PAGENO="0001" FEBRUARY PAGENO="0002" I cØMMIT'r1~a~~ ON BA~N1~rNG A~fD OUR~RENOY I WRI4HT ~thMA~N Texas~ ABRAII&M ;r. ]~Lt1IJf1fiR, New Terk * " WT~I~TA~1 B. WIDNALL, New ~1ersey WJLUAM~ ~ ~*flflflTT, ~ ~* ~A~JJ4~I1'INO, ~ ~ ~ I~EONOR K. sv~w~; M1~sour~ * ~ ~ ~ FLOR~1~ P. ~ HENRY S. RE1~SS, Wisconsin ~ SE~MOt~7R~ALPEflN~ New York THOMAS L As~tm,1 ohIo ~AMH~*VEY ~1~eb1g~n WILLIAM S. W~O1~AD, Pennsi1~ània ~ W. L fBXLL). BB~Ø4~K, ~erii~eS~ee ROBERT a. ~ ~ BU1~fl,. TAI~COTT, California FERNAND J~. S~GER~MN, ffl~oUeZs1a~i& ~L~L&WSO~, California HENRY B. GO~ZALBZ, Texas ~ j ~ ~ ~B*it~W. 1O~INSON, Pennsylvan a JOSEPH ~l. MILNISU, New ~1erse~ ~ ~ J. W17j~LUM STANTON, OMo CHARLES L~ ~VBLPNER, Georgia ~ ~IR$TER L. MIZE, Kansas RICHARD ~.!I~ANNA, CalifornIa ;. ~ ~ BERNAW~'I4~IL~LBOW$KX, Coni~ecti~nt COMPT~WU11~ ~ TOM S. S*iitb ~a$~jI~ia PAUL H. D~DP, ~L, Mieb IL RICHAEIfl øN~BR, New t*1~ THOMAS (~ ~ Zersey~ JOHN H. ~ANSEN,. Iowa PRANK ANNUNZIO, flh1noi~ THOMAS M. RB~S, California PAUL ~ Fitaff D~rec~or ~ M~t! I~ M~sn, ~ CuRvs:4~. I~axNs, ~fl$e/ ~0R~N 14: I~*~ioS, Co~zn4~ei BENE~P D. GnL~M*~$9j~st4iaUve Counsel ~M~i S. WiN~K, ,~ ~ .~ ~ ~fl~rç~T- ~ ~ SUUC0MM ~ ~ ~ ~0N~ Hot~Si~ WILLIAM A. BARR ~ ~ Pennsyl~an1a, Chp%rman LI3IOWOR K~ SULLW4N, M1sso~i ~ ~.` ~ ~ WII~LIAM B. WIDNALL, THOMAS L. ASHLBY, 014o ~ ~ ~ ~ PAUL A. FINO,N~w ~ork WILWAM 5, MOGR~H1~lAD, ~én~is~lvani~ ~ FLORENCE ~ DWYE~R, RQ1*II~G. STBt~H~S, ER,, ~eorg~a ~ ~ ~ JAMES 1~AEVEY, P~fl~NAND J. STGEEMA~ho~e'ISla*~d ~IB~RY B. GONZALEZ, ~IYexas~ E1~RY S. REIJSS, W*scoiisln JOHN J ~L$~&N ~taff Director K$NNIGI~H W; BU~ :; uty staff D4rector CASEt IRELA D,~Ir$Or~*y bJtaff Member Jersey Jersey U PAGENO="0003" an develop- PAGENO="0004" `V 31 407 Statement of-Continued Lindsay, Hon. John V., mayor of New York City; accompanied by Edward J~ Logue, chairman, task force on housing~ 222 McDonald, Jack, chairman, Board of Coi$nty Supervisors, Wayne County, *ich. ; ac~om~anjed b~ C~ ~ ~ general counsel 552 McDowell, Jion. Harris ~. Jr.,.A ~eteant~h~e in Congress from the State of 1~e1aware ~ 588 Madden, Hon. Ray J., a Represezi~ative.in ~Jongress from the State of Indiana 563 Pucinski, Eon. Roman C., a Representa4ve In CQJ~gres~ frøm the State of Illinois ~. ~J 288 Shishkin, ~orls, secretary, Ho~is1ng CommitWe, A~merican Federation of Labor and Congress of Industrial Orgaii1~tions 245 Simpich, Frederick, president, Oce~nlc P~operties; accompanied by Harlan S. Geldermann, president, Gelop Developments 421 Townsend, Dwight D., director, * WaBh'ington office, Cooperativ Leagueof the United States 271 Weaver, Hon. Robert C., Secretary of HJusIng and Urban De~e1op ment; accompanied by Robert C. Woo~, ~Ynder Secretary; Philip N. Brow11~teinr Assistant Secretary for ~49rj~gage Credit; Cl~arle~ Haar~ fAsststant Secretary~ for M~tthp~1Itan Development; Kowar Wharlion, Deputy Urban Renewal C~mmissioner; lVtrs. Marie McGUire~ Public Housing Commissio~r; and AsI~l~~ Foard, Acti g General Counsel ~. Wise, Harold F., chairman, National Le~i~lative Committee, Insti te of Planners; accompanied by David lElartley, director of Instit te DevelOpment Additional information submitted to the su)~commtttee by- Ashley : Hon. Thomas L. : ~ "glum Plan's Cost Likely To Doulple--Private and Public Spe d- ing Under Johnson's Proposal T~ 1~e Close to $6 Billion," nr ide from the New York Times, Fe1~ruary 20, 1~66; with Sectc ary . . Weaver's comments on the ar~iele Bar~e$, Hon. William A. : ~ ]~etter from Hon. Robert C. Wr~rer, Secretary of Housing and : Urban Development, dated M~trch21, 1966, responding I the ~uggestions by Mayor Linds$r for alternative methods f fi- nancing demonstration ~ities f and computing the amou t of supplemental grants a city mt~y receive under the demo stra- tion cities legislation Letter from Patrick Healy, exrcutive director, National eague of Cities, dated April 6, 19~36, transmitting a statem ut by : Mayor Henry W. Maier of 1\~1ilwaukee, ~ Be4nett, Glenn E., executive director, Atlanta Region Metro olitan J~4anning Commission: I Article entitled "The At1an~ Region Metropolitan P anning ~ Commission-What It Is-what It Does" ___~ l3Thekmon, Larry, president, Natk~nal Association of Home B ilders: Letter in reply to questions ofjMr. Fino on section 110(d) f FI.R. 13064 and title I of H.R. 1~46 NAHB recommendations foit Increased use of PHA ortgage insurance programs _~ ~ Prepared statement with ~ Brownstein, Hon. Philip N., Assl~tant Secretary for Mortga e Credit, and Commissioner, Federal ~1ousing Administration: Proposed amendments to H.~Et. 9256, Department of Ho sing and Urban Development_ ~ Cavanagh, Hon. Jerome P., major of Detroit, Mich.: Information about the Fed~ral cost of Detroit's mode city pro- posal --~-~----~- I- Joint statement by the U4 Conference of Mayors an National League of Cities on the~5rban Development Act of 966, H.R. 12946; and the Housing juid Urban Development A endments of 1966, H.R. 13064~. 4 79 238 201 385 526 523 527 167 220 199 PAGENO="0005" 434 458 437 354 256 270 74 275 279 68 V Pags 306 474 444 CO~E~TS Additiona1i~fOr~t~on s~b~tte~ ~o th subcoth~tte~by-Co~t~nued Daley, .li611.*~ticiIáPc~ J., m~y r ~ h~c~o, fl1~ ~ ~ ~ Ana~1ysi~ of 1~d dts~osit ~ , ~ arth, ~ ~ity of Chh~ago, ~` ~partm&it ` c~f T~rba~ti ~ ë ewa~ , infoi~i~ttion covering the ~ . ~ qverall urbe~n ~en~ra1 ~ t ~ra ~tnc1: i~o~4 c~etailed data on 11 p1~je~ts wlifeIt \b~é b~e I~ d ou~ ~ ~ ~ Davk1~off, ~ ~ ~hair~Th~LI~, D rt et~t ~ . ~ P1~nnin~, ~ thinter eolleg~, New `~ork~ ~Letter ~ to- Presic1et~t ~ ~o1~ s ii ~ ~o~ut~i$i~s for Derno~&tio ~ ~ A~etfon,~ thted ~D~mbe 9, $&.~ ~. ~ ~ ~. ~ ~ Vamphlet entitle4 `1~Letr lit n ~ou~Ag Y~S~~egatzon~" b~ th4 ?O~Q~Z1aO t~s~f~t~ ~ ~ ~ .. S~a~xent~ bfl~ ~ t ` ~ c~th:ithtee tt~ ~a4~1en1, The., d~tef ~b$ar~v ~i, I ~ ~ ~e ~ eii~iige in the In~ ~ ~ ternEii~ Rev~etLue ~odk~ per $1 ~ ~ tc~ hou~thg.. Fay, rrederie A., pre~ide4t, N to~ 1 Assooiation of Housing and Redevelopment Offic~a1s: Cost of NAIJRO's proposed a e Uments to the Housing Act of 1937 ~ Estimated cost of 6~ to 70 d o~ tratiôn p$~i~ms " `New Towns' Ro1~ in Urb xi G~, wth Exp~rèd, Public Policy Issues Examiued,'\' ar~ic1e ~ ~n he 3onrnEd ~f Housing, No. 1, 1966 ~i .. ~ ________ Supplementary stat~mei~t re A~ R()'s ~sii~ions on provisions not included in p$posed 19~ l~ sing at4 urban ~ development 1egislation~. _ ~ _ _ _ ~- - - -~ - - - 4 - -~1. ~ Turnover, . length of \ stay, ar~ re . sons for ~ moveout hi public housing ~ 4 1~65-67 policy resolution of th\e ~ ioital Association of Housing and Redevelopmeit~ Of~icials~ ~ George, W. Elmer, executive direct~r, G~ rgia Municipal Association: Supplementary statemei~t ai~d at~a h~n nts Shishkin, Boris, secretary, EIoiising ~ in ittee, AFL-CIO: Supplementary statemeut~_ _ ~ ~ ~ St~tement by the AFL~-CIO\ ~ utive Council on Urban America, February ~8, 1966,\ al arbour, Fl~ Sullivan, Hon. Leonor I~. : \ H~R. 13063. A bill.to a~iend the\ at~ nal Housing Act to author- ize a limited experimental pro~r in of insurance for mortgages ~ executed by nonprofit organiza\ti i~s 0 finance th~e purchase and ~ rehabilitation of dete~lorâting ~ sij standard housing for sub- sequent sale to low-in~ome pur\~ as~ s "Mrs. Sullivan Introduces ~3ill `J.~ ~ ble Low4ncome Families To Purchase RehabilI$ted IIo~s ii~ at 3-Percent Rate," press release of February 24 ~ 19~36_ _ ~ ~ Townsend, Dwight D., dix~ectdr, W~ hip ton . office, ~ Cooperative League of the ILS.A. : ~ Amendments proposed b~r Cooper~t ve\ sague of the U.S.A Supplementary statement of Coo~e ~ive League of U.S.A. on advantages of cooperat~ves under ecton 22Ud)(3) Weaver, Hon. Robert C., Sec~eteiry of \ oti~ng and Urban t~evelop- ment: \ Cities indicating interest hi de~nons~r ti~ cities proposal through ~ mayors, Members' of Co~gr~ss, oi~ son~ other city official Comments on New York Times art ~ e " lum Plan's Cost Likely to Double-Private and Public p~ ding tTnder Johnson's Proposal To Be Close to\ $6 Billio , ` J~' bruary 20, 1966 Derivation of $2.3 billion e~tim~tè f r ~u plementary ~rants ~ Federal grant-in-aid progr$ns ~ikely t f m base of city demon- stration program activiti~s_ _ ~ ~. ~ .. Hypothetical city demonstr~tio~. progr ~ Letter dated March 22, l966~ in r~ op e to questions ~ of Mr. Ashley __~. _ 72 79 114 106 101 ii~~ PAGENO="0006" VI CONTENTS Additiona1infórm~tion sübrnftted to the subcomn~Utee by-Continued Weaver, II~4 Roberl ç., ete.-Continued .; I Loans, f~r rental hou~àig for the elderly 4thandicapped (sec. 202 of the Housing Act of 1~9) ~. Status i4eport re Virginia Beach open-sp~e land application.~.~ Submitted statement of 4 Summary of program authorization anq budgetary impact _ ~ Trends in college housing bond financir~g~. Use of the supplemental grant Widnall, Hon William 13 Excerpt from a letter addressed to Chairman Patman by Dr Weaver in answer to request for 4ger4ey comment on H R 9771, 88th Congress, an onU2ibus houslz~ bill, from the Congres sioaal Record, March $, 1964 ~age 129 148 43 85 132 141 71 / /. I / 1* PAGENO="0007" PAGENO="0008" The Oo~ have adei 2 I 7 ~un ty intlie choice a~ 7~e S~retary may PAGENO="0009" ~ie Secretary ~hal1 ~nts are~ or ~OPMi~NT 3 ANCIAL ASSI~ PAGENO="0010" 4 PAGENO="0011" I DEMONSTRAT~ON CIT~E ND UItBAN DEVELOPMENT 5 PAGENO="0012" 6 DE~O!~STRATh~N C1'ff1~ ANfl T~RB . * ~bE~iWPMEN~ federally assisted development ~Oj~ts, for i$aking effective áomprehe sive metropolitan planning and prograrnth~. ~ OBANT AUTHOR~T~ SE~i 102. (a) The Secretary is authorized to~ make supplementary gran s t~ applicant State ~tnd local public bodies and ~tgqncies carryir~g out, or ass! ting in carrying out !development proje~ts meeting t~e re4mrement of this title (1,) Ikants fflay be ina~ undé1~this title ~ for d~Velo~inent proje ts in metro~litan ~tt~as f~or which It h~is been dethf~1tstrated, to the. ~atisfactl n of the Secretary, t*at- ~ t ~ ~ (1) mb~lita~i~v1d~r comj~hen~ive i~~ing and programing p ovide an adequate basis for evaluating (A) the l[oeatloh, ilnancing, and nc edul- Ing of indtvtdual puMic facilt~ pre3ects~ (including but no1~ limit, d to, sewel ~a1er and sewage treatment facihties highway mass transi air port, aAd other transptrtation fac1litie~ ; ~ a~Id reereation and other open- space ar~a~) whether o~r not federally a4slsted ; ~ind (B) other pr posed land deve1~pment or uses w14i~h pro~ects ~r uses because of their siz den sity type ~ or location have public metrof~ofttanwide or lnterjuristh t~onal signifieat~j~ ~ ~ . ~ ~ (2) adetpiate metropolitaiiwide institutional or other arrangement exist for coordi~iating on the bas1~ of nuch met~Opotttltnwlde comprebensiv plan mug ai~ ipro~ramm~, Ioca~I I~ublic po1iei4~ aud activities affecting he de- ve1opiueu~f of the area ~ ; a~d ~ ~k ~ ~ . . ~ (~) pubthc facility projects and othert land development or use which have ~t m~or impact on the deveiopme$ ô~ the area are, in ~ fac , being carried out in accord with such metrop~litanwide comprehensive p anni~ng and prOg$aming. ~ ~ ~ (c) Where the applicant ~or a grant under this title is a county mum ipality or other gei~ral~pur~xise ~wiit o~ local gover4~znent, it must demonstrat , to the ~atisfactwn ~f the secretary that taktng ~to consnleration the ceo e of its auborit7 *~ ~ It is adepiate1~f assnring that publn~ facil ty proj ects and ot1~er land dev4iopment or uses 4f publc metropolitanwide r inter- jurisdictioliejt significance are being &nd ~`i1l be carried out in acc rd with metropo~ita~ planning and prqgraming meejing the requirements of s bsectlon (b) In making this determ4fl*~t1on the ~erq~i~y shall give special cons cleration to w1~e~he~ ~he applicant i~ e~ectiv~1y ass~øt1flg ID and cont~rmng t metro pohtan p1ai~ning and programing t1u~oug~ ~(i) the location and sch uling of public facility projects, whether or not fe4erally assisted ; and (2) l~he estab- li~hinent and consistent adi~itni~tratton of ~fllng nodes, subdftrlsion re~nlat1ons, ~id similar httid-n~e and de~fty eontrois. ~ . I Where the applicant for a grant under t1~Is title Is not a genera1-pu~pose unit of local ~gojrernment, both It and the .~ geneval-purpose unit of local gç~vernment having ~ji~*dIcti4n over the le~atAori of t~ project must meet requii$ments of this subsection. . j I . I (d) In i~iaking the determinations requ~ed under this section, the/ Secretary shall obtaL4i, and give fuu eo~ia~deratlon 14 the ~ornments of the bod~t or bodies , (State or ~ocai) responsible for planning ~nd programing for th~ m tropollian a~a. ~ ! ~ ~é) N~ ~gMüt ~ha1Ibe :~ad~. ii~er tM$ 1~i~l~ with respect t6 a d teh~mept project fek wtit~ a U'e~Iei~a1 gr~uit h~ ~ made or a eontrac~t of assistance has bee~*it~redlntt, tinder thelegisIati~i,eferred to in clause I of section 105 prior tt J~bruary 21, 196~, oi~ more than Øn~ year prior to the date o which the Secretar~has made the ~letern~lnaUons r4~n1rod under this section th respect to the applicant and to the area In whMit~tli~ project Is located : Pro ided, That In the case of ~ project for whIch a ~oñ~t~act of assistance under th . legislation referred to in clause 1 of s~tio~i i05 has been entered into after J tie 30, 19~ft no gi~rnt ~hall be made ün4e~- this title u~dess an application for su h grant has beenrna~ on orbe4~o~ethe dtiteM such coqitras~t. I ErraNT 4' Sne. $& (a) A g~intnn4~rth&s ttt1esj~*Un~it exceed (1) 20 per C ntaniof the cost of.t1~epreJect for whieb the grant i~na~ nor 4~2) the Federa grant made with res~eet to~tho preject ~inder the 1eg~slation referred to in clans . 1 of section 105. ~Eia~no case shall thétotat FdeIIaI ~~ntk~Ebutions to the cost of such project be more than 80 per centum. Not~di~h*aading any other prov1~i of law, in- PAGENO="0013" ~D~MONSTRA*~ ~JiT~E ND T~RBAN ]~VEL~PMENT 7 duding requb~erneñts w1l~ii. . ~spee~ ~ ~ pn~Fe~1erai ~ofltributions, grants under this title sh~tl1 be elig1ble~ foi~ 1ncli~ o~i (directly or through refunds or credit) as part oi~ the finanein~ for ~u~h j~r j~ s : Pro~d~, That projects or acttvfties on the basis of which. as~1sta~ce i~ rd Med under s~etloii 6(c) of the Demon- stration Citi~s 4~et é& 19th~ sh~1~Ine~ ~ igib~e for assistance under this title. ~b) There are hereby ~ttithôrize~ t~ ~ e appr~r1ated such sums as may be necessai~y to carry ~out tb~ p~wisi~i . this tttle. .Ap~ropriat1ons authørized under th~ title .~haU~ rernai~i ai~ailtb~e u ii expended1V%~then ~o pr~v1ded in a~pro- p~ria~thtxias wets.. . \ . \ . . . . CQNsUL~rATI~ A~T c]~RDXFIOAT~O~ Sno. 1i~4. * In carry1n~ o~u~ .th~ prc~i ~ ~ .~4 this t}t1~ inc1udin~ the issuance o~ regulations, the Secreta~y shall c~~i t~ with the Department of the Interior;. the D.epartm~ht oi~ ~ei~mei~e'; the 1~e iite~t o4t ITealth~ iDthvcatten, and Wel~ . . . . Th~ire ;. and the i~ede~ra~ A~i~tio~ ~ Ag~ne~ ttJi~ respect .t~ 1ev~lopment pt~eet~ .. . . assisted by those departme~ts and ~ i~ es ; and he shall, for the purpose of section 103, accept their re~eet~e c~rt ~à ti~s~a~ 110: the cost of those projects and the amount of the non-i~'edE~ral C~ ti~i ution paid c~r to be paid to that cost. . , \ D1!~~~ ~NS , Sno. 105. As used in this ti~le-~ \ . ` . ., (1') `f&evelepment pr~'ectk~. i~e~ ~ j~jecii as~i~t~d `or `t~ ibe assisted ,, under section 702 of tb~]I~ou~tAga~id 1~ . an ~ Ant. ~fi9~5 ; section , 8~ ~ the~ Federa1~ Water ~l*u1~on~ rol Act; secth~x~ 1~O~a) o1~ title 23, Uni4~~d States~ Cede; seet~n $ of ~h ~ t1ier~I 4h~si~rt ~ section 3( of the~ Urban Mass I~ra~s1o~tatton ~et~ 4~ $ ~; tlth~'~Vl~I ~f the Roushig Act of :L961 ~ secti~n 5(~e) `of th~e~4~n~i aiad~ a~ Cor~ti~n Fund Act of 1i~65 ; or section 101(a) (1) of the \Pul~lic ~ 1$ and Economic ~evelopn~ent Act. of 1965 (for a pro~t o~t a t~pe whte~ ~ Secretary d'eter~lues to be eDgible for assistance under other ~f tI~epr~*1 I ~ ;~ (2) 4'State?' meaw~ aiaç~ \Sta~e ot~i ~J 1te~ St~at~u~ tile C~mme~a~eal~tb. of Puerto Rico, the Vi~rg1n. $ancts, oi~\ ~ ~ `~ eite~ o~ii~strun~entality of a~iy of , theforegoing; . ~ . \ . ,, . , ,, , (3) "mêtro~olitan a~a"~ mi~ans 4 ta~ dardi~ weti~op~lttai~. sta~tittleal area as establtsiaed b~ the~ Bu~$su o~ t]~\~ t~g t,. atthJeet~ lY0w~cer to `sth~h modlf1.~ cations' atd extensiozis as ~he Secr 1~a y ay determi~ie ~ be approp~late; and ~ (4) "Secretary" meana tl~e S~eret ~ é~ Eo~stng'and Th~bair D~'eh~nent~ TITLE II~-LAND DEVJ~I1OPME D NEW COMMUNITIES idORTGAGE ~st~a&r~e~ ~ t~ ~* ~e~1~iTJizS , SEC. 201. Title X of `the Natio~al Hous n ct, is ajnE~hded by inserting after section :1~OO3 the following itew see1~1on b, ii4 i~edesignat1ng the remaining: sections accordingly ~ ` ` \ `: ` ` "N~W ç~o~ ~ ~ r~, ~ a ` "SEC.. 1004. (a). New eowrni~ni~ies cons s ~ of ds~relopments~ sa~tls~ying' ~l1' other ~eqUJa~eme1its under t1~ 1~i4e, i~ay e~ a ~ i~e~e'd iiu~der this seet~on b~ thefl Secretary for mortgage insiuaxio4 i~ they eet ti~e ret~uir~tents oZ ~bseetio1~. (b) of Uiis section. ,. , , ` ` " (b) A developzue,nt shah' be eligible for ~t ~ `pal as a new community if the $e~retary determines It wi11~ In $ew ~ $t ~ z~ azid scope, make a substantial contribution to the sound and .eco~ioniic gr t~ of' the area within which it, is' located 1n~ the form of~ , ` . ` "(1) su~bstantial' ecOnom41t~s,\ m$de ~ s I1i~ 1~brouigh large~s~aie d~Ye~o~p~ me~t1 In the p'i~oc'is~on of 1nip~o$t~ re ~ e~it a~l s1te~ ; "(2) adeqnate 1aouth~g ~ ~ ~v~w1de ~ . ~ these Who *óaid be em~l~ed~ In the community or the surro~inding a e ~ ~ "(3) maximum accessibility \fro~n th eW residential sites to Industrial or other employme~t'eente~?s .ai~ eotaia ~ ia~, r~e1~eat1onal, and cultural fa~ duties in, or near the community ; and , . ` `14) t~imteii~ ~ece~s4~hft~ty ~ti a~zy m `~ r ~ atraT ~Ity in the area". PAGENO="0014" I 8 ~E~tO~BTRATION CITIES AND trRBAN DEVELOPMENr ~ . : MO1~TGAOE AMOUNT ANI4 m~ SEC. 202. ~ (~)~ Section 1OO~(c) of . such Acj is amended ~ by ` strikin out "$10,000,000,, an~t inserting in lieu thereof "$25,00p,000". (b) Section 1~O2(d) (1) of such Act is ame*ded to read as follows : "(1) contalu repayment provisions sat~1!actory to the Secreta and have a mattirity not to exceed seven years~ or such longer maturity s the Secretary deems reasonable (A) in the edse of a privately owned s stem for water or sewerage, and (E) in the cage of a new community ap roved under section 1004 ;". . . . ~ ENOOUEA6EMENT OF SMA1~L BUILDERS Sm~. 203. Seetion 1004 of such Act (redesig~ated as section 1005) is a ended by adding a~te1r "broad participation by build*s," the words "particular! small builders,". ~ I . . ~ WAThR AND SEWERAGE (~AcTILITIE5 Sno. 204. Section 1005, of ~ucb Act (redesig~iàted as section 1006) is a ended by adding the following : "In the case of a ne~w community approved by he See- retary pursuant to sectio~i 1004, the land ~hal1 be served, alter its evelop- ment, by- ; ~ . " (a) public systems for . water and s~erage which are consist ut with other existing or prospective systems within the area ; or "(b) existing privately or cooperatively o~vned systems (inclu ing rca- sonable extensions thereto). whiehare approved as adequate by t e Seere- tary an4 are regulated in a manner ac~eptable to him ; or "(e) if it is necessary todevelop aii~W system and the Secreta y deter- ~ niluesU~at public ownersbi~ of such a sy~tein is not fea8ible, an adequate Pr!- vately Ør cooperatively owned new sy$tem (1) which he finds ~onsistent with ot~ier existing orprospective syst~ms within the area ; (2) ~hieh will be regujlated, during the period of sucl~ ~ ownership, in a manner cceptable to him ~ with respect to user rates ai4 charges, capital structure methods of op~ation, and rate of return ; and 1(3) regarding which he r elves as- suranc~, satisfactory to him, with res~eet to eventual public own rship and operation of the system and with resp~ct to the conditions and té ma of any sale ,o~ transfer." . ~ rEDEB4L* N~PXONAL. MORTGAGE ~55OCIA1ttON SPECIAL ~S5ISTANCE FO NEW ~ COMMUN*rIE5 SEC. 2O~1. Section 302(b) of such Act i~ amended by inserting aft r "or title VIII," in jthe proviso the f4lowlng : "orfnnder title X with respec to a new comrnun~ approved under Section 1004 t~ereof,". ~ . ~ tIBBAN PT4NN~NG SEC. 2043. Section 701(a) of the Hous1~g Act of 19~4 is amended y inserting the following before the semicolon in par~tgraph (4) or for areas where rapid urbanization is expected to result on land acquired or to be acquire by land de- velopment agencies with assistance untier section 202(b) (1) of he Housing Amen4m~ents of 1955, or on land develdped or to be developed as a new corn- munity approved under section 1004 of the National Housing Act", ~ ~ ~ PTJflLIO B'AC~LtTT LOANS ~1gO. ~O7. Section 202(b) ~ (redesignat4dbelow as section 202(c) ). of the Hous- ing Am~ndrnents ot 195w isamended by~tddtng the following befor the period at ~ the emil of the second sentence of par~raph (4) : ", or (lii) to . e provided . in connec1~ion with the establishment of 4 ~. new community approved under section 1004 of the National Housing Aet". ~ . ~ LOANS TO LAND D~VELOPMENT AGENCIES Si3~c~ 208. (a) Section 202 of the Housing Amendments of 1~ 5 is amended by inserting after subsection (a) the fbllowing new subsection (b ) and redesig- nating the remaining subsections accordingly: "(b) (1) In order to encourage and'assist in the timely acquistion of open or predominantly undeveloped land to utilized in connection w th the develop- PAGENO="0015" OPMENT PAGENO="0016" I 10 DEMO~8TBATION CZTff~J ` ~D T4~4N DI~V~LOPMENT ~K4NT ~1~r1&oBI+ SEC. 402. (a~ The Secretary is autborizedf to make grants to State and metropo1itan-a~ea agencies to help finance ~emonatratIon prograths f r the assembly, correlation, and dts~emination o1~ i~fformat!on and data need d for improving, cooi~dinating, and more effectively ~uti1iz1ng governmental an other prograw~ and activities available for the soiuttoi~ o1~ local urban problems. Such dewonstratlon ~programs shall includ~e : ., (1~ the~ planñmg, establishment, an~I ~ oation of urban infer atlon ceflters ; arid I ~ (2) ~ ass~zub1y, c~rreJ.aUon, an4 d~~4~ttoi~ of urban physical social, an econw~iic development in~otj~atI~n 4$~1Td~ta through stich ceii era for the jj~urposes of : ~ ~ 1~ (A) informing local governmenV~4Organ1~MtfO1TS, and mdlvi nals of the availability iand stt~t~s of Fede*aL, State, and local prog~ ma and other ireso~irces for t~i~ solution of urijan prob~ems; (B) providing ~edera1, State~ and ~Ioca1 governments with lnf rmation useful and necessary to planning, Jrogramitig, budgeting, an coordi- nating urban programs ; o~ ~ ~ (0) providing other, in~ormaUon~ and data needed for pu lie and private urban physie~l, social~ and. qconouiic develO~nent activ ties. (b) A dei~ioñstmtiou program assisted un~r this section shall: (1) specify the activities to be carriM on and the kinds oi~ inf rmation to be ii~ombled and di~tri1rnted ; . (2) a~clequate1y justiCy i~s choice of ~tJ~dt~es, in terms of sped ed urba~i phyaLcal, soe~a¾~ and e~oz~q~zdc in~o~i~4~on ziéeds and objectives, including comparjsons o1~ coatand us~u1ne~ wher~ 4~~propria~e; (3) represent substantially incre~e4t or improved activities o the part of the a~pplicant State or m~tropolitan-a~~a agency; (4) contain a detailed budget to~th~r with procedures for adeq ate fiscal control, fund accounting, and auditing ; ~ (5) be closely coordinated with ~e1a~ed 1~ederal, State, and bc informa- tional activitlea, including those iecetv~xig assistance under section 701 of the Housing Act of 19~4, tiU~ I of the Iii~her l~ducation Act of 19~5, title VI of the Economic Opportunity Act of 196~, and other Federal progr ms; (6) Jnot include any activity reeeJfving~ assistance under 0th r Federal progrflms ; and ~ (7) ~ meet such other reQuirements tfs the Secretary may estabi sh to carry out tJ* purpose of thi&title. ~X~E~T or 4YrIVITDnS SEC. 403. (a) An urban information ~E~lter est~J~i1sh~d by a metro olitan-area agency under this title shall be directed~pi7iinarily tø- the jjrovision Qf informa- tional services of genei~al metropolftanwi~ Utility or of utility to the ommunities within that metropolitan area. (b~) An urban information center est*lished by a State under t Is title shall be direet~d primarily to the provl~lon of~i!~formational services of eneral state- wide utfljity or of utility to communities ~iot within metrQpolitan ar as for which information centers have been emablish1 under this title. ; AMOUNT ~F GRANT SEC. ~O4. (a) A grant under this sec4ien. shall not exceed 50 per entuni of the cost df the act1vit1e~earried on ~ program during one year. (b) ~o grant shall be made under 1~i1~ tible to *sslst in as~em ling data, or providihg information, to be used primai~Ily In the day4o~day oper tions of State or local governing bodies and agencies. ~ PEDERAL INFOR*ATION ACTIVIPIES Sno. 405. (a) Federal departments `and agencies shall cooper te with States and m~tropOlltan-area agencies in pr~~lding information to ass st in carrying out tb~ purpose of this tItle. (b) The President shall undertakq ~u~h ~tudi~ to lrnpro~ve ederal agency progriim lntormation capability anl $oordIi~ation as he may d m necessary to carry but the purposes oftble section.! PAGENO="0017" ~EDERAL i~c~v 11 PAGENO="0018" 12 DEMONSTRATION CIP1E~ AND UE~AN flEVELOPMENT (3) adding a new sentenc~ at ~ the end of subsectloa (ia) as fo1~ows: "Premium charges on the insw~ance of mortgages or loans transferred l~o the management fund or insured pursuant to ~ommitments transferred to the management Luau may be pay4ble in debentures which are the obligat on of either the ~nanagement fund qr o~ the ~enf~ra1 insurance fund ~IX~ETGA~II5 LIMITS 1~R ~HOMES UND$a s~crxos~ 221 (d) (2) Sno. 103. Section 221(d) (2) (A) of the Na4nal..Houslng Act is amen ed by striking out $11 000 and $1S 000' and inse4wg in lieu thereof ~12 5 and "$20,000", respectively. ~ i~ow-EnNP HOUSING rOn ~ DISPLACED F4MTLIE$-TER~E OF LEASE Sno. 104. Section 23(d) of the United State' flo~j~ing Act of 1937 is a by striking~out the period at the end thereof aM inserting a colon and the follow- jug : "Pro'oith$, That the term may exceed l~irty-Six months where th public housing age~u~y determines that the housiüg teased under this section 1 ~ needed for displacedjfam.ilies." ~ ~ f LOW~B~NP EOUSINC-USE OF N~WLt O~S1~E~CTxD P~I~VATF~ 1~OtJSIN Sue. 105.:(a) Section 10(c) of the Unit4d ~States ~ Housing Act of 1937 is amended by striking out "existing stri1ctixre~"~ in the last proviso, and userting in lieu thereof "private accommodations'?. (b) SectiOn 23(a) (3) of such Act. is amended by striking out from the first clause thereof the words an existing and i*serting in lieu thereof the ord `a APPLfl1'~G ADVANCE5 IN TECHNOLOGY TO ~OV$ING AFD URBAN DEVELOP ENT Sac 106 1(a) To encourage and assist the ~ous4ng~indh~try to continu to reduee the cost an4 Improve the qua1~ty of housix4 by the application to horn construe tion of adv~an~es in technology and to en4ourage and assist the app ication of advances Id technology, to urb&n deve1opm~activtiies, the Secretary s directed to- I (1) ~eonduet research and sludies 1~ test and demonstrate ne and im I ~ proved techniques and methods of ap~lying advances in technolo y to hous- ing construction, rehabilitation and tnaintenance, and urban d velopment activities ; and . . . .~ . . ,~ (2) encourage and promote the aqceptance and application f new and improwed techniques and methods of ~constructlng, rehabilitatin and main- . . taming ~honsing and the app1icatiOn~ of advances in ~ technolog to urban develépment activities by all segment~ of the housingindustry, c mmunities, industries engaged in urban develo~s4ent activities and the gene al public (b) .1~eareh and studies conducted i~ider this section shall be designed to test an~ Jdemonstrate the applicability qo hoUsing construction re abilitation and mah~tenance, ~nd urban de~elopme4t activities, of advances i technology relating ~o (1) ~desigu~ eoneepts, (2) c4nstuu~ctiun and rebabilitat on methods, (3) mantifacturing processes, (4) mattri~ls and products, and 5) building compoñe~its. ~ . . : * ~ ~ . ~ . . . / . (c) The Secretary IS authorized to ea~ry out the rêseai~ch and st~idies author- ized by this section eIther dfrectly or b~r~ contract with public or p~ivatebödies or agencies, or by working agreement~ with departments and ag~ncles of the Federal Government, as he may deteri*~lne to be desirable. Cont~acts may be made i~i the Secretary for research a~. studies authorized by tl~s section for work to continue not more than two years from the date of any ~uch contract. (d} There are hereby authorized td he appropriated ~ such sux~is as may be necessaçry to carry out the provisions of this section All funds s~ appropriated shall rmaln available witil expended~wjien so provided in appr~priation Acts (e) ~lothmg contained in this seeti~n shall limit any autIiori~y of the Sec retary ~ünder title III of the Uouslng i~ct of 1948, sectlo~ 602 of 114e Housing Act of i9~i~ 4~1? any otherprovision of law. . .~ . : ~ ` . ~ REBABILI~ATION ~ND qODE ENFOi(i$Ms~T GRANTS S~, .107. The second proviso unde~ the head "URBAN ER~mw L ADMINISTRA- non" inthe Supplemental Appropriatibn Act, 1966 is repealed. S PAGENO="0019" sAN D]~V1DLOPMENP PAGENO="0020" 14 DEMqNSPBATION CITTh~S AND U4B~N DEVELOPMENT (e) T~ae fti~s~ sefltence of section 206 of su4 Act is amended by striking out "shall be depo~ited" and inserting in lieu thEfreof `~1~ted to thsurance under section 203 shall ~edepositet%". i . (f) The first sei~tence of ~eeUon~ 2O~ of suf~ Act Is amended by adding "in connection with the insurance program&' af1~ei~ ~`mad~e". (g) Seeth~ii22~(d) (1). (~&) of such Act isaa~ewjed-- (1) by striking out "Housing and H~me Finance Administrator' each place it appears and inserth~g In lie~ thereof "Secretary of Housing and Urbau Development"; (2) ~y strik~*g oid~ ¶`Athn~istrator" ~c~i place it appears and inserting in lieu th~reof "Secretary" ; :~ ~ ~ ~ stilking out "eertincatiou teI~be Oominissiouer" and inserting in lieu tbk~reof "determination" ; and ~ (4)~ ~ ~trIk1ug ou1~ each plae~ ~ app~ws. "certl~f1ed to the Commissioner" and inserting in lieu thereof "~eterin~ifle*~J~ * ~ (h~ t2~Z(~a.)(2)~ o~ ~n~h Act ie~ame~ded~- (1) b~r striking out "Public Housjn* Administri~ien" and inserting in lieu thei~eof "Secretary of Housing and tifrban Development"; (2) by striking out "said Admini~t~at}o*" ii~ inserting in lieu thereof `~Secretary". (i) The headtng appetiring above sect~j~n~ 2~6 ot such Act is amended by striking out `PHA". (j) Section 302(a) of su~h Act is am$uJ~ h~y striking out "a constituent agency of the Housing and Home Finance ~ency" and thserting in lieu thereof "in the De~rtznent of Ho~is1ng and~ Urban i~re1opu~ent". (k) -~ft~1ona 3O~(c) ant! ~O6(e) are ~I4etrd~cI by striltitig, out "Housing and 1~1~oirie Fitxs~nce Agency or II~ Athntn1strnto~J cit b~r such Ageney~s constituent units or agene1e~ or the heads thereof" and lh~ftng In lien tI~reof "t~epártment of I~ous1ng ~M Vrban r~eveIo~ment ir tt~ S$~r~t~fry". (1) S~tions ~O~g) and ~ o~ ~ ~ b~r striking out "Housing and Home Finance Administrator" and l~iserting in lieu thereof "Secretary of Housing and Urban Development". (rn) S~ction 308 of such Act is fnrth~r amended by striking out "Adminis- trator" each place it appears and lnsertln~1n li~tt thereof "Secretary". (n) The third paragraph of section 6O3~(a) is amended by striking out "in any fold office of" and inserting in lieu therebf "br". (0) The second paragraph of section 61G of such Act Is amended- (1)~ by striking out `Public flou~1ij~ Admlni~tration" and inserting in lieu thet~of "Secretary of Housing and 1~rban Development" ; and (~) by s~triking out "said Admiz4stration" and inserting in lieu thereof "Sedretary". I (p.) ~ *Sktfo~ 8O*~(b) ~ of sut~h Aei~ ~j~ItLk~nded~ (1) by striking out "Secretary o~ his designee" in the first sentence and inserting In lieu thereof "S~ctetary~~ t~ef~nSeir-hts designee"; . (2) by striking out "certified b~r the ~cretary" in the third sentence and lñssrtlng in lIen thereof "certt1~ed 1~ th~ ~ecrethry of Defense"; . (3) by striking out "require the~Secretary" in the third sentence and in- sorting In lieu thereof "require the ~cretary of Defense" ; and ~4) by~ striking out "Secretary to g'uarantee" In the fourth sentence and Inserting In lieu thereof "Secretary of Defense to guarantee". (ç~)! ~eetIon 807 oi~ such Act is an~en~d by~ ~tr1king out the second sentence. (r) * Section 809 is amended- /(1~ b3r 5~fJ4Jflg O~t "Seeretai~fle1" his &slgnee" in subsections (a) and (l~) and inserting in Ueu thereof "~e~retary of TYef~nse or his designee"; ~(2) by striking oi~t "Secretary $o.guarantee" fri ~ubsectlon (b) and insert- i~ in. lieu thereof "S~cretary of I~~nse to gn~~tantee"; (3) by striking out " `Secretary' or his de~1gnee', and `Secretary' " in sub- section (g) (2) (1) and inserting ~1ii lieu thereof " `Secretary of Defense or his designee', and `Secretary of t~e1en~e"~ ; and (4) by striking out "such Adfliinietration" in both places it appears in sttbsect!on (g) (2) (lii) and ins~t1ng In lieu thereof "National Aeronautjc~ and Space Administration". (~; Section 9O8~a) of such Act is a~mended by striking out "Housing and Home Finance Administrator" and 1nsertIi~ ta lien thereot"Seeretary of Housing and Th~ban Deve1opment"~ ~ ~ Section 908(d) of such Act Is ~rnet±de~i by str~ing out ", ith the approval of t1~e Housing and Home Finance dminlstrator,". I PAGENO="0021" PAGENO="0022" DEMONSTRATION CITIES AND BAN DEVELOPMENT (6) bystriking out the see&nd sentence o~ subsection (b); ( 7) by striking out "Housing and Home: Finance Administrator, th Home Loan Board" at the beginning of subsectio~i (c) and inserting in lieu thereof "Secretary of Housing and Urban DeveIo~ment and the Federal Home Loan Bank Board" : (b) by striking out in subsection (c) `~Home Loan Bank Board) the Federal Housing Commissioner, and tI'e Public Housing Commissioner" and inseiiting in lieu thereof "Federal H+me Loan Bank Board)"; (9) by. striking out in subsection (c~(3) "Housing and Home Finance Adminisljrator, the Home Loan Bank Bqard, ~the Federal Housing Commis- sioner, ahd the Public Housing Commi$oner" and inserting in lieu thereof "Secreta~y of Housing and Urban Deve1~pment and the Federal Home Loan Bank Board" ; ~. (10) by striking out in subsection (d) (3) "said officers or agencies" and inserting in lieu thereof "said officer or1agency" ; (11) by striking out in subsection (d). "flousing and Home Finance Admin- istrator, the Federal Housing Commis~iox~er, and the Public Housing Corn- missioner, respectively, may utilize funds made available to them" and in- serting in lieu thereof "Secretary of Housing and Urban Development may utilize ~unds made available to him" ; a4id (12) ` by striking out in subsection (~) "of the respective agencies." Szc. 206.; (a) Section 2 of the Housing *t of 1~49 is amended by striking out "The Housing and Home Finapce Agency a~id itaconstituent agencies" and insert- ing in lieu thereof "The Department of Ho~ising aiid Urban Development". (ib) Title I of such Act is amended by s~,iking out "Administrator" each place it appears and inserting in lieu thereof~."Secretary". (c) Section 101 (c) of such Act is amenfl~ed by striking out "to the constituent agencies affected". ~ (d) Section 106(a) of such Act is arnexkded by striking out paragr ph (1) and redesignating paragraphs (2~ and (3) a~ (1) and (2). (e) Section 107(b) of such Act is amended by striking out "Pu ic Housing Commissioner" and inserting in lieu the4~eof "Secretary of 1-lousin and urban Development". (f) Set~tion 110(j) of such &ct is amer~ded to read as follows : "(j `Secretary' means tUe Secretary of Housing and Urb~n Development". (g) Section 601 of such Acts is arne4ded by, striking out "The ousitig and Home Finance Administrator and the ~ëad of ë4cb constituent a ency of the Housing and Home Finance Agency". an~'inserting in lieu thereof " he Secretary of Housing and UrbanDevelopment". ~ . (h) The heading above section 605 is ~epealed. (i) Section 605 is repealed. (j) Section 612 of such Act is ameflded by striking out "Honsi g and Home' Finance Agency" each place it appears and inserting iii lieu thereo "Department of Housing and Urban Development". Sno. 207. section 602(d) (11) of the Federal Property and dministrativ& Service Act of 1949 is amended by striking out "the Housing and ome Finance Agency, or any offiëer or constituent a~ncy therein," and inserting in lieu thereof "the t~partrneut and Urban Development qr any officer". Szc.' 208. (a) Title IV of the Housiig Act of 1~5O is amended y striking out "Administrator" each place it appears hind inserting in lieu thereo "Secretary". (`b) Section 4O~(c) (2) of such Acl4s aine~ded by striking out "Federal Secu- rity Agency" and Inserting in lieu theifepf "Department of Health, Education, and Welfare". ~ . (c) Section 404 of such Act is amended to read as follows: " (f) `Secretary' means the Secretary of Housing and Urban Dc elopment". (d) Section 507 is amended- (1) by striking out "Public Housing Administration" an inserting hi lieu thereof "Secretary of Housing and Urban Development", and ` (2) by ~triking out "Admini~tration" and inserting in lieu thereof "Do- partment". ~ Section 508 of such Actis am~nded by striking out "Federal I-lousing Corn- *mis~loner" and inserting in lieu thefeof "Secretary of Housing and Urban Devel- opment". I SEc. 209. SectIon 304 of the Territorial ~)na'bling Act of 19i50 is amended by striking out "Housing, and Home finance Administrator" and inserting in lieu thereof "Secretary of HousiEg and ltrrban Development".. PAGENO="0023" \\ ~AN DEVELOPMENT 17 PAGENO="0024" 18 D~1i~!*T~TRATION CITIES AND UR~AN 1~EV~LOPMENT (g) Seetton ~ of~uèhamendm~it~ Is amen4~d~ ~ (1) by ~iktng t~flt "Thb1i~ flousing A~n1~tratli~n" and insert! ~g In lieu therec4 ` Secretary o~ 1ioUsin~ and U41*n ~eve1o~nnent' (2) b~r ~r~k1ng out `~e~e~a1 flousing ~n~n1~sthuer' and Inse g in lteu th~,e$t "Secretary of~i~oi~1ng.and tTr~a~ D~1t~pment" ; and (3) by striking out Fede~a~ Housing tCommlssiomer and insert ng in . lieu theré~t"Depártment ol! flOn~ing and ETrban De~1npment". Si~c. 213. (a) S~tfon 104(d) oi~ the flousin~ ket ~f 1956 fs$inended b strik- ing out "Housing and Home l~inance Admi~iistrator" and inserting ~ lieu thereof "Secretary of Honsingand th~ban Dth*~iopment". (b) Section~3O2 of such Act is amended- ~ * (1) by ~strlking out "Housing and Hon~ Finance Administratoi~" hi sub- sectiDn (a) and tnsertlng in Ii~u thereo~I~ecretar~r of Housing an Urban Deve1ei~*i~nt" ; ~ ~ ~ . ~ I ~ b~4str~king or~t "Athfljnistrátor" ~ place It appears and i sorting in lieu ~ iikreof "Secretary" ; and ~ ~ (3) b~st~ikl~ig ~ut "~ousin~ a~ Thi~ne1?'Inance A~e~y" in su section (c) and~ inserting In lieu thereof "D~p .. artment ~ ~ Housing an Vrban De~eloprtient". r ~ ~ Sn~i 214. (a) Section 104 of the Ho~ising JAct of 1957 is amended by striking out "Federal Hoti~1ng Cornmis~ioner" and Ikiserting initeu thereof " ~ ecretary of Housln~ and Urban Development". (b) Section 604 of such Act is amended-~ (1) by striking out "Housing and flome 13'lnance Administra or" and Inserthig in lieu thereof "Secretary of ~Hous1ng and Urban Devel pment"; and ~ ~ ~ (2') 1~y striking out "Housing and J~ome Finance Agency" and inserting in lie~~tbereof Department of Housli4g and Urban Dev~eIopment~ (c) Ze~on OO5of such Act' Is amended± ~ (1) !~y striking out Wederal ~ ckinmlssiouer" and in erttng in lieu ti~reuf "Secretary o1~ Housing ~u~JL~Jrbau ]~eveioiflnent" ; a d `(2) by striking out 4'Qo~ithnls~io4ir" and Inserting in ii thereof "Secrotary". ~ Sue. 215 (a) Sections 52, ~8, and 5~3 of ~:he Alaska Omnibus Act are amended ~by striking out "Housth~ stnd Home Finan4e Adminietrator" and inse ~ tag In lieu thereof "Secretary of Housing and Urban~De~elopthent". (b) Sedti~n 53 of such Acl~ ~s further an~ended by striking out "Ad inistrator" In the second paragraph and Inserting *th~ lieu thereof "Secretary". Sno. 2i~. (a) Section 202 of the Hon4ig Act ot 1~59 is amênde ~n b~ Str1kIn~ out "Administrit~c~" each place it appears a d inserting in U~ti~ .there.of "Secretary" ; ~ ~ ~ . ~ ~ ~ (2~~ by striking out the comma a~d . the clause beginning th "except" at the end of subsection (c) (2) ; añ4 ~ ~ * ~ ~ .. ~ ~ ~(~) by strIki~ out Stibseetion ~ (d~46~ ~i~si insCrtir~g in lieu hereof "(0) ~ri~e! terni `seeretary' means ~ ~~eta~ hf ~ 1~ousing and Urban ~ ~Develöprn~it". .~ ~ .~ , . ~ ~ ~ (b) Sëction.306(b) Of such Act is aei~e&~ ~ . ~ (I) by striking o~t "Hoi~ing *d I~dme Thiance Admin strator" and inserting in lieu thereof "Secretar~ o~ Housing and Urban 13 velopment"; and . ~ ~ ~ (2) by striking out "Adminisjfra~er" and inserting in lieu thereof "~erotar~r". * . .i ~ (c) Sections 802(a) and 808 are am~rrded by striking out "Hons'ng and i~ome Finance Administrator" and inserting In lieu thereof "Secreta y of Housing and ~Th~ban Development".; 4 . ~ SEq ~L7 ~ction 5 o~ t~e Act of Sepjsnnber 8 196G i~ amended y striking out `B~oth,jng Rwi Rome 1'Iflanee Mlxni$strator" and inserting lieu thereo1~ "Secreitary of Housing aM Urbafl Dev~4iopment". Si~c 218 (a) Sections 2~Y( a~iid &L2tOf the ~EIou~ijigr Act of I are amended by sti~iking out A~H~usIngand Bbige~nance A~mtnist~a~tor" a d Inserting in lieu thereof "Secretary of Housing an4 tjrban Developtaent". (b)~ ¶Ntle VII of such Act is ame*Led by strikisi~ oUt "Adm nistrator" each pia~ it appears and Inserting In lieu t~iereof "Secretary". (c) Section 312 of. sueb Act is further amended by striking o t "Administra- tor" and Inserting in lieu thereof "Se~etary". (d~ Section `~O2 of su~h Act is ame*ded~- I PAGENO="0025" DEMONSTT]~O~ C~TIE URBAN D]~VELOPM1~tNT 19 and inser PAGENO="0026" 20 DEMONSTRATION CITIES AND BAN DEVELOPMENT tie Housing and Urhan Devehj~$nctLt Act o~ 1965 is anien4ed by ainistrator" each place it appears in sections 101(c), ( ), (e) 313(b); 315(a) (8); 402 ~nd 401(a) and Inserting n lieu Act is am ing out "Administrato " ~`ting in lieu ary". &ct isame whie ma; rajtor and Pub- ) ~ind inserting t is"; and n (b)(1) ~g and Urban I Act, 1966, is amended- ~ (a) by striking out "Admi~ in the first sentence and inse] ~ry of I ~ and Urban Development" ; and (b) by. striking out "Adminis1~ratoi~" in the second sente ce and inserting . in lieu thereof "Secretary of H~uaing and Urban Develop ~ ent". ~n$,. 225. (a) ~ Sections 493, 657, a4id 1006 of title 18, United States Code, are arne~acIed by striking Qut "Federal ~Housing Administration" nd inserting in liefifthereof "Department of HonaIn~ and Urban Development" (`s) The eighth paragraph of :on 709 of such title is a ended to read as follows PAGENO="0027" DEMONST1~ (2) by str1kii~ Depart ig Adm1nistra~ PAGENO="0028" 22 flEMO~SThATI~ON CIPIES ~D 1YB~AN DEVE~LOPMENT (2~ ~ ~tribx~g ot~t "AdinJi~1stra~or" 4ac~ place it appears and i~erting~ 1nlieni~ll~reOf"Seerei~ary" ; ~ , ;~ ~ ~ . (&) r~t~tr~kti~g øat ~ and ins~rtthg ii~ li~i~ the~kf~ ~ B~&~thg ~ ; an4 . (4)i ,1~ ~triki~g oat"m~4ie ~ place i~ appears ~ "~et~4~ ~Ho Lflg~tnd~rban Deve~pment".. (b) Pa~$raph (1~L) of **~ti~n 52(~ ~ e~ed~SbatUite~ ~s aided- (1~ by ~tr11~thg o~t~ "oi&the PU~e ~*~s~g.An4nistrat~on"; I (2) by sbrikii~g; out `40rAd nist~rtt*~ffl" jn b~t~ pl*~esit appea~rs; by ~!kIn o1~:~'IIo~slr~g &n4~Eome I~th~aneo Ai~nninistr$or" andt ins~rWig in lieu tliere&f "Secretary o~ HotNii~g' and Urban D~vei~oprnent"; and I trs an~ inserting: at he end thereof ~ P MJTICE to ii ~ure mortga~ i such t ions of Lt to a~ com~ini mort~age shall th~ ConunisMoner ~i construction is Commissioner's ~~ciire1n~nts (or, in PAGENO="0029" 23 me, or not to as the corn- URBAN V~ELOP~ENT PAGENO="0030" 24 DI~*O~IWI~RAPION CITIES AND frBA~ DEVELOPMENT `ew~re~it oper4ttons miderthis title may ~ or other ob igatton~ guaranteed as to~p1~ine1paI and inte~est4y~tk~ United States If at jiy tune the Commis~noner leterinines that capital ~surt~1u~ ai~d reserves of t e Fund exceed the ~rei~ent and any reasonably pro~pective ~Euture requireinen of the Fund such excesses may be deposited in the~Trnasury as miscellaneous receipts " (b) Ifat any time the moneys ~ inthe iFu *~ iid are insufficient to ake pay- merits in connection with the 4efault ~f any loan insured under this title the Oommission~r is authorized xto issue.to~ the. Secr~eta~ry of the Treasur notes or other ob1i~a~tions in such forms and denomi~iatious, bearing such matti ities, and subject to such terflis and conditions as ma~r j~ prescribed by the Corn issioner with the a~prova1 of the secretary oftbe~i$asnry. Such notes or ot or cibliga- tions shall Jbear 1~nterest at a ~te~de~rn~44 ~ ~ eii~ by tbe~Secretary ofthe Treasury~ taking intolconsideration the ~urrent aver4ge market yield on outsta ding mar- ketable ob~igations of the UUlted States. ~f ~ornpara~ie maturities uring the month preceding the issnanee of s~ieI~ note* or~oU~er ~Jigations Ph Secretary Qf the treasury is authorized and 4~reci4ed to~ ~urehase any notes and other obligatiQns to be issjie~ I~e~eunder an~1 fo4 such purpose he is author ze~1 to use as a public debt transaction the proceeds ~from the sale of any secur ties issued under the Second Libsi-ty Bond Act, a~ ani~d~, and~ ~be purposes for which securities may be issued under such Act, as amended, are extended to . include any purebase of such note~ and oblig~t~ons. The Secretary of tb Treasury may at~ar47 time sell any o~ tI~e notes or ot~ber obligattons acquired by him under this subsection. All redein~4ions, purch~es,and sales~y the Secr tary of the Treasury ~ of such ncites or other obhga~4ons shall be treated as ublic debt transacti4ns of the United States FuiuJ~ borrowed under this sub ection shall be deposited in the Fund a~d ~edemptio4 of suçb~notes and cibligat~ ns shall be made by1~he Oommissionertrorn the Fundf ~ ~ `4P~Y~fl5NT OP INS~RAiiQE BENEJ~ITS S~x, ~OO4 The mostg~~ee shall be ~i~2tI~~d to receive the be ellIs of the insurance under this title lb the manner providcid in siibsectioii ( ) of se~lto~i 207 with respect to mortgäg~ insured ;undor that section. For uch purpose the provisions of subSections (e), (Ii), (1), (j), (k),(l), and ( ) of section 207 shall apply to mortgages msnred u44er this title except that 11 references i~n such subsections to seetlôn~ 2O~sball?be deeme4 t~refer to this title and all referenc~es m such subsections to' the $t~sln~ Insurance Fund or the Housing ~ind 4a11 be deei~ted to refer to the G~atp J?raetiee FaciUties In trance Fund. i{EG+TToi~S "SEOJ 1005. The Oomm1s~ioner Ohaff1~ p~s~rib~ such regulatio s as may be *necessak~~ to carry out this title, aft~r ~ ~o~ilthig with the Su goon General `of `the Public Health Service with res~ee to àxi~riiealth Or me al aspects of the pro~gram under this title which ~ be invciWed in such r laUOns. V . "I~A~a 3SL&NDARDS ` V "Sue. 1006. (a) All laborers and mcchaaatcs employed by cont actors or sub- contra~toim on all comstructioai proj*ts financed with the assi tance of mort- V gages ~insured un~ler this~ titié~ shall `1~ j~aid wages at rates not ess than those preiui~lthg on ~hnilar con~trUcUon in 1~he loc~tlity as determined b the Secretary of Lai~,ortü accordance With theDav1~aeo1i Act, as amended ( 0 U.S.C. 276a- ~ V V V I V "(hi) The Secretary o~ Labor ~1Ia11~ hkve, ~with~i~e~peet to the abor standards si~e~i1~ed In subseeWn (a.), the a~thJ~tt~as~d fUñCt1~Oh's set fort in Reorganiza- tioi~ Plan VNumbeT~d~ 14 of 19150 (15 ~`it. 8176; ~5 U.~C; 133z-45 , and section 2 of the Act of June 13, 1934, as amen~ed (40 U.S.C. 276c). "DISFINITIONS "Sno. 1007. FOr the purposes of thistitle- "(1) The term `construction coei~' meafls the cost of the c nstruction of a grcsi~p practice facility, `and include~ the cost of the ereeticin o new structures and the acquisition, expansion, rei4odeUrt~, or lrnptosreiñeiit f existing struc- tur~e~ the cost of necessary acquhfltion of the lajid On whi h the facility is loca1~ed and the eost of such equip t á~ ma~ permitted In re latlons PAGENO="0031" lor which yOct1a~ "(B) a i-~ for the I ~(9) `L~. and his or its PAGENO="0032" 26 DEMONSTRATION CITIES AND V~BAN DEVELOPMENT TITLE Il-LOAN PRoGRAM LOiNS SEC. 201. (~) The Housing and Hoxne I~'14an~e Administrator (in this title referred to a~ the "A~1ministrator") is authofri~ed to make loans to any group practice unit~ or organizations to assist In .jlnanciug the construction cost ot group practice fa~f1ities. No suc1~ loan .SJIaUJbe imade unless the Administrator finds (1) thatthe applicant is respoiisible and~b~e to repay the loan but is unable to secure the funds from other~sources (with e~ without mortgage insurance under title X of the National Housizig Act.) upon te4ns and conditions equally as favor- able as the terms and conditions applicablefto loans under this title, and (2) that the construction or rehabilitation will be undertaken in an economical manner, will not be of elaborate or extravagant design or materials, and will be adequate and suitable for carrying out th~ purposes of this title. The amount and maturity of a loan under this title shall not exceed the limits prescribed in section 1001(c) of the National Housing A4 A loan under this title shall bear interest at a rate equal to the maximum ratepapplicable under section 1001 (c) (3) of such Act ~plus the premium charge applic~thle under section 1002 of such Act, and shall be~seeured in such manner as may~be determined by the Administrator. (b) EaoJ4 contract for a loan under th~ title shall contain an undertaking (in aecordábce with regulations prescribedlunder this title and in force at the time the io~n contract js made) to the eff4~t that, except as authorized by the Administrator, the property will be used a ~,oup practk~e facility until the loan has been paid in full or the loan contract o~erwise ter~1iaated. (c) No loan shall be made under this title unless the borrower certifies (1) that it will keep such records relating to the loan transaction and indebtedness, to the construction or rehabilitation of th4 facLlity covered by the loan, and to the use of such facility as a group prae1~ice facility as are prescribed by the Athninistr*tor at the time of such ~erUflcsM~çrn, (2) that it will make such reports as may. frqm i~ime to time ~erequired byithe Administrator pertaining to such matters ai~kd (3) that the Admiatstrator br any authorized officer or employee of the Ho~is1ng and ~orneFL~anc~ Age~c~r, oi' of any agency or ins thition em- ployed or ~utiLi&4 by :tbe Administrator ~er tkat ptwpose, shall ha e access to and the right toexam&ueaiid ~ii~Ut such *re,~ords. (d) ~he Admiziistratoz may sell to a* ~person or entity apprev U for such pu~posr~ by him, any loan made under tl~1s title, atid a mertgage s curing any loan tl~us sold may be iusur~d under title ~ of the National Housing ct. (~e,) ~Z~° loan contract shall be-entered i~i~o under this title after J * e 30, 19W, except pursuant to a conimitusent to len4 issued befoi~ that date. GROUP PRAC~[CE FA~[LIPIES LOAN FUND Sne. 2t~2. There Is hereby created a~ Group Practice Facilities Loan Fund (bereaft~r in tl~Lis section called the "$nd") which shall be avai able without fiscal 3'e~r limltatjou to the Adminis:tra$r~for carrying out the prov'sions of this title. The Administrator is hereby auJ~hc~rized to transfer to th Fund from time to 1ftn~e from the Appropriations pr~i~l~ed under the authority a section 301 and av~il~.ble therefor such suws as h~ deems necessary to provi e capital for theFup4l. General expou~es of theMn4i~jsj~rator ino.perating the p ogram under this titl~ may be charged to the Fund. .J~T~meys in the Fund not n eded for cur- rent op~rations uniler- this title may. b~ invested in bonds or ot r obligations guaranteed as to princjpal and interest ~y the United states. Any xcess moneys in the Fund may be transferred to the f~roup Practice Facilities I surance Fund established by section 1003. of the NatioMi Housing Act or, if not n eded for such purpose, shall be deposited in the Treasury as miscellaneous recei ts. POWERS OF 4DMXNISTBATOa Sac.: ~03. In the performance of, ar~d With respect to, the fu ctions, powers, and ~ties vested in hijn by this title, *e A~n1n1strator shall (in ciclition to any authortty otherwise ve~tecl In him) l~we the functions, powers, and duties set iorth ~n seefion 402 (ex~êpt si~bsect14~ (b) and (~) (2)) of t e Housing Act ofi95~. ( R~GbLA1~TONS Szo. 204. The Administrator, In prE~scrib1ng regulations to car y out this title, shall consult with the Surgeon General of the Public Health 5cr ice with respect PAGENO="0033" 60-878-66-Pt. 1-8 PAGENO="0034" 28 DEMONSTRATION CITIES AND URBAN DEVELOPMENT SEC. 303. (a~ At the request of individuals ~or organizations operating or con- templating t1~ operation of group practicel facilities (as defined in section 1007(2) of th~* National Housing Act), the ~`edera1 Housing Commissioner or the Housing 4nd Home Finance Admlnlstratfr may provide or obtain technical assistance in the planning for and eonstrueti4ñ of such fadllities (b) With a view to avoiding unnecessar4 duplication of existing staffs and facilities of the Federal Government, the Fed4rai Housing Commissioner and the Housing and Home Finance Administrator ~tre authorized to utilize available services and faiclities of any agency of the l~'ederal Government in carrying out the provisions of this Act and title X of the National Housing Act, and to pay for such services and facilities, either in a4~vance or by way of reimbursement, in accordanee with an agreemeilt between either or both of them and the head of such agex*~y. ~ ; AMENDMENTS ~ro O~EEJ~FEDEaAL LAWS SEC. 304. `(a) (1) The si~h sentenceof ~ragraph "Seventh" of section 5136 of the Rêvi~edStatutes, as arnended (12 U40. 24), is amended by inserting after "FederalHbme `Loan Banks," the folloWi*~"or obligations which are insured by the Federat Housing Oommi8sioner undet fA~t1e ~ of the National Housing Act". (2) Phe third sentence of the first pttØagraph of section 24 of the Federal Reserve Act, as amended (12 U.S.C. ~ is amended by inserting after "or sections 1471-1484 of title 42," the fol~o*ing : "or which are insured by the Federal Housing Oommissioner pursua~1t~ to title X of the National Housing Act,". (b) Subsection (a) of section 304 of tIie~Trust Indenture Act of 1939 (15 U.S.C. 77ddd) is amended by striking out the lirord "or" at the end of paragraph (8); by striking out the period at the end p4 paragraph ~ (9) and inserting in lieu thereofa ~emico1on and the word "or" ; tr~4 by adding after paragraph (9) a new paragraph as follows : ~ j, " (J~O) any security issued underf a mortgage or trust deed indenture as to which a contract of insurance 4der title X of the National Housing Act is In effect ; and any such security ~ha11 be deemed to be exempt from the provisions of the Securities Act of ~988 to the same extent as though such security were specifically enumeratekl in section 3 (a) (2) , as amended, of the Secnritles Act of 19153 (15 U.S.C. 7~Te(a) (2) )." (c) Section 263 of chapter X of the Bankruptcy Act (11 U.S.C. 663) is amended by adding at the end thereof the f~l1owing : "Nothing contained in this chapter, shall be deemed to affect or apply to the creditors of any corporation under a mortgage insured pursuant to title X of the National Housing Act." Mr. B~iu~rr. Later on in the he~ring, we will also hear testimony on varioTts legislative proj~osals in th~'mass transit field. From the expert witneSses who will appear before ~s we hope to be educated and guided in our objective, which is to repo4t a~neffective bill which will provide the tools and the incentives nece~ary to rebuild our cities and to im. prove the living environment of dur metropolitan area, and to provide more and better housing for our p~ople. The President's message prov~des us with an inspiring challenge. Legislation is proposed to combine physical rebuilding and rehabilita- tion with effeotive sot~ia1 programs to make our cities better places in whieh to live and grow. Our job is to give the administration the legiSlative authority it needs t~ get the job done. We are honored to bk~ the kickoff pomt for this ~it&lly needed legislation, and are most pleased to have as our first wit*ess otir old friend but very young Dr. RObert 0. Weaver, who now sp~aks from a well-deserved and elevated vailtage point o~f a Cabinet offie4r. Secretary Weaver has with 1Mm his outstanding group of assistants who will help him administer the many programs of Federal assistance in the field of housing and urba~ti deVelopmctit. . Mr. Secretary, before you begin your testimony, the subcommittee would very much like to have tou introduce your new t~nder Secretary and Assistant Secretary. Bitt before that, ladies a d gentlemen, I PAGENO="0035" DEMONSTRATION CITIES URBAN DEVELOPMENT 29 would like now to recognize `the ha rrnan of the full Committee on Banking and Currency, the Hono ab e Wright Patman of Texas. Mr. PATMAN. Chairman Barre t, .R. 12341, the demonstration cities bill, is another bold and im gi ative proposal in keeping with the landmark pieces of housing 1 gi lation that this committee has reported to the floor of the I-louse f epresentatives in recent years. I take great pride in sponsoring this ad inistration bill. I am convinced that this bill is a I portant and essential supple- ment to the Housing and Urban cv lopmeut Act which we passed in the first session of this Congress. The Demonstration Cities Act w 11 how not just a few cities but all cities, large and small, can rebuil a d restore their blighted neigh- borhoods. What we learn in the cit es here the demonstrations take place will point the way to all other iti s in search of solutions. The proposal offers a wide variety of new o s to attack the problem of cen- tral cities, and there will be great xi ility in the program. These demonstrations will be carried out a 1 rgely completed over a 6-year span, but long before that period e s e will be ~earning new tech- niques and new solutions from these i ot ities. This program puts new tools an e powers in the grasp of local leadership and private initiative. lu ions will be shaped by local officials, with a minimum of Federal d re tion and a maximum of Fed- eral assistance. This program will, more than any th r, call into play the creative federalism whjch the President firs de cribed in his Great Society address. The major objective in the propos rban Development Act is to bring into physical being the needed je ts planned for metropolitan areas. New grants are proposed to a st n planned metropolitan de- velopment. But this is iiot money fo la fling. It is money to help communities pay for the facilities the -water and sewer systems, highways, mass transit, airports, par a d open space, and the like. These grants would be made to citi s h t work together to plan for the orderly growth of their entire urba re Another section of this act would att c t e problem of urban sprawl by permitting FHA to insure mortga s or privately financed land development. This program would ma e it feasible at long last to open up new outlying areas to well-planned large new communities in which both small and large builders could offer housing and facilities for families of all income groups. To make these new proposals work, of course, it will take large-scale financing through both the Federal Government and private lenders. As we well know, housing and urban development take tremendous capital outlays. This means that billions of dollars must be borrowed every year just to keep up with the most minimal needs of this area. And virtually all of this money comes out of the private money market. Therefore, when we consider bill, such as the one before us the conditions of the money than housing by the changes credit. Money and the cost There can be no escape from this* L or urban development take into consideration ograrn is affected more and the ~vaiiability of parthof housing. PAGENO="0036" 30 DEMONSTItATION CITIES AND U~BAN DEVELOPMENT We can sit here and pass what we con~ider to be great housing bi]]s. We can congratulate ourselves on a job *efl doi~e. Bu~t, if at the same time we allow the money needed to flnan~e the,se programs to be priced out of the reach of millions of low-income and middle-income Arner- icans-then what have we ri~a11y accomplished? It is tragic that today interest costs are the biggest single factor- the biggest single cost-in housing. T4day, a $20,000 home mortgage will requirE, $20,881 in irrt~r~st eharg4s over the life of the 30-year loan. This means that the money-th~m interest-is worth more than all the lumber, the glass, the plumbing~ the woodwork, the craftsman- ship, the land, and everything else that toes into a house. So let us not take a "head in t,he sand attitude" that interest rates and housing are separate subjects. If we are really serious about pro- viding housing amid urban development then we also must be serious about holchng down interest rates. Dr. Weaver, this is the first time you have appeared before the corn- mittee since you were named Secretiu~y of the new Departmeiit of Housing kfl(l TJrb~tn Development. fI want to congratulate you on your appointment. . I T~Jnhap~pily, I realize that one of ycfur first actions as Secretary was to approve the order raising the int~fr~ rate by one-fourth of 1 per- ~ oent on FT-IA niortgages. As I said itt the time, I regard t1ii~ increase as highly regrettable. I realize, Dr. Weaver, that this was forced on you by the fact that the Federal Re~rve Board, acting in defiance of the Pr~esident and the Congress, rai~ed the discount rate to banks on Deceniber 6. I realize that you had little c~hoice; in effect, Federal Reserve Board Chairman William McChesney Martin served as Secre- tary of your Department insofar as p1w increase in Fl-IA interest rates isconeeñied. I Of course, I have made no seci~et of the fact that I disapprove sfrongly of the Federal Reserve di~tating policy to the Secretary of Housing and TTrban D~veiopment ~r to any other part of the execu- five or legislative braric,hes of this1E~overnment. This is oor public policy which can lead to the destru~tion of many of the gr at housing and urban development prograths which your Depa trnent will administer. Dii. 1~Vea~Te,r, T want to enhI)hasizt~ my concern over what ising inter- est rates are doing to these pro~ramns. I want to ur e you very sLrongly totake an active part ip doimig everything po ible to keep down interest rates. As I have nc~ted earlier, the cost of oney is now beeon~ing the dominant factor infall housing. Therefor . I hope you wili~b~ a ci~tisader against any effoft to price money-and ereby hous- ifl~~LJ4)Ut ôft~he reach of the peop~e who needhousimig, si m clearances axidtfrhan development prograrns'the most. As you know, the Full Ernplo~ment Act of 1D46 instr cts the Fed- eral Reserve Board to coordinate its policies with the a ministration. However, the curremit Chairman of that Board has chose to ignore the law, ~ind he apparently has no intention of coordinating with the 5cc-. retai~y of Housing and Urban Development or any otlie person in the ex~ütive or legislative branch. / ihope~Dr. Wea!er, that you ~ill take concrete steps t see that your 1~artment i~ `represented on tl~e coupeils that are mv ved in setting monetary policy. You must in~ist that the housing pr grams be con- PAGENO="0037" DEMONSTRATION CITIE~ AN URBAN DEVELOP:MENT 3.1 sidered before such actio~is as tha~t ah\en by the Federal Reserve Board on December 6 are put into ~ffec~. I think you will get a sympa~ththc ear from the Pre~ident. And, if\y u hin~ you need legislation inthis area, I am sure that this ~Qm~initt~e w~ 1 be sympathetic. I don't think anyone sitting on this co~minitte~ a ts to see housing programs, on which we spend many long hours,\ e~ oyed by the willful actions of a one-votemajorityof the Fed~rai ~ se ye Board. Again, let me say that t~e bill b~ oi~ us is an imaginative and skill- ful answer to many of the proble ~ urban. and suburban develop- ment. It deserves early cousider~ ~ o~ by the Congress. And I con- gratulate my colleague from P i~ lvania, Bill Barrett, ~or ~o promptly calling his subcoi~nm~ttee t ge her to work on this legislation. ~ Thank you, Chairman.B~rr~tt. ~ Mr. BARRETT. Thank you, M~. C ~ r ~n. ~ ~ ~ Dr. Weaver, will. you b~ kind h u h now to introduce your . __ sociates for the benefit of t~ie mem s f the subcommittee ? . STATE)\~[ENT OP ROBE1~ C. Wl~AV , S. ~ ~ET'AB! OFH~OUSING AND URBAN DEVELOPMENT ; ACOO ~ lED BY ROBERT C. ~ WOOD, UNDER SECItETABY; PHILIP N, Et WNSTEIN, ASSISTANT SEC~~ RETARY FOR MORTGAG1~ CRED ; HARLES iY(. ~AR, ASSTS~- ANT S~CRETA,RY ~OR M~TRQPO . ~ 1\~ Dzv:ELoPl~&:1PT~r ; EOWABD WHA1~TON, DEPUTY UR~AN R ~ AL COUI$SIONER; MIS. MARIE C. McGUIRE, P1TBL~C EOU ~ G OOMMISSION~R ; AND ASH- . LEY FOARD, . AC~FING GEI~ERAL t~ S~EL ~ :~ Secretary. WEAVER. . Thank you, . hairma~n, and thank, ~ you, Chairman Patman. . I have with me this mornin~ t~o g~ ic en.wlio `have not appeared before this group before. .Th~ first is ~ e nder Secretary, who comes first with the credential of'beii~g the C~ ir an of the task force which was appointed by `the Preside~it i~n .co~ eb ion with this Department and its program. And `he i~ a~ yo~t l~ ow, an authority on the matters of the governmental çlifficult~ ~ ~ our urban communities, particularly with the metropo~itau gc~v ~ ental ` problems and the proliferation of governments ~hich ha~ ss s in the urban fiel& He was formerly a professor of po~titioal s~i lie at MIT, and now is the Under Secretary. Mr. Wood. Mr. WooD. Thank you, Mr. CI~airxnan~ Secretary WEAVER. And the ~ec~nd g~ ti man that I introduce to you is the Assistant Secretary f~r Met$~oli an Development. lie is an authority in land use, and ph~nning. \ ~ has been long active no~ only as a student in this field, hUt also `~s an operator, being used in a consultant capacity, being used in a prb ra development capacity. He ` also served on the task. force And h .b ings to ~ñs some unique talents. And he is the Assistant Secreta . , r. Oharles llaar, form-, erly professor of law at Harvard T~Tniversi ~ . . . . Secretary Haar ~ Mr. HAAE. Thank you, Mr. Secretary. ` ` . . Secretary `WEAvER. We have ~ `old ie~ 8~ as you kndw~ but L think we should have them identi~iecl for y u again. TJnfortunate~y Commissioner Slayton could not b~ here; U h s deputy, Mr. Howard PAGENO="0038" 32 DEMONSTRATION CITIES AND I~RBAN DEVi3ILOPMENT Wharton i~? here representiiig the Con~rnissioner of ~Urban R newal. Mr. Wha~t~n is on that end of the tab1~. And sitting next to him is a lady tht~ frou all know who has been ~or 4½ years' the Commssioner of the Pub~lic Housing Adxtiinistratioi~,,Mrs. Marie McGuire. ~ And sitting next to me ~*i my left ~s the Acting General ounsel, Mr. Ashley Foard. ` I And now :i have left one for the lasi~, because he is in a uniq e posi- tion. He ~s both old and new. He r4tains an old title, whic is that of Federal Housing Commissioner, 1*t he has acquired a n w title. And that ~s the Assistant Secretary fo~ Mortgage Credit. M . Philip N. Browustein on my extreme left. ~ And w~ are all d~li~hted to be hei~. And we are all ver pleased to have t~iis opportunity to present $he administration's pr gram on housing ~nd urban development as e~braced in the legis1ati~n that is now b~fô$ us. , ` ` With your permission-~--- ~ Mr. B4rn~r. Mr. Wid~all ? ~ ` Mr. WIDNALL. Mr. Chairman, a d Mr. Weaver, on beh if of the minority, I too want to welcome yth here with your aids. We know ` how con~petent you are in the field, and the staff you have s rrounding you. ` ~ ` ` ` Wliei~ we finished theiast housii~g bill, the omnibus hou ing bill, I recall I~ was asked by sOme n-iembets of the press, do you hink there "!v~ll hejany housing legislation ne*t `time. And at that t me I said, ~il, tl~e certainly sh~u1d `be tirri~ `to digest some of the things and see whi~ther we are going, but I ell*ct there will be some. But I say now th~at with three bills before u~, the Demonstration C ties Act of ~ and the planned metropolita~n development and ~ D program amendments, we have a greater r*ass of proposals befor us than at the time we enacted the last omnibus bill. I am pleased at we have started hearings. These are extremely important. A d I do feel that they should be full and coin~prehensive. And as to some of the new. ideas that are involved, we s~ouid take'a good hard ook at what ~u~re trying to do ~n the urban `field though a demo stration bill, J th~ik, is a very woi~thy `appro~eh. there are some arts I would like'to inquire about. And I ~vould appreciate som information about it. ` I ` ` S~retary WEAVI~R. Thank youjvery `much. Mr. BARRETT. Thank you Mr. Widnall. Dr. Weaver, if I may, befoiie you start your testi ony, lay the ground rules for the benefit of~ our members. We ar going to ask th6ni to give you an opportunity to complete your estimony, and ~~ft~r the completion of your 1~estimony, we are goin to give each mex4iber 10 minutes in the first round to ask questions. So, Doctor, if ~ will now start your testim~y, we will let you com lete it. ` ` ~ecreitary Wi~vi~t. With y~ur permission Mr. Ch irman, I shall dis4~uss the objethv~s and prin~ipal provisions of the hree bills pro- posed by the administration ~ô carry out recomme dations of the Pr~sident in his message on c'ifr demonstration prog ams `and `to im- prove and extend housing and~ urban development leg sl'ation. These three bills are : the Demonstration Cities Act of 1966 the Urban De- velopment Act, and the Houthng `and Urban Devel prnent Amend- ments `of 1966 introduced by Oongressman Patm'an- .R. 12341, H.R. PAGENO="0039" I 33 DEMONSTRATION CITIES D URBAN t~EVELOPMENT 12946, and H.R. 13064-and by ongressman Barrett-H.R. 12342, H. . 12939,and H.R. 13065. ie demonstration cities bill is he most important proposal in the ~esident's program for rebuilding merica's cities. In his message to the Congress recommending the demonstration cities bill, the Prethdent said : From the experience aC three decades it is clear to me that American cities require a program that will- Concentrate our available resources- n planning tools, in housing construe- tion, in job training, in health facilities, in recreation, in welfare programs, in education-to improve the conditions of li e in urban areas. Join together all available talent and ski is in a coordinated effort. Mobilize local leadership and private initiative, so that local citizens will determine the shape of their new city * ~ The demonstration cities bill will make it p~ssible for cities of all sizes to undertake such a program. This bill will help cities to plan, d vel p, a~nd carry out comprehen- sive city demonstration programs. h se are locally prepared pro- grams for rebuilding or restoring entir sections ana neighborhoods of slum and blighted areas. It will el cities to provide the public facilities and services, including city ~ e aids, needed to eimble the poor and disadvantaged people who 1 ye in these areas to become use- ful, productive citizens-citizens abl t join in the general pros- peri'ty this Nation now enjoys. This bill will make it possible to im rove and sub~tantialiy in- crease the supply of adequate low- an oderate-cost housing in the cities. It will make it possible for c ti s to concentrate their edu- cational, health, and social services on he problems of the large num- bers of poor and disadvantaged people w o live in slum and blighted sections and neighborhoods. it will e it possible to treat the human needs of people in the slums at th s ~ e time physical rehabilita- tion is being carried out. To qualify for assistance und~r this bll, a city must be prepared to 1)lan and carry out a comprehensive it demonstration program. This will be a local program. It will b p1 nned, developed, and car- ned out by local people. The characte a d content Qf the program will be based on local judgments as to the it s' needs. This bill will provide Federal funds o over up to 90 percent of the cost of planning and developing th c mprehen'slve city demon- stration program. It will provide s eci 1 Federal grants-sup- plementing a'~sist;ance available under e sting grant-in-aid pro- grams-to help carry out all of the activti s included as part of the demonstration program. The amount of these special, suppleme ta grants, will be equal to 80 percent of the local or State share o t e cost of all projects or activities which are a part of the demonst ti n program and financed under existing grant-in-aid programs. I ill soon explain more fully the provisions of this bill relating to thes s pplemental grants. But first, let me emphasize that it will no be easy to qualify for this assistance. This bill is designed to h p ities willing to face up to their responsibilities-willing and able t b ing together the public and private bodies whose joint action is ne ess ry to solve their prob- lems-willing to commit fully their energie a d resources-willing to PAGENO="0040" 34 DE1~ON~TRA~TION CITIES AND L~R13AN DEVELOPMENT undertake~a~tions which will have wide4pread and profoirnd effects on the physical and social structure of the ~ity. To qualify for assistance under this 1411, a city's demonstration ~ gram must meet the following general criteria: First, it must be large enough-to remove or arrest blight and decay in whole sections or neighborhoods-to provide a substantial increase in the supply of adequate housing for low- and moderate-income people-to make a significant contri'b~tion to the provision of addi- tional social services for the poor an~ disadvantaged living in slum and blighted areas-arid tomake a sub~tant,ial impact on the sound dc- velopment of the entire city ; Second,;the rebuilding or restoratft~n of slum and blighted sections and neighborhoods must contribute t4 a well-balanced city with ade- quate public facilities; Third, the program must provide ~or widespread citizen participa- tion-and maximum opportunities for using resideiits of the areas being rebuilt in the work of rebuildii3g; Fourtl~, adequate local resources n~ust be available for carrying out the program ; Fifth,, the local governing body ~nust approve the program-aiid local ag~npies whose cooperation is n~c~ssary to carry out the program must be willing to furnish that cooj~ration ; . Sixth, there must be a plan for r~locating, and adequately compen- sating, individuals, families, and b~isiness concerns displaced by the program ; and . Seventh, all citizens must have inaxinmm opportunity in the choice of housing provided by the program. Finally, the city's dernonstratic~n program must be more than a statement of goals, it must be a definite plan of action. Projects and activities to be undertal~en must bq scheduled and. ready for initiation withhi;a reasonably short period o~ time. In addition, we will expect a cit~' which undertakes a demonstration progr~tm to take advantage of moc~rn cost-reducing technologies. We will expect a concern for good ~sign and attention to man's need for open spaces and attractive lanjd~caping. A program meeting these crit~ria is not lightly undertaken. But nothing else will do. A total commitment of the energies and resources that lie within the American city isnecessary t&stop the growing physical deteriora- tion and the~ social alienation of 4isadvantaged groups concentrated in low-ijncome ghettos. Two type~s of Federal assista~ce are availabie~ to ~ help finance the pi~Ojects oractiviti~s which are u*clertaken as part of an approved corn- Prehensive city demoi~stratiôn p4ogram. First, the complete array of aU existing Federal gra.r~t ai~d urban aid pio~riams in the fields of housing, renewal, transportation. education, welfare,~ economic opportunity, and related ~)rograms WOUI(l be ava ii- al)la for the demonstration program. This bill ~ontemp]ates tiia~ existing Federal ~rant-in-aicl pro- grams-and funds now ayaiiable for those l)1~o~rarns--wi1l he ii~ed iii carrying otit projects or activities which. t1iou~rh part of a corn- preben~ive city de~nonstratioi~ pro~r~m, are eligible for assistance under existing grant-in-aid prqgrams. PAGENO="0041" DEMONSTRATIC~ dl range 01 developm mt of the rojeets PAGENO="0042" 36 DEMONSTRATION CITIES AND T3~BAN DEVELOPMENT The Federal assistance authorized by the demonstration cities bill will be provided to a "city demonstration agency." This may be the city or any local public agency established or designated by the local goVerrnng body to administer the comprehensive city demonstration program. I A very wide range of administratii~e organizations is permissible so long as ~ the structure serving as *e thty demonstration agency constitutes a public body which. is suI~jec~ to the control of the local governing body. I The city demonstration agency, re*ardless of its type, must have the endorsement and support of the elected officials of the city and the agency must have sufficiei~t power and authority to undertake tue overall administration of the demonstration program. This does not mean that the city demonstration agency would have to assume operational control of all projects and activities that are a part of the local demonstration program. For example, to the extent urban rer~ewa1 activities are a part o~ the demonstration, the existing urban re~iewal agency would carry~ them out. And school boards would cohtinue to dir~t . education4 activities in the demonstration area. I For each area having an approvea demonstration program a Fed- eral coordinator will be designated. ~ This legislation makes clear that the Federal coordinator will not be appointed until after the demonstration program is approved. The Federal coordinator will not, ther~ore, be involved in the planning and development of the city's demonstration program. The ~oordinathr will expedite ~nd help coordinate Federal con- tributiojrts and technical assistancejto the various projects and activ- ities th~~t are a part of the approve4l demonstration program. He will provide liaison services for the lo4~al city demonstration agency and national and regional representati~res of the Department of Housing and Urban Development, and ot, other Federal agencies assisting these projects or activities. The coordinator will have no authority over local officials, and no power over the programs and activities of the locality. The first year of the new program authorized by this bill will be devoted to planning and the development of programs by the cities. The President has earmarked soi4e $12 million to finance the planning and development of these progr~ms. In the followimig 5 years, $2.3 billion in supplemental grant f~4nds will be made available to cities to help them carry out these den~onstration programs. The great problems confrontiikg the Nation's cities are well known. Slum and blight are widespread. Persons of low income concen- trate increasingly in the older urban areas. Housing and community facilities and services are inadequate. Cities are caught in a descending spiral which leads to widespread municipal insolvency. The coi~tinuing spread of blight reduces the tax~Lble value of city land. Asjslums and blight spread, crime, delin- queftcy, and disease follow. At ~the same time that the n~ed for city services grows, the city's ability to provide these servic~s is impaired by the very blight that creates the demand. In these ~ircumstances, it is not surprismg that the cities with the greatest slum problems have the least capacity for solving them. PAGENO="0043" ;1*~ ~ ~ ~ ~ ~ . L DEMONSTRATION CITIES N URBAN DEVELOPMENT 37 The cities desperately need e p. \ New met;hods, i~ew tecimiques must be developed t1o enable th t~ deal with their problems. I believe this legislation is the iti~s' best hope. It. will ~ that fodusing and coordinating inassi e prbgrams of physical coiistru~tion ~tnd social services caii revitalize t e eteriorating cores of our cities. ~ I believe that these deinonstrati u rograms will pr~~7e that, with State and Federal assist?nce, cit.i s re capable of mobilizing local energies and resources on the seal r quired to create a totally new living environment. ~ I believe that these demonstrati n rograms will show the people ~1io live in slum and blighted nei b rhoods that their local, State~ and Federal Governments are con e ed with their condition, and will do what is necessary to provi e decent environment and an opportunity to participate in the m in tr~am of American life. Enactment of this legislation coul ake 1966 "the year of rebirth for ~n~I~n ~ities2L.~.... .. ~ o urban blight to the problems of urban growth. This is the subje t f the. ~ bill referred to as the "TJrban Development Act." The first title of the bill would pro id the new inceutives for effec- tive metropolitan planniug and dev lo ment recommended by the President in his recent message on ci y emonstration programs. In brief, the incentive consists of in re sed aid to federally assisted projects of types which generally aff ct the growth of metropolitan areas. This incentive ~rould be given ni within metropolitan areas where all public and private. develop t having a major areawide impact is consistent with full comprehe si e and current metropolitan planning. This represents a new approach to ing planning effective. It will not deprive any project of aid it w uld receive under existing programs. It will simply increase as~is ance to cities and other State and local bodies that actually develop r jects and administer local zoning and subdivision controls consists ti with metropolitan plans. This aid is distinct from existing aid planning bodies for pre- paring the plans. It is also distinct fr m ederal financial aids the purpose of which it to help provide s eci C types of well-planned public works. This new aid would consist of grants up lementing other Federal assistance to projects for transportatio cilities (including mass transit, roads, and airports) , water and e er facilities, and recrea- tion and other open-space areas. The su 1 mentary grant could not exceed 20 percent of the cost of these pr ec s. Grants will be available only for pro cc in metropolitan areas which had established areawide compre en ive planning and pro- graming. This must be adequate for e al ating and guiding all public and private actions of metropolita wi e or interjurisdictional significance. Also, the grants will be available only t p blic bodies in the eligi- ble areas which are carrying out, in accor ith the areawide plan- nin.g and programing- 1. ~Phe location and scheduling of thei p blic facilities; . . 2. Their zoning and other subdivision ac ions ; and PAGENO="0044" 38 DEMbNSTRATION CITIES AND URBAN DEVELOPMENT 3. Th*~ir other policies and actions of metropolitaiiwide or interjui~isdictionaI significance. ~ As President Johnson said in his rec~nt message to the Congress on housing ani~ urban development progra4is: The powerful forces of urban growth t'hre4en to overwhelm efforts to achieve orderly development. A metropolitan plan should be an instrmnent for ~haping sound urban growth-4not a neglected document. This program would provide valuai)le 9flCE niueh-nee,cled incentive for effectuating such plans. This program, which is an. outgrowth of existing Federal urban deveiopn~i.t policies, could vastly ii4ucnce for the het~er the living environment of many of our people. ~oday, 125 million Americans-- two-thirds of our total populatio4-live in metropolitan areas. Twenty years from now we will have ~dded, according to conservative estimates, 54 million people to our m~tropo1itan population, the great bulk of them in suburban. areas. This is the equivalent of addmg 5 New Yorks or 27 Washingtons. Federal, State, and local governments wi]1 be spending, over this period, billions of dol]ars for IMVS1C Services for these areas-for schools, highways, and other forms of transportation, parks, sewer and water systems, and other commupity facil i ti es. Carefi il and effee- tive planning can greatly reduce the ~apita1 costs of these services, and can in addition make great contrilfiutions to our goal of a suitable living ewrironment for every Ame4ican family. The ~irograms supplemented by ~this bill serve some of the major needs of the Nation's growing metx~politan communities. Transportation facilities, water and sewer systems, and recreation and open_space areas all knit together metropo] itan regions and help to shape their growth. But if planned inconsistently, they can cbs- tort that growth and one project can greatly reduce the benefits cx- pected from another. . The supplemental aid provided *nder this title. is, therefore, directly keyed to critical types of develo~ment projects. These are also the projec6 for which there has alrea~y been Federal recognition of need and a commitment to assist in meetfing that need. rrhe proposed supplemental gr~nt.s will reward State and local gov- wnment in iti ati ye toward hi gher !Ievels of planned urban development and coordinated action. In areas where the, higher standards called for under this new program cannot yet be achieved, the program will not stop needed assistance under the basic grant programs. The Department of Housing and TTrban Development. will, of eour~e, work closely with the other Federal departments and agencies who~e~ program areas are being ~ipplemented to provicl Federal lead- ership and coordination towar(f more orderly metrop jtan develop- inent. This is one of the pri$cipal tasks which the Congress has assigned to this new Departmei~t. . Tt~ is expected that about a dbzen rnet;ropolitan areas encompassing ~yei~al hull(lred local communities, might become el igi le for supple- menttiry grants (lurni g the first year. A ecordin gly, i he admin i st rati oii is recommending a first-year pi~ogram level of $25 irii.l] on. WTith cont I rwecl eii~Ou ragein~nt uii (ler th is progiai~ i . 1)011 t 7~ met ro- politan areas, having an aggregate population of am md GO million, might qualify for supplementnd grants by the end of 5 years. PAGENO="0045" 39 D~MONSTI~TJ~ON CIT E ~ ND uRBAN ~ D1~VELOPMENT However,, the size ajad \spee~1 c~ expansion of the p~ogram wQuId depend prima~iIy on the ~egr4~ o1~ effort that metrQpo11t~w areas anU localities are wi11ii~g th put f~ li.~ The~ s~p1e~ieiita1 ~raflt~ wqui~i be available to t~ny j4is~ictio~ w :ieJi show, ~s stated in the 1E~resi~ dent's recent message ~ ,~ ` That they~ areready to i~ gu~ded\b t eir own plans in working out the pat~ tern~ of their own uev'~iop4ient and \w e~ they estabU~b the joint institutional arrangements necessary to ~arr~~ out\t es plans. , Financial assistance çor met~o ~ it~n comprehensive planning is available under our section 701\ rb~ n planning assistance program. in addition,' a; special program ~i I e tmdertaken within the frame- work of the existing `~O1 ~pro$rarr~ 0 ~ evelop newtechniques of metro- polit~n punning and implern~nta\ti ia. This p~ats into eflect the Presi- dent's proposal in his. m~ssa~e o~ . ~ nary 26, 19~i6, for a "series of demonstrations in effecti~e metrop. litan planrdng." I estiiiiate' that the total cost of this pr~g~am~ wil~ pp oximate $M million. ` Last year, the Congress enacted,~ si nificant new program of FHA mortgage insurance for p~rivately\ nt~ ced land development.. This program has already attra~ted mu~ i terest throughout the country. Sixty-six proposals for we1~-planne~d de elopments are currently being processed. Title II of this bill wil~ aiithórz ~ e approval of a category of "new communities" for:whi\ch land c til be prepared with th~ ~id of FHA mortgage insnrant~e under th~ ~O am. Without the bene& of su~h mort~ ge ins~irance, pri~te enterprise has already undertaken the d~eveJopn~ t f a large mimber of extensive new communities. Many of t~hern h~ be n planned with imagination and boldness characteristic ~f priv~ terprise at its best. . But the scale of these pr~jects is\ ~ ~ that only large developers can find an adequate volume bf' iavo~ le nancing for the site prepa- ration. Even for them, the fi~iancing\i o~ en inadequate for efficiently scheduled land development ~peratio~ , ~ else the cost is far out of line with the financing c'harg~s that `~b arket demands for smaller scale land development, orfor aettial h~o si g construction. , This bill will provide needed credit ss~ tance to facilitate broader participation in these privat~ effort . ivill encourage adE~quate private financing at reasonable c~st for 1, r~ ~scale preparation of sites in well-planned communities. ` The, si ~ p oduced with FRA mort- ~, gage insurance aid will be mad~ n~ila 1 t a cross section of private builders, especially small build~rs. Th ~+ 11 thus be able to partici- pate more fully in this increasir~gly im ~ t~ t segment' of the housing market. If this segment of t~ie ±nar e i lost to our small- and medium-sized builders, our ne~ comm titi will lose the enormous vitality that a diversified home1~uilding i d stry is uniquely capable of producing. The category of new communities w ii ci onsist of ` land develop- ments satisfying all requirements\under t e isting land development prognun, and meeting additional\standar p esc4bed by the bill. `A development could be approved o~ily if t e Se retary determines that in ` view of its size and scope, it `*ill i~es 1 1 substantial economies, and will contribute substantially to the 0 n and economic growth of the area in which it is located. I PAGENO="0046" 40 DEM~STRATION CITIES AND t11kI~AN DEVELOPMENT What is contemplated here is developnknt of large tracts of good land on a scale that will provide a wide range of urban facilities and services, while requiring maximum accessibility to any nearby major cities in the area. This would facilitate such benefits as cheaper initial land costs, a better balance of varied housing and other land uses, and reduced traffic. Above all, we would be affording a greater range of desirable chthces for the liome~buying, ~rnd I might add, the I~ome- renting public. I I To encourage well-planned developme$s on this scale, special Jfinan- cial aid in the form of FNMA special ~ssistance would be ava lable, if needed, and longer mortgage maturiti~s would be authorized f r this category of land development. These sk~ecial aids would not b avail~ able for land developments, no matterthow extensive, which re not approved as meeting the special requirements in the bill f r new communities. The title would also increase from $10 million to $25 mil ion the maximum outstanding mortgage amount permitted for a sing e large land development. I Title ir would also authorize Fed4ral loans to land deve opment agencies to finance the acquisition o1~ land to be used in co nection with the later development of wel1-pl~nned residential neighb rhoods, subdivisions, or new communities. `l!hese land development agencies would include municipalities and otlthr public corporations hich are designated or created under State law for this purpose. The Federal loan could equal the cost of the acquisition of the land, including capitalization of interest, ~ and would be repaya e within 15 years~ The interest rate would be the same as under ur public facility loans program. The loan pRoceeds would not be av ilable for site improvements, although other p~ovisions of Federal law would au- thorize assistance to State and loca! public bodies for fin cing such improv~menth. 1 The land acquired by the land devkdopment agency would be sold for private residential and related development in accordance with a de- velopment plan made by the ageney and approved by th Secretary. The land could be developed by the private owners with or without FHA mortgage insurance assistance. These projects coul be residen- tial neighborhoods, housing subdivisions, or more exten ye develop~ ments~ including new communities, Title III of the bifi will authorize appropriations nece sary to con- tinue ~he urban mass transportati4n program through fis al year 1968. It wifl increase the present authorization by $95 million or grants to assist localities to finance neede4l mass transportation acilities and equipment. It will also rncrease,tby $10 million, the aut orization for appropriations to develop, test, a4id demonstrate new or i proved mass transportation facilities, equipment, or techniques. Advance funding is essential in the urban mass traiisportation pro- gram. It allows communities time to plan their projects with assur- ance that funds will not be exhausted during the "leacitime" between starting to plan for a project and applying for grant assistance. This tirnE~ amounts to several years i4 the case of larger projects. r1~he proposed program level fts well supported by the volume of ap- plications in hand and known ~o be in preparation. PAGENO="0047" 41 DEMONSTRATIoN CITI ~ D UE1~AN DEVELOPMENT The capital grant ~s~ist~nce. c1~ this program has given-and will continue to give~he1p to ~ co ~ i*ties of all ` sizes, m~luding some faced with a breakdcwi~ oi~ tot 1 o of public transpOrtatiQn seilrice. It is helping co~zmnunIti~s tç caE t planned improvements in equip~ ment ~uid facilities whic4li they ~ ~d not themselves fina~ice out of the farthox. And it is stim~ila~ing ø~ initiative and local action in the planning and provision\ of tr s o tation facilities in coordination with community d~velop~neut. Title IV Of thebill woi~Jd auth i~ a new px~O~ath of Federal grant assistance to Sta~tes and n~etr~pol ~ ~ i~ rea ~genoies. These grants would. th~nc~e up~ ~ ~ peree~t of ~he co~t of programs demonstrating methods o~ esi~abli h i~ eif~cti~e tti~baninformation ~en~ ters. The centers would \ma~e i ~ o ible to ~ assemble, correlate, and disseminate ino~mation a*d aata ~ t e physical,social, and economic problems of urban areas, ~nd on t e g~ ernmentai and other programs dealing with such problem~. In recent years, there h~s been r t expansion of Federal, State, and local programs deali~g with r~ n problems. These p~ogr~ms can. be used to best adVan\t~ge on i~ State ~nd local governments, organizations and individ~ual~ ha e t~ dy ~a~ss to information re- garding them. . . . In addition to inforxnati~n as to ~ e vailabilit~r of urban assistaxice programs, urban inforrna~tjon\ cen S an p~rOiride us~fu1 and neces- sary data needed for pl$nniçng, o amixig, ~ budgeting, and co- ordinating these prograixts. \ Few State and local agen~iesha ~ able to deveiop effective in- formation centers with thei! O~wn ~ o~t ~. There are considerable technical problems involved in ~eJec i g~ he data which should be fed into the system, and in c~b~nii~g F d $ , State, azid local data which exists but is not in readily *sabie f ~ ~ The assistance provided by this title would help State a~td løca g~ ci~ r~solve these problems. The "Housing and Urban D~vel ~ ~ ~ Ameiidmerits of 1966"- unlike the bills I have discuss~dj~.wil ~ tii~ ~rize no ~w piFograms, but will make so~ne needed changes rn la ~ ve~hing éxi~t~.ng programs. First, an amendment woul~ permi `leti ers, ~ who make loan~ under the FHA title I property im~rovem t . rogram to collect the one- half of 1 percent insurance pi~emium o th~ borrower. This is the only FHA program under ~ ~hidh t ~ co t of th~ insurance ~ is not directly borne by the borrowek. . We r ii vertheless suggesting that the amendment be effective fo~ o~ily eu , a~ prcvided in this bill, so that the Congress may haVe\an~opp ~ r tt ity to determine the effect of the change on the volume ai~d ~atte ~ these FHA-insured loans. The volume of this pro~g~n~ ~ias bee ~ ining greatly. By giying lenders the proposed small ~ac~ease in ~ he returi~ of their loans, we will encourage the loans to' be~ n\iad~. i h ut the loth~s, homeowners of lower income may beunable to olçtai e ~ gèncy home repair credit without paying high or even exc~rbitant ates The limit on the amount of a horn c~ tgage insured by FHA wider its special program for i~- azid e ~ te-incothe andY displaced families-section 221 (ci) (2) wil~ be inc se~ from *11,OQQ to $12,500 in the case of a one-family hori~, arid f rn ~18,0.OO to $20,QOO in the case of a two-family hom~. Ti~s~ Inc s ai'è made necessary by increased home costs. . ~ ... . . PAGENO="0048" 42 DEMON~TRATJ~ON. CITIES ~ND UR1~N DEVELOPMENT rJl1ei~e are two proposed amendmeiits inthe bili re1atii~g to low- eili public housing. Qne pertiains to leased pirivate housing aut~1li)rize by the Coiigress jta~st year. The &nendmentjwo~u1d permit lOCal ho sing autlmrities to~ l~asE~. dwellings without r~a~rd to the a-yeal~ hut t.ioi~ ill the present law in cases. wheretiTLe hou~ipg is needed for low-i orne families djsplac,ed by ui~ban rei~wa1, h.i~hway construction, or tlier goverrirneintal actions. * I The kasing provision is particnilarly ~ieipfu1 in providing In using for large displaced families, many of w~oh have been on the w iting list for public housing for many yea~rs. Local housh1g auth iities c;uinot as~mu'~e what will happen to these families when the shor -term leases end. Authority to enter into 1ejs~s with ]onger terms would preveiit further insecurity, and in some ~ases the actual hard ip of ~riy additional dispia~nemen~ for these :1~aaTLi1ie~s. The secotid amendment would mal~e the formula for pr viding assistance tO low-rent housing, as it was ~rnended by the 1965 ac , avail- able for the leasing of housing to be eo*strueted, as* well as to xisting housing. Increasing intereSt is being ~hown by private enter rise iii working with public housing autlnorittes in the development f hous- ing for use by the authorities. This results in costs substantial y lower than can be achieved when the authorities plan and coustruct t e hous- ing themselves. The amendment would provide additional fimulus for much greater participation by priv~ate building interests in the low- rent housing program. ~ The rising costs of housing conStri~ction, and increasingly complex problems of urban growthç m~ake it i4iperative that we make the most use at least of t,he techological advan~es in design and urban develop- ment. I The bill would direct the Secreta,rj~ to conduct studies an research to demonstrate methods of applying technological advanc s and to encourage and promote their acceptance by industry, communities, and the general PUblic. These are matters where the Federal Govern- ment can and should assert leadersh~. Title II of the bill contains no substantive provisions. It makes necessai~y adjustments in the wordir~g of Federal statutes to reflect the new nai~es of offices and officials pr~vided in the Department of I-Ions- ing andTJrban Development Act. j Before concluding my remarks, ~ir. Chairman, I would like to en- dorse H.R. 92M~, which you introdhced last session, and which is now before this committee. That bill would establish a new ~rogram-administered by the De- partment of ITousing and Tjrban Develo~inent-of mortgage insur- ance and direct loans to finance the provision of facilities for group medical and dental practice. The President, in his message last year on advancing the Nation's health,:recommended establish~nent of such a program, which is urgently i~eeded in order to ass re the most effective use of our limited supp~y of doctors and medi ally trained personnel. I I understand that Mr. Wilbur ~Johen, Undersecretary f the Depart- ment of Health. Education, andi Welfare, will testify n the bill to- morrow. Mr. Brownstein, our Assistant Secretar or Mortgage. Credit, will accompany him and~ testify on behalf of th Department. Thank you, sir. PAGENO="0049" DEMONSPI J1 hav~ the the return here. the minority h ~nd then we Mr. WIDNAI ment, ~ 6O-878-~36-Pt. 1-4 them on PAGENO="0050" 44 DEMO~TRATION CITTh~S AND URBf~N DtVELOPMENT COMPflEHENSIVZ Crft DEMONSPR4T~ON PROGRAM The demonstration cities bill would provide to Ibe cities- First, Federal funds to cover up to 90 percenlf ø~ the cost of planning an de- veloping comprehensive city demonstration progi~hms. Second, special Federal grants, supplementing~assistance available under xist- ing grant-In-aid programs. The amount of t~iese~special, supplemental grant will be 80 percent of the total non-Federal contribi~tions required to be made o all projects or activities which are a part of the dertionstration program and fin need under existing grant-in-aid programs. Third, Feder~il grants to cover all the costs o~ providing relocation adju tment payments to thbse persons, families, and busiu4sses displaced by activities which are a part o~ theseprograms. J Fourth, tech~ilcal assistance to help carryd~it~these programs. A comprehensive city demonstr~ttion progra~n ks a locally prepared an sched- uled program for rebuilding or restoring entftre sections and neighborh ods of slum and blighted areas through the concez*rated and coordinated us of all available Federal aids and local private and governmental resources. It will in- elude citywide aids and resources necessary to improve the general welfa e of the people living or working in these areas. The assistance provided by this bill will help cities of all sizes to plan, develop, and carry out programs to rebuild or revitaijze large slum or blighted a eas and to expand and improve pubic programs and ~erviees available to the pe ple who live in these areas. It will provide funds r~eeded for the city to parti ipate in existing Federal assistance programs. It wftll encourage the cities to ocus and coordinate projects and activities for whic~i assistance is now availa le under existing Fe4eral programs with other publ~and private actions to p ovide the most effective and economic concentration ~of Federal, State, local, a d private efforts to Improve the quality of urban life. The comprehensive city demonstration ~rogran~s carried out unde this bill would provide massive additions to the sup~ly of decent, low-, and mc crate-cost housing. They would make it possible for cities to concentrate all available e ucational, health, and social services on the problems of the large numbers of p or and als- advantaged people who live in slum and blighted sections and nei hborhoods, They would make it possiblefor cities totreat the social needs of t e people in the slums at the same time the physical ~ehabilitation of the slums i being car- ned out. ~ In ord~r to qualify for assistance und~r this legislation, a city ust be pro. pared to ~lan and carry out a compreher~ive city demonstration pr gram. This will be a local program ; planned, and ct4rried out by local people ; nd based on local Judgment as to the city's needs ani~ Its order of priorities in eeting these needs. It will not he simple to qutilify for suchpa program It will be necessary for a city to embark on major new undertaki gs addressed to major urban problems. This legislatibn is designed to help those cities willing to face up to their responsibilities-willing and able to bring togethe all the public and private bodies whose joint action is necessary to solve their pro ems-willing to füll3~ commit their energy and resources-willing to undertake actions which will have widespread and profound efEects on the social and phy ical structure of the Qity. ~ STAT~1TO~T CRITERIA A d~rnonstrati'on program must mee~ the following general crite Ia- Fir~t, itmust be of sufficient magn~~nde, in both its physical a d social dimen- sions, to (1) remove or arrest blightancl decay in entire sectio s or neighbor- hoods, (2) provide a substantial incifease in the supply of stan ard housing of low and moderate cost, (3) make mai~ked progress In serving the poor and disad- vantaged people living ip slum and ~llghted areas by reducing educational dis- advantages, disease and enforced idi~ness, and (4) make a substantial impact on the sound development of the entire city. These criteria will require a demrn~stration program to remove or arrest blight and decay in sections or neighborhoc~s' which contain a substantial percentage- as rr~uch as 15 to 20 percent-of the ~ubstandard dwelling units in the `city. Clearance of structures will pla~ a significant part in many demonstration programs, and considerable new con*truetion of low-income housing will be neces- sary. However, a great amount rehabilitation will be essential to provide PAGENO="0051" D]~MONSTRATTON CIT D tRBA~ DItVELOPM~NT 45 i~i;~ c)a~ c~ of bou the program. PAGENO="0052" 46 D1~MONSTRATION CITIES. AND. UR~AN `DEVELOPMENT In fl(1(lit~L(~fl, the city `S program must be more than a statement of goals. It must be a definite Plan of action. Projeets aiid activities to be undertakei~ must be scheduled and ready for initiation within a reasonably short period of time. All of the activities which are part oi~ the program should be scheduled for coin- pletion within a reasonable period of time. OTHER ACTIONS EXPECTED +.TEE CITY An irnportan~ benefit of Federal grant-in-aid' programs is the spur sue pro- grains provide to local activities ~vhieh may n4t otherwise be undeftaken The demonstration cities bill calls on the cities to~ take a series of aetiohs, i con- jUliCtiOll w~th their demonstration prograi~a~, designed * to make si Ificant breakthroughs in the tecb~iques of rebuilding and restQring slum and b iglitel areas. Even thougji a city demonstration progran~ meets the statutory crit rio de- scribed, other actions may be expected of thecity if new Federal aids a e to be provided under this legislation. ~onsideratión wIll be given to the ext nt and nature of purely local .aetion~ which encourag~ more rational awl efficie t urban development. In preparing theii~ demonstration programs, cities will h ye to- First, examine their s~,bstant~ve laws to d~termine the extent to whi h those laws impede substantialpi-ogress in carrying out their demonstration ograms and to take appropriate action, If necessary, fto make those laws consist nt with t11(~ ()l)jOCtiV~~5 of their progi~ams. . In many localities, the stMcture of real festate taxes, iz~adequate d oftei~ obsolete housing codes and zoning laws, ~id artific4al ~estrnints on building I)ractiees retard the prompt and proper ~eve1opment of the city's physical characteristics. Stimulating local efforts to remove these restrictio s can be one of the major .J)enefif~s of the city demolis~ration program. Second, apply high standards of design to buildings ëon~tructed an rehabil- itated under the program in order to maintain distinctive natural, hist neal, and cultural characteristics. RevitaliRing the Nation's cities requir~s more than the eonstr etion and rehabi1itat~on of homes and buildings. ~ity demonstration pro~ra s should contain spkicial efforts to make new and fexisting structures as fre ii and at- tractive a~4 possible. . I Third, fliake maximum. use of new and~linj~rOved technology and design, in- clu(liflg the introduction df cost-reduction! techniques to every aspec of a city's activities. I Massive rebuilding and restoration pro~ams provide exceptional o portunities for applying the fruits of our technolog~cal advances to the home uliding and relial)ilitation industries. Olties should ~ encourage the maximum se of such advances in the building and rehabilitation of homes and building Fourth, encourage good community r~lations and counteract the segregation of housing by race or income. The pJI37SiCSi rebuilding and restoratibn of our cities should be accompanied by appr~priate actiofls to narrow the h~using gap between the po r and disad- vanth.ge4I and the rest of the eommunit~. Nondiscrimination in an housing as- sisteci ulnder a demonstration program f1~ a legal requirement. I some citiec~, howevef, the mere requirement of no*d.iserlmfr,~atjon will not h sufficient to resolve the manifold problems to which p1~M~ and often iongstancli g, patterns of housin4 segregation have given rise. ~ More affirmative actioi~ is needed to eliminate these patterns, to reduce the ~qualld concentrations of ra ia~rninorities and the economically deprived, and to assure that equal oppo unity in the choice of housing will in fact be available to people of every race and income. Fifth, indicate that the projects and activities carried on und r the program are consistent with comprehensive planning for the entire urba or metropoli- tan area. Central cities are the economic and cultural cores of larger urban or metropoli- tan ateas. As such, their activitiesi affect the entire urban or metropolitan area. , And the cities, in turn, are aff4cted by activities undertaken in the entire area. No element of rational urbanj development is more important than the carrying on of sound comprehensive jlanning for entire urban and metropolitan areas. Cities will be expected to cor4inue to cooperate with other governmental bodies in the metropolitan area to as~ure and promote sound community growth. A program meeting the statutory~ criteria for a comprehensive city demon- stration program-and commtting tl~ city to take those additional actions which may be expected of it-is not lightly undertaken. PAGENO="0053" BAN DEVELOPMENT 47 PAGENO="0054" 48 DEMO~STRATION CITIES AN]) URBAN DEVELOPMENT MAINTE~iANOE OF EF~ORT The special-~upp1ementa1-ass1$tanee to cI14~providêd by the demonstr tion cities bill is notjto replace kcal funds already I~eI4~g used to rebuild and r store slum and blighted areas and provftle communit~r facilities and services to their residents. Accordingly, it will be i,equired, as afconditlón to receiving assi tance for an approved comprehensive city demonstr*tion program, that the ci y not reduce, during the period an approved prograni is carried out, Its prior 1 vel of aggregate expenditures for projects or activities similar to those being a sisted under th~ demonstration prograi~i. In additiLon, a city will not be per itted to use pant funds provided under the demon*tration cities bill as a substitute for local dolla* committed, prior to the applic$ion for theplanniug of the emon- stration progr~m, to be spent for a project or ~tivity for which Federal fi ancial assistance IS 1~e1ng provided under a~i existlngfPederal grant-in-aid progr m. PRJ~frA1UNG A CO~PR~i~NSIV~ Y[PY /~MONSPEA~EON PROGRAM A. City aem~ratnwy~,~j ~ The Fedej.~~i assIstance authorized by th~ demonstration cities bill will be provided to a city demonstrathm agez~cy. ~be city demonstration age cy may be the city Or any local public agency established or designated by he local governing body to administer the compreh~nsive city' demonstration rogram. The city demonstration ageucy, thereforp, ~ may be a public agenc ~ created expressly fo~ the purpose of administering Uae demOnstration program r it may be an exisUng local public agency assign~i this responsibility. A cry wide range of a~tministrative orgaiflzations are frrmlssible so long as the structure serving as jthe city demonstration agency~constitutes a public body which is subject to t~ecou&oi~oftheIoca1go~v-erning J~od~y. ~ Whatever the adm1nIatratrv~e organizati~n of the city demonstrati n agency, it must bate the endorsement and support ~of the elected officials of t e city and the agency must have suthdent power an~ authority ~to undertake he overall administration ofthe demonstration progra~ This does not mean that the city detho*tration agency would hay to assume operational control of all ~rôjects and a*tivities which are a part f the local demonstration program. For example, ikr the extent urban renew' 1 activities are a part of the demonstration, the existing urban renewal agency ~ould carry out such projects. School boards would eontinue to direct education 1 activities in the der~onstration area. ~ The fufletlon of the city t~émonstratIo~ agency would. be to obtain the coopera- tion of:a~partielpants and Obtain their i~greement to a concentrate and coordi- nated eff~rt. The agency would have a s$rengtool for obtaining suc cooperation in its capacity to us&demoi*stration .gra$ funds tosupplement exlst g efforts. The city demonst~ationggency could ~$abl4sh, in~seme appropria e way, an ad- visory bkjd3r composed of beth psblic ofl~,ialsand private citizens ho are repre- sentative of the various pttblic and prl4te interests'whose coordin ted activities will constitute the demonstI~ation. Inde$~endent or semi-independen local govern- ment units such as school boards, red~velopment agencies, housi g authorities, and coihmunity action agencies could ~iso be represented. It ma be desirable to have private citizens represent the ~rlews of private agencies a d business in- terests, Citizens Of the a~ea may be represented by the chairmen r directors of repre~entat1ve neighborbôbd brganizattons serving as members. B. Pk4nn~ng and developing the city def3~o*~itraf&n program Ph~ city demonstratiOn agency wi~i apply to the Secretary f Homsing and Urb~4 Developmtrnt for i~ grant to pa$~ 90 percent of the cost of anning and de- velop~ng the comj~reh~si~cre city' demo$stration program The ap heation for this granll would have the a~proVal of thj~ lOcal governing boy' of t e city. Before he m~tkes a grant to p1a~i a compr~hh~cit~ demonstration p ogram, the See- retai~r ~yf HOusing and Urba4 Deveh~pinent must determine tha there exist (1) adm~nlstrative machinery thl'ough *hh~h coordinatIon of all elated planning activities of local agencies can be aqhieved, and (2) evidence t at necessary co- opei4ition ofagencles engaged in rel~ted local planning can be btained. Applications for âssletance to plan and develop a comprehe dye city demon- straftion program will l~required tfset out In broad and gener 1 terms what the c4tyf Intends to do and how it Intet$ls to go about it. This In tial proposal will be tested and refined during the pl~nnlng and development p ocess and usually PAGENO="0055" milan areas areas in ( funds -~ certain cor effect and ----~---~ community. For each 1i'~ Fed' DEMONSThAT~ON CIT E ND URI3AN DEVELOPMENT 49 PAGENO="0056" 50 DEM~4~thtATION C~i!Pt~S ANI~ t~ ~kT~ ~ DEV~TJOPM1~NT cit3~ demonstratknr program before making a cLnnitrnent to mai~e grant for the program. ~ * ~ ~ ~ ~ mm: cirx~s' N~]~D~ . A comprehensive city demonstration program will not rep1a~e existing Fed- eral prog~ams,~vhiç~1i now assist e~ti~s to prcw~de for their nrban d5~ve1Q ment and gr&wth~ ~ Bether, it will supplement andJtei~d to~ encourage the fo using and coord~inatidn of existing programs,, ~ si~oIa asfthe urban renewal, mass t ansit, ar~tipoverty, ~d jiet~1th a~id we1~!are progran~ , hi rebufld%~g and revit lizing urban area~s.j ~ e~~ur~ging eqordination ~4f .~iese ~ existln~ urban ai s, the new prograni \4Tili. aehieve4lie ma~ki'nwa ~ ~$]~,aNai1a~hle re ources in order to irnjT~$ve substantiaRy the conditions~of 1i1~e Ixrurbanai~eaa. ~ The cities which need to undertake compreh$~sive city demonstration pr grams desperately rç~quire every bit eftl4s additional ~`ederal assistance. The great problems eonfrontingthe Nation's pities are well known. Slums and blight are widespread. Persons ~f lo~ income concentrate ~ncreas- ingly in the older urban areas. Housing anc1~ eommunity faciliti~s are ~ervices are inadequate, .~ ~ I Cities are qaugbt In a descen~1iing spiral which leadsto widespread rn~inic'ipal insolvency. j~he continuing spread of bLigl4 reduces the taxable valu of city Tand. As slums and. blight spr~aji,.cri~ne, :d~l~uq~en~y, and disease folio At the ~san~e time as the need for city se$c~g~ows,. the eity~s abilit to pro- vide these s~rvices is impajre~ by ~ the. vejjy bljghtthat cre~tes the demand. Greater bllg~t--g~eater demand. for city se4viee~-decreasing1revenue to meet the demand4-that is the dowi~ward tremcj ~n n~w~y American cities. In these circumstances, it is not surprisipg that the ~ties with the greatest slum problems have the least capacity to deal with those pr~*4~eins~ Significautly, the efforts of ~ur cjties to 1~elp themselves are in l~rg measure self-defeating. The more determined the city's efforts to raise fund to meet the need for increased services, the more lilçely that effort drives its ec nornically affluent citizens to the nearby suburbs. Similarly, the greater burde the city places on industry within its borders, the smaller its opportunity to a tract, and hold, the .induatry and eommerce Its ecor~Eomy requires. As a resul , the city becomE~s, i~creasingIy, a home for the e$nomicall~deprived, those least able to bear tIie~cost otmunlclpal services. ~ ~ j The Cit~ plays a critical role in Am~ean life. It ~ must provld jobs and adequate housing and education for ml1~i~ns of the ~Nation's une ployecl, ill housed, aid uneducated. It must provid~ .eor~rnmnity facilities and! health and social servicu~ f~ti a scale imprecedented 3~n the N~ltion's. history. A d, it must do so in the face of overwhelming *demam~s~ on Its skills and resource. The success of the city in providing the physical and social framework through which millions of poor and disadvantaged Americans are repared to participate fully in the Nation's life-4s~ a vItal national concern. The city is performhig an~essential national function, The objective of the President's progx~am and the demohstration cities bill is . to help the city to adequately perform that function. ~ ~ URBAN DEVE~OPMENT Acr ~ Ph~ b~Ll1refleimLte as the Urbai~De~elopthent Act deals with *t e problem of urban g~owtlr44 ~ ` ~ . ~PLJs I-'--GEANTS ~tO ASSIST IN P$ANN~1D METROPOLITAN * D~ OPMENT Pui-po~seoftith~ ~ . ~. ~ ~ ~ . ThEy ~tlrst title' of'the bill would pr~v~ide the new incentFv~for `e ective metro- polita~n planning and development re~obi~mended by the' ~resident n his January 26'me~age on city demonstration progi~ams. ,` ~ In brief, the incentive'eonsiets of in~eased `aid to federally assi ted projects of . type*;~wbieb generally affect the gro$Ix of metropolitan areas. his aid would be giv~?n'onIy within metropolitan areajs where all. public and priv~te development Jiavijig J~ajer a.r~awide~ impact is ~&nsisWnt ~ with ~ fully coinj~rehensi've and cw~re*it metropoliUui planning.' ~ ~* ` ~ " . ` . ` ~ " ~ . I . T~b1~ repre~euta ~a~iiew approach ~t4~ ititklng~j~tanniug effectiv~. It would not lepriive any project of ~id it wouhi ~~,ceive.~nder e~iat1~g prog~ams. It would ~i'mply ` iu~ease~a~i~taince to cifl~ ~aud~. oth~r State ~ and k~cal bodies that aetn~lly develop pro~tcts and admi4i~ter local zonhig' and suh~1ivision controls consistently withmetropolitan plans., PAGENO="0057" ~MENT 5.1 policies, cou Americans-t Twer years 54~ ii ion fl( `~reparitig the of which is PAGENO="0058" 52 DEM~*SThATION CITTh3S AND UE~AN DEV1~LO1'M1~NT There is ~ne other Ørogram which ~bou1d b4 added to tbt~ list The lean rivers demonstration restoration bill of 1966 sfl1~~tted as part of the Presi ent's program last week would provide ~peeial grant~ for sewage treatment fac lities serving eligible river basins. The administra1~ion recommends that this grant program, when enacted, also be niade eligiblefor supplementary grants under title I of this bill. Basis for inch~8io~ of programs The programs supplemented by this bill Ser~~e' sbine of the major needs of the Natit~n's growijig metro~olitt~n communities. ~ Transporthtton facilities, water and sewer ~yetem~, and recreation an open- space areas all knit together iuetrOpolittni fr~gions and help to sha their growth. A hI/ghway or a rapid transit line, ~Ôr example, can open iarg areas for suburban ~ development, and influence th~cheduling and location f other public facilities to serve such de~e~oprnent.i ~tmllarIy, the location o water and sewer jjj~~~ and of parks andother d~r~paee areaa cab greatly aff Ct local sutdivisiou and other developni~nt. But If ~plaiined inconsistently, th se proj- ects can distort urban growth, and one p~oject can greatly reduce, or even negate, the benefits expected prom another. ~ ~ ~ The supplemental assistance provided i~I~r thts title is, therefore, directly keyed to critical types `of de~e1opment proje~ts for which there has aire dy been Federal recognition of need `and a eomm.ltm~t' tO `assist In meeting th e needs. Amount of grant , ` ~, ` ` A supp~4ienthl grant could not exceed! 20 percent of. project co t. . Thus, projects tin4er an eligible program with a ~O-percent grant level couhi receive a total of 70 pk~rcent in Federal sijppprt ~ ~ However,~ in no case could t~täl ]~edei~l ~ontrtbuthhs exceed 8 percent. Under the mass transportatkth ~prograin, $r erample, F'ederal grant ~ could be raised from 6~2/~ percent only tea maxlmnr4'of 80 pernent. Also, thø grant sup~lement could In no ~ase exceed `the `b~slc grant amount. Effect 0% bO~8~O gra'n~t pro~yram~ The supplemental grants provided un'de~* the new program would n$ affectthe basic grant programs themselves, which would continue In full force/and effect. The new j~rogram would me~r~ly increase the Federal share of the eo~t `of devel- opinent p~ojects meeting the standards o~ metropolitan coordinatior~ set out in thebtil. un this way, the proposed gra ut$ would reward~tate and l~eal govern- nients ~vl~1ch have actually `reached, an .. pr~v14e encouragement f4~r others to reach, a Jiigh level of metr~olitan plan J.iig and a~rrangements for coordinated developin~nt. , . ~ ` ` . 7 `The ai~iount of a su~pie~nentary'grant'~dli be' bas~d on a eert1flc~tion, by `the Federal `agency having responsibility fo' the baaio program, of th~ cost of the assisted projects arid of tbèr amount of , non-1l'ederal contributlons./ These cer- tificatlotts and other aspet~ts of adth1nb~tèi-1ng their own programs/ will remain under the full control of the individual F~deral agencies. I The Department will, of course, work ~lOseI~r with the~ other FedOral agencies to provide Federal leadership and coor~Thation toward more ordefly metropoli- tan development. This l~ one of the principal tasks which the ~5ongress has assigned to `this new Department. , EIi~ibil~t~ of mefropoUtan area8 j~ BefO4~e supplemental gi~ants can be ~nade for projects in a par icular metro- politanj area, It will have to be showiribat (1) metropelltanwide ~omprehensive planu " lifig and programinglprovide an 4deqnate basis for the' loca~ion, fir~ancing, and scheduling of pu1~tlc facilities a$ land developments of me~ropoiitanw1de or interjurisdlctional public signiflear~e ; (2) adequate areaw1d~ arrangements exist to carry out such planned and k~oordinated `development ; ~tnd (3) publIc facility projects and other land dev~lopments having a major impact on the development of the area are In fact ~e1ng carried out In accor~ with compre- hensive nianning and programing. , ` I Th~ required metropolitanwide conifrehenslve planning and pr~graming would incin4e such elements as areawide p~pnlation and ertiployment ~forecasts ; fore. caste/of where and under what condifions residential areas', emp oyment centers, and 4ther major land ~ises will be lof,ated throughout the area ; and comprehen- sure ~ort-range programs for the *rovlslon of needed facilit s and services, takii~g into account `both the need4 and financial capabilitie of the. various comi±iunlties within the area. IMa Ing and programing woul generally cover PAGENO="0059" 53 I~EMONSTEAT~ON CIT~ ND TJEBAN DEVELOPMENT at least land nse ; tran~or1~ation~; Wa er, sewer, and ~ other public facilities; housing and relocatien ; educ~tion~ eal h, and other institutions and services; parka, recreation, and ot1~er open ~ ac~~ ; and air aild water pollution. The emphasis in title I is on pLi~ e4 deve1opin~nt, rather than planning for its own sake, and an aUdtt~ont~l reqi~ em nt for eligibility ol! metropolitan areas would be the existence of ~rrangem4~h S f r carrying out such plans on a coordi- nated basis. This would ent4il fiI~ç1 ng that adequate institutional or other arraug~ments exist In the area to cc~ dlii te local public policies and activities. Similarly, a m~tropol1tan a~ea *ould\b el gtble only If pvojects and developments of major areawide. signiflc~ice~-wh~ er ede~all~ as~isl~d or not-are actually being carried out in acco~da~ce ~with ~ tr ~ pOlita~ide planning and programing. EUgibiiity of ~ppZioant ~ \ ~ ~ Not all localities or other public b~* es\ n an eligible metrQpolitan area could receive supplemental grant ~ssi~tan$ n4 r the program.. An applicant public body would have to show t1~at ~ubli~ f ~ilty projects and other activities over which it has jurisdiction: an~1 W~iich ~.r g interjur1sdi~tional or areawide sig- nificance ai~e being e~trried ~ut ~n ac4~ord ith the metropolitan planning and programing. The ob~ecttve would b~ 0 urtlier aréawide and interjurisdic- . ~ tional coordination where tii~tt i~ nee4le . Special attention w~Uld be giv~n to ~ e or the ~tppI1cant is effectively assist- ing in, and conforming to, n~etropolit4t~ p1 i~i1pg and programing through the location and scheduling of it~ public f~tc l~t pr$eets and Its establishment and consistent administrati&n of ~oni~ag c~ s.~ ubdivision regulations, and similar land-use and density controls. \ . ~ ~ , ~ ~ ~ This requirement cGnid ~iizt, of ~ours~, b~ pplled çTirectl~ to ~ sower district or other special-purpose body. ~ If the a~ lie nt is not a cowity, municipality, or other general~purp0se govertu4ent, thex~ t 0 ~iera1~pi~rpoae ~ government having jurisdiction over the location o~ tb~ proje t uld a1sQI~aVe to qualify under the program. This might lnvolve\próratin o1~ roject costs-for example, in the case of a road project located 1~i bOth el g bl~ and in~llgible c~immtlnities. Evolution of, FederGl pianniing ~poZicies ~ ~ ~ During the past 15 ~ye~ars, the J?ederal ~ ~e nmei~t has increasingly supported planned urban deve1op~nex~t, . ~. Under the Housing~4ct of i9~19, ~irba * e~ wal pro~eets were. required to be consistent with local plans. H~we~rer, la ~4 g was viewed largely as a local vehicle for meeting the need~ oi~ th~ no y ~ cte4 urban r~newa1 program. The Housing Act of j954 establis1ç~ed t e cit wide workable program require- mont for the expanded urban ~,eneçwal r ~ m, for pi~blic ~ housing, and for renewal-related J~HA housing progra4ns. e E~ phasis w~s placed on total com- munity effort. Planning b~earne an Integ ~ w rkable program element to help guide community growth and~ impro~eme t. ~ The ~ 1~54 act also created tbe\ "section 7 ~ urban planiling assistance pro- gram. Grants were, made avallt4ble to h ~ ~ epare the comprehensive plans required for local workable prog~am~ an en wal activities. Assistance was also provided for metropolitan plânni~g a ~ ti it~ s. The first requirement for meti~opolitan j;) an ing as a condition to Federal assistance was applied to the ope~i-s~~ace 1 d ~ ogr~~ under the housing Act of 1961. Next, the 1~62 Federal-4id ~iigh y ci e~tabiished' the requirement for metropolitan areawide trans$rt4ion 1 ~u~i ~g carrl~a o~' cooperatively by States and local communities. lu\ 19~4 an ~ new programs with areawide planning requirements were establ~shed to s 1$ ` such activities as ni~ss trans- portation,' the provision of basl~ w~ter and ~ ~ facilities, and l~'lIA-aided land development for subdivisions and r~eighborh o ~. These requlreineutshave resulte4 In an i e e~ d tempo of metropolitan plan- ning. Much of the planning Is, how~ver~ still ~1i~ee ed toward meeting the specific Federal planning requirements and thas not e ttlt d in effective overall planned development. The proposed new program woul~i meet t I p oblem through Its . special in- centive~ for multipurpose planning and on r a ide implementation of plans. It would provide grants only when ~1antting ~i 1 plementation are found to be satisfactory for all major developments Withiti ~ e ~ ea. RoZe of areawide comprehensive pian4ing age~ ~j The meitropolitanwide eomprebensi~e p~anni aè cy would 1e expected to as- sist materially In making. these neces~ary dete lu~ ions of eligibility. It would provide comments on the consistency ~f a~sist dev lopiner*t projects with area- PAGENO="0060" 54 I Z~EMOI~SPRATION CITIES AND UR~AN ~DEV~)LOI'MENT wide planning and programing. It would a1so~ rép~t on the overall stat s of the area's development activity as it relates to. carrying out areawide pla ning and programing, and on the contribution made by local governments. Ti is in- formation wonld be taken into ~ thU account ~ the Secretary in maki g the required th~ten4inations as to eligibility. Estimated leDe~ of activity~ ~ ~( Each metro~1itan area js different ; each mist h~~given fulirecoguitlo ~ o~ its varying 1im~ta~ions a~d capáeities~ However, Jthe pr~pos~d suj~p1emental grani~s would be cond~tionei upon a hig1~ level of mefropolitau planning and pr gram- ing, adequate to provide a pr~ti~a1 guide to jl~1ie in~ii~diate coucerns of public and private decisionmakers. ~ ~ C Metropolitan planning has in fact now advdnced sufficienfly ti permit he set- ting of high standards. By the end of 1964, sbme form of metropolitan anning activity was underway in about 150 of the 21~ metropolitan areas. It is expected that about a dozen metropolitan areas, encompassing several hundred local commanities, might become eli~ibie for snppie~nentary gr nts diii- ing the first year. According1~, the Depar1~ment estimates that the ft st year program level will he $25 mllhion~ With cont~nued encouragement under th1~ program, ab~t Th C met opolitan areas, havUi~ an aggregate ~p~nlation of a~und 60 thillion, might qu lify for supplementai grants by th~ endøf5 years. I ~ However, Cth size and epe~dC ~f expan~ien~ of the program woul depend primarily oil the degree of eff4rt tChCat metr~politan areas and localitie are will- jig to put forth. The supplementary gran~ would be available to an jurisdic- tions which show, as stated hi the Presid~nt'~ recent message; "that they are ready to be guided by their own plans~ in working outthe patterns of their own development and where they establish the j~1nt institutional arrangem nts neces- sary to carry out these p~an~." ` New planning programaluIer evisting law ~ ,~ Financiail assistance for metropolitan doniprehensive planning is ow avail- able undeif our section 701 urban p1annii~ assistance program. In thlition, a special p$grain will be undertaken With~n~ the * framework of the e isting 701 program té develop new techniques ~f met~opolitan planning and impl mentation. This wiIl~piit into efteet%he Presldent'~4~ ~ro~osaI in MS ~e~a~e f january 26, 1966, for a * "series ~f 4~moi~tation~ ~ln effecttverhetropolita planning.'~ I estimate that the t&tal CCO51 fCthl~r*a~ will ~*~ab~ut ~6.5 Cmi TITLn II-LA]~~D DnVEtOPMEI~~T ~a NEW OOM~UNIrIES According to the moet recent pub1ished.~rojections, the population f the United States will increase by some 70 million `p~op1e between 1965 and 1~ ~. By 1980,. our population will be over 244 nilhlion~ By 198~, it will be over 265 million. The net ~ff~'~f this increase will be ~f+lt in our urban areas whe e, currently~ 3 m1lioi~ new rezilents are~being a&led~each year. Most of this rban popula- tion inei~ea~e will occur within mr metr~pOlitan areas,and with~in t is pattern of metropo~itan growth, the great milk of~p~r~1ation increases will ceur outside. ofthe~entral cities, ~in s~IJur~5 and new ~omm~unIties. There has been a gr~wing i~eeogniti4n of the need. to assure t e continuing avaihibility of lan~1 at reasonable pri4es to accommodate this g owth. There has alno been a growing 1~eeognftion c~ `the need to `avoid the W ateful sprawl and disorganization of nHidi recent *ban development Last ~ ear, the Con- greas t&ok a cignifleant step toward iüeeting `this need by enacti g a new pro- grain `of FHA mortgage insurance for~privately finanèed land d velopment, of- ferlng valuatde credit assistance to h~lp' finance well-planned dc elopments for resid~thl and related uses. ` Tha4 program han already aftra~ed considerable interest broughout the country. sixty-siX proposals for welllplanñed `developments are urrently being ~iroce~sed. , This title w~ukI strengt~en the FHAC land develo ment program in ~ev~ral 1mf1O1't~ICflt W~I3~ ~o as-tO ona~1e `itto facilitatefurther p iv~ate effort and more ~effeetively oerveth~ Increasing C e~ds for our expanding ii ban population. A new provisThn would be added ~ the e*isting PITA lai~l evelopment pro- gram under title X of the NatiOnal Housing Act, C~utborisi~g I é approval of a category of "new communities" for which sites could' be Impro ed with `the , aid of mortgage Insurance. New eomm~unities PAGENO="0061" DEMONSTf~AT ~ELOPMENT 55 ineon for t econom private home-buyl Several t~1cular eu iunitie~ PAGENO="0062" DEMO~STRATrON CITtES : ~D URttN DEVELOPMENT ties will be thei enormous vigor that a dt~re1~iiied homebuilding tndusti~y is ca~sab1e of~prothi~1i~g. ~ ~ I The credit'as$i~tance of FflA rn~rtgage 1nsui~neó1s needed if. prhsate ~nter~ prise is to fui1j1~itspotentIai role In the de~ve1~ient ot new comrnunitie~ and If new eommth~ities are tO offei~ lii full rnea$re~the `bene~ftts of ~onon~fr and diversity andgo~d liv4ng thatare their prom1ae~ f I One of the most persistent pro~1eins of the mall builder (who may w~h to build perhaps . 10 er 20 houses ~ year) i~ th~ diftkrnlty of securing a ~teaay supply . of reaaonably priced imp~oved bni1din~iots. They simply do no~ have the cash or credit facilities Or e~ren the time needed to undertake a land pufrehase and land imprdvement program to supply thei4 with an even flow of good/ build- ing sites In w~ii~plann~~d large eubdlvialona ~r In attractive new comm~inities. The homebuth~ng indn~try a~ a whole i~ fln~l~ng it increasingly impo$an't to market houS~oii thebasla that the entirene~hborhood or the entire ne~v come. mnnit~ will ~roirklé unuS~iai attractions ~or1tbe borne buyer. Thie t~'end in the indnstr~ ~owaM itrge saie~plani~e~t de v~L~rneiit' becomes increasii~gly ap- parent every building ~ea~oz~. ~ ~ ~ . j~ I The progrdm of PITA n~oift~age thiSuran~ö~ fer land development ~or new communities can be helpful to smallbuilder~ ~ia number of ~vays. For example, under this program the smail bu~1derean joiujwithotherSniall builders tØ acquire and jointly develop a site oommensurate wilik their combined needs am~ ~ capaci- ties for seve~al years of home construettoil. ~ The ability to pool equity~ and the eligibility of fees for professional serviees u*der the land development ~nortgage enable the small builders to re~a1n compe~nt technical land `develo~4ent staff for the johit operation. ~aeh builder, hewçeer, can retain his individ al build- ing and aaies operation with re~pect to hi~own lots within the large project, and all eau~barein theprOflteó~iland for~eqmTnei,eial property within t e project n~ade vaIiit~lebythe aggeg~onofneWfaIiJte~. Another ~eay in which ~ sm~1fl buildere n~iy parUeipate is by pure ~ asing the desired n$~ber ot coi~tigü4fl~ ~iot~from ia4ki4evelopers who ai~e not emselves homebu1ld~rs. Without the benefit ot F~~t credit assistance, stie land. do- velopers are often forded `to ~ pbtain eredflfbaeklng or other particip tion from large- or medium-size' h~meb1fliders in o4h~ to enable the land de elopers to obtain the funds with wliieh to prepare ~ in a large developnie t. In the case of large new communities, even mc~,e e~tens1Ve backing or p rticipation is required fro~i large hornebnilder~ orgai~1Zations. In return for si oh backing or other participation, the land `detvelopér mi~st normnlly make fi commit- monte to the partlci~patthg bomctrnildere krnder which the latter wi 1 have first choice of~ the best blocks of improved l~ts, thus leaving random nd inferior lots, if 1fl~iy; tosthaIi~ bulMers. The atailability of PHA mortga e Insurance will 1n'v~r7rnany ~aees IMké it unn~e~aty for land developers t make such advancéfeoiflthibnents ts~~ large' and rn4dltirn-size builders. ~ mete d, the land develop~ can~ carry the site preperatlor4pbâge with th~ inanred F A mortgage loan ; sell lots on the fr~ ~narket; andjflheróby~ make additional I proved lots available tosinaller b~I4I*I'~. The increased avaIlahI1it~v of credit f~r ~rational and orderly dév lopment will result in an increased snp~ly of improvfèd building lots at cheaper prices for all builders. Thus, the be~ièflt to smaller~.bnilders will not be at t e expense of mediuni-size and larger 1~ui1ders, but irather will result from ove all IncreaSed productilonof good building sites for the~n~rket as a whole. Under existing law, the Secretary isdirected to adopt requirem nts necessar~y to en~urage broad partit4patlon by b~iliders in the land develop ent program. Title i~ contains áelarif~ing amendment to the effect that partici ation of small build~s in the program 1s~arth~uiarly ~obe encouraged. Phsjplannlng criteria ~r the ~*ist1* land development progra would also be appli~ble with respect tOInew coithiim~ities. In all cases, the erit na established by the SectOtár3r would have as thè~ purpose reasonable ass rance that the process of cothprehensi~e planning f~r the area where the lan is situated in- eludes, as a basic part of thatl ~rore$, provisiofla for making th planning efféc- tive. This is import~Lnt so that the ~~öposed development assis ed by the mort- gage Insurance will In ~tetua1 fact bé~.eompatlbie with the prese t and projected development of the wider area where ~e lSnd is situated. In the ease of a new comilninity, 1~e criteria would contempi to a comprehen- sive plan for a larger ut'ban area to ~dnmonstratethe interactin relationship be- tWe~n the new development and othj~r eoni±nunlties in the urba area, including maj~r central citieS, major emplOyt~pt centers, major open s aces and recrea- tion~xi areas, ~tnd intercity tt~ansport ion facilities. 56 PAGENO="0063" DEMONSTRATION CITIES D URBAN DEVELOPMENT To encourage land developments of e cale and scope of the new communities, special financial aid in the form of F de al National Mortgage Association spe- cial assistance would be available, wh re ceded, for new communities. That is, the FNMA would be authorized, wher n eded, to purchase the new community land development mortgages at the mo e g nerous terms allowable under FNMA's special assistance program. (FHA-insure land development mortgages are now eligible for FNMA purchase under its reg lar secondary market program.) In addition, ~ longer mortgage maturi ies would be authorized for this category of land development. Under eiisting 1 w, FHA-insured land development mort~ gages are limited to a maximum matu ty f 7 years, except that longer maturi- ties are permitted in the case of priv tel owned water or sewerage systems. This exception would, under title II, b cx ended to laud developments for new communities. It would normally be expected that ne commuuitles would be served by public systems of water and sewerage. T ese would be consistent with other existing or prospective systems within he rca, To the extent, however, that privately or cooperatively owned syste s a ready exist in the area of the new community, these existing systems coul se ye the new community if they are approved by the Secretary as adequate a d a e regulated In a manner acceptable to him. Further, it would be permissi 1 f there to be . reasonable extensions to these existing private systems for pu se of serving the new community. If there is no existing system that co 1 rye the a~rea and the Secretary de- termines that public ownership of a ne sy tem is not feasible, the new comrn munity could be served by an adequate pri at ly or cooperatively owned new sys- tem consistent with other existing or pros ct ye systems within the area. Such a system would be required to be regulat In a manner acceptable to the Secre- tary to protect the interest of the consu ers as to user rates and charges and methods of operation. In addition, the cre ary would be required to receive satisfactory assurance with respect to eve ual public ownership and operation of the system and also with respect to the te ms of any sale or transfer. In administering title X, the Secretary we id consult with other interested Federal departments with respect to Feder 1, tate, and interstate water quality standards as these standards affect the t eat ent of waste materials before they are discharged into any public waters. Other provisions affeotiag new communities Urban planning grants under our present ur an planning assistance program would be available to official governmental p1 fling agencies for areas where new communities are to be developed with m rtgage insurance assistance, or where land is being acquired by land develop e t agenCies designated or created pursuant to State law. (Federal grants to 1 al lanning agencies for such plan- ning are now available for metropolitan a as, depressed areas, and federally impacted areas. ) Public facilities for new gommunitles coul b provided by municipalities or other political subdivisions with the assistanc of loans under the public facility loans program. The population limit (50,000) n t e political jurisdiction eligible to receive public facility loans would be walv n the case of public facilities serving new communities within jurisdictions ho e total population now makes them ineligible to receive such loans. Increase in ina~vimu~n mortga~,re amount und U ~e I The overall FHA land development program w id be broadened by Increas- ing from $10 million to $2~ million the maxim m tstanding mortgage amount permitted for a single development. This Incre se would provide the flexibility needed to assure sufficient credit assistance for e large developments, whether they are well-planned subdivisions or entire ne c mmunitles. The $25 million would, of course, represent only the maximum, ot e typical, mortgage amount for any single development. Loans to ~a17d development agenoies The Secretary would be authorized to make 1 an to land development agen- des to finance the acquisition (`but not the impr ye ent) of land to be utilized in connection with the development of well-plan ed residential neighborhoods, subdivisions, and coinmun1ties~ These land devel p ent agencies would be pub- lic corporations, including municipalities, which re designated or created pur- suant to State law. The land acquiredwould be s hi o private buIlders, possibly after installation of `basic public facilities, for th nstructlon of well-planned 57 PAGENO="0064" 58 DEMO*STRATION ~ O~PIES AND IJR~3AN DEVETJOPM1~NT developments. These could be re~4dentia1 neighb~vrhoods, housing subdivisions, or more ~N tei~sive developments, including new ck~nn~nnitieg. The loans would be limited to an amouiit no~ exceeding the total cost, as ap- proved by the Secretary, of the acquisition of a fee simple or other interest in the laud, ilwIu{Iing capitalization of interest for the term of the loan, and related expenses. The loans would be required to be teasonably secured and would be repaya)ble within a period not exceeding 1~ yea~'s at an interest rate of not more than the average annual interest rate on all iMterest-bearing obligations of the United Stat~ forhflulg a part of the pnblic ~ebt, adjusted to the nearest one- eighth of 1 ~teent, plhs ene-haif of 1 pereent~ For the current fiscal year this formula would have prodnce~I a maximum intfrest rate of 41/~ percent. Loans for land acqui~1tion eeu1~I not be ma4~i ~inless the Secretary determines that-- I ( 1 ) private financing is not otherwise lavaiiable on reasonable terms; (2) the development of a well-planned ~iies4dentiaI neighborhood, housing subdivision, or community in the land *oUld be consistent with a compre- hensive plan or with com~~hensive pla~ining, meeting criteria established by the Secretary, for the area Ha which the land is located : and (3) a l)rellmlnar3P d~?v~1opn1ent plfln f4~ the use of the land meets criteria which h has establ1~hed. The cr1teT~ia f(r eoa~eh~iisive planning ~ would include criteria designed to assure ma~~u~ acces~bi~it~ of the plannea d~velopments to any major central cities in thehrea. ~ ~ ~ ~ The land : acquired would- be requir~d to~be develope~1 in accordance with a developmeht plan approvadby the See~etar~ as~ e~nsistent with the provisions of the loan agk-eeinent. Sales of the land to private ~ietsor~s could not be for less than its fair value for use~ in accord .w1t~l~ the aj~proved development plan. A development plnn, whet'et~r feasIble in thel light of current conditions, would be required to encourage the provision of site~ providing a proper balance of types of housing to sertre families having a br~~d range of income. The Secretary would adopt requirements ( analogous to thbse adopted under title X of the Na- tional llovi~sing Act) necessary to encourage the maintenance of a diversified 14)cal hcsmehuildlng inthistry and broad ~artic4pation by builders, particularly small builders. This prOgram is designed to assist the Sl~te governments that wish to establish land deve~Iopment agenei~s in order to ta1~e advantage of the State government's unique p~wers to promote the planned !development of future urban growth. Cities, ~intTea, and other political subdifrlslons could be designa~d under State lawas Iapddevelopment~ehcieS t~ parti~1pàte in the program. Through these public 1Wn~ developmen4 ngen~1es State governments, which are res~oiiathle for the well~being of all of it~ cItI~ena, would become instrumental in fostering comprehensive ~danning of ne* area~ expected to be populated within the foreseeable future. State governments are already concerned with the ceo- nomic planning with ~ respect to promoting industrial development, and many State governments are also engaged ih some form of "systems" planning in connection with determining the locatich of, and standards for, water and sewer facilities, location of State highways ~nd tIie planning of other ptiblic works. These new provisions would help themi carry out this planning. Once the puhlic land development a~encies, whether State or unicipal, are estab1hi~hed. and after so~e~j~erienee~$th Federal loans indicate that this type of Sta~is~ andrnu*nieipatl ~eti~ity is both~pj~actical and successful, p ivate investor inteM~t t~ the ob1tg4Lti4flI~ lasued by 1~e land development agen ies can be cx- pected. Private funds would then t~ likely be obtajnable a interest rates below the interest rate ta.be charged j~or therederal loans. The loans authorized would be m~e f~o~ thefl revolving fund e~tablished by title II of the Housing Amendments ~of i~55 to finance the pub ic facility loan program. No additional authorizatiOn is now necessary. J~t is estimated that during the first full year of operation the amount of Federal fun s committed for these new loans would not exceed $25 million. The Federal loans to land development agencies would not onflict with, or overlap, the mortgage insurance assi~tance for land developmen provided under tlii}e :x: of the National Housing Act.; ~l~e loans to land develoPm~flt .a~flcie5 would In almost all cases take place at ati earlier stagein.th~4eVe10Pm~~t0f land than would the lo ns insured unaer thin X. A ioakitoalafld develOPJfl?flt agency could well finan the acquisition PAGENO="0065" 60-878-66-pt. 1-5 59 DEMONSTEATIO~ CITIE~ D URBAN tEVELOPM~T of a piece of land whk~h, wl~en sold the agency, could. be developed with finaii- cial as8istance under title ~ or d~ve ~ e~ without any form of Federal or State assistance whatsoevei±. ~ \ , \ The precise character o~ tl$ d~velo e~of i~nd Wht~se ~qn1sition by the land development agency Is fina~~e~ und r ti~ ~1rect loan program would not be known until the agency li~pi$pared to ~ I i off for devek~ment. It is really at this point ~the poin f ~ tensive development of the land ~ a resIdential neighborhood, snb~i~isi , ó new c&mmunlty) that the title X mortgage insurance program cou~d co i]~ ~ play. TITLE XXT-~--UE~3AI~ ~ S~ PEAN$?OWrAflO~ Proposed incr~c~$o ~grmt attt~'wr~xttio ~ Title III of the bill would i~icrease y $9 million the grant ~ithorizatioii ~ the urban mass transportatlo~ p~ogra . ~ his program, Carried on under the Urban 1\?[ass TransportatlonA~to~ 196 ~ ~ ro Ides grants o~ loans to a$slst locall~ ties In financing needed mass~ran~port t c4~ acli1tie~ t~nd eqtiipment. The pró~ gram also provides grants fO~ ~pro~ects ~ ~ elb~ test, and `demonetrato new or improved mass transportation\ ±a4ilitie ~ e~ ipmént, or techniques. The Congress has alrt~tdy a~~ropr1at ~ $~ million of the initial. $375 miflion authorization prQvided for this a~t. * : ~ uested new authorization of $95 million, added tO tIle $55 m1l1~on ~klaiiq ~ the present authorization, would permit conthi~ied fundi~ of th~ pr~gra i~ ~ seal year 1~6S, at the $t50 million level recommendedby the á1ñiix~i~tration ~ .~ . . The . Congress orlgitiaily approprtated ~ 0 lilion ~ for `Utth ~ ~ogram for fiscal year 1965. In 19~36 it ~pro~tded\ a s-yea p~ oprlatlon-$130. million for fiscal year 1966 and ~ an ~ f he s~n~ ~u~on~n1~ ~or fiscal year ~ 1967. The President's bw~get f~r fiscal a~' 967 recpjësts an advance appro- priation of$15O'tnL~lton this year~ to 4~Qnt1 1t t~ &~vafice funding of the program through flséal year 1908. ~ ~ . Advance funding js essential ~n t1~e ur a , ass transpoi~t~tjön program, It allows communities time to plan\ their p~ j et with assur~uicO that funds will not be exhausted during the le~dt1~e- e ei~ 1 years In ~he `arger projects involving fixed f~cilitie~-b~twee1a si~artin c~ l~ut for ~ project and applying for grant assistance. ~ Program cwt~vity The proposed $1~O milliOti ra~o~am leve oi~ seal 19~8 Is well supported by the volume of applicathulisilTthancl c~r know o e in ~,eparation. Thirty-s~ve~i million of the current year's ~ i ~ ready committed, and appliCa- tions are in hand for an ádd1tiOn~l $~i4 th ~ ~ It Is e~eeted that these a~ plications will result ~ Ic will use ~ip the remaining $93 milli~tt ofthls year's $180 m1l1i~ ~prop~iat b . \ ~ ~ . Additional applications ~EI~ co~üit~g ii~at a ~ nt~ a~,ftig rate, àlre~tdy ec~niváleñt to over $140 million a year, It Is ~rer~ pro ~ ~ bat thi~ raVe ~v'il1 continue to increase : during fisca' 19G7 and 19~8. For b ~ Mug, we expect more larger cities to be submitting prc~jeet ap~llèa~1ons, Th ~ curreut backing ~ of appljc~t- tiotis points in that direction ; aiid1~he ~Level p e t of new tran~1t systems anU extension plans for existing system~-snclTt a n tiatita, ~o~s `Angeles, Chicago, Cleveland, Boston, Ne*Yo~k-4srO~td~ in~11ôat~ a I~ v~t call on ~ederalas~1stabce for larger city projects Within the next f~w ~a S. ~ Program ea~pCrienes-cfc~pit~a ~ g~o p~ This, program is pro~'hjL4ng capital grant ass~t ii~ 1~o commimities ~f' all siz~~, including some ~faced with a breakdbwn or t~t I 1 s~ of public tra~n8portatl&n service. Twenty-fii'-e ~rojects have be~n appro*~ , ~ r arnaximui~ Federal grant commitment of about $~7.3 nillllon.\ These ~r ~`strThntéd among 17 States ~ in every section of the rotint*, to u*ban com~'* ~d tes of every si~e-~--froni the city of Kenner, La. (population 17,00Q) , ~or t~o bt~es and a storage garä~e, to the city of New York, for 400 new rar4d-ti~ansit\ c r~ for the subway system. About 60 percent of the capital grant coi~mit nt~ ha~ve been for the purchase and rehabilitation of equipment, lnclud~ng buses all apid transit and commuter cars, ferries (for the Puget Sound cothmuter s t ice , and miscellaneous equip. ment. Transit facilities projects have pcliided a tw -way radio installation for the Alameda-Contra Costa bus system, a s~atio od rnization program for the Boston area subway system, construet~on and pr~wement of bus shelters in PAGENO="0066" DEMONSTRATION CIflES AND URBAN DEV1~LOPMENT Detroit, the ir~ass transportation features of NEinneapolis' Nicollet Avenu Tran- sitway and pedestrian mall, and extension o~ rail rapid transit and Co muter systems in p~rthern New Jersey, Oleveland,! and Philadelphia. A nu ber of the projects *re multipurpose, involving bot~i equipment and facilities. Twelve of the twenty-five projects have b$en approved under the e ergency program, profiding grants of one-half rather ~han two-thirds of net proj t cost, pending cornj$etion of local planning and pr4g~ram requirements. Three of tile projects involve small reloca~on grants for displaced b sinesses and families. . These grants are helping communities to ~carry out planned improve bnts in equipment and facilities which they could~ not themselves finance o t of the fare box. And they are stimulating local initiative and lo~al acti in the planning and provision of transportation fak~ilities in coordination wit * commu- nity developm&i t. . . ~ They areialso~ having a substantial impa~t on the economy of the t ansporta- tion inthjsti~y. We estimate that even the p~Ojects approved so far wil generate about $150j million in rnanu~aeturing an~ construction work in th industry within ±be ~iext 2 to 3 years-*tth every F~leral dollar involved in th t expendi- ture being ~natehed by a local dollar. * Program e~pericnce-Resea~ck and~ d,etnon4ra~Uon gr~ts The proposed increased authorization would Include $10 miUlon f r the con tinuecl prdvision of mass transportations: research and demonstra ion grants during fiscal 1968 at the same level as duribg recent years. Under th tem~i9~~ary demonstration program authorized -in 191~l, 26 projects were undel~ ~ aken, ~slth grants of a little ~ under $25 million. Under the 1964 legislation, 13 more proj- ec1~s have been approved, with grants totaling about $10 million. G ants range in size from $10,000 to the UnIversity ~f Washington for an ana ysis of the Seattle monorail operating ~xpeiience a4d public acceptance, to nio e than $6.2 million ~tÔ the San Francisco Bay Area jflapid Transit District fo a program of rapid transit design and engineering ~tudies and tests for its ~n w system. Projee~n are now underway or comp~etM in 17 States and th District of Columbia and involve every section ofjthe country of the 39 p ojects seven have. be4n completed. In eight more, 1~1ie work has been conclud , and final reportg are in preparation ar already rec~Fved. Several tests of new systems and eq~ipment are being carried n-including tests on a new type of rapid transit system in the Pittsburgh are and an air- cushton vehicle for airport-to-city comn*uter transportation in the ~ aklànd area. Projects are also being carried on to test techniques for improvi .g service and fare ~cbedules, routing patterns, feede~-bu~ arrangements, servic to new corn- munit1~s, coordinated local-express. sei~tiee, and park-and-ride ai~rangements. These grants have proved to be veryfworthwhlle. Much valuab~e information has aI~ady been develope~l from the p4~cts ; and the program h s captured the keen i4terest of public~fl~eials, transit~perátors, planners, and 01 ers associated with ttansit both in this countiy and jaround the world Most i portant, local tranø~brtatlon legislatirnl, and prograi4s are being guided by the sulta~obtalned in th~ pro3e~ts Some of the ilern~4strations have for exam le restilted in new State legislation to help their Ioc~litles establish and mainta n public trafls- portátionsystems. . Looking forward in the dernonstraI~on program, we expect co tinning activity Iti the testing of improv~ments in tr4nsportation systems, teehn logy, and man- agem.ent. New concepta in these fieids are being developed at an accelerating pace, and these should be tested and ~demonstrated for operatlo al dependability anj y~ublic acceptance. For example# our larger metropolitan a eas will increas~ in~j~ require coordination of regioi~al and local systems, wit in a single-fare sen~ce where feasible, and we wouI~ encourage demonstration in this area. Die followingtable slflnmarizes th~ present aetitity under the mass transporta- tb program and shows applicati ns now on band for the arlous types of pr rams. I 60 PAGENO="0067" DEMONSTRATT~N CITI~S A~ URBAN DEVELOPMENT 61 Maes t~a4isVorta~i ~ ~rogram highlights [Dollar an~o nts 1~i thousands] C~imuiat4vo t~? iune 30, \ 1968 A tim , 1964. Actual, 1965 Actual, 1966 through Feb. 28, 1966 Estimate, 1966 total Capital grant approvals: Number ~ Amount Demonstration grant approvals: ~uniber Amount Capital loan approvals: Number ~ Amount Applications on hand, Feb. 28, 1966: . 17 $~o, 702 . 11 $9, 129 . ~ . 8 1 $36, 548 2 1 $1, 047 . i $3, 100 40 $120, 000 20 $10, 000 a $10, 000 . ~ ~ ~ 16 $19~94ô 1 $3, ~i00 --~. ~ ~ 11 $~, 336 -- ~ For capital grants: Number ~ Amount For demonstration grants: Number Amount For capital loans: Number 39 $104,602 18 $9 ~ 2 $6, 605 . ~ ~ \ ~---1 ~ Amount - 1 Also includes increase in grant affiount\s for project~s teQi usly approved. TITLE IV-GEANTS FO1~ TJEB I]~ RMATI~N . CE]~TERS The need . In recent years there has ~ bee4 a ~reat e pa $lOfl o~f Federal, State, and local programs dealing with urban problems, ~ l~e e are numerous complex facets of the many Federal pr.ograms~ plus a h ~ ~ related State, local, and . privath programs. These programs could be us d t~ much 1~etter i~dvantage if State and local governments, organiza~lon~, an in~viaual~ had more ready access to information regarding them. ~ Also, more readily available d~ta ~s ne d ~ ~ s to the nature and extent of urban problems, In order better ~ to plan, u g~ , and coordinate these various assis~azice ~ pi~ogrs~ms. \. ~ ~ ~ ~ ~ M~h info~sflation is of course ~Llready V ~ le on urban areas and qn~j~v- ernmental activities within them. Uo~weve ~ e4 use such information is widely scattered and In varied form, its avallabil t a U useful~ies~ is often severely limited. ~ . This problem is greatly compoi~nded in et~ politan areas by the number of counties, cities, towns~ villages, ~nd spec! 1 dl tricts involved in the adminis- tration of services to the people o~ ` tho~e ar a . In the 212 metropolitan aroas in 196O~ there were almost 16,00O . of thes ~ lo~ 1 public bodies. Centralized information is particularly vital to the coor I ati n of their efforts Pro~w&tad den~o~stration g'rasit pro~jr~ ~ Title IV of the bill would . anthqrize the ~S r tary of Housing. *ixid Urban Development to establish a new progi~am of Fe~ ra~ grant assistance to help meet these urban information n~tds. The gra~its ~ l~I e made to States and metro- politan area agencies to help f1nt~nce ~ pro~r m~ demonstrating methods of establishing and ~ operating effective urban i~f atlon centers. The centers would assemble, correlate, and dissem~nate inf4~r at on and data on the physical, social, and economic problems of urban area\ , ai~ on the governmental and other programs dealing with such prob~ems. The centers would not * collect ~ and analyze o igj al raw data, ~or example, through census activities, surveys, or re~earc pr * ects. Rather, they would be depositories of information and data, Origi te~L by others but brought to- gether at central points to be made ~nore eas 1 ~t ailable to all. What the proffra/m could wc~ntplish Only . a few ~ States and central c1ties~ and év ~i. fe er. suburban communities, have explored the potentials for makli~g readil vt~ lable lii this way, a corn- prehenSive picture of the community, ~ its econ ic and demographic charac- teristies, the status of its housing, the costs of o~t lug the myriad essential community services, and its various otl~er ~ieed lid resources. The proposed PAGENO="0068" I. 62 DE~STEATION ~ CITIES AND UI~BAN DEVELOPMENT information ~ei~ters could make valuable contj~jbut~ons to eomprehensive plan- fling, coordinated action, and sound managei~ient in towns and cities of all sizes throughout the Nation. Such information centers could be of parth$ular assistance in meeting state- wide or metropolitanwide urban problems. tCèntralized information s stems would be particularly important for the gro~1ng number of States and larger cities showing Interest in applying systems ~tnalysis, program budget! g, and cost-benefit analysis to the management of theiir activities. Of course, private enterprise and investmei4, as well as publh~ endeav rs, will be greatly benefited by the provision of easily Mecessible ini~ormation abo t urban needs, growtji4 and change. ~ . The center~ would also reinforce and ass!st~ffort~, such as those bein carried on under title vi oi~ the Economic Opportunhlfr ~ct of 1964, tomake inf rmation and advice *E~garding local public assistance ~o~ams readily available to those who heed it. ~ ~ The reqwtred A~ttate or metropoUtan inforniati~rn progra~m,s The required State or metropolitan program would in most cases ifl~ ude both the establishment and continnad operation èf an information center. owever, if a State or metropolitan areaalr.eady had~such a center, the progra could be ~directed tos~ard the improvement of its facilities and services. ~ En any ~b1se, a program would have to iijLvolve substantially ixicrea ed or im- proved activities on the part of the app1iean~ State or metropolitan age cy. Also, the applic~itit would hare to adequately justify its choice of program a tivities in terms of specified urban phyi~icai, social, ~nd economic jnJ~orna*ition needs and objectives, including eemparieons of cost a~id usefulness wbore appro nate. Metropoi~tbn a~eai%frIrtiiOtiOn CEYflte~r8 ~ ~ f An information center. for a metropi~1tan ai~ea could be esta ~ 11she~ and operated by an organ1zatlb~ or bod~r ~4~pas~d ~f public officials which the Secretary determines to be repres~ntattV~ `of the p~iliticitl juri~dic bns encom- passing the metropolitan area Where ~no s~ich organiaation e~i ts and can qualify f~r a grant undei~ this title, a c~iter cottld bc~ established a ci operated by !t i~ubi~e body or agency (1) designated by the governing body of t at political jurisdiction within the area which contains the largest populatioii, according to the md~t recent decennial ~ènsus, and (~) concurred in by other p4~1ltical inns- dictloiiS which, together with the thisign~ttiug jurisdiction, cOtitaiu $t least two- thirds o~ the population eJ~ the area. This would assure that th~ centers will meet the needs of onti±e r~tropohtaii are~tS I Six!hl*r17 such a center ~vo~d be reqfured to be directed pn1mar~1y to the pro v~~fl Øf ifl~oninaUOn ~s~r~1ce~ oi~ genefral ñi~tropblitan*Ide utili~y, or of par- ticular fltility to the communities wit4lrL that metropolitan area.I ~gta;t~e i$formation centera ~ * .1. I An taformation center (or centers)! established by a ~ State u~der this title would be `required to be directed pnima~nily toward providing info~matlonal serv- ices o~ general statewide utility, or o~f particularly utility to eqmmunities not withix~ metropolitan areas for which information centers. had bpen established under this title. Services of "state~*ide" utility wOuld includ~ informational ser~ticbs of utility to tbo State goveril~ent itself and also service~ of utility gen- `erafl~1to urban areas throughout th~ State. The authority fo~ additional in- fonir4thinal services to communitie4 hutside metropolitan area~s would permit ~ t~ provide to such conimnnIt~s more spet4ali~hd inforn~ational services eomp~trable. to those widch could beJtriYi~ided b3ra metropolita~ area center to eomr~iun1ttes withh~that ar~a. ~ Ainoant of Federal graat ~ A gratit under the pi~oposed Fed*al program eduld pay for up to 50 percent of the cost of the activities carnied~on by an applIcant under . ts approved pro- grain during 1 year. However, ai grant could not assist a tivities receiving assistance under atiy other Federal ~grant or subsidy program, or could it assist in assembling data or providing information to be used prima ily in the day-to~ day operations of State or local public bodies.. prog,~anvoooro~inatiOn . : , ~ . J~rr#tsathted State or me1iiopolt~an program would be req med to be closely ~cobrdii~*ted with .r~1ated Fede3~l~ 5~, * and ~ local hifor ation activities- ~h~htdiag those reoaWingt a~ssistair iunder section. 701 of the otising Act of 1954, PAGENO="0069" 6 DEMONSTRATION CITll~S D UREAN `DEVELOPMENT title I oi~ th~'Higher Educa1~ion ~&ct o~ 90 , title VI of the Economic Oppo'rtun1t~T Act of 1964,~ and other Pe~ei~a~ pro~r r~ . S1mU~r1y, th~ various Federal de~ partments and agencies w~uld be i~è uJ~ ci to cOoperate with the States and metropolitan area agencies ~Uid pro~d I formation to as~ist them in carrying out their programs. Such' ~wo~w~y ~ op~ átiou With ~e~peet to State' or local and Federal programs ai~d ~ti~ities \~v ii e o~ major importance in the success of the proposed iiiformation ~ent~rs. ~ i~s ure eff~ct1vé Federal cooperation, the President would be directed to ~nder~t ~ uch studieS to improve Federal pto- gram information capability ~nd coor4i ati n as be may deem necessary. E~rperimeiitai nature of o~r~nv~-Ap~r pr~ tio~s Much remains to b~ leá*~ned about t1~ø a~i e of ~ur~oseS that can b~ served by such information centers an~i t1~e te~h lcj es of 1ent1tyth~, assembling, and making available infor~i~tioi~ ~md\data.\ T~ new p~rpam i~ therefore proposed on an experimental ` basis. ~he Secre~a 3r ould ~e required, not later than Jpne 80, 1971, to evaluate a'ett*itie~ un~ t~ program and report his findi~s to the President along with reeom~nendatio$ ~O~' eo~tiu~anc~ modification, or tei~ni- nation of the program. \ \ ~ ` ~ ` " An lnitfttl ~utho~rizatión~f ~ i4illio4 i i~ ç~t~es'ted ~br'1he program, with ai~ additional $5 million author12e~[ ~ 19O~. ` T ereafter, ap~ropriattons would b~ authorized as ileeded. ~ \ HotsING ~ AND URBA~\ D1tvELo]~* ~ AMENDMEN~rs OF' ~966 The third bill would amend ar~d broade~ 4içimber ot exi~ting l~tws relating to housing and urban development. \ TITLE 1-hOUSiNG A~Th V1~A~ nnv~o ~ ~r ?flOGRA~t A1~En~DMENTh FHA-in$'ureZ property £~mpro~)em~nt ~QanS The provisions governing the 13~A 1~itle ~ ~ ~ rty4mprovem~ñt loan-insurance program would' be amended to per~iilt the l4~i ~ 0 collect troth the borrower the cost of the PHA insurance ~ren~iun~. ~.T~id i~ lie present la~r, the lender is required to pay and absorb out of Ihe ~liseoi~t r te the PHA 1t~surance premium charge of one-half perceilt per ann4m en th~ ~ t roceeds of `the loan. The effect of this requirement is a reduction ~n t]~e am~ n~ f return realized by the lender in making the loan. , The property-Improvement progr~m is the p i~ HA program in which the cost of the insurance is not directly b~rne~ by 1~i b rrower. We are nevertheless suggesting that the `amendment be ~ffectlye ~o ~ y 1. year so that the Congress may have flu opportunity to det~r~4ne ~he e1~ t lUch the ch*u~ige will h~tve, on the volume and patter~i of t1;~es~ PI~A-aided lo~Zi . ` The program is one of PEA's largest and ~ e~ i~surA~e progranis. .t th~ end of last tear PHi had 1nsur~d cWse to 2$ il~iQi~ title ~ loar~s amounting to well over $17'biUI'on. \ However, the FHA tltle I loans h~tve çt~epr~e t~ a ` ~tgnthcantly smaller per- centage each year s~n~ 1~7 of th~ dqUar ~ ot~ t of property improvem~ent loaw~ made throughout the country. ~n 1~57, l~i~i rcentage was 52 percent and it deere~sed to 29 percent In :t9e5. ~em~ers i~~a e ~ ubstituted various types of their own programs for financing h~me imp~o e'~$nts. These so-c~ljed own plans provide for collecting a much li~ghor dis~o n~ from ~the borrower than Is permitted under the title I program. As a result, bo~ owers aro paying higher fl- nnncing charges on property iwprovez~euts, an4 n ~ me cases are borrowing a~ exorbitant rates. ` \ \ The proposed aipendmeilt will give the lend~ ~ small incroased retrn~n on their loans, thereby eneoi~tg~ng them to éxten~1 ddl tional credit for home re- pairs atid improvements, particularly to hbmeo~v e~ of lower Income who are most likely to be denied a loan at a marghial rá~ . bese `are the homeowners~ who, when faced with a need to make e~iiei~genc~ o~ repairs, are often forced~ to borrow at very high or even exorbitant rates ~T ~ they are unable to obtain an FHA-in~ured title I loai~ Mortyage limits for homes under seotio~ 2~ (d) (~) The maximum mortgage lhnitat1oi~s o~ ~ingl~- an~ t 0- amily dwellings financed under PITA's section 221 (d) (2) home mOrtgage h~e ra ce program for low `and mo4erate income and displaced families would b~ n~ aseci. The limits on a PAGENO="0070" 64 DEMONSTRATION CITIES AND Ult AN DEVELOI~MENT mortgage cove~,tng a single-family dwelling wotild be increased from $ll,~OO to $12,500 and on a two-family dwelling from $l8~OOO to $20,000. . I An increase in mortgage limits was authoriz~d in the Housing and UrI4n De- veiopment Act of 196~ for the comparal~1e seetipn 203(1) program for low-ncome families in outiymg areas and small communities This increase was an orized to enable th~tt program to operate under pre~nt increased home costs There is a similar need in the section 221(d) (2) ~rogram for incroasing m rtgage limits to mee1~ increased construction costs. Coo~e~at~LDe hb~M~ng in~uranee fund . Amendments are proposed wii&ch would re ove certain technical ohs acles to the transfer of insurance of management ty FHA cooperative housing insured mortgagee to the cooperative management ;housing insurance fund ( anage- ment fund) so that the insurance will be pro4rided on a mutual basis. Under present provisions (established b~r the Housing and Urban ~Develop- ment Act o~ 1965) , the mortgagee under a mortgage on a n~anagement~ type co- : operative which was insured prior to August 10, 1965, is required to coi~sent to a transfer of the insurance to the new ma~agemént fund. In some instances, mortgagee~ have been reluctaz~t to agree to~ the transfer because it would result In preven~i~ig their use of .g~neral insur*ce fund debentures `(inc1~iding the . : &~bentures of the previous insurance fu$s which were c.onsolidate4 into the general insUrance fund) for paying the m4rtgage insurance premium~ on * trans- : ferred morlgages. ~ . ~ I ~ I Under. tlLe existing provisions, premiumsjon mortgages transferred ~e the man- agement fund can only be paid in cash or *n management fund debentures. The new provisions would permit mortgagees to use FHA's general insu~ance fund debentures for paying mortgage insurance premiums on mortgages c~overing co~ operative housing where the mortgages htve been transferred to the cooperative housing management insura~iee fund (management fund) . In adc~ition, inert- gagees would be permitted to use any thanagement fund debentnr~s issued in connection with the mortgages transferred to the management 4ind foi the paymeutof general insurauce fund pren~iums~ I These changes would remove the basis~ for objection on the part o~ mortgagees to a traüsfer of cooperative housing mor~gage insurance to the m~ana~ement fund. Smee tlthre would no longer be any rea~i for obtaining the consen of the mort gagee tq such transfer, the provision ii~ the present law requiring such consent * would be removed. Authority would lfhereby be given for the t ansfer of all outstan~iing insurance on management ~type cooperative housing ojects to the management fund. Land development-clarifying amendnJent Another amendment in this title ~oüld protide clarification regarding the types of improvements that may be covered by mortgages insured y FHA under the lai~d development program (title X of the National Housing A t). The types of improvements permitted under tit1~ X are those deemed ne ssary or desir- atde 1~o prepare land primarily for ]~idential and related use or to provide facUi~1es for public or common use, ( Pbis subsection would m e no substan- tive 4bange in this regard. It woul~. provide expressly, instea of by general iangi~age, that steam, gas, and electrifi lines and installations are permissible ira- prQ$ments * under title X, and wo~d make it clear that md strial uses are Incinded as nonprimary related use~ with the industrial sites to be in proper propbrtion to the size ai~d scope of th4 development. The title X land development mMgage insurance program would be added to the previsions in section 512 of the National Housing Act. hat section pro- vid~s penalties for violations of the act by lenders, borrowers, uilders, or others Who may receive the benefits of th~ loan insurance programs. The amendment would include the land development program among those that could not be used bypersons subject to the penalties. ~ Lo~v-rent JWt&Sing for dispZaced fa,m~Ues-term of lease 9~he bill would permit local h4ising authorities to lease dwellings without regard to the 1- to 3-year I1mita~lon provision contained i the present law, wñere the housing is needed to reI~ouse low-income families d splaced by govern- montal action~ The leasing prog~am is an important reloca ion tool because it provides low-rent housing more ~uickly than new constru ion, especially for large families. Families who are forced to reliieate by reason of public pr jects are especially subject to the fear of further forced removals. For such fa ilies, relocation into PAGENO="0071" ons. - which are Applyling advances Over the PAGENO="0072" 66 DEMQNSTRATIQrN CITIES AND U$~BAN DEVELOPMENT U~qua11y. imp~rtant is tb~e fact %1~iat over thelnext decade the housing h~clustry must inereas~4itsaunua1 pro~uct~ob by one-thfrd-.4rem 1.5 million to 2 ~ni11ion u.rdts-Le. it ~ to accQrnm1!~date~ the ezpaz~4ii~g housii~g needs ~ of A4ierican families. ~ ~ ~ In additions betweeii 1960 an~ 1975, our u4ban population is expecte to rise from 125 mi1J~ion to 171 million, placing add~d strains ~ our already b rdened urban facilities, such as water, sewer, and ,t~~nsportation. Considerable technological acI*~a~nces are b~iñg made by private indu try and St~tte and loeai governments bQth with respkt to the cost and quality of home cönstrudtion and with respect t~ meeting the complex problems of urbar~ develop- merit. Constant experimentation Is being curried on in such areas as housing design materials and construction techniques and In making our urba centers safer, heaj~ier, and more attractive placesjit~ which to live. The prOt~1~nn is sometimes ixiisunderstoo~ as being entirely a lack f techno- logical pr~g~,ess gather, ~t i~ important to~ note that these continuing advances iI~ tOchnlc4ttd ar~ often slow to ~e applied ~3ullders are reluctant to ri k making major eha~es In desigii~ or materials for f$r of adverse market reac ion The home buy~ei~ does not readily accept devial~ns from traditional hous ng design or matei~1ai~ Labor is often unreceptive t~ cost or time saving inno ations for fear of economic loss. And cQrnmunities t~tt could benefit enormousl from the application of such new urban techniques $s large-scale centralized tr atment of wi~stès or new methods of int~acity transp~rtation are often slow to ove along thesejjues~ . ~ ~ ~Fl~ese a~e some of the praqtical problems that have held back pro ress It is here ~th~t ~the ]~ederal Go*~rnrnent can an4 should assert leadership, so that the gneat tec1$~ological strides tl~at have been ~Lde in recent years, and t at continue t~y be maqe, can be harnesse4 to the ben~1t of all Americans. This is what the bill seeks ~ accomplish. ~ ~ I The I~IU would direct the ~ecretary to ~~courage and assist the ho sing indus- try 1o ré~tuce the cost and ~rnprove the *uality of housing through the applica tion to .1i~Mxje construction and rehahilit4tion of advances in techn logy, and to encourage and assis~ the application of ~vances in technology to u ban develop- ment aet~vities. ~ The Secretary would be further dirfrted to conduct research and studies to test ~~nd demonstrate new and improfred techniques and method of applying advapce~ in technology to housii~g consfruction, rehabilitation and maintenance and urban development aetivities. lie ~would also be directed to ncourage and promet~ the acceptance a1~id applicatk~i ~ of new and improved t chniques and métbQ~ of constructing, r~habl1itating~ and maintaining housing, s well as the applica~on of technology advances to furban development activiti s by all seg monte 4~f the housi~ig uidi~atry commi4ilties, industries engaged i urban devel opiueill~aetivities and the general publl$ WheA this program is funded its ac~ninjstration would be han led as part of the ln~tltute of Urban Development *commended by the Presid nt in his 1965 message on the cities. . The research and studies would be.jdesigned to test and demo strate the ap- plicability to housing construction r4babilltation and mainten ce and uiban development activities, of advances imtechnology relating to (1) esign concepts, (2) eenstruction and rehabilitation i~iethods, (3) inanufacturin processes, (4) matealals and products, atid (5) buildltigeomponents. R~earch and study projects could ~be undertaken either direc ly by the Secre- tary' or by contraet with public or ~private bodies or agencies or by working agre4nients with other ~ederal Depa$ments or agencies. Each roject would be re~i~ed to be cont~leted withln2 yea4s P4wlsions of title [fl of the Hou~ag Act of 1948 and section 602 of the Hous- lug Mt~t i9~;6 presently authorize ~he Secretar~y Of Housing i~nd Urban Devel- opm~nt to undertake siid conduct 4tudies relating to the reth~ction of housing cGz~struction costs throtigh the use ~f new and improved tech~iques, materials, ai*dt methods. However, these exiting provisions authorize s/uch studies to be undje~taken as part of broader rE4earch functions such as i~he collection and dissemination of data relating to mflrket `analyses, housing lnv~ntories, mortgage m~ket problems, and the housing iieeds of special groups suc as the elderly. ~his bill recognizes the importa~ice of a program designed specifically (1) to r~uce housing. cogts through app~caUon to home constructi n of technological ad+ances, and (2) to `assist and encourage the application o advances in tech- ~o~ogy to urban development activities, by directing the Seer tary to undertake such a program and authorizing cific appropritions for th t purpose. PAGENO="0073" 67 DEMONSTRATION CITIE N URBAN DEVELOPMENT ~ Reh~bi~itci~tio~ and code efdrce~e~t ~jr n~ This bill would repeal a\p1ovisi'oi~L n he Supp1eme~ta1 Appropriation Mt, 1966, which limits the a~otu~t `o~ ~irb$~i r~n wal grant aut1ior~ty tha~ can be used &n fiscal years 196~ and 19G7\for~ran~ 1~Gr ~habWtatiOA 4~d codE~ ehfor~ement. \ The limitation that would ~&~iea1~ 1~ ncousthtent \~Ti!th the general purpose of the .rehabilitatiou afld co4e e~ifOr$ ~1~t graflts~ ` A~tbority for these grants was added to the Fe~era1 u~bai~, re$ a~ aw by, `the Housii~g and TJrba~ De- velopment Act ~ot~ 19~5 to en~oui~age ~ re *onse~vatiOii~ and rehabilitation and thus lessen the need ~or 1ai~ge-sca1e ~1 m e1enran~e and redevelopment. The limitation in the appr;c~prtat1~rn ~Ct 1i.~i t~ th~ tOtal amount of these grsflts hampers the achievement of th~s pi~rpos.~. Repeal of provision for sc~e of ~13~or~st H~U p je~t,Pa~I~uxt~h, ky. Section 1005. of the i-]~ousing\Aet ef 1~ ` ~ nId ~e repealed; This 15 the provi- sion that directed the sale of ai~ ~áA~-~tc~t i~ rental-housing proje~t inPaducali, Ky., to the Paducah-MeCrael~en Ooun ~r fl velo~*5il~ CQ1~flTcil for use of the Paducah Junior College. Ovei~ a period o al ost 2 years, the EllA has not been able to put this provision lnto\ eff~ct ~ ~1 t~ re is no foreseeo~b1e change in cir- eumstances under which it can ~e ~üt mt \e ~ . The Paducah Junior Ool1ege~ af~er e k tii~ ~t of the. LO~34 provision, recei~v~d private la~id donations rnt~e a~4~r~riat t ~ needs and lost interest hi aequtr- ing the project. The development ~ coun i ~ p `posed other uses for the projeç~t but has been unsuccessfi4 in its effor s tp Qhtaln fiwLneIng. The repeal of section 1005 is d~esired to pèrni~t e~nsid ~ t~ of oi~he~r theans of disposii~g .~f the property. ~ ~ Teohn~ca~ amendments ~ ~ A requirement ~n the Federi4 nrban~ ~ ew 1 ` la~kr~ w~ould be repealed irnder which contracts ~or supp1i~s ~r~ei~yi~cs ~ oh xce~ci the aniount of $i,OO~ may be made or entered ii~t~ orlyte~\ac~ei~tthi ~o' bi~is. ~ The provision that would be répe~led I n~ nslstent with a~general Federal statute which imposes the adve4isi4~ re 11 r~ ent on all Federal contracts pf this type which exceed $2,500 14 :~ti4Oumt. Ph repeal of th~ provision in the urban renewal law woul~t r~thio~ ~th~.s in 0 5~ ency, ~ ~ ~ ` In addition, provision5~1n the é~b~rene I 1 w and the urban ~il5~ni~ing gi~nt law would be amended to mal~e\tt clear t eferen~es ifl those l~w~ to the Area Redevelopment A~t ~n~1iide a~ $fere ce~ laws ~c~1~ih are suppl~nentary to that act. These ameucTnients ~rére inn ~ r t othi~s1ôn~ frOm the flott~ing and Urban Development A~t of19~. , ~ A 1954 prohibition agaiñ~t FN~A's pur ta si loans Insured & guaranteed prior to August 2, 19~S4 ~v~o~4ct t~e $péaled. ! ~ provision was~ appropriate in 1954, as it `protected the fledgiltig secondary a~ et operations from bethg inun- dated by offers of existing rns~141a~es. 110 v~ it no longer serves this ~pur- pose. While repeal of this p~~s~on woul a~ e elIgible ~or~,p~cI~ase a few mortgages of an age of 12 years a~id ~ipw~t d * ich are now~ not'é1ig1b1e~ the number Involved is negllgible~ PIThE II-C0NF0nMING NOM~OL~TT1E~ * I~t SPA P~ TO DI3~PARPME~P OF HOUSING AND ~AN D~Th~LOP N1~ ACT This title has no legal s1~nf~kn~ etept t c~ rect the wording of cer~a1n statutes to conform to e~dstin~ itt4v ~s ~rovic~è In the Department of Eloush~g and Urban Development Act, \ \ The title would make te~nieài anij~nd~ent~ I t e FederaFSt~tutes autboris- ing the programs of the Departinent~ of Hon~i g ~t U Urban De~eio~mcnt alid other related Federal laws to iiiaké th~ noi~iencl~t ~ in those 1~ws cbn1~orm to the provisions of the Department of~ B$sli~g an~l tlr ai~ ~eveiOtment Act. The amendments would make no ~tibsttt~4ve change w atsoever ifl t~h~ provisiozis ofthelaws. ~ ~ For example, under the D~a~rtment~ of ~Tous~ a~ d Urban De~elopment Act, all functions and powers of the D~p~tment ai~é e~ ed in the ~ecret~ir~V of the Department. This title Qf the bi~l w~uld thei~e i~ change the titles Housing and Home Finance Administrator, PuI~lic Ho'us~ mmlssioner, and the Fed- eral Housing Oommissioner, wherever tbe~r app~ r ~ the Federal law~,, to the Secretary of Housing anç~ Urban Dei~elopmenL 14 ewise, the tctin ~iousing and Home Finance Ageircy wottid be ~ha±iged t tb Depn~tm~iit of Ho~1sing and Urban Development. ` PAGENO="0074" Worce~ter, Mass. Wins1~öi4-Sa1~th, N.C. 1~idgej~ort, Qoiin. Mth~ne~1is, Minn. A1b~jprque, N. M~. Werré*~vi1Ie Heights, Olfló Fk1~a~, N.Y. Oart~t,. NJ. Lonts~i1le, Ky. Denver, Cole. Palatka, Fla. Scranton, Pa, Knoxville, Penn. ~avaunah, Ga. New Orleans, La. Omaha, Nebr. :Pens*cola, Fla. WhiliePlalns, N.Y. New4~rk, NJ. Kuntaville, Ala. ThL$ferd, Coma. San jAntonio, Tex. St. ~ Mo. Parma, Ohio Charleston, W. Va. Ottumwa, Iowa Seattle, Wash. Detroit, Mich. New maven, Conn. O*laud, Calif. X4~t1e Rock, Ark. N4rth Little Rock, Ark. ~1jlladephia, Pa. O1~attanooga, Penn. Norfolk, Va. Washington, D.C. 13o,ston, Mass. ~Oliar1otte, N.C. Olneinnati, Ohio I Las Oruces, N, Mex. I ~ort Pierce,33'la. :1 waterbury, Conn, I: ~an Francisco, Calif. F Taunton, Mass. ~ Trenton, N.J. ! Cleveland, Ohio. Los Angeles, Calif. Chester, Pa. Ypsilanti, Mich. Mount Vernon, N.Y. Richmond, Va. Tacoma, Wash. New York Olty Chicago, IlL Kansas City, Mo. Baltimore, Md. Milwaukee, Wis. Pittsburgh, Pa. Nashville, Penn. Honoiul~, Hawaii Bangor, MaIne Florence, Ala. 0.11 CIty, Pa. Easton, Pa. Johnson City, Tenn. Saginaw, Mich. Frankfort, Ky. Freanc, Calif. Hobokezi, N.J. Fort Worth, Pex. Stamford, Conn. Hudson, N.Y. West Haven, Coma. 68 DE~ONSTEATION CITIES AND . tIBAN DEVELOPMENT Mr. BAiu~rr. Thank you for your *ry fine statement, Mr. Secre~ tary. It is our understanding that initially the President's de onstra.. tion cities proposal contemplates participation of approxim tely 60 to 70 cities~ and towns of Various si~.. I understand also t at you have stated already that some 50 citi~s which have asked to be con- sidered asTeligible for partieij~ation when the program is en eted. I wonder ifthis is correct, ~id if so, w4muid you please supply ~he corn- mittee wish a list of the ~0 or so citi$ which have already i~ridicated their keeniinterest in your ~epartrnentJ? I Secretary WEAVER. I do not know ~bout the exacit numberl. I have not counted them. But it seems to rn~ that it was many. I ifriagine it will cOme up to more than 50, thoug~i. Without counting 1/ felt that there was a larger number. I would be delighted to give yo~ a list of the cities which have indi~athd an interest both in writing an~~l by word of mouth. Every mayor I have talked to has not been hesit~,nt to sug- gest thatj his city is the ideal city for this particular program~ We will be happ~ to supply that for the rocor~1. I Mr. j~nnsrrr. But you have, I anj quite sure, from those fwho asked to be cotisidered to participate, s~4 some dedicated intere t? Secretary WEAVER. Oh, dcfIniteiy~ (The information referred to follfrws:) The cities on this list have lnd1cat~d their interest In the d monstration cities proposal through the mayor diredbly, a Member of Congress or via some other city official: I / / PAGENO="0075" \\\ \ DEVELOPMi~NT 69 PAGENO="0076" 70 DEMONSTRATION CITIES AND ~U1~BAN DEVELOPMENT perhaps, under HTJTD or not, that went to the city demonstration pro- gram in the first place. I-low can local control be talked about when 1;he President himself has spelled out tI~at this will be circumscribed? Secretary; TJ~AV1~R. It is not circums*ibe-d, sir. The whole activity which is carried out in the dernonst$tion city program will result from ~t program. The program will l~e developed by the locality be- fore there is a Federal coordinator iji the picture. This program, which ~vili be planned with a 9O-pei~ent Federal payment, will be the basis on which the demonstratioii grant money, or the supple- mental money, will become availabM to the locality. The locality then will have made a commitment to carry out a program to achieve certain results. It will then say how it will achieve these results. The Federal coordinator will be there simply to see that instead of having t~P get these suppl8mental ~unds from five or six Federal sources, it will funnel through one so4rce. What those funds are spent for is determined by the local goveri~nent in accordance with the plan ~tnd the program the local governm~nt ha~ devised. They make the (determination. . The Federal coordjhator does not make the determi- nation of what these funds are spent for. And the law specifically says that they can `be spent for any purpose which is consistent with the program that they have developed. They cannot be spent for things that are inconsistent with the program or not included in it. Mr. WIDNALL. ~ Your authority would rest in the Federal coordi- nator fbi,final approval of supple~iental funds as they came in from the vaifious agencies ; is that not sot? None of the agencies would pro- vide th~ funds unless the Federal ~oordinator so certified? Secretary WEAVER. No other agency provides any of these supple- mental funds. These funds are pfovided by the Department of Hous- ing and Urban Development on ~he basis of the amounts of the non- Federal contribution to certain existing grant-in-aid programs. This amount wifl be certified by the various agencies of the Federal Gov- er,nment that administer these programs. The Secretary of I-lousing and Vrban Development will confer with and discuss with all of the cther Secretaries and heads of' agencies which administer existing grai~t-in-aid programs which ar4 part of a city's program. The calcu- Iati(~n of the amount of the sup~1emental funds available to a city be- cause of non-Federaj contribul4ons to these existing grant programs becomes a responsibility of IT~D, and the payment of these supple- mental funds becomes the res~ônsibility of ITTJD. Mr. WIDNAu~. tinder the de1~nition of a city demonstration agency, do you mean by local governing body the local elected governing body? ~ ecretary WEAVER. I do. Mr. WIDNALL. Would you have any objection if we added the word "e~ected" in the bill ? ~Secretary WEAVER. No. I think we have it in several places. I 4:16 not think this ~ould cause/~y difficulty. Mr. WIUNALL. I bring thi~ up because ~n 1964 the minority sug- gested a direct tie between the local public agency and local elected officials. 4t that time we re~eived a letter from you in opposition to the idea. Secretary. WEAVER. I beg your pardon? Mr. WIDNALL. I would not read your comment at this time, but I would like to place in the record this portion, Mr. Chairman. Secretary WEAVEI~. I didn't hear what the context of that was. I I PAGENO="0077" DEMONST~ATIO* thTIE~ URBAN DEVELOPMENT . 71 Mr. WIDNAr~. The R~pub1ie~n in nority in our 1964 housing bill suggested a direct tie-in between\t e ocal public agency andthe local elected officials. Yo~ wi~ote the \c it~ ittee at the time in `oppositioi~ to the id~a. \ ~ ~ ~ Secretary WEAVER. Ye~. I thi~ t e dU~erence is between a speciaT~ purpose activity, as co1~t~ast~ed t~ a omprehensive. activity. Obvi-~- ously, if you are going to\ha~e a ~oo~ inated"compr~bensive activity, it is going to have to have ~dityw~ ~ onct1r~ñ~e, and it is going to have to be related to an ~l~cted bo~1 . I think the activities are quite difFerent. , But we are per~ectly w~l in ~ to accept the princij~1e in this program. ~ \ ~ Mr. WIDNALL. Mr. Chaiiiman, I ~ ul 1ik~ to have permissiqu to put it in the record. ~ ~ ~ Mr. BArnu~rr~ Wit1~LQUt ~1~jec~iou.\ ~ ~ ~ ~ (The document ref~rr~d tp b~ Mi~ I ~nail ~s as follows :) ~ ~ ` ~ ~ ~ tFr~rn theCongre~ion~1 Re4r ; ~: r. ~, ~ p~ 4a69] , ~ . . (The following Is an ex~e~pt fro~n a ~et ~ addressed to Ohairman Patman by Dr. Weaver in aii~wer to t]~e chairn~t `~ eqt~est foi~ agency comment * on HR. 9771, 88th Congre~, aiiom~iibiis ho~ ng bill, introduce4 by Oc~ngressw~n Widnall.) \ . ~ "Section 307. DefinitIon o1~ iocai\pni4ic ag~ric~: "This section would amend th~ deftniti~m ii~ sectioi~ 110(h) of, the Hoüalng Act of 1949, of a `local public a~enc~V' qu~i e~L to carry on an urban renewal project. Under present law, a prpject ma~ e arriod ~ On no~ only by a: State, county or municipality but also ~y ~ny Ot e~ `gQvGfl~ment~1 entity ov public body,' so long as it is ~authorized'~ (ui~ider ~t $ ~nd local law) to carry on the project. The amendment, would l~mit eligi~i it~ o~ other governmental entitles and public bodies only to those act~ng as ag~e ts ~ or State or local governments. "The Housing Agency believes t1~at 1~his p~o ø~ d aineMinent, would unjusti~- ably interfere with the right of S~atee and\ 1 o~ itiOs to decide for themselves their proper relationship to local publ~c ag~i e~ Olose coordination between local public agencies and elected local govei~ ~its Is always desfrable. Iio~w.. ever, it would appear that there is\ no 1mpe~i ~ eed which would justify the proposed detailed intercession by t~ie ~eder~ I~ erument in these :State-local rela~tionshlps. Under section 1O2(d~ of the ~I i~s ng Act of 194~, it is already necessary, as a condition to obtainin\g ai~ adv~nce f funds for survey and plan- ning, that `the governing body of ~he ~Iocai~t ft~ olved has by resolution or ordinance approved the undertaking of ~ucb ~ v~ s and 1~lans and the submis- sion by the local agency of an appitc4tion for ~ ~ c]~ Uvance of funds.' ~ ~ "Also, under ~ectlon 105(a) , the g~ver~in~ ~o y f the 1o~ality m~ist approve the urban renewal plan before the ~oca~ pul4l ~ a ency ~an obtain a Federal loan or grant contract i~or the proje~t. Fina ~ , I e local p~iblic~ agency must almost invariably obtain~ the coneurr~nce of t e l~c 1 governh~g body, in ~ order to obtain financing for the local share bf the pr j ct.' Mr. WIDNALL. Does this legisli~tio~a m ~t i~ at if the Administrator deems it desirable to provide a city demo tr~ ion agency with a Fed- eral plan for a Federal administr~to~, he iii do so ~ . ~ * Secretary WEAvr~. No. It means if Ii &ty requests and if the Federal agency has the bodies anc~ th~ res rc s available, it will meet the requests of `the city. It does not mea l~ t we are going to seud this ` technical assistance in, for ~wo' rea o $~ We would' not have enough if we wanted `to, and in the secOnd ~ c~é we would not want to. Mr. WIDNALL. You are going to pr~vid ir~ `ct technical assistance instead of money to hire local emj~IO~ees `~ ~ ivate consultants~ are vounot? ~ ` ~ Secret~try W~v~in. If the city requires it ~ I we have the resources we will make technical assistance of4iany 4.~? ,`~ ~ ~ ~1 ~ to it. ~ I would PAGENO="0078" 72 DEMIbNSTRATJON CITIES AND IJ/RI3AN DEVELOPMENT DOt Want to be categoricalabout what t1~se types will be now. t will vary, I am sure, from city to city. Mr WIDNALL This could be in directtcompetition with priva e plan-j ~ ~ ning, could it not? ~ Seeret~ry WEAVER. I do not think so. I think you would ave to have a private planner to develop the phrnnmg or the city m4ght de cide to hire its own people. We will not send in a team of t~chtheal people who will actually do the planni~ng. They might be con~sultants to kelp to ~et the plan done, but the j~1an would have to be d~veloped by the cit4T out of j1-~s resource or .an~ resources that it gets from us. The t~h~*icians from Washington 4~d the agency will no~ do the planning. Mr. BAiuu~r. Mrs. Sullivan ? ~ ~ Mrs. `StTLLIVAN. Thankyou, Mr. Cl~airman. Mr. Secretary, we think you will ~gree that you ~ sent us two very challenging new proposals : ( 1) To g~ive a tremendous stimul s to sup- plemental grants on top of existing grants, and to the reb ilding or iehabilitation of large areas of our city , and (2) , a second b 11 using a similar rnechanism~ to stimulate anl give incentive to orde ly metro- politan growth. I thiuk we have much `to learn y4~t about the details and the actual way iI~ which this program would pork. But I do have o e question that comes immediately to mind, an~t that is whether a give city could ~ ~ qualify for both programs at the s~me time, in other word , couid city x have both a demonstration city program and a progra for metro- politan development grants? Secretary WEAVER. I think the answer woul4 have to e "Yes and no." It would have to be "Yes" In the sense that a give city might participate . in both activities, but it would not always e the direct r~c~pi~iit~ or the local sponsor in 1~th. It would obviousl be a direct recipient in the demonstration c4tes program But the etropohtan develOpment grants would go tof the city in some cases and in some case~to a special-purpose agencyfof government or to a ad hoc corn- mittee or a State body or some ~ther body other than o larger than the city itself. But the city wouftd participate in and be efit from the metropolitan grant although it M~ould not always be tl e agency that ~ would develop the program ai~d apply for it to th Department. Projects or activities assisted under the demonstration ities program c4tdd not receivemetropohtan development grants. ~ ~ ~ .`. ` TS. SULLIVAN. Secretary Br~nstein, last Thursday, I was pleased to introduce a bill,. H.R. 13Q6~3, which hopefully for the first time wo~ild provide a financing mecijanism to encourage bon fide nonprofit or~anizatioflS to rehabilitate ~xisting houses for sale to low-income pr~spe4~tiVe homeowners at th~ very low 3-percent mt rest rate made possible under~ section 221(d)f(3) , the low-market-i erest-rate pro~ . gram. May I have it inserted in the record at this oint? . (The materIal referred to follows :) ~ . [HR. 13~3, 89th Cong., 2d sess.1 A. BILL To &mend the National Housjng .A~ct to authorize a limited xperimental program ~ of Insurance for mortgages exeeute~1 by nonprofit organizations t finance the purchase ~ and rehabilitation of detertoratin& or substandard housing for s~ibsequent sale to low- income purchasers j I Be it e'eaeteô' by f/se Fienate an* liIo!use of' Reprose~ta~tives ~f the United States of America i~n Co's grass assesnble~i, That section 221 of the national Housing Act Is amended by adding at the en~ thereof the following ne subsection PAGENO="0079" \~~\ DEMONSTRATION CITIES "(1) (fl In ~tion. PAGENO="0080" 74 lYE M~NSThAPION CITIES AND U BAN DEVELOPMENT allocable to the dwelling covered by such indikidual mortgage. Until all of the indIvidual dwellings in the propeiity cOvered b~ the principal mortgage ha e been selU, the mortgagor shall hold and operate thedwellings remaining unsol at any given ttme ~ thongh they ceñ~tithted rental utilts hi a project covered by a mort- gage itisured*ndersnbsectión (d) (3) . "(E) Up~flthe sale under tlit~ paragraph ~f all of the individual Uwe lings in the property ~ov~ered by the principal mortgage, such mortgage shall be li uidated and carkceled4 and wholl~eC4d~b~%i the thdifvtdttal mortgages insured u der this paragraph~. ~ ~ ~ I ~ " (F)~ An~dwe1llng ~o1d to ~tMc-h~eoni~pfreliaser and covered by a ortgage insured und~r thIs paragritph ~y not be t*ari~sfe~rred (prk~r to the m turity of such mortgage) to any nth~r ~persin, except to ~ another lew-income urchaser approved fc~rpurposes of this p~kragraph by~d~e Secretary." Sno. 2. (~k) Section 221(g) (1) of the. N&tion.al flousing Act Is a ended by Inserting after "paragraph (2) of subsection (d) of this section" the ~ ollowing: `br paràgr~h (5) of subsectien (i) of this *ection". (b) Section 221 (g) (2) of stich Act is ai~ended by inserting after ` paragraph (3Ybi, ~ (4~) ~f subsection (d) of this seet1~it" the following : "or par graph (1) of ~b~e~ti~n. (1) of thissectt~'~ ~ I . ~ ~t~r~ss release, $eb. 24, 196~] MRS. SULtiVAN INTRODUOZS l~IIL To 1~lN~4E Low-INCOME F~u~rtn~s o PURaEIASE I R~ARIth~rED ~ liousm~ ~ AT 3-1~kRcF~Nr 1~AT5 Congresswoman Leonor K. Sullivan, D~mocrat, of Missouri, ranki g member of the i~ou~iñg Subeounnittee of the flous~.Coinmittee on Banking a ci Currency~ today introduced a bill for a new type M experimental Federal ho sing aid far l~w-in~rne famillea-enabling them t~ . buy rehahilitated homes at very low mortgage Interest rates. 1~sei~ti'a1 to the aperatión ofher .pro~osal would be the formatlo of nonprofit cotb~n~4ty ~rganiz~ttions w:hiCh would~purthase dilapidated or rupdown proper- t1~s i*~Jdeteriorathig neighborhoods an~l rehabilitate. them for regale to eligible low4fl~ame purchasers. Such a prog~m Is already being operated on a smalL scale ~i ~t. Louis by the ~ieeut~mnialJ4~iivie Impro~emen:t `Corp., ~aunched origi- nal1~nb~evéMl clergyinei~ aided by-c1vfr~'minded businessmen. / it~T~ ifl an effort to find an éff~4~ve ~levice for Federal loa~is or grants to help the St. Louis experimental proj~et that the Congresswoma~ developed the detaii~ of the bill she introdueedtoday~ . / T~idertt, ancaiprofit organization ci~ui~d horrow Federal funds at only 3 percent inté~est in order to purchase and rehabilitate old housing, then jell it to eligible fainl~ies which could also enjoy the same low-interest mort~age rate. The individual family mortgages would The nontransferable except/to `another low~ la&~ne family which m~t income qua1lficstiom~. G~nera1ly, income eligibility for t1i~e low-interest mortgages u~der `the Sullivan bill ~wi~aild be the same as `those `spell~d out in last year's Housln~ Act for families eligftfie for Federal rept subsidies. I ` / : "JEnstead of just gicdng a subsid&~ `to a' family so it can affor~l `to rent a decent 1rd~se~or i~partYsent,"1~he Oongress~i~nrnan said, "my `bill would/enable highly mo~ ti~t*tted families to bny their own 1~omes-for only $200 as an initial payment to .co~er closing fees or other costs, a~id~at a monthly mortgage r~ayment they could affGrd. They would eventually o~ their homes outright." / `Mrs. Sullivan met last Decembe~'lri St. Louis with officials ~f the Bicentennial Ofric Tmprovement Corp. and wish representatives of other /civic organizations' in the community, to dL~cuss the'kiTld `of programs which n~ight be undertaken un~ler the legislation she was plai~ilng to introduce. Today, ~he said her bill will be taken up along with administr~tion proposals to be consid~red by the Housing' ~ubeammIttee at he~'rings beg1nn~xig next week. / I' "The two priests' who initiate~i j~he rehabilitatiop and s~le of housing in St. ~ *~Ouis f~r low-income families, JPather John Shocklee an~l Father Joseph M., ~`Ohler, started soi~ieth1ng new ~rhich' has captured the im~ginat1on of the corn- . ~nun1ty," Mrs. Sullivan declaredj "It is also now being trie~ in'other cities. The idea is to giye the low-income .1~~siiy a real stake in its o~vn housing-not as a tenant but as a p~irchaserb Pet, `is "the best approach y~t in trying to rescue neIghborhoods from' blight ` Without Government low-in~erest loans, however,. ~ the mOr1~age cost's would be t~bo high for the families w~ are trying to reach. But with a 3-percent mortgage~loan, the monthly paymenth can be held within a~ PAGENO="0081" DEMONSTRATIQN CITI S ~ D URBAN DEVELOPMENT 75 range which families e1igib~e f~r ~,en\b uI~ ithes can a~tua1iy afford~ This way, we save the Governtheiit the cbs't ~ th~ ubs~c1y payment, which would be far more than the cost to the OovernI~kent oftI~e e low-interest loans." ~ Under the Sullivan bill, a\ $20 mull re olving fund would be set aside initially out of Federal National Mo~tgage A ~ ci~ ion asset~ for the special nonprofit fix- up-and-sell housing leans. The loan o hi be insured by the Federal Housing Administration (FUA) anc~ wQuld SM~ iced by private mortgage companies. Only properties located ~n areas ó ri ighborhoods "sufficiently stable" and with adequate facilities to "~upport 1 n ~t na yalue~" or it~ neighborhoods which could be brQught ttp t~ the ~pr~mise ` f st~tble en~ct1rotithent through such re- haidlitation would b~eligibl~ foi~jnc1 ~ oz~ `n the program ~et out in the Sulliva4 bilL \ ~ ~ ~ ~ ~ . Mrs. Sm~uvA~. ~i1~L~Vv~ be~ ~ b Id gon this for some time. This bill represents the fruit ~ a lot o ôt~ by me; and by religiousleaders and civic-minded busin~s~ repres t~ ~ in St. Louis, by the staff of. the Housing Subcommitt~e, ~nd~ ~ t e technical assistance of people in your agency. I do not prete d th t the bill is perfect in all re- spects, although I think i~ is . in, v , redi1~able shape. And `I realize that you can't speak .ornci~lly for e ~ ~ mitdstratiôn, since there is no Budget Bureau position a~ yet. . t would lIke very much to hear whether, (1) you agr~e i~ith the ~ j~ tiires in ~ the bill ; (2) . whether you think it is ~workable. ~ Ai~d t ~ I would like to ask the agencies officially to study the bil1~ ~ sth it really from A. to Z, to give me any recommended change~ or am ~id ents which n~y be needed to perfect it. . . Could I please have your por4me t c~ it ? ~ Mr. BR0wNSmIN. I dc 1~no~v of y u interest in this subject, Mrs. Sullivan, and I do knew ~f t~ie 1 . ~ It would achieve twci things principally, first, it would ~rovide s 14 hottsiiig for these inipover- ished families in the very lo~i~o ` e gi~ ups. Arid it is aimed ai~o, I know, at large families. ~ ~ ~ ~ôul è~ lt in the upgrading of old housing in some of the area~, the re abil tation of these houses. Cer- tainly I know that the ohj$~th~es a ~ ~ remely laudable. From the standpoint of mechanics it ~ co~ild rl~ ~ yes, I believe that this is possible. \ It does, however, intrOduc~ . a new~ i ensiôn. And this is a s~ib- market interest rate prpgrar~i for s~J s ~ otising. And this is some- thing that we will consider, \bnt it ~i 1 ave to be examined as you have suggested, very closely b7 tl~e ad~±i i~ tration. . . . Mrs.. SULLIVAN. Thank yo~. . I h~ ~ ~ at you can give it a close look and a fast one, because~ I\want t~ a this information while we are still working on the overa11hoüsin~ e~slation. ~ ` Secretary Weaver, wo~1d you des~ i1~e how the Director of the Office of the rederal Coordin4toi~ woi~l ork ? Would it be his job to coordinate only the progran~s of yoi~ D artm.ent that are involved in the demonstration, or would h~e tr± o oordinate H1JT~ activities with those of other department~ and a ~ ~ s ~ Are his proposed pow- ers broad enough to be effectFv~e in th t e ard ? I think you gave a good description to Mr. Widna~l. Secretary WiAvii~n. Well, I 1~hink tha .i the first place, as I said earlier, the Federal Coordinatc~r ~cs~oul ~ o~ appear on the scene until there had been a program. So yot~ wo ~ ~i ire a locaiprogram. lie would sort of be the Federal dpUnterp t the local agency which would be responsible for coor~imtting\ rid carrying out that local program. He would be an e~p~diter. ~ e rst thing that he would . 6O-87S-6~-pt. 1-6 \ PAGENO="0082" 76 DEMONSTRATION CITIES AND UTh~AN DEVELOPMENT do, assuredly, would be to see that the p4~ograms of the Departi~ent of Hot~ngaiid Urban Development, wI~ieh will be the major ~ro- grams both fiuiancially and impactwise, a~e coordinated~ And in] this : respect he would have a counterpart hi tjie regional offices. An~l we are decentrali~zing so that most of the pertinent decisions wou'd be made in the regional offices, where this would be expedited as w~1l as coordinated. ~ I He would also be a person who would be fully versed in the q~era- tions in general of the other Federal programs, fully versed in ~here I ~ the policy and the decisionmakings are~ centered in these programs. He would have direct personal contact ~rith the regional offices ~f the other progr~pns, and would bring together, wherever there wa~ diffi- culty, the v~ious Federal people, not ~n a basis of a fiat, bu~ on a basis of beinig there-being 1~nowledgea1~le, and being available.I Finally, it there were difficulties whei~e the coordination and ~he co- operation-and I think cooperation Is a little better wor~E than coordination, because that is sort of a b~d word-but where th~re was lack of cooperation which resulted in ai~ uncoordinated activity~ in this program, it would be his responsibility to get in touch with m~ or my colleagues in Washington, and our tesponsibility, which ~e have authority to do under the act creating the Department, to et hold Qftiotha~m~ies and to attempt to *ork it out. Sb this *ould be an expediting pro4ess with an actual coor ination authority insofar as the programs of ~his Department are co cerned. Mrs. STJ~EALIVAN. In other words, w1~at you said to Mr. Wi all and are saying to me is that here wouldbe ~ man who would know o whom to go in the Federal Government f~r the necessary infor ation or assistance should the city or the area need this kind of coo eration, and he would function wherever needed and not be assigned any one particular city ? Secretary' WEAVER. Not only to w1~om to go, but to whom to get to it whenever he would get to it. Mr. Bi~nm~vr. Mr. Fino ? Mr. F±NO. Mr. Secretary, before ~ ask. any questions I ju t want to bring tot your attention today's iss4e ~f the Wall Street Journal on page 2, ~*hich is captioned "Johnson program of Aid to Citi , Suburbs Faces Sharp Fight Over Strings A4tached." WASHINGTON.-Congress start& work today on President Johns n's strings- attached offer of cash to cities and ~ sii1~tirbs wanting to fight slu and hap- hazard growth. It's already clear that just about everybody will want the m ney. But a sharp fight is developing over the attached Strings. For example Extra dollars of slum clearance mone~r `would be available to citi s that agree to. shape their new neighborhoods towar~ specified goals, including ~ fight against "segreg~tion of housing by race or incom$.". . . I I, ha~e introduced legislation-3 think you are famili~r with the demQnstration cities bill that 1 l~ave introduced. And /my concern was regarding this coordinator fitle. My bill calls fo~ a Federal information officer instead of a cor4ñiissarlike coordinator. I . . Let me ask you this question. l~o you not think that anl information officer, combined with your T5rban~Information Center, w~uld do a job, a better job, without interfering with local government ~rerogatives? Secretary WEAviui. I can answer your question oniy b objecting to certain assumptions made in it. The first thing is, the F deral coordi- PAGENO="0083" DEMONSTRATTÔN CITI~S\ ~D URBAN DEVELOPMENT I 77 I PAGENO="0084" I 78 DEMO1NSTRATIO~t CITIES AND U1~~~BAN DEVELOPMENT get, you have to have certain results. W~ do not say what the method is. We do not say that you have got to do1our comprehensive planning. It is like building codes. It is not a question of, in the building code, of having to put a 2 by 4 every 12 or 16 inches. You say you have got to have enough 2 by 4's to have a wall that will stand up under certain circumstances-what we call a performa~ace code and performance re- quirements. These musts are not methiods-these musts are not de- tailed deternjiinations-these musts are ~fhat the program must achieve to get the si~pplementa1 grant. And I think it is entirely reasonable,, and certainl~y traditional, where you a* going to give special assist- ance in any program that there shou1~d * be general criteria. These are the general criteria. ~ Mr. FIN0. Isn't there language in your bill that in substance says that a city in order to qualify must have a p]an for social renovation? Secretary WEAVeR. I do not know ` what you mean by that lan- guage. If ~you will read the language, I will be happy to try to inter- pret it. I do not recall that wording. ~ Mr. FINQ. Mr. Secretary, I will ch~fc1~ that and give you the page, because I db not have it ofl~hand. ~ . Mr. BAR~ETr. Mr. Ashley ? * Mr. ASHLEY. Dr. Weaver, while y u are commenting on press ac- counts, there was a front page story I ~ the New York TimeB of Febrii- ary 20 which referred to previously ~disc]osed facts about the plan of the demonstration city program& th~t have emerged from talks. from housing experts in Government in the communities and in the cities themselves. And it goes on. to sa~y, "If their expectations arc cm- rect, the program will aggregate 35O~OOO dwelling units and improve the lives of more than a million resid~nts." And it also indicates that the cities chosen for Federal funds~would fall into three categories, largo cities of more than 500,000 p~sons, intermediate cities of 250 to 5OO,Of~O population, and smaller ~ities of less than 250,000 inhabi- tants. is this the thinking of the ~epartment, Doctor? Secretary WEAVER. Well, it is brdken down even further than that. I think that we are thinking now ~n terms of larger cities, inedimn large cities, sort of medium small cities, and tlieii smaller ities. We contemplate cities of 50,000 and less. Mr. A5nLEY. Would it not be a good idea. Docthr, as ~m addendum to your prepared statement, to furnish the committee with such thought as the Department may hajve with respect to some rather sig- nifican1~ details such as these that hajve appeared? Secr~tary WEAVER. I would be ~lelighted to. I want o point out that w~ have to supply, of course,Jthe general categories. But let me say this, as I tried Ijo say in my statement, I would be happy to document it. We conc~ive of this program a a program which will have widespread geogi~aphic application, aiid iso as much diversification in size of cities as possible. And we conte plate, also, that because of the large number of smaller cities and to us that the largest number of cities that will be involved will be the mailer ones. And the number will vary inver~ely with the size. In other words,, there will be a lesser number of i~rgest., and so on down he scale. Mr. AshLEY. Well, if we can 4ive credence to the sto y in the New York Times, I think it would belwell if your Administ.r Hon and the Department would he specific w~th reference I o the pci us that were covered and which I have alluded! to. .1 PAGENO="0085" DEMQNS~ -~ URBAN (The an &imr PLAN~ Cosr Lr1c1~t~ To flou JonNso~'S P~orósAL ASHINGTON, Febrttary I ~`-~can cities, if a~' appeared. have to ~11ings-~but also' s~ imunity services w sage was wi `somethi: standar A typical `~t~ from 80,000 to ~ted largely program~s PAGENO="0086" U 80 DEMONSTRATION CITIES AND U1~AN DEVELOPMENT units, according to what the experts believe is a reasonable divisIon, 8,O~O are stthstandard that require either re~$acement or ëomplete rehabilitation, and/16,000 are in variau~ ~tages of decay. ~ The major ~o~t in this typical eity~ as it w~ni1d be in all cities, would be the acquisition of blighted buildings. (Under th4~ PresMent~ program, acq isition will ~e carried out by a city agency set up to ~un the. demonstration, usi g pow- ers of eminent domain in much the same wa~ as they are used in the u an re- newal program~) The cost of acquiring 24,000funits in a "typical" large ci y proj- ect wonid be about $140 million. ~ DE~OLIPION COSTS NOTED Based on past experience, an average of.~about ~ one$ourth of the 8,~ ~ 00 sub- standard unjth would require demolition. The cost of demolIshing 2,QOO units would be $2 million, the cost of replacing these with new units would be $24 million. The rest `*f the units, the remaining 6,00&substandard units and the 16,000 in various states of decay, would require vari~this degrees of rehabilitati n costing more than 4~8O.rnifl1on. ` f S To these basic physical costs-about $25Ojnilhlion all told, are then a ded other costs of a ~ocial nature : relocation of neigJthorho~d residents, as nece ary ; ad- ministratiob and planning ; and "commun1~y participation" and social programs such as clay care, em~k~yment and family-~óunseling services. If other community fac1litit~s such as scUools, health centers and no ghborhood recreational centars are Included, as they!i~y well be, the total "s ~1al" costs of the program ~wbuid'amount to roughl~# *OO~1ilibn, thus prodi~ ng a total cost of perhaps $350 million. S S Similar models can be drawn up for cities in the intermediate an low popu- latlon groups. Average costs of the ir~termediate programs arc about $170 million, 1.11 the small city group about $30 *nflhion. ? RESALE FA4~E VITAL The grQss costs of the program can be imputed from these tno~le1s by multiply- ing these average costs by the number o~ cities in each population ategory and then by adding the three categories to~ether. The approximate esult is $5.3 billion Additional costs including tlieL renovation of stores and shops In the area, prOduce a final gross 1~gure of abon~ $5.6 billion. In computing net costs-the next stepj~-the experts have devised resale price low enotigh to allow those who buy th~ upgraded units to charg roots within the reach of lo~-lncome groups. This ~epresents a conscious effor to. avoid the experience of many urban renewal projects, which have often dc red out slum areas o~ily to ~eflll them with housing 1~at rio low-income person an afford. The ~,esa1e tlg~ire generally used by e~perts to achieve these obje lives is $7,000 for rel~ab1litated utdth and $12,000 for $otally new units. S S Th~* assumption is that a $~T,000 u~ilt would produce a rout $60 monthly, whieb~they be~ieise is wit~lun the capa~aty of those earning less han $`~ 000 an y~5 A $12;000unit, they estimate,fr~lIL prith~ee a rent offr m $100 1o $110 a month. I The~e resale figures are then mnlti~1ied, in effect,. by the num er of units in- volve~L in the overall program to re~4eh a : total "recovery" figu e of $3 billion. This is then subtracted from gross c~th of more than $5 billion o bring the net to a level that Mr. Johnson thinks Is manageable by local tre suries and the Federal budget. ~ COMMENTS ON NEW YOEK TIMES ~roirr ON DEMON5TRATI~N ITIES PROoRAM, ~ FEBE*(liY* 20,~ 1986 S T~ie New York Times article of Fjebruary 20, 1966, about th proposed demon- s1~t1eu cities program by Robert ~emple, presents an analysi ~ of a demonstra- tIoI~S cities program under certali~ assumptions that empha ize the costs of ph~vs1cal improvements. Within tl~1s framework it is an inte esting and arith- nietically plausible analysis. The analysis was obviously geared to the $2.3 billion demon tration cities pro. gram cost mentioned by the Presid~nt in his message on the p opösed demonstra- thin cities program. `The $2.3 bllltañ as used in the Times s ory represents the net cost of the program. It appeats from the article that this net cost is derived I I PAGENO="0087" 81 DEMONSTRATION CITIES D URBAN DEVELOPMENT by an assumption that about 24,000 nit would be acquired in a typical large city to be either demolished or rehab lit ted. The costs of acquisition and re- habilitation in the typical large city w aid amount to $250 million. To this would be added $100 million of expe dit res for community facilities, such as schools, health centers, neighborhood an recreational centers, as well as the social cost of the program. For sma ler size cities for the same types of im- provements, smaller amounts would b re uired. For all the cities that would be involved, the costs for these purposes wo ld be about $5.3 billion and additional costs primarily for renovation of com crc al properties, producing a final gross figure of $5.6 billion in the Times analy is. The proceeds from the sales of units that have been rehabilitated would t en be deducted from the gross cost to arrive at an estimated net cost figure of 2.3 billion. It is important to note that the Time an lysis has been built up on the basis of a model for a typical city under ce tan assumptions as to the population and number of dwelling units in the de on tratlon area, and on the assumption that the major part of the cost lnvolv w 11 be for housing improvements and other physical improvements. The so al services cost is not identifiable in dollar terms. In an analysis of this sort, all models ec ssarlly have to be based on certain assumptions as to the arithmetical facto s i volved. The formula and the pur- poses for which supplementary grants w uld become available under HJL 12341 would cause a different focus upon the facto a that may be involved than In the New York Times analysis. The stated purpose of Hit. 12341 is for " eb Ilding slums and blighted areas and for providing public facilities and servi es ecessary to improve the general welfare of the people who live in these are S." The demonstration jungram effort, thus, would be designed to have a co p ehensive and coordinated program of social services to better the lot of the pe p1 in the area, a s well a s to improve the physical conditions in the area. It is I te ded that all available Federal aid programs for both social betterment an p ysical improvements should be utilized to the maximum extent feasible f r ceomplishing these purposes. To induce the cities to undertake such n ffort, they would receive supple- mentary grants equal to 80 percent of the bc 1 share required for all projects or activities which are a part of the demon tration program and financed under existing grant-in-aid programs. These supplementary grant funds could b u ed to (1) assist cities to provide their required share of the cost of projects or activities which are part of the demonstration program and are funded und r e isting Federal grant-in-aid pro- grams, and (2) provide funds to carry out o he . nonfederally assisted, projects or activities (including projects or activiti a f the type eligible for Federal assistance under existing grant-in-aid prog a a) undertaken as part of the demonstration program. In drawing typical city models to analyz pr gram cost in accordance with the bill, therefore, three critical factors are in olved in the calculations : (1) the program cost as based on the local deter in tion of components of the pro- gram and the mix of such components ; (2) th proportion of these program costs that would be borne by expenditures un er ongoing grant-in-aid programs typically expected for a city of a given size : a d (3) the disposition among program components, as determined by the bc I city demonstration agency, of the supplementary grant funds obtained u de the formula provided by the bill. It is in the nature of the program that eac qualifying community will develop an imaginative program predicated upo it particular needs and circum- stances. Cost estimates for any individual c ty cannot be stated definitively In advance because of variations in program co p iients that would occur from locality to locality and because of variations i ~ 1 vel~ of funding that will be available for regular Federal grant-in-aid p og ams ~ in different localities Therefore, given ~ certain assumptions about pr gram components and available present Federal grants-in-aid, w'e can build up es mates of typical situations. We cannot, however, calculate fund allocatioiis un ii the proposals from cities are received. The starting point for an estimate of the progr m cost would be similar to one of the points used in the New York Times a al sis : naniely, a model of a typical large city. The Times' model was a city f 0,000 with a demoi~stration area of 80,000 to 100,000 people, containing 2 ,00 dwelling units, of which ~ 8,000 need to be demolished and 16,000 require so e degree of rehabilitation. PAGENO="0088" I I . 82 DEM~NSTRATION ~ ~T~S AND U~BAN DEVELOPMENT ~ should be iio~ed, however, that jil a city .of 7~OOO .t~ 800,000, the. total n ber of substandard~ units in the entire city is 1ike1~ t~ be between 20,000 and 5,000. Furthermore, ~11 but about 4,000 are likely l~ b~ substandai~1 by ~irt e of a lack of adequate plumbing facilities and the~e~ore amenable to rehabil tation ¶Phe 4,000 or so would be the tOtal number iof ~ dilapidated units in t e city. Therefore, in ;an area of such a city that mi*ht contain about 80,000 r sidents and have 24,000 dwelling units, it is unlikely that all 24,000 would requir either extensive rehabilitation or demolition as the~ Times analysis has assu ed. In fact, if we assume that 16,000 would require Sbme form of rehabilitation anging from major to minor rehabilitation, as the ~imes analysis assumes, ut. also that one-fourth of tAe units in the area or 43~000 i~eed only normal mai tenance and repair, perhaps 2,000 units woui4 have ~ j~e demolished. This w uld sig- nifleantly re4uce the net cost retpiired to de~LWith housing in the area . On the otI~r hand, a signifle~ut1y, larger 4ik~wance ~bould be made f r social services in t~ie area. as well~asjcertain phy~ical improwanents that w uld help achieve the social purp~ses, such as. school*, health ~ centers, and neig borhood centers. The bulk of the f~uiid~ required f~~physical improvements a d social services would be provided under regular~ existing Federal grant-i -aid pro- grams, spch as urban renew~i, public h9using, neighborhood cent ~ grants, economic opportunity programs, ma~pow~r development and trai ing, and numerous others. The . typical amounts of. such Federal program e nditures and the reqpired local matching share can Jyeestimated for a city of a iven size, containing a demonstration area of a giveii. population. ~ Eighty perc nt of the ~ local matc1~ing share of such activities would then determine the pot ntial sup~ plementar~ grant entitlement for the demoz~stration program in that cit For a ci~:y of between 700,000 and 800,qOO, with about 24,000 fam ies in the demonstration area, the supp~emeutary gijint entitlement for the de onstration program i*L that city might ajnount to auJestimated $15 to $20 mull n per year or $75 to~100 iniiion.over 5 yea~. The t4ta1pr~ram activities, mci ding those under the regular Federal grautiin-aid p~4ograrns as well as those s pported by the supph~mentary grant funds, might au~ount to as much as $75 mu ion a year, ~ or $37Srnillion. over a 5-year period. O~ jhe basis of such estimates ~for 60 to 70 cities of different sizes, it is contemplated~hat $2.3 billion in supplem~ntary grant funds would be required over a 6-year de~uonstration program perio4, of which 5 years would constitute the active operating period after the first ~rear of pro- paring the plan. The total program impact, including regular Fed*al grant-in- ~ aid pr~g~am expenditures and State, lo~al, and private expenditur~s in all the demonst~aUan areas could rise to a~ ~t~gregate ~totai of about $1~ billion over the 5-~et~r period. ~ 4 ~ I All si~e categories of citi~a have been $I~ought about instead of th~ three shown ~ in th6 New York Times story. flemoz$j~ation cities could range in size from 1 millk~n or more to clti~s of less th$i 50,000. The largest- nuipber of cities would i3e in the smallest size eategRr~,~; ~A. goodgeographical disti~ibution in all parts of the country would also be soug~it. ~ ~ ~ In summary, the New York Tin~es stbry was an attempt to exp am how a net cost of $2.3 billion would accommodate. a physical Improvemen program. It was a logical but lijniled explanation $f a city demonstration pro ram. The estimate that has been presented herein, based on the pr visions of the bill, is Indicative of bow the figure of? $2.3 billion was arrived a . As the esti- mate, related to the bill indicates, the$ will be a great deal of ±1 xibility in the sizes df cities and types of activities *ndertaken under the demo stration cities progr~m. ~ ~ ~ Th~ bill also contemplates that. (a~ tb~e President stated in is message on efty 4emonstration programs) "the. 4omplete array of all avail ble grants and urbai4 aids in the fields of housing, *newal, transportation, ed cation, welfare, economic opportunity, and related ~ograms" will be availabl under existing ~ Federal programs to cope with proI~lems in the demonstratlo area. Finally, the bill definitely contemplates a broader program scope with m ch more empha- sis on social services than was conthmplated in the New York Times example. Mr. ASHLEY. Secondly, on page 2 of your stat~men you say that you will make it possible to treat the human needs 0 people in the slums, and at the same time the physical rehabilitation will be carried oat. * We do have in thi~ program 4wo rather distinct elem nts, as I under- stakid it. One is the capital~ rovement rehabilitatio , and the other PAGENO="0089" DEMONSTRATION CITIE AN URBAN DEVELOPMENT 83 is the human needs facto*. `lthes re uite differ~tit. Capital improve~ ments can be paid for, and then c st~ ute a conti~atdng cost. This can~ not be said, as I se~ it, w~er~ the i cz' ased input of socal services to a particular area are involved. A ~ th se meant to be continuing costs to the Federal Governm~t ? ~ Secretary W~v~it W~l1, i thi ~ er~ are two categories of these. In the first place, thete are thos o~ s whith are now provided for by grant-in-aid prcgram~ in whi th Federal Government makes a partial grant. These ~ are a~ yo ~ w, over th~ various terms, dé- pending upon the nature of ~he e ~ es. Obviously these would be continuing. ~ ~ ~ ~ . Secondly~ there would b~ those s ~ iè s which would have to be aug~ mented during the period of this p r i~ lar prøpo~a~i. ~ Here you would have the supplemental mo4ey b~in ~ over a peric~d of time. ~ Mr. ASHLEY. As far as the soc ~ ~ rvI~es ar~ concerned, we are now primarily being paid by the 1 ~c~4 community, this~ would be a contribution of almost eve~y ~ov q~ for the duration of the pro- gram in the 6 years, is that ~or*e~t? ~ Secretary WEAVER. Well~ the~ pr ~ would hare to be ~ffected in the sense of being subst~nti~lly ~ r~i leted froni the physical side of it within a period of 5 or 6 years. 1~ question of how the services would be financed and for l~ow lon , w uldhave t~, I am afraid, be ha~ndled on a caserby-case basis. The is othing in the law that would limit the period. Some m~ht go ~ ~ d the period which we call the completion of the proj~,t. Be ~ s~ this is completion more or less in its physical rather tl~an its ~ h~ aspects. Obviously, there would be a problem here. It ~ould noi~ o ~d in.finiti~im. Mr. ASHLEY. Preci~eIy. Vn~er t~ . EO program we have the samekind of a problea~t, wher~ se~vi~ ~ provided, where funding is on an annual basis, and the ci~ieseng~ `i~ in th~ program find it dif- ficult to sustain services th~t ~iave\ ~ e ixdtiated. Is there this problem ? ~ ~ Secretary WT~AITETt. There i~ this pi~ l~ . But I don't think it is quite as severe here, because ii~ th~ firrn ii e we are talking about an appropriation over a 5.~year pe~io4 wh~ yes you more than just the annual appropriation problem. Secondly, I think there is t~he fact ~ at some of these programs, particularly some of these soci~i progr s, if they are successful will have less of a need after the 5~y~ar ~eri d. ~ f you are training people, for example, who are not yet ~mployab e, ver a 5-year period you should get over the bulk of that, andy ~ ~ uld nbt have to continue to spend as much money after ~ years ~ t at as you did during the first 5 years. Mr. ASHLEY. Doctor, hare yo~t had a han to examine the amend- ments that s~verai of us have wor~ed out Sceretary Wi~Avii~R. Yes, I have. Mr. A5iLEY. I wonder if ~ yoi~ would b re to comment on adding sOme additional criteria for ~ligibiiity. l~ amendment addresses itself to two additional criteria. ~Fii~st, t1~ t ~ e sections of the neigh- borhood in question be sub~ectto higher ~ io ty economic and social pressures, such as population density, crli~n r te, public welfare par- ticipation, delinquency ~te, unen'~p1Qyme~ , 0 ucat~onal ~vel, health. and disease characteristics, and de~i~e~ of ~u st ndard and dilapidated PAGENO="0090" 84 DEMONSTRATION CITIES AND U ~ AN DEVELOPMENT housing, and second that there is in effec~ in such section or neig bor- hood a workable program such as is currently a requirement f r re- newal funds ? Secretary WEAVER. Well, as far as the first is concerned, I hink that we are in complete agreement as tp the objective. The b 11 re- quires that there be an impact on slums~ and blighted areas, an that there be an impact on low-income famili4s. In order to qualify f r this prQgra,m yQ~1 would have to deal with a~i$s which have high pri rities according to the criteria which you h~we described. The di culty here I think is this, if you establish a fl~iigh-priority system it might require the city to select, as between s~veral areas, that one tl~at had the highest index on these criteria rather than meeting them in general. Mr. ASHLEY. Why don't you want 1~o do that anyway, Doctor ~? Secretary WE~LVER. Well, I think there is a problem here, sir. It may well be that the first area that y~u select for this progr~m may not be the Worst area~ It has got to b~ a bad area. It has got to have all the cri1~eria that you mentioned-4- Mr. Asitu~r. But you have got a yefr's planning. Secretaity WEAVER. But my point i~ this, that it may wel be that you not only have a question of teai~hig that area down w ere it is hadand rehabilitating it where it is hot too bad, but you w uld also have the possibility of getting yourf~first proposal, your de onstra- tion proposal, a successful one. Andit may be that the area that will lend itself to the initial success while you are learning an experi- menting may not be the worst area. It has got to be a ~ ad area. And I think you should have thatjflexibility in order to ~make the prograrni work. ~ I As to/the workable program, th4 workable program co~icept is a citywide concept. The elements infthe workable program Icannot be segmented. But in order for any ~city to qualify for thi~ it would have to be making use of some of th~ programs, such as low-brent hous- ing or urban renewal which already require a workable prç~gram. So this -will be accomplished by the e~isting situation and wl~ile I agree with the purpose of the amendme*t, it is really not neces~ary. Mr. BA~iu~r. Mrs. Dwyer? ~ ~ I Mrs. Dwiyi~ii. Mr. Chairman, Mr. Secretar~y, both y~u and the President. as well as other top adi~iinistrative officials cori~erned with urban ~affairs have frequently emh~hasized the essential ç~haracter of an effit~ient mass transit system a~ .a part of a healthy i~etropolitan area. * Mr. Secretary, do you exp~et to retain jurisdictiq~n over your Department's present mass transportation program undt~r the Presi- dent's proposed Department of 17i~tnsportation ? I Secretary WEAVER. I am afra,ikl I won't make that d~cision, but I think that decision will be indicathd, or at least the line oflthat decision will be indicated sometime this week when the President~s message on transportation comes up to the Oongress. I ~ Mrs. Dwyi~R. But could that i~iean that you lose juris~iction? Se~eretary WEAVER. I think y~u will have to wait until the message corn~s up. Mirs. DWYER. Thank you. M~r. Secretary, I understand .R. 12841 carries aut orization for two'programs over a 6-year pe iod. How much are .R. 12946 and H.R. 13064 going to cost the F eral taxpayer? PAGENO="0091" informatio~~ PROPOSED HOUScENG ANL~ UI~BAr~ Swm'nu~ry of prourp~~n aut DEMONSTRATION to address PAGENO="0092" 86 DEMONSTRATION CITIES AND URBAN DEVELOPMENT gram, it wo~i1d go to the Assistant Secrk~tary for housing and urban assistance, is that correct ? ~ J ~ ~ Secretary !WEAvER. Well, actually * wi~at will happen under the re- organization plan is that we will decent$lize to a new degree-and I think somewhat unique degree-the d4cisionmaking in the Depart- ment. And that particular urban reii~wal project would go to the~ regional office, where the regional admhiistrator would be authorized under our reorganization plan that was announced last Friday to make a decision as to whether or not this was eligible, and whether o not it would get Federal financing. And ui~less there were probie s of a peculiar nature, and unless there was ~n interpretation of poVcy, this decision w9uld be made at the local 1e~el, a recommendation f orn th~ regional office would be made to Wasl~ington, and the annou cement of it would be made to Washington. Jt.would not be process d again in the headquarters. This, however,1 if there were proble which required it being escalated, would conIe under the Assistant ecretary for Renewal and Housing Assistance. Mr. MOORIIEAD. If our county had a problem that had to be esca- lated, it would be escalated to the Assi~tant Secretary for Met opolitan Development, is that correct? Secretary WEAVER. In most instances, yes. It is awful] hard to make these absolute tight compartm~nts. Mr. MGORHEAD. But if w~ came to ~ou with a four-county programs and agai~n it had to be escalated, itj would then go to the Assistant Secretary for Demonstrations and. Jntergovernmental Rel tions? Secretary WEAVER. No ; it would ~ô to the Assistant Sec etary for Metropolitan Development. ~ I Mr. MOORHEAD. Mr. Secretary, ~n page 21 of your tes irnony, `in describing private enterprise working with public housi g author- ities, you say that "This results in costs substantially lrnv than can be achieved when the authorities plan and construct t e housing themselves." Why is this ? Secretary WEAVER. Well, it is be~ause of several circumstances. In the first place, the overhead cost befrsI~nes greater in a public undertak- ing. ha the second place, all of tl4e restrictions that are placed upon contract awards, competitive bidqing, and all of this other type of thing that are involved in a pub1~ic agency becoming the contractor, become higher. And many of the~fees that are charges become greater where the Federal or a local gdvernrnent is concerned. Also, the Federal Government has a great deal more statutory and regulatory inspection and protective devices which are not necessary in a private approach. If a private building meets the specifications, then this is not a problem. If it does not ~neet the specifications, you don't buy it. II a private company prodi~es the products and ~oes not meet the specifications, it wastes its ~noney and not that of the Federal Government. I Mr. MOORHEAD; Mr. Ashley a~ked you to comment on one of the four amendments proposed. I ~ironder if you could care to comment on the other three. Secretary WEAVER. Surely. I think if you will identify them I will take them. Mr. MOORHEAD. Let's start with No. 4, the program for research, development, and demonstratio~n of new systems of u ban transport. PAGENO="0093" 87 D~MONSTRATIO~ CtTIE . AN URBAN DEVELOPMENT Secretary WEAVER. W~ h~ve i~o ob ection to th~QbjectiVes of any of these ~ amendments. We do que~t on sometimes i$et~er or not they would he the best method of aohi~v n~ a result. ~ One of the things that has st$c ~ e in the ma~~ransit. field is the fact thatthe real problen~ here is ~ t t e great~ excitLr~g~ breakthroughs which are going. to oome~or even\ ~ ~ w system whid~i is goingto re- vitalize the way everybocjy i~'iove~, as important as they may be over the long run. But the re~1 p~obl ~ i~, as it is in hcrnsing construction, and as it is in urban des~elopme t n~ d urban renewal, to get these various new thchnologiGal ~mp~n *t~ ofwhiçh .w~ have a large num- ber, into ,a system so that *ill wor ii getsome consumer acceptance of them. ~ ~ \ ~ . L~t me illustrate. We l~v~ a d~ ~ ~ strati~n project in California which involves a n~w type of ~uas~ t ~ sit ~yste*i with the Bay Area Bapid Transit Author~ty.~ : A~id i~ ~\ the problen~ was i~ot one ~ of getting a better electric n~tor~ a b tt~ `typ~ qf ~ a better type of suspension, or a system of aut ~ ~4Qn, ~but o~ putting all these together. * And the first ~hi~ig $ve.. ~ ~o ered was that b and behold, what nobody had contempla~ed~ you d o get a ditFerent size of track, a wider one or ~rrow~r one~ I ~op? ix~ which. Sopu~tting the compon~nt~ to~eth ~ a~ trying tl~n out and seeing if they can be integrated is w~e~ I t i 1~ he big need ~S? Secondly, assuming that ~pu wa t 1o do what is proposed here, wbioj~ is basic. re~earch-.~and\I h~y~ o jectiort to it~~-then T would . say that the 2-year lin~it ~s I\ re~all ~t , ~ t ou have ~ i~ too tight. It is going to be a much longer term aff I . think t1~prio$t~ies ought to be in piiiting it together.$th~r~.th ~ e grea~hi~e~kthroughs, but I am perfectly willing to ha$ both i e ~n get them. Mr. MOORHEAD. Do .1 unders~and th ~ ~ ó would be willing to accept this proposed amendm~iit, is tl~at ~orr ~ , s r ~ Secretary WJ~AVER. I. would\say tb. t ~ don't have any objection to this proposed amendment ~s to its t~ ~se and use.' If there is a question between this am~nd~ne1~ta tl~ type of amendment that would dc th~ system' approacl~, *~ w , ~ say the ~ysi~ern approach SllQl4d have higher priority. 1~Te *oul ` ot want this'to'knock out the `dthe~. ` \ ` Mr. BARTRETh Th~ time of th~ge~itle ` ` as expfred. , I think the Secretary can ai~swèr t ~ qi~ stions' on t3i~ other two amendments this afternoon,' Mr~ ]~t~orh ` ci. * ` Mr. Stephens ? ~ Mr. `STEPHENS. Mr. Secretary,~e'have "t tjs'two acts;the DemOn- stratioti Cities Act of 1966 and \thé Ur ~ e~eiopment Act of this y~ar. I don't understand whp y~uwant t ~ separate~cts. It seems to me that when you talk about new ci ~ \ d urban renewal that the only difference is whether y~t~ are gol ~ t call it a `Latin name or an English name. I ` would like to hair ~ exp'lain ~hy you feel it is necessary to put these in tw~ c~iff~rent ~ t~. Secretary WEAVER. If the qttest~on mv 1 es he eoinbinatioi~ of the provisions of these two p~rograms~' in a si~i is ~ict w~ wOti1~i~haire no objection to that. * I think this de~1o~ed ~ t ~ f the exig~ncies of the ~dtuation rather than for any phi1o~ohical ~ s~ eratioii. ~ ` . ` Mr. `STi~i~n~s. I wanted to be'~i\ire that\I ib~i er~to~A tha%, because I feel like for several years we `h~v~ re~cte ~ proposal's `for' demon'- PAGENO="0094" 88 DEMONSTRATION CITIES AND TJ~BAN DEVELOPMENT stration cities in the urban renewal prc~gram. Now this would come in as a separate kind of activity from urJian renewaL 1-Towever, I hope that the urban renewal programs that are in my district, that ar~ going on in my district, will truthfully meet a demonstration of the work ability and the feasibility, and the desirability of urban renewal. And I think that the Demonstration Cities Act has that same objective. Secretary WEAVER. I certainly thii* that it represents an evolu- tionary step on a higher level of thef original concept of the urban renewal approach. I And secondly, of course, the princi$l ingredient in it as far as the grant-in-aid programs are concerneclton which you will compute the supplemental amount is the urban itenewal consideration. So it is definitely related. And I would say it is a member of the same family, but a little different type of offspring from the earlier one. Mr. STEPHENS. I would like to see it put all together in one act., or one amendment to the act. Thank y~i, Mr. Secretary. Mr. BARRErr. Mr. St Germain ~ Mr. S~ GERMAIN. Thank you, Mr. bhairman. Mr. Secretary, in going over this ~gis1ation, the summaries, and the varied opinions and intérpre~atAo~ of the press, I am wondering if perha~is~ we~ th~e not getting intOo~h~r~sitnation~ that might be likened to the war on poverty or the OEO, where much confusion abounds, and nobody knows really where th~y are going or how or why. With all due respect, in going over the summary of the act itself, I feel that there are so many open ei~ds involved that we ay end up just as bad if not worse. Now, in your testimony, Mr. Secretary, on page 14 yo mentioned that: I It is e~cj~èted that about a doz~n~ ~ti~ó~po1itan areas, encoiup ssii~g, several hundred local communities, might beco~ne eligible for supplethent ry grants dur- ing the first year. Accordingly, the tadministratlon is recomm nding a first- year program level of $25 million. I With continued encouragement under this program, about 7 metropolitan areas, having an aggregate populatioti of around 60 million, nil ht qualify for supplemental grants by the end of 5 years. With such labeling it would occur to me that the offic of the ~7D has a pretty good idea of what communities are going t. be involved; isn't that so? S.e~i'~u~ 1~EA~rI~R. No; ~we4o not. We have a pro ty . good idea~, knowing the general situation,1of what number woul be. But this would be from a universe of maybe eight or nine times e actual num- ber that will come up. If we l4new the number that w iild come out I think we would go about it in ~ different maimer. B t I don't think we do. Mr. ST GERMAIN. And you say you are going to pr vide the names of the communities that have applied--and there ar possibly 60 at this point-to the committee? I would appreciate it Mr. Secretary, when this is done, if you would provide it not just to the committee itself, but to the individual members. I know that. it is an unusual request. But we are all keeuly interested at this point in these par- ticiilar questions. Secretary WEAVER. These ~O-some inquiries concerned the (lemon- stration cities grants. The fstatement on page 14 of the testimony refers to the supplemental in~entive grants for metropolitan planning. PAGENO="0095" 89 DEMONSTRATION QITIE~ A D URBAN DEVELOPMENT That proposal was intr9duced ~jtit~\recent1y and we have had only a few inquiries as to thes~ m.~troj~ø it~n planning incentive grants. Let me go back to your first \p in~, however. I. think-and I am not going to- ~ \ Mr. ST GERMAIN. Exctise me, ~[ . secretary. The first part was an oh~erv~tion that will be bro~ight\ ut ~y questiordng as I go. along. Secretary WEAVER. I b~g your ~ ck~n. Mr. ST GEEMAIN. In th~ crIteri~ i s~ction 4: Provide substantial Increase of ~upp1~ t e~tant housing, and take care of people in slum and blighted areas, a\nd 4vith ~ `e* to i~educing educational disadvan- tages, disease, and enforced 1d)~ene~s. Not to be facetious, but ~ou kno~ th young d~tmsel from St. Louis, a very charming and haM work~ * ndividual on this committee, heads the Subcommittee on Consur~ r ifairs. And I am wondering if perhaps HTJD should n~t ask h\~ t look into the price of bacon, which is up to $1.18 now. That c~u ri utes to disease among under- privileged people when they can't ~ or the necessities of life. So perhaps, this could b~ incorp~ at~ also, Mr. Secretary, in the aims of the act. , Se~rett~r ~~y' WEAVER. I ~TI1i ~I~e t~p d~ linethat: ~ugg~i~u ~r. i. think that what we would h~opø to ~ h re would be able to p~parè people better to particiPate ~n 1~he e~ no ic affluence and well-being of society so that they could~ pay th~ ri e of bacon as well as those who are better o~F. it is sthnebody\ l~ s jOb to keep the price of bacon lOw. This is not some~ing that T eel we have any competence Mr. ST GERMATN. Thank yo~. Mr. secretary, in line with\ thM, u ~ er section 4 once again there is a reference to "providing a ~ood acc s t inthistrial. or oth~r centèr~ of employment." My question is, Is t i li ited to access roads ? In other words, to highways, the l~uildin f ighways that would allow these people to get to their plafles of e 1o~ ment, does it contemplate or take in urban transportation, that o 1 get these people to their employment, or does it refer to what i öi~ iders industrial parks to bring employment into these areas, so t ` ~ ~ ter the 5 or 6 years when some of these p~opie, it is hoped, ~tre ` o'n to be helped by the act, will be working : on the rèii~w~i o:1~ the' e `c ies, they will theu have pe~manenternployn~entin ind~t~y withi ~ h Secretary WEAVER. I think it refers ~ all of them. Obviously as far as the transit is concerned, i1~ is ~iot ly question of streets and highways and parking facilities~ but al a ~ matter of mass transit. These are people, some of~ whon~ cannot, xi some of whom should ~ not have to purchase automobiles~in Qrde~ d et to their employment. As far as the industrial park side of i~ i ~ ncerned, this would be more indirectly than direct, because we a~ ~ ~ ncerned here with pri- manly developing resid~ence area~. No~ th re may , be some small factories and so forth. But one of\the thii~g t at would be considered in the cities plan. that would make the citi~s p1 n more feasible would be if the city also had gone along ~itIi som~ ~ vity to provide indus- trial employment and industrial parb ai~d1 places for e~nployment And au courant this, wQuld be certainly a f~c or that wöüld make this a sound, and more desirable prograi~n and p~a . t an another city that could not do it- ~ PAGENO="0096" 90 DEMONSTRATION CITIES AND *~ U~tBAN DEVELOPMENT Mr. ST G]~RMAIN. Keeping au couran~, Mr. Secretary, in ord/er for the city to d~o this, if it is a city that needs money and is in bad /shape, and it also *eeds funds to d~ve1op ani$clustrial park to give e~np1oy- ment to th~e people, I am wonderingjwhy this was not inch~ded as so many other things were in the De~nstration Cities Act. / Secretary WEAVER. The reason for i~ is dual. In the first p~ace, as I said earlier, we want this to be con~erned primarily with housing and with the human elements involved. ~ * / . Secondly, under the existing urban~ renewal program the ~ity now has Feder~d support. up to two-thirds~or the prOvision of ii~dustrial parks, so that it can do this out of the regular program tha/t can be ~ . coordinated into this. There is no la~k of assistance for that/ now. Mi~. ST: GJ~RMAIN. ~ But for the mqst part it is 50 percer~t, and I also-~----; i~ I ~ Secr~tçy WEAvi~n. For the econoi4ic development progra~i, but up to two-tb~irds for writing down the e~st of blighted land in $r urban renewal program. The manner of fleveloping the land an~I the site for the industrial park could comefin as an urban renew~l project. Now, the actual development of thaft would probably come/under the economic deVelopment program. I~t's assume . that you I/md a city developing an industrial park, an~ It went through urb~n renewal to get the site, and used our two-t1~irds grant to write do~frn the cost . of the site. It would betwo-thirds :~der~ money and one-/third local. On thaJ one-third loca', the. propc4iáou of it that would r~sult in im- proyex4ent and empioym~it for th~ pe9ple involved ~ere-~they would get 80 /percent of that one-third. flf the other rederal pi~ogram, eco- nomic development, which deals ~frith . the development a~ contrasted to the making of the land availa~1e, were involved, and/that were a 50-percent grant, with respect tp * the. proportion of tI~~le local con- tribution to that grant which helped these people, they ~ould get an .80-percent grant from this prog4am,. So this proposal ~oes cover it~ just as it would cover the buildingof the houses. / . Mr~ ST OERMAIN. I know my ~jme is up, but I wouldl like to make otie ;~bservation, beca~use we will be back to the Seereta~y, I am sure latgrl on, Mr. Chai.rma~n. . ~ . . . . . . . .ck~I two occa~jons,~ the $ecret~~y, ~mentior~ed tb~at . we are primarily rnteiMsted in housing I makej this observation, Mr ecretary If you give these people wonderfii~ousing you mtist also. ive them jobs to a~fford to stay in that housiii~,g after 5 years. . : ~ Secretary WEAVER. I think ti~is program would do it under the very approach you have suggested. . . . Mr. BARRErr. Mr. Gonzalez ~ Mr. GONZALEZ. I would like to defer questio ing until this af1~ernoon. . ~ . .,~ ~s,Jr BARRFWr. It seems th b~ag~reeable to the Secre ary. I am sure i~Lt he will answer your qu~s~ions. . ~ Mr. Reus~ . . . ~ I . . . . ~ Mr. REuse.. Thank you, Mij. Chajrman.. . .. S ; Mr~ Secretary, iii cOrnment~ngtQ Mr. Ashley and r. Moorhead on the four a~nendments which *~ere put~o you, and p. rticularly on the amendment to require the cl~veiopment of an exped ted program for new systems . of urban tran~ort, when you indica ed you approved of that, I thought your approval was a little hesit nt, and that you PAGENO="0097" DEM0NSTRATI0~ CITIE implied 1 ~are a new sy~ program s proval by the financial, econoi In this conn stitute of URBAN DEVELOPMENT mfnistr~~on on the ~s Mr. REtrss. As of t tion is, are you here and a new si think, as represen tives of nolc I feel that ~here has been a gn hardware approach, on the technolo, ~ical breakthroi them r a new t: have f / ie econ these other factors ar~~ on f the a4- 60-875-e6-pt. 1-7 PAGENO="0098" 1' 92 D1DM~NSTRATION CITIES AND *BAN DEVELOPMENT don't see. that your bill neco~sarily.doe~sJthis_but I would hath to see this emph~s~smade. ~ Mr. REvs~. May I cail a~ttehtion to tJ~ie fact that the technol gieal, of course, was merely. one c~f five aspeIts which are listed as echno- logical, financial, economic, governme~ital and social ? Doe not a reading of that reduce the swelling a btt as. far as your Depart ent is concerned? ~ . Secretary WEAVER. A bit. ~ Mr. REUSS. Thank you. ~ Mr. BAu~mrr~ Thank you, Dr. Wea~er~ The committee wi 1 stand in recess u~itil 2 o?cloek. ~` ~ ~. . ~ (Where~pon, at if~ ~ noon, the subepmmittee recessed ~ to r convene at 2 p.m.~ the sa~meday.) AFrERNOON ~E~SION ~ Present : Representatives Barrett (presiding) , Mrs. ullivan, Ashley, 1~Ioorhead, Stephens,. St Ger~nain, Gonzalez, Reuss, Widnall, Fino, and Mrs. Dwyer. : . .~ ~ ~ Mr. EA~RRm. The 4xm~ibtee will ~nie to order. This morning we opcr~ted on a 5-4iinute rule. We hope t give the membcrsi . an opportuntity to ask q~estions for a longer nod this afternoon. And therefore we are go~ngto operate under the 0-minute rule. I Mr. Secretary, as I understand, thk~ funds for actual plan ing under the meti~opolitan planning programj, they will come from t e existing section 7~01 program. Tinder that law most areas get only a wo-thirds grant,while the depressed areas can get up to three-fou ths. This bill wouid authorize h~her ratio grants under another rogram as an inducement to planning. But frankly I am surprised to see that there is ~iio increase .~n the planning grant ratio. . Would `t you con- sicler i4 logical to increase the r~4o of planning grants o the same 80-perdent ratio as yot~ propose fo~ the demonstration cifes- s~A~a~ or ROBZRT C. ~]4vn~, S~URETARY 0 HOUSING AND URBAN DEV~LOPMENT-~.Resumed Secretary WEAVER. Mr. Ohairi~an~ we have had, as ou know, a period of some years of experience with the 701 plannin grant. To date we have not found that the pz~esent ratio has created ny difficulty to th~ participating içx~al ~ ~f. government, nor has t been a de- terx~eijit to this type of planning~ . We didn't increase ~ `bec ause we didti'L think it was flecessary, a4~d we didn't want to ave a higher rati&than.was necessary, since t~ would probably repr ent an undue Fed~al participation. f . . I I would say that if there is aijy evidence that a~n incr~ase is needed we certainly will reflect that in Our legislative proposa.l But to date this hasn't occurred. We have&t had difficulty here. I think the difference betweei~ these two programs is that the dem- onstration cities program involve~ activ~ties which t e cities would 1~ik~ to do but just do not hay~ the financial resource to carry out. Thi~ is well documented by th~irown condition and b the condition that is reflected in the amount f taxes that they can c ilect, and their expenditures. I PAGENO="0099" DEMONSTRATION CITIES A D URBAN DEVELOPMENT 93 We haven't run into a similar s tu tion i.n the Thi program, and I don't `b~1ieve we will. But we ill certainly be cognizant of this issue. And if it does arise, we will a e recommendations to oorrect whatever deficiencies may be there. Mr. BARBETr. Thankyou, sir. I see tha;t the metropolitan plannin p oposal speaks of metropolitan areas as defined by the Bureau of th ensus, but gives you power to change that definition. In my own re of Philadelphia, the metro~ pohtan area is defined as including hr e counties across the river in the State of New Jersey. Would you ex ect that we would have to get the cooperation of the authorities in a ot er State before Pennsylvania communities could qualify for additio al grants contemplated by your metropolitan planning proposal ~ Is t t ue that you could divide the area and consider them separately? Secretary WEAVER. Well, as you kn w, Mr. Chairman, we have had some experience with that in our pla ni g and our programing for mass transportation, and in some degre o en spaces also. I do not be- heve that it would be possible to get a metr politan ap~roacIi in certain activities which would involve the are i which Philadelphia is the center without, for example, involvin ~ amden, which is so closely allied to Philadelphia both physically n otherwise. I would doubt as a general rule that it would be possi le to get a metropolitan area- wide approach for Philadelphia which. ou d not include certain parts of Jersey. We run into the same problem, for ex m le, though of a more com~ ~ plex nature, when in New York City. h re you have not only New ~ Jersey but also Connecticut. I think the h le concept of a metropoli- tanwide approach falls down if you don' in olve with those other two States. In Congresswoman Sullivan's area of t. Louis you have not only the State of Missouri but the State of I ii ois as well which is also involved. I think our problem here is to get the ty e of interstate compacts that we have been doing. We would feel h t we should assist the lo- calities in getting those agreementsand en ou aging them in every way possible to make this occur. Mr. BARRETT. Mr. Widnall. Mr. WmNAu,. Thank you, Mr. Chairma . Dr. Weaver, the rent certificate progra , hich was section 103 of last year's bill, and which I first proposed i 1964, has gpne into action, I and I believe there have been some good rep rt on it, It seems to have stirred up considerable interest. Could y u eli me how many rent certificate applications have been approve t date, since you issued Iie form for that purpose in late October? Mr. BARRETT. Mrs. MdGuire would have to an wer that. Mrs. MCGuIRm I have no figures. We h ye ad applications from 16 communities, formal applications for a tot 1 of 3,405 units, and many more inquiries. Mr. WIDNALL. Of that number how many ar waiting approval at this time ? Mrs. MCGUIRE. We l.Tave approved six, aiid th balance are awaiting approval, although some are in the central ffice and are clearing it I 110W. We have executed animal contributions ont.racts on three. Only 1 3 with 75 units have actually been leased and occupied. PAGENO="0100" 94 DEMONSTRATION CITIES AND ~ REAN DEVELOPMENT Mr. WIDNALL. How long a pGriod does it take for you to pprove those units ? What ar~ you finding pour experience to be? Mrs. MOGmUE. It is much quicker than the normal public ousing. But we do have to be very careful ab~ut the supply of availa le units and the economic situation in the co~nrnunity with respect o public housing. . I Mr. WIDNALL. The 3,405 figure reh~resents all that are n w pend- ing? ~ I Mrs. MoGuntE. All for which w~ have actual applicati ns. We have many cities which have indicat~d active interest and m ny cities which are preparing these leasing programs. Mr. WIDNALL. Would. any applidations be pending th t you do not have at the present time? Mrs. MOGTJIRE. No ; I think we show only those from t e regional officesthat may be in the central office now. Mr. 1~IDNALL. What do you esti~nMe could be used this year? ~ Mrs. MOGtTIEL We h~ve budge1~d only 3,000, but you an see we `alread3n have exceeded that. And ~ expeot the popularity f the pro- gram i~ such that it would be at leapt ~OOO before the end f this fiscal year. , I Mr. WIDNALL. As I understand ut from the new propos ls, on page 21 of Dr. Weaver's tesfimony it says: The leasing proviision t~ partieu1ar1~r helpful in providing hou ing for large displaced ~tlamilies~ many of which have been on the waiting ~ st 1~or public housing for many years.. Local housing authorities cannot ass re what will happen to these fam~11ias when the n~ort-term leases end. Au.ti~Grity to enter Into 1~ases with 1o~iger terims would 4~wevent further mseeurityk and in some oases the actual hard~b1p of any ad~t1ona1 d1spl'acement for ~hese families, No~v, the proposal as I understand it would make po~sible 40-year leases in a rent certificate progran~. I Secretary WEAVER. No ; we a~c not asking for that~ We realize that the genius of this proposa' is that it is a relativ~ly short-term arratigement. But we feel `that 3lyears is too short a tern~, particularly for these people who have beex~ displaced and for wh~m we have a moral responsibility to give sortie assurance that they ~wou1d be ade- quately housed over a reasonabk~ period. We were thi king in terms of a 10-year period rather that `a 20- or 30- or 40-ye r period. Mr. WIDNALL. Of course, thi#'js spoiled out in the op n-end authori- zatikm as presently set up in the till. Secretary Wi!~&vi~R. Well, w~ would be perfectly w ling to nail it do*n to a reasonable period, saj~, a period of 10 years. Mr. WIDNALIJ. Don't you tl4iik it would be better o get some rca- *sonable experience out of this before we launch a rogram? One of the things I had in ~nind in offering this p ogram was that we would have an opportunity to experiment wit it to see what the results were without freezing into a permanent old. It differs from rent supplements in that you have a 40-year reeze in on rent supplements. Once you hav~ signed your contracts for rent supple- ir~ents you have no ability 1* change during the 4 -year period. I thought that the rent certific~ite idea was something very worthwhile in the overall program. Yo~i could use available u its which would put people into decent, safe, ~4nd sanitary housing mu h faster than the rent supplement program. ~Don't you think that it is wise to test PAGENO="0101" ~cretai sman. as the general where we havc of security is treme: cost for ii -~. we f~ LLL. i program, that i ~ecretary, as first j covered in your staten in 1965 that the rent eligibility 1 Secretary ing? M 0; limits. B that this proposal, part of housing authorities who also:~ ~ ~so bas aced r ation to year, I dis- ~arin~s held - vethe it? e hous- DEMONSTRATION CITIES D URBAN DEVELOPMENT 95 ncreasing the lease this has co have long with the re ther~" PAGENO="0102" 96 DEMONSTRATION CITIES AND ~IJRBAN DEVELOPMENT which can ~3C added up to $~,4OO in d~ductions for a total po sibility of $9,896 i~iaximum allowance for a n+rmal family of five. ~ he rent supplement mcome limit for a family of five in New York City is $6,100, ac~ording to our latest advi~ory. This is a differe tial of almost $3~I00. The present bill wou'd allow a deduction wthin the operation of the rent supplement program when we get it g ing. Secretary WEAVER. Let me try to interpret these figures. In the public housing program in many cities there are separate inc me limi- tations for ordinary families that would enter, and for thos families which have been displaced by urban renewal and by highwa s and by other public improvements. I thin1~ the figures that you ave read belong to the latter category, and I ~o not make any such ft stinction in the rei~t supplement program. I As far as the maximum income at ~the time of entrance is oncerned, we are taking, as the law requires, th~gross income. This is ritten in the rent ~upplement law at the preser~t time. So the answer to your latter queslilon would be "No," bec use of the statute. Mr. WIDNALL. Thank you. Mr. BARRETr. The time of the gentleman has expired. :t will deviate a little bit from ~ my usual rules to rec gnize Mr. Gonzal4z. He was very kind this morning in passing hi time and giving 4ne an opportunity to give he other members a ch nce to ask some q~estions. So al~ this time I will recognize Mr. Gonzalez. And t en we will come ba,ck to our usual routine. ~ Mr. GONZALEZ. Thank you very fliu~h, Mr. Chairman. First, may I say that I sincerely~ believe that congratula ions should be the first thing in order here for' this team of expert w~tnesses, and personally to Dr. Weaver and th~ Under Secretary, Dr Wood, and the Assistant Associate Secretaries, because I feel that t~his is a real beginning, a real challenge. : I Alsb I would like to bring to t~ie attention of my co1l~agues on the subco~iunittee ~md others this i4iagnificent frontispiece~ from Time maga~ine with Dr. Weaver's ve4y nice upward, forwar~1-looking as- pect. ~ And I would like to say~lso that the response ~o. far as the grass!roots are concerned seems Ito be or represents it$l1~ to be tre- mendous. ~ ~ I This last Saturday on a less than 24-hour noticewe l~ad a meeting in which we had a complete cross section representat~.tion of most every political subdivision and agency representation that would be ef1~ective in a metropolitan area~ that comprises about `~75,00Q people. ~ This morning, as the result of t~iis meeting Saturday, t~ie city council of t~ie city of San Antonio pa~sed a resolution wher~by the city of Sa~ Antonio indicates its lesir~to participate `as soon a~ it is feasible. Th~re is intense interest. as to ~`vhether it does or doesfl't become one of the `fortunate cities, and wh4ber or not this particul'~r legislation is ~ enacted in the way it is formuli4ed. I In other words, in my opinion, as a Representativ~ of this entire area, ma~y I say that this has caught the imaginative f ~ling, the spirit and the desire to work `as a partnership with the Fede al Government. Now, with respect to questiens, I feel that there is ne thing that I would like to ask you, Dr. W~aver, to perhaps expan on a little bit. 1' PAGENO="0103" 97 DEMONSTRATION CITIE A~ URBAN DEVELOPMENT In the bill and in your ~1isoussi~n y referred to this, once a demon- stration area has been as~erta~ned, the naming of a coordinator. Could you expand a 1it~1e bit o~ ti~ definition of the area ? What will this represent ? W~11 it `be\ u~ city corning forth with an ap- proved man, or a combin~tioki of ç~i ie , or a region? Would you mind expanding a little bit on tl~at.~ Secretary WEAVER. Be~ore I a4~ ~ your question, sir, I would like to thank you for your kind introthjc or remarks. The cities demonstratiOn progi~a ill operate on the unit of the city. Each city which p~trticipai~e o wants to participate will de- velop a proposal. And th\at ~rop~s 1 ~ ill be r~Viewed. On the basis of that proposal it may then qua1~ f r a planning grant. The city WTill then develop its own pr~gra~i t~ participate in this particular activity. That program may c~v~ a ompl&~e neighborhood, it may be several sections of a cit~. it w~j ~ 1~ ye to involve, of course, those areas which contain a sign~ficant jj~ t f the sl~im. and blighted por- tions of the city. On the b~si~ of i~s ~ posal the: city will then come into the program, and it *111 ~ foll~ ~ at proposal except for such modifications as experience ibay den~b st ate. ~ And the supplementary i~noi~ey, ~v i~ will be provided, which is 80 percent of the non-Feder~d share o t e Federal grants4n-aid, will be available to that city to spend on a y hing `that is included in that demonstration program. . ~ Mr. GONZALEZ. What . ab9ut the d ~i nation of the~ coordinator, though ? Whatwill triggei~t~hakeff ? ~ Secretary WEAVER. The co~rdinat rw~ lbedesignated at such time as the plan is accepted and.th~e city b c x~ s a. çletuon~tration city. Mr. GONZALEZ. Suppose sub~e~uen ~ hat in th~ area that could be considered metropolitan ~irb~n, ~ t ` eographically not far re- moved-in Texas, of course, ~9O mu is `t far, but~i9O miles is the distance that separates San A~ntQnio , . fl~ Houston, the No. 1 city- how many coordinators woulc~ th~n b all d for if subsequent to the establishment and recognition ~f ope a ~ y u had another one ? This is what I was thinking of. \ ~ . Secretary WEAVER. Each der~on~tra I u ity that qualifies will have a Federal coordinator. Mr. GONZALEZ. As to partic~pati~n o t e people affected in the areas, perhaps there we might pi~ofit m the experience with. the OEO. As I think you are awai~e, the bi\g ~$ problem has arisen from the local standpoint in your con'~munity\~ ti n, in that particular part that calls for community action develop en . And there the defini- tions of what constitutes maxhnurP fe~sbi ity participation by the persons affected has really been\a big i~ e ocally. And I was just wondering if some looking int~ h~s b~èi one with respect to the OEO sector in this respect. . \ . Secretary WELAVER. I don't lil~e c~mp~ so s. But I will say that one of the great advantages, I t~dn1~, of\ t i~ approach, involving as it does less than 100 cities and a l~iun4rec1~ la s, will be that we don't have to be doctrinaire. It may w~ll be th i~ one city citizen partici- pation will take on ~ne form, and i~i atioth r c~t, it will take on another form. We want experimentation~ we wa dj ersific~tion. We also want resu]ts. And if in one city, be~aus f 1 s peculiar nature, and because of its peculiar institutions, a~id ir n * ecause of its peculiar PAGENO="0104" 98 DEMONSTRATION CITIES . AND Uf~tBAN DEVELOPMENT composition, one type of citizen participhtion will operate, this doesn't mean that that would be foisted on another city or that the other city will elect to do this. The city will decide this. And we will then sit down with the city and talk it over and see whether or not the objectives that we mutually have in mind will be accomplished. If they will, then that will be the form of citizen participation. And my guess will be that we! will have quite a few vaijiations in the way the citizen participation is set up. I Mr. &octczALJ~z. Of course, I could se~ that in your case here you will have one advantage, because your de*nstration agency will be based on a very representative, responsive a*d responsible type of organiza- tional unit, whereas in OEO in thes~ community action setups you could have a variety of types of orgathzations setting themselves forth as the local community action groups. In this case, of course, as to their composition and selection, these are issues I won't have. And one more thing-and this is of concern of course to me person- ally, because I might make a publiG confession here. I worked for public housing in San Antonio wa~yf baok, in fact my boss was Mrs. McGuire, and I don't want her to g~t mad at me, or vice versa. Let me say that it was a most educatior~al and rewarding experience, be- cause it gave me a chance to see all ~f the processes for acquiring land and title to land for the relocatio~i of families. And I might say that we relocated over 450 families without one single eviction order. And I saw flourish in otherwise pretty bad environment some pretty good standard housing for famihe~ which for all the period of their family existence had not had a chance to occupy. I am worried, frankly, about public housing. Doctor, what I would like to hei~r from you is, is this new type of programing-this new type of p~ograming will not mean a down- playing or aiiything to the detrime*t of public housing? Sec/retary WEAVER. This progra~n envisions the utilization of public housin;g to the maximum degree. I 1k also envisions the utilization of the rent suppMment program. 1~nd it is based-as is our whole ap- proach to the housing of low-income families--on the thesis that the need is so great that we can utilize public housing, rent ~upp]ements, and other approaches that may be (levelope(l, afl(l still not meet the total need. This is iiot a question of public housing versus rent Sup- plement, but a question of utilization of both with the mix which the locality desires to establish. I M~. GONZALEZ. So in reality y~u don't visualize any deterioration iii the ?ublic housing approach or!activities as a result of the develop- ment of this city's demonstratio~i? Secretary WEAVER. I would s~y that within the last few years, par- ticularly since the housing and urban development bill of 1965, we have revitalized public housing by making it more flexible and by giving it new approaches, using the same basic tools which the original legislation provided. We intend to continue to do this. Mr. BARRErP. The time of the gentleman has expired. Mr.Fino? Mr. FIN0. Mr. Secretary th~re is no question in my mind but that the basic purposes of this legislation are beneficial. But there are two features or two things in this bill that disturb me. One is that I ddn't think that the bill pro~ddes for sufficient safeguards for local PAGENO="0105" D1~M0NSTRATI0N CITThiS A D r assistance u )T ~anforn cretary this rn eai of a by information. requires a P!~ E~AVE1R. rning, ol: I the o~ Brat ould give you ahead y there is ~,,, then JI, which bion in the )W, far ~d, these: are bu a is developed I think Uafth~sa~ of local government a will guard very jealo ~tobe. Not no ~ Imightsayt attacked as a man ~ ts are con- The pro- Itis Wouldn't y the power to unless there Secretary asyourfi bea PAGENO="0106" I 100 DEM~NSTRATION CITIES AND [JTEtBAN DEVELOPMENT may be swap~ingone difficulty for another. But I am perfectly ~pen- minded ab~i* what the title may be, re~gnizing the difficulty ~n the title. ~ ! I Mt. FIN0) With respect to the ~powe~ of the Federal coord~ator, supposing yOu were to determine that th~ particular city was not corn- plying with. certain substantive elemen* of the city's plan for ~ corn- prehensiv~ demonstration program, w~iat action would be t*en to force the city to make themeomply ~ ~ / Secretary WEAVER. The same action~is taken in every Fedei~al pro- gram that now exists. There is a ~ contractual relation 1/x~tween the Federal Government and the locñ,l government. This ~pecifies what isgoing to be done. It specifies the conditions that are n/iutually agreed upon, and both parties to the~contract are expected i/o fulfill the contra~t. We wouldo~ course att~mpt to negotiate the di~erences and to came to an amicable settlen~ent. The Federal coq~dinator would i~ot be the only one involved. ~Jt might even get to m~ desk. But thi is nothing new. There is fiothing involved in the/existence of the Federal coordinator that ma1~s one iota of differen~e in this relationship. ` There are always condhions when Federal mo/eey is ex- pended. It is to be expended for th~ purpose for which it ~as either appropriated on the one hand, or foriwhich the contract on tl/ie basis of its assignment was made on the other. / Mr. Fmio. But doesn't the coordihator have all of the p~wers that you havØ delegated to him ? J / Secr~ary W~v~at. Y~s~ But so ~oes everyone in the regi~nal offices, and so does everyone in ~ashingto4. And so does every Fe~1era1 agent or every Federal employee who is ifnvolved. They all hav~ only those powers that are delegated to then4 . There is nothing ne~k in this re- lationship as to this particular official. / Mr. FINO. So with you as the ~ecre~ary of the Department could delegate authority to the coordinator to stop or slow dowr/i the flow of Federal funds into that community, is that right? Secretary WEAvsn. ~No. I wo~tld think that whether or not these fund~ are to `be slowed down wouid be a power that woul not be dde- gate~ to the coordinai~or. If it w~re delegated it would b delegated no furl*~er than tGthe S~retaHes, t]f~e Under Secretaries, or the Regional Ad~inistrator. Mr. FIN0. So you have no f~ar that this coordinato would be a czaror a cornmis~,ar ? I Secretary WEAVEL Not only,~do I not have that fe r, but I don't think the mayors have it either. Mr. FINO. Haven't some of the mayors expressed som apprehension about this? Secretary WEAVEL They dic~ until they found out w at is involved. And then those mayors that ~ discussed this with se med to be per- fejtly satisfied with the expla~tion. And many of th m have so pub- holy stated, I might add. I ~ Mr. FIN0. Can ~we get back t~ this second part? Secretary WEAVER. All rigi4t. As far as the social and physical aspects of the programs being combined is concerned, I thi~k there is no question in those people's minds that the only way we are going to come to gri s with the prob- PAGENO="0107" 101 DEMONSTRATION CITIES ND URBAN DEVELOPMENT lem of our slums and blighted a~ as s to ooordinate the social, eco- nomic, and' physical actiVities. W~ ~n ot talk about simply providing Federal housing aids. W~ must ~r vi e better opportunities for peo- ple to participate in soci4y-~-pre~ rë hem, as Congressman St Ger- main mentioned this mor~ing, to \b ~ le to earn better livings, give them better education~ m~ke then~ ë~ a part of th~ mainstream of society. I think the outbu\rst~ of l~ t ~ mmer were graphic, and very, very unfortunate evidence ~f this f ~ It is with that in mind 4at we a ~ empting this accommodation, and saying this is a neeessit~. Now, as far as economic Uiversifi tiô is concerned, one of the ap- proaches that is involved here is t i imize the permanent disloca- tion of individuals, the breaking `~ neighborhoods. There are neighborhoods in this coun1~ry, ma ~ o~ them which may have some slums in them, and many of them w i l~\ ay be primarily slums, that are not made up of a single ec~no ~ ~ ss. ` If these neighborhoods are to be preserved they musts ha~re t ~ s~ ~ e diversity and maybe more than they had before. This is the essence of the ap~ro~ch. Mr. BARRETT. The time of tj~ie gentl ~ has expired. Mrs. Sullivan ? Mrs. SULLIVAN. Thank you, Mr. Ch I i~ n. Mr. Secretary, of course, you Jqiow t a from Missouri, and I have to be shown. I believe in mos~ o1~ the ~ o osals you have made. But I am going `to ask if there isn'~ some ~ and I wouldn't expect you to give it to me now in just a. few q ~ ords-but could you per- sonaily send to us or have one çf tour ~1 p ties come to the committee during this hearing with a wri~ter~ exa4~i le of how a number of these aids might be meshed togethèx~ in one 41 ~r . r in `one area? Secretary WEAVER. We have that al~e d prepared. ` And we will be happy to put that in the recor~L But I think it would be much more n~ n~ gful to be read and to be heard~ And I would be delighte~I to do i~. ~ Mrs. SULLIVAN. I think it sl~ould' be\; it oiild be more ` complete. So if you can do that it would be ~pp~ecia~ed~ Mr. BARREn. Do you desire to ~ut tha1~i , e record? Secretary WEAVER. We would lce l~app~ 0 ut it in. Mr. BARRETT. It may sppear i~a' t~ r~ r without objection. (The information requested fol~ow~:) HYPOTHF~TICAL OIT~t I~i~MONSTi~ 10 PRoeRAM 1. Na~ture of i1emo~n8tration program Section 4(a) of the proposed 1egis1a~ion de~c~i es comprehensive city dem- onstration program as a 1o~a11y prepared and s~ii U ed program 1~or rebuilding or restoring entire sections and neighboi~lioods of \~l nd blighted areas through the concentrated and coerdinate~L use of all a~ l~l~ e Federal aidsi and local private and governmental resources, in~lud~ng c~t wi e aids and re~ource~ nec~ essary to improve the general welfare o~\the ~eQpi~ i~c~i ~ or working in the areas. As will be noted, the demonstration p~ogrnm is i t~ ded to niobiliRe all public and privat~ resources in a concentrated\ an4 coo d ~*t d manner, such as is in- herent in a scheduled program., to improv~ the gen t' 1 elfare of the people living or working in the demonstration area. The pu 11 ~ sources include those of the Federal, State, and local governmenl~s~ The `a tic pating private resources Include businesses, industries, and buil4ing oper t on within the area or the city in which the area is located, as *ell as t e ernosynary institutions, i PAGENO="0108" 102 D1~IONSTRATION CITIES AND FEBAN DEVELOPMENT clwrches, amfi other privat& groups (nonpr4t or profit) that seek to re love th~ distress o4~ 1~he poor. Priva~te resources wUl also include business en erprises that help rehabilitate or restore sections offthe city and thereby creat job op- portunities. . I Federal Government assistance comprisest two types : ( 1 ) The corx~p1 te array of all available categorical grants in the fi~lds of housing, renewal, tr1ansporta- tion, health, education, welfare, economic :opportunity, and related ifrograms; and (2) supplemental grants (available pUrsuant to section 6 of the! proposed legislation) that may be used to finance an~ activity, project, or speciajl program that is included within the comprehensive city demonstration progr~im as ap- proved. P~ie supplemental grants may be *sed for activities that are ~omplete1y unrelated to any existing categorical Federal grant-in-aid progran~, oi~ they may be used tc~ pay all or part of the non-F~deral contribution required under a Federal gi~ant-in-aid program. ~ ~ J I Set forth below is a hyjx~thetica1 eity d$nonstration program for a city with a population of somewhere between 500,000 ~I 1 million persons. The ~1gures used in the illustration do not relate to any pa.4tlcular city but, instead, arØ indicative of activity levels found in various cities ion the basis of available i~iformation. The demonstration program, in effect, ~s an array of intended e~cpenditures. These expenditures are broken down li*o three major components : (1 ) fed- erally assisted activitfes ; (2) municipal and State public expendi~ures (unre- lated to Federal assistance programs) ; and (3) expenditures byl the private sector of the economy. Federally assisted activities that are $rt of a demonstration prqgram can be classified into three groups : (a) capit~1 Improvements (such as public works or hortolug) within the demonstration 4rea ; (b) public and socia~ services for residents within the demonstration ar~ ; and (e) :other capital i~mprovements in other parta of the city that are demo4istration-program connecte~ in the sense that there is a flow of benel%ts from su~h eapital improvement pro~jeets to those residing in the demOnstration area ; to4 the latter only a proratedlshare of such capital ~ improvement expenditures ar~ counted. as part of the ~emonstration program. I In the example shown below, the annual outlays for the hypothetical city demonstration program are $81.5 million, or $407.5 million over th~ 5-year period. Of the $81.5 million per year, 52.5 millIon redeet total expendit~ures' (Federal, State, and local) under federally `assi~ted activities, $16.6 million/ reflect munich pal arid State public expenditures (ui~tre1ated to Federal assistapce programs), and $112.4 miilion reflect expenditurØs for private housing co~structiou and rehabIlItation, private nonresidentia1!eo~struction, and outlays ~y private non- prollthrganizaflons. ~ I ThØ $81.5 mIUloTi for the animal c~sp~n44tures is obtained fr~m the Federal asiii 1~eaI shares of rognl~r grant~ir~-s~~programs, from State, lo~al, and private activity support and from the supple~nentary grant funds autlafrized by section 6(c) ofthebill. I ~ 2. Derivation of speoki2prant enUt1et~wnt Section 6(c) of the proposed leg~1ation prescribes that tl~ supplementary grants for the comprehensive city d~ion~tratlon program may . ~ ot exceed 80 per- cent of the aggregate amount of nen~Federal contr4bution~ ot erw~se required to be made to all projects or activities assisted by Federal gran~-in-ai'd programs, which are undertaken in eonnecti~ with the demonstration pfrogram. For the pm3ose of the illustration, three tykes of non-Federal contrtibiitions are shown: (a)~ non-Federal shares for feder~4Iy aided capital 1mprovem~uit projects, such as brban renewal, public ho~u~sthg,jhospitals, neighborhood c~nters, parks, and Ub*arles located within the 4emoT~tration are~i, which are fi~lly counted in the special grant entit1en~ent ca1culá~U+fi ; (b) non-Federal shareslof federally aided ~ public and sx4al services, esHmajod on a per family basis,I multiplied by the 24,000 fanlilies assumed to be livjkig in the demonstration area (such services include the program activities ot the O~fflce of ~lconom1c Opportunity, child and elderly welfare and health servi~es, vocational rehabilitat~on and manpower training) ; and (c) non-Federal shares for federally aided c~ipital improvement projects located in other parts of the city that are undertakei~ in connection with the demonstration program, which are counted on a pro r~ta basis reflecting the population of the demonstration area in relation to th~ city's total popula- tion (assumed to be 10 percent), ~dj~mted in some instances *here the incidences / PAGENO="0109" DEMONSTRATION CITIES URBAN DEVELOPMENT 103 of project benefits are ilk f the Jects in the demonsi i percent grant funds. )ther wses of siipplernentctn be used i grams, such as ~ cal welfare assis Development and Education Act; r rograrn PAGENO="0110" 104 SUMMARY PM~LE [Dollars In mi11~onsj DEMONSTRATION CITIES AND RBAN ~ DEVELGPM13~NT Hypotheticai city dcmon3tratio~~ program f* a city with a population of over ~oo,ooo $118.5 114.5 I 1-year pro- gram -year pro- gram A. Expenditure program component: 1. Federally assisted activities: (a) Capital improvemex~t~-Demonstrati~ area (b) Public and socialservfces-flemonstra loll area (c) Other capital improvements-Dem ~ stration program connected 1 ~ Subtotal ~ 2. Municipal and State public expenditures (unrelated to Federal assistance gram' ~ (a) Existing municipa' expenditures `~ -~ T (b) Ne~r and supplemental mtiflicipaj s*vice ~ ~c) State expenditures (within city) `L~ ~; Subtotal ~ - 4 . 3. ~ñvate sector: . / . (a) Private nonpro~t organizations ` 4 ~ (b) Private housing construction and r4habilitation `~ (c) Private nonresidentialconstructioijand rehabilitation 1~. Subtotal ~ ~ 13. Derivationof suppemental grant entitlement (no1i~Federal share): C~pital.1mprovements in demonstration arça ~ OTher capital improvemen~s-Demonstratiqn program connected I~ubllc and social services in demonstrat1on~area q~otaL. j $23.7 22.9 5. 9 52. 5 ~ 29. 5 262. 5 8. 0 7. 1. 40.0 38.0 s. o 16. 83.0 3 4 5 0 * 4 Q ~ . 4 17.0 25.0 20.0 62. 0 8.5 407.5 - 7. 7 2. 0 9. 9 9.6 is. 7 . ! ~° percent of total ~. ~ ~ C. Use of supplemental grants (itt demonstratioi~sr~a): ~ 1. Urban rehabilitation arid capita1Inipropenie~its 2. Payment of portion ofiion-Federal share under categorical Federal ~ grant-in-aid programs for public and s~cfa1 sezMces 3. Ne~ and supplemental municipal servIces SubtQtal D. Federal share under categorical ~id programsl E. . Total Federal expenditures ~ 4. 5 3. 6 7. 6 15.7 18. 4 34. 1 4: ~ Totals 1 F1~ures prorated to demonstration area. No~E.-Smn of figures may not e~uâl total siJo~vn due to rounding. ~ *rs. Surnv~. t~u say onJp~g~ S of your stateme t: ~ he Federal assistance authori~ed by the de~c~etiyi~t1On ~ ities bill will be' provided to a city demonstration ~ageney. This may 1e the city or any local public agency established or desig4ated by the local goveimin body to adminis- for the comprehensive city demonslfration program. Could this new program pèssibly come under the xisting housing authority that is already set up? : Secretary WEAVER. It could. I think the difficult is that this will involve not oniy urban ren~wal and public `housii~g-which in St. 1:~ouis is under one admini~rator-but also the s~hool system, the tAoard, which always has a ~ort of peculiar relatior~ship, the welfare people, and the people who ~re in the OEO prograx~i. And you have such a diversification-it ce41~ainly would involve tl~e planning board, and it would involve any group that is responsibl~ for the planning and operation of mass tran~it. It has been our ex erience `that very ~ PAGENO="0111" 105 DEMONSTRATION CITIES A D tIRBAN DEVELOPMENT often when you get-if I may ak a figure of speech-administra- tive siblings coordinating for other ibliiigs, you get into difficulty. ilere again we want to have di e ifloation and flexibility. In one city you may have a strong mdi id al that can do this, or you may have such a peculiar type of admi is rative machinery that this could be done. rrhere is nothing in the la that prevents it. My guess is that it would be a rarity rather tha th rule. Mrs. SULLIVAN. It should be, t en a new agency setup with pos- sibly some of these people in the g ncies that are now in existence representing it? Secretary WEAVER. I wouldn't sa t at it should be, Mrs. Congress- woman. But I would say that it p o bly will be. But this again would be up to t e ocal government to determine, realizing the type of system that ou have in the local government. In the cities that I have been opera in in on the local level it would be necessary, from my knowledge of he , to have a special individual, although this individual might also a e the responsibility for carry- ing out urban renewal and public ho si , and a few other programs. Mrs. SULLIVAN. Does your agency h ye any guidelines as to what type of agency should be set up ? In th r words, what type of people might be better qualified to serve? Secretary WEAVER. No, our approa h as been to set out the results we expect to get from the agency. It is a performance standard rather than the technical or the structural cr1 era that we are concerned with. Mrs. SULLIVAN. Following up wha r. Barrett mentioned before, since the whole emphasis seems to be o development grants, would it not be more appropriate to rename t second administration bill, H.R. 12946, the "Metropolitan Dcv lo ment Act" instead of the "Urban Development Act"? Secretary WEAVER. I think that ths ight he more descriptive. Bitt. again this gets into the semantic 0 the thing. What we are trying to do is g~t the word "urban" t b synonymous with "metro- politan," and to inviove not only the ce tr 1 city, but also the satellite communities around it, and the urbaniz ci reas beyond. But I don't think any particular violence would be d e to our concept by that. Maybe Secretary Haar would like t s eak to that. That is his particular area of interest~ and he hasn't sa d anything so far anyhow. Mr. HAAR. We see no objection to ren mi g it that way. rfhere are other sections that dealt with the city p og~ams as well. And so we used the word "urban" in the broad se se which the Secretary has described. But I think calling it the M t.r politan Act would be all right too. Secretary WEAvi~R. I might note that t. e ssist~nt Secretary under whom this will fall has "metropolitan" i h s title. So we are using both terms. Mrs. SULLIVAN. I think we are getting to the point where we can recognize that there is a difference betwe n what we normally term "urban area," which is a city, and the m~t opolitan area, which takes in many suburbs, cities, and even including ii tie of the rural area. Secretary WEAVER. This is exactly what e ean. Mrs. SULLIVAN. Thank you. That is al f r now, Mr. Chairman. Mr. BARRETT. Mrs. Dwyer? Mrs. DWYER. Mr. Secretary, how many i rent programs will be included for coordination in the demonstra io cities program? PAGENO="0112" 106 DEMONSTRATION CITIES AND TJgBAN DEVELOPMENT Secretary WEAVER. This will vary fr4~m city to city. W~ h ye a laundry list *f the major ones which wejwould be very happly o put in the re,cordL This will not be eompl~t~b, because each city pr gram will vary from the other city programs. f I am sure that there ill be, however, more or less a hard core of F~deral grant-in-aid pro ams, which will appear in practically all. ~hese we would `be very ` appy to list, and also list others which might. Mrs. DWThR. How about the maximum use of the Federal pro rams? Secretary WEAVER. This, I think, would test our ingenuity, cause it would more or less prejudge what the plans are going to be And there woiñd be little use in having the cjties decide what they w nt and a nod oJ~ planning if we had pred~termined what that p an was going to be. But we do know from ex~érience what the majo sectors *~ciuld be~ .And'thes~ I wmld be ve~jrh~appy `to deJineate. Mrs..D~nth. Will you list them for~he record? Secretary ~ We ~Vi1i be glad to~ * (Theithformati~ri requested foilow~ :) ` F1tDF~RAL GRANT-Ji4~AID PRO~R~MB LIREL~r Po F&RM BASI~ OF CITY DTMo STRATION ` PROGRAM ACTIVITIES The programs on the attached list are' these Federal grant-in-aj~j programs deemed m~~st likely to be utilized `by `a ei~y in developing a city ~lei4onstration program `~sumeient magnit~icle in both i~h~si~al and social diinensio~is" to meet thecrit~i'ia'ofthedem~straUon cities b1114 It is not implied that the~e programs necessarllk will or should be used 1nan~r oI~?dernoIIEtratlon or that oth~r programs may not aM be Used. ` ` J Pro~tfam * I Citation DepartmóR't Of Housing and Urban Development : 1. Urban renewal projects 42 U.S.C. 145o-14~. 2. Neighborhood facilities 42 `U.S.C. 3103-3108. 3. Urban mass `transit 49 U.S.C. 1601-161i. 4. Open space land program 42 U.S.C. 150o-1500e. 5. Urban `beautification program_,~_~ 42 U.S.C. l500-1500e. ~. ~azits for banic water and swer facilities ~ ~ U.S.C. 3101-3108. 7. Ooinmnnity renewal program 42 U.S.C. 1453(d). 8. Code enforcement prograrn__.. ~ 42 U.S.C. 1468. 9.. Demolition graat progrwni 42 US.~. 1467. 10. Low-rent public housing 42 U.S.C. 1401-1435. Department of Health, Education, and Welfare : Office of Education: 1. Education of low-income fami- 20 U.S.C. .241a-2311. lies. 2. LIbrary Services and coflstruc- 20 U.S.C. 351-358. tion. 3. Adult baste educatIon_~. 42 U.S.C. 2801-280 , 2831. ~ 4. Supplementary edueatloi1al cen~ 20 U.S.C. 841-848. tess and services. 5. Comu~unity services ai~d con- 20 U.S.C. 1001-10 1. tinnl±tg education pro~á~ins~ 6. Guidance testing and coi~iaseIitig ` 20 U.S.C. 481-484. ~ services (National ~~fehse ~ducation Act). 7. College work study pro~rkm___ 4~ U.S.C. 2751-27 7. 8. Higher education acad~nnlc fa- 20 U.S.C. 701-73 cflities. 9. Vocational education-Appren- 20 U.S.C. 15j. tice and general training and retraining. 10. Vocation~il educatio~i-Work- 20 U.S.C. 35-35 study program a educa- tional facilities. PAGENO="0113" DEMONSTRATION CI'flES Program Department of Health, Education, Welfare-Continued Office of Education 11. Instruction in and institutes fense Education act). 12. Vocational eUucat~on_~~n1 in specified occt (Smith~tIughes A~et Georg&Barden 4et) Vocational Rehabilitation tion: 1. V Departmen 1. F" 2. Depari 1. 2. and I oeen ad s in the cities. 20 TJ.S.C. 441-445, 5~)1-592. U.S.C. 11-15, 16-28; and 15i- 15o-15q, l5aa-lSjj, l5aaa- 85g, 35i. ~C. 301-306, 1381-1885. 1351-1355. 60-878-66-pt. 1-8 PAGENO="0114" 108 DEMONSTRATION CITIES AND 1~RBAN DEVELOPMENT Mrs. DWTER. I am particularly intei4sted in the existing programs, and I wondered what happened to the ~ppIication for the dem nstra- tion grant under the Transportation ~Aet which was made y our State highway commissioner to Mr. Kdhl. Is Mr. Kohl here? Secretary WEAVER. I can answer 1~hat. This application is still under consideration. And we are no~ reviewing it as to its t chnical problems, ~tnd as to whether or not it ~jualifies under the defi ition of a demonsttation grant. . Mrs. D*YER. I was asked by my S~te highway commissi ner, Mr. Palmer, t~ give you a little push wh~you came here, Mr. S cretary. That will be all, Mr. Chairman. j . Mr. BARRETT. Thank you, Mrs. Dw~rer. Mr. Ashley ? ~ ~ Mr. Asni~y. Mr. Secretary, it occurs to me that a numbe of ques- tions arise out of the general criteria~ which a city must mee in order to qualify under the demonstraiti~n ci~ti~s program; Inasmu h as these criteria $present conditions which irhist be met by the local c mmunity in orders to ha~ve their plan appro~4ed I should like to as for your written )comment, which can be su~pui~d for the ~cord.* The fi~st requirement is that the ~rogra,m be-~-- of sufficient magnitude in both physical bird social dimensions (I) o remove or arrest blight and decay. fn entire sectI~s or neighborhoods, (II) o provide a substantial increase in the supply of sta~dard housing of low and oderate cost, (iii) to make marked progrean in servhig the poor and disadva aged people living in slum and blighted areas with a view to reducing educ tional disad- vantages, disease, and enforced idlenes~, and (lv) to make a subst ntial impact on the sound development of the entire ølty. I wonder, Mr. Secretary, if your D~partment can furnis guidelines as to *hat is meant by "entire se4ions or neighborhoods'? Sec*etary Wi~v~n. I can answEfr. tha~t now if you care o. Mr. ASHLJir. I have a series c4 questions, and I thin it might be as well if the answers were suppli~d , ~ Sëoondly, does the requireme~ that a substantial in rease in the supply of standard `housing of lot' and moderate cost be rovided per- tam to sections or neighborhoods where current density levels i~re al- ready high ? If not, does this r~quirement mean that t re must be a substantial increase of standard housing of low and mo erate cost in other than the project sections o~ neighborhoods? T1~drdly, is the Department able to indicate how it ill measure a "sut~stantial impact" on the sou4d development of an entire city which the project section or neighborlfrxxl is `required to mak~? The second general requirem~nt reads as follows : ~he rebuilding or restoration of sections or neighborhoods in accordanc~ with the pro- gram will contribute to a weji-balanced city , with a~Iequate public facilities (including those needed for transportation, education, and recreation) , commercial facilities adequate to serve the residential areas, good `access to industria~E or other centers of en~iployment, and housing for all income levels ; , I Can the Department spell o~ut for cities interested n this program wl~at is meant by a "we1i-bala~ed city"? ~Does the requirement that fthere be housing for 1 income levels m~an that housing must be `fi4rnished for all income evels within the project area or within the ent~re community? PAGENO="0115" I r 109 DEMONSTRATION CITII~S A D URBAN DEVELOPMENT Th~ third requirem~ii± p~ovi~e t at there be "maximum opportuni- ties for employing reside~its ~f th area in all phases of the pro- gram ~ ~ ~." Is this meant to add a i~ew ~itze partioipation provision to each of the Federal program~ which p t~ tially might be drawn upon and utilized in a cities demoi~stratio r~ ram? The seventh requireni\ent is t ` t 6 program be designed to "as- sure maximum opportur~ity in t ~ oice of housing accommodations by all citizens." Inasmuch as State law~ vary It r spect to open x~cupancy, can the Department indicate wl~ether i ut nds to favor plans from cities where open occupancy is po~sibl ~ ~ n is providea for in th~ plan, as against those cities wher~ o~cu$ y s not 4~i the ordinance or other- wise in the statute book ? *~ Mr. BARRETT. Would tI~e gentle i~ icid ? Mr, ASHLEY. I have tw~ n~ore, .~ d hen t would be. very happy to. The final requir~nient ~sta~es t t he pi~~am shall meet "such additional requiremen~ts as the See e ~ may ~tabl~sh to carry out the purposes of this act." ~ Is it contemplated that .~ucI~ ad i i~ al requirements wo~ñd be sub- stantive or procedural ;~ c~n the p rtment ~ in~licate the kinds of requirements th~t might l~er be i t ,~ riced pursuant to this section? rfhose are some of the ~uestion ~ t ~ I have with respect to these seven general criteria. Now I will yield. Mr. BARRETT. i: w~s j~t~$t ~ go~ig t ~ g~$r~I know the gentleman has many morethingsto as~-4I. w.i~ ~ ug to ask if he would submit those questions to the Seore~a~ry. I ~ ti e Mr. ~oa~rd is trying to take it down. Mr. ASHLEY. I have a copy of ther~. I ould just as. soon read them. Mr. BARRETT. I think it might be n~o e ccurate. Mr. ASnLEY. As I say, th~y will 1$ a~ ilable for the record. Mr. Secretary, subsection (c) on p4 e ~ of the bill indicates that the Department will give maxi~rn~ c~u i~t i~ation to four criteria in reaching a determination as, t~ w~iicb bi ie ~ will be selected. Under the first, consideration is given td whethe~ `s~1 stantive local laws, regula- tions, and other requirements\are, or ~ n ~ expected to be, consistent with the objectives of the pr~grarn." Again does this refer to si~ch loca~ l~ s as ~night relate to open occupancy ? Can the Departi~nent in~Ei a~t what other types of sub- stantive local laws, reguiation~, and ot~ i~ equirements it has in mind that cities must be expected to i~sp~nd t~ Secretary WEAVER. Do you ~visii th~t td b~ submitted also? Mr. ASHLEY. Yes, please. Secondly, consideration, as I said, i~l b directed to whether that program will enhance neighborthoOds b~ a~ lying a high standard of design. \ Is it contemplated that a neighborh~o lan will be sufficiently in detail that it would include de~ig~n ctnce~t ~ The fifth consideration is i~hat~ the pr~g a be consistetit, with com- prehensive planning for the entire urba~ or metropolitan area. Again, does this mean that \ compr~h i~ve planning will he a condition precedent to project akprbval, d if so, does such compre- PAGENO="0116" I 1 10 DEMO~STRAPION C1~t~1~s AND UR~AN DEVELOPMENT hensive planning have to be hi being or ~n it be undertaken in con- junction with the neighborhood project ?~ I In other words, must the local community be engaged in a CR~P, or in metropolitan plaaining ? Just what is the position of the D~part- ment with respect to this requirement ? (The info~rmation requested follows:) ~ ~ ThE SE~RF~ARY OF Housr4G A~ URIBAN DEVFLOPMENT ; 1~7a~Mngton, D.C., March 22, 966. Hon. ThOMAS L. ASHLEY, ~ Hou80 of ~epre~entati~ve~, ~ Wa~hin~gton, D.C. ~ Di~R Mi~ AanLEY : During the course of~ the February 28 hearings on ~ the Demonstratjon~Oitie~ Act of i96~(H.R. 1~341 ~nd ER 12342) you reques ~ d writ- ten comments to a number of questions on th~ general criteria which a c ty must meet in order to qualify for assistance under that act. The questions u posed and our comments follow : . Question. The first requirement is that the~program be "of sufficient m gnitude in both ph~ska1 and soemi dimensions (1) t~ remove or arrest blight a d decay inentire se~Ions or neighborhOods ; (ii) to4rovide a substantial incre ~ se in the sup~vly of st~mdaH houS!n~ o~t~ low and n4derate cost ; (iii) to mak . marked progress in ~erv1ng the poor and disadvanta~d people living iii slum an blighted areas wit~ ~ vtew to reducing edu~tt1onaJ ~tsadvantáges, disease, and enforced id1eues~ ; ~u~d (iv) to make a substantial ~i~pact on the eound devel pment of the entire city." ~ I ~ I wonder, Mr. Secretary, If ~rnr Departin~nt can furnish guidelines s to what is mesiitby"entlr~ secUou~ or i~ieighborhood~"? Does the requirement that a substantia' increase in the supply o standard housing of low and moderate cost be provided pertain to sections o neighbor- hoods where current density levels are a~$ady high? If not, does tl~is require- ment mean that there must be a substai~t1a1 increase of standard ~iousing of low and n~oderate cost in other than the ~rojeot sections or neighboi~hoods? ~ i:~ the L~eparlinient able. to indicate how ~t will measure a "substant~al impact" on the .sot~nd development of an entire cit~ which the project section is require~l toniake? ~ ~ I I Ane~sre~ The term "entire sections or fnelghborhoods" will be in1~erpreted in terms of the specific city Involved andtlts particular neighborho$ patterns. The intent is to deal with total cohesive ~treas rather than just sma~1 fragments of a few square blocks. ~ In his message transmitting recomm~pdations for city demon tration pro- grams, the President provided general crteria of what was intend d. He mdi- cated that a clt7 program could invoife ~s much as 15 to 20 perce t of the sub- standard structures within the city. For the largest cities, such a p ogram might involve a total of 35,000 dwelling units. ~ For a city with a populati n of approx- imately 100,000, the program might invo've 3,000 to 4,000 dwelling nits. The p~roposed requirement that ther&be a substantial increase n the supply of standard housing of lo~ and moder4te: cost is intended to appi to the corn- munity ~ a whole and not just to th~ ~rea of the demonstratio . We expect that th~ bulk of the new standard boi~ing of thia category woul be provided either through rehabilitation of exietin~ housing or the constructio of new lions- ing in the demonstration area. Howe~r+r, if oneof the problems of he deinonstra- tion area Is excessive density, then a h~c~ssary part of the progra would be the reduetlon of that density and the prevision of housing in othe parts of the community. It should be empbasized~ that there is no requirem at that all of the activities of the local demonstration program must be carried out within the boundaries of the demonstration area. Some will be carried ou in other parts of the community with the intention that they would have bene~IciaI impact on the d$nonatration area. . . I A demonstration program will b. making a "substantial i~mpact" on the sout~c~ development of the -entire cityjif the major social and p ysical improve- meht~ lieing made in the demonstraiflon area or areas will ma e the city as a whnl~ a betterplace in Which to live a*d work. Qu~stion. The second general reqjilrement reads as follows: the rebuilding or re~toration of sections or neighborhoods in accordance with he program will contribute to a well-balanced city witjh adequate public facilities (including those PAGENO="0117" facilities ade- ~r centers of rested in this program what is oi~ie levels mean that or within the entire be its -- r Fed- a conscious he maximum *eet "such ~urposes DEMONSTRAT URBAN ELOPMENT 111 blaterL Answer. ~U to serve as a PAGENO="0118" 1 12 DEMONSTRATION CITIES AND VR~AN DEVELOPMENT of unftire~eenhiopho1es. There is no intentiGu ~f using this prov~sio~I to I pose new substantt~re erit~iria. ` . . Question. :S*bseetio~i (c) on page 5 of th4~ bill indicates that the P part- ment will gi~ ~naximum consideration t~ fonrf~1,iteria in teaching a clete mina- tion as to wlih~h cities will be selected. Und*'the first, consideration is given to whether "stibstantive local lsAvs; r~gn1att~rls aild other reqnlremen s are, or can be ex~éeted to be, co~is~ent with th~ sbjeetlves of the progra ." Does this refer to such local laws as iuigb~ relate to open occupancy ~ Can the Department indicate what other ty~s df substantive local laws, egula- tions and othet requirements It has in mind? Answer. There is n~ requirement for the. general review of local 1 ws or regulations. The Department will be eoneeri~ed only with those laws a d regu- lations which have a bearing on the capk~Ity of the city to carry out its demonstrntiun, * snch as its housing, building, ~ and zoning codes In so e cases, the existenee; of an o~n oeeupancy law mitht be an ementiai elemen in the capacity of ~ elty to meetthe goal of maxfi1iu~n opportunity in the c oice of housing ac&hnmodations by ~t1l citizens. 4lowever, as indicated ear icr, the existence ~f such a law is not at all mand~txry if alternative approa hes' are provided. ~ ~ ~ ~. I Que~tio'n. ~ Secondly, eonsideñition will b~ directed to whether the program will enhmieè neighborhoods by applying bjgh standards of design. Is it contemplated that neighborhood pla*~s will be sufficiently in d tail that they will include design concepts? Answer. There is no in~tndatory desig~ requirement in the act. Rather, the Secretai~y is directed to give co'ns&derfrtion to local efforts to a ply such standards In the carrying out of its denwnstration program. To t e extent a city proj~ose~ the appUca~tkm of high design standards, the Seer tary will recognize this as an effort tOWard achiev1r~g the objectives of the act. Que~tlon~ The fifth consi~emtion is t~t the program be consi tent with compr~hén*ive planning for the entIre nr*au ~r metropolitan area. Does thi~ mean that comprehensive plai~hig will be a condition p ecedent to project a~tval ; if so, does imch eompr~h~us1ve planning have to e in being or can it 1~e undertaken in e~njunction With the neighborhood proj t? Answ~r. There is no inaru~atory plann~ requtrement in the act. However, the existekice of apØ&prtate plans and a~continu1ng planning effort are indica- tlons of the extent to which the city has pommitted itself to sound evelopmen't policies and they are matters to which th~ Secretary will have to giv considera- tion. Equally, the extent to which the city's demonstration proposal `s consistent with comprehensive plannipg for the eiitire urban or metropoilta area is a matter Which will have to be considerud. Sincerely yours, ~ ~ I ROBItEI~ C. WEAVER, ~ecretairy. Mr~ 4~srn~w. I am interestec~i, Mt. Secretary, in how an where the $2.3 billion price tag c~ne from ~n~this program. Refet'riiig again to the New Ycfrk Tithes piece ~ of Sun ay a week ago, it was suggested that it was 4rrived at by determini g the total cost of all the programs, bearing ~n mind that such prog ams would affect a certain percentage of the dommunity-a certain p rcentage of dwelling units, people-that the cdst will be $5.6 billion, a d that there would be derived from resale of land and improvement some $3 bil- lion~ 1~aving a net of $2.6 billion, the local contribution t ward which would be $300 million and `the Fetleral share $2.3 billion. Would you comn~ent on this, please ? S'e~retary Wi~tvi~ Yes. As~ far as the figure of $2.3 biljlion is concerned, that `s an estimate made by the Department on the !basis of the best info ation that we currently have. Obviously it ist an estimate. It is not a firm figure, because, No. 1, we don't know ~fhich cities will participate. Mr. ASHLEY. I am interested in how it was arrived at PAGENO="0119" DEMONSTEATIO]~ CITIES N URBAN DEVELOPMENT 113 Secretary WEAVER. It ~vas arr v d t on the basis of assuming that anywhere from 60 to 70 c~tie~ of ri us sizes were to participate, and assuming further that if they we e th articipate, a certaii~ number of dwelling units would be invdlved o any to be rehabilitated, and so many by new constru~tioi~, apd a ~ t at ` certain social services would be provided, and that all of thi ~t vity would result in a certain amount of Federal grant~u-aid p gr ins. The total of the required local contributions in tho~e grant i ~ d programs was then summed up, and 80 percent of tha~ t~tal e ~ e the figure which is the $2.3 billion figure. ~ ~ ~ ~ ~ Mr. ASHLEY. Isn't it tru~ tl~at t ~ ~ w York Times piece that I am sure you read as I did indi~ated th .t th impact of the program would be in the neighborhood of ~6 billio Secretary Wii&v~. That is the ~ ork Times figure, and not our figure. Mr. AsiiL~Y. I would be ~nterest d ii~ a further detailed account of how the $2.3 billion was arr~ved at. ~ interesteç~t in the toted dollar impact of this program. The $2.3 ~ ill on represents, I understand, the Federal contribution to~vai~d th ci~ es' share of the various pro- grams. Is that not so ? ~ Secretary WJ~AVEI~. No, si~. ~l'he .~ illiori represents the amount of supplemental grant that ~ou1d be ~v to the cities. That in turn is based upon the amount of\the no ~ ~ eral cost of the grant-in-aid Federal programs that woul~ be mv 1 e in these demonstrations. Mr. ASELEY. Let's take ax~. urban ~ r~ al project which is a part of a demonstration cities prc~gram. ~[ ~ ~ is ~ $80, million project, if the net project costs some $80 çmil~ion, a d there ar~ no noncash credits available, the Federal Govei~iment ul buy-let's make it $80- would buy $60 million, and tl~e local 11 e responsible for $30, isn't that correct ? ~ Secretary Wr~&vi~. That i~ right. l~ local then would get 80 percent of the $30 million in ~ddftion. Mr. AsHLi~y. Yes. * ~ I don't see where the disagr~en~ent a ~ from a moment ago when I suggested that the $2.3 bi1lio~i i~ goi to be corrected to picking up the local share of the various ~edera1 1 n rograrns. Secretary WI~AV~R. The ~ dif~ere~ce s t at it js not as big as it should be, it is 90 percent. Mr. Asnu~r. All right. * Pi~su~nabl tl~ re has been serious con- sideration given to the dollar in1~pa~t to ~ e rogram. I don't see how the dollar impact would be ver~ much 1 s t an $8 or $9 billion, based upon-and I am talking about the tota e eral contribution toward total local contribution, or sho~ild I s , I addition to total local contribution.. . Secretary WEAVER. We estim~te-an th se are all estimates, be- cause I cannot give you firm fig~ires no e estimate that the total impact of this will be from $5 to ~10 billi . Mr. Asni~y. I would ap.precia~e it~ if t e ~ ould be provided for the record the basis for that assumpl4on. Secretary WEAVER. In roun4 r~umbers e ould be happy to give it to you. . PAGENO="0120" I ~ 14 DE1~IONSTRATJON CITIES AND T~RBAN DEVELOPMENT (The information requested follows Di~aIvATIoN OF $2.3 BILLION ESTIMAPE1FOR SUPPLEMENTAEY GRAN/PS The basic financial element In the Preside~it's proposal for the demo4stration cities program is the authority for supplemehtary grants equal to 80 p~rcent of the local share of Pederal grant-in-aid programs that are utilized in c ~inection with a demonstration city program. Estimates were made of the local share of such prograths in cities of different sizes that might constitute the has against which 80 percent would be applied to determine the amount of the suppi mentary grant. I Such ~stimates were made for cities oft a few size categories. I was ae sumed that about 10 percent ~f the city pok~uiation might reside in t e demon ~ ~ stration area and statistica1l~r the averag~E family size would be 3. persons (except that in cities of ~~fl.der 50,000 the entire city would be a dem nstration area but only 3,000 families would recçve social service and w lfare as- sistance ) . Three basic components of Federal gi4tt-iri-aid assistance were stimated. After examining the levels of major types of federally assisted capit 1 improve- ment programs in a typical city, estimates were made of capital improvement programs that would be concentrated in or serving people from the ~Iemonstra- tion project area. An average per family. amount of social service arid welfare expenditures under Federal grant-in-ald~ programs was then esti~nated and used to artive at a total social component hgure. I On the basis of the statutory matchin.~ grant formulas for each categorical Federal g~ant-iu-aid program involved,. lJhe local matching share ~Tas derived and 80 pe~rcent was applied. When this $-ocedure is u~sed for 60 to/70 cities of different size classes, approximately $23 billion will be required ~o fund the program. ~ I I Both the size distributio~i of cities add the dollar amount per ~ity will, of course, vary from estimated amounts used in a hypothetical frame~rork that is used to approximate the dollar size of The program, but the $2.3 lflllion figure was the judgment figure arrived at for a program of 60 to 70 citi~s in all size ranges. TOTAL PROGI4~M 5UPPOBT The tQtal activities involved In the dejnonstration program will e much more than is ropreseiited by the $2.3 billion f1~ure. The Federal share o grant-in-aid progr~ai~s ig larger than the local sharefln almost aM instances. ~ erefore, as a minimu4n, the total impact would be ni4re tJia~n twice as great as t e $2.3 billion, or at le*st $5 billion. ~ When consideration is given to addijtional State, local, and prvate program activities that will be brought into t~e demonstr~itiotn area, th total impact might agahi be twice multiplied. Pe~ example. if rent supple ~ out or below- market interest rate housing is built fc~r low4ncome people in the demoi~stration area, it will involve either private financing with FHA mortgag inisurance or FNMA. special assistance funds. It will n~t involve a Pederal g ant-in-~aid pro- grain with matching Federal and local shares. There will also e a good deal of prh~~te Volunteer welfztre work acth~ity whieh does not come un ~ or any federal grant-jn-aid acthity. It is reasonable, therefore, to estimate that the total jmpac~: ~f th~ demonstration cities pr4gram over 5 or ~ years w uld be between $5 itW ~$1~ billion. I * I M~. Asrn~r. You referred t~ o&itbniits of last sum4ter which we know are a matter of deep coneeifn to you as they are to a~11 of us. Isn't this the kind of situation that thi!~s prognun is and shouldj be directed to counter? ~ ~ I Secretary WEAVER. Yes. I w~ou1d say~ if you recall t~he President's message, when this program was first announced, one o~ the objectives of the program was to give hope to those persons who ~re now in the siur(is and blighted areas. ~ . I Mr. Asm~ny. How does this bill, then, distinguish b~tween a Watts type situation and a~ situation un another part of the country where you don't have the incipient r volution and bloodshe that you have in ~t Watts or a Harlem ~ PAGENO="0121" DEMONSTRATION CITIES\ ~ URBAN DEVELOPMENT 115 . Secretary WEAVER. I think th~ E~ I the incipient situation in prac- tically every one ocf such ar~s. ~ h~ k that when you have a country such as ours which is aØient, th~ t en the people who are suffering in slums and are in misers and in ~ ye y become much more conscious o~ their status tha~i they ever w~ ~ b ~ fore. So I don't think that we can identify every one of 1~hese cit~ ~ the ones that m~y explode next,. or something of that sort. Mr. ASHLEY. So there ~s r~ot gk~i g to be an effort to measure the kind of tensions in the ~yar~ic~lar o ~ ~ unities that might bet-and cer- tainly are in some instanc~s-~--- Secretary WEAVER. I dc~n't thi i~ th t we can do much more than make a rough measurement. The e ar many people who are author- ities in this field who had i~ id t~ ~ tl~ t Watts would e~rupt. They thought it would be some place e ~ . ert~ainly nthody that I have seen who has written in this area e ~ ed that Rochester would have the difficulty that it did ha~e. ~ So ~ th nk in the first place you have got a very, very uncertain ci~iteria t II with. And secondly, I thhi~k th~t n~t ~ 1 i~ here a ~robIem of those cities which have this type of situ~tion w ~ re i~ing to deal with-but, also, . .. there isthe. question which cities a è pr pared to do something about it effectively. . Mr. BArni~. ~ The time of the gen e ~ has expired. Mr. Moorhead t Mr. MoonHj~D~ . Thank y$,. 1~r. 0 ~ ~ I ~ Mr. Secretary, I am impressed fa o a ly with this office of Federal coordinator, whatever you e~td ~p c 1 i~ him. As a matter of fact, it would seem to me that we~sh~uid ire such a coordinathr, not just m demonstration cities, but iii all cit~e ere we hwve more than one Federal Government aid prOgram ir~ xi tence. Had you given any consideration to that ? Secretary WI~AV~R. Y~es. ~Ve exp~ s regioiis are strengthened and as we move to them that *e wouldE ~ ble to have in certain larger urban areas an official of th~ D~par . eal who would serve more as Mr. Fino has suggested a~ a~i in'f~r tiô c~fficer rather than a co- ordinator of a specific pr~gra~n, but 0 . ottid also take on some of the genera.l coordinating functions wi h re pect to clearinghouse serv- ices on Federal urban aids. Fo~thc~e r a~ hich are smaller, we could have someone working out of 1~he regi nal ffic~ to perform this func- tion for a number of areaS. 4ncl I t ~ ~ k his is inevitable in the re- quirements under the law that are ma ~ m~ er the Department. And this we are thinking very seriou~ly ~bou ol g. Mr. MOORHEAD. I notice front the act hi h I thin1~ of as the Metro~ politan Development Act, , ~ i~he fact \t at you . established a spethal assistant secretaryship to .t~ke ~arè of ~h etropolitan development, that you consider this very important. \ ~ t I would like to ask you or Assistant Secretary Haar, 1~Vhat ar~ h problems that you have faced in the metropolitan ~eas, and Nq. , ow can y~u hope to sOlve the problems by this legislation ? * \ Secretary WEL~VER. Let me speak fir t t~ the problems, and then turn it over to Assistant Secretar~y Haar. I think that perhaps some of t~ie most s'gn fiçant and difficult prob- lems in the process of urbaniza~ior~ are t e prthl~ms which we call those of metropolitan developme~it. I t i l~ that this starts from the indisputable fact that here we bav~ a oil eration of government. PAGENO="0122" 1 16 DEMONSTRATION ~I~IES AND TJREAN DEVELOPMENT a multiplicity of governments, many o~ which do not have su cient scope to deal with the problem by themselves, and the result s, you have a series of partial and sometimes inconsistent approa hes to problems that cut across a broad area. Secondly~ we have the effect that if ~c4e look into the future, ith the great incre~se in urban population wI~ich is inevitable, we w 11 have new patteiths of land use, new patter4s of housing, new pat ems of community~ facilities which will be est*lished in parts of this ountry where `there is now no effective unit of government to assist and to help. So this is the broad dimension of tthe problems that we re con- cerned with. ~ And now I will turn it over to Assistftnt Secretary Haar. Mr. MOORHEAD. Mr. Assistant Secretary. Mr. HAAR. Thank you. I find i4 very difficult to amplify oii that fine statement of the See- retary with respect to the broad aspe~th of the issues of met opolitan development. J But I would just like t~ add a few ~f the details here. W have the questionsof the various State and i$aland Federal aid in t e metro- politan areas which do not effectively iwerk together at times. And part of our issue here, due to the lack o~ Government coordina ion, is to make sure of efficiencies in the expenditures of these funds to ake sure that the road programs work with the mass transit program , and that they work together with the lOcal c~trois `and the local d sires with respect tb their land-use developments. So one of our primary concerns here is effiei~neies and ec noinies in the. opeiiation of the Federal progr~ms which deal with m tropolitan areas. ` ` I ` We a~e also much concerned withfgetting a dialog started among the different local govermnent units w1~iich `are dealing with t e questions ofwe}fare~ how can we handle th~reat n~d~for public f ci'lities,~he great need `for rebuilding and almost doubling our presen public fa- cilities, our present cities, `our infra~structure, the sewers, th water, the schools, out in these areas where people are growing and developing. And i: think it is these problems ofefficiency and coordinat on and giv- ing a ~hance for the people in th~ local metropolitan are to express their i~eeds and their desires effe~tively and to `have a v ice in `these progr~ns and their own destinie4 that is the important political ar- rangei~nent, the portion that coul~ create a federalism t at will have to be developed over the next deea~e. Mr. MOORHEAD. Thank you, Mr~ Chairman. Mr. BARRETT. Mr. `Stephens? Mr. STEPHENS. Mr. Secretary, ~the question has come t my mind in respect to the demonstration cities `and blighted areas i one that we have had our difficulties with in the State of `Georgia an in the rural communities. In some of our ~ómmunities the blight d areas have come about by virtue of the fact that there `are no longer any economic oppo~rtunities in those areas, wit~i the change in farming and the `other ch~s that are taking place. fThe people `have come ` nto our cities from the smaller coiimunities, l~eeause they do not hay the economic oppertunities. In some of the 4ties blighted areas hai e occurred be- cau~e in `those parts of the cities~where you have bhghte areas no ceo- nomic opportunities are available for people to earn living and to better themselves. PAGENO="0123" DEMONSTRATI~N CITIES A D URBAN DEVELOPMENT 117 If you take the demonstration ci and put it in a blighted area, as you have talked about, what is oi g to keep that blighted area after it has been worked over and m de into a demonstration city, what is going to keep that alive unless yo bring in some supporting indus- try, some supporting opportunit f people to earn a livelihood, that would help them better their condti ns ? Are you just going to create this new unit of a city and have o hing to support it so that it will stay alive? That is what worries me about t e roposition. Secretary WEAVER. Let me sa , ir, hat I think for the past 15 years, ever since I have been dealing th the urban renewal program, we have been very conscious of th bs lute necessity for an economic base for the city. And this is t e p&nt that you raise so eloquently, and that Mr. St Germain spoke o ar ier. You have to have employ- ment opportunities, * you have to h ye industry or commerce or both, preferably in order to have a sou a d healthy place in which people can live. The urban renewal program ha a e its contribution to this. The Economic Development Adminis r ti n is very concerned with this, also. And we recognize that this is ec ssity. There is, however, the fact that a ce tral city or a small town or a suburb, no longer has to supply al f he economic opportunities, be- cause our people are more mobil od y than they have ever been before. So it would seeni to me that citi s th t participate in this program would also have to present some evi e c that they have some planning and some programing-some recog itio of the economic base, recog- nizing further that we would not de a d, of course, and expect that everyone would be employed within he city limits itself. Mr. STEPHENS. I think that, per a s, explains it. The second thing that I would like to ask a ques io or two about is to hit upon something that Mr. Widnall talked bo t a little bit earlier. In the process of trying to work on tI~ finances of rent supplement programs. I have tried to explain th t ~ his rent supplement is not. a new concept~-a new idea. And I wou d Fke to ask you if my thought is correct. For many years-and th s i not. critical of the public housing program because I have sup or ed it, and will continue to suppoit the public housing program- ut. I have saicl-aiicl I want to ask this question iii this way, so that c II get a verification of the conclusion that I arrived at-that. in the low-income housing that we have l)rovided, housing for people of low income, we have also provided low rents in the public housi g. And have we not always had, in the public housing program, a pe of rent supplement? Secretary WEAVER. Decidedly so. T e annual contribution which is the Federal subsidy to public housing rovides for a rent supplement of a different type or form from the eut supplement that we. are proposing here. But the only way that. y u can provide decent housing within our current costs for people wh c'amot afford an economic. rent is to supplement it. And you ca supplement it through an annual contribution contract as you do he public housing, using the public agencies throughout, or you can supplement it through a rent supplement by using a combination of pu Bc money and private enter- PAGENO="0124" 1 18 DEMONSTRATION CITIES AND UR~AN DEVELOPMENT prise to build and to construct and tol operate and maintain and manage the development. Mr. STEPTInNS. Thank you. That veri1~es what I wanted. Mr. BARRgI~r. The time of the genflema~ihas expired. Mr. St Germain ? Mr. S~ GJI~RMAIN. Mr. Secretary, going back to the question ~ f my colleague, Mr. Gonzalez, public housing~ Are we meeting the ~ieeds of public housing, or isn't it a fact that we are behind and hav~ been behind ? I would like to have Mrs. McGuire answer this questi~rn. Mrs. McGuni~. Well, I think obvio~ly the answer is "No.'~ We haVe had, CQngressman, since the passa4e of the t965 act, we ha+e had applicationsi which are now close to th. 80,000-unit mark, as gainst our proraticin of 60,000 uuit~ of puhlie 1~ousing for each of the years under the 1t~5 act. And in. addition t~ that, as was pointed ut last year in the testimony, we have had in ~x~ess of 500,000 famili s who had applied for and were on the waiti~ig list for public housi g low- rent housing, around the country. Mr. ST Gi~an~rAIN. I wonder Mrs. Mc~+uire, if you would also answer the same~ qUestion with respect to housing for the elderly? Mrs. McGunu~. This is particularly ~ritical. Mr. STthnMAIN. This is within the tame category? Mrs. ~ This is particularly critical. And today bout 46 percent of~ali the applications for pubJ~c housing units which re being developedare for the elderly. I thinl$ this is because this is a atch-up program ; it is fairly recent. f Mr. ST GERMAIN. It is the greate~t program w~ ever p t on the books. . ~ Mrs. . McGuiiiE. It is certainly th~ most gratifying one, and one which the tenants themselves respond~to with pleasure and d ight and benefit. But I think there is a tremendous need for low-rent ho sing for older people and also for the handicapped, as Mr. Ashley re mmends, and for ~ number of other special ~roups. We think to ay of the Arneriea~i Jmdian and Eskimo and other special groups. We hive the special areas of nefrl. I think perhaps t e elderly is the most pressing at this time. 4nd the communities ar realizing this, and their applications are refiecftng this. Mr. ST GERMAIN. And I wondertif Mr. Slayton would e gracious enough to tell us where we stand on urban renewal, how c ose we are to keeping up with approved requ~ests for urban renewal programs. in other words, how far behind a~re we running, dollar~ and cents wise, ]~r. Slayton ? I Mr~ SLAYTON. Well, we have roi4ghly $200 million left c~f this fiscal year's ~uthorization. And we hafre in the pipeline $609 million in app1i~tions~ And we expect to ~eeeive for the balance of the year $400 million in applications. Mr. 5p G~ai~t~n~. You see, Mr~ Secretary, the reason I ask these questions is that here we are, we ai~e way behind in our pu lie housing, and we have got a lot of elderly p~ple who would like s me housing, we are away behind in urban renewal. And I think that this is quite a program, it is coming along nicely, and it has improve , and its ac- ceptability has improved, and its impact at long last i getting the people to the point where they realize its value. And I agree that I PAGENO="0125" retary is not a program ~. gram or to urban re s the basis for ~ enewal w~ .1 be t t t~-~ have got to you pointed out thi~ a refinement and an ~ does not take a: r pro rams such is, ra ~er than take ~ give very serious thought i the existing tried and true ~ Secretary V~ 119 many ways, might yors calling you, aver, how cOme i cities, and we first place, this iiblic housing pro- ograms which w lemei extr~ cost of urban Secretary to. It w~ dwellers. ~dvani you ~ 50-percent I I DEMONSTRATION CITI~ these demonstrat TT A D URBAN DEVELOPMENT I This is not PAGENO="0126" 120 DEMO~TSTRATION C1TI1~S AND UR AN DEVELOPMENT this is really a program to make real and ~`make realized the pro~nises that we have been making all this time toionrselves and to the citizens. Mr. S~ `GERMAIN. Dr. Weaver, if yoi~t could answer this o e by breaking it down into simple facts, what do we have here ? Wha will this act do that urban renewal and public housing will not do? Secretary WEAVER. Oertain things. Th the first place, for th first time- Mr. BAERI~rT. Doctor, would you yie1~ to me for just a minu e? Aren't we trying to prevent these rentjgougers from preying n our poor people ?! I am not talking about tl~e upright realtors, I a talk- ing about rent gougers and chiselers. Arid we want to give thes poor people an opportunity for decent hou~ing-~--if I may give y u one example that just came to me on Frida~ . night, an old lady a out 80 years old and probably older came to m~ and said that she pay $15 a week for housing. She has no facilities in it. ~ They have a la atory down the hallway. It is a community kwatory. And she cam to me and said thtut she would like to have the board of health corn down there, beca~ise people were~ ~throwing ftheir empty beer can there. They are thfrowing their garbage in thi~ lavatory, and she does `t have a chanceto use it. ~ I These ar~ the cases that I am sure yo~ are pointing out that e want to correct. This old woman pays act4lly$60 a month for a - by 12- foot room. And we are tr~ying to giste people like that, by t is pro- gram, a decent, safe, and sanitary home~ I think this is the heart of it, to help~hese people living in such tern- ble conditions-this is what we aretryilig to correct. Mr. ST ~b~RMAIN. Mr. Secretary, if you will yield to me no , I want to say that I wholeheartedly agree with my chairman, becau e I have a similar k~ase. Here is ~ ~I, lady whof~al1ed me, 74 years ol , with a husband ~frho is 78 years old. Thej have a third-floor a artment. The husl*nd's leg was amputated Mfr~day of last week. e cannot walk. Atid they have to go across t~ie~hall to get to the sa itary f a- cilities. She said, "Will you please ~get us into the housin -for-the- elderly project ?" I. have to say, "I i~m eorry, we are overcr wded, we doi~'t have enough units." And so I would answer this type of problem with more pu lic hous- ing for the elderly, and let's keep u~ban renewal going. I will defer to the Secretary. Secrethry WEAV~. This is not g~ing to take away fro the pro- grams t~iat I have. ~ I think I can illustrate by asking you a question. Wh will this do that public housing can't do ? ~What will this do that urban re- newal can't do ? ~ In the first place, as far as publih housing is concerned, one of the great unsolved problems in public housing has been the f ct that we have yet to learn how to handle th~ social problems that a e involved in thea~rea that we deal with in public housing. Originall we didn't have this. Wc had tenant selectio~i. So we didn't have apy problem familie~s. We have problem famil~ies now. You cannot ~Eo this on a hit-am~-miss basis. You have got~to have a comprehensiv~ approach. This i~ why we are hiking in an ai~a wide enough to mak~ an impact. And w~ are going into that area tojwork with the people w o are there.. We ar~ not only going to rehouse ~them in that area both emporarily PAGENO="0127" I DEMONSTRATION CTTIE~ ~ URBAN DEVELOPMENT 121 ax~d permanently if the~T:. care t~ e rehoused there, but we are also going to deal with a series qf pr~ le s that impinge upon them, and they are more than just tl~e p~ob1~ s ~ bad housing. Now, as far as urban r~ne~wal ~s co cerned, urban renewal, I think, has made a signifiCant co~atributi~ t the economic base of the City. It has made a signifloant oontribu~i ii o better land use. It has made a significant Contribution tp buildi~ rn re middle-income housing, and higher priced housing. ~ We: have\ t 10 in the last 4 or 5 years, cer- tanly since I have been in Washing~t n, o make it house more people of low and moderate income, and to ~ i~ less e~conomic displacement in the sense that you tear do~rn am ai~ ~ ere poor people live, and you rehouse either commercial activiti4~ ti~ re, or you rehouse industrial activities, or you rehouse h~gh~r in~o ~ people.: The demonstration cities till says\t t e mayors, if you want to: take on these harder problems, ~re ~re g~i ~ to give you additional means for doing it. And thi~ is ~ we ar~c ~ ii erned with this new program. We want to find out h~w it 4an be d~ e I 50, 6Q,~r7O cities, each one going at it with different t~chx~ique~, c1~ erent. apfroaches,, and each one we hope proving that it c~n be d~i . Then we hope that it can. be `don~ tl~ oughout the United Sthtes. The only way we are going ~o get i~ d o~ slums in this Country is by taking big bites, and by wo:rl~in~' at 1 o the problems, not only the physical problems but the so'4ial, the ~ *omic~ and the human prob- lems that are a part of the slur~s i~ bli ~itè areas. Mr. ST GERMAIN. Mr. Secr~taz~y, I 1~ i~ that one of the big prob- lems facing the cities,' if you t~ke the r east section of the country particularly, is the factthat f~r 2 yea ~ w~ haven't been able to water our lawns or wash our cars. ~ The~ is ` ~ y water. And I am won- dering if within your legi~1at~on ther .~ provision for a regional water compact-not water faci~iti~s, b t Jo ation of water. Secretary WEAVER. All I cai~ say to ~ ~` Mr. ST GERMAIN. We have l~ad a lo d ought, you know. Secretary WEAVER. I think t~at the ~ a~ many problems. There are problems of river basins; .&nd the ~ ax~ many problems that im- pinge upon our cities that no o~e ~ppi~ oh is going to solve. This one comes nearer to solving rno~e ~f th~ e roblems than any other. Mr. ST GERMAIN. Is this parI~ of it, ~[ . ecretary, urban renewal and public housing ? Are these sep~trat~ i e s ? And I think we are looking at a package here, the soOial, ~ o~q mic, and housing-the three necessities of life-food, c~othing,\a ~ ci shelter. Secretary WEAVER. Under the\ m~trop~ it approach we will be dealing with that. But I don't 1~hir~k ydu c~ e~ect any one bit of legislation to solve all the probier~is of th cn~ try. Go back to your earlier statement that ~ maybe th~ pi~ice 1~ b chops is too high. I don't think this program can ~ s~lv~ tha . ~ can help it in a~ way by getting the people in a better position t b able to pay for food. It can help solve the water prol4em by g tti g water distribution lines and better water and sewag~ dispos 1 ~y tems. But it cannot do all of them. And there are limits to it s omprehensive as it is. Mr. BAERETT. The time of the g~ntlema a~ expired. Mr. Reuss? Mr. REUSS. Thank you, Mr. Charman. PAGENO="0128" I 122 DEMONSTRATION CITIES AND U~BAN DEVELOPMENT Mr. Secretary, this morning we were exploring your views on the four amendments proposed by Mr. Ashley, Mr. Moorhead, and my- self. We discussed the mass transit research program. Let me now go to another amendment, having to d~ with the central coordinating function of the Department of fflJTD. j It is perfectly obvious that a great many~ urban functions are not ~n the Department of HTJD- water pollution, we are told, is to go lo Interior, the war on poverty is in the Office of Economic Opportunity, and our expressways are in the Department of Commerce-and it was at least hinted this morn- ing that now mass transit is going somewhere else, in tile Depart- ment of Transportation, possibly. Our first amendment, recognizing this scatterization of urban func- tions, would impose upon the Secretary of HUD the task of coordi- nating with other Departments the ~irban aspects of these problems, and if the Secretary of ThUD be1iev~s that the Department primarily handling these aspects is doing it i~i a way inimical to the national interest and the needs of the cities, fhe should take the matter to the President and get the matter decided, Are you for that or against it? Secretary WEAVER. As with au of the amendments that you have proposed, I am for them certainly in principle. And I am for them as far as the results are concerned. I have some questions again as to whether or not it is the most effective way to accomplish the joint ob- jectives that we have. I call to your attention the fact ~hat this new Department has just been established. And that the Ie~islation establishing it says : "The Secretary shall among his respon~ibilities exercise leadership at the direction of the President in coorAinating Federal activities affecting housing and urban development." So that we now have a charter for doing this. I think that the administration is now in the process of seeing how that charter can best be carried out. I think it is premature for us to say that this particular proposa~I or any other proposal is the means of carrying it out. At the Washington level there is a question as to whether or not you accomplish by flat the objective t~iat you have in mmd. It' may be that this becomes necessary. But I ~ould think that yrni would attempt first to try to get some type of c~operation short of having a law that says.you do this, that, or the other. In the field where, after all, tthe problems of coordination become really most significant, we are m'oving in this direction, and the demon- stration cities program is a very great breakthrough in encouraging the local communities tocome in with coordinated ]ocal programs, and setting up machinery to make sure that the Federal agencies are re- sponsive to that. I would think that here there is the matte.r of tech- nique and the matter of timii~g. And there is no difference in our opinion as to the ultimate res*lt. As to whether or not this is either the time or whether or not th~ idea of passing such a law as you sug- gest is the technique for gettir~g it done best is something that I would have to certainly sflidy lorige~ than I have had a chailce to study this. I certainly think it is something that the administration would have to look at in terms of what it is now thinking about, and preparing to do in this area. Mr. REUSS. I do want you to study it further. But if you come up opposed to the idea, I would like to have you state in particular PAGENO="0129" D~MON~AT]~Q~ C~TIES ~ ~ N URBAN DEVELOPMENT * 123 how you think tha~t Congress sh~u d est easy with * a situation where the ~ Se~retar~p o~f Housing and T~r ~an Development is ~ under no con- gre~sienaJ1y imposed ~b1i~at~on t~ ta e irnportaiit matte~rs in dispute. with other agencies ~to theçhief E~ i~ ive for i~eso1ution.. Secretary WEAVEI~. :1 t~in~ th~t h has son~e ~suoh ~ obJig~tion be~ cause he has to e~ercis~ 1~der~I~ a~t thë~ throct~on ~of the ~ PresideM in coordinating Federal a~tivities\~ e ting housii~ ~r~l ~urbaz~l~e1- oprnent. In addition, ~1M~re ~iU\~ . n Assistant . Secretary whose main concern will b~ this ~a'rticui~ ~ ea. I think there is adminis- trath~e machinery mcrvin~g ~to~v~rd\ ~ b~i . Whether it is moving fast enough or not is something I would a e to 1~ok ~t aftei~ a ~Eittle more experience and more cogitation. Mr. Rr~trss. We will a~ait yo~r r~ ~ oi~ eon that. The second proposed >au~en~trnent h~ been alluded to briefly by Mr. Ashley. That has to 4o ~ith ~ e ~moustration cities prog~añ'i and the reaction of some ofu~tothe ~te ia~ forqualifyi~iag~cities irnder this program. I have a fe~ onr~a ~ ~ he administration~s ~bill that this whole thing is somewh~t o~ a ~ ~ ~ , , that thestandards are so vague and general that 3 cities migh p ly, oi~8fJO. ~ `~Fhere is a point of equity, and a point, too, ~n ~e~p n ~it1~ *ith the tities. After all, if you ~ha~re invested the~ ~vith t ~ . rs~sta~ge, 9Opercent plan- ning assistance, it is geing~\ to be ~r ~ disa~~intii~g to some if they come in and are told, "T~iis is o I. ~ r 60 cities, and yoti are the 200th city, and while your pi~ogram ~ h ically complies, we are not going to admit you to this ~lect co s y, and you ~tl~u~s ~on?t get any of the 80 percent rnatchi~g\f~mds." ~ ~ , . ~ ~ . Therefore, our idea w~s to~eef up ~ i~ i~ri~ ~p~m~kt~arthat the demonsti~ation citiespr~gra~nwas a ~ ~ ~f~otr~se~tiinè t~ad ueigh-~ borhoods suffering from socia.l\ and ec ~o~t'c tensious. ~ And then cwe list them. It is not neces~ai~y ~fcr us t : ~\. hrough with them~again. Your only objectir~n to that t~ti~ mo ~ n~ when ~ ~fr. Ashley raised this, as I re~all, was that y~u Were af a~ d at this lan~uage would present a situation whereby city X co ~ ~ to yoia. with its second or third worst social tension ~ and . e~ ypi~ would h~ve to say "No" to them, that you could . c~ns~der Q ly the~r wç~vst. Such w~ certainly aot ir~ ~e~in~I of ~ e~y, J~{oothead, abcl I~euss, in drafting this language. An~I ~ I cane ~ t ~ ftd~ ph~s~ ~w)aich icon- duces toward that interpretation 9f it. Let me put to you this questioi~. ~f t ~ ~ i~ uage is clea~ly purged of any suggestion that you c~nnot aid ~ o4 ~ or third worst slum i~ a city, if that city. elects t~ ~prose~it it, ~nd if .`t otherwise q~ualifies, if the language is cured ~ oJ~ that a~Jieged pe. thaent, you~ would not oppose it? ~ ~ ~ , Secretary WEAVER. Not at all. t do `t tWnk it is necessary, be- cause I think ~f you read the er~beria that l~ ye, which is to provide low- and moderate-income honsir~ in a su t~t tial amount, to do cer~ tam of the social activities and sOJve ce ~ ia f the social ~problems, to assist disadvantaged people bapk into ~ ~ e ainstream of soci~ety, with the emphasis that it has updn the ~1s d ~taged I tiair~k. that the net result as you ~have interpret~d youri a ~ e~ge aii~ the langu~ge. that is now in the bill would be e~att1y t e sa ~ e. Mr. Thwss. I am delighted to he4r that. e~ use to our mind, it is necessary to work out a program i~hi~h h cle r criteria and where 60-878-66-pt. 1-9 PAGENO="0130" 124 I~E~ØNSTRATION ~JITThS AND U~BAN DEVELOPMENT anybody wh~ qualifies may ôome in forkhis share of the $2.3 b ilion, or whatever i~n years to come practical e~perience tells us that w need. If, for example, we find that there are frily a few cities qualifi d, al- though I don't think that it will be the base, when we don't nee any- where near $2.3 billion. If on the other hand, as I suspect will be the case, there are many potential Watts areas around the country, t en we will need mt~re money. ~ . What we wanted to do was set up a c1~ar critenon so that all e igibles might qualify, and get rid of the lotte~y element that we perh ps un justifiably ~aw in your draft. And n~w you tell me that yo didn't have a lottfry in there at all Secretar~r WEAVER. I don't want t~ give the wrong impre sion on this. I want to say that not only a$ there the criterIa you wish to write in, which I understaiid to now rek~uirethat there be an a a which is a blighted area, or a * slum area wi~th very serious social roblems. This is something that we accept 100 percent. However, we iso' have other criteria- ~ ~ ~ Mr. R1!~tr~s. Those we would keep, ~e would not disturb t ose. We would sir~pJy add to that. ~ . ~ Secret~,ry Wi!~AvEi~. But thepoint ~want to make is this : hose pro- ~posals `v~ltiich may meet the criteriaw~dch you have described could not qualify ~ tinder this progrrn if it difli~'t meet the criteria ow in the bill as well. ` Mr. REUSS. Entirely s~. ~ My time is up. ~ ~ Mr. BAREETT. Dr. Weaver, I havera shortquestion. We willagain continue the 10-minute rule. And I would ~xpect that you are becoming exhausted now. But the members are i terested in asking you more questions. Seor~tary Wi~virn~. I am delighted to have it, sir. Mit. tBA1~EETr. I think you real~e that there will be any metro- poiitai4 areü which ~ cannot get 1~Q percent cooperation rom all the subui1~n communities. The bill, ftn fact, recognizes this. But would you tell us how you world handle Jthe case of a water or se er line that went through a noncooperating c~mmunity ? Would the grant be re- duced because that community ~would not cooperate i planning? And how would you allocate the costs 9 Secretary WEAVER. Well, in the supplementary pla ning g'rants there~would be the requirement that there be a comprehe sive plan for all of the major and pertinent public facilities and land use activities ~of tl~t area, and that there be ~ unit of govc~nment w ich is observ- ing that now, ai~d will observ ~ it in connection with the programs wh~h are involved,. not only fo the specific program, b t for all such . programs. The problem that you prese ~ t would be handled i this way. If there were a small enclave in his metropolitan area which wanted to hold out and really hold up the rest of the~ area, as e had, as you recall, nnder our mass transit system, under a differe ~ set of criteria in the Philadelphia area, and if this area were holdi g out and were no~ cooperating and its holding out did not materiall affect the total area, then the total area would become eligible, and all the sections oFthe area that were cooperati~g would become eligibl~e for the supple- m~ntal grant, the holdout are would not get it. Bu you would have PAGENO="0131" 125 DEMONSTRATIO~ C~TIE~ ~ URBAN DEVELOPMENT to have substantial cooperation i~ I~ total area to make the total area eligible. Mr. BAmu~TP. Thank ~ou. Mr. Widnall? Mr. WIDNALL. Thank you, Mr. C airman. Mr. Secretary, I was a bit starti ~ b youranswer to Mr. St Germair~ with respect to the use o1~ urban ~ ne~va1. It seems to me that, more and more, those who ~ are ~dr~iiriis~e ~ urban renewal are looking to this as though it was offic~al1y in1~e d~d for clearance for commercial purpOses, ~ and therefore, i~e have\ ot to propose new methods to do the job for the iow-incon~e ~nd i~i cld~e-income group. It has been apparent as the legislatioi~ has corp tij~ in the last few years that the emphasis has been increasi~igly on c mi~iercial redevelopment, enough in the last year to bring it tip to 35 erdent of the total urban renewal funds available. Now, in connection with th~ts, Fk~ the idea as expressed of re~ quiring the project to pro4i~ce "a s st tial increase in the low- and moderate-income housing." While t is applies to the demonstration program, the demonstratioi~' progr. ill probably have to depend on urban renewal for its major im e u~ and there is nothing in the urban renewal law to eficoiU~age citi~ tQ leave their present emphasis on commercial redeve1opme~t ~r h ~ ~ come apartments. The in- creased tax returns of this ki~d pf u ii enewal might well outweigh the attraction of the extra ~ Feclera h~ e provided in this bill, ~ ~ I intend to ofFer an amendment to the ba renewal laws which would require that a residential project m ~ p ovide a substantial increase in low- and moderate-income ho~isin . hat will deflect all funds in the right direction, not just thos~ ass at d with demonstration proj- ects, and I think it enconrage~ de~non t atçi n projects under this area. `II would like your reaction to tI~at. Secretary WE4VER. I think I won d b opposed to that, for the simple reason that I don't thir~k ~ou c hi conceive of a well-rounded renewal program which does not conc~r i~ elf with the economic base of the city. There is a legitim~te plac~, I t ink, in urban renewal, for downtown urban renewal prdjects: .`~` ~r is a legitimate place in urban renewal for some projects that ~i1 h use higher income people. There is also the need for a ba~anc~ed i~r gr m. And this is what we .: have been movhig toward in the~last 5 y~a S. I might call your attention~ s~r, to th ac ,~ that at the present tim.e ~ most of the residential constructio~ th rasp majority of it, in urban ~ renewal sites which is now pla*ned~-i th~r words, where we have got a site, and where we have cle~rea it, 4 there we have got a rede- ~ veloper, is now going for mod~rate- a 1Q\w-income families. The . reverse was true in 1961. But ~ I thin h4n we get a requirement I that every residential area, regardle~s of e j~cation, regardless of the needs of that particular city, has to be fo ~ lo\w- and moderate-income family, I think we are making this progr t4o inflexible, and I think we are putting too much Federal contro vei\~ something where there should be some local determinations. I a re that the image of the program has to be more and moi~e towa d re ousing the people who are in these areas. That is exactly what is emonstration program will do. But I do not think we should sa ca egorically that you can never build for higher income people reg .r l~ s of the circumstances in that particular city I PAGENO="0132" . ~ 126 DEMONSTRATION CITTh~S AND BAN D1~V1DLOPMENT ~ Mr. WIDNALL. Dr. Weaver, don't we~ really have any priori ies in this ? You made a rather impassioned plea for taking care of t e 1ow~ income people and preventing the riots which took place last ye r, and which God knows none of us want repeated. And yet if we consist- ently consider, and many times grant, pfio~ities to commercial r~devel- opment r~tther than to taking care of tI~'eancerous slum housii~ig with our commuhity, we are doing the cou4ry a disservice, and we are not getting at the core of the hard matter t~at we want to get at to i~nprove conditions for our people. ~ ~ ~i . I ~ Secretary WEAVER. I think you h~re tt do both. And i~his was raised by several of the gentlemen w~io asked earlier qiie~ti ~is-Mr. Stephens raised it, and Mr. St Germain raised it-I d~ not t ink that you can have a city that is going to Survive unless tMt city as in it more than residences. It has got to have a vital downtown It has got to hav~e it first in order to make it a*i exciting place. ~ It ha~~t~ to have it secondly in or4er to have a ta~ base. It has. ~ot to have it thirdly, in or4èrto have employment opportu- nities f~i'ithe people. So that this phase of urban rene~rid is a legitimate part of urban renewal in my opinion. ~ ~ Secondly, I think that most of th~ r~sidentiai constructio in urban renewal will be and should be for lbw-' or moderate-incom families. But 1 am not willing to say-and certainly would oppose t e notion- that never ~ai1 you build in any urban renewal Mte for an thing but low- ormoderate-income housing. Mr. WmNALL. Dr. Weaver, I ~m not proposing that. I do be- lieve that there are priorities inv~1~d. And I do believ that there is conth~1erabie merit to the siiggest~ that manyof us hay made that for i~o~imercial redevelôpthent, th~tit should be ~ on a l~a -repayable basis. Put it back on a paying basis, rather than givin grants or doing Some of the things that we d~ in urban renewad toda , and rather than make some of the commerciaLt redevelopment pOssib e with very consthnt profits to those who go iii and take advantage o it. I don't lik& to put so much emphasis onit when we do not even seem to be catching up and meeting the nee4s of those who are in he very low income class. S N~*, I have got; some questionsj~ii H.R. 12341. Th~re are determinations the~ecretftry will make b~f re he grants Fedetal financial assistance to the~ommunity concerned. Nt~w, I am sure that this r~ciji~res considerable dab ration in the future, and we will try to get tha~from you,too. But in making determination~ the Secretary is also to give maxi- mum consideration to five diffe*ent standards. I woul like to have this spelled out quite a bit morø~ Skipping 1, 2, and 3~ consideration 4 insists on a program of good cámmunity relations an one that will counteract segregation of housi~g by race and income. I approve of this purpose. But I would li1~e to know how you are going to force int~gration of families by inc~me. What levels of i come are you tal,~ing about ? I Secretary W~A1n~n. There i~ ho enforcement of an integration of any type here. What this sajTs is that the plan tha comes in will make a significant contributioji toward this objective. Now, the way it will do it will be by providi*g facilities for multi-i come family oc- PAGENO="0133" DEMONSTRATIO]~T O1TIE~ A TJRBAN ~ DEVELO~]\O~NT 127 cupancy within the prograi~i. is ill vary from one site to anothe~', from one location to another. d- his is again not going to be some-~ thing that is going to be set up i ig d steps. What we are concerned with here is the result. Ea~h co i~ ity will come in with a different proposal for accomplishicng this, a d hey will be j udged on their per~ formance rather than on ~he fact t at they are stratified to meet a goal or mold that the Federa' G~ve efl might think in its infinite wis- dom it can determine~ I dozt't t I l~ we have that infinite wisdom. Mr. WIDNALL. The ag~ncy do s n~ contemplate assigning certain percentages of certain iw~ome gr U s o housing developments. Secretary WEAVER. Def~nitely ~ o . I am against all quota systems. Mr. WIDNALL. As to No 5 i~i th c xi iderations, there are insistencies on comprehensive prQgra~fling f ~` th entire urban or metropolitan area. Are you aware th~t hi th o~ Angeles region in advance of your bill's introduction, that it w s ir~ print, tha~t unless you went to one particular planning official o t ere you would not be eligible for any HUD assistance ? Secretary WEAVER. I w4uld be ~ glad to exchange correspond- ence with you on that. i~ is a v ~ omplicated issue. It has not always been interpreted correctly n th press reports. But I would be happy to let you review\th~ cor e p ndence so that you can judge what that situation is. Mr. WmNALL. Apropos ~f the p e e~ urban renewal acts, I know it has been said by soth~ tl~at, cont i~ to the original purpose of a decent home and decent liv~ng envi xi ent for lower income people, that it is actually for other purposes nd this was the original purpose of the bill rather than the ot~ier that as said in order to get it passed. Secretary WEAVER, I thin~t that ~ ~ a `isrnterpr~tation of the act. The purpose of the act-a dece~it h e n a decent environment for every American family-not only * b~ ced urban renewal, but it also embraced all the other h~using p~ g~ ms which the Federal Gov- ernment is sponsoring. And it didn't X~ ct urban renewal in and of itself and by itself to do this~ 1 dor4't ii~ an to say that we have ac- complished that, I don't me~n t~ sa~t a I have not been dissatisfied with the progress which we h~e mad~e in hat connection,~ because, as you know, I am and I have bee~i public\l. o record on that score before I came to Washington and since I h~ e ~ een here. But I think it is unfair to say that the act ~xp~cted t a urban renewal in and by itself would `do this. It shotdd ~iave\ ee complemented, and it is now being complemented by otl~er prog~ ~ one of which, for example, is the 221 (d) (3) program, ai~d ~nothe f which will be the rent supplement program, and stUl anoth~ o e of which will ` `be this particular program that ~ a~e i~rese~ in ~ here, the demonstration cities program. Mr. WIONALL. I would h~pe ~you woiji a so mention rehabilitation and modernization, which has been ver~ m~ essful in New Haven. Secretary WEAvi~E. Definitel~ ~ ~And\ s y that within the last ~ years, we have pushed rëhabilit~tion an~ ~ ernization and this par- ticular proposal involves much i~ior~ reh\a ill ~tionthai~ anything else as far as housing is conceñ~ed. It is p~i ~ ily a rehabilitation ap- proach to the residential aspect o~ urban ~ e al. Mr. WIDNALL. If enacted, I1.1~t. L~94f~ e id encourage the use of additional Federal funds by mei~ropolit n re ion'al government with PAGENO="0134" I 128 DEMONSTRATION CITIES AND U~tBAN DEVELOPMENT ~ontro1 over such purely local matters a~ zoning and land use r gula- tions. Further, the definition of whatjeonstitutes an eligible metro area would be left to your determinatio~i, as I understand it. n my `opinion it represents the most far-reacl~ing legislation to come efore the Congress in over 30 years. Could ~ou supply for the rec rd the iiumber of communities, if any, in the United States that ha e vol- untarily relinquished such powers to regional governments to this date? Secretary WEAVER. I would be happy to. But I want to pdint out that I don't think that the law require~ what you have said. ~ think the law requires that groups get together and mutually and! volun- tarily agree on these things, and no~ subordinate localities to any metropolitan government. As a matter of fact, this law oes not `contemplate the establishment of met~politan government, it contem- plates the cooperation of the elemen1~ within a metropohta region to get a metropolitan approach. I (The information referred to follo'w~s:) We have found two instances where municipal governmental func ions have been assumed by a larger governmental ~entity. This has occurre in Dade County, Flit., and in the Nashville-Davidstn area of Tennessee. In both these cases, it appears that the respective State legislatures specifically autI~orized this merger of governmental functions. / The proposed program of grants to assis~ in planned metropolitan d~ivelopment does not., ~f course, in any way require th* municipalities abrogate tI~eir govern- mental f~iction~ as a condition of assi$ance. The law does not ~ontemplate the establishment of metropOjitan governi4ents but rather the eoopera~ion of local governments within a metropolitan area ~in order to develop a metrbpolitan ap- proach to mutual problems. . / Additionally, there is growing evidence that the importance o the broad metropolitan approach to planning is receiving general recogni ion on the State and local level. For example, most of our States already hay laws which in varying degrees authorize regional or metropolitan planning by regional, metropolitan, or county planning bodies or through a State planni g agency. Mr. WIDNALL. If you will have to qualify this, of cours , they have got to e~nter into a metropolitan ag$ement. Seer~tary WEAVER. They have t4 enter into an agreeme within the metrOpolitan area, yes. * But they~would not have to esta lish a met- ropolitan government, nor is this c~ntemp1ated, nor do I th uk is it even suggested in the statute. It certa4nly isnot suggested in my mind. Mr. WIDNALL. On page 4 of the hill- Secretary WEAVER. And it could be an informal arrar~gement. It would not necessarily have to be a~ governmental organization of a new type. Mr. WIDNALL. I would like to read from section 102 pf the bill on page4: / Whkire the applicant for a grant ui~der this title is a county, jnuniclpality, or other general purpose unit of localJ government, it must dem~nstrate, to the satis1~action of the Secretary that, raking into consideration ~he scope of its auth~rity and responsibilities, it i~ adequately assuring that public facility projects and other land developme~it or uses of public met]~opolitanwide or interjurisdictional significance are lielng ~and will be carried o~it in accordance with metropolitan planning and pr4~graming meeting the requfrements of sub- section (b). In making this deteri4ination the Secretary will /give special con- sideration to whether the applicant Is effectively assisting in apd conforming to metropolitan planning or programing through (1) the locatio~i and scheduling of public facility projects, whether or not federally assisted; a]nd (2) the estab- lishment and consistent administra~jon of zoning codes, subdii*ision regulations, anj similar land use and density coi~trol. I PAGENO="0135" I `DEMONSTRATION CITI~ D URBAN DEVELOPMENT 129 cent more i Secretar~ in a position to refuse 20 per- Secretary have forgotte: r hope it is ~ Secretar~ pand. (The information re~ Loans for rental housing for the eiderl~ Act C~j [Do11ai~s in What is the fu- ed (see. ~O2 of the Housing ceivod - 35 45 ,4~1 4,476 5,720 30 40 3 082 2,737 4, 750 $52 4$4 $42,645 $56,900 $53~ 55~ $41, 361 $58, Program fund's for loan cornmitn~eflth and\ d sbt~rsements are provided through a revolving fund. ~ The budget pro~oses an a pi~priation of $80 million to thin fund. \ Enacted in 1959, this program pi~ovidee lo~i -tei~m loans for new construction, rehabilitation cr conversion of b'$sing for el~I~r1~,V or `handicapped persons. Loans may be made to private notiprofit c~r or~tions, consumer cooperatives, and eligible public bodies. Qualified ai~p1ic~fl s ~ho can demonstrate that they cannot obtain a private loan on eq~ially far r Ib1E~ terms may borrow funds to cover total development costs including advis r ~ rvices,. land and site improve- on completions: ;s PAGENO="0136" 130 Dt~SThATIO~ Cfl~iES AND ~ ~ I3AR DEVELOPMF~NT ments. The direct loan prtgrani supplements jtl2e Department's other pr grams serving the Nation's elderly population, the lo~r~rent public housing progr rn for the low-income elderly, and the program for inSuring housing loans to the iderly under section 2~1 of the National Rousing Act. The current rate of interest on loans is 3 percent, the maximum per issible under the Housing and Urban Development Act of 1965. Loans may b made for the total development cost and may run ror as long as 50 years.. With the pi~ogram levels projected, there wi~l be $95 million of unused uthori- zation remaining on June30, 196~. Mr. WIiThtALL. One question of Mr. B*~istein. What is the curi~nt status of your ~quired properties ? o you have any information with you ? Mr. BROWNSTEIN. Yes. Our forecJo~ures have leveled off at ~ rather high level, Mr. Widnall. . We have abctut 42,500 single family i~inits on hand. This is down from a high of about 53,000 units at one/time. Mr. WIUNALL. And you feel that you are really making pro/gross in disposing of those ? I Mr. BROWNSTEIN. in our dispositio~r of them, yes. In sio*ing the rate of acquisition I think that as long as we are going to be nsuring ~ort~ag~ on these kinds of terms, t~d as long as we have relative stability i~i the real estate market, w~ are going to have to expect a foreclosm~e rate at about what we nowjhave. Mr. *[bNALL. In the di~position offthe assets that you requ red, how much of a loss areyou taking ? I Mr. BROWNSTEIN. We lose a little.~iinder 30 percent of th original mortgage amount. Mr.. WIiyNALL. That amounts to what to date on the prop rties that have been sold ? Do you have any accurate figures on th~ ? Mr. BROWNSTEIN. Well, our a~e~age sale price is aboi~t $11,000. And our average loss per property i~ a little under $3,000. / Mr. I~IDNALL. Thank you. That~ all. Mr. B~uu~rrr. Mr. Ashley ? I Mr. ASHLEY. Mr. Secretary, it . ~eems~ to me that there may be a danger with respect to the demi~m$tration cities program and plans will be tailored so that there wi1ib~ii~cluded those Federal rojects on which. the local community either has or can get a co itment for approval. This, of course, is not what was contemplate in the act. Secretary WEAVER. I don't think I follow you, sir. Mr. Asm~y. Let's suppose that there are some 62 Feder 1 programs that might be available for inclusk~n in a demonstration pr ject. Let's suppoi~e further that a city in its planning would determ~ne initially that it can, based upon its need-4~tbat it should put tog~ther a plan that would incorporate a dozen ~edera1 programs, ope4 space, and urban renewal, public housing, 2~21 (d) (3) , et cetera. ~uppose that the city, anxious to proceed, recoginizing, perhaps, probleifns in getting approval from various departmei~ts or. agencies outside c~f your juris- diction, recognizing perhaps its . own financial limitati~ns, even ac- knowledging that the local share would be picked up, as it/ would under the act, would not there be a tendency on the part of su h community to plan its project with an eye tøward those Federal pr grams under which itcould or like1~y could get~prompt approval, and ould not this besthnething over which you wo~xld have no overall Jun diction? S~cretary Wi~tvi~at, I think t~1at there would be a s ep antecedent to that. And that would be the1fac~that the city woul come in with a proposal. The proposal woulll be evaluated in terms of the criteria PAGENO="0137" DEMONSTRATIO~T CITIE A URBAN DEVELOPMENT 131 which are set forth in the act, ~n ~ rimari1~ in terms of whether or not this proposal would make a'\~za le impact on the solution of the social and the economic and the l~ m n as well as the housing require- ments of that areaS A$[ i~ wo~ild ~ hen, I think, attempt to get as many of the existing Federal gr~ t rograms as would contribute to thatend. \ ~ It would be our responsibility ~ l~ k at the proposal as far as its feasibility is concerned. 4nd it w~ Id be the respor~sihility of the local public agency which is coordinatii~ th local program to try to facili- tate that particular technique. A~ o e of th~ things that we would judge would be the reasoru~biei1ess ~ tl~ mix-the availability of Fed- eral grant programs of th~ t~p~ t~ t i wanted. I think the danger here wou~Id not be too gr~t if we \ ei~ realistic in looking at it. In other words, if a city canie ~n *ith 4 ro osal for twice as much money from a given Federal prog~rath as ~ s vailable in that program, we would have means of knowing whai~ o ld be availabl~, and we would know that this was not a re~list1c pi~o ~ 1. ~ Mr. ASHLEY. Would thi~\not be ~ r lem if w~ ~have, let's say, 60 demonstration cities-it is n~t unrea~ ~ le tt suppose that most plans would call for a certain am~unt of ~ U pace, inasmuch as there is a general lack of Open space ir~ th~ ha~i s ó the &mmunities? Secretary WEAV~ER. Yes. Mr. AsnLE~r. If yoti take a~ look at t e ppropriations that the Con- gress makes annually for thi~ px~ogra , it would ~e difficult for me to see how these 60 projects cou\ld be a ~ ~ odated and have ~nything left over, or whether th~re ~o~ld be n~ here close to enough even for the 60 projects. Secretary W~AV~ER.. I `think thi~ is s ~ ~ ei~ ing we would h~ive to look at as it came up. My guess i~ou1~d be t `at this would iwt be too seri- ous a problem. I think when ~sve ~lan t e pen space ~rogram, partic- ularly that part that applies tothe biail ~ p reas, which would be most of what would be invoiv~d b~re, exp~ t~ them to be concentrated in just such ureas us this. A4d to th~s th fact that this iS not the open space requirement for 1 ~ear, thi o~ over a permd of 5 years. Mr. ASHLrn~. Yes. But you would ot want to have to wait 5 years for funds for `one of the p~in~ipai I g~ dients for its pro]ects? Secretary WEAVER. But you ~ouldn't nd it all in 1 year either, be- cause you could not execute it in ~. year. Mr. ASHLEY. Yes. But it is very h ~ to full a~p~ovenient in 1 year unless `the money is avail~bi~. Secretary WEAVER. Let's go b~k to th pe spaces. Assuming that there was n deficiency in the `arndun~ of de al funds for open spaoe, that part of the $2.3 billion tha~ `a give ci would haire would be used to supplement the open space fui~d's. Mr. ASBLEY. That is, of oourse~ what ` etting at. Why would not it be a good idea for thought to be giv i~ ~ t least to where a Fed- eral project might be `approved ~on its I~it , but for which there would `be a lack of funds, why w?uld n ~ t e a good idea for part of the $2.3 billion to be direeted ~o assu in the funding for that particular project ? Secretary WEAVER. I `think this is ~om t ii~ that will huye to be decided as we go along, when we get the p ~j' cts, ~n'd see what the components are. We are now estimatin . d I don't think we can evaluate this with any degree of~cei*aint t his time. PAGENO="0138" 132 DEMONSTRATION CITIES AND UI~BAN DEVELOPMENT Mr. ASHLEY. }llasthought been given t~Mhis? Secretary WEAVER. Yes. This has b~en a possibility. We / have made no decision on it. I ~ I Mr. ASHL~r. is it your thought th4 perhaps a decision ~i11 be' reached within the next few weeks, or ~s it something to whi* you feel that experience is necessary ; a y~ar or so of working ç~n the program ? ~ . I Secretary WEAVER. The funding of tths phase of it will not be until next fiscal year anyhow, ar~d by that tim~ we will have the first a swers to those problems. Mr. ASHLEY. The question is directed to you, Doctor, with respect to college housing. Last year, the Qongress changed its p ogram signifioant~y, in that it now makes po~sible $300 million `a ye r for 4 years clirecitly for this puqose. I w~nder if it would be po sibie to furnish fo~ the record some indicationtof the extent to which ns pro- gram has tendedto eliminate from the~financing of college ho sing the mortgage irnderwritino' segment ofoui~ financial community ~? Secretary WEAVER. `~his would not k~ome under the mortga e under- writing section, I think it would cothe under the bond mar et, it is usually done by bond rather than mortgages. We could give you a statistical review of what is happeni g in this, and from that you would have to make the deductions. . Mr. Asmjcr. It would not be difficult to do, because we ow that the private market engaged in this t4 get a certain level ove a certain number:pf years. A~nd my interest i~ the extent to which t is kind of private~articipation has:been short-~ircuithd and eliminate by virtue of the program that it adopted last ~year. Secretary WEAVER. Of the 3-per4tent rate. We could gi e you the statistics on this. Mr. ASHLEY. That would be veryhelpful. Thank you. (The information referred to folltws :) ThENDS IN COLLEGE llc~isixG Boxn FINANCING Comp~trtson of college housing bond ~1nancing during the past 5 months with the financing in correspotuling periods~ during the preceding 2 y ars Indicates that tMre has not been any diminution~in the volume of private fin ncing. Here~ofore, private investors have e~ideneed interest only in th~ college hous- lug bonds issued by public institutionsjwhere the interest income s tax exempt. As shown in the following table, dnringfthe period Octoher 1965 to ebruary 1966, a total of $75.6 million of college botising `bonds issued by pub Ic institutions were purchased by private inve.stors~ In contrast, during the corresponding period in 1964-65, private purchases o~ such tax-exempt bond totaled $60.2 million and in 1963-64 private purchases totaled $55.2 million. Thus, private purchases during the 5-month 1965-60 period rose by 37 percent ver the private purchases during the comparable 1963-64 period. On the othe hand, for the same calendar period, purchases by~ the Departmei~t of Hon ing and Urban Deveiopment rose from $71.6 milliofi in 1963-64 to $77 millio in 1965-66, an increase of 8 percent. Significantlyj the proportion of colleg housing bonds issue~l by public institutions accounl4?d for by private purchase rose from 43.5 pens~nt in 1963-64 to 4~l.5 percent inf1965-66. In the case of private institutioi4 where the interest inco e is not tax ex- empt, there has been negligible pri~ate investor interest in su h bonds so that virti!~al1y all of the borrowing for ~ollege housing purposes b private institu- tions is made from the Department of Housing and Urban evelonment. As will be noted, the volume of bonds i!ssuetl by private institutio s to HTJD during the October to February period changed from $58.4 million I 1063~-64 to $50.8 million in 1964-OS' and to $65.7 million in 196S-66. PAGENO="0139" DEMONSTRATIQN CITI~ ~ A D URBAN DEVELOPMENT 133 In evaluating these figui~es, it sh~ld ~e recognized that many oi~ these bond purchases reflect basic determinati~n~ (~s to whether or not to apply for Fed- eral loan assistance) that were ma~te\ soi~ie time prior to the actual bond saleS But so far there is no evide~ice ~f an~ ~ign~flcant diminution of private purchases of college housing bonds. th f~tct, i~ice~ of bond sales during March 1966 in- dicate that there will be no ab~temen1~ o~\private purchases during the current month. \\ College hou$ing bo~vI purck~ses by p~v~te \inve$tors and Department of Hoi~sing aiid Urba~n Development during ?~tob\sr~Febructry, fiscal year 1964-~66 -~- ~ ~ ~ ~ . A. October-December: 1963 1964 1965 B. January-February: 1964 1965 Bonds of pub~ic Inst tutions (interest incox~le a~ empt) ~ ~ ~ \ ~ ~ ~ ~ Bonds of private Institutions, Department of housing and Urban Development ~ - Millions $33. 8 26. 3 46. 2 24. 6 24.5 Total bonds, all institu- tions ~-- Millions $100.7 86.3 147.8 84.5 59.2 Private investor~ ~ ~ ~ Mil~ions $26. 2 37. 4 47. ~l 29. 0 22.8 \ D~ rtt~i nt o~ oust g and rb n De~rel pm nt ~ ~ 1I~IZ ios4 $4Q. 7 22. 54 30. ii. Total ~ Millions $66. 9 60. 0 1OL 6 59. 9 34.7 1966 C. October-February: 1963-64 .. 1964-65 1965-66 D. Percent distribution of bonds issued by public institutions in October- February: 1963-64 1964-65 1965-66 Ratio: 1965-66 and 1963-64 1 28. 0 \ 85. 2 . . 60. 2 1 ~ 6 Percent ~ 4$.5 6l~.6 49~ 5 137. 0 1 28. 0 1 ~ 4. 5 1 7. 0 Per en 5 .5 3 .4 ~ 5 08. 0 1 ~ o 126. 8 94. 7 152. 6 Percent 100.0 1000 100. 0 120. 0 1 19. 5 58. 4 50. 8 ` 65. ~ Percent 113 0 1 70.5 18~.2 145.5 1 218.3 Percent 118. 0 1 Preliminary figures; full compilations of bond sales 4ur ng ~anuary-Pebruary, 1966, as presented by the bond buyer, coupled with HTJD reports, will proba~ly resu~t lxi Ilgures higher than those shown for these 2 months. ~ \ Mr. ASHLEY. Just a final qu~stion. ~ a~it to make certain with re- speet to a question and a eonce~n that ~[ . I~euss voiced. The $2.3 bil- lion figure, if I understand yoi~ correct~y i~ predicated upon a certain number o*f participants in the apt. Is th s 60-is there a number that youcangiveus? Secretary WEAVER. I can give yoi~ a s~r es f numbers which I think will give the scope of what. we ~tre thii4d g about. These are again estimates rather than firm figur~s. We ~ssu e about 60, as I said, to `TO cities. We expect that the nuthber of ~a j ies in the demonstration areas will be over 600,000. We expect tti t e number of people in the demonstration areas willbe over 2 m~1 iO . We expect that there will be about 250,000 dwelling u~iit~ reh~ lit ted, and that an addi- tional 40,000 units of low- and m~derate-~n o e housing will be built under this program. This is the \housing\ c n~ onent of it. Mr. ASHLEY. Now, the 60 to 70 ~iti~s, th\o e t at would be fortunate enough to secure approval, be sele~ted to ~è ye as examples and illus- trations, as you put it, of what is meant ~o be useful to other cities, would not this bring them into ai~ e~tren~e y dvantageous position, over the duration of the 6-year pi~ogram,\ a d would not actually a question arise as to other cities that would ot nd them also in this PAGENO="0140" I 134 DEMci~rSTRATION CITIES AND UU~AN DEVELOPMENT advantageous position ? I understand t1~at the~r~ are some ~5O plus general neighborhood renewal progran~s that are-have bee ap~ proved, general neighborhood renewal iprograms, that the~re iave been over a hundred community renewal~plans that have been u der- .* taken by cities obviously interested in u~grading their environ ent, or they would not have bothered. I find it difficult, although I must say I am sympathetic with the problen~, but I find it difficult to see how this w~id not present something ii~ the nature of a grab b g, in- asmuch as there are 60 or mere cities tl~at would be interested, unless there would)be increased numbers approfred in immediately sub~ quent years ; that ~is, the third year of the prc~ram. And the second ~rear is the first year on which there would be programs to go forwards and if there be increased numbers and incre4sed appropriations to ~upport it in the following years, then there i~ no question, there is n~o prob- lem . If this is not the way of it, I think that as a matter of ~act, we ought to know about it. ~ / Secretary WEAvi~R. I don't. think T, can answer the latter/ part of your question categorically, because I think it depends up~n a lot of things~ Many of them related toi the~ budgetary problen'~s of the Nation, Which have to be considered/ and which are beyonc~ the im- pact of ~ny one particular progran~. But as to your first/ point, I would sa~ th~t those whioh are now ~nd will b~ by end of t~e period when applications come in most wi'ling and `able to deal i~krith their major urban problems will get this ~supplemental aid. Thi~ will not take anything away from what any~ other city would get i~ this pro- gram didn't exist. So that the other cities are in the sa /e position as they would have been if there hadn't been this progra ~. Mr. AsHLm~. Let me ask this kind o*f a question. Wh t you are really ~ying is, "First come, first ~erved, fellow, and you had better hurry.~ : * I Sect~tary WEAVER. No, we are n4t. ~. Mr. ASHLEY. You have said th*~ . And this is what b comes clear to me. . And it might be quite ea~ for Toledo, Ohio, to alify itself for it In an imaginative and vigo$us way. , But what a out the city of N~w York, for example, whe~e you have a problem ~ which is so enormously difficult to tackle in ~any respect ? I could ~ ee where it might be-take them better than a year to put togethe the kind of plan that would be approved unc~r the criterion that pe ained to the act. I would consider it contrary to the pui~poses that I think should ~e represented in the act if up4rn ultimate review an approval of ~uch1a plan relating to such a critical area it would be f und that the 130 spaces have been occupied. Secretary WEAVI~R. I think t.lfis is inevitable in any pe of a dem- `onstration approach. I think !~ou have a choice as o whether or not you are going to have a rea~onable period of time hen the cities can come in and can meet these itequirements-some of t em meet them ~better than others-and have a demonstration progr m which will ~oome within a budgetary figue that seems to be reaspnahle, or wait until you get a situation wheretyou can budget a total program. This nu~y not be feasible at this time. * Mr. Asm~Er. Doctor, as I $uggested, I think I tn d to. It seems to/me that there might be an a~ternative. And I refe to one in which priorities could be establish based upon these th t are perfectly PAGENO="0141" 135 DEMONSTRATION CITI A D IJEtBAN DEVELOPMENT measurable, we have t1~e sophi~t ca ion and the ~bi1ity to make ineas- urements as far as der~sity is ~o c rned~ and delinquency and crime are concerned, and pi4lie hei~t nd education. And if we don't do this and don't do it i~i a soph~ tio ted fashion, then we are dismiss- ing as an alternative the establ~ rn nt of a priority that is perfectly constant. ~ Secretary WEAVES. %~~i~e have ~i ~\ ~ection to that. We are in corn- plete agreement with that. Bu~ h re is the other side of the coin, and that is the ability o~ the cit~ t make a success of this within a reasonable period of tin~e. If ~ u re going to give some demon- strations and some iliiist~ations, \~ u ot only have to have the need, but you have to saVe the ahi~ity ~o c~ ry through with the need. Mr. BAiuu~TT. rphe time~of the g4r' 1~ an has expired. Mr.Fino? \ Mr. FIN0. Mr. Secreta~y, is th~r a y ceiling or limitation on the number of programs withi~ a city~ ~ rn thinking of New York City particularly, where you ~ ~ar~e ~ ~ rid Bedford-Stuyvesant. Can you have two programs withh~ tha\t It at one time ~ Secretary 1~\TEAVF~R. Defi~iit~iy. \ lT~ Oi~dY limitation there would be is that each of them wo~tld ha~ o ~ ~ e large enougl'~ to make a sig- nificant impact on the are~ that . ~ * ~ e dealing with. You would not take a block here or a b~ocl~ ove~ he e. But if you took a section which would have significailce, you p ul cover several areas. And it would seem to me, knowin~ New ~1~o k ~Ility as :ii do, and as you do, that this would probably be ~he type b a~proach a city like New York would normally take. ~ Mr. FIN0. Getting~ backtd so1~1B o ~ t e ~1isci~i~sioiis we have had here regarding the coordinator, besid~s cr ~ i~ new jobs, why couldn't you have the job of coordinating to the ~ st~g regional directors of the FHA ~ I think you have about 76 ar u ~1\the country. Why couldn't they do the job? Secretary WEAVER. I think fo~ tw E~L~OflS. In the first place, I don't think proximity n~cessa~il~ me ~i ~aiiability or ability. The present directors olf FHA ar~ p~ett ~ U$~~ people. They have tre- mendous pressures upon theth. And\ ~e~r have a job of handling mortgage insurance which is quite di~e en\t from the job of dealing: with coordination of Fede~l, ~ocal, a4d Si~ate programs. They are,.. in many instances, inexperMn~d In th~i ~rticular type of ~ictivity. Some of them rna~ be tem~e~amenta~ i~\ot suitec1~ for this. And~ others may not be interested iii this. ~ d\finally, I think they are fully employed in their pi~ent job. Ti~e n&~ result of using them for this purpose would be tQ dilute tl~eir effic~ ~`r their present job and to find them not too efficient in. the new job. \ Mr. FTNO. We have e~perienc~d ~ litti di~culty, and in some in- staftces great difficulties,. in our privat~ r~grams throttghout this country. What is to prevent y~nr Dep~a *~ent through your corn- missar or coordinator from gettb'~g invo\1 e~1 in local politics in the same manner as we had the mean~ in the ~p ~ ty program? Secretary WEAVER. The fii~t th~ng is t~ *r~ ent him from beh~g a commissar-which he will not be. The second. thing I ~ think is th~ type ~f ~* gram which we have proposed here. And this is why *e talk ~ n a deit~onstration pro- gram. It is so that we can have `fi~xibility o hat we do not have to PAGENO="0142" I I 136 DEMONSTRATION CITIES AND UR~AN DEVELOPMENT have the program administered in a fixed fashion. This is one o the reasons we want to do the demonstrations. So that we can deal ith this problem, which in my opinion is a !~probIem that has very1 dif- ferent manifestations from one city t~. another. It has di1f~rent manifestations in a large city from a sr4~all city or a town, difEi~erent manifestations in one geographic area th~n another. This, I th~k, is gorng to be the main reason why we ai~ going to minimize-~e are going to have problems-_-this matter o~ citizen participation. / It is fraught with problems. But I think, i/f yo~ are going.to succ~ed in doing what we hope to do, which is not only to revive and re~italize these areas physically, but also help the people psychological~1y and socially and humanly, you have to do this, and you have to lear~t to do it, and you learn to do it by having many patterns and findjng out which patterns are the best patterns. Mr. FINb. H.R. 12341 states among its purposes the provi ions of educational and social services. Do~ this mean a coordin tion of the work that the poverty corps and }~EW are doing ~ Seeretary WEAVER. Very definitely4 It is impossible to co ceive of this being done without such coordir~ation. Mr. FIN0. Is there not some dang~er of duplication of se ices? Secretary WEAVER. This is exactly' what the coordination , revents, among other things. It gets us together and prevents us fr rn dupli- cating each other. Mr. Fmro. .` J~[r. Secretary, in H.R. 12946, you are speakin of 60 to `10 percei~it living in metropolitan arøas. Now, obviously, th~.t i'nèludes the citie~ of over 1 million people. ~ I would like to know, ~n dealing with the metropolitan areas that majke up the 60 and 70 per~Sent of our populatiou, how far down are you doing in the size of the cities? Secretary WEAVER. It depends u4on the makeup of the/metropoli- tan area and the nature of the meti*politan area. We are i/ising as the criteria for a metropolitan area th~ census definition, whi~h is pretty well established. One reason that ~ve make"modifications ii~i this is that we only get the census every 10 years, and sometimes these ~reas change between. But the definition of the metropolitan area is pi~im'arily and basically the definition of standard metropolitan areas as1 set forth in the ceiisus. : / Mr Fn~o. Well, under sectionflQ5 of H.R. 12946 where you define a m'el~ropo1itan area, a standard 4ietropolitan statistical ~rea as estab- lishedl by the Bureau of the Cen~us, you make that sub~ect, however, to such modifiaction and intentk~ns as the Secretary ma~ determine to be appropriate. Does this not r~duce a metropolitan ar~ to whatever you, the Secretary say it is ? Secretary WEAVER. No. As T said earlier, the purp~e of this is to recognize the fact that many of these areas are fast gro*ing, and that between the 10 years when the census is announced y~u may have a ve~r significant area which would be added to the metropolitan area th.~t existed at the time of the census. We `are now in tI~e year 1966. It will probably be 1967 when ~e get to administer thi~. Some of the m~tropolitan areas as defined ~ñ fl~6O will no longer i elude some very baMc elements that will have 4ome in during'that 7-y ar period. The criteria which we will use to ihake any additions will generally be the same criteria that the Censu~ Bureau originally use in designating the areas taking into account `current situations and t e needs of plan- ning for future metropolitan development. PAGENO="0143" housing there is a Mrs. MCGrnRE. rooms there is a ba Mr. FIN0. It is rooms are ii that you c~ Secretary mmodate DEMONST~ ~odifications may a are based may be ~ry to reduce aries. I purposes of met wilderness or ot they are Other n form a Si) currently u `ooms re t~hie are and allow cities ram will funds between pro Congress that now i And how do you ma ill and out fri --~ one p] Secretary ~v the Congress that legislation. Mr. FIN0. In other wor. inds e stay in this program ? \ Secretary WEAVER. Grant funds wl~i h re appropriated for any program will stay in that prog~rath. 4n t `s bill will have nothing to do with how they are spent or with the~ all catiofi. Mr. FIN0. You mentioned th~ possib~l ty of obtaining for lease or purchase of public housing un~ts at 14s t an the Pubiic~ Housing Administration is paying unde~ its ar~b al contributions contracts method. Why the large differenc~ in cost~' Secretary WEAVIDR. I tried to ~xplain \t at earlier. When a public agency contracts for any type of constru~ on, it has certain restraints and requirements that do not apply to \a p ivate person doing the same type of operation. In the ~rst pla4e ~ ere is a certain amount of overhead which is there. But ~nore in~port nt, there is the matter of advertising for bids, competitive contr4c s, t cetera, which in turn require much more elaborate typ~ o~ spe~i c~ ions and architectural details than is true in a private d~ve~opm~ t. If the private builder builds to meet the specifications of the pu~l'e genoy in order to sell to the public agency, this is a fait accomp~ be ore the public agency ~ gets in. The public agency either rejects ~h p oposal or accepts the proposal. If it accepts the propos~l, it do~s `t have to do all of. the inspections it would have to do if i~t were ~ i~n ki g the product itsefl. These are the basic cost~saving fa~tbrs th t ai~ in~voived here. PAGENO="0144" I 138 DEMO~SThATION CITIJi~S AND UI~BAN DEVELOPMENT Mr. FIN0: !In the cotiditions you cite ~ii page 4 of your stat ment as necessary fto the granting of the Uemfri~tration cities system , you mention th~ provision of additional serfrices for the poor and isad- vantaged liv~ing in slum areas. What *uld those additional s rvices be, and `woitid they be prwided by yofr Department or som ~ other Federal or local agency ~ ~ Secretary WEAVER. These would vaity from area to area. have made a list of some of the more significant ones. The economic oppor- tunities program, child heeJth, vocati?onal education, child elf are, sanitation ~nd rodent control, and public safety. You wifl note, for example, that t~o of these which come o mind iiumediath~y like the sanita~tion and r~dent control and pubic safety are not nOW assisted by any Fed~ral programs. This would t en come out of the~ supplemental funds which f~*ou4~d be spent for any urpose, whether there is a Federal progran~ covering that purpos or not, provided it is related to the demon~tration and included i the de- monstration plan. . Mr. FTNO. Just one final question, Mr. Secretary. For a year I think I have been trying to get from your D partment some infbrrnation regarding the stud~r on section 221 (d) (3) . I haven't ~en o~ iota of information. And IL don't think I have ev received the courtesy of a reply. : ~1y~y~]~j yc~u please supply for tl~' record the number o units and the ~o~1is tothe Federal Governrne~it this year for section 21 (d) (3), 1ow~eflt housing for families ear~dng up to $12,000 a y ar in New Ym'k, . and $9,000 in Washington~ D.C., $16,000 in Ala ka, and so forth? Seci~etary WEAVER. That report was sent to you over week ago. Mr. FINo. Themail must be very slow. Secj~etary WEAVER. We can send you another copy. Mn FINO. I will check with my office and get in touc with you, if I don't find it. But I have beeni looking for i.t a long f me. S~ta~ryW~AVE*. I have che~ked it, sir, and I am to d it has been ~se~i%. ~ Mr. FIN0. Thaiik y~u. . M:~. BARRrn. Mr. St Germai M~t. STGERMAIN. Thank you,Mr. Ohairnian. Mr. BARRETT. Will the gentle~ian yi~id for just a mo ent? Mr. Secretary, we are going ~o try to give you some mitation here. We ~ expected Mr. Reuss will want some time. And we can almost a~spre you and your staff that ~re won't run you over 5 o'clock, but we `wiljl run you as close to it as pos*ible. ~ ~e~3retary Wj3i~&v~. I will be'here as long as you are. :~ ~tr..BARRE~r. Mr. St Germa~n 9 . Mr. S~r GERMATN. Mr~ See$ary, you are requesting authority which i~t1~e~~ it possible for local $using authoriti~is to us privately built newhoiisingunder the local $~ program. This is a/ctually a supple- *ii~ent to what we did under the last year's act wher~ we were taking ~*1S~ing housing. ~ ~ . ~ / ., Ipcident~i~y, at that time wasn't there a percenta~Jge of the number *4!1~ apartments owned by oneowner that could be use~l for this purpose ~y~lie ho~ithng, a~t~ifi~s? / Mrs. McG~~. In sectioip 2~3 it ia uggeste4 t~h$ 1~ percent of `the knits in any one structure b~ used, unless there is so e reason. PAGENO="0145" DEMONSTRATION CiT\~ s ND URBAN DEVELOPMENT 139 Mr. ST GERMAIN. TXnless tI~e e i some unusual circumstance. Mrs. McGunu~. Yes~ Mr. ST GERMAIN. Is\there a ~i ii r lnnitation here? Mrs. McGuIRE. It h~s not be~ su gested. Mr. ST GERMAIN. TI~ere is n~ i itation to this one in particular. My question, Mr. Se~ret~ry, ~s ould this housing be subject to the Davis-Bacon requirem4nt, con\~ u tion of housing by private con- tractors? Secretary WEAVER. I coi11dn'~ fi~wer that. I would have to check it out. ~ Mr. ST GEnM~tIN. Wbuld yo~i cl~ ck that and provide it for the record. Because I th4nk you reap e ~ ~t it will hare a great bearing on the consideration of' the ~ection i~ so e areas. (rfhe information requestøcl fo 1 w :) There is no statutory rØq~tfrement ~ at revailiug wage rates must be paid in connection with private \bousing c ns~ ucted for use for low-rent public housing purposes, as ` prouid~d ~u s ~t o~ 105 of the proposed Housing and Urban Development Awn~dt$iits of19~ The Department of Housi~iig ~rnd Vrba Development administratively re- quires that prevailing wage $tes be a~ lie , wherever appropriate, in. the con- struction o~ private houMflg t4 be tcqu~* d ~ leased for low-rout public' housing purposes. We maintain thi$ p~sitlo~ ~ be use of the strong congressional intent expressed in, the U.S~ I~ous~ng A~t to rotOct Inbor standards in the con- struction of low-rent housing f~nai~ced i~i e~ its provisions. Thus, under the recently initiated "tui~n cy ` procedure which involves acquisi- tion of newly constructed housing for l~hr rout purposes, we require the applica- tion of prevailing wage rates, s~ibmitted\~ tikt Secretary of Labor for approval, in the construction of this bou~ing, nOtw~it s~ nding that this is not specifically required by law. ~ . In the case of leasing newly dons~ructE~1 ho sing under the "ilexible formula" (as would be provided in se±ti~n 105 (~) ar~ (h) ) , however, only short-term leases are involved. The appli~tiozl of ~h ~ e~aiiing wage rates requirement ` would not be practicable' in~ this ~ituatibn~ ` Mr. ST GERMAIN. Mr. ` Se~ret~ry, t ei~ is oiie section `that I find a little perplexing. At one ` point in y i~ supplement at page `6 you have a heading, "Maintei~iance ~f E rt. ` Under it you say: In addition, a city will not be perluitte o se grant funds provided under the demonstration cities as a su~sti~ute ~ ~ al dollars committed, prior to the application `for the planning ~f tbO do ` 1~t atlon program, to be spent for a project or activity for Which F~ede~al fi net 1 a~sistance Is being prov~ded under an existing Federal grant-i~-ai4 pro ~ Now, let's take a specific exa~iip~ ci1~ X. ` ` Secretary WEAVI~R.. Let' me \r~d th~t a `am. ` I thought you were talking about something else. I didn't oil ` yoiii. What is that see- tion? , ` ` ` \ Mr. S~ GERMAIN. ~At page `~, Mr; S~c e~ry, 4&Maiutenance ~f Ef- fort," about midway. This~ist~ie title. Secretary WEAVER. In my ~ti~tement . ` ` Mr. ST GERMAIN. That is ii~,tI~e' suppi e t to the statement, not the one you read, but the supplemea~t. ` Secretary WEAVER. The long ~taterne `t, ` It has' to do actually with sectio~ia 102; s b~ `ction ` (s) of section 102 of H.R. 12946. :i think I had better let Mr. Fo~rd expl i t is. Mr. FOARD. This is simply a ~equirer~ t that if a city has corn- mitted itself to a local contribution, the~e ftt ~ds are not going to be 6O-878-66~-pt. 1-10 \ ~ ` ` ` PAGENO="0146" 140 DEMONSTRATION CITIES A~D URI~AN DEVELOPMENT used to offset that commitment ; they wou~I have to be used for s~me other purpose. I Mr. ST GERMAIN. I do not like to use the word "simply." Let's/take a specific case, theoretical case. `City X wants to be a dernonst$tion city, and it files-first of all, they have to somehow or other get home funds to prepare an application to find oi~t whether or not they c~n be qualified as a demonstration city. We twill get to that as myl next question. Bi~it let's say that they are no~ being considered imd~r the seven or eight points as a possible demon~tration city under the a/cts as passed. And it is very important that ~he `planning funds that they have received for urban renewal projects-at one point on the Iurban renewal project they get their plannir~g funds, and their pla~iis are being prepared. And they finally submit them to the citizenslof the area, and this is approved. I In the meantime, you are processing the application for a demon- stration cities' grant. At which point is this ruled out, the funds of the Demon tration Cities Act to supplement the cities' or~the communities' local hare of the urban i~enewal project? Mr. Fo~u. I think it would dependjvn whether the cities h d made a commitment to furnish those funds ot not. Mr. Sp GERMAIN. At which point l~ave they made the corn itment, and at which point do you compare th~ two dates ? Have you resolved that one? Mr. FOARD. I don't think- Mr. S'r GERMAIN. Mr. Secretary, I don't know if you are erplexed at my question or the problem. Secretary WEAVER. I am perplexe4 by your question. Mr. S~ GERMAIN. All right, herej is the point, Mr. Secr tary, and Mr. Foard. An application is mad~ by a city for urban r ewal, for consideration as a demonstration ciljy, and at the same time there is in process an application for an urb* renewal project. W ich of the two dates are going to control, the date of the application o~ respective applications, or the date that final ~pproval comes throug~i for either one or both ? I Mr. FOARD. I am sorry, I don't understand your questio$ It would not be the time of application, and would not be necessar~1y the time of final approval. It would be t~e time when the local ~ommitment has been made for the fimds for th~ project. I Mr.! ST GERMATN. What wouldtyou consider as being t~ie time that the lodal commitment is made? I I Sec~retary WEAVER. I think we frill have to come back t~ you on that. I think the real point here is, thai the demonstration program is not to be used to permit the city to cut lf~ack its present level of ~xpenditures. The basic thrust is that the city cannot, for example, redu~,e the amount that the city is paying for police protection, because it i~ going to use some of the supplemental funds for police protection. / I grant you that that isn't precisely what this language says, but tI~is is the main thrust of the "Maintenance of effort." As `to what thi~ is I will have to check it out. I PAGENO="0147" I DEMONSTRATION CITI S A D WtBAN DEVELOPMENT 141 (The following infor~iation ~ ~ ~ ~ bmit1x~d for the record:) TJ~E OF ~HE ~U i~ MENPAL GRANT Once the amount of the ~upp1en~ t~ grant attthórized by section 6~c) of the demonstration citie~ hi1~ Is eomi~L ed~ Ule ~ota1 amount of the grant is gen- erâlly available to the city ~o b~s usec~ t it di~cretion for any project or activity which is included as part ~f the ci~y do onsti~aticn program. Except in the one situatjon descr~b d elow, the supplemental grat~t funds may be used to (1) assist ditie~ to r~r vl~I their required share of the cost of projects or activities which are parr ~ ~ he demonstration program and are funded under existing Feder~l grant4n ai4 programs, ai~d (2) provide funds to carry out other, nonfederall~ as~isted~ roj ~s or activities (jneluding projects or activities of the type eilg~ble for ~ or 1 assistance under existing grant-in- aid program's) , undertaken as p~rt oi~ t e emonstra~ion program. However, the . supplemental grant ~i d~ provided may not be used as the required local share for any project \ o a tivity for which ]~deral finaiic4a~ assisita~ice under an existing gi~a~it4n-~1 p ogram~ was contracted to be, made prior to the date on which ai~ applica~i n ~ made for fm~s to plan a demon- stratioliprogram. . ~ ~ \ For example, assume a loan and gr~n~ gr ement had been ~1gned with respect to a particular urban renewal ~reject b~f re the city made application for funds to plan a demonstration progrj~m. If t~i fl ban renewal project is included as part of the city demonstration program\, he on-Federal contribution to it may be included in the base f~r de~eri~iinln~ he amouiit of the supplemental grant available to the city, even though the ~ o~ t was approved and even funded under the urban renewal pro~rats bef~r t e application for planning fu~ids under the demonstration progra~n was m4d . However, the supplemental grant funds a not be used to repay the required local share of this urban renew~lproject.\ t us~ be used for other projects and activities which are part of th~ demonst~r tio progrnm. This limitation applies only t~ project~ or hich Federal financial assistance under an existing grant-in-aid ~ro~ram .\~r s ontractéd to be made before the application was made for fund~ to pla 4 monstration program. It would not affect a particular project m~rely ant 0 i~ (as by referendum or by action of some governing body) , or e~ren sche U ed. The limitation applies only if financial assistance for that project has c na ly been contracted for under an existing Federal program before th~ app I ati n for planning funds under the demonstration cities bill was filed. Mr. ST GIDRMAIN. The 1an~uage I as talking about~- Secretary WEAVEII. I know, Mr. ST GERMAIN (oonti~iu~ng) . P o r ins on which Federal finan- cial assistance is being pro~id~d. An ~ ha is the explanation I got out of your supplement. ~ A summary of one bill says ~`will pr id that no grants may be made under this title with respect t~ develo e t projects for which a Fed- eral grant has been made or a ~ontract it assistance has been entered into under the legislation ref~rred to i clause 1 of section 105 prior to"- Secretary Wm~vsn. That is the oth ~ bi 1, that is the metropolitan development bill, sir, not this bill. Mr. ST G1~RMAIN. This doesit't appl o oth? r Secretary Wi~Av~n. No. This appli s to the metropolitan develop- /~ ~ merit `bill. ~ ~,/ Mr. FOARD. It is a prQvlSlon'\to jrev t rojects which are already ~ ~ committed from getting the ~d~aiitage ` th `in~entive gi~ant for met- L~ ropolitan planning. ` ~ ` ` Secretary WEAVER. This has no r~lev~ e t the demonstration cities. Mr. ST GERMAIN. It has' no `relevance th demonstration cities. Secretary WEAVER. No. ` PAGENO="0148" 142 DEMONSTRATION OIPI~S AND U AN DEVELOPMENT Mr. BARRETT. Will the gentl~m~an yieidI~ Mr. S~ GERMAIN. Yes. / Mr. BAERErr. I am quit4~ sure, Mr. Seir~tary, that both the d~mon- stration cities and the metropolitan area planning program ar~ very important to the gentleman. And I wa~ wondering if it would~i't be more helpful and more specific if y~u h~d given some questions ~o the Secretary in~writing so thathecôuld repij~ tothem. / Mr. ST GERMAIN. Mr. Chairman, I ajm one of those-I am ~ non- believer in this wrItten~qnestion businesst for the most part, becat~se you get an answer, and then it Is properly-$-it ttirns out that they/didn't understand the question, didn't under~ãnd my question initu~1ly. I would have never gottenan answer. ~ / Secretary WEAVER. We wouldn't have understood it any mo$ if you had writtem it. / Mr. ST GERMAIN. That i~ a point, Mr. Chairman. This is vjery im- portant, because our deliberations wi1~ continue on this for the next few weeks4 Because the Secretary a*d his staff are experts/ in this area. ~ I I No. 8, iii. the criteria for the deten4inatioñ by the Secretai~y that a city woubi be eligible, states : ~ / The program meets sud~ a&titional requfrements as t~he ~eeretary i~iay estab- lish to carry out the purpese~itf thiaaet. Do we have to have that type of criteria? Secretary WEAVER. I think it is pretty standard procedur in legis-. lative drafting. If on~ abuses this, then one comes back a d suffers for it. I think this is one where you. ~rocee4 at your own ris . But I think yoi~ had better have it as an u~hreila in case you fin that you are not ~1tletoanticipate~rerything. Mr. S~P GERMAIN. Does the Secretary have a ~ pretty go d idea of what these additional requirements i4ay be? There are a couple of reasons for r4y asking that question, r. Secre- tary. When we pass this type legislation, naturally all t ~ e commu- nities who are interested in it or who are potential applicant are eager to know the regulations that sup~o~ed1y control this legisi tion. Secretary WEAVER. I have had some experience with egulatioris that were issued before the appropriations were made. nd that is my last~offense, as far as that is conc+rr~ed. Mr. ST GERMAIN. I W~LS tbinkiri4 Mr. Secretary, that pe haps when the authorizzation was being cons~dfred~~ thatif we had an pportunity to examine the reg~ilai~ons prior ftio going before appro nations, it might be helpful. I Secretary WEAVER. I~ think I c4 assure yoi~i that this is a protective clause that will be used very, very tightly, or only in some etail. And there will be no major criteria added which is. not in th substantive statute. Mr. 5p GERMAIN. We will be watching that closely, Mr. ecretary. .No.. 6 here provides that, "Th~e ezists a relocation ~ian meeting the r~quireizients . of the regulati~ns referred to in sectipn 9" of the bill. !Secti'on 9 says, We have to a~sureádequate housing before people are. c1~isplaced, ai~d requires, tii .ti~.mwximum~ extent feas~bie, the coor- dinaltion o.f the Relocation- Act wbich'increases the suppJ~ of standard housing suitable for displaced fai~iilies. . I I understand, Mr. Secretary, qiat we are going into a ~ternonstration city, or an area of a city, if it is ~a city like New York, ~e are going to I PAGENO="0149" 143 DEMONSTRATION CITI S A D URI3AN DEVELO?MENT improve the social an4 e~ono ic ork potential conditions of the peoples, impi~ove the faee of th re , and you want to improve their housing. But in the m~titi~ie, 1 ~ ~ uld you give them better housing while you ar~ doing this ~ Am I readingthis sect~on corr e ly, this requirement correctly? Secretary WEAVER. N~. I thi th s requirement says, in effect, that there must be a re1ocatio~i progr w ~ich assure~ that there will be an adequate amount of re1~cation us ng available before people are displaced. Y~u may go $bout this r~ everal ways. In a project which we now have, a demons4rat~on Ici ~ w York City on 114th Street, which is rehabilitation, w~ tqok 2 ~ tti dings, one~bf which was vacant, and we moved the familie~ fr~m t e fit t building that we rehabilitated into the vacant one after we had r 1 a1~ litated that, and with a regular turnover. The next time we wer bi to do two ~bthldings. And so we went progressively. \ Mr. ST GEEMAIN. Was this in a. i~ h~ iljt~tion area? Secretary WEAVER. Môs\t o~ thi i 1~ habil:itati~n. Mr. ST GERMAIN. And it is co~t n'I lated that under this demon- stration cities that it will be r~habi\li ~t on ? Secretary Wi~AvEn. Defh~ite1y. J a~ when we th~lk about this total program, we expect the n~imber ~ d ellings to be rehabilitated to be 250,000, and the numbe~ of ne~+ t~i dings for high and moderate income housing about 40;000. So t is is primarily a rehabilitation program. Mr. BARRI~TP. The gentle~nan~s ti l~ s expired. Mr. ST GEEMATN. Did the dhair a~, deduct the ~tiine I had to re- linquish ? Mr. BAi~iti~rr. I think I al~yw~d f ~` th t. But perhaps Mr. Reuss w~uld be 1 d o y~e1d for another question. Mr. ST GE1iMAIN. Thanl~ ~ Mr h irman. Section 11. Consuitath~n : it ~ys e ~ hat'the S~cret~ry will confer with Federal agencies administeri ~ t e ~pro~arn~. And let's get back to No. 8 that I referred\to ~bo t h estab~isMng of the criteria. I didn't notice anythii~ abo~it eons 1 iz~ with p~rbia.ps the members of the authorized committee ~n some tb areas. And I wonder if the Secretary had any inte~ti~ns of d g hat. Secretary WEAVER. Well, I \thi~k t t ti 8 con~i1tatiGñ there shou1~ be properly through the oth~r Secre a i~ or the other heads of the agencies. I think there w*xiiçl b~ a d eal of feeling, and I think rightfully, about these Secretaries g i baøk to t~heir authorizing committees. I think that this ~oul ~ ~ their respoiisibthty. And mine would be to get this coo~er~tiont é plain what we are trying to do and to find out how fa~ ~hey cO j ~ to ~o~perate with us and facilitate that cooperation. But I do t ink I should go back be- hind them to- Mr. ST GERMAIN. I was thi~king a ut this particular Secretary and this particular authori~in~ ~min ~ ee, in view of the fact that this is a demonstration act in e~perienc Secretary WEAVER. 1 think ~ wçuld ci t at without any word or direction. .~ Mr. ST GERMAIN. One last co~iuiIent, s~ic my time i~ up, and that is, on the Federal coordinators, some o. e entiemen are proposing an amendment to make these p~r~nanent. s hat it? I PAGENO="0150" 144 DEMONSTRATION CITIES AND URBAN DEVELOPMENT Secretary WEAVER. For all metropolitan areas. Mr. ST GE*MAIN. For all metropolita~i. areas. I think that this is such a great section in itself, Mr. Secretar~ these Federal coordin~tors, that I would even support ~1egislation ~ establish these in a~1 the inetropolitant areas, so that if this parti~ular bill did not succ~ed in passing, I still feel that the~Federal coo~'dinators at this point ~n our metropolitan areas, in our cities, are definitely necessary, and /1 feel that most cities who need help, these Federal programs, unfortui~ate1y, cannot afford the talent necessary for aneffective Federal coord~nator. And I feel that this is an excellent section. / Secretary WE~AVER. I don't like to even think of your qua ifying clause about the lack of passage of the program. But I would concur with the deairabiiity of this. And we sl~all be moving in this di ection regardless, because we agree this is very crucial. Mr. B~uutE~rr. Mr. Reuss~ Mr. REuss. Mr. Secretary, you have practically answered t e ques- tion I was about to ask concerning the!fourth and the last par of the Reuss amendment, because that has to do with the effect of the amend- ment on your proposal for urban coordinator. We felt the i ea was excellent. But why restrict it to the 50 or 60 demonstration ci ies who come in, and why delay it for 2 or 3 years until a demonstrat~ion pro- gram gets moving ? And, therefore, we suggested that every metropolitan area f conse- quence .who wants it throughout thejcountry should have a Federal urban coOrdinator to help expedite ~he whole series of Fe eral city programs in that area. We suggeste~ that this might be don through the FHA offices which are already th~re. You earlier said that many FHAL people aren't suited f r it and didn't want it, and so on. I accept your judgment on that. at there must be a corner of their offices where you could put a d sk and a bright young fellow who knows about urban renewal and qpen space and community facilities, and wouad get in there and he~p the be- wildere4 locals in their wanderings through bureaucracy ai~id prevent them from having to go down to ~Tashington or to a reg on that is hundreds of miles away. But I gatl~er from what you have aid to Mr. St GerxMin that you may be in agr~ement on this. .~ ~ Secretary .W~t&v~at We coutexnflate something along this line. ~ Mr1 REuss. I am delighted to he4r that. Let me shift now to something that hasn't been touched et. You have excellent new town pi~oposals. Tell me, does that apply to new towns within existing cities as well as to new town out in the countryside ? I have in mind a city which suddenly fin~Is itself the heir, let's say, to a Federal Army ~post, or to a large piece of land. I would~ hope that it would apply to this city new town ~s well as to counti~y new towns. I / Secretary WE~YER. There is n~thing in the letter of he law that would prevent that. I just can't~ eonceive of enough sp ce within a city where it could happen. Bu1~ if the space were ther , it could be done. Mr. REuss. Well, Minneapolis has its Fort Snelling. ilwaukee has its Army disciplinary barracks. And Washington, I hink, has its National Training Center. S.o I am glad to hear that as you read the legislation, were applicable, certain towns- PAGENO="0151" 145 DEMONSTRATION CITI~ A D URBAN DEVELOPMENT Secretary WEAVER~ There w~1 b no prohibiti~n against it. Mr. REUSS. On this whole q~e ti n of metropolitan planning which is inherent in the new tbwn prop sa , and is certainly inherent in your metropolitan planning propos~ , hich I find e~ce1lent, too, I am somewhat disturbed at the fac1~ ~ , appar~ntly as we go ahead with this kind of metropolit~n p1ani~i g~ we are goingto let our friends at the FHA, whom I love dearly~ on inue to do what they have been doing for the last ~Q yea~s, whic~i s ~ subsidize by mortgage insurance the most unplanned type of cI~e ke board suburbs. It isn't FETA's fault. It is all our faults, but ~ y ren't we doing something about it? Secretary WEAVEn. We are do~b S mething about it. For example, we have iL title to which yoi~ pa~ d ast year, which will be adminis- tered by regional officers, arid whi\c w ii be tied into the total approach, the metropolitan plaimii~g appr~ ch, and a comprehensive planning approach. And we are ~1so atteW t~ g to concern ourselves with the planning of the larger suburban c~ el pments. I just don't think it is possible t b ing all in at one time, both ad- ministratively and opera~iortally A d also I think that the FHA itself is becoming more concerned it planning. I refer to, particu- larly, a technical bulletir~ they i~s ed a number of years ago about cluster development, whicl~ I ~hinl~ i r ally a significant breakthrough in this, and something, I thitik, t1~ t resents a new image on FHA~ And the Assistant Secretary, who\ i a so the Commissioner of FHA, is here. Maybe he would like to sp~ o that. Mr. Ri~uss. Before he does that, let me just ask this question : I know about title 10. And I .kno~ b ut cluster development. And those are nice. But what ]~ would ~i ~e on to answer is this : If Con- gress meets the challenge o~ the nek~ tc~ n~s proposal, and the metro- politan planning propo~ai, and en~ s hese laws, and your Depart- ment goes ahead and . administers \t e , while it administers these with one hand, won't FHA on the b he hand be out subsidizing un- planned checkerboard subu~'bs mar~y m les out from anywhere else, which are wasteful in terms o~ util\ifes and highway transportation and open space and everything els~, ~ ply because Congress is not giving you any other directi~re ? I am not blaming you. I a~n biamiji o rselves. Mr. BRowNsn~IN. We tire, as the S~ re ry suggested, giving a good deal of attention to planning, Mr. Rei~ts However, there are areas be~tond hi h we can't go. And even though we may not be plannthg them. ell as we would like to have them planned, we may not have any e so to refuse rnortgnge insur- an'ce in connection with some of these B t to the degree that we can,. to the degree that these new qiollars r g ing to facilitate better de- velopments, then FHA certainly has a~i en o the problem and they are doing everything possible and they wi~l o tinue to do everything pos~ sible to encoura~e better develppment~. Mr. R&TSS. If any of you g~ntjemei\i, in he course of reading over the minutes of the meeting, have any a s er to my proposition that we seem to be proliferating an~I sqbsid~z~n bad planning at the same time that we take steps in goo~ piann~n , would be happy to have' you submit it. Mr. BROWNSTEIN. I think it is rath~i si ificant, too, Mr. Reuss., that FHA is involved in about 15 perc t f the new housing starts. PAGENO="0152" 16 DEMONSTRATION CITIES AND UR44N DEVELOPMENT And perhaps the I 5 percent is somewhat ~tter planned than th 85 percent that we are not involved in. ~ I Mr. IREUSS. :i think that is true. But 1~t's draw the veil of oh rity over the other 85 percent. Mr. Weaver, I am delighted to see that you put in. a good wor ~ for the rent suppilement appropriation. Do you not agree that eqi~ia1ly as important as getting in an adequate re~it supplement appropri~tion is to make sure that the appropriation co~itains no restrictive re uire- ment such as requiring a wGrkable prO~am, ~pproved by the local community, r~cognizing that such requir4ments would, in effect, limi- nate the rent supplement program in th~ very areas where it is most needed? I. Secretary WEAVER. I think that the piMosophy behind the re sup- plemont program is the fact that it is a ?rivate enterprise appro ch to low-income ` housing. And I think it should be treated as any other private enterprise approach to housing, since it is financed t1~rough the same machinery. And I think that there are adequate hbusing provisions for any local control or loc~d participation, which apply to all other programs, which ought to aptly tothis program. In additibn, such limitations woulq greatly restrict the a eas in which this particular activity could 14e carried &n, which w uld be prejudicial to the people we are tryin~ to help and, really, ~ think, destroy much of its efficiency. Mr. IREUss. One final question on yoi$r metropolitan plannin . You used the magic words "planning," ai~id I think "programin ," mdi- eating to me that you have in mind not just a regional or metr politan planning agency ; plans ar~ fine as fat~ as they go, but they on't get anything built in themselves, and you;want something more. Now, the something more, I gath~r, is not necessarily iways a metropoli1~an council of governments. ~ You carefully ruled o t, and I am glad y~ou did, the idea that you h4ve to have a metropoli an super governrnttht. You don't want that, ~nd it certainly isn't require- ment. But will anything less than a~ metropolitan council o govern- ments of some formal or informal nat~kre do? Secretary WEAVER. I don't like to stretch it. I would s y that in most instances I think this is the form that it will take. W are con- corned, first, that there be an agency, a public agency, that ca~i perform adequat~ly the metropolitan planniRg for all of the pertir~ent areas. Secondly, we are concerned that 1~here be a unit of gover~iment-it can be S~ate-it wouldn't make a~ny ~Ffference-it `could be ai~iy form of governr4ent which has both the juri~diction, the power, and/the will to carry out what is provided for in th~comprehensive metrop~litan plan. Mr. Ri~uss. But whem~ the State~ either doesn't or can't/do it, and where the metropolitan problems ~iop over the county b~undary as they frequently do, in addition `to a planning agency coverii~g, roughly, the area question, you would reqttire, if not a formal ~tropolitan council of governments, at least some cooperative arran ements, so that you didn't get 153 Balkan States each fighting each other? Secretary WEAVER. Yes. I thii~ik the important point here is the eflectivteness of this. I ABd: maybe Assistant Secretary Haar would like to s eak to that briefiy~, too. Mr. HAAR. I think we are inter~ted, not only in the pla ning but in the implementation of it, and th4 carrying out and the dherence to PAGENO="0153" DEMONSTRATION CITI A D URBAN DEVELOPMENT 147 the plan. And we ar~ again o id g for new developments, innova- tions, and institutional struetu e Now, the council of ~lec~ed o i~ s is one that has emerged and has proven to be more use~ful tha t~ier devices, and more effective in carrying out the plans aria st ug the local aspirations. We don't want to preclude other iimova ~ n~ and other ways of meeting this problem of planning at one le ~l o development and land activities going on at the other. We want e t o to match. Mr. REuss. But ther~ has to b ~ mething at the implementation level. * Mr. HAAR. There has to ~e S et ing. And I think it is to give the representatives of the loca i i~ somehow, representation into the groups which make aecision . 1~ doesn't have to be one for one, and it doesn't have to be ~he exa t a~o, but somehow the people who have to make the decisi~ns on h ~ cal J&vel, those who have the responsibilities and who ~re elec e n the local level, have to have some say in these metropolita~i de I io s. Mr. REUSS. And by m~tropoli a ~ ecisions, yon don't mean the planning decisions butthe im~lem tii~ decisions? Mr. HAAR. The implem~ntipg d c~s~ ns. Mr. REUSS. I think that ~s a ver goo piece of legislative history; Thank you, Mr. Chairman. \ ., Mr. BARRETT, Gentlernen~, the tin~ ha expired. ~ Mr. Secretary, there a~e two brie~f u stions now and I am sorry we won't beable to let you go at 5 o~cloc1~. Mr. Widnall wants to as1~ a ~hort~ u~ tLon and I think Mr. St Ger- main wants to come back. ~A~nd he\s ~s it will be a short one. Mr. WIDNALL. Mr. Secret\~ry, no~i e as come to~ me that in urban renewal's open space pro'gra~m, whe~e th ` Federal Government picks up 50 percent of the costs of acquisiti n~ that the community of Vir- ginia Beach is requestiugsucl~ as~ist4i e 1 connection with a purchase of a 144-acre ocean-front prc~perty. \ The property is priced at $~22~OOO ~ t j on the tax rolls at $18,360, which, under the Virginia sy~ter~a of ~ al state taxation, has brought in only $128.50 in taxes durin~ the pa~t e r, accordi~ig to the Virginia Observer, a Virginia weekly ~iewspape . The Federal Government's share of this $522,000, at 50 j~er~ent,\ on d be $~61,OOO. I have in- quired several times, through, subcon~ ittee staff, of urban renewal authorities as to the progress ~f the V~r ina Beach, application. In- formation has been given us that a~p a~ als of the property have backed up the acquisition cost, ~ut that~ I~ is seeking further infor- mation. I am pleased they ~tr~ a1~rt. I still cannot understand ho~ a prop~ y an be on the tax rolls for only $18,360, bring in only $i~8.5O in\t ~ , and still~ cost the local government $522,000 of which\ th~ Fe~ ral Government would pay $~61,O'O'O. Could you orone of ~oi~r urip n enewal assistants further enlighten me? Secretary Wm~vER. I couldn't. Mr. SLAYTON. Well, Congressman du .l1~ you have indicated that we have had some corresrpo4de~ice o this, and I haven't checked upon this recently, since I have come b i~ ~ work, so I don't know the precise status of it right now~ But s oU correspondeiTice did in- dicate, we have looked into this, and w oO ed into it immediately PAGENO="0154" 148 DEMONSTRATION CITIES AND UI~BAN DEVELOPMENT when we heard about the application. And the application ha not been approved. But I can't give you the information right no~w. I can, of cours~, supply it to you. Mr. WnNAi~r~. Well, Mr. Secretary, ~ understand that thor have been one or two paper transactiohs on tl~e whole property whic have been in the hundreds of th&usands of ~1oi1ars, despite the he these purchases were concerned with 165 aci~s while the city is ac iiring only 144, part of which is tinder wate~. But until this came to my attention with regard to the city's actbn, such transactions ore, I am told, still over $~OO,OOO less than the $522,000 price tag to e city and the Federal Government. If a full explanation could be fu nished for the record, I would welcome it. Mr. SLArPON. I think the record ought to show that this is a appli- cation that has been received and nq action has been taken on this whatsoever in terms of approval or an~rthing of that nature. Mr. WIbNALL. I would certainly liJ~e a full documentatior~ for the record as to the order of procedure i~ connection with this ajrid what has been done by the authorities. I Mr. SLAYTON. We will supply that. (The information referred to folIo~ws:) STATUS REPORT RE VIRGINIA BEACu OPi~N-SPAcii~ LAND APPLICA ION On August 9, 1965, the Philadelphia i~egiona1 office received an ~ application from the city of Virginia Beach requesting a 20-percent grant of $t~O 000 for the acquisitio~i of 144 acres of property whic* was to be known locally ~s the Little Island Ih~creation Area. Shortly there~4fter, the regional office a~knowledged receipt of the application and authorize~l the city to undertake aqquis'ition of the lands included in the application i~ the need arose. Such a~thoHzation _is not a commitment of Federal assistane~ but does allow the applica~t to proceed with acquisition at their own risk with~mt advserly effecting the ~ligibl1ity of the land for assistance, if at a later dath, a Federal grant is appr~ved. At the present time the application is under review. I In the latter part of September 1D65 assertions appeared in the Virginia Observer to the effect that the price paid for the Little Island Re~reation Area `by theelty was highly inflated and did not reflect current market val~ie for similar lands in and aroun~l Virginia Beach. ~ These assertions were b~ought to the attention of the Urban Renewal Commissioner who notified th Philadelphia regionajl office of the controversy over t~ie application and Instruct d the regional directoJ~ of urban renewal to follow up o~i the matter. The regional office requested the city to provide two comple e professional appralials of the lan4 for review as boon as possible. These a praisals were completed and delivered to the regio$l office in December 1965. Subsequently, the regional office has conducted a field review of the site an reviewed th appraisal reports submitted by the citiy. The city has been requ sted to provid ~td'ditionai information concerning t1~e methods of appraisal u ed and supple mental information to complete the original appraisal reports. t is our wide standing that this material is now being prepared for submissioi~ to the region office by the appraisers. I It should be noted that in the Interim since the submission oi~ the applicati in At~gust 1965, the Housing and Ui~ban Development Act of 1~65 modified t e ~ open'space:land program and increa~ed the percentage of Fed~ral grant assi t- ~auce available to a 50-percent level instead of the 20-percent le~vel at which t e city'~ application was originally sub~iitted. Prior to any additi~nal action bei g tak~n on the application, the city wtjl have to update and revis~ their submissi n -to comply with `the prdvisions of t1~e 1965 act. The regional office has not e- quested submission of a revised 4pplication pending complete review of ` he ~appraisals and determination of tile fair market value of the1 land in questS ~ Mr. BARRETT. It is true thai you have been hospit ~ized, is it n t? Mr. SLAYTON. Well, I was homeized, you might say. PAGENO="0155" 149 DEMONSThATION CITI A D URBAN DEVELOPMENT Mr. WIDNALL. I a1TL sorry to\ ea that. But I don't think that this wa~ concerned with hos~ita1iza~i; n. Mr. SLAYTON. My or~1y j~oini~ i t at I haven't had a chance to check rnto this as to its recent ~taths. Mr. WIDNALL. One other thi g : H.R. 13064 was introduced oil February 24, 1966. It contair~ 3$ pages. And to the best of my ~know1edge the bill itsel1~ was no~ ~ va'iablè until this morning. There was a committee report aVailab~ as f Friday. It is the longest bill that we have before us. It ~s ex~r n~ ly important. And I think that ~to do ourselves justice in the oor~i it~ ee, we cert~ainly should have the opportunity in the futui~e t~ go\ i *t proposals that are in this bill, in the new section. We haVen't ~i d ~ uch opportunity to date. Secretary W~&v~R. I tljinl~ tha1~ w uld like to add- Mr. BARRETT. Doctor, ]~ wonde* i t e gentleman wouldyield to me? At the conclusion of today's h~a in s w~ are going to ask you and your staff to be on a stançiby bas~. * he subcommittee may want to bring you back at a 1atei~ date, a~i a that time we would have an ~opp;ortunity to ask further\qu~stioi~s oi~ he bills. Secretary WEAVER. Ma~ I poin~t ou one thing in connection with what Congressman Widna~l s~ys, h t 0 pages of the bill are devoted entirely to conforming the existing 1 gi lation to the new situation due to the existence of the De$rtment, a d it is therefore a technical mat- ter, not substantive. ~ Mr. BARRETT. The standI~y positi , r. Secretary,'is agreeable with you, is it not? Secretary WEAVER. Certainly. Mr. BARRETT. Mr. St Geri~iaiji. Mr. Sp GEEMAIN. Thank you, Mr. 0 ai man. First of all, I would like t~ sa~i tha~t ~ are hapjiy to seeMr. Slayton back on his feet. And it wo~ild be n\ie t get him on the other end of the line when we call his offi~e. An~ e want to thank the Secretary for his help and his patience in ans~e in our questions today. The concluding question was this, Mr. Sec$ a ~ : First, in section 4 we have a comprehensive city demon~tration\ ro ram, the requirements for eligibility ; and then in sectio~n 5, we \h ye got the national assistance for planning comprehensive ~ity der~i n~ ration programs. I am a little confused here as to which is t4 ii gy and which is the horse. How does a city begin to get i~eco~nit~o t a' point where they can be given financial assistance ? B~cause, l~t s e realistic in our conversa- tion, Mr. Chairman, I feel tha1~ the ap~l ca ions that are submitted by the cities that would like to b~ consid~ d s demonstration cities are going to be rather lengthy and costly t~ re are. It is not going to be an easy method. Secretary WEAVER; I think the proce~ re iii probably answer both of your questions. The proce~ur~ we c nt mpiate is that the cities v~ihich are interested in this will cothe in it a generaiproposal. Not a detailed plan but n proposal which w 1 in icate what they hope to accomplish, and in general the method 1 g that the~ will use, and, ~iso, some indication of what resources t y ai7e asfttr asgetting the necessary cooperation, et cetei~a, to do this ~ ` Then on' the basis of this, ther~ will b he selection of cities which will receive planning money to p~rfect t is nd the planning comes PAGENO="0156" I 150 DEMO*STRATION CITIES AND T5R~AN DEVELOPMENT in after the g~nera1 proposal has come in./ And that is where we ~ ave allocated the money for planning and a. pfriod of a year's time fo the detailed planthng. I We realize that these cities eannot, without financiaJ assistance, come up with a detailed, finished plan. They can come up with ~ proposal. Mr. ST `GERMAIN. Where the city is . submitting its propos~l, its initial proposal, prior to that time it wilihave the supplemental ~uide- lines from the Secretary and his department as to what is being ~ought after by the potential appiicaiit ? ~ / Secretary ~ WEAvi~. Yes. These willj be a spelling out of t~ie en- teria that is/set here, not guidelines as t~ how they do it, but gui~lelines as to whatllhey are to accomplish. I / Mr. ST GERMAIN. And s~cond1y, th~. cities that are then ~ranted funds for planning over a period of a4year, because of the d~tail re- quired, does the Secretary here mean~ that these are the eit~es that will be successful, or these will be the contestants, let us say, ~ho will be considered ? . / Secretary WEAVER. I would say-and this is something tha~ is still formativ&~-but my guess would be i4at if we were going to/ ask the cities to ptit in a~ year of planning th~tthey have got to have/a pretty good ideaithat if their piahs meet t~heJcri~enia in detail that h/ave been set, that they would then be eiigib~ to participate. I do~i't think you are going to have a group of ci~ies come in with final plans and then throiv them out. ~ . / Mr. ST GERMAIN. That being the ease, this initial submis~ion, then~ would be of the utmost importance, because it is actuaH~ the con- trolling submission on which the ultimate decision is mad~? Secretary WEAVER. I don't see how you can do it oth~rwise. I think it is quite unfair to have a city come in and go thro/ugh all of this-a lot of particulars, and a ~ot of agreements-and then say~ "Well, ~ook, it is very nice but you ~ain't' good enough," if hey didn't meet tl~ criteria. Mr. ST GERMAIN. Mid I repeat, Mr. Secretary, that i would be most important to those potential.Jinitial applicants to k ow exactly what HUB is looking for from t~iem. Secretary WEAVER. Oertainly. Mr. Sr GBRMAIN. And perhaps~ these suggestions or g~iidelines, or whatever you might like t.o call thtm~ wilibe ready in the ~iear future? Secretary WEAVER. As near in the future as we can get/them ready. But I think we have a problem here. It would be rath~r premature for u~ to write these guidelines i~i detail ~mtil after the congress has written the legislation i~i detai1~ because the Congress may change the la,w. ~ I Mr~. S~ .GERMAiN.M~r. Seereta~y, that is the end of m questioning. But that was my point, the la~t time I was questioni g you about these details. We are writing the law and we are calle upon to vdte. on the law. I think that this is ~ne of the most importa t parts of the implementation of the law. Atid that is what will be the guidelines these cities will have to follow.: Secretary WEAVER. Our proposed guidelines are se forth in this pro,posed legislation-the onlyt thing more that will e done, if this bill were to be passed in its present form, with ev ry period and PAGENO="0157" 151 DEMONSTRAT~0N CI~I S ND URBAN DEVELOPMENT comma, and so forth, in it, ~ro\ul be to elaborate these guidelines- not to create other m~jo~ gu~d~li, es. Mr. BARRETT. On b~haif of\ I~ot sides of the committee, I want to thank you and your st~aff for ~ ~p1 ndid presentation here today. We will adjourn m~til 10 ~ t morrow morning. (Whereupon, at 5 ;iO p.i~n., tI~e\su committee adjourned to reconvene at 10 a.m., Tuesday, M~i.rcli 1, 1\9~6I I PAGENO="0158" PAGENO="0159" URBAN DEVELOPMENV TtJES~At, :E~t ~ LTIVES, Stn~doM~uT o Hot~sINu O1~ THE Co~tM~rr~E 0 B NKING AND CURRENCY, Washington, D.O. The subcommittee met, p~irstiant t r cess, at 10 a.m., in room 2128~ Rayburn House Office Bui1cIin~, H . 1111am A. Barrett (chairmaa of the subcommittee) presiding. Present : Representatives ~Barrett, rs Sullivan, Ashley, Moorheadr Stephens, St Germain, Gon~ale~, ` na 1, and Fino. Also present : Representa1~ive~ Mi ~ i 1~ nd Mize of the full commit~ tee. Mr. BARRETT. The committee will b e to order. This morning we are happy to ha e as ur first witness, Mr. Wilbur j. Cohen, tTnder Secretary, D~pa en of Health, Education, and Welfare, accompanied by Pl~i1i~ Br ns em, Assistant Secretary for Mortgage Credit, Departme~it of H si g and Urban Development. Mr. Cohen, do you desire ~o read ~ statement? If you wish t& read it, we will let*you complete it bef r w ask questions. But first I want to state tl~at we a v ry pleased to have you this~ morning, and we hope you make yours~l ~ el at home. You may proceed. STATEMENT OP HON. WILBtTR L C~ E , UNDER SECItETARY OP ~ HEALTE, EDUCATION, A1~D WEL~' l~ ; A000MPMTIED BY DR. Pn:TLIP LEE, ASSISTANT S~CRET4 ~z oi~ HEALTh MID SCIEN- TIPIC AFFAIRS; AND ~ DR. HARAL~ G ANING, PUBLIC HEALTh SERVICE Mr. COHEN. Mr. Chairman, I am a ~ ~ companied by Dr. Philip Lee, the Assistant Secretary fç~r ~Ieal h ai~i Scientific Affairs of the Department, ~nd Dr. Harald 4~ra~aing f ~ E~ Public Health Service. It is a pleasure to appear before this c mittee today to express the Department's strong support for .R ~256 introduced by tha distinguished chairman, Mr. Patman, a a identical bill introduced by Mr. Gonzalez. This hill wou:ld amend the N~tional U ~ng Act to provide mort- gage insurance and authorize direct o n by the Department of. Housing and Urban Development to p o id financial assistance for constructing and equipping faci~Iiti~s fo h group practice of medi- cine. Assistant Secretary Philip Bro n t&n of the Department of Housing and Urban Dev~lopme~it is aJs~ e e today. He will speak to the financing aspeets of thebi1l~ 153 DEMONSTRATION CITIES 1, 1966 PAGENO="0160" I 154 DEMONSTRATION CITIES AND tTj~tBAN DEVELOPMENT President Johnson in his health mes~ge of 1~65 stated: New approajehes are needed t~ stretch the f~u~1y ocf rnedieal speciali te and to provide a ~rider range of medical ~ervioe$ in the communities. The initial capital requIreni~itn fer groupj practice are ~ubatantia1, ml the funds are nol~ now suffidently available to ~1miilate the expansion an estab- 1t~hment of gi~onp~praetice. He recommended legislation to authdrize a program of dire t loans and loan guaranteos to assist voluntary associations in the co istrue- tion and equipping of faoilities for ct~rnprehensive group p notice. We do not want tmy person in this country to be denied a cess to the best medical care possible. Our p~puiation is growing. he de- mand for medical services is increasii~g. And, to meet this rowth, Congress ?l~a inaugurated new prograii~sun:der the Health Pro essions Eduoatióni Assistance Act of 1963, a~id the Nurse Ttaining Act of ll~64, to iI~crease the supply of avaii$bie m&npower. But we must also make possible t4e~ e~pansion o~ those orms of medical organization which are design~d to deliver high-quali y heaith care servi~e~s to our people. . Group practice is one such fo~rm. ~ It is nn effi dient and effective way of delivering high-quality medical care. In 1946 th re were about 400 medical units in group practice in the count ~ ; today, group prtLctices number nearly 2,000. In addition, there ~re about 6t~ dentai group praotic~ groups. ~! I Grouj~ ~practiees now ~*ist i~i aln~st every State. Some ~ffer corn- prehen~si* p~payment pbrns, oth are * ~n ~a free-for-sers~ice basis. Group ~sctice ha~s worked in ma~different parts of th~ country. The Kivi~er-Permanente program, a~d the Palo Alto Medi~al Clinic are examples of both iorms on th~ ~*~st coa~st. in Oklahom]a, there is the G-iass-N'eison Clinic in Tulsa ; in New York City, the ~ieaith In- surance Plan of Greater New York,~with 29 medical group~, is one of the largest prepayment plans ; there are group practices i Philadel- phia, Pa. ; Rochester, Miun. ; Bellah~e, Ohio ; St. Louis, Mo. Hanover, N.H. ; Middleboro, Ky..; Beckley, 1~. Via., Albuquerque, N. ex. ~ Bes- semer~ Ala. ; and Seattli~ WR~h. T~seiare only ~xarnples ; in 1~59 we published a prelimin*wy directory of medical groups in he United States *hich shows that they exist in the largest cities an . in smaller cOrnmix~iities as we~l1. ~ Both physicians and patients b~nefit frOm the speciali ed services and joiut recordkeeping, by the shaping of staff, equipment, and admin- istrative expenses arnong.physithans. ]~xperience with the Federal em~loyees health benefits rogram, for example, has shown that hospital utilization rates are 1 wer among those i~rho have se1ecte~j group pra*~tice than with all othe methods of practi9e. flOs1~ital costs have been increa~ing 5 to ~ percent a yea in the past 20 years. The average cost (:)f genfral hospital care in the nited States today~is almost $42-and still going up. It must be our go 1 to prevent, wherever possible, unnecessary a4d costly utilization of ospital serv- ices. We are constantly searehink for ways to do this. e must find ways so that everyone who needshospital care gets it bu~ that no per- son uses hospital care when other services are medically/ appropriate, such as hospital outpatient diag~nostic tare, home healt~i services, or ambulatory care in a physician's office. But even as w improve our PAGENO="0161" 155 DEMONSTRATION Cfl~IES A D URBAN DEVELOPMENT existing capabilities and develop n w alternatives, we must also move to take advantage of ways and mea s with which we are already fami-. liar, such as group practice, to redu e unnecessary hospital utilization. One of the chief obstacles to the d velopment of prepaid medical care plans and the group practice of me icine and dentistry is the difficulty in securing financing on reasonable or s to meet the cost of construct- ing facilities needed for group practi and the cost of providing the equipment needed for essential servces such as laboratory and X-ray services. Some physicians who wish to estab i a group practice arrangement are able to obtain the necessary ba s or doing so. This may be the case when the physicians are well est bl shed in the community. Most often, and especially for groups as oc ated with prepayment plans, there is no such history ; and the lao o adequate lon~-terin financing may prevent a community from obt i ing the benefits which accrue from group practice. A number of ins ances in which this has hap- pened will be found in the record o 1 st year's hearings before the Interstate and Foreign Commerce C m ittee at pages 313-317. We believe that by making Federal assis a ce available to encourage the long-term financing of group practi e acilities, a major obstruction to the initiation of group practice will be emoved. As you know, the President in hi message on rural poverty, has expressed his concern that we are no p oviding sufficient incentives to attract medical students to settle in ru al medical practice. He has proposed to extend loan forgiveness fo st dent financial aid to medical students who choose to practice in p or rural areas. Moreover, this bill as stated in the enacting clause a d n section 302 (a) would give Priority to group practices in smnalle C mmumties. These two in- centives taken together-loan forgiv ne s for student financial aid and mortgage insurance for the const uc ion of modern group prac- tice facilities-could work together o mprove the adequacy and availability of medical care in rural are s. However, I would have to `admit that much more will have to b done to bring the miracles of modern medicine within the fina ci 1 ability of our people in smaller and medium-sized communities. Beneficial byproducts of the legisla ion before you would be the stimulation of additional valuable pr payment plans under which high quality comprehensive medical o dental care or both would be made available at premium cost within the means of persons with moderate incomes. Consumer groups wishing to organize such plans, instead of having to depend on extensive fund-raising programs, in advance of enroll- ment of members in the plans, could, under the bill, borrow funds for capital outlay on terms that would permit them to repay the principal and interest out of current premiums. In brief, title I of the bill would authorize the Federal Housing Commissioner to insure mortgages secured for the purpose of financ- ing the construction costs of group practice facilities. Title II of the bill would authorize direct loans for this purpose if funds are not available from private sources on terms and conditions as favorable as those applicable to loans insurable under title I. The bill also provides that the Federal Housing Commissioner and the Housing and Home Finance Administrator-Secretary of Housing 60-87&--66-pt. 1-i1 PAGENO="0162" 156 DEMONSTRATION CEVIES AND ~ ~TRBAN DEVELQPMENT and Urban Development-thould utiIS~e the available servi es and facilities of other Federal ageiici~ in tarrying o~it the provis~ions of the act. Specific provision is ~ also m~de for ~ consultation with the Surgeon General of the Public Healcth Service with respect to ~ny health or medical aspects of the program which may be involved hr prescribing regulations. The provisio~is providethe basis fo~ an ef- fective working agreement between th~e Department of Housing and Urban Development i~nd.the Public TJ~aith Servi~ein the Dep~rtment of Health, Education, and Welñ~re, wh~ich insures that the com~petency of each agency is used most advantageously. TJnder such a~rrange- ments, the I~ublic Health SE~rvice wouli~ participate in the deve~Eopment of regulations establishing standards ffor the organization of profes- sional groups, ~nd will assist in reviewing applications for he pur- pose of determining that all professioi~ial elements of a group practice exist and that projecte are feasible. It is our sincere conviction, Mr. Chairman, that this bill ill serve as an effective stimulus to the deve~opment of the group practice of medicine and dentistry in our cottntry. This bill will c ntribute to the improvement of medical care ~y bringing to more p ople the well-estab~Eished advantages ofgroup ~ractice. Finally, we urge that you enact thi~ legislation to allow tJii limited, 4-year program, to begin operatkrns. j We contemplate maki g a care- ful study and evaluation of the effectiveness of the progra over the course of these years. Thank you for the opportunity to mal~e this statement i support of this bill, and the identical bill introduced by Mr. Gonz lez. ~ shall be glad to answer any questions you may have. Mr. BARRETT. Mr. Cohen, of cours*, we hear a great deal a out man- power shortage, doctors, nurses, techi~icians, and so on. Ho does this fit into the picture ? Would H.R~ 9256 improve the si uation at all? ~ I Mr. COHEN. Mr. Chairman, it wi~ll help. But I must b frank in sa~ying that we are faced in the 1~Jnited States with a t emendous shortage of doctors, dentists, nurs~s, medical technicians With a net population growth of 3 million each year, and with inc mes going up so that people want to purchase more and better me ical care, we in the United States will be faced during the next dec de or two with a very large problem of allocating our manpower an~i facilities to bring the miracles of medical s4ience to all of our peoj~1e. As part of the total picture, thisj bill will help in a sma~l way. It will m~)ke it possible for physicianfr and dentists working ~ogether in a grcu~ to deliver a higher quali~y of medical care and a greater quantity of medical care to peopl~ than they can do in acting sep- arately. When physicians, let u~ say, work together a~s a group, sharing high-cost equipment and X-rays, using subprofe~sional help in giving the ,X-rays, and providing laboratory services~ it helps to expand the competence of the physician to render more ~ervice. In that sense it would definitely help to deal with the manpo~rer shortage that e~ists. And again, I would have to say, this is on~y one small piece of a large picture that we h~e to tackle. Mr. BA1n~icrr. Mr.~ Cohen, thank. you for your very fi e statement. I am ~uite sure it is going to be ~ry helpful tO our co mittee. Mr.Fino~ PAGENO="0163" DEMONSTRATION CITIES and researc serious, not oni of the desire at rather than a problem. not have t it involves~ group o~ r responsil and deal URBAN DEVELOPMENT 157 I think I cause it is t easily expiain~.~ - -- X-ray or cobalt mac in this country e~i for these servi doctors? to have the assir" - shi' be avei, mpor on that i~. _-,-- much better. Airnther fault t other ~ `ion of choice le that V PAGENO="0164" I 158. DEMONSTRATION CITTES AND TJ~BAN DEVELOPMENT pital-this was Mount Drury Hospital where the practice was being conduct&l-on one occasion I, wouki see ~r. X and on the retur visit I would sec t~r. Y and on th~ third visits 1 would see Dr. Z. A Ld one didn't know ~what the other had done,, a~d what my ailment w s and what my p'r~blem was ~id he would ha~fre to read the chart. ~ ~d it sort of dist*j~bed me. ~ I didn't feel that ~ was getting the prope med- ical care tu~d~ttentjon. ~ . ~ ~ This is the~ only objection that I have 4o this group practice. Do you h~L1~e any thoughts on that, Mr. Cohen? Mr. CoHEN. Yes. I am quite well aware of the point t1~at you make. I have een a member of the group practice plan myself for many, many years And 1 recognize what you have to say there. ~ I should s~y first that the term "medi~l group" as it is used in the bill is not n~essarily a prepaici medical tare plan, and an insure I plan like HIP ii~i TN~ew York. It could either J~e a plan with a fee for ervice of a group 4f people, or pr~paid and .~jroup practice like HI `. So HIP is not the sole type of arrangement that we are talking aboi t here. Now, with regard to the re~t of your ~uestions, I would like ~ o turn that over to Dr. Lee. He has actually ~as a physician practiced in a group practice plan, and I think he could probably answer you ques- tion better from the professional standpoint than I could. Dr. LEE, This arrangement, of course, varies with different ~ roups. I happen to have been in a group of ~pproximately 100 phy~ icians. About 85 percent of the practice was fe+ for service, and about 5 per- cent was p$paid. The prepaid groii~4 consisted mainly of t e stu- dents and a1~out one.~half of ~he faculty~of Stanford Tiniversit; . Pa- tients couldtselect any. physiei&n withinithe group of 100. Of ~ourse, there were s~me pediatricians, some int4rnists, and some gener* ~ prac- titioners. Biitthe~y had to *~elect one o~ the physicians in the group. Patients could not choose, ~ having entered the group practice dan, a physician outside the group. ~ In addition, I would like to comment regarding your concer about family practice. I think many people now, with the developi ent of groups, turn to the group as their fam ~y physician. There m y be a pediatrician~ * and an internist that wil l~ôk after the entire amily. There are i~iany groups that are now adding general practi ioners. Moreover, this is an ideal environment for ageneral practitio er, be- cause he works even more closely with ~ specialists within a group. So it does-~-to some extent-solve one )f the really knotty p: oblems caused by the decrease in the number ~f general practitioner Mr. FINO. Just one other question, Mr. Cohen. Would so iebody in this area bE~ somewhat handicapped by requiring that there be five doctors in the group before they coulcj benefit from this legir ation? Mr. COliEN. We would certainly wa~ut to keep that fiexibi~ in the adminis1~iation of the law. ~ I think tl~at there may be situai ions in which you ~woiild have three or four ~r five physicians and ~ ~rhaps some part4me peopl~ Btit on the ~ther hand, I don't thi k that we should 4o as far as to make no j~ments on this score an L make the financing availabIø to plans that w4~ii1d not, from a medica stand- point, be able to really operate efflcie4tly and properly. W would want to balance these considerations. Dr. LEE. I might just add one thing~on that, Mr. Fino. Th t is in- teresting. Actually, in isolated areas such as North Dakota South PAGENO="0165" I 159 DEMONSTRATION ~ITI~S N RBAN DEVELOPMENT Dakota, Montana, and Idaho, an th t part of the country, a far higher percentage of the physician re n group practice than in most other parts of the country. There e ore physicians in group prac- tice in relation to the total populat o i the sparsely populated areas than there are in the metropolitan a ea , particularly on theY eastern seaboard. So that this is the type o ra tice that appeals particularly to physicians who work in such area Mr. BARRETT. Mr. Ashley? Mr. ASHLEY. Mr. Cohen, actuall. I m a little surprised to learn that doctors iteed this kind of fina ial assistance from the `Federal Government, or. would even perhaps c e t it. Is it not true that the average in o e of our doctors in the United States is around $20,000. Mr. COHEN. I would guess now, f I ad to, that the average net income of physicians is somewhat in e es of that. Mr. ASHLEY. They are certainly t hi hest paid profession' in the country ; isn't that so? Mr. COHEN. I don't know whether ey are actually the highest, but they are among the highest income ou s in the, professional field; yes, sir. Mr. ASHLEY. Generally speaking, i ec loan programs are reserved for groups which for one' reason or ot er require special kinds of financial assistance. Are we talkin b ut direct loans under this program? Mr. COHEN. , We are talking about d r ct oans ; yes. And also about insured loans, both. Mr. ASHLEY. I would like to have Fttl further justification as to how doctors could possibly qualify wit ny kind of equity for this special kind of consideration. Mr. COHEN. I think that is a very fai q estion. Because it is true, as you say, physicians are among the i er income groups in the country. And normally one wotild expe t t at because of their income and their status in the community they u ht to be able to go to the normal commercial banking system and bo row the money that they need. But with respect to the very young ph si ian who just comes out of medical school and is going to practic , is situation is somewhat different than the physician who has be n i practice for some time. He has gone to medical school for a ion fme and he has probably borrowed a good deal of money to get thr ug school, although he may have gotten some scholarship help. But th general situation of the young physician between 30 and 35 who e te s medical practice is that he has debts from his schooling-lie has b rr wed money to get to the stage where he can go into practice. If e comes into a community ~rhere he is not yet well known or well e ta lished, and lie feels that he would like to get together to set up a pr cti e with four or five other physicians, he does not have the kind of ep tation, credit rating,' or income himself, unless he can borrow it, le `s ay, from his parents. or his father-in-law, or something like that, to establish this. In that case, he usually will go into private pr cti e, and he may remain in the community 5 or 10 years until he an get the reputation and the income, in which cases he is most likely h wever, to remain in solo practice-which, of course, it is his right t d . But I do think that PAGENO="0166" 1G40 DEMONSTRATION CITIES AN1~ URBAN DEVELOPMEN the presekit situation is more discoi$~ging for the young d ctor just coming out of medical school as com~frared with the physicia who has been inpractice for a while. f : Mr. AsnLEir. Your experience is~ ecrtainly broader tha mine in this field. But I must say that I h~we never really found ~ankers- and this would be in Toledo, in Waterville, Ohio, in Whitehc~use, Ohio, small communities as well as fairly good-sized cities-who ~Jidn't rec- ognize doctors as the best possible credit risks, whether j~ist out of college or not. ~ After all, they have got a profession, a d there is an enormous demand for their servic~s. How can it be. said hat banks would look askance at them and s~y they are really . not uite estab- 1ishe~? . . ~ Mr. COHEN. I think what you ai~ saying about the the ry and the general ~pproach is ttUe. But `th~ fact of th~ rnatter-e pecially if you would look on page 314 of the ~65 hearings before th Interstate and Foreign Commerce Committee you will ~ fi~f a numb r of state- ments from various groups identified there in which th y say they have had very, very difficult problems in getting financi g in their local c~rnmunities. ~ . Now, whether that, sh~, is becaus~ of a competitive situa ion in their conrnilthities, I. din't want to say ~tegorically. I do thi k, however, tlitLt 114 is entir~ly~ possible that t1~e fact that. these grou . plans can render~ a~ very high quality of meqical care and deliver ore services' workiw~ together in IL g~oiip than *° individual practitio r may have some effect on other piwsicians in 1~he community not bei g enthusi~s tic about these groups being estalJlished, and therefore, ot being in terested in seeing that they are financed But I think th t that could well be a factor. Mr. BROWNSTEIN. It may also be a matter of credit ter s, Mr. Ash- ley We are speaking here in toi~ms of a 90 percent mor gage This would~ be much more liberal thain the terms on which conventional financing would be available.. In~all likelihood, a 75-perc nt mortgage or ma~ybe even a 60-percent mort~ag~ would be the max mum obtain- able o~n conventional terms. . ~ ` , Mr. ASHLEY. Of course, I thin~ that Mr. Cohen st~rik s an interest- ing nOte. I would ~nnpose that ~ a profession, doctors a e the greatest investors in the stock market arid , real estate. And a rogram that would take that into consideration might be a good pproach. . Mr. COHEN. The same kind of question you are raisi~g wa s raised in r~ard to the Health Professions Educational Assi~t'ance Act of 19~ .in the House Intersttite'an'4 Foreign Commerce Co~nmittee when they testified in favc~r of Federafl financial aid for the c~rnstruction of medical facilities and finaticial ~ssista,nce for physiciai~s M~ ASIILI~Y That is very thff+rent thing to my mind / ~ `CoHLetm~'just ~iii~i~t~the point. `And Ii~hink the point wa'~ -the same If physicians afe! th~ highest income jroducers, you might say r~eeiver~, in this p~ofessmnal area, it wa~ argued, why can't they borrow the money for theireducation ? It ~as argued that you know for the most part th~y are goings to be able/to pay it back o~rer the next 30 or 40 pars beca~se of their favorable i come situation. But-and this is the only `poInt I wanted~to raise-I think here it is not just a question' of to what `~xtent we are gOing to elp the indivi- dti~l, it i~ `also a question' as' t ~what extent we are go ng to meet our PAGENO="0167" 161 DEMONSTRATION C~T ES AND URBAN DEVELOPMENT national situation regardin~ th s manpower shortage. That is the part of the problem I woul~i fo us on. We have 280,000 physicians in the country at th~ prese4 ii~ e. That is not enough to meet our tremendous populati~n growt . t does not do very much good to the sick person to be abl~ to say~ h n he cannot get the medical care he needs, that we have got 280,9 0 hysicians and they are earning, on the average, more tha~i $25,000 y ar, because you are not meeting the needs of people in that s~nse. ~ n what I am saying is that what we are trying to do here ~s not h~1 t e physician or group of physicians but to see that we enc~ur~tge a\ or of medical organization that will deliver medical care to thepeo~l a they need it. Mr. ASITLEY. On p~ge 2 o1~ oi~r statement~ you picked out some group practices whiclçi have \c ith inly been very constructive, the Kaiser-Permanente prôgrarn~ ~tnd ~ t ~ Palo Aito Medical Clinic, and others. But this is no~ the us~i 1 t pe of group practice that we are talking abont~ is it, Mi~ Cohen~? I n't it true that most group prac- tices are for the conven~enØe oi~ t e octors and not the patienth? Mr. COHEN. Well, I \wthld $th r have Dr. Lee comment on the matter of conv~ni~nie to the d~c c~ But let me say this-even if I were `to make the assui~ption that it was more convenient for the physician, I still think i~ is in the at'onal interest to remove obstacles to physicians working to~etber er they are ableto deliver a greater quantity and a higher qu~lity of di al service to sick people. Mr.. Asnu~r. All right. But Mr. COHEN. It heips both ph ~ id ns `and patients, is what I am saying. Mr. ASHLEY. All right. ` Perh s. But certainly the group prac- tices that are outlined in t~te last a a raph of your statement on page 2 are not the usual kind of ~ro~ip p ct es? Mr. COHEN. What do y9u n~ean t at ? I don't follow you. They are illustrative of some of the bet ~ k own and more geographically distributed. But there ar~ severa ho sand of . them, approximately 2,000 in the United States. So I i gi e you would find quite a wide range of types of practices, if that i ha , you mean. i~r. ASHLEY. On that point, the g o th has been from 400 in 1946 to some 2,000 today. Tell ~r~e abo t hi rate of growth. This is not fast enough, I take `it, in you~ vi~w? Mr. `COHEN. That ~ is eorrect sir. I hink that it has grown, but I don't think it has grown~ in any ay commensurate with the tre- mendous growth of popula~ion~ a I has not grown in relation to the tremendously increas4d posts ~ or instance, of hospitalization. Mr. ASHLEY. But `we are talking i~i ~r s of the number of doctors, not the population figure. 1~'he rela~i ns ip of the number of doctors to population has been very bad~ ~` er has been no real sense of responsibility in this area ~vhatsoe~ r. The gap keeps widening. Isn't that so ? Mr. COHEN. `That isright ; especial* Or family physicians-general practitioners. The ratio of p~ysieiai~ o opulation over the next 10 years is going to remain s'thb~e~ ~ We\~t e oing `to train more physi- cians, and we are going to ha~re itiore\p p lation, and th~ relation of physicians to population is go~ng to r4 a~ ~ about the same. Now,if that is so,~ and people want moi~e rnedic~d c~ e and with th~r popu1a~tion aging and medicare going into effect, ai~t w th increasing incomes and PAGENO="0168" ~1 . I : 162 DEMONS~RAPION CITIES AND URBA/~ DEVELOPMENT other factors, we have got to find more effecti~ve ways of delivering b th hospital care ai~d physician services to th~ American people. Mr. ASHLEY. Just a final question. Has there been any estimate as :~ to what a target might be ? What are we talking about in terms of group practices ~ What are we looking fo~ under this program ~ What would ~ve like to see in terms of a ta~get? Mr. COHEN. ~I would like to say, Mr. A~h1ey, that I don't have ny preconceived i~otión of this. I would hop~ that we could increas the number. I woUld like to see ~s add severaJIhm~dred more in the U ited States during the next few years. But I tl~ink this is a mati~er of al ow- ing the physicians and the dentists to d~cide for themselves. 411 I would like to do with this bill is to take a*ay any financial discourage- ment for those physicians and dentists that want to do it. I beliefre as Mr. Fino says there are certain problems in connection with /these plans. But individuals should be free tb choose. If you want /to be in such a plan, fine, If you do not wai~ to be, I think you ought to have that rig~it too. If doctors want to tet together and have a group practice plan, they ought to be entitle4 to do it, and if they ~o not want. to, the3r should not be forced int~ it. But there should riot be a financial barrier that discourages eith~r the patient or the ph~sician from doing this if they want to. That! is my whole position. / Mr. ASHLEY. Fine. Thank you very thuch. Mr. BARE~ETT. Mr. Gonzalez? Mr. GONZALEZ. Thank you, Mr. Chahman. First, congratulations to the whole panel here, and to y u, Mr. Cohen, for your promotion. I cannotthink of a more worth public servant. 4nd I say that in all sinceritjr, because they way I h ye come up, I hav~ long been awai~e of your e~ntrIbutions. ~ Mr. Co1~EN. Thank you, Mr. Gon4lez. I appreciate that. Mr. GO~ZALEZ. Well, that is sincer~. And I did not intro uce leg- islation just by accident. . ~t have a re~l keen personal concer and in- terest. And I have also had a rnagni~1cent opportunity to s the need for it because in my own family I ha've a total of now five octors,. I did have six until the death of my ur~cle several years ago, b t at least five. And the experience of each one of them is very-the most recent addition to the family by way of a M.D. is a nephew who fi/rst had to serve hisistint in the special forces as!a paratroop medic. He served his stint, anil he is in San Antonio nov~ just starting his pract ce. And though, ~t does sound as if all doctor$'are rich-and they do ork hard, and I pfrsonally feel they are entitl4d to what they earn-it akes them some tithe before they can get to th~t ?osition. ~You are a solutely a hundred percent correct. I wish ~o etdorse every state ent I have heard here this morning, because ~t is reflective of the a tual prag- matic, practical experience of startikrig physicians-startin physicians must confront today. On the other hand, the richer element of my family was represented by this uncle doctor in Laredo, Te*., where two of his sons ow operate, in conjunction with their sister anØ a cousin who is a pha acist, a tre- mendMis clinical complex. But ij~ took. the emergence of the two sons to f~nAlly enable the uncle in con~pany with them to rea h a point in Laredo where they could assoeit4te themselves with oth r physicians and eventually construct and r~xn this clinic, which i one of the principal clinics of the border are~. in Texas. PAGENO="0169" 163 DEMONSTRATION CIT S AND URBAN DEVELOPMENT On the other hand, my brother, who had no snch help, but came back fro~n World War II to attern t a practice in San Antonio, found it a difficult thing. Prac1~ice is not as asy as many people would have you think. Just because a man has an M.D. degree and has a professional career ahead of him does not me n hat he can start right in. And he is flow involved in a group practic I a facility known as a polyclinic, in which the doctors have the r ou ces in order to obtain th~ credit, in order to construct the buildin a d buy the equipment. And after some 10 years or so, maybe more, e still have their mortgage arrange- ments and their payments, plus ee ing it up. At the same time, they are serving an area need, a vast ne d which of the deprived area in ~Te5t San Antonio, which is pr do inantly of Mexican descent, or Latin American, or whatever yo * ant to call it. I think that this legislation here is an indispensa le djunct to the Health and Pro- fessional Act that was recently pas d by this Congress. In that connection, I would like o s ncerely compliment Dr. Graning for his personal contribution to akng that a reality. And also to give acknowledgment to the debt ha my district, the 20th District, has, because it would have been im os ible for us to be counting on the full construction of the third br ne of the University of Texas Medical School had it not been fo t e passage of this act, because the legislative enactment-which in id ntally foffered when I was in the State senate-which created t is hird branch, was completely conditioned on Federal grants. Thi is the way the Texas Legislature wrote the law. It said, we will pro id our support when and if the Federal Goirernment has grants-in-ai o matching funds itself. So this has become an inextricable pa nership arrangement. I am very glad that through this 1 gi lation you visualize and con- template the partnership arrangemen e tended to the primary areas where the doctors will be helped in a e ingful way, and where they still can retain all of the aspects of t ei private practice. There is no question that the gen ra practitioner today i~ con- fronted with a very serious problem. In fact, he is confronted with gradual extermination. And I think t at his type of legislation is not only right ; it is not only just, but very e essary,to do the very thing that we have already undertaken as a ri cipal step in the Congress, and that is to reduce the wide gap betwe n he existing number of doe- tors and the increase in population. I might say in conclusion that I hap ei~ to agree with the concept of insured loans as well as direct loans. now and 1 am aware that there is more of a controversial aspect to the doctor loan type of acti\Tity. But I, for one, have never s a d the gloom and doom of the dire prophets and all of these peo le ho have opposed every- thing from social security to medical car to the Construction Act of 1968. I might finalize this by just saying that t ink my record in voting for ~ medicare clearly shows my position ; ai d again in this family constellation of doctors we had a division of pinion. And the only one who could never afford to say anything o e was my own brother, because in 1937, in the middle of the depress on, lie could not have gone to school if it had not been for NRA. And so e never said anything about medicare. PAGENO="0170" 164 DEMONSTRATION CITIES AND URBAN DEVELOPMENT And I might say that up to this point it lpoks OK. And I cornp~i- ment you for tI~ final word on it. And I 41o hope that the Congr~ss will put a stamp of immediacy on this proposal, because I think i~ is very urgently nøeded. ~ Mr. COHEN. Thank you. I would just like to say, ~fr. Gonzale , that although there s a great deal of controversy, not only in youf family, perhaps, on m~di- care, but in the whole United States. But I am very happy to rej~ort that today, which marks 7 months since the medicare law was ena~ted, we have received the most wholehearted support and cooper~tion from the oveirwhelming bulk of the physicians of the country i~i the administration of medicare. And I f$l that we are going t~ get 994~00-pe~c~frit coop~ration with the pl~ysicians in making thi~ law work when it goes into effect on July ~4 So there have been a ~ot ~ of changes occurring and I believe they h~ve been. very construc1~ive. Mr. BAi~Err. ~Ihank you, Mr. Gonz4lez. Mrs. Sullivan ~ ~ Mrs. SULLIVAN. Thank you, Mr. Chaifman. . ~ ~ I want to apologize to you, Mr. CQhen, for not being her when you made your presentation. But there was a bit of exciteme t down in your agncy and I ~topped by theSe~retary's Office at his in itation. Mr. CO*EEN. . I am sorry I oouk1~ft~iot be there, Congres woman Sullivan~ `~ . , ~ I ~ Mrs. St~u~IvAN. It was fun and ifltfresting. I understand he Sec- retary * in~Tited us to meet the * regio4~l directors from all ver the country awl also invited President .T~hnson, who seemed to njoy the occasion,also. I Mr. COHEN. Yes. I am glad you co~ild come. Mrs. SULLIVAN. I did not get to read your whole mes age, Mr. Cohen. But I. would like to ask you this one question. The ultimate test of legislation Of this kind in my estima ion is the benefit to the American consumer~ ~ Is there any way that you could measure or describe the bei~eflt to tl* ti~e*r of medical servic 5 in terms of ecOnpmy and convenience or. be#ter service of the kind of facility which ~vould be built if we enact ~LR. 9256 ? : ~ Mr. C ~. OHEN. ;YCS~ J.thjnk I can. [ * ~ ~ . ~ Let me say this. I thin1~ the v~rious studies show that a group of people, physicians or dentists, wo*king together with. aid and equip- went can render a more efficient and a higher number qf any given services to the consumer for the same price. I think /it stands to reason that if you. can bring physicians. together in a g~oup, so that th~y. ~re~ . not using all this . time, let's say, driving thisJ car around, whic~i is not exactly the highest ~se of a physician's.train~ng and expe- rienn~, but have them together iq a group where. people c~an come, and they can use these services, you! are going to get more /hours of pro- fessional `service per week fron~ the physician. / :S~condly, you can use more! subprofessional persoi~neL I recall when I was a boy and went to tl~e dentist, the dentist ch~aned my teeth. But today we have a practice where you have .a situation/ where. dentists may have a number of chairs and dental assistants, an~ he supervises the cleaning of teeth, and he will undertake the more /advanced work that requires his professional training. / Now, anything that brings people together in a group where they are working congenially and ~ffectively is going to gi e the consumer / PAGENO="0171" DEMONSTRATION C~T E~ AND URBAN DEVELOPMENT 165 a greater content of ~ervice ~t ~it er the same price or even at a lesser price. So look at it from t.h~ 0 sumer standpoint. I have no doubt in my mind, and I say that ui~e ui ocally, that it can provide a greater quantity of service. For instance, in or~e study\ i 964, published in the November 2, 1964, issue of Medical ~con~ Ic ~ showed that the average number of patient visits per week f~r a hysician working alone was 112. But for a partnership or group i w s 140. Now, I don't think ~ve shou\1 judge entirely on that basis, because you don't wane to judgi~ the qu~i t~ f medical care on a quantity basis. But in answer to you~r questi~n I ave no doubt in my mind that it i~ more efficient from a co~t stand~ in no*,. when you are using-and, as we are going to use-~n medi~a p ~actice, more and more high-dost equipment, like cobaltn'~aebines~ -r ~y machines. Just 1 machine for a group ~f 10 or~ 15 doctors, or any group that is necessary, can be use~ so muc~i n~ r~ efficiei~tIy, ~u~d thus, it helps to reduce the price of medical car~, n he long run, to the con~um~r~ Mrs. StjLUvAN. The ~ne thin~g th t I dik~I want to ask was, woul4 the doctors pass this savi~igs on t~ t ~e ~nsumer? , . ~ Mr. COHEN. If they d~ nOt p~s t e income savings on to the con- sumer, if they rend&r m~re or b~ tèi ser~rice for the same price, the consumer is still getting a benefit ~r m `t. . ` ~ Mrs. SuLtjvAN. I hap~en4~d td~ el ng to, I think, one of the first medical health groups, to ~iy kno~* ed e~ that started back in the mid- thirties, back in St. Loui~. And\ t nk that they can, if they are operated correctly, r~nder n very ~ od servi~g to the conimunity. But I am willing in âe~y way ~ o sibly can to help them do this more efficiently, if, in the long run~ i ~ is going to benefit the consumer. And this is something that I woul4 l~kè to see and have some evidence of, because we are doing m~re and \rnor to help the professional man. Mr. COHEN. I think the best ~vid~nee s this : Tfyou take the Feden~1 employee health benefits prograrr4 x~ er which Mèi~rbers of Con- gress and the people in ~ the\ex~cuti~ bi anch have ~n opportunit~ to be insured, and if you anal~ze the l~ pi al admissions ` for nonmater- nity cases per thousand p~on~ un\d r he plan fi~om 1960 to 1962, you will find that those Fed~ral em~l y~ s ~ho ~pic.k~1 a~group prac- tice plan have a lower utili~tion rate in hospitals than for all other plans. \ ~ ~ ~ Now, this is not absolutely thieqiii~o a~ proof, bti~ it tends to prove that the consumer benefits `in\terms o~ o er hospital utilization from a group practice plan which l~as bui.lt\ i. t~ it a preventive aspect ; that is, where you go tO the physici~n'and$~ ociate yourself with his group, and he takes care of you when yôn ~r ~t~ll and when you are sick, and where you have annual check1~ps,.~ d l~e and the whole group can give you all the care that you need, tl~e po~sibility of having a lower iate of hospital care is very ~reat. 4 d that would mean that you as a consumer would be payir~g less fp h~spitai care as a result of group care from the physicians' seiirice~. \ Mrs. STJLLIVAN. In other woi~ds, it gd~e b~ck to the old idea of pre- ventive medicine. Watching ~hrough \ ei~i~dic exawination of the patient for any indication of trouble ins~e d of seeing the patient only when he is sick enough to be put i~ a hosp~t 1. Mr. COHEN, Yes. PAGENO="0172" I 166 DEMON&t'R~TION CITIES AND TfltB. D1~VELOPMENT Perhaps Dr. Lee would like to e~omment onkhat. Dr. LEE. I would like to add one other tI'ing that is not an obvic~us benefit. When you have physicians in a group there is a const~nt stimulation for them to keep up professiona~lly. They are given ti~ne off to go to meetings and they o~ten have opportunities to take sabb~ti-. *cais for professional study. So physiciaps ` in a group over an /ex- tended period ~f time tend to keep up prof~ssiona1ly more than ph~si- cians in solo pi~ctice. j / . You also ha?e the constant association ~f other professionals, ~frour peers, you mi~ht say, looking o~rer your sh~ulder. And that impr~ves the quality of care. This is already don~ ii~ most hospitals. B~it in outpatient care and in home care, this isn~t the case, except in g$ups. This is something you can't put your finger on, you can't say/ that it has a certain specific benefit. But I tl~i~k there is no questior~ that over time this can . accrue very definitd~y to the benefit of the/indi- viclual patient who goes t&thegroup physician. Mrs. SULL~VAN. Thank you both. Mr. BAR~TT. We are now going to give Mr. Brownstein an ppor- tunity to make his statement. And then ai!ter you have made your sl4tement, Mr. Brownstei , I am sure the members yould like to ask you sqme questions. But if Mr. Cohen yould remain, it mafr be helpful to Mr. Bro nstein and to the committee. Mr. Brownstein, would you proceed? STATEMENT OP HON. PHILIP N. BROWNSTEIN, ASSISThNT SECRE- TARY FOR MORTGAGE CREDIT AND COMMISSIONER, PEDERAL HOUSIN~! ADMINISTRATION Mr. BROWNSTEIN. Mr. Chairman 4d members of the committee, I am pleased to appear before you agai~ to discuss FHA's participation in the administration of H.R. 9256, introduced by Congressman Pat- man. Under Secretary Wilbur Coijen has discussed the need for a program to facilitate the financing o~f facilities for the group practice of medicine and dentistry. I will, therefore, confine myself to how we would propose to process applications for mortgage insurance under the bill, if it is passed. On the very important aspects of the proposed legislation which require specialized knowledge in th~ medical or dental fields, we would rely heavily on the professional adkice and technical assistance of the I)epartment of Health, Education,J~nd Welfare. As Under Secretary Cohen has told you, we have already had a number of discussions with flEW staff on the provisions of H/R 9256. These conversations have been very constructive and harmothous. I am sure that we can develop a proper blending of the skills of HEW and FHA needed to administer the chairman's bill in a responsible manner. In drafting regulations and procedures, and in the establishment of minimum standards for construction and equipment, HEW has agreed to prøvide us with assistance relating to the medical and health aspects. HEW will also provide consuIta~ion to communities and groups pro- posimg to establish group practi~e. HEW will similarly assist us in the processing of applications ~* mortgage insurance. In the review of applications, they have agreqcl to advise on whether the proposed PAGENO="0173" 167 DEMONSTRA~VION OI~V ES AND URBAN DEVEtO?MENT group practice inc1u~Ies stich\ ~ e jalities as are appropriate and corn- patible ~ ~vith the neec~s of the\ r~ ; ai~d oti the appropriateness of the ~rrangem~nts and ag~e~nent~ in ng the participating physiciai~s or dentists. Theywill a~Iso ~dvi~e i~ n the design and equiprnent of each proposed facility and~the nee~ o such a facility in the area in ques- tion. To help us in a~p~isi~ i~ financial sow~dness of tlie proposal HEW has agreed ~ to ~ro~tide ~i *`th estimates of the revenues each group practice facility can be e~ ec ed to produce. ~ With this very irnpc~rtant a~ista ce from FlEW, I believe we ~il1 have no difficulty estaF~lis1~ing \p oç dures for reviewing applications for mortgage insurano~ wider l~1~i p oposedI~gislation and in making sound judg~nents on ~ t~en~i, ix~th ~ r~m ~ ~ r~ai ~tate aii~d financial standpoint and from Ute sta~idpc~i t `~ ~ whetherLhefacilities so financed will contribute to the m~di~a1 an h aith objective of the bill. In' effec~t, ~ih'atwe con~em~lat~ i ~ joint processing of applications, with FHA reviewing th~e eler~ t~ of ~he propQ~i relating to the soundness of th~ mortgage ~jnan~n g and HEW reviewing those ele~ ments of the proposal which rela~ to edicine and;heaith. To speed up this joint review, we ~huld p~o 6 s that HEW ~nd FHA would carry out many of these st~ps ~imu~t ne usly. Because of the need foi~ façiliti~ ~ Q this natn~re ~ and the apparent lack of adequate financin~, we wo\i~ d ope that the proposal will re- ceive favorable ~o~isiderati~n by th~ ~ 4 ~ r~., : ~ ~ ~ With your permission, Mr. Chai~ ~ , we ,~re s~Thmititng suggested amendments, in line with oui~ re~~ t ~ n the bill, which we believe would improve the administration o~ he prOgram. These will include technical and conforming ~r~i~ndn~ t~, ~ some . o~ which result from organizational changes. in ti~e creatiE~ ó the Department. Mr.. BARRErr. You may ~ si~tbmit it\ o~ ~ the recoi~cL Without objec- tion it is so ordered. ~ \ ~ ~ (the amendments referred\to ~ollo~V ~ ~ ~ DEPARTMENT OF UOiJSING AND, t~YRB~N t~ 1~L ~ENi~ ?ROPOSED AMENDMENTS TO ~1E. ~256~ ~9T~dQ eRESS Pagel ~ ~;\, ~ A ~ Strike out "Uousing and ~Iorne finance 4~ 1~i stratnr" in the title and inseEt in lieu thereof "Secretary of Housi1~ga~id th~b i~ evelopment". Page2 Line 5 : Strike out "N" and insert 4i uèu the~,e 1~ ~ Line 8 : Strike cut "1001" and * i~sert in ~ u ereof "1101" and strike out "Commissioner" and insert In lien tI~ere~f "Sic et~ry". Lines 14 through i6: Strike out 4n t~ielr ~ ir~ y and insert In li~ti thereof "ment tbereon:"~ ~ ~ ~ ` ~ ~ ~ . ` ~ \~ . \ Lines 19 and 20 : Strike out "qom~zaisst~i r~' and Insert in lieu thereof "Secretary". ~ Line 21 : Strike out "Comm1ssionei~" and in~e t I l1e~i thèreöf "Secretary". Line 25 : Strike out "Coin-". ~ ~ ~ ~ Page3 ~ ~ ~ `1 ~ " ~ Line 1 : Strike out "missioner" and i\~isei~t in r t ereoi~ "Secretary". ~ Line 7 : Strike out "Commissioner" ~nd inse I U u thereof "Secretary". Line 8 : Strike out "is completed," ~tr~d ir~sert ~ lie . thereof "or rehabilitation is completed.". ~ ~ ~ \. ` ~ Line 9 : Strike out in its ei~tirety anc~ in~ert i ~ iei~i thereof "The value of the property may". Line 10 : Strike out "sioner's discretlo;". Lines 11 through 14 : Strike out in t~ieir enti e y nd insert In lieu thereof "physical improvements, equipment, util1tie~ ~ 1 hi* the * boundaDies of the property, ` ~ I PAGENO="0174" 168 I 1~ DEMONSPRATION CITIES AND URBA~ DEVELOPMENT Line 1G : Insert after "struetion" preceding the comma "or rehabilitation". Line 17: Insert after "construction" "or rehabiLitation" and strike out "Co - missioner" and insert in lieu thereof "Secretary" Lines 18,19, an~ 21: Strike out "Oommissioner~' each place it appears and in- sert in lieu thereofj "Secretary". Page4 I Line 3: Strike out "Oommi~sioner" and insert ~t ti~u thereof "Secretary". Lines 5 and ~ Strike out "Commissioner" a$ Insert in lieu thereof "Sec- retary". j Lines 12 through 25: Strike out subsection (e~ in its entirety. Page 5 Line 1 : Strike out "(f)" and insert in lieu thereof " (e)". Line 5 : Strike out "Commission" and insert in lieu thereof "Secretary". Line 9 : Strike out " (g) " and insert in lieu thereof " (f) ". Lines 14 and 15: Strike out: "Commissioner" and insert in lieu "Secretary". Line 17: Strjke out "Commissioner" and ins~rt in lieu thereof Lines 18 tlitçmgh 29: Strike out in their enti$t~r. Line 21: Strike out "that purpose," and finsert in lieu thereof Secretary". Line 24: Strike out "1OO2'~ and insert in !ieu thereof "1102" and "Commissioner" and insert in lieu thereof "~cretary". the ont Pt~we 6 Line 4 : Insert after "prepayn~ents." four new sentences as follows : `~In addi- tion to the premium charge, the Secretary is authorized to charge and co1~1ect such amounts as he may deem reasonable for th~ analysis of a proposed p$ject and the appraisal and. inspection of the property and improvements. `where the principal ol~ligation of any mortgage accepted for insurance under this title is paid in fu1I~priorto the maturity date, the ~ecretary is authorized to $quire the payment b~ the mortgagee of an adjusted *emium charge. This charge shall be in such ambunt as the Seeretery determiu~ to be equitable, but not i4 excess of the aggregkte amount of the premIum ebaft~g~es that themortgagee w~u1d other- wise have beeii required to pay if the mort~age had continued to be injured until the maturity date. Where such prepaym~t eceurn, the Secretary is/authorized to refund to the mortgagee for the account of the mortgagor all, or s~ich portion as he shall determine to be equitable, of the current unearned prem~um charges theretofore paid." ~ / Line 6 : Strike out in its entirety and insert in lieu thereof "debei~tures which are the obligation of the General Insurance Fund at". / Line 8 : Strike out "Conimissioner" an~ insert in lieu thereof "Sec~etary". Lines U through 25 : Strike out section 4008 in its entirety. i~age7; ~ ~ . 11 Linesi through 25. : -Strike out in their/entirety. Page8~ I Line~ I th~ough:6 : Strike out in their/entirety. - - Liim 8 : Strike out "1004" a-nd insertftu lieu thereof "1103". Lines 10 and U Strike out in their~ntirety and insert m lieu th reef provided in subeection (g) of. section 207, exee~t that an additional amo t equivalent to 10 per ~entum. of the unpaid pHn~ipaL amount of the mortgage s all -be deducted from the total face amount of the debentures issued -or the cash payment made to the z~iortgagee. The", Lb~e 12 : Strike out " (e)" and insert in lieu thereof " (g)". LIue 14 : Strike ~rnt "except that" 1-and Insert in lieu -thereof "and" and strike out ~&`. Ltne 15 : Strike out in its entirel4vand insert in lieu thereof "shall be deemed to ~fer to thbl title." Liues 16 through 18 : Strike outinJtbeir entirety. - Line 20 : Strike out "1005" and Jinsert -in lieu thereof "11 " and strike out "Oommissioner" and iflsert. in lieu t~ereof "Secretary". Page 9 Lines 1 through 13 : Strike out section 1006 in its entirety. - -Line 15 ~ Strike out -"1007" and iLisert in lieu thereof "1105". Lines 16 through 22: Strike out tii their entirety. Line 23: Strike out "(2)" and h~ert in lieu thereof "(1)". PAGENO="0175" oq~ jo ipi~~ Jo 0$ E~T1flf 110 \pu~ `~p~p ~ uo ~ A~q p~i~iau~ eq ui~tj~ :~uuotu~ ip~i~~~& `9~j1 `4)~ eunj~ o~ ~t~id QOø'O~O'Oi* p~x~ ~ou iirn~i~ suo~T~pdo~tIdB tpn~ ~tr~ ~U~ax~ ~ s~q~ \j~ ~od~ud e~j~ ~uo £~u~ 0; B~S~ZOu eq £~w ~ smn~ i~ofls pun~~ SIll O~J pE~T3~I~1. i41T~ 04 o~ p~~otpn~ £qeJEq ~n ~eq~ (q),, : ~1Of~O~ S~ 4~) pt~ (q) siiop~asqn~ ~tau ~J~UJ : ~ OUJI ~JV \ \ *~~~3tT~ UT p~EIT~ocIE~p eq TirnTs,~ ioe~~ti~ naTi UJ ~I~1j pir~: A~ ei~ L~ ~tp t~ ~uo e~j~i~ : ~. i~~noiip ~ \ *~~eq A~irni,, :~no a~ITJc~s : ~ ~U~rJ \ 9r*d~;J \ ~p?~fl3qa c~q £i~m ~flfl SJ~fl ~IOPUfl Lfl~Ja~S ~ JQ sUE3~1x~3 1[~*~ ~ \.~nv~ ~`i~ ~jo ~oT~T.4~oJ~T aq~ ~jno ~uT1cJ;R~a JoJ. 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Any sums appropriated/ under this subsection sh 11 remain available ~nti1 expended. " (c) Interest shall accrue tothe ¶~reasnry o~ s4trns appro~r1ated to the F * nd and not offset by deposits from the Tm~d intO t~ie Treasury aa miscellane us receipts as provided in subsection (a) . The rate ~f such interest shall be de er- mined annually In advance by the Secretary of Itbe Treasury taking into on- sideration the current average yjelds to maturity (~n the basis of daily do ing market bid quotations during the month of June of the preceding fiscal y ar) on outstanding interest-bearing and marketable public debt obligations of the United States having maturities cothparãbie to l~ans made under title II of this Act. From timeto time andat leaSt at the elosetf each fiscal year, the Secr tary shall pay to the Treasury, as miscellaneous rec~ipts, all accrued interest nder this section." *! Lines 9, l2~ ~nd ~17 : Strike out "Admlnistrt~teif' each place it appear ~ and insert in lieu thtereof "Secretary". ~ ~ ~ : ~ * ~ * ~: ~ ~ Lines 23 and~4 : Strike out " `eöhstruCtion c$t~,!'.. Line 25 : Strike out " `group practice unit oi~ organization',". Page 17 it Line 2 : Strike out in its entirety and inser1~ in lieu thereof "them by ection 1105 of the National Housing Act. The term `group practice unit or or aniza- tion' shall have the same meaning as given in aection 1105(3) ~f such Act, exc~pt that it may also include a public nonprofit agency or organization est lished for the .purpo~es outlined in section 1105 (3) (13) of such Act." Lines 4 through 25 : Strike out section 301 in its entirety. Page 18 ~ Lines 1 t1u~ou~h 12 : Strike out in their ez4i'ii~y. LInes 14 and 15 : Strike out in th~ir ent*ety and insert in lieu th reef the following : "Sue. 301. (a) The ~ecretáry sh~il"~ Line 16 : Strike out "them" and insert in 1i~u thereof "him". Line 20 : Strike out "X" and insert in lie.ufthereof "XI" Pczgel9 . Line 5 : ~ strike out "1007(4) " and insért~in lieu thereof "1105(3) ". Line 6 : Strike out "1007(5)" and insert lii lieu thereof "1105(4)". Line 7 : Strike out "they" and insert in li/eu thereof "he". Line 9 : Strike out "Commissioner and the Administrator" and Ins rt in lieu thereof "Secretary". / Line 13 ~ . Strike out "them" and "their"tand :jn~~rt in lieu thereof /"him" and "his", resp~ctive1y. I Line 14 ; Strike out "X" and insent in 114 thereof "XI". Line 19 ~ Strike out "Administrator" ar4 insert in lieu thereof "Secr ry". Page$30 I Line 2 : Strike out "303." and insert in li~uthereof "302.", Line 4 : Strike out "100T(2)" and inserl~ in lien thereof "1105(1) ". Lines 5 and 6 : Strike out in their e~tirety and insert in lieu hereof "Na- tiontal Housing Act) , the Secretary may pro-". Line I : Strike out "or obtain" and insert in lieu thereof "by, contract or otherwise". / Lines 11 and 12 : Strike out in their entirety and insert in lieu /thereof "See- retaryis authorized to utilize available"~ Line 14 : Strike out "X" and insept in ~ieuthereof "XI". Lii~e /1T : Strike out "either or both jof" and insert in lieu ther of "the Secre- tary", ,~ Line:18 : Strike out "them". , Line 19 : Strike out the heading a insert in lieu thereof " ONFORMING AMENDM1I~NTS" Line 20 : Strike out "3~4." and inse* in lieu thereof "303.". Lines 1 and 2 : Strike out in their entirety and insert in lie thereof "tions which are insured by the Secretary u~ider title XI of the Nation 1 HousIng Act'." Line 7 : Strike out "Federal Eousiiig Commissioner" and inse in lieu thereof "Seej~etary" and strike out "X" and i~ert in lieu thereof "XI". Line 17 : Strike out "X" and insert~in lieu thereof "XI". I Page 21 PAGENO="0177" I DEMONSTRkTIQN 60-878-66-pt. 1-12 171 CI IE AND URBAN DEVELOPMENT Page 22 Line 4 : Strike out "X" and inser in len thereof "XI". After line 5 : Acid two addition 1 a enciments as follows: " (ci) Section 212(a) of the Nat! nal Housing Aot is amended by addiflg at the end thereof the following new sente ce : `The provisions of this seeticñ shall also apply to the insurance of any inortga e nder title XI.' .. (e) Section 227 of the National ~ sing Act is amended by inserting in the first sentence of the introductory tex af er `or rehabilitated multifamily housing' the folloWing : `or a property or proj t u der title XI'." ~ Mr. BARRETT. Thank you, Mr B ownstein. I have a question that SliOul b dbected to you, Mr. Brownstein. A~ bill introduced by Mr. Patm n, .R~ 9256, would authorize FHA insurance for the construction of ~ ac'lities to be used for group medical practice. It also provides standb d rect loai~s in the event that private lenders are unable or unwilling o ake FHA-insured loans. Direct loans, of course, are or controversial. And I wonder whether the subcommittee shou n t consider ~tuthorizing only in- sured loans by the FHA, and not u orize direct loans at all, You already have a nursing h m insured loan program, do you not, Mr. Brownstein? Mr. BROWNSTEIN. Yes, we do, M . hairman. Mr. BARRETT. Which seems to be ~v rldng well, atid it seems to have the cooperation of private lenders. In view of this, and in view of ~h f ct that Fl-TA-insured loans are eligible for Fannie Mae's second4r arket operations, what would you think of the subcommittee re~ rti g a bill which would confine the new program to FHA-insured an ? In that way we can get the job done, and, of course, at no cost o b rden to the Treasury.' Mr. BROWNSTEIN. Well, Mr. Cha~r a , we certainly would want to have the maximum participation in t is rogram by private investors. And we would `hope that and expect h t t a very large degree it would be financed in this manner. As the chairman has suggested, w o ave a successfully operating nursing home program which is bein n need by the private market. Also, as has been pointed out by he chairman, these mortgages would be eligible for sale to FNMA i th secondary market activity. The purpose of the direct loan fea u e as to provide a backup in case the private market would not ta e th e mortgages. There are also, as the committee o s, geographical variances in the availability of mortgage funds, a in some of the smaller areas there may not be private funds availa I f r these mortgages. It was for these reasons that the pr Os 1 was made to include the direct loan feature. Mr. BARRETr. Thank you. Mr. Fino? Mr. FINO. Thank you, Mr. Chairman. COmmissioner Brownstein, in lookin t his legislation, none of what is proposed would cover facilities ye though they would be permanent fixtures ; is that correct ? ot er words, you build a medical center, large or small, but a lot th stufF that goes into it, medical equipment and apparatus which s ye expensive, will not be included in this loan, would it ? . Mr. BROWNSTEIN. Yes; that `would b nc ucled in this facility, Mr. Fino. PAGENO="0178" ~ I 172 DEMONSTRATION CITIES AND URBAI~ DEVELOPMENT Mr. FIN0. This wo~i1d be a departure from the usual FHA loan? Mr. BROWNSTEIN. Of course, we do have søme of this in our nursii g home program. Mr. FIN0. Sothis would cover it. In many instances the cost of t is medical equipment would probably be as m~ich as the building itse f? Mr. BROWNS~ETN. It is very expensive.f Mr. Fhio, we have s~ib-. ~ mitted to the cOmmittee some t~chnicai am~ndrnents. And one of/the suggestions th~tt we have submitted wouldj provide that the mortg~age will include the value of the property, inc1i~Lding the land, the prop~sed physical improvements, et cetera. I* Mr. FIN0. Equipment and fixtures? Mr. BROWNSTEIN. Yes, sir. Mr. FIN0. DO you think there should b~ liitdts as to insurance, par- t.icularly as to the permanent facilities ? Mr. BR0wNSmIN. Limits a~ to the insurance ? Mr. FINO. ~As to the in~urance. ~ Mr. BROW±~STEIN. Well, I believe that/the limits should be tho e that are proposec~ in this revised draft that w~are submitting. Mr. FIN0. Can you give u~ an idea o~ what the amendments would be? ~ I Mr. BROWNSTEIN. Well, a ~O-percer~t mortgage is being p ovided here. This is in the original bill. Mr. FIN0. How much do you estimate we should authorize *o carry out this legislation ? Mr. BEOWNSTEIN. You will recall that in the Housing Ac of last year many FHA insurance reserves ~were consolidated into ne gen- eral reser*e, except for the mutual mcfrtgage insurance fund, nd then the Qoop~ativ~ program was also fi~ncied on ~ mutual basi . Since this woulki go into our general fundjit would be our recoin endation that there not be any specific Iimit4ion on the amount, bu that this go into our regular financing in the ~neral reserve. Mr. FNO. Thank you. ~ ~ ~ Mr. BARRETT. Mrs. Sullivan ? ~ ~ , ~ ~ ~ ~ Mrs. SULLIVAN. No questions. ~ ~ ~ Mr. I3ARRETh Mr. Ashley ? Mr. ASHLEY. Just one question. ~ Getting back to the need factors there apparently wer~ 400 group practi~e facilities in being in 1946~ ~nd there are 2,000 tod/ay Wouid it be possible to submit for the rec~r~, Mr Cohen, or can ~rou give me an idea, whether this rate of gro~fth has gene~a1ly increa~ed in recent years ? What, for example, has b~en the story in the last 0 years? Mr. COIEEN. Well, as far as I know, the actual last c~mprehensive study tli*t was made is in this report, medical groups i~i the United States in 1959. ~ ~ . . I Mr. ASHLEY. If that is all w~ know, how do we kn~w if there is any need, Mr. Cohen ? ~ ~ : . ., / Nfr. COHEN. The need, I think, is predicated on oth~ factors than the ~iumber of the groups, Mr. ~shley. It is predicatec~ on what I in- dicated before, the overwhelmi~g demand for more ser~rices, for more pec~le. / . / Mr. ASHLEY. I am sorry,. I /don't see. Are we talk/ing about 1959 data to support the case for thi~bill? PAGENO="0179" DEMONSTR4TION CI IES AND TJRBAN DEVELOPMENT 173 Mr. COHEN. No, sir ; 1959 s just a statistic about the actual num- ber- Mr. ASHLEY. I-low many g oup facilities were constructed last year with conventional financing? Mr. COHEN. How many nle(l cal groups? Mr. ASHLEY. That is what th bill is about. Mr. Col-IEN. I-low many wer constructed under commercial financ- ing ? I don't know that, becau e I do not know how many there were last year. Mr. ASHLEY. I-low do you k ow if we need any increase over last year's production if we don't k o what last year's production was? Mr. CohEN. Well, we know e erally from the situation around the country that it has not bee a equate-from the trend over the years, and from our knowledge of w at is going on. Mr. ASHLEY. How can we me su e a trend if we do not know the facts? Mr. COHEN. We have, Mr. Ash ey, the facts from 1956 to 1959. Mr. ASHLEY. This is 1966. Mr. COHEN. Fine. But I can' ake up the facts if they do not exist. Mr. ASHLEY. Were some facilitie brought iiito existence under conventional financing last year, t e ear before, or the year before that? Mr. BAimErr. I wonder if the gen le an would yield. We will have other witnesses co e n later and testify to the fact that the bill is needed and they sh ul help answer your questions, Mr. Ashley. Mr. COHEN. I just want to say th t, f course, we do not know the number of-I would have to admit t is, that we do not know what the individual practitioner or the grou s re getting in terms of corn- mercial help at the present time. Mr. ASHLEY. I am talking about t. e umber of facilities. You say in your statement on page 2, Mr. Co e In ll~46 there were about 400 medieal u I s 1 group practice in this country; today the group practices number nearly 2, How do youknow if 1959 is your la t * at for data? Mr. COHEN. What we did is, we sur eyed-we did not make a survey of the actual number, but we atte pted by our specialists in this field, recognizing what was goin n i the country, to just make a sound estimate of what had happe e snce 159. But we do not have a specific count. ~ Mr. ASHLEY. I do iiot kno* how o c n come in before a coin~ mittee and say that there is this need i it is n the basis of a projection as vague as the one you are suggesting, re lly don't. Mr. COHEN. I do not understand you p sition. If your point is that you can't take action before you kn w down to the last number how many there are in the United States Mr. ASHLEY. You cannot tell me for ast year or the year before or the year before that. You are not able ~ ell me, apparently, what is goiug on in the conventional market, whe h r or n~t the conventional lending institutions are meeting the need o w ether they are not. Mr. Coi~IEN. There is no evidence that I w of-let me put it td~s way-that there has been a great increase i th number of group prac- PAGENO="0180" 174 DEMONSThATION CITIES AND URBA]~ DEVELOPMENT tice plans since the 1959 data. Nothing in arty of the medical journ4s or in anything .*e have surveyed would inqicate that there has be~n any change in this situation since 1959. J / Mr. AsHu~r. Mr. Brownstein, what do y~u thi~k about this ? / Mr. BROWNSTJ~IN. Well, I believe, Mr. A~hiey, that~ there is a n~d for financing these facilitjes. . ~ . ~ Mr. ASHLEY. Based on what, now ? ~ Mr. BROWNSPEIN. Well, based on the ob*ious conclusions that h ye been pointed out here. . Mr. Aslir~y. The obvious conclusions ? * Mr. BRO~WrEIN. Yes; I think so. Ha~ig a ~on currently in di- cal school, Mr~ Ashley, I am very syrnpathfric to this. Mr. ASffl* Yotihave a i~ered my/question, M~. Brown em. Thank you, Mr. Chairma~ ~ , ~ ~ Mr. BArn~rr. Mr. Moôrhead ? ~ ~ ~ Mr. MOOiU~tEAD. Mr. Browi~stein, woul not it be a reasonable hing for this Congress to pass this bill witho t title II, the direct ba pro- gram, and then after a couple of years see if there are these g ps in certain areas, and `see if there is a need that has not yet been c~mon- strated for a direct loan program ? / Mr. BROWNSPEIN. Of cOurse, this i~ ~ entirely up to the Co~gress, Mr. Moorhead. If this' i~ what Congrqss provides, obviously, *e will do everythihg we can to get the privat~ market interested in th/is kind of financing and' mak~th~pr~igram sm$ed. ~ Mr. MOOREEAD~ PbtbIiJt you, Mr. Ch~irman~ Mr. BAnni~p'i'. Mr. Stephens ? f' ~ Mr. STEPHENS. Is it contemplated !that the need for the linic be made in connection with office accomfnodations for the doct s? Mr. BROWNSThIN. ~ This would be ~ clinical type facility. Mr. STEP~IENS. What is the attitude of the various medica associa- tions in respect to the proposals that have been made here ? Do you have any expz'ession of the opinions of the American Med'cal Asso- ciation, ckr the State medical associati~ns~ Dr. L~. The AMA. several years/ago did a study of gro practice in general. Prior to that time, th~y had in general been pposed to the development of group practi~e. Since that study, ~ hich was headed by one of their former presi~1knts, Dr. Larson of Noifth Dakota, they have had a neutral stand regarding the developmei~t of group practice. With respect to this specific legislatio; I thi~k that the AMA would be opposed to this specific legislation. / Mr. STEPHENS. Why would they be opposed to this si~ecific legis- lation~ I Dr. Li~E. I think you would ~iave to ask the AMA/ that direct questi/on. I / Mr~ STEPHENS. The observatiQ~ that I have of the gr~up facilities that have been put together in. n~ home town is that tI~ey have been quite an asset to the people of n~c~mmtinity. A numI~er of doctors have; gone together, they have ~orrowed the money, a/nd they have built offices and joint facilities tk~ accommodate them. /And they can give you in their centers there a1~nost any kind of diagn~stic assistance that you need. And I think that the development o~f that type of thing is very fine. They are all individuals. They h~ve no partner- ship in building ownership. A,nd I would assume tha you would not PAGENO="0181" DEMONSTRi~TION CI IE AND URBAN DEVELOPMENT intend necessarily for those to be artnership arrangements, they could be any kind of cont~actuaI r latonslups, where a certain amount of space could be contracted for, on d be departmentalized and equipped the way a professional man w ul like to see it done. Mr. BROWNSTEIN. There is\ r o in the proposal for any sort of ar- ra.ngement that they might ag~e t Mr. STEPHENS. Persona.lly,\f o what I have seen of the particular groups that have done this ix~ t ens, Ga.-they have pediatricians, the surgeons, the general pra.c~i io ers, the eye specialists, and a com- mon X-ray room, and a labor~t r . I think it makes it cheaper for the average American to get m~ ica care, because each doctor does not have to finance the entire thing~ y irnself and then recoup his outlay by having to charge a high fee.\ A d I would like to see that. I do not believe some medical\ s h ols are teaching these young doc~ tors what to look for, however. ~A. d say that in this light : My father is a doctor. He is 85 years of a~e a d he is still practicing medicine. He relies not only on modern nia~ in s but what he sees. He says that the young medical man does not ~e y n what he sees but must take out all your blood before he can diag~n se a cold. Mr. BARRE~IT. I want to infor~ th members that we have a very distinguished former colleague t~ esffy this morning. And we are hoping to get him on at 11 o'cock. \ no ice it is now 20 after 11. Mr. Gonzalez, do you have any ~u st ons? Mr. GONZALEZ. Mr. St Germain\i h e now. Mr. BARRETT. Mr. St Germain?\ Mr. ST GERMAIN. Mr. Cohen, fr~ y ur title the purpose of the act is to provide group facilities for the\p a tice of medicine and dentistry. The word "medicine" in this case, do~s it i elude podiatrists, opthalmol- ogists, and chiropractors ? Mr. COHEN. The key words in th~ ill that would decide that, Con- gressman, are in section 1007 (2) wI~e e he term "group practice f a- cility" is defined to mean a facility for e rovision of preventive diag- nostic and treatment services to ambul to patients in which patients' care is under the professional supervis on of persons licensed to prac- tice medicine in the State, or, in the cas o dental diagnosis, under the professional supervision of persons lie n ed to practice dentistry in the State. . Mr. ST GERMAIN. It. says licensed to ra tice medicine. Depending on which dictionary you are using, a . if rent definition is given to that. One-once again, I ask you, podia ri ts, opthalmologists, chiro- practors, they are licensed in some State t practice. Would this be considered medicine or not? Mr. COHEN. Ophthalmalogists would e ; they are licensed to prac-' tice medicine in the various States. Dr. Lee might comment on the other tw Dr. LEE. I think this depends upon the tat . In general podiatrists are not licensed to practice medicine. T ey are licensed to practice podiatry. The chiropractors in those St te in which they are ii- censed are. licensed not to practice medicin , ut chiropracth~. Mr. ST GERMAIN. If we wished to includ p diatrists and chiroprac- tors, we would therefore have to ~rnend thi t specify or specifically include them? 175 PAGENO="0182" 176 DEMONSThATION CITIES AND TJRB DEVELOPMENT Dr. LEE. I wOuld think so. There are Lome group practices, course, that may include optometrists and podiatrists. They may ~e included in large medical groups where thej' work in association wi/th physicians and dentists. But this would nkt be the case with chi~o- practors, I am sure. / Mr. S~ GERMAIN. It says that the builder will have to agree tJ~iat the buildillg wtrnld be `used for the practige of medicine for the t~rm of the mortgag*~. That is whftt the act st~t4s. / Mr. BROW~rE~EN. Yes, the sponsor wiil :have to agree to this/. Mr. ST GEIØ~AIN. Am I to understandifrom that that the req~iire- ment could be ~ontained in the mortgage? ! ` / Mr. BnowNs~rnN. There wOuld be a regulatory agreement exequted at the time of the `mortgage, Mr. St Ger$in, which would hav~ this mit. / Mr. ST GERMAIN. Would it be a part ~f the mortgage, or a se~arate instruntent ut~recorde'd ? ~ . ` / "Mr. B~OW~ST~TN.' It would be a se~a~te instrument, but it ~vou1d be a part of fhe mortgage transaction. ,,~ / Mr. ST GJ~RMAIN. But i~t *ould not l~ a recorded `instrume.nt/? Mr. BRO~tNSTEIN. The regulatory agi~ement is' recorded. Mr. ST GEIU~IAIN. It is recorded ? ~ Mr. BRQWNSThIN. Yes. ` I Mr. ST GERMAIN. Where is it record~d? Mr. BROWNSTEIN. With the record~ of deeds, where the ortgage is recorded. ` Mr. ST GERMAIN. I am trying to figure it out legally, Mr~ Brown- stein. , ` Mr. BROWNSTEIN. It is iii effect a pairt of the mortgage. Mr. S~ GEBMAIN. It is a part of ~he mortgage. And th refore if someone ~lse were to purchase this bjiilding subsequently, h would be on notic4 in looking at tbe mortgage ~ Mr. BR0wNSTEIN. Yes. ` Also, FI~IA approval is requir d for any proposed sale. ` ~ ` ` ` Mr. ST GERMAIN. If ~ I wished ~ purchase the mortg ge also he would be'on notice of th~ fact that h~ must comply with this condition? Mr. BEOWNSTEIN. ` All parties wotild be on notice of this. Mr. ST GERMAIN. Now, is there a penalty clause-sh uld the in- dividu~d who builds the building l!2 years after he has bui t the build- ing,, could he decide tha~t this wou1~~1 no longer be used for roup medi- cal prtietices, and take half of the Jmildi'ng and rent it out o a discount house~ for instance, is there a p~na~'ty attached? Mr. BROWNSTEIN. What we w~iild do in, a case of that kind, Mr. St Germain, is proceed under the $gulatory agreement. nd we could take it over from him. Mr. ST GERMAIN. Take the bui~'ding over from him? Mr. BROWNSThIN. Yes. Mr. ST GERMAIN. Would you then sell it? Mr. BROWNSTEIN. `We could *° into court and enjoir~ him. from do- ing this. S / 1~r. ST GERMAIN. No furthe$ questions, Mr. Chairma~. lYir. BARRETh Mr. Gonzalez ~ Mr. GONZALEZ. Mr. Chairm n, I will defer in view f the limitation of time. PAGENO="0183" 177 DEMONSTRATION C E~ AND URBAN DEVELOPMENT Mr. BARRETT. Mr. Fino ha\~ v ry short que~stion. Mr. FINO. Mr. Brownstei~i, CO id a group of doctors who have a~- ready built a group clinic fa\ei it with a conventional mortgage later refinance it under this bill ? Mr. BRowNsai~IN. ~o ; their jy~ y not, Mr. Fino. However, if this Were subs~antailrehal~i1itatio~i fly lved, then this would be possible. Mr. FIN0. In other Words, e~ an ion? Mr. BROWNSTEIN. Yes~ Mr. BARRETT. Tha4 you, ~i . ohen and Mr. Brownstein, it has been nice tO have you h~re. We ar~ now going to ha*e th~ O orabi~ Hugh 3.Addonizio, mayor of Newark, N.J. His colleag~e a ci lQflgtime friend will introduce him. ~ ~ ~ ~ Mr. MINIsii~. Thank yo~i. 1\f . hairman and members of the Housing Su'bcommittee~ I appI~è ia your courtesy in asking me to introduce the next witn~ss,. the T~L ñ~ able Hugh J. Addonizio, mayor of Newark, who-in a ti~ne~hall~ e4 phrase which is literally tnw in this instanc&-ne.eds no ~nt~odu~ioi~ to you w~th~hom;he served so long on this subaommitthe. I k~ w ou are ~ l~appy to welcome him. back and to have the, hene~fit of hi~ . ie s~on the major housing legisla- tion now under consideration. A\~ ~ i . emb~r of the Housing Subcom- mittee during his almost ~ year~' er ice as the Representative from the 11th Congressional Di~trict, ~ o Addonizio made a substantial contribution to the valuable housi a ts enacted fr9m the 81st Con- gress through the 87th Co~igress. i~ broad grasp of housing prob- lems, gained during those.~sai~s, has e a tremendous asset to him in guiding the affairs of Newark sine ie ssumed the office of mayor in. July 1962. Likewise, his experience ~s mayo f large city, plagued with all the ills of our teeming urbar~ ceziters .1 ~ given Mr. Addonizio an inti- mate awareness of what mu~t be doi e to reb~ild our cities and how it. must be done. If th~ Congress help t ake the tools available, those cities that want to help th~mseive ~ i~t h as Newark under Mayor Addonizio's dynamic ie~de1~hip, ca~4 r~ y become places worth liv- ing in for all their residønts. . H~s co~n el, based upon his long experi- ence as legislator and adn'iini~trator, ~vili e of immense value to your subcommittee and your cQUea~Lies on\t e ~ uli cdmmittee in our study of this legislation that will vitally a~ff~c the future of pur great urban areas. . \ . . I am happy topresentmy d\istipgui ed predecessor from the 11th District, the present mayor of ~e~rark, i~ h J. A~idonizio. Mr. BARRETT. Thank you, M~. Mini h f your very kind remarks about our very fine former colleague. And I just want to say as the obair4~ n f this subcommittee, Mr. Mayor, it is with deep pleasure that ~ w Icome our o14 . and close friend and formercolleague, the ~ETo~orabl ugh Addonizio, mayor of Newark, N.J. A former member for years, the ñiayo~ a1 with us on this subcorn- mittee and did a tremendous jth in *~ritin legislation which has helped the rebuilding and rehabilitating ~ ur cities, and the pro- vision of better housing for our p~ople, p~r ic larly those in the lower income groups I I PAGENO="0184" 178 DEMONSTRATION CITIES AND UREA~ bEVELOPMENT . He became an expert in the legislative process, and now have prov d his outstanding ~abiIity in the administrativ~e field, and as a mayor ~f Newark. * ~ ~ I I want to tell~ you, Mr. Mayor, we greatl~ ~iiss you on this subco~n- mittee. But iz~i any event, ~our loss is, of 4ourse, Newark's gain. / And I mig1i1~point out that since he wa~ senior to me on. this s~ib- committee, I cannot help feeling a little bi$~of gratitude to the pe~ple of Newark, since if Newark had not claimed him, it w~nild have g~ven him the pleasure of sitting in the chairr~~&s chair on the Hou~ing Subcommittee today. ~ / I want to say, Mr. Mayor,' e~rybody on~ this subcommittee has ~reat respect ~ for yOu, admires yoti~ and certainly greatly appreciate~ the fine job you ~re doing in the city of Ne~vark. ~ And I am quite! sure my good fri~iid and your good friend,IMr. Widnali, would like to make a rema~k. Mr. Wm~u~. Thank you, Mr. Chairi4a~n. My longtiinefriend. this is the flrsttii~ I have seen the mem ers of our subcommittee fightingover who wasPgoing to introduce the itness first. We miss you very much~ in th~ years that you served on the Banking aild Currency Committee, y~u made a great contri ution. And you showed interest in those very serious problems that pla~ue our cities. ~ And your interest was not~just concentrated on th cities. During .thè time that you served th~ record will show yo r deep concern. ; I Franki~, I cannot understand wh~ anybody would want to be a mayor of ~ big city in America today!wi&all the problems t at they have. A~d I think you weather th~m well, and that in yo r office, from the comments that I have hearclj, you are doing a fine Jo toward solving those problems. ~ I We hope that you will counsel wi.t~tius and consult with u~ and give us the benefit of your advice. / Mr. AtD0NIZI0. Thankyou, Mr. Chairman, Mr. Widnall. / Mr. B~mu~m Mr. Fino? * / Mr. TFINO. Mr. Chairman, I am~very happy to be giv~n this op- portunity to greet our mayor. I ~iad the pleasure and pjriviiege of meeting him 14 years ago when I fi~'st flame to Congress. 4nd I want to say ithat my membership on t1~i~ ~ommittee is attributed to him, because he interest~d me in becôir~ng a member of the B~nking and Currency Committee, particularly the Subcommittee on /Housing. I want to make one observatic~i. I recall that whenJMayor Ad- donizio was a Member of this Coii~gress he was always see~cing ballots. Lately, we have been reading in the press that he has b~en dodging bullets. It ~s a pleasure to have you with us, Hugh. Mis. BAmu~m Thank you. Mr'. Mayor, we ~want to ask y4u first if you will be knd enough to intr~duce your associates. An4 after that we are goi g to give you an opportunity to complete yourj&~atement. And, there ore, we would naturally want to ask yo~ some questions. 1 PAGENO="0185" I DEMONSTRATION CI IE AND UREAN DEVELOPMENT STATEMENT OP HON. HUG~ ~ ADDONIZIO, MAYOR 0F NEWA1~K, NJ. ; ACCOMPANIED BY *E*RY CONNOR, GREATER NEWARK DEVELOPMENT COUNCIL; ~~1O~JIS DANZIG, DIRECTOR, NEWARK HOUSING AND DEVELOP)YI~N~ AUTHORITY ; ALDO GIACCHINO, CITY PLANNING OFFICER ;\ A~D DON MALAPRONTE, ADMINIS TRATIVE ASSISTANT \ Mr. ADD0NIzI0. Thank you, ~r. ~hairinan. ~ May I first say that I am hono~ecl\to appear before this subcommittee on ~ which I have had the great\ pr~vi1ege of serving for many years while a Member of Congress. \A1i~d I certainly do appreciate those very fine remarks that were made\ab~ut me here this morning. On my left is Mr. Henry Con~or,\who represents the Greater New~ ark Development Council. \ Next to him is Mr. Louis Dan~ig,\ who is the executive director of the Newark Housing and Redevelc~p~ent Authority. My extreme right is Mr. Aldo ~i~\cchino, who is the city planning officer of the city of Newark. \ \ ~ ~ And on my immediate right is ~[r. \Don Malafronte, who is my ad- ministrative assistant. \ \ For the past 4 years, as mayor o~ tl~e largest city in New Jersey, I have witnessed the satisfying resu~ts ~f legislation which was fash- ioned in this subcommittee. \ Today, I would like first to pay I~rThute to President Johnson, not only for recognizing the great prol~1~i~is that confront the cities of America, but resolving to meet thes~ pkoblems with a comprehensive and coordinated Federal-city partner~hi~. The strengthening of this partnei~s1~iip\ is the heart of the legislation beforeus. \ \ \ I would also like to commend Con~ess~nai~ Patman for introducing the Demonstration Cities Act and Qo~ig~essman Barrett for speedily surninoning a meeting of this subconi4~tte~. In the last few years~ many Fedei~a~ p~ograms have been designed to meet specific goals and objective~ i~i ~ur cities. They have been helpful, but often too scattered or too ~rn~ll to make a major impact. The time has come to ascertain the effect~ve~ess of all of these programs when they are effectively combined in a b~oa~l problem area. The Demonstration Cities Act will ~ro~ride this challenoing test. It is vital that we ~etrn to centralize r~sppnsibi1ity and ac~iieve the highest level of coordination and it is v~tal\ that we do it now. The immensity of the problems of our rna~or \cities today leaves little choice. My own city is a prime example. \ Newark is a 300-year-old city, with a\ pdpuiation of over 400,000 people. It is land poor and tax poor. * qnl~ 5,000 of its 15,000 acres are available for residential living and ~in~ustrial locations. Over 10,000 acres are occupied by tax-free educ4tid~n institutions, hospitals, parks, public buildings, and vast land are~s ~ccupied by the Port of New York Authority at Port Newark an~ N~wark Airport. Like most major cities, Newark has at~e~pted to face up to its responsibilities in providing public housing~ m~ban renewal, job train- ing, economic development, and a long l~st of social and welfare programs. 179 PAGENO="0186" I 180 DEMONSTRATION CITIES AND TJRBA1~T DEVELOPMENT These efforts have helped óir~reome a his~ry of slums, inadequa~e school building, and the problems of a 1~rge minority popu1ati~n suffering from the wounds of a disgrac~fu1fnationa1 legacy of negl~ct and prejudice. J I But all these efforts are not enough to ~reate what we need in lrnr cities today-a total recasting of urban 1if~, from housing to hea~1th, from education to recreation, from work to pleasure. / Through our urban renewal program we have obtained a grant reservation of $120 million. This repre~ents a grant reservatio~i of $300 per per~bn, the highest in the Natio~i. It is not enough. */ Through the Department ofLabOr, thefDepartment of Health, ~Eclu- cation, and Welfare, the Commerce D~partment, and the Offi~e of Economic Opportunity, we have recei~ed over $35 million. [With these funds, we have established skills tfrmning centers, youth c~ppor- tunity centers, on-the-job training prdgrams, year-round pre~chool programs, Neighborhood Youth Corps jprograms, tutorial and/ reme- dial educational programs, recreational. frograms, and a host of ~thers. And they are not enough. / We haveprovided 13,713 public hou~ing units. We have rt~located close to 50;000 persons. We have eni~raced citizen participation in all programs. We have offered gener$s tax abatement progi~ams for new constructbrn, as pern~itted under ` special State law. We have constructed new schools, built new ~wers~ and we have ov~rhauled and vigorously enforced our inspeetio~ and housing ordinanc~s. And still it is not enough. * j I With all these things, more than 100,000 persons continue ~o live in blighted and substandard neighborl~óóds, bearing the crus~iing bur- dens which flow from an unhealthy physical and sociologic~il pattern of life. I If citjes are to avoid catas'troph~, we must not only ov~rcome the effects q~f decay, but we must oblitei~te them forever. Jnte~ligent and massiveiFederal aid is the b~t answ~r. / The legislation before you, inspifr~d by the President of/the United States ~in his forthright expressio~ of concern for urban ~ife, brings to us a method for te~ting variokis means of bringing federal aid to our cities. I I We must now pinpoint the int~relationships between ~arious Fed- eral nrograms. We must devise new combinations of qid programs and develop totally new progran~s. Only in this way ca~ we develop a lOi~-range approach to mergh~g the social, physical, ~nd economic cor~~~derations that are all impoiitant to the survival of ~ur cities. ~ ~ Thiw let me turn to details of t.l'~e bill itself. / I believe, first of all, the obje~tive of the act must not be simply to waf~u over nubliehôusing or sptuce up urban renewal. The act must go bnyond the existing array o~ Federal prdgrams. 1~t must remain a unique prOgraffi-a demonst~tion program. It. mu~t he concerned with action beyond the rehuiMing and i~habilitation/ of simu struc- tures. It must demonstrate tthtt urban life is for all people. the rich as well as the poor, the executive as well as the laborer and that there is a ulace for the great m~ic~s. o~f middle class citizens f~iat make up the backbone of our Nation. The~act must remain flexibl~~ and it must re- 1n~in experimental. Its obje4tive is the rebuildihg o1~ a total city life, not the simply physical rebui'ding of a neighborhood/ or the mere pro- viding of supportive social se vices. PAGENO="0187" DEMONSTRATION C T ES AND URBAN DEVELOPMENT 181 As to the planning and se~e~t~c~n of cities contemplated by the act, I submit it is in keepir~g with t~te \experimental character of the iegis~ ~ation to open the pJa~nni~g p~se ~o wide participation by many cities. It has been a sourc~ of muc~i \cot~cern that the program appears to be designed for a small iiumber \o~ ci~ies. Many cities already fear that they may not be "amoiig the ch\o~en.\" To set this fear at rest, and\t~ p~ovide a genuine burst of new ideas and new projects, I beUeVe ev~r~~ city in the Nation should be allowed the opportunity to pa~ticipat~ ~n ~t least the planning phase of the program. We need as many n~el ideas and new techniques as we can get. \ \\ To finance the expan~ion of t1~ pl~inning phase, I suggest the bus- ing Act of 1949 be a~nen~ed to p~r~r~i1~ at least $50 million of demonstra- tion city planning gran\ts 9ut o~ \tit1~e I grant funds. In addition, I suggest also that there be an ~4rc~priation of $12 million, as sug- gested by the President, avai1ab~e\tQ ~he Department of Housing and Urban Development for grants ~ c~ies in cases of special need and special significance. `th~ou~h tI~ t~al approach, this broadening of the planning portion of tI~e p~ogr~u~ *e will,at the very least, produce in many cities a new awa~euess o~ ~4eral reso~u~ces and the need for coordination. \ \ \ However, in selecting ci~iés for ~a~ry~ng out demonstration projects, I submit that the selectio~ be . stk~tl~ lj~ited-that the number of cities chosen be few. \ \ \ I suggest that the demor~str~tior~ ~ro~jects be approved only if they are of sufficient magnitude and co~i~l~ity to produce an end result which can be intelligently èvaluate~ft\in \terms of massive impact and which offers solutions whicj~ are m~a~çdn~ful in terms of major urban centers. \ \ It seems to me that a pr~gr~m `c~l~içl~ is designed to demonstrate new approaches cannot-arni should\npt4-be applied across the board to all municipalities. It car~ only le~c~ t~ the reduction of this novel bill to just another in a long list of F~4e~l aid programs which skim the surface but do riot cut to the core of~ t~ie i~iatter, In funding demonstration ~ity proje~th,\I suggest that the Federal Government must first adopt t~ie ~ame x~aii~tenance of eff~r( provision it requires of cities. That is, it is imp~*ati\ve that in all departments and agencies participating in t~ie proj~ci~ th~t demonstration funds be ma de available in addition to e~dsting 4~p$priations. The appropriation for the d~monstr~t~on\ act must add directly ~ to the level of assistance provided b~ ex~s~i~ U~ederal programs. In addition, the act must provide epough n~o\ue~ to meet the cost of com- ponent programs ~ iii cases whei~e there\ a\re \no e~i~ti~g Federal aid programs. . ~ . \ \ \ ~ ~ . ~ It is well to provide 80 per~ei~it of th~ ~ share of pi~ojects and ~tctivities which can be readily cor~mitted\~4 ~ d~moustration project, but I believe that there should b~ sufficu~n~ . t~n4~ in the act itself to provide 90 percent of the total cost of all. oth~ projects for which no Federal aid is available. \ ~ Furthermore, it is clear that .unl~ss all t n~e 1~mitations on urban re- newal authorizations in the 1965 act a~e w~i~r4 the demands of dem- onstration programs for urban renewal gra~i~ co~mitments will surely buil d up a troublesome backlog of aj~plicati ~` PAGENO="0188" 182 DEMONSrRATION CITIES AND URB ~ DEVELOPMENT I recommend such limitations be waived. Finally, in terms of funding, I suggest there needs to be an incr~ase in the $2.3 recommended for the life of thi~ program. / Fully awareof the great demands being'made in Vietnam and ~1se- where, it is nev~erthelèss clear that a more ralistic level of expendit~res would be $2 bfthion a year for the 5 actio4!i years of the program~ be- ginning next ~Tear. This is based on ourfown projections in Ne~iark where we ar~ considering a program inv~hring 30,000 dwellings/ and not more that~ 100,000 people. j.. . . / It is our estimate that any program of ~he magnitude we are cc~nsid- ering will cost no less than $200 millions If only 50 cities are c/hosen to participate during the 5 action years~ ~f this program, simil~r ex- penditures on their behalf would run tbe total cost to an excess ~f $10 billion. It is upon these figures that I predicate my recommendation that the tQtal cost of the demonstratiofl program might `be se~ at $2 billion per ~rear for 5 years, beginning ~ext year. / Finally, 1 would like to touch on t~ie proposed administra~ion of thisprogi'a~n. I / I know br. Weaver has been conce4ned with the fact that /mayors and other officials may not be amenabl~ to the creation of local/Federal coordinators. As for myself, I welc~hiie a local Federal cooi~dinator. I think it is imperative, if. this progr~m is to be successful, ti/lat there be a system of coordination outside th~ normal channels now ~vailable to us. it is vital that there be a Federal man on the scene to/expedite programs and provide djrect commttnication between the pities and Washington. . ~ / . I will~go one step further and pr~pose that each and every depart- ment ai/id agency that participat~ in demonstration citfr projects assign a~n assistant secretary, or an ~Lssistant director as liai~on for the Demon~tration Cities Act. Togetl$r these officials would represent a total Federal task force on demor~stration city projects. /A Federal coordinator reaching out of his lo4~lity to `assist `his proje~t would be able to touch directly the highest rnk~king policymakers in $her depart- ments, all devoted to the successful completion of a de~ionstration city project . , / The Demonstration Cities Act, members of the commit~tee, is a bold expethnent. / It ~ha1lenges the cities to prov~. they have a right to sfrvive. It' challenges the Federal Go~~e~nment to prove that ~he hundreds of programs it has devised and tl~e millions of dollars it I~Las spent make sense. ` I I This legislation can be a ke~ instrumentality in bri~iging back to the cities of America thousandsjof our citizens who' wer~ forced to flee because of intolerable conditioi~is, but who genuinely ci/esire to live in the heart of an active and healthy urban area. I believe in the future of our ~ities. Xe believe people truly want tLo live in our cities. But I `believe our cities can jbe reclaimed only if w can provide in it~ streets and in its homes, tjhe kind of life to w'hi people in our G~eat Society are entitled. ¶I~his act can help bring new day to our cities. It deserves your supp~rt. Thank you. / PAGENO="0189" 183 DEMONSTRATIOI\t CITI S ND URBAN DEVELOPMENT Mr. BARRETT. Mr. Mayor, ~ ~nt to tell you, you have made a splendid statement. And bec~us~ of your experielice in running a large city, we will give it very ~a$fu1 attention. If I know you as a go-getter,\ is \there a possibility that you have a plan for a city demonstration p~oj~ct in Newark now in your pocket? Mr. ADD0NIzI0. Mr. Chairm$n, \we have, of course, submitted a request for planning funds and u\lti~ate designations as a project city. But I do not have a specific pr~gr~m prepared. All mayors, I am certain, and their city planners l~av~ a hundred ideas and a hundred programs ready to go. I admit ~oi~e very definite ideas. But basi- cally, our planning will be desigi~ed\ to bring together the scientists, physk~al planners, and the con~mu~it~ people themselves. We want a program that comes out of the coii~m~nity, not one that is forced onto us. I am sure our program will i4vo~ve parks, neighborhood centers, schools, and a variety of housing, st~ee~ widening, and all of the stand- ard approaches. But I expect tl~is \will include them in a novel manner, and that it will include som~ su~prises too. I believe that that is what this bill ~s a4l about. Mr. BAr~nrn. Thank you, Mr. Ma~or.\ You are proposing that we appr~pi~iate a total of $10 billion to cover just the housing and urban de~rel~pment share of the program, or $10 billion for a total program, in~çilu~ting the cost of other partici- pating departments, agencies and pro~r~i~s. What is your comment? Mr. ADD0NIzI0. I am suggesting tha\t t~e total cost of the program- that is, all facets of it-be $10 billion. \ I also feel that this would be dire~tl~ appropriated for this act, leaving untouched the appropriations o~ o1~her acts. I think that doing this, the funding\of \all facets of programing of this act in this way would end fears o~ di~rersion of funds from non- participating cities, and greatly simpl~fy\ the administration of the program. \ I think that many cities would be con~emed that if we did not fund it in this manner that this may well h~v~ money taken from those from other sources. \ Mr. BARRETT. May I. just ask you this ~ne\question in closing. You indicate that $2.3 billion is not adequate, is\th4t right? Mr. ADDONIZIO. That is correct, Mr. Cha\irn~an. Mr. BARRETT. Mr. Widnall? Mr. WIDNALL. Thank you, Mr. Chairma~çi. Mr. Mayor, I think you have made a $r constructive statement. And I think the point that you make ab~u concentrating on a few demonstration cities has great value, becat~se gain we can waste our effort by trying to spread it too thin. Mr. ADD0NIzI0. At the same time, Mr. Wid all, I want to make it perfectly clear that in the planning phase ~f it, I want to include as many cities as possible. Mr. WIDN~LL. This, I understand. And ~ th nk it is very construc- tive suggestion, too. Do you have in mind at this time. any pa~tic lar criteria that you feel should be utilized in making a choice fo~ t e demonstration ? I just have this in mind right now. I have seen\so e figures that would suggest that New York City can use $4 billi~n ; Chicago, $2 billion; Los Angeles, $2 billion ; Philadelphia, $1 bill on Detroit, $1 billion; PAGENO="0190" 184 DEMONSTRATION CITIES AND URBAN DEVELOPMENT and that could ~wai1ow up $10 billion rig1~t there. They are larder cities and Newark has very complex probleir4stoc. / ~ I just wonde*~-and I think it would be very difficult to set up w]~iat the criteria should be in choosingthe cities. J / Mr. ADDONIZIO. I believe in the principl~ of emphathzing neod~ /But I believe also that the bill should rem~tin fle*ible. / One of the main premises of the bill is1that the area selected i~ust be large, that the thing must be done on a grand scale. Thi~, of course, would mean to me that there must be an area of great n$d in the first place. And I believe that perhaps there ought to be Jsorne limitation on the amo~unt of money that goes into any one state. Perhaps 10 percent might be `~ ~od figufre. . / Mr. WIDNhLL. We might then run ii4o the same difficulty tl~at we have in the past. Some of the areas th~t have the most urgent/ need, would havea capacity to swallow up a gfrat part of the appropi~iation. To be effective I think in this particulaif program it might not 1/e wise to limit it to 10 percent in any one State.; / Mr. ADDONIZIO. Well, Mr. Chairmar~, I am not wedded to a~iy par- ticular idea in respect to that. I certainly would leave it u~ to the wisdom of this great committee which I served with for man'y years. And I have great faith in what they will decide. / Mr. WItNALL. Do you feel that yo/u will have any confiic~ arising between the new proposed Federal co~rdinator, the Office of 1~conomic Opportunity in your own city and infyour'own region, and with your own municipal officials ? Do you fe~l that you would be a~le to co- ordinat~ the effort sufficiently by hawing another official sup~rimposed upon your own gQvernment'? ! ~ / Mr. ADroNIzIo. We do not anticipate any difficulty. As a/matter of fact, we welcome this help from Wa~Ihington. And we woulçl be happy to cooperate. We think they can b~ extremely helpful to i~s. Mr. WIDNALL. That is all. Thank you. Mr. ]~AnRJcIT. Mrs. Sullivan ? ~ MrE.SULLIVAN. Thank you, Mr. ~3hairman. I am delighted to welcome our former colleague. Mr. ADDONIZIO. ~ Lee, it is alway~ nice to see you. You ave always been one of the charming things oft~ this committee that I ave had the pleasure of serving with. f Mrs. SULLIVAN. I could have thrown some orchids to y u, too, but I thought if we did that, you woulkl never get a chance to testify. Y~u gave your statement the way you always used to give it t~ us, straight from the shoulder. And I think you have m~de some very gocki points. ~ . / ~Mid as I get to thinking of these large cities which ~nay be named as possibilities to be sel~ted 4s the demonstration cities, I wonder whether, if. we g~et started in ci~h~s too large, might nol/ the patient be lost because there is so much t~ be done in many of o~ir bigger cities in the comitry. ~ Yet, I realize ~iiat in order to make thi~s work, we have to tackle the problems that you/ do find in these vast ar~as. Mr. ADDONIZTO. I do notthi~k that there is any ques~ion that it must be done on a gran~d scale if it isgoing to succeed. / Mrs. SULLIVAN. But if we try to do it in a city like ~ew York, which would take up, in one bite, So much of the money ~vailable for the ~hoie country in order to make a good showing- / PAGENO="0191" 185 DEMO~TRATIO~ C IES ~ AND URBAN DEVELOPMENT Mr. ADD0NIzI0. I do n\~t\thi~ik that New York should be just selected ~: as a city. I think that it\~I~ou1d be perhaps an area or a neighborhood in New York. \ \ Mi s. SULLIVAN What X ~m\concerned about is how it can be done ~ I asked the Seere~ary yes~e~da~ if he could `give us some specific ex- I ~ amples . exactly how these \p~og~ams would mesh together to make a real showing-doing all of ~h\e 4ings that they are trying to do within this one area. \ \ \ Mr. ADD0NIzI0. I would 1~il~e ]~[r. Danzig to answer that question, if I may. He is our techn'icia~\ \ Mr. DANZIG. Mr. ~hairmai~ ~nc~ members of the committee, for too long have these' housing ~prog$m~ and urban rene~ial programs been suffering from what ~e refer~e~çl t~ as projectitis. They have never been actually carried out on a e~o~p~ehensive basis. And in this Dem- onstration Act project there wo~içl b~ for the first time th.e comprehen- siveness and the sophisMoation ~ces$ry. We have long ago learned that physical renewal ii~volving\j~ist\brick and mortar does not alter the behavior pattern of ~he peoj~h~ w~io have more recently migrated to our central cities. T~iis bill \~oul\d provide an opportunity in a project area to create a i~iew neikl~bOi~hood, and apply all the social sciences, all the educatio~al~ne~\ed~icatiOnal media that we now know of, and attack the problems ~f\th~ people as well as the physical decay. This has been long sought ~ b~ those of us who have labored long in the vineyard of hol~sing ` an\d\urlçan renewal. Mrs. SULLIVAN. Thank y~u i~or ~ç~r ~ontribution, Mr. Danzig. I think your mayor knows tha~t for ye~, I~ would say the past 13 years~ anyway, I have been express~ng thes~ ~aip\e thoughts. We have given underprivileged families good apartn~8~it~\to live in and `said to them, "All right, here is a modern, c1e~n pl\~e t~ live-now make yourself over and accept your respons~biliti~s\~ a\citizen." But ~ they often didn't know how to accept ciic~y life. \ ~he~ had to be taught. We have had a few demonstration prograi~ b~y the welfare people and social workers who are attempt~ing to 4~in \these people to meet the problems of city living and. they h~e s~u~w~i~ some degree of success. However, I think this is so vast ~h area `th~ w~ a~e attempting to cover that I believe we have got to do it very \~~re~ully, so that we do the job as we are trying to envision i~. 4nd\t1~at\is, to help underprivi- leged ir~dividuals to meet the conditions ~~çI problems of today, and give them all the tools with which tc~ do it. \ \ \ Mr. DANZIG. It seems to me that this is tI~e\f1r~t time total approach has been attempted. Mrs. SULLIVAN, Thank you very n~uch. Mr. BAREETT. Mr. Ashley? Mr. ASHLEY. I, too, am delighted to join i ~ coming a very dear' friend and former colleague, orte with whom ~ a `e traveled so many miles and shared so many pleasant e~p~iences.~ And I am happy to know too that ]~uerto I~i o as `blossomed like a fl~w~r since- \ Mr. ADDONIZIO. I would like you to know t~i t have gone back to Puerto Rico at least once a year fOr ~5 years.\~ `Mr. ASHLEY. You have seen the fruit's of our la r? Mr. ADD0NIzI0. I have. \ ` PAGENO="0192" 186 DEMONSTEATTON CITIES AND URBAN DJ3~ ~LOPMEN~r ~ ~ /1 Mr ASHLEY All of us have been following tile really splendid )ob / that you have been doing as mayor of Newark, and we are extremely proud of you How big a city is/Newark, Mr. Mayor ? ~ Mr. ArDONIZIo~ ~`Iow, Newark is approximai~1y 23 square miles. Mr. ASHLEY. Mid what population ? ~ / Mr. ADDONIZIO. It has a populaLion of soi4e 412,000 people. And for the first time in many years, our popula4ion increased somewha~ last year. I / Mr. ASHLEY. The Secretary, Dr. Weavei~, suggested yesterday, ~ believe, that, considering that there might lie approximately 60 citi~s selected for the action part of the program, that it might be thvic1~ècl into 6 or 8 li~rge cities of over a million, and I believe this is corr~ct, some cities be~ween 250,000 and 5OO,OOO-~.-there is a gap here so~ne- where-and. s~me smaller cities. Do you t~ink that this kind of ratio is beneficial, an~ that you would fall into a c~tegory in which there n~ight be, say, 20 cities selected ? / / Mr. ADDO~IzIo. I think that is a fairfjudgment that was ma~1e by Dr. Weaver. I certainly would accept t~tat. / Mr. ASIILEY. I notice that you indic,~te your support of the/plan- fling phase and suggest that every city i~ithe Nation should be allowed the opportunity to participate in at hast the planning phase/ of the program. And then you do say- * ~ / Mr. A~DONIZIO. I hope I have not been misunderstood/ I in- dicateci 1/hat I thought that as many~ cities as possible be included in the pia~ing phase. I ~ think that this would be wise on 1~he basis of all of the ideas that could flow f~m all of these various ~ities. Mr. ASHLEY. I 8Ct~ your point. ~t. occurred to me that yç~u seem to be supporting the participation of ~ good many cities in th~ planning phase, and then stating subsequeni~ that the number of ci/ties chosen for the actual action part of the pr~gram would be few, an~ this would obviously create a disparity and 1L~ lot of disappointed ci~stomers. I think I now understand your point, that out of the p~/anning that cities might do woulU come. crea~tiveness and imaginatio~i that would be f~uitful, even though the cit~r might not, at least im~nediately, be sele~ted for participation. / : ~ / Mr. AnooNIzIo. I think a cit~j has to prove that it ca~/i be successful in :a program. I ... ~ / Mr. ASHLEY. Several of us jiave thought that it might be useful if the regional FHA director be ~ttilized as the local Fed*al coordinator. What would you think of thi~ for an idea ? / Mr. ArDoNIzIo. I would lil~e Mr. Giacchino to answer that. Mr. Gi~&ccrnNo. I think, a~ it was brought out yesterday during Dr. Weaver's testimony, that th~e local FHA directors ~ould encounter a ~ great many problems in a~ministerin~ an act which is so different : from their present activtie~, and in addition it is soi~iething that would~ . be certainly a great burd~h in addition to their i~any present tasks. And that is our view of ~he situation as it appli~s to our own local area. The local FHA of~ce there is already tax~d with a variety of tasks and it has never en~red into any kind of ai~/ activtiy that is any- where near the scope of t1~e proposed action. / Mr. ASHLeY. There hØs never been any kind o/f similar activity? Mr. GIACCHIN0. That is right. PAGENO="0193" 187 DEMONSTRATION CITIES D URBAN DEVELOPMENT Mr. AsiiLEr. Whoever will e th loc~a1 coordinator will be entering virgin territory, be~ause there s ot been aiiy such activity? Mr. ~DDONIZIO. I think ther a to be a broader approach than the PHA has given it, at 1ea~st o r ex erience shows that in the city of Newark. I think there has to m re emphasis on many of the other facets that are invloved in this p o ram, and that is in the welfare and social problems, the education p o lems that we a~e confronted with. And I think anything that co s rom the FRA would certainly be limited. Mr. ASHLEY. I appreciate y r omments very much indeed, and I ., am g~lad to know that they are se on your practical experience. Thank you very much. Mr. BARRETT. I~[r. Moorhea ? Mr. MOORHEAD. Thaiik you, r. hairman. I welcome back a valued e and respected colleague to this committee room. Mayor, there is one thing th t o cerns mè-~- Mr. ADDONIZIO. I must poi t o t very ~ frankly that I see this corn- mittee has graduated since I left to these very wonderful new surroundings. Mr. Moonhii~AD. We weic e yo to the new surroundings. Mayor, the thing that con e ns me a little bit about this act is- and you have faced up squar 1 t it-are we, not inviting trouble for the majority of us, and for t e jority of the mayors, because most of the cities won't be selected f r hese ~1emonstraJ~ion cities, aren't we just inviting trouble by enacti th's bill? Mr. ADooNIzIo. Well, I s s ec that there may be some difficulty encountered by Members of ess ~who may represent a particular area, and their cities would e le t out. ~ I have had great experience in that over a period of man ea s when I served here. But an effec- tive Coi~gressrnan can aiw y ake sure that his own cities are included, and I)articularly can e hen he sits on this committee. And I have assumed by my friends ip here today and the friendships that I have with the members of t is committee that my city is certainly going to be success~u1 in bein signaited for a project. Mr. MOORHEAD. That is very fr kly stated. Mayor, I cornrneiid you for ay ng that you welcome the local Fed- eral coordinator. Would you o think it would be helpful to have a local Federal coordinator eve der the existing programs, or even if your city was not selected s a demonstration city? Mr. ADDONIZI0. Positively, a r~e with you wholeheartedly. Be- cause many of these programs ar running into difficult political prob- lems which I think something ik that, ~f it took place, would certainly take it out of that area. Mr. MOORUEAD. And don't o think something more than just an information office is needed- o eone with some authority to do some real coordinating? Mr. ADDONIZIO. There is no o t or question about it. ~ Mr. MOORHEAD. Thank you er much, Mi~ Mayor. ~ Thank you, Mr. Chairman. Mr. BARRErP. Mr. Fino? Mr. FIN0. Thank you, Mr. h irman. 6O-878--O~-pt. 1-18 PAGENO="0194" I~8 thiES AND U I~AN DEVELOPMENT Mr. Mayer, in view of your position and your attitude here. this mornmg, it might be a good id~a if your colleaguestn the subcomrnit- tee would write Newark in the legislation. to make sure it is accepted. Mr. ArDONIZIO. ~I am quite sure that w~1id be accepted, and I hope that you will c~o it. . I . Mr. FIN0. I would just like to i~ke 4n~ observation. I support the ainis and pbjectives and purposes of ~this1egis1ation. There are only two provisio~is in this bill that sort 4f disturb me and have dis- turbed me from the very inception. And~ I have made this known to the Secretary of the Department of Housi~g and Urban Development. One provision is the creation of the F~dbral coordinator, or what I consider a commissar. I am afraid that such a Federal coordinat r- who can have all the powers that might be delegated to him by the Secretary-might detract from the auton~mous powers of local ov- ernment?. And this is one big fear I have. Mr. ADooNIzIo. May I speak to your 1i~rst concern, * Congress an? And of course, I recognize what you say. . I But I do not think tha he would have any more power than the S~ct~tary would have in W sh- ington. And this would just be a meansfof our really reaching out for people who really have authority. ~ Mr. FIN0. I hope he would not too mubh authority and step ver the toes of local government. Mr. BARRuTT. Would the gentleman yield? Mr. FIN0. Yes, sir. Mr. BARRETT. Mr. May~, you would agree that he would be i a position to facilitate the projects? Mr. ADDONIZ]~O. Absolutely, .: ~ Mr. BAnRE~Pr~ Audhe `Wo~i1d be helped t ménddu~ly if he were ble to have liaison *ith the cityofficials? Mr. ADDoNIz~o. We have found h~ the- . otir experience as ma or that most of the Federal agencies in the ar~a do not have enough Ii lp now, and as a result many of the programs ai~e bogged down. Mr. BARRETT. If the gentleman would yield further, if we are not oo involved with the social aspects of this program, would it be possi le that the city of Newark could recommend ~somebody ~ho knows he social aspects a~ well as the housing, and Jmows the blighted are s, so well that he could be of great assistanC~ to the city of Newark as well as the Fede~al Government, and save t1~ taxpayers a tremend us amount of dollai~s ?. I Mr. AixoNIzI~. I agree with you, Oongre~sman. I certainly wo Id hope that the Secretary would check with 4he mayor of a ~artieu ar city before anyone is appoint~d to that res~ónsibiity. And I wo d hope that it would be someone from the local area. Mr. FIN0. Mr. Mayor, if that were possiWe, I would withdraw y objection. And I would rather ~ee the mayor of a city- Mr. ADDONIzI0. Mr. Fino, I would hope i~hat you would *rite t at into the bill. I would have no objections to ~ Mr. FIN0. Good. And the otherprovision that disturbs me s that under this bill, t a Secretary has the absolute power-and wh n I say absolute, it is ~ n the law-he has the absolute power to deny ssistance under thi~ pr - gram if he determines that there is no prov sion under this progra for economic integration. For example, he can withhold support ~f PAGENO="0195" PAGENO="0196" 190 DEMONSTRATION CITIES AND URB N DEVELOPMENT as a kind of ty~ic&l thing that would be iere. And I think un ~er our poverty pro~am a variety of neighborh od services would be av ii- able the year rc4rnd. Preschool training C( ildeertainly be a part f a demonstration project. And I think that he local services whic is now a part of the poverty program would b included in some mam er. And I certainly think that-I would hesitat to call it- Mr. ST GI~RMAIN. This is not anything ~uew to me. Yo~ are j ist telling me about all the programs that n v * exist. . ~ In other words, what I said initially, we are going to thr ~ a lot of money into one city, so a lot of programs will have all th money, you are going to throw this all a$ once into one particular c y, into ~n entire city o a section of the city. But what isnew about his ? What is new ab ut it except throwi~ig money in it to do all thes things t~hat you are doi ig now ~ You ha* said that the social agen es will bring their effo ts to bear on it, the poverty program, and Eeadstart, et cetera. Il these now existing. I am trying to find som hirig new. Mr. MALAFRONTE. What is new is the monstration of all th se things together in a single area of work. ~ e do not have that dern n- strntiol1 in any city in the country. Mr. ST GERMAIN. Don't you agree that th s is a logical conclusion to reach, that it is terrific if you can do it, but ~e are going to do it with maybe 50 or 60 4~ities, and the mayor does ot feel that we should do it with as many ~!tiëS, but the plan is tQ do ~ with 50 or 60 eities~ and it will be for 5 years, and then it will all be ver with. Nevertheless, the other cities would like to do the same thing. And it has been demonstrated that they can come into a ~ indfall of money. Tsn~t that what it is ~ Mr. ADDONIzI0. I say to you that you ar~ never going to solve. the problems of the cities unless you have a cothprehei~sive attack. And this is certainly a giant step in that direction. Now, we have be n feeding money for many years-and I was a~part of it-to all of the e foreign countrie$. We have been pouring~~billions of dollars ov r there for years And I tell you as a man wl~c~served in the Congre s, and who has no* had the distinction of serfing as a mayor, that t e Problems are in iarge, older cities of Ameri4~~. * And I think that t e Congress had bet~ter face up to these respon~bilities which are faci- g us in these cities, or they are no~ going to ~urvive. You are nev r going to solve these problems. All these pibgrams that we have e - acted in Washington over the years are just touchmg the surface. A d you are not getting to the core of the problem. Mr. ST GERMAIN. Is it your testimony, ~ r. Mayor, that it not be a demonstration act, that this actually and : alistically be a step for- ward in the overall rehabilitation .~f entire ities with Federal help, and that this should be on a permanentbasis ~ Mr. ADDONIZIO, I think in essence that is what this does. If you want to call it so~ne other kind of act, that ~ up to you. But this is what this means to me, as mayor of a city. Mr. ST GERMATN. With all due deference, ,ou are interested in the city of Newark. Certainly we appreciate that, and we commend you for it. But other mayors are interested. And there are only going to be 50 or 60 cities chosen. PAGENO="0197" 191 DEMONSTRATION CIT E * ND ttRBAN DEVELOPMENT Mr. ADDONIZIO. Il! wo iiev r be in, Mr. St Germain, we will never get any. ~ Mr. ST GERMAIN. That is i ht. But the cities that are not chosen, I think we should hold out s e ope to them that, should success be met with in this type o~ a pi~o e t, that theremight be hope for them in the future. Otherwise, why 1 it a demonstra~tion ? Usually, if you are going to have a demons r tion, it is to demonstrate that it will work, and once it is demons a ated that it c~tn work, once it has been done successfully, then you sa we g~o on in the future and continue this, and try to even improve it. Would that be your opinion, Mr. Mayor- Mr. ADD0NIzI0. Yes ; I cer a nl would like- Mr. ST GERMAIN (contini i g) As to what we should hope for in this area? Mr. ADD0NIzI0. I would li : t( see this program continued, because I know firsthand the proble i ti at I have in my city, and my city is no different than New York ( r ( hicago or any of the major cities of this country. Mr. ST GERMAIN. Mr. M y r, you say you have been working and your people have been wor i g n a proposed plan to submit to the Pepartment of HUD in ord r o ~ ualify as one of the cities. I wonder if you and your very worth ~ ;ta have found any problems with the way the guidelines are writ e i i the act as to what you will have to provide to HUD to prove t( t ie that you are qualified, and that you meet the criteria. I think t i is a very, very important matter. And I think that you with youi x rience~ Mr. Mayor, in the Congress, and with the very compete s if which you evidently have, could give us some good advice in t s a ea. Mr. Arrxx~izio. Mr. Giacch no will answer that. Mr. GIACOHINO. I think th: y u have recognized- Mr. BAmu~m May I inter o e just for this one thing : I want to get the benefit of your knowl dg and the knowledge of your staff, but I do have to indicate that the ~ `m has run. Mr. ST GERMAIN. That is ay last question, Mr. Chairman. I feel that this is important. I W( nd r if we could not ask the mayor and his staff, Mr. Giacchino and t Le est of the staff2 to be gracious enough to provide the members of h s s bcommittee with their answer to this particular question, so that i: c nsiderin~ the legislation we can have the benefit of your voice a d y ur experience. Mr. ADD0NIzI0. We wou d be happy to submit it in writing to the committee. Mr. ST GERMAIN. And i w' give you more time and be of more benefit to us. Mr. Arro~izio. Yes, sir. Mr. BARRETT. Do you now ha e your questions? Mr. S~r GERMAIN. I would s mit that they can do a good job for us. Mr. BAm~rr. Mayor, I am sure your staff would be willing to answer any questions that an ~ of the members submit to you in writing. Mr. S~ GERMAIN. I would ike to make one observation to the mayor. He says he has got the upport of both major political parties. I am wondering if you are in t ouble with the constabulary, since you have been trying to take their ob away from them chasing bandits? PAGENO="0198" 192 I~O~flON .q[TI~S AND URB ~N. ~ ts~ brave, I just ~ alter the shots were Mr. ADDONIZW. I a ure~youiIiat 1 aiu,m to be there, it ~ras a natural inclination, an 1 was tryingto dig a deep bole. Mr. ST GERM~IN. We were rea4~ng about Mr. BAiu~rr~ We certainly want to th~ testimony, you and your staff. The cOm~ until 10 o'clock ilomorrow iuornii~g. (Whereupors~,at i2:~5 p.m.., the. subcoiiu vene at 10 a.m.~ twednesday, Maii~cb ~, 1*66~ yo~s ~ik you for your üttee will stand in ~ittee adjourned, to 7 PAGENO="0199" pre And i~f ~O~2 ask you que~s PAGENO="0200" light, eliminate conges environment of polluti decay and blighting i The goals are fairly y adopted by our nati ue of Cities and the ntation is dependent oi tees of the Senate and ~king and Currency C he interestof the memi ~i~i~iit legislative resuli ~~the Demonstration C 4h'%'pr~posa1 and ~t ~iifl~iea~a cities. thatt g~ %o the Congress on ~ ~ww~ ~oordi!nat~n on ith~ a~oncerted, sustai L new coøperation and ~ now involved in Md T'~wGiild~sa~ .. now ~: imp~rta~it~problem, ~øwitk~h4~h~T am f ~ T ~.on which I was ple~ ~111Ea~Stt~ttk~1 te~hniqu ~re Seeking to dein~~str rofMnerica h~we a~ the port of entry for ~L abrbad. They still è hnson'~ words' ~aggrav t{ ~W13.L ie able to walk ~: ~where *e~can walk ion, n as flu~ ~ell nal T.S~ the the ers, ~ of ties ink eir the the ed co- the we nit rn- sk ed to te re. he ii- te in in he 0- Lg 1- 1- Id w Lg y S. 194 DEMONSTRATION CITIES AND UR~AN DEVELOPMENT There is still much to done to overcome 1 help the poor escape from poverty, rid oui we clean up our air and water, wipe OUI ences and change the course of our cities defined by thei statements of national pol organizations;; that is, the National Lea Conference of Mayors. But their implem action of this committee and other comm House. In my appearances before the House B mittee I have always been impressed with' the sincerity of the questions, and the ox your delibQrations. Todayl a~pp~ar m support of H.R. 123~ Act of 196& ~Ti~s `is * a landmark legisl offers reall~fdT' ~he first 1iin~e a hope to physical and so~ial landscape can be chiuige The' vi~ion'~ Presideflt Jthñson's mess cities is found in abttndance in this bill. local level is required to `rebuild the old i effort which will show dramatic restilts. ordination is v~sualizecl for'the ,Fecla'al a~ cities `to make their efforth more e~ective. need not only your searching review of t~ more in1portani~yourapprt~val. The concept ~f the demonstration cities i iliar. It came.itip during the discussions h Force on Urbai~ and Metropolitan Problei to serve bask in 1964. We have used the ~ good advanMge in this count~*. What we through this new program is that the cities They still have vitality. They still act as new urban residents from `the farm and fr tam much that is good and hi President J the worst." We can pro'~ that this eo~mtry `not o~i 2ute~ spaoebutithat' our cities `caa~.be pi~ dignity ana live rn priaeanarnnappiness. ` The broati goajs be*re: us, however, mm , be measured against vehicle at hand, the Dernon~tration ~Jities ~ct. in the spirit of operation, I would like to present to you our observations . conce ing the legislation and the objeótives which we all share. Our co ments are offered with a view to improve th ~ legislation by increasi the effectiveness p1 the proposed programs. ` ~ . First, I believ~e it is irnp~tant not to tr~ to set up a `national co petition whioh ~night only ~timuiate envy `ftnd ~nnhapplness amo those cities not diesignated as "demonstrati n cities." The allocati of grai(ts should be'ion ` `a fh~t~othe, fitst.e ei~ved haMs; The Pr~ dent's message spoke of a limited group of Oto `TO oit~es who wo~ participate in the pr~grar~u~ ~ There should b~ no fixed limit on h many cities thay~ attempt to qialify, and `th ` Deparh~ient of Housi and T~Trbrni Development, `administering ti ~s. ~rogram, * should or lay down general guidelines assuring that participating communiti are representative as to geographical distribution and population siz PAGENO="0201" DEMONSTRATI~4N CITI: There is much to be said f in planning and programing t seeking to be selected for this community spirit and awar~n thetically that in our city, De a community organization eff munity leaders was held to i labor and educational leaders to seek to be selected as one oft setting up an organization C( Walker Cisler, chairman of th I think that indicates as wel community support which thi: tion to call such a meeting ca Reuther, president of the Uni ness labor leadership and ma meeting. While we are organizing i support and involvement, it r gearing up phase more diffic the public and priva e secto: in drafting the compr hensiv city. But other citie may i that . planning for th's progr we did in our prepa ation f ready ~for action pro, rams w \)\Te feel further th: t object mandate and admini trative up a competiticu or ~ judgin submission. There i ill be t to right the ills of a ~iajor a both physical and soc'al renei a I know the city of I etroit i and I feel sure the ot. ier ma o ill accord with the idea that Second, aside from the "fr expressed, there is the need t ing Federal programs are no if urban renewal funds are ` o to demonstration cities, the of existing fund~to the detri The inadequacy of funds a facilities, manpower retraini grams, I-Jill-Burton hospita Elementary and Secondary : and open space, water and s ~ funds will be inadequate to d The effect is twofold. N4 existing programs tc~ be use cities, but there is n~ enoug required to mount a~ compr h renewal today, as I am sur roughly estimated a~ $800 r i. `D URBAN DEVELOPMENT 195 .ational competition of excellence ssive projects required in each city ial program. It will create great f the stal~es. I might add paren- we lift\Te already begun just such On February 8 a ineetin~ of corn- ~e our residents and business and There was unanimous agreement rnonstration cities, and a resolution tee was passed on motion by Mr. ~d of the Detroit Edison Co. And ~nything I can mention the great has, because originally the sugges- om the very distinguished Walter utomobile Workers. We had busi- Lent leadership represented at that fashion to a~ssure total community ~ll be that other cities will find this We have many qualified ~ people in In we can * call upon for assistance `oit blueprint for the demonstration able to do so as readily. We feel Ln be started immediately, and, as B antipoverty program, we will be he legislative process is completed. iteria can be included by legislative mination. There is no need to set ough panels. of the merit of a city's uirement of a comprehensive plan ithin the community to assure that 11 take place. )ared to meet such objective criteria, ThO will testify on this proposal are ional competition is not a necessity. ome, first served" ~~jew I have just gnize the real possibility that exist- tiately funded to do the job. Thus, further depleted by being allocated 1 be an unfortunate "magnetizing" f other cities. )le for urban renewal, neighborhood ~ntipoverty community action pro- 3truction and modernization fw~ ds, tion Act funds, urban beautification `acilities-'-t'o name just a few~these t is proposed here. y is there not enough money to fund ie target areas of the demonstration ey for the complementary programs ive attack. To illustrate : In urban gentlemen know, there is a backlog . Assuming that an urban renewal T 1' 1 ci ti~ iv r E o]~] rl~ III :1* ~r ~ PAGENO="0202" am. ire ved ea the ing ed- een ich ity on the her nd Ir. steps. First, it seems ~orized by the Congress f being programed ov~ to this form of financ,i ature of the urban rene il look at the relations ~rograrn and otherFedc funds from existing j ration city should sup~ ~,nced now eit~her due thlishecl priorities. `I mediate allocations fr tbroac~h delay. But: helo~al share of Fede ~iiom~fration program, be 90-percent funding approved. demonstrati resently airailable. TI ude funds for those co i~am source but which k the Federal progra: tei objectives. DiIutio: ~ Urban rene~ nate the backlog. laNe to take up the sla t available. Demonstr forthe non-Federal coi 7e local program.. to create a demonstrati I basis and with adequa rams to be emnloyed : need to provide prop on itself. .. I p~rcent füading of ti i! diluting existing Fe the for r4 g; ral Lip ~a1 0- le- to he m ot al as of DT1 `is a- LS `S al k a- a- ~e. n 196 ~AN 1~EVELOPMENT Di~M~i*VrtA~CION' crriEs AND tnt.. clearance proj~t were to be part of the jethonstration city pro~ in Detroit, it would appear that the existing backlog would re~ us to wait ovei~ a year before the grant cOr~imitment would be rece So that the prbjèct could begin. Similai~Ey,~ if we were to requi grant for a neighborhood facility, there I~s not enough money in authorization or the appropriation to b~ able to count on get approval. The same sort of thing could Ijappert iii a number of I eral programs And if we did receive 4he funds which had 1 allocated-or i~ the funds wereto be diver~d away from cities w had their urba~:i renewal .applk~ation in be~Qre the demonstration concept waS presented-there would be, flistifiably, hard feeling the part of thø cities around America. 4nd to turn the coin to other side, I am sure Detroit would take ui4brage at having some o city get its share of urban renewal funds~ if it were designated Detroit was not selected, which I would hate to contemplate, Chairman. So there is a need then, for a number o full amotmt of $2.9billion title T funds aut urban renewa' should be released instead years. I kno~*rFthere may be some objectio however, the de~nand is tijere and the very process requir~ the release of tiu~se finids. Second, it. ~eE~ms there should be a gene of the financing of the demonstration cities programs to. issure there is no draining o grams. .. The,mbneys required for demonst ment , those programs which are uuderfin~ inadequ:acy of funding or because of es demonstratiólT dity prognthiivi~1.call for i: a number of 1~~e " ral programs. It will n only should th~$be 80 pé~ent fimdiñg of programs whicIT~ can be cônlhiitted to the i proirided in th~ act, but tbere ~hould also' the total cost fur all. `other portions of th program ~for `which Federal fur~ds are no1~ would cover thètotal local progi~m and' i~a poñents which may not have a Federa~l pi~o~ important to the stiecess of the project. ,. To summarize this section I don~t thnjl should not be &verted from `th~ir legislat~ a real possibilit~, and div~~i~ii ~o~ld~er~t4 funds should be ~made ava~1~,bIe ~ioLw to elim~ onstrat,ion city ~ogram funds should be ~va1i where regular FèderalprGgram funds are `xi' tion city prograth' funds'should also be used : ponents which are needed for a comprehensi'~ Third, it seems that not oniy is there a need city program O~E?i~ on a first-come, first-serve( fimding f~ the ` full range of Federal pro the target areas, but there i~ also a range- funding for the demonstration cities' legisla Thee suggestion I h~ve~st x~u~d~ about demonstration pFogram compo~ienth to avo PAGENO="0203" Ti ~V1~1JOPM]3~NT all will ee,1 `tnd r:~ - Leed for i'el The ~iportanee. officials and 197 PAGENO="0204" 198 DEMON$ThATION CITIES AND URB~ We agree the job should be done. Then let it be done by settin~ up so that it can be done~ And we should ~recognize that $2.3 bilL is a start-and nothing more. Planning c~uld be speeded up by creasing the funds available under title I f~ urban renewal and m ing that money available right now or wh4i the bill is passed. It not uncommon lihat a single planning proj~ct, undertaken for urb renewal purposes, exceeds $1 million. It w4~uld seem clear that a to authorization of~ $1~ million will not allow ~nough cities to underta the broad planthng activity required to pa~ticipate in the progra I realize that you will be interested in soiUe idea as to how the p: gram might be applied in specific communi~es. In Detroit there a a number of alternatives we will be considening. As I mentioned 1 fore, the community is mobilizing to involv the public sector and t private sector in a new: and grand partnersh . We have worked w together in the past in the United Founda ion, which originated Detroit, in the i~68 Olympic drive, in the ~ ntipoverty program, a in other ways. ~A~s I mentioned, a number of distinguished c~itize are participating in this planning at the p es~it time. Mr. Walt Reuther will chair the organization comrr ttee made up of disti guished citizens of Detroit. I anticipate iat some sort of coor nating mechanism such as a nonprofit corporation or an authority w flow from the deliberations of that group. The needs are present : we do have decay at It seems to me that we will be able to work oi city's housing. This will involve directly units and over 1 0 0,000 people. I see new pa there is today an acute sboi±age of recreati borhood family denters with a supermarket including library, recreation for young and neighborhood conservation, rehabilitation ass designed to help the residents to aid thems centers antipoverty activities reaching out touch the lives of those who have lost hope. to make our streets safer and to move traftit new Detroit General ilospital replacing th and serving the i~eeds of all city residents w can see this new t~ommunity with an ancho so that the reside~n1~s of the neighborhood a: will have a contInuing education center ri I see replacementôf outmoded water and sewc system. I see a place of beauty where urban exemplified in the finished product. I see, in within the old town. We will keep what is g rehabilitate what is salvageable, and we will This is a grand vision, a grand design, bu with the population of India by the end of th of most of us living in cities, then we mus dreams but we mu~t. also make Them come tru wisdom, your visic~n, these dreams can be fulfil We have also reviewed the Urban Develoi would request the Chair and the members o be granted the . liberty of filing additional'. after a more complete study of its provisions. N DEVELOPMENT I it a- is n al :1. 0- re e 11 II ci S 11 r e S S e D S I 1 id blight and congestio ~ &hout 10 percent of o ~r 35,000 of residenti ~kri~nd open space whe )~l a~as. I see neig ~ fa,4~ilities and servic 4,-health, mental healt ~taii~~, and like activiti yes. I see also in the~ into the ct~nmunity t I see new street :patteri ~ more swiftly. I. see. old Receiving Ilospit: ~ a wede~rn facility.. oiF a conmmnity cofle~ I oith~ area .iugener~ ~M In bh~ir .coinmunit ~fa~li~ies witha~roder design at its best will .12 Other words, a new tow: ~ we wiil.improve an replace where `necessar3 ~ if we think of a natio: century a~nd ifwethin. .not.only dream gram ~ d Wi1*~yo~w help, you ient Act. ~f. 19~j, and the~ committee that w ews on this legi~ltitio~ PAGENO="0205" DEMONST~A~IO~ CI ~ S . Mr~ BAiu~ETT; It m1ay be d~ ~ ~ Mr. OAVANMrn. T~ian~ you, ~ ~ (The information ~erre~ t f Joxrc~ SPATB~W~ BY T~ U~S: ~Orviits ON TRE UEBA~ Th~4TzLor~ r~ IN~ AND' URBAN ~EVE~OP~NT ~ Metrop~itctW ZeveIop~ne~t pl~z ~ by the Nat~or~a1 I~eag~ie ~ Ci p1ani~ing and de~re1opn~ent irnd ~ under titlel o~ t1~e Urb~n D~e1o e~i We agree wi1~1a t~e c~iac~pt a d ~I~1? local governm~enta, ~ tb4~ou~h s p proje~ts, in eornpr~hew~ive inetr lit We ;suggest ~ one rnc~Ul$t1on o section 102(b) supplen~nt~ry g ~ ts in metropolitan a~reas ~or ~ whi it metropoltUu~iw1dø ~,c~n!~e1u~r1sFv l:~L mg the location, finaz~cing, and e ~ ~2) adeqi~tate me~r~$lit~nwi'd' ~ ezisten~e for eoo~d~tua~iug 1O~a velo~m~nt o~ tJ~ie~;$~,~ ax~'d (3) ~4 land development and ~se wlil ~a 1~ carried eut in ~?c~~uce wi~ ~ 4 programing. These prerequlsttGs ré ~onsO ~ t are som~4. They will en41~oura e a metropolitan. area t p'ans I ~ area ançi improye1l~s ~ lug eiivl Ô But in OW? vi~i~ i~ is è~8en ~. 1 ~ c~Lr,~y out l4ie ~~ai~ll~g a~d e p ~ is there~fOre suggestedi th~t la ~ ~ ~ that suo~ c~ganiza$o~of~l~c'al e ~ ~tgen~ies responslble~4ca~r11fl tit I It is stgn~Wcai~t. tha~ th~ `val ~ lating regionai pl~n~g ~a4 p o r~ in solutions to metror~oltti~nwi p~ l~i tbe I~G~1~th~g awa U~bar~ Dev pt~ Section t~O2(c) of 1~bat~act hc~ of Rousi~ig afld Urba* 1$velo e~ such purposes. We ~ndorsed ~ witl~1n a metropoiitai~ area, s ~ for determltd~g i~ieti~opolitan ~ 1j~1 ~ee1sionma1mrs W~1IQ $nst bear U t~z the ~~per ~rgazdzath~na1 st~u ~ ~toca1 go~ernme~3tWlt~1lfl ~t me ~ creative ~edèra1is~A. ~Th~3r p~ ~r will x~ot proeeeçl tAwa s t~rnt a ~ 4 and `ele~torateS. ~ , ~ 7~~Tew CO~1fl0fl44aitie8. It js an It the patterns of~ u~rba gr~wth, hi *ize~ by theflight o~ ore affin h c from central c1t~~ to ubr~rbs, 1 a in 4lsadvantagetl in ~ve a of md trl~ dine. ~ ~ Mayors are prooccu 1e4 wit t i~ imbalanee-~tO comrt~ r the po ~ of minorities, t~ 8~c]a e~e and ai~ and ediImtioflaiQ~ i~tu~tt1es I t~ make the, r~ia~WM~ p teu~ial o141 iiavesttite~b as U~e d~ ~1o~ien ~ We must evaluate otentlál f ties) in these terms. AND URBAN D]~V~LOPMENT 199 ~ thont obj'&!~tion; . Chairman. liows:) r~c~ o~~' ~?~O~S AND NATIoNAL LEAGUE or Ao~r O~ ~UR3~ (ER. 12946) AND THE Hous-* ~ a~rs o~' i~6~ (ILR. 13O8~) Lowa~T ~&o~r , -The~ tT.S. Cotife~ence oi~ Mayors, joined d~oe~tes eoo~rdinated metropolitan area S the ~ Ineenthre grants program proposed Act. L OS~5 of title I-to encourage and assist entary grants for certain Federal aid n plamiing and programing undertakings. f/iou i02(b) of ~ title I, however. Under ay be n~ade only for, development projects as bec~n demonstrated that (1) there is Ing atid program~iig adequate for evaluat- Wig o~ ~1~idMdua1 public facility projects, ; tutional ~ other rn~rangeme~its ~re in ~ Ic t~olk~1~s ~nd aeftvttles affecting ti~e de- lie ~a~Wty. ~p~Qjects and others invo1v~g L e a m~jQ~ ftfl3~aCt on the area are beiflg opolLtaawi~e ~ comprehensive planning and ith the rationale for this legislation. `1~hey L lernentatlon by local governments within 11'l gtdde the orderly development of the ~ t. at &rganiz~t1on~ of local elected officials ation requi~nte1~s o~ soetion 102(b) . It of this~ seé1$~m ~ revised to maJ~e clear d officials ~e ~refe~ri~ed as the me~ropolitai~ herequIx~ements. c~nAcjls 4 ~ca~l elected ~Mcials in formu- ~ Ing polIcies and goals ~nd in cooperating ) ~ lems was recognized by the 89th Cougress I iat i~ct ~ ~Gt~ ~ ~ ized the Adrn~iistrator-now the Secretary . to make ~,ants to such organ~zatioUs for rovistoa. ~epresent1ng local governments anizatiol3s are the appropriate Z~echa~1isiI1 es and goal~. * They are composed of the ate ~responsibilities. They nOt only provide They maintain powers and prerogatIves of ~ tan area wbich are vital in our scheme of ft~snrance tl~at a ~etropolitanwide agenc~$r responsive ~ needs of the local governments statement that mayors ~are concerned about ~ since World War II bave been character- izens-aloug with industr3~ and commerce- ~ the central cities as' refuges for the poor and 1 ~ plant obsolescence and retail business de- .g to discover ways to redress this increasing tion of income groups and the segvegation ~ am a ~1de range of housing, employment, ~ e centrtU, cities. They have been trying to r comP1~I~itIes as attractive to people and utial of outlying areas. tie II (land development and new communi- PAGENO="0206" 200 DEMO~~ATION CITIES AND UR~AN DEVELOPMENT In our judgmei~t a progran~ designed to eucou4age creation of new communi- ties should be th~d closely to genei~L11y acceptàJ~Ie standards of desirable and achievable patter4~s of urban growth. It shoub~4 stem from a~ wefl-dethied~na- tional policy, esta.~lisbed after full and detailed ~zploration of national hou~ing and urban develoj$ment needs. Such an urban gix$wth policy can only be set a~ter all concerned groups have had opp~tunities to avance their views of the p~ob- lems and the prc~osed solutions~ We have not l4ad that kind of full and ~~om- plete examination. Those among us who agree that a national urban gro~vtb policy is both desirable and needed have not all agreed on the shape and sdope such a policy shouid take. . Mayors do not usually counsel more study-~nd hence delay-in any rea of obvious nationM need, and they do put urban growth needs in that categ ry. But in this instance `they feel that mOre study an discussion is needed and 1 ~ in order. ~ ~ ~ I Mayors recogni~e their responsibility for * de4eloplng and advocating on- structive, meanin~ul roles for established commu*ities in promoting the kin of urban developmex4 and oxpanslon which can and pill servethe best lnt~rest of all urban citizens. ~ ~ ~ ~ The U.S. Ooufe*ence of Mayors and Nationalf League of Cities are giv ng careful study to ç~uestions of :public policy guiddlines for more orderly ur an growth. . The studIes shOuld be complOted within tth year. ` ~ We would welcome-we would urge-similar st1~di~ under auspices of a b u~ ribbon commission organized by Congress. ~ The problems should get full review by all inte$stecl groups-public inter st organizations, academicians, builders, realtors, tr~ide ` unions. Only after t at can we properly decide the cour~O Federal, State, ~md local governments sho id follow in try~ing to ~hape the pattérñ offuture urbá4 expansion. We submit that Congress should act on new to~ñs legislation only after it Is established that- . . ~ ~ (1) Theprb~ram would not d~crimin'ate a4ainst older centraieit1e~ a d would not ptói~i~te further econOiflic and ~oci~~dispai'ities b~tween cent al cities and new growth areas. ~ ~ (2) It would not serve to promote fringe a*aeothmerdiál ~nd industr al growth and de$elopment to the detriment of te ~ central city's tax base. (3) It would not fnttber pr~tnote ecoflOmie 4nd sOcial segregation and t e further flight of the~middlè class. taxj~iyer to outl~i~ areas. . (4) It would not further ~omote the und~siráble proliferatidn of lo a! government. . ~ ., ~ " ~ ~ (5) It would not divert scat-cO 1~'edei al re~ources from areas of gre t and immediate ~ need Into supjiort of enterpri$~ ~rtiich ha~re not' 1nc~d f Government siii1~port. ~ ~ ~ . . ~ 1~' ~ ~ ~ * * ~ ~ ~ . (6) It wouldi not serve to enntnirage real e~tate promotion Nentures f questionable va'ue In acbiO~mg mbre rational ~trbán growth patterns The U S Oonfere~ice of Mayorh apd the Nation4i League of Cities advoca e legislation whu~h e1~tcotirages deveb?J!p~!ent of ne* ~Ommunit~es within existi g core cities and the traüsf~rñiathii i~tó new cit1O~ 4~extstIng smaller cothmu i- ties Such developihe.nt can be carried out in c4ttjunction with well clefin d community goals, hi such areas a~ hdus1nk~ ~ eduèá~*on.. and employnient oppc- tunities, for the Ontire city. ~ LikeWise, existing ~i4all cities `can be made in o ~ new towns. The League of Cities arid Conference `of Mayors Would support ne towns legielation on those terms But it cannot suppOrt new towns legislatlo whiëh has the potO~itial of accentuating urban-sut~iirban ~ social and economic disparities and deve~oping outlying areas at public ~pense.-and at the expens of established comirninities Urban mass trc,wn~tatioii -!IMtle UI extends tl~etlfl~ban Mass Pransportatio Act of 1964 for 1 ~ar an~I mq~eases its grant aut4~ortzatIon by $95 million s that with existing ftitids $150 milliOn would be a~ aila~l~ for flucal 1968 This proposed I-ye~tr Oxte~I~iork at the $150rnilhion `4~. yearräte would nOt permi any serious ~ planntn~ bY: local govermflents for n~eded improvements of an additions to existing mass transit syst~iiis. On the basis of ~ current need figures from severta~ iarg~ir metropolitan area we submit that the program level should approach ~8OO ~6 $900 million a year~ We also submit that the interests of the program ~nd the loealiti~s wOuld b served better if the grant-in-aid ratio were increase~from two-thirds./one-thir to `90 percent/lO percent, bringing it in lIne with the ?atlo app1ica~bIe to the inter state highway pro~am PAGENO="0207" DEMONSTRATION CITI~ ~D URB~ DEVEWPMENT 201 HOUSING AND URI Displaced famili ~s.-W~e Urban Developmel families. regard tc PAGENO="0208" 202 ~MO~S~1'RATION CITUhS AND UT~ "The próhthiti~krn In section 4O44j~) Is unforft is intended to ~ohib1t the use e1~ data center~ ample. We wcm~ld certa1n1~r concur In this. Or~ the day-to~day operation of city government w~ the quality for neighborhoods, the attitudes of rehabilitation, law enforcement, and other progr limit the operation of such centers to conceptu analysis, of only a part of the total job." Sincerely, * IUBR&N .OBSRVA~rQjEs, TITLE I ~AN DEVELOPMEWf ~atel3r stated. I surmise t for payroll accounting, f the other hand, it Is frequ Ich bears direct relations] eople In blighted areas to uns to arrest deterioration ~1 research would be to ~ This Suhcomiliiftee has received considerable the very exciting ~dutñótihtration cities program. gress and this subcommittee have consistently grave probletne which confront Aineji*ca~s urban willing to consid~r with thoee of ñs who have the cities, new and revised prog~.'a±ns ~f Fe4er~ with the massive prohl~nS of physh~a1 detertOra jug human stress. Oertainiy eveI'.yi city requires evei~r tool, every ment which*the*mn~nd otEnan can con~eive alid the the decline ~$f th~ vital urban cez~t~r:s ~tnd to re consistent ~~}th oi4r Am~riean dre~L To this en who have ~ yofl earlier in these he stration cities p$gram ~i~i *~lated legIslation. My statexhent ~re is to focus. attention On an~ the need for a p~iantlty of reaffll~ available lnfoj materially ithprove the efi~ect1veness of our toEta~ U1 to discuss title J~'V of H.R. 12946 Which attthori~ tion centers. Congress has made available an array of toois sible agencies ma~ attack the ills of omireities. 13 we have too frequ~ntiy been co~u~elle~1 to operate of those iUs. We~ave,e~ ~essity had to pres history of sueces~ ~ or ~allure. Poo i~ften we ar effects of these e1i~irs. We hate 1.ol~rated too r~ mentation_the so~ial as well as the economic. cost This committee i~ow hasbefe~e it the ulost conip the sick areas of our cities ~ p~öposed. In cot ourselves if we po$se~s the skjll to Utilize the ext most effective way, With su~i a massive appr~ ments to the visiOn and percept1venea~ of all tt~ose `tive venture. It could also be an ecouomic, secia] could set back the revitalization of our urban c~i urban life for millions öi~ our 1e1*ttZe,~ for. genera I would not for ~ moment suggest that the prese we hesitate In Qt~~~tr1vi~* ~to desIg~m avid man~e~ are too great ahtl ~oo pressing to t~4érate delay * I dO èthphasize ~l~e urgent ~j fQr ~btapleüLeutin with those which ~vlll aid us In us!t~g those weapoi constructive results~ The essential element Is a gi~ ability of informatjbn regarding our *ban c~rtter~ analysis of that .iiv~o~mat1on ; and a ~ra5tiy 1~p~y~ . Cesses and failures i~i applying the various weapons As T 1~ave reviewed the testimony received by with Secretary We~tver's appearance on February sistent themes thread through the testimony. First, the ills lb plague oiii~ urbau areas are e fore the remedieswl~jeh must be applied are at leaat Second each rem~d~ we presc~ibe onI~t reveals requirement for add4tloual methods Of *vercomlng ti Third, While eaeh~ community has *Ziat appeai~s~ causes and the reme4ies are not sufficle~tly the same treatment acceptable. .~ II.R. 12946 testimony In recent week This adm4nistratio~, this demonstrated concern for enters. You have always be responsibility of gover cooperation designed to .011 and blight and the re ~source and every enëour t~i~ess can provide to rev U{~4. commzt~rnlt~es of a qua z ~ with.m~r fellow ma; 1~hi~s*iU Support of the dei they critical need. I refe ~mation which will help u `ban eftort. I, therefore, ~ es grants for urban infor Ith which a Variety of resj like a good surgeon, howe rfthout an ade~uate diagn ribe remedje~ which have t~liy unaware ~. .* the ~ ~i~J~y the errora~of ourexp of those errors~ ~ ~hensive approach to treat plete honesty, we need to j~g and the. new tools in q~i `the results can be me avolved in this great coope and political disaster whi ~e1~s and `the improvement ions. ~ LI; tools be w1thd~awn or t ufe new ones. 1~'e proble ~ the `egal and fiscal weapo ~ wIth skill and the great Rtly increased level of ava ~ . a much more sophisticat 4 method of comparing si vailabie to us. ;hla subcommittee beginni 28, three dramatically co ;tremely complex and. ther ~ coiiiplex. ~ .th oWn inadequacy and t Le pj~~tblem,. * ~ ~. tb be similar problems, tl~ to make the use of a commo I, at It r ex- ently *,p to ward To rmit PAI'EICE IJE~LY, E~vecuti've Direot 2'. on ion- the een ing [cal sit- go- rue ity em's on- to to Ish tie tio de ri~ ug sk Le U- a- th of t S 5 1; 1- I g PAGENO="0209" DEMONST1WiIO~ CI ~ ~ ANtI UEBA~ DEVELOPMENT 203 PAGENO="0210" 204 DEMON~TRATION CITIES AND URB~R DEVELOPMENT At my invitatIon as the president oi~ the Natior~a4 League of OItie~ a meetin of the NLO executive committee in Milwaukee was ~e1d together with represe ta- tives of a number of major urban oriented unt4ersitiea. The purpose of he meeting in June U~65 was to explore the deslrabil~ and possibility of estab1~sh ii~g a network of ~trban observatorie~ cooperative'y sponsored by the cities ml interested, cpiallfb4d universities. I The response w~s overwhelming. There was no~ doubt as to the need for s ch a program. Thos~ attending not only identified~the points I have stated ut also went well be~rónd. The need to' involve the b~st talent available in our ni- versities in continuing. interdisciplinary researci~ on urban problems and of feeding their thought-provoking anäly~es of newly ~ssembled data. into the poll y- making circuit of local government should be ob~tGus. The result ~f the Milwaukee confer~nce was a u~~anirnously adopted resolut on calling for support Of the approach by the National League of Cities and furt er development of this program. ~ On their own initiative a number of mayors hi~ve proceeded to develop ci y- university planning~ teams as a prelude to form4llziug the urban observat ry concept. The inte*ést expressed by other cities 4nd universities is beyond 11 expectatiOn. ~ ~ I , We believe that the urban information progra4i . provided for in this bill is definitely a move ir~ the right direction. It clearly ~ecognizes a need. It atta ks the data compilatlc4i aspect of the problem. ~. ~ The . bIll, as drafted, contains several weakne~~es which we would urge e given careful consideratIon by this committee. . ~ The bill is not clear as to whether the informati4a centers will be permitted to engage in the assen~bly of original dattt. The Secr4tary, In his testimony on ..t is section notes that this title would exclude propo~als which involve coliecti g original data. This would be indeed unfortunate. ~ Considerable data on urb n areas are available and certainly should be assei4bled and made more read ly available. ~ Where sufficient data are lacking, such ~x~formation centers should e argéd to obtAin the~n. * ~ ~ ~ The prohibition IlL ~ection 404(b) is unfortunatel~r stated I surmise that it is intended to prohibit the use of data eentç~sfor pa~n~1I accounting, for examp e. We would certain~yi concur in tins On the other ~and it is frequently the da to day operation of ~ty government which bears duj~et relationship to the quah y for neighborhoods~ t4lie attitudes of peeple in blighte~ areas toward rehabilitatio code enforcement and other program~ to arrest deterioration To limit the o eration of such centers to conceptual research wouk~ be to permit ajialysis of on y a part of the total job. ` I also want to e~nphasize concern for the management of the proposed ce - ters. I would~bopethat the bill would be broade~~ugh to permit `the Secreta y to enter into agreements with a~ariety of agent~. j~i some States or metrôpo~i- tan areas the log~4l sponsor~iigbt l~ a metropol~~ai~ ;~Ouncil of local. gover~i- ments as the bill appears to conte~npiate, while in oI~e~~a it ~night be a wuversit~r or a State league o~f municipaLities We are afte4 results and the legislati~n should permit that i~istitutiona1 a~ran~iment whiçl~jci~t produce the b~~t result~ We. spe~iftcally .rec~mmend that . the definition of~'~netrQpolitan-area agenc~" in section 407(3) be amended by adding before the $uucolon at the end of line ~1 after the Words metropolitan area th~ words o~ a~i entire State This woul definitely enable a statewide orgamzathm composed ~f public officials represent tive of cities' ~r countie$, for example, to qualify a~ sp~rnsors of urban inform - tion centers either f~r a specific metropolitan area ~r for general state*ide~uti - ity or both. ` , .. ~ ~ 4 ` I believe that the language in part (13) of section~4O7(3) would qualify in r stricted circumstances, an urban observatory jointl~ established by a city and~ university, but, we recommend tjia~the.language of 1~ttle IV make clear that sue, a jointly estabhsl,ied agei~cy would be eligible to re4erve assistance as an urba information ceuteri14 ~ny event.. ` . , L ~ ` ` Finally, we recom~nend that t~ie 5O-p~ircent grant jlimjtation in section 404(a be changed to.75 pei~ent, at least~1!irtli~ first 2 yegr~which would then coufor to the grant arva~g4iuents available wider title I ~ the Higher Education Act of1905. ~ ~ . `~ ~ ` ` ` `~ 4'. ` It would be a weitk effort, indeed, it some assur*nce was not built into thi program for an effective lnterehange between the p*oposed informatjon center There should be a coordination of Input, an ~ agreem~nt on certain . areas of co - mon investigation, lateréhange of infoi~mation on re~earch and analytical met ods and measures of results. It seems criminal to ~ne that the extensive urba transportation studies carried on pursuant to tbe i~iandate of Congress in th ~ :i'~ *1 PAGENO="0211" DEMONSTBATI( CAVANAG: iated metro BAN DEVELOPMENT 205 pport 00- it would ~n area PAGENO="0212" 206 IYEMO*&PRATION CIPfl!iS AND tIE Mr. B~iu~w~ Mayor Cavai~gh, 1 wan the si~tbcomni~tee for a sp1~n4~id and co record of ae&~mp1ishments in Detroit is And we know you can speak with au1~horit problems. ~ Mr. Mayor, some people seem to have t~ ordinator which wc~uld be set up for each ~ would `be some sort. of a Federal diotator~ lieve this. An~d I think that~ the bill is el dictatorial p~ers. But I wotdki lik~ to a~ would the pèc~i~ who h~ audi fear feel renamed the B~edera~l o~ia1 a~ a local cc Federal coordl*athr, ~nd second, what doy ing the ~rvic~ of a coorditator optional t than mandatory as now provided in }LR. Would you give your opinion on those~ Mr. CAVANAGH. Yes, Mr. Chairman. I think that during the last 41/2 year~ any mayor in America in relationship w~ ment and various Federal ag&nc~ies. And ~ sincerely and ~ndidiy, that at r~o ti~n~e in 4 theTe been a d~'ution o~f io~1 cot~tro1 4 responsibility. ~ No Federal ad~uiniStrator~ under my dir~tion and told me what I cant these Federal p*ograms. And i~hen ~eopl~ they speak with any degree of e~penence~ experience wh~soever. The specific a~wer to h~thof your ques name of a coordinator may better be chan~ I do not have. ajriy fear of a Federal coord suage the fe~s of s~ine ~peopie, th*~n ~ be abetter title ~ I think h~ ~esfonse ~to the se~o*id questiG portan.t parts e~ this program i&that not o very comp~eh~nsive atthck ~upon a certain well coordinated~ attack. The only way that making it mandatory that there be a local both the Federal and local effort. I think, it so well2 that the coordinator;is really not such, he is the city's coordinatoi'4 He is th thejr prdblems,i~td help t~pi~1together cies wQrkifl?gifl cbncert wjth the private and community to a4iiev~e the great Q~ectivesG So it would ~m to me, lu ~*r to the sonal opinion w~ild be that uot *iiy ~oufd ordinator, but I 1~hink it should be mandatot Mr. BARRETT. You do think it should be m Mr. CAVANAGH. Yes. Mr. BARm~rr. Thank you, Mr. Mayor. Mr. Cavanagli, in v1~w of the very fine u: being in Detroit, I would like to ask you, i program is enacted into law, how long do yoi ~N ]~VELOPMENT to thank you on beha f of str~tive statement. our well known to the Na ion. on metropolitan and u ban ~ fear that the Federa co- Lernonstration city prog am ~or czar. Now, I don't be- ar that he would not ave you two questiOns. F rst, better, do you think, ii we rdinator or rather tin a a ~u think of the idea of n ak- participating cities ra her 2341? ~ two questions? I have been as active th the Federal Estabi I can say, and I say it r Ltt~ro1e th~e programs ~1jiftn ~ elimination of l [~u~: come to me or peo çñ~ cannot do in relatioi tell me this, I do not th ecause it has not been ions may well be that ~d to a local coordinat iator, but if it would ~[ucal co~urdinator mi~ it ; that oirie of tIii~ most i ly does it propose to b ~eighborhood, but also ~thi~be done, I think, is ~oGrdinator to coordin ~;s Dr. Weaver has stat I~i'e Federal coordinator r~ to help that city wi bevarious Federal age m~hc sectOrs of the bc rthis program. ~econ~d q~ue~tion, my p~ ~ ~icon~ a Federal c ~ndatory? ban renewal program n ~ the demonstration ci y think it would take yo as sh- ost as ~ab >le to uk :ly he r. 5- ht 1- a. a te d `S h PAGENO="0213" If I we did ~ plan for DEMONSTRATION CITI S D URBAN DEVE~LOPMENT 207 ~IHJ PAGENO="0214" 208 DEMO~STRAPION C~PI]~S AND TJR AN DEVELOPMENT. Mr. Wn~ALL. You say on page2: We feel further that objective criteria be incl4ded by legislative mandate anc! administrative determination. Do you hav~1any suggestions as to the crjteria this committee sh uhi recommend b~ ~tab1ished by 1eg~s1ative mafrlate ? ~ Mr. OAVANA~rn. No, I do not. I thinkjthat as much flexibilit as possible shouldibe written into this kg1S1at~Qfl, giving the Depart ent of Housing an~d Urban Development th4~ degree of flexibility hat really can mak~ this, then, a demonstration pity program. If we st uc- ture it so tightly or make it so rigid that t1~êre is very little flexibi ity in the act, I think it loses much of its force and effectiveness as fa a~ administration by the Secretry. And thetefore, I think most of he criteria should be developed by the admini~frator of the act, the Se re~: tary himself. I don't have any. specific sn~gestions as to any legi la- tive mandates in relation to that point. [ Mr. WitNAriL In yourstatenient you cail for a release of the $ .9 billion authoriz~d by the Cong~ss last ye*for urban renewal. re you asking us to pay out that money now, ~r merely authorize a n w amount? I Mr. OAVANMrn. I think it should be auth~rized and used as need~d, Mr. Widnall. . I can conceive of the situati~çn as I mentioned here~ in our testimony, that with this great backlog~biiildup in urban rene~al, and maybe some of the urban programs with which we are fami1i~r, that it would have a sort of diminution o~ effort on the part of t~he demonstration c~tjes program, that it wouldiiii turn dilute some of t~e efforts there if we didn't have the availab~1~ty ` of this money in t~ie other Federal p~ograms that form & most i4z~po1i~ant part of the de onstration city'p~ogram. , , , .. Mr WIDNALL 1~ou fully realise that $11/2lbilhon have actually be n paid* out of $7 billion authorized for urba4 renewal, so that there is still $5.~ billion authorized that has not been f~aid out. You state: Not only should there be 80-percent funding of t~ie local share of Federal pro- grams which can be committed to the demonstrati~n program as i~rovided iii the act, but there should also be ~-pereent funding cff the total cost for all other portions of the approved demonstration program ror which Federal funds are not available. In that secomj recommendation, could y~i cite us a few examples of what this would entail, the types of progr~ms, and what you would estimate the cost to be in this area in regard totDetroit? Mr. CAVANAGH. If we had a specific area iii my city that we had de- signated as the so-called target area for the~ purposes of this demon- stration city legislation, and essential and . component parts of the demonstration cities program were an urban renewal project, a new comunity hospital, let us say, a community~ college, and some other neighborhood facilities, let's assume that for irarious reasons there was no available funding for one of those majof~ projects which was es- sential to the deihonstration citie~ project, l~t's say it was an urban renewal project, or it was a neighborhood fa~ilty of some kind, under the Hill-Burton Act. Therefore, T think if t~Tie normal Federal funds were depleted and were nOt available, and tflerefore, that demonstra- tion city project could not go on, I think the ~emO1~trft~iofi city proj- ect ought to make allowances to fund in those instances up to ~O pei~- PAGENO="0215" DEMO~STSThAT~ON CITi PAGENO="0216" aspects o:f a city, but the ~ocia1 renewal o~ that every ~ity it~ America, or most cities, ha~ We know how tb build streeth and highwa~ and collect garbage, and `so on. Our abilityl amount of money we have. But really wh~ not done in America is `how t,o renew what L city, how we lose the great impersonality t~ city, and how we take that single individ~ great mass of people in that great city in all ties together in what we usually call, in, renewal. And I think that this demonstrat~ to combine the kest' features of both physik order to make a city the kind of city that ~f not only envision new urban renewal project4 and open space, but I also envision neigh1~ pating in the planning of their own destin~ dents help local officials decide on what n~ needed maybe in a family centers a medical~ And these are the sort of things that I thiii contemporary history will make living in a Why is it that a lot of people prefer to li~ normal reason is that, they say2 they know tl~ as cold and impersonal as living in a big at least some flaitor of that kh~d of characte these big cities. It is an extremely difficult do it, I think, i~ through the utilization o approach, this program of social renewal. Mrs. SULLIVAN. The day before yesterda~ amples of how this might all be tied togethel words, but in example. So I look forward t~ I just have one other short question, Mr. ~i I am interested in your mferen~e to the Detroit to rally community support for the gram. Could yói4 give us just a lIttle more in that meeting? Mr. CAVANAOIt.' Yes. A number of years was taking some of its first faltering steps, residential redevelopment project in Amen rather well-lmown Lafayette Park project. about to fail. At that point Walter Reuthei~ number of other very distinguished people, put redeve]opment corporation which in effect s~ They financed it fbr a period of time until un of age. will, it was lon~g felt by many of us in our kind of massive s4ipport in the private comu demonstration city a practical reality, but m~ ment of our community a practical reality, Government do it itself, working with develop the resources of the community. And towar gether about a hundred of the leaders of the c the great universities and the heads of all th~ and the utilities and the great labor unions, a city. I have long felt 78 a physical renewal plan. 9, and put up street lights to do is only limited by the ~t we don't know and have call the human values of a Lat comes from living in a raT and relate him to the which he lives. And this Detroit, at least, a social on city program proposes ~al and social renewal in e want to live in. And. I , and maybe new hospitals orhood residents partici- 7~, and neighborhood resi- ighborhood facilities are or dental clinic. ik for the first time in our ty much more attractive. re in small towns~ The em neighbor, and it is not ity. Then if that is so, should be recaptured in ;hing to do. One way to this demonstration city we asked for some ex- ~ `and meshed, not just in seeing some of that. :ayor. teeting that was held in L~monstration cities pro- .etail on what took plac gO when urban renews I~hink the first majo ca: ~vas in Detroit, th And that project wa and Henry Ford, and together a small citizen ed that Lafayette Pan1~ an renewal sort of cam "~1t~~ba~ we neA~cled thE ~Bity to make nOt only ~e the whole redeveiop~ ~ather than having thE ~ why not mobilize al] that end, we called to- Dminunity, the hea~s o± automobile companies an4 so on. ,A~nd they 210 DEMONSTRATION CITIES AND URB~N DEVELOPMEWI' PAGENO="0217" DEMONSTRAT~ON CIT ~ES ND URBAN DEVELO?M]~NT 211 agr~ed to a man that it wa ~ * e~ ssa~y~ to first qualify Detroit as a demuastration city. Oi~e w ~ t do it wa)s to stimulate the great private sectk~r of dur~ on~mu ~ ~ y n.d spurgrea~er private investment. `If the Federal ~Go~e nu~ex~t ci ~ oea1go~iment proposed to spend `~, millbns of dolia, Ith~ ~ ~ ~ ~ c~ ~ strathi~~ity ~ area, weiJ, then, the private community rougla is nonprofit dev~1opment corporatioi~ should `do likewise á~ 4 prob 1~doan e~e~igre~ter jOb. And 1 am very piea~sed with tli vary ~ ` at response, ~c~se here we had some extremely politicall cdnser ti ` e businêssine~i `thftt rec~gthzed the need for this ~ort o thibg. ~ l~ e~wasiic~t ~`voi~e raised in dissent, I might add. ` ~ ` ` ~ ~ ~ ` ` ~ ~ ~ ~ ~ `: ` ~ ~ ~ ` ~ ~` ` Mrs. SuLLx~rn ci~ ~ ~ ~ thu~h, *~ ~ ~ ` ~ . ~ ` ~ ` ` That is all, Mr.~Ch ~ra~ian. ` ` ~ , ~ ~ ` ~ ` ~ ~ ` ~ ~ ~ ~ Mr. BAm~m Mr. Eir~.o? Mr. F~o, Pi~nk ~ro~i~[r. i~ rrna~ ~ ~ ~ ~ ~ ~ ` ` ~ ` ~ Mr. May~r,'fi~stI~v~ntt ~ ~i ` ~1i~iexi~t ~6u on y~ur ~tat~n~nZ:here this morning. ` It `is ~ety in r t~ ~ g ~ndirery enlightening. ~ . ` ` ~ . `I want to's~Ey'f'or ~hereco nd !t sa~dthisto Dr. W~avera~ w~ii as others thathw*~e~ ~sti~ed ~i ~ ~J: fa,v~or amdst~port this legisiat-io~i, its purposes s~nd ob~cti~es. ~ ~ ` ` ~ ~ ~ ~ . . ~ ~ ~ ~ / ~ ` ` ` ~ ` ` ` ` ~ ` ` ` There are oiily ~ p~ovis :b ~ ` ~ithis'bil~hat distuth me. Theohe the chairfr~am h~st~l1~ud~d to I~ h~p~o~ides fthes~r~ti'~rni of a eral ~ co~rdiftatc~r,' ~iicI~ I ~ ~ er~ & &~m~tn4s~ar. ~ `I airt afraid that such a coordinat~or ~ii~ht I e~ ere `with the a~tonOi~us ~owers of the loeai govei'~nhie~it. I f ar ~ athemnfght~ havsto& thu~I~ power ~Lt~d ine~ere~i~rjt1~ lo&ilgove h~ nt~ ` ~ ~ ` ~ ~ ` ~ ` Testerday, th~ n~ay~r o ~ ~ a~r1~ testtfted before th~s committee. And iii conn~cti~ *itljas ~ vil rquest~or~&he~entôn to~aiy that he wottid be'willinØo ~a~keth ~ o 1 góve~nthentthake th~ r~ecommenda~ tions or suggestions~ two ~E i' e to~it~a&tpütof his testimony. Es s~id-'and ~ this ~is ~tay~r d o ~ in N~w Jersey-he said: ` I certainly woi~1d]~e ~hat ~i ` ~ ~ ~tb~ the ri~yor t~f a Dä~ticuià1~è1~ b~é~ `~ti~r~è 1 ` ~ ~ 1~ited ~ AñdI Would hoj?e thatit Would~es~eà~e~fr1 ` t e Ibeal a~eag. ``~ ~ ` ~ He rent on furt~* to sa~ ~ ~ ~ ~ ` ~ ~ ` ~ ` , : ~ ` ~ I would hope that ~ou ~oul~ ~ ~i e th~t into the law ~ iic~to the bill. And I have no objeotlons to it. ` ~ ~ ` S ` ~ ` ` ` ~ Now, as the red~a1 coQr~li~ or, do you thfrik that we shouldwrite into the ~ I~I~t th~ Co ~uui~ies concerned, be, qharged. with subizutting nom~na~o~s fr ~ ich the Secrretary of this Department could i~ake l~is ~p~Qi~tIIL~ i ,~ , " ` ~ ` .` ` ` ` ~ , ` ~, Mr. OAVA~AG~,. ~L res: o ~ to `~M~ Mr. Congressman, w~u1d be a very en~h&~à ~`9~esJ" t ~ k thelocal coordinator should be one ~ ~n~i~r t~ t th~ but tlie $~rtichlitr pr'oble~s of a~ eomin~inity~. ` T ~h~k it mi t eli b~ ~1~hI~ thatlocal coo~iátor ~i~4 best be ~ ~rorn th 94~ 1 area rather than from the 1~ederai ~stabhshmer~ ~i~a~be in ~ ~ thet~ a~e~ Ahd I truly beli~ve that a coordinator ~ m~ed~d 4nd ~ 1 nëèdedin~t~his progi~am ~ ~ ~: also thinlc th~t t:~ie p ~ t l~!ich ~ou r~iss is~ w911 thkeii that it 1~ul~ b&~ `p~é&&~' ~k~E6 ii ~ta1i~' ~nd Is ~rI~iji~,thetic to t!h~ 1i~al problems and the ~oca~I ai . t would agree that the lô~1~-either the PAGENO="0218" 212 ~ DE~O~TR~TION' CLTIES~ AND IJR ~ DEVELOPN~ENT mayQr or .thelocal agency-~po~rtieipate. 4fl thereeommenth~tion~ of names to be ~o~sidered by the S~crctary iJor eventi~a1 selection. I believe, of~course, that the Secretary tshould have the powe to appoint whomever in his~judgrnent is best q*taJified. But I think t ~ ere should be something included to assist hirn~in making that det~mi a- tion, ~ Mr. FINO. N~w, the other provision in t~üs bill that disturbs rn is the requirernen4-and that is oi~ page 3 of~ the bill-the requirem nt that dernands4~bat thties have a plan for so4i&l.renovation befor*~ t ey can qualify f4z4. Federal aid. ~ Now, undeij this provision the See e- tary of this Dei~artment will have absolute~ power to deny assista ce, financial suppott, if he determines that 4h~re is no provision or economic integration under this program. And I would like to~ h~ve your comment on that. Mr. CAVAN~GIFI. Well, Mr. Oot~gressrnan, ~[. think during the cou~se of n~y testimony I probably. didn't make astckar as I would have ~Ee- sired to make it, the fact that I think on4 of the keystones to this legislation is the requirement of a social r4newal program. I thi~ik this is the one g*eat thingwe are lacking in~ the American city tod~y. Too many of us tin the Americai~ eities hav4 put greatstress upon t~'ie physical reoha.r~ctenzation of a city, ~cvhie1~ is important, and up~n the buildmg of ~aew and great buildings, c~mmerciid buildings, a~d new housing, and the like At times the s~$cial or human aspecth ~f the city have sut~ered. ~ Now, this is not an easy thing to do. W~ have been struggling~ I think rather manually, with this program ow~selves for the last couple of years in. Detroit, attempting to put do*n what we call a soci 1 renewal plan. . But I think it is most i~po~~nt that we start sorn~ - place. And I tI~iIIk this citiea dem.onstrati4n program is the logic 1 place in which th~s requirement should be m~c1e . Mr. FINo~ IiLI~iflOt allw1ii~g~tô racial nte~ra~tion, I am alluding o economic integration. j : ~ Mr. C4VANAGH, By.that, you mean what ?~ ~ . .. ~ ~ . ,. Mr. FIN0. Putting people of low income in~a higher braoket of hou - ing and have the Government ~ su hsidize th~ difference between h s rental and the amount he can afford to pay. .~ ~ ~ ~ ,~ Mr. CAVANAGIT. I think it is di~ficu1t, but I think it should be ce~ tainly somethii~ that we are hopefulof ach!~ing. Mr. BARRETT. * The time ofthe gentleman 1~a~ expired. ~ ~ Mr. Ashley ? ~ ~ ~ ~ ~ ~. ~ . ~ ~ Mr Asnn~rr Mr Mayor, it is a pleasure t4 extend greetings to yo I must say that ~e in Toledo continue to wt4ch. with fascination an admiration the splendid strides that your cit~r continues to make. On page 2 ofy~ur testimony, *ayorCavaltzagh, you say: There is much to be said for a ~ national compet~tI~rn o1~ ~ce11ence in plannin and programing the massive projects required in eadh clty~ to be selected for thi national program. `~ ~ And on this, I must certainly agree. The ingenuity, the imaginatio that might be representativ~iu plans submitt~d, whether or not thos plans~ would be ~ s4~leeted for actio~i progran4 could be of very con structive use And I take it that this is on4 of the things thnt yo meant in your~stat*ment. PAGENO="0219" In the pr~ It is Important stimulate envy an stration cities." It seems to me that seem to be endo~ ASHLEY. .` ~r you are. ~s. muity you, true of c PAGENO="0220" 214 DEM&~STRAPION CIPIES AND 1J11~BAN DEVELOPMENT I say "the agency," I mean the Departthent of Housing and Urban D8velopment. Mr. ASIIL!*. Then why should we no1~ ~pecifiy that ? Why would not it be a goo4l idea to say what we mean ? Mr. OAVAN4GH. I think perhaps as a ge~ierai statement as to a broad objective th~tt you state, I might not h&ve~ any specific objection. The only thing that I would like th suggest tol the Congressman is that we consider makingthe progra~m as flexible a~ possible, the administration of this act, to insure that it indeed is a Dem&nstration Act, and that we can demonstrate various techniques and procedures in various kinds of situations to show that the who'e character of a city can be uplifted. I also think we have a great pra~ctica1 consideration too, Mr. Congressman, and that is that one of the reasons we have great corn- rnunity support in' our city fc~r this kin4 ~f a program that I just mentioned in ~sponse to Mrs. Su11ivirn~s~ question w~s the fact that we tiy to reIa~e how the upg~'ading of 4 target area neighborhood woi~ld inde~d~aff~,ct all the neighborhoods~in the community, even the all-white i~ei~hborh~ds that have no sibrns and no blight and no decay. I think it is important that we make it as broad as possible to insure that it has broad support. And if *e limit it to just the Watts type of area, I would be afraid ofthe prac~kal implications in relation to the support. ~ Mr. AsHr~r~ I can answer that from artechnical standpoint. On the other hand~ while we would not want ~o so circumscribe the pro- gram, would y4~u not agree that the Watt~type situation in terms of the social. fabric of this counti~y, and wh~t we are really trying to achieve through this program, should rec$~hr~ some kind of priority consideration ? ~ * Mr. CAVA~AthT. Yes. And I am sure that if Los Angeles was a dernonstrationcity, one of those selected, tile automatic place I wotild think would be ~Watts type of neighborhood. Mr. Asrn~EY. I would like to ask you ji~tst one question iii clariui- cation. You made a very interesting poh~t with respect to funding, suggesting thatthere might beinstances in $rhich aplan would involve a spectrum of 1~edera1 programs, some of 4t~h might not be able to be funded, atid kth~rs of whith could, and that this might cause con- siderable delayslin irnplernentation~ And n~s I understood your point, it, was that in ~ situation of this kind those ~~rograms which otherwise were not capabh~of being funded under th~ ordinary program could be funded out of the $2.3 billion, or whatev~r amount is decided up n. The question ti~t I think Mt. Widnall as1~d 4was with respect to h w this might work out. You started to say, suppose there was a 30 million hospital project, and that Hill-Burton funds had run d normally under the operation of the progi~arn, without this kind of consideratio~i th4~re~ would be the Federal p4rti~ipation automatica ly of $15 millimi'imider a 50-50 formula, and t~iere would `also be 80 p r- cent of the local; which would be an additi~nal $12 million. So t at would be$2'T imilioii out of the $30 milhiói~ utider the program as it is proposEMi h~re~ Now. here that would ~e forthcoming from t c~ Federal Government. Tinder your suggestièn there would still be t e $115 million directly available, which ~oul~[ be the situation in a y event from the Federal Governmênt,-~~---~ -~ Mr. CAVANAGH. Except that it would not be available. PAGENO="0221" DEMONSTRMPIO~ `ô~i S D URBAN DEVELOPMENT 215 Mr. AsHi~r. Well, it~wo~ild~ ~ ~ ~ ~ ~ ~ ~ Mr. CAVANAGH. I m~an~ i~ w ~ ~tie it was not available. Mr. AsHu~r, Then i~ WQUld ~, ~ 0 pere~nt rather tha~i 80 percent; is that not so ? ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Mr. CAv~NAo)~x. Ni$ty perc ~ ~ t f ü~e i~o~a~1. Let's assume that the HilkBurton funds w~re total ~ 4 p~ted, atia th~re was no money available, awl yet tha~ hospit w ~,~ssentia1 to making that de~non- st.ration city project. ~ ~ ~ Mr. Asgu~r. The p~iii~is , t ~ t~rz~p~ Fe~teral do1iars-~w~ are talking aboti~t what is ~vai~ab1 J ~ ~hie~is ~ot *vailable, but rn terms o:I~ Federal 4oliars ther~ ~~uld b ~ ~a~difl~e~renoeat all, would there? Mr. CAVANAGn. I tIi~inl~u~ ~ 4 ~, atprD~rau ~ under that spec~ific progra~n, that is true. ~ ~ ~ ~ ~ ~ , ` ~ ~ ` ` ~ ~ Mr. E~i~it~rr. Thet~me of 1 ~ ~ tl~max~ j~s. ezpired. Mrs. Dwyer? Mrs. Dwn~ Than1~ you, .~ ~ 1~ hai~m~p. ~ ~ Mr. 1~a3~or, `you sta~e t~iat, ~ ~ g ~~jer~1 pr~gram~ were ~ct ade- quately fttnded to d~ tl~eir ` bs. And yo~ ~1~o , indicate ~u ar~ worried that urban r~newa1 i~ s will ~e ~oded by alloea.tions to demonstration cities ~rh~oh ~ ~ ~ ~4 , 4i~y `up ~dstu'ig funds , 1~or cities unable to enter into l~he pro ~. ~ Tiow mi~~ money do you think would be entailed in ~de~juat i~ cling to ~ pr9grarns? Mr. CAVANAGH. ]?~r this ,~ ~` ax~i? Mrs. DWY~R. For ~he enti ~ ~ ñtry, * ~: Mr. CAVANAGIT. I ~ot~e t ~ ~ d~ti~guiA~ic~yor of Ne~vark yes- terday * used a figure o~. $1 ~ ion, whi~çli ~ I think is ~ a poin~ of beginning. ~ . ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ , L~t me put it t1~t way ~ w tbat that pounds ~s though all I am doing is talking ~ibo~t 4 e~ wi~lih ~x~y haiid out But a~s Amer jeans, we don't seemj to `bliu ~ ot~ ~ eye ati~be, Def~iise Establishment spending something `ike . $65 ~ ~ rightfully, so, I am sure- and the amount of i~ioney, s , tLoi~ space, ~ so on. ~ r thin1~ until such time as we mob~liz~ the e ~ ds q~ i~e~ó~p~ces to attack the great- est domestic problem~ o~ on ~ ~ ~ the ~ unfb~iished business being those urban problem~, that ~ ~ ~ ~ ~ i~ot~ ~ to make the kind of dent that we really ~ have to ~nak ~. ~ ~ nd. ~ ~by wI~en the mayor. of Newark said $10 bi111on~ I a ~ ~ ~ ~ at ~oi~ii4 be a good I~eginni~i~. Mrs. DWYER, Do you thi k * could :af~Q~d the program this year with the war in Vie1~ñai~ an ~ , ~ commi~t~i~ts~ around the world? Mr. CAvA~o~i..~ Y~s. I t i .1~ t i~dI~ióu1~t, but `we do have the kind of economy th~t wil~ su~tai ot `our eoi~i~t~nents internationally as well as those thmgs~ th~tt h v t ` ` be done ~domestically. I thinl~ we have the kind o~ .via4~ility a ~i :tion to `be able to come up with `the kind of formula th~t ~ill h i~t~ the our cornmitments are honored internationally, but at ~he 5 ~ ime that we honor our ` commitments to the people that a~re ~iere .~ ~i me. AIId. we do. have commitments to `these people, whe~hei~ the ~ in the cities `or on the farms~ . Mrs. Dwn~R. M~yOi~ Ca a~ h, you testified that the ~atiónal League of Cities ançl tl~e U ~. ~onf~ence of Mayors did not want to take a position .`o'i~ t~ie posit 0 ~ ti~ demonstration city' `with respect to the creation, of ne* to ~ `Do you' hia~ve a personal position on that matter ? Ii~ ot~h~ , ~ , ~will. the o~eation of new connnuAi- ties in the Detroit' rêa hel ` ` r ar~i `this program? PAGENO="0222" 216 DEMdN~RATION CIPIES AND U1~BAN ~ DEVELOPMEWI' Mr. OAVANIMIII. I think the pro1ifei~41on ~ of ~.e* towns does not help any oity~ But I think the idea ~hifi~d~the new towns legislation is the fact th~tt they are goingtbô~iir anflckt~ty in an ordinary plan and development. I have some personal opithons which I would be most happy to express. A couple ~ are-and I ~was criticized last year for expressing them in front of this committee, I do not mean by the members of the committe, bt~t there was a recent article in Haqer's on this point, and they cited some testimony that I gave in response,. I think, to Mr~ Ashley's question. I don't~ think that those new towns should receive. any greater Federal assist4nce or aid than the central cities, No. 1. * ~And I think, No. 2, that b~th the National League of Cities and the ~[I.S. Confere~ice of' Ma,yorsja.re developing some rather interesting althrnatives to new town legh~lation. And by that I am speaking about the idea of cities witl'iin cil~ies, the new city within the old city, the new city within the old town, such as we are trying to do in the great Forest Park area in Detroit, which is literally creating a suburb inside the city. Now, this is one reason why `both the co~iference of mayors and the National League of Cities has asked for fu*ther opportunity to submit comments in relation to this. But those ar~ some of my own personal feelings about new towfls. 1 Mr. BARRETr~ The time of the gentlewo4ian has expired. Mr. Moorhead ? . ` I Mr. MOORHEAD. Thank yOu, Mr. ~h~irm~n. Mr. Mayor, I want to commend you again for your excellent state- ment and for your eloquent words about l~uman and social rene~~al. I think that is the most dramatic statement' in support of this legi la- tion that hasbeen made before this committee. Yesterday, Mayor Addonizio, of Newar1~, recognizing that for he action programs we have to limit the numl~er of cities involved, s g- gested, however that we increase the planning funds so that all ci es desiring to' do sdme planning of the type ~o4templated by this legis a- tion could do s& ` Would you agree with M~ayor Addonizio? Mr. OAVANMth. Yes, Mr. Moorhead ; I w4uld. Mr. MOORHEAD. I notice in your statement in a couple of places t at you refer toour efforts in space, and the w~Uk in space, and so for h. Would you approve a proposed amendment that would direct t e Secretary of Housing and Urban Developiiient to set up a crash e- search program, . systems research, for devel~ping new techniques f r bringing together in a comprehensive system existing techniques f i mass transportation ? ~ Mr. CAVANAGH. Yes, Mr. Congressman ; articularly if you add d some additional' funding to it. I would not want to see it done out f what I consider ~o be limited funding sugge ted here. But I think it is most important that we adopt some of the o-called space technolo y' to the job of soFving urban problems. I t ~ ink the. cities have be II woefully deficient, mainly because of a ]ack of moi~ey, in utilizi g' many of the advances in technology which, l~t's say, oui Defense ID - partment has utilized, and applying them to the problems of the citie particiiilarly in the area of police and law e~forcenie.nt, crime. An ~ve in Detroit at the present time are atte~npting to develop wit Wayne State University this very same thi~ig a new demoristrat.io project, using some of the great amount of r search, principally Fe -, PAGENO="0223" 1~MO~STI~ATION dPI ND IYEI3AN7 DEV~1LO?MENT it th~ jNa~. Lall cities. 217 PAGENO="0224" ~y the large cities with the ~` saying is that if there re, let us then select those ye there are 15 medium~sz~d `~ select them on the s~ me riteria, have you and y ; points, rather-actu vu factor in which it S rements that the Secret committee the other on is passed, if it is pas. he guidelines, so to spe in preparing a submiss ur city or the other c criteria, these guidelii sufficiently clear, and on with these particu ill not faceS any proble ur ily ys .ry ay ed.. k, on by. do ar i~ace any problems. P at I staffs that might be 1 .ss t Fedç~L agencies we ld tiie( criteria, at least a I ~r: tO me and to our st if ~ ~ . ~by the city Qf Detr it ~ :tWQ .~porbIons of t is that would have to sh w [oush:ip to the total co Q~y eifectuponthe tot~l ically to one geographic 1 Lt I wo~d like t~. tell t: Ce, that .1 am i~eally ii d~r1~UJ5 job before t ~4; Mayor Cav~nagh f 218 D~MO~4STUA~TION crri~ *AND UR:.AN DEVELOPMEWT which I don't-~-of exclusively selecting on~ ability to plan most immediately. All I a$ let's say, five major big cities tobe selected. cities on a first~come, first-served basis. I cities and if th~re are 25 smaliør cities, le basis. Mr. ST `G~U$tIN. When considering the ~staif gone ov~ the seven po~,ts-~r. eig there are. sevenlhere, but there ~ an tinkni that the program meet such additional requ may establish, and the Secretary told thi that these will be prepared after the legislat And, therefore, we are left with section 4,. ¾ that you and yotir staff wotild have to foilo~4 to the Secretary for consideration for y~ Have you and your staff gone ever these3 Mr. Mayor? ~nd if so; do you find thei4 you feel that~.~ou . can pi~pare a submis$ guideliiies in~inüid ~ . Mr. OAVANAG*. Y~s ; we do. Mr. ST GERMiiN. ~ fl~ you feel that you onit? . ., Mr. OAVANMIJ~J. I don't think that we. wilJ is not to say that maybe a smaller city wit] sophisticated. as far as th~: relationship wit face some kind of a problem. ~ But I thini recollect readi~t~ them, we~'e suiiliiciently c~ to beahle to~pre~$area~nd.subfli~t afl appIicaU~ Mr. .`S'~' ~ .And is it: ~omtempiat to subirnit a p1.1* that ~onld,eo~r aporti~ city, orhow~tensive wouid'thal~ be? Mr. CAVANA~t. It would cover a portion. that in treating that portion it 1u~d a relat munity, and that it ~~~idr have ~ some saiul community, e~r~n though it was confined pIiy~ (is area. Mr. S~ GERMA~N. My time has expired, b e gentleman, in ~ case . J don't get another chai pressed by his tstimony. He is doing a ~ e committee. ~ Mr. `CAVANAaB. Thank you. Mr. BARRETT. Mr. Gonzalez? Mr. GONZALEZ. I would like to complime appearing before us. I notice on page 3 what I consider a significant thought on yoi r part there about the desire to make sure that this program does ni t deplete or supplanf rather than supplement e~isting Federal program. And in that section, I might say that I expressed this the other da' to Dr. Weaver. I am very app~ehensive about the public housin program. I notiCe consistently That nobod~rIhaS any. reference to th public housing program. And I am so a±r~4d that the creation o this new Department has tended to downgr~de public housing. D) you feel that public housing is still a vitall program that could be utilized in this move to secure an upgrading in urban life? r PAGENO="0225" DEMONSTRATIQN dPI ~ D UEBAN :~EVELOPMENT 219 Mr. CAVANAçI~. In res~ons ~ tø your qu~stion~~ Congressman Gon~ zalez, I would say ~Ve~y ~mp ti~ ily, yes, public housing is a most essential,. most vital t~ol in t e r~ haracterization. of our cities 1ar~e and small. Last yeah i~i m aj~ earance before this committee in relation to. the Hotisi~g ~nd b nizatioz~A~ct of 1965 I understood this committee and th~ Congr s t increase the number of authorized public housing units. ~è * ~ ~ under co~astruction at the present time~ I think, about i,50ô ne ~* lic housing uiiits principally to be used by senior citizensat ~catt r 4 ites throughout the community, and we need far more. ~ tl~ink t ei~ are some ~w concepts in public housing that have `to ~e ~tdop ~d . y these oitie~. The idea of the old institutionalized or g~iettoize t~ e of public housing, I don~ think is a very viable tool i~ th a ~ n~ which we are supposed to use. ~ If we use public housing in a ra e~ maginative sort of way and sjjread it throughout the neighbcrho s nd make it architecturally designed tocomplement th~ n~igI~bor ~ d~ then I think it is a most important tool, and I agree witl~ you th .t i1~ hould be emphasized. Mr. GONZALEZ. I ` ~L1T~i quit ~ it ~ ëon~erned, because I believe a tendency has s~t in ~hioh a ~ ~t to a sh~(ttlifig to one side of. public housing, and last year ~ thi ~ e contemplathd what I consider an imaginative approac~L o~ goi ~ tO ~rivate . dwelling through public housing criteria. I ~as just ii ering if this ueW program would not actually mean the denfiise of p * ii housing. Mr. Chairman, I y~el4 the la ce of my time to Mr. St Germain if he has any more question~ he ui like to ask. . ~[r. Sr G]~iP~(AIN. ~Uhi~n1~ 0 ~ r. Gonzalez. Mr.Mayor.-~- . ~ Mr. , BARRm. Ma~ I info t ~ gentleman that you have a minute and a half. ~ Mr. S~ GI~R~XA~. ~h~nk `~ , r. Chairmaii. ,. Mr. Mayor,. .amon~ the st t U bjectives in the act, on th~ one hand wehave a suggestion th~tne co cepts of architecture will be utilized,, and also that thetype ~4' con t. ion of materials utilized would be of sucha nature as't~ ~du~ c' ~ ~. And yet on the other hand, they say' nevertheless. we..wis~i t~ .pr ~ r~ tb~E~ old , architecture, the historical, aspeot, and what Mvê you A d I wonder if you have g~ven any thought `to this, i~nd whethi r ot you have cometo a' deèision on it cc~uclusion as to wl±e her thig c ~i edone, to these whicli tire iu my mini, are i~ juxt~apQs1f~i0n And a wondering wha~t your opinion is oxi~ this matter. ~`, ` ~. ~ . , Mr. CA~TANAGH. Itthink ` 1~ t t can be done. We ` have attempted in our city tI~rot~h t~e histô i a~ commissior~, and the historical society, working ~vith th~ ~ Ame i ~ Xnstitttte of ~&r~itects chapter, plus our city planning cómiuissi , identify every building in the corn- munity that had an~ ar~hit~ t~ 1 of historic~il significance, aiid put it on a sort of an exe~npt list~ ~ pt. fro~n redevelopment, `or the bull- dozer, a~d hopefull~ d~vel~ so e rehabilitation in relations to sozne of these buildings. 1 There ~ ~ interesting book that has just been published comhig ` c~ut' ~pon~ r~i by, under the auspices. of the tX.S.' Conference of May~rs, .call~ "~ he Heritage So Eich." There are a' few picture~ in it that ~ di gi~ e ~rith flut it is a most interesting bc~ok. Th~ show dtfr Øld ct ` 1~ial1 ~s ~ia~ng sOme grçat architectural b&~uty, whiëh it h~d not ~i other thaii that, the book is most 6O-878-~66-pt ir~45 ~ PAGENO="0226" . ~ 220 DEMONSThATION CITIES AND UR$AN DEVELOPMENT interesting, an~d addresses itself to this j~oint that you ~ make, r. Congressman. ~ Mr. ST GERMAIN. Following up my pr~vious question, as to our contemplated $an for the city of Detroit, have yGu ~ formulate or come to a cost~ a projected coSt for what your particular prog am would cost forthe city of Detroit under this~act ~ Mr. CAVANAGH. Well, the cost of our original model city pro~r m, which was submitted last fail before thisi itiessage of the Presid nt, was about $~.5 billion. Mr. ST GEiiMAIN. Billion? Mr. CAVANAGH. Yes ; $2.5 billion. Of ~ourse that would be ro- gramed over a period of 5 years. And I t~uink that the new prop sal would not be sttbstantially different from th~t. ** Mr. S~r GEE1UIN. Tell me, Mi~. Mayor, w4uld that b~ for everyth ng or just the Federal share ? Mr. OAVANA~i}I. That is the total sharp, including local con ri~ `butions. ~ ~ . . ~ Mr. ST GERMAIN. I wonder if you couh~ submit to us. later on or the record what the Federal cost would be ? ~ Mr. C~vANAaH. Yes ; I would be most happy to. Mr. ST GERMAIN. Thank you, Mr. Chairm~an. ~ (The information follows :) * ~ INrOEMATION AItOUT THE FEDERAL OOST o~' DE?r141T's Moim~ Crrr PROPOSAL ` The city of DetT~oit submitted a proposal to thel Department of Housing a d Urban Development in November of 1965 before Th$ldent Johnson's city dem a- stration proposal ~as made public. Our proposaI~ for the city of Detroit ill need to be reworked in line with these guidelines, skid we are now in the proc ss : of doing so. We are anxious to give the greatest~ emphasis in our proposal to, social renewal and the needs of neighborhoods. Our original proposal would call for a total expe~tditure of $982,036,000. `P . is total was broken down roughly as follows : $550 mfllion fOr' water and sewer I - provements, $204' million for freeway constructiu'~ $50 million for industr al renewal, $27 millioi~ for a cultural center, $38 milli~n for various park projec s, $8.9 million for the construction and initial opera4oa ol family centers, and. 9 million for various çlemonstration grants mcluding~ central business district i provements, reglona~l libraries, `strip co~mereial'c~e1ôp~ent, rapid transit, tr f- fic control, aIId tbè~application uf scietitific technol~gy tö'the solution' of urb n problems. These t4tal expenditure Ilgures do no1~ include the school syste s educational proposals, and I must emphaslne that they do not represent t ,e amount of Federal ~ contribution we a~e seeking f4r the city of Detroit. T e amount of the Federal contribution would, as yoii~ know, vary for each of t e projects involved iii our proposal according to existiflg grant-in-aid formulas. Again, I want to `emphasize that I have described our preliminary propos .1, submitted to HUD last November and that we are npw in the process of revisi g the proposal so that it will conform to the guidelines ~stablisbed by the President s message and the requirements of the legislation befor~ you today. Mr. BARimrr. The gentleman's time has expired. Mr. Reuss? ~ . . Mr. Th~uss. TIi~nk you, Mr. Chairman. I want to add r~iy thanks to those of my co eagues for your.marve - ous testimony. And most of the questions I wanted to ask have bee asked, so I will be~brief. I am glad Mrs. Dwyer brought up the que~tion of new towns. An I was glad to hear you say in response to Mrs. Dwyer's question tha the Conference of Mayors was working on tl~e problem and it wouh~ have a position. I call your attention to the fact that Secreta PAGENO="0227" DEMONSTR~ ~O?MENT 221~ isit not ~n appearan PAGENO="0228" 222 DEMO~TRAPION C1TIE~ AND U4~N bEVELOPMENT *demonstratioi~ concepts in the Federal G~Brnment. That is w y I think this program is so important. I ui~e your consideration f it~ Mr. BARRI~Pr. Thank you, Mr. Mayor. Good morning, Mr. Lindsay. We are certainly glad to have our forn~er colleague here, and uch a distingnished mayor from the city of New York. We will give the opportunity to the dea~n of the New York del ga- tion on this committee to introduce the major of the city of New Y rk. And I am goi~ig to recognize ~ow Mr. F~io, who is the dean of the New York del~gation. Mr. FTNO. Mr. Chairman, it is my dist net pleasure and hono to present to this committee a former distingiished Member of Con ess, who, because of his outstanding ability, ke~n knowledge, and en i ht- ening and forcible crusade last year, becan~e the mayor of the grea est city in the world. t~uririg his 7 years in Congre~s he distin~'nished himself as an a le, outstanding, and dedicated legislator. Our loss in Washington as certainly a tremendous gain for the people ~f the city of New Yor And I am indeed happy to present toithis committee our h me mayor of the cilly of New York, John Linds~y. Mr. BARRETP., Mr. Mayor; as I am quite sjire you know, we have ne of your former ~ofleagues here who is withjthe Republican delegat on with the State df New Jersey. Mr. Widnall, would you like to welcome t~ie mayor? Mr. WIDNALL. Mr. Chairman, we have more deans here than e have in a university. John, we are very pleased to have you here before us today and ee you back in Washington, although I know itis for a very brief appe r- anne. We do miss you in the Congress. Y~ou made a great contri u- tion there. * And we are very pleased that ~ou have seen fit to bri g your talent and~your grea~t l~adërship to tl~e city of New York. Mr. LINDSAT. Thank you. Mr. BARRETT. Mayor, I note that you h~ire an associate with y u this morning. Would you introduce him for the record so that e may ask questions of him? STATEJV[ENT OP HON. JOHN V. LINDSAY, MAYOR OP NEW YO K CITY; ACCOMPANIED BY EDWARD J. L9GUE, CHAIRMAN, T K FORCE ON ROUSING Mr. LINDSAT. ~First of all, I should like i4 thank you and your c 1- leagues on the s~bcornmitte~ for giving me th~is chance to appear befo you. I And as a personal note, I wish to say that~ it is a great statisfacti n to me to be back in the halls of Congress. ~ look upon it from a dis- tance of 235 miles with some nostalgia from time to time. And it is good to be back. And I should like to thank all members of the su - committee for their kindness in being here this morning. And, f course, to the dean of the New York delega4ion on the minority sid Mr. Fino, for his kind intrckluction, and MrJWidnall, the dean of ti ~ New Jersey delegation on the minority side ~or his kind introductio I appreciate it very much. * I have with m~ Mr. Ed Logue, who is knojsrn to many of you. M. Logiie is the chah'man of the task force th~t I put together on t e PAGENO="0229" 1~EVELOPMENT 223 approa~eh at the conoh~sio~ if that is your )ntained in the PAGENO="0230" 224 DEMONSTRATION CITIE:S AND UR~AN DEVELOPMENT a most important beginning-it views ultimately all these programs as working toward the goal of improvement of a physical environment combined with the promise of a new life fbr its residents. The adoption of the legislation before u~ today should enable an in~ teraction of programs which has been sadjy lacking. We at the local level, could s~ect blighted sections as de*ionstration areas in which tr~1y integrated programs could be mount4d for the first time. In the President's words, this effort must be "1a~ge in scope, more compre- hensive, more concentrated than any that h~ gone before." Physical renewal would emphasize rehabilitation and conservation, the preservati on and indeed rejuvenation `of exi sting neighborhoods. Demolition, as a tool, would b~ used where existing structures are beyond repair. housing would be provide~ within the financial reach of those displaced. Space would be pr~v~ded for schools, libraries, parks and p]~ygrounds, health clinics, and ~ther community facilities. ~ This would be accompanied by intensi4e programs for social re- newal : preschool programs for the very y~ung ; health assistance to eliminate dietary deficiencies ; welfare guidance aimed at improved housekeeping a~d better budgeting ; and, ~most important, to those who have been hampered, for one reason Or another, from attaining meaningful employment. Here lies the capstone of the social renewal effort and, for that matter, the entire progr~rn. The completion of new buildings and facilities should be accompani~ed by the emergence of he neighborhoods' residents as self-supporting citizens able to siist in tlie~r revitalized neighborhood and to cont4bute constructively to he growth of our sobiety. ~ ~ ~ Tfhe legislatioh, quite properly, places t1~e principal responsibiFty for this physic&I and social change on l~4l government. In doi g so, it provides an important stithulus for i4nproved coordination y city governments. Recognizing that respon4ibility for administrati n of these programs is usually divided at the loéal level, the President Ii s recommended that the demonstration should be managed in ea h demonstration city by a single authority. with adequate powers to ca out and coordinate all phases of the progrant. We are now moving o streamline the structure and operations of 4~overnment in New Yo k City to enable us to meet this challenge. ~ Experience has taught us some of the comIl~xities and problems f large-scale Federal aid progra~mS. Progr~s for physical revit~l'- zation, particularly urban renewal a~d publib housing, have too of suffered from inadequate Federal funding ~nd a lack of long-te financial commitment. Above all, lack of ccx4rdination in administr - tion at both Federal and local levels has redu~ed the impact that so e of the most farsighted programs might have~attained. It is my hope that in launching this new effort, ~ the Congress wi I make very effort to insure that difficulties d~f administration do n handicap this program. At the same time, J$cause the success of th demonstration cities program will depend o4 the effectiveness of th numerous underlying programs, I hope tha1~ th~ Congress will tak this opportunity to remove some of thern mo4t~grievous impedimen from existing urban ptogranis. My princi~i4l reservations about th pronosed legislation will iflusfrate these conceits. The President's message and budget call for $2.~ billion to be mad ~vai1ab1e over a 5-year period begilming in fi~al 1968. In fiscal 1967 PAGENO="0231" DEMONSTEATION C~TIE a total of demonstration.. These sums w participate in f of cities thai are C0fl ms will PAGENO="0232" 226 ~EMdNSThAPrON CITIEs AND UItBAN DEVELOPMENT great variety of federally aided local ~programs. Although these many progra~ns will constitute the comp~nents of the demonstration program, it is~ not necessary that the dem~nstratibn grant formula be tied to the computation of each individual program. I can see a haz- ard for communities, both large and small,not only in calculating these local shares, but, more importantly, in obtaining commitments for them from the many Federal agencies involved. Let me suggest an alternative approach that would be considerably simpler and faster. A community would be given the option of waiv- ing available Federal grants by submitting a single ~veraIl demonstra-. tion application which, if approved, woul4 receive a Federal grant of 90 percent of the total cost. The city w4uld have then to negotiate with only one ~`ederal agency, permittin~ a rapid start and prompt foflowthrough. The 90-percent figure is s~mewhat less than I under- stand is expecthd to be the average grant tinder the complicated for- mula in the legislation. Another alternative with similar advantages could require that a community seek all relevant grants that could be obtained quickly from Federal agencies, and then seek 90-percent Federal assistance for carrying out the rest of the demonstrati~n, as approved by the new Department. An effective demonstration cities progra4i will quick]~ expand and accelerate the d~m~nd for Federal funds 4or existin~ aid programs, especially urbaii~renewal, publi~housing, an~l community action. This will restrict the amount of fimds availabh~ to those cities which are not conducting demonstrations whileS, at thk same tirnt3, it is likely to heighten interest in and demand for theses established programs by these same nonparticipating cities. As we are all aware, the demana for urban renewal and community action pr~grams, in particular, far exceeds the supply. According to the best information availa4de to us, more than $800 million of urban renewal applications are n4w pending with the new Department. This enomious backlog shoui4l be funded without fur- ther delay. If these urban renewal projects ~uld move forward in the hundreds of cities and towns where they are ~1ocated th~ would make a substantial im~act on housing and the ph~sical condition of those cities. I would hope that early in this se~ion of the Congress you would consider removing the annual limitati~ns on the urban renewal program, restoring it to the cpnti~act authority approach and making it available for ~ities which need it as soon a~ they effectively demon- strate their needs. The informal "rationing~" w'hich has existed for many years has been a most important rea~oi~ *h~ urban renewal h~s not achieved its f~ill potential. . In the past, ir~ urba.n renewal and other pr~ams, quotas have been set to limit the amount of aid given to NewlYork Oity. While the concern of others that New York not gobbl~ up entire programs is understandable, it: seems fairer to me that th~ Congress provide pro- grams as large as the problems-and in the dase of New York City, the problems are of unparalleled magnitude. It might be useful if I sketched for you the dimensions of our prob- lem. We have a population of 8 million people; 24 percent of our city's 2M55.000 households have an annual inco4n~under $3,000 making them eligible for~ consideration for povert program activities; PAGENO="0233" DEMONSTEATION CI~IES N URBAN DEVELOPMENT 227 1',~OO;OOO people live in t es~ pov ~ ty~sti~icken households. New York City has ~58,OOO h~iisi g ~tnit~ ~ ~ hici ~~QOQ are to a sigthficant d~gr~e~ ~ ~tibstandard~ ~ ~ 0 er~ ha1~ a ~ ~ illicrn~ .~&oj~ie received various forms of public we1fari~ at an a~i ~ ~ eost~tO th~ Federal, States ~thd ioc,al governments of mo et1~an I~ .~ . b~illo~i~d~Uars; ~ If Manhattaxi, Brook yn~ art * Bronz were separate cities, they could constitute three o tI~ fi ~ it~ gest cities in the Nation and you would not hesitate to *ro+ide ~ i~ hem accordingly. The blighted areas of each ~ :~f out' orqugh * i~ tragically large and unhappily famous-central Harle ~ , ~nd st arlem, th~ lower East Side in Manhattan ; Bedford-S uy~esa t ~ ownsville, and East New York in Brooklyn ; the south B on~ an o~i h Jamaioa. . A massive d~iminstra~tiox~ pr ~ ~ would be a major impetus to our ~ efforts to reititalize the~~ areas. *i~ President appears to contemplate ~: demoti~t~ation ~ projects in*o~Evi ~ ~ ~ percemt of the total population of a city. . Smeha pro~an~;ad~q ~ ly funded, woiildhave a profound impact on Our city, th4ug1~ it ~ ~ he far short of reaching all the areas of critical need. ~ ~ I ~ ~ ` ~ ~ ~ It~ would be ~ :disast~r ~r t~ rai~ of Ne~r Yorkers if, after all the publicit~ we were t~ lear~ u denly that New York City would again be restricted to ~ rëiati~e y odest program. The President's uiessag~ refera to p~o~ra4nsi~ t~ Th~g~st citià that would pravide decent housin~ for a~pr~xin~M ej 5,t~OO families, rehabilitate other mar~iiutI l*~usimg ~1~~O;~YO p ~ ~ p1 ~ , aiid ~t~r~ive a total of 35,000 units foi~ 100,000 peo~i~:~ i~thisw ~ ~ t betakeii ~s. a aimit oiia demonstra' tioñ for New Yo~kC~ty, it b 1 involve little more than 1 percent of our p9pulation and~lit~le ~ e an 1 percent of our housing stock~ ~. Sueh~alithitaitioaii~ou~d b ~ ~ u utright dis~rithination againSt our city ~sGlelybec~ause of itS size. It would n'iea~ that *a vast number of the pcthr, the badly l~oused, ~ d he socially disadvantaged of New York would be denied th~ op ~ r~ nity to participate in this and other i~'ecleta.i programsnié~ly b~ a s they live in the largest city in ~he Natk~n, ~ ~ . ~ ~ ~ ~ ~ ~ ~ , ~ I ~hôp~ th~tyou w~1~hn~ks 1 ai~ `ii the legislation and in the commit- tee report that ~h~se/i1i*stm~a I ~ in~ the Pr~ident's message ~re riot to b~ tak~nas ~ppi~rin/g a ceili f rN~w rorkeity. I * ~ `I~h'& d~monstrat~to~oit~esp ~ g rn mustoffer solutions to New York on the same relative scale as ~ e~i are offered to any other emmutiity in this Nation. W~ sl~ou1d ot be put in: the position of choosing Harl~1u wer: Be~fo~d-~tuy s~ t or Bedford-Stuyvesant over the south Bron*. ~ it niijSt be c ~ r hat the largest cities, certainly New York,rnay h~w~ mçr~ ti~n o e de onstration area. ~ Our very si~ ~ofr~pbi~tnds o r *roblems ; it does not ~implify them. The ~ Presidenthas $c~mm ~ ~ d~ to Congress that it, ~`s$ in motion forces of change 4n .g~r~t ur n reas." But if we are to demonstrate by this legislation t~hat) pov1 ~ and blight can be overcome by com~ prehensive, concent$ted pi~o r~ s, th~n we cannot ignore the areas* of greatest ttrb~n ~ ,~ dt~ this ~ d~mdftstration to make its point, it mUst~ ~Lpf~ly drath~t~ ~and appareht solutions for the vast sluth~ of ~ . ~ ~ ~ . ~ *I:1! the~demoi~istri~tio~i cit e ~ ogram is to accomplish this goal, it mustbegiv~ a :~~t1y~incr s~ ~ appropriation. We are all aware of the difficult fiscal pressure ~i the ~Federai Go~rernment. The Con- PAGENO="0234" 228 DEMONSTRATION CITIES AND RBA~ DEVELOPME~ gress is being asked to provide the fun4ls that are necessary to finance the war in Vietnam. But it must also provide the funds for a critical domestic program which is needed to create a measure of stability and a better life in our own urban centers. We now have two study groups at work in New York City prep paring comprehensive programs of p1~iysical and human renewal. And we are preparing our response to t.Ije specifices of the demonstra- tion cities a~pproach of concentration 4nd coordination. EIo~ ever, there is so much to do, and our accumiila4ion of urban ills is so great- over so many years, that it becomes ever~more clear that we must look to the Federal Government for assistanice on a nondiscriminatory basis. We should not be prejudiced simply because our city is big and our problems proportionately larger. ~il the more reason to tackle them. For these are the new years of the city. The city must be at long last recognized. The city in this co~ntry can no longer be short- changed in the establishment of national priorities and needs. We all recognize that the sense of d4spair in slum and blighted areas of New York and other cities, in ~he midst of rising national affluence, has ~Ied to alienation from soci4ty on the part of many, to total apathy ~or others, and to a seriou~ threat of violence for still others. ~ ~ But when one walks the streets of ou* city he sees another, very different, side of the slum. The 1-larlem. residents who are at work on the dramatic project rehabilitating buildings on 114th Street express a deep sense of the pride in their own accomplishment. They seek and are ready for increasing responsibility and expending opportunity. ~ In the Bedford-Stuyvesant section of B~rooklyn, the determination of homeowners and tenants to improve tli4eir neighborhood, over the most desperate odds, deserves our deep re~tpect and our wholehearted support. We cannot afford the loss of thi~ impetus. We will continue to hear cries of despaii~ and anger from the tragic ghettos of our cities. But I believe that the loudest voices cry out for the resources, the programs and the training for self-approvement. It is my hope that this legislation will lead us in that direction. I would hope that this committee and the Congress would support this proposal, not out of a sense of fear, but out of a profound feeling of hope. ~ The stirring in the troubled areas of c~ur great cities should be regarded as an opportunity for this Natio~i. We can reach out our hand in partnership. We have learned th~t the helping hand of the dole is not the answer. This bill would m~ke it possible for people to help themselves to make their own w$y in the world. We in New York City will await its early passage, determined to demon- strate what it can mean to the great cities of the North. Thank you, Mr. Chairman. Mr. BARRETT. Thank you, Mr. Mayor. Mayor Lindsay, I certainly want to thai~k you on behalf of the subcommittee for an excellent and informa4ive statement. Mr. Mayor, I am going to ask you the sa4ne question that I asked Mayor Cavanagh. Some people seem to hav~a fear that the Federal coordinator which the bill would set up for teach demonstration city program would be some sort of a Federal ditetator-there are two or PAGENO="0235" Pei Mr undel DEMON~SThATIO ~VELOPMENT PAGENO="0236" 2~3O DEMONS~EAPIOW CITIES AND .U~RB4N DE~ELQ~L~M~ Mr. BARRETT. My time has e~pi~ed. Mr. Widxialj?. ., ~ ~ Mr WmNALL ~ Thank ycu, Mr Chairman4 . Mr. Mayor, `I ~want to coin~te~1 you for ~ emphath~hat you h ye placed on slum c~.earance and rn ~iding the pfrr and lcw-mcome peo le m New York City Because ~t1izs is ~a majo~i~ concern and should be . ~ Now, on Mo~Iay Qf this week Sec~a~ry ~Weaver admitted that he urban. renewal program and oth~r vast Fe4~rai urban programs h d not lived up to their original promise. With that, I agree. A d Secretary Weaver is the first high administi~ation official who has e er admitted this obviQus fact. . R4d these b~Jiibns been allocated or the relief of trii~iy low-ineome slums an~~g~ettos during the past 0 years, perhaps there would not have been tfr Watts or the potent ai Watts here in tjijseoun try. . ~ ~ . ~ ~ ~ . ~ . The statemei4~ of intemtdn H R 12~4i a4 flue, but largely withô t legal ~uppoi~t. ~ . ~ ~ I Would y~ support an amendment to th4 bill that would prohi it outright contir~ued Federal urbaxi renewal funds for construction f iuxury type $~S00~per-month pe~ithouses ai~d materially restrict t e commercial-that in the last 5 .yeairs has e4ten up 50 percent of t e urban rene~wal program ? J~ifty percent.. &nd that is a higher figu ~ than Secretary Weaver admitted to, but thes4 are figures obtained fro the Eeferen~e Service of the Libra~ry of CQng~ess. I think if we are to do the job with th~mphasis that you ha e placed on it for ~he l~w-iiw~n~ people, aMjui clearing the slums, $e have certainly g~$~ to :t~ do~ii 41~}~~ use of uiiJ~ n renewal funds more ~o that ptirpos~ tl~ to permit the absolute l~way we have had in t~e past. ~ ~ :~ Mr LINDSAY Mr Widuall, I think my ~nswer to that will hai~e to be a careful one. , In New York City graduaflytite city has ~otten away from the u e of any Federal moneys in urb~ia renewal totb~i .. lId high-rent housm They have iiad i~ the past a lj~t of hoITibie 4aimpies of where this h s happened, And; as you k~.w full ~eJi, s~me of the work we d d on title I about ftnd diselosureswere ~a r~i&t ofthat. I don't thi Federal . money éught to be tise4 to~ iu~iid. ~Enxury housing. And I support the purpbse of such an a~thendment i~i principle that you ha e just outlined. . ~ ~ ~ ~ ~ However, you can. bead into other troubl4if you should write th s into a flat natioii~al law, I ~oulcL think What you need in laws f this kind is maximum flexibility And som~tames if you are attemp ing, to integrate a neighborhood racially ~ aMI economically you c ~ n head into diffi~nlty if you write flat statem4nts in a national statu e which ma~r c~me'baøkto haunt you. ~ ~ ~ ~ ~ ~ As you know, we have had to uitroduc~ fle~ibility in public housi g in order to get a~way from some of the econ4ue rigidities which we e put in there. ~ ~ I ~ So I would h6s~tate before I wiuld eiidorse~flat1y an introduction y way of national law of a measure which m ~rmciple no one could against, but in practice, if you put it into ~lie bill, I can see mig t create some difficnlties. Mr. WIDrcALL. I think your reaction is a .~ust one, and certainly a sound comment on the proposal that I make. PAGENO="0237" DEM0NST~A~ON éI~ t. S iND URBAN DEV~LOPMRNT 231 * I am te~Hb1~.b~th4rec1~thc we have gotten a*a~t from particu1ar1~r thisome are~s. up with the deterior tio~i of has been used ~n ~ nui Lbet~ of i ~ow, in th~ preivi us testi broad scale uses per ~iitted 1 am afraid that a v ry smal actually slum cleara ce, and be very well utilized un~ler t about i to go bui i: dot 1~ by t1~ 1~n~t ~xporience and the ~way ~i~n~l pu~pose of urban reuewal, I thinkthat ~ce have not e~eukept ities in t)~ie way that urban rene~al ~es. ~ ~ ~ b~th~ ~i~&'Or~bf D~trdit,wthh ti* the cities demOnstratiOn ~rc~et~t I eentage of this would be~used ~?or ~ h~u~hig. And I thiuk it c~iild oad scope p~mitted ü~der the city U I pared to give we are ta re i~the I PAGENO="0238" 232 DEMONS~RATION CITIES AND URB~ So whatever ~4edo here, it will be au imr under the presen~ 1egislatioi~, of course, it is: Mr. Fiwo'. These are resideutia~l areas tha a~ lot is the thi~ governin persor ~1 the only La,t inform ~ Mr. ~ ~onsibihi 7or of DEVELOPMENT rtant demonstration, b ~dnimum. yOU are pointing out? period for what has been suggested that tb~ amount be made available in effect L Mayor? at the funds were distrib*ted to about 60 cities, a bite that you are getting~ toward what you have ity? hat is eorrec it to Mrs. Sullivan ~yOUL~1~ 1 over a6~y4r i~ correct, PAGENO="0239" DEMONSTRA~ION C i S D URBAN DEVELOPMENT 233 i~ that if w ~i1d al ocate PAGENO="0240" ço ce to it. 1- I'll S. II i, e r d ~34 t~E I~kI'1~N :cip~s AND I3~RTh~N' IYEVELO?MENP h II II the five or six critical areas that you point4d out a few~rnoments ~ were to be your first demonstration city ~ro~tra~m. ~ Oan~yqu put apr tag on that ?. . ~ . :~ ~ ~. ~ . . . ~ ~, . M~. ~L~ND~AT. . It iS hard. Mr. Logi~ .~ J .fignrethat if you to one sliver of it~-supposmg you took just iie aspe~, th~ke one ~i that is ~marked ~ ~4 and desigfiathd . ~ii ~ of ~hata~you can ~bme within .t~ ~ speeifi~ations, ~ I ~ ~pp~ ~ ~ . ~ ~ ~ab $300,000 ~ti.the:~thysical sideai~id~$3OO,~OQ I ~ nuiewal. ~ ~ ~ ~ Mr. ASHL1~x~ $300,000 or$8OOinilik~ii~ : Mr. LINDSAY: :.$3ØØ million for physical d ~reiopmént~and `$300 rn lion on human development. ~ Again I sa~r~ 1 hesitate th give y figures, b~cause~it is very difficult to rnaketh~e kinds ~f cash ~stimat But as a rough guess, I would say that might be it f~r just otte poi~ti of the red that you see on that map that I sho~fred you. ~ ~ ~ . ~ ~ Mr. AsHn~t ~ just wantto get clear in mj~ mind your uttitudewi respect to the J1'ederal ~ordiuator. Inasi~$ii&ch as this ~ is th~ m massive Federa1~city program to date, does ~t strike you as unreaso able thitt th~re should be the effort that ha~b~n written into the b to upgrade the l~r~l of coordination both o~i the locaiievei and ce tainly with re~p~ct to the interagency coor~linatiOn and coep~rati that would be essential here in Washington to : make the p.rogra achieve its maximum effectiveness ? . Mr. LI~DsA~. ~o ; I dOn't thiitk it is uMeason~ble. . Again it. d pends on how it is done. . Mr. AS1EELI~Y. Finally, do you tbink with y~&ur experienceas a legi lator that thism~ght not pose a rather diffi4ult .probleii~.? After a who should~ n~e 4he deternthmtion ? Yoi4 say that~y~rn fr~or t optionalapproach. Who shoul4 make th~ a~proa~h a~ th whether not a Federal c~rthnatoE is ne~sSary. in a ~rticuiar locality whé there has been ~p~rov~d a dernon~tratk~n ofbitM~* .progi~n ? . . Shoul it be the mayor, the local community that m~kes ti~iat determinatioi Mr; Ln~SAY. Yes. Mr. ASHLEY. And they caxi ~inde- ` ~ ~ Mr. LINDSAY. ~ie is the man with the respo~ibility ultimately. Mr. ASHLET. fle is not the one that is resp~nsible for the 90 percei of the Federal fuiids, though, is h~ ~ . Mr LINDSAY ~fO But he has the resp~ibility for de~elopin the connnunity n1tiinately~ At~d he carries it*~on his ~houIdersan answers to the plè. ( .. Mr. BARRm~r. ~he time of the gentleman h~~pi~ed.~ Mrs. Dwyer? . Mrs. DWYI~R. Mr. M ayor, it is a great plea~ur~to have you back. I want to compliment you on your very ~ii~ statement, th~d you constructive observations. I would like to ~sk this question. Ho should thecities demonstration program'be chosen ? Mr. LINDSAY. , How should ~ the cities der~ionstratiou program ~ b chO~en? . I : . Mrs. Dwrnt. ]~Iow ~houid the cities de~4~onstratión program b chosen ~ How dç~ you go about choosing th4 cities in the progx~am ~ `Mr. Ln~skt. acwosiiig~the cities inthe program ~ . Mrs. Dwrnt. ~ E~ht. . Mr LINDSAY. Well, I wo~cl choose New Yo~k No.1. ~ Mr~ DwrEi~ A~d what about small cities hike Eiizab~th, how woul you go about on the breakdown on size ; large, medium, and small ~ I PAGENO="0241" CI it today are~ th size ~nd &e( iswhy:J~ electiQrl ~ I a1SQ~ C( great ~ 1~*~ cities spoki A~N~ DEV~TiOPMEN~ co~igrattt1ations on your .Logue. He iyou~ PAGENO="0242" 236 DEMON RATION CITIES AND URB~tN DEVELOPMENT t of representing then I any other mayor wh ~ right to' disagree wit~ some members at th say. But I `was aske ~e conference also. An y, but if the conferenc would be fine with m to yield a little furthei a.. to it. ty id ul it d i~l y 5 0 in Mr. LmnrsAy. Whatever is most conveni~iIt' to the committe I prepared to do.' ~ . Mr. Mou~iri~. Just oiie rno~e ques~ion~ Mr. Chafrman., . Au amendmei~t has `been proposed whicl4wou-id fttIther define a refine `the criteria which would `be used by the Secretary in deternu rng what cities to select for demonstration ~rants And the eriteri we propose would be the following, which ~ am going to ask you comment on whether you favor or propose~ this type of amendme The amendment' would direct * UtJD to cor~sider population densil crime rate, public welfare participation, 4eiinquency rate, povex level, unemployment rate, racial strife, e4ii4ationailevels, health a disease characteristics, , and degree of sub~t*ndard and `dilapidat housing-would~you think that this ameu~nient would be a helpI one for the legi~l4tion ornot. ~ ~ ` ` Mr. LINDSAY. As a general kgnldeline, iil'you' wrote in rotigh c~ term of that kind, I think there would be ncj objection to it at all, a it may be helpf~. You know very well, sii* you have been doing successfully for a long time now, how difficult it is to write in the `sti ute criteria. ` Aiid there are some qtiestioM.as to whether it shou~ be done in a nonstatutory fashion.. But X would think a gener guideline of that kind might be h~ipftd; yes.' ~ Mr. MooESin~p. Thank you,~Mr. Ohairm4. ~ " Mr. BARRETT. `~fr. St Germaiii ~ ~ 4" Mr. S~ GER~N. Thank you, Mr. Chairi$~. ~ ~` I would like t~ make a general observatio4i here We are certaini happy to have tl~e mayor of New York here~Ibecause of his experien~ both as a Member here `and as mayor of this)great city. ` And then ~ had `Mayor Cavanagh, and Mayor Addonizjo~ And we are going 1 have Mayor Tate. , This is all very well, Mr.~Chairman. But we'ha~ perhaps 100 cities in this large category. Mid I think we are forge ting the little citiös. ~ And this brii~gs up `another point. The li$tle cities-the mayors ( these little cities lare not even aware, I am a~iaid, of this legislatio~ And they don't h~ve anyone whom they canjassign to study this ty~ legislation. , ~ ~ Mr. BARRETT. t wonder i~ the gentleman `4111 yield to me. Mr. ST GERMA~N. Certainly. ~. . Mr. BARRETT. The mayor of New York ~ is representing ti T_J-.S. Conference of Mayors. ` Mr. S~ GERMAIN. I read that, Mr. Chairm~. Mr. BARRETT. ~&nd they agree on the'state~ient that you have givex Mr. Mayor, would you say that is correct ~ ~ ` ~ ` Mr. LINDs~r. , 1~ understand that I aim so There is not any~bing official about it. `A~ is a member of t~iat conference ~w~uld have anything that I st4y here. Mr. BAiuu~rr. But they would not disagree~ Mr. LIND$AY.1 am sure that there might conference who ~trould disagree with what ~vhetherI would in my'text be speaking for t I said I didn't think that was my role real wanted to support what I stated, why ` that Mr. BARRErr. May I just ask the gentlema~ 1 1. ) 1 I I PAGENO="0243" 237 DEMONSTRA~IO~ ~I~S ~D URB~ DEVELOPME~ PAGENO="0244" 238 DEA~N 1~ AND UBB~ But I do ho ~or sonie shoti questio. s, Mr. ST GERMAIN. I see that my time ha~ that I might ask him some questi9ns later. Mr. BARBETh We will try to come bt~ek and you will be entitled to some time. Mr. Reuss ? Mr. REUSS. Mayor Lindsay, we ~re proud doing in New York. ~ ~ I think you ino~de a splendid statement. . ~ In one particular matter ~rn ~ge 4, item ~ administrative c~mplexity, and suggesf *h~ structive and simple alteruative ~ giving k~ percent grant rather than adopting the r~th of-what-is-left formula of the administration unanimous consent, Mr. Chairman, that the s of Mayor Lindsay's to the Department of II opi~~ent and get their comments on it. Mr. BARRETT. Without objection it is so o (The information referred to follows:) ~t~w~rk that you a ,.~i~taik about reduci ~) £~e~ethsto me a very co aiitie~ the option of a 9 ~ ç~ohip1icated 80-perce bill. I would like to a ;affpresent that propos )usnig and Urban Devi g 1- Lt k 1 IThE SicicE~vAi~roi~ aousn~a ~ ~ Wa'8hS ~~ZB4N P1WFZOi~&ENT, ~?tôn,~ D.C., March ~1, 1966, ai'~e this opportunity to r ~ by Mayor Lindsay of Ne aon8tration cities progra ~s ~a ëity may receive und its demonstration prograi ~I~at th~ major part of th ~thrities undertaken a~ pa ~4ñdia1 ässistancè availabi ~e~i~ttng Federal grant-F ~ograms-wi1l be utilize !Mcl~, though part of a con ~*` ~sslstance under existin Hon. WILLIAM A. ]~AEBETz ~ ~ Uhai,rman, 1~bcma~ittee on ff&u*Mg, ~ . Banking and U1~'re4io~y Cornt~ft~ee, * ~ Hot~se of Repre8entatine8, Washi~igtoii, D.C. ~ DEAR CONGR]3~SSMAN BARxnv~r : I am pleased to, ~ spend to the suggestions n~iad~to your subCo~hniitt. York for alternative mnthods of fi~áiiclng the d and of computing the amonnt of SU~l~fliental gra~ the demonstration ci~ties legislation to 1~elp carry on. Phe demonst.rath~* cities legi~~tion contemp~1~t~ total Federal cont~1l~utiou to all of the ~pro3ects or of the demonstratiOii progr~m *111 .eoiri~ fr~iii the: under existing Fed~ai graht4n~ai~ pr~ramS. The aid programs-and i!unda. now available for ~ where feasible, In catryiug out projects or activities, prehensive citydemonstration program, are eligible grant-in-aid programs. . . ~ The administration's proposal ties ~tiie athotint 4 available under the demonstration cities legisiati . of non-Federal contributions required to ~ be . made assisted by Federal ~grant-in-a±d. pre~~ths unae~ta~ demonstration program. ~ : ~ ~ ~ The supplem~ental grants provided under th~ ~ de~m will supplement the ~tssist5nce' available uuder tb~S grams to (1) as~ist~tiestn pfóvl4e thetr re~iih~èd or activities whicI~ 4*e part ef the demohstration~pr existing Federal ~ ~ij (~) prey nonfederally assisted projects or activities (includi the type hligible for Foderal assistance t~ndet ~xIst~ grams) undertaken aspart of the deinonstratioxi p~? Mayor Lindsay s~iggèsted; as an alterpative to the, financing the demonstration programs, .g~vjng a demo~ waiving its right to participate in existifig grant-iñ~ the grant fund authorized by the demonstration cities~ of the total cost of all the projects or actIvities cairIeJ stration program. Nl~yor Lindiay's p~o$sái is .ap~u(~ assumptions (1) ~a11j the projects and activities w1~ stration program cani b~ funded out of the specia1-~ authorized by the dethonstration cities legislation ; orf respect to the demoflstration cities, establish a. sin4 ~t the supplemental grant j; to the aggregate amoun 0 all projects or activitie ~th `in connection ~ with th hstrá~iOn cities legislatio] ~e±itting grant-in-aid pro a~to.,of the cost of project ~ *aii~1 are funded unde:, Leffun~i~ to carry out other, ~ projects or activities 0: ~Federal grant-in-aid pro .~niy dmibi'etrátion's method 0: xstvaUon city the option.o: aid programs, and having Legislation cover 90 percent ~ aa~at't of the demon- ~estIy'i~asèd, on one of two .ick are part of a demon- upplemental-grant funds (2~) Congress should, With le fund-several times as PAGENO="0245" PAGENO="0246" ould be provided for proj ~prograrn and financed un id, therefore, tend to pena ran~s ~and offer far less t b~W~Thns the administrath str~, in their demonstrati `existjng Federal grant-in~ ~sed would tend to lose 1 ~fits that can be derived fr .ternative results in increa~ total Federal contribution tration program and could 1 tend to (1) limit the numi )lemental funds, and (2) 1 *ntTatnd, and coordinated, i atlon's formula for financi ~ the amount of supplenien rying out the demonstrat Lindsay. ~BERT~O. WvAy~R, Siecretç~ry. Mr. Mayor. While yo~ with urban transport, ~nd I would like to o~ ~ Mr. Ashley,. Mr. Moo ill read, because it is vei oiiid set up an expedit4 new systems of urbi e directed to: ~the Congress no later th~ ~lopment, and demonstrati i~ that will carry people a: ithout polluting the air, a] iuinlng. The program sh~ tpproval by the Congress; nis of urban transport, f ological, financial, econom ~ua.Uenal leadership to e lee, knd foundations. s~nse of it. And we we w about your propose e it in its general term: I would endorse it an nstructive step forwar is in New York City an [er Lze Lal a's on Lid he ed. to be or se LS& ~al~ on >11 id id ii it 240 DEMONSPRATiON CIPIE~S AND VREj.~ DL~ft~ Under this proposal no additional assistance ~ and activties incl4ded as part of a 4emonstratioi existing grant-~n-~a~id progranie. mt~: fo~uia we~ cities whic~ did utilize existIng grant-in-aid pro~ Federal assistane~ for. a. demonstthtiou pr~gEam I proposal. : . The incentive w*uid be veriystron~ for cities t~ programs aetivitie~ which are . net assisted undur programs ; and ti~i deinenstration programs pr~ desirable balance betweéñ innovation and the hen long experience with these existing programs. In addltioñ, of course, to the extent that this a use of supplemental grant funds to finance the projects. andactivities which are pai't of a demon~ assisted under existing grant-in-aid programs, It Wi of cities which caa~ participateby dri%il~ing off su~ the benefits thatcitri be derive~L~rom a more von~ of existing grant~ii~aid program~ For these reasoi~e we believe that 4he admipist the demonstratlob ~rograifi aethrities ~rid computil grants a city ma~i receive is better duited to cai program than the ~,lternatives sUgg~sted by MayOi Sir~cerely yo~trs, lb I 11 N 7 Mr. Rnuss. I have just one otberquestion~ statement this morning did not have to do know you are intensely . interested in that.. your attention t~ an ame1~dirnent proposed L head, and myse1~and son~ others, which I ~ short, and I thi* se1f~exphLnatLor:Y. This ~ program for rè*earch and dev~iopment o transport. Undir it, the Secretary would I * * * prepare aud submit to the PresIdent au~ January 1, 1967, a draft program for research, dei of new systems of coordinated urban transportati goods within metropolitan areas speedily, safely; ~ in a matter that will cofltrib~te to sound city p aim at breakthroug~ results within 5 years of its shall concern itself with all aspects of new cyst metropolitan areas. ~f varieu~ siaes, including techi governmental5 and social aap~~ts ; it shall proyh~ forts of States, 1oCa~lties. private industry, ilniverel I think you ar4 familiar with the ge~ieral come your views~ on that. Mr. LINDSAY. Congressman Réuss, I km amendment. I have had a chance to examii and now to hear its specific language. Am support it wholeheartedly. I think it is a c~i and it would undoubtedly be of assistance to t I am sure in every other city of the coun'try.~ Mr. REUSS. Thank you very much. Mr. BAminrr. Mr~ Reuss' time has expire4 The gentlemanfrom New Jersey has a slic4rt question Mr. WIDNALL. Mr. Chairman, I would lil$e to make a little stat ment first to you ~as the chairman of the con4nittee. In view of the magnitude of the problems~ in New York City, an the fact that they are probably greater thafl any city in the Unite4 States, I think this committee ought to go *-not have hearings ii :1 :1 PAGENO="0247" DEMON,SThA!i New YOrk, been o rush b& UI, Wt and sought oi PAGENO="0248" 242 DEMO~STRAT~ON 3XTI~E~S: AND !TB~L ~N DEVELOPMENT with them, a~k~d them for what they thc ~ght was. strong arid v ~at they thought ~as weak, and what needed to be improved, and w iat needed to be destroyed, arid what needed t~ be kept. And m this * ay we have developed what we consider a ve ~ effective device. It ] ay be of some interest to you that in each od~ the project areas th: t I have responsibility for this mechanism has ben somewhat differ nt, evolved in a different way. But the testim ny that comes at our crti- cal public hearings in these two cities has 1 en the determinant. J I may say that I think in recent years the ~ has been a beginning in this direction in the city of New York. Mr. ST GERM~AIN. You are talking aboii seeking their advice ~ nd counsel, et cetera? ~ Mr. Lootn~. We go beyond that Mr. ST GERMAIN. But as to your interp etation of this particu ar section in this act, do you feel that that ~ ould do it ? Or does t is require that the citizens from the area be m: le part of the administ a- tion of the program? Mr. LOGUE. I think that is covered Mr. ~Congre~sman, in anot] er phase in another way, where it suggests tha4 impro~ement opportu i- ties for residentaofthe area bemaxiniized. ~ Mr. S~ GERM4IN. It isright here, it fólk~ws, and I will agree wth you there, Mr. L4gne~ Mr. Loaui~. Itdireotly follows. Mr. Si' GERMA~N. I do not think that this~ the same thing. Mr. Loous. Itis not. ~ ~ Mr. ST GERMAIN. This, I would say, ha~ to do with the physic 1, building, let's say, construction. But I still have trouble as to t e interpretation of the meaning that should begiven to this "widespre d citizens participation in the program." Mr. LOGtJE. I would say that t~hat is mi$sing a verb, it should e "widespread citi*en. ~articipation~ in the pr4aration of the progran ." It is a matter of ~eeking adviee, and i woEid~ayseèking consent. B 1 in an informal w~ay, I think that my person4~op~nion, for which I a cept only persoMi responsibility, is that theJOEO has overstructur d this. . ~ ~ Mr. ST GERMAXN. In other words, this cati present real difficulti s, can it not, in that oftentimes you are looking ifôr technical people, wi h technical qualifications, who are not available, it is unfortunate, h t these are the facts of life, and yet the people~ from the area insist th t they should be employed, or participate. Mr. Looui~. We have not had this difficult; . ~ It has been recognize I as the responsibility of the professional ~ta to rehoose the materia, but it is the content of that material which i reviewed and discusse 1 with the community. Mr. BARRETr. The time of the gentleman h~ expired. Mr. Mayor, we do not want to place an mposition on you. 1~ realize that you are a very busy man. But ir. Ashley wants to as you some questions. And I was wondering if~you could not make you staff convenient to him, to communicate w*h him and answer an questions which might be necessary to help ormulate this bill? Mr. LINDSAY. Ishould be delighted to do t] t, Mr. Chairman, eithe that or to return-I have an engagement wi i ahother committee to day at 2 o'clock to testify, at least subject . o the floor action, an PAGENO="0249" DEMONST: uRBAN DEVELOPMENT 243 sition on we at t Mr. committee rewording ~ tO( ns, but I can-he I am wonder- you might offer the `~n as to~ a iportant ~c ant parts lie of cost, which we .til 10 o'clock tomorrow adjourned, to recon- vene at PAGENO="0250" -~ ~ ~-~-------;--~ t- PAGENO="0251" to ask you any qu PAGENO="0252" Let me say at the outset that the enactme~t ing and Urbar~ Development Act of 1965 translating intO positive action the Natio of our cities and with the plight of the p slums. But this one step, important though it w4 us to come to grips with the enormous, ur~ lems confronting our Nation's cities and to'c~ Much more remains to be dpne, and labQr~ reflected in the new legislative propósalsl ward this vital task. ~ I lave some facts that our cities ~re real]y b~i~sti~g at the growing by leaps and bQw4~, and the~ growth concent~ted in the urban centers and provided fQr if any sound planning f. place. ~ ~ ~ And I would like to stress especially tha and urgent, and the immediacy and urgenc scored by the developments that areupon us Modern America must assure the provi ditions for its people. The need is for bet neighborhoods, and above all, ~çr ~nore an, Housing construction hasbeen out pf ste economy. The ~Ai~'L-CIO has estimated ti ent backlog of past deficiencies and increas quate housing of agrowing~p,puh~tion, th~ struction shou1d~ be maintaine4~at the mini. ing units a year over 10 years. ` . , Yet, in the first 6 years of the present dec~a~ public housing starts (includi~ig farm) ~ minimum. , In 1965, thes~ housing stai~ts totaled or~ January 1966, the seasonally a4j~usted amp$ still at about that level, ~ , , . The accompar~ying.tab1eT sh&frs in pers shown by housing starts since i~6Q. TAi~t~F~ i:--. Housing Btahs ,` [In thopsands Of units] Period . :` * 246 DEMONSTIWPION CITIES AND UR~AN DEVELOPMENT r it last August of the H was a historic step to~ L'S concern with the p1 ~ople forced to live in pus- ard ght Mty s, wa~iot ~tóugh to en Lble Sent, and deep-seated p: ob- .ns. ~e1cowes further initiative before you, to carry or- ~ to emphasize the p mt ~s, but the. populatio is ~n~ct of this popula ion :iiist be taken into acco ~nt i~ future gi~owth is to t ke ate er- thisproblem is immed Of this problem is uni iow. on of modçrn living c Br cities and towns, be better housing. ~with the rest of the T ~,i.n~the face of the p ng current needs for a .rp1~rne of residential c .um~ of 2~½ million dw ter 11- ~thOta1of~j*fv~te a ~ias J.~n. far below t L1S ~~`$Ø,~;oo~ units, and 4$~oc~These'itarts i. in as I ~ü~~rforniançe as . . , `j.'o*~1 , ~ , i$H*~te ao~Ipu~Uo ~ ~ *~ Total ~1iv~te .(1~oIpdIng farm) 1960 I :i;~~ ~ . ~1,365.o.. 1492,4 16409 i~~,59O~8 ~ , 1,252.1 1,2 1,313.0, 1,2~ 14628 14 16O~2 151 1 ~7.4 1,5~ i,sott i,4i ,,o~ ~ 1963 L 1964 ~ ~ ~ 1905._ ~ . ~ Prlvatc nonfari Source: t.S. Department of Commerce. .1 .8 .1 .7 .4 .4 This performance ha~ been d~1cient. Ithi For 2 years in a rowe residential building ha our Nation's ecoijomic progress. ~beexi ~ from dynami ~ fai~e4:tokeep pace wii PAGENO="0253" I DEMO~S~P~N CITI ~ ~ ~ TD tR1~AN DEVELOPMENT 247 Added to th~ p~vioi~~ort ~ 1~ ~ ~i thcv~1nme of new housing built within the reacho4! mc~dei~ate- 1 `ci o~cc~-iricoth~ farnilies,this deficiency has resulted in. ~ ~j a~lauce in~ ~m~rica's economic d~ veioprnent~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ *~ ~ Considerth.~ ~pe~fb~i~zice ~ ~1 ~ facts of ñrba~n life confronting u~s ~i~day'~ ~ ~ ~ ~ ~ Our populatiowis gro*ing ~ ~ )out ~½~i~iilioi~ or more per year. And each year, hundt~eds of 1 i l~ ~nds of people move off the farms and out of the rti~al aJrea~, se 1~i~ homes and jobs in the cities. From a largely rur .1 count ~ ~ fewer than 36 million people less than 100 yearsa~go, A ier~ca i &~ ~ nation Of 104'/2 million. In the p~tst 20 years si~eth end of `~ ~ .d~~ar U, the population grew by 55~ million. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Approzimatel~ 70 erëent ~f ~i . An~ica~ now live in 212 metro- pölitan areas that oc up~ les ~ i~ i 10 Percent of the surface of th~ country. By 198~ oi ly ~O ye ~ a ~ omnow, thepopulation is expected to reach 950 milliOn,: an~E ab ~i ~ percent ~will live in metropolitan areas. ~ ~ ~ ~ . The rapid growth ~f Øur ~ ~i ~ ~singiy ifrban population has been developing greatpres~ur~s or ~ v4iablefitèilities. The cities have ex- ploded intO unplamn~d 4~etr p )~4 an areas with water shortages, air and water pollution, ~nd ina e u~ temass transit, as well as shortages of schools, health-ca~re faci i i~ recreational areEis, and cultural facilities. ~ ~ The centralcities h~,re inc. ~ si~ gl~rb~omesi~um ghettos and decay- ing areas with eoiiicer~tr~ted ( pi~ atiotis ó~f ~th~poor, the elderly, and minority groups. ~ A~ the sa~ ~ ~ ~ the spr~a~Lof sprawling suburbs and highways is~l~b1i~g i p $ ilioi~s of~acres, with little, if any, planning for n~ietrop~litan a ~ a~ de ~teeds~ Close to 15 millidt~ d~.relli ~ ~ its-~mo~t of them in urban areas- are still substandard~ *it.l n ~nnual residential construction rate of only 11~ rniilion:tt~iit~ a y ~ ~ nc~luding the annual construction of merely son~ ~ ib~ c housing units-it is clear that th~ Nation's housing ne~ds ~tre i ô ~ ~ ingrnet. Moreover, the contitiuing rapid growth of our ~irb~n p ~ nl~ tionix~ thenext QO. ~rears will require millions of ne~~ho~in~' . in ~ts, u~i~me~ted by~ improved ~ and ex- panded communit~r ~a~litie ~ ~?Lthiik~ s~vices~ ~ The imm~düyi~id~the ~ ~ ~ ~ ~ ~underscored by the devélopmenth4h~t ar ~ ig it upon~us. ~ ~, In the fiscal year~ 1967, starting next .Juiy 1 acbord ti ~ t ~ a `cei~us~~estifriate, basic population factors should increaset the 1' th of ~ household formation by 180,000. This increase ~don~ oa~1s f ~ * ~, corrE~spondir~g ~increase in housing starts. A much gr~ater ste ~ ~p ~in st~tsis~nece~sary not only to re- dress the accumuiat~d d~fici ~, ~f ~reviousye~ars, but also to make possi- ble the rehOusi~~o~ fa~nili~ s l~y ng in slums and sub~tandard hom&s and those doubled ~p~in ov r rø s~4ed tenen~ents. This relates to the fa~t that wé~have h~d ~ lag:1: h usin~csti~uotio~, ~uid this has per- sisted ~ during the p :~t $ ye~ ~ . ~ Even ;this last January the 1,700,000 ~`ate is far b~iow~ti~mi~ithi ~ ~ te~f `~½.i~illlion honsing units a year that we shou1~be ~ u~i~dth~g ~i~l t ~ ;~That * is tltthi anit we sh~c~u~ld aim at. ~ Andw~h~a .e~ade&~t $ h~~ntthenioment. ~ ~ ~ ~ ~ ~ I would like now ~ to~tiirr~r$o ~ h&1maJor~ l~gi~lation~bêfo~ you, The Demonstration Citi~s~A4et of~b 6 . ~ ~ o V ~ ~ ~ .3 ~ ~ ~ PAGENO="0254" 248 DEMON~S~F1UTION CITff~ ~D TJR: It is agaánslj this background of hard, ~ ~ncontro~rtib1e, facts hat I am here to state that the AFL-CIO gi es its stout support to the Demonstration Cities Act of 1968, propos d by President Johuso * in. his special message to Congress on Januaty 26, and embodied in the two identical bills introduced on that s~ie ~ day, H.R. 12341, by the distinguished chairman of the Banking ~and Currency Commi tee,~ Mr. Patman, and ER. 12342, by the dis ingu~shed chairman 0: its Subcommittee on Housing, Mr. Barrett. We regard tI~iis legislative proposal as a important and auspi&ous step in the righi~ direction. At the same~ time, we believe that the specific recommendati n~ proposed to carry out this program are un luly modest in magnit de. It is our view that their scope should be e .larged to make póssib e a truly effective onslaught on urban blight ii~ cities and towns large ~ nd small. . . This program is of strategic ~ importance not only because it ~ ~ ill help eradicate and help cure the festering ~ore spots in our cities ~nd towns, not only because it would generate ~ictivity which would h lp redress a seriou~ i.uiba1an~ein the Nation's ~conomi~ gro*th, but .a so, and most important of all, beaüe it wouk~represent a social jnv st- ment assuring .~ large return to the whoie~community . by rebuild.ng people's lives a*id regenerating their cap4ôity to contribute to he common wealth.~ ~ ~ ~ The effectiveness of this approach is enhanced by the fact tha it would bring together Our resources for ho~sin~, urban renewal, e a- ployment, education, training, and social help, in one combined, c n- centrated attack on the most acute public n~ds of~the community. Slum clearance is indispensable in that ~t elithiiates the brèedi ig grounds for disease, crime, and deterioral4on. of human values a Ld human resOuro~s. But shun . clearance b~ itself, * is ~ no guaran ce against future ~i~nns. ~ . Even new h~sing deveiopm&ith, well iuI~nded and well built, c ~n deteriorate unie~s the people living ii~ them ~iave access to jobs, edu a- tional opportunities, medical ~re and ho*pitalization, re.creatio] aI facilities, and soci~iJ services. To deal effecti~vely with the problem of pOverty, we must direct t .e most effective remedies against both its cau$s and its consequences. Basic long-t~rrn economie programs; . suc1~ as the establishment f realistic mininium wage standards, uner~plóyment compensati n standards, socialsecurity, medical care, equi1~able progressive tax po i- cies, and the allo~ation of economic resource to employment-gener~ t- ing and socially ~isefni, prodncti~re ~activity, provide the approach o the eradication df the causes of poverty. On the other hand, the most immediate p actical way for Amen a to treat povertyis to make every attempt $o eradicate it when a] d where it is found. We know that impovehshed generations hay ~, since the 1930's tended to produce subseque~it impoverished gener - t.ions. Therefore, as a practical matter, it is ~uuch more economical o make every effort to assist the impoverished ifamily in the first plac Apart from allother considerations, it shou~$d be recognized that ti e cost of such assisliance serves to o1~set the far~greater costs to the con munity of ré1i~f ~tnd Welfare ioadsto care :f~r. those of ith disadvai - taged citizens wh~ are unableto help themsE~1yes~ ~ ~ , D~W]~OPMI~NT PAGENO="0255" provides trat PAGENO="0256" 250 DEMO~STRATION CT 1~I~4N ~Q.~ytENT )nal ~r1y cant sure Ld I ~ of sla- iir- ies- [ost hin ity. iew for ich ;ec- or ror ble ut- es, Lir- Lie- )n is the ~undamenta1 q people can relocate. ~ find decent housing wi~ ~ supply in the comnrnii ~e sttpply of suitable,) ~d be. .~nade available ~ conipelled to wove. ~hat the location of s *ot b~ confined to the which are being rebuil ~ under this act. .lding of such housing ~. Finding land suita ~ble difficulties. Yet si `y, in particular instani :~ ~ay well serve the. p ;tion~ to permit constr 4on'in the areas surroua ~ns. d~f~icult pro1~lems of c riaximum of teamwork s ~we1l as private. a pathfinder in this vi n, the N~w York coopei ~i~ig with labor organi~ The 1~64 Housing Act also authorized, for the first time, additi relocation adjustment payments of up to ~5OO to families and eld individuals, 62 years of age and over, wh~. are eligible but unab] secure public housing. The 1964 law ~41so iw~luded an impor requirement tbat relocation regulations i~Iude provisions to as that relocatior~ payments are made as pr4mpt4~ as possible. Ai think that the language in the bill befor~ us should take accoun those enactments and the language shoul~ be related to this leg tion and brought up to date. That is the i~ommendation, Mr. CI man, on this. Related to the whole problem of relocati tion of the avilability of housing to which~ displaced families will find it impossible to their financial reach in the existing bousin It is therefore~ imperative that an adequ housing which ~ displaced families can aff occupancy by ~hem before these families An important point in this connection ~ housing to be provided for relocation needy tions or neighborhoods of the city or town: restored in the course of the demonstrati4 It may be even wise not to confine the bt~i relocation purposes to the city or town its~1 for such buildii~g may present insurmorml4 able and desirable sites for such building be available ju4 outside the community. poses of this 1e~islation,. in par$cular situ tion of new housing suitable for such reloca in~ the commurtity involved in .demonstrat To deal effectively with the complex an placement and relocation, there must be a i~ the part of all agencies concerned, public ~ A private agency with a notable record a~ area has been the United Housing Foundati~ five housing development organization wo tions there in thi~; field. The United Housing Foundation has no grams of relocaijion in connection with site housing sponsored by a number of our uni the necessary help from the State and city a~ As a significant example of success with a lem, let me cite the effort guided by the Un~ in the congested Penn Station South area, ti JI~G~TTT housing project in midtown Manha1~i In this experience, each dwelling to whic cate, found eithe~ by the sponsor or the tenan fled by the depaitment of real estate as qual* The methods useAcl by the depart~pent in ins. dited the reloca~tion process. The housin resulted in placing more than 100 families ~t Responsive cooperation of a vast majority in the job being completed in a little more that that nearly two-thirds of the families were s4 of their cooperative participation in the progi~am. -is- on al a- 0- we st -only devised model p~ clearance for cooperati us, but was able to enl ~encies concerned. ~ difficult relocation prc ted Housing .Foui~dati ae. site of the outstandi: ~n. -the families would rel ,-was inspected and cerl f~Ting as a stanclar4 un~ ~tiLi~g apartments exp ~. authority . cooperati( public hQusing project r of site tenants Tesult( ~ a sear's time. The fa ilf-rélocate-d is indicati~ )- 1- t. 5. PAGENO="0257" DEMONSTRATI~DN CITI Befo~ the re1oeati&~i p~ogr were 2,646 fami1ie~ a14 more t ing houses on the site~ Aim found their own new d~we1~Iing York City, ~vas insp~ted b ilies which rehoused t~u~n~se1v the number of roon'~s ~n t~ieir moving expenses. ~ Of the remainder, ~95'~fárn cated ; that is, they w~re ~eho sponsor and inspected by ~he units * were found thrçug~ re fees. The fees. were ~15O fo $250 for four rooms o~ wore. If the landlord did ~iot ~ss sponsOr had the wotl~ .dQne. which was freshly pai~ate~l. There were 106 families on' in public housing pr~je4ts. Reloc~ution cost per f~unily a in~ this experience, ]~V1r. Ch this job is going aloi~g `a trai there has been accum~i1ated of Congress to us~ al~ the ag help. Beoause reioc~tion is t This is the prQble~m ~f' ~r ~s flies who ha~ppened t~ be by a are trying to acc~ompl~sh. . `The proposed Demonstrati I looking, and exoitii~g ~rog a challenging proposal~ for. the S( joan cities. As the Presiden I into law could trans~forw th pieces of Our ciirilization." ~ The ~acJaievexu~nt bf this o proposed DemOustra~tioi~ Ci ~ labôrin Ameri~a. . We regard the e~epui4on o priority. To the end `that t that ~all `renewal. titl~ I' fun this act. . At the same time, ~et me recommendations p~op~ed t modest in magnitudE~. Their If "massive addi'tibns to t~e ing," proposed by t1~e. Preside tion is needed. We ask particula~ly that tion of low-rent pu~lio ho ~ dwelling units a ye~ar. W promptly available to imp ~ disadvantaged peop~e, enac e ment Act Of 1965. 60-878-66-pt. 14-_-47 ND URBAN .DEVELOPMEN~. 251 t underwa~r `on July I, 1959, there 00 single transients living in room~ o-thirds of the families, or 1,686, ach such unit,' when located in New departm~nt' o~ real estate. Fam- re paid bonus allowances based on esidenees. These bonuses included or 22.4 percent were sponsor relo~ n dwellings found for them by the ment of real estate. Many of these ate brokers who were paid finders' rtnients of up to three rooms and se fees included redecorating costs. esponsi'bilit~ for redecorating, the. h family moved into an apartment ite, or 4 percent, who were rehousad r moving expenses were also paid. ed $280 at that time. I am detail- ii `for the committee to know that has already been blazed, and that .ence, and I hope it is the intention ~ that have had experience and can tole problem in this whole approach. ~merican DP's-4he displaced fam- exit in the path of this progress we ties Act 0± 1966 is a sound, forward- responsive `to' President'. `Johnson's 1 and physical restoration of Amer- said, the enactment of this program es of the present into "the master- je~tive through the enactment of the s 4cit of 1966 has the solid support of program as an urgent task, of high alization may be expedited, we ask made available immediately `under emphasize our view that the specific xrry out this program are unduly e should be enlarged. )ply of low- and moderate-cost lions- ~re to be realized, additiOnal legisla- vision be made to step up construe- to a yearly rate of at least 125,000 ) urge that adequate funds be made ,t the rent supplement program for y the Housing and Urban Develop- A 1 11~ S t~ ~ he ès e~t ii e s hei cie n~ ~ci~ ~ci~ cit. bh~ b~ tin tco st~] jt~ PAGENO="0258" 252 DEMONSTRATION CIPI1~S AND URI ~N DEV~LOPMENT. I r~aIize, M~. Chairman, that the appr. ~riations ar~ not in hands. You did provide this authorizatio i, and we are gr~tefu it, but we wantto do a little following up n that to see that it is plemented ; it isurgent and it has been delay d. Let me turn to the problem of new comniiinities. As I have aire pointed out, it is imperatirve that a sufficient additional housing s ply be provided to meet the needs of our growing population and provide good homes for those who would ~e displaced in the cou of carrying out the demonstration cities program as well as ot urban renewal and governmental program , and who cannot be a quately housed within these cities and towns. To produce tI~is additional supply of lion ~ng, particularly for m erate-incorne and low-income families, it i~ necessary to utilize lai areas of vacant and undeveloped land whi h can be acquired at r sonable prices. This includes housing in the~undeveloped areas arou cities and housing in new communities whiih would be developed a located far enough from existing cities to b~come largely independ and self-sufficient communities. Such new communities should be p1annec~, developed, and operat to accommodate a cross section of families, oth in terms of their come and their racial composition1 So conceived, E~flew comrn1mitli~s would n~ ; siphon out of the cit just the bigherii~icomi~ families, a~s the subur ~s now do, leaving behi: the increasing j*oportions of low-income ] eeple in the central cii Instead, new communities would provide balanced outlet for t massive growth of our urban population. I iey would afford a mea for an orderly dispersal of population to ~elie~ve the congestion existing cities. The instrument appropriate to undertak~ necessary land acqui tion and carry out their development would e a public authority. should be empowered to carry out the devel pment either directly through long-t~rim Teasing of its land to prb ate enterprise or to oth appropriate pub~ic agencies~ Vesting the r ~onsibility in a separa public corporate ~uthority for hrnd acquisil on and disposition is: important safeguard against land speculati )n and profiteering. i far as land acquisition, Mr. Ohairman, is con ierned, Ithink that sot thought and exploration should be given to ~the possibility of addii to Our highway construction program a provision that would enab those who are planning. and developing new highways to go beyoi the right-of-way limit and, in connection ~With that acquisition, acquire the land ad~acent to these highways~and work with the ice public agencies in connection with that iai4l acquisition to provi new opportunities in the strategic areas and 4tpoints where the publ transit authorities can best use it. I We recommend the enactment of such a n4w communities prograi containing these safeguards and prescribingiother necessarjr and a~ propriate standards, as title II of the prop~sed Urban Deveiopmei Act, and also its inclusion, either substantively or by reference, i the proposed demonstration cities program. This enactment shoui include authorization of the necessary Fed~al grants for plannin and preliminary work and Federal long-tei~n~ loans at low intere rates for land ac4uisition and improvement. Let me turn to the problem of urban m4ss transportation. AFL-CIO strongly supported the enactm t of the Urban ur For m- dy p.. to `so er le- ci- go a- ci nt d y. .0 .5 I 1- :t r 8 n S 8 g 0 ci 0 I I I I t t Th Ma~ PAGENO="0259" DEMOtcSThATIóN CITI: Transportation Act ó1~ 19~34 a of the proposed Urba4 De~reli We regard th~ ~r6~os~d $1 program in fiscal 1968~ as the the pressing and moiirnting i urban communities. ~Fhq pr million is just enoughtto carr But it is not enougl~ to heli such as bus serviëes needed by tion should be given 1~o ~n in sufficient to meet this ~rery re~ tion with the mass ti~ansit til there; is no substanti~l 4ian the present statute sa~feg~uar must be retained and partied Enactment of the p~oposed important contrihuti~n towa: anced metropolitan d~veiopn forced by full and ca~idi~ r& less unless they are hacked b them out. The plain truth is fha~ nol meet the known requi~en~ents urban renewal progra~ns of co The policy reso1ut.i~n On u~ the Sixth Con~titutipna~ Cc December, succinètly states c regard: In reaffirming suppoyt ~or the ui ization of the 1965 act f4r tl~is ef munities seeking to clear th~ir sb rating areas. We, ther~fore, asl creased by $1 billion per year for urban renewal to bring new life accordancewith their recluirement increase the Fedetalgra~it ~rbm cost. This is our recommendation t committee. GROUP I it We support the gi~oup pr~ c mortgage insurance a~id ~or 1 ~ practice facilities for medic d adoption of this mea~ur~ wil L needed facilities. Lo~ns mati ii mated value of such faci1itie~, plus title X premium oharg, cially useful public h~vestmer~t. It is widely recognize~I thai health services sy~tei4~ lips i~ t nized and delivered. As the ~: of the Nation said,in its land~ The genius for organization, s conspicuous in health sei~vice in it 253 A D URBAN t~EVELOPMENT I s pports with equal vigor title Ill n~iè t Act of 1966. ~ illion level to carry forward this sQ~ te minimum, just barely meeting ~d for mass transit facilities of our )se additional authorization of $95 E~o ward the program at that level. h~i and develop mass transportation ai~r smaller communities. Considera- ea~e in this additional authorization, fleE d. And let me also say in connec- ~ that in extending and enlarging it~ iA its provision. The provisions in g [abor standards in this connectioii rs* ird and efl~ectively applied. Trb an Development Act will make an ~ rnd planning of orderly and bai- t. But its adoption should be rein- ~O~ion of the fact that plans are use- re~ rnrces making it possible to carry ~igh resources are available now to to' carry out the already completed aities eligible fOr Federal aid. America, unanimously adopted by tion of the AFL-CIO, held last iews and recommendations in this ~newal program, we note that the author- is' inadequate to meet the needs of corn- id rejuvenate their blighted and deterlo- the capital grant authorizations be in- ~ar period. ~rhis increase is essential for e decaying central cities and towns, in B also ask for an amendment which would drds to tbi'ee~quarters of the' net project submit for the consideration of the [CE FACILITIES facilities bill providing for FE[A.. o assist in the construction of group dental care. We believe that the' relieve the shortage of these much in 25 years, up to 90 percent of esti- the maximum title X interest rate, ild constitute a safe, sound, and so- greatest deficiency in this country's way that medical services are orga-. dent's Commission on Health Needs report more than a decade ago: tha acteristic ~f American life in general, IS bse ice. it F i( ii I V a 13 IL U rLd nfl an ve~ a t 5. n r hat 3-y ~ ti o-l~] I I ic~ as or ~el~ in~ at ;he Lrh PAGENO="0260" 254 DEMO~WPRATION, CITIES AND lYE AN DEV1~>WPMENT Better organization is the key to maldin~ the benefits of med research and modern medical care more re~di1y accessible to all. Among the most promising developments in the improved organ tion of medical care is the group practice Q~: medicine. Group prac to quote the President's Commission once n )re- `cal ~ za- ice, * * * not only can be an efficient, economical met~od of organizing health se vice but also may pr~viUe an invaluable setting 1~or fcontinued improvement of the quality of care `~ ~ ~ I From the patient's point of view, gron~practice is a great b on. The family can obtain the entire spectrur~i of health services in ~ne place. Continuity and quality of care ~ maximized-along i ith economy. The patient is cared for by doctors working in coop ra- tion with each other to maintain his hea1th~ rather than in competi ~on for his fee. The encouragement of group practice ptovided by this bill wo ld, therefore, be niuist benefichtl. I Now I turn 4o t&thnical amendments arid other recommendath ns. While the ~~mary purpose of the "teehi4ical amendments" bill, he Housing and tftban Development Amendm~nts of 1966, is to recon ile and coordinate the provisions of the severa1~ measures, newly propo ed in this session, with each other and with th~ existing law, some of he provisions of this bill, are, in fact, substantitve and of public concer: One of these amendments would change the provisions of the pres nt law with respect to title I home irnprovemei~t loans to let the borro er pay the one-half of 1-percent premium on ~ueh loans. In January 1966, . title I loans were rufinirig substantially bel w the level of the corresponding month in 1p65; continuing the dô~ n- ward trend of tije past 8 years. Evidently t~ie intent here is to swee en up the yield on ~h~e loans at the expense of $i~e borrower, as an indu e- ment to the bankers to make title I loans to frrneowners in need of e- pairs on their hkmes, instead of charging ~en higher rates' on th fr "own" loans for this purpose. This change recognizes, in effect, the tei~dency on the part of lie bankers to put interest ahead of principle-~and I am spelling it p- -e. But, in our view, the remedy lies in more and better information bei ig made available to the public about the a4vantages of title I ho ie improvement loans, their ` availability, andj the responsibility of to bankers to do tijeir part in serving the pul~lic interest. Soaking t ie consumer may be the easy, but not the right 4nswer to this bit of bla k- mail against the)less well-to-do peopie on th~ part of the lenders. L5 a matter of fact,~ I have had an opporlxinity ~ócheck the record on t is in six cities, which may not be representative, bñt are at least an in- clication. And the banks, at least in cennect~on with checking accour~ts including the so-called special accounts for small accounts, have t~ie custom of sending out enclosures as to the ~vail'abili:ty of their lend- ing services. And those mentioned include r~otoniy Christmas savin ~`s clubs and automobile loans, but the title I ome improvement ba: s. So I am not qui1~e sure whether this gimmic : that has been used he e in order to get the higher' yield is actuall: based on fact. I thu k it was just a sto~ry `that was'told to everyF dy, including the Seci. tary, about the wity they do'thing~ when actu dly they are trying to g t a higher yield. And if you compare, of co irse, the yield on it, sa r~ with `auto loans~ the title I yield already is Mgher. So I do not thi: k PAGENO="0261" DEMO~STRATION dPI there is any excuse fo~ gi~ving i on that again. We support the pr~po~ed ~i 221 (d) (3) sales of hOfries for from $11,000 to$12,590 ~n si $20,000 on two-fami1y~ dw~11i ~` authorized by the Ho~isitig a the comparable sectic~n ~03 ( ~) outlying areas and si~riall co in the section 221 (d) (3) pr ~ meet increased constrt~ctiçn co t ~\Te also favor the ~m~nd e standing insurance oi~ m~nag to the management fuj]ñ. The perfecting am~ndment to clarify the nature ~f i~npr National Housing Act, anc1) ~ Our support is alsogiven to t authorities tO lease hous~g b This change makes ~uc1~ le ~i of displaced families and thu~ extension of such 1ea~in~ to already existing. ~ We believe that th~ pthpo ~t and materials in hou~ing~ con opment should be con~in~d to Secretary to interv~ei~a th with his encouragem~nt of, a techniques, should b~ d~f err study are maie avaih~bl~ an s We recommend th~t ~ddit o clusion of nursing ~acilities i These provisions reg~rd~ng ii andwe hope th~y~1o~not get ~ We also ask an am~ndmen~ of employ~es affeoth~I b~ the~ Federal installation~. ~Ton~ installations, forced to reloc~ tions in which they~ ar~ en~j because there is no ~na~ket, ~ they have been buyi~g *ith there is a real pr~bl~m i~ thi~, cut down or eliminated aon~p closed, and there is an ern~l from employment i~i that i~ in that area. Som~tin'~es i~ of nowhere. if the~re is no~ activity and enplo$~.m~nt, ~i problem. I would ~ike to h~ as a supplement to~y stat~ point out that this ~aizip1e ~: but it is a good~ex~ample ~ Mr. BARRETT. You may it ND URBAN DEVELOPMENT 255 a that and raising the interest rate ~se in the mortgage maximum on ~rate income and displaced families family homes and from $18,000 to ~n inèr~ase in mOrtgage. limits was ~ban Development Act of 1965 for gram for low-income families in ities. This change is also needed for iricr~as~d mortgage limits to uuthorizing the transfer of all out- t type cooperative housing projects . respect to land dQvelopment serves ents permitted under title X of the ise, has our support. thét4ment p~rmitting local housing nger than tia~ present 3-year limit. m&re servi~able in the relocation wers a real n~eed. We also favor, the ~g to be constructed, as well as that elating to new techniques, methods, ion, rehabilitation, and urban devel- rch and study. Any anthori~ty to the ~petitive ` workings of a free market sistance to~ specific new materials or Ltil the results of such research and ected to public review. provision be made to permit the in- ~ction 231 elderly housing projects. ~g facilities are extremely important, ooked. ifyi~g the program of buying homes rig of Defense Department and `other ers of houses in the vicinity of such ~cause of the closing of such installa- ~d find themselves in great distress ~quent to the closing, for `the homes hard-earned wages. Mr. Chairman, ron have an installation that has been ly, particularly those that have been ~ who has been getting his earnings .ation who has been `buying a house El out-of-the-way area in the middle ~. but that installatiiori as a source of his is' suddenly closed, this is a real II opportunity to submit subsequently ~ an example of `this, And I want to t the only situation ; there are others, at ki~id of prdbi'em you are facing. L't `objection. 1 ocji TI ~. ib ~I1 et~ e~c~ L~ ~ns u~ [S ~ ~ttc~' ~ôiu I ~ U] abj 7ej~ ~lai osi Loy tbs if: `ethe ye ~a] ,s L1U~ du e ,eni WI PAGENO="0262" 256 DEMQNSfPRATION CITIES AND* URBAN DEVELOPMENT Mr. SHISIiKIN. Thank you. (The mat~ria1 referred to follows:) SuPPLi4o~NmIY STATEMENT BY Bo~is trISEKIN, SEOEETAI~T, ~ I HousiNa COMMnTF~E, A~'r,-CIO In my tesMmc~n~ before the subcemmittee on M~reh 3, ioee, i made the folio ing recomniendation ~ "We also ask an amendment clarifying the ptogram of buying homes o ~ em- ployees affected by the closing of Defense Departnienit and other Federal installa- tions. Homeowners of houses in the vicinity of such instaUattons, fore d to relocate because of the closing of such installatiqns in which they are empl yed, find themselves in great distress because there ~ no market, subsequent t the closing, for the homes they have been buying ~crith their hard-earned wa es." In support of this recommendation, I cite ju.~t 4ne specific example of the any situations of dis1~ress to which Federal employe4s and their families have een subjected in coi~nection with the ~Iosing of I~efense Department and ther Federal insta1lation~, forcing them i~o move to a4other location, and to aba don their homes at th~ location of such installations. The following is an excerpt from a letter addre~secI to George Meany, presi ent of the AFL-CIO, ~y C. E. Berger, president of the~Utah State AFL-CIO: "A great number of people working at Hill Fi~ld Airbase have contacted our oflice in regards to being transferred to Hill Fit~ld, Utah, after other miii ary installations were closed down. "These people find they are now in a position of not being able to rent or sell their homes at the locations they moved from ai~d a good many find they r Lust maintain two homes. As you know, when baseg are shut down, no one w~ ints to buy or rent this property ; and, if they do so, ~it i~ at a tremendous finar cial loss or the rent i~ very inadequate. Also, no bui4ding can stand vacant wit] Lout vandalism deetro~4ing it. ~ "Many of `these people likely would not have ma4e the transfer had they thoi there would be r~ relief forthcoming. Many h4tve had to continue paym on vacant homes, in addition to taxes, in~uranceIand other Incidental exper When one has life's savings tied up in a home, It is very disheartening t~ faced with this type of predicament. "A good many felt the phasing-out of these n~ilitary Installations wouh over a period of 3 to 4 years, providing for a grad~ial transition, but it seems transition has been very rapid and has created hardships on most all pe involved who were required to move to hold their ~Obs at a much lesser pay. "There must be some way to help these peopl with their housing probi I hope you can supply some answers to this p Mom which will make ti people happy to be in Utah and satisfied, content d employees at the airebaL In view of the ~xtremely serious character of hi~ prOblem, its e~ect on welfare of Feder~a~t employees ~and their families, and the adverse effect of I problem on the i~peale of this key personnel in ur defense effOrt, I hope subcommittee w!l~ amend the proposed bill e titled "HousIng and Un Development Amendments of 1~66," to provide t necessary relief through derly and expeditiou$ acquisition by the Federal overnment, of such homes part of the cost of the closing of sucth Federal I tallations. Mr. SHISHKIN. And let me state again t1~at, to protect labor stai ards, the AFL-CIO urges that prevailing w age and other labor stai ards should be maintained for all employe s engaged in constructi in any program involving Federal financi ~1 assistance or mortga insurance. And thwt, of course, would ar ply to leasing as well which there is Federal money, as other ty~ es of financial assistan Let me say iX~ concli~ision that there is a )ressing need for prom enactment into law of the legislation now efore you. The need make our cities and towns habitable is exti emely urgent. As Walter Lippmann has said: I Lght sits sos. be be the pie ~m. ~se the his the an or- as (1- ci- )n go in ~e. pt to This work is not postponable as mere "buttex while we make the "guns." There are, as New learned, explosive urban problems underneath oul ,, which we can do with York and Los Angeles h~ ~ glittering affluence. at ye PAGENO="0263" DEM0NSTRAT~0N CI1~ As reported by the Wall St survey showed that t~ier~ are rising against inadeqi~ate ho ing conditions. The legislation bef~re you Let Congress act now to ren~ the same time prever~t the co~ life in America's citie~ and to~ I thank you. I have a statement a ClO on February 28 ~ like to have an oppoi EES ND URBAN DEVELOPMENT 257 ~e~t ournal for January 5, 1966, a recent ~ ast 21 cities in which resentment is ~ overcrowding,, and insufferable liv- b only remedial but also preventive. these underlying conditions and at ~plosive disruptions of community ~~ing farm a rted in the record. I will be glad to answer ~s a pleasure iean old in r you one who gives the ~ weight of a great orga- ns of working American is one aspect `~ the II ~re are 1 it from thE Mr. Chairmar n of - `~ ecoi is ly Ly 5, PAGENO="0264" 258 DEMOf~STRAPION CITIE~ AND tiR ~Ve ~ys ~re oil of ge ial ut ~st nt of he ay `ci ee or, at ci n Le y n e ci y 3 e t t AN DEVELOPMENT Mr. SHIsHith~r. I agree. Mr. BARRm. Thankyon. Mr.Fino? Mr. FINO. Thank you, Mr. Chairman and Mr. Shishkin~ It is always a pleasure to have you b~fore this committee. enjoy your intelligent and. forthright stfltement. And we feel that we get somewhat of an educatioi~ when you are here be this committee. Just a quick question. Do you know-4(you don't well maybe can furnish usi the informatio~-do you ~ow h~w many units public housing have been placed under m.a4agement since the pass of the 1965 HoiI~ing Act? I Mr. SHI5HKIN. I only have the figure for ~965 as a whole, the ann figure. And that is pretty close to about 30,000 units completely b and placed under management. Mr. FINO. What was it in 1965? Mr. SHISHKIN. 30,000 units in 1965. Mr. FIN0. You state on page 3 of your h3stimony that "specific ommendations proposed to carry out this p~ogram are unduly m04 in magnitude." ~ Now, what is your recomn~endation as to the amo `of appropriatiojis needed, bearing in mindithat Mayor Addonizio Newark in his thstimony here on Tuesday,~uggested $200,000 for city of Newark.: And Mayor Cavanagh w~io testified here. yester( suggested $2.5 billion for the city of DetrOit. , And Mayor Linds who also testified here yesterday,.felt thattlie city~ of New York wo require at least $2 million, for a total of over~$4.7 billion for these th cities alone, as against the $2.3 billion that has been recommended suggested by Secretary Weaver. Now, how do you feel about this ? Mr. SHISIEKTN. Well, I am not in a position to really answer t: question specifically, because it requires a gre~t deal of very close stu arithmetic, and 4lsopolicy determination a~ to the standards of eli, bility and priorities to be given to the areas) . And I think that prii ities of urgency are especially important in Ihis consideration. Bu think that the g~eneral area of this is indic*~thd by the testimony Mayors Cavanagh and Lindsay and other who testified that they ne it in their particular communities. I know considerably more is quired than is indicated in this bill. . I cannbt give a recommendati of that, but I will advise further study of~ that with regard to t requirements of an adequate effectuation of his program. Mr. FINO. It is quite obvious at this poii .~ after listening to on three mayors, that the amount o~ money th ~t is suggested is just infinitesimal part of what is required to do his ~job, because we ha maybe 60 or `TO eities that are in desperate ieed of a crash progra of this sort. We have not come tO the city o ~ Philadelphia yet. Ai Mayor Tate, who is scheduled to testify or~ Monday, will probab say that he needs $3 billion to do a right job iii the city of Philadeiphi So it looks like the amount of money that has been suggested, this $2 billion, is just a drop in the bucket in this program that we a contemplating. Mr. SHISHRTN; Well, Mr. Fino,. 1 have ~serted that this is n enough, and muelmore is needed. But let n4e emphasize the fact th the President's irie~sage emphasizes that thi ~ :ls a demonstration pr PAGENO="0265" A ~D URBAN DEVELOPMENT 259 this is r~a113T a testing ground to willing to allocate in the way of .tions in its own community to con- nk if the maximum contribution is iponse ~ the initial demonstration, may be the hardest. And it needs I. But I don't think it is going to And ~i think that the beginning of . vital testing ground of the need T~tion to see how much needs to be 18O64,th~re is a provision having ~ted private housing for use in the ~~er in his testimony before the in di~ussing housing that is con- ~p~ndently that this results in costs can be achieved when the authori- gthemseives. I have heard that in h as ~$8~QOO per unit. Do you know L15 largèdifference in cost ? ~ Do you serib~d to excessive administrative j si~ L~1~ r~ I DEMONSTRATION CITIES gram. This is the first test. see how much of the corninui ~n it ~ i funds, resources, people, and i tribute to this program. Afl( made by the community itself that we will find that the first to be larger than it is now inc be out of the reach of the feasib L ~it : th i: ri s ep ic ate e. this will be a very importan of the cities, of towns, and of done. ~n t e Mr. FIN0. In section 105 of to do with the use of newly c public housing program. I subcommittee on Monday st structed by private enterpris substantially higher-lower ties plan and construct the h some cases this amounts `to a~ ii r~ t h i I of anything that can account think that these costs could I charges ~ Mr. SI-II5HKIN. No. I thi fact that you are utilizing t a new one. And I think tha to bear in mind is when we dons magnitude as the housi ing, the rehab on which so' and on which so much emp vide an additional supply 0: is to supply that additional we have and making it a little And also in connection wit reflected. And I think that of a thing that the city ha rehabilitation. First, there is going to 1 e how good is it, and is it sui a' Second, there is going to b~ Mr. BARRETT. Will the gi n I am wondering if we co d Mr. Fino. I think he was t 1 the reconstruction and rehal il Am. I not right, Mr. Fino ~ Mr. FIN0. That is right. struction. . Mr. Srn5HKIN. Let me iii t Mr. BARRETT. I wanted o Mr. SHISHKIN. You hair the structural soundness 0 which is not reflected in this If you are dealii~g only ~ is built by private ~funds,: JE qi s1~ at th~ difference really lies in the isting facility instead of providing hat connection the important thing ere `with a problem of such tremen- ~d, that utilization of existing hous- emphasis has been placed recently, is being *placed now, does not pro- ing. And therefore, the great need .y, instead of making do with what ab, some of these costs are not fully ier look ~hould be taken at the kind eal with' when they are doing their a `fl dl ta eneral survey of what is available, for rehabilitation. ther test, the engineering survey. ~an yield. ossibly construe the question put by g ab~out thecost of new housing, not ion. ` ring to do with the use of new con- in m sh this point- ke sure that you are clear. engineering survey which goes into building, and that costs money too 1~i; he housing newly constructed which k `that if you separate that out com- PAGENO="0266" 260 DEMONSTRATION CITIES AND URB~AN DEVELOPMENT pl&ely the difference will greatly diminish. And if there is a dii er- ence of that sort, it may be ascribed to a number of differences in ~he problem, including the kx~ation, land acquisItion relnted to it, and ol4ier factors that I think can be generally, no doi~bt, ascertained if a car~fti1 sifting of the facts is done on this comparis4n. . Mr. FIN0. Mr. Shishkin~ do you think th4t there is a possibility t Lat the failure to abide by the D~is-Bacoñ pijovisions would be resp n- sible for this di~rence in privately const4icted housing and adm n- istratively constructed public housing ? II~sn't there this posaibil ty that that might be the reason for the difFerence? Mr. Srn5HKIN. I do not think that the Leost of the actual on-site labor here islarge enough to ~ccount for any substantial difference in this. I think that the costs involved, particularly the cost of la td and materials and other eleme,ntsthat go intè this, the total costs are so large that I do not think that this element ~vouId be substantiaL Mr. BARREPT. The time of the ~genUe~an~~ expired. Mrs. Sullivan.~ ~ ~ .: ~ * * I ; Mrs. .SULLIVA~. I am going to pass, Mr. qiairnum. I amsorry thatI was delayed in my office~nd missed much of yo ir testimony, Mr. Shishkin. We have problenis back in my district,a d I had to handle them over the lbng distanèe telephone. But I w 11 read your testimony carefully. - Mr. SrnsrnuN. ~ Thank you, Mrs. Sullivan. Mr. BARRETT. Mr. Moorhead ? Mr. MOORHEAD. Thank you, Mr. Chairman. Mr. Shishkin, I enjoyed your testimony~-srery much, particular y your story abo~it the ILGWU housing pr4ject in New York Cit ~. I think if we could handle all relocations 14~ way they did that o e we would not halve the trouble we have hadlin different parts of t e countryin relocation. The next thing I would like to discuss with you, Mr. ~ Shishkin, s this new community proposal, particularly y6ür suggestion, as I get i~&, on page 8, that the new communities could be ~used for major relocatio t work in connection with a demonstration tdowntown city projec. Do you think that if we are going thdo a fairiy big job of relocation i x a city that a substantial part of that could b~ handled in' a new cmi - mumty situatioii which is priv~eenterpris~j~here they have to ha~ e to make a profit, ~do you think it can work l4at way ? Because I b - hove that maybe ~the mayors of the cities th~t tare not' `very much i favor of this might be persuaded to suppor4 it if we can prove ths tothem. I' Mr. Srn5HKIN. I think they should. And I think the experi'enc in the new towns that have been initiated nearby, here and ` in Cali- fornia, by private interests for profit have d~rnonstrated that there i not only feasibility, but also a need. Becau~e here you have a ne~ community springing up with some indust*ial facilities in it, an~L middle-income, high middle-income and high~-income housing in that community, and ~et if there arc any of the s4rvice people in the low income bracket tht~t are working in that com4iunity, there is no hous ing for them, eveii domestic servantshave to ~ommuth back and fort from the nearby Cities,, at great expense and!a `burden on them, an so their availability just isn't there. ~ . .` :1 PAGENO="0267" So in 0 ought to I has~ d t, oils for the encourage ~g to serve But i redevelop, the real probleir PAGENO="0268" 262 DEMONSTRATION CTPIE~S AND . ~J~IU~AN DEVELOPMENT or in the city, there just isn't 1~nd aVai1$1~e within the city to b ild that additioii~1 housing and to relocate. [Ji~hat has been the prol lem that everybod~t has been up against. Asic any of the local hou ing authorities. * ~ ~ Mr. S~r~PHENs. You believe, then, that h~ proposal for the den on~ stration cities would be more adequate and take better care of the h us~ ing problem of removed people tlaan is doi~ie under the present ur an renewal program? Mr. SHIsmuN. Well, I think that the t*o are very closely rela ed. And as a rnatt~ of fact, my r~oinmendatib~ihere was to relate ti ose two titles substantively in the language o~ those two bills. I th nk they ought to b~ tied together here. And 1~h~t is my recommendat on. In other words~, the relocatiowseetion of t~ie Urban Renewal Act of 1966 which is~proposedhere.shou1d be either substantively or by re: er~ ence included ilsewhere in the city demo~stration program so t Lat the provision made for disjilace~I families ih the urban demonstrat on act be brought up to date, and adequately ~;provided for in both p .`~ grams. Mr. STEPHENS. Isn't the proposal of a Demonstration Cities Act an acknowledgn~ent, by us that w~ have not ~ad adequate planning in urban renewal If we make a difference b4veen demonstration ci ies and urban re~ae3vaJ ? ~ Is&t that ~an ackno~4edgment that we have ot properly plann4d our~urban renewal progr4zn in many of the plac s? Mr. SHIsrn~E~T. Well~ 1 think that the ~pianning has been th re. And I think thM the pro~ishm for planth~ig has not been sufficie Lt, when it comes tO the fthiding of these progr~ms they have always b en less than has been asked or recommended. . ~ And I think in that Se: se that there has not been adequate provision f~r planning. Every ye r, I come here and. talk about the i~eed for re~arch, for example. A id yet prior to the establishment of the new ~rograrn the Housing ~ Home Finance ~gency has not got any m~ney for planning. A id there is a need for that And those things c~ight to be provided in he future. And tI~at is what I am looking to~.the proper planning a id renewal progr~n ~ as well ~ as tl~ planning~ for * the people that re going to be affecljedby slum clearance. * ~ ~ j ~ Mr. STEPHEN~Ø Would'you say that unde~ the demonstration cit es proposal there would be a better way of ~laiining to take care of people who have been required to move out of these areas that ha ~e been renewed that would be better than whi~twe have done under t Le existing progran~ ? ~ ~ ~ ~ Mr. SrnsinaN. That is right. And ther4fore I think we ought to enlist the resources of the community to a ~uch greater extent th n we have before i~i assuring this relocation ~d freedom of. moveme it on the part of the people that ~v~$nt ~mitablojhousing. I have testif~d before this committee ~n past years about t ~ special problem that is presented in this res~ct by the elderly. A d if you take old people, they are very fussy aI~out where they are bei g taken and how they are being moved and what kind of accommod i- tions they get. But apart from that, they~ have real special neei s. And just to have them locate anywhere is not good enough ; it is n t humane. And therefore proper provision needs to, be made for the ~ to have some freedom of choice, and at the ~ame time to enable the i ] PAGENO="0269" 263 DEMONSTRATI~N CITI D URBAN DEVELOPMENT to ftnd suitable, decent qua~rter e ~ here that they otherwise would iiçt `be . able to find, and a~ 1 p01:11 ( d ut before-'~-and I believe ours was one of the earliest recommen a iQ ~is for rent supplementation in the case of the elderly, to i~o~ride ( r ~ ut supplernents after the relocation for a period of time, if they ~t e ~ ligible, in cQnrlection with finding decent quarters for tI~em aft 1~ y have beeii moved out of the area in which they live. But th s tuations involve human tragedies, it is uprooting, and i is delo ti4 ~. And there is a * public responsi- bility in that area that we ne&~ t i~ cogthze. Mr. BARRETT. Mr. ~t Germi~ ~ ~ Mr. ST GERMAIN. M~. Shis~ in yOu have me confused. A demon- stration city, under th~ Deino~is r~ ion Cities Act, should stay within a city. ~ And you are ta~Eking ab~o t new city-I agree with you, icloca- tion is one of the biggest prc~b e s we ~re going to face in sectioi~i 9. And I also agree witI~ yOti th~ rel )cation payments should be brought up to date, updated. ~ Howe~ , : think the problem still remains as to where are we goii~g tO p t ti ~ people. And `I cannot buy your suggestion that you put 1~hem ~ it~ out the ctty, because the whole pur- pose, the whole theoi~y I~ehin41 t~ s is to renew a city and the people and to improve the soci~l, ec q~ ic conditions of the citizens within the community. Now, let's forget *w Yor p where you are going to a po io: have had 100 large cfties and e we have to think aboi~t tl~em. Now, what do you do in th s , Si you are going to have a demo tr~ community ? How, the~i, d O~ take these people of ~ vai~yin r~4 limits ? Will the city fath ~ city itself, the fact that th ~ Mr. Srn5HKIN. W~el1, Mr 1 forget New York a4'd Phil ~l ~ getting Providence.. But I think that what I n~ saying here. is ~ a matter of simple arithmetic; If you took at Ii ~ s urn area that is being subject tO the demonstration cities prOgra , ~c are dealing with substantial quan'- titiesof housing in *hi~h p 0 1e are now doubled up, in ~vhich `there are two or three. fan~ili4s an so etirnes four farnilies~-~--- Mr. S~r GER~MAIN.~ I do n i ci sagree with you. ~ But answer this question for me. D~ ydu fe ~ ` 1~ these people will buy the concept-~-- perhaps this is. the s~luthon ` ttt do you really feel that they. will buy the concept of `being~ told, y a e going to `go outside the town, ybu are going to go outside `the co flu iity ? Mr. SHIsHKIN~ I~ proper ~ id decent housiii~g is. provided for them in the suburbs and' ~he new t * , or~ outside the community, I think they will certainly ~o for it ~ d I think for a great many of them it wilibe a real escape from ~ ry very unhappy existenèe. But as far `as the asse~pta~ e I y the eity. of it "is êoncerned I think the pressures withir~ the cit~r an~ the burdens on its relief rolls, lack of tax contribution, an~1 so ~ i~U , are so great that the city ought to support that.~ ` ~ , ~ ` ~ . , ~ i ~ ~ ~ ~ ~ . . >hiladelphia, or Detroit or Newark, of a city. But let's remember, we ave thousands of smaller cities, and `ialJer'communities, Mr. Shishkin, if tion city plan within that particular reconcile your suggestion that you mes arid put them outside the city D for that, and `the citizens of the ~ ` going to: J~ pushed out of town? ~ermain, let me say that you may Ia but I' am sure yOu are not for- PAGENO="0270" 264 DEMO*STRATION CIPIE~ AND URAN DEVELOPMENT Mr. ST GERMAIN. How about the area ~you are going to put t em into ? Then the implication is that the r~lief rolls of the adjoi ing communities would then have to take over. Mr. SrnsrnaN. No. I think that what ~is proposed here is a t~ tal program in which you do have in one package not oniy the rehou~ing but also the welfare . service, the training~ and all the elements that are needed to ~ut these people on their f~et to enable them to l~elp themselves ; tô~do a totai job of that kin4 would not require further relief rolls. * ~t'he objective here is to r4duce the relief rolls ~n'd eventually eliminate the problem. I * Mr. ST GE1Th~AIN. Mr. Shishkin, what w~iuld you think of this c~m- mittee giving thought to a concept whereby we would have a t~vo- section or two-stage demonstration cities ~ act ? One for the la~ger cities and one for the smaller cities ? It is my information that~ we have approximately 100 cities of 300,000 population or above. We h~ve approximately 5 cities whose popu'ation is~1 million or above. If~ we have a Demonstration Cities Act the mere title indicates that the p~ir- pose behind this is to find or conceive a p1~ui which will cure the ~lls of our cities anki help the citizens within @ur cities. And if we ~re going to * do that, certa~inly I think we ought to start thinking o~f- If we have 100 cities whose pop~ilation is 3~O,OOO or above, and 5 c~r 6 cities with the population of a million, then the demonstrationç I think the important demonstration will b~ in those cities of 3OO,~OO or below where their problems are entirely different from a city 1~ke New York, Detroit, or Los Angeles, or San. Francisco, where, bec4ise of size alone there is such a, magnitude of prc~1ems. Mr. SrnsrnuN. Mr. St Germain, the whoffe burden of my testimo~ay was that this ought to be a problem across th~board, including midd~le- sized cities and smaller cities. ~ ~ I thinl$ that that is the intent~of this proposal, that is the intent of the entire message by th~ Preside~it, and that is the intent of this legislation. . . . Now, you are asking me to specify a line in~which you would sepa~te this into class I and class II, the big cities a~nd the ~rnall cities. I m not willing to do that. I think this ought to include both. But I m not going to be put in a position where we ~re going to get under t e Shishkin wire ; I will 1e~ve that to the c~rnmittee. You have t e evidence. Mr. S~ GE1t1~WN. On page 8 of your stat~ment, I was happyto ee that you agree that in addition to the mered$~lopment of new hotisi g and improvem~ts in existing housing tha1~ ~ should also see to it that an effort i~ hutde to provide more job ~ppo~rtnnties. Now, I not talking.about just those opportunities th$tt will be provided by t e rebuilding, but I am talking of those of a p~rmanent nature. Mr. SHISHKIN. Industrial ~1evelopment, too. Mr. ST GERMAIN. That is correct. Don~t you feel that the co - mittee should give some thought to industrial de~velopment within t is particular Demonstration Cities Act, and als~o to see to it that once e have improved or made the supreme attempt~ to improve a lot of the e cities, that it will be a lasting effect, and. i~i order to be `lasting e must provide or see that they provide emp'oyment on a permane t basis~ I Mr. SHISHKIN~ That is right.' And in l4nd acquisition f~r the e communities that provision should be made f~r sites for industrial d - PAGENO="0271" DEMONSTRAT~ON CIT E it, and I thir~k ~he r s T. The ~im~ of s. Thank ~kin, I to~ ND URBAN DEVELOPMENT 265 ~ou1d be left to the free enterprise ~an has expired. flairman. for your vei~ ;o new cally, ( IDevelopme reakthrough ~t it should nsport, in-. ~. and s~ PAGENO="0272" ood row, t~ion ues- `I this -ifly sed .on. a v, I the pe- are tor hat red. out [ity ing fror- ted in of tho )fl~ the Dfle Drk He or ing ;ult Lek hat lew his ~raI von Liii- ~ti'J ad Lilt. 266 DEMONSTRATION CITIES AND URBAN DEVELOPMENT the new Secretary of Transportation as soon as he is set up is a one. Obviously we don't want to wait un~i1 perhaps years froni i when the DepRrtrnent of Transportation~ might acquire jurisdi~ over urban traitisportation, too. L Mr. SHISHK~N. That is right, I agree wil~h that. Mr. REUSS. Thank you. Mr. BAIUiErP. Thank you, Mr. Reuss. Mr. Fino ? . Mr. FIN0. Thank you, Mr. Chairman. Mr. Siiishkin, I want to repeat myself, because, based on some q tions I have asked, I might have created ~me wrong impressions favor and I support the aims, the objectiv~s, and the purposes of legislation. . A There is oiie section. of this bill which d1~sturbs me, and ~ appare it ha~ disturbed members of this subcomm~tee, and apparently b: on the testimony of the three mayors, it ~has created some quesi And that is the section which refers or pr4vides for the creation Federal coordinator, which I have referred to as a commissar. No am afraid that such a coordinator inight~ unduly interfere with autonomOus 1owers of the ]ocal government. We have had an e~ rience in New York City with a gentleman whom I am sure you familiar with, Mr. Moses. He was the city construction coordim under the slum clearance program. An4 ~he was the king in I program, and he could do wrong as far a~ he himself was conë~ri He handled th~tt program autonomously ~4ud did eve~ytliing witi~ regard to anyo~ie. He picked his sponsor$ without regard for.~bi and that created a mess up there. And, ~f ~urse, this is the Ui that bothers me, that this might happen again. Now, all three mayors have expressed sop interest in how the c~ dinator would be nominated and appointed. And they have undic~ by their testimony that they would be interested in seeing thai this legislation we write something that would permit the mayon local governmeiits to make recommendatio~is or suggestions as to i the coordinator might b~ I brought out ~esterday. in the testim of Mr. Lindsa~y that it won1d~ not help ~n ~ew York City if Secretary of JH~ousing and Urban Deve1o~ment should pick some from Washington, Th~J., who didn't know~anything about New ~ City except that he visited the city to see s4me of the areas there. wouldn't know.wher~ the Bronx was or wl4ere Bedford-Stnyvesan Harlem were located. Now,how do you feel about having sometli in the law, in the legislation that would charge the Secretary to. con with the mayors of the localities on the quQstion of selecting and p ing these coordinators ? . . Mr. SmsmilN. . Well, Mr. Fino, I wou1d~ like to-say first of all I .1 am familiar to some extent with the pr~b1ems of the city of ~ York. And I $ympathize with them, and 4s I think everybody in country does. ~And I think the fact is thatiBob Moses is not a Fed~ agent, he is a loéally appoiiited agent. Mr. FINO. And we had a lot of trouble wi4h him. Mr. SHISHKIN. He is a locally appointed coordinator. czar if will. And you are defeating your own purpose by citing that ex pie, because even with having a 1o~al coordinator appointed you have the same problem. . . Mr. FIN0. Mr. Shishkin, maybe the trouble was because he that fancy title of coordinator. It mad him feel that import PAGENO="0273" DEMONSTRATION ~ITI] Maybe if he were oi~iiy an ~iifc~. so important. Sometimes the are above everyone else. Mr. Sm5HKIN. When the or t not be so bad. Mr. Eastman ~ I roads back in the. last war. ~. good 1)OSitiOfl to hold in this pro ~ But as to the Federal resp i whole intent of this legislatio Secretary to COflSUlt with the 1 think this is one in which the: e cooperative relat;ionship, and i i to be doi~e as a matter of cong cient expression of the need `t ticipation in the city dernonstr confronted with the problem o j upon the people something th t willing tu accept. Mr. FIN0. Am I correct in u should consult with the local f Mr. SHISHKIN. I think tha I do not think it is necessary sort in the statute. I think that Secretary in the act establislii will-have already conveyed tb necessary to have additional lang Mr. FIN0. We have that e: p law, and that is why I am au a the law, so that there would Administrator or the Secretary Thank you, Mr. Shishkin. Mr. SmsHKrr,~ . Thank you, : I: Mr. BARRETr. Mr. Widnall ~ Mr. WIDNALL. it is good to e You have given us a conside ing bill. We know of your In o over many years. And we ap You speak of matching fun As the bill now staiicls-and ju t the municipalities share of th three-fourths with O~11 incrensin concerned. Do you think this I tion, or just relieve the cities ou 1 Mr. SIiISHKIN. I have * deal Widnall. And I have asked i h tion be stepped up. And tha the immediate, urgent proble i program anth&rized back in : 9 *tional funds are needed, and certainly desperately require . Mi~. WIDNALL. But steppin~ funds,thjs just relie'~tes `the in 60-878-66-pt. 1-48 D URI~AN DEVELOPMENT 267 onal.offic~r he would not have felt makes these people feel that they' problem arises a coordinator may iite `a :job' of coordination of rail- I think a coordinator may be a , also. lity to consult, I think that the 0 ph~e the responsibility on the agencies in all respects. And I thinly should be consultation and ition to that, I think there ought nal intent~ I think that is a suffi- vjde for the maximum local par- programs so that you will not be somebody's whim or fiat imposing ~y are not ready for and are not rstanding you that the Secretary ls in making ~ the selection? should be the intent of the law~ `ite a special requirement of that whole basis of his performance as hat agency plus this legislation iifficièntly, and I don't think it is e to carry it out. uce in the interpretations of the oncerned about spelling it out in question a~ to the power of the `no. ~ Mr. Shislikin. fundof iitformation on the pend- ge hi the field and your expertise ~te your testimony. the city demonstration program. ug urban renewal as an example- ching funds has been cut by over IC amount : of funds for the area ing to imprOve the present ~sit~- 1 that in ~rny statement here, Mr. he share of:the Federal contribu- ir recommei~dation. I think that * is that the urban development ias not been :adequate, that addi- a~ddkional help in ~that area is the fm~id~, the amount of Federal pality. of the share that they have S ca 4 id is ca c~ ad ssi )r~ ist t1~ t~1 ci h~ g bi~ ec~ U u~. o1~ *crit ~. ~ 5 ha 1?. PAGENO="0274" )Uble ~rou- that ewal Lend- two- t has `oils- done tion. ~tion that ithin Do will k on 1? rams E~. I for ions, LOUS- will iblic safe, ithe lems paid ople and Funk n b~ pro- sates ~uite oney ~ber~ f an the nity. just blish sing, )Clfl 268 DEMdN~TRATION CrI!EE~ AND *UI~BAN DEVELOPMENT been coiitribu~ing. In the cud won't y4 just ha~ve the same tr with funds ? I Mr. SHISHRIN. Of course, if they don'tlprovide them you ha~re ble with funds. But I have a recommendation here in my statement on that I want to call your attention to in dealing with the Urban Rei Act of 1966. On page 9, you will note that our conver~tion has asked for an an ment to the bill that would "increase tI'e Federal grant from thirds to thre~-quarthrs of net project c~st." And that is the recommendation I ha4e submitted. Mr. WIDNAtJL. The great labor organiz~tions that you represen had a long and oftentimes the originating~interest in low-income I ing legislation. And this is clearly on tile record, and you have ~everything you could to endorse and enforce that type of legisk iN~ow, isn't it a matter of concern to you that in cities demonstr program legislation there are added so many other new programs can claim part of the money in connectioti with improvements w the city, and possibly to the detriment c~f low-income housing? you think that the money that will be ma~le available to the citie~ be distributed so widely that you won'tlhave an effeetive attac Teal slums and get the low-income housing that you so badly nee Mr. SrnsHi~IN. No, Mr. Widnall ; I think that these two prog `were not in c~nfliet, and I don't think they are even competitiv think the cities demonstration is a~ demonstration of the need clearing up these very dire situations, these very critical situa~ and that the President's message has called for mass attack on I lug needs. And I think that it is elementary that such an attack ~not be successful unless new housing is provided, including p ~housing. I Mr. BARRETIr. If you move people you 1~ave to give them good, ~and sound hoki~ing. Mr. Srnsrn~IN. That is correct. And r4ot only that, but even public housing program itself, you kno~, there have been prol ~of various kiiids, and these can be remedied if there is attention iuot only to the physical shelter, but also~ to the health of the p who are disadvantaged and who are in need of help and training finding employment, and problems of that kind. So I think these two are harmonious and go together. I don't t they are in conflict. Mr. WIDNAtL. Do you havG any view~ on how many cities c~ ~effectively hê~ped With. the amount of ~unds proposed in this gram ? It is ~juite apparent that not ev~y city in `the United ~ is going `to g4 money ` for ~a dthnonstratio~iprogram. A~ud' it is apparent that three or 1~our of the big citi4s could use all of the in That is presently in this progr~tm. Do yob h~ve in mind any nun as to cities ~that could be helped ? I ani' incli~d to feel that ~uttempt is made to help 60 or 70, you ate ~oing to water d'ow program somuch that you can't do an effective job in any commn Mr. Srn5HKIN. Well, I think, as I ha'~e `told Mr. St Geninain a minute ago,' I think that the importa4t thing here is to esta priorities of ni~ed, where the n~ed is most 4ritical,urgent and pres ~and address ~nrseIves to that first, and ich ones are found to' PAGENO="0275" DEMONSTRA~ION CI~ ES AND URBAN DEVELOPMENT 269 how effective Mr. law àL~ think that the amendments tional criteria. Mr. WIDNALL. rE re demons )ortant, an size, we wLI have a be followed later ~s, Mr. Widnall. uce that is n re program. he paid to that ~ in this c ~ leadership ~ ~rams b in select ng ares 1inthe it can be made. I Moorheacl in ~vision shoi Widnall, think th~ bade. your very ~ain on the other end has Mr. Townsend an oppor- the grou~ care, inch group pr~ PAGENO="0276" 270 ~ThMONSIrRAPmN CIfl1~S AND URBAk DEVE~LOPMENT on that. I think that is all we have in mifld on this. I .don~t thi k there is any need for me to e'aborate on this. I think the record is clear. Mr. ST Gni~AiN. No need for what ? Mr. ~ SrnsHKn~. I don't think there is an~ need for me to elabor te th~,t. I think o~r position is c1ea~r. J ~ ~ ~ ~ . Mr. S~ GERM~LEN. Youagreewith the deth~ition given by Mr. Cohe ? Mr. SHISHKL~. That is correct. The oril4r thing I think Mr. Co en should have em~hasized more,and he has ii~ doneso in his testimo y, is that the real benefit here is tothe. user of this service, to the patie t. . It is not a program for the doctors ; it is a pitgram for the patients. It is a very ini~portant consumer program. It is a very important pui lie program. It meets the need of the people. Mr. ST GERMAIN. And lastly, on page U "provision should a so be made for permitting inclusion of nursi4g facilities in section ` 31 of Elderly Ho~u~ing Projects." Do I take ti~t literally to mean act al nursing faciliti~s within a unit~ Say it is~a~ high-rise apartment or the elderly : in~ that particular unit wouI~1 you have some nurs'ng facilities, or a ~unit th~t would be taken up entirely with nurs ng facilities ? * Mr. Srn5HKIN. Well, it depe~ids on the local situation. But w er- ever (possible I think that there should be provision for nursing fa- cilities where the elderly are housed, in ho~ising for the elderly, I am not particularly in sympathy with the contept of separating the in one unit,~but if housing is provided I thing it is welito provide he necessary facilities onthe premises. But there h~ve been other problems i~~oiving similar facili ies. Take, for exaiiiple, a project in which th~e who are housed mel de working mothers. And there has been s~me question about ha ing provision mad~ ~ in that housing project ~r day care for child en. Well, if the ~vorking mother has no one to ~it with the baby, she is de- prived of an opportunity for employment. ~ So day care centers sh uld also be permitted~ And tht~t should healsoindicated as well as nur, ing care for the elderly who ar~ in r~ed ~f.it. ~ ~ Mr. ST GERM~AIN. Thankyou. , . ~ ~ ~ ~ Mr~ B~j~*~ ~Thank you, 1~fr. Shishkih, for your ~ testimony ~ his morning. We ~re certainly glad to havey4. . Mr. Srnsrn~N. I appreciate ~rea.tIy yo~r cOurtesy and hospita ity. And I am vei~ glad to ~h~we this opp~*1~ity to be heard. Mr. BARRETIL Thank you, sir. f (The statement of the AFL-CTO E~cutive Council on U ban America follows :) * ~ ~ . ~. STATEMENT BY T~iE A1~L-CIO E~CnTIVE COUNCIL ON URJ~AN AMERICA, F1~BR ARY ~ 28, 19~Q, BAL HARBOUR, FLA. ~For 2 year~ifl a rOW, restdentiai building ha* bee~a ou~of step with th rest of the U.S. econ~my. Added to the~previous de1~cits in thevoiume of new ~ ous- ing bui1~t within! the reach of moderate- and k~w-ineome ~ami1ies~, this la has resulted in a fair-reaching imba1an~e in Americ4's economic development. urban aCtion ~is n~ed to deal *ith this fnfl~nienta1 economic problen . In th~ fiseal ye~ 196T, starting next July 1, ac~oz~dtng to a census estimate. basic population fa~tors should increase the rate of ~~usehoid formation by 1 ,000. This increase alone calls for a corres~nding iu*ease in housing starts. A nuch greater. step-up in starts Is i~iecessary to redltehs the accumulated defic ts of previous years to make possible the rehousimg~of families living in slum and substandard homes and those doubled up in ovGrcrewded tenements. PAGENO="0277" DEMONSTRA~ION CI ~ S AND URBAN DEVELOPMENT 271 We support the Den~ons~rati ~1 les Act of 19~ proposed by President Johnson in his special mess~ge to C i~ ess on January 26. This is an important and at~piclous step in th~ right di e tt~ At the same time, we~ bei~eve 1~i t ~ e spedfic reconunendations proposed to carry out this program ~ire undu y t~i~ est. Their scope should be enlarged to make possible a truly effective ons a gl~ on urban blight in cities and towns, large . and small. If massive addttlons to the sup 1 oi~ ow- and moderate-cost housing, propOsed by the President, are to l~e r~alizec~, ac~ itlonal legislation is needed. We believe provision i~iust be a E~ t step up construction of low-rent public housing tQ~a yearly rate of at lea ~ t ~ ~!OO dwelling units a year. We also urge, that adequ~te funds ~e ~ad~ pro ~ t~ available to implement the rent supple~ ment program for dIsad~rah~aged eö le, enacted by the Housing and Urban Development Aét of I~65. ~ ~ . ~ The authorization ô~ t~ie 19~5 ~t ~ urban renewal was inadequate to meet the needs of eommunlti4s ~ekin tç ~ lear ~ ~iE~tr ~s1tims and rejuvenate their blighted and cIet~riorate4 ar~as. ~ ~ e ~ erefore urge that the capital grant. an- thorizations be Increased by $1 bi ~ I Ti er year for a 3-~Vear period. America's urban problE~ms are ~ ~ fOi~ most im~ortaiice to the Nation's future welfare and growth. No\~ is ~1ke ti t~ begin with ylsionand cottrage,the neces- sary long-term effort thatme~isure p Q their complexity and their size. Mr. BAi~rn. ~ We now have r. * wight Townsend, director, Wa~h~ rngton office of the Coopth~ati ~ ~ ~t ague of th~ United States. Mr. SHISEKIN. As ~ word 4f ~e arture, Mr. Chairman, let me say that I endorse everytl~ing M~*~ ~ nsendwill ptovide, I have had an opportunity to exaniin~ h~s s t I~L nt in *va)nee, and it is a good one, and I hope you will g ye him a 1 ~ e attentk~ryou can. Mr. BARBII~Pr. Than you~ ~ ~ ~ : ~ ~. ~ Mr. Townsend, we re c~rt i 1~ glad to 1 you. ~ We have had some of your excellen te~tirn b ~fore. And I an-i quite sure what you offer today isgoin ~tobe v ~ ipful. ¼ ~ , We will giv&~ou~a ~ h~ce t ~ ~ pkte your `stat~thetit, and then if it is agreeableto you, * orne of e embers will want' th ask you some questions STATEMENT OP DWIL~HT D; ` b S~D,. DIi1EOTO~R, WASHINGTON OFFICE, CQO1~ERJ~TI1~E' L ~ ` 0E' TItE ` UNITED STATES . Mr, TOWNSEND. I h~ve a st t th nt, afid 1 ` have it in bri~f form. And I also have abac~up sta e e t thn~t I `would like to put in the record that will furthe~ explai h : materials that are contained in it, because some of th~U are techñi a i nature. ~ Mr. BARRETT.' That n~ay be d n without objectic~n. Mr. TOWNSEND. I w~ml4 lik o ake the morning unanimous by saying also that I htwe ~ $ry ~ ~ egard for Boris Shishkin. ` It has been my `pleasure to ~cr1~ wi h hi on' the board of the National Housing Conference, ar~d other o vi activities, and I respect his judg.~ ment a great deal. ~ ` ` ` . ` ` I am pleased to have th~s o ~ r~ nity to present the views of the Cooperative League of th~ Un d ~ tates concerning some aspects of the legislation pending `l~efqre y r ~ mmittee. We are in favor of th~ ei~act nt f the fOur bills before your corn- mittee ; namely, the den~onstrati n ities bill, `the urban development bill, the Housing `and Urb~n P e19 ment Amen4ments of 1966, and the group practices facilities bi ~. e believe the enactment of these bills will provide necess~ry add ` O~ 1 tools to help meet urgent hous- ing needs and ei,irni~ate ~lu~n an ii hted conditions in our cities. Tm PAGENO="0278" 272 DEMONSTRATION CITIES AND URBAN DEVELOPMENT supporting this legislation, we recommend c~rtain amendments whi1 h we believe will better accomplish the purj~oses of the program atid serve the public i~ntere~t. I will briefly comment on some of the sp4cial features of the leg~s- lathion which relate to the cooperative progn4n and indicate the reasqns for our sivpoit of these provisions. In addiLion, I will describe brie~1y the amen aents hich we' 1: ration C op~ra- t~ch~ in ~ec~ y s~ieh .rc. and ongre~ am. atij and )erencc ~ I~aoi .1 ~hav Lie a cooper tive for the special as~istant and supporting staff - .~ . ` . ~ y (undjer the Commissioii's s per- __~___j policies, proceciures, and documents fo use 7e housing program. cooperative housing is dif- çle-family homes and i~ultifamily rental pro cots. :ences must be recognized and reftected in policies, proce ures, PAGENO="0279" DEMONSTRATION CI I S ND URBAN DEVELOPMENT 273 9.'T4o - der the 1 ~w-m rrie famiL~ and the i--~- I 5. ln ognized income PAGENO="0280" 274 1Th~MON1*I~AP1öN ci~fl~s ~ AND tTRBi~N~ DEv]~Oi~1v±ENT supplement program, amendments are ne~ssary to enable self-h ip programs in certain areas. This would apply to projects where he payment for services is not in cash wages, bi4 in a reduction of hou&ng charges for those who participate in the self-help. 10. We are in favor of the urban development bill, except that he FHA-insured kans under the new commttnities program should be for a 40-year tth~m. Loans for 15 years aile inadequate, particula ly under a progra~n wh~re~ the land would be~ leased for redevelopm nt and the rentaJs ~w~u1d. j~ç~ utilized to repay *he 1&ans. . . ~ 11. In the rttI~aI housing 1egis~ation offl4e Department of Agri ul- ture, amendments are reqmred t~ expand t~ie purposes of direct lo ns to private nonprofit organizations and coi~sumer cooperatives to in- dude rental or cooperative housing for m~xlerate-income famili in rural areas who are not elderly. The law n~w permits such loans o ly for the elderly. In addition, a rent supplement pro~ram should be made available for low-income families who will live in such hou~n developments of nonprofit and cooperatIve organizations fina ce under this program for rural areas. 12. PheCo&~erathe League supports with enthusiasm the prop sed group practice facilities bill. This will i$et a critical need for in- sured financing of facilities for eooperativ~medical and dental gr ps who operate on a nonprofit basis. Many~ ôommuniti~ require uch facilities to protect the health of their resid~its. ~ We und~rstaud ore detailed hearings will be held on this bill, a~idour president, Mr. J rry Voorhis, with whom I am sure most of tl~e committee is acquai ted, who is also. secretary of Group Health A~sociation of America, ill be before you with testimony March 11. 13. Since i~nagement-type cooperativ~s have the best repay ent record on FEA-insifred mortgages, we a~~prove the proposal in .R. 12766 to red~u4e th~ FRA ~nortgage insutance premium on sue co- operative mortgages. f To savethe time of the cornithttee, I am ~iot explaining our prop sed amendments in detail. However, I woi~ld like the oppoTrtunit to introduce into. the record, with my staten~e~t, a fuller explanatio of these amendments and some supplementa~y materials. Mr. BAmu~rr. That may be done, without objection. Mr. TowNsj~ND. Thank you, sir. Interest rat~es on multifamily hcmsin4 We are pleased tha the FHA.did not ~increase the 5i/4-percent int+rest rate on cooperativ and other. mortgages on multifamily project4 This establishes a d if er- ential of one-fourth of 1 percent betweenfr~he mortgage rate on ulti.. family housing audán hidividiual homes. ~ Such a differential ac rds with the polit~y statement in your repo~t last year. It reflect the lower servicing charges and ~eater attr~ction of multifamily ort- gages. When funds are not available in the private mortgage mar et to purchase cooperative mortgages or urban renewal mortgages a par, plus a reasonable commitment and purchasing fee, there are s ecial assistance funds available in FNMA, pt*suant to your congres ional authorization, for the purchase of thes4rnortgages on such ter s in order to pro~ct the consumer and publ~ mteresth involved in these programs. We.~wa~ited. to m~ke this o rva.tion. PAGENO="0281" DEMONSTRA~ION CI I S AND VEBAW DEVELOPMENT 275 ilL conclusion, we suj~Por1~ I~ enactn~nt ~f the * bills before this committee `and b~li~e that ~n oposed amendments will better en- able the fulfillment 4 tl~eir o~ ec ives~ (The amendments~ and su~ 10 ~ entary statement referred to ~ fol- low:) `~ ~ ` ` ` AMJ~NDMENTS P~oros1LD ~ Co PF~RAT1V]~ LEM~~TJE OF TILE U.S.A. We are in favor of the enagtme~it of he four bills before your committee : the demonstration cities bill~ th~ urbá ci velopment bill, the Housing and Urban Development Amendments ~f ~ a d the group practice facilities bill. In supporting this iegisi~tidn, We r$9 ~ nd the following amendments which we' believe will better aècom~lish the $ i~p ses of `the program and serve the public' intere~ts : 1. In the demonstratlc~n cjties r ~r in, amendments are required to assure' that an adequate additio4~ia1 hotisi ~U ply is provided for our growing popula- tion and for those who w~uld be d ~ lac d In carrying out this and other govern- mental programs. To pi~odt~ce this ~4 itional supply of housing for moderate and low-income families, sub~tanti 1 inc eases are requlred in the authorizations for these prograths. Mo~eo~er, i s ecessary to utilize vacant land outside' of the cities~ as well as l~he ~and i 1~ `the cities. These requirements should be added as conditions s~rhic~ a ~t ust' meet to qualify for the additional Federal aid contemp1atec~ by the ~L n~ stration cities program. 2. We wholeheartedly support Ii ` endinents contained in section 102 of the housing and urban ~evejopm a a endments which will remove technical obstacles in transferring ~nai~age e t~t pe cooperative mortgages to the mutual Insurance fund, The an~end~nent ~ ld permit mortgagees to use the FEA general insurance fund d~bentures ~ r ~ yllig the mo~tgage insurance premiuma on mortgages covering cooper~kt1've ~is~ g wherethe mortgages have beet' trans- ferred to the cooperative 1~ous1tig * ~ ¶i iu~ fund. Likewise, the mortgagees should be permitted to use a m~itual f ci d~ nture (Issued in connection with the' mortgage transferred to t~e 4~utu I uii ) to pay mortgage insurance premiums on mortgages under the g~ner~U ins r ~ fund. Since `these changes remove the basis for objections by n~ort~agee o transfer of mortgages to the mutual fund, the present law w$uld be a n~ d to remove the requirement that the mortgagee consent before~ FI~A can t~t sfer Insurance ` of cooperative housing mortgages to the mutual ft~nd. ~ 8. We strongly oppose ~e r~peal~ ~ ch is listed `among the technical amend- inents In nomenclature ir~ tit'e ` O t e `housing and urban amendments bill. This would abolish the FI~A posit1c~i of pecial a$~s1stant for cooperative housing which Congress estabUsli~d in sec~ n 02(b) of the Housing Amendments of 1955. Certainly such it :re~eal is no~ te hnlcal amendment or change in nomen- clature. It is a matter o~ m~tjor ~i~i O~ ance and substance. The Cooperative League of the U.S.A. urg~s ai~d re~o iXi nds that this provision in the present law should not be repeale~l. Inste4td i~ should be strengthened and reaffirmed for the following reasons : (a) In enacting the existing la* 1 ears ago, the Congress carefully con- sidered the need for such legislati n i~1~ ch was supported by cooperative, con- sumer, and public interest g~oups. Th t need not only continues today, but is even more urgent. (b) There Is a need for the spec 4t a~ Istant and supporting staff which will have the responsibility (un~ler the C nil stoner's supervision) to devise uniform policies, procedures, and ` d~cuments f r se in the cooperative housing program. Cooperative housing is different fro iti le-family homes and multifamily rental projects, The differences ~ J.nu~t b e~bgnized and reflected in policies, pro- cedures, and documents wl~iëh are ~` ~$t ed by those Who have a special know1~ . edge and experience with tl~is p~ogra (e) The retention of such a sped 1 ass stant and staff on cooperative housing is necessary to avoid the es~abftshm i~ oi~ lffereflt policies and different methods that would result if there was a d~ff s~ n and scatte:ring of responsibility' for policies among the insuring, zO~ie, oi~ tbç~ offices of FIIA iiistead of the present concentratioli of resporisibi~it37 ther~ r ~ ` the special assistant for cooperative ~ ho~ing. ` ~ (d) In eertain' insuring q1~cE~s the~e 1~ n tinfam1ii~rit~ with cooperatives and a lack of sympt~thy withthe~ bocaus~? i:i are new in the particular area. There PAGENO="0282" 276 DEMONSTRATION; CITjE~ AND URBAN :DEVEtOPMENT is a tendency to put aside such unfamiliar matters and work on other c ses, particularly since the offices have more than en4ugli to do. In 1955, Cong ess recognized the need for a special assistant and $taff `on cooperative housin to provide necessary assistance, guidan~e, and expe~Ung in order to carry ~ out the iaws and rn~ndat4s of the Cot~gress u4ating to tb~ encouragement of the coop~ ra- tive housing program. The law wisely provide tl$~± the person appointed sp~cia1 assistant for cooj~erative housing should be fullyjsy~n~athetic with the purp~ses of the cooperativ~program. [ . (e) Through the years Congress has recognize~1 the great benefits and ad~an- tages of cooperative housing to the consumer. 1~his is a program which en bles people to help themselves through downpaymentsitoward the financing of the pro~ gram ; through sharing responsibility for the n~atntenance and upkeep of the property ; and through democratic control over their community and its activ ties. Cooperative housing has resulted in producing b~tter housing at lower mo thly cost for the consumer. At the same time, the people in cooperatives work tog ther in providing education, recreational, and other c4mmunity services. (f.) As to the law enacted by the Congress 114 1955, there is an even gr ater need and urgency for it today. New programs ~have been enacted by the Con- gross, such as the rent supplement program an4 the below-market-interest rate program, which ~ include projects undertaken jby housing cooperatives. To . implement and effectuate these programs, it is ~ecessary to have the skill and experience of those who have specialized in c~operative housing. Other ise, we will lose the benefits that cooperative cant bring to these programs. As quoted elsewhere in my testimony, an independe~it survey of 221 (d)(3) pr ~jects concluded that cooperative projects produced housing at lower monthly ch rges than rental projects similarly financed ; also, tl~at cooperative housing de elop- ments produced communities which had a better~upkeep and a better atmosj~here of mutual respect. (U) Since new legislatión'bas been enacted si~nce this law was passed in 1955 it is necessary to update the provision to that IL will refer not only to coc~pera- tive housing which is to be insuredhy FHA un4er section 213, but also co~pera- tive housing to be insured under section 221(4) (3) or under the rent supple- mont provisione contained in seetion 101 of the ~iousing and Urban Develoj~ment Act of 1965. Accordingly, we propose that ina$ead of repealing section 14~2(h) of the Housing~Amendnients ~ of 1i~55, this profi~ion should be retained i~i the law and should ~ be amended and strengthen$ by the following amencT~nents which would update it to refer to other sectidna subsequently enacted by the Congress relating tocooperative housing: H.R. 13064 is amended by deleting subsection (b) of section 212 (at p. 23 lines ~ and 4) and inserting in lieu thereof: "Section 1O~(h) of such amendments is amend~d- "(1) by Inserting after the words "sectipn 213" : and sectiOn 221 (d) (3) " (2) by inserting after the words "as am+nded" : "and by section 101 of the Housing afl~d Urban Development Act of 19~5, insofar as such sections relate to cooperal4ve housing" ; and "(3) by striking out the words "such se~tiou" wherever they appe r an~ inserting in lieu thereof "sachprovisions r~lating to cooperative housi g." 4. With the recent increases in interest rat~ in the private financial arket, it is becoming ilicreasingly difficult to obtain cc~kstruction financing at reas nable interest rates and reasonable service charges. ~Phls poses a serious threat to the housing programs under section 221(d) (3), in~ludingthe below market i terest rate program to serve moderate income families and the rent supplement program to serve low-income families. It is necessary that affirmative measures be taken which will assure th~ avail- ability of construction financing for such projects at reasonable interest rates and reasonable servicing charges. In those ~ases where FNMA is iss~iing a ~commitment fc~r the purchase of an FHA-ins~ired mortgage under secti~n 221 (d) (3), we ro~omrnend an amex~dment whicl~ would provide that FN1~A can also make FlU~-insured advances during con$ruetlon pursuant to such com- mitment. Sin~e FNMA will uljimately pur~ase the PITA-insured m rtgage on the complelied project and there is an ur~ent need to meet the pro leni of construction fihiancing, FNMA sbould be authbrised to make advances nor to the completion of the project, so longas each ~clvance is insured by PHA We propose that FNMA's advances be limited to a participation of n t mere than 95 percent in the construction financing, so that there will be a mo tgagee which would participate in the advances for the balance and which wi 1 have the responsibility of providing the necessary servicing during const notion. PAGENO="0283" DEMONSTRMVIC constr ~ for the ba ~ of advancE nce endorser kn: Housing Act is or over, o Hoiisi PAGENO="0284" 278 DEMO~T~EAflON CITIES AND tRB4I~ DEVELOPMENT amount which e~ be e~i~ by its 1ncom~ wIi~th~property is operated o a nonprofit basis J~resent i~'JIA app*isal fornrn1a~ which capitalize income re appropriate for pi~opertyoperàted ot~ a profit ba~s; ~ They are~ hot workable for property operated ~ on a nonprofit basis by a coop~rative which seeks to prod ce only enough incon~ to cover its costs. The proposed amendment is ar~ follows : ~ "ER. 13064 is aitiended by Inserting the ftdlowin~new section: " `Snc. . Secti~ni 213(1) of the Ni~tioha1 IJousi~g Act is amended by inser ing after the second ~ntence thereof : " ` "As used in this subsection, ~ `~p~raised valu~ of the pfoperty for contin ed use as a cooperative' means a valu~ which, wh4ii established for purpose ~ of determining the bisurable mortgage of a cooper4ive, will result in a mort age amount on whiehi the debt service ~án be met fifm the income from the p op- erty, after the p~iyment of all ôpe~ating expen~s, when it is ~ operated * y a cooperative on a nbnproflt basis."' " 8. Another an~eZidment required In section 213 i~ to increase the supplemen ary financing to enable necessary. improvements to J4~ made in existing coope tive housing so it cati keep pace with the requirement~ of modernization ; also, to er- mit the addition of community facilities when exjjperience has demonstrated t eir need. In 1~61, by adding subsection (j) to sectioti 213,, Congress wisely ame ded the cooperative housing provisions to permit su~plementary financing in 0 der to provide for necessary iniprovements in cooperative housing so that it can eep pace with requirements of modernization ; also to permit the addition of om- munity facilities ~vhen experience-demonstrated t~ieIr need. However, that 1 gis- lation included alimitation thatthe suppiement4ry financing could only be pro- vided to the ext~nt that the original loan had ~en r&tuced through prin ~ ipal amortization. We have found this legislation i4iworkabie. To make neces ary improvements an~kl community faeil4ties, finanein* is requiredin a larger am unt than would be available under the present cellir4 A supplementary loan ca not now be made in tin amount which, when added 4 thepresent mortgage bal nce,. would increase the indebtedness above the origi$ial mortgage debt. Since hese additional facilities will add to the value of ~1ie property beyond what was covered by the original mortgage, it is reasonabi~e and proper that the mor gage be increased to recognize the ~ increased cost an4 value involved in the no im- provements and betterments. Accordingly, we recommend the removal o the present unworkable ceiling as a statutory limitation on the amount of a s pple- mentary loan. * . The proposed amendment is as follows : "H.R. 130G4 is, amended by inserting the follo~ving new section : . " `Sno. . Section 213(j) .~of the National Hof~sing Act Is amended by i sert- ing at the end $f subi~aragraph (~) (A) there4f : "Provided, That in the case of improvement~ or additional community fac~llties, the total outstandi in- debtedness may exceed the origina~ principal o~digation of the mortgage y an amount equal to 97 per centum of the amount w~lch the Commissioner esti ates will be the cost of such improvements and con*nunity facilities ;" ` ". 9. To help provide adequate housing for lower~income families under the dow market program of section 221 (d) (3) and the rent supplement program, a end- ments are necessary to enable self-help prograi$ in certain areas. This oulti apply to projects where the payment for servi~es is not in cash wages, ut in reduction of housing charges for those who pa4icipate in the self-help. A pro- vided on elderly housing under section 202(e) (~) of the National Housin Act,. there should be an amendment to section 221 (d) ~3) which provides that the FHA may waive the ~revailing wage requirement in é~ses where laborers or mec anics (not otherwise ~mloyed in the con~truction of s~icb housing) , voluntarily onate their services ~ithout compensatio~i for the pn4pose of lowering the cost o con- struction and the FHA determines that any 4niounts saved thereby are fully credited to the cooperative or other nonpro1~t corporations undertaki g the construction. ~ The proposed amendment is as follows : "H.R. 13064 i~ amended by inserting the following new section: " `Szo. . Section ~l2(a) of the National Housing Act is amended by ci leting the period after the third sentence thereof andkinserting tim following: "but the COmmissioner may waive the appjication of this section in c ses or classes of cases where laborers or mecha~iics (not otherwise emplo ed at any time in the construction, of such housi4ig) voluntarily donate the! ser~t- ices witbent eompenstion for the purpos of lowering their housin costs PAGENO="0285" DEMON~TRAflO~.T C X $ ~ D URBAN DEVELOPMENT ~ 279 in a cooperative hoi~stn~ pro~e t a u* the Commissioner determines that any amounts saved thei~ei~y are ~n1J~ credited to the. cooperative undertaking the construetio~i." ` "~ ~ ~ ~ ~ ~ . ~ 10. The urban develor~me4t bi1~ he id be. amei~1ed to provide that the FHA- insured loans under the ~eom~ñ nit es ~ should be for a 40-year term. Loans for 1.5 years are i~ad~quat~ ~ icuiarlyttttder a prograixi where the land would be leased ~or red~veiopme~t a~i the rentals would be utilized to repay the loans. ~ 11. In the rural bousii~g legisla I r~ f the Department of Agriculture, amend- ments are required to e~pa4d th ~ oses of direct loans to private nonprofit organizations and consui~ner coop ~ ti es to include rental or cooperative hous- ing for moderáte-income~ far~dlies ho are not elderly. These loans should be ~tt the same rate oi~ ~ inte~rst as is ~i W provided on loans by. the Department of Agricultureto provide h~usi~ig fo t ~ lderly. The law now permits such loans ~only for the elderly. Ir~ ad~iitio , i~ lit . supplement program should be made ~tvailable for the low-inc*me ~ami ~ ~7 0 willlive in such housing developments 4:~f nonprofit and cooperal~ive orga lz ~ us financed i~in~ier this program for rural areas. There are other am~ndm ~ s ~ quired in t1~e housing legislation of the Department of Agricul'tm~e (ihlch ~ l~e s are submitting) which would enable co~ operatives and nOnprofit cori~oratq 5 ~ provide housing for low and moderate- income rural residents Who lack ~i c~ nt income and resources to obtain such housing. 12. * since management~ty$ coo e ai~i es have the best repayment record on PEA-insured mortgages, we appr v e proposal In H.R. 12766 to reduce the FHA mortgage insurance~pre~xdu . o ~ ~ ch cooper~ttive mortgages. i3. When funds are no~ availab è ir~ he private mortgage market to purchase ~cooperative mortgages or urb~tn re e * ~1 mortgagee ~tl~ parplus a reasonable corn- mitment and purchasing1 fe~, th ~ ~r special a~i~t~nce funds available in FNMA, pursunt to ao'ngr~ssi4nal ~t ho izations for th~ purchase of these mort- gag~s on. such terms in ~rde~ to i~ to t, the. consumer an~ public interests In- volved in these pro~rarns~ To the e ~ t that additional authorizations are re- quired, they should ~e prpvided in o dé to~ assure that adequate special assist- ance funds are made ava~lab~e to M for its purchase of such mortgages on cooperative projects o~. housing p ~ ec~ located in urban renewal areas when the mortgages are insured by ~?HA. :SuprLEMENTAa~ STATn~ T bF C o nz~ TIVE IJuAGUE OF U.S.A. o~r ADVANTAGES or Coor~uL~4IVns NI~ Snc~xoN 221(d) (3) A. $t~nimary of oooperati~e eaiperie e A growing number of e~oj~$rativ s ~ utilizing the financing available under section 221(d) (3) in ord~r t~ pro * e ousing for ~rsons of moderate income. 1The cooperatives built w~th such * a lug had bëén outstandingly successful. They have demonstrated tha~ coo e aU es are often better suited to meet the needs of moderate-ij1eom~ fi~mili ~ tb n nonprofit rental projects or limited dividend projects. 1VLoreo~rer, coop r U es have been able to operate effectively under the income limita~ti~ns and ~ cia restrictions of section 221 (d) (3). In- spections confirmed that those wh ay moved lnt~ cooperative projects have incomes which conform to ~he limits e ta llshed by EllA. B. E~peeiaZ advanto~ges ~uZ a~ttribut ~ f c operc~tii)e 7~o~sing Properly organized cooj~eratives ~t d~ section 221 (d) (3) have the following advantages over rental pro~e~ts wit t e ame finai~clng: 1. Cooperative monthly cha~ges v ra e abOut i~ percent less than rents for cOmparable properties bec~use of lo ~ r acancy and collection losses and reserve requirements ; lower adthI~iistratio t~à malütenançe costs ; and better care of the property by the resIdent owners. . . 2. Cooperative homeowr~ers can x r~ se democratic control over their corn- munity and its activities, ~rea~Ing a ~ o)~ stable neighborhood and home environ- mont. . 3. Cooperative homeôwn~rsl~ip cc t nt~ s to ezert pressure to keep costs down and achieve high standarc~s for ma ii en nce and for the character of the mem- bership. 4. There are built-in pro~ectlons I c operative, Including operating reserves, ~n addition to the PITA r~quireme !t f r vacancies and replacement reserves. PAGENO="0286" 280 ~E4O)~S~RA~ION ~IT1ES AND URB ~ Moreover, due to lower vacancy and collection Ifésses, the reserves for th se items accumulate as additional assets for the coQp~r~tive. 5. Oooperatives require compliance with income limits and preferences or persons displaced by urban renewal or other gover~mentai activities. Howev r, cooperatives also have credit requirements and d~wnpayments. This tends ~ to attract membership frem those lower and modeiiate-income families who re more industrious and frugal ~ and who take prid~ in maintaining their cre it rating. ~ I 6. There is gr~ttJer stability in cooperative housifrig since it is a form of he e- ownership. Resld~nts do not regard themselvea 4e transient occupants. H w- ever, there is a normal turnover among families~ who improve their econo ~iic status to the point where they want larger and petter homes. This make it possible to use the housing as a continuing source ~or other lower and moder te- income families. At the same time it is importanbte maintain a permanent c m- munity environment, so that families whose incomt~ increase (after initial occu- pancy) are permitted to remain, but they are required to pay higher mont ly charges commensurate with their increased incomes. 7. Under the cooperative program financed wlth~below-market interest rate of section 221(d) (3)~, initial occupancy and admissi~n to the project is limite to those whose incon~e limits do not exceed the amo~ints prescribed by FHA, ith a preference to p~rsons who are displaced by u4ban renewal or other gov rn- mental actions. ~Vheii on periodic reexaminatio* of income after initial o cu- paney it is disc1os~d that incomes of member residints increase, they are requl ed to make increased payments commensurate with fthe Increases in their inco es up to the point where they would pay the full ec~nomic monthly charge.. Si cc a cooperative program involves downpayménts ai4d credit approvals and a f rm of homeownership, it has always been recognir~ed that cooperative mem ers would be permitted to remain in occupancy if their incomes rose after mi ial admission, if they paid increases in monthly chai~ges which were commensu ate with their increases in incomes, as provided in an FHA-approved coopera ive plan. This policy and practice is sound as a majter of national housing po icy and accords with the provisions and objectives ~f the cooperative progra as approved in existing legislation. 8. To carry out~' these purposes of the cooperat4ve program, cooperatives ave adopted FHA-approved plans which provide for 4he reexamination of incom of cooperative reskl4nts at the intervalsjor renewa1J of their occupancy agreem nts (unless required earlier by FEA) and which furt~ier provide that families w ose incomes increase may either vacate or pay prd.~rtionately higher occup ncy charges. if upon such a periodic reexamination ~f income the member's Inc me has increased, he is required to pay a surcharge itepresenting a stated propor ion of the increase in his Income (except for increases In income which do not exceed 5 percent) . In no event is the total amou~zt of the surcharge to excee ` an amount equal to (I) the regular monthly cart~ing charges for the unit, ins (ii) the additional carrying charges `which wouht be attributable to the unit if the interest on the FHA-inspred mortgage bala~ce on the project was r om- puted at `the market rate of 5~4 percent, plus ~n FHA insurance premlu of one-half of 1 percent. This maximum monthly cajrrying charge is regarded a the "economic oceup~ncy charge." The surcharges. $re paid into .a special rca rye, with expenditures permited only for such purp~ses as are approved `by A. If upon reexamftiation ~ there has `been a change in family compositiOn fter initial oecupancy~ the PHA income limits and sur~liarges which are applicabl are based upon the revised family composition at the~t1me of reexamination. * 9. Every cooperative member Is required to make a clownpayment so that he will have a financial stake in his cooperatif~re home and community. The downpayments are kept within `the financial reach of the lower- and mode ate- income families. Generally, such downpayments do not exceed 2 perce t of the mortgage amount and these i~unds are used ~,as working capital, which eon- stitutes an additional reserve for `the cooperalilve. By having an invest ent in the cooperative project, the residents develop a sense of pride of owne ship and take better care of the property. ~ 10. Cooperativ~ members develop a feeling $f self-respect and self-rd ance in contrast to th~ paternalism that sometimes ci~aracterizes rental operatic s by churches or oth+ institutions. , 11. When people `work together In the cooper4tive ownership of housing, they tend to work, together in undertaking other ~ooperative activities, mci cling nursery schools, kindergartens, adult educatidp, recreational and comm nity PAGENO="0287" DEMONSTRAT~ON CI~I~ ~ ~ ~ ND URBAN ]XIDVELOPM1~NT services. These attriJ~ut~s o~ a co p i~4 lye eornmiflhity produce economic savings and social benefits, whicI~ enrich l~h ~ ii es of the people and the community. 0. Co%c~u8io~i8 of indepe4dent sur e The Peoples Gas Light & Coke C o., ade an independent survey of housing financing under ~ section ~21 (d) (3 f he National Housing Act of 1961. The officials of that compan~r w~nted o 1 arh whether housing so financed "can help stem ~ the migratior~ of moc~ a~e income families from Chicago to the suburbs." The survey cc~vered 29 p oje ts, including 15 rentals and 14 coopera~ tives in eight cities. In t1~e si~rvey~ e~ was a comparison between cooperatives and. rental housing proj~ets, It ~s. si nificant that the survey contained the following impressions or ~onciusior~s 1. On the average, co~perative~ ous~ng was available at a lower monthly charge than rental housi9g under ~e tlE 2r21 (d) (3). The average figures were as fcñlows for different size urkits: $63 $86 83 99 91 107 103 10~ ~e downpayment of utal projects which ~erieneed the ~. Perhaps ~ent which sphere of 281 Cooperative monthly charge (average) Rental monthly charge (average) this part PAGENO="0288" ~ 282 DEMONSTRATION CYPLE!S ~ ~ND UJ~B4~N DEVELOPMENT Mr. TOWNSEND. I would suspect that the*e would be no objection on the part of the Secretary to doing this. 4ind I would presume t at he would take all those things into account. But it is still his respo si- bility to admitii~ter this program. Mr. FIN0. Thank you. ~ . . : * ~ *~ Mr. BAiuu~r. Thank you, Mr. Fino. . ~ Mrs. Sullivan ? S Mrs. SULLIVAN. I have one question thaI~ I don't know whether ou can answer. But it has been disturbing to me. We found this t ue in my own area. ~ Whenever we tried to find some other housing for people who ere being displaced through urban renewal, ~ found unscrupulous eal estate salesmexi trying to sell property tc4 families which had n ver owned propertj~ before, and misleading the~n about the details, tal ing them into buying a house that they rea1~Iy can't afford, by say ng, "Well, you can pay for this house in just ~ few years by filling i up with other families to share it with you.~' These were areas z ~ for single families, and the real estate peo~le knew it. This happ ned in many instances when we had one of our l~ig urban renewal progr ms which displaced quite a number of peo~ilé. And what it did w s to create a very undesirable part of the city with overcrowding. he people who bought houses were not able ip carry the payment on the houses if they had to co~fôrth with the regulations in the city's zo ing code. *~ ~ S * ~ S j ~ S S Do you feeithatthere is any way that w~ couldrecommend or e act legislation against such ~ra~ti~e by real e4~ate operators ~ Mr. TOWN$~ND. Mrs. Sullivan, this hasfbeen ~. sore point with lot of us who have had anything to do with h4tusing for a long time. Be- cause so many times we have had-we have found real estate pe pie who, without regard to whether it was urban renewal or wheth r it was cooperative housing or something e]~se, didn't hesitate at a 1 to exploit the deal to their private benefit. And the people who ha the long-term responsibility of debt repayme~t were not given too f ir a break. It is5 o~ne of those oases where it s+ems to me that many fmes in the past our housing progra*xis have bee~i ~xploited through an con- omy of scarcity, rather than ~.n ecônomy~ of plenty. And this i the place where this legislation will further 4nd, I think, will stren then' FHA's hand to qualify those people wbfo would be eligibie to take housing in places that they can pay out, ai~d where they won't be t ken advantage of. Sometimes we `hear r~alt~rs objecting to the do ma- tion of agencies, regulatory agencies of this kind. * But God pit the poor people if we didn't have this kind of protection for them. Mrs. SULLIVAN. In the complaints which were brought befor the real estate bQard in my own city there ~v~as no action against hese operators. I : realize that it is largely ~ local problem, and a tate pnthlem Butt because there ~s so much +~ this going on, not o ly in my own city ~ut all over thecountry, it is 4liflieult to stop it unless here is a Federal l~w that they have got to co~nply with. There are rules and regulations set up in the cities and States, but they are not a her- ing to them. Give it thought. I know that you can't answer something uk that right now, but I think the practices th~t have been used have been PAGENO="0289" DEMO~'STEAPION C E~ AND URBAN DEVELOPMENT 283 extremely bad. ~~I' it is st ~ g ing on~ I don't think it is as preva- :1 lent today aS it was~er~L~ ~ 0 ears ago in my own area, but it still continues. ~ ~ . ~ ~ I . ~ ~ ~ . ~ ~ . Mr. TOWNSEND. 1\4ay I sn ~ ~ im;th~,t ~oiineetion that eoop~rative housing has made a ~ea~ eo ~ b tion in this field, because the people who make üp*aproj~etcom ~ sa group, and they get the kind of counseling an~1 guiã~c~ fro F~ A that wifl afford them protection from this kind ~f~p~itatio . ~ ~ ~ :~ . ~ ~ Mrs. SmLIv~.~ O~ily you ~ ~ ~ ot getting this type of people ih the cooperative h~tising.~ 1~hese ar~ he kinds of people that have never bought a piece ofre~l *~state ~ ~h ir lives, ~ñd they really don't know how to investigate o~ q~esti , t ey simply take what someone says for granted. ~ ~ ~ ~ ~ . . . ~ . Thaxik you. ~ ~ ~ ` ~ ~ . ~ Mr. BARRET~Y tM~. ~ t ~erm~i . ~ * ~ ~ . ~ Mr. STG~Ri~II~ h~iky , r.Ch~fri~n. Mr. Townsend, on ~ag~e 2 ~ ~i t~ your first'poifit you mention, mOre~ over- ~ it is necessary tO utiUzevae~t 1 ~ 0 tside the city, as well as the land within~ the cities. These re~jilir~mehts s O 1~1 * e added as èondltions which a city must * meet to qualify for the ~tdd~tthna ~ è~1 ral aid contemplated by the demonstra~ tion cities prOgram. ~ ~ ~ ~ ~ , ~ . ~ ~ Do you feel that thi~ s1~ou1 ~ 0 n nmendi~ient t section 9, or ~ th~ criteria for the approval pf a lai~ ~ the $~*~ary asfar as relocation isconcerned? ~: ~ ~ ~ ~ . ~, ~ ~ ~ ~ Mr. TOW~SENn. I ~m riot q ~ts ure tha~lt ~cs%iild apply in ~1l ca~s alike. But I would tl~in1~ tha ~ li~ e iie~ds tobe a ilarification of legis- lation sufficientt~~i~bi~ those' ltes w~re ~ deirionstratiônprojeot' is put on, that th~y a1~no~ ii I ed by lack ~f ability to annex or ac- quire properties~tmtM~l~4f th ~ r~ ent coipo~t~ ii~its. ~ ~ ~ . Mr. `ST GEEMAIN. ~ ~u me~ ti~L re would be permissive legislation included to allow t~rn to g~ ~ ond the city limits ~o' acquire the~ necessary land td ~ b sè~ ~h~se dis~ia~ed peopie~ ~ ~ ~ ~ Mr. TOWNSI~~ ~ ~ ~ ~ ~ `~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ . Mr. ST GER~XAIN. ~o you O1~I emplate that most of the fui~ids should be ~pi'ovided f~i~ ~t~4ë ~$q i~ tidn~ of sa)icl real estate outside the citylimits? ~ ~ ~ ~ ~ ~ ~ ~ .~ ~ ~ ~ ~ ~ ~ y ~ ~ ~ :~[D.~ TowNs~Nt~.: A~in `w~t~~n he limitations and within:eertain d~eflned nreas~ I ar~i ~tre it w~ lc~ want tobé properly safeguarded. But cities should not~b~ pro i it' `d `from doing this simply beca~ise~ of too"~sti~ict iimitatio4on the u e f funds for that purpose,' develop- ±rient funds.' ~ ~ ` ` ` ` ~ Mr. ST GERMAIN. *oi4d y ~i p t it this `way ~ ~ If it were necessary to the impi~mentation of ~ pro~ a , and if'ther~'isnoother wa~ to re- ldcate thepeop1e,'that~they sh id .e pei~mitted to purchase land Out- sidethe cityfortheirel~ca~ion ` th se faniiiies ?` ` ` ` `` Mr. TOWN5E~tD. Yes; sii~. ~ ~ ` ` ` ~ ` ` ` ` . ` ` ` ~ M~ ST `GER]~A~IN. I*~your~ . in No.' 3 with reference to the rent supplement progtant~ ~v~ero i~ ~ `with' reference to overcrowdia~ig~ do you mean `th~1v in ~dd1tion t , t e .~riteria of income. there sh~uld be also addedthat~of o~rcró~,ow i g~ ~ ~ ~ ` ~ ` ` ` ` ` ` 60-878-66-pt, ~ ~ ~ ~ ,~ PAGENO="0290" 284 DEMONST1~ATION CITIES ~ND URBM~ ~ DEVE~JOPMENT Mr TOWNSENI I Yes, sir , I do It seems i4 me that this is a inajo matter of a criterion that sometimes has bee~i unattended simply b cause it is hard to define But I suspect that ~t does more damage an makes bad housing simply because there is i~ot available to people place to live. Mr. ST GERMAIN. How would you reconcile this, Mr. Townsen ~ with the new provisional regulation-unlesst I am mistaken it stat s that there shall be but one bathroom or one path in each one of the e apartments. Does that not limit the number~ of bedrooms, and, ther - fore, does not this fly in the face of providrn~ housing under the re t supplement program for larger families wh4 are overcrowded ? Mr. TOWNSEND. Well, the physical requir~mt~nts for the number f persons to be accommodated by the number ~f bedrooms has been ge - erally the criteria in the past. Whether ort not this will answer t e problem of overcrowding I am not quite su*e in this new legislatio But I think that the overcrowding element a~ such should be identifi d as one of the criteria or one of the reasons why additional space shou d~ be provided. Mr. ST GERMAIN. In view of that, then, I i~magine youwouId reco - mend also that this regulation be changed asfto the limitation? Mr. TOWNSEN*. Yes, sir. f Mr. ST GERMJkIN. Because they would h~ive tO be hand in han ; would they not ? I * Mr. TOWNSEND. Yes, indeed. ~ ~ Mr. ST GERMATN. Nothing further, Mr. Othirman. We thank yo~i, Mr. Townsend. Mr. BARIIETT. Thank you, Mr. St Germaim And Mr. Townsend, I think Mr. Fino ha~ one other short questi n. Mr. FIN0. M~. Townsend, in line with. ~he question that Mr. St Germain asked, ~you and I know that this rent supplement progr m is not yet in o$ration, and it probably wi~ not be in operation or another 2 years~ This is an experimental frogram. And what . ou are suggesting i~that we increase the eategO~ies eligiblebefore we e en test the program as we enacted it. Don't ~ou think you are goin a little too fast ? . i . Mr. TOWNSEND. Well, I would presume ithat some of these thi gs have been proven in other programs, and that in those places wh re proof has been obvious it seems to me that they ought to be natur ly incorporated inthis new legislation so that $e don't have to comeal ng and nronose the same amendments again ne* year. Mr. FINO. A~ I understand it, under the~new rules and regulati ns it will be three~bedrooms and one bath, sofyou are not going to t ke care of this overk~rowded condition. I But I think you ought to wait on that ancjlet's see how this prog am works out, once we get it rolling. And 1~hen we can come in ~ ith added recommendations, and maybe we cain have room to have s me Congressmen admitted to the program. Mr. BARRETT, Mr. Townsend, all we are ~vorrled about is the lac of proper and adequate housing. We hope we can do what Mr. Shis kin has pointed out this morning, get the sta ts up to about ~»= millio ~ year, and then we will be on our way to t ke care of everybody h~ PAGENO="0291" DEMONSTRAT~ON CIT E ND URBAN DEVELOPMENT 285 needs decent ar~d san~tai~y h ti ix~ . This is our aim. And this is what we are trying to do. Mr. Townsend, thai~ks very uc for your very splendid testimony this morning. The committee wil~ stand i ecess until 10 o'clock tomorrow morning. (Whereupon, at 11:50 á.m., t e ubcommittee adjourned to recon~ vei~e at 10 a.m., Friday, M~rch , 9 6.) I PAGENO="0292" 7 PAGENO="0293" DEMONSTBATIO1~ 1~IT1 URBAN DEVELOPMENT aow1edge~b1e representatives h~orn ~re Mr. Annunzio, a very capable ency Committee. And I am sure is rno~iUg. LflUflZ~O. man Barrett. vilege ~xteuded to me to welcome ~en~ today, a~ppearing ~ef the aukmg and Currency Committee ~ all of the Chicago Congressmen ~t Mayor Daley has made as mayor 4, ~966 REPRESENTATIVES, I~EE ON HOUSING OF THE ON BANRING AND CURRENCY, ~ Wa.~hington, D.C. The subcommittee met, purs a to recess, at 10 a.m., in room 2128, Rayburn House Office Buildin , on. William A. Barrett (chairman of the subcommittee) presidino~. Present : Representatives 1~ rr tt, Mrs. Sullivan, Ashley, MoorS head, Stephens, St Germain, Re ss, and Harvey. Also present : Representative A nunzio of the full committee. Mr. BARRETTb The committee ii come to order. Our first witness this mornin i the Honorable Richard J. Daley, mayor of Chicago, representing th U.S. Conference of Mayors. Mr. Mayor, we are very plea ed to have you with us this morning. If you desire to complete you s atement before any questions are asked you may do so. We do w nt to make you feel at home this morning. And we have very capable an k the city of Chicago. We hay h member of the Banking and C r he would like to welcome you her t And, therefore, I recognize Mr A Mr. ANNtmrzlo. Thank you, C ai I am indeed grateful for the pr one of Chicago's outstanding it Subcommittee on Housing of th I would like the reóord to show h are especially proud of the recor th of the city of Chicago. I have been pleased to know M yor Daley for the past 25 years. And he brings to the committee ths morning a wealth of experience and know-how in administering i t e public interest. He served as minority leade o the Illinois State Senate in the early forties. In 1949 he was appointed dire to of revenue by Governor Steven- son. At the same time I was dir ct r of labor in 1949 under Governor Stevenson. He left State government in 95 to become county clerk of Cook County as well as comptroller o ok County. In 19~$5 he was elected mayor In 1959 hewas relected. In 1963 he was reelected for a nd time. 287 PAGENO="0294" 288 DEMONSTRATION CITIES AND URBiAN DEVELOPMENT Ill 1965 he }~ecame a meii~bcr of one 0 the outstanding club of America, the Orandfathers 0mb. He be ame the grandfather f a bouncing baby: ~ So, on beha1i1~ of my oolleagues, R~pub1 cans and Democrats, I am honored that you are with us this morning And I am sure that ~ our contribution will be a very effective contriI~ution in the public jute ~ est, because all of us are sincerly concerned ~vith the problems of 1 rge cities. And we feel that you are an expert in administering 1 rge cities because of the outstanding job that prou have done as mayo of the third largest city of America. Mr. BARRI~T~. Thank you, Mr. Annunzi~. Mr. Mayor,~f you desire now, you may ~froceed with your state ent and complete ~t. And we may ask you s4me questions after it. I want to s4y, too, that this other di$inguished gentleman om Illinois has something to add. And we ~jil be glad to recognize our distinguished ~olleague, Mr. Pucinski. ~ ~ STATEMENT OP HON. ROMAN C. PUCU~SKI, A REPRESE.NTA IVE IN CO~TGRESS PROM THE STATE OP ILLINOIS Mr. PuoIN~I. I am Congressman Puci4i~ki from Chicago. W are glad to welcome the mayor. ~ ~ ~ ~ We all hav~~ a very deep interest in this~egislation. We believ the mayor of iOhi~ago, one of America's mo$ ~utstanding municipa ad- ~ministrators, ~an give ~iiidelines in drafting this ~ legislation so that it will be the thost effective pieceof legislaftion that Congress can nact to deal with this problem. We are very glad that the mayor can be with us this morning. STATEMENT OP HON. RICHARD L DALEY, MAYOR OP CHTC400, ILL ; ACCOMPANIED BY JOHN DUBA, ~COMMTSSIONER OP DE~EL OPMENT AND PLANNING ~ ~ ~ . ~ ~ ~ . ~ ~ Mr. DALi~rJ~ Mr. Chairman and mem$rs of tlie'~ committee, ~ ap- preciat~ this opportunity to testify befo4e this subcommittee ~ am appeäflng today not only as i~aayor of G~iicago but also on beh If `of the U S Conference of Mayors, to urge th~ approv~1 of th~ Demo stra :tion Cities Act of 196G. ; ~ S J am `convinced that there is universal a~greement that the healt .a~id well-being of5 our ç~ntral cities, where most of our people live, s the ifleature of the h~alth and well-being of çur Nation. I firmly b lieve that the efforts that have been made in improving our cities in bate that itis wjthin ~ur power to provide a ~lecent home in a suitab e en- vironnient lot every fanii1y~ ~ . S ~ * This goal ~s the essence of President 4Eohnson's vision for a ~ reat ~society-~t is the objecláve of this bill. tin previous. hearings e ~ rlier this week Mayor Jerome Oavanagh of IJ~troit made a number o spe- cific recommendations on behalf of the TJJS. Conference of Mayo s and the National League of Cities. I join ih those recommendat4o ~ s. Twei~ity years ago there was no general concept o~ urban de elop- ment as we know of it today. Cities were primaHly concerne with public housing. The next step was djrected toward slu~n clea ance. Today ~ny discussion of urban dev~lop ent includes low-rent ublic PAGENO="0295" AND URBAN DEVELOPMENT 289 it is stated: must find a ~ her public and renewal funds S. ri spread over 5 years among planning. ~A. ously tmenl have been comp~ rid final payments re with the x PAGENO="0296" 290 DEMON~RATION CITIES AND URB DBVE~1JOPMENT anticipate the completion and c1o~eout of an4her eight projects with n the next year. All 30 redevedopment projects which have been unde - taken cover 1,055 acres. . ~ In addition to the 30 redevelopment projeelts, we now have 5 federal y assisted conservation projects. Our first, Ufrde Park-Kenwood, with 22,092 dwelling units has about 20 percent f all dwelling units to ~e rehabilitated. in ~3OO.ocld conservation proj~ ~ts in the entire Natic~n. And we have no* certified about 70 percent of these a~s meeting prop- erty rehabilitati~ri standards. The total co t: ofthis program in F~d- eral, local, and private funds is ~ approxim ~ely $~5O million. Hy~ie Park-Kenwood is ai~ integrated xieighborhc~ d. Property values h~ve nearly doubled ~nd as rapidly as land isma eai~ilabie it is purchas~d by private developers at fair prices. Coi truction in this area n- eludes : public housing on scattered site , housing for the ag d, 221 (d) (3)~ moderate income housing as welPas conventionally finan ed and 220 housing. The value oE permits f~r rehabilitation and n w construction in 1959, when Hyde Park-Ke~uwood projects went ~ to execution, was $156,000. The c~dmulative t4tal of all permit valuat'on in the project ~thce 1959 is nearly $66 rnilli4i~ . ~ Construction factually completed. on all~ienewal sites amounts to approximately $186 million. Another $8Ot~iiliion in constructio is currently in pi~Ogi'ess in 17 project areas ~fhere 4~5 improvements re underway. ~ ~ I More than 6,000 apartments and 419 tc~wnhouses have been c m- pleted with another 7,000 planned or in deifrelopmeiit. More than 00 industrial and commercial buildings have been completed at an appr x- imate cost of $30 million. Four institutioi~al buildings and 16 pu lie buildings have.been erected. ` . ~ ~ . . It is estimated conservatively that~ the i$l estti.te tax yield for the total renewal j~rogram `has more tha~n do4tbled despite the fact at 300 acres of laiiid is being made available ~or public and instituti nal use, such as pa*ks, hospitals, schools, &iid 4olle~s. . The tax `yield of course, varies from project to project.. i~ti industrial projects ~ is estimated to be 3 to 5 times greater after red~velopment. ~. . During the development of the individt4al renewal projects in hi- cago the urbanrenewal department has caih~ied on ai~ extensive in er- change with community organizations, diistitutional and busi ess groups as ~weJias profesaional and teehnie~lorgan.izations in ord r to insure the bii~dest participation by those4directiy affected as we 1 as using the br~d resources that the rnan~j g~oupsc~n bring. to the developrnent:o~ the programs. ~ . ~ I ~ .~ ~ ~ ~ . As sin exftm~l~ inthe Lincoln Park GomMtywhere the ren `~a1 program has i~ecently gone into the ~xecu$io~i phase, the many. n igh- borhood orgamizátiohs and the renewalde~i~mentstaff held hund eds ~ ~of meetings ~with from 5 to over 1,000 p~rti~ipants in the plan ing stage. This interchange, we believe, has resulted `not only in the best possible plan for the area but has . estaJDli~hed the base for i pie- menting the nmny aspects of the project. ` In each of ~ur rehabilitation project afreas a citizens council, con- sisting of frQn~t 9 to 15 residents of the are4, is appointed in accor ance with our Stat~'legisiation, who are respon~ble f~r providing assis ance and guidan~ejof the development of'the ~ian and who must ap rove any plan befo~re it can be piac~d int6 eff~t. These conservation om- PAGENO="0297" 291 DEMONSTRATION CITI S AND URBAN DEVELOPMENT munity councils are also char ed with the responsibility of aiding in the implementation of the pla s. During the past 17 years si c relocation began for Chicago's first urban renewal project, 14,000 a ilies have been relocated from urban renewal sites. More than 95 p rc nt of these families have moved into standard and decent housing c rding to continuing followup studies we have made. This corresp d to a U.S. Census study made of 132 cities, including Chicago, whi h showed that 94 percent of the fam- ilies were moving into standar using. Tjnder the Housing Act of 1 65 we have expanded our program with 10 new areas. ~he pr li mary proposals call for moderate income housing to be built in s v of the projects utilizing 221 (d) (~) financing and other private fin nc ng and development. ~ have pending applicati us in 10 communities where neighbor- hood service centers will be es a lished to provide rehabilitation and other assistance under the code n oreement projects. Under the 1965 Housing Ac t e Chicago Housing Authority, over the next 4 years, will seek to ob ai 3,000 units annually in 3 categories. TJnder new construction it p o oses to build 1,750 units in low-rise bui]dings in scattered sites. They will iurchase and r li bilitate properties containing 750 apartments. They will lease 500 apartme ts rom owners who have brought their buildings into strict complian ith the city's housing and building code. The authority has alrea y onducted programs in the rehabili- tation and leasing programs hi h not only provide homes for low- income families and the elderl , ut equally important, which brings existing structures into strict c m liance with city building codes. Since 1955, the department o-f buildings has removed more than 3,000 dangerous and dilapidat d uildings outside of urban renewal areas. The expenditure for de olition increased from a budget allow- ance of $5,000 in 1955 to $500,00 i 1965 when more than 900 buildings were demolished. Under the provision of the new act, a $71 5,000 grant plus one-third local matching f ds will permit the demolition of many more such dangerous and ii hted structures. The Chicago Board of Healt a d the building department with the cooperation of the committee n rban opportunity, the city war on povert~y agency, is now rodent- ro ftng apartments and since the pro- gram started in January exte mi ation teams have inspected more than 19,000 apartments, cont mi g 69,000 rooms and patched up 15,000 rodent holes as well as pr ying apartments with insecticides. The Chicago Dwellings Asso in ion, the city's nonprofit agency, is carrying on a broad program ith special emphasis of improving the city's stock of moderate-income ho sing and conducting rehabilitation programs on a block-by-block b sis in seven neighborhoods. Its activ- ities include the purchase and r habilitation of existing properties, the construction of new housing nd improving the area by working closely with community organiz tions. The agency is also serving as court-appointed receiver for proper- ties where building owners h ye refused to comply with housing, building, and health codes. Tin er State legislation, the CDA collects the rents and uses them to brin the properties up to city code stand- PAGENO="0298" 292 D~MON~RA~IQN: CITIES ~AND URBA*~DE-~EILOPMENT ards, If the property cannot be rehabilitated a court order for dem - lition is sought. ~ ~ ~ ~ The receiversbãp programwas initiated 4}ye~s ago but under t e new State i~gi~1stion the ODA, since the first of the year, has be n appointed receiver for more than 40 building4 The board ofbaith, in 196~S, opened a di~trict health center whi h provides infant and maternal health care,j ehronic disease contr 1, dental care, venereal disease control, mental~health counseling, tube - culosis case finding to thousands of resideijts of a low-income ar a. Two more district health centers are being' si4rnitted for approval t is year. The health department also has 31 ii4fant welfare stations, i - cluding 18 maternal clinics. The program, working in the framework ~f existing major medic I facilities will include such services as pren~tal care, infant welfa e, complete pediatilic care, diagnosis and tr~at4ient of acute illness, co - plete hospital cafe, health education, long-term treatment for ambula- tory patients, mental health services, and so~ia1 services. These fa - ily health centers will be opened-U--operated k~n a contractual basis ~ tween the board of health and medical schc~ols or teaching hospita s. The first phase of this program involves 60,000 persons living in 2 poverty areas. , In 1965 the committee on urban opportun~ity was established as t e agency to carry ~n the war on poverty. The bommittee is now worki g hand-in-hand with 37 voluntary agencies pl~is 38 community-initia' d programs. It isestimated that t~iese activi4ies Ofthe committee h ~ e reached more th~,n 300,00G persons living inf h~w-income communiti s. The program éncompa~es such things as i~ild development throu h Project Headst~rt program in which more ~han 23,000 youngsters n-* rolled last summer and the present child 4ievelopment program or ~,6OO children. . ~ The Neighborhood Youth Corps has helpM additional thousands of young men and women from 16 through 21 ~Ind the pathway towar a productive adult life. Over 8,000 young Chicagoans are now enrol ed and last summer the figure was 11,000. Among the m~any projects in this vital p~rt of the war against he causes of povert~y are programs to aid yOut~ senior citizens, menta ly retarded children, American Indians and f*orking mothers. Th re are tutoring prbgrarns with s~nior citizen$~ working next to coll ge students helping school youngsters take g$ater advantage of t Mr learning opportunities. I The program has established seven urbth~ progress centers, nei( ~h- borhood facilities where city and private services are provided at lo- cations most convenient for those * needing3 them. Two more will be opened this year. * These centers have employed over 700 persons as community re re- sentatives who ~work in neighborhoods wh~re they live. They h ye h~ft the ranks of the unemplOyed and ~deremployed and joi ed hands with their government to help others ~iélpthemselves. Another ageiicy which is working as a fi~ll-time partner in .the i ar on poverty and social deprivation is the co4imission on youth welf re. With a budget of more than $1,250,000, the commission has 13 Md officers and neighborhood workers in 30 c~mmunities. PAGENO="0299" I 293 T] impr~ one ~ aç~rent I ~ `then PAGENO="0300" 294. DEMON~~RATION CITIES AND TJRB4N t~EVELOPMENp the capital in~frqvernent progi~ams of allj city, county, and St te agencies with ~b1ic work and b1~i1din~ pró~rns in Qhicago. While we r~d4gni~ some interim guidehr4~s and criteria are nee ed during the de~opment of the glans we wc~uJ~ recommend that si ce all cities have their own indi~idual atid i~nique administrative a ci organizational structures, that any admini~trative requirements, p o- cedures, and criteria other than those stated In the bill be deferred u til such time as plans from cities throughout ~he country have been s b~ mitted and reviewed. Further, it would be indeed difilcult for a~.agency to determine he actual amount of funds necës~ry to achi~ve the objectives of he Demonstratiot~ 4~ct when the ei~ies m the Tjlnited States vary in t eir resources, econc~rnic strenglh, extent, and q~uility of programs, an in social structure and environrn~nt. The ~hicago program alon , I believe, makes it apparent that the only w~y to arrive at a reason ble estimate of the total funds needed would ~e by examining the p1 ns submitted by the various cities. In the ~ meantime, however, i is obvious that the $2.3 billion is far fromadequate to carry on a prog am of this magnittide. It is also obvious that funds for planning mus be substantially increased so as to provide ran opporttinity for e ry city to develop ~ demonstration program. The prepar4ion of a comprehensive plain involving the total e vi- ronment will m~i,ke a tremendouscontributi4~ to every city-and to the Natjon by projØcting the total ii~eds of urb4i life. With refei~ci~tee to H.E. 12946, the Uri~an Development Act, nd H.R. 13064, th~ Housing and Urban Dev~kpment Program A.m nd- ments of 1966, we will, with the chairma~i's permission, furnish the subcommittee with a statement outlining qur views on these meas res after we have had an opportunity to con~plete our analysis of t eir provisions. Thank you,Mr. Chairman. ~ Mr. BAREEI~. Without object~ion, it may ~ done. (The statefli~t ref~rred to was previo4sly submitted, see the :~ mt statement of the U.S. Conferei~ce of Mayfrs and National Lea e of Cities, p. 199.) ~ j Mr. BAEBI~k. Mr. Daley, I want to tha4k you on behalf of the ub- committee for a very excellent and informative statement. Mr. Mayor, I have one question. It is a j~ittle bit repetitious, bec use I have asked this of other mayors that have come before the conimi tee. First, I. want to inform the members hete this morning that we will continue under a 5-minute rule. ~ Mr. Mayor,:I would like to ask you th~ same question that I a ked Mayors Cavaitagh and Lindsay earlier tI~is week. Some people eem to have a fe~ that the Federal cOordinatot which the bill would s t up for each demofnstration city program wouftd be some sort of a Fe eral dictator or czar. Now, I do not believe fthis, and I think the b 11 is clear that he would not be a dictator nor thve dictatorial powers. But I would like to ask you these two questiobs. First, would the p ople who have such fear feel better, do you think, if we renamed this `ecL. eral official a local coordinator rather than a Federal coordm tor? And second, what do you think of the~ idea of making the se vices of the coordinator optional for particip ting cities rather than nan- clatory as provided by the bill, H.R. 1234 ? PAGENO="0301" DEMONSTBA~IO~ CI~ only with the be~ or this won nature of a would be al is initiated. t have jet up the i of program plar the maralatory c Mr. B~ think someone v no kne if they selected a c and its prol But I do ii Government w in the commur ~.ND URBAN DEVELOPMENT atory subrn iat there is anything wrong 295 `S an, and PAGENO="0302" DEMOI RATION CITJE~ AND URB DEV~LOP~ENT who knows something about the prob1~msi of the community. T ey ~ ould hare to do it Othørwise this program will not work Mr. BARRETT. Thank you, Mr. Mayor. My time has expired. Mr. Harvey ? ~ ~ . Mr. HARVEY. Thank you, Mr. Chairman.L. ~ Mayor Daley, you have give~i us a very ~ fine view ~f what Chi ago has aecomp1ish~d in the past few years. I wbñder, sihee the chaii~ma~i has broTh ht up this question of the coordinator, if you would tell me whethe~ ; 0S i~iayor you feel th t if ~ the. act were th provide that the Presid ut should appoint the co- ~ ordinator from a list of persons or a list f nominations made by the lOcalities themselves, persons, for examp é, that knew the prob ems of Chicago, if you think that would be part~ularly helpful ~ Mr. DALEY. I think it would. ~ . Mr. HARVEY. You think it would be h~1p~ful ~ . Mr. DALEY. Yes. . ~ ~ ~ Mr. HARVE~. Let me ask you this que$ticn also. With rega d to the demonstration program, if Chicago ~c4ere to be selected as a em- onstration citj~, how much mOney ~ do youIthink it would take to ade- quately fund such a demonstration city pr~am in Chicago~ Mr. DALEY. The answer to.that questkn ~óuld be quite di cult. First, would you select one project, wo~Ud you select three or two, would you select four, would you select ~five ? So I would ha e to ~ answer the question in this kind of a relationship. . ~ I would say to you that we know, as ~ save said iii my state ent, that the requested appropriation of $2.3 billion is far inadequ te to carry on these programs throughout the~ United States. I sal you ~ could not evaluate total need until the cities submitted their pro rams and their prb~jects, and~only then wouidfyou be~ able to estimate how much money `frould be required. * ~ 1 ~ Mr. HAR~VI~Y. How long would it ta* Chicago to submit t the programi ~ Mr. ~ We can submit One immeUi~tely. ~ . Mr. HARVEY. Can you give us some ro~ugh. estimate of what e are talking about, a hundred million., or a billion, or what? Mr. DALE~. In our city we would be t~Iking about a total pr grain ~jf betweeii ~pi~obabiy a billion and a half to two billion dollars. Mr. HARVE~. A billion and ~ half to tw~ billion dollars? Mr. DALt~. Yes. Mr. HARV1~Y. How much do you think~should be placed in the utire program, then ? * ~ I Mr. PALEr. Well, as I said, we are su~fportin~ the idea of this legis- lation, knowing what a tremendous responsibility the Congress has- and I have been a member of a legislativ~ body-in trying to det rmine appropriations, priorities, and needs. Some people would want all of it in housing and urban renewal and lit the city demonstratio pro- gram. But I think the Congress in their wisdom and j udgrne t will make a wisedecision. Mr HAI~VEY. Do you have any reco4imendation as to the sze-as to what the overall figure would be ? Ajnd how many cities sli uld be involved? Mr. DALE~Y. Again, Congressman, I `~f~uld not, h~cause I wo id not know what the needs of the other citie4 are. And I repeat, u til we 296 PAGENO="0303" DEMONS'I AND UEBAN D~VELOPMENT wLich has r~. mine the ans~ Mr. HARVE) up a si the urba cities. vv allocation elected to d~~ter~ where you set PAGENO="0304" ing ? Do all these grants go through some s~rt of cleariiighouse in e city, so that you know what is c~oming into~ the city? Mr. DALEY. 411 of them go through th4 d~artrnent of devel p- mont and planr$ing, and all of them are r4~tieivcred. And the wa I keep track of t4T~em is to meet with my dep4rt~me~t heads at least o* cc a month. And we hftve monthly reports. ~nd in that report is a p o- vision for Federal grants and Federal pro~eots and. Federal apph a- tions. So that it is a combination of both ~ral confrontation with he department heads as well as reporting by th~c department that keep us abreast. Our a~uditor and comptroller ma1~e a monthly report on he same application. Mrs. SULLiV4N. Would this ~ncIude gra~nts under the antipov y program, the ti~anpower retraining progr4~, the urban renewal ro gram, and all ot~her programs? ~ ~ ~ Mr. DAti~Y. :~:t encompasses everythmg. Mrs. SULLWAN. Everything ? That is .. ry significant. I thi in many instances departments or agencies ~ the States and locali ies make individual contacts for grants and th re seems to be no one p ace where all the information is brot~ght togeth4r. Mr. DALEY. Not in the city of Chicago, Qon~resswoman. We m ght be criticized, but I believe that anyone th~at is elected must have the authority ~nd the control of what is happ4ning under his adminis ra- tion. And we insist that the departments~present their request to the Federal Goverjimcnt through the dep&i'tn4e~it of devéiO~nnent bec use otherwise you ~would be operatmg, as you paid, in isolation and p ccc meal, and one department would not, knoMf *vhat th~ other depa ent was doing. We think rebuilding a city reftuires a comprehensive ro- gram. You cannot talk thou~ urban re~wal without talking a out mass transportation ; you canndt talk about mass transportation ith- out talking about roads and expressways; and you cannot talk a out roads and expressways without talking abqut parks. Mrs. SULLIVAN. Are you talking only ~o.ut planning for brick and mortar and steel or do you alSo include grants concerning peopi ? Mr. DALET. jOur main cOncept., which stfrted in this departmen was for social pli~rnthg, which w~s approxii~tcly 3 years ago, be ause you cannot pli~n for brick and Steel withot4 doing some social pla ing. We think tha~t the two of them must g4 together, they are in pa- rabie, and aii~tone that tries to plan it alotie isnot meeting the ov rall total need. We think you have to plan 1~r recreation, beautific tion, tutoring, education and training progra±ns, and the opportunit for people in the neighbodhoods to have a be1~ter life, and to be inter sted in the better things. As you kn6w, we were fortunate in being able to take 56 top onor boys and giri~ from a public housing pro~jcct in our lower incom area on a trip to S*eden for 10 days. Mrs. Suu4~AN. I read abo~it that. Mr. DALEr~ We think that if we could * o more of this all of us oald be amazed, ~then the youngsters come b ek, with their attitud and their conversation about what took pla e. We think that the visits we have underway in our program, ta g youngsters from th low- income areas that are seniors in high sç~I~oo1, for a 2- or 8-day v sit to the university of our State, where they stay and become familia with university life is very effective, and we think we have to do mor of it. 298 DEMONSThAPION CITIES AND URBA~ DEVELOPMENT PAGENO="0305" DEMONSTRATION CIT ES On Saturdays we have thous i to encourage them in the art ~: of others going to the museur we should do more of that. Mrs. SULLIVAN. I am glad t coordinated in this way, beca ~ isolated programs d es not ~i leases coming to our ( esk dai y titude of grants that t ey hay as to public agencies f r cer~tai i one who pai~ticipates i ~ these do so i)~1 a way that ta es in t: e Mr. DALi~Y. Well, ou can' program. In past years gran S elected officials knew nothing ~* after they were in operation. that they should be brought i Mrs. SULLIVAN. There is ji s that only requires a yes or n chest. The thing that I think bot e with the Federal Governmen order for these vast programs t that the city authorities app o inspection service to be sure t L and all of these other things ar Mr. DALEY. Certainly. A people sitting in Washington s 1cm, or how it came to exist. lems of Chicago as a large cii problems developed over the a also brought about because 0: t during the last war no new re i the~re are need for workers an~ try and the~y needed housin legalized conversion. But I would say generally cities, that the majority of the better city. They are interest esteci in trying to have homes i problem is how you do it. i i~ done and it is another thing w to try and do it. Our building department ai d what we call a task force. IV them in groups of 50, and ha going into iieigliborhoods and i back on every building. We a landlord is entitled to his da t inies we have a situation whe e the court bought the house th is confronted with this kind o.~ Mr. BARRETT. The time of the (i()-878-6(i-pt. i---20 ND URBAN DEVELOPM]~NT 299 ~f youngsters going to our institute painting. And we have thousands ~ience and industry. And we think iiow that you have Federal grants just plan these things as separate, very good results. We have re~ in the various agencies on the mul- n, to individuals, to colleges, as well grams. And my hope is that every- al programs in a particular city can ire picture of Federal assistance. t unless you have a comprehensive re made and department heads and t the programs until some months think they should be a part of it, .e comprehensive planning process. e question that I would like to ask . Chairman. Let me get it off my iany of us-this has nothing to do Las to ~ao~ *ith th~ cities-is that in ork effectively, is it not imperative te su~f*~i~it ~noney to increase the ~e building codes, the health codes, tly enforced ~ ~ have be~ doing that. But the times do ilot understand the prob- Id xiot come overnight. The prob- not d~veibp in the last year. The 0 or 60 years., The problems were action of the F'ederal Government tial structures could be built. But came from all sections of the coun- nd like ei~ery large. city Chicago I know nothing about the other ~ors and othe~r city officials want a code enforo~ment. They are inter- ov~ and rehabilitated. The only LB thing to say that this should be c~u are confrontedwith the problem pection Services are now operating e taken 150 of our firemen, trained [remen and 10 building inspectors eting every building, and reporting ;aking case~ into court. And the am not def~hding him, but many poor unfortunate. standing before before on contract, and the judge tuation, ~rhat do you do? tlewomari has expired. is re fI~ r~i * de i1~ tn tç di~ t i~ iE~ 4 in ia re a PAGENO="0306" I~ 300 pEMç~STRATION CITIES ~ AND UR1~AN. DEVELOJM]~NT Mr. Ashley ? ~ ~ ~ ~ ~ ~ Mr. ASHLEI~S Mr. Mayor, I am very pl4sed to greet the very, ~ ~ry distinguished mayor of the city of Chicago4 ~ . ~ ~ . ~ We in Toledo have long admired the transportation . in. ~ our city, Mr. Mayor, that has come about largely since ~ you have ~ een mayor and as a result of your efforts. And we are mighty proud o. the city of Chicago and the Midwest. And ~ I certainly take my ha off to~ you for iuaking the kind af attractiv~, dynamic place that t is today. ~ [ ~ . ~ ~ Mr. Mayor,, ~I was interested in a comme~it that you made on pa e 7 of your testir*~ony. You have referred t4 the Tecelversiup prog am which you saywas initiated 4 years ago. Would you fillus in on hat the receivership program is ~ Mr. DALEY. Well, for example, the bui~1dingdepartment make an inspection of a building and thuds that it~has a long record of v ola tions. They have had the owners in and ~have attempted to get. em to comply with, the code. They have failed. , So instead of fun in the municipal cOurt where fines would b~ assessed, we go into e uity and ask for a receivership. , Well, the original law gave tis this autljority. But now a `rec&ver- ship is appointed Where the building `s4ras in bad condition th re ceivership ha4 no way of getting additio~1 capital and funds ther than rents by whieh he could carry out ~r4pro~menth. After 1 or 2 months the rec~ivership ca~ine in a~d made a repo to the court that nothing could be done to ii4prove the building. The law now gives us the opportunity of making the receivers ip a prior lien which comes ahead of the mortgage and any. other debts out- standing against the building, But more important, we now h ye a fund by whi~ we can go in and repair the building. Mr. Asiu~. Where does that money coi~ie from? ., Mr. DALEY. From the Chicago Dwelli~g Association, which ` is a quasi-public ~I~x1y of outstazu~*ng men ad women. Funds are pro- vided by the `.~tate as well as t~ie city. ~nd this we; hope to use ~ as a revolving fund. ~ . ;t . Another thing I want to emphasize is tl~at we. don't want the ci y in the real estate'tusiness. We want to improve the building and bri g it up to the code, and then have the owner buy it back for whateve we put into it.. * This is what we hope will happen. We also hope t at it will stimulate and agitate the mortgage p~ople so that they will ome in to protect their mortgage. And in this~way we can go to the o ~ner and say, "Hei1~e, we had bettor do spmet~iing about refinancing this building," in 4i att8mpt to bring it up to co~i1e.' Mr. AsHLi~ii. The reason I asked you aijout that, Mr. Mayor, is that we have not l*d very much testimony fr+rn administration witn sses in the general area of rehabilitation. Iftit the demonstration itics program contemplates, as I understand itt, considerable renewal rom ~ the ground un in conjunction with rehabilitation where it is pos~ ibie. Sometimes rehabilitation is very difficult to accomplish on a volu tary basis. Quite often, particularly in the larger cities, such as you r pre- sent, there is a necessity to compel, eitheir through a receivership or some other such device, the conforming t~ code standards, upgra ing along whatever lines it. `may be. And t*refore, I am extreme], in- t.rested-I believe that this is the first sp ific testimony that we ave PAGENO="0307" rying, we le, as you you miy ELOPMENT 301 I 1 ects in hous- ie very little k-Kenwood, idea. 1 when work PAGENO="0308" 302 DEMO~STRATION CITIES AND URIAN DEVELOPMENT rehabilitated, we go back in the court for a petition for demolli because there is no use of letting the building stand if it shoul torn down. So this, we think, has been very effectiv4. Because when we go and review, anU our people con1~ back, sonje of the top real estate in the city, tl~r come back with the repor1~ that it is not feasible, this building i~as gone so far that it shoul~i be demolished. Thei go into the coutt en a petitioñfor demoliti4n. Mr. Asma~. On the basis of it being a nbisance? Mr. DALEY. On the basis that it is dange~ous, arid a public nuisa it has you~igsters playing in it, and it is daik~gerous. Mr. ASHLEY. Do you say that this is a club that you can kin hold over their head ~ Mr. DALEY. :i: would not say a club, but a~iother instrument and t Mr. B~uu~rr4 The time of the gentlenián~ has expired. Mr. Moorh~d ? . ~ Mr. MOORm~4D. Thank you, ~fr. Chairi~. Mr. Mayor, this is a very exciting story $bout Chicago that you us. And I con~mend you for the fine thir4gs that you have done the people of Chicago. Mr. Mayor, I agree with your testimoi~ that we should incr the funds for planning so that all cities can participate in planni I also share your concern that this $2.3 ~billion is not adequate~ I am also coi~cerned that there will be h4ird feelings on the par the cities which are not selected for de4~onstration projects. However, we~ may be faced with a budgetary situation that ti is just an abso~ute $2.3 billion ~ ceiling. now, assuming that thi the cas~, I ~w~n1Ed like to ask yo~ a qnesti4i. And you may wan defer answering it nntil afteryou hwve h4~1 a chance to consult ~ some of your peOple. Under the bill as it is now drafted, the *ederal Government wo pay 80 percent of the local share of the fed~i~a~ily assisted project. that if we take an urban renewal situation hypothetically of *300,( the normal Federal share would be $20 ,000, and the local sh $100,000. But if this particular project we e a demonstration proj the Federal Government would pick up 80 percent of the $100,000 that you woüld~ end up with a Federal sh re of $280,000 and a 1 share of $20,00~, or the Federal share woul be something in èxcesr 90 percent of th~ total cost. Now, if we wanted to try to spread this rogram a little bit wi~ or take in more projects, or more cities, w could, say, reduce this percent figure to 50 percent. And if we took the $300,000 hy thetical project, in addition to the normal ~Federal share of $200,0 if it were a demonstration project, there wGuld be an additional F eral contribution of $50,000, so that the ratios would be $250 Fede to $50 local, for ~ Federal share of in excess o~1! 80 percent. Now, what wbuld your ~ reaction be to a ~hange of that sort in demonstration c$ties bill that is b~fore us ~ Mr. DALEY. ~ do not think the chan~ would accomplish y objective. Bec~tuse even when you wouldi take in additional citi there are still additional cities that ae not in the progr~i So this would not answer that question. It would give you m cities. But it would never answer the que~tion for all. the cities. [on, be out ien hat we ice, of ol. ell for ase ig. ~ of sre is to ith Id So 00, re ct, so al of er, 80 0- d- al he ur n. re PAGENO="0309" a copy of it before me. And my has expired. Chairman. I have no questions. Chairman. Illinois help the various cities in ,, there are some States that do. with Mr. Moorhead's questioning on 1 that the local share referred to here after deducting that share that the community, or do you think that the as part of the local contribu- of the opinion that the State should ~ese projects. do participate, then naturally it should I 303 DEMONSTRATION CITIES D URBAN DEVELOPMENT We are hoping that there woul b some way, as we mentioned in ~ur statement, that the urban rene a program for all the cities would continue while you are trying o apple with this very difficult problem of the cities you will s ec for the demonstration project. But I don't think any modificaton of these figures would give you the satisfaction of having taken c re of all the cities ; it would only let you take care of a few additional cit es. Mr. MOORHEAD. It would only ta e care of additional cities. But because the Federal share would n be so munificent there would be, I think, slightly less disappoint at being left out of the program. Mr. DALEY. But then you wo have to remember what impact this would have on your going r an renewal program. If you are baking this a demonstration gr n then it should be done in such a ~Way so as to assure there will b ill effect on participation in the regular ongoing urban renewal ro ram. Mr. MOORHEAD. I quite agre . was saying, instead of making go percent, or 80 percent, you co 1 spread the dollars a little further. Mr. DALEY. You cannot. A d think this is one of the problems the Congress will have difficult w th. Every city feels-and I would support each one-every city fe is that should be a part of this demonstration. And I would If k every mayor feels that their city should be selected. However, there are acute si ii ions, as you know and I know, in some of the cities that will det r ~ne priority. Mr. MOORHEAD. Are you fam ii r with a proposed amendment which Mr. Reuss and Mr. Ashley a d have suggested which attempts to defin~1ie criteria of cities wi h he most serious needs or neighbor- hoo4~ with the most serious ee s ? If you are familiar with that amefi~ment, I would like to ha e comment as to whether you favor or op~1ose it? Mr. DALEY. I am not fami ia with the details of the amendment, Congressman. Mr. MOORHEAD. time has expired. Mr. BARRETT. ~! Mr. Stephens? Mr. STEPHENS. Mr. BARRETT. ~ Mr. ST GERMAIN. Mayor Daley, their local share: Mr. DALEY. N Mr. ST 01 Under the cii that 80 percent should be the State is State's tion? Mr. participate And seco be a part of PAGENO="0310" 304 D~NSTRATION CITIES AND 1~BAN DEVELO?MENT~ . Mr. ST G}~RMAIN. It should be consid ~redas ~part of the bc par- ticipation? ~ . ." ~ ~ Mr. DALi~. Right. ~ ? Mr. ST GEItMAIN. And theref&re it w uld not affect the 80 p reent return? Mr. DAu~. That is right. Mr. ST GERMAIN. I noticed in your sthternent, Mr. Mayor, that you. have done a great de~J of work in Chk~ago. I have never vi ited Chicago. But it seems to me that with WI the work you have ~ one out there you are already a demonstratio~ city. `You seemed to ave coordinated all of the Federal programs. ~As you state, in many reas you have opei~ spaees, you have parks-~nd I say this as a co ph- ment-but by1~he sathe token, Tam wonderjng if perhaps for the la ger' cities you are&t the model that should be followed. What would you think of that, Mr. Mayor ? Mr. DALEY. I think modesty would pre+ent me from answering. I do say, though, Congressman, very seriously, we have a g eat tradition in Chicago-I am not trying to take any credit for it. my lf. I don't know if you imow this but in 1947 in Chicago labor and b si- ness organized and went to the State legis~atuie and one of the r~t programs passed in the State legislature 4s urban. renewal. Afl! II would say that through the help of citizen p~rticipation-the chure es, labor, and many Organizations have been $rorking on it a long f e, and trying tofinkl some of the answers. ~ But I would aiso say to you that we have 4 lông way to go to achi ye what we wouhdhope the city would look like. ~ Mr. ST GERMAIN. I noticed a lack of con~eht and-and I *b~id r if it was intentional-I realize you tried to ~ét as muchinto the ~at - ment as possible, but I saw no comment on whether or not you'h d relocation problems. Or perhaps I missed i~ Mr. DALEY. I think it is covered in here ¶3~ñgress.man, at the bo tom of page 5 "during the past 17 years." ~ And let me sal here that I think every ci~ and every mayor ha. been assailed op. ~ this question of relocatior~. ~And they have bee ~ assailed sometimes on general acensations not~uppôrted by the recor or the figures. And we have been assailed. ~And I directed the ma on my left to make a person-to-person check ~o that w~ could answe~ these questions. Because the critics of urban tenewal say that in relo cation all you are doing is upiooting people, moviiig them from on slum to another. That is not happening in Chicago, and that is not happening in the country. What you are doi4 is improving the hous- ing. And as we say here, the people that ha.v~ been moved have been upgraded in 95 percent of the cases into b4er ~ housing. In other words, you have talken them out of the baseme4s~ you have taken them out of the attics, ari~d you have t.ake~i them out ~f hovels and put them in better housing. And I do not kno~w anything about the programs of other cities, but I think this pretty much is th4 record of other cities,, too. Mr. ST GI~RMAIN. Thank you, Mr. Mayor. : ~ . My time has expired, Mr. Chairman. But I hope that; we will have the privilege of asking the mayor a few more que~tiQns. I do hope that we will have a second round. Mr BARRETT I am quite sure the mayor wo~ld be willing to have his staff answer any questions that you may h ye. We do want t& `1 PAGENO="0311" ci on- 1, but ~ aspect I that rovide lea( ip for ~es, universities, and ~~TOsaJ? of rebuilding a an, that we are attempting through Mr. Duba, I DEMONSTRATTO~ CITIE ~ ~ I~RBAN D~VELOPM]~NT 305 give you the fullest n~easur~ of i ~ that we can to a~k anything that concerns the committee But I flY want to cou~ume too much of the mayor's time.: ~ Now, if ydu h V ~i other question, I think we can extend it a minute or so. Mr. Reuss ? Mr. R~tiss. Thank yQ~, Mr.' C ir an. * ~ ~ Mayor Daiey, Oougr~ssn~an M or e~d a mbrnent ago was exploring witi~ you the problem .o~ the siz~ ~ he demonstration cities program. He made the point that ev~n if~ t ~ resent $2.3 in the program is ex- panded by the Congi~e~s ~niti~U y, there probably won't be enough money to take care of ~ evøry c~it ~ desire.. Just as Mr. Moorhead's time ran out he was di~cu~sing~ ~t you the proposed Ashley-Moor- head-Reuss amendment( wl!ich ~ ~ hat the ~eetions or neighborhoods to be helped by the der4on~trat4b ~ ai~.t program should be' those sub- ject to high-priority ec~noanic ~n ~ cial pr~ssnres, such as population density, crime rate, pub~ic ~velf~r p rticipation, delinquency, poverty, unemployment, educat~onal le~ s, iealth atid disease characteristics, ~ and substandard housi~g, T ~ pü pose of that amendment is to see that the `funds are chai~nejed t h~ areas where they will do the `most good. We' are not und~er the i ` r , sion that these limited funds will ` handle every such higl~-priorit r ject either. But we welcome your ` reaction to this kind of an ~ffo , Mr. DAL~Y. `I woul4I s~, ~ ö g essnian,, that that is the criterion under which anyone would `de e op the program.. Certainly these are the neighborhoods we ~ho'~ld o to1 rst, and any other deviation from that would be not in ~cc~rd ~ ith the cónc~pt of this legislation. This would be our criteria in d t~ mining the project area. We are thinking about areas l~ke Law al and East Garfield Park and West Garfield Park and mafly other. ` Mr. REuss. Which `will sa 1 fy the kind of criteria I have men- I? this ourselves ii PAGENO="0312" i ~ 306 DEM~NSTRA~PION CITiES AND U~$AN DEVELOPMENT the whole question of local transportatio~i, not piecemeal, but ho the railroads relate to mass transportation. 4nd then I think as you ow we were the first city in the United States to put a median strip * n an expressway running out to the suburbs. We hope to do this also o the Kennedy and Ryan expressways. And we know, as your amendment poi$s out, that you canno talk about rebuildjng the cities or the suburb~ without t~dking about ass transportatioi~ and the movement of peo~4le. We are concerned bout how you moire people from tl~ir places o~f employment to where they live. And we are hopeful that we can co~4e up, as you mentioned with ~ new ideas, with new concepts, for examp'e, the use of our local t ails- portation facilities on the right-of-way ~of railroads,, with pos ibly, the taking over of the railroad completely. And we have also t iked about lines for buses with no interference from ~ passenger cars. nd we think what you are suggesting there i~ highly desirable, to cler- take research to develop coordinated tra~sportation sy~tems for our cities and particularly the metropolitan ar4a. Mr. REuss4 `~Phank you, Mr. Chairman. ~ Mr. BAiu~r$r. Mr.. Mayor, this is certaIj~ily very . helpful `and ery constructive te~timony you have given here~this morning. And I t ink the members have some more questions. ~ . Mr. DALEY. I would be willing to coop~rate and stay as long is necessary, Mr. Chairman, because this is a ~very imporlant subject. Mr. BARRETT. If you begin to wear down, let us know. Mr. DALEY. I don't wear down quickly. , Mr. BARRETT. Mr. Harvey ? Mr. HARVEY. Mr. Mayor, for the record~ could you'submit a br ak- down of your ~ist of completed urban re4ewal projects, the am nt of land in use ~iow, and for what general ~purposes, the amount on- tracted for but not yet in use, and the ~monnt offered but as yet `unaccepted. , Mr. PALEr. lVe will furnish that to the cl~airman. Mr. TIARvET. Will you furnish that for tl~e chairman? Mr. PALEr. Yes. (The information requested follows :) * . I DF~PABTMENT OF DI!WE*OPMENT AND Pr~&NNn'iG, 4lity of CMoago, Apr~l4,~J96 . Mr. JOHN J. MUE~AN, ~ ` Staff Director, Rou8ingy Suboommfttee, House Ba*~ng anZ Currency Commit ee, I Washington, 1~.C. DEAR MR. MCEW~tN : When Mayor Daley test1fled~before Congressman Barre t's subcommittee, he ~waS asked for information coi4ce~n1ng dispOsition of lan in Chicago's urban rei~ewal projects. Enclosed herein is the information covering thel overall program and more de~ tailed data on 11 projects which have been closed ~ut. If additional information w~u1d be helpful to afly comnilttee members, pie se let me know. Sincerely, r(n~N G. DUBA, Commis$loner PAGENO="0313" DEMONSTRATION CI~1'IES N URBAN DEV]~1AOPMENT DEPARTMI~T 9F IJ~RAN E~ WAL, CITT OF OJETICAGO ANALYSIS O1~ LA~D DJ~ OS~ ION, MARCh 31, 1966 The 27 redevelopment proect~ and~ 5 Co servation projects undertaken to date in Chicago's urban renewal progran~ i1~ make available a total of 883.4 acres of land for redevelo~~ment i~i bOth pt~b k nd private uses. As shown in the at- tached table, 606.5 acres or~ 684' per~è t ave been apprOved for sale by the de- partment of urban renewa~ bdard ~ d edevelopment is either completed, in process, or about to begin. I However, a more aCcuralte n~easu ~ o1~ rogress i~i la~ad disposition would be the relationship of land apr~ro$d fo ~ l~ to that available for sale. Of the total land designated for redev~loj~n~ient, ~ 1.~ acres are h~cluded in projects which have just come into execut~on O~ iii ~ Qj cts where land acquisition and reloca- tion have not been t»=c~rnplet~d, This a ~ therefore, is not now available for sale and redevelopment. ~ Of the 681.8 acres of la~td ~vhic a~ been cleared and made available for redevelopment, the 606.5 i~cre~ app 0 ~I for sale comprise 8~.O percent of the total. In addition, 10.6 a~es of la d 14a e been offered for sale and developers will be approved ~ within t~ie i~ery ~ r ture. That is, ~17.1 acres of land or 90.5 percent of the G&L8 ~cre~ of 1 d . ailable for siUe have been * either sold or are in the process of saie~ Only 64.7 acres or 9..~ p~rce~it of ~a ~ ~1 leared and available for sale have not yet been offered. This la$ wl~1 be ii ly offered for sale in the coming months 1~11 accordance with the de~arthaent s sc edule of offerings for 1966. .~ ~ ~ Total land to he sold ~,___~ ~ ---i ~ ~ Land approved for sale ~ L . Total land avaijanie ror sale. ~ Land approved for sale ~-._-~ Land offered for sale ~ Land available but not of!ere~ ~ Total land not available ~or sale] ~ -- 888.4 100.0 606.5 - 68.7 681.8 iooi 606.5 10.6 64.7 89.0 1.5 9.5 201.6 22.8 Acres 30 Percent PAGENO="0314" DEMONSTRATION CITIES AND tIRBAN DEVELOPMENT REDEVELOPMENT PROJECTS ~ ___________ *__ * 5~f~~frjp SIs,,s-MSUooI Ropj. I~T7YS U~*YS~ CONSERVATION AR~AS IN FEDERALL? APPROVED PROJECTS 20. L*ooU Ps.k P~sj~sI OTHER CONSERVATION AREAS STUDY AREAS 4L~Rs.$.s.S -AiqIsfoR 42 Uptosqfl. DE PARTMENT CITY *CLO3~D RENEWAL tYRE4N CHI*C GO Mayor Richard J. Daley has called urban r~ne al "the dty's most impor ant program affecting every activity of city governm~nt." Its objective is to ci ml- nate from our city all slum dwellings aiid to rebu~ild and conserve our neigh or- hoods so that every family will live in a healthy a±id attractive environment. In the renewal process,' the quality of the housing and the desirability of he neighborhoods are improved; schools, parks, and recreational areas are bull' to keep pace `with changing needs of the community; ~iew industrial and comluer ial districts are created; space is made available to meet growth needs of the ci y's PAGENO="0315" and local estment f r new con- 4 to 5 times as much. apart nents and 419 phaseof devel- Laud cost Improvement cost DEMONSTRATIoN CITI A D URBAN DEVELOPMENT 309 itional centers; tra~f1c pa' ongestion and the city council ~rman eputy )ttage I 1 Government) August 30, 1963. - 3,416 - 1,217 180 tent Acres 2,009 dwelling unit~ in 10 bigl~ rise buildi~ig~; 24 ~ow11houses~ 52. 5 $1, 163, 201 ` $30, 676, 000 240,000-square-foot shopping ~enta~; oftlce/ b~i1d~ig 19.3 664,356 4, 000, 000 New school and park; addltk~n to e~istis~ ~I1~t~f1 12.9 349,676 963, 000 PAGENO="0316" 310 DEMO~STEATION CITIES AND DEVELOPMENT 0 $JTa! PLAN LAKE MEADOWS PAGENO="0317" DEMONSTRATION ~ITI~ ID URBAN ])EVELQPMENT 311 District. Project name.-West Federal n'umber,-.tJR Location.-1 mile west east, South Canal Street; velopment Project; west, cage campus. Project closed ont (ftnt4 settleméiii ~s~th Federal Government), June 25, 1965. Project area.-48~5 acre~. 181 70 57 $4, 784,020 ~8, 092,249 1, 691, 771 rRoJE( ShEET ries: North, West Polk Street; Road; Roosevelt-Clinton Rede- and University of Illinois Chi- PAGENO="0318" CHICAGO LAND CLEARANCE COMMISSION DECEMBER I2~ I9~ ~LL ft. ~ *QUIS(~NTS A~O USE ~ESTRICTI~$ ml. S?I* 1* ~ b* ~*Aid *s . 3.d ~ dbP?tc~ ~d ~II ~ ~ t~*h4.I pwp~.s d~fI.~,d H~ ti~s sKtt~ of fl~ City *~ ChI~.go Z*~I~~q ~ .. i~d*d $*AprlI I, 955 p,t*k~ugt. ~ ~** dI$t(~l~t*, ~Wdh~g .11 pr~,l.I.~* .1 ~ ~ ~ ~ K*Ight - fl* 96 ~ m. n.~ oi ~ fist 0 fô~*~ ~ tP~* ~ ~ ~SIs $h11 ~.pIy .$th thI fO~In~ t. Ris!d.s~t!.I Vs. Th.,.o ssaIt n.e D' Y ~*slds.tIiI .~s s 5V ti. Ns.Is.. .~dCbJ4Vtlo..bI~Us ~b p.t f tiPs j,.. sñ*It b~ dISp$4 .# 0~s sy us. ~!c' ~ Ph' d.5s.5ts.5Is. of fl(s VsIs.Q. s.d CIs.V. *u~s C...I.iIs. stis s.s.. s.y ~J..tIs..sI. ~ .dsr. .lbs.tls.. ö.st. ts.Is ~s s.stssi .it ~Vis.~.-s.~. fs....rn pis.Is.u W~iu~ ss.I ~,i.t* ,. 4s.s.ds~sUs~ ~ `h.s.u.~'.$Ib.dI,.*s.d,s fs.~~s~s.. s~Ic5sIu ~ ?:~~ L.udCIs.,.. s.d ..1Vs.,s.$.ths~.P of l(%s.s.s.* 5! ss~s.s ~ s~. !!~us.a. o~OIspus.I .1 N~fs.* "Th.~.ou.Ir sot- bi VVP s..s(~* ~ dI.pos.I *5 ?*f~,$. VTh.~ SM. th.t p.s.ttt.d by .Ity'~VdIs..s5.. ~)5. 01f45~..s~s.d~~ 7~.sk l~dls~g $u4 uuIs.dIug *.,flIti.. ihsU b* ~s.$dsd ~ ~ ~ t. s.,#l.Is.t*q.s.tIly s.d Vu o o~.tVd IVØ's** ..V1~ 5~s.sps.ti.g ..t~.IsI tu s.d Es.. ths ~.Itd~.~gs sill .ht1s.Iy ulihi. th. ps.ps.f I~* "CV ls.dIs~ .~ ~lasd159 S9sPstIs.*. *s uq~Iss4 by Vhs City ~ Ch1u.q. ~ L..~Isg Ps.' ~sI ~suVIVg sps.. shall b* D~s.$dd 5.. u.d~ Sass ~.pIO ~ ~Hr..Vy,s.~Dv.oCMeVt. ZósIVg QydIs.os., OV..Sts.s *Sd otdh'9 PtO~I$Jt$$ ~$~VOd54 00 ~OIV $ ~ $o~~qof !~!° $t,,s~.A,m I. 312 DEMONS~?RATION CITIES AND UE~AN DEVELOPMENT 17-j MAgIOR CONTROLS 0. Cs.s..tj~i *M Light itds.t,1.I' P.~p. ~ ~ 6.9 ~- 2. Ls.d k.q.i..u tO4tiog u,p.~tis.stts.~ It tt.* I of 0000 L.g.td oft Cs.f*tt. *0th 00* R4ds..iops.tt plo. .5 ` ~ 00 *h~*h TOte Oh. LOt~4 slit 6. Sold for 6* itt ~ ~ ~ . *1*0 this 6d*V*~0fØptt Plo. ~ i. Light itd~sttf*I~ sift h.liro.d SOd. ~ inp'bit..st Cit'tt*t s.d Coo.$ $t~. 26.0 5. Sooth Eopr.us.y .14 tItf Atto. ~.6 9.9 I~3.5 LAND. US~ EXHiBIT NO. I OF THE ~REDE~VELOPME'NT. PLAN SLUM ANQ BLIaHTED AREA REDEVELOPMENT PROJECT NO. 3 PAGENO="0319" D1~tON.STRATION Cfl~IES A D IffiBAN DEVELOPMENT ~ ROIECT C~ SHEEP Project name.-Michael R~?ese~-Pr irie hores (Project No. 7). Federct~ n~umber.-UR Ill. ~-6. Location.-South-c~ntra1 a~ea~, 21/2 11 S south of the Loop. Boundaries: North, 26th Street ; east, Mi~ha~l Rees ospital property ; south, 31st Street and the Lake Meadows rede+elopm~n ~ rO . et ; west, Southparkway. Projeqt clo~ed out (final sett1~men It Federal Government) June 2, 19G1. V * Proje~t area.-~-55.1 acres. V ~ Reoatin Fami1ie~ ~ ,~ ~ 604 Indlvid4als~. 4. .~ 207 Nonresidential e~tabl1s1lp~ents ~ -~ ~-_ 58 V V ~rotai 8truOt~re8 ~ . Det~Z p e~t IV I j V~ ~j V~V ~ ~fVV 5 high-ris4~ apartment buildings, 1,O7~'renta1 uni ~, ]?~: 220 financi4g ~ ~ Shopping center with 0 stores ~4 ~- -~ 5 hospital buildings ~-:---~ ~ Gross project (~1~f * V Less-Proè~eds fromthesaje o~ 1n~AL V I V `~ap1Lai ~. ~ E~e1ocation ~ 4~4~ Improve- ment cost 18 9 1.4 16 1 V $412, 379 80,862 350, 223 $18, 900, 000 278, OQO 8, 210, 000 Total ~ .. 25,204 3~55V7j~9 kN oucassi ~ Cash ~ ~ Total J__.4. 1, 4~V096 1, 810,551 res Land cost 313 Net project (~af V Federal grant: $6,259,734 ~93~ ~464 ~466, 270 LocalgrItnt: PAGENO="0320" 314 DEMDNSTRATION CIT~S AND -J 0 ACRES 9.2 3.8 `.4 4.0 38.4 6.7 53., Eai~m8nl I I 11 `Ii 11 \ ~ ~ \ ~ \\ E. 31ST ST. \ -i ~o~C I LAND US~PLAN EXHIBIT NO. IT SLUM AND BLIGHTEbAREA REDEVELOPMENT PROJECT NO. .7 CHICAGO LAND CLçARANCE...COMMISSION NOVEMBER 4, b960 400 PAGENO="0321" DEMONSTRAP~O~ CITIE~ N ~ URB4N DEV]~LOPMENT 315 Pi~o~~ 4 SKEET ~ Project ~ "A4" Ped~eraI nb~.-~-tTRThT~, 0k7. * Lox&tion.-6 miles south ç~f tpo~, ~ ~1ty o~ Ci4c4go neighborhood, located generally at 55th Str~et an4 ta~te P ~ ~ ~ ernie in th~ Hyde Park-Keiiwood con~ servgtion area. .~ ~ ~ ~ ~ Fi~oject closed out (Th~tl ~ettleme ~ ~ ~ ~ ~c~eral Gove~nmeut) Se~ten~ber iS, 1964. . ~ ~ Project areG.-42.7 acres. ~ ~ R i~'anni~es ~. -..~- .. .~ ~ Trrullvilncdq ~oures1dent1äl ~ I L I 1 - I I,. ~I ~ I ~ii:.ól ~ ~ 849 4TIL 190 Acrös H ~ ~ ~ ~ ~ ~ ~ ~ ~ : * ~ ~ ~ ~ ~ ~ ~ ~ J~ ~ : ! ~ ~ h ~ ~ Land cost ~`. ~ ~ ~" 2 high~rise buildings with 540 F11Aj220 f~nanci ~ a4t units, 223 3- and 4-bedroom sale row hO~ses~-eO1We i r~1 financ. tug $U~,OOOj~o ~ .~ ~~2j3(c)~. 78,OOO.~,~u&e-foot shopping center ~rith 18 store a ct 2 edical offices, park1ng~fac111ttcs tor e.,~Ist~ig bti~tness ~. ~ ~ Public park, nelghbothoOd club ac~dUio~ ":: ~ ~ L ~ 20. ~ ~ ~ . `7. 2 1. 7 $891,481 ~72, 007 81, 643 . $16,151, ~OO . ~ 2, 117, 920 ~ 120, 000 Improve- ment cost Grøss projec1 ~ ~ Less, proceeds from the sate Net project Federaigrant: ~.~Jup1t2.t~ Relocation L Local grant $11, 024, 284 1, 54~, 181 9, 479, 6, 196, 706 184, 094 ~ ~ 6, 380, 800 295, 309 2, 803, 044 ~ 3,098,353 Oksh L__L_J_L~ Pno n ~AOP SEFIIIT Project na~me.-Hyde E~ark "B." Federa' number.-IYR ~LL. 6-8. Looation.-6 mjles so~4th pf th ~, University of Chicago neighborhooçl, located generally at 54t14 St~et ~i rchester Avenue in the Hyde Park-Ken- wood conservation ai~ea. ~ ~ Project cl&sed out (f1n.r~l se~tlem ~i ~V th Federal Government) , June 29, 1959 Project are~.-4.6a~Ø~. . el cation Famines .~-H----~' ----- 4 Individuals ~ 76 69 Nonresidential establ!shren~s -- ---------------------------- Totai structures demo £sh~d.-~.~ 60-878-66--pt. I-4-~-2~. PAGENO="0322" 316 b~ONSPRATION CRIES ~ ~EB~ DEVELOPMENT . De'i,eiopmen ~ ~ * ~ T Acres Laud cost Imp ovement ~ . ~ cost Conventional finai~icing, $20,000, 15 sale rowliouses, parklu ~ ~ for existing ap~rthaent biuldmg 0 8 $2~ 401 $401 760 $chc~ol playgrouiid~ ~ ~* o aa, 912 ioo, ooo Finaneing Gross pr~jeet~ost ~ ~ $ o, 845 Less, proceedS ~rom the sale of 1aI~1 ~ . 0, 813 Net propect cost ~ ~ 5 0532 Federal grant Capital ~ 3 ~, ~ Relocation ~ ~ 3, ~ TotaL-.~ ~ 38599 Local grant Noncash.~. ~ ~ i 582 Osh_~___~_~ ~ i o 851 TotaL__.~._ ~ 21,933 . ! PAGENO="0323" DEMONSThA~PIO* Ii ~.` II a I[iiii IL :i' In IL IF uRBAN 1)BVELOPMEN~I~ 317 iiii[Q ~~~-~---` r PAGENO="0324" 318 DEMONSTRATION CITIES AND URBAN DEVELOPMENT PRo3Ecrr FACT StISST Project name~-Roosevelt-Clintou. Federct tvumI~er.-Ili. R-2. Location.-1 ~nile west of th~ Loop. Bounda~ es: Nortt~-Roosevelt Roa , and West Central ~ndustri~I Redevelopment proj t; east-South Clinton Street; south-l5th Street; west-Dan R7an Expressw 7. Project closed out (linal settlement with Fed al Government April 16, 905). Project areo.-46 acres. Re~ocotion 166 91 119 PAGENO="0325" NO~Nfl1 -1 ~ ! I $ I B~MONSTRA'~FION CITiE A~ VRBA~ ~V~tOPMEN'I~ ~19 Hi z z ..JU) PAGENO="0326" 320 ws~a~no~ ~ ~wD ~ . i PROJECT FAOT S+ET ~. Project name~-13th-B1ue IslaZid. . Federal num1~er.~-I1L R-13. . Location.-1½-mlles west of the Loop. Boui*Iaries : North, 13th Street east, Blue Island Avenue ; west, South Racine Avenue ; adjacent to Brooks an Jane Adams public housing projects and just south~of Near West Side conser ation area. Project closed out (final settlement with Fedbral Government), June 24, 19~4. Project area.-4 acres. Total BtrUotures demotished.-20, Reioeation Pamilles__.._...4. ~ .~- Individuals._.~ ~ Nonresidential.'establjsjinjents - 24 -~---~ 3 [~ 9 . Deveio'pment Acres Land cost linpro ement Co t 44,000-square foot sl~ppping center with I stores, 2 medIcal centers and a gas station ~ 2 8 $103 079 $ 00 000 Financing ~ . Giross project eqet $41 , 510 Less proceeds from the sale of land 103 679 Net project cost~ ~_ 306 831 Federal grant : * ~ . . ,, Capital__..... 195 193 Belocatlon. ~ [4 ~4j TotaL... ~ ~ ~ ~ 234 Local grant : ~ 16, 848 ~ 80 749 PAGENO="0327" DE~4ONSThATION W. 13th ST. W. HASTINGS ST. URBAN DEVELOPM1!~NT, MJ~e CONT~O~S reas ~nd Perk1e~ EXHIBIT NO.1 b~ set beck mtnteukof 32 psOp..ty line en Codes Acenu~5 on the property lice on Clo* SLUM AND REDE\ -- PAGENO="0328" 322 1~31~ONSTEAPION CI'flES AND tt~EBAN DEV1~I~O?M~NT PRo~rEcTr FA,r S~EET Project name.-State~Pershing. 1~'edera1 nt~mber.-IIL R-22. ~ Location.-4. miles south of the Loop. B~mdaries : North, West P rshing Road ; east, South * State Street ; south, 450 fe~t south of Pershing Rc~ad ; west, South Dearbo~n~ Street. Adjacent to Roberj Taylor public housing roject. Project elo~d out (final settlement with Federal Government), M y 2Z 1964. Project area.~-8.3 acres. Familiee~_J~_. Individuals Nonresidential esraoiisnmen~s Relooatio* Total 8trueture8 dmoiitl~ed~.-17~ - -~_--___ Development 12 9 10 44,000-square-foot sbo~pin~ center with 14 stores and m~diea1 center Acres Land Cost Impr vement cst 2~ 1 $222, 512 ¶55~ 000 P~nanoing Gross project ~ Less proceeds from the sale of 1c.~A Net project Federal grant ~ L Local grant: I Thtnl 1~i1 $31 ,090 22 , 512 8 , 578 5 , 09G 443 60 533 1, 295 26 750 28, 045 PAGENO="0329" ~6 Li 4 C', U) URBAN DEVELOPMENT 323 LAND U$1~ AÜAS Net Area.. * .aIl, chopping Streets Gross Acres 2.L *1 .2 3.3 LAND USE PLAN ,~{~UM AND BLI.GHTED~ A~EA ~ I STATE- PERSHING CHICAGO LAND GLEA~A~4CE ~ M, ,ISSION~ MA~ 2~,t96Z , ~ PROJ ` *G1~ SEEET Project ~name.-State-5~st, , FesZeral ~t4~nbø~'.-IU. ~ ,~ ,~ , , , . Looation.~-5'~mfte~ soi~t1i'otth~ ` ,~. , $~*I14~aDies: North 50th Street; south, West 51st Street ; east,J S~~th ~ø , Sti~eet ; west,' South Dearborn $treet (adjacent to Taylor ` pub~iq ~ious1 p ject). ` Project c1ose~1 out (f1n~d s~tt1 è t ` th~ $`ederat Gwernment),, De~ern~er 1~, 1964. Project area.-.-4.8 acres. e~* atiofl~ .uamines _ ~ .LuctlvluuaLs ~__ ,.~. Tota'Z Str*otUrO8 Zeno4the~L-4. opmont 86 9 11 60,OOO-square-fo~t shopping ce~er with 12 ~~edica1~ clinic ~___~ --~. Land cost Improve- mont cost Acres 3.8 $494, 677 ` $1, 000,000 PAGENO="0330" j zC Pu, `TI -a uZ-4rflr rG)m< i- ~O 0 c~Z~r (00 m- m -~ ~ 0> > c_z Z mm C) ~> C) 0 (I) Cl) 0 2 1~ ~ c,t,~ I 0 `~ ~ ;~ ~ :4:~ *1 I 0 PAGENO="0331" I 325 DE1\40NSTR4!VIQN CIfl S D t~RBA~ DEVELOPMENT ~?Bo ~ ~` CT S~ErI~ P~jeet name.-79th-~-'SVest~,ru. Federal number.-None. Location.-Vacant tract 10 mu otit west o~ tbe Loop; boundaries: North, 77th Street; east, South 1We~tern 4~ ex~~ e.; south, 79th Street; west, Rockwell Street. Originally undertaken ~s ~eder 11 ~t sisted ~roSect; capital grant contract eanceled when it became apparent re would be little or no net project cost. Project area.-84.2 acrE~s. TotGi structures de2noii$h1e4. ~` 0 eel ment Acres Land cost Quigley Seminary (Catholic) education n ~ rmitory facilities ~ 30.4 $700, 000 $5, 000,000 Additional parking for reStaurantiad~aeent to ~r je~ .4 14,000 10,000 Improve- ment cost `n4u*~g Gross project cost..... - Less-Proceeds from the sale M'* ~et project ~ Local grant Nonci - (Th ~]i YP.+nl $724, 787 714,420 10,367 4- Th 0 10, 867 10, 367 PAGENO="0332" 32~ STR~tIQN ~~ITrIES, I~ND ~ LAND USE PLAN EXHIBIT NO. VACANT AREA- REDEVELOPMENT PROJECT NO. 2 CHICAGO LAND ~LEARANCE COMMISSION SEPTEMBER 4,t1959 34N. ZXEVF1LOPM~N']~ __ I L~i L~J L i L~J 1. w.Trth W. -79th ST. H I iiH~ 334 00 0 00 200 03~ E SCALE IN FEET oço 0 a.' PAGENO="0333" Gross project ~ Less proceeds frém the ale of ~ ~. ~ ~ 94 12 29 Improve- memt cost $1, 250, 949 1'J4~ 782 1, 1O~3, 167 dITt~ A ~ ~ ~EV~LO?ME~ t~EoJ ~ OT SIIEItT . ~ . ` ~ Projeot nai,w.-69tb---~S~ew~rt. Federai swmber.-~-ILL~R-~8. Loc~tion~-8 miles sout~h o~ Loo , 10 ted wit~' So~tthwest Englewoo4 Con~ servatlon Project aloug b~th sides o ~ ~ eSt 69th ~tree~ between South Normal Boulevard and Sottth P~inc~ton eh e,. adjacent to Wilson Junior College, Chicago Teachers Oo1lege~ and Pa ~ r lementarv a~d~ !lfgh ScJ~e~rl. Project closed out (fhial settlem t wth Fédéral GoV~rnn1ent) June. ~5, 1966. Projeot arer.-1Q.6 acr~s. ~ ero ~ .u'amiiies ~ ~-~- ------.~ . . -- Inaivictuals ~--~-~-~4_--- . ~ Nonresidei~tia~ eStabii~x~ier~ts.___4 ~ ~_~_ ~ ~.~__~___~-_-__ Tot4I ~tt~uot14r~8 ~eohe~.-5~. ~ D~tfYPfn~t Sduplex structures (1Osa1e3.b~d ooir~untS) ~ ~ ~A ing, sale price $18,100 to $18,500 ~ ~ ~ Bookstore, cafeteria, service sta14ox~ (8 biaildi ~g )~ Parking lot and landscaping for ~c1~ool Cemp ~ . . . 2Ofina~c~ Acres Land cost o~ & `9 4~ 9~ $~9, 2fl . 40, 9~l4 S4,607 ~O~9 $160,000 88, 000 139, 000 Net project ~net Federal grant: -`~,~--~ ~`_~- Relocation - -. Loeal grant : , ~ Noncash__~ _~4 . `, Cash _~ ~ ~---~ ~72O. 140 25,957 746, 097 . 49, 109 810, 961 860, 070 ~. PAGENO="0334" `9 8'O LAND USE PLAN EXHIBIT NO. $~AL~ M fEET SLUM AND BLIGHTED AREA REDEVELOPMENT PROJECT 69th- STEWART CHICAGO LAND CLES~RANCE COMMISSI~ON FEBRUARY 2, 959 Ac~RES 59 .3 R..j4.nti$ S~hooI proposed add~t' ~ Shoppi..g Addition6l Net Aee~ Steect. A?ee 2.6. PAGENO="0335" tamper wJ~ it an criteria su~ agreement PAGENO="0336" 330 DEMONSTRATION CITIES AND ~1tBAN DEVELOPMENT sophisticate~E measures, we are taiking~ ~i~?dut crime rate, and d~1in- quency, and the lack of open sp~e~, a~nd ~ are talking ~b~ut th levels cf education~d deprivation-these are all subject, as I say, to r ason- ably sophisticated measurements, meastirements which already exist. So that if you would come in with a Hyde Park-Kenwood proje t, for example, and you show that in these particular areas there was g eater need than let's say, an also worthy prdj~ct from Toledo, Ohi , but where in these areas the measures were 1~o a lesser degree, still s rious but to a 1ess~r degree, th~ri it seems ~to n~ that you might be e titled to a higher percentage of Federal input 1~han Toledo, although oledo would still be the recipient of a minimu~ of 50 percent of what ther- wise would b~ th8 local share. Mr. DALEY. I knoW this is a difficult question, Congressman. But I would hope that there would not be a~I this great competitio be- tween the cities, or this desire of favoring one city with a formula over another, whether it was Toledo or Ohic~o. We are anxious t get, as we said, as much as we can. But it does present a very di cult question. Mr. AsnLE~r. I want Chicago to get a~ much as it can get, a d I want New York to get as much as it ca$ get, and I want the reas that really need it to get as much as they 4an, even at the expense of a Toledo prOjec~, as an example, at the 5O-~rcent level rather tha the automatic 80, because if we are funded a~t the 50-percent level bvi- ously this means that there would be more ~funds for those areas, p rti- cularly in the larger cities where the need is, I think, demonstr bly greater. One final question, and there is a technical question. Have you ad any trouble with your 221 (d) (3) programs that you know of b sed on the cost of land ? Mr. DALEY. No. But we have, like eve~yone else, the difficult in getting off the rou~d. And we are just n4w really finding the res Its of it. As a matter of fact, the recent proj~ct on our newer Souths de~ has been set up again on an experiment~l basis with one-third of 221 (d) (3) , and one-third beyond and abote that, and one-third ~f- mite expenses of the department to try to hiitke a neighborhood r p- resentative of the different types of people. Mr. ASHLEY. But the organization tha~t undertook the ~21 (d) 3) in that example did not have difficulty becatise of the cost of the la d, did it ? Mr. DALEY. No. We have one at 71st Vlncennes 1;hat we are p1 n- ning, and another on the near West Side, ~iid we hope to put one in Lawndale. Mr. ASHLEY. thank you, Mr. Chairman 4rid Mr. Mayor. Mr. BARREVP. Mr. Stephens, you asked no t~uestions on the first ti e. Do you desire to ask any que~tio~is this time ~ Mr. STEPHENS. No, sir. Mr. BARRErP. Mr. St Germain? Mr. S~ GERMAIN. Thank you, Mr. Chairman. Mr. Mayor, what is your average tinielag in urban renewal, in oth r words, from the time that you take title to~ the renewal area to t e time it is once again producing tax moneys for~the city? Mr. DALEY. That is a very good question~ Congressman. I thin it is too long. Mr. S~ GERMAIN. That is the problem. 4nd I was wondering i you have been able to improve on this? PAGENO="0337" com~1eted. we are very grateful tryhi to beef up our u ~S flo criticisr operation Mayor, ielag. e it too fast, be- I we have PAGENO="0338" applications pending at the present time that we hoped would have b~en approved months ago. Mr. ST GERMAIN. Would you agree with others who have expressed concern over the fact that there are a gretat number of projects that have been approved, so to speak, where ~p1anning funds have been granted, and y~t no funds are available t4 actually implement these programs ~ Oi', to put the question in ai4ther' manner, Mr. Mayor, are you one-there seems to be an increasing school of thought that in many of these areas the Federal Gover~iment not only in housing but in other areas-OEO, and many otheis-that a lot of these pro~ grams look wonderful, and these planning funds come along, and they are not bad, but after the planning funds niothing happens. The peo- pie have something wonderful dangled in front of them, but unfor- tunately no implementation, no actual resultS. Mr. DALEY. I think this is bad. But aJ~o I recognize their prob- lem. They have such a ~tremendous ba4kiog now on urban re- iiewal, and it is~ a difficult decision tQ try t4 determine the priorities. And they have difficult decisions in povert~. And actually and lion- estly, the poverty program being a new or~e, many of the programs are new, and many of the procedures are new. But in my opinion, working together we can find the answers to some of these questions. Mr. ST GERMAIN. And that is actually what you referred to, Mr. Mayor, on the bottom of page 2 in that step No. 1 when you referred 1)0 the urban renewal ? Mr. DALEY. That is right. Mr. ST GERMAIN. The last question, Mr. ~Iayor. A suggestion was niade yesterday ~by two different witnessest that thought should be given on relocation to a concept whereby in~rtaiu cities where there is no land or bui~ldings, housing available, t~hose people are going to be displaced, to put them outside the city lirliit, in. an a~ijoining corn- niunity, so to speak. I wonder if this suggestion has come to your ittention, and if so, what your opinion would be. I frankly questioned it, feeling that the head of a body politic as well as the citizens in- c~o1ved in the demonstration cities, let us say~ would not be too happy about this, because what would be the value of a demonstration if tiie~y are not going to be allowed to take ath~antage of it, if they are going to be actually deported, so to speak ? Mr. PALEr. I would not deport anyone th~at wanted to live in the city. But the pr~blem is so acute that if they~could get better housing in the suburbs, I think the faster we would put them in better housing the better it would be for everyone. And the other thing is that we hope we will have more public hous- ng in the suburban areas. Unfortunately, there is very little of it there now. Mr. BARRETT. The time of~ the gentleman has expired. And all time has expired. Mr. Mayor, we certainly `appreciate your ~ming here and giving us this very informative and excellent testi~nony this morning. I think you have made a splendid presentation. ~ Thank you very much. Next is Mr. Herbert Bingham, executive s4etary of th~ Tennessee Municipal League. ~ Will you come forward, please ? We are glad to have you here this morning. We do want you to feel at home, like all o~ our other witnesses. And I am quite sure 332 ~*wi~1wJ~t~N crriE~. ~n PAGENO="0339" D~MONS~BA~IO~ U~BAN ~V~LOPMEWT `northng. 4nd do so, and then PAGENO="0340" ~4 . ~ ~~r~ATio:t( ~C1~9~(D ~ ~i~t~AN ~I~T~MENT ~ NOw, you ~~1±e fiteed with n~t a carrotia~rd a g~t, but a~ carr a whole herd~ of goats. A~i in that st4~ede som~b&Iy is goi g t~ getliurt. ~ ~ ~ ~ ~ I So let's op~n this up to all of urbt~ineri~~Let's in~ite these cities according to we11~conceived st~nd~rds to submit their d sires and their ~pabilitie ~ s to perfdrm as der*i~istration cities. Let s de~ velop the model that we are looking fo~ t~ demonstrate. And then. let's take the ~mal1 city and the geograpI1ic~ area and drop its na e, if it wants to try ai~d show it cai~i dem ~ otistr~te its ability, in a jar. And. then let's pick pick out 3 of each jar, 15 ~or 1~ or 20, and let th be the demonstra,tion cities, and get the ~pia~miiig~ rnoney. We dar not raise the exp~tations of the distressed ut~u areas an~d their poi tical lead~rship*nn4their peopI~ by promishig ~i1 of th~m, if they will plan and work, an ~portunity to have this ma4~eloi~s new program. here has got to* be ~ome fair and realistic meth~d of selection. Now, I want ~ to get to the mountain-4ut~of4he-moI~hill situ tion that we are géttin~ into on thisbill. This is a very simple concept. We take $he urban renewal prog am, with we have had 16 years' experience, to ~linpi~ove the urban env ron- ment, physical environmetit, and we cootdiuate it with the po erty program to imj~rov~e urban people. And w~ tome out with a mary bus coordinated ~prog~am that is the do4~Stra~tion city program. ~ We are using trh~d1and tested methOds and thcb*~i4ue~in a Very simple lan of ~,oordinatiO*. ~ I * ~ ~ . Now, if ye~i brought Mr. Sia~ton of urb~n renewal and Mr. Sh ver of OEQ dowii~here and asked them, I thi*k they would tell you hat that is all you are doing in this bill. If * had enacted in the H use of Represent~tives, as in the Senate, the I~itergovernmental Coop ra- tion Act, the President could have done this by Executive order. ith no difficulty, putting these two programs ~together. It is signifi ~ nt that there is no new Federal aid progr~n~} on top of the 140 or ~ other existingFederal aid programs deali4g with urban. goverurn nts and their pro1$ein~ and urban ~ommnnih4s and their problems, ut only a n~ethod ~f systemath~all~ dealing with the problem of imp ov- ing people an& their urban environment simuitanecusly unde ~ a coordinated phtn. . ~ ~ . . Now, we are~roviding sorn~ more tools f~r coordination in the p1 n- ning and the execution. The key to this bill is that the mayor ~ nd. couucil of tht~ city, the demonstration cit~,. will create an agenc to coordinate the pla*ming and execution of'a~project to rehabilitate he people and thephysical eri~ironrnent, and w~i1 be given 80-percent s - plemental grants for the local share oi~er a*d above the existing F - lera share of these projects in order to encc$arage côm~Iiance. Now,thesiMi~ in my Statoare enthusiast~k about this bill. We ad One small city~4~d one large o~ie that a~t~nd~d along with aome 20 others the brie~*gwhith the Secretary of th~Th~bau Department m de some 3 or 4 w~eks ago. They are enthusiastic. We are going to. h ye four metropolitan cities and 2 or 3 dozen~ cities that would Eke to be demonstration cities. They are ready. Now, I want to emphasize that this is no~ such a complex and d f- ficult program that it cannot work immedi~ate1y and smoothly. et me take one of our cities in Tennesee, the m~tropolitan government f Nashville in Davidson County. I hate to ring it up and comme t. *1 PAGENO="0341" *1 DEMONSTRATIO~ CITIE ~ URBAN ~v~o~n~t' 335 about it, be three of i onëept ~ have I ~ervices and ~wa1 in 5- 0 do what is 40W ~ most significant `-/ipJ ~ission to coo comprehei PAGENO="0342" ~ . .:~ 336 M~N~TRATION CITh1S~ AND URBAN DEVELOPMENT ` èörnmunitywide ~ wathr-~sswer systhn~i, wikat we refer to in the tradeS as a sathtary ~itiity system. . So we went over to the Department of Agriculture. And they said,. "Now, you are going out along the coui*ry roads out here, an that part, serving the rural areas, we are in~,erested in, because we haveS a rural impr~rement system, an interest ~in a rural improvemen sys~ tern. But all the rest of it is of no interest~to us." . ~ ~ So we wen1~óver to the Urban Depart4ient. And they said, " ow,. we see your i~yout here, and your engu~eerrng studies. We wi 1 go down the roaU to right here, where 20 ~ears ~ of projection mdi ates~ that there will be uthan development. Bitt that line 4 rniles dow for rural service is no business of ours." So we went over to the Econornie Development Administra ion.. And they had an economic development ~i.an. And they said, " ow,. if you want a water or sewer line up to the industrial plant, th t is. our business; But all the rest of this is of ~o interest to us." So we went iover to the Appalachian C4inrnission. And they aid, "Are you a de~eloprnent center for your a*a?" So we said, "Indeed." ~ And when~ ithey had located the neighboring communities, we thought we ~4re in. But they brought ~ut the big black statis ical book that had past and potential econorni~ growth. And we we en't. the development center. And we left sadly. And we went over to Health, Educatthn, and Welfare, and aid "at least we can build a sewer system." . And they said, "Well, now, we see all of these plans. But we 1 k down here, here is the disposal plant. W~ are running a health ys.. tern, and we want to stop pollution So if ~you want a disposal p1 t, we will help yo~i." Wesaid, "W~ have got one of those." Now, .it is li1~e five blind rne~ looking a ~ a.sanitary utility sys em a~d seeing only the part.the law said the ~ had . an inthre~t in, wi en the community wants a sanitary facility $ystern that will serve . he . total needs of the community. That is what we have got,' the b ts~ and.pieces approach'. ` . ~ And. this bill, both the economic development bill and the demoust a~ tion cities ~ and ~ urban development bill Ji~ave the purpose of ov r- cOrningthis a~p~roa~,h at the locaj,and the E4derallevel. Mr. `Chainia~i, if any distinguished .m~mber of this commit ee dQes nOt belie~ what ` I have told you ~4lxmt the bits-and-piec s~ approach, if you have got enough . influei*e to keep some of th e agencies open tomorrow, on Sathrday, we ~ill go over there, and y u will hear thom. ~ ~. . . ~ ` But this is only ~ one example. Here is w water and sewer syst that we are talking about, and there are inan~ytmore. , . ` Do you want a systematic approach, deai~ng with the whole pro lein? That is all these two bills do. They dè not add anything, exce t. cOinmonsense, to the science of urban rnaniigement. And we niu t have it. We cure one problem and create th4ee n~ore, because we we e looking at a bit or a piece of the whole. ~ Now, on this mountain-out-of-a-molehill on this dernonstrati cities bill, I am pure that this has never h~ppened in WashingtO before. But its proponents and others are ~hest; thumping and bac PAGENO="0343" PAGENO="0344" 338 DEMONSTRATION CiTI1~S AND UR~AN DEVELOPMENT a war-burdeneU economy we~cannot have it~fu11soore. And there n ver was a time that. you could ta1~e a hundre~1 people in a chowline and feed them all i~t once. They have got to ~by one by one~ . We a ked for the adv~ar~a~ge that these~ two greats bifls o1~er with what, ver technical an~ddnaents that thiØ committh~ wishes to make. Thank you,i~Lr. Chairman. ~ (The complete statement ofMr. Bingbs4ifoUows:) STATEMENT OF th~E]!~RT 3. BINrnAM, ~XE~T~IVE SI3~Q!~ETARY, TENNE8SEE MUNIC PAL ~ LEAGUE . ON BJ~IHALF OF THE NAPIONAt LFAGUE OF CITIES Mr. Chairman, I am Berbert J~. Bingham, the ~xecutive secretary of the en- nessee Municipal League, an organization of t~wn and city government of Tennessee. I testify generally in snpport of the1Dexi1on.s~rat1on Cities Act and the Urban Dev'~~~ment Act on behalf of my ]~ague, and a1~o on behai1~ of the National L~ne of Cities, an association 4f 4~ State municipal leagues and of more thaU ~3 500 municIpal go~rernmen~s of ~lie Nation First, the test1i~ieny you have re~ently heard ~Erom Mayor ~erome P. C~va- nagh of Detroit, lpi,esident of the National Lea~tie of Cities, has my str~ng endorsement. ~ ~th~ greatest practj~,a1 lmportan~e in carrying out the Den~on- stration Cities Act at the local level are his sugg~stions for modifying ftnan~ial provisions without unduly increasing the expen4jtnre obligations on the ~ed- eral Treasury : an amendment authorizing use o~ title I urban renewal fu~ids available under the Housing Act to supplement ~the $12 million author1zat~on and the $~ mil1l~n appropri~t1on p~oposed for ~p~ogram planiling purpos~s; contract authority to permit immediate availabiiity of the entire $2.3 billon authorization fo~ supplemental ~tant~ when the ~eg1slation is enacted and re lease of the entire $2 ~ billion 4 3rear authorizatlontfor urban renewal authori ed by the flousing Aot1ot 1965. * ~ ~ Mr. Ohairman~ i~i all of my 20 yeai~a of liiten~i~e practice In the field of In- tergovernmental r$atlons on bebalt of cities t)ie principles and provisi us contained in these two magn~ftcent bills pi~efluise~ t~ie most efi~ective contri u tions to improviu~ urbali conditions and urbaii ~Mng It they are enac ed and iniDlemented, t~resulent JohnsoX~ Secretary JWeaver their advisers a d this Cotigress, wiTh have ear~ied and will s~irel~V~ 11a~V~e the. gratitude of gene a- tions of Americans If there should be a failui~~ in eba~tment i~ading or adm1ulstratIou~ our vast and powtng urbau com~uulties will continue un er the threat of chaos. They wilT declihe In econoi~y, utility, beauty, livabill y, and culture, ai~d there is the real threat of weakez~tng the fibers of our civill a- tion. ~ ~ - The techniques ~et fort1~ u~ *otb ball~ are the ~same-~-a comprehensive s a tems approach in~rOlved unified planning and coo)~Inatcd adjz~tiiistration ru the deinonst*4tlon cities bill disadvantaged ~$ople and the dE~teriorat d physical envtron11H~it of the sithn a~a~s of cItle4 are t~ be dealt with ce prehensively. in ~t~ality, it is met~4~ a cthntin*4t4~ñ of tb~ tried~ and test d urban renewal pro~m *i~d the som~hat new az4*pover~y progi~am The urban development pill merely ap~lles tø 4tlre me~epol~tan areas t e tried and te~te~ pr~graths M compreheti~ive cornmi4iity planning and function 1 plânnlng~, with thenéw ingredient of coôrd~nated exe~iitlon. I am especially pleasEd ~to deteet'irt both bills ab obvtous r~lu~tanee to a d to the Droliferatlon ef speciahze4 Federal local prog~$ains and a atueng philosop y of returning to local goveruments, to the maxim~p~~. extent feasible, contr I over planning aUd~ exe~itioft of urban lmproveme~it projects. It Is * somewhat $mazing and hl~hly signlfiean±~tbat neithet~ of these bi s would add new t~a of Federal ai& to the son4~ ~ 140 existthg pragrarns f ass~sta~iee to vairie~~ façI1j~es and Ope1~atio1Ls of ~we~flments in urban cc inunities. The bliIsl call only for systhmattc plan4ln*g and ~e~utlor. The demonstratiob cities proposal is straightf4rwar~1 in its methodolog Federal grants of ~ petit nie ~ro~ftt~d for the ~eesS of planning a syste to maximize the s~dial services and t~ ~hyslcal 4ehabllitatton of a cointIet neighborhood c~ other 1~vge az~d 1ogie~ slum area ~ä: ~lty, under thea~ispIce of a single ageney~ unifyingin a corrective progr~n~ the people of ~ the are and the governmental agencies and pr1vat~ instl~ntiohs involved. ` Adminis- tration of a city's improvement program is' suppo~te4 by 80 perehut Federa grants for the administrative aspects, to be carried ~ntt by' a local instrumen I PAGENO="0345" DEMONSTRMflQN CITI $ ~ D UE1~AN DEVELOPMENT tality authorized to achtêve c~or ~ ~ d ~ e~ecutf~ This local agency will have assistance frtma a ~ed~ra1 o *~ nator concern~c1 with helping to co~ ~rd1nate any and all Yf t1~ese ~ appr ti~ te1~ 14O~M pr~gr~ms which might be involved In various aspe~ts ~ s ~ tt~ project~ azid activities. Finally, the bill provIdes st~pp1eme~a~ ~1era1~ ~ s, lii a~1IIML to ~ny presently author~ i~ed gr~iits, in the ai~i'ou~tit Of ~O pe ntt i~ tbe ~S~IItt1 reiulred local matching share. ~ ~ While lnan3r wo~ti1d t~ti~y, ati ait aps ~lghti$~ t1~t th~ most promising object of this bill Is to help ~nd I ~ ~ ~1~nit~theo~1y disadi~taged peoples and their slU*i e11%7frO1flfl~nt, I see 0 he ~vatttageS of the very greatest merit and ~irgency as well. ~ . ~ . First, this bill re~r~S~r~ts t~ie m ~ ~4 strimttc.~e ei~ori o~ the last 30 years to overcome the trend of fti~icti~mali 1 g d bureaucratiritig the urban programs and services at both the l~a~ and ~ e ederal levels ~f government. While the new system is s1mpl~-~om~rehe S ~ ~1a~ii~lng and coordinated administra- tion-It can effectively r~ve~se t b geon1n~ practice of specialized Federal bureaucracies ind~pemi~r~tly ~tdmi i t~ i~g Mtgmelits and bits an~I pieces of the total social servlc~s aM ~ttvlronm t~t~ prograih~ of urban areas. If there is oppôsit~oii th~ t1~é en ~ t or e~~utlcai of this bill, I venture to predict that It Will ~In~ prii~cip II *f~om tWoc~eneral grottpings. First, from those local boards, d~*a$me~its, c i~4 sioris, ~ an5 agencies of local government,. atid even private We11~arE~ a;n~:1 pro t ~ e1~riSes, which are cot~cerned primarily with tbe zealous pi~otêcti~n of the i~ ~V rOtgiit~ over. a. particular 1~rogram. Second, i~rom Fede~al l~ure~uicr éi s ~ hich h~v~ carved out a pi~ovince of nar- ~ row concern ~tnd ëontro~. ~hese ec~ ral'local bureaucratic relationships are characterized more o~te~ th~1i no y ~ e establishment. in the local go~rnment of some separate an~ lndep~nde th~ iotthi age~c~r.oriented v~t1caily to the Federal bureaucracy, rat~ier than ~ b~ democratically controlled general govern- meats of our urban ~Oi~~unities. ~ As I indicated 5arl~er, 1 `1x~lieve o e f the major merits of this bill is Its push toward.returning ~oi~t~Oi~ of ~eder U ~ sist~d pi'ograms and facilities io the local people and their .~o~er~iitner~th. t ~i ~è~rse the alarming. centralization of decisionmakitig in the F~der~l ag t~ ie wh4cb ln~ist that locallyaided programs be planned and carried on~ In cot anc~ ~rith their detailed specifications. Vnder this bill, ~e Will have a r s n thle local pl~ning ~nd decision process,. buttressed bv locally ei4loyéd an dmj m~ol1ed expert consultants in the numerous technologies so esseriUal to ~l~cis~ n~i~i ng~ The effort up to this time to b r~ ~ ucratize and centralize decisions in the' Federal aid system has bec~me ~i re singly obvious to virtually all State and local officials. It was tl~oro~ghly~c fl med in the recent report cii "Time Federal Aid System as seen b~ ~`ed~rai ~4 Q cIals~ publiShed by the Subcommittee on Intergoveth~eiata1 E~l~tioi~ of ~ e enate ComiMttee on Government Opera~ tions. The muniel~ai~o~flci~1s of~ ` ~ tate and tbi~ Nation commend the Urban Department for its~ill~mmgz~es~ t~ mit list planning, decisionmaking, and admin- istratiOn to the ~nu~1cij~tl l+vel ~ ~ l'nment wider clear-cut guidelines plainly' set forth as Ob~e~t1ves ~nd ~tan~á d~ n the demon~stration cities bill. Surely, in a dembcratIeall~r orga~i~ed lPedo~t ~y tern, we thust give as much attention and emphasis to mnaintaixmiu~ a ~oun4 s r ture of government whiéh can govern our people responsively ~s ~ve give t~ r~ sitory and narrow program objectives. I no'w wotild like~ to ~pet~k br~ y n the urban dOvelopment bill. It has am even more signifi~ktit a*d promi~ g ~i w ~ concept of Intergovernmental relations, both in metropolitap ~eas at tl~ oc 1 level and between our Federal and local governments~ Agaiii~, l~ b~tsic ~ n4 les envision a comprehensive, systematic' approach to the metro~mo1itan ~r a s a whole-its problems and lts needs- replacing the pre~e~mt p$gr~1Lm o'~ nt~ or functiOnal technique of administering narrow and se~aj~ate F~de~al ai~ ~ ~ rams in urban communities. And oi~ce again, &t ~ra~s wi~e y pert `established technologies; but applies them effectively tc~ tlm~/cOh~plexiti S ~ ~ metropolitan problems and governmental organization, ` ` ~ `I . The tried and teabe~ teclmniqi$ ~u~4' ized in this bill Is comprehenSive commu~ flity planr4fig, ~tith a~ompauyi~ ~u otlk'llal pianniag, which has been applied effectively in utban cl4ann~nitie~ or s much as from 30 to' 4~ years. The new trick is that a~ lne~nti~e 1~ oi~e~ tq apply such plaimning on a ~fietropolitanwide basis, and to `éi~~age~ aw~ rew*~ ~t coordinated implementation by the numer- ous governmental and~ p~vate 1 sti~ mentalities aftd Interests concerned with servicing and dev'eiop4ent of ~ ro~ litan communities. 339 I PAGENO="0346" 340 DEMO~STRA~PION cm~s ~wi UR~3AN DEVELOPMENT ~ ~The core of~l$s bill is the prev!~ion in~ seetio~t. II providing that grants ~ha11 be made only if ~Iie Secretary of the Urban Dej4rtment finds that the app4cant is follewing thréugh on metropolitan general j~ianning and pragrani. plaflning o~f particular facj1itie~ as to the 1o~ation and sc~iedu1uig of pubhe facility ~roj ecth and in adopting aixi properly ac~nnnistermg toning codes, subdivision re~ila tions, and similar land use and. dez~sity controls. Here is offered recognition of a problem which confronts virtually every urbi~n community, and partici4arly metropolitan areas with a multiplicity of goverii~mental jurisdictions. It i im- possible to locate and plan proper public faciliti~suntil various uses of la d in specific areas of the urban community are planu~d and then regulated to as ure .. ~ ~oaf1~rmance with the land use and public faci~lity programs. Pjiblic faclity planning iii gro~Vmg urban conununities must ~be projected in most eas s a minimum of 20 y~ars ahead, and programing of a~tual construction 5 to 10 y ars ahead. This p~,$ess ie totaljy irnpg~sible until aj~d unless the land-use plan ers have .determined,~ and the governii~ authorltie$ have controlled, the pla ned uses of land for i~esidential, commercial, industri~d, and other developments. At this point, Mr. Ohairmap, I would like to s~iggest an amendment to ti le I of H.R. 12946. We have suggested tO Secretary Weaver that a new prog m and an additional appropriation. be provided f~r loans to local agencies for feasibility studies for water, sewerage, and storpi drainage facilities to d ter- mine long-range, communitywide needs projecte4 for a minimum period o 20 years~ as required in the water-sewer p1anning~ guide recently issued by the Urban Department in compliance with the pr~visions of the 1965 Hou ing Act. These loa~ would be made by the Urban pepartmeut. for engineerin or feasibility stuclius by qualified professional engin4ers. ¶I~tiey would be repay ble within a speeifle~ jperiod such as ~ years and wo4ld go to utility agencies u der a metropolitanwl4e coordinated pIauniu~ project~j or in the absence of such to a metropolitan p~apnjug agency. . j There apparentlfr has been some thought in the ~D~partment that general p an- fling agencies might be entrusted with the detaiI~d functional planning in the water-sewer field. ~ Our belief is that an effective ~rog~am.requires a coordina ed planning of these expensive facilities by the responsible utility agencies in cooperation with the general planning agencies, as is provided now in ot er Federal legislation for highway facilities, recreational facilities, mass trans- portation systems,. etc. And, for this purpose, ~n. appropriation of from ~20 to $30 million should be provided which wou1~I finance desperately nee~ed long-range plans for from $2.5 to $~ billion of ~ater-Sewerage facilities. We must have functional planning of fa~jjities to backlup implementation of gene al planning. The urixin development IdU does ind~ed ~opose the only feasi le method of aceompljsbing the urgent need in metro~o1itan areas for metropolit n- wi~de general com1i~umty planning functional pla4nlng of various public fac Ii tieu, and coordinat4~d implementation of programs3onforni~ng withsuch gene al and functional plans Unfortunately~ our urban ~coanuiunities are fragmen ed into numerous sovereign local governziients and inifo numerous agencies in th se individual governments. These local instrumentabities are built into State c n- stitutions and laws, and into city charters, and they cannot 1e ` obliterated or merged. But they will respond.to a well-conceived opportunity for collective a d cooperative planning and action. In this bill the Urban Department, and the Presi~lent, again have rejected t e alternative of centralized Federal control and deci4ionmaking, and have dens d a system of techn~logiea and intergovernmental 4ooperation that conveys t e planning, decisions, and implementations to our 1o$~al ~ommunitles. We in Tennessee~.biave struggled with the proble~nsof urban government a d of planning and serving the needs o~ new urban ~rewth and development f r many, many years. ~ We amended the Tennessee c4nstitntion to . authorize cit - county eonsolidatio*, and our State legislature ena4ed a seri~ of laws facilit t- ing the creation of one u~ban government. for one u~rban community. One gre t crushing problem has been rapid urbai~ growth. Mire than a half million peop e in Tennessee flock into our cities every 10 year~, consuming open land a d requiring hundreds ~ of millions of dollars of municipal investment. Our clii s of all sizes have annexed ~nore than 45~,000 persona in the last decade and ha e placed another 200,000 suburbanites und~r a new metropolitan form of gove - ment in Nashville and Davidson County. Still, witji the spread of blight in t e old central cities, large and ~mall~ and `rapid urbai~I~aUon at the fringes, the e have been overwheUning problemS, pa~tlcnlarly fro4ri the vh~wpo1nt of financi 1 `resources. The sprawling of populatloli and busin es aver into gradually i - I PAGENO="0347" PAGENO="0348" 342 i~MtN~TflATiON ~c11~~ AND ~ ~ ~ ~1~~EtOPMENP Mr. BIN~TL&M. Mr. chairman, w~ `h~ 35 municipalities i the urban renewal program, and most all o.~ them, over three-fourt S of our &ntire State, in the poverty progra~. And they have the same deteriorated y~hysie~al environments i~i th~ir cities, and. disadvan aged and distressed people, that our larger ur~tn centers have And they have demons4rated their capabilities a4~inistrati~Jy and fr m a physical vie*~jpoint in earryizig out eon~$e~ pi~grams of this ~ ype. They not onl~y need them, bttt I tell y~,:inr that starn~pede to be a dernonstratiii~ city, .1 am pretty srn~e tI~$ you ~ ~c~iiI find quite few showing up hereas1~ing tobe~esignated. ~ . Mr. BAm~ii'r. It is your opinion that i~ will work as well in mall as in large cities? Mr. BINaii~M. Yes, if not betthr. Mr. BAmu~, Mr. Harvey ? Mr. ITARV]~T. Thank you, Mr. Chairma~i. I just ha~te~a eoupie of que~tionw aiwa~s, Mr. Biugham, alon the lines that I 4ed MayorDaIe~y~ : ~ 1 ~ ~ The i~1rst o~ is w1~ether you believe t~he~1~ederal coordmator sl~ould be appomted 14y the Prea~deitt from nomm~tious made by the local ties Do~ you think this would be )i~elpfui ? Wou~b~ it assure gettin the people who kiiow the local sitnati~ ? Mr. BINGH4M. As I conceive of it, he is the President's man and the Secretary of the Department's man, 1~o * see that there is a pr per understanding of these demonstratioi~ pro~eets and the responsibi ities of various Federal agencies. And I thinkthe should be the Presid nt's. man, and not the lóc~1 government's sp~øsman and representa lye. They have their representative. They hav~tb~mazyor and the he d of the Urban i~*ewal Agency. And they j*iiiI Mve the head of this. demonstratirni agency~ Th~ dornminritythas its, spokesman an . its representative* already. . But the Federai~Gavernment does not av& anyone in these cities trying to~See that th~eorn~plex Fed~eral pro ams and various ageiu~ies administer them is 1k~in~g helpful as possibi to carry out these complicated, coordinated pj~o~cts. Mr. HARVZT,. Let me just ask you this~ and then I will quit. By changing the formula f&r Federal participatien.in.th.ese demonstra ion cities projecth from the usual two4hirds, o~.thivd~ for urban rene ad,, let's say, to an average of ~O percent, i~ percent,. something a ong that line, you~ ~ecog~iize, of course, that ~o.u aren't really increa ing the amount of inon~y ~ available, . What yo~t ~re readly doing is cli ng~ lug the forn~ilä a.~ te~ the ~articipMaon m4kin~g these funds avail ble So you are not necessarily making more jim~ey ~vaiiable. Is ti ere adanger in ycn~r jcn~gment that we aregoiligto give SQ much prio ~ity to the demonstration city program that by this 90 percent-lU per ent formula we will neglect our regular urban renewal program, an it will suffer ? I gather that Mayor Daley h~s some apprehension a out that. ~ Mr. BINGHAM. It, of course, depends upç~n the volume of the den~on- . stration city ex~Lerprise as a whole aa to w~ethor it will have a dr~w- down effect by ~ehanneling the F6deral aM p~ograrn into those a~eas in preference~t4 others..' I just think this~something that~has t~ be d~ait with ~ administra1~ive 1ev4 t1o~ s4e thM~. we don't have s~ch an ndyerse and! somewhat unfair effect. I tI~k. ad.ministrativel~,r it can be done. You can right now-this s~me problem affects ev1 ry I PAGENO="0349" would be Bmonstrat eith. tee top grant-th in order~ DEMONSTRATION CITX~.S D URBAN DEVELO?MEW2 343 I.. cost in r. Biir~ham PAGENO="0350" 344 DEMONSTRATION CITIES AND URBAN DEVELOPMENT ~: sewer requirements to serve the urban growth and existing demand over a period of 20 to 30 years. Mr. AsHLEY. ~Te will see if we cann&t get a response. Now, I was much taken with your characterization of this program as one which simply insists upon coordination, and it offers a carrot of Federal funds to those communities t~iat manage to pull themselves together and pre~nt the coordinated p'an project. You ask, why should not there be pa4icipation by all in the demon- stration citit~s program. But then it ~eemed to me that you raise some doubts in your own mind as to Mw many cities could ~ctu~lly participate with the limited funding thkt is contemplated. I quite agree, if I understood correctly the sense of your idea, that as a matter of fact there should be coordination by any city calling upon Federal funds and Federal programs to help upgrade the local community, and that this need not necessarily be dependent upon the added input of Federal funds. Mr. BINGmU~t. True. ~ Mr Asnr,i~rr Where there is a very 4ritical need, such as in our laiger cities, where the need has been dia4natized by violence and out breaks of e*ry imaginable kind, it woul4 ~ppear that the infusion of Federil funds is justified Perhaps you have heard my suggestion that I put to Mayc~r Daley with respect to utilizing the means of measure- ment that ~ have developed and that there be a sliding scale of par~ ticipation depending upon demonstrated needs in the particular proj- ect. WTliat would be your comment on this? Mr. BINOHAM. Well, from a practical kdewpoint I am afraid that i: could not fully endorse it. I am very s~thpathetic to the problems which these areas have. And they need s~ecial attention by everyone who has the e~Lpabi1ities of making a coi4ribution. But other areas have the same problem to a degree. Mr. AsH~ifr.~ To a degree? Mr. BTNOTIAM. To a degree. Now, some situations have had na- tional publicity, and others have not. You know how the press cover- age is. They can build things up and give them international and national publicity. And this has happehed. And we have these problems everywhere in our ui'ban centem~s. We have poverty, we have blinding poverty, and we have slunjs. And these people are restless, and they are hurting. ~ . Mr. AsHn~r. But there are degrees, aren'f~ there, of the kind pf pres- smires we ~a;iâi~i~ng about ? An~l th~re are ~tlso degrees in the a~bility of cities Or con&iunities to meet tTiemselv4s, through their own re- sources, some of these problems. Isn't it a ~good idea for tiier~ to be this kind of consideration taken of these fa~tors ? In other words, if we are really interested in a demoi~stration program, would not it be possible to have areas of demonstration t~iat perhaps are not in- c]uded in the bill as it has been presented to us? If you take a wealthy community such as Houston, Tex., would not it be possible to glean from experience under the program what can~appen by insisting upon coordination, offering a smaller carrot, ba~e41 upon their lesser social pressures and their greater ability to meet ~ör themselves this prob- lem, and then in ~ situation like New York, Iwhere the city is almost catastrophically in debt already, and where th~ need is so much greater than, let us say, ma city such as Houston. PAGENO="0351" ~yto f merit. And it ~s of every kind DEMONSTRATION CITIES I I' PAGENO="0352" 346 DEMONSTRATION CITIES AND URBAN DEVELOPMENT intricate, b~it not in another dimensio4, but just a little more of the same. I think that what we need mo~t of all is a Federal expediter down there. And I think it would be h~lpful. If he wer4 to try to be a czar, I think~ou wouid lose a few of them. You know, they just would not hardly~ever get back to Washington. He is going to be right `out in the publid eye trying to help the people responsible l~ally to get this project darned out with these various Federal programs. And I will tell you what, he is going to be the least of a czar. He is not in anybody's woodwork, he is right out in public. And I will tell you, some of them are going to get to the White House with their problems direct. They are going to see the President and say; "Mr. Pr~i'dent, I am ~dlling you, one of these agen- cies up here i~ not helping us." Mr. STEPHItNS. Thank you. Mr. BAEREI~T. The time of the gentlema~i has expired. Mr. St Gerihain ? Mr. S~ QER]SIAI-N. Mr. Bingham, how ~ are you people doing with your water supply? Mr. BINOHAM. It is generally good. We have areas which have difficult water supply problems, but we have three of the grewt r'vers of the country, and we have more water supply in Tennessee than p ob- aNy any other State in the Union except the State of Oregon. Mr. ST GERNAIN. Do you believe that a~n adequate water suppi is important enoi~gh to be considered in th4se ai'eas where we are &x- periencing problems with water supply. ~o you think this is ser ous enough, and do&t you feel it is an i.mtegra1~ part of the functionin of the city to have the water, and therefore w~ouhI this not be one of the facets that should be consid~r~d under this Demonstration Ci ies Act? Mr. BINGHAM. Well, I am not sure that ithat is a problem that d- dresses itself to a demonstration ~rojeet. Now, here we want to sta - I hope we are on a systematic basis. The water supply addresses its if to the entire urba~n community, including~ any suburbs, and so n. It is a regiom%i ~problem in many cases. An~ it ought to be dealt w~th as a part of the ~wat~ supply pIobl~ of t~ie area, and not rehabi i- tating a slum a$a and its people. But und~r the urban developme t bi]l, under the other bill, means are afförd~ ~to get * a coordinated a - proach to all m~ropolitan regional prob1em~, including water suppl and sewer disposal and transportation. And `this, of course, is high ~ important. Mr. ST GERMAIN. I thought I understooti you clearly when yo testified-you mentioned dropping the nain~~ of certain cities in jar. * I know that was figurative. But what~would you think of thi plan. We are talking here about the a~ims ~f a demonstration citie program, the models, about how these probl4ns can be solved. Sup posing the ~ecrethry of the Department woul~l determine which citie have `t:he critical ijeeds and say that these arj eligible, they are eligi ble cities to be conI~idered as d~monstration oiiies, and that the Secre tary would say to all of these cities, submit a plan for your overal city, or for a portion of yoiir city. And sup$sing the Secretary then did, so to speak, reach into a jar from those ~ligible cities, and then say these are the successful ones. Now, we a~e going to provide you with. the expert advice, we are going to take th~best planners; the. best PAGENO="0353" 347 I' *pE~ON~TR~T~LON ~C~TI,$S: A ~ ~ R]~AN DEVELQJ~ENT w~ban r~t~ewa~: ex~p~ts th$ ~e ~IT~ ~ .~ ~ Mai~y ~t.;t~se hearings have demonstrated their ability j~o i~a~k ` l's a t~am th~t ~wi1l: go into these demonstration cities, wQrk4ng~ wit ~ h~ p~c~ple rn these cities, who are more familiar with th~ s~ec4~o p b~ ~ ~ s, ~d s~y~ iiow, this is the manner in which we ar~ mg to p ~ az~ the pla~i for execution, so that we would then rea1i~ h~ ~ ~ ~ oi~stration cif~y, a rriodei city, sotospeak, asto how dUs coui4 b 0 e. What w~i~d youropmion be on that concept ? ~ ~ ~ ~ ~ ~ ~ . ~ ~ ~ ~ Mr. BINGHAM. Well, I t~iin1~ th t i~ wondér~ul concept. And I do thi~nk ~ii the `demqt~a~ior~ ~ ~i i~ ~ ro~1?~th th~t we . i~eed; some departmental backup ~or~helooa1~ ~ t~ a~1 ~laa~u4~g, and so on. And we have interchange óf'it~fôrii1~t'ô ~t~ei~ the ~t~tionstration cities in tl~irp1an~nipg a~ic1~ e4~ut~i~qn, ; ~ A ~ ~rau~ure~that the ~epartinent will fiUfUl ~ ~ ! .~ ~ ~ :~ ~ ~ ~ ~ ~ ~ *~ ~ ~ ~ `~ ~ ~ ~ Mr. ST GERMAIN. ft ~ s$n~s to e and ~ t~àér~Eain~y firniIy1~éU~ve after listening tote~ti~op~y, før a ~ . now~-r-tliat ~i1this is going to be suc~essf~l, that w~ should notju~ th ach~nce ~jphazardly that cer- ta~i cjtie~ are going to ~rne up ~ I l~ oodplai~s. We should prov~ these cities with the best ~la~ th~. s vaih~ble,3th'e best o~ie at our ~ posal, and let them help those c~t'e~ repa~ th~jr plans and execute them. : ~.. H ~ ~ I ~ :t have nothing ~urther~ Mit. ChM n. Mr, BTN~A~.I thii~iktha~t is ~ ~ t idea ~[r. `djiairman. M~. ~B~RRE~p~. M~ ~3i gb~im, ,~ ~ ~ rt~i~iiy appreciate your coming Jaer~andgi~ing us this c ~si~iac~v ,t stii~ion~r. Thank you very much. Mr., ~ ~t1~ii y~u, . ]\~~ , hairmar~. ~ It has been a great privilege. : Mi~'. BAm~r'r. Weha ~ oii~ e~ w~t~aess,Mr. Elmer George. Mr. Elmer GeQrge~ wi~yó~ ço~i ~[ r~~d ? ~ ~ ~ Elmer George is ~the ~ ex~e~~i~e ~l ector of the Georgia Municipal Assooiation,.auahe~s a~ver~y g$ i~ ~4 ~ our yery capable m~rnbei~, BQb Stephens of Geo~gi~. ~ . I ~ ~ . . Aiidi ~ quite ~ M~,. ~ ~tl~at ~ôb would want to make a welcOming~atem~~ onIyoi~ b~i 1~f~ Mr. StepI~ens ? ~ ~tr~! STEP~1JDNS. ~ ~ha~i~ia~ t ank you~ ~ extending that cou~ tesytor~'and ~r~t~g me ~ qp e Mr. 1~im~ George to the hea~ ing~ ~md to say ~h~t: ~4 arb l~ y, o hate hb~ ~ackb~forB our corn- mittee. ~ He has no~.qn1~i~eu; fo e the Ftousixi~ Subcommittee, but he has ~so te~ti1~e~be4Qre. onr * o~ 13ank~ng and Currency Commit~ tee. ~ ~ parpula~i~ rn~x~ a sistance tha1~ he gave this commit- ~ thè~ ~ ~i latiort that we considered a couple of years ago. ~ I ~vould also l~k~o i~q~i~ ou 0 ~ ou tl~ia~ ElmE~r George has held the positior~ as executii~e d~reç~por o J~ Gepi~iá MunicipalAssociation for a long ~ Anayoi~ doii't *~ ci hat kind of job a long time unless you ha~e been doja~a ~b~4jObr Tl~e thing tha~X, ~ ii ~ tó ~çdnt out~ to the members of the oo~n~uttee ~s tba~t i~ ~l~e~wor ~ 1~ Mr.. Geor~ge has done he has~ not favored the Ja~gemi~ii~ci~a1 ~ a ~ ~ over the small municipal areas. tteha~ ~t~t let~hirnse~.f l~e c ~ diwto a corr~er, representing jti~t one segment of mutiic~tpai pr e~i iii Georgia. But I think that the mayors o;f the varioi~s t9wns i ~ eorgia feel like that any problem I F 60-878-66- PAGENO="0354" 348 DEMONSTRATION CITIES ANJ~ URBAN DEVELOPMENT that they~ have, no matter what the ~ize of it, they will find a ready helper in 1~1mer George and his staff. So I am happy to welcome him again before our committee. Mr. BAuiu!~rr. Thank you, Mr. Stephens. And Mr. George, we certainly are glad to have you here today. I understand you have a very complete statement, but you have about seven pages that you desire to nead, and the other part you are interested in putting in the record ? STATEMEI~T OP W. * ELMER OEOB~*E, EX1~CUTIVE DIRECTOR, GEOB~fIA MUNiOIPA]~ AS$OOIATION Mr. GEof~aE. Mr. Chairman, that is~true. And I recognize that it is getting close to lunch time. And ~e will follow whatever sugges- tion you might offer. Mr. BARRETT. We certainly want to: exthnd every courtesy to you. So if you desire to put part of it in the record and read your first seven pages, you may do so. We will ~yant to ask you a few questions and I am quite sure they ~illbe short. Mr. GEon~iE. Thank you. I can as$re you that all this won't be read. It is mostly attachments for co~sideration by the committee, as you might want to do so. Mr. BARRETT. Do you desire to put thaU~ part in the record? Mr. GEORGE. I would like to put thai first part in the record, and the attachments. And when I get to them I will suggest that those be put into the record, unless there is some questions on them, we will just file them. Mr. BARRETT. Without objection it is s~ ordered. You may co tinue. Mr. GEORGE. Mr. Chairman and gentl~en of the committee, want to express my position and those of the n~unicipalities.'that I rep esent for the privilege of appearing before ~u. We do think that his is an important~matter, arid one that deserv~s considerable consider tion. We do kno'~ that there are a lot of p~blems and a lot of * r erva- tions about this type of legislation, becau~e it is unique. But we hink it deserves the most serious consideratioi~. And what we woul like to do in this statement, with the indulgehce of the committee, r ther than touch upon a lot of details in the act itself, and a lot of d tails in relation to some of the spe~ifio project~ at the local level, I ould like to touch just briefly on some of tb4 causes that we think ave been responsible, or for this matter, on urb~n blight, or urban pro lems that get so monumental to a point wher~ I think they have rea hed the proportion of being a national crisis. ~* With that ii~i mind, if it is p~rmissible 1~ó proceed along those 1 nes, I would like to say that I nOt only repre~ent the Georgia Muni ipal Association, b*t I am appearing here as ~t representative of the Na- tional League of Cities. I guess I am the ranking member of the resolutions committee of the National League of Cities, and I am currently the secretary of the community facilities committee of hat national organization. So I have worked in these areas of ur an problems with many city officials over the country for a numbe of years. Second to our national defense and our i~iternational commitme ts, the plight of our cities presents our large~t national problem. he PAGENO="0355" I~EMONSTRA~ I I. 1~ our gove: cases, locai in i~eti ~ns' ~sense that PAGENO="0356" 350 ]YEMONSTRATION CITIES AND * URBAN DEVELOPMEN sistence, it is big business, involving large acreage, large mv stmeiits, afl(l coiisiderable Federal assistaiice. 5. Better educational processes, coi~imunication media, tra sporta- tioii, and other factors have created a~rareness~ ambition, em loyment capabi1ity~ and a dethre for a better ~iidard of living in t e mii~ds and hearts of millions of poverty-stri~ken people. If they' ere not already li~ing in cities, certainly, mos1~ of them have come to w~. 43. The flbw of rural population to o~r cities. This is anothe factor, which is the result of all these things~ I have mentipned. T ere are millions of rural youth who are well educated and well qualtied for new job opportunities in business and industry and the pro essions. And, Mr. Chairman and gentlemen, I would like to submit t at it is these people, the best qualified people ~that don't need any he p, that as they come to town they do bring th4 problems of goveriune t with t1ie~in, problems which relate to the dem~nd `for services. As th y come to town, however, they bring demands f~r public services and i prove- ments with them. They begin raising f~ntilies which add to ou risiiig educational costs. Generally, their l~al tax contributions all far short of their public demands. The really tragic part of this population flow, however, is in the unechicateci, unskilled, and, in most cases, unwanted farm 1aI)or r who has had his farm job or employment o~portunity eliminated nd he comes to the city looking for a job-or for hell) in some f shion. Often, he and Ins family live with re1~tives or friends in cr wded, unsanitary, depressing, and unproductive slum conditions. Quite frequently they become wards of the cilly, State and Federal 0 vern- ments, contr~ibuting to our welfare ro1~s, juvenile de~inquenc , and crime rate. . Gentlemen, coupled with our urban ~opulation explosion, a ready existing pockets of poverty, demands fdr new and improved se ~vices and natural growth problems, the migration of these millions of rural people to town, from city to city, or from region to region has c eated a monumental problem, a problem which must I)e shared by all re pon- Sil)le citizens and all responsible public servants, including your corn- mittee and the entire Congress of the TTn~ted States. Most of us do not realize the inagnitu~e of the problem whic i can be reduced simply to tremendous deman4s and needs for city se vices and inadequwte fiscal resources. It must be ~ pointed out that our Fed$ral and State Govern ents ]iave preempted Georgia municipalities ~from all major tax so ices except the ad valorem property tax. Sin~e this is the chief sour e of revenue for county governments and ]ocail Support for education, the urban taxpayer in our State is already overburdened. Gentlemen, we are doing our best in Georgia. We are attem 1 ing to meet our problems head on, usiiig our~ own ingenmty, efforts, arid resources where possible. We are proud ~f the progress we. are i ak- ing ; however, our problems and c1iallen~es are multiplying f ster than our cities can cope with them. Mayor Ivan Alien, of Atlanta, proud1~r reports that there is less ~uiiempioyment; in his city than in any maj~r city iii the country. We are proud of our excellent race relations 4nd the citizens of AlL nta work together as one people in our comixtunity. Yet, there exis s a tragic degree of poverty, inadequate servi~es and improvements, ub- PAGENO="0357" DEMONSTRATION c~ITI~S ~N ~ REAN DEVELOPMENT 351 ~ standard housing, ai~d biig~ate~ ar~ . ~ ~ his is true~ to a relative exter~t in other Georgia cities, A~nd our k~i i~ , regardless of size, need help, Mr. Chairman' and ~entlemeu, be ~ ~ s~ if you look into this ~natt.er, ~s we havedone, you will ~ind tha e roblem extends from one side . of the Nation to ~ the oth~r; and i ~ tends from our largest cities down to our smaller m~niéip~litie . In January . 1963, I h~d ~he priv ~ ~4 of appearing before the Senate Committeeon Bankthg ~*d Curr ~ c~y ~n b~half of Senate bill 1, the Area Redevelopitient Act~ ~nd ~i k I was OAC of the, people who . did appear in support of*his par j th r program. My purpose in my appearance was inth~ h~e that t ~ tion relating to the rural-small urban areas, section B, xr4gh~ res 1 1 better job opportunities at the rural level and a conseqi~ent sb I ~ own o~ the mass migration of our rural people, either th Geor c~ ies or regions outside the State. And I would like to subn~it,gent ~ , that a lot of the problems that you have in the northern cities a t ~ western cities or cities all over the country are part o~ tl~is i~rob ~ t at we have h~td. And you have shared those problems with t~s. d hat we wotild like to~ do is keep thesepeopleathome. . I ~ At thetirnethe Area I~develo e t Act was enacted into law, there were 76 Georgia cOuntie~ w~io q ~fi d because of the depressed area criteria. Much of th~ c~ite~ia ~ b sed upon loss of jobs and reduc-~ tion inpo~ulation. I ~ ~ Gentlemen, I would l~kê ~o s ~ I to you that we have since found. . out what we should~hav~ k±~wn 1 t e time-4hat rural migration and ~ reduction in employmei~t is not ~ d to depression-simply, it is the result of agricultural p~ogi~ess ~ji i the deliber~ite intent of ou~ large farmers and pine tree gfr~ers ~ ~ orgia. Not only has employment been reduced, tenant ~iiOu~es * d mall far~u buildings have been : destrOyed to reduce ta~es~ * * u h of the acreage has been turned. ~ in as wild land for t~ ptirposes. . . . . All of this has tendeá to low ~ th county tax~digest, thereby redu~- ingthe capability ofth ri*al 1 1 overnments to provide capital im- provements, services, nd edu a ió , thereby reducing the economic development of ourn~ir 1 a~eas. It is my c&nsidered pinion ~ t uch of our well intended help for our rural areas ~ in fly g in t ~ f ce of contrary intent on the part of many of our large 1~ downe ~ ii~ eorgia. . ~ I am not saying that ag~icul ~i ~ti help should ber~duced. if it is in the national interest, i~.ul aV r additional help. However, our cities need an hoiièst e~ a1~mtio o~f heir ~roblems, also. And I would like to say-I will s~*m~ri~e ~ is ~ fast a~ I can, Mr. Chairman-in Georgia, the city of At~an~a is t ~ ly attracting people from the rural areas in Georgia, btitall over .t e ntire Southeast. Atlanta~~ because . . of the excellent climat~e, race ~ ati ns, and our sympathetic treatment of problems that are b~o~tght ~ b~t other areas, h~s caused many people from other sections o~f n~t o ~ t e State of Georgia, in the southern region, but all over th~ U~iite ta es to come to Atlanta. And they are bringing problems w~th the * ~4 d if Atlanta is going to cope with the opportunity of i~p~adi g~ th stai~idard of living, the excellence of service wifhiz~ the~ city an w~ hin the metropolitan area, they are going to hav~ to hate help. ~ aus~ if yon will examine the fiscal report~ of the eit~y of At~1ant , an check the capabilities of their local PAGENO="0358" 352 DEMONSTRATION CITIES AN~ ~URBAN DEVELOPMEN revonueór[d comparethem with the ~Hous public needs that xist now and which will mount in the future~ it is very evident tha a crash . program ~S indicated to help the citylof Atlanta. And we t ink that thisprog~i»=n that this Committee hasiwider consideration is o e which would ~ ~ar in helping solve the prob]~ein. We would like to submit that in Oeorgia we have other c ties that we have compared, and as part of the testimony that we are present- ing, we have taken a sampling of cities in every congressiona district in Georgia, and have attached it. N4w, this was done very quickly. And it does not represent the entire ~picture. But in every case we have foun~i that cities in Georgia, re~rdless ~f size, from ,000 on up that we~ did check, have blighted ai$s. They have the pr blem of substandai~l housing. They have thej problem of substanda d serv- ices. And they have the problem of jrying to find ~ ways an means of raising the living standard and th~ economic opportunity evel at the communities. And I would like to make one or tWo observations, Mr. Oh irman, before I close. And I am about to close. One is in relation to title II of the proposed act. Now, I am not certain in my own i~iind that the creation f new cities or new communities is the answerjto this problem. I wo ld like to submit t~iat before that jarticular tart of this program i given consideratiozi that we look very clos4y and. very cautidusly at the critical needs that exist in the already ~eveioped municipalitie , with the idea of building these b~tter, and to~help them solve the pr blems that exist in the deficiencies areas before we go out and start b ilding new cities. Now, in Georgia we have got 400 citie~. And I would like to ubmit that you, that we think we could answ~r this problem that th~s new city program would turn on if we cou1~d help build better me mm- sized cities and small cities that are sc~ttered all over the St te of Georgia. Le~'smakethose existing alrea}dy bemade functional. And .if we do th~ti, then I think it would red4ice the need of conside tion of these new 4üties. ~ I would like to submit, too, that as are*0 develop outside the ~ unic- ipality, the central city, if there is available land there is su cient development capital availabh~ to develop those areas. I have ever seen any serious problem in the developn~ent of areas outside th city limits if' there was a public need, because there has always been c pital available for that purpose. And I wouNt like to suggest to the om- mittee that you go very cautiously into tb~t part'of the program. There are 18,000 ` municipalities in this country. And ther are better than 2~OO counties, pins the multitude of metropolitan a eas. And I woulti like to submit that if we $a,rt creating more poli ical entities, polith~ai subdivisions, we might b~ compounding the pro 1cm rather than satisfying the probkm. And ~e do think that there is s me merit in the consideration of that. And I would like to submit to you, Mr. Chairman, and gentle en, that it seems to me, based on what Mr. Bi~righam has' said in rela ion to these multitude of plans-I have broug~it along with me a ma ual on "Federal Aid for Municipalities" which I would like to file ith the committee. Audi would like to subm t to' you and the' gentle en of the cominitthe th~t we are doing at the local area everything t at we can to educate our people on how to us' the existing programs. PAGENO="0359" DEMONSTI~ATION C~TI~S A EBAN DEVELOPMENT 353 PAGENO="0360" 3M~ ]~EMONSThATrON ttflES AN t~RBAN PE~LOPMEN Now, the reason I say this is that it~hoüTd be very obviöus\to a lot of people, if we k~k into these things~ that some cOrnmunitie~ make a greater effort toward a solution of tI~eir own problems thar~ others. Some communities do i~ot ~ealisticall attempt to raise revei~ues out of local resoutr,es which are capable ~ f doing a better job. ~Aiid we think that before Congress makes ava a~bh~ mo~ys to these cO~mmuni ties that tI~iey should make some eff6 theitiselves. I would\ 1ik~ to submit tha~t this program under con ideration by this comn~ittee is i~eded,. sE~ious1y needed, ~ of t ~ proportions of the p~ob1ems that a1read~r exist.. Butat the same ti ~iit ~~ould~ be our hope\that as the program is administered, serious c ~`teria would be develop~d that would assure that the community woul do as much as it coul out of its own resources without ~~,bsolute dependence upon the ederal Government. If there are any questions, Mr. Chairman, i would be glad t try to ~iswerthern. ~ . ~ ~ (The coil4iéte statement ~nd attachi~4~xits submitted by Mr. eorge follow:) ~ ~ I~ ~ ~ STATEMENT ~ W. ELMER GEORGE, ExF~cnrri4E ai~x~~roi~, .~ GEORGIA Mu ICIPAL Associ4pro~sj, ME~~CBER OF THE REsoLuPIo~s OoM~iITTEE AND SECREP RY OF THE OOMMVNITY FACILITIES ~ OOMMITTE~ j OF THE NATIONAL LEA UE OF OITIES Mr. Chairman and members oi~ the committ~e, my name is W. Elmer eorge. I am executive director of the Georgia Munici~J Association, an organiza ion of over 375 GeorgIa munici~a1ities, ranging in Siz~from the city OtAtlanta to towns having a population of 200. . I am honored and pleased to appear before ~au on behalf of our State rgani- zation and, also, the National Le*~gue of OtUE~, an organization of over 13,500 member lnun~eipa1ities. At present, I serve on~t~e resolutions conilnittee nd as secretary of t~i~ communit~r facll*ties committ~ et this national organi ation . Second f~ ~ national defense ~nd our intei~tiona1 commitments, the light of our cities ~esents our lar~e~t national ~4~obiem. The Nation's eco omic health and the general welfare of our people ~epend upon the intelligen and urgent treatment of the ills and d~eiencies of ~ur cities. For many years the problems of cities were ~wept under the rug or. sbr gged aside for the sake of political expediency. O~r agricultural and other rural programs received priority while our urban are~s were exploited as a sou ce of revenue, with little attention being given to ouri$~gent cries for help. State governments have contributed to our d~lern*x~a due to their rural true- ture and indlffei~ence to city problems. In mos4 cases, local revenues have been restricted and t~ie State has been negligent in )~tnrning ~ reasonable aha e of taxes collected from urban citizeas, either in ser4~ies er grants. During the 1~1; .20 years, the pt'ublems of ~4ergia cities have multipli so rapidly that the~r have long since reached ci~I~i4 proportions. There are any reasons for this, .iincluding the following: 1. The success! in our agrleülturái programs iwbich have resulted in hi her production yields~ with less acreage and reduced i~rm labor. 2. The success of the Herty process for conve~tin~g slash pine into paper ulp, resulting in the conversion of millions of acres~of row crop agricultural 1 nds into pine tree farming. ~ . 8. Improved processing of agricultural food pr~xiucts, transportation, stor ge, marketing techniques, and, finally~ the mechanic~r household refrigerator ave resulted In relievbag the individual ~ltizen and fa4nily from personal depend ney upon the soil. 4. General agricultural efficiency ~nd profieiei4~y arid the resultant corn eti- tion has all but e1i~nlnated the small farmer, the sl~trecropper, the tenant far er, and mass farm labor from the paged of sduthern~dstory. Poda3r farming is ot merely a means ~f existence or aubsistence, it 14. big busi~es~, `involving la ge acreage, large investments, and considerable Fede~al assistance. 5. Better educational processes, Oommunicatiob media, transportation, nd other factors haire created awareness, ambition, ~mployment capability, an a I PAGENO="0361" DEMONSTRATION CITIES ~ D URBAN DEVELOPMENT 355 ~ ~ desire for a better standard/ of ~ivin ~ n t e minds and hearts of millions, of poverty stricken pe~p1e. I~ t1~iey ~vere t al e~td~ thrlng th cities, certainly, most of them hav~ con~te to town, I ~ ~ ~ `6. The ño~4~ of rural j~opul~Ion tø o ~ ~ it~ s. There are millions of rural youth ~ who are well ed~catedu*d~r~1I tji~va1lfi 41 ~ new job opportunities in business and ix~dustry and the t~rof~ion~. , ~&s th ~ ~d e to town, however, they bring de- mands for public s~rvice~ ~d Pn~r v m ts with them. They begin raising famili~ whIch add to our . risin~ ed ~ ti4~ al costs. Ge~ieral1y, their local tax contributions fall far ~hoi!to~ their Pu 1 c d. mands. The reali~ tr~g1e ~ai~t b~f ~h~is ~c~pn ~ 1~ flow, however, is in the uneducated, uu~killed, ahd~ itt *mos~ ca, ~Thwa `t ci a~rn laborer who has had his farm job or employment oppo~t~u4it~ elimi te and he cc~nie~ to the city looking for a job-~--or for help. In só1l~ ~tsh~On. f ~ he ~n'd bi~ ~ami1y live with relatives or friende In crowded; uns~t~ltài~y, de r ~si g, and unp±odiletive slum condltions~ Quite frequently they becon~. w~rds f t1~ city, state and Federal gOvernments, contributing to. our welfare i~ol~s~ juv ~ ~ ellnqu~ncy, sud crime rate~ Gentlemen, coupled with~ Oufr ur a piil~tlon explonlon, already existing pockets of poverty, deman4~ fe~ ne ~ ~ mproved. ser~rices and natural growth problems, the migraflon oflthese mi 11 t1~ of rnral people to town, from city to city, or from region to re~ion has ~ eat d a monumental problem, a problem which must be shared by ~tll ~r~pon i l~ lti~ens and `all rO~ponsible public ser- vants, including your con~4iltt~e an h* entire Ooii~i~ess of the United States. Most of u~ do' not realiz~ t~hë mag i t~4 of the problem which can be reduced simply to tremendous dem~nds and e~ for city~ ~ervlce~ and inadequate fiscal resources. S S `It must be pointed~Ottt tit t o~u, re e ~ nd~ state ~vethtnents have preempted S Georgia muni~1$lfttès fre al~ inaj ~ t~ s~i*c~es ete~t the ad valorem property tax. Since this is the ehi f s~urce f i~ enué ~for~Oilnfiy governments and local support for educ~t~th, th~ urb~n ta ~ a~r~ In our State f~ already overburdened. Gentlemen, we are cloin óu~ bes ~ E~ orgia. We are attempting to meet otLr problems head on, using o r o~vZi in e ~ y, ~oi~ts~ and resources where possible. We are proud of the prog ess we 1~4 king ; however, our problems and chal- lenges are multiplying t~s ~z' tb~n ~ 1 ~ ttes can eop~ with them. Mayor Ivan Allen, ~fA lan~a, pr d~ r~pths that there is less unemployment in his city than In anyma or 4~ity I e ourifry. ~ ~ are proud of our excellent race relations and the ci ize~is of ~& l~ ta work together as one people in our community. Yet, there e ist~ ~i tr ~ c 4 tree of poverty, inadequate services and improvements, spbstanda d h~sin ndF `lighted areas. This is true to' a relative ~xtent in other Qeorgla e ties. 0 * ci~ s need i~e1p. S In January 1963, I bad the privi e 0 appearing before the Senate Committee on,J3anking and Ourrene oil beh 1 o~ Sepate bill 1, the Area Redevelopment AOt. My purposein my pp~aran e ~ In the hope that the section relating to the rural-small urbait ar as-4-sect ó 13 ~ might result in better job opportunities at the rural level and a ~on~eque t sl~ ing down of the mass migration of our rural people, either to G4org~a cit ~ O~ regions outside the State. At the time the Area ]~edevelo n~ Act was enacted into law, there were 76 Georgia counties who qu~ilifled be u$ of the depressed area criteria. Much of the criteria was based i~pon loss f jo s and reduction in population. Gentlemen, ~I would lil~e to sub ft to on that we have since found out what we should have known all t~ie tim ~ at ural migration and reduction in employ- ment is not relatec~ to de~re~sion s r~i' ly, it is the result of agricultural progress and is the deltherat~intE~nt df ~nr ~ r~e farmers and pine tree growers in `Georgia. Not only has ernplo~u~ei~t b~en ~ ~ q~ , tenant houses and small farm buildings have been destroyed to i~èduee ta 0 . uch of the acreage has been turned in as wild i~iud for tax purp~se~. All of this has tonde4 t* l~w t~ county tax digest, thereby reducing the capability of the rural ~oca~ gov m ts `to provide capital improvements, serv- ices, and education, thereI~y .rc ~ ~ the economic development of our rural areas. ~ It is my considered q~~i~Qn t a in ch of our well-Intended help for ou~ areas is flying In the f~tee of co g~ intent on the part of many of our landowners In ~eorgia/~ I I am not saying th~it a~rlcu ~: r~ help shou~U be reduced, If it is in the national interest, I. w4~u1d favo c~ct tional help. However, our cities need an honest evaluation of t1~eir prob ~ s, also. PAGENO="0362" 356 DEMONSTRATION CITIES A~D TURBAN DEVELOPMENT Our small towns and cities need h~1p ~tt4the Georgia Municipal As ociation has been a party to encouraging Federal *nd State programs to as ist city officials in the provision of improvements. an4.services. ~ ~ We hope this w ii result in a higher r~te of local employment and ]~eetour peopleand economicr sources scattered tlir4ughout the State in a progressi~eseuse. `We have helped rganize 17 area plarn~ing and development commissi4ns in order to cox~centrat~ profes- sional know-1~ow and programs, and make th~i available to our rural to~vns and counties. We are making real progress, but ~people are still coming to ~tlanta and our other large and medium cities, bringbgj~roblems with them, Atlanta is attracting people, not only fron~ other areas of Georgia b~it from other sections of the South, as well. Appa~ently, many see Atlanta nd its sympathetic attitude and concern, as a plac~ where their hopes and a bitions may find fruition. We are proud of this, anti we think we are doing a pretty good job, but Atlanta can't go it alone, nor can ~ur other cities.* We see in the city demonstration progra4is' ` an opportunity to cone ntrate Federal assist~tnce and the resoi~rces and energies of our cities toward crash program, calculated to alleviate, pr reduce, u4ban blight and h~lp many of our poverty-stric1u~n people by placing them in a b~tter environment with bet er job opportunities. ~ We believe that a substantial investment in ~he city demonstration gra t pro~ gram will inevttably result in a general upliftibg. of our people, better jo capa- bilities, reduced dependency upon public welfakre, reduced crime and a h ppier, healthier, and more productive country. Gentlemen, I am not smart enough to suggest all the development and dmin~ Istration of the Demonstration Cities Act, howe~ver, we would like to make a few pertinent observations. In the selection of ci~les for demonstration gra ts, . it might be prudent to evaluate all factors relating to the need and potential esult of the program. Not only ~ should the criteijia of competition, prepla ning, excellence of existing programs, etc., but also ~hat of circumstance, nehd and the progressive ~nfiuence of the results should 1~e given consideration. Also, cities o1~her than our very largest sho44 be given consideration, since they have the * same problems relatively spoakin~. In Georgia, `other cities such as Savannah, Columbus, Macon, anti Augusta ~i4~e similar problems as do any other cities suck as Marietta, Roiflo, Gainesville, i3runswick, Bainbridge. I'm sui~e this is true over the Nation4 We have taken the liberty of attaching a state~nent from the city of Atlan a in support of the ëlty demonstration programs. Also, examples of fiscal prob ems from a few other Georgia cities. Naturally, it gOes without saying that we ope our own cities get the ~ first and the biggest grants-because we need hem desperately. * Thank you, gentlemen, for permitting me th~ privilege of appearing be ore this distinguished committee. _______ ~ . A SAMPLE O1P~ ~ OF Guoiumi Oxuins rex Dg4oNsTaATIoN Orrins PnoGRA The basic reve~nue structure of local goveTm~ient in Georgia is depen ent almost entirely on the ad vitlorem property tax. ~t is one of the most restri ted revenue structures in the Nation. Property tax ~levies have grown from $ 3.5 million in 1957 to $55.2 million in 1964. Basic requirements in traditional municipal ~ervicOs are expanding at an accelerated rate. Current and new service requirements have resulted in he problem of not having enough money to expand tradItional municipal servi~es in accordance with demand and to meet also~ th~ needs of our growing cities for new and additional services in such areas ~as housing, water poilut~ n, recreation, and th~ many cultural an~ social heed ` ~ of' today's urban communi The following' pa~ges list a sample of certaill of 4iemost critical problems a d needs of Georgia tunnicipalitles within and outstde the Atlanta metropolit n area complex. Tl~e cities presented represent afl sections and areas of t e State. The demor~stration cities program would Io1~er a concrete opportunity for cities, such as these as well as others of our ~tate, to `accelerate an atta k on the extensive blight and deterioration of vasli areas resulting from rap d urban gr~wth and development. PAGENO="0363" DEMONSTRATION CITIES A RBAN DEVELOPMENT 357 FACTUAL DATA ON VAJUOUS GE~RGI4 CI E ATIVI!~ TO DEMONSTBATION Gi~NT cnrns M Mcwon Macon expanded city liniits4 19~1 ; fr~ u~ of 1960, 69,Th4 ; estimated popnlg~ tion, 1964, 128,000. ~ I Money needed In sewerage disposal f ~ au exed area, $6,500,000; highway an~L street work in connection witl~ I-'~5 an o ector roads, etc., $8 million; water system, spending $3.8 million pve~ 8-ye r p~ od; storm sewers in annexed area involving 60,000 people, 10 yeats a~d $1 ill on; municipal auditorium and other public facilities are tinanced; ~,ity, 19 m Li i~i luded bonded indebtedness; county, 42 mills, including schools, c~usolldat ~1,. $ million necessar~r for new schools. ~r~i,nswick City: General government_f - Schools Bonds 4- Parks Total ion. application waiting approval, rndard dwelling units: 25 ~way; second phase of $3 tnslon U Gainesvil'e Solution to ~nal projects, $30 to cational trade school, n additional capacity. 3.5 - 7.16 4.25 0.64 15.55 63. 00 10 new buses. .--------~---. .__-. 117 17 26 19 bon~1i~ig 1apacity used. PAGENO="0364" 358 DEMONSTRATION CITIES AND URBAN DEVELOPMENT *-Bw~nbridge : ~ Popu1atiOi~ 1950, 7,5~2 ; 1960, 1~i,OOO. ~(Jrban renewal : Ha~ completed an urban ]~enewa1 project for commer lal area. Urban re~iewa1 n~ed in areaa c1o~e to cent~rofcity wlilch Jias no pubFc sewer- age, extensive flooflng pro~b1ems, occupied by Negro families as well as some light commei~cia1 and industrial uses ; cover~ 110 acres, $1.75 willion II eded. ~ Another large area. without public sewerage about 8 blocks from cente of city, largely occupied by Negro families ; very setere flooding problems, $1. milliOn needed to rernedy. * ~ Blighted anea~ comprise 60 percent of city. ~ Substandarti ho~aing, 35 peree~it of all dwe Ings. Sewer needs : $I.~ mifflon ne~d~d to sewe bnsewered areas plus tr atment. A large new'y annexed area has no public se er. One-half miHion dollars In atdrm drainage eeded. Streets : Street improvement program ap lied accelerated public w rks in- volving $715,000. POverty program : Oommuntty action comnjittee formed. Current pr ject to train people in planting and harvesting of ~háde tree tcsbhceo.' Public buildings needed : $300,000. To~a~ rate (m4lt~) Oity. i 25. 00 Oounty ~. 48. 00 1 Includes schoOls. ~ Bonding ca~a~ity : $600,000 available. S~avannah ~ ~ Population 1~0, 119,638 ; 1960, 149,245. Savannah des~rlbes its prob1ezn~ as being pri arily the result of the de elop- ment of a munl~lpal complex during a horse-an -buggy era. Savannah is a old city and it is characterized by great blocks anc1~ areas of deterioration res lting from inadequate street patterns and systems, ~xtremely high density be anne of large tracts of multiple dwelling ownership. Thirty percent of the ity's dwellings are substandard. Roughly 50 percent of the city's area is blig~ited, characterized by un aved streets, inadequate housing, mixed land uses, avid lack of utilities. The vast exod*s from the farm to the city ha~caused tremendous social rob- lems hi which a i~rge percentage of the citizenry l~ ~onomically deprived. here has been a treirn~ndous obsolescence in the dos4town area with the dccli e of the central busii~ess area becaune ~f difficulty 4f ingress and egress with the population moving away from central areas and ~the resultant competition rem shopping centers. As a result of these trends crime is lecoming ~a very critical problem du to The large concentration of people in relatively smafi areas and to the many so ial maladjustments within these areas. The city faces an acute problem in housing. It is difficult to find bou lug for the economically deprived. So many of thes4 people earn too little inc me to qualify for public housing or too much, and the$ is great need for rehabil ta- tion of existing substandard housing. Water pollutioh abatement program underway, $~2 million. Streets :. 100 miles unpaved, will require some $l5rillion. City 1. 26.00 Schoois -~ 20. 00 County _----_-~ 46. r Cok~m bus Population 1950, 70,611 ; 1960, 115,741. Oertified workable program. Blighted area : 50 acres blighted in which~ there is severe flooding requiri g complete evacuation. Mostly Negro resident, near 4enter of city. Three or fo r million dollars needed to remedy. Substandard housing : 30 percent of all dwellings. Water and sewer Multi-million dollar project u erway to divert water fib to eliminate fioodingtWeracoba Oreek. Ta4~ rate (mifle) PAGENO="0365" DEMONSTRATION ~IT~E~ Ii RBAN D~VEtOPMENT sewer disposal: $5 mi1lic~n ~rOject u~ ~ ay invotvlng ~2treatn~ient facilities. Other eapitalimp~øv~eu~eut n~ed~: Community recreation centers~ $504~ New city-county building l~ein~ pla ~i 5 to $7 million. Taco rate (m fls) City ~ 17 Schools -.~ 32 County - 12 359 Total digest Bonds outs 1D~ocests capa A~g~as'ta Populat Urban I tional areas t Housin~: 31 Police: madE Current occupan 181,000,000 5,000,000 7, 000, 000 `~n; 2 addi- ~lerly. Lsoners 10 years ago, comprehensive recrea- :s traffic at 20- to t is estimated at cost. ~parat n of sanitary nt. This is a $7 millto~ sewer program ~v~r the estimated. 15.25 30.00 15.00 vay In excess of $2 million will elim- ter and sewer tment. 11.00 ~26.00 Urban Ings. Twoai are underway for4 - ~ ~tt to 30 percent of all dwell- ~- ~- -~3 cost of $5.4 million and plans PAGENO="0366" 360 DEMONSTRATION CITIES AN~ URBAN DEVELOPMEN ~ Storm drainage a major problem-three ~atersheds Involving seve al million dollars to remedy. Capital improvement plan : 5-year plan for street resurfacing for e tire city. ~ Tact~ rate (~4i~ts) City ~ -4 21.10 County ~. --- 32.20 1 Includes s~hoo1s. ~ Bonding eapacity : Outstanding, $3.99 mnjion ; excess, $1.98 million. Marietta. ~ Population 1950, 20,687 ; 1060, 25,287. ~ Urban renewal : Local requirement next 5 years, $1 million. Blighted area : 20 percent of city. ~ Housing : Substandard 7 percent Sewer : Major sewer studycompleted and e4st projected at $3 million. Capital development program : $3.7 milllo~i projected over 5 years. neludes schools, stre$s, recreation, etc. ~ .~ Ta~ rate (mi~t~3) ty1 -I - L 19.5 County ~- - i 20.0 County schools 4 24.0 1 Includes schools. Bonding : No excess capacity. Total debt outstanding at 7 percent o digest. ATLANTA'S Nuxi FOB DEMONSTMTION CiTius PROGRAM Our capital city ef Atlanta is experiencing a~ tretnendous growth in pop lation. The Atlanta area is currently experiencing a~i increase in population o 35,000 additional people each year or ttt~ apnual gr$th rate of 3.1 percent. ost of this increase i~ attributable to an Influx of f4nilies from the surroundin rural areas of Geori~ia and the rest of the South. 4 large portion of these pe le are poor, uneducated, untrained, an4 simply not! equipped for urban livin . The problems of p~'oviding urban seflTices to a bi~rgeaning metropolis are g eat in themselves ; however, add to these the problems~associated with poverty, illi eracy, minority races, unemployment, and the problei~i becomes staggering. In the past Atlanta has done its best to face up to these problems. Its overn- inent officials and civic leaders hare recognized these problems and attem ted to solve them-with a great deal of success, I might add. No city in the South has a better record 4f solving its racial probl ms in harmony. The. people of this city have takei4 the initiative in alleviati g the causes of racia~ discontent before it has eru$ed. I think Atlanta's ree rd in race relations sj~eaks for itself. ~ ~ Atlanta was ~ne of the first cities in the Nation to establish a war on p verty under the Federal legislation. Atlanta's povei~y program has been often cited by the Poverty ~Mrector, Mr. Sargent Sliriver, ~s one of the best in the ation and an example for ether cities to follow. At~nta's poverty program ha had ~ no petty polith~il bickering as has been so often found in other cities cross the Nation. Atlanta's program was establishc~1 for just one purpose-to wipe out poverty, illiteracy and related social evils, and it has made a treme dous start in this direction. The Atlanta program presently has nine, neighbo hood service centers in operation with three more pl4tnned. Nearly 7,000 individuals: have received employment counseling. Nearly 1,000 students are particip~ting in the Neighborhood Youth Corps program ; 1,~00 youths have been pla$d in private jobs ; 500 dropouts have been placed in sobs ; 300 boys have been s~nt to Job Corps camps ; nearly 500 une~nployed pare~its of dependent ~childrep have received job training. In coo~ierat1on with th4 Atlanta school system, n~arly 13,000 parents a~nd children have been enrolled~ in special educational dli~sses. Additional ph~s~s of the program are underwa~ Including social service, day- care service, public health, legal aid and many moi~e. . Atlanta has one of the largest ntban renewa! programs in the Nation, ~vith eight projects in execution and three in the pl~nnlng stage. Five additjpnal projects are in the programing stage and will be given serious consideratio~ in the near future. These 16 projects encompass nearly 4,000 acres of land or ne rly I PAGENO="0367" I DEMONSTRATION CITIES: D URBAN DEVELOPMENT 361 In sc~iving it of the I'~ lie Delinquency ~ demoii PAGENO="0368" 362 DEMONSTRATION CITIES A~W ~YEEAN DEVELOPMENT of the parks 4epartment be subst~uitia11yincr~~ed to permit the accompVshment of certain sp~cffic recominendat~bns relating ~o the quality and coverag of the city recreat~Qi4 program. I A report ~ water and sewer prob'ems in ~etrepo1itan Atlanta indica es that the major pro~ilem is the shortage of needed jñoney. For some of the sewer systems the i~eed has reached a, crisis stage. ~For example, the water p ilution control engineer for Atlanta's seW~r system ~ estimated that $30 to $40 . illion is needed to make necessary improvements in l~he system right now. Phi repre- sents approximately 1G times as much as couid be obtained through a eneral obligation bond issue ; and this report is out of 4te. One of the major problems facing the Atlanta~ ~egio~ is a solution to its c itical traffic congestion A report by the Atlanta 1~e~ton Metropohtan Planmn Oem mission pointed to the need for i~ regional ra~4 transit system to bring about an improvemez~ in public trauspor1~ati$n ~ompa4aJ4e to the improvement a orcied to the private ~tutomobi1e by providuig regio~4t~1 expressways The esti ateci cost to provide 4thts long-range sy~1~ii~ is $t~OO i41'Uien. L~gal machinery h s al- ready been est~tI~1ished to provide Atlanta with r~ipld transit The legal pro lems have been soived~but the ~na~ncialp~o1*ems remap . A recent repott by the city planning departz~ent sets the immediate c ~ pital improvement needs of the city, excluding scbo4ls, during the next 5 yea s at nearly $215 million. This includes $38 million f~r urban renewal and nearl $51 million for sewer improvements. ~ . The city's planners estimate that in order t~ solve the city's most pre sing problems, an additional annual expenditure of $~l4~million will be re4ulred. ome estimates go eveu higher. These estimates do not~include expenditures for sc ool purposes. . With the pr~mt grqw~li i~e of ~, dty, ai4~u~m~a1 ine~ease in the ~lty's revenue from pre~ei~t sources of $2~5~OOO can J~e~p~ted. This. i~ far ort of the $65 n~iion *eeded, boweve~. ~ The city's preSe~it sour~s of r~v~ue are (1) p4operrty taxes, . (2) license f as, (3) service eha~s, and (4) Federal and State ~rauts. The city is pcrese tiy prohibited from levying a payroll.. o~ * inoo~nie taj sales tax, or gasoline ~ z; nor does it receive any of the prooøeds of these~taxes collected by the St te, except for a very small reimhurse~ient from t1~ gasoline tax. The city as recently requested enabling legislation ~rom the ~ta~te legislature to `allow a city to levy a payroll tax and/er sales tax. This request was denied. The city's only recourse is to increase its existi~g taxes. This it intends to do. However, it isestimated that this moasur~ wi'l only bring in an addition 1 $5 to $10 million a~nua1iy. Still far shoru of its tneeda~ In view of the lack of re~oui'ces at the local le4e1, America's cities have i - creasingly been fc*~~ed to look to F~dj~ral. grant-ii4~atd programs to help aol e opr urban dilemma~ As dememstreit*i by presei4.1~'e~1eral slid programs t e cities and Ithe Fedoi~l Governm~aiVhav~been able toj~o&n tegethervery effeetivel in attacking urban ~rob1en~s. bi~tl~inonstration ~thIeu program offers an 0 - portunity to snpplanient local progrørnsand aeceler4te the jo'irit attack on thes problems. Atlanta's urbap problems i~e massive. ~niy by utilising a massiv attack On these problems can they be effectively Solved. The demonstratto citien program offers this hope. The following property. taxee are 1evi~d on propert~7 located within the city o Atlanta (in that pottlon of the city within Fulton Conlty). 1966 per $1,000 a~e~sed vazw4iea General fund 4- $9.00 Debt retirement 3~ 50 SpecialparkThnd__-~ ~. .50 Schools -~ .--~-_ 4~ 19.00 Fulton Oounty ~__~ 4~. 21. 50 Total -4 5~, 50 PAGENO="0369" DEMONSTRATION CITIES ~ND EBAN DEVELOPMENT 363 1965_ 1966 1967~ 1968~ 1989~ 1970_ 1971. TATION, c~ry 23, 1961. a committee to ~. Mr. Herb~t ~__~ipa1Itie~ e tance to d.~ -- ci t in developing ñled with A copy Pro'Jecte~1 geM~era,l ob~i Zi~ig indebfrdness for 60-878-66-pt. PAGENO="0370" 364 * DE~MONSTRATION OjTIES A~1D ~t3UAN DEVELOPMENT Although $enate hearings had been goin . on for 2 days before I a rived in Washington, I did find out that Alabam , Tennessee, Kentucky, a id West Virginia filed briefs on behalf of Senate bI 1 1. The Municipal Assoc ation of Alabama, Tennessee, and Kentucky are actively supporting Senate bi 1 1, and Governor Patterson of Alabama and Go*r~nor . Ellington of Tennes ee filed personal briefs in support of the act. We felt action should be taken in filing ~a brief on behalf of the Georgia Municipal Assodation for the following reasot~a : 1. The act, ; as drawn, would provide one-l~ttU the proposed appropri tions to rural-small urban counties about the ~ Natioz4 Under the criteria of n ed out- lined in the b~ilI 628 of the 663 eligible counl4es are in the South (94 p rcent). Georgia had `~6 counties which would qualif~ for assistance in 1959. robably there are more, now. ~ 2. Fifty-three out of the one hundred and s~venty-nine urban distresse~l labor markets are in the South. ~ 3. Southern States wilibe eligible for 65 perc~rnt of tbe.proposed appropr~ations. 4. S. 722, the Area Redevelopment Act, wa~ passed by Congress last y~ar, but vetoed by the President. However, both m4jor ~ parties put such a proposal in their platform, last year, with Mr. Kennedy making it a No. 1 issuEs. The fact that the Area Redevelopment Act has bee~i labeled "Senate bill 1" in icates determination by President Kennedy to pass thE~aet. 5. Vice President Lyndon Johnson voted fo~, and supported S. 722 las year and campaigueçl for assistance for distressed ~u~as during the recent ci ctlon. 6. For the ab~ve reasons we believe that an ~ Redevelopment Act wi 1 pass out of Congres~ and be signed b~ the PresI~Ie~i1 ~1urmg the upcoming s ssion Therefore, we lihink S. 1 should ~ b~ supported ~y southern legislators to ssure that the rura1~-~nall urban provisions will be lë~t In. During the hearings, we heard testimony ft~om th~ Republican minori y on the Senate committee, voicing objection to the ~bilL One of these was Se ator Bush from Connecticut, the State having the h~g~iest degree of industraliz tion per square mile within the Nation. Natüraily,~ they are satisfied. They men- tioned such things as "pirating of industry" by the South, etc. We are attaching some information developed~ by Mr. Herbert Bin~ham. Please advise us hOw to proceed frOm here. We feel we have our foot I the door, by filing our brief. ~ . ~ ~ By copy of this letter, we are requesting the ~nembers of the board, tog ther with other city o~ficia1s to let us have their im4~diate views regarding an rt of Senate bill 1, i~i order that we~may take actiou4ff desired. Very trui~1 yours; I W. ELMER GEORGE, :~ Eo~'ecutive Directo STATEMEEP ItEGARRING SENATE Biu~ 1, T1~E ~REA REDEVELOPMENT Acu Mr. Chairman and gentlemen, we wish to thank ~ou for the privilege of app an. ing before the Senate Committee on Banking and Currency for the purpos of presenting a statement on behalf of Senate bill 1, t~ie Area Redevelopment Ac My name is W. Filmer George and I am exeejitive director of the Geor ia Municipal Association which represents apprG*h4ately 350 of Georgia's to na and cities and, through them, approximately ~2 pe~ent of our State's populati n. The Georgia Municipal Association, through aetI~rn by its executive eommitt e, is on record as supporting a proper Area Redevek4aaent Act, with' the followi g provision : ~ ` ~ . ` `t . 1. That the proposed legislation contain the esse4tiai provisions which were in S. 722, the version of the Area Redev~Iopment Aet~enacted last year but veto d' by the President. By "essential provision," we r~iean the provisions where y eligibility areas of the Nation affected by this bill ~e, not only "inclustriai red velopment areas," but "rural-small urban redevelopisent areas," as welL No Area Redevelopment Act would fully accompll~h the general purpose of the effort to stimulate lagging economy in distressed aj,eas ~ of the Nation, unless ~t contained provisions to assist rural-small urban are~ts. We realize, of course, that the Georgja delegatIon~to the U.S. Congress have record of opposition~to the Area RedevelopmentAc4 and our appearance befor this committee may; appear somewhat inconsistent However, we believe th PAGENO="0371" 1. We believe that affects the ecoi - 2. Part of t ist - on adversely t the rural-small -~ ~sing PAGENO="0372" I 366 DEMON~TRAkrION CITTES AND' ~UREA]~T DEVELOPMENT ~ Phe primary interest of the people of G~orgia in an Area ~ Redev lopment Act would be in t1~ ruraFarnall urban pha~$~. Otherwise, it would h id little benefit for us~ UrwE~ver, we recognize ~ tile ~veral1~ merits of the bill, i eluding assistance fcn~major ~$u~tna1 areas with dec]4znng economy Resp~ctfu13~r aubmittot!. ~ ~ ~ ~ . ~ ~ ~ `w. ELMER GEoRGE, ~. Ea~eoutive Directo ~ r Georgia Munio~pai As.soci tion. RRSOLUTION O~t Anna REDEVELOP~ENP BILLS ArkPTED BY CONFERENCE O~ ~O THE~N STATE. MvN~ip~u~ LEAGUES AND CITIES, JuNi~ 12-13, 1959, WASHINGTON, D.C. Whereas the COnference of. So~ithern State ~1unicipal Leagues and, mu icipal officials, sponsdred joiiitly by the American Mu~kipa1 Association, has con idered the enormous benefits to States and cömmui~[ties in the southeastern nited States of the ai~ea redevelopment bill approved ~ the Senate (S. 722) and under consideration i~L the house of Representaflves~ of the U.S. Oengress ; and Whereas S. ~2 pi~ovidea $389~5 ~iiUion Of 1oa~is ai~d grants te fester md strial growth, with Q4ie-half ~f the Ainds earmarkedj ~ór ~nderdeve[oped rural areas and one-half ~oi~ 1a~ge industrial ce~iters with. 4vonlc unemployment ; and Whereas 65percent of the~total loans and gr$i~ts authorized by the bill ~ ill be available to southern communities ip 628 nndercl~veloped rural counties and to 5 southern cities With eE~essive unemployment ; ana Whereas the~presse4 areas legislation propo~ed by the President (H.R. 2Th~ discriminates a~alnst the South by eliminating lall assistance to rural are s, 94 percent of wbleh are located in the South ; and Whereas the provisious of S. 722 will accelerath the balancing of industry with agriculture in depressed rui~al areas, thereby red~cing the enormously costly erni- gration of popu~t&~n. and atfqrding permanent r4lief from the billions of d liars of annual subsidi~s now poured into rural areas 4~support faEm income ~ Be it Resolved, Th~ the Conference of Souther~i 4&ate Muiiidi~al Leagues and Cities urges the l~mbeis~ of Congress for the SoulJh to support a sound area ede velepment bill an~I oppose the prepo~al of the Pr4~Ment and others (H.R. 4 78) which c~iscrimina4es against the Sehtb by elhnina~Ltg. all assistance to depre sod rural areas ; ~ ~ Re$olved f'iwtMr, That a copy of this resolut~on and the statement of act adopted by this cenfereuce be transmitted to all ~embers of Congress from the Southeast and to the mayors of some 2,000 soutI~ern communities Which w uld benefit from the provisions of S. 722. SOUTHERN CoNFEn1~NcE ON AREA REDEVELOPMENP~BILLS SPONSORED BY Sou ii ERN SPATE Mu~cXr~u~ LEAGUES A~D CITIES A1~D YITE AMERICAN MUNICI AL ASSoCIATIoN Statement of 1~adt-Ar~a redevelopment iegisia4ori. (S. 722~ and the Sod h. flnder area redevekpment bills before the Congr4~s, the South. will receive a major share of the benefits to be made *vailable : 6~8 out of the 663 eligible con - ties for rural benefits are in the South : 94 percent ~of rural funds will go to t e South ; 53 out of the ~79 urban distressed labor markets are in the South (mo -e complete surveys would increase this number) ; So~tJthern States will be eiigib e for more than 65 percent of House bill $251 milli*n appropriation. BENEFBVS UNDER THE BILL TO "REDEVEL$~PMENT AREAS" Technical assista4ce, $4.5 miuioii (annual app4priation) ; public faci1itie~ grants, $35 million ; loans, $50 million (revolving ftt4u~) ; industrial loans (rural areas) , $75 million (4evoF~riiig fund), (urban areas) $~5 million (revolving fund)~ vocational training ~rants; `$1.5 million (annual ar~p~oprlation) ; retraining sub~ sistence payments, ~0, mlllhni. DEFINITIONS OF R1t1YEVELOPMENt1~ AREAS EUG]~RLE FOR BENEFITS Rural areas.-Courities with the largest number an~i percentage of low-income families and a condition of substantial and persistei~t unemployment or under- employment. These shall include counties among the 500 ranked lowest in the PAGENO="0373" DEMONSTRATION CIT~ES D IJI~13AN DEVELOPMENT 367 level of ~Uving oi~ farm~opera~t~ f~mi1i s ~tz~ among t1~e ~OO having the highest perce~itage of côn~i~iercla1 1~rrns ~*Odu 1 ~ 1 ss than $~OQy~orth of products for ~aIe annually. ~ ~ ~ ~ Nu~$bero ~ ~ .~ Number of , ~ oo~nties ~ Qountie~ Alabama ~ 5 ~ th Caxx~twt 44 Arkansa.s ~ 5 O~ ahoma~. .. .~ 20 Florida ~ 1---L_ 1 So th Carolina _ ~. 36 Georgia ~ 7 ~p nessee~__~ ~ 70 Xentueky ~ ~ p~ as 36 Louisiana _ --~--~-~- ~ v~ ginft~ 20 Mississippi ~ 0 W st VIrginia 87 Urban areas.-Include ar~as *h~r 1) at l~a~t ~t 12~pereent unemployment rate has existed at least 12 n~ont~is ; ( ) at~ east 9 percent have been unemployed tor at least 15 out of 18 mon~hs ~ (3) ~ ~ ent for 18 otit o~ 24 months ; or (4) 15 percent for 6 months if 1r~ncij~a1 ca e~ ~ re not temporary. ~ Numbero Number of ~ ~ l~tbormark ~s ~ . labor markets Alabama ~ 6 0 lah~m3..~. 3 Arkansas ~ ~ ~essoe~ 4 Kentucky ~ ~ zas Mississippi ~ lrginia~.. 3 North Carolina ~ ~. , est Vitgi~Ua 12 NoTE-Labor market sarvey fo~ sma~ re~~ with less than 15,000 emploved are gen- erally lacking so that on detail d review ~ ~ ore southern labor markets will be eligible under the bill as 1oc~il communi ies i~eques~ s iPs~ ys to be made. ~ ha M Tec1~nica~ as$i8tance.-A$en~y `to ~ o~r~ e technical ~~sistance in the form of expert services and cons~1t~nt~ fron~ *~ staf~' or oi~ contract to help redevelop- ment areas to draw up ecol~om~e dei~l p ent programs~ Public 1aci1~tie8.-~Grai~it~ or loan~ ` ~t be given ft~r the aeguisitlon or devel- opment of land for ~public ~aciiity ~ g~ nd construction, rehabilitation or im- provement of public ~aeillties ~ieces ar~ or an approved economic development program. ` " ` ` ` Loans are to be granted *hen fu d e~r not otherwl~e available and will equal uums needed to insure con~p1etion o roj ct. Loans for 40 years at a maximum interest rate equal to the ~tv'e~age a e all oustanding U.S. obligations at the end of the preceding year ~1us one- 4~ rt of 1 percent ` (currently 27/s). Grants are to be granted~ to ~uppl e~i~ local resourcesknd loans where needed. Inâustriai aM eomrnerc~ca fa~ci1i ~ s I a~ts.-These loans are for the purchase or development of land fo~ Industr ~ ~ , cQnstru~tioi~, rehabilitation or altera- tion of industrial plants o~ other fa i itie or puchase o~! machinery or equipment. The loe,ns wW be granted only if f n ~ re not otherwise available from private or other Federal agenëies on ~easo b1~ teems. These loans are lim1te~ to 65 pe c r~t of l~he cost'of the project at an interest rate equal to the Preasu~,y rate p u o e-balf of 1 percent ( one-fourth percent to be allocated to sinking fund for p ~ ant of losses) . At least 10 percent to be auppiled by local groups/ an~L at e st 5 percent by nongovernmental sources. Federal loans are su'bord~ñat~ to o h r 1 ans. Vocationa' trainin,g.-~he ~ede ~i G vernment is to ascertain needs for voca- tional training and pro~idh fina l~l assistance to State agencies `for such facilities and services. ~ ` Retraining $i~~bs~stene~ pct~jmen s - rainees whO have exhausted unemploy~ ` rnent benefits or are not entitle to ame, receive subsistence benetits for a ` maximum of 13 weeks. I ` Urb~ re~wwct1 beneflt~.-~Jrba ~ i~u ing grants are to be made to communities with population exceedi4g 2~,O00 ~t d~ rovisi'ons for ur1~an renewal `may be used for industrial t~nd comm~rcith slu le rance or rebuilding Prooe~lure.-~-Programs zn~tst b nlt'ated by local groups and approved by ` appropriate State planni~ agenc . ``` I `~` PAGENO="0374" 368 D~tONSThATION CITIES AND ~TRBAN DEVELOPMENT A list of ~Aorgia counties eligible to i~eeei~rO benefits from Senate hi (there may be other~, now) are as follows : ~ ~ Appling Evans ! Pierce Atkinson Fannizi ~ Quitman Bacon ` Fayette S Rabun Baker Glascock S Randolph Baldwin Gilmer Rockdale Brantley Greene ~ Screven Brooks Hancock * ~ Stewart Bryan * Harah~on ~ Teliaferro Burke Hart Tattnall Butts Harris ~ S Taylor Carroll Heard ~ S Telfair Ohariton H~rnry : Towns Ohattooga Jasper Truetlen Clay Jeff Davis ~ Twiggs Clayton Johnson ~ Union Clinch Lamar ~ Walker Coffee Lanier L * Warren Coweta Liberty Washington Crawford Lincoln ~ Wayne S Dade Long . : * Wheeler Decatur S Marion ~ White Dodge Meriwether Wilcox Douglas ~ ~ Montgomery Wilkes ]~ar1y Murray S Wilkinson Echols Newton Ethert Oglethorpe INTISRIM RE1'ORT O1~' ~`EOJEOT PEO~B5~5S C0MMITTEx . S * OIUGIIT OT PROJB~OT P~o~RESS Project Progress was conceived as a means of determining what steps need to be taken to stimulate economic development jn the many counties in Ge rgia which have suffere4 population, employment a d other losses. In effect the project's product was `ffitended tO J~e a bluepri t for the development of hese areas. S Initiated in Jl~ly 1960 by this committee mid ~ the sponsorship of the eor- gia Municipal A~sociation in cooperation with he Senate Government 0 era- tions Committee ~he project was d~igned to evntually put economically arct pressed counUes't~ack on a sound footing, if possib . Project Progress was made public on July 28 1960, by Lt. Gov. Garlan T. Byrd in an address to the annual convention o the Georgia Municipal sso- elation. Since that time the Association of Co~ty Commissioners of Gee gia accepted a general invitation to cosponsor the program. ACTION TAKEN At the very beginning agencies concerned wit~ Industrial and economic de- velopment were called in and became an integral I~IL1~t of Project Progress. ep- resentatives from the State department of coinin4rce, Georgia Tech's Indust ial Development Brarjch, the State chamber of coth4ierce, the department of e u- cation, the Georgi4 Power Co. Area Development ~lvision, and various unit of the University of Georgia worked with the comthi~tee throughout the more an 4 months the study~ was being carried out. Six counties were selected as typh~al of the ma~i~v which need new payrol s: Washington, Hancock, and Greene, in the east-*ntral part of the State, a d Dooly, Macon, and Taylor in the west-central parts Representatives of the p r- ticipating agencies conferred with business and pOlitical leaders in each cou ty to secure information about economic conditions a~id existing development p o- grams. Each county was given suggestions or ~~mmendations by each p r~ ticipating agency as It saw fit as to specific steps iwhich might be taken to p t them in a better po~ition to develop their known pot4ntials. S Representatives of the participating agencies hel4 as many as six planning a d programing meet1n~s with local leaders to follow i~p the initial conference. n some cases aofion ~rograms were quickly 1nit1ate~L on problems of major I PAGENO="0375" DEMONSTRATION ~IPIES ~N RBAN DEVELOPME3~I' 369 factfindth~ PAGENO="0376" 370 DEMONSTRATION CITIES ANti URBAN DEVELOPMEN to offer one excellent means of carrying the-work o1~ Project Progress f rwarcl in a practical and productive manner. It offers a means both of asses ilig local resources and of providing technical assisl~ance needed for the desig and un- plementation of action programs. By requiring 50 percent local fin ncing It assures continuing local interest and suppc~rt. It does not, however, rovide a means for promoting the resources and pot~ntials which may be foun to exist in Washington County. (7) A str~ng promotional program will be~required to enable Georgia counties to compete, ~rnce they know their assets an~ * ~ .~ully prepared to pu `me new payrolls. While this might be done to a l4ite~ `éktent with local res urces, it appears more logical to have promotional ço~ts concentrated in a b oadened program in the Department of Commerce. (8) A total of 68 counties actually lost ~nanufacturing employmen during the period 1947 through 1958-a finding wMch we found not only s rprisiag but appalling. This single fact dramatizes the importance of vigorous ctioii to implement our recommendations. The steadily increasing cOmpetiti( a already referred to sin~ply underscores the importande of taking early action to revent even more counties from losing out in the race for new payrolls. It should be noted also that 19 additional ~fl]ntles each had a manuf cturing employment g~tin of less than 100 workers-wIjth the annual average rangi g from less than 1 to less than 9 per year. These c4tintlee also must be consid red to be in urgent n4~ed of technical assistance. To*tber they constitute 55 ie cent of the counties in~the State. (9) Even n~pre discouraging in some ways~ are these additional stati tics on the State's ind~strial growth : (a) Only three counties-Cobb, DeKaib, and Fulton-had more ti an 3~ percent of the total manufacturing employme~t gain during the 11-year period from 1947 through 1958 ; ( b) More than 50 percent of the State's gain was concentrated in only seven counties ; . (C) Only 15 counties had over 6~ percent of th? total gain ; and (d) Seventy-five percent of the total was s1~ared by only 31 counties. To surninariz~ briefly, most local developme~t groups need as wide a range of technical serVices in the industrial field as qeorgia's farmers are accus omed to receiving in ~ the field of agriculture. Am4ig the specific problems hich require technical help are the identification ai4l evaluation of industrial sites, the planning of industrial districts, the collectidn and analysis of resource data, the evaluation of each county's best industrial potentials, the analysis of man- power resources~ and many others. In most cases local development g oups find it impossible to do a good selling job on the rare occasion when th y do encounter industrial prospects for the simple reason that they do not know what they have to offer that might be of value to the industrialist. In addition, they need instruction in the various technique~ that can be used to make an effective presentation when they do have an opportunity to talk to a legitimate prospect. In those counties where good prospects exist fot the development of the tourist industry, assistance is also needed. The planni4g of adequate accommodations is only one of several aspects of tourism which nee4 attention. The committee ~elected the six counties in twot groups of three counties each, in order that prohlems of economy, population ross, etc., might he considered on an areas basis. Considering the magnitude of t~ie job of auditing the potential, blueprinting a program of development and carr~ring it through to a practical conclusion, the committee was limited in the nun~ber of counties to be brought into Project Progress at this time. However, experience in these six counties will benefit other counties. This experience will point out general problems, needs, and solutions which can be used to help other areas with their own Prob- lems and opportunities. This is true, especially, tf funds and personnel permit expansion of needed economic development resoui~es within the State. SUMMAI~Y OF RECOMMEND4IONS More than 4 mouths have been spent through ~?roject Progress in studying means of putting tI~e State's economically hard-pre4séd counties back on a sound footing. Six counties, Washington, Hancock, Gree4ie, Dooly, Macon, and Taylor were selected as being typical of the many whlc~ badly need more and new payrolls. The State department of co~nmerce, the State chamber of commerce, I PAGENO="0377" DEMONSTRATION CITIES A~ i~i~A~ DEVELOPMENT Georgia Tech's industrial deve~op~eiit ~ra~p , the ~tate department of educa- tion, the Georgia Power Oo~'s1 areas d~ e~q ment . division, and various units of the University of Georgia p~rtiç~ipat44~1 in~ he study. The Georgia Municipal Association and the Assoclatiqn o~! Coi~i y oinmissioners o~ Georgia acted as sponsors with the Senate ~ov~rnniE~i perations Committee serving as coordinator. I It was found that a critical ~iee4 exis~ fo early at~tlon to assist hard-pressed cOunties in their search for r~ew sot~r ~ ~ income. More than 42 percent of the State's counties-a total ~ of 68-i-- ~ ~t ~ y lost manufacturing employment 1x~tween 1947 and 1958. An a d1t~onal 1 ~4 ~ed less tl~ui 100 new manufactur- lug enipioyeesdu~ring the same per~d, * ~ lt~ a total ot~5~purcent of our coutities which we consider to be great y 1T~ nee ~ i~ w Industrial payrolls. It is our conaidered opinioi~ hat unle ~ i~ recozx~mei~d~t1ons enumerated below are Implemented at tii~ e~rii st i~ossi ~e `ti ~ e that witlñn ~ years a number of countie~wil1 have suffered si' i~ g~,eat o ~ tiØn and other losses that it will be virtually impossible for them e~ er th re ~i l~ t eir econdmles. With these sobering facts l$foré us, 1l]~ ently recommend that the following steps 1~e taken : ` ~ ~ ~ 1. The limited atnount ot~e~ea~h n ~c be~1 g dO1~o1~it1~e auditing and analysis of the State's industrial j~oter~tjal~ sho 1 b rapidly i~reased by expanding the industrial development resêtL~ch ~rogr O~ Georgia Tech's Engineering Experi- ment Station. Also, the ~ va~,iox~s un ~ ó the University of Georgia which naturally lend themselves t~ ~ e~pnom ~ ~ elopr~ient should be evaluated and research programs strengtbe~ed whe e i~ essary in order that full practical advantage may be taken of the ~ecu ~ r nU valuable services offered by the university system of Georgia. ~ 2. A statewide industrial ~te~ision a ri~'ce should be established in conjunc~ tion with Georgia Tech's indttstr~a1 d ~r là~ ent research program to provide to local industrial development org~niza~ i~ è same breadth of technical assist- ance and research long availabl~ to ~ r~ `s far~ners and to organizations con- cerned with agricultural d~velç~pme ~. ~ Is further recommended that such an industrial ext~nsiän serv~ce ~an ~ e. t l~ implemented through the establish- ment ~ a statewide networI~ of. ~1eld ~ cè~ or branch statioii~ of the engineering experiment station, as auth~ri$d by i~ bill 745 passed unanimously during the 19lO session of thegener~j1 as~e~n~ ~r* . 3.. IndustrIal arts training program hc~ ld be expanded as rapidly as possible to make such training avull4blethro g o4 the ~State. Industrial education and area itidustrial vocational f~ci1jties ~ i~i also bo provided on a broader basis in order to insure that our young p o ~e are `better prepared for the nonfarm jobs which now provide the va~t ma ~ it of new job opportunities. 4. The advertl~lng axrd~p$inøtion ~ ~ . ram of tIle dopartmetit of commerce should be expaxicled, both 1~o s~ren ~ r~ ~ romotional activities concerned with the State as a whole as wei~as to rn k ~ ossible for the department to provide support and techni*al as~i~a*i~è~ to o ~ a~ development agencies in their promo- tional programs. It Is fur~1i~r reco 4~i ed that the department `of commerce be put on a basis to 1nSu~ that t ~s y best . profe~aional personnel will `be attracted to the *departmer~t ax~d wi ~ `be opt through ~ succeeding State admin- istrations In order that ad~qu~te pr ` a s may be properly developed and per- petu'ated in the most pr~$siv~ ma i~ r~ Only through such bold ~tep~s do f el that It will be pOssible to meet the needs of the many count1~s i~ Ge r Ia which are economically hard pressed and have an urgent need fo~ ne~v pa~ o ls~ Project progress has just begun n t is is a prelirniniry report, only. For the project to `be fully suc~ess~nl it ` ust be carried on year after year in each of the participating eounti~s, *ntll . 1 ~ their resources and economic potential have been audited and a( blt~epri ` ~ fOi~ progreasive development is complete. Once the `blueprint is com~1et~ the ~ nhi~t t `be a continuing effort on the part of the local people to carry it/out to th `~ fruitful conclusion with the assistance of the agencies. 371 PAGENO="0378" 372 DEMONSTRATION CITIES ANDI t11tBA~ bEVE.LOPMEN NEED Z1$LEWN PLAN OF PRO CT PROGRESS The,Raw Nat ~The ~Machine4~ OPPORTUNITY PAGENO="0379" H URBAN DEVELOPMENT 373 F L PAGENO="0380" 374 nEMS~rEA'rTON dTIE$ AND VTh~ k~ DIBVE.LOPMENT CONCENTRATION OF 1947- 8 MANUFACTURING EMPLOYMENT GAINS PAGENO="0381" DEMON~TRAT~ON CIT E ND URB~N ~EV~LOPM~N~ 3Th .,tIES WITh NET LOSSES COUNTIES WITH OA~HS OF LESS THAN 100 PAGENO="0382" DEMONSTRATION CITIES AND URBAN DEVELOPMENT PAGENO="0383" DEMONSTEATION THOUSANDS 400 300 200 uRBAN DEVELOPMENT 100 PAGENO="0384" 378 THOUSANDS DEMON~SThATIQN CITIES AND I~ 4N~ DEy~LOPMENT MANUFACTURING EMPLJOYMENT NET GAIN1~ BY STIE 1947-195 4.~ CALIF. TEX. GA. THOUSANDS S C, MISS. ALA.. ARK. I~54- 1958 CALIF. TEX. FL~A. N. C. MISS. GA. ALA. ARK. PAGENO="0385" DEMONSTR~ATIQN CITI Growth in Pe~ Ci (C.4nista DOLLARS 2200 2100 2000 1900 I A a ID URBAN DEVELOPMENT :ncome, 1929 to 1958 58 Dollars) 379 I \ I~ 0' 1700 1600 I I I EC RGIA I \ I d I V V LI \ iT I ( if 500 400 1930 I ~ 1?37 1944 I I I ~ ~ I 1951 1958 60-878 O-66-pt~ -~25 ~, ~ ~ PAGENO="0386" DE1~ONST1~ATION CITIES AND RBAN DEVELOPMENT Mr. BARREVr. Mr. George, I just want~ to tell you that we app two things that Georgia has done. First, submitting a very fine m.ent through you, Mr. George. And, second, sending to the Congress, ~nd particularly to the ing and Currency Committee, and aHowi~ig us to have on this H Subcommitt~e, Robert Stephens. }]Ie is~ great asset to both oi committee ar~d to the Housing Subcommittee. And I want to te that we greafly appreciate what Georgi~ has done for us. And I certainly want to indicate also~ that you should be th~ for your stanch support of the Preside*'s program. Some critics of the demonstration cities bill have either stat implied that it offers a program which ~il1 be helpful to large only. Now, I agree with the President that it would work in cit all sizes. But I would like to ask you s~ifical1y whether a de stration city program could be of great benefit to medium- or s sized cities su~ch as the cities in the State ~f Georgia. Would yo that would b~ a reasonable statement., a4id that this program ~ be helpful ? j Mr. GEoR~. Mr. Chairman, it wonl4. I think Douglas, C modest comm~rnity of about 8,000 population, was the first city i entire United States that had a housing~ demonstration grant. they used that example in that communlity as a pattern for th~ velopment of programs throughout the ~ whole United Staths. think it is very helpful. And I have noticed questions from committee in relation to the degree and ~ the magnitude of the gram. We recognize that-I believe I 4m right-that initial1'~ bill calls for the appropriation of $2.3 bi1~lion. And obviously, b on the testimpny I have heard here, th~t would be inadequat satisfy the pr~b1ems from one end of the~ country to the other. we do feel thiit this would be a beginni~ig. If we use these g funds and put them in the proper use anc~ the proper places, thei could review the effects of it and determine the value of procee with a program in other cities. I would think that as one city receitves grants and brings level of services and deficiencies up to ~ particular level, pose the benefits of this program should be passed on to someone rather than repeated over and over in o4e of two or three or cities. But I have filed a statement for ~he city of Atlanta as of the attachm~ents as pait of our tesHmo~iy. And we think tha a grant could t~ made to the city of Atlant~. it. would be beneficial would have a greater impact upon the tot~4l problems of Georgia the Southeast than anywhere else in the south. And we think can prove that. But if other demonstration city grants might available, of course, we would like to see other cities like Savanr Ga., Augusta, Ga., or Athens, Ga., key cities, avail themselves that. Mr. BARRETT. Thank you, sir. Mr. Stephens, do you want to ask any que$ions ~ Mr. STEPHENS. Thank you, Mr. Chairmar(. I see it is 5 minutes to 1. 1 think w4 are running a little over the normalt time. And I am sorry thall we have not had a chai to ask you more questions. But, again, wk~ appreciate your comi here to be with us. eciate state- Bank- using rfull 1 you nked or cities es of mon- mall- i say rould a., a the And de- We the pro- the ~sed ~ to But rant we ling its bly ise, our one ~ if Lnd uid we be ah, of Dit ~ce rig PAGENO="0387" DEMONSTRATION di~i~s AN ` RBAN DEVELOPMENT 381 Mr. GEORGE. I would like to s y that I too want to express my appreciation for the opportunit of visiting with Congressman Stephens. He is one of the most 1 v d and respected Congressmen that we have had from the 10 dist i ts nd from the State of Georgia. Mr. BARRErr. May I close by ki g this remark : He is one of the most loved Members of the C gr ss here. And I am not saying this for political reasons. I am ay ng it because of his splendid characteristics. And while I say this in closing in the session for this morning- we will terminate now, and we ill meet again at 2 o'clock-I do want to say to you, Mr. Georg , w appreciate your coming here, and we are grateful for your testi n ( Whereupon, the subcommitt e m eting recessed, to reconvene at 2 p.m., the same day) AFTER 0 N SESSION Present : Representatives rre t, Mrs. Sullivan, Moorhead, Stephens, Reuss, and Harvey. Also present : Representative el ner of the full committee. Mr. BARRETT. The committe ill come to order. The first witness this afterno is oing to be Mr. Glenn E. Bennett, executive director, Atlanta egio Metropolitan Planning Com- mission. Mr. Bennett, will you come o w i'd, please. We are certainly glad to have you here this afternoo . lthough you are a stranger to me, I know much of you. You h v a very, very good friend on our full Committee on Banking and C r en v, and through him we have. heard many good things about you. ii i am quite sure he would be proud to introduce you to this corn i te . And it will go in the record and be read by everybody. Charlie, I would like for u o introduce your good friend, Mr. Bennett. Mr. WELTNER. Thank you, r Chairman. It is my pleasure to introduc . a the. first witness Mr. Glenn Bennett. Mr. Bennett is the director of he. Atlanta Region Metropolitan Plan- ning Commission, which is, as t.h name indicates, a regional commis- sion serving five counties in t. e tianta metropolitan area. Mr. Bennett has served his e ion very well, and he has served the country well in the interest h s shown in urban problems. I might recall to some of colleagues Mr. Bennett's testimony here in 1963 on what. was th n alled the Urban Transportation Act of 1963. He presented to th f 11 Committee on Banking and Cur- rency the plans and projecti n of a major rapid transit system for the city of Atlanta. I belie e hat was an impressive presentation. And I am very happy to p es nt him today to give his views, and those of ARMPC on this le isi tion. Mr. BARRETT. Thank you, M . Weitner. Mr. Bennett, we want yo t feel at home here and just be one of our family. You make yo r resentation in your own way. If you desire to read your stateme t. n full, you may do so, and at the end we will ask you some PAGENO="0388" 382 DEMONSTRATION CITIES A URBAN DEVELOPMEN STAT1~MENT OP GLENN E. BEN1~TT, EXECUTIVE DIR OTOR, ATLANTA REGION METROPOIJ1~AN PLANNING OOMMI SION Mr. B~NErr. Thank you, Mr. Chairman, very much. I appreciate Congressman We1tne~'s introduction, and I m very happy to be here before this commit*. My name is Glenn ennett, and I am the executive director of t1~e Aflanta Region Metr politan Planning Commission, Atlanta, Ga. I also act as secreta to the newly crested Metropolitan Atlanta Rapid Transit Autho `ty and secretary df the Metropolitan Atlanta Council of Local Gove ments, which was ~rganized in 1964. I am grateful for the opportunity t~ appear before you in upport of H.It. 12946, which provides incentives in the form of gra ts for properly planned development projects in metropolitan areas. This I am certain is in the public interest. The emphasis is on met opoli- tanwide comprehensive planning and coordinated program ng of public improvements in metropolitan areas. In effect it pro ides a bonus for coordinated capital improve~nent programing thro ghout an area, and it elevates metropolitan p~nning tO a point close than it has been in most areas, to actual dec~sionmaking by local g vem- ments. It piiovides encouragement for tl~e translation of metro litan plans into ~u~tion, and the grants propo~ed under this bill coul also make it possible for certain projects stillled for lack of funds o go forward. We are all hard pressed for money for open land, ewer facilities, mass transit, and airport facilities. Every Federa aid bonus helps and in this case funds are contingent on sensible plan ing. I would like to comment briefly on the progess we have m e in metropolitan planning in the Atlanta ~rea where we have h d a metropolitan planning commission for n~any years~ It was fo ed by local initiative long before most of tl~e current Federal aid ro- grams were created. Good use of the so4lled 701 Federal plan ing assistance has been made ; since 1955 we ht~ve received grants tota ing approximately $372,669, including those ~projects now in pro ess. Other applications are pending which amOunt to $110,372. We h ye successfully employed the funds in studies related to rapid transit, open spaces, housing and building codes, ecOnomic and social resea h, comprehensive land use planning generally, and airport planni g. I would like to point out that our commission has always had elec d officials and heads of governments as a part~of its membership. is, I think, is important. We have considere4 our functions to be ( ) regional research ; (2) long-range planning~ (3) planning assistan e for communities~; and (4) coordination of l~eal government activit Our efforts have successfully brought int4 being a council of bc 1 governments, a metropole, which ~ is an area*ide organization of la - enforcement officials, and the Metropolitan Atlanta Rapid Trans t Authority to implement rapid transit plans. These are action age - cies ; they are metropolitanwide and capable of assisting implement - tion. They can deal with regional problems that flow across jurisdic tional boundaries-traffic, urban transporta1~ion, pollution, and la enforcement, for example. The degree to w~iich we have been abl to influence land use, highway location, and ~øther regional develo ment has varied f*om time to time but it is safe to say, I believe, that we have been moderately successful over the years. PAGENO="0389" DEMONSTRATION CITIES D U BAN DEVELOPMENT 383 Implementing regional plans thr gh ut the many jurisdictions is difficult, to say the least. It would p e to me that H.R. 12946 would assist in this respect ; it encourag t a which some of us have been trying to do all along, and it rewa s 1 iii governments for compre- hensive planning and coordinatio I have long been in favor of so f rm of regional referral to a metropolitan agency for those c it 1 improvements which have regional significance. This bill p o id an incentive and could very ~ve1l upgrade significantly the de is on aking processes in a metro- politan area. This is indeed the je tive toward which we are all striving. I am glad to say the Atlanta re ~ as the organizational facilities to make good use of the provisions f ths bill. Good foundations have been laid for areawide coordinatio , an we are experienced in metro- politan planning. Our local gov ents have supported and used metropolitan planning for a long t m without any particular incen- tives from Washington. This bi 1 o ld increase its effectiveness. Mr. Chairman, if I may I shou ii e to make some remarks about title III, "Urban Mass Transpo tio ." Not so long ago, as Con- gressman Weitner mentioned, I h th honor to appear before several of you and discuss this subject pro t the passage of the Mass Trans- portation Act of 1964. We no h e, as I mentioned earlier, an agency with the legal authority t nstruct and operate a regional rapid transit system. Plans de o ed in 1962 with 701 assistance were used as a basis for a recent 7 p blic facilities loan request in the amount of $1,100,000 for prelimi r engineering and further refine- ment of plans. We are now tol t t the money is not available to meet this request, although the p ication is in order and all the earlier planning provides a sou b sis for this stage of our transit development. We have been tol ave "done our homework well," but that funds under this prog a re short. I mention this disap- pointing situation in the hope t at you gentlemen may be able to remedy it sometime soon. Atlanta is starting from scrat to build a new rapid transit system. We are about to start on engi en g a 36-mile line that will cost probably $300 million to constr c i 1969 or 1970. The mass transit bill as it stands now doesn't h 1 s much, since nowhere near the amount of the funds we need r y t in sight. In spite of this our local governments and the Sta g vernment are going bravely and confidently ahead with prelimn steps. If some assurance could be given to cities like Atlanta t t s bstantial assistance can be forth- coming over a period of years ur present dilemma would be eased considerably. The present authorizations nd appropriations under the mass transit bill help only the sma 1 cit es that need buses and the large cities that are extending exis i g ransit systems. For those of us trying to create new systems e nds are totally inadequwte ; and with traffic congestion rapidly ing worse our plight is dramatized daily. The case for enormou u lic expenditures for transit grows stronger and our planning f r ca s repeatedly turn out to be too low. The same could be sai , fo that matter, about our air traffic in Atlanta as well, but that is a ter for another day. PAGENO="0390" JiEMONSTRATION CITIES AN ~ URBAN DEVELOPMEN Mr. Chairman, the many Federal 4id programs affecting rban de- ve1opmE~nt represent a ht~ge investn~ent in our metropolit n areas. The quality of the administration ~nd management of , t ese pro- grains at ~the Federal, regional, andliocal levels has been i proved noticeab1~, it seems to me, in the pa~t 2 years by those few require- ments foricoordinated planning whi4h now already exist. his bill goes fnitl~er and provides what I believe `to be workable an appro- priate prc*~edures for stimulating a idind of urban development that can be coi~sistent with comprehensive~ metropolitan planning I should like to file copies of `this st~1tement with you, toget er with a publication entitled, "The Atlanta ~egion Metropolitan lanning Commissio~ii-What It Is-What It Ddes." And I appreciate being here. I sh4l be glad to reply to a y ques- tions. Mr. BA1t~u~r. That will be placed i4 the record without o Section. (The m'a~eriaI referred to by Mr. Beii ett follows:) 384 PAGENO="0391" PAGENO="0392" 386 - ~EMONSTRATION CITIES URBAN DEVELOPME PAGENO="0393" DEMONSTRATION OthES DEVELOPMENT PAGENO="0394" 388 DEMONSTRATION CITIES This is the district served by the Atlanta Region Metropolitan Planning Commission. PAGENO="0395" URBAN DEVELOPMENT 389 PAGENO="0396" 390 DEMONSTRATION CITIES AND dRI3AN DEVELOPMENT PAGENO="0397" DEMONSTRATIO URBAN DEVELOPMENT 391 I I i ~ ,` lu ~ ~ ,~ , `~; "I,, ~~I:~; `;~,~``~ ` ~, ~ ~ ~ ~ ,~, : fl;,' : :: ~ `~ ~ ~ ~ /~ I~:/ ~ ~ ~ ti/I ~ I ~ ~ ~ 1/ ~ `~ f ~4!. /f/ ` ~ ~I j/ ,~ I/V i~iI~ ~ ~6" ~ , , / / // ~ ~ // ~ / ~ ~ ~ ~ / ~ ~ I ~ ~k //J~/~J/~flI/ ; /~/ / / ~ ~* /~ // ~ / ~ $ 4 sitW~ s 4j~i* ~ ~e ~ ~ ~ ? ~ ~t:~::~~ ;:~i~~ / / / /P$~øfr4~t~~ ` ~ ,~ aø~, ~ $eo~it~ / ~ //~/// ~ ~t ~ ~ ~ ~ ~ "~~/,/` ~ ~ ~ /~,//~ ~ / ~ ,! ,,~ ~, ,/, ~/,,/` ,~ ! ~ ~// ,////~ ;i' PAGENO="0398" DI~1~ONSTRAPION CI~IES AND ~EBAN D~VELOPMENT AN EYE TO THE RJTURE Projected Population of the AtIIIta~Reg1On 1960-2000 4 PULATION 1q00 1910 1920 l9~O 1940 1950 1960 ~7O i98O~ 1990 2000 GEOMETRIC 44OOO,OO~ ~,ooo, UO(~ 2 dOOOOI ! / .~ `4 ~1 I 392 Iv RRITH METIC 1,000, ~, n 1900 1910 1920 1930 1940 1950 1960 19 0 1980 1990 2000 *SELECTED FOR PLANNING PURPOSES. PAGENO="0399" I DEMONSTRATION CI~IE'S ~ t~ URBAN DEVELOPMENT THE ROLE OF THE C SSION In a pulsthg met~opo~itan ~ e~ ike the Atlanta Region, political boundái~iesIbeco è i~1istinct. The newly arrived suburban dweller may be u ~ rØ hether he lives within the ,, city" or without . ~4e ma I e * gnorant for some time of which county he ~4ill vote i o pay his taxes in, or what agency he should/ call if i ~ rbage is not picked up. The central cit~ an4 the ~ i~ both face hard decisions as to public reven~es ~nd p ~ i~ ervices. The cexitral city fights to revit~liz~ its ~ ~ to alleviate its traffic congestion. Th~ suburb ~ be t by increasing demands for services from a~i ev~r in ~ asng population. Where there are/ such pre s r~cj problems, both distinct and shared, a metro~ol~tan a e d viOusly needs an agency to: Maint~irx ~ res ~ c1~ rogram; Make omp~ehen ~ e ~ ans; Promo e t~amwo k a~ coordination~ Give ssi~tanc ndl advice to local units. The agency pro~riding th $ ~ rvices in Greater Atlanta is the Atlanta Re ior~ Metrc~p l~ an Planning Commission. 393 / PAGENO="0400" 394 DEMONSTRATION CITIES AND ~RBAN DEVELOPMENT PAGENO="0401" DEMONSTRATION ~IT~E'S DEVELOPMENT PAGENO="0402" 396 DIIONSTRATION ctTrE~ AND D1~WELOPMENT PAGENO="0403" I Inter- government SOME Population Building Economy Airports Highways DEMONSTRATION Cfl~IES A ~ URBAN DEVELOPMENT 397 HIGHL1GI~1S OF P NING The ~omu~Lssio stlniates . the region' s current popu~Lation ev r ~ ar. It also issues reports on c~iaracteri t c~s of the population. A t~o-y~ar a t~ y ~ housing and building code ado~tior~, ad ~. i~ ation. and standardization is 1~ein~ con ~i t~i. Housing characteristics are/rep~rted ~ n~lly. Many ecbnorni ~ iSa have been published and oth~rs are b j g i onducted. Subjects include eco~iomic pro i e~ land requirements, and the ~utloo)ç for eS5~ ~h and devei~opment, for ex- ample. A ~wo-~rear t d~ f airports and related fa- ci iti~$ in ~ e/ ~ gion arid long-~range needs fo civil ~ ti n is being conducted. Th Co~amiss~o ~ the agenc~!= chiefly responsi- bl f~r coo~dix~ ion of local planning with the Si~ate ~q s~t Department in regard to f der~l-ai ~ ic~ ays, including staff work for t a T~chni ~ ~ rdinating Committee. A com~rehe ~ v~- urvey and a program of rapid t ans~.t ha e be7 completed and the Commission i no~ con ~ na /With aiding in iatplementation~ T e regions i~ d for nature preserves and re- l~te~ outdc~o~ creation facilities has been s/tu8i~ed a a th Coraiiission is now working to i4mpl~ment ~ e ogram it has suggested. ~he ~ommi ~ ott acts as a clearing house for in- orm~tion c nc rning water supply and removal f w~ste. Metropo i ~ Council of Local Governments as been c~r ax~ zed under the Commission's aus- ic~s~ ~ i;~. be of invaluable worth in dea~ing j i~i oblems common to the region. Transit Parks Water PAGENO="0404" 398 DEMONSTRATION CiTIES AND RBAN DEVELOPMENT PAGENO="0405" DEMONSTRATION CIT~ES DEVELOPMENT PAGENO="0406" 400 DE~IONSTRATION CZTIES AND t~RBAN DEVELOPMENT PAGENO="0407" DEMONSTRATION ~ITXES DEVELOPMENT PAGENO="0408" 402 DEMONSTRATION CITIES AN1~ URBAN DEVELOPME Mr. BARRETr. I have just one short~question here that I w uld like toaskyon. I want th thank you for your very fi~e statemnt here this a ernoon. Anyone &*ning from Atlanta is alwt4ys welcome here. We o have some very line members from your ve~y great State. Charh. is one of our mos1~ knowledgeable thembers on~the full Banking and C rrency Committee~ ~ He might want to ask you one or tw~ questions on mass tran porta- tion, and when he desires we will give that opportunity. First, I do want to thank you on behalf of the subcommit ee for your excelMnt and informative statem~nt. I would like to a k you the same question that I asked Mayors 4~Javanagh and Lindsay arher this week. some people seem to have th~ fear that the Federal ordi- nator which \t~he bill would set up for eac~i demonstration city pr gram would be some sort of a Federal dicta4or or czar. Of course I do not think this is so. And I do think the t~ill makes this very clea , that they should hot have any fears of a dicbatorial power by this c ordi- nator. I wo*ld like to ask you two questions : First, would th peo- pie who have such fears feel better, do you think, if we rename the Federal coordinator or the Federal official as a local coordinator r ther than a Federal coordinator? And second, do you think the idea o~ making the services of a coordinator o?tional to the participating .~ities would be more ac ept- able in Atlan~, or any city if they had ~he opportunity to md oath who they think would be the most effective person to work bet een their respecth~e city and Wtishington ? ~ Mr. BENNmIF. With respect to the first question, of course, I w uld think that any fear of a coordinator becoihing anything like a di ta- tor would be ridiculous. But there are people who speak against ed- eral aid for fear of having some strings attached. For that reaso , I would emphasize the word "local" in the ti~le somehow. Now, the question of whether or not it s~iould be mandatory is ne that is very interesting. It seems to me tl~iat all metropolitan ar as need much mor~ information and much mo$ coordination in Fede al programs than `c~e have had up.tó now. * W~have at the city and S to levels discussed$eriously setting up such a flb ourselves. But I thi k it would be bet4er if the Federal Governr4ient did it, and I wou d assume for political reasons it might be mere expedient to have t e provisions of the bill provide for an optionallocai choice. Mr. BARRI~rP. Thank you very much. Mr. Weltner, would you like to ask any questions? Mr. WELTNER. Mr. Chairman, if time peñnits, I have a few que - tions. But I would defer to the members of 4he subcommittee. Mr. BARRETT. I am sure they will give y~u a chance to ask you questions. . Mr. WELPNER. I do have some questions ~ would like to ask th witness. Mr. Bennett, thank you for your usual con~ise and clear statement. I was interested in two points. You have submitted to the Office of Transportation a $1.1 million request under section 702. And as you have stated, that request has not materialized because of lack of funds. I would like to know whether or not, consistent with sound procedures and with the conservation of money and resour4ee, it would be possible PAGENO="0409" DEMONSTRATION CITIES D RBAN DEVELOPMENT 403 to proceed at this point on a sub t n ially lesser amount ~ Is there one particular phase of the matte in uded in your total submission that might be funded and on whic o might proceed at this time? Mr. BENNETT. Yes, sir. It wo ~ possible, and it would be bene- ficial to do certain of the jobs p o o d in the bigger segment sepa- rately. So it would be possible fo s t work effectively with a smaller sum. But it means that the pre o st uction period would be length- ened and prolonged somewhat. e had envisioned spending some- thing like $1.6 million or about 2 2 or 3 years in this particular period when we are precising the costs, al'nements, and the characteristics in getting a segment ready to pr s n to the people for final approval in case it costs additional local t xe . And in order to do this you have got to have a lot of enginee i g. Our last plan was made in 1962. A great deal of growth has take la e since then. And we believe the basic premises that existed then s ill exist, but we think that we have got to update our plans. We ha g t to investigate all kinds of alter- natives that different people in e c mmunity may be interested in. So this is a big job. We ha g t to take borings, we have got to make surveys, and we have got t g t down to real engineering. Mr. WEIJPNER. We also kno , do we not, that somewhere along the line, before the cars start movn people swiftly and economically to and from work that $100 milli n of local money must be acquired and invested? Mr. BENNETT. Some large u . We are not certain what that is. And of course, the amount d p n s on what assistance we get from the Federal and State. And i o seems that we will get it from the State. Mr. WELPNER. I think tha i t e Matterhorn of this entire matter that will have been glimpsed. Mr. BENNErr. Certainly. Could 1 elaborate a little o h t I said earlier ? We are going slow at this stage because of the f c t at we do not see the big money, and we do not want to waste litti o ey at this particular time, although we must be tooled up ready t o ~n spite of whatever happens eventu- ally. And we do not want o w ste anything. So far the authority which. came into being in J ua y of this year has not really spent much money, almost none. d think this has been wise up to now. The overall picture, thoug , be omes more clear in favor of rapid transit eventually as we do re elated planning work. Just recently our economists have told us o o her planning purposes, in other plan- ning projects, that between n w and 1983 we are going to have about 15 million additional square f et f office building constructed in down- town Atlanta. This is in k e i with what has happened in the last 7' years. This is tremendo . here are they going ? So we need now to do a lot of additio 1 lanning that is closely related to the downtown rapid transit s s e . This is awfully important, and I have not been able to get t is point over to some of my friends in Atlanta yet. Mr. W~LTNI~R. I hope r appearance might assist in that, Mr. Bennett. I have the distinct imp io that there are great unused resources, not only in our area, but t r u hout the country, simply because we in Congress passed these wo er ul bills up here and nobody back home PAGENO="0410" 404 D~LONSTRATION CXP1ES AND ~ tT1t~BAN DEVELOPMENT ~ ~. knows ~rh~ we have done. For inst~4ce,. we passed a bill la~t year called the Solid Wastes Disposal Act. ~ And I voted for that b~1l, and I am all for the disposal of solid wastes. But I doubt very se~iously if many municipalities have the slightest idea that there is such\a pro- gram, and whether or not it is being fui*led, they have no conce t that they might receive some real help in ~ome serious public pro lems. What is your opinion of the bill which pi~ovides grants for urban infor- mation centeFs~ Mr. BE~N~rr. Mr. Congre~,sman, thatlis very interesting to m , and I meant to co~nment on it, although I did ~iot. This, to iij, would provide what we ~ave had to dig out fo our- selves in a rather awkward way by tw~ or three different ag ncies trying to keep up with the Congress and t~'ying to get before the p ople the assistance which is available to them. I think you will find that I have a letter~ in the coming Sunday aper in which I point out how little we have itsed the planning assist nce, the 701, outsiçle of the metropolitan pla~ming assistance, whic has done very well. Of the individual governments of the five cou ties around Atlai~a oily one has a 701 project,~and yet they are all eli ible. Of the cities ~utside of Atlanta, 43 mun~cipa1ities, only 4 or 5 ave used 701 assist~ance. This is in an area w~iere we have been tryin . to improve plannbg and where people want ~o improve planning. nd I cannot quite understand the reluctance~ to take advantage of the Federal programs, although as you point~out, one reason is the lack of understanding. The establishment of ~n information center ith 50 percent Federal assistance, a~ you indicate here, would be a pro ect which my planning commission could very~well undertake. And this could be tied in with something like a sen4inar in a large confere ce such as we had last year when you gave tha4 magnificent speech at he Biltmore HoteF about what had been dons And this had a gr at attendance, a~ ~ou know. And I think ~~could have a project of great value to the community which would include both the infor a- tion center and ~the development of furthet meetings, informatio al meetings such as that. Mr. WELTNER. Thank you, Mr. Chairman. That is all, Mr. Chairman. Mr. BARRErr. Mr. Moorhead ? Mr. MOORHEAD. Thank you, Mr. Chairman~ Mr. Bennett, I had occasion to visit your c~nmunity just a year ag And I certainly s~w that it is an alive and gifwing community. An I think it is fort4nate that you are doing so~nep1anning so that yo do not have this t~np1anned growth that som~j of the older cities hay I come from tb~ city of Pittsburgh. And ii~ our county we have 12 separate municipa~1ities. And we h~ve not yet~found the key to gettm them to work together. I am interested, therefore, in your counci~ of local governments. How is that established ? Is it voluntary, on-ror is it by statute ? Or how does it operate ? ; . Mr. BENNETP. Mr. Moorhead, this is a very l~osely organized volun- tary association of counties and municipalities ~y~hieh was done in 1964. The metropolitan planning commission calle4 ~ meeting of all the governments askii~ if they would be interest$I in going further in forming such a co~tjncil. And they expressed n interest. And then PAGENO="0411" DEMONSTRATION CITIES A D RBAN DEVELOPMENT 405 we wrote bylaws, and we elected o ce s. And we have three or four standing committees. It does n t ave any power. It is purely voluntary. Its purposes are to bri g bout harmonious action amon the governments, to provide a plac f r exchange of information an to provide opportunity and mecha s for the governments to coordi- nate their activities and work toge on common problems. Now, it has not gone very far ye f st. But the idea is sound. And I believe it has projects for th f ture which will be extremely effective. As a result of this, the best thin e have done up to now has been the establishment of what I me ti ned in my prepared statement, Metropol, which is an organiz ti of law enforcement officials throughout the six-county area. T is did three things immediately. It increased the efficiency of coin u ication among police forces and sheriffs where communications h d een bad. We put in a teletype system which paid for itself the fi st month by getting information on stolen cars and catching criminal ac oss county lines and among cities. The second thing, we establish d fugitive squad, which is a metro- politan squad of officers contribut ci o by several governments, provid- ing a chance to use teamwork in t ~e apture of criminals and searching for those that are known to have co e into the area, and so on. The third thing we did was o evelop a good training program. Within a few months we gave a hu dred hours of training to each of over 300 police officers who woul t have had that training had it not ben for MetropoL This was tre dous. And the FBI agents in the area cooperated and confirmed t value of this, and have urged us to continue with it. At the same time we have ha etropol going, only since last June, the crime rate in Atlanta has g e clown. We cannot take all the credit, but I think that some of t oes to Metropol and to metropolitan coordination and cooperation i t is business of fighting crime which goes across jurisdictional bou da ies. Mr. MOORHEAD. Mr. Bennet , re you in a position to c~omment on title II of this act which de 1 ~ th new communities ? Do you want to state ~ you favor p ose the enactment of title II ~ Mr. BENNETT. I am no a 0 ty on that subject. I generally per- sonally favor it, but I wou p efer not to go into much detail, be- cause it would be purely a er onal opinion. I am not working in that field myself. Mr. MOORHEAD. Have yo st died and do you care to comment on the demonstration cities bi Mr. BENNETT. It seems t e hat-I have not studied the bill care- fully, but it. seems to me t a t' ere is a parallel between this bill and the demonstration cities bi 1. nd I notice that there is no likelihood of any conflict or overlap. o me this is an exciting possibility, and I think it is srmething th t e are coming to in this very fast chang- ing urbanization period. Mr. MOORHEAD. Thank u, Mr. Bennett. Thank you, Mr. Chair Mr. BENNETr. Mr. Ste en ? Mr. STErriENS. Thank . U, Mr. Chairman. I want to apologize fo ei g late.. We stayed here until 1 o'clock listening to another fell w G orgian and I could not get back quite PAGENO="0412" ~ ~ 406 DEMONSTRATION CITIES AND' TJRBAN DEVELOPMENT as soon as I expected. But I certainly appreciate you corn ng and being before the committee and explairnng the great work bei g done in Georgia and in the metropolitan are~ in and around Atlant Mr. Chairman, we had a very finek program sponsored 1 st year by the metropolitan group in Atlanta 4sking that the member of the Georgia de~egation who had districts th~t bordered on the metro olitan area get tOgether to discuss their mi~ua1 problems. Congr ssman Weltner and Congressman Mackay took the lead in that becau e they represent the core of the metropolitan airea. My district comes ithin 25 miles of the city limits of Atlanta. And I am very much mt rested in municipal things. As I said, on the rapid transit bill, it d es not directly affect Athens, Ga., but I want to have my constituents et in and out of town when they come to At1a~ita. I appreciate your coming and giving ps the benefit of your e pen. ence to the committee. Mn. BENNETt Thank you, Mn. Steph~ns. I want to say that we appreciate your~ coming to our metrop litan conference last year and giving such a fine~speech. Mr. BARREI'r. Mn. Reuss ~ Mr. Rirnss. Thank you, Mr. Chairman. That was a first-rate statement, Mn. B~nnett. And we appre late it. I noted particularly what you had to saiy about the dynamic thngs Atlanta and the Atlanta region are doing about rapid transit. nd I want you to know that this committee is keenly conscious of the eed for some breakthroughs in rapid transit. 4nd 1 would like to get . our opinion on a bill that was cosponsored b~ some 25 Members of the House as well as some 15 Members of the S~nate. Your distinguis ed Atlanta Congressman, Mr. Weltner, is oni~ of the cosponsors. I is now being offered as an amendment to thi~ housing bill. And I ill just read it, because it is very short. This amendment would direct the Secneta~ry of Housing and Un an Development by next year to come back to th~ Congress with- a draft program for research, development, and demonstration o~ new syste s of coordinated urban transportation that will ca ry people and goods wit in metropolitan areas speedily, safely, without pollut ng the air, and in a mann r that will contributeto sound city planning. The amendment toes on to say that : The program shall aim at breakthrough results w~ithin 5 years of its approv 1 by the Congress ; it ahall concern itselfwith all asp~cts of new systems of urba transport, for metropolitan areas of various sines, iz~c1udlng technological, fina - cial, economic, governmental, and social aspects ; it shall provide national lea - ership to efforts of States, localities, private industily, universities, and founda tions. I am wondering if you have an opinion as tq the desirability of suc an amendment. Mr. Bi~NNETF. I believe it would be very tdesirable generally. I believe there has been a great lag in research ir4 the field of transporta- tion, particularly urban. transportation. I tl~ink this is one of the biggest problems the country faces right non, because of the speed with which we are urbanizing, and the way ~n which population is growing and producing traffic in metropolitan areas. The way in which the family income throughout the country is going up leads me to believe that there will be more automobiles, more pres- PAGENO="0413" . DEMONSTRATION CITIES A U BAN DEVELOPMENT 407 sure for new houses out in the subu s, nd that we are coming to the point where nobody but the Fede a 0 vernment can cope with the problem. That is the subject of a w e peech in itself, sir. Mr. REuss. You have done very e 1. I want to commend you, too, o e very handsome brochure that you have given us on the work of h tianta Regional Metropolitan Commission. I am a little saddene o ee on the last page a beautiful new baseball stadium, but I unde s an that your work is concerned with the planning of the stadium r th r than with what team plays in it. Mr. BENNErr. This is a rathe hr'lling subject in Atlanta, now that it has almost been settled. Mr. REuss. Thank you, Mr. Ch& a Mr. STEPHENS. Does your ame m t that you proposed on rapid transit include transportation t an from the baseball stadium? Mr. REuss. I am afraid I woul av to pass that u~. Mr. WELTNER. Would it incl d t e rapid transit of a baseball team from one city to another? Mr. REuss. Two-way rapid tra s t. Mr. BARRErr. Thank you, Mr. en ett. And thank you for corn- ing here this afternoon. All ti e ha expired. The next witness we will hay s arold F. Wise, chairman, Na- tional Legislative Committee, er an Institute of Planners. Mr. Wise, will you come up a ake yourself feel at home. We are glad to see. you here. STATEMENT OP HAROLD P. E~ CHAIRMAN, NATIONAL LEGIS- LATIVE COMMITTEE, AME C INSTITUTE OP PLANNERS; ACCOMPANIED BY DAVID R EY, DIRECTOR OP INSTITUTE DEVELOPMENT Mr. WisE. Mr. Chairman, I ye with me David Hartley, the di- rector of institute development he American Institute of Planners. Mr. BAmiErr. We are glad o ha e you and we are glad to have your associate. Of course, w o esire to make you feel at home here this afternoon, as we try t a e all of our witnesses. We want to give you the same courtesy t t e have extended to all of them by permitting you to read your t te ent completely, and then if we have any questions we will ask t os questions after your statement is completed. Mr. WISE. Thank you, Mr. C ir an. Mr. Chairman and disting i e members of the subcommittee, I am here representing the Âme i an Institute of Planners, which is the professional society of city an egonal planners in the United States. Its 4,200 members account for t e rofessional planning staffs in city, metropolitan, and State pla ir~ agencies, and in many housing and urban renewal agencies. th r members of the institute, in pri- vate practice, serve as consult s o ]ocal, State, and Federal agencies On problems of urban growth. T us the profession is well qualified by experience and interest to te tify on matters concerning urban development and the Federal re p sibility. PAGENO="0414" 408 tEMONSTRATION CITIES AN~ uRBAN DEVELOPME ~ DEMONSTRATIO~OTflES ACT Mr. CiLirman, we endorse the ad4inistration's concept o a locally prepared ~ and scheduled program fr rebuilding or restori g entire sections and neighborhoods of slum ~nd blighted areas. T e magni- tude of poverty, crime, unemployment, and deterioration in parts of our great central cities requires a major commitment from t e Amer- ican people and from the Federal Government. It is also undeniable that Federal pijograms have not hereto ore been sufficiently coordinated for maximui4 impact on the urban roblems we face, ri~r has local leadership and~private initiative, as t e Presi- dent's mes~age of January 26 so well 4ates, been sufficiently m bilized. We look f* new ideas from the propos4d demonstration cities rogram. Our pri~nary concern is th~~ dichot4ny between parts of tI is legis- lation-anci this is symbohzed by thc~ir titles~-Demonstratio Cities and Urban. Development Acts. It is a~ if the administration w re pro- posing two separate types of programs~or two different constit encies, the older central cities and the growing suburbs. We object to this false demarcatio4, and the President's essage put the real situation quite succinctly : ~ The geals ~f major Federal programs ba~4~ often lacked eoh~sivenes . Some work for t1~ revitalization of the centr~4 ~ city. Some accelerate s burbari growth. S~*4e unite urban corniniwitie~. ~onie disrupt them. In other ~vords, themetropolitan region is a single economi entity and the boilindaries between city, cour~ty, and suburb are be oming less real and less important. We are si~tggesting that a "demonstr~tion cities program" or the central city alone will be inadequate. A metropolitan area ust be viewed as a whole-central city and subi*b. These are interdep ndent parts. When your distinguished subcomm4ee, and that of the enate, develop a coordinated omnibus bill, we pope the artificial disti ction will be remo~ked. I We do h~i~re several specific cornment~ to make on the legis ation before us. One of the requirements pro~ides that eligible city d mon- stration programs be "consi~tent with ~omprehensive plannin for the entire urban or metropolitan area'~ (see. 4(c) (5) ) . We hink this is a weak statement. Certainly it is important that pr jects must not only be consistent with the plan, but also and even ore importantly, the program mist be devel ~ ped as part of the co pre- hensive planning process for the entire ~ ~ etropolitan area. Th re is a difference. As a concrete example, city officials who must deal with the State higbway department on locati ~ ii of highways realize that it is not suffi~ent to have the State high ays consistent with the city plan. This i~ because highways are suc an important determi ant of urban foi~iri and of the future of our ity that the highway ust be taken into consideration from the ye y beginning in deveAo ing the plan. This is certainly true equally or urban renewal and nti- poverty program's. The comprehensive metropolitan plan i self would `be a hollow `shell without the contribution of these major d ter- minants of the future urban ~nvironment.~ Section 4(°> (5) would, in our opinio~i, better be phrased, `the program is co~isistent with, and develop as part of, the corn re- PAGENO="0415" DEMONSTRATION CITIES ND URBAN DEVELOPMEWI' 439 With this bridge from phi~oso~hy t eti n ready for use, we look forward to the disappearance o~ the cri~pli~ig in o si tency within a Congress that, on the one hand, authorizes Great $oci~ty p o r~ s and, on the other hand, withholds the funds to make them woi~k. Acion area B We must help to evolve r~ew orga I at~ nal structures and interrelationships for all of the governmental ~tge~ieies, ~ ~ dü tries, institutions, and citizen. organi~ zations that function to reac~i urban de elo merit goals, Federal Governmeiit 8tru~ti~r~,-T~i i~ Department of Housing and Urban Development is essentially ~ an e1ev~it ou of the Hou~1ng and Home Finance Agency. It inherits natibt~al housi~i a d urban development programs con- tamed in a myrald of separate pie$s of egislation accumulated over 30 years. To mold the many selarate parts of ~h any separate agencies, laws, and regu- lations into a cohesive who~e is go~n~ 0 t ke time, serious study, and ingenuity. Therefore, the association belie~Tes t*a t~i atructure of the Department must be kept fluid and fI~xible to ~cco*imo~ e t e shifts and changes that must come over a protracted period of time. As b sis for the decisions as to which sepa- rate parts to combine and ~rhic~i to 4~ ide or eliminate, NAURO urges the èodifl- cation of all housing andj urban d~ elo ment statutes and the assembly and analysis of their legislat1s~e histor~ nd of the ~dmlnistrative regulations do- veloped to put them into eff~ct. ~ ~ ~ The association also bel~eve~ tha~ hfr structure of the Department must be geared to the machinery of local got!? n~ ent and local operating agencies, them- selves coping with the ~ n'e~d fbr ch~t ge ~tntcture. NAHRO urges, therefore, ~ that Secretary of the iYepartx~ient ~e it a permanent advisory couflcil repre- ~ sentative of national grou~~ dI~ectl~ c nç med with the operation of housring and urban development progra~fls n~nd c~i e~ egularl3~ with this council in the struc- turing of the Department and in th~ o~ ulatlon of regttlations and new k~gisla- tive proposals. ~ Further, once the fuuct~ons o~ I~ ~` have been reassigned in the new De. partment, NAHRO urges thal~ the ~ si~ ant secretaries concerned with spec~fi~ programs set up procedui~es 1~or có~i in ing the present practice of the HIIFA constituent agencies of me~tin~ reg~l rl with, and consulting with, local operat- lng officials on the forthula~ionof fle~kr F~ eral policy and procedure. We recommend further tha~ the ~ epartment recognize the administrative principle that the degree ~f Feder~i sup rvision and control should bo ecaled to the experience communtt~es ~iave d I the execution of federally aided pro- grams : lt* should be pro~ortionat ~ l~ s for those with long `and responsible experience. Such commniiiti~s sh u d b encouraged through various incentives, to exercLse maximum inventiveness a d conomy, rather than be directed to HEW to lines of federally impo~d u~iffor pr~ edures. MetroDoZ'i~tco~ area strubture.-T rtt id expansion of housing and urban de- velopment programs over `the past ~ ca e has produced a diverse, uneven growth pattern both `in geographic areas o per tion and in functional organization. In the last few years, emerg~ng éonco ii ~i the problems of urbanization that over- lap the bounds of vai~Foi~is politic 1 in isdictions has created a new functional unit-the urbanized regb~n-~whic n any cases crosses State boundaries and ~ . encroaches on the exist1r~g frame o 1~ f local gov&mnment units. NAHRO recommends that the d i~O y Commission on Intergovernmental Re- lations be asked to take on s~ecla s$1 nments In the field of the administration of housing and urban de~relopme t r~ rams, calling on NAHRO, the U.S. Con-, ference of Mayors, `the 4merican I sti ute of Planners, the National Leagml of Cities, the National As~~cial~ion ~ o nties, the Council of State Governments, among others, to help i~1en1~ify t e pr sent pattern of functional relationships among the go'vernmenta~ units r p ese * ted by these associations in the area of housing and urban deve~opn1ént, th he goal of proposing a system for coordi- nating the functional interests invj~l ed ` ` ~. NAHRO further reec4nm~nds th t he Commission analyze local, State, and Federal' laws, which, in many ir~s anc s, place inhibitions on carrying through urban development prog~am~ on ~n s ale `broader than a single community, and make recommendations' for chan~es t at would facilitate metropolitan area or regional area operation, whenev4~r cir umstances dictate the need. S~tate ~truet~re.-Sin~e very fe S ates have official bodies concerned with housing and'urban deve~opn~enit, .~ a AHRO's recommendation that such bodies be created at the State ~eve~ ove t ~ ext biennium, with responsibility (a) for encouraging metropolitan, ~gio a , c untywide, or similar areawide operations I PAGENO="0416" 410 DEMONSTRATION CITIES AND LSRBAN DEVELOPMENT where appropiiate ; (b) for exploring the nee~1 for statewide minimum ousing staildards, w1l~h concoitiltant authority to ir4~iire their enforcement : c) for exploring oth~ areas of need f~r statewlde~tandttrds ; (d) for under aking, where feasib1~,1 direct financial aid to 1oca11tie~ i~ supplements to Fedora hous- ing and urbali development programs ; (e) f~r encouraging State educ tional institutions to become aggressive partners in t~rban development through teach- ing, research, and leadership. ~ Local structure.-Local governmental agencies : It is the NAIIRO vie that there has never been a time of greater opportu4ity-or greater need-for ulling together the related interests of local agencies that work on various asp ts of urban development. The technique, however, Is still to be found. It ill be NAHRO's objective In the coming, biennium to~ follow all of the patterns being used, in the expectation that . a recommended tstructure will emerge. Devices currently in use involve both the coordination ~of several functions and v ions types of areawi~1e .groi~pings of single functions~ both of which will be put ~ der study by the association. . ~ Public-privaM agencies : In the area of restril+turing of public-private rel tion- ships, the ass~ejation notes that the Housing ~mnd Urban Development Ct of 1965 opened up~ many new opportunities for j~ublic-private operation an ex- panded existing opportunities. In the field of housing, there are new opportunities for the participation o real estate, building, and financing interests-directl~y, as housing sponsors and man- agement agents and, indirectly, through cooperative efforts with local ho sing authorities In leasing, development, and rehabilitation programs. The non rofit housing sponsor has an expanded role and respo~ieibility, both independenti and in coordination with the local housing authorit~r. NAHRO urges local ho sing authorities to take the initiative in developing programs with builders, rca tors, financing instittit~ions, nonprofit housing sponsor~.~ In urban rené*al, the private developer has 4i~eady taken an important role in the planning a~id land disposition phases of op~atIon. The real estate b oker also has playe~a ~pecialized rolein the selling of tirban renewal land. In cc tral business district redevelopment and in areas ren4wed as industrial parks, c am- bers of commerce, businessmen's committees, a*d, private development gr ups have been effectite partners of local public agen~ies. These same relations ips should be applied just as extensively in neighbor~ióod conservation and reh bill- tation areas. In the area of rehabilitation, applying both to urban renewal and codes enf rce- ment activity, NAHRO emphasizes the need for close public and private coop ra- tion to refine the ieshabllitation process, to devise a "package" approach hat will bring economies of scale to the rehabilitation effort, and to move toward the establishment of a private rehabilitatjon industry. Citizen organi$tion structure.-NAHRO anti t~ates that, in the comm 2 years, public prog~rams directed toward the ailev ation of such social probi ms as poverty, unefl4loytnent, racial segregation, ubstandard housing, will in- creasingly reflect planning and policy decisions r4~aebed by the people to w om the programs are directed. Already there arej organizational structures of varl*us kinds thrOugh which citizens are channe~ing their Ideas on the pu1~lic issues that these programs involve. Some of thes~ structures have been frar~ied to encourage aggressive, even militant, expressiok ; others are directed tow~trd the process of education and discussion ; others, l~oward direct self-help action. NAHRO recognizes that planning with, rather th~tn planning for local citiz ns must become the guiding principle of community ~action programs on the lo al level and NAHRO sees as an important task of the ~ienn1um ahead an evaluat on of these varied methods of bringing the citizen i~ active participation in he urban development process. What should be sou*ht * is a method that will e- spect the factual aM technical recommendations o~! the operating official, wh le, at the same time, a4~commodating the aspirations an~1 special needs of the affec ed citizen. If we sin~leed in finding a technique that factually brings these citiz ns into the policymakitig process, without precipitatin~ clashes and power struggl s, the United States will have again d~monstrated t~ie strength of its democra Ic institutions. Action area C We must reshape the specific programs with which NAHRO members a e concerned (housing, renewal, and codes administration) to fit both the purpos s and the structures that come out of ~tction areas ~L itnd B. PAGENO="0417" DEMONSTRATION áITI~S 4 D RBAN DEVELO?M13~N~T 441 Urban renewal.-During'the past bien I in, NATIRO hi~sworked hardto clarifV the urban renewal process. Out Oi~ t I ~ perience 1~as ~ éQzne the conviction that "urban retewal" must be} re~fin o ~ dude all co~nrntinity improvement activities. NAHflO foresees t]~at What js nd labeled "renewal" will eventually become the over~tll urbap de~èlo~ent r~ ss. ~ The problems o~ the past mi~t~ be ui~ ~ st~ d in Qrdet to reach a new program deflnitio~. NAITRO sees thes~ major r b~ ms : ~ The fact that the progr~m ~as b e ~ ö narro~l~r ~1éfifléd in the minds of many key agencies and ie~ade$ an n t e minds ç~ ~he ~ general public. It has been seen largely as a housi g oj ration, whe~eá~ the intent of the program is the clearance ~r i~~habili ti~ of urban s~ttms and blight and the use of land to its best adv~int$ge u ci i~ gener~tl plan for the city. NAHRO supports a balanced pro~ráth tha ed gnizes the Importance of aids for central business district $ne~ival, ~i i$ rial area development, and institu- tional expansion. . The fact that~ renewal ~c~oi~plis er~ s have been too narrowly measured.' ,I,l~ test of success has ~oo often eézi the extent to Which the local tax base has been increa~ed a~ a $sul o ~ ividual renewal projects. NAURO contends that, while 1ner~si~ig a, ~ c~lty's tax rever~ne can be counted as a major advantage ~$f rer~é*~l, It Ii ill no~ be the sole jneasure of success. The elimination ~f óverc~owding, t e hanging of itico~npatible land uses, the provision of public woi~ks- h y ~ 11 bring improved city living and should also be used to n~easUre s c ~ . Furthermore, in instances where projects do return added ~ rev~nue , A RO opposes any attempts to recap ture Federal grants from s'u~h ta i cr ments, in view of the limited finaii- cial resources of cities. The fact ` that rel~iéwa~ has be U4 airly labeled as a disruptive force through `displac~nent of ~ami1ies d , all busin~s~e~. NAHRO points out that urban renewal' j~ th~'fir~t fe e a~l aided program ~n the history of the Nationto carry a re~Luire~uen~ for s i~ ng all thQse~esidents atid businesses displaced by p~iblic ~cti~m, ` Wh ~e t~r an renew4l has been assisting its displacees, Other fedéral~y' ~iippo ` I d rograms ` (h'ighwhys, public housing, public works) hai~e: b~e* fr~e , to I t t elr ~j~~pltteees fend for themselves. ~ Aithotigh urbtiti renewal edn~1'ntle t ci velop effee~Wé techniques for assist- ing in relocation, it `mu~t be rec ~ 1~ë that the th~~dess of any one effort may not be recognizable i1~ other t*~ c~ and pri~até displacements do not achieve comparable re~ilt~. N H 0 has long supported (and, in large measure has seen achi$red) a bi~oad ` ing of relocation aids under other public programs. It sup$rt~ nni ö élocation aids for all public displace- ment and also supports improve i~o raming of relocation housing and a strengthening of *reloeal~ion assi l~ nc~ to families with severe social and economic problems. ~ ` ` ` ` ` The fact that some rE~new~al ` cr ti s harge that rehabilitation can substi- tute for clearance. N4~HF~O c ~i ide s conser~atton of neighborhoods a basic goal of urbafl re~iew*l an u~ es cities tO devote ` greater attenion to this aspect of their programs. ~ e~t rtheless, it !iself evideilt that struc- tures beyond repair or ~ In boor ~ ca~ ons demand clearance-often on an area basis-to restore i~nd to its rep r use within the community. Clear- añce and rehabilitation work to è hat' to correct neighborhood defects and restore structures to so~ind con ~t on. ` The fact that urhan ~enE~wal ~ of~ n too narrowly administered on the local level. NAHRO ur~es local a ifl~ istrators to make use of all the tech- niques at their dispos~l, 4~iclud ~t t e full range of aids offered in the Housing and IJthan De~eiopme t Act of 1965, The fact `that urban renewal it~i its concern for citizen participation and reloeation-.-~-takes t~z~ie to a l~eve its goals requires that localities (a) devise "first ajd" treatment ~or d t rb~ ating or deteriorated areas, (b) make ingeniOus use~ of ianxi acquired e ri in the renewAl process, (c) develop new methods of lan~t us~ co~itrol, a 4~1 d) fInd a way to protect the interests of property owners b~f~re pubi q ac~ on commences. In, the biennium ahead, , I~.LAERO e oth ends a bold new approae~i to urban renewal. In forn~ilating t:~ii~ ~aew `ô ch, NAHiW , will recognize that (a) cities must be givep anopti~n tp w~ k iZ~ ` total Improvement areas" that Include all portions' of the city in~ which O i~ nity Improvement activities are con- templated ; (b) ]3~e(1eral pl~nii~g' fui~çl tr~ st be provided to 1~eep program objec- tives up tc~ date and. to st~ppO~t lo~a a ministration on a continuing annual budget ; (o) Federal reserv~tio~is of C p~ 1 grants must be provided on a budget PAGENO="0418" ~ 442 DEMONSTRATION CITIES AND UREAN DEVELOPMENT cycle simihu~ to a local capital improvement~ program, timed over a led that coincides with a long-term. Federal funding 4~uthorization period (4 ye rs under the 1965 act) ; (d) execution of specific programs must be based on a 1 al action schedule ; and (e) the criterion for eligibiltty for a specific program must be simply that it will have on impact on the cycle of deteric~ration or provi e a basIc improvement to the area. Further, NAHRO continues to support th~ enactment of legislation milar to H.R. 6431, iatroduced in the 80th Congress ~y Congressman Rains to acilitate renewal of cehtral business districts. Code cnfo~cement.-NAHRO sees the bii$inlum ahead as a crucia~ testing period of wb~ther or not the Nation's commi~iiities are ready tO initiate~p1annecl systematic a~proaches to conserving neighb~rhoods by applying effecti~e mini- mum stand~ds below which they will not permit their housing suppl~ to fall. The Hou~ing and Urban Development A4t of 1965 gave recognitioi~ to the national importance of code enforcement in community development p~ograms and autliorized direct grants to communities for programs of concentrated code enforcement to assist them to expand and strengthen local codes adminh~tration. NAHRO makes an urgent plea to every community to immediately plan and implement concentrated code enforcement programs, utilizing section ~ 117 as well as the supplement aids provided in t1~e 19~5 act, including grants for planned programs of demolition of unsound ~tructures. NAHRO calls the attention of all local government officials to the ob~igation imposed in the Housing Act of 1964, requiri4g that communities have ~n effec- tive housing ~ode program beginning March ~967 for certification or rec~rtifica- tion of their "workable programs." This reqi~irement ties the future of ~dl local federally aided housing and community development programs to the a~equacy of codes pro~r~ams. Therefore, it is imperative that all local government kfficials begin now to give full support to local codes officials and assist them in p anning and implementing effectiVe codes programs. With respect to the newly enacted section UT, NAHT~O, calls attentio to the fact that this amendment does not authori~e concentrated code enfo cement programs in our truly depressed slum areas. NAHRO urges Congress at its next session, ~:o amend or clarify this secti~n so that depressed slu areas qualify for section 117 aid, for the followIng i~easons : many such areas 1 ek on- going federally assisted programs ; the respbnatbility i~or maintaining. decent housing stand*rds in these areas devolves up4n code enforcement officta s ; and individuai~ a4d families inhabiting such d4pressed areas, ~ at the 1 *t, are entitled tie h$sing that meets minimum staz~dards of habitation, pond ng the renewal or red~velopment of the area. Housing.-41~ho new Department has four major . housing pi~ograms ai ed at providing assistance to those fan~llies and individuals not able to afford rivate housing : the publié housing program ; the two below-market intere t rate programs (the Federal Housing Administration's section 221 (d) (3) mo erate- in~ome program, and the Community Facilities Administration's direct 10 n pro- gram for the elderly) ; and the rent su~pleflient program authorized y the Housing and Urban Development Act of 1965. The public housing program is at a new ~tage in its process of evolution. Integration. inlio the new Department may p4'Ovide a valuable opportui~ity to reframe conc~i#,s and procedures develbpEMl i~n response to the econom~e and social conditions of the 1930's. It may aLso pr~vide a framework to utili~e new public housing~1assistance tools iii a producti~e relattonshi~p with other urban development pr~ograms. The other programs o~f housing assistance are Wo new to require ad~tation in the same sense as th? public housing program. How- ever, there is a special need to consider the tested experience of the ast- especially the experience `of the public housingt~rog~am-in developing t e con- cepts and practices of these newer programs. Perhaps the most important consideration itt adjusting housing assista cc to the needs of the 1960's relates to the position of the low-income family n the United States. Low-income families are deep~y involved as the focal point of an effort to ethninate poverty from the natic4ial scene and jhey have new, forceful voice hi their own destiny~ NAHROj cafls attention to a num er of important conc4~rns that should be made a i~rt of the prbcess of planning housing for iow4income families: Complet~ conceiftration of low-income 1~amIlies in center city ar as or in separaje lioushig developments is unde* s~ri~ns question. While there will be a ~,hntinuing need to utilize housipg developments for low-i come PAGENO="0419" DEMONSTRATION CIflES A D URBAN DEVELOPMENT 443 ~ami1ies only, as one s~ron~ toc~1 to eet ~housing `needs, there will be increasing emphasis on pays to p 0 hI diversified housing, involving more than the low-income gro~p. ` Providing incentives 1~or low-i c' m families to uiove toward eventual independem~e is reeogni$d a~ ess i~ ial n all assistance efforts. Providing opportunitie~ fo~ low i co e 1~ami1ie~ to participate in decision- nhaking affecting their ~wn weif r ~ now ree~gu1~ed as a realistic goal. Coordination of all t~pes ~ of 1 ~ -14 ome assistance hi a com~rehensive attack on the total eye~e o~ dep I at ~ is viewed as th~ only possibility 1~or long-term success in lifting a ~ U from deep povex~ty. ~ All housing programs must £r~tr~kiy a l~ wledge the eurrent gape in coverage in reaching low-income families. ~ . ~ Two ~f the moist evident ~ap~ are ~ fl~ eting the housing needs of the large family and the very low in~ome fa ~l . Mere aggressive solutions should be sought to reach these two group~ in p r I lar. As the public housing prbgr~tm . b ` ~ a part of the new Department, it bring a long, tested experie~ce in ho . M construction artd management. ~ New forms of assistance authori~ed in r e t ouslug legislatidn-such as the "flex- ible financial formula" and ~he leasi ~ of rivate bousing-will make it increas- ingly possible for public hou~ing to e 1~ yond a project concept and becofliie an effective partner ilL neighborb$d an tot 1 eomtnunity planning. Recent prog- ress in seeking to achieve ~L) e~ell r~ e ~ housing design, (b) increased access to social services, and (c) a resurg e f tei~ant organizations, is proixUsing. However, to press foirwar~1 *ith se gains requires either reemphasis or implementation with respec~to~- Development costs : 4cldeviri ix~i ginative, yet economical architecture in low-income honsing ~`eqi~ires t f 11 availability of the development cost ceilings authorized by ~he Cong e s n the 1~65 act. No arbitrary admin- istrative ceilings shoul~I be sub ~i Ut d for those set in the Housing Act. Modernization fundi~g : Pro i ixtg an adequate financing mechanism for modernization of o1der~bou~sing e ~l piments, particuh~rly those 20 years of age or more, is an urge~at necess t Land write-down : ~ecMs t rite-down ~f land for public housing development outside u*'ba4 ren ~v ~ reas caii greatly accelerate site avail- ability. The below-market inter~st ~at~ ~` grt~ms and the rent supplement program must respond sensitively 1~o the ne s ~ the 1960's. This means a firm corn- mitment to serve familie~ most i ne~d of housing and to recognize their special needs, particu1ar1y~ in the r a *~ social services. The importance of good housing design at a reasona 1 de~sity should be a prime area for con- cern. These programs plate great p~iäsis on the capacity of nonprofit groups as housing sponsors. NAI~IRO stro ly upports this increased role and pledges its reSources to assist nonprof~t spo or~ in achieving skills in development and management of h~ousrng *art~cu1a 1 th ough its training institutes and semi nars. NAHRO also pledges its he f iti eveloping strong re1ation~hips between the nonprofit housing spensio~ an 1 en housing, renewal and codes agencies, so that they can pursue n~uti*l in e est in assisting low- and moderate-income families. ~ NAHRO sees the next ~ years S sti~ tegic in the exploration and testing of new ideas in housing as~ista~ce n ways for public and private agencies to work together. Action area D * We must take the initl~tive for a I mediate, large-scale training and man- power development progr4~rn ~or t e rb ii development professions, encouraging teaching institutions at all level o ducate young people in the philosophy and the technique of url~an devel me t and then recruiting them as workers in the field. Despite increasing profes~ional s i the housing, renewal, and codes en- forcemient fields, little b~Ls J~een rio to create solid educational support for these emerging professh~ns. If ba progress is to continue, the training resources of every public and pri ~ b dy interested In manpower development for the urban professiom~ mt~st b o~lized to provide a broad range of educa- tional programs~ especially ii~i-ser ic ~ hUng. NARRO sees the follothng acti ri go is for the next 2 years: eo-878---66-pt. 1-r-29 PAGENO="0420" 444 DEMONSTRATION CITIES AND tTJRBAN DEVELOPMENT 1. Immediate creation ~f the Institute o~ Urban Development call for by the Pr~siden~t iii hla "Message . on the Oiti4s," giving special priority for the traini~ng ofk~eaI officials. . ~ ~ ~ 2. iaimedi*te attention to p~oviding shor~eourse training for code enforce- ment officia]~4 to assist them in initiating~ $he codes asststance provi ions re- ceutly made available ta national housing legislation. ~ 3. Exami~tttton and adjustment of persot~nel policies and recruitme t prac- tices for bO~i~ing and urban development ag~ncien-Federal, State, an local- to assure that they are conducive to attracti~g and keeping the best no talent available, Including : Extension of the local public agency tra~n1ng effort supported by th Urban Renewal Administration to all local ageijcies operating programs u der the new Dep~rtment of Housingand Urban Dvelopment; Acce1~ttion ofthe. Housing and Hom~ Finance Agency's intern rogram under thelnew Department ; ~ I Increas~ in the summer and part-tim~ job and internship oppor unities for studex~ts in agencies at all levels;. . Improvement -in opportunities for prof~ss1onal advancement, ace lerateci training, and meaningful salary and bene1~t increments for mideareer agency personneL 4. Aeceleratjon of present in-service training activities by all spons rs and expansion of specialized program~ into new areas, including: Review of the mechanism for implemer4ing title VIII of the 1964 ousing Act in an effort to facilitate State-local 400rdination of in-service t aining for future use in this and other Federal legislation; Increased use~ of all presently available ~ederal in-service training assist- ance progi~ams in such areas as aging, po~ert~, and public welfare; IniUatio~i of the new opportunities for ló4~t agency-university partn rships under the~igher IMucation Act of 1965 ; Expan~s14n of NAHRO's program of short-term, in-service training t. rough sponsorship of training institutes, public4ions, and program develo ment. In ad4itlo~i to capitalizing upon its presei~t resources, NAHRO shoul seek foundation support for establishing, as a continuing, independent see ion of the asso~i~ion, a national in-service traii4pg center for administrate s and sp~cialist~ in the housing and urban devejopment professions. [Prom the Journal of Hous1n~, No. 1, 1906] "NEW TowNs" RoLE IN U~nAN GROWTH E~PLORED, PUBLIC PoLIcy I SUES ExAMINEn-(~) FoaM 05' LOCAL GOVERrIMENf, (2) LAND Usu CONTROL , (3) RELATIONanI1~ TO OENTEAL Orruss (By Robert Gla~1stone, of Robert Gladstone & 4ssociates, economic consul ants, Washington, it~.o. The following statement ~as presented to a general a ssion of NAHRO's National Oonferenee on Oct. 2~, 196~. Mr. Gladstone's ii m is responsible for a long list of economic stutlies for downtown, reside tial, cornmereia1,~thd industrial development projects) New communities program proposals have been controversial for a num er of years, failing twice to gain congressional acceptance, although changed in sub- stance-and even in name-from "new towns" ~ initially to "extensive de elop- ment" in the 1965 attempt. ~ Evaluation of new communities as a policy o~ urban development-apar for the moment from specific program p~eposals-ca4 clarify the debate on pro ram. Accordingly, iti~ our task here to identify and ai4alyze major public policy i. sues in the light of n*tional and local ti~eüds and in4erests-especially the into ests represented in N4HRO's membership. I Four major Items are of particular interest t~ us. In summary, these re: 1. Center city ~ redevelopment and new comn~unity development-are t ese conflicting obje~ti~ves? 2. New communities, metropolitan development policies, and the role of ed- eral Government. 3. Social patterns and segregation-the contrast between new communities and suburban development. 4. Local government issues and new commu ity development-problem of urban services, self-determination. az~d fiscal facto s. PAGENO="0421" DEMONSTRATION ~ITIES D RBAN DEVELOPMENT C1~NThA~ C~TZ ~ V C MMUNITIES Perhaps the single most orj~ica1 is~u I t e re1ationshi~ between eentral city development and redeve1øjnne~it ~nd c~ ation of new commur~itjes in the metropolitan orbit. ~ Key que~lpion~ are ~ ew communities compete with cen- tral cities for development, saj~p~n~ the i al~ y of tbs ~enti~al city? Is suburban "sprawl" actually an advantag~e to cent ~it ci es ? Would new communities corn- pete~ for Federal urban devel~pi~ent f ds, drawing them away from central cities? Fundamental `to re~o1ution ~f t~iese ~i .sti ns are the trends, scale, and loca- tion of urban gains in U.S. n~etr~polit ~ as. Analysis of these trends and patterns-to be discussed in f*rther de a 1 b low-points up a number of impor- tant factors that would hold ~he~her 1- x~o a new cornmunfties policy were to operate for the Nation. The~e factor I c~ de the following: The fact of urban grc~vth Is n t a~ uable in `terms of the past record, as well as theindicated fi~turE~ patt r The location of new ~rOwt1~ wit i u~ tropolit~tn areas has been and must continue to be dominantl~ pei~iphe a ~ e en `though redevelopment and inten- sification in central city l~cat~ons a o cur. We are familiar with the pace oi! urbanization drarnatic4ily expr ~ e~ y the reminder that 1 million acres of new land moves into ur~an cleve ~ ~ t each year. And indeed~ the func- tion of the metropolitan~pe~iphe ~r ~ ere open land is available-is to absorb much of the new ~ro*th o ~ rt4 *g in urban locations. The largest share of m~bar~ gal ~ s ~ cused to a remarkably high degree on a selected group of U.S. rnetr p lit n areas. These limited, maximum impact areas are the mo~t serious ~ af~ cted by growth and extension prob- lems and, of course, wou~d p9tent 4 ~y e the most directly affected by new communities policies. I would es ~ at that only one-third of our 200-plus metropolitan areas would be ~ubst ji i$4 y affected, based on present pace and scale factors in the marke~place. Given the pattern of contii~xtthg, su a an ial, fast-paced urban gains, the key issues as they relate to city de~'clo~men at~ ms then become: First, not whether mE~troi~o1ita gr Ui and extension will occur, but, rather, how, where, and ~hen it wi 1 c r ; and Second, wñether subur~an devel n~ t patterns typical of postwar United States are to continue-~tnd mak ~ io istake here, because the outlook is for a continuation into the futui~e ~ç whether improved patterns based on specific program and ~ollcy in ci ye tion can be introduced to better this pattern. In this context, the role *~ the cc t al city would remain strong, although dynamically changing. Th~ task of eut al city development is to identify existing as well as new stre~gths an ~ up ort them fully and creatively by ap- propriate action. Rather tb~in pomp l~i g ith central cities, in a rational dis- tribution of the region's act~lties, n c mmunitles would complement them. NI~W COMM IT CONCEPTS . A new communities poIic~ and eff t~t ~e programs for their development are potential basic ingredients i~i a new p ~t rn of urban growth for the Nation. The prime objective in a ne~r comm ti tie program would be to accommodate the Nation's urban gains on~an ~mpr ~r d asis. Critical to this concept would be a full response in the ne~fr commu i ie5 to urban growth needs. To do this, they would need to be an ~nte~ral a t f the metropolitan regional system, directly relating to the metr~po~itan o i~tj and cultural structure : its economy, its transportation system, l~s open ~ ce and land development patterns, and the full range of its market syst~ms. Although some relatively i~la~ed, s ~ l~ tonomous, or economically specialized new communities might con~ini~e to e bu it, as in the past, the overwhelming orientation of new co'mxnunfties woul be oward metropolitan locations, where the major population gains ~3f t~ie N ti x~ nd its primary economic growth are taking place. Los Alamos, Kit~mat, nU other "Shangri-La" communities are not relevant to the mainstr$m issu s o~ urban and metropolitan problems in the Nation today. No hard-and-fast definitthn of ne to ns is applicable to all situations in various parts of the countr~, this i~ s~ cially true at the present time, even though a more sophisticated definitio ig t evolve with further new community building in the years ahead I~owe ~ , c Iterla relating both to scale and fea- 445 PAGENO="0422" 446 DI~MONSTRAPION CITIES AND URBAN DEVELOPMENT tures of sueh development can be estab1is1~ed now. Specifically, the ollowing items are o~ key importance: (1 ) Feat~res.-A planned new community should program for mu tipurpose development, providing living choices in a full variety of housing ty es for a range of socioeconomic levels within the liDlits of available demand and avail- able housing programs. In addition, as bro~id a complex of job types, economic activities, aiid ancillary functions as can 1~e appropriately accommodated and attracted tothe community should be inclu4ed~ Jobs, based on popula ion serv- ing activitie~ could, of eourse, be a majmj source of community em loyment. In addition,i other job types-"basic" to th4~ new community as well a to the surrounding~ region-might also be provide4l, inso~far as they relate t a func- tional patter~i of job distribution in the regio~. The new community should be reasonably ~uton~mous in terms of the facilities it provides, yet physically and functionally related to the surroundi g region and central city. Although providing selectM economic and cultural ~ctivities, the new community should also rely on facilities and institutions that ~erve the entire region from a central city location. (2) scale fa,ctors.-Com:munity scale would be varied in terms of both area and population. If the concept of new comn~nnity development is to suck~essfully apply to vai~ious locations, market, and development situations in th~ United States, apprOpriate scale must be establis~ied with direct reference to local areas. Peebjaps the most useful scale ind+x applicable to multiple ~ocations would be tii~ie span of development. A ne~cr community should be su~ficiently large in area, population, and employment targets that the projected develop- ment span w4~uld require on the order of 10 o~ more years. In some locations, this standard would s~ggest a total new commur~ity area of 500 acres and, in other areas, a 1Q,0004lus acre reservation migl~t be re- quired. Projected population levels would vary not only with the total area involved but also with the mix of dwelling types, density, and commu ing pat- terns of workers-all influenced by local conditions. PRESENT CHALLuNGE It is impossible to realize the urgent need to improve urban dev lopment patterns without looking at the present sc~tle of our urban expansi n. Not only does ou~ urban growth pace set the cl4allenge for new communi build- ing-it also ftlentifies the opportunity availa*le now. The scale of the ation's urban expansion has never previously been ~s great. It is this scale t at pro- vides a basis not previously available for cT~eating new communities. Poptilation ; Census Bureau estimates sho* that the Nation's populat on now stands at some 1~95 million persons. More than two-thirds of this total, pproxi- mately 135 mIllion, live in urban areas. Today's 135 million figure can e com- pared with the 90 million counted in 1950 and less than 70 million in 930-35 years ago. Urban population is thus up by approximately 45 million persons in 5 years and `by some 65 million in the last 35 years. At present, urban gains tot~1 about 3 million p~r~ons per year. Along with these numerical increases, sub~tantial shifts in the proportion of urbanites have 450 occurred. In 1930, 56 percent of our population was urban ; by 1950, this fraction increased to 60 percent; and the prop~rtion currently stands at an e$timated 70 percent. These gains are continuing and even accelerating. Housing : P~ttterns of national housing pr~duction have been reflect ng the pace of population growth. Annual starts 1~or new dwelling units ha e been running in the 1.5-million-per-year range ~frith reasonable consisten y. Of course, in individual years, or for short peri~ds of time, the rate has ropped below this level. Oauses of the drops, however, appear due more to sho t-term market distortions than long-term declines in underlying demand fact~rs. In the period ahead, the housing outlook is for increases from the 1.5-mill~on-per- year level to new, sustainable highs, especi~tlly in the latter portions ~ of the current decade. This is based not only on present demand trends but ~ilso on the specific stimuli of new programs, such as~ those in the recent Housi~g Act. Although overall national gains in housing 4re spread throughout the ?~ation's 6,000 urban plttces and 200-plus metropolitan 4reas, a selected number of metro- politan center~ are the key focal points o~ growth. Some 2 dozen metro- politan areas iti the Nation today have populat~ions in excess of 1 million persons. The 10 largest metropolitan areas alone acc4unt for nearly one-fourth of our total population. `Spectacular gains in seledted areas point up this icture. PAGENO="0423" 447 DEMONSTRATION dITIES D RBAN DEVELOPMENT In the past decade, Los Ange1~s alone èi ed roughly 2 million people to its 1950 base, for a 45-percent gain ; ~ Wa~shin t i~ .C,, added appro~dmate1Y 500,000 persons, ~or a gain of 37 perco~t ; ~nd o St n added more than 50 percent to its total population. Typically, some 25 metropolitan a ~ s I the Nation now support annual housing markets in excess of 10,~00 n l~y onstructed units. These to~ areas account for near1~ 50 percent in Our t t 1 h using production. A half dozen or so metropolitan areas are co~isistent1 u t e 25,000-unit-per-year range. The New York region and Los An~e1es-in~ s ro g years-approach the 100,000-unit- per-year level. Washington, ~ is ~u re tly performing at the rate of more than 50,000 new housing uflits j~er ~Tear. The fundamental point is tha~ pop~U ti n and housing gains, while spread throughout the entire Nati~~i, to a do re are overwhelmingly metropolitan- focused and, beyond that, cor~centrate4t o ~ high-degree in a limited number of super-metropolitan ~ areas. Il~ is at ti~e e ~ cations where our principal urban growth is occurring. It is ii~ ~ these l*c tio 5 where the main opportunity and challenge for new community building ~s ri arily available. Economic growth : As wit1~ people ~n ii using, economic gains in the Nation are now also at a scale that upiquel~y pro ides the basis for new community development. Overall U.S. e~onothic e~ a~i on, meastired by gross national prod- uct, has produced a gain of moi~e th~n $~ billion per year-or 6.5 percent on the average-in the producti*n o~ goo4~ an services for the period between 19~0 and 1965. The total value of p~oducti i~ I current dollars during this period has increased from $500 billion to $ b llion-a gain of $165 billion, or 33 percent. In terms of jobs, since 19~30 the N~tt o~i has added more than 5% million to its employment rolls on a n4t basis. fli n w physfeal facilities, investments by the Nation's industry for neW'plant an~ q~ pment, based on announced corporate intentions, shot~ld reach and ma~titai~i ec rd levels. Yet, despite the scale and pace of this recent pattern o~ eeonom~c ex ansioxi, the future outlook is for con~ tinued gains at a similar seal~. These gains are, of course, urb~n-fo~i ed, along with population growth. How- ever, within urban and me~ropolltar~ re s, expansion in jobs and new plant facilities of all types has been dom~n ntl taking place in the outer portions of metropolitan areas-just ~s It has ~jt' ~ ople and housing. In the case of Washingt~n-typic~1 in many ways of the situation around the Nation-recent trends have sho~n th t approximately 75 percent of all net job growth in the region h~w been lfr~ :te in the outer portion of the area as against builtup portions ~f the cent~a ci y. In fact, Washington is probably more "centrally oriented" than manIV other metropolitan areas In the Nation, with its emphasis on Feder~l Govert~ exit employment and the concentration of jobs in the Capital's Mali *rea. ~t, co servative anticipations are that two- thirds of the new jobs in the $rea ~1 rir~ the ~ears ahead will be in outlying locations. This trend will support! or~ ruction of major new outlying job centers to accommodate ~ t1~e gAIns ~ d, n turn, creato new outlying housing demands, setting in motion the full ~e ue ce involved in the urban development process. ~ ~ nw CO1~~M NT T VALtT~S Apart from underlying fo~'ce~ that~e ta lish new commmiity potential, there is the basic question of why new com~i il ies. What advantages do they offer? Conversely, what probiem~ might l~i ~ liminate? How do they compare in these points to the present p~tte~n of ~ir a development? Principal benefits from new comi~ ni~ development have traditionally been argued in physical terms. ~he origi~i ~ f n w community thinking goes back more than half a century. The ~`gaMen dit `~ 1 ea and the planning Ideal of the "city beautiful" were early goals ~n uthan i~le ig The potential of new con~mu~dtie~ t cIa , however, is more than a sentimental recall of these earlier de$gned mbt va ed even utopian concepts. The new building opp'ortunitie~ today gelierat ir~ tly from hard realities of urban expan- sion in the Nation. Simila~ly, pote ti 1 caning of new communities needs to be assessed in terms of econo~nics, gov r me tal organization, and fiscal benefits as well as social consideratio~is. `The p te tial for realization of these benefits in new communities as again~t p~esen ub rban development patterns-discussed further below-is the specific fOcus f r t1i~ analysis. PAGENO="0424" MJi~TROPOLITAN GOALS 448 . IX~MONSTRATION CITIES AND ~ URBAN DEVELOPMENT Before going on to governmental and ~ ~ an overview of th develop- ment values potentially attainable in new cc~nimunities can be set forth Shorter work-to-home trips for a sizable portion of community esidents, based on balanced community developrt~ent on the appropriate lo ation of economic activity. Greater ease of internal movement, ~ based on limited commu ity size. 1~l1imii~ation of "sprawl" and eontint~~us urbanization without nterrup- tioil, acI~ieved by a variety ~f developm ut types and open space. Better proximity to open apace and accessibility to major rec eational areas. Jmpro~ed visual environment. Econoiiuies in land development and uti ization. Potent~al for a full variety of housing t3rpes' aud choices. Reduced pressure for irrational rezoiting and development patt ms. Opportunity to create rational service areas for local government Greater potential for fiscal viability based on balanced dev lopment patterns. `It is sometimes argued that the present p4tern of suburban squalor I advan- tageous to eeptral cities, because the re1atlv~attractiveness of the cen ral city as against new developmei~t is increased. T~e~Macy's-Girnbel's type of ompeti- tion implied i~n this argument is neither a.pp4o~riate nor acceptable at t is level of national ibterest. This attitude is limit~d~ :lwwever, `both in term of its validity and supporters. It is simply not ~o~slble ~ to settle for und sirable, unsuitable, and workable suburban developm~nt patterns any more than we can settle for slum conditions in central cities. On the contrary, urgently needed now is a comprehensive metropolita devel- oprnent system that can effectively relate all parts of the region to app opriate componets of development, bal~incing intere~ts of the central city ith the new outlying developments. The system must be sound both technica ly and politically. Its creation is fundamental to~ responsible metropolitani m and absolutely necessary if suitable urban develoi~ment Is to be realized. . The beginnihgs of effective metropolitan dev~dopnient programs are noW getting underway in a limit~d number of major met~opolltan areas. Although metro- politan plaijn~ng eft~rth carried out under 4ectlon 701 and the naetr politan ~ransportatioi~ planning process-~-man~atory ~mder the Highway Act of 1962- frequently lea~e much to ~ desired, they protide a basis for extension nd im- provement. ~he participation and even ccs4tnitment of local governm nts to coordinated metropolitan action in such field~$ as transportation, enviro mental health, and public safety justifies some optim~1sm that overall metropoli an de- velopment and its potential role in a new com~iiunlties program can be o tamed. A further issue in the relatlonship betw4en central cities and ne ~ corn- munities, identified earlier, is possible comp4tttion for Federal financi~tl sup- port among various urban programs. Two r.e$ponses to this concern have been advanced. First, a key to new communities developm~nt would be to effeetivel focus programs already avallable-ever~ if on a limited basis-in metropolitan areas. These include open space and recreation progra~ns ; community facilities s pport highway and i$tpid transit programs ; urban 4nd metropolitan planning assist- ance ; water po~11ution, environmental health, a~d river basin development ; Fed- eral land and facilities policies ; home mortga~e insurance and credit p licies; and airport development programs. Second, any new Federal financial support~ keyed to specialized asp cts of new community development-even apart froni focusing already operati g pro- grama-must be directly related to need as well as effectiveness in acco plish- ing the full range of objectives at the local level. ~Vjtal existing program must not be cut back to create new programs. As a matter of record this h s not been the case. Rising need and Increasing n~ttional financial ability t meet this need have produced growing public inveStment in urban developrn nt-a trendthat can definitely be expected to continue.~ GOVERNMENT AND 5001+ Given a new rommunities policy as an apprc~priate response to urban g owth problems, then issues of Government ; public h~terests and finance ; segre ation and social balance can be analyzed In comparatite terms-the effects of ne corn- PAGENO="0425" I DEMONSTRATION CIT~E;S D URBAN DEVELOPMENT 449 munities in these matters as ~gai~ist t ~ ct~1 metropolitan de~cre1opment patterns. Within the overall Issue oi~ 1oc~l go e flu nt and public interest in new corn- munities, a wide range oi~ specific p o le s is involved. These include ~ the following items: ~ ~ . (1) How to achieve short- ~tnd jong 1~ i~ seal stability for new communities within the constraints of suit~ble tax ~ es, igh early costs, and initially "slim" tax base. ~ (2) How to provide adeq~iate Utb ~i ~ Ices including necessary utilities, schools, public safety, welfa$ arid re~ e ti n servh~s, given the. local tax base. (3) How to introduce a ldëal gove ~i e t apparatus responsible for provid- ing urban services and rep$sen~ing ti ]~ lnterests~ in' r~lat1on to private in- terests. , These questions are d1~II~ lt-+and t o~ htfuL pi*lic aanñnistrators tell us that no final blanket answer `as ~laey ~ l~ to new eommunities are available. The kev issue Is the ~1egree `to whic ew * communities' inherently acid to the present complexity of local overnme t ~s ues or simplify them In contrast to current patterns of outlying dev~lop 0 t The ~fnhl range of local government problems just listed are no~ ap~lica 1 to typical suburban developments and new communities would not alter the at~i e or extent of , these problems. Ac- cordingly, this becomes a ne~tral Issu l~L respect to a new-communities policy. Social issues-segregation ~tiid dive pô ` ulatlon. cht~racteristics-~imply m~ist be examined In terms of co4ipavativ ff~ ts ot alternate development polic~es. I would emphasize that pro~lei~is of ~ ~ gatlon an~ ~ so~dal balance-alth'oi~gh manifest in outlying and ce~tra~ city a ea development~patterns-must be d~alt with in the large context of pro~r~vm 114 d at eliminatb~g poverty ; narrow~ng' income gaps ; stimulating ~conpm1c, de~ opment ; prQ~id~ng equal aceess~ to jobs based on equal educatipna4 QPP r u1~ ty ; adjusting ~o~ial attitudes ; eli~n1- nating diseriminati~n In hot~sln~ ; an ro dening the reach and effeetivenes~ of new housing programs Qrient~d t9 low ~ c~ e demand sectors. The need `for actlo~i witb~i ~1~s br ~ E~ framework,~ewever, should not ~re- chide the recog~dtlqn of suc1~ specific is ti ]~e1ated to metropolitan developn~ent patterns as: ` ~ . (1) The ghettolzationof l~w-~nco ~`, n~ or1t~T gro~p~ within central city ai~eas as a result of traditional p~tte~'ns o ` o~ location ; dls~1m1natiou ; and `su*ply of dilapidated seco'ndbancj bpu~i~g ~t ~ . ` ` (2) , Major impediments ~resently pe~ te against `suburbanizatlon of t1~ese minority groups, despite t1~ 1n~reas i~i ~ tentlal for~s~c1~ , a shift based on~ ex- pansion of suitable jobs and gro~4ng ~i o es of minor1t~ rg~oup members. (3) Major impediments ~iot!1thst dt , some factors are now operating to alter ,tbese patterns 1nc1udi~ig specift ` $ ~tig programs with subuj~ban location potential ; nondiser1rninator~v ~quir ~n i~. of law ; and the efforts of fair-bous- lug groups and others of goo~l will. ~` It Is ` unrealistic to expe~t that e ~ ~nmun1t1es are inherently capabl~ of changing this pattern wlthput' ex~r ~ 14 pplicatlon In a variety of other pro- grams. The following fac~ors~ ~ er, could operate to help improve s4cial balanceunder a new commu~ilt1~s pr ~ a~* ; , I l~lnancial constralnt~ oi~ no I 0 pnity developers to maxithum ~ales make it advantageous ~o r~acb ~ f 11 range of housing types and markets. Balanced against these $nstr*~ t~ however, a~ the "classic" con$rns, whether real or imagined, of p$j c~ ej among suburban residents and ~ pos- sible loss of community aec~ptan~e aS~ result. In comprehensive x~ew comi~~ nit programs seeking a full rang~ of economic activitles~ th~ ne~d fo~d ~ sifted labor ~kills to meet requiren~ents of varied enterprises &eates ai~o h~r constraint for socially balanced ~opu- lation. ~ I To the extent that ~ed~ral, ~ at~ and local government agencies In se- le~ted areas become i4volved 1i~ E~W community programs, realistic efforts for social balance cou d be pro~n te or, alternatic~ely, required as a condi- tion of in~olvement. ~ ew commm PAGENO="0426" 450 DEMONSTRATION CITIES AND tJRBAN DEVELOPMENT (2) Land development insurance progratn4 tot large-scale building a d land development operations. The beginnings ofl this program have been ncorpo- rated into th~ 1965 act. This approach wou'd involve private land ac uisition and the develOpment of sites with backup su~port in the form of credit risk in- surance through standard Federal lansing A~rimiM~tration sources. (3) Emin~rlt domain procedure involving pjibllc acquisition by local a thority and improven~ent, followed by subsequent 4isposition to developers f r final constru~tion ~ çperations. * Fundamentally, this is an urban renewal ype of operation. Pi~ecnrsor of thl~ approach is th~ open land-arrested deve opment feature in earlier acts. (4) Direct, action by State agency to undertake new communities evelop- ment, with or without eminent domain proced~ures. A variant of this a proach would be direct action by another specially treated public or quasi-pu lic de- velopment corporation, which would perform~ similar new community evelop- mont tasks. Each of th~se four proposals has some m~?rit in specific situations. On a national basis,: a combination of these approa4hes could conceivably wor effec- tively to aeco4iplish a new communities po1i~y for metropolitan devel pment. Even within a particular metropolitan region .~ combination of these app oaclTies might work on~a simultaneous basis. I would ~efliphasize, however, that ithont direct, programed action that can mobilize prF4ate enterprise as well as F eral, State, and local government, neithE~r a new con~munities policy nor its obj ctives will be realized for the Nation. In addition to the approaches outlined, one kther can be added. This would be to involve the central city actively in the n~w community process. T is ap- proach could reverse central city concern for dompatibility of Its interest ~ with new community development. In some sens$, this would adapt the " other city" concept from Greek city-states to a modern~urban situation. The central city h~s both capabilities and heeds that could be effe tively served under this approa~h. Oapabilities met de substantial know-how ~ n the "business" of ~ity operation derived directly t~b~n experience with mu icipal activities. Spe~4fic capabilities related to new community requirements i chide financial resom~ces and financial know-how ; e perleneed staff in the ope ation and construetioh of utilities disti'lbution and reatment facilities ; desigi~, con- struction, and maintenance of street and hlghw ~r facilities ; an array of se~'vices in general administration, planning and zonink, urban renewal and rede~relop- ment, public housing and community economic d~elopment. Some central city needs could be met by neweonimunity development. hese include expansion and modernization of its ta~ base ; the addition of cc ected new types of de~telopment tO the city ; avaihibility of relocation sites for fa~ ilies and~ businesses displaced by redevolopment ; h~bwáy construction ; as w 11 as normal land-use shifts. ~ . Of course, ti1iè~e are some problei~s inherent in~thls approach to new cOm unity develOpn~ent.' L~articularly eritic~tl j~haps `*jrffld be problems of lo4~a and regional goveri~ibent arrangement~ city to cityfrelationships as well as c unty to-city ; and le~ii factors related to aj~flcatio4 ~if public funds and othe gov- ernmental ~ In most cases; 1 understa~id changea in State law ~ ould generally accomhiodate such an aj~proách. So*ie States would already p rmit this type of' program. In some ar~as, sites-F~deral "surplus" landholdi gs- could be made available. . TIlE OUTLOOR The problem of creating sound policies and pvograms to guide outlying i etro- politan development areas is complex. I would like to stress again that th fact of the Nation's urban growth is not arguable. ~he only issue is how this rban growth will occur. The most serious mistake ~e can make is to shrug o the difficult problems in these issues by oversimpi1~ed answers or naive solu ions. At stake here is no less than the pattern for th4 stupendous growth foreca t in U.S. urban area~ during the period ahead. I To focus this problem, we can recall the poi4s made in President John on's March 2, 1965, message to Oongress-"Problem~~and future of the Central City and Its Snburbs"-which pointed out that dur1n~ "the next 15 years, 30 mi lion people will be added to our cities-equivalent to the combined populatio a of New York, Chicago, Los Angeles, Philadelphia, Detroit, and Baltimore. ach year, in the coming generation, we ~vill add the equivalent of 15 cities of 20 000 each. At the end of the century-in less than 4t~ years-urban popubttion will double, city land will double, and we will have t~ build in our cities as mu~ as PAGENO="0427" DEMONSTRATION CITIES COMMENTS ON (By Carl F. Stover, I take it that I am This is rt a sub~~ towns. - tli URBAN DEVELOPMENT 451 hores. It is as if VIEw OF of Public Affairs, Washington, of the central C e as about the I Jf properly d - ~ties ~ Lace t~ PAGENO="0428" 452 DEI~IONSTRATTON CZ'1~XES AND ~RBAN DEVELOPMENT are also the ~retreat fer business and iudus1~r~~-I hear they are court ng even more of it, In the interests o~ sou~id economic ~1a~ntthig. ` O~f course, they ant the best kind-re~earcb and deve1o~nent and otb~er activites that do not cor upt the air or the streams and that,'by ~nd large, ei4ploy "the better people." By this process, the central cities are left~ with a poverty of leaders ip and of income at, the same time that they are giv~n greater and more difficu t socio- economic problems to face. The new towns wtll help to reverse this proc ss only if we are tough minded about devëlopthg them-and I doubt that many or per- `haps any, can or will be that tough. * ~** Certainly, new towns will take minoriti~-the "good people" am ng the minorities. they will take the middle class 4r the aspiring middle clas those who are or it~tend their ehih~ren to be professionals in the community. Thus, they will further rob the minority communitlis of central city of the lea ership they so badly need. What new town is going to install a plan~ied slum-an essential tr naition quarter for Integrating the 1owè~t income peo~le into the community? ow can any new town resist the dollar advantage of ~ippeals to exclusiveness that now make their real estate advertisements in met*opolitan dailies read like guide to advancement in social class and social stri~cture? What new town ill ask for its fair share of the dregs of human society-the despised poor, the uddled masses, the criminals and the delinquents who populate the worst sect ons of central cities an.d constitute their greatest p~roblems ? Frankly, I dou t that many or any wilL The only hope that new towns may be. sig$flcant for and help to do some- thing about the problems of the central city is~ in new town development by the central cities themselves. This is. a possibility~for which Mr. Gladstone ade a rather persuasive case. I think it could be rna$ë more strongly and hope e will get back to it-L-perbaps to talk about a speei~1e possibility in Oakland, Calif., known as Oakland East. However, even thisjpossibility will present pr blems unless the le&li~rs of the city are ~villing to ac4ept the fundamental respo sibili- ties involved in planning these ne~v eommuniti~s in relation. to central city needs and problems and engage, not just in planning~ but in large amounts of ontrol to make sure that the plans work out the way they were intended. The new towns will at best be irrelevant an4 at worst a negative influ cc so far as the central city's problems are concerned. They will become another way of turning away from those problems, ultimat4ly to the detriment of us 11, in- cluding the new towns, themselves. After all~ the only reason the new owns can have it as ~ood as they seem to be able to,~is that the cities have it 5 bad. * 1* ~* * 1~ * * CoMMEwrS. ON ~ GLADSPONE'S STAT~MFa~P-hOM~ TflE POINT OF VIuw OF A *~OXTY PLANNEE~ (By `Melvin F. Levine, Ohief Planner, i~owntown Progress, Inc. ~ Washington, D.C~) After the statement by Mr. Stover, even thqugh I do have the most f rmal downtown identity here, I feel moved to defend the suburbs. My problem I that I don't live in the suburbs. I do happen to live n. an urban renewal area, s ecifi- cally in the Southwest urban renewal area in ~shington. Now, ,I like ce~itral city living. I think one ~ the problems that follows from some of Mr. ~tó~er's remarks is that, If the con ~ al cities are, indeed, made ~ more livable, as Soi~t~west has proved, so many peopi will want to live in the ii ited central city area, that I won't be able to affor to live there anymore an I'll have to go to th~ si~burbs. . , I do not have ~t fori~ia1 presentation, because . the last minute I was ask d to comment as wel4 as to report. So let me run brough a list of things I ~ave written down In reaction to some of the remark ~you've heard and also in e ten- sion to some oJ~ the ideas that were introduckl, especially the one that Bob Gladstone cited and that Mr. Stover ended on, which is the if-you-can't- eat- `em-join-'em idea for getting the central city ft~ have some responsibilit for developing new communities to try to solve som~ of the problems of urban life. SIDMANTIC5 ~ First of all, as a reaction, a semantic proble4 cropped up. I discovere we are talking aboul3 "new cominunit1e~" rather tht~4 "new towns." This impli s to me that we are ~ot talking about independent `litical units but sort of tell- PAGENO="0429" DEMONSTRATION CIP~E:S D URBAN DEVELOPMENT 453 planned arrangements of hoi~sin~ an oz~i unity activities that are parts of metropolitan areas. J~ that i~, ir~deed, ha we are talldng about~-we11, what's new? Conceivably, by appl'y~ng the p 1 ci les of good design to large sectiotis of suburban areas and centr~l cities, o ç~ n have efficient amenable places in which to live. This can be ~IonE~ rig ~ ~io . The only difference between the application of good des~gu to larg~ ar a o~ urban development and to new corn- munities is that, sornehow, ~ n~w Co b ity has a mere readily identifiable physical entity. It's not a p~litica1 U it METRO 6 ~ ISM Secondly, there certainly jias been ~ nitlon among our professions, and I am speaking as a city pIani~er, that it es' nd suburbs, although separate pout- ically, are parts of metropo1l~an area ~ ~l h are the true cities. We are seek- ing, somehow, to eliminate thpne ~hlng ht~ inhibit freedom of movement within our metropolitan cities, so tl~at every o ~ regardless of race, color, creed, age, religion, profession, and sex~ cati have a ~ nge of opportunity for all kinds of activities. There are inhibitions to t I ~ ~ lit now, because of the facts: of dis- crimination and of political ~ouudari s Another thing that we wol~ld ~eek I ~ t~ e metropolitan area, to help expand freedom of choice, is a corni~ion tax a e. The inequalities of services and of tax bases produces un~ortuh~tte prob ~ s f competition between central cities an.d suiurbs. If we can solve ti4e ta as problem and reduce the discrimina- tion pro~Mems, thus allowing~ mote tr ~ o of choice for more people, then the new community issue beco4ies seco ~t r . It is just a question of a~iplying good design principles to ~io~-e ~arts f tj~ areas in which we live. . ~ "j:DE ~` r oPLu The real change, and Mr. StOver o cl~ d on it and I think Bob Gladstone touched on it, has: y~t to coi~ne 1~n the ~ oj~ e. I think that we all agr~e that we want an ideal community. Def~nitlo: ~ *1 1 ~Uffer as to what's ideal. ~ My defi- nition is : to have an ideal c~mn~unit ott ave to have ideal people. (And ideal people mean people like. yo4 ar~d me j agine,) I think we can all agree on a number of characteristics we wo d 11 e in an ideal community. We have professionals who can design ithr th S q aracteristics. The real question, as Bob Gladstone pointed out, i~ bo~ do ~i ~1 It? And then, if we could, somehow, eliminate the problems of t4x b~se i è ul ies and artificial political boundaries, and if we had freedom of cho~ee wt on discrimination, how much different would our metropolitan ar$s b~ in t r a f distribution of people and activities than what we have now ? ` There mig t not be much ôbange on a two-dimensional map. . In terms of amenities in ~hrE~e-dl ~ sh~ al design, there could 1e a lot of im- provements. This leads n$ tØ co ~l de that the real improvements in our environment, after we've s~lve~d th ro lems of political differences and tax base inequities', can come about oni by changing the people. This brings us into the area to which Pr~sident J b ~ has directed a lot of attention and energy during the past yeai~, to a w ole i~ nge of programs 4esigned for improv- ing the people-making the~u ideal ~ ph~ so that we can, indeed, have an ideal `community for them. I an~ talking w iso in the aftermath of the American Institute of J?lanners conv~ntion la ~ wE~ k in St. Louis. For the first time, to my knowledge, the main ~ t~iem~ of h t onference was directed at the impor~ tance of doing social and ~coi~omic l~4 lug. Although we have some know- how in the physical realm., th~ rea 1 ~ ovement In our cities and in our life~ is going to come about wh~u we ca ni~ ove the people SO that they can enjoy the benefits of the beauti~nl envi 0 n~è t we can create. . ` "M ~ ~ CITY" I'd like to close with son~e' c~mme a o the Idea of `the mother city. Perhaps we can tie together the co~ice~t of w ommunities in the suburbs and urban renewal programs in the c~ties~ `In t e istriet of Cbluinhia and in other cities, there has been recognition! of the f c t at the otily way in which to solve the massive relocation pro'blen~s tl~at ar o4ing about as a result of urban renewal, and of major public works~sttc~i as ~ e~fr ye a;rid transit, will be somehow to get out beyond the limits of t~ie c~ntra itf and ctse suhurban land as a relocation resource. I think perhaps we sho 1 at rt `. t~ explore how to combine the pro- PAGENO="0430" 454 DEMONSTRATION CITIES AND ~ URBAN DEVELOPMENT grams of urban renewal that are seeking to help make ideal living c ndition~ in central cities with the new community id~as for the suburbs to heli~ provide nice places to live out there as well. * * * * ~ * * * JOMMENTS ON Mn. GLADSTONE'S STATEME*T-A "Nuw TOWNS" Ex ERIENCE REPORT : RESPO~, VA. (1* James B. Selonick, executive vice president, Reston, Va.) Many basic planning concepts have gone ~4t~ the creation of Reston, ~ a. I'll touch on but a few of the more ii~portant ones. First, the result must b~ a total community oriented to the human being living in it. Second, these peo~1e must be able, if they so desire, to live in the same neIghborhood during all s ages of their lives. And, third, the environment we create should pro~vide an bsolute maximum stimulation of both minds and bodies. Obviously, all of th se con- cepts must be implemented in relation to an e4~onomcially successfully re 1 estate development. ~ VARIETY To aceompl4sh these objectives, we have ia~v!ded a variety of houstn types, ranging from ~onventiona1 lots for detached I~ouses to a 15-story highris apart- ment buikllng built 20 miles in the country and including garden apa. tments and clustered townhouses, all within easy w~tlking ~4istance of each ot er. In addiUon to the physical living accommodath$ns, we have spent literall years preplanning the community, so that when th~ first residents moved in, i would at once be alive with the activity we consider Ossential. This preplanni g will present our residents with opportuA~ities-not control their activity. e have sold land to church organizations with predetermined population levels, estab- lishing a point at which each commences construction ; we have made a~range- ments for elementary, intermediate, and high~ school facilities with the county of Fairfax ; we have planned and leased the ~rst convenience store, whi~h will be `opening neat month. We have construdt4d a broad range of recre~tional facilities : for golf, tennis, swimming, hors4ack riding, fishing, *boatir~g, and many others, The cultural aspect of our pl~nning has nOt been ignor~d but rather exnphas~zed. And, accordingly, we hav4programs for art classes, ~ottery making, extension courses available from neatrby universities, a lecture series, film programs, and we have even established ~n art gallery that will be ~imong the first retail spaces to open this fall. The staff of our first community center is actively operating as of today and will guide the first residents in establishing the kind of program they want. Each homeowner of Reston becomes a member of our home owners asso iation and those living in townhouse clusters will also become members of cluste asso- ciations, with responsibility for maintenance $tnd improvement of land wned in common ; they will aLso participate in and $view building plans withi these areas. We anticipate that these associations ~lll provide the base for p litical activity and sh4rnld result in the development 4f a sense of community re ponsi- bility as well asithe feeling of belonging. INDUSTRY In order to give the community balance and ~~rovide a substantial oppor unity for residents to work near where they live, We have allocated approxi ately one-seventh of our total land area to house re~arch and development an light industrial firms. We sincerely hope that our residents will take advant~i~ge of these possibilities and thereby be able `to use the time saved in commut~ng in participating in the Reston community. The industrial area has the addi lonal advantage of providing a tax base, which helj~Txs us pay our own way i the county. Mter a seemingly long gestation period, Rest~on has been born. Even t our own amazement, four industrial firms are alre4dy in operation at Reston, with three more having purchased land and having~ scheduled themselves to e in operation withifl the coming fow months. Thetattraction is obviously wh t we have created at ~Reston, since there is ample lad cheaper, closer to town. The first residents are with us and represen~t a gratifying range of in ome. Our first townhouses, ranging in price from $~,0O0 to $46,000, have bee pur- chased by a very substantial number of people darning under $10,000 and a most as large a number of people in the over $20,000 category. The first sampli g of PAGENO="0431" DEMONSTRATION pIT~E:S D RBAN DEVELOPMENT otir rental units, whic1~ range from $1~5 a onth to $270 a month, leads u~ to conclude that this range will be ~ubst4tn ial y increased by the rental segment of our housing. We believe tI~at the p~o le ~ ttracted by the environment we are creating will be compatible w~thin a w ci r nge of income ; segregating housing within narrow price categori~s is a di t st ful alternative. Obviously 5 years will be required to determine the son d e~ of this proposition. But our first residents are pleased and our units ar e~1i g. Our next housing units will be under construction next year ~tnd will ~ e hi at a slightly lower range, about the $18,000 area. LOW-cos EO SING A possibility of going belo~v this p 1 e, I relation to our land development and basic construction cost, ~eex~is re *te~ Our best opportunity for low-cost housing is in the rental field, where v iota Federal programs are available to us. Next year, approximatel~T 100 un t Qf housing for the aging will be under construction under a section 202 pro i~ m nd we are prepared to construct a building under section 221(d) (3) as ,s * a~ sufficient number of qualified work- ers, or prospective workers, ~ron~ our ~ dtI trial commercial areas indicate the need for such accommotjatioi~. We h v ~ Id that we will provide housing for anyone who works at Reston ~nd we I te d 0 fulfIll that commitment. Much that we propose shotild stim j t~ he appetite and eultivate the tastes of our residents, thereby enaiTd1n~ the o artake of the obviously superior cul- tural and educational' facilit~es ~vaila 1 i the central city. We are convinced that people involved in the c~m.n-~unit ~ i~ a renewed sense of identity and be- longing, will make better citi~en~. T ~ is learly the challenge for all of us. Mr. BARRETT. Mr. Fat, I cert i 1~ `want to thank you on behalf of the subcommittee for a v~ery exc ii ii `and informative statement. It is one of `the finest statem~nts we a e eceived thus far. Mr. Fay, I would like ~o ask y t same questions I asked `Mayors Cavanagh and Lindsay ~nd also1 a or Daley last week. Some peo- pie have the fear that tI~e redei~a c ordinator which the bill will set up for each demonstra~ion city r gram would be some sort of a Federal dictator, or as ~he~ cal he , commissar, or czar. Now, I think the bill is clear that he wo 1 r~ot have dictorial powers. But I would like to ask you the two que fon~s.: First, would the people who i~y~ `such fears feel better, do you think, if we renamed the Féder 1 dii ial as a local coordinator rather than a Federal coordinator ~ Second, do you think the idea ni kingthe services of the coordina- tor `optional to participating cit~e r ther than mandatory as now pro- vided in H.R. 12341 is a ~ood on Mr. FAY. Mr. Chairi~ian, I h $ your expressed feeling that the Federal coordinathr-and iran 1 , would prefer to call him a Fed- eral expediter-would 4~iot bec e czar or a dictator in the corn- munities. I don't thii~k there i nything sacred about the name. But is it a fact that in ±nai~iy c rn nities we already have operating within the framework of the i y overnrnent a local development coordinator. The number of s h ositions is really surprising, and is probably an outgro~th of t ti le that used to be around, urban renewal coordinator. I would hope that the title ~o 1 not be frozen so completely that it might impose a hardshij~ frp t is point of view. And I really don't believe that the situation ~v ul be very much changed by what- ever designation might be give~i hi Again I repeat, I se~ the fur~c io of this man as an expediter con- cerned almost entirely with th~ e~ edition and facilitating of clear- ances and benefits under the F~d r 1 programs flowing into the local- ities. I don't see him ha~iing~ ny opportunity for direction of the work, nor the selection of 455 PAGENO="0432" 456 DEMONSTRATION CITIES AND tURBAN DEVELOPMENT And on y'our second point, I feel th~t such an individual w uld be an essentUL~ member of any demonstd~ion or coordinated evelop- ment progr~Lm. It is almost inconeeivajble to me that a demon tration or a progr~m of that magnitude cou'd be carried out with ut the expediting services of such an indivithial. Mr. BAi~it~rr. I would like you, if you will, to comment on the optional versus the mandatory. Mr. FAY. On the matter of the optional point, which is hat I attempted to cover just a moment ago, ~ut apparently not ade uately enough, my own feeling is that this m~n would be an essentia mem- ber of the tØam. And, therefore, I woujd have no objection to aving it a mandatbry requirement. I think ~obably our association would feel the sam~e. I Mr. BAREIrr. Thank you. Mr. Wid4iall? Mr. WinN~u~. Thank you, Mr. Cha~man. Mr. Fay, you indicate that $2.3 billith is not enough for jus 60 to 70 cities. What do you think would be enough? Mr. FAT. That is a difficult questioi~ to answer. And las week even some of the best mayors in the coui~try were not able to tr nslate it in terms of what could be used in thejr own communities. I think, obviously, if we are going to snake 60 or 70 demonst ations we will probably have to have several ti~nes that amount. I thi ~k we need the 60 o~r 70, demonstrations to eove4the fiehL Mr. WID~ALL. As I understand yo~ir testimony, you're ecom- mending that the demonstrations b~ con$lucted in cities of grea van- ance in size, so that we will get an exanliple ~ of what exactly y u can do? Mr. FAY. Yes, sir. Mr. WIDNALL. What do you think would be enough for the ntire country ? ~ Mr. FAT. We have not made any j4ojection of this point. We would be glad to try to do so and to furms~i itto you. Mr. WIDNA~JJ. I would appreciate it. I May it bef*irnished for the record, Mr. chairman? Mr. BAima~r. Without objection it is s~ordered. (The matter requested is as follows :) ESPXMATED COST OF 60 To 70 D~Mq~STEATIOT~ PROGRAMS The administration has suggested that $2.3 b~11ion will be needed to fun dem- onstration programs in 60 to 70 cities over th~ next 6 years. Precise in orma- tion, however, is not available on bow this I~otal fund would be distr buted .zmong various s~izes and types of communities. ~ Statements by the administration and news~~aper articles indicate that there will be three eIt~-size categories-small, mediu4~, and large. In addition, t has been suggested that the amount o1~ funds to be ~made available in each ca egory will be approxii~iate1y equal. Estimates have ~41so appeared indicating th t the number of larg4 city demonstrations will be l~etween 5 and 8, the num er of medium-size cit~T demonstrations between 10 a4id 12, and the number of small city demonstratioflabetWeen 40 and 50. Based on this information, it can be assum~d that the annual share I the approximately $400 million for each city-size ~ category will be roughly $130 million. If it is further assumed that five denionstrations are to be cond cted in the large city size category, it can be state4J that the annual suppleix~ental contribution per demonstration in this categor~ would be in the neighbo~hood of $26 million. However, if eight demonstrati~B1s are èonducted in this cate- gory the annual supplemental contribution to th~ program in each city wot~ld be reduced to $16.2 million. Similar shifts in th other two categories p uce similar results. PAGENO="0433" DEMONSTRATION CITIES 4 D URBAN DEVELOPMENT 457 Until the cfties make flri~ proposal 1~. ar~ certLtled as acceptable demon- strations, j:t appears 1mpos~i~4e to p ~ i~e ~v estithate demand per city or per category. Moreover, in the ~bs~nce f su h estimates it is difi1~u1t to predict what the total demand will be~for the e t re rogram. After careful review of th~ testim i~ o~ seve~l mayors who have appeared before the subcommittee, and an 1~ivest g tlö into the durrent bw~getary expend!- tures of local units of genet~tl-p~Lrpos o~ riiment, we are prepared to say that demand for demonstration f~ind~ mig ~ b~ expected to run somewhere between the suggested $2.a and $10 b~llioti, 0 ju ~ment is based on the tact that cur- rent proposals, especially in the large ~! y ategory, are running far in excess of the maximum possible allot$ent und ~ l~. assumed breakdown discussed above, and the somewhat eontradic~or~ fact t a~ many current municipal budgets are running so low that even the proposed ~ ld~ ents would ha~e a significant impact on their local development pr~ble~ns. * ~ , In other words, precise estimates ~ . he total cost of the demonstration cities progrttm depend a greatdealQu t~ie di tlb~ Ion of ~ties inand among t1~ various size categories, the magn1tr~de of ii i~ ~the cities selected, and the current expenditures by the genera ~pu~pose ~ v~ n~nent in the selected demonstration cities. None of these factor will be o~s~ until all th~ proposed demonstration cities are selected. ~ ~ ~ ., The only published `estim te ~or a E~t4 nst~tiou program that sets forth a detailed breakdown of the c mp~nen o t e proposal would be that put forward by Mayor James H~ ~. Tat of ~h1l el ~ Ia iii his testimony before the Sub- committee on Housing on ~Iar~h 21. T~ Philadelphia demonstration, as sub- mitteci, could use up $600 m1~lion of th~ st~ atecl$780 million that would be avail- able to this category. Hence, to'tal~ né~~1 in tl~1s ~ category depends to a large extent on whether one o~r n~ore éltie~j f ~ mpar~ble size and with similar prob- lems are selected for demor~strt1tion ~ O~E~ ts. ~ The same case could be made, of course, in the other cityslze~catègori~. ~ On the other hand, If Øtie~ ~re s~e to ~ have relatively sni~ll budgetary expenditures at the presenti time, an~ l~~ e are i~ny. 1f1 this class, the program could have a significant iiIip~ct *ith l~s ~ der~iexpei~iture. Therefore, NAHRO sug~ests in i~e f these indeterminate variables that rathei~ than projecting "der~ian41" foi~ * re r~m funds, which would probably run into hundreds of `billions ofdollars~ o ~ ress should consider earmarking $10 billion of our Nation's res uroes fo~ 1~ implementation of all proposals that might qualify for fi~ids u der the 1~i~i slandards, which we understand that the Department of I~usin ~nçL TJr ~ L~ velopmer~t plans to establish. In this way, and perhaps only In t Is way, a M~ avoid the obvious ambiguity involved in speculative figures i~eg rdiug' th ot cost of the program, or the a~rage demand per city or cat~igor . 4t t e ~ e time ~çe would eliminate discrimina- tion against cities havUiig rogra~ns t a~ u~eet the qualifications, but fail certi- ficatlon for lack o~ fun~js, nd free ~ z~sé yes of the responsibility of prejudging ~ ~ the exact number of demon~trat1ons ~ e4 d to fulfill the intei~t of the program. NAHRO feels that. a $li~ blüion. è i~r~ would strike a wdrkable and healthy . . balance between the aclmii~istratlon $ estmate of what can be done Immediately and the cities' estImates of what t ~ ~ uld need to develop their communities . . In the way they would l1k~ to tiltim ~ :t l~ see them d~v~loped. This figure seems to be a realistic estImate ~f ~hat ~ ~t ght expect the public to de~rote to this area-roughly 10 peree~t ~f the ~Fe r~ budget ~nd 1.4 percent of the N~atlon's . gross national prod1~ct. . . Mr. WIDNALL. We kav~ an r~ ed $`T.6 billion, and we have corn- mitted $5.4 billion. We 1*ave icj out only $1.5 billion, and the pro- gram has had 16 years to ~ro 1~i 0. Dø you or do you not believe that the urban renewal o~eration s ~ id be speeded up before it see1~s additional funds? Mr. FAY. The a'moi~nt whi ha been committed, as I understand it, is not available forthe use f ~i ies other than those to which it has been committed. So thai it e m to me that we are coming fairly close to the limitation~ o1~ the p è~ nt fund. As a matter of fact, the urban renewal progr~m is a ~ a y out of money for all practical pu~oses. ~, . , ~ . . ~ F F , ~ , F~ PAGENO="0434" I 458 D1~ONSTRATION CITIES AND . RBAN DEVELOPMENT Mr. WIDNALL. There seems to be a ~Onsiderab1e time lag b tween the `commitment in the beginning of the~programs and the cons mrna- tion of the programs. Mr. FAY. That is true. Mr. WIDNALL. And somewhere along the line I think Co . gress ought to be `able to do a better job in ~xpediting and the full! iment of the dreams that everybody has as far ~s urban renewal is con ~ rued. Don't you `find that the time lag in mar~y instances is very helj~ful to theproject? ~ Mr. FAT. ~There is no question about~it, Mr. . Congressman. (Those of us who a~re attempting to carry ou1~ such programs have ~ndeed found it to be that way. ~ I might say that a part of the proMem has been uncertai4ty of cities to~und~take even the most general kinds of preliminary pla~ming until they were reasonably certain that knds would be availabbE~ with which to undertake the program. And then by its very nature, the urb~n redevelopment program is a long, drawn out process, involving ma4iy approvals at many levels, and some of 4he most complicated and di~fficult types of problem ~ that we encounter in our cities. Mr. WTD~4LL. Do you have figures c~n public housing ? W at I have in mind is this, whether or not you lknow the percent of tur over in the public housing program? Mr. FAT. I would not know the general figures. We coul get that for you and furnish it to you. In our situation in Richmon our turnover is about 20 percent. (The information requested follows :) TURNOVER, LE~aT~ OF SPAY AND REASONS F04 Mov~our IN PUBLIC Hous NG The latest availaMe figures from the Public ~Roui~ing Administration r ports indicate that U~ annual average turnover for itbe fiscal year ending Ju e 30, 1965, was 21 p~cënt. Figures for recent fiscal years are : 1964, 21.4~ per ent; 1963, 21.8 percent ; 1962, 22 percent ; 1961, 22.7 pe*ent. Ooniparable figures in private real estate management are contained i the Apartment Experience Exchange of the Journal of Property Management. This is a pttblication of the Institute of neal Estate 1~anagement and covers inf rma- tion for over 40,000 private apartment units' hi all parts of the. country. The rate of turnover for calendar year 1964 was : ~8.3 percent for elevator a art- ments ; 24.4 percent for walkup apartments of ~2 to 24 units ; 2~.1 percen for walkup apartments of 25 or more wilts ; ar~d 40 percent for garden type apartments. . . The reasons fc~ t~1rnover and length of oecu$jaey are varied, although here are obvious re1i~tionships ~vltJi age of bouseh4i~ and hou~ing opportun ties. Recent figures f* families in ~blk, housing indicate that the average léng h of stay is about 5 years. The breakdown of lengtl$ of stay for eligible tenan s in' occupancy in fiscal 1964 is : ` I Ni~mber of eZ't~Jible fa~m4Ues in public hoasing k,eupancy (~6O,96O familie ) Percent . Pe cent Year of admissiofl : of total Year of admlseion-Continued of otal 1964 3 195~ _ 5 1963 - 18 195~ 4 1962 - 15 1954_.._ - 5 1961 - 11 195t~.. 4 1960 ~__ 8 195~$ - 3 1959 7 1~ijorearlier__ 7 1958 ~_-- 6 1957 - 5 T$al 100 PAGENO="0435" DEMONSTRATION Cfl~IES A D URBAN DEVELOPMENT While the Public Housing Adminis r, tb does not report rates of turnover of length of stay by age or cha~aete I ticS of household, it is the e~perlenced opinion oi~ many local honsh~g a4~1mlnst at i~s that the siuallest turnover occurs among elderly households w~o are a ~ ~ ~ flU of the family cycle and have no potential for increasing theirtii~comes. The reasons for moveout ag~in a e v~ ied but strongly related to stage in the family cycle of the ind~vidtial f ~ il~ type of employment, and access to housing opportunities. In ~nbiic h u ip , reasons i~or moveout are not only varied, but directly related to the pa tc~ r purposes of the program, including the fact that families are ~ow inco . hus, in addition te such factors as changes in family composition and ç~i ~ stance, there are such contributing factors as evic~tions for eve~lncome, a ~ f r nonpayment of rent as well as for a variety of economic and so~ialmot1 a i~ s including the eb~ and flow of employ- mont and housing opportiini~ies ~n th c na unity. on the average, some 10 to ~ pe C nt f public housing families move every year to pnrchase their awn, homes ; ~i s~ are largely young families in the first stage of the family cycle1 whose ii oip has risen while in public housing occupancy. Mr. WIDNALL. Wha~ is the er ge 1ei~gth of stay of a tenant iii public housing ? Mr. FAY. About 4½ ~years. T a again is our own experience. Mr. WIDNALL. Are the rea o s or. leaving basically a change in the income or other reasons? Mr. FAY. There arc many as ns. We have been attempting to follow the progress of public i~s ng tenants from the standpoint of income and their own] ek~vati 1 1 ~ society. And we have been very pleased to notice over th~ pa t 20 years that ~bout 10 percent of the families that go through ou ii lie housing projects move out to buy homes of their 0*11. To b ~ re, these homes are not fully paid for, but at least they have r g essed from the point of requiring public assistance to g~t a roo V their heads to a point where they will be becoming in effect tax yj g citizens and responsible members of the community. Mr. WIDNALL. Ar~ tl~ose o are receiving public assistance the ones who normally stay in p li housing the longest? Mr. FAY. I think i~he ones w o stay longest are the broken families, and the elderly won~an whqs l~ sband perhaps has died and whose children have moved~ away, ~ d ho now has the illnesses of age, and on that account ther~ is ~o p o ~ ct of her improving her situation,. Mr. WIDNArj~. Thank yo ~ ~ or constructive statement. Mr. BARRETT.' Mr~. Snlliv ? Mrs. SULLIVAN. I 1~ia~e ju ~ ~ question I would like to ask Mr. Fay. It was suggested last we b one witness that there would be so many difficulties in sel~ctin th demonstration cities that we should encouragE~ all cities' to ma th ir plans and then put all the names of those offering f~illy qu ~i e plans in a fish bowl and select the cities by chance. From yo r te timony you don't feel this is the way to do it. 1~{r. FAY. I think it ~nig t be the quick and easy way to do it. ` I~ut I am not sure that1 it ~voul , be he most satisfactory in the long run. Mrs. SULLIvAN. But yo ~ o feel-I think you mentioned in your testimony that you feel-t . t 6p or 70 of these cities would be needed to participate in oi~der to h ~ e ~ fair evaluation of whether the demon- stration cities program i~ ~~essful? Mr. FAY. Yes, thadam. /1 o~der to provide a complete cross section of the various local cond~t on~ in various . population brackets that have been described by th ~ecretary. That does not give a very 60-878-66-pt. 1--3'O / 459 PAGENO="0436" 460 DEMONSTRATION CITIES AND 1!TRBAN DEVELOPMENT great opporbinity ~ for anything more~ than a broad genera cross section of the country as we see it. ~ Mrs. SULLIVAN. I agree with you th4 they should not all cities of the same Size. We must have a vari~y o~f sizes in order to b able to make a p~per evaluation. That is alk Thank you. ~ Thank you, Mr. Chairman. Mr. BAi~im'rr. Thank you. Mr. Harvey? Mr. HARvi~. Mr. Fay, you ~have made~ a, very fine statement. I just have one statement. I wonder if you could tell me hat would be the costs of thesev~.rious amen~lments as you propose. Mr. FAY. As I pointed out, three of th4m would not have any osts involved. The costs of the others, 1, 2, $.nd 4, is something tha we would have to get some information on. i~ud we will be glad to do that and furnish it to the committee for the reoo~d,Mr. Ohairman. Mr. HARVEY~ I would like to have that f4r the record. Mr. BAiu~rr. Without objection, it is so brdered. (The information requested follows:) COST OF NAHRO's PROPOSED AMENDMENTS P4 piu~ bUSING Acr OF 193~ As indicated in our testimony, three of the six~pro~po~ed NAHRO ainendin~nts would have no financial impa4~t on the ~edera1 ~ontribu4ion. ~ The~se are : Amendment 3. Ameniment to t1~e Zangtiage of ~he .Hou~sin~g Act t~ encouc~~a,ge good as weU c48 eCOflO~fl4O~t 4esiIJ~ ~ . Anu~ndment .5. Ai~t7.,ori~tion for over-inoome te~vin,ts ~ remain in occup~ncy . anti pay ecc~o~n4c reivt . ~ Amewiiaent 6. Authorization for aai~ of portion,4 of iow-rent hou$i~g deve~op. me~ts to nos'proflt lt,oasing sponi~or8, ~der appropriate ciroumstance$ The remaining three proposed ameiidments coulid have some financial inip4ct, although in two eases (Nos. 1 and 4), the Fede~a1 contribution could be ~he same or less, depending on the a1tei~naUve selected. ~ ~ Amendment 1. Anzeniment to permit modernizati~pn and updating of older low~ rent ho'using devekYpment$ (a) FuU fta~ed an~w~al catrib~tio~.-NAHRQ re~emmends that the full fix annual contribution be made available to local hon$ng authorities, with residu 1 receipts (after oj*i~ating expenses ~Id reserve : 4locattons) going either f r modernization. and ~ipdating needs or for prepaym~ut of existing bonded de t. The full fixed auuu~l contribution avai1able~to 1o~1 housing authorities und r contracts with the 1~ublic Housing A~n4inistration f*r fiscal 1966 is $253 milho The amount actually to be paid,. after d~duetlo& of local housing authorit residual receipts, ls~esthn.~ted at $233 million. If the full fixed annual contr~ bution were available, it would mean an additional t~esource of some $20 mililo for local housing authorities. This additional finanØal resource would be mo immediately useful to those authorities now re~urrdng residual receipts to th Federal Government, but which have medernizatioiZ and updating needs whic cannot be met by present reserve fund restrictions iaud inadequacies. If soin portion of these residual receipts were used to p~pay existing bonded debt it would result in a i~iet saving to the Federal Oovei4iwent because of reductio in interest costs. Availability of . the fixed cont~thution would also mak possible a more effe~tive budgeting p~cess for a1~ local housing authentic because they could a~iticipate the amount of Feder4l contribution in advance, without having to wait for the actual income and ~zpense at the end of the fiscal year. It would also encourgae eciiiomical man4gement since any residual receipts would become available for nee4ed and desit,able local purposes. This amendment would provide for ati additional ~edera1 contnibii~tion (now authorized, but not aj~propniated) of about $~Q millièn annually. However, in the event that some of this additional contribution were used by local housing authorities for prepayment of bonded debt, it could ~resu1t in a net saving in Federal expenditure. . PAGENO="0437" pEMONSThATIO~ CITIE~ IYEBAN DEVELOPMENT 461 (b) Extension of amorti~a~tiçn p~ri Z. For those local housing authorities now requiring the full Federal cont I utt n to mathtain low rents and achieve financial solvency, it is re?omiàiiend d tii~ t another tool ~ be made available to achieve desirable thodêrnIzatlo~ an p ating of older housing developments. The proposed amendment would ~i he Ize that the amortization period for a housing development reilu1rtn~ mo e I ation could be extended beyond the 40-year period, up to an ad~itithial 1 ea S. Development costs of this develop- ment would be reopened an~1 the capt 1 ~ st of modernization added to the total development cost. Aunua~ coi~trib ti ~i$ from the 13~ederal Government would also be eztended for the pei~iod, up t ~ 0 ~ ars, to assist In paying the debt service on the capital cost o~ mode~niz~ttion t he present time there are some 200,000 public housing units built in the p ~i d 9~7-49 which have a priority need for modernization and upda'tir~g. ~pe ~ nc indicates that modernization costs run about $2,000 per dwelling ~init prod c i~ a priOrity modernization need of about $400 million. The financial in~pact f thj amendment would be short range, and would Involve one of annubi c~ntr1 u I~n already authorized und~ir the Housing and Urban Development ~&ct of 1 `6 . It would reduce to a limited amount some of the public housii~g ~utho ~zat~ n now allocated for new housing con- structlou. Meeting a pr~orit~y m~ rn~ ation need of 200,000 units and $400 million would tnean a redttOtibn of!~ ~ 6 percent in the 140,000 public housing units scheduled for new con~truc~i nder the 196~ authorization. The net economical affect wold be to ~xten~ 1~ useful life of these older ~ubllc housing developments perhaps an addition~tl 21~ years, at a cost far less than new con- struction. I Amendni~e.nt 2. 1~evitiion ~f the pr~ sip on epeoiaZ subsidy fOr the elder'y Currently, there are au es~imat$ 16 ,000 elderly households in public housing occupancy. About 85 pe~cent or ]~$ , of these households have incomes of less than $2,700 per year-th~ income ri ce ary to pay the monthly operating cost of $45 per month and not exceed a ~- ut- ncome ratio of 20 percent. These same eldevly families with incomes un4~ $~ TQO now pay an average rent of about $30 per month. The gap between ~ t$ and operating ~ost. produce4 by elderly occupancy is made up by other te a t fawllles who pay rents over $45 per month. Under the present prov~slo~is of t e ecial sub~'idV for the elderly, only those elderly who reside in h~usi~ig o ~ ate by a loàai hofising authority which can prove financial insolvency at t e ~n of a fiscal ~rear can benefit from the additional subsidy up t~ $10 per u it er mouth. The cost to the Federal Gov- ernment of this addltiopaI boiitr b U for elderly in fiscal 1966 Is estimated at $5.2 million, NAHRO proposes t~o p~ssibl all~ rnatives in revising the special contribu- tion for the elderly, in~ or4er t e~i ye the situation of elderly now paying In excess of 20 percent of thei~, Inc e ~ r rent and to enable local housing nutborl- ties to a~1mit addition~l n*mbe s o~ ow-rent-paying elderly while maintaining financial solvency. The fii~st al e n~t ye is to make the present $10 a month con- tribution available for all elder ~r j~j ubllc housing oc~1ipancv who cannot meet operating cost rent wl~hot~t exc e in 20 percent of income ; this would be irre- spective of the finanç4~l st~billt f t e local authority program. In fiscal 1966, this would mean an a~uiuál eox~t ibU ion of about $16~5 million-an increase of $11.4 mllliofl over the ~res~nt el~1e l~ ontrlbution. Thesecond alternative would be to make available ~ monthl~ co~i ributlon (for all elderly who cannot meet operating cost rent without pa~ g ~ nt in excess of .20 percent of their income) based on the actual ~iffe~ence b t* en whl~t elderly can pay (at 20 percent of income) and the acttial ~ost ~ op ration. In fiscal 1966, thIs would mean a monthly contribution of Etbout $ 0 er unit ~ (the difference between about $25 which the average elderly hou e ol can pay and $4~, the average monthly oper- ating cost) . Since ei1~her such ~` vi~ `on in contribution would have a `continuing impact on the public l~ousing a t orization and the ability to develop new housing units, it Is recommei~tdec~ tha ~ he elderly contribution not be taken from the present authorization but est b ish d as a separate authorization and funded separately, so as no~ to red d tb total numbGr of new units which can be assisted. To adopt the first al er ative would mean an additional authoriza- tion of about $11.4 mi~liozj per e r. Amendment ~. Write1fown of q~ d f pv~bUo hou$ing o~t8ide ~&rban re~ewa~ areas Providing a simll4r p~ov1s o fb writedown of public housing sites outside urbnn renewal area~ as now a ph `S to such sites ~Lnside urban renewal `areas would result either ~n no dl ~ en~ in the Federal contribution or a slight in- PAGENO="0438" I 462 DEMONSTRATION CITIES AND URBAN DEVEI~OPMENT crease in this ~~ontribution depending on whk~h alternative method is s lected to pay such coi4ribution-an amount chargeab1~ to the annual centributio S con- tract or a dire~t grant. . An example will illustrate the working of the formula for writedown nder section 107(b) i~f the Housing Act. Assume that a particular site were ac uired for public housing outside an urban renewal area and the per dwelling Un! cost of acquisition, relocation, demolition, etc., were $5,000 per dwelling unit. T e re- sale price is estimated at a market value of $2,500. Under the formula stab- lished in section 107"(b) of the Housing Act (f~r public housing and mod rate- income housing sites in urban renewal areas ) a `Federal contribution of on -half of the difference between acquisition cost and resale cost is avaii~ble. Ph~ts, in the example cited, a Federal contribution of $1,~bO per unit would be avai~able at the construetion stage of the housing develop~ient. If it were dete~nilned that the method by whic~ the Federal Government ~ould make this write~1own contribution available wt4s by charging it to the ai~nual contributions coi~tract, there would be no incre4se in the Federal contribu~ion. It would simply mean that annual contributlons~ would be staged to make i~iore of the contribution available at an early stage to ~cover the costs of writedo~s~n. If it were determined that the method by which the federal Government w uld make this writedown available, was by a direct grant ( as is the case for oth public housing and moderate-income honsing inside renewal areas) , there w uld be a small increase in the contribution equal to the difference in interest r tes by which the Federal Government could borrow the grant money at the g ing Federal rate (currently about 4.0 percent) or fii~ance long-term public hon ing l)y the issuance of bonds (currently about 3,5 $rcent). This method w uld have the benefit ~f being uniform f~r all housin~ assistance programs-pu lie housing and moderate income-both inside and o~itside urban renewal area. Under either $ternative way M disbursing 4~rant money, there would be benefits, other tha~n financial. Slum sites would ~be more readily available or public housing censtruction and a more accurate m4~asure of the true construct on cost of public housing, without supplementary cosls of slum clearance and r b- cation, would be provided. Mr. HARVEY. I have no further questions, Mr. Chairman. Mr. BARRETT. Mr. Moorhead? Mr. MOORHEAD. Thank you, Mr. Chairman. Mr. FAT. I share your concern that the $2~.3 billion is not enough o do the job for 60 or 70 cities. If we are face4t with a very rigid budge- tary limitation o~f $f2.3 billion, what would ~fou think of reducing t e 80-percent figure to say 50 percent maybe w~th an escape clause of up to 80 percent in 1~he case of extraordinary ne4~cl ? That would tend o spread.the$2.3 billion. Mr. FAT. This would be the grant formuM that you would propo~ e to reduce. I think that would probably still be attractive to the communitie It undoubtedly would not be as attractive as the larger amounts. Bu here again I would hope that we would have enough cities intereste so as to make the d~mon~tration a valid one. Mr. MOORHEAD. Thank you, Mr. Chairman. I have no furthe~r questions. Mr. BARRETLP. Mr. St Germain ? Mr. ST GERMA~th. Getting back to one as ect that Mrs. Sullivan covered, I ask you this question. Supposing hat once the criteria of need and necessity and eligibility were arrived at by the Secretary of the Depaitment, then the Secretary would balance the applicants against these criteria as to eligibility, and determine which cities have the greatest need or are best qualified, and then so to speak put the names of these cities into a fish bowl. Once they determined which cities were going to be chosen, suppose they theh form teams, one, two, or three teams of expert planners. It is my ~understanding of this act, the Demonstri~tion Cities Act, that the P~ur~ose behind it is to PAGENO="0439" 463 DEMONSTRATION CITIE ~ URBAN DEVELOPMENT come up with an overall solutior~ t t e overall and total problem exist- ing within large eomn~tinities, 10 i the case of some smaller com- munities, in the entire ~om~nun~t , t e problem being one of not only physical improvement, I but soth lo ical and economic improvement. But if we want to real~y solve t is, and come up with demonstration cities or models as to hGw jt ca ~ es be done. It seems to me that we should take the best talent ~we ~ v~ available and make sure that the moneys we are going tb spend o ~ ese demonstration cities are well spent, instead of haphazardly o ~ g that from city X, Y, or Z we are going to come up not ~1timate ith a good plan, but rather take those planners that the Secr~tary k ~ s from experience are well qualified and have them direct the bro ~ c ncept that i~ going to be utilized within these cities of yarying sze~ I am wondering if you feel that perhaps this might not be a b t er method than that method whereby the cities are picked thid the h~ are given a grant for the period of a year to prepare t1~ios~ pla , ~ d then subsequently they put these plans into effect, if they are ep rable. Once again, the Secretary stated, incidentally, ~hen he pp ared before us on Monday of last week that certain citjes ~vou d be given planning funds, and it was logical to assume th~t the c t es that would be given the planning funds and which wou~1d repo t a~ within a year would be those cities accepted because of ~he fact t ~t they had been spending funds and a year's time to come up witi t es plans. Therefore, we have a situa- tion where it is not a questio s o which cities have come up with an expert plan, but it is going t e u'dged or turn on the pointof which cities have an acceptable pla Now, I wonder if you coul4 gi e us a comment on these two varying positions, Mr. Fay ? / Mr. FAY. Perhaps it mig~it be well in order to establish a common basis for our discus~ioi~ for ~ e t point out how I understand the Se- lection process generally wo~i ci ork, and then I will respond to your questions. I It is my understanding t~i t ny city which wishes to do so would submit a proposal i~hièh w~ ld not be a detailed expensive planning concept but would ~nl~ be ~ ta ement of the goals it would expect to accomplish in the demottst$t oil if it were selected as one. Mr. ST GERMAIN. A~nd ~ eli ye, Mr. Fay, that this would also in~ elude an outline of the ~ieed~ `f t at particular city. Mr. FAr. Of course ; ver~ u Ii so. And then the selection, ~ I nderstand it, would be made by what- ever kind of group, pi~obaI~l b a blue ribbon jury, which might well include som.e of the outsta di g planners of the country, which of those basic propo~als sho~il e accepted. And then the 90-percent planning funds would be re ted to that group. And within a year they would come bacl~ in t ir etailed plans for the demonstration. I would hope tlliat we ul not lose sight of the need for experi- mentation and de~nonstr ti n, and that the matter of need, whith I know to be of theivery gr te~ importance, might not sway our judg- ment as simply being a a s of utilizing these demonstration city funds to take car~ of an xtre ely complicated and difficult problem. If we did that, we migh n up by taking over half a dozen major problems around the cou ry. but we might not have any demonstra- tion or experimer~tal resu t w en we finished with a program. PAGENO="0440" I `464 DEMONSTRATION CiTIES AND I~RBAN DEVELOPMENT So that I would still hope that the d~rnonstration aspect wo id be one of the principal criteria against which these proposals wo ld be evaluated. Mr. MOOREEEAD. Would the gentleman yield? Mr. `ST GERMAIN. Yes. . Mr. MOORJL~EAD. I would like to ask, ~jhat about a city that h s aT- ready done it~ planning? Would you saj~ that it would be prop r for it to submit a detailed plan arid request 4 grant for an action de on- stration, not ~iecessari1y `to go through l~his planning request s age?' Or is that not your understanding ? Mr. FAr. It is my understanding that the basic proposals won .d be' reviewed first to make sure that everybody was considered on a f irly equal basis, and that when the groups were selected from those sub- mitting basic proposals, then the city which has its homework one could come in very much more quickly. Aiud it is our feeding that er- haps they might within a few weeks or tnot more than a very few months be ready to go. ~ But I would~ not think that it would be~desirable at this begin ing stage for a city to come in with its prepar~tion in great depth un ess they have it all ready, because even if you thave a good staff and a lot of data it still would cost moneyto prepare ~uch a proposal. Mr. ST GEEMAIN. Mr. Fay, the Secretary testified to this proced re, that they would pick out the 60 or 70 citie~, and then after plann ng funds were available it would probably be a year before they cam in with detailed plans. Once again I repeat, it is almost a foregone c n- elusion that these cities, once initially chose~a, once they complete th ir plans, and theseplans are implemented-I ~y to you, do you feel ti at this method is a method that is going to be~t achieve the result of t e demonstration cities where we have no assmjance that a great many of these smaller citi~,s will be chosen ? You talk about an acro~-the-board situa~on in your testimony ~ n page 4. We feel that cities of various sizes ~with different type pro - Tems and difFerent locations should be the cities chosen as demonstr - tion cities, so that having a class or category subsequently we will ha e an example to look at ? It seems to me as th:pugh we don't have muc assurance of the fact that we are going to get~good demonstration cit plans from a lot of these cities, under this particular procedur Mr. FAT. Here again, Mr. Congressman, th4 original selection woul bebasedonthe-~- ~ Mr. ST GERMAfl~. The seven oreight gnidcli~ms? Mr. FAY. YE?S, the very general kind of prop~sa1. And then when the Secretary considered aitd evaluated the demon stration capabilities of the entire group, at that point he would author ize the execution of a contract for the planning grant that would permi them to develop the kind of carefully worked out and detailed pro- grams that would provide the guide for the co~duet of the demonstra- tion. Mr. ST GEEMAIN. I guess I will have to let 4hat one go. You state that you feel that once again 6O~ or 70 cities should be concluded, and further down you break clown ~he $2.3 billion. If you are going to have e~p'ert planning for those 60 70 cities. and you are going to have a variety of sizes and tynes of eities. I think you also agree that the funds are not very realistic at the $2.3 billion authoriz~ - tion, even ~if it were completely appropriated it would be doubtlessly PAGENO="0441" DEMONSTRATION CI~IES A I~ URBAN DEVELOPMENT 465 low, if we wanted to aoe~mpli~h h~ w~ thould accomplish in these cities, wi'thout asking yoti ~1~t e ~ ecific amounts would be. And from your testixmony I g~th~r~th t yq and your organization are also concerned that this part~cu~ar a t ii t drain from the present urban renewal programs, or from yo p esent housing programs. You cii~ed the testimony of Mis. MoO i e nd Mr. Slayton on Monday last, where I actually was proposing ~ ~ s~ questions to them. Do you have any suggestions as to ho~ we, in t ~ :ongress here, ean insure the fact that this Demonstratioz~ Cities ~ ot : ill n~t drain from our present urban renewal act, let us ~a.y ? ~ ~ Mr. FAY. Yes. We ~ug~est c~ ~ r. Congressman~ that the entire amount of $2.3 billion be. ~nad ~ laihle at once without respect to the annual limitations ~y ~vay ~ ~ ntract authority, and then that would give us an oppoi~uility ~ oo e another year to see where we stood with respect to th~ total a n Mr. S~ GERMAIN. Dc~ you fe I t~ t in these areas we have now ar- rived at the point whei~e ~e ar ~ ~ ~ oi g a great deal of planning with no reassurance of the f~ct that ~ will be fun~ds a,vailabie to execute or put into being these ~lans;th ~ t ~Ø beings~b~nittéd 9 Mr. FAr. I am not ~an~ilia~ n ~ etail with the situation in every city. But I know that , ir~ ~ ñi~1 e ties around the country basically planning of a general ~ é done~ But it is difficult to retain staffs and to maintaii~ mo~en~i n. such prog'ramswhen there is no assurance that appiica~ioi~s ca~ b~ handled quickly or that the funds will even be available.! The sit at~ n of dommunities now submitting proposals for new projects is ~ ~ dim one, under the limitations of the act as it now stan~ls. Bu i ~ were to maJ~e the entire contract authority availahlé~ w~thøut r s ~ e t r without regard to the anmial limitations~ I thi~ik this probi ould be removed. Mr. BAiumTT. The time of t e ge tiernan ha~ expired. Mr. Gonzalez 9 ~ Mr. GONZAIIEZ. Mr~ Cjiair n; I want to commend the gentleman for the excellent a~al~rsis he a ~ ~ de; the analysis is the best we have had, section by sectior4~ so far. ~ ~ But I am particuia~ly plea e 1~ the emphasis on your public hous- ing statements, both as to th d to revise and modify some of the existing Jaw as well ~s the ~ roposals, and particularly, your re- marks on page 3 with respect t s ecific amendments which will permit the modernization arid the u ~ at~ng of the older public housing. I have been very'n~uc1~ co ~ rn. d with the testimony we have heard so far. And yet evpn with ec etary Weaver's testimony in which it seems to me-I cc~ul4 be o , of course, but it seems to me that public housing wa~ either el g completely overlooked, or deem- phasized, whereas f*om the p ac ical standpoint in my own district I have become convir~ce4 th t p* lic housing is an integral valuable portion of a prograi~ whic s e * to upgrade living conditions among those who really ne~d t~e h 1 ~ e most. I know that there are many things that we can all poin o, by way of suggestions, in improving public housing fro~ the ~ i standpoint of the experiences that we have had in Sar~ Ai~toni . ut at the same time, even with all the shortcomings, I ha~ve pers all been aware of so much good that has come of ~tbis pr~grsrn t a 1~ ave been frankly very much worried. I noticed in the scl~teme or t e utline of c rganization of the Depart- ment as presented ~y ~he e r~ ary, and I guess adopted, that public i. . PAGENO="0442" 466 DEMONSTRATION CITIES AND URBAN DEVELOPMENT housing does not seem to loom large in t~e conceptual thinking f those who are forming this broad new Departi~ient. So I compliment you on recognizing t~iat this is important. I realize that the or~anization is primarily facid with many problem . But nevertheless I hope that you will m4intain an unremitting effort through your organization and your m~mbership to alert the c~tizens of the danger that threatens the publichousing in our countr~. I do not . agree with so many of the critics and enemies of ublic housing-of course, public housing has already been fought, nd it seems to me that now we have reached a point where the ene y has gained a considerable victory. And yet t~ie people this movemen helps and has helped are generally the peopl4 who do not have an rticu- late voice. This is where I think we can~1better justify our elect on to these positious of ostensible representatio4i. So I end ut~ where I started by compli~nenting you on your in erest and your awareness of our need. And Mr. chairman, I yield back whatever time I may ha e re- maining to my colleague, Mr. St `Germain. Mr. BARRETT. He has 21/2 minutes, Mr. ~t Germain. Mr. ST GERMAIN. Thank you, Mr. Chaii~man. Mr. Fay, I would like to agree with yoti on a few of your pro osed amendments. On page 13 as to modemiz~ation and updating of lder low-rent housing developments, certainly~we are all aware of the fact that a great n4any of these are in dire nee~l of modernization an up- dating. ~ I And No. 3 in your suggestions, "To en4ourage good as well as eco- nomical design," here again we have seeh examples of some p etty horrible design. It seems as though thei~e has been a trend the e- I feel that this applies also to housing for the elderly. There se ms to be a trend in economics, and one concept where they come up ith a particular design, and it is aceeptablo, ançl it is found to be econ mi- cal enough, and everywhere you go you se~ that same housing pro ect or that same housing for the elderly proj4ct with maybe a few ii tie minor variatioUs, but in essence no real ins~iration, no thought, no at- tempt at picking a site, for instance, that ~4hen developed would h ye natural beauty tied in with the design, ancj no attempt at having he design tied intothe geographical location akid the naturalbeauty tl~at might be available. And so I say to you, I commend you on bringing up this point, l~e- cause I think it is terribly important. I think it is encumbent up~n us to spend a little more time looking at ma~iy of these, and encour~g- ing better design and more efficient and effective design, and yet more beautiful design. Because these partioular~ projects . can lend to t ~e beauty of the community if well executed. Mr. FAT. Mr. Chairman, might I just res~ond to the Congressma ~i. We have been! very mindful of the prob~1~m. in this direction. 1 might say that it is a very challenging matt~r, as you can readily u - derstand, to take limitations of most sites tl~iat are available to us our cities these days, and economically within the criteria still come u with something that is attractive. But NAERO last year sponsore with the American Institute of Architects and the Public Housing Administration a series of design seminars, some 8 or 10 of the4i around the country, as I recall. This was c~rried out in part with ~ grant from the ~`ord Foundation, and was at~least in part responsibl PAGENO="0443" DEMONSTRATION CITIES A U BAN DEVELOPMENT 409 hensive plan for the metropolita ar a in which the program is located." Section 7 of the demonstration ci i s ill provides for the office of a Federal coordinator. While this i a go d idea, it is definitely limited. The duties of the Federal coordin t r hould be extended to include providing a clearinghouse for all e al programs in the metropoli- tan area. His office should be tie i ith the metropolitan informa- tion center provided in title IV f th Urban Development Act. URBAN DEVE P ENT ACT We heartily endorse the goals o ttle I of this bill which would use Federal financial incentives t ie etropolitan planning directly into decisionmaking and action. T e principle of supplementary grants to applicant State and bc 1 p1 nning bodies that are actually carrying out development proj ec s in eting truly comprehensive met- ropolitan or regionwide considera io s is certainly commendable. We have no quarrel with the a age of most of the bill as con- tamed in title I of most of its pr v si ns. We do suggest a change in sec i n 05 of the bill~ which defines de- velopment projects in terms of s ec fled Federal programs. There are some notable omissions from e 1 st of programs, including urban renewal, public housing, air r s u ce management, public health grants, and Department of Agr~c 1 re assistance to water and sewer projects. These omissions, in our opini fu her fractionalize the metropoli~ tan area into central city and su rb nd inhibit cooperation and com monness of purpose across jun d cfonal lines. It is our experience that it is u re listic to administer an urban re- newal program by taking onl he interests of the central city into consideration. This may seem politically o j tonable to some. But it is a fact nevertheless that renewal and 1 a ion must be dealt with at the total metropolitan scale. Otiierwi ~ , w continue to fence in the central city ghetto and to breed disco en and distrust when we should be committed to a policy of un t mong all citizens. Furthermore, many urban renewal projects a e ailed to attract investment `capita] precisely because the total me r p litan market for housing, and for industrial and commercial fa il ti s had not been taken into account. We would therefore recoin e d hat major urban renewal and pub- lic housing projects having a ea urable impact on metropolitan de- veiopment be included in sect o 1 5, as well as Department of Agri- culture grants for water and s w age facilities under section 306 of the Agricultural Act of 196 , w en they are made in metropolitan areas. Dr. Weaver has estimated a about a dozen metropolitan areas might become eligible for s p1 mentary grant's during fiscal 1967 and accordingly the adminis r ti II is recommending a first-year pro- gram level of ~25 million. I is further stated that. with continued encouragement under this pr ra , about 75 metropolitan areas would qiia]ify by the end of 5 year . e would like to see the provisions of this act extended to all 250 o o etropolitan areas within 5 years and Federal policy directed to tha e d. Only then will we be on the way PAGENO="0444" 410 DEMONSTRATION CITIES A~D URBAN DEVELOPME to valid and comprehensive so1ution~ to the problems of me ropolitan areas. ; ~ LAND DEVELOPMENT ANI~P NEW COMMUNITIES Mr. Chairman, we again commenci the administration an the corn- mittee for including FHA financing to land development and new communities. We supported it last year and we think it is a splendid program and should be enacted into law. We can predict tha the pro- gram will be well-received and will ~provide important new tools in directing urban growth and channeling it into beneficial fo ms that will improve urban life. The major omission in section 2O~ stating criteria for n w corn- munities i$ lack of mention of metr4politan planning. Th closest approximt~tion is No. 4, "maximum a4cessibility to any majo central city in the area." If this statement is~designed to allay fears of both central city and suburban interests, we feel it might have ust the opposite effect, for it is certainly true that "maximum acces ibility" facilitates out-migration from the central city as well as retu n from the suburbs. Better language should be added as: "(5) Further, if the development is to be located in a metro olitan area, it shall be consistent with and de~velopecl as part of the mpre- hensive metropolitan plan of the area.'~ Section ~O6, specifically authorizing urban planning ass stance grants to ~netropolitan planning age~icies and local gove ments where new communities are to be locat~d, is especially importa t, for it is through this vehicle that the new communities will be put ~ their proper metropolitan framework. Another criterion that we would sugg~st be added to this defi ition is that new communities should have varied land uses, includin corn- mercial and industrial, so as to provide~job opportunities for 11 the residents. This will assure that the co~imunities are actually inte- grated, reasonably self-contained comm~inities with sufficient r crea- tional facilities and employment opport4nities to justify subsid and not merely large housing tract~ We would also suggest that the new c4~mmunity be under a sngle development plan, and have a clear plant for governmental orga iza- tion (that is, harmony with the existing unit of general local go em- ment within which the new community is to be located). We again support section 208, which would extend Federal a sist- ance to the public land development agencies to finance the acquis tion of land to be utilized in connection witl~ the development of ell- planned residential neighborhoods, sul~divisions, and new m- munities. We are convinced that State and local g4vernment not only hay the legal powers t~ aid in developing a better i~rban environment, but lso have the growitig technical and political catpacity. Where States have been stimulated to di*ect such growth, they h ye lived up to their responsibilities. One of the best examples lie in industrial developmentq where it was determined that bringing ew jobs into the area was of top priority. Thus Kentucky has establis ed the Spindletop Industrial Research Park with State aid. The St te of New Jersey is redeveloping the salt flats into a new Meadowla ds Industrial Park. Many States give speci~1 mortgage assistance or industrial sites and buildings in areas of hi h unemployment. PAGENO="0445" 411 DEMONSTRATION CITIES A RBAN DEVELOPMENT A specific example of a ~tate-d v lo ed n~w community is under- way right now in Wiscon~in, whe t e Wisconsin Federal Surplus Property Development Coi~im~ssio s a ministering a new community at Brighton, Wis., in Kenósh~ Co y. In 1954, the U.S. Air Fprc~ sel c ed over 5,500 acres in Wisconsin as the site for constructio~i of th~ i~ ard I., Bong Air Force. Base. After considerable work ~iad bee* o pleted, the project was aban- doned in October 1959, and the la~ t med over to the State of Wis- consin. It was determin~d that ~ e s rplus Federal land should be developed in accordance with a p~a f r the entite region, and there- fore, the Wisconsin D'ep~trti~ent/ of ~esource Development was all- thorized to prepare a master plai~ f evelopment for the area. This plan was completed se$ral yea~ ~ o and the Wisconsin Federal Surplus Property Develppn~ent I o mission is now in the process of selling the land to ~pri~rate de* op rs in accordance with the plan. In this c~onnection, it i~ intere~ti g to comment that 35 States have now received grants froth the Fe~i ra Government for comprehensive statewide planning studies. Th~i m St of the States are well under- way to building up the capabi1~t ~ do just the very thing that is envisioned in section 208. Of course, municipali~ies wot~l b ~ eligible tc. borrow money from the Federal Goverr~the*t i~ th~ er.e willing to develop satellite communities. An ex~in~ple is O~ la d East, which has beeit proposed by the central city of Oakl~nd, al~ ., as an, entirely new community east of the adjoining footh~lls. le counties also could take advan-' tage of this special assis1~anae. In summ~y, we wou~d say t~ t this new provision adds a fine tool in the kit of assisting loca'. go~e nr~ient and private industry to pro- vide a better Uving enMironmei~t fO~ all the citizens of the metropoli- tan area. We strongly/urge its f vo~able consideration. NEW TECIINIQtTES OF 1~ET~OFO I A~ PLANNING AND IMPLEMENTATION I might add parentijetically t ~ we endorse the proposal for dem- onstrations in effecti~v~ met opo titan planning contained in the President's message. `I~he cos a estimated at $6.5 million per year. We would caution, `h~~ver, t at if the vehicle of urban planning assistance (see. 701) fund~ a e to b~ used for these demonstratic~ns, that increased appropriation e provided so as not to disrupt the existing effective pi~ogi~am f grants to States, counties, and municipalities. Tr IiJ3AN !=~ S Expansion of the ~irb~in ~ s ran~portation assistance program is most important to d9veiopiii a t ly balanced and efficient system of metropolitan transpqrtation. ~ would also be in favor of the amend- ment proposed by Répi~esen a i~ Reuss and others giving more em- phasis to research ~nd dev 1 p ent of new systems of coordinated urban transport for metrop 1 ta areas. This is especially important in view of possible incorpo a 10 ~i of this program in a new Depart- ment of Transportation, 6O-8T8-66----pt. i-r------27 I F PAGENO="0446" 412 DEMONSTRATION CITIES AND ~ URBAN DEVELOPMENT URBAN INFORMAT~ON CENTERS We do have several major reservatibns about the language used in title IV demonstrations for urban infortnation centers. Section 402(b) (5) properly requir~s coordination of info mation systems funded by these demonstration~ with systems set up wi h other Federal programs-most especially ur$n planning assistance funds. These systems should also be closely co4rdinated with systems lready set up and ~ in existence by ~ States an4 metropolitan areas, ~ hether or not funded with Federal funds. Section 403, we feel, is not sufficientl~ flexible to allow devel prnent of useful data banks. There is certain1~i need for integration f data from the several Federal programs, data from State sources, an from metropolitan jurisdictions-that is, "horizontal integration" fo each level of government. But there is also a need for integrate data systems for Federal, State, and urban data-that is, "vertical in~egra- tion." The distinction between "metrop4litanwide utility" and `~state- wide utility" is, in our opinion, co'mpIet~ly unrealistic and should be stricken fron~ the bill. ~ L Section 404(a) authorizes 5O~percent ~Fèñeral grants. The rban planning assi~tance program-fl-section 7~1-which has financed work along these lines in many parts of the cou~try makes two-third g ants, and other Federal agencies-such as the Office of Economic Opp rtu- nity and Economic Development Administration-will fund even higher percentages. We would favOr rai~ng the Federal share 0 the demonstrations envisioned in this bill to two-thirds. Section 404(b) would, in our opinion, h~vethe effect of making hese demonstrations useless and inoperable. ~ A~ planners, we will be a ong the most important consumers Of the data jn these center$, and exc ud- ing any data "to be used prii±~arily in tl4é day-to-day operation of State or local governing bodies and agen4ü~s" is unsound. Plan ing is indeed involved in day-to-day operatioits and this makes it us ful. Since title IV would fund oniy d~rnonstraUons, we favor elimina ing section 404(b) from this bill. When authorizations are sough to provide assistance in operation of these information centers, proh bi- tions about using the funds for bookkeeping, stamps or office rent an be developed administratively. Incidenta1]~y, rental of computer ti ne is quite expensive and this should not be ~considered a nonfunda le expense. EDUCATION AND MANP~WER We wish to a~d one further comment to ~this proposed legislati n. These bills would increase the coordination~of programs on the m t- ropolitan and State levels of gOvernment. ~ We support these n w trends in Federal thinking. We must add, though, that there is a grave shortage of talent and personnel on the local level to do t e necessary job of coordination. We feel th~t it would be most ui - fortunate for Congress to enact legislatiort requiring program c - ordination withotit adding money authoriz4tion for alleviating ti e technical manpower shortage. The legislatior~ before you should, in o~ir opinion, include au- thorizations for t~ainin~ grants, inservice ed~ucation, college scholar ships and grants to universities to expand their facilities for edu I 1 PAGENO="0447" DEMONSTRATION CITIES A D U BAN DEVELOPMENT 413 *cating local community developmen e sonnel. This committee very wisely added a significant authoriz t on to the Housing Act of 1964, in title VIII, for city planning fe 1 w hips and training programs. To date this has not been funded. We respectfully call the attention o t is committee to the precedents established in other legislation. St year's solid wastes bill con- tamed authorization for training n education of environmental health scientists. Similarly, the ep rtment of Agriculture every year receives funds for training f e tension agents, soil conserva- tion personnel, forest manageme t pe sonnel and other natural re- source technicians. We would ho e th t the Department of Housing and Urban Development under t is legislation could be granted broader resources to conduct tra'n ng seminars and provide educa~ tional programs to train local pe s n el in these very important as- pects of local govermnent. Mr. Chairman, the problems of i. r rban areas are so formidable as to require the full resources of o r en ire Nation. Nothing less than implementation of the lofty goa s st ted so eloquently by President Johnson will suffice if the Unite St tes is to become a truly great Nation worthy of world leader p. The rest of the world looks askance at our failure to solve as'c urban problems-the richest Nation in the world with the o t dvanced technology in history with over a fourth of the popu a io living in poverty, and a very large share of our total housin to k in disrepair. The Federal establishment st provide leadership to mobilize the total resources of our great N t on Your committee is to be com en ed for its wisdom and courage in enacting new approaches and ex rc sing leadership. Thank you for this opportunit o expressing our views. Mr. BARRETT. Thank you, Mr ise, for a very thoughtful and constructive statement. I think we share at least one hi g in common at the outset, that we both live in the great city of b otherly love called Philadelphia. And you, certainly not I, are a ye y uccessful consultant in planning. And I notice on the last page o said that with the shortage of trained personnel we ought to on ider this coordinator very care~ fully. Do you not think we ha e he most outstanding planners in theisrorld in the city of Philadelp ia? Mr. WisE. I think they have d ne a most remarkable job in the city of Philadelphia, Mr. Chai rn n. I have done rather extensive consulting work with them. A d think the program there is becom- ing very well balanced as bet ee matters of urban beautification and a very direct and keen co c rn about the serious problems of poverty in that city. Mr. BARRETT. I appreciate y ur comments on the job that we have done. But I would like to re ea my question. I say, do you not think we have some of the mos o tstanding planners in the world in Philadelphia ~ Mr. WisE. I think we have in eed some of the most outstanding planners in the world in Phila lp ia, and we coulduse a lot more like them, no question .thout it. Mr. BARRETT. I notice at t ottom of page 2 on your statement you say that the Federal coor in tor is a good idea but it does not go PAGENO="0448" DEMONSTEATION CITIES AND URBAN DEVELOPME T far enough. You recommend that ~iis duties~shou1d be ex~ended to provide ~ clearinghouse for all Fede~al programs in the me1~ropolitan area. Y~u know most of' our witne~ses have had reservatio s of one kind or ai~other. And I ant glad to s4e such an outstanding e nsultant as you m4king this observation. Would you indicate `how you feel about having him conside ed on an optional basis or a mandatory basis, and whMher he should b selected by the Federal authorities only, or whether he should be reco mended by the local authorities and then discussed completely with he local and the Federal authorities to get the:best results that we ca from a coordinator? Mr. WISE. Well, Mr. Chairman, as ~L matter of principles o politi- cal science, I' believe that the Federal 4x~rdinator should be a pointed by the Federal Government. I have ~bserved a large numbe of re- gional dir~ctors at work in the old ~ }Iousirig `and Home inance Agency, an~d they are very effective $ople. They are not tr ing to put their kg on both sides of the pol~itical street at the sa e time. Of course, they want to get along with tihe local people. But b~sically they are Federal employees and they ~re appointed by the I~ederal' Government. If they are obnoxious h~cally they are not app~inted. But that is a part of the political proc~ss. We see this very important office of the Federal coordinatqr as a two-way street. I do not read the legislation as saying tha he is going to be there solely to protect the l~ederal interest, if you lease, but he is to `be there to pro~ride a clea4nghouse, to provide a single point of reference with regard to the m4ny, many programs th t this administration hopes to bring to bear ont a coordinated fashion i this marvelous demonstration cities idea. Now, as I have indicated, I have worked with the planning co mis- sion in Philadelphia and many, many other places. And until very recently it has been difficult to coordinate within one city-and it is not just Philadelphia, I can speak for the State of Californi and the State of Texas as well, sir-the activities of the many Fe~leral agencies that are involved. I think perl~aps the term "coordin4tor" might raise the `hackles on the back of ~me peoples' necks, b&~ause it sounds mor~ like a director. But if this ~were a representative w~ose job it was to r~pr~sent the total Federal ii~terest and could come pack, then, and coordinate through the Bureau ~f the Budget the activ'ties of the Department of Agriculture and the bepartment of the Inte ior, it would be a splendid thing. But to answer your question directly, I do not see how this pe son can `be appointed by anybody `but the U.S. Government. Mr. BARREPP. Thank you. Mr. Harvey ~ ~` Mr. }L&nv~sy. Mr. Wise, you have made a ~rery fine statement. ` Th~re are a couple of qluestions I have. The pages ar4~ not numbered, but where you discuss the urban ~n- formation centets on one of the last pages,~ about the middle of tl~at page you referited to section 404(a) authorizes 50 percent Fedei~al grants. And ~ou `recommend, I believe, that it be increased to two- thirds. Mr. WIsE. Yes, sir. Mr. HARVEY. What amount of money are we talking about ther ? Do you know what it would cost to do that? 414 PAGENO="0449" DEMONSTRATION CI~UIES A D U BAN DEVELOPMENT 415 Mr. WISE. I think there i~ `an ant ri ation something on the order of $5 million per year. The reason, Mr. Harvey, that w u gest this is to make the pro- gram useful. With the san~e gØner~ ki d of activities, with a slightly different twist, available u~tder s&~ton 701 when you get two-thirds money there, and underc~r~dn con~ io s under the Economic Oppor- tunity Act and the Econo~ic De~e op ent Act, you might even get a 50-percent program here, ~nd v n hough it might pick up more activities than, say, 701 a~itI~oriz d it would bring it into a parity so that you would not be shopping ~ ii d. Mr. HARvEY. On the n~xt page nd r "Education arid Manpower" you speak of a great shor~ag~ of e so mel on the local level to do' the coordinating. I am not `sure I d~ stand what personnel you are talking about, and how ~iai~y ci i s nd how many are available at the present time ? Could you ela. r~ e a little bit? Mr. WisE. Certainly. Right now at the gradi~tate 1ev 1 n he Unite~E States there are more than 35 schools that are engage ~ he granting of master's `degrees in city planning. The m~mbe s ip of the American Institute of Planners has increased , from 2 4 0 o 4,200 since 1960. But there ~ ~ remains a large shortage. ~ In `65 there were 300 graduates from planning schools, and th~re wer i7e 600 job opportunities available. I just finished and publisl~ed 0 d' ys ago a study on the planning requirements of the ~asi~ingt etropolitan area. ` This includes four counties in norther~i Virgi i a ci two in Maryland, plus the Ths- trict of Columbia. The report as done for the Washington Metro- . politan Council of Go+erx~mer~t. , his was to deter~n~nc what kind of planning ought to he don~ er on an intergovernmental ba~is. And when we got throttgl~ with th job `and added it up we felt that there ought to be a professioi~a st if just for this 1 organization of `11 professional peopleL 4~nd t is s just the beginning. There is a very serious shortage. / Mr. HARVEY. On ar~other si~tbjeó , it has been suggested that areas outside the centralcit~ co~i1d b~ ss to provide the low- and moderate- income housing. ~ Let me ask ~ hether you think that this proposal is realistic ? What if the e* no ic justification-tiie jdbs-are in the central city ? I ~ Mr. WisB, If I may refer t~ y ost recent Washington experience, we have got the bcgihning o~f r verse twist to that sort of a thing here. And that is that a lot f he jobs are going to the suburban areas that are attra~ting 101w r ncome workers and people out of the central area. And there~ re going to be housing needs out there too. I . Now, I recognize that th~ e as `been a historic reluctancy-it is stronger than that, I guess,/ s nh times not spoken as clearly as it is felt-to consider hoi~ising an~l h~ housing problems at the metropolitan .~` scale. And yet fro~i my o~ e~ erience, when a city is doing a rede- velopment job, and the highj* y are cutting through the city, another committee is considering ~ e ntergovernmental Relations Act of 1966, which deals ~with a ~t n ard relocation program-if you are disrupting people ~n cente~ cit es, then you have to find places for them to live. And this s~ ul be looked at in our ]udgment on a total metropolitan ~cale. d think that it is realistic. It does not PAGENO="0450" 416 LIEMONSTRAPION CITIES AN ~ URBAN DEVELOPMEN mean that you have to have a Iiousir~ authority in every co~inty and every city~ We do have some other netw tools. In doing this job for Metropolit~an Washington, I talked tp county supervisors and said, "We have to pi~ovide housing, we are going to use 221(d) (3) out here, we have to have a common housing policy between the District of Columbia and ~ome of the surrounding areas." It is not going to happen over night. But it is going to h~ppen, I think, as people realize that the metrd~politan area has to soh~e all of its problems, including the very touglj problems of housing. Mr. HARVEY. I just have one other q~iestion-not a question but an observatioiiL I gather from the first page of you~ statement that you f it that these bills I]I.R. 12341, and ELR. 1~9~6, are very definitely not in harmony. And I wonder if you would care to elaborate i that regard. Mr. WISE. I think that they could b~ in greater harmony i they were included in a single bill, in which we would then be ble to relate one part to another. For example, in the Demoustration Ci4ies Act, as I have said it in the testimony, it seems to me that this has to ~e looked at again as a p r~ of a metropolitan phenomenon and not just a part of one neighbo hood versus another neighborhood, and that twe have got to look t the coordinator a~s a part of the demonstrati4n center idea. If they were in one bill, I think we would begin to lo~k at it more as an app oach to the urban metropolitan phenomena in ~the country instead of arts 4f it. Mr. HARVEY. Thank you very much. I I~ave no further questions. Mr. BARRrn. Thank you,sir. Mrs. Sullivaji ? Mrs. SULLIVAN. As a comment, sir, I tho ughly agree with Mr. ise when he says that the program must be eveloped as a part of the coitiprehensiv& planning process for an e tire metropolitan area But I thiiik ` there are going to be problems. And ~ while I d n't think that the problems could not be over~orne, I believe they wo ld be difficult. For instance, my own city of ~t. Louis, which is an i de- pendent city with a mayor and board of aldermen, while St. L uis County surrounding St. Louis has a couutri~r supervisor and a coun il. The city is not part of the county. One ~is Democratic and one is Republican. Mr. Wisi~. I a~n very aware of that. Mrs. Suu~ivA*r. As I said, I think it wo ld be worked out, but it would be difficult to get a comprehensive p n combining both are s. But we would b~very foolish if we did not trig. Mr. WisE. I h~we had, Mrs. Sullivan, som~ discussions with Supe - visor Roos and some others in St. Louis about getting started a metr - politan council of government as a beginning for the exchange of co - mon information. And some of these steps have already been take Mrs. SuLLIvAN. I think it is the oniy way it can be done. Because we are seeing the movement of people into the~ county and suburbs an out of the city, to the detriment of the city, a4id when the central cit goes down, the peqple in the suburbs feel it toot eventually. It is not t the benefit of eithe~ city or suburb for this to h1ppen. I~ PAGENO="0451" DEMONSTRATION cITIES A D RBAN DEVELOPMENT 417 Mr. BARRETT. Mi'. Moorhead? Mr. MOORHEAD. Thank you, ~`Ir. arman. Mr. Wise, if we do keep the bill se arate., I wonder if you would comment on the proposal that the n bill which is now cited as the Urban Development Act should no p operly be changed to be called the Metropolitan Development Act Mr. WISE. I would certainly co c r in that approach, Mr. Moor- head, definitely. Mr. MOORHEAD. With respect to ths Federal coordinator, whathver title we finally come up with, am I orrect that it is your testimony that there should be a coordinato f r every metropolitan area, and we would not need a special coo di ator for a demonstration city; we would have thjs one Federal co rd nator whether this was a demon- stration city or not ; is that not c rr ct ? Mr. WIsE. That is exactly my hi king. I think whether or not he is called a coordinator or a centr 1 urce of information, whether h~ is out of the Bureau of the Budg t r FEUD, there is a great need for this in the localities. Mr. MOORHEAD. I had not though of that possibility, that he would be out of the Bureau of the Bud et Mr. WISE. You might think o t it. ~ Mr. MOORHEAD. I do not kno w ether we have the jurisdiction to do that. Mr. WISE. If I may extend ha thought for just a moment, Mr. Moorhead. I think the Bureau of the Budget has done a rather out- standing job of coordinating th e orts between various departments that have a parallel kind of a mssi n. The Executive order that came out, I think, last August or Se te ber related the planning require- ments for the Open Space Act a ministered by HUD and the tand and Water Conservation. Act a nistered by the~ Department `of the Interior. These planning req i ments are not in conflict, they are consistent. And this is one o t e big jobs that the Bureau of the Budget has done. Mr. MOORHEAD. If they ca d the job here in Washington-and you are suggesting that we ha e a fieldman to do that for metropolitan areas-I think the committee h ld consider that. Mr. Wise, you also testified b ut the job of relocation being metro- polit.anwide, and gave us an ex mple in east Oakland of the possi- bility that the cities could se his new communities provision for establishing-for helping to ol e their relocation. Is this outside of the city limits ; is that what yo are proposing ~ Mr. ~WTISE. The Oakland as development i~ somewhat similar to the Wisconsin situation I w s eaking of. It would use a military facility of large acreage and o ld be sothe 1~ miles outside the exist- ing limits of the city of Oa la d. But it would have the same city council, and the police depa t ent, and the same tax base, because it would be part of the same c ty Mr. MOORHEAD. And the `ty of Oakland would expand by the pur- chase route, and the people Ii live in this new community would be c.ollsi dered citizens of Oakl nd and vote? Mr. WISE. Yes, indeed. Mr. MOORHEAD. I wond r i that could be done legally in other States, or is it a particular ro ision? PAGENO="0452" . \ 418 DEMONSTRATION CITIES AND~ URBAN DEVELOPMEN Mr. WISE. It would require a fairI~ simple amendment, a~ a mat- ter of fact, to the basic legislation in California to remove the\require- ment of continuity. But the idea is b~g enough and exciting enough, and addresses itself to many different.~prob1ems. Although it\has not been formally proposed to the legislat4ire, the discussions I h~ve had out there indicate that it would be pret4y favorably received if ~he city wanted to do it. ~ Mr. Mooibii~D. Yes ; I know. In soi~ie cities, and I include ~uy city of Pittsburgh, we have the problem, if we have tried to clear out slums we have no open land on which relocate people. Mr. WISE. Within the city. Mr. MOORHEAD. All we have is a greater density in another art of the city. ~ Mr. WISE. This would be a part of th~ comprehensive metro olitan development plan, the new city of Oak1~and East, as they pro oseto call it, would be part of a planned growth development for that ntire ~ Section of the east Pacific of the San Fr4nçisco Bay area. Mr. MOORIIEAD. Thank you very much~ Mr. Wise. I find your testi- mony extremely interesting ~nd stimu1at~ing. Mr. BARRErr. Mr. Reuss ? Mr. REUSS. Thank you, Mr. Chairman. Mr. Wise, I share your zeal to provi~ a climate in which etro- politan planning can thrive. I have cert~ifi difficulties with the rop- osition you advanced that the demonstr4tion cities program shpuld have as an essential criterion that the prc~m flot only be consi~tent with comprehensive metropolitan planning, which is what the pr~sent bill provides, irnt that it be developed ~ a~ part of a comprehei~sJve metropolitan j~lan. I would certainly h4pe that it would be. ~3ut what about a ~ ~ity which wants to have atdemonstration cities gi~ant prOgram but finds itself surrOunded by ~log-in-the-manger subt~rbs which for all the reasons that you are famihar with, don't want to h ye metropolitan planning ? I would hate to deprive such a city of he demonstration cities program when through no fault of its own i is not able to plan on a metropolitan basis. Mr. WIsE. Mr. Reuss, I am certainly sy~npathetic and understa d your position. I think, however, that I ca4 observe that ~within, 1 t's say, the next 5 years at the outset that it ~s quite likely that we re going to have ei~ective metropolitan plann~ng in every metropolit n area in the Uñit~d States. Now, the High~vay Act of 1962 requir d that there be a c*nprehensive transportation~plarrning process in pla e and going by July 30, 1965, in every metropolitan area. I think almo t all if not all of the, metropolitan areas in the United States ha e achieved that, or have met that requirement. Mr. REUSS. ~ There was, of course, an important stick being held over the backs of these communities, because if they did not participate i such combined metropolitan transport plann~ing, the highway woul not go through their `borders, and that would fr the end of them. Bu what about a selfish suburban community winch could not care les about the explosive Wattses in the central eity~? We have them. Anc how are they going to be impelled to participa~te in broad-scale metro- politan planning just to help the central cit3r get its grant to clear up its Watts area? PAGENO="0453" DEMONSTRATION CITIES A ~ ~ RBAN DEVELOPMENT 419 Mr. WISE. The point that I am a h~g is that you are beginning to develop a tool that is made up of ny/ sticks, and that the Highway Planning Act is one of them. T e ~ ~s a very similar requirement. almost precisely the same ~ii~d of t ii~ that now pertains to the ex- penditures of funds undei~ th~ La ~ d~ Water Conservation Act of 1964. Now, I say, with the }~igl~way o1~ we are beginning to get some dialog, we are beginning to see at perhaps our thoughts on just highway planning. were trot bro e ough. We are on the way to achieving dialog, communication d great deal of understanding in the metropolitan area. I~ you w u d ather leave the act the way that it is, in terms of consistency with tr politan planning, at the present time this would be fine, ~rovide4 ~ the development of the demon- strations program was ~ part off th cities' comprehensive planning process. The objection ~ha~ I ~a i~ ising is that rather than saying that it should be consiste~it ~vith ~i, 1 n, we feel that it should be devel- oped as a part of the p~an, N , i you want to leave it consistent with the metropolitan plan, but ~ di ~te thatit should be a part of the comprehensive planning pi~oces it in the city, this would, I think, overcome your objectioi~. . Mr. REuss. Mr. Moo~head a i~X . Ashley and I have proposed an additional criterion by way of e dment to the demonstration cities program of the admin~str~tio lij h would require a workable pro- gram, which means eon~mi~nity d~ before you could get a demonstra- tion grant. And that would et t least part of your point, would not it? Mr. WI5L Yes ; it would. Mr. REUSS. ~ Thank ~,rou~ / I do have one more short qu~s io I enjoyed your whole testii~ ny and particularly about new towns. :i wonder if you have noticec~ 5 ` did that whereas the State owner- ship part of the new towns p/r pç~ al requires multi-income conununi- ties, the mortgage ir~surance/ o~ ion does not. Don't you think the ,. good planning for State~-owii d ew towns is equally important for mortgage insurance 1~o new t~ i~? Mr. WisE. Jf J ~ere dr~ in the legislation, I would certainly draw it that way, M~. Reuss~ er definitely. Mr. REuss. Than~ you. I Mr. BARRETT. Thanl~ yoi~, r Reuss. Mr. Wise, you l'~ave be~n a very informative witness here this afternoon. We have been ~re y glad to have had you and your asso- ciate here. I The committee w~ll reces~ nt 1 Monday morning at 10 o'clock. ( Whereupon, at 2 :23 p.~ri , t e subcommittee adjourned, to recon- veneat1Oa.m.,Mc~bd~i~y,~a ~1 7,1966.) PAGENO="0454" PAGENO="0455" DEMONSTRATION CITIES , P URBAN DEVELOPMENT NONDAY, C 7, 1956 HousE RESENTATIVE$~ S OM ITTEE ON HOtrSING OP TUE CoMi~rrri~E N ANKING AND CURRENCY, Washington, D.C. The subcommittee met, pursu t recess, at 10 a.m., in room 2128, Rayburn House Office Building, on. William A. Barrett (chairman of the subcommittee) presiding. Present : Representatives Bar ett Mrs. Sullivan, Moorhead, St Germain, Gonzalez, Widnall, an arvey. Mr. BARRETT. The committee ii come to order. The first witness this morning is Frederick Simpich, president of Oceanic Properties, accompanied by Mr. Harlan S. Geldermann. Mr. Simpich, we are certainly la to have you and your associate, Mr. Geldermann, here this mor in . We do want to make you feel at home. We understand that y just had some surgery. And realizing that, we are going to t to speed up the time for you and nqt exhaust you in any way an get the best results that we can out of your testimony. If you desire to read your te tirnony through, you may do so, and after you finish we will ask yo some questions. STATEMENT OP FREDERICK IMPICH, PRESIDENT OP OCEANIC PROPERTIES; ACCOMPANIE BY HARLAN S. GELDERNANN, PRESIDENT, GELCO DEVELO MENTS Mr. SIMPICH. Thank you, M . Chairman. I would like to read our testimony, but I would like to e asked questions afterward, in which Mr. Geldermann will assist in i answering. Mr. BARRETT. Before we co ti ue, Mr. Simpich, we have one of our most capable Members lie e his morning. I know he is `both a good friend of yours and Mr. 0 ldermann's. And he has proved to be one of our most capable a d roductive Congressmen. Don ~d- wards of that great State of Ca ifornia. And I would like Don to introduce both of you here t is orning. Don, would you do this hon r f r these two~distinguished gentlemen? STATEMENT OP HON. DON E WARDS, A REflESENTATIVE IN CONGRESS PROM H STATE OP CALIFORNIA , . Chairman and members of the two distinguished gentlemen and . , Simpich, Jr., of Honolulu, I Mr. EDWARDS. subcommittee. It is my p good friends 421 PAGENO="0456" 422 JEMONSTRATION CITIES AN ~ URBAN DEVELOPMEN president of Oceanic Properties, and Mr. Harlan S. Gelde ann, of Danville, Calif., president of Gelco Dev~1opments. These two gentlemen have long been involved in homebuil ing and land development. They are noted tI~roughout the West or their creative work in the plarthing of 1i~ thnmaunities. They ave im- portant and thoughtful testimony in~ connection with provi ions of the housing bill which have to do wit~i the provisions for ne towns and I am sure that you will find yo~ir discussions with the~n most helpful in your present considerations. ~ Thank you. Mr. BAIU~EI'P. Thank you, Mr. Edwai~ds. Mr. SiMpion. Thank you, Don. Mr. GELDERMANN. Thank you, Don. Mr. BARRETT. You may proceed with your testimony, Mr. Simpich. Mr. SIMPIOH. Thank you, sir. We are here representing a joint vei~ture in the developm4t of a new community on 12,000 acres of lan4l in San Jose~ Oalif. ~\. sub- sidiary of Castle & Cook of Honolulu, IE~Lawaii, of which Mr. Si~npich is president, is also developing a 2,OOQ-a~-e new community on tI~.e out- skirts of that city. The following coi~ments in support of c~rtain features of the housing legislation und~r consideration are pertinent to both of these substantial new communi1~y developments. Our remarks will be in support of H.~R. 12939 introduced by Con- gressman Barrett, chairman of the Sub~onnnittee on Housing and H.R. 12946 introduced by Congressman ?atman, chairman of th full Committee on Bankingand Currency. Last year the Congress enacted a significant new program of ort- gage insurance for privately financed l~nd development, whic en- couraged the formation of new communities. There was thus e tab- lished as national policy the principle th4t the cri~ation of such om- munities is one valid ingredient of urb~n expansion. And u ban expansion there will be, sooiier than m~st realize. The Nati\ n's cities must expand to accommodate 200 mkllion people in the next 20 years. For example, Honolulu, small antortg American cities, ~ith its half a milliou population, will nearly double in size in this pei~iod and require urbanization of 25,000 acres of the scarce land on the island of Oahu. If this urban expansion is to occur iii an orderly and plani~ied fashion, it must take place in ~ the form ~f new communities a~id, unfortunately, the $10 million limitation i4iposed on the FHA m~rt- gage insurance ~~rogItm for land develop4i~nt in last year's legis~a- tion is inadequate. We have before us tl~e cash flow requireme~ts for a new community within the city limit~ of San Jose. This state- ment, based on over a million dollars of planning, research, ai~id engineering work and generated by computer, shows that a ca~h amount in excess of $20 million is required for this developmer~t. Clearly, only organizations with vast resources can undertake su~h a development. Passage of Congressman ~ Barrett's and Patman's measures will make it possible for smaller dbvelopers and builders ~ o participate in th~ way urban America shou~d and must grow. Further, the Ia~titude given the Secretary~ of Housing and Tlrba Development, in ~xtending the term of such n~ortgages beyond 7 year is important. Again referring to the cash flow for the new com munity in San Jose, we find that 11 years ar~ required for the devel oper to recover his investment of cash. PAGENO="0457" DEMONSTRATION C~TIE~S A~ EBAN DEVELOPMENT While the conference of mayors] as emained silent on this legis- lation, it is significant th~t t~e e~t anager of San Jose and the mayor of Honolulu are both strop ~ vocates of the two new corn- munities with whith we a~e ~onc~r e and of the legislation which we endorse todayd I Adoption of title II wi~ provic~e th spur to the proper urbaniza- tion that the American public as~ir s ~ o and which our economy and technology are capable of ~roduci4g. ~ lthough almost entirely profit- motivated, the housing in4u~try ~i s, onetheless, repeatedly demon- strated its anxiety to create a bett~liv ng environment for Americans of every income level. Tihe gr~a~e t nd most dramatic opportunity to accomplish that objective ha~, it~ recent years, been couched in comprehensive preplann~d urba~za ior~. iJrifortunately, however, after much probing over ~he past/t o ~ ecadè~, involving vast expendi~. tures of private capital,, on~ fact h~ become ii~exorably clear : The success of the new comi~unities c ~ xi ~ ept r~quires Fedei~1 assistance. Specifically needed are (~) . singl~ on ce, large, long-term, low-interest loans ; and (2) a cleariugh~use /~. t p to effio~ently. ~amass, . organize, and disseminate facttial ~nform4i `~ elating to this vast new industry. There are no convent~ionai sd!i c~ * for the type of loan required. Smaller builders must eithei~ coi~ r~ * ise th~ concept of the new corn- munities development or resor1~ :0 xorbitant interest payments, 12 percent is riot unusual, pli~s so~n ~ ~`sweetener" to attract the lender. The added inducement m,y ta~ t e form of an option on a large share in the equity or ~th~r. cc4i te al participation in the success of the venture. Oonventhlnal fin n iii for land development is usually for a term of 3 years or `ess, l~i1 the development of a true new community will take f~om 10 t 2 ~ years to complete. Adoption of title II ~wilj ha e a ultiplicity of benefits: 1. It will permit b~ttet~ ho in and a better environment to be put on the market at lo~ver pric s 2. It will insure sixzaller de ip ers an opportunity to participate in the new communiti~s conc b providing credit sources not now available to them, 3. It will permit d~votion o ~ eater areas to open space and the provision of more geu~rous a ~ ites. 4. It will permit better quad t t ~ roughout. 5. Itwillinsurebet~erplan i g. 6. It will permit the crea I n rom the outset of an environment balanced as to residence, rec e ti n, open space and employment. 7. It will provide properly s ze utilities and roads which will yield economies in the futt~re ther~b r ducing the capital cost of the fariui- ties as well as the service cost~t t e homeowuers. 8. It will make for comp$ ë sive planned coordination of trans- portation, greenbelts and oj~e s ace, regional parks, recreational f a- cilities and othBr re~io~wic~e cti tural and physical amenities. 9. Because all of the regiU r menities, such as schools and public buildings, will hav~ been j o\t~ded, it will do much to insure the success of the new communi1~i s c ncept, as this is ~tirectly related to the confidence of the home buy~ ii~ the ultimate outcome of the project. May we make one final ~ in . The very small builders and con- tractors have been concerne~i h~ encouragement of the new communi- ties concept would someho~v di ert construction business away from 423 I PAGENO="0458" 424 DEMONSTRATION CITIES AND UR1~AN DEVELOPMEN them and to the bigger contra~tor~. $hile we cannot speak f r others, valid bu~ness considerations in botI~ `San Jose and Honol lu have lead us to~ ~uith the contrary positio4. * As a result of exten ive and comprehethive market studies and an~1yses, and uj~on the un nimous recominen~ations of our consultants, ~we plan not to build o rselves, but, once having developed the basic rbads, utilities, and ame ities, to encourage a number of builders with a vast divergence of st les and price ranges to come in and build competitively within the eneral framework of our controlh~d and operational master plan. Thank you, Mr. Chairman, for this 4pportunity to be heard Mr. BAimi~irr. Thank you, Mr. Simpi~t Mr. Simpich, I have a very short qu$tion I would like to a k you. I want to~ thank you for your excelh$it and informative sta ement. As you kno~, this propos&l for FHA insurance of loans to e ablish new towns a~id communities has `been before our committee for everal years. Last year we authorized FHA~ insurance for suburba sub- divisions, but the Congress did not extend the FHA insura ce to embrace new towns. Frankly, there is ~nsiderable doubt abo t new towns on the part of the homebuilders ari~d mayors. Would you think if Congress were to authorize FF[A insu$nce for a limited num er of new towns, say, for example, a Iudf doz~-in other words, we ould set it up as a demonstration program t~ see how it would wor -do you think thi~ would begood strategy ~ Mr. SIMPIOtri. Well, I *think we would ~be a little disappointed that the Congress did not accept the legislati4n as now drafted. W cer- tainly would be candidates to participate In such a demonstration pro- gram, because we are satisfied from both the business and est etic point of view that the future growth o~ America should be in the form of new communities, new towns, ho*ever it is phrased. Do you have anything to add to that? Mr. GELDERi~tANN. In our particular cases, Mr. Chairman, eac of these developments is within the city limi4s of a major city. So t is not the new town that has gone away frô4~ the neighboring city nd started up on its own with the political . s~division, et cetera. Mr. BARReII~ Mr. Geidermann, I want~to say that many on ur committee are In favor of new towns. W~e are hopeful that we an give an abunda~nce of housieg. tmith to tl4e people that are in dre need of them. But we `also have to bepractk~ai and look at the opp si- tion to this type program. Now, would authorizing the programs ~ ftr ~ few, as I said, sa a half a dozen cities, for the purpose of convi~ioing the mayors that it is not detrimental to their own cities, be bett~r than trying to get t e entire whole cake, and losing it entirely ? ~ .. Mr. GELDERMA~N. I would~coimder that $vaiid approach. ~ Mr. BARRerr. ~OU think tha~t~ould be a. s4nsible approach ? Mr. GELDERMANN. I would have to * think mOre about it, si But I think thatt the principle is good, if ilj means that it has to ~ e approached on that basis in order to enact ~the enabling legislatio then I would be in favor of it. Mr. SIMPiOH. May I add a point? It would be my opinion that `one of the i~'easons that the mayor. are indecisive on this is that many of them have not been expose to the detailed planning `and the arguments ~which are available oi PAGENO="0459" DEMONSTRATION C~TIES A RBAN DEVELOPMENT behalf of this means of growth an4 I~ fact that if properly planned the new community omcept~ wi~II pe~ i~ redttctions in th~ expenditures of tax dollars for city serv~es ove~ h~ e that would ~ prevail through conventional expansion and g~owth ut this takes a long and per- suasive discussion with an ~ncUvidiia ayor in terms of his own town. Now, as I said in my st~te~nent~ ii oth San Jose and Honolulu the mayors are the gr~atest1 ad~oca1~e . Mr. BAm~Err. I ~ can apjrebiate/ a . And I certainly appreciate your statements here. But s~me ~ ~ t mayors think differently. Thank you very much. Mi~s. Siil ii~ n, ~ Mrs. SULLIVAN. No qu~stibns, I r. Ohairinan but I would like to observe that on the *short~ trip w~ ~ e to Honolulu last year some of the committee s~w' some of t~ ~ ti w d~relopni~nts being done in Hawaii. Your testimon~ h~s be~n m st helpful to the committee. Mr. BAitai~rr. Mr. Moorhei~d? Mr. MooRnEAr~. Thank/yoi~, M . h irman. Do I understand that t~1e devel n~i t of the new community in Cali- fornia is within the city lbiiii~s of x~ ose? Mr. SIMPICH. That is 4orrect. Mr. MOORHEAD. Aiid `I~c* ~ibo~t t1~ `development in Hawaii, is that within the city limits ~f ~io~Olul r utside? Mr. SIMPICH. Within~ ~ The ole island there, it is the city of and county of Honolulu, so thai the s it~ zoning arid tax base throughout the island are invc~h~d. ~ Mr. MOORHEAD. I thi4k jt is ~ i~ cant that it is within the corpor- ate limits, arid you ha~r~/th~ sup rt f the mayöts. I think that where we lose the suppôrt~Of t1~ r~iayo is ~ here we are planning a new com- munity outside of th~it~ limi s wOuld like tO see if I understand correctly your positioi~ with r $ eô to Chairman Barrett's question. ~If in order to get this leg~i~lat o assed as a practical matter, if we would have to put son~e h~nits p ~ e number of new communities, or the total amount of mØney ant ri ed which would have substantially the sameeffect, you ~c~ild regr t tWs, butiecejit it as a step in the right direction and onlywish it ~ver bi ger step, is that ;correct? Mr. SIMPIOH. That ~s córree ; y~ Mr. MOORHEAD. Th~nkyou, x~. hairman. Mr. BARRETT. Thank you, ~ ~ orhead. As I promised you~ M~. Si p~ , we are not going to exhaust you this morning. W~ a~preciat * 8 r very fine s~a~tement, and your an- swers and those of yoi~tr asso&~ e ~ ~ the questions. All time has expi$d i~or ç r estimony. `We thank you for your very fine statements. I ~ ~ Mr. SIMPICH. Tha~ik you. Mr. GELDERMANN. Thank y ~u, Mr. Chairman and members of the committee. ~ ~ ~ . ~ Mr. BARRETT. Otti~~ iie~t . ~ r~ s this morning will be Frederic A. Fay, president, Nat~on~1 As ci~ ion of Housing Redevelopment Of- ficials. I wonder if Mr. ~ay ul come forward. ~ Mr. Fay, we areglad toha 3~ u this morning. I notice you have ~n üsoc' ~ ith you. Would you be kind enough to introduce your as ociate? 425 I PAGENO="0460" 426 ThEMONSTRAPION CITIES AN URBAN DEVELOPMEN STATEM]~1}1T OP FREDERIC A. PAY, ~RESIDE1~TT, NATIONA ASSOCI- ATIGN OP HOUSINO AND REDEV]~LOP1V[ENT OFFICIALS ; ACCOM- PANIED BY JOHN D. LANGE~, EXE~JUTIVE DIRECTOR, N4TIONAL ASSOCI&TION OP HOUSING AND REDEVELOPMENT OFPI~ALS Mr. FAY. The man accompanying mje is Mr. John Lange~ th~e execu- tive director of the National Associatjon of Housing and R&~eve1op- ment Officials. ~ You have identified me as the presi4~nt of the association. \ And I am executi~ve director of the Richm4nd, Va., Redevelopme~it and Housing Authority. ~ . ~ Mr. BARItETT. Of course, we are well acquainted with John\ Lange as a witness before our committee, and we greatly appreciate the previous very fine statements of your organization. And I a sure the statement that you will give us tl~is morning will be ed fying. We are glad to have you and we certaifliy want you to feel at home. If you desire to complete your stateme$ you may do so, and e will ask you some questions afterward. ~ : Mr. FAY. Thank you, Mr. Chairman. ~ *. : ~ My thstim~ny consists of a. prepared : -&tement and a supple ental statement th~tt we should like to furnish or the printed record. And then, of course, I will be pleased to an . er any questions that may come from the committhe. It is with considerable pride, that I appear before you this orn- ing. For 33 years, our association, which, in the interest of br~vity, I will refer to as NAHRO, has represented the views of the ope$ting officials who have the responsibility of irn~~king both existing and\new housing, redevelopment, and cOde enforc~ment programs effectiv~ on a day-to-day basis. This is a great responsibility, for, as you ell know, the success of any program lies in its ~ecution. Our membei~ship consists of Federal, ~tate, and local public offi- cials represeut~ng every section of the ~ation. They are acti ely involved in afl . types of federally aided bousing, code enforcem nt, and urban renewal operations in over 2000 localities across the country. Therefore, Mr. Chairman, we come before the committee to pres nt the point of view of the individuals whp must translate Federal assistance programs into action. Our pi~oblem is getting the ob done, once the legislation has been approved4 Today, we are here to. give Our support 4o. three bills proposed y President Joh~on and introduced by th~ chairman of this at. committee, Mr. Barrett, the Demonstratio4 Cities Act of 1966, t ~e Urban Developilient Act, and the Housing `and Urban Developme ~t Amendments of 1966. - The proposals for new large-scale demohstrations for cities ar~d metropolitan areas are truly exciting and promising. ~ NAHRO men~i- bers are deeply concerned and involved with the improvement of lii- ing in cities and metropolitan areas. We recognize that only t1~e highest order of commitment of both our phy~ica1 and social resource\ will be sufficient to turn the tide of blight `and unplanned growtl~. NAHRO is ready to work cooperatively wit~i other interests, publi and private, at both national and local levels~ to achieve the goals o the proposed demonstration acts. PAGENO="0461" 427 DEMONSTRATION C~TI~S A RBAN DEVELOPMENT We particularly commen4 the d i o stration cities concept for its recognition of the need fdr comp h~ sive community programing and the need for coordinat4on of d~ al assistance programs at the local level. We also parti~uh~r1y dQ se the approach of incentives to achieve metropolitan ar~a plan i ~g and coordination, as it is con- tamed in the proposed Ur1~an Dev 1 ~ p ent Act. As we give our support to the e demonstration programs, we express a firm belief that the ~xi~t hg rograms of housing and urban development are 11~e solid base on h~ Ii the demonstration programs must be built. The prospects fo he e existing programs should be as exciting and promising as the p sp cts fqr thedemonstration cities program. We should hare assura ce that they will be strengthened where necessary by amen~Ements ti f nded at a level where they can fulfill their highest poter~ti~s, b t a part ~ of and independently of the demonstration etForts. It wo 1 b iroiuië and tragic if, in empha- sizing what cities can do under t d monstrátion cities program, we overlooked what is being accomp ~ he even with limited funds under the existing urban renewal and usi g programs. I will have some specific recommendation~ to ma e. i~ tl~is ~eg~d a little later in this testimony. Mr. Cl~airman, there are thre ~ cts of the Demonstration Cities Act or~ WhicIT~ we wish tc~ co~um ~ : 1) how the selection process will be handled ; (2) the nu~nber ofi c ti s tha~t can realistically expect to participate itt the progr~m ; and] (3) the are~ or areas, that a city can include in its demonstratio~i pr~j et. On the first point, it i~ our un~l rstanding that these demonstrations are meant to provide e'~ide~ice t~i ~ ~ massive" improvements in urban life-on a fast time scl~edtUe-~ ii ow from the use of certain tech- rnques of coordinated planni~ , oncentrated action, and pooled financing among man-~ Feder~U S ate, and local agencies. This is a dramatic concept. tf we ca O e into realizing it with the least possible delay, we feel sure th r *ill be widespread national accept- ance of an accelerated and expa ~ community development program that will, at long last4 begin o m ke the kind of impact on urban slums and blight that ~he ma O s ho have testified here-as well as our members-have been try g o achieve with limited resources under the e~dsting programs. To move with dispa1~ch, we t i k he Secretary of the Department of Housing and Urban ~eveiop nt hould be given a very flexible for- mula f,r selecting dei~ionstra ` n &ties. Cities already well advanced in coordinating various corn iii y development and social welfare programs would cert~in1~y no~ e ire a year or more of planning to qualify as a dernoñs1~ration ~i y : they might well have a qualified applicatic~n, outlining the dir~i nsons of their proposal, ready shortly atfer passage of the act. Further, these 4en~ioi~trat o s hould take place in cities of vary- ing size, of varying age, of v ry ng geographic location, confronted with varying social and e ~ o ic problems. In this way lessons would be available to cities ~ al sizes and conditions. There might well be a demonstratiou in * ity that has, up to now, made no moves toward urban renewal or o unity development. Thus, we feel that the demonstration asp c s ould be an important consideration in `the selection of cities. ~ , ~3O-878-66-pt. i-~--~8 PAGENO="0462" 428 We concluded: DEMONSTRATION CITIES AND URBAN DEVELOPMEN This leads naturally into our second comment : Whether it s realis- tic to think that there can be 60 or ~ 70 high-quality demo stration programs funded out of the $2.3 billic~n figure that has been s t as the price tag for this program. Itis ouz~view that no less than ~ he sug- gested 60 ô;r `TO demonstrations can pr4vide useful experiences n deal- ing with t~ie wide variety of situatiot~s outlined above. Th refore, NARRO feels that, if this program is~ to accomplish its state pur- p~to demonstrate what a number 4f cities can do given th neces- sary resources-we must be prepared t~ commit a great deal m e than $2.3 billion even to begin the job. As to area, or areas to be included in the demonstration, NAHRO feels that noncontiguous areas should l~e eligible for considera ion as part of a city's demonstration program.~ The President spoke f pro- viding flexibility so that cities can dete4mine the nature and ex ent of their demoi~strations. Large cities mi~bt well want to ~ attac only one section, 4r neigliboriwod, but mediu~ and small cities shoul have the opportw~ity to present truly citywi4le proposals to treat al their blighted area~s if they so desire. * Mr. Chairman, we ha'~re commented O~i three specific aspects f the demonstration cities program. We sho~tld now like to revert o our earlier point : our concern that existing 1~ederal assistance progr m&- especially the new programs enacted in i~65-rnay not be funde ade- quately to realize their highest potentials. The most critical need for funding a~ we see it is for the rban renewal program. ~ ~ When NARRO testified before this su1%~ornmittee in 1965, we s ated that the admihistration's request for $2.9~ ~illiôn in capital gran au- thorization fcn~ urban renewal projects tell considerably belo the demonstrated need for funds. We stated a~t that time: The sad fact is that, in the past, the Urban Renewal Administration ha run out of capital grant funds and has been unable to keep up with local progr~tms, thus creating serious problems for the cities. Start-and-stop programs mean that local staffs cannot be kept intact, that project lsundaries have to be cut ack, and that long-range planning and programing must be undertaken withou as- surance that funds will be available to carry ou ~ projects. In view of the fact that applications to the Urba Rèhewal Administration a~e twice exceeded ~$]~ billion a year, when sufficient grant funds were authori ed, and that since than the number of participating ~ ities has' increased, we rec m-. mend that the Oon~ress auth~lze a total of $6 bill on to be committed for cap tal grants over a period of 4years, but ~ithout limita~lon in any one year. We regret to inform you that we underestimated the seriousness of the shortage. We have since followed the monthly figures on sup ly and demand for urban renewal. funds. Urb~!xi Renewal Commission r Slayton provided the subcommittee with a g~irnpse of those figures n the first day of the hearings, when he predicted almost $1 billion n urban renewal ba~cklog by the end of this fi~al year.' , Additional d - mands on the s~itie total renewal authorizat~ori will come from citi s embarking upon ~ concentrated housing cod4 eir~orcement program, ` demolition progi~ams, and rehabilitation ~frant programs-all a~- thorized as grant-in-aid programs by the C~ngress last year. Thi~s we are faced with the most serious gap in th~. history of this progran~i between the cities' needs and the Federal Government's supply o urban funds. We face that gap at a time when this bold demonstra PAGENO="0463" DEMONSTRATION C~TIES AN uRBAN DEVELOPMENT 429 tion cities program would create a immediate and substantial new demand for urban renewal funds. This will be over and above the new demands created by the passage of the 1965 act. Mr. Chairman, this immediate nee can be met out of the $2.9 billion authorized last year by the Congres to be used over a 4-year period- if the yearly restrictions on the u e of those funds are eliminated. Those funds should be made avai able to the cities to use as their capabilities and needs demonstrate One additional word about this $2.9 billion. The commitment of this money is needed in the form of reservations to enable cities to start planning their projects. etual disbursements come later. This is advance funding, and it is v tal for housing and urban develop- ment programs. Cities are reluct nt to begin planning a project if they do not have assurances that funds will be available to car~'y it out. Until 1965 urban renewal w s conducted through advance fund- ing-defined as contract authorit . We urge the Congress to restore contract authority to the urban r newal program, and tO extend it as well~ to the demonstration cities gram. ~ Mr. Chairman, now I would i e to say a few words about cnrrent demand in the low-rent housi g program. Commissioner McGuire said last Monday, the backlog f public housing applicants on the waiting list is estimated at 500,0 . Demand for public housing n this fiscal year will probably be the largest in any year since the pa s ge of the Housing Act of 1949. The number of reservations issued i the first 8 months of the fiscal year which began last July total a ost 45,000 units in 2~T3 communities. This 8-month figure is larger t n for any full fiscal year smce 1950- when World War II housing klog and passage of the Housing Act of 1949 were stimulating fa rs. The number of applications re- ceived in this first 8 months- v r 84,000 units-is similarly the largest in 15 years. Even though th urrent pace of applications and reser- vations does not yet reflect t e new proposals authorized in the 1965 Housing and Urban Develop nt Act, the prospect is that the num- ber of localities with reserva i ns will b~ the second largest in public housing history. I cite these figures to poi t out that this program is on the move; tIiat the current annual proj tion of 60,000 units a year anticipated in the 1965 act may already outdated ; and the prospect is that the total authorization of 240,0 0 units for 4 years will undoubtedly be inadequate to meet the dem d. Needless to say, current projections do not reflect the demands t be made or~ public housing under the demonstration cities program. , As in the case of urban ren wal allocations, we recommend that the total authorization of units e made available for commitment im- mediately as the need indicat s so that communities may proceed in a sound manner. ~ Mr. Chairman, I should hi e at this point to turn to ILR. 12946, the Urban Development Act. NAHRO fully supports he President in his desire to provide a more realistic approach to P oblems that have, for some time now, de- fled solution within the limit tion of traditional political jurisdictions. I should like to quote f om our 1965 to 1~67 policy resolution, adopted at our 30th nationa conferenc~ held in Philadelphia in Octo- ber of 1965. We stated th t NA}IRO is awa~re that "~ * * emerging PAGENO="0464" 430 DEMONSTRATION CITIES AN9 URBAN DEVELOPMEN concern with the problems of urbaniz~tion that overlap the b~punds of various pdlitical jurisdictions has cre4ted a new functional u~it-the urbanized ~region-which in many cas~s crosses State bounda~ies and encroaclieson the existing framework ~f local government units." Mr. Chairman, may I request permission to place the entir~ text of this policy resolution in the record at the end of my testimony? Mr. BAm~Err. Without objection, it so ordered. Mr. FAT. Thank you, Mr. Chairman. Title I of J1I.R. 12946 seems to be ~ppropriate for begiimi g the process of integrating the deve1opme~ita1 activities of the arious political jurisdictions into a comprehei4ve and effective region 1 plan for growth a~ud development. By provid~ing financial incentives, thi~ bill will not only eric ~ urage ~ the creation of metropolitan planning ~ bodies, but will also p ovide State govei~jments an increasing role in local and regional iforts through the provision of proper mechanisms for the planning a d de- velopment of metropolitan areas. `Title II of H.R. 12946 expands and in~proves the new commu iities provisions of the Housing and tfrban 1~evelopment Act of 19 5 by increasing from $10 to $25 million the an~ount of a mortgage th t the Federal Housing Administration can in4re with a private deve oper for the ass~mb1y and improvement of a ~iew community site an by authorizing tl~e Department of Housing ~nd Urban Developmei t to make loans to ~ public land development a~encies for the assembi of new community sites, for later sale to private developers. NAURO supports both of these forms ctf Federal aid for new~ corn- munities. But, consistent with our 1965 testimony, we still feel the lack of a comprehensive national policy ai~d philosophy with resi ect to new town development. The two land ~ssembly programs car ied in this bill put special emphasis on econon~y in the assembly of k nd and on controls with respect to the social ai4I economic balance of ew communities. it is NAHR~'s view that these considera4ions do not get at the f ii, scope of what a ~iew communities program 4a~i mean to orderly urb n growth and to improved living conditions bn a national basis. T e association. still believes, as it stated in testirnony last year, that the e is an urgent necessity to undertake a concerted study aimed at esta - lishing a comprehensive concept and policy,, including an evaluati n of such key issu~s as those raised at the new communities session f NAHRO's bieimial conference last October-~(a') form of local goveri - ment, (b) land-use controls, and (c) reiat~Qnship to central citie However, in view of the critical need to undei~akesome' action to direc unplanned growtl~, we endorse the two propo~ais contained in the 196 Urban Developirie~t Act-with the prospect o~ review and adjustmen at a later date, when they can be considered as~part of a total progra~ and policy. Pending the formulation of such ta comprehensive policy w&wish to recommend a safeguard. That th~ Secretary make a find- ing that the proposed new community is consistent with the planning being done in the metropolitan area, and will not have an adverse effect on the central city. As a point of information, Mr. Chairman, ~AHRO has taken very seriously its obligation to participate in the e~ort to develop such a comprehensive policy. In addition to the sessi n at our biennial con- PAGENO="0465" I DEMONSTRATION CITIES A RBAN DEVELOPMENT 431 ferenee-a report of which 1 would/i ke to file for the record-we have presently three other studies in p~ s~ ct : a reyiew of the American experience with the three ~reenbe1t o ns built in the 1930's, an anai- ysis of British experience' with h~n - velopinent policy and limita- thin ~f city growth, átid ~ revie~ f ~ e Israeli lanU-use control sys- tern. We should like to r~cothrne~ t at the new Department initiate a research and deve1oprne~it prognt ~ i this area, a i~iátthr it is partic- ularly qualified to undert~ke. i: will not dwell on tit~e Iii of . . 12946, Mr. Chairman, except to say that local operating ofllcia]Is ~t ongly suppoi~t the development of adequate mass transportatioi~ ys ems and give approval to the increase in authorization and ext~h io of the Urban Mass Transporta- tion Act of 1964 as reque~ted in t i tit e. As to title IV-grant~ for u n nformation centers-we are en- thusiastic about the pot~nti~1 of s c centers. Our members are con- tinually hampered by a lack of ~ e uate material and the diffuseness and uncoordinated stat~s if fa t ~ Our urban "condition." As we read the legislation, it ~hould n t oi~ y be possible to assemble data on the basic characteri~tiqs, sour ~ ~ assistance, and problem trends with respect to particnlar met o ~1 tan or State areas-but to stimu- late the orderly collectibn 1~ ot r agencies of additional needed facts, for dissemination through th e~ ers~ Most individual cities have not yet managed to s~t u~ su ~ c nters of local information-but a beginning, on the State and tr politan level, as envisaged in the bill, should have a stithulatin f~ ct on the whole field of urban data collection. This cou1~l be pa t ott any the case if such centers were related to college and iiniversi y pr grams. . Now, Mr. Chairmai~i, I wou l~ e to devote the balance of my testi- mony to H.R. 13065 / and off~ ~ me suggestions for ~ improving our existing programs, ~*hidh ai~t r 11, must bear the burden of urban development progress ir~ th~ ~ majority of communities not par- ticipating in any of ~he abp~e cle onstration programs. Mr. Chairman,. there ~re ~t ni~ her of amendments in ELR. 13065 that NAHRO feels ~re part e 1~ 1y important. While endorsing the entire bill, we would lil~e to è in ent briefly on sections 104, lOS, 106, and 107. Section 104. Loiii-te'~vtt h ~ i g for di$pZaoed families-Term of lease.-This amend~nei~t w~ Id provide for greater flexibility under the promising new ~rograni/ f j~ vate leasingby making it possible to lengthen the limit pn the i~e m of lease (3 years) in the case of dis- placed families. This sho*l ake the new private leasing program even more effective as ~ rel.~c ti ii assistance tool. Section 105. Low-rent /4o ?~ g-U$e of newly constructed private houei%g.-This an~enc~rnen~ o~ld make it possible to achieve broader use of private hou~in~' res~ rc s in a local community for low-income families, including new as/ eli as existing private housing and would also encourage jo~nt vent~u es between local housing authorities and private owners in lot- an~i I die-income housing. Section 106. A~pZying ~z va ce~ in technoZogy to housing and urban deveZopment.-One ~f th~ m ortant guidelines (No. 7) in the Presi- dent's 1966 mess~ge on i~r a development is "to take advantage of mOdem cost-cutting tech~ o y without reducing the quality of work." If this guideline is tQ h v a realistic application, an intensive effort 7 PAGENO="0466" r 432 DEMONSTRATION CITIES M4 URBAN DEVEIJOPMEN must be made at once to search out t~ie best technology whi h can be utilized in ra~picUy expai~ding constimetion programs in t e urban development field. This program of assistance should provi e valua- ble insio'ht on the most productive ways to apply advanced echnical know1e~ge in a practical and broad-~ca1e effort, without sa rificing quality. Section 107. Rehabilitation a~d code ~nforcement grants.-~e agree with the adrnimstration tha.t the 1imit~tions on the amount o urban renewal gr~nts available for the new rjhabiitation and code force- ment prog*ams provided ~or ilL the 1~ousing Act of 1965 se iously hamper the success of these programs. We therefore, strongly pport the removal of these limitations as provided for in this su gested amendment. Now, Mr. Chairman, I would like to ~propose for your earne t con- sideration some additional amendments to the law not in the c rrent bill. We consider these of priority conctrn. We would like to call the attention of ~Jongress to the fact tha local government ~fficiaIs are faq~d with t~o urgent code enforc ment problems : first, that of enforcing housing and related codes wit in an intensive pr~ram to conserve ba~ical1y sbund areas and prevent them from becomir~g tomorrow's slums ; and, s~ond, that of enforcing hese codes in the worst slum areas as an imme&ate remedy for substandard housing conditions, merely to protect the health, safety, and we fare of the inhabitants. Last year, Congress enacted section' 117of the Housing and II ban Development Act of 1965 authorizing gt~ants for concentrated . ode enforcement programs in deteriorated anc~ deteriorating areas. his provision goes far toward meeting the first problem, but ign res the second-the more urgent code enforce~M problem. This is be- cause concent~*ed code enforcement prog$ms under section 117 re not authorized ~Eor use in the m9st depresse~i slum and blighted ar as. These are ar~as that are likely to be tI~e principal target of he demonstration éities program presently ui~der consideration. T ey demand immediate attention in order to alleviate the seriously h z- ardous conditions under which residents of such areas are often forc d to live which, in turn, create some of the explosive tensions and oth r conditions of social unrest. Code enforcem~ent is the only tool wi h which local governments can provide immedi~te housing relief in the areas. Ultimately, of course, the worst ~lüm' areas wilT requi e more extensive re~iewal treatment. ` ` ~ However, pen4ing such treatment, they ~continue to house va ~ numbers of people. At,the least, the inhabita~ith of these areas shouh~[ be assured housing that meets minimum standards of health, safet~, and welfare. Therefore, we urge this subcommittee to amend or clarify section 117 of the Housing and Urban Development Act of 1965 td allow slum and blighted areas to be eligible for the Federal grant4n- aid assistance authorized under this section. Mr. Chairman, we would also like to point o~it that the grant-in-aid formula under sections 116 and 117 of the 19651act does not follow the pattern established~ in urban renewal grant-in-kid programs and thus presents a serious `i~ieqtiity. We, therefore, re~ommend that sections 116, Demolition Otants, and 117, Ooncentral4d Code Enforcement Grants, be ame~nded so that the grant-in-aid assi~tance for cities of less PAGENO="0467" DEMONSTRATION CITIES AN RBAN ~ DEVELOPMENT 433 than 50,000 population as well as or cities of any size which are certified and under the Area Bedevelo in nt Act. In connection with the TJ.S. lou in Act of 19Z7, NAHRO pro- poses six priority amendments. The e are all amendments which are designed to strengthen public housi g nd enable it to meet the diffi- cult tests of an effective housing pro r in for low-income families in- cluding such key factors as site 1 ca ion, construction and design quality, social needs and incentives fo family advancement. While I will not go into detail, I would i to stress their urgency, par- ticularly in view of the relationshi of public housing to an effective demonstration cities program. Th ee of the amendments (3, 5, 6) would require no increase in Feder 1 uthorization or appropriation. The full detail on each amendment s c nt.ained in a supplement to my testimony which I request be filed fo t e rec~ord. Mr. BARI~ETT. Without objection i is so ordered. The proposed amendments are : ~ 1. Amendments to permit mod rn zation and updating of older low-rent housing developments. 2. Revision of the provision on he special subsidy for the elderly. 3. Amendment to the language of the Housing Act to encourage good as well as economical design. 4. Write-dOwn of land for low- en housing outside urban renewa}~ areas. 5. Authorization for overincom te ants to remain in occupancy and pay economic rents. 6. Authorization for sale of po ti ns of low-rent housing develop~ ments to nonprofit sponsors, und r propriate circumstances. In connection with sections 221 (d) 3)-moderate income houshig- and section 202-direct loan pro ra for the elderly-the nonprofit housing sponsors who are membe ~ f our association have indicated that a number of amendments wo ld e desirable in making th~ provi- sions more uniform and assistin n nprofit sponsors to assume their growing roles as housing resour es While we do not have specific recommendations on amendme at this time, I am listing in my sup- plemental statement a number f i portant areas where such amend- ments should be considered. A RO recommends that nonprofit groups and the Federal admin s ra ive agencies jointly consider nec- essary amendments and submit tl~ in to the Congress. Before concluding, I would li e o call attention to a recommenda- tion in our association's policy eso ution for the enactment of legis- lation similar to H.R. 6431, intr d ced in the 88th Congress by Con- gressman Rains to facilitate ren wa of central business districts. The improvement of the employme c ltnral and economic bases in our central cities must go hand in gi v with renewal of residential neigh- borhoods and with the war on ov rty. Together they constitute th~ balanced program that Secretar eaver so eloquently described last week. Mr. Chairman, we conclude ou testimony on a note of high ex- pectation. The spirit of all t e egislation before us reflects a new cohesion of goals involving all f he major social and economic pro- grams of the Nation. Coupled wi h this seiise of mutual goals is the will to provide the financial in an and operating methods to achieve coordinated action. We are ca ed for a new era in the field of community development; NA R has already pledged to do its full PAGENO="0468" 434 DEMONSTRATION CITIES AND URBAN DEVELOPMEN share of the job. We shall do so in th~e knowledge that we ar working in a joint enterprise that combines th4 strengths of an imagin tive and forceful presidential leadership ; a ~iongress that, with t e aid of this able subcommittee, gave us a g~eat piece of legislatio in 1965 and can ~ expected to do so again iii 1966 ; and an enthusi stic and able new Department of housing and Urban Development. We appreciate the opportun ity to appear before this subco mittee. (The supplement to Mr. Fay's statement, the 1965-67 pol cy reso- lution of NAHRO, and the report on "New Towns" follow: SUPPLEMENT TO THE TESTIMONY OF NAHRO PRESIDENT FRI~DERIC . FAY NAHRO'S POSITIONS ON PROVISIONS NOT IN~LTJDED IN PROPOSED 1966 HOUSING AND URBA~ DEVELOPMEI1~T LEGISLATION Low- and nvo4~1cratè-income hoi~sing NAHRO's ~o1icy resolution for 1965-67 (~,hich we request permisslo to file) calls attention to a number of important considerations for future plannng and! or operation of any housing programs for low- and moderate-income fa illies. "* * * complete concentration of low-incoifie families in center city ar as or in separate housing developments is under serious question. While ther will be a continuing need to utilize housing developments for low-Income famil es only, as ~ne strong tool to meet housing needs, there will be increasing emp ~ asis on ways to provide diversified housing. involving more than the low-incom group. "Providing incentives for low-income fami'ies to move toward eventu 1 inde- pendence is recognized as essential in all assist~nce efforts. "Providing opportunities for low-income far$lies to particpate in decis onmak- ing affecting their own welfare is now recog~ii~ed as a realistic goal. "Ooordnatio~ of all types of low-income as~istanee in a comprehensive attack on the total cVcle of deprivation is viewed `as~ the only possibility for lo g-term success in lifting a family from deep poverty." Whatever the sponsorship of housing for disadvantage families, the .tas faced is a difficult one. Over the past 25 years, the public housing program h s pro- vided important insights on housing of (1isad~antaged families which sh uld be recogniz~ed as a source of valuable experience for the future. The compl xities and frustrations of achieving good housing f~r disadvantaged families an be recognized in such key issues as site location~ construction and design q ality, management orientatlon to social needs and iI~centives for family improv ment. The long-term tests of effective low- and mo*rate-ineome housing seem to re- volvo around th~ following concepts : ~ Site locations suited to the needs and a~i$rations of low- and mod rate- income fandlies and closely bound to the ec4mmnnity social structure; Sound a~id attractive, yet economical ~construction that may have to weather bug-term use with minimum mai4tenanee costs while, at the same time, serving as an encouraging environm4tit for the occupants; Effective housing management that can ~a~ork within a minimum ope ating budget, yet be sensitive to the special characteristics and needs of deprved families ; and Opportunities for initiative and independence by low-income tenant , in- eluding that of eventually being able to purchase their own homes. If the above considerations and tests are to ~be carried. forward, as w 1 as effectively related to the new demonstration c~ttes program, then a cone rted effort must be made to strengthen current hou$ng programs with some ddi- tional strategic atmendments. Proposed amend$onts to the Housing Act of 1.937 Almost 3 year~ ago, in the summer of 1963, ARRO published its "Lo In- come Housing Program for the 1960's." A num er of the recommendation of this program have now been written into law, p inclpally through `the H~u ing and Urban Development Acts of 1964 and 1905, However, there still re am some recommendations which we feel are urgently essential to future sue ess. NAHRO specifically cites six basic amendments and proposes them for prio ity congressional action in 1966. 1. Amendments to permit modernir.~ation and a~dating of older prblic hou in~q developnwnts.-Wllile programs of sound maTnt~nance and replacement h ye PAGENO="0469" DEMONSTRATION CI'~PIES A ]~ V BAN DEVELOPMENT 435 been integral parts of public 1iotisin~ ope ~t 10 since early days of the program, many developments 1~iave facilities whi Ii to ay are obsolete. Many contaJn outmoded electrieal and utijit~* systems, i ad ~juate lawidry ~facilities, lack of indoor and outdoor play spaces for child e , t mentiOn only a few examples. Some public housing, especia ly that e elp ed during and after World War II, was constructed with subst tut~ ma 0 al , because they were the only ma- terials available. In addition, these w s a erlod in the decade Of the 1950's when local housing authorities were re ~ st~ by the Public Housing Adminis- tration to postpone important r~iajor ~na~u en nee andreplacement while return- ing residual receipts to reduc~ thE~ Fe~ral ontribution. All of these factors place a heavy responsibility or~ public l~o si g officials in 1966 to do something about housing developments th~tt a~e ag~±i . n aggressive program of moderni- zatlon undertaken now cOuld ~ay ~arge di i4 nds in the future by extending the useful life of mauy housing d~vel~pnie t w 11 beyond the 40-year amortization period. This would provide a continul g s~ rce of good housing for low-income families at a cost far less than repl c ng~ outmoded developments with new construction. . We make the foll&wlng specUlc r~com igi t~ons: (a) Amendment of tbe'pre~ent ann ~ ~ tributions provision (sec~ 10(b) of the United States~-Housing A~t o1~ 193 ) to ermit the pa~ynient to local housing authorities of the full annual/ contribu j n~ uthorized under the statute on con- clition that any residual receipts ~ifter ~ y ent of the operating costs (including reserves) and required debt / ser~?ice, i~i~ lized either for necessary moderni- zation of older housing dev~iopthents/ 0 ~ epaym~nts on existing bonded debt. (b) Amendment of United States I~ó Si g Act of 1t~37 to provide that, where modernization of a housing c~eveiopmE~u i~ essentlal to its continuing usefuliiess for low-Income families, th~ an~ortiz~t o~ period can ~ be extended beyond the 40-year term, up to an addit~ona~ 10 $ r~, ith annual `contributions continuing in this period to' assist in rkieejtng t~i xii dernization cost. An Important ad- vantage of this method~t i~ieeting 1$ ~ e~ ization cost is that it avoids the ac- cumulation of larger~erve ~i1nds over 1 i~ periods of time. We believe that these t~v/o ~ovisi~ ~ ~ otdd be of ~ ~tibstantial assistance in meeting the~11nancial~ di~ma4ds ~acIn~ he * ublic housing program over the nest few years. ,. ~ ~ ]~ 2. 1i~eDi8iO% of the previ$o~ km t1~e pp a~ subsidy f!r the e~derIy.-In 1961, the Oongress enacted ~an ~a~nen~1men~ ~ o t e Housing Act that made it possible for a local housing authority t~ re$1 e to $10 in additional contribution for every dwelling unit occ±ipled by an/ e d ly family, where such amount, in the determination of the Publ~e Housii~g A~I inistration, was necessary to enable the public housing agency to ~ease/ t e nit to the elderly family at a rent it could afford ttnd to opera$ the pro~e t o a solvent basis. Experience over the past 4 years has . d~inonstr~te4 thal~ ai~ additional elderly families have been able to be 1iou~ed in pi~lic bous~ ` I~ cause of this amendment,. However, experience has ~a1so slióWn[tbat the $ p unit per month figure does not nearly meet the gap between what most el4e l~ an afford to pay and the operating costs of public housing. ~ . I Also, it should be poii~ited out,/ t at to receive such a subsidy for elderly families, a local housing ~iuthórit~ u~ show that, at the end of a fiscal year, it would not be able to thaintain ~ sol out position, without such subsidy. NAHRO recommends t~sro action~s. ~i st that the provision in `the law relative to elderly `subsidy be an~ended t~ r0viçle that the additional contribution be equivalent to the gap betweE~n th~ bij ty to pay of elderly households and the operating cost of the public housi~i o eration (including provision for reserve but excluding debt servic~s) . Fur~i r, e would reCommend that the language of this section of the law l~e a~nend~d to ake such additional contribution avail- able withotit the restrict~ve and a~1 iifstratively difficult tie to project solvency. Such amendments wouh~ m~tke i1~ 055 ble for znany more elderly to be housed in public housing, and par~cular~y in ousing developments especially designed for and occupied by elderly hou~e ol s. 3. Amendment of the /Zant~/uag~ of t e IJous~n~'/ Act to encourage good as well as economical de$ign.-~'he only ~e er nce in the Housing Act to design in public housing is a provision $qt~iring~ t at projects be undertaken in such a manner that they will not be of! elaborat~ r xpensive design or materials. In order to reflect both local and national c~n er with good design, particularly for public housing, NAHRO str~r~gly suppO te n amendment to the Housing Act which would encourage "good" as wel s f'economical" design. PAGENO="0470" 436 DEMONSTRATION CITIES URBAN DEVELOPME T `4. Write-down of 1c14ui for public hou8i~g o~uts'kZe urban renewal a eas.-Slum clearance has been an integral part of the public housing progra since its inception in 1937. With the passage oi~ the Housing Act of 194 , Congress accepted the principle that slum clearance is a one-time operation. However, this principle has never been applied to the public housing progra , except in cases where a public housing site is part o~ an official urban renewal a ea. Thus, total slum clearance costs are still made a ~part of tb~ total developme t cost and amortized over a 40-year period. This notionly distorts public housin costs, but does not provide incentive for local housing authc~rities to acquire lum sites, with the attendant costs of i~eloeation an4 demolition. With the~ many opportunities ~ a local housing authority to contri ute to the clearance qf poor housing, every step sh4ld be taken to encourage and move forward such action, without waiting fort the designation of such ousing as part of an official urban renewal area. It is recommended that the same procecitire be authorized for publi housing sites outside urban renewal areas as for in$ide such areas. This woul~i provide that a determination be made of the, equiva~Iept price for which such s~te would be made available if it were part of an urban renewal area, under th4 formula established ~mder section 107(b) of the 11~usiug Act. Under this p~ocedure, the Public Housing Administration would remit to the local housing *~uthority at the time ~f permanent financing, an amou*t chargeableto,the annual çontribu- tions contrt~t, or a direct grapt, equal to tije net difference between t~ta1 costs of site prep~ration and price which has be~n. determined as the amo~nt to be included in t$ total development cost for pe4man&it fluancing. This would be a clearance co4, as distinct from constructio4 and development. ~i. Tenant8 tO rema4m in pubU~ h~ou8in9. oc4upancy and pay economic rents.- The Housing TAct . of 1961 included a provisi4n whereby under "special circum- stances" a tenant family in public housing, ~rith income in excess of tI~ maxi- mum income limits could remain in oceupanc~, provided it is demonstral~ed that private housing is not available In the community at a rent it can afford\to pay. Such a family, thus certified, can remain in occupancy for the "duration ~f such situation." ~ ~ This provision is helpful as a temporary measure in response to the h~rdship situation of an individual family. However,. I~.does. not affect a basic p~liey of public housing where a family whose income. i~ rising is under constant p$ssure of possible eviction. Nor does such a procedur~ lend itself to a positive pi~ogram aimed at promoting residential ~tabi1ity and~personal neighl~or relatio ships. NAHRO p~,o~oses that a public housing f~mtly reaching the point f the income limit ~aximum be allowed to remainlin ~ occupancy and pay ec n~mic rent, thus couti~ibuting to family and neighborl~ood stability. At the sam time, we recommend that the local housing authority be required to substit te an additional housing unitS within its total progi~am, for occupancy by a~ amily within the income limit eligibility, for every uzilt occupied by a family p~iying economic rent. 6. Sale of portions of pnblic housing deveZopments to nonprofit honsing ~ spon- sors.-In order to encourage a wide diversification of low and moderate income groups and household types in public housing, * ~fAHRO proposes an amend ent w-hich would make it possible, where feasible, ~or local . housing authoriti s to sell a portion of~ a public housing development ~o a nonprofit housing spo sor. In the event suc1~ a sponsor is serving families. `~vith incomes higher than hose eligible for puhl~c housing, the local housing a~ithority would be require to provide additi~nfll, substitute low-income hous~ng units as part of its otal program. . Other recom,nven&ttions.-Listed below are ad4itlo.nal recommendations t ken from the "NAHRO program for low income housing" presented to the Cong ess .in 1964 and 1905. We believe that they are still needed and are ready to dis uss the details of these recommendations at any time. 1. Assistance In the development of commercial, facilities in relation to pu lie housing. 2. Establishment of eligibility of local housing a~uthorities as sponsors of F A ~21(d) (3) and CF4 202prograrns. 3. Elimination of the 20-percent gap requirement.~ 4. Change in nitine of low-rent public housing ssistance to more accurat ly reflect its current f~mctions and program. 5. Study of the public housing mutual-help prog now used on Indian res r- vations to determine its application in an urban sett g. `I PAGENO="0471" DEMONSTRATION CITIES A RBAN DEVELOPMENT Moderate income anZ elderlij ~ousing The nonprofit housing spo~sor js I ~ ens ugly recog~Uzed as an important means o~ attaining a zuore adeq$te s ~ iy of housing for low- and moderate- income families. The chief so~urces of de al assistance fer these groups are: Sec~tion 221 (d) (3) (moderate income h ti in ) ; section .202 (direct loan program for the elderly) ; rent supplêiflen~s in o be tion with the 1~oregoing programs; and assistance under moderate-ii~icom on ing programs used in combination with the public housing progi~am. Nonprofit groups assoclate~ with U 0 have indicated that there are a number of things which wou~d be des bi in assisting nonprofit groups to as- sume their new responsibillt~es. Som f ~ e recommendations require changes in the law, while' others are i~atl~ers o ci~i nistration, , RIley i~'iclude in general, needs for more uniformity t~etween t t~ t~irements a~id provisions of section 221(d) (3) and section 202 a~id i~nore e ha cal assistance geared to the needs of the nonprofit sponsor to enable ~im t u~t ify for assistance and carry through with long-term management ~esponsi U tie . We woulcilibe to cite the following: (1) . Organizational and p~ani~ing ~ : S ction 221(d) (3) provIdes for such a fee while section 202 does r~ot. On j~ ot er hand, sec~tlon 202 will authorize a loan cousultant fee but wil~ no~ per t ~ ch fee to `be given to the staff of the nonprofit agency performi~ su~h w ` ~ (2) Payment for equipm~nt : Offic s at~ community space : Section 221 (d) (3) permits such equipr~ae*t to be ~nclu as cost iteri~s under the mortgage ; under section 202, the `nonprofit ~poi~spr t .urchase such equipment. (3) Working capital ~ T~rnd~ se I z~ 02, a nonp,~ofit sponsor must put in escrow one-quarter of th~ 1~r~t ` ye r s 0 rating co517A~, unless he ~an show 75 percent eccupancy at preject openi . nder s~cUon.221(d~) (3) such working capital can be a mortgáge/iter~. ` (4) Adaptabilityto eld~rly occu ~i c~. tnder section202, recplirements permit occupancy of an efficienc~r upit b , ss~ persons. * Under seetion 221(d) (3) no. more than 10 percent of 411 u~ilts ~ ` efficiency, thus making it les~ useful as housing for elderly. Thi~ last req e nt makesrehabifitation difficult in many instances since n~any st$ctu~es a a la le fOr rehabilitation contain small units. . (5) Section 221 (d) (3)/ re4uire e~1tfication of the city's workable program; section 202 does not. I ~ (6) it is not clear w~ietl~er c ~t ~ r training management employees Is an eligible cost under ei~her/.or both p o i~ S. ~ ` In general; NAHRO *mld rec me `d that administrators of the agencies of `the `Department of IflI~~D vØspön ~ le or the administration of section 202 and 221(d) (3) be encouraged b~y the o~ ess to work together and with nonprofit sponsors to make spons~r r~quir ~ $ as uniform asposslble, as well as provide additional technical a~sistánee 0 ~1' ble nonprofit groups ` mere effectively to meet their respousibili1~ies. Aft ~` ca eful examinatiOn by these groups, we sug- gest that a listing of a y ~echn ~ 1 a endments necessary be submitted for the consideration of the Oo~gr~ss. 1965-67 PoLICY Eas~Lv~xoN ~` v~ `NAtONALASsocIA'rIoN or HoUsING AND RED ~V XA~, MENT OFFICIALS (Adopted at 30th Nationa' Con ~ eu e, Sheraton Hotel, Philadelphia, Pa., `October 24-27, 1965, at bi~nn1al bu i e~ meeting of members, October 26, L965) REAMBL~ The United State~ is stag e F~g under the burdens of the urban age. An immense job lies abe~d i~i adj s. itt institutions, attitudes, and living patterns to a new, overwhelming, rapidly c a ging America. Nowhere is the magnitude of the job' more ev1denl~ than in h fi ld of housing and urban development. NAITRO believes ~t ~S fort ~i te hat, at this' critical juncture in the evolution of urbanism in the United t tes a Cabinet-rank Department of Housing and Urban Development is now eal ty. This Department can provide the frame- work and focus to l~rin~ tog f~ er 11 the diverse, comple~ facets of urban life in a meaningful allia*ce. It i ort nate, also, that many of the basic legislative authorisations nec~ssa~y to ye ousing and ~irban development programs more effectively are now/ part of iOa 1 law : the Housing Act of 19434 and the Hous- ing and Communit~r D~velo ~ cut Act of 19~5 reflect a broadened vision of urban development and give new 1 f t~ many older programs. 437 I I PAGENO="0472" 438 DEMONSTRATION CITIES AN~ URBAN DEVELOPMEN But the association views these developr4ents as only a beginning. ~rue, there is a new Department of Housing and Urba~ DevelGpment * * * but t~iere is no consensus of what a modern city should b~. True, there is irnpressiv~ new leg- islation that includes extension of urban re~iewa1 and hGusing program~, Federal assistance Lor local codes administration, t4nd new financing aids for such pro- grams as ~en space and suburban develo~inent * * ~ but there is n~ compre- hensive pro~ess that encompasses all of thes~ programs and covers both ~egenera- tion of older areas and guidance of growth ih newly developing areas. As a measure of the inadequacy of our consensus of what urban life s~iould be, we have as our only objective the declaration of purpose in the 194~ \Housing Act : "a decent home and a suitable living environment for every 4merican family." This declaration is useful as a goal but it is no substitute foi~ an em- bracing philosophy of a new urban social sttucture in which the va1ue~ associ- ated with home and children, community life~and friends, living and coo$rating with nature, will have a chance to develop. ~ In the area of national houaing policy, we ~iave a loose alinement of i~ationa1 economic poli4~y and housing production, in ~wbich Federal housing pi~ograms have been red\uced or expanded largely in re4ponse to pressures of a cI~anging economic cli1n~tte. In 1965, we need a co~rdl4ated housing and economh~ policy that will pern~it progress 1~oward~1ong-range housing goals under all klnds of economic conditions. ~ In terms of an evolution of urban developthent planning, we are strt~ggling under a "project" concept at a time when dyna~nic physical, economic, and\social forces are sweeping aside community and even metropolitan boundarie~ into larger concentrations of urban form. NAHRO `believes the naxt few years will coutinue to witness a revolutipn on the urban scene. We know only that much of ~he urban structure and pr~ctice of the past is dead that that we are in motion tc~ward a new society. The t~ying test for all institutions and jwograms caught in~this cycle of urban chang~ will be the maturity and sensitivity with which we $ft their past, in order to r~tain or discard-and S~he way we adapt them te the n4w look of the future. To assist this ~ran$iaon into a new urban ages NABRO sees the foiowin~ as necessary areas for aetiouin1965-67. We have $tnumberecl these areas ui~ider a priority sequen4~e, because we believe all of thes~ actions must proceed imn~edi- ately-and simultaneously. ~ ~ Actfon area A.-We must work to develop a declaratien of goals to guide urban development in order to give a unity of purpose to the many elements that a~e a part of the process. Given this sense of a unified ~vit~le, itis our hope that ~he followthrough from legislative authorization-tG appropriation of funds-~-to the initiation of local action will come without ftiction and delay. Action area B~-W,e must help to evolve new org~tnizational structures and ~n- terrelationships for all of the governmental nge~cies, industries, institutioi~s, and citizen organizations that function to reach u4an development goals. Action area 0.-We must reshape the specific p4ograms with which NAHI~O members are conct~*ned (housing, renewal, and cod~s administration) to fit bo~h the purpose.s and tI~e structures that come out of 4ction areas A and B. Action area D.-~We must take the initiative in la~rnching an immediate, larg - scale training and ~ Bianpower development program for the urban deve1opmer~t professions, encouraging teaching institutions at all levels to educate youn~ people in the philosophy and the technique of urban development and then recrui- ing them as workers in the field. Action area A We must work to develop a declaration of goals to guide urban development in order to give a unity of purpose to the many elem4nts that are a part of the process. Given this sense of a unified whole, it is our 1~ope that the followtbrough from legislative authOrization-to appropriation of ~ünds-to the initiation of local action will come without friction and delay. The total process o1~ urban development must be ide~itified and areas of public responsibility must be ~lefined for coping with each state in the cycle of urbaniza- tion : growth, maturity, decline, decay. To undertake this taskS we must mobilize the same type of group that this as- sociation brought together in 1933 to develop a hQusin~ program for the United States. The combined wisdom of legislators, administrators, scholars, planners, architects, and civic leaders must be focused on the potentials and problems of urbanization. From this mobilization should come a national philosophy of urban life expressing a consensus that can be unhesitatingly translated into ac- tion programs. PAGENO="0473" DEMONSTRATION CITIES A ~ ~BAN DEVELOPMENT 467 for some of the thinking that we i i~o the design award program of the Housing and Home Fi~anci ~A~gency in which the re~ommen- dations covered public housing dev 1 p ents. I think this has been quite a s i u ating things. And of course, it does not end here. It i~s a m t e~ as you have indicated, as to which we need constantly tobe ale t. Mr. S~ GERMAIN. And lastly, r. Chairman, No. 5, you suggest "Authorization for overi~icome t ~ an s to remain in occupancy and pay economic rents." I ~lo not ti ~ if you want to answer this for the record now. If you wa~t t ub ~iit an answer later, it will be all right with me. My question there is, ~hat is y r easonirig behind it as to why? Mr. FAT. We have, o~ c~urs , . Congressman, covered this in greater detail than the Supplem t t . at is attached to the testimony. The reasoning generally is that t is a very disruptive process. The individual gets up to th~ pc~int er~ he is no longer eligible for the public housing developn~en~. e h s to move out. But there is no place for him to go ex4ept bac ~ ir~ o a deteriorating neighborhood. It is the question of th~ gap, t ii man's land that exists between the top limits in public hou i g and the lowest rent in private enterprise. Mr. S~ GERMAIN. Sc~ that a ~ n ment of this type would include ~ guidelines ? In other ~vords, f th family cannot go into housing other than ~ Mr. FAT. That is rigl~t. Mr. ST GERMAIN. I~? he ca ~ n t o into housing that is equal or better than what he is iii? Mr. FAY. That is rig~it. ~ Mr. BARRETT. The ti~ne Qf th en leman has expired. All time hasexpired~ Mr. Fay, I certhinly i~vant t ~ ~ ank you for your fine testimony this morning. We have been 1 d o have you. Mr. FAY. Thank yo~i, Mr. C ir an, Mr. BARRETT. The ~text wi ss vill be Paul Davidoff, chairman of the Department of C~ty Pla ~ in , Hunter College, New York, rep- resenting the Americans fo ~ D mocratic Action, accompanied by David Cohen. ~ ~ Mr. Davidoff, we a~e glad ~ ~ h ye you here this morning, and your companion. You ar~ well k*o U to us in the great City of Brotherly Love, Philadelphia. And w~ er ainly want you to feel at home here' this morning. If you desir~, M . Davidoff to make your statement in full,' and then have us asl~ o e questions after you complete your statement, you may do so. / STATEMENT OP P4UL DA~fr Do , CBAIRMAN, DEPARTMENT OP CITY PLANNING, R1i~NT1~ C `LLEGE, NEW YORK; ACCOMPANIED BY DAVID COEE~, LEGIS~t T VE I~EPBESENT'ATIVE, AMEftICANS FOR DEMOCRATIC ACTI Mr. DAVTDOFr. Thank y r. Chairman. It is a great privilege' for me to appear hire ~efo e y~ r committee. I am a former resident * of your city, havin~g JUst 1 ~f t ere. I am now director of the Urban Research Center aitd prof ~ or of urban planning, and chairman of a PAGENO="0474" I -~ ~ I ~ ~ ,~ ~ 468 DEMONSTRATION CITIES ANDS UIt~AN DEVELOPMENT newly formed graduate urban p1anni~g program at Hunter College of the City University of ~ew York. ~Eut prior to that time, I spent 7 years teaehing in the Department of city Planning in the Unversity of PennsylVania. I serve o~a the ADA~ Housing and TJrban evelop- ment Comi~dssion, and I chair one oft its subcommittees. On behalf of Americans for Demo4ratic Action I thank t e sub- committee for allowing ADA time tb testify on H.R. 123 1-the Demonstration Cities Act of 1966, H.E. 12939-the Urban D velop- ment Act, and H.R. 13064-the Housing and Urban Devel pment Amendments of 1966. We fully support the administratioa in its goal of achie ing a suitable living environment for all. *e administration's pr posals are important steps in that direction. ~ However, as is natur 1 and appropriate in a free society, ADA res~ctfully will suggest V rious amendmentsk to the legislatien under c~nsideration. ADA b lieves that its sugg~sted amendments will ac4erate the "forces of ch nge" in our urban areas so that they will in fa~t be "the masterpieces f our civilization." First, I would like to discuss our urban problem. We welcome the administration's outliite of `the current urban rob- lem. To face our problems squarely and openly is an essential step in developing public policy. President~ Johnson's message on city development specified the major problems~ ~ Next, I would like to comment on the 4eed for comprehensive ro- grams to attain a suitable living environ4ient. Our principle go 1 is that all AmerIcans are entitled to live in.~, suitable environment and that they are entitled to it now. They wei~ entitled to it by the H us- ing Act of 194~, and they certainly are e$itled to it at present, nd that goal should be reached as rapidly as ~ossible. Measured aga nst this essential goal the proposals of the adtiiinistration, ~ while bol in conception, are woefully inadequate. The goal of "rebuilding s urn and blighted areas and for providing the public facilities and serv ces necessary to improve the general welfare of Lim people who live in t ese areas" commands our enthusiastic supports The size of the Fede al commitment, h~~ever, in this~-in th~ ~ills~ ~ under considerat on amounts to pian~ied neglect. The small Fed~ral commitment propo ed in the demonstration cities program will n4t rebuild our cities. il- lions of Americans will continue to liv~ thei*lives in slum housing a d blighted neighborhoods. We engage in a process of self-deceptioii if we believe that H. 12341. H.IR. 12939, and H.R. 13064 fulfill the goal set forth by t e Presidential message : Legislation to be "of sufficient magnitude bo h i~TI its physical and social dimensions to arrest blight and decay in e - tire neighborhoods." Needed is at least a $2~ billion program over t e next 5 years that will provide an increasing ~`ederal commitment eac i year. . . I ~ No matter ho~ bold and imaginative pr4grams are (such as th administration's proposals) , if there is a pa~icity of Federal invest ment the needs of the urban poor will remain kinrnet. What is needed is not a demonstration program but a full-sca~e assault that recognize slums cannot be eliminated until poverty is en~led. Solutions to prob lems concerning o~ir cities cannot be considered apart from measure necessary for achieving permanent full empkyrnent and eliminating poverty. PAGENO="0475" DEMONSTRATION CITIES 1~ URBAN DEVELOPMENT 469 One-fifth of our popu1a~ion, A e i~ ?s poor, have incOmes below the minimum standards adeqthite fo Fyi g above subsistence. We can- not have decent housing ~nl~ss w ~i sue a poliøy that bad housing is primarily a problem of to~ m~iny ` e icans having insufficient income. Congress must enact legi~lation t t ill deliberately raise the income of the poor through sucl~ device s I creasing the minimum wage to $2 per hour and providir~g cbver e f r those not now protected, clou- bling social security benefits, esta I s1~ ng national unemployment com- pensation standards, adppting b th the negative income tax, and establishing family allo*ances ~ a ~ pplement to other forms of in- come maintenance, and creatin ~ e ded subprofessional jobs in our public services. I In the midst of aMIue~ce we St not permit limited job opportu- nities. In additiOn to ei~ding in ffi~ ent inconie, we need an increased Federal investment prograth of ffl~ent size and scope that will begin to dent all our unmet pri~Tat~ an u1~ ic needs. ADA poliëy rêcomm~nd~atio s a e designed to obtain three basic domestic goals : 1. Achieve full emplc~yment y i9 7 ; : ~ 2. Eliminate poverty by 1970 ; n ~ 3. Attain a standar4 o~ liv ~ hat substantially rises above the poverty level by 1975. To implement these ~oa~ w rg that the subcomn~ittee arnendthe demonstratioli cities .b~li to s t an additional standard for Federal grants : The Secretary of the p~ ~tment of housing and Urban De- velopment ~ should be 4ireeted ~ nuary 1, 1~67, to (1) establish a comprehensive deftniti~n of d c ~t, safe? and ~sanitary housing and a suitable living enviroi~meht t a ould inc1ude~ but is not limited to, economic and social f~cto~s ; ( ~ commend how this can be achieved at rents all people can affor . ~ y 1968 to receive ~ Federal funds under the demonstra~iou citt~ a d urban renewal programs cities should have plans on ho~ to a ie e by no later than 1972 decent, safe, and sanitary housing3 and b 97 a suitable living environment for all of its citizens. 4dd~tiona I centives should ~ be offered to cities that can implement tI~eir pla~i ~ speedier bi~sis. We believe that a qon~ress a~ ma~idate that establishes time limi- tations is essential tolobtain h ~e necessary goals. Our achievements in outer space are a4ipl~ evia n~ of the value of setting forth time limitations. Time 1~mitatio t nd to produce substantial Federal commitments. With$t a ti e i it~tion problems are too often fought by rhetoric rather tI~an acti ~ s a planner I spend a great deal of time teaching the im~or~anc f tme dimensions. Unless time dimen- sions are based on prpgrams, tm limits ha~re no meaning as a measure of success in obtaini~ig our ~o is, Next I would lik~ to tur~i o discussion of racial discrimination and the urban programs bef~ tt . An .~ffi~ative pr~gr~m ~n i:u~ discrimination in federally financed programs by the ~ep~rtm~ t f Housing and Urban Development and. other Federal ~epártm~ ts s essential to obtaining a suitable liv- ing environment. ~he pas~ e f the Civil Rights Act of 1964 was a milestone on the road to en~U g acial discrimination. Unfortunately HUD has timidly, hapha~a di , and sluggishly enforced the Civil Rights Act of 1964, nartici~l ri as it relates to title VI. PAGENO="0476" 470 DEMONSTRATION CITIES AND ~URBAN DEVELOPMENT Title VT ~ of the 1964 Civil Rights et has a clear congr ssioriai mandate. It specifically states "no pe~son in the United State shall, on this ground of race, color, or natiOnal origin, be exclude from participation in, or be denied the benefits of, or be subjected to d scrim- ination under any program or activity receiving Federal fi ancial assistance." The relationship of title VI to urban problems s well documented in an excellent pamphlet emtitled "Metropolitan H using Desegregation," by John Silard and Aithur Levin, published y the Potomac Institute. The authors demonstrate that many t~housands of families a e dis- placed from their homes every year by f~derally financed proje un- der the workthle program for communit~ improvement and othe gov- ermnental activities. The authors of the pamphlet suggest a modest but firm po itive program for housing desegregation, which ADA fully supports. We request that this program be made part of the hearing record. We strongly urge that the committee report specifically state that title VI enforcement vigorously be stepped up along the lines out med in the Silard and Levin pamphlet. Congress has acted. Title VT of the Ci~il Rights Act of 1964 1 the law of the la*d. This co~ngressional m4idat~ should not be u der- mined by non~nforcement by HTJD and 4ther Federal agencies. Next, I woulki like to turn to recommenkled changes on H.R. 1 341, H.R. 12939, and H.R. 13064. Mr. Chairnian, I now would like to dis- cuss specific amendments to the legislatioh under consideration. We urge that H.R. 12341, H.R. 12939, and H.E. 13064 be combined an be reported out as a clean bill. 1. We support the Ruess-Ashley-Moorhead amendment that w uld reciuire two additional criteria for fund elig~ibility. First, cities that have "economic and so4~ial pressures such as t ose involving or resulting from population ~cnsity, crime rate, pu lic welfare participation. delinquency, poverty,' unemployment, ed ca- tion levels. health and disease characteristics, and substandard h us- ing" should have nriOrity in ~eceiving funds~ Second, to receive funds such rieighborhodcls should have a worka le program such as is currently required for receiving urban rene ~ a] funds. This amendment will help assure that the legislation achie~es its stated social nurpose. * ~ 2. Any city that meets the criteria specified in the demonstrati~n cities program should be eligible for receivi~ funds. More than o~ie neighborhood in. a city, if it is otherwise eli~ible, should be rec.eivi~ig funds. We beli~1Te it is socially explosivel to limit the program to just one neighbdrhood in each eligible city.~ In short, nublic noli y should not force a city to choose between its Harlem, South Bron and Bedford-Stuyvesant. 3. The bill's purpose should specifically call for dispersal of raci I and income ghettos. The legislation should deliberately promo e residential integration of both different income classes and racL 1 groups. Cities should be required to show that these oroposals woul not lead to greater segregation in the affected neighborhoods and m the city. 4. We believe that comprehensive city ~emonstration program should include as one of the. criteria for fun~flng subsectmns (1)(5 inclusive of sectio~i 4(c). We support a del4~tion on page 5 of irne PAGENO="0477" DEMONSThAPION CITIES ~ D URBAN DEVELOPMENT 471 17 and 18 and renumbering subse ti~ s (1)-(5) to subsections (9)- (13) ofseetion4(b). ~ I The next recommendation is th~ o~ important. 5. As a condition of re~eiv~ng ~te ç ~tration cities or urban renewal funds those relocated shquld be i~e oc ted to a suitable living environ- ment. Our various suggestions ~ r ocation also encompass changes in the requirement of th~ ~*ork b,e rogram. The relocation stand- ards required in section 1O~ (c) f t e housing Act of 1949 are in- sufficient. Mr. BARRETT. You sa~ on 4 th t " e believe that the comprehensive city demonstration shou~d be in 1 d~d as one of the criteria for fund- ing sections"-so forth ~nd so f ~ h. You submit a deletion on page 5 of lines, you said 17. Mr. DAVIDOFF. 17 an~l 18. s, am making the change because it is subsection (c) th~t we ar de eting, that should be changed so that subsections (1) through (~ f ilowing that are continued after subsection (8) of sectio~ 4(b) . ~ Mr. BARRMI~. Thank you. , Mr. DAvID0FF. We s~y that ys em should be established whereby the Federal coordinator, or th egonal HTJD office, would be able to effectively inspect and iver~fy t ~ t t ose relocated for any purpose are relocated to * a suitable living vi onment. This applies to all relo- cating caused by federally spo or d programs. And we believe that this can be accomplisI~ed by t si ple change, though not simple in its administration, to ~ee that t e erson who is relocated is relocated in a decent neighborhood. n e will have more to say about that later. 6. Persons should not be r 1 c~t ~d tO areas which are planned for condemnation within 5 years. P rt of the culture and psychology of poverty is that a citi~en is o~t n elocated to a dwelling that will be torn down shortly af~er he ge~ se tied in it. This guarantees moving families and individ~ials fro o e slum to another. Where a com- munity has already planiied o te r down an area it is both unfair and expensive to relocate person nt this area. And it is this practice as well which has led to m~e o the objection by many to the way the urban renewal prbgr~m l~a be n practiced. 7. Those relocated~ should e ermitted greater compensation than they now currently receive. o often those relocated, usually low- income families, pay higher re ts than before relocation, but their incomes are not êorrespondi~i ly increased. Compensation, with ade- quate controls, should inch~d ayment of full rent differential and include compensatio~rt fQr th~ ~r hase of furniture. 8. Those relocated shoul4 ot e relocated to the census tract where the median income is in th~ lo est quantile of the city's population. Low-income housing too o t n cans slums and relocatees should not be placed there. `1~his pro i io would tend to assure that relocatees are placed in desir~bl~ neig borhoods. This would probably be un- necessary if our p~oposal i r gard to relocation in suitable living environment ~v~re put mt efl~ ct. 9. In code enfoçcement t e Housing Act of 1964 clearly demon- strates the congre~sional n e t was that HUD should certify only those workable prbgrams p o ucing efFective local code enforcement efforts. The same réqui e ei t should apply to the demonstration PAGENO="0478" 472 DEW~NSTRATTON aiTIES AND ~ URBAN DEVELOPMENT cities bill. ~ It is evident that urban enewal projects that d molish housing, ~thd proceed at the expense of code enforcement, ave no real benefit since slum areas develop in the marginal areas, thus re- quiring additional demolition. Code enforcement is an e4ceiient preventative. We urge the committee to direct HTJD to expand its code ei~iforce- ment operations to include systematic~ inspections of buildin s, in- cluding the interior, to enable HTJD to i~erify the validity of ci ims of code enforcement under workable programs. We believe th t this would imple~ment the 1964 lTousin.g A4. In short, HTJD ins ectors would not eitforee codes, but they woul*~1 gather evidence to ch ck on whether the ~ity is doing so. ~ 10. Cities should be required to take oi~er the property of slum land- lords who fail to obey the housing code. In addition, HTJD s ould make inspections to see that the cities are operating such housi g at code standards. This should also be a workable program require ent. Next, we turn to amendments to ET.R. 12939-Urban Develop ent Act. ~ 1. In section 206 dealing with section 7~1(A) of tho Housing et of 1954 we belie~re that one of the conditio~s for getting grants u der section 701 is that the local planning ager~cy develop a comprehe sive plan that sho~+s how it will set forth polio~es dealing with the environ- mental and educational needs of low-incoi~e families. In short, ocal planning grants should be geared to complement national antipov~rty policy. Suburban communities unwilling to aid the war aga~nst poverty, should be excluded from the benefits of that section. 2. The administration has for the third time proposed a progran~i of mortgage insurance for land development. On the surface, provid~ng mortgage insurance for land dev&.opme~it programs that will\ be utilized for new subdivisions under entirel~ new communities, app~ars to be a major innovation. However, the b411 only provides a nomi~ia1 new town propqsal. The propoaal in the TJtban Development Act ~ill meet the nationM goal of a decent, safe, an~l sanitary house for ev~ry American only if the provision assures ththt low- and midd1e-inco~ne persons and the elderly will be able to purchase and obtain housing\in large subdivisions in the new communities. The administration's pz~o- gram fails to support fully its ideology of fighting a total war agai4st poverty. There is no explicit provision made for providing a large number of new homes for low-income fami]ties. The land development program, if it is tp assist in creating equ~d housing opportunity, must take into accou4 the need of low-incon'~e families, regardl~ss of race of ethnic group, ~o gain access along wit~h others to areas o~ new development. Such private land developmeni~s should be granted Government mortgage in~urance only if they pr - pose to establish communities that all sectors bf the population can a - ford. At least one-third of all insured land development should b required to be priced at an available level for low-income families. 4 specific low-income provision should be written into the law. Ou support for the program is contingent upon sitch a provision being in cluded. It would be a great tragedy to have the F~deral Government sup- porting an expensive new program furthering economic class distinc- tion between central city residents and subrban residents. It is PAGENO="0479" DEMONSTRATION CITIES RBAN DEVELOPMENT 473 anomalous to create new ~ow~s, ~ i1~ rebuilding cities, without as- suring that a significant r~umber f ~ ocatees would have the choice of living in the new towi~s. Fed r 1 rograms should not force the poor to remain in the cit~ ghett ~ or force them to relocate to new towns. The poor ~s well as the th r classes should be enabled to choosewhere to live. ~ Eu1~ as pres n ly worded the two' bills may 1~orce the poor to remain in the poor ar s~ , . . 3. A balanced transportation s s ~ is essential to a suitable living environment. Seventy perc~nt f oii population now live in urban areas. Conservative est~niates ~ ~ te that th~ urban population will increase by an addijtio~al 4 p~ cefit within 20 years. To this end we support in addition to t é px~ posed n'utss transit amendments the following : (a) The Reuss-Ashle~-Mb~rh d mendment `requiring the Secre- tary of HUD to develop ~n "exp d te progran~ for research, the devel- opment and demon~tratibn ç~f' n ~v s~ `tem'~ of urban transport no later than January 1, 1967." This ~ dment appropriately deals with the mass transit prob1en~ co~n.pr e9 ively. It encompasses the entire urban mass transit problem-t c r~cal, financial, economic, govern- mental, and social. (14 The B'ingham-Tyd~ngs p o osal ` (H.R. 1Q126) to permit a State to use highway tri~st ~und oi~ rban mass `transportation. This will foster creative fede~lism. ` (e) The Bingham-Williams e t~ sion of the mass transit program (ER. 12407) to inclu4e opera i g eficits of mass transit companies providing commuter s~rv~ces ci equiring the local public agency and company to devel~p a co re ensive commuter service improve- mentplan. I Next, we turn our attention o a endments to H.R. 13064-Housing and Urban Developmept Ame ~ ts of 1966. 1. To expand reha1~ilithted ot~ ing we support the Sullivan pro- posal (H.R. 13063) td athend t e ational Housing Act to authorize mortgages, executhd 1~y ~on r fi~ or~'anizations, to finance the put- chase and rehahilitatipn of d4t ri rating or substandard housing for subsequent sale to low-incOme ~ rc asers. Next, we like to re~er to athe d ents to the Internal Revenue Code which we believe wou~1d impr~ e ousing conditions in our cities. 2. We support tax credits ~O l~ dlords who rent rehabilitated hous- ing to low-income .fa~ii1ies a~ ~ el w market rates. Fair market rates can be established j111 th~ sai~e i~ nner as they are for rent subsidies. Those renting the r~babiliMt 4 ousing would be the same persons eligible for the rent ~ub~idy ~ o~ am. Second, we would like to bring to your attention a~en~tme~ t~ the Internal Revenue Code. 1. Tax credit for 1T~uilder d~ st noting units for low-income families or for landlord rentjng ~t lc~ r~t e to low-income families. ~. The Architect~' ~en al Committee in Harlem (ARCH), through its Director, Mr. i ha d Hatch, and its counsel, Mr. Leon Friedman have pro~osed a ~ ii e in the Internal Revenue Code which would have great effect . in pr~ enting landlords from abusing their buildings and the l~ve~ of os who occupy them. I should like to ask the committee's appro a f r making this statement by ARCH a part of the hearing ~`ec~rd. Mr. BARI~ETT. IVi/thout o j cti n, it is so ordQred. PAGENO="0480" 474 D~MONSPRATION CITIES ANI~ URBAN DEVELOPMEN (The statement referred to follows:) ARCIIIPECTS' RENEW)iL OOMMITTI~E IN HARLEM, I a.,. New Yo~'k, N.Y., Februo~ry 1, 1966. One very effective way of dealing with 4ixmlords in New York Cit (and in other urban centers) who own ~nd maintain~bu1iding~ in a condition con inuously dangerous tq their tenants wcn~1d be to depr4ve suchowners of their de reciation allowance n*icler section 167 af the Internaliflevenue Oode. In many ases, the reascm why landlords purchase slum buiidi~igs and operate them so ro~fitably without tald*ig care of them ie because of 1~1ie depreciation allowance. If they were deprived of that economic henefit heca~use the buildings they ow ed were certified by the appropriate city agency to l~e in a deteriorating condition, this would be a most effective incentive for theni to keep the buildings in good repair. The economies of the situation can be shown~in the following example: A real estate operator may purchase a sl~nn building for $200,000. ~f this, $80,000 may be in cash and the other $120,00Q~may he by mortgage. In ai~y given year he would have the following expenses : `~ Interest on mortgage I. ~12, 000 Taxes 4- \ 8, 000 Heat, water, etc ~ \ 5, 000 Total__.~ ~ ~ 000 The owner may take in yearly rents up to~$45,000 on property of thi~ kind. Deducting the expenses liSted above, he would have total income of $20,000 on his original cash investment of $80,000. MorOover, because of the depr$iation allowance, he may end up by paying no taxes ~vhatsoever on the $20,000 h~icome. If the useful life of a building is 20 years, under straight line depreciati\on, he could deduct $10,000 against his income and j~ay taxes on only $10,000. ~ Thus (depending on ~vhat income the owner derives from other sources) , he coul~1 save anywhere from $2,200 to $4,800 on his tax bill. ~n addition, if he takes adv~ntage of the accelerated depreciation provisions of secl~ion 167 o~f the code, he can ~eduet as much as $20~000 in the first year after his ~urcbase (in the second y$r his depreciation all~wance would be $18,000 ; in 1~ie third $1~,200, etc.) , thi~s, in the above case, ~ he could end up by paying n4 taxes whatsoever a1thou~h he earned $20,000 ilicome on an $80,000 cash invesl~ment. It is for this reasoi~ that investments in sPurn tenements are so profitable. ~ \ If a slumlord were deprived of the depreciati~on allowance, he would ha~re to pay taxes on the entire $20,000 income, which would mean a tax bite of p to $9,600. Slumlords faced with the difference between paying no tax and a tax of $9,600 in any given year would be more likely to invest $2,000-$3,000 or ore to fix up their buildings. An amendment could be made to section 167 tof the Internal Revenue ode adding an new subsection (j ) which would read as$follows: " (j) No depreciation deduction shall be al1o~ed to any taxpayer owni g a housing accommodation (other tha~i a single-fa4illy residence occupied by the owner thereof) if at any time during the tax year ~nch accommodation is certi ed by any governmei~tal agency having juri~diction ~o be a fire hazard or in a on- tinued dangerous condition or detrimental to life oi~ health." Section 2(f) (9) of the rent, eviction, and reijabilitation regulations of he New York City Rent and Rehahilitation Admini4trati'on uses similar langu ge with respect to putting otherwise exempt housing accommodations under r nt control. The same kind of test could be applied with respect to the depreciat on allowance. Regulations issued by the Secretary of the Treasury might prov de ~ that any violation of a city's criminal code or aidtninistrative code for man- taming a `housing accommodation in a continued 4angerous condition should be transmitted to the local Internal Revenue Service office so that they would hay a record of such violations for checking against th4 tax return of the owner ~f the building. * ~ I ~ There should be no constitutional difficulties in ~ueh ~n amendment. Dedt~c- tions are a matter . of legislative grace and can bt~ conditioned by Congress jn any reasonable way it chooses. ~ Moreover, such an amendment fits within the tl~eory of the depreciation a - lowance. The allowance is appropriate only whereta building is kept in norm 1 repair and gradually loses its value over a period o~ time. In that situation, a owner should not be required to take his loss only In the year when the buildin PAGENO="0481" DEMONSTRATION C~TI1~S A REAN DEVELOPMENT 475 finally collapses, but should be able to c rg the value ot the building over its norixial use. However, where1 slt~m1or~s d not keep a `building in normal repair and through their aetioi~ ax~d noi~a tt~ endauger the lives of its tenants, they should not be given the ]~rlvilege ~f ~ eading their loss over a period of timeS They will be able to take their ~ s ~ ly in the year when It is actually suffered, i.e,, when the bulldi~g ~ctua1/1~y ~ lapses. ~&s ` a practical matter, no landlord could possibly wait üntj~ the iLa t ear `to `t~kebis loss and would be compelled to make the necess~ry i~epa1r~ o eep his bn~iu~ In, iL safe eondlt1o~i and thus be allowed to take his depr ~ti ii a1lo~tái~è. ` The tax code could also be amended to ii~sure `that a slum o d v uld not ~a~rr~ back or forward any loss on a building collapsing /bec4use t w~ in a dangerous ~ondition through the owner's nonactlon This ~vou1d pr t ct gainst such an owner obtaining any kind of tax saving. I ,, A proposal of this kind wc~uld be a ost effective e~onomlc sanction ~ against slumlords in New York City a~ad e~sew e~ `. . ~ `. ~`L~o~FRzEDMA~,Esq. NoTEs.-I would suggest t~iat versi o~ section 167 above `be further reviski to read *. * * if for a pe~od of' d~ s or more ~ in any tax year such accommodation. 2. It should be lncttmbent/ up~n `th *~ er, nottlie IRS, to demonstrate (by attaching a copy o~ ~ c1e~n ~eport fr tb local buildings department) . that his deductions are allowable. ~ ` . ` ` ~ ` ` ` ` 0. R. HAPci~. Mr. DAVIDOFF. The 4RdH r posal recommends the adoption o~ a new subsection, subsec~ior~ (j ) ~ s~ tion 167 of the Internal Revenue Code. Subsection (j ) *oti~d re ~ follows : "No depreciation ded~tibn s a 1 allowed `~o any taxpayer owning a housing accommodat~on (ot ~ t an .a single ~ family residence oc- cupi~d by the ownerthth~eo~f) if ~ ~ period f 30 days or more during the tax year such acc~iiu~ioda ~ ii is, certified by any governmental agency having jurisdi~tio~i t e ~ fire hazard, or in a continued dangerous condition, oi4 del~rim ~i ~ o life or health." The ARCH proposa' wénid ak it incumbent upon the owner not the IRS, to demonstrate that I~ii d predation deductions were allow- able. The owner coul~E do th~~ y submitting a declaration from the local building depart~nent th~ bs building was free of violations of the type that would ~reclud~ ` e ranting of `the deduction. Further~ ARCH pr~po~es tl~ t e local' agencies having jurjsdiction over buildm~ co~diti~ns be re~ i~ d to submit to.local IRS offices lists of buildings in viôIati~n df loc~ ~ es. ADA `strongly supj~orts tI~ 1' posal as a major means of regulat- ing the quality Qi~ d~ell'ing i~ it~ and as a `proper means of limiting the privileges grant~d tmd~r se tion 1~7 of the Internal Revenue Code. ~ I I would lthe, if I i4ay, to iijic U e a poinr~ which I confused earlier `as a part of the amendments $~ iç~ we Øopose to HJ~. 13064. And that is that the ren1~ subsidy pr gram should be modified to benefit those low income f~ni1ies w~ p y more `than 20 percent of their in- come for shelter rather `tharil t e resent 25' percent. The supplement would pay the differeno~ bet * ~ the rent an4 ~O percent of a famUy's income. , The workabh~ `pt~gram ` on d include. ` a requirement that cities establish a m~del ~ui1d1n o * e based on performance standards. Sueh a code should utilize r' se rch and development advances made in the building ixidu~tr~r. , ` ` . Finally, in cor~clt~sio~i, in S emonstration cities message President Johnson concluded by asse t n~ "If we begin now `the planning from 60-878-66--pt 1___L31 , PAGENO="0482" 476 I I DEMONSTRATION CITIES AN~ URBAN DEVELOPMEN which action will flow, the hopes of ~he 20th century will be orne the realities ~ the 21st." AIDA believes~that the goal of * a dec nt home and a suj~able living environment c4 and must he achieved well be- fore the 21st century. . This goal can be achieved within the next decade: 1. If funds are provided in sufficient amounts and with an increas- ing Federal commitment. 2. If renewal programs will in fact benefit relocatees by pr viding decent housing in suitable living envii~onments. 3. If the rebuilding of all cities, and~the ~st.ablishment of ne cities are. viewed as related parts of a nationa~1, d~velopment policy. 4. If HUD makes rapid and vigoro4s participation in meet ng the national boiiising goal a condition prece~ent to -the granting of ederal aid. ~ (The pam~phlet previously referred to1~oliows:) The case for an affirmative program under tftle VI of tb~ Civil Righ s Act of 1964 (The Potomac Institifle, Inc.) As this pub1i~ation went to press, President ohnson declared in his st te of the Union message on January 12, 1966, thatl he would ask the Congre s for Federal legisIat~ion to prohibit discrimination ~n the sale or rental of ho sing. It is most heartening that this long-overdu4 ~proposa1 has now been laced on the national agenda, although the specific d~tai1s of what the Presiden will propose-or what the Congress may dispose-are not yet known. However, a Federal fair housing law can reach only part of what this pu lica- tion advocates. For if the experience under State and local laws on ho sing nondiscrimination is any guide, reliance on the individual complaint proce ure has negligible impact on existing ghettos, which are~ at the heart of the Nat on's segregation problems. It thus becomes even more imperative that con~erned Federal agencies exe cise their authority and obligation under title VI of ~he Oivil Rights Act of 196 to eliminate existip~ community patterns of housi~ig segregation. Together, the Presidential pr~ôsa1 `and the congressional title ~I mandate can remedy the vii of housing segreg4~tion, whieb has ~Uso meant the ~~ontinuance of slum conditi ns, segregation of chi~Edren in public schools, and oth~r unfortunate consequence of ghetto existence. METROPOLITAN HOUSING DESEGREGATION NOTE THE END OF THE BEGIN~'TING "The voting rights bill will be the latest, and athong the most important, i a long series of victories. But this victory-as Winston Churchill said of anot er triumph for freedom-'is not the end. It Is not ~ven the beginning of the e d. But it is, perhaps, the end of the beginning.' "That beginning is freedom ; and the barriers ~o that freedom are tumbU g down. Freedom is the right to share, share fuitly `and equally, in Amerie n society-to vote, t hoid a job, to enter a public ~place, to go `to school. `It is the right -to be treated in every part of our nal~ional `life as a person equal in dignity and pronlise to all others. "But freedom is riot enough. You do not wipe ~way the scars of centuri s by saying : `Now yo~i are free to g~ where you waht, or do as you desire, a d choose the leadersyou please.' "You do not take a person who, for years, has been hobbled by chains an liberate him, bring him up to the starting line of a race and then say, `yo i are free to compete with all the others,' and still justly believe that you hay been completely fair. "Thu's it is not enough just to open the gates of opportunity. All on citizens must have the ability to walk through those g~Ltes. PAGENO="0483" DEMONSTRATION CITIFiS A~ RBAN DEVELOPMENT * 477 "This is the next and the more ?rofo ti ~ age of the battle for civil rights. We seek not just freedom bt~t o~por 1 ity We seek not just legal equity but human ability-not just equality a r~ ht and a theory, but equality as a fact and equality as a result. "For the task is to give 20 milUon e ro s the. same chance as every other American .to `learn `and grow, to work nd share in society, to develop their abilities-physical, mental, an~1 spiritu ~,. a~ * to pursue their individual happi- ness."-President LYNDON B. JOHNSON, a ii ward University, June 4, 1965. XNTBO ~~cT:~ N The historic Olvil Rights Act of 1 6 i~i ludes specific prohibitions on dis- crimination in voting, public ~cco'mmo~l ioi~t , public facilities, public education, employment and f~d~vi~ll~ as~isted p$g axn~. Housing discrimination as such is not mentioned in the 1964 act. Oa~e ul onaideration of title VI of the act, however, leads to the conclusion that it oe directly preclude racial discrimina- tion in the sale and rental of p~ivate ho ~ ng. Section 601 of title VI states t~iat : ` o erson in the United States shall, on the ground of race, color, or national 0 igi ,, be excluded from participation in, be denied the benefits of, or ~e ~ubje t d I discrimination under any program or activity receiving Federal financial ~ ist nce." This language does not $nfe~ dis r tl4~ ary power on Federal agencies ; it imposes a compulsory oblig4tioi~. I is ~ estimony on this section before the Senate Judich~ry Commltt~e, ~orme At orney General Robert F. Kennedy emphasized : "Simple justlcE~ reç~uires t at public funds, to which all taxpayers of all races coi~tribUte, not b~ spent i a ~v ashion which encourages, entrenches,' subsidizes, or results in racia~ di~crim n tb ~` * *." 1 The legal concept of `~dls~riminati n ` is not static, but one which is evolving continuously as a result o~ politica an * judicial development. In 1896, the Supreme Court held that "~eparate t è ual" treatment of the races fulfilled the constitutional requ1ren~ents of e I th amendment~ In 1954, the Court Overruled that doctrthe, dec~ari~g th t tb~ separation of the races by government is inherently discriiniuatoi~y. In 1~ 6 , y enactment of title VI of the Civil Rights Act, the Congress aldded to ~i p ohibition on racial discrimination the further stipulation that nq person ~` e e cluded from participation in" or "be denied the benefits of" any 1~ederally ~is i~t d program. To achieve the objective of title /V , t erefore, requires more than a passive Federal position with respect~ to ~Ei cr1 itiation. Racial discrimination is so deeply embedded In our p~ese~nt-da~* o ety that the mere "nondiscriminatory" expenditure of public fun~Is iiiay f~ir `bØ entrench and subsidize segregation in public life. For the purposes of t~t e I, it Is immaterial whether segregated housing patterns result from curre~ ~ cticos of racial discrimination not pro- hibited by law, or reflect past dis~ri I ations embodied in today's ghettos. In either case, the congressio~ial ~nand~t c n be fulfilled only by Government taking' positive steps to eliminate and pre'i~e t ~ mmunity patterns of racial segregation, for the perpetuation of disci~imin to~ y a failure to remedy it may itself be considered an act of dis~riminati . very federally aided program affecting housing should be measured ttgains~t t14 affirmative requirement for compliance with title VI. This publication demo4s'trates t t t e title VI affirmative requirement applies directly to federally 11n~uiced Ur a ~ newal, highway and other construction and land acquisition pro~raxus. h se ederal programs annually displace from their homes thousands o~ familIes~ ap of whom are forced to relocate in racial ghettos where commi~init~es tølera e 0 sing discrimination and establish patterns ol segregated housing. ~YIorëover pa t from relocation into segregated housing it will be shown that the title VI `e uir meat applies to the entire private housing sector, which is directly benefite y a d materially dependent upon the totality of Federal assistance programs i he rea of community facilities and services. Yet Federal prog~am~ affectin ou ing presently are being administered with- out adequate safegurn~4s t~ ins ~` t at public funds are not being spent in a fashion which encoura~es, ?ntre c e~, subsidizes or results in racial discrimina- I 88th Cong~, lst'sess., oi~ S. I~31 a d S. 7~5O,p. 833. I PAGENO="0484" . 478 DEMONSTRATION CITIES ANTi URBAN DEVELOPMENT tion. To meet the title VI requirement, majer affirma~tive changes in pelicy and administration of Federal programs affecting housing are recommended.2 Lastly, it is suggested that if Federal agencies and metropolitan communities do not move affirmatively to comply with title VI as it affects racial discrimina- tion in housing, court suits may be filed ag4inst both the localities and the Fed- eral agench~s te enforce compliance. It is 4& be hoped, however, that litigation will be mad~ unnecessary by the voluntary a4tions of Federal agencies and metro- politan eomn~unities to end racial diecrimina1~ion in housing. I. HOUSING DISPLACIiMENT IMPACP OF MAJOR FEDEBAL CONSTRUCTION PROGRAMS Many thousands of families are displaced from their homes every year by projects under the workable program for cqmmunity m3 and other governmental activities. The major Federal assistance programs that force these families to seek other housing are: ( 1 ) Direct construdtion by government : e.g~, highways, schools, public housing, pUblic buildings, and such neighborhood facilities as community or youth centers, health statioms and similar public institution$ (2) Slum clearance, urban redevelopment 4nd renewal. (3) Acquisition of sites to be used in futur4~ construction of public works and facillties (4) Acquiring and developing land for refreational, conservation and other public uses, including the purchase and c1ear~tnce of lafld in built-up areas for such open-space needs as parks, squares, pedestr~ian malls, etc. It is estimated that about one and n half million Negro' Americans will he displaced from their homes because of these federally financed constructi n and acquisition activities in the first 8 years follo*ing enactment of the 19 Civil Rights Act.4 Commenting on housing relocation, the Housing and Home F nance Agency (HHFA) stated: "Experience shows that some families displaced from slums a nd hi glited propertie' have considerable difficulty in finding other accommodations th t are decent, safe, and sanitary and within their m~ns due to the limited sup ly of such housing available to them. For personall or similar reason's, other seek housing no hetiter than that found in the slump and blighted area from hich they have been displaced ~ ~ ~ ~ The HHFA cautioned community officials "to 1$e fully aware of the linpor once of taking the necessary steps to provide the mealts for displacel persons to o tam decent housing which they can afford," and then offered the following guidance about the important elements in determining reloefltion needs: "At the time of submission of an initial applicfltion for approval of the ork- able program for community improvement. the community will be require as a minimum to have made a reliable estimate of the number of families to he dis- placed during the ensuing 2-year period, broken down into four categoric of governmental action (i.e., urban renewal, high~lay construction, code enf ree- ~ 2 In applying the title VI requirement to housing. we~do not overlook what is know as the housing exemption that Congress wrote Into see. 502. That exemption roin vos Federal financial asSistance by way of "a contract oftinsurance or guaranty" from the section authorizing tF'ederal agency enforcement of title VI rights. By this exemp ion, ~~ongress left unaffealed the existing nondiscrimination ~nachInery of the Federal Hon log Administration and Veterans' Administration home loan ~uarantee and Insurance progr ma under President ~e5nedy's Executive Order 11063. I~i this dicussion it Is not th~ ex- ciupted Federal housing insurance and guarantee prograitis. hut rather the variety of 1i act Federal construction, assistance, and loan activities affecting housing with which we re concerned. a The workable program for community improvement Is the program developed b. a local community for the prevention and elimination of slum and blight conditions. To qualify for Federal financial and technical assistance in urban redevelopment, each c m- niunity must have an approved workable program that meets the standards of the Dep rt- inent of Housing and Urban Development. 4 Statistical projections prepared for the Congress (see table I-App. C) show that n estimated 111,050 fa~iilies and Individuals will be disp~aeed annually from their ho es during these years by acquisition of real property for federally assisted programs ( cc 88th Conr.. 2d sess., Committee Print No. 31, House Coi*mittee on Public Works, pp. 5. 258) . Multiplication of the "family" Ingredient in this ~timate (64 percent) by avera e family size (3.71) reireals that in the 8 years between ~l964 and 1972 about 2,400.0 0 persons will be displaced. Experience shows that of th~ persons displaced under the programs approxima1x~ly three-fifths are nonwhite (see ~TJrb~p Renewal Admin1strati~ n statistics, table 3, p. 25. Report of Advisory Commission pn Intergovernmental Relation ~1anuary 1065, "Relocation : Unequal Treatment of People and Businesses Displaced y Governments") . It thus appears that about one and a h~lf million Negro citizens will e displaced from their homes under Federal and federally assisted programs during t e first 8 years after the effective date of the 1964 Civil Rights Act. ~ Workable Program for Community Improvement, Program Guide No. 0, "Answers o Rousing for Displaced Families," p. 1, August 1962, HHFA. PAGENO="0485" DEMONSTRATION diTt~S A EBAN DEVELOPMENT 479 . ment, and other), a,i~d white a~d noi'twh `t f~ Uies. (The i~o~vwhtte breakdown~ may be eliminated for any oorin4niiø~ity i 1~ h it is a sub~tantiated~ lact that all housing re8o~roe8, p~bt'~o a4uZ ~riv~te, a e j~u ly available to all families without regard to race.) * * *" [E~nph~sis adde . Morality aside, tlii~ pOstureIwa~ cert I ~ legal when the program guide was published in August 1962~ H~we~er, b h~ following rear, it bad begun to be recognized that at least the .urtan rerie 1 ~ ogram should require a prolilbltiou on racial discrimination, ~ A Fede~ál co t I~ d so 1~eld,° and the Urban Renewal Administration (URA) had lssue~1 a p b i~ tat?ment on June 25, 1963, banning the listing of s~gregatel hou~lng acco ~ ations by local relocation agencies. This statement recognizeU th~t t1~ie U " as a responsibility for seeing" that families displaced by urbün i~ene~val " e ~t sisted in finding housing accommo~ ~ datlons that are free from ~ ~aci~l or ~ e~ such restrictlons.'~ Unfortunately, the proposed plan annonnce~ in 1963 ~t ~ i~ ver put Into effect by the HHFA. ~ The fact remains that what wa~ ,a fo ~c ~ -looking proposal in 1963 has become . a mandatory requir~ix~ent ui~derltitle V ~ the Civil Rights Act in 1964. The ~ great displacement Impact ~f Weder i co strilction and acquisition programs chiefly affects the metropolit~tn `~othm n tie of the Nation, where housing segre~ gation remains a fact of life. A great number of inetrop~litan ar ~ b~ efiting from Federal financial assist- ance presently have no legal pro~iibit1 s ~ 4inst ~racial discrimination in private . housing. Almost half o~ th~ 30 larg s ci ~s in the United States are without such laws covering either tI~e c&itra ity Ar affecting their suburban environs. Three of these citiO~ (Chicago, St. 0 iS, ~*~nd Washington, P.O. ) have housing ordinances whith cannot re~ch the djacø t suburbs. In 10 others, neither the central city nor its suburbs/ are covei~ed 1~ prohibitions against racial discrimi- nation in housing : Atlanta,/ Ba~timo e 4~ has, Houston, Kansas City, Memphis, Milwaukee, New Orleans, Phoenix, a ¶1 Stt Antonio. In those cities which todaly d~ not r 1~ it housing discrimination, persons dis- placed by Federal prograi4s sttch a~ ~b n renewal and highway construction are necessarily subjected t~ ra~ial ~ ci~ ~ination until cothmunity patterns are broken by leg~1~ probibitio~rs on se ~ ga lop. For it is ajmittedly beyond the capacity of Federal agenci~s t~ ins i~ ~ t, as a result of Federal actions, thou- sands of displac~d famii4e~ wUl fin ~ 4~ nate housing within the narrow range of choice presently protide~ by segr ~ t~l housing practices. Under the Federal high*ay prog a ~, bore Is no regulation requiring manda- tory relocation assistance ~o the pe p e 4i splaced by eminent domain. Urban re- newal regulations do reqni~'e reloca ~ ~d, but up to this very moment local pub- lic agencies are meetifig this Fede 1 ~ quirement with segregated housing in many communities. Phus~ despite h th ndatory title VI guarantee that no one shall "be subjected to di~crimiiitat'Ø ~ der any program or activity receiving Federal financial assistance," und r r~ ently prevailing conditions most of the one and a half million N~gro citiz n~ e timated to be displaced by federally fI~ nanced construction and ~cq~istti ~ a~ vities in the 8 years following the 1964 Civil Rights Act will be f4rce~1 to r I c~ In racial ghettos. There, they will pay a higher proportion of tb~lr ~ncom s~ fo accommodations that are smaller, more overcrowded, and of poor~r qualit a those of the rest of the population.7 There can be no questl~n that s c p ograms as Federal highway construction and urban renewal are Si~tbjeet to ~ ~i ~ rmative requirement of title VI. These are two of the largest Federal a si t~ ce programs, with Federal money going directly to pay for the a~qui~itio o ~ e land from Which citizens are displaced. Thus, title VI requires ~n ithmed ~ e hange in polfcy and administrative prac- tices of the concerned F~der~l ag ~ 1~ to guarahtee each displaced family a free choice of housing reloc!a~ion unh ~n ~ d by artificial restrictions of race, color, or natural origin. I * ~ II. FEI~ERA~ A55 S ~ C1i~ TO PRIVATE HOUSING Private housing benef~th mater ~t ly nd tangibly from a variety of significant forms of Federal financial àss4s d c~ Before a house is ever constructed, the builder knows that amc~ng ~he a s hi e necessities for the marketability of his houses are adequate w~ter and s w s, electricity and access. Beyond these direct necessities ~s a l~trger are of ital supporting community services : hos- pitals, libraries, public sch~ols, e rea ional services, parks, neighborhood fadili- ties, and similar amenities. W il n t absolutely necessary for the habitability - 6 ~5rnith V. Holiday 1nn8 ~f A~eric ~ ~ 220 13'. Supp. 1 (D.C. Tenn. 1963). 7 "The Heart of the Ma ter ~ Mor oil ing for Negroes," Chester Rapkln, the Mortgage Banker, February 1964. ~ ~ PAGENO="0486" 480 DEMONSTRATION CITIES AN1~ URBAN DEVELOPMEN of a dwelling as such, these community 4cilities and services direc ly benefit home owne~s and residents. The depehdency of housing upon the fae~1ities and services of the c mmunity in which it is located is a ` well-recognized pi~incip1e of the workabi program for eommu*ity improvement. In preparth~ a comprehensive community plan . under the workable program, factual infdrmation about community facilities and services, "such as schools, libraries, p~rks, hospitals, municipal ~ui1dings, water systeIn~, storm drainage, sewerage, refuse disposal facilities, othe* utilities etc., by locations, areas of service, and adec~ttacy" * * * "should be dev~e1oped so as to clearly reveal existing defieienciei~ in a community's phy~ica1 re- sources ~ ~ s." S In considering environmer~ta1 conditions affecting hou~ing code compliance. the HHFA states : ~ ~ "The upgrading ef housing alone will be~1argely ineffective unless' ~he other blighting influences in the area are e1imin~ted or corrected. This ni~ans the provision of adequate public facilities and se4vices such as water, sewer~j streets, lighting, schools, recreational, and cuItura~ outlets. It lxiay even n~ean the planting of trees, shrubs', and grass. It efrtainly means the elimin~ition or control of d~trimental nonresidential land *~es such as commercial e~tablish- ments that are unsightly, noxious, or noisy. Heavy traffic along neig borhood streets is another major blighting ~ The Federal Government is deeply involved through various programs of Fed- eral grants and loans in direct assistance to these community facili es and services. The provision of water and sewer facilities, electricity, publi * roads, education, health and recreation services, pat'ks, and neighborhood fad ities is inextricably bound up with massive Federa1~ programs of assistance a nually aggregating many billions of dollars. ~ . Thus, in flsèal year 1965 alone, the Cong4ess appropriated $365 mu ion to maintain rura' electrification, which directly~ provides electric power or the homeowner in ` areas where commercial utilitjy services are not availa le. In the same year,~ the Congress set aside fer State and local highway ~const uction more than $3i5 billion. Another $90 milliont in Federal assistance w s ear- marked for sewer and water facility constructio~i. An illuminating study of the cumulative int~rplay of such Federal pro rams, prepared by the HHFA, was published in 1$~I3 by a committee of th U.S. Senate.1° TI~at study tabulated the Federal p*ograms of assistance in a repre- sentative metropolitan area, Atlanta, Ga., during tOfu and 19432. Ta le II (see app. D) , taken from the HHFA tabulation, shows that over $100 illion is disbursed annually in this one metropolltan~ area alone in Federal pro rams of community assistance, most of which are for~the direst benefit of homeo ners and builders. t A. ~ewer~ and water.-F'ederal programs ofj assistance to community ewer and water facilities construction directly be*efit homeowners and bui ders. Under the Fedeital Water Pollution Control Act~ Congress had appropriate $90 million annually' in recent years for grants to Statee and localities to accel rate local programs of waste-treatment works ron~ruction, including interce ting and outfall sewers, to encourage communities to clean up the waters 0 the country. This represented about one-fifth Of the total construction expendi ures by the States and localities for local sewer and wá~er facilities~ As a representative metropolitan area example, between 1957 and 194~, the Public Health Service of the Department of Health, Education, and We fare allocated over $3 million for waste-treatment wojks construction in Atlanta. The Housing and Urban Development Act of i~65 established a new pro ram of grants for basic sewer and water facilities. ai~iounting to $800 million ov r a 4-year period. The 1965 amendments. to the Co~solidated Farmers Home Act similarly established a program of grants for se~4er and water facilities in om- munities under 5,500 population. The Public Wo~ks and Economic Develop ent Act of 19fi5 also opened up a large new source of IFederal support for sewer nd water facilities. These new prOgrams represent s~gnificant expansion of Fed ral support for sewer and water facilities directly benefiting the homebuilders nd homeowners of the Nation. ~ 8 WorkaNe Prorram for Community Tnrnrovem~i~t Pm~r~im Guide No. 2, "Answers on Comnrehensive Community Plan." pp. 2-3. March 1965, HaFA. ~ 9 Workable Program for Commnnitv Tmproveinent, Program Guide No. 1, "Answers on Cnc1e~ arni Ordirunces," p. P. tanuarv 1962. HHFA. 10 Hearings before the Subcommittee on Intergovern~nenta1 Relations. Commiltee on Government Operations, "Role of the Federal Governm nt In Metropolitan Areas," 8 th Cong., 2d sess., .9. 82. PAGENO="0487" I 481 DEMONSTRATION OXTI~S A REAN DEVELOPMENT B. Publio rowis.-Equally necessary ~o t e con~tructioii and use of private housing are adequate access routes. ~ a4 construction today is backed by massive Federal assi~tanco th~ou*h th ri ary, secondary, urban, and inter- state highway constructiofl programs. `~U es programs, for which Congress ex- ponds billions of dollars annu~lly, are ~ rti ularly significant in the urban and suburban areas of the Natioij wrhere h p ttern of housing ~ development and redevelopment is geared to ai~d d~pen e t pon he~ road construction. Table III (see app. E) indicates th~ e~tent o th s aid to each of the 50 States and the District of Columbialu the fira~ 10 ~ th of 19~5. The signilicance of Federa~ pavticip t on in the construction of urban access routes and highways may be app~,ecia ~ fr m another 1llu~tration in the repre- sentative Atlanta metropolita~ a~ea. o~i July 19~l1 through June 30, 19~35, the total construction cost of th~ federal y as isted highways In this metropolitan FEDERAL ASSISTANCE HIG~-IWA S, ~ LANTA METROPOLITAN AREA I, p4 LEGEND INTERSTATE FEDERAL PRIMARY - FEDERAL SECONDARY PAGENO="0488" 482 D~EMONSTRATION CITIES ~ ANU UEBAN DEV1~1LOPMEN area was a~proximate1y $~ million, $80 m~flll4n of which waa previd d by Fed- eral funds. ~ The composite map repi~oduce4 here, drawn from -Bureau of Public Roads sout~es, shows highways in the repre~entative metropolitan area receiving Federal pa~ments for construetien. The b~iefest examination of that federally assisted netWork' will show h4~w far the husing construction progra s of our metropolitail areas are dependent upon urb4n and suburban roadbuildi g. C. ElectriQ power.-No less `a necessity for home use than sewers, w ter, and roads is electric power. For many years th~a Federal Government, thr ugh the Tennessee Valley Authority. and the Rural Eledtriflcation Administra ion, has supported the furnishing of electric power facilities for homeowners n areas where commercial development fails to pro~ide ~ adequate service. Th ~ s, hun- dreds of millions. of dollarsare .~nnually ap~ror~riated by ~ Congress ` for ~ oaiis to REA cooperatives * by the Rural E1ectriflcat~on Administration of the Depart- ment of Agrioulture. These cooperatives pr4vlde power facilities to more than 20 million peo~ile inthe United States. In the five dounties included in the represe4itative Atlanta metropolit n area, electric cooper~tives.have, since January 1, 198~t,.invested over $7 million I facili- ties and have Feceived over $6 million of Fede~al loan assistance for the f rnish- ing of electric power to the people. of those eoun*ies. D. ~t~pporting community services.-The Federal Government is incre singly and massively involved in supporting community facilities construction i such areas as education, health, and receration. 1~Lany millions of dollars an ually are provided by the Congress for such facilitieS, and the Federal assistan e will continue to increase in view of new legislation congress recently approved. The Housing and Urban Development Act o1~ 1965 authorized $25 mill! a an- nually for 4 years to public bodies to help fina~ice the acquisition of sites to be used in future construction of public works and ~aci1ities. An annual auth riza- tion of $50 million for 4 years was made to pub4c bodies tO help finance pr jects for neighborhoo~L facilities such as community c4r youth centers, health sta ions, or similar pubUc~ buildings. Matching grants w~re authorized to assist loca ities in programs of beautification and improvement ~of open-space "and other p blic lands, including Such things as street landscaping~ park improvements, tree p ant- ing, and upgrading of malls and squares. GrantS to States and local agenci s to cover up to half the cost of acquiring and de~reloping land for recreati na! conservation, and other public uses were increased from $75 million to 310 million. The act also authorized the purchase ai~d clearance of land in buil -up areas for such open-space needs as parks, square~, playgrounds, and pedest ian malls. These programs are less directly involved tn~ assisting the homebuilder or owner than are programs pfoviding electric po%~er, public roads, and se er and water fadlities. Nevertheless it le undeni4ble that the honiebuilder or owner in many ea~es is receiving' benefits "under a~ny program or activity rec iv- ing Federal finan~ial assistance" as a result o~ federally aided commun ty development. ` E. Direct Federal as.rWtaace to private ho~asing.4-Thn Housing and Urban e- velopment Act of 1965 initiated a major new pro~ram of Federal rent supp e- ments to provide `a large volume of private bgusing within the means f low-income families. It is expected to generate soi~ne 875,04~ units of nonprot~t, cooperative, or limited dividend housing over the n~xt 4 years by attracting pi\i- vate capital into the housing market for low-income çamilies. The act authoriz~d $30 million for rent supplement payments in fisc~l year 1966, and addition4l amounts of $35 million In fiscal 1967, $40 million hi ~(968, and $45 million in 196~. The act also authorized grants to ~nab1e low-in~ome homeowners in urba~ renewal areas, whose homes are required to be rel4abilitated, to improve thei~ homes and remain 14 them rather than be relocated ~lsewhere. Also authorized was a new program ~f low-rent housin~in units leas~d in privately owned exist~. ing structures `to sl1~lement the housth~ assisted ui~der other provisions of th public housing law. ` When private houaing is directly assisted by Fede~ai grants, there can be no question that it is snhjeet to the affirmative requiren~ent of title VI of the 1964 Civil Rights Act. Similarly, when private housing ~eneflts from federally as- sisted programs of community development, either directly through the pro- vision of such necessities as water and sewers, elect~,lcity and public roads, or less directly through aupporting community facilities j~nd services, such housing similarly should be available on a nondiscriminatory b~.sis. The principal point here is the pervasiveness of d~pect and indirect Federal assistance to private housing, which is so materially d pendent upon the totality PAGENO="0489" I DEMONSTRATION CITIES ~N REAN DEVELOPMENT 483 of federally aided ernnmun~ty facil~t'es and services. The fact that Federal support Is fnnneled t~roi~gh S~a ~ flU local goveruments now legally requires these jurisdictions tol provide ~h ~ neerned Feder~al agencies with ai~- firmative assurances required by title V a "ne person in the United States shall * * * be exelndedfroni ~ * ~ * de ~ d t e benefits o~f * ~ * * or be subjected to discrimination under * * *`~ ai~ of t e~ Federal pf~ograms of assistance to private housing. ~ I ~ lit M1~VRO1~OL~~N ~ $~ 0 DESEGREGATION It should be evident tl~at ~mil~es di ~ d by Federal programs of coustruc- tion and land aequis~tion are ~ee~ssa~i ~r sti jected to discrinlinatlon unless they are guaranteed a free ehoc~e~ o~ hou g eiocatJo~i unhampered by artificial r~strtctions of race, color, or *att~ual ~ ~1 ~ It should be equally clear that the title VI affirmative requirerne~t applie~ t tb entire private housing sector, which is so materially dnpeudent upou the p~ as~ eness of direct and indirect Federal assistanice. It follows, there~ore, tha~ tl~ VI amr~u~t~ely recpiires each corn- rnuRlty participatingin P~de~al ~rog~ ~ ifecting bou~ing to prohibit housing dlscrlm~natiou by law as a 4reeoudl ~ o f~ Federal fiuai~ctal assistance. The prohibition of houig~dis~rim ~ I by law as a preooi~dltion for Federal finai~cial assistance alsc~ app~1es Ito S ~ bat participate in federally assi~ted highway construction. iig1~wa~ con ~ on transcends community boundaries, as does the displacement an~ reibcati re lung from such land acquisition and constru*citioii. Federal grants ~or h ~ w~t constiliotlon are made directly to State governments, which ~4ml*l~ter t 0 ~ograrns within their borders. Thus, States benefiting fr~in this 1~'edØral p o $ are similarly subject to the title VI guarantee of moaid1sc~rttmiua~o~i jn ho $ g~ ~ The requirement of an ea~autin~nt ~ l~ as a condition of Federal aid is an established principle of F~dei~al-St t latious. The workable program for community 1mprove~uei1t r~q~iires ~ re latlon the adoption of zoning o~di- nanees and meclern btj1ld~ii~, p~Rrnb , e ~c1rieal, and hon~ing codes ~or certifi- cation, as well as effecttve/eifçrce t ~ codes, a plann~d sisternatlC housing code compliaixce program a~d a~cura ~ ~ rtlug on cOmpliance activity, including "a showing that there is a $as~nabl ~e of appropriate local resources In terms of inspectors and funds nee~l~dto en o c~I ompliance with the co11 A similar regulatory re~uirern~cnt ~ e~ae ~ t nd enforcement of a housing nondis- criminatioai law wouldseen~ equally able. ~ Laws against housing disc~1mi a bill will not, of themselves, achieve the affirtnative purpose of t1tle~ VI~ 1~La ~t t~s and communities having such laws still expend public fuuds~ ~f *hlch 1J' de al payments often a~e the major share, in a fashion which ~ontjnue~ to e co~ rage, entreneb, and subsidize housing segregation~ However, äñd a~tid1 c im nation law is the fi~ndamental base for projection of afflrmatWé ~tion to 1 Xx~i ate and prevent community patterns of racial segregatlonin h~$~!~ig. ~ To achle~e this ob~ctifre, ~ons1 ~ e i~ the complexities of present-day urban development and the rnul1~1~iliçIty ,~ * é era! programs affecting housing, careful comprehensive planning 1~ ~e~jti1r$, a~ * as so sue~4nctly stated by housing Ad- ministrator Robert O~ W$ver ($ ~ retary of Housing and Urban Develop- ment): ~ I / "Without a compreh~sftr~ con~ u~ y plá~ito point the way to successful urban growth ai~d rene*al, a l~ 11 is in much the ~ same ~ position as the fabled gentleman who i$ifn~ed h~ ~ e and rode off 1~ all directions. Unless it knows what it Is striv~ng to ac~i V~ the commun1t~ will find Itself strangled with haphazard growth I~êvery ~r ~1 n. In this uncharted maze, the solution to one problem fre4uentl~ compou d k other prOblem. ~ ~ "A properly drawn, ~ eoznprehe ~ Gmmftnlty, ~ilan recognizes not only the problems of the lo~lit~, bi~t ho the e problemsL~~~and their , solution-are re- lated to those of thø entffre a~ea O eg~ ii, since the complexities of urban growth and blight do not respectIjur~sdict o al oundarles~" ~ Several suggestions f~r n~etró ~ I t~ pla~nhing for housing desegregation grow out * of this observation~ First, ~j ~ ~ omprelienalve plan ~ for federally assisted urban development ~ a~c~ re~iewa Ii ld now include the positive steps to be taken to eliminate and i~rév~nt c * m~i ity patterns of racial segregatIon in hous- ing~ Second, such cemp~êjiensj e Jfl ns should be rec~ulred of every federally assisted program Involv~ng~ious1 ~ . ~ ~ ~ ~ ~ 11 Op. cit., program gpid~ ~o. 1, p. 1~ Op. cit., program gu1d~ No. 2, tnt o tLC Ofl. PAGENO="0490" 484 I~EMONSTI~ATJON CITIES AN ~ URBAN: DEVELOPMEN Third, si~aee housing is affected by the i~erp1ay of a number of di erent fed- erally assisted programs, the various Feder~t1 agencies involved should ct jointly to issrue a comprehensive regulation requiring the State or the aff~cted corn- inunity to furnish an overall plan as to how the combination o~f progr~nis under consideration for Federal funding will c~ntribute toward eliminatin°~ and pre- venting community patterns of racial segr~gation in housing. As pre ently ad- mins~ered, each such federally assisted pro4rarn is independent ~ and th require~ ments for compliance are different-sorndpimes even conflicting. I sofar as these progrqm affect housing, It would see4i reasouable and logical fo ~ all con- cernecl Fede~ra.1 agencies to strive toward a~rnutua1 objective, and to c ` ordinate enforcement~ of such a comprehensive regu1~it1on. Last, neither housing discrimiDation no~the many other problems f urban developrnent~can be solved effectively within~ the confines of community jurisdic- tional boundaries. As described by the HH~A : "No community is an island unto itself. Its econorn~ is tied in with he econ- omy of the area of which it is a part. Thi~s applies to conununities i metro- politan areas as well as to those in agricultural or rural areas. Pransp rtation, water resources, waste disposal, air pollutioil,: police and fire protection, nd even slums and blight have no respect for jui'isdI~tlonal boundaries. It is asteful to consider them on a piecemeal basis. It ls~ therefore, an appropriate xercise of local responsibility under its workable pr4grarn for each community to par- ticipate in planning and in solving common p~eblems with its neighbori g juris- dictions where poaathle, and to foster the form~ttion of planning agencies t at can operate on ai~ areawide or regional basis * ~ *~ Also, some cemmuni ies are authorized by~ State law ~ to extend their pl4nning juri~diction into th ~ unin- corporated areas beyond their limits and to e~xereise certain controls ov r such areas. ~ . ~ "Not only are metropolitan areas and reglGnal planning agencies elig ble for grants under the urban planning assistance program, but the HIIFA Admini trator is directed under this program. to `encourage eGoperation in preparing and carry- ing out plans among all interested municipalities, political subdivisions, public agencies, and other parties in order to achieve t~oordinated development of entire areas.' " 13 * ~ ~ Existing cem~munity patterns of housing seg4egation will yield most rea ily to regional planui~g ef~this broad pempective. insofar us federally assiste pro- grams affecting housing transcend ~ jurisdictioi4l boundaries, title VI sho ld be construed to a~fltmatlvely require that the eli4hatkrn of housing segregat on be made part of su~h comprehensive regional p1ann~ng. Gitizen pa~ti~fr~on . ,~ ~ "A successful long-term workable program ~lepends in large measure upon active participation by local citizens. Every citizen benefits in some degree from the program and every citizen has something ~o contribute to it. The c tizen participation requirement of the warkahle progy~m proz~ides a means wh reby citizens can come to understand the program b~nefits and can make a po~itive contribution so that a program can be planned ai4T carried out to meet their 4eeds and command theirsupport * * *~ ~ ~ ~ "Experience has demonstrated that effective e~tlzen partieipa:tion over th~ ex- tended period ueie~sary~to earryo~t a succesnfi4 wc~able program is base~l on an active ç4tiz~n~ath7is~y eomndttee that is c~i4muuitywide and represen~tive in scope, oft~eiali* 4~signated by the mayor an~Xor ~ounciT, in accordance ~vith local custom. ~ The designation of such a commfltee'is a workable progran~ re- quirement. Also hecause of the almost universa~ ~lifllenlty in communities 4arer the country in making adequate housing available to minority groups, it is pen- erally expected th*~t there wilibe established a sub~om'rnlttee or special committee on minority group~bousing. Both the overall advisory committee and the mino ity group subcommittee or special cemmittee should li~ve minority group repre~ei ta- tion" 14 ~ Recognizing as ~ does "the almost universal dif*cnlty in communities over he country in making adequate housing available to ~minority groups," the sue es- tion of a citize~1s ;advisory committee would See~particularly appropriate to help develop obj~e1jives and goals in community pl~niiü~g for housing desegre a- tion. Therefore; a~nv comprenhesive plan for fed'~rally~ assisted urban level p- ment and renewal should urovide for a citizens ~4clvisory committee, with a e- quate minorIty representation. Similarly, where several Federal agencies n- 13 Thj~j un 4-5. l4Woi*ab~ program for community lmnr'wement, program guide No. I "Answers n Citizen Participation," p. 1, November 1964, HHFA. PAGENO="0491" I DEMONSTRATION I I j 3AN DEVELOPMENT 485 volved in prc incucle provi~ centrate on hoi~ below (3) proverne need." 15 Gunnar Myrda lence of residi -~ T ation, it should ee should con- ty patterns of ..~e as described [es and the means quisition or construction ~fit private housing s, one qualification the enactment by ~acia1 disc,rimina~ ministrative inn- federally assisted pro- ns and public agencies onal planning for the elimination of ~onsible authority to ~e regulation, and; ~ comprehensive regulation ill affected programs are in Dment; Development Adminis~ S. Office of Education of the De~ gr~ r~ a~ contribute gation in h (9\ coo Scientific American, vol. 213, No. 2; PAGENO="0492" 486 DEMONSTRATION CITIES AND URBAN DEVELOPMEN partment of health, Education, and We1~are ; and (d) The Rural Electrification Adm~nistration and the Farm rs Home Admini$tration of the Department of Ag~leulttLte. D. Uitize~ purticipation.- (1) Any tumprehenaive plan for federal'y assistad urban develop ent and renewal, and any e~mprehensiv~ regulation *dopted jointly by Federal agencies, shall provid4~ fo~r a citizens advisory commitl~ee, with appropriate minor~ty repre- sentation ; apd ~ (2) The pl4mary function of the citizens advisor~v committee shall b~i to help achieve the objective of eliminating and tre~renting community patterns of housing segr~gation. (3) The administering Federal agency hehi a public hearing prior to the ap- proval on any eom.prehens~ve plan ; and (4) All such approved plans shall be availa~ble for public inspection on request to the adminI~tering Federal agat~cy. ~ ~ E. Fffcotiv~ date. The Olvil Rights Act w~ signed into law ~n ~uly , 1964, and th~e~ore~the title VI requirement applie4 te eli federally aasisted p ograms after that datie. As many of the above ele~ients as feasible shall be pplied to the partie~4ar stage of develepnient of ea4h existIng federally financ d pro- gram affectinghousing, and all shall ~e applied ~te all new programs. Phis i~ net hitended to be an all-inclusive 1i~t o~f remedies. Bold and i agina- tive admInistrators, determined to achieve the Great Society envisio ed by President Johnson and endorsed by the C~n*ess, undoubtedly will fin many other affirmative ways to impleniant the title VI requirement that pr grams they oversee will not encourage, entrench, s~bsidize, or result in raci 1 dis- crimination in hou~dng. ~ - V. LEGAL ENFoRcm(Errr o~ TITLE VT 04,IGATIONS n~~r HOUSING The process of change cannot and will no4 ie painless. Some State and communities m~y c~nceivab1y chooSe to forego u~ban renewal, highway aid, ater and sewer coustruction grants, and similar Fe$eral assistance programs ather than comply a~rmative1y with title VI by ad~pting ~ a general requirem. nt of housing desegregation and moving toward th4 elimination and preventi n of community patterns of racially segregated housing. But the congres ional requirement is express and mandatory. Under t~a:t requirement, such agenc es as the Urban Renewal Administration and the Bu~eau of Public Roads shoulc~ now take affirmative action in States and communities receiving their assis1~ance which continue to tolerate housing segregation. ~ In resorting to available remedies to enforce tIif~ affirmative requirement of\title VI in the area of~housing, the preferred method i~, of course, that provided b~ the statute itself. In section ~O2 of the act, Oongi~e~ has spelled out procedur~s by which Federal agencies should move to assure 4quar rights and benefits in\ the programs to which they provide asSlStanee~ ~ Of course, States and communith~s need not 4nd should not await the 4om- pulsion of Federal agency action. ~ Major me*opolitan communities in \ the United States where housing segregation presentiy is not prohibited in both\the city and its adjacent suburbs include Atlanta~~ Baltimore, Chicago, Da~1as, Houston, Kansas City, Memphis, Milwaukee, Ne1~r Orleans, Phoenix, St. Lo~iis, San Antonio, and Washington, D.C. About 3 th*llion Negro citizens llvin~ in these metropolitan areas presently are denied the~rlght to desegregated hou~ing in their communities. For these citisens the contitulance of housing segregat~on also means continuance of slum conditions, segregation of their children in ~he public schools, and other unfortunate eonsequeneE~nf ghetto existence. But if voluntary community action isnot forth~om1ug, and Federal agencies do not fulfill thehi obligations under title VI in t~ie area of housing, there $- mains the possibilIty of litigation brought by N$ro dtizens to enforce th~4r rights under sectton 601 of the act. That section e4eates direct rights for min~r- ity citizens in its ~uarantee that "no person In ti4e United States shall on t~ie ground of race ~ ~ ~ be excluded from participation in, be denied the bene~ts of, or be subjected to discrimination under ~ * ~ ~" any federally assis$d program.'7 * `7 One Federal court has already held that title VI gh~es ~ Negro citizens rights aga1n~t discrimination in a federally assisted program. In Len~o~ V. Bo8sier Parish &hool Boa~d (240 F. Supp. 709), the U.S. district court in Louisiana ruled that Negro children atten - lag schools supported by Federal funds "are recipients of 1the rights conferred by see. 60 and as such are ent1tle~l to bripg this suit to require dese egation of the federally assiste schools." gl\ PAGENO="0493" DEMONSTRATION c~ITI~S RBAN DEVELOPMENT 487 Wbile title VI does not expfressiy es~ 11~ judicial power to secure section 601 rIghts on behalf of injureçt citizensi~ ~l ht of judic~a1 relief is implicit in the congressional enactment 4~t 4ie st~1~ t~tn lye right itself, under the estab- lished doctrine that courts w~ll r~resrn~e J~4 .lç~lal ~ower to secure the Federal statutory rig~its o~ a proteeted é1as~. T1~ le~ 1 basis o~ this priuciple is discussed fully In appendix £ ~ I Under this doctrine, It Is cl~ar ~hat ~r ~ Federal ag~neies fail to secure the rights of injured citizens un~er ~ectlo~ , such citizens may sue those agen- cies in Federal court to re~u~re them ~o. ta e remedial protective action. Con- gress, in section 601, has put Federal á~ t~ç assistance to racial discrimination beyond agency power, and ha~ made it ~t v1~ ation of individual rights to subject any person to discrimination ~ind~r a f d r~ ly assisted program. It foflow~ that courts have the power to pr~tect thi ta~ tory right in accordance with this established doctrine. Thus, if the communities ~nU ~he F e~ ageilcies should continue to fail to meet their title VI obllgatio~is, ~judic ~i r edies are ~ailable to enforce the housing desegregation reqUi1$~me~it of ~i ~ 64 Civil Right Act. ~ Ar~i~Z A ~HE DOCTRINE OF IMi~LIED JI~DXC~L r ~ ~a 0 SECtRE FnDn1~AL STATUTORY RIGHTS Title VT of the U~134 Civil Rlg~ts e cb~ s not specifically provide for suits by' persons denied the, rights gi~antM in ~ ~ n 601. But tl~iat section does provide that "no person in the United ~t~t l~ 1 on the ground of race * * * be ex- eluded from participation lr~, be den1~t th~ benefits of, or be subjected to discrim- ination' under * * `*" any federally ~i st~ ed program. Accordingly, under the' established doctrine that c~urts wil re ume jt~didal power to secure Feiéral statutory rights, the a~ra1ia)~thty of j~t id 1 relIef is Implicit In the tongressional, ` enactment of the substanti~re right ~ts l~ ` , That princis~le w~s titml~ es~ablis~ie ~ the Supreme Court's 1~44 decfsiou in' Steele V. Loi~isvU1e ~ Na~hvi~1e R4R ~Y . (828 U.S. 192) ,` recogr~lz1ng judicial~ power to enforce rights a~ins~racl*1'di~ rimlnation'fotuxd in the Railway Labor Ac~t, though' Congress had not oxpri~s l~r rovl~e~l a judicial remedy. flecently,, the Supreme Court emph~t1$lly è ~ ed `that principle with the emphasis, that "this Court cannot l1*htl~7 lnf ~ l~ Congress' does not intend judicial pro- tection of rights it coniei~s agains ~ eral] agency action * * *" Leedom v.. IC1jne (358 U.S. 1S4~ 19O).~ , , ` `, ` Even before the ~teeié c~ec1s1on, t S~i reme Conrt'had found an implied right, of judicial suit to vindtcate 1~eder j ta utory rights where Congress had failed' to prescribe a judicial ren~edy as s c . ee, e.g., Tea,~$ c~ New Orleans R. Co. v., BrotherhQo'd of Ra4~wa'y ~ S.$. Cl r ~ 281' U.S. 548, 549) ; American ~chooi of Mag~'wtic HeaUng v. MoA$nu~ty ( ~ U. ~ 9~) ; Virg~nia~ ft. Co. v. ~y8tem Feder~ ation (300 U.S. 515) . ` I ~ , i ` In Bteele, that rule wa~ applie4,~v ~ ` a Federal right against racial discrimi~ nation was found by the~ Coi~rt tol I h~ e in the flaliWay Labor Act against the, union which is the stat~itor~y rer~ ~e~i ~Ltive o~ the class or craft of wor1~ers. Although Congress had p~ovlded a~ t$ traithre ~l1~f before the Railroad Adjust-, ment Board through an i~idlv~dualI~ 1~ nee proceeding, the Supreme Court ruled, (p. 206) that : "We ca1n~ot say th~t th re Is an administrative remedy available to petitioner or that resort to suc1~'~ .~ eding iI~ order to `secure a possible admin-, istrative remedy * * * l~ pr~r~quI1s te 0 relief in ecpiity." And the Court went on to uphold the availa*l~ility of j~i let 1 relief for Negro workers to enforce this Federal statutory right ~galust r~1 1 iscrimluation : "In the abser~ce of any av~ilabl~ clXri nistrative remedy, the right here asserted,, to a reme4y for breach~ Qf the s~a u~ r~v duty of, the bargaining representative' to represent and act .foi~ the mei4b r~ f a craft, is of judicial cognizance. That right would be sacritlc~d ~r ob~it ri~ ed If it were without the remedy which courts can give for,bre~ch ~f such ci ty or obligation and which it is their duty, to give in cases in ~th1c~i th~y ha~e jU isdictlOl1 * * * there can be no doubt of the justiciability pf these ~lai~is. w noted In , General Committee v. Missouri-, Kansas-Tee~as ft. Uo., ~upra (3 Q V. . ~) , the statutory provisions which are 18 The principle applies1, eveli to fl 1~i 1 statutes. As st~ited in the opinion of Judge Hand for the Second Cirk~uit with e ~ to one Federal criminal enactment : "Although the act does not expressl~k cre$tte a ~ i~vt liability, we,can see no reason why the situation is not within the doctri~ie *bich, i t e absence Of contrary implications, construes ~ criminal statute, `enacted! for the p ~ ect n o1~ a specified class, as creating a civil right In' members of the class, al~oup th nl~T ~npress sanctions are criminal." Re~tmei8ter V.. Reitmei8ter (162 13'. 2d, ~ 1, 6 4) . , , PAGENO="0494" 488 DPiMONSTRATION bITIES AND flBBAN DEV)~iLOPMENT in issue are $tated in the form of commandsi F~r the present comman there is no mode of enforcement other than resort t~ the courts, whose jurisdi tion and duty to afford a remedy for a breach of statutory duty are left unaffect d. The right is analogous to the statutory right of e~nployees to require the em1~iloyer to bargain with the statutory representative of a craft, a right which this Cpurt has enforced and protected by its injunction in Te~eas ~ N.O.R. Co. v. Brotherhood of Ii~i~wa.y ~ ~ Clerks, s~pra (281 U.S. 556) , and in Virginian R. Co. v.\ $ystem Federation, ~upra (300 U.S. 548) , and like it is one for which there is no a~vailable administrative remedy. ~ "We conclude that the duty which the stat~jte imposes cii a union rep~esenta- tire of a craft to represent the interests of all~its members stands on no d~fferent footing and ti~at the statute contemplates reso~t to the usual judicial rem~dies of injunction an~ award of damages when app~opriate for breach of that\ duty." The rule explained and emphasized in ~teel~ has subsequently been apj~lied by the Supreme Court on numerous occasions to hiphold judicial protection 4f Fed~ eral statutory rights even in the absence of any express statutory pr~wision authorizing judicial action. See, e.g., Graha,~.t v. Brotherhood (338 U.S.\ 232) Co~i~ey V. Gibson (3~5 U.S. 41) ; Greene v. Molinroy (360 U.S. 474). Thus, in a recent summary of the principle, the Supreme Court state~l that "generally, judicial relief is available to one `Who has been injured by an a~t of a Government official which is in excess of hi~ express or implied [stat~itory] powers." Harmon v. Brucker (355 U.S. 579, 5~1) . ~ Moreover, th.~ rule ~ was recently applied by ~he Supreme Court in Leedom v. Kyne (358 U.S~ 184), even in a situation w1~ere Congress had establis ed a remedial admini~trative procedure, the Courti ruling that In case of a clear statutory vioiation by a Federal agency, judi~Ial review is mandatory. The Court provided the following significant explan~tion. of ita ruling: "This case, ~in ite posture before us, invo1ve~ `unlawful action of the oard [wrhichj has inflicted an injury on the {respondqnt].' Does the law, `apart from the review provisions of the act,' afford a remedy? We think the answer s rely must be `Yes.' This suit is not one to `review,' in the sense of that term as used in the act, a decision of the Board made within its jurisdiction. Rather it is one to strike down an order of the Board made i~ excess of its delegated po ers and contrary to a specific prohibition in the act~ Section 9(b) (1) is clear and mandatory. It s~tys that, in determining the un~t appropriate for the pur oses o1~ collective bargaining, `the Board ahafl not (1~ decide that any unit is a *ro~ prite for such pflrposes if such unit includes b~th professional em.ployeea and employees who ate not professional employees ui~less a majority of such pr lea. sional employees ~vote for inclusion in such unit.4 [Emphasis added.] Yet the Board included ib the unit employees whom i1~ found were not profess! na~ employees, after refusing to determine whether ~t majority of the professi nal employees would'vote for inclusion in such unit.' ~ Plainly, this was an attempted exercise of power that had been specifically withheld. It deprived the pro ca. sional employees of a `right' assured to them bW Congress. Surely, in th se circumstances, a Federal district court has juri~diction of an original suit to prevent deprivation of a right so given. "In Te~vas ~ New Orleans ft. Co. v. Brotherhood of Railway ~ S.& Ule ks (281 U.S. 548, 549) , it was contended that, bec~ise no remedy had been x- pressly given for redress of the congressionally 4reated right in suit, the ct conferred `merely ~n abstract right which was no~ Intended to be enforced ~ y legal proceedings.' ~Id. 281 U.S. at p. 558.) This C~urt. rejected that contenti n. It said : `While an affirmative declaration of duty ~ontained hi a legislative e - actment may be o~ imperfect obligation beeáu~e ~not enforceable in terms, a definite statutory prohibition of conduct which wo~iid thwart the declared pu - pose of the legislation cannot he disregarded * * *, If Congress intended th t the prohibition, as this construed, should be enforce4, the courts would encount r no difficulty in fulfilin.g its purpose * * *~ The defluite prohibition which Co - gress inserted in the act cannot therefore be overdjdden in the view that Co - gress intended it to be ignored. As the prohibition was appropriate to the ai of Congress, and is capable of enforcement, the c~nclu~ion must be that en- forcement was contemplated.' (Id. 281 U.S. at pp. 5i~8, 569.) And compare Vir ~7inian R. Co. V. gijstem Federatio'a. (300 U.S. 151) . ~ "In ~Iwitehmen'g Union~ of North America v. Nat4rnai Mediation Roard (32 U.S. 297) , this Court held that the district court didinot have jurisdiction of a original suit to revl~w an order of the National M4diation Board determinin that all yardmen of the rail lines operated by the N* York Central system con- stituted an appropriate bargaining unit, because the tRailway Labor Board had PAGENO="0495" D1~MONSTRATTOT~ CITIES A ItBAN DEVELOPMENT 489 in their con- ard. s~upra), Act oif 1964) ~ TITLE vI.-~-NoNDXscR~MIN P ON IN FEDEIIALLY ~&SSISTED PROGRAMS Sno. 601. No person in the U it d tatee * s~a11, on the ground of race, color, or national origin, be exc1~ded r rn articipatien in, be denied the benefits of, or be enibjected to diserimina ~o nder any program or activity receiving Federal financial .a~sisthnc~. SEC. 602. EachFedetal ~epar e~it anU~ agency which is empowered to extend Federal financial assis~tanee to a y rogram or acttvity, by way M, ~rant~ loan, or contract other thai~ a 4~ontr c O~ Insurance or guaranty, is authorized and directed to effectuate ~he provi I ~s section 601 with respect to such program or activity by issuing ~ule~, re ~ ati ns, ~r orders of general applicability which shall be consister~t with achiev ex~ o~ the objectives of the statute authorizing the financial as~1stan~'e iii con e ti~ with which the action is taken. No ~ rule, regulation, or oi~der~ sh 1 be ome effective unless and until approved by the J~resident. Oomj$ianee 1 ny recpiirement adopted pursuant to this section may be effected (1 ) t termination of or refusal to grant or to continue a~lstance u~idei~ su~ ro ram or activity to any recipient as to whom there has been. an e~pre~s fin i g n the record, after opportunity far hearing, of a failure to eOmp~y with `a h equirement, but s~ch terminatloh or refusal shall be limited to the par le l~ political entity, or part thereof, or other 19 There is no legisl~t4ve bisto y cvb eh precludes the result suggested. The only eon- gressional effort te pro~ir~de spec! e llSr or suit by injured citizens to enforce see. 601 rights was Incorporated In a~ substitut o t tie VI originally offered by Senators Ribicoff and Keating. However, w~ien the a ~i nh ration provided a new draft of that title, the S~na- tors withdrew their s~ibst~tute s e 1 0 Congressional Record 7065) and thus there was neither a vote nor an~ dis~ussio a t e issue of individual suits to enforce sec. 601 rIghts. t nbey any person to courts have power l~ shed doctrines rei S gram.' rdance - xcess of ~ ~j) or in vi'o Le judicial reli ~ourt I PAGENO="0496" 490 DEMONSPRMflON CITIES ANDk URBAN t~EVELOPMENT recipiemt as~ to whom sw~h a finding has bE~u made aud ~ha11 be 1imi~ in its effect to the partk~u1ar program, or part ~ In wbith sueh none * pUance has been so ~und, or (2) by azi~ other meant authorized by law : Provi e~, how- ever, That n4 such action ajiall be taken niut1I~the department o~ ageucy c cerned has advised ~the appropriate p~r~n or per~o~is of the failure to cc~m, ly with the requirement and ha~ determined that ~eomp1lance cann~ot be see red by voluntary in~ans. In the case of any actiofl terminating, or refusing o grant or continue, assistance because of failure to ~omp1y with a requirement inposed pursuant to this section; the head of the F~c1eral department or agen. y shall file with the conimittees of the House and Setate having legislative jun iøtion over the program or activity involved a full written report of the cireum tan~es and the grounds for s~ich action. No such ~ction shall become effeeti e ~inth thirty days have~lapsed after the filing of ~uchjreport Si~o. 603. A~ department or a~ency action t~ken pursuant to section shall be subject to $ueh jud}cial review as may o~herwise ~ be provided by 1 w for similar action %taken ~ by . such department or 4geney on other grounds. n the case of action, inot otherwise subject to judith4l revlew~ terminating or re using to grant~or tw~ontinue financial assistance np~n a `finding of failure to c rnply with any reqi~th~ement imposed pth~suant to se~tion 602, any persons agg leved (including any istate ~r political subdivision t1~ereof and' any agency of either) may obtain judicial review of such action in aecordanc~ with section 10 ~ the Administrative Procedure Act, and such aeticm shall not be deemed corn itted to unreviewable agency discretion Within the i~oanhrtg of that section. Suc. 604. Nothing contained in this title shall &e construed to authorize a tion under this title by any department or agency ~ 4lth respect to any Omploy cut practice of any ~ employer, employment agencfl or labor organization e cept where a prlmar~ objective of the Federal fin~n~1al assistance is to pr vide employment. ~ ~ Sno. 605. Nothi~ng in this title sh~fll add to orjdetraet from any existing au- thority cv~rith resp~ct to any prograni or activity ~nder which Federal finan ial assistance is extehded by way of a contract of iti~tiranee or guaranty. TABLE I.-Fanz~iie~ a~ i,ndit'iduals dispk~oe~ by~ Fed~eraZ and federa~iy ai ed prOgram8 Aver~gfe vear~v ~mber of d~pktcem.e~ts in pa~8t and estimated or fv~turo APPnNDt~ C Agency ~.. ~: . ..~ ~ DikECr FEDERAL PROOnAMS Past Agriculture Denartment , Defense Department -~. G~nera1 Services Administration I~t::~:: Department - - International Boundary and Water Commission Post Office Department ~ Tennessee Valley ~tuwuri~y ~ Bureau of Public Roads - Housing and Home Finance Agency:. Public Housing Adm1n1s~ration Th~ban Renewal Admlui~tratlon ~t~:: Department .~ Average displacement p~\r year j Future (estimate) 3,24 53 58 23 14 124 PRPR1~ALLY ASSISTED PROOR4MS 1,646 278 140 19 199 64 82, 395 4,155 34, 033 19 , ~6, 770 3,166 66, 250 * 10 2, 350 70, 570 4, 880 106, 20t1 72,920 111,080 , Total (rounded): Direct Federal Federally assisted Total Source: U.S. Congress, House, Study of Compensation and Assistan~ fOr Persons Affected by Real Property Acquisition in Fed6ral and Federally Assisted Programs, printe4 tor use of Committee on Public Works, 88th Cong., 2d seas., 1964, p. 272. ~ * ~ ~ PAGENO="0497" DEMONSTRATION OXTIES N RBAN DEVELOPMENT 491 AI~rE p ~ TABLE II.-F~3dC~al pr~grams i the t1anta~ metropolitcinv area' I. [In ~bousa ~1 of ~1 liars] Grant and matching fund programs: Department of Commerce-~Bnrea~i of I~ublic o ~ Primary road construction44 ~ ~. Secondary road constructlon4~J ~ Urban road construction ~ ~ ~ Interstatt~ highway constructi~n,~ Department of Health, Educatioi~, an~ Welfa ~: Office of Eduoation-Paymen~s to School ~s net Public Heai~h Ser~4ce : Hospital construetiou__~~ Waste treatment ~orke c~nstr~iction Air pollution rese~trt1~ ~ ~ - Water pollution researoh~ran~s ~ Health facility constr~tctipngrants Housing and Home Finance Age~icy-~Urban ~ n~ al Administratiou~ Title I renewal grants ~ Loan and advance loan programs: Department of Agriculture: i Rural Electrification Administration: L a 5 t~ lectric facilities Farmers hOme Administratjon: ~lural ~ sipg oans Housing and Home Finance A~ency~-Oom nit~ Facilities Aclxninls- tration: Ad'~nces for public *ork~t plasm g ~ . Veterans' Ad~inIstrat1oñ: Dire~t ho~ieing 1 a ~ ~_- Insuring and leaseback p;ograitis: ~ I Post Ofllce Department: t~easeJ~ack ~onstr c~t oi~ cilities Department o~ Agriculture--Flarme~s Ho e .4t~ nistration: Ins~ired farmownership `oans ~ ~. ~ ~ Housingand Home Finance Agency: Community Facilities Adn~in1st~atiön: C l~e~ housing lOns~~. Federal HOusing Adtnifiist~'atioti: luau a ho sing loans ---~-~_ Public Housing Adsi1inistr$ion~ PubI d o~i g construction Veterans' Administration: Ins~ired housin 1 au~ 772. 6 27. 2 265. 9 15, 197. 6 818. 6 1, 261. 3 816. 4 83. 0 19. 6 ~ 492. 0 1, 400 0 io. 9 20. 0 194. 9 96. 0 1, 990. 0 67, 931. 0 1, 639. 7 16, 354. 2 2, 165. 0 ~. 0 1 , 921. 9 26, 696. 7 SM. 8 1, 791. 8 120. 7 53.1 19. 1 46.3 i, 839 0 ~ 65. ~ 33. 0 98. 6 68, 355. 0 1, 792. 1 9,806.8 Total ~ ~J 107,840.9 1961 Authorizations 1962 1 The Atlanta standard metrop~litaz~ statis Ic 1 w~ a consists of Clayton, Cobb, De Kaib, Fulton, and Gwimiett Counties. Source: U.S. Congress, Senate, `~Role of the e er~ Governmentin Metropolitan Areas," hearings before the Subcommittee on Intergoverx~mental Rel ti ns, Committee on Gqyernment Operations, 87th Cong., 2d sess., 1963, p. 82. I 978. 0 33. 9 113, 776. 8 I 60-878-66-pt. 1-~32 PAGENO="0498" 492 DE~EONSTRATION C1Tll~S AND URBAN DEVELOPMENT ~ C~cQC~ ~ ~ t-~ -- ~ ~ ~ ~ ~ ~n fi ~ ~ ~- ~ ~ OO(~ 0 ~O t- C~ ~ C~ C~ ~ ~ C~I C~I C~1 ~ ~ ~ ~- ~ ~ ~ C~ ~ t~ ~ ~ ~ ~ ~ 0 Q~ ~ 0 ~ ~1~ .~ ~ ~- TJ~ L~ ~ ~ ~ !~ F~ H ~ ~ ~FL1i~ ~ HL ~ ~ I ~\ ~i\ H -i--_ C) H Ti ~ ~H ,~ ~ `~ ~ ~ ~ i~ :~ ~ -;-:- ,~ ~0 r~_ -:-- ~ C) J2 ~ c~ , ~ ~ ~ :~0~d~d~ ~ Q ~ ~ :8~s~ ~ U ~: ~ I~tJ ` ~ ~) 0 ~ ~) ~ ~ .~ ~ ~ ~0 ~ ~ ~ ~ ?~ ~ 0 ~ k ~ ~ ~ ,~ .~ ~; 0 r~ ~ ~ ~ .~ ~ ~ 0 ~ ~ 0 c~ ~ to 0 C? :~ C? ~ ~ 0 0 C? 0? 0'? -_ Co 0~ 0) 0) to ~ ttto ~o tt :~o ~ :~ ~ `~ ,~ ~ :~Cj ~ ~ ~ !UI~~ht~ ~ ~ ~ ooo~~ZZ~~ZZZ PAGENO="0499" DEMONSTRATION ~ ~ ~ c~ ~i ~ ~ ~ c~ ~ C~l C~ ~ &~ C?~ :~ ~ L~- ~ ~: ~ :t~r~.c~ ~ ~ ~ ~ ~ :~ ~ Cl Cl ~ ~ c~ t~ ~ ~l Cl iT -~ CO Cl Cl~ Cl ~ ~ ~ ~- C~TIES A~ E~ r~ç~ ~$ w~S ~ ~O~e~' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ !~ ~ ~ ~ ~?O* ~) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~I ~ 0j ~ ~I CO CO ~ ~ ~ CO5 ~ 0 COS ~_)* 0 ~ ~ CO .~ te ~ ~ ~ r~ ~ ~ ~ CO-~ 0 ~ CO~ ~E ?~ I ~ ~ . //~ 0 r~ oc ~ o~ ~ ~ ~ qo Cl ~ Cl~ Cl ~ c~ ~ CO Cl CO Cl CO CO Cl ~ Cl Cl ~ 00 CO Cl ~$ Cl 493 I CO C~ ~ CO ~ CO ~ 00 t~ Cl ~ ~l CO ~- ~ CO C'- ~ ~c~-r~-~ Cl CO ~ CO Cl ~ CO CO C'- Cl Cl ~ CC CO ~ Cl Ty BAN DEVELOPMENT CO C~ Cl Cl CO `~C Cl Cl O~ CO ~ Cl CO `-4 CO CO C'. ~CO~CO~CO Cl C'- Cl CO CO Cl PAGENO="0500" 494 DEMON~YTRATION. ~I~J'IES ~ AN1~ URBAN DEVELOPMEN Mr. DAivnx~. Mr. Chairman, wetappreeiatA~ this opport nity to appear be~ore this committee. Mr. BAthu~irr. Thank you, Mr. David&lf. I want to thank you on behalf of the subcommittee fo a well thought out and stimulating statement. I notice on page 2 of your statemeflt you speak of the nee for at least $20 billion over the next 5 year~ for the demonstratioj~ cities program. I imow many of us would 1~ke to see this amount ~uthor- ized. But I also think you understand that in the present setting, with increased d~mands on the budget coming from Vietnam, the C~ngress will not be $ble to authorize as much a~ it would like to for d~mestic programs. in other words, the administration and the Oongre~s have to balance all of our national needs. I ~would like to have you~ corn- merits on this. Mr. DAvIDo~. Well, Mr. Ohairman, oitr national domestic programs have been established in the Great Society as setting forth go~ls of equal opportunity for all people in our society, and that it is oi~tr be- lief that this must be met at the earliestp~sible occasion. It is our belief-and I have made me4tion of this earlier-th~t by failing ~to set ~ny time limitation on the a~chievement of this program, of the demon~tration program, or of th~j Housing Act goais of ~ or the antipoirerty fight, that the Great ~ciety has really fail~d to tell ii's how it èan be established and when~ it will ~e established. ~nd this is why I say-it may be just rhetoric~-6 months ago Mr. R~ston wrote of the Great Society : "It is formi~ig a quiet revolution." To me, it may be a quiet revolution or it may be a noisy status-I do not know which it is. But I do sincerely believe that we must . conf~ont our problems at home and confront them rapidly. Mr. BAm~rr. May I just indicate bri~f1y, you think that tl~ese pockets of poverty and slums must be el~tuinated-if I may pu~ it this way-if we are to be strong from ~w~ithout we must be str~ng from within ? ~ Mr. DAvmo~. That states exactly what I would like to say, ~[r. Chairman, in mi~chbetter terms. Mr. BAmt~rr. Mr. Widnall ~ Mr. WIDNALL. Mr. Davidoff, thank youy for a very constructi e statement today. I do not think `anybody cafl quarrel with the aspir - tions and goals that you have set through t~e Americans for Dem cratic Action. 4 As our chairman has said, we have got to 4etermine some prioriti and we have got* to decide where we are g4ing to channel our be t efforts. . Now, the bills ~that we are considering ai~d also the amendment that you propose embody an expenditure of ~not just $2.9 billion bu billions and billions more than that. Now, i~E we are to do this, an if we are to start out on the scale that you envisage and recommend we are undoubtedly going to need new taxea Have you taken an position with respect to new taxes, Mr. Cohen? Mr. CoHEN. We have, Congressman Widi~all. Around the time when the budget was being developed in late t~ecember, and there was a lot of talk then of cutting back or not sufficiently increasing Great Society programs, the ADA National Exe4tive Committee com- municated to the President a letter, which I w~uld be glad to supply PAGENO="0501" DEMONSTRATION CITIES A RBAN DEVELOPMENT 495 for the record, in which ~e ~peci~ all stated that we thought the Great Society should not 1~e strankl d in its infancy, and that ADA was prepared to recomme~id addi~i n taxation if that were neces- sary to finance, to fund, to invest n he ~needed public service prorn grams. The greater taxation wdu d be based on a progressive * ta~ system. We are prepared to sa~4 we are f r ore taxation if it is necessary to fund the Great Sôeiety~ ~ . Mr~ BARRIrJrT. That letter i~bay th mitted for the record. With- out objection, it is so ord~red. ~ (The letter réferred~ to follows :) `: 4t ~ CANS ~OE Th3~MOCRATIC AcTioN, ` ~ w sMngton, D.U~, December 29, 1965. President LYNnoN B. The White HO~48e, Wa$hington, D.C. DEAR MR. PRESIDENT : We are deep y ro bled by widespread reports that 1967 allocations for the deveJop~nent of og~ ms of the. Great Society are beiug severely restricted because of ~he r ~ iti military expei~ditures. It would be tragic if the Great Society were stra g ed n lt~ infancy. ~, ~ It would be all the more tragic be ~ ~ it is unec~s~ary, The U.S. economy still is not at full employm$it and rè s not full utilization of Its marvelous productive capacity. -Vne~plo~m.en~ s ~ ill 4~2 percent of the labor force, not counting the millions of ~art~time ii e ployed. 1~s~t~urement~ of utilization of industrial capacity also indicate th ~ resent op~rat1ng rates are well below preferred rates and likely t~ re~nain S i~ iew of the large volume of new invest- ment planned and underway. Wit * pr priate fiscal 1~olIcies, a fully emp1oye~l American economy can st~pport bo e panded defense expenditures and the Great Society, I Indeed, the Gi~eat Societ~7 wi~i ma i~ ajor contribution to avoiding inflation. Programs of edncatioa ai~d traini g ~r precisely what are needed to match the supply of qualified w~rk~rs w t r uirernents~ thus overcoming the chief barrier to expansion of outptit. ~ ding the out~nit of goods and services, rather than restricting ec~rno~nlc a ~ v~t , best serves to avoid Inflation without sacrificing national defen~e o~ do e tiq welfare, As economists, we reco~nize tha he~ is a ~o1ut beyoiid which the combined effects of public and prlv~tte expe d tu es would o~rburden the economy. We do not ~know the size of. ~ont~nipl t d ilitary expe~iditures nor the magnittide of prospective private e~per~diturk~s ~ plant and equipment and inventories. At present, however, o$rheatlng i f ~ e economy does not appear imminent. You have already demon~tra~ed h ~v pa cular points of strain can be dealt with; for example, by release of ~tock ~ d omniodltles to check administered prthe increases, and by wldesp$aU obse v nç of reasonable wage-price guidelines. The economic impaet ~f b~idget 1~ 7 expendItures Is stili in the future and dependent on deve1opme~it ~rhich ~ w~ t now be foreseen. We should continue to observe earefully ho~ output, r4* ment, and Government revenues respond to higher levels of 4enia~id. If, i ac~t it turns out that there is an inflationary gap that cannot 1e elOs~d by cx a di g output, then. it would be far better to reverse the tax rediietlo~is o~ the a t ~ years than to starve the long overdi~ie and most hopeful programs/that you av initiated for the welfare of our country. Under such condtions, a re~rersl. n to ormer tax rates would be the choice con- sistent with the Nation'~ needs a t~ Democratic Party platform, We are addressing t1~is th you o b half of ther Executive Committee of Amev- leans for Democratic A~ctioti~ Respectfully, EMILa BENOIT, ADA Vice Chairman. . BnwAEn D. HOLLA~DEE,. . ADA. Vice Chairman. , . . . , ROBaRT R. NATRAN, . ., . .` AiM Vice Chairman. PAGENO="0502" 496 DEMONSTRATION CITIES ANt URBAN DEVELOPMEN Mr. WIDNALL. Can we determine the form of taxation tha you feel would be more effective in handling t~his ? Have you got an sugges- tion on this~ Mr. COIaEN. Yes, Mr. Ohairman. We would be prepared, ith the exception of the bottom brackets,. to r4peal the tax cut of the evenue Act of 1964. There were important ch~anges made in the Reve ne Act, such as the minimum standard deduction and such as the reduc ions for the people earning the lowest income. WewOuld be oppose to the repeal of those taxes, but with the resbof the Revenue Act of 964 we would be prepared to repeal it. In addition, we would favor financing the increased taxes o a tern- porary basis until the war effort woul4 no longer require it. Mr. S~ GFIRMAIN. Would the gentlethan yield for one secon ? Mr. WIDTcALL. Yes. Mr. ST GF~RMAIN. Would you give x4e an example of a tern orary tax that has ever been a temporary tax ? ~ Mr. COHEN. Certainly. The Council!on Economic Advisers has in the past recommended, as has the Clark Manpower Subcornmi tee in 1963, granting the President discretion within guidelines estab ished by Congress as to when taxes can be cut and raised. It is in tha~ con- text that we would view that new tax legislation should be adopte~l. Mr. ST GERMAIN. But let's be realistic. Under the present itua- tion, I asked you, can `you give me an ~xarnple of a temporar tax that has been imposed that has actually 4urned out to be a temp rary tax in the history of these United States ?~ Mr. COHEN. That is because of the w4y the legislation is wr tten, Congressman ~ St Germain. We would Ifavor the legislation eing written differently along lines I just recor~irnended. Mr. ST GEEMAIN. Thank you. I thank the gentleman for yielding. Mr. WIDNALL. I do not know whom to ~ddress this question to, but whoever wants to answer it. I was intrigued by the proposal you make that you call the AR~H amendment. We have within our Govern~nent establishments pe~p1e who are very guilty of being poor 1andlor~is. There are many c~ses of poor and in~dequate and improper hou~ing as far as the milit~ry is concerned. What penalty would you ~put upon government~ in order to make them measure up to standb~rds ? And the Congi~ss itself, it seems, is more ready to not do any~thing about this than a~ny of the various programs. Do you not . think that is a corr ct evaluation ?* Mr. DAvID0FF. Are you talking ~ of the local government unit ? I have difficulty-~--- ~ ~ Mr. WIDNALL. I am ~ thiking about the 1~'ederal Government th t controls housing on its own bases. * . Mr. DAVIDOFF. On its own bases? Mr. WIDNALL. That is right. Mr. DAVIDOF1~'. ~I do not have an answer to hat question. Mr. WIDNALL. I notice in the present budget that is before us the\ have eliminated the new housing that is so necessary in many of th military bases. This is being postponed. At the same time they ar talking about spending millions of dollars for those who are not o the military bases. I don't see why there should not be an equa PAGENO="0503" DEMONSTRATION ~ITIES ~N RBAN ~ DEVELOPMENT 497 trE~atment. The ones wh~ are o4 he frontlines should have equal treatment from the Government ~`th those who are not in the miii- tary establishments that a~e pov~i~t st icken. Mr. COHEN. You are ~sk~ng ~is w at mechanism we would use, since the depreciation allowa~hces /d u t apply? Mr. WIDNALL. ~ That is right. I Mr. COHEN. We have i~o qua.rr~l wi i~ the goal you have established. And with the committees perr~ii si n, if our Housing and Urban Development Commisshin ~nay / av some time to consult on this problem, we will try and have ar~ n~ er. Mr. WIDNALL. If you ha~*e anjy re ommendations, I would appreci- ate having them. * I What is going to be most tr~i bi some, I think, about this entire legislation is the fact that it a~p e~t s more and more day after day that the bills involved will bel ast~ nomical in order to do the job. And it is becoming qui~e obvio~s th t you are not going to be able to, particularly with the demonsti~a io cities, have an adequate demon- stration in the 60 to 76 cities ~ vi aged with the "peanuts" that are being appropriated. I Now, do you have arty recon~ ~ en ations to make with respect to the criteria that should b~ used ~Io ci termining what cities will put on the additional denion~tration ~ A d dO you feel that in scope there should be some taken] from ~a k~ s categories, like the major cities, New York, Washingtlon, and hi adelphia, small cities, and medium sized? Mr. DAvrnorr. Coi~igressm , i is suggested that we support the Reuss-Ashley-Moorh~d am d ent, that a priority or criteria be established based ~tpon econ i~ and social pressures such as popu- lation density, cri'm~ rate, p ii welfare participation, delinquency, unemployment, eduqational rëII , et cetera. And we believe in fact that the priority sh~ul~ be e ta lished on the basis of need. And I don't think it should be est ~ 11$ ed oti the basis of number of cities, and I don't think it shoul ~ e ecessarily 60 cities or 80 cities, ~ or it should necessarily 11e 1 or 1 fr m that 60 or 70, I think the criteria should be on the b~sis of n d, nd I think the cities which have the greatest ~ need shou'd recei~ tli first priority. It may be that New York, Chicago, an~ Philade p `a will receive the largest proportion, because the great qities do h ~ a great need. But I suggest that the basis should be tI~e r~eed, ~ d I think that these criteria are more appropriate, and certain y th most appropriate is the degree of dilapidation of houses. ~ Mr. WIUNALL. ~Wh~%t p r e age of money involved in the demon- stration cities program d ~ think should be devoted to residential purposes? Mr. DAVIDOFF. I must. s y that my own belief in that matter is that it should be a very a ge amount, that this is our primary need, that I would thi~ik that t e ajor renewal funds, major demonstra- tion funds of th~is orde ho id be handled or should be devoted to residential deve]Jopment I ~ould say that we presently have other programs, natio~iai pro ~ Ifl for stimnlating economic development, and I would put my a or emphasis upon residential development here. ~ ~ PAGENO="0504" 498 DEMONSTRATION CITIES ANJi ~JRBAN DEVELOPMEN Mr. WIDNALL. Would you a,gree ~ with the statement that Mr. Weav~r made when he testified here ltw,t urban renewal has i~ot lived up to its entire or initial goal ~ W1~ere do you think it l~s really failed ? ~ ~ Mr. DAi~moFF. I think I have made~ it very clear that it ha~ failed to meet its~first goals, that it is, I be1i~ve, aimed and has bee4 aimed primarily ~t aiding middle-income an~l ~ upper-income famili~s, that only a very small proportion has gon~ for ~ low-income fami1i~s. In ~ Philadelphia recently I saw the reporl~ of the Philadelphia H~ousing Association which said that something like 19 percent of th~ units of renewal have been for low-income families. But III think this is where the great need is. I think too often in the past urban r~newal has been aimed at physical details, andt it has not been aimed ~t the families in xieed. And one thought tI~at by clearing the ph~ysical decay there `was a possibility for succes~. But I think this has\ been a view that is in part based upon the hi~tory of city planning i~'iove- ment, which ~was based upon oniy lool4ing at the physical as\pects of the city. ~And it is only recently t1~at the city planning n\iove- ment is beginning to see that city dev~lopment must accoun~ for social development, economic development, and physical developthent. And they are all part of the same planned program, but they ca ~ not be viewed `separately. And the old view~ which was popular in the 1950's that by making the centers of~cities~ more attractive and sti u- lating the economy of the center of the citiy could be helpful for ity development was a mistake, because I think~it went off from the tac of helping the p~ople who were in greates4 needS And I think he renewal progra~n in its history has failed to~focus upon the low-inco ne families and ha~ failed to' build a decent ~wironment for them. Mr. WmNALL. I agree with you, it wold be the beginning o a healthy change ~ in attitude on the part of `the people within t e community, and on the part of the local official as well as the Fede al Government. It is about time this took place. And I hope th t we can redirect the effort so that we can ~nake some progress a d take care of the low-income families. Thanit you. Thank you, Mr. Chairman. Mr. BARRI~iTT. Mr. St Germain ? Mr. ST GERM~LN. On page 6 of your te~timony, your suggeste amendment No. 1~, I think it is, to the Demo*stration Cities Act, an you refer to the ~ct that the cities should Ije required to take eve the property of sium landlords who fail to tobey the housing code. I wonder if you have an opportunity-I had the privilege of hearing Mayor Daley testify on Friday when he deskibed the method, used in the city of Chicago. They go into equity court. . Are you familiar withthat? Mr. DAVIDOFF. New York has a receivership~law. quite similar. Mr. S~ GERMAIN. And' do you feed that this~perhaps might be the type of mechanisni that should be used if l~gislation were to be suggested ? It seen~is to me, howev~r, that we ~ce the problem here in the implementation on the Federal level, b~ause each and every State-in quite a fe* States it is based upon di11~erent systems of law. But would you sa~~ that in theory this is. wMt you feel should be done, this type of a procedure, whe~reby the city can go into equity? Mr. DAvID0FF. Yes, something along that line. PAGENO="0505" DEMONSTRATION C~TI~iS A REAN DEVELOPMENT 499 ~ Mr. Sp th~RMAIN.. In Ch~ca~ n t ey say they also have a fund which they have deveiopeçl to us ~ o `mprove these ~ properties that are capable of improveme~ pn a e~ * nomic basis for resale or re- purchaseby the original 1ai~idlórds. Mr. DAVIDOFF. Yes, I th~nk ~ha t is along the lines that we con- template. The exact method is no ~ ~ ssary. What is important that HTJD review this action and se a~ recently in New York, and I am sure it is true in otlmi~ cities ~ at 1ocai~ government, and as Con- gressman Widnall pointed out, ~ e~ 1 Government frequently does not obey its `own standards, 1~o m e ~ ~ re that the cities are acting to maintain a high standa~r4. Now, ne of the great problems-I think it i.s true in New York Cit~y-is th t t1~ re are not adequate funds avail- able for the city. Tt has/receive s ip powers, but it has very limited funds. And one of `the / things ~ at we have discovered is that Fe- habilitation is a terribl'~ costly ro ram- . . `Mr. ST GERMAIN, And if you ~ a ~ the testimony Friday, you find that they raised' funds b~ v~luii ~ ontributions from business peo- pie who are interested a~d ~vho I i~4i gine feel that this action is jim- proving the value of th/eir own rc~ erty, and this is therefore wel- come. And it is a resohring thi , ther we sell, or we purchase the properties that are tak~n over t is recthvership. I have one comment km this. r~ are quite a few points that I agree with you on. I i~ou1d sa h your overall statement is one of the ultimate utopian g~al~. A ~ is grand. By the same token I wonder how frank you are bei ~ ~ ir~ aking these suggestions to us on page 5, No. 2. ~ There i~ a foil u~ to No, 1 that you quoted to Con- gressman Widnali in a~s~er t i~e of his questions, and you say~ "In short, publi~ policy sh~uid not if ~ a city to choose between its Har- lem and Bedford-Stuy~ves~nt. ~ on were aware of the course that was cited to us by ~ oi~e o~f t e~ individual sections of New York City-let's be practical. Tni , th tax gambi~ you tell us about is ~rrand. And I agree ~iith you,. e ould like to have all ofthis done. But by the same tokei~, lOt's g~t d to dollars a~nd cents and realize that though many of ~is woul~ ik to do this we will never be able to do it. And therefor~/I submit h t if we could have these things, we would be happy to h~ve then~ B t at the same time, would you tell us what vou feel is p~ac~icai/~ o t them, what we actually do under existin~g circumstauce~ cther t~1~ ~ hat Congress has now constituted? Mr. DAvIDoi~'. Ca* I respb d 0 that by saying that I think that there is much in thi~ testim y hat is very practical. I think the proposals on effectiijg the e al Revenue Code are practical at this time. Mr. ST GERMAIN. T5nfort at ly, we don't face the needs. Mr. DAVrDOFF. W~ do un ~ st nd. But we do think they are prac- tical and not uthpia4i. I th e major emphasis placed on reloca- tion to suitable insi~rar~ce. o ~ ke relocation back into the slums is not utopian. ` / Mr.- ST GERMAIN./ P~ds i~ h~ biggest problem we have on renewal in many of these rprôgr~nis, ~h ~ do you relocate these people properly, `how do you put th~m into ~ u~ng that will be better than what they have `been in. I a~ree `wit ô that you should not move into other areas that is going ~o be si l~ using `all `over aga:in in `a short period of time, because yo~i az~e ce ~ ir~ y not improving, let alone their physi- cal environment, but their nt 1 environment. PAGENO="0506" 500 DEMONSTRATION CITIES ANI~ URBAN But wI~en I used the word "iitopi4" i meant that you fee that all cities shoilild be 1~aken care of that 1~aVi~ a need. I `agree ~ ith you, but we a~ not going to be able to d4 it. We must make th s choice ~ or force a choice betw~n a Harlem ~d a Bedford-Stuyvesa t. And I think you will have to agree with me to this effect. Mr. DAVIDOFF. Of course, a choice has been made. We se a limit of $20 billion for the next 5 years. We tried to be practica . And I think that we recognize that some cities have a number f areas which have a great num~ber of prdblØms. And we are sayi g, as I answered before, that it may be that o4e city should receive `a umber of projects, and not be limited to one.~ And in New York, t e ne8d is great, and is ~s pressing ~ts it is in i4any other cities. And think that it would be far i~tter fo develop ~he program in terms o needs throughout `the Nation rather than o~1 the basis of one proj ct per city. Mr. Sp GERMAIN. There are two wor~1s that bother me, page 2, the first sentence, your last two words "planned neglect." Who i plan- ning the neglect. How would you define the planning and the eglect separately and `together? Mr. DAvIDor'i~'. I would say that sin~e 1949 we have had a great deal of i~hetoric in this Nation about ~ur desire to obtain a ecent home and a suitable living envionment j~or the families of this oun- try. I think in fact we are making ve4y little p'rogr~ss along these lines. I would like to be able to doc4me~it that remark. nd I hope within the near future ADA would be able to submit a ~ tudy to you along these lines which would demonstrate the amen t `of change that has,, in fact, taken place. IIh fact, for many years now we have been approaching this goaL we say, but `in fact ther has `been very little occasion to overcome the `p~dblems that existed in 949, that the low-income families have not b~en the beneficiaries of this program, and that while.there is `much tai~ at the Federal level a out coping with the problem's, in `fact there ` ~as been very little ac ion. And I think that what is terribly dang~rons is the fact `that ti ere is no mention ~f time ever, that the failui~ to ta& about ~ time w en this `will be achieved just means' it is promises without any substa ce, without `any practical utility. It is only~when `a date is put on it. Now, it may be that the President is fac~ng reality in his mess ge when he) says `at the very end it will be the 21st century. But t en let's `at least come `and discuss that openly. shall it be the 21st c - tury `when this goal is met, `and not assume that it will be at `an carVer time. We shall discuss, jf we can wait `ano1~her 34 or more years u til these goals `are met. I think that is far too io4ig. Mr. S~r GBRMAIN. Thank you. Mr. BARRETT. , Mr. Gonzalez? Mr. GONZALEZI I, too, compliment the ge tleman for a good and a comprehensive st~tement. I was particularly impressed by your emphasis on the question f equality of opportunity in housing and the related benefits to be d - rived from these proposals. This is a very present and a practicabi problem back at the grassroots level. Recently, I had occasion t confront this. And I had a very interesting )~etter from the A ssistant Deputy to the Attorney General which state~-and I quote from hi letter- PAGENO="0507" DEMONSTRATION CITIES A~ URBAN DEVELOPMENT 501 Housing, the financing of that which ~ s b en merely guaranteed or insured by the Veterans' Administrath~n or th~ ~ ed ral Housing Administration now according to the Department o~ HOusin* n~ Urb~in Development is not within the scope oi~ the present Federal statut~s im d at discriminatory practices. As you know, however, the Pres~d nt will shortly recommend legis- lation to Congress to stre~ngthen th~ o ers of the GoVernment to doa~ with such practices. In t~ light/o t is interpretation, how do you reconcile title VI in the very poor p~ fo mance picture that the Govern- ment itself has given us a~oiit att~ p ng to enforce it ? Apparently the Justice Department here is o~ he opinion or of the mind that it cannot be resorted to. Is this yo~i i pression, or is this the impres- sion you have had in your ~tudy ? I Mr. DAvID0FF. My belief, but n~t ex ert belief by any means, is that title VT is applicable, and shçuld Li v~ een. That was the intent. Mr. GONZALI~iZ. This fl~t statei/n nt housing the financing of which has been merely guarante~d or in u ed by the VA or FHA is not within the scope of the present Fe~eral s al~ te seems to be in flat contradic- tion. That is my impression. o urse, the language itself is con- tradictory, because it su~ge~ts t a t e President has issued Executive orders of which we can ~Tvai~ ou s lv s. Well, Executive orders surely would have to be based on some s at tory grant of authority. And I cannot think of anythin~ else bu t ti VI. * Mr. COHEN. Congres~mau G a~ z, if I may interject for a moment, we think the administr~ttion has r~ ermined-and it almost amounts to malfeasance in the way they ~ v~ enforced title VI, not only HTJD, but other departments as w~ll, b 1I~ D especially. Aud the opinion of the Assistant Attorney Gei~era1 ~ *t at instance is, we think, completely erroneous, it is against the con es ional mandate, and it goes against the legislative history hi both t e ~E[ use and the Senate. And we would hope that Congress ~oi~ild begi o plaining about how the Executive is not fulfilling the con~re~sio a in ent in this important area. Mr. G0NZAnEz. That is very t u~ And now that we are in the proc- ess of entertaining this prop ~ 1, think it. is a good opporhmity to raise this issue, because it is t t e heart of the whole matter. In fact, the President hii$elf ha s at ~1 categorically in the group of most if not all of our urbai~i proble is a questiou of racial discrimination. Of that there is no ~ue~tion i y mind. ~ From the very practical experience that one l~as to ha if one is going to have any tight bond with the con~tituency. And~ i , is morally and legislatively untenable in any postion to see ~ lot of ~h s oney. that is being expended in some current programs uiiñerwa~, er artfully dumped and doled to the detriment of a segment of t1~i co stituency. Also whether or not we now, while di'scussii~g this, /~ n isualize how even these anticipated programs can be twisted a~ h ~ have been already by the private realtors and others ~vh~ in t~ ~ pi~incipal cities of my State have, to all purposes and practices, acti~a ly ircumvented the question of equality in the opportunity of obtan n housing and housing facilities, even those directly or ii~directlv n~ ced through Federal activity. And I commend you, b~cause I ti in you are the first ones that have ap- peared here in `the course hese hearings that have made any refer- ence to this questiç~n of eq lit or segregation, whichever point you consider you want ~o look a i f om. So I thank you. PAGENO="0508" 502 1~EMON~STRAPION CITIES AN URBAN DEVELOPMEN Mr. BARREVL Thank you, Mr. Go~za1ez. And thank you, Mr. Davidoff and Mr. Cohen for your ver splendid testimony here this morning. Mr. CoHEN. Thank you, Mr. Chairman. If I may, the subcommittee has been more `than patient, a d we are terribly appreciative. . But one of the reasons we come u~ with these amendment is that really the great respect that we hold tI~e subcommittee in. T e cliche, you know,~"the Executive proposes an4l the Congress disposes, ` is only a cliche, aiid does not apply to this coni~mittee. And I think i is clear that, just looking at the most recent history of the Housing Act of 1964 and the Housing and Urban Development Act of 1965, it is clear that this subcommittee helped really shape all the legislation for the Congress, and improved it by correcting many of the basic flaw in the administration's initial proposals. A,d we trust that while we are practical enough to know that everythir~g we suggest won't be a opted, we hope that there is a chance for som4 of the things. Mr. BARRErr. Mr. St Germain desir~s to ask you a short qu stion. Mr. ST G~RMAIN. I wonder if you g4ntlemen heard the que tion I asked of th~ previous witness about hiving a team, so to sp ak, of expert planners rather than depending-hoping that various com- munities would have good planning talent, those communitie that are chosen-though we would like to g~ along with you and ha e all communities participate, say there was 60 or 70 communities cI osen, this concept of a team of the best hou~ing planners in the co ntry would be made available to these cities t~ help them with their lans, so that they could in actuality be demo~istration cities, examples or models. I wonder if for the record you ~ould be good enough to give us a comment on that concept. You can~send it in to us, becaus the time is late, and it has not come to your att~ntion previously. Mr. DAVThOi~T. I would like to comment briefly that I like the idea of getting good planners together, but if planners are not avail~tble there are some very specific criteria, and t4~ie need is in the legislation to set down th~ criteria by which the Secretary can determine what he wants of this demonstration, what it shoul4 achieve, and those crit na would act as guidelines to the experts brou~ght in to help assist hi Mr. BARRETP. Thank you again. And ~ll time has expired. The committee will stand in recess u~~til 10 o'clock tomor o~vv morning. (Whereupon,~ at 12:30 p.m., the snbcomr4iittee adjourned, to rec ii. vene at 10 a.m., Tuesday, March 8,1966.) PAGENO="0509" DEMONSTRATION CI'~FIJ~S DEVELOPMENT TtXE~DA~, fl~' 8, i966 ~ ~Hors~ ~ PRES~NTAflVES, Su o~r `X2~r]~:E ON IIOUSIN+ op THJ~ CoM~ii*EE AN1~I~G AND CURR1~NcY, TVa~hingto'n, D.C. . The subcommittee me1~, pUrsu t t re~cess, at 10 :05 a.m., in room 2128, Rayburn House `Ofli~ce ~3ui1 ~ ~ Kon~ William A. Barrett (chair- man of the subcon'imitt~e) presid ~. ~ Present : `Repr~seiitati~es Bar e t, ~ rs. Sullivan, Ashley, Moorhead, Stephens, Gonzalez, Wiçlnaii, a ~I ~ o. Also present : Repres~ntative ~ man (chairman of the full corn- rnittee) and Harvey of t~ie f~ill c mttee. Mr. BARRETT. The sul~ommit e wil come to order. This rnornin~ ~ur fir~t witn~s w 11 be Larry Blackrnon, president, National Association of/Home l~ ilçl rs. Mr. Blackmon, it is ~ert~inl~ p1 asure to have you here this morn- ing, and I observe you~ha~re s e ssociates. I wonder if you would be kind .enougii to in~roc~uce ~ u~ associates for the record in case some of the members ~ba~ dec ~ ask you a question that you may refer to them. Mr. Blackrnon, you hare a ~ ry close friend here this morning, the chairman of our full coi4rnit4e . e has a great deal of respect for you and I am going tp ask hi~n to introduce you to this committee. Mr. ~Jhairman, wot~ld ~ou I~e ki d enough to introduce the first wit- ness? ~ I I Mr. PATM~N. Tha4k iou, ~ ~ ~5 airman. First, I want to con~ratu~a he chairman, Mr. Barrett aad the subcommittee for do~.ng sue s lendid job on these thre~ important bills that hearings ar~ co~duc d~ today. Although a home1~uil4er d business~nan with diverse interests, Larry Blackmon lox~g a~go c~ id d to devote 70 percent of his time to civic, church, and NAHE ac1~i it~. s. As a national officer of N IT much of hi~ time is now spent in WashinØon, the association, where he frequently meets with ~al Government. He still r ~t deal of time to leadership activity in the First and Texas Christian University, of which heisa The Texas 3-i Blackmon for As owner and ducts building Commerce has frequently honored and community Jaycee work. )n & Associates, Inc., he con- Texas. The business, which 503 PAGENO="0510" 504 DEMONSTRATION CIflES AND URBAN DEVELOPMEN was based in Mineral Wells, Tex., ~or many years, now as head- quarters in Fort Worth. The company builds homes ranging from $9,500 to $25,000 supple- mented by extensive activity in the n~ultifamily housing fiel . It is also active in land developing, eornm4rcial construction, and `nterna- tional housing projects. At 42 years of age, Blackmon has been in the homebuilding Ipusiness for 15 years. He is a native Texan ~ho returned to his hon~e State after working as an economic adviser in the State Departr~ient in Japan after World War II. In 1961 he made four trips to Latin America for the State I~epart- ment to assist Latin Americans in estab~ishing housing prograii~is. He was named NAHB's outstanding ~egional vice pre~ident \n 1961 and became a national vice president, ~epresenting Texas and Okla- homa in 196g. He served as national vice president ~nd secretary in 1963, s vice president and treasurer in 1964, and fir~t vice president in 196 This is his eighth year on the NAHB executive committee. Blackmon is a past president of the T~xas Home Builders As ocia- tion and a past director of the Fort Worth Home Builders As ocia- tion. He was chairman of the NAHB committee on the Federal ous- ing Administration and the Veterans' Administration in 1961. He attended Texas A. & M. College. Mr. BARRF~TT. Thank you, Mr. Chairrn~an, for that splendid i tro duction. * Mr. Blacknion, we, of course, want yoi~i to feel at home and l~e as comfortable as you possibly can. If yo~ decide to read your si~ate- ment in full, and we should like to ask you questions after you c~m- plete your statement, it will be all right. ~ If you would like to read it in part and have some of the questions asked at that time by the various members of the committee you may do so with that appro ch. Whatever you choose to do, we will be glad to abide by. Mr. BLACKMON. Thank you, Mr. Chairm~n. STATEMENT O~ LARRY BIAOKMON, PRE~I]YENT, NATIONAL AS 0- CIATION OP ~ HOME BUILDERS; ACCO~PANIED BY LEON WEINER,. :FfltST VICE PRESIDENT OP ~HE ASSOCIATION; D NATHANIEL H. ROGG, EXECUTIVE VICB PRESIDENT; AND HE - BERT S. COLTON, GENERAL COUNSEL Mr. BLAOKMON. I especially want to thank the dean of our Tex s delegation for his introduction of me. I w~s born and raised in hi~ district, grew up there, and have looked to hi~ outstanding leadershi for many years as a guide and symbol. He ~ias inspired many of u from that east Texas area to become acquainted with our Federa Government and i~s activities, and I am most j~leased that he took tim from his busy scMdule to make the introductjon that he did. Mr. BARRETT. Will you introduce your as~ociates, please, for the record? Mr. BLACXMON. At this time I would like to introduce those at the table with me. I have with me Leon Weiner, first vice president of our national as- sociation and legislative chairman. He has been a close associate of PAGENO="0511" DEMONSTRATION CItIES A D U BAN DEVELOPMENT 505 1 - cerne1 a number Issoci a~e~ c+nsel for the ~ ment, `ou attachme rec I- ticular Builden tachmeri -~- Mr. tion C with sorn did last ~ the so-c~.~ sions which Before di~ cussii to your at ition t building i housin market )artr comp~i the p tinue high, climbed t' savings institutio amendment to re The seconc1 "~ Notes p be- have mci i in ising Act w ~ we on those par- on of Home ~ume that the at- position in detail, It is so ordered. U, the Demonstra- ment Act of 1966 we oppose, as we the same reasons, rnent agencies provi- on in the monetary s and builder services s,and ec omic ~ the flow of ii a result of ationof I At this and Associ- L, to go through my testi- ~ms which I will indicate as 1 limit rn speets oi nphasis. ~ d to show on latest issue of the Economic News conomics department. The section ~mmences at page 3, is particularly ~tiori lo~ max tobec on cer~ficates of ~. from 4 ~ ~ all the percent. I attach ~ts ~ and II-~B two recent st illustrate what is g~in~ on. I I As in 1957-of unhappy a~d unlamented memory in our industry- savings are again being 1 o ed, indeed, encouraged, to flow from PAGENO="0512" 506 1~EMO~STRATIOT.T CITIES AN URBAN DEVELOPMEN mortgage lending institutions into other forms of credit. ithout its fair share of available credit, the h&iebuilding industry c nnot re- build American cities, cannot adequittely provide for prope commu- nity growth, and, most important of all, it cannot continue t provide good homes for Am4~rican families ati4~asonab1e prices. As a result of our industry's difficufties in the recurrent tig t money crises of the 1950's, we urged at that ti~ne that housing be give a voice ~ in the couhcils of those who set nati~ial policy which dete me the a1loo~tioii ~f credit resources. We we~e amongthe early adv cates of a Cabinet ~tatus for ~ housing to provi~de that voice. Nothin in the recent actiOns which have so seriously ~ffected mortgage credit affords any basis for confidence that the bitter ~Iessons of the first two ostwar deoades have been heeded or, for that thatter, even thoroughly under- stood. As I am sure the committee understands, our enthusiasm or the pending legislation-which can have littLe significant effect for t least several years-is somewhat tempered 8y our very real concer that, under curreflt money conditions, the pre~ent productive capacity of our industry wi1~I be sharply curtailed. W~ may not even be able t con- tinue to prowide homes in the volume produced during the p st 10 years, much ~Iess increase our productioi4 to meet changing condtions in our society. Our comments on these bills are made, therefore with the reservation that the problems of basifl mortgage finance no con- fronting our industry are of immediate ai~d vital importance. e are urgently concerned. ~ DEMONSTRATION CITIES ACT~ (H.R. 12341) NAHB supports this bill because it rec~gnizes the need for a tart toward a cooi~dinated approach which wtould rehabilitate peopi as well as structU]~es. This seems to us entir4ly logical. Certainly, it~is simple commonsense to a~tthmpt to demonstrate hat focusing upon a blighted area, in coordin.a~edfashion, the vast va ety of available Federal aids, rather than scattering them in a "shotg n" approach, will accomplish more for slum areas than the people ~ ho live in them. There is some reason to contend that su~cess in this aspect of ~he program may very well substantially red*e the necessity for lar~ge public housing and urban renewal progran4s. A higher level of ec~u- cation, and con~equent higher earning poker and employment ai~id other opportunities provided by the Fede4al programs coordinat~d under the bill, should inevitably be reflected tin ability to obtain bett~r living quarters ~md in increased pride in irtaintaining them in goc~d condition. . WTith respect to the criteria established in the act for the type c~f housing program required to qualify for assistance under this bill, ~ particularly applaud those provisions which would give priority t good design, the maintenance of natural hist~rical and cultural char acteristics, use of new and improved teehnol4gy and design, and th use of cost reduct~on techniques (sec. 4(c) (2) and (3) ) . A substan tial part of the bu~lget and energies of our as~qciation for some year have been directe~ toward cost reduction a4d the improvement of technology, design~ and environment. We believe it highly desirable that all Federal hotising efforts be required to *ork toward these ends. PAGENO="0513" 507 DEMONS:TRA~rION CI~IES AN U BAN DEV~LOPMEN~P In this connection, i~enote ~1so t~i t .R. 13065, the Housing and Urban D~ve1oprne1it Am~n~tments ~ 1~G6 in se~t4~i 106 also covers this same subject. As stated in the ~e tiO -by-sectioli summary of that bill, this sectio~i- / ~ ~ Would establish a prograna i4o ~ e~ieour~ e ~ ci assist the 1~ousiug industi~y to reduce the cost and improrvé tI~e qüa1it~k cf ousing thi~outh , the application tc~ home co~istrnction and reh~bf~!tation ~ a~ ances in Uecbno1ogy~ ~ ~ This program suggested by this/s cti n, realistic~li~ conëeived and effectively pursued, coii1d,~ w~ s~b~n~t~ ave ~ tJ~ Federal Gôvç~rimient ~ and the Am~ericaa~ public ~iany ti~n s t~ cost, b~t only if cast in the mold of Federal assistance to nö~i ov rnniental ttgeIici~s and. bodies of all types, including n~ive~iti~ a d nonprofit aM other private research groups. * ~ I ~ ~ . : ~ We therefore recommer~d that s~c jo 106 Of ~IR. Th065 b~ arn~ded to emphasize that researc~ therei4ri e be conducthclthrough nongov- eramental bodies or agei~ci~s, ai~d tb t a ~ Stit~t n such program be rnad~ by setting aside foi~ r~earqh i~ ~~tlf o~f 1 f~rcent of funds ap- propriated pursuant to 1~{.R. 12~t . * * ~. We also recommend that the/ ~ ô gress clarify section 7 of H.E. 12341 to make mor8 effe~tive the~ J~1 e of Federal Coordinator estab- lished thereby. ~ We bèl~ev~ an ~ ~ Of this kind is necessary if the manifold Federal prog$m~ ava~i b~ to localities are to be kept froili complete confusion in actioi~. 1~ ~è nothing in the bill which would give the Coordinator any 4utie~ i~ owers other than to advise local governments how most eff~ctiv~l t work with Federal grant-in-aid programs. We sug~esi~ that th/is b elaborated and clarified by .com- ment in your committe~ r~por n he bill. In this connection, tI!~ie title ~ ~ e eral Coordinator" may be unfor- tunate. Perhaps the true fun t on of this Office could be better ex- pressed by the use of a name ~ ch as "Demonstration Coordinator" or "Urban Program Coorclinat r" tJRBAN ]~EVELOP N BILL (U.R. 12946) As I indicated at t~ie outse f y remarks, we vigorously oppose title II of this bill bul~ suppor it~ s I and III. Title II again brings before the Congress two pr o~s is which it has already rejected. These are mortgage i*urance f r s -called new communities and direct Federal loans to enco~irage f~ a ion of State and local governmental agencies to engage ir~ the bu~i es of land development for housing. Mortgage inswance fOr nefw co munities : This is the third year in succession this proposal has /b ei~ advanced. It was rejected 2 years ago. . In 1965 a liin.i~edvers 0 b came title X of the National I{ous- ing Act with the or~ginally p o osed $25 million limit on the maxi- mum loan, fcir any o~ie proje~t at any one time, reduced to $10 million. The bill beforeyo~~. ~gain atI~ m ts to increase that maximum limit to $25 million. Furth~er, it ~ ld grant special benefits to the larger projects, not available even /t a roject as large as $10 million, in the form of~a longer loa~ n~atur~t ~ d access to FNMA special assistance. 1~\Tith those excepti9ns, titl lready provides everything proposed by this bill. As I said earlier~ we tes. i $ against thjs last year and the record so indicates anç~ I ~viljnot e a~ rate because this will be filed for the record. 60-878-66-pt. :~-~-33 I PAGENO="0514" DEMONSTRATION CITIES AND URBAN DEVELOPME T We believe these reasons are even more cogent today sin e the Con- gress last year provided, in siiffici~t form for every subs antial ex- periment, what is here asked in 4xpanded form even fore that experiment can get started. Ever~thing requested in thi proposal can be d~ne under the existing 1egis~ation except possibly t put Fed- eral credit behind a few projects of huge corporations. e believe this better deferred at least until the results of operations nder last year's $10 million ceiliug can be evaluated. Gentlemen, at the present time the program is just getti g under- way. There is actually little or no mortgage insurance program presented under title X at this time, They have some req est.s for feasibility studies and things of that n~ture but it is not a prog am that has been tried or has had any experi4nce. We think time s ould be given to find out just what is going to take place before emba king on an expanded program. . On the ]~and development agencies, ~his proposal, as we ur ed last year, would inject Governruent. deeply, irrevocably, and on a inevi- tably expanding scale into the busine~s of land development as dis- tinguished from the present system of private development f land iind er local community regulation. The proposal raises fundamental questions of the philoso hy of Government. in relation to private bpsiness. Last year w made crystal clear the attitude of the homebu~lding industry. At th t time, wesaid: The homebu~1ding industry is firmly (1e(1ieat~e(1 tO the proposition that overn- ment should r~ever do what industry ean (10 las well er better for itsel : that governmental action is nee(led only where 4here exists a private ent rprise vacuum or serious abuse ; and that Governmebt action. when determined neces- sary in the pttblic interest, should be taken In the least disruptive for and should remove impediments to private action, not supplant It * * We contend there is no serious abuse at. this time and it~ is not n eded. Our 1965 testimony appears at pages 552 arid 553 of the hea Sings on H.R. 5840. We listed specific reasoi~s why we were irrevo ably against the proposal. `\?~Te repeat and i~afflrm that. testimony. We urge the Congress to reject the land ag4cy proposal so firmly s to preclude ann~a1 discussion of what we ~re convinced would, at one stroke, destroy the system of private owne~'sliip of land as w~ kno it. Title IV of this bill would provide a sy4tem for grants for so-c lIed urban information centers. It would be ltelpfu] to local coinmiin ties I 0 have available the type of program inf~rmation contemplated, but we believe it~ preferable that this information be made avail bie through the coordinators to be provided under section 7 of H.R. 12 41. In our 0i~inion centralization of such information in the coordina ors would help avoid the proliferation of Federal sources to which I cal communities must resort to obtain in~ormation about hous ng programs. ~ Additional s~gestions : I refer to attacl$n.erit A, appended to t is statement, for al detailed summary of our ~views on H.R. 11858 a d H.R. 9256. In addition, as attachment B, I submit a~ list of suggested amen - rrients to the National Housing Act, togetherwith the reasons for eac These would : (1) Authorize FHA to insure mortgages on college housing. T e substantial increase in the size of student b~4ies in our institutions f 508 PAGENO="0515" 509 DEMONSTRATION C~TI~S R1~AN DEVELOPMENT higher learning and th~ prospect t~i t ~ is trend will continue, r~su1ts in a demand for student h~using ~ ic the Federal Government has long recognized in the forth of dine t 1 ans on easy terms to assist in the construction of dwell4~g seco~ ~ o ations for students. By pro- viding mortgage insurance, the 1~ eral Government could, without .~ substantial expenditure, greatly i~ ~ se the assistance it is now pro- viding for this purpose. / ~(2) Increase to $3~,OQQ the m~i~ mpermissible mortgage limits for single-family homes~tn~r th~ ~ A section 203 (b) regular home ~ mortgage program, ~ secth4n ~2 s ~ ~ men's. program, and the section 234 home mortgage conap~ii~ium ~ o a~m. ,~ (3*) Increase mortgage' an~pun $ ~ ~ er the.s~ction 220 programs for urban renewal area~ to faMli$ate ~ ~ ~ a1~ rental proj~ets~ (4) Increase from$15,000 to $ ,O 0 the maximum loan FITA could insure for veterans wi~h~ut dow ~ ~ ent~~ ~ ~ (5) Authorize tI~eJ~H7A to ins e ~ ortgages on vacation homes. (6) Increa~e the ~ ~m~un~ ~ an te of title . I property improve- mentloans. ~I ~ ~ ~ ~ (fr7) Facilitate, constr~n~t~on ~ s~r~ ii. rental projects by eliminating the cost, certification re4ui~eme~it j~o proj~cts of 24 units or less. (8) Permit~ sale of u~rban re~ ~ ~Ian.d for sales housing for lo~v~ and. moderate-income famili~s/ n h~ same reduced basis presently available for rental or coo~er~i ~ ousing. (9) Reactivate the se:ot~on 8/~. : .. rmed Forces rental housing prQ- gram., I ~ ~tr. Chairman, witl~ the at~ cI~ ents that I have indicated,~ this concludes my statemen/t before/~voi~. I would be most happy to answer any questions that yoi~t oi~ m~i~i e~ ofyour committee might ask. Mr. BARRETT, Thank you~ ~L . lacknion, for your very fipe state- ment. Our genflelad~ th~s m r i~ has a very important meeting siid she `must leave very quickly. b refore, I am going to yield to her. Mrs. Sullivan? Mrs. SULLIVAN. TI~an1~ you r. Chairman. Mr. Blackmoii~ on! F~bru~t ~ , I introduced a bill, H.R. 13063 which, for the first time, w~ ld provide a financing mechanism to encourage nonprofit organiz~tt ô~i to rehabilitate existing houses for saie-nOt for rental but fofrr sal to low-income prospectiye home owners at the very ~ow 3-pE~r en interest rate by amendment to see- tion 2~1 (d) (3) , the FHA 1~ ow market interest rate program. I have been work~ng on t~i~ E r some time and this bill represents the fruits of a lot o~ work l~ ~n , religious leaders, and civic-minded businessmen in St. ~ouis, aili 1~ the staif of the Housing Subeommit- tee and the technica[I bi~l-dr~ ti g assistance of the people in the hous- ing agency I would lil~e to hear, ~7o 1, whether you would agree with the objectives of the bill, and N~ , hether you think it is workable. Cóuld'I have you~ comm n ? Have you seen the bill? Mr. `BLACKMON. Yes, I h ye. I have to say to you that NAHB policy is estabiishe~I b~r on o~t d of directors, and this bill was intro- `duced after our boar~ me I st time. However, I would like to corn- nient on your bill and giv o some of the ideas that are personally mFne along with ~`ha~. tie i ith our policy, if you would accept it. ` Mrs. SULLIvAN. Iwoul ,p1:~ eciate that. PAGENO="0516" 510 1~EMONSTRAPION CITIES AN~~ URBAN DEVELOPME T Mr. BLACKMON. This bill would ~nake favorable finan4g under the section 221(d) (8), below market.~programs available for r~habili- tation ~uid for sale to low-income fathilies. It would make it a re~dity that we think it is very important andhecessary. For some years, NAHB has stressed to the committee, th impor- tance of rehabilitation-rather than cfompletely bulldozihg se tions or neighborhoods. . We think this is more proper a wa~ to handle this progra . Two weeks ago, I spent some time in Harh4rn in New York, studyi g a re- habilitatioh program that is going oi4 there that is very exci ing. I think it will do a great deal for our lo~-income families. . NAHB ~or a long time has been str4iigin advocating home owner- ship. Now, I have one suggestion, afte~ reading your bill, that would like to make, if I might. On page 5, lines 21 through 25, subseetion (f) would forbid e~itirely a transfer of any dwelling financed under this program except\ to an- other low-income approved family. I think this is to be comn~ended, but atthe same time I would like to say, ~rhile I agree with the objective behind this subsection, it seems to me t~iat instead of absolutel~r pro- hibiting the sale, unless it is to a low-inc4nne family, we might n~ake it available to a low-income family, or to 4ny approved purchasei~, who would then be charged at the full mark4 rate. If a family was not a low-income Eamily, then it would pay the going FHA rate. You broaden your situation and you might fi~id that if you have a lo -in- come family who doesn't choose to buy and another family does, they would pay the going rate and it would not be using the below-rn rket interest rate. Mrs. SULLIVAN. What we had in miM-and this has been dis- cussed-was that we do not want these lo~ interest rates to be use for anyone except low-income families. Bui~ if the original purch ser, under this mortgage plan with the low interest rate, wished to sell, he could sell to someone else on the open~ market but would be ~ ro- hibited from passing on the low interest tate. The mortgage w uld have to be financed then on the regular niarket at the going inte est rate. Mr. BLAOKMON. I think we agree-us I Fead it, your bill permi ~ed selling only to low-income purchasers and I wanted to broaden 1~his just enough to make it available for low income or another, and t~at anyone else that purchased it would be required to pay the full mar1~et rate. This was true for the Tulsa demons~ration projeot-they h~d a low market rate interest-~but where the ~family got to where th~y could pay the going rate, they were require~l to pay that rather thin getting the benefit ; and this would releases money available to ta1~e care of more low~income families. Mrs. SULLIVA~. What I think we should~ plan to do, in the co - mittee report, is to be very explicit that this low rate is intended on y for those who met the requirements of a low-income family. B t in the event that such a family later sold the property, in order for th purchaser to get the advantage of the low interest rate, it could oni be sold to a family in that category. But if the owner wished to sel to anyone else, he could still do so but not pa~s on the advantage of 3-pei~cent mortgage interest rate. I think titiat could be made ver expli~it in the report. We did not want to l4ave it wide open in th~ bill and then have It misused. Our hope was that we could tie enough PAGENO="0517" DEMONSTRATION Cfl~IES AN U~ AN DEVELOP1\~tENT 511 strings to it so that it is not thisnsed, hiiie leaving it open for further explanation ~ in the report, t~ ii~dica~t thjat in the event another low- income family did not buy it~ it pou1~I e ~bld at the going interest rate. ~ Mr. BLACKMON. Mrs. Sullivan, I /t in~ we are in full accord-it is just the mechanics. I think you s1~ ulc~. be commended. I have been dealing witl~ low-in~o e/ families for many years and if you give them hope, anc~ gi~re tI~e ~n opportunity down the line, it is amazing how some of them wi~1 str~iggie to become home owners. We even encouraged, if y~u will ~` e~nber, in the rent supplement program, that these peop~e who ~r re / receiving supplements would also be able to, at such time as ~h y /cc~uld qualify, purchase their home-there are many-there are ~ y ~iumber of ways that this could work, either in a condom~nii*m o~ ii~le family. You could take a condominium apart~nent i~ ~hich] t e~/e units would be sold off and it is commendable to try to g~t t~ese ô -i~icome families to own their own homes. I Mrs. SiJLLIVAN. Mr. Blacl~mon helexamples of what is being done already and the proposals being m~de by this nonprofit group at home are really the n~os~ excitii~g th~ng that I have ever seen for a rehabilitation program. I I Their belief is, as you ha~re m~ tic~ned in your statement, that it is time now to give peoph~ a chai~ 4x~ own something~ We recognize now that you just can±~ot reh~ i1~ate only the house. Y~ou must rehabilitate the family also, a4 ei~courage them to use every self- help program. The no~iprofit ~r u~ in St. Louis has so far rehabili- tated some 41 houses *ith pri~ta e funds and have sold them to low- income families which could r~o p~ssibly have bought homes under any other circumstance~. I I * ~ . This is a technique for rebui~d n~ the whole family. When Johnny begins to saw on the dbor or be in~ to abuse the plumbing, papa will stop it right away because he s ys,/ "This belongs to us, Johnny. Do not destroy your owi~ p~opeift ." I I think it teaches responsibility and sound values. , They c* b~y these reconditioned houses and eventually own them, rather than fhaving the occupanth subsidized in rent either through t~ie rent Is pj~lement or some other program, as tenants who have no personal ~t l~ in the property. I am very happy ~hat youj eellthis merits passage. Mr. BLACKMON. It/is very ~r rt1~iwhile. Mr. BARRETT. Mr. Blackn~o , J~ have just two very short questions. I notice on page ~6 you ii~ ic~tte that the name of the coordinator could be changed to ~ demoi~t.ration coordinator or an urban program coordinator. What I wou1~l uk to get from you, if you would tell us what you think of ~t be~i g ptional or mandatory? Mr. BLACKMON. T wou]dJ eel that it should probably be optional. I contend that the ~ederal ~ or inator could be called anything other than a Federal cooHii~atoi~. B ally, what he is doing is coordinating the program withih the c~ m nity-whether he be called a demon- strat~on coordinatqr-~this~ iv s him more. of a title as to what he really is and the Federall a p ct has a tendency, especially in some parts of the countlry, to ii~h ly other things that are not desirable, in my way of thinki~g. A d I ave had people express themselves to me along these lines. Mr. BARRETT. )~ou wo ii 1 ave that flexible, I assume? PAGENO="0518" 512 DEMONSTRATION CITIES AND URBAN DEVELOPMEN Mr. BLACKMON. YES, but I woul4 * highly recommend th t we do away with the "Federal" and call it ~n~y other kind of c~ordi ator. I think hisjob would be the ~ame, h4ping coordination amo g these various departments, but I think thi4t you could find other wording for that. ~ :`t Mr. BMuu~rr. We are always ple~sed to hear from yo r great iiidustry. . Let me ask you a question on the hOusing outlook. Housi g con- struction seems to be one of the few components of our econo y that is not in a state of boom. Do you think~that the higher level of terest rates is cutting down on housing dernan~ts ? ~ Mr. BLAOKMON. We have material ~n this in exhibit I-A. that I referred to that gives a pretty complet~ picture and I attache it for the record a~Jong with my testimony. We can give you additio al in- formation. ifl the form of a memoran4um or something else f you desire it. Today's nioney would raise the cost o~ a home to the buyer a d, in turn, the mortgage loans, and it cannot ~help but do two things dis- qualify some of the buyers and at the sthne time increase the Co t of that product, which I say will have the~ effect on the housing tarts in the country Mr. BARRI~Trr. Thank you. Mr. Fino ? Mr. FIN0. Mr. Blackmon, one thing I w~nt to ask you: Doç~s mortgage credit alone account foi~ the difficulties you md cate the homebuilding industry is faring ? ~ Mr. BLACKI~ON. Mr. Fino, I would like ~o ask Dr. Rogg to corn ~ ent on this at this tirne~ Dr. Roco. Itis a vital factor in today's inimediate situation. T ere are many other problerns which have kept t~ie industry from raisin,, its volume. A number of them we are attacking within the industry be- cause we think they are problems which industry itself ought to be getting to. ~ ~ I would like, just to give you a short list ~f them, and we can el b- orate on them. ~ ~ ~ One of our major problems is that we are~not very effective as co - petitors for the ~onsumers' dollars. We hake problems of selling, e have problems o~ building codes, problems 4f putting the findings f research to work. We have problems of understanding the motiv - tions of buyers, we have problems of arranging for our labor suppl in such fashion that it does not create intolth'able delays in buildin housing. We have problems of this kind which the industry itself i attacking. But the whole problem of mortgage credit which today occupies ou attention is one which we feel we cannot hai~dle within our own in- dustry. We are at the moment, subject to thelfact that the only tools being used to resti~ain the overall economy ar~ the tools of monetary policy. Tools uset in this manner have one i~mpact-they affect the weaker competitors in the marketplace. The ~veaker competitors are our customers and t~he small businessmen who i4ake up our industry. Mr. FINO. Do you realize that a majority of the demonstration city funds, if authorized and appropriated, will go to urban renewal activities? Dr. Roco. Yes, sir. To the redevelopment of our cities. PAGENO="0519" DEMONSTRATION CITIES AND R AN D1~VELOPMENT 513 Mr. BLACJ~MON. As I un.de~stand, t ~ re wo~i1d be ~oss1b1y a thtal of SOfl~3 60 cities designated for t1~is dem n ti~ tion program. Mr. FINO. Do you feel the ~mount ~ hat ~ as been sugge~~ted or recom- mended by the Secretary of $2J~ bilF ~ ill be sufficient to cover the 6Ocities~ ~ I ~ ~ ~ ~ ~ ~ Mr. BLACKMON. As I und~rsth~ud ~ I e rogram that is being recoin- mended, it is a demonstration progr start with and they would sta~ making progress ~ith/ th~ rn e3r * and be able ~ to evaluate the amoi~nt of good that is cor4in~ fro it and, if~ pc~ib1e, they would then come back for additi~i~al mon ~i if t proves that~the demonstra~ tion is worthwhile and l~hey1are acc p~ hing what th~y ~et out to do. Not only for the 60 cities, ~or the i ould be possible to expand it into even a larger area if it ~as ~ wo ~ ~ ile p~'ogi~am. Mr. FIN0. Mr. Blackmo~, `ast eI~ we had some people testify before this subcommittee ~nd the e e m~yots, the mayor of New York City, who said they *ould ne * &~ i~ast $~ billion and the mayor of Newark said he wouldn~d ~2OO ll~ n. ~ When yOU look at thes~ fl~ure ,: tli t has .alr~dy exhausted ~ the proposed authorization. ~ . Mr. BLACKMON. I can t~nd'èrsta ~ at the d~sire is to do the full job, but as was indicated~ t1~is I 4 monstrat&on program. They do not hope probably in ~hi~ on a~ icular bill, to solve all of the problems, but to get a p~og~am ~ ~t d and ti properly evaluate it and then, if they can ju~tif~r th~t t e money they are spending is creating a worthwhile ca~use, th* I ~ eli~v~ that you, *as gentlemen wh~ sit here year after y~. obse~ itz th~e programs and watching closely over them, ~ill~ g~ve ~ier4 d itional rnoney.~ If they do not make it worthwhile, ~he~y~i wi~ ~P. bably ~say ~that they have taken the wrong approach. ~ I I ~ ~ , ~ I have great hppe tha~ j~ie d~ oi~i tra~tibi~ ,pr~gram will do a lot, as Mrs. Sullivan said, no~ ~i~ly j I~ ~ t~ rehabiljtate the housing but also the peip]e, and upgrade th~ who e a~ ect of these areas. Rather than a whole city, they will ~aav~ to p ck ~ut c~rt~in areas in a city and start to work and see whit c~tnbe a . cO pushed along these lines. Mr. FIN0. Ge~ting~ba~k to ip f ~n rite subject'of disagreement with the title of "Federal C~rdinat r ` hich I ha~re referred to as a pos~ sible xmmissar or czar ~n this i u~ ry, woUld you advocate that it be "Expediter" insteE~d of `~Fe~iera oo dinatQr" ? Mr. BLACKMO~, I th~nk tha ~ p obably a good role for him~. As I understand him, he i~ go~ing ~ ~ e/ coordinatOr between the various agencies to expedite-a/codrdi a or of some type. Whatever wording or verbiage you might `v~ant to ~ e ~ is alright. Mr. FINO. I would assume ~ at his function would be to cut red~ tape and not create red~ap~. ~ Mr. BLAOKMON. I think tha ou d be very desirthle. Mr. FIN0. Would you sup 0 i ~ move to have legislation provide for local nominations pf the c r ~n tor from whose number the Secre- tary could appoint? `Would ~ u upport a move on the part of the subcommittee to have legislat ó ~ r ~ prc~vision in this bill providing for local nomination of th oó dii~ator from a number of names submitted to the Seer tary fo is approval or hi~ considera~iion? Mr. BLACKi~tON. F om a c 1 `omination of people living within that community ~ PAGENO="0520" 514 DEMONSTRATION CITIES A]~D URBAN DEVELOPM1~ T Mr. J~INO. The. theory behind th~t being that there ar problems unique iii a particular city and ever~i city has different pro lems, and the one w~ho would best know what kthe problems are is a p rson that lives in that city. . A suggestion h~as been made by the ayor of Newark, the mayor of New York City, and the mayor of D troit and Ohicago-r-they felt that i~t should b~ a person that is full familiar with the problems with the locale, within the. city. So t e recom- mendatioi~i has `been madein so many~words that the mayor o the city iñake the recommendatioiito the Secr4tary of th~ Departmen suggest- ing: a list of people from which th~ S~cretary can~piek. Ho do you feel ab~u~ that! Mr. J3r4OKM0N. We don't have poi~cy on this, I will corn ent in- dividually if you wish. I see that you could . be getting into a lot of redtape the e when you start picking somebody that fits~ the local mayor's. desi e. We have some programs right now, I understand, where there is a ques- tion as to whether the mayors are going to run the program o maybe the Federal agencies are going to run ~he program, and you get into, it seems to me like, all kinds of contro~versy will result at tha point. I, see nothing wrong if a man knows 4he local situation, but e may not . know a. thing abGut the Federal p4ogram involved and y u have to have a øombination of the two. ~ou are going to have im as knowledgeable as possible about the lop~tl situation, but you ar going to have him knowledgeable also as to i~hat the Federal progra s are all about in order for him to be effective and efficient in pullin these programs together. . ~. . .1 like the idea of a coordinator or expediter among these ag fobs. And . whether he is outside the commuithy or inside the comm rnty, as long as he meets certain qualifications, I would say that it ould be the prerOgative o.f the Secretary. t .. ~ Mr. FIN0. You believe that programs ~rtch as land insurance ~ ould be tried out on an experimental basis a*d the results evaluate and judgment made before full-scale combin~thon-wide activities ar un- dertaken, is th~at correct ? ~ ~ Mr. BLAOKMON. That is correct, sir. We do not know of any title x land insurance being issued at this ti~ne, and until the insur~nce program is issued and we find it workable, I would say that we ~ieed to find out more about how they are going to operate before we start doubling up o~increasing it. ~ Mr. BARRETT. The time of the gentlem~n has expired. . Mr. Ashley ? Mr. ASHLEY. I think with respect to th~ last point, Mr. Blackn on, that we got testimony from the Secretary .4hat there were about 6 or 70 applications that were under process at tl~js time. Mr. BLACKMON. I believe that, sir, wouM be in the preapplicat on stage because I happen to be one of those ~ applications, but no co - mitment. Mr. ASHLEY. ~ You are speaking for the association, you are agaii st it, but you areapplyin~ under the program ? Mr. Br~cKMoN. We are against the increase at the present tii e up to $25 million of land. But since th~ pr4gram is in existence, y u will find m~tny of our members p~rticipating~in the program. We ju t think we should find out what it is all ~bout and whether it s workable. PAGENO="0521" DEMONSTRATION CITIES D UJ~AN DEVELOPMENT Mr. ASHLEY. We are t~t1king b ut twO different aspects here, one is the State agency ~xid the othe s t e progr~m for the private de- velopment ; is that not so? Mr. T3LACKM0N. Yes, y~u I~ave o. Mr. Asm~Ey. I do. not quith un e st nd why you are so much against the ` State agency if it is/ pursua ~ to State la4v. After all does this not just act in an interi~ii basis rO iding the mechanism by which land can be. acquired at ~Srobabl o~ cost ~ud si~ibsequently passed on t~c~ private sectors ? What is the tt~ with this? . Mr. BLAcKMON. Wha~ is the tt r with it is simple. It is putting the State into the busine~s o~f lan e elopment when we find that t1~ere is not a need for it and the pri ~i e ector is able to afford to do it. I think around Washingtbu here u av~ a fi~ie example of that. You have some 12 or 13 ne~v town ei g created . where they haye gone out and bought tremen4ous tra t ~ land at a price they felt they- Mr. Asuu~y. Who isi"they" ? Mr. BLAOKMON. Th~ comm it -the new c~m~unities around here. Mr. ASHLEY. It is h~rge dev 1 p rs, is , it not, . Mr. Blackmon? Mr. BLACKMON. Yes~ priv~~t . . Mr. ASHLEY. All right ~ if ~ nt to say, inasmuch as we live in a large country and w~ h~ve 1 ~r e evelopers, let the large developers do it,. even, though what this . an is that you preclude the small de- veloper from partici$ting in ~ i~ kind of prog1~m, then that is one answer. But, I think you ha .g~ t to recogx~i~e that this does put a real burd~, ~n exch~sion on t ~ arge d~weloj~r, th~ fellow who is doing the Baltiwore one, and ~ nes out west where you have insur- ance companies, where yc~ ha ~u nufactiiring comp~nies, all getting into land deveiopmeiit. Is thi ~ ot o ? . Mr. WEINER. If I n~ay, Mr. ~ o1~ ressman. I believe our position is ti a s~ ce title .X, which already provides FHA land insurance/ foi~ acq . `si1~on and development, presently pro- vides the vehicle for the sm *1 d veloper and builder to acquire sites under a program of ~Fe~ra1 i si~ ance which is part of the answer to the question you are raising. The question ~Of h~rge acq i iton of land by a State body or State agency, municip~Ji1~, or cou t rovides the n~eans by which this land will be takeA out of the pri a ~ ~trepi~eneur~l market and put in the hands of the governx~iental a n~ es and disposed of at their discretion, which may, at this ~oint, be c rt inly questionable in light of the zon- lug practices of ex9lusion f pe ple of loW income from many corn- munities, or restrictive ~nd é i. ~ ented ty$s of zoning practices, which we have seen. So that the es ionable factors that we are concerned with, among ~therd~, i~ th t th se State agencies may not have the method of deterinin~ng wha he arket needs are. In terms of p1ani~in~ Mr. Asrn~y. Ar~ yQu sa~ 1 ~g hat there is a danger here that we may not get all incthn'e l~v~is hit he e developments? Mr. WEINER. Pr~cisely. Mr. Asm~EY. A~e you s in that or are you saying in your gross points or in your. private e eJ ~rnei~ts, that you are responsibile for it, that the develdpers in t ie private sector are responsible for it? You have this integratloli ~)` Ifl omes ? That is th~ most preposterous thing I have ever heard. 515 PAGENO="0522" 516 DEMONSTRAPIQN CITIES AND~ URBAN DEVELOPMENT Mr. WEtNi~. At the present time, ~4hen Our industry is' loo lug `for all market~ that are ueede~ to satisfy bur economic thirst in erms of the expans~ion of our industry, that w~ are vitally concerned, s dem- onstrated by our support for rent supp~ements, as demonstrate by our concern with the housing `of low-incoi~ie families, which has en in- creasingly a matter of vital concern to us as an industry, that we are concerned with some of the restrictive practices which the Sta e agen- cies have employed. We do not con4one the fact that in t e past there has been the kind of e~clusionary~practice by some of the people who operat~d in our industry. Mr. Rouse, in Columbia, has made a 4eliberate, concerted elf rt as a private entrepreneur to provide the br~adest cross section. Mr. AsHLEY. I could not agree more.~ Mr. WEIN~R. Most of us who have been doing this have been doing it also in our own smaller developments. Mr. ASHLI~Y. He suggested one-half o~f 1 percent of all funds be re- quired to be spent for housing construction, research, and de elop- ment. Does this , not appear to be `a ra1~her large amount due 0 the fact that certain research is being con~ucted on a regular ba is by such organizations as the NAtTB ? ~ ` ` ` ` ~ Mr. BLACK~ON. I do not believe this j~ too much. If. we are oing to accomplisl~ what needs to be accornp1~isbed, I think that thi is a necessary am4unt. ` , , ` ` ` ` ~ It. has' been~ prqv~n ii~i days gone by `ifl some of our other Fe eral programs, such as the Federal highway program', to where thi re- search has , contrib~ited a great deal to the improvemnt and, qu lity `of the roads, that are now being constructed. . We think that this will have the same effect on housing and not'only that, but, it will a low products that heretofore have been proh~ibited to be , used that will consequently make a great saving and a g eat stride towar4 lowe ing it. , , Mr. Asrni~r~ I want to say that I think your association has re lly made a valuable and marked contribution n the field of research, ` It is one of the aspects-this aspect is not ~ s widely known as~ oth rs, but you are certainly to be commended fork, it. ~ There has be~en.. ~ ~on- tinuous over-the-years progress and the Ai~ierican homeowner sho~ild knowaboutit. , ` , , ` ` , Certain members of the subcommittee suggested that the dem~n- stration city-tue requirement fQr cities-th~at they rebuild slum ar as. It is suggested `that this be usec~ for that. ~Would you or NAHB e- quire such a requirement ? ` , .~ ` , ` ~ ` Mr. BLACKMO~. Well, of course, our poli~y is to attack theover 11 problem of the ~ity, and I would say if a blighted area or slum is t e biggest sore in that community, then it would' be logical that that e attacked. ` Mr. ASHLEY. What you are saying is that there does have to be a broad attack which includes the downtown ~core areas as well as t e so-called slum area, which would be largely residential~ Mr. BTJAGKMON, Right. Mr. Asrn~r. Thank you very much. Mr. BARRETT. Mr. Widnall? Mr. WIDNALIJ. Thank you, Mr. Chairman. Mr. Blackmon~i can say, after reading t statement: and lookin at the economic re~ort, you have done your ho ework, PAGENO="0523" DEMONSTRAPION CITIES A 1) URBAN DEVELOPMENT 517 Mr. BLACKMON. Thank you. Mr. WmNALI~. I would like to a re with what Mr. Ashley has said, you have made a very coiist.ructjve co tribution to our hearings. I note that. you are in favor o i creasing the maximum for ]ow downpayrnent under the new FHA. pr gram. Mr. BLACKMON. For veterans? Mr. 1'VIDNk~LI~. Tl1hat is right. Mr. BI~AcKa~roN. Yes, we are, b ca se this is true of the downpay- ment as far as the veteran goes n we think it should be an equal opportunity. It makes sense to av a coordinated activity. Mr. WIDNALL. That was a p og am that I introduced last year and it became part of the housin bi 1. At the time it was introduced, it had no downpayment, up to $2 ,O 0. Mr. BLAOKMON. Congressman idnall, there are certain areas of the country, because of the high an cost and because of other factors, that makes this very desirable. e support it wholeheartedly. Mr. WIDNALL. You are awar o the fact that Congressman Bar- rett and I have introduced a ne a endment that would make entitle- meiit possible for those who hay .u ed up their VA preference ? This would include about 6 million or , I believe. Mr. I3LAOKMON. Yes, we hay scussed this and we actually were very interested in this amendme t o the bill because wethink that it is discrimination against those ho have used their GI rights and- ~whereas iii the. FHA progra y, u can use it and use it agaiu and again-and it makes it consist nt ith good management. Mr. WIDNALL. I have been eli hted to hear from FHA that about 10~ percent of their housing s art right now are going through this program and I am sure that i g ing to multiply during this coming year. . Mr. Br~AcIcMoN. This is jus ge ting started. As you know, it takes some leadtime-when the bill be ame law it took a while to generate the business. I think you wi s e a larger percentage as time goes on using this portion of the bill n certainly during this period of time with our housing starts down, it is encouraging to have as many tools as possible to help house the e pie of this country. Mr. WIDNALL. Are you f mi iar with H.R. I 3090, the bill that ~ I introduced on February 24, ut orizing the Secretary of the Depart- ment of Urban Deveiopmen to make grants for supplementing those for basic water and sewer f ciFties in suburban communities? Mr. BLACKMON. Yes, we et ally had our legislative committee the day that this bill was intr clii ccl, and we had already finished our business. Several officers ha e one over the bill which worild increase water and sewer grants fro 0 to 75 percent. This seems to be in line with some of the poli&es hat we have already agreed would he desirable ~ for example, in t e d monstration cities program. As you know, we have w ys been in favor of trying to provide facilities to the communities o that housing could be more readily made available. Mr. WIrNALL. In the u a development bill, the extra grants are ringed with prerequisites or planning. These prerequisites are not in the bill which I have ife ed. If. you had to decide between the two, do you have any prefe en e PAGENO="0524" I DEMONSTRATION CITIES AND URBAN DEVELOPMENT Mr. BLACKMON. On a bill, I think, it is always good to I ave-I should say it iS desirable to have good ~lanning and I believe ~ hat we need to encourage this more. I see nothing wrong, as I said arlier, with the inbrease of the amount of fin~ancia1 aid for these fa ilities, but I certai~ily am strong for well-plan~ned, programed, comm nities. Mr. WID~ALL. I do not mean doing a*ay with planning, but think the simple standards would qualify and my own bill would g ~erate quicker activity. This should be seriously considered. Mr. BLACKMON. Yes, sir. Mr. WIDNALL. I do not have any other questions. Thank yoi. very much. Mr. BARRETT. Mr. Moorhead? Mr. MOOJIHEAD. Mr. Blackmon, I wou'd like to ask you a litt e bit more about your attitude toward these co~rdinators or expediters Do I understand~ sir, that you propose th~tt we have coordinato s or expediters in ~ every metropolitan area 4d not just in cities ~ hich have been selected as demonstration cities?! ~ Mr. BLACRMON. No ; I think our testimony was concernin the demonstration city bill and it was dealin~g with those cities tha are designated as demonstration cities. That is where the focus is g ing to be at this time. There are, conceivably, some cities that would ave very little activity in Federal programs and, therefore, there w uld not be.a need for a coordinator. ~ I think first we should follow this exp~riment through to a p rnt to find out wha~t it c~n accomplish and whit. it costs to accomplis it, and then make a judgment as to what we ~hould do in the future on expanding ~it to other cities. It ha~ some n~erit of decentralizing, 1~ut *1 think fir~t we need to get the benefit of this experiment. Mr. MOORETEAD. I am glad to get this clarified. What we are saying is, for these urban ~ information centerS, t at they be limited to demonstration cities and those urban informatipn centers be handied through the coordinator, namely, the demonstT~a- tion city? Mr. BLACKMON. That is correct. Mr. MOORIJEAD. It appears to me that th~re will be a great ma y cities not sele~ct~ as demontratioii cities whi~h neverthe1~s will hay as they have to4ay, a great many Federal ~programs going on. t would seem to m~, to avoid duplication and ~void unnecessary dela s and so forth, that even in those cities, not demonstration cities, a c - ordinator might bt~ helpful. Mr. BLACKMON.. I have to go back to my earlier statements that thi is, again, something new and we need to feel, otir way on the thing. Now some of your cities that you are talking about that have a lo of Federal programs that might not be selected, most of these citie are fairly sophisticated and they are fairly knc~wledgeable or they have stafF that is knowli~dgeable as to the Federal jrograms, and they are working it pretty ivell as it is now. It was b~&ught out, I believe by one of the gentlemen here, that some of the cities were asking for al- most as much for their city as the whole d~emonstration program authorizes. They have some pretty big ideas. So, therefore, we again feel that we should go with the demonstration programs, but find out; what are the problems before we start establishing other offices around the country. 518 PAGENO="0525" DEMONSTRATION CITIES ~ D URBAN DEVELOPMENT Mr. MOORUI~AD. One of the wit sse that came before this subcorn- mittee suggested that the ~oordin t r e me, not out of the Housing and UrbanDevelopment Dep~rWient t e named from the Bureau of the Budget. What is your re~etiont t a ? Mr. BLAOKMO~, I be1ie~re j ans re the gentleman here awhile ago that any man selected sh~uld be al nowledgeable as to the Federal programs that are availab1e~ If e i going to be an expediter of as- sistance to the local people, then h s to know what these programs are all about. If he be local and und~rstañd t ~ ocal situation, I think he has got to be versatile enough to *ork wi h tl'~ local people. As far as `the Bureau of the ci et is concerned, as I understhnd, these programs are alre~dy und r la and they are merely administer- ing what we already ha~re in ex s en e, I can't see why the Bureau of the Budget should enter ~nto' it a t i~ particular point. Mr. MOORIIEAD. I am not urg g, am just searching for ideas. Some of the programs cOme ii o HEW, the Department of Agri- culture, OEO, or other depart n~ , and there is only one agency in Government that'has co~itrO1 ov r all of the agencies. Mr. BLAOKMON. Wh~reVer e Co es from, I think he has got to be responsible. Mr. MOOEITEAD. I p*ite agr e w th you. The individual, . if he is a good one, can do it no matter ~ e he cothes from. If he is no good, it does not matter where he c~ es from. I agree with you. Thank you, Mr. Chairman. I Mr. BARRET~F. Mr. Stephens/~ Mr. STEPHENS. To further/ ol~ w up on the question about the coordinator, it seems to me th~t i~ here is a coordinator, that it would' be more sensible for the Staje of Texas or the State of Georgia. to employ somebody th~t woul4 e vorking for the State of Texas or Georgia, instead of for the U*i e4 States, as a coordinator. And then he would feel, and I know, i]n G orgia, we would feel that they had somebody that was on their ~i e 11 the time and was looking out for their interests. It would' saifre ~o ~ e money fOr the United States not to have the coordina1~ors, an ` t `i~ik it might be better to put him on the State payroll. What do you think of that Mr. BLACKMON. ~Te ~tre f ii ate in the great State of Texas that our Governor bad the fores g t, hat he has `established an office here in Washington whicLh' h~e ha ta ed to try to Coordinate the activities of the Federal Gov~rnment it our State and I think he should be commended for tryii~ig to do t is. However, when ~ou get O a tate level, you find that there could be a Conflict-the' cOordina ,o i responsible, really, to make the pro- gram operate on a. local b s s, and work with the local citizens. I can see that if'you have ~ y programs going in a State-again it gets back to the lo~al gove m t and working closely with the local people-that he cot~ld do p o a ly a better job. If you have one State man, he may have a conifi t be~ ween the communities. Mr. STEPHENS. What I d ~n mind would be, as in the watershe.d programs. Those waters d I programs are community projects. They go through the State c mthittee'and work out pretty good, finally coming to the Fe~leral re ese~itatives for advice and co~insel. The 519 PAGENO="0526" 520 D~MO~STRATION CTTIES AND kIRBAN DEVELOPMENT fin~1 stA~ps are concluded by the Sthl conservation Service in Wash- ington. It looks like that would be a possible way of workin with these types of projects. . Mr. BLACKMON. I am not quite as familiar with your Stat . Do you have one FHA office in Atlanta co~ering the entire State ~ Mr. Smim~Ns. Yes. Mr. BLACi~MON. You have more than ~ie office? Mr. STE1'JIENS. We have a regional 4ffice. Georgians come there more freque~itly than is possible in son~e of the other States f the region. Mr. BLACK~ON. Where you have one ~ffièe., this could be a wor table thing. We have five in our particular St~ate and since I operate nder several offices, I get several different versions of what the little o~erat- ing book says, very frankly, and it could lead to some confusion. Mr. STEPHENS. I know what you me~u~. I just read in the paper this morning ~Where in spite of the fact tl4at we passed a bank m~prger bill, it is not being read by the Justice ID~partment like I ~ read i~. The other thing I wanted to inquire o~ you does not have a direct bearing on thi~ testimony, but before lon4 we are going to try t~ get an appropriation for the rent supplement.~program. It is my under- standing that the National Home Buildei~s Association has endo~sed this program and is still in favor of the . rent supplement l$ing initiated. Is that correct ? ~ Mr. BLACKMON. That is correct. We came before you last ~ear and endorsed rent supplements as a free enterprise way to house l~w- income families of this country~ We think it has many aspects t1~iat are an improvement over public housing. ~I recall that some citiz~ns living in public housing in certain areas, o4ce they reach a particu~ar income bracket,~are required to move. Th4~i they move out of pul~lic housing and move iiito-they actually w3nd up moving into l~ss desirable housing, and it costs more money. We contend that in this rent subsidy program, a man can live ther& and once he obtains su - dent amount of money to pay his way, he ~ can still continue to ii e there, and over all the time he 15 reaching the point where he won d be paying his own way, three-fourths of the money goes to his famil It further can provide, under the rent supplement program, horn - ownership. As the man not only attains th~ point to where he do s not need rent subsidy, where he obtains ad$itional money by whic he can make a d~wnpayment or begin to p4r a market i~ate, then 1 e can, if properly conceived, become a hom~wner and this is ver desirable, as Mrs: Sullivan indicated. We also believe that economics will result In compromises to tb imbue housing program. It will cost the ta~pa.yers less, from a ren supplement standpoint. Tt will be economically desirable when i comes to the amount of money it takes to hoitse these people. There fore, it is desirable from that point of view as w~ell. Mr. BARRETT. Will the gentleman yield ~ Mr. Blackrnon, I just want to say that the g~ntleman from Georgia has been a great advocate of rent supplements 4nd has done a splendid job on that legislati~n. Mr. BLACKMON. He is to be commended ~nd we in the private sector of our business feel that this is a real step in the right direction of housine~ these low-income familie~ and we welcome the opportunity to try to do son'iething about it. WTe hope that Congress will take act ion PAGENO="0527" DEMONSTRATION ~ITI$~S ~c RBAN £EVELOPMENT 521 oil this appropriation and make i . ~`1ab1e so that the program can get underway. You all authorized the legislat o 1 st year, but until now we do not have ftinds to put i~ into qp i~ iou. We would weleom~ the opportunity. ~ ~ Mr. STErrn~Ns. May I ~sk you f y~c would agree with the position that I liav~ taken that we airea4y h~t ~ in the public housing a rent supplement ? `Mr. B~Aci~xo~. Ye/~ s~r. Yo~i ~ e a Federal contribution by the local' 1tou~ing authorities/ of app~p I ately 5 percent of whatever the cost Of the unit is on aui anriual/ c ~ ribution basjs and you all make appropriations every y~ar to f~i ~ his. So there is a subsidy, or whatover you want to cal~ it, to tl~ 16 al housing authority and, instead of having Federal owne~ship, ~ ar having private owiiership. We favor private ownershipjover pu1~l ~ ç vnership'. Mr. S~rnENs. It is ~iot als~ t u that besides the Federal contri-~ bution that you are t~1k~ng ` h ~xt, the people who live in public housing cannot get the/ sai~e a c ~ odations for the same low rent in the private sector in ~enei~ai ? ~ Mr. BLACIcMO~. We1~, b~eau ~ o~ he subsidy they get-and they get it in two or three ways~not on h annual contribution, but also they get it in io~w interest which ~ s a orm of subsidy, if you want to recognize it as such, on~ ta~-fre ~ids, that may bring 25/s or 3 percent or 3%. S~cond, publ~Ec iiousi.~ ~ o~eots make a payment in' lieu of your regular taxation.~ I wou ii ~, gentlemen, to see this committee go on record as favori~'ig the 1 al ommunity, that local communities use tJie below-market Irate an r~ t-supplement program and recom-' mend to the cities that these , i og ams be given the same kind of tax treatment as public hpusing. f here is a decrease in taxes', let's let the local cities be re*arded y in king ~ this deq~ase eligible as part of their cont~1bution~to ~art~c~pa ion in them~n renewal program. Do I make inyse1~ clear ~ Ii~ `one partictt~ar community of this country, in' which w~ ai~e bu 1 iii a below-market-rate project for a Negro Mason group that h~s ~ remendous spirit of tryh~g to help their people, the `ta~inè au~h ~ *y indicated that their taxes would be as much on 140 ~inits as ~E i~ on 854 units'. of public housing and this' is not right. }~lo~ cai oi. hope to accomplish The housing of t.i~~e ` people if they write t è taxes up real high or discriminate against projects that a~e tr i ~ o house thes~ low-income people ~ So this , is ~n~th~r fbrm ~ ~ bsidy that I see-you have at least `three when it'cøme~ to publii h sing, and in some way we should try to level this oi~! to wher~, ` ` e , we are housing low-income people, we do i,t on an equ~l b~sis. h ii we can judge realistically what our accomplishments really are Mr. 5~ri~pni~s. ~ay I ha 1 ore minute ~? I am `awfully in~er~sted I t e testimony you gave on thi~ subject. Last year when/ I advo ~ ed it we had `a resolution from some of the real estate peo~Ple at h ê, and it wa~ said that this was the most socialistic piece qf i~gisl i~ -this rent , subsidy thing-that ever came~ down the s~ou1~. T' ` i~ astounded me that it should come in that way. `I did riot like be called a Socialist in the first place. It was a matter of ~tisunde s a ding and ignorance on the part of the real' estate people' to take .a có gressional newsletter that came out of PAGENO="0528" 522 DEMONSTRATION CITIES AND URBAN DEVELOI~MENT Washington that called us all Socia1ist~ who voted for the rent ~upple- ment. ~ ~ Mr. BJJAOKMON. Congressman, I dotknow the statement tl~at you made, and I know how strongly you £~e1 about your position~ You also know that the people who made th4 statement have since c anged their positiqn and are supporting this legislation. They have stated so publicly and I think that maybe they have seen the merits in the private enterprise approach o~f it. But they ar~~ not honiebuilders. You said real estate peop e and that is the g~oup I referred to that made the public statements h~re in Washington. They are now supporting the rent-supplement program. Mr. SThPHgNS. I had a. telegram from~ the Augustallome Bu iders Association endorsing the rent suppleme Thank..you~ Mr. BARnrn~r. Mr. Gonzalez ? Mr. GONZALEZ. Thank you, Mr. Cha rman, and thank you, Mr. Blackmon. I appreciate very much your very valu~ble contribution to the con- sideration of this proposed bill. I was. going to try to comfor~ in some small way my colleague from Georgi~. As you know, I have 1~een called more than just a Socialist. I have been called a beatnik. But in any event, I am intensely interested in your statement, j~age 5. of your statement, on the economic picti~ire in which you state 1~hat working with the Government programs, ~ey have no choice bu~ to either absorb the cost of points or stop usii~g these programs. This has `been a source of concern to me ~nd others, particularl~ in light of the testimony that was recently given to the subcommittee by Mr. Brownstein who recently was a Conimissioner. I asked hin~ a question and he admitted that FHA today re~presents about-or a little less than 16 percent of the mortages and I asked him why~ He s~\id at one time it had been as high as 49 or perhaps even 50 percei~t. Especially in view of the fact that F}TA has been intended by Congr~ss to provide the American family a chance to ~uy a `home, but since this great program has degenerated to the point ~vhere the average fami~y wishing to purcI~ase a home has to go to ti4e conventional mortgage market which apparently is more attractive ~than FIIA-can you t~l me if there is anything that can bc done to coi~inter or arrest this tren and restore to this program its original objecti~es? Mr. BLACKMON. We have a real problem, Congressman Gonzale , today with the FHA program, especially from my part of the countr and in California and the Southeast, because ~f the money market an the way FHA arrives at the cost of money. jn one particular office, and I won't single out the office, the one that ~ am familiar with, they allow 13 percent for overhead and profit on a r4iortgage. Let's say it is a $15,000 house-they allow this 13 percent 4o be placed at around $10,000 or two-thirds of the sales price of the i~nit, so this gives you a total of some $1,300~for overhead and profit. `~ Now, if you have~any kind of operation and ~4ou are conducting it in a businesslike manmer,'you would have, say, 4-percent overhead of cost of doing business in your office. Four percent of $15,000 gives you $600 that you have to' charge as overhead, so you really only have $700 left out of the $1,300. With the discount picture in our part of the opuntry at 4 percent or more, you can readily see that a discount which the FHA does not allow PAGENO="0529" I NAHB RECOMMENDATIONS ~OI ~iJar1y Texas. IORTGAOE JNS~JRANCE ne buyers continue to DEMONST~ /1/ DEVELOPMENT 523 60-878-66--] PAGENO="0530" 524 DEMO~S~1'RATION CITIES AND ~RBAN DEVELOPMENT N~IB ~1s*~ g~ierai1y opposed t~ hlgbèr inte~estratès which increase t e costs of hbfflsw~~tt1P fl~weVer, r~tatning the 1~A rate at its present level merely results in lner~asing1y higher d1S~OliutS. I . ~ Incorporatii~g dlscounts~ on th~ other hand,~WoUld not only increase y elds to lenders but wkuld be less costly to home bu*ers According to NAHB econo mists, a home buyer will pay less over the tertn of the mortgage if the d scount is included thin if the interest . rate is incre~sed. in addition, includi' g dis- counts would recognize that the cost of mone~v to' the borrower would e con- sidered in the same manner as , the cost of * bricks or mortar. Discounts are already allowed by FRA in mutlifamily mortgages. 2. AT~TRACuING PARTICIPATION ~N TRE `PXtOGnAM ` The FHA has come to a point where we bel1ev~?4t' fleeds to make a fundai eutal examination of the way in which it does bnsin~ss. We would like to poi t out that Assistant $ecretaj7 Brownstein has madetsome laudable improveme ts by greatly reduc1fl~ the time In which It takes to ~get it conditional and firm cthn- mitment on an J~'HA mortgage. lie also has sl~own an appreciation of th dif- ficulties imposed by enormously complicated ai~d time-consuming processj g of multifamily cases and is cooperating with the NAHI3 to help relieve that ~ itna- tion. However, it is still usually very difflct~lt for either a multifami y or single-family home developer to get his case processed in FHA. In additio , the agency has been very slow in accepting new materials or innovations. Where once the agency led the hornebuilding ~!ndustry, it now often lag ~ far behind and often forces the builder-participant ~in the program to be punished for wanting to include items or materials in his *oject that may be very we 1 ac- cepted and ~ idely used in conventional bmlding~(n the same area The ä~ncytedds to act as if It were the sole~ellable source of knowled e of housing in some respects where it Is by no mean* the sole source. At the , . me time it baq sole n~itionwide access to certain type4 of knowledge of which it t ke~ little advanthge~ ` ~`or instance, the agency still ~nalst~ upon imposition ef spa- cific technical standaMs and a rItu~lIstIe inspeeti~an system during construe Ion. The FHA standards may not always be appropriate to given areas. Local c des and local building inspections may be fully adeq~iate to insure that the hoi ses will be safe, ~anltary, and soundly constructed `and the only FHA judgn ent needed may be that the home is an economically kisurabie risk. In some ar as, o~ c~urac, .loea~ r~quir~ements may not be sufficiei~t. But the ~HA is inflex ble in its requirements and inspections regardless 4f the adequacy of the I cal' requirements. ThIs simply adds as needless. bui~den to the buIlder, and iti- mately is reflected ~nhigher costs to the consumer. ~ , On the other hand, the agency Is engaged in `4~dug business in all types of housing througboi~ the country. It has, at its eo~uniând, a tremendous fund of raw information qn costs, operating experlenee-4~nth . physical ~ and financia - credit data,. and S&on, on the thousands of hou~ing~ units that are processed a eb year. This data, hnwever, in spite of its tremendo~is, potential usefulness to ~he agency and to the hidustry~ has never been organiz~. We know they now ha~re, initiated `efforts to organize this vast fund of k~owiedge and propose to i~se modern computer techniques to rapidly assemble it. We support this eff~rt and believe that the work must be expedited in aliipo~sibl.e ways. The policy of publication of market analyses was a sten in the right directio~. We also believe that if this data were improved ax*l made more cornprehensiV~?, the process of getting a "yes" or a "no" on an ins~iraflce commitment could nisde much simpler~ and much faster. ` Many builders who do bnslness in different omc4 also complain that there s great variation in geld office lnterpretathrn of eent$L o~ee instructions. Tb s is partly because o~ the extraordinarily complicat4d instruction system in th agency. ` It reflects ~t need for greatly improved su~ervis1on of the field officer as well as improv~d communication systems. OfMn the best intention of th Washington headquarters fails to be reflected in field office performanceS In closing and in fairness, we would like to give dkie credit to Mr.' Br~wnstei~ for continued efforts to simplify and improve the a~ency's performance and t extend the benefits of mortgage insurance into outl~iug areas and areas ~vithi the city that may be salvaged from deterioration by~ the attraction of mortgag funds. ` The `agency also has developed a better working t~1ationsbip with the Urban Renewal Admlnistra1~iOfl and has taken risks in pr4grams in which there was little or no experience PAGENO="0531" 525 DEMONSTRATION CITIJ~S t~ URBAN DEVELOPMENT But in the bulk c~f Its buS~ej~we' ê 1ev it ~ mod- ernrzation. The spi$t o1~ t~t~ê(~4i*'n t~ ~ in mortgage practices and bon$bui~ding ~ a~a ards that !ts best brains conceived' to be sound. It was remark~ly ~Uece s UI, but ~e believe tIn~t in large measure it needs a rebirth of ~aj~ attitUde of tie 1 fl~ y and leadership and of the pioneer- lug spirit. I This will be uecess~aty if it 1$ te p `M the' enormous need for low-income- family housing, as well i~s t~ fuffill I s ~ co omic role o~ a credit stimulus' to the entire homebuilding indu~trfr. Mr~ BLACKMON. Espc~iai~y ti e lo -income families, Congressman Gonzalez.' I think hoi4~ig the ~ pé pie is very important and, see- ondly, I think FIJA sI~ii4 br ci~ i its scope, not~,oiiJy in the low- income brackets, but `high~ in ~ . e as well, because ~thi~" is bu~iness `that is ver~r desirable tl~at they d ot seem to b~ getting. It would be helpful in the overai1/poi~tfol'~ , it would permit taking a bigger risk in some of the low4nco~ne horn s t'q balance their losses and would be helpful in qualifying sôrn~ of r i ore unfortunate eitizens~ Mr. GONZALJ~Z. That is ye ~ ri~ . I am inthnseiy interested and ~iso conicerned because I r~pre ~ t district in whIch the bulk of my constituents are affeete~I. It a b en very depressing to see the con- stantly dwindling role of the F~ & i this field. Mr. BLACKMON. I tl~iinl~ thi ~s here the committee could be corn- men4ed and also .Mrs.I' Sulliv , ` proposaL We should use this Fed- era1~aáistanc~to e~c~ura~~ ~ ~ `. ~ ` `ow-in~onièi~á~4~s. As they get' more, they can pay th~ir Way a d t such time as they pay their corn-' plete way, ti'iey becorn~ ho~neo ei~ This is one way wh~re J?ed r 1 ssi~tance ean~be very helpful in up- lifting low-income fa~ni1~es- S ~n ~where in 5 y~rs or so this family's income, as youand I l~now, w 1 in ~ease to a point where they can pay their own way. It give~ the i a tart in the right direction and these funds can be released to start he low-income families on their way to liorneo~n~rship. ` ` ` ~ Mr. GONZALEZ. ,Th~inl~ you ~ i~ much.: Mr. BARRErr, Mr. Blacki ~ ` h s to be over on the Senate side very quickly. ~ . . But w~ have the g~nttema r ~ New York who'has two very short questions. I understan~t th o must le~we as quickly as poss~bl~. Mr. FINO Th~ quick que t o~u is, that under H.R. 1 ~3O64, there is a piovisioxi which str~kes out ~ 01 the National Housmg Act the pro vision "and the As~bci~tk~ii ~ a not purchas&~any rnort~age insured or guaranteed priori to the if et ye date of the Housing Ac~t of 1954" Is this a' recornrn~ndation m eb ~ your organization ? Mr. BLACKMON.' itn our t~ 1111 ny ? No, sir. Mr. FIN0. Can y~u strik~ o it at section? Mr. BLAOKMO~L .~fay I h$ .`e j st a minute? Mr. BARREIT. I wo~ider/ if ~ on would not take the question and answer it more in d~t~ii in ~ itj g~'~ Mr. BLACRMYN. Be most ~ p~ to. This is the section that we are not familiar with. * I Mr. FIN0. Aecordipg t~ yo r own testimony, I was surprised to read that you supjor~ titi~ o H.R. 12946~ while you oppose Federal money for land d~ve1opu~e t gencics on the ground that this would iniect Governmen~I deeply ~i to urely local matters. Do you realize /th~t. it ~s tit e I that would grant the Secretary of the Department f~ir-renc1 ~ g owérs to vastly increase Federal grants PAGENO="0532" 526 ~ D~1ONSP~APTON CifIES AND RBA~ DEV1~YLOPMENT to metropoiftan planning units, thus Bn~bIing the Secretary to ~ ontrol such purely 1o~a1 matters as zoning cod~ subdivision regulatio s, and civil land use and density coi~trols ~ ~ There again, if you want, you can answer it Jater. Mr. Bi~oKMoN. I will just comment slightly. Title I is for utility grants that have 1~o do directly with cities, such as water and sewer facilities and items of~his nature which are m~mici- pal functions. Title II is not a mui4cipal or State functio but rather a pri~te enterprise approach. ~ Basically~ I would like, if that is possil~ie, to ~iibmit a further tate- ment on it fOr your consideration. ( The information referred to follows:) NATIONAL ASSOCIAT*ON OF HOME BUILDEES, NATIONAL HOUSING CENTER, Washington, DXI., Ma'rck 15, 1 66. Hon. WILLIAM A. BARRETT, Chairman, Buboomm4t,tee on Hou$ing, House of Representatives, Washington, D.C. DEAR CONGRESSMAN BARiut~rr : This is in rer~1y to two questions raise 1 by Congressman Fino during my testimony March 8lon behalf of the National sso- ciation of Home J~ui1ders on proposed housing an~ urban development legisla ion. Congressman J~'ino asked (1) whether NAH1~ bad recommended enact ent of section 110(d). of H.R. 13064, the pro~sed H4using and Urban Develop ent Amendments of 1t~66, and (2) for an explanatioi~ of NAHB's support for ti le I of H.R. 12946, thepropose~I urban development bilt Section 110(d) of H.R. 13064 would repeal a pr~ision of the National Hou lug Act prohibiting purchase by the Federal National Mortgage Association of 10 ns insured or guaranteed prior to August 2, 1954. NAHB has no objection to repealing this existing prohibition of UN IA secondary market mortgage purchases. We understand that it would m ke eligible for purchase a negligible nunther of mort~ages 12 years of age or o~ er. It should be made clear that. section 110(d) is' not ~ntended to limit the author ty of FNMA to adminIstratively restrict its purchases~of loans, by date of insura ce or guaranty or otherwise. * FNMA should continu~ to have flexible authority to issue regulations, a~ conditions require, to conserv~u its funds so that it may at all times perform its fundamental function of pro~criding a secondary mortga e market for loans for new construction. Title I of H.R. 12946 would authorize supplement~i grants (of up to 20 perce it of project costs) to State and local public bodies carrying out nine designat 4 federally assisted development projects.. These su~plemental grants would I e made only to localities within m~tropolitan areas (1) which had establishe areawide planning and programing adequate for evabuating and guiding all public and private development activities and (2) which were carrying out the locatio and scheduling of public facilities, zoning, and otl~er subdivision actions, an other metropolitanwide policies and actions in accord4nce with areawide plannin* and programing. NAHB supports this new program of supplemeI~t grants. It would assis localities which are effectively carrying on metropoljtanwlde . planning and pro graming activities. In recent years, Federal programs have increasin~ly required that federally assisted public works or facilities be consistent witl~i locally approved compre- hensive planning activities. As a result, many of the Nation's metropolitan areas are carrying on planning and programing activities .tdi guide their overall urban and suburban development. In many cases, however, planning activities are keyed toward meeting the specific planning requirements of a particular facility ( such as sewer or water facilities) and do not result in the effective overall dev~lopment which is the goal of Federal planning and development assistance. Pi%Ie I of H.R. 12946 would reward those localitieS which effectively coordinate a~1 public facility planning and programing activities, and ` all other public and pujvate development actions, and thereby encourage sound community development. *~ The planning action$ required of localities in ordelt to receive these supple- mental grants would not result in increased Federal ~ontrol over purely local PAGENO="0533" DEMONST1~ATION ~ CITIES A D URBAN DmT~LOPM1~NT 527 . ~ functions, such as zoning and su~divi I n ç~ ntrols. Such m~ttërs are generally municipal functions which are al~ead c v~ ed in comprehensive plans (wh~ther ~ or not federally assisted) in n~iany~com nites. ~ . , Federal assistance to holp con~mun ti 5 rform well r~eogiiized local govern- ~ mental functions is, in our view, co let ly distinguishable from direct loans (which would be authorized ~y title I f .R. 1294~) to induce State or munici- palities to engage, for the fir~t time, i he usiness of acquiring, developing, and selling land for residential and relate se~ TJp to now such activities have been, in this country, a function of private ê te~ vise~ We believe they ~houId remain so. Sincerely, LARRY BLACI~MON, President. * Mr. BARRETT. Tha~nk ~you, Mr 1~ kmon. Your testimony has been very splendid here this r~ioriilng We appreciate your comi~ig. (The complete statem~nt of r B ackmon follows:) `STATEMENT OF LAnnY BLA in attach: item inch we rec I s~ of ti Pa] ments Latin Ap~ ~T, NATIONAL ASsocIATIoN OF HOME in s A~mericr raring ~. - ~ion; Dr. n, our g~ ~lsewhere N. Weiner, first vice president of the executive vice president; and Herbert Cities R. Act) `and ns or a~ ~nost iden ~ew towns of money recent am per Th PAGENO="0534" 528 DJ~MO~SPRAPION CITIES AND ~. URBAN DEVELOPMENT the way to. ~% percent. I attach as exhibits 11-A anl IT-B two re nt news st~rie~ whieI~ illustrate what is going on. ~ ` As in 195t-.~f unhappy and un1amented~ memory in our industry savings are again be~1ng ~a1IOwed. (Indeed, eneourag4d) to flow from mortgage lending institutions into other fonns of credit. With4iit its fair share of availab e eredit, the home building industry cannot rebuild ~meriean cities, cannot ad quately provide for proper community growth, and, most important of all, it can ot con- tinue to provide good homes for American f~milie8 at reasonable price As a result of our industry's difficulties in the recurrent "tight mone " crises ofithe 1950's, we urged at that time that housing be given a voice in the ouncils of those who set national policies which determine the allocation of c dit re- sources. We;were ~am.ong the early advo~t~of a Cabinet status for ousipg to provide that voice. Nothing in the recen4 actions which have so s riously affected mortg~ge credit affords any basis foij eonfldence that the bitter lessons of the first t*o post war decades have been~heeded or, f~r that matte , even thoroughly nii~ierstood. I As I am surØ the committee understands, ou4 enthusiams for the pendin legis- lation-which ~can have little significant effek~t for at least several ye rs-is somewhat tempered by our very real concern ~that, under current moliey cendi- tions, the present productive capacity of our i~idustry will be sharply cu taile4. We may not even be able to continue to provide homes in the volume pr duced during the past 10 years much less increase our production to meet eh nging conditions in our society. Our comments on these bill are made, therefore with the reservatlon.that the problems of basic mortgage finance now confronti g our industry are. of~iznmediate and vital importa~c*. . W .. ,e are urgently c~nce ~ eli. . DEMONSTRATION CITIES ACT ~H.R. 12341) NAHI3 suppqi~ts this bill because it recognize~ the need for a start tow rd a coordinated apr4roach which would rehabilitnt~ people a~ well as struc ures. This~ seems. to uS entii'ely logical. . ~ . . Certainly it is s1rnp~e cornmóusense to attemj~t to demonstrate that f . sing upon a bflghted area, In coorainated fashion, th~ vast variety of available Fed- eral aids-~rathe* than ~eattE~iing them in a shotgun approach-will aceom lish more for slum areas than the people who live in them. There is some reason, to contend that success in this aspect of the pr rum may very wefl substantially reduce the neeessitV for iarge public housing and urban renewal programs. A higher level of edi~cation, and conseouent hi, her earning power and employment and other oppojtunitie~ provided by the . eli- eral programs eoqrdlnated under the bill. should i~ievitably be reflected in ab lity to obtain better 1i~ving quarters and In inereasedipride In maintaining the In good condition. ~ . ~ . ~ With respect to 1~he criteria established m th4 act fer the type of hen ng program required~to aualify for assistance undek the bill. we particularly ~p- plaud those provi$jons whfrh would give priorit~ to good design, the mait~te- nance of naturutbistorical and cultural chara.eteri~ti~~ : ~se of new and imnro~ed teelinolegy :apd dèsign.; afl~ use of eô~t,re~luctipn ~eehniques (sec. 4(e) (2) ~nd (3) ) . A substantial part of the budget slid en~rgies ~if mir Association for se~ne years has been dfrected toward cost reduction apd the imurovement of te~b- nology, design, and environment. We believe it hig~ily desirable that all Fede~al housing efforts b~ required to work toward those ~id.s. . In this conne~dop, we note also that H.R. 13O~1(th~ Housing and Urban lT~e- velopment Amendilients of 19E~6) in section 1O~ a1~so covers this same suhje~t. As stated in the s~ct1on-by-seet16n* swnmary of t~tat bill, this section "wou'd establish a progra1~ to encOura~e and assist the h~using industry to reduce t1~e cost and improve t~ie quality of housing through l~he anplieatlon to borne co struction and rehabilitation of advanC~is In teebno~gy ~ ~ The program si**ested bY this section, realistica~ly conceived and effectivel pursued, could, we submit. save the Federal Gov~rnment and the America public many times Its cost, but only if cast in the ir~eid of Federal assistance t nongovernmental agencies and bodies of all types, including universities and no - profit and other prIvate research groups. We therefore recommend that section lOf; of H.R. 13065 be amended to empha size that research thereunder 1ie.~eondueted through nongovernmental bodie or agencies, and that a start on such program be m~de by sett1nu~ aside for re search one-half of 1 percent of funds approprIated. rsuant to IL1~. 12341. PAGENO="0535" DEMONSTRATION CITIE~ ~ . D URBAN DEVELOPMENT 529 We also recommend that 14e Congr ~ ~ ~rify section 7 e~ N.R. 12341 to make more effective the Omee o~f Irederal * or4inator established thereby. We be~ lieve an oMee oi~ this kin~1 i~ ne~essa ~ i1~ he manif~id J~c4era~ programs avail- ableto localities are te be k~jt 1~om ç p1 te ~onfusio~ in action. We see noth- iI~ In the bill which wOu1E~ gi~ th 0 dinatQr any duties or powers other than to ~advi~e local goverr~mei~ts h ~ ~i~i st effeethely to work with Federal grant-in-aid programs. WE~ suggest t at this be elabovated and clarified by comment in your comniittee1repqrt I t e 111. In this connection, the ti1~1e "1~ede ~t 0 ordinator" may be unfortunate. Per- hap's the true function of l~1s Qffice 0 4 be better expressed by use of a name such as "Demonstration Co~di~iator ` r ` Urban t~rogram Coordinator." unn~u~ DE'~rLoP i~ ~r ILL (ri.R. 12940) As I Indicated at the outset~ of. m r~ ark~; we vigorously oppose title ii of this bill but support titles 1 a*d LI ~ P~ le II again brings before the Congress two proposals whk~h it b~s airead i~j ted. These are (a) mortgage insur- ance for so-called new cox~ii~it~riitie r~ ( b ) direct Federal loans to encourage formation of State aud lO~l gove ~ tal ageneie~ to engage in the business of land development ~or ]~ous~ig. (a) Mortgage in$a~ra~e f~r n~ co it~e~ This is the third year 1~i si~ceés~ b * ~ is prop~sai has been adv+inced. It was rejected 2 years ago. In/1965, a 1 ` te version became title X of the National Housing Act with origl$lly prop ~ d 25 million limit on the maximum loan, for any one pi~oject at~ a~uy~ ~rie t ~ ~. educed to ` $10 million. The bi1~i~tø~e.,. 3~ou again attempts' to ~4ere~tse t t aximttm lit~Ut to $25 million. Furtbë~-, it wotlld grant spec1t1~l~ene~ts t 110 larger prodects, not available even to a proect asi large a's sic~ ~ ~ iii' ~i rm of a longer loan maturity * and aec~s to ~PN1\XA special as~i~ti~nee. W * t ose e~e~ptAons~ title X already provi4es everything ProPosedbY/thl~ lidli. ~a o~pposing~ thohigher ~ lim~it last year, we testified : , ~ ~ , ~ ` ` ~ ~ ` ~ ` ` . ~ ` ` ` ~ ~ ~ ~ ` .~ ~ "Phis could mean tol~al qreclit i a y one `new town' of several times that cloflar' amount. As stated, `~vebe ~ ere aa~eso' many unknown and potential high Hs~ks In lnsuranc*~ of thisi . at, If enacted at all, It should be on a *ihnited e~pe~1mental b~Is. ~ ~ ` ~ ~ `~ ` ` , ` ` ` "Land prices throughç~ut our , is oi~ hávu showii e~treine fluctuation~. ` Land ~peeu1atio~t1 excesses! h~ ~ both ~ ot~ ht on, business reeession and intensified them. If this progrtfln!t$A a cti ~in~añcê gets underway hi the framework ~prôposed, It could gun~t~~h g ~ * of~apitai `into what has always been a V~latl1è econOmic area. ~ ` ~ ` ` ~, ` ~ , ~ ` ~ ` . ` "It~: Is certa~ln1~ 1ot/.in~~c& ` b* that ~` ~ut~fre econOmic dowflturn èould cause a dlithpiug Into ~c~ernme t 1~a da of ~ery~ l~rge landholdings * * *. The ~!~slc iflsnrzlnce priaic~lec ~ ii ~r ~j y `i~ed so succosstiilly in FHA's owner- occt~pied hoflem~á~'~i~sflr ` e~ ~`~gratri'ai~d ie~s in its multifamily hoW~1ng fi'nan~ngwottl'd'be ~tt~rlVb~cld~ g ~` ~ ~ * ` We believe these re~s'ons * ar ~ en more cogent today since the Congrè~s last ` year provided, in s~fi~i~nt for fo ver.~ substantial e~eriment, what is here asked in. expanded fo~ni even ~ fOr that expeHnient can get started. "~very- thing requested in t~iis ~ro ~ I ~ n ` be' dOne under `the existing 1eg~ilation except pOssibly topUt~ Fe~1e'ráT ~ `ft' `behind a few projec;t~ of huge corporations. We believe this bett~r deferr a~ leastt until the results of operations utider ~ last ~rea~'s $10 ~i%likh~eeiling- e ~ be valuated. ~ (b) Laad deveIoD~Mt ~ ~en ~ ~ Thl~ proposal, as ~ve t~rged 1 ~ year, would inject Government deeply, Irre- vocabiy,:ancl on an i~iev1~ably e p~ ding scale, into the business of land develop- metit as distingnlsh~d f$m *p~ sent' system `of private development of land under local eommun~ty regula I n~ ~ ~ . The proposal rais~s' fwida ~ ta questions of the philosophy of Government in relation to private buslne1 s' ast year we made crystal clear the attitude of the,bomebui1ding~ in~tiistr~, At at time we said: "The homebuildinig th4ustr~ s rmly dedicated to the proposition that govern- m!ént should never do ~vha~ ~ d try can do as well or better for Itself ; that g~wernmeutal aetlo~,i l~ nec d uly where there exists a private enterprise vacuum or serious áb~e ; a tl~ t government action, when determined neces- PAGENO="0536" 530 * JTh~MONSPRAPION eITIES AND URBAN DEVELOPMENT ~ sary in the public 1ntere~t, sh~n1d be taken in~th~ `east disruptive form a ~ d should remove impédith~nts to private action, not ~i~~lant it * * . " * * * We submit, the private enterpi~ise ~ system of land dcv lopment *15 producing a better overall result than ~ould be obtained by Go ernment operation, whether a local, State, or Federal ~overnment * * *. The St~te land development agency proposal Would do not~ting to enhance the progr~ss now being made by leading land developers and c~nmhnity builders, ~rbose oI~jectives and accomplishments get better each year, an4~rhose ideas are now filterft~ig down to all eeheloi~ of the industry. ~ The prôj~øsaI could, in fact, impe~le this progress * 4; ~ I ~ "In a demo~ratie society, the proper metho4 to improve land planning ~tnd use is by eonstant~ research, by education, and by~se1f-criticism of the indust y. "Sound planning, like sound government, is~best when broadly based, ot im- posed by controlling authority, ilo matter ho~w motivated. The private entre- preneur, being market motivated, knows more about the problems involv d and how to solve them within the bounds of economic feasibility than can ever be achieved through state ownership." Our 1965 testimony appears at pages 552 and~:553 of the hearings on H.R 5840. We listed eight specific reasons why we were Urz~evocably against the pr posal. We repeat and reaffirm that testimony. We ~urge the Congress to reje~t the "land~ agency". proposal so flrmly as to preelh4~ annual diseu~sion of wh t we are convinced would, at one stroke, destroy th. ~y~tem of private owners ip of land as we know it. ~* I * Title IV of this bill would provide a system ~f grants for so-called urb n in- formation centei~s. It would be h~lpfuI to 1oea~ rommunltiea to have ava~1able the type of progt~am information contemplated $nt we believe It preferable\ that this informatlou be available through the coordftiators to b~ provided undei~ sec- tion 7 of H.R. 12341. In our opinion centralization of. such information i4 the coordinators would help avoid . the proliferatk~i of Federal sources to ~hich local communities must resort to obtain information about housing progran~s. ADDIPtO1'~AL * STJOG~STh~i~S I refer to atta~hment A, appended to `this stat mei~t, for a ~detai1ed sumn~ary of our views on H.p. 11858 and EL.R. 9256. . ~ In addition, a~ ~ttaehment B, I submit a list ~ ~ugg~sted amendments to the National Housing Act, together with. the reasons for each. These would- (1) Authorize ~HA to insure mor~gages on eel ege housing. The substantial increase in the size of student bodies in our instit~itions of higher learning, ~nd the prospect that this trend will continue, resnlts ~n a demand for student ho~is- ing which the Federal Government has long rec4~g~ized in the form of dir ct loans on easy terms to assist in the construction o~ dwelling accommodations or students. By providing mortgage insurance, the Federal Government cou d, without substantial expenditure, greatly increase ~the assistance it is now p o- ~riding for this purpose. ~. (2) Increase to ~ $35,Ø~$~ the m~iimum permissib'e mortgage limits for sin le family homes under FHA section 2Ol~(b) , section ~2 (servicemen's program), and section 234 (hor~ie mortgage programs), (3) Increase mcsigage amounts under section 24 program for urban renew 1 areas to facilitatesn~11 rental projects. (4) Increase frrnii $15,000 to $20,000 `the maxh4um loan FHA could insu e for veterans without downpayment. (5) Authorize FHA to insure mortgages on vaeatio~ homes. (6) Increase the amount and term of title I prc~perty improvement loans. (7) Facilitate con~struction of small rental proj~cts by eliminating the cos certification requirement for projects of 24 units or le~. ( 8) Permit sale of urban renewal land for sales h~nslng for low and nioderat income families on the same reduced basis .presen~ly available for rental oi cooperative housing. (9) Reactivate the section 810 Armed Forces ren I housing program. * PAGENO="0537" DEMONSTRAI ~D /URB~ DEVELOPMENT URBAN DEVELOP. 53~ B r comprel ye progr period, $2.3 tdllion w rove the WI] ive consi( ensive PAGENO="0538" DE1~ON~STRATION C~TES AND R~BAN D1~VELO?MENT Title IL ~ £Le~veZopntY3~t* an4 new Ni~B ~trong1y opposes e~tei~s~on of eommunities.-This title would (1) in~ title ~X land development ~ro~~ieions. crea~e the ma~dmum mortgage amount AmpJ~ authority exists for FH4 to in- of FJiIA title X land development mort- sure ~arge developments under ~l~e ex- gages from $10 million to $25 million ; isting provisions. The admini$ration (2) establish a special category of lai~d has f~i~d to demonstrate a need for an development called new communities, expal$ou of the program at thi~ time. generally larger In size and * scope ; (3) Furth~rrnore, we `understand tl~at as exempt new community developments of thL$ di~t~(Mareh 9, 1966) . a*lt~iough from the e~iiS1u*ig 7 year maxinmul ma more 1~ilIl 6~ latid development pr~jocth turity appli~b~e under title X ; (4) are 14* procesSed, no mortgag~ h~s require that ~articlpat1on by ~niall yet be~tt apj~roved by FIELA. W4 . rec- builders in lá~d de~elopment projeet5 omrnen~l that ~io~igress postpone e~pan- be particularly k encouraged ~ and (5) siOn o~ Tthis pro~ram until the n~iture make FNMA ~ecial assistance funds and e*nt of land development \proj- available, where necessary, for new ects ur~der existing title X provthions community developments~ can be ~vá1uated. Title II would also authorize a new NAH:~ strongly opposes these p ovi- program of 1oan~ ( at 4 percent Interest sions which were rejected by Gon ~ress rate) to State or loea~ land development in 1965~ We ls~lieve that the ad `in- agencies to acquire land to be used for 1stratio~ has failed to demonstrate any well-planned residential neighborhoods, need fo~ this proposed governme tal stibdivisions, and communities. Lend activity 4n land derelopment operati ns. development age~1es would include These ptovislons would eliminate ~ ri- cities and others public corporatiOns vate enlfrprlse from land acquisi ion ereat~d"for that ~puPpoae nnder State and dev4lopment activities by (1.) en- law. Land aequl~ed would be sold to abling gvernmental bodies to acq ire private builders at fair market valne (at low-i~iterest rates) raw land wbch for uses in accord with approved de- would orlinarily be available to priv te velopment plans. Land could be de- developer~, and (2) restricting the se veloped by private builders uiider FHA of acquired land to uses in acc&rd w th title X land development provlshms. publicly approved development pla s. Participation of small builders would `be The jncrei~sing amount of private la d particularly encouraged. For these developmE~nt in accordance with mode loans, $25 million would be authorized. land use ~oncepts makes this admi I- stratlon p~oposal unnecessary and u - desirable. NAEB ~tpports the proposed i - erenses in ~nass transit grant and de onstratlon ~ ftinds. The mass trans t program p~o'vides assistance to local - ties to dev4iop a more rational syste of metropolitan area transportation,: a essential element of proper urba development, NAHB su~ports the objectives of this proposed gr4nt program. The need for better infori~tion and easier access to each inforin4tion (especially in smaller localities) 1s~wide~pread. The type o~ lriforta~ttion contemplated lmder title I~ would appear to be most nseful to loc~dities taking part in the demonstratidtL cities program, which would be aut~iorized under HR. 12341. Accordingly, ~we recommend that the Federal eoor4inator established under Hit. 12341 ba required to supply cities with this ty~~e of information. This would preven4~ a proliferation of Infor- mation center4 and make urban infor- maitlon and 4ata available in these localities ~vhie will need it most. 532 Titfr IlL Urba4 mass tran#porta- tion~-This title *o~ild increase by $115 milliowtheautboriz4Ltion for grants un- der the Urban Mass iI~ranspoi'tation Act of 1964 in order to maintain a $150 mil- lion program level for fiscal year 19~8~ It would also provide $10 million for mass transit demonstration grants' for fiscal year 1968. Title IV. Grants for urban. informa- ties oentcrr.-Phis title would establish a new program of IIIJD grants to states and metropolitan ar$~ agenlles to help finance (up to 50 pez~nt of the eo~ts of) program~m for the c~~4,ction and dissem- ination of informatfin~ and data needed for effectively utilizihg governmental programs for the solution of local urban problems. For fiscal sear 1966 $5 `nil- lion would be authorized and $10 mil- lion for fiscal year 1967. PAGENO="0539" DEMONSTRATION CITIES RBAN DEVELOPMENT 533 Houthi,g a4u1 Urba'n De4Iopmen~ ~& .B ~ pösttio~a~uL recO~enrnon~dations Amendment8 of 1.966 (HR. 18O6~) ~ ~ ~ ~ ~ Title I of HR. 13O~5 wot~1d tnake ~ HB has no c~bJ~dhrn to any of the various ~mendments to exist~g ~ laws ro lsion~ `of ILE. 13~5. relating to housing and nrbai~ de.~e1op ~ ~ ~tated abwe. with respect to the inent. Its main proviskrns ~s~oul~E (1) è eral ~oordh~ator Whkh would be permit the PHA insuran~ee pre~n~u re ted under the demonstration cities charged for a title I prop~ty/ improve il~ we recommend that (1) sectIon 1O~ inent loan (made or refinaiic~d ~ithi of J~. 13065 be1bs~ted In ER. 12841w 1 y~ar) to be p~tid ~ by the~bo~rrówe ~ . (2) ~ Sec~ rather than lender (sees iO1~; (2) 1 tiô be~ carried o~i ~ private nongov- cilitate Use of the auth~rity to transfe ~ ~ m~fltal agencies atid oDganizations~ PHA cooperative housing i~isure ~ ~ ~ . . mortgages to a mutual insur~ncé bets ~ ~ ~ ~ ~ ~ ~ (sec. 102) ; (3) increase f$m ~11,O ~ * : : to $12,~OO the maximum ~ mórtga 4~ , ~ , ~ amount on a sing~Ie-family ho~ne thsur ~1 under the 1~'flA section 221 (4) (~) mo - erate income hou~ing pr~gr~tm awl i - crease the mortgage trust on1 a t*o-fa - fly dwelling from $18,000 to $~O,O~O (s c. 103) ; (4) permit local hous~ng autho I . ties to (a) lease dwell1ng~ for mo~ than3 years where needed t~ house ~is plac~d~fth~nflies, and (b) i~4~se iicn~s~i~ to be constructed as well as exist~rii housing (see. 104 and 105) /; (5) est~ ` lish a program to encoura~e ai~d~s~j t the housing industry to, rec~uce the ~ t and improve the qual~ty I of hou I g ~ ~ through the applicat~o~f ~ech~iolog c~ 1 ~ advances (sec~ 1~$3) ;~ ~ahd I (6) pro i e ~ . specific ,~xamples at t~rpesI o~ impr ~ - ~ merits that may be 1ns~rë~ ui~der ~ t e , ~ , ~ . x laud developm~nt prog~ani1; the I ~ ~ , pro~tements would * inc1ü~ stØam, g s, . ~. alid electric lines and jn~ailations a ci ~ ~ ~ ~ industrial uses in proper ~i~~orti i~ to the ~ize and scope of th~ de~relop ut (see. 108), * ~ . ~ ~ . ~ ~ ~ ~ Pitie~Ij would correct the ~rordLg1of certain statutes to confai~m to exi~ t i~g law as provided in the 1~epartme~it o.~ ~ ~ Housing and Urban De~elopment et .Finaneiai assi~stance for ~,irot~p pr c iée NAJIB positio~ and recommendatio~8 faciiities (JLR. 9266~ ILR. 9256 would auth~riz~ mo ~ age NAHB is unable to take a position insurance and direct ~oai~s to ~ ci on ILR. 9256 at this time, The bill will finance the cost of co~istr~ictin ati be considered by our board o~ directors equipping facilities for ~1ie ~roup ac at our spring meeting and we will sub- tice of medicine or ~1eatistry.~ T~ wit our views on the bill at that time. FEIA Commissioner /w~ld p ut As a general principle, NAHB op- 0 *~ ~ th~rtga~ges ~ equal to 90 percent f tl~ poses the use of FflA's mortgage in- value of the facilities upon corn ~e io . surance operations to assist in the Insured mortgages cou~d b~ar I t re t financing of commercial facilties. FHA to meet the mortgage ~nar~et, q n t personnel have knowledge and exper- in excess of 6 percent. ~ If 4n ap 1 cn t tise in the financing of residential hous- is unable to secure an lr~sure oa , ing and development, specialized fields HUD could make a direct lea up ii involving altogether different financing terms and conditions ~s favor b e s and underwriting considerations. Ex- those provided for liisu~'ed loan . tending ~HA's operations to the financ- ing of group medical or dental facili- ties may result in diluting FHA's ability to perform its present responsi- bilities. PAGENO="0540" 534 DJ~MONSTRATION CITIES AND ~ URBAN ~ DEVELOPMENT Ea~tension ~f PHA mortga~ge insurance NAHB positiong and reoom~m Mationg for vetera~$ (H.R. 11857 and H.R. ~ ~ . 11858) ~ ~ . These bills would amend ~ the PHA IS%tHB strongly supports H. . 11857 mortgage insurance program for vet- and~ Hit. 11858, identical bil s which erans, ~ authoi~ized by section 2043 of the hav4 bipartisan support. If enacted, Housing and~ Urban Development Act an ~dtlltional 6 million vete aris of of 1965. Existing law makes liberal Woijid War II and the Korean conflict FHA mortgi~ge insurance available would become eligible for lo -down- only for veterans who have not re- payrkient PHA-insured mortgag s at no ceived benef1t~ under the Veterans' Ad- cost ~o the. Treasury. ministration program for purchasing, constructing, or repairing homes. The bills would reflTlove this prohibition and make the PHA program available whether or not VA benefits had been received. ATuACHMENT B-PROPOSED AMEND ENTS TO HR. 13064 (The flousing and Urban ~eveiopme4t Amendments of 1966) I. MORTGAGE INSURANCE FOR OOLLEG~ HOUSING FACILITIES (A) Section 207 of the National Housing Act Is amended by- (1) Inserting in subsection (a) (1) immediately after "designed ~rinci- pally for residential use" the following : " (including housing of the typ~ con- structed with financial assistance pursuant to title IV of the EIGusin~ Act of1950)"; (2) Inserting at the end of the second ~aragraph of subsection (l~) (2) the following : "Nothing in this subsectiont shall be . construed to prOhibit the insuran~e of a mortgage under this sect~ion covering property on ~rhich there is or isto be located housing for stu&n4s or faculties of an "educat onal institution" 4is defined in section 404(b) of t4e flousing Act of 1950."; ai ci (3). Insert~1ng in subsection (c) (3) afterj the first semicolon the fo low- ing: "except that with respect to housing to cbnslst Of dormitories of the type constructed with financial assistance r$ursnktnt to title IV of the Housing Act of 1950, not to exceed $5,000 per sleeping accommodation ;". Ea~plaiiatio~ji This amendment would authorize PHA *mortga~e insurance for housing fa~ili- ties for college students and faculties of the type constructed with finan~ia1 assistance under title IV of the Housing Act of 1950, the college housing iban program. Mortgage insurance would be provided `ander FIIA's section 207 r~gu- lar rental housingprograrn. ~ Under the coHe~e housing loan program, the Se~retary of Housing and Ur1~an Development mak~s direct loans (at 3 percent interest rates) to assist inst~tu- tions of higher edtication in the provision of hou~ing and related facilities or students and facufly where such assistance is not ~tIierwise available on equally favorable terms. We understand that the program tievel for college housing lo us for fiscal year 1967 is approximately $300 million. As college enrollments continue to rise, the need intensifies for additioi al housing facilities for college students and facultieS. In the context of availa le college housing funds, HUD cannot finance all the needed facilities. According y, PHA mortgage insurance is recommended to supj~lement assistance to colic e housing being provided under the existing college h~using loan program. Private enterpriae is already active in this field. The availability of F mortgage insurance for college housing (which w4uld be provided at the cu - rent 5~/~ percent iflterest rate) would increase p4ivate activity, especially n dormitory-type construction not presently eligible ~or section 207 mortgage i - surance. In additlqn, private construction and owjiership of housing faciliti s would benefit collegps and universities by (1) fre~ing their debt capacities s that they can under1~ake other projects (such as infi*maries and student unions which private enterprise is not equipped to handle, ~nd (2) providing them wit greater flexibility in meeting a broad variety of housing needs. PAGENO="0541" %~ be ma men's homes It would a pr a (A) Seci (1) addi ects 220 ~ percen~ RBAN DEVELOPMENT 53~5 "85 per~ PAGENO="0542" 536 D~MONSThAPION ~ CITIES AN ~ URBAN DEVELOPMEN The proposed dollar limits are needed b&~ause of continually risin building and land coats. The new limits and sllghtl~r reduced downj~ayment se edules en higher cost homes will make the PHA program substantially more c mpetitive with conventional financing. In addition, the new limits will enco'u age con- struction in urban renewal areas by small~ builders who ordinarily ould net undertake such `projects. ~ ~ 1~xisting l~w ts?rmlts UP to 11 s1ngle-fa~illy nnits to be construct d or re- habijtta~ed~z~d h~1d for rental Eoweveij the existing maximum ortgage for such a development is $88 ~OO 6r api1kxImatet~r $7 800 per dwell ng unit IncreasIng ~cp~l~ levels `have l~~ndered thisi amount grossly inadequa e. The proposed Increase in the hasic limits, eouj~Ied with .a maximum "hi h cost" designation, ` #euld produk~e a thàximum mor~gage of approximately $1 ~OO per living unit. In an area where no "high co~t'~ designation is made, the i creased limits would pernilt a maximum mortgage bf appro,dmately $9,900 per living unit. * Iv. REDUCED DOWNPAYMENTS ON NRA MORTGAGES FINANCING HOMES FOR V TERANS (A) `Clauses (i) ~ (ii), and (iii) of the n~t to lant sentence of sect on 203 (`b) (2) of i~1~ National flousingAct are athe~id~d `to read as follows : " i) , 100 per' centum ~ef, $20,000 of the appraised value ~f the property as of the d to the mortgage is a~$~epted for insurance and (ii) 90 ber centum of such' value in excess of $20,000". `, ~ ` ~ EvpIanati~on ` ~ ` . .. ~T~i8 ` arn~u~~eRt. would ~ redu~e~thn~ ~u4mi~ñi doWiip~yment required und~ the F'HA section 203 (b) veterans' mortgage ins~iranee program for homes aving an tppraised value in excess of $15,000. There Would be no do'wnpa ment necessary on a home valued at up to $20,000 (rather than the existing $1 000). The amount of dowupayment noecusary with respect to that portion of the value of a home which' exceeds $20,000 would `be d~ereased from 15 percent to 10 percent. ; The larger maximum mortgage at the basic~ veterans' loan-to-value ra 10 iS needed because ~,of rising housing constructieni costs and related expels s of liome&wnershtp~ , In many high~eost areas, th4~ `$15,000 limit on a inor gage requiring no dQ~*npayrsent does flot~rov~ide ai~d~quate or' appropriatèbo e ~. `MORTGAGE INSUEANCE FOR VA~3A~~ON HOMES (A) Section 2O3 (1) of the National Housing 4ct is amended by insertin the following after the second proviso : "Provided ~further, That notwithstan ing the requirement of this subsection, the Commissioper may in his discretion in ure under this section a mortgage on a dwelling to ~e used by the mortgagor for vacation purposes if the amount `of the mortgage th not in excess of 00 per cen ` urn of the appraiROd ~a1ue of the property and he finds that the project with res ct to which them:ortgage is execated `is auì acceptable fisk :". Eeplanation ` ~ ~ ` This amendmen~ would authotize the insurai~ee of a `mortgage under he section 203 (1) pre~ram ~or low-cost homes in out~yhig areas where the hens ng . is to be used by~ ~he mortgagor for , vacation pu~,poses . if the property is ii acceptable risk, ~4d if the amount of the inortga~e does not exceed 90 pore nt ef `the value of tli~'~roperty. The generally rI~thg Incomes awl increasing leisifre time of American famili s have resulted in a demand for PITA mortgage insurance to provide financing ~f safe and decent housing for vacation or seasonal i~se. Under existing law a d regulations, schools and other public or community facilities are required o be available to permit year-round occupancy of th~ home. Under this amen - ment, the FITA Commissioner would. have greater flexibility in deterrnini g what facilitieS are. appropriate fo~ vacation homes~used ~seasonally in locatlo s intended for vacatiOn or recreational Use rather tItan ygar~round occupancy. ,MI~ TITLE I PROPEETY~ IMPROVEMR4T LOANS (A) Section 2(b~ k~ the~NaUonal Housing Act is aI~ieJ4ed* by- (1.) `striking ~dut "$3,500" and inserting in 11~u theveof "$5,000"; and (2) strikin~ out "five years" and inserting in lieu thereof "seven years". PAGENO="0543" DEMONSTRATION CI~XES ~ ~ UEBAN DEVELOPMENT 537 ~ E~pZaflatiQfl ~ This amendment would (~) 1~icrea e t1~ limit on the amount of a property improvement loan that can be insur by the 13~I1A tinder its title I property ~ irnpr~venient program M~m $~Øo to , , and (2) permit the loans to have a ~naturity of up to 7 yeaj~sratl~er tha~i t pi~ sent 5 years. home. repair costs conthi~ie to in á5è akrng with home constrtiction eo~ts. ~ ~ ~ t1tl~ ~ ~Io~ ~t~m~t is ~ ~ sary~, ~. ei~a~ the property ~ u~ei~t, progr~atn to ä~lst1iôz~ieôWn~ 1 ~ ~ a1nt~Unifl~g;t~eir 4~ope~rti~., ii~$~ tiQil, tli~ ~onge~ term wfll ~ to r *c~ monthly ffnanc4ng costs an.dthei'eby bring tbe~betieflts o~ the ~ro~a 1:0 in r ~i uleowners., VU. E~TMt~AT]~ON OF1~O~tL E1%~S~OS ~ ~ FI~4TXt~ói~ SMALL RENTAL 1~flOJ~IbC~S (A) Section 227(a~ o~f the Nat~ ~t j *ousing Act is amended ~y inserting , "~Onsi~tih~ of 25 o~ inGre/~ULnits" I ~ ately before "appi~oved for mortgage insurance". , , 1~ia~pla~a~ion This amendment would~ exenipt ~ o the reQuirements of cost certification ,~ew, or re~abil.jtated m~il.I~fan~fly ~ e s. 4~oi~si~t~pg of less than 25 units. Un- der the existing law, ~tll ~n~b proj s ~ resi~tbject to' cost certification require- i~nt~ , ~ , , ~ `; ` ~ ` ` ` , ` ~ , ` ` Many ~intfll build~r~ :~e~u~wj~ji , ~ undertt~i~e, small rental projects due to the burdenso~e.reqt~re~üt~ mv .ed/, in cost cèrtific'at~on. Phis amendment, , by ~xemp~g s' ~ .pr~ec s ~ rn t1~e, ~~uire~ner~ts, ,w~i1d ~aci1itat~ the construction of ~ma~1j~rojeet , ~ y * all , bnflc~ers, ~ particularly in u~ban~i~ new~il ~ areas where ~x ~ñ~n4 exis ~ 4~or suth projec~;s. It would also encourage ` parttc~petion by smal1bu~e~s in , a y rban renewa' pr~jecth. viii DISPOSALOF LA~iP IN ~ B ~ ` ARZAS' I~'OR ~LOW- AND MODnRAPE-INOOME ` . S `L ~ ,~ OU~ING (A) Section 107(a) of the Bou ~ g ~ et of 1949 Is amended by inserting before the~eriod a~ tji~. eua tiipre~ ,t~ae ~ U lug : `~ ~ Provifed, that any r,~ property Iie~d~th~$art ofan ~ r `;I. `t n~ay be mMè A~vailable to a~yp~r~h~r at,~Lir va'ue 1k~ use, b~r `si4ch p r ~ or in the provision of sales' housing fdr occüpai~cy by families ~f/1'ow~- or ez~ te~income". Ecvpla~u~tion : ` ` ` ` This amendment , wO~j14 j~eiini~ he ` a1~ of real property in an urban renew~1 area at a reduced pri~to ~ny ~r 1~t er *bo will' uso such real property to proP- vicle sales housing rôr iO~c~ c~r mo~1e at -income'fajnilles. . ` Under existing law, ~ro~erty /1 urban renewal area may be sold at fair ~alue'tor the `4prov1s1o~i o~ newt r ~- habilitated rental or cooperative hou~ing for ` occupancy of fam~liei~ Qf ~1 4e at~ income," rather than at the regular market value of the p$pe~ty. /T is educed pUrchase price is not available' for property to be used toi~ ~ai~s hops i~g for families of low and moderate ihcO~rñ~' This amendment wo~tld remo~* t1~ anomaly of a higher price for land to ` be used fo'r"i~enta1 hoUs1ft~ than fo~ ow or moderate-~ost sales housing. Its enact- mont should spur the ~onstruct ~ o~ single-family homes for low- and moderate- `~ income f~unil1e~ in th~e i~rban ~ e al aretts~ where the provision of sales' h~us- Ing is `iu a~cordance w~th ~rban ai~lat~s for such areas. Ix. INcnnAs~ Ai~ol~IzA : ~ ~noTroN 81? nnvn~sn E~NPAL EOU$!NG (4) SectIon ~1O(1)[ oftlie, a I al Hot~sing Act Is amended by striking out "five,tho~samd" and 1i~serting I 1 eu hereof "ten thousand". FJcopk~natio~ I This section woul4 1n~rea ` F ~ 5,000 to 10,000 the number of `units which ma~ he constructed under th `e~ ion SlO program of mortgage insurance for r~ntai4ous~ng. ` I . `It is our understa'i~fln~ tha t ~ ` epartinent of Defense has allocated all units authorized to be `1àsi~re4 luid ~` th program. In view of the recent buildup of. our Armed 1~Orces a4~d th~ In ~ r ~ ` dl need `for housing adjacent to many defense esta~blishments, ` tIie~NA~ElE ` t' on }y recomrn~a~ds rea~th~at1ng the soction 810 program. , , ~ . PAGENO="0544" 5g8 DEM~Y~TTRAP~ON CITIES ANt~ !tREAN ~ ~EV~LOPMEN~P . ~ EXHIBIT 1-A ~ THE EcoNoMIc B~oKGRouND, MAIWH 194w ~ * ~ . ; : ., ~ ~, ~ HOUSING :D~OUNES-~-GENEH4. EOGN:OM~ ~O~MS ~ Housing cÔnstru4~ttôfl ha~ been declining ~!ôr 4~he ~ast 2 years. Ph overall economy, ni~eánw~hile, ha~ ~oared~ tO new `teck~d~ With the gross national product ~tiu dllhibifl~1nta a c~b~h c~n~eci~t1~Ve year. ~ ~ ~ ~ ~ T~ta1 private housing starts singles and~ multiples slipped from 609 000 units in 19~3 to 1,577,400. in 1964, and droppeato 1~03,000, in 1~65. In the last 2 years, the gross national pr4nèt increased by 15 perce t while total housing starts declined by 7.4 percent. r~or the last 6 years; the single- family housing seeker has shown little vitality, remaining at a level jus below the 1 million rung except `for 1963 when pr$uction moved ~1ightly abo e that number. ~ ~ ~ ~ The persist~at 2-year d~wn~uri~ 1ui~ been a~compauied by these ether i~iajor housing chang~s : ~ ~ ~ . A shift to production of higher prieed~biomes~ The median sale. priee in August 1t9~, wa~ $17,9~X~ ; in Noveinber~1965, it was $2~,4OO-an I crease of ft3 perc~flt. ` *1 A declltiê in FHA and VA units, basic~l1 moderate-priced homes from 291,0tX~ in 1~H~3 to a total 212,54~6, or 28 pereetitin 2 yearn. A high rate of multifamily starts, more1 than doubling since 1960. This resulted in relatively sniallér con~tructiOn~ er~penditures than would have been the ease if a rise had occurred in the: single-family housing mar et. . A signiftcant increase in the costs' of IanL lab~r, and in~terialn-a ajor factor in pushing up the m~dian sales price O~ homes. A gradual tightening, in the last few i4niths, in the mortgage m . rket, culminating in changes in the Fedesal Rest~rve Eoá~d's discount rate. In- terest rates ~re moving up and pressures a~e strong to increase disco nts. These factors will push further upward the I1I~iees ofhomes, further con. trict the market, and disqualify man~ buyers. Housing dcmaiiu~ ~tffl Mgh The basic need and demand for neW housing coxttinues strong despite the 2- ear decline in production. Much of the decline has been concentrated lii the est, particularly in southern California. Production :in other regions has rem&ned steady, if not overly strong. The decline in the West has been mostly in multiple units. However, a str ng and even demand in the multifamily sector is goi4~g to continue generally in all areas. The distribution of populatio~i by age gro~ps ft~ers rental units. Ot er. factors, besides age distribution pop~ilation, we~ considered in preparation of table 1 which sji*ws the projected ~*~wnber of h~using starts from now u til 1975-a peak totaitben of 1.8 milllon~ The table ~ows that multiples are ilk ly to reach a peak o~ 600,000in 1972, up from .530,0~ in 1965, and then gradua ly level off around th~500,00O mark ~ ~ Housing's basic strength is reflected in two rec~nt. surveys which show t at consumers plan to buy more new homes in 1966, anU buildern plan to build mo e. These surveys, however, do not reflect the effect o~ the recent monetary acUo s in the mortgage ma~rket. Ot/~er factors `~n h,ousing's bane strcngth.-The annual increase in househo `d formation at long 1a~t is going to. move at a higher rate than was the case in t e last few years. Available vacancy data does not suggest weal~nes~ in the housing market. 0 the contrary, latest data show a third consecutive ~eeline in the rental vacanc rate and an unchanged rate in the homeowner1váca~Cy rate. Thus, the decline ~ñ production r~fieet~ no lesnei4th~ of~ consumer interest I purchasing and no i~ecessary fulfillment of demand~ provided that housing ca~ be made available at ~atisfactory terms and prices. ~ Growth of the overaZl economy . . ~ ~ ~ save for housing, ~irtual1y all other sectors of the~ economy have increased a a rapid rate~ The gross national product has risen ii~ 1965 by about $42.5 billion, as compared to $39.5' billion. in 1964 and only $28.9 billion in 1963-a recent peak of housing construction. It is very likely that 19436 will see the GNP rising an- other 42 billion, or 6.3 percent over 1965. A compar~son ~of the performance of some other sectors of the economy are apparent from ~the following tab1e~ PAGENO="0545" . ~ ~t 1ectel ~ ~ Percent ç~ange from~-~ I ~ ~... ~. ~ ]?$vate housing starts (units, 1~io1u4iii~g farm). Value put-in~plaoe residential coristru~- tion (izi bil1io~s of dollars). ~ . Qross natiöuial ~roduSt (In bliliobs of dollars)~ Personal income Cm )~j1llQ~1S of doUars~ Disposable incomeper eapita: Current prices Constant (1958) prices ~ . Population (in x~iiWops) - Industrial pi~oduct~on (1947-49= 00; seasonally adjust~t). ~ , New pleut atLd eqtzlpmei~t spending (in billions of dollars). ~ * ~ ~ Consumer price index (1937-59=100) -_~ ate ~ ~ 1965 ._~ ~ ~ ~ June. ~ ~___ `.~. I ?d Qua to , 1~ 5 ~-~--- do ~ ~ do ~ . Angus 1 6~ .~ Amotmt ~ ~ 1, 49O~ 000 ~ ~ 20.8 665.9 528.8 $2, 862 $2~ 173 j94. 3 144. ~ 52.95 109.9 ~ 4th q e~ 965 ~ ~une -~ 1964 ~- 1963 -5.0 -7.4 +-7 +3.5 +5 +15 +7 +14 +5 +3 +13 +12 +8 +2.8 ±8 +15 +11 +29 -~7 +3.0 1955 -10 +11.2 +67 +70 +42 +21 ±18 ±50 +85 1 +9.9 i 1957-59. I * Source: Council of Economic Adv/isers: Econ~In c X~i icators, and NAHB. ~ `J~H~I ~O ~ Comme~cia~ banks, iii c~MitreLst ~4 ~ ugs and Loan associati9~ and oautual savings banks, will eZper1~nee anot~t r enomenal gain in savings in 1965. By the end of 19~5, time deix~sits wer esti atea at around $145 bi11ioi~, more than twice the an~ourjt 5 ~vears' ear1i~r. iu~ ~owth in ne~tiab1e certi&ates o1~ de~ posits has been even me$ np~etac I r, * ising from a1m~st zero in early i~*1. to about $16 billion current1~r. The gvowth lii time dej~osit~ at b $ relal banks during the 1~6O's ha~ had a profound impact on banl~ing and ~1 a~i ial $ystems. During the past 5 years, growth in total bankass~ts~as be `O oundingly large. There has been a shift in the composition of total e~ssets/ t ~r~i d those with longer maturities. BankS have aggressively compe~d ~or d*~ sit because a sustained strong demand for credit o~ the type that cpmn~ercii~ ~ nh s can e~ciently provide has encouraged and enabled them to do s~ pr~fitab~ * ~ ~ ~ However;the 1nter~st ~ on t$~ Ia U savings dep~ss1ta has risen sharply and, recently, the ceiling on eer~ifical~ øf deposit and ~ ether "nonsav'ings" deposits was ra~isec1 from 4.5 to 5.5 perc~ . anks are now under added pressure to develoi~a th~uid1ty pc~tiou su~e1 i~ to meet unforeseen contingencies. This task may be somew~bitt ]~aoré dlffi~ t w' than In the past because of th~ recent shift in the coniposith4 o~f bank/ ss~ s, the decline inimportan~e of U.S~ Gov~ ernment security ho1dings-~the t~ d~'onal form o~ secondary reserves-~~and the increasing importanee df certific~tt s ~ deposit which could pro~ve quite volatile under certain cond1t1on~. The recent increase ~n the ce Ii g ii certificates of deposit and on time de- posits other than savir~gs ~ou1d h m er the ability of mutuals and savings and loans to attract funds to flilance ~ ort ages and other investments. The effort of the commercial banks . to ~aise c. rti cates of deposit money requires them to compete with ~ Trea~ur~r bills, li n~ company paper, and the like. Time de- posits other. than eerti~1cates of 4 po It andsavings accounts, however, are com- petitive with deposits at ~avin ~ iriS Itutlons. If the banks find it desirable to boost their current hc4din~s of 1~ eS~ deposits by bidding up the price of savings certificates, etc., sa~i]~s institqti ns will havetG follow the pattern and risk a further squeeze on e~rnings o~ ~ ta ~ d pat and lose out in the competition for savings. I I In the savIngs rae~, the bai~k i~ ye a decided advantage. They can legally operate in a variety ~f credit ~i rj~ ts. The investment return in some of these markets is greater th~n the yi~j o mo'rtgages-4he major investment outlet f~r associations and mut*a1s~ Tl$ ed ral Reserve Board kept the rate payable on savings ~1epoatts at 4 pei~cent Ii ~ er to minimize competitive effects. Never- theless, the, recent F~der~l Re~e ~ Board action raises the possibility of a ~fur- ther escalation in th~ coi~apeti~i* n f r funds, with accompanying pressure to sac- rifice investment quality for ~& ld~ It is too early to tell how a$sociations and 60-878-66-pt. 1-85~ DEMONSTRATION CITIES D RBAN DEVELOPMENT UQGn~pari8on of hoif8i~tg s ~ ts ~t4uZ eco~oin4e growth, ~ .539 I I PAGENO="0546" 540 D]~MONSTRATION CITIES AND~ iJRBAN DEVELOPMENT inutuals will fare In the competition for savings. Perhaps all that ca be said is that, if the differential in the savings rate b~~een the banks and be other two ijistitutions ~hifts very much in favor of the former, net savings flo s~may be different fr~rn those currently anticipated. THE IMMEDIATE ~UTLOOK The :housil* outlook for 1966, prior to the~Federa1 Reserve Board acton, was for a very ni~dest linprevenient. Now, the g~neral tightening in mort ge mar- kets is cons~icting that outlook. This mea~s a squeeze on bui1der~ a d their ability to pr~juce sellable housing units. It will mea~i'a further decline in federally 1~ssisted housing starts nfl ss their interest rates are'raised to a level with convefltional rates. If not, the r suiting payment of points on federally assisted mort~ages will mean a hardshi unless they are included as the "price" of money in appraisal of replacement co In either event, the Federal Reserve Board action has put builders on t e spot. They can still provide houses for the upper ni~ddie and high income gre ~ ps. It is a reasonable assumption that these groups 4ill be able and willing to ay the price of the increased costs as incurred by th~ builder in the increase in short- term as well as long-term credit. But builde4s will be less able to provide the housing most urgently needed-for medium ax4l lower income groups-fo these reasons: ~ ~ 1. First, the fadt that they have to pay more f+r interim financing will in rease the price of ho~$es. Second, working with the Government programs, they have no choice at to either absorb the cost of "points" or stop using~ these programs. Under c rrent and foreseeable conditions, it would be next to impossible to take this ut of profits. It would be tragic for the economy and families who depend on Go ern~ ment-assisted ~1nancing in housing should builders b~ forced further out o this market. ExHIBIT I-B : Norns ON HOUSING AND Eco~oMic SCENE, MAncir 1~66 For the first time since the Korean war, there i~ talk of price and wage con ols. The decision, of ~ourse, rests with the President ~ind if It should be done, it will not be to his llkjng. ~, That this is a possibility is evident from co~nments of responsible pec~ple, mostly from outside of the administration. Within the administration, it ~vas the Secretary of Labor who had the task of pers~jadlng labor to stay within the guidepost as set by the Council of Economic Ad~risers. Labor's answer to his plea was : "We went with you in the last elections but we did not marry you." Labor is, in essence, saying that profits are high and they should have * a * sh~tre in them. The administration, on the other hand, is saying that it is essential\ to stay within the 3.2-percent increase in wages as ~et. f~rth by * the Coundi t~nd that to exceed this is inflationary. ~ ~ ~ The talk about lnfiation and how to prevent it ~has been a major concern of most of the economists since the first of the year. ~ But not until now, howev r, has a suggestion b4~en made for price and wage control. Let us try to put e problem in a proper perspective. * At this time, thei~e are probably only three indic~tions of a possible infiatlo First, is the increase in the index ~of industrial ma~erials prices which went p 10 points from Jafluary 1965 to January 1966 ; the secon~I is the increase f 31/~ percent in ~wholesale pricee. The third indication is the increase in son~e labor wages ; namely, in the construction industry. However, one must remember that most of the indicators are a reflection o the past and help little in examining the immediatefuture~ What is happenin now will only be reflected in much new data later on. President lobnson wa well aware of this when he said to the economic symposium celebrating th 20th anniversary of the Bmployment Act : "We wi~l need to watch unfoldin events closely, and to remain flexible in our tax ai4l other policies so that w can change quickly, jf the need should arise." The fact of the matter is that the price pressures ~n the past few months are real even though nob always reflected in the econo4iic data. This is a result of the economy work!ng at record capacity, and une~nployment being lowest in recent history. "What this really amounts to," said It high official in the Labor Department, "is that most of the people who are em~Iloyabie are now working." This, of course, puts a strain on the labor market. When companies compete PAGENO="0547" DEMONSTRATION CITtES ~ D EBAN DEVELOPMENT for workers, the price goes up~ And a~ t~hts column has suggested last October, there has been a serious shortage of l~U$~r ~n the constructlo~ Industry . during most of i965. 541 On the materials side, t~iere ~r ~ w indications of serious supply j~roblem~. The exception is copper, but mu~b of ~ is is an int~rnational problem rather' than a domestic one. There Is som~ al about some types of textile and canned goods shipped to milul~ary whi~h in y create some shortages, but there is no actual evidence of thi~ and it i~ ult unlikely that this should happen. Much of the recent economiC om ent has concerned itself with the thrbat of inflation and laboi~ `shortag s I flation is relative and should be viewed PAGENO="0548" 542 DEMONSTRATION CITIES ~ AND URBAN DEVELOPMENT not in termS of news that prices are inc~easing, but rather in ter4s oi~ tue magnitude of the inereases~ * Prices :hav~ been stable during the perod from t958 .thr~ug11 1964. In 1965 th4 first signs c~f irtcrea~es became appare t during the last quarter. Preliminary data for both January and February p jut to a continuation of the trend but at a slightly fa,ster rate. Chart 1 shows he year- to-year percentage changes in both consumer and wholesale prices for t e period since 1~J48. Relative to the present, the period 1948 through 1952 sa sharp movements in the price index ; a similar but not as sharp a movement curred in the perloil from 1~56-58. The consumer price in4ex rose by 1.6 per~ent during the year 196~ as corn- pared with au average increase of 1.2 peree4t over the preceding 4 yea s. Re- ~uced supplie~ of meat and some other anirna4 products contributed to th sharp- est price adv~tnces, and rising demand pres~ures also brought about i creases in prices of 4rious other nonduraNe consu~tOr goods. Prices of auto obiles and some other consumer durable goods, 1$wever, were lower than a year earlier, principally because of the midyear cdt in Federal excise taxes. Prices of services (excluding rent} increased by ne~rly 3 percent. In `the closing months of 1965, retail prices of foods averaged about 3- reent higher than a year earlier. Meat prices adi~anced sharply in the spri g and increased further in December. On the other band, large barvests-parti ularly of citrus fruits and processed fruits and vegetatdes dropped to levels well dow a year earlier. Consumer prices of apparel, p~rticularly shoes, and of f el oil, transportation, and medical services also rosetmore than in other recent years. The wholesale price which has been relatifrely stable since 1958 be an to rise early in 19~5 primarily as a result of farm~products ; 7 points from Ja uary to June. Beg1i~ning in May 1965 the industri4l factor began to climb al o, in- creasing by 1 jercent between May and Dec~mber. Virtually all of t is in- crease was In the consumer non-durable-goods~ sector. No information i cur- rently available on the role which the tax excIse cut played in pricing. Sharpest price increases during 1965 affecting~the home building industry were in metal products, up 2.3 percent primarily as a result of copner which s owed an 11.8-percent rise for copper sheet Lumber and wood products increa d by 1.9 percent, most of the increase being in hardwood lumber which went p by 12.7 percent. Furniture and household durables were virtually unchanged. The industrial price index increased O.1 percept in January to the 103.5 evel. The index which was stable from 1t~59 through ~O64 has Increased at an a nual rate of 21/2 per~ent since September 1965. A s4newhat more erratic but ruer indicator of what lies ahead (a leading econo~nie indicator according t the National Bureau of Economic Research) is th4 index of industrial mate ~als prices which has risen by 10 poInts since Janu4try 1965. The present 1ev 1 is 120.3 (1957-59 equals 100) . Half of the incre~se has come since Septe ber 1965. A third industrial index is the Federal Reserve Board's index of s nsi- tive industrial materials (sensitive to price changes) which has risen f orn 101.3 in January 1965 to 103.7 in January 1966. Even though the present increases have not as yet been as sharp, it mus be remembered that the large sums of money committed by the Government and the anticipated budget deficit have not been reflected in the current indicat rs. Within the next few months, the effect of Goveri~ment policies, both fiscal nd monetary, will make itself felt. The "hyperinflatiion" of the immediate post ar period will not, however, again rear its head. The ~hortages which characteri ed the economy are no longer ptesent. Short-term i~iTbalance between supply nd 4emand particularjy in materials in heavy demand for use in Vietnam will ex st. HOMEBUILDING The big news is still mortgagemoney, or money in generaL After the chan e in the discount rate in early December last year,t the availability and cost of money took a sharp turn for the worse. The u-percent raise in the F A rate was too little, too late. As one builder said before the raise, "We are ye y likely going to be stuck with the Increase in the rate as well as the increase n points." He was right. The increase to 51/2 percent meant in many cases n t only a 1/s-percent increase in the interest rate but also a further increa e in points. "Before the PHA increase, I paid 1~/2 p~1nts. Now I have to pay 3 points," commented a builder from North Carolina. Points have takeil a sharp turn upward since 14e last year. In Septemb the average price fo1~ $100 of an outstanding loan us $98.4, $D&2 In Novembe, PAGENO="0549" DEMONSTRATION ~ITIES ~. D RBAN DEVELOPMENT and $98.0 in December. In J~rnu~try 1~ j was $97.1 and $96.4 in February. (See table 3 and chart 2~) / William 0. Mageissen, vice presiden ~ he Security Trust & Savings Bank in Billings, Mont., l~as comm~nted th t, "~ c~rease of interest rates will force many one-, two-, or three-ho~ise part- I e ontractors out of the business. J~ look for rates to increase poss~biy anot e 2 oints on FUA. It is ironic that the Federal Rousing Admin1stra~on did n t r~~p e their rates 1~o 58/4 percent. I feel that this is an economic blun~1e.r due t he incre~Iug ~ieids of prime corporate bonds," ~ ~ ~ But it is not only the ~T~A/mo4ey w i l~ ~ expensive,, The interest on conven- tional loans has increased. ~n ~dditi , ~i ney Is baMo~ to get. "With $6,800 down payment ~n a $26,800 l~iouse, tb 1 rn~ ng institution told me I can get only an $18,000 loan Instead of $20,O~. ~ I ~ st a good solid buyer," said another builder. "From where I si~ It looks 1 ke the money situation is not going to improve soon," commented ~n e~st e ~ nilder, Most of the indicatiens bear him out. Money is going t~ be even otØ expensive In the future. There aiso seems to be a real danger of having le ~ O ey this year than what the real estate market will need. The best estimate availaI~le a1t this t me show.a possible shortage of funds for home mortgage of $1 to $3 billlo~t. T~ 4 line of $1 to $1.5 billion in availability of funds has been predicte4t b~ Tohi~ . orne, Chairman of the Federal Home Loan Bank Board. The $3 billion sh~r a~ In funds was estimated by Dr. Robin- son Newcomb in an analysi~ pr~pare41 or he NatfOual League of Insured Savings Association. An analysis ~y ~he e~o 0 ics department of NATIB shows, like- wise, a possibility of short~ge In fun~is be ween $15 to $2.5 billion in 1966. These estimates have been sumin~rlz~d In t~ $` lea. TABLS 1.-Mort~age requ/tr me ts for 1- to 4-fa,m4ty hoi~sing [D~j1 rs ~ billions] 19~i6 --F New home requirements ~ $1$. 0 Existing home requirements - ~ Gross requirements. -~-.~- Total prepayment and retire- ~ I ment ~ ~ - ~1. 5 Net requirement of new cap- ital 17. 0 Outstanding, end of year ~ ~ Starts for year (1-family) 980 ~ ~ 1965 $17. 5 20. 0 1 64 1 ~ $ 7. 5 9. 4 j 1963 $17. 5 19. 4 1962 ,~ $16 5 17. 6 1961 $14 5 16. 7 1960 --- $14. 0 15. 4 1959 $14. 8 17. 4 1958 $10.6 16. 8 37. 5 ~ 6, / 36. 9 34. 1 81. 2 29. 4 32. 2 27. 4 I 21. 5 I I 21. 5 * 21. 2 20. 7 19. 4 18. 9 19. 1 17,8 16. 0/ ~6 96~ 15. 97. 97 15. 7 182.2 1020 13. 4 166.5 991 11. 8 158.0 974 10. 5 141.8 995 13. 2 130.9 1234 10, 1 117.7 1064 ! ` TABLE 2.-Po$~ible ~ult ~ ~ home mortgago lwZdisvg8 1965 and 1966 ~ [~n~bi1li~ns of dollars] ~J~dl:a: ~ I ~ Mutual savings banks Insurance companies ~ ~ ~ Banks Individuals, etc Total availabla funds f4r hoibe inortg ges Net requirement o~ ne~ cap~tal ~ 1957 $10. 5 18.7 24.2 15.7 8.6 i07.t~ ~ 969 7.8 2. 8 1. 6 2.6 1.2 16. 0 1965 1966 7:0 2. 5 1. 5 2.9 1. 5 14. 5 16. 00-17. 09 543 NoTE-Possible shortage i~i 1966: $1,5~0, 00,çR~0 to $2,500,000,000. Soprce: Estimated from F~dera) Hom~ oan /Bank Board, home mortgage debt, 3d quarter 1965. First, illustrating t~he pOssib~e nE4 increase in home mortgage holdings in 1965 and 1966, and second, shows $11 iñ~rtgage requirements for one- to four~famlly housing, 1957 to 196~. `~~eae t~ re~ show that hoi~ebuilding will very likely need between $16 to $17 1~illiQn, av1ai ~bI/e in 1966. PhIs, then, will mean a possible' shortage of between $1.5. to' $2.5 Illion for mortgages. PAGENO="0550" zuu `~ .~. ~. 1955 I 1956 ~ ie~ ~ * 1959 ~ $959 ~..*. M4 DEMONSTRATION CITIES AND URBAN DEVELOPMENT One sure indication of the tight money si~uat1on is the Fannie Mae peration in buying or selling Government~backed mortgages on the secondary mar et. The last quarter, ending in December, was the 1~fth quarter in a rOw in w ich pur- chases of these mortgages by the Federal ?~ational Mortgage Associat on rose. AIMI this rise has been the highest for any Iquarter since this operati n began in 1954. F.~iinie Mae buys mortgages and provides the financial instructions WI h fresh cash to invest in other types of construction activity. This occurs wher money is tight. When money is plentiful, the opposite happens-lenders buy xisting mortgages from the Fannie Mae portfolio. Last quarter, purchases by Fannie Mae reached a record high of $405 million and sales declined to offly $ 21,000. A year ago sales reached nearly $12 million `and purchases nearly $73 illion. Now the purchases by Fannie Mae increased~ more than fivefold and s les de- dined to practically nothing (chart 3). FNMA.PuRcHASEs AND SALESOF ~ ~ ~ MORTGAGES DoI~*N OHA~P 3 350 -`--~- - * I~ ~ - ---------~`------------ ~ - ~ ~ SALES ::IT4JJ~j~~~H IL~~T~ ,PURGHASES I______ . ~ $00 * ~ ~ -~~- - ~- -~` . ~ ~ - ~-- -~ ~~:;J --~~ ~ - ,~ ~ ~ ,. ` L ~1~_L__L~_ff I~ I I I__~I___L.J_ I ~ I I ~ ~ ~ ~ ~ `I * ~ I~ 1960 1 * $961 ~ $962 .1 $963 $ $964 I 1968\ The problem of ~money supply is aggravated b~ overall expenditures in j~st about all sectors ifl the economy. The Governme~it is in the money market\in erder to finance the highest budget in histor3t. M~ah~of this goes to fight t~ie war in Vietnam. Frivate individuals are in the i4arket for money. Consum~r Installment credit last year reached nearly $75 bi~1ion, $25 billion higher than 5 years ago. Industry is competing for .fi,~nds ; exipenditure for new plant ai~d equipment have been projected for the second quarter of 1966 to be at the rare of nearly $59 billiou, close to $9 billion higher than last year. Federal Reserve Board member Sherman J. Maisel recently urged bankers withhold loans for adding inventory or provide excess plant capacity in ord~r to slow down the growth in demand. His commeilt is shared by many othe~ who see a possible c1x~nger in the increase of plant ejapacity if a sudden cutbac~ should force the industry to slow down productio~i, thus hurting the overal economy. This fearstems from new, revised figure~ of the stockbuilding inven tory rate which show~ed a rapid increase in the last q~iarter of 1965, in sharp con trast to an initial estimate that it has declined. Homebuilding is e4nsidered in the light of all of~the other requirements o the economy by polhtymakera, and they frankly feel that other items may be more important. On this point, Home stated that in some "metropolitan areas a surplus of housing still remains," and that the "lençlers can be more selective and avoid some unfoi~tunate practices." This would indicate that the adminis- tration is not overly worried about the possibility of sluggish housing this year or may even feel that `the further decline may be to the advantage of the overall economy. They are not very likely to funnel more money into the housing mar- ket by changing any of the existing savings and loai~ regulations and allowing them to compete in the financial . markets. If this ~restraint is not removed, PAGENO="0551" 00 000 ~3 Ca 000000 tO 00000000 ~ 0000 C;' PAGENO="0552" .~ ~: ~ ~ ~ ~ ~ , ..~ e~t c~ ~ ~z :~z~ ri~ ~ ~ ~ ~ ~ ~_~-4~ Q ~ ~ 4* ~ ~ ~ ~ ~.4 ~ ~ ~ ~ ~3~Q ~ ~ ~ ~ ~ ~ ~ g ~ ~ ~ ~ o~ ~ .~ ~ ~ ~ ~1! ~ ~I ~4 ~ ~M 1-4 ~ - ~ ~ -1.~ ~ ri~ ~, * ~ ~ ~:* * ~ I I I I I - -4 - t~c~' ~ c~ c~ ~ ~ ~ ~ ~ {~ p~ O~ ~ ~ eo ~ ~ ~ ~ ~ 00 ~ ~ -4 ~4 -4 -~ -~r-4 -~ -~ ~4 - cc o- ~ o~ ~ C~3 C~C~ ~ ~ ~ ~3 b~ ~ - ~ ~ ~ g~ ~ ~ z~ j~- r,~ eDo~ ~cD ~ 02 ~ ~- a~ c,~ c~c~ ~ ~ ~ ~ ~ © ~ © 0 cC ~ ~ ~ ~ ~ ~ ~ ~ N ri~° c~ ~ C~ ~OO ~ ~ 0 © ~ ~O c~ ~ ~ c~ ~ ~ 00 ~ ~ ~ ~ 0 c~ ~ r- PAGENO="0553" ~0' 0 0000 0000 0~ 00000 ~ 00 ~ 0000 0303000000 000 0303 00 000 03 0000 00 0000 030003 ~0 00 ~ 00 03 ~ 00 ~ _____ ~ 0303 ~ ____ _~03 0300 0003 0300 00 0000 000 ~ 00 0003 0000 00 03 03 ~ ~-~3 s~ ~ ~ ~00300034 003 ~3p0~3P0 00030003~1 0000 CO ~00 03 00 000000~00 0303 ~0000~000 0000 0300030003 0003 0000 0 000 00 00 CO 00 ~ ,~ ~ CO 03 ~0 03 0000 03 03 0~cO00 03 00 ~100~1 03 00 0~000 co 03 ~ 03 03 0~300 CO 0 ~0003 ~ 03 ~ ~ 00003 00 00 00 4-~ o~ 030303 ~400000030000~ 0000000300 ~©0003~3~0O - 000030300 ~000~ 00000 ~0 ~ ~ -1 03t303000303003 03~00 0003 0300 00-31-~00 ~ 03 0000000 ~ 00~ 00000Co~1~0000 ~00~-~3 ~ _cO $0 0300 -0~-~ 030000 000000300 O~00000003~00O~ 0300000003 000~0300030300 0303~0003 ~t~-~03-403_~ 03~00O0~03 00CO000000~-~0003 000000000 00030003~ 00~ 0000000000 000 003000 003 CoO 0003 0000 0003 00 0 ~3 0300 000 .~ 00 3~0t0.:-3p0 03o~0003 03 03 03 00 00 03 0300 ~ ~ 03 ~ ~ 000000300~03~0 -0 00000 0303~~030303~ ~ 000303 000~030300000000 03 03 ~ 0~03 -~I 03 -1 03 03 ~00000003CO03~ 00 030000 030000030000-30000 00 ~ ~ ~3-1~CO0000-30303 Co 00COo~ ~0003000300000300 00 0000-4 00O~0000300000~ 0 000300 ~ -4 0~ 0003 03 03 00t~ 00 0300 00 03 -4 03 0 00 00000 isO 000 ~. ~ PAGENO="0554" ~1 ~ ~ g~ ~ ~ ~ ~ ~ ~ ~: ~ ~: ~ ~: ~ ~*P ~ ~: , ~ ~ ~: ~ ~ ~ ~ ~ ~ ~;is~ ~i ~ i~ I ~ ~ ~ ~ ~. ~ ~ 0 @~ -4 c~ c?~ ~ S. ~D _ 0 0 CD CD ri~ CD ~ ~ ~~9O~4 o~ooe~-~ -~- o~ ~` c~ ~ -~D ~-` b~ 0~ b~ ~ C~ QD -40 0 ~ 0 -4 b~ ~ ~ ~r~r ~ r~ ~ i ~b ~` ~1 ~ ~ ~~ir ~ ~ ~ CC~ ~ CC, * ~ ~ ~ ~ ~ ~ CD~~ ~ oo2~~ ~oo~oo~ ~~:z~c~1 ~QO~0C©~ C~~'-~ c~C~ ~ ~~c~c* ~ ®~0~ ~ ~ - b~ ~ C~ ~ ~ ~ 00 b~ ~ ~ b~ ~3 ~ ~ ~E -~ ~~P0~C)CC~ 0~-~C~ ~ ~ ~ ~ ~ CD~C~ ~C~*C~ CD~C~ ~C~' ~-4Oob~C~ C~CC~ ~ ri~ ~ 2~ ~CD 03 ~ 03 05 00 ~ - CO ~ ~ -~ 03 -~ ~ -3 03 ~ ~ CD cc ~ ~*I ~ ~Q C ~ ~ CD~ 0~ C~D~ ~ a~-~ Z CD cJ~ ~ ~z; ~ 11-I---- ~ ~ CD ~03~: 0~G3 ~0 ~- c~ ~ o~ ~ ~GD_ t:~ ~. C I~: P0 ~ z ~ ~# ~ a - CD ~ b3 03 03 ~ b~ CD L-303 ~ ~ ~ -3 b3 CD 03 -30330 CO c~ o~ 30 c~ 3003 03 C~ 00 ~ ~ 03 ~ ~ 05 --3 O~ L~3 CCC 03 CO CC CO 03 CD C) -4 OC CO ~ --3 ~ b3 03 03 t~ -3 03 03~ 3-3 CD 00 00 bO bO 03 CO ~ ~ 3-3 CCC ~ CO 00 03 CC 03 03 -3 00 j~O ~0p~r-' ~ -4 00 -3 b3 03 03 CO 03 03 ~ ~3 eO ~3 ~ bO ~3 ~` CCC ~ 03 30 30 ~ CO CC ~ tO ~ ~0~00~00-03-t0~ 30 ~ CO z 4- --3 30 -1 0000 ~ 03 0;~ ~ ~ --3 00 03 00 O~ CO CD 00 ~3 -o ~ ~ ~ 3000 --3 00 30 CC 30 00 -10) 03 03 CD 30 CC ~ 00 ~ 00 3 CC ~ 00 03 03 -303 PAGENO="0555" DEMONSTRATION CITIES RBAN DEVF~LOPMENT 549 I' Exiiin~ II A [From the *all ~treet/J n~n 1, Feb. 24, 1966] BAm~ FOR SAVINGS-BANI~S WZN c4s o~ s FROM SAVINQS AND LOANS BY Oi~i~ING OERTI~IO~TES OF DEPosiT ~ `R Y CUP OD ~ DBNoMINA~ioNs TO AS LrrrLE AS $2~5, RAISE INPEi~sT RAT~s UP TO 51/2 ~ MR. ~ES~NICR S N A000UNP (By Donald Moffitt, sta1~f r r er f the Wall Street Journal) At first glaiice the move n~ay seem ~ 4~i e iudee'd. To get more interest on his savings, Joseph Yesiniek, a r~tlre s t~ ing clerk in Pomona, Calif., recently transferred hls money from a saving ~ x~4 loan associationpaying 4.85 percent annually to a coimnercial ba~ik, i~orbi d i~ ~ y Federal Reserve Board rules from paying more than 4 percent o~i regular ~ vjI s:adccnints. However, Mr Yesinick di4L not put ~i s oney ftito a regular savings account. Rather, he bought from the ~anl~ a "c r ifi ate of deposit," or CD as bankers call them, that gives him a 5-pe~cent ret . * uch certificates are actually receipts from banks issued to those ~whq clep ~i m ney for a set period, such as a year, and the Federal Reserve al~ow~ ban~s to ay u~ to 5½ percent on them. Increasingly, smaller sav~rs, whet1~Ø it~ ividuals such as Mr. Yesinick or small organizations such as a ~hi~rch, are /ts vi g their money into commercial banks to buy CD's. Two recent ~1ev~lo'pm~ ts derlie th~ trend : Commercial banks which once offered OD's in denomin~t ofl of not less than $10,000, have cut the minimum to as low as $25, and the/p d~ al Reserve, in early December, raised in interest limit for CD's to the ~i r t 534-percent level from 4~ percent. Anotcofinstabi~'tty? I These developments ~ clearly ]~i py news for such savers as Mr. Yesinick. But not for many saving~ an~l loa* ` x utives, whose associations are striving to maintain high payment rates a1~ ti e when demand for mortgage loans- a prime reinvestment source for I s v~ gs and loans-is lagging. The trend also is disturbing to observers ~ o elieve CD's introduce instability into bank finances ; the reasojiing thal~ D' ~ carry relatively little assurance they will be renewed, or replaced, when t~h y e ire. ~ When the Federal Reserve deci~ tç raise the lin$t on OP's to 5~/~ percent it certainly was not attempting to ~ er ny so~'t of .a vate war between commer- cial banks and savings i~nd loans~ It sought prb~n~rily to give traditional CD customers, such as large ~orporat~o s, ore incentive to save, and purposely left the 4-percent ceiling on bai~iks' ~ ~l r savings. accounts. This, according to Federal Reserve Chairin~in Willia~ Mc hesney Martin, would "minimize the im- pact on competitive rel~tionship~" bet een commercial banks and savings and loans among others. I ~ Instead, with some co~nm~rcial/ b nj~ offering as much as 5% percent on CD's and with the denominal~ion~ shate t a size attractive to small savers, there's growing evidence of that ~ery "1 ~pa t" Mr. Martin hoped to avoid. This is especially true in Cali$rnia, wh~r t e competitive battle for savings has been intense for years and where th~ s a icr banks, particularly, now see a way to recapture ground lost tç the sav~n s a d loans, many Of which have been paying well over 4 percent for ~ear~. I Almost without exceptioti, ba~i S ifering small denomination CD's report a heavy inflow o~ deposit~. . I ~ . Inland Bank in Pomona, whb~,h so~ Mr. Yesinick a $500 CD, reports its sales of CD's reached $1 mi~lioi~ in tl~ie fir t 18 days of January. It cut its minimum CD size to $25 from $10,000 c~n Ja uary 1. Medica' Center National Bank, Houston, began offeri~ig 5-per$ t ertificates in minimum denominations of $1,000 in mid-Decembe~, just a ~w e1~ after the 13'ederal Reserve boosted the per~ missible rate. in. 6 week~, the b nk sold nearly $6 million of the certificates. "Never heard of a Ce" ~ "We're getting dep9sitors w fl ver heard of a CD," says Larry Frazer, a vice president of Medical Cent ~ a ional. "Quite a few of them are officework- ers and white-collar *orkers e era ly ; a good 35 to 40 percent of them need an explanation of what a CD is." Oscar L. Grossmar~, el~airm of Surety National Bank, Encino, Calif., says that on January 1, his bank ~ ost d the interest rate on CD's' to 5½ percent. PAGENO="0556" 550 DEMONSTRATION CITIES AND URBAN DEVELOPMENT "Money has been coming from savings and `oan associations all over t e State," say Mr. Grossman. "It's simply fantastic." A few banks began selling small OP's evenihefere the recent increase i interest rates on time deposits. citizens & Souther4 National Bank, Atlanta, o e of the first hanks t~ offer them in $25 denorninatio~, says It has sold $125 mliii n worth since December 1964. "We're Still selling $hem at a right geod clip, ` says a Citizens & Sbuthern spekesmán. ~ "We've gOt a lot of savings and ba money, and we think we've even got money out of .1~he stock market." To fight back, some savings and loan asso~iations are paying a "pre lum" of one-half percentage point on savings maintained for 3 years. There may be 1imits, however, to what `most savings and loans can do 0 count- erattack. Most depend largely on the interest they can get on mortga e loans to homebuilders, and homebuildiñg activity iti the key California area as been relatively sluggish in the past 2 years. `OaI~ifornia savings and loans officials estimate that ~ the profits-to-assets ratio ef ~tate-chartered savings an loans declined to anaverage of 1.23 pe~ceñt In 1964 from 1.35 percent in 1963, a d they anticipate a f~irther decline wher~ `the 1965re~urns are in. Similarly, some mutual savings banks in thetNew York City area recent y have been raising t$eir interest rates-~-generalIy t4 41/2 from 41/4 percent-pa tly to meet small ~ competition from nearby eom~nercial banks. This com tition stems, in large part, from Franklin National tBank of Mineola, N.Y., w ich is selling $25 certificates that pa~ 4~8O percent. ~ In addition, Meadow Bro k Na- tional Bank, Jamaica, N.Y., is offering $2,500 ~ertificates at 5 percent, an New York City's Bankers Trust Co. and First National City Bank are both aying 4.75 percent on CD'S of $2,500 and more. The biggest banks on the west coast have so far resisted issuing small CD's, though one-Wells Fargo Bank of San Francisc~-recent1y reduced the minmum size of its CD's to $5,000 from $10,000. A de~ision by any of California s big banJ~s to issue much smaller CD's, in the view of~a State regulatory official, oiild "greatly intensl1~y the squeeze ~n Savings and Lc~n~." ~ So far, Gover~iors of the Federal Reserve ha've displayed little concern\ over the small CD tkend, and have shrugged off st~gestions by some S~aving~ and Loans offichils that bank CD's be restricted seve~ly-to a $100,000 minimun~, for example-to redilice competition for small savers! money. The Fed la~uno1~~cs a .~urvoy The Fed apparently feels that small CD's remain the exception rather an the rule. Nonetheless, it's noteworthy that the s~rstem recenthly conducted a sur- vey of banks to determine, among other things, how widespread is the us of small OP's. The results have not yet been compiled, according to a Fed~ral Reserve spokesman. Bankers offering small CD's report relatively fe~v savers are switching depo its out of banks' 4 percent savings accounts to buy th~ higher-yielding time depo its. One reason, bank~rs ~ Is that per~ns with savings accounts in banks, if t ey were concerned about collecting masimum inter$t, would have shifted t eir accounts to a sav1r~gs and loan long ago. The bankers are~ coming up with rtither compli4ted nomenclature to dress up their new CD's. Pomona's Island Bank, whose ~1D's differ only in detail fr in those offered by many other banks, calls them "bonds" and Is offering f ur separate "series," The smhllest, "series D discoUnt bonds," consists of be fis offered at a minimum of $19.50 each. At the end of 5 years, a D bond matu es at $25. Its effective yearly Interest rate amounts to 5~64 percent. Meantime, it can be redeemed with 5 percenh interest after 90 days. "Series K growth bonds" are sold for $500 and up ; the 5 percent rate is co - pounded monthly and yields 28.2 percent over a b-year period, or an avera e annual yield ol! 5A14 ~ercent. Buyers of "seri~ C inc~me bonds~" sold in minimu denominations of $$OO, receive an Interest cheek 4wice a year, at a 5-perce t quarterly eompou$ rate. Flimily, for the perso4 who has everything but a mon~h1v interest eb~eck, "series ~M income bonds'~ are sold in denominatlo s of $1,000 and pay th~ buyer monthly interest at the ~5-percent annual rate. Th bolder of a $1,000 OM bond, for example, receives a $fi.16 check monthly. PAGENO="0557" 551 DEMONSTRATION CITIES ~D RBAN DEVELOPMENT [From the *all Stree1~I J ur al, Feb; ~8, 1966~ ExHI~ I -B MONEY FLOW INTO MORTGAGES ~ F4i 5 ERdI~P I~T 1966, HoME LOAN BANic CUIEF ~ RN SAYS (By a W~iU ~tTeet/J q al staff reporter) WASHINGTON-The GovermneZit's t~p en ~ngs and loan supervisor said the flow o~f money into miortgages i4ay drop /~ c~ 5 .per~it during 19&~ but honsiug e~uetrt~ctiou isii't expected 1x~fa1~ th:at/ ~ . ~ ~ J'oI~n E. home, Ohairma~t# of the ~ `4 ai I~o~é Loan Bank Board, said the floreca~ts of a decline o~ $1~ to $I:~ ~i ik~ in m'órt~age ~mouey availability this ye~tr in comparison with 19~5 "~tigge~t n~ re of a rise In interest rates than seine expected earlier." / In a speech to the NatIq~ia1 Lea~ c4~ Inst~ed savings Associations' annuai legislative meeting here, Mr~ I~orn~ s 14 the situation has fa~orab1e as1i~ecth In that "lenders can be more ~e1e~tive ~j d ~ old those practices that a severe over- supply of funds encourage~." The f' lid stringency" inmortgage fund supplies, he added, wouldn't justif~ the dis~t~'i t o~ne Loan ranks in giving associations "wide~open, unrestric~ed a~ces~" to ~ di~ Separately, a Board o~cia~ con~r e~l repør~s that 3 more of the 12 Federal Home Loan banks have i~ais~'d th~ at they charge associations for adva~ices. The New york bank wen~ to 5 fro~ 4~ percent, the Popeka bank to 5 froth 4~ percent, and the Cincinn.ar bank to/p /~ ~ em 4~/8 percent. ~ "SH~i ~ ITHME~" The Increases, for th~ most p~ . j~* dicted, f~l1o~v several Home Loan bank rate increases of last~m~ntb~ whe~ t a~. said ~that "sheer arithmetic" indicate~T additional rises would be n~icess' ~ a the banks "can't borrow and relend at a losis,'~ at least not for lop~. ~ ~ Because borrowing eósI~s ~f It is~ let biguk system are climbing in line wItl~ moi~ey market rates gei1era~ly, e e ~ th~str7 i*pr~seiitatives believe a 5-percent rate on advances couidsbon been ~ t ` iuost eonux~on one. Factors tending to sl~rip1~ mor ga~ tlow~, 1~Lr. home said, include a "drawing av~ay" from mortgagé~ b~r his r i1~S companies, banks' traditional mortgage cuthaek~ In prelods of tigl~t ere 1 ~ ti th~ "somewhat smaller" flow of savings to Savings and Loan~ dUe to ~ ~ r cx~tii~ioi~ frain banks ,~nd secur1tie~ markets. ~ ~ ~ 0 E~ EVELOP1~1ENTS ~ Aside from the diff~cnl1~ of b ~ ing fi1~neing for some projects, Mr. Horne .sltld, other developmE~nts may Ii id `ack housing starts. Inventories of fln~o1d new houses are `hig1~er ~tan : ~ ~ e des~rable," he said, ~ even though they cle-~ dined to 220,000 lat~ last ye r fr im 260,000 early in 1964. "Any significant increase in single-family dwe~ii ~ onstructlon this year would increase inven- tories," he saId, partly ~eeau~e ~ ktlon Of fli~W ho~seholds isn't expected t~, grow much this y~ar~ above tl~ 5 ~* ar avèra~e annual rate of 900,000 units. ~ ~ Higher cnnst~vtjo~ ~o~ts in~. te d to have a ~ater dampening effect on starts this year than in perio4s wii~h "l~ go urgent, backlogs of demand," Mr~ Horn~ satd. ~ flon1e!JDuik1n1~ costs h~r ~ an ave~age 2 percent In eac'h~ o1~ the past ~5~y~ear~, with a 3.5~ercént J4 ~t ring 1~65~ lie added. Now is a good time t& *Coi~reet "imbalanees~' in the 1~o si g markets,. Mr. Home urged, citing the "higl~ level of foreclosure~" p~tsis1~j g ~L spite genersi prosperity. ~ Mr. Home also ~oug1it~ ln~l st~ support i~or a White House-backed proposal that would give th~ Bo~ard ~d itt pal snper~i~M'y~ tools. Soon to be int~odnoed, he S~C1d, this bill would al1o~v the Boai~d' to I~it.e öeas&and-deslst orders to halt illegal actions that threaten/a a sociation with substantial loss and that w~uld .Jet it ramc~ve,, in ~oi~e si~tuta~o ~ s, Macre and directors. ~ Po~rers would ~e ~lih~itec1J y ~ arious prQvtsIons, Mr. home said, and would disru~t an ~sso~Si'~tJ1oti les~ i~ the Bo'âDd's present "last resiort'~ ones that termin~th döpos4t l~si±ran~ or result ~ in eots~lete takeover. Federal D~p~1t Insurance Coropr~4on~ he s id, ~ nteud~ t~ seek similar authority o~eir tanks~ PAGENO="0558" 552 D1~MONSTRATION CITIES AND~ URBAN DEVELOPMENT Mr. BARRETT. All time has expired and we are going to ha e as our next witness Mr. Jack McDonald, chai~rman, Board of Count~ Super- visors, Wayne County, Mich. STATEMEN~I OP JACK IVIeDONALD, CII~&IRMAR, BOARD OP C UNTY SUPERVISORS, WAYNE OOU1ITY, M~CK. ; ACCOMPANIED B C. B. WARD, GENERAL COUNS1~L Mr. MCDONALD. Mr. Chairman and iriembers of the committ e, my name is Jack McDonald and I am chairmaii of the Board of uper- visors of Wayne Coimty, Mich., the coi~nty seat of which is D troit. I. am appearing here today on behalf o~ the National Association of Counties, an organization representing cc~unty government throu hout the country. URBAN DEVELOPMENT ACT-TITLE I-GRA~TS TO ASSIST IN PLA NED METROPOLITAN DEVEI4~PMENT In our viè~, President Johnson's mes~age of January 26, t ans- mitting his recommendations on metropolitan planning and the city demonstration program has a singularly i~nderlying theme-the eed to mobilize the coordinated resources of the entire metropolitan nd urban areas if they are to successfully engage the myriad of probl s confronting them. For years, county officials have been struggi g to devise procedures, governmental arran~einents and programs to meet the increasing demands brought abo4 by urbanization. The county's problem is coiripounded by 4 limited tax base whic is often unrealisthmlly encumbered by State r9strictions and which d es not share the al~ility tokeep pace with the risc of our gross natio al product as to other taxes, specifically the inc~me tax. Consequently, it is mandatory that counties and other local governments avoid cost y duplication of effort by encouraging a cooperative approach to the sol - tion of problems shared by adjacent counties and the cities and tow s within their boundaries. These factors have resulted in the formulation of the following basi guideline and policies which are incorporate4 in the American count~r platform, the official policy statement of the ~National Association o~ ~ Counties. H.R. 1~939 and H.R. 12946 would ~issist these policy objeci~ ~ tives and we urge their enactment. Certain commoil problems facing our citiz~ns, such as transporta- ;tion, planning, wa~ter supply and wasth-wa.teiP disposal, civil defense, open space, industrial development and otherS which transcend local geographical borders, must be approached from an areawide point of view because existing governmental units, acting alone, are not capable of finding equitable and effective solutions. In order to cope with tlies~ problems, the N~ational Association of Counties strongly supports the principle of voluntary cooperation among all levels of gpvernment concerned, parti4ularly between county and other local officlais. We note the evolutio4 of various voluntary regional cooperatiOn groups consisting of local~units of government, whose officials study mutual problems, and in the spirit of the give-and- take of the conference table, evaluate the facts in an endeavor to arrive at sensible, politically acceptable solutions. PAGENO="0559" We~, of sueh ~ (1 INCENTIVE IN STATE EFror~ I V~B~ DE LI regionwid~ poll- PAGENO="0560" 554 DEMONSTRATION CITIES AND URBAN DEVELOPMEN copy of this editorial be made a pait4f my testimony and.inc\luded in the commiUee's hearing. ~ ~ Mr. BAi~ju~rr. Without thjection, so~rdered. ~ (The edi1x~riaJ referred 1z~ follows :) ~ [From the American Coudt~T Government] EDITORIAL-A CouNrr Um~AN Ai~rsi~a~ AND Fnnni~tL AID (By Bernard F. HiJ1enb~and, editor) For the last 3 years we have urged that every county, urban and rura , estab~ lish a new pesition of county urban adviser. We have ettgge~ted these duties : t Under ~ ~upervision of the county boa~d and i~i ~operation wit other county agenele$, he would make stud~es, eurve~Ts, ~uid reports with recom enda- tions on urba&probleins euch as water .supj~ly ~tnd sewage, parks and reer ation, refuse dispos8i~, air pollution, industrial and ee4~nemic défelopuient, civil d fense, police and fir~retection, and ~affic control. ~ 2. Under the~ supervision of the county ~oar~, and in cooperation with other county agencies, he would help to coordinate th~ work of all county govern ental agencies and pi~ivate business In bringing a untfied approach to the solut on of urban problems. 3. He would be responsible for creating genuisie cooperation on urban m tters between the eopnty and its component municipalities and other county, sub- divisions. 4. He would, in cooperation with the State as~ociation of county officials, uni- versities, and otJ~er puhlie and private assoeiati4ns and institutions, make ~vail- able the latt~tin~ormat1on on new developmentsi~i urbap rnt~tters. :5 As~dwi~r t~ thecounty board~ be would se4ve as principal point of eor~tact between the coUnL~and the State oi~ all urban ~4atters Involving State 11nai~cia1 aid, te~hnieal ass~stanee, or other assIstance. ~ 4~;. As adviser to the b~ard, he would be g *sour~ of infoI~ination on Federa~, fi- nanelal, and te~hn1cal itrban assistance to loeal~gevernments, individuals, ~ind businesses. On the basis of this last point alone-serving ~s eomtact on Federal aid ~ro- grams.-a person could easily pay his way in alm~st any county. This issu~ of American county gOvernment highlights the 17 new Federal aid programs- urban and rural-~that have been created by the B9th Cougress. There are up to200 such programs already in existence. ~ IDach county couid profit enorlnousl3r by having 4ne local person survey eoui~ty needs, identify de~irable Federal. programs 4esig4ed to meet these needs, a~id finally prepare appl~cat1onsand eo~dlñate the resufljlng programs. \ More than twO-thirds of our poj~ulation is now ~bverned by some 300 urb~n counties. 1~iven the most rural county now finds t~iat it must deal with urban' problems suehas ~i1tuming, zoning, and eanitation. ~ ~ Oertainly ~ery county goyerning body could uE4~ the advice and coun~el ~f someone tratned in the often extremely technical urb~n problems. * We suggest that he be a technician and not a poli~maker. He must be highl~r trained in urban administration. His qualifications would be similar to thos~ of a county or city administrator. He would be appointed by and immediatel~r answerable to the county governing body or its designated chief administrativ~ officer. His entire salary should be paid by the con4ty and jiot shared with the State or Federal Governthents. He would not, in an~r sense, be a decisionmaker~ lie would be an urba~i advieer to the board, the eotu~1tyiidniiniotrator, the elect and appointed ~ount~Iepautmenthoads, 4tnd the publi~ ~t large. In some of the s~i4fler counties perhaps a eounty~ official could be dele~a*ted these responsibiliti~ 4nan ex officio baste. ~ Very shortly NAOO~will announce an expanded Fechfra1 aid service and it would be extremely helpful 1~o participating counties if as a~ bare minimum one person in the county were designated as a point of contact out B~ederal aid matters. Reactions to the creation of county urban adviser have generally been favor- able. Many have pointed out that our urban adviser performs in part many of the duties of the. appointed county administrator or ~ôunty manager. This is certainly true. The ~itthan adviser concej~t is a "ha1fw~y house" approach to the age-o14 problem of th~ absence in most counties of l~ga1 authority for an ap~ pointed or elected county executive. PAGENO="0561" DEMONSTRATION CI~IE'S A i TJEBAN DEVELOPMENT A county could experiment legally b oiz~g paiflt oJ~ the distance toward an ex~ ecutive head with an urban `~dv~ser. I i'~ doesn't work the position can easily be abolished. I In any event, we suspe~t it ~s worth ~ t y. / W~ believe it will work. Mr. MCDONALD. Mr. ~-Ii1~enb a c~ /poii~ted out that for the last ~ years, NACO has urged1that e~v ~ ~unty, urban and rural, establish a new position of county .ad~rise t bjave the following duties: 1. Under the supervi~ioi~t of t e ounty board, and in cooperation with other county agei~cies he /woti d make studies, surveys, and re~ ports with recommendatiozis o r1~ n problems such as water supply and sewage, parks and *eci~eati ~i r~ use disposal, air pollution, indus- trial, and economic d~vel~pm ti , * ivil defense, police and fire pro- tection, and traffic cont~rol. 2. Under the supervision o he county board, and in' cooperation with other county age~aci~s, h o ld help to coordinate the work of all county governmen~ai ~gen~oi s nd private business i4 bringing a umfied approach to the sc~1uti~i oE urban problems. 3. He would be responsible/f r reating genuine cooperation on ur- ban matters between t~he coun ~ d its component municipalities and other county subdivi~ioi~s. 4. He would, in c~op~rati ~i th the State association of county ~ officials, universities, and ot~ r ublic and pHvate associations and institutions, make a~.railable t e atest information on new develop- ments in urban matters. 5. As adviser to tl~e c~unt ~ d, he would. serste as principal point of contact between the ~oun t~ d the State on all urban matters in- volving State financial ~dd, h ical assistance, or other assistance. ~. As adviser to t~he boar `, 1$ would be a source of information on Federal, financial, akid tech ~ al rb~th assistance to local gOvernments, individuai~, and b~sinêsses ~You will note th$t items , 5, nd 6 are the type of activity provided for by "Grants for urban ~n o ation centers." Since January 1 of this year, approxii~at~ly 1~ o our counties have estthlished a posi- tion comparable t~ the on~ n gested in Mr. Hillenbrand's editorial. We appreciate th~ activit~ oposed for the county and urban ad- viser exceed those! pr~vid~d ç by title TV of this bill, however, we would request that at least h~ portion of our county urban adviser's program, conforniing to ~i e V be eligible for assistance under this bill. We feel th~It langu~ e ~n the committee's report could accóm- plish this. Wei ~o~4d fi~ h~ suggest that assistance under title IV also be made av~i~able to d uz~ ies in excess of 50,000 population which are not a part of t~he stan~a U etropolitan statistical areas. Counties which are SMSA~ in t~nd ~f tl~ mselves, would, of course, qualify under the pres~t prov~sio~is o1~ ~ ~ . ill. ~ Other areas of the country sho~ild receive compara~le ~ssis~t~ c as a part oi~ the community development districts. We d~ h~,ve ~ servatión with respect to the county ur- ban adviser. Due to tl~e i portance of his position and the unique relationship he:wi~[ ha~ ~ th the governing body of the county, it ~h~uid be wb~wdan~1y cl~ r ~ at he is strictly *a ~ounty government em~ ployee and in n~ w~y a a~t or Federal official. ~ ~ cO~878-66~pt. i~8 ~ 555 F PAGENO="0562" 556 DE~EONSTRATION CITI1~S AND ~JRBAN DEVELOPMENT COMPE~HENSIVE NEIGTUBORHOOD D4&ONSTRATION PRO~RAM Our offici~1 policy statement is silentt ~ the proposal em odied in the city demonstration program oth~r than our policy of e cour- aging governmental cooperation through financial incentives As initially stated, it is our opinion that the thrust. of both the rban Development Act and the community demonstration program is to encourage and facilitate a coordinated effort to meet the social and physical needs of our urban areas. W~e echo the concern o the American Institute of P1annei~s that the ~itles of the two bills ould appear to perpetuate the undesirable and ~inequitable pattern of rag- mentation of urban areas by having one program for the core-ce tral city and the other for the suburbs. Both ~programs will require oni- parable areawide coordination and coopei~ation if they are to be no- cessfui and should be considered as an en~tity.. With respect to ny efforts to rebuild or revitalize entire neighborhoods of slums d blighted areas, we feel it is vital to bear in mind that such areas are ot limited to th~ core-central city. The Advisory `Commission on In er- governmental Relations study on metropc~litan social and econo ic disparities ; implications for intergovermr~e.ntal relations in cent al cities and subui~bs, disapproves the popula~iy held misconception of a basic central d~ity-suburban dicotomy of 4conomic and social oh r- acteristics. By this we mean the idea that the social and econo ic underprivileged ~re consistently concentratedin the central city whi e the suburbs enjoy the prosperity of the middle and upper inco e families. Of the 190 SMSA considered in the Advisory Commission's study only in the largest metropolitan areas and those located in t e Northeast part of the country was the pattern one of a predominance of the underprivileged in the central city. In small- and medium-sized metropolitan 4reas, outside the North east, elements of the low social economic statu~ was equally importan in the central cit~* and in the suburbs. In i4any metropolitan area of the South and West, poverty is more typic4 of the suburbs. Sine the demonstration ~projects are to take place in~all parts of the country and in communities varying in size, the proje~ts will often not be in the central city. Consequently, if they are done, it will require the sponsorship of the county or one of the suburban communities. One of our Pennsylvania members set forth the situation as follows: We in Lackawanna County feel that in order for t1~e city demonstration pro- gram to be a success, it must reach out beyond the mi~nicipai boundaries of our major city. In order to understand and to solve the pr4hlems of our urhan areas we must disregard these municipal boundaries. Evc~ry person living in our urban area is confronted with similar problems whi4li must be met bead on through regional effort~. We must look at our probl~ms of physical develop- mont in a broad settlng~ By improving our major citie~ we are improving only a small part of our met*opOlitanarea. If, however, we renew several neighbor- hoods in smaller communities these actions will serve ~as a stimulus for other actions. In Lackawanna County, as in many other counties, the urbanized areas do not stop at the city's limits-it radiates out from the city or it extends through the valleys for many `miles beyond the central city. Th~s~ areas oftentimes are just as old, just as blighted, and just as mueh in need of ~peclal programs as our central cities. The second point I would like to stress was br~rnght out by Secre- tary Weaver's testimo~iy where he stated, "that th1 city demonstration PAGENO="0563" so fo~ esseni or ne Consequently, W( would be more a~ will avoid a creating a areawide co projects rn." Act, and what " there be some Lrtiicipate. This mt to match any an ~ ~~ion~ BTJI DING CODES Section 4(c) (3) requires tim the program be designed to make max- imum use of new and improve technology and design including. cost reduction in techniques. To a sist in utilizing our known technology and cost-reduction techniques, e urge that Congress direct the prep~- ration of a model building c de. Today, it is estimated that there are 5,000 separate building co es in the United States. A great many communities have no codes t all. Most of the existing codes are specification codes. Many of these have restricted the free use of Un- improved products because any of the specification codes favor one product over another an thereby restrict competition. A~t present there are four ajor proprietary codes sold to local sub- scribers. Manufacturers hair pointed out that the variations between these codes and restrictions dded by their subscribers have made it difficult to apply fully mass manufacturing techniques to the factory and national sale of housin and building components. Such a mass process is comparable to th se which have given us the relatively in- expensive automobile and electrical appliance. One authoritative magazine has estimated tha the code jungle may add $1,000 to the cost of new houses. The National Associatio of Counties joins the Advisory Commis- sion on Intergovernmental Relations in recommending that all levels of government and the p oprietary code groups participate in the drafting of a model perfo ance code. It recommends that the draft~ ing be done by a separate group or as a part of the program of the temporary National Corn ission on Codes, Zoning, and Tax Commis- sion and Development S andards recommended by the President's 1965 message on urban a as. We appreciate very mu h the opportunity of participating in these hearings today and I wi 1 be pleased to answer any questions you might have regarding ou testimony. Mr. BAm~Drr. Mr. Mc onald, I certainly want to thank ~you for a very splendid statement. I DEMONSTRATION CITIES ~D /V~BAN DEVELOPMENT 557 progn program, t ~r.any provision to could be acc State contr~ PAGENO="0564" 558 DE~ON~TRATION C1PIE~ AND ~RBM~ DEVELOPMENT On page ~ 4 of your statement you 4iscuss the proposal-t e pro-~ posed new program of grants for information centers. Thi is an entirely n~* idea before this committe4~. I wonder if you he rd the~ testimony of Mr. Blackmon, of the Home Builders, who precede you ~ Mr. Blackmon, thought that instead of urban information cen ers, it would be preferable that the information be made available th ougli the coordinators. Do you agree with th~ Home Builders' reco men- dation? Mr. MCDO*ALD. I will have to clarify 4iat a bit, sir. We of the National Association of C4unties feel that this c ordi- nator for these programs could and shoild ~ a county employ e, an employee of either the county or, in som~ cases, an employee of xist-- ing intergovernmental units that would prbvide this service. In our area, for instance, in Detroit, we have an organization i ade up of si~ counties, a committee that works in many areawide prob ems and it was our thought that perhaps in t1~at area, the coordinato of' these programs could be the coordinator of that body to handle the programs for the entire area. Mr. BAmu~ri. Why would we have to l~ave two . officers instea of' one ? Can you comment on that ? Mr. MoDoN~r~D. I am not suggesting th4t we have two. I am s ` g- gesting that we~have one officer. I am sug~esting that we really h ye the center of the coordinator, or whatever you want to call him, he' would work for the local unit, the county, and in this case would be' working on a supplemental grant from the Federal Government to provide his salary. Mr. BARRETT. Let me a~k you this question. As you know, H. 12946 provides open-end authorization for atppropriation for the su - plemental grants under the proposed urba~i development progra Apparently you ~eel that the $2~ million re~uested by the Preside t in his budget me~sage is too little for these ~grants. Could you gi e us some idea of h~ow much would be needed ~ñ the first year and ho this program mightgrow ? Mr. MOD0NAW. Well, it would be difficult to say, to answer tha question. I might point out that many of the problems inherent in the bid' city,, and those that we are trying to take care of in the other bill, are~ those in the suburban areas and in some eases,teven in the rural areas. It is our feeling and in our discussions-if ~we were to set a figure on what would be needed, it would pretty t4uch coincide with the demonstration city~ Mr. BARRETr. M~. Fino? Mr. Fn~o. Mr. McDonald, I understand tha Wayne County, or at least the city of D~roit, imposes a 1-percent i~icome tax on the com- muters who earn their livelihood in the city of Detroit. Is it not a fact that the ultimate goal of metropolitan planning is the power of' regional local taxation in order to pay for the se~vices of local govern- ment ? Mr. MoDoNA~u. I will have to ask you to go~ over that once more.. Mr. FIN0. Is it n~t a fact. that the ultimate ~goal of metropolitan planning is the power of regional local taxatio4 in order to pay for' the services of local g~vernment? Mr. McDoNALD. I think the reason for metr~politan planning is' that we could build o~ir metropolitan areas on a ~~lan that would make PAGENO="0565" DEMONSTRATION CITIES A D URBAN DEVELOPMENT . 559 ~,some sense so we could provide for t e eeds of the people ai~d provide for these needs in transportation, a er and sewage, solid waste dis- -posal, in the best possible manner. Certainly, the funds for these ar ing to have to be raised in many ways, the local communities' parti i tion in some area, like we have ~ with our metropolitan tax in our ar a, they would have to be supported by the individual counties or cities. Mr. FIN0. On the subject of req ir ments for metropolitan compre- hensive planning, there is nothing in he law or administrative regula- tions requiring that any one part cu ar organization be used. I-low- ~ev~r, does not this lead to a sing b dy being set up with the Secre- tary's approval and if you do n t join this particular organization, are not urban planning aids being e ied to nonjoiners? Mr. MCDONALD. Well, it woul b difficult for me to answer that. I might give you some informa io to consider with our area. We have a group of planners called th Detroit Regional Planning As- sociation that does a great deal f lanning for the entire six-county area. They would be the body ha would be designated as planners under these programs. Now, in addition to tlhat, of co rs , each county has a planning com- mission, planning consultants, a d i addition to that, each of the cities rand many of the unincorporate to nships have planners. But as well as possible, all of hi local planning is designed to work into the areawide six-county p an that is under the direction of the Detroit Regional Planning Corn i sion. Mr. FIN0. In a number of are s, ou have old county systems that are working effectively. Would y u ant to give these up for this new :metrowide planning concept? Mr. MCDONALD. Of course, he answer is a qualified "No." Certanily, most. of the plann ng should be done locally for all of the local needs. However, there re some areas in our system that have to be planned on a metropolit n basis. Now, sewage disposal treat- ment is one, for instance. In ur area we have a study underway that is to be implemented for solid as disposal. Now, this is a voluntary program. rfhis is a plan that a created by our group, our six-county committee, to dispose oE solid w ste in the Detroit metropolitan area. T[t is a voluntary program. e ope to enter into a contract with the authorities for this purpose. Mr. FIN0. Now, in the urb n evelopment bill, the extra grants are coupled with conditions and re equisites for planning. Congressman Widnall has t oduced a bill aimed at suburban water and sewer problems which s ts up central standards for qualifying. Are you familiar with the bill ? Mr. MCDONALD. I have ju t anced at the bill but I could comment on it if you like. Mr. FIN0. Of th~ two pro os ls, which would you prefer? Mr. MCDONALD. I think er aps we have to look at this insofar as the area of need is concerne . We have many suburban areas in this country, for instance. In 1 72 the suburbs will have a greater popu- lation than the city of Detr it, in our country alone. This is going to necessitate a great deal of w te in the areas of local water lines, sewage lines-sewage treatment to m extent. These problems have to e et today. These folks have to have a place to live and these sub ivi ions have to be created and I wouldn't PAGENO="0566" 560 DEMONSTRATION CITIES AND tRBAN DEVELOPMENT want to see peopie go without these proper qm~ters bec.aus~ of the time involved ~nd in having adequate ~egiona1 plans for all the~e van- oils areas of concern right now. ~ ~ ~ . I think that the bill that you ri~ntio~iecl might be a good on~ for a stopgap at this time. But I think f~r the future, the NA~O has agreed, as ~ matter of fact, in the eo~inty platform, that m~ny of these items should be done on a regio~ial, cooperative basis, ~s well as the planning for these regional ar~ü. Mr. WARD. If I might add, Mr. Find, currently our associa~ion is carrying out a project in conjunction with the Public Health S~ryice to try to encourage county governments ~to get more active in the\prob- lem of water pollution control. We ake holding a series of ~5 re- gional meetings one in your home .Stat~, one in Mr. Barrett's state, and one in Mr. Widnall's State, this spring to get the county go~ern- ments more involved with water pollution~ It is probably one of the most cnitica1~ things facing local go~rern- ment today, a~id in this ~udy we have vi~ited approximately 60 corn- munities throughout the country and we ~iave come to the conclusion, as have most people who have studied this thing, that water polh~tion is best handled on an areawide basis, and we would think in the ~net- ropolitan area where there is a metropolitan plan for water polli~tioa control, as there is in Detroit, that that should be followed and prob~bly your committee should require it to be followed. In those areas w~iere there is not a plan in existence, we woul4I think it would be ap~pro- pniate to go ahead and give a suppleme4tal grant to the subur~an areas so they c~n do it now. The condition is critical now and shouW b~ met now. But as far as having to choose between ~fr. Widnall's bill and he Urban Development Act, it seems to us the latter one is more ~ n- compassing, has wore aspects to it, and w~ wouldn't want to have\ to choose, if we were to choose between the two, water pollution is v~ny critical, but these other things and facilities are needed in the co~n- munity, too, and if they are done on an areawide, coperative ba~is, we think a Federal incentive is helpful and does encourage us to ~et together on a county~city basis and multic4unty basis, and work i~o- gether economically. ~ With respect to his metropolitan question ~ou asked, we specifical'y stated in our te$timony that even with thi~s increased emphasis c~n metropolitan planning, it should . be made a~bundantly clear that ~s~e are not requiring or demanding the counties or the cities give up tie authority of planning for those functions which are strictly withi the county itself. And wo think this should go on.full force a~r~d by doing so we thin it encourages the counties to cooperate together. ~ . Mr. FIN0. Mr. McDonald, in calling for a~ single building code i place of the other codes now in existence, you~are overlooking the dif ference in building requirem4~nts ijke in Mai1e~ and Florida and 1111 nois and Louisiana, California, Oklahoma. ~ Mr. MoDoN~in. Yes, sir, we ~iiscussed tl~t in accordance with the weather conditions and ground conditio~s~ and so on. And it would be thought that in this single. building code, there would be stipulations made as to the areas. / PAGENO="0567" DEMONSTRATION CITIES ~ D URBAN DEVELOPMENT 561 eDonald, about ~r. ment. I want t has aiw Mr. Mr. ~ Mr. Mr. in Te~ fully I propo~ areas what a C ship as C ~ ~ ~ It seems to me one possible demonstration would be, what can be do~ie in tlke oo~nsolidation, avoiding duplication of services within your local i~ tr politan or county areas? As one example, ~n ri~iy d~s ri~ , and at the moment it consists of the county-the distric~ is the ~ ~ ixi as the county limits, as of this year. Within that district there ~r ci se to some 39 different taxes by polit- ical subdivisions. This, 1/ i k is a continuing problem, since the county system in texas d~t s ack to the constitution of 1875 where a person could tra~vel froi~ n end of the county to the other, and I was just wondering if you /w u d consider one of the aspects that could be undertaken as ~Iemonstfr tiO , the work that can be done toward an interagency or intercity n'~e r~ olitan development plan? Mr. MCDONALI~. To y~u uestion, or statement, first of all, the National Associat~ion of ~o i~ ies have been strongly in favor of reor~ ganization of the county g ire ment itself. It has fostered workable plans for county home r~ e cross the country. In Michigan, th our n~ c nstitution, some 3 years ago a provision was made with e~nabling 1 gi lation to reorganize our counties in the home-rule s~ituation, Further, in ottr area, i so ar as the duplication of efforts are con- cerned, we are study of the formulation of a group that would be 404 govermnenta.l taxing units in our six-county soui i area. That would the cities and townships, and the counties, but ~icts. It is our fe they have a big part in this picture and in fact as far taxes are concerned, they pay the bulk of TEPHEN5. rj interested a is in Michigan, but ave got to check out care- sin consideration ~ - PAGENO="0568" 562 DIbMONSTRATION CIPIE~ AND URBAN DEVELOPMENT it. So w~ are in the proce~s now of~formu1ating this coinn~ittee of 100 which would organize all of these ~overnmental districts nto one workable group to solve our common ~probiems. I think it is a step in the right direction. We had one of the first, as a matter of fact, intergovernmental groups of this kind in the Nation, in our six-co~inty supervisors, in the county committee, and this is a committee ma~e up of representative of six counties in ~outheastern Michigan and through this committee e are making studies and are in the process of~solving many of our pr blems i~hich include sewage treatment and c~isposal, areawide wate pro- grams, solid~ waste disposal. We ha$ had studies concerni g the ~ metropolit~i area facilities. This has been a very good grou and certainly we would like to see somethi~g fostered that would have groups around the country get together and solve problems n an areawide, mutual basis. Mr. GONZALEZ. Did you say you did get\an enabling legislation bout 3 years ago in Michigan to provide fo~, roughly speaking, co nty home rule ? ~ ~ Mr. McDoN~ui. Unfortunately, in Mic~gan, we have had a pro lem with the enabling legislation. Our new co4~titution provided for h me rule. There w~s enabling legislation that ~would be given to us by the legislature of the `State. We have rtin irtto some problems ther in obtaining this legislation and we are in the effort, in this partic lar session in Michigan, of trying to bring pressure to bear to see t it that we do get some type of legislation this year. Mr. GONZALEZ. Thank you very much. Mr. BARRETr. Thank you very much, Mr. McDonald, for maki g a very splendid witness here. We appreciate your coming. All time ha~ 4~pired and the committee twill stand in recess un 11 10 o'clock tomori~ow morning. (Whereupon, a,t 12:20 p.m., the subcommittee adjourned, to i~eco - vene at 10 a.m., Wednesday, March 9, 19~6.) \ \ PAGENO="0569" D:Fi.MO'NSTRATION CITIES ~ URBAN DEVELOPMENT WEDNESDA , RCH 9, 1966 Hous F EFRESENTATIVES, SUBCO IT E ON HOUSING OF THE C0MMI ~ 0 BANKING AND CURRENCY, 1Va~hington, D.C. The subcommittee met, purs a t o recess, at 10 a.rn., in room 2128, Rayburn House Office Buildin , H n. William A. Barrett. (chairman. of the subcommittee) presidin Present : Representatives B r et , Mrs. Sullivan, Moorhead, St Ger- main, Gonzalez, Reuss, and Fi Alsopresent : Representative o nson of the full committee. Mr. BARRETT. The committee wi I come to order. Our first witness this morni g i Nathaniel Keith, representing the National Housing Conference. I wonder, Mr. Keith, if you w uld be kind enough to let us extend our congressional courtesy to no of our most able and knowledgeable colleagues who wants to be r co ized to submit a statement for the record. Mr. KEITH. I would 1$ very h p'y to. Mr. BARRETT. Oongressma aaden, please come to the witness table. Congressman, we are certa ni pleased to have such a distinguished and knowledgeable Member of Congress, one recognized for his very fine work on the Rules Corn it ee, who has been recognized by all the Members from all the States in he House for his splendid and untiring cooperation. Certainly your statement he e this morning I am quite sure is going to be helpful to this cornnii tee in rnarking up this bill. You may choose any wa y u desire to submit your statement-you may either submit it for e r cord or if you desire to read your state- iiient, we will be glad to i e by whatever you choose. STATEMENT O~ HON. Y L MADDEN, A REPRESENTATIVE IN CONGRESS 0 THE STATE OP INDIANA Mr. MADDEN. Mr. Ch i n, I want to commend ~hairrnan Patman and you, Chairman Ba tt, f the subcommittee, and also the members of the Banking and Cu r n y Committee for holding hearings on this legislation in order to rng about. some method wherein we can relieve the deplorable sit.uatio th t exists in a number of our metropolitan cities. H.R. 12341 proposes .o ssist cities in rebuilding slum and blight areas and providing pu li facilities and other municipal functions to aid the general welfare f e people. 563 PAGENO="0570" 564 \ D1~MONSTRATION CITIES AND~ URBAN DEVELOPMENT I know there are many m~tropo1itan cities throughout ou Nation that have been undergoing a "population explosion" during th~ last 20 years and especially since World War II. These congested h~calities are handicapped and distressed in their efforts to meet the n\eeds of crowded conditions pertaining to housi~ig, transportation, scho~ls, and many other municipal improvements a~d necessities. A half century ago our Nation ~ras~not confronted with th\e phe- nomenal exQdus of mfflions of our po~ulation into our urban\ areas which has taken place in recent years. ~ It is estimated that over 70 percent of our population today has been crowded into metrop~litan areas. City governments in these largre urban concentrations ~re fi- nancially helph~ss to meet the housing, school, transportation~ and other problems facing millions of thei~r citizens. This legislp~tion which you are considering will be a majoi~ step to curtail and solv~ the problem which is expanding in urban centers as the years pass. I realize your committee has been hea4irig testimony from ma ors and municipal officials concerning their ~artieular necessities, a d I want to submit to your committee an outs~anding example of a cit in my district which would be greatly benefit4d if the pending legisla ion were enacted into law. I Gary, md., might be an outstanding model as a "logical demons ra- tion city" which needs outside financial aid and supervision to so ye its municipal problems. Gary, with a population of a little un er 200,000, is the youngest metropolitan city inthe United States. Gary's population started exploding at th~ beginning of World W~tr IT. The largest steel mill in the world is loc4ted in the city. We hate other steel subsidiaries as well as minor in4ustries pertaining to d~- fense production in the city of Gary. Ea4 Chicago, Whiting, an~l Hammond, three smaller industrial cities joi4 the city of Gary. ~ Ea~t Chicago has two ~majorsthel mills, Youngst~wn and Inland, `and re~- fineries from ma~br oil companies are locate4 in the Calumet region~ All this concentration of defense industries h~,s caused the populatior~ explosion in the city of Gary. In the last 20 rears the population has risen in Lake County, which is known as the Calumet industrial region, from 240,000 to over 600,000 in 1966. The taxpayers-homeowners especially-are unable to bear the taxload in order to supply the aya- lanche of municipal needs for workers who h4re come into this steel- producing area since World War II, and every rear since, defense pro- duction has increaaed annually. , Thiring Worl4 War II publicity and newspaper ads call~l for workers to come into `~he Calumet region to work in the steel , mills, factories, refineries, aÜd other industries in order to meet the national defense effort. I mention these facts in order to bring out how necessary it is for legislation of this type to be passed. In order to solve the urban prob- lems that face areas like the Calumet region of Indiana. In one of President Johnson's recent speeches, he mentioned the "crowded miles of inadequate dwellings-poorly ~naintained, and fre- quently overpriced" as one of the prime reasons f~r `the Federal Gov-. ernment to make an attack on blight and slum ~areas. The city of Gary, especially, has been spending money and going in debt to "meet the population explosinn" to provide adequate hoit~ising and eliminate slums, provide school buildings `and other facilities for our over- crowded youth population. If we cannot meet tl~is challenge, areas PAGENO="0571" I DEMbNSTRATION CITIES N RI3AN DEVELOPMIBNT like these overcrowded industrial eii4ers will be victims of disease, ignorance, crime, violence and m y ~n public relief rolls. This legislation will gh~e autho i y ~o the Secretary of the Depart- ment of Housing and U~an Dev I pix~nt to make grants and provide technical assistance to en~,ble cit ~ e onstration agencies to plan, de~ velop, and carry out ~on~pr~hen ~ e ity demonstration programs. In determining wheth~r a pro s~ comprehensive city demonstra- tion program is eligible ~or ~ssis a c , the Secretary would give mi~x- imum consideration to whether ( s bstantive local laws, regulations, ~nd other requirements ~re, or a J~ expected to be, consistent with the objectives of th~ p$gP~m ; ( ) he program will enhance neigh- borhoods by applyiiI~ a~ high s a d rd of design and will, as appro~ priate, maintain distin9tiv~ na4 a historical, and cultural charac~ teristics ; (3) the progr~m is d~sgn d to make maximum use of new and improved technology and /d si , including cost reduction tech- niques ; (4) the program wjll er~c, ut ge good community relations and counteract the se~r~gat~ion of i~6 si g by race or income ; and (5) the program is consistent ~ with c~ p ehensive planning for the entire urban or metropolitan area. / ~ The bill would also authoriz t e Secretary to make~ grants to, or contract with, city de~oflsti~toi~ agencies to pay 90 percent of th~ costs of planning an4. develop' ~ comprehensive city demonstration programs. Such finithêi~iJ as~i tapce must be approved by the local governing body of the city. / I No doubt your coi4mittee ~ er/hearings will meet in executive ses- sion and determine ii~ your w~i do~n practical methods which will pro- vide a means of impl~m~ntin hi~ legislation to the satisfaction of the Federal, State, and ~he mu i ipajl governments concerned. The Gary Post Tr~bune o e t1~e last se~reral months has been carry- ing, in various editions, e 1 oi~als ~ concerning some dire needs of our rapidly expanding city.. Tj~ese various editorials printed in dif- ferent editions of the i~w'sp ei~ are too long for inclusion in my testi- mony before your committ e ~ might n~ntion some of the titles of the various editorials whic i ~l~tded the following : (1 ) "Revitalizing Downtown Gary." (2) "Lo ~ at/Our Highways and Streets." (3) "Ex- pand Hospitals-V~ise~y." ( ) ` Need : Places for Children To Play." (5) "The Medical School rv ." (~) "Cleaner Air and Water." (7) `~Equitable Tax Evaluatio . ` ( ) "Keeping Up With Education." I wish to incluae with y testimony excerpts from an editorial written by Dale E. B~lles, r., ditor of the Gary, md., Post Tribune, the following inserted on e ary 20, 1966. (1) Gary shares 1~he I~resi e t'S view that "1~66 can be the year of rebirth for American cities" It wa eg~ ning to demonstrate before the Presidential program was outliued that t me ts its requirements of being one of "those cities who help tbei~nselves" a d here there "is a serious commitment to the project on the part o~ local * /~ * a thorities." (2) Gary's city $nnci1 du~i g t e past year has formally adopted a previously promulgated metropolitan r~la , haring with the President the view that it "should be an inst~ument f~r sh rping sound urban growth-not a neglected document." (3) Gary's city council, ~wtb rglng of civic leadership, adopted last year probably the most liberal ~p n' ousing ordinance of any city in the Nation, exhibiting its rea~zation 0/f he Presidential point that "at the center of the cities' housing problem lies ~a ial discrimination." (4) On the opi~osite ~ no negative evactly, but showing need-Gary is the core of an indttstrial ar~a wh re increasing steel and other production insures 565 I PAGENO="0572" r ` ~ 566 DEMONSTRATION CITIES AND~ URBAN DEVELOPMENT growth, but has reached the point where help is needed to make sure hat "the powerful forces of urban growth" do not "overwhelm efforts to achlev orderly development." (5) Gary is still beset with what the PresUlent terms "crowded miles f made- quate dwellings-~po~rly maintained, and fre~iuently overpriced" in whi h many of its Negroes $tlll live. While twin attacks, through the housing o dinance ai~ci the new*t~urbau renewalp~o~r~n~,have ijeen launched,help will bee søntial. (6) Gary's ~ mass transportation . facillti~s1are deteriorated and ii~ equate. Its major stM~t system, cut up by railroads, i~ unsuited to carrying the n cessary load. Some ~4ans have been drafted, but a ~oordinated effort, preferab y with Federal help, is needed. (7) Gary's parks, once a point of civic pride, and its indoor cultur 1 and recreational facilities have been outgrown or become outmoded. Assist ace is needed in pushing through plans already unde~~ consideration for meetin these needs both for the present and the anticipated pOpulation. (8) Gary's "one Industry" image Is gradua~ly being altered, but ma ing it one of the major "demonstration cities" could ~tep up the program of int~nded diversification which could help make it a betçer city for all its people. Mr. BARRETT. Thank you, Oongressrna4 Madden, for your exe lient statement. ~ ~ Will Mr. K~ith be kind enough to come ji~p th the witness table? Mr. Keith, ]~ want to thank you for yo* courtesy extended to on- gressn~an~Madden. We had deeided to bring you as our first witness. As always, ~ ou have been very generous and very helpful, and `I certainly apprec ate the courtesy you have extended this morning. Mr. KErm. I am very happy to do it, Mr. ~Jha~irm:an. Mr. B~uurnrr. Now, ~fr. Keith, certa.inly~ you know this commit e wants you to feel at home here. We con4ider you part of our ig family. If you desire fo read your statement in f~ill, we may ask you so e questions after y~u have completed it. If yc~n desire to be interrupt d or submit it in part, we will be glad to go ~Io~g with your wishes-a y way you choose wilibe perfectly in order with us. STATEMENT OP NATHANIEL S. KEITK, PRESIDENT, NATIONA*. HOUSING CONYERENct~ Mr. Km~m. Thank you very much, Mr. Ch~irnmn. I have a state ment which is not ~too long. Ifit's t~greeable ~ithyou, I would like reacT it and I will oertainly be available for a.n~ questions. Mr. Chairman aa~d members of the conimitt4, I welcome this oppor- tunity to appear t~ain before this committee ~o present the views of the National Housing Conference on major l~gisl.ative proposals of. crucial importance to housing, urban renewal, and community devel- opment. As the members of the committee will recall, it was my privi- loge to appear before you last year in support of the Housing and Urban `Development Act of 1965 which represented most significant and far-reaching legislation in these fields. The~bills which are before your committee now likewise represent impoi4nt proposals by the administration for extending ne.tional programs ~f1ire~ted toward meet- ing the massive problems of urbsn and urbanizi4g communities where the greait preponder~bce of the U.$. population ~ive and work. The National Housing Oonfei~nce we~ deeply ii~ipressed by the scope and incisiveness of the President's message on th~ cities. We are like- wise impressed by the objective of the proposed Demonstration Cities Act of 1966 which is now before your committee. Notwithstanding PAGENO="0573" DEMONSTRATION CITmS AN RBAN DEVELOPMENT 567 the progress and expanding activiti s ~iredted toward the elimination of slums and blight in more than 800 co~nmunities throughout the coun- try, it is obvious to Ril of us that onl a/small fraction o~ these pressing problems have been corrected by o r *ational efforts to date and that persist in most communities large s eti/ons characterized by slums, con- gestion, poverty, and all the atten an~ social evils. TIie persistence of these conditi ns/ constitutes a glaring contradic- ~ tion to American resources and ch~evable American aspi rations to establish a decent standard of livi g ~nd a rew*~rding environment for all our population. As recent ex er~ence has shown, these large areas Of blight, dilapidation and povert a$ also breeding grounds for social disorders which are a blot on the ith/age of American society, at home and in the world. / On behalf of the National Ho si~g Conference, I therefore register our enthusiastic endorsement of t e broad objectives of the Demonstra- tion Cities Act of 1966 to launc assive local programs for the up- grading of broad sections of ci ies through the concentrated and co- ordinated use of all available F deral aids and local private and governmental resources, includ g the supplementary Federal grants. proposed by the bill. We are in full accord with the findings and declaration of purpose set fort i section 2 of the bill. We welcome its recognition also that the so ut on of the human problems in these areas require more than the ii g ading of the physical environment and must involve equally a gre t i tensification of social programs and services. In keeping with the long-te ommitment of the National Housing Conference to programs leadi g o a massive expansion in the supply of adequate housing for low a d moder~te-incoine families and in- dividuals and of essential co unity facilities and serviceS, we wel- come the explicit recognitio f these needs in the declaration of purpose of the bill, in the de ni ion of comprehensive city demonstra- tion programs contained in s cti n 4, and in the statement of relocation requiremeiits set forth in sect on 9. The comprehensive and c or mated attack on these problem areas proposed in the bill t.herefo e olds forth the promise of, greatly ex- panded local programs an g `eatly expanded Federal assistance to communities to overcome t blots on American society. We are convinced that, on the basi o experience and progress in communi- ties over the past decades nd of the growing recognition of the need for greatly ~c~3anded effor s ~ this direction, these objectives can be achieved provided sufficie ederal financial support and leadership are forthcoming. Our reservations with es ect to the content of the bill which is before your committee do no run to its objectives, which we enthusi- astically support. Our es rvations run rather to the question of whether the Federal res ur es which would be available under the bill are sufficient to reali e t ese promises. Specifically, I would like to present the following c m ents to the committee: First, while the langu ge of the bill itself does not place a ceiling on the number of cities hch could participate in the demonstration cities program, the prese ta ion by the administration and the amount of supplemental Federa fi ancial assistance proposed indicate clearly an intent to limit parti ip tion, for the time being at least, to 65 or PAGENO="0574" 568 DEMONSTRATION CITIES AND URBAN DEVELOPMENT 70 cities o:~ varying sizes. There can ~be no question that the number of cities throughout the United States which are qualified to . eet the requirements for a demonstration program as set forth in the ill and which would be vitally interested in availing themselves of this imagi- native broader approach are substantbilly in excess of this n~imber~ In the interest of the long-overdue expa~ision in our national pr~grams for elimination ~ of slums and blight, ~e seriously question a \policy which would discriminate against citie~ of equal capacity and\ equal conunitment~to accomplish the Iaudable~objectives of the bill. In this cotinection, I would like to q~ote the following signi~tlcant paragraph from President Johnson's i~iessage, with which ~ are wholly in accbrd: There are 1~ew cities or towns in Afl~erica which could not participate n the demonstration cities program. We shall take s~ecia1 care to see that urba com~ munities of all ~izes are included. For each such community, the impact f the program will be significant, involving as inuth as 15 to 20 percent o the existing substandard structures. We therefçre strongly urge that the co~niittee in taking actio on this bill make jt clear that the benefits of t1~ie cities demonstration ro- gram shall be ~vailable to all qualified cit~es which apply and in the order of their application. We also stroligly recommend that contr~ct authority for the t tal supplemental demonstration grant of $2,30p million recommended by the President be authorized in this bill, to become available imme i- ately upon the enactment of the legislation. The volume of the - suing applications from qualified cities would then place both t administration and the Congress in positionto gage the longrun n for financing of the cities demonstration pr4gram, which clearly wi 1 be greatly in excess of the $2,300 million. Second, anot1i~r factor of equaliy great c~icem is the inadequa e financing of the u~iderlying programs which ~ou1d establish the basi for city demonstration programs. It is cle~r that the most funda mental of these programs is urban renewal ~~hich obviously woul represent the core of any extensive city demo~istration program. A, previous witnesses before this committee have pointed out, the urbaii renewal capital grant authorization, as established by the Housing and Urban Development Act of 1965, is far below the rate of requests for commitments for eligible projects which are currently being re- ceived from the more than 800 communities~ partici~pating in that program. The result is that there is a curre~t backlog of applica- tion's involving mOr~e than $800 million in capi1~aJ grant commitments and that commitn~.ent authority for any new p4qjects, no matter `how meritorious or urgeritly needed, are evidently riot possible before the beginning of the nest fiscal year. Furtliermor~,when the additional contract authority of $725 million for the fiscal year 1966-67 becomes available on July 1 of this year, the indications are that the backlog of pending eligible applications will rapidly exhaust this amount unTless the progress of the program is to be arbitrarily cui~tailed. The whole implication of the Demonstration Ci ies Act is that urban renewal activity in the participating cities will' have to be greatly expanded. in order to accomplish `the objectives of the program. This situation leads us to t~wo major conclflsions First, that the urb~tn renewal program as s~ch is substantially underfinanced and, second, that the increased demands for urban PAGENO="0575" DEMONSTRATION CjTIES ROAN DEVELOPMENT 569 renewal commitments whi~h ~wi11 ~e ~nerated by the demonstration cities program can be accommod~ d 4nly through a curtai1mei~t of urban renewal funds for other e~i lb e projects either in the same cities or in other commun~tie~ not~ a ~ icipating in the demonstration program. . ~ I The alternative, which we ~tror~g y rge this committee to consid6r, is to increase subst~antia1~y t~e i~ a renewal authorization. Prior to the submission of the propos~d D monstration Cities Act by the~ administration, the Board o1~ Dir~ ô~ of the National Housing Con- ference, `t~cting on the r~con~uner~d ti us of its broadly based legiskt- tiire policy committee, ui~ged in p ce ber 1965 that the capital grant authorization for urban1 rei~ew~ e ncrea~~d by $1 billion per year for a 3-year period. T~his wasl ~ ~ d on the evidence of oonstantly increasing lo~al demand for rn~b renewal ass~stance and such ac- tion is even more pertin4nt nowl ~`ew of the further demands which will be generated by the demon4r ti n `cities `program. If such action is not IfeaMblela, t is session of Congress, `as a mini~ mum we strongly reoor~im~nd t~ ~ e balance of the `contract `author- ity `of $2,900 million ~nade `at la le by the 1965 ~ act for a. 4-year period be released wi~out Iin~U ati n `a's to fiscal years. This would have the result of satisfying p~ e `backlog demands, the continuing applications which w~Ul b~ file~I y ommunities `at an increasing rate, and the increased de~iai~ds i~ * rwill be generated by the demon- stration cities prograth. Thi'~ o ld also place the `Congress in posi- tion to reappraise th~ long-t~ ontinuing need for urban renewal funds in 1967 or 1968~. J~ecai~ts o the long leacitime involved in ur- ban renewal `activitie~ b~twee~ he initial commitment of capital grant funds `and their act$l e~pe~d tu e during project execution, the irn- pact of such `action on bud~ a expenditures in `the next 2 fiscal years would be of ver~r small ~ op rtions. Three, in the lightlof the 1~a -r aching objectives of the Demonstra.- ti'on Cities Act, cothpara'bTh pr blems of underfin'andng would be presented by related gi~ant ~ og ams `authorized by the Housing `and Urban Development Act o'~ 9~ which would be involved in many if not all of the loc~al demqp~ tr ti'on programs. I refer ~articularly to the programs fo~ gr~nts ~ r' asic `water `and `sewer facilities, grants for neighborhood ~faciliti'e~, a d grants for urban open space and beautification. ~ I As stated previ9usly, tl~Je N tional Housing Conference is strong~ ly in accord `with the obje ti es `of `the bill for an increase in the supply of adequate housing or ow- and moderate-income families and individuals `as an i~dispen~ 1 element in the undertaking of the pro- posed demon'strati/on prop iu . We point out to the `committee that the `accomplishme~its of th~s oh ective `and the satisfaction of the reloca- tion requirements of the `~i 1 ` ill necessarily require the development of new housing aM `rel'at~ co munity `facilities either on vacant land or on other sites not ini~o vi g sttbstantial residential displacement. We, therefore, r~commei~d tO the committee that `clarifying language be incorporateçl in the 1~i 1 ` ecognizing that Federal `assistance will . be necessary for `such r~ do tial development, `whether or not con- `tamed `in the dep~on'stra~i' n ` rogram `area as such or within the mu- ni'cipal limits of the citie~ nv~ ived. `In `concludin~ my co `~ ts ~ on the Demonstration Cities Act of 1966, I' wish to reitera hø `strong support of the National Housing PAGENO="0576" ~57o ~EMONST~A~I~ON CIPTh~S AN XJRBAN Confer~nçe for the far~reaching objeiives set Mrth by the bil and our equally strong recommendations for ~rnendments as suggest d previ- ously to make the achiev~nent of these objectives a feasibi reality. I would also like to express the ~eneral support of the ational Housing Conference for the objectives~of the Urban Develop ent Act., :[LR. 12946. . The goals set forth in ti~ie 1 of that bill with r gard to iriore effective coordinatedmetropolita4i area planning and pro ramed .developm~t have long been supported~by. the National Housi g Con- ference. T~i. our opinion, the supplem4itary grants for certai types ,of developn~ent facilities which would ~e authorized for metro olitan areas meetiXig the requirements of thii~s title would provide n im- portant incentive for the development of sound metropolitan plans and program~ to accommodate the vast expansion in population which will occur . in these areas over the coming ctecades. We, the efore, recommend favorable action by the con~mittee ~ on this proposa . At the same time, we again point out to t1~ committee that the re uire- nients fo~ public facilities of all types wl~ich will be needed in su port of the impen~ding sharp expansion in r4etropolitan area popu ation will greatly exceed present funding of~the related federally ided programs an~ that substantial increases ii~ these authorizations w 11 be essential in vitew ~ the severe financial ~imitations on local go em- mental financjal resources. The National. Housing Conference is likewise in accord with the general objectives of title 2 of the Urban Development Act for ed- eral assistance for the development of well~ planned and well bala ced new communities. . In view of the unpre~edented urban popula ion expansion which is in prospect between n4w and the end of this c n- tury, we are fully convinced of the essent~dity of Federal finan ial assistance for t1~e sound development of g4ierally selfTcontained n w communities tó~accommodate part of this population growth and to relieve congestip~i within the cities. ~ . In our judgn~nt, the most effective appro~ch to such assistance wiT be through Fed4ral financing of local land development agencies r comparable public development corporation'$ as is generally propos d in section 208 of the bill. While we recogni~e the accomplishments f certain new community developments now in progress by priva C enterprise, we believe that the broad objectiv~s of a sound large-scal program of new cbmmunities can best be acco~nplished through publi assembly ~ of land, public provision for the i~tallation of necessar land improvemen~s, and the creation of sc4nd development plan which would control the new private and public development which would then be cartied out. In our opinion, the creation of balanced n~w communities in terms of a fu1~ range of qccupational oppoituni- ties and a full range of housing and community facility opportunities can best be assured through public initiative in the first instance. For example, such balanced communities should imclude a wide range of housing accommodations, involving public housing, rent supplementa- tion and below-market housing for moderate-i4come families as well as accommodations ~ for middle income and higher income groups. The maintenance of land prices at a level suitab]~ for low- and moder- ate-income housing cbuld more readily be accomj~lished through public control of the initia1~ land development. While we support~ ~n general the principle of ~?ederal loans to land development agencies as proposed in section 208, we recommend PAGENO="0577" TT 571 an initial I DEMONSTRATION CITIES RBAN tion under in our op~n 1 year i n centers propc e that ~h ceni mnparable of the ~ B will consi mmented o PAGENO="0578" 572 DE~MONSTRATION CITiES AND URBAN DEVELOPMENT amount ofa loan, grant, or combined \loan and grant for repairs and improveme~nth to owner-occupied dw4llings in rural areas or farm service buildings necessary to make them safe and sanitary ; amend- ments to authorize direct loans to private nonprofit corporations and consumer cooperatives for housing for low-income rural families gen- emily, and amendments to authorize rent supplement payments on be- half of low-income tenants on rental housing in rural areas financed by direct loans to private nonprofit corpprations or consumer coopera- tives. In conclusIon, may I again express m~ sincere appreciation for this opportunity ~o present the views of the ~a~tional Housing Conference on the pendir~g legislation and to express~our confidence that the legis- lation recommended by this committee will again set a mileston for improved housing and community development programs fo the American people. Thank you very much, Mr. Chairman. Mr. BARRETT. Mr. Keith, I want to compliment you on your ery comprehensive statement. We are always~most pleased to hear ex rt testimony from your fine organization. Mr. KEITH. Thank you. Mr. BARREI~ Of course, you have been a friend of this commi tee over the years. W~ are certainly gratefu for your friendship nd your very fine ailid instructive help Mr. KmTH. T certainly appreciate that statement, Mr. Chairm ii. Mr. BARTRETh Mr. Keith, is it true that there are not available a y urban renewal funds for commitment for new projects before the e- ginning of the next fiscal year, June 30 ? In other words, the dema d for urban renewal funds has grown more r~pid1y than expected. s this not correct ? . Mr. KEITH. That is definitely so, Mr. ~3hair~nan. As I understand the situation currently, th~ Department of Housin and Urban Deve1~pment, because of this fiir~d situation, simply doe not have the available urban renewal contrac4 authority for this fisca year to entertain any applications for new pi~bjects, or take any fina action on them, regardless of how urgently they may be needed. Mr. BAmiErr. I have noticed, too, on your closing page you indicate the percentage of substandard and dilapidated housing in the niral areas is even greater than in the urban blighted areas. I am quite sure that Mr. Stephens on our co~imittee will ~ be greatly interested in your statement on this, and I sh~ll call his attention to it, and indicate just exactly how you people feel a~bout this. Mr. KEITH. Thank you very much, Mr. Ohairi~ian. Mr. BARRETT. Mr. Keith, I want to ask you m4re or 1e~ss a repetitious question here. I wonid like to ask you the sametquestion I asked sev- oral of the witnesses who have appeared befor~ us. It concerns the fear that some people have that the Federal coordinator which the bill would set up for each demonstration city program would be some sort~ of a dictator. I think some have called him a commissar and some call him a czar. I don't believe this, and I think the bill is cle~r that he would hot have dictatorial powers. But I would like to ask~ you some questions about this. ~ First, would the p~ople who have such fears ~fee1 better, do you think, if we renamed the Federal official the local\ coordinator rather PAGENO="0579" DEMONSThATIO~ST 4~ITIES ~D RBAN DEVELOPM1~NT 573 uestl( i unders iti~noti posal more ac- ~ of too great jection i_ the part C In my oi welcome ha' qne ~ see no oh- optional on of these jobs as ~J strongly oppose it. ~st nd, Mr. Fino, the objectives of the t would really mean pulling to- the activities that have previously clear that PAGENO="0580" F ~ 574 P~MONSTRAPION CITIES AN1~ URBAN DEVELOPMEN grams, training programs-and wo~id facilitate financiall th~ use of these programs by localities by the supplementary rant as ~ proposed. Mr. FiNo. What is the total funding you are suggesting or pro- posing forcthe various housing bills be~fore this committee? Mr. Ki~*rii. Well, as far as housing is concerned, Mr. C airman, while we ~ee over the long run a ne~d for substantial. inor ases in Fi~deral fI4aneial assistance for houEil~ig programs to serve low and moderate hicome families, at this paijticular moment in tim. we do not see any imperative need for an increase in those program at this time. `There will be a need over the years, without question. The real limitation, as we see it, that exists in the funding o exist- ing prograths-the most important and crucial limitation is the limitation on urban renewal contract capital grant funds. n that respect, what we are recommending f r this committee's con idera- tion is either to include in the legisla ion an increase in the urban renewal contract authority, an increase hat we suggest will `be ~eeded at the rath øf $1 billion a year for 3 y al's, * or if that is not f asible, we recoimm~nd that the urban renewal authorization already assed by Congress last year, in the 1965 act, ~be made available as n~eded, without a limitation as to fiscal years, which at the current r~te of demand in our opinion is found to slow up the whole rate of pr~gress in urban renewal. ~ . Mr. FIN0. Would you care to give u~ a ~ figure of how much you think ? Mr. KEITH. ~ Well, as far as urban r~newal is concerned, i our basic suggestion woul4 be followed, this would make availab e an additional $3 billion for urban renewal. ~ Our alternative select on- our alternative recommendation would riot involve any increa e in the amount of funds already authorized! by Congress for urba ~ newal, but would make them available *ithout an arbitrary ii ita- tion as to. fiscal year. I think it also should be pointed out that either one of those ac ions would have a very minimal impact on the actual budgetary exp di- tures of the Federal Government for the~next few years, becaus of . the long leadtime that is inevitably involi4ed in urban reiiewal un er- takings between the date that funds are c4mmitted or earmarked ~nd the date when~. the projects are actually ~being carried out and the Federal funds ~re expended. ~ The experiefice has been there is a le~dtime in almost all c ses of at least 3 years before any Federal expenditures are made un er an urban renewal contract with a locality for a particular proj ,ct, and those expenditures then will typically be spread out over a per od of anywhere from 4 to 6 years. The release of Federal funds alre dy authorized by the Congress for commitments to needed ur an renewal projects can be made . without a~iy increase in th~ fur~ds already authorized by Congress, and with ~practically no impact n the actual Federal budget for th~ next sever~l years. Mr. FIN0. Well, Mr. Keith, do you reali~e that. out of the over 7 billion authorized for urban renewal, only ~I.5 billion has been act i- ally paid out in these 16 years that the pr4gram has been in oper - tion; that we are running $4 billion behind in our commitment; th t PAGENO="0581" I think if of urban incr~as- the execu- relocation of 2 to 3 years ~nd is available A~D/ ~ VELOPMENT 575 PAGENO="0582" I 576 DEMONSTRATION CITIES AND URBAN DEVELOPMENT involve industry, involve employment activities, SO the end result WOl11(1 be iii effect a self-contained eoi~imunity wi~h~ernployment oppor- tunities, with an industrial tax base~ as well as residential uses. Mr. FIN0. Thankyou. Mr. BARRErr. The time of the gent1~man hafls expired. I wonder, Mr. Gonzalez, if we ean~ go to Mr. Reiiss and come ba~k to you, and give you an opportunity to~look over tihe statement. Mr. GONZALEZ. I have no questions ~t this time. Mr. BAmn~rr. Mr. Reuss? Mr. Ri~uss. Thank you, Mr. Chairman. Mr. Keith, we are very grateful for your advice arni help. I foi]owed very closely your expre~sion of hearty support for the goals of the demonstration cities progi~rn and also your recommenda- tions for making sure that * the progr4m would, in fact, fulfill those goals. Some members of the subcommittee ~nd myself have had the same difficulties you have had with the size ~nd priorities of the program. I can say for myself that I am sympathetic to your recommendations that the special funds provided for the demonstration grants program be made immediately avai]able on a first-come, first-served basis, and that url)an renewal funds at least be made more readily available than they now are. In an ~ attempt to work out a first-cotne, first-served basis, Repro- sentatives Moorhead, Ashley, and inys~]f were concerned that the standards of eligibility for a deinoiistr4t~ioii cities grant be elan fled so that all ~tieS that are really qualifie~1 would be aI)le to get he] p, and that the necessarily limited funds ~iiot be dispersed over cities and projects which were of lesser qualification. With that in mind, we suggested th~ addition of a criterion to the eligibility requirements now in the ~ administration's draft bill which additional criterion would require that the sections or neighbor- hoods to be aided under the demonstratiQn grants program be those "subject to high-priority economic or social pressure, such as popula- tion density, crime rate, public welfare ~partieipation, delinquency, poverty, unemployment, educational ievel~, health and disease char- acteristics, and substandard housing." I would like~ your judgment on wlietliei~ such a sharpening of the cri.teria~woukt he useful. Mr. KEITn. it would think it would be, ~fr. Reiiss. It would cer- tainly seem to me thatlanguage of that type would he full.y consistent with our understanding of the objectives of the bill. I would think it would be helpful to have it specifically stated. From my knowledge of most cities, I think they would tend to operate on that basis in any event--from tI~e standpoii~t of selecti: ~J -~ areas for this kind of intensive and ext~isive treatmer~t. I [ ~ think it would be helpful to have the object~ves contained in I Mr. REtrss. My second question has to do ~wit1i your poilit your testimony t~nder your demonstration cities testimony. There you say, and I will paraphrase it., th~t you would reeommend that clarifying language be incorporated in the bill, recogni7~ing that Federal assistance will be necessary for reloeation of re~sid~ntia1 de- velopment, whether or not it is in the section or neighborhood or the demonstration city area. - PAGENO="0583" ~Lt is s that obj dev~1- * order to - sec- ec- -term use `stand- ) the marking- 3tration's ) with the urban is a good ~tricted to that )fl citiy grants, a way~. f a Federal urban coordinator is ~o good for major metropolitan v not in fact qualify for demon- DEMONSTRATION CITIES A~ V BAN DEVELOPMENT Well, I h - break up - tion or But 1 permit a Are -- 577 ~nistration did reason that * I think `that - these demon- 1. yes, which we ncrease in the and low- a useful role for such a PAGENO="0584" 578 I~EMON$TRATION CITIES A4 URBAN DEVELOPMEN I thinlk a imowledgeable person t~ act a~ coordin~tor and expediter and a source of information and advik~e would be helpful in a y metro- politan area that has extensive activi1~y underway~ Mr. Th~uss. Thank you. Mr. BARBEIT. Thank you, Mr. Re~ss. Mr. Keith, we certainly appreciaUe your splendid testim ny here this morning. We want to tell you that every time you ave ap~ peared before this eommittee, it is mo t edifying. Thanks ye much. Mr. KF~ITII. I certainly appreeiate it. ~ It is always a pri ilege to be with. yQU. Thank you very much. ~ ~ . ~ Mr. B~mm Our next witness istone of our great may rs from Pennsylvthiia, Josej~h W. Barr, Jr., nt~yor of Oil City, Pa., t stifying on behalf of the National League o~f Cities and the Penn ylvania League of Cities. Mr. Barr, woi~ld you come forward to the witness table, ple~se. Mr. BAm~. Thank you very much, Mr. Ohairman. Mr. BAiuwrr. Mr. Barr, it is .certa~nly nice to have you ere ~ this morning. I ~ ~ . We have quite an outstanding thingj in common. I happen' to be a Pennsylvaiidan, and I constantly hear fof this great mayor, J e Barr, from Oil Gity, by one of the most cap~ble men I think that as been sent to the Congress from Pennsylva~iia representing the 2 d Con- gressional Di~triet of Pennsylvania. ~I have known. him fo many years-while he was in the State senate, also interested in the m netary system of the State, as well as the entii~e country. He has co e here, now recognized as being one of the rn~st knowledgeable and apable men on the Banking and Currency C4nunittee. I am quite ure he would like to introduce you to this oomn~ittee. Mr. Johnson, would you recommend~your very good friend to this committee. . Mr. JOH~ON. I ~eertainffy will. ~ Mr. ChaiMan and memb~rs of the su ~ * ommittee, it is a great honor for me this morning to have as a witne~s before this committe Hon.. Joseph Barr, of Oil City. I think thet Chairman rightfully s~id lie is one of Pennsylvania's outstanding mayors. He is a great booster and friend of urban renewal. . . As a result of his outstanding leadership, he has practically made a new city out of Oil City, so that Look i~iagazine recognized it 2\ years ago as one of the All-American Cities~ of the United States, which was a signal honer. ~ . . \ Mayor B*r has devoted. himself toithe jobof L ~ ~ un-P. stintingly and with devotion and at gre4t personal sa not only devoted himself to Oil City, bu~ to the Penns Tania of Cities as well. Again, I say we are very honored, M~tyor Barr, to have yo . hero before the committee this morning. . ~1 ~1 PAGENO="0585" DEMONSTRATION Now, ~ want you ~ If you des] tay do II your over- you h~ave PAGENO="0586" 580 D~MON~rRAPION CIPIE'S AND URBAN DEVELOPME T reaching Federal package yet advaneed for the creative reb ilding of our cit~ies. This package represduts a 1ogi~a1 evolution to new and more advanccd, a~ more refined ~t~ge in Federal policy n urban problems. . ~ t It opens unparalleled oj~portunity~for cities to marshal i a more orderly a~d effective way than ever b4fore the vast array of r sources, both pub~c and priv~te, to the task ~f creating a livable a d stable urban society. It offers a means for~ringing these resource to bear with more thlling impact and greathr cl~rity of purpose. I mentio~aed I am speaking on behalf of the two leagues of unici- palities. But I might emphasize here, in endorsing this legislation, I am speaking, too, from my own personal experience as a ma or who has grown from, so to speak, from thc~ grassioots, the groun up, in the evolutions of this whole urban pictui~e, particularly, of cours , from the small city standpoint. The objecttv~ of the programs repr~sented by these bills eserve the wholehearted support of all of our ~ayors of our smaller cities. It is the sma~ler cities which have the mbst to gain from the pr gram and, converskly, a great deal to contrib~ite in return to the Na ion's economic and social vitality. My testimOny will include an effort to clarify the position f the smaller cities in relation to the metropolitan ones in the overall rban scene. Smaller cities share the concern, as expressed by Mayor Cava agh, that the program, if it is to become a rea~ity to all, be comprehe sive enough, bold eiiou~h, and adequately enou~h financed to do the jo cx- pected of it. The observations on this scor4 presented in previous t ~ti- mony are of pr~ime importance. We concu4 in the specific observat ons presented by witnesses representing our m~unicipal organizations iid \y~ desire to underscore them here. Nothing could discredit and e- stroy these proposed remedies for the urban problem more quic dy and completely than inability to carry them out with dispatch a d efficiency, with comprehensiveness in scope and with adequate fundi g from the Federal level of government. On this point, it might e observed that the proposed legislation esta~1ishes as a criterion f r demonstration ei~y p~roject eligibility that th~ locality provide firm a - surance of th~ a~irailability of local matchi4g funds adequate to s e the job through properly. It is to be hoped tl~at the same criterion wi I be applied with equal realism to the provisioj~ of Federal-level fund We also wish to express our concurrence with previous testimon~ that ample financial assistance be available to all cities to cover bot the preliminary planning phase of demonstration projects and the on going planning which must accompany project execution. I think you will find me emphathzing the planning underpinning of this thing quite extensively. This is fundamental to the entire concept th~ very essence of which is comprehensiveness, and a high degree oi! ov~rall coordination. Comprehensiven~s in attack on the total p~oblem has not always been a notable characteristic of metropolitan programs in the past, often to the detriment of many of these prograths. The proposed leg- *`~ islation offers an opportunity to correct this deficiency and to establish trends and precedents in the direction of adequate metro~olitan and regional planning, recognizing this as the soundest possible under- pinning one can give to any community development undertaking. PAGENO="0587" DE~MONSTRATION CITIES AND U BAN DEVELOPMENT 581 It was observed in testimony prey on ly offered here that the pro- posed funding for planning is inadeq a , and suggestions were offered on how this could be improved. Mayor Cavanagh, I believe, parti ul rly emphasized that point. I want to say we concur fully in the su g stions on maJ~ing that funthng of the planning ample. In addition to the emphasis ur ed with respect to planning, we also concur fully in the suggestion ha applications be processed on a first-come, first.served basis subject o he requirement that demonstra- tion cities be broadly representat ye as to geographic and popula- tion distribution. . We would enter a plea here that h medium sized. and smaller cities of the Nation thus be put on an eq al ompetitive basis with the metro- politan centers in applying for d m nstration city projects. In our judgment it would be wasteful an glectful not to include the small cities in a substantiaal way, for I c n be argued that broad-scale ac- tivity of this kind deyelops more im act, dollar for dollar, in smaller communities than ii~ larger ones if only becau$e the smaller city con- stitutes a more manageable situ tio , one amenable to the genuinely eomprehensive approach such as is alled for in the proposed legisla- tion. It is pertinent at this point o ote that the President has again called for the encouragement o " ew towns" through a program of Federal assistance specified in he Urban Development Act. An ar- gument has been advanced in j sffication for these new communities that they are necessary to acco m date natural population growth in our metropolitan areas. The a e argument, it seems to us, can be applied to the problems and th de elopmentpotentials of our medium and small cities. We would li e o suggest that our existing medium and small cities are them~el es possible existing nuclei * for "new towns." They exist even no a urban centers which still enjoy a wholly human soal~ -wnd an e vironment still conducive to maximum fulfillment for the individua . These smaller urban coiicentrations represent investment in econo ~ic~ social, and human values which are eminently worth saving and evelopin~ as an invaluable resource in coping with the crisis of urb populations. , In fact, it would appear that any approach to the me ropolitan problem would be incomplete and possibly futile in the e d unless coupled with an equal effort to revitalize the smaller cities a well. What we are talking to he e, of course, is the point that this legisia- tion is and sh&uld be small city as well as large city legislation, ap- plicable to both. In Pennsylvania and Ne York, we refer to them by the general term, "upstate" urban cen ers, those lying approximately. 50 miles beyond the radius of Pit s urgh, Philadelphia, and New York City. There are some 23 such " state" cities in Pennsylvania-ranging in size and type from Erie, lliamsport, Easton, Scranton, New Castle, and York, to Meadville, radford, Sunbiiry, and Shamokin. There is a growing recognition at they differ little from Philadelphia or Pittsburgh in elemental aracter, regardless of size ; that the root problems of all of our citi s are identical, differing more in degree and intensity than in kind, a d calling for essential]y the same responses and remedies. For all of hem alike, the task of renewal and regener- PAGENO="0588" r \ 582 I~EMON8TRAPION ~I~E'I1~ AN1~ URBAN DEVELOPMENT atiOn requires the coordination of re~ources of the total government and the coticern of our entire society. A recent survey of Federal aSsistance programs by the Pennsylvania Leagi~: of Cities illustrates this poixit. Of 25 cities in our State, ranging in population from Philadelphia with her 2 million to Union- town, for example, with 17,000 people,~it was found that, predictably, Philadelphia used more of the current~y available Federal programs in terms of number of programs-20 in~ all. The survey also revea1e~ that smaller cities employ many Feder~l assistance programs, on the average, at least 10. The survey also ~ought to discover whether or not these various Federal programs we~re commonly administered or coorditiated by one agency of municipal gove~ment. The results indicate that while many of the development and hous- ing programs tend to be under the administration of the local rede- velopment agency, there has been very little central administrative or are in the process of establishing offices-usually of departmental these 25 cities, it was found, have, howev~r, either recently established or are in the process of establishing offic4s-usually of departmental status-for overall community deve1opm~t coordination, thus recog- nizing the need for a focal point for urbaii affairs within the structure of municipal government. We conclude from this, first, that our smaller communities have in- deed developed a heavy dependence on existing Federal assjstance pro- grams, and we would hope that the demonstration cities program would recognize this body of experience in the utilization of assistance and be willing to build upon it. And second, we see in the demonstra- tion cities program a very important means of stimulating the emer- gence of central administrative and coordinating mechanisms for urban affairs in cities where these do not as~yet exist, and supporting and strengthening the efforts of those cities~ which have already pro- gressed in this direction. In short, we eagerly welcome the support implicit in the demon- stration cities program for the development of better urban affairs administrative capacity in local gGvernment. A further observation on the subject of coordination is in order. I,t is essential, particularly with respect to the smaller communities, that the Federal coordinators called for in the demonstration cities bill be assigned administrative regions which conform as nearly as possible to existing regional planmng and int~rgovernmental council regions. In Pennsylvania these jurisdictional\boundaries should con- form as nearly as possible to the State pianr%ing board's 13 regions and those which wIll emerge in the newly esta~lished Department of T4Trban and Commuinity Affairs of the State of Pennsylvania. These regions are identical to the many regional planning commission juris- dictions and the regional councils of elected officials now emerging. For instance, we have the Pittsburgh-Southwesterii Pennsylvania Regional Planning Commission region which I am most familiar with, and the regional planning jurisdictions around the Philadelphia metropolitan area. Every effort is being made. in Pennsylvania t~o bring about a con- formity as `between the boundaries of these regic~ns and those of Fed- eral and State progr~m administrative districts. Our State has, for instance, successfully induced the Economic Deveiopment Administra- PAGENO="0589" tion and the Act adn within ic ~rbitrai implies a ye one. ression that E~EMONSTRi~TiON CXTI~S RI3AN DEVELOPMENT 583 Lole gail ut o ~ more directly and e of course, I i think that cities grant program. PAGENO="0590" r 584 DEMONS~rRATION CITIES AND URBAN DtVEL'OPMENT Could we have your comments on thit~t? Mr. BAm~. Well, I don't think thei~ is any questionabout it. Tin- fortunately, the image of this legisla4on has been one attached to the larger cities. Mr. B~nin~rr. Mr. Mayor, may I j~st sa~ this, Will you use your own little city as a model to indicate that certainly the small cities as well as the large cities have the same coi*litions? Mr. BAm~. Yes ; I could ~ use my city, if you don't mind, as an example. As I have indicated in this testimony, we know that the smaller cities are identical to the large ones in the `oot problems which confront them. We are involved in a tremendou~ local program amounting to an estimated totai investment of public 4nd private funds of around a million dollars per year for the next 20 ye~rs. We find ourselves using the same tecl4ques, the same approaches to these problems that are used in the metro~cilitan areas. I ~think, quite frankly, we have, over th~ past 10 years, used much of the Philadelphia approach to metropolitan problems as a prototype for our program-the refinement of their planning, the comprehensive- ness of their planning as a basis for their ~fort, the close interrelation- ship between planning and governmental i~tion, and citizen action. To us Philadelphia has served as aproto~ype. Now, I think this is emerging in the sm~iJler cities as well. Erie is doing a good job along this line, for instanc4 Well, as our testimony pointed out, of~th~25 cities which responded in the Pennsyltania League survey, every~ one has utilized the tech- niques which ar~ pretty well known in the lA.rger metropolitan centers. Mr. BAi~rn~rr; Mr. Mayor, I might be rejietitious in this question-~ but from your statement I assume you wouki agree that when the ap- plication is accepted by the Secretary indicating that the demonstra- tion city has met all the requirements, and therefore establishes a co- ordinator's office, and then appoints a diredtor-this would have no detrimental effect and would certainly not c~use you to be~ suspicious that he wou~id take over completely in you~ city or dictate to you; wouldit? Mr. BAiu~. W~l1, let me prefac~ that by si~ying that in this whole local-State-Federal interrelationship, there ~ is always, of ~ course, a legitimate fear that the local scene will be £minated by the higher levels of governmett. But I think that whether that happens or not rests entirely. with the vitality of the locality itself. Our whole philosophy in Pennsylvania-I think it represents the Pennsylvania League of Cities' point to view-i~ that the management of that total relationship must be encouraged at the local level. Other- wise, of course, the higher levels will come in to\fihl the vacuum. So assuming thatthe local community resp4ds as it should, there' is just no need whitteve~ for being subjected ~o arbitrary State or Federal level domina~ice. Our whole experietiOe has been in Oil City-if I may refer to Oil Cityagain, where wehave managed this whole thing firmly, have been in co!itroi of our dèstin~, and the State and Federal participation has been merely an extension of our local policy. And that, I think we all would agree, is the way it should be. PAGENO="0591" 585 DEMONSTRATION CITIES AND U BAN DEVELOPMENT Mr. BARRETh Thank you very muc . r. Fino ? Mr. FINO. Mr. Mayor, what is the po ulation of Oil City? Mr. BARR. About 18,500 within th unicipal limits, but what we like to call an organic community er nd beyond the formal limits that we are dealing with here as a r ctcal problemof around 25,000. Mr. FINO. I gather from the n e ii Gity that you have oil in thatcity? . Mr. BAmt It is near Titusville re the first oil well was drilled in 1859. Mr. FINO. Do you still have oil th re Mr. BAmi. There is some. But t e isapp~aranoe of oil as the basis for the economy is one of the mo iv ting features of our program. This whole program has been desi e to diversify. That is what is happening, very definitely. Mr. FINO. Now, there has bee t stimony, there has been argu- ment and discussion regarding th F deral cooHinator. This seems to have disturbed some of theme be s of the subcommittee, particu- larly yours truly. Now, suggestions have been in de No. 1, that we change the title of Federal coordinator to expe ite or adviser or something else. The feeling is that the title of ed ral coordinator might have cer- tam connotations of a czar or co issar or big boss. Now, a suggestion has been m d that possibly the cities involved or the communities involved w ul make recommendations of local people to assume the responsib I in coordinating these activities. How do you feel about that? Mr. BARR. Well, I would con ur in the point of view that as much as possible the coordinator or h expediter, whoever he is, should be selected from the local scene y s, if you can find a qualified man. Mr. FINO. In other words, y u eel that you should have a say in picking a Federal coordinator ? Mr. BARR. I would say so, efi itely ~ yes. I am wondering-you will notice in our testimony we ha e indicated from our Pennsylvania survey that our cities are movi g the direction of establishing their own-well, a lot of them call th m community development depart- ments, which are responsible or ocal administrative coordination. I think that one of the resp ns bilities of those departments should be concerned for the adequa f a local Federal coordinator, help to pick him, recommend, and f rth. Mr. FIN0. On the question of authorization of funds, Dr. Weaver has suggested in his testimo y that we go ~ip to about $2.3 billion in this program. Now, how much do you f el hat Oil City would need to get into this program? Mr. BAiu~. On that point, I ca ot answer you preoisely. Mr. FIN0. Can I give you o e idea what the others have suggested? The mayor of Detroit asked fo about $2.5 billion. The mayor of the city of New York has aske f r $2 billion. Already we have gotten over the authorization. Th m yor of the city of Newark with 400,000 people has asked for $200 ii ion. A city like yours-how much do you think you would need? Mr. BAi~. In talking t s ver roughly a few clays ago with our coordinator, we estimated t a it would call for possibly an additional PAGENO="0592" ~586 ~DEMONSTRATION CITIES A~D URBAN DEVELOPMENT ~5 percent over what we are already ~eriv.ing from our various-I think we hav~ seven programs. I should ~have that figureprecisely in mind Tfor you, but I don't. 1 think the * Federal fund element here runs around $7 or $8 million at the present time, either expended or corn- mitted to our program. A good deal of that is urban renewal money, which is on a three- quarter Federal grant biisis. The demon~tratiOn cities progran~ might add another io percent, maybe, throwing all those programs t4gether. Just as a rough guess- 10 percent of $7 million-we will sa~r another million dollars. This is ever a 20-year period. Mr. Fi~o. You are talking about Oil City. Mr. BARR. Yes. Mr. FIN0. How about the county ? How about the State of Penn- sylvania ? After all, we do have the chairman of the subcommittee coming fromPennsylvania-Philadelphia more particularly-and we . want to be sure they are not short changed. Mr. BARR. It might amount to a little more `than that, because with the emergence of the povei±y program~ phase `of this thing, just now getting started, to which no funds hav~ been previously committed- *1 presume that would swell it. In answer to that, and I think that ~s a very pertinent and inter- esting question-this survey from whh~h I quoted will, wher~ it is completed, probably give us some figures on that. At the moment, this survey has not ~ been able to develop 4ollar amounts of Federal funds which are committed to our Pennsyl$nia cities. Now, having once gotten that basic fig~ire, I think this study g~oup can go on and maybe get you a more pr~cise answer. I will ft~llow that through if you would care to have so~ne further fi~ires on it.\ Mr. BARRET~r. Mr. Mayor-I wonder i~ the gentleman from ~`Iew York would yield to me. ~ Mr. FIN0. I &~ertainly do. ~ Mr. BARRETT. I certainly appreciate the gentleman from New ork looking out for the welfare of Pennsylvania. But as chairman of the subcommittee, I'm greatly interested in seeing that no people, no cit'es, no areas in dire need for this kind of money are not getting their a e- quate amount. Mr. BAm~. Yes. ~ Mr. BARRE~E'r. Everybody in every area that needs it-certainl I think we ought to work toward that end-~o see that they get it. I appreciate the ge~itleman'~ interest. ~ Mr. BARR. Referring back to the comme~t of a previous witne S here, as I came in, possibly that could be one-k-an additional element in the criteria, the ihtensity ~f need. W~ certainly do not want to over- look first off the ateas of greatest need. Mr. FIN0. Well, let me justthrow out a que~ion. Do you think that $2.3 billion is going to take care of 60 or 70 cities that the Seóretary talks about. ~ . Mr. BARR. It ëA~rtainly isnot. Mr. FIN0. Digressing fç~ one moment-4nd &nly because you brought in the poverty program-I was curiou~ to know, becaus~ of all the ci~iticism On thi* poverty program-does t~e director of the pov- erty program in your city receive more salary than you do? I PAGENO="0593" ; ~ D.EMONS~RAPIO~ ~ CI~IES A D V BAN DEVELOPMENT 587 Mr. BARR. There is no çth~ector a e~ but Ipresume he wilL, As a . part-timb mayor, so to sp&~k, ~wor i g. nil tithe, my salary is $2,500, I don't mind saying. ~ ~ ~ Mr. FIN0. Then for sur~ the p v rt director will get more than that. Mr. BAirn. He is pretty ~ur~ to c e p to that. I might be looking for that job myself. j . Mr. FIN0. Now, ~s to p~anning Ii e is nothing in the law or ad- ministrative regulation~stl1at requ ~ s ny one agency to be chosen. However, doesn't the f~ot that o ~ the Secretary of the Housing and Urban Development aJpprove o e netropolitan agency, that makes that agency the deteriuining fact , a d th~ nonjoiners are~ somewhat penalized by being denie4 Feder 1. i for failure to sign up for what- ever reason they might h~ve ~ ~ I mean do you feel tl1i~ is the r pç~ ~ approach-this one agency? ~ Mr. BARR. I ~1fl not sulre that n erstand the question completely. But it's my understandipg that e ~ gislation requires that whatever the local agency is whiqh i~ sel c e41, `that the whole program be en- clorsed and supported ofticially t e elected ofilcials of the munici- pality. . , Mr. FINO. Well, the con~em s tl~ t once this agency is created and set up, this is like a uni~m-~-yo av to join in order to qualify. Mr. BARR. I will have to ad i tl~at `I am not entirely familiar with the provisions of the act that ott/ are talking about. I would say this, though. I feel i~ather s r ~rtgly, and `J think it represents our Pennsylvania League ~oliey, h t ~Svery effort should be made to' see . that the elected munh~ipa1 o ~ cial~-in other words, the city. govern- . ment-be the focal point for is ~ortof thing. City hall should be at the apex of this whole co u~ity development process. I would not endorse the idea of sobe 1 s er/agency in the community being this focal point. The selebtion of hatever local' agency this. is does place that agency right at the cent r of the whole community development effort. I would preftr, myse f tc~ see the city council made that very agency. Mr. FINO. Thank you, Mr. BARRETT. Mrs~ Sulliv n . ~ Mrs. StTLtIVAN. T~hank .yo M . Chairman. I have no questions of the mayor, but I tho~ight he gh to have an explanation of why there . are so many absente~s this o iii g, and why I was late this morning. ` We were invited 4owii to h hite House to witness the swearing in of the new Governo±~ of the d al Reserve Board. I saw mostof my colleagues down there. So `t at s the reason we were not here to hear all of your testirnon~. Mr. BARR. I app*eciate yp r c ming. ` ` Mrs. StTLLIVAN. What ~ id hear, I thought was very good and `enlightening. I agree wit~i 0 that we cannot put all of this demon- stration money. j~/ ju~t th~ ` ar er cities. I think we should have a number of varft~u~ size ci~i s n' order to make a good evaluation of how this program would ~o k. ` I appreciate~yo~i.i~ comii~g a telling us your views on this. ` Mr.BARR. Thank :vou, ~[ s.i ullivan. ` . ` ~ Mr. BArtRETh Dhank ~o ~ ~ r. Mayor~ We certainly are grateful for your very fine sthtem t. We appreciate your cOming here. PAGENO="0594" 588 MONSTRA~J~IO~ * CITIES A~D URBAN flEVELOPMENT Mr. BARR. Again my appreciation~to you. Mr. BARRrn. Our next witness this morning is a very distinguishec1~ Member of Congress from Delaware, the Honorable 1-Tarris B. Mc-~ Dow~l1, Jr. We also expected to hear from t~ie Honorable John E. Babiarz,~ mayor of Wilmington, Del., but he spijained his ankle in an unfortunate accident and cannot be with us toda~. However, we will receive his written stutement and incorporate it~ in the record at the conclusion of Mr. McDowell's testimony. Congressman McDowell, you may proceed in your own way. STATEMENT OP HON. HARRIS B. McDOWELL, fl~, A REPBESENTA~ TIVE IN CONGRESS PBOIVf THE STATE OP DELAWARE Mr. MCDOWELL. Thank you, Mr. Oh4irman. Mr. Chairman and members of the ~mmitthe, I would like to take this opportunity to express to you m~y support for the three bills proposed by the administration to carry out recommendations of the President ii~ his message to Congress on city demonstration pro rams and to improve and extend housing and urban development legis ation. These bills are carefully designed and jnstify the hopes of thos of us who last year supported the proposal to establish the Departm nt of Housing and Urban Development. The Urban Development Act would provide new incentives for ifec- tive metropolitan planniiag and developr~nt in the form of incr ased financial aid to federally assisted proje~s of types which gene ally affect the growth of metropolitan areas, ~u~h as transportation f ciii- ties, including mass transit, roads, and aiijorth, water and sewer f ciii- ties, and recreation and other open-spac&areas. The supplementary grant could not exceed 20 percent of the cost of these projects. The need for such aid wa~ underscored by President Johnson in his mes age to Congress when he said: The powerful forces of urban growth threaten te overwhelm efforts to ach eve orderly development. A metropolitan plan should be an instrulnent for sha lug sound urban growth-not a neglected document. Sound planning is a sound and wise in'~restment. Approximat ly 125 million Americans live in metropolitan~areas, and this is expec ed to increase to 1~O million by 1985. Federa~, State, and local gove n- ments will be ~ending during these yea*s, billions of dollars r schools, highways and other forms of transp~rtation, parks, sewer, a d water systems, and other community faciiiti~s. Careful and effecti e planning can greatly reduce the capital costs of these services and, t the same time, make major contributions to the goal of a suitab e living environment for every American family. In the Housing Act of 1965, Congress enacted a significant ne program of FHA mortgage insurance for privately-financed lan development. As this program has developec~, it has become clear tim on]y large developers can ~articipatè in it be~ause of the heavy finan cial demands required for site preparation. Etren for large developers the financing avaihible is often inadequate for ~ciently scheduled land development operations. Moreover, the cost i~ often out of line with the financing charges that permit small scale land development and the actual construction of housing. PAGENO="0595" DEMONSTRATION CITIES AND ~ A~ DEV~LOPMENP 589 This bill will permit small builder~ t p rtieipate in this FHA pro- gram. If this segment of the biiil g ~dustry is excluded, if our small and medium-sized buiH~r~ are U a~ l~ to make the eontributions of which `they are capable, our Nati ~t nds to forfeit the resources which derive from a diversifi~d 1~omeb ii ing in~iustry. The Housing and T5rban IDevelo ~ Amendments of 1966 will make other needed changes ~n t~he 1 s~ ovex'nifig existing programs. I believe Congress must be /wil~ing. t ~ ~ opt ameiidments which will make these housing progralms wor bØ ter when they are based on actual working experience a~ these h ~ e d onstrated. One such amendment wo~ild pe i 1 nders, who~ make loans under the FHA title I property ithprOve ~ ~ t ro~am to &~llect th~ one-half of 1 percent insurance pr~ii~thith fr ~ ~ e bor~øwer. This is the only FHA program under which t~e o ~ ~ o the insurance is not directly borne by the borrower. The ~ vol ~ e i f this program has dedined~ greatly, and it is expected/that b i ng lend~r~ the small increase recommended by the admix~ist$tio n he return on their loans, more loans will be made. With4~ut such 1 ~ ~ homeowners~ especially those~ of low- and moderate-inc~m~s, ~ ~ ~ ~ unable to obtain emergency home repair credit with4t payi ~` 1~ h or even exorbitant interest rates. This seems to me to be ~ de ~ b~ step. ~ The limit on the amount of ~ ~ p e mortgage i~isured by FHA under its special prograi~n for 1 ~ d mod rate incomes, and dis- placed families would be ~inc~eas ~l fr m $11,O 0 to $12,500 in the case of a one-fathu1~ home, a~d tfro 1$ 000 to ~O,OOO in the case of a two-family home, and is/ m~de ~ e~ ary by ncrea~sed home costs. Another amendment, ~hi~h se ~ t me to ave considerable merit, would permit local hou~ng ant ~ iti s to lea e dw~l1ings without re- gard to the 3-year 1imi~ation i ~ he presen law in cases where the housing is needed for lo~r-ir~com a ilies dis laced by urban renewal,, highway construction, o~ other O ~ ~ mental actions. This provision would be very helpful tb l~cal usi g auth rities, and would enable them to provide housing fo~ `lar* 4'splaced families, many of which have been on the waiti~ig list ~ ublic h using for years. At the. present time, local hou~in~ au r~ ie~ ~an ot assure what will hap- pen to these. families when the p es ntly an horized short-term leases end. `The provision of/ longer t leases ould prevent further in- security to thosedisplaóed by u ai~ renewal, highway construction, or other public.improvem~nts. ~ ` Still another provision in t i b 11 woui~I enable local housing au~ thorities to lease housing to ` 0 structed/. Here, again, increasing interest is being show~rr by p 1 a buildei~s and the private housing industry in general in/wo~kin ii publk~ housing authorities in the development of housi~ag for o - `come ~arnilies. This amendment would result in costh~s~ibstanti ~ y ower th~n can `be achieved by many local public housing authóriti ~ a~ would ~esult in substantial savings to~the taxpayers. TI~is ~mex~d e t' wouiçl provide, as Dr. Robert C. Weaver, Secretary o~ the H~vii ii~ and `Urban Development Depart- ment,has said :~ `. . `. / ` I ~ Additional sttznizlus ~or liluch ~ er part!' ipatlon bv prWate `building in~ terests ~1n the 1o~r~itt 1z~iistug pr ~ ~ ~ . ` PAGENO="0596" ~59o DEMONSTRATION CITIES 4ND URBAN DEVELOPM NT TMsis a very desirable objective,~for, as Dr. Weaver has mphasized: The rising costs of ii&using constrne4on, and increasingly corn lex problems of urbax~ growth, make it imperative th~t we make the most use a least of the technological advances in knowledge that have already been made in the areas of housing construction and design and u~ban development. The `Demonstration Cities Act of 1966 is the most imp rtant pro- posal in President Johnson's. progr~m for rebuilding Amerca's cities. In his message to the Congress recommending this bill, President Johnson said :, From the experience of three decades, ~1t is clear to me that Âme lean cities require a program that will-~ Conentrate our available resource*-in planning tools, in h using con- struction, in job training, in health f~cilities, in recreation, in elfare pro- grams, in education-to improve the ~onditions of life in urban areas. Join together all available talent ahd skills in a coordinated effort. ` Mobilize local leadership and private initiative, so that local citizens will determine the shape of their new city. The President pointed out that this bill would "offer qt~alifying cities of all sizes the promise of a n~w life for their people.~' I am pleased to say that I have joined with a number of the M&~ibers of the Congress in both the House and' ~he Senate in cosponsoi~ing this measure which has aroused such wi4espread interest among urban dwellers, citty officers, and the news me~ia. The problems confronting our citie~ today have been wide~y pub- licized in the newspapers, on the radib and television broadc~~sts, in ~textbooks and periodicals, and in pasts hearings befoTe congrE~ssional committees. Slums and blight are widespread. Persons of ~ow in- ~comes have tended to concentrate in our cities as the suburbs have grown and proliferated. The spread of blight, and the overcr~wding of established communities have tended to create new slums. Tax funds to cope' with these problems have~ declined as the taxable value ~of slum and blighted areas has declin~l. It is a depressing cycle, for at the very time that the need `for pi4blie services multiplies n our ~cities, the eit~y's financial ability to prov~ide these needed servic has been impaired. Sometimes, it has beco~ne clear, the cities wit the greatest slum problems have the least ca~city for solving them. New methods and new techniques have become necessary and it is to hese problems that this Demonstration Cities ~ct of 1966 is addressed The Administration bill establishes Federal "urban coordina~ors" `to assist onlythose cities qualifying for the demonstration cities\pro- gram. The amendment which I have offerbd, instead of setting up~new and special coordinating offices, would uLilize the `t6 existing 1~HA regional directors, who between them, ha4 jurisdiction for all oi~ the urban areas in the `50 States. After aIl,if t~ie principle of coordin4ion is sound, `as I I~elieve it to be, it is sound f~r all, of our cities, not `just `for those whickare selected and qualify und~sr the Demonstration Ci~ties Act. My amendment provides' that to the extent that they need a4di- ~tional specialized help, the Secretary of the Housing and Urban De~el- ~opment is directed to provide it. The amendment would have the advantage, over the formulation tendered by the administration,\ of ~cost saving through utilizing existing decentralized Federal person el rand offices. It could provide' the needed cookdination immediately a d it would provide for all urban areas not `ust the limited 60 or 0 PAGENO="0597" DEMONSTRATION CITIES AND RB DEVELOPMENT 591 cities which are expected to participa e i the dëmohstration cities program. I would hope that the way I see to amend the Demonstra- tion Cities Act will commend it to you co mittee and that it will be adopted. I offer it in a constructive and el ful spirit. I would hope very much that Wilm g on, Del., will be one of the cities selected for the demonstration cit es program authorized by this legislation. Wilmington has shown its interest n nd its support for Federal housing programs. Through the corn in tion of an alert city govern- ment, and with the sup~)ort of busines a ci civic leaders, and with the help of the Federal Government, it ha 1 unched programs to provide better housing for its many low- and od rate-income families, and to provide downtown revitalization as w ii s improved educational and recreation facilities. If any city meets the requirements of he demonstration cities pro- gram, Wilmington, Del., does, for it s mong those cities which help themselves. Its efforts over the p s s eral years demonstrate that there is a serious commitment to th r ject on the part of local * * * authorities. Wilmington has buil , h ugh the years by the use of federally assisted housing progra s a latform from which further sound experiment and developinen an e launched and executed and from which sound urban growth ca e s aped. Wilmington can be characteriz d as the core of Delaware's indus- trial and manufacturing complex. t as, I believe, reached the level where help is sorely needed to assu e th t the iowerful forces of urban growth do not overwhelm Delawar ` e orts to achieve orderly develop- ment. Mr. Chairman, I pledge my fu 1 su Port for this legislation and I appreciate very much this opport ity to submit my views to this dis- tinguished committee. Mr. BARRETT. Congressman M o eli, I do not have any questions to ask you, but I do want to compi en you on your very fine statement. Mr. MCDOWELL. Thank you, M . C airman. ( The statement of Mayor Babi r f liows:) STATEMENT BY JOHN E. BABIARz, M ~ i~ F WILMINGTON, DEL., IN SUPPORT OF THE PROPOSED DEMONS ATI N CiTIES ACT OF 1966 Mr. Chairman, I am pleased to h e t e opportunity to appear before this subcommittee of the Committee on B in and Currency of the House of Repre- sentatives. Harris B. McDowell, C n res man at Large from Delaware, intro- cluced H.R. 13292, which in my opinion con ains a number of improvements which will strengtlwn the purposes and inten s of the Demonstration Cities Act of 19643. I am also a member of the advisory board of the U.S. Conference of Mayors, and chairman of the Regional Confer nce of Elected Officials, a regional group extending from Wilmington, Del., on the south to Trenton, N.J., on the north, a highly industrialized area in the D laware River Valley with Philadelphia as the major city at the core. I am appearing before your corn ittee on behalf of the 92,000 citizens of my community, its many community ide and neighborhood organizations, and city and State government agencies concerned with the health and welfare of all of our residents. I am here t support ER. 13292-the Demonstration Cities Act of 19~6. First, I should 1 ke to state that I concur with the findings and recommendations made by Ma or Jerome P. Cavanagh of Detroit, who appeared before your subcommittee to testify on the Demonstration Cities Act on behalf of the U.S. Conference of ayors and the National League of Cities. PAGENO="0598" 592. DtF~MONSTRATJON CIflES 4ND URBAN. DEV]~LOPM NT The findings and purposes of the pen*~nstrat1on Cities Act go to lie very root of the ~ many\ pro~1en~s facing cities ~ a$ city administrations i our Nation today ; the nee~ to imprOve the qua1lty~ of our urban life, the ne d to develop better programs br ~ the housing of outk low-income population, th ~ continuing deterioration of our resiiienUaJneIghbor1~°odS,and the inability of ci ies, on their own, to provide the resources necessary ~to arrest their continuing ecay. Per- haps mQst ftx~portant among the many problems of our community, and others. Is the ezttenie dilIiciiIty in coordinating a~l of the many Federal, Sta e, and local programs~ available to us Under coinpr4hensive policy direction. H.R. 13292 adthessè~itSe1f to ~these matters, aud fo4jhe first time offers hope ~ o all cities that a ~prehensive approach to urbau p*blems can be made. 1~1:y ~wzi commuuity-WiiW~n~tOn-i5 a ~ood example. Indeed, we are looking forward to participating in the demonstration cities program. For despite the fact that we have a st~rong program for c~inpr.ehensive planning and re partici- pating in anumber of metropolitan plannftig efforts ; for despite t~he f ct that we have an urban renewal program. which will take advantage. of all ]~` deral and local tools for renewal ; for despite the fa~t that our community acti program has pioneered In a number of significant p~ograms ; for despite the fa t that we have strong and able civic l~adershlp wotjdng hand in hand with G vernment on many cOmmunity prob1em~; despite all pf these facts we need new dimension in our appr~ach to urba~n blig~it and decaytin the years ahead. In m opinion, this bill tak~es a giant step toward the fulfi1~r~ent of our needs. Another l~nportaiIt proposal of this bill 14t~ie provision of adclltiona financial assistance t~ cities to enable them to par~klpate more effectively I existing Federal assistance programS~ Let. me give ~you an example from my wn * corn- munity. indev~loping future capital budget and program requiremen s result- lug from the recommendations of our community renewal program, Wil ington's planning staff estimates that over 75 percent of our capital spending over the next 6-year period must be for urban renewal project contributions or renewal associated pnblic works projects. This mea~as that we will have to de er other important and needed programs such as open space acquisition, impr vements to water and sewer facilities, public ~ safet*,. or nonrenewa~ associate public works, or reduce our proposed conlmitthent 14 the retiewal program. T e added financial assiStance ~proposed in the Demons1~ration Cities Act will per it us to meetsubstaikl3IaUy mare of our r~newal and 4ther comniunity obligation within a rèasonable~bort period. It w~1l also permi~ us to participate in other ederal grant prograr~1S that heretofore have been i~navallable due to a lack f local matching funds. ~ H.R. 13292, introduced by Representative *arris B. M~Dowell, of Do aware, It seems to me, offers a number of improvern~nts that should be serious y con- sidered by this committee. First of all, section 4 of the bill spells o , t in a comprehensive way the relationship between existing programs for reb, ilding cities and the proposed demonstrations cities program. It is absolutely essen- tjal, in my opinion, that the new program be ~ continuation and strengt ening of present programs for renewal, 1~ot1i physical~and social. $econd, I wou d like to support the concept contained in this bill t~iat the regional directors f the Feçleral Housiflg Administration act as the urban coordinator for the ~ etro- politan area in ~whieh a d~mons1±atiofl cities pi~ogram is underway. By p acing the primary regponsibility for coordim~tion i4 the regional FHA office, local initiative, local decisionmaking, and local respo~isibillty for these program will be strengthened. 4 There are nOW FHA offices in over 75 of the m~tjor cities of our country. They should be intimately involved in the problems in their respective urban reas. Then the dauger that a Federal coordinator wjU become a Federal super isor should be eliminated. . Let me now make several specific comments on some of the other proposals con. tamed in the bill. ~ First, it seems to me that the demonstration cities pro ram should be extended to all of our Nation's cities,~ without any regard to siz or formula for selection. Any community which m4ets the ~equlrements of th act deserves an opportunity to participate in the pro~ram. Second, I would Uk to propose that seel~1ou ~(a) be changed to provi~ie for 100-percent grants for the cost of planning and developing comprehe~18ive city demonstration ro- grams. By raisbjg these grants ix~ 100 percent, tour communities will be ble to continue local and regional planning activitie~ at the same level as bef re, and the need tO divert valuable professional tli~ie to application preparat~on PAGENO="0599" I DEMONSTRATION CITI~S AND UR AN DEVELOPMENT ~t~d prc~gram design would be e~iminated. Fl ally, I would like to suggest that Congress consider more sp~cific languag in section 6 (e) so that the ~ietermination of level of expenditures for such activities be averaged over the 5-year period immediately prier to initiation of demonstration cities program. Gentlemen, thank you for this opportunity t make this brief presentation. Mr. BARRETT. That concludes our hear ng this morning. We will stand in recess until 10 o'clock tomorro morning and at that time we will have for our first witness, Mr. lan L. Einlen, speaking for the National Association of Real Estate oards. The committee will stand iii recess until 10 o~c1ock tomorrow morning. (Whereupon, at 11:35 a.m., the subco mittee adjourned, to recon- vene at 10 a.m.~ Thursday, Maroji 10,1966) 0 593 I / / / / PAGENO="0600"