National Association of Manufacturers, statement received.. National Clay Pipe Institute, statement of E. J. Newbould, vice president.. National Electrical Contractors Association, statement submitted.. National Society of Professional Engineers and Consulting Engineers Council of the United States, statement of Donald L. Chapman.. National Woodwork Manufacturers Association, Inc., statement of Charles San Francisco, city of, county supervisors resolution_ United Brotherhood of Carpenters and Joiners of America, letter from Wil- 222 Urban Housing Constructors, Inc., letter, with sample HUD forms, from Davis-Bacon determinations by craft and type of wage rate prevailing.. 422 412 Percent distribution of onsite wages, materials, and other costs for each 172 Quantico project wage data.. 418 Real output per man-hour indices for contract construction, 1947-68-- 323 242 411 IMPROVED TECHNOLOGY AND REMOVAL OF PREVAILING WAGE REQUIREMENTS IN FEDERALLY ASSISTED HOUSING TUESDAY, JUNE 20, 1972 U.S. SENATE, COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS, SUBCOMMITTEE ON HOUSING AND URBAN AFFAIRS, Washington, D.C. The subcommittee met, pursuant to notice, at 10:10 a.m., in room 5302, New Senate Office Building, Senator John G. Tower presiding. Present: Senators Sparkman (chairman), Tower, Brooke, and Brock. Senator TOWER. The committee will come to order. I have prepared a rather lengthy statement; however, in the interest of time, I will not read it, but ask that it be appended at this point in the proceedings. (The complete statements of Senators Tower and Sparkman follow, as though read, and are followed by a reprint of the bills being considered :) OPENING STATEMENT OF SENATOR SPARKMAN I will make this introduction brief because our witness list is full, and there is, undoubtedly, a lot to be said during these 4 days of hearings. These hearings are being held for the purpose of hearing testimony on two bills: S. 3654, introduced by Senator John Tower; and S. 3373, introduced by Senator Bill Brock. These bills are related in objective and in origin. They both seek to reduce the cost of housing and so to make it more possible for the average American family to secure decent housing in a suitable neighborhood. They both were raised before this committee during its last executive session, where it was agreed that additional hearings would be called to consider further the proposals this session. Senator Tower's bill would repeal the provisions of the National Housing Act and the U.S. Housing Act of 1937 which authorize the Department of Labor to establish wage rates applicable to jobs on federally assisted housing projects. There is, as you know, a long history to the effort to protect local wage standards through State and Federal legislation requiring the payment of prevailing wage rates on Government-assisted construction projects. My history book tells me that State laws were first passed in the 1920's, and that the first Federal law was enacted with the com bined support of the Congress and the executive branches during the administration of President Herbert Hoover. The Federal law, known as the Davis-Bacon Act, was amended significantly in 1935 and somewhat less so in 1963. But, while the law has remained basically the same. for many years now, the General Accounting Office has reported to the Congress that improvements were needed in its administration and, 1 year ago, issued a report based on their studies over the past decade. I am particularly pleased that we shall have the benefit of the work of the GAO for these hearings. Senator Brock's bill would promote the use of improved technology in housing by providing individuals, through civil court action, with relief from local laws or regulations which restrict the use of new materials or techniques, and do not contribute to health and safety. There is also a considerable background to this measure which focuses on the impact of local building codes and work practices. This committee has considered these issues many times. Only this year, we approved, and the Senate passed, a provision to establish a National Institute of Building Sciences in order to bring better order in the field of housing codes. I, personally, am very hopeful that this measure, contained in S. 3248 the proposed Housing and Urban Development Act of 1972, and in the bill now being considered by the Banking and Currency Committee of the House, will solve a number of the problems that we have found troublesome in the past in developing programs to meet our housing goals. But I do not expect that this will happen overnight, or that this measure will, alone, solve all of our problems. It is important, therefore, for the committee to hear the views of the many competent witnesses that have assembled to communicate their views, and to consider carefully the proposals which Senator Tower and Senator Brock have made to improve our Federal housing efforts. OPENING STATEMENT OF SENATOR TOWER I am indeed pleased that the Subcommittee on Housing and Urban Affairs has determined to conduct these 4 days of hearings on two most important pieces of legislation: The first, a bill introduced by Senator Bill Brock (S. 3373) which would provide a civil remedy for any person who, in any federally assisted housing program, is adversely affected by codes or work agreements, if such code or practice is unrelated to health or safety and restricts the use of new techniques or materials in housing construction or rehabilitation; and, the second, a bill introduced by me (S. 3654) which would remove certain types of federally assisted housing construction from the prevailing wage requirements of the Davis-Bacon Act. The future of housing in this Nation concerns me. As Congress leads the Federal Government into ever-expanded housing programs, and as Federal subsidies for construction of these facilities progressively deepen, I feel it incumbent that every possible effort be directed toward reducing the unnecessary costs which burden the programs and ultimately the taxpayer. The costs of housing with which we must deal are basically three in number: The price of land, materials, and labor. In the Housing and Urban Development Act of 1972 (S. 3248) which passed the Senate on March 2 of this year, the subcommittee addressed itself to the cost of land transfers and included within the legislation several provisions governing closing costs. It is entirely appropriate, therefore, that we today turn to deal with the costs of materials and labor. The Brock bill, legislation which I have cosponsored, has as its purpose the elimination of certain restrictive codes and work practices which capriciously boost the cost of housing by preventing the utilization of advanced technologies in construction. In introducing this legislation, Senator Brock expressed the belief that only through the use of industrialized housing techniques and innovative materials could the costs of homes be returned to the range of the average American family. I fully share the Senator's conviction. In far too many instances, manufacturers of industrialized housing have been thwarted in efforts to market their products by traditional practices void of purpose in the 1970's. I trust that those who will appear before this subcommittee during the remainder of the week will share with us some of the frustrations they have experienced in attempting to utilize new techniques in producing lower cost housing for the American public. The passage of the Brock bill would contribute significantly toward the erasure of the cause of these frustrations and point the way toward the construction of a larger volume of federally assisted housing with a smaller expenditure of Federal revenues. The Brock and Tower bills share an identical purpose: the reduction of residential construction costs in order that those of low- and moderate-income might benefit from the increased housing stock resulting from decreased Federal expenditures per unit. More available houses at lower costs of construction would dictate a more reasonable purchase price. The single purpose is achieved, however, via contrasting routes. The Brock bill, on one hand, being aimed at the utilization of modern-day techniques; and the Tower bill, on the other, aimed at eliminating a timeworn, anachronistic provision from the Federal housing statutes. When enacted during the depression days of 1931, the Davis-Bacon Act could boast merit in expressing the public policy that local wages should not be depressed by the expenditure of Federal funds on Federal projects. At the same time, however, it can be argued today quite convincingly that public policy demands that local wages should not be inflated by the expenditure of Federal funds on federally assisted projects. The authors of the Davis-Bacon Act emphasized during debate in the House and Senate prior to its passage that both labor and local contractors were being wronged and should be protected. The practice of southern contractors underbidding their northern competitors for Federal construction projects in the north and then importing the cheaper southern labor to the northern site of the project, hurt both local labor and management. Conversely, today's administration of Davis-Bacon has resulted in big-city contractors outbidding local contractors on federally assisted projects in smaller communities, for only they are able to bear the inordinately high wage scales issued by the Department of Labor— scales above the actual prevailing wage existing in the community. |