portance the solution of which should not, in my opinion, be postponed. Our previous experience is evidence of the fact that if the required housing and community facilities are not available in the places and at the times they are needed, our production program can suffer serious and crippling delays.

The Office of Defense Mobilization participated in the discussions leading up to the President's legislative recommendations for defense housing and community facilities incorporated in S. 349 and, if it should be enacted, I would consider it my duty to maintain similar close coordination between operation of the mobilization program and administration of this bill. In my opinion, exercise of the authority provided by this bill must be keyed to the mobilization program and employed only where real need arises. The governing factor for its use and implementation must be a clear necessity and direct relationship to the defense

effort.

It is a source of considerable assurance to me that the first legislation considered by your committee after the Eighty-second Congress convened is legislation which bears so essential and important a relationship to the mobilization program. Enactment of this legislation at this time will prevent embarrassment to this effort and avoid the necessity for forced decisions and hasty action at a later date.

Sincerely yours,

The CHAIRMAN. You may proceed, Mr. Green.

CHARLES E. WILSON.

STATEMENT OF WILLIAM GREEN, PRESIDENT, AMERICAN FEDERATION OF LABOR, ACCOMPANIED BY BERT SEIDMAN OF THE RESEARCH STAFF

Mr. GREEN. Honorable members of the Banking and Currency Committee, I am glad to appear here today to testify on the defense housing bill (S. 349) which you are now considering.

As you know, the American Federation of Labor has for many years supported every effort to improve the housing conditions of the American people. We consider good housing to be a fundamental part of the heritage which every American family has the right to enjoy.

The problem of providing adequate housing becomes especially critical when it becomes a major factor, as it is today, in effectively meeting requirements of defense production. With this consideration in mind, the executive council of the American Federation of Labor, at its recent midwinter meeting, unanimously adopted a Statement of Defense Housing Policy as one of the first items on its agenda. I am attaching the full text of that statement. At this time, I wish only to summarize the following major points in that statement.

The CHAIRMAN. Without objection, the statement will be printed. (The statement referred to follows:)

STATEMENT OF DEFENSE HOUSING POLICY ADOPTED UNANIMOUSLY BY EXECUTIVE COUNCIL, A. F. OF L.

Despite the relatively large volume of residential construction in 1950, we have entered this period of defense mobilization with an acute housing shortage. It is, therefore, extremely important that this country maintain as large a homebuilding program as the present emergency will permit. In this crucial period when our housing shortage will become more acute, we must take the additional step of making certain that whatever housing is built is utilized to meet the Nation's most acute housing needs.

It is, of course, true that the mobilization program will affect construction of new homes as it will affect all other aspects of American life. In devising an effective mobilization housing program, a prime consideration must be the relation of housing to the entire construction industry. The construction industry must be viewed in its entirety, with its manpower and material resources being devoted only to essential military and civilian activities.

We recognize that some cut-backs for both nonresidential and residential construction will probably be necessary. However, these should be so applied that they will have the least possible disturbing effect on the present organization of the industry. In particuar, we are concerned lest restrictions applied to building construction lead to extensive periods of unemployment for building trades: workers. We urge that the availability of building trades workers should be considered an important criterion in determining whether or not certain types: of construction are undertaken. Where a relatively large number of building trades workers is available, a particular construction project serving a useful defense or civilian purpose should certainly not be prohibited unless it requires excessive amounts of strategic materials needed alsewhere in the defense effort. Unfortunately, the policies of the Federal Government developed since the Korean outbreak have not been following these principles. Although various controls have been applied to both residential and nonresidential construction, no attempt has been made to work out a rational over-all program for the entire construction industry. Instead, on the basis of very little information, Government officials decided that the country's housing program must be cut to 800,000850,000 units in 1951.

Many of the particular steps taken by the Federal Government since the Korean outbreak have been ill-advised. The low-rent public housing program which Congress established only a year and a half ago in order to provide decent. homes for our worst-housed families has been cut to less than half its authorized! level. This cutback in the public-housing program has been particularly in-defensible in view of the fact that there have been no effective limitations placed on luxury housing or, until very recently, on most types of nonessential nonresidential construction.

What is needed, instead of these moves of desperation, is a thorough analysis and program for the construction industry as a whole. In the light of our defense needs, decisions must be reached making certain that all essential requirements are met before nonessential building of any type is permitted. This will, of course, require the institution of an effective priorities and allocation program which, by eliminating luxury housing and nonessential nonresidential construction, will insure that the materials and manpower available for the construction industry will actually be used to satisfy our most imperative defense and civilian requirements.

It remains to be seen how the recent Government order restricting nonessential nonresidential construction will be administered. To be successful, administration of these restrictions must take into account the actual supply of construction materials and the availability of building trades workers at specific times: and locations.

We strongly urge that the unions of building trades be consulted in drawing up policies affecting the construction industry and that representatives of these unions participate in the administration of the Government's residential and nonresidential construction programs. Only in this way can the building trades unions' intimate knowledge of the material and manpower resources of the construction industry be utilized to the maximum advantage during the present emergency.

PUBLIC HOUSING

The Housing Act of 1949 authorized an average yearly construction of about 135,000 low-rent public-housing units for low-income families. If we are to have an over-all volume of housing of 850,000 units in 1951-or indeed whatever conceivable volume of housing we can maintain short of all-out war-we see no reason whatsoever for limiting the construction of low-rent public housing units below the amount authorized by Congress. Since the need for housing is obviously greater among the families served by the public-housing program tham among any other group in our population, we urge that the public-housing program continue as scheduled.

In carrying out this public-housing program, we urge that projects be located, insofar as possible, on vacant sites so that existing housing will not have to be demolished in order for these projects to be constructed. In that way, each unit of low-rent public housing constructed will represent an actual addition to our limited housing supply.

DEFENSE HOUSING

In order to make sure that defense workers and their families are adequately housed, we must undertake immediately a large-scale defense-housing program: The planning of this program must be dovetailed completely with our industrial expansion program.

At all costs we must avoid the mistakes that were made in the war-housing program of World War II. Adequate housing for defense workers must be available at the time that new defense plants begin operations. This means that land for defense-housing projects should be secured at the same time as the land for the plant is obtained and the defense housing projects, as well as necessary utilities and community facilities, should be constructed while the plants are being built.

We urge that the defense-housing program be composed primarily of permanent-type units suitable for normal family life. The sad experience of World War II has taught us that the construction of makeshift temporary housing units, trailer camps, and the like represents only a false type of economy.

Another lesson learned from World War II is that defense workers must not be forced to buy jerry-built houses at inflated prices simply because there is a shortage of decent rental accommodations in defense production centers. It is to be expected that many workers will be recruited into areas in which they do not expect to become permanent residents. Emphasis must, therefore, be placed on the construction of rental housing, particularly in those areas which may be largely demobilized after the emergency is over.

Furthermore, the rental units built in defense centers must be available to the workers there at rents they can afford to pay. Insofar as possible, these houses should be built by private builders.

We believe that any public defense housing projects should be operated by local housing authorities wherever they exist. These authorities have already had the experience of operating the World War II war housing projects as well as peacetime low-rent public housing. They can certainly be entrusted with the responsibility of handling our new defense housing program.

Many of the objectives of the recently introduced defense housing bill seem to be worth while. However, it does not provide sufficient assurance that the housing built in defense areas will meet either the needs or the pocketbooks of most defense workers' families.

CREDIT REGULATIONS

In addition to the cut-backs in housing construction for our lowest-income families, the Government's housing policy has made it all but impossible for most middle-income families to obtain any new housing. On October 12 the Housing and Home Finance Agency and the Federal Reserve Board jointly issued credit regulations (Regulation X) sharply raising the down-payment requirements for low-priced homes. Under these restrictions the average worker's family, without large accumulated savings, finds itself unable to purchase a new house. Yet, by and large, it is these middle-income families whose housing needs are second only to the families in the lowest-income groups.

When Regulation X was issued, William Green, president of the American Federation of Labor, warned that its effect would be to "cut off low- and middleincome families from the opportunity to purchase new homes."

Experience since the issuance of Regulation X fully bears out President Green's warning. Available figures indicate that there has been a decided shift toward higher-priced homes since Regulation X came into effect. Thus, applications for FHA mortgage insurance on new homes indicate that whereas before Regulation X the mortgage amount was more than $9,500 on 20 to 25 percent of all units, since Regulation X went into effect this has increased to 30 to 40 percent. Since under the new regulations the same mortgage amount actually means a higher price, the shift to the higher-priced houses has been even greater than these figures indicate at first glance. A similar trend is also apparent on VA-guaranteed homes.

ADMINISTRATION OF THE DEFENSE HOUSING PROGRAM

Responsibility for coordinating our entire housing program rests with the Housing and Home Finance Agency. The AFL has criticized the way in which this Agency has discharged its responsibility to meet our Nation's housing requirements during peacetime. We have felt that far too little attention has been paid to providing housing for those with the greatest need. This has been inexcusable in the past but would be utterly indefensible during the critical period which now faces us.

In particular we urge the Administrator of the Housing and Home Finance Agency to exercise a much closer supervision than heretofore over the Federal Housing Administration. For too long the FHA has been tied far too closely

to the interests of speculative builders while it has merely paid lip service to the needs of the families who are the consumers of housing.

The existing Public Housing Administration rather than some new defense housing agency should be given the responsibility for coordinating the new middle-income defense housing program. PHA has had experience both with war housing during World War II and with the low-rent public housing program. It knows how to work with the local housing authorities which should be entrusted with the operation of the defense housing projects. Setting up a new defense housing agency would mean that the local housing authorities would have to conform to the requirements of two different Federal agencies. This would inevitably result in inefficiency, confusion, and delay.

However, we recognize that PHA as it is now constituted has neither the organization nor the personnel to do this job. Therefore we urge that PHA be strengthened and overhauled so that it can effectively handle both the existing low-rent public housing program and the middle-income defense housing program.

RENT CONTROL

With the prospect of curtailed construction of new houses, we must expect to place primary reliance for an indefinite period on our existing housing supply. If we had been able to keep up housing construction at a high rate, we could have expected to gradually remove rent controls. However, that is not possible now, and the rent-control program therefore becomes even more important than it has been during the past few years.

In order to extend and strengthen the rent control program, we urge the following steps:

(1) The rent-control program should be put on a for-the-duration basis. If we were to extend rent control once more for only a short period, it would make it extremely difficult to operate the program on an efficient basis.

(2) The Housing Expeditor should be authorized to impose rent controls in any area where the limited supply of rental accommodations threatens to bring about a general increase in rents.

(3) If it becomes necessary, the Housing Expediter should have the right to control rents of all dwellings built since 1947 now free from control.

LOS ANGELES CENTRAL LABOR COUNCIL,

Los Angeles, Calif.

The Los Angeles housing situation is critical now and will apparently be acute by December 1951. In October of 1950 a survey made by a responsible and conservative source for the real-estate and financing industry showed a vacancy of single dwellings in Los Angles County of 1.6 percent and a vacancy in multiple dwellings of 1.56 percent. This compares with the 1940 vacancy factor, at a time when the defense industry was expanding rapidly, of 4.8 percent.

The Los Angeles City Housing Authority has 2,500 applications for occupancy on file, and the requests are increasing rapidly. At Fort MacArthur some 3,000 military families are expected. The turn-over in the veterans emergency housing Quonset-hut type in the San Fernando Valley has been cut in half; and the Basilone Homes project, a converted barracks type of housing, is suddenly experiencing a very low turn-over in occupancy.

A survey of the real-estate home-building industry indicates that practically all new housing in the area is already sold.

It is estimated that 224,250 essential in-migrants for selected war industries within the county will require conservatively 112,125 additional houses by the end of 1951, assuming 2 workers for every house. This gives no allowance for increased military personnel to be stationed in the area, no allowance for shipbuilding needs, for any increase in Government civilian workers, for transportation workers, for miscellaneous employment outside the selected industries, or for the normal increased needs of other persons in the area.

The estimate of 224,250 persons is based on the projected increased employment in the chemical, petroleum, rubber, electrical machinery, aircraft and parts, and primary and fabricated metals, and the United States naval shipyards. Automotive, shipbuilding, and other employment which showed increases in the last war are not included in these figures, since a conservative estimate of the 1951 increase in employment is not available. Less than 5 percent of the labor

force in the Los Angeles area is unemployed, and much of this unemployment is due to the seasonal decline in the agricultural field labor and the related canning and packing industry.

It is roughly estimated that one-third of the housing should have a gross monthly rental of $40 to $50; one-third, rents of $50 to $60; and the other third should rent for not more than $80. These figures are based on the average weekly earnings by occupation within the industries requiring increased employment. Rental housing is the most urgent need.

The rapid growth within the area and the experience of the past war indicates that temporary housing should not be built in this area. Unit sizes should be larger, with at least two-thirds of the 1951 production in units with three or more bedrooms.

The public construction of new war housing will be needed in some special circumstances: (1) Where sites are not available to private builders, (2) for agricultural workers, (3) for military families of lower-grade military persons, (4) at remote sites in the county where private housing is not appropriate, (5) for the lower-income and minority groups in-migrants.

There appears to be no strong evidence for any need for dormitories.

tion we recommend:

(1) Stabilization of rents.

(2) Ban on luxury housing.

In addi

(3) Priority aid for low-rent public housing on vacant sites to house low-income and minority-group defense workers.

(4) Civilian construction and management of any housing built for families of military personnel.

(5) Federal funds for planning emergency evacuation type housing.

(6) That the NPA should keep the trailer industry at current levels and should provide for its expansion as needed to provide housing for mobile construction and defense workers.

Sincerely and fraternally,

W. J. BASSETT, Secretary.

BIRMINGHAM FEDERATION OF LABOR,

Birmingham 1, Ala.

The information you requested regarding housing needs in Birmingham has been gathered from a survey recently completed here and is as follows: Estimate of housing needs for Birmingham, Ala.: 34,000 units (39 percent white; 61 percent Negro).

Will additional housing be necessary to handle contemplated increase in defense workers? Five thousand to seven thousand units.

Type of housing needed and rents required to fit needs of defense workers: Permanent type only desired; rents in range of between $35 to $45 or $50.

Other information pertaining to defense housing: Only permanent-type housing sought for this area; in the long run it is far less expensive to the Government and there is a definite need for more housing units for citizens of this community, which, as you know, is a vital industrial center. There are many substandard housing facilities which can and should be replaced, even though the Birmingham Housing Authority now has four housing projects here just a scratch on the surface. We sincerely hope Congress will consider needs of this area. Fraternally yours,

TED WILLIAMS, Secretary.

WICHITA TRADES AND LABOR ASSEMBLY,
Wichita, Kans.

Housing situation very tight at the present time. While private capital is engaged in construction of rental units, the influx of workers seeking employment in the aircraft industry is causing an immediate demand which is not being fully met. The rapidity of increasing employment for defense contracts will determine further shortages. It is our feeling that the immediate demand for housing will remain critical for an extended period of time considering present conditions.

If employment conditions continue to increase in the aircraft industry, as now contemplated, additional rental units will be needed.