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PAOR 4
D. RENTAL INCOME:

Give the information required in the table below for every residential and commercial unit to the building.
FW in column 4 for each unit according to the following instructions:

Unite With Madmum Renta.-Enter present maximum rent-even if vacant or occupied by the landlord, his employeus, relative, or other persons paying no rent or only s nominal rent.

Unite With Voluntary Leases in Efect.-Enter the present rent payable under the terms of the lesse.

Uncontrolled Residential and Commercial Units.--Enter the rent charged on the date the petition is filed. If no rent or only Dominal rent is charged, enter the full rental value. (Commercial units include garages rented to persons other than tenants of the dwelling unita in the property. A single monthly or weekly total rent should be entered for all such garages, and the number of theme garagas specified in column 2.)

Units With Seasonal, Alternato, or Other Varying Rents.-Enter the average monthly rent during the year ending on the date the petition is filed.

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E. TOTAL INCOME OTHER THAN RENTS FOR THE ENTIRE TEST YEAR:

(Includes receipts for phone service, laundry equipment, utilities, alternations, etc.)..

CERTIFICATION IT IS NOT NECESSARY THAT THIS PETITION BE SWORN TO, BUT ANY FALSE STATEMENT WILL RESULT IN THE DENIAL OF YOUR ENTIRE PETITION AND MAY SUBJECT YOU TO THE PENALTIES PROVIDED BY LAW.

I HERBDY CORINT THAT: (1) the information supplied by me in this petition is true and correct, and (2) I am maintaining all service required by the Rent Regulations, and will continue maintain such servions so long as any adjustment granted under this petition continues in effect.

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Mr. DuLAURANCE. My name is Henry DuLaurence and I am from Cleveland, Ohio. I am privileged as chairman of the legislative committee of the NAOA to submit the views and recommendations of that association concerning the proposed extension of the Housing and Rent Act of 1947, as amended.

Our association is Nation-wide and represents the owners of rental property throughout the country. This industry is composed of millions of small property owners. We have frequently been maligned as the avaricious rich. Nothing could be further from the truth. Eighty percent of all rental property is owned by people who have five units or less and have a gross annual income of under $5,000.

We are representing the little business man of the real-estate world—the retired couple—the widow-and they urgently need your help.

The United States is now completing its tenth year of Federal rent control. As in the past the Rent Stabilizer is again requesting that it be renewed-expanded-strengthened.

Our association is unalterably opposed to rent control. We think it is wrong morally, unsound economically, and does not cure the housing shortage but actually perpetuates it. We have had rent control for 10 years. Since 1940 we have built or converted over 10,000,000 dwelling units; we have increased our dwellings by 25 percent but our population has increased only 15 percent and yet because of rent control we still have an artificial housing shortage.

A brilliant example of what happens under rent control can be seen in the case of the 25 large American cities which lost population between 1940 and 1950. Each one of those cities had a vacancy ratio in 1940-each one of those cities had a net increase in dwelling units each one of those cities lost population between 1940 and 1950 and yet 23 of those 25 cities are still under rent control. Certainly these figures show beyond a shadow of doubt what a synthetic housing shortage rent control can and does cause.

The inherent dangers of controls are becoming more and more obvious daily. The inherent dangers to a democracy--and to our way of life is manifest-and its future implications clear.

Our industry has been under continuous "temporary" controls for 10 years. For 10 long years we have sought to live within a rent structure frozen at 1941 levels. For 10 long years, we have received the most meager of rent adjustments by the Federal agencies which administer such controls.

Actually controls are no longer necessary for our industry. If the argument for controls is sound, then the bigger the increase in population the more danger there would be of excessive rent increases. Let us see what has happened to date. Of 231 of our largest cities, 90 are now decontrolled. Those 90 decontrolled cities had an increase in population between 1940 and 1950 of 31 percent. The 128 cities still under rent control increased in population an average of only 97 percent.

From all the impartial statistics we have been able to gather, these decontrolled cities have had fair and reasonable increases. The decontrolled cities carried in the BLS Index shows an increase of 16.8 percent. From this mass of evidence we can only come to one logical conclusion: the cities still under control, having a population increase of only 974 percent, would have even smaller rent increases.

We appreciate, of course, that the present defense effort has resulted in the controls over prices, wages, and credits. However, many of those are being dropped through the wise insistence and intervention of Congress. We ask that Congress set up new standards for proper decontrol. We believe that at very least it should be mandatory upon the Rent Stabilizer to decontrol any city where there have been more housing units made available in the last 10 years than increase in population, using the Census Bureau figures.

However, we believe the orderly decontrol of rental accommodations can best be effected by continuing Federal rent controls only over those areas properly found and certified to be critical defense areas. This would free from controls areas not found to be critical defense areas, and would give full effect to the desires of Congress to eliminate unneeded controls not directly required by the national defense effort. Thus, Federal rent controls would be continued only in areas designated as critical defense areas as such areas are now defined in the Housing and Rent Act and only on a finding, after due notice and public hearing, that there has been an actual and substantial in-migration of labor and that excessive rents have actually and in fact occurred.

Perhaps the outstanding characteristic of the rent law is its callous, almost subversive, maladministration. I should like to give you a brief outline of some of the most damaging inequities and injustices of the rent control as it is now being administered and give a more detailed explanation of these points later on in the testimony.

1. Rent control as administered promotes the deterioration of rental housing.

2. Improvement of property is discouraged because of failure to give adequate and realistic rental increases. - 3. Many adjustments by the rent office have been completely unrealistic when you consider the increased cost of operation.

4. Entire areas of substandard rents are permitted to exist because of lack of mandatory provisions to increase those rents to proper economic levels.

. 5. The lack of a sound economic approach by the rent office on fair rents does not solve the housing problem but merely promotes it.

6. Rent control bas resulted in the removal of millions of units from the rental market by sale or otherwise.

7. The law is being unequally enforced throughout the country depending a great deal on the whims and prejudices of the rent control directors and their advisory boards.

8. Rent offices require that applications for rent increases be made out strictly according to their rules and regulations and failure to do so generally results in a denial regardless of the equities.

9. The rent control law does not provide any effective judicial review from the decisions of the rent office.

10. No provision is made for the change of advisory board personnel nor are the property owners permitted to make a choice of their representatives.

11. In many cases, local advisory boards are not truly representative in their make-up.

12. The property owner is denied effective control over the tenant although in most States he has a legal liability for the tenant's action.

Entire areas of substandard rents are permitted to exist because of a lack of mandatory provisions to increase those rents to realistic levels. Many such districts were frozen at depression levels. Increases are not permitted on grounds of comparability because all the rents in the district are low. In many of these low rent areas of $15 to $25 rents, the 20 percent granted by the 1951 law is completely inadequate.

For example, the median rent in the country today is $35 (housing census). There is thus 8,500,000 housing units renting for less than $35. With the purchasing power of wages now at 162 percent of the 1921-38 index (the Real Estate Analyst, St. Louis, Mo.), and the purchasing power of rents at 64.1 percent of the same index, it is readily apparent that rental property owners. have not been able adequately to maintain, let alone improve, their properties under rent control.

There are many such districts throughout the country caught between depression rents and present high costs of operation. It should be mandatory upon the ORS to consider comparability on a city wide and increased cost basis rather than a neighborhood basis in order to establish fair and realistic rentals when it is obvious that the rents for certain districts are substandard.

Rents are actually at or below their 1931 levels--yet these properties must be maintained at 1952 prices. The case of Chicago is a good case in point. Statistics show that the median monthly rental for 1930 was $49.75 whereas the present median monthly rental is $44.25, a decline of 11 percent (source: BLS Statistics). Now compare present costs of operation with the depression years. Steam coal is up 125 percent. Real estate taxes are up 54 percent. Wages are up 186 percent. Building material prices are up 162 percent. But rents are up only 25 percent. How can property do otherwise but deteriorate. We vote hundreds of millions to eliminate slums and substandard housing and yet rent control undoubtedly causes more such slums and deterioration every year than we could eliminate in 5 years of public housing at Government expense.

The present act gives almost uncontrolled discretion to the Office of Rent Stabilization to grant or deny rent increases. It is based not on the provisions of the law but on political expediency and for the perpetuation of their jobs. Let me quote from T'ighe Woods' orders:

This meeting reaffirmed the belief that rent control must be administered in each area on a basis that will receive public acceptance. What will work in Wisconsin may not work in Massachusetts. They ran us out of Wisconsin because we were too tight, and out of New York because we were too liberal. The tenants in Boston and Newark were highly organized and they object to liberal increases. If this policy is followed, the state of Massachusetts will throw out Federal rent control and enact State rent control.

I want to comment that increases are granted, not on equity, not on increased costs, not on comparability, not on hardship, but on the basis that will receive public acceptance.

This order proves two things:

1. That Mr. Woods is not carrying out the intention of Congress, Congress welcomed the determination of rent control on the local level but Mr. Woods is trying to continue and perpetuate Federal rent control.

2. That Mr. Woods' denial that he administers the law to suit his office is a sham and a delusion.

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