I plead that the word "authority" be not adopted as its title. In the first place it is a sly borrowing of another's cloak. The title word "authority" has character as exemplified by the joint Port of New York Authority, acting by treaty for two States as a selffinancing essentially economic public service. This body will have a heritage of inepitude and extravagance and a mandate for only uneconomic procedure. Call it Caliban. This bill provides exemption for all the staff from civil service; the body may fix all salaries, and in section 4 (d) you are asked to confirm any and all acts the preceding P. W. A. may have taken. This would give blanket approval for the Williamsburg and Harlem section projects in New York-the former at $2,240 a room and $7,886 a dwelling unit, the latter at $2,440 a room and $8,188 a unit, and for 10 others at over $6,000 a unit. This body is authorized to undertake direct relations with towns in derogation of the States' sovereignties. What a mess of Federal-grant pottage are the States asked to trade their heritage for? Whereas all of the rest of us are to be supertaxed, this body and all its instruments are to be freed from all taxation, present or to come, national, State, or local. Nevertheless, the local civil and criminal jurisdiction and responsibility are to be maintained as if the property and its tenants paid taxes. However, this housing body may make agreements with the States or their subdivisions to make payments in lieu of taxes. As there is nothing to prevent this body concentrating its ministrations and demonstration projects, the United States may become the guarantor and supplier of the entire revenue of supplicant cities, counties, and States. As the locality does the assessing, the doublenormal cost of Government housing might double such locality's revenue. This new body would have a right to fix the interest rates on its loans and modify them. It is freed from audit by the Comptroller General. It is given the right to have one man's home condemned and taken under the right of eminent domain for another man's use. In short, we have here a neat little puppet superstate endowed with a budget which would make pikers of all but the major powers. It is required to report to Congress once a year. The subsidies upon housing projects may surpass 145 percent by grants of capital value up to 45 percent and freedom from taxation, which is worth from 3 percent upward, and may easily be double that. However, 3 percent at compound interest amounts to 100 percent in a little over 20 years. The amortization may be spread over 60 years regardless of prudence as to the probable changes within that time, and interest on the remainder of the capital may be infinitesimal. Charging no interest may be equal to another 100 percent subsidy. This may seem like laughing gas for the beneficiaries, but when they wake up they may find all their teeth drawn. In fact, the common effect of an artificially low cost of living for a group, is to enable them to work for less and so become scabs. If anyone is unable to pay the rent for proper housing, this need, like any other of the dependent, should be cared for until cured by local relief adminis trators. Do not subsidize rent. Do not subsidize housing. It is futile. and stimulates waste in design and construction. The Federal Government controls money and credit. By such practical means and measures as the F. H. A., mutual insurance, or mortgages it can give stimulus to enterprise and lower the cost of building. In passing upon loans accepted by local financial institutions, it can give advice as to the plans. Thank you, Mr. Chairman. The CHAIRMAN. The committee will adjourn subject to call of the Chair. (Whereupon, at the hour of 12:05 p. m., the committee recessed subject to call of the chairman.) DAVID I. WALSH, BROOKLYN GARDEN APARTMENTS, INC., Senate Committee on Education and Labor. DEAR MR. WALSH: As a member of the housing section, Welfare Council of New York City, I wish to record my disapproval of the Wagner-Ellenbogan bills providing for a separate, permanent housing authority. My reasons for opposing the principle have been developed in an address before the Philadelphia Model Homes and Octavia Hill Association reprinted for class use at University of Pennsylvania, a copy of which has been filed with the committees of the Senate and House. As for the Wagner bill it is clumsy, confused, extravagant, futile, dabbling with irresponsible local bodies over the heads of the sovereign States. It will upset normal economic relationships by a heavy subsidy to a single fraction of the cost of living of a small part of the population. It will discourage individual effort and normal business. It flies in the face of our own and others' experience and runs counter to sounder economic measures, such as the Federal Housing Administration and Reconstruction Finance Corporation. Sincerely yours, WALTER KRUESI, Economic Consultant on Housing. (Address to the fortieth anniversary meeting of the Oxtavia Hill Association (Housing Management) and Philadelphia Model Homes Co., The Arts Club, Philadelphia, Jan. 30, 1936) WHITHER, HOUSING OF THE POOR? Walter Kruesi, University of Pennsylvania, 1903 This leads to a feel We frequently see references to "the" housing problem. ing that there is a solution. It seems to me that it is more realistic to look upon the matter as a condition which is very complex, constantly changing, but which will always require attention. The "Cheerful Cherub" says: "Life is never settled, It's free and unconfined- Is to have a limber mind." -R. McCann. Housing is, of course, the second primary need of man. It is the advancing organization of society, the division of labor and industrialism that has brought about an increase of indirect provision of housing. Housing represents about one-half of all real property and, again, about onehalf of this is represented by individually owned homes. Let us not overlook the threat to private property in homes by proposed socialization of housing. The instinct for home ownership is strong. It needs not so much encouragement as opportunity to function. A working man trained to do one minute subdivision of a mass production process is vulnerable to any change in the fortunes of his employer. An industrial worker is, to an increasing degree, unable to affect If he buys his own home, he the conditions of his own continuous employment. has hobbled his freedom to go where work is. He has difficulty in realizing on one of the most unliquid of investments. It seems to me the Social Security Act, the Old Age Security and Mothers' Aid Acts, as well as the National Reemployment Service change that picture materially. Under them it becomes more prudent for a workman to own his own home. These acts have more value for an industrial center than for other sections. Let us limit the discussion to the housing of the poor in the northeastern industrial and commercial area and let us think of the poor as families whose income is under $30 a week. The auto, bus, highway system, rural delivery, electrification, automatic heating and refrigeration, and water supply, not to speak of the telephone and radio, have created new conditions, affecting housing even of the poor. Housing with all of these amenities can now be spread ray-like, or by ribbon development, along all the highways. These mechanical advances have suddenly endowed country areas with new real-estate value. Whatever that value most of it came at the expense of central sections. City areas have transportation, schools, water supply and sewers, police and fire protection, organized recreation and amusement. Is it sensible to allow these to fall into disuse and discard while new blights are spread about? All this investment is social and should be protected against rot. The great advance of mechanica. facilities has created a disturbance of old values and requires stepping up of social invention and civic organization. The Philadelphia Housing Association has shown that large districts of the city have lost enough population so that they are now about where they were a century ago. Economists predict a long period of lower interest rates. If new housing can be built on cheap land along highways built and maintained by general government, with money borrowed at low rates, without commissions, for a large percentage of the whole cost, it will bring down values of the deserted sections. In subdividing raw land for housing about three-quarters of the cost is for roads, drainage, and grading. A realistic and prudent policy of real-estate management in the old sections would have prepared for such an event by amortization and writing down property values in the old sections. I believe that speculation in land values will be greatly reduced and that it should be practically out of the old sections. They should be considered not from what they once cost but on the basis of net income which can be achieved by good management for present use. Philadelphia people have held to the tradition of owning their own shelter. Among the 96 largest cities Philadelphia is the seventeenth, in the proportion of the residents owning their own homes. The next large city in this line is Detroit, the forty-fourth, while New York is the last of all. Your city has also clung more to the individual house as against the flat, or tenement, than New York or Boston. This, I believe, is partly due to the original character of the settlement, to a more completely English tradition and amalgamated population, to the city being a manufacturing rather than transit or commercial center, and to the milder climate. Whatever it is due to I believe it is a fine characteristic. What is the state of housing here? The real property inventory shows that you have 140 rooms per 100 people, while we in New York have but 104. We in New York have 7 people occupying each 6 rooms, while you have practically a room and one-half apiece. Part of my answer to the question in my title is that we should have a great renaissance of individual home ownership, e. g., it seems to me obviously desirable for city employees, professional, and business people, to own their own homes in communities where they are settled. This is easier for you to achieve because of the characteristics in your city. We in New York are handicapped by multiple dwellings and we are vastly handicapped with respect to rehabilitation of the old sections, by the obsolescence of type and minute subdivision. We have been conscious for 70 years of the need of new social mechanism with respect to the housing of people with small means. We have had the White houses which, after a long career of prosperity, are declining; the city and suburban homes which are progressive as a large housing estate; the Phipps homes which are owned by an accumulating and revolving fund; Lavenberg, which is a liquidating charity; the city housing which is in dire trouble, and the 14 enterprises under the State board of housing. All these represent an investment of about $65,000,000. After the war the city adopted a subsidy principle which cost us about $300,000,000 and about all we got out of it was the metropolitan housing. Now we have a new instrument called an authority which is intended to be a public-utility revolving fund, and latterly we have had the Public Works Administration. These two last-named public enterprises have proceeded far enough to convince me of the unique incapacity of a continental central government to design or construct local housing. They have not yet operated any, but the lesson of the war housing and the experience of foreign governments lead me to believe that its operation would be even less fortunate. Kahn says 10 percent less efficient on collections. I do not believe it is in the public interest, or a legal function of the Federal Government to supply housing to the civilian population. I believe that the money function and any public control of credit belong strictly to the Federal Government. It can place means at local disposal for financing housing on a lower cost basis than is otherwise possible. The Government may have a function to assist in this way. The cause of improved housing for people of small means was long and very unfortunately identified with slum clearance. Many people now understand that there are two problems which do not always overlap. A slum may exist where and even because that spot is entirely unsuited for housing, such a slum should be cleared regardless of what other use is to be made of its site. If, however, the site be proper for housing from a sanitary, hygienic, and civic point of view it may be quite unsuited because it is too valuable and its taxes and interest on its value would be too heavy a load on the number of rooms which could properly be built upon it. We need a similar clarification whether low-rent housing, be it public or quasipublic, should be mixed with relief or not. I hold that it should not. I hold that the dealer in food, or shelter, or clothing, or any other commodity has a full field in performing his own function and that questions of who, among those who claim to be in want, has or has not sufficient income are in a relief worker's field. Relief agencies should meet all questions of budget for necessities. I see no more reason why the landlord should give or be expected to give credit or free rent than the grocer free food or the shoe store free shoes. So with Government housing, it is one question whether governmental agencies ought to enter competition with the principal taxpayer by building, selling, or renting houses. It is another question whether if it does go into housing business it should be businesslike or mix rent discrimination in between prospective or actual tenants. I hold that the Federal Government has no legal or constitutional mandate for going into any State to supply housing to the public. I hold that States may be able to do this, though to do so is undemocratic and an impairment of home rule. I hold that municipalities can be empowered to go into this field by their creators, the States. I hold that it is essentially unwise for any governmental unit which owns and operates properties to rent to anyone for less than the market price. Any tenant otherwise satisfactory who cannot pay the rent should be put out unless the relief department will enable him to pay. I hold that it is clearly and exclusively as between governmental agencies-the business of the relief department to enable the dependent to obtain and pay for suitable shelter. When the Federal Government buys land and builds houses for the public, it is not allowed by law to pay taxes to the locality. Such taxes are commonly the principal source of revenue to pay the operating costs of the locality and sometimes even of the State. If any portion of the local property which is not used for the general public does not pay its share of the expense, that share must be assumed by the balance of privately used property. Similarly if this State should build houses for private residents it could not pay taxes to the locality and the taxes of the nonbenefited people would be raised to meet the share of this State property. It may be asked whether this would not be equally true if the city builds houses. The answer is threefold. First, the city assesses its own property and then abates taxes. It could, I believe, refrain from abating on such property as is used for individual's benefit. Second, it would be able entirely within its own power to charge enough rent to equal the abated taxes. Third, it is claimed by proponents of any Government housing that to provide better housing by public money will so improve the moral and hygienic circumstances of these residents over their condition in alternative privately provided shelter as to reduce social costs of delinquency and ill health. While this claim has not been proven and is vigorously denied by distinguished authorities, let it suffice at the moment to say that if the claim were provable, the benefit is local and so the action ought to be entirely at the expense of the com munity which created or permitted the adverse condition and obtains for itself the benefit of the improvement. Population is stabilizing. We may gain 10-20 percent. If we do, most of it I will be in industrial seaboard centers. But the units grow smaller and more numerous. So we need more and yet more smaller units, because of increasing longevity, because of the 5-year deficit in marriages, and the number of persons of marriageable age increases out of proportion to increase of population. This is accentuated in cities, for they attract the young people adventuring in new independence. The housing reserve, or tolerance surplus, must be 5 percent. Only vacancies above 5 percent in fit houses can be considered excess. In the next 10 years the number of families in the Philadelphia area should increase one-sixth.. You have a housing shortage of - A conservative estimate of your need will be (a year). 85,000 10, 000 15, 000 5, 500 10, 000 The Brookings survey showed that 33 percent of all urban and rural spending units had income-1929-under $1,135. Forty-three percent of all families of two or more had under $1,285, while half of these had but $826. In 1933 the financial surveys made by the real property inventory showed one-third of the families in 62 cities had under $625. Doubt the actuality of these figures, as we may, we must nevertheless, for want of better, use them as a gage of the economic housing of the poor. If we face the problem of housing the families of 1,200 incomes we should, it seems to me, assume they can pay $240 rent without heat and hot water, and $300 with it. I would regard twice the income as 'all the capital that could safely be put in their house provision. The matter of heat and hot-water supply is a matter of operation. We must buy a site and build for $2,400, or we must see what sort of existing property can be bought and conditioned within that sum. The price of land may determine how densely we must occupy it. We may have to choose between tiny houses or apartments in center or outlying. We may have to divide acreage into lots as small as 121⁄2 by 40, with provision for two 20-foot one-way streets. With 5-foot setback and 21-foot depth there would be 14 by 12% feet of garden space per house. This allows 471⁄2 square feet of garden and green space per person, assuming five to a household. Such housing is shown in Public Works Administration unit plan HD-41. It has 150 square feet total area more than my suggested minimum. The Public Works Administration unit plan HD-60 illustrates efficiency in elastic and varied room-size arrangements. That this is possible is indicated by advertisement of 6-room houses at $2,250, purchaseable with "complete monthly charges of $14” after 25 percent down payment. Now if that is possible speculatively at such a price it is conceivable that if the speculation is taken out and whatever simplification is sound be introduced, it can be done for a capital investment of $1,750 so as to be rentable for $15 a month and take care of families with $900 income, or less. How much less? That is bogie. Public Works Administration says $5,000 is bogie. The President calls for a bogie of $2,500. Philadelphia betters that and may better its own. The Public Works Administration has published a very useful book of unit plans. This is of service in its descriptions and cross-analyses of plans and its general advice as to conditions to be satisfied and considerations which ought to be made and in its glossary. One reason why its bogie is so high is that standards are so high and inflexible. As a yardstick for low cost multiple housing it may prove very valuable. Such a maximum use of land as has been described above (52.5 percent) is to be related to the costs of land and of construction, and the economic rental accepted as the goal. It is twice the "standard" setup by Public Works Administration. It produces a density of 60 dwellings and, say, 240 persons to an acre of site. The height of such buildings need not be over 17 feet from grade. The distances between fronts would be at least 40 feet and between rears at least 28 feet. Light, air, privacy, dignity, domesticity, independence, safety are all high. It is not ideal. It tends toward minimal practical achievements of sound housing for people of small means. From such housing tenants helped to thrifty and orderly living by agents of Octavia Hill could go on to ampler housing as their means and needs justify. Now the problem of acquiring ownership of a house is one of finance. If the finance of the site can remain fixed this problem can be reduced in its proportions |