Mr. WOODS. 1947.

Senator CAPEHART. Well, they had 15 percent from 1942 to 1947. Mr. WOODS. At least 20 percent.

Senator CAPEHART. The end result was to be no more and no less than 20 percent over their 1942 rents, is that correct?

Mr. WOODS. The way it finally came out in the wording, Senator, was over the June 30, 1947, rent. In other words, if they had gotten it before they were still entitled to some more.

Senator CAPEHART. In other words, the man that had no increase since 1942 would be entitled to 20 percent?

Mr. WOODS. At least, yes.

Senator CAPEHART. If he had received 10 percent up to June 1947, then he would be entitled to another 10 percent?

Mr. WOODS. No. If it would have been before that, he would be entitled to another full 20 percent.

Senator CAPEHART. After June 1947?

Mr. WOODS. After June 30, 1947.

Senator CAPEHART. So they were entitled to an increase of 20 percent. That was the intent of the law, wasn't it?

Mr. WOODS. Yes, sir.

Senator CAPEHART. Now, the only thing you had in your files to go by in respect to services and equipment was these original.registration forms, isn't that correct?

Mr. WOODS. Yes; that was our basic document.

Senator CAPEHART. Do you feel the law gave you the right to go in behind these registration forms and say to a man that when you made out your original form you were wrong?

Mr. WOODS. Well, we did feel we had that right, Senator, just as much as we have the right to go behind the actual cash amount they put on the registration if it was wrong and if it was proven wrong. But we assumed that you could make a mistake on these registrations. Sometimes that worked both ways. Many times, carelessly a landlord would mark "No" to service or equipment, only to have forgotten that he owned the refrigerator or stove-even as far as furnishing heat-and we permitted correction both ways. We not only permitted correction, but when substantial evidence came to our attention that he had made an error, we brought him in and asked him to correct it.

Senator CAPEHART. Then really what it amounts to is that you have been making the law apply to the individual renter, and individual groups, and individual localities, as you, in your judgment, saw fit?

Mr. WOODS. No; I don't think we have, Senator. I think that the fault it is the fault of the agency-was in the form in the beginning. It was too complicated in the beginning for everybody to completely understand that registration form. That's where the trouble came in the beginning.

But our general rule is that we take the registration, and in the absence of any evidence to show that that was not the true facts that existed on the base date, that is it from then on.

Senator CAPEHART. How do you account for this letter that went out under date of February 8, 1952? It says: "To members of the rent advisory board, all area office personnel, from Kale Alexander, area rent director, subject, Detroit Meeting, February 5 and 6, 1952."

Did you attend that meeting?

Mr. WOODS. Yes sir. I conducted it.

Senator CAPEHART. I hand you this exhibit E and ask you if that is a true statement of what took place. Is that an official document? Mr. Woods. This is a good account of the Detroit meeting, yes, sir. (The exhibit referred to follows:)

EXHIBIT E

AREA RENT OFFICE, Atlanta, Ga., February 8, 1952.

To: Members of the rent advisory board, all area office personnel.
From: Kale Alexander, area rent director.

Subject: Detroit meeting, February 5 and 6, 1952.

The meeting in Detroit was called to give the chairmen of the rent advisory boards and the regional and area rent directors an opportunity to exchange ideas and to present the problems confronting them in an effort to devise ways and means to eliminate backlogs, improve information, public relations, and rent advisory board activity.

The national office presented several new ideas, one of which is known as the tenant-consent petition, form D-1-A, and which will be discussed later in this memorandum.

Another technique is a proposed form, D-144, which is only in the formative stage. It is designed for the use of landlords to petition for rent increases in excess of 20 percent. A landlord should use this proposed petition only if a rent increase of 20 percent or more, over the June 30, 1947, maximum rent, has already been obtained by adjustment or lease for the relief of higher costs, and a further rent increase is required to cover the rise in costs that have occurred since the maximum rent date. The requirements are similar to the 5 (a) 18 procedure, but are less involved.

As stated, this procedure is not in use in any area office on an experimental basis, and may or may not be adopted.

This meeting reaffirmed the belief that rent control must be administered in each area on a basis that will receive public acceptance. What will work in Wisconsin may not work in Massachusetts. They ran us out of Wisconsin because we were too tight, and out of New York State because we were too liberal. The tenants in Boston and Newark are highly organized, and they object to liberal increases. If this policy is followed, the State of Massachusetts will throw out Federal rent control and enact State rent control.

Therefore, each area rent director should consult with his local rent advisory board and adopt a rent adjustment schedule which will be realistic, considering the needs in his locality, and one that will be publicly accepted. In Boston, the tenants object to increased cost adjustments for money spent since August 1, 1951, for repairs, painting, decorating, new roof, etc., and are of the opinion that the 20-percent granted is all the landlord is entitled to, regardless of the terrific increase in cost of materials, labor, etc., since 1942. On the other hand, Chicago allows increases in rents (no offset) for the above items. Therefore, each area must solve its own problems.

It was stressed and restressed that the RAB can do just about anything they wish to do, and that it is indeed rare where the national office, on appeal, has overruled the local rent advisory board.

In each speech that Tighe Woods makes, he calls attention to the fact that rent control is tied in with prices and wages; and as they rise, rents should be allowed to rise also.

Permit me now to convey to you the following policy procedures I learned from the Detroit meeting:

COMPLIANCE

1. Our goal is to obtain better compliance.

2. We should present to the RAB those cases where a settlement cannot be reached through a landlord-tenant conference, before we send it to litigation.

3. In willful cases, where the regulations demand treble damages, the RAB may assess the damage between single and treble.

4. Treble damages should be assessed against large or professional landlords. 5. Small landlords (especially women), who do not follow an order, may be assessed 11⁄2 or double damages (the area rent director should use discretion on a case basis).

6. In cases where the tenant says to the landlord, "The maximum rent is $75 per month. If you will let me have it, I will pay you $100 a month, the damages should be collected from the landlord with all the money going to the United States, and none to the tenant.

7. If litigation has a case and suit has not been filed, it may be recalled by the area rent director and referred to the RAB.

8. If litigation will not accept a case because the landlord is entitled to the 20 percent and says the court will allow the 20 percent anyway, or thinks the case too weak on the self-help angle, it should be sent to them regardless.

GOVERNMENT-OWNED PROJECTS RENTED TO EMPLOYEES

1. All Government-owned housing rented to Army, naval, civilian personnel, or contractors, comes under rent control on February 1, 1952, in all areas critical and noncritical (except new construction since February 1, 1947). This means public housing units, Atlanta Housing Authority (because they are partially subsidized by the United States, and the United States wishes to stop subsidizing housing projects).

2. They have 45 days from February 1, 1952, to register. do not call on them to register until after April 1, 1952.

However, if they fail,

3. If large projects, they register in triplicate, on their stationery, at rents they were receiving February 1, 1952. (If small projects, they may use D-804.) The rent received on February 1, 1952, is the rent.

4. The FHA insured rents will be accepted as established by the FHA in critical areas.

5. Public Housing units, Housing Authority units, Federal-aided projects, etc. are to be allowed the 20 percent, even though they were previously brought up to comparability.

6. Public Housing was told to increase their rents to comparability because Congress was tired of subsidizing these rents.

7. In some areas, tenants filed thousands of complaints when the 20 percent was granted on Public Housing units because the property had deteriorated or services had been decreased. If you run into such a situation, please proceed in the following manner:

(a) Do not revoke any orders without first giving the local representative a chance to repair the property or restore the services.

(b) Consider the class and construction of the property before considering to revoke the order (such as converted barracks).

(c) If the local representative will not cure the complaint, refer the case to the RAB before proceeding to revoke the order. If the RAB says O. K., then go This could become a national issue, and Board approval must be obtained.

ahead.

EVICTIONS

The only important discussion related to petitions for demolition: 1. First, consider "Is it to the public welfare," such as building a school, hospital, expanding a defense plant. If you think so, then issue the certificate. 2. As for parking lots, nonhousing rental, etc., then do not issue the certificate. 3. Good faith: If the facts cannot be determined in the area office, then refer the case to the RAB for an oral hearing to determine whether it is "retaliatory."

RENT ADVISORY BOARDS

The chief discussion on this subject is the failure of some of the rent offices to review a complaint from the landlord or tenant, and making no attempt to correct an error, or explaining to the landlord or tenant why the increase was a certain amount. Instead of the area office doing this, they tell the landlord or tenant to appeal to the Board. This results in bad public relations and puts an unwarranted workload on the Board, which results in the use of "panels" and an unjustified amount of oral hearing which could be prevented, if the area office tried to handle the complaint instead of passing the buck to the Board.

1. Very few offices use the stamp.

2. Or, have a rent advisory board approved rent schedule.

3. Or, present first rents on an individual basis to the Board.

4. Or, inspect the units before the case is presented to the Board.

An area office should attempt through correspondence or personal interview to correct errors and to explain the position of the area office, and, failing to satisfy landlord or tenant, then advise him of his right to appeal to the RAB or national office.

PRIOR OPINIONS

The meat of this subject is

1. Have the RAB approve a rental value schedule and give copies to the contact representatives, examiner-inspectors, etc., so that any person calling on the telephone or at the office may receive an on-the-spot decision. The final increase will be the amount given over the telephone or in person. This saves the landlord writing us a letter and the office writing back. Send a copy of the prior opinion to the tenant, if the unit is occupied.

TENANT-CONSENT PETITION, FORM D-1-A

This form was adopted in May 1951 and placed in effect in several offices on a trial basis in order to determine whether or not it should be adopted on a national basis.

The comments coming from the landlords and tenants in areas where it has been in operation is about 50 percent pro and 50 percent con. It is designed to promote better relations between landlords and tenants, to eliminate docketing and a waiting period from 7 to 14 days.

When the form is received, it is screened. If it is in order, and there are sufficient grounds and the increase requested do not exceed the amount allowed under the adjustment schedule, it is stamped and mailed to landlord and to tenant, with one copy retained in the area office. If the requested amount is less than the allowable amount, the increase granted is the requested amount, the case is not docketed.

The procedure is optional with the landlord, as he may use Form D-1-B if he wishes, and the case will be processed under the D-1-B procedure. The D-1-B procedure may also be used if the tenant refuses to sign the D-1-A consent. The results of the experiment with the D-1-A are as follows:

1. A review of the D-1-A petitions filed showed coercion in only 5 percent of the cases.

2. The tenants succeeded in getting repairs made when the landlord filed for an increase due to an increase in services.

3. The publicity was on the ground that the agreement must not exceed the allowable amount under the schedule and was therefore favorably received by the public.

The reaction to the adoption of this procedure was about half for and half against it.

In my opinion, the form will work if it is confined to increases for major capital improvements, increases for services, furniture, furnishings, and equipment, increase in the number of subtenants, and increase in the number of people living in the dwelling unit.

It may also work for increased cost adjustments, but I believe that no adjustment under 5 (a) 11 (i) should be permitted on this form, because it is too dangerous, especially where the landlord and tenant agree to a new rent that is far in excess of comparability, and the office must deny the petition. Would the reaction from the landlord and tenant be-"We agree on a rent, and a Government bureaucrat says we can't have it"?

Senator CAPEHART. Now, let's go down to the fourth paragraph. It says:

This meeting reaffirmed the belief that rent control must be administered in each area on a basis that will receive public acceptance. What will work in Wisconsin may not work in Massachusetts. They ran us out of Wisconsin because we were too tight, and out of New York State because we were too liberal. The tenants in Boston and Newark are highly organized, and they object to liberal increases. If this policy is followed, the State of Massachusetts will throw out Federal rent control and enact State rent control.

What did you mean by that paragraph?

Mr. Woods. What was meant and those are not my words, Senator is that real estate customs vary so widely from community to community that we must allow the local people, our local rent advisory boards, to decide, within the broad framework of the law, how particular customs are to be handled in connection with rent control. That's the way I see it.

Senator CAPEHART. Didn't you make the best possible case in this whole wide world that could be made, in that paragraph, in just what you said then, that the Federal Government would get completely out of rent control and let local communities, States, and cities, handle it?

Mr. Woods. With one big difference. We have found in the way it works, Senator, that these local boards do not change the law. This law that is backed by the Congress and by the courts, they have that backing. What they do is merely make the law conform to local

customs.

Senator CAPEHART. I gather from what you said up to this time and in reading this paragraph, that what happens is that you make the law comply with local customs and as the advisory boards may want to do it. You are not particularly following the law. There isn't any law; you are doing it as you see fit.

Mr. WOODS. No.

Senator CAPEHART. Let's go over to the next page here, page 2, where it says "Compliance":

4. Treble damages should be assessed against large or professional landlords. 5. Small landlords (especially women), who do not follow an order, may be assessed one and a half or double damages (the area rent director should use discretion on a case basis).

Are we to understand from those two paragraphs that we've got one law in America for big fellows and another law for the little fellows, and another law for the women, and that you fellows can do anything.you want?

Mr. WOODS. No, Senator.

Senator CAPEHART. Isn't that what it says?

Mr. Woods. This document was written to our personnel and to rent advisory board people, who know the basic law. What isn't spelled out there is that the large operator, professional landlord, is presumed to know the law, and if he knows the law and violates, it is our policy to throw the book at him.

Senator CAPEHART. Do you know of any honest court in the land that goes on that basis, that there is one law for the big fellow and another law for the little one?

Mr. Woods. It isn't that. I am going to ask Mr. Dupree to explain, but in layman's language, I think that all of our courts temper their decisions by the innocence of the violator. We have always followed that policy. In other words, someone who makes an overcharge innocently we don't feel should be punished to the same extent as the deliberate violator. That's all that means. The law is the same.

Senator CAPEHART. What do you mean by No. 8 there? It says: If litigation will not accept a case because the landlord is entitled to the 20 percent and says the court will allow the 20 percent anyway, or thinks the case too weak on the self-help angle, it should be sent to them regardless.

What did you mean by that?

Mr. Woods. Senator, when I saw this it puzzled me too, so I called Mr. Alexander, and there is a very important word left out of there. It was to be sent back to the rent advisory board. "Them" doesn't refer to the lawyers; it refers to the rent advisory board.

Senator CAPEHART. What do you understand that No. 8 to mean?