24. Kokomo, Ind.

Haynes Stellite Co.: Mr. Morgan said that the housing shortage was so acute, and the housing conditions of the workers so bad, that the company has considered building houses for sale at cost to employees. The company is operating a payroll savings plan and advancing down payments for purchasing houses, as part of a program to improve conditions for employees living in brooder houses and trailers. He said that units for rent at $75 and up or for sale at $15,000 or more were available. However, Mr. Morgan stated that all local manufacturers felt the housing shortage would get worse for middle- and low-income families. 25. Conneaut, Ohio, October 1950

True-Temper Co.: Mr. R. E. Campbell, personnel manager, said that only half of approximately 50 new workers hired during the past year had been able to obtain housing accommodations. The other half were unsuccessful in their efforts to find housing accommodations and eventually resigned from the company. 26. Fremont, Ohio, April 1951

Fremont Rubber Co.: Mr. Art Dittman, manager, said that he was convinced that high rentals and the shortage of adequate housing was affecting personnel turn-over and recruitment, particularly in the case of in-migrant workers. He believed that there was a definite need for additional housing.

REPORTS REGARDING EFFECT OF HOUSING SHORTAGE ON MANPOWER SUPPLY 1. Contra Costa and Alameda Counties, Calif.

The acting manager of the Oakland office of the California Department of Employment reported a drastic shortage of skilled labor in the area and commented that any future Government contracts might require importation of skilled labor. resulting in a shortage of housing.

2. Indianapolis, Ind.

M. K. Coleman, industrial relations officer, Navy Department, United States Naval Ordnance Plant, 16* * * While some of these new employees have found housing accommodations, a number have been unable to do so and have resigned after a short period of time to return to their homes. In fact, as I am dictating this letter to you, another resignation comes over my desk effective immediately for the same reason.

"In recent months a recruiting team representing this station has visited Louisville, Ky., and Cincinnati, Ohio, in an effort to interest skilled workers in employment here. Because of the lack of suitable rental housing we have confined our recruiting efforts to single men or those who are married but have no children.

*

3. Belpre, Ohio, September 1951

Mr. H. R. Richards, subdistrict representative, United Steel Workers of America, wrote that the construction of housing has not kept up with industrial expansion in the Parkersburg area, and that there was a desperate need for low-rental housing. He said some union members were still living in trailers, basements, and buildings "little better than chicken coops," and that decontrol of rents would lead to undue hardship.

Mr. GOODMAN. Now, what happened in San Diego? On February 22, 1951, the Navy announced that their personnel, civilian personnel of the Navy shipyard in San Diego, was being seriously affected by the excessive rents that were being charged there.

A study by the Navy showed that there was a 39-percent increase in rents since the time of decontrol. Mr. Chairman, I would like to put the Navy report and the news report from the Evening Tribune and San Diego Union, of Thursday, February 22, into the record at this point.

The CHAIRMAN. Without objection, that may be done. (The newspaper article referred to is as follows:)

[From San Diego Union, February 22, 1952]

RENT BOOSTS AFFECT NAVY PERSONNEL

About two-thirds of the houses and apartments rented by the naval air station personnel have had rent increases averaging 39.6 percent since rent control was lifted in San Diego, Tighe Woods, national housing expediter, yesterday informed Wilder D. Baker, Eleventh Naval District commandant.

A breakdown showed that of 752 units formerly under rent control, 525, or 65 percent, had had rent increases. Of the remainder, 168 units had no rent change and 49 units had rent reductions averaging 14.9 percent.

LOW COST RAISED

Cheapest quarters showed the largest percentage rent hike, Woods reported. Those renting for less than $20 were up 117.6 percent. The largest class, renting from $30 to $39 a month, were up 44 percent. Units renting for more than $75 a month were up an average of 28.7 percent.

Woods also reported on 1,383 units which had not been identified as formerly under control. Their rents ranged from $12 to $215 a month. Four-room dwell

ings made up the most numerous class and rented for an average of $41.27, but some rented for as much as $160. Five-room dwellings bring an average rental of $69.86, the report said, and cover a range of from $23 to $215.

PERSONNEL QUERIED

Woods said that the report was based on a questionnaire distributed to all North Island personnel quartered off the base. A total of 2,135 forms was returned. They were checked against registration statements on file at the area rent office in San Diego.

Neither the expediter nor the Navy explained the reason for the survey. It followed demands made by Navy officers and industrial groups to furnish more housing here to meet a greater military and civilian need occasioned by the current defense program. It also followed agitation to increase rents in Governmentowned projects in the San Diego area.

OCCUPANTS PROTEST INCREASE IN PETITION

Eighteen occupants of a 26-unit residential colony on Titus Street near Five Points protested approaching rent increases yesterday in a petition to the city council.

They asked the council to "use means available to you, by recommendation to the Federal Government or otherwise, to reestablish rent control."

The tenants said their rents would be raised from 25 to 85 percent on or about March 15.

[From Evening Tribune, February 22, 1951]

MAYOR KNOX CONDEMNED FOR HOUSING PUBLICITY STAND

Editor: Your newspaper deserves great commendation for the more than ample coverage you have given recently in pointing up the housing need in San Diego. You rank right next to the administration itself in Washington for your efforts in contributing to the inflationary spree. Real estate and rental increases can certainly attest to the effect of your efforts, as they seem to have reacted regularly to the stimuli of your panicky releases.

Mayor Knox (responsible for killing rent control at a critical time) says "defense" workers (and I use the word "workers" with a charitable construction) cannot pay $90 a month for rent. Are there any large wage-earning groups in San Diego who can? As a group, aircraft workers should be just as able as any other to pay high rent. Why single them out for special consideration? Giving any group special distinction in importance to the defense effort was a mistake made in the last war.

Public housing should be available to anyone with a low income, regardless of type of employment. All taxpayers contributed to the creation of the housing. In the first place, who can determine what group of citizens is the most essential? The San Diego County Laundry and Dry Cleaners Association have pledged their trucks as ambulances in the event of emergency. The drivers are taking

97026-52-pt. 2——42

first-aid training. Surely those people are just as essential as some who are just putting in the time on a labor-hoarder's payroll.

Another angle which might relieve a little the urgent housing situation would be for the services to discourage wives and families from following their overseasbound husbands out to the coast. Tough? Maybe, but isn't this an emergency? It happened to many of us during the last war.

ROBERT J. MILLER.

39 PERCENT INCREASE FOUND IN S. D. RENTS-NAVY GIVES FIGURES AFTER SURVEY OF HOMES OCCUPIED BY PERSONNEL

Rent increases ranging from 21.7 to 117.6 percent have hit naval air station personnel since abandonment of controls, the Navy reported today.

The rent boosts, averaging 39.6 percent, were reported by Tighe Woods, National Housing Expediter, to Rear Adm. Wilder D. Baker, Eleventh Naval District commandant.

The report said that out of 752 dwelling units identified as having been under rent control, 525, or 65 percent, had had rent boosts. No rent increases were shown by 168 other units, and 49 showed decreases averaging 14.9 percent.

Largest percentage of increase was shown by the cheapest dwellings, Woods reported. Those renting for less than $20 were up 117.6 percent. The largest class, renting from $30 to $39 a month, was up 44 percent. Those renting for more than $75 a month were up an average of 28.7 percent.

The report also listed 1,383 units which had not been identified as having been under rent control. Their rents ranged from $12 to $215 a month. Most numerous class was of 4-room units renting for an average of $41.27, but some rented for as much as $160. Five-room dwellings bring an average of $69.86, the report said, and cover a range of $23 to $215.

The report, Woods said, was based on a survey of the rental problems of all North Island personnel quartered off the base. Reason for the survey was not explained. It followed demands by naval officers and industrial groups to furnish more housing here to meet the needs occasioned by the defense program.

Mr. GOODMAN. Subsequently, under the Defense Housing Act, the Administration sought to secure the construction of some 9,500 housing units in San Diego, to relieve the serious crisis there.

The Wall Street Journal of October 24, 1951, shows that while 6,000 units had been authorized up to that point, only 7 houses were actually being built. And I checked, as of today, when I was out in California last week, there were 77 under construction, and only 17 completed houses a full year after the Navy pointed out the necessity of some 9,000 houses being built in the community. Seventeen complete houses under the defense housing program.

Mr. Chairman, I would like to put that report in the record.
The CHAIRMAN. That may be done.

(The Wall Street Journal article is as follows:)

[From Wall Street Journal, Oct. 24, 1951]

HOUSING MUDDLE-DEFENSE-HOME HOLD-UP IN SAN DIEGO FLASHES WARNING TO OTHER AREAS-SIX THOUSAND DWELLING UNITS WERE AUTHORIZED LAST MAY; SEVEN Are Under WAY-PRICE CEILINGS HELD Too Low

By John David Rees

San Diego, Calif.-Local builders call it the great housing foul-up.

The Government took a hand in this war-booming town last May in an effort to create more needed housing.

It named San Diego a defense-housing area and authorized builders to construct 6,000 dwelling units.

Today, 6 months later, exactly seven single houses are under way in this big aircraft production center and naval base. The timetable called for the entire number to be started by last Julv.

Says a leading local builder: "No one, least of all Uncle Sam himself, knows when the 6,000 units will be launched-conceding they ever will get under way.”

ADVICE TO OTHER AREAS

Because 40 other communities across the Nation also have been named defense housing areas, San Diego's experience has more than local interest. To other war production centers which may be heading into the defense housing category, a contractor here counsels: "The Government may tell you that your housing problems will be solved, but you'll probably find that they'll be aggravated.' When the program was announced here in May, by the Federal Housing and Home Finance Agency, 91 builders from all parts of the country submitted applications requesting certification to build from one to several hundred of the proposed 6,000 units here; 2,000 were designated for sale and the other 4,000 as rental units. On the for-sale group, the principal rub has been that the HHFA, which takes sweeping control when it sets up a defense housing area, has extablished price ceilings which builders say are too low; the ceiling is $8,500 for the proposed 1,250 two-bedroom houses and $9,500 for the other 750 three-bedroom dwellings. The HHFA says the ceilings are in line with what defense workers can afford.

NEEDS $1,000 CEILING RAISE

Nels Severin, head of a building firm, applied to construct 600 for-sale dwellings, but he says the price ceilings must be raised $1,000 before he can build homes which would satisfy local building requirements. "Even if these requirements were waived," he declares, "we couldn't sell the cracker boxes that would be built under the price ceilings set by the Government."

To date only two builders have met these Government-fixed sales prices and are building houses. One is putting up a single dwelling, the other is constructing six. The other builders have been unable to go ahead under the present price ceilings.

So far, not a hammer has swung on the programed 4,000 rental units--because of the HHFA's pricing schedules for the rents. It has fixed rent ceilings of $55 a month for a one-bedroom dwelling, $65 for a two-bedroom unit and $75 for three or more bedrooms.

"The return on such rentals is too low for a builder to get any financing," says Capt. B. F. Jenkins, executive vice president of San Diego Associates, Inc., local building firm. "An insurance company told me it won't go in any place where rentals are fixed but costs can climb," adds the captain who, after looking at the proposed project here, decided against even entering his firm on the list of companies seeking building certifications.

A DUBIOUS ADVANTAGE

Do any real advantages accrue to a community designated as a defense housing center?

It's true that the community is extended priorities on building materials. "But that's a dubious advantage because there is no noticeable shortage of building materials," says B. B. Margolis, local builder who originally applied to put up 150 for-sale single dwellings, but has not started any.

Another asserted advantage is that obtaining of mortgage money is made easier. The Government's Federal National Mortgage Association is authorized to buy up mortgages as soon as they are issued instead of waiting 2 months as under normal procedure. It can also agree, in advance of the start of a project, to buy up to 50 percent of the mortgages to be issued on the project.

"But," says one local builder, "what good is this mortgage help? To use it, we must first start building the houses, and we can't do that under the present ceiling set-up."

"Builders here are faced with a real dilemma," says Charles A. Taylor, secretary of the local chapter of the Building Contractors Association. "They can't build the houses without losing money, and Government officials threaten to construct more public housing here if the houses aren't built privately." Several builders are convinced that "Uncle Sam, in a left-handed way, is trying to force through a public housing project." (San Diego already has 15,137 public housing units built here in 1941-46.)

COSTS ABOVE PRICE

"Take a look at my costs on that two-bedroom house the Government says should sell for $8,500," says a typical builder: "Developed land cost is $1,700; carpenter and common labor, $1,090; plaster and lath, $1,015; plumbing, $855; garage $800. Just these five items run $5,460 and don't include such items as

lumber, concrete, millwork, painting, roofing, etc. Altogether these costs roll up to about $9,500."

To build or not to build a garage? This could be the question.

Builders here say that, just as stringent local building regulations boost costs, so do those of the Federal Housing Administration. This Federal agency requires that single homes in San Diego include garages-if it is to insure mortgage loans. And mortgage lenders will not advance money for low-price local homes without this insurance.

Builders hear rumblings from Washington which suggest they may be authorized to eliminate garages so as to keep under price ceilings. Says one builder: "But this is a community which is used to having garages with its houses. I doubt whether the homes can be sold without them." This, say builders, is one example of what happens when a bureaucracy, 3,000 miles away in Washington, tries to solve local housing problems.

CAN'T SELL AT HIGHER PRICE

Another example: Buyers of the houses must agree not to sell within 5 years at a price higher than they paid. Says Milton J. Brock, of M. J. Brock & Sons, Inc., big southern California tract developer: "Aside from this being a cockeyed provision in an inflationary era, let's consider it from another angle. Supposing we are allowed to eliminate garages and the buyer builds one himself. Could he tack the cost onto the sale price if he wanted to sell the house? No one has

answered this one."

Federal rent control, imposed here this month on established dwellings because of the defense boom, is working too, to tighten the housing situation here, say local contractors; the controls provide for a rollback of rents to last January 1. Builder Severin recently completed a group of duplex rental units for 18 families. He says: "They're vacant today because I can't get a landlord to buy them; investors won't risk rental investments in a rent-controlled area."

Chimes in builder T. J. Lords: "A client just canceled 20 rental units he wanted to build; rent control scared him out."

PRIVATE HOME BUILDING RISES

Actually builders point out private construction of homes here has been moving along remarkably well without Government help-up till the time rent controls went back on. The city planning commission reports 5,165 new dwelling units were started in San Diego in the first 9 months of 1951, an impressive 26.5 percent more than in the like 1950 period. Home building around the country has been lagging well behind the record year-ago pace.

Builders here concede there is a need for even more housing; San Diego population climbed steadily from 289,854 in 1946 to 334,387 last year and is continuing to grow because plane plants still are expanding production.

Mr.

But says Captain Jenkins: "I don't think housing is tighter here than many other places; certainly it is not so great that Uncle Sam had to move in." Taylor notes: "For-rent ads in the papers are running ahead of ads placed by folks seeking homes."

The planning commission reports the big increase in building here this year has resulted from multiple-unit housing starts; single-family starts are a bare 1 percent ahead of 1950. It adds: "Several large rental housing projects containing a total of over 2,500 units are under active consideration by their sponsors and may swell the year's total of privately constructed multiple units to an all-time high for San Diego."

But the commission contributes this qualifying note: "Rent control is a new factor which may affect decisions of individual builders of multiple units."

Mr. BARRETT. May I ask a question there? You are speaking now of this construction in a decontrolled area?

Mr. GOODMAN. It was decontrolled, and under the critical area. procedure, was recontrolled. But I would like to discuss that at a later point in my statement, if I may.

I am merely showing at this point the urgent necessity for this act, the urgent necessity for a stronger provision in the law than now exists.