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B-128522, AUGUST 8, 1956, 36 COMP. GEN. 98

B-128522 Aug 08, 1956
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THAT GOVERNMENT-OWNED RESIDENTIAL PROPERTY SHOULD BE SOLD AT VALUES WHICH ARE BASED ON MORALE AND OTHER FACTORS SPECIFIED IN A RESOLUTION ADOPTED BY THE JOINT COMMITTEE ON ATOMIC ENERGY. 1956: REFERENCE IS MADE TO LETTER OF JULY 6. (C) THE MAINTENANCE OF CONDITIONS WHICH WILL NOT IMPEDE THE RECRUITMENT AND RETENTION OF PERSONNEL ESSENTIAL TO THE ATOMIC ENERGY PROGRAM. STATES THAT ESTABLISHED PROFESSIONAL STANDARDS AND TECHNIQUES WERE UTILIZED IN MAKING THE APPRAISALS IN QUESTION. THAT THE FACTORS LISTED IN THE COMMITTEE RESOLUTION WERE NOT TAKEN INTO ACCOUNT IN SUCH APPRAISALS. IT SHOULD BE UNDERSTOOD THAT WHILE WE HAVE RECENTLY UNDERTAKEN AUDIT ACTIVITY INVOLVING THE OPERATIONS OF THE FHA IN THE RICHLAND AREA WE ARE NOT PRESENTLY IN A POSITION TO EXPRESS ANY OPINIONS AS TO THE APPRAISALS ALREADY MADE OR THE TECHNIQUES UTILIZED IN MAKING THEM.

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B-128522, AUGUST 8, 1956, 36 COMP. GEN. 98

PROPERTY - ATOMIC ENERGY RESIDENTIAL PROPERTY - SALES - VALUE IN THE ABSENCE OF A LEGISLATIVE INTENT IN THE ATOMIC ENERGY COMMUNITY ACT OF 1955, THAT GOVERNMENT-OWNED RESIDENTIAL PROPERTY SHOULD BE SOLD AT VALUES WHICH ARE BASED ON MORALE AND OTHER FACTORS SPECIFIED IN A RESOLUTION ADOPTED BY THE JOINT COMMITTEE ON ATOMIC ENERGY, THE PROPERTY MUST BE SOLD AT APPRAISED VALUES BASED ON THE CURRENT FAIR MARKET VALUE OF THE PROPERTY.

TO THE ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY, AUGUST 8, 1956:

REFERENCE IS MADE TO LETTER OF JULY 6, 1956, FROM THE ACTING ADMINISTRATOR, REQUESTING OUR OPINION WHETHER THE APPRAISALS OF RESIDENTIAL PROPERTY IN RICHLAND, WASHINGTON, MADE BY THE FEDERAL HOUSING COMMISSIONER PURSUANT TO THE ATOMIC ENERGY COMMUNITY ACT OF 1955, 69 SRAT. 471, 42 U.S.C. 2301, PROPERLY MAY BE ADJUSTED DOWNWARD TO REFLECT CONSIDERATION OF CERTAIN FACTORS LISTED IN A RESOLUTION ADOPTED BY THE JOINT COMMITTEE ON ATOMIC ENERGY ON JUNE 28, 1956.

THE COMMITTEE RESOLUTION STATES THAT IN ENACTING THE ATOMIC ENERGY COMMUNITY ACT OF 1955, THE CONGRESS INTENDED THE FEDERAL HOUSING COMMISSIONER, IN MAKING APPRAISALS UNDER THE ACT, TO CONSIDER THE FOLLOWING FACTORS IN ADDITION TO SUCH MATTERS AS WOULD GENERALLY BE CONSIDERED BY APPRAISERS IN DETERMINING CURRENT FAIR MARKET VALUE:

(A) THE CONTINUED MORALE OF THE PRIORITY PURCHASERS UNDER SAID ACT;

(B) THE POSSIBILITY THAT DISPOSAL OF THE PROPERTIES WOULD RESULT IN THE DISLOCATION OF FAMILIES ENGAGED IN WORK ESSENTIAL TO THE NATIONAL SECURITY;

(C) THE MAINTENANCE OF CONDITIONS WHICH WILL NOT IMPEDE THE RECRUITMENT AND RETENTION OF PERSONNEL ESSENTIAL TO THE ATOMIC ENERGY PROGRAM, AND

(D) THE DISPOSAL OF THE PROPERTIES IN AN EXPEDITIOUS MANNER.

THE LETTER OF JULY 6, 1956, STATES THAT ESTABLISHED PROFESSIONAL STANDARDS AND TECHNIQUES WERE UTILIZED IN MAKING THE APPRAISALS IN QUESTION, AND THAT THE FACTORS LISTED IN THE COMMITTEE RESOLUTION WERE NOT TAKEN INTO ACCOUNT IN SUCH APPRAISALS. IT SHOULD BE UNDERSTOOD THAT WHILE WE HAVE RECENTLY UNDERTAKEN AUDIT ACTIVITY INVOLVING THE OPERATIONS OF THE FHA IN THE RICHLAND AREA WE ARE NOT PRESENTLY IN A POSITION TO EXPRESS ANY OPINIONS AS TO THE APPRAISALS ALREADY MADE OR THE TECHNIQUES UTILIZED IN MAKING THEM.

CHAPTER 3 OF THE ATOMIC ENERGY COMMUNITY ACT DEALS WITH THE APPRAISALS AND PRICES OF PROPERTY TO BE SOLD. SECTION 32 REQUIRES THE APPRAISALS TO BE MADE BY THE FEDERAL HOUSING COMMISSIONER. THAT SECTION FURTHER PROVIDES THAT SUCH APPRAISALS SHALL CONSTITUTE THE BASIS FOR INSURANCE UNDER THE NATIONAL HOUSING ACT UNTIL SUCH TIME AS THE COMMISSIONER SHALL FIND THAT "THE APPRAISAL VALUES GENERALLY IN THE COMMUNITY NO LONGER REPRESENT THE FAIR MARKET VALUES OF THE PROPERTIES.' SECTION 33, BASIS OF APPRAISAL, SPECIFICALLY STATES THAT- -

* * * THE APPRAISED VALUE SHALL BE THE CURRENT FAIR MARKET VALUE OF THE GOVERNMENT'S INTEREST IN THE PROPERTY.

THE COMMITTEE REPORT ON SECTION 33 STATES AS FOLLOWS ( SENATE REPORT NO. 1140, 84TH CONGRESS, PAGE 9):

THIS SECTION SETS FORTH THAT THE APPRAISED VALUE SHALL BE THE CURRENT FAIR MARKET VALUE OF THE GOVERNMENT'S INTEREST IN THE PROPERTY. MANY PERSONS IN BOTH OAK RIDGE AND RICHLAND WERE SUGGESTING THAT THE METHOD OF ARRIVING AT THE CURRENT FAIR MARKET VALUE BE SPECIFICALLY SPELLED OUT IN THE STATUTE. IN VIEW OF THE FACT THAT AN APPRAISER'S EVALUATION OF PROPERTY CONSIDERS ALL OF THE FACTORS WHICH CAN AFFECT THE ECONOMIC STATUS OF THE PROPERTY IN THE FUTURE, IT WAS NOT THOUGHT RIGHT THAT ANY OF THE PROBLEMS RAISED BY THE RESIDENTS SHOULD BE SPECIFICALLY WRITTEN INTO THE STATUTE. INSTEAD, IT WAS THOUGHT PREFERABLE THAT THE STATUTORY BASIS FOR THE APPRAISAL BE THE FAIR MARKET VALUE AND THAT THE APPRAISERS BE REMINDED, IN DETERMINING THE FAIR MARKET VALUE AND THAT THE APPRAISERS BE REMINDED, IN DETERMINING THE FAIR MARKET VALUE, TO TAKE INTO CONSIDERATION A NUMBER OF FACTORS, AMONG WHICH ARE:

(1) THE WARTIME CONSTRUCTION OF THE HOUSES;

(2) THE WARTIME CONSTRUCTION OF THE UTILITIES SERVING THE HOUSING;

(3) THE "MONOTONY" EFFECT OF HAVING MANY HOUSES IDENTICAL TO EACH OTHER IN THE SAME NEIGHBORHOOD; AND

(4) THE ONE INTERESTING NATURE OF THE COMMUNITY.

THERE WAS SOME SUGGESTION THAT THE APPRAISERS BE DIRECTED TO APPRAISE EACH BUILDING AS THOUGH IT WERE IN A NORMAL COMMUNITY. IT WAS FELT THIS SUGGESTION WAS WRONG IN THAT EACH PIECE OF PROPERTY CAN BE APPRAISED ONLY IN THE LIGHT OF ITS OWN CONDITION.

WHILE IT MAY BE, AS STATED IN THE COMMITTEE RESOLUTION, THAT IT WAS THE INTENT OF THE CONGRESS THAT APPRAISALS BE MADE ON A BASIS WHICH INCLUDED CONSIDERATION OF THE MORALE OF PROSPECTIVE PRIORITY PURCHASERS AND THE OTHER FACTORS LISTED IN THE RESOLUTION, WE HAVE BEEN UNABLE TO FIND ANY SUBSTANTIAL EVIDENCE OF THAT INTENT IN THE LEGISLATION ITSELF OR IN THE LEGISLATIVE HISTORY OF THE ACT. ALTHOUGH IT IS TRUE THAT SECTION 11C, 42 U.S.C. 2301, OF THE ACT EXPRESSES THE DESIRE OF THE CONGRESS THAT THE DISPOSAL OF COMMUNITY PROPERTIES BE ACCOMPLISHED EXPEDITIOUSLY, IN A MANNER WHICH WILL NOT IMPEDE THE ACCOMPLISHMENT OF THE PROGRAMS AND PURPOSES OF THE ATOMIC ENERGY ACT, AND WITH A MINIMUM OF DISLOCATION, AND THAT SECTION 12A EXPRESSES THE CONGRESSIONAL FINDING THAT THE CONTINUED MORALE OF PROJECT-CONNECTED PERSONS IS ESSENTIAL TO THE COMMON DEFENSE AND SECURITY OF THE UNITED STATES, OTHER PROVISIONS OF THE ACT APPEAR TO HAVE BEEN DESIGNED TO ACCOMPLISH THESE PURPOSES ON THE BASIS OF APPRAISALS WHICH CONSIDER ONLY THOSE FACTORS WHICH MIGHT AFFECT THE ECONOMIC STATUS OF THE PROPERTY ITSELF. IT MUST BE REALIZED THAT THE APPRAISED VALUES OF THE PROPERTIES ARE TO BE USED FOR SEVERAL PURPOSES. THE APPRAISED VALUE IS THE BASIS FOR INSURANCE UNDER THE NATIONAL HOUSING ACT, AND IN THE EVENT PROPERTY IS NOT PURCHASED BY THE TENANT THEREOF OR BY ANOTHER PRIORITY PURCHASER, SECTION 53B OF THE ACT, 42 U.S.C. SUPP. III 2343 (B), PROVIDES FOR ITS SALE TO THE HIGHEST BIDDER AT NOT LESS THAN THE APPRAISED VALUE. NO REASON IS SEEN WHY THE MINIMUM SALES PRICE TO THE GENERAL PUBLIC SHOULD HAVE ANY PARTICULAR EFFECT UPON, OR WHY IT SHOULD BE REDUCED BECAUSE OF, FACTORS SUCH AS THE MORALE OF PRIORITY PURCHASERS.

THERE ARE SPECIFIC PROVISIONS OF THE ACT WHICH ARE DESIGNED TO MINIMIZE DISLOCATION AND IMPAIRMENT OF THE MORALE OF PROJECT-CONNECTED PERSONNEL. SECTION 42 ESTABLISHES PURCHASE PRIORITIES FOR OCCUPANTS, PROJECT- CONNECTED PERSONS, AND INCOMING EMPLOYEES. SECTION 56 PROVIDES FOR A ONE- YEAR LEASE FOR ANY OCCUPANT WHO CHOOSES NOT TO PURCHASE. SECTION 61 PERMITS A PRIORITY PURCHASER TO MAKE HIS DOWN PAYMENT OVER A THREE-YEAR PERIOD. SECTION 35A PROVIDES A 15 PERCENT DEDUCTION FROM APPRAISED VALUE FOR PRIORITY PURCHASERS. SECTION 36A PROVIDES FOR A FURTHER DEDUCTION THEREFROM OF THE VALUE OF IMPROVEMENTS MADE BY A PRIORITY PURCHASER. SECTION 36D PROVIDES AN ADDITIONAL 10 PERCENT DEDUCTION FOR PRIORITY PURCHASERS WHO WAIVE THE INDEMNITY GIVEN BY SECTION 63-66.

IN VIEW OF THESE SPECIFIC PREFERENCES GRANTED TO FURTHER THE PURPOSES EXPRESSED IN SECTIONS 11C AND 12A OF THE ACT, THE FACT THAT NO REFERENCE IS MADE TO SUCH PURPOSES IN THE SECTION DEALING WITH THE BASIS FOR APPRAISALS, AND THE FACT THAT APPRAISED VALUES ARE TO BE USED IN SALES TO THE GENERAL PUBLIC AS WELL AS TO PRIORITY PURCHASERS, WE FEEL THAT THE ACT DOES NOT PERMIT A CONSTRUCTION THAT THE FACTORS LISTED IN THE COMMITTEE RESOLUTION SHOULD BE CONSIDERED IN MAKING APPRAISALS. ANY FAILURE IN THE STATUTE AS WRITTEN TO EXPRESS THE FULL INTENTION OF THE CONGRESS IN THIS RESPECT SHOULD BE REMEDIED BY APPROPRIATE LEGISLATION. IN THE ABSENCE OF SUCH ACTION, YOUR QUESTION MUST BE ANSWERED IN THE NEGATIVE.

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