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«orm No. 131
FEDERAL RESERVE

Office Correspondence
To

flAwm»r

From

EP»I»F

BA D
0R

Subject:^

rw. August 22,1955
Strictly confidmtial

J[^ HIU Daiger\

v>

I understand that the attached is a copy of a report
on low-cost housing that Mr. Grimm has made to the President.
As you will see, it is a very superficial statement, quite
localized, and, as far as I can see, without practical meaning
or significance.
Please regard this as confidential (and do not ask
me where it came from) •




Housing for persons of low income falls within an
area which requires specific definition in each community and varies
as the prevailing incomes vary in each such community.
For purposes of administration, the area is divided
into three sections:
1. Self-sustaining privately owned housing (FHA)
2. Moderately subsidized privately owned housing (FHA and PWA)
3. Largely subsidized housing (PWA)
In New York City, for example, the low income groups
earn up to f3*000 per annum.
Those earning from $1,800 to $3,000 w e in the first
section. Rents range from about $10 to $18 per room per month.
Housing which pays full taxes and is wholly financed by
private enterprise under FHA insured mortgage can be furnished to
this section. Example: Brooklyn Beach Apartments.
Those earning from Si,200 to $1,300 per annum fall in
the second section. Rents range from %$ to 111 per room per month.
Housing for this section involves a small equity to the private o?mer,
possibly limited tax exemption, and either
(a) FHA 50% insured mortgage and low interest long
term amortized Federal loan, or
(b) Low interest long term amortized Federal loan.
An example of this type of housing is Hillside.
Those earning less than |l,200 fall into the third secticn
Rents range from |9 per room per month downward.




Housing for this

- 2 -

section can be produced by substantially 100$ Federal loan bearing
but nominal interest and very low long term amortization, and possibly limited tax exemption.




An example of this thpe is the Williamsburg project.