Evening star., 1940-08-11
j. ). H. A. Faces
Subsidy Fight
In Committee.
Outcome of Bottle for
Funds May Affect
Defense Housing
Bv NELSON SHEPARD.


House Rules Committee this week
which may determine whether Con-
gress will appropriate funds at this
session for further expansion OF
the regular slum clearance and low
rent housing program.
Officials admitted the outcome
which is uncertain, also may have
an important bearing on continu-
ance of the authority's plans for
housing defense workers in the lower
income brackets. To date the few
projects of this kind undertaken by
the U. S. H. A. are being financed
wholly from recaptured funds. Only
about $20,000,000 is available and
recent survey indicated a need
for 29,284 low-rent homes for de-
fense workers which would cost an
estimated $128,849,00O.
The Rules Committee deferred
action last week on a bill appropri-
: ating $5000000 for rental subsidies
during the current fiscal year. That
sum would make it possible for the
U. S. H. A. to allocate $150,000,00
In housing loans from the original
authorization given over two years
ago. At that time, however, Con-
gress miscalculated the amount of
annual subsidy payments to accom-
pany loans to local agencies. The
request now being made, official;
said. would correct that error and
make it possible to release the
sizable amount that has been tied up
effectively for lack of subsidy.
Subsidy Period Reduced.
The question is coming up before
the committee early this week. The
housing law states clearly that
rental subsidies must be paid an
nually during the life of projects,
that period now being reduced to
45 years. Public housing opponents
in the House are objecting on the
ground that the $5000,000 subsidy
over period of As years would
amount to 1925, 100000.
Yearly housing subsidy payments
now total s13,000,000, compared, for
instance, with S26O,OoO,OO0 for roads,
officials claimed. BY the same
process of multiplication, they
pointed out, congressional appro~
priations for Federal aid to high
ways would total nearly $12 1000 ,OOO,-
600 in 45 years.
The annual Federal contribution
form of subsidy, as established in
the housing act, is necessary to as
sure the low-rent character of the
project. The payments may not
exceed the going Federal rate of
interest plus per cent, or about
3l2 per cent of the cost of the prof.
ect. Such annual contributions
must first be applied toward in
terest or principal of any loan due
the U. S. H. A. from a local agency.
Limitations are placed on the total
amount of subsidy payments during
the first two years.
Construction Costs Reduced.
AS construction costs of public
housing are reduced, the subsidy
payments on projects are reduced
accordingly, officials pointed out. In
September, 1888. the average con-
structlon costs of projects was
$3.50 per unit. BY June, 1910 this
had been reduced to S2,3O6 in the
newer projects. Continued study
OF costs and more economical use
OF materials, it is expected, will re-
duce construction costs consider
ably during the coming year.
Again on the question of subsidy
onclals pointed out it is costing the
Federal Government only S75 per
family annually in the housing pro-
gram, compared with much larger
sums under various other Federal
programs, such as the c. c., C. and
1arm relief. The subsidy payments.
IL was recalled, are the only paw
ments IN the housing program which
are reflected in the annual Federal
puoget. The loans to local agencies
are repayable from the rentals and
are made in the form of federalfv-
guaranteed bonds of the Authority.
Defense Act Omits Subsidy.
Housing officials declared there
had been no attempt IT, mislead
members of the Rules Committee
into believing that the $4,000, 600
subsidy payment now sought was all
that would be required to release an
additional $150,000,000 in loans. ANY
reading of the act would indicate it
is an annual payment but without
the appropriation for this fiscal year
it would be impossible to make any
further loans.
The special act authorizing de-
tense housing omits subsidy pay
ments during the duration of the
emergency. When that has passed
the projects would be used in con-
nection with the regular public hous-
ing programs in the individual 10
calities. They would then require
subsidy. Officials see possible
mear1s of utilizing large part of
the S150,000,000 in frozen" loans for
the general purposes of defense
housing.
Developments LAST week resulted
in Senator Wagner, Democrat, of
New York, proposing a S300,000 900
appropriation to construct houses
and apartments for military
personnel engaged in national de-
fense activities. The measure would
apply to persons employed in Air
Corps centers, armament factories
and other defense undertakings.
Under the present policy deter
mined by the House all such housing
construction would be done directly
under the Quartermaster Corps of
the Army and the Bureau Of Yards