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end of developing some private home ownership but at the expense of the junior tenant in a duplex and three tenants in a quadruplex. It has other inequities such as a junior tenant in one building might be senior to most senior tenants in other buildings. In fact, the Committee was informed that in adjacent quadruplexes the senior tenant of one was junior to all tenants of the other quadruplex. All the inequities encountered in disposing of unsplittable duplexes to the senior tenants would be compounded in selling quadruplexes to senior tenants. The Committee is therefore unable to recommend this procedure. However, attention is invited to the possibility under the procedure described by the Committee for occupants to assign their priority interests to a single occupant who could be the senior tenant or another tenant. The onus of Government selection of a privileged individual is removed and the selection is made by agreement of the affected occupants.

With regard to cooperatives the procedure described above will, on balance. be salutary. It is true that procedure will remove the exclusive non-competitive position that cooperatives enjoy under the present law. However, it also makes it much easier for a cooperative to conclude a purchase. A cooperative to qualify for a priority purchase will no longer have to exclude occupants who do not qualify as project-connected persons. Also, to conclude a purchase a cooperative will not be required to show membership equal to 100% of the housing units it is acquiring-70% will be legally sufficient.

The procedure described also makes no provision for special legal assistance to purchasers nor for tenant improvement credit in the purchase of apartment sales lots. The latter is considered inappropriate. It is also considered that allowance of such a credit could unduly complicate the disposal procedures. In this connection, the Committee notes that Public Law 87-719 did not authorize such credits in disposal of apartment units to cooperatives.

Some residents have expressed the view that the Government should provide more legal assistance during the sale of apartment buildings and should simplify the sales procedures. However, the Committee believes that there is no feasible way to reduce the sale procedure for apartment buildings into multiple ownership to the simpler procedures applicable to the sale of a house to an individual. At a minimum, multiple purchasers need some binding agreement between themselves to identify their rights and obligations and to create an entity to take title. If mortgages are involved, the complications increase. The Committee does not believe that the Government should become involved in providing such legal instruments but it should clearly outline the minimum requirements before transfer of title can take place.

The Committee believes the procedure described above will indirectly benefit those who have expressed concern that the amount of rental property may become inadequate and that there may be substantial rent increases. Moreover, there is some indication that the tight housing situation at Los Alamos is gradually alleviating. The total housing units has increased from 3800 in April 1962 to more than 4300 in December 1966. Also, the vacancy rate in Government-owned family rental units (excluding the Denver Steel houses) has increased from 3% in April 1962 (2966 units with 101 vacant) to 10% in December 1966 (739 units with 75 vacant). Nonetheless, the Board of Education is concerned over the availability of rental housing for new teachers coming into the system. The Board suggested that the Commission consider withholding a group of quadruplex units from sale and reserve them for use by teachers and other professional staff members. In view of the dislocation that this would cause and the impingement upon the possible purchase right of the occupants the Committee regards this as a drastic suggestion and does not recommend it. However, the Committee believes that even with the broadened base for priority sales which it is recommending substantial rental housing will continue to be available in the community. It should be noted that under the sales procedures recommended by the Committee apartment buildings can be purchased even though 30% of the units are vacant or occupied by leasees who do not wish to participate in the purchase.

It seems inevitable that rental property sold to investors will be subject to rental increases in order that the investors may realize a reasonable profit on their investment. The extent of increases is unpredictable. However, if mortgages on investment property are insured by the FHA that agency under certain programs conditions its insurance on agreement that rents charged will be subject to its approval. It would also be desirable if the disposal agency offered apartment buildings which are to be sold to the highest bidder as separate lots and did not permit alternate bids on an all-or-none basis. In this way each lot

could be sold to the highest bidder. This should increase the opportunity for more than one investor to acquire the remaining rental properties at Los Alamos. It would, therefore, tend to encourage competition in rental rates, an important factor in discouraging unreasonable rents. However, in the event the community in the future believes that rents have become excessive the local government may take appropriate rent control action. This too is drastic action and may tend to discourage construction of any necessary additional rental housing.

NEED FOR INFORMATION PROGRAM

Finally, the new disposal procedures recommended by the Committee will provide occupants and project-connected persons who wish to participate in ownership of multifamily housing considerable flexibility in choice of method of acquisition. For example, they may purchase a building as tenants in common; they may form a corporation including a cooperative corporation to effect the purchase; or they may assign their priority rights to a single occupant who would become the sole owner. The Committee understands that, in general. FHA mortgage insurance would be available for these various types of acquisition. However, in order for potential purchasers to make knowledgeable decisions on acquisitions, they will need to understand the advantages and disadvantages of the various options available in method of acquisition and financing. A strong public information program by the Commission and the Department of Housing and Urban Development will serve some of this need. Also, the Committee believes it would be most helpful if the County designated an agency to work with the AEC and the DHUD in developing and carrying out such a program.

RECOMMENDATIONS

The Committee recommends that:

1. The Atomic Energy Community Act of 1955, as amended, be further amended to provide the legal basis for the recommended disposal program; 2. Following amendment of the Act the Commission's regulations and procedures be amended to carry out the recommended disposal program; and 3. A public information program be developed, preferably with the assistance of the Los Alamos Board of County Commissioners, to inform residents of the details of the disposal program.

WILLIAM O. SANFORD.

R. E. SCHREIBER.
JOHN C. RYAN.
FRANKLIN N. PARKS.

J. H. MANLEY.

RICHARD T. CURTIS.

March 30, 1967.

APPENDIX 4

VIEWS OF ATOMIC ENERGY COMMISSION (JULY 27, 1967) AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (AUGUST 1, 1967) ON H.R. 9199 (S. 1623)

Mr. JOHN T. CONWAY,

ATOMIC ENERGY COMMISSION,
Washington, D.C., July 27, 1967.

Executive Director, Joint Committee on Atomic Energy,
Congress of the United States

DEAR MR. CONWAY: The Commission is pleased to provide the Joint Committee on Atomic Energy with its views on S. 1623 and H.R. 9199 identical bills "To amend Section 58 of the Atomic Energy Community Act of 1955, as amended”. We understand that the bills were introduced by Senator Anderson and Congressman Morris, respectively, to carry out the apartment house disposal program recommended in the report of the Committee on Disposal of Multiple Family Housing at Los Alamos. That report discussed problems that had arisen in connection with the proposed disposal of the apartment houses at Los Alamos under the authority of Section 58 of the Atomic Energy Community Act and suggested a program designed to alleviate those problems.

The report indicated that in accordance with Section 58, the Commission had established a priority system for the sale of apartment houses to qualifying cooperatives. Among other things, to qualify for purchase of an apartment house, a cooperative was required (1) to include only project connected persons in its membership (as defined in the Act this did not include retired employees of the project or widows of project employees); (2) to have at least five members even though most of the apartment houses at Los Alamos are four unit structures; and (3) to demonstrate that it had established an adequate management program. Large cooperative organizations occupied a favorable position for obtaining the priority right to purchase a large number of apartment houses. This resulted in leaving the occupants of apartment houses essentially with two choices: to join a large cooperative or to be dispossessed and these alternatives proved distasteful to many members of the Community. The report recommended a program to overcome the inequities stemming from the existing law and at the same time to provide a better balance between central, and in some way, conflicting objectives expressed in the Community Act, namely termination of Government ownership and management of the Community in an expeditious manner with a minimum of dislocation while enabling a greater number of persons to participate in home ownership. The program recommended in the report would enable the Commission to establish a procedure for the sale of apartment houses which would afford the occupants a choice of methods of home ownership, provide a reasonable expectation of home ownership, lead to a minimum of dislocation, and promote expeditious disposal of the multi-family housing at Los Alamos.

The proposed bills would authorize the Commission to establish a disposal program for the apartment houses at Los Alamos as recommended in the Committee Report. We believe either bill, if enacted, will alleviate the adverse conditions which led to Community dissatisfaction with the existing disposal program. At the same time, we believe that the disposal program authorized by these bills will provide a more equitable basis for the sale of the apartment houses. We, therefore, recommend enactment of either S. 1623 or H.R. 9199. In this connection we believe the effect of the parenthetical phrase in the first sentence of the second proviso of section a. is not entirely clear. However, we understand it to mean that the entity referred to must consist of at least one occupant and may include either or both project-connected persons and persons residing in the Community.

The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the Administration's program. Sincerely yours,

R. E. HOLLINGSWORTH,
General Manager.

THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT,
Washington, D.C., August 1, 1967.

Hon. JOHN O. PASTORE,

Chairman, Joint Committee on Atomic Energy,
Washington, D.C.

DEAR MR. CHAIRMAN: This is in further reply to your request for the views of this Department on S. 1623 and H.R. 9199, identical bills "To amend section 58 of the Atomic Energy Community Act of 1955, as amended."

These bills would authorize the Atomic Energy Commision to grant to occupants, project connected persons, and persons residing in the community at the time of offering for sale, such priority interests and priority rights for the purchase of apartment houses at Los Alamos as the Commission determines to be fair and reasonable.

The discretion of the Commission, however, would be subject to two statutory provisions. First priority right to purchase would only be available to an occupant or group of occupants (or an assignee of the priority interests of such occupants) who has obtained the priority interests of at least 70 percent of the residents of the apartment house. Second priority right to purchase would be available only to an entity whose membership or ownership consists of at least one occupant, as well as project connected persons and persons residing in the community. Such membership or ownership must equal in number at least 70 percent of the units in the apartment house.

Occupants who do not wish to participate in the purchase of an apartment house would be given the right to obtain a lease from the government for the continued rental of their units for up to a maximum of 15 months from the time their apartment building was first offered for sale. The financing and indemnity provisions provided in other sections of the Atomic Energy Community Act would be applicable to priority sales of apartment houses.

This Department favors enactment of S. 1623 and H.R. 9199. These bills would permit disposal of the government-owned apartment buildings in Los Alamos in a manner which would afford Los Alamos residents a wider range of choice in methods of homeownership then that available under present law. It also contains provisions that would reduce the dislocating effects the sale of these apartment houses could have on present tenants. It would give retired employees and widows of project employees, an opportunity not now available, for them to purchase an ownership interest in their dwellings.

The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the Administration's program.

Sincerely yours,

ROBERT C. WEAVER.

APPENDIX 5

ADDITIONAL CORRESPONDENCE BETWEEN THE JOINT COMMITTEE AND
AEC-HUD CONCERNING H.R. 9199 (S. 1623)

CONGRESS OF THE UNITED STATES,
JOINT COMMITTEE ON ATOMIC ENERGY,
Washington, D.C., August 17, 1967.

Mr. R. E. HOLLINGSWORTH,

General Manager,

U.S. Atomic Energy Commission,
Washington, D.C.

DEAR MR. HOLLINGSWORTH: In connection with the hearing on August 11, 1967 before the Subcommittee on Communities concerning H.R. 9199 (S. 1623), I would appreciate the AEC's responses to the attached list of questions. These questions are primarily related to testimony delivered by the AEC's witnessesMr. Herman Roser and Mr. Franklin N. Parks-at this hearing.

In addition, please furnish to the Subcommittee the following information: (1) The AEC's views on the letter from Mr. John D. Rogers to Congressmen Morris and Hosmer, and Senator Bennett, dated August 11, 1967, as amplified by Mr. Rogers during the hearing. Please include in your response the AEC's views as to the desirability of permitting a first priority purchase to be made on the basis of the priority interests of a percentage of the occupants of a multi-family dwelling, as opposed to a percentage of the units in such dwellings: (2) The AEC's views as to an appropriate definition of the phrase "persons residing in the community at the time of offering of an apartment house for sale", which would appear in section 58 of the Atomic Energy Community Act of 1955, as amended, as it would be further amended by H.R. 9199 (S. 1623);

(3) A report concerning (a) the number of rental units currently available in Los Alamos; (b) the estimated effect of enactment of H.R. 9199 (S. 1623), and subsequent sale of the multi-family units, upon the apartment rental market in Los Alamos, including number of units available and level of rents; (c) a comparison of the expected rental market in Los Alamos with one or more other communities in New Mexico of reasonably similar size, and with the communities of Oak Ridge and Richland; and (d) the desirability of withholding a portion of the multifamily units from sale, and reserving them for rental purposes.

(4) A report concerning the cost and feasibility of splitting the quadruplexes in order to sell these units as single family dwellings.

Thank you for your assistance in this matter. Of course, if you have any other comments to offer concerning this proposed legislation, they would be welcome. Since the responsibilities of the AEC and of the Department of Housing and Urban Development relative to sale of the multi-family dwellings at Los Alamos are so closely related, I suggest that the AEC obtain HUD's comments in responding to this letter.

A reply at your earliest convenience would be appreciated in order that consideration of H.R. 9199 (S. 1623) may be expedited.

Sincerely yours,

THOMAS G. MORRIS,

Chairman, Subcommittee on Communities.

QUESTIONS FOR MR. ROSER

1. From your experience, does it seems clear that a large percentage of the occupants of the multi-family dwellings desire to participate in the purchase of their homes, on one basis or another? More specifically, if H.R. 9199 (S. 1623) were enacted, what is your estimate of the type and quantity of multi-family dwellings that would be sold on a first or second priority basis?

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