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A p r i l 10,
Chairman E c c l e s
I m i l e Despres

Attached i s a memorandum on r e h a b i l i t a t i o n o f
r e s i d e n t i a l areas prepared a t my s u g g e s t i o n by R. R. F o s t e r

of t h i s Division.

Foster p o i n t s out t h a t a r e h a b i l i t a t i o n

progran. p r e s e n t s wore d i f f i c u l t problems o f

organization,

c o o r d i n a t i o n , and f i n a n c i n g than does the c o n s t r u c t i o n of
new d w e l l i n g s .

Nevertheless, s i r n s of increased

interest

and a c t i v i t y i n t h i s f i e l d are m u l t i p l y i n g . Even though
r e s u l t s a t f i r s t might be p a i n f u l l y slow, the Federal
Government could do much t o encourage and f a c i l i t a t e r e s i d e n t i a l r e h a b i l i t a t i o n work. What i s most needed, perhaps, i s
a r e v e r s a l of the USHA's a f f i r m a t i v e h o s t i l i t y towards r e h a b i l i t a t i o n p r o j e c t s . The l o c a l housing a u t h o r i t i e s , which
are dominated by USEA, are s t r a t e g i c a l l y placed t o develop
comprehensive r e h a b i l i t a t i o n p r o j e c t s , and s t a t u t o r y a u t h o r i z a t i o n e x i s t s f o r using UbUA funds f o r t h i s purpose. I n s t e a d ,
however, USKA*s r e h a b i l i t a t i o n work has been n e g l i g i b l e and i t
has a c t i v e l y opposed r e h a b i l i t a t i o n p r o j e c t s sponsored by others
Financing f a c i l i t i e s f o r p r i v a t e l y sponsored r e h a b i l i t a t i o n p r o j e c t s are inadequate. FHA insurance p r o v i s i o n s f o r
t h i s type o f l e n d i n g are needlessly s t r i n g e n t , aad p r i v a t e
l e n d i n g agencies, f o r t h i s and o t h e r reasons, are h e s i t a n t t o
undertake t h i s type o f f i n a n c i n g . Moreover, the d i f f i c u l t i e s
i n assembling p r o p e r t i e s f o r comprehensive r e h a b i l i t a t i o n o f
neighborhoods are f o r m i d a b l e , and p r i v a t e i n t e r e s t s , i f they
t h i n k abgut the matter at a l l , are more a l i v e t o the obstacles
than t o . j p o t e n t i a l i t i e s . An a c t i v e promotional campaign undertaken simultaneously by several Government agencies, combined
w i t h more l i b e r a l FHA insurance p r o v i s i o n s , might do a good
deal t o awaken p r i v a t e lenders and business i n t e r e s t s i n v a r i o u s
communities t o the p o t e n t i a l i t i e s i n t h i s l i t t l e - e x p l o i t e d f i e l d

Attachment




REHABILITATION OF RESID iHTIAL AREAS
By 8* R* Foster

SUMMARY
Current s i t u a t i o n
Rehabilitation of r e s i d e n t i a l areas o f f e r s one of the most
important opportunities today* A v e i l coordinated program could r e sult i n increased construction a c t i v i t y , provide sound outlets f o r
i d l e funds, and raise the standard of housing for a large number of
families at l e v unit costs* Rehabilitation can be carried on i n r u r a l
as v e i l as urban areas and v i t h varying degrees of private and public
p a r t i c i p a t i o n * Like nev r e s i d e n t i a l building, r e h a b i l i t a t i o n i s very
such a local problem, yet the Federal Government can help i n stimul a t i n g a msTimuii of private investment i n t h i s f i e l d , v i t h present
l e g i s l a t i o n and at vary l i t t l e cost*
Of the 18,000,000 urban dwelling units* 2,500,000 are
indicated by recent surveys as needing major repairs and over 400,000
are u n f i t for use* Many of these can be repaired and restored at a
fourth t o a h a l f of the cost of new construction. Also* a considerable portion of the 8,000,000 of the dwellings needing minor repairs
can be repaired*
Rehabilitation can include such more than the repair and
modernisation of dwellings* I t can mean r e h a b i l i t a t i o n o f whole
neighborhoods i n which street realignment, creation o f park spaces*
rescuing, and adjustment of taxes go along with repair and improvement of the houses themselves*
There have been numerous agencies sponsoring nev private
r e s i d e n t i a l building and, more r e c e n t l y , publicly-financed a i m
clearance, but there has been r e l a t i v e l y l i t t l e done toward promoting
a comprehensive r e h a b i l i t a t i o n program* Since 19S4 the Federal
Sousing Administration has insured* up t o 10 per oent, repair and
improvement loans under T i t l e I on individual properties* and nov
w i l l insure leans on groups of 16 or more properties under T i t l e I I *
See* 207 ( r e n t a l housing) where the construction amounts t o at least
50 per cent of the amount of the loan* The rates end terms an both
these types of loans are not as favorable as they should be* Local
housing a u t h o r i t i e s have been set up i n some 500 c i t i e s but so f a r
have done p r a c t i c a l l y no r e h a b i l i t a t i o n work exoept i n connection
v i t h the "equivalent elimination" provisions of the U* S* Housing
Act • Lending i n s t i t u t i o n s generally have been reluctant t o loan for




r e h a b i l i t a t i o n * A few i n d i v i d u a l s hare undertaken r e h a b i l i t a t i o n
work, but t h e i r operations have been r e l a t i v e l y H a l t e d exeept i n
t h e ease of Arthur W* Binns • His s f f o r t s over 10 years have r e s u l t e d
i n the r e p a i r end remodeling of some 500 dwellings i n P h i l a d e l p h i a
which he r e n t s t o negroes a t from #3 t o $5 per roesi per month* w i t h
no Government subsidy* The n a t i o n a l Association of Real Estate
Boards has a committee, w i t h Binns as chairman, which i s urging l o c a l
r e a l e s t a t e groups t o launch r e p a i r and improvement programs w i t h
p r i v a t e f i n a n e i n g i some of these are g e t t i n g under way*
Program
Federal agencies through a concerted program can a s s i s t i n
overcoming two b i g obstacles i n the way of r e h a b i l i t a t i o n work, ( a )
inadequate f i n a n c i n g and (b) lack o f means f o r coordinated a c t i o n by
l o c a l groups involved i n b l i g h t e d and slum areas—hose owners, l e n d ing agencies, and c i t y a u t h o r i t i e s *
The Federal Housing Administration should be induced t o
sake even more l i b e r a l the terns on insured loans f o r r e p a i r and
improvement work* Many o l d p r o p e r t i e s i n established neighborhoods
when repaired and remodeled are as good s e c u r i t y as much of the
s p e c u l a t i v e l y b u i l t new construction* A l s o , FHA should push t h s p r o gram more aggressively by a c t i v e promotional work, p a r t i c u l a r l y i n
f i e l d o f f i c e s d i r e c t l y i n touch w i t h lending i n s t i t u t i o n s *
The Home Owners* Loan Corporation should expand t o other
c i t i e s immediately i t s very valuable program f o r carrying out neighborhood r e h a b i l i t a t i o n p l a n s , such as t h a t f o r the 38-block Waverly
p r o j e c t i n Baltimore*
Since most of t h e l o c a l housing a u t h o r i t i e s are ( u n f o r t u n a t e l y )
l i t t l e more than s u b s i d i a r i s s of t h e United States Housing A u t h o r i t y ,
and know l i t t l e e l a e than what USHA t e l l s them, the l a t t e r agensy
should be persuaded or required t o a l t e r i t s negative p o l i c y i n regard
t o r e h a b i l i t a t i o n snd a c t i v e l y sponsor i t * The l o c a l housing a u t h o r i t y
can be t h e f e e a l agency i n a c i t y f o r c a r r y i n g out a broad coordinated
program but w i l l not do so t o any extent unless USHA* s present a t t i t u d e
i s r a d i c a l l y changed*
The Federal Heme Loan Bank Board, Federal Deposit Insurance
Corporation, snd t h s Federal Reserve System can a i d by bringing t o
t h e a t t e n t i o n o f t h e i r members ways i n which they can e f f e c t i v e l y t a k e
p a r t i n l o c a l r e h a b i l i t a t i o n programs t o prevent spread of b l i g h t ,
provide b e t t e r housing a t minimum costs, and protect t h e security
behind t h e i r loans and r e a l e s t a t e holdings i n troublesome areas*
There should be continued pressure on a l l lending i n s t i t u t i o n s t o
recognise t h e p o s s i b i l i t i e s , i n f a c t i n some instances ths n e c e s s i t y ,
f e r making r e h a b i l i t a t i o n loans en more favorable terms*




The opportunity i n rehab i 1 i t at i on i s a large one • I t o f f e r s
even more d i f f i c u l t problems than new r e s i d e n t i a l building, but
interest i n the subject i s increasing and i t appears that much private
investment can be stimulated i n the near future by action through
established agencies, both local and Federal*

URBAN REHABILITATION
Background o f problem
Moat of the current interest and promotional a c t i v i t y i n
housing i s along two lines* (a) New private construction* primarily
t o house an increasing or s h i f t i n g population, at an average cost
of $5,000 or less per unit including lands (h) new public construction,
whieh replaces slums at about the same average cost per unit • 1 /
Such public construction does not add t o the number of units available,
as an equal number of slum imits are demolished*
Relatively l i t t l e has been done as yet by e i t h e r private
or public agencies about the important f i e l d of r e h a b i l i t a t i o n , i . e . ,
the r e p a i r , modernisation* and improvement of houses or even whole
neighborhoods now i n poor condition* This work often can be done at
from 1500 t o #2*000 a unit i n c i t i e s * I n many, but net a l l , instances,
r e h a b i l i t a t i o n results i n a net addition t o the housing supply*
I f only 1 per cent of the valuation of r e s i d e n t i a l properties
were spent annually f o r repairs and improvements, i t would mean an
expenditure of nearly a b i l l i o n dollars a year* Actual expenditures
f o r repairs and modern!sat ion work have averaged considerably less
than t h i s * i n spite of the stimulus of a t o t a l of nearly a b i l l i o n
d o l l a r s of T i t l e I repair leans insured by PHA since 1934* and FHA*s
extensive promotional work* Considering that more than 80 per cent
of a l l dwelling units i n the country are frame construction* adequate
painting and repairs would appear t o require more than 1 per cent of
the value per year* I t can probably be stated as a truism t h a t f o r
a large portion of our housing plant the owners have never spent
enough t o keep i t i n proper repair* l e t alone modernise i t *
Banks and other i n s t i t u t i o n s holding mortgages on properties
i n blighted or slum stress should, of course, be interested i n ways and
means of arresting the spread of b l i g h t and bringing about improvement

l / On 165 USHA projects, including 65,000 dwelling units now under
construction, t o t a l development cost averages #4*880* ranging
from #2,800 i n c e r t a i n Southern c i t i e s t o as high as #6,200 i n
some Northern c i t i e s *




with a minimum of cost. Tho Federal Government should he interested
i n any a c t i v i t y which improves the housing of the country* particul a r l y for medium- and low-income families* and at the esse time
increases employment and private spending* One of the chief problems
i s t o coordinate the e f f o r t s of a l l agencies involved i n any l o c a l i t y
t o get concerted action on a number of fronts* The recommendations
made i n t h i s memorandum aim t o get such coordination* using t o the
f u l l e s t extent possible* existing agencies and l e g i s l a t i o n * with a
minimise of cost or administrative problems.
Recent developments i n r e h a b i l i t a t i o n work
There are isolated instsnoee of r e h a b i l i t a t i o n work by
private interests* perhaps the outstanding example being that by
Arthur W. Binns i n Philadelphia* Over a period of 10 years he has
purchased some 500 old brick dwellings* mostly row houses* spent
from $1*000 t o $1,500 each to reeondition and modernise them* and
rented them t o negroes at from $5 to $5 per room per month—and with
a return on the investment " . . . i n exeess of 10 per cent a f t e r depreciation oharges of 5^ per annum* a l l taxes and a l l operating and
aaintenanee costs". l /
Many of the units had been boarded up or
were uninhabitable* nenoe the r e h a b i l i t a t i o n work raised the standard
e f housing net only by improving the q u a l i t y of the individual units
but by making additional units available a t lew rents* Mr* Binns
was favored by a special tax situation i n Philadelphia which made
i t possible t o buy some of these houses for as l i t t l e as $80 or $100
each, and his operations probably could not be duplicated elsewhere*
However* even w i t h a larger i n i t i a l outlay* i t i s apparent that there
are p r o f i t a b l e p o s s i b i l i t i e s for private enterprises i n t h i s kind of
work* The p r i n c i p a l d i f f i o u l t y i s t h a t not enough individuals with
Mr* Binns* vision* energy* end persistence are interested; but there
w i l l be more as the p o s s i b i l i t i e s beoome more widely demonstrated •
D i f f i o u l t y i n obtaining financing has been one of Binns'
ohief problems* Unable t o borrow from beaks or other lending i n s t i tutions* a t f i r s t he borrowed from members of his own family and
from friends* Even a f t e r demonstrating a p r o f i t a b l e operation over
a period ef years he had d i f f i o u l t y i n obtaining loans* at any
i n t e r e s t rate* u n t i l reeently* A great deal of exhortation and
aetual demonstration of the p o s s i b i l i t i e s of making sound r e h a b i l i t a t i o n loans w i l l be needed t o get banks and other lenders even t o
investigate t h i s f i e l d as an o u t l e t f o r funds* at favorable interest
rates and terms*
The Rational Association of Real Estate Boards i s a c t i v e l y
sponsoring r e h a b i l i t a t i o n work* and an increasing number ef l o c a l

1 / Freehold* A p r i l T s * 1959 and Architectural Forum* September 1939*




groups are being formed to carry oat tha work. I n Kansas C i t y ,
"Civic Housing I n c . " , a limited dividend corporation, i s being
sat up t o provide low rent housing by renovating old c e n t r a l l y loeated properties* The directors include bankers, u t i l i t y
executives, merchants, and r e a l estate operators* A measure
authorising areation of "urban redevelopment corporations" has
passed the Hew York State Legislature, and i t i s expected Governor
Lehman w i l l sign i t * These would be limited dividend corporations
subject t o regulation by a local planning coanmission or similar
body and having the r i g h t of eminent domain t o assemble properties
a f t e r obtaining control of 60 per cent of the assessed valuation of
property w i t h i n a selected area*
The United States Chamber of Commerce also have been
urging r e h a b i l i t a t i o n of r e s i d e n t i a l areas* i n part aa a substitute
for publie housing*
Tha FHA has recently made provision under Sec* 207 of the
National Housing Act for insuring leans t o finance remodeling and
r e h a b i l i t a t i o n work on groups of properties i n blighted neighborhoods*
Some of t h i s work may be done, but i t i s apt to be somewhat limited
since i t depends primarily on the i n i t i a t i v e of Interested lending
i n s t i t u t i o n s * Also, the requirement t h a t construction work must
smount t o 50 per eent of the mortgage w i l l prevent the refinancing
of existing mortgages on eld properties requiring only small amounts
of repair and renovation work*
The HOLC i s the one Federal agency doing something comprehensive about t h i s d i f f i c u l t job—the r e h a b i l i t a t i o n of blighted
areas* I t w i l l soon issue a preliminary report of the study made
by i t s technicians in cooperation w i t h the Baltimore Housing
Authority, r e s u l t i n g i n a plan for r e h a b i l i t a t i o n of an area of 58
bloeka known aa the Haverly section i n Baltimore* Much of the
preliminary work has been done, and active work w i l l s t a r t t h i s spring*
I f t h i s plan can be carried through even the f i r s t of the suaoasslve
stages now planned. I t w i l l serve as a most valuable example of c i t y
rebuilding—with a maximum p a r t i c i p a t i o n by private owners and lending
agencies, i n cooperation with tha c i t y a u t h o r i t i e s * Banks and other
lending i n s t i t u t i o n s can e e l l a f f o r d t o study c a r e f u l l y the principles
and techniques developed f o r t h i s p r o j e c t , even though the problems
and t h e i r solutions w i l l be d i f f e r e n t i n every c i t y * I n t h i s study
HOLC has gone much further i n getting down to fundamentals of proper
land use than any other agency dealing w i t h urban housing*




Other agencies
The Federal Homo Loan Bank Board, Federal Deposit Insurance
Corporation, and the Federal Reserve System* either j o i n t l y or
i n d i v i d u a l l y , may do much t o c a l l t o the attention of t h e i r member
lending organisations the need f o r looking c a r e f u l l y into r e h a b i l i t a t i o n work as a means of making sound, p r o f i t a b l e loans; of protecting
the security behind loans on properties i n declining areasj and of
improving the value of r e a l estate held* There i s an increasing
number of examples of actual work accomplished and techniques for
carrying out r e h a b i l i t a t i o n projects which can be made available t o
the looal i n s t i t u t i o n s to assist them i n meeting local problems*
The cooperation of the American Bankers Association and
the U* S* Building and Loan League should be obtained i n promoting
i n t e r e s t i n t h i s f i e l d among t h e i r member i n s t i t u t i o n s *
Why has not more r e h a b i l i t a t i o n work been done?

>

I t i s d i f f i c u l t for an individual t o de much unless his
neighbors also j o i n * I n mixed owner-occupied end tenant neighborhoods, the problem of multiple and absentee ownership makes group
action very d i f f i c u l t * Few individuals have the seal t o attempt a
large-scale r e h a b i l i t a t i o n program and almost invariably have found
i t d i f f i c u l t * i f not impossible, to obtain financing* I n areas
largely of rented dwellings, individual landlords often cannot do
much improvement or repairs, as they csnnot raise rents, and tax
valuations may be increased as a r e s u l t of the improvement* I n many
c i t i e s high property taxes are as important an obstacle t o r e h a b i l i t a t i o n work as structure repair costs, l e g a l d i f f i c u l t i e s i n assembling
groups of properties* or the many other problems encountered*
Rehabilitation can be done much more successfully i n some
situations than i n others* I f the substandard houses i n blighted
and slum areas are cf frame construction, i t i s net always economically
possible t o r e h a b i l i t a t e them, even with some subsidy* This i s t r u e
especially of row houses* On the other hand, brick row houses usually
lend themselves t o repair and improvement, i f they ean be assembled
I n groups, or a block at a time* Certain types of construction simply
are not suitable f o r repair and modernisation, e * g * , the old "dumbbell"
tenement buildings i n Hew York City and long narrow "railroad f l a t s "
found i n many c i t i e s *
Rehabilitation i s less d i f f i c u l t where there i s a large
supply of old* vacant structures on which t c operate than i n places
l i k e the D i s t r i c t of Columbia* Here the pressure of population on
housing i n the lower rent brackets, p a r t i c u l a r l y i n negro sections,
i s so great that there are p r a c t i c a l l y no vacant structures on which
t o operate, values ere held up a r t i f l e l a l l y , and costs of repair and




improvement work are high* The A l l e y Dwelling Authority has dene
some very e f f e c t i v e r e h a b i l i t a t i o n vork i n connection with some of
i t s projects 1 ut has been unable t o undertake any very extensive
program f o r the above reasons and beeause of l i m i t e d funds*
The problem i s not always one of reclaiming a densely
populated area* i n which congestion of the buildings i s a factor
i n the blighted condition* I n some c i t i e s the areas are blighted
beeause they are too t h i n l y populated and the people housed i n
shacks out i n suburban fringes* This sort of t h i n g i s seen i n some
c i t i e s that were oversubdivided i n the l a s t b u i l d i n g boom* l i l i e s
of s t r e e t s , sidewalks, and u t i l i t i e s have been put i n w i t h only
ocosuiional dwellings, b u i l t o r i g i n a l l y by speculative developers
as "come-ons* t o s e l l adjacent l o t s * T y p i c a l l y , most of the l o t s
are t a x delinquent, and maintenance of streets and u t i l i t i e s excessively costly* Here the solution may be t o concentrate on
p a r t i c u l a r areas and encourage further development there* Others,
p a r t i c u l a r l y those not having a heavy investment i n water or sewer
lines underground, might be abandoned f a l l o w e d t o r e v e r t t o t h e i r
best use, such as park, f o r e s t , or farming* The taxes would have
t o be w r i t t e n o f f , but a t the same time maintenance and police and
f i r e protection expense would be reduced*
Government agencies can help t o overcome many of the
d i f f i c u l t i e s , the l o g i c a l agency often being the l o c a l housing
a u t h o r i t y * A few housing a u t h o r i t i e s are t r y i n g t o do something
about t h i s themselves i n addition t o the s t r a i g h t slum clearance
under the US HA loan and annual subsidy program* Perhaps i n time
more w i l l see t h a t i f they r e a l l y meet the challenge of the power
and r e s p o n s i b i l i t y they have as the housing authority for t h e i r c i t y ,
there i s no reason why they cannot do a very thoroughgoing job of
improving housing conditions by a broad approach, embracing many
l i n e s of a c t i v i t y *
Unfortunately most of the l o c a l housing a u t h o r i t i e s so
f a r set up are l i t t l e more than subsidiaries of the USHA, so
thoroughly infused w i t h the USHA philosophy—and so l i t t l e exposed
t o any other l i n e of thinking about housing prob lens—that t o date
public housing has been l i t t l e e l s e than the USHA program of t e a r ing down slums, building new, and subsidising rents* The l o c a l
a u t h o r i t i e s think i n terms of i n d i v i d u a l projects rather than a
comprehensive city-wide plan f o r improving housing f e r as many people
as possible* This appears t o be so, regardless of the varying nature
of housing problems i n any c i t y *
Such a l i m i t e d pelley can do l i t t l e more than scratch
the surface of the needs of even the slue dwellers and does nothing
f o r intermediate income groups whose main housing need i s not a




now house so much as i t i s a b e t t e r house and* o f t e n more important,
a b e t t e r neighborhood p a t t e r n . I n many areas the housing problems
are only i n part those growing out of s t r u c t u r a l f a u l t s or lack of
sanitary f a c i l i t i e s * widely c i t e d as measures of substandard housing
Here important a t times are the problems growing out of improper
land use—bad street layout* crowding* poor a i r * lack of sunlight*
laok of reereation f a c i l i t i e s * and inadequate f a c i l i t i e s f o r t r a n s portation t o work* Many of these can be correeted by other less
oostly means than slum clearance as now carried out*
Sinee the biggest opportunities f o r r e h a b i l i t a t i o n are i n
large c i t i e s and since i n the worst areas p a r t i c i p a t i o n of the l o c a l
housing a u t h o r i t y or some other Government agency i s nearly always
needed* ways must be found t o get the l o c a l a u t h o r i t i e s into t h i s
f i e l d * Considering the r e l a t i o n of the USHA t o the l o c a l housing
a u t h o r i t i e s * the USHA thus beeomes a key agency f o r obtaining action
The problem i s t o persuade or require USHA t o inolude
rehabilitation in i t s program*!/
I n f a e t USHA should develop f u l l y
the p o s s i b i l i t i e s f o r publie aid t o housing i n urban areas* before
undertaking* l a r g e l y f o r p o l i t i e a l reasons* i t s misguided e f f o r t s i n
r u r a l housing* These e f f o r t s so f a r have served only t o muddy the
waters i n the r u r a l f i e l d * f o r which other agencies are equipped t o
operate much b e t t e r and at considerably lower cost*
I t would be a great gain i f the present policy-making
group i n USHA eould be persuaded t o incorporate r e h a b i l i t a t i o n i n
i t s program and a e t l v e l y follow i t up through the l o c a l a u t h o r i t i e s *
The U* S* Housing Aet authorises such work* so no new l e g i s l a t i o n
i s needed. t j
I f persuasion f a i l s * a "mandate" from Congress might be
incorporated i n an amendment t o S*591 r e q u i r i n g t h a t * of any addit i o n a l appropriations* a specified part be used i n r e h a b i l i t a t i o n
work*

\ J A few dwellings have been repaired and renovated but only i n
compliance w i t h the "equivalent elimination" clause i n the
aet r e q u i r i n g the demolition or r e p a i r and improvement of
dwellings equal i n number t o the new units b u i l t *
Z j "Construction a c t i v i t y i n connection w i t h a low rent housing
project may be confined t o the reconstruction, remodeling* or
r e p a i r of e x i s t i n g buildings*" (U* S* Housing Act* Section 2*
Article 5.)



RURAL REHABILITATION
Rural nonfarm
Relatively few of the small towns and v i l l a g e s have housing
a u t h o r i t i e s , and i n l i e u of soma suoh public agency acting as a "prima
mover", any extensive repair and remodeling work depends for the most
part on the i n i t i a t i v e of local individuals and c i v i e groups* I n
these places there i s usually a higher proportion of home owners than
i n the large c i t i e s , and even the rented properties are owned by l o c a l
individuals* Thus, much of the responsibility for repair and improvement rests i n the home owning group* Here, lending i n s t i t u t i o n s oan
help by getting l o c a l c i v i c groups t o aet and by providing necessary
financing at reasonable rates*
Farm
USHA proposes " r u r a l slum clearance" on farms " • * at about
$2,250 per dwelling, ranging from less than $2,000 i n the South t o
about $2,600 i n the Eorth . . . Tenants of the new farm units w i l l be
required to take care of the houses*•• and f o r suoh maintenance work
w i l l be allowed an average credit of from $18 to #25 a year against
the gross rent of the dwelling* Thus actual cash payments of an e n t i r e
dwelling are expected t o range from about |S6 t o #60 a year i n the
various projects*"
For a Government-subsidised program, farm dwelling construct i o n costs of $2,000 t o #2,600 are f a r too high* The $2,250 average
i s more than twice the average value of a l l farm houaes i n the United
States i n 1950; i n some of the Southern States the 1930 average value
was less than #500, and presumably i s even lower today* A large proportion of the bad housing on farms i s i n the South, where, fortunately,
housing can be supplied at the lowest cost*
The Farm Security Administration has provided good farm
dwellings at h a l f the cost proposed by the USHA, and with no subsidy
other than the reduead interest r a t e and supervision* Farm dwellings
can be b u i l t f o r as low as |100 i n certain sections of the country,
without subsidy other than supervision,by use of cheap l o c a l materials
and contribution of most of the labor by the farmer himself*
I t i s recommended that the present a m e n d m e n t t o S*591
allocating $200,000,000 of USHA loan funds f o r r u r a l housing be
eliminated and that any farm housing program be administered through
the Farm Security Administration! (1) under an enlarged BankheadJones Farm Tenant Purchase program; (2) farm r e h a b i l i t a t i o n loansi
(S) sponsorship of s e l f - l s i p cooperatives f o r group building and repair
of dwellings} or (4) a program t o supply, at from $30 t o $500 per f a m i l y ,
anything from a simple p r i v y , such as already provided i n eonsiderable
volume by WPA* t o a complete e a t e r supply system and indoor t o i l e t
f a c i l i t i e s * depending i n part on the climate and local oiroumstancea*




- 10 -

This might be i n the form of outright grants or favorable loan
arrangements* Many more families could be helped than under the
proposed USHA. farm housing program, and without the continuing
annual subsidy*




A p r i l 10, 1940.