Date: 1982-03-02
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. I am today introducing a resolution which expresses the sense of the Senate that no cuts should be made in housing programs. The housing Industry is in a state of depression and such a state has not been seen since World War II. In 1981. there were fewer housing starts than at any time since 1946. falling below 1.1 million for the first time in 35 years. Sales of new. single family homes were at their lowest levels on recordduring 1981. And the new year has not brought new life to housing. Housing starts in January were below Decembers levels. and 44 percent below the yearearlier levels. This continued depression was reflected in the January unemployment rate for construction workers. which was 18.7 percent. more than double the national average. This depression concerns not only builders and real estat6 brokers. Every American has a stake in the future of our housing industry. During the next decade 41 milliQn Americans will turn 30 and begin looking for their first home. However. unless we increase the supply and affordability of housing most young people will never get the chance to make the great American dream come true. There are no longer enough houses being built to fill the needs of our citizens. During 1981 there were only 4.7 housing starts for every 1.000 people. This is the lowest rate since 1945 and compares to a start rate of 8.3 houses per 1.000 during the 1970s. So millions of young couples may not be able to find a house in the next few years. But even if they could find one. most people could not afford it. In 1975. the median priced house sold for $39.000. and with a standard 9 percent mortgage. families paid $333 a month. About 22 percent of American families could qualify for home purchases under that arrangement. Today. the picture is dramatically different. In 1982. with interest rates hovering near 18 percent less than 5 percent of American families can afford a median priced home. A $60.000 loan at 18 percent interest. requires monthly payments of $904 over 30 years and that means a family must make more than $50.000 a year to qualify for the loan. I will remind my colleagues that the median income in America is only $21.000. This is 42 percent of the necessary annual salary for these loans. But young couples are not the only ones who are hurt by high interest rates and depressed housing markets. American homeowners are currently losing money on their housing investment. for the first time in postwar history. Most Americans cannot afford to invest in the highflying world of stocks. municipal bonds. and capital investments. For them. a house is their single major investment. It is their retirement security. It is one piece of the world that is truly their own. Now. they can only watch as the value of their investment erodes. This is no time to even consider ending Government support for housing. This is no time to abandon our homeowners and our young couples who hope to become homeowners. Yet. the administrations 1983 budget ends housing support. In fact. Government participation in housing drops from $21 billion to negative $2.5 billion. because the administration wants to reach back to prior year authorizations and cancel them. The administrations message is loud and clear. They do not care about the plight of housing. They do not care about the plight of the American homeowner. They do not care about the plight of young couples who want to buy their first home. Mr. President. the Senate should make it clear that we do care about housing. The administrations 112percent cut in housing programs must be rejected. and it must be rejected now. Among its other plans. the administration wants to drastically reduce support for the Ginnie Mae program. The Ginnie Mae cuts. and planned termination of this program in the outyears. must be rejected since without Ginnie Mae. the FHA and VA programs would be crippled or destroyed. Almost threefourths of the mortgages Insured by FHA and VA are bought by Ginnie Mae. and these programs could not go on without that help. Let there be no mistake about the importance of FHA and VA programs. More than 27 million American families have used these. programs since 1934. Furthermore. during the 1980 recession. FHA and VA loans financed 22 percent of all new homes built or sold that year. Mr. President. if this Nations housing effort is abandoned. it will cost us dearly. Not only will we leave our homeowners and potential homeown. ers without a future. we will be breaking the back of our entire economy. Economists estimate that between 25 and 35 percent of the gross national product is represented by housing or housingrelated production. From lumber materials in the great Northwest. through the steel mills in the Midwest. and the textile plants of the South. and finally to the advanced technology centers in the Northeast. housing affects our entire economy. The National Association of Realtors estimates that the 1981 housing depression cost the. country $108 billion in lost output and 2.1 million jobs during the year. I am now working with other Senate Democrats to produce a housing aid plan which will stimulate housing. lower mortgage rates. and help bring this country out of its economic doldrums. We cannot wait until that plan is drafted to stand firm against deep cuts in the 1983 budget. This Congress went along with the administrations 27percent cut in housing for the 1982 budget. but we must draw the line there. Money spent on housing is productive. it builds capital investment and it puts America back to work. This is not wasteful spending. Mr. President. it is a necessary part of any sustained economic recovery program. If we are to continue our Nations historic commitment to housing. we must reject the administrations 1983 budget cuts in housing. This resolution which I am offering gives us all a chance to tell the administration along with the homeowners. home buyers. homebuilders. and the young people of America that we will not abandon them at this. their most desperate hour. I urge my colleagues to consponsor this resolution. I hope for its early approval. and I hope that Senators will vote for it when it comes before the Senate. Mr. President. I ask unanimous consent that the resolution be printed in the RECORD.