October 11, 1974
Page 35323
HOUSING AID
Mr. MUSKIE. Mr. President, I would like to express my qualified support for the Home Purchase Assistance Act. Compromise with the administration has produced legislation which will provide only limited relief for our struggling housing industry, and for the hundreds of thousands of American families now trapped in inadequate housing by the state of our economy.
However, the bill will provide some easing of the credit crunch which has severely limited the housing opportunities of the working family which makes a good living by traditional standards, or which hopes to preserve the equity it has already invested in housing.
A glance at the statistics demonstrates that any help we can give our construction industry will be most welcome. Building permits in August were at a 7½ year low. Housing starts are expected to be about 1.4 million this year, compared to nearly 2.4 million just 2 years ago. Unemployment in the construction trades is nearly twice the national averageand the statistics represent a half million men out of work.
Bankruptcies and business closings in the homebuilding industry nationally are expected to reach record levels this year, and have already reached record levels in Maine. And the housing recession has a negative effect on suppliers such as wood products firms, and on service industries as well.
The woes of the housing industry tell only half the story. For the estimated 1.5 million households that are formed each year, these figures mean that adequate housing is simply beyond their reach.
There has been some relief through various housing programs. In my home State of Maine, for example, a $30 million mortgage purchase this year by the Maine State Housing Authority has been a substantial aid to middle-income and lower middle-income families in the State. And, at the upper end of the economic scale, families in high-income ranges can often find mortgage money from conventional sources.
It has been the middle- and upper middle-income family which has been hurt worst by the current credit squeeze. In Maine, mortgage rates of 10 percent are not uncommon, and some banks are charging more – or have no money to lend at all.
This bill will provide some relief for those families by infusing $3 billion this year into the money-starved residential mortgage market.
The legislation we have adopted represents but a small beginning in our efforts to help homebuyers and the homebuilding industry. The real answer to their problem is returning stability to our economy. There is much more work ahead of us.
Mr. President, I would like to make one further point regarding the housing situation in my home State.
At the lower end of the economic scale in Maine, there is no such thing as available housing. Low-income Maine residents simply cannot afford housing at today's costs, not because the banks do not have money available, but because the people do not have the kind of money needed in today's market. The only housing within the reach of these people is housing subsidized by Federal housing programs. And subsidized housing for low-income people has been unavailable in Maine since January 5, 1973, when the administration imposed its housing moratorium. Subsidized housing in Maine this year will be at only one-tenth the level of 1972.
Thus the housing industry in my State has suffered the effects of Government policy as well as economic conditions.
Mr. President, to dramatize some of the concerns of the people affected by the housing freeze, I ask unanimous consent that several letters from constituents be printed in the RECORD.
There being no objection, the letters were ordered to be printed in the RECORD, as follows:
DEAR SENATOR MUSKIE: I am the book keeper/secretary for a home building firm in the city of Augusta. I have been employed in this capacity for over six years now, on a part-time basis, that has steadily grown into more nearly a full-time job as the business has grown and prospered.
These past few months, however, as the state of the economy, and the plight of the home building industry in particular has steadily worsened, has become a time of increased concern for all of us involved in any capacity with the industry.
I am in the position to know our problems now in obtaining bank financing to continue with our business, and we are presently in the situation of working on our last house, afraid to begin another for which we cannot obtain bank financing, have laid off 30% of our crew, and anticipate further lay-offs soon.
Unless the home building industry receives some help, and very soon, this firm, as well as a great many others, will be forced out of business. My job, of course, is in jeopardy too, and it is one that means a great deal to me and to my family, with two children in college here in Maine, and another two in high school – and the cost of living in general going up steadily.
My plea for assistance to the home building industry from the Federal Government is made for myself, personally; for a firm that I should like to see continue in business filling a great local need; for a fine crew of workmen whom I hate to see out of work – to say nothing of a good boss, whose business has been built up through fourteen years of hard work and careful planning and who also has a family dependent on this business.
Yours very truly,
MARY JEAN DOYLE.
October 4, 1974.
DEAR SENATOR MUSKIE: I work for a home builder in Augusta, Maine, and my job is in jeopardy. Several men have already been laid off and I'm the next in line. With the way the money situation is up here in the building business, a lot of men – voters and their families are going to be in trouble. I've only been married for 2 weeks now and the wife and I haven't much money saved up for this winter.
Sincerely,
JAMES S. DALBECK, STEVENS HOMES, INC.,
October 4, 1974.
Hon. EDMUND MUSKIE,
U.S. Senate,
Washington, D.C.
DEAR SENATOR MUSKIE: I have been in the building business approx. 3½ years. Because we cannot get mortgage money we have just laid off 7 persons and will look to lay off the remaining (3) in about 3 weeks.
I am pleading (begging) "if you will" to keep myself off welfare.
I have always admired your work and intelligence. Let's see you tackle this one. Please don't let the building industry go bankrupt.
Respectfully yours,
DEAN F. STEVENS.
DEAR SENATOR MUSKIE: My name is David Allen Falenski and I am employed by Dean Stevens of Stevens' Homes Inc. as a carpenter in North Windam, Maine. He tells me he is about to the end of building homes because people cannot get a mortgage. I don't want to lose my job and draw unemployment, but there won't be much choice unless something is done very soon.
I urge you to work for the passage of either S. 3979 or H.R. 16767.
Please help us.
Sincerely yours,
DAVID A. FALENSKI
RON ALLAIRE CONSTRUCTION,
Springvale, Maine, October 4, 1974.
Hon. EDMUND MUSKIE,
U.S. Senate, Washington. D.C.
DEAR SIR: I am in the building industry and in the past month have had to lay off 3 men for lack of work. The contractors that I supply just can't sell their houses because they cannot find customers who can get mortgage money from the banks.
I sincerely urge you to work for the passage of either S 3979 or H.R. 16767, as both permit GNMA to get involved with conventional mortgages.
It is imperative that the present administration changes its policy towards the building industry or the next generation will have to do without homes.
We will see you at the poll.
Very truly yours,
RON ALLAIRE.
N. P. SCONTRAS GALLERY OF HOMES,
Saco, Maine, October 4, 1974.
Hon. EDMUND MUSKIE,
U.S. Senate,
Washington, D.C.
DEAR SENATOR MUSKIE: I am in the business of building homes and fear for my livelihood. The current policy in Washington makes it impossible for me to predict when business will be back to a safe level. I am being eaten up by homes that I have built but can't sell.
There must be something you can do to save people like me from the welfare roles.
You must support S. 3979 – tax exemptions for savings and an easing of interest.
Sincerely yours.
NICHOLAS P. SCONTRAS.
COASTAL STRUCTURES, INC.,
October 4, 1974.
Hon. EDMUND MUSKIE,
U.S. Senate,
Washington, D.C.
DEAR SENATOR MUSKIE: Coastal Structures, Inc., is engaged in the manufacture of panelized buildings and homes. Our product is such that we supply builders throughout New England in wood frame construction business. The whole effort is to build less expensive homes.
However, this is not enough. The building business needs funds. Those citizens needing adequate housing need funds to purchase. Senate Bill 3979 will help us all. The availability of mortgage money has been lacking for some time and the passage of this bill will ease this situation. I am also writing to our Representatives urging positive action on House Bill 16767.
We also feel that by making the first $1,000 of interest that is earned on savings in banking institutions tax exempt would help to keep savings in the banks and thus make even more money available for home mortgages.
Please cast your vote in favor of this bill. The housing industry is in serious trouble. Very truly
yours,
ROBERT C. WELLMAN, President.
BIDDEFORD, MAINE,
October 5, 1974.
Re: Brooke-Cranston bill (S. 3979), Steele bill (H.R. 16767)
Hon. EDMUND MUSKIE,
U.S. Senate,
Washington, D.C.
DEAR SENATOR MUSKIE: The above bills are to be acted on in the near future, and I strongly urge that you give them your wholehearted support. Being employed in a financial institution it is evident to me that something will have to be done, and soon, to boost the building industry through the availability of funds, and at rates conducive to lending.
Our financial institutions are dependent on deposits to provide a flow of money for mortgage lending, but the tax imposed on earned interest (from the first dollar) does not encourage savings for the simple reason that the middle-class worker's income is boosted by interest on deposit and taxable. A tax incentive in my opinion, would serve a dual purpose (1) slow down the economy (saving rather than spending) and (2) provide savings institutions with mortgage funds which can be put out at reasonable rates. Everyone involved in the building industry would automatically benefit by reasonable lending rates, starting with the contractor down to the consumer, and people with moderate savings would be encouraged to save just a "little bit more" if just a "little bit less" is taxed.
I sincerely hope that you and everyone involved in trying to straighten out the economy will take a long look and listen to the "voice of the people" rather than the "private interest". If there are reforms made (and I hope there will be) in the financing of political campaigns, the "people" rather than "private interest" will again elect our Senators, Congressmen on up to the President, and "people" are fed up with being the fall guy paying thru the nose and will express themselves at the polls.
Sincerely,
BLANCH A. RYAN.
NAPLES, MAINE,
October 5, 1974.
Hon. EDMUND MUSKIE,
U.S. Senate,
Washington, D.C.
DEAR SENATOR MUSKIE: I am employed by Stevens' Homes, Inc. of South Portland, Maine. I am a foreman for Mr. Stevens; engaged in the construction of residential homes in the southern Maine area. Mr. Stevens has informed me that this may no longer be because people can not get mortgages to buy his homes.
This is truly a sad state of affairs for my employer, myself, and many prospective buyers.
Senator, it is within your powers to do something about this situation. Please support Senate 3979 to increase mortgage money so that hundreds of people here can stay employed and our great state of Maine may continue to grow.
Thank you for your help and interest.
Sincerely yours,
DONALD R. BUSHELL.