The decline in deficit (difference between revenues and expenses) for community operation, or in other words, the decrease in "subsidy" and the conversion to a status of self-support, and better, is indicated in the following table: Fiscal Year Revenue Expense 1949 1950 1951 1952 1953 1954 Estimate 1955 Estimate $2, 683, 192 3, 311, 628 4,440, 829 4,997,199 4,914, 084 5, 067, 652 5, 160, 880 $7, 086, 892 5,195, 361 5,622, 144 5, 314, 456 4, 786, 295 4, 956, 049 5, 020, 384 Difference Loss Loss Loss Loss Gain Gain Gain $4, 403, 700 1, 883, 733 1,181, 315 317, 257 127, 789 111, 603 140, 496 Many factors contributed to the change reported in the foregoing table. Some free services were discontinued entirely. Other services formerly free were performed at a charge to the residents. At all times a much greater consciousness of costs was generated in all those who had a part in or control over the magnitude of the expenses, Adjustments in Rental and Utility Rates -- There was also a slight adjustment in resi- dential rental rates which could have caused an over-all increase of approximately 5 per cent in revenue from that source. However, in fiscal year 1953, the anticipated increase in revenue was cancelled by increasing vacancy in residential real estate for reasons that will be described later. The other main source of revenue, namely, that from the com- mercial establishments, has risen slightly. The income from this source is mostly derived from license agreements for the use of commercial property which provide for the payment of a percentage of gross sales as the monetary consideration for the use of the space. One of the early approaches to reducing subsidy was to inquire whether rents for residential property were at a proper level. The policy was established by the AEC that residential rentals should be set at an amount which compared with rentals in this geographical area for similar premises, and that the rental scale at Los Alamos itself should be such as to properly reflect the extreme differences in the types of housing units available. After consideration during several months by a local committee, it was finally decided that this problem might best be solved by hiring a residential real estate rental appraiser or appraisers to survey Los Alamos and vicinity and make recommendations. In September 1950, the services of two appraisers—Treadwell and Goldstein—were contracted for and their report was submitted in December 1950. This was reviewed and a recommendation made in January 1951, for the adoption of the appraisers' report as a new rental scale to be put into effect at Los Alamos. During this same time, national policy on the subject of rental rates for Federally~owned housing was being formulated. It was first announced in Circular A-45 issued by the Bureau of the Budget under the date of June 9, 1951. The new residential rental rates recommended for Los Alamos were reviewed in the light of the Directive A-45, were found to be in accord, and were put into effect on vemenron During the period covered by the foregoing, intensive study was also being given to the text of the family housing license agreement which had been in use since Army days at Los Alamos, and it was found that many changes and improvements were desirable. A new form of agreement was devised, following as much as possible normal real estate practice and modified to take into account conditions at Los Alamos. When the adjusted rents went into effect on January 1, 1952, the new form of license agreement was put into effect for all units. a EAL ney, 77