As an example, the Federal Government, which is often contradictory in its fiscal directions, has failed to act in accordance with its knowledge of need. We simply do not provide enough money availability to be able to properly supply our Nation's housing needs.

Nor have we addressed ourselves to creating adequacy or affordability. The cost of money today is just too expensive. At an all time national record high, and this imposition of high interest rates, as it directly affects the cost of housing, has made the task of providing housing in sufficient quantities, and of proper quality, and at affordable prices, quite impossible to achieve.

Have we not learned from our experience in the all too recent past that we cannot burn out spiraling inflation by increasing the cost of providing housing?

All that we affect is a housing unit that costs more. Not a reduction of need, but rather a shortage of necessary housing.

Could that process also be called discrimination?

Who is really injured in that process? The very people who need the fair shake that this amendment addresses itself to.

Mr. Chairman, it should be readily apparent that although I personally desire and strongly believe that this legislation will correct and strengthen the Fair Housing Act, and that it will prevent or adjudicate known acts of discrimination practices in housing; the job of eliminating discrimination practices will not be complete upon the hopeful passage of this legislation.

I truly desire this distinguished committee to continue to search out and evaluate discriminatory practices such as exclusionary zoning, high costs of money, false environmental concerns and the many other already labeled concerns that housers throughout the Nation have fought against; as those issues cause the prevention of housing opportunities and deny adequate and proper shelter to our Nation's people.

I sincerely appreciate the opportunity to present my views before this committee and I would be pleased to answer any questions you may have.

Senator BAYH. Thank you very much, Mr. Rosengarten. I appreciate your bringing your housing experience to bear on the bill. We will carefully weigh the suggestions you made for examining the definitions. If we have any questions after doing so, we will be back to you. Mr. ROSENGARTEN. Thank you very much.

Senator BAYH. We appreciate it very much.

Our final witness this morning is Mr. Joseph Rauh, and we will suspend briefly pending his arrival.

[Brief recess.]

Senator BAYH. Our concluding witness this morning, appropriately designated as cleanup hitter for this bill which is his usual position in a broad area of civil rights, Mr. Joseph Rauh of the Americans for Democratic Action and the Leadership Conference on Civil Rights is now here.

Mr. Rauh, you are no stranger before this subcommittee, and you are certainly no stranger as far as the problem which we are confronting.

TESTIMONY OF JOSEPH L. RAUH, JR., ON BEHALF OF THE AMERICANS FOR DEMOCRATIC ACTION AND THE LEADERSHIP CONFERENCE ON CIVIL RIGHTS

Mr. RAUH. Thank you, Mr. Chairman. I appear this morning on behalf of both Americans for Demorcatic Action, which has not testified, and the Leadership Conference on Civil Rights, which has testified on this bill.

I want to thank the chairman for letting me appear this morning and for his kind words. We have been through many civil rights battles together, and nobody has given more leadership than the chairman.

The fair housing amendments that the committee is considering this morning are, in my judgment, the civil rights bill of 1979. Pretty much every year there has been a bill for civil rights and this year it is housing whose time has come.

The reason for that is very simple. We have a law against discrimination in housing, but Congress did not see fit, when it pasesd that law, in 1968, to give the enforcing authority, the Secretary of HUD, adequate authority to enforce the law.

So, on behalf of the ADA and reaffirming the leadership conference position, I would like to say that I think we ought to enact this bill this year as the Civil Rights Act of 1979.

I saw an unfortunate story in the Times on last Friday, indicating there was some lack of support for this bill in the civil rights community. I want to say to the chairman that I think that was not an accurate reflection of the present situation. I believe that this bill is tremendously desired by the civil rights community.

As the chairman knows, the Leadership Conference on Civil Rights has within its fold all of the civil rights organizations. And every one of them is hook, line, and sinker for this bill.

Sometimes things look to outsiders as though people are not enough for a civil rights bill because they are not marching. But marching is a hard way to get housing enforcement. Housing discrimination is subtle, mean, a sleazy way of doing business. One cannot march against subtle opposition. You march against the obvious opposition of people in Klan robes, as happened over the weekend.

But depth of feeling about housing discrimination is nonetheless there. Now, again I want to thank the chairman for the opportunity to appear here at the end of these hearings and make a few comments. If there are any questions, I would be happy to use what little legal acumen I have to help out.

Hearing what the problems are about this bill, I see nothing that is insurmountable or that cannot be worked out. In the first place, as I understand it, the proposed cease-and-desist authority has not met with major resistance. There were two appraisers associations, I understand, which did oppose it, but I think they are wrong in not understanding that the prosecutorial and adjudicatorial authority will be separated.

They should be separated. Nobody wants to argue that prosecutorial and adjudicatory authority should not be separated. I have spent my life in front of administrative agencies, and at least for the last 20 years this has been an accepted principle in most agencies.

In other words, a part of HUD's legal staff should present the case to the trial examiner. The trial examiner should be totally independent of anybody; that goes without saying. He or she hears the case, and makes a decision.

Now, when the Secretary comes to review that decision, obviously the lawyers that presented the case to the trial examiner should have nothing to do with that review. That is the way it works.

Whenever I see the slightest exception to that principle, if I am on the same side with the agency, I warn them that they are doing it wrong. If I am on the other side, I scream at them that they are doing it wrong. There is no real difficulty here in the year 1979 about dividing functions. Certainly, if anybody has the slightest question about it, a speech by the chairman or supporter of the bill on the floor or in the committee report, would make that clear. I personally think that this is so old hat now that it does not require anything additional.

On the question of damages for an injured person, the Justice Department gave an opinion last year that threw some doubt on the validity of that, Mr. Chairman. They suggested instead civil penalties that run to the Government. I think both would probably be constitutional. If anyone reads the Government's brief on this point carefully, as I did over the weekend, it was perfectly clear that the person who wrote that Justice opinion was not sure of the answer.

The question is whether Congress wants to provide a damage clause in view of the fact that the law is unclear whether the seventh amendment for jury trial creates problems. I think the committee has this choice. You can include damages along with civil penalties and leave it to the courts to decide, or you can go for civil penalties. I would personally recommend the damage inclusion, but I would not want the bill held up on that point. I think there is enough in this bill of great value not to have it stalled on one issue.

The authors of the bill were wise in including the handicapped. We have been too long and too slow in helping the handicapped. It seems to me that the definition in the bill is adequate; it is the definition we have been using in fighting for the handicapped since section 504, and it seems to me to adequately meet the problem.

I understand there has also been a question raised on the aggrieved person definition. If you should change it, I would suggest you make it clear that the Traficante decision is included in the new definition. As far as I am concerned, the old definition seems to be adequate.

The Supreme Court in the Trafficante decision gave the old definition the broadest possible scope and said that some white people that wanted to be in an apartment house with black people were aggrieved persons when they could not have a mixed constituency for the residents.

I am glad the Court did that. As a judge, I think I would have said that. But I must say I was not so sure that the Supreme Court was going to say that. But they did, and I was very happy about it.

With respect to the Court provisions for injunctions and so forth, I have looked at them, and I find them in normal order. They follow the statutes that I have also dealt with in the past, and I would feel that they were satisfactory.

With regard to referrals to the States, I would think that the Secretary should have recall powers where the State clearly is not able to do

an adequate job in this area, as, for example, where no appropriations by the State are available for that kind of work.

To me the bill is in good shape. A few changes here and there should solve any rising problems.

I would just like to conclude, Mr. Chairman, with the thought that this bill will be known someday as one of the great civil rights statutes. There is so much to do in the housing field and so much weakness in present enforcement, that my feeling is that one day this bill will rank with the other great civil rights bills on which you and your colleagues have worked. I thank you for this opportunity to lend my support for the ADA and reaffirm the Leadership Conference support and say to you that we are very grateful for the work that you have done in this

area.

I would also like to introduce Ms. Leslie Loble who is the legislative representative of the Americans for Democratic Action and is with me here today.

Senator BAYH. I appreciate your introducing her. She has been thoughtful, receptive, persistent in her work with our staff on the committee.

Let me ask you, Mr. Rauh-I have two or three technical questions in addition to those I plan to ask here. To speed things along, I might ask you to answer them for the record. You, in characteristic fashion. have already dealt with most of the criticisms that have been made of S. 560 to date. However, one of the nagging criticisms of giving HUD additional power is that it has not had what you might call a good track record in administering the current act.

Now in lieu of this HUD power, there have been various alternating suggestions that an independent agency be set up, that Justice Department be given that power, or that we rely on the current private enforcement provisions with a strengthened attorneys fees section.

There is a whole shopping list of alternatives that have been suggested. What are your thoughts on that?

Mr. RAUH. I am not an expert on HUD outside of the civil rights field. I cannot, however, believe that some possible defaults in other areas should cause the Congress not to give them this additional power in this area.

I think the bill comes at a fortunate time. We have a very fine Secretary who has had great experience in the civil rights field. I would think that Congress would be wiser to give this power to HUD, to make clear Congress expects HUD to handle it with scrupulous care in the separation of functions, to get people in who are able to prosecute the cases correctly, to have the best trial examiners available, and to have advisers to the Secretary review who are first class lawyers.

I cannot believe that Patricia Roberts Harris, whom I have known in the civil rights field for 20 or 30 years, cannot handle this problem. Senator BAYH. I must confess my personal prejudice about the abilities of Secretary Harris cause me to concur with your assessment. Her abilities add force to the argument to pass this act.

One area that has been raised that has caused me some trouble deals with the role of the real estate appraiser. Now, you and I and anybody who has really been familiar with the multitude of methods that

can be used to set up a subtle pattern of discrimination in housing knows about the sinister use of redlining.

We know that in those instances where such a method is to be used, oftentimes we have had, if not a direct, at least an inferential conspiracy between the financial institutions in question and the appraiser. That is not to infer that all or even the majority of the appraisers or financial institutions are participating in that kind of scheme, but it is recognizing the facts as they are.

Now the appraiser has a rather critical role in the real estate transaction whether it is in an area where there could be housing discrimination or in another less discrimination-prominent area, to try to read what he or she feels is the true value of that house or apartment during the period of the mortgage in question. Any of us who have had experience with mortgages, which is most of us, I think, knows the importance of that role.

In listening to the testimony of two different appraiser groups, they seem to make a fairly respectable case that you cannot ignore the reality of what surrounds the given property if you are going to assess its present and future value.

They further point out-and I have not yet had a chance to see to what extent this is true, but I can guess at least to some extent that it is that the minority citizens we are trying to protect would be the first to fall prey or to suffer from an escalated appraisal, and an appraisal that really establishes an exorbitant or unnecessarily high value of the property, that then you find suddenly dissipates and leaves the minority citizen, quite literally, holding the bag.

How can we deal with this in a way that we give the appraiser the breadth of consideration necessary to do his or her job but also minimizing the possibility that they can get away with participating in some of these devious kinds of redlining schemes?

Mr. RAUH. I believe, Mr. Chairman, that Congress would do best to treat this discrimination the same as other discriminations and leave it to the enforcement agency to promulgate rules. They are not going to find appraisers guilty of discrimination unless they find a real pattern or practice of discrimination.

Let me tell you a story, if I may, because I think it is apt. When we were trying to integrate McLean Gardens over there on Wisconsin Avenue, we sent a black young woman in with a suitcase to ask for a room, and they said "Full." About an hour later a young white woman goes in and asks for a room. We were watching the place and nobody else had gone in or come out in the interim, and the white woman was received with open arms and given a room.

We had them open and shut. In order to find discrimination, you have to use that kind of innovative method of getting at it. If in fact somebody that was black walked in to buy this house and got one appraisal and somebody else walked in that was white and got another appraisal, you begin to get the feeling that something is going on. But I think in cases of doubt, nobody is going to go after the appraiser. If the appraiser will give a reasonable opinion of why he or she reached his or her result, I do not think anyone is in any jeopardy. The trouble comes when an appraisal to a white and another to a black is made and you get different results. I have heard of cases in Wash