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Chanute Field was removed from the unqualified category of critical in the Housing Report on Major USAF Bases.
Fort Benning, Ga., is another area which does not have rent control although it is a critical area under the Defense Housing Act. Located at Fort Benning is one of the Army's major bases with an admitted housing shortage. But the Army has been successful in resisting the efforts of the Rent Director in Washington to impose Federal rent control.
Why? Because the Army in Fort Benning is solving the problem of housing and rents through local cooperation. The Army appreciates that the imposition of Federal rent control may undo the progress it has made, through the substitution of Washington bureaucracy for the traditionally American way of solving local problems locally.
Fort Jackson, S. C., is another example of how the rent and housing problem is being met and solved locally. As a matter of fact, Fort Jackson was one of the areas cited by the Senate Military Preparedness Subcommittee as an outstanding example of local solution to the housing problem brought on by the impact of increased military activity upon a community.
Mr. Brown. Fort Benning, Ga., is one of the largest posts in the United States; is it not?
Mr. FITZGERALD. I think so.
Under the Defense Housing Act many areas have been designated as critical defense-housing areas and programing of housing for construction under FHA title IX and relaxed credit controls. However, the units programed have represented generally from one-third to onefourth of the actual needs of the military service concerned. The big problem has been how to make up the deficit. The services tell us that the principal source of these additional units must be conversions, wherein a property owner adds facilities to his property so as to accommodate a serviceman's family.
Yet the greatest deterrent to such conversions is Federal rent control--not only because Washington is going to tell the property owner what he and tenant may agree on as rent but also because Washington in effect warns the property owner that once the unit is rented occupancy is frozen and he will no longer have control over his own property, even after rental contracts have expired. Is it any wonder, then, that Federal rent control defeats its purposes and gradually, but inevitably, denies to those, who for occupational or economic reasons must rent, the opportunity of obtaining a suitable rental unit.
No one will dispute that we are living in a rapidly changing economy. Within 3 weeks after former Defense Mobilizer Wilson's February appeal to the Nation in a radio and television broadcast message on the subject “The Battle for Production,” some of the very things Mr. Wilson advocated and predicted were in complete reversal. Apparently the great productive machine of American industry had filled the pipelines to bulging. Reports were that requirements of the military would be considerably less than at first anticipated. Stockpiles of critical materials were needed in areas described as "distressed labor areas.” More than 600 religious, community, and municipal-building projects were given the green light by NPA. Restrictions on construction of homes, office buildings, factories, highways, and other
projects were eased by NPA. A batch of orders that were intended to be issued to control home construction was revoked.
This rapid change in events may well indicate that we are on the road to accomplishing our production schedules for the defense-mobilization program, with more critical materials available for housing construction and consumer goods than we had been led to believe would be available. Even as recent as last week NPA was making more materials available for nondefense uses. We urge that, rather than resorting to rent control these critical materials be used right now to alleviate what housing shortages may remain in our defense and military critical areas.
We respectfully point out that this production cannot be accomplished in an atmosphere of Government control and direction. We believe now, more than ever before, that the need for Federal rent control is over, even in the critical defense-housing areas as provided for in Public Law 96. Proof that local communities can handle their own problems better is evident in the examples we have citedChanute Air Force Base, Ill.; Fort Benning, Ga.; Fort Jackson, S. C. These are but a few of many which are meeting the problem head-on and with local cooperative efforts are eradicating its causes through conversions, new construction, and working together to make rental homes available.
Although we are of the firm conviction that inequities and maladministration are inherent in any rent-control law, we nevertheless feel that the committee should be apprised of at least a few facts on the Rent Director's stewardship of the Federal rent office.
For example, there is the question of the 20 percent automatic increase above June 30, 1947, rent levels which Congress granted last year. Despite the fact that this token adjustment was to be automatic upon application, the Rent Director proceeded to throw obstacles into its path. We are attaching to this statement the case history (exhibit E) of a property owner who would have been better off had the Congress never authorized a 20 percent increase. By the time the area rent director in Newark was through with him he was receiving less rent than before the Congress granted this intended relief. of the firm opinion that the shabby treatment of this property owner was arbitrary in the extreme and indicates how the rent act is shaped and twisted to suit the will of the rent director.
Time precludes our going into a detailed discussion of this case history, but it involves a unit on which for 10 years, with the agreement of owner and tenant, the rent was based on the owner not furnishing painting and decorating services. This was embodied in the 1942 registration of the dwelling certified by the area rent director. However, in 1951 at the apparent instigation of the original tenant, the area rent director retroactively nullified the original registration, announced that painting and decorating services should have been, included in the rent, notwithstanding the 1942 registration certificate and decreed that the rent should be reduced rather than raised. This is only one of a number of such cases that could be cited.
It is not difficult to understand how the area rent directors are inspired to administer the law in such a manner. Attached to this statement (exhibit F) is a summary of a meeting of area rent directors in Detroit, Mich., in February 1952, presided over by Rent Director Woods. This summary was prepared by the Georgia rent director
to guide his staff in administering the law. It is an understatement to say that the revelations in this summary of the Detroit meeting are shocking. Under Compliance on page 2, the staff is cautioned thusly:
Treble damages should be assessed against large or professional landlords.
Small landlords (expecially women) who do not follow an order may be assessed one and a half or double damages (the area rent director should use discretion on a case basis).
We must reluctantly conclude that one so unfortunate as to be a large property owner is not entitled to whatever fair treatment might flow from the mere exercise of the area rent director's discretion.
Again, under Compliance, paragraph 8 on page 2 (exhibit F) we have this rather astounding statement:
If Litigation will not accept a case because the landlord is entitled to the 20 percent and says the court will allow the 20 percent anyway, or thinks the case too weak on the self-help angle, it should be sent to them regardless.
I am sure the rent director, upon proper notice and belated deliberation, will come up with some excuse, lame as it may be. But there it is, in one short paragraph--the arrogance, the disdain for fair and equitable enforcement of the law, that runs through the entire administration of rent control. Again we must emphasize that it is not so much Mr. Woods' fault as it is the inherent inequality of treatment in the whole system of rent control that has made almost a mockery of rental property ownership in this country.
We have just touched upon some of the statements in exhibit F. We hope that some time soon you will ponder over the contents of this exhibit. If you do, we have little doubt that your decision will be to let this type of control expire once and for all time on June 30
It might also be well to point out to the committee how completely rent control is under the whip hand of the Washington rent office. The committee should know that the so-called rent advisory boards, lauded so much by the rent director in his testimony of May 5, instead of being advisory, in many instances have become subservient to the rent controllers. Shamefully little attention is directed to the wishes of the local community in the matter of certification for rent control, contrary to the general concept that the local communities will have an opportunity to be heard. These and a host of other factors have brought Federal rent control to the threshhold of permanence as a political and social weapon.
May we give you but one example of Washington's domination over a community. Rent Director Woods has claimed that the local rent advisory board not only had no knowledge of the certification as crittical and subsequent imposition of rent control upon the area until they read it in the newspapers, but vigorously opposed such certification.
It was not until Congressman William Ayres of Akron, Ohio, raised his voice in protest and threatened a congressional investigation that the true story of the certification of the Lorain County area for full Federal rent control came to light.
However, it took 3 months from the date of certification, October 30, 1951, until February 15, 1952, for the Federal officials to admit they had made a gross mistake in certifying Lorain as a critical area. Certification was withdrawn as recorded on page 1510 of the Federal
of this year.
Register dated February 16, 1952. Ironically, the decertification notice reads as follows:
Upon specific data * * * and on the basis of other information available the undersigned find that the conditions required
do not exist in the area designated as Lorain, Ohio (includes all of Lorain County), and the certification dated October 30, 1951, is hereby revoked.
In attempting to cover up his iron-glove treatment of the LorainElyria Rent Advisory Board, the Rent Control Director issued a special press release dated November 30, 1951, announcing postponement of the "application of full Federal rent control in the new LorainElyria critical defense area." Rents would have been rolled back to July 1, 1951.
The release is cleverly worded. It implies close contact with the rent advisory board. Mr. Woods said in the release:
I am glad to comply with this request. I want to be sure that when the Federal stabilization program does come into the county it will be adapted so far as humanly possible to the conditions prevalent in the area.
Mr. Chairman, Mr. Woods could have found out what the conditions in Lorain County actually were had he taken the trouble to consult with the rent advisory board, his “board of directors."
May we take a few moments to inject another note into this discussion, and that is the question of the constitutionality of Federal rent control. We are aware, of course, that the United States Supreme Court is the final arbiter in such questions, but no one will deny that the Congress is bound to legislate within the framework of the Constitution.
Today we have two types of Federal rent control. The first type is that which exists in the so-called defense-rental areas (the green areas on the attached map) which were designated as such under the Emergency Price Control Act of 1942. This type of rent control was brought into existence as an exercise of the war powers of the Congress. We do not dispute that during World War II this was valid exercise of such powers. This type of rent control was continued in the postwar years because the emergency conditions created by World War II were still evident.
The Supreme Court held in February 1948, more than 4 years ago, that this type of rent control was a valid exercise of the war powers (Woods v. Miller, 68 S. Ct. 421). World War II rent control applies only to units in existence prior to February 1, 1947. However, we are confident that a close examination of this World War II rent control now, in 1952, will reveal no basis whatsoever for its continued existence; and further, that the emergency housing conditions created in World War II to which the Supreme Court referred in the Miller case, are no longer in existence in these noncritical areas to the extent that control of these units is still a valid exercise of the war powers.
The mere fact, substantiated by the Bureau of Census in 1950, that the percentage increase in housing units since 1940 is greater than the percentage increase in population for the same period, is sufficient to remove the only basis on which the Supreme Court rested its 1948 decision in the Miller case: * * * that there has not yet (1948) been eliminated the deficit in housing which in considerable measure was caused by the heavy demobilization of veterans and by the cessation or reduction in residential construction during the period of hostilities.
We insist that there ought to be no hesitation on the part of the Congress to remove this vestige of World War II controls at this time.
Now as to the second type of rent control. Is the imposition of Federal rent control in the so-called critical defense housing areas a valid exercise of the war powers of the Congress? If it is not, then it is repugnant to the fifth amendment and is clearly deprivation of property without due process of law.
The Supreme Court has held repeatedly that a declaration of war is not essential to the exercise of the war powers, but that Congress may exercise the war powers for "defense in advance of war.” (U. S. v. 248.22 Acres of land, etc., 129 F. 2d 678, 63 S. Ct. 441). We do not take issue with this opinion, but we are strongly urged to sound a warning of the danger of extending and applying this doctrine to every nook and cranny of our economic life.
The United States has been engaged in a hostile operation in Korea for 22 months. Two Congresses, the Eighty-first and Eightysecond, have had the opportunity to jweigh dispassionately the implications of our involvement in the Far East, and neither has entertained seriously a declaration of war nor for that matter the waging of war itself. Hence it cannot be said that the war powers were invoked as a preliminary step to a declaration of war. On what basis, then, does the Congress persist in exercising its war powers without regard to the relationship of this exercise or its remoteness to the actuality of war?
Does the mere existence of another power, equally capable of waging war, provide this essential validity to the congressional exercise of the war powers?
This, then, and not Korea, is the basis for invoking the Constitutional war powers and the resultant deprivation of the rights guaranteed the people of the United States in the Fifth Amendment. The Congress by insisting on the continuation of this type of control, after 20 months of reflecting on our involvement in the Far East and abhorring a declaration of war, is adding fuel to a doctrine which ultimately would sound the death knell of Constitutional government, contractual and property rights, and the scrapping of the free competitive system which made this country great. For so long as any potential enemy exists, the Congress, unless it is more alert to its constitutional responsibilities, could continue to whittle away at a fundamental human right to own property until that system which we strive to overcome will have won a bloodless victory.
In closing, it might be well to consider Supreme Court Justice Jackson's separate and concurring opinion in the Miller case which upheld the rent control act in February 1948 as a then valid exercise of the World War II war powers:
No one will question that this power (war power) is the most dangerous one to free government in the whole catalog of powers. It usually is invoked in haste and excitement when calm legislative consideration of constitution limitation is difficult.
We are forced to ponder and reflect on this implied admonition to the Congress realizing that the war powers have been invoked during 22 months of calm deliberation which saw almost the entire Congress pitted against invoking the power to declare and wage war itself.