During the national defense period every housing authority shall have the power to undertake the development and administration of projects within its field of operation to provide safe and sanitary dwellings for persons engaged in national defense activities, but no housing authority shall initiate the development of any such project pursuant to this act after May 31, 1947.

In the ownership, development or administration of such projects a housing authority shall have all the rights, powers, privileges and immunities that such authority has under any provision of law relating to the ownership, development or administration of slum clearance and housing projects for persons of low income with the same force and effect as though all the provisions of law applicable to slum clearance and housing projects for persons of low income were applicable to projects developed or administered to provide safe and sanitary dwellings for persons engaged in national defense activities as provided in this act: Provided, That any project developed or administered by any housing authority (or by any housing authority cooperating with it) pursuant to this act as agent for the Federal Government or otherwise as provided herein shall not be subject to the rental and tenant selection limitations provided in the Housing Authorities Law,¹ but such authority shall fix fair rentals for such projects within the financial reach of persons engaged in national defense activities: And provided further, That a housing authority may enter into any agreements with counties, cities, boroughs, townships, school districts or institution districts to pay such sum or sums of money as may be agreed to in lieu of taxes for general services rendered by such county, city, borough, township, school district or institution district or to pay for services, facilities, works, privileges or improvements furnished for or in connection with any such projects without being limited to the cost cost thereof. In the case of a project administered by a housing authority pursuant to this act, other than as agent of the Federal Government, any revenue in excess of that necessary with other available funds to pay any bonds or other obligations, administrative maintenance and operating expenses, and to provide for reasonable reserves² in connection with such project shall be held and used by the authority for its general corporate purposes.

After the national defense period any such projects owned and administered by a housing authority shall be administered for the purpose and in accordance with the provisions of the Housing Authorities Law.