STATEMENT BY JOHN J. REED, DEPUTY ASSISTANT SECRETARY OF DEFENSE (FAMILY HOUSING)

Mr. Chairman, members of the committee, it is a distinct pleasure to appear before you to further discuss the military family housing program of the Department of Defense. Secretary McNamara and General LeMay have thoroughly covered our new construction requirements. My comments will be directed toward the total housing program for fiscal year 1964, the financial magnitude of the program, and our overall stewardship of the assets provided by the Congress. Last year the Congress authorized the establishment of a military family housing management account. This account provides the mechanism to simplify the control and administration of the funds appropriated for this purpose. Funds for housing currently come from 16 different appropriation and fund sources, and are placed into the account for three major functions: construction, debt service, and operation and maintenance. These moneys are in turn allocated to the services and agencies to perfrom the job in the housing areas based upon development and justification of requirements for each of the categories. We have found the account to be an extremely effective management tool for the control of housing moneys.

This year we are proposing a single appropriation for all costs of housing. We feel that a single appropriation will not only simplify congressional review of the housing program but will further increase the effectiveness of our procedures for management of these funds. The fiscal year 1964 proposed single appropriation for military family housing includes

1. Construction of 10,140 additional family housing units.

2. Construction of 1,539 trailer court spaces.

3. Acquisition and rehabilitation of 2,023 Wherry housing units.

4. Improvements to adequate quarters.

5. Conversion of 1,418 substandard quarters to 904 adequate public quarters.

6. Minor construction, planning, and rental guarantee payments.

7. Operation and maintenance of the housing inventory.

8. Leasing.

9. Payment of Capehart, Wherry, and Commodity Credit debts, and servicemen's mortgage insurance.

For fiscal year 1964 we are proposing funding of 2,440 units authorized in prior fiscal years, in addition to the 7,700 units authorized this year. This gives a total new housing construction program for this year of 10,140 units broken down by service as shown below.

I would like to reiterate that this year's program is the result of a careful scrutiny of our entire 5-year requirements and the attempt on our part to maintain a steady level of effort over these 5 years in order to satisfy our outstanding housing deficits. I would like to recall Secretary McNamara's statement that the housing program for fiscal year 1964 does not contain any units justified solely on the basis that existing community support is either too costly or too distant from the base, such requirements have been deferred to later years.

We have found that some military families prefer living in their own trailers. To provide for these people who own trailers, we are proposing the construction of 1,539 trailer spaces for the military departments as shown here.

These

This is only done when suitable private facilities are not available. spaces will be rented to military personnel. These projects are planned so that the cost of construction will be amortized by the rental charge in approximately 15 years. I would like to note here that the 500 trailer spaces shown for the Air Force foreign program are to be located in Libya and Turkey to accommodate Government-owned trailers which are being relocated from Morocco. Funding for shipment, repair, and installation of these particular trailers at their new locations is contained in this year's proposed legislation.

This year should complete the Wherry acquisition program. Within our appropriation requests are funds for the acquisition and rehabilitation of 2,023 Wherry housing units. This will leave 2,838 Wherry units from the original Wherry program of 83,742 units which the Department of Defense has no plans to acquire.

Another significant portion of the family housing program deals with improvements to existing public quarters. The authorization act contains authority to do $5,771,000 of such improvements for all the military departments. Improvements such as increasing the capacity of electric, plumbing, and heating systems, combining units to produce more bedrooms, and improving the general livability of the quarters will be accomplished. Before any improvements are accomplished, they will be carefully screened on a case basis to assure that each is sound and required.

We also plan in fiscal year 1964 to convert 1,418 substandard quarters to 904 adequate public quarters. Also included in the appropriation request are funds for minor construction, planning, rental guarantee payments, operation and maintenance, leasing, payment of Capehart, Wherry, and Commodity Credit debt, and servicemen's mortgage insurance premiums.

Appendix A to this statement shows the complete funding picture for all military family housing for fiscal year 1964. This year's program will require a total single appropriation of $685.3 million. In addition, anticipated reimbursements which we are authorized to use for housing purposes amounting to $5.2 million bring our total funding plan for fiscal year 1964 to $690.5 million. At the conclusion of this statement, we will be most happy to explain in detail any of the line items on appendix A. Because of the committee's special interest in the management of family housing, we would like now to mention some of our management controls, policies, and practices.

We have found that the authority to lease is an effective tool in obtaining housing in certain instances for our military personnel and offers a desirable alternative to new construction. Existing leasing authority, which has just been extended through fiscal year 1965 at a reduced scope will be used to provide quarters primarily for tactical locations or where the mission of the activity is of temporary tenure.

There is an existing statutory requirement that inadequate public quarters and Lanham Act units be improved to standards of adequacy, or be demolished or otherwise disposed of by July 1, 1965. In complying with this requirement, we concur with the desire of Congress that slum-type housing in our inventory