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Mr. WILLIAMSON. Yes, sir; there are a considerable number of areas where the local people have been permitted to help solve that problem of rent gouging and a housing shortage by working closely with the military and naval authorities.

I think in some of the areas rent control was imposed prematurely, when the local people were actually at work on some program to keep rents down. I cite Norfolk, for example. They had a defense housing steering committee and they were working closely with the Navy, following the Fort Jackson plan, to keep rents down and to stimulate conversions and so forth. I think on almost the same day that the Fort Jackson plan was launched, rent control was imposed without the people in the community that were working on that project being apprized that it was even imminent.

Mr. Cole. I am frankly surprised that any military commander would say that he does not need rent control. So your statement here is most interesting. I was wondering if that will continue after this is announced publicly. Is this the first time it has been announced publicly?

Mr. WILLIAMSON. No, I would like, with the Chairman's permission, to insert in the record a newspaper clipping which appeared in the Chanute Field area on this subject.

It is significant that the Air Force went along with the Chanute Field command and did not recommend that rent control be imposed, and the situation has now improved, and very probably Chanute Field, in the very near future, will be completely in the black as far as housing is concerned.

Here is one clipping, and I quote. The newspaper quotes the general:

“Rent control won't solve anything,” he asserted. "Price has nothing to do with it. Rent control infers that pigpens are fit for humans to live in. I don't want Air Force men living in them at any price. The only way to whip bad living conditions is to build more decent houses.

"I say, 'Let controls alone.' We'll always have controls if we perpetuate the problem instead of solving it. I think we're proving at Chanute that the problem can be solved. If the community will work with us, I know it can be solved."

What happened at Chanute Field was this: some enterprising man had taken some crates that were around Chanute Field-I think they originally contained the old World War I Jerry plane. He took these crates just outside Chanute Field and built a little project of about 40 units. They were practically nothing. They piled crate on top of crate and cut doors and windows in them.

Now there were approximately 40 servicemen that lived in those crates, right off the base, and the commanding general did not want to declare them out of bounds because he did not have any place to put his people.

But he said that as soon as a unit was completed, he would take an individual and move him in the unit, and then he would declare that unit out of bounds. He said that the only way he could do it was to keep rent control away from there, because all rent control did was roll the rent back to maybe $20 or $25 a month, and then he would have a hard time getting the man to go in a standard unit at $67.50. So rent control would just make it more difficult to get the people out of that substandard housing.

Mr. BETTS. What was the date of the general's statement, there?

Mr. WILLIAMSON. August 22, 1951. The newspaper was the News Gazette of Champaign-Urbana, Ill.

Mr. McDonough. What is the situation at that camp?
Mr. WILLIAMSON. It is improved considerably.
Mr. McDoNOUGH. Are those crates entirely abandoned now?

Mr. WILLIAMSON. I have not had a recent report, but as the other units are completed they are vacating those shacks. I do not know whether they are all vacated or not. The recent improvement of the area is dated May 6, the official notification of the area's improvement, so they must have made considerable progress since then.

Mr. BROWN (presiding). The clipping may be inserted in the record. (The clipping referred to is as follows:)

[From the Champaign-Urbana News-Gazette, August 22, 1951)

New CHANUTE HOUSING BETTER SLUM DETERRENT Than RENT CURBS: GATES

A renewal of rent control in Champaign-Urbana would perpetuate rather than solve Chanute Air Base's housing problems., Brig. Gen. B. E. Gates declared Wednesday.

“Decent places in which families can live like humans" can be provided only by the base and the civilian community working "hand-in-hand” for improvement, he asserted.

"Chanute is doing its part by providing good homes for another 800 families on the base," he said. "I hope the community will do as well."

General Gates expressed belief that Chanute's new housing facilities and policies will spur similar civilian improvements by "killing the market for substandard housing.”

With 800 families moving onto the base soon there will be no need for Chanute men to live in "pigstys and hovels,” he declared. He added, "Before we permit them to live there again, we'll put trailers on the base.”

Chanute's military strength now is about 17,500. About 2,400 of the men are married. When all of the 800 new units are occupied, about half of the married men will be housed on the base.

Most of those housed on the base will be members of the permanent party. Most of the married students in the Chanute technical schools will still require housing in the community. General Gates predicted local landlords will be "good enough businessmen” to provide the improved quarters that will be demanded when the 800 removals are reflected in the housing market.

General Gates was putting the finishing touches to the base's new housing policy when his attention was called to a Chicago newspaper's illustrated report that Chanute men were living in “pigstys, hovels, and dungeons.” The newspaper referred to Chanute as a “black hole" and suggested that action could be taken only by designating Champaign-Urbana-Rantoul as a "critical defense area." This presumably would mean that rent control would be imposed again in Champaign-Urbana and continued indefinitely in Rantoul. The Chicago paper made only a passing reference to the 800 new units that are nearing completion.

“Rent control won't solve anything," he asserted. “Price has nothing to do with it. Rent control infers that pigpens are fit for humans to live in. I don't want air force men living in them at any price. The only way to whip bad living conditions is to build more decent houses.

"I say, 'Let controls alone. We'll always have controls if we perpetuate the problem instead of solving it, I think we're proving at Chanute that the problem can be solved. If the community will work with us, I know it can be solved.”

Mr. COLE. I have one other comment. I have been impressed with the possibility of permanent rent control, and the manner in which rent-control legislation is handled by the Congress now indicates to me that that possibility is more and more to the point.

If you will recall, we used to consider rent control as a separate piece of legislation, and people would come in to testify and we had considerable discussion about it. Now it is a part of this great Defense Production Act, tacked on to the tail end of it, so to speak,

figuratively. My colleague, Mr. McDonough, will remember very well what happened in the House last time when we wanted to debate rent control a little bit. We were cut off. I believe we had no debate on it, did we? Maybe 2 or 3 minutes apiece, perhaps, and then amendments were submitted without any debate.

The thing that disturbs me is that we now have a small minority of the units, let us say, under control. We have certain critical areas, so-called, under control, and we have other small areas, speaking geographically, with not too much in the way of population control

. So we have a minority group here, really interested in the problem. I am greatly concerned about whether or not the real issue can be properly presented to Congress.

Mr. WILLIAMSON. I think it is safe to conclude that rent control bears little relation to its original statutory purpose.

Mr. COLE. I am sure of that.

Mr. Williamson. Take a community like Minneapolis, that has not sustained any great impact under the defense program. Its population has increased 18 percent since 1940, and its housing accommodations--and these are not dilapidated, these are housing accommodations available-have increased by 30 percent.

Pittsburgh, the other city that we cited, the population has increased 6 percent, and housing has increased 15 percent.

And here is what has happened in Pittsburgh. The little suburb of Wilkinsburg, right outside of Pittsburgh, decontrolled by local action.

Well, the CIO in Pittsburgh-and the papers have been full of it-were so incensed at the fact that Wilkinsburg had seen fit to decontrol itself, that they are now trying to get back at Wilkinsburg and the only way they can do it is by having the whole area of Pittsburgh, including Wilkinsburg, certified as a critical defense housing area. They cannot meet the criterion of a substantial in-migration, which is one criterion that I am sure they would like to see removed. But the monthly labor survey reports of the Pittsburgh area, based on February information, showed that there is a moderate unemployment in Pittsburgh, which therefore rebuts any finding that they might make that there is a substantial in-migration.

Well, there was so much agitation on Pittsburgh, that the Department of Labor has ordered a special survey to see if they might come up with that substantial in-migration. They already have a regular monthly survey, but they had to conduct a special one to try to come up with this answer, but I do not see how they can, if they have moderate unemployment.

However, this gives you an example of how the whole purpose of rent control has been distorted.

Mr. COLE. That is all, Mr. Chairman.

Mr. Brown (presiding). Do any other members desire to interrogate the witness?

If not, you may stand aside. We are very glad to have your testimony.

Mr. FITZGERALD. Thank you, Mr. Chairman.
Mr. BROWN (presiding). The clerk will call the next witness.

The CLERK. Mr. Henry DuLaurance, National Apartment Owners' Association.

STATEMENT OF HENRY DULAURANCE, NATIONAL APARTMENT

OWNERS' ASSOCIATION

Mr. DuLAURANCE. Mr. Chairman, and members of the Committee on Banking and Currency.

Before 1 begin, I would like to have Form D-106 inserted in the record.

Mr. BROWN (presiding). That may be inserted. (The document above referred to is as follows:)

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For each building for which rent increases are requested, file two (2) copies of this petition with the Area Rent Office. be required to support the figures in this petition by submitting your books, records, receipts, or Federal Income Tax Return

You may

A. "TEST YEAR":

In order to determine the amount of certain expense and income items to be shown on this petition, you must select a "test year." The "test year" you select must be the most recent full calendar or fiscal year, or any twelve consecutive months ending not more than 90 days before the date of filing this petition,

THE "Tz8T YRAR" I HAVE SELECTED ENDED

(Montb)

(Day)

(Year)

ANNUAL EXPENSE

$

B. EXPENSES (except Repairs and Replacements):
1. HEATING FUEL USED IN TEST YEAR.-Enter only if heat is supplied to the tenants by the landlord,

without sharing the bills.
2. UTILITIES USED IN TEST YEAR.--Enter only if utilities are supplied to the tenants by the landlord,

without sharing the billa, 3. PAY ROLL DURING THE TEST YEAR.--Do not include any salary for the owner or for corporate officers,

por any labor cost for repairs and replacements. 4. JANITORIAL MATERIALS USED IN TEST YEAR.--Do not include materials for repairs and replace

benta. 5. REAL ESTATE TAXES.- This is the amount of all real estate taxes (exclusive of penalties and overdue

taxes for other years) shown on your latest tax bill. If taxes have increased since you received your latest biļi you may attach a signed statement from your tax official showing the assessment and tax

rate now in effect for the building. and enter your taxes on this new basis. 6. INSURANCE.-Divide the cost of each policy that is in effect on the date the petition is filed by the pum

ber of years that it covers, to obtain the annual expense. 1. INTERIOR PAINTING AND DECORATING.-Add the expenses for interior painting and decorating in

the teat year and the two preceding years, and divide the total by three (3) to obtain the annual expense. & DEPRECIATION.- Enter the depreciation figure shown on your last Federal Income Tax Return.

NOTE. --The amount of depreciation which will be allowed is the lesser of the following: (a) the amount shown on your tax return, or (b) 21% of the present annual income for buildings containing

one to four units, or 16% of the present annual income for buildings containing five or more units. 9. MISCELLANEOUS EXPENSES IN TEST YEAR.- This may include management fees actually paid.

Show specifically the nature and amount of each miscellaneous expense.

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NOTE: If you want to show an increase in pay roll or utilities which was not in effect during the entire test year, file Form D-100 in addition to this form.

EXPENSES POR REPAIRS AND REPLACEMENTS may be shown on pages 2 and 3 of this petition. If you have no records of such expenses, or if the tenant is required to make all repairs, you may tear of pages 2 and 3 and file only pages 1 and 4 with the Ares Rent Office. In any case, however, you must all out page of this petition.

97026-52-pt. 231

Page 2 C. REPAIRS AND REPLACEMENTS:

Expenses for repairs and replacements should generally not be charged entirely to the year in which they were paid. Instead they should be "allocated" (that is, spread) over the period of yean they normally last. For example, it a roof which normally laaste 15 years was replaced in the test year at a cost of $300, only one-Gitteenth or $20 is chargeable to the test year and $280 is chargeable to the other 14 years.

Similarly, it a roof was replaced any time within the last 15 years, one-fifteenth of the cost may be properly charged to the text yesr. Thus, it is proper for you to show not only a portion of the expenses incurred in the test year, but also the portion of the er penses incurred in previous years which is allocable to the test year. However, no portion of a prior year expense may be shown if the period between the date it was incurred and the end of the test year exceeds the proper "allocation period. The proper "allocation period" is the number of years shown in the Allocation Schedule below, unless it is established conclusively that an expense bas been incurred more or less frequently.

In the table below, list on a separate line any repair or replacement item that is properly chargeable to the test year. In column 1 show the nature of the item. In column 2 show the year the item was purchased or completed. In column 3 show the cost la column 4 enter the proper "allocation period," as shown in the Allocation Schedule, unless your records show conclusively that you have incurred the particular type of expense more or less frequently. Divide the cost of each item, as shown in column 3, by the number of years, as shown in column 4, and enter the result in column 5.

IMPORTANT NOTE.-The cost of capltal Improvements may not be included under repairs and replacements, since they are taken into account in the allowance for depreciation in table B on page 1.

ALLOCATION SCHEDULE

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