CONGRESSIONAL RECORD -- SENATE
September 23, 1969
Page 26709
Mr. SPARKMAN. Mr. President, I send to the desk an amendment and ask that it be stated. This is really done on behalf of the Senator from Maine (Mr. MUSKIE). If he could have been present, he would have presented it. I offer it for him.
The PRESIDING OFFICER. The amendment will be stated.
The legislative clerk read as follows: Strike all of the present section 303 beginning on line 12 of page 29 and substitute the following:
"Sec. 303. Section 701 of the Housing Act of 1954 is amended by redesignating subsection (i) as subsection (j), and by inserting after subsection (h) the following new subsection:
"'(1) Any grants made under this section to a State, metropolitan, or regional planning agency, an economic development district, or any other areawide planning agency for use by such agency or district to provide planning assistance to any local government or any agency or instrumentality of a local government should be used in a manner consistent with the Federal Government's policy of relying on the private enterprise system to provide those services which are reasonably and expeditiously available through ordinary business channels.'"
Mr. TOWER. Mr. President, would the Senator from Alabama explain the substance of the amendment?
Mr. SPARKMAN. Yes. It is, really, an amendment to the language that the committee wrote in under the 701 planning grant program.
The Senator will remember that we tried last year to make certain that private planning consultants might be used in some of the planning areas where the local people wanted them.
We wrote that into the law last year, but it appeared that it was not clear that we intended it be optional. The purpose of the amendment is merely to make it clear that our intention is that the use of planning consultants or the use of State regional or locally hired planners is clearly at the option of the local body.
Mr. TOWER. This is, then, a clarifying amendment?
Mr. SPARKMAN. That is right.
Mr. TOWER., Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. Is there objection to the amendment?
Mr. TOWER. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. TOWER. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HOLLINGS. Mr. President, I call up my amendment No. 179
The PRESIDING OFFICER. An amendment is pending.
Mr. TOWER. Mr. President; I ask unanimous consent that the amendment of the distinguished Senator from Alabama (Mr. SPARKMAN) be withdrawn.
The PRESIDING OFFICER. Is there objection? The Chair hears none, and the amendment is withdrawn.
Mr. TOWER. Reserving the right to re-offer it.
The PRESIDING OFFICER. Without objection, it is so ordered.
AMENDMENT NO. 179
Mr. HOLLINGS. Mr. President, I call up my amendment No. 179 on mobile homes.
The PRESIDING OFFICER. The amendment will be read.
The assistant legislative clerk read the amendment (No. 179) as follows:
AMENDMENT NO. 179
At the end of the bill add the following new section
"SEC. 415. Section 2 of the National Housing Act is amended by
"(1) inserting '(i)' after the words 'for the purpose of in the first sentence of subsection (a);
"(2) inserting '; and for the purpose of (ii) financing the purchase of a mobile home to be used by the owner as his principal residence' before the period at the end of the first sentence of subsection (a) ;
"1.3) inserting '(other than mobile homes) ' after 'new residential structures' in clause (1) of subparagraph (iii) of the second paragraph of subsection (a) ;
"(4) inserting the following new sentence at the end of subsection (a) : 'The Secretary is hereby authorized and directed. with respect to mobile homes to be financed under this section, to (i) prescribe minimum standards of construction and design to assure the livability and durability of the mobile home; and (ii) obtain assurances from the borrower that the mobile home will be placed. on a site which complies with local zoning and other applicable local requirements.';
"(5) inserting ', except that an obligation financing the purchase of a mobile home may be in an amount not exceeding $10,000' before the semicolon at the end of clause (1) in the first sentence of subsection (b);
"(6) inserting': Provided, That an obligation financing the purchase of a mobile home may have a maturity not in excess of twelve years and thirty-two days' before the semicolon at the end of clause (2) in the first sentence of subsection (b) ; and
"(7) striking 'real property' each place it appears in subsection (c) (2) and inserting in lieu thereof 'real or personal property.' "
Mr. HOLLINGS. Mr. President, I ask unanimous consent that the amendment may reflect the cosponsorship of the Senator from Idaho (Mr. CHURCH) and the Senator from Massachusetts (Mr. KENNEDY).
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HOLLINGS. This amendment would amend title I of the National Housing Act to authorize the establishment of a new FHA program financing the purchase of a mobile home to be used by the owner as his principal residence.
Under the proposed new program, a purchaser of a mobile home would be able to obtain an FHA-insured loan in an amount not exceeding $10,000, which could be repaid over a maximum term of 12 years.
The financing charge to the mobile home purchaser would vary depending on the amount and term of loan obtained. For example, a loan of $5,000 for 12 years would require a monthly payment of $55.12 and the loan would bear an annual interest rate of 8.25 percent. A loan of $6,000 for 12 years would require a monthly payment of $65.71 and would bear an annual interest rate of 8.25 percent. A loan of $10,000 for 12 years would require a monthly payment of $108.09 and bear an annual interest rate of 8 percent. These interest rates are substantially lower than those applicable to non-FHA insured loans currently used for financing the purchase of mobile homes. The noninsured loans generally bear interest at an annual rate of around 12 or more percent.
The mobile home loans would be made by the same lenders -- commercial banks, savings and loan companies, finance companies and credit unions -- as are already engaged in the FHA title I home improvement program. Many of these same lenders are presently making non-insured loans financing the purchase of mobile homes.
Under the proposal, the lenders currently holding FHA title I contracts, of which there are over 8,000, will be able to use the existing title I procedures -- with which they are familiar -- for handling loans to mobile home purchasers. The lender will be able to receive FHA reimbursement for loss sustained by reason of a default by the mobile home owner in payments on the loan. Reimbursement will be on a coinsurance basis with the insurance payment computed as either 90 percent of the lender's loss or 10 percent of the total outstanding amount of title I loan reported by the lender for FHA insurance, whichever amount is the lesser. Both the loans reported for property improvement and for financing the purchase of a mobile home will be included in computing the 10 percent reserve amount. This will give the lender the advantage of increasing its 10 percent reserve each time it reports either type of title I loan for insurance.
In order to assure that the mobile homes financed with a loan insured by the FHA will be suitably constructed and placed on a desirable site, the proposal authorizes and directs the FHA to prescribe minimum standards of construction and design for the mobile home unit.
I emphasize this, Mr. President, because in our 2 days of hearings there was only one real caveat, and that was that we not construct slums, that we not contribute to the urban problem, but
that we try to assist in its solution. It was felt that as long as the FHA is authorized and directed to provide minimum standards, to make certain that the mobile home will comply with minimum standards of construction and minimum sanitary and public improvement needs and regulations, we will have a good program. My amendment would also require the FHA to obtain assurances from the borrower that the mobile home will be placed on a site which complies with local zoning and other applicable local requirements.
Mr. President, lower income families are today facing a mortgage money market that makes homeownership an impossibility. As a result, more Americans are turning to mobile homes for an alternative form of housing that they can afford.
With FHA participation, more families will be able to acquire adequate housing -- a need prevalent in every section of our Nation.
I should like to emphasize that this proposal in no way is intended to conflict or to be in competition with existing housing programs sponsored by the private sector of our economy or by the Federal Government, or by both.
In the entire 2 days of our hearings, no oral witness testified in opposition. The committee received only a statement from the National Home Builders Association, an organization of conventional house builders, to the effect that it possibly could take away financially from other conventional housing programs, or, alternatively, that it would not solve the housing problem.
We do not think it will solve the housing problem. It merely furnishes another approach to low income housing that the public has already been taking, and we believe it is time the Government recognized the need for its financing.
The current demands of our Nation clearly underscore the need for more housing of all types and it is my feeling that this legislation would be a major step forward in meeting these housing needs.
This proposal has been the subject of hearings before the Housing Subcommittee of the Banking and Currency Committee.
At those hearings, testimony was heard from:
Mr. William B. Ross, Acting Assistant Secretary for Mortgage Credit and Acting Federal Housing Commissioner, Department of Housing and Urban Development;
Mr. Nathaniel Keith, president, National Housing Conference;
Mr. John M. Martin, managing director, Mobile Homes Manufacturers Assn., also representing Trailer Coach Association;
Mr. Burr Gray, president, Mobile Housing Association of America, Inc.;
Hon. JOHN BRADEMAS, Congressman from Indiana;
Mr. James R. Price, president and chairman of the board, National Homes Corp., Lafayette, Ind.;
Mr. Clarence R. Mitchell, director of Washington bureau, National Association for the Advancement of Colored People;
Mr. Peter W. Hughes, legislative representative, American Association of Retired Persons; and
Mr. John E. Jacobs, acting director, Washington Urban League.
Statements were received from the United States Savings and Loan League and the American Bankers Association. All of these groups favored enactment of this proposal.
I hope other Members of the Senate will join me in providing this additional avenue to individual homeownership.
Mr. SPARKMAN. Mr. President, I should like to add just a word or two. This proposal really came in too late to be incorporated in the omnibus bill that we reported out, but we did have hearings -- quite satisfactory hearings -- with reference to mobile homes, and I believe it was recognized by the committee as a whole that this was a field in which we should move, and a field in which we should have promise of a greater number of low-cost housing units to take care of the people.
A great many people may be surprised to learn that 6 million Americans live the year around in mobile homes. This problem has been before us in one way or another for a good many years. I remember that the first thing we did -- it must have been about 10 or 12 years ago -- was to provide FHA insurance for the establishment of trailer parks, as we called them. We never have gone into the insurance of mobile homes, as they call them now instead of trailers, because of the fact that they were movable; but the way they are built now, they are rarely moved from one place to another. They are customarily set on a foundation, and become very much a permanent place of residence. They are not movable in the same sense that the old trailer was movable. I agree with the distinguished Senator from South Carolina that minimum property standards must be insisted upon by the FHA in insuring the financing of these units. This will include both the structure itself and the site on which it is located.
Mr. HOLLINGS. Mr. President, will the Senator yield?
Mr. SPARKMAN. I yield.
Mr. HOLLINGS. The distinguished Senator is quite correct in his statistics. Actually, 80 percent of these so-called mobile homes remain in place for periods of 5 years or more.
The requirement is that in financing, the owner certifies that the mobile home is to be used as a principal residence. Ninety-five percent of the homes costing $12,500 or less in America today are mobile homes.
Mr. TOWER. Mr. President, will the Senator yield?
Mr. SPARKMAN. I yield.
Mr. TOWER. I think the mobile home technology is very good. It affords housing at a much lower price than ordinary construction, and I think there is much we can learn from the mobile home industry in seeking a breakthrough in the cost of home construction.
I believe the amendment of the Senator from North Carolina is most constructive, and certainly I am prepared to accept it.
Mr. SPARKMAN. Mr. President, speaking for the majority side, it was manifest, at the conclusion of the hearings, that the committee was favorable to some such action as this. I am agreeable to accepting the amendment of the distinguished Senator from South Carolina.
The PRESIDING OFFICER. The question is on agreeing to the amendment. The amendment was agreed to.
Mr. SPARKMAN. Mr. President, I send to the desk an amendment virtually the same as the one I offered awhile ago on section 701 planning.
The PRESIDING OFFICER. The amendment will be stated.
The ASSISTANT LEGISLATIVE CLERK. The Senator from Alabama (Mr. SPARKMAN) proposes an amendment:
Strike all of the present Section 303 beginning on line 12 of page 29 and substitute the following:
"SEC. 303. Section 701 of the Housing Act of 1954 is amended by redesignating subsection (i) as subsection (j), and by inserting after subsection (h) the following new subsection:
"'(1) Any grants made under this section to a State, metropolitan, or regional planning agency, an economic development district, or any other areawide planning agency for use by such agency or district to provide planning assistance to any local government or any agency or instrumentality of a local government shall be used in a manner consistent with the Federal Government's policy of relying on the private enterprise system to provide those services which are reasonably and expeditiously available through ordinary business channels"'.
Mr. TOWER. Mr. President, I ask unanimous consent to have printed in the RECORD a letter from Secretary Romney addressed to Senator BENNETT. The letter is pertinent to the amendment offered by the Senator from Alabama.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
SEPTEMBER 22, 1969.
Hon. WALLACE F, BENNETT,
U.S. Senate,
Washington, D.C.
DEAR SENATOR BENNETT: I am pleased to write you, following a meeting held between Assistant Secretary Jackson and John Evans, Minority Staff Director, Senate Banking and Currency Committee, concerning certain proposed amendments to the Housing Act on the use of private consultants in providing planning assistance to local governments. The effect of this proposed amendment, as drafted, would be to significantly weaken State efforts to assist their communities. This is contrary to our firm commitment to meaningful State urban involvement and participation.
On the other hand, I am determined to encourage participation of the private sector to achieve the goals of this Department.This is especially true with respect to administration of our Planning Assistance Program under Section 701 and 702 of the Housing Act.
To assure that we are taking every possible responsible action for full utilization of private enterprise in HUD's comprehensive planning and public works planning programs, I am taking the following three steps
1. Expedite completion of a recent survey of all planning agencies receiving 701 Comprehensive Planning Assistance grants to determine the extent to which private consultants are utilized.
Preliminary findings indicate that upwards to 45 percent of all appropriations made available to the States under Section 701 are expended for use of private consultant services. The results of this survey will be forwarded to you.
2. Review thoroughly the existing regulations and guidelines for the Comprehensive Planning Assistance Program. A preliminary review of this document, which contains a large number of references to use of consultants, indicates that it could be strengthened.
Invite the major organizations concerned with this subject, including the American Society of Consulting Planners and the National Society of Professional Engineers, to thoroughly explore these matters of common interest. I have asked Assistant Secretary Jackson to promptly call such a meeting.
I hope these views are helpful to you and to the Banking and Currency Committee in its deliberations.
Sincerely,
GEORGE ROMNEY.
Mr. SPARKMAN. Mr. President, the amendment was offered by the Senator from Maine (Mr. MUSKIE) who had fully intended to be present and introduce the amendment.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
Mr. TOWER. Mr. President, apparently the administration has no objection to the amendment. It is a constructive amendment and on behalf of the minority I am prepared to accept it.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment was agreed to.
Mr. TOWER. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SPARKMAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SPARKMAN. Mr. President, the Senator from Rhode Island (Mr. PELL) wishes to address questions to me relating to a provision already agreed to. The discussion will be fully relevant to that matter. I yield to the Senator for that purpose.
The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
Mr. PELL. Mr. President, I thank the Senator from Alabama.
Would the bill prohibit the State government in my State of Rhode Island, from using Federal funds for planning activities under contract with local governments in the State if the local governments enter into the contracts voluntarily and if they are not prohibited by the State from using private planning consultants?
Mr. SPARKMAN. Mr. President, awhile ago I commented on the language that was in the bill as reported. In reading the report and the language of the bill, I came to the conclusion that the bill did not do just what the report said it did. I refer to the voluntary use of private consultants.
Therefore, we worked out amendatory language that makes it voluntary.
It is entirely optional with a municipality, county, region, metropolitan area, or any other branch of the government. They can use planning consultants if they wish or contract with the State to supply consultants or make whatever arrangement they want. It is purely voluntary.
Mr. PELL. Mr. President, I thank the Senator from Alabama very much indeed for that assurance.
Mr. SPARKMAN. I thank the Senator from Rhode Island for calling up the matter.