Resettlement Administration will initiate and plan projects for low-cost housing communities in suburban areas adjacent to industrial centers.

The Tennessee Valley Authority constructs houses for workers although its activities in this field to date have been largely limited to providing for its own employees. It has built houses of a semipermanent character for its workers at Norris, Wheeler, and Pickwick Dams. In addition, it has planned, designed, and constructed on Government land, a complete town at Norris, Tenn. All houses constructed by the Authority are Government-owned and rented to workers on its projects. Special attention has been given to the problem of designing permanent single-family houses equipped with all modern improvements to rent at a low cost.

A similar independent agency of the Federal Government, but of smaller scope, operating only in the District of Columbia, is the Alley Dwelling Authority. Its purpose is essentially the rehabilitation of slum areas, these being defined by the act creating the Authority as squares that contain inhabited alleys. The Authority has power to purchase such squares and redevelop them or any portion of them for any use that is in accordance with the interest of the community. Thus it may redevelop not only for residential use, but for recreational, industrial, or commercial use. In the course of its operations it also is permitted by law to replat land, pave streets, and provide sewers, street lights, and other facilities. The new residences it constructs may be either high-cost or low-cost, but the Authority recognizes a moral responsibility to ensure that the families displaced by its operations shall be rehoused, although not necessarily on the site of the proposed redevelopment. The Authority, which has been functioning for less than a year, is engaged on 9 or 10 projects and has 20 projects on its active list.

To complete the list of Government agencies that construct houses, mention should be made of a number of Federal departments which construct or direct the construction of houses for the use of their employees or the special groups which it is their purpose to assist. The Construction Division of the Veterans' Administration builds and maintains homes for veterans throughout the United States. The Construction Division of the Quartermaster General's Office of the War Department has charge of the construction, maintenance, and operation of buildings and utilities connected with the Army. The Bureau of Yards and Docks, Navy Department, has charge of the design and construction of public works and public utilities of the naval shore establishment, including quarters for civilian, Navy, and Marine Corps personnel. The Bureau of Lighthouses of the Department of Commerce provides housing facilities for lighthouse keepers. The National Park Service, under the Department of the Interior, directs the construction of houses for its employees, and the Bureau of Indian Affairs, under the same Department, constructs and maintains buildings at its field units.

STATEMENT OF JOHN MOWBRAY, PRESIDENT, ROLAND PARK CO., BALTIMORE, MD.

The CHAIRMAN. Your full name?

Mr. MOWBRAY. John Mowbray.

The CHAIRMAN. Your residence is in Baltimore, Md.?

Mr. MOWBRAY. Yes.

The CHAIRMAN. What is your position?

Mr. MOWBRAY. President of the Roland Park Co.

The CHAIRMAN. How large a real estate development is that? Mr. MOWBRAY. That comprises in Baltimore, I would say, approximately a thousand acres of land, a little better than a thousand acres of land, on which we have built some 2,500 houses.

The CHAIRMAN. What class of houses have you built?

Mr. MOWBRAY. The development was started in 1894 as the first restricted development of its kind in the country. The houses at that time were $4,000 and $5,000, which today means they would be around $10,000 or $12,000. We build more expensive houses today.

We have some developments which range anywhere, on the present market, from $7,500 to $50,000.

The CHAIRMAN. Do you stipulate the minimum price of construction of homes when you sell lots?

Mr. MOWBRAY. We did originally, Senator. That plan, however, I think, has been abandoned. It is hard to establish a price. The plans are now approved by the architectural committee, which approves the plans from the aesthetic standpoint, as well as the general scheme and design. That is stated in the deed, and runs with the lot.

The CHAIRMAN. How many houses have you built on the tract? Mr. MOWBRAY. I would say about 2,500 houses all told. We have not built them all; we sold the land, but we did not build all the houses.

The CHAIRMAN. Mr. Mowbray, you have developed this property by selling the lot rather than by building the houses and selling the houses and lots, is that right?

Mr. MOWBRAY. Yes.

The CHAIRMAN. Have you had any Government aid in recent years?

Mr. MOWBRAY. No; except indirectly through the F. H. A. That would be the only way in which we have had aid. There have been no subsidies.

The CHAIRMAN. Have you had it or the people who built the homes?

Mr. MOWBRAY. The people who built the homes. We merely arrange for their financing.

The CHAIRMAN. We would be pleased to have your views on this bill.

Mr. MOWBRAY. I am also chairman of the National Society of Real Estate Boards, housing committee, and as such I tried to get the opinion of the members of this housing committee. They are scattered from the Pacific coast to the Atlantic, and generally all over the country. I asked the members as to their opinion as to this bill. The consensus of opinion seemed to be that there is no need for slum clearance as such that we in the East feel there is.

Mr. Nelson has already called your attention to the difference between slum and a blighted area. In our opinion, a slum is an area which does not have sufficient sanitation; it does not have the utilities that go along with city development. We know that there are many houses in the country which do not have facilities for sanitation; however, they have offset that with light, air, and other things which we feel desirable to get housing. So that the majority of our committee feel that the problem of slums applies to the East. The slums are located in the East, and when we examine our large cities here we find that they have all the sanitation requirements, but they lack light and air.

The main difficulty with the neighborhood is that it becomes blighted through the approach of business, or through undesirable tenants forcing the former residents out of the community. With that thought in mind the committee on housing of the real estate board tried to solve this problem through some legislative suggestions, and last August at our national convention in Atlantic City,

we approved what we call the Neighborhood Improvement and Development Act. That act, I do not believe, has yet been tried in any large city, but the thought back of it was that if we could put into a developed community which gives evidence of blight approaching the same kind of restrictions that a developer would put on a new piece of land on which he wanted to sell a house for residential purposes, we would protect that community from becoming blighted or a slum area. With that thought in mind we suggested this act, as I have said, which provides that any community in the city where 75 percent of the people, owners in that neighborhood, would petition the State or city authorities for an act, they could incorporate and through a board of trustees restrict the area and have the right of condemnation, right of taxation, under certain restrictions, and in that way get rid of the undesirable features in that community and protect the community from deterioration.

This has been done very successfully in Baltimore through what is known as the Mt. Royal Improvement Association. They have no legal standing, but they have been having a number of people grouped together and sufficiently strong to keep out approaching business. Those areas would be blighted today if those people were not unusually alert. If they had the benefit of legislation whereby they could force the minority, say 25 percent, to live up to restrictions, it would not have been as difficult a problem as it was, although they were successful anyway. We think such a plan would go a long way towards preventing blighted areas in the large cities. It also could be used in areas that are deteriorated past the point of just approaching the blight, where, through condemnation, a general plan having been worked out, and through the administration of local people, the area could be cleared and used for other purposes, whether it was for Government or private enterprise that eventually developed.

That is the thought we would like to leave with you, that there is a possibility of a private interest attacking this problem, which we think is largely local, and therefore they can handle the problem better than it can be done nationally.

The Senator asked the question of the last witness about a tax increase, about its effect. I would like to call your attention to a situation in Baltimore at the present time where the city has recently acquired some 2,500 houses through tax sales. They are all in what we call the blighted area. The average assessments have not been changed, and the increased taxes have absorbed the value of property in 3 years. They buy a piece of property that is absolutely worthless, and nothing can be done with it but tear it down. I think that is an interesting statement that I had not intended to make, but I think it will cover your point. Thank you.

STATEMENT OF J. C. NICHOLS, REAL ESTATE, KANSAS CITY, MO., AND KANSAS CITY, KANS.

The CHAIRMAN. Your full name?
Mr. NICHOLS. J. C. Nichols.
The CHAIRMAN. Your address?

Mr. NICHOLS. Kansas City, Mo.

The CHAIRMAN. Your business or occupation?

Mr. NICHOLS. Developing subdivisions and building houses. The CHAIRMAN. Do you develop subdivisions in Kansas City, Mo.? Mr. NICHOLS. Yes; both cities, Kansas City, Kans., and Kansas City, Mo.

The CHAIRMAN. What class of houses have you developed?

Mr. NICHOLS. Beginning in 1904, we built several hundred small houses, running around $750 to $1,000 and $1,250.

The CHAIRMAN. $750 homes?

Mr. NICHOLS. Yes. We started out building very small houses. The CHAIRMAN. That was what year?

Mr. NICHOLS. 1904.

The CHAIRMAN. How large were those houses?

Mr. NICHOLS. Three- and four-room houses.

The CHAIRMAN. How have they stood up?

Mr. NICHOLS. Some of them have stood up very well.
The CHAIRMAN. Are they still in existence?

Mr. NICHOLS. Yes, sir.

The CHAIRMAN. What would it cost to build the same houses now?

Mr. NICHOLS. Well, it would cost, I presume, double the amount. A part of that is caused by the change in the building code, in which respect, as Mr. Nelson pointed out, we have become archaic.

The CHAIRMAN. Do you claim that you could build a house of three or four rooms in Kansas City, Mo., or Kansas City, Kans., now for $1,500?

Mr. NICHOLS I stated that we started from $750 up to $1,250 and to $1,500. The three-room house I think was the smallest house that we built. I was going to explain that those houses were built before we had sewers in that section. They were not sanitary. Most of them now have complete improvements.

The CHAIRMAN. We had some witnesses here when we were taking this up last week who criticized the Federal Housing Administration for stating that they had worked out a type of home or a type of house construction that would cost $1,200 or thereabouts. It was a small house. We had Mr. Colean, of the Federal Housing Administration, who was working on the problem here before us, and he made a claim that it could be done. The house consisted of three rooms, one a living room, where the family cooked, ate, and lived, and two bedrooms and a small bathroom.

I was wondering whether you are still of the opinion that it is possible to build a livable, a fairly substantial livable house for $1,500 to $1,800, of three or four rooms.

Mr. NICHOLS. It is a little difficult to answer. There has been so much change in requirements. If you build an elaborate house with insulation material, and the other modern improvements, we will have a lesser maintenance cost in the course of years. The small houses that we built in the early days did not have any of those modern features, like the central heating plant, the bathroom; they were not insulated. If the things I just mentioned are put into the house that you have in mind, I think it would be very difficult to do it for the figure that you mentioned. At this time we build a great many larger houses.

The CHAIRMAN. And you also build small houses?
Mr. NICHOLS. Yes; we build small houses also.

The CHAIRMAN. You have built, I assume, from what you said, the larger and more expensive type of houses?

Mr. NICHOLS. Yes.

The CHAIRMAN. And you are still promoting the building of houses and the sale of them to home owners?

Mr. NICHOLS. Yes. I have nearly 100 under construction now. The CHAIRMAN. What is the price of these houses?

Mr. NICHOLS. The $5,000 house is the minimum house that we are building at this time.

The CHAIRMAN. For one tenant?

Mr. NICHOLS. Yes; single-family houses.

The CHAIRMAN. How many rooms?

Mr. NICHOLS. Those have two bedrooms, a bath, kitchen, and a separate living room. In many of them we put a play room and a recreation room in the basement. They have central heating plants, they are air condition, and so forth.

The CHAIRMAN. Do you figure in that $5,000 the cost of land? Mr. NICHOLS. No; I am figuring it without that. We are working on designs, Senator, that we hope to get a house that will run. around $3,000. We are making very careful studies to eliminate any unnecessary materials, like eliminating cornice lines, and save a great deal of expense on the type of front door, and things of that kind.

Our architect department built plans for the Government in Fourchette. We built in Montana around 22,000 houses.

The CHAIRMAN. Detached houses?

Mr. NICHOLS. Detached houses. We designed both kinds.

We feel that there is a good deal of simplification that can be brought about from a practical builder's standpoint to greatly reduce the cost of the construction of the house, the elimination of any unnecessary frills. Many of those had a combination kitchen and dining room, or a combination living room and dining room, where they can comfortably use the rooms.

Our National Association of Real Estate Boards has been making a very careful study, trying to get houses designed that would be adaptable to the needs of the small family, low-income group. They want so much equipment, new things, in the home that it is hard to keep up with the public demand.

The CHAIRMAN. What rent is obtained for these $5,000 houses?

Mr. NICHOLS. Well, we build our houses for sale. I do not know of anyone that is building houses for rent in our community now, although a great many of the people that move into these houses, the houses they formerly occupied do become rentable.

I was very much interested in your question on the sanitary situation. A great many people that we sell our small homes to, and a good many builders in Kansas City building homes today running around $3,000, or $3,300, it is a little further out, at the edge of the town, outside of the city, and many families moving into those small homes come from homes that are not completely sanitary homes. There have been many homes abandoned by people who move in a home that is a little larger, and those homes are put in a sanitary condition and it is meeting much of the need for low-cost houses.