcexaminctl continue to continue

Annual income

New admissions

Pctctnt distribution: UndwJMO.. &00to$!>99 Sl.OOOtoSl.-109 Sl/OOtoS1.9... S2.UOO to $2.499 -.SiJOO to $2.999 $3400 to $3, 199. SWM to S3.9W' $1,000 and over Total ; . . . . . . . !

_ ....

Pmtnt 0.0 11.5 39.73SC 8.2 I.I

fnant 1.3

10.4

1'aanl 1.3
21.0 21. G H.I 5.3 .3 74.0

J'trurtt

100.0

31:0 22.6 18L6 11.9 6.0 3.4 4.8

10:4

0.6 5.7 3.4 4.3

1.0 ^ 5

ioao
*I,SS4

26.0
$3,00

S1.4S1

$1,504

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, and only 9.3 percent hnd incomes in evcess of $2,000. The incomes of the families admitted averaged $1,481. The incomes of all the families living in the projects in the firs! half of 1948 .(? shown by rccxaminations of income) averaged $1,884' per year. This average covers a substantial number _of ^ineligible families theiTnyjng_in tho_nfoiccts.jyJiom"it liad been impossible .to remoyc bcgausfijoLa.cut o hpjising sliQEtagcs^and because of a coneviction wliipli Tins sinca boon repealed . All ineligible tenants arc now hcing rcqiiircd to mpjcjftojn Jo_w-ront housing proiccts under a plan for gradual removal, pursuant to which thoyjsvill all IiayeTocci^cdjnoTicci,to.Yaca.tp by^the-cnd 6f_1949,~ " lirbnlcr to indica'tj^liow falTilbwn 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 1 1 percent below the samo figure. In short, it is clearly apparent that the families admitted to, and the families living in, public housing not only como from tho lowest income third, but from tho lower segments of that income group. Based on evidence such as tho foregoing, your committee is convinced that the present low-rent program has been a successful pro-

427

26

HQtJSnJG ACT OF 1949

gram, that it is meeting the housing heeds of'low-income families on an economical basis, and that it should be expanded in accordance with the provisions of the bill favorably reported by your committee. Vn. HOUSING RESEARCH Research, which has made our Nation's Competence in ocicntific development and industrial skills a subject of world-wide respect, should be more fully used on a larger scale to obtain more and bettor housing for all American, families. In the judgment of your committee, this will require the authorization of a comprehensive Federal research program to the end that the already extensive facilities of our educational institutions, industry, foundations, private laboratories, and. of government may be better coordinated and focused on the achievement of the housing objectives stated elsewhere in this bill. It is this kind of a Federal research program that is contemplated by this committee in title III of this bill. The need for such a program has been emphasized repeatedly over the long period during which this legislation has beep under consideration, :ahd was a major recommendation of the Joint Committee on Housing. It has been supported during our recent hearings by witHQSSCS broadly representative of the American people. Among these witnesses were several industry spokesmen who recognized the value qf_ Government research to supplement the results of industry's own activities. Perhaps the most persuasive argument for the type of research program authorized by the bill is the simple fact that all who have an interest in and responsibility for housing, need and will benefit from the results of such research.* The homebuildcr who faces,the task of constructing more and better homes at lower prices to maintain his market will make better headway if he is in a position to apply the results of research into basic cost factors. Labor employed in homo construction will he helped toward the goal of more stable employment at good wages. Better information resulting from research will help the lending institutions in the wise .selection of investments for trustee funds, and it will help the producers and distributors of building materials and equipment who have been severely handicapped by the traditionnlboom-and-bust behavior of construction activity in the ast. Governmentslocal, State, and Federalneed more sound ictual information on which to evaluate the actions they should take in carrying out their respective responsibilities in housing. Last year, Congress authorized a limited program of housing research. Under the terms of the Housing Act of 1948, the Housing arid Home Finance Agency has undertaken research in the .improvement and standardization of local building codes and in the standard* zation of the dimensions of liomcbuiKling materials and equipment. This program has permitted a start in long-nejdcd research in two admittedly serious problem areas. While valuable anu tangible results may be expected from the authorization for technical research in these two areas, your committee is convinced that a broader and more comprehensive research authority is needed. The answer to the housing problem will not come from limited engineering research alone. Important as it is to seek engineering and technological progress, we cannot overlook the fact that many of our housing difficulties are

428

HOUSING ACT OF 1949

27

economic in origin. Complementary means must be found to rjempve these obstacles if full use is to bo made of the results of technical research. In this connection, your committee is in -agreement with the testimony of the Administrator of the Housing and Home Finance Agency when he-stated:
The housing problem has so many facets that it would be unrealistic to place all our hopes oh any one field of action. Housing research must lx> broad enough to disclose.the possibility of constructive action in ever}', aspect of housing, whether it be engineering, financing, management, labor, local administration or Federal. . . It is my belief that the. Federal Government should therefore broaden its research and.assume the leadership in analyzing all of the factors that in any way impede housing production, add to costs, prevent the improvement of our housing standards, or cast doubt on the value of housing as an investment. The formula of a progressively higher volume and lower unit costs is too successful in too many .other American industries.not to work in hom3.building.

The research title clearly indicates that the Housing and Home Finance Administrator is to undertake a rigorous and realistic program of research into all of the recognized obstacles to the attainment of the housing objective set forth in the bill. In recommending this title, your committee wishes to emphasize certain underlying considerations which will guide the administration of this legislation. In the first place, it is expected that responsible leadership will be exercised by the Housing and Home Finance Administrator in formulating and carrying out a program of comprehensive housing research. At the same time the bilf recognizes that other Government agencies arc now engaged in studies, experiments, and investigations which bear on one or another phase of housing, either directly or incidentally. The Public Health Service of the Federal Security Agency, tin- Construction Division, the Bureau of the Census and the National Bureau of Standards of the Department of Commerce, the Forest Products, Laboratory of the Department of Agriculture, and the Bureau of Labor Statistics of the Department of Labor are examples. The bill calls upon the Housing Administrator to consult with und make reconimcndations to such other departments of Government concerning action which may be necessary to overcome existing gaps and deficiencies in the field of research. In addition, the Housing Administrator is authorized to underhike studies in cooperation with industry and labor, with agencies of State and local government, and with educational and other nonprofit organizations. The committee .also expects that the research conducted under Ihe provisions of H. R. 4009 will be directed, insofar as possible, to those, problems whose solution holds the best immediate promise of wide application by industry and local governments. It will, therefore, be necessary for the Housing Administrator to give special attention to the task of disseminating the research findings, and to promote widespread acceptance and use of the practical results of such research. This is extremely important, for the benefits sought to be achieved by this program cannot be fully realized unless the practical results of technical housing research arc made available in usable form and are generally accepted and used. In this connection your committee calls specific attention to the fact that the research title of the bill, like other titles of the bill, recognizes the basic local responsibility for housing. Tims, research, in local building regulations, sanitary codes, etc., will bo pointed

429

28

HOUSING ACT OF 1949

toward the development of better standards and model forms for the guidance of appropriate local officials. Communities will be assisted and encouraged: to develop their own market surveys; and the results of major research activities will be made vailable for practical local application; The foregoing approach does not represent a novel departure for governmental research activities. For a great many years, the Department of Agriculture has been responsible for a broad and continuing program of agricultural research. In discharging this rcsponsibnit3' the Department engages in direct research activities, utilizing the resources of other Governmental agencies where feasible, and works cooperatively with universities and other public and private research groups. In carrying out a program of housing research, all available investigative devices must be put to work to identify the precise-nature of the productive process carried on b3' housing enterprises. In many cases, it will be necessary to develop entirely hew dc \iccs, and employ them in developing belter methods of financing home .production, model building regulations, health, safety, and sr itatjon codes, adequate guides for layout and planning, and many, other siich aids to the builder and the local officials with whom IK must work. It is obvious that many lines of inquiry must be pursued simultaneously and that many dilfcren. t3rpes of talent must-l> n employed. The evidence as to the research now being conducted in-the housing industry presented to your committee did not disclose 0113- indication that these activities were encompassing all of these problems, or that the results were being widcl3' disseminated. Your committee docs jiot feel that the complex nature of the housing industry permits this kind of a result. Xo particular segment of the industry is large enough or can.have a broad chough economic stake to do the kind of a job ilia t needs to bo done. In this connection, it must be-recognizcd that most of the housing in this country is built b3' the relatively small-scale builder. In 1938 the Bureau of Labor Statistics reported that SO percent of our home building was carried on by builders who constructed between 1 and 5 Jiouscs in a year. While the number of large-scale builders ^ns uivdoublcdly increased since (hat time, particularly in the large metropolitan areas, all available e\idcucc indicates that tins large majority of our building is still done by the relatively small-scale, builder. Therefore, any research .program, to be truly effective, rnu&t take into account the production problems of both large -and small builders, and must; be concerned-ill con&idciablc degree \\ilh the future develop,-nicnt of more economic! and effluent building organizations. And it must be directly concerned with gelling the results of that research into the hands of the Guilders for practical application in actual operations. The typical small builder today cannot afford to engage in research himself, or to o\ ciconic single-handedly, for example, the obstacles of over-elaborate building codes. Yet 3'our committee believes that every possible encouragement should be gi\<-.n to these small builders, who comprise a substantial part of the Nation's small business enterprises, to expand their operations, ami become better able to deal with technical, finiincial, and management problems.... The results of technical, cconon ic, and adniinistrati\c research can be \ cry useful to these
OA

HOUSING ACT OP 1949

29

builders if they arc made available to them. During its hearings the committee received concrete evidence of how Government research in only two design problem.s could result in substantial sayings to Amcrir can home buyers if .applied by c. considerable number of these builders throughout the "country; . Your committee is firmly convinced that the n-scarch program contemplated under title IIT of the bill is highly desirable to facilitate housing progress. The research program offers, the best promise of attaining real and lasting cost reductions through technological progress in an industry which, it is generally agreed, has lagged behind other American industries in this respect. It will result in a better understanding of complex market factbfvflrid will provide the factual data and statistics headed to evaluate the magnitude of the housing problem and the -relative success of efforts tt.m.cet it. It is a program which, under Government leadership, will bring real and lasting benefits to nil those interested in housing the consumer, as well as industry, labor, local:governments, and the Federal Government.

Vili. FAHM HOUSING

Your committee regards the farm housing title of the bill-as essential ui dealing with the phases of the .national housing problem covered in this bill. Heretofore, farm housing has been largely ignored both in our housing and our agricultural programs. It has been treated as a byproduct of efTon* to increase production. impro\e (lie sol., wovidc power, or as ;i mere supplement to lowii-and-cii-y-housing programs. The result has-been, ns nil of the facts before your committee indicate., that the quality of farm housing as a whole is considerably below the standards of nonfarm housing. Your commit tee is a\\ are tlm.t tin- higher.level of agricultural inuoiuc in the past several years lin* raised the standard of living on the farm, and that a considerable amount of home improvement has resulted. However, despite this relatively .improved financial position for fanning as a whole, a large proportion of our farm families is still unnblc to obtain adequate housing. The committee is informed that even in 1947 more than 2,000,000 farm families produced farm products yajuiul at- less than 1,500. It seems evident that most of these farm families would not be nbhr to improve their housing renditions without financial assistance along the lines provided for in tin's title of the bill. In 1047, also, 10 percent of our farm homing was in-need of major repairs, as compared to 8 percent in the case of npnfhrm bousing. Overcrow ding, which is usually associated with cities, was proportionately twice-:s prevalent in'farm housing as in nonfarm housing. Only 1 out of o farm dwelling units liiiil both private bulb and flush toilet compared to 73 percent of nnnfarm housing. Two-thirds of our farm dwellings lacked running water. Only 3 out of 5 had electric lights. Tmpro.\ oniuiit-of farm housing standards is essential to a sound and . secure rural economy, and to attract and maintain on the land a product ive type of person. One reason that form housing problems,.as such, have received less attention thus far than those of urban areas is the peculiar-mid specialized nature of farm housing. The farm home must be considered as ii.nciit.isno, si-i* '".'

30

BOUSING ACT OF 1949

part of the income-producing property find plant-from which the farm family deiives its livelihood. Measures designed to serve nohfarm housing needs arc therefore not adaptable to meet the different basic conditions with respect to farm housing needs. The farm housing program provided for in the bill, while small in relation to the need, will make possible a significant start in the imr provcmcnt of farm housing. At the same tinu. it will provide positive experience through which this approach can be.progressively developed .A1 improved. In recognition of the particular oonsi-'orations which surround the farm housing problem, till' IV ha& been designed to meet the three major types of farm, housing situations, and its administration has been placed under the Department of Agriculture, where it can be appropriately related U olhrv farm services and programs, .in.'particular to the farm rehabilitation programs of the Farmers Home Administration. The three types of .assistance provided under the bill arc: 1. For owners of self sustaining farms who arc unable to. obtain from other sources the financing needed to provide adequate housing for themselves or their workers^ or for other farm-building improvements, loans arc provided with terms up to 33 years ajid at not more than ^percent interest. Such loans may be secured by the far'^rs' equity in the farms. - :. 2. For owners of farms not self-sustaining at the time but which offer reasonable prospects that they can be made self-sustaining, by improved farm practices or by farm enlargement or development, loans of a similar type are provided, with annual contribution* available as a supplement \vhere needed for a period of not more than iO years. 3\ The l!)ird4ypo of assistance proposed relates to farms that offer no 'practical prospect of being made self-sustaining. Small loans, and a limited amount in outright grants, arc made a\ nihihlc for families residing on such farms. The purpose of this assistance is not to pro vide new or even adequate housing of a/permanent nature, but to make it possible for families to make such -repairs and necessary improvements to their substandard housing iu> will furnish them.and the rural community at least essential health protection and decent minimum shelter. Such loans.and grants are limited in amount and arc to bo used for such purposes as proper sanitation, a pure water supply, screens, light rook niul similar minimum repairs or improvements. Your omiiiiltee calls attention to the fact that this is tho section of the bill which offers a-litllo help to those who unfortunately are now living in slums on farms. To provide the m-i.-ary funds to carry out the above three types of assistance, this title of tbo bill provides for loans increasing in amount annually through- the foi^lh year to an aggregate of S'JoO,000,000. The amount of annual contributions provided would increase annually over 3 years to reach a.yeuily authorixatioirat the maximum of 85,000,000, with such contributions to be paid to any beneficiary over a period not to exceed JU years. These contributions would bo limited to a maximum of the annual interest, and one-half of the payment due on .principal in any one year. The bill also provides authoiity for $]'2,000,000 in.giants for tho third -part of the program. The maximum grant for any one dwelling or building would be $500. A loan or combination loan and grant is

432

HOUSING ACT OF 1949

31

limited to $J ,000 with rcspe t to any one farm, dwelling; pr building and to a maximum of. $2,000 in the aggregate to any one individual. Tlic bill also provides for technical.assistance by the Department of Agriculture in farm-home design.and- construction, and authorizes the Secretary of Agriculture to conduct research directed toward lowering the cost of farm housing and to assemble data and market information in this field. IX. MISCELLANEOUS PROVISIONS Title V of the bill consists of a number of'miscellaneous provisions, some of which are of substantive importance, and some of which arc technical. _
AMENDMENT OF NATIONAL BANKING ACT

Under provisions contained in titles I and ILof tlie;bill, a local public agency or'-u public housing agency, may, in connection with a slum clearance or low-rent housing project, borrow moneys from private investors on shorUtcrm notes, instead of securing an advance fronvthc Federal Government under its loan contract, bucli. short-term iiotes -when issued may, under the bill, be secured by an unconditional agreement by the Federal Government to/ advance to the public agency under its loan contract moneys sufficient to meet the principal and interest at maturity of such short-term notes and required to be used for this purpose.. In view of the special security features which would thus attach to these notes, section 502 (a) would authorize national banks a" ' (to the extent permitted by State law) State member banks of the 1'cdcral itesenu System to purchase or underwrite such notes (having a niaturity of not more than IS months) without regard to present legal restrictions limiting transactions to a fixed percentage of the. bank's capital and surplus. Similar authority-is extended by this section \\ilh respect.to.curtain long-term bonds of local pnblii housing agencies to which special security features would attach in accordance \\ith this bill under nuiiual contributions contracts between the Federal Government aiuktht local public agencies. This -authority would be consistent w i t h tlio present pnnisions of la\\ which permit such banks to underwrite, and deal in obligations of the United Slates Government, general obligations of any Stale or of any political subdivision ihe.reof, and obligations issued under authority of the Federal Farm Loan Act or by the Federal \\omc loan banks. The amendment to paragraph 7 of section 5136 of the Revised Statutes, made by subsection (a) of section 502, relates to short-term obligations only when thoy are. classified as "imestmeiit securities." The Treasury Department, ho\\e\er believes that, some issues of tlitso short-term not'u 1003*.,not have the qualifications of '"investment securities" but would rather ( artake of the. nature of a loan. Therefore, it-is necessary aLo to ame.id section 5200 of the Kc\ ised Statutes which prescribes the same limit.itioiis for (lie purcliase of loans as are prescril);d by section 5536 for tho purchase of inves ....:.', securities. This is done'by action 502 (b) of tlio bill.

433

:32.-

IT 7SING ACT QF 1949

-AMENDMENT OF GOVERNMENT CORPORATIONS APl'ROPRIATlbX ACTS FOR '1948 A5TO 1949

.The Government Corporations Appropriation Acts for 1948 and for .19.49 included provisos to the effect, that no payment* of annual contributions should be made which \yere occasioned by payments in lieu of taxes in excess of amounts originally .contracted lor. This restriction had the effect of prohibiting payments in lieu of taxes equal to 10 j)ercent-of shelter rents, as had previously .authorized- Lj PHA, and as .will be authorizcd-in the future under subsection 205 (b) of this bill. These provisos of the twojippropciatioii acts arc therefore repealed as of the beginning of Ik" fiscal years for which they apply, thus validating any payments already made \\itli the approval of PHA and in other cases permitting payments in lieu of-'tax'es on the restricted basis (generally 5 percent of shelter rents) authorized for'these 2 :years in subsection 205 (b). v-^_ ' The section would also lopeal a .proviso in the Government Cor^ pbrations Appropriation Act for 1949 which limits the number of employees of the Public Housing Administration above grades CAF1.0 ana P-3 to not exceeding 20' percent of the tota.l number of such employees. The committee believes that this limitation it unduly restrictive and that it^vill prove especially detrimental during the remainder of the fiscalyeai o efficient operations in view of the Public Housing Administratioix's increased' responsibilities under this bill to furnish financial and technical aid to hundreds of "Seal public_ agencies.and to purfoim important supervisory activities .ith respect to those agencies; Similar considerations led the Committee oil Appropriations to omit this personnel limitation from the provisions go\crning the Public -Housing Administration contained in .the independent oinces appropriation bill for 1950, and the House last month passed that appropriation bill without such ajjmitatioh.
CBXSUS OR HOUSING

The hearing*on H, R. 4009 made it clear to your committee that there is au urgent need for comprehensive up lo-d'alc information Oj,< our housing inventory which would lhro\v light on the size and quality of the housing supply and the \say in which this supply is currently being utili/.ed. Thu committee \\as deeply impressed with the unanimity of favorable opiiu'c..i of the witnesses, regardless of their views on other aspects of the hill, with regard > the necessity for enacting section 307., This section would give the Bureau of the Census the authority to conduct a census of housing in c.ch of the 18 States and the District of Columbia, .lia\\;iii, Puerto Rico, and Aln=ka in 195 and decennially thereafter. This ;ensus \yould obtain infornjation coiicui-niag the numher, chanu . "ristics, q.uality, and geographic distributio.i of all d.velling units in t i n - United Stales-and the Territories. The Bureau of the Ce.isiu \\c ild also-l:i granted l_ho authority to assemble suppk-nicntal statistics in aauuu:e-of or after the taking of such housing census n,i it feels nect'ssai'y to I hi- completion of (.he project. In recommending <i decennial:census of housing, the coinmi 'ce does _-not in any way u islu to minimi/e the value which is to he obtained from more frequent sample studies such as the one taken m April

434

HOUSING ACT OF 1949

33

1947. This sample study of the housing situation made it possible to identify the overall dimensions of the present housing p^blcm. It has alsro driven home to this .committee the shortcomings of our present supply of housing hvtuiius of its adequacy in coping with the heeds of an important part of our population, namely, families of low and>mqderatc incomes. Helpful as this sample study has been, there are still many gaps in our knowledge which can only be filled by a complete census of housing. Thus, it is uot possible through sample studies to obtain detailed housing data on a locality basis. The mot recent detailed locality information now available was provided iiVtlu-1940 Census of Housing. In view of the tremendoup graphic shift- in population which have occurred since 1940, ns ,o the vast improvement in our general economic situation sinci it time, this information is in the main seriously outdated. It is imperative, therefore, that steps be taken to get necessary locality information 6n-a current basis. Such current information will be invaluable; particularly to localities participating in programs "under titles I and II of the bill. Entirely apart from its.value to those directly concerned with the .housing problems of the Nation, a census of housing is of tremendous assistance to the large .segment of American business and industry which depends upon housing and home building for part or all of the outlet for its goods and services; Information obtained in the census of housing will, of course, also be of tremendous assistance to Federal, S.tate, and local officials charged with the responsibility of dealing with problems of housing, building construction, social welfare, city planning, urban redevelopment, and related activities. Despite this widespread interest in housing information, there is now no specific authority for the. taking of a census of housing in 19.50 or in subsequent census years. Your committee calls attention to the paramount importance for completion by the Congress of early .action on the necessary authorization for a census of bousing. Such early legislative action is necessary to permit essential advance planning and organization, without which the quality of the 1950 census of.housing would be impaired. This is especially true since planning has already started for the 1950 population census, and since the housing census is to be taken at the same time and by the same staff. Considerations similar to the foregoing led the House, on May 9, to pass H. R. 2203, a bill to provide for a housing ceiibiis in 1950. However, your .committee believes that the census provisions iu Ibis bill (sec. 507) should be enacted by the House as a part of this bill. These provisions arc very similar to those of the bill already passed by the House except that this bill provides for a housing; census as part of each decennial census hereafter. The census provisions of this bill are identical with those in.S. 1070-os passed by the Senate, and this committee is convinced that these somewhat broader provisions should be adopted.
AMENDMENTS CONCKKMiNG THK DISTRICT OF COI'UMIUA I'ROl'OSKD HY TUB COMMITTBK

Your committee recommends the enactment of two ne>v sections to bo added to title V of the bill which it lias found to bo necessary if the District of Columbia is to be able to obtain the benefits provided

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HOUSING ACT OF 1949

, , , , ,

for States, Territories, and municipalities under titles I and EC of the bill. The proposed new section 508 would restore to the National Capital Housing Authority its power to acquire sites for low-rent public housing projects^ thereby enabling the Authority to participate in the title n program on the same basis as other'local housing authorities. The proposed new section 509 would permit the District of Colupbia to obtain the benefits of Federal aid for slum clearance, under title I .of this billj on the same basis as provided in this bill for other cities throughout the country. The present District of Columbia Redevelopment Act would remain in full force andi effect, but the.amend-. meiit \\ ouKLprovide an alternative method of financing slum-clearance and redevelopment operations in the District of'Columbia-by vesting in the Redevelopment Agency (subject to the approval of the Commissioners of the District*of Columbia) the power !o accept 'Inancial assistance authorized under title I of this bill. The proposed new section would also authorize the Administrator of the Housing and Home I'mance Agency to allow credit for local grants-in-aid iii connection with projects undertaken with the District of Columbia, under title t of this bill, to the same extent as local grants-in-aid. are approvablc forothcr ci tics and Stales. It would provide that in the event such local grants-in-aid arc Jiot sufficient to meet the local grants-in-aid requirements, the District Commissioners would -be authorized to enter into agreements with the District of Columbia Redevelopment Land Agency to make cash payments of such deficiencies from the funds of the District of Columbia. Appropriations to the District Commissioners would be authorized for such purpose where necessary.
OTHEIl PUOVISIOXS

._ Oilier pro\ isions uf this title of the bill pro\ idc for the appointment by the Housing and Home Finance Administrator of advisory committees which would serve to further cooperation between the Cnnernmcnl and prhatc persons aiiu grot:pa interested in housing fiom the \icwpoints of the coiiMiiuer, industry, finance, and labor; the appointment of and compensation foi a Deputy Housing and Home Finance Administrator to.assist the Administrator and to act in his absence; the inclusion of the Secretary of Labor, or his dcsigncc, and (ho Federal .Security* Administrator, or his dcsigncc, > members of ( l i e National Housing Council in the Housing and Home Finance Agency, in recognition of the interest of these agencies in problems related to the Federal Go\ eminent'a housing program ;jl he coiuersion of certain State-aided low-rent or \etcraiis' housing projects, under appropriate conditions, to low-rent, .housing assisted under the United States Housing Act of lfl:)7; and the usual terms nt> to separability and the act being controlling in the e\cnt of inconsistency w i t h any other net.

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35

L MAXIMUM RATES OF FINANCIAL COMMITMENTS UNDER H. R. 4009

[In millions of dollars]

_
Commitments Tor repayable loans: Slum clearance * .. ... Low.rcntpublic'hoiislng1 Total, repayable loans Contracts for grants: .Farm housing .

I iscalyea IT

lew
25 TOO 25 750 100 1 101 85 S3. 5

1951 _225
50 275 100 2.5

1952

1051.
250 100 350 100 5 105 SO . 2.. S2

IBM 250 l.Obb 700 250 250 1,950

250
75 325 100 4'

100;
100

500 12.5

Contracts for inmul contributions: Total annual contributions

10Z5
SO ' 1 SI

104
SO 1.5

512.5

75 MOO 5 75 405

81,5

i May bo increased, within total authorization, at any time or times by the President by-additional amounts aggregating not more than $250,000.000. . 1 Thb. amount added to existing authorization of $500,000,000 and the total-authorization placed on a revolving-fund bask. 1 Subject to annual determination by tho Congress within these limits. * Ma> bo increased, a iilun total authorization, at any time or times bj the Frcsidcn! by. not to exceed additional amounts aggregating not more than $100,000,000. * May be Increased, within total authorization, at any time or times by the President by not.to exceed additional amounts aggregating not more than $$0,000,000. < Thb annual contributions authorized for low-rent public housing may be j..nl over a 40-year, period. The SlOO.OOO.njo is i he maximum amount which inay be pniil in any 1, year. Since the inception of tho original pr.^i.un, tho anniul contributions actually paid have amounted to 5S.5 percent of the maximum amounts which could be paid. 1 The contributions authorized for farm housing may be paid over a 10-year period. * Any subsequent year.

XI. SECTION H.Y SECTION ANALYSIS OF H. R. 4009, AS AMENDED

SECTION 1. SHOUT TITLE

This section provides a short and convenient form of citation.

SECTION' 2. DECLARATION OP NATIONAL HOUSING POLICY

This section sets forth the nuiional housing objcctu i-s as established by tho Congress ami the basic pnrriplos to be followed in attaining these objectives. In so doing it-atrcsaus the Xation's interest in housing production mid related cuiiimunit.v development because of the bns-ic contribution they can make both (1) toward improving the health itiul li\ing standards of the people and (2) toward an economy of maximum umpVvmcnt, production, and purchasing powor. Thus, the section establishes as specific objectives a volume of housing production and related community development sufficient to remedy the serious.housing sliortajjc, to eliminate slum and blighted areas, to reali/.o as soon as feasil>lc tho goal of a decent home and a suitable living environment for every American family, to redevelop communities so as to advance tho growth and wealth of the Nation, and to enable thu.Jiousing industry to make ih> full contribution loward an economy of maximum employment, production, and purchnsing.powcr. Tho kcysionp of tho national housing jjolicy established by tho Congress m this section to facilitate the attainment of these objectives

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HOUSING ACT OF 1949

is that private enterprise shall be encouraged to serve as Inrge.a part of the total need as it can, and that governmental assistam-c shall be utilized where feasible to enable private enterprise to sefye still more of the total heed, and that appropriate local public bodies shall be encouraged and assisted to undertake positive programs of assisting the development of well-planned, integrated residential neighborhoods, the-development arid redevelopment, pf communities, and the production, at lower cost - of housing of sound standards of design, construction, livability, and size for adequate family life. As a complementary policy, the section states that governmental aid to clear slums and provide adequate housing 'for urban and rural nonfarm families w hose incomes are so low that they are not being decently housed in now or existing housing shall be extended to those Jocalitjes which estimate their own needs and demonstrate that these needs are not lieing met-by reliance solely upon private enterprise, and without Mich aid, and that governmental assistance for -decent; safe, afid sanitary farm dwellings and related facilities shall be extended only win re the farm owner demonstrates that he lacks sufficient resources to provide such housing on his own account and is unable to secure necessary credit for such housing from other sources on terms and conditions whicUhc could reasonably be expected to-fulfill. To asstne that all housing activities of the Federal Government will be administered in accord with, the objectives and pollens thus .established by the Congress, there is included a specific congressional directive to the administrate e agencies which have functions, powers, and duties with respect to housing to so exercise them as to. encourage and assist (1) the production of housing of sound.slandards of design, construction^ livability, and size for adequate family life; (2) the reduction of the costs of housing without sacrifice of such sound standards; (3) the use of new designs; materials, techniques, and methods in residential construction, the use of standardized dimensions and methods of assembly of home-building materials and equipment, and the increase of efficiency in residential construction and maintenance; (4) the development of well-planned, integrated rcsi? dcntial neighborhoods and the development and redevelopment of communities; and (5) the stabilization of the. housing industry at a high annual volume of residential construction.
TITLE ISLUM CLEARANCE AXD COMMUNITY DEVELOPMENT AND KEDKVKLOi'MENT
GENERAL SUMMARY

This title provides for Federal aid to local communities for tlio clearance of their slums and blighted areas, .so as to make such areas and other areas necdi.l for residential construction available for development or,redevelopment, with the active participation of private enterprise. Two types of assistance arc authorized: 1. Loans, both temporary and long-term (but not in excess of 40 years in the case of long-term definitive loans), where needed- to finance necessary project costs, at an interest rate designed to return to the Government the cost to it of the funds it loans;and " ;

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HOUSING ACT OF *949

37

.2. A .capital-grant subsidy where necessary to enable the Land in the project areas to be made available for-use at prices consistent v ith prdperran'd'SQund'land use and.planning. . The administration of the program would be under tlie jurisdiction of the Housing and Home Finance Administrator. In-the administration of the pjqgram adherence to the following principles is required: 1. That any project assisted be related to the improvement of housing conditions in the locality. . __ 2. That_evcry project assisted be a local undertaking, locally planned, locally approved, locally managed, and designed to serve Ideal-needs;, 3.. That the redevelopment plans for the redevelopment areas in the locality afford maximum opportunity, consistent with the sound needs of the locality as a whole, for the redevelopment of. suoh areas by private enterprise.. . -~ 4. That there shall be local .financial participation in ah amount equal to -a.t; least one-third of the difference between the aggregate costs of all projects of the locality and the new reuse values of the land comprising Ihc-pfoject areas. 5; That there be adequate provision for. the rehousing of the families displaced by the clearance of the.area.
SECTION 101. HESrONSIBILITIES

This section provides that in extending financial assistance under this title, the IJousjhg and Iluinc Finance Administrator shall give consideration to the extent to \\liicli the locality has undertaken positive programs for (1) encouraging housing cost reductions and efficiency in construction through the adoption, and improvement of building ami related codes; and (2) preventing tlie spread or recurrence, in such community, of slums and bli0!itcd areas through the adoption,, improvement, and modernization of local codes and regulations relating to land u^c ami adequate standards of health, sanitation, and safety for dwelling accommodations. It also requires the Administrator, in extending financial assistance under this title, to encourage the operations of such local public agencies as arc established on a State, or regional (within a State), or unified metropolitan basis, or as arc established on such other basis as permits such agencies to contribute effectively toward the solution of community development or redevelopment problems on a State, or regional (within a State), or unified metropolitan basis.
SECTION 102. LOANS

1 J / .

This section, together with section 103, sets forth the forms and extent of Federal financial assistance. Section 102 provides for assistance in the form of loans \\hich (whether temporary or definitive) must bear interest at not less than the rate specified in the most recently issued bonds of the Federal Government having a maturity of 10 years or more a. the date the contract for thu loan is made'. Any long-term definitive loans made pursuant to this title must mature within a period not exceeding 40 years from the date of the bonds evidencing such loaiw.
H. Kept, 500..81-1 0

38;

HOUSING ACT OF 1949.

In connection with any project.on,land which is open or predominantly open, tenipofnry loans may bo:riiade (pursuarit'tp subsection (b) of section 102J to municipalities or other public bodies for the provision of school and other puUu 'buildings or facilities necessary to serve or support the new uses of land in the .project aea. 'j'his is necessary, particularly in tlie case of outlying projects which can facilitate the clearance of central shim areas, where difficulties may arise due to the lack of t i-rtain public facilities, especially schools. For example, the school district for such an outlying, area might not have a.tax base sufficient to permit the '-ouancu of bonds for building, a new school -until the project area is actually developed. In siicli a case, a temporary loan could be made to the school district itself, or alternatively a loan could Tic made to flio Veal -public agency -undertaking the project so that this agency could'coi.s.tr'ucl .the school and lease it to the school district pending the ability of the district ..to take the building over through -the issuance of its own bonds. Such temporary loans-must be repaid in not to exceed 10 years. \Miile providing for federal assistance in the form of loans where necessary, the suction also contains provisions to facilitate financing _ by private capital. It contains a provision to enable the local public agency to obtain loan funds from sources other than the Federal Government to the fullest extent practicable, and to substitute such funds for "borrowing from the Government. Tbc section also provides that the Administrator may make advances of funds to.local public agencies for survej's and plans in preparation of projects which may be assisted under this title, and that the contracts for such ad\ances of funds may hi- made.upon the condition that such advances of funds shall be-repaid, with interest at not loss than the applicable going Fed. ml rate, out of any moneys winch become available to such agent} for the undertaking of the project or projects involved. To provide- the funds necessary to make the loans,.thc Administrator is authorized, with the approval of the President, to issue and have outstanding at any one time notes or other obligations for purchnse by the Secretary of the T.-casury aggregating riot more than $1,000,000,000. This loan authorization becomes available over a 5-ycar period at the-following v.itc: S25;000,000 on and after July 1, 1949, increased by $225,000,000 on and after July i, 1950, and" by $250,000,000 on and Jtcr July 1 i,, each of the years 1951, 1952, and 1953, respectively. The section also permits (he initial loan authorization, and any of the authorized inn-cases therein becoming.available in any your to-be increased (subject to the total loan autliorhalion of $1,000,000,000), at any time or times, by not to exceed additional amounts aggregating not more than $2fiO;000,000 upon a dot<>;initiation by the President,, after receiving advice from the Council of Economic Advisers as to the gciu:ral effect of such increase upon the conditions in the building industry and upon the national economy, that such action is in the public interest.
SKCTION 103. CAPITAL OUANTS

This section provides for Federal subsidy, in the form of_capital grants, in those cases \ylicro~s'liiilj assistance is necessary if the land in the project area is toTbo available for proper use in accordance

440

HOUSING ACT OF 1949

39

with an approved plan for the project area and at prices consistent with such use. The capital grants wo.uld be limited in amount to two-thirds of the net cost of the projects assjstcd_in the locality. This has1 the effect of providing that the net loss or writedown in-r volveil in making the land in project areas available ior appropriate redevelopment (i. c., the difference between flic total costs of the projects and the proceeds received from tne disposition of the land) will be shared on a 2 to 1 basis, the Federal capital grants being available for not to exceed two-thirds of such Joss and the local grnuts-in-aid being available for at least one-third of such-loss. The Federal capital grants with respect to all projects of a local public agency oh which contracts for capital grants-have been-made .under tliis title cannot exceed two-thirds of the net loss on such projects. With respect to any individual project, the Federal capital grant cannot exceed the difference between flic net loss oil such project and the local grants-in-aid actually made with respect to that project. Thus, if a project cost 1,000,000 (including 8150,000 in site improvements and' public facilities paid for by the municipality as local grants-in-aid) aiid if the proceeds from disposition were StOO.OOO, resulting in a loss (or net project cost) of $300,000, 'the Federal grant \\oiild"-then bjj limited to $150,000 (being flic difference between the loss of $300,000 and the local grants-in-aid of $150,000) rather than $200,oJO (being two-thirds of the loss of $300,000). In the event that local grunto-in-aid -were sufficient to cover the entire loss, no Federal grant would be made for the project. Although Federal loan assistance for the acquisition and preparation of open land for residential use is provided for, it.does not appear that JicdcraLsubsidy assistance for such cases wouIcLat tins-time be justified. Accordingly^ no Federal capital grants niay be made" in commotion with such n project and,.correspondingly, no local grantsin-nid are required. Such projects would be excluded from the computation uf aggregate project costs, local gnnts-5n-aid, aim net losses used as. the basis for the sharing-of Federal and local grants for all oilier projects in the locality. The Administrator is nulhorizcd to contract to make capital gnnts aggregating not more than $500,000,000. This capital grant Authorization becomes available over n o-yi'.ar period at the following rate: $100,000,000 (ui and after July 1 in-each of the vcnrs 1949, 1950,1951, 1952, und 1953, respectively. T!ie section also permits the initial capital grant authorization, and any of the au'hori/.ed increases therein becoming available in any year to be increased (subject to (lie total capital grant authori/atio'n of $500,000,000), hi any time or times, by not to exceed additional amounts aggregating not more than $100000,000 upon ,i deterniiniilion by the" President, after receiving advice from the Council of Economic Advisers as to the general effect of such iiicnmsiuupon the conditions in the building industry and upon the national economy, that such action is in the public interest.
SKCTION 101. HKQUinKMr.XTS FOU LOCAL fiUAXTS-IN-AIR

This section requires the locality to share the net losses of any project iissialuil b.\ Federal capital gnints under this title and to call upon the Federal Gournmcnt fur nid only to. the extent necessary. It pro\ idea .that tholouil community mustitself participatefinancially

441

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HOUSING ACT OF

1048

to the extent of at least one-third of the net project cost, as defined in this title.. Such local assistance may be in the form of (1) ca^h grants, (2) donations of land, demolition or removal work, or site improvements in the.project area, or (3) the provision of parks, playgrounds and public buildings or facilities which are-of direct or substantial benefit to tlie_.project. Where a locality undertakes more than one project on which Federal capital grants arc to be made, this requirements relates to such projects considered in the aggregate. The definition of local gnmts-in-aid in section 110 (d). makes it . clcaj that the local community may noi-count as local :grants-in-aid (l)'the value of any land in streets, alleys, and other public righUs-ofwaj' which may be vacated in connection with the .project, (2) any low-rent public housing, or (,T) any demolition or removal vycikr/* improvement, or facility fur whiclrlin.v ^ITIIII ur -.uusuly haa been yys ( to J5c made by the L'liitud States r any agency or instrumcntafiTyA lluTrebf. If aiiyTjf the public -improvement* or facilities -.provided arc charged to .specific property owners bj way of. special assessments, the portion of the .amount su (barged wotild--hot-bu eligible for incltibion as a local grant-iiL-nid. Local public buildings or facilities, otherwise eligible as local granta-in-aid,-rcnmih eligible in thc^evcnt lht> should be assisted by temporary loans under section 102 (b).
SECTION* 105. LOCAL DETRHMIXATIOXS

This section assures liat aid to projects under this title will be based upon local determination uf need and maxin.ttm Hiance upon private enterprise. It provides that any contracts for financial aid under the title may be made (I, only with a duly aulhon/.iJ local public agency, and (2) onl^v if the redevelopment plan is appruxcd^ _ b}- the govcrniiig body of the Iocalit3'. Moreover, such approval must include finding!)-that the federal finan ..I ai.l to-be prcvidvi! in the contract is necessary to enable ihe land in. the'project area to be dcyclupud or rede\eloj)cd; that the redevelopment plans for the mle\clopnicnt-areas in tho locality will afTurd iniixiiniini up[)ortuniiy, consistent with the sound iiued^ of the localit; as a whole, for the development or redevelopment of siuh arena by private entcrpiise; and that the redr.v clopnicnt plan .oiifornib to a general plan for the development of the locality as a whole. This suction aUo-asamvs that all projects assisted will conform to the locally approved redevelopment plan. It provides thai as a conji'.itm to Federal a^hislaiico, this local public agoncy must agree to ob.'.jgatu (hose '" whom it sells or loaso.s the land in the project nrca to devote,tl'ie land to tko uses specified in (ho redevelopment plan and to begin the building of (heir iiiipnncm nta within a ruiMinable t;ime. The scr.lioii aUu requires that there b.u a feasible methoil for botli the temporary and pr.rmaiuMit relocation of the families who have been living in the area and who an displaced as a ivsiill of the clraranco of the area. The provisions of (his section ihat conlracls shall require that there arc or an: being provided, in reasonably suitable locations, permanent dwellings for families (o be displaced, are not intended tu be ligid specified lions. Obviously, shim -clearance projects cannot go forward without some difficulties fur the fiun'ilics to bu displaced. Provisions-lire therefore included to afford reasonable^

442

HOUSING ACT OF 1949

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protection for such families. The .provisions of this section arc general in nature,,in effect requiring that decent, safe, and sanitary housing be available for the displaced families in areas which have generally satisfactory public and commercial facilities, aud which are reasonably accessible to their places of employment. _ In view of the present acute housing shortage, this section would prevent the demolition of 'residential structures in connection with tnis-program prior to. July lj 1951 j if the governing body of the locality determines that such demolition would reasonably be expected to create undue housing hardshipln.thc community.
SECTION 106. GENERAL PROVISIONS

This section gives the Administrator the technical powers necessary for the performance of liis duties under this title. In so doing, it provides for the anointment of a director to administer the provisions of this title .aider the direction and supervision of the Housing and Home JFiriancc Administrator. ' ._
SECTION 107. PAYMENT FOR-LAND USED FOJC J-OW-JIEXT PUBLIC HOUSING

This section assures that the financial assistance under this title will not result in a double subsidy to fejIeraHy assistcd-low -rent public housing, by pr-'viding that any IaiurVvJlit;jn^icct..aj^ca made aA^ilabTe for such l6\y-QUJLt public housing must be pajd fyr-bylJie mTblicliousiiii* agency umTcrtnking Mich low-rcritj>uL)Iiclious|ng project..
SECTION' iO_8. SURPLUS ..DEHAL HEAL PROPERTY

This section authorizes the transfer to the Administrator of any Fectaral real property surplus to._tlic Jiccds of the Co\eriiment and within the area of n land assembly project. When ch land is sold to the local public agcocj' by the Administrator, it shall be sold at a price equal tbats fairimarkei value,-and the proceeds -from any such sales would be deposited in-the Trejisiiry as miscellaneous receipts.
SECTION 100. PROTECTION OP JjAHOR STANDARDS

This auction designed for the ]>rotcv;tiun of labor standards, requires tliat not less than-prevailing \\agcs be paid to those employed in the. development of any project assisted under..this title, makes the "kickbuck" statute applicable tojill such projc'Ug, and requires monthly reports by all contractors used on the project, to the Secretary of Labor a^ to the nunibrr of persons employed by them, the aggregate amouut of their .pay rolls, the total, man-hours vurkcd, and cxptnditures for materials. Demolition or rcim>\ al work or oif '-improvernent work.paid for by the State, c i t \ , or other public body (other than the local public agency Timlertaking the project) are not included within the scope of this suction due to the obvious difficulties "Jiich would result where the city or other public body is making its local grantin-nid in t'.c form of project work. For example, the city (as a part of its local graiits-in-aid) may install streets in the projvc.t area us part of aguiicral city paving contract \\hich also covui-s street \\oik in areas other than the project area. Or the city may perform demolition or removal \\ork with salaried personnel in its engineering dei>arlmcnt.

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HOUSING ACT OP 1949

SECTION 110. DEFINITIONS '

,' j I I I '

Tins section sets:forth the definitions of the basic terms used in the title. Through these definitions, the section pf6\ id<!S that no project area would qualify1 for Federal aid unless it involves cither a slum area or a deteriorated^ ' Jcterioraiing area which is pfedoniinanfly fesideii^ tial in character, JF any other deteriorated or deteriorating area which is to be developed or redeveloped for'prcdominantly residential uses; or Jand which is predpmirmntly open and which because of obsolete platting, diversity of ownership, deterioration of structures or of silo improvemcntSi or pthenvise substantially impajrs or arrests the sound growth of the community and vhich is to be developed for predominantly rcsident/al uses; or open land necessary for sound community growth which is to be developed for predominantly residential uses. (In the last caso-the project thereon,.as provided in sec. 103 (a), is not eligible for aiiy capital grant.) Through these definitions ajso, the section limits Federal assistance tp-the furtherance of such pur poses as (l)-tlic acquisition of the land in the area requiring devclop, i mcnt or redevelopment; (2) the removal of existing structures and - improvements; (3) the provision of streets, utilities, and other site improvements essential for the new land uses contemplated; and (4)' the making of the Inncl available for development or redevelopment _ at prices; consistent with-its proposed new uses. Aid under this title to assist the construction of any of-the buildings contemplated by the redevelopment plan is expressly barred, except in the case of the temporary loans authorized by section 102 (b) fpj the provision of school or other public buildings or facilities necessary to serve.or support the new uses of land in projects on land which is open or predominantly open.
TITLE ITLOW-KENT PUBLIC HOUSING

Tliis title provides for an extension v the low-rent public-housing program to scr\c urban ami rural nonfarm. families whose incomes are so low that they are not being adequately housed in new or existing private housing. J.'his program will be administered by the Public Housing Administration, a constituent of the Housing! and Home Finance Agency, under the terms of the United States Housing Act of ^037, as amended, including the amendments made by this bill. This titlii contains- provisions to asaiirc complete consistency with the basic objectives of primary icliance uj>on private enterprise to do as much of the total housing job as .possible; increasing emphasis on-local responsibility and initiative; special preferences to. moot the needs of veterans of low income and then families; enlistment of private capital to-financo substantially all of the capital cost of lowrent public-housing projects; and nil adaptation to current needs \v\ih respcot. to the amount, and puriod of Federal annual subsidy to rtohievo low rents. The title ls contains, a miscellany of technical and perfecting amendments to tin- United-Si ales Housing Act of 1937 that the }] years c/f oprjjtios midw i< Jinvo irfiralod lo br : and desirable; -'

444

HOUSING ACT OF 194 P

43

SECTION 201. LOCAL RESPONSIBILITIES AND DETERMINATIONS; TENANCY ONLY BY LOW-INCOME FAMILIES

This section provides that no contract for a preliminary loan for surveys, and planning for low-rent housing projects shall be made with a local public-housing agency unless (1) the governing body of the locality has approved the application for said loan, and (2) the local public-housing agency has satisfied the Public Housing Administration that there is a need for low-rent housing.in that locality which is not being met by private enterprise. It is also made clear that preliminary loans nmue under the lending powers of the PHA are to be repaid out of the development funds of the projects for which .financial assistance contracts arc subsequently entered into. Some losses iii-comiection with preliminary loans may be incurred by the . PHA in.the.ev.ent tliat projects do not proceed, hul these losses should bo infrequent and.of.aJcelativcly minor nature. Before any contract on a project initiated after March 1, 1949, is made for loans (other than'preliminary loans) or for annual coritribu-, tions, the governing body of the locality must have entered jrito an j agreement with the local public housing agency to provide the local ' cooperation and assistance which is rcqiiired-by the PHA pursuant to/ this act. Moreover^ the local public housing agency must have demonstrated to the satisfaction-of the PHA that a gap of at least 20 perccntjias been left between the upper rental limits for admission to Uic proposed .project 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. This section thus establishes as basic national policy that wen with respect to-the segment of housing need which the regular operation^ of private enterprise arc not..now serving, ever}' opportunity is .to be given to it to extend its servicing capacity downward in the income scale. This section also provides that every annual contributions contract for 11 project initiated after March 1, 1949, shal] require Uie local public housing agency to fi.\ subject to approval by the PHA, hiaxfmum income limits for admission und-for continued occupancy in the project. Such limits nuist be revised by the local public ho.using agchcj' if required by PHA bocaijse of changed conditions. Such contract shall also icquiro reports showing that, as indicated by actual investigation, every family admitted to the project had at the time of admission nn incjme nut in excess of the established maximum limit, and that every such family came frj;n an unsafe, insanitary, or ovcrcrpwdcil dwelling, or \\as to be displaced by another low-rent Chousing project or by a public slum-clearance orM-edevelopmcnt project, or was (without fault of its own) cither without housing or was about to bo without housing pursuant to a court order of eviction. For a period of 5 years, however, these icquircincnts as to previous housing conditions do not apply to World War II vetcians or servicemen of low income. In the selectioibof tenants for lew -rent housing, it is also icquiicd tJiat there bo no discrimination against families otheiwise eligible on the

44

HOUSING ACT OF 1940

ground that their incomes arc derived in-whole or in part from public assistance. In .the initial selection oMcnants for a project, prefeieneo .shall be given (subject to the overriding preferences in sec. 202 relating to veterans' preference) to families having the most urgent housing needs; -thereafter in selecting, .tenants due consideration, jhall .be given to the urgency; of housing -needs. After admission, periodic examinations must 'be made of the incomes of all families who arc tenants in the project so that, if their incomes are found to. have increased to the point where they exceed the-applicable income limits for continued occupancy, they will be required to move from the project. SECTION 202. VETERANS' PREFEKBNCK Section 202 extends preferences to families displaced by low-ruil housing projects or public slum-clearance or redevelopment projects. Such preferences are necessary to enable the rehousing of such displaced families and permit such projects to go forward-. Both within tliis.group and all other groups; low-income families of veterans and' servicemen of World War II will be given preference in admission for a 5-ycar period. Definitions of'tlie terms "veteran" and "servicemen" "are provided in this section. Specifically', under this section picfurcncc.is given in all projects to families which arc to be displaced "by- any low-rent housing-project or by any public slum-clearance or re-development project initiated after the date of the approval of the Hollaing A<-t of 1049, or families which were displaced by such a project \\ ithiii 3 years prior to aj)plying for admission. As among such families, there is a first preference to the families of disabled veterans, a second preference to families of deceased- veterans and servicemen whose death was service connected, and a third preference to the families of other veterans and servicemen. A similar veterans' preference is extended as among families who have not been displaced' by a slum-clearance project. All of these preferences, of course, apply only if the family seeking admission is othei \\isc eligible, and if n i!v._Jljng of suitable size and rent is available.
SECTION 203. COST LIMITS

This section is designed to end certain inequities and uncertainties resulting from present cost limits on low-rent housing assisted by the Federal Government, and to compensate for the drastic increase in building costs since the enactment of the United States Housing A.ct in 1937. Experience has indicated that existing provisions, which place a (piling on dwelling-unit costs as well as on room costs, ami which rfrovidcTo'^highe'c cost .Ci'iliaijs for cities ol-niorirtlnin 500.000population, arj' JunuefiuiUcor faulty, in thai (I) a limitation on cost of the entire dwelling u.nil| Immpi-iN tli provjsion of housing for .largcr-si/cd families of low incbino_aud_si) discriminati's apiinsl. siicTi families; and (2^ a dUIVh'iitial in co-si -limits linmd -soljly on tho si/o of the community Is Tit) longer realistic due to the increasing uniformity in construction costs, including both labor and material, irrespective of oily si/.p. '{'In* soptioii. iVrcforo, olimhmli^ )l)p jigiiinfinn on dwelling-unit cost (l)ui'not (lie liinilation on room cost, so that the essential limitation on construction costs is still retained by tho re-

446

" HOUSING ACT OF 1949

45

quirement that contracts shall provide hi all cases for meeting the spccificd_pcr rooih limitation.on constriictiolt cubtsV uiul establishes a uniforfijTcciling, not dependent upon city sizcjToTthe cost of Dwelling constniclion and equipment. In addition, the section simplifies determination of compliance 'with the cost limitations by specifically basing tliese limitations upon the cost of dwelling construction and equipment. This will ordinarily permit firm detcrminatio:. of compliance with the cost limitations embodied in Uie cyiitroct-pursuant to tliis requirement of the act at the time the main construction contract is awarded. In order that ilio drastic increase in building costs may not prevent the provision, of housing needed for famijies of .love income, the section provide^ for a higher cost limitation of 81,750. per room, as coruparpd with existing Jimittitiuiis of $1,000 and 81,2.50 in sni;ill and large cities, .respectively. It :dso authorizes an increase in this cost liniiuaion by not more than S750 per room in areas \ylier.e it would not be fon&ible without such an increase to construct the-project without sacrifice of sound standards of construction, design,.anil li\ ability, and where there is nn.-ftcutc need for such housing. The percentage of increase in the cost limitation as provided in this section is subtaiitially less than the percentage of increase in construction qosts which has actually occurred singe 1937. Because of special cpst problems in Alaska, the. section also has special provisions permitting higher costs in that Territory if found necessary. - - This section also will require that the Public Housing Administration, taking Into account the level of construction costs in the respective localities, shall approve the amount of all main construction Contracts before they are awarded by the local public housing agencies. This is in lieu of a present requirement ns to comparison with the average costs of private construction in the locality. The authorization increasing cost limits is applicable to any Jowr rent project completed after January 1, 1048. This will make the increased cost limitations available in the case of low-rent projects which vcre deferred during the war, on some of which a small amount of construction work was -done before they were deferred. It will also make the increased cost limitations applicable to, and permit the revision j" contracts for, any projects which hayc proceeded (prior to enactment of this bill) under iho provisions of Public Law 301, Eightieth Congress.
SECTION 204. PUIYATE FINANCING

The basic purpose of this section is to amend the financing provir sions of the United States Housing Act of 1937 so ns to make possible thOipermancnt financing of s;rttstt;ntially all of tho-capital cost of low-, rent housing projects by tho sale of bonds to private investors, and thus in effect limit Federal lending assistance for low-rent housing primarily to tho temporary interim financing necessary prior to the issuance of definitive bonds. , Tho sale of bonds for the permanent financing of low-rent projects at low interest rates has been made possible through a pledge of the Federal annual contributions as security for tlio bonds. Subsection (a) relates to this pledge, and makes it possible, iu tho event there is

447

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HOUSING ACT OF 1949

more than one issue or class of bojuls, to pledge appropriate amounts -of annual contributions separately to oath issue or class of bonds; This subsection also makes, it clear tbat local public-housing authorities may obtain loans covering development or acquisition costs without any annual contributions being provided in connection with such loans either in whole or in .part. Pursuant to subsection (b), every annual contribnuono contract (including amending or superseding contracts) may provide that, in the event of jv substantial default by a local public-housing agency in its.cpvenants to the Public Housing Administration, such local agency shall at the option of PITA be obligated to convey title to or deliver possession of the project to PITA (subject to the right of the local publichousing agency to reconveyance, or redelivery upon-a satisfactory curing of the default). Conveyance of title rather than delivery of ..possession \\ould be requhed only when PITA detcrinines that this is necessary to achieve the purposes of the act. After taking title of .possession, PDA \\ould continue to make annual contributions for the ]>roject, but not in excess of the amounts contracted for.pursufiht to statute. This would assure both (1) that, the project will continue to operate as a -low-rent housing project, and (2) that investors who have furnished the-capital funds for it* construction in reliance upo'i the continuance of iU low-rent character and the making of annual coiir tributions therefor during the entire life of the loan, will have their investment adequately protected. With this assurance there is every reason to anticipate that private capital will be willing to furnish practically all of the capital cost through long-term loans and to do so at low interest rales. Subsection (c) revises-die provisions in the act relative to the going" Federal rate (which determines the minimum loan interest rate and the maximum annual contribution rale) so as to provide that the governing rate is the one as of the dale of Presidential.approval of the contract. for Itmii or annual contributions, respectively, rather than the date the contract happens to be signed by PITA and the local public-housing agency. Further, it provides (Tint in the event there aie two or more jales of interest on such date, the rale used shall be the highest thereof, and that in no event shall such rate >bc deemed to be less than 13/2 percent. Subsection (d) reduces the maximum loan period from CO to 40 years In tho case of projects whiclunre initiated after March 1, 1949, am1, which are assisted by Federal annual contributions. It also reduces the minimum interest rule on Federal loans made for projects where the maximum loan and annual contribution period is 40 ralher Ihan GO yeajo, fiom the applicable going Federal rate plus one-half of I percent to simply the going Federal rale. Contracts for projects initiated prior Ui March 1, 1949, may thus be amended to reduce the loan and aiuiunl conlrilulion period to not more than 40 years and thereby make the project eligible for an interest rate at simply the applicable going Federal rate, Tho present power of PITA to make 00-year loans n( an interest rate equal to the going Federal rutu phis one-half of 1 percent is retained for projects initiated after March 1, 1949, provided they are not nssisled by Federal annual contributions. This lending power could, of course, bo made use of only if the projects and tenants were other? wise eligible under and mcol all of the requirements of the United

448

HOUSING ACT OF 1949

47

States Housing Act of 1937, as amended, arid if financial assistance were available from other sources, .inch as State or local governments, in amounts which would enable the local public-housing' agencies to meet their operating costs and debt service on the Federal loan, and at the same Jime achieve rents low i-nou^h to be within the means of families of low incpmc. Siibsectipn (e) limits the pciic>' over which annual contributions may be paid oil projects initiated after March I, 1949, to 40 years as contrasted, with the present authorization of GO years. In order to make Una possible, and thus substantially reduce the total amount of the annual contributions, and also to assure a highly marketable local housing agency ;bond even under ad\erse market conditions, this paragraph would, in respect to projects where the contribution period is limited to 40 years, amend tlie present requirement that the contribution shall not exceed a Mini equal to the going Federal rate plus 1 percent upon the development or acquisition cost of the project so that the limitation would be a Miiu-uqual.lo the going Federal rate plus 2 percent upon such cost. Contracts for projects initiated prior to March 1, 1949, may thus be amended to reduce the annual contribution period to. not -more than 40 vein a and thereby make the project eligible for annual contribution, at the applicable going Federal rate plus 2 percent. Tlie additional annual contributions authorization made by this bill \\ould be available, if needed, in connection with such refinancing of existing projects or the sale to local public-housing agencies of the Public Law 412 and Public Law 671 projects now owned ^by the Federal Government. The shortened period o\cr which annual contributions may be paid will more than compensate for the permitted increases in the amount of annual contributions. In addition to substantially ix.luung tin 1 need for Federal-loan assistance, subsections (f) and (g) also rev iso certain, conditions \\ ith respect Jo Federal subsidy assistance. This is done by providing (i) that, instead of an adjustment in the .maximum amount of annual coii> tributions at o-year intenals, in any year when the receipts derived in connection with the project u.\cml i-xjv.nditims and charges, the excess must be used for purpose* which will ruducu siibsuquriit annual contributions ;.and (2) that contracts fur loan and annual contributions based on a certain "going Federal rate" may, in (he case of a change in such rate, be amended so as to base (ho interest rate on Federal loans, or the maximum-contribution payable, on 'he new rale whenever this woi.!,'. jiromotc economy or be in (lie fjiinncial interest of the Federal Con eminent, provided this does notjmpnir the rights of the holders of an.\ outVimding obligation of. the public housing agency involved for whidi annual contributions have been pledged. Subsection (h) requires that borrow ings by PTIA be from the Treasury. At the same time, the statutory language with respect to PTIA's borrowing authorization is adapted to (he changes in PITA's lending program That would result, from tin provisions of this title, by relating the gross amount authorized to the amount of obligations that may be outstanding ralhui than to the aggregate amount that the PITA may issue exclusive of refunding obligations. The gross amount authorized is increased from $800,000,000 to $1,,">00,000,000 in recognition of tin- size of the extended program and the increased construction costs anticipated. It is expect .1 that with this amendment PJIA's

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HOUSING ACT OF 4949

borrowing power will make it possible to provide all of the capital, funds required frpm the Federal Government in. connection with, the -extension of the-low-rent program. Subsection \i) provides a definition of development cost (which is not defined in the present net) which will include in capital cost all items which would be capitalized under standard business practice, including the cost of capital improvements made at any time during the life of the project. This definition, in accordance with business practice, includes appropriate carrying charges, such as interest, insurance, payments in lieu of taxes, local housing authority overhead, and any initial operating deficit. Carrying charges subsequent to the date of physicn1 completion, however, may not be capitalized. Subsection (j) inakes jt clear that, in line with the usual. jM-acli^ in the past, where n local public-housing agency is undertaking two or. more lo^ -rent public housing projects; they may, in a contract, be treated collectively as-one project;
SECTION 205. ANNUAL CONTRIBUTIONS

Subsection 203 (a) increases the 'ublic Housing Administration's annual contributions authorization in order to provide for an extension of th. program of low-rent public-housing in uibiin and rui<xt nonfarm ureas. It inueai.cs the .total amount of annual contributions authorization available to PJJA on or after July 1, 1949, by $85,0.00,000 a year (iri addition to the existing authori/utioh), \\lifch. authorization would be increased by further amounts of 880,000,000 in each of .the following 3 years, and by S~o,000;006 on July 1, 1953. The new authorization thus totals 8400,000,000 per an'riuni. Iri respect to projects initiated after March 1, 1949, PHA'may authorize the construction of not more than 150;000 additional hew dwelling units after July 1, 1949; which limit would be increased by further amounts of 150jOOQ units on July 1 in each of the years 1950 through and including 1955, respectively, thus making a total of 1,050.000 new dwelling units in 7 years. In respect to projects initiated after March 1, 1949, not more limn 1,050,000 additional new dwelling units may be put under construction without further authorization from the Congress. The President is authorized to accelerate or retard the program, if he finds such action to be in the public interest, after receiving advice from the Council of EcQnomic Advisers as to the general effect of such increase of decrease upon conditions in the building induslryand upon the national economy. Subject to the. total additional annual coiaributions authorization of JHH more I him 8400,000,000 per luiiunn, the amount mndo available at the bcginning-of any fiscal year, may be increased al anyf time or times by additional amounts aggregating not more, than SS .,OOOjOOO per annum. Subject to the total authorization of: 1,050,000 now units, authority to. commence construe nun which is nuuie u\ailable at the beginning v,f any fiscal year may bo increased at any lime or times by additional amounts aggregating not more than 100,000 units, and each of such authorizations may be drcrensed at any lime or times by amounts a(,gro<r.iting not more than 100;000 units. Tho const r.iction authorization to bccomo a\ iiilable at the beginning of 'each fiscal year could thus bo increased to not more than 250,000 units, or be reduced to not loss.

HOUSING ACT OF 1949

49

than 50,000 units, bat the amount of any decrease would remain , available for subsequent authorization by the President at any time , or times so that construction of the full 1,050,006 hew units initiated . after March 1, 1949, could eventually be authorized by him. More- / over, in the evciit that the full amount of annual contributions cpntr,acts-or of construction starts authorized in.roju'ct to the beginning of any fiscal year is not fully used in that year, such authorization would, of course, remain effective for subsequent iisu, subject to the total over-all limitations of S400,000;000 per year and the commencement of construction oh 1,050,000 neAs dwellings. In order to reserve funds for low-rent housing in urban nonfarin areas, it is provided that 10 percent of the annual contributions^authorizations which become available shall be reserved for projects in rural nohfarm areas for a period of 3 years after the authorization, becomes-available. Under subsection 205 (b), contracts for annual contributions on projects initiated after March 1, 1949, shall require exemption .of the projects from all real- and pcrsonalrproperty taxes, biit the contracts may authorize payments in lieu of taxes not in excels of .10 percent of shelter rents. This requirement of lax exemption is'in-licu of existing, provisions in the act as to local contributions. In the event that tax exemption is hot legally available, local contributions may alternatively be made in cash in an amount not less than 20 percent of 'the annual contributions paid by P1IA. Contracts on projects initialed prior to Mnrciu-1, 194Q, may also include similar provisions in respect, to projecvfiscal years for which the annual contributions date is subsequent to Ju'y 1,1949; but if existing contracts on such projects are not so amended, payments in lieu of taxes will be liinitciLsolclj' to the amounts provided under contracts outstanding on Juty 1, 1917. As. lo project fiscal years for which the contributions date falls between July I, 1947, and Inly 1, 1949> pay^ ', ments in lieu of taxes (unless alrcadj made in-larger a;mumts) will be ( authorized in the amount of 5 percent of shelter leal or i:i the amounts specified in the few existing contracts which call for amounts o\er ! J such 5 percent; !
SKCTIOX 206. SPKCIAI. TJlOMSIOXc. KOK LAIUiK FA.MIUKS OF ..o\V INCOMK

Experience has proven that the existing provisions of the United Slntes Housing Act make it difficult to meet the needs of large families of low income. In addition to the provisions in section 203 revising the cobl I'tiiiL-JJons so at. to permit the construction of lai^iT dwelling units, this section revises, the requirements as to eligibility fui mmilics with a -reKiUvdy large number of children. In lieu of the present pixnision Hiich requires that net annual inrohir at the time of admission may not exceed five timuh (lie gross annual rent, or six limes thegross rent for families \\ ith tluve or more minor dependents, this section provides that the o to 1 ratio shall be used for all families, but thai, ill determining family nel annual income for admission an I'Xempl'.on of Si00 shall be given for each member of the family (other than-th. 'head of ;ho family or his spouse) who is less than 21 years of ngc. Under this. nc\v provision, there tvill be a somewhat larger s.pread between the ncomes for eligibility of families with few children and thosu with

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HOUSiNG/ACT OF 1949

a relatively, large number of children, in recognition of the very substantial differences in their respective living expenses. A further difficulty has arisen in the case of families who are eligible to remain in a project on the basis of the income of the regular, principal-worker or workers, but who become ineligible if a child goes to work upon the completion of his schooling. Even though this be a tempo_rary condition which will end as soon as a child marries and establishes his own home, the famdy would nonetheless be required to move from the project.. The present provisions thus tend to force children to leave the home in order to continue the family eligibility. This section, therefore, authorizes a local public-housing agency (in lieu of a $100 exemption) to deduct all or part of the earnings of such a secondary worker from family income in determining eligibility for continued occupancy. This-exclusion will be .only a temporary matter j since it is limited to secondary wage earners whq are under 21 years of iige. Moreover, the income of such children will not be excluded in determining eligibility for admission or in fixing the actual rent to be paidrby the family.
SECTION 207. TECHNICAL AMENDMENTS

Subsection 207 (a) amends the declaration of policy contained in section 1 of tluvnct so as to limit the future low-rent public-housing program of the Public Housing Administration t-j urban.an.1 rural noufjivin areas. It is contemplated that no assistance to farm housing will be provided under the "United Slates Housing Act. Subsection 207 (b) makes it clear that contracts for fim ncial assist^ ance shall be entered into with a State, or a State agency only if such State or State agency is itself to-develop and administer the project. It also defines the term "initiated" when used in reference to the date on whLh a project was .initiated as referring to the dale of the first contract for financial assistance in rcspecl lo Mich project entered into by the Authority and the public-housing agency. Pursuant to this definition, the various rcquijcmenls of the bill appliiahlc to projects initiated after March 1, 1940, will apply, not only to newlv constniclcd' projects on wh'uh contracts for financial assistance an- fii-st entered into after sudi date, but also to any federally owned Public Law 412 and Publi? Law 071 projects on which there are no existing contracts for financial assistance but which may be sold to local .public-housing agencies under a contrail for financial assistance, entered into after March 1, 1940. Subsection (c) pru\idi.-s that, w i t h respect to all projects under title II of Public. La\\ (571, reference therein lo the United ^tntos Housing Act, as -amended, shall include all amendments to said n-t made by the Housing Act of 1949 or by any other law thereafter enactod. Subsection 207 (d.i rcnio\cs the present requirement, for the elimination of substandard dwellings in connection \\ith low-rent projects. This is appropriate since the bill clearly separates the function of extending Federal assistance for the clearan-c of shims from that of extending assistance for low-rent housing. The responsibility for slum .clearanee is now lo be undertaken pursuant to the provisions of title I of the bill. The other siibsi.-ctions of this section provide technical amendments to the United Slates Ilousir Act of 1937, as amended, which are

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required either as a result of the substantive amendments to the net provided in this bill o_r have.-beeu shown to be necessary as a result of experience under the bill. Provision is also made that jriot more tlian 10 percent of the total amount of 8428,000,000 provided for annual cbntributionsj nor more than 10 percent of the amounts provided for grants, shall be expended within, any one State.
SECTION 208. TRANSFER AND OPERATION' OF LABOR TAMPS

This sect ion provides for the-transfcr to the Public HQusing Administration, effective not later than 60 daj-s after adoption of (he Housing Act of 1949, of the farm labor camps now odministcrcd?by the Secretary of Agriculture. These camps wheiuso traiisfcrrcd will be used as low-rent. housing under the terms of .flic United States Housing Act of 11937, as amended. Subject to the income limitations of. section 2 (1)--preference shall be given familics.of migratory farm workers in the occupancy of standard family dwellings. However, the rentincome ratios stipulated in subsection 2 (I) will not be applicable to the occupants of accommodations other than standard family dwellings. Any of such other accommodations may be reserved for rental "to migratory agricultural workers and their families. The Public Housing Administration may continue the, operation of llicse projects under leases or permits and tisc agency funds to pay any deficits incurred in connection with them. Appropriations to reimburse such hinds for such expenditures are authorized. It may also dispose of the projects to local public-housing agencies in, any of the methods provided in the United States Housing. Act of 1937, as amended. Unexpended balances of funds available in connection with such properties will be transferred \\ ith the properties to the Public Housing Administration, to be available until expended in accordance with all of-thc provisions of the United States Housing Arl'of 1937, as amended. The projects tluit would be so transferred comprise approximately 40 such camps with about l,uOO standard dwellings and 9,000 other accommodations.
TITLE IIIHOUSING RESEARCH

The purpose of this title is to assist in progressively reducing housing costs and increasing the production of butter h rising, and in making available necessary data on housing needs, demand, and supply.
SECTION 301

This section autliorix.es the Housing and Jlonie Finance Administrator to undertake and conduct a program with respect to-technical research and studies concerned with the development, demonstration, and promotion of the acceptance and application of new and improved techniques, materials, and methods which will permit progressive reductions in housing costs and stimulate the increased and sustained production of housing, and concerned with housing economics mid other housing market data. It also retains the present provisions of tho Housing Act of 194$ with reference to the improvement and standardisation of building codes ami regulations and methods fur tho more uniform administration thereof, and standardized duncn-

453

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HOUSING ACT'OF 1949

sions and methods for the assembly of home-building materials and' equipment. This section also permits the Administrator to enter into researchcontracts i jr work to continue for 4 years and provides that funds so obligated may remain .upon the books of the Treasury for ah additional fiscal year. (Under present authority, contracts-must be performed and payments made within 2 years after tlie fiscal year, in which undertaken;) This includes contracts, for developmental research. The Housing and Home Finance Agency has no laboratory of its own and must utilize other Government agencies and contract wjth eligible agencies of State and local governments, educational institutions, and other nonprofit organizations ^.laboratory research; however, such laboratories are frequently i-cluctant to tie up their facilities in short-term projects offering ho assurance of completion. Many research problems are complex and require for their solution a scries of time-consuming successive steps. This-provision is therefor^ necessary in order that a research program can he undertaken with some -assurance that the projects initiated will he carried to a conclusion. .The next to the last sentence of the section is merely de^ claratory of the general principle that research conducted-with-public funds should redound to the benefit of the general public. The section also provides that the results of such-technical resoan-V and studies shall be.disseminated in such form as shall be.most useful to industry and to the general public. It also exempts the dissemination of the results of such technical research- and studios from the existing provisions of law prohibiting.-any agency from distributing through the mail, free of postage^ reports and other documents unless a request therefor has boon previously received by such agency. The section further luiilcihp'Iatcs inventories to bo made by the Administrator, as accessary, of urban and rural nonfarm housing needs and the progress being made in meeting those needs, and authorizes the Administrator to encourage and assist localities to make studies, surveys, and plans with respect to their ow.n housing needs and markets. When Federal agencies conduct studios or surveys for local bodies, such agencies would be authorized to accept payment for the work done by them for credit to the agency appropriation funds
SKCTIOX 302

This section stresses the intention that the Housing and Home Finance Administrator shall work in close collaboration <vilh industry and labor and with other Federal and local governmental agencies, educational institutions, and other Appropriate agencies in carrying out the research program. The section further provides that tho Administrator shall consult with, and make rccomincndai^ns to, the other appropriate Federal agencies with respect to such-action as may be necessary and desirable to overcome existing gaps and deficiencies in available housing data and the facilities available for tho collection of such data.
SECTION 303

This sectiuii authorizes appropriations to carry out the purposes of the title.

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53

SECTION 304

This section,provides for the appointment of a Director to administer the provisions of this title under the direction and supervision of the Administrator. It also provides the basic rate of compensation of such position shall be the* same as the basic rate of compensation established for the head? of the constituent agencies of the Housing and"ltomc Finance Agency.
TITLE IV FAttM HOUSING

The provisions of this title recognize the complex nature of the housing problem on farms and the interrelation of tliat problem with other problems affecting the farm economy. The devices heretofore ^employed and now proposed for Federal assistance \\ ith respect to nonfarm housing are inadequate ;and cannot be adapted to give the same measure of assistance to families living on farms, because the special and different problems attaching to farm housing and other farm buildings require special provisions for such housing. This title recognizes the intimate relationship between farm, housing and the entire farm, economy and so places the responsibility for aids to provide adequate housing and farm buildings oil farnis upon the Department.of Agriculture. The title .therefore authorizes the Secretary of Agriculture to extend, through the Fanners Home Administration, three tyj)cs of financial assistance to owners of farms to enable them to const met or repair dwellings and other buildings on their farms to provide them, their tenants, 'lessees, share croppers, and laborer* with decent, safe, and sanitary living conditions and adequate farm buildings: 1. Loans up to 33 years at not to exceed 4 percent interest. The loans would not require a first mortgage on. (hi: form property and could lie secured by the farmer's equity in the farm. 2. Similar loans, supplemented by annual contributions applied tu> a partial credit on interest and' principal payments, to (hi owners of farms which are not presently self-sustaining but which, 'hrough a satisfactory program of enlargement, imprp\ micnt, ui adjusted farm practices, can be made self-sustaining within a period of not to exceed 10 years. The annual contributions could not be made available to a farm owner after the farm is made self-sustaining or, in an}' event, forunorc than 10 years. 3. Loans and grants for minor improvements and minimum repairs to farm dwellings and other farm building on farms which, in the opinion of the Secretary of Agriculture, cannot bo made self-sustaining. The amount available in such cases would be limite limited lo T.A/UU for any one farm or dwelling or building owned by one individual, and not in excess of S2,00u in the aggregate to any one individual, and the grant portion with respect to any one dwelling or building cuiilil not exceed $0007 Loans are to be refinanced through cooperative or other responsible private credit sources whenever -feasible.

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HOUSING ACT OF

1949

SECTION 401. FINANCIAL ASSISTANCE BV THE SECRETARY OF AGRICULTURE

iii order .to be eligible for assistance under the title, the applicant must show (1) that lie is the owner of a farm which is without'a decent, safe, and sanitary dwelling for himself and his family and necessary resident farm labo jr for the family of the operating tenant, lessee, or sharc.cropper, or without other farm buildings adequate for the type of farming in which he engages or desires to.engage; (2) that he is without sufficient resources to provide the ncccs->ary housing and buildings oh his own account; and.(3) that he is.unabje to securelhe credit necessary for such housing and buildings from oilier sources upon terms and conditions which lie could reasonably be expected'to fulfill. For the purposes of this title, a "farm" shall mean a parcel or parcels of land operated as a single unit which is csc'd for the production-of one or more agricultural commodities and wii>h customarily produces or is capable of producing such.commoditics for sale and for home use of a gross annual value of not lesjs tlinh the equivalent of a gross annual -value of SlOO in 1944, as determined by the Secretary. The Secretary is required to deteimine promptly whether any parcel or parcels of land constitute a fiirm for the purposes of this title whenever requested to do so by any interested Pcdefal, State,.or local public agency, and his determination is final and conclusive.
SECTION 402. LOANS FOR HO.USING AND FARMS BUILDINGS ON ADEQUATE

This section authorizes the Secretary to make loans, repayable in 33 years at 4-pcrcent interest, to eligible applicants having the ability to repay in full the sum to be loaned, giving due consideration to the income and earning capacity of the applicant and his family from farm and other sources, and the maintenance of a reasonable standard of living for the owner and occupants of the farm. Such loans, .tvuiild be secured by the applicant's equity in the farm and such additional collateral as the Secretary may determine to be necessary to assure repayment of the indebtedness. All loans would be made upon condition that they be refinanced thiuugh cooperative or other responsible .private-credit sources whenever it appears that the boi nvcr will be able to do so upon reasonable terms and conditions.
SECTION -103. LOANS FOR DWELLINGS ON POTENTIALLY ADEOT'ATE FARMS

This section provides for the assistance needed for those farmers whoso present income; is such that some assistance over and above the long-term, low-interest credit provided in section 402 is necossar}' in ordor to put-them into a position to acquire and maintain.acceptable housing niul related facilities, but whoso farm enterprise is capable of boiiig redeveloped by improvement or enlargement of the farm, or by adjustment of farm practices or methods, so as to bring, them within treasonable period of time \\ithin the group of farmers in need only of liberal credit aids. With respect to a farm owned by an applicant whose income docs not appear to be sufficient to inake the annual repayments of principal

- HOUSING ACT OF 1949

55

and interest within the maximum period of the loan, the Secretary would be authorized undci this section to make the Joan, on tlie same terms.and conditions as'loans made under section 402, if the income of the applicant can be sufficiently increased, withhva. period of not more than 10 years, by the improvement and enlargement of the farm or adjustment of farming practices or methods and thi- applicant hus_ adopted or will adopt a plan-to so increase his income. In connection with such loans; the Secretary will also IK nutlxirizcd to.--agree to make annual contributions, within a 10-year pcriud, in the fdrhi of credits on the borrower's indebtedness in ah amount not to exceed the annual installment of interest and 50 percent of -the annual principal payments in any year and not to exceed such amount as the borrower's^ income for the year falls short of the income heeded to make scheduled payments. This agrccmcntj -with respect to credits, will accrue only to-tlic benefit of the borrower or to such other 'eligible persons us the Secretary may determine.
SECTION* 404. ;OTHER LOANS AND GRANTS FOR MIN'OR IMPROVEMENTS TO FARM HOUSING AND BUHjDINGS

This section aiithorizes'the Secretary to extend financiabassistance to the owner of it farm for which there is no reasonable prospect of development.into a.farm capable of supporting adequate housing anu farm buildings AVith respect to such a farm, and eligible applicant could secure from the Secretary a grant or combination of loan-ami grant to cover the cost of improvements or additions, such as roof repairs, toilet facilities, convenient and sanitary water supplies, screens, structural supports and similar improvements, when such improvements arc ncccssaiy to make the dwellings i.nd buildings safe and sanitar3' and remove hazards to the health of the occupant, his family or the community,. The maximum grant with respect to any one dwelling or building would be S500. A combination loan ami grant is limited to 1,000 with respect to any one farm, dwelling, or building, and to a mnximu.n of $2,000 financial assistance under this section to any one individual.
SECTION' 405. MORATORIUM ON PAYMENTS UNDER LOANS

This section authon/cs the Sccrcinry to grant a moratorium upon the payment of principal and interest on any loan on which, due, to circumstances beyond the bonder's control, the be rrowur is unable to continue to make scheduled paymen.s without unduly impairing his standard of living. In extreme hardship cases, interest might lae canceled during (he moratorium, and, shoul.l foreclosure Mibscq.iently he necessary, no deficiencS1 judgment \\ould be taken against such a . >rro\vor if ho hnd faithfully tried to meet his obligations.
SECTION 406. TECHNICAL SERVICKb AND RESEARCH

This section provides that all new buildings contructcd, or repairs made with (innncinl assistnnce under this title ahnll be substantially constructed in accordance..with such plans and specifications as may bo required by the Scu clary.. This section also authori/.es the supervision and inspection of construction to the extent which may be

157

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HOUSING ACT OF 1049

found necessary for accomplishing the purposes of this title and for the preservation of the Government's security interest; The extent of the requirements for building plans, supervision, mid'inspection wpujd-dcpcnd upon the character of the construction and the amount of tlralpah, The Secretary would also be authorized .under this section to fur-, hish, without charge or at such charges, as he may determine, to any person, including any person eligible for financial nssirtahcc under this title, building plans, specifications, construction supervision, .advice and information, and similar technical services regarding faun -dwellings-ami other Luildings. In order to-a-sui-e that such servfccs are rendered consistent with the primary purpose of the bill, specific authorization for research and technical studies is contained in tin's section. It is contemplated that the research studies will include economic,, technical, and research to provide an adequate basis for extending financial assistance and for the preparajion of estimates -and reports ph national farm housing needs and the progress being madc-toward meeting such needs winch the Secretary \voii]d be required to submit under this .section. Through the provisions-.of . this section it is:i :belic\ I'd that funds made available to eligible borrowers will .go f r -in. demonstrating and effectuating economics in farm-building construction which are so. necessaiy on most of the farms of the Nation if they are to be improved with adequate buildings.
SECTION 4 0 7 . PREFERENCE FOR VETERANS

This section requires that [he Secretary of Agriculture give preference to \ctcrans and families of deceased servicemen as between eligible-applicants for assistance under.this title.
SECTION* 40K. LOCAL COMMITTEES TO ASSIST SECRETARY

This section permits the use of committees of local farmers in examining the applications for assistance under this title and the making of recommendations to the Secretary with respect to the applicant's eligibility,.liU likelihood of success, his character, ability, mid experience, and whether the farm with respect to which the application-is made is of such character-that the making of the loan will:-.carry out the purposes of this title. The local committees will also <:c lily their opinions as to the reasonable values of the farms, for security purposes. Committees of farmers appointed under this section or pursuant to existing law, principal!} tho&< appointed under the BankUcad-Jonos Farm Tenant Act, will be utilized.
SECTION 409, GENERAL POWERS OP SECRETARY

Tlus section gives the Secretary the power to dcu-rmine and prescribo standards of adequate farm housing and othejr farm buildings for individual fiv ms and for localities. In prescribinsr Mich standards, i\o will take into consideration such tilings as tlu- typo of housing which will pnnido Jccunt, safe, and sanitaiy dwellings for the family of the occupant, tht tyj)c ami character of the fanning operations 'contemplated and the -.ixe and corning capacity of the land. This section also autlvorix.es the Secretary to ivquiro nn applicant to agree that tho improvements, constructed with assistance muter

458

HOUSING ACT OF 1.04.9

57-

this title, shall not bed justification for tmwan anted changes in the lease or occupancy agreements between the appliesnt-and-thc occupant of such farins without the Secretary's approval. This provision -lias i for its purpose assurance that the-benefits of this title vjll-be extended to the tcnants-on the applicant's farm-without the dangor of^chafging . such tenants for benefits which inure 'to the landowner.
.SECTION 410. ADMINISTRATIVE PROVfsiOXS '. ^

Tins section enumerateso-rtai n powcrs.to be vcstedin. the Seen tary which arc necessary in the administration of a program of this iype. Of most importance among .these is (lie authority to compromise' _ .claims and...obligations arising tinder ttiis title in- the manner which Jias been successfully undertaken in. connection with loans made uiiden.the Ba.nkhcad-Joncsi;'arm'Tiuant. Act. One of the most'effective devices in (lie servicing t)f loans is the power whij.-h_would be granted the Secretary to release borrowers from personal liability withbuLruganUto their debt-paying ability in coimeclion with the transfer of thcjr farms to the Secretary or to-other approved applicants who assume all of a pqrtion-of the outstanding indebtedness-to the o ?relary. The provisions of'the JGeneral Holit-Scttlcmci,. Actapplicable to programs administered by thcl5ci reiary ol AgntlilturT (.oySl.ut: S.ib)"~ are alsomade applicalilt to'claiins-undefthis ti.tle. This ="ftion also includes such servicing authority ao collection of clajms and pursuing them to finaljudgment, if iicccssar1 . in an}' court of competent jurisdiction, with the assistance of the At-lornej' General and tho Uixited States attorneys; Uie bidding for and the. purchasing, at foh-flosure sale or otherwise,, of property securing obligations under (hi* title; and: the lease, operation.aiul sale of such security properly on tr>rms and conditions-determined by tho Secretary to be reason able I nder .this provision, security ]>roperl3' acquired in liquidation of obligations can be disposed of in furtherance of (he-principal objectives oFUio act.
SECTION* '111. LOAN FU.\I>S

This section authorizes.the financing of loans to farm o\snei-? by means of funds mnde available to the Secretary of Agriculture I y the Secretary of .the 'Treasury on such terms aiid conditions as 'nay bo ])rescribed by the Secretary of Agriculture with the approval of (he Secretary of the Treasuiy. The Sccretaiy of the Treasury would use the proceeds of the sides of securities under the Second Liberty Bond Act to secure funds advanced to the Secretary of Agriculture. Such ad\nncc wojld l>e repaid prinurrijy from llic repayments of principal ami interest on obligations of individual borrowers. Under this section, -the contemplated loan program begins with 825,000,000 to bo available 6n and after July 1, 1049, and such additional sums as maybe-determined by the Congress from time tr> time to be made available on and after July 1, 1950, July 1, 1951, nud July 1, 1952. These sums will not exceed 850,000,000, 875,000,000, and 8100,000,000, respectively.
SUCTION .112. CONTKIIIUTIONS

This section limits the agreements of the Sj'crelary w i t h borrowers under the authority of section 403 on potentially adequate farm.* so

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HOUSING ACT OF 1940

that the aggregate contributions or credits under 'those agreements made oh and after July 1,1949, will not exceed S50p,600.pcr annum for not to exceed 10 years, andTimits additional commitments pursuant to the same section made on and after July 1 of the years 1950,1951, and 1952, to those calling for additional annual credits of not more than $liOOO;OOOj $l>o66;dOO,.ftnd$2>000,OQO-rcspcctivcly. " _ "
_ . SECTION 413." AUTHORIZATION FOR APPROPRIATIONS

This section authorizes appropriations to supplement receipts from borrower? so that the Secretary of Agriculture may fully repay the Secretary of the Treasury the amounts advanced ami-interest"thereon when due. It also, authorizes an initial appropriation of Sl-,000,000 for temporary repair grants under section 404, to bi> made on and after July 1,1949, and additional appropriations for this purpose to be made available on and after each of the years 1950, 1951, and 1952, in the amounts of $2,500,000, $4iOOO,OOOi and $5,000,000, respectively. Authorization is provided finally for sums to be appropriated for the research aiid technical services! and for general administration of this.tillc of the bill. TITLE VMISCELLANEOUS PROVISIONS
SECTION 501. ADVISORY COMMiTTEES ,..._

This section authorizes the Housing and Home Finance Adminktrator to-appoint such advisory committees as may be necessary in carrying oiit his functions, powers and; duties :uader this or any other net. " ..'. -'This section also provides that service as a member of any suck mhisory committee shall not constitute any form of service or em-, plovmcnt witliin the provisions of title IS, United States Code, section1 281, 2S;{, or 284. Title 18, United States Code, section 283, prohibits ah officer or employee of the United States from acting a* agent or attorney for prosecuting any claim against the United States or aiding or assisting in-the prosecution or support of any such claim or receiving any ginluity or any share of or interest in any such-claim, a.ul provides a fine of not more than $10,000, or not more than 1 year's imprisonment, or both. . Tilli' 18, United States Code, section 281, prohibits au ofT.cer or employee of the United States directly or indirectly from receiving or agreeing to recui\e any citiui.ciisationi for any services rendered or to be rendered in relation to am; proceeding, contract, clahr, controversy, charge, accusation, nrrcot or other matter in which the United Stales is a.part.v or directly or indirectly interested "-before any agency, court or commission, -and' provides a fine of not inqro than $10,000 or not more -than 2. years' imprisonment, or both. Title 18, United States Code, section 284, prohibits any .-person within 2 yi-ars after employmeiu in niiy ag.'iicy of th.'.Uhil >.l Stales, from ])r,osecuting or acting as counsel, attorney, or ngenf lor prosecuting, any claiinsj ni;ainst tho Unit ed States involving any matter directly connected \v ith -A hick such person \\ ns so employed or performed duty. Jt provides-n fine of not-more than $10,000 or imprisonment, for not more than 1 yenr, or both.

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59

This section -follows title IIJ, section 303 (b), Public Law 253, Eightieth Copgressthe jvalional Security .Act of 1947except that., .this..section-of the bill provides n complete exception from title 18, . .United States Code, section 284, whereas the National Security Act .provision-.grants exception from such .provision unless the act of such individual-is made unlawful when'performed-by such individual, -with respect to any particular.matter which directly involves the depart^ mentor agency which such person is advising or jn which.such department or agency is direct!}' interested. The pi o visions of this section of the bill necessarily must be broader so .as to not bring a member of the advisory committee who is doing business with the Federal Housing Administration within the prohibition of that section.
SECTION 502. AMENDMENTS OP NATIONAL BANKING ACT

. 15y reason of the provisions of the new section 22 of the United States Hmising Act of lQ37,'as amended (whichnow section is added by sec. 204 (b) of the. bill), special-security features would attach to .definitive bonds issued by'local public-housing agencies in connection' with the low-rent public-housing program. Special security features would also attach to short-term notes issued by local public agencies in connection with slum-clearance projects, and by public-housing agencies in cqniicclion with low-rent housing projecjs, when secured by a pledge of rights of any such agency under its loan contract with the Government. _ . In recognition of these security features, section 502 (aj provides for an amendment of the National Banking Act sp. thai national banks, and (to the extent permitted by State laws) State member banks of the Federal Reserve System, would be authorised to purr chase larger amounts, and, to underwrite;local public^housing agency definitive bonds and, when adequately secured, short-term notes (which obligations shall have a maturity of not moiv than 18 months) issued by local public agencies in connection with shiinrclcarancc projects or by public-housing agencies in connection with low-rent public-housing projects. Without this amendment, investment in such obligations by thooc-bank& would continue to be subject to the sninc restrictions as arc applicable to local public-housing agency definitive bonds, \\hich are now issued without-these special security features. In other words, the}' could be purchased for the banks' own. account only to the extent of 10 percent of unimpaired capital and surplus. Section 502 (b) is a technical amendment which should be made in conjunction with the amendment of the National Banking Act pro? vided for in section 502 (a). The amendment to paragraph seventh of section 5136 of the Revised Statutes, made by subsection 502 (a), relates to short-term obligations only when they are classified as "investment securities." JIowev<_'i:, there could arise some question as to whether some issues of these short-term notes would be investment securities or would rather partake of the nature of a loan. Therefore, it. is necessary to also amend section 5200 of the Revised Statutes which prescribes the same limitations for the purchase of loans ns arc prescribed by section 5136 for (he purchase of investment securities.

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HOUSING ACT OF 1949

SECTION 503. NATIONAL HOUSING COUNCIL

This section provides that the Secretary of Labor or his dcsignco, and the Federal Security Administrator or his designce, shall be included in the membership- of the National Housing Council in the Housing and Home Finance Agency.
SECTION 504. AMENDMENTS OF THE GOVERNMENT APPROPRIATION ACl, J948, AND THE GOVERNMENT .-APPROPRIATION ACT, 1949 COl: "ORATIONS CORl'oRATIONS

. The 'Government Corporations Appropriation Acts for 194S and for 1949 included provisos to the effect that no payments f annual contributions should be made which were occasioned by payments in lieu of taxes in excess of-amounts originally contracted for. This restriction had the efl'cct of prohibiting payments iti lieu of taxes equal to 10 piTi-e-ut of shelter rents, as had beciLpreviously authorized 'bJVlIIA, arid as will be authorised hi the future under subsection 205 (b) of this bi'l. These provisos of the t\\o appropriation-acts are therefore repealed as of the beginning of the fiscal years for which they apply, thus A ululating any payments already made with the approval of PHA and in other cases permitting payments in lieu of taxes on the restricted basis (generally 5 percent of shelter rents) authorised for these 2 years in subsection 205 (b). The Government Corporations Appropriation Act for 1949 also limit* the number of employees of the Public Housing Administration above grades CAF-10 and P-3 to not exceeding 20 percent of the to.tal number of administrative employees. Under the expanded program of low-rent public housing a relative!}- greater number of trained technical employees will lie rcquhed than were necessary under the former operations of the rp'.-iu-y when low-rent, public housing represented only a small poidon of its total responsibilities. This suction also repeals tliis 20-pcrccnt.limitation in order to permit the recruitment of the (mined personnel which \\ill be necessary to put the new program into operation.
SEC1ION 505. DEPUTY HOUSING AND HOME-FINANCE ADMINISTRATOR

This section provides for tin- appointment and compensation of a Deputy Housing and Home Finance Administrator who would act as Administrator during the absence or disability of the Administrator or in the event of a vacancy iu that office, and who shall perform such other duties as the Administrator shall direct.
SECT, ' 50G. CONVEKSION OK STATE 1-OW-RENT OR VETERANS' HOUSING PROJECTS

This section permits SCatcrakled low-rent housing or veterans' housing to \>c riitiAH'-i'iyil, uiuier siHHJfiod conditions, to low rent housing assisted under the United States 1 fousing Aft of 1937. The conditions to such conversion aio () a contract for State financial assistance for such project was entered into on or after January I, 1948, and prior to January 1, 1950, (b) the project, is oilcan become eligible-for assistimce by tl'io Public Housing Administration in the form of loans and annual contributions under the provisions of the United Stales

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HOUSING-ACT OP 1949

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Housing Act of 193t, ns amended, and (c) the .public-housing-agency operating the .project in the. State makes application to the Public Housing Administration for Federal assistance for the project under the.--terms of the United States Housing Act of 1037, as amended. Its inclusion.ii! this bill makes necessary thed'epeal of a- =>iinilar<yro vision contained in section o03 of the Housing Act of 194S wliich applied only to projects -\\hcre-a State contract -was made .prior to January 1, 1949. SECTION" 507. CKNSUS OF HOUSING

. 3

This section provides a permanent authorization for the Director of the Census, in the year 1950 and decennially thereafter, to take a lionsiug census (similar to that first taken in 1940; A Inch-included information about the number, characteristics, quality, values, rentals, geographic distribution, etc.) in conjunction with and as a part of the population inquiry of the decennial census. SECTION* sbs. NATIONAL CAPITAL HOUSING VUTHOUITY This section-would restore to the National Capital Housing Authority the .power to acquire site" for lo\\.-j-ent public housing projects assisted under the United Stales Housing Act of 1037, as amended, including the amendments contained in title II of the .bill. Without this amendment, the District of Columbia would not be able to obtain the benefits piuvided by title It of the bill. -.
SUCTION 509. DISTRICT OF COMJMHIA PARTICIPATION"

This section makes available to the District of Columbia the benefits proMdcd under titles I and H of the bill. It authorizes the participation of the District of Columbia .Redevelopment Land Agency, the National Capital Housing Authority, and other appropriate agencies operating in the District of Columbia to recehc the benefits of titles 1 ami II of IT. R. 4009 on the same basis an-,1 to-the ^aiiio cxlonl that the State*, Territories, and other municipalities would he authorized to paiticipate. Under the.provisions of this .section of the bill, (ho District, of Columbia Redevelopment Act of 1915 is continued in full forco and c/l'cct. lTowo\cr, it provides an alternative mot hod of financing slum clemanco and redevelopment operations in the District of Columbia Rcdou'lupment Lund Agency by vesting in that Agency (subject to the approval of tlio Commissioner- of. the District of Columbia) die power to accept financial assistance which would be authorized under title I of 11. R. 4009. The section niithurix.es the allowance of credits for local gnuiK-iii-nid in connection w i t h projects undui taken \ \ i t h i n (he District >ji Columbia, under title I of U. R. 400'J, to the same extent ns local grnnts-inaid are approvable for other cities and Stales, ft also provides that, in thoeuuit such local gninU-in-nid arc not suflicient to meet (lie local grajiU-in-aid rcc|uiieinenl,s, the Housing and Iloniu .Finance Administrator may rely upon agreements entered into betwcon t lie District Commissioners and the District of Columbia Rcduxulonnumt Land .\goncy tomake casli payments of such duficicncics from the funds of the District of Columbia and to nuthori/.o approprintioiis to the District Commissioners for such purpose, whore necessary.

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HOUSING ACT OF 1949

With rcsper* fo any project uhdeilukoii with financial assistance under title 1 ul If. 'R. 4009, it al&u-makessections3:(f), 3-(k), and'T'Q*), and the last sentence of section 0 (b) (2) of the District of Columbia Redevelopment Act of 1945 inapplicable to any real property, which, in accordance with tho redevelopment plan adopted by the Planning Commission ami approved by the District Commissioners, is to be devo.tcd to public housing undertaken under Public JLaw 30.7, Seventythird Congress, approved Jane 12, 1934 (the District of. Columbia Alley Dwelling Act, as amended). The National Caj,,.al Housing -Authority would be entitled to acquire by deed those pieces of real - property within a .redevelopment project .area \\liicli, hi accordance with the-api.roveil project area redc\ clopment plan, arelo'lie devoted to public housing u>. be undertaken under Public Luw 307, Sc\enfythii;d Congress, a proved June 12, 1931, as amended, and in accordance with the requirements of section 107 of II. 11. 4009 the National Capital Housing" Authority would be obligated to pay for such rtial estate out of funds mode available for such acquisition.
TSECTION 510. ACT COXTIlOIjLING '

This section contains the standar' provision providing that the . provisions of this not shall control la the case of inconsistency with other legislation.
~" "~_ SECTION 511. SKl'AKAHIUTY

This is '.be usual separability clause. XII. CHANGES IN EXISTING LAW In compVimce with paragraph 2a of rule XIII of the Rules of tho Ilousr of Keprescntativcs, changes in existing law made by the bill, as introduced, are shown as follows (existing law -proposed to be omitted is enclosed in black brackets, new matin is printed in italics, existing law in which no change is proposed is shown in romanV:
~>

T'SMTKD STATES HOUSING ACT OK 1937, AS AMENI>KI> DHCI.A RATION OF 1'OI.ICV iJKUTio.N 1. It is heroin di.-clared ID be tho -policy of tlic United St.ntc.-, to-promotc 'lit. gtnoral \\olfaro of Uic Xutuin In uinplosini; iUs fiiinKniKl nrn.lit, n-, provide I in this Act., to ait (lie several Suite-) an.! their political subdivisions to fillcviatu present :iml recurrini; inn iiipluv ineia nnd In roincd\ tlie ui^.ifc fin I insanitary luiii-ing coiulil iuii s and tlio ucntu .--liort.im: of ducunt, n<\fo, and an!tarv dwolliiigs f(ir_fninilies of low iuooinr. in [rural or urban ojmnumiUes] iti /an.nmf rural milfarm-areas, that an, injurious tu tho health, .safety, am! moral.-, of the eit.i/.eiii of tho Nation.
DKPINITIONS

SEC. 2. Whon used in Mn Act (1) The term 'lou-rcnl housing" means jlnionl, safe, and .sanitary dwellings within tlie financial reach uf families of lu\\ income, nnd duvclopud an 1 ad'niiii.steretl io proniule ,-or\ ioeabi'it\, elTioiencv, econDini, ftii I ,itn!.i.it i, atr.l oiubr.tcc.s all iioco.^ar.\ appnrtoiiaiice.s thereto, [Tho (hvollini;? in low-rout hoiisini; as dofincd in this Ad .shall be a\ ailablu wilclj for fainiliu-^uhosj not incjinj at tho time of admission do(!.s nut exceed fue times tho rental (includinyc the valito or cost to them of heat, li|!hl, water, nnd cooking fuel; of tlie dwxlluigs to be furnished such families, except that in i.he COM; of fam.'ie.s with threu or mori. minor dependent.-}, Such rat hi .shall not exceed six to ono.] Tlie ihui.Jlinga in low-rc.nl housing as defined in this .\(.l shtll'!ic avtiilalilc solely for families whose net annual iiujmc <il the

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.63

time, oj admission, less an 'exemption .>f- $100 for each minor miembtr 6} the family other than thc-head of the family and-hi. spouse, does not cffeed fiee'tiines the annual rental-(iiicliiding the value or cost to thei.' of icatcr. drctriril'i, gas, other heating and making fuels, and other utilities) of the d.-cllings to bc-furnished such families. For - the sole purpose.of determining eligibility , 'or continued occupancy, a public hou,*'ng agency nji/ allow, from the -ncl income of rni/'/tuniYj/. an eremption far-each minor member of thc.family (other than tht-hea'd'uj 'the 'family and his spouse) of cither (a). 5/00, or (6) all or. any pqrtoftht, annual income of such minor. For the purposes of 'this .subsection, a minor shall mean a person less lhan.21 years of age. (2) Tlic term "families- of low . income" means families who arc in the Iowcst= income group and who cannot afford .to pay, enough' to cause private enterprise in their locality or metropolitan area to buihl an adequate supply of decent, safe, and sanitary-dwellings for their use. . " . (3) The term "slum" moans anwar.ca where dwcllings-.prcdoininatc which, by reason of dilapidation, ON ercruivding, faulty arrangement. or. design, lack of ventilation, light, or sanitation facilities or anv combination of these factors, are detrimental -to safety, health, or ir.orals. ' " . (4) The term ' slum clearance" means the demolition and removal of buildings from any slum area. (5) The. term ''development" means any or all undertakings n.eci -sarv. for planning, [financing (inchming payment of "carrying charges),! lain! ac< 'nation, demolition, construction, or .equipment, in connection with a low-rent housing ;[pr slum-clearance] project[, but not bi..\und-ihc point of physical completion.]' The term "development cost" shall comprise the costs incur; / '><j a pv'^ii. housing. agency in such undertakings and : Ihcir necessary financing (including the payment of carrying charges, but-not beyond the poinlof physical completion), ai"l tn nlhcncisc tarrying out the devcippniint of such project. Constructior .acti\ity in cpnncctidii itli a low-roiit-housing project ma\ be coiifined.tu the ret ^instruction, remodeling, or repair- of existing buildings. (G) The term ''administration ^ means an\ or all undertakings necessary for management, operation, maintenance, or. financing, in connection \\ith a lowrciit-huiiMiig ur-nluiii-clearancc project, siiljsecinent to ph\sical completion. (7) The term "Federal project" meant, anv i>rojcct owned or-administcred by the Authority. ._ (S) The term "nicjuisitiuii eo-.t" mean., the amount prudently required to be expended uy a public-housing .igency in tciiuiring a low -rent -housing or slumdearnnce project. ' (9j The term "noiuhvelling facilities" .shall include sito devi! pincnts, improvements, and facilities located u.it^iilc buiUling walls (including .it reels, sidewalks, . a'nd-saniiary, utility, aiui-ui'ier facilities). (10) The term "going Federal rate [of interest]" means -[at any time] the annual-rate of interest (or, if there shall be two_ or more such rales of interest, the highest thereof} specified in the [then] most recently issued bond; of the Federal Government having a maturiiy of tun jvars or more, determined, in the case of loans 01 iinnual contribulionn, rcs;ico/i>c/y, nf //if dale oj Presidential approval of the contract /mrsxtiut to whu.li such loan* or contributions arc made: Provided, That for thc-piirposcs of this Act, thi. going Federal rate shall be deemed to be not less than 2% -per centum. (1 1) The term "public housing agency" means auv State, county, municipality, or other governmental entity or public bod.v ie.\cluding the Authority), winch is authorised to engage in the development or administration of low-rent housing or shun clearance. The Authority shall enter inin contracts for financial assistance with a State or State agency where suck Stalt, or State agency makes application for snch assistance for an eligible project which, under the applicable laws of th* Stale, is to lit. developed and administered, by such Stale or Stale agency. (12) The term "State" includes the States of (he 'Union, the District of Columbia, and the Territories, dependencies,, and possessions of the United' (lu) The term "Authority" means the United States Housing Authority created by section 3 of this Act. (M) The term "tcttrun" shall mean a-pcrson w'Ao has served in the actirc military or narnl service, of the United Slalis at any lime on or after September 1(1, 19S,0, and prior to July 30, 10^7, flwrf who shall have-been discharged or re.lcastd thcrefrorii under conditions other than dishonorable. The. term "serviceman" shall mean a person in the active military or naval service of the I'nitcd Slat.s who has served therein on or after September 10, 10/,0. and prior lo July 2fl, W/,7.

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HOUSING ACT OF 1949

_,(15) The 'term "initiated" whenitsed-in reference to thc-datc on which, a^projecl uas initialed refers to the date'of'thejirst contract for financial assistance in.respect to such^projccl entered into by the Authority find-the "public housing agency.
UNITED STVTKS HOUSIXO AUTHORITY

^SE.C. 3. (a) There .is hereby created in the Department of the Interior and under the general supervision of the Sce^tary thereof a body oorpi-rate_ of pcr.pctiia] duratiohjo-be known as the United-States Housing Authority, ;\vhich ahall bean asency and:instrumentality of'the Uiiitcd'Statte!. (b) The .powers of the Authority shall-'be vented iii and exercised by an A\lininistrator, who shall be appointed b\ the -President, by and with the advice and consent ofjhc Senate. 1 lie Administrator shall serve for a term of five years and shall be removable by tlie President upon notice an'dhearing fornegicct of duty or nialfeasaiice.but-for ho-pthcr cause. (c) TJic Admin.iairator shall receive a salarv of 510,000 a year, shall be-cligible for reappoMiiiiient,. and shall hot engage in any other business, vocation, or-em. .pToyjuent. " ' . neither the Administrator nor any olliecr or .employee of'the Authority .shall participate in any -matter affecting his personal' interests or the interest of any con>oration, partnership, or association in which he is directly or iiidircctly interested: Stc. 4. (a) The. Administrator is. authorized, subject to-thft civil-ser\ice laws and the Classification Act of 1923, a* amended; 'to. appoint and-fix the compensation of such employees iu> inav be nccessarv for the p_roRcr .jerformance of tlie duties of the Authority under this Act; except that without regard .to the civilservice laws lie may appoint such officers, attorneys, and experts and siic'i cinpluyees \\ lio^e compensation i.-, in excess of SI,9SO per annum, as..nay be necessary to carry-out- tlie purposes of .this Actj. (lj) Appointment to positions made under the provisions of this,.Vet the minimi salary of which ia in excess of S7,500 per annum shall be subject to confirmation bjvlhe Senate. : (c) The Administrator may accept and utilize such voluntary and unc^mpciisatcd scr\ iccn and \\ ith the consent of tin; agcncj concerned may utili/.e such officers, employees, cqiiipincut, and information of any agency .of the Federal, State, or local governments as hu findt helpful in the performance of the dutica of tlie Authority. Jn connection \\ ith the titili/.ation of such sen ices, the Authority may make reasonable payment? for necessary trailing and other expenses". (d) The Prsident miij at any time in his discretion tr.insfur to-the Authority anj right, interest, or title held by any department or agency of the Federal Government in an\ hoiisii.g or sluiu-clcarancc projects (con.ilhicUvi or in process of construction un the date of enactment of this Act), any assets, cuntracU, records, libraries, rusunrch mutcriftls, atid other property held it, conneciion \\iih aiiy such lio,i f ing or sluiu-clcaraiice projects or acti\ ities, aiii unexpended bnlanci; of funds allocated to such department or ageuc\ for the development, administration, or assistance of an\ hon=inj: or sliim-clearance projects or activities, and any cmplii.vees \\Iio have been ei.gJincd i'i uork connected w i t h housing ur slum clearance. Tli'- Authority ii.ny contiiuic anv or all activities niuU-rtakcn in connection with projects so transferred, subject Jo the provisions of this Act. SKC..5. (a) The principal .>flico of the Authority shall be in the District of Columbia, but. it mav t-stablinli branch uflices or agencies in any State, and may exercise any of its powers at any place within the United States. The Authority ina.v, by one or-more of its'Officers or employee.-) or by such agents or agencies as it in".;, designate, conduct hearings or negotiations at any place. (b) The Authority .shall sue and bo sued in its own name, and shall bo rcprcsen'od in all litigated matters by the Attorney General or such attorney or attorneys as ho. may designate. (c) The Authority shall have an ofliLi.d seal, which shall bo judicially noticed. (d) Thu Authority shall be granted the free use of the mails in the same manner as the executive departmcnta-of the Government, (c) Tlio_\utlH)ril\, including but not limited to its franchise, capital, reserves, surplus loans, income,.asset*, and property of un.\ kind, shall be exempt, from all taxation nuvv or.heruaftor imposed bj- Iliu Unitei^Slutes or b,v ati.v Stuto, cuinty, iminicipalil.v, or local taxing aulliont,\. Obligations, including interest, thereon, issued by public housing agenda in connection w i t h liiu-reia-hoiijing or shim-

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clearance projects, and the income dcrivcd:by aiicli agencio from such projects, shall be exempt from all taxation nowor hereafter imposed by tlic-Vniivii Si.atcs. SEC. G. (a) The Authority may make such expenditures, subject to audit under the general Ian, for thu actiui=!tiuii and maintenance of adequate administrative agencies, offices, vehicles, furnishings, f|titpiiicnt, -upplius, .books, periodicals, printing-and'biiulii.j;. for attendance at meetings, for any accessary tra\ cling c\pc';es within the United States, its Territories, dcpciuKncics, or possessions, and for such o.lier c\|>ciises as may from time to umr be found necessary for llie proper administratiun of this Act, Such financial'transactions of tho Authority as the making of loans, annual contributions, and capital grant?, and the acquisition,,-sale, exchange, lease, or other disposition of real and personal property, and vouchers approved'by tlic Administrator in connection \\iili-iicli financial transactions, shall be final and conclusive upon all officers of the Government; except that all such financial transact ions jf the Authorit.y shall be audited by the General Accounting Office, atsuch tiiiiCMind in aiich manner as. thu Comptroller General of the United States may by rcgulalion prescribe. fl>) The provisions of section'3709 of the lie-vised Statutes (U. S. C., 1934 edition, title 41, sec. ;.) shall apply to all contracts of the Au'.'.iority-for services and to .ill of its purdii-scs of supplies except uhcn the segregate ainuunt invoked is less than ?300. ,'cl The u>e'of funds made availablc.for tlic prppses.of this Act shall he subject to tin. provisions of section 2 of title 3 of the Trcaotiri ana-Post Office Appropriation Act f>r the fiscal year 1934 (47 Stat. 1439) and to maku such provWoi.a effective c%c.y contract, or agreement of any kind pursuant to this Act shall contain a pro\ ision identical to the one prescribe* in section 3 of title 3 of Mich Act. (d) No annual contribution, grant, or loan, ml no contract-for any annual contribution, grant, or loan, under this Act, sha. ic undertaken by the Authority except with tlic approval of the President. (c) With respect to nil projects under title II <,, Public Law H71, Seventy-sixth Congtfss, approved June 2S, 10.',0, references therein to the Untied Statin Housing Act of 1!)37, ax amended, shall include all aniciidiin.nls to said Act n.tnlc by the Housing Aft of IS.',!) or bfi aw/.other law thereafter enacted. SEC. 7. (a) The Authority may publish and disseminate information pertinent to the various aspects of housing. '~ (l>) In January of'each yoar'thc Atithority sliall make an annual report to Congress of !ta operations and expenses, including loans, contributiuns, and grai.U made or contracted for low-renl-luiusing and -him-clearance proji-uts undcrlakon, and the assets and liabililit-s of the Autliorit\. Such report shall inchulu op, rating atatcmcut,-, of-ali '|iroji.'<:t.-> undur the jnri.xlKlion of or ruffiving the a^islat., ; of the Autln)rit\, including suiiiiiinric.-, of the iiiLoines uf occupants, sixes of families, rentals, and other related information. SKI. S. The Authority may from time to lime-make, amend, and rescind Mich rules and regulations as.ma.i be iifco.-an, to earn out the provisions uf tins Act. SKC. 9. The Authority may make loans to public housing agencies to ns.-ist. the development, acquisition, or administration of Iou-ruit-houMi,g or .-luinclcnrnncr project^ by suih agoncie.-. Where capital grants arc madc-piir.Miant to seclioii 11 (he total amoanl of Midi loans outstanding on an\ one project, and m \\hich the AuthorilA |inrlitipales shall not exrcul (he >UAI lupment or aciiuisitiun cost of such project loss all .inch capital grants, but in no ovtnt .-hall .-aid"loans exceed 00 per centum of such cost. In the ia.-e of annual contributions in assistance of ]o\\_rL!iihils a.-< provided in section 10 tin- total of such loans oiitstnndiiii; on any one project and in ul.uh the Authority participates .-hull nol CNcced 00 per centum of tho development or acquisition <ost of such project. Such loans shall bear interest at sii.li rate not less, than the ni>/ilic<i!ih going Federal rato [at (lie time the loan is mndc,] plus one half of 1 per centum, shall bu sn tired in such manner, and shall In repaid within .Mich period not exceeding -i.\tv year.-, us ma\ be (loomed advisable b\ the Authority : Provitlul, That in-lhi-caxr.of/irojictii initialed after March /, 10',!), irilh rcsixct to which annual contributions' arc conIraclcil Jor imrsiianl lo lhi .Ic/, loans-shall nol be inaih fur a iiirind <jcccd inn forty years from the. ,lat< v^lhc bnnds <cidrncitiij the loan. ,\ml /irtii'idtd further, Thai, in the casf of sufli project* or amj ollur projects with ris/ii-cl '.. u7n*c/i ihc contracts (including contracts irlnrli iinnnd at .SK/ur.sn/t coiil/af/* /iiri'ioiixli/ inntli, /imfidc for loans for a period nol ucmliiifl fiiriy i/tms froin Ih; dan <! the Imiids evidencing the loan ami for (inninil conl,!biiti<ins fur a puiod not tJeieding forli/ i/mif fioin llie. dole, Ihc first annual conlrilndinn for the proict,! is i>a,d, anch loans x)ic:ll bear interest at a rale nol less lha-i the annlicaiilc going Itederal rali.

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"

HOUSING ACT OF 4948

ANNUAL .CONTRIBUTIONS-IN ASSISTANCE Of LOU* RENTALS

SEC. 10. (a) The Authority may make annual contributions to,public-housing agencies to assist in achieving and maintaining the low-rent character of their housing projects. The annual contributions-'for any such project shall be fixed in uniform amounts, and shall be paid in such amounts over a fixed period of years'. * EXo part of such annual contributions by the Authority shall be made available for any project unless and until the State, city,' county, or other political subdivision in which such project-is situated shall contribute, in the form of cash or ' tax remissions, general or social, or tax exemptions, at least 20 per .centum of the annual contrit jtioiib herein provided: J1 The Authority shall embody the provisions for such annual contributions in a contract guaranteeing their t ayment over such fixed period. [: Provided, Thai no annual contributions shall be made, and the Authority shall enter into ho contract guaranteeing any annual contribution in connection with the development of any low-rent housing or slum-clearance project-involving the construction of hew dwellings, .unless the project includes the elimination' by demolition, condemnation, and effective closing, or the compnlsonT repair or impro\Lmcnt of unsafe or insanitary dwellings situated -in the locality or. metropolitan area, substantially equal-in number to the numbor^of ncwjy constructed dwellings provided-by the project, c\cept that.- ach elimination may, in the discretion of the Authority, be deferred in any locality or metropolitan area where the shortage of "decent, safe, or sanitary housing available-to families of low income is so acute as to force'dangerous overcrowding of such families.] - (b) Annual contributions shall be strictly limited'to the amounts and periods necessary, in *he determination of the Authority.* .to assure the low-rent cliaracter of the housing projects involved. Toward- this -end tlic Authority may prescribe regulations fixing the maximum contributions available under different circumstances, giving consideration to.-cost, location, size, rent-paying ability of prospective tenants, or other factors bearing upon the amounts and periods of assistance needed to achieve and maintain low rentals. Such regulations may provide for rates of contributions based upon development, acquisition, or-administr.i'ion cost, number of dwelling'units, number of-persons hi/used, or other appropriate factors: Provided, That the fixed contribution payable annually under any contract shalHn no case exceed a sum equal to the annual yield, at 'the applicable going Federal rate [of interest at the time such contract is -madej plus 1 per -centum, upon the dcvclopincrt or acquisition cost of the low-rnt housing or slum-clearance project imolvcd [: And .provided further, That all such annual contributions shall be used, first to apply toward any payment of interest or principal on any loan due to the Authority from the public housing agei."yl (CO [In ca.sc any contract, for annual contributions is made for a )x>ribd exceeding twenty years, the Authority shall rcscr'vr the right to rfexamino the status of the low-rent lions-ing project involved at the end of te_n years and every five years there-after.-and, at the tiine of any such recxamination, the Authority -may nmke Mich modification (subject to all the provisions of this section) in the fixed and uniform amounts of- subsequent annual contributions payable under *"ich contract as is warranted by changed conditions and as is consistent with naintaining the; low-rent character of the housing project- involved.3 K> *t contract for annual contributions shall provide thai whcnettr in any year the receipts-of public hoiisuxj ayciuy tit umnu/iVm with a low-rent housing project-crcccd it* expenditures (includinij diltl se.rtiiCf.adminixlration, maintenance, establishment of reserves, and other costs-and charges), an. amount ci/ual to such ejrccss shall be applied^, or gel nxtdc for application, to purposes which, in the determination of the Authority, will effect a reduction in the amount of subsequent annual contributions. In no-case shall any contract fur annual contributions be made for a period exceeding sixty yenr.-s: Provided, Thai, in the case of projects initiated after .\larch I, If)1,!), contract* fur annual cont-ibutions shall nol be made for a period exceeding forty years from Hie dnlc the first annual contrib ' on fnr the project-is paid. And.proi'idcd'furthcr, That, in the ctisc of such project* ar ana other projects iiiith respect to which the contracts . for annual contributions (inr.ltidinij contracts which amend or supersede contracts prcinaasly mailci provide, for annual conlribiiliaim for a period nol errtaling forty years from tkidalt the first annual contribution for the project is paiil, the filed contribution Hitiy exceed the amount provided in the first proviso-of niibsfftio.n (b) of this section bij I per ecu I inn of dere.lopmant or acquisition cost. (<]) All pnymeiits of annual contributions pursuant to (his scfion shall be nmdi; out of nny funds avnilablu to the Authority when .such payments arc* due, e.\p(i[)t thai ils capital and its funds obtained through the i&itmncc.s of obligations pursuant to sect ion 20 ^including ri-pft\menU >r nthiT realizations of tho principal

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of loans made out of .such capital and funds) shall not b<_ available for the payment of such-annual contributions. - . (c) The Authority is authoi^ed, on and after the date of the enactment of this Act, to/cntcr into contracts \\liich provide for annual contributions segregating not more than $28,000,000 per annum. With respect to^projects assisted pursuant to this Act, the Authority (in addition tj the amount autKorized-by the firs, sentence of this- subsection) is authorized, icith the approval of the President, to enter into contracts, on and after July 1, 1949, for annual contributions aggregating, not more .than $85,000,000 ^cr annum, which limit shall be increased by further amounts of $80,000,000 on July 1 in each of the years 1950, 195{, "id 1952, respectively, and by $75,000,000..on July 1, 1953. Provided, That (siibject to-ihe told additional authorization of not more than $400,000,000 per annum) such limilj and any such authorized increase therein, "ni/ be incrrg&ed at any tune or times by not to exceed in any fiscal year an addit.^ual amount, of ,$80,000,000 upon a determination by the President, afar receiving advice front the Council of Economic Advisers as.to the general erf, rt of suJi increase upon conditions in the_ building industry and upon the national economy, that such action is in the public interest. And provided further. That 10 pcr,ccii nn of each amount of authorization to enter into contraclsfor annual contributions becoming available hcrnndcr shall, for-a period, af thrc*, years after such amount uf authorization becomes available, be available only for annual contributions contracts with respect to piojecls to be heated in rural nonfat,it areas. With respect to projects initiated after March 1, 19.'i9, the Authority may authorize the commencement of construction of not to exceed one-hundred, and fifti, thousand dwelling units after July 1, 19.',9, which limit shall be increased b.y further amounts of'one hundred and fifty thousand dirclling^iniiton Julyj in each of the years 1950 through and. including 1955, respectively^ Provided, That (subject to the authorization of not to exceed one million and fifty Uiousund dwelling units) such limit, and any such authorized increase therein, may be increased at any time or times by not to exceed in any fiscal year an additional one hundred thousand dwelling nnitf, or may.bt decreased at any time or times l>u not to cjre-tcd in-anyfisetil year one. hundred thousand dwelling units, upon a determination by the President, after receiving advice from the'Council of Economic Advisers as to the general effect of such-increase or decrease upon conditions in the building industry and upon the national economy,.that such action is in- the publ^ interest. And jirovided further, That contracts for annual contributions with resncct ia low-rent housing projects initialed after March 1, 19Jtit, shall not provide for the dcrclonmtiit of in(.re than of.c million and fifty thousand dinr.lKnrj units without JJhcr authorization from the Congress. Without further authorization from-Cungi..->, no nc\v contracts for nnniml contributions bi.vond those herein authorized shall be entered into b\ the Authority. The-faith of the United Status is solemnly pledged to the payimsut of.all annual contribution* contracted for.pursnant tu this Auction, niul there !> hereby authorized to be appropriated.in each fiscal year, out of any money in the Treasury not <ither\\i.-o appnpriaicd, the amounts necessary to provide for such payments. (f) IVi\incuts under annual contributiuiis contract* shall be plcdgud as security for anylJoaiih obtained by a public luin.sitiK agency to assist the de\ulopment ..T aa/uLlion of the housing project to \\hich the anniinl contributions relate [: Provided, That annual contributions shall be used first to apply tuuard the payment of interest or principal as same mat tire on any loan due to thu Authority from the'public housing apciicj. Tho term "any loan due to-(lie Authority" ns used in (his section shall n<< " ; loan made b.\ the Authority JncludiiiK any lyonds or-other c\iduiicos of ouch loan which arc resold b\ the Authority) )o assist the (!u\elopnu:iit of the project to which the annual contributions relate}(g) Krcrii contract inailc pursuant lo this A^ifor annual contributions for an;/ lowrent hi *ij project initialed after March 1, IQ.'iO, shall rtnitirc that the public housing agciicii, as among loin-income families which aic cligi'ili n/;/;?<i.ujs for occupancy in-dwcllings of <jicen sites ami.at spceificd rrnls, shall extend the following preferences in the sclcclinn of tenants: l'!:sl, to families tciiiih arc to be displaced bi/ any lotrj-rcitt hoiming project nr by any public iliitn-rlrarame or rcda-ilo/nncut project, or whlth jrrrc so dis/>lacctl within three i/cars prior tv maiing application-to sudt niiblic housing agency for ail mission /o anii low-rent housing, ai,J as among-suchfainilits where an a/i/illi-atiim fur admission is made i nl later than fire years after .Vnrc/i 1, 19,'iO, first preference shall be (lircn to families / disabled veteran* whose disability has bcni dcttrminui bi/ the Veterans Administration to be scrijcc-coniicctcd, and scroud preference shall be

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given to families of other reterans and servicemen (Including-families of deceased veterans or servicemen); ~ __ Second, to families of other veterans .and servicemen (im-i'iding families nf deceased rcjcrans 01 .tcrriciiucn) ichcre.an-application for admission in made not later than fire years aftt.r March 1. lO/fl; and as among such families first preference shall'bc . given lo families, of disabled vclrrans ivhose disability has been determinedly the Veterans' Administration to be scrvicfrconncclcd. (h) Every .contract made pursijunt to.lh's Act-for anntn.l contributions far any lotv-rcnt housing project initialed-afti r Starch 1, /.9.J0,, shall .preside that no annual contributions-by the Authorili/ shall'be made available for such project unless such ' project is net j.l'from-all real and personal proj-erly taxes levied or imposed by the State, city, conn.';/, or other pylitical subdivisions, but such contract may avlkfizc the public housing agcncu lo-makc payments in lien of such laics in an annual amount not in excess of 10 per centum of the annual shelter rcnti, charged .71 -such project: Provided, That, wilh respect to any such project to be located in any-Stale where, by reason of conitilulio'ial limitations or otherwise, such project is not exempt from all real and personal property taxes levied or imposed by the Stale, city, county, or other political subdivision, sucli contract -inay provide, in lieu of the requirement for lax exemption, that no-annual contributions by Ilit Authority shall bc_ male ariilablc ftr such p.-ojccl unless and until the Stale, citii, cu,mly,,or otlii r politi\ i! subdivision in tF/iiYJi such project is sit'ialed shall contribute, in the form of cash, at least' 20 ptr centum .of the annual contributions paid by the Authority. In resprri-to loic-rcnthousing iirojrct-i initinlcd prior lo .Vn/r.i 1. W-'fi, the Authority may, after the effective dale of the Housing Act of 19/iOj authorize / aynicntx inljtn of iturei far-each of-lhe project fiscal years in nspccl to ichich annual distributions tctrc payable during the tiro-year period ending June .50, lO.'/!), in amounts ichich. loflcth.r with amounts already paid, will not cjcccd thc.grcatcr of cither CO ~> per centum of the shelter rciits charged in such projects for each nf such project fiscal years. <y (if) flic amounts specified in the cooperation agrttmcnt.i in effect July 1, 10.',7. i/i/int/i the piittic housing aijincics and the. .political subdivisions . trhich thr projects are 'located; or in the ordinances or resolutions <i/ such political subdivisions 'n effect on such t''itc. In respect to such loir-ie.nt-hr.uxinfi iirojiil.-i init^iti-1 pr'ur In March /, l9JfO,-the conL 'lets for annual contributions mat/ l/c annndid-iis to projul fiscal years in ri^iiect lo ir/tir/t annual contributions arc payable on or aftu /.',/r /, JO.'iD, xo as lo rcijuirc ixemnlion from real aii,l iicrsunal properly taxes in lie.u o any other requirement*-a* lo local contributions anil lo permit payments in lieu nf taxis on the Urms prescribe 1 in the first sentence of this subxntiou; in llic nrl that (he conlracl.t fof aniuiil'conlribulions arc not so annulled, puyme.nls in lieu nf taxrs iii respect lo sinh project fiscal i/curs shall br limited lo Ihi amounts xptcifitd in the cooperation (tyi con n/'s or ordinances or resolutions, in effect July 1. 1047. ->
CAPITAL CHANTS IN" ASSI^TAXCB OK LOW RKNTILS

SKC. 11. (n> As nu nllcrnaiise inuiliod of a^-itiniico (o (lin. i>ro\\<\ctl in -SCCH'OII 10, \\lien au.\ pulilit- liuu.-iiig ngunc.\ nu Fui|iicnl.n ancl demointrates to the sat^faction of the Autln/ni\ that MU-1. n l t u r n a t i \ u inctliutl i? liultur .snitcil (o tin purpose of flohiuN ing and maintaining Ion rciitaK aid lo the other purp(>?< - of llifc Act, cajntnl grant:- inn\ bo made to Mich agcncv fur such purpose.-. The capital grant* tlm;- inadi; fur an.i luv,-rciil'liuiiaiiii; or nliiin-ilcaraiirc.project hull lio pnid in t-uniiuclioii \\ith it- duM'lupincuL or aciiuMtion, and .-hn!l \n. .--lricll\ limited to the ;iinount> iiu(T.-^ar\, in the determination of I lie Authority, to a&i. its lowrent, clinfactcr [. PmviJid, h<nrn',i, TIi.it no (.apiial grant, sliall lip Hindu for the development-of un> lo-rciit li(ni.->iiii; or .-luin-i.carat,n project. iiAohiniylie con8J.niution of .iuu ilufllin^.-, unlc---.> tin- project iii(Iml<>.-> (lie climi.inliou liy"demolition, condunination, and elfuetiso eliding, or the coinpulforv repair or improvement of iiiiMifo or in>;inil:ir,\ d\\( !ling> .-^ituatcd in the locality or '^i-trop ililan arua, .MilxilantialK u|i.a) in iminlier to tin number of ne\\l\ (oi^lruc.lri' dwelling unit.s iroxidi-d 1<\ the projcd, (.\cc]jt that Midi climinaljon may, in the 'ncrclion of the Authorit\ r l)i^ defi.-rrnl in an> lucnlil-.v or metropolitan nrjn where tne .shortage ol decent, .-afc. or cauitnr\ housing available to familii.- of low income i.i so acute as to force daiigeronsovercrowding of such families]!. (li> PurMinnt to Mil>.-cction la) <if ihi.-> fcct.ion, the Authority may make a capital grant for anj h)\\-ri .1 ho.ti-ing or shiin-tlcnrancc project, vvhii'li-.-linll in no case e.\cccd 2.">-per centum of ii.- development or aco,i.iisition cost. Co All pn,v nient.i of capital grants l\v the Autlioril v pnrMiant to Millet tion U>) pf thj.- Mn-iiun ,>hall lie made out jf anv fund.s available to the Authority, except1 tli,., iu-. capital and its fuiivls ohUii.icd throiii:!h the i.-Miancc of nbliftaliou- iiiirsiiaii to .section 20 vinclnding re|iii> inents or tithcr rcali/.atioii.> of the principal of loans

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HOUSIXG ACT uF 1949

..69.

made out of such capital and funds./ shall not be available for the payment of such - capital'graiits. (d) Tim Authority is authorized, on or after the date of the enactment of this Act, to make capital grants (pursuant to subsec. (b) of- this section) aggr gating - not inorc tlian 810,000,000, on or-after. Jiily 1', 1938;-to-inake additional.capital grants aggregating nut mure tlian 50,000,000, and oh or after July 1, 193'.), to make additional capital grants aggregating not mor; than $10,000,000. Without - further authorization from Congress, no capita! grants beyond those herein auth- orizcd sliall be made by the Authority. (c) To supplement any capital grant inadcby-the.AutIipi.iy in connection with the development of any low-rcnt-housihg or slum-clearance project, the President may allocate to the Authority, from any funds available fur the relief of unemployment, an additilnal .capital grant tc be expended for payment of labor used in siich devclopmeiit. Providid, That such additional capitaXgrant sliall not exceed 15 per centum of the development cost of the low-rent-housing or slum-clearance project.involved. " (f) Xo capital grant pursuant to this scctioii shall be made for any low-rcnthuusing of sluin-tlcarance project unless the public housing agency receiving siich .capital grant shall also receive, from the State, political subdivision thereof, or otherwise, a contribution for such project (in the foiin of cash, land, pr the value, capitalized,at tlieguing Federal rule of interest, of community facilities pr services for which a charge is usually mmle, or tax remissions or tax exemptions) in an amount not less than 20 per centum of its development or acquisition cost.
DISPOSAL OF I SUEIIAI, PROJECTS

SEC. 12. (a)-It is hereby declared tc >e_the purpose of Congress to provide for the orderly disposal of any low-rent-ho ising projects hereafter transferred to or acquirud.^y the Authority through the sale or leasi-g of such projects as hereinafter :providcd, and, in order to continue the relief 61 tlu Nation-wide unemployment and in order to avoid waste pending such sale or lease, to provide for the completion and temporary administration of such-projects by the Authority. (b) As soon as practicable the Authority shall atll iu> Federal (jrojccts or divest itself of tlicir managements-through leases. (c) Tlie Authority may sell a Federal project only to a public housing agency. Am such sale shall be for a consideration, iii~wlratcvcr furin may be satisfactory to the Authority, equal at least to the amount which the Authority determines to be the fair value of the project for housing purposes of a low -rent character (making such adjustment as the Authority deems advisable for any annual contributions winch may hereafter ue given hcrcundcr in aid of the project), less such allowance for depreciation as thu Authority shall fix. Such prbjci t shall (hen become eligible for loans pursuant to scctioii 9, and cither annual contril iiitiont pursuant to section 10 or a capital grant pursuant to scnMon 11. Any obligation of the purchaser accepted by the Authority as part of the consideration for the sale of such project shall be deemed a loan pursuant to section 9. (d) The Authority may lease any Federal low-rciit-housing project, in u hole or in part, to a public housing agency. The lessee of any project, pursuant to this paragraph, shall assume nd pay all management, operation, and maintenance costs, together with pay incuts, if any, in lieu of taxes, and shall pay to the Authority biich annual sums as the Authority shall determine arc consistent \yith maintaining the low-rent character of siich project The provisions of sectioi. 321 of the Act of June 30, 1932 (U. S. C., 1931 edition, title 40, sec. 303b), shall not apply to any lease pursuant to this Act. ~ (u) In the adininist ration of an.v Federal low Trent-housing project, pending sale ' or lease, the Authority shall TIN the rentals nt the amounts necessary to pa^' all , niaimgetiient, operation, and maintenance costs, together with payments, 'f"an.-, ;' in lieu of taxes, phis such additional amounts as the Authority shall dc UTinin ; arc consistent u i t h muinlaining the low-rent character of such project.
OKXK1UI, rOWKItS OP TUB AUTIIOKITY

SKC. 13. (n) The Authority may foreclose on any property or commence any action to protect or cufoicc anj right conferred 'Tpoii it by any law, contract, or other agreement. The Authority limy bid for nnd pjirchasc at any forcclosuro by any party oral, anj other sale, or (pursuant to scclion-23 or o//icnmc)-[othcr\MM-3 acquire or take, imsscusioii of [and may adininister] any [low-rent housing] rojuet uliieh it previously owned or in connection with which it has made a loan pnraiiaiit toscctivii 0,] aupual [contriljiltions ]Jiraiiant to section 10J contrilw-

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HOUSING ACT OF 1949

(ton, or capital [grants pursuant to section 11] grant, mid in sueh event (lie Authority may complete, administer, pay tic-p. ineiptd of and intcrrjit on any-obligations issued, in connection with such project,-dispose of, and other aisc deal with, such, projects or parts-thereof, fttbjcct, however, lv the limitations e'scichcrc in this Act governing tlieir-admihistratwit and disposition. ; .^ (b) The acquisition by the Authority of any real property pursuant to this Act .shall not deprive any Stale or .political subdivision thereof of its civil and criminal jurisdiction in. and over such property, or impair the civil'r^hU under the State or local Ia\v of the inl..ibitants on .siich property, and, insofar as any rstich jurisdiction may have been taken away or any such rights impaired by reason of the acquisition of any property transferred t < the. Authority pursuant to section 4 (d), such jurisdiction ami such rights arc l.ereb> fiilly restored. (c) The Authority may enter into agreements to pay annual' sums in lieu of taxes to any State or political nubdivision thereof with respect-to any. real property owned by.-the Authority. The amount so paid fpi any year uj>on any such . .property shall Hot exceed tin .axes that would bc.paid to the State or siibdiv ision, as thacasc may be, upoj. stii.ii proper! \ if it were not exemptJroin.taxatioirthercby. (d) The Authority may procrrc insurance against any loss in connection with __ ita pj_yperty and other-assets (including mortgages.;, iii-ciicli.aiiiounis, and fr<in such-usurers, as it deems desin-blc. fe) The Authority may sell or exchange at public or private sale, or lease anyreal property (except luu-Fentr'ioiiHiii; projects, the disposition of which- is governed elsewhere in this Act) ur-pcrsonal .property, and sell or exchange any securities or ubligatii'iis, upon such terms as it may fix. The Authority may borrow on.the security * i any real or personal property o\i net' by it, or on:t he security . of-the revenues to t j derived tliercfr. in, and may use the proceeds of .-.ich loans for the purposes-of this Act. "-1 SKC. 11. Subject tu ihe specific limitations or standards in this Act go\crning the terms of sail-?,-rentals, leases, loans, contracts for annual contributions, contracts-for capital grants, or other .agreements, the Authority may, whcimcr it deems, it necessary or de.-irable in the fulfillment of the purport- of this Act, consent to the modification, wit h i\>pcu tu-rate of inttrcst, time of pa.\ incut of any installment of principal or interest, security, amount of aiiiuial c.t/nribntion, or any other term, of any contractor agreement of any kind to wliicli the Authority is a party or \\1i.ich has been transftrred.to it pursuai.i to this .\ci. When the Au'thorilij finds lliat.il in,,.W promote iro'noniy ui lii in tin. financial interest oj the I'cdf.ral Government, any conduct heretofore or At -aftci made for annual contributions, loanx, or both,.mat/, with Prtaidcnlial approval, ^ amended or superseded lij a .,,ntra<l of the Authority sothut the. guing fideral rate o i the basis of which fiuh tiinitial contributions or interest rate on the loans, or both, r^spictit'cli/, >nrc fixed shall mean the going Federal'rate, as herein,dt,finc<l, on the dole of" Presidential approtal of such amending or .,,,/iiiscilinfl emit/net. Pr* ''led. That contracts may not be amended or superseded in a manner which (COiiW impaii the rights <./ the holders of an;/ outstanding obligations of the .public housing agency involved for which annual <u/ifr''ii</ionc hiive bcr.n pledged. Aiiy rule of law contrary to this provision shall be deemed inapplicable. SKI. J5. In order to insure that the low-rent character of housing project^ will be preser\ud, and that the otliur purposes, of this Act willbc achieved, it is hereby provided that (j) When a loan is made pursuant to section 9 for a low-rcnt-housing project' the Authority may reti.in the right, in the event of a substantial breach of the Condition (which shall be cinbotlicd in the loan.agreement) providing for the maintenance of the lou-runt charactcrof the housing [iroject imohed or in the e\cnt of the acquisition of such project, by a third partyill any manner including a buna fide foreclosure under a mortgage < r other lien held by a third party, to increase the interest pay able thereafter on tht balance of said loan then held by I ho Authority t^ a rate not in excess of the - going Federal rate (at the lime of such breitch ur.aM|iiisi(ion) plus 2 per Centuin jicr annum or to declare the unpaid principal o i said loan due forthwith. (2) When a loan is made pursuant to section 9 for a slum-clearance project, the Authority shall retain the right, in the cvjnt ol tho.lcasing or acquisition of such project by a third party in any n.uhiicr including a bona fide foreclosure under .t mortgage 01 oilier lien 1'old by a third party, to increase-1 lie interest payablr thereafter on the balance of said loan then held by the Authority to a laio not in excess of the going Federal rate (at. the limo of .such leasing or acquisition) plus 2 per ceniutn per aniuini or to (leclnru the unpaid principal on said loan due forthwith.

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(3) When a contract fur animal contributions is made pursuant to section 10. tli.c Authority sliahi retain tlip-right, in thc-cvunt of a substantial:breach of the condition "(\v]iicIjvliaH be.embodied in such contract) pro\ iding for the maintenance of the lojv-n-ht character of the housing .project involved; to reduce or terminate thr annual contributions, payable under such contract. In the event of the acqiiisitio.n of Mich project by.a third party in ac.y manner including a bpna fide foreclosure-under a mortgage or other-lien held-by a tliifd party, such animal contributions shall terminate. (-1) The Authority-ma.. also insert in any contract for loans, annual contributions, .capital grants, sale, leesc, mortgage,, or any other agreement -or instrument made pursti.. it to this Act, such, other covenants,-,cond:tioiis, or provisions-aa it. inay.dceii iiecessary in order to insure the low-rent character 1 of th? housing project, involved: Prowled, That any snch'0,bhtract for~a:substantial loan limy contain'a condition requiring the maintenance of'an. opcn> space or playground in .connection with the housing project, involved if deemed, necessary by the Authority for the safety or health of children. (5) No contract for any sloan, annual contribution, of capital grant ivmde pursuant to this Act shall ib"e entered .into by the Authority with respect to anj low-rent huiisiiig proji-ct [hereafter initiated costing] complcteil tifler _ January J, JO.'iS, having at cost for construction and equipment oMnori. than [SJ;OOQ per family duolliig unit or more than 1,000] $1^50 per rooin (excluding land, demolition, and npiidwclling facili'Jcs); except that in the case of .\laska [any city, ihe population of which exceeds 500,000;]: any such .contract -may .be entenid into with respect, to a project, having a.cosljor construction ami "[hereafter .initiated costing] equipment of not to. exceed:[$5,000] ?,o00 [per fainily dwelling unit or not to exceed SI.250] per room (excluding land, demolition, and nondwclling facilities): [if in the opinion of the Authority surh higher family dwelling unit cost or cost per room is justified by reason of higher cosU of labor-and materials and other construction costs:] Provide!, That if the Administrator finds thai in the geographical area of any project (i) it is not feasible under the aforesaid cost limitations to construct the prt,jcct without sacrifice of sound standards of conalruction,^Ksign,.aniL.lit.abiliiii. and (if) Mart. is.t.:i: acute need for such housing, he may prescribe in such conlrt-ci .usLlimilalions which may ejected bij not more lha $730 per room .the liinita.'ions-thal icould otherwise lie applicable to such project hcrcnndcr. [With respect to housing projects on.\i Inch construction is hereafter initialed, the] The Authority .shall make loans,, grants, and aiinii.il contributions only for sucli low-rent hoiiMng projects as it fiiuls arc to be under taken in sucli a manner .['a)] that such projects will-not be of elaborate ur-[c.\peiisi\c]./rti;<;;/n/-design or materials, and economy will be promoted both in coiioiruction and administration, [and (b) that the a\erage construction cost of the dwelling uniU (excluding land, demolition, and nondwclling facilities) in any such project is not greater than the average construction cost ot duelling in its currently produced by private enterprise, in the locality or metropolitan area concerned, under the legal building requirements applicable to the proposed site, and under labor standards not lowcr-thnn those prescribed in this Act.] In order to attain the foregoing objciticc, nery contract for financial nxsislancc entered into with respect to an;/ low-rent housing project initiated after March J,. 1949, shall proridc that no award of the. main construction contract for such ,,iojccl shall be made unless the Aiilhorili/, taking into account the level of construction cosjs prevailing in the locality where such project is to be located, shall have, soccifiailly approved the amount of such wain construction contract. (G) Notwithstanding the provisions of subsection (o) of this section, or of any other section of this Act, the Authority Is authori/.cd to make capital grants, loans, or annual contribution:) for luu-rent-housing or sunn-clearance projects, in the full amount, of any sums previously allocated pursuant to this \ct, to a'1;, public housing agency, at the request (.f-siic.h agency, upon cowl (ion H,.it.'such agency, will pay, or cause to be paid by the Stacc or political Mibdmbion, such proportion of the total development cost of the project an the amount of the average actual cost per family duelling unit of the items covered by the applicable cost limitation:! prescribed in niihscotiuii (5) of this section in e.\cc.-s thereof bcaro to .such a\ cinge ai tunl cost: Pr.oridcd, That' the amount, of any such pay incut shall be excluded from Hie base on which the maxim.mi amount of any capital grants, loans, or annual contrib.itions authori/.cd by this Act arc calculated. The receipt of capital, grants, loans, or annual contributions by .iiiy public-housing agency pursuant (o this

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HOUSING ACT 'OF 1949 subsection shnll.ii) no way prejudice or impair t'u ,"glits or privileges of such agency to participate fully in other luw-rcnt-housing or slum-clearance projects under ,this Act or any other law. Nothing in (his subsection snail prejudice the right of those "public-housing agencies which cari; by reason of lesser need, or would prefer to delay the starting of their proposi-d building" -operations until labor and-material costs stabilize at level:- consistent with the cost limitations presented in.subsection (5) cf4his_ section. (7) In recognition that there should be local determination of the nfcd for ' hip-rent ho'.mijig to meet needs not being adequately /' by private enterprise (a) the Authority shall hot make any coriirticl with a public housing agincy.for preliminary loans (alLof which shall- be repaid out of any moneys which become available to-such agency for the development of the projects - involved) for surveys and -planning in respect to any low-rent housing projects initiated after March I, 1040, (i) unless-thc governing-body of'the locality invoiced has by resolution approved the application of the public housing agcncy-for siich;prcliininury /pan; and (it) unless the public housing agency has demonstrated to-ihe. satisfaction of-the Authority^ that there :a need for such lore-rent housing, which is not being ma by. private enterprise; and . . j (6) the Authority shall not wake any contract'for loans (other than preliminary loans) or for annual contributions pursuant to this Act with respect .to any lowrrent housing project initiated after March 1, 10^0, (i) unless the governing iof/i/.o/ihe-locality involved has.cntercd into ah agrecmciit with the public housing, c.gcncy providing for the loral cooperation required by the Authority pursuant to this Act; and (it) unlcss-thc publi" housing agency has-dcmoiistralcd to the satisfaction of-thc Authority that a gap hf at least SO per centum-has bctn left between the upper rental limits for admission to the prnpgscd lfiic~rt.nt housing and the lowest rents at ithir-h 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. (8) Every contract made pursuant to this Act for annual contributions for any low-rent housing project initialed after March 1,19/,9, shell provide that (a) Me public-housing agency shall fix maximum income limits for the admission and for the continual- occupancy of- families in such housing', thai such iiitix-i in inn income limits and'all revisions thereof-shairbe subject to the priof approval of the Authority, and th<it the Authority may require the. public, housing agency to review and to revise such maximum -income limits jf the- Authority determines that changed conditions in the locality, make such revisions necessary in achieving the purposes of this Act; iM a duly authorised official of the .public housing agency involved shall .the periodic-written statements to the Authority that an investigation has been made of each family admitted to the low-rent nousing project involved (lur,i,g the period covered thereby, and that, oh the basis of'the report fifsaid investigation, he has found that sach such Jamil]! at the time of-ils admission (i) had a net family income, not exceeding the maximum income limits thcrcloforcfircd by the pi/Wi'c housing agency (and approved by the Authority) for admission offamilica of low income to such housing; and (it) lived in an unsifc, insanitary, or overcrowded dwelling, or was t<> be displaced by another low-rent housing project or bif a public slum-clearance or redevelopment project, iir arlnally was without housing, or was aboyt to be without housing as a result of a court, order of eviction, due to cause-? other than the fault of the tenant: Provided, That the requirement in-(it) shall not be applicable in the rase of the family of any veteran or serviceman (or of any deceased ufcnin or serviceman) where application for admission to such housing is made not later than five years after March t, lO.'iQ; (r) in the selection of tenants (i) the public housing agency shall not discriminate against families, otherwise, eligible for admission to such housing, because-Ihcir incomes arc derived in whole or in part from public assistance, and (if) in initially selecting families for admission to dwellings of given sites and at specified rents the public housing agency shall (subject - to the preferences prescribed in subsection 10 (g) of this Act) give preference tofamilies'having.thf most urgent housing need, and thfnnftcr, in selecting families for admission to such dwellings, shall nive due consideration to the urgency of the families' housing needs; and

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" HOUSING ACT- OF 19.49

'

7o

(</) the public housing agtncy^shall make periodic reetaminations of the rid incomes of tenant families living in the low-rent housing project invoiced; and if.il is found, upon such reeramination, thai the net incomes of any such families havf:incrcascd beyond the maximum income limits, fixed by, the public housing agency (and approval .by the Authority) for continued -. occupancy^in such housing, such .families-shall be required to move from t h e project; .. ' . - - ,\ .(8) Any contract for loans or annual coiilt Millions; u. both, entered. int6_by.the Authority ic."!A ii_piiblic.houting agency, may cover one or more than onjf loin-rent _, housing-project o <icd by said-piiblif housing-agency; in the event such-contract COJICK tuo^or- >nore projects, such projcus may, for anyof^thc purposes of this Act and.of sitcliC'/nlracl (including, Lut.nol limited to, the Jilcrminaiio" nf the amount c,' the 'joan, aniitial contributions, or payments, in Jicu of taxes, spccijied.in such contract),~ be treated collectively (is oncyrojccl. SKC. 10. In.order to protect labor standards (1) The provisions of the Act of August 30, 1935, entitled "An Act to Amend-the Act approved March 3, 193J,_relatii)g to the rate of wages for laborers and mechanics cmplo\ed bv contractor^ and subcontractors on public buiMings" (49 Stat. 1011), and of the Act of August 24, 1935, .entitled "An Act requiring contracts for the construction, alteration, and repair of any public building or public \\ork of the United States to be accoinpai.ied.by.a perforiimnce-bond protecting the United Stntcs-anil-by an additional bond for the protection of persons furnishing material and labor for the construction, alteration, or repair of said public buildings or public work" (U. S. C. 1934 edition, Supp. II, title 40, sees. 270a to 270(1, iiiclushe), shall apply to contracts in connection with the development or administration of' Federal projects and the furnishing of materials and labor for ich-projects: ProruLd, That suits shall be brought in the name of the ..uthorijty and that the Authority shall itself perform the duties prescribed by section 3 (a) of the Act of August 30, 1935, and section 3 of the Act of August 24, 1935. (2) Any contract for loans, annual contributions,, capital grants, sale, or lease pursuant to this Act shall contain a-provision requiring that not less than the wages or fees prevailing in the localitj, as determined or adopted (subsequent-to a determination mider applicable State or local law) by the Authority^ shall be paid to all architects, technical engineers, draftsmen, technicians, laborers, and mechanics employed in the development or administration of the loyv-rr:it housing or slum-clearance projcctjn\olved; and the Authority my rcqui.c certification as to compliance w i t h the provisions of this paragraph prior to making any payment under such-contract. (3) The Act entitled "An Act- limiting tile hours of daily scrvi :es of laborers and mechanics employed upon \v,ork done for the United Stat s, or for any Teriitorj, or for the District of Columbia, and for other purpose ", as amended (37 Stat. 137), shall apply to contracti of the Authority for work in.connection with the development and administration of jpcdcral projects. (1) The benefits of the Act entitled "An Act to provide compensation for employees of C.w United States suffering injuries \\hilc in the purfunnancc of their duties, and for other purposes" (39 Stat. 712), shall extend to officers . aiul employees of the Authority. (5) The provisions of sections 1 and 2 of the Act of June 13, 1934 (U. S. C., 1934 edition, title 10, sees. 27Cb ami 27Gc), shall apply to any low-rent housing or slum clearance project financed ii, \\huluur in part uith funds made a\ailablc ]>ursuant to this Aut. (0) Any contractor engaged on any project financed in whole or in part with Ximds made a\ailable pursuant to this Act shall report monthly to the . Scerelnry 01 LaLur, and shall cause all subcontractors to.report in like manner (within five da).< after (he close of each calendar month, on forms to be furnished by the United States Department of Labor), as to the number of persons on tla-ir ii'specli\c pay rolls on the particular project, the aggregate amount of such pa> rolls, the total man-hours uorkud, and itemized cNpcnditurcs for materials. Any such-Contractor shall furnish to tliu Department of Labor the names rind addresses of all subcontractors on the work at the earliest (Into practicable.
FIN'A.VCIAL rilOVISIOXS -

SKC. 17. The Authority shall have a capital stock of $1,000,000, which shall bo subscribed by tlu United State* and paid b\ the Secrelarj uf thu Treasury out of

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HOUSING ACT OF 1949

any u*aijablc funds. Receipts for such payment, shall be issued to the Secretary of "the Treasury b* the Authority anil ahull e\idcnce the-stock ownership of the United States of America. SKI;. IS. There is hereby authorized to be appropriated, out of any money iiv the Treasury not otherwise appropriated, the sum of 826,000,000 for the fiscal 1 year ending'June 30, 1938, of \\hich 81,000,000 shall be available to'pa* the sub-* script ion to the capital stock of the Authority. Such suhi,' and all receipts and assets of the Authority, shall be available for the purposes of tlib Act until expcndf'.. SKC. 19. Any funds .available under any Act of Congress for allocation- forvhuiising or slum clearance may, in .the discretion of the 1'rcMdciit, be allocated to the Authority for the purposes of this Act.. SKC. 20. |(c) The Authority is authorized to issue obligations in the form of note*, bond.-,, or otherwise, which it may sell to obtain funds for the purposes of this Act. The Authority may issue Midi obligations iivan amount not to.exceed' 8800,000,000, exclusive of an* obligations which may l>c issued for rcfinming purposes. Such obligations shall be in such forms and denominations, mature within such periods not exceeding sixty years from .date of issue, bear such rates of, i.iiPJrest hot exceeding 4 per centum*per annum, be subject to such terms and ci...(litions, and be issued in such manner and sold at such prices as ma* be prescribed by the Authority with the approval of the Secretary of the Treasury. Lib) Voh obligations shall be exempt.'bbth as to principal and interest, from all taxation except surtaxes, estate, inheritance, and gift taxes) how or hereafter imposed by the United States or by an* State, county, municipality, or local taxii g authority. lie) Such obligations shall be full* aiid uiicu.iditionally guaranteed upon their face by the United States.as to the payment, of both interest and principal, and, in the event that the Authority shall be unable to make an* such payment upon demand **Iicn due,.payments shall be made to the holder by the Secretary of the Treasury with money hereby authorized to be appropriated for such purpose oiit of any mono* in the Trcasur* not otherwise appropriated. To the extent of such payment the Secretary of the Treasury shall succeed to all the rights of the holder. lid) Such obligations shall be lawful investments and ma* be accepted as security for all fiduciary, trust, and public funds the in\cstment or deposit of which shall be under the authority or control of the United States or an* officer or agcnr* thereof. The .Secretary of the Treasury in likewise* authorized to purchase any such obligations, and fur such purchases he ma* use as a public-debt transaction the proceeds from.the snip of anyi*ruriti(a> hereafter issued iiiiJcf the Second Liberty liv-nct Act, as a'.iemfcd, and the purposes for whicli securv'ics may be issued under such Act, 's amended, arc extended to include any sucb ^purchaserTile Secretary of the-Treasury ma* at any time sell any of'the obligations, acquired by him pursuant to this section, and all rcdcinptijii-, purchases, and sales b* liim of such obligations shall be treated as public-debt transactions of the United-States. (.) Such obligations may be marketed for the Authority at its.rctiucst b* the SccruUi'ry of the Tjcasury, iitilizint; till the facilities of the Treasury Department now authorized b.* Vaw for the inarkct.ng.f obligations of the United States.] The. Authority may i^suc and have, oiilstand. ng al any one lime notiA.and oilier ofc/,"u,.lionsfor /iiirchasc by /.V Sn.rt.tary of Hie T't -isunj m an amount not to exceed $1,.500,000,000. Such notes 01 -other ollin'.itwns sit til IK in such forms an * iniimilionf, shall haw such mnturt!it-,.and shut) lit. $ jjcrl to such terms anil wititiliomi us maif be prescribed bu thr .\<hvri,:>.. Hli.thr n ^roval of the Secretary of'the Trcaxury. Such italic oi-ulher alligations shaK-fa.. .nltrist at a .ale <lclcrininc<l lt>i the Secretary of the TruiKurif, tahing into ioHiJt,radon tht, t,nrrci,l average rate on outstanding marketable obligations of th<. L'niled StaUs us of tin. last day of the month preceding Ihc issuance of the notes or other obligations by the Authority. The. Secretary of (lie Trcaxury is authorized and directed to //r</m.sc .any notes or other obligations of the Author!!'/ iasued hcrcundtr and for such fiui jtose is authorized to use as <i i>ublic-ihbl transaction the i>roiccdsfrom the sale of any sccuriliis msiied under tin Second /.iberty Itolid Act, rt* amended, and the inirp.iscsf.ir whit 'i sccmi'ics in ty be- nsucd under such Act, as amended, arc. extended to include any purchases of such obligations. The Secretary . of the Treasury may at any time, sell any of the notes or other obligations acquired by him under this section. All rcdeiniilinns, purchases, and sales by the Secretary of^the Treasury of smh Milts or other obligations shall be treated as niiblic-debilransacliojut of Ihc United Stales. SKC. 21. (n) Any monoy of the Authority not otherwise employed may btr deposited, subject to check, with the Treasurer of the United" States or in'any

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75

Federal Pescrvc bank, or may be invested.in obligations of the United States or used iii tlie purchase or retirement or redemption of any obligations issued by the Authority. (l) The Federal Reserve banks are authorized and directed to act as depositories, custodians, and fiscal agents for the Authority in the general exercise of its powers, and the Authority may reimburse any such bank for its services in such manner, as may be agreed upon. '.. (c) The Authority may be employed as a financial agent of the Government. - When designated by the Secretary of the Treasury, and subject to such regulations -as he may prescribe, the Authority shall be a depository of public money, except receipts, from customs: (d) Not more than 10 per centum of the [funds provided for in this Act, cither in the form of a loan, grant, or animal contribution,] total annual amount of $4~8>000000 provided in this Act for annual contributions, nor more than 10 per centum of the amounts provided for in this Act for grants, ahall be expended within any one State.
PRIVATE FIXAXCIXG

SEC. 32 To facilitate the enlistment of prhatr capital through the s'-Jc by public housing agencies of their bonds and other obligations to others than-the Authority, in financing^ lota-rent housing projects, and to maintain the loie-rcnt character of hoiising.projecis (a) Every contract, for annual contributions (including contracts which (intend or supersede contracts previously made) may provide that (1) upon the occurrence of a substantial default in respect to the covenants or conditions to which the public housing agency is subject (as such substantial default shall be defined in such contract), the public housing agency shall be obligated at.the option of the Authority, either to convey title in any case where, in. the determination of the Authority (which determination shall be final, and conclusive), such conveyance of title is necessary to achieve the purposes of this Act, or to deliver -possession to the Authority of the project, as then constituted, to which such contract, relates; (2) the Authority shall be obligated to reconccy or to redcliwr possession of the project, as conftilutcd .tl the time of. reconveyance or rcdcfivery, to sui* public housing agency or to Us successor (if such public housing agcnc.y or a successor exists) upon such terms as shall be prescribed in such contract and as soon as practicable: (!) after the Authority shall be satisfied that all defaults leith respect to the project have been cured, and that the project will, in order to fulfill the purposes of this Act, thereafter^ be operated in accordance with the tcrnis of such contract; or (ii) nfler the termination of the obligation to make annual contributions available unless there arc any obligations or covenants of the public housing agency to the Authority which are then in default. Any prior.convcyances and reconveyances, deliveries and rcdelncrics of possession shall not exhaust thc-righl-lo require a conveyance or delivery of possession of the project to the Authority pursuant.'to subriaragraph (1), upon the subsequent occurrence of. a substantial default. (b) Whenever such contract for annual contributions shall include provisions which the Authority, in said contract, determines arc in accordance with subsection (a) hereof, and the annual contribution!, pursuant to such contract, have been pledged by the public housing agency as security for the payment of the principal and interest on nny of its obligations} (Ac Authority (notwithstanding any other provisions of this Act) shall continue to make annual contributions available for the project so long as any of such obligations-remain outstanding, and may covenant in such contract (in hen of the provision required by the first senUncc of subsection 15 (S) of this, Act) thai in any event such annual contributions shall in each year be at least a/nal to an amount which, together with such income or other funds as arc actually acailablc from the project for the purpose ' the lime such annual contribution is made, wiil suffice for the .paymcnt'of all installments, falling due within the next succeeding twelve months, , of principal and interest on the oMiynliniiS for which the annual contributions provided for in the contract shall' have been pledged as sccnrili/: Provided, 'That such annual contributions shall not be in excess of the maximum sum determine*! pursuant to'thc provision* of this Act; tind in no case shall such annual contributions be in arccsx of the maximum sum specified in the contract involved, nor for longer than the remainder of the maximum period fixed by the contract, PENAI.TIKS SKC-. [22J 25; All general peril statutes relating to :ho larceny;.embezzlement, or conversion or to the improper handling, rotcntirn, use or disposal of public moneys or property of tho'United Slates shall npply'to the moneys i.'l property

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of-the Authority and to moneys and properties of the United States entrusted to the Authority. SE_C. [23] 2.$. Any person who, with intent to,defraud the Authority or to deceive any directcr.'oificer, or employee.thereof;or an\ officer or employee of the United States, makes any false entry in anv book of the Authority or makes any false report or statement to" or for the Authority shall, upon conviction thereof, bc'fincd.not more than 81,000 or impri-uhcd for not more than one year, or both. SKC. 2-1] 25. Any person who shall receive any compensation, rebate, or re- ward, or shall enter into any con-piracy, collusion, or agreement, express or implied, with intent to defraud thO Authority or with intent.unlawfully, to defeat its purposes, shall, upon conviction thereof, be fined he! more than $1,000 or im-prisoncd for not inor&.than one year, ot-botli. SEC. [25] 26. Any person who induces or irilKences the Authority to purchase or acquire any property or to enter into any contract and willfully fails to disclose any interest, legal or cquitablo, which he has in such property or in the property to which such contract relates, or any special benefit which he expects to receive as a result- of such contract, shall, upon convictioivthcieof, be fined hot more than 81,000.or imprisoned for not more than one year, or both. SKC. [26] 27. No individual, association,*partnership, or corporation shall use the words ''United States Housing Authority", or any combination of these four words, as the name or part thereof, under which he or it shall do business. Any such use shall constitute a misdemeanor and shall be puniahaoi" bv a. fine not cxcccdinK $1,000.. SKC. [27] 2$. Wherever the application of the provisions of this Act conflicts with the application of the provisions of Public, Numbered 837, appp icd June 29, 1936 (49 Slat. 2025), Public, Numbered .845; approved Juno 29, 103G (49 Stat. 2035), or any other Act of the United States dealing with housing or slum clearance, or any Executive ord_er, regulation, or other order thereunder, the provisions of fhis Act shall prevail. SKC. [28] 20. The President is hereby authorized to make available -to the Alley Dwelling Authority, from any funds appropriated or otherwise provided to carry out the purposes of this Act, such sums as-he deems necessary to carry out the purposes of the District of Columbia Alley Dwelling Act, approved June 12, 1934 (Public, Numbered 307, Seventy-third Congress). Such-sums shall be deposited in the Conversion of "hlmbited Mlcys Funds and thereafter shall remain immediately available for he purposts of the District of Columbia Mley Dwelling Act. SKC. [29] SO. Notwithstanding any other evidences of the intention of Congress, it is hereby declared to be the" controlling-intent of Congress-that if ar.y provision of this Act, or the. application thereof to any person or circumstance, is held invalid, the remainder of this Act, or the- application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. SKC.. [30] 31. this Act may be cited as tbe ''United States Housing Act of 1937". THE NATIONAL BAXK ACT . U.S. ol30. * * * a national banking association * * * shall have power * * * * * * * Seventh.1 To e.\ercic by its board of directors or dl.\ authorized officer* or agent*, subject to Ia\\, all Mich incidental powers ns shrill be ncce.xsary to carry on the business of banking * * *. The business of dealing in securities-and flock by the asocial ion .ihall bu limit <! to purchasing and selling such securities and stock \\illiout recourse, solely upon the order, and for the account of, customers, and iii.no ca.-e fur its o\\u account, and the association shall not underwrite, any issue.of securities or stuck. ProtitM, That the n.-sociation may purchase for itn o\\n account in\esltii"iit securities under such limitations and restrictions as the Comptroller of the Currency may 1>\ regulation prescril>c. In no event -tlmll lliu tola! amount of the ii>\ eminent securities of any one obligor or maker, held by the association fur its own account, exceed at any time 10 JX.T centum of Us capital stock act nail j paid in and unimpaired and 10'pcr centum of its uninv paired surplus, fund * * *. Except as hereinafter provided or otherwise
> This provision (sec. M.Vt at llic Hcvlurd Slnliurs) l> In ttc. 21 of tUlc 12 ol (lie 1'nllcil SlnlcJ Ccxlo (lOir, cillllnm. .See. -tW o( iho Sinic llilc |iro\nlr.<i Out "Sl.tlc mcmtxr linnks (of tlic Fcilctn) Itwrvc SyIcm| .ihnll bosohjrcl to;hc same liniliaiions anil c.millilons nllh rrjffcl to lio Imrcliajlns, solllnc, iindrrwrltlnif. and holding of Investment MCUTIIK ind stock 0.0 arc ,u>i.,lr.iWc In the fsvsc of national tanks under pantiraph 'Sovcnth' of sec. 24 of this tltlo."

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HOUSING ACT OF 1940

77

permitted by la\v, nothing herein contained shall authorize the.purchase by the association for its own account of any shares of stock ui-aiiy corporation. TIic limitations and restrictions herein contained a to dealing in, underwriting and purchasing for its own account, investment securities shall hot apply to obligations of the United States, or general obligations of any State or any political subdivision thereof, or obligations issued under authority of the Federal Farm. -Loan Act, as amended, or issued by the Federal Home Loan Banks or the Home "Owners' Loan Coloration, or obligations which arc insured by the Federal -Housing Administrator pursuant to section 207 of the National Housing Act if the debentures to.be issued in payment of such insured obligations at guaranteed as to principal and interest by the United States, or obligations of national, mortgage association, or such obligations.of any local public "jrncy (ait defined in section-110 (h) of'-lhe Housing Act of ?949) as are securcdly an agreement between the local public agency and the. Housing and Ihmc Finance Administrator in which the local public agency agreei to borrow from said Administrator, and taid Administrator agrees to lend to said local public agenty, prior to the. maturity of such obligations (which obligations shall hate a maturity oj not more than, eighteen-months), moneys in an amount which (together with any other, moneys irrcrocably committed to the payment of: interest on such obligations) icill suffice to pay the principal of'such obligations with interest, to maturity thereon, whid. wneys under the terms of said agreement are reijiiircd to be.usedfor the purpose of pa-'tng the principal of and the interest on such obligations at their maturity, or such obligations of a public housing agency (as defined in the Unitea States Housing Act of 1937, as amended).as are secured either (1) by an agreement between the public housing agency and the Public Housing - Administration in which the public, housing agency, agrees to borrow from the Public Housing Administration, and the Public Housing. Administration agrees to lend to the public housing agency, prior to the maturity of such obligations (which obligations shall hare a maturity of not more than eighteen months),:moneys in an amount,which \tqgelhtr with any other moneys irrevocably committed to the payment of interest on such obligations) will suffice to pay the principal of such obligations with interest to maturity thereon, which moneys under the terms of said agreement are required to-be used for the purpose of paying the principal of and the interest on such obligations at their maturity, or () by a pledge of-annual contributions under an annual contributions cpiitract between such public housing agency and Ihe Public Housing Administration if such contract shall contain the covenant by the Public Housing Administration ichi<;h is authorized by subsection (b) of section 23 of the United Slates Housing Act of 1937, as amended, and if the maximum sum and the maximum period specified in such contract pursuant to said subsection 22 (b) shall not be less than the annual amount and the period for payment which are requisite to provide for the payment when due of all installments of principal and interest on such obligations * '* *. * * . * * -* * * R.-S. 5200. The total obligates to any national banking association1 of any person, copartnership, association, or corpo'ration shall at. ho time exccec 10 per centum of the amu/int of the capital stock of such association nctiuJ'v p^d in and uninipaired arid 10 per centum of it.-> unimpaired surplus fund. Tlio term "obligations" shall men i the direct liability of the maker or acceptor of paper discounted with or sold to such association and the liability Jf the indorscr, drawer, or guarantor who obtains a loan from or discounts paper -,ith or sells paper under his guaranty to such association and shall include in thi case uf obligations of.a copartnership or association the obligations of the scvVal members thereof and shall include in the case of obligations of a ci.rporat'jii all obligations of all subsidiaries thereof in which'such corporation owns c. controls a majority interest. Such limitation of 10 per centum shall be subject to the following exceptions; * * * * * * * (//)* Obligations of a local public agency (as defined in section 110 (h) of the Housing Act of 1040) or of a public housing agency (as defined in th* I'nitcd Stales Housing Act of 1937, as amende/!) which hare a maturity of not more than eighteen months shall not be subject under this section to. any limitation, if such obligations arc secured by^an agreement between Ihe obligor agency and the Housing, and Home Finance Administrator or the Public Housing Administration in which the agency agrees to borrow from the Administrator or Adminintralion, and the Administrator or Administration agrees to.lcnd to the agency, prior to the maturity of such obligations, moneys in an amnifhi which (together with any other moneys irrevocably committed
' ThbfliKvcllon v nit) I*-ftddn!to we. unoofihc VicYlil Statutes (we. M of lfllaI2nf the Vnllrd SIMM CoOr,lMf> trillion).

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HOUSIXG ACT X)F 1949

to. 'Ac payment of intention titeh obligations) will suffice to pa-i the. principal of tuck obligation* tcllh interest to 'maturity, irhich money* under the terms of said agreement are required to be used for tfiqt purpctc. THE GOVERNMENT CORPORATIONS ArrjRGrRi.vnox: ACT, 194S _. . * TITLE I * . t-

.*

FEIIEKAI. TUBUC HOUSING AUTIIO^ITT

Annual contributions: [* * * Provided further. That, no jwrt of this ap^ propriation shall be used 10 pjiy any public homing agency .any contribution occasioned by payments in lieu of-tsxcs.in c-vvss of t><c amount spccifii-d In the original contract between such accncv and the *-"edtral Public Housing Authority: * * * . ] * * * ' * ---*.._ * TJIE GOVERNMENT CORPORATIONS APPROPRIAT'OX Acjj 1949 TITLE j -i-

.*

runi.ic iioi-jiNG ADJIIXISYRATZON

Annual contributions: [* * * Provided ftrther, That no .part of this appropriation shall be usc'd to i>ay any public luusng agency any contribution occasioned by .payments in lieu of taxes in cxct>i of the amount specifiwi in the original contract between such apchcv and the VSiblic Housing Administration or ,ts prcdt-ccssor agencies: -*- *-- *.'J* * *- " " * * * * * TITLE TJ
HOI-SI.V: AND HOME FIVANCK AGENCY

Public Housing Administration: * * * Provided, That the number of officers and'employ ccs in classification grades 11 of-*.hc clerical, Administrative, and fiscal service, and 4 of the professional service, and higher grades shall not exceed 20 i>cr centum of the total r.iiinl>cr of officers and employees paid from such funds: * * *.J * * * * * * *'" * TITLE * THE HOUSINT. ACT OK 1948 * * * Btu.nixr. COOKS HESKAKCII * * liousixa

III [ST/IXIIARDIZBD

AX-> MATERIALS]

SRC. 301. Tlii; Housing and Home Finance Admin^trator [shall undertake] shall (a) iindcrliikf and comlnct a progrom trith raped to technical research and studies [tu duvclup and prun.otc the acceptance and application of J con mlh the (levejopment.,demonstration, and promotion of the acceptance and ap;.' ofnfw und improved'technique*, materials, and nMhwh ichich icill pcnyil;l. -_ reductions in housing construction and innuiUnance cosh, and stimulate C ;? and sustained fftxliiclior. of hoaxing, and concerned icith housing ceonot.i.. ,i..ti OQ~_:_ housing market data. Such .program waif lit concerned icjth improved >'~' ".^nilnrSizcd t-uilding cudca and regulations and mcthudn for the inure iinifor- > nd, iinistration then f, [and] standardized dimensions and inctl.o'ls for tlii- j^cinbly of homc-buildiiit; material? and [cquipniRiit.] cqiiipmerJ, improved residential dcsig't. and consjruition, nr.ic and improved tyjirj of housing components, building nt.tcriah and equipment, and methods of production, distribution, assembly, at>d construction, 'this proviso would IK-, rcpcnlrtl n) nt Inly 1. 1SI7. ' Till* |>ro\v<o wouM !w r/>nmlcil n of July 1,161*.

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~ -and 'oumf techniques f?r tht testing thereof and for the. determination of adequate performance standard*, i>nd may relate to appraisal, credit, and other housing market data, housing needs, duntind and supply, finance and investment, land coils, use- and proreinent, site planning and utilities, zoning and other lutes, aides, and regulations <i they apply to housing, other facicrs affecting the cost of housing, and related technical-ana economic research. Contracts may be made by the Administrator for technical research and-studles authorized by this subsection for work-to continue not.more ~ than four years from the date of any such contract. Xoticithstandingthe provisions of - section a of the Act of Jime 20, 1874, a* amended (SI U. S. C. 71S), any unexpended balance* of appropriations j-roptrly obligated by contracting >rith an organization as provided in thts siiliscction may remain upon the books-of the Treasury for not more, than five fiscal' i/cnrs before being earned to the surplus fund and corcred-into ihc, Treasury. All contracts made by the Administrator for technical research and studies authorized by this or any other Act shall contain-requirements making the results of such research or studies available to tht public through, dedication, assignment-to the Government, or such other means as the Administrator shall determine. The Administrator shtll disseminate- and without regard to the prorisionx of-39 United Slates Cede 331b, the results of such rcseare' and studies in SJich form as may be mosl lis\:ful to industry and to tkr. general public. (6) Prepare and submit to the President and to the Congress estimates of national urban and rural nonfarm 'housing needs and reports wilJi respect to the progress briny tnade^toward meeting such needs, and correlate and-rccommend proposals for such eieculire action or Icg-'slation as may be necessary ur desirable for the furtherance of the national housing obj.ctire and policy established by this Act, with respect to urban and rural nonfarm housing, together with such, other reports 01 information as miy be required of the Administrator by thc-Presidein or the Congress. (c) Encourage localities to make studies of their own housing needs and markets, along with surreys and plar^Jor housing, urban land use and related community development, anil protide, where ret/rested and needed by the localities, tcchi'ieal at'rlce and guidance in the making of such studies, surreys, and plans. SKC. 302. [In the performance of, and with respect to. the-functions, powers, and duties vested in him byj In carrying out research and studies under this title, the Uhiiinistrator .-Iial! ut ilizv, to the fullest extent feasible,,the available facilities of oilier departments, independent establishments, and agencies of the Federal {overiiinciit-, [and, nolyvithstanding any, other la\y, shall appoint a Director to adminlsler under his general supervision the provisions of this title.].and shall r6nf\ilt irith, and make rccomnicridslions to, such departments, independent establishments, and agencies with respect to such action as may be nceesaary and desirable to n wile t~ t.<iling t&px and deficiencies in available housing data or in the facililiis. arailable for the collection of such data. The Administrator is further authorised^ for the purposes of this title, to undertake research and studies toopcratircly with industry and labor, and with agencies of State or local gotcrnmrnls, and educational institutions and olhtr_ nonprofit organizations. For the pur'pose of entering into contrarts with any State or local public agency or instrumentality, or educational institution or oltier nonprofit agency or organization, in carrying out any research or studies authorized by this title, the Administrator may exercise any of the powers rtslcd in him by tctlion 502. (c) of the Housing Act of 1!).',S. SKC. 303: There are hereby authorized to.be appropriated such sums as may l>e ncccs.<ir.v to carry out the" purposes of this title. * ' * *

Thc-proposed Housing Act of 1949 would repeal section 503 o the Housing Act of 1948 and provide substitute language as section 506 of the Housing Act of 1949. Tlic change in language is indicated below.
SKC. [;>03J'o(W. Any low-rent or veterans' housing project undertaken or const rurte'l'iiTitier a program of a State or any political .subdivision thereof [aiyl w i t h the oppress purpose indicated in the Stalc'lcgi.ilation of converting the project to a project with Federal assistance (if and when sum Federal as>nstnncc becomes uvailabje),] shall'he approved as a low-rent housing project under the terms of the United States Housing Act of 1037, as amended, if (n) a contract for State financial assistance for siHi project was entered into on or after January I, W.',S, and prior to Jannnry 1, [19 JO] 1050, (\t\ tlic ])Tojcct is or can become eligible for a*si.tance by the Public Housing Administration in the form of loans and annual

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contribution:) under the provision;, of the United States Housing Act of 1937, as ah.ended, and (c) the State or the public housing agency operating the project ill the State makes application to the Public Housing Administration for Federal assistance for the project under the tenns of the United States Housing Act of 1937, as amended: -Provided, That loans inaae by the Public Housing Administra-* tion for the purpose of so converting .the project-to a: project VvithrPcdcral uisistance shall be deemed, for the purposes of the provisions of section 9 and other sections of the United States Housing Act of 1937, to be loans to assist the development of the project.

MINORITY REPORT
. Political ownership of human shelter is the mark of the beast. Nothing can bo more communistic. Those who live in.houses owned by the political authority are in the nature of things so completely beholden to it as to make them amenable to its dictation in respect of the selection of persons to, perform the duties of government. Willingly or not, this xight of franchise is impaired. If the pending measure, H. R. 4009, held out no hope to the power planners for more votes and greater political security, it would never have become a subject for congressional consideration. In 1938 the Administration boldly attempted to make an over-thecounter deal to purchase with United States Housing Authority funds the reelection of the incumbent Member of Congress from my district, the Eighth Ohio. I was serving as mayor of Marion, and it was generally known that I intended to run for Congress. Out of a clear sky, without even a hint from anyone that anything like it was brewing, Marion residents first learned about the:atterr ,ited deal on picking up their daily newspaper and reading large headlines that Marion was to receive a million dollars for so-called slum clearance and housing. Of course, to anyone having even an-elementary understanding of Washington politics the proposition was sun clear. I made a study of the United States Housing Act and its operations and imparted my findings to the citizens of Marion. Meanwhile the Washington forces moved in and began their insidious woi",< of propagandizing for public approval their vote-buying and power-f.rabbing scheme. Armed with the power of eminent domain, wli.ch thf Constitution *evcr intended to bo used for any such purpose as this, and guided only by their political interests, those forces, .hrcugh a handful of local hirelings, went into sections of Marion and staked off what they arbitrarily called slum areas. The local d'jily carried the news:
Slum survey of Marion filed with the State Boun.. Points brought out in discussing these data arc: Social diseases of varipvi..forms found in these areas; desirable tenants have gradually withdrawn from i'ie areas until a-low class of occupants have a.most destroyed the livability of he structures. Among the comments -made ir> the introduction,of the survey wnrc.that * * * persons arc living below decent levels in regard to sanitation and moral environment * * * A-low stan^i-d:of living; has been continuing for many years. * * * and will without a doubt continue to the detriment of the city and community in gcii?r^i unless action is taken.

I was thoroughly acquainted with flip sections designated "sknv areas." As a physician I had occasion to personally know many of the families Hving'in them. Some of them were poor and lacked facilities and conveniences that others enjoyed. The statement that "desirable tenants have gradually withdrawn from the aica until a low class of occupants have almost destroyed the livability of the structure," was not only a contemptible falsehood bu also libelous in the highest degree. 81

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HOUSING ACT OP 194.9

Qn the most populated street in one of the sections which were designated shun, areas, 55 percent of the families owned their homes free of debt. The areas arc very sparsely occupied. There '? no such thing as crowding in any sense. Maybe there were social diseases iu_ those areas. But according to my experience syphilis and gonorrhea* were no more prevclaut in those parts than in the other sections of Marion. How did UH> local stooges of the United States Housing Authority . find out that there were so.cial diseases in those areas''. A\ hen questioned on. that point they replied that their information was given them by the local board of health. That \yas a falsehood, because it so happened *hat I was president of the Marion City Board of Health at that time, of which the3" were not even aware when they made this slanderous'Attack, and i know that no one oil the board gave out any such information or was in a position to do so. "When the persons who were responsible for this vicious conduct were driven by a self-respi cling and righteously indignant people into a position of defense, their answer w,as, "We just followed instructions from \\ashinglon." Of course, Washington is the only source from which such evil work as this can -come. There was no.slum in Marion then and there is. n.one there now. I would to God that we. had in Washington the willingness to earn ax honest living "and the integrity that prevails in those sections in Marion Ohio, that were designated by the Federal housing bureaucracy as slum areas. TLf we had, the threat of communism that now so ominously stalks before us wculd not exist. I was hailed before the Ohio State Housing Board, not to cxplam my opposition to the scheme but to be told that as mayor of Marioa I had no authority in the matter. I \i as given to understand that the determination of the placing of these poiitica' liousing projects was no concern of any little mayor. That was a matter for the great United States Housing Authority, acting through the State Housing Authority, to decide. The upshot of it all was> no sale. The citizens of Mark n refused to sell their souls for a mess of political pottage. Marion was saved from oil'.-, of the worst political blights that ever struck any nation. The United States Housing Act of 1937, of which H.'R. 4009 is ina'mly an extension, is the most deceptive and dishonest piece of legislation on our statute books, and there are many dishonest and deceptive laws on them. The promoters of the scheme deliberately ive out the impression that these houses arc built for the people .vine in slum areas and the poorest people generally. Th..t is a falsehood of the first water. Mr. Thomas Danahey, at one time president of the Detroit Housing Coinmi^ioii, forthrightly and truly stated the facts. Ho said:
In the fir.it place, it must he inndc.clo.ir that they [tliu housing projects)'will nut bu runted to Mum rcniiluiila ur welfare clfciit*. The tenants in these buildings \\ill be people \\illi definite Miiniinuni income^ and to be eligible to move in they must proxe that their income* art ntcad\. There seem tu be an imprc^iun that the Mum residents are going to take over the building.s. Such is not the case. " i

I aitowcd in testimony given before the House Committee on Banking and Currency in 1939, as appears in the Congressional Record of July 24 of tliat year, page 13827, from data obtained from eight housing projects in New York, Texas, and Florida, the only such

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T -> _

8$
- -

dot ^ that I was able to obtain, although I requested the same from """" joiner local housing authorities, that only about 17 percent of families eligible for occupying the dwellings in those projects olilie lower third income group, and nearly all of them were tHe uppermost part of that group. rc than 80 percent of the families living in the above-indicated njrojects were from the middle income third, some even from the ' ~ J income third. information that I have been able to. obtain, it would appear the situation is more unfavorable to the lower third income p nowtnan it was at that time, In fact, ills generally knov/n by n,possessiori of the facts that so-called Federal low rent housing flilable only to persons of a substantial income, and that it is itejy not available to the really poor people. The arrangement definitely so planned. . fter all, there is more political gravy to be had from the housing JEj| group with a substantial income than there is from poorhouses. rvfhe United States Housing Act of 1937, together with the several |ttc laws creating so-called local housing authorities, could not >ibly have been devised by anyone who b.clicves in the American lition of freedom. Only alien-minded persons who adhere to tho rxian. philosophy could have done this. ake a look at the State laws pertaining to the subject. In subce they are all substantially alike and must have been written lio same hand. the local. housing authority is established, it becomes.a body arid politic" " over which the municipality loses much if of its authority. tion 1078-34-A, of Ohio General Code:
, chairman, and counsel of the housing authority shall perform of- the municipal council, mayor, and solicitor, respectively * * * "itiM&thc members of the housing authority shall, and arc hereby authorized, to exgrcisc and carry out all other powers, and duties conferred upon officers of muni' awu corporations by the laws providing for si.ch appropriation proceedings. " ,j'?.eclioh 1078-34: ; TA'n authority created under this .* ;t shall constitute, a body corporate and -'politic, * * * shall have the foliowing^powers in addition to others herein specifically granted: , ..- *tij To determine what areas constitute slum areas * * * and to prepare "$ns for housing projects in suclvareab, to purcTmse, lense, sell; exchange, transfer, l&sjgn, or mortgage any properly, real or ]>crsonnl, or uny interest therein, or ;V-ciJuirc the same by gift, bcqncsV, or eminent domain.

' . v Practically all the State laws, make the local housing authority a ^ ^ppdy corporate^and politic," so thai it becomes a distinct and inde' Ijandent municipality or political subdivision within a municipality : .i 63f a political subdivision. The Illinois law specifically provides
J- {'An authority shall be a municipal corporation and shall constitu.o a body bnth. "^spirporate and politic, exercising public and essential go\eminental functions.

/ ,t jTiuler the United States Rousing Act the. following agreement was ; *efitered into between the city and the local housing authority, that is '^between the city and the United States Housing Authority* which is il *-,t it really amounted to on final analysis.
^yiiocity agrees that, during the period commencing with i!ic date of . i of any part of the sile or files for each project and continuing throughout tho

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useful life of such project, it will not levj, impose, or charge-any tax< assessments, * * * survice fees, charges, or tolls against the p r < , against the authority, and v.ill furnish, \\itliuiit cost or charge to the autfi the tenants thereof, municipal sci vices and facilities for such project'jind tenants thereof, of the same character as those furnished without cost oJ?<ehi. for other dwellings and inhabitant,-, in the city, including but not limited', * * * fire, police, and health protection and services, street maintenc snow removal, garbage, traah, and ash collection and disposal, street lightin, public streets within any project and on the boundaries thereof, and sewer scryil that it will maintain in good repair and working order any and all inunii' utilities and facilities, provided by it for the use and benefit ot each project the tenants thereof, and that it will maintain in good repair, streets, roads, alleys which are within, adjacent, or lea'd'iig to the boundaries of.each projeci

Thus it will be seen that so-called Federal low-rent housing proj are foreign bodies, Communist plants, in the municipalities wli they are located aud simulate in a. marked degree cancerous grow in the human organism. Political ownership or control, these are tantamount to the s; thing, is the ultima ratio, the clinching force, for the sustcntatio communism. The extent of the development of communism in eountiy cau be measured by by determining tlip amount of polity control that is exercised over >ver te the provisioning provsionng 01 tbe matcrii financing constructions, etc., of houses and their disposition. Measured b> tVis yardstick it will be t>ecn that this native Ian ours is already far down the road of Marxism. Consider the cnormi part the political authority plays in the financing of the construe of new homes and the- power it has over such construction und o the disposition of such homes, .the power it has over rental dwelli; about 14,000,000 or approximately one-third of all the dwelling n in the United States, through rent control; the many so-called 1 rent housing projects already scattered over the Nation and m other political housing that has been and is being constructed. The passage of.II. R. 4009 will be a capital political victory over economic life, of the Xation, a sweeping advance on the part of power planners towarI their goal of-complete regimentation, Russj style. . ! The title of H. R. 4009~should 'be"A uai to further enslave I people of the United States." FREDERICK C. SMITH]
IfA&V. V*V * V AW J'A1V tfc. WA VV/A A * A I* A 11OX1A. **1 <M

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