PAGENO="0001" ESSARY A BILL `1 POLITAN DEV A BILL fl ~ATING TO Printed for ti PAGENO="0002" AND OURRE'NOY ias, Chairman ~ ~W~D~ALL, New Jers~y ~ w1~NörNew York ~ P. DWYER, New ~1erse R~JtNI ~New York 1* llA~~T~,MIebig~n -~BILL) BROCK, Tenneesee Ii. ThLCOTT, Caflforz$a A~rSON,~C~thfôrnia wr w. rOHNSON, Pennsylvan ~Z~I~M STANTON, Ohio tER L~ M~2E, I~ansas Chairm4n ~4MB. WIDNAiL, New ~erse £ PINO, ~ew York ~WCE P. DWYER, New rersey HARVEY, Michigan COMMITTEE ON BANKIN( a WEIGHT PATMAN, Te: ABRAHAM ~E MUtTER New York WLI~ WILLIAK4~ ~ARRETT, Pennsyi~r1~r(t~ ~: LEONOR ~K. S*JLLIVAN, Missouri ~ ~ HENRY S. Zti*JSS, Wise~n~ ~ ~ ~ ~ : THOMAS L A$ULEY O*IiO~ ~ ~ ~ WILLIAM S~OOR3EAD, Penñsy1*~nia ~ ROBERT G. &I~EPUENS, JR., ~Ieorg2a BWt FEI~i~I~ ;r. S~E~GERMAIN,flhode~t~1an4 ~ HE~4R~ 13; ~JO~ZALEZ, Texas * ~ ~ ~ ~ AJ~I JOSEPH G. MINIS~,. New Jersey ~ . .~ J~, W~ CHARLES L. ~T~TNEH, Geor~iw ~ RICHARD P. HANNA, California BERNARD F QRABOWSKI Connect~édt COhEPTON I. WHITE, Ja., Idaho ~ ~ .. .~ ~ TOM S. GETT~S, South Carolina ` ~ ~ ~ ~ < `~ ~ PAUL H. TO~, JL, Micbig~ui RICHARD L~ bfrTINGER, New York ~ THOMAS C. M4,GRATI{, JL,NeW Jerse7 * ~ ~ ~ ~* JOHN H. ~EN, 4a~qa . ~ ~ ~ ~ ~ : ~ ~ ~` ~ ~ ~ * ` S I RANK ANNV~ZIO ~Ifl~noia ~ THOMAS ~ CaI1for~ia ~ ~ * S PAVL NELs~N, Cle~1Gand ,~taff Dfreotor Ax~fl~ 5LEE MORSE, ~QUfl8eI CURTIS A~ PMns, Chief ~ni,eatigator NORM~N L. HOLMES, ~iJounsei BENET D. OELLMAN, mvee~t4ative Counsei ; S O~tAN S. ~K, kinority !at Member SUECQMMIT~ZE ON ~ QVSING ~ WILLI4M £ BA~tR~TT,I~enn4 LEONOR K. StJ~JLIVAN, Mlsøourl ~ ~ . ~ WILI4 THOMAS L AS~ILEY, Ohio ~ WILLIAM S. MOORHEAD, Pennsylvania ~ PLOR ROBERT 0. STEPHENS, Ja., Georgia ~ FJiRNAND 1. ST GERMAIN,khode Island HENRY B. GONZALEZ, Tezas: HENRY S. REUSS, Wisconsin ~ * S ~o$~ J. McEwi* Rta~~.Direotor * KENN~PH W. ~aaows, Depu4' Staff J)ireotor CASEY XaEt4~fl), Minoity' taff Member II *1 PAGENO="0003" ¶1, Page Dli COUI~ Dm the State - nistrative as- U PAGENO="0004" Statement of-Continued Hasty, Walter A., Jr., assistant legis1a~ive director, and Dr. B! e Carstensori, senior member division, National Farmers Union Hertz, Ka4 city commissioner, Springfie'd, Ohio Ketchum~ Morris, Jr., president, Ameripan Institute of Architect accompanied by William H. Scheick, e~ecutive director; and Phili Hutehihson, Jr., director of governme4ta~ a~airs Kingrén, Gibson, representkig the li~ai~4i~ Fetilidation Health Pla Inc~~. j. Kinsella, !Hon. George B., mayOr~Wi!â~ford, Conn. ; accompanie by Rôl~ert Bliss, director of redeve1opr~ient, Hartford, Conn 1~ramer, Ferd president, Draper & Kram~r, Inc~, Chicago, Ill Lennart$öt~, I4II~ A., presido~nt, Railway progress Institute on behal of t1I~ COmmittee on Passenger ~[`raffic, Railway Progress 1~nstitute Locher, Ifon. I~alph S., maYOr of Clevelarjd, Ohio Morris, J~ohn D., as~!statit vice président, special services, Peunsyl vania Railroad Co ~ ~ ~ Payrow, ~i,n. H. Q~rdoi~ Jr., th~ror of 1~eth1ehem, Pa Pepper, Hon. Claude, a T~epresentative iz~ Congress from the State o ~ Rains, ~ft Albert, ehairmah, Cor~xthtte~ on Historic Preservation ac~i*~iiod b~r Oordon Gray, ch~irm4t of the board of trustees o the Na1~ionaI Trust for ii$crle Pteserv~tioti in the United States Reich, $e~'muur D president, Pederation~ of Section 213's, Tnc Renger, J:~rv~, ~ American Modic4l Association; accompanie by Berr4ard P Eatri~on, dn~ector, D~par~inent on Legislation, Amen can Medical Assrolation ~ ~ ~ ~ Rogers, Hon. Byron 0., a Repr~serxtativ~ in Congress from the Stat ~ of ~ Romualdi, Dr. James P., director; ai~ Dr. Thomas E. Stelson codlroctior, Trimsportation . Research 1~stitutc, Carnegie Institut of Te~ht~oicgy ~ -~-__-_-_-_-___---__-~___ Elouse, James W., presfde~t, Cornrniuiityj Research & Development~ Inc ~ Ryan, H4 William F., a R~presentativejin Congress from the Stat of Ne~ York ~~.--_-_-_-_-_--________- Schaefer, lOenc it., director, Mass Tratts!~ Op~eratiohs, Westinghous Air Brake Co., Pittsbnrgh, Pa 4~ ~ ~ Steiner, James P., construction industry Imanager representing the1 U.S. Chamber of Commerce; accofnpaijiedby harvey Hallenbec1~ and ~Uchard Ereault, chamber staff seui,or associates ~ Sweeney, J1oi~. Robert B., a 1~epresentahive in Congress from th~ State of Ohio~ __~~.___~. __~__~ .~. Talcott, Hon. Burt L., a Representative ~n Congress from the State of Califørnia_ ~ - - ~ ~ ~ -____.`--_______-_-___- ~ Tate }1oii~ Jatuos U J , mayor, city of P ladelplna, accompanied by ~ Joirrn J.; ~Y'Shea, devek~p~ent Ooordirt ton; and Ivan Gluckman, assist~4 dev$opnie~t cOOi~dinator ~ ~ .. Vamk, $:o~i Chithes A , a 1~presentative a Co~gness from the State of ~ __~.~.____ ~ `. ----__--_-~__ Voorhl~, J~rry ezecutive director, Cooper ive League of the TI S A Walsh, Th*i. J~sa~ J., ffiayor of Scranton, Pa _ Weltner, ~foiL ~ Charles L., a Represent * . ive in Congress from the State of Georgia ~ Whelan, Ron. Thomas J., mayor of Jerse~r City, N.J. ; accompanied by Sidney Willis, city ~ Wilson, Dr,~ Johil B., chairman, council 6n legislation, representing the American Dental Association; accoitpanied by B. J. Conway, chief legal officer, American Dental Asso~nation_ the Am~nican Dental Association; acco4ipanied by B. J. Conway, Windharn,~ Robert L., Robert Wiudham &JAssociates, Dallas, Tex AdditionariAf~mation submitted to the subcoi~mittee by- Bachnach, ~Hon. Walton, mayor of Cincinn~ir Ohio: A res~~ution from the Cotincil of the C~tjy of Cincinnati, endorsing the ~principles of the DemonstratioutCities Act of 1966 Rehabilitation ~nd new construction 4a of March 11, 1966; Ohio R-~0 Avondale~ 1-Corryville project____~.~ Total project costs, city of Cincinnati, department of urban development Iv CONTENTI Page 1079 657 856 717 769 1007 913 785 898 1070 854 964 805 663 735 840 1041 997 914 615 656 631 926 866 714 811 643 1024 / 670 1062 767 757 , 759 PAGENO="0005" ion, 782 on, Chicago ___.~ 1113 hood In om, dated ~ of ings ns, PAGENO="0006" ~vI 1 Page 707 1112 778 727 1104 724 1018 1092 CONTENTS Addi~iona1 information submitted to the s4oommittee by-Continued Barretl~, Hon. William A.-Continued ~ S J~i~zch, Ray L., O.D., president P4insylvania Optometric Associ- ation, letterto ion, Wright Pat~an dated March 14, 1966 - Let~, Russell V., M.D., consultar~t, palo Alto Medical Clinic, Palo Alto, Calif., letter from, tb Chairman Wright Patman, Committee on Banking and Cur~ency, March 22, 1966 Levitt, William J., president, Lev4tt & Soiis, letter from, dated February 17, 1966 ; enclosing an ~artiele m. Forbes magazine entitled "Next : Mass-Produced cities?" Mattison, Dr. Berwyn F., executiye director, American Public Health Association, Inc., letter fr~m, dated March 9, 1966_ _ McNeill~ Charles R., director, Was1iii~gton office, American Bankers Association, letter from, $~pri1 7, 19JE~6, with statement Moorhead, Hon. William S., lette4 :frQ~n, introducing into the. record statements of Dr. A~ Clark, director, program in n4edical and hospital administrat~ori, JJniversity of Pittsburgh S4thool of Public Health; and D~. Leslie A. Falk, chairman, :i~edical Rights Committee, Pitt,$urgh, Pa Morse Sohn F., director of the . cotnmission, American Council on ]~ducation, letter from, dated ~Earoh 22, 1966 National Association of Manufacturers, statement of Noonan, Howard B., chairman of the Springfield Committee for Community Action Now, letter f*~om, dated March 14, 1966; enclosing the membership list ai~d a proposed statement ~f purposes Paliniere, Victor H., president of Ja*ss Investment Corp., state- mentof ~ Palolnba, Hon. Frederick W., m4ror of Waterbury, Conn., letter from, dated March 8, 1966 ~vith statement Pier~e, Hon. Alfred R., mayor of á4mden, N.J., letter to Hon. Wflhiam T. Cahill, dated April 6, 1~66 Prendergast, Joseph, executive vice president, National Recrea- tion & Park Association, statement of Raftery, S. Frank, general presiden1~, Brotherhood of Painters, Decorators, and Paperhangers of America, AFL-CIO, letter from, dated March 11, 1966 Rouse, James W., president, Comm~jnity Research & Develop- ment, Inc., letter from dated Mardh ~1, 1966 Rouse, James W., president, Commt*nity Research & Develop- ment, Inc., statement of ~. "Rural Area Chosen as Ideal Home Spot," Gallup poll published in the Washington Post, March 22, 11966 Ryan, William IL, president, District~ 44, International Associa- tion of Machinists/Aerospace Worl4ers, telegram from, dated March 21, 1966 .~ Slipher, Stephen, legislative director, UtS. Savings & Loan League, letter from, April 6 1966, with savings and loan amendments. Smith,. Hon. George ~., M.D., mayor of Easton, Pa., statement of Smithee, Kenneth J., Washington representative, National Recreation & Park Association, letter from, April 5, 1966 Southard, Shelby, assistant director, Washington office, Cooper- ative League of the U.S.A., letter fro4i, dated March 21, 1966 Sneddon, Thomas T., executive vice jresident, National Lum- ber ~ Building Material Dealers Ass4ciation, statement oL Telegram from eight members of the ~iine-man Denver (Cob.) Board of Councilmen, dated March ~5 1966 Thackrey, Russell, executive director ~ ~ationa1 Association of State Universities and Land-Grant áblleges, letter from, dated March 21, 1966 ~ Williamson, Kenneth, associate director, American Hospital Association, letter to Hon. Wright ?atman, dated March 7, 1966 Brindle, James, president, Health Insurance Plan of Greater New York: Telegrams received on group health plan needs for medical facili- ties 1020 1088 780 784 1110 1020 1057 1047 losi 1022 1107 1021 1109 716 641 751 1017 669 712 PAGENO="0007" CON~~ VII Additional information submit~ed ~o th ` ub ominittee by'-Continued Currigan, Hon. Thomas G~, m~yor, ~i ~ nd cowity of Denver, Cob.: Costs of financing 10 squire m ~e o~ Platte Val1e~r as city demon- L'a~e stration project ~ _ _ _ ~ - 1120 Reply to questious~si~bmitted ~ ~ 11. William E~ Winda1l~ - - _ - 1120 Gilligan, Hon. John ~T. ~ S~ate~ent rö ` th~e ~ Cincinnati area upon the proposed Demonstr~io~ C~ties t ~ * d th~ deed for flexibility in direct Federal aSsistaxic~ to~wIar e m ~ ~,o~O1ftan area 752 G odwin, ]l~wart W., pr~sid~nt, ~ i~ age Bábkers Association of America: ~ ~ J ~ ~ Excerpts from 19~ ~estjrr~on f ortgage Bankers Association before Banldn.~n~i Curren fr d4~ mittees ~_ 821 Proposed amendments ~ 821 Report on n~ediOal $nter aec ti ts 826 Haffner, Alden N., O.D., ~xectttive ~1i e~ Or,Optoixietric Center of New York City: ~ ~ ~ ~ . Suggested amendme*ts ~ H~ . 9~ 6 ` ~ 679 `~An ExaminMion of ~ Oroup ~t Ce ~n tile Adthini&~ratit~n of Health Services," monogr ~ ~ om the Optometric Weekly, 1963 ~ _~ 680 Halpern, Hon. Seymour; H.R. 12765. A bill to a~nend t e ational Housing Act to reduce the premiums chafrge4 for Ii ~n urance of certain cooperative housing mortga~e~ 653 H.R. 12766. A bill ~o a~nen ~ ct~ n 213 of the National Housing Act to permit th~ m*re e ~ t~ operation of the cooperative management hou~ing insur c~ und 654 Rains, Hon. Albert, cha~rmi~n, C m~ tee on Historic Preservation: Findings and recom~nendatio s f~m "With Heritage So Rich"- 965 Foreword from "With Hen a e ö Rich," by Mrs. Lyndon B. Johnson ~ ~ 980 "State Participatk~n ~n A r~ ii Landmark Preservation," article from Stat~ Govern tr~ Summer, 196& ~ 986 Reich, Seymour D. .pre~idex~t, F ~l r~t on of Sectioz~ ~i3's, Inc. : Letter from fl~arry I B. John o , irector, Cooperative Housing Division, FHA, c~ate~L No e t r.23, 1965; enclosing two mem- orandums dated Sepi~einb i~ ~ d August 31, 1965 808 Letter to Mr. Hari~y E. Joh s Ii, Director, Cooperative Housing Division, FHA, 4ate~1 No ~ b r 15, 1965 ~ 808 Reuss, Hon. Henry S.: Olson, Glenn G., pre~iden , ~ neapolis City Council, letter from, dated Mar~h 7, 1% ~ 850 Steiner, * James F., con~truction i dq try manager, representing the U.S. Chamber of Cor~imdrce: pp~ menthl views on U.R. 12946~~ 624 Tate, Hon. James H. J.~ mayor, ~ y ~ Philadelphia: Preliminary plan ~rop~sals ~o z~ rth-central-east area, Philadel- phia City Planning Corn i s~ , March 1966 Proposal to the Departmen oi~ H using ~nd tYrban Development for participatior~ in Pres d r~t Johnson's demonstration cities program ~ ~ Proposed land use~ fo~ 6-y a d monstration program . ~ Paster facing 950 Proposed land uses fo~ sch o s nd recreation Paster facing 950 Supplementary st~ten~ent~ 933 Vanik, Hon. Charles A.: "Aid Complains-~-Ho~igh ha ilitation Snarled in Redtape," article from the1Plain D ~tl r, arch 12, 1966 870 "Going to Capita~-]~1OP ~e s U.S. Rehabilitation Funds," article from the~ Cleveland re 5 ~ 872 "HOPE Plans Jibe With J ~i $~ Goal," article from the Cleve- land Press~ Jani~tar~ 27, 9 6~ 871 "Redtape Slows War on SI s,~ editorial from the Plain Dealer, March 12, 1966 ~ ~ 868 PAGENO="0008" I VIII / coNP~,rs Additional information submitted to the ~ibcommittee by-Coutinu d WeJtr~er, Hon. Charles L. : Amendment providing funds for ~tUdy Concerning relief of om- owners in proximity to airport~. Correspondence between ion. Charles L. Weitner, lou e of Representatives, and Hon. Philip N. Brownetein, Con~mis- sioner, Federal Housing Admii~jstration, dated February ii 18, 24; and March 19, 1964 ~ H.R. 696. A bill to ~unerid the N~tional Housing Act to facil tate sales of one- to four-family r~idences in locations adve sely affected by airports constructjed or expanded with Fe eral ~tfinanci~l assistance furnished under the Federal Airport A t - L~tter from Margaret G. Horton4 Hapevjlle, Ga., dated No em- ~ber 1, 1965 lAtter to Hon. Philip N. Brow~stein, Commissioner, Fe eral EQusing Administration, dated ~`July 1, 1965, with reply d ted July 12, 1965 Whelan, Hon. Thomas J., mayor of Jersey City, N.J.: A proposed program for Jersey t~3i~y, N.J I Page 646 648 647 644 644 1027 PAGENO="0009" 1 have nc~ ments in the port; of the ren~ ~id1y come PAGENO="0010" 596 t~EMONSTRApION CITIES AN~ URBAN DEVELOPME T friend in the ranks of those who want to do something to hel the low- income families obtain decent homes, ~ i: certainly in some respects may c¾isa~ree with your rema ks about the pending legislation, but I can sa~ without hesitation th t you are right on ~he rent supplement program~ ` If you ~Iesire to read your testimoii~y in full before we ask y ques- tions you may do so, and if there is ~ny other approach tha you are desirous of taking, we will abide by ~vhatever you think is est. You may proceed. Mr. EMLEN. Thank you, Mr. Chairman. Mr. Chairman and members of the subcommittee, I am Alan L. Emien, a realtor engaged in the business of real-estate bro rage in Philadelphia. I appear here today as chairman of the ealtors' Washington Committee of the Natio~ial Association of Rea Estate Boards. Our association consists pr~sently of 1,51~ local b ards of realtors with a membership of 8Q,547. We propose to eommeiit on provisio~is of three bills pendin before the subcom~uittce. We are aware of otiher bills which have be intro- duced during the past several weeks and have been referred to this subcommittee. These latter bills are under study by our ass ciation and we will endeavor to file supplementary statements on the in the near future. We will cover th~ three principal measures in the order f their introduction. : H~R. 1 2 34 1 ~ `~11E DEMONSThATIc~N CiTIES ACT OF 1 9 6 6 ~ Briefly, tl~e bill would provide a mor~etary inducement to a imited number of Qommunities to plan more c~mprehensively and to emon- strate more effectively their desire to jmprove the quality of urban life. The incentive takes the form of the Federal Government abs rbing up to 80 percent of the normal State or local share of a vast n ber of Federal grant-in-ai4 programs to the ex~tent that such grant~in.aid programs figure in the derno~tstration pt~oject. In addition, the Fed- eral Government would provide 90 perce~it of the cost of planning and developing these comprehensive city der~ionstration programs. The ~ fu~~i~meji~l . ~ea~kii~,s~ in the bill is that it seeks soWy by means of inc~eaged Federaigrants tointh~ce the cities to do that which they should have been doing in the year~ when they prevailed on the Federal Government to execute billions o~f dollars in binding contracts for urban re~newa1 including urban planning, community renewal planning, and general neighborhood renewal planning. The proposal would have some validity if the Congress had been remiss in the past in supplying funds f* urban planning. With re- spect to the three such programs. presenfly in existence, we note the absence of any critique of thcsoprograms~in the Secretary's testimony on February 28 before this subcommittees. As of December 31, 1965, 2,286 urban planning pro~cts have bee~i approved involving $99.9 million. For more detailed p1ai~ning the Congre~s has provided for financial assistance under community renewal progtrams and general neighbor- hood renewal planning. A total number of 146 CRP's have been ap- PAGENO="0011" I DEMONSTRATION ~ITIES roved i ~ progra~ms h~ ppropriation~ ~ar over each Let us exaAr and L ~a iievei create a Director o shall dev - *reeorn: C Congre~s less costly ad We wonde year if secti opment Ac DEVELOPMENT 597 annual housing ~partmerJ~ of Housing received a mandate to iwho- ;pt to sW-- ~on per year t~ PAGENO="0012" 598 DF~MONSTRATION CITIES AN~ lected cltiø~ who will take advai~tage of ~ more efficie~it manner. w.~ ~re~~thil1~ suggest thm~t it is t ~1~d th~ Congre~~ ~tiid th~ people in m~ba~h communities. We ~hou1d re4~og c~rnot be bridged by mciney alone. Perhaps if the Secretary first prod of the Department act, he will dis&r~i he propoaes to stilve only ~rith mO~ie~ rem~dy~ ~ ~ S The Hoi~se Government Operations ~J~mittee is ccn~sIderin a bill whi~h passed th~ S~n~e ~ ia~ ~$~r `~ici ha~ ~s its pUr achieve th4~ fullest cooperation axid bMi~r~tic~n `of grants S. 561 WoUld not cost any mOney, hènc$i:tthks the drama a~ssocia~ a gift of $400 million a year th th~ blties ~vhteh, in the S& words, are "willing to face up to th~i~ ~p~n~ibil.itie~, ~viliing mit their energy and resources, willii~t~ ithdert~ike actions w1~ have ~iciespread and profound efFects 4i~i th~ ~oèial and physic~ tnre of the ôity." ~ ILL 12946, TITE t1EflA~ E~iPM~T A~ . Title I ~ this bill5~provides for a~id~d giimts~-~-up t~ ~O p~: project cos1~-ftr ~i~ht specific Ft~de~aI grant-in~kl progr~ those n~tropolitan are~ which estal!~lith areMvide ~orn~re] plimning ~nd programh~. These pla~ itfltst b~ Edequate for e ing and g~aMing all ~iblic and privat&ttction of metropcthtan' in'terjurisdictional significance. This proposal is presently under stir~y by the Realtors' Wasi Coniniitte~ and am therefore not pre~r~~d to make a specific mendation to th~ subeominitte~~. Howetrer, oui~ Study to date p Us torai~e~rtain questions about the pr4posai. First, I ~ai~t to assure the subt~mh4ttee that w~ ~re cogni~ ~ant of the sho~tc~n1iin~ in mtropylfti~nwide ~lo~ii~iing inirolvin~ grea~ nu~n- bers of separate and distinct corp~ath ~$~i1tic~d entitMs ~cvithin ~ach of the 227 stti,ndard mietropolita~i stat~a1~reas, We note that nrban planning grants~~ involving $31.1 millio~ have been approved for 408 metropolitan aiid regional `areas, as well as 88 projects involving $12.3 million for ~tat~wid~ ag~A~M. Tl~ S~c- retary'~ testimony did not give an ev~uation of these bUt th~ sub- committee might request such an walu$ion in dethrn~tining th~ net~d for a new ~etropo1it~u plan thii~ ~rant~progre~n to be siiperin~posed over the exi~t~g one. j Under thIs tith~ the ~ônnty, munWpa4ity, or other ~n~raF.pi~rpos~ unit of local ~ovemment, to qnalify for t1~e grant, must satisfy th~ Sec- retai'y that. ith land~use cont.rol~, zoning~ côcle~, and snbdivision~ rè~u- lation~, unreia,ted to the project qnalify~n~ for the a.dded grai~t, are effectively assisting in and conformiflg tO metropolit~ planniii~ and programing. The Secretary in his testirn~ny on February 28 dis~1aims any desire to promote so-called metro forms of government~ ~t we wonder what would be the nature of the a$surances which would s~tisfy the Secretary~ and what wotild be the rethiu~e of the Depar~ment should the p4bli~ body receiving the gr~it tall, at so~ne subse~uent time, to meet ~ obligations. I I I URBAN DEVELO?MEN dating ~`ederaI grant pro rams in a ~the to stop attei~upting he area of Federal assi nize that a gap in local i to spoon ~tance to nitiative eeds to implement sect `er that the shortcomin~ Fare too funda~inental f [on 4(c) çs which r such a g S. 561, )OSC "to in~aid." ed with reta~7's to corn- ich will I struc- I I- %nt of ns for en~ible ~raluat~ vide or ington recom- ~ompts PAGENO="0013" DEMONSTRAON CITIES A~ ~BAN DEVELOPMENT 599. condit~ the subcomm share. ~. 561 Li of these complishment of r the adv twice by ~e a significant step ve.~ PAGENO="0014" I 600 DEMONSThATION CITIES AND~ URBAN DEVELOPMENT Last year, the HHFA. announced that the FHA "will avoid acc6pt- ance of applications for mortgage insurance on properties which would be competftive with the urban renewal development, unless sufficient ~narket demand is evident for both. ~ecause of the Federal interest already committed to the success of tl~e urban renewal project, FHA will not jeOpardize the market for the ~proposed housing in the urban renewal area by issuing commitments t~ insure loans on other housing that wouldl preempt the market dema4id for housing planned in the urban rene~waI project area." Applying this principle to the new towns, which would also involve a federally committed interest, we vie~r the proposal as adversely af- feeling private development through FHA in any of the surrounding area upon FHA determination that both might compete for the same housing market. Last year we submitted for the recor~l excerpts from two issues of House and Home magazine listing 61 ~iew communities being devel- oped by private enterprise without Fede~al assistance in land assembly and site improvement. During the 196~S hearing before this subcom- mitte, the then HHFA Administrator~s only comment on this evi- dence was admiration for what privat* enterprise was doing and a desire to help them do better. We res~ectfully suggest that the in- volvernent of the Federal Government into new subsidy programs should rest on a firmer foundation. Certainly we ought to see how well the existing title X program, with its $10 million ceiling, works prior to increasing this amount to $25 million and enlarging the scope of the Secrethxy's powers. The burden! of proof is on the Secretary to justify his case for the Federal Qoveif~iment's further involvement in controlling the future use of land. E~e has submitted no evidence that private enterprise is unable to acco4iplish this purpose. On the other hand, tile preponderance of the evi4ence points to the impressive record of private enterprise in this area, a~complished without Federal criteria to determine whether the plans ~for the new community are appropriate, and without Federal financial assistance in the assembly of the land and its site improvement. * H.R. 13O64~ TIJE HOUSING AND URBAN Dt~TELOPMENT AMENDMENTS OF 1966 We are limiting our testimony on this I~ill to the two sections relat- ing to privately owned housing leased by~local housing authorities in making available existing housing for ren~al to low-income families. The first of the two amendments-sectioh 104 of H.R. 18064-would ~` permit local housing authorities to lease dwellings without regard to ` the 1- to 3-year lease limitation provision where the housing is needed for low-income families displaced by Government action. The justi- fication for the amendment is to remove any threat of dislocating the family, again presumably after the 3-year lease expires. When we realize that the normal lease for rental housing is 1 year and mo th- to-month thereafter, the argument for lea$s of perhaps 10 to 20 y ars has no validity~ This program is designe~l to make privately ow ed housing available for low-income families.I A long-term lease m kes the housing fo~ all practical purposes puUhcly owned. The ame TEd- ment is unnecessary; it makes a fundamenthl change in a worthy ro- gram enacted less than 1 year ago, and ~he amendment should be rejected. PAGENO="0015" DEMONSTRATION CI~PIES tENT 601 to make adéa es. amendment woi ~tothe1e the leas - .asizing ~ate1y owned~ aew construe it to C' statement an ~wever, Mr. 1 i grant propo~a1~ you are opposed to the sup~1e~n~n. g.ress has already given tI~e 9ities 1program. youi Tkno Mr. ~. answer be \ere~is urba L~~1 Stewart, wc ~. STEWART. wehavel now since ~ some demonstral r they Federal PAGENO="0016" 602 DEMONSTRATION CITIES AND URBAN DEVELOPMEN Governmeii~ to establish a new, s~p$arate program and in a small number o1~ cities for the purpose of~producing demonstrat ons. I beliEW~ most people in our associa4iOn will say that Charl s Center in Ba1tim~re is an impressive demo*stration and Southwe t Wash- ington is an impressive demonstrati~m and Constitution P aza and many other projects that have been dbne with this do set an example for cities. We are not at all clear as to why it; is felt that now, after ~ 11 these years of rather close cooperation wiilh the cities, there is a need to demonstrate that the program will woi&. As to facing up, that was heard th~roughout the discussio s of the 1954 act which moved the previous urI~an redevelopment pro am into a broad~ ~ange so as to put the labellurban renewal on it. he key to that w~ that the Federal assista~nc4obe made available to he cities would not ~be on a grab-bag basis, but.j only for those cities th t faced up to their;own obligations, using theii~ own resources and own powers. Many go~rnrnental powers that must be used in this field do not belong to the Federal Government. There are certain police a tions in the field of health and safety that only the municipal govern ent can take and sothe theory of the 1954 act which our organization c dorsed, was that to qualify for this Federal 4~ooperation the city m st face up. The city must make this series of commitments that it would do thus and s~ with its own power. That~presurnably has been i bedded in the policy of the urban re~iewal prog4am since 1954. But agai~i, we are hearing now that the cities are to be giv extra rewards fo~ facing up. We feel that this is not consistent ith the 1954 policy-with the 1954 act which was an assistance a d was available only if the cities face up. Mr. BAiu~m Thank you. Mr. Fino? Mr. FiNo. Thank you, Mr. Chairman. Mr. Emlen, perhaps you are familiar with the demonstrati n city bill that I have introduced. My bill provides that the coordir~ator be changed, ~tlie Federal coordinator titl~ be changed to "infoi~mation officer." It; generally tries ta eliminat4 the connotation of th~ heavy hand of Fed~ral control in this whole pi~ture. Do you tl~i~nk this would be a better ~pproach, this change ~f title of this coordinator ? ~ Mr. Ea~N. Mr. Fino, our answer ~ think would be that~ if the demonstration city program were enact~ed, and this additional naoney was to be made available, then why aren't the people of the ~Jnited States entitled to have a Federal coordinator towatch over the ~noney that is being put into these cities ? My answer would be, "We don't war~t either." But if it w re en- acted, the Federal coordhiator, it seemsj to me, isn't a very important part of it a~d we wouldn't abject to h~s being there if the bil were enacted. ~ ~ I Mr. FINo.~ Well, some fear ha~ beer4 expressed that the so called Federal coordinators will change building codes, change bulding laws-this is the fear that some haire-jhat city administratio s will reorganize themselves aiong their own ~`deas and suggestions. How do you feel about that? Forget about the title. You say you re not so much concerned about that. How wGuld you like to have a fellow come in and do that? I I / PAGENO="0017" DEMONSTRATION Mr. EMLEN. saw your at 6O-87S-66~-pt. 2-2 PAGENO="0018" ~ 604 DEMONSTRATION CITIES AND~ URBAN DEVELOPMENT have been ` preocoupied, for instance, in urban renewal. We think they have been preoccupied in going beyond the original purpose of the program, becoming involved in vast commercial and industrial enterprises. I think that the ills associated with all these grant-in-aid programs are to be found in the approaches o~ local officials to their use. Mr. FIN0. If the demonstration cit~y program is enacted into law, New York City, Philadelphia, PittsJ~urgh, Milwaukee, and if they are not selected as demonstration cit~es, what would you say their chances are of obtaining new urban ren~wal programs? Mr. E3thEN. We were discussing tl4is earlier, and I think if these cities-if any city didn't come under tEs demonstration city program they might be shut out. Mr. FIN0. On the demonstration city program, because of its finan- cial needs and its concentration on a very limited number of cities, would it not seriously place in jeopardy new urban renewal operations outside the demonstration city programs? Mr. WIinAMSON. It is possible th4 if the demonstration grants bill is enacted? most of urban renewal will be concentrated in the dem- onstration 4ities. Because there is going to be-they are bound to, have a pridrity-the demonstration cilties will be preferred and you have so much money that you can spei~ just like you have so many public housing units, so much FNMA. special assistance, and the dem- onstration cities are bound to be prefetred and will gobble up most of the money. Mr. FIN0. Just another question. This is not particularly related to the subject matter at the moment, but I never thought I would see the day when some members of the re*i estate boards were coming out for rent supplements. But let me a4k you. When you people got your heads t~o~ether and decided that t~iis was a great idea, did you give any coitsideration as to what ceii4~gs you have on this ? How poor are the poor ? Mr. EMr~t. We had, in ~rriving at ~our conclusions on this rent supplement program, and I am not surprised that some people are surprised that the National Association- Mr. FINO. Some were shocked. Mr. EMu~N. Some were. I guess they ~vere. We had, last fall, very long discussions about what a poor pers~i. is, and of course, the obvi- ous conclusion was that it varied geograpI~ically. There were attempts by some of our members to set monetary ~ceilings in our recommenda- tions and it ~ concluded thtt that wttst not the proper thino to do, for that reason, the geographical differ~ncee are so great. `i3ut we did make it very clear that our approval ~of the rent supplement pro- gram was predicated on directing this program to the truly poor people and to get it out of the so-called ~niddle-income bracket, say, from $5,000 to $8,000 or $9,000 and to keep it down to, we will say for llirposes of big cities, closer to the $4,000 level. The FHA redrafted its guidelines for admission to rent supplement projects, we liked the net asset limitations that were set, and w~ subsequently endorsed the program. We think that it is an excell~nt opportunity to demon- strate that something has finally been fo~nd that is better. We are very interested in see'ing the program fund~d, and hopefully we would like to see it continued on and on and on atnd would like to bet that it might be an answer to public housing. PAGENO="0019" DEMONSTRATION CI'~IES 605 prof the ~ / is no just Afl3 subsi remem- t you are mi PAGENO="0020" 606 DEMONSTRATION CITIES AND URBAN DEVELOPMEN errnnent concerning itself in the social problems of the peo~ e. This is what tI~e Demonstratioi~ Oities Act would do ; would it not Mr. EMLEN. Well, n~y answer to tl~at would be, that peop ~ are one of the problems inherent in existing 4rban renewal program . There are built-in problems in urban renew~U that cannot be whis ed away with money. The dislocation and r~4ocation and the necessi y, some- times, Gf tireading on people's rights ~re problems that are in erent in urban rcr~ewal programs and we ean't~see that tIie demonstrat on cities bill can cw~e tl~is problem. . . Mrs. StILLIV4N. Ri~ riot one of the criticisms of urban rene val been the fact that it has d~placed peQple withoi~t really maJ~ing dequate relocation plai~s-~--adeq~iat~ly ta1~ing care of those who are di placed? Mr. EMLEN. That is right. Mrs. Spu~iv~. S~ tbs~t in this kind of l~gis1~i~tion we are d scussing now, the i4:lea is to look at the whole t~roblem and try to wo ~k out a unified pitüi of tzctio~ to combine the trenewal work and the )Oial re- habilitation and improvenwut ? j Mr. EMLEN. My answer would be t1j~at we think that under existing urban renewal programs, the grant-in~aid progra~ms, that th e prob- ~ can be worked out as well as they can be worked out if t] is other program is not superimposed. If this other program is superi aposed, it is not going to take eare o~ the problems you address yourse f to. Mrs. SULLIVAN. That would be tru~ only if we have bette] coordi- nation-tç try to see tile whole picture and to work with al of the problei~s ~t onee and t~riug ail of the~c progi~ams together, nd this takes iflto ~ousider~tion the retr~,ining~ progra~xi, and the pove ty pro- gram in geAcral. You are wo~king~ not only with renew ng the blighted a~reas of the city, but you are ~Llso trying to uplift th people to learn to meet the coaditions oflivingin the modern city. Mr. EJ~LEN. I will agree with thwt. The poverty program and some other thi~igs aren't iii there and my answer is simply that we fail to see the significance of this specific bill toward accomplishin ~ these goals. Mr. W~L1JIA~SON. The missing link ~n this entire area is re~ ily one of coordiwi~tion, and the Ooxi~ress ad*essed itself to that tas : when it createcj the Department of 1Iousing~ and Urban Developm it and directed thØ Seci~eta~~y to ci~eate the flfrector of Program Co rdina- tion. Throp~ho~t the biU-4n the legislative history of the : epart- ment bill-is this great need for coorUinating the great nur ber of urban development programs that ar~ scattered throughout all the agencies. Apparently this bill was in the making before the epart- ment bill was enacted and I think that the Secretary should gi ahead and create this Director of Program Coordination and to use lie au- thority that is in the Department Act to try to bring about this degree of coordination. I do not think these problems are going to be solved by just pouring more money into all oi~ the grant-in-aid progr ms. Mrs. buLLIVAN. I agi~ee with you-it ~is not just a. matter of i oney; it is a matter also of planning and coor~ination. But 1~ think ~ ~u can recall, back ~when we first went into this program of building public housing and trying to find other ways tt provide decent housin , that the housing authorities in the cities were wholly concerned with bricks and mortar and when we brought up the need for a wider rang of as- sistance to the occupants, they said their main concern was pro iding PAGENO="0021" DEMONSTRATION Ct~ In PAGENO="0022" 608 DEMONSTRATION CITIES A]~D URBAN DEVELOPME T rate mon~y-I think it is 3% percen4. They built efficieiici and one- bedroom ~ apartments, furnishing th4ni with heat and with a refrig- erator a~d stove in the kitchen, but twith the other furnishi igs beii~g provided by the tenants themselves. They rent. these effici neies for $35 a month, including the heat, ref*'igerator, and stove, an the one- bedroom apartment for $40 a month~ These are in a small own and I know the cost of land is not as great as it is in the city. ut I also know that even in rural areas priva~te builders and real es ate firms cannot get into this rental range wIthout some subsidy su h as the low interest rate. I think this is som~thing that is quite excit ng, how- ever. I have photographs in color sh~wing the residents in t ese little apartments. We need to do things `ike this in the city. ut, once again I r~peat that .you cannot just bbild the buildings and ay : "All right, her&~ is a good, clean, modern~ building, now live in t." We have found in the cities today, because of the migration of peo le from rural areas into the city, you have got to do more social serv cc work and educational work to help them to adjust to the city. I incerely hope the proposal now before us might enable us to take tlfs whole picture into consideration and do the whole job-not just p rt of it which involves housing coi~struotio~i. That, I am afrai is too haphazard. Mr. BAi~*u~rr. Mr. Harvey ? ~ Mr. H~u~y. Thankyou Mr. Chairr~ian. Mr. WilJ~iamson, I ~011id like to di$ct the first question to on, be- cause your organization is now suppo~iing the rent supplem nt and rent certificate program and I wonder if you personally or our or- ganization had any preference between the two? ~: Mr. Wua,IAM50N. Well, we think the great hope for the low income family lies .in tapping the existing house market, and as betw en the two programs-we think more of low-income families will be ssisted through the. so~called rent certificate program. The reason it looks as though ~*e are favoring rent supple~nents is that we are spending more time qu that because that happen~ to be the program that is in trouble. The rent certificate program~is working and many of our real estate hoards are * working with ~local housing authorities on making available existing housing. Th~t is why we are worried about these amendments which could make . fundamental changes in the program. Mr. HARVEY. That is what I was comi~ig to next. Maybe-i am not sure whether I should be directing my question to you or Mr. Emlen. How does the problem of overbuild~ng in the homebuilding in- clustry today as far as apartments are c~ncerned enter into this prob- lem? Is overbuilding of apartments atserious threat in the metro- politan areas~? . Mr. EMLEI~r. I think my answer woul4 be from my own experience in the Philadelphia area, the overbuild~ng is directed to the income level which we are not talking about. We are overbuilding in the so- called luxury area. I think the chairman would agree that is locally true, but my knowledge doesn't extend beyond my own locality. But we haven't got the problem of overbuilding in cheaper apartment units. Mr. WILLIAMsoN. I think the FHA ha~ done an excellent job in its market analysis and in approving applications for mortgage insurance for multifamily housing. PAGENO="0023" DEMONSTRATION C~TI~S A Mr. HARVEY. It? iS ~OU~ a~iswer t the problem, or do you feel it do~ Mr. WILLIAMSON, I don't be1~eve Mr. HARVEY. Is this ~m udiner~ Mr. WILLIAMScN. Tl~ a ~ end~ ~ t to new construction ? The~ ~ ui~pose ó local housing authority, to go to a siiigle-family hom~ in a ci. velopm r ing, maybe, for 30 years, 2 o~ the I families with a rent suppi me~It p i to the owner. Mr. HARVEY. That gets ~o t~ie n and I share some, of the sa,i~ie ~ua is too long and yet Secreta~ry ~ a 3.~year limit is too ~hort to enco~u medium for expaudhig. th~ r~nt c~r feel satisfied with ? ~ ~ ~ ~ * Mr. WIu~IA~tsoN. If y~i a~e g4~i program to, the lea~ing of ~ie~c~ ~on~t too long, because no b~ild~r is goi only a 3-year lease. . But ~ th~* Mr. }lAnvEr.~ On the otl~er~ han. hemi~htcousider3or5. . , ~ Mr. WILLIAMSON. I didhri~ g~t th . Mr. HARI~EY. ~ If hehas t~ apart he might well &~nsider 1és~ ~, Mr. WILi~t~MsoN. The n~r~aJle ` s ers of existing rental rniits~ ~rould ~ Mr. H~vi~. Would ycr~i . b~ ix~ ~ greater, longer period of t~m&tha . Mr. E±thJT~N. Our positi4i,is tha tion gets into this we are going t ginning to prove. itselL ~ r1~io get b c large supply of good existing uni ~ the emphasis gets away frsm exist ~ an awful lot of good shelt~r a~id it ~ is just beginning to take hqld ~n4 o~ owners are just b~g~nn~g~to ~nd ~ tQ stopit t~t th~5 ~ ,` , ~ ~ , , Mr. flARY ` i~ir. Shi~i'~g ybura~e. 1 What do you do `with' ~o~nn~utht e have been thwarted ? ~ y~J~~e you ~ else can be done to eiic'óu~ge the ri forts at the State level and loc'~i le ,e There is not much left otl~er than t velopmèrit of the metropoiita~i p1 n: other `sug~tion? Mr. ~MLEN.' I would ~hJ~e to as Mr. ,Sp~wART. I thuik &tRs ~ery metropolitan area is not ~ccqta have in all th~ United St~tes is form of it. What can hi~pp~n~ a n~uch the acquisition of f nd~ for ~-.r4s this- ~t would `shift r~nt certificates at amendment is to permit the ~sr"wh~ `is going to build 100 rid `exet~ute `an agreement leas- and us~ them for low-income ~ the local housing authority iestion. Ton feel `apparently, ~ank1y~ that `a 40-year position as in'dióated' that he feels that builders. Is there a happy ~ate program that you would ~o redirect the rentS certificate then I agree, that is not build with a commitment for ~iol~ idea- e had, not built or not rented built and `substantially vacant a 1-year lease that many own~ 7 glad to `obtain. ~ of giving the Department a ars or sqm'ething less than 40? re a~rajd that if new construc- roy something that is just be- ) n~y own area, we have a very De used in this program and if ructures, we are going to waste a shame because the thing f the real `estate men and other pout it andit would be a shame to aR~ i2~94E. I as'kyou this. here a4:i eui!bi~ts at `annexation om~mu~it~e~ ? Where nothing opolitan , planning. since all ef- at `bring this about have failed? mehow encourage the new de- g,by grants. Do you have any : : ~. Stewart to speak Ofl that. .~I( ~ that political unity of a greater ~l( . I believe the one example w~ ~l ~ ~onnty which . is a rather mild I~L I c~ hat needs ` to happen `is not so' a~i iing as willingness on the part P .~ RI3AN DEVELOPMENT ~ 0' erbuiicling does not enter into ~nt~r into it? 609 I~ ~ t~t~ ~g Li* `* en~ .~ ~ $1 ~` `~i1 ~e iet~ ) 5, iiI~ .. .~ H ., PAGENO="0024" DEMONSTRATION CITIES A URBAN ~ DEVELOPME P of the governmental units within the metropolitan to sit do~rn and do certain things in cooperation. It is clear that if there are a d~zen cities along the river, one of them can't take care of the pollution of the water. Even certain traffic featiir~s fall into that categ~ory. We have a beginning in this country, ai4l perhaps a low level o activity, but we Mve it, a disposition on the p~rt of the different gov rnmental units to ~ooperate. * If ~ tiiey have 1~hat attitude, they hay already gained the main thing they need. ~ey can get a grant for that now without. any. further legislation. T~e go~vtE~rnmental units within a metropolitan may now farm a lOos~ voluntary association. In this area, the Metropolitan Council of Governments, for exa ple, has received a Federalgrant. Mr. hARVEY. You cannot use the city of Washington as an example. Mr. STEWART. ~ This didn't accrue t~ it out of any particul r legisla- tion for this area. T understand th~ere is a similar organi ation in Los Angiles County and in perhapsjhalf a dozen other cit es where there is a high degree of formal coop~ation between the di~e ent gov- ernmental jurisdictions *ithin it. Jf they achieve that t ey have achieved the main thing. I am t~1king about a willin ness of cooperation. Mr. Ith~vi~r. Your answer, as I gt4her it, would be that y u see the Government more in the tole of au aj~bitrator in settling dis utes be- tweeñ these various units rather than extending the grants encour- age metropolitan planning ; is that right ? Mr. STI~iWART. I don't think it is a~ problem * that should o to the Federal Government for its solution. ~ We have had metropo ~tanwide action in various particular ways i~duced by the urgenc of the problem. ~ Under the `tøi program the Federal ~óv~±ment now has w at seems to me a ~r~ry alluring and powerftil hicetitive. They can g t a sub- stantial grant to carry out metropolita~i planning on metropol tanwide problems. They must agree to work ~ut plans, the execution f which will call f~r their cooperative action, t~nd this is available no . This was in the 1965 Housing Act. Mr. H~&irv~v. Thank you very much., Mr. BARflETT. Mr. Moorhead ? Mr. M~o1~th~. Thank you, Mr. Ch4rina~n. First, 1~t m~ comniencI~you on your 4upport for the rent sup lement program. ~ ~ I am totally eo~ivinced that~ public housing alone c nuot do ~ a~ndJ hope that the rent sup. lements will ~work ~tndbe~succ~ssfiil. ~ I My first qtiestion, g~iitl~then : Do I &~rr~ët1y understand yo r testi- mony that whether we enact this demo~istration cities progr or not, you recommended that eith~r this committee or the Governmen Opera- tions Committee, of which I am also ~ member, report to th House favorably a bill to establish a coordirtator, a Federal coordi ator to coordinate various Federal programs iii the metropolitan area~; is that correct? . . I . . Mr. WThLTAMgO~. Mr. Moorh~d, ~he Cr~tion of a ~ Pir~ctôr of Program ~oordination is already iii jthe law. This is part~ of the Department of Housitig and tlrMn ~e~relbpment Act~ the cabinet bill. The $ecret~ry has not appointed~that Director, and thal~ Direc- tor has the~responsibility to `achieve cOordination. Now, S. 561 does address itself to coordination and it is a good bill. We have su ported 610 I I I PAGENO="0025" In the tesi commerce, they ta resources are not ~ 611 planning DEMONSTEAr yILLIAM~ ~ation of missing at PAGENO="0026" I 612 DEMONSTRATION CITIES AI~D URBAN DEVELOPME liberal a~nd conservative in their, 1ei~nings-it was hard to et them t~ work together. I think the commnte~ transportation proble in Phila- deiphia has become outhtanding be4ause of this effort. Bu it took a lot of local initiative or~ the part o~ these different politic 1 subdivi- sions, and the ones with the most inItiative worked with th ones with less initiative. These locaj cooperation ~rograms~ geod or bad, depend o the corn- petency of the local politicians and the administrators. . It `s very-a I very hard thing to answer, I will ad~nit, but it can be done, nd it can ~ be done *ithout an7 Fed~raI interv4tion.as it did in this ca e. Mr Wb~uA~sON I think, sir, t~hr4~ghout the years, ther is a tend ency ou the part of Wä~hing~on----~thd this is not criticis of this adrninisti~ation, the same thing hap~eued during the Eisen ower ad- ministration-of trying t~ push tius money out to the comm ities and ~ not rnakG the cornmunitith m~asiire u~to their own responsi ilities. I think for many years the Workable.~~ program was somethi ~ g that a mayor could dictate to his ~ecretary s~ie afternoon and send in. And I thinkthat considerable apathy deve~1oped in the communiti and the rush was on to get the moiley and t$ey woul4 come to Con ess and cry abo~ the redtape *~j Congres4rnen are always symp thetic to local offidials who are not getting t1~e money fast enough. I think that this~ is the sourc~ of consi~erable difficulty ; I hink we should ha~ve made it tough on the cbnimunities to qwdify or these Federal g~ranth-in-aid and should hve made them adopt inimum housing codes, enforce the codes, and ~ow we are waking up t the fact that these omissions on th~ part of lo4al officials result in the program not meeting the goals that w~ talk&1 about over the yea s. ~ Mr. MOORHEAD. If I understand th~ thrust of your testimo y as far as answering this complaint about th~ local initiative gap, yo recom- mend, not that we provide more in. tl~e, w~y of the carrot, b t a little more in th~ way of the sticI~, wonid th$ be correct ? Mr. W~MsoN. ThatIs right. j Mr. Mbc~nrn~.r. Thank ~u very mu4h. Mr. BAntmi'r. The gentleh~ian's timejias expired. Mr. St Germain ? * ~ Mr. Sr GERMAIN. I certainly appre~iate your testimony t S morn- ing. A good part of it is constructiv~e. Yet, I am overwhe med. I do not met~n that in a derogatory manner, but I do not th that you gerttlem~n have grasped at all aind come to the under tanding that we on the committee have come to ~fter almost 2 weeks of I~ arings, as to the technique that is to be used i~ere, because you cite t e facts, . for instance, thata limit has been put 4n the amount of urban enewal ~ for each ~ the next 4 year~. Also, oi4. raiblic housing. True that is a fact. Th~t the 80 percent of the fu4~ds here are to be util zed for more ~rogi~ams that are not covered b~ Federal grants. So hat the incentives here are not nearly-in m~ opinion it goes furth r than just all of a sudden push a great deal of Federal money into t e local city treasury. It gives existing Federal programs-it exists f ~ r these programs but it gives the particular cOi~imunity~-makes fund avail- able to it, extra funds to work on programs that they probabl would not be able to get to for n~any, many~ years. We complain great deal about tTncle Sam trying to do so r4uc'h for the local comm nities. Mr. ]~nilsn states that he was on a boar4l of commissioners. Y u were a member ~f local government. I. do1 not know what the fi ancial PAGENO="0027" status of your pa arsi. cann .---.-~r* Solo ~reciate the: vondering if ?d. ,iILLIAMSON. J are more fun rnment~ just r ~t~:e~ once agaL unf old in t I think ~. out, as you o on p~ the Government 0 ir preseutatioi~ when you point ~ie comiMttee of the Congress, looking at the so-called DEMONSTRATION CI~~IES A ~ T.~ BAN DEVELOPMENT 613 we find a do not hay Mr.~ ~ cerned about - donotc bhing ab PAGENO="0028" 614 ~ DEMONSTRATION CITIES D URBAN DEVELOPM NT Muskie bill and then you have this committee looking at t e proposi- tion of relations of metropolitan governments. You say on page 5: We thii~ have the rather strange situation of two House corn ittees simul. taneeuslV c~usidering the same subject jn two different bills. I agree. I think it is almost an~alous. Since I am a: the Goyernment Operations Subc4mmittee, I have asked mittee ~o coordinate its work and ~end over that portion which has to do with that subject *latter, so that the righ know ~what the left hand is doing. I I have just one question to ask yoti. Or~ the bottom of page 6 you qudte from Secretary Wea "The U~'ban Complex." And you quote just one sentence: member of that corn- of the bill hand will ver's book, We seek to reeapture contrel o~ the uSe of the laid, most o~ wb ch the Gov. ernment. has already given te the people. Well, that makes kindly old Doc Weaver ~lrnóst 1ooi~ like Socialist. I wonder if yqu would mind readitig the preceding sente ce in that book, "Vl~e ~Jrban Complex." j ~ Mr, Wua~w~sow I I~ve the booi4 and I will-I lent it to a member of this thmxnittee. I will put in tI~e record-in my opinio it is not out of context, but we will put in th~ entire two or three pa es Mr REUSS I have looked ~it up, and I think it is on pa e 6 of the .. book, is it nOt ? `L~he pr~ious sente~ice says- Mr. BAmuwr. This may be inserted in the record without objection. (The information referred to folJ~ws:) 1~IXQERPP PRoM~ "ThE TJEBA~ COMPLEX-H~MAN VALUES ~ IN URBAN L FE" B~' Dr'~ ~ ~ `~ ~ ~ ~ ~ ROBERT C. Ws~visi~ .(Dom~LEDAx) OrIgit~*lly thi~s Nation wai4 developed i4igeiy by offermg people a solute con trol over wide axeas to facilitate the rapid impravement of the lan Now we are trying to recove ~. r control of the way ~nd is used so as to achie e a proper type o~ d~eIO~&~i~nt of ow' urban areas aId of our ~hoie country. ur current objectives ~tr~ *tQ seeure the open ~pace ~i*4ed both for urban and r ral recrea- tion, to proteci wildlite, to promote conserlation, to eliminate scatteri ation, and, of course, to provld~ sites fo~ the shelter ~equired b~r our population. Thus, we seek to recapture control of the use of th~ land, most of which the overnment has alrea~ givento people. ~ 1~{i~. Th~:r~s. I will read l~he previot~sentence~: Our en*,~n~ oWeetives are ~;o seciu* the ~pen space needed both for urban and rural rec~roUtzon~ to pi~otect wildlife to pr+~i1ote conseryation to elim nate scat terriatioii 4i~d, ~f course, to provide sites 4or the shelter requied by ur popula tion. ~ we seek to reca~tflre control 4~f the use of land, most o~ which the Government has aireadygiven to the peop1e~ You~e~c,t againstprot~ecting wildhfe? M~. WILL~4~ISQN. No. Mr. E~LEN. No. Mr. W~LIA3JSON. All r~ght~ Mr. R~ss. You are iio~ against ope~i space? Mr. WIM~IAMSON. No, sir. Mr.1~rss. Howabout ~onservatio4?. Mr. W~4u4a~&soN. We ar~ all for i~. Mr. Rithss. You are not for scatterh4ation? Mr. WI~j.~w~soN. That'~ right. Mr. Ri~rss. Actually when you read the whole quotation i eluding the "Thus,", it does not make Doe Wearer out as so bad at all. I PAGENO="0029" I DEMONSTEATION PAGENO="0030" 616 DEMONSTRATION CITIES ANI URBAN DEVELOPMENT The national chamber does not be1~eve that H.R. 12341 would result in a valid:dextxonstration. of city prob]4m solving because: :1. Th~I~ifl is basedon highly q~uesti~able assumptions. 2. The biIl'óalls for heavy Fed~ra1 ~ontrols on local actions, and in~ cludes provision for Federal designal4on of a local coordinator-a sort of conunissar or czar who would po~4ss vaguely. defined powers. 3. The bill contained a blanket req4irement br use of "all available Federal aids"-aicjs which, in the ligl~t ~óf local circumstances, may or may not be~ appropriate or desirable ~r merit priority. 4. The l~il is designed to treat symptoms, rather than cause of city problems. ~5. The bill is overwhebningly conci~rned with money, and fails to recognize the key factor ,~f people, jdeas, and ~ leadership or city progress. ~ . t 6b Th~ b~il, failing to provide city s$lection criteria which dmit of direct axi~ bbjective measurements, wo~uld permit selection by the ad- ministratiöti of a smail number of cities which would recei e large amounts offunds at the expense of thee overwhelming majorit of the Nation's communities. Let me detail these reasons for our di~sapproval of this bill. QUESTIONABLE ASS~YMPTIONS This bifF ~s baàéd on M~1ily questioijable assumptions. Fi st, the bi1l-pa~e 2~ beginning~on hñe 7-sta2èsi. ~ The ~iöiigrè~ fu~ther finds ~tnd dec1are~ ~h~tt cities, both large and s all, do not have adeq~iate resources to deal effectivel* with the critical problem facing them * * The problem is not that the resotirces to do the job are absen from the cities, but that these resources are not always mobilized eife ively. Certainly ~there are resources in the cities. Cities are the cent rs of the income and wealth which have br~nght the United Sta the highest standard of living in the world atid made it the best hou ed of the nations. ~nd, in fact, the subsidies ei4visioned in H.R. 12341 ould be paid from taxes which come in the main, from city areas. But the roundabout route ol! ~unis-~om city to Federal Go em- ment, and, alter deduction of a FecIera~l handling charge an im- position of 1~'ederal controls, back to ~he city-~..is not ne ary. Instead, cities can, through effective orgt~nization and action, ge far more direct access to the funds necessary fer local progress. Documentation of the fact that it is possible for cities to moblize their own resources for local iinproveme~ats is provided by the ex- amples, from 66 different communities ove~p a wide range of popula ion sizes, in the nn~tional chamber publicatio~i, "Some Community De- velopment Success Stories," which we hate provided to members of this committee.; Second, the bill-~-page 2, lines 9 and foll~wing-stath: * * * additioni~l Federal assistance Is essenti~l to enable cities to plan, cle- velop, and conduct programs to i1n~rove their physical environment, increase their supply of adequate housing for low- and moderate-Income people, and provide educational and social services vital to health and welfare. This statement on the essentiality of adrditional assistance is con- troverted by the many examples of cities ~which, on their own, and PAGENO="0031" DEMONSTRATION CIT~ES AN~ ~tJ~ AN DEVEWPMENT 617 ~ Driva~ ~ The bill calls I ~ and L ~ ~cv~ is big enough~ 4: city, if it is c~ Secre~tary to rhood ` determi~ a t~in shall from time PAGENO="0032" I 618 DEMONSTRATION CITIES M.fl~ URBAN DEVELOPME BLANK~ JIREMENTS FOR USE o~j ALL AVAILABLE FEDER~ WHIC~I MAT OR MAY NOT BE AI+RO~RIA111, DESIRABLE~ ~ toRT~ Cities ar~ llE3ver identical. Ii~te~u1, they ttre incredibly and fully diverse. They diffet hi s1~e ~iid composition of popu] land area a~!id topography aM c1imaf~, in the composition an activity of industry and commerce, ili}llvlng patterns and et~ habits of 1ami1i~s, and, arnon~ other tI~lngs, iii the kinds and q of~publk~ ~a~i1ities and ~ei~vi~es which t~h~ people want. But HIL 12341-failing to recogni~e both the existence and value of this diver~ity-sp~lfies-page 3, liri~ 1~ and 17-that the local pro- grams shall rebuild and restore- through the eom~entrated tud coordinated n~eof all as~a11~bIe rederal aMa * * This requirement completely overloôks th~ f~t that 1i'eder~l aids- and there are more than 100 of them aOcording to the Departin~nt of Commer~e-of certain types iti~y not be desired by the people of a city, may not b~ appropriat~ for sti~rnilating the moet rapid corn- munity progress, or may relate to mattters of such low priority that inclusion in a local program would 4l~ hinder e~orts toward more important accomplishments. ~ . This reqtdrement, too~ oVerlooks th~ fact that it might be foisting off, on the local communities, Federal programs which are duplica- tory or overlapping, or which might be beset by hiefflciencies~ redtape, and recurriiig problems. Before writing such a shotgun pre~ription, the Congress should make a careful examination and evaluation of all of the 100 or more components~ to make sure that these comVonBnt~ (some of which have been GE: the Federal medicine shelf ~in~ a,s long ago as the great de- pression) ate nece~ary and. effeetive, t~r make sure that th~ iniEtures will not prOve harmful, and, in fact, t~ make sure that the mixtures will be actually salutary. TREATS StMPTOMS INSTEAD O1~ OAtY~BS OF 1'1tOBtA!~MS Slums, hfight, congestion, and other city problems are caused by forces which operate throughout urbanized and metropolitan areas. They are no more confined to certain ne~ghborhoods than are the autos (which c~rn produce traffic congestio~m) confined to downtown and prevented ftom coming from or goh~ig ~to the suburbs. Until causes are identified, traced, an4 treated on~ an~areawide basis, they will con- tinue to create increasingly heavy city pr~iblem~. But the bill does not deal with c~tuses o~f problems. Instead, H.R. 12341 deals with symp*oms-as if putting ice on the head of a patient would get rid of the illness which caused the fever. The bill talks of "~ * * rebuilding or restoring entire sections and neighborhoods * * *~`~ of ~ ~ ~ public~ facilities ~ ~ ~ commercial facilities ~ ~ * industrial or other centers ~ ~ ~ of C~* * * educa- tional and social services * * s," and so on. But it does not direct any efforts toward pinpointing the caus~s of city problems or toward broad-scale, areawide action toward roc~tin~ out causes of problems. (4 AIDS- MERIT wonder.~ ation, in ~i rate of enditure ~tantities *1 PAGENO="0033" I ~ CITIES ~ _Jut e: more 1)1) support newer an aren - ~ts to 5 pe: S to the ei PAGENO="0034" 620 `DEMONSTRATION CITIES A1~jD URBAN DEVELOPMENT What isto be included in the "~ocia1 services necessary," What are "maximum opportn~dtiies," What are "adequatelocal resoi~rces," W~he1ther "machinery is avai1a1~1e," What~1ans meet "the requirentents of the regulations," What is' "maximum opportunity in the choice of housing," and even "what additional requir~metits" might be needed. Anybody, everybody, ~r ndbody cquld qualify under such require- ments~subject to the judgments of th~ Secretary. Tinder these circumstan4~es, it seems apparent `that a relatively small group of pities is going to get a kt ~f' Federal money, and that the people iii the vast majority of the Nt~ön's 18,000 municipalities (and in its 17,14~ t,ownshijjs) will not only i4~t get the money, but will be pay- ing the ta~e~ toprovide the few with `t~ money. How much Feder~d money will tbis small group of cities get? While we have heard that the amount will ~e on the order of $2.3 bil- lion, no limit (not even such a huge one) is contained in the bill. Instead, H.R. 12341 provides (in see. l2onp. 11): There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this act. This vacant stare at costs, in a bill overwhelmingly concerned with putting mo~iey into a relatively small n~nber of cities, seems to imply eitherthat the wQrk ofdetermimng `the~oests has not been done or that there is a reluctance to divulge and star~d on such determinations. If I may ~ insert another sentence orltwo beyond that in the text. We would s~iggest that the Budget Bu~reau might be able to render such an estimate and that this would `be of importance to the commit- tee and to the public. Certainly it would be of great interest to th~ national chamber. The national chamber believes that ~t is important that costs be determined `and exposed to full public sc~'utiny in this important field of city improvement. ~ Because ILR. 12341 is based on quest~oiiable `assumptions, extends Feclerai controls, requires USB of all ava~iabie Federal aids (without specific, limitations regarding desira~bilitj~, appropriateness, or prior- ity) , treats symptoms instead of causes ~ problems, dwells on money without recognition of the importance of4*ople and ideas and leader- ship. provides no ob5ective criteria for city selection, and would benefit the few at the expense of the many, the national chamber urges that the bill be rejected. At the same time, however, the national chamber urges that `alterna- tive actions be taken to promote city progr~s.'~ N4TIONAL CRAMBER ACTION PO~t CITY PROGRESS The national chamber works for the a~hievement of effective and lasting solutions to city problems. We reeognize that some cities are achieving greater success than others in `c~orking out their problems. But we believe that insufficient attention has been given to many dif- ferent efforts being made, and that there has been insufficient orga- nized dissemination and interchange of id~as which could speed the progress of additional communities. Consequently, the national chamber, firsl~ is taking action to bring together, organize, publicize, and dissemii~ate information on alter- PAGENO="0035" DEMONSTRATION CITIES A RBAN DEVELOPMENT 621 native succes~fu1 approaches cur e ti being used for so'ving city problems. Areas in which nation 1 h mber is working include steps to: 1. Conduct conferences for Stat , l~cal government, and com- munity leaders at which offici 1 a d experts present information and recommendations on way o odernize local and State gov- ernment actions for the more ci nt solution of urban problems through the exercise of local a S ate government responsibility. 2. Gather information, f o communities throughout the United States, on ways in whic u ban problems are being solved by the mobilization and utiliz t on of local resources, and publish reports giving detailed infor ti n on how the problem-solving action was organized and bro g t o completion. 3. Provide consulting servi e t distribute know-how on corn- inunity development to beth r va e and governmental leaders. Second, the national chamber re gn zes tl~e need for systematic and comprehensive work to `blaze th ra 1 to i~i~rer and more efficient methods for solving city proble a d contributing to community progress. On this, we believe that we are I e dy taking thelead tbroughthe national chamber's task force on e no ~ ic growth and opportunity. TASK FORCE ON ECONOMiC ~ 0 Tfl AND O'PPOflTUNITY As I have indicated, ~ the nati al chambe~ fully recognizes that improving the quality of urban li e s' among the most critical of nationwide problems. By opposi .R. 12341 we in no way imply the contrary. But we believe th t so utions to complex urban prob- lerns can be best found through c r fu ly planned studies and projects involving local talents, resources nd initiative rather than through crash projects predominantly dir e by people sitting in Washing- ton, D.C. In accordance with this convict o , ie national chamber has invited over 100 chief executives of ma o merican corporations to make serious independent studies of t o this country's most important domestic socioeconomic problems o rty and America's cities. This business study group is called th as force on economic growth and opportunity. The chairman is r i D. Canham, editor in chief of the Christian Science Monitor. The task force has now served f r ver a year and a half. During this time it has devoted its enti e eff rts to the study of poverty, a problem that relates closely to citi s Over 35 leading experts have been commissioned to develop bac g und papers on various aspects of this important problem. Teii p n s involving over 100 authorities have met to advise the task force ix field trips to representative parts of the country have been a e to get firsthand information at the local level. The task forc it elf has researched the subject. Two reports on poverty have bee is ued to date ; several others are in various stages of development. The two reports address themsel es to a host of issues, ranging from the definition and measurement o p erty ~to changes in the Social Security Act. The value of thi s udy is indicated by comments received from private and publi `1 aders who have read the first PAGENO="0036" 622 DEMONSTRATION CITIES ANI~ * URBAN DEVELOPMENT reports-from Bill D. Moyers, speciaU assistaiit to the President, who told the task force that the study was providing "many extremely useful insights Into the problems of poverty," to Governor 1-lughes, of New Jersey, who told the task force that "an effort such as yours- a* serious, independent and extended~ study of poverty-will be very ~ignifieant in carrying ~ut the w~r ~against poverty," to Daniel P. 1~[oynihan, former Assistant Secretai~y for Policy Planning and Re- .searcih, U~S. Department of Labor, 4d now a member of the faculty of Wesle~an University, who recent1~y wrote in an academic journal that the first report "is perhaps the ~nost competent commentary on the Government's antipoverty progra~n yet to appear." The national chamber's task force has now begun a similar study ~of America's cities. The study will look at the causes of urban prob- lerns in a methodical and scholarly approach. The economic poten- tial of cities will be analyzed. Major problem areas, such as housing, transportation, environmental pollution, fiscal and governmental ar- rangements, wiN be E~tudi~d. A reseairch ~idvisory committee of 1~ outstanding experts on urban issues has been formed to help the ta$ force. These experts are: . William U. Coleman, executive dir~,ctor, Advisory Commission on Intergovernmental Relations ; Thoma4 Coulter, chief executive officer, Chicago Association of Commerce and Industry ; John W. Dyckman, chairman, Center for Planning and I~evelopment Research, Univer- sity of California at Berkeley ; C. Lowell Harriss, Department of Economics, Columbia University ; Walter E. Hoadley, vice president and treasurer, Armstrong Cork Co. ; Norton E. Long, Joint Center for Urban Studies, the Massachusetts In~itute of Tecimology and I-Tar- yard University ; W. Thatcher Long~treth, executive vice president, Greater Pbi1ad~1phia Chamber of O4mmerce ; Arthur .J. Lumsden, executive vice president, Greater Ha~tford Chamber of Commerce; Jerome P. Pickard, research director, lEirban Land Institute ; John W. Riley, .Jr., vice president, the Equitable Life Assurance Society of the United States ; John T. Howard, head of the department, the Dc- partmeflt of City and Regional Planni~ig, the Massachusetts Institute of Technology ; Saul B. Klaman, director of research, National Asso- ciation of Mutual Savings Banks ; Arthur M. Weimer, special assistant to the president, Indiana University ; and Arch M. Woodruff, provost, University `of 1-Tarvard. Arrangements are being made with~ leading universities to gather informatio~i and to tap the country's b4st brainpower. The task force has begun Ito commission additional 4xperts to develop background papers andto serve on advisory panels.~ Field trips are being planned. Further, the task force members themselves will bring to the study the rich background each has in economics ~nd institutional organization; in the practical solution of problems. As an introduction to the urban study, the task force recently held -a symposium in which over 20 noted urban experts participated. The proceedings of that symposium will soon be published. Following this, the task force will issue reports dealing with various aspects of the urban scene. These .re~rts will b~released one at a time as soon as they are completed. As in the case 4 the poverty study, the reports will be made available to the President and his Cabinet, to the Mem- ~bers of Congress, to the Governors of the States, to leading colleges PAGENO="0037" I DEMONSTRATTON II I proLiems. i effective p01 alleviation veloped oui we advanee To be sure, a~ that act solved. ~ very ore ~-for the Le programs de- ofen leads to chamber s of of the Ill on point ~ ~ such ana1ysis~ oblems. But *e registered vironment. a statement. er PAGENO="0038" DEMONSTRATION CITIES AND URBAN DEVELOPMENT Mr. FINO. Thank you, Mr. Chairma~i. Mr. `Steiner, your testimony consid4red it so basically and entirely on the biflH.R. 12341. It made no m~ntion in thetestimony of H.R. 1~»=9~6. If~it is convenj~nt, could yoi~ provide your position on this bill for tJi~ record of these hearings ? .~ You do not have to answer it now. You can supply that inforrnatiox~. Mr. BARREI'T. Without objection, so drdered. (The information requested follows :~ SUPPLEMENTAL Vu~ws OF NAMES F. STEINER, CQNSTRUCT±ON INDUSTRY MANAGER, ON ~ H.R. 12~4e Title I of H.R. 12946 would provide (with~respect to certain Federal subsidy programs) extra subsidies in the ease of proj4cts which are planned, programed, and coordinated on a metropolltanwide basis. In metropo~1tan areas containing ~ a nunrb~n, of municipal jurisdictions, the projects in one such jurisdiction can have e~eets, good or bad, in other juris- dictions. Coordinated project activities migl4 produce greater total benefits for all affected jurisdictions than might uneoordfttated activities-hut, of course, not necessarily greater benefits for the jurisdictlbn in which a project might take place. ~ Differences of opinion arise, however, with regard to ways to achieve joint action. ~ The national chamber believes that the ansWer lies in the establishment of a true community of interest. That is, that, first, there must be created a broad public awareness that some types and sizes of~'projects In one municipality will have effects in others ; that, second, there must~ be an appreciation of the extent to which each and all might benefit from mu4ual action ; and that, third, this awareness and appreciation must be translate~ Into effective public demand for coordination of ~pecifie activities. The bill, H.R. 12946, uses a different approach : It is aimed at using the pres- sures of the purse to produce governmental coOrdination among the units of a metropolitan area. Specifically, it would do this by providing bigger subsidies to those who coordinate than~ tO those who do not. Without debating the merits of using such Federal subsidy pressures, we would point out that there Is an important question which the bill leaves unan- swered : Why give an extra subsidy to those who coordinate instead of making coordination a prerequisite for the granting of the hasic subsidy? That is ; if coordination is of as great importa$iee as stated in section 101, and if Federal subsidies are to be the device forpr~ssuring such coordination, then why not make sueh coordination a requirement fo~ locaLparticipation in all of the federally assisted activities listed in section 1O~ of the bill? Would this not produce more w1de~pread coordination, and, In~ addition, be more economical than extra subsidtes? ~ Title II of ~fl.R. 1294~ would set up a so-called ~iew towns program-encourag- ing municipalities and other public corporations to get Into the `buying and selling of land for development. ~ This proposed program seems to Imply that these Is a dearth of major develop- ment beyond the edges of our cities. Nothing could be further from the truth. In addition to major suburban development, prival~ enterprise is already creating new cities which are complete with industrial, shoppIng, and residential areas, as well as places for education and recreation. The i4~w town of Reston, near Wash- ington, D.C., Is but one of many w~ll-known exarnpl& The programpr4osed in title IZ simply ~1oes not~eem to be needed. Worse, the (~overnment land-1~uying feature might result 1n~a bidding up of land prices, thereby slowing do~vn new city deveIoj~ment and pi4ting up a high-price roadblock to people who oth~w1se might find a home and a p'ace to work in a new town. Title III of H.R. 12946 deals with the grant 4uthorization for urban mass transportation. When the urban mass transportation bill was before the Oongress in 1964, the Chamber of Commerce of the United States opposed the bill because our policy is opposed to Federal aid to urban mass transit. The position of the chamber has not changed. I 624 PAGENO="0039" DEMONSTRATION CITIES Pitle IV of H.R. 1~ tion centers" C an needs a~ cated in our st points which~ pens to be for a con, would ap~ nated at th programs, ce detail. Mr. FIN0.] and~ Id b~on~ C tainly, a useful. I v~' in its concept in many p~rams, educed ii~ size sent~d so that AN~ V~BAN DEVELOPMENT 625 PAGENO="0040" I 626 I~EMONSTRATION CITIES A4 URBAN DEVELOPMEN athriee which could be f6rwarded tJ ~i local gov~rnm~nts and local civic leaders so that they could get ~n with the job of solv'ng urban problems. . Trimming this proposal back to just a few cities might be ! orkable. But at this time there is no incentive provided in the bill t~ do any- thing except to proceed into a similar diemonstration. in other words, what the selected~ cities-we have hea.rd~ numbers from 10 Gr 11, to 60 ~r 7O~-.--would d4~monstratei is that with~'about 93 Or ~5 p~rc~tit ~bsid1e~th~j~ ca1~i g~t c~tjt~in action. What does this demo~istrate to otI~r cities? It only d~m~onstrates that they could possibly ~et similar a4~tion with similar treat4~ient. It is an incentive tc~ S~~dS Jfl line for ~ubsidies. This standing in line may take a long time I would have~to say frr the iiational~chamber we would want to consider such a prd~posal as ~ revised bill. Mr. PINO. As I understand it, it i~ your feeling that if t is bill is enaetsd, Congress sho~ild spell Out as nmch as possible, more efinitely what can and cannot bedorieiin.der its ~rO~isioi~s ~ Mr. Smi~j~n. YeA ~ .~ Mr. Fn~'o. On the demonstration city program, because of ts finan- cial needst and conccntra,tion on the frery limited number f cities, would it Mt seriously place in jeopardty new urban renewal o erations outside th~demonstration eity progrtm~1 Mr. STE~NIJ~R. I am sorry to ask you tb repeat, sir. Mr. Fn~o. On the demonstration cit~y program, because of i s finan- cial needs and its concentration in a very limited number c~f cities, wOuld it not seriously place in jeopard~r new urban renewal o erations outside thedemonstration city progran~ ~ ~ Mr. S~n~IN~i~. It would seem so to me~ Mr. Fmo. Just one more question. ~I have seen that the re 1 estate board ha~ ~hanged its pôsi~ion on the 4~e~t subsidy. Has the hamber also changed its position on that ~ ~ Mr. STemn~R. Our position was ennu~ciated- Mr~ Fnro. On the rent supplement ? Mr. Smr~R. We ha've not had a fqrmal posifion on the r ut sup- plements. This question was asked las1~ year of Mr. Robert P. erholz who is now pi'esident of national chamber. As I recall, he i dicated that rent supplements provision is ~ device which seems to him preferable to public housing as a cowse of action for helpng low income persons. ~ But we have not offi~iaily taken a position n rent supplementh. This was an expresion~.of personal judgment Mr. ]3~o. That is what I was going~to ask you. That was is own personal optinion and does i~ot reflect t1~e thinking and feeling of the orgaflizatiofl~ Mr. Smrrti~~. It was Mr. Gerholz's op~nion. Mr. BAi~rr. Thank you. The tim~ of the gentleman has e pired. Mr. Reuss? Mr. Ri~tr~s. Mr. Steiner, on two redent occasions I have ad the ~ppcrtunit3r to commend and congratulate the U.S. Cha ber of COmmerce for its factual and constru4tive testimony-on the Asian Development Bank hearing a few week~ ago, and earlier this eck on the so-call~4 Muskie bill before the Ho4tse Committee on Gove nment Operations. However, having heard ~he chamber's testimon here today, I am obliged to say that I find it~~ unbelievably negative back I PAGENO="0041" DEMONST IES AN U BAN DEVELOPMENT 627 p throacl. ~I Currency, g, and the s to be con- ~e1y map- PAGENO="0042" 628 DEMONSTRATION' CITIES' A~tD URBAN DEVELOPME T b ¶1 h V éities, w And lest f~ ~e recom ~nts of the ie~ nate debate. a the sneces tions froix tetically a1~ persna- eomn~1ssioned ~s and ~ inions. for 1gnlflcant\wa~r to 1 security~ retire~ notn out- ii legisla\tlon to tonth for~ single ~im- ag~ to 65 for~e was of the ~ and a I$ost of ~orc,e to c~ `tc Growl t.~.Ô1i"the r `~iortui~ Of Amer- )lVe nrba~ e~ of ribe ar throw new lig~it on o ig ~ur cities `be9er places PAGENO="0043" 629 ERWIN D~ CANIIAM. DEMONSTRATION CITIES A RBAN DEVELOPMENT nomic growth, the national chamber ~ha c nt ibuted to efforts to help all Amen- cans live better. And by critically eval a ing social arid ~conomic legislation and pointing to weaknesses and dangers wh r Ui y exist, the national chamber per- forms a significant service to the Nati . I point this out simply to correct a mistaken impression voiced by people o a e not fully aware Of the national chamber's past and present programs a d po itions and who judge the organiza- tion solely on the basis of its stand on iv n Issue or legislative proposal. I sincerely hope you can make this 1 tt r pant of the record so that the im- portant distinction in the relationship b tw n myself and the Task Force on Economic Growth and Opportunity and t e C amber of Commerce of the United States will be clear to all who read the h a n s. Slncerely~ Mr. Rzuss. Now, would you co en , sir ? Mr. STEINER. Mr. R~uss, ~u h e ~dicathd that you believe that the problems of cities have esca~ e e tatioflal chamber. We do not believe that this is true. We h v been students of the problems of cities for a very long time. * Mr. REtTSS. I was simply referri t your testirtiony here this morn~ ing, the portion that I read, whi t es the p~sitio~n that the cities hare adequate tax resources wit i eir borders, and the Fede'ral Government has no heJpful role to ay Mr. STEINi~R. There are two im rt nt points which might be made in this regard. First is the questft~n of wher h Federal Government gets the money to supply the `subsidies t t re proposed. Our conclusions are that, as we have indicated, the ed ral Government gets the money from the same sources that the lo 1 g vernments get the money, that is, from the people. Mr. REuss. If I may interrupt u ere, that is why I cannot really believe that you speak for the . . Chamber. Surely, the U.S. Chamber knows that the reason h Federal Government is needed in the picture is that wealthy peop e Fke U.S. Chamber of Commerce members-live in the suburbs, and do not contribute to the well-being of the central cities, and that is wh e Federal Govermnent, with its progressive system of taxation, h s necessary role to play. I just cannot believe that you have gon t at far back-to President Mc- Kinley. Mr. STEINER. I wish to respond to lie assumptions you have made, Mr. Reuss. If you will seo on the first pa e f our testimony, the statement indicates the number of business s nderlined that are represented by the national chamber. There a e ,900 business organizations with an underlying membership of 4,8 0, 0 businessmen in 50 States. I do not tiunk the record will sho at there are this many wealthy businessmen living in suburbs. h national chamber is generally representative of the whole busi es community, and this includes many small businesses as well as la ge businesses. Mr. Rnuss. My point, sir, is t at I do not . believe that the large number of those wealthy business living in suburbs who are mem- bers of the U.S. Chamber of Co erce agree with your statement here this morning. That is why I ant Mr. Canham to get on the record here. Let me ask you this. Your tit e i "construction industry manager of the U.S. Chamber of Commer "? Mr. STEINER. Yes. PAGENO="0044" 630 UEMONSTRATION CITIES AND~ URBAN DEVELOPMENT . ~ Mr. R$ss. The constrUt~tion indw~y is the industry that puts up I~omês andibuilds buildingsand factoijes? Mr. ~ Yes. ~ Mr. RE1~SS. You are designated to $estify on the whole pr blem of cities? Mr. Sa~e~ER. Yes ; I am. I have a1~o been responsible for t~ie activ- ity of the national chamber which hash produced the seminars~and the literature which shows 1oc~1 leaders how to solve urban problems through the use of local resourees. I~ you will take an objective look at `the exa~iuples in this publication called the "Some Community De- veloprnent~ Siic~e~s Stories," you wil1~ see that there is a ve~y wide range of sticcessful action accornphsh~4 solely by local initi~ttive by the use of local resourees, and without~FederaI subsidies. Mr. Retr~s. I would be the first to aree on local initiative, ~ut you have tittered one of the iiiost colossal non sequiturs of the 29th cen- tury just now when you deduce from the fact that some cities ~re able to solve some problems locally, that therefore no city deser~res any Federal help in solving any of its other problems. Mr. STEINER. This goes back to the~ second point that I wi~nted to make, on your reference to page 3, patagraph 2. This bill n-~akes no provision for the reorganizatiOn, or ~th4 study of the reorganiz~tion of the distribiittion of taxes. One of theicriticisms we hear mo$ often, one of the~atementh ~we hear most oft4~n, from local leaders is 4hat the level of taxation at t~ie Federal level ts so high that it create~ a dis- incentive fo~r additional taxation at the state and local levels. Yet the bill makes no arrangements for rest~dying the maldistribu ion of taxes. If it did, then some consideration could be given to utili ing the . Federal taxi ~. ng mechanism to collect. taxes and redistribut them among the communi~{es. What this bill would do is to gre tly in- crease the subsidies that go to a very fGw cities. The demonst ations would run for a period of 6 years. WI~at will it demonstrate t other cities ? It will demonstrate that after~ 6 years it may be pos ible to coordinate 100 Federal subsidy progi~ai~. * A~i'd if it s~tcceeds n that demonstration, after 6 years there shojild be 18,000 addition cities which shouM be accorded equal treatm~nt. I do not think th's pro- gram, on the basis of the infOrmation h1~ the bill, will succeed. Mr. BARiU!~TT. The time of the gentleman has expired. Mr. Harvey? Mr. HARVEY. I find myself not in coniplete agreement by any means with the statement that you submitted here this morning. Ne erthe- less, I have ` the feeling that the U.S. ~Chamber did not sub it the statement in order to be agreeable with 1~he members of this co ittee. Mr. Sn~n~is*. That i~ correct. Mr. HAi~vEr. However, you submitte4 it as a thoughtful anal sis of what you co~isider, or what you eonsideij to be a factual analysis of the problems we are consiclerhig. ~ I would ~ay to you that the U.S. ham- ber, I think, as the other organizations who have come before u~ with their testimony, shouldbe commended in this regard. I may n t hap- pen to agree with you, but I do not thi~ik that your organizati n be- came the representative of the business community in this great coun- try of the United States of America by coming before Congre s and saying, "Yes," on all occasions. I thin~ we need organization who will come before Congress and say, "No' aud present the altern tives, PAGENO="0045" 631 DEMONSTRATION CITIES A D RBAN DEVELOPMENT even though we do not happen to g ee with them, even though we think you may be 100 percent wrong. I think it is healthy when you do co e before the committee and do lresent your different philosophies. o I will certainly Commend you for it. On the other hand, I say to you, o e person who personally had to struggle on the local level as a m yo of a fairly substantial city in Michigan with some of the problem h re, I do not think your solutions would work. I am one who is con in ed today that the Federal Gov- ernment does have a role in these p ob ems. However, I have admira- tion for your courage and admir tio for the manner in which you presented your statement. Mr. STEINF~R. Thank you. Mr. BARItErrr. All time has ex ir d. Thank you very much for you gentlemen coming here this m r ing and making your statement. Mr. STEINER. Thank you. Mr. BARRETT. Our next witness wi 1 be our distinguished colleague from the great State of Californ'a nd a member of the Committee on Banking and Currency, Cong es an Burt Talcott. Come right up and we will hear your statement. STATEMENT OP HON. BURT L. A OOTT, A REPRESENTATIVE IN CONt+RESS ThOM THE S ATE OP CALIFORNIA Mr. TALCOTT. Mr. Chairma , in inbers of the committee, I am grateful for the opportunity to p es nt this statement to the Housing Subcommittee. I have introd c d .IR. 7434, a rather special, but important, bill to provide that ority of the community approve an urban renewal project befor i i begun. There are many compelling, n ral, and special reasons for such an amendment to the Housing ct f 1949. I intend to present only a few today. I am not opposed to the pri ip e of urban renewal. We need to renew our dilapidated urban a ea this is a constant task which should concern and involve e e y citizen and segment of the corn- munity. Blighted areas shoul be eradicated. Deterioration should be stemmed. One section of o e ~ vironment cannot be permitted to unnecessarily spoil another. t we must also preserve functionaJ and pleasant residential, busi s, ci industrial areas. These goals cannot be acco lis ed without cooperation and some coordination. Urban renewa a provide a vehicle otherwise Un- available-especially when t e v rious private property owners in a substandard section cannot, o ll not, get together-in a common effort for the public necessity. But the urban renewal pr j ct nnist fit and suit the community. Bureaucrats in Washington, a r moved from the persons involved, unknowled~eab]e about the 1 c 1 abits, attitudes, and wishes should not be making the basic decisi s. Individual persons are the ost important ingredient of a cominu- nity. Urban renewal must d a p irnarily with people-not just with shuns, buildings, and proper y TJrban renewal must be p rs nal, compassionate-but unfortu- nat.e]y, it has not always bee PAGENO="0046" 632 D~ti~roi~rsmATIoN'~InES AND~ URBAN `DEVELOPMENT Urban renewal should serve the needs of the whole commu ity, but unfortunately, it has not always don~o. Advocates c~f Federal urban.renewa1~hav~ too often flooded he news media wit1~ good intentions' and platitjicies. , ~ Urban $newal now exist$ upon 1arg~ amounts of public mo eys and Governmei~t `power, but too little pubijc :or individual `suppor. Urban ti~newal is expensive. Urbanr~newaI is' not a `free'Federai*onanza. We pay dear y for it through Federal taxes. The local comi~iunity pays heavily als . Ur- `ban renewal projects are not done cheaply. ~ Enormous profi s have ~been made in urban renewai,:but' not f~r the community and t e tax- payer who care about the expense. The typical urban renewal project dpstroys a great many h~ mes- ,&t* least 126,000 between 1950 ancj 19~O~ Twenty-five thous ml of these were iii~goOd eonditiOi~i: In the 19~O~'deeade, no more than 30,000 units were c~onstructed in urban renewaj'project areas. One h ndred ~nc1 twenty-~ix' thousand do*n'; thirty ~housand up. Unfortu ately, for the dis1~c~tted ~ families `~c~hô must find a place to live the 30,000 put up were out of the reach of their pocketbooks. The corn unity cares about this. Families displaced from an urban retiewal aren find it prac ically impossible ~ move back into the area. ~Rents in the renewed a ea go up, but the tenant's wh~èwithal does ?ot. Many of the dis laced families move to less favorable hornes-~-less space, worse cond tions, but'they pey~ higher rents, f~r less desir4ble locations.' Thus, t e net effect of urb~m renewal ` in the field of l4ousing has not been he pful. The commmi~ty cares about its dispiaced~persons. At least 1 ~iiiilhionpers~ns have been * ~`icted. The manner f the eviction is not always pleasftntor decent. ~ Y~u should know abo t the infamous'P~zta~ia case in my district. the urban renewal proj ct is `6 years old. ` "Mr. `Patarda is `~. He and his wife lived in their modest home for 42 years. It was in good conditIon, but in an area desig~iated for commercial ürbañ rene'vval. ` They ~re ofl!ered the fair m~rket ~value of their `hôrne-$12,500, I think-ni~t itearly adequate t~ r~lace their home toaay They de~li~ed Tb~y~were ordered evicted ~hey refused to ~ l~v~ Th~ sheriff ~was or4~cred to eNict them Mrs Patama was forcibly ~u~b&u~ phced in ~a strait~ack~t, a~id reir~oved iria stretchêkii~d~rth~ ~ ~f nation'c4M&t~i~vision and other re- porters Mr P~ttania. wa~ forcibly rern*v~d also Then, to a~d to `thefr `ignothiJ~othwer~aiied until th~i~r home~as build~zed t~ the ground to pt~nt `thefr i~eenti~ ` They h~ve ` also been sued for con- ~tempt of court awl dan~iages for the costs ófthe evictions' and the \spe- `cial, premature `dernolitisn of their' home.~ ~ Urban renewal had l~ttle compassion for tb.is old couple who could ~ot speak English and ~rho ~only wanted to keep their most valuable arid precious possession ( ext to life itself)-~heir home of `42 ~ea,i's. Ijthan renewal did no ` ` t ave comp~sion. " LJ~ban r~ewa1 cOuld nOt d&~ise n better way to rob ate the Patanias. ~Urban renewal didn't care ~bOiit people ; it cared nly about clearing ~prop~ty. Now the cOithuinity ihoüld ~rnd does ca4~ about evicted people nd how it is done and where they relocate. Re~'ocation is n~t just a w rry for the evicted family, but a cóncern and burden of the commu ity which cannot be discharged simply by payiiig money TI'he commu ity cares. PAGENO="0047" DEMONSTE~ATION CI'~IE$ In ever the evicte flot~~ by~ public good mu~ ~fe11ow man. their exub V. ~ court of C The opinion is~o.thr and so telling,, that I i concur in `the reman views. It is ir i are t.~. ziui protec~ [ness." bnless the a ~ .omlnate breaks it 1 band and ~ 110W 1 4~w 991, 85 P S., ec. 1701 et seq. - ~~1ie `L~tw 9~5, 85? S., ec. 1541. U 5lcense In he is compe~.~ .,0 PAGENO="0048" 634 DEMONSTRATION CITIES AND URBAN DEVELOPMENT move? And what about chnrches? Eve~i churches and other houses of wor- ship are Thot exempt from the ceaseless cr~rving of many for material prosperity and for constantly expanding political poiver. Too often, the planners consider themselves "Solemons," with unbounded, unfettered and limitless discretionary power to appropriate and condemn as dI~apidated (1) any and every property they believe is dilapidated, and (2) as Zarffe an area as they believe can be made economically more prosperous. In their desire for greater economic prosperity, these planners do not hesitate to tear down and destroy churches in any area which they may deem "blighted." See, for example, ~t. Peter's Roman Cat1~oUc Church V. Urban Redevelopment Anthorit~/, 394 Pa. 194, 14G A. 2d 724. In the case, the Urban Redevelopment Authot1~ condemned and destroyed, in the name of "economic convenience and progress," St. Peter's Church in Pittsburgh, which was considered by many to be th~ most beautiful Catholic Church in America. As tbi~~Ourt aptly said in Schwa~rtz v. Urban Rede'Velopment Authority, 411 Pa. 530, ~ A. M StE (p. 536) : "This court has held that the mushro4~nIng of authorities at all levels of government and the frequent complaints that the agencies arbitrarily or capri- ciously and unintentionally ignore or violate rights which are ordained or guaranteed by the Federal and State constitutions and established law, make it imperative that a checkrein be kept upon them. Keystone Raceway Corp. v. state Harnes$ Racing Uommiasion, 405 Pa. 1, 173 A. 2d 97 (1D61)." There a~re some of the reasons why thi~,s "blig1~ted area" act a'n4 t1~e poit'crs granted therein must, in the light of the~ constitutional guarantee of private property and the American heritage of ~ individual freedom, be aearchi'ngly ~crutjnigred ~nd ~striotly ooflsirued. Thts thejiower court failed to do. I cobeur l~i the remand. What si~ig1e $t8pean we taketo prc~mote th~ soci~dly desirable goats of urban renewal which genuineiy reviews decayed and decaying see- tions of cities bitt eliminates the hea~t-rending eviction of thousands from their homes or businesses wh!ch can be better re1ia~i1itated through other means ~ I recommend the incorporation of a community referendum in the project approval process. The people in the community ar~ intelligent enough,, concerned enough, and wise enough to make the ~cisons which are best for them and their communities. j The whole community should un~rstand, approve, and support worth'~ nrban renewal projects-but $~his, unfortunately, has not al- ways beenso. * It is not ineonsistent with democracy, representative government, or citizen participation to require propos~ad urban renewal projects to be approvdd by majority referendum. A referendum would serve three es~ential purposes almost entirely lacking now : ( 1) marshal public support, (2) encourage community involvement in public affairs, and ( 3 ) ~ put urban renewal proponents on their mettle requiring them to deve'op and sell a project which has merit and will serve the total public~interest, rather than benefit a small coterie of speculators at pnblic Ixpense, and the diminution of the rights of individual persons and bilisinesses. If a renewal project is not well ei*nigh planned or explained to satisfy a majority of the commithity which will be expected to pay a heavy portion of the enormous costs ann to ~hare a portion of the bur- dei~s (as well as enjoy the benefits),, then there is ~o justification for it in our present-day community; I PAGENO="0049" DEMONSTRATION CITIES If a slum ar proj phases of urban re renewal authority, provals and r~ lowing chart DEVELOPMENT i submit 635 60-878--66-pt. PAGENO="0050" Philadelphia, Pa~ Smitbville, Mo_ Liberty, Mo Lawson, Mo Excelsior Springs~ Mo Louisville, Ky -~ Dedhain, Mass~ Do Adams, Mass - St. Petersberg, ~`ia S~n Diego, Calif Hawthorne, Calif Santa Rosa, Calif Berkeley Heights, N.J~__ Columbus, Ohio Fridley, Minn Little Rock, Ark Omaha, Nebr~.~ - Alton, Ill - Fairfield, Conn. Franklin, Mass.~~ Miami, Fla Los Angeles, CaUL Marysvllle, Calff~ -~ San Antonio, Tex Kansas City, Mo St. Ignatius, Mont Artesia, Calif Roanoke, Va Madison, Wis Waukegan, Ill Alameda, Calif Do Bangor, Maine Benton Harbor, M11h Betblehem,Pa ~. Denver, Cob ~ Gainesville, Ga ~ Manchester, Conn ~ Newport, Ky South Milwaukee, Wis - - Kansas City, Kans New York State Monroe, Mich Hazard, Ky ilaltimore, Md Baltimore County, ~Ed~ Cleveland, Ohio Orlando, Fla Rutland, Vt Do Lexington, Ky Columbus, Ohio~.~ Wilmington, Del Philadelphia, Pa Sapulpa, Okla Santa Monicis, Calif Livonia, Ga Hoquiam, ~ City For 5 to 7 2~ 344 2 to 3, 000 3, 874 2,300 (1) 1, 414, 174 . . Against 709 3, 780 1,264 659 83,131 70,983 58, 988 93, 466 62.6% appro~ral 8,027 15,911 3,927 4,764 2,623 4,706 4,341 10,749 112% approval; needed 55% (2) ~ (2) 3 to 2 margin for 2 to 1 rejection (3) (3) 250 75 Approved bond Issue Subject Bond Issues. Authority. Do, Do. Bond issue. Project. Do. Do. &uthorlty. Do. Do. Bond issue, Project. Bond issue. Project. Boild issue. Authority. Do. Bond Issue. Project. `Referendum. Authority. Elderly. Authority. Bond issue. Authority. Referendum. Project. Do. Technicalraising offund through mileage assessment. Bond issue. Do~ Do. Do. Do. Authority. Proposed changes In u ban re- newal and housing a tide of constitution. Program. Project. Bond issue. Do. Do. Authority. Project. Bond issue. Project. Bond issue. Do. Authority. ~86 ~- ~MO~SThATION ~iITII~S ANI~ VRBAN~DEVELOPMENT Ii~ferendwin~~ on t~rbanlrcnewfa i~sI4e8 Date 19~, 620 322 366 , 134 300 70, 712 141 ~ 1, 711 ~ ~ 135 1Z232 .37.4% 2,164 :90% 1 to 5 73., 088 ~ ~ 227 201 109 130 ~ 7, 819 60 1,33~! 35,. 150 ~ . 62.6% 3, 138 . 10% N4y. 2, 1965 ~ch1t. 5,1965 Sept. 7. 1965 Nay. 2,1965 Mtt~~r 17, 1965 7utie ~12, 1965 $e*t. ~27, 1065 ~ 5, 1965 8e~t~ 21, 1945 lute 15 1965 Oct. 5,1965 gainst 26, 000 ~4,000 Nov. 2, 1965 g~Inst 1 for 1 to 3 4 to 31, 121 4, 609 3, 931 546 50, 277 6 to 0 946 Overwhelm 34.7% approv~ 87 349 13, 712 18, 121 4,099 2, 962 2,969 4, 044 64, 319 7,104 8, 088 595 48, 922 gainst 1.061 ng appgoval 1 (not enough) 52 1, 440 564 18, 488 9, 400 8, 171 8,251 3, 568 No~'. 2,1965 Nor. 2,1965 Ma~ 11,1965 Apij. 6,1965 Feli 16, 1965 Matj. 11, 1905 Jan 28, 1964 Jan 21, 1964 Mar. 24, 1964 April 1904 Jun~'30, 1964 June 1904 June 30,1964 gainst 34,300 I for 1,219 1,240 ~,300 (1) 2, 018, 579 ~. 1 Bond issue got majority but not required 65 percent. 2 Voters transferred by 8 to 1 margIn responSibility for urban renewal program from housing au hority to mayor. 3 Approved program of storm drain centers as support nonca4i grant In aid for urban renewal pr gram Mr. Chairm~rn, support for my bill ha~ come from many quar ers. The amazing thing is that, while I have nc4t publicized the propos 1 or solicited suppc~rt, letters and petitions of ~upport have come to e in unusual quantfties. Approximately 800 p~rsons have signed petit ons favoring my bill, H.R. ~7434. The petitioners come from Chic go, PAGENO="0051" I Ill.; Kal D1~MONSTRATION CIdLIIES DEAR MR. TALOOT ment as it is .~:: urban renewal to the mi PAGENO="0052" STAT~~S1[~T 0P ~ T. BiTTVE1~, VX~E 1~R~Sfl~fltT OP IN * ~ TOBS SYNi~I~TE CRZUIT 1~O~RP., M1]Tht~POLIS, MflThT., ON BE*ALP O1~ Tifl~ 1~TIONAL liOM~ IM?RO~E~EIft COiJEIL L~ENDE~S COM- MITTKE; ACCOMPANIED flY THOMAS C. B1~ICKTZ L1~GI*LATIVE iflZSBNTATIV1~, NATIONAL L~ThBER & BUILDING ]~ ThIUAL DEALPJRS ASSOCIATION ~ Mr. Eü~tt~. Mr. Chairman and n~emb~rs of the eommitt e, I am E. T. B~r v~ic~ p~esid~nt of I~iv$tors Syndicate Ot~d~ Corp., Minneap4is, I~'finn., and I ~uii sp.eakin~ for tho L~iders Corn itthe of the Natioiial Home Improvement Co~tnci1, of which I am c airman. Why ~ iii1~ei~e~t will be ~enre4 by smending title I f FHA pro~r~~Tn Thinks, savings ~nd loan ~ociations, and other nancial institutions have made more than 28 rIiiuion home impro~rem nt loans under th~ FRA~ program. Thirty years of experience leav s unde- b'a~tabl~ th~ p~thtiv~ benefit to the soeial and economic welfar~ of our coUhltl7 ~ this particuli~r Government-sponsored prograi~n. For those 30 yars t~t1e I has been the st~iidard apinst which a~ll other home improvement flnanci~g plans flave been rnea~sured. ~ ~Fitle I, however, J~s fefled t~ keep p~c~ with~h~nging coon oinic coi~ditions. The ~ t~ th~ bor~'o~we~r is th~ same ~s that set by law in 1~)34, and during thu interim the cost ~f !iving~and the cost~ of doing business has increased rnanifc~ld. For 10 year~ there have been no ch~nges in title I in the maxirntu~ amount of i~an available or the m4ximum term of the ben and the rapidly declining use of title I is show~i in the following table: 638 DEMO~'STRATION CITIES ANi~ URBAN DEVELOPME P in them.~eI~ves as children of God, and so jthat they have a responsibi a need fo~ God. All ~ people need a be114~f in the loving God, and than the i~1ifórtunate. In som&e~1ni~iiinthies such a La Porte-a4d Logansport, ~irban renew defeated ~rhen the voters have put pre~ures on the city council. since in some immicipalities the city lead~rs are not as responsive to of the people, a referendum is necessary ~to make clear whether the prove an~ authorize such activities. We haveadditional evidence to support yOur bill If you desire it. Situ~ere13r, lity to and none more ii has been However, the wishes people ap- CLAUDE H. GODDARD. Mr. Chairman, the evidence proves the need for improved urban renewal proced ~ ures The whole urban renewal program w11 be im- measurthly strengthened by passage~of my bill, H.R. 7434, roviding for a p~31Wlc refereli duin for urba4 renewal projects. I urge the support ojf you~su1commiftee. Thiujk you. Mr. BA~tu~rr. Th~IIk yOu, Mr. Tal4ott; The iiekt witness will be Mr. Ed ~3utler, chairman of th Lenders Committe4~, .Ni~tional Xlorne Improv4ment Council ; accomp nied by Thomas 0. l3rickle, legislative representative, National Lumber & Building Material Dealers Association. Please come forward, please. Please feel at home here. ~ We are hoping thst we can move quickly this morning and give you a chance to read. your statement through and~ then the members may want to question 3tt)U. PAGENO="0053" DEMONSTRATION CITIES AND URBAN DEVELOPMENT 639 Installment creö~it e~tended in repatr ansi moZern4~xi~tion Ioan~ Percent of ioans insured ~flI FILl 52 40 45 44 41~ 41 37 30 29 The Lenders Committee of the National Home Improvement Coun- cii is cQnvrnced that unless changes in title I are effected, then the demise of title I is inevitable. Already its effectiveness has diminished to the detriment of the consuming public as indicated in the above table. The Lenders Committee recommends and urges adoption of the administration-supported amendment, H.R. 13064. We urge adop- tion of that part of H.R. 13064 which has to do with federally insured property improvement loans, and further recommend that title I be put on a sound competitive basis by increasing the maximum amount from $3,500 to $5,000 and extending the maximum term from 60 months to 84 months. During the last year the Federal Home Loan Bank Board saw fit to authorize Federal savings and loan associations to increase their limit on home improvement loans to $5,000 and 8 years' maturity. This step by the Federal Home Loan Bank Board is in recognition of the fact that the cost of home improvements has steadily risen dur- ing the past decade. Today the consumer needs loans for amounts greater than the statutory limit of $3,500, and the consumer also needs a greater period of time to repay these loans than the statutory limit of 60 months ; thus a steadily growing mimber of consumers are learn- ing that their needs cannot be met under the title I home improvement pro ram. ~L*7UU ~ ~ 1900 ~ 1961 1902 --~ 1903___~. .-J.-~--~--~~ ~ --__~_ ~__ --~_-*~ too I which often ~ payment of j for costs. Wage fees, and oi I. Year: 19~~ 1fl~(~ PAGENO="0054" 640 ~I~3l3ONSTRAT1ON :*CIPIES *A ~ UEBAN' DEVELOPME P Gen~ra11y o~r1ooked is this sign~ficant fact, that not o ly is the ` homeowner suffering because of the~e unconscionable char es, but if these a4ditional costs could be chai*ieled into legitimate p oduction there would be much ~ additionaj business for suppliers, m r& honest profits for dealers, and more work for artisans. Our present-~1ay ecori- omy cannotlong withstand the drain~which appeases these d~mands in the consrnm~r credit field. A revita~1ized title I program ~s a good solution. ~ . t Under .ao1D~e ~oui~entional sources. ~f home improvement ~EInancing the honié~wneris-oftenthe victim o1~ improper. selling pract~ices such ~s-~ - ~ ~ ~ ~ I ~ . Sah~ i~diteni~nt~ wherein th~ cori~siither is promised his i~nproved hon~ wilVbeuséd asa modelfor adv~tising or other purpose~. ~ Debt consolidfttion: inflating the cost of the improvement o that a loan may~ be obtained which covers the: actual job and other debts as well. ~ Promises ~f rebates~ bonuses, comn~issions, et cetera, that re dan- giedbef6r~ th~consnn~ier it~ an indnc~r~ient to improve his hom Fa1s~UM*tthes andmisrepresenta$i~ns of products. Rep~e~ta ~ titm that the~purchase is ~n ~t trial basis. ~ Und~r~a~ revitáli2ed :titi~ I progran~ the consumer would e given protection flgainst such imj~roper selIii~g practices. Informati n from better business bureaus clearly indicaths that complaints are inimal under titie~I, but `have in~reased irnm~surably since there ha been a lessening~Of the use of title I and a g~reater use of some of he con- ventional forms of financing. This m~ans that where the pr tective devices oftitie I are riot reqmred, and t~e financing is done und r some of the conventional plans the consuming public is the loser The reOe~t interest in ~,,onsumer pr4tection legislation mt oduced by rna.nyo~ the indivithmi State 1egis~atures is clearly indic tive of this trends ~ ~ * * Title~ I~ regulations have d!orded pr~tective measures for t e con- sumer wh~rt~ th~ contractor arranges the loan for the consume . The FHArequii~es that- The lei~ditig instiutions will not pay the contractor until the home- owner signs ~L completion certificate stating that all terms of the agree- mentwithtlie contra~torhave been fulfilled. ~ Th~ ~ontr~et~rmustsign astaternent t~iat all bills in connectio ~ with the hôm~ improvement have been paid ~r will be paid within 6 days, ancl~ this i1m1~eases the borro~wer's pr*~tion should * any clai by a sub~ontra~o1~ris~ ~ . ~ ~ Since contt~acth~ know that failure t4 take care of complain s that are legitimai~e mig~ht~cause F~i1Ato reettict their participation n the title I prôgra.m, tille I is a persmisive fo~ce in infiu~ncinggood ork- manship and consumer satisfaction. ~ ~ In additioiitothis, title I loans are the most economical for th con- sumer in today's money market. I might mention that I personally asked the branch manager f my company to obtain for nie rate charts of conventional plans in their particular territories, and 1 received chi4rts that ranged from per- cent to 12 pei~cent discount *hich mean~ that the true interes rate would be som~wher&from 10 percent to b4ter `than 20 percent in simple interest. I PAGENO="0055" DEMONSTRATION çIT]ZS uite' appairer onto Mr. BARRETT. (The staternen~ STATEMENT BAN DEVELOPMENT 641 so ordered. NATIONAL the Nationa1 g community has realined lnsui PAGENO="0056" 642 DEMONSTRATION CITIES AND~ tEBAN DEVELOPMENT The declining use of FHA, title I insurance restricts the consuwer's a ternative for h'emè imprweinent llnanciBg. He must r~sort to noninsnred financi sources, which in soi~e cases do not proffer protectl4us balanced to the best in erests of either the btrrower or the leiider. Freque~it1y, the borrower is enco raged to refinance au~omob!le loans or ether obIigati~nis as part of a home imp ovement loan. Perkdically, shady o~ th~eptive pracl4ces are used to induce the orrower to engage In an ill-conceh~ed ~ui4 Imprope~1y planned improvement. ~`inal1y, under a iimit~ed number of len~~~ig concepts, 4xeessive interest rates, hid en costs, and subtle i~inovations can crn~ume a disp~oportiona.te share of the nancing. Although the aforecited practi~os are not 1i~dicttt1ve of all the membe s of the money market, they occasiouall~r appear. Since the inception of title I the costs fÔ~ labor and material have ~, creased to a point where the FHA limitation of $8,~OO is inadequate when ~th loan Is cOniddered by the homeowner. In addition, J~bè 60-month maturIty ma require payments in excess of the homeowner's abillttv to pay. If the borrower I unable to program his improvement plau within the ~cope of FITA title I, he mu t resort to other forrn~ of financing which do not ii~clude the protective prov' ions re- quired by tbe~ FHA, such as cofltr~etor's eom~letion eer1~Ificates prior to ayment and statemeu~s hidicating that n~*terIalmen w~;e paid. ~ Keepthg izi ~nind the dedilninguse of title ~,reeognizing .th~ everchan ~ ~ng eco- nomic conditibns, appreciating the need for ~i~tne improvements, and cknowl- edging the e~nsumer's need for financing aI~;ernatives sb~uld prompt ongres- sional interest in revitalizing the title I progra~u.. Therefore we urge the committee to seriou$ly consider amending PHA Title I Home Improvement Provisions, ~iass I-A, by 4stablishing a $5,000 loan ii itation and a 7-year maturity. We believe such chaliges will convert title I to a more realistic program for the benefit of all parties to a home imj~rpvement e deavor. Mr. BtrmisR. Thank you. Mr. BARRISTP. Yes, sir. Mr. ~ Btr~u~. Congre~smau Weitner ~was to be here with ~ e. I thought I wiEs going tobe on after imich. Mr. BAiu~*rr. We moved more rapidl$rthen expected so we d cided to hear you 1*fore lunch. Mr. BurrAR. Thank you, Sir, I appre~iate the committee's h ariug me. Thank you. Mr. BARRETT. All time has ~xpired. The committee will stand in recess until 2 o'clock. (Whereupon, at 12 :35 p.m.~ the subco*imittee recessed to reco vene at 2 p.m. the same day.) ~ A1~IOINOON SES~ION Pi~esent : 1~ei~,esentatives Barr~itt (p~esiding), Moorhead, euss, andHarvey. Mr. BARRI&rT. The committ~e will com~ to order. Our first witness this afternoon is ~ the Honorable Charl L. Weltner, one of our distinguished colleagues and One ~ho is oved and respected by all the Members of Cong-ress, regardless of wha part of the country from which they come. ~fle is also a member o the full Banking and Currency Committee aitd certainly has proved him- self to be very knowledgeable and very ca~ab1e. Congressman, it is an honor to have ~~ou testify before our om- mittee this afternoon, and if you desire to make your stateme t in full, you may do so. I PAGENO="0057" Mr. WELT ful for iei Ch~ ced out last yea nation: I am grate-' `I `I PAGENO="0058" 644 * IEMONSTRATION CITIES ANL~ URBAN. DEVELOPMEN on one Side of our home h~ been vac~u~over a year. Onthe o her side since May." *~ ~ I Then she says : "In this case tho [sib] no tenant is the best eighbor you can have. Even rif~-raft [sic] w~n't move in any more." With your permission, Mr. Chairmi~n, I would like to offer hat and I should like to offer correspondence 1 originated with the ommis- sioner of the Housing Ad~tninistratioii subsequent to the pa sage by the House of the chairman's `bill last year. Mr. BAmt~vr. Without objection it i so~rdered. ~ (The letters referred to follow :) ~ . ` - ~, 1965. Hon. O~nti~s W~LTNER, C~pitoi Of4v~êBuiiding, ` WasM,ngton,~D.C. ~ . ` DEAi~ MR. WEL1~N~Z Will 3?OtI please g1ve~me tUi~ information you y have co'neern&ng the rairfax si~bdtViS1on. We ar~ living in very terrible ditlons and there seenis to be no hope that the city e~ Atlanta will ~o anythi about ruining our homes. ~ I understand that . the* 40 not need the propert but we should not be left between `those `two runway~ This area Is a slum now and we are tr~yit~g to get `urban renewal in erested. About 50 houses are lived in by the owne$. About 50 are rented nd now mostl3r tO~fl dawn ; 25 are vá~ant. One o4'~ie S1ie ~f `our home as been vacant over ~a year. On the other side sine41~a~. , In this case tho n tenant is the best ne}ghbor ~ou caii bave~ Even rift4aft won't movein ánymor. lVhat hap$ns to the mOney appropriated ~*r bou~es~ The airport as been given inlllIo$ 1!or runways and adjacent ~$1~o~~erty. N~w I see wh ,e they want to sefl: ~onds totalThg $12 million, I ~nderstan d that the FAA as the final say so ~ the money Is t~ be spent. ~ We have gotten the runaround from everyone. They tell us `that e have their sympatb~, thel understand our problen~, etc. I do not want to r ise my teenage daughter in a slum. Have you seen this~arêa lately. My husb nd and I have 15 years equity in our home and are ~ too old to Just walk if and start over. ` ` We (I am acquainted with most .hom~own~rs) are willing to coopera e with anyone to get rid o~t this prop~rty for wh4 we have In it. Why d es the property all a~rmm*% us sell ~ ~25 000 an a~e when ours is worth n thing I understand ~thtt "J~aiiny Ma~" ` has soidjour mortgag~ to a Wi consin clonipany. ~ ~ Is there añyihope for us? A tazpayer, a reg~tered voter. I remain, Yours very truly, , t ` ~ S ~ ,~ 1~~fAEoAaEP G. Ho TON. ~. ` JULY 1, 965. lion. PHILIP N. BROWNSTnIN, ` Con~n~issioner, Feder~Hou8ing Adnvinitstration~ Washington, I~.C. DEAR Mn. Bnowrts~rsiN DUi4fl~ the ~past feV~%' months, I ha~re become I man- ingly concerned over the pUg~t o~ herneowners~'!u sections adJacent to fe erally assisted airpovt~s. Inmy ~wu di$rtet, suhsta4t~iai federal funds Mve g ne to expand the At~4nta Mnn1eiI~ai A11'1~X~rt under t1~é ~ederai AirpOrt Act. R way proximity has ~i~eated severe prob~ems of noiseland vibration with a subs quent shaxp deeUnein~ropert7 value. ` ` ``~ ( S ` Yesterday Congress euaeted the Uou.singand~rban Development Act of 1965. I caU your attention to the eomi~nttee reeom4~endat1ons under title II FHA Insurance Operations, dealing with the problem ~fpro~xim1ty to airports. ` The committee cites its' deé~ cth~ern over the tardship'suifered by homeo ners in' this categOry, and stroligly nt~gen the FIT~& Commissioner to revie his present policies and procedures ip~ order to ~ ,*~ reduce the economi loss suffered by these homeowners in the event they sell their homes. I hope I will hear from you in the very nea~;futiire concerning thIs s rious problem involving thousands o~ citizens who ar~ severely Injured by the pr sent situation PAGENO="0059" S 1~ S S thi t~ tF II cit xi 96 ri. I'S BAN DEVELOPMENT 645 ational Ho~á1ng Act, H.R. 696, rcbiem 1~1x~t 1~ desUnei to grow les. ~ tF~S tONGSflF~E~ Wfl~LTNES,. .. Momber of Congress. r on the recommendations of the ort of ILR. 7984 on the problem S particularly Interested in the ~ a fund for payment of damages ost dli~eci~ and equitable solution. t that the construction and ex- ated adjacent to airports. How- urance ~is the proper vehicle for r losses caused by airport ex- d in my letter to you on this sub- resniting' from airport expansion idatimi~forpro~is1ms under the slderatiözi. . Tjiesécorxsideratlons t the widespread rauiiileations, at ~s~oi~id ir~S~ilt froux p~ov1ding ali~~s are affected by airport ex- t bett~g p~o~ided foe bomeowilers ~ities of~th~~e~era1 Government. d) Pb1li~ N~ l3rownsteln, d) P. N. B*owNsPnIN, . . CommissiOner. ~a11 that i~ his report there i~ator that hereview his pres~ 1c,e, theecoxiomie loss suffered ~ their ho~iies. ~ ~he Cornrnissioxxer's attexition. th~ review ~,onsists of three Ye been able to geflerate as a ~ or section 1113 of the. bus- ave two sp~ific recommenda- ow. an. . ~ , that we. pii~oe at the appro~ ction 1113 to,provide that the later ~Uu~4 6 rnønth~ aft~er the legislation. and ~LiSo a specific omit oi~ $100,000. ~ ~ r $~5,OOO, I do flQt~ kflOW. I atiou cliu~ise in our bill, and I . pect of having that 1~unded by S. UI DEMONSTRATION CITIES AN I feel that my proposed amen me~it to would promise the most expedlen ~ s~iutio~ ever more pressing with increased avi~ttioii With best wishes. . Slncerelv, 0 i~i HOUSfr~G ADMINISTRATION, !athington, ~D~C~; July12, 1965. Hon. CHARLES LONGSTREET WELP4ER, House of Representatives, Washington, D.C. DISAR Mn. WELTNER : I have received yoi r Committee on Banking and Currency in I :s of the proximity of housing to airports. committee's suggestion that the establishi e under the Federal Airport Act may afford t: I share your concern over the advers pansion of airports Is having on homeown ~x ever, I do not believe that FHA mortga e providing compensation to property ow e pansloti. My reasons for this view were ~ u ject on March 19, 1964. If compensation to homeowners for da is justified, I believe the committee's rec Federal Airport Act should be given serio should, however, be carefully weighed from an overall Government point of vi special relief to homeowners whose prop pansion activities where comparable relic whose property values are affected by oth Sincerely yours, e Mr. WELTNER. The `Chai~,mi~n w was a direction to thsHousi~ig Mi exit policies and procedure ii~ order t by these homeowners in the ~ver~t th In my letter of July 1~ I c~ill~d th On July 12, he responded. A~par paragraphs, and this is as n~~uch as result of either the directiot~ in the ing Act. I would like to offer both those ar tions, Mr. Chairtuan. . Mr. BARRETT. Those are iit~ the rec Mr. WELTNER, Than1~ .yoi~, i~ir. C I would li1~e to suggest, ~fr. Cha priate place in the bill an an~endmei report therein called ft~ be sub~nitt date of enactment of this bi~l, of th authorization forappropria~ion in t Now, whether ,it needs to be ~125 think we should have a spe~ifi~ aut think we should diligently p~irsue th the appropriations process i~i b~th I Secondly, Mr. Chairman, I t 0 I. PAGENO="0060" 646 PEMONSTRATION CITIES A ,D URBAN DEVELOPME~ Mr. BARiu~rr. Do you desire to su~rnit this ? Mr. WELP~i~. Yes ; I have a proposed form for amendn~ I would `like to submit. Mr. BARRBrr. It may be submittedfor the record. (The proposed a~mendment referrt~d to follows:) AMENDM~P PROVIDING FUNDS FOR S~t5f~t CONCERNING RELIEF OF IN PROXIMITY ~O AIRPORTS Page -~ after lIne-, add the fo11owing~new section: STUDY. CoNo~NINo RisLIRF OF HOMF.O~WNERS IN PROflMrrY P0 A ioa~rs SEC. -. Section 1113 of the Housing tmd Urban Development Ac amended- (1) ~ by inserting " (a)" after "SEc. 1113."; (2) ~ by striking out "one year afterthe date of the enactment and iz~serting in lieu thereof "six mei4hs after the date of the the HOusing and. Vrbani~eve1o~ment ~ct of 1966" ; and (3) ~ by adding at the ~~id t~iereof tJ4e following new subsection "(b) There is. au$~iarized to b4 appropriated the sum of o~rry Out subsection (a)." ` Mr~ ~ Secondly, I would~ iike~ to take this oppo place on the record. the contents of 4iy bill, H.R. 696, whicl'~ the committ~. ThIs bill is not a bill which will call for tl~ tion by the Federal Government of any property. It is no4~ .f paying damages. The only thing this bill does is to r~ FHA polity of . refusing to extend i*surance on homes whip to be adjacent to airports. It is further limited to apply oi~ the airpo~'t is built by the home, noL where the home is bu existing ~ir facility. ~ I This bill would require that thej FHA issue insurance homes, iui~twithstimding its current policy, and that it issue without considering the diminution in value caused by the' to the airport. There is created, as the Ohairman will recall fund in the mutual mortgage insurance fund to constitute reserve for any spedific losses that might occur. That wou opilTlion, maintain ~he actuarial soundness of the fund. It impair the ftthd arid~it wculd have aspecial reserv~e to buttr~ Specif1~aIly, the situation arises ntany times where an oi~ house ii~ which an airport has been~ built has a buyer read and abl~ *~o buST, but h~ must have I~HA insurance because able to come up with the required Idownpayment for con~ finaneift~J A contract is entered inlx4 and it is submitted to .t~ and the FHA says, "No, we are not g*ing to insure it.'~ ConE~ absent F}IA financing, there is no sal~ and the loss occurs. Last year's record shows correspondence previously on th~ This i~ O*e solution to our problem that would not cost the ment an~ ~ Now, th~r~ ~y be other solutions and the FHA may not solution. ` Butthey ha've not suggeste~l any better solution. `I has not ~roposed any rettiedial legi$lation, although they this matt~r andthis speei1~c suggestio4 for 2 years now. So I submit, Mr. Chairman, that 4sent some initiative oii of the agency, maybe this committee kught to take the initit FHA's policies are not going to be relriewed, and if they are ~nt which OMEOWNERS of 1965 is f this Act" actment of ~1OO,OOO to ~tunity to is before e acquisi- a matter werse the h happen Ll~ where .lt by the on those .nsurance ~dj acency a special a special Ld, in my 7ould not ~ss it. ~ner of a ., willing, he is un- rentiotiai ~e FHA, ~quently, S matter. Govern- like this `he FHA iave had the part ~tive. If ot going PAGENO="0061" to be a this o ARRETT. bill, also? Mr. WELTNER, I should like per included, if ap~ Mr. BARRETT. 1,, (}LR. 696 follows:) DEMONSTRATION CIPIES AND U BAN DEVELOPMENT 647 ibmit that and have it Be it enacted .~ of America in C Act is amen~ "(1)(l) I value o~ an~ "(& \ 204 regard to ingly; but this i ~e was e. 1 connection* espect to StL( eman on rn PAGENO="0062" 648 ~DEMONSTRATION CITIES AND URBAN DEVELOPMENT an answer at this hearing. I * kno~cs~ the gentleman has worked on it. for morethan a year now. Mr. Wuir~i~. The position of th4 Commissioner is to be against it. But, there is no alternative proposal~that I know of. If the chairman desires I will be happy to make avlilable my file o~ correspondence which sets out the proposal, and Very courteous response by Mr. Brownstein. Mr. Brownstein states that although this proposal would protect the seller and the FHA and the mortgagee, that it would n t protect the purchaser. I commented back to him that the only thing ecessary to protect the purchaser i~ to assure that he is aware of the roximity to the airport. That could be done `itery simply by requirin a state- ment or ~ to that eff4ct. If we are protecti g every- one other~ than the purchaser, then ~ve could easily assure that the purchaseri ,~ protected by reqnirijig that his certificate cknowl- edging oii~ his part the realization th~it the home was withi certain proximity. of the airport. That is th~ only objection in tru h that I could discern from this corresponden~e, and I will submit it nd pos- sibly the staff could extract those portions which would be relevant th Mr. Harvey's Inquiry.* Mr. B~uu~Err. They may be, withoutobjection, so ordered. , (The maiterial referred to follows :) ~ HOUSE OF REPEESENTATI 5, ~. ~ . , ~a8Mngton, D.C., February , 1964. Hon. PUILu' N. BROWNST~IN,. .ComwAgs4&se~, Fedsrdi HoUsing Adtnin4strdion, Waehingitosv, .D~. DEAR Mit. Th~OWNSPEIN : During my short tenure In Congress, I have b come in- ereasingly coTicerned over the plight of homeowners in sections adjacent to fed- erally assisted airports. In my own di~triet, substantial Federal funds h ye gone to expand the Atlanta Municipal Airport. In so doing, runways have een ex- tended to such prnximity to many residents ~s to create severe noise a d vibra- tion problems. The houses, though not within the zone subject to ac ulsitlon under the airport construction law, have nofletheless experienced sha decline in property values. I am aware that the question of FRA insu*anee for such houses has b n con- sidereci at length and rejected as actuarially dnsound. However, I hope hat the consideration might be g1~en to a separate ~appropriation to create a reserve fund speclfieaI~y to cover losses In such circum.~tances. It seems tA~ Die wizen one agency of the Gove~nment, FAA, generates act on that ~Timjnis1ies i~tdentlal values, it would be appi,opriate for another agen , FHA, to remed3ri2ie situation in this matter. With the existence of such reserves, normal underwriting procedures c ulci be applied in applications for insurance without regard to noise and vibrati n fee- tures. If FHA incurs higher than normal losses under default and fo losure proceedings, the special reserve fund would maintain actuarial sound ess of overall operations. I am sure you areaware of the widespread e~1stence of the problem. W th the expansion of air travel and Increased use of je~ aircraft, it is only reason ble to anticipate that th~ problem will worsen in comii~ years. I should like to have the opportunity of disc4ssing this with you at you early convenience. May I hear from you on this mattØr.? SincereJy, CHAtLES LONOSTREET WELTNER, Member of Cong ess. PAGENO="0063" DEMONSTRATION CITIES A RBAN DtVELOPMENT 649 ~NER, rua~ry 18, 19~4. to cover iosses -, mortgagee, and protect the innocent cYom FFJBaUAItT 24, 1964. Hon. P. COmfl?4~88~ Wash~ngtm, D.C. ~ DEAR MU. CQ~M]~SSXO~ER ~ `I have . ` ~ 1ettë~ `oV~~brüâry 18,. a~id 1~ave dis- cussed Its eon'teñt wit~i 7s~veraI in b~ of yçnjt~ s1~ff. I can agree ~who1e- hearted1~v with the: thdtteT~ ~ f~r . o~ the th~st p~g~e of your letter, an~ á~i certain that th~ ~rob1èñ~L1s~n~. ~`hi `b)~ PIIA is ~y much aware. . However, the, qnest1o~ c~xnes as t ~ ~ sØ1i~it1on. To date, I hare not been advised of a~n3r a~ti~.p1a~toàitI~via ~ h~ sitwi,t1oi~ In cQmmentjng o~ ii~ ~cifië sug ~ ~U4~ of the reserve ~nnd, you say it ~ou1d ~erve to protect the ~HA the mort a e~ and result In some benefit to the seller but woüTdifl tie *a3t ~rc~téc~ the innb ~ t~ rèbaserôfsuch a property." It has been my expéri.e~ce that, b 4 ailability of financing is the primary problem (net the ~ls:tln~ noise It é~ ), When purchasers are sought for such PAGENO="0064" 650 DEMONSTRATION CITIES AN URBAN properties.: Your~ present procedure requ~es the acknowledgment by of certain facts. The proxh~Uty to the. `a4rport could even be inclu ed in such acknow1edgm~rnt. Further, there seems to be a parallel in~ the mortgage .covej~age 1~or relocation housing. It might just as easily be argued that this does not protect t e innocent purchaser. In short, I feel that something must be~ done, and to ~d~te, nothin has been done. May I request that you give furth~r consideration to this ma ter in the light of the above comments. ~ Looking forward to disctssing this in per$on with you, I am, Sincerely, ~ . . . 4JIIAELES LON~STR15~T WnLT 5~E, . ~ . 4 Member of ngress. FEDISBAL ~HousING AimuNlsTnxrioN, OF'rron or THE OOM~LISSrO ~ ER, Washingtoii, D.C., March 9, 1964. Hon. OHA1tL1~3s LONOSTREEP WEVrNEE, Hou$e of R~presentative~, W~hingto~v, D.C. . DRAR Ma. ~Wm~PNER : I am i~eplying furtbe)~ to your letter of Februar 24, 1964, requesting tjliLt FHA study th4~ proposai w)~l~ you made concerning ortgage insurance to facilitate the sales of certau4 existing borne properties dversely affected by the influence of tedeça~J~ aided ai~ort expansion. Our undei~stand~ng o~f your prgposal ~s b4~~11y this PITA insurance bould be made available for the purchase of afl :~x~ting single-family homes dversely affected by ~iirl)ert expansion at a valuati~rn established as if no ai port in fluences affeeted tbe property. Proapective $rcbasers of such pro~ertes would acknowledge in writing that they were `a*are of the airport inffue ces. ~n recognition of the fact that F~iA would be exposed to unreasonable ris s under this propoal, a epecial reserve for losses wo*id be authorized and fund d by the Congress. First, let me say that I do not believe FIZA mortgage insurance is t e proper vehicle for compensating property owners foi~ losses caused by airport e pansion, even though such ~xpansiou has been assi~d by another Federal ag ncy. If cornpensatio~ is justified, a more direct me~iod should be sought whi h would benefit prcipe~ty owners who do not desire t4 sell as well as those who o. F~IL& insur~ance is presently available on ~seme . homes adversely aff. cted by airports. However, our policy recogflizes tb4 the desirability of proper ies near airports may be affected adversely. by exi$ting or potential hazards ~f low- flying aircraft, the nuisance of noises, and the possibility of mushroom ng non- residential uses, FHA polity is, therefor~, that *marketa~diity shall be the strongest indicator oct acceptabi~~ty of such properties, and that valuati n shall be determined by market price. . . If the airport influences dire~~iy jeopardize the structural integrit of the properties or the health or safety of the occupants, they are unaccep able to FHA for insurance. For example, if the me~tsured noise levels aye su h as to be injurious ~ the occupan~' health or to d~mage the house, or if a ouse is directly and . immediately in the approach op~ departure patterns of p incipal airport rufrcca~Ts, it is unacceptable ~ nortgage Insurance. In de ermin- ing the critarI~i tot judging the acceptability~of properties near airport , FHA works closely *ith the Federal Aviation Agenc~ Beyond these comments, the .pro~sa1 raise~ speci~e questions and pr blems, among which t~e the following : 1. The FHA mortgage underwriting requirement of "appraised va ue" is statutory. The requirement relates to "economic soundness" or, in ertain programs, to "acceptable risk." Nevertheiess,~ both of these assume soun~l prin- ciples of underwriting. The proposal would substitute a policy of compe sation. Moreover, the national housing policy state4 in the Housing Acts of 1 9 and 1954 directs PITA to follow sound undexwritiflg practices, and clearly pposes the insurance of properties that endanger the b~ealth and safety of the occ pants. 2. The purchasers of these adv~ersely affect~d properties would not b fully protected even though they acknowledged in jvrlttng that they were a are of the airport influences. The typical homebuy4r would not fully appreci te the effects these i4uences would have on the vaiuE~ of the property over an ex ended period of time. The Senate Banking and Currency Committee, in its re ort on PAGENO="0065" a for t more direct mel I appreciate would like to ~ do so at some mutuaJy conv Sincerely yours, Mr. HARVEY. Mr. BARRETh Mr. MO0RHEAD. gentleman from ( dedicated, and than the gentleman from I would like to ask on )le, if an ownEir I compliment the S more zealous, ~` constituents ~. 696, taking a ~value best assess it or to ~ to the airport. ~cl to write up to $20,000, then, of financed amount, that. So the ~`~tect at the Housing ~ DEMONSTRATION CI~IE~ AN U BAN DEVELOPMENT 651 of 1954, recogni~ed ~`HA~ ~nsibillty to individual home pur- `rig rig 5 com rid its consi ii- e author md respons~. y their duty ~ purchaser and L. doing to rket. s and subsei rould offer FHA make sure settir~ forth the r extent of ~ a form of compen- y said, I believe a Ut. iews on this matter. If you I would be pleased to arrange to Uommi.~sioner. 60-878 0-66-pt. 2-~ PAGENO="0066" 652 DEMONSTRATION CITIES ANID URBAN DEVELOPME T Our next witness this afternoon is a very distinguished ember of Congress from New York, the Honorable Seymour Halpe n. Come forward, Congressman. I observe, Congressman, you havelan a~sooiate with you. Will you be kind exiough to introduce your ass~iate ~ Mr. Hi~r~ri~. Be happy to. Mr. B~mu~rr. Mr. Halpern is a i4ember of the full Ba king and Currency Committee. Everyone re~pects you for your ca abilities: you are very knowledgeable and veiiy helpful, not only to our con- stitueney but to this full committee, the Banking and ~urre cy Com- mittee and we are certainly proud to have you here this afte oon. STATEM~ENT OP HON. SZYMOUR RALPERN, A REPRE&E TATIVE IN CONGRESS FROM T~tE STATE ~P NEW YORK ; A000 PAIiIED BY Pi~ER CO}TNELL, ADMmIST4ATIV]~ ASSISTANT Mr. }i~Ir~i~i~. I thank the chairma~nfor his very generous remarks. I would like to introduce Mr. Pete~ Conneil, my administ ative as- sist&nt who has made a very carefur study of the proposed housing act and the amendments thereto and has been especially h lpful to me in preparing this analysis. Mr. Chairman, I wish to thank you for the opportunity of present- ing my views on pending legislation to this distinguished subeom- mittee. I woul4 like to commend this sul~ommittee as being on of the most e1f~cUve, most hard-working su1~oommittees, and I wan to corn- mend yo~,~Mr. Ohairman, for your s~ip~rb leadership. Mr. BARIU~rP. Will you yield to me, ~lease~ We have two distinguished gentleitien here-Mr. Carl H rtz and Mr. Harry Norman-and we are hopin~g we can terminate our earings this afternoon at 3 o'clock. So I just want to somewhat reFeve the minds of these distinguished gentlemen coming here throug the in- terest of our colleague, Bob Sweeney, but we will do everythin we can to terminate the hearings. Mr. HALPERN. I can assure you, Mr. ~hairman,I am not goi g to be very long~ ; I shall try to confine my rei$rks within 10 minutes Mr. B4mtirrr. Consume titetime nec4sary. Mr. IIAL~?ERN. I am aware that the ~ubcomrnittee has been c nduct- ing extensii~e hearings on several very i~mportant and forward- ooking measures in the past few weeks, so in the interests of brevity, I shall restrict m~ remarks today to that 1egis~Iation which concerns anage- ment type cooperative housing. Specifically, Mr. Chairman, I efer to my bills, H.R. 12765 and H.R. 12766, and to section 102 of y ur bill, HR. 13065. Mr. Chairman, over the past few ye4rs, I have become mere singly impressed ~ 1~y the splendid record est4blished by manageme t type housing cooperatives in meeting their m~rtgage commitments. s you know, the~ mc~rtgages are jnsured by itlie FHA pursuant to section 213 of the ~ational Housing Act. In *turii for insuring thes mort- gages, the 1~HA exacts an insurance pr:mium of one-half of 1 ercent of the outstanding mortgage balance. Quite obviously, this is an insurance program, and as such, sh uld be grounded on sound actuarial practices. Ordinarly, good insura ce ex- PAGENO="0067" perience brings about a dir&~t r~duci i programs, dividends are pi~orated ~ r perience dictates. In recogi~ition of reduction in 1961, and last ~ w mittee-a separate mutual~ fund o housing. Unfortunately, th~ p~emi major difficulties have beei~ ei~cou t lishment of the management fund. would provide for a reduction in p e operatives of one-fourth of ~ percen amendments necessary to expedite ti management fund. On the basis of the past j~er~orm firmly believe that this legislatio~ tion of this program in 1959, n~ana premiums to the FHA total~ng app same period of time, their l~oss~s h~ the difference between pren~iui*s pa million. I think this is a. amazi: justfication for reducing p~emium property holders. In fiscal year 1965, for exam~ premiums to the FHA oi~ $4,301 administrative expenses a~triI~uta after making provision for necesr FHA from this program ~as $3,3 1965 alone. Had the m~na~em premium of one-fourth o~ 1 perc rncome to the FHA wo~ild stil conceive of any better e'~idence time has come to make thi~ reduct For this reason, I introc~uced H~ of the committee, I would~1ike to Mr. BARRETT. Without obje~tioi (H.R. 12765 follows:) [HR. 12765, 89 A BILL To amend the National ~ Housing Insurance of c4~rtain cooj Be it enacted b~y the E~ena~te ~ind Hou of America in, Congress a~asen~bled, Th the National Housing Act is ~imeflded ducecl premium charge so flxe~L ax~d co following : "Provid~ed, That tl~e prom! section 213 of mortgages whi~h are t] ment Housing Insurance Fund (or wh (a) (3) (if the project is acquired by such section and remain the obligatio not exceed an amount equi$len~ to Pro~vided further, That any $duced p the preceding provisions of l~his subs Mr. HALPERN. This bil~ provi tion 203 (c) of the N'ationiil E~ous subcommittee to incorpor$te 1~his if we fail to take this acth~n, I bel Co~ u1~iV ~BAN DEVELOPMENT 653 L premiums, or, under mutual time to time, as further ex- act, we authorized a premium lished-thanks to your com- anagement type cooperative ave still not been reduced, and ~ in implementing the estab- egislation which I introduced ms for management type co- would provide the perfecting ~plementation of the mutual ~f management type co-ops, I varranted. Since the incep- it type cooperatives have paid ately $2'~½ million. Over the iountecl only $693,000. Thus, d losses sustained is almost $27 ord, and if ever there was a S with respect to this class of anagement type co-ops paid After deducting losses, and operating this program, and eserves, the net income to the )-and this was for fiscal year 7pe co-ops paid the reduced iring fiscal year 1965, the net e been $1,218,000. I cannot pport the assertion that the andatory. 765, which, with the approval it for the record. ~dered. ~., 2d sees.] reduce the premiums charged for the ~ housing mortgages epresentative8 of the United ~5tate8 first sentence of section 203 (c) of iking out "ProCided, That any re- ,, and inserting in lieu thereof the argo fixed for the insurance under gation of the Cooperative Manage- 0 insured under subsection ( a) (1), ~rative corporation ) , (i) ~ or (j ) of he General Insurance Fund) shall urth of 1 per centum per annum: ,1 charge fixed and computed under ti 8 necessary amendment to sec- 11 ~ ~ ct, and I respectfully urge this r vi ion in the chairman's bill. For e e hat the discretionary authority P DEMONSTRATION CITIES A TJ ni is sti L$ r~ fl~ ei 0 T ce .5 a r it 0 1 n n 0. C I Il t 0 thi St atE C obt a ~oo~ lU LoU PAGENO="0068" 654 [HR. 12166, 89th Cc~ng., 2d sess.] DEMONSTRATION CITIES ANI~ URBAN DEVELOPMEN which we provided in 1961 will neve~ be exercised, and the anifest will of th~ Congress will have been igr4ored. With rèspeet to the mutual fund ~which we established 1 st year, certain difficulties `have arisen, as a res~i1t of whioh, its full im lementa- tion has been held in abeyance. In setting up this separat mutual fund, it was our intention to segregate, from the general i :Suraflce fund, those premiums, administrative costs, and any losses att ibutthle to the management type co-ops. We provided that when his new management fund was sufficiently sLrong, the FHA woul b~ au- thorized to distribute shares or divic$~nds to the co-op owne whose premiums had provided this strength~ In fairness, we also s ipulated that no such disbursements may be ~aid out until any fun s which might be transferred to the managem~ent fund from the gen al fund had been reimbursed. Since that time, the question arose ~s to whether this reimb rsement requirement applied to the initial ti4rnsfers to the mutual und, or only to any loans which might be made to that fund from th general fund. The obvious answer is that it applies oniy to subsequ nt loans and apparently, the FHA understands this to be the case, or their General Counsel has interpreted the 1~tw to, this effect. How ver, lest there be any possibility of misconstru~ing congressional inten on this point, section 2 of my bill, H.R. 12T66, would make this i tention absolutely clear as a matter of permai~ent statutory law. I w uld like to introduce thisbill for the record. (H.R. 12766 follows :) A BILL To amend section 213 of the National ~iousing Act to permit the mo e effective operation of the Cooperative Management Housing Insurance Fund Be it enaotel by the f~enate ~nd House of Representatives of the Uni ed States of Amen~ea in Congress assembled, That tile fourth sentence of seetioçn 213(k) of the National Housdsig Act is amended to ~ead as follows : "The Com~nissioner is directed to transfer to the Management~ Fund from the General ~nsurance Fund an anjount equal to the total of the i~remium payments theretof~re made with respect to the insurance of mortgages 4nd 1oeui.~ transfermd to the~ Manage- ment Fund pursuant to subsection (m) mi~ius the total of any admi1~iistrative expense~ theretofore incurred In connection Pwith such mortgages and l*ans, i1u~ such other amounts as the Commissionej~ determines to be neces$ry and appropriate." Sne. 2. The second proviso ~n section 213(1) of the National Housi~ig Act is amended by striking out "pursimnt to subsection (k) or (o) " and in~erting in lieu thereof "pursuant to subsection ( o) ". SEC. 3. Section 213(m) of the National Housing Act is amended b striking out ", but only in eases where th.e consent of the mortgagee or lend r to the `transfer is obtained oe a request by the mo4'tgagee or lender for the nafer is received by the Commissioner within such ~eriod of time after the da e of the enactment cx~ this subsection as the Oommis~ioner shall prescribe". SEC. 4. Se4~tion 213(n) of the National E~ousing Act is amended by striking out "issued in connection wIth mortgages" s4nd all that follows and inS rung in lieu thereof the following : "issued in conne~tion with mortgages whic are the obligation of either the Management Fund o~ the General Insurance d." Mr. HALPERN. In addition, section 1 of that bill provides hat the Commissioner of the FHA will transfer to the new manageme t fund an equal amount to the premiums already paid by these co-op , minus the administrative expenses theretofore incurred. Under pre ent law (sec. 213 (k) ) , the Commissioner is d~reoted to transfer to he new fund only what he "determines to be 4iecessary and appronri te." I think it is imperative that we spell out what we consider to PAGENO="0069" DEMONSTRATION CIflES priate," so that the manalement i the co-op program right from t e terms of dollars and cent~, but I minus losses and adminis~rative ~ x law. To illustrate, I might poin ( miums of this class amou±ited to ~ were $9,687,000 and loss~s *ere `$ amount to be placed in th~ mana ~ been $17,050,000. Unless ~he full ~ the provision for perio'di4 di~bur e fund is of very little val~ie. Finally, Mr. Ohairman~ sectioi ~ design to section 102 of ~oui~ bil, may differ somewhat in ~ larigua e~ difficulty and would acco~nplish i I believe that these p~ov~sion mortgagees, and I believ~ that ti ~ tual fund underway. L~st year, ~ National Housing Act tç a~itho ~. general insurance fund 1~o the ] ~ that, before this transfei~ coUld e would have to consent t~ this t a requiring this consent, for it w ~ funds which were consol~idated i i any event, mortgagees h~ve decl ~x mortgages with a face an~ou~it of o of mortgages with respe~t t~ wh c 109, with a face amount of over $ mortgages which might l~ave bee: still languish in the gene1~al fum ~ mutuality has been thwarted. The reason which pron~otes m ~ fer has to do with a resti~iction o i appears to me to have b~en uni t vision. At present, when a 4efa it gee in `debentures with varying r ~ may be used by the mortgagee i 3urance, whereas should default the general fund, the res~i1ting d miums on 213 management typ effect, is a one-way stre~t, ~o tl~ carry a good deal of FH~. p~iper~ their accounts are in the~ sai~e-~ debentures can be used to pay al~ Both the chairman's bi'l and thi situation, by removing the onerqu removed, the requirement of mo~ri priate, and accordingly, ~s also' r 1 agement type co-ops wil~ be tra ~ which we established for ~hi~ pur Mr. Chairman., the soh~ objecti ~ this afternoon is to provi~le equit 1 ment type oo-o'ps. Where a cl s URBAN DEVELOPMENT 655 will reflect the full strength of ~rt. This need not be done in e that the formula-premiums ses-should be written into the hat as of August 81, 1965, pre- P0,000 ; administrative expenses ,000. Thus, the "appropriate" `t fund at that time would have nt is placed In the mutual fund, Lt5 based on the strength of the nd 4 of my bill are identical in ~. 13065. While our provisions ey are addressed to the same me end. fair to both mortgagors and e necessary to get the new mu- .mende~l section 213(m) of the he transfer of funds from the ement fund, and we provided ected, the mortgagee or lender r. There is no legal basis for required in the case of other he general insurance fund. In ~o consent to the transfer of 78 $141 million. And the number 0 decision has yet been made is million. Thus, about half the sferred to the new mutual fund our primary aim in providing ga çees to decline consent to trans- tb use of FHA debentures which n~ ed by the drafters of that pro- o~ urs, the FHA pays the mortga- u~ ties. These debentures, in turn, )a ing premiums on any FHA in- cc .r on mortgages insured under er~ ures cannot be used to pay pre- O~! ~ accounts. What we have, in l~ rge lending institutions, which lé~ ~ to withhold consent, so that all n~ al insurance fund, and thus all re iiums. b~ 1 seek to rectify this anomalous r striction. With this restriction ga ee consent is no longer appro- LO~ ed. Thus, all accounts of man- fei red into `the management fund, Se. 0 the legislation I have discussed le reatment for owners of manage- ~ c ~ property h&lders has demon- A ID id 1iE~ Lit 98 10~ 3~ ar . . .I~ PAGENO="0070" 656 D~MONSTRAPION CITIES AND~ URBAN DEVELOPMENT strated over the years its determinaticyn and ability to meet i s mort- gage commitments, they should be gi~ven the meaningful en ourage- ment which this legislation provides. Outstanding performa ce must be recognized and rewarded. This subcommittee realizes this, I know, for it was this subcommittee which ai$nded the Housing an Urban Development Act last year, to establis~i the new management und. I am confide~it that you will continue to~ scrutinize legislative p oposals and seek ways to improve them, and JI believe that the provi ions of my two bills would enhance the qualIty of the Housing an~ Urban Development Amendments of 1966. Mr. Ohairman, I should like to thaü you once again for t .e cour- tesy extended to me this afternoon, aPd I would be happy t ~ enter- tam any questions which you, or any ~of my other distinguis Led col- leagues, ma~y have. .Mr. BARRETT. Congressman Halper~i, I do not have any q ies~ions to ask you, but I do want to say that ~ou have made a very fi C pres- entation here this afternoon. I am qu~ite sure the committee ~ ill give every cons~deration to your recommer4iations. Mr. }IAI~PERN. I thank the chairm~n. Mr. HARVEY. I wanted to add my c~nimendation, also-a v ry fine statement. I have no questions. Mr. BARRETT. Mr. Moorhead ~ Mr. MOORHEAD. Only to join with my colleagues and say hat we have received as I would expect from the gentleman from Ne~ York, a very persuasive statement. Mr. REuSS. This sounds like a heavi~*ily chorus. You malo a very persuasive case and I am persinided. Thank you very much. Mr. BARR~rr. Thank you, Mr. Reuss. Thank you, Congressman lialpem. 11 time has expired. Next, we hea.r from two very fine klistinguished gentleme from the great State of Ohio, Mr. Karl Hertz, president, Board of ~ounty Commissioners of Clark County, Ohio, and Mr. Harry Norn an, di- rector of urban renewal, Springfield, Ohio. Mr. Hertz and Mr. Norman, it is nice to have you here thi after- noon. May I sa~y that you have sent one 4f the finest Congressm n that we have yet seen in the United States.~ He is a very knowle geable person ; he speaks only when he has sOm~thing to say. He has ~ on the admiration of all the Members in the ~Iouse. STATEMENT OP HON. ROBZRT E. SWZEN~Y, A REPRESENT ~TIVE IN CONGRESS PROM `TILE STATE 0F OHIO Mr. SWEENEY. I thank you for your very nice introduction and to my colleagues who grace this subcommittee. I certainly want to say first of all, I do appreciate the opportu*ity of coming here thi~ after- noon and have the honor of introducir4g to the subcommittee nd to you, Mr. Chairman, Mr. Karl Hertz, wl~o happens to be the cit ~ corn- missioner of the city of Springfield, Ol~io. Mr. Hertz is here before the subcommittee to testify in support ~f H.R. 12341, the city emon- stration bill in 19~6. He is uniqttely qu4lified to make comment n this important legislation that you are studying, Mr. Chairman. N t only PAGENO="0071" DEMONSTRATION CITIES does he have a rich exper~en~e in professor of sociology at Wittenbe Accompanying him thi~ aftern of Springfield, Mr. ~J. L, Caplinge come from my State2 and they h~ offices and in their private tincierta islation on the Federal leyel to a sively and demonstrate m~re ~ffeo is going to improve the co~nmunit You know, we in Ohio ~re ver the publishing capital of t~e tJnit that distinction. There has been some u~ban di There is a tremendous nee~l for ur economy of the entire area~ This city, Mr. Chairman, is a in the inner city with a metrop 135,000 people. They hare a ver afford the high cost of ren~wa~. In representing the Sta~e of 0 State that needs to be assi~te4 by than their city. I am pi~ou~E to Mayor Caplinger for com~nent co: Mr. Hertz. STATEMENT OP KARL ~tE~TZ, EIEI Mr. HERTZ. Mr. Chairi$n and Hertz. First, I want to e~cpress i portunity to appear befo~e this thanks to Mr. Sweeney f~r arran islation which can have f~tr-i~eac community and for many others 1 Springfield is an old ~ity, It the old Northwest Territory. G through our valley. We. ~`ia~re a ~ We are an old industrial city the production of farm machine plant of the Internatiot~al Ran some of our old, established fam tive. They are very hesi~an~ abc their problems. We once also were, as Cc~ngr publishing center of t1~e worl magazines. We must and we stroi~gl~ de~ and potential. Our leading cit a committee for commui~it~ acti to accept Federal fund~ng, the body of the city of Spnin~'field, ( We have their suppo~'t, we mission, we have the su~pport o we face a number of interrelate D IRBAN DEVELOPMENT 657 rnmental service, he is also a Liversity in that same city. the city manager of the city ese gentlemen, Mr. Chairman, hibited in their governmental a growing concern for this leg- hem to plan more comprehen- their ideas as to how America of its. cities. id that Springfield, Ohio, was tes. I think at one time it had y ~ a this city in southwest Ohio. 1 ~newal and revitalization in the y 4~f approximately 85,000 people t~1[ population of approximately v~y limited financial capacity to a4 large, I know of no city in my ii state and Federal Governments es~nt at this time Mr. Hertz and ni~ ng H.R. 12341. IT 0 COMMISSIONER OP SPRING- hO `ers of the committee, I am Karl ry deep appreciation for the op- çuished committee and my deep he opportunity to testify on leg- ignificance for the future of my part of the original frontier of eorge Rogers Clark campaigned amed in his honor. e were once national leaders in Ve are still the home of a major Corp. Our people, especially ave been and still are conserva- .epting Federal funding to solve n Sweeney has pointed out, the e home of Collier's family of recapture our economic vitality have organized just recently as w. They are ready and willing e told us this as the governing he support of our county corn- press. We want to move. But . deeply disturbing problems U d a ~1 ( ) I 1 en bin g ~ it .~ k V 1~ m -ti h a 0. I ati . :. ~ ~ ~ ~ .... ,. I ~ ~ ~ PAGENO="0072" 658 DEMONSTRATION CITIES AN URBAN DEVELOPMEN We ha've a decayed downtown wit~i many empty stores a decaying tax base in the central busin~ss district. We have la of substandard housing with narrow streets, leading to sen crowding and traffic congestion. We 1~iave poverty pockets, bo and Appaiachian whites. We have had considerable social un4~est, especially among o youth, and except for the very fine lea4ership of the Springfiel League, of our city manager and of the~very fine police depart we have, ~ve would have had violeno4 during the past sum have averthd this. We are thus in some respects not i~ a good position to at* business and industry we need. But *e do not have the tax we need, although we are going to ask our citizens for increas Ohio tax laws and the Ohio constitution limit our bonded mdc and our taxing capacity. We want and need help. We need, a total renewal. We hope for a genuine Springfield nell But to do this we need financial assista~ice of a volume that wi job. ~ We s~ in the proposed demonst~ration city legislation ti of hope t.ha~t we need that we can on4e again be the kind of once were. I might point out that Spningfiel~1's past prosperity wa actually on Federal help. The nation~d road authorized by t gress of the United States, better than a century ago, contni our early prosperity. We hope that this present legislation again recapture our prosperity. If the Congress of the United States wants to find a midd~ city that was once preeminent, where ~t can demonstrate that~ city can come back to a position of lea~ership, we believe that ~ field is eminently quaJified to be such a c~ity. We are e4i~ger, we are united, we are 4lready planning and linger, the `city manager, will tell yo4 of some of the plans making. We hope very strongly that t4he Congress will pass t~ reaching legislation for demonstration *~ities. I tha~nk the committee once again f~r this opportunity to here. Mr. BAiu~Err. Mr. Norman, do you want to make a statement? Mr. CAPLINOER. I will make the statement. STATEMENT OP JAMES L. CAPLINO$, CITY MANAGER, S RING- ` PtELD, OiL~O Honorable Chairman and members ofithe subcommittee, I am James L. Caplinger and I desire to make a statement with leave f the subcommittee. I would like to point out that I have with me, in addition to t e city commissioner, Dr. Karl Hertz, Mr. Harry Norman who is the urban renewal director of Springfield, Ohio. As a preliminary remark I would like to echo the wotds f Dr. Hertz in thanking, and expressing our d~ep gratitude to, this su om- mittec for making this opportunity avail~ub1e for us to testify. We appreciate it very deeply. Also, Congressman Sweeney's assista4~e in inviting us to W hing- ton is appreciated. Springfield, Ohio, is located equal di~tance between Dayton, Ohio, and Columbus, Ohio. Therefore, we ar~ in a metropolitan area. d thus a ~ge areas us over- :h Negro ir Negro I Urban ent that ~r. We ract the ase that d taxes. )tedness in fact, ~issance. .1 do the he kind city we based ie Con- uted to ill once Ic-sized such a ipning- ~`. Cap- we are as far- ~ppear PAGENO="0073" DEMONSTRATION CITIES ~ N D Springfield is an area *here to are located in a rich, agric~i1ti~ra1 ing industrial center, and our md into the area beyond our co~po~ate Springfield is an old cit~, I~avin War. We early became au indust the world and a leading p~oducer days gone by because we are not ii farm machinery. Now, there has been gre~t ii~dusi one of the homes of Inter~iationa] Steel Products Engineering Co., a Bros., all three companies ha~ing of some of our major conc~rns anc been created by empty bu~ldihgs of our city has created bl~ght in This has damaged the r~ior~t1e o in our tax base. This h~s 1~iad community. In other words, I thinl~ tht~t w~ in in many of our neigh~or~ood~ this has harmful effects onJ our real In conjunction with this, the d has decayed to su~h an e~te~it ti ture of money in the do~vntown beyond reclamation. This massive spending ~s i~ fac Now, Springfield, like ~no~t cii might term a housekeeper govc peace, we have put out fires, we sewer service, and we hakre ~naii has set in in our industr~ai ~rea~ dential areas, our physical settir other factors has created~ sodial ~ In an attempt to revei~se this 1 up with a new spirit of progre~ and among our citizens. ~ui~ peo the future, and our gove~mment its thrust from that of a~ hotisek We are not just maintai~-iin~ th we are looking at peopl~, arid ti them create what we might k~a11 Therefore, we have tur~ed our turned our attention to ~he Ecor have turned our attentioij to our I it in an attempt to try ~o assur minimal health care for hi~ fan We have entered into a rati F'ederal funds in order ~oi~emo better housing for our ditizens. We have established a~ hu~nan problems of minority g$ups. partment to help our people us JRBAN DEVELOPMENT 659 es in fact meet country. We But, our area is also a grow- in the city has now expanded into the county. ~n settled long before the Civil enter, the publishing center of Lrm machinery. But these are today for either publishing or ~rowth in. Springfield. We are vester Co., lightweight trucks, ion of Kelse.y-}iayes and Bauer ided recently. But the closing ittendant problems which have .ecayin~ buildings in the heart .rroundmg neighborhood. people and has caused decline ~naging effect upon our entire ht say that antiquity is setting areas in our city. Obviously al areas. Dwn core area has decayed. It iless there is massive expendi- our central area has decayed cnd the capabilities of our city. ias traditionally been what we nt. We have maintained the ~ sold water, we have provided ~d the streets. Since antiquity ur downtown, and in our resi- not attractive, and this among ~ms. downward, our city has come lesires, I think, in government w have an air of optimism about )ringfield has started to change to a person-centered approach. ce and maintaining streets, but eds of people in trying to help ood life. tion to urban renewal. We have Opportunity Act of 1964. We i department and have improved b each citizen will have at least rge demolition project without ne of our slums and to provide ions committee to work with the iave established a recreation de- .r leisure time. 1(1 u Lii ~ 1i o 01 ;ry nit be~ 1.1 I Ii al vi~ ie I. Si ni~ sit Ttlt a )~ is, Lfl~4 a~i dii LII i~ bi ~nd pelt pe~ tq ilt~ ± 0 ie ~iI y. is ~hi~ e I PAGENO="0074" which 660 D]~MONSTRATION CITIES AND~ URBAN DEVELOPMENT Therefore, I think it fair to say thatiwe are now moving in t e direc- tions which are envisioned in the proposed new legislation. The problem is, that there are not wdequate finances in on city to undertake all of the projects by ourselves which need to be do e in our city. In fact, there are not even sufficient funds to engage in he kind of real planning which is necessary just to coordinate, admini ter, and direct those efforts that we have alrea4y undertaken which I d scribed above. ~ I The dcniionstra.tion city legislation.~ if passed, would enaMe us to get on with this job and in tact to 4 a better job of what ~ve have iindertak~n. ~ Now, our budget in Springfield is already stretched almo* to the breaking point. We have found it necessary to make rathei~ sizable salary adjustments of our city personnel. We find it necessar~ in this day and age to attract not just people who want to work for 1~he city, but first-rate personnel, because we ai~e dealing with large and com- plex problems. We are not just mainta~ining our housekeeping govern- ment as we have in the past. We neil first-rate people. Th~refore, our budget~ has been stretched. We are beset with problems now, but~i envision, a~s I look ahe ci, that by the end of the century there will J*a huge regional city r aching from Columbus, Ohio, through Spring1~eld, Ohio, to Dayton, 0 io, and perhaps even south to Cincinnati. If proper planning is not done no*, even more problems will be faced in this regional city of the future than what we fa e now. But, if we plan properly now, and th~ demonstration city le~slation would help us to do this, we can, I think, become a model cil~y. We can solve our existing problems, and w~ can plan to meet thes~ future problemsbefore they arise. ~ To do thfis plarmiiig one of two tbir~s is needed. Either ~e must have the aiiility to tax as a local gover4iment at a more realistic level, a~nd I frankly don't see that in the pictu±e under our State constitution, or, we must have massive Federal aid aS is proposed in the dem~nstra- tion cities legislation. Now, if Springfield, Ohio, can become a demonstration city, ~ie have many positive factors which I feel will work together to make the project succeed in Springfield, which ia a city having a popula ion of slightly less than 100,000. In conclusion, let m~ run over a few ~f these positive factor I see in ourcity. First of all, we have a new vocatiom4l school which will wo k with the youth o~f our community at the hi~h school level, trainin them to go into the labor force with skills. We have a proposed new technical institute on the junior ollege level which will train our people whó do not desire a full ollege education but who want to go beyond the high school level, and which will qualify~ them to enter the labor market with advanced s ills. We are so fortunate in having Witt~nberg University whi h is a liberal arts imiversity dedicated strong~y to the principle of elping Springfield in our midst. Springfield ~in fact sits in the cen r of a higher ednca~tion complex. PAGENO="0075" DEMONSTRATION k~ITIES D URBAN DEVELOPMENT 661 1~e have in Springfield a city overnm.ent which is efficient, but which is willing to streamline its 1 , reorganize itself, and do what is necessary toprogress in step with t 20th century. As Dr. Hertz mentioned, ~we a e a citizen's committee which is ready to work with government t ove to meet these pressing prob- lems. Not the least of our posi i e factors is the air of optimism which pervades our community at is point. I might point out that the Roc feller Foundation has recently, or about a year ago, made a grant t he National Urban League which has established leadership develo nt projects in 10 cities throughout the Nation to develop Negro lea ship. Springfield is 1 of 10 cities in the country participating in thi rogram. We have a very active urba renewal committee which makes our urban renewal planning in realistic. We are fortumate in that we have complete cooperato between county and city in our planning efforts. We have a re i nal planning commission. We have undertaken the making of a transportation plan to attack the problems of tr~nsportation i our community. We have, as I said before, taken advantage of t e Economic Opportunity Act of 1964. We have cooperation betwee city and county governments and between our govermnents and sch ol organizations. We have many active community organizations i our city. There are efforts pres- ently being undertaken in Spring eld to improve our existing social welfare agencies. We have attenti n being given to proper hospita]i- zation in Springfield. We in gove nment have taken an in-depth ap- proach ~to the relocation of mino ity families in our urban renewal areas, and we have strong assist nce and strong support in these efforts by our local real estate boar which is a noteworthy accomplish- ment, I think. We have efforts eing taken to improve our public school system and last., but certa nly not least, we have one public housing project in existence which is beautifully designed and is filled with people. It consists of 210 nits. We have two more planned public housing projects for our ity, one regular and one for the elderly. Therefore, I would summarize b merely saying this : We in Spring- field and we in Springfield's gov rnment are willing to attack these problems. We are going to face them regardless of what happens. We may succeed in solving `the p oblems, but we will stand a much better chance with massive Feder 1 assistance with the kind of guide- lines envisioned in this legislatio rather than with specific require- ments. I thank you for the opportuni to appear before the subcommittee. I thank you for making it possi i for us to be here. I would point out that Dr. He , I, or Mr. Norman would be happy to entertain any questions that e committee might have. Mr. BARRFVr. Well, thank y , gentlemen. I have no questions because your statement is very plet.e and fully explanatory. Your views will help us when we mar p the bill and we will certamly try to give cities such as yours the 1 g slation they need. Mr. Harvey? Mr. HARvEY. Thank you, Mr. hairman. I just have one question here and I am not sure whom I hould direct it to. Maybe the city manager caa best answer it. PAGENO="0076" 662 DEMONSTRATION CITIES AND ~ URBAN DEVELOPMENT It is the same question I have ask4~d all the other mana ers and mayors who have been here. Can you ~1l me what the needs oft Springfield are in t rms of dollars? Mr. CAPLINOER. I think we can answer that question. I wo id like to have Mr. Norman, our urban renewal director, respond to i if that would be acceptable, Mr. Chairman. Mr. H~uwi~y. Can ~ very succinctlY-You may not be p epared at this time to give a specific answer. 4re you talking about $ 00 mil- lion ? Is it $1 million or $2 million 4r what sort of figure, so that we have a round number of figures of ~hat we are talking abou . One of the proMems of this subcommittee a~nd the administration i going to be the sort of overall program we ar~ talking about across t e coun- try. There are some 700 cities across the country and I kno all of them have an interest in being a demonstration city. Actuall 70 are going to be selected. The top `TO will be selected, maybe. We ave to establish an overall figure. So I am interested in what a city1 he size of Springfield, in your judgment, would need. Mr. NORMAN. Within the scope of the message, we would ay be- tween $30 million and $40 million. Mr. HARVEY. Thank you very much.t I have no further qu tions. Mr. BAERZTr. Thank you, Mr. Harve3f. All time has expired.. j Gentlemen, we are certainly pleasec~ to have had your tes imony this af~ ernoon. You make a very splendid presentation. The committee will stand in recess until 10 o'clock to orrow morning. (Whereupon, at 3 p.m., the subcommittee adjourned, to rec nvene at 10 a.m., Friday, March 11, 1966.) PAGENO="0077" DEMONSTRATION CITIES N URBAN DEVELOPMENT PRI~A~, d ii, 1966 HOUSE c~ I~PRI~SENThTIV~S, S UI~COM E ON HOUSING OF THE CoM*n * 0 BANKING AND CURRENCY, Washington, D.C. The subcommittee met, p~krsu ñ t recess, at 10 a.m., in room 21~8, Rayburn House Office Building, 6 . William A. Barrett (chairman of the subcommittee) pre~iding. Present : Representatives Bar ett Mrs. Sullivan, Widnall, Mrs. Dwyer, and Harvey. Mr. BARRETT. The committee i 1 ~ me to order. Our first witness will be Dr. a vey Renger, Hallettsville, Tex., representing the American Medi ~ 4. sociation. Doctor, I want to tell ~ou tha e re very much pleased to have you here this morning. Of course, ~ a e desirous of making you feel as much at home as we pos~ibly ca~ ~ u and your associate, Mr. Harri- son, and if you desire t4 cothpl~t y ur testimony you may do so and we may ask you one or tw~ qu~ iO s after you have completed your testimony. We will abi~ie by wI~i e .r is suitable to you. Dr. RENGER. Thank you, sir. Mr. BARRETT. You m~y s1~art ~o r stimony. STATEMENT OP HA1~TE~ R~ G R, M.D., REPRESENTING THE AMERICAN MEDICAZ ASSOC~ i N; ACCOMPANIED BY BERNARD P. HARRISON, DIRE~TOR O]~' ~ AMERICAN MEDICAL ASSOCI- ATION DEPARTMEN~ ON L~ S~ TION Dr. RENGER. Mr. Chairman ~n embers of the subcommittee, I am Dr. Harvey Renger, a physici~ p acticing in Hallettsville, Tex. I am appearing today oi~ behalf o t e American Medical Association, which I serve as a member of tI~ A A Council on Legislative Activi- ties. With me is Mr. Be~nar~T P~ Harrison, director of the AMA Department of Legislatio±i. As we understand it, H.R. 9~ ould amend the National Housing Act to provide mortgage iñsur~b e r direct loans to a "group practice unit or organization" ~or the ~ n motion of new structures, the ac- quisition of existing str~ucttires a. d he expansion, remodeling, and im- provement of same, as ~srel1 as tih c st of equipping any such facilities. The term "group pntctice ur~ or or~anization" is defined in section 1007(4). While this bill prov es wide latitude as to the groups for which mortgages may ~e insu ~ 0 to which loans may be given, the bill establishes the priorities of ~ ch parties, and provides discretionary power to the Federal HOusin C mmissioner and the Housing and Home Finance Admi~iist~ato o etermine additional priorities as they may deem appropriate. 663 PAGENO="0078" 664 DEMONSTRATION CITIES AND~ URBAN DEVELOPMENT H.R. 92~S6 is basically similar to 4.R. 2~87, 89th Congre s, upon which the AMA testified before the }Joiise Interstate and Forei n Corn- merce Committee in March 1965. Ot~r objections to ELR. 29 7 went to the substance of the bill. While w~ believe that this prop al, con- ceming itself as it does with mortgage insurance and direct oans, is more appropriately before this committee, we find that there has not been sufficient change in the legislation or in the circumst ces on which our objections were based to warrant a change in our ition. Accordingly, not persuaded that this l~gislation is advisable o neces- sary, we appear here today to again v~ice our opposition. At the outset it should be clearly ~inderstood that the A erican Medical Association does not oppose gi~oup practice by physici . It is recognized that such practices may ~fford some advantages to both the physician and the patient, and that the number of group p actices is constantly increasing. It should be also recognized, howev r, that this type of practice is neither feasible nor desirable for all of the physicians of our Nation. Since there are different types of gi~oup practices, we shou d keep before us the intent of this bill with re4ect to the type of grou prac- tice which it would foster. It is our opi~iion that H.R. 9256 is d igned primarily t4 provide for the constructio4 of prepaid closed-pane group practices. I will speak more to this point, shortly. Our reasons for objecting to the measure pending before th s com- mittee may be briefly categorized. Fir~t, physicians do not ha e diffi- culty in obtaining conventional loans. Second the number of group practices is increasing without Federal financing. Third, direc loans by the Federal Government are unwarranted. And fourth, th bill is discriminatory in the priorities granted to applicants. PHYSICIANS ENJOY GOOD c~REDIT STANDING Physicians enjoy a high credit stand$ig in their community.~ It is generally re~ognized that the physiciant has a high potential e4ming capacity. That this potential is usual~y realized may be see~ from surveys which have compared the M.D. to other professions or ~o the businessman and have found the physician to be at the top of th~ earn- ings or net income ladder. And when a physician participates in a partnership or in a group practice, his personal income tends to be still greater. As far as we know, there has been nothing shown hich would indicate that physicians require q~ny special or unconven ional form of assistance when financing the c~nstruction of their offi s or the equipping of them. THE NUMBER OF GROUP PRACTICES IS INCREASING One might suppose from the emphasis stemming from. the bil that a need for group practice is not being met. The implication is t ere- that growth in group practice is being stifled and that special ssist- ance is needed. This is not so. Three surveys with respect to group practice are significan . In 1946 a survey conducted by the Public ~Eealth Service, with t e co- operation of the AMA, reveaied the exist~ence of only 368 group rac- tices. A second survey conducted by th~ PHS in 1959-60, in hich the AMA closely cooperated, showed ther~ were 1,546 group prac ices. PAGENO="0079" DEMONSTRATION CITIES D RBAN DEVELOPMENT 665 In earlier testimony before this m ittee, on March 1, the Under Secretary of the Department of H a th Education, and Welfare stated that "today, group practices n er nearly 2,000." Unfortunately Mr. Cohen did not have the ben t f our latest survey. Just last year, the AMA undertook a direct ai inquiry of all physicians. Re- sponses show that there are now , 5 group practices with approxi- mately 26,000 physicians particip ti n such groups. This remarkable growth of gro p actices,, an increase of 350 per- cent in 5 years, has taken place wit ut Federal subsidization. DIRECT LOAN N ARRANTED Title II of H.R. 9256 would a o ize the Housing and Home Fi- nance Administrator to make 1 a s o any group practice units or organizations to assist in financin he construction cost of group prac- tice facilities. We see no justifi tio for this provision. We have already shown that physicians, p r a s more so than any other group, are able to obtain financing, thr u h usual channels, to meet the cost of constructing facilities. H.R. 9256 is not primarily c ce ned with physician owned and operated group practices, but is i t n ed to provide preferential assist- ance to prepaid closed panel gro p actices, particularly those which may be established by agencies o r anizatioiis. We see no justifica- tion for such priority. DISC~IMINA 0 Y REFERENCES Our fourth reason for opposi g ce tam provisions of H.R. 9256 con- cerns the discriminator~r natur f his bill as e~idenced by the pri- orities established. In this resp t 1 t us examine pertinent provisions of the bill. - 0 H.R. 9256 provides t~iat mort ag s may be insured or loans given to the following (sec. 1007 ( a) ) (A) A private agency or organizati n including a medical or dental group) undertaking to provide, directly or hro gh arrangements with a medical or dental group, comprehensive medical ca e or dental care, or both which may include hospitalization, to members or su scribers primarily on a group practice prepayment basis; (B) A public or private nonprofit ge cy or organization established ~or the purpose of improving the aVailability f edical or dental care in the community or having some function or functions ela ed to the provision of such care, which will, through lease or other arrange ent make the group practice facility with respect to which assistance has bee r iiested under this title available to a medical or dental group for use by it ; r (0) A medical or dental group. The bill requires certain pri ri ies. Section 302(a) requires the Federal Housing Commissioner an the Housing and Home Finance Administrator to establish join ly criteria determining priorities in insuring mortgages and making lo ns- which criteria shall give preference in he case of applications involving facil- ities to be located in smallei~ comm ni les and in the case of applications of agencies or organizatlon~ described in subparagraph (A) or (B) of section 1007(4) of the National E~ousing Act wh'ch are public or nonprofit o~ganizatio'ns as defined in section 1007 ( 5) of sue A t, and in such other cases as they may deem appropriate and con~istent with th purpose of this Act. PAGENO="0080" 666 D1~iMONSPRATION CITIES AND ~ URBAN DEVELOPMENT It may be seen from the foregoing excerpt that it is not the edical or dental groups of subparagraph (c) which are intended to e bene- fited by H.R. 9~56, but the agencies or organizations which under- take to provide medioal.care to members or subscribers prima 1y on a group practice prepayment basis. Tkius the question is not simply whether mrtgages should be in~ured~for, or loans given to, "group practices" but whether preference fort such loans should be iven to corporations, associations, trusts, or ot1~ier organizations which under- take to make available medical care. During the fourth day of hearings ~y the Interstate and oreign Commerce Committee, its chairman, Congressman Oren Harrs, who had introduced H.R. 2987 containing substantially similar prorities, stated (p. 321, hearings, Mar. 2, 3, 4, and 5, 1965, on H.R. 2987 We might as well acknowledge the issue inyolved here. We have been talking around the fringes of it and arguing about wl4ether the funds are availa le, with most of my colleagues thinking it was primarilfr for niedical groups to get egether and organize ~ a group practice facility. In ~ny judgment, this progra is not primarily int~nded for that kind of clinic. I Ithink the facts here are th t those who are ~pon~oring and proposing this are doi4ig so on the basis of organi ing and expanding th~ prepayment type of clinical and~medical treatment program and to operate it on that basis. * On another point, Mr. Harris said : This is a program to permit certain groups, private groups or organizat ons, to go out and organize this kind of a program. This committee and the C ngress will have to decide whether we want to put up funds from the Federal overn- ment to establish this kind of a program. That is the way I see it. I quote further from Congressman H~rris: The purpose of this legislation is to pro~m~te a group-type, prepayme t-plan program in oMer that it can be organized and put into effect in certain these congested or highly populated areas. We believe that a system of medical c~4.re provided through p epaid closed panel clinics should not be subsidized by the Federal G vern- ment. We believe that this legislation is unnecessary. In closing we would again emphasize that this legislation is di erim- inatory, designed to promote a system of furthshing medical care through closed panel prepayment group health plans ; that it s un- necessary in view of the rapidly increasi4g number of group pra tices being formed without Federal legislatk4n ; that direct loans ar un- warranted ; and that physicians enjoy ~xcellent credit standi g in their communities and need no special as*istance in financing th con- struction of office facilities. We urge you to reject this legislation. Mr. Chairman, the American Medical Association is gratefu for this opportunity to present its views on this bill. We hope tha our comments will be helpful to the committee, and we will be pleas d to attempt to answer any questions which rriay be asked. Mr. BARImTr. Thank you, Dr. Renger. I gather from your statement that you~ organization feels tha the group medical practices bill is unnecessa4y because private fina cing for such facilities is available in a con*entional mortgage ma ket. Now, there may be others who may disaØ~ee with your organiza ion, but I would like your reaction to this. W1i~at if this subcommittee ere to discard the standby direct loan authorization and were to auth rize only FHA insurance loans whenever a private lender is able to ake PAGENO="0081" DEMONSTRATION CITIES D URBAN DEVELOPMENT 667 the loan on an insured ba~is ? P ic~ ation would thus be voluntary and there would be no cost or bur n t the Treasury. If we can con- fine this bill to insured lo~tns wou y ur opposition be lessened ? Dr. RENGER. With you~ p~rmi s on I would like for Mr. Harrison to answer that. ~ Mr. HARRISON. Mr. Ch~iri~nan, i th bill were confined to mortgage insurance and it contaixjed no or ties and no direct loan provi- sions-and I don't know ~whethe ou indicated that in your comment or not-I don't believe *e woul be in here opposing the bill. We may still continue to believe tha , g~ erally speaking, physicians are well able to handle finai~cing th o g~ conventional means. But cer- tainly, our opposition to the bill ot~ d be greatly reduced, and while we might not find a mec~anism o si~ port the measure as such, I be- lieve we would not be ii~ here o ~ si g this bill, if both those provi- sions were deleted. Mr. BARm~p. Mr. Ha*e~y? Mr. HARVEY.. Dr. Renger, as ui~ erstand your testimony, at the present time, what you' are sa `ii~ is that the American Medical Association sees no need for thi 1 g~ lation period, is that not right ~ Dr. RENGER. That is right. Mr. HARVEY. LBt me ask yo ~ onally. Do you know of your own knowledge or have you he d f any physicians, young or old, who have had any diffiqulty w ~ s~ ver financing clinics to conduct a group practice whatsoe~ver? Let me ask further, has that e e~ been discussed in the American Medical Association as ~ne of t p oblems facing physicians, young or old today? Dr. RENGER. I don't know w th r it has been discussed on a na- tional level. I. know it has be n di cussed on a State level. To my knowledge there hasn't been ~ eed at all, because most young physicians, particularly if they et n a group, have a high potential which is recognized by most of t e anking concerns ; they certainly don't have any trouble g~ttitigl~a s. Mr. HARVEY. That c~rtainly ~ een my impression in the State of Michigan where I c~me fro~n t at physicians' credit or dentists' credit is A-i. Frankly,they ha~t be n able to walk into our banks and savings and loans the jay afte~ r duation from medical school and finance their entire oper~tion if~ ey eeded it. I also remember, Dr. Rei~ger, ~ e rd the testimony of Dr. Appel and the other officers of th~ Amerh~ n edical Association at that time. I also heard the officers o~ th erican Dental A~sociation testify on this bill and one staten~ent ~ a~ the representatives of the Dental Association had to sa~, was t a ~ en these loans would not, in his judgment, induce dent~sts to o in o remote areas in the country to practice where they otherwise ou d not want to practice. Is that, in your judgment, a corl'ect stat e t? Dr. RENGER. I think that is rgh . That has been proven, partidu- larly in my own Stat~ o~ Te s. Such loans are certainly not an incentive for groups ~o mov nt a small rural area where work is not available for a grbup lar e th n three. Mr. HARVEY. What yott ar~ ay ng so that I understand you cor- rectly is that if this b~l were è ac ed as it is, those who would take advantage of it would not be t p ysicians or the dentists, but would o60-878 O-~46-pt. 2-~--6 PAGENO="0082" 668 DEMONSTRATION CITIES AND URBAN DEVELOPMENT b*e those who desire to foster the prcpai$1 medical plan, is that a out the sizeofit~? I . Dr. Ri~acoj~a~. We are afraid there is ~ possibility that with 1: is type bill, orgathzations might control the c4re that a patient receiv s medi- cally and it might be detrimental to th4 patient. Mr. H~~u~vi~y. In other words, what ~ou are saying is, it w uld not be the same as if the doctors themseFv~es were asserting that control and dictating how that patient would be taken care of? Dr. RENGER. That is right. Mr. Ethwi~y. Your organization wou~Ed foster the group prepayment payment plan for the ones dictating it? That is w~hy you ar averse to this particular program? Dr. RENGER. That is exactly right. j Mr. JJ~i~. Let me ask you this ot~ier question. Do you t ink in your testimony that there should be so~ne sort of limit on the mount of support that would be available to ~ny one group if such bill as ~ this is enacted ? Dr. RENGER. I certainly think that would be a good precau ionary move. I would agree with that. Mr. HARVEY. Let me ask you further, in your understandi ~g, the provisions of this bill would include fin~ncing, not oniy for th build- ing itself, but would include financing for all the equipment th t goes into the building ? Dr. RE~GER. That is right. Mr. HARVEY. Now, this equipment c uld be very expensive, s that correct ? Dr. RENOER. Yes ; it could be so expebsive, and one could ju t keep cascading it to a point where it wouldn't even be a profitable sit ation. In other words, suppose you went into an area where there asn't enough demand for a heart-lung machine. You could even buy one of those and set it up, and you could spei~d tremendous sums of oney without any need for it. Mr. HARVEY. Could you give us any idea, for example, just in round numbers or figures, what we are ta&in~ about to equip, say a four- doctor clinic~ just as an example ? Dr. RENmm. May I use my own person~l reference? Mr. HARVEY. Yes. Dr. RENOER. I operate a five-group clinic. Mr. HARVEY. Five men, you mean? Dr. RENGER. Yes ; a five-man clinic in the community of Ha letts- yule, which has a population of 3,000 people. The total cost f my clinic was around $85,000, including the building and the equi ment. Mr. HARVEY. This was purchased whe4 Doctor? Dr. RENGER. I have been in practiceja long time. It is ov r the years. We have had to discard some of~ the equipment and bu new equipment, but it is set up on an $85,000 inventory Mr. HARVEY. The $85,000 that you a*e referring to would e the cost to a group of doctors performing those same services, purch sing the same equipment today? Dr. RENGER. I think it could easily, be replaced today for a hun- dred thousand dollars. Mr. HARVEY. $100,000? Dr. RENOER. Yes. PAGENO="0083" DEMONSTRATION c~ITIES 4]~ RBAN DEVELOPMENT 669 Mr. BARRETT. Will the gen~1em Ii yi id? Doctor, on this point, ar~ y~u i ç 4 ng land and structures? Dr. RENGEB~. That's an o~eral n~ unt. It is a wooden frame building, modernistically designe Mr. BARRErr. Wooden ~rathe? Dr. RENGER. Yes. Mr. HARV~T. But you I~ave five oc ors in that building? Dr. RENG~u. That's rig~it. Mr. HARVEY. I gather, ~ Ddctor ii maybe I should address this to Mr. Harrison, although yc~u ar ~ today opposing the bill in its entirety, that you feel if t1~iis ~om t1~ is to enact the bill, under an circumstances we should at least s r~ e~ that provision dealing wit these direct loafls? Mr. HARRISON. One otjaer pro i i~ ~ Mr. Harvey. We seriously believe and strongly urge~that th iM isbn with respect to priorities also be stricken. Mr. HARVEY. Those tw~ p~ovi ~ Mr. HARRISON. Yes, sit. Mr. HARVEY. Thank you very i~ h and we certainly appreciate hearing from you. Once again, even tho~i~h this ~ ~ ore a different committee, I sat on it last time and heard Dr. Ap ~ , ~ think it is a fine thing that your organization would comet in to g ~ i~i your testimony. I have no further questions. Mr. BAiuu~m~. Mrs. Su~livan? Mrs. SuLLIVAN. Thank you, asked all the questions I ~war~ted Mr. BARRETT. Mrs. D~ryer? Mrs. Dwn~n. No question~. Mr. BARRFJrr. We app~eciate ~ u~ coming and thank you for your statement this morning ~nd the c rn ittee will certainly give it con- sideration along with the otl~ier t~s i ony. Dr. RENGER. Thank y~u. Mr. HARRISON. Than1~ yoti, ~. C airman, for permitting us to be here. Mr. BARRETT. Before ~ve ball 1~ ~` xt witnesses I would like tQ put this in the record. I w~u1d ii ~ to nsert a statement on H.R. 9256 from Mr. Kenneth Williathso , a~ ociate director, American Hoe.- pital Association. (The letter referred to folio ~:) ~ EBIOAN HosPimi ASSOCIATION, Wa8hinqto~, D.C., Maroh 7, 1966. Hon. WRIGET PATMAN, OluzSrman, Housing ~uboon~mSt~ee o he ommittee on BanJcing anI C~urrency, Uf:~. Ho~oe of Repre~e~tatives, a~ ington, D.C. Dii~s CONGRESSMAN PAT~IAN Ph ~ statement is `sent to you to express the views of the American H~spita1 ~ oc~ tion in respect to H.R. 9256, a bill to amend the National H~us~ng A ~o provide mortgage insurance and au- thorize direct loans by the~ Depart ~ t b Housing and Urban Development 1o provide financial assistance fØr co `s rt~ ting and equipping facilities for the group practice of medicine o~ de i tr~T. We wish `to make clear that ~ this association looks upon the ~roup pr ~ ic~ of medicine or dentistry as a desirable means of providing such sers~ice ~ t1~ puhlic. We do, however, have real concern with respect to certain of ~ ~ isions embodied `in H.R. 9~56. The bill provides for th~ Federal o~ rn*ment to participate in finaucipg the constructlon of group practice facli t es rated as proprietary endeavors. In PAGENO="0084" 670 DEMONSTRATION CITIES AN URBAN DEVELOPMEN essence, therefore, it provides for Federal' Government participation in financ- ing physicians' offices. We know of no jus~iflcation for the Federal G vernment to undertake assistance for construction of ~hysidans' offices and b lieve that the nornial ehannel's of private financing should meet adequately th need for such proprietary facilities. The program of the Small Business Adi~iinistration does provide hort-term loans for such proprietary facilities at wJiat amounts to regular c ~ mmercial interest rates. To the extent that any Fed4ral Government assistance is needed for the provision of proprietary group pr~jctice facilities, this progr m should meet that need. Assistance by the Federal Governmentl limited to nonprofit gro p health facilities may well have merit In this retard, however, we believe t is most essential tb~t the legislation be amended 4 as to assure that major iagnostic facilities de~reloped in connection wIth grow-practice endeavors do not duplicate unnecessarily such facilities which are al~,eady available in commu ity hoe- pitais. Phe Federal Govermnent has ase~sted in the provision of essential major diagnostic facilities in hospitals through the Hill-Burton and H 11-Harris programs. We believe ft would be unwise and wasteful for the Federa Govern- ment to participate in duplication of such facilities as may be possi le wider the present provisions of H.R. 9256. The shortages of health per~onne1 are at~present so acute that we elieve it is incumbent upon the Federal Governmenl~ and all others concerned with the development of health care programs to in$re the most economic use f health personnel. 4~ny unnecessary duplication of ~najor diagnostic facilities ill tend to further aggravate the shortages of criti4ially needed health person eL Al- though the bill does provide that the Oo4nmissioner ~hal1 consult ith the Surgeon General before prescribing regulattlons, we feel that the possibilities of wasteful duplication in this program are sb great that they should be guarded against by statute. We would appreciate your making this letter a part of the record of he hear- ings on this hill. Sincerely yours, KENNETH WILLIAMSO Associate D ector. Mr. BARRErP. The next witness this~morning will be Dr. J hn B. Wilson, chairman, Council on Legislati~n, representing the A erican Dental Association. Dr. Wilson, we are glad to have yoi~ and your associate he e this morning. I would like to extend to yOu the same courtesies t at we have all the other witnesses and we do hope that you will feel a home here. I was wondering if you would be kind enough, before yo start your statement to introduce your associate for the record. Dr. Wu,soN. I have it in the statement. Mr. BARRETr. If you wish to complete your statement first yo may do so and then we may ask you one or t'sto questions at the end o your statement. If that is agreeable you may proceed. STATEMEI4'J~ GP DR. ~rOKN B. WIISO$1, CEAIRMAN, COUN L ON LEGISLA1~ION, REPRESENTING THE ~&M]~RICAN DENTAL A SOCI ATION; ACCOMPANIED BY B. I. CON'W'AY, CHIEF LEGAL 0 CER, AMERICAN DENTAL ASSOCIATION Dr. WILsoN. Mr. Chairman and members of the committe , my name is Dr. John B. Wilson of San Marino, Calif. In addit on to maintaining a dental practice, I am chaiitman of the Council on egis- lation of the American Dental Associatio~i. I am here today repr sent- ing that organization. With me is M4 Bernard J. Conway; chief legal officer of the association. We are *rateful for this oppor nity to appear and present the views of the der~tal profession on this m tter. PAGENO="0085" 671 DEMONSTRATION ~ITIES RBAN DEVELOPMENT The American Dental A~ociatio~i is trongly opposed to H.R. 9256. We would like to make it quite c1~ a the outset, however, that our opposition in no way mea~s we a4'e opposed to the establishment of group practice or to the ex~ension ~ t is mode of practice. We have long recognized it as one ~f a nu r of excellent forms of practice and indeed believe that in home ci ~ n~ tances it may well be the most desirable alternative. We are, nonetheless, opposed to .B 9256 because we consider it to be professionally undesira~1e as w~l a~ unnecessary. We understand and sympathize with the sinç~ere ot~ es of those who support this measure but careful consideration 1 a~l us to the belief that it would not in fact achieve its stat~d purp ~ d might well prove a deterrent to the high quality of dent~tl ahd e Id 1 practice in the United States. There are two distinct c~itegorie E roup practice facilities treated in H.R. 9256. One is a fa~i1i1~y o ed y a medical or dental practice team organized by the pro~fes~iona ra titioners themselves to provide care on a fee for service basis in t ~ sa e way the physician or dentist in individual private practice off ~ is services to the public. The second category of group practic fad ity is, typically, established by a group of nonprofession~ls ~or t p rpose of providing care to sub- scribers or to members of t~ie e t bi shing group. The lay group, organized as a consumer coc~pera~ e or nonprofit prepayment plan, hires physicians or dentists oi~ bot~i or~ a salary basis. The health pro- fessions associations comi~only r~f r t this second category of group practice facility as a closed panel j~ ac ice or clinic. H.R. 9256 is designed to enco4 ag establishment of facilities for large, group medical and dei~tal j~r cfces. Beyond that, it specifically gives priority to such pra~tices "i~ n~ her communities or those spon- sored by cooperative or other noi~ ro t organizations." The associa- tion's objections here ar~ twofo d. irst of all, we do not believe the Federal Government should, s ~ matter of public policy, prefer one mode of professionaj practi e o~ r other traditional and efficient alternatives. In this bill tl~ie p e ~r nce is for group practice over small partnerships and ~ndbridua p actices ; our objection, however, is to the obvious discri~ninatio aa~ would remain even were the preferences to be rever~ed. `S nd y, it is our conviction that in establishing priority for group r ctices "sponsored by cooperative or other nonprofit organiza1~ions," . ~ 256 obviously is intended to spur the establishment of noi~iprofes i na ly owned and controlled closed panel practices. It is dur con ~ ~ that the proliferation of such facilities would tend to lower th tt lity of health care in the Nation. While these professio~ial obje t on are enough to persuade us that H.R. 9256 is not an ap~ropria e p oposal, there are additional ob- jections of a more pragipatic na re. As far as we are able to tell, t re is no evidence of lack of loan re- sources for construction of dent 1 ai~ medical practice facilities, be it group practice or some other f z . This conclusion is supported by the public testimony g~th~red d ri .g hearings on this subject last year by another disting~iisl~ied ittee of the House. Loans from private lending institut~ons are va~lable to take care of most of the practice facility needs o~ the de t 1 rofession. Where private sources are not available, the dentist o h sician, singly or in groups, can, like any other small bu~iness o er, apply to the Small Business Ad- ministration for assista~ice. PAGENO="0086" 672 DEMONSTRATION CITIES AND URBAN DEVELOPMENT The Small Business Administration is, in the association's pinion, performing a useful service in providing resources for dent sts and physicians where private lenders alons are unable to do so. The as- sociation is convinced that H.R. 9256 ~4uId not only duplicate n great part the very effective program of the ~ma11 Business Admini tration but its passage might well block acce4s of this program for entists and physicians. We say this since it~ is our understanding hat the law under which the Small Business ~ Administration loan rogram is administered specifies that such loans will not be available to per- sons or entities which are eligible for other Federal loan pr grams. Thus, a private dentist or group of dentists may well find th Small Business Administration closed to him and be forced to ap ly to a program so designed that it automatically gives him less tha equal status with other applicants. The American Dental Association b~1ieves that any objectiv study of the resources available for constructi~on of medical and dent 1 prac- tice facilities will reveal no need for ad~itional Federal loan su port at this time. Even if it could be shown-4which it hasn't been to date- that some few types of practices are not~able to obtain adequate nanc- ing, the most likely and practical remedy to be explored is ame dment of the existing Small Business Administration program. In connection with this question of availability of resources, e note that a witness who appeared before you on an earlier day dunn these hearings implied that documentation f*r the lack of appropri te re- sources can be found on pages 313-317 ~f the hearings held la t year by the Interstate and Foreign Oommer~ Oommittee. We join in the suggestion that you read those pages bui~mu~t disagree as to wh t they docum~ent. Pages 313-317 contain state~n~nts from eight grou prac- tice organiza~tions cncerning their attiempts at securing fin ncing. In one instance, the organization abandbned its search for a lo~n be- cause of other problems that occurred. in every one of the rem~ining seven instances, the organization in question `was, in fact, suc4essful in securing a loan. This, then, hardly seems to me to be docur~ienta- tion of anything but the fact that resoutces are available, though not every loan applicant is necessarily going f~o receive as much :~ he ~vants or at terms asfavorableas he might wish. ~ Finally, the association must most respectfully disagree withLthose who contend~th~vt this program, if enac~ecl, would induce physicians and dentists to locate in areas where ther~ is now a shortage of ~racti- tioners. The problem is considerably imore complicated thar~ this would make it see~n. The United State~ over the years has ~Mnged from `an agricultural to `an ui~ban society. Most of our people no live in metropolitan areas. `Students of medicine and dentistry are n the main drawn from these areas and upon graduation generally te d to return either to their homes or to a similar place. It is not only because `the most modern health facilities ~re available in metrop litan areas-though that cer1~ainly is t~n important factor-but `also be ause the person finds life in a metropolitan ar$~ the kind of life with hich he is familiar and wants for himself a4d his family. it is, i our opinion, most unrealistic to think that thiststate of affairs would change in any substantial way by enactment of~the program `envisione by H.R. 9256. Every bit of available viden~e indicates that it wou dn't. In fact, we are aware of instances in which small communities ave PAGENO="0087" DEMONSTRATION ~ITIES been unable to secure physicians ai d ities are avai1abli~ without costto ti ~ it is our belief that mu~h more a situation are available to ~oitgre~s tistry, for example, would be iner ~ to States for dental healtl~ pi~ojec s be purchased and other sii~il~r rn ~ people in sparsely populat~d areas. These, then, are our pPfession ~l 9256. While, as I have said, w sincerity of those who suj~port t i careful analysis shows th~ biil to b Mr. Chairman, on beh~if of t want to thank this committee f4 r would be glad at thi~s tim~ to atti r: Mr. BARRETT. Thank y$u, ~r. 7 Your opposition to the bill, ti e opposition of the previou~ witnes ? Dr. WILSoN. That's rig~it. Mr. BARRETT. I would ~ike to a I asked Dr. Renger. What if the subcomrni~te wer authorization and were to authori e ever a private lender is ~dll~ng ~ W}iat would your reactio~ to thi on the Treasury whatsoe~er ? D be less interested in oppo~in~ the I Dr. WILSON. As statex~E b~forA, eliminated from the bili~ and as today, we feel that fund~ are air ~ physicians and dentists to have i now provided by the Smafl Busin s Mr. BARRETT. Mr; Ha~vey ? Mrs. DWYER. Dr. Wilson, wha equipping a dental clinic ~s t~iis b ~ Dr. Wn~soN. I would esUmat live, and I cannot speak ~for the a imately $~O,OOO for each dent~ist's ~ Mrs. DWYER. What wOuhi be. ~l any evaluation ? .. . Dr. WILSoN. I am nol~ ar~ autl~i would be much different across tl~e Mrs. Dwn~n. One mo~e ~üest~ loans have been made to physici~n or dentists? Dr. WILSON. I do not have tJ~a Mrs. Dwyer, Mr. Conway can an~ Mr. CONWAY. We~don~t h~,ve th lection, and it is.off the ~to~ of :: $4. million has been m~4Ie avail I (The following was fi~rnished 1p The Small Business Adm~nistrati to dentists aggregating $6,j30,000 si D IRBAN DEVELOPMENT 673 tists even when practice facil- etitioner. opriate measures to meet this the Executive. One in den- support for the grants-in-aid hat mobile dental units could S taken to bring dental care to d practical objections to H.R. ~e the utmost respect for the easure, we are convinced that ipractical and discriminatory. nerican Dental Assooiation, I ~ring us. Mr. Conway and I 0 answer any questions. IL very much in order with the yo . the same question in part that iscard the standby direct loan y the FHA-insured loans when- ke a loan on an insured basis? here there would be no burden think your organization would `f that were to be added? feel that the priority must be tated in our presentation here ~ and it is not necessary for the ed moneys in addition to that Iministration. )wyer. Lld you say would be the cost of risionsit? going prices in the area that I oast, of course, but it is approx- thry. ~st for the country, do you have on this, but I do not believe it ntry. Do you know how many SBA dentists or groups of physicians ~ure in my mind, but I am sure, hat. act figures and it is just my recol- acI,~approximateiy $3 million to ~0 cl&itists seeking such loans. ~mmittee:) In&catea that there have been 410 loans ~ t e beginning of the program in 1953. de ,l on In iji e 511 A 5, `To t 0 11 er , r ~ . ~ ~ PAGENO="0088" 674 DEMONSTRATION CITIES AND ~URBAN DEVELOPMENT Mr. CO~WAY. I would like to make~ one comment on Dr. ~ Tilson's previous aflswer to the chairman's ques4ion. I think our position generally on t~iat question would be iniilar, if not identical to the American Medic~4,l Association. We wo~ .d have no objection to insured loaxi programs~ We have had no obje tion to the Small Busmess Administration program, but as Dr. Wilson pomted out, our chief objection to thi~ bill is the priorities ~ nd dis-' crimination that is involved. Mrs. DWYER. That will be all, Mr. Chairman. Mr. BARRETT~ Mrs. Sullivan ? Mrs. SUtLIVAN. I was going to ask Dr. Wilson `about the riority plan that i~ in the bill. But I think y u both answered that ~ uestion well. Th&uk you. Mr. BAEIWrT. Mr. Harvey ? Mr. HARVEY. Dr. Wilson, or maybe 1~ should direct this to ~ r. Con- way, I am not sure. Do you know of an~y instances where denti~ ts have been denied the opportunity to practice as a group because th y were unable to finance their building or facilities? Dr. WILSON. I do not, Mr. Harvey. In my area, as has bee~ stated before, it is quite simple for a professi~nal man to obtain the ioneys necessary to build this type of practice. Mr. HA.R~EY. Where is your area ? Dr. WILSON. Southern California, *cxt to Pasadena. In fact, I have built a medical center myself, so~I am quite familiar `v `.th the costs. Mr. HARVEY. How many doctors do you have in your i edical center? Dr. WILSoN. Thirteen, but it is not a ~roup practice. It is a i edical center and it is not a group practice. We have a pharmacy ai d each man operates his own office-~-maybe twoinien in each office-sep: rately. Mr. CON~TAY. As far as the Americ~n Dental Association s con- cerned, in r~lation to our central offlc~ $~ctivities, we have recei red no complaints ~r questions from the mei4bership about financin ~, lack of financing1for group practice facilities~ Mr. H~u~er. Would you agree withi my statement earlier ~ ~ then I said, at 1ea~t in Michigan, a doctor oi4 dentist right out of n~edical school could go into a bank and sec*e financing for this ~ort of thing? Mr. CONWAY. That seems to be the case ; yes, sir. Dr. WILSON. I happened to do this during the depression ri ht out of school, so I know this is true. Mr. HARVEY. And it is still the case to4ayl Dr. WILSØN.. Yes, sir. Mr. HAEV~Y. One other question. ]~ this committee were t ) pass a bill like this, would you think that it 4'ould be wise to put soi e sort of limit, say, perluips in percentage of t1~ie cost of the building, limit upon the amount of equipment and facilities that could be fin nced? ~ Dr. WILSON. I think this would be good judgment, very goo ~`. Mr. HARVEY. Would you see a danger that Dr. Renger talked about perhaps in financing equipment that might not be needed just b cause it could not be financed on a 90-percent b~tsis? Dr. WILSON. Very much so. You wpuld have the duplicat on of equipment ir~ several areas, in my oprnio PAGENO="0089" DEMONSTRATION CI~tIES Mr. HARVEY. Thank y~u very: You also appeared before th~ Tnt mittee, Mr. Conway, with Dr. Ker Mr. CONWAY. That's ri~ht. Mr. HARVEY. T have no further Mr. BARRETT. Thank yGu, Dr. We want to thank yoi~ a~id ~ r consideration will be giv~n to y ti Dr. WILSON. Thank yoti very r ii Mr. BARRETT. Our next witnes director, Optometric O~n~er Of N ~ ican Optometric Associat~on. Dr. Haffner, come forWard pie: ~ Before you start your stateane mittee on both sides whe~e ~ve w~: as we can. You seem to~hay~ a On Friday I received ~ letter scheduled to testify befo~e the si b states, "In view of the fa~t t~iat : because of a previous engageme ~t ciate it if you will in r~cognizi: ~ love to have introduced ~ hir~i to t business in New York C~ty I re~ ~ sent to me by Paul A. Fbio, a ye y te~ on Banking and Ou~reticy ~ n on the Housing Subcon~mittee. to feel at home and T certainly w here this morning and T note th t you would be kind enough to in 1 right on. If you desir~ y~u ca~n may want to ask you sopie ques~i (The letter referred to follo*s fl~ URBAN DEVELOPMENT 675 ., Doctor. One other question. t$ e and Foreign Commerce Corn- ions. L. nway for your testimony and stimony along with the others. be Alden N. Haffner, executive rk Oity, representing the Amer- has been the policy of our corn- 0 make everyone as comfortable inner to make one feel at home. 4ting that Alden N. Halfner is rnittee on H.R. 9~256. The letter not be at the committee hearings New York City, I would appre- ,. Haffner indicate that I would ommittee but because of official Ly inability to do so." That was )able member of the full commit- ne who is very highly respected ~ainly, Dr. Haffner, I want you eport to him that you appeared 1 have an associate with you. If ce him for the record we will go ke your fu~l1 statement, then we after you have finished. I l,$~ C 711 Y ,. it HousE OF REPRESENTATIVES, `Wa8hington, D.C., March 8, 1966. non. WILLIAM A. BARRETT, House of Representatives, Washingto'n, D.C. DEAR BILL : On Friday, March 11, Is before the subcommittee oi~ H.R. 92~6. In VIeW of the fact that I will no~ previous engagement in N~w York ~ C recognizing Mr. Haffner h*1ic~tte tI~a the committee but becausE~ of offici~1 inability to do so. With kindest regards, I a~n, Sincerely yours, r. , lden N. Haffner is scheduled to testify ~ : t the committee hearings because of a [ty, I would appreciate it if you will in I ~ould love to have introduced him to bit mess in New York City I regret my PAun A. FINO, Member of Congress. PAGENO="0090" DEMONSTRATION CiTIES AND IEmBAN DEVELOPMENT STATEMENT OP ALDEN N. RAYF'NEB~ 0.1)., EXECUTIVE DIR OPTOMEThIO CENTER OP NEW `~ORK CITY, REPRESE AMERICAN ~PTOMETRIC ASSOCIA~tON; A000MPANIED B' LIAM P. McCRACKEN, WASHINGTON COUNSEL, AMERIth TOMETRIC ASSOCIATION Dr. HAFI~'NRR. Thank you very much, Mr. Chairman, anc deeply appreciative to the good Congre4srnan from the Bronx ~ that very kind letter. My associate t1~is morning is William Cracken, Ji~., Washington counsel for t~ie American Optometri ciatioli. * F Mr. Chairman and members of the committee, it is a plea appear before this committee. I am Alden N. Haffner, executive director of the Optometric of New York City. Today I am testifying on behalf of the An Optometric Association which represeuts the opthmetric pro in this country. There are some 17,000 doctors of optometry th out the United States engaged in the *111-time practice of the fession. Ti~ association represents ove4 two-thirds of these pra optornetH~t~. Briefly, n~y background includes a bachelor of arts degre Brooklyn College, a doctor of optom4y degree from Penns3 State College of Optometry, master's anU doctor of philosophy from the graduate school of public adknini.stration, New Yor versity. The graduate degrees were in the field of public po social issues involved in health and welfare. I am chairman of the association's social and health care committee and also serve as chairman ~f the public health sect the American Academy of Optometry.~ During the Korean served as an Army optometry officer, m~st of the time in La Ro France, with the rank of first lieutena~it. I recthved an hon discharge and since then have been pra~ticing my profession ii York City. The term "group practice" implies cothprehensive care-healt which is broader and more profound than any single practition professionally bring to the people. This holds true for both ty group practice, the interdisciplinary or muitidiscipline grout Interdisciplinary groups offer a broad range of practitionei represent thø entire spectrum of the h~alth team-physicians~ tists, podiatrists, and optometrists. The~single-discipline group tice provides~ concentration of knowledg4 in depth within a part specialty area. Optometrists participat~ and render their servi the visual sciences in both types of group practices throughoi country. The great interdisciplinary comprehensive group practices optometrists on their professional staffs as an integral part health team. They include : Ross-Loos, Kaiser-Permanente, IF Insurance Plan of Greater New York, Community Health A~ tion, and the Gouveneur Ambulatory Care Unit of Beth Israel M Center in lower Manhattan. The latter~is a very large and exti group practice facility, jointly operated ~y the city of New Yor the Beth Isr~i.el Medical Center. It has ~L.ll types and kinds of l~ 676 ~cYrOB, MTING r WIL- LN OP- I am ho sent P. Mc- Asso- tire to Denter erican Eession rough- r pro- ~ticing from ivania .egrees Uni- icy in ~rends on of war I ~helle, )rable New h care Br can pes of 5. ~ who den- prac- Leular ~es in it the have ~f the [ealth Bocia- ~dical nsive ~ and ealth PAGENO="0091" DEMONSTRATION CITIES D URBAN DEVELOPMENT 677 practitioners. Nine opt~m~trisi program. An example of the sing1~-djscip Center of New York Ci~y ~vith Forty-six optometrists, specia1ist~ represent a unicjue eommu*iit3T fac group practice in optometry in th Educators and practition~rs o acutely aware of the ren~ufrk~ib1e, in the knowledge of health scien new theories postulated, ~ie* me improvement of health $are~. T greater dependence of or~e p~act' bring more care, care in~ g$atei places added emphasis o~ t1~e ii greatly influenced the coj~cept oi In his statement before this cc Under Secretary Cohen ~iothd t the correlated increasing~ de~nan demand he cited the He~lth Prc which Congress passed td in~reas power ; this legislation i~cl~ides that the 1965 amendmer~ts to t loans to those students of ~ne4icin graduation, establish pra~tiqes ii power. Congress further recogi care specialists by inchidi~ig provision. H.R. 9256 will afford th~se s tunity to establish prad~ice~ in constructed buildings ti tl~ b practice lends itself esp~cially t might otherwise have to travel ments with various health pra rural and suburban areas~ The vision care needs bf the c list of health needs. O~ton~etr: and licensed in all the S1~ate~ an vision. By way of bacl$gr6und requirements for the eth~cation preprofessional undergr~d~ate sciences followed by 4 y~ar~ of degree, doctor of optoi$try (0 confer this degree. In additio oriented graduate progi~ams le~ logical optics and thre~ pi~ogr: optics and they comprise the titioners. As the vision needs o1~ the cit tometry developed certa~n sjeci Center of New York ~e have training, some of who~n won others deal *ith the prqblems o p rticipate in the Gouveneur roup practice is the Optometric 3h I am affiliated as director. ery phase of the visual sciences, nd the largest single-discipline ed States. ry health discipline are today .ng, and challenging revolution New facts are being assembled, and techniques offered for the pid rate of growth has led to r upon another. The desire to h, and the kind of care which ring of quality standards, has p practice. tee earlier in the month, HEW intry's population growth and health services. To meet this ns Educational Assistance Act supply of available health man- metrists. I would like to add t afford partial forgiveness of tistry, and optometry who, upon S critically short of health man- the shortage of qualified vision ietry in the loan forgiveness iealth professionals the oppor- equipped offices in functionally of their patients. The group care of our older citizens who sting distances to keep appoint- ens. This is especially true in y's population rank high on the .e profession specifically trained District of Columbia to care for the subcommittee, the minimum ometrists are at least 2 years of e work in liberal arts and basic ssional education leading to the All of the schools and colleges e institutions maintain research to a master's degree in physio- ad to a Ph. P. in physiological source of these research prac- increased through the years, oj~- For example, at the Optometric aetrists who specialize in vision ~ with children's vision needs; ple who have only limited sight; Ii 1 I e Ii I. e e~ ~ by~ rn e~ ci ei~ (1~ re~ 84 to~ C a L~ 11 f~t ic~ 0 ci I ni it he or oji 1~ o1~ 1 n~ to )n] PAGENO="0092" I ft our 678 DEMONSTRATION CITIES AND ~ URBAN DEVELOPMENT still others devote their time exo1us~ve1y to contact lens atients. In its 10-year history, the center's gro~p practice has served t e corn- munity in a wide range of vision need~ and, I will add, has p ovided care for people who might otherwise ~iave been unable to ob am the services. The bill you are now considering, ELR. 9256, is an excell nt one which demonstrates that there is and should be public conc rn, en- couragement, and financial means to Eoster more group healt prac- tices. I must add immediately, howe*er, that the bill in its resent form omits the profession of optometry.~ Optometrists should be allowed to c~re for the vision need of the country in a group practice on the san~e footing with physici ns and dentists. The American people need *nd indeed depend on t e care optometrists provide. As a matter ~f record, optometrists render more than 70 percent of the vision card in this country. The administration's war on poverty, particularly as it re ates to school dropouts and preschool children (Project Headstar ) , has need of group practice facilities such as are contemplated b H.R. 9256. It is impossible to overestimate the importance of vi ion in this age of high speeds, intercontinent~J ballistic missiles, sup rsonic aircraft, and electronic computers. Y~u know also the dema ds on your own eyes and those of your staff because of the vast am unt of required rea~1ing. I To deny ~ptornetristh the opportunity to participate in grou prac- tice is to divert from the mainstrean~ of vital health servi s the optometric vision care which the Am~riGan people need an upon which they depend. On behalf of your constituents who are served by the opt metric profession, I strongly urge that in reporting this bill you inco orate the 15 amendments which are attached. These amendments h ire but a single purpose ; namely, to include optometry in the provisions of the bill. Our profession is an importa4it segment of the healt com- munity. In the interest of the publi4's visual we~lfare its s rvices should be eligible to participate in the~growing area of grou prac- tic,e. If optometry is not specifically n~entioned along with m icine and dentistry, it will be ineligible to participate. Mr. Ohairman, there is attached to this statement a paper which was written by me in 1960 entitled "An Examination of Group Prac- tice in the Administration of Health Services." This monc graph was the outgrowth of the thesis prepared for my master's degi ee. I will leave it with you for your informathin. Permit me to express on behalf of t~ie optometric professh appreciation for this opportunity to stat~ our position. Mr. McOra~cken and I will be pleased to answer any questior desire to ask. (The amendments ~nd the monograpik referred to follow:) 5 you PAGENO="0093" DEMONSTRATION ~JITXES AMF~NDMENPS TO H.R. 925~, 89rrti Coi SPATEME~T o~ DR The bill, as introduced, is a~plieable siciaas and dentists'. The pui~pose o.~f I of `the bill also applicable to optom~trisI Amendment 1 : The title, Une 4, af "optometry". Amendment 2 : Page 1, lii~e 5, aft "optometry". Ameadmient 3 : Page 10, lii~e 3, site case of optometrists under `t~ie profes practice optometry in the StaI~e". Amendrne~it 4 : Page 10, 1~ne T, af "optometric". Amendment 5 : Page 10, $ne 8, ai "optometric". Amendment 6 : Page 10, lir~e 1Q, aft of persons licensed to practice optç~met Amendment 7 : Page 11, line 2, ai "optometric". Amendment 8 : ~Page 11, line 3, at "optometric". Amendment 9 : Page 11, line 4, "optometric care". Amendment 10 : Page 11, ~ine 5, s in lieu thereof the following : "o~tom all of said caree". Amendment 11: Page 11, ~ine 10, "optometric". Amendment 12: Page 11, ~ine 15, "optometric". Amendment 13: Page 11, ~ine 17, "optometric". Amendment 14: Page 16, ~ine 24, "optometric". Amendment 15: Page 19, l~ne ~[2, a: "optometrists". Li JRBAN DEVELOPMENT 679 D a ~ 0 r ~1 ~ r e S fi i~1 t I ~ ~ ~ ~;( La tb th be 1' t: , lsr Sassiow, SUGeESTED IN THE N N. HAFFNER 0 group practice facilities for phy- endments is to make the provisions word "medicine" insert the word word "medicine" insert the word word "or" insiert the wards "in the supervision of persona licensed to e word "medical" insert the word e word "medical" insert the word word "State" insert the words "or ~0 StRtO". 0 word "medical" insert the word e word "medical" insert the word he word "care" insert the words ut the words "or both" and insert are of a combination of any two or ie word "medical" insert the word fte word "medical" insert the word he word "medical" insert the word he word "medical" insert the word e word "physticians" insert the word PAGENO="0094" I. Introduction, Background and Organization It is import~nt to make a definitive dif- ferentiation between the concept of a clinic (and/or dispensary) from the term group practice. A clinic can be said to represent a type or form of professional practice which is organized as the result of, and through the cooperation of, physicians and other professionals who perform their serv- ices by themselves or with the aid or pro- mulgation of an organized lay group. A clinic or dispensary carries with it the con- notation that its services are used for the indigent, medi~al1y indigent, or very low income population groupings. This connota- tion is not a completely accurate one. Davis,' in 1927, analyzed reports of the economic status of persons attending clinics throughout the country and found that from 2 to 20 percent had the ability to pay for the services which were rendered. But, for the most part, clinics were organ- ized, in the traditional and legal sense, pri- marily for the patient grouping which was unable to afford payment for services. Although it has been indicated that clin- ics and dispensaries were to be regarded as similar, as in fact many are, in the history of their earliest developments there existed a differentiation in terms of the dispensary providing free or very low cost medicinals. However, in the last three decades, that differentiation appears to have been rele- gated to minor importance. Clinics, how- ever, still may refer to their dispensaries but appear to utilize the term pharmacy to a greater extent. Another connotative strain in the name *A theds submitted tcj the faculty of the Graduate School of Public Administration and Social Service of New York University in partial fulfihintent of the requirements for the degree Master of Public Administration. The degree was conferred. Dr. Haffner is executive director of the Opto. metric Center of New York. clinic is that of teaching, learnin~ peri~nental application. In a sensB, an independent clinic was for the education and training of t] or resident and for the young prs who wanted to continue his leai existed as an institution where es practitioners could serve the comiz donating their services. In turn, ceivéd a titled status which was as a mark of their professional sta ablli~ies. As a later consequenc afor4mentioned teaching functior deve'oped affiliations with hospita as a~ out-patient unit or as a servi~e unit. One of the outstan ampl~s of the clinic in its earliest f still ~emains today very much as i a half century ago is the Stuyvesa clinic (formerly the Deutscher Pol For the most part, clinics today an ated with hospitals as out-patient and are still utilized for the care cally ~ indigent persons of the con The ~otable exceptions are specialt; such ~as the Foot Clinics of Ne (podi~try), the Optometric Center York~(optometry), the Guggenhein rial clinic (dentistry), and the a divid*al mental hygiene, psychiat psychological clinics. It should be stated that even classical traditions of a clinic or gr vironment serving the poor, two ot jag exceptions deserve note. Tb the Vanderbilt Clinic and the Mayo If it were possible to get the facts w findtevery income group representec the ~aUents of clinics. At the May~ the Ivery wealthy as well as many pooh can be found. In many other ph tie,4s will be found from the sn soci$lly significant groups of the w wh&pay for what they believe to be vant~ages of institutional practice.2 The term group practice may be and ex- istorical utilized te intern etitioner fling. It ;abhished unity by they re- regarded bure and of the clinics ;s either pecialty ing ex- rm that existed it Poly- Tchinic). associ- acihities f medi- munity. clinics ~ York of New Memo- any in- nc and or the mp en- tstand- ty are Clinic. should among Clinic, of the ces, pa- all but tll-to-do the ad- defined 680 DEMONSTRATION CITIES AND tRBAN DEVELOPMENT [From the Optometric 4reekly, 1963} An Examination of Group Practice in the Administration of Health Services iUden N. Haffner, O.D., M.1 Optometric Center of New Y New York, New York ark PAGENO="0095" I DEMONSTRATION C~TI~S A as the rendering of profession~l services v~ by several members o~ the healt1~ cai~e die- a t ciplines in a unified structw~e deligned for d~$ patient control and operational efficiency sOp All too often, group practice isapplied ti tO define the situation in which sei~eral prac m titioners share a professional b~ildii~g bu to their contact, one with the other, is lhnited sè~ Essentially, this latter situation is n~thin~ t~ more than several practitioners occppyin l~ quarters in the same building~ The im vi portant and essential element in ~rue grou (t~ practice is that the patient is s~ibje~ted t Ui~ a multi-disciplined approach for the ~rofes ~ sional services which he receives. The ter: tIl group practice connotes that t1~e p~tien lu who receive its professional s~rvices ar able to, and do, in fact, pay for those ser - ices. Thus, with the exception o~ the facto 8~ of economics, it may be said th~t there ar striking similarities ~ between a clii~ic an ~ a group practice. The latter, in ~ts ~evelo: ~ ment as a potent present force~ in the a ~ fti ministration of health services, is co: ~ sidered a consequence of the i~isti1~ution 1 c~ concept of the clinic applied to patients i ~ other than the indigent group. j One further term is worthy ~f definiti a in this discussion. Health center has h 4 t many varied meanings. Frequently it w S used to designate a hospital complex or a clinical complex applied broadly to co - munity health problems, both therapeu c and preventive. Oftentimes, one aspect f a community health problem had its orga: 1- zational care in a health center. The N w York Milk Committee in the field of chid health and the experimental New York City Department of Health Lower East Side health center program for tuberculosis (by Commissioner S. S. Goldwater) are out- standing examples. As the levels of mass health care steadily improved in this coun- try during th~ last four decades, the hea th center concept was altered. In. effect, h resulting benefits of coordinated and org n ized solution to the health cpfiditions o large segment of a comm~yuity in the 1 i income or indigent grouyh~gs has been ~c tended toward the co~eept of group pr c tice. The Des Moin~s"llealth Center (Ioi a and the Judson I~álth Center (New Yo k are early (c. 1920) organizations of gr u practice~pplied to community or large ~ is trict populations providing comprehen iv health services, on an out-patient ba i under the aegis of. a formed organizat o structure and with professional service o physicians, dentists, optometrists, nur e social workers, etc., on a part-time or f il time salaried basis. Important as part of the Judson He it i Center program was an extensive su e - RBAN DEVELOPMENT :1~ and integrated home care program as tal adjunct to the center visits. In his ussion of the early history of the Jud- Health. Center, Davis3 speaks of visits he "clinic" as well as home visits. One t conclude that while that medical his- an took great pains to proclaim the rateness of structure and function of health center concept, he repeatedly 3ed into paragraphs which were con- ~ing to the~ reader that the health center S rose by another name) was a broader ifestation. of the institutional concept he clinic. One of its chief differences is t it more broadly applies itself to the ltb needs of the community. A second, . perhaps more important difference is degree of centralization of the record tern. In a single type of administrative *1:, there exists centralized patient record trol. Most clinics (as well as the Judson alth Center) maintain central record Lction. Where the health center is a fed- te type comprising many social welfare, ic and health groups, the record system decentralized. Clearly, the former pro- ~ed coordinated technical and health in- mation and has withstood the test of a. io~Economk Trends ;~ Health Care Specialists in public health agree that the cial institutions, as they have been known the ~ past, are now witness to a broad sed sociological change as they pertain to e concepts of the administration of health rvices.4 This is, in part, a reflection of anges in national social attitudes and, at e same time, the result of great advances the health sciences with their attendant agara of technical complexities. For, in- ed, the private practitioner in "solo" type actice, who was the direct. participant in e "barter" for professional services with e patient whom he served, is representa- ye of a theme. which is on the wane. ~t is situation which is being further modified aily. The three main forces or trends in health are may be identified as prepayment, in- urance underwriting and the interven ion of the io-called "third party" and, nally, the trend toward centralization of acilities. Group practice is an expression f this latter movement. Any discussion of hat form or environment within which ealth services are rendered should be un- erstood in. terms of its development, its elationship with the past and the reasons or the present state.. While it is beyond the cope ~ of this paper to concern itself with he historical and socio-economic forces vhich have blended to produce these 681 s~ S p ¶1 PAGENO="0096" changes, they~ must, at least, be noted. ~.Fhe great depreS~ion of the 1930's which so profoundly cI~anged the course of social re- lations betwden the government and its citizens can be set high on any list. It ut- terly destroyed the old ways and ushered in the Rooseveltian expression of "social security." From that historic moment in October of 1929, the "crash" of past in- stitutions has resulted in an echo of change, albeit unabated, through three decades. The idea of budgeting for health care through prepayment came into being. Never again could the men and women of the United States~ afford "not to afford" to pay for health care. But the budgeting phenomenon wias only one aspect of prepay- ment. Beadsle~r Ruml introduced "pay as you go" to finance the war effort and the notion of making regular payments to- ward an anticipated cost was applied to health economics. As long as the cost of medical care was within the budgetary capacity of the rank and file citizen, each recipient of services could, more or less, negotiate for his pro- fessional needs~ But the cost of remaining healthy began ~ to climb markedly during the last three decades. The advancement of medical knowle~dge, the resultant accelera- tion of medic*1 specialization, the rapid growth of advanced methods applied toward care in hospitals-all contributed toward the need for insuring against the financial strain of physiological catastrophies. People were fearful of the loss of what could amount to life savings as the result of a serious illness. Modest bank accounts ac- crued through t~ie efforts of many years of toil could be wiped out in a matter of a few short weeks. And so, persons in oc- cupational groups or other entities banded together to pool their risks and to insure themselves mailily with hospitalization, it was not very loi~g before the extent of the comprehension of professional services be- gan to grow in scope and depth. Thus, comprehensive health care insurance pro- tection through the so-called health ex- pense indemnity corporations5 have been rising at a faster rate than all other forms of limited or partial health insurance protection.6 The last twG decades will surely be re- corded in the alinals of public health as the golden age Of great medical progress. The physician, a~nd his counterpart in the professions o~ dentistry, optometry and podiatry, has reached a pinnacle of social status as an important and integral part of his community as a result of the historic and dramatic advances in the knowledge of the health sciences. Every practitioner has as~nned the mantle of "the pio eer" and, tr4y, the "frontiers" of health care have beetn pushed back. Two very important cor~equences of this have been the enor- mo~is rise in practice specializat on and a con~mensurate growing interdepe dence of all ~health practitioners. An exte sive dis- cusSion is not necessary at this point to conl~lude that group practice (ra her than "solo" practice) is, therefore, i keeping witl.i the trend which, through its func- tional organization, permits a eady ex- cha~ge of multi-disciplined medi al know- led~e for the greater benefit o the pa- tiez4. As with any forces prevale t upon a subject, it was a natural conse uence to adapt the favorable aspects of prepaid gro~p health insurance to the pro essional seridces rendered in a group pr ctice in ord~r to produce an environment and sys- tem for the administration of he lth serv- ices~ which is enjoying a rapid e pansion throughout the country. The H alth In- surance Plan of Greater New ork (so- callOd H.I.P.), the Ross-Loos Cli ics, and the ~aiser-Permanente Health Ce ters are outstanding examples. Bluestone7, in 1947, disc$ssed the placement of a gro p prac- tice ~unit in a hospital environm nt as a conc~pt which gains for the hosptal, the prof$ssional man and, most decid dly, for the patient. He analyzed the hosp tal as a grout practice environment and easoned the sLdvocacy of a "marriage" bet een the hospital and group practice. It goes without saying that group me ical care in hospitals on this basis, viewed sim ly as a matter of hospital economics, will h sten the patiei~ts out of wards and into pri ate and semi-*rivate accommodations. One ca not find fault ~with the enthusiast who goes s far as to urge that the future hospital be planned arouifll such a sound nucleus as this. . ~ . Group practi~ will bring the practitioner loser to the h9spital and both will benefit by the as- sociat*on.& It ~s noted that the Health In urance Plan ~f Greater New York establ shed a demoiistratiôn group practice at Mo tefiore Hospital in the Bronx which has grown and pPospered during the past 14 ears. In any discussion of health care rends, one cdnnot avoid concluding it wit notice of the~increasing role of the federal overn- meat ~n both the provision of publi funds and t~e extension of new progra s. The Unite4 States Public Health Servi e, the Natior~al Institutes of Health, the edical Servi4 and Health System of th Vet- erans Administration are all importa t. The Foran~ legislation, the Federal Em loyees Health~ Benefits Program, the Hill- urton Act, and the Humphrey Plan cannot be un- derestisnated as to their importance in in- fluencing future developments in group 682 DEMONSTRATION CITIES AND URBAN DEVELOPMENT PAGENO="0097" 683 ION CI~IES AND U BAN DEVELOPMENT practice and testify to the very heavy corn- pen ation reports, patient payments and mitment of the federal government. If the gen ral records control comprise the busi- pattern of the last two decades represents nes " of running a practice. Group practice, a hint of the future, it is that the role of to large extent, frees the doctor from the federal government will steadily in- the e details which so often, in solo prac- crease and, if it does not already exist, be tic , interfere with his professional duties. the dominant force in the administration It an be said, therefore, that the group of health services.9 eff rt ultimately represents a greater ef- ficency in that the highly trained practi- Advantages and Disadvantages of Group Practice tio er expends the majority of his effort In previous paragraphs, reference has in the task for which he was so expensively been made to solo practice as that i ed cated and so exhaustively trained. which administration of health services w s In group practice, a ready ability for the rendered by a single practitioner, in h s p1 nning and budgeting of time of pro- own office and independent of contact wi h f ssional personnel exists. The value of other practitioners (as far as the patie t r gular and periodic vacations is well was concerned) . Group practice, therefo e, k own to persons whose lives bear great becomes the alternative to solo practice a d r sponsibilities and whose work requires represents the cumulative expression of g eat emotional and intellectual concen- the professional services of several pr c t ation and organization. The solo practi- titioners. In 1951, Hunt and Goldst i t oner is hard put to plan his time. Time to arbitrarily assumed three practitioners a ttend medical conferences and to under- representing the minimum number ne es ake post graduate education and training sary for joint professional efforts to b re important to keep the doctor highly considered as group practice.1° `tuned" in his professional capabilities~ Perhaps the outstanding advantages f he group practice makes this possible group practice, as opposed to solo prac Ic , hile the solo practice effort must virtu- is that the group environme~it offers t e ally come to a halt when this occurs. In the recipient, the patient, a hi~her leve n former, there is no danger in losing pa- the quality of professional care bec u e tients, or income, or of an interruption in of the provision of the grotip ~acilit n the ability to render essential services to which. there is a more ready consulta i n, the patient. formal and informal, among practitio e s. The group effort represents, to the pa- In addition, there is an easy access to 1 b- tient, an ability to gain more health care oratory services. It follows that there st for the same expenditure of monies. The be, in a group practice, a more liberal a il- economics of group practice, in later dis- ity to do better work by the remov 1 of cussions, is shown to be a more economical restrictions, self imposed or otherwis , p- form for the rendering of health services. on seeking laboratory analyses and i he Group practice enables a smaller commun- matter of consultations. The true nat r of ity, not otherwise able to support the ser- a professional man, in its more idea at- vices of a specialist, to utilize specialty tern, in receiving appreciation and s is- services by sharing them with group prac- faction because of the environment f in- tices in other smaller or rural communities. ter-disciplinary professional coope a ion Thus, by an efficient organization of the is an important advantage. In short, h at- medical effort, there can be a "pooling" of mosphere of cooperation of members of the the services of a specialist. This type of an health "team" is conducive to a b tter arrangement also insures that the specialist functioning doctor and results in b tter will be rendering his unique services and care for the patient. avoids contributing professional acumen It would seem logical that from th g oup which a doctor with lesser training can environment and the group effort a r atei contribute. This enables the patient to professional development and matu it re- acquire more and better care from group sulted. It can be concluded that t i oc- practice than from solo practice. curs because of the close and con i uous As a result of a long tradition and Holly- contact among professional personn 1. As a wood characterization, the doctor is con- corollary consideration, the group n iron- ceived as the servant of the people, avail- ment produces an easy atmospher ex- able to their needs at all hours, in every change discussion of new conce t and kind of adverse situation, weather not methods reported in literature. withstanding to the contrary. The picture An almost universal dislike of da - o-day is one of the doctor serving long and gruel- financial administration of the o e ation ing hours. An objective analysis of person- of a practice is expressed by th octor. nel function finds that productivity, crea- Forms, statements, liability repor s corn- tivity and efficient effort does not occur 60-878 O-66--pt. 2-4---7 PAGENO="0098" 684 DEMONSTRATION CITIES AND ~tRBAi~ with prolonged working hours. The pro- fessional man is no exception to this. Group practice provides a medium within which a regularity of daily and weekly working hours can be attained with the practice always having coverage. It en- ables the doctor to be more efficient, alert and productive during his work schedule and enables him to enjoy a private life which is so often sacrificed in solo practice. This latter point should be emphasized as having considerable importance in the con- sideration of th~ expenditure of human ef- fort. From the standpoint of utilization of personnel, there can be little argument against the concept that group . pi~actice more efficiently~ utilizes the talents and efforts of its practitioners. The struggle of the new, young practitioner "to get on his feet" is well known in all the profes- sions. By the assimilation of new practi- tioners in the group, this "lean" period is reduced or eliminated. The young practi- tioner enjoys an Immediate higher level of income, and his technical skills and abilities are not permitted to waste for lack of use. From the sta~4point of the length of a career in the health disciplines, an average income is enjoyed ~y the practitioner in the group as opposed to the solo practitioner. This will be discussed more fully in later paragraphs. Suffice it to state that under the tax structure existing today early low levels of income cannot be balanced with later high income levels. The tax payer is at a disadvantage at both ends. A mod- erately rising income, beginning from a relatively high initial base, constitutes a favorable cumulatlv~e income picture when reasoned from the ~tax limitations. In ad- dition, a group carties the ability to pro- vide such import&tnt fringe advantages as insurance, liability and retirement which have financial overtones not within the scope of the solo practitioner. As the economic trends of health care gravitate more and more toward prepay- ment and insurance underwriting, statisti- cal evidence indicates that the services which are being underwritten are becoming increasingly compreitensive in . scope.'2 Group practice for the rendering of com- prehensive professional services lends it- self most readily to th~ prepayment and in~ surance plans. Thus~ the economic principle, and the actual facilityt and organization of; the health services can be "married" as two mutually convenient concepts which fa~ cilitate and enhance one another.. From the standpoint of the level of pa- tient,care, the group practice facilitates the adoption of standards for patient care not readily adopted by the solo practitioner. Al- tho~,gh professional eth~. cisI~i of the work of one doS. the group practice provides tht. for critical evaluation of the wi members of the group. Little argu e~ be advanced to alter the fact tha the ~. tient and the doctor are the benefi iaries ol,% this "group scrutiny." Because th "total' ~ person will be treated with careful records which are centrally administered, . an ac- curai~ health history becomes possi le. * The matt4r of uninterrupted continuity of care is ant important factor adding to the ad- vantakes of group practice. It len 5 itself to fa4ilitate higher professional st ndards for tI~ patient. It i~ interesting to note that in study by th~ United States Public Healt Serv- ice'3 of 22 medical groups involvi g 252 physicians, a questionnaire survey r vealed that approximately 75 percent of a 1 phy- sicians~ held that the chief advant ge of group ~ ractice involved a higher qua ity of health are for the patient~ This hig mar- gin of greement on the leading adva tages of gro p. practice by the physician sur- veyed I further advanced by the fac that the ne three leading advantages hich they ch se also involved the quality of pa- tient ca e. Altho$gh extensive statistics on th lon- gevity a~nd stability of group practic are not available, those available statistic do point to~ a greater stability oi the g oup environirlent and a greater patient r ten- tion tha4 that of solo practice. This, rom an instit~*tional standpoint, must be c ar- acterizedtas a decided advantage in patent care. The~great surge in group~practiee has Oicurred ~lurhtg the past generation. Perhap$ the leading disadvantage of group pra~itice, or at least the one whic is most ofte~ Vocalized, is the question of he doctor-patient relationship. Many ph si- cians and patients contend that group pr c- tice tends to be more impersonal, less i ti- mate than the relationship between pati nt and solo practitioner. Others answer t is argument that with adequate medical a d health hist~ries the less "personal touc permits a ~ore objective evaluation of t e patient's lljs. This latter group points o the armed forces medical service as repr - senting a l~gical example to counter~ th s argument. .pf the same study previousi mentioned, tie physician contended that th lack of intifliate and personal relationshi adversely affected the quality of care, bu rather that the relationship "seemed to be" desirable. Inbreeding of professional views tend to be a disadvantage of group practice. I would be log$~al that there would be a natu PAGENO="0099" DEMONSTRATION CITIES AN uRBAN DEVELOPMENT 685 ral inhibition of professional contacts out- rograms of preventive care, as well as side of the group. The higher form of the t erapeutic care, one would expect a higher group organization structure, the less c nsultation and laboratory rate. Physi- would be the likelihood of extensive outside &ans in group practice argue that earlier contacts. In addition, the general medical efinitive diagnoses are made possible by community has. in the past, exhibited an t ese procedures. However, those who unwarranted animosity toward the niem- a gue that such testing and consultative bers of groups further lessening the proba- a rvices are unnecessary readily admit that bility of outside professional rapport. It ere they in an environment where such should clearly be noted that the result and s rvices were "at hand," they, too, would net the cause is listed as a disadvantage. u ilize them to a greater degree than their The result is the inbreeding of medical p evalent utilization in solo practice. philosophy and viewpoint. That a group It should be remembered that the codes might become "stale" is a situation which ethical conduct written for members of should be avoided. Thus, the greater need t e health professions were done so with exists for post graduate training and at- t private, solo practitioner in mind. No tendance at medical conferences. The latter i ividual doctor in his professional corn- tends to be an effective check against the m nity would stand high in the esteem of former. hi peers were he to advertise his services; It was noted that the matter of profes- so icit to enlarge his practice or gain the sional cooperation and closeness of action Pu licity of the communication media. And, were regarded as decided advantages of ye , the group practice in its larger and group practice. However, in the personal m re complex forms (HIP, Permanente, day-to-day relationships this advantage Gr up Health Cooperative, Ross Loos, Rip might be lessened by the internal friction Va Winkle, etc.) all resort to these tech- within the group. The rigid education and ni ues mainly to approach occupational training of the doctor demands of him a gr ups which might be "sold" the health unique kind of individuality and independ- pr gram offered by the group practice. The ence which most often becomes deeply in- qu stion of unethical conduct as a disad- grained in his personality as well as in his va tage should in fairness be listed pend- professional approach. It is the personality in a re-evaluation of the ethical codes in factor, more than any other, which accounts th light of present day group practice. for the possible bickering and internal ince the emergence of group practice squabbling. That this must be kept to a as dominant force in the administration minimum for the benefit of the patient and of ealth services, the matter of access to the success of the group is abundantly gen ral hospitals by the members of the clear. It might also be noted that the gro p has been the subject of severe and schools and colleges should modify their e ed controversy. Sometimes this con- approach to emphasize the importance of ro ersy can become so acute as to spill the group endeavor. ~ ut n full display on the front pages of our Another disadvantage of grou~~ practice ew papers.'4 Some physicians contend that is that there is a restriction of th~ pat~ent's nly the hospital environment offers the opportunity to choose the services of a con- est opportunity for the advancement and sultant. While on the face of it, the fore- nte change of professional knowledge and going statement is true, it should be noted ot he group, This group contends that that the doctor's choice of consultant is nly the hospital is the place for the high- reasoned to be vastly superior to that of t uality of patient care. "That members the patient. The professional needs of the f a group practice should be denied hospi- patient can be more objectively and scien- t 1 p ivileges is unthinkable from the pub- tifically evaluated by the doctor rather than 1 c's oint of view."15 In prior discussions, by the patient. The patient is not competent t e oncept of group practice attached to to judge his professional needs in consult- a ho pital environment was held to be a ing services. d sti ctly favorable situation.'6 One must As a possible disadvantage of group c nd de, therefore, that the relationship of practice, the argument has been rendered t e eneral hospital and group practice is that patients are subjected to a much a dis dvantage but that its cause lies solely higher rate of consulting services and x-ray ithi the province of intra-professional and laboratory analyses than for those r ati ns. That the effect is a subject for patients who are treated by solo practition- p bli concern is well documented. ers. The statement is statistically correct Co sidered as a decided disadvantage to but implies that these consultation and t e v ry well trained specialist in group laboratory analyses are unnecessary. To the p acti e is that his income level is decidedly degree that most groups are engaged in lo er than that of a solo practitioner in PAGENO="0100" I private practice. Statistical evidence bears this out as a truism. Alterations in the economic structure for such specialists would seem to be iii order. A disadvantage of a group practice might be listed in terms of the relatively high capital construCtion costs of the group facility. In a 1a~er discussion of the Hum- phrey Bill and other legislation, this weak- ness will, for the most part, be met. While the opposition of organized medicine to group practice still exists, the resolutions of the House of Delegates of the American Medical Association have during the past five years lessened'7 to a situation of recog- nition and acceptance (but not quite ap- proval). Weinerman,l8 in 1951, held that other weaknesses of group health plans were shaky actuarial basis and relative high cost of premi~uns for the lower income families. It cai4 be readily pointed out that what Dr. Weliterman refers to is one eco- nomic vehicle for the group practice and should not be attributed, as he holds, as a disadvantage or weakness of group prac- tice. They should, rather, be considered separately. The last enumerated disadvantage will conclude this discussion (because it is po- tentially the most serisus) . There is always the danger that in modern group practice the patient wiji become sectionalized among a battery of specialists who will fractionate his ills and h~s care. Clearly, to overcome this potential! danger requires strict ad- herence to an administrative arrangement whereby the patient is assigned to a gen- eral practitioner who will serve as the nu- cleus of the group team and who, as a consequence of that position, will be as- signed overall responsibility for the pa- tient's management and care. It is the opinion of the writer that the ~- hopes of better and more efficient adminis- tration of health services rests in the group practice rather than the solo practice and that this vteMr is adequately supported by the discussed~ advantages for surpassing the disadvantages. Types of Group $actce The simplest form of group practice is one which includes three physicians. Its structural-economic arrangement may be as a single owner, a two partner-owner arrangement or all three as a partnership. It is generally accepted that the minimum number of professional personnel neces- sary to consthute a group is three; that two represelit associates in essentially a solo practice. In a 1946 survey19 of the num- ber of cha~acter of medical groups, of 368 groups, ~nore than three-quarters of the 686 DEMONSTRATION CITIES AND hR AN DEVELOPMENT group~ were essentially partnershi s with more than half of these being partn rships with employed physicians. Of t e 368 groups, only 36 or less than 10 ercent repre$ented single owners. Of th total numb~r of groups 93 had part-time doctors whiletthe remainder utilized full-ti e per- sonnet. The median number of f 11-time physi~ians was 4.7 with a mean of 8 4. Four of th~ groups included one unit w th 250, two *ith 50, and one group with 8 fuU- time physicians. The preponderanc of the smallfr groups were in cities wit popu- latioz~s under one hundred thousa d. It is well known that corporate forms of pro- fessi~nal practice are outlawed i almost every one of the 50 states. Nevert eless, 3 percent of the groups studied were eported as 4orporations. However, some of the corp~rations referred to incorpor tion for the 4wnership of the physical as ets (in- strui~ientation) and facilities ( uilding, land). When the economic pri ciple of prep~yment was adapted to group practice, the ~corporate issue as a legal question assu~ned greater significance. A dscussion of the legal implications of corpo ate pro- fess~onal practice will be underta en later in this presentation. Af second type of group practic involves a situation in which all personne are em- plo~ees of a sponsoring organiza ion such as tan industry. Since the a vent of Wo*ld War II, industry-labor ba gainings hav~ centered about the questi n of the so4lled fringe benefits. This wa especial- ly ~o during the period of the war and im~ediately afterward when a age level wa~ regulated by law. As long as wages we~e fixed, labor argued for mo e benefits fort the employees outside of or "fringed" to ~vages. One important one, p rhaps the most important, was health care. ne mani- festation of the fringe pheno enon was an~ industry sponsored (emplo ` er spon- soi~ed) health program. The healt program wa~ incorporated and was con idered to befincident to and necessary for the main- te*ance of a high level of industr al efficien- cy~ All physicians and other hea th person- ne~ were employed, either full or part-time, ar~I initially such programs wer limited to thb employees. In addition, the s ope of the prbfessional services rendered as limited tojthose specialties which involv d efficiency ai~d safety. One of the earlies and most siiccessful (and most copied) pr grams was tI*at of the Sperry Gyroscope C rporation2° ow Sperry-Rand Corporatio ) in Long I and, New York. The essentia concept of t is industry sponsored group ractice was t be an adjunct-supplement t the health p ograms of each employee ra her than a PAGENO="0101" I 687 DEMONSTRATIOIS~ CITIES AN URBAN DEVELOPMENT substitute for it. The program very heavily utstanding example of this type of prepaid stressed preventive care with annual exam- roup practice. inations, immunizations, X-ray and labora- A fourth type of group practice is one tory analyses, as well as industrial safety hich utilizes as its focus of centralization and protection. One of the most important hospital setting. It has already been aspects of the program was that which oted, in a prior discussion, that the hospi- concerned visual efficiency and eye safety. al may be considered as a valid group From the beginning, the program utilized ifort. This hospital may either be volun- the services of optometrists2' for refrac- ary or proprietary and is determined by tion to provide for maximum visual effi- i s force of sponsorship. An example of ciency for the many exacting and highly t is form of group practice is the Webb complex tasks performed by employees. ommunity Health Center and Hospital23 From the standpoint of industrial safety, hich, through the joint action of the the program was an outstanding success22 eople of the township and the health per- and has been studied and adopted by a 5 nnel, utilizes a small community health host of industries throughout the country. f duty. This means of hospital centered From the standpoint of structure, it should g oup practice, oftentimes, is beneficial for be again noted that industrial group prac- t e people of rural communities who lack tice is employer sponsored, essentially stress- e en minimum hospital facilities within ing preventive and safety care, a fringe t eir immediate environment. benefit (no cost to the employee) , and it is There has been no discussion of labor incorporated by the industry with all the 0 union health centers to this point. From personnel employed. t e point of view of classification of type, The third type of group practice like- i can be placed with a cooperative with wise employs its health personnel, is in- t e exception that ownership is by the corporated and has as a sponsoring organi- u ion or its health and welfare fund. Es- zation a consumer cooperative. This means se tially the same in terms of employed that the health program is sponsored do tors, corporate structure and ownership, by the persons who are the recipients of th main difference is that the salaries, the care. The labor sponsored health cen- building and equipment of the health ters, former cooperative health programs, ce ter come generally from joint con- teacher guilds, etc., would be examples tributions of labor and management, and of consumer cooperatives. Unlike an indus- ad inistrative organization is directed by try-employer sponsored health group (in la or for both groups. In this case each which there existed no cost to the recipient re ipient of professional care is the mem- of the professional services-the care rep- be of the union (or dependent) and the resenting a fringe benefit) , a consumer co- un on owns the facility. In the case of the operative is prepaid group practice pro- co erative, each recipient of the care is a viding comprehensive health care and is me ber-owner. However, the operation of sponsored and fostered by the consumer- the health program as a group practice is members. A health cooperative attempts to ess ntially the same in both cases. furnish adequate health care to thousands eserving of mention, as a type of group of families at costs they can afFord. Three pra tice effort, is the Armed Forces Medical basic principles apply. The first is economic. Ser ice providing mass care through a The insurance principle involves the de- sat lute system of group practice. The term termination of per capita costs of care for sat llite has been used to define the place persons in a group and arranging such of t e general hospital as the center of the costs in regular monthly payments easily Y5 m with "feeder" dispensaries and budgeted by a family. The second princi- lin cs surrounding one geographical area. ple is that of financial administration in- t ~ interesting to note that the group volving consumer cooperation. The persons ra tice is well integrated into the hospital and family in the cooperative have banded yst m. This principle of satellite structure together to meet their health bill by a group as utilized by the United Mine Workers purchase of care at a health center which en ion Fund which operates a system of the cooperative owns. Membership fees and lini s and dispensaries, all diagnostic cen- monthly budgeted payments meet capital ers "feeding" to general hospitals. In both construction and equipment costs and pay ase the health personnel are employees, for doctors' salaries and for maintenance nd he overall legal status can be consid- costs. The third principle is that of group red corporate. practice involving a team of health person- nel employed and performing their services L gal tatus of the Corporate Structure of Group Practice in a centralized health facility. The Group H race R. Hanson24, a member of the Health Cooperative of Puget Sound is an in esota Bar, exhaustively studied the PAGENO="0102" -I legal status of group health plans and group practice and concluded: All in all, group health plans now have sufficient legal approval to encourage their widespread growth. The same can be said for any other method or experiment which is truly non-profIt, operates by a service motive, and strives only for more distribu- tion of good medical care. The courts tradi- tionally have èhown great concern for the public health, and by their decisions have indicated grea~ impatience with any interest standing in th~ way of its betterme~it. It should be1 noted at once that when one speaks of a~group health plan it almost always means the financial structu1~e and mechanism with group practice as the ser- vice base. The conclusions of legal decisions that relate to group practice have become the base upon which future determinations will be made. The first established principle is that the health disciplines (medicine, op- tometry, dentistry) are emphatically pro- fessions andliøt trades. Their responsibili- ties, educatio~ál and legal bases are sound, unmistakable ~8nd recognized. However, the business aspects of public health are not dissimilar from other business and the statutes applylng to the latter should also apply to the former. Such statutes hold that there shall be no restriction of business or competition by the actions or agreements of others. These statutes prohibiting the curbing of competition are embodied in state as well as federal laws. A second established principle holds that a consumer4~doperatjve is not engaged in the praetic~ ~ of medicine when it hires physicians, b~ salaries, to work hi health centers. This principle extends only to non- profit consumer groups specifically organ- ized for thaV purpose. It follows, as a corol- lary, that when there is such a cooperative arrangement the physician still retains all professional responsibilities granted him by the law ufider which he was licensed to practice. It follows, too, that non-profession- al or lay direction is entirely legal. The California courts have held that in com- paring a Bhte Shield plan (controlled by doctor-metnb~rs) to a local plan (patient- member con$rolied) from the standpoint of law, both lare legal. Considera$le controversy developed in the medical profession concernii~g doctors whose servides were rendered in group practices in which group prepayment plans formed the economic base. Because such health programs were successful (and in the opinion of the writer, for no other reason) the controversy involved the group doctors against thoSe in control of the local or county medical society. Many cases were 688 DEMONSTRATION CITIES AND U ~ AN DEVELOPMENT recor ed in which physicians were held to be u4ethical and guilty of unprof ssional conduct by their association with Ui group and were subsequently expelled f om the societty. The courts have held that a edical society is within the framework of its proper role when it concerns its If with profeSsional service. Expulsion as conse- quen~e of the "business side" of ractice, that ~s, participating in a group p an, was held tnot to be a breach of pro essional ethic~. Further, a medical society as held to *ercise unreasonable and a bitrary powefr when it so acted. When a professional man is emp oyed by a noh-profit corporation, the cou ts have held ~that the doctor still retains ull and complete responsibility for the pro essional service, that it cannot be, in any wa , trans- ferréd to the group or the e ployer. Furl~ier, the courts have held hat the professional man is more than ju t a sal- arie employee but, rather, an md pendent cont actor of the services for w ich only he ( nd not the group) is uniquel trained and pecifically licensed. P rhaps the most far reachi g legal deci ion which advanced and soli ified the stru ture of group practice was one that affir~ned group medical practice s a rea- sond~ble alternative to individual practice. Thel principle was established by t e United States Supreme Court in 1943 25 Other decisions on lower judicial levels ave held to 4 similar position. Tt is very i teresting to 4ote that no court, to which th question wa$ brought for judicial review, has held othirwise. ¶1~he courts have held firmly th t corpor- ate!practice is illegal, but the co porations mat' arriinge with doctors to re der their ser~rice under the auspices and t the be- qu~St of the corporations. Where however, a b~usiness or economic conflict ight exist which could interfere with the p ovision of good professional services, then such ar- raflgements between corporation and pro- fes~ional personnel are illegal. Th s obvious- ly ~would not apply to the "not or profit" coi~porations where financial re ard could no~ be a motivating factor. w then becomes clear that the legal st4tus of group practice, eithe by itself on in conjunction with prepay ent health prfrrams, is sound and well est blished. It ~s ~ equally clear that a profes ional man wfio engages in this type of pra tice is not and should not be a lesser me ber~of the medical community. The establ shment of thfe foregoing legal conclusions h s removed a !slgniflcant barrier to the mor extensive d4velopment of group practic . In some w ys, they have added impetus toward its PAGENO="0103" 689 DEMONSTRATION CITIES AND URBAN DEVELOPMENT growth by providing a legal status ot One further factor is deserving of note heretofore contained in statutes. a d that is that the large group health pro- Stability of Group Practice ams such as HIP, Rip Van Winkle, Group In an attempt to determine the longevi y ealth Cooperative, etc., all have a wide of 98 groups studied in 1947, Hunt a d b se of popular support and institutional Goldstein26 found that the mean age w 5 ~ anding in their communities. With the 19.9 years and that the oldest existi g a quisition of land, property and specially group practice was founded in 1904. 0 b ilt facilities, their stature and importance valid statistics were available to indica e h ye increased. Truly, then, the group prac- the longevity of dissolved groups. ti es of the fifties have become institutional The mean age of four voluntary non-pro t ~ ces in the civic affairs of their corn- hospital groups in 1947 was 28.2 year ; nities and, unlike the group practices o~ three industrial groups, 24.7 years ; f " f old," are much more than voluntary as- ~ ; 5 i~tions ?~ doctors. Some have received three consumer cooperative groups, 14 7 ~ cial legislative charters but most are years.27 " re to stay" by the power of their broad Reliable statistics in the number of grou b e. The writer would liken these group practices are not available although sever 1 h lth programs almost as semi-public agen- competent sources were sought by th ci 5 similar to the public authorities. They writer. Rather, the stability of group pra - ha e an institutional flavor with consider- tice may be defined by inductive reasonin ab e community support. from two points of view. The first describe Fun tional Organization of Group Proctice the very high rate of growth of grou he functional organization of a group practice. The United States Public Healt pr ctice may be viewed from several Service estimated the growth of group as ects. Definition of the placement of in 1946 over the existing number of group a hority and responsibility with the lower in 1932 as representing an increase of 5 1ev ls of delegated authority described will percent. The period to 1950 represented be outlined for each of the forms of the 100 percent increase in the number o org nization. Administrative and profes-. groups in 1982. The Group Health Institute, sio al officers and the functional branches in 1959,28 estimated the number of group of he various forms of group practice will practices at four times the 1950 estimate be etailed. which was 500 groups. It should also be a in every organizational structure, all noted that the United States Public Health aut ority and responsibility for the affairs Service,29 in 1959, reported more than 3,- of he group rests at the "top" of the 500 diagnostic and treatment centers, most str cture. If a group practice is owned by of which would be considered group prac- one person, quite naturally, the owner will tices. Suffice it to state that the growth of hay all authority, and delegations of that group practice, during the past 15 years, aut ority would be from him to the other has been exceptional and, from a sociologi- me bers of the group. The same would hold cal point of view, a significant trend in the for he partnership, be it composed of two administration of health services. or ore persons. The partners collectively The second viewpoint about the stability wo d hold and delegate authority. Fre- of group practice may be defined in terms quen ly, there is a senior-junior partner- of prepayment and insurance health under- ship arrangement and, in this case, the writing. These phases of health economics auth rity would rest with both. The dif- have represented dominant forces in public fere ce would probably relate to the finan- health activities during the last two decades cial emuneration of each and possibly the and have represented a natural consequence exte t of ownership. In larger groups of co- to apply these economic concepts to group owne s, authority of all the owners is often practice. The former has encouraged the deleg ted to an executive committee or growth of the latter. The great and de- polic committee. All of the foregoing monstrative group practices of the fifties, woul relate to other than non-profit prac- those which comprised the American Labor tices. Health Association and the Group Health In non-profit group practices, it is vir- Federation of America (now, both corn- tuall a universal truism that authority bined to form the Group Health Association woul rest with the group which fostered of America) were all, with very few excep- or sp nsored the health activity. In a vol- tions, representative of the application of untar hospital, a board of trustees or the aforementioned economic concepts to overs ers would exist. This board would, the group philosophy. These health pro- in mo t instances, be made up of a prepon- grams have not only grown in number, but deran e (if not all) of lay persons. An in- they have grown in size and scope. dustri I group would have all authority PAGENO="0104" 690 DEMONSTRATION CITIES AND U AN DEVELOPMEWP vested in amedical director or health direc- tor appointed by the corporate management. A consumer cooperative or labor health center would hatve all authority vested in a board of trustee$. As with any bther organization where a group effort e,cièts, every "team" must have a "captain" an~l that person is often the m~dical directOr. His duties would, of course, vary with the size and complexity of the group. In a small group, he might tend to be the business manager and over- seer of records. In a group of moderate size, the partners, co-owners, or even the executive committee might designate one, generally from among the group, te act as the medical director. In each of these cases, he would servecas the second line of author- ity insofar as ~t was delegated to him. He would represeijt the group, from a profes- sional standpoint, before the public. He would be the professional coordinator and the business manager. In the matter of equal co-owners, the medical director might serve as the chairman of the policy making body. With regard to the non-profit group situa- tions, the medical director, in virtually all cases, becomes the essential liaison with the lay supervisory or sponsoring board or, in the case o~f the corporate industry, as the liaison *ith a vice-president under whose respoti~ibility the health or medical group would ~ fall. The authority and re- sponsibility granted to the medical director under these circumstances would be far greater than in the former instances. This is because the sponsoring group or board of trustees are lay persons who must de- pend upon the wisdom and competence of the person whose special training and edu- cation permits this activity. In some in- stances an e~cecutive director may be ap- pointed. The functions of this office would be similar in nature to the medical direc- tor, especiall~~r if it were filled by a physi- cian. Howeiçer, there is a recent trend developing among non-profit group prac- tices for the retention of a lay executive director who would be responsible for over- all management. In this latter case, a chief of professional services would be responsi- ble solely for the professional aspect. When the higher position is the medical director or, in the case of the executive director, a physician, then the matter of business man- agement is fliost often placed in the hands of administrative assistants who are lay persons sp$ially trained in administration. Their respoheibility would include all finan- cial transactions of the group including the collection ~f patient fees and the main- tenance of financial records. They would superirise all office personnel, repare schedUles and be responsible for `house" main1~enance. It should be noted tha in the early jdays of group practice, the usiness man*er may have ranged from t e part- time ~auditor to one of the doct rs who "look~d after the money end." Wit the ad- vent ~f greater efficiency in hospita admin- istra$ion and the growth of medica admin- istra~ion as a field of academic im ortance, more and more groups are turni g their business and administrative man gement over ~ to lay persons who are speci lists in thesø fields. One would expect that the frac ionaliza- tion : of the professional disciplin 5 would depe~d upon the size of the gr up. The larg~r the group and the more di erse the area~ of specialization, the more 1 kely the dep*$,tmentalization would exist. F r groups whi4h are departmentalized, the would, alm4st without exception, follow t e classi- call~nes of medical specialization. o briefly state this, medical and surgical services would be grouped. Under medic 1 service would be internal medicine, pedia rics, psy- chi~try and psychology, cardiolog , derma- tology, * endocrinology, allergy a d, often, radiology and the laboratory. Th surgical sertices might include obstetrics nd gyne- coh$gy, ophthalmology and opto etry, oto- rhi4iolaryngology, general surger , urology, ort~iopedics and podiatry, and, ften, the dei$l department. In a hospita where a pat~iologist is present, he would ost often su~ervise the laboratory. Also, in hospital, an lanesthesiologist would rende his work un~er the surgical service. A ph sician en- gaged in public health or indus rial mcdi- chic would be under the medical service. Mention should be made of t ree other categories of personnel : nurse , pharma- ci~ts and medical librarians. Th organiza- tic~nal structure would generall place the m4rsing service under the mcdi al director ai4d the same might hold for the pharmacy. T*is is generally not true, how ver, for a hc~pital institution. The respon ibility for th~ medical library would be at of the a4ministrative assistant. While attending the 1959 me ting of the Gkoup Health Association of A erica, the w~1ter had an opportunity to sp ak to mem- bers of 36 representative grou s from all oi~er the country. It is almost a generaliza- tton that the group is the sole ossessor of i1~s facilities and equipment, th t the larger t~ie group, the more likely it w uld be that i$ owned its own building and yen its own l$spital. Because of the chang ng value of ~operty and the rapid rise in the cost of l~uilding and equipping a cent r for group !jractice, the meager availabi ity of sta- PAGENO="0105" 691 DEMONSTRATION CITIES AND URBAN DEVELOPMENT tistics would not be truly repr4entative of unique professional value to the group as the net worth of the groups. e ressed by the degree or extent to which ot ers in the group turn to or depend upon Economics of Group Practice-the Doctor hi professional judgment. The type of income of the professional s a matter of practicality, the length of man in group practice is dependent upon ti e that a person has been with a group the form of the practice. It may be derived w uld also be an important factor. The either from a division of the net profits or se iority system itself is based upon the by salary (or a combination of both). In fa tor of loyalty to the group, and it has a 1947, Hunt and Goldstein30 tallied income br ad basis in our economic institutions. distribution among 84 partnership groups Le gth of time with the group also has and found that 74 percent shared the pooled me fling in terms of stability and continuity net income among partners while t1~e em~ of the group and, thus, it is a second im- ployed doctor may have received a share of po tant reason for its being used as a yard- the net income over and above a salary. st k. Some 62 percent of large groups, as opposed he matter of professional experience is to 85 percent among the smaller groups, pro- an essential element which acts as a de- vided fixed salaries to members of the pro- ter inant in income distribution. The pro- fessional staff. The method or formulae for fes ional stature of a doctor is in part the division of monies ranged from fixed, det rmined by the extent of his experience. equal salaries and equal shares of net prof- Ho ever, even this factor is limited in that its to shares or salaries based upon the exp rience is considered important up to a relative value of the professional man to poi t beyond which it loses in importance. the group. That is, each of the specialties It c uld be stated as a generalization that might be assigned a "unit of v~ilue" and he ully trained internist with 10 years of the doctor paid according to th~ division xp rience is certainly more valuable than of net profits or by salary depent~lent upon he fully trained internist just out of his patient volume seen. esi ency program. But in making a corn- It is obvious that in group practice, with an on between fully trained internists, the exception of the very small groups in ne with 10 years of experience and the which income is divided with equity as the the with 15 years of experience, one foremost consideration, that the factors de- o d find little to base a difference in value termining income distribution should be o t e group. evaluated. Perhaps the uppermost consider- T e matter of formal training of the ation is the relative competence of the prac- rae itioner is an essential factor. The per- titioner. His ability to render consistently son who had residency training in a fine professional services would rank as s ecialty and who has passed specialty most important in income determination. oar examinations would have greater Unlike solo practice, the judgment of this alu to a group than the person who is factor would be made by a "jury" of his " res from internship." As a corollary fac- peers. There would be little doubt that this t r, ne might understand that the role of factor would have broad overtones in terms a experienced general practitioner must be of producing better professional care. As ~ eighed against formal training of a an incentive financial reward has consider- s ecialist in determining the value to a able meaning. In this case, financial reward g oup. Depending upon the type of practice, would have the added effect, and the more t e general practitioner's importance will important one, of elevating standards of b determined. In a group engaged in corn- care. p ehensive care with a broad spectrum of Perhaps the second most importa~it yard- s ecialities represented, the general prac- stick with which to determine income dis- ti loner could represent the keystone and tribution is professional value to the group b ckbone of the group with the specialties itself. In a predominantly adult-age patient ac ing more in the nature of consulting load, it is obvious that the pediatrician has sp cialists. In a well organized and properly less value than the internist. This is not balanced professional program, specialists only because of the lower patient volume w uld not engage in activity in which the but more so in terms of the infusion of pro- ge eral practitioner can adequately perform fessional leadership and philosophy. In any th same services. This matter of specialist group environment, one may expect to find vs. the general practitioner has been a leadership. In terms of professional care, so rce of very considerable controversy in it is the leadership and ability to be the th medical community, and it has over- "guiding spirit" which also contributes to to es in health care which has a multi- income determination. It can also be ex- dis iplined base. pressed in terms of the individual having a nother factor in income determination PAGENO="0106" would relate to the extent to which the older practitioner could still maintain a patient load. To put it another way, how would the older practitioner be paid when there is a decrease in his patient load. It would be expected in the larger groups that a paid retirement system would be in effect which would cushion the loss of Income of the older practition~r. As the converse factor, one would consider the quantity of new pa~ tients seen by a practitioner. This would be especially applicable in terms of aesigned work loads to the general practitioner. Given a group of general practitioners, the assignment of numbers of new patients would be a determining factor. Often, the doctor may perform work for the group as an adjunct to another position be may have outside of tile group and, therefore, pur- posely limits his work load. The type of~specialty is also a determin- ing factor in ifricome distribution. The car- diologist in a large group would be paid a higher sum than wotild the general prac- titioner or, ifldeed, the internist or pedia- trician. The neurologist is paid on a higher level than is the dermatologist. But the specific formula is determined by each group. The book value of the work done by the practition~er would, also, determine the income distribution in terms of volume and comparable cost in private practice. In the preceding paragraphs, the matter of ownership ~was discussed. It would be ex- pected that ~he owner or co-owner would share more heavily in the net profits than would part or junior owners. The extent of ownership. w~uld, therefore, be a factor to be considerea. Similarly, in a large group practice, the number of patients brought into the group by a doctor, as the result of his participation, would have some bearing upon the income distribution. Another fac- tor, although somewhat remote, would in- volve the ability of a doctor to stimulate collections. This factor would have . some relevency fo*' the smaller group where there is a more a4tive participation by the prac- titioners *ini the business aftairs of the group~ Other fa4ters bearing upon ~flcome die- tribution tv~uld involve the internal organi- zatiop of the group in terms of a depart- ment or section. When two or more doctors make up a section dealing with a particular specialty, then such matters as the number of new patients referred to or away from that department, value of the work done by the department in terms of comparable costs in solo practice for the same specialty, and cofleet~ons as a result of work by mem- bers of t~at department are pertinent to 692 DEMO~STRATION CITI~S AND UR ~ AN DEVELOPMENT incom~ distribution. An additional ~ factor, whicht has some bearing in this dis~ussion, is one in which the existing group ~xtends an invitation to an established practitioner to joifl the group. Of importance her~ might be the practitioner's prior incomel before joini~g the group. The reasons for his are obvio~is and need no elaboration. Of~comparable studies by the B reau of Medi~al Economics of the America Medi- cal 4ssociation in 195O~~ and by Medical Econfrnnics Magazine in 1949,32 a roup of seve~ty-three physicians in group ractices had ~their income distribution c mpared with: that of practitioners in solo practice according to the number of years in prac- tice. The mean net income of t e group doctOr, as compared to the solo pr ctitioner for the first ten years in practice, as corn- parable. Between the eleventh to 1~wentieth yeai~, the group practitioner earr~ed about $1,opo more than the solo practitioner. In the ~hird decade of practice, the gr~up prac- titi ncr earned about $6,000 moi~e and in the fourth decade, the differenc~ was in exc ~s of $9,000 in favor of the gr up prac- titi ner. The mean net income over the entire period was $14,253 for he group practitioner and $11,300 for the olo prac- titipner. The factors which bear upon t e i~ncome distribution of a group practice ave been dis~ussed at some length. Var.iou types of in4me distributions are based pon vary- in~ formulae. It would be impossble to de- se4i.b~ every combination of re uneration fo~ the practitioner, but several epresenta- u~qe types are worthy of exten ed discus- si4n. In the matter of partners n a group inlwhich there are no employed practition- er~ and the number in the gro ii small, alt of the expenses would be pai from the gi~oss receipts. A certain percent ge may be edt aside for reserve or contin ency (gen- ez~ally 2 to 5 percent) and of the remainder, 54~ percent is divided equally nd the. re- n~~ining 50 percent is divided a d prorated a~eording to volume of work roduced or .o$ber factors. This would be co sidered the 1*510 . "arrangement" of inco C distribu- t!o~t. A less desirable method f distribu- tion involves a basic salary for ach partner I~sed upon prior income, and . he net pro- e~ eds after reserve deduction might be divided according to the volu e of work produced. This latter method ould be es- pecially appropriate for sever 1 practition- ers who decide to combine the r solo prac- $ices into a group. For a mall group ~lready in existence and whi decides to ~xpand, it may add to its nu bers by em- 1oying~a practitioner at a fixe salary with PAGENO="0107" DEMONSTRATI'014 CITIES AN URBAN DEVELOPMEWP ~93 a small percentage of the net. The percent- he financial circumstances differ from age of net may be set to increase over a hose described. In a partnership involving period. of years to an agreed term after eniors and juniors, the partners receive a which the practitioner may be voted full alary plus a share of the net income (as partnership with a full share of the net. iscussed). The employed physician would Any full partner who may die or volun- ceive a fixed salary plus a small share of tarily decide to leave the group may be t e net income. Only the senior partners paid (or the estate paid) an equity of the ould have a voice in the affairs and policy last full year's net income. 0 the group. A formula for a junior part- In the matter of senior-junior partner- n r to become senior would exist by prior ship arrangements, each may draw an a reement. equal percentage of the net income with In another formula of income distribu- title to property and instrumentation in the t. n, all partners would receive a similar hands of the senior partners. A formula 5 are of net income with the share declin- for junior partners to become senior by in in his later years. A formula for em- some agreed regular payment to the senior Pl yed doctors, s~ho receive a salary to is often arranged. If senior partners die, be ome partners, may be arranged. It is their estates may be paid an amount of al o likely, in this type of arrangement, for prior agreement. If a junior partner dies, th share of the net income to vary with a lesser amount may be paid. A formula for th number of years the practitioner has voluntary retirement from the group may be n with the group. This arrangement is also be arranged. es ecially prevalent in groups in which the In the smaller groups (under ten full- pr ctitioners are on equal or comparable time practitioners), senior partners may pro essional standing-that is, each with make an arrangement whereby a relatively cer ification in a specialty board or each high percentage of their gross income is bei g a general practitioner. kept monthly up to an agreed amount be- nother method of income distribution yond which a higher percentage of the mv lves both the owners and the employed gross is kept. The junior partners would oc ors receiving fixed salaries and, at the keep a lesser percentage than the senior nd of the year, the net proceeds are di- partners, and all remaining funds would ac- ide among the partners with the em- crue to the group and be divided, after ex- bY d doctors receiving a bonus. This penses and reserves, to all partners equally. at er of the bonus would certainly depend Further, a formula for providing financial pO the yearly return, as well as the worth return for referrals within a group can be f e doctor to the group. This is the agreed upon. With his investigation, the t d used by those groups which develop writer found considerable use of payment S nio -junior partnership arrangements. In for referrals and questioned the legal and a ne venture, the senior partners are gen- ethical status of such a practice. It is not e all those who can contribute most in too terribly different from outright "fee t rm of facilities and equipment. Those splitting," except that the fees paid remain t at re designated as senior arrange to in the group. r cei e a higher share of the net proceeds With regard to a partnership of a large f r a given period of time while the junior number of practitioners (over twenty) , P rtn rs receive a lesser share. After the there is usually a steering or executive corn- P rio has elapsed (three to five years) the inittee which operates the group and which ju io partners receive full status and all is elected by the entire group. The persons pa tn rs share equal bonus. on the executive committee are those who t s ould now be obvious that the num- have been associated with the group for a be o combinations and alterations of considerable period of time. All partners th se ethods constitute about as many receive a salary based upon volume of prac- gr ups in practice as exist. Nevertheless, tice plus a share of the net income. Em- th ir i come distribution is dependent upon ployed doctors may receive a salary and, on of the above basic patterns. It should after a fixed period of time, be voted a be not d that in most group practices, partnership. The assets of the group are wh re ultiple owners exist, consultants to generally held by the corporation in which the gro p who are called in for specific pro- each partner holds shares. When a partner fes ion 1 advice generally are paid by re- dies or retires, it is mandatory that his cei ing a percentage of the fees charged to shares be sold back to the corporation. In the pa ent. With regard to night home addition, an equity by prior agreement call , it is generally accepted that fees paid would be paid. for uc services may be kept by the doc- In the category of groups in which there tor en ering the service. He would most are partners as well as employed personnel, ofte b the new, young practitioner. PAGENO="0108" The remaining category for discussion of income distribution is the non-profit groups in which all of the personnel are employed. In th4 industrial group, all of the personnel ai~e on a fixed salary basis including the medical director who acts in the capacity of the head of one branch of the company and reports to a vice-president. Generally, the type of care seen is one of routine character or emergency nature. But all complicated cases, or those requiring special consultation and management, would be sent to the local hospital. Safety, preven- tion, public health and rendering profes- sional services to maintain optimum physi- cal performance are the duties and aims of the industrial group. In the consu~ner group, labor health cen- ter, or association cooperative, physicians receive a salary fixed by the lay board which has ulti*iate responsibility fOr man- agement of the group. A bonus arrange- ment is also used. Professional matters are vested in the medical director appointed by the lay board. The medical director would be responsible to the lay board, and he would have considerable influence in the determination of the salary and bonus of each practitioner. In the voh4ntary hospital group, physi- clans are on 4 straight salary. The medical director has considerable authority in the determinatlozj of salary of all employed per- sonnel including the department heads. Salaries are, again, dependent upon the value to the group, seniority and volume of practice. Adjustments in salary may occur with increase in receipts by a department. While only the trustees have the authority for such matters, it is most often the medi- cal dIrector who determines salaries and raises subj~t to the confirmation of the trustees. Economics of Gr~up Practice-the Patient Group pr9~ctice may be financed in a num- ber of different ways. The most direct method of patient payment is fee for serv- ice-that is~ the fee is paid directly by the patient to the practitioner who renders the service. There is no intervening third party, and this method is considered to be the classical one in the administration of health services. Where a fee for service system is in operatio~i in a group practice, the monies are pooled and redistributed aecording to some type bf prearranged plan as those pre- viously m~ntioned. To the noi~profit group practices ~and only in some. instances in rural coifl~nunities) gifts, bequests and en- dowmeñts are utilized when the group practice is clearly of such overwhelming benefit to the public. Perhaps the outstand- ing example o~ this is the substantial en- dowmeflt of the New York Foun ation which, ~in 1945, enabled the Health nsur- ance P~an of Greater New York (H P) to lay th4 essential groundwork for its estab- lishm$it. The method of subsidy h s very signifi~antly and effectively been sed to aid an~1 promote group practice. Ag in, the aid ai~d encouragement of the gove nment of th~ city of New York played a n~ at im- portant role in the formative years/ of the HIP. However, as has already be~n mdi- cated ~ in * prior discussions, the et~ormous growth of group practice occurred a~ter the Secotid World War when the co cept of prep4yment was united with compr hensive healt~i services to form so effectiv a team for lfhe administration of health ervices. The*fore, the method of prepay ent will occupy the major portion of this di cussion. o~ the 368 group practices ope ating in 194~ only 56 were considered to be financed by ~repayment methods.83 By 19 9, some 24 ~roup practice prepayment pla s~4 were org$nized as consumer cooperativ s with a wide distribution in the southwe t and in the middle west. Some were a all, but others reached a size so that they operated hospitals of substantial propor ion. The grofrth of the group practice p epayment pla$is has, during the 1950's, bee truly re- ma~kable. The standards and levels of acl~ievement have steaaily risen that the prt~sence of their force on the alth care sc~ne has spurred greater intere in group p$Ctice and, at the same time, al ered many pre-existing concepts. The practi .e of medi- cii~e could never again be the sa e the day HIP opened its doors.35 Pour of the leading group pr ctice plans dOserve special discussion. The Health In- sdrance Plan of Greater New York, the R~ss-Loos Medical Group, the ommunity H~ospital and Clinic, and the G oup Health A~sociation of Washington ha e all been "frnttern setters" for the rest o the field. I The Health Insurance Plan of Greater ~ew York had its beginning in 1943-44 through the efforts of many 1 ading civic I~I inded citizens, through the en ouragement 4rid wise counsel of Mayor Fi rello H. La- ~uardia (and later Mayo William O'Dwyer) and with the consid rable finan- cial assistance of the New Y rk Founda- tion.It was finally consummat d in 1946 by ~pecial act of the New York tate Legisla- ~ use subject to the State In urance Law las a non-profit corporation uthorized to isell insurance and solicit c ntracts with ~employers and employees on group basis. The corporate form was very roadly based in the community with pr tninent civic leaders associated with it as dl as leaders of government, industry, ba king, philan- 694 DEMONSTRATION CITIES AND UR~AN DEVELOPMENT PAGENO="0109" 695 2. 3. DEMONSTRATION CITIES AND URBAN DEVELOPMENT thropy, labor, management, public relatio s, social welfare, health education and he health professions. The insurance contr ct that HIP wrote with its subscriber gro ps agreed to furnish comprehensive hea th care (within certain limits) in the patien `s home, in a center or in the hospital. T e HIP then subcontracted with more th n 30 medical groups, each of which agre d to abide by the limitations, standards, qu 1- ity and quantity of care contained in co - tracts written by HIP. The group th n affiliates with RIP as one of its "centers'. The services included are: 1. General medical care and speciali t medical care ; surgical care and o - stetricalcare. Laboratory and diagnostic procedure Regular and periodic health examin - tions and other measures for the pr - vention of diseases ; immunizations. 4. Physical therapy, radiological therap and other therapeutic measures. 5. The administration of blood an plasma. 6. Eye refractions. 7. When it is prescribed by a physician visiting nurse services at home. 8. Ambulance service from home t hospital)6 In addition, the group agreed to abide b the standards set for care by the HIP Medi cal Control Board. Also, if specialist serv ices were required by the patient, he woul be referred at no cost to HIP or the patient, but paid for by the group through its special services fund. The HIP established not only standards and administrative procedures for the pro- fessional care rendered but, also, standards for the center, space and layout, hours, scheduling and, most important, the quali- fications of the professional personnel as- sociated with the group as well as their as- signed functions. It, further, required that each of the groups furnish specialist serv- ices in obstetrics and gynecology, ophthal- mology, orthopedics, otolaryngology, pedi- atrics, urology, neuropsychiatry, general medicine, general surgery, dermatology, clinical pathology, pathologic anatomy and diagnostic and therapeutic roentgenology. The overwhedming number of subscribers to HIP are members of occupational groups, business and industrial firms, city agencies, non-profit organizations, (and the depend- ents of the employees) . Two general cate- gories of contracts are written-those in geographical areas in which group centers exist, and those where they do not exist. The subscribers to the latter receive cash pay- ments for their expenses. All subscribers are eye- rged to, in addition to HIP, maintain spitalization insurance such as Blue Cross I sofar as the HIP coverage does not in- ~ ude it except for doctor care while in t e hospital. With the adjunct of hospital!- z tion, the coverage of the individual is z, ther complete and comprehensive in ~ ope. However, there is a wide area of `~ verage which HIP did not originally offer its coverage, some of which has been 6~ ded. The original exclusions were: 1. Medical services for any condition, accident or injury where such serv- ices are covered by workman's com- pensation, veterans status, special legislatIon, etc. 2. Care for acute alcoholism, drug addic- tion, tuberculosis, mental or nervous disorders, and chronic illness requir- mg long term hospitalization in other than a general hospital. . Cosmetic surgery. . Electrolysis. . Dentistry. . Prescribed drugs, prosthetics,. glasses, hearing aids. . Special duty nursing. . Medical service for the administration of blood, plasma and anesthesia ; lab- oratory and diagnostic procedures; physical therapy ; X-ray or radio- therapy required in a hospital.87 ash payments are made by HIP for i~t~ red persons suffering from injury for w1~ ch hospitalization is necessary but or~L red by another physician other than one ajffliated with HIP. Sjmilarly, when an in- su~, d becomes ill outside of the geographi- cal area served by HIP, cash payment is ade. Preventive services are stressed in In with the base being a complete and ho ough annual examination. In line with he prevention theme, HIP stresses health cht ation through , information dissemina- iØn to the subscriber. One of the most im- ott nt contributions made by HIP to the at~ nal public health has been through its o~1~ rehensive statistical research data an- w~ d through the years with the use of ~ computation methods. Such items as ndi ence, utilization and medical experi- nce have formed a wealth of information f ~ invaluable nature and never before at~i red. In setting premium rates, four general c te ones were established: ~ 1. Single person earning less than $6,000. ~. Family unit earning less than $7,500. 8. Single person earning more than $6,000. 4. Family unit earning more than $7,000. T~i most usual arrangement was for the e t4 yer to pay 50 percent of the premium. PAGENO="0110" Today, the HIP has almost 600,000 subSerIb.~ ers and virtua11~ two-tbirds are mu~iicipa1 employees. The monthly premium for the single person under $6,000 is about $3.50, while it is about $4.30 for single persons earning over $6,000. These figures repre- sent an approximate base,38 at a 1958 level. If HIP can be described as the great bastion of grout practice in the east, then the same can ~e said of the Ross-Loos Medical Group hi the west. It is a privately owned and ope4~ated medical organization located in theg*eater~Los Angeles ai~ea and was established~in 1929 by two physicians, Dr. Donald K~ Ross and Dr. Clifford Loos. It is the oldest medical organization of its kind in the Uiiited States and has ~ as its guiding philosophy the furnishing of high quality artd low cost comprehensive care on a group practice prepayment basis. As of 1958, there were more than 200,000 sub- scribers in more than fifteen cente~s with nearly 200 professional personnel op a full- time basis. In 1952, twelve physiciahs rep- resented the' partners in' the organization. All profession&l personnel are paid on a salary plus bonus basiS. They are reStricted to the centers of'the group for practice lo- cation, but they are permitted to see private patients there with half of the col- lected fees going to the group for over- head. The Ross-Loos subscribers are divided into three categories : Group subscribers, individual subscribers and dependents. The professional services rendered to the subscriber are : Surgical and obstetri- cal care, me4ical care, laboratory proce- dures and ph~siotherapy, drugs a~id dress- ings, hospital ` . iP~ation and' ambulance service. The medical care includes complete pre- ventive care, complete care for illness and injury, general examinations when recom- mended, eye examinations and refractions, drugs and dressings, except vitamins and food supplements, antibiotics, endocrines and liver iiijections. Hospitalization and bed care include up to 90 days in any one year,89 As with other programs, certain ex- ceptions are made in the schedule of cared These are ifljuries aüd accidents aS a result of employm~nt, venereal disease, alcohol- ism, drug ` addiction, neuroses aad mental disorders, dental care, eyeglasses, hearing aids, blood and plasma, private' nursing, services not within, fifteen miles of a Ross- Loos center and hospitalization from ob- stetrical care. The monthly premium rates are computed on the basis of age with those under 40 paying about $4 per month; ages 40 to 45 paying $4.50 per month; 45 tO 50 paying $5 per month; and above 50 years of age paying amónthly premium of $5.50. These 696 DEMO~iSTRATroN CITLE AND URtAN DEVELOPMENT figur are as of 1953 and represe t pre- mium$ for the employed member of a group~ Individual members pay 6 per month~ after a general physical exam nation for which a fee is charged, and an initial fee ot entrance of $6 is paid. The f e does not iberease with age. Quite ob iously, this $presents a clear expression of the insur4nce principle, that of spread ng the risk. ~&ith regard to dependents, a educed sched~ile of fees for services ren ered is charg~d. As with the HIP, the be rock of the I$oss-Loos program is' medical preven- tion *nd a high level of quality of profes- sional services through the group ifort. In ~ 1929, a true medical pion er, Dr. Michael Shadid founded the Co munity Hospital and Clinic as the fir t such coopØrative in the United Stat s. The writer was enthralled by Dr. Shad d's own worl~ A Doctor For The People, 0 which desci~ibes the history of the estab ishment of t~e cooperative. With the ai of the spo4soring organization, The armers Uni4n Hospital Association, and ith mea- ger ~beginnings, the Community Hospital and ~Clinic today represents per aps the mos4 outstanding effort in the ar a of the Gr$t Plains, The Community Hospital and 1Clinic is located in Elk City, kiahoma. Its Sarly history is so outstandin because of I~ie significant contributions ade dur- ing the great depression. It lite ally con- serVed the health of the people of hat area at ~ critical juncture of their hi tory and the nation's history. $embers receive physical exa inations, tre4tment, surgical procedures, e e refrac- tio4S~ Obstetrical care, radiologic 1 therapy an4 a comprehensive schedule of ther care. Ho~pita}ization is furnished at $ per day an4 1aborator~r, diagnostic proced res, BMR, Ei~G, X-ray, operating room a d dental cai~e are all provided at consid rable dis- coi.int. The estimated number of ubscriber mthnbers is now in excess of 15,0 0. Annual duØs are about $18 per person a d $80 for two. Premiums for families of four are ab~nt $40. The 1950 staff in luded ten ph~rsicians and two dentists; ho ever, this fi*re has significantly increa ed duilng tf* past decade. The professiona personnel d*ote about 50% of their ti e to sub- se~,iber~ members and the remain er to non- i$mbers. As with the other co prehensive pi~ograms, prevention and p riodic ex- aitiination is an integral part f the plan. Ftirther, as with the other co prehensive programs, It has been repeatedl statistical- ly~ proven that comprehensive care with dtagnostic and laboratory servk s available i4 a group environment very ignificantly $duces'the per capita' hospitali ation stay. PAGENO="0111" DEMONSTRATION CITI]~S AND RBAN DEVELOPMENT 6~7 Thus, the care is considered of a I~igher to he exchange of ideas helps to foster quality ~ than solo practice and with less bet er health information and hygiene, an4 hospitalization, less expensive to the patient. aid in promoting higher quality of serv- In 1937, a group of federal employees ices. founded the Group Health Association of The solution appears to be . . . in Washington, D.C., which provided compre- s me administrative mechanism which hensive out-patient care through group wll insure professioiial oversight of practice. Today, more than 60 physicians m dical care within a framework of re- are associated with the group which also s onsibility to those whose lives and maintains a staff of auxiliary health person- d llars are primarily involved-the con- nel. Dental care was available at moderate s mers. . ."-A. R. and H. M. Somers.4' rates. The plan now has about 50,000 pa- T e Group Health Cooperative in Seattle tients. Members paid a monthly premium of nd he Group Health Association in Wash- about $4.50 for each adult and $8 for each i gt n maintain that the factors impor- of the first three children. There was a an in providing high quality health care maximum charge for each family unit. t inimum costs are basically four. The This group does not impose any restric- irst and most important is the ownership tions as to age or income. nd peration of health centers which are . e fic ently managed and professionally de- II. Group Practice Today and Tomorrow art entalized. The Group Health Coop- Group Health Cooperatives e ati e operates three such centers while Since 1956, the group cooperative move- t e roup Health Association maintains ment has received significant impetus in t ~ The former operates two hospitals the iThited States with the "natural mar- ith a capacity of over 250 beds. The riage" of the group practice prepayment rou Health Cooperative estimates that plans with the concept of the purchasing t e c st per day of maintenance of a pa- cooperative. Their growth and develop- ti nt, in their own hospital, averages $7 ment, as a consequence of group practice, le s t an in an outside hospital. The second deserve some review here. The aim of ~ nd mental reason offered is the ade- the consumer health cooperative is to pro- q ac and dedication of the professional vide fully adequate health care to all ~ rso nel as well as a distribution of families at a cost that the family can af- ~ rso nel in the various areas of special- ford. The application of the insurance prin- ~ tio . The third factor stressed is pre- ciple, the group practice of medicine and ~ nti e health care and a continuous pro- the principle of consumer cooperation are g am of health education and information. all at work. The prepaid group practice T e ourth factor cited was centralized which provides comprehensive health care ~ rch sing under budget control. is sponsored by consumer-members. Month- n he stress of prevention of illness as ly dues, initial entrance fees, etc., differ an i portant aspect of the health' pro- with each of the programs, but all are gr m the Group Health Cooperative cites similar in character to those described in its literature that when the Salk Vac- above. The rendering of comprehensive ~ e b came available, 17,000 children were care through group practice is fully evident. im u ized. In the membership, there has It *is interesting to note that the consumer no b en one single case of polio. With cooperatives have fostered the extension an mt nsive Asian Flu innoculation pro- of the comprehensive services to group gr m, incidence of the disease was mark- prepaid dental care and group prepaid op- edl educed while the community at tometric care-all within the framework of lar e as hard hit. The group Health Co- the health center. The important element ~ rati e cites early cancer detection, glau- of the consumer cooperative is the element co a etection, well-baby and pre-school of control by the consumer-members. The ex s as aiding in the program of pre- member-users elect a board of directors yen ion. which retains a business manager and "T ere is mounting evidence that medical director. The former is responsible edi al care under prepaid group practice for all business and administrative affairs, h ~ significant influence in improving while the latter is responsible for pro- ~ e h alth of its enrolled population. . fessional affairs. Cooperatives hold regular meetings to discuss general policy in which The abor - Health Movement . the doctors and patient-consumers may I t e discussion of group practice, it discuss general health problems. At board wou d e impossible to ignore the effects of director meetings, doctors are available of he labor-health movement to foster for consultation. Group health cooperatives the cen ralized comprehensive health care have found that this dynamic approach whi h s the hallmark of their union PAGENO="0112" 698 DEMONSTRATION CITIES AND URBAN DEVELOPMENT health center~. Organized labor represents con3nient prophesied the ultimat~ destruc- a potent ~on~umer force of more than tio* of the "Blue" system of ~iealth in- 40,000,000 w~rkers and their dependents. sur~iñce should Mr. Van Arsdale~s propos- They are increasingly in a position to alstbe adopted. From my knowle~ge of the mass purchaSe their health care, deter- des~otion and intensity of effor1~ given to mine high standards of quality of service thu problem by the labor leaders, and and, further, determine the environment frdm the preliminary "feasibility' study be- within which the care will take place. Or- ing conducted by the Central Lab r Council, ganized labor has never become signifi- one may reasonably expect that the move- cantly identified with the consumer co- ment for more health centers many at- operative mOvement but has separately, tached to labor sponsored hos itals-will through collective bargaining, ~iegotiated gaIn momentum toward an ulti ate real- for health Services. These services have it~. been paid fÔ* by health and welfare funds ~kt the Community Services Institute, -most oftei~ partially or totally created I balled to the attention of the panel the by determinJed contributions of manage- pr~posal for a "pilot program" which was ment. Health and welfare funds, today, pi~posed in 1958 by Dr. E. Ric ard Wein- represent tremendous accumulated endow- erfrnan46 at the Washington, D. ., National ments which render organized ~ labor a C+nference on Labor Health Se vices spon- force of ` great magnitude in the health sdred by the American Labor ealth As- field. The Department of Social Security sociation. of the American Federation of Labor and The proposal calls for a ilot multi- Congress of Industrial Organizations es- union health center to be es ablished in timated in l957~~ that upward of $500,000,- ~ such fashion that no existi g welfare 000 a year goes for the purchase of ~ fund would be disrupted, no involuntary health insui~ance and services under plans ~ enroflment would be requi ed and a through collective bargaining. Labor's of- ~ small service structure wo ld be as- ten stated *im in the health field is to sured. A number of unions in one city seek compr~hensiveness of the profession- would join forces for the de onstration al services through an efficient organiza- and would provide represent tion on the tion of medical personnel. ~ policy board. A part of the community, Labor uflions individually (if they are ~ preferably a workers' resi ential area, large enough), or in groups pooling their ~ would be designated as the ealth serv- resources, have established an extensive ice area-small enough to e adequate- and growing system of health centers for ly covered for house calls and emer- comprehensive health services. Among gency care, and large enoug to provide the most notable in the City of New York sufficient enrollment for a ound insur- are the Sidney Hillman Health Center, the ance lease and the demonst ation health Health Ce~iter of the Laundry Workers, ~ center would be established in this area, Hotel Trades Council Health Center and staffed by a partnership o physicians the Intern~tional Ladies Garment Workers desiring to practice unde group ar- Union flealth Center. Dr. Morris Brand, rangement. medical director of the Sidney Hillman It would seem, therefore, th t New York ~ Health Cetiter, has estimated that nearly ity may be the "pilot pro ect" for an 4,000,000 persons associated ~ with the xtensive effort to form suc a proposed American Labor Movement have their system. health needs cared for in health centers ~ . . . The Group Health Association of Americ under labor S auspices.44 The development of group practice, as I was privileged to serve as ~ a panel ~ a potent force in the admi istration of consultant at ~ the 1960 Community Serv- ~health services, has had a m jor deterrent ices Institute of the New York City Central ~ in the form of adamant opp sition of the Labor Council. The discussion by the panel ~ organized medical professio . As a con- concerned~ the general growth and develop- sequence of this oppositio , those pio- ment of ~ comprehensive group practice neers in public health dministration under 1al~or's aUspices. ConSiderable em- sought to "band together" t discuss corn- phasis was plac~ed upon the proposals of mon problems and to foste the concept the Central Labor Council President, Mr. ~ of group practice. The Gro p Health As- Harry A. Van Arsdale, with regard to the f sociation of America was organized in organization's aim to sponsor its own hos- ~ 1959 when the American abor Health pital-health center system as an alterna- Association united with the Group Health tive to Blue Cross and Blue Shield.4~ Federation of America. T e Federation Wide newspaper coverage and editorial was founded in 1987, and t e former was / PAGENO="0113" 60-878 O-66-pt. 2-8 699 DEMONSTRATION CITIES AND URBAN DEVELOPMENT founded in 1952. The Group ~ea1th As- titoners of several professions, I have sociation of America has members in the fo nd that attitudes have definitely been United States, Canada and Mexico. It is alt red. Some say that it is "fashionable" an association of prepaid group health to be a part of a group-that this, in fact, plans, other organizations, and individuals in reases your effectiveness and accept- working to bring modern medical and a e within the community. But no matter health care within the reach of consumers. w t the change of attitude, the fact still Its active and associate member health re ains that a major deterrent to group plans, sponsored by cooperatives, labor pr ctice is still the initial cost of building unions and other community groups, pro- an equipping a health center. vide urban and rural people with direct side from his political liberalism, Sen- health care through clinics, health centers ato Hubert Humphrey of Minnesota has, and hospitals, as well as health benefits in is writings and in his speeches, been through insurance arrangements. a p ogressive and astute thinker and has The Group Health Association of Amer- cha pioned many new ideas and concepts. ica contends that it supports consumers' ~ ay 1959, Senator Humphrey intro- rights to take the initiative and sponsor uc d a bill, S200947 which struck like the programs to solve their health problems. ro erbial bolt of lightning at the heart It supports the rights of professional f t e problem confronting group practice. men to make mutually satisfactory agree- ~ ntially, the bill would enable the ments with non-profit, consumer-sponsored ede al government to extend long term, health programs. It promotes health pro- ow interest bearing loans to non-profit grams which feature prepayment and com- rou s to enable them to build and equip prehension of services, group health prac- eal h centers for group practice through- tice, non-profit plans providing services ut he country. The loans would finance at cost, control of policy and administra- ~ e ost up to 90% with the group bearing tive functions by or in the interest of ~ e maining 10% . The extent of the loan consumers of health serviëes, and profes- as p to 40 years, and the interest was sional practice and standards established 3%. he bill also provided that the group and controlled by qualified professional ~ actce be insurance underwritten by prirn health personnel. Each year, the associa- v te carriers under the principle of pre- tion sponsors a Group Health Institute ~ ym nt. Humphrey wisely added an addi~ for the exchange of information and for ti na provision which called for overall the promotion of group practice. New ideas a mi istrative jurisdiction of the group are explored and presented for public dis- b a board of trustees composed of a cussion. m jo ity of lay persons and overall pro- This writer attended the 1959 Group ~ ~ al supervision by professional Health Institute held in New York City ~ rso s only. Thus, questions of policy and had the opportunity to meet some of w re eft to the trustees who represented the leaders and discussants of the Insti- th ~ onsoring group. In this way, the tute. The program and plans discussed are H mp rey Bill was drawn up so that it filled with a broad sense of enthusiasm w uld apply to publicly sponsored prepaid for the further development of group prac- gr up practice. It was the first govern- tjce as an optimum, desirable means to m nt sponsored legislation which recog- administer health services. I~ ed he trend toward the centralization The Humphrey Health Centers Act of he lth facilities and also the financial Were it possible to outline the two most pr ble involved. It recognized the right significant factors retarding the further of fre enterprise by citing the private development of group practice, either un- ins ra ce carriers as needed for the pre- der private or voluntary sponsorship, it pa me t principle. It understood the need would not be difficult to cite the opposition an d sire of the consumer cooperatives of the general and organized medical com- to ro ote their own health care. It gave munity as one, and the lack of funds to ad itio al meaning to the needs of the build and equip a facility as another. Over lab r ealth movement by enabling the the years, the weight of statistical evidence pro ision of substantial funds for building of the "worth and goodness" of group and equipping new union health centers. practice to the community and to the In he original proposal of the bill, the practitioner have had their impact. There arg ment was raised that if the bill was is every reason to believe that the pas ed, every local union organization or "privateness" of practice is lessening and eve y small consumer group would desire giving way toward the group environment. to uild its own health center ; that util- In personal discussions with young prac- izat on and duplication would prove to be PAGENO="0114" inefficient; and that the health community could only ~uI~ort a limited number of such health centers. As an addition to the original propoSal, Senator Humphrey add- ed the provision that in the event of need, the health center would be opened to the community for means of fair conipensa- tion. In other ~ words, those health centers built at government expense but sponsored by a semi-pri~vath consumer group, could enable the p1~~vate citizen and hia family (not a part of the consumer g*~oup) to avail themseltes of the facilities of the center. Thus,~ the "mechanical" principle of operations Was advanced one step furth- er in the history of group practice. This principle of community participation, as well as the principle of government finan- cial aid, is * marked by the Humphrey Bill as a significant milestone in furthering group practice. It was, truly, the first at- tempt to aid group practice through government effort. The reaetkrn to the bill was in many ways surprièing. The organized profes- sions were Satisfied that there would be no lay interference in professional matters. The labor and other consumer groups were satisfied tha~t the sponsoring group could set the "tone" and policy for the center. The private insurance carriers were pleased that they would effect the insur- ance underwriting of prepayment. The elderly groups were pacified that they could avail themselves of the center's facilities. The economists were pleased that this was no giveaway but that it was a long term federal, interest bearing loan. The only aspoct restrictive abo~it the bill was that it ~was limited to non.j~±ofit spon- soring groups and excluded private group practices. Everyone in the health and governmentS communities recognized the worth of such legislation, but the bill died in the Senate Labor and. Public Welfare Committee. The bill was objected to by the BureaU of the Budget because it set no limit on expenditure. Nevertheless, in spite of its death, the bill created a new hope for g~'oup j~actice. and a new climate of thinking both in and out of government. The die ~ós now cast for some other piece of legislation similar to the Humphrey Bill. The Medical donstructioñ Omnibus Bill' In June 1960, the Se~retar~ of Health, Educatioir and Welfare, Arthur W. Plem- ming,48 sdbmitted to the Congress the ad- ministration's proposal for aid to health edücátion, aiding medical, dental, etc., schoolstO finance new construction; mod- ernizatlofl of ~laboratory' and research / 700 DEMONSTRATION CITIES AND U*BAN DEVELOPMENT facil es, etc. Tucked away within his om- nibu~ bill was authorization for th federal gove~nment to guarantee by bon s, loans to fi~iance group practice up to a amount of $80,000,000 per year and that ach year $30,000,000 would be made avail ble. The program of guaranteeing loans b federal bonds would extend over a ive-year period for a total of $150,000, 00. The program would be under the ad inistra- tio4 of the Surgeon General of t e United Sta$ Public Health Service. Be ause this pro$sal made no distinction between nor4.pmfit and private group pra tice pro- gra3ns with no statement about the pre- pa~~*1tent principle, it was dee ed to be leed specific, broader then the umphrey Bil! but meeting the money limit objection of the latter. The bill will, most ssuredly, be ~ amended to seek an extensi n of the $30,000,000 limit but, with ame dment or without, is expected to pass. Wi h govern- meflt (or more correctly, admi istration) re4ognition of the need to lost r and aid gr~up practice in. the form o enabling fh~ancial assistance, the scope a d concept off group practice will be ass redly ad- v4ced in the sixties. 1h4 Kellogg Center Health Conference !J~he Governor of Michigan, Honorable G: Mennen Williams, has exp essed the concern of many leaders in overnment, iadustry and the civic comm nity about the general problem of healt care. Ac- cordingly, early in 1960, he invited 12 l~ding specialists in health to meet with him at the Kellogg Center 0 Michigan Spate University to discuss he lth care in t~e United States, the needs challenges a~d solutions. This conferenc was * held 41 April 1st, 2nd, 3rd, 1960, wi h Governor Williams, himself, setting the one and ob- j~ctive for the conference. He s id: , "Health is a major h man value. When we plan health' `progr ms we run into manpower shortages a d financial ~ problems. . The costs of hea th care are ` at an all time high. But th social cost ~ to * our nation of failure to provide , health care is probibitive. nfortunate- ly, . discussions of national health prob- ~ `lems are cloaked with myt s and scare- wards. We must cut thro gh this and ~ ~prov1de positive and worka le programs . .to meet the' people's healt needs. . . ~ . ~-`4. Mennen Williams.49 . When the conference was concluded, a brief was prepared which ci ed the prin- * oiples and problems as wel as some of the challenges. Foremost am ng the chal- lenges was the matter of he ith facilities. "We also need profession 1 schools with PAGENO="0115" DEMONSTRATION CITIES A D RBAN DEVELOPMENT 701 extensive teaching and research facili- Ke logg Center Conference was eminently ties, group medical practice centers, di- su cessful in deriving a blueprint for the agnostic centers and public health fa- fu ure. And, intimately tied to that future cilities. . ." 50 wa the furtherance of group practice. In the matter of public health organiza- tion : 0th r Federal Legslation "It has been demonstrated that de- orthy of brief mention are two pieces ficiencies can be greatly lessened by of federal legislation which relate to or group medical practice, whereby a num- P?t ntially relate to group practice. The ber of physicians pool their skills, fa- fi t ~ the Federal Employees Health cilities and i ncom e, and coordinate ~ efits Program. The enabling legisla- their work so as to supply to ambulatory tio was passed late in the 1959 session and bed patients effective personal serv- ~ he C~n~gress. It authorized the United ices and high quality of care. Group ta es Civil Service Commission to estab- practice in instances with remuneration Ish, in behalf of the federal government of physicians on a salary rather than ~ mployer, a program of health care on a fee-for-service basis has demon- or all federal employees. The ~ program strated it can provide comprehensive en into effec~ in July, 1960, giving the medical care as well as care in the ape- mp oyee the right to choose from among cialties. The extension of group practice eve al plans including the one under should be encouraged. . ." 5i hic comprehensive care would be, ren- ere by prepaid group. The other' plans From the standpoint of finances, the ere less comprehensive and, thus, less conference concluded : pe sive. The Civil Service Commission "Two trends in the current situation o ugust 1, 196O,~~ indicated that almost offer real encouragement : (1) the in- t r -fourths of all employees chose the creasing use of the hospital as the center ost expensive and most comprehensive of health activities in the community ; c re available in their community-that and (2) the growth of group practice. * her HIP type coverage was available, Both of these developments increase our i w s predominently chosen. This can, potential for planning the most effective ithout erroneous inference, be interpreted use of our limited health facilities. . ." 52 a a expression for more comprehensive The conference recommended, among C ver ge. That group practice offers the other things, expansion of health facilities 0 ganzational means for undertaking such through an increased Hill-Burton program c ver ge is reflected in the employees' of the hospital. As a base for organized, c oic . Pending before the Congress is a full-time group medical practice, that fed- Si ila measure which would extend coy- eral legislation should be passed which er ge to retired federal employees. In both would encourage the development of non- in tan es, the federal government pays profit group practice clinics by providing On -h lf the cost of premiums. long term, low interest loans-not only he e has been considerable public to meet their need for a highly specialized di cus ion about federal aid for health type of facility, but also to recognize their ca e the aged. Synonymous with this significant and hopeful role in meeting ty e 0 legislation has been the name of the nation's health goals. Re res ntative Aime J. Forand. While no Although the conference had but 12 par- leg sla ionhas yet been passed (at the time ticipants, it has received such consider- the writing of this paper) some meas- able interest and attention nationally, that ur 5, n mely the bill sponsored by Senator its resultant effect has been a remarkable ?l~ 5 ara would aid the aged by provid- one. The conferees represented some of ing dia nostic care ~ in ?ut_Pat~nt facilities the best minds in health administration, as ell as hospitalization. It is clear that and they are all nationally recognized and ~ P * r~ctice has a large role to play respected. This "quiet" conference has in en tric care. served to crystalize the role of group prac- The ase or Group Practice tice as a vehicle for better organization I y opinion, comprehensive group of health services to meet the challenges pra tic has been "tested and experi- of the future. In fact, its simplicity and me ted with" during the last years on a clarity are beyond question. It has, in a mas b sis, and it is ready to offer itself few short months, gained the stature of as t e v hide for the future administration authoritativeness and is quoted over and of ealt services. With greater insurance over again. What other conferences had cove ag , more comprehensive health serv- done in the past to delineate needs, the ices req ired, more emphasis on preven- PAGENO="0116" 702 DEi~ONSTRATION CITIES AND U ~BAN DEVELOPMEJN1~ tion, the need to meet increased health costs and the necessity to more efficiently integrate specialty services in health care, group practice seems ideally suited to meet those requirements. Three avenues of approach seem open for group pra~tice. The first is to expand group practic4 by hospital and chide staffs shifting the ~mphasis to paying patients with adequate and proper payment for the practitioners ~vho are on a full~time basis. The second mode of expansion would be in terms of private group practice in the group clinic where comprehensive services are offered properly utilizing the talents of specialists. The third area of growth ex- tension would be by allying health insur- ance with the above two types of group practice assuring a sound prepayment plan and an ~economic base for the group. Dr. Will ~Mayo summed up the case for group practi4e when he said: "As we men of medicine grow in learning, we more justly appreciate our dependence upon each other. It has be- come necessary to develop medicine as a cooperative science, the clinician, the scientist, the specialist and the labora- tory workers uniting for. the good of the patient. The people will demand, the medical profession will supply, adequate means for the proper care of patients which means that individualism in medi- cinO ëan ~o longer exist. . ."54 Perhaps ~he most important ingredient, more than any other, in the development and creativity of group practice~-and,~ in- deed, in alL new forms for the betterment of the administration of health services will be the willingness of the professions and its practitioners to work for progress in health care. That may, and . probably will, mean an abandonment of the tradi- tional concepts of solo practice. The liter- ary wisdom of that great Belgian, Maurice Maeterlink~ is especially applicable. "At e~iery crossway on the road that leads t~ the future, each progressive spirit iS opposed by a thousand men appointed to guard the past. Let us have no fear lest the fair towers of former days be sufficiently defended. The least that the most timid among us can do is not to add to the immense dead weight which nature drags along. . ."55 8. Bluestone, EM., M.D., "On Group Pra Ice in Hos- pitaIs~' an editorial-The Modern Hospital, iv, Novein- ber 1646 and January 1947. 9. flaffner, A. N., O.D., commencement a dress to the Mass4chusetts College of Optometry, Boston, Mass., June 10, 1960. 10.. Hunt, G. Halsey and Goldstein, MarcO S., "Mcdi- cal i~roup Practice In the United States," Washington D. C4: Public Health Service, 1951. , . lu Bluestone prefers to call this medical phistication. 124 A.HS.. lot. cit. 181 "Group Practsce"-A report by the nited States Public Health Service, Journal of the Nati nal Medical Asso4iatlon, vol. 42, July 1950, pp. 223-228. 141 As an example, in June and July of 1 60, the New Yorkf City press carried extensive coverage o the quarrel bctis~en HIP and the General Hospitals of taten Island. 151 "The New York Times:" July 10, 19 0, p. 31. l6~ Bluestone, Address before the Tn-S te Hospital Asseflibly, op. cit. ll~. American Medical Association, Resol tions of the HotSe of Delegates, Chicago, Illinois, Jun 1955, June 1956, June 1958, June 1959, June 1960. 1$. Weinerinan, E. Richard, M.D., Addr ss before the Fifth Annual Meeting of the Cooperative Hea th Federation `if America, Chicago, Illinois, July 6, 1951 19, American Medical Association, Medic 1 Groups, A repi~rt prepared by the Bureau of Mcdi al Economics (Chicago, Illinois: Journal of the America Medical As. soci$Ion, l94~) Vol 135, pp. 994-909. 20. "Annual Report of the Medical S rvice Ending Ju4e 30, 1959," (Lake Success, New York: Sperry-Rand Coi~oration, 1959). 29. Interview with Richard Feinberg, P5.D., June 26, 1965. : 41. "Special Reports on Eye Safety by~ the National Soijety for the Prevention of Blindness" (~4ew York: by Tb~ Society, 1958, 1959). *3. Incorporated by legislative act for ~ the Town of W~bb, New York, March 1960. I ~4. Hanson, Horace, R., "Group H~alth Plans-A Twenty Year Legal Review," Minnesota ~ Law Review, Vol. 42, No. 4 (March 1958), pp. 527-548. I 25. "United States v. The American Medical Associa. ties," U. S. 219 (1943). 26. Hunt and Goldstein, bc, cit~, pp. 48-4 27. Ibid. p. 49. 28. Group Health Institute, "Proceedin s of the 1959 Meeting" (Chicago, Illinois, 1959). 29. U. S. Department of Health, Educati n and Welfare, "public Health Service Special Report: Principle for P~snning the Future Hospital System,' (Washington, DI C.: 1959) p. 218. (30. Hunt and Goldstein, bc. cit., pp. 19- 3. 531. American Medical Association, "A Special Study 0~ Group Practice," A Report prepared b the Bureau of Med~1ca1 Economics (Chicago, Illinois: ournal of the AMA, 1950), Vol. 142, pp. 1049-1052. J32~ "Group Practice," Medical Econ mica (Chicago, I~inois: 1949), Vol. 26, pp. 64.69. ~ Hunt and Goldstein, bc. cit., p. 56. I 34. U. S. Farm Credit Administration and the Public Nealth Service, "Rural Health Cooperativ s' (Washington. ~t. C.: U. S. Government Printing Office June 1950), p. ` ~5, Caldwell B. Esselstyn, M.D., Grou Health Associa- tloii of America, "Proceedings of the G oup Health ln- stitute" (Chicago, Illinois, 1959), p. 24. 36. Feldman, Louis L., "Organizatio of a Medical Group Practice Prepayment Program in ew York City," (New York: HIP, 1953), p. 52. ~ 37. From the HIP contract. 1' 38. Serbeln, Oscar N., Jr., "Paying r Medical Care [ii the United States," (New York: Col mbla University J'ress, 1954), p. 163. I 39. Ibid. pp. 162-163. I 40. Shadid, Michael, M.D., "A Doctor for the People," KNew York:. Random House, 1946). I 41. Somers, A. R. and H. M., "Em loyee Health In- 8!lrance,~' A Report to the University o Michigan Social ~ectsrity Conference (Washington, D.C.: The Brookings ~nstItute, November 1949). I 42. The Foundation on Employee He Ith, Medical Care jand Welfare, Special Study No. I, Part B and C (New York: The Foundation, 1956), p. 28. 43, Cruikshank, Nelson H., "Labor's Interest in Mcdi- cal Care," An Address Before the Mas achusetts Hospital Association, Boston, May 9, 1957. 44. "Your Right To Medical Care" ( ew York: Amen- can Labor Health Association, 1956), p. 1 . 45. van Anidale, Harry A., Address before the Com. munity Services Institute, New York C~ty, May 16, 1960. 46. Weinerman, E. Richard, "Group eractice and Union Health Centers," A Paper Presented tol the Annual Meet- lug of the American Labor Health A$ociation, Washing. ton D. C. (New York: The Associatioi~, 1958), pp. 70-72. 47. US, Congress, Senate. Committ~e on Labor and Public Welfare, 5.2009. 86th Congress4 1st Session, 1959. 48. US, Congressional Record, Spe al Message to the Congress by the Secretary of Health, ducation and Wel. fare. 86th Congress, 2nd Session, Jun 1960. 49. WIlliams, G. Mennen, An Addre before the Kellogg RefereSces I. Davis, Michael, M., "Clinics, Hospitals and Health Centers," New York: Harper & Brothers, 1927, p 52-64. 2. Ibid., p. 57. 3. Ibid., p 845. 4. Intervse)e'wlth Dr. John J. Bourkd, August 9, 1960. 5. State of New York, "Insurance Law," 1960, Art. SC, Sec. 250. - 6, "Annu~1 Report of the Associated ~ Hospital Service of Greate~ New York," New York: A.H.S * 1959. 7. BIUeStO~Ie, E.M. M.D,, Address b~re the Tni.State Hospital Ass*mbly, Cisicago~ Illinois, May 7, 1947. PAGENO="0117" PAGENO="0118" 704 DEMONSTRATION CITIES AND RBAN DEVELOPMENT Mr. BARE13~11~. Thank you, Dr. Haffnet. I just want to ask you this question for the record. Your testimony will indicate to me that you are for H.R. 92 6? Dr. HAF~NER~ That is correct. Mr. BAm~rr. The only fault you fii~d with the bill is that ptome- trists are n$t included in it? Dr. HA1~NEE. ThaVs right. Mr. BArnu~n'r. This is your main r ason for appearing h re this morning? Dr. HAFFNER. That's right. Mr. BERRETT. I am quite sure the cor~imittee will give this co sidera- ti.on and the time will come when we `~vi11 be marking up the ill and I am quite sure your very fine representative from the Br nx will be heard on this subject. Dr. ITAI~PNER. I might, if I may, Mt. Chairman, add one a ditional word. Our Optometric Center in New Y~ork, which is a mem r of the Group iThaith Associatiôti of Ame*ica and which I cite in the testimony, ultimately will evolve into ~ new college of optome ry, most probably at the City University of ~4ew York. This new i titution certainly will be oriented toward the growth and develo ment of group practice among optometrists ~s well as with optomet ists and comprehensive health care facilities, with physicians, den ists, and other health practitioners. We believe that this represents the~ need of the future and certainly this will be an integral part of th~ teaching program. urely we would want to see optometry includ~d in this bill, and not t include, we feel wkrnld be a seriouserror. Mr. BAiuti~pr. Mrs. Dwyer ? Mrs. DWTER. If this bill is passe and optometrists are included, I would like to know what the facilities cost of . optometry n a clinic such as this bill envisions-what the cost would be ? I ealize of course it will vary throughout the country. But about w at will it average-what will be the average ra~ige? Dr. HAFir~ER. We suggested there were five optometris s partici- pating in a single discipline group and we would estimate he cost to be apprpximately $50,000. Where~ five optometrists par icipate in the comprehensive health care fa4lity that portion of t e facility would be $50,000. It would enabl+ a broad spectrum of ervices to be rendered within the specialty aret~s of optometry. Mr. DwYER. Mr. Hafl~ner, what can we anticipate in 1~ e way of asistance ? What would you envisi~n this to be ? / Dr. HAFFNER. We have estimated that the numbers of oftometrists presently in practice in the country who are in one phase or another of group practice constitutes almost 18 percent. We beli~ve that's a rather large figure. Optometrists have been socially orienthd in terms of operating together. I suspect that the bill would act s a further encouragement to the establishment c~f group practices, far beyond the 18 percent. I also suspect that th~ bill would do anothe thing. It would permit those groups alre4dy in existence to br aden their service$ to make their services m4re comprehensive wit in the area within which they practice. So 1[ think it would have two effects. As to a figure, I really don't think I am prepared at this ime to give you a figure, although the point is interesting. PAGENO="0119" DEMONSTRATIO~ CITIES URBAN DEVELOPMENT Mrs. Dwn~. Have optometri n able to obtain SBA loans in the past? Dr. HAFFNER. Yes, we have. . e e have been some who have not not been able to obtain loans b a se loan funds were short. But if I can step back from that and ta e a ook at this from the standpoint of public social policy, I think t e ~x stence of the bill constitutes an encouragement for a desirable f m f health practice and I think perhaps that this is one of the ost important aspects to the bill. Mrs. Dwri~E. Of the $50,000 y u esfmate as the average cost, could you break this down into housing n f cilities? Dr. HAPPNER. I am thinking f th $50,000 primarily in terms of internal-of the internal portion, n m ly the instrumentation, equip- ment, the professional armamenta i . I'm not thinking in terms of the housing, the structure which, us it. I don't know whether I would be prepared to make an es i a of what the building portion of it would be. lit would vary i i ~erent areas, of course. But I could give a very rough estima f the area need for a five-man group practice utilizing an inte 1 osition of $50,000. I would think that it would be at least 3 5 quare feet of space and that would include all clinical areas, a ie t areas, administrative areas, recordkeeping and so forth. Mrs. Dw~n!ia. Your emphasis is r a ly n facilities? Dr. HAPFNER. Yes, it is. Mrs. Dwy~. Thank you very m h. Mr. BAiuu~rrr. Mrs. Sullivan? Mrs. SULLIVAN. Just one questio , r. Haffner. Do you feel there is really a n d fo a priority for the nonprofit organization and prepaid plans? Dr. HAFPNER. I believe there i n ed for the establishment of priorities. I think that if this bil s assed, it would act as an en- couragement to the development o o e group practices and to the improvement of existing group pr tic s. I believe that as the ad- ministration of the bill gets moving he money might not be sufficient and the priority section as outline n he bill is a necessity. I do believe so. Mrs. SULLIYAN. Thank you. Th `s 11, Mr. Chairman. . Mr. BARRi~ITT. Mr. Harvey? Mr. HARVEY. Dr. Haffner, is you rg ization still conducting the highway safety program down in i a University? Dr. HAFFNER. Yes, it is. Mr. ~ HARVEY. I think you should e ongratulated and this è~om- mittee should be aware of it. It i ce tainly further ahead in the highway safety program than the u o ohile companies. I for one have corresponded at one time or ano he on that. I have much ad- miration for some of the experiments yo have conducted. Dr. HAFFNER. If I may comment o t at, the Indiana University, Division of Optometry, primarily th ou h the work of Dr. Merrill Allen who is professor of optometry n Dr. Hoffstetter who is the dean `has been interested in the matte o highway safety, especially from the standpoint of the visual pro le s of the motorists. May I say as well, that the existenc o group practice lends itself to more research of a clinically orient d nature. This is something that we don't ordinarily get from priv te ractice. So, Congressman 705 PAGENO="0120" 706 DEMONSTRATION CITIES AND D~RBAN DEVELOPMENT Harvey, if research is a major factor a4id concern on the part of the Congress, ai~d I am ware it is, then th~ existence of group p actice and the fost~rmg of group pract~ice lijiewise has a secondary effect of fostering. patient-oriented research. IThis is extremely imp rtant. Mr. }TARV~Y. Particular research is being done on the cam us of the university ; is it not ~ Dr. HAFFNER. Yes, it is, but it is being conducted in lar e part through the clinical facilities at the school. Mr. HARVEY. You are the executive secretary of the associ ion, is that correct? Dr. HA7F~NI~R. No, sir, I am the execi4hve director of the Opt metric Center of ~ew York. Mr. H~nti~ir. I see. Dr. HArFNER. I direct the institutio Mr. HARVgY. Let me ask you, in t t capacity, have you eceived any letters or do you know of any spe ific instances where d tors of optometry have been denied the oppc~rtunity to practice as group because of lack of financing ? Have. these specific instances b called to your attention by letter or complaint `to the association t at you know of? Dr.. HAF~FNER. I believe that the Aiaerican Optometric As ociation has on file ~ number of instances wher~ these small business lo ns were not available to optomefrists who w*e desirous of en'terin~ a group practice. ~ believe that is so. And I jhink that can be provi ed. Mr. ~ Are you telling us th~t because they were n able to get these small business loans they weite not able to go into gr p prac- tice or they were not able to go into! group practice on as avorable terms as they otherwise would be able to? Dr. HAPFNER. 1 would not know the specific instance, but I would judge it would be as a deterrent. The initial cost of the buil ing and equipment constitutes a major dethrre~t. Mr. HARvDY. Can you cite here today or can Mr. McOra ken any specific iits~ances anywhere in the T~nited States about op metris:ts being denied the opportunity to pra4ice in this matter beca se of the lack of fi~iancing? I asked that que~tion not to put you on the spot, but agaiii, because in the State of M~ichigan, in the `bankin industry our optometrists are looked upon very favorably with very h gh credit ratings and they are leading citizen~ and they are by and 1 rge good risks and I have not known them to be turned down by an lending organizations. Dr. }TAFFNER. `There is a center in' East Lansing `which is fledging institution very closely tied `to the n9eds of the community ` nd I have been in touch, particularly with Di1~ Britton who is one of the prin- cipals in the institution. They are! particularly concerned with this area be~use they feel as well that s4ch a bill would enable ` e institu- tion to get started. j Generally, when you have an inst~tution which is nonpro t, it is not within the purview of the Small Business Administration. So for the moment that institution, though it is~a community group pra tice would not have the opportunity to borrow `substantial funds for bu ldmgs and equiument. M~r. HARVEY. IS it not true that the doctors themselves ould go to the banj~s and sign, and a lawyer co~ild go down-they hay no trouble borrowing the money? 111 PAGENO="0121" DEMONSThATION CITIES A D URBAN DEVELOPMENT 707 Dr. HAPFNER. I am sure that is e. Mr. HARVEY. You are not tellin s n Lansing or East Lansing that they are having trouble borrowin on y ? Dr. HAi~TNER. I wouldn't think Mr. HARVEY. No. The answer i , th same for the dentists and the same for the physicians, and it is t a they do have good credit and th~y are able to borrow at the pre e t ime under conventional terms. Dr. HAFFNER. Sure. Mr. HARVEY. Thank you. Mr. BARRETt Thank you, Mr. a e Dr. Haffner, all time has expire an we certainly appreciate your coming today. You have given s 1 d d testimony in your statement here this morning. Thank you ye u h. Dr. HAFFNER. I am most oblige t y u, sir. (The following letter was submit d f r the record:) PENNS A IA OPTOMETRIC AssociATioN, Her8hey, EO~., Marc1i~ 14, 1966, Congressman WRIGHT PATMAN, Chairma~n House BGnking and Currency ittee, Hot4~&e of Representatives, Washington, D.C. DEAR CONGRESSMAN PATMAN : The Pen ylv nia Optometric Association urges your favorable consideration of H.R. a! ng with the "optometry" amend~ ments as presented by the American Opto tn Association. Group practices are a way of providin g od health care but they must `be pro- vided by all health disciplines. To offer re t ict d care and not include optometric visual care would be to hinder the growth f ou excellent health care. Sincerely, RAY L. KINCH, O.D., President. Mr. BARRETT. For next witnesses e ave an array of very distin.- guished gentlemen and we have one o o r former colleagues here this morning. He was one of the most c p ble men in Oongress during the time he served here in the House. We are going to ask Mr. Jerry V hi , who is the executive direc- tor, representing the Cooperative ag e of the United States of America and the other witnesses to co f rward. We also have Mr. James Brindle, esi ent, Health Insurance Plan of Greater New York, representin G oup Health Association of America, and Mr. James F. Doherty, 1 gi lative representative, AFL- do, accompanied by Mr. Richard S aker, assistant director of the AFL-CIO Social Security Division Gentlemen, it is customary that we w icome you and make your- selves at home and I think the choice s o who desires to speak first should be agreed upon among yourselve Mr. Voonrns. I think Mr. Brindle will b first. Mr. BARRETT. Jerry, I want to say hi , it is nice to see you back here again. It has been a long time si ce I have seen you. You cer- tainly have been one of the most ener eti Congressmen I have ever met on the Hill. Mr. VooRms. I appreciate that very u h. As a Congressman that was, you can imagine how kind that. i f om one who still is. I am very grateful. Mr. BARRETT. To your associates here as ell, I am hoping they can get the feeling that they are at home h re and make their statements and we will be glad to start with Mr. Bri dl PAGENO="0122" 708 D~MONS~MA'T'ION CIPIE~ AND ~J~BAN DEVELOPMENT STAtEMENkF OP ~AMZS BRXNDL1~, PR$ID~NT, liEALTK INSU AIWE PLAN O~ GREATER N~EW ~ORK, ~N BEHALF OP THE ROUP HEALTU ASSOCIATION OP AMPaRI$; ACCOMPANIED BY B . W. P. DEARING~ EXECUTIVE DIRECTOR, `~fROUP HEALTH ASSOC ATION op AMERICA Mr. BRINDLE. Mr. Chairman and members of the commi tee, my ~ name is ~hmes Brindle. I am presMent of the Health I surance Plan of Greater New York, an activejmember organization o Group Health As~ociation of America. Witl4 me are Jerry Voorhis2 r~ident and executive director of the Coopera4hre League of the Unit States of Ameriøa and secretary of Group Jiealth Association of merica, Dr. W. P. Dearing, executive direct4r of Group Health As iation of America, and Gibson Kingren of the Kaiser Foundatio Health Plan. My testimony today is on beh~lf of Group Health As ociation of America and in strong supportof }]!.R. 9256. Some background on Group Heait~ Association of Amen a may be helpful in evaluating my support of J~.R. 9256. (xroup Health Association of Amtrica is a nonprofit org nization dedicated to improving the availability, efficiency and qualit of mcdi- cal care. ~ Toward this end the as&~ciation works especiall for the creation rand expansion ~f ~ group h~eJth prepayment pla . These plans ar~ actually organizations of ~onsumers and physicia s banded together to provide comprehensive Jhealth care on a nonp ofit basis directly to the individual through group medical practice. The con- sumer pays a regular monthly fee,. in advance, for his h aith care. I would like to emphasize some~ key words and phras s in this definition of Group .Heaith Association of America and app y them to the reasoned ue&l for H.R. 9256. Very amportant is the word "no*profit." It represents a blessing to the consumer, we believe on the b~sis of our experience, i the form of more quality comprehensive me~Iical care for the doll r. Yet it represeitts years of fina~icial diffict4lty and frustration for consumers who esta,blisb sponsoring organizat~onsto try to build a mo em group health program. Our hope is that you will make it more feasible for the nonprofit groups of consumers, working cooperatively with physician , to finance group health plans. Groups of physicians sE~eking fi~nancing for profitmak g medical enterpirise seldom have trouble getl4ng financing from thei local bank- ing in~titutions or, in the case ofiloans of major size, f om outside bankir~g and insurance finns. Wh~n well-to-do physician with estab- lished ~practices plan tO build in ~osperous communities money for capital ex~penditures is readily a~4ailable. For such co ercial and profit-oriented ventures, doctors thave also found the oor of the Small Business Administration opøn to their needs. Many nonprofit group health plans have had quite duff rent experi- enceS. ~ What is required in the consumer's interest an what must be offered to attract physicians to an economically depri ed urban or rural neighborhood may not off~r the most attractive rospect for ventut~e capital. Location and d~sigu of a consumer-spo sored medi- cal group facility is ~b9sed on he ith service requiremen rather than I PAGENO="0123" DEMONSTRATION CITIES A D URBAN DEVELOPMENT 709 solely on fiscal attractiveness. la fling here is for people-not profits. Even for programs that do not i vo ye prepayment, there are areas such as New York City where it i v ry difficult to attract numbers Of highly qualified physicians in o pr tice. I think Harlem i~ otie of the instant areas. The agonizing trials of Group e t Association of America affihi- ates in securing adequate financin s epeated several times in docu- nients presented to the Committe n Interstate and Foreign Com- meree in its hearings on H.R. 298 c n ucted last year. They can be found in the record of the 1965 hear n t pages 313-317. The expressed need today is gre r. The Medical Foundatioti Of Bellaire, Ohio, is a nonprofit com ni y health organizat;ion whose affiliated 16-physician Bellaire Med c 1 roup serves seven Appalachia counties in Ohio and West Virgin . his foundation now reports need for financing $1,230,000 of co s ru tion, compared with $500,000 to $800,000 reported at the time of la ye r's hearings. Group practice plans in St. Pa 1 inn., and San Diego, Caiif., which reported no construction fina c n needs last year now state they need respectively $750,000 and $6~5, 0 financing for needed expan- sion. Starting a new plan depends on a e u te financing. Just this week I was in New Haven, Conn., where er is a vigorous.movement for the development of a group practi acility. This project is unusu- ally important because, although pri ri y for comprehensive patient care on a prepayment basis, it woul pe ate in the Yale-New Haven Medical Center, where it would als er e as an education center to train future physicians in family typ e ical care in a group practice setting. The project is sponsored by t e reater New Haven Central Labor Council and other consumer ou s and has been assured of cooperative participation by the joi t bo rd of the Yale University School of Medicine and the Yale-New av n Hospital. They are con- fronted with the immediate need for fi a cing of $750,000 for a new facility and an additional $500,000 for 1 te expansion. Appended are copies of statements f o these and other organiza- tions regarding needs for financing. They represent, gentlemen, a story f lo t time and dollars, of dedi- cated men having to pay exceedingly ig interest and amortization rates when loans were gained and of m t ping their operating capi- tal to secure as much as two-thirds o t e otal loan. That has been our own experience in New York City. A brief note was sent by me, as pre i e t of the Health Insurance Plan of Greater New York, at that i e. In it I noted that after great difficulty in securing any financi i our early days-between 1945 and 1955-we are now able to get ce tam measure of facilities financing. But only up to about one-t rd of the capital cost. This has forced HIP and its affiliated grou a nerships to use assets to carry the other two-thirds of all const u ti n costs. Further, under New York State insurance law, there a e se ous limitatiOns on HIP's ability to use funds for facilities. To operate in this financial straitjac e h s meant that at times we have had to settle for less than adequate f oil ties and locations for our medical group. We have been delayed f r ears in relocating, mod~ PAGENO="0124" DEMONSTRATION CITIES AND URBAN DEVELOPMENT ernizing, and expanding our medica1~ centers to meet the de and in certain areas. This year we need new facilities urgently. Within the next 2 or 3 years we will require another five centers p oviding compreheiasive medical care. Passage of this legislation w 11 bring these medical care units into being f~ster and with less diffic lty. The sick want and need our attenti+n. We wish to provid it. We cannot-for the lack of available fi4ancing under reasonab e terms. That is oiiie reason why we urge favo*able action on this bill. A second key phrase pertaining to ~roup practice is "comp ehensive health care." This embodies utilizing as extensively as po ible the virtual explosion of medical know1ec1~e and equipment that aye, dur- ing the past 30 years, vastly increased the power of modern medicine to save life and restore and presersre health. Yet this ex losion of medical knowledge has produced fragmentation of service o' the pa- tieiit among an increasing array o1~ specialists and the fa ily phy- sician. Group practice plans elimi~iate this frag~nentatio and pro- vide esse~ntially "one-stop" medicine~ The comprehensive, nonprofit g4aup health programs ave been hailed by many as a significant m~ns of delivering niedi al care to those in need. President John F. Kennedy, in his health message to th . Congress in 1962, said 1~xperience in many communities has proven the value of group eclical and dental practice, where general practitioners and medical specialist * voluntarily join to pool their professional skills, to i$ common facilities and rsonnel, and to offer comprehensive health services ip their patients. Group p actice offers gr~at pr4unise of improving the quality ~f medical care, of achievi g significant ecotiomi4s and conveniences to physic1a~i and patient alike, and o facilitating a wider ~ and better dstrib~ition ~f the ~vailable supply of scarce rsonnel. President Johnson, hi his healthj message to the Congr this year, noted that : Group practice benefits both physicia4is and patients. It makes xpert health care more accessible for the patient. It enables the physician to draw on the combined talents of his colleagues. May. I add that it alsorequires stibstantial investments i specialized buildmgs and equipment. ~ I The; very cost of complex equipi~ient needed for diagnosis and treat- ment, together with the speciali~ation demanded by t e exploding v~luinJe of new knowledge in the 4iedical field, has made he nonprofit group! health movemetit a growing necessity for informe consumers. The U.S. Public H~a,lth Servic~ reports a substantial i crease since 1946 in the number of medical grbups as well as in the n mber of doe- tors participating in group healt~i practice. However, t e growth of consumer-sponsored group practice prepayment plans as been im- peded by the difficulties they face in raising the capita necessary to build and equip their facilities. Because of the heavy emphasi~ on preventive medicine and the con~ trols!inherent in these consumerforiented plans, the 5 illion Amen- cans enrolled in GHAA-associa$ed organizations spent on the aver- age, 40 percent less time in our nation's crowded hospit s in 1962 and 1963 than did patients covered b~ Blue Cross-Blue Shiel or indemnity plans. Obviously this represen~ts an economic and so&al gain, on a national scale, which deserves re&gnition and support. 710 PAGENO="0125" I 711 DEMONSTRATION CITIES D URBAN DEVELOPMENT A major barrier to th~ extens o this nonprofit comprehensive health care to many more millions o mericans is provision of capital loans that can be made available o y t rough Government guarantees and a standby Government loan p o r m when mortgage money is not available through private sources. ~ Gentlemen, you are well aware o e edical squeeze that our Na~ti~ñ is facing. Elderly people will be u ili ing the coverage provid~4 by the Government's supplementary di al insurance plan. Our popu- lation is increasing at a rate far o t tn ping the flow of new doctors. Prosperity and scientific advance ar e gendering a demand for more and better care. The increasing 1ev 1 o education is making millions more Americans aware of both the sy ptoms of illness and of the availability of treatment. The war on poverty, furthermore `11 generate massive and w~l~ come advances in each of these areas. We of GHAA want very much to ~ el , and our affiliated plans want to be in a position to help the people c eve better health care. As Churchill said, "Give us the tool ." We do not want a handout. We ar not asking to be federally suppiorted. Citizens who want our kind of gr u health care know its value, and have shown they are ready to su p rt it with their membership fees. What we do want, and what we vi al y need, is access to adequate financing. Our experience has taug t s that we can gain it only with the assistance of the Federal Gov rn ent. That is why we in GHAA ask that y u rovide for guaranteed loans for terms of 25 years. We will sho as we have shown before- that our plans will provide ecoriomica C re and will generate the in- come needed to maintain fair amortiz tio rates as well as reasonable interest rates. Your help will act as a cat~lyst to ot e nonprofit plans which have been patiently waiting in the wings re d to start when they can get needed financing. And I believe we wi 1 nd that organization funds, foundations, and labor unions, when t e can get a Federal Govern- ment guarantee, will feel it is possib e t make the investments in health care that they wish to make. Gentlemen, our purpose is to serv t e people through prepaid group health care `on a comprehensive, on rofit basis, at a time when private practitioners of medicine as a r up have achieved unprece- dented financial prosperit~y. The grou ealt;h plans, while i~ iking remarkable progress, have been handica pe in their growth by a rela- tive inaccessibility of new capital. The passage of H.R. 9956, I sincerely el will contribute to the solu- tion of this pressing financial problem h ch has had serious impact on millions of our citizens. Thank you. (The attachments referred t~fol1ow:) PAGENO="0126" 712 DEMONSTRATION CITIES AND tTR]3AN DEVELOPMENT WEsTEi~N VNI0N TFLEGRAMS REoi~iv~D ON tGROUP HEALTH PLAN N~ s FOR . ~ MEDICAL FACIJ~ITIES (addendum to testitnony, ER. ~256, by lames Brindle) Dr. ThOMAS WALKRR M~MORIAL HEALTH FOUNDATI N, i Beckley, W. Va. Need so desperate that we ha~re moved ahE$ad and obtained loan o~f ha millian froui three local banks. Pledge support (knot written) from UMW welfare retirement fund plus our "Going Operation" made the loan possible. e break gro~ind within 30 days. Good luck. S JAMES P. BLAND, AdnUn trator. * * * * * * * ~ . , ~ ~ ~ ~ ~ GROUP HEALTH P AN, ~ ~ ~ ~ St. Pa i, Minin. Group fl~alth Plan current~y seeking $740,000 to construct two 10, -square- foot medië*1 centers, one WØst Minneapo'iS, other East St. PauL Financing chief obstaóle. Leaning agen~r consider m$dical center high risk sped 1 purpose building. t~rge support of H.fl. 9256. ~ MAURICE ;r. MCKAY. * * * * . * * * COMMUNITY HnALTH FOUNDA ION, Clevel ci, Ohio. Pwo million immediate need. GLENN WILsoN. * * * * * * * ~ ~ LAN, K~. Oonst1i*~tion and equipment funds nee4ed currently for Daniel B ne Clinic, Harlan, $D5O,000, Mlddlesboro $145,000, ~Vhitesburg $145,000 ; tota $1,240,000. ~ Him ENRICH. * . * * *~ * * * ~ MMUNIPY Hi~ai~rri A5SOCI TION, ~ Det oit, Mich. Present growth and development of program severely limited through in- ability to obtain adequate commercial loans. Current needs : 1. 1966, emer- gency and research wing $440,000 to match $100,000 Hill-Burto grant ; 2. $150,000 for acquiring and renovating nUrses residence ; 3. 1966, $ ,200,000 for building 4and equipping 30-physican treatment and diagnostic con er ; 4. 19~7, $857,000 to match Hill Burton and con~munity fund support for hronic care unit ai~c~ community mental health ce4ter ; 5. 1967, $1,200,000 f *r additional 30~ph3rsi4an treatment and diagnostic c~nter ; 6. 1968, $1,200,000 f r additional 3~pJiysi~an treatment and diagnostic center. ~ . t C~.LuwnLLB.EssE STYN,M.D. * * .* + * * * ~. SAN Dxnao HRALTH Assoc ATION, ~ $an iego, Calif. San Diego Health Association current needs for financing new a d additional clinic facilities plus equipment as foll~ws : Expansion La Mesa linic $66,000. Furnishing and equipment $54,000. Two satellite clinics $400, . Equipment $125,000. F. W. TENNANT, Gen 1 Manager. * * * ~* * * * SOUTHWEST VIRGINI4 COMMUNITY HEALTH SERvE E, INC., Wise, Va. Projected dollar cost for current extension needed Wise Clinic Wise, Va., is $288,000 and Dante Clinic, Dante, $72,~X)0. If additional Inform tion is needed please advise. ROBERT DANIEL, Busin 88 Manager. * * * * * * * PAGENO="0127" JAoi~ G. MONRoE, AdminS8trator. * * H. F. NEWMAN, M.D. * * 713 * * * * DEMONSTRATIO~N CITIES D URBAN DEVELOPMENT 1~EALPH I S NOR PLAN ON GRF~.&TEB NEW YORK, New York, N.Y. Needs about 5.2 million for bra c nters, renoiration, and enlargements. JAMES BRINDI~. * * * J SON Hn~LTH FOUNDATION, INC., Birm~g1i~a~, Ala. Our estimated dollars cast ~ieed for financing new and additonal clinic facilities and equipment is $4~OO,OOO. * * GROUP LT COO~PEBATIVE OF PUGET SOUND, Seattle, Wask. Current projected need for hospital e slon $3.5 million and diagnostic and treatment center additiotis $1 million. 1 $4,500,000. GROUP HEALTH ASsOcIATIoN, Wa$hington., D.C. GHA long range plan envisions nee or our regional medical centers. Con- struction and equipment cost eatimate i 11/2 million for each center. FRANK C. WATTERS, Ewecutive Director. * ED CAL FOUNDATTON OF BELLAIRE, Bellaire, Ohio. Medical Foundation of Bellaire, non ofit tax exempt community health or- ganization operates in conjunction with -ph slcian Bellaire medical group three clinics serving seven Appalachia counti in hio and West Virginia needs over the next 2 to 5 years to replace and ex nd ntiquated and inadequate present faciliti~s include when financing is avail le, 1,080,000 for central health center, $100,000 for branch clinic, $50,000 for e nsi n of other branch clinic. GEORGE S. GoLDSTEIN, Secretar~i-Treas~irer. 0 ~ YAL N ERSITY SCHOOL OF MEDICINE, New Haven, Conn. There is now a vigorous movement f r th development of a group practice facility in New Haven to serve people i hi metropolitan area, and shortly it will be confronted with the problem of isi g funds to meet construction and equipment costs. The plan here is unusu 1 y i portant because though primarily for comprehensive patient care on a pr ym ut bascis, it would operate in the Yale-New Haven medical center comple , til zing specialty and inpatient hos- pital services already available, and wou d als serve as an education and train- ing center to prepare future physicians f r g neral and family type care In a group practice medium. The plan is being vigorously sponsor by he Greater New Haven Central Labor Council and other local consumer c it ups, hopes also to serve welfare agency clients, and Is warmly supported b a r Richard C. Lee as a community project. It has been assured cooperative rti ipation by the joint board of the Yale University School of Medicine and th al New Haven Hospital. My preliminary estimate is that land ac u sit! n, construction, and fixed equip- ment for the primary group practice will o t a out $750,000, and that secondary facility developments for regional-type ex a 5j n of the plan over the following 5 to 10 years will cost about $500,000 mo e. Snce the plan would utilize Yale Medical Center specialty ambulatory ser ic s nd hospitals and possibly other community hospitals, it has no apparen; ee to meet hospital construction costs. I hope you can utilize this information fo ~ t ongressional committee. Mr. BAiuuirr. Before the next wit e , just want to note that our distinguished colleague, Mr. Henry nz lez asked me to extend his * * DR. I. S. I3~ALK. PAGENO="0128" 714 DEM~NSTRATION CIT~S AND T4BAN DEVELOPMENT greetings to you and express his regret tI~at he could not be here oday in person. tTnfortunately, urgent busitiess makes it impossib e for him to be here but he wanted you to kn~w that he looked forw rd to reading your testimony in the transcript of today's hearing. Mr. Voorhis, you may continue. STATEMENT OF I~RRY VOORHIS, EXECUTIVE DIRECTO ~ COOP~ERATITh LEAGUE ~P THE U.S.L Mr. Vooi~rns. Mr. Chairman and m4~imbers of the committ e, my name is Jeri~y Voorhis, and I appear be1~re the committee on be aif of the Cooperative League of the U.S.A., ~vhich organization I priv- ileged to serve as executive director ~nd president for the ast 19 years. The Cooperative League is a national federation of all k nds of mutual and cooperative enterprises in the United States. Its a hated organizations comprise about 16 million different families i their members, a~id they are owners of their c~wn businesses which se e their needs for i~isurance, housing, marketi~g of farm crops, proc rement of farm supplies, credit, health care eiectricity, and househol needs. The purpose of the Cooperative Leagtfr is to encourage the us of the voluntary self-help method of solvi~g problems which in ividual families cannot solve alone. Our support of the legislation bef~re the committee has een re- peatedly and specifically expressed by biennial congresse of the Cooperative League which is the supreme delegated auth rity of our organization. The reasons for that support are as fDhlows: Like th~ Group Health Associati~n of America, the Co perative League b~iieves in the better and mote rational org~nization of ined- ical care and health services in our oo~intry. We do not belie e in the interfereilce of professio~ial practic$ of medicine by lay en. We believe that there are four basic ele4ients in that more rati nal and effective organization. One is group practice of medicine by balanced groups of doctors and professional medical personnel. A other is prepayment of the costs of medical tare on a budgeted bath so as to bring the best of modern medical care. within reach of as la ge a per- centage of our people as possible. ~ A third is preventive compre- hensive, regular care, aimed at maint4iining family health an keeping people otit of hospitals rather thar~ episodic medical care which is necessarilly limited to attempting t~ cure disease after it has been serious. And the fourth element is $he opportunity and th responsi- bihity ~yf~ groups of our citizens to ~ct voluntarily in the ormation of .group health plans in collai~rat~on with groups of th ir doctors and nurses. Such plans are to be found all across our country, in a 1 sorts of communities, among all kinds and groups of people. heir basic philosophy is that the doctor shotild be provided with * n assured income as a reward for keeping people well instead of having to depend ~on an uncertain income de~ived from people `after they have becom~ick. We snpport this legislation-H.~L 9~56-because we ar convinced it is necessary if voluntary constru~tive action by consume of health PAGENO="0129" care is to i DEMONSTRATION CITIES AN ITht AN DEVELOPMENT 715 where~c action - centive on the hospitals and care and the a easily Ufli problem of receivir This has always much benefit volu itary actic bee: s9lved, 5 `and ~ribers to ~ution to 3 where ~T to iate v though cud have as secun plans throt profitmakin the fact. - for 11 fac. borr'~w m~ es, clinic build ire to oi 60-878-66-pt. 2-9 PAGENO="0130" *1 716 DEMONSTRATION CITIES AJ~D U1~BAN DEVEL~OPME TT commtrnit~y is 30 miles away. And no faci1iti~s exist wh re efficient medicalservicecould beprovide d o~ where, in fact, well tr med mod- em physicians are willing to pract~ice. So the need is oh ious. The local b~k is quit~wihingto make $ lotui to ftnance the need ed facility but it ;Si~T1Piyd~S u~t have ade~ua .. f~reserves and is not la ge enough to take thG adflhitt~3d fl8~ ~f financ4i~ a~ buii~drng which it ould obvi ously b~~re ~onsi1eiab1e difficulty in ~ellrng in case foreclos ~re became necessary. Were H.R.~ 9f2~S6 on the~statute books the local ank could * and would make this h!~an, doctors could be attracted to this corn- munity and the ~heiv1th of the people protected. If the gua antee were available other inst&itces would come forward without d awing any real asthstance from the ~ GovE~rnm:etit except that guarante . Man'y similar exampk~s could be given, both from other ural areas, to whi~h the legislation would gi~e preference and also rom cities where. ~~bbr~ponsored~ and ~ coope$rative ebnsumer-spons red group health plans could care for much larger memberships i only they could receive the finan~ing for the additional physical fa ilities they need. ~ Finally. ~ we submit that with th~ advent of the medicar ~ program, the pressure upon existing health facilities will be greatly intensified. indeed something approaching a crisis in this respect may result What better way of forestalling such a crisis than by e icouraging through a loan guarantee program~ the kind of constructi~ e action on their own behalf which groups of ~ur people are endeavo ing to take throu~ti developing of ~group he~th plans like those ab ut which . I have b~en speaking? ~ In ti~iies like the pre~sent it ind~ed seems the part of b th wisdom and statesmanship to encourage voluntary action by the p~ opie of this country in attacking and solving ttheir own problems-th t of health econolilics `at their forefront. For these reasons The Cooperartive League of the Ui ited States hopes that this distinguished committee will report fav rably upon H:R. 9256 and the other measuresnow before you and that they can be enacted into law at an early dat~. (The following letter was subn~itted for the record:) ~ . THE C4OPERATIVE LF~AGUE OF THE TJ.S.A., ` ` Wish4~gt~m,D.C.,Ma ch2l,1966. Hon. W~LLIAM A. BARRETT, (ihairman, Hou$ing t~nbeornntittee of the House Banking and Curr ncy Commit- tee, Wash4ngton, D.C. DEAn CONGRESSMAN BAItIim : In rec~?flt testimony concerning : .E. 9256, the medical facilities loan guarantee bill, the Oooperative League re erred to the comparative studies that have been made concerning actual util zation of in- hospital services by members of the three most popular types of m dical protec. tion p1~ns, viz, Blue Cross-Blue Shiehi, indemnity plans, and G oup Practice. The results of the studies reveal witl~ force and clarity that mei bers of group pract1~e plans make less ~ise of hospitals than the other two types of protection, refleeth~g the result of early treatmenli, preventive medicine, and a program of using our medical resources to prevent ~ deteet at `an early stage he conditions which ~therw1se lead to bospitalizatioi~. ~ The ~o1lowthg chart co~rlng 3 rece*t years is based on numb r of hospital days per 1,000 persons covered by the S types of protection i~i the Federal employ~es health program: PAGENO="0131" \.&-`.,.`., ~ private citizens insurance and c the cit appre Sincerelv, an additional $750 million a the health and medical care )mmittee report. KAISER DEMONSTRATION CI~IE~ AN ~BAN DEVELOPMENT ~aI emploijees health pro r$'i-~Jwpe ~e ó~for 8~c~ntract year8 comparing `idnal Gronp Practice p1~,ns, non te~aity in-hospita' services, both 7:17 Plan ins Shield ~rvices may formed as~ rent systems Jross-L. nip-Practice plam Per 1,000 persons T0:O 10.6 4.0 8.2 5.4 : ~ :::i 2.6 1.4 ~~.iflj niedic~a1 s PAGENO="0132" 718 DEMONSTRATION CITIES A*D URBAN DEVELOPME T than li,300,000 members in O4lifornia, Oregon, FT waii, and Washin~ton. I Kaiser Foundation Hospitals otvns and operates 15 ospitals ; a 16th is under construction, and thr4e other hospitals are sc eduled for completion by 1970. ~ All but two of th~ Kaiser Foundation hospitals inelu e extensive outpatient departments as an integral part of the facility. ~ n addition to the outpatient facilities locatedat hospitals, our medic 1 care pro- gram qperates 29 detached outpatient clinics. In our ex erience the current `cost of a 10 to 12 d~tor 4~itpatient facility-md ding land, buildiflg, and equipmetlt-4s betw~ii $400,000 and $500, Eaolj new heaith pJa~n member ~in the Kaiser Foundat on medical care pi~ogram means at least a $t~OfInvestmeAnt ~fl medic&l f cilities and equipment-almost a million dol1~trs to serve 10,000 me bers. The fixed assets now employed in our n~edical care program co t more than $90 million. ` ~ Obtaining capital on the scale required to provide co prehensive *~ health care is a formidable obstacle for small existing pla s, and may be almost insurmountable for ne~w plans. One of the. mo t important ways to encourage the growth andi development of `group- ractice pre- payment plans is to me~ke aiaila~ `insured loans for faci ities. THE KAISER FOUNDATION MEDIOJ~LL CARE PROGRAM HAS E PERIENCED DIFFICULTY IN OBTAIN~NG LOANS FOR FACILITIE During World War II, when th~ health plan was organ'zed member- ship was restricted to employees of the Kaiser shipyards i Vancouver, Wash., Richmond, Calif., and later at the Kaiser steel plan at Fontana, ~ Calif. With the close of the wart in 1945 the plan was m de available to the general public in these commuilities. We had suffi ient capacity in the existing medical facilities ~o that no facility pinc ` was felt for sever~iJ years-and thus we did ~ot face a large capita requirement until ; a good membe~ehip' base I~ad been developed. Even with an excellent' bankin* relationship wewere o en unable to finance facilities rapidly enough~ to meet the demand fqr health plan coverage, and membership in ~he plan often was c'osed to new enrollment. ~ As the health plan has grown and proved its financia~ soundness, it has become easier to secure conventional financing but *e are unable, still, ~ to obtain much of the necessar~ capital require to meet the steadily increasing demand. ` . , In! 1962 we concluded an agree$nent with several banks and insur~mce I com*anles for loans of about $3~ million for facility e pansion have recently concluded anothef loan agreement whic will increase I this financing to $50 million. TI~is loan will make it poss ble to develop about $60 million of `additionaHhealth' facilities and thereby increase substantially our capacity to serve the co~nmunities~ in which we operate. J This brief recitation is intended to show that the I~aiser Founda-., tion medical care program has experienced and continu~s to experience many of the financial problems twhich beset group prac1~ice plans. We believe a very formidable obst~le to the growth and c~eveiopment of gro~ip practice., health plans wi'l be minimized through a Government program for msurmg mort~a~e~ loans for health care f bihties PAGENO="0133" F DEMONSTI NERD ~FOE I This i Soon as po 1 and ur DEVELOPMENT 719 GREATEST IN OUR HISTORY CARE I~A~ LJSHED POLTOY FACILITIRS PAGENO="0134" 720 , ~ IYE-MONSTRAT1ON~ CITIES ALID URBAN ~ DEVE.LOPME T Mr. EtIN~R1~N. Thank you, Mr. 4hairman, for the opp unity to present~ur views in this matter. Mr. BARRETh The next gentleman$, Mr. Dohert~r. You may continue, Mr. Doherty. Mr. DoHEm'~. Thank you, Mr. Chairman. STATEMENT OP JAMES P. DOEER~Y, LEGISLA.TIVE REP ESENTA- TIV~, APL-Cie; ACOOMPANI~~ BY RIO~HARD SN EMAXER, ASSISTANT DtR~OTOR OP T* ` * AFL-CIO SOCIAL ~C1TRITY DEPA~MENT Mr. DOHERTY. Mr. ~J1~airman, I h~Ve prepared a brief sta ement and I would like-I would request the jtatement appear, awl will read a brief summary. Mr. BARRETT. Without objection, so ordered. Mr. DoHEi~ry. We appear before you in support of IE-I. . 9256 be- cause we believe this bill to provide mortgage insurance nd to au- thorize direct loans by the Housii~g and Home Finance drninistra- tion to help finance the costof con~ti~uoting and equipping f ilities for 1;he gro~ip practice of medicine ` an~ . dentistry will help t lower the cost aiic~ raise the qualityof medici4 and dental care. Qual t.y medical care is a right and necessity for all ~f th~ American people nd can no loriger.beconsidered a luxury. To meet the increased demands fbr medical care resulting from the increased expectations of the consui~'ier as well as the improved ability of our senior citizens to pay for care because of passage of medicare last year, not only will more medica~i manpower be a necessity, but also improved efilciency in the use of the manpower we now have. Because of the increase in medical knowledge, the medical profes- sion has had t.o* specialize. There ~re now 35 specialties in medicine. This division of labor brings with ~t the need to organize the various speciali~ed skills and disciplines asiwell as health facilities to provide health services efficiently. At the same time, the medical plrofession has become far more de. pendent upon diagnostic and thera$utic equipment as aids to di agno- sis and treatment; Such expensive equipment is oniy economicali~ feasible in such institutional settings as hospitals or group practice clinics. At issue is not only efficiency, but the quality of care as well. In contrast to solo practice, the grout practice of medicine can provide higher standards of recordkeepir~g, of evaluating performance, of interch~mge of professional opinio~i and of opportunities for continu- ing prOfessional education. Of p~4rticular importance is teamwork of the many specialized medical and Iparamedical personnel * in bringing the whole range of medical skills th the patient as a whole person. It is because of the inherent advantage of group practice to b$h the con- sumer as well as to the professiona]ly oriented doctor th~t the group practice of medicine has been growing rapidly in recent yea~'s. Where the group practice is combined with direct paythent by con- sumers to provide comprehensive -health care, the medica group has an incentive to practice preventive ~medicine because financ al responsi- bility is not divorced from medi~al responsibility. Th success of comprehensive, direct service, gr~up practice prepaym nt plans in I PAGENO="0135" DEMONSTRATION CITIES A D preventing sickness is sÜbst~tntjat&i and surgery than for convei~tio~aa1 f In view of the many adva~ita~es c gress should give future con~iderati( encourage the growth of gro~tp pract Mr. BARRETT. Thank you, Mi~. Do (The complete statement of Mr. I STATEMENT OE FEDERATION ~BAN ~DEVELOPMENT 721 y lower rates of hosptalization n~ of insurance. ~( ~up practice, ~e believe Con- t~ other measures which would ~ ~epayxtient plans. ~rt~r. hè~ ty follows:) AMERICAN ~NIZATIONS plans, care in this The recor financial ba need is v a re~ - to~ people, is, I am The S history by pa~ virtually all are not so naive as' to medical care will solve ai dous pressure on supply will, for the first t. nurses, n.~L - This Li message to ower will not, in [cal care. It takes anpower shortage, Therefore, lied. Icy. vv ~e carriage ea 196~3 n ~ n medicine, the tii ~r) tc PAGENO="0136" 722 DEMONSTRATION CITIES M~tD URBAN DEVELOPME~ P 19th century general practitioner eotild~ render the entire spectri m of then- known medical * services, but in 1966 we cannot expect and we shoul not expect an internist to perform heart surgery. The growth of specia1i~ation has been accelerating. In 1940, 21 p rcent of the doctors in private practice were specialisi~s. In 1964, 69 percent wer specialists. Four out of five medical students are i~i training for specialty pr etice. The idealized general practitioner is rapidly 4lisappearing from the AmE~rican scene. Along with this trend toward speciali~lttion is the increasing de~endence of the medical profession on expensive 4lagnostic and therapeutic~ equipment, usually available on1y in such institution4l settings as hospitals or gr~mp practice clinics. There1~ore, phsi~ia~is are lncr~4singiy establishing offices ~vithin or in close pr~xim1ty to hospitals. What it comes down to is this. Advantes in medical knowledge an technology mean that medicine can no longer be prt~cticed efficiently without rganization of medical personnel and fat~ilities and that teamwork is becoming increasingly important as a necessary element to both efficiency and to quality. Specializa- tion without cooperation is costly, inefi~cIent, and detrimental to uality care. These principles are recognized in our l~etter hospitals but the iss ies are con- tinuousl~r and deliberately being confuse~l by such empty slogans a ~ "socialized medicine:" "free choice of physician," "lr~terference with the doctor- atient rela- tionship,'~ and "interference with the prac~lce of medicine." Solo, individual practice in medicine is ~wt'only inefficient but of re atively poor quality a~ well. Quality care requir~ ~ndards and procedures f r evaluating perfortha~nce. This kind of review and frahffitlon of the practice o medicine is all to thegood. We need more of it. Dr. George Baehr, former president df the New York Academy of Medicine, warns that "Under the prevailing system of solo practice, there ar no enforce- able standards of quality, no supervision of professional perfomai e, no deter- mination of errors of omission or commission in practice, no me surement of waste In unneeded services and coats ~ * *`~ Some measurement of both waste an~ lack of standards of prof esional per- fornnlhce Is Indicated b~ the expeHei~ce ~f Feidertii employees under their multiple choice health benefits peogran~. Federal employees ma elect their health b~ne~ts coverage under three o~ions, namely : Blue Oross Blue Shield, commeis~al insurance, or a eomprehen~ive direct service group ractice pre- paymetiti plan such as the Kaiser Fou4dation health plaiis on th west coast and. in ITawail, The Health Iiisurance P'an of Greater New York, I roup Health Association in Washington, D.C., and others. Those electing B1u~ Shield coy- erage for surgery had 70 surgical procedures per 1,000 subscriber~ for the sec- ~ ond contract year, November 1, 1961, ~ to October 31, 1962. Thpse choosing group practice plans had 89 surgical p~,ocedures per 1,000 subscribers. Confirmation that these statistics for group practice plans refie~t a substan- tial reduction in unnecessary surgery comes from medical audit ~ which have been conducted by the Schools of Public Health of Columbia 13 iversity and of the University of California at Los 4~ngeles. These medical a dits indicate a suhstántial amaunt of unnecessary ~ surgery under prevailing patterns of practice, particularly for hystereetomie~, tonsillectomies, and ad. Loideetomies. A stn~y sponsored by the University~of North Carolina and th Rockefeller Foundatton during 195~-54 among gen4'al practitioners in the St te indicated the following weaknesses among this *oup of solo practitioners (1) limited history taking ; (2) limited physical ex4minations ; and (~l) limite ~ use of aids to diagnosis. We do not claim quality medical carfe automatically and neces arily results from the association of doctors and ~other paramedical person el in group practice but we do believe group pra~tice provides the necessar framework within which quality control can be built in. Herman and Anne Somers, in their c~ass4e in the field of medical economies, "Dootor~, Patients, and Health Insurance" : point out that : "The reasons for the positive effeet~ of group practice on qua~ity are both obvious ~ and subtle. The structural ~r institutional factors in~lude mediciil center o~'ientation, higher standards of ~hysical equipment and fae'lities, record- keeping group standards of profession~l procedures, easier acce a to a larger range of specialized personnel, more i~equent exchange of prof ssional judg- ment, more time off for refresher and po~t-gradnate courses, etc." Dr. Gtinner Gunderson, former presld~nt of the American Medic I Association, has said, "There is no question that group practice can provide better medi- PAGENO="0137" I DEMONSTRATION CITIES A~ U BAN DEVEtOPMENT 723 And Dr. Waltnr Bau~r, ~hief of e ici e of the Massachusetts General ~;, says, "I don't ~ee honk we can ~ o~ide good medicine without group practice arrangements are ~ Inc e sii~ subst~Uit1al1y in `numh~r, par- _v in the West and Midwe~t. Taki tlj Unite4 States~as a ~rho1e, there * ~, were 368 group practice units in 194~ B 9~ the total nurnbe~' of group prac- tice clinics had reached 1~1~4. ~ ~ Group practice will continue to grow in r sp use to the techijIc~tl tttvatic~s in ~ medicine and resulting specializatlozi. e be ieve this * development to be so' important in re1atio~i to sffiqient ut1ljzat~t o~ medical manpower and to pro- ` viding the best possible qu~Uity ç~ ,m~dici e that every posnible effort should be : made to stimulate an even f~tei~ rat~e. of r t in group practice. ` We have been particularly ,tin~res~ed b l~E~ achievements of group practice : where the medical t~am$~flt~tc~ 4i~ect1y il~j~ groups Of consumers to provide comprehensive bea~t]i se~~ft~es ot~~n p~epai ~ ~s. quito iitn~ll~, the con~umet~ pays so much per month to the ~iied~ea1 r ~ to ~keep hth~i' well. Under this type of arrangement, the medical gre~ip h ~ a~ incentive to practice preventive mecTiein~ because~thepaU~xit wh~ boeom ic becom~ th~ fhianeial as well as the medical responsl~i1ity o~ tl~e prejaid e It plan. Contraat this with the 1l~*plcal i4~iii~e~ pi ~ ieh oal~i*Imbur~es th~ patient ` when he becomes sick. * These sickness I ~ ra ce programs typically exclude payment for, preveati~ care and physical ~ i~'nations. Under sruch programs the doctor assumes no financial $sponslbl It 1~ cause . his services are paid by a third party. Early diagnosis a*d t~ea `~ t re~ hi 1~act~ effectively deterred ~ ` in the typical sickness Insurance ~lar~ thr u h he use of "deductibles and co- ~ . insurance." That "an ounce of prevention ~ is wort und of cure" has been weB documented in the Federal empioye~s'hè~lth ne ta progi~am. Just as you find lower rates of ~urgery f r tl~ ` comprehensive, * direct service, group practice, prepa~inent ~latis~ ~o ~cai ~r 1~ lso find lover h~pital1~itlon rates under these plans. ~ . Federal employees enrolled In B~ue Cross ~i t~ ~35 ~onmaternity hospital days per 1,000 subscribers in the ~oiltra~t year 1 0 . Those electing the cotamer- cial insurance program had 707 ~iosr~1tal ~ and thOse choosing the corn- prehensive plans had only 430 hO~pltal ~lays. * ~ In view of the many advantages of gtou * ra tice and particularly of group practice coupled with prepayment w~ belie e t e objecti~ ` of H.1l. 9~5O-to assure the availability of credit for group pr tic plans-ileserves wholehearted support. ` In fact, we believe Congress ~h~uld' do el~ more to promote the growth of more rational methods of org~nizij~g h a th services. `Therefore, we ask specifically that the O~ngress soon ~lve cons d ra iOn to the need for additional support and encouragemhnt for gro~p practi ~ pro ayme~it plans through grants In aid for construction of necessary fa~ilitIe nd initial staffing similar to the Community Mental flealth Oenters Ac1~ as eit e4 in the i~65 `session of the 89th Congress. Mr. Chairman, I apprecia~t~ this oppOrtu ~ ~ ~ present the support of the AFL-CIO for hR. 9256. Thankioi~t. . Mr. BARRETT. At this poi~it iki the re rd I would like to introduce a statement for the record by. o~ir colle g e, Mr. Moorhead who could not be here today. He `is intróduøing t o statements in support of H.R. 9256 by Dr. Dean £ Ola~k, dire t r, program in Medical and Hospital Administration at the Unive ~ty of Pittsburgh, School of Public Health, and Dr. Leslie AL o i~ burgh, Pa. (The statements referred to 4ollow :) PAGENO="0138" ~ I ~ ~ 724 I~MON$PRATION CITIES AN~ URBAN DEVELOPMEN ~ ~ CoN~4Etss OF ~HE UNITED STAPES . . ~ HoUSE o~ REp~EsENPA IVES, Wa~8hington, D.C., MGrC 11, 1966. Hon. Wzu.~ii~ A. B~B~rT, ~ Chairman, Sv~boonvmittee on Eousinqj, House Ba*iking and Currency Comnvtttee, Hou$e of 1i~epre8entative8, Was~ngt~n~ D.C4 ~ ~ ~ Di~iAii 1~~L C1~AIEMAN : At . this point i~ the record of the Sub * mittee cm House h~árings to consider H.R. 9256, twhlch would ~toVlde ba s from the Federttii~oyeinnient for group practice radlities coilstrtietion, I w uld like to introducetfor the committee's eo~isiderath~zrsttt~inentsby tWo of my onstituents, speaking ~on behalf M the Group ~e~lft~A~dation ~ of America, Inc. They are : Dr. ~Dean A. OIMk, dfl~e~tor, PrOgII in M~dftYal and Hos~i I Adminis~ tration sit the Vntc~ersit3fr ~ P!tti4bflig~i iS~hool of :~$4J~fl~ ~ealth; * hose state- ment Is entitled, "Organization of Med*~l Care ia the 20th Cent ry Impera- tive," and Dr. Leslie A. Falk of Pittsb~gh, Pa., Who expresses hi ~ views in a letter to 3rou. It i~ their view that this 1~latien Wtli make mortga e insutance available for group facilities which wilibring expert health care t the patient 8~nd enable physicians to draw on the c~mbIfled talents of their c ~ leagues. s1j~±ereiy, ~ ~ ~ ~ ~ ~ . ~ WiLLt~M S. ~EGA1c(1ZA1~ION OF' MEDICAL CARE 4~~ua ~or~ c~r~rua~ IMPE PINE ~ . (By Dr. De{n A. Clark) A vfrtual explosion of medical knowl4dge during the past 30 ye rs has vastly increased the power of modern medlcl$e to save life and restore and preserve health. It has produced antibiotics, vaeóInes~ and hormones that ar true miracle drugs * for the prevention and cure of ~lsease. It has introduced isotopes and electronic tools for diagnosis and treatment. It has advanced surgery and anest1~egiclogy to new levels of lifesaving. It has brought reb bilitation to helpless~and hopeless crlpp1~es and returi~ed them to useful life. The e~xploslon of medical knowledge ~ia~-revolutionized the way doctors work. The da~ has long passed when any s1~agle physician-no matter how talented he ~ be-ean hope to proiride to ai4r one person the best of m ical care in all o1~ the many areas otntediclne. ~ Appll~ation of the vast body of new ~o~1edge requires a batte of complex, expensi tre tacilities and equIpment-m~haaleal, chemical, electr nic-for diag- nosis and treatment. Specialization h4s necessarily grown by lea s and bounds. But asmedical care has become more ~ffectlve, it has grown mor complex and mOre fragmented. , The struggle of the doctors to achieve effective organization o medical care has `J~een in progress for decades. and takes many forms. The full range of specialists are associated in organizej. fashion in medical schoo s and medical school t~acbmg hospitals The associ~tion of specualists in sing and multiple spécihity grOups also continues to inc4ease. . They find professio al satisfaction and 1n~provement in their combined ~nedical ~ompetence throug mutual asso- eiat1~n~, as well as econemy in the ~jo1nt use of equipment nd supporting ~frsèu~ieL I ~ . Ygt Ji~e medical schools teaching h~sp1tal and specialty group find it almost irnpö~ib1e to. provide the complete 4amily medical care that onsumers need and e~eet. They do not wish to wa$ta their talents on the co ghs, colds, and bellyathes that~ constitute the nmne4~al bulk of family health ~ oncerns. Medical group practice carried on ~by a balanced team of fa ily physicians and specialists has been evolved by some members of the me ical profession as their answer to the problems of both the physician and t e consumer in organization of modern medical care. Such medical groups rovide the full range of immunizations and other p~eventive services to maint in health diag- nostb3 services, and care of minor ifluesses as well as of major medical and surghial problems. These medical gr~up practices have evolved nto two general typest I 1. Physician owned group pra~tices which deliver care o patients on a fee-for-service basis. These gre p practices, in general, pro ide fine service. I~i general, they have no prob1en~ In obtaining financing, bu this bill would PAGENO="0139" 725 DEMONSTRATION CITIES AND URBAN DEVELOPMENT be useful to them if they needed such financial help. It is estimated that there are 750 such groups in the country. 2. Group practices serving consumer-sponsored group health plans. SPECIAL CHAEACTuRISTIOS OF GuOUP IIEALTH PLANS Group health plans are unique among or~ anizations which provide health benefits on a prepaid basis, in that. they a~ sui e responsibility to their enrollees for the availability~ quality and acceptabili y f medieU~: pare as well as for pay- ing bills. Subscribers, particularly in m ~ t ~ * ;::~:. understandably tend to focus primarily on finances, Ful y aid bei~fi$ Without deductibles, extra charges and coinsurance . are attrac lye to * them, The normally healthy family inclines to take availability and qu~ lit; of medical care for granted until crisis strikes when their own doctor, is not valable, or at night or on a weekend when any doctor may be diffleult to eome by. ~ ~ The readiness to serve of a medical gro p brough rotating coverage at all times, and the assured quality of servic t rough professiOnal collaboration aznoirg doctors eeleeted~ftr their qualifieM z~s cernijatibllity and responsibility, are important attributes of medical care p ov ded through group health plans. Although not so Immediately 4~bvione as ab en ~ of deductibles and coinsurance they may be lifesaving assets in serious n ~ ica emergencies. In testimony before the HoU~ Interst t a d Foreign Commerce Committee then considering a similar bill ( .R. 2987 n Ear~b 5, 1965, the representatives of the Group Health Assoelatioi of Ame L a, he national association of group health plans reported on a teleg aphic s~ `v ~y f building needs of its members. These needs came to millions ~ f dollar 0 )nsumnlate 1965 buildIng plans, including a million dollars in th Appala ~i an area alone. Group health plans, most of which are nonprofit as well as o sflmer4ponsGred, do have difficulty in getting needed funds. Perl pe becau group health plans are different and are pioneering a new approa IL, not usli the traditional fee-for-service, aild are often opposed by medical si ~ieties, len ers have been reluctant to provide funds. I believe these group health plans re desirable and Should be encour- aged. I think HR. 9256 will be helpful to hem. It should be Supported. Gnou~ HEALTH £SOCIATION OF AMERICA, INC., . Washington, D.C., March 8, 1966. Re need for Federal loans for group prac . ~ construction. Hon. WILLIAM A. BARRETT. Chairman, FIuboomnv~ttee on Housing, H U eBa*kMg and Currency Commit- tee, House of Repre8entatliees, Washi'ii t n, D.C. DEAR CONGRESSMAN BARRETT : Need for 1 ~1slat1on such as Hit. 925(~ as part of H.R. 12341 is clear and pressing. T .s copeluslon Is based on the actual experiences and observations of our corn a ttee members, which I personally endorse. There now exists what, in practice, at o nts to discriminatory exclusion of gi~oup health facilities from effective ace ss to capital. At present, banks are reluctant to lend even 6-percent money t tOil )roilt sponsored group practice clinics. Such facilities are not eligible ~or S al Business Administration loans. In addition, most are not eligible for Hill B ft a moneys because they are not hospital-affiliated. P~ounddt1onS are almos ~ 11 " ~therwise committed." The following letter from a strugglin , hig i quality, nonprofit sj~onsored, GHAA member, medical group practice i i t ur community offices in Penn- sylvania describes the problem clearly. "The task of getting financing to put u h adquarters clinic for our orga- nization was long, involved, and disappoinLl ~. It was costly in terms of time and energy. "Negotiations started officially in October 1958 and culminated with a loan approved by Nationwide Insurance Co. for $ 40,000 in January 1961. It was a 6-percent loan based on a first mortgage with . loan fee of $1,700 and other costs. PAGENO="0140" `726 DEMONSTRATION CITIES ANIi URBAN DEVELOPMEN ~ "The following sources were approached with correspondence measuring approximately 3 thehes in thickness: *bert and Mary Lasker Fe dation 1~Qwarci ~ReiDjz Endowment t~'Orazi Investment Co., S crainento, I Calif. ~~ibe 6~ Security nan. New ocrk ~ untPei~kty te th.ke on a reh proj- ~ eet on financing g~'onp p1 s *arions insuran~ Comparsi ~ :rtiauranee ageneie~ ~tartgage cempailies ~ ~ l~nks ~ea1 estaI~e ~ompan~}es "Even i~i the case of Natto~wide 1,aui~mce~ they ftrst tnrne~ do ~ ~ the lout and subs~MiuentIy accepted and approved i~. "We ho$ ~ that this bi~ief ~ report ~h~4s the gr~t expeudithae f time and energy necessary to get ~naneing. ROXX4ember that ~nanciea~ we ap~jroaehed were deu ~. ~ hug with a~ economlcaUj suesf ... ~ UI ~UT~ I*~CUO~ With d monstrated earning j*wer and ob~ioua ~otenUaL "In my stwn ew years of business e~rie~iee, in~h4*ing l~os~ital adininistra~ tion, I hai~e m@t eneounteted such a th~point1ng reaction as our o ~ it situation bare portmy~L" ~ Another nonprofit eommimity-sponso~,a~j medical group practic~ located in eastoru. O1~io, wbieli I also kll6~w well, 11a4 tills to say: "OUr eaperienee has l*e~u that noup$fit, group praet~lce prog~tms cannot ~ttrin~aUy iserraw from commercial souree~ . "We learned thei~, that * commercial b4nksi ~ insurance compa~iies are not rn4ter~t4t4 In ~e~tiitg Ut ~wograwa llk~ oura The reason we where toJ~d is that a g~~ou~ ~pl~actice elinic building h4 Srn~1i a narrowly c4rcum~cribed, one- purpose building, thatin the event we we$ to default, and the bank ~r insurance company had to take over the propertfr it would be exceeding1~ difficult to find another user. The alleged danger t4 the commercial lender is ~uihanced by two additbmal ~torn: (1) We are a noflprofit organization. A1th~ugh at that time (1957-58), the foundation had nc~t yet officially been incor~orate-l, our program was owned and operated on ~ "trust" basis by the m4~dica1 group. Nevertheless, we were considered to be Working within a nonWofil~ framework. (The foimd~tiou was acti*lly incorporated in October 1958.) App~rently, corn- mercial banks and . insurance cQrnpanj~s frequently consider n$p~ofit orga- rnzations not to be paxticularly good ~4n for investrnents (2) We operate in a small f.own semirural ~jxea The flafrieville Clime is in a corn~iletely rural area, w1~1eh, in the eyes of the lend~i~, rnádè the one-purpose n~ture of the building ~ even more dangerous from t1~ pbint of view of inves~raent. This was tru4 even though we showed thatjthe clinic is within reach~ of 15,000 to 20,000 pOopie living In the country and i~i to*vns of 500 to 3,000, wt~bim a radius of about 10 mIles. ~ . [ "In 1961 and 1962 we accumulated *ane reserves in our bu1ld~ng fund. Tt was our understanding at that time that we would probably have l~o have about one-third in cash of the planned construction and equipment cost o~ any facility, in order to borrow the rest from a co~rnercial institution. The ~nly realistic source was again the Nationwide Insurance Oo., but even here spine question existed, because for our $45,000 mortgage for the llarrisvilie Clinic we were required te have our ~hyslcians persosit~1iy sign the note. The do~tors involved were reluctant enough to sign a $4fi,O~Q note. One could hardly~ expect them to sign a nk~te of the size we would be c~nsidering in building a ce~titral clinic in Bellaire!; namely, something in the rang~ of $500,000 to $800,000." Group p1~actice has a record of g~4t accomplishment in pr¼~v~ding compre- hemsive health services of high quality ~t a reasonable cost, in pai~t by reducing tremendously the need for ext~ensive lio~pital days. Its promise cannot be fulfilled unles&the present bottleneck on apital invest- mont is removed. The present proposa~ is a modest one. It is, if anything, too limited, not too ambitious. Since it costs perhaps $200,000 to tart a group health plan, matching grant moneys f~r nonprofit sponsored Small Buahiess Adminlstrattofl Ford Foundation Olin Foui~4ation Availon JPoimdatlon Comth4ni~iréaIth Fund Rockêfeile~ Brothers Fund Maurice and Laura Falk ~unda~on .W. K. Kellogg Foundation* Field Fotu~dation, Inc. Donner P~undation The Rockefeller Fund Milbank Me~orial Fund Phe~uhi Foundation PAGENO="0141" DEMONSTRATION CITIES A experien Respectfully Mr. B~u~r~' DnAR Ma. CHA: society comprise rehab~ in the cost of he It is, as you know, ;ion of ne irect the subec loans I nursi~ PAGENO="0142" I 728 DI~MONSTRATION CIPIES AND URBAN DEVELOPMEN ~ and se~ms to have the cooperation of private lenders. In vie~w of this, ` and in ~ew ~ ~ the ~ fa~ct that FH~-insured loans :`~ el gble for FNMA'S secondary ~market operatio~ what would you thi k if the subcommittee reported abill which ~$~nh~ confine the `new p ogram to FHA-ins~re,d loans ~ Ir~ that way ~e caii get the job done ` t no cost or burder~ to the Treasury. ~ ``.. " Mr. I31UNDLL I a~th sure that the p~oyision to insure loans would be most helpfuL The Kaiser plan representative has mdi ated this would meet a great need, I think titere are instances, howe er, where actually making the loan would move some of these program Iorward, although I would certainly indicate t~at it would be a `great dvantage to have `oan guarantees. ` . Mr. B4~RRETr. ~ Doherty? Mr ~ ` We in the AFL-O 0 would have some re rvations ~bout ~e~novmg the direct loan f ure of the program These re servations would be based up pr catmg group practice upon the Vicissitudes of the mortgage mark t. it is our understa ding that these group loans or' the direct lea ~ are made available in the event that the regular FITA flitancing is not available We thm1~ that it is a Y~ry w'crthwhile supplement to ~ in the bill. " ` Mr. B~uutrn~. Any other commer*ts,? Mr. VooRms. I would like to add a word, Mr. `Chairma ` I wouid agree that `the most imp~r~ant-probably the m st import- ant pro*ision is the loan guarant4 provision because I m certain most .of~hjs wiU be done that way. j .. ` will be very bone~t wi h you and say that~if, in th~ `judgment of this 4~omrnittee this change ould make a difference between getting the bill passed or not, I wou d want to trust to your judgment and pass it with the loan guarantee, ut I agree with Mr. Doherty ver~r much, `that ~2here are. going to `be c ses where the possibility of the direct loan is going to make a lot of difference. They may not have tO be made, bui~ the fact that they cou d be made will, I think, have an e~ect that will be very important, e pecially to small places. I hope that it would ~tay in the bill, Mr. Oh irman, for that rea~son, and Ithink our experi4nce'shows that where e got these twO thi~s coupled together, the a~ount of direct lendm is usually comparatively small Xn order tojmeet the direct loan ople have to show it is impo~si'ble for them t~ get even a guarantee loan from and so,e. This isn't ~oing to be ~asy to do and if this is vailable it is reason*able'that there `should be. . Mr. ]3ARRIiTT. Any more comments ? Mr. KINGREN. The Itaiser Fon~dation Health Plan elieves the suggestion you made to. be a very Ôonstructive one. This s I under- stood yOur statement would make~FNMA loans availabl for group pract~çp fapilities in ca~ 1ocallend~ng agencies were unabl or unwill- iñg to thake loans to qii~.lifie4 borr4~ctrers. However, we ha e one other point. ~ We think that perhaps thfre ought to be a prov sion in the cOmmft~inent for two se~parath loa4s,' one for equipment, hich has a more r~pid ftmortizatic~n rate, ati4'the other for land an buildings. We suggest that a 25-pear amorti~ation period ,. for const etion and a 7- to 10-year amortiza~tion soheth~ie for the equipment. he obsoles- cence rate for certain pieces of. eqi~pment is extremely ra id and `for others it may as long as 15 years. But the average, prob bly, would be from Tto 10 years. , ~`` . . ` PAGENO="0143" 729 DEMONSTRATION CITIES A RBAN DEVELOPMENT Mr. BAiuu~r'r. Mr. Kingren, I do t now if you have been reading my mind or not, but you actually an e d a question that I was going to put to you. I think you have to consider the i e xpeetancy of the facilities in order to propei~iy combih~ the~e th gs and get a package mortgage on them. Mr. KINGREN. To give you the s po ting reasons for our feeling in this matter, we take, for examp e a 10-doctor clinic. In our cx- perience, the land and btdlding will c t about 80 percent of the total expenditure and 20 percent will be r quipment The total cost of a 10-doctor to 12-doctor clinic will be ween $400,000 and $500,000. That's land, including parking fad tes nd a,serv~i~able building for a diversified thedica1'prt~ctke. ~ . ~ ~ ~ ~ ~ . ~ ~ ~ I am talking about a satellite cl'ti ~ ~ `~E ~ ~ out~ patient and inpatient hospital facilit . *e include X-ray, laboratory, outpatient surgery, and doctors' offi e i our 10- to 12~doctor clinics. Our cost for equipping the 10~d t r acility is about $10,000 per doctor, and the equipment cost * he entire clinic is as follows: $30,000 to $40,000 for X-ray equiprn ~ that is assumin~ you do not have a radiologist who would need e pensive specialized types of equipment ; $5,000 to $10,000 for 1 r tory eqñiprnent ; $10,000 t6 $15,000 to equip the outpatient sur ry $5,000 to $10,000 for office equipment ; $30,000 to $35,000 for i hings which would have a much longer life expectancy than, sa , an X-ray unit which might be- come obsolete next year ; and physi 1 t erapy equipment would be from $3,000 to $5,000. I am not sure th arithmetic, but I think this adds up to from $83,000 to $115,00 . S , on the basis of a $500,000 clinic total expenditure, the fixtures ~ d equipment. will be about 20 percent of the total cost. We consid r th s to be a subetantial part of the investment and suggest the short a ortization schedule for this equipment. Further, a short amortization sche le thee for greater flexibility, since a piece of equipment which be e obsolete in a few years be- cause of scientific imprcxvernents, ca eplaced immediately. Mr. BAiu~rr. Then you are now ~ j ting that this thing would be better considered by all concerned a wo-loan approach-one for construction and one for faeilities, a ths would give you a chance, when your equipment is becoming o etc or depreciated, to renew it? Mr. KINOREN. That's correet, sir further insures a higher standard and more up-to-date standar n t e medical services provided the members. Mr. BARRETT. What period do you n&der on the facilities sector? Mr. KINGREN. We thought 25 years s rovided for in the bill. Mr. BAm~Err. You are talking on a st otural loan? Mr. KINGR]~N. Yes. Mr. BARRETr. I am talking on a facili `e loan. Mr. KINGREN. You mean equipmen ? If you wanted to take a conservative viewpoint, you could use a -year schedule and if you wanted to be more liberal it could be 10 ye r~. Any figure in between also could be used. Mr. BARRE1I~. Mrs. Dwyer? Mrs. DWYER. This is to Mr. Brindi . at are your tot.a~ needs and how much of it is housing and h w much is facilities ; do you know? PAGENO="0144" 730 . I~MONSTRATION CITIES ANJ~ URBAN DEVELOPMEN Mr. BI~INDL1~. ~YQu mean housing kersus equipment ~ Mrs. DwY1~R. Ye~;. I Mr. BRINDLE. I just gave as $5.2 ~mi11ion the cost of th~ facilities needed. The figure Qf 20 perc~iit 4yf that. amount, perha s a little higher in our case because our medical centers are iiot con~nected to hospitals necessarily-something around 30 percent in addition to the $5.2 million would be needed for equipment. Mrs. DWYER. This is New York ? Mr. BRINn~E. I ~ just talking ~bout the health insur ncc plan. if you i~ok at the attachments to jthe ~ ~ J made here, Dr. Dearing t~4ti~lled them up. They rui4 ab~ut $18400,000. I on't think that th~se ~ are sorted out betw~n equipin~it and faci ity. For instance, HIP's figure is $5.2 millith and that is just the f~cilities- jusi; the buildings we are talking &~ut. Mrs. DWYER. I totaled them up ~tis we were going along and I got a total of $29 million. Mr. BRINDLE. Some of that is for hospit~ls. The Commun ty Health Association figure includes nursin* homes and some oth~r things. Puget Sound has $3.5 million in here for hospital extensio~ and this we took out. They were talking abo~it their total needs but ft wouldn't seem córirect to add them in when ~4e are talking about this bill. Mrs. I~Wy~R. When you conside4 you take $18 million c~r $29 mu- ]ion aM then consider the needs ~f the entire country, ~iow much would this program really cost ? . Mr. BRINDLE. ]~ don't think you can say. As a matter of ~act, this is just a fraction of what might advantageously be used if ~we get the encouragement of legislation like this. All of us would really try to help consumer groups to develop new programs. I have had some experience in this my~eIf, Kaiser ~tas had extensive expe ience and GHAA has instances where we belietve we could get new gro p practice prepayment plans started if this l~gislation was availabl . I don't think ~ could very accurately pr~dict this, but I would think that putting, as you do, a 4~year limit ~ the operation of ths act. and specifying the amount of money a~raiiable, we would see how far it goes. It might all be needed.. My feeling is that the $ 00 million suggested in the bill is not an unrea~onable figure for loan uarantees. Mrs. Dwi~n. I was very much ii~t~rested in the stateme t made by the AFL-CIO on their recognitiofl ~f the shortage of nurse and nurs- ing homes and hospitals and doctors when this medicaro p1 n goes into effect. I am not yet convinced tha~ this plan is going to ake up the slack which we need to properly ft~nction as far as the me icare plan is concerned. I am very much co~erned that we did. not do enough work before we passed this bill in~ getting nurses and do tors, and I am notsure whether this group pl4n is the answer to the roblem. Mr. VooRms. I just want to comhient on both those poin s, if I may. First of all, I don't think the Federal program has cost he Govern- ment anything. We don't anticipate this is going to cost he Govern- ment an~y money. We are going to pay these debts back This is a gi~ai~antee for ~rivate loans so I urge that you not consi er the $29 million or the $18 million, either o~ie as a cost to the Gove nment. It certainly won't be. We want to p~y back every dime. I am sure we will. The plans will. PAGENO="0145" DEMONSTRATION C~TIJ~S DEVELOPMENT e second poini short~ But~L~ payment plans has tion-one step towa going to run into. Mr. F ARRETT. Mr. Mr mee led ,ifl to the other testimony As I understand it, ing group ulty that yoi tered by the y~ci~t~:p;;~ and am I doubtedly tof I~ much that )ctors and recare? hrough some answering ust like to address this col- rstand this now in relation cO-S78----~6--pt. 2--1O PAGENO="0146" 732 DEMONSTRATION CITIES AN URBAN DEVELOPMENT and facilities. So it is not the docthrs' responsibility to finance the facilities in our program. Mr. HARVEY. Do not misunderstand me. Correct me if I am wrong. What I am saying is, the doctors themselves could go to the bank and finance themselves. Have you had any letters from doctors say- ing they have been unable to finanee this particular program or- doctors oi~ dentists that have been u~iable to borrow money ~ Mr. ICtNGEEN. Doctors cannot fin4nc,e the kind of organization we have. They cannot get that kind off~nancing. A~ single doctor or group of doctoi4s, in individual practice or group practice, can get financing for an offi~e and equipment. They are good credit risks-consequently, they have few credit problems. But if you are organizing total medical services, including outpatient, inpatient, and specialized care, it is irnpossibl~ for doctors to get that kind of financing, nor do they try to finance or organize total medical care. Mr. BRINDLE. When you say physicians and other health practition- ers can get equipment and get loan~ for equipment and for facilities, to get into practice, I think this i$ generally true. The American Medical Association testimony has Indicated this and you don't have any great need for a general prograi4. As Mr. Kingren indicates, when I you want to get-and remember that in all these plans physicians ar~ involved. We have heard vocif- erously from physicians in group practice, with a very broad range of benefits, and these arrangements for a new organization, we have con- stant lress~ire from the 1,000 physicians involved in our program to help thoiii upgrade and update their facilities or to help them build new facilities. The last time we tuied to extend into suburban areas we found that it was absolutely neoessary to develop the kind of very complex and expensive facilities tha~t were needed to develop a compre- hensive group-practice plan. I I would also say this, and I was~ talking to the commissioner-the former commissioner-of health in INew York City the other day and to the dean of the school of Public Health of Columbia. They are very concerned about the fact that the normal commercial arrange- ments which the doctors can make to go into practice operates good on a nationwide average basis, but when you talk about getting an ade- quate medical center with a good range of specialties into a place like Harlem or Bedford-Williamsburg3 they just don't have t at kind of ability.I So that I would say even prepayment aside, this md of pro- ram *ould encourage groups ofjpñvate physicians wh are going into a ~fee for service practice, it ~would help them get i to some of these ~latively tough areas. In Harlem and in Bedfor -Williams- ~ burg we have worked out cooperative programs with the ity to carry part of their public load of medical care, and to carry some of the other programs and this is true for Gouverneur Hospital whi h is a joint city, private venture and this kind of financing would faci itate bring- ing even fee for service practice into tough areas in the ~ ity. rphese are new areas of shortages of adequate physicians' servic s. Mr. HARVEY. Well, speaking of: these shortages, I agre . But ye~- terday4 I will tell you, our Interstate Commerce Commit ee ieported out an~ international health bill ai~d I voted for it. But here we are taking~ hundreds of doctors a yearf and sending them abr ad. This is despite the fact that we have short~ages in this country. I amounts to PAGENO="0147" DEMONSTRATION C~TI1~S A RBAN DEVELOPMENT 733 - AFL- nized labor assoc thing? I have be tial loans of mone~ they invested i: any provisions: Mr. Do~nr~ Mr. SHoE~: and'"~ trustee ~uch ~ eomøaround to actwidly ~ * actually don't have any purpose. Mr. Vooruiis. I wou ~ ~ . that in the case of mv' unions or c~ strictly ~eoni would px and I would ~ guarantee suc time for some legally and properly~ Then, I would also, if I might just~ by i Congressman. `~ ~, the plan ~ , offer the hope a~ ofbac1~ingupitsr I would agree wit. , who are in business u situation than a nonpro~ But I would second very point out that if a group the plans we r -. " great need, I t. Finally, I `Would plans, the doctors their personal c nanOing for some of t have to do that and do that. They have the plans they have ac Mr. HARVEY. I not know anything any more than I ~ businessmen. This L taking the FHA, which a ~munity that has an. Ido )nal credit ~s or other nurp rst )Ses, PAGENO="0148" DEMONSTRATION CITIES AND URBAN DEVELOPMENT history for the last 30 years and wIUch has one of the finest records that I know of, but you are taking that organization and making a corn- plete departure and you are not on1y~insuring real estate, but now you are insuring loans on equipment as vfrll. This is something that I do not know, whether it is good or ba~L I have not really thought it through myself. But I do recognize it is. a complete departure from what we have been doing with the FHA in the past. I have no further questions. Mr. BAmu~n~. Mrs. Sullivan? Mrs. SULLIVAN. I have no question, Mr. Chairman, but I do want to tell these gentlemen that they have added much to these hearings with the information they have brought us. This is a big problem and we need some good solid thought on i~. I joined one of the first group he~ilth plans in the country when it was opened in St. Louis, back in the late 30's. I was not in it very long because I married a Congressman ~ shortly afterward and we spent practically 12 months a year in Washington during those war years. But I have always felt these plans are a good idea. rIl11a1~k you \rejy much. Mr. VooRms. We are very glad Mrs. Sullivan left town for the reason she did. Mr. BARRIIYFT. Gentlemen, all time has expired and I am quite sure the committee appreciates your sple~idid presentations here this morn- ing. You have been a splendid pa~nel and a very knowledgeable one arid extremely helpful to us. Thank you very much. Mr. BRINDLE. Thank you very m~ich. Mr. BARRE~rr. The subcommittee ~wi]1 stand in recess until 10 o'clock omi Monday morning. (Whereupon, at 12:30 p.m., the subcommittee adjourned to recon- vene at 10 a.m., Monday, March 14, 1966.) 734 I I I I PAGENO="0149" DEMONSTRATION CI1~IES. to recognize i I STATEMENT PAGENO="0150" 736 DEMONSTRATION CITIES ANb URBAN DEVELOPMEN It has been the intention and pr~gram of the mayor, T omas G. Currigan~, to try to rcmove those blight situations. This is ne of the reasons ~hy we have an urban rene'4~a1 project in the city a d county ofDenvet'. It is m~ great pleasure tointrodu~ to you the man who h s worked hwrd ~ h~usbig throu~hout the njañy sears Im has been in public service, the Honorable Thomas Curr~gan, mayor of the city a d county of Deiwer. ~ Mr. BARIU~r. Thank you, Mr. Ro~ers. You may proceed, Mr. Mayor. ~ STATEM~T OP EON. TKO]~AS G. ~OURRIGAN, MAYOR, ITY A~ ~ ~c ~ - ~ CO~~.y OP Di~EV]~, COLO. Mr. C~mGAN. Thank you very m~ch. I w~thit; to express my appreciati~n to our esteemed Co gressman, and certainly a friend to everybody ~n ôi~r community, not o ly for the very oomplimentary introduction, b~it the tremendous job e has done in representing the people of t~envei~for many, many years. Let me say to you, Mr. Chairman~ when you made a co ent about making `youz~elf at home-you haYG done an excellent ~° of doing this ever since I had the pleasure oE meeting you in the ele$tor some ~15 or ~ninutes ago. , ~ My~n~me is Thomas G. Currig~4 &nd I have the privih~ge of serv- mg a.~. ~nayor of the city and cou*ty of Denver, the capital city of Colortu~o. ~ I amgrateful to you for affordin~ me the opportunity o~ appearing before you, `and to Denver's own !distinguished Represei~tative, the Honorable Byron G. Eogers, for interceding with the co~nmittee on my behalf. I am here in support of H.R. 12341, the Dc onstration Cities Act of 1966. Recognizing the tight time schedule under which the c mmittee is operati~ig and the~ fact that you have already heard from representa- tives~ various city-ori~nted groups and mayors of sever 1 American cities2~;wil1 keep my ret~iarks relati~rely brief. It is bf great importance to me 4id the city I represent nd to other mayor.~ of western cities for you ~to be advised that w tern cities, though younger in years than th~r eastern counterpart , also have prob1ern~. `* ~ ~ . ~ ~ . These problems challenge the iitgenuity of every Âme ican who is concerned with the environments flow existing in our alw ys-growing urban centers. It matters not wh~ther these urban cente~s are in the ~asterii or western section of our ~reat Nation, whether these urban centers are relatively old or comparatively new. The pr blems exist and n~istbe resolv&L ~ Many time4 we feel that, because of the distance betweá~ the West and Washingto4i, our. problems appear to you to be disprc4~ortionately small. We hate full confidence, howe er, that this committee, with its loiiig history kind tradition of cham ioning pro- gressive urban legislation will hea~ and heed the voices fr m the West. I recognize full well that many `of the older eastern and midwestern cities are in critical need of the assistance the Demonstrati n Cities Act can give them to launch a massive attack on slum areas th at have been in existence for many, many years. Denver has just recent y celebrated' I PAGENO="0151" 737 DEMONSTRATION C~TTh1S A RBAN DEVELOPMENT its 100th birthday, so our s~ums ar ot Vast or as widespread or as seVere. But ~ we have them~ ~s a c r~ city of ~ great and growing metropolitan area, we certa~n1y ha e n4 hit r~ckbottoni in deteriora- tion. But ~ haVe areas th~t are s1 in . We do not have any deficit financing in our city btdg~t, but ~` ancia). problems are critical. Transportation, highway,~ police ti ~1re protection, sewage disposal facilities, libraries~all the facUities ~ ci ervi~es wanted, expected, and deserved by our citizens~áre tax' ~ r resources to the breaking point. Urban ~spi~1 ~ a i~ulti i~, y o~ taxth~g'bodies and corn- rnumty services, coupled w~th Ui-p ~i d, ~rast~fu1 develc~prnent, are just as real for us~sth~r wpul~1 be `f~ were threetimes our present age. ~ ~ ~ P ~ ~ We in the West still .pos~ss ~pi ~i ~ ng spirit. atid enjoy the ~ha1- lenge. of seeking new methqds of s ~ hi old jirGbiems, of exploring better means to reach lofti~r ~oa~is ~ lik~ ~o ` bh~e new trails of procedures and climb hi~hn~ourktain ~ ccoth~1ish~ients. But we are not foolish enough to spuri~ p~ffe ssistan~, to refuse to grasp a helping hand. ~ ~ ~ ~ In Denver~ we do not Jook up4n t ~ ~ eralGov~rument as a threat to our local governmental structure ; ~Y npon~ the~ State government as a rural-dominated fortres~ . dedh~ ~ ~ ~ o withst~nding th~ siege of urban progress. , ~ ~ Next to Washington, Dexi~rer is t ~ ~ b~ e for more Federal agencies than any other city in the N~tic~n. ~ ~ t is the capital of Colorado. Thus, goverminent is one of ~enver' 4 or industries. , Our citizens feel the State and Federal ~overn nt belong to them and are in existence to serve them just as ~nuc ~ he c1~ governrn~nt. ~ Each citizen of Denver, like citiz~ns in ~ b her Ai~eri~n communities, contribttte a portion of tl~éir inóonie o h~stt~4ODt ofthese govern~- rnents. ~ While we believe in exercis ñg thax'. ~ lo~aI responsibility to meet local problems, we also firm y belie i seeithg state and Federal assistance to resolve probléms~that ar ~ ~ nd our ~ap.ability of solving. There is, and should be, ~ a ~ar4ners p mong these three levels of government. A spirit of cre~vth*e f r~ sm must exist if our urban centers are to resolve their px~obl~rns. . This committee espethally ~ recçgni e t is th~sry and, in fact, has been cognizant of itfor im~*~ ~ha±i 30 ~ since `it h~ ~ônsidered pro- posed urban ~ legislation a~ lor~g ~4go' ~ ~`1~ 3. ~ Iia~ 1.~3~t it approved th~ U.S. Housing Act wh~h~h ~re~tecj a 1 ~ l~ ~ck~rai partnership to help meet the housing need's of mu'shroomi g u~ an populations. This corn- mittee `has, over `the years, ;col~ected a ~ ~ storeh'otis~ of information concerning urban probli~ms. `The crea i n f the Department of Hous- ing and Urban Development th"1~5 ~ t e culmination of more than three decades of leadership by this co It e~, by the Congress, and by several administrations. The Demonstration Cities A~t `of 19 is yet another of the progres- sive pieces of legislation consk~ered by ~ i's ` ommittee. I am convinced that it, like so many others, w~il be ex ~ i~ d carefully and ultimately approved. Denver, and other we~teiia c t~ , I believe, view this act as an insurance policy, as an investment ~ t e future of our cities. Because Denver and iithst i~irb~ii a e ~ f the West are rel~tiveiy young, we h'ave `an opportunit,'~ tO arr s ~ ight, to rehabilitate rather PAGENO="0152" I 738 D1~MONSTRATION CITIES AN1~ URBAN DEVELOPMEN than demolisji, and to grow according to comprehensive plan , thereby creating eities of lasting beauty and~sound community envi onments. Unfortnnately, we didn't start that bay, we have made mis akes, and western cities need help to readjust and get on with the job of sound planning. By acting now, they can achieve more, and at 1 ss public cost. In Denver we recognize that we must have Federal assis~ance and cooperation. We also recognize that, to obtain it, we must~ meet our responsibilities to the full. Denver I~a~ an outstanding plan~iing corn- mission, urban renewal authority, an4eornrnunity developme$ agency. It has ai~ activehousing authority a4id one of the first cornn~issions on community relations to be formed in jthe Nation. We have a4 excellent workable pro~rarn with all of the ssential city services tI~at such a program requires, and we were one of the first cities in the ~ountry to complete and have approved ~ community redevelopment p~an, which we are keeping constantly current. To the best of our ability and to the full capacity of our resources, we ~are working toward t e elimina- tion of `blight, to stop its further spread, and to provide th countless services required of a core city in a ~znetropolitan area that ow has a popu1ati~n of more than 1 million pe~ple. Our citizens believe in the future~of their city and have ttested to that faith time and time again by going to the polls and pproving multirnillion-dollar bond issues for 4a myriad of purposes. Denver is located in a semiarid area, so its citiZens have approved a $1 5-million- bond debt to bore diversion tunnels through the mighty B ky Moun- tains and bring lifegiving water from one side of the ontinental Divide to the other. Denver has been discovered by people n all areas of our Nation and they have moved here with their fami ies by the thousands. Denver citizens have responded by approving a s~h~ol bond debt of $40 million to build new ~schools for the chi1drt~n of these families. Increased population oa~used a sewage probleth. Denver citizens, banding together with tl~ose ~ in surrounding co nties, ap- proved a $30-million debt to constri~ct a vast new metropoitan sewage disposal facility. Denver needed a ~new general hospital, a convention center, additions to our juvenile detention facility and se eral other major structures. Our citizens responded by approving a 25-million- bond issue-the largest ever approved for city purposes. Time and again our citizens have demonsttathd their confidence n the air age and Denver's place in it by approving multimillion- ollar-bond issues f~r new construction and imfrovements at our Stap eton Inter- nationa~ Airport. ~ So w~ are willing to pledge ourjown ~esources to resolv problems. But tb ~tchieve the kind of a total j$bthat must be aeeompl shed in our community, we need the kind of a*sistance President Joh son visual- izes and reóommends iii the Den~iorfstration Cities Act. I concur wholeheartedly in the President's objectives, and in his concept of the Demonstration Cities Act. I would be remi s if I failed to express my concern as to the adequacy of the recom nded funds both for planning and execution. I agree with Mayor Cavanagh's analysis when he appeared for th~ National League of Cties and the U.S. Oonference of Mayors. I fe'l that this is a great be inning, but that c~rtain1y the program shouk~ be funded from the v ry start by the $2.3 billion. I also question~ as did Mayor Cavan gh, the de- I PAGENO="0153" DEMONSTEATION C1TI~]S AN DEVELOPMENT ment is movu Through ou~ term guide for the r& city. At the same tirr bftsed on the guide and c nct 6 weeks. r plans c~ :on `of~ ~enter L ortatior and mod slum i etition for cities to be desig- welopniei ~e, to permit - 1O-s uare-n ~r Uonsei ~~on annel improve- irerall, long- on of our ~ action requ: I] meets all the criteria the job done will reqi that for decision to L PAGENO="0154" 740 DEMONSTRATION CITIES AN ~ TJttBAN DEVELOPMEN beautiful national environment, whibh may be a "grand vision or a grand design," but with your help ~nd leadership, it is o e that is thoroughly feasible of achievement. I have-noted with great interest the proposal for a Fede al liaison officer to be assigned to each demori~ration city.. I r~añ of this pro- posal with mixed emotionsince I fa4r~the concept Of~a Federal liaison officer b~t disagree c~np1eth1y with.1the ~ idea that this indi~vidual be assigned ~to the 72 rederal Housing~Authority offices throu hout the country. ~ 1~his does not infer that I~iiA is inconipethut. I has per- formed services inthe fWd of mortgà~g~e hi~rance over the ast 80 to 35 years and has staff that is famiThkrwith the financing of construc- tion of new housing. ~ But I do notif~el FHA is equipped to assume supervision or coordiliation of the myriad of pro~rams w ich Presi- dent Johnson has envisioned for the demonstration cities program. Such lia~on work requires persons ~rith broad vision who nderstand and at~ ~ familiar with the wide *ctrurn of problems c nfronting cities on' a daily basis. Such an offl~e, if created, must hay authority to cut a~ross all lines ofendeavor a4d make decisions that uld affect several different agencies. The o$~upant of this office s ould be a local man whose knewledge, reputa~tioi~, and convictions w uld carry weight ~vith both local and F&leral 4geneies. `We in Denver have established ~n excellent working lationship with the Denver Federsi ExecutivO Board in our city. A d this has been most helpful. What happens when a Federal-bc 1 program does not have a local coordinator with autonomy and a thority is graphically illustrated by our war pnpoverty program. he Denver Federa~i F~xeciitive Board and I ~gree that many of the difficulties Denveir~has encountere4 in this prjgrarn would have bee alleviated if the$ had been ~ a loeal Office o~ Economic Opportunit official in Denver with authorityto make de4isions. As it now stan s, it is nec- essary to g*~t deci~ions from the Wansas City regional o ce or from Washiiigton a variety of matters. ~ And you gentlemen kn w how dif- ficult it is to transact this kind of business over the tele hone or by mail. I am not naive enough to beliete that the needs of De ver or any other Western city ~are greater than those of Eastern citi s. In fact, I belie~ve that 1 am enough of a political realist to mid rstand that some df the Eastern cities, facing overwhelming proble s of slums and blight, probably `will be and ~hould be given priorit~. I hwve described to you our eff~ts in the South Platte iver devel- optherit study for two l'easons : firs~, I believe this plan is i eally suited for the demonstration cities program ; and, secondly, it emonstrates conclusively how inexorably int*wined are city-State- ederal pro- grams. Literally, scores of ageni~ies at all levels were in olved in the flood cleanup and the planning thh~t has followed. Tinle you gentle- then have had the experience of sitting in a mayor's ch ir, I do not thinkyou can comprehend the fee~lings of frustration tha occur, when sitti~ in a city hall 2~OOO miles a~ray, attempts are made o coordinate efforts of several Federal agen$ies that are deciding atters that vitall~ affect youreity. I hel it is not on1y imperativ~ to have a Federal liai on officer for the demonstration cities programt but I think it would vital to have such an individual in every metrdpolitan area of our Nation right now. I PAGENO="0155" DEMONSTRATION CITIES A ~ RBAN DEVELOPMENT 741 I would recommend that such a in t Op litan area liaison officer have broad powers. He could not be eff iv ifhe were simply a messenger or complaint carrier from city hall 1~o Fe eral agency. He would have power to cut redtape-~-to knock head t gether, if you pleaser-to acti- vate many programs that now are * u t reams. Such an officer could make' creative federalism work effe tve , and quickly, by reinforcing it with creative localism. ~ If such an office is created, the m~ y r f the core city and his council should have a voice in determining he occupant. This could be ac- complished by having the mayor a ( ci council submit a list of five or more competent individuals to t ~ epartment of Housing and Urban Development, and the Seere ary could appoint the liaison offi- cers from this group. Or, conver~e y, he Secretary could send the name of his choice to the local mayor an [ council for ratification. In the war on poverty, local comi ui ity action programs, to gain Washington approval, must demonsti ~te maximum feasible participa- tion of the community~ and the poor. I L the creation of a metropoli- tan area liaison office, I think there s oi id be maximum feasible par- ticipat.ion by the core municipality. In conclusion, I urge adoption of t ie Demonstration Cities Act of 19666, with the amendments already su çgested by spokesmen repre- senting the U.S. conference of may rs nd the National League of Cities. I appreciate the opportunity of p e nting this statement to you. Thank you. Mr. BARRETr. Thank you, Mayor C igan, for your very edifying and splendid statement. You mentioned on page 5 about the oo dinator. I would like to ask you a question that I have asked sever 1 f the other mayors and other witnesses who have appeared before us. Some people seem to feel, at least av a feeling, that the Federal coordinator which the bill would set p for each demonstration city program would be some sort of a Feder 1 dctator or czar. Now, of course, I don't believe this. A d I think that the bill is clear that he would n~t have dictatorial powe But I would like toask you the t q estions I have put to these other witnesses. Would the people who have such e rs feel better, do you think, if we renamed this Federal official as oc 1 coordinator rather than a Federal coordinator ? And, second, a do you think of the idea of making the services of the coordin t r ptionai to participating in cities rather than mandatory now as ov ded in H.R. 12341 ~ Mr. CTJIiRICTAN. Yes. Insofar as y u fi st question, Mr. Chairman, I think perhaps the suggestion-I w id concur with it. I do think there is what in my personal opinio i u ually an incorrect and un- founded though in the minds of ma y th t the Fed~al Government represents the enemy, almost, and pe h p and again I think this is largely psychological or mental-but p rh PS the nomenclature of lo- cal coordinating officer might dispel ew of those what I believe are really psychological barriers, and in ost cases I am convinced they are totally unfounded. So I personally think that suggestio o id have merit, and I would certainly concur in that. PAGENO="0156" 742 DEMONSTRATION CITIES AND URBAN DEVELOPMEN Insofar: as the question whether mandatory or optional, I would probably indicate tha~t optional woul~l be our preference. e know what our ~resources are at hornt~, a~d ~with theproblems that are con- fronting iris as we become an urban n~tion, I do not know f ankly of any city that can stand on its own fe~t under our present le al struc- tures. Thit I do think th~re is usua*y merit to anything t at is op- tional rather than mandatory. ~ Mr. BAtnu~rr. Thankyon, Mr. Mayor. For the committee's benefit, we will work under the 5-mi ute rule this morning. The Chair recognizes Mrs. Dwyer. Mrs. DWn!~L Thank you, Mr~ Chai*man. Mr. Mayor, you are an exceilt~nt tadvocate for the dem nstration cities Ø*~i~a~rn, ami we are aware of y~nr problems. Now, sp1 cifically, how mm:~h does yorn~ city need in F~dera1 funds to carry 0$ a dem- onstratkth city program ~ ~ Mr. CtTRRrnAN. In dollars and. ceflts, I c&uld not say w1~ether we a~e talking about $1 million, $10 million, or what the figur~ is. For example, the specific problem, which is just one of many, t~hat I did cite in my prepared text, regarding our South Platte River Basin, which, again, is 10 percent of our land area-this feasibi ity study that is being done, again thanks to IPederal assistance, will e done in about 6 *eeks. I have no idea what ~the comprehensive plan the cost figure, will be put on this particular project. I wish I could be specific. I canfiot be. But I am cert in that it is-whatever it is, it is to do the job ~within., say, perhaps th next two decades-if other than the most piec~mea1, we would have t have sub- stantial `Federal assistance. Mrs. DW~ER. You wouldn't know how much you would eed in the next ~ years, would you, the life of this program so far ~ Mr. CumtiGA~. No, I Could not give that to you right a this very moment. But certainly while this.-I could obtain figur s for the committee, and be more than please~1 to send them to you or consid- eration just as quickly as possible. Mrs. ~ Dwim~. Mr. Chairman, rna~± . we have that for the ecord? Mr. BARRETT. ~They may be subx~iitted. Without object on, so or- dered~ (The information requested may ~be found on p. 1120.) Mrs. DWYER. Since you do not know the figures for th city, you would not then be able to guess how much the State would eed, or the entire country, for a program such as this? Mr. OtERIGAN. No. Mrs. Th*TYEk. The administratioi~, Mr. Mayor, has spok n to us of expendiLures reaching $2.3 bi1lion~ and 70 cities. Testi ony previ- ously taken from some of your fell+w mayors would indic to the gen- eral opinion that' ~$2.3 billion. is no~ enough and 70 cities `s too few. Could *e have your thoughts on tI4s subject? Mr. EJtTERIOAN. Again, it would ~have to be pretty gene al. Again, being closely iuterwined~ with municipal gover ment now for approximately 17 years, I would have to think with t e problems of urban America that $2.3 billion would be insufficient to do the job. PAGENO="0157" dot they woLid not Mrs. DWYER. as to your We are i The war do think that ii~ som~ long on our home froi on that basis, be~ery~ our. need plight of our c: we would h - your to ask you a~iother question, DEMONSTIL~TION CITIES ~RBAN it. i~ relatively I--it. ~~IENT be I be an exce. it our urba 743 the problems in und?Ubte( Mayor. ;i PAGENO="0158" 744 DJ~MONSThA~tON CIPIES ANDI UEBAN D1~tELOPMENP Mrs. SUIJLIVAN. Thank you. Mr. BARRETP. Mr. Harvey ? Mr. HARvi~Y. Mr. Mayor, let me aisk you first of all whether you think the Demonstration Cities Act should be confined to the major cities in America, where some of the greatest unrest and difficulties have been encountered. Mr. CtTRRIGAN. I would say definitely "No." In fact, I think-I think this would be a very serious n~istake, if this were to become a law, and then it were to be impl~mented by just your so-called major t~itles. This does not mean th~t I think the problem of your major cities, your highly pop~ilated ~itie~, are not seriou hey are. But I think proportionately your co4~mnnities, regardless o whether they haV~ 50,000 p~opIe or 10 milliork-the problems are jus as acute to those people on their home base, *hether they be in Ne York or Denver. And personally I would sa~ it would be a very se ious mis- take if this only for your so-called major cities. Mr. HARVI~Y. Do you think that the act should fix pro ortional amounts for the large, medium, and smaller cities? Mr. CURBIGAN. My own frank opinion-I have never re ily shall we say, support~l in principle and pI~ilosophy-~-earmarking. I would be hopeful that the administration *ould be flexible enoug , and use objective discretion so that the progijams would not be utili ed out of proportion favoring one section of the country over anoth r, which I think would be wrong, or favorihg one population seg ent over another. But I would be hopeful, again, that the adminis rators of the program would have enough integrity and enough obj etivity so that discretion could be flexible, and the job could be don without establishing rigid financial allocations. Mr. HARVEY. Let me follow that ~ip with this third que tion. Do you think that there should be somehmitation in the act pl ced upon the amount that any one city or an~ one State could rece~iv Mr. C~JIRRIOAN. Well, if I am con~istent with my previo s answer, I have tO to say the same answer an4l principle here. I real ze-- Mr. HARVEY. Your answer would be yes or no? Mr. CURRIGAN. No limitation. Mr. HARVEt. You believe that no~ limitation should be p aced? Mr. CTJRRIGAN. Right. Mr. HARVEY. I take it then to be consistent your answer would be that there should he no limitation geographically. Mr. CtTRRIOAN. That is right. Mr. HARVI!~Y. In other words, it ~vou1d not matter whet er the one city in a State or a dozen cities ii~ the same State all ~ re eived the money? Mr. CtTRnIOAN. This is true. Now, here again, hindsight and foresight might be a litti different. If it were administered in a way that it was out of roportion, whether it be by cities or class of cities, then I would wis I had not said what I did, but I just cannot help but believe that g od admin- istration would dictate otherwise. Mr. iiARv~Y. Mr. Mayor, severalof the other mayors who have ap- peared here have expressed a fear qr apprehension that one of the re- suits of~ this program would be to ~livert funds. from other urban re- newal pt~ograms. I PAGENO="0159" DEMONSTRATION CITIES AN RBAN DEVELOPMENT 745 You can see how that would come a ou , I take it. Do you share that same apprehensi ? Mr. CUmuGAN. I would undoubted y hare that same apprehension. As I say, I think it would be a mista e i there was-we take the same number of dollars and just try and sp ea thema little further. Again, I think this would be a sad mistake, a d again we are kidding our- selves if we thing that we can do the jo by the magic method, so to speak. ~ . Mr. HARVEY. Thank you. I have 0 urther questions, Mr. Chair- man. Mr. BARRE'rr. Mr. Moorhead ? Mr. MOORHEAD. Thank you, Mr. Ch ir an. Mr. Mayor, I commend you not on y or your very exce1l*~nt state- ment, but for your very wise selectiQ of my friend Bruce Rockwell as chairman of your urban renewal a th rity. I notice on page 3 ~OU say you have a very excellent urban re e al activities program in your city, and I am sure that, in part, it is ue to the fine work of the chair- man of yourauthQrity. . . . ~ Mr. Mayor, I certainly agree with yo r testimony with respect to the need for a metropolitan liaison. o ce in every metropolitan area, not just in the demonstration cities are I also agree with you that the bc 1 uthorities should have some voice in the selection of this particular . officer. I don't know if we can write it into law, but I would cert ml hope that our report would ~ontain language very much similar t t e second paragraph of your testimony on page 6, where you sugge t hat either the mayor submit names which the Secretary can pass o , o the Secretary submit names that the mayor can pass on. I don't hi k it can be written into the law, but I think a very strong suggesti n o the Secretary can be made in the report. Mr. Chairman, I have no further que ti ns. Mr. BAiumrr. Mr. St Germain? Mr. S~r GERMAIN. Thank you, Mr. C ai man. I would like to compliment the in y on his statement-coming from a section of the country that I p r `cularly personally find very pleasant, very beautiful. I appreci te the paragraph on page 2 wherein you very practically recognize he problems that are associated with the old cities, such as we have on t e e st coast, that you fortunate- ly, with foresight, and with attentio t what is happening at the present time, can really avoid, by com re ensive planning, and by re- habilitating, as you say, prior to blight en ering into an area of a city. I must say that my visits to your p rt of the country have proved what you say here is so. One point I would ]ike to discuss wi Ii ou, Mr. Mayor, and that is what you said about the Federal coordi at r. You state that. you feel it should be 1 cal man. ~\Tell, that makes a lot of sense. He should know the I cal scene and the needs of the local community. But would you a e that the most. important qualification for this man-perhaps e might have to est;iblish a training program for people such as ti ese is an intimate knowledge of the many, many programs that lie il be called upon to explain, and wherein lie \v~ili be involved in exp di ing if at all possible on be- half of the community applications a d pprovals of applications? PAGENO="0160" 746 DEMONSTRATION CITIES AN~~ URBAN DEVELOPMEN Wouldn't you agree that that is more important than the 1 cus from which he is drawn the fact that he would have the ability t perform. the job as outlined ~ Mr. OmmIGAN. I could not argue that. I think that is ob ious. Mr. ST GERMAIN. If he could be a local man also, you hay the ideal Situation. . . I Mr. CU~RTOAN. If you don't have tfhe capabilities or the k owledge, it is a hopeless cause whether he is loc$l or not. Mr. ST GERMAIN. This should go ~o a man who can do a ob on be- half of the cities that need help. Mr. CU~RRIGAN. I could not agree more. ~ Mr. S~ GERMAIN. That is all, Mr. Chairman. Mr. BARREYr. Mr. Reuss 9 Mr. REUSS. Thank you,Mr. Chairthan. Mr. Mayor; you set foHh in you* testimony this morni g the re- markabbe planning that Denver ha~ been doing looking to ard just such a &~nonstration cit~. On page ~ you say, ~ Both ou~ long-term guide and our imm4uate program plans will completed within the next 6 weeks- ~ And you go on to say- I mention this specific planning program in some detail because it ~ eets all the criteria so ably set forth by President Johnson. I gather from what you say that if we had today a dem nstration cities grant program in effect, Denirer could be in tomorr w with a completed application. . Mr. OIIJRRIGAN. We believe, yes. Mr. I*iuss. If that is so-and I ~m delighted to be tol that it is so, and i~ is certainly a tribute to yoji and your associates in the city- do we need any special planning l~onanza in order to pu you in a position where you can qualify 9 It seems to me you have been able to do this with your regular Federal 662/3-percent share4 planning grants. Mr. ~ CURRIGAN. Of course the example that I spoke abou in my re- marks definitely was specifically th~ Platte River Valley B sin which suffered severely a~s a result of the Ju~iie 26 flood. Now, ~the feasibility, the .planning~, and the study on this 10-square- mile area, which runs right straight through the heart f Denver, as well as the metropolitan area-3he feasibility study tI~ t is being financed by an advance from the tFederal Government o $240,000, this will be completed hopefully no* within the next 5 or ~l ~ ceks. But the planning, as I would look at it-our plannin~g for t at project will be contained within what we have already received fro the Fed- eral Government. I do not believe we would need addi ional help for planning. This we have already got. Mr. REtSS. The help, Mayor Currigan, that you got, t e $240,000, that was pursuant to what is calle~1 section 701? Mr. CU]iRIGAN. An advance; righjt. Mr. EEUSS. An advance in which the Federal Gove ent ulti- mately pays two-thirds. . Mr. CITRRIGAN. And we one-thir4; right. . And as far as the future is conce~ned on any other proje ts, I would see nothing incorrect about that same principle. PAGENO="0161" )W that is r. REUSS. 1 L~RRET" Latin cert~ tatically is the estimony was, ~ it should b~ I am sure it will be I 60-878-66-pt. PAGENO="0162" 748 DEMONSTRATION CITIES AND UREAN DEVELOPMEN Mr. CtTRRIGAN. Thank you very m~ch. Mr. BAERrn. Our next witness t1~$is morning will be the onorable Walter iti. Baehraeh, mayor of Cinci~máti~ Ohio. Come forward, Mr~ Mayor. J . We ai~ going to ask Mr. Gilligan t+eomB up here. Congressman, won't you come up h~re? Before we recognize you, Mr. M~tyor, we are going to y eld to the, gentlen-~an from New Jersey, Mr. W1dn~iil, who wants to ask a qiiestioii of Mayor Currigan. Mr. WIDNALL. Mr. Chairman, I lasieally have one quest on to ask. If I could get the answer now, fine ; otherwise, he may si bmit it in writing. Has ~thy urbanren~waJ bond iss~e or referendum failed in Denver during the existence of the urban reri~ewal program? Mr. CtJRRIOAN. There ~as an urb4n renewal bond issue t at did fail about ~year and a h~1f ago. * Mr. WIDNALL. How is it that the urban renewal program s proceed- ing in the same area? Mr. CURRIGAN. The urban renewal. bond isSue that was before the people, `as far as our city administration was concerned-t e bonding issue, which was again through general obligation bonds- `e took this to mean that the people of Denver ~t least at that particu ar moment did not want fnrther urban renewai~ through the use of gen ral obliga.- tion bonds. So w~ are pursuing the program ~hreugh other than gen ral obliga- tion bonds in a very limited man4er, unfortunat~1y, in y opinion, but nonetheless we are pursuing it ; but not the general obligation bond route. Mr. WIDNALL. Then how are yougoing to finance from n w on? Mr. CtTRRIGAN. We are presently-through the operat ng budget, limited though it may be, from the general revenues of th city. But there is no bond debt involved. Mr. WIDNALL. How much are ypu seeking from the F cleral Gov- ernmenth for this urban renewal prqgram, the one that was defeated? Mr. CUmaGAN. Of course the i~ajor item on this particular pro- posal Was clarified2 helped materia1~y by the Congress about a year ago when our convention center whid4 will be under construction within roughly 11 or 12 months, was acc~pted as an urban renewal credit. So the major-we have probably one of the country's largest urban renewal areas, called Skyline Plaiza. This again, thanks largely to this Congress, previous Congress, has made that possible by permit- ting us to use our convention center credits as our payment insofar as this Skyline Plaza project. Mr. WIDNALL. Mr. Chairman, a~ I recall, that project was included in the last few minutes of debate c~n the House floor without any prior hearing, without any discussion be~fore the committee, and after it was accepted, there was a great deal *f misgiving about what had taken place on the House floor. I was ~at a conference between the House and Senate conferees, and they saId it set an extremely bad precedent for the whole United States, that the case had not been proven in connection with it. And I, trying to be a responsible Member of the I I I PAGENO="0163" DEMO~STXt~4 ~1 CIT)ZS DEO~ME~T to your question~ OURRIGAN. If I mayor will 1 of the urban may r. Widnall L~MAN, D~v~ra~, COLO. t I ~ppear be~ on these im- PAGENO="0164" ton; .on. ( plus five o~ must be giver ital iinprov Jerome. re no ~ council action and i ~, we are confronted t are c~ntrary to the * Denver come lefare you armed with per onal prestige you as David~ o~ old, armed with a ling and one I 750 DEMONSTaATION CITIES ANI~ UEBAN DEV~LOPMEN ~ integrity of ~3,878 our citizens. t have. do~umeuts to cposals vhi nstitu~. his I~'roperty for n renews jects.) ~ opportir~ Lent." (I b at In every PAGENO="0165" I We e dorse U ally t your this p man: our COflVl( in the deve DEMONSTEATI DEVELOPMENT 751 Mr.B~' from the to feel at I observ enough to ask him ~ iat I have wi i the council would be kind ~ers may proved ~ers that we few years. PAGENO="0166" ~ I 752 DEMONSTRATION CITIES ANI~ TTRBAN DEVELOPMEN He has proved himself very capable. And I am quite sure e would like the opportunity of presenting you two gentlemen to his corn- mittee this morning. Mr BAcui~cH Thank you, sir STATELMENT OP RON~. IOEN I GIL~JGA1~ A REPR]?SENT TIVE IN ! CONGRES~ YRO~ TK~STATE OP ORIO~ Mr. GILLIaAi~. Thank you, Mr. Oh~irman. Distinguished members of the sulb&mmittee, ~ we ~have, r. Chair- man, the mayor of Cincinnati, the ilonorable Walter Bac rach, and Mr. Gradison, whom he has introduced. And in the suppo ting cast who will not make a formal statement, but will be availabi for ques- tions if ~neecied, the Hoiiorable Tl4eodore Berry, who is Assistant Director ~of the Office of Economic opportunity, and Direc or of the Commun~ity Action Program unde4 t~tie II of that act ho is the former~1i4~e mayor of th~ city of Ci~cimia*ti, and a former chairman of the h~using and urban developm~nt committee of the co neil ; Col. Jack Alit~n, the urban development 4lirector of the city of Cncinnati; and Mr. Richard Coleman, who is~ director of the Bette Housing . League of the `City of Cincinnati. As it happens, I served 11 years on the city council, and served on the urban development committee ; , so we have, in the prese cc of Mr. Berry, who is of course now a very distinguished officer i Federal service,. myself, the mayor, and Mit. G-radison, four mem ers of the city co'u4cil of Cincinnati who have ~erved in prior years o the urban deveiopi$nt ` committee and `are a~juainted with the p ogram in Cincrn~ti in cooperation with the ~?ederal Government to build and rebuild a citywhich is now lfl yearsfoid. ~ I have no further statement to n~Eake, Mr. ~Jhairman, ot er * than to say that I have introduced identical legislation to H.R. 1 .341, H.R. 12763, which I would hope would constitute my endorse ent of the concept `before the committee today. ~ I would further say that Mr. Berry-because of his nterest in community action, as `~vell as in t}~e urban development rogram in Cincinnati-has said that he wm1d~1ike to. submit a writte statement whichI~would present to the ~om*$~e"for your considerat on at some latertin~e: I Mr. BAm{m'r. That may be sui~mitted for the record. Without objectioh, itis so ordered. * .~ (The statement referred to fo1lo~s:) S~r~Pi!~Mim~T Fi~o~& ~ri~ CINCINNATI . ARE~A flPON THE PROPOSED DE' ONSTRATION CrnNS Aor AND TUE Ni~n FOR ~LEXIB~IPY IN DIn~oT ~ A. SISTANCR TO A LABOR METROPOLITAN ARRA AS PRA~O5ED BY TilE B~NEB HOlY ING LEAGUE OF GREATNE CINCINNATi, INC. ; THE. C~rIZENS'ADVISORY COMMITTE FOR URBAN RENEWAL, AF]ru~iATR OF UimAN AME~IU&, Iwc. ; IN CooPER~TroN w PH THE CIN- OINN.A~I CITr OOUNOIL, . hAMILTON COtJ~NPY OOMMISSiONER~, CINcI NATI BOARD OF ED1~TOATION, HEALTH AND WISLFAE4 COUNCIL OF TEE OINCIN API COMMU- NITr ~T[EST, AND OTflR~R MuNtciPALr~i~ AND . NEIGHBORHOOD 0 ANIZATIONS We ha~re used what y~eu have offered-4- * Completed are 6,99~ units of pubileihousing. Since 1950, 26,615 substandard ho&~sing units have been elim ñated in the area through urban renotval at a total cost of $~142,5O0,0O0 which local governments contributed $40,800,000 mainly in Street, sewer, a d other pro~j- ect area improvements. PAGENO="0167" 753 DEMONSTRATION CI~IE~ AND V BAN JYEVELOPMEN~ In one of the 1ar~e~t rehat~flit~tt1on o$ t~ in the enintry lnveFving 2,69S structures, 832 str.ucture~ ba~been re bflitated. Thirty housing inhspeetOrsI~ave been ~ i~1~ ng ~fOr I~Y y~ear~ t~ enforce a hotis- ing code and seven more are ~lat~ned I i~ e coneentrat&~ i~ode eni~oreement area~. In the l~t 3 years 1,016 u~iits o~ 1 d~ housing are occupied and over 26,000 single family units btv~ be~n Ins r 4 * y PHA~ National 1~1ementary ,ai~d ~ee4~ndar ~4 oation Aet money of $3,&12,~16 has been allocated for use b~' th~ boa d o~ education for supplemental pro grams in 22 schools. In a section 107 program, ~I1~9S6 j~ s ~ eeu i~sed to demonstrate a new code enforcement contie~t; ~ *. In 1965, $5,119,712 wasiisedin ~4are i~ ovei~ty programs. and have taxed ourselves to the lin~it-~-~. ~ ~ Over $93xnu1llon~was~id ~1t }~am11 o ~ unty property tax iii I~65 coin- pared to $27 million in ~:t~5O, ~ ~ ~ Over $17.2 million Was p~tic~ ii~~ 12- ~ i~- d lOcal 1 ~ere~t ik~coitte ta~ in 1965 to the city o~ Oincinna'ti~wh~Oh h ~ a n~ied debt~ Ov~r$23S ~nlllion. Over $~`mill1o~i Was ooU$ted~ `by u41 ~ appeaYln 1965for I2~T agencies compared to $2.6 mIllion f~t S~~e~cies I ~ 0 ~ ~ Over $65 million has ~ bee~~ s$nt o be public school comstructkn in Cincinnati alone since 19~O. Over $20 million was cbar~ed user f ublic utilities and fa~ilitles in 196~. Over $10 million has been ~pex~t by r ~ fldustrles in the last 3 years to prevent air pollution. Over $57 million has been s e~tbon a e h spltal Improvements since 1950 including a $17.2 million Vote hi~prov d b d issue for Olneinnati General Hospital and a $19~ ~ii1lion V e~appr v ~ mid issue f~r other hospitals. Taxpayers support the secó d i~trges ~t Icipal uni~erstty in the country as well as an excellent art mu eui~i, s ii~ y, natural history museum, and other eu1tur~l activities. ~ In a typically rural Ohio ~ tLhi~ pr 1~t taxes support all local public services. ~ in well-planned, coordinated and co pe~atIv~ ~ o~ ams- ~ The 1925 CincinnatI area In step pla s ~ gt~rded as not only one of the earliest area plans but o~ie of he best. The 1948 Metropolitan Ohiei~rna1~i ma ~ r ~ an haS been carefully followed and used as a development gi4de. The 3 State Ohio-Kentticky-India ~ tit nsportatlon study has béeil approved by 9 countIes and a t~tal of 1 0 U lcipalities. Over 130 active neighborhoo~ o~anl~ t on regularly review public needs and programs. I The community. chest an~L ur~ited~app i~ rg~nize4 on a five county-twa State basis. * ~ ~ ~ . Both Ohio and Kentueky' pa~ts Of Ui ti~ Innati area have ~ active, well staffed regional planning com$iss~ons. ~ Comprehensive mental healt1~pU~ns a ~ ~ ~ ing completion for four coun- ties fti southwestern Ohio and se~ven~couu j ~ northern Kentucky. One hospital council plans m~die~1 fa il t~ for the five county area. One community action comn~issi~n p1 ns t~onoth1c Opportunity Act pro- grams for the five county area.~ ~ One water system serves 900,000 peo ~ an one sewer system serves 27 : municipalities. * ~ . . ~ ~ One publicly supportedJvaiña~a re~atio ~ cO missign has ~or over 22 years ~ ~ worked to improve minorit~r group ~tatu I t e entire community. ~ but we have many programs waiting ~or funds . . Of 36 urbanrer~ewal p~oje~ts ~pro~ram d o~i y 12 have been started. A general plap~ 1~s been d~ve~op~d for ~ 1~ e West End area and others can quickly be completed when ~un~s ar i + ow. Over 22 new school building ~epI~ceni ~i s ~ d additions are planned and needed in the CincInnati ~fsten~ alc~rie. A data bank program has bee4 develop ~l a~ awaits funds. A plan for neighborhood 1ie~ll~i cl~pio~ ~ a~ s funds and a plan for neigh- borhood centers is being cJevèlt~ed. ~ PAGENO="0168" 754 ~EMONSPRATION CITIES ANJ~ URBAN DEVELOPME T A ~n1fied personnel training progi~am fGI~ the . 41 agencies i volved has * been ~Ieve1oped. ~ ~ . : : A i~iassive sewer. extension plan ha~ been ~ developed. A ni~jor tItoi~oughfare and expressv~$ay plan is ready for funds nd is being built at far to slow a pace. J . Of $1,521,000 additional appropriaLions requested by Cincinnati city de- I partment heads in 1965, only $251,00O was available. There are still some 41 000 dwe'ling units (11 2 percent) which are dilapidated or lack plumbing faciliLie~ in `the metropolitan rea of the 51,359 (15 percent) reported in the 1960 census or the 30 perc nt reported in1~O. *1 And we need a more flexible program of tirect assistance'- We are served by two DRUD re4ous, one centered in Chic go and one : in Atlanta. I. w~ have five separate urban rexi~$.. p~og~arns as required. W~ have three separate public ho4~lug. auth~wities. F~A applicatk~ns are flied here ~or .~ayton, but in Louis ille for the `}c~t~ncky portion o~f theurban ai~ea4 ~ * `V~A~ applications muit be sent to e4tber Olevelapd or Louisvil e Section 701 plannIng funds come t~iro~gh the Statefor some rca munici- paiit~s but from DHUD in Chicago Ør Atlanta for others. The metropolitan area is served from two Ofilce of Economic Opportunity regional offices. Separate agencies and organizations have been established to be eligible for some types of Federal funds, others must come throug the State, Oouiity, or individual munieipalities~ As prop*cl in the Demonsf~ation City A~it~ Yes, . w~ ~sve use4 what you have o4~ered and have taxed our elves to the limit in `~vel1 planned, eoordinated and c~perative prograpis, but w have `many prograx~ waiting for funds and need a nfr~ flexible program of dir et assistance as propo~ed in the Demonstration Gity ~ct~ ~. The many and varying Federal aid i4nd grant programs in ape ation in the Cineinnitti metropolitan area are confuefi~geveu to the experienced ivic leaders, while the average citizen is confused by~ the many things that can or cannot be done and the timelag involved in gettin~the most needed programs started. Complex urban problems facing citie~ willing to help themselv a as demon- stated can only be resolved through massive financial assistan e. We need financial assistance on a dhuct basis without unnecessarily involved restrictions, procedures and time delays and on a lo4al priority basis. We ha$ enough per- 8onnel i14i~w experienced i~i `these prograi4s to greatly expand them. If the Demonstration City Act p~se~ ~ presented, you will hc~ar from Cm- cinnati J~u regard to expan~jon ott areaw~~leplannbg programs and ~unding many projects' in our basin area. . ~ ~ . Mr. GILLIGAN. Mr. Chairman, ~ if it please the com~nittee, Mr. Gradison, as chairman of the uri~an d~ve1opment eomm~ttee of the council, will present the statement ~rnbeha1f of the city. Mr. B~unurirr. Mr. Gradison, we will' certainly be glad jTo `have you submit the statement. If you de~ire. to complete the statement, and then we should like. to ask you ~rne questions-or if yqu choose to proceed any other way, you may do so., and we will be gla~ to go along with you. ~ M~ flJ&ADISON. Mr. Chairman af~d memh~rs of the comi~nittee, I ap- pear before you this morning repr~senting the city of Cin~innati with respect to the proposed Demonstr~tion Cities Act of 19'66~ As chair- man of the urban development coi~mittee of our city coun~il, I am the elected official charged `by the cou4cil with the principal r sponsibility for leadership in urban develop~4ent in its broadest sen e, including housing and urban renewal. Before turning to the speci c legislation before the committee it may be appropriate to note that or 5 years I served at the policy level in the Treasury, and health, E ucation `and Welfare Departments, and therellore have had an oppo unity to ob- PAGENO="0169" DEVELOPMENT 755 ~spect to the PAGENO="0170" 756 DEMONSTRATION C~TJES ~ND URBAN DEVELOPMENT demonstration projec~ts. If the Congress does decide to limit the I number of cities-and I hope it will noø-then it certainly seems reason- able to make planning grants to all ~ities which appear to have the capability of developing a demonstration program, and then later choosing the "winners" after the planning reaches a proper degree of detail. The approach in the bill would put the cart before the horse. I suppose that most cities of proven competence in urban renewal assume, a)$ does Cincinnati, that the~y will qualify as a demonstra- tion city. Further, I suppose that ~tich cities, like Cincinnati, are already taking steps to become demo4tstration cities. I fear that this legislation as drafted will raise false thopes, not just among cities and their official spokesmen, but also anuxng many of our citizens who are living in abject poverty and see this~ legislation as a bright hope for improvement of their neighborhoods. If you limit this legislation to selected cities untold millions of people in other cities will have every reason to feel rejected and passed over. It would be far preferable to see the principles o this bill written into existing urban renewalland housing statutes, aking it possible for all cities with well-dev4ioped plans to qualify, and aim- ilarly imfposing as a condition for future Federal grants nd hard- hitting, concentrated, coordinated, a~nd flexible attack sugg sted here only for selected neighborhoods in s~lected cities. Such an approach would be far more important in my ipinion than the extra ercentage grants contained in the bill. I believe that the demonstra ion cities bill as drafted would only delay the Federal, State, and lo al actions needed to improve housing conditions in all of our cities. Thank you, Mr. Chairman. We would, of course, be happy to a~nswer any questions. Mr. BARRETr. Thank you, Mr. M~yor and Mr. Gradison, for a very fine statement. Certainly we appr~ciate hearing about yo r progress and problems of Cincinnati. Mr. Mayor-Mr. Gradison may ~ant to answer this, but am going to direct the question at you. On page 4 you tell of the many ~tgencies and programs ou have to deal with. ~ It looks to me as if you favor a eoordinator right now ; hether or not the demonstration city program may become law. W uld that be a correct statement~ Mr. GRADISON. Mr. Chairman, i~ I may-we would envi ion the co- ordina1~or, if he serves his best fun~tion, as serving as a so rce of two things4-information at the local l~vel, and coordination t the Fed- eral level. We view it as our job 4 the local level to provi e the neces- sary degree of coordination amon~ our own programs, an in the city of Cincinnati, unlike many cities, ~*e do not have a separat redevelop- ment authority. The functions of urban ren~wal are ca ned out di- rectly under the supervision of our council as a function f city gov- ernment, and we have had a number of successful-sever I successful bond issues passed to support this program without any efeats along the line. Mr. BARRETT. Thank you, sir. Mr. ~Widnall? I Mr. WiDNALL. Thank you, Mr. ~hairman. I wOuld like to coi~gratu1ate y~u on the statement yo have made 1 PAGENO="0171" Budget Original o~pp~oved bud~t.- Project expenditures (Federa' * ~ Neneash local grants-in-aid (1n.ci~ides see. i 1~2~ ~ .~ Cost $2, 105 736 . 1,039,689 14, 162; 500 . 14,554,300 4, 100, 871 20, 961, 968 $9, 721, 967 8, 818, &70 18, 540, 337 75~7 DEMONSTRATION CITIES AN URBAN DEVELOPMENT before the committee. it seems o e of all the statements we have had, this goes to the heart of the m tt r. You have told us some of the pr b ms that arise out of the proposed legislation-the fact that as you sa it is inherently discriminatory because of the few towns that wo 1 get the ben~fit out of it. I notice in the report that you a , the blue pages, which are most interesting-I have not seen any th r city submitting anything like this before-you mention 26,615 s bs andard housing units have been eliminated, in the area since 1~95O t ro gh urban renewal at a total cost of $142.5 million, to which local ow rnment contributed $40,800,000 mainly in street, sewer, and other p oj ctar~a improvements. Now, how many of those contrbu ions given credit to Cincinnati were actually in existence at th ti e the urban renewal project started? Mr. BAOHRACH. These would be th noncash grants-in-aid. Mr. WIDNALL. How much of yo r 140 million was noncash? Mr. GRADISON. Mr. Chairman, i o der to answer this specifically, I think we will have to get additi n 1 figures, which we will do. I would like to answer it in part in thi w y : We have had urban renewal bond issues, two of them, one in 195 , nd one in 1962 approved by the voters. These are put on the tax 1ev In addition, the council has powe , nder its own charter and State laws, to issue bonds for public impr ye ents, and has done so, in addi- tion to voted authority to provide un s for urban development pur- poses. Over and above this, we have had a ditional bond issues approved, particularly for streets, sewers, and sc ools, which have provided the noncash credits which you mentioned. Mr. WID1~ALL. Well, would you. ub it for the record something that is more accurate than you can re ember at this time-a break- down of your noncash contribution t ward these various urban re- newal projects? Mr. BARRETT. That may be done. ~ ithout objection, it is so or- dered. (The information referred tO follo s :~) OHio R-6 AVONDALE I- OI4YVILLE PROJECT Rehabilitation atuZ new constr ot~s1 as of Mar. 11, 1966 -~ . ~ ~ ~-------`------~-H- . . ~ ~ ~ Eehabilitatiou: Completed Started New construction: Private, completed Public and semipublic, completed Private, started Public and semipublic, started ~ ~ Number of buildings 848 818 39 10 8 10 Total gross project ~~at PAGENO="0172" 758 DEMONSTRATION CIPIES AND URBAN DEVELOPMENT Site improvements ineludecl in project exj~enditure~ budget include streets, sewers, water. mains, street lighting, parks, piay areas, etc. Cost : $2,23 ,740. Noncash local grants-in-aid improvements finclude street, lire ~ house, ddition to school, offs4reet parking, reereation deck, w~ter main, street lights, an others. Cost : $~,223,t8o. ~ ~ I Revised bu~get.-Submitted txrreglonal offi~aniI pending approval. Project expe~iditures ~ J. $21 013, 960 Noncash local grants-in-a14 ~ _~ 16 278, 583 . Mr. WIDNALL. I notice that 832 str~ctures havo been reha ilitated in one of the largest rehabilitation pr~jeots in the country, in olving 2,698 structures. Do you believe that this is a mOre sound approach than t e bull- dozer method that has been used in mai4y cities? Mr. GRAIMSON. We firmly believe t1~t the rehabilitation a preach is far preferable to the clearance apjjroach if it will work. In our view, this.~roject, and many other~s 1ik~ it around the country, have to be viewed ~as experimental in th~ ~e~n~e that we do not have s much experience with the real results that might come about from ti em, and, furthermore, it has only been in the It~st year or two that we ave had . additional tools in the way of direct grants to low-income fa ilies in such areas which may provide the fii~ancial wherewithal for comply- ing with the provisions of our code and our higher reha ilitation standards which we have set 11pm this area. This pa~rticular area has about 600 facres, and it is a very i portant one to us, since it directly adjoins ou~ great University of C~ cinnati, and is similar in some respects to pr~jects such as the very i portant Temple proj~t in Philadelphia, ~ich is somewhat simi ar in its intent. I : Mr. WIDNALL. Within those areasjwhat do you find th~ r action of the pecple who have been living tht~r~ to be~ Are they for r habilita- tion, modernization, or would th~y~ prd!~rmass relocation? Mr. ALLEN. Mr. Chairman-it is~.a mixed reaction you get from the residents of the area. ~ Ma~ny of the buildings, of co rse, in a rehabilitation area are not usable ~for * reht~bilitation, an ~ must be cleared in order to remove these blighted ones which are b yond the possibility of reh~bilitation. ~ It was very slow catching on, tl~e rehabilitation idea. But with the added city improvements, the r4ad and street improve ents, the curbs and gfitters, shopping centers which are being built on urban development land, it is sort of serviiig as a catalyst for thos~ who were slow in getting the message. The tools in the 1965 Housing Act were in those under the $3,000 income category, were provided ía straight $1,500 grant for the rehabilitation-also improved this th~ng. And I think over the years as we experiment with this, we ar ~ not oniy experimenting with legislative thole, but we are experime ting with methods in how to reach the peo~ile, and convince the this is a proper thing, a proper attitude fc~r a neighborhood to t y to settle ~ their pebple on. t . Adja4~ent tO this area is the unive$ity. So the people ar beginning to develop an identification with a~i institution. By the ame token, or at the same time the institution is developing a relati nship or a feeling for the area that is right nex~to them. So to answer your question, agaizi, it is a mixed emotion on the part of the people as to whether they prefer rehabilitation o clearance. I PAGENO="0173" DO~S~1tATIO~ CIflES D']tV~LOPMENT t meeting r 3 y 759 with e not avail- ~d. it intc~ that ~[. itison $4, 274, 877 0 - 4, 274, 877 - `2,282, 320 -- 289,763 2,572,083 CITY OF CxNcnu~A~r, D~PAJITM' city cost PAGENO="0174" 760 ~ I~MON8TRATION CflIES AND ~IW~N DEVELOPMENT Total pröjeot8 co$t8+ontiuued Queensgate I (Jan. 3~ to Feb. 3) : ~ O~pita1 grant .-~ - $15, 512, 400 Relocation grant ~ ~ .~___~ ------ - 1, 171, 760 Total, i'ederal grant 16, ~84, 160 City's eligible item II cost__ ~. 9 434, 050 Olty's tn~ligib1a item II cçst ,-~__~-_~ -~ - ~---~ - 2 956, 26T Tc~t~a~cU;y co~~t ~ ~ ~ ~ ~ 12,300,317 Avond~a1e-Co*ryvilie (Jan. 3 to 1~'eb. 3) ~ Capital grant_ ~ ~ -~-`~----- ~-- -~------- ~ - , 060,822 Re1ocati~n grant ~ --+ - 394, 900 1'otal, 13'edeta~ grant ~ , 464,722 City's e}igible item II co~L ~ 818, 370 CI1~tes ineligible item II c~st 139, 515 Total, dt~y~ cost -~ - ~ , 957, 88~ Coi~e ârea(~an~ 4 ty Mar. 4) : Cap~ita1~grant 4 ~ 3 ~j 673 Reloealjon grant__ ~ , 621, 022 Totai, Federal ~rant__ J 3 , 020, 695 City's eligible item II cost_________L 4, 521, 605 Oity's ineligible item II cost 2, 243, 151 City's administrative cost 1, 21, 952 Total, city cost ~ ~ 708 R1verfr~t~fan. 4 to Mar. 4) : Ca~frtt~ gra.itt ~ 3, 533, 507 Re1ocfl~Uon ~rant_ 600, 000 T~ta~, Federal grant~ .~. ~ 4, 939, 257 City's eligible item II cost 4, 939~ 257 City's Ineligible Item IT cost ~. 513, 804 City's adminlstrathe cost ~ 1, 485, 726 Total, city cost 6, 938, 787 Queensgat~ III (Jan. 4 to ~tar. 4) : Caidt*i grant-~--. --~-- Z 066,078 Re1oc~t1on grant ~-_-_--+ ~ ` Totkl, Peieral grant 4~. 2,761,251 City's eligible Item II eo~t `~ ~ 688, 993 City's tueligible item H cost 114, 956 City's admiiilstrative cost 427, 000 Total, city cost 1, 230,949 Tothi, Federal grants (61.3 percent). 79, 339, 402 `J~'ota1, city contribution (38.7 nerc~nt) 50, 076,729 grand total 4- 129, 416,131 I PAGENO="0175" DEMONSTRATIGN CITIES exact title urban renewal le assis the people SUr4LIvAN, ~W ie loans they n~ ALLEN. *1 b provide this f~r4' Mrs. SuLLIv~ [LEN. et bar DEVELOPMENT 761 te are charged I would have to ~terest-rate Jtate of U some stud~ Mr. V~ lvii - ~OU W * Speci~ out a den-i * figure on]: stions about )nstltutiona. :i. taken advan- not yet ~out rent W~ ~want to help to carry roximate PAGENO="0176" 7~62 D~EMONSTRATION CITIES AND URBAN ` flE'V~LOPMEN MJ~oi~çii. M~ Dwy~r, I thi~rik the fiwds we~ are th aking of now would be in the rnvture of p1annin~g funds. Mi~J~w~. P1amingg~a~t~? ~ ~ ~ ~ , . ~ ` Mi~ ~çm~oii L~1anning g~ant~ t~ plani the u1tim~te pro ram that we w~u1d wa~t to get i~nto~ Mrs. PWYER. But not the figures 4s. tohow much it woul cost for the wjiQ1~ p~ojeot ? ~ ~ ~ . Mr G*ADISON There is no way tbM we can tell without g ing much 1~rther in the plarnmmg Ui~dei~ the ~* as drafted, ~t is very indefinite a~ to how 1a~rge a neighbc~rI~ood would qti~a1ify, and the exten to which it wo~1d 1~ balanced between ~e~b~htatioii. and clearance ould de pend, of course on the imighborhood and on th~ a~drninistra ion of the ~~A; i$ j~s~sec1 ~o t~h~b I do1~i'b 4hrnk ~t 1~UL1d be-we at leas could not give ~oii any realistic figure withouff going a great deal fur her in our Qwn ~ørk I mig~it say in that connectio~ h+wever, that within our own corn mui~t~ wIiic1~ is ~ Qkl ~ommuw~ty~ we have neighborhood in which we feel that the rehabilitation and Qode enforcement techni ue will be s~cess~l, caji b~ sucoessf~l, an4 w~ have other neighborh ods, some of them quite large, and very old, in which the condition of housing is so po~ th~at all cornpete~it people w~ho have looked at it ha e felt that o~ly clearance could be used in tI~os~ pai~ticular neighborhoods in order to ~ a pi~~eto live. Mrs Dwr~ I ask you that q4estioi~i because we ha testifnony from the mayor of the city of New4~ that if we were to h ld it to 70 cities, it would cost in the neighbofrhood of $10 billion- nd because he estrn~iated that figw~e, a~ui Mayoif Oavaw~gh agreed with it, I would like to ask youthis question, Mr Ma~yor We are in the process of voting $13 billion for the war ~ Vietnam. The war, as you k~iow, would seen~i to be gobag on for so e time. In view of this, do you think we shouhj limit the number of ci ies to some thing less th~ui t1~ 70 cities whioh *e hear so much about ? Should we limit it to, say, 3 to 5 demonstratio~ citi~es at this time, and not embark on perl~aps a $10 billion program f4r 70 cities ~ : ~ Mr; n~i~o~i. Well, Madam Q~ng~essma~u~ I can ans er this, the I fi~~st p~t, very easi4y, b~ saymg th~t whAtever the demand or requests to fç114w through with the si~tuai4~n in Vietnam I think would take f~s~ pipe. ~ I think as far as cutting th~n~mber of cities, I think hrough Mr. Gra4ison's statement for Cmcinnati, that we do not beli ye in limit i~g the cities, I pe4~o~a~lly, through. my yea~~ ~n the city ocaincil, a d I am sure the members that have served with me feel that aitho gh we have pJa~ ~f~r the fut~ire,~ I think mo~t c4t~es have enough p ojects going right iiow to keep them busy, and f~l*is is not in answer to our question on th~ Vietnam situation. ~ i~ the~e~ ia ax~y plans for the future- if theh~ is some legislation passe4l for fttrth~r aci~ion by the cities, it would seem to me that all of b~e~ti~s s1~iourid be looked at and given an ~quatl opportwiity. Does this answer your question ~` Dw~si~. Yes, thank you v~ry much, Mr. Mayor. Mi~, ~ Mr. Moothead? Mr. Mooiuimtn. Thank you, Mr. Cha~irman. PAGENO="0177" j~_-~. Moorn~ 60-878-66- PM~NT PAGENO="0178" 764 DE1kEONST~AflON CITIES AND ~ ~BAN DEVELOPMENT Mr. BAiatEi"r. Would the gentleman ~ie1d tome? Mr. MOORHEAD. Of course. ~ Mr. BARRETP. Mr. Mayor, I am quite sure the testimony y u sub- mitted here this morning is acceptable in every detail. It i dicates that you want to rehabilitate your great city. But I don't t ink in- jecting the Vietnam situation in such a~r i~nportant piece of le is~ation as we an~ i~rnw having testimony on *uld be beneficial to t e cities that need help so badly. Some of i~hese area~ someof these cit~s have very troubleso e situa- tions. While we are certainly aimiii~ to do everything w can to bring a quick conclusion to the Vietmin situation, we have t , by the same token, work in a coordinated ~ay to help eliminate t iese de- plorable situations in these various cities. And I am hope ul that we don't inject Vietnam in such a hun-lane piece of legislation that we are trying to work out here. Mr. St Germain ? I Mr. STGERMAIN. Did I understh,ndftyOu tO say that you fel that re- habilitatio~i-this was in your oral st~n~e~tr-that rehabilit ion was preferable~to i'enewaJ ? I Mr. GR4~bISON. Not at all, sir. Wh~twe were saying was at both techniques are needed, andsome make!m~ire setise in one area, and oth- ers make more sense in another. . Mr. ST GEEMAIN. How old is Cincin~nati? Mr. GRADISON. The city was first sBttled in 1788, and moo orated in 1805. ~ Mr. ST GERMAIN. You are one of the younger cities, then. I think I understood y~u to say l~J1at when your active lanning reaches a proper degree of detail, th~n a choice should be m de as to which eille~s should be demonstratk4i cities-is that corre,c ? Mr. Gi~DIsoN. Yes, sir, the point i~ this : I cannot unders and how the demonstration cities could intolli~ent1y be chosen until he plan- fling process in these cities reaches ~ certain point, so that ou have something to examine on an objective basis to see what kin of a job they can do. Mr. ST GERMAIN. Right. Evidently you have not had t e benefit of some of the information that has b~en elicited at the heari gs previ- ously. To probably help a little with your comprehension o this, the thought is that plans would be subniitted and applications, nd these would be~ general plans-not detaile~l plans-in accordance with the eight guidelines provided for in this proposed legislation, and that these cities would be chosen-actuall~rIthink more or less o the basis of need. ~ And I feel that one Of th&faotors that should be d has to be recognized also is this particular c~ty that will be chosen s ould be a typical city, so that if we cure the ills in this city we will t en have a pilot or a demonstration project or an~examp1e for other cities to follow. As to your suggestion that the planning have a certain degree of detail-on the one hand I think I tinderstand you express a fear of the fact that the funds t,hat will be channeled into these dem nstration cities would take away from funds g~ing to other projects in cities that are not demonstration cities. Well;!if that's the case, then hy spend all kind~ of funds for planning in c!etail in these many citi without any guarantee or hope-let's not sa~~ hope-but without a y guaran- tee that these plans can ever be put in~ô action. PAGENO="0179" DEMONSTRATION OI~IES ~now, plans you cc ~ir. ~+RADIS0N. find ways to im~ back in the `-~--t up to d ~.pornt~ ~,ERMATh ~RADI5ON. ~ )ulation ~ARRETT. [ARVEY. other bill. I wotiL towns proposal-in iti ~` ~aproces he comniu urthermore, itry now, wi ~193O'~ share the insofar 2 [es legisla ~ centers. PAGENO="0180" 766 DtMONSThATION CITIES AND URBAN DEVELOPMEN Ther~4. ~httg~, ~ongwaiting .1ist~ ~ TJiiless ~he demonstra ion cities are givefl priority in the~ ob1~aining~óf the Federal matchi g funds under existing pro~rarns such as th4t, the demonstration i going to bog dowfl to th~ point thá~tthe last oJ~ these major programs that they are onth~ waitinglist for can be fui4d. Therefore, as~ a practical matter ~ of administration-a ci I have read Mr. Weaver's~ testimony on th!i~s, and I still feel this ~ ny-as a practica~l i~na~tter, I think the demonstration cities would ha e to have priority, so that the necessary resources whith may involve interstate highways, highway beautification, .r~creation facilities, as dl as ur- ban ren~wa1 :~fld housing and sch~o~s and other things-so that they canbeb~ought togiher in one po~ñt4f time as well as one ge graphical po~t'~i ~ ~ ~ Mr l~I~&nvi~r Thank you very mu~h Your testimony is ery clear ~nd we appreciate receJvlng it ~ Thank you,Mr~ `Chahi~an. Mr. .BA4~E~ Thani~ you,Mr. Ha*vey. . ~ Does the gentleman from Rhode I~land desire to ask other uestions? Mr. ST GERMMN~ I t1~ink when y~ou mentioned the sectio 107 pro- gram-~---~ hada little probl~mtryingto determine section 10 of which act. ; . . Mr. `CbUm~AN. I thin~k4-~- ~ {.. Mr. ~ G~EBMAI~. Oi~iS this a type~aph~ea1 error ~ M~. .G~MAN. No~~~4~re .g$ thQ ~ney~ mid~r this sectio . This is this Ioi~icoffie~ IA~usi~g dGmons~tion program. I th k it was funded in1961. ~ ~ ~ Mr~ S~rGEnMAn~ ~ Ii~wasimde~rth~ l9~i act? Mr. ~OLE1~tAN. Hoi~ing Aet~-i ~ thinl~ so ; yes, sir. ow-income housingdemonstration program. Mr. S~ GERMAIN. And this wasj*st a demonstration project? Mr. COLEMAN. That's correct. Mr. ST GERMAIN. And Oincinn$ti, Ohio, was one of th fortunate cities t~comew~d~r it 3 . ~ ` Mr. ~!kT~EMA~. PheBetter}Tous~igLeague served as the contractor, th~ ci~ i~as th~ app1ik~ant in. this ~instam~e. That progra . has been und~thMay abo~ut 2 years aiid is near~oncItision. Mr. ST G~Am. :~4~r. Graciisoi* brought out the fact that if the De~aonstration Cities Act as pi'opo~ed~-~ it were to he ad pted, there would' be' marty unhappy cities. ..~ `submit we are trying t determine whether or not legislation can be effective. This is often imes going to happen. ~ * Just as tl~is $ll7,OOt~ was granted to Cinci nati in this particulü ifl~tance, section 107 of Ehe 1961 act,, we could ot give that deinon~tration money to ~ all cities~ but your e~perience c rtainly has been infraiuabM to~us~ : ~ * I ~ * Mr. 43flADIgON. If It~iay sir. 1~e big question here is hether you nesd a cli~inon~traLion to~ show tha~ these coordinating ac ivities mas- sive pitograms will do the job. ~`he burden of my tesM ony is that unlike the low-income housing de~nonstration which was getting into a field which had not been adequately studied, that this ~s something which we are dealing with every day in our urban rene~ral work. I sincerely suggest that there is a question `of whether it is necessary f~ `sponsor demonstrations in order to show that these tech iques in t~ bill will work. I submit that * know that already. PAGENO="0181" F tEMONSTr short, ~ ~}]~TtMAI1 ~ADISON. ~T GERMATh. - r. GRADISON. I t to `think of it in terms with the Federal agene~ following re~ PAGENO="0182" 768 1~fl~tONSPRATiON ~ CITIES ~ AN ~ URBAN DEVELOPME P ResoZve~Zby the Uovneilof the City of ~noinnati, Btate of Ohio, at council hereby endorses the principles of the proj~osed Demonstration Cities Act of 1913~ now before the Congress of the United Stakes. Passed March 9, 19&~. ~ ~ WALTON BACHRA4J , Mayor. Attest : * ~ ~ ; D~&LE SCHM DT, Clerk. COUN~Et OF TUE CITY OF C1NOI~INATX, $~`4ATE OF Onio, O~rie~ OF TH CLERK OF H Cot~N~YI~ I hereI~y certify that the, foregoings t~'ax1script is correctly copi d from the books, papers, and Journà1b~ of the city ~ Cincinnati, State of Ohio kept under ~ authority and by the ~d1rectionof the .co~~ici1 thereof. A resOlution passed March 9, 19~6, th~t Council of the City of C ncinnati en- dorses the principals of the Demonstrati~n Cities Act of 1966. In testimony whereof 1 have hereunto ~et my. name and affixed the seal of the clerk of connëil's office this tenth day of ~krch in the year Nineteen undred and sixty-siz~ ~ ~ ~ ~ ~ DALE Sc MIDT, - . ~ Clerk f Co~uncil. . Mr. 1L~u~io~rr. Our nf~xt witness fwiil be the Honorable George B. KinseiiE~,, mayor of Hartford, Conn4 Mayfr Kinse~i1a, we certainly wa~t you to feel like one of the mom- bersofthis big family. ~ ~ I observe you have an associath with you this morni g. I was wondering if you would be kindfenough to introduce im for the record. ~ Mr. JCINSELLA. Mr. Chairman,. members of the commi tee, this is I Mr. Robert Bliss. He is the director of redevelopment fi~om the city of Hai~tfoi~and has ~held. this po~ition for the past 10 ears. Mr. j~iuu~r. Thani~ you. ~Mr. fNtayor, if you desire to c~npIete your statement before any questic~ns are asked, you may do s~ Certainly we will abi e by what- ever yØachoose to do. j Before starting, Mr. Mayor, on~ of my very close colle gues is here to intr~duceyou and your associates this morning. ` This gentleman has certainly aft~tracted the attention f the mom- hers of the House from all parts of the United States. ~ He does a very effective job. ~ I think he has~been a great help too. . I would like him to introduce hi~iayor. Mr.Daddario. ~ ~ ~ $~ * STATEM~t. OP ~ EMILIO .Q~ DADDARIO, A REP. $ERTATIVE t XN*CONGBF4S~ PItOK TK~ STATE OP CONNEOTI UT Mr. DADDARIO. Chairman Bari~tt, I am most appreci tive for you and your committee having giv~ Mayor Kinsella this opportunity to appear before you, so that you~might get an expressio of his opin- ion QU the Demonstration Cities Act of 1966 which the committee is now reviewing. He~has with him Mr. Robert $ss, who is an expert in his field and who is where to participate with ~ayor Kinsella. I *ould like to add It is withtconsiderable pride, too that I come here ftiis morning be~ause Mayor Kinselia is the mayo of my home city. He comes from a family jcrhich has expressed its lf forcefully over three generation~ of time in 4~ivic activities. He is t e third mern- PAGENO="0183" DEMONSTRATION CITIES ~ D tRBAN DEVELOPMENT 769 ber of his family who has been a rn or f Hartford. His grandfather, his brother Jimmy, who is now j.u e f probate, and now Pete, as we call him, is the mayor of the city. hi is something that we in Hart- ford are pleased to see, because it em nstrates the ~ activity of a fine family in civic affairs to the bene o the great city of Hartford. I am pleased that Mayor Kinse is here before you this morning, Mr. Chairman. Mr. HARVEY. Will thegentlema fr m Connecticut yield to me for a moment. . . Mr. Chairman, I would just lik o iso express a welcome here to Mr. Kiiisella's assistant, Bob Blis , an to disclose to the committee here that about 15 years ago I had t e pportunity to work with Mr. Bliss when he was then a part of t ci y administration in Saginaw, Mich. Mr. Bliss was in charge of ii planning and housing in that city. I was then in the city att r e `s office. We worked closely together with municipal problems. It was Saginaw's loss and Hartf r `s am when he left our city and went to Hartford. I believe this is the first time I Ii v s en him in those 15 years, and I would like to issue him greetings, a d ~ ay we are happy to have you with us, and to you, Mr. Mayor. Thank you. Mr. BARRETT. Mr. Mayor, you y ow start your testimony in whatever way you desire. STATEMENT OP HON. GEORGE B. K S LA, MAYOR OP KARTPOItD, OONN. ; ACCO]~PANIED BY RO T BLISS, DIRECTOR OP RE- DEVELOPMENT, HARTPORD, CO Mr. KINS1~LLA. Mr. Chairman-I ou d like to second the remarks of Congressman Harvey. It cert i ly was Hartford's gain when we acquired Mr. Bliss for oUr rede e o ent program. Mr. Chairman and memberso~f the rn ittec, I am Mayor George B. Kinsella of Hartford, Conn. On be a f f Hartford I wish toextend my deep appreciation for the opp u it~ to appear before your committee to present this testimony ~ s pport of the Demonstration Cities Act of 1966 which is before you Our city has been carefully analy i g i s provisions since its intro- duction to the Congress. I have i f ally discussed the act with Secretary Weaver who was reeei~tl `n artford for a Connecticut community conference. At this con e en e, Dr. Weaver was the key- note speaker at this, his first major ad es as Secretary of the Depart- ment of Housing and Urban Develop en . His principal theme was the Demonstration Cities Act and h ss ed a vigorous challenge to the assembled cities to produce a plan ith an impact on the problems of housing, education, employment, an social services. We in Hartford havebeen asking ou elves what is meant by "dem- on&tration" ? What should we demo strate ? Webster's dictionary defines demonstration as "an outward e pression or display." We~ ap- plied this basic definition to our city a d the answer to the question became clear. It is to show all of our people, particularly those in blighted and tired neighborhoods who re confined not unlike captive PAGENO="0184" I 770 D~4ONSPRATION C~ETIES AND ~ URBAN DEVELOPMENT ~itizá'~, ti~t there is h~pe fo~' them.J W~ b~iieve that not nly can we d~rn~n4~trath that there :j~ ~, futm~ for these citizens but iso that .O~n, ~x~m~Ie ~aji assist the Federa,1 Go4~rnment in providing a formula for flationftl suc~e~ of this demonstra4ion program. We reaYze, how- ever, that in order to be a success a d~i~nstration program ~ as to be founded Gfl accomplishments and realhtic program proposali~. Hart- ford's foundation in terms of what we have already done is: 1. Completion of a community r~n~wal program in the su~umer of 1965 and its recent approval by th~ Department of Hou~ing and Urban Developmeht. j 2. A ftill revision of the~ zoning orc~(inanees and an upchtec~ compre- ~ hensive plan for the city iiearing coti~ph~tion. 3. A ch~tai1ed study of our overall ~ho~l biñlding needs-~repared by a gr&iip of consuitants-which h~s been completed and ~hich has served asthe basis for a recommend~d cityWide building p$grain by the board of education and its admithstratioi~i. 4. Organization of a community renewal team in accord~nce with the Economic Opportunities Act of 1964 and activation o the fol- lowing specific programs: (a~) Education : Child devel~pment, school and c mmunity work study, special services in e]~ementary schools, speci I services in h~gh schools, adult counseli~ig centers, reception c nters for non-~EngIish-speaking students~ Project ~ Headstart, c rriculum stuc~. ~ I (b) Employment : Direct emj~loyment assistance, Nei hborhood Youth Corps in schools, Neighb4~rhood Youfh Corps ou of school, on-the-job training, Job Corps. ( e) Social services : Weifare~ akls, homemakers-tea ers, Vol- unteers in Service to America, case aids, Girl Scouts, unwed mothers. (~1) Neighborhood services :j Tenant relations advisers, corn- murlity renewal team lleldwGrk,jcommunity service corp. .~ Q~) Housing : Service to ho4ing project residents, a sistanc~ to mi~i4ority group hoi~e finders, l~ouse ~urveys. 5. Town meeting of tomorrow h~ld. in Hartford in 1964 and which has resulted in nine towns within Lthe capital region ado ing ordi- nances under State enabling legislation providing for bc 1 member- ship in a regional council of electedx officials. 6. The organization of a housing development fund b the local business community for the purpose~ of providing financi 1 and tech- nical assistance in constructing a variety of housing in r newal and nqnren~wal areas, `1. Api~gram of 1G renewal pr~jeots, 3 of which hair been corn- pleted ttnd `~ whidi are in either adfr~ced plaiining or exe ution. 8. Authorization by the city co~ncil to proced with th first phase of the community renewal p~ogra~ñ~ which calls for four substantial renewai projects totaling over 700 ~cres withthe capital i provement program providing the city's share. 9. Completion of the first phase ~f an extensive flood co trol project. 10. ~ Establishment of a State-city government center c mmittee. 11. Adoption by the Greater Hartford Chamber of ommerce of progn~m. of Operation "Go"-dedicated to improving ho sing, educa- tion, employment, and social servi es. PAGENO="0185" enactn~. -~r and and also toward th ~, and t 7entoriec~ and then forn In addition confined c~ - sense of ho'~ deinonstrati hat th~ by the the social the same I can s PAGENO="0186" 772 th~rO~smAnON CITIES AND ~ tE]3AN DEVELOPMJ~NT moning aM of our energies and irnagi4~tion to~ward achieving a~ work- able. fc~rth~ of ~ metropolitaii g~v~rnm~nt. * By commitment I mean rn~tking ~L construotive mistake in the hourse of action rather han the fatal one of standing still or, worse ~ of being lefb behin in the shaping of the new city and its ne~er~ and much more i portant citizens, By commitment I mean perfr~mance not promises, ~ ecisions, not delays; and action, not apathy. These are the accomplishments, the~ p~grams ~nd the hop s of our city and i$tropolitan ar~a. It is ~pr4bably not the criteria or other cities wh~e strengths and weakne~e~reinidoubted1y differ nt from ours. ~ . We comgratulate President Johns~i for his: rn~sage on &ties `and praise the freshness of the approach, $i%c scope of the proposa and the objectives of the iegislatio~. Surely prudence must be exercised ~ri the funding of this a t as well as the urban renewal program and other vitally necessar Federal programs involving financial assist~nce. On the other and, the American city is on the move and *he mom~ntuni which hook the city from~ its lethargy `has to be main~dned. The results of ~ rograms set up fof the betterment `of cities a4d metropolitan areas a e visible `througlitht the United States. The$ resi~ts are the catalys for more striking rains and th~ demonstratio4 ç~ities program is anot er excel- lent device dedicated to improving c~ties and their citizens. This `aOt places the responsibility, for imagination and ew ideas upon the city. It is an awesome r~ponsibility but more f a chal- lenge when the city knows what it ia~ where it is, and realiz s what it wants to be and where it must go, in brder to survive, becom vigorous and vital asithe heait of the body metropolitan. Mr. 14~mu~rr. Thank you, Mr. M~yor. Mr. ~ayor, on page 4 you thenti~n the "adoption by t e Greater Hartford Chamber of Commerce ~f a program of Ope ation Go, dedicated to improving housing, e~ication, employment, nd social services." I Does that meanand do you cornfrehend it properly to ean that the chamber of commerce is for dem~bnstration cities in you city? Mr. JCINS~LLA. `I must say, Mr. chairman, that the Gre ter Hart- ford Chamber of Oommerc&-and I emphasize Greater Hart~fotrd Chamber of Commerce-has throughout its history provid d the nec- e~sary drive, financial assistance, h~as acthd as a catalyst, sing both p~vath'~~siness and G'Ø~vernment un prômO1~ing programs as 1 have mention~d-housing, education, efuployment and. social services- and st~u~tds behind the Oemonstrati~ Cities Act as anoth r tool that " might ~ used to facilit4te ernployir~eiit, education, housing and social services in our city. ~ ` ~ ~ . Mr.' BARR*rr. The retL~ofl I ask y~d~ this qi~stion-we had the Cham- ber of Commerce of the United St~,e~ `before u's and they pparently did not think exactly as the chamI~r of commerce in your great city. Mr. KINSELLA. This is the reas'ôti, Mr. Chairman, I me tioned the Greater Hartford Chamber of Co~mnerce aiicl emphasize' this. Mr. BARRnTT. Mr. Mayor, I am~ going to shorten my uestioning here. We don't want to detain y~u too long. The bells ight ring on us, We want to rehtse yOu as iekly as we possibly c PAGENO="0187" ~lishfrig a positi( and energies al agency, our iT the needs [believe th better 1~ PARRETT. In INSELLA. Y ~RVEY. L. to ~ all its prop in round figures-~ar millions dollars or Mr. KINSELLA. You ai But we are more-p'ard within the area, not the c to enable us to break out demonstration pro, sir,I cannot SELLA. Th _~NSELLA. ~ a 20-year program Mr. HARVBY. 0 been the One I re that is the fearf was not picked other cities if not in the program? Do concern? Mr. KINSELLA. Certainly w as to-as we testified-how th~ DEMONSTRATION C~TI~S )EVELOPMENT 773 believe therefor of ~ram. It's aboi leave tL and were ) you have this PAGENO="0188" I 774 DEMONSTRATION CITIES AND URBAN DEVELOPMEN be furtd&i. We have concern as to ~hetiier or not the $2.3 illion is enough to fund tI~ program th'at i~ so * vitally necessary t all our cities. ~ ~ ~ I Mr H~vi~i~ Well, it obviously is i~iot enough, because if you figure it out in: ~hnp1emathematics, and yo~i take the money neede~I for the dernonstra,tion cities program, you ate going to use up the i~irban re- newal fuiids, and a lot of the other fends that some of the other cities have been watirLg for a bug time. ~o this is a real concern~ I won- dered whether you had given this tIi~i1ght or not-because c~ut of the 700 citieseligibie, there are only 70 go4ng to be picked as dem~nstration cities. .~ Mr. KINSELLA. I beiieve over a period of years that thi~ country of ours ~an provide those people, a~l of us, the services, t~ie oppor- tunities-I believe it is great enoug~i to provide all of us with these opport~iii~ities and ~ervic~, and the$for~ I would indicate t at if the $2.3 hillibn were not enc~gh, that n4re money might be fo hcoming from the Gove~rnment. These are 1~he first areas of action so neces- sary, irnmedi~tely necessary, to sav~ a deteriorating situat on which if it is iTot solved and solved immediately, chaos will resul Mr. HARV1~Y. Well, let me ask you this. If the demonstration cities program were to wire out a~ y future program that you had for urban renewal if you did not g~et to be a demonstration city, what choice wqmld you make ? I realize that's a tough decision for a mayor, and fa tough question for a Mayor to hays to ~nswer. But this is what ~fre are faced with, real tough de- cisions, right here. ~ j Mr. ~ It's a tough que$ion, but I think perso ally that, as I said before-that we should r~ot have to make a dec'sion. We have .pr~pared programs, we are moving ahead under t e present le~islaitk~n available. We think tht we can move ahea faster if this demonstration city bill legislation becomes law. We a e not say- ing that we should eliminate or `forget about our renewa programs which are now in planning and ~xecution. We are in erested in finding another tool, and this Demofistration Act would pr ide this- anoth~rtool tomoah~dfa~ter wi~thour problems. Mr. 1Ia~nvi~r. Well, Mr. Mayor,fl don't think you hay answered my question. But let me say as a ffrmer mayor myself, I an see why you woi~ld not want to. I have no further questions, Mr. Chairman. Mr. BAmu~rr. Thank you, Mr. Harvey. Mrs. Sullivan? Mrs. SULLIVAN. Thank you, Mr. Ohairman. Mr. Mayor, you have made a very, very good statemen one with imagination. I can see that a lot ~of thought and plann g has gone into it. ~ how do you believe the cities *ould be selected to p ticipate in the d~i4ionstration cities program ?t Mr. KINSJ~LLA. If I. am not mist~ai~en; I believe that the President's Task I~orce came up with the idea of a demonstration citi s program. This i~ ~ itself represented people from many different reas of the country, many diffen~nt occupatior~s, many different educa ional levels. It would be my thinking that iH~-and I recognize in he selection of the cities to participate in this possible legislation t would be my opinion that this task force th4at has been familiar wi h the prob- I I I I PAGENO="0189" PAGENO="0190" 776 ~kM ES A~D ~ii~13A~ tENELOPMENT Mr. S~ ~GERMAIN. It a~tua11y took ybu what seems to be the average time sp~ia 7-y~r span. ~ * Since ~L.4~m rathi~r * faffiilhar with ~hrtford-I have a si ter who ~ ki~f time i~i Hartford. Christina time we were i~*~se~ *ith~Wh~Lti~t you e41:it~~~theshoppers mall. Mr.j~t~~ths~ Oonstitth~ion Plaza. ~ ~ Mr. ST GERMAIN. Wewere very i4*essed with thwt, and ware of the work&wn there. ~ ~ ~ But aellially, telime, what type ~f urban renewal, these projects you ha~ ~omp1ete&-~havethey been ~omrnércia1, or have you one into housing'? ~ ` Mr. BLISS. The first three projeots~ which actually combin to form Oonstit~jtibn Plaza were alic~m.merci~1 types. We are gettin into the periphery of the areas of the city, a~id ilito neighborhoods ow. We do have a~ high-rise housing dei~e1oih~ent starting directly ac oss from city hall.J Inthree of th~ remainingjprojects, we do have a oncentra- tion of h~sing~ ~ . Mr: S~r G1~R]~ATN. You do have, a~fail ether communities, problem with sub~tanda~rd housing, do you notf? Mr. BLISS. Yes. ~ Mr. S~ GERMAIN. Do you feel thai you are giving enoug attention to this probleiri as against the renewal, such as Constitutio Plaza-a balancing off, in other words ? Mr. BLiss. Yes. I think there mi*ht be a little delay in g tting into the resh~ntial area, but ~ think tha1[~onsistent with the ma or's testi- mony, á$d coiisist~nt wIth the proI4k~m that faces the olde , particu- larly ~ft~etn~ibies, it~ i~ absolutelyfa must to get into the core area, downtQ~+n, becai~se I think this is wlfr~re the investment is, t is is where the librgries are, this is where cit~hall is, government s rvices, the large ~i*res-4his is the key. ~ ~ In oi~t city,80 percent of the rth~nuewhich goes to run he city has to come from the real estate tax, a~icl probably about a th rd of that comes from the very, very small. ce~itra1 business district. It is abso- lutely .i~pera~tive that that be shtn~ed up economically efore you cou1d'~t tolhe periphth.'al areas, a~nd really tackle the ho sing prob- lern. ~ while wennght have beenI~ little bit late, I thin if we were to d~ii~1 over again, w~ woi~ld hav+ t~ ~tart the same way and at the same p1~Lce. . . ~ F . * Mr. ST GERMAIN. I might makefthis~omment. We on he commit- tee, those of us i~ho ai'e rnembers ~ support urban ren wal, appre- ciate th~ dollars and. cents factoi~ in~olved. By the sa e token, I don't iç~ow about others, but I pa~'ticu1ar1y feel when yo see people in sub~taiidard hous~ing, you a1s~ have a moral ob1i~ati n which is very ithpc~'tant. That's my concetn. I do hope the city f Hartford is keeping this in min4 also. Thtre is a moral obligatio to see to it these j4~p1~ are prc~$r1y house4. Mr. ~[~ör, doyóu have a comni~nt? Mr~ Ki~i~u~~&, Yes, Congressm~n, I i*~u1d add to what Mr. Bliss h$~s said. Most serious a eas of decay in our~city were in the area wherelConstitution Plaza no stands. Mr. ST GEUMAIN. Is this decay ~f commercial buildings ou refer to? Mr. KINsEr~t~. I am talking about residential. This as the oldest PAGENO="0191" DEMONSTRATION CI~ES ~N DEV'ELOPMENT 77? PAGENO="0192" i~tO~ThA1~TON ~i~IES ANI~I L EARREPT, (From Forbes maga I~WELOPMENP the ~rffl enable detaft in :~ ~resident. PAGENO="0193" DEMONSTRATION CITIES URBAN DEVELOPMENT the build s Levitt. `.~ot he exis1~ing Levitt a ~ must plan C no sense ~i putt: putting 1 - it eont~ es -~ _e next ~.. a the suburbs of exist- it need ~-but iced," L~ ~of the I get m rage mom F Now C~ ~ress sh the sewers and th would cost about ~ )roade u couldn't for homes. ities-for thinks, receive large C 60-878-66-pt. 2 WHAT ~0HNSON .ous and ring cities `s." These will Le to "arrest blight PAGENO="0194" 780 DEMONSTRATION CITIES AND URBAN DEVELOPMENT in entire nelgbborhoods." The program wou1~t be aimed at rehabilitatin neigh- borhoocls not ~n1y physically but socially as ~e1l. In each of the demon tration cities, the Pr~sideut hopes to ~ehabllitate l~etween 15 and 20 percen of the slums and, `~$n more importaut,~ the people ~4Iio live in them. The Pres~d4nt's proposals include a ban on ~liscrimination in the sale o rental of housing, ~O million for rent subsidies for jtbe poor, and a 1-year exte sion of the mass-transportation program. They a1so~nclude-and this is what i trigues Levitt-"mortgage insurance ~ ~ ~ for sites *nd community facilities f r entire new communities." Johnson agrees that "otir existing urban centers, owever revitalized, cannot accommodate all the ur1~an Americans of the next genera- tion." He also agrees that "the growth of new communities is inevitabl ." ~ Tha Cirx OF W~TEBBU ~, ~ ~ Wa~terbv~ry, CoG~~n., March , 1966. Representatj$re Wxi~LiAM A. BAaimrr, Ukairman, J~ousi;ng Subcomeinii~tee, Uomm4ttee o~i Banking and Cut+ency, Washington~ D.C. . DEAR R~Pt~ESENPATIVE B~in~rT: We in aterbury have followed ith great interest and anticipation President Johns ~ n's proposed "demonstrat on cities program." We believe this approach to u4*n problems is not only a unci, but virtually essential to the realization of lastibg solutions for cities such s ours. Waterbury is utilizing as many of the existing aids for urban cle elopment and community welfare as possible. Yet w~ lind that they are inadequ te to help achieve the task before us as quickly an4 effectively as we believe ecessary. We feel str~ngly that a broad based, coor4inated program with suffic cut finan- cial assista~nce is needed to attack our pr4bléms on the necessary sc le. To be truly effeél$ive, such a program should b~ flexible and encourage e ch city to design a .o$~prehensive attack on itsown ur4lque problems. In order~to more fully express our sup~ort and enthusiasm for tb proposed~ demonstra4iou cities program, I requested~ In a letter dated March , 1966, an opportuidt~ to testify before your subco4imittee during the curren hearings. We in Waterbury feel that Congress shot4d be made aware of the 5 pport this program bgs in cities such as ours. If, h+wever, arrangements cann t be made for my apj~earance before your subcommiittee, I would like to reque t that the enclosed statement be included in the pro~eedings of the hearings. Thank you for your effortS on our behalf~ Sincerely, FuEDERICK IV. PAL MBA, . : Mayor. Sr~TEMI~I~T OF MAYOa FEBDERICK ~T, PALOMBA, WATERBURY, ONN. The co~nplex problems confronting A$erican cities to~iay dema d bold an.d imaginattve solutions It appears to tlufr of us who struggle dail with these problems that the approacl~ suggested i4 Ercsiden't Johnson's pro ned demon- stration cities. program is a major strid4 toward the ~ievelopment f a compre- hensive ~lttack en related urban ills. Our experience in Waterbury has alrlady demonstrated to us t at a coordi- nated effort utilizing all available aids iscapable of producing mor substantial results than the same aids operating independently. However, the present framework for administration of all reláted community developme t and social welfare programs is not geared to ~ the necessary broad approach. We envision the dezmjaistration clUes program as a 4ieans to channel existing rograms and develop new ones within one overall ~tdministrative and operat ye structure whose s~1e purpose is the i~eordination 4id Implementation of the c ty's physical and sOc~al goals for improyement. ~ Furth~rmore, we have toUnd thait the ~ieed and demand fer essen a1 services- social, educational, ~ and physical-are ~rawing at a more rapid ate than our capacity to provide them. If cities suel~ as ours are not only to h Id their own, but also to try to reverse the trends of many decades, substantially i creased finan- cial aids are neected quickly. Existing ~idsmust not only be con ~ ued, but also acceler~ted. We believe the proposed fdemonstration cities prog am offers the basis for an approach of the necessary ~nagnitnde, although we ar not prepared to evaluate the adequacy of the fund$ presently proposed for a location. We PAGENO="0195" DEMONSTRATION C~TIE N URBAN DEVELOPMENT further be1iev~ that this pro~ra~, If ~i ete , eannGt stc~p with the initial demon- stration cities. Every city ~ faced w t ~blems suei~ as ours should lYe en- couraged to develop an ~mn~lna~lve, O ~ ehetisive program of remedial action. All those cities demoustrat1~ig the n~ed nd the a~1l1ty to participate should be permitted to do so. We fell that Waterbury i~ tl~ ty*~ o~ city that could moSt benefit frOm a demonstration program and that cou~1 ~ duce the most dramatic demonstra- tion of community impro~ren~ent Ou~ ~r4 itions fer Watei~bury, however, can only be realized b~r dedicated ef~Ort ~ b~ Ii the local and Federal level. We feel we have come a long ~ray alre~d . ~ n a few short years, a climate of progress and change has de$loped I , ~ erhury. This new climate is ideal for the vast new programs *ont~mpi ~ U ~ the deirionstration cities program. Three important aspects of eon~xnun ~ ti titude and change are particularly representative of this new cl1x~iate~ Urban re~iewa~ referndn~-O~ Ju ~ 5~ 1963, the people of Waterbury made known their faith in the city's tjrban ~` flE~ al program. By an overwhelming margin they voted "yes" to tl~ie qttesti ~ `~ e you in favor of urban renewal?" This expression of stipport *as the e ü~ of an outstanding effort b~ local citizens to make know~a the ben~ts f ~ an renewal to the general public. This type of broad sup~ort 1~ vital fo be eomp~ehensive program Waterbury wishes to accomplish. . ~ Higkwa~y cOi~trzotio~~4~o4ig i~euiO ~ ~ m the main corridor of highway travel, Waterbury has fought áhcl we 0 attie for a location on the State's new major highway network. ~ As a res~d ~ o a concerted ef1~ort by local officials and citizens alike, Waterbttry~ is . ~ow ~t tl~ hub of a highway system which provides direct access froth all~poi~its o~ t e onipass. Route 84 (east-west) and Route 8 (north-south) will e~iab~e th~ it to compete for retail trade and industry with any city in the State. It ~ s t e foresight of Waterbury's leaders that convinced them of the r~eed of t~ii ~ vantage. The city is attempting to maximize this advantage thr4mglj its i~i~ a~ enewal program, Regional p1a~ning.-.Wate~br~ry is at ti~e con er of the central Naugatuck Valley region. The Central Nangatu~k Valle~ e onal Planning Agency is a fully staffed and oprating regional pla~inin~ g ~ cy which has ben performing a valuable service for the region slnc~ its o u~ tion 5 years ago. Its most unique achievement is the developmen~ of the r t egional plan to be adopted in the country. Regional planing is a recqgniz fu ction of gove~mment in Waterbury and has and will continue to play a r ~ 1~t the direction of community and regional growth. All new plan~ and pr a developed by the city are under- taken within the eoordi~ated fi~amêwor f etropolitan development provided by the regional planning agency. In order to capitalize on the ~nth~isias a~ support that has been generated for the local programs, pren~pt ~nd vigor ii ~ tion is required. Here in Water- bury we have made every attemr~t to ma! t in he pace that has been established. Despite a slow start in urban ~ne~va1 a t vit , Waterbury has shown remark- able gains hi thepast several yea~'s. 1. Three pro~jects already in e~ecfltion ye een brought close to completion. 2. A community renewal program (C ) as been initiated to guide the city's total urban renewal ~ffoi~t. 41th n I~ ittle ~ more than half completed, the CRP has already demo~istra~ed ~tself t b an extremely valuable tool and is becoming a recognized compo~eut of ~ ciI~ `s overall development program. It has already resulted in the folh~wing ste ~. 3. On recommendations devel~pe~ fro t~i CRP, a new renewal project, Porter Street (R-1Oi) , was desig~at~d be 1 y ~ d has already received a survey and planning advance. Furtherr~ore, an ~ ly and acquisition loan application has already been submitted and ~s b~ing ~ . ~ ed for this project. The entire project is to be devoted to mode~ate inc 2 1 (d) (3) housing and/or State- sponsored housing for the elderly. This ~ ~ evelopment is also expected to generate new vitality in one of W~iterbury' "gr y" residential neighborhoods. 4. Based on recommendations by both t e RP policy committee and the Redevelopment Agency, a major~ do~.vnto~ p oject has been delineated and a survey and planning applicatikrn ~tlrea y su mitted. The central business I district (CBD) project in~ludes ~he majo r~t ii and governmental center of Waterbury and is intended to att~tck some b t~e city's most pressing problems . on a scale which has lieretofQre ~eer1 lac ! g~ Waterbury's commitment to a . massive program of community i provem ii is typified by this major under- 781 PAGENO="0196" 782 DEMONSTRATION CITIES AND U ~AN DEVELOPMENT taking which includes over 90 acres of prime iand and is anticipated to ave a net cost of over $50 million. 5. Based on an analysis developed during. the CRP, the city is mi iating several unassisted renewal projects in undeveloped areas which were prem turely subdivided many years ago in a manner which precludes developmen now. These will be used as relocation resources fei~ displaced industrial uses. 6. In additien to its regular welfare and ~education programs whic have provided contijiuing serviee to the c~nimunit~f, Waterbury boasts a citi en in- spired, erganized, and operated nonprofit 4ge~ey established to ad ~nister programs of tI'e Office of EcononUc Opportunil~y. New Opportunities for ater- bury, Inc. (N~W) has been operating for onlfr a year, but has already ade a significant contribution to the lives of many ~isadvantaged families. We are making every effort and will conti4ue to make new efforts to rovide our citizens with better housing, more soctal services, broader edu ational programs, expanded community facilities, Mid in .. creased amenities o urban life. However, we believe it will be extremely difficplt, if not impos ible, to achieve our desired and ~ necessary rate of .~ogress under the present system of administration and financial aid. . We c~nnot shirk our obligations to our citizens and we welcome the challenge of m+re eom~rehepsive, more a bitious methods to achieve our goals. Therefore, wf in Waterbury urge you to provide us and cities like us with every possible assi~tance. ~ We feel the demo stration cities program can be one ofour most valuabi tools to achieve our task. STATEMENT O~? CLARENCE W. BIRD, Dixucvoi4 NArIONAL ECONOMIC COM ISSION, TIlE AMRRIC~N LR~ION Mr. Chairman and members of the subcommittee, I appreciate the op ortunity to express the view of the American Legion in connection with H.R. 11 58. The American Legion's support of H.H. 11858 is based on resolution No. 577, adopted by our 1965 national convention. ~ A copy of resolution N . 577 is attached. The Housing and Urban D~velopment ~4ct of 1965, provided, am ng other things, a sp~eiaI Federal Housbiig Administ4ation insured housing loan program for all honor~tldy discharged seilricemen (inc'uding war veterans) . There is r~o limitation in the law as to tls~ number of times an eligibi service- man may avail himself of these special F~deral Housing Adndnistr tion loan benefits, except in the case of a veteran who has previously utilized h s entitle- ment under the Veterans' Administration's thome loan program. In h~s case he is barred from any benefit under existing law. It is the position of the American Lesion that this discriminat s against certain war veterans. H.R. 11858 will eliminate this unwarranted d scrimina- tory provision under the present Federal 1~ousing Administration la and will give all qualified veterans the same adva*tfige in applying for the iberalized mortgage financing terms as granted other s~rvicemen. Mr~ OMij~man, we thank you for this o~portnnity to comment on .R. 11858 and hope that prompt, favorable action will ~e taken. FORPY-SthTENTH ANNUAL NATIONAL CON3'ENTION OF' THE AMERICAN LEGION, PoRTLAND, OREG., Au1us~ 24-243, 1943~ RESOLUTIOI~ 577 Gommittee : Economic. Subject : Veterans home loans. Whereas, the Housing and Urban Deve~opment Act of 1965, amen~1ed section 203(b) (2) of the National Housing Act t~ provide for an 1~HA insui~ed housing loan program for all honorably discharged veterans of active duty in the Armed Forces of the United States ; and Whereas. such act provides that this benefit shall not be availab to World War II and Korean conflict veterans wholbave received their benefit under the VA housiug program ; and Wherea~, there is no limitation as to the~number of home loans eligi le veterans may obtain under the ~HA veterans insur~d loan provisions ; and Whereas, this discriminates against Wiorid War II and Korean onflict vet- erans which is entirely unwarranted an4 places peacetime veteran in a more favorable position than wartime veterans: Now, therefore, be it PAGENO="0197" 783 DEMONSTRATTO~ CITIE A D URBAN I~EVELOPMENT Re$olvet~i by the American Legioiv i ~ ona~Z convewtion assemb~e~ in Portland, Oreg., An~iu~ 24-2~, J96~, that sect Q ~ (b) (2) ocf the National Housing Act, as amended, by the Housii~g and ~ a~ Development Act of 1965, be fnrther amended to elimin~t~ that ~?rovisio 14 h bars benefits under the VA housing program from obtaining FH~. insure v t~ an home loans. [ si gr mb ~ Cnicor~n, MASS., Ma~oh .2, 1966. Hon. W~t. H. BAmmTT, Chairiua~ of the House 1~nking ~ d C rrenoy CormmSttee, Bubcommtttee on Housing, Howe of Re~'es~iitat~ e , ashington, D.C.: The city of Chicopee, Ma~s., ~esire~ 0 e i~corded favoring enactment of the Demonstration Cities Act o~ 19~36. ~hico ee is an old industrial city of 60,000 people divided into five dtht1z~ct ~ectio~th tb1~ Ugh Immigration, sociological, ethnic, and economic impacts and i~th ~entu*~ fá~ ory-own~d housing for millhands. We urge enactment of thi~ prograi~ s ` desirable opportunity to attack and solve vital areas of concern ~o obr pe le, hefr health, environment, and oppor- tunity, both economically an4 cultural y RIcHAIm H. DEMuRS, . Mayor, City oj' Chicopee. STATEMENT BY JAMRS J. FL~fl~, JR., A~ R OF Puirrn AMBOY, N.J., TO HousE Su~co~tMIT ~ ô HouSING Mr. Chairman, I urge thnt P~rth bc be selected as a demonstration city under the administration's prbpo~ed le i 1a~ on. I believe that Perth Amboy wotild b I ~ to prove the purposes of the program advocated by the administration. W ~ e ö r city is still strong and secure, our population has decreased and has d o pe to an estimated 34,000 from about 45,000. Our business district, wMch cons s s ~ ~ older buildings, has suffered the dilemma of every city surrounded by op ing centers. Our young people, who do not find it necessary to reside ne t]~ great industries in our city, have moved to the si~bur'bs and we ~iave been~ s rU gling. We have justifiable pride ~n Perth A b y : the ci~y has a fine hospital that serves the entire area. We 1~iave a Y~ 4, a YMHA, a Salvation Army facility, and 48 churches of every den~minatlor~. We have a good public school systen~, cv n parochial schools, and a parochial high scho~l. , ~ , ~ We hate a boardwalk an~ *~erfr~ t ,r creation area, a yacht club, and a marina. ~ We are a center of for p~ofession~l ac ivities-medical legal-used by the entire Raritan Bay area. A respected and successful i~ewspape~ s rv s the area. Our banks and savings and loan facili~ti a Ii ye grown steadily. Our industries are prospe~ous and~ e p oy over 12,000 persons. They are diversified and include some o~ the rno~ ren wn names in America. We are proud of Perth Atnboy, w1~i h as founded 302 years ago on the shore of Raritan Bay. We h~d a great i fit x of heavy industries-coal, copper, lead, and others. Until 1914, mafly pdg le ame from Europe and built modest homes within walking distanc~ of the p1 nts. But Perth Amboy needs he~p, ~nd t e Fe eral Government can provide some of that aid. Perth Amboy needs access roads, md le~ncome housing, a rebuilding of the downtown business district, apd `the el in tion of many substandard business and residential structures. I~i additi ±1, ~ have long-range plans for estab- listing a public works center, ~i new m ti cip 1 building, a cultural center, and a new police headquarters. Mr. Chairman, if Perth Amb~y is sele t d s one of the 70 demonstration cities in the Nation, some of these i~portaiit . roj ets will be converted from hope to reality. ~ I ~ ~ * ~ PAGENO="0198" 784 ~EM~NSTRATION . CITIES AND TJ~BAN DEVELOPMENT ~ ` AIkd if they ~ire, zwt only will the city of 4rth Arn~oy ~eneftt, but m re im- portaut its peo~~1e, who are looking forward to ~ great era of resurgence pr gress and achievement I : ~ .Z~réquest that this `statement . be includedi in the ` official hearings f this sUbcommittee. ` Cir~ OF CAMDEN, April 6, 966. Hon. WILLIAM T. CAHILL, UongressmaH,. First District, LOngworth IIo~se Office Buikiing, Washington, I~.U. j DEAR CONOBJ~SSMAN CAHiLL : I do wish to t4ke this opportunity, in ace rdance with your 1e11~er of March 3O~ to submit a st~Ltement for possible cons! eration to the House c~mmittee as stated 1n your letter!, With regard to the demonstrát~on cities ~ro)ect reports indicate t at pre `ferred eitles are to~be given the assistance. , pis~ if true, would be aga nst the grain of basic, sound American principles. ~~If fuHds are to be availa le, the principle of equal opportunity ~bou1d apply. I am opposed to the sele tion of municipalities for Federal aid oft afly basis ~at does not give to all th oppor- tunity to apply. . ~ I believe the times has come for any cit~y applying for aid to list all aid previously received from the Federal Govert4ment. I have the impress on that a revelation of funds received would indic4tte that some cities have already received preffrred treatment and are still ~lamoring to be at the to of the list for new n~oney. Camden wlfl welcome the opportunity to 4tanpete on any fair basis or Fed- `eral help to *ln the battle against slums, b1~ght, and decay. I have a pi~oposal to submit for the commi1~tee's consideration, as folio s: Allow cities to borrow funds fr~m the ~ederal Government~ mak ng pro- vision for the delay of payment of principaj for a period of 10 years r more. The city would pay the interest on the lo*n. If foreign nations ca be the direct recipients of loans from the United ~ States, I believe our citi s are a better risk. I would welcome the opporti4tiity to discuss this idea further. Direct loans rather than grants will elimiMte much loss of time a d prove to be far more valuable. Cordially yours, ALFRED R. PIERCE, ayor. Mr. BArnmrr. Without objection,.wejwil be in recess until 1 o'clock tomorrow T~iornng. (Wherei~pon, at 12:45 p.m, the sub4~nimittee adjourned,, recon~ vene at 10 a.m, Tuesday, March 15, 1966k) PAGENO="0199" are constructively of- of the proposed program. and members of the commit- vill not do away with all the urban society today. How- DEMONSTRATION ~IT1ES ~ ~ URBAN ~ DEVELOPMENT TU~]D4Y, E H 15, 1966 HOUSE ~ EPRESENTATIVE~, S~TECOM o~.1IoUSING O1~ TIlE Co~~iMIrrE N ANIUNG AND CUmrnNCY, ~ lVashington, D.C. The subcommittee met,~pursua t to recess, atlO a.m., in room 2128, Rayburn House Office Bu~ilding, u~ William A. Barrett (chairman of the subcommittee) pr~siding. Present : Representativ~s I~arr t , rs. Sullivan, Moorhead, Reuss, Widnall, Fino, and Mrs. Dwyer. Mr. BAimErr. The com4nit~ee ~ 1 ~ me to order, please. This morning our first witnes ~ 1 be the Honorable Ralph S. Locher, mayor of Clevelar~d, Ohio. Mr. Mayor, would you coipe t l~ witness stax~d, please? Mr. Mayor, we hope ~e c'an ~ e ou a comfortable feeling this morning, and we want yo~i t~ fee t ome. I do want to. say for th~ reOord t a~ Charlie Vanik, one of our out- standing Congressmen, a ~er~ ca ~ le and knowledgeable Member of Congress, has been speaki~g yery i~ g~i y about you, and the splendid job you have done asthe mayor of Cl veland. Mr. Mayor, if you desiri~ to rea o r statement in full before any questions are asked, you n~ay do s~ hatever procedure you are de- sirous of fóllowing,we would be d t abide by. STATEMENT OP HON. RA~P1~ S. C Elt, MAYOR OP CLEVELAND, ox Mr. LOOHER. I would pr~fer that r~ Cha~irman. . I want to reciprocate, a~d stat he high esteem and regard with which we hold Charlie Vanik. m one of his constituents. We frequently look to him for advice a d counsel and help. And I ap- preciate the fine things that he has aid ~bout me, and I want to return them manifold. Mr. Chairman and memI~ers of t co~nmittee, my name is Ralph S. Locher, and I am mayor o~ the ci y o~Cleveland. It is an honor to be invited to appear befor~ this eo~ti ~tee to speak for the people of the city of Cleveland in si4ppbrt ~f }J~4R. 12341, the Demonstrations Cities Act of 1966. Our view, our c fered, intended to May I start by tee, that this bill is ills and prejudices 785 PAGENO="0200" 786 DEMONSTRATIOr~r CITIES AND TJRBAN DEVELOPMENT ever, it is a step in the right direetio~i and undoubtedly one of the most impoitant pieces of legislation t~iat will ever come befc~re this committee. ; ~ Mr. Chai~rman and members of the 4~ommittee, I am well a~vare of the vast c~unitments the united St~4t~ has undertaken to ~ontain communism and to maintain peace in the world, to open the ne~ fron- tier of outer space, to create a great socIety here at home. Gen~tlemen, I submit that of all these goals, the most difficult to achieve will be that closest to home, the creation of the cheat Society. Yet up to this point, that goal is the one which has received the least attenti n over the years from the Federal Government. Make no ~mistake about it, our great i~tropolitan cities are ti e nerve centers of ~ur Nation-the centers of ~ur culture, business an indus- try, educa$on-of our very civilizatio~i itself. The day is lo g since past when ~he United States was a nation of farmers, when t e fron- tier and the land of opportunity lay in~fthe unclaimed and und eloped vastness of our plains and mountain~. Yesterday the land as the frontier, tQmorrow perhaps it will be space, but today the fr ntier of opportunity is the city. The city today is not just the port of entry for the immigra t-both from foreign shores and from he depressed regions of our wn Na- tion-it is ~t~he destination. To our b~rders daily flock thou ands of young and~.old seeking a better life, se4king an opportunity to partake of our unprecedented prosperity. B4 for far too many thei dreams of opport~Inity have turned out to I~e nightmares of despa r. Tin- propertied~ and jobless, millions of ouricitizens have been crowded into the old deteriorating areas of our citjes `to create slums and ghettoes from which there is today little hope o~ escape. At the same time, our upper and middle economic classes h ye been fleeing `to the suburbs, leaving the central cities to fend f r them- selves. And fended we have. But the task, gentlemen, is ecoming to much for us to handle on a piecemeal basis with a bit of a sistance here and there from the States and F4deral Government. The ph~s economy, with the high dross national product, he high- est in histGry, and on the other hand tl~e pockets of poverty an misery, remind in~ of the preamble to the "Tal~ of Two Cities." It was th~? beSt of times, it was the wor$ o~ times : it was the age f wisdom, it was the age of 1~oo1ishness ; it was thefepoch of belief, it was th epoch of incredulity ; it was the season of light, it wks. the season of darkness ; .~ was the spring of hope, it was the winter of despair. , Mr. Chairman and members of the committee, we are face with no less of a task than creating a new middle class in our gre~t central cities. This is a task in the best American tradition and a tas~ worthy of our best efforts. But it is `also a t~sk which we can hope ~o accom- plish only by marshaling all the fotces and all the resour~es at our commandj and working together `as ne$r before. , The bill before you today will help the cities to plan, dev lop, and carry forward comprehensive progr4ms to develop our ph sical and human resources. It will enable us4-indeed require us-to `bring all our governmental sources to bear cit the solution of these roblems. It will enable selected cities to rebuild or restore entire slu or run- down neighborhoods. It will make it possible to improv and in- PAGENO="0201" DEMONSTRATION C~TIE AN URBAN DEVELOPMENT 787 crease the supply of lo~ and m er te cost housing in our cities. It will make it possible f~r tis *t O centrate our entjre educational, health, and social services tç ma a ew middle class of the poor and disadvantaged citizens l~vii~g in t e~ neighborhoods. It will enable us to attack the problen~s at th i s .rce-enabie us to build a solid fouiidation rather than a ~lit'teri b~i flimsy facade. In this connection, I might in e ~ late that it seems to me it is be- coming more and more 4he tech i ii of government to attack prob- lems at their source, rathe~r t1~an t e sy ~ ptoms. To illustrate, there is no~v p ~i i g a Demonstration Rivers Act which says you will never sOlve e ollution problem of a river or a body of water unless yoi~t attack i om the headwaters, clear down to the mouth of the river. It is n t en ugh to say that industry or that community must stop pol~uting t t r ver, or that lake-but you must begin from the very source, a~id c ii~ e anintensive program of anti- pollution enforcement to the ye outh of the river, and all the tributaries to that stream. Similarly, in the act *hicj~i so ht to cut down on juvenile delin- quency, passed bythis Congress i ~ or 1961, the same attitude was taken. Let's marshal tog~ther all t e orces-the city, the county, the public and private welfare forces d gencies, and in that way attack the problem at the very root, r~the t ~ the symptoms. The city of Cleveland, *ith re a ci o the demonstration cities bill, again, has already started the ma hine y in motion to mobilize all of the social agencies, governmetital its, and private groups necessary to implement this program Representatives ~ of the li~oard of e i~ ation, the county, the welfare federation, and the foundatior~s, a ci tl~ city of Cleveland, have begun discussing the mobilization of all o o r iforts. However, I do not believe that it should be selected for a dem- onstration project merely on a firs ~ o e, first-served basis. I would suggest that the Depart nt of Housing and Urban Devel- opment establish well-considered r te a based on the worth of the individual application and how ea~ p oject selected can, in fact, be used as a model for other cit~esto em~u at . One point in the bill provides ~o ~ e appointment of a Federal coordinator. We in Clevei~tnd hav~ e n fortunate in being the first city to have just such a coordinator a p inted by the Federal Govern- ment. While our coordiuat~r 1~as b~e o this job for but a short time, we have already felt the saliitory eff~ t~ f the position. Among other things he has been working 4losely ~i h ur local officials in coordmat- ing our efforts to promote job opp~ un ties for the underprivileged. Furthermore, with a eoordinator~ ~ ~ as I described, there can be greater flexibility and the a~roidanc~ f his i~'iterminable correspond- ence from the city of Cleveland to tI~e re ional oflice, to the head office in Washington, D.C., and on ~he ~pot ci~ions can be made. We note from a further review of h emonstration Cities Act that it proposes to set the Feder~l sJ~are a 8 percent of the local cost of all other Federal projects whic1~ rel t t this bill. Thus, unless ade- quate Federal funds are made a~iaila e f r these complementary pro- grams and unless they can be rëadil sc eduled to. coincide with the demonstration project, it will be wel ig~ impossible to carry out the project. ~ ~ ~ PAGENO="0202" I ~ 788 DEMONSTRATION CITIES AND TY~t13AN ~ DEVELOPMENT As an example, urban renewal prograr~is throughout the Natio i have already erea~ted a backlog of app1icati~ns in excess of $800 illion. Unless this longjam of pending urbar~ renewal projects is b1roken, demonstration programs involving urb~n renewal would be h~1d up for well cw~r a year while awaiting t~ie grant needed to start this program. 9i~herefore, unless time limit4ions on urban renewal ~apital grants auth~rized in the act of 1965 ar4 lifted, the torrent of ch~mand for demonsifration programs involvingjurban renewal will cr ate an even greater logjam of projects pending4 I would further suggest that where ~xisting Federal aid pr grams are not available, either for lack of funds or for any reason, t en the Demonstration Cities Act should provide the support neces ary to meet its contemplated objectives out *f its own funds, This would enable a community to plan a demonstration project with rea onable assurance that funds for the essential ~lernents of the plan w uld be a.vailabh~ wihen needed and, furthermo~e, that funds for other worth- while pr~cts in nondemonstration cities would' not be d~plet d. It b~corn~es very clear and very ob4ious that `the $2.3 billi n sug- gested by'the President will not meett~e total needs of the de onstra- tion cities program without exhausti4g funds available for xisting programs. The overall goals of a great society cannot be re ched if the price of success in one area is failure in others. It is also my opinion that the funds should be made avai able on contract authority upon passage of this law, thereby assur ng that funds will be available oVer the life~ of the program. All of you, Mr. Chairman and members of the co4nmittee, must know, as I know, that the v~st and necessary program frou are considering wi 1 not be an overnight project but one which w~il take years of careful cultiva- tion befor~ it bears fruit. Mr. Chairman, I sincer~1y hope th~tt this committee and he Con- gress will give this legislation your ~rnost careful considera ion and wholehearted support. Our cities ar~ very resilient creature . They will survive. That is not the question. The question is wh her this Nation cati afford to allow its cities-the nerve centers of our civiliza- tion-to survive merely a~ rundown pockets of poverty in th's land of plenty or whether we will combine o~tr efforts to recreate th m as the vibrant aind vital centers of our g~'eat ` society. The utm st effort will be r~quired-the cost' will be high. But, gentlemen, if e are to succeed ir~ creating a great society, we ~an do no less. Mr. Ch~airman, again, thanks for tl~is opportunity to share with you some of my views concerning the Den~onstrations Cities Act. Thank you. ` Mr. BARRETT. Thank you, Mayor Locher. Yours is a very fine statement. I am very much interested in your reference n page 4 to a Federal coordinator in Cleveland. I first want to ask you another qu~stion, and come back to this ques- tion, and~ give you a ehanc~ to look it ~ver. Mr. Mayor, your stathment on ~age 1 is calling attent on to the member~ that you are well aware of!the vast commitments e United States has undertaken to contain c4rmmunism and to main am peace in the wta'ld "to open the new frontier of outer space, to cre te a great society here at home." PAGENO="0203" DEMONSTRATI~N c~ITIE ` 4 ~ D URBAN ~ DEVELOPME~'1~ 789 ~ Then, you go on to te1~ th~t yo ~ ~ e with all these g~oals. You are pointing out here, . . ~ ayor, that if ~ we are to be strong from without, we must prim ~ Ty be strong from within, is that correct? Mr. LOCHER. That is a corre t hi erj~retation. As a matter of fact, the chairman has stated ~t n~ore ~ y indeed th~ 1 have, and I fully subscribe to that view. ~Foi~ unl e can do the things here at home that require doing-as Lstated 0 e~i ly, we a~e about ready to shoot a man to the moon, but w~ whi b s ~ ~ dine ankle cle~p in sewage while we are doing it. ~ We m~st tend ~, ` things at home as well as those in outer space and elsewhere. Mr. BARRETT. Thank iou. On page 4 of your sta~ement, ~ la lye to the coordinator in Cleve- land, would you explaii~ ai~d t e ~ mment further to the subeom- mittee on this basis. * Is he paid out f Federal funds as part of the antipoverty program ? Mr. L0c1IEE. No, Mr. ~hairma , C~ velaiid is unique in this regard, in that we are the . first i~rge cit tO ave put into operation the ar- rartgement which I aescri~e l~iere. t e~an from a dis~~ussion that was between Vice Pre~ident ~iui~nph e ~ d the publisher and editor of our morning newspaper, the Cle ai~ Plain Dealer~ They had had some discussions here in ~Washin ot~ about a means of coordinating all the `many efforts that a~e j~ixit o s oil partnership efforts between the Federal Government a~d 4he o ~ Cleveland. As a result of that, I mi~ht add e I~i ye had a representative here in Washington as well-Mr. `Ei~win S l~ rt, of my staff. But in order that, back home, there be so~e c r e~ tion between' the Federal pro- grams and the city of Cle~ela~id, i a suggested that what is known as the chairman, or, rath~, the F, e~ 1 executive, of the Federal Ex~ ecutive Association-that ~s ~n as o ~ ion that exists in all the large urban areas-the Federal bffi~ials 1~ ye an organizatiOn that they call the Federal Execütiv~ A~s~ciation nd the head of that group, who in Cleveland happens to be MF. John . ehman, regional director of `the U.S. Bureau of Labor Stat~sti~s, is ~e e ecutive of'that Federal Execu- tive Association. So it wa~ thoug t w~ e that there be a close rapport between `him and the Fed~ra1 offi i ls and the mayor of the city of Cleveland. That was set up on Janua~y *0 of is ear. We have had a number ~f i~'eeti s. At the moment, `as I pointed out I believe in my statement, ou ~i cipal concern `has to do with job training and job oppor1~unities. Ws is not an official who is hired with regard to the OEO o~' any' o ~i. r roject at all. it i's true that the relation~hip is ~ ux~ ary, but it'has produced great results. I envisage that th~ coordi to , who is `spoken of in the bill which you are hearing testft'ncthy a' o t ~ oday, and will for some time, I assum&-that likewiseenvisages oo dinator-not someone that is looking down at Cleveland, so to s ~ k~ but rather someone who will correlate all the efforts to make Oert i that we are all pulling together, a cooperative type of thing.' Mr. BARRETT. Thank you, Mi~."M y r~ " The Chair recognizes Mr. Widnal ~ ~ ` ` `` Mr. WIDNALL. Thankyou~ M~. `C ~ r an. PAGENO="0204" 790 DEMdNSTRATION CITIES AND U1~BAN. DEVELOPMENT Mayor Locher, in 1963, when ~you ap~ared before this oomn~ittee, you cited three projectS in the city and~the~i said, and I quote from your testimony : From 1953 to 1959, Cleveland has sufficiently stemmed the spread of f rthei~ blight by fiuan~iai assistance from the Federal Government under title I and rehabilitation programs, and by 1959 the hoi~sjng supply will increase to the point of maximum need ; that the city of Oleveland could turn its com~nunity attention to a central business district. Early in 1964, when I detailed in the qongressional Record th~ sorry story of the ~ East Woodland project, c1~anged from residentib~ corn- mercial rene~Wal, after elimirntting the bt~siness in one of the are~s, and encouraging the homeowners to put as ~nnch as $6,800 apiece ii~to re- habilitating their property, yourdirecto~ of urban renewal wrot~ Corn- missioner Slayton saying : ~ There is now an ever-increasing supply of housing available at almost any rental level. Now, you are in here plugging for a program that is basical y resi- dential renewal oriented. Quoting from the headlines of M~arcl42 and 3, 1966, Clevelanc~ Press, it reads : "Oircle, ilough Area Renew$i Failing" and "Our L~gging Slum Cleaifance." Would. you say thi4 might be the reason y~u need moreheip? I Mr. LOOHER. Mr. Chairman and mei~tb~rs of the committee, ~ don't believe that any older city in the Unit4d States has enough mc~derate- and low-income housing-particularly ~when I have tried to p~int out here that the people whom we thought of as the middle econon~io class are in ever-increasing numbers leaving the central city, and ~n their stead are corning in in-migrants and immigrants from all ~ver the country and all over the world, who rna4ke it necessary that we have this great incr~ase in coordination of educ4tional and welfare serv ces and all the other facilities. So that IL don'~ believe we are ever at t at very fortunate point where we have sufficie4 good housing of that n ture. ~ Now, as you related, when I testifi4l before this committee 2 years ago, in 1964, I pointed out that we w*re devoting a greater ttention to Erie View, or the downtown urban *enewal program. But at does not mean at all that we lost interest ~or sight of the other u ban re- newal areas. As a matter of fact, the area that we call Longwood is no fortu- nately over 90 percent occupied, and jit has a good working elation- ship, and the same is true at Gardeil Valley-that is in exc ss of 90 percent occupied. 4 So that we have not given all our ~tention to the downt vu. We try to ma~ke it a balanced program. . iAth'it seems to me th t that is what this bill calls for, a balanced so4t of thing, where you b gin with the schools themselves, and with H~dstart, indeed, and th n try to extirpate the evils that cause slum aiiid blight. And perhap through this demonstration we will be able to find the cure. I hop that we can. And I would hope that this committee would feel so. Mr. WIDNALL. Has the Federal Urban Renewal Admi istration ever, in the past 3 years, held up o*~ refused to recertify your city's workable program? Mr. LOCHER. Mr. Chairman-no, ~ don't believe it has. A a matter of fact, c~ur last one was just recerti about 3 weeks ago. PAGENO="0205" 791 DEMO~STRAPIO~ CITI ~ A D URBAN DEVELOPMENT Mr. WIDNALL. In the Enclid ~ e~ you have had rent strikes, failure to rehabilitate, and lack ~f ~° ~ ~ ore~ment. I put in the Congres- sional Record of April 2~, 1964 he statement of th~ Negro citizens of that area, asking for a steeaup i co e enforcement. I understand that things got so bad, you~ h~d to all in an outside consultant, ~ David Walker's firm, to revie* the pr j ~t last year. Can you tell this corn- mittee what the con~ult~nt's co ~ usi us were? Mr. LOOHER. Well, ~r. Char a and members of the committee, I don't think I can agree things ~ t t at bad. But I would say that we did feel that we should have a diti nal advice from a known expert, and a person whom weh~d ~ gre de 1 Qf regard for. Mr. BARRETT. Mr. M~yoi~, m y I just interpose this : If you would , be kind enough to insert it in. t e r ord, I think this would give us a better explanation, and jt n~ig~t be ~ ore expeditious in going forward with these meetings. ~ Mr. LOOHER. I would be happ o.~ Mr. WIDNALL. Would yot~ sup ~ y ~ for the record, then? Mr. LoonER. Yes-in other w d~, what were the conclusions of the Walker concern ; yes, I w~ll. I w 1 be happy to. (The information referred t ~ be found in the subcommittee files.) ~ Mr. WIDNALL. Has th~ city o le eland made any plans to us~ the new code enforcement appr*ch t~t med in the 1965 Housing Act, or the rehabilitation and lo~u~ gran r~ isions in the 1965 Housing Act? Mr. LOCHER. Mr. ~ Cha~rn~an, n~ glad you asked those questions, because we are in the p~oce~s n o oompiiing the voluminous data which is required in orde~ that w~ I ht qualify for additional inspec- tors. We are getting that toget~'i r, It will be filed with the appro- priate authorities next n~onth, 4. ru 15, as a matter of fact-that is our target date, and we 41o hope t at we will be able to acquire more funds for hiring more inspectoi~s.~ Now, with regard to th~lo~n ai~ ~ gr nt, I am very pleased to say that the city of Cleveland w~s the v~ y rst city in the entire Midwest region to secure a grant, ~TR~ tha1~ e ere among the first of the cities in the Midwest to receive ~he ioai~ nd r the 1965 act amendments. We are not resting on ot~r lai~ ls We have a team of men and women who are going hotise to h~ se~ hoping that we can interest the owners in the loan and g~rant fe~t i~e , and in that way arrest decay, rehabilitate, and do all t1~at we 4~ t salvage an area that is a very complex area, I might ad~E-but ~e ar doing the best we can. And we think those aids are very ~ffeç~tive~ Mr. WIDNALL. With regard to ~ e ladstone project, the Cleveland Press reports, "$4 million~me~ely o di place people." The newspaper described the area after ~ year `~tll rotting away, while the city attempts to determine its ~th4l us .` What are you going to do abon his project? Mr. LOCHI~R. Well, Mr. Chairma -- e have no doubt about its final use. It is to be industrial and co er ial. There has never been any question about that. An4 it is at t e cry terminus of our very large and very good, but not adequate, ra kly, food terminal, on Orange Avenue. PAGENO="0206" 792 DEMONSTRATION CITIES AND UI~3AN ~ DEVELOPMENT The program that we have for G1adst~ne-~--I might add ther is a grant demand for that area. We have a 12~acre requestfor a site b one of the large trucking cOncern~. ~ We air~ady have approved a arge poultry house~moving intothe area from 4nother oongested area f the city. And we exp~t that the N. & W. R4Iroad will very soon eQ e.to us as aresult of a study that was madefo~ them by the Ernst & rnst organization-that they will cometo us,~asking that they be all wed to expand, substantially, the present fr*it and vegetable mar et or terminal. I might add that there is a o'reat interest and great concern fo that area, and it will 1~e1p us bu~d up the j~ax duplicate of the ci y of Cleveland, which in turn will allow us t~ provide the facilities hich all cities neecj-rnore police and fire pro~tiôn, more health an wel- fare progran~s, more of all-more stree4s, more sewers-more f all the things that a city needs. So we ha~ great hopes for the lad- stone project~ And I might add that it was not begi4n as a project until ap roxi- mately 3 or 4 years ago, and it is difficult to relocate people. I hink we all know that. That is why I like this bill. Mr. WIDNALL. What is the reference tO 12 years as a period? J\{r. LooHi~n. It was declared such a program 12 years ago, b t we i~ever applied for the Federal funding ~f it or recognition of i as a Federal program until indeed after I bec~me mayor, which is les than 4 years ago. ~ But for alOng period of tim~, we had itfin mind as a likely spot or an area, for an urban renewal program. ~ .~ . Mr. Win~&u~. This, again, is a proj~ct like Erie View, w ich is essentially c~mmerciaI renewal rather ithan human renewal. And haven't you beenhaving a failure of you~r human renewal proje ts out in Cleveland? Have you anything succ~ful you can report? Mr. LOOHER. Yes, Mr. Chairman. I l~elieve that Longwood hich, as I pointed~out, is over 90 percent occupied, perhaps even a h ndred percent now, for all I know. The area hf Garden Valley is an excel- lent example of good, human renewal. J?ór instance, we delaye there for a time. But then it daw~ied on us tljat unless we made that total community, fit would not be self ~ufficie~it and valuable in hu an re- newal. As ~ result, we1uilt ~, swimming p~dl there, and a playg ound, and a new school, and we planted trees. We are now embarking on a playfield~ which will substantiali corn- plete that area. We, indeed, even incj~ided a mass transit ri ht of way-we have a rapid transit system in Cleveland, incidentally, which will now extend from the airport cleat on into East Clevela d, and then it branches off to the Southeast a~lso. And this would a low it to go even further in a southerly directh4i. So in that one program, I think we il~ustrate the bill we are alking about here. Here is mass transit in Gt~rden Vall4y, new housing, a new school, a swimmii~g pool; a playfield, the Garde~i Valley Neighborhood enter. Now, if we could do that on a conceijed basis in University uclid, which you alluded to, in some of the other areas, we would be ernon- strating exactly what this bill seeks to do-provide ample funds I PAGENO="0207" DEMONSTRATIO~T ~ITIE~ D URBAN DEVELOPMENT 793 everywhere to reiocate~ not h~r ~ 0 problem of Gladstone, which, admittedly, is a prob1e4of~re1o~ jc~ . ` ~ ~ Now, I cannot agree ~vit~ M~ ~ lfl n~U, with all due respect to him, that E~'ie View was m~ ~ hux~ i~ enewal achievemei~, and I will tell you why. * ~ East Ninth Street, from subs ax~ ially the Cathedral south to the lake, on both sides of E4~st ~N1nt ~ St eet was az~ area that I know well. As a young~ lawyer 1 wbuld wal f om my office down and cover the docket. at both munieip~i court d ommon pleas court. It required that I walk down Ninth $tr~et. ~ . ~ East Ninth Stre~et, l4di~s a d g ntlemen of this committee, you won't believe what it ~as. It ~ s ade up c4~ saloons, wino stores, secondhand stores, the ~yp~y f i~ u~j teller places, secondhand stores of all kinds and descriptions, a o e of the worst and most tawdry areas you can imagine. ~ Let me tell you what is there n ~ There is this lovely pl~za in f i~ of a 42-story office building that is already 90 percent re~ited. ti * e were arguing about it when I was here 2 years ago. It js airead é ted. Mr. WIDNALL. How m~ich mo ~ at - and low~income housing do you have in Erie View ? Mr. LOCHER. Erie Vi~w is d n~ wn Cleveland, Mr. Chairman, never designed for modex~ate~ or 1 ~ come housing. The land would not; support it. Nobody with a bi siness acumen would suggest it. We do, however, hav~ down o ~ apartments going up in Erie View right at this mome~t, and t e oundations are now bein~ built, and it is already rented. And h t s at,. 12th and, Chester. That is Erie View. I am proud ~ of it. h s dc~ne hun$n renewal. Mr. WIDNALL. Mr. Ch~irman, I a sure I. ha~re gone overtime. I would like to have a cha~e to q ie t~ n the witness further. Mr. BARRETT. Mrs. Sul~ivan ~ , Mrs. SULLIVAN. Thank you, M . ~ irman. I want to apologize to ~he may f r not being here when he began to testify. I had to go t~ ai~oth ~ co mittee to testify on one of my own bills, on tire safety, *hi~h I ~ hi , is rather important right now. I have read part of the stateme~ ~ you were being questioned, Mr. Mayor. I think you hate brou~ t ut some excellent examples of things that need to be don4, arid bi~o g t out excellent points regarding the prcgrams contained i~ this 1~il . t is a bill that I think is far- sighted. Unless we do so~nethin~ o ç ordinate all of these plans for rebuilding the city and 1~ettering~ he conditions of its people in th~ . entire urban area, we are going t~ e ~ trouble. I appreciate what you ~iave to~d us ~ Thank you. Mr. LOCIIER. Thank you, M~rs. Sülliv n. . Mr. BARRET~r. Mr. Mayor, befçr e call on the next committee member, I note that you l~av~ soi~ a~ ociates with you. Would you want to bring them up to~ th~ taMe ~ M~. L0CHER. Yes. I w4~u14 lik~ r Friedman-Mr. James Fried- man-acting director of ~irb~n r~ e al, on my left. And we also have the chap whom .1. re~ferred O iti my opening remarks as being the liaison between the city of 1 ye and and the Federal Goverm- ment bureaus and departn~en1~s, a d hi name is Mr. Irwin Silbert. PAGENO="0208" 794 DEMON~SThATION CITIES AND U+AN DEVELOPMENT Mr. BARRE*. Anyone else you desire to bring up ~ Mr. LOCHER. Mr. John Gunther is here~ who I am sure you kn w. Mr. BARRETT. John is sort of acting as a backstop. We do want you to feel at home. You ~an bring your associat s up here. Mr.Fino? I Mr. FIN0. ~Er. Mayor, I am sorry I w~s late coming in and idn't have the opp~rtunity to listen to your sta*ment. However, I wil read it more thorQtighly when I get back to t~e office. I was busy o the Veterans' Affairs Committee. But I ju~t happened to glance at it. On page 4 yo~u say at one point the bill provides for the appoin ment of a Federal coordinator. We in Cleveland have been fortunate in being one of the first cities to ave a coordinator appointed by the Federal Government. He is now a Federal coordinator for wh~tt? Mr. LOCHER. Mr. Chairman, he is, as 1~ pointed out, the coord'nator for all the Federal programs in the city ~f Cleveland, and those f the city of Cievdland that have a reIationsI~ip to Washington. A d his name is Johá W. Lehman. He happen~. to be the regional di ector of the U.S. Department of Labor. He li~ewise is the president r the executive offi~er of what is called the Fedteral Executive Associaf on. I am told that in all the large areas ~or large cities, they h ye an association of Federal officials which they call the Federal Exe utive Association, and he is the executive, and he has been designate to be the coordinator or correlator of all the Federal activities in the ity of Cleveland. We foundlit to ~e of gr~at use. And4i merely threw that i to my speech to ii4icate that we are not fearf~il ~ of any commissar, o czar, or anyone e1~e-that we can work and in*st work in a coordinate kind of way in oMér that these many and ~aried Federal progra s, and municipal Ones, achieve the results thej~ are intended for. The setup that we have is not one pre~cribed by law, but rat er one worked out voluntarily between the Office of the Vice Preside t here in Washington, D.C., and the mayor of the city of Cleveland~ We think it holds great promise. We are already work~ng on several programs that are important on~s. And it saves endless~dupli- cation of eñ~ort and work by having su~h a coordinator. Mr. Fr~O. Well, Mr. Mayor, it has be+n proposed by several c~f your colleagues that the Federal coordinato~proposed to oversee t~ie city demonstrati~n program in the varioustcities where a prograri~i is es- tablished-that these coordinators be n*minated by the city, ax~d that the Secretary of HTJD have the right ito pick the nominee fro~i that list. Now, do you favor such a proposal, or such a change in ti e law? Mr. L0CHER. Mr. Chairman-Mr. Fino, I don't believe I do I am a great one to believe that the authority, who has the responsibi ity for implementi~ig a program should not ~ ~e circumscribed or s ackled. And I beli~ve that by submitting a lis1~ of names to anyone, t at that would reafl~ be a mistake. I believe~that the Secretary of HTJIf~ should have the righ to ap- point whothever he thinks. But I am pure that there would b a cer- tain amount of discussion, certaimly, ~about someone who w uld be agreeable to the problems of a large city~ PAGENO="0209" DEMONSTRAT~tON CITIES 4 I don't believe I would fa~or s' e tion in the substantive 1~w of ou Mr. FIN0. Well, obvioi~sly~ fro i it seems that we don't ne~d l4gisl t Mr. LOCHER. Well, as t pöintec~ voluntary basis. It would seem t a and we do bring about a ~nobiliz~ t it would follow there sh~uJd be ~ duty of coordinating all ~f t~iem. prodigious-he is the man ~ñ Qleve: to do this work in additio~n tç tb has as regional director,b~au~e we ~ tion of many, many Fede~al pro ~ Act. I think you would still ne I was trying to illustrate how ~ think it is workino' well not. Mr. FIN0. Well, some f~ar has 1~ Federal coordinators will' ask cit aod~s, change zoning laws, and eve~i reorganize ~ themselves, foi~ more ~: ideas. Are you willing to ~o a,lon tor under this program, who came h your zoning laws, your lbi~ilding city administration to fit in~o otir pi~ Mr. LOCHEE. If such a cocrdi4~ I would insist that th8 Pr~sid~nt ~f and there would ~e a uew~ co9rdii~.a still if we an individua~ of that t: No, I would not want such a pers I would trust that I or ai~y other n and enough gumption to s~e that ~ did, we would get after him~ Mr. FIN0. Well, if you k~ok at th that power, because the Secret~try f perform such functions as ~he Sec e scribe with respect to help~ng achi i what the maximum-"éffe~tiv~ co t~ programs"-and so on. Now, that is on page 8 c~f the b 11 albiout that lang~age ? Mr. LodEn. Would you tell me ~ Page 8, did you say? Mr. FINO. Page 8, line 19, "Office ~ Going down to line 24. "The Director shall perfo~m ~nch f Mr. LOCHER. "As the Sebretary ~ with respect to helping achieve th undertaken." Yes, I find no quarrel with that L form the maximum coordination. Mr. FINO. Well, Mr. Ma~or, if I don't think there is muc1~ you ca telling you how to run the ci1~y. 60-878-6&-pt. 2----14 URBAN DEVELOPMENT 795 g out that sort of a determina- ntry, which this bill really is. at you are doing in Cleveland, for coordinators. ~, Mr. Chairman, that is on a e law-if this bill becomes law, of all the efforts, then I think one who is charged with the d Mr. Lehman, in a task that -may not have the background y other duties that he already ow talking about an ameliora- in this Demonstration Cities ~ coordinator spoken of here. çht conceivably work, and we expressed that these so-called ernments to change building rnnd that city administrations nE operation along their own that, with a ~`ederal coordina- 1 said-we will have to change , we will have `to revise your m. were to suggest that to me, United States know about it, I certainly ~ would not hold *n Cleveland. r would have enough influence n't get such a person. If we the coordinator seems to have -it says : "The Director shall shall from time to time pre- lB maximum"-he determines )tiOtl of Federal grant-in-aid .R. 12341. Are you satisfie(l me or where it is? deral Coordinator." ne ions"-~and so forth. all from tithe to time prescribe na imum effective coordination gi~t ge. That is his duty, to per- ha is my understanding of it. is the Federal man on the job, do about it, once he is in there lii Ca' w~ on Oi~ on ncJ `a t~. go cle it~ ai~i d~ or th lot `pE~ d~ bh ar Bt in h F `6 PAGENO="0210" D~MON~TRATION ~ CITIES ANtI ~JRBAN 1~VELOPMENT Mr. Loci~ER. Well, I don't read it i~h$ way. ~ ~ ~ I read it as a coo ing.effort ra~tIier than one of dictating to~thei~iayor. Mr. BARI~rr. Mr. Moorh~ad ~ ~ Mr. MOORHEAD. Thank you, Mr. Cha~ikthan. * . ~ Mr. Mayor, based on your experience ~of having a coordinator I be correct in assuming that you wou1~ recommend to this coi that we make provision for coordinai4or~ in all metropolitar and not rne~e1y in those areas which have been selected for den tion proj.ec1~s ? I Mr. Loorbar. Mr. Chairiman-I would suggest that in those not have a~ demonstration project, tha~t there be a setup suci have in O1èveiai~d, which i~ on ~ voh~ntary basis. I do recc that. Mr. MOOrtHEAD. But not an officer prdvi'ded `by law, and given powers~ Mr. LOCHER. That is correct-not on that basis. . Mr. MOORHEAD. Ill the demonstration city work, do you beli~ a coordinator named by the Secretary, of Housing and Urban opment will have sufficient power to~ bring other departme: agencies `in line, such as the Departm~nt of Labor, HEW, 0 am concarr~ed that maybe lie wofl't h4re enough power to enf ordinationJ Do you thmk he will? j Mr. Lóc~n~R. Mr. chairman, I thi~k he will. And I kno other way of accomplishing it, except i4 this direction. Mr. MOORHEAD. Mr. Mayor, your te~timony, this very excel tirnony, was limited to the DemonstratIon Cities Act. Have y any consideration to the bill, H.R. 12946, to provide incentives metropolitan development, which bill also includes the provi new towns ~ Mr. LOC~IER. No, I have not, Mr. ~4oorhead. I would hopt some later time when we have had ~ir opportunity to exar other two ~bills on your agenda, that ~*e would have an opp to testify i~en. But I hav~ not had a4 opportunity to read an those othei~ two. Mr. MOO~HEAD. I have `no further qu~stions. Mr. BAm~TT. Mrs. Dwyer ! Mrs. DWYER. Thank you, Mr. Chairman. Mr. Mayor, do you know of any reaAon why cities with le~ already on the books today cannot do the comprehensive deve planning which is called for in the I*monstration Cities Ac For example, using the device of tl~e workable program, w prerequisite for Federal participatic4 and urban renewal, ~ the present program add in the way of~lanning ~ Mr. LodHER. Mr. Chairman, Mrs. 1j~wyer, unless a city is a nity renewal city at this time, it will n~t have sufficient funds, to do the planning that is required thi~ough its own city plann mission. I wish we hadthose funds, but we don't. Whereas, a program such as this, which is extremely compr and which really begins, as I pointed out, from the time the y goes to school, or even before-to at4tack all the evils wouh much more in depth planning than we~ can afford in our munic Mrs. Dwn~E. Are you using th Headstart program Cleveland? I 796 ~dinat- would amittee areas, onstra- that do i as we mmen'd certain ye that Devel- its and ~0? I rce co- v of no tent tes- ~u given to plan Blon for that at iine the )rtunity d digest ~islation [opment iich is a rhat will commu- ~s a rule, tng corn- ~hensive, oungster require ipalities. now in PAGENO="0211" DEMONSTRATION CITIES A~L Mr. LOCHER. Yes, ma'a~n. We u it again this year. We ju~t a~pro Mrs. DWYJDR. Mr. May~r, sp~e ~ need iii Federal funds to $rr~ out ~ Mr. LOCHER. Mr. Chairp'iax~, M s and I frankly cai~not give~you ev would have to ascertain wI~at ~he a not gotten that far. We did, at ou ings of the representatives I descr ~ i)FiVate agencies, and so ~ f~rtI~, be should be for the determin~tiOn 0: haps that the same cri~eri* with ii used with the Commu~iity Action f delinquency program. Thit ~e ha~ criteria for making the ini~ia1 det and determine the size of the are would be hesitant to name a flg4ire. But, as I stated, it does ~eei~u cli cities, that $2.3 billion is no~ lil~ely But I cannot,- ~ Mrs. DWYEE. Howmuch would] ing to find out. If there ~re 70 c much it is going to cost, h~w ~an termine that $2.3 billion i~ going . think it is adequate J~or `TO cities . Mr. L0OHER. No. , And ~ e?xten you would ~et a better noti~n ~f w lion which is provided for~pli~nni take some form or s~ape-~hei~ I t gress, would have a better nbti~n of But I frankly, being una*ar~ of in 60 or 70 cities, not knowing evei that Cleveland will be one o~f tl~ cit has been established for picl~ihg one It seems difficult for me to sa~ wh~ land. I frankly can only i~'iake a so rough that I don't think i1~ would Mrs. DWYER. Can you make just a Mr. LOCHER. Let me say ~ M in the city of Detroit, for instance, $21/2 billion, if I am not mi~taJ~en- We are approximately, or a~ little o think I would not be too fai~ wi~ong neighborhood of perhaps a billion ultimately decided the area ~ould be But, again, we are just pic1~in~ son I think we must wait until th~ pla we contemplate, before we k~io* wh~ this purpose. Mrs. DWYER. It would seem, 1~rom $2.3 billion is not going to be enough. Mr. LOCHER. I would conc~ir i~ th~ Mrs. DWYER. Thank you v~ry muc D TJRBAN DEVELOPMENT 797 it last year~ and we are using ~ last Fi~iday. y, how much does your city cionstration city program? wyer, :1: have thought of that, uess at this time, because you ould be, and we certainly have rneeling and subsequent meet- ~f the school boad, public and . talk about what the criteria an area, and we thought per- change should prevail as was uth program, the anti juvenile even agreed, frankly, on the atiori, let alone going further how much it would cost. I ii weare to have 60 or 70 such ~be ~noügh. ~s t~i a 9 ~;i~ c lea ~h e t it e y ~ of r u~ ii-. ~t ~ :~: rø ~ ~ ii d ~1i ~ e I~ .] iI~ t th ugh? That is what I am try- which cannot determine how the Federal' ~ Government de~ adequnte ? No one seems to ough 1971, so that I believe adequate between the 12. mil- hen that planning begins to everyone, including the Con- an adequate fi?ure would be. eas that are being considered t they will be-I don't know Who knows, until the criteria ould cost in the city of Cleve- Sough guess, and it would be any hel h guess ~irman. It was thought that it would run something like a that testimony somewhere. df the size of Detroit. So I rere to say it would be in the rs, depending on what it is 0 forth. goutofahat. is done, until we know what Congress should allocate for E;~ e t stimony in this hearing, that t,~e. ~, ~ . Mayor. e~1 ii~ 1 .5 Lt e~ es .]~ ~ PAGENO="0212" 798 DEMONSTRATION CITIES AND VRBAN DEVELOPMENT Mr.BAiuErr. Mr. Reuss ~ Mr. REUSS. Thank you, Mr. Chairma~i. Mr. Mayor, I was int~re~tcd in the vfarious coordination an liaison devices yOi~ set up-namely, your vo1~intary Federal coordi ator in Cleveland, and the presence of Mr. Sijbert here as the reside t agent for the city of Cleveland. How long ks Mr. Silbert been con~iucting his duties ? ~ ~ Mr. LocEEn. Mr. Chairman, Mr. Silbert began his work ju~t at the beginning of this year, since January 2 or 3. Mr. REVSS. In order that I may understand how things work, let me invent a problem which hopefully~ you don't have. Let's suppose you are planning a public housing project in Cleveland, nd let's suppose th~ thing is stuck. Your arel4tect'splans, let us sup ose, are more expefisive than the public housing administration see s to be allowing. ~ So there is a problem. How do ~rou handle that as of today~ Do you go to your v luntary coordinator in Cleveland, the man frdni I3LS, and say "Go t bat for us." Or do you go to Mr. Silbert, oi~ your Congressman, or how do you work on this ~ Mr. LOCHER. Well, it happens that the illustration you use is such that it comes within what ~we call the Cleveland Metropolitan ousing Authority-it is a separate authority ~that Mr. Bohn heads u , that I think you know. ~ But if we had a problem that invoWed one of the bureaus i Wash- ington, th~ director.. of our own dej~artment would first, o course, attempt tO-the urban renewal direet~r, if it were an urban renewal problem-would attempt to resolve it.i . If he could not, of course we woui4t look to our Congress en, and they have represented us ably. But if it required more attention than that, then Mr. Silbert, who spends approximately half his time in Washington and h~lf back home, would go to the bureau or department here in Washington, clis- cuss it with them, and see if he could n4t pry it loose. Just yesterday, for instance, to iilu~trate what-my answe to your question-~Mr. Silbert went to the l~~conomic Development Admin- istration, be presented on~ new progijam fOr us. He also as ed them why is it two others hate not bee4 approved-what mu t we do further ? And we found that very ~ielpful. It saves so m ich time and effort. And that is how it works. Mr. ItETJSS. Let's just take those t~o cases. And I don't mean to pry into any internal bureau handling of affairs. How do you work that out with your Congressman ? s this a problem that the Congressman had ttied and given up on ? At what point does Mr. Silbert go into action?; Mr. LO~HER. Well, may I say that l~efore it is likely to be a nounced, it will probably bE~ anniunced .thro~igh the Congressman. That is one of th~ procedures, which I think i$ a wise one. But m~y I say that Mr. Silbert is ~n touch constantly wit the four area Congressmen, and he gets their~ advice and aid-as he ~s in con- tact with Senators Lausche and Young. So that-a Congressman frequently cannot keep tracks of ~he many, many affairs that we, have, the many interchanges of corres~pondence PAGENO="0213" DEMONSTRATION CITIES and so forth. But when ~t gets d push, the Congressman i~ aJwa~ s most effective way of get~in~ it ~ ë Mr. REUSS. We have I~ad som recent weeks about a Swe~ish fu c Would you say Mr. Si1b~rt'~ fun~ a general handyman for Clevel describe his function ? ~ ~ Mr. LOCTIER. Yes. I ~ou1d sa representing the city of ~1e~e1an very nature of things, does re~rese For instance, we had a shoema e street from an urban renewal are just now breaking ground, so tha t north of him. To the so4th of hii of him there is a freeway.~ ]~o ti e or machinery yard of som4 kind. ~ ETc is now without any business. The question is, co~iJd ~+e affor .i~ with funds that have to 4~Eo with t it just one of those toughicases ti a ti any relief for? But there, Mr. Silbert, in mak ments here in Washingto~i, i~ in as they have in Sweden. But there is tal1~ of th~t i~i Cl ~ protect the people ~ from t~heir o~ 1~ there, when they have complaints ~ We do have a public ~efet~der~ i trouble with the law and have no 41 is financed partially by the court others. It seems to be a trend ~n ~hat 4 person who needs assistance ai~id ca4 I think the OEO is doing t~rnt i4 add, with our community fa~iliti~ for the first time know where to g before quite how to reach o~it for it Mr. Rimss. Thank you. Mr. BARRETT. Thank yo~i, 1\~[r. R~ Mr. Mayor, some of the m~mbe more questions. We will recognize Mr. F~no. Mr. FIN0. Mr. Mayor~ ho~ do s populationwise? Mr. LOCHER. Mr. Chai~m~n-~-- ~ u which was May of last year', was 8 Detroit, I believe, is 1.6 n~illion, 1 Mr. FIN0. The mayor ~f ]~etr ~ billion to make any dent ~u this ~ r how much you would need ~or the c URBAN I~EVELOPMENT 799 0 where W~ really. need an extra isted, and that generally is a ed, as ~ you ean well surmise. imony before the Congr~ss in .ary knowil as the ombudsman. down here is in the. nature of interest here ? I-Tow do you ss. w . Chairman, in addition to his lf, that he occasionally, in the .ividuals. Cleveland who was across the re a new community college is olks have been relocated to the built a freeway. To the west t of him are som~-a junkyard iat his customers have left him. some relief by buying him out uterstate freeway system, or is ~ law ju~ doesn't seem to have Lquiry of the different depart- ature of an ombudsman, such Ld, of having such a person to y hall, or to ~ get results down oblems of that kind. leveland for those who are in of hiring a lawyer. ~ And that partially by foundations and tioti, I might add, to help the 3e~m to find it. e of the poverty areas, I might ieighborhood centers. People et help, when they never knew uld like to ask you one or two eveland compare with Detroit opulation at the last ~, approximately. m not certain. id he would need about $2½ rn. So I was just wondering Cleveland. census, I fl 41 ;~ iW~r M ii~ ot U I ci Lp an re ~ot o]~ Dr 0 Cl ~,oc I gr 0 PAGENO="0214" 800 DthONSTRAT1~ON CIPIi~ AND ~ TYflBAN D1~WELOPMENT Mr. LOCnER. Mr. Chairman-I said kpproximateiy a billion dollars. Cleveland hothriously' has been ~ a very~frugai and prudent cit ~, and I thought I would take les~ thanhaif, just to be on the conservat ye side. But as I stated, I think any guess of mine would not even be e lucated at this point, because of not knowing what area we would select. Mr. FINó. Do you think that the city demonstration prograi should be confinedto major cities of the Unit,e4 States? Mr. LOC~iI~R. No ; I do not. I thinkjif it is to be a demonstr ~tion, it should be a~demonstrafion in all the cat4gories. Mr. Fi~. Large, medium, and smal' cities? Mr. LOCEER. Yes. * Mr. FINb. Do you think there should be geographical limi ations? Mr. LOOHER. I think when it spea~ks of massive-I assu ie they mean a relatively large area. But I doubt that you would ver in- dude the entire geographical area of a city. It would jus be too costly, and it would not be necessary in many areas of cities. believe there should be some guidelines. Mr. FINQ. Do you think there shoul~ be a limitation on the amount that could be given to any ofle city ? Mr. LOCIJER. Mr. Chairman-no ; I don't. I believe it is x ore im- portant th~kt we have a quality demon tration than to spread t out so thin that perhaps it ~ would not ~ work anywhere and be of n ~ value. I would not favor a limitation. ~ Mr. FINO. Now, in addition to the ~ear expressed earlier a out the Federal coordinator, there is always a fear that this progr rn will divide the country into new Federal co~nmunity development ~ istricts, a new political unit, which would look to the Federal Gov rnment rather than the State government fo~ guidance and directi n ; that this program will be the first step in 4 master plan to bring ~ omplete economic arid social integraUon to rural areas. Would ~ou care to cornn~nt on that~f~ar that has been expr ssed? Mr. LOOfiI~R. Mr. Chairman-if thei~ is basi.s for a fear of t] at kind, it is because the State governments thave abdicated their ( uties in almost every instance. And I speaW now of someone who was for many years secretary to the Governdr of Ohio, and I have a great regard and affection for the State government, But over th~ years I have observed that the State is ready, able, and willing to rec ive that torrent of sales taxes from Cuyahoga County, in the city of Cl veland, but extremely reluctant to aid or assis , with the result that a vacuum has been created. And ri~v the Fed ral Government finds t neces- sary in Cl~ve1and, as in most of the la ge cities, to fill that va uum by supplying revenues and advice and uidance and program . And, therefore, kny fear is not so much th ~ t, the Federal coordin~ tor will overreach himself-because we have v~ays of combating some ~ne who overreaches-I think we do. But firat of all it is a regret hat the State has so abysmally failed the cities, and that we must b k to the Federal Government, because we have no choice. If we were to get-for instance, to illustrate, in the city o ~ Cleve- land-the sales tax-let me start from the beginning. The local government fund is mad up of two sources. i pproxi- mately ha1~f comes from the sales tax, that goes into Columbi. s, Ohio. The other half comes from a tax on ank deposits, savings nd loan deposits. PAGENO="0215" DEMONSTRATION CITIES A. The portion that come~ from ~ deposits has steadily incr~as~d. , though the ~a1es tax has ivirtuail has remained constant in t~ie last 8 ç We have no choice. VV~e wish the job ourselves, so that~ we wo your time and doing all tl~ese thi ~ Mr. BARRETT. Would you ji~st y ~ Haven't we had these f~ars sine when the people are not ~ able to c incumbent upon thegover~ment t This is what y~u are dc~ing. T~i they are coming to theFed~ral Go e Mr. FINO. Well, Mr. M~yot'-i t in its wisdom that $2.3 billiçn is program, and that it would be II c program, to have about $30 bi ~ program? Mr. LOCHER. Mr. Chah~man-i that is the amount-and ~ a~n s were premised on very gdod crite i providing your conclusioi~s were, I certainly would. If it Were, in ~i sure you would riot do an~way, t ~: Mr. FIN0. Well, ordina~ily in 0: you too much. But in- v~ew of t that this Government shoi~Id und ~ Mr. LOOJIER. Mr. Chaii~ma~-I ~ that enter into the Federa]~ budget close to the Federal Goveri~ment. :t am the first to admit th~t I don t But I would hope that *e can d you don't only contain co~rn~unis provide opportunities here at ho e. stration Cities Act would ~ro~ide ~] it possible for us to give a ray o have none. So it takes a very delicate baJanc i~ with whatever this commi1~tee coul sary, taking into consider~4ioi~ all ~ Mr. BARRETT. Would yoti yieldj~ Mr. FINO. Would you s~ifl ~e f4~ tailed an increase in incon~e taxes ~i The administration is a~re~dy ~ increase. Mr. LOCTIER. I think I s~o~ld s* eral fiscal matters I don't feel at al additional revenues ~t, the local le I don't think I need to tell ~ou that ~] Federal Government, the Stat~ th municipalities are the bot~on~ on expert there. That is whLy `~e f Government. cD URBAN DEVELOPMENT 801 :i1~ depbsists and savings and loan :[~ j?ortion from the sales tax, even clo~tbled in the last 12 to 15~years, ~ 1Q years. ~ 1u~d the funds in Cleveland to do . j~)t b~ worrying you and taking But we don't have them. ) me at this point? S ? Wasn't it Lincoln who said omething for themselves, it is ~e to the aid of the people? ties are not able to do this, aDd ient for aid'. subcommittee should determine cifficient to undertake this vast ry to-~-in order to initiate this would you still be for this .8 ci ~th t ~ss~ .r deliberations concluded that )u would not make it unless it then I would go along with it, `y judgment, reasonable ones- ~d just arbitrarily, which I am would have my reservations. Ll times I would not argue with ietnam situation, do you think this vast expenditure? iot co~nizant of all the things relationship has not been that w. 1-I)ecause, as was pointed out, erseas, but you must somehow Lnd it. seems to me this Demon- rtunities here, and would make )e to many who now feel they But I am sure I would go along ~onably explain as being neces- ommitments, r cue point'? ~ program, Mr. Mayor, if it en- e people of the United, States? Lg about a possible income tax the outset, with regard to Fed- lifieci. I do know that we need I am positive of that-~because evenues are skimmed off by the 401 board and the county. The )tem pole. I can speak as an itly must look to the Federal `V :al~ )Ot o~ ~Ipc ho~ g~ re~ i~ ( t U: ki~ at 1th~ ie ~ ch e t PAGENO="0216" 802 DEMONSTRATION CITIES AND URBAN DEVELOPMENT I don't 1i1~e it. B~t I don't know whe4e else to look. Mr. BAR1~ETr. Mr. Wicinall? j. . Mr. WTtnF.TALL. Mayor Loáher, since *rban renewal started i Cleve- land, how much has actually been spent on the projeots thus f r? Mr. LOOHER. I think I will be requiifcd to put that in the re ord. I do know in Erie View, for instan~e, we have expended s me $18 million, just as an example. But I never have added them u . But I will supply that for the record i~t our earliost opportunity. ( The information referred to may J~e found in the subco mittee files.) Mr. WIDNALL. Do you have any figu4~es dividing uj~ the amo nt that is going ~into commercial renewal as against residential renew 1? Mr. LOOJ~ER. No ; I was hoping Mr. ~`riedman might know, ut I do not have thøse figures with me. But I ~fil1 supply them. Mr. WIDNALL. I would like to have fthose submitted for the record. And I woi~ld like to make this commeint. In an article in th Cleve- land Press it said: After 12 years and $57 million, 4,200 dwellings have been demolished, and only 1,912 built. . According to the 1960 census figures, there were 36,~9~ dete iorating and 7,728 dilapidated dwellings existing in Oleveland. The Urban Ren wal Ad- ministration reported that during fiscal 19()4~ and 1965 not one new dwe ling unit was built umler urban renewal in Oleveland. Is that c~rrect? I Mr. LoO*ER. I think-Mr. Chairma~i, that is probably corr et. We have done dome rehabilitation, but notI~ing new during that particular period. Mr. WIDNALL. The Urban Renewal Administration also re orts of four projects approved since 1960, 49 percent of themoney is or com- mercial renewal, and the residential involves high-income unit in the Erie View project. Is that correct ~? Mr. LOCHER. That is correct. We ~re now doing some re ~ abilita- tion. For ~ instance, 14th Street apaiftment sticks out in m mind. But of r~ew constrth~tion,that has I$n one of the difficult reas to entice or ilitbrest private capital in. 4nd we have not been su cessful. We thinik we are almost on the brin~ now of some 221 (d) ( ) hous- ing, in addition, of course, to the publ~c housing which goes n. Mr. BARRETT. At this point, those figures requested will be si~ mitted into the record. ( The information referred to may be found in the subco~nmittee files.) , Mr. WIDNALL. When you testified' ir~ 1q63, you said that the ~t. Vm- cents proje~ct was a successful residenti~al project. The same earings, however, contain a rcport from Oomm~issioner Slayton saying the city contempla1~ed changing the use to that ~f acommunity college. What has happened to that project? Mr. Locrnoi. Mr. Chairman-a numjber of things have gone n there. A home or a property that is developed in connection with ~uvenile court is now going up. We are about to see groundbreaking 1~or some apartments for the elderly, which is being sponsored by tl~e labor groups in Cleveland, and I understand they are about ready to begin. PAGENO="0217" DEMONSTRATTO~ CITIES NJ URBAN DEVELOPMENT 803 A new medical c~nthr h~th gone i project has built a fine i~w win The I3oy Scouts of AMerica have been two big parking lotr Mr. WIDNALL. But, Mayor, h into that St. Vinc~ñt,s proj~ct~ Mr. LOCHER. Only the ones th elderly which is just no~v 1~egi: Mr. WIDNALL. How n~any un Mr. LOCHER. I think b~tween it will be a large buildi~ig. Mr. WIDNALL. What ~s the project? Mr. LOCHER. I eannot~ te1~ yO Mr. WIDNALL. Can yo~i subrn:~ Mr. LOCHER. Yes. ~ (The information r~fe~'ed to files.) Mr. WIDNALL. In the ~a~t W suits have been filed aga~nsi~ the your city-Leo Jackson, ~vho see: well, suggested turning i~ back Now, before I see any iboney ~ tion cities program, I wcnild like the idea of residential r~e*a1 Mr. LOCIJER. I am sori~ I did asked be, but I forgot abØut it. the progress there. It is ~efbre for several months r~ow *e woul as yet. But Leo Jackson, chair~nati of a very fine person, a very co~iceri he would like to se~ East Woodl I would too, if I could, a~s nu~yo: developing that area for ~oi~sing asking council to change i~nd then to change it back to housir(g. I would be for that in a ~econd, ing the housing. Mr. WIDNALL. The thing t~iat this committee, and I am s~fl~e ev the same feeling, is that ~re c~ugh has happened in some of the~e ci accomplished through the use of direction taken in the past has ace for and the goals that we e~peet. Now, I know in many, many ci ises, there have been scores of disi not been able to get back in 1~usiu tinuing slum problems. T~iey are 1949 when we started mit i~i ui~ban We have got irate city counc~ilme for a halt to the whole program, la im ay w~ ~harity Hospital, which is in the d a very modern one. a lo~ly building there. There t. any residential units have gone ~e to do with the housing for the there. dl be in that, do you know? .d 300. I am not certain. But ted cost Of the St. Vineents total cost at this time. estimate for the record? be found in the subcommittee nd project, I understand law- for breaking its promises, and understand the problem pretty identiaL to `Cleveland in the demonstra- ow, is the city going to support st Woodlattd? llude to that earlier when you bhere is a lawsuit that stymied rn~mon pleas court. We hoped e a decision, but we have not irban renewal committee, and ersor~, has recently stated that evert back to a housing area. rest a developer tomorrow in ould not hesitate a minute in :ig Chic~~go, HHFA, or HUD, could interest people in build- interested in, as a member of dy on the committee also has ~ke a good hard look at what L the past and what has been renewal-whether or not the shed the results that we hoped Lere seem to be broken prom- small `businessmen who have gain. We still have the con- ased, and not decreased, since 7a1. over the United States calling S involved. p ai ye ui I) h t C b ax~ n C I C C ii :1 dl ty ng k E )t Lit C' ha 0 ci ii~t skj I ii rn vb 0 si p1. `~ L 1: st ce s~ cr ne all uj PAGENO="0218" 804 DEMONSTRATION CITIES AND RBAN DEVELOPMENT I am just afraid that no ffiattcr how much money we thro~ at the proMem, we are still not going to accomplish anything unless we see what have been the real problems in the past and why it has~ `t been more effec~tive than it has been. This is the purpose of my q estion~ ing, Mr. Mayor. Mr. LOCÜER. I think your fears in m~ny ways are well taken None of us have been satisfied with the results. It is such a comple : prob- lem. This matter of relocations is a v~ryvexing one. I frai dy am not sure I know-unless perhaps thist very bill might give ~ s. some insight. ~ agree with you. ~ We have ijot done or achieved th things we would have liked to. I had a suggestion that I submitt d that might be one of the solutions. I will take 2 minutes just to ell you what it is. We give industry a tax writeoff to fight . pollution, air am water. We are about to give them a Federal ~writeoff, and I think t at will probably pass, an investmetit tax cred ~ if they put in new ma hinery . new buildi~ig. But the homeowner in n area that is not alrea y slum and blight~d-if he is to invest in wha is his greatest asset, h s home, that is not ~n income-producing prope ty,~let's assume, and h invests a sizable amount of money, he gets no tax writeoff whatsoeve Might this not be the inducement t at will break this logj rn that Mr. Widnall and the rest of us who re so concerned about -might it not break it if we give some inducement to the homeowner t ) invest in the property, that if he does not im*est in then becomes a s urn and blighted area ? I am just throwing that out. I know that if you ask Internal Re*ue or the Budget Bure ~u, they will say-it will reduce our income 14y 6 or 8 or 10 billion- I don't know what it would be. But that is fl~xe traditional answer ou will always get from those agencies wl~ose~ob it isto collect mone I am just throwing that out as~ suggestion. i think it is a good one, perhaps,at least~to coitsider. 1. Mr. WIINALL. I think that is a ve~ cOnstructive suggest on, and it is worth considering. And one o1~ the tragedies of our roblern, not just in the big cities today, isthe fact that the person who does his best to maintain his place, even at ~rèat cost to himself, a ci great sacrifice, is penalized immediately by i~mreased taxes for doing it, while the man who allows his property to de*rioriate, gets blessed wth lower taxes. ~ We end ~u:p by having to get into n4~r programs in order t~ bail out a blightedi situation, where if we had ~ncoueaged the improv ment of property rhore, I think that we would1sav~ a lot of these prob ems. Thank you. Mr. BARRETT. Thank you, Mayor Locher. You have done a ~plendid job here this morning. We thank you and your staff for coining. Mr. LOCHER. Thank you for your attention. Mr. BAni~iirr. All time has expired. . Our next witness is Mr. Seymour D. Reich, president, F deration of Section 213's, Inc. Mr. Rëi~h, would you come forwardi please? Would ~Congressman Halpern coi~e up and introduce hi friend? I just ~*ant to point out to you, M~ ~ Reich, we want you o feel at home and comfortable here. That i4 the premise we work n. And certainly you have a splendid Oongiiessman coming from y ur area. PAGENO="0219" DEMONSTRATION CITIES A: He is one of th~ most kno~1edgeaI~ ing and Currency Oommitte~. V ing us on this committee. ~ I would like him to intr4du~e yc Mr. HALPERN. Mr. Chi~irman, because it gives me the o~io~turn fellow resident of the gre~it count ondly, because I am sitting or~ the Mr. Chairman and mem~er~ of I Thursday I had the privilege of plead the cause of the own~erS of `SE This segment of federaily ~nsui housing programs, and I ~trg~ a c the existing inequities with which Here today to urge your ~y~ppat aimed to reduce carrying ~osI~s of what I believe to be unin1~entkne witness, Seymour Reich. J. Now, Mr. Reich is a 1~ar4~wo~ leader. He is an outstanding attc on cooperative housing anSI can, I committee's background ii1 this fie He is the able and dedic~tte~ pr .213 Cooperatives, Inc. It is a pleasure, Mr. Cha~rman, ~ distinguished committee, S~yn~iour Mr. BARRETT. Mr. Halp~rn, I an introduction for Mr. Reic1~. Mr. Reich, if.you would de~ire t we ask you any questions, y~u iiaay Mr. REIcn. I will read thy ~tate~ STATEMENT OP SEYMOD~R D. E OP SEctrIo~ I~E Mr. REICH. Before reading my like to thank you for the óppbrtui as I did last year. I war~± to th efforts on behalf of cooper$~ttF~re h thanks of the thousands of cohstit operative housing. Congressman Haipern h~s alwa: his support and earnestness is ~dwa; I would also like to thai~ik ~ong today. He has always bee~i c~ncer affects cooperatives. We h~ave fr& the past, and he has been v~ry resp him for his support. Mr. BARRETT. As you have obse: outstanding members on th~ subcoi great deal for, the help th~t is ne important bills through. VI~BAN DEVELOPMENT 805 I capable members of the Bank.. very ha~ppy to have him help- [5 a unique experience for me, introduce my dear friend and Queens in New York, and, sec- rity side here today. istinguish~d subcommittee, last eying before this committee to ~13 cooperative housing. Dusing has been a credit to our ~icin-a justified correction-in housing cooperators are faced. consideration of the legislation ing cooperators, and to correct ~uities in the law, is your next highly respected community' He is a recogni~ed authority ure, contribute greatly to your .t of the Federation of Section `ith pride, that I present to this :i. pleased to get such a splendid e your statement in full before ed along those lines. if I may, Mr. Chairman. C, PRESIDP~NT, FEDERATION `S, INC. nent, Mr. Chairman, I would o testify here again this year, ~ongressman Halpern for his ~. I believe I express the full in his district who live in co- ~en the lead in this field, and ry much appreciated. ~an Fino who is here with us ibout housing legislation as it ly communicated with him in `e, and we are very grateful to Mr. Fino is one of our most ~ee. I certainly lean on him a ry to get some of these very cD L~. is `tc aj( d st~ io~ lb rec Les~ ~tl~ a a 1e~ p )I E `I te Lt~ y. .ii'i~ ats ta ye ~ss~ 4 L5~ ~ed, ~es~ PAGENO="0220" 806 D~oNsThm11oN CITIES AND tffitBAN D1~VELOPM~NT llowevei~, I did not know that you 14ii~w Mr. Fino at the be cunning, or I would have asked him also to sa~ ~ kind word in your b half. Proceed. ~ Mr. REICH. Mr. Chairman, I wa~it to testify, regardm~ certain housing and urban development bills4f 1966 ; namely, H.R. 1 064, in- troduced by Congressman Wright P~tman, H.R. 13065, in roduced by you, Congmssman William A. Batrett, and H.R. 12765 a id ET.R. 12766, both introduced by Congressman Seymour Halpern. I wish to address myself `to one a$pect of the 1966 hous: ng bills, that part ~which deals with FHA rn~ftage insurance funds, as they relate to the management-type cooper4ive housing program. should, however, first relate what the Federat~ou of Seetion 213's, In ., is and what it represents. The federation is an organizationt of over 100 managem nt type housing cooperatives in the New Yoi~k City area, each of w Lich was organized under section 213 of the National Housing Act. Each cooperative pays to the FHA a mortgage insurance premiui~i of one- half of 1 percent on the outstanding ~rhortgage balance. I speak for all 150 housing cooperatives in the ~reater New York met opohtan area and the more than 28,000 famili~s or approximately 100,000 per- sons who live in these cooperatives. ~ur interests are the sa ie as the many tho~tsands of persons who live ~n section 213 manager ent-type cooperative housing throughout the JJnited States. These housing cooperatives are ru~i by boards of directo 5 elected by the owner-occupants. Members of the board, all of v horn are unsalaried, are responsible for the operation of properties wo~th many millions of dollars. I would say that these board members 1~iave suc- ceeded admirably in proving that middle-income coo'perativ~ housing can work. The owner occupants of section 213 units repr~sent the finest example of American community life. They take prid ~ in their ownership and take an active part Ir~ their communities. I am tI~e president of~the federati~n. I have served as ~ director of the housing cooperative in which J live fOr 1 years and f r 5 years I served as president. I am also ~ vice president of the National Association of Housing Cooperatives: I had the privilege last year of testifying before this comr ittee and urging the passage of legislation to ~reate a separate mortg~ go insur- ance fund for management-type section 213 housing coo e.ratives. Such legislation was enacted. The effect of such legislation is t~ `separate managemen -type co- operative funds from other FHA i~nsured funds and has d on the successful operation of the manage~nent-type cooperative, distribu- tive shares or dividends to the co-op owners would result. The management-type cooperativejprogram has been extr mely suc- cessful. As of August 31, 1965, mc4rtgage insurance premiums paid by management-type cooperatives to' the EHA from the in eption of the program, amounted to $27,430,000, while losses were only $693,000, a difference of almost $27 million. This is an enviable recor I and one which al) management-type co-op owners are proud of. The management-type insurance fund has not, however, b en imple- mented. Certain difficulties have arisen. Some of these .ifficulties are solved in section 102 of H.R. 1306~ and H.R. 13065. 0th r possible problems have not been solved by the bills. PAGENO="0221" DEMQNSTRATION CITIES Last year, when section 21~ (m)~ amended to authorize the 1tra~isfe~ fund to the management `und, pr~o could not be effected un1e~s t1~ie m~ transfer. There was no 1~ga1 bas~ was not required when ot1~ier F}L~ general insurance fund. As a result gagees have declined to consent t$ a face amount of over $14~1 millio~i respect to which no decision has amount of over $202 millic~n. Am o have been transferred to t1~ie new ] fund. Mutuality has thus ~iot been ~ Mortgagees have declindd cbnse t tended restriction on the use of F: ! default occurs, the FHA pays the i bentures may be used by the mo t FRA. However, under ~ection `~ section 213 co-op defaults ~ia~ be i insurance, whereas should deffault the general fund, the resulting de miums on 213 managemen~-ty~De C way street, so that 1a~ge h~nders I O not consented to thetrans$r o~ fui d Congressman Barrett's bill an Halpern rectify the situat~on~ by e With this restriction removed, th is no longer appropriate, 4nd is al accounts of management-type co-~ agement fund, which will fjnally h I H.R. 13064 and H.B. 1~O6~ do p Sections 1 and 2 of H.R. 127.66, C) In setting up the mi~ttua~ ft~nd : was intended to segregate, from t] e miums administrative eost~ and lo ~ type co-ops. It was provided th~t be authorized to distribute shares df also provided that no such diSb i funds which might be tra±isferre general fund had been rein~bu~sed. The question `had arise4 as to ~ ment applied to the initia~ tr~nsf r to any loans which might be m fund. The answer whicl~ ap~pear only to subsequent loans. ~his Fl-IA orally and in writi~ig. On Harry E. Johnson, Director, Coo e confirm this opinion in `wi~iting. letter of Nov~mb* 15,1065, to~e November 23, 1965, and a copy of t randum of September 3, 1965, a August 31, 1965. JRBAN DEVELOPMENT 807 he National Housing Act was LIS from the general insurance n was made that the transfer gee or lender consented to the requiring the consent, which LdS were consolidated into the his cousent requirement, mort- transfer of 78 mortgages with he uumber of mortgages with een made is 109, with a face aif the mortgages which might ,l fund continue in the general iplished. ause of an artificial and unin- ebentures. At present, when a ~agee in debentures. These de- ee in paying premiums to the i) , debentures attributable to to pay premiums on any FHA Lr. on mortgages insured under res cannot be used to pay pre- ccounts. Thus, we have a one- g many FHA mortgages have bill of Congressman Seymour Ting this debenture restriction. Tirement of mortgagee consent noved by both bills. Thus, all .ll be transferred into the man- established. olve the other major problem. ssman Halpern's bill does. nagernenttype cooperatives it eral insurance fund, those pre- ttributable to the management- new management fund would idends to co-op owners. It was ents could be paid until any ie mai~agement fund from the er this reimbursem8nt require- the management fund, or only )! that fund from the general parent to us is that it applies been confirmed to us by the ember 15, 1965, I wrote to Mr. ye Housing Division, FHA, to rut forthe record a copy of my ` with Mr. ~khn'son's reply of r}IA General Counsel's memo- :r, Johnèon's memorandum of D `1s~ fu Df ID* ti ti~ be rt 3 ed nt' 1~LE~ n~t~ eq )t gr bh ~ti~ ot etJl ~at lie PAGENO="0222" 808 DE1~ONSTRAfloN CiTIES AND kJRBAN DEVELOPMENT (The letters referred to follow:) FEDE~ATION OF SeCTION 213's, IN~ November 15 Mr. HARRY E. JOHNSON, Director, Cooperative Housing Division, Fetera~ Ho~sPLng Admini8trGtion, Washington, p.C. DEA1~ MR. 5OHNSON : Y~H1 have advised e 1y telephone that a ru been made, hi the form of a legal written opinion by the legal alail PHA to tbe~ effect that in the iniplementat n of section 213(1) of lb ing Urban Development Act of 196~ there `11 be no requirement for :1 ly formed management fund to reimburse t~ie general insurance fund sums received from the general insurance fund. It would `be helpful to us to have this information confirmed in and we would appreciate hearing from you as soon as possible in `this Sincerely yours, SEYMoUR D. REId Pre~ DEPARTMENT OF HoUsING 45W URBAN DEVELOPMENT, FEDI~R4L HOUSING ADMINIsm~TIo~ Wai4i4ngto,v, DXL, November 23~ Re cooperative management houalng in'surane~ fund. Mr. SEYMOUR ~D. REICH, President, Federation of Flection 213's, Inc., Jackson Heights, N.Y. DEAR Mn. REICH: Pursuan.t to the reque~t contained in your lettei vember 15, 1965, I am enclosing herewith a copy of my memorandum of 31, 1965, and a copy of our General Oouns~1's memorandum of Septs 1965, `the contents of which are self-explanatoijy. Very truly yours, HARRY E. JOHNSOI r Cooperative Housing Dh SEPTEMBER 3, sioner-Comptroller. To : Mr. Lester H. Thompson, Assistant Commi From : A. M. Prothro, General Co~nse1. Subject : Cooperative management housing insi~jrance fund. The question whether all fun~s transferred from the general insuran to the cooperative management housing insurance fund are to be tre "loans" and therefore repayable to the general insurance fund has beex by you and by the Director of the Cooperative Housing Division. (See a memorandum `dated August 31, 1965, from lVjr. Johnson to Mr. Mowati Under the *mended provisions of section ~13 of the National Housi funds may be transferred to the éooperative m~inagement housing insuran pursuant to th~ provisions of subSection (k), (4t) , and (0). Section 213~i) provides fo~ repayment to the general insurance fund funds transfe*red to the cooper~tive manage~nent housing insurance ft~ suant to the provisions of subsection (k) or (to) before any distributable is distributed. Assets transferred pursuant t~ these subsections may, th be considered as loans. No such recjuiremeqt is made with respect t transferred to the cooperative management housing insurance fund pi to subsection (m). Under the provisions of subsection (m) the Commissioney is author transfer to t~ie cooperative management housii~g insurance fund existing ments for insurance and insured mortgages ~ provided the mortgagees to such transfer. It seems clear that the stati4tory intent is that transfer subsection (mt) will include transfers of bot* liabilities and assets rob the commitme~its and mortgages placed in th4 cooperative management insurance funid. The assets transferred pufrsuant to subsection (m) be available fOr the payment of distributablel shares as the Commissior direct without regard to repayment to the g4eral insurance fund of thi thus transferred. In this connection it shoufd be noted that section 51~ 1965. ing has of the ~ Hous- he new- for any writing regard. klent. 1965. of No- August mber 3, Direet( ision. 1965. 3e fund ited as raised ttached ig Act, ~e fund of any id pur- shares ~ref ore, funds irsuant [zed to ommit- ~onsent ~ under ting to Lousing would er may ~ assets )(a) of PAGENO="0223" DEMONSTRATION CITIES the act (as amended by see. 214 of t] of 1965) creates this gener~l ir~snra transfer to the general insu~an~e fu: mortgages and loans referre4 to In SE designates section 203 loans and "mort gation of the cooperative ma~1ag~ment excluded in transferxing as$ts and I Pending the consent of the n~ortgagee~ and commitments as provide~ in subse earmark the assets and liabiljties pert eligible for transfer in suc~i z~ianfl application to mortgages eventua~ly to ment housing insurance fwid. ~ubse sioner will establish a time pei~iod the request for transfer. Wl~ên ~he ti elapsed, these mortgages an4l cOmmit to the cooperative managem~nt ~iousi: the general insurance fund. To : Mr. Frederick W. Mowa~t, Deput From : Harry E. JohnsQn, t~ir~cto~,Ooo Subject : Oooperativenianage~ent hon Section 213 of the, Natione~l I~ousir present session of Con~ress ~ t~ p~ovid( for section 213 eooperative~. All fi matically included in the ne~w f~ind. included if transfer of the ~nsu~tnce applicable mortgagee. The ~nortgagE Comptroller to ascert~dn tbe~r d~?cisic gagees give their consent, ` th~ face an new fund would be in the neighbo~hooc I, of course, assume' that n~hei~ it b insurance accounts are to be ~o transf tion and determine the dolla~ an~iount merly the housing insurance ~ funici, no the management fund with t~'iis ~igur not a "loan." While the' statute require~, a~ a c gagors that any funds transf~rred~ fro agement fund be repaid in ful~, it ~ m~ to the funds property attrIbu~tab1e to the insured cases. This vie* is expr oradum to Dr. Weaver dated 4pri~ 29,: "Also, no distributable sh~tre can transferred to the general ~urplus a (cifter initial establishment ~J' the cc fwad) has been repaid." {Enlphas~s sr Any contrary result which wo~ild e: millions of dollars of contingent, liabi of assets seems to me would ~be i~i'dicu all eoncerned. It does, not s~em to in a result. An expression from you cqncerning dated. Mr. REICH. It can b~ note~l fro understands this to' be th~ c~tse, preted the law to this efl~ect, H difficulties it would be h~ipf~il if bill, H.R. 12766, were enact~d to as statutory law. Section 1 of H.R. 12766 p~ovi transfer to the new ; URBAN DEVELOPMENT 809 using and Urban Development Act md and . specifically excludes from a assets and liabilities relating to 519(c) of the act. Section 519(e) the insurance for which is the obli- ing insurance fund" as those to be :ies to the general insurance fund. ~e transfer of section 213 mortgages (m), it will be necessary to hold or `to the mortgages and commitments to pyotect and reserve them for nsferred'to the cooperative manage- ~m) contemplates that the Commis- which mortgagees must act upon ~riod fixed by the Commissioner has which have not been transferred urance fund will be transferred to Auousv 31, 1965. )ciate General Counsel. ye Housing Division. isurance fund. ` was, as you. know, amended in the he creation of a new insurance fund cooperative accounts will be auto- eratives insured in the past will' be ie new fund is cOnsented to by the a presently being circulated by the :his regard. Should alL of the mort- of the insurance transferred to the ~0 million, , u ascertained which of the existing bhat the FHA will analyze the situa- transferred from the old fund (for- general insurance fund) and credit is will be a permanent transfer and )n to any distribution to the mort- general insurance fund to the man- that this requirement does not relate ~v fund arising out of the transfer of in Commissioner Brownstein's mciii- S follows: .d until any' amount which may be t from the general insurance fund tive management lw'u~sing insurance LI ~he transfer of perhaps hundreds of the new fund without any transfer nd contrary to the understanding of Congress could have intended such oregoing would be very much appre- ~s correspondence that the FHA heir General Counsel has inter- er, to avoid any possible future on 2 of Congressman Halpern's e this intention absolutely clear Lat the FHA Commissioner will an amount equal to the pre~ t~i Eou ges `ot~ Ld1~ o l~] io~ th~ )fl ? l~ ic ~cI Ct Li] U iii ~1 C ig ~: re ooz o t mt e ~ th~? V ~1E I l1~i Le~r 5~ `~ pa our era lie i~1 ~ is bh~ m r th dt ~ct~ Le PAGENO="0224" 810 DEMONSTRATION CITIES AND t~EBAN DEVELOPMENT miurns a1rea~dy paid by the co-ops, mi4s the administrative ex enses theretofore incurred. Under present ]Iaw, section 213 (k) the Corn- missioner is directed to transfer to the iiew fund) only what he `~`deter- rnines to be necesary and appropriate." We think it irnportai~t that the Congress spell out when it considers to be appropriate, so t1~at the managernent fund will reflect the full strength of the co~.op pr~grarn right from the start. This can be done with the formula pre iiurns minus losses and administrative ~ expens~s. As I previously sta ed, as of August 31, 1965, premiums of our co~ops amounted to $27,4 0,000. Administrative expenses were $9,687,0~0 and losses were $6 3,000. Thus, the appropriate amount to be pl4ced in the managernen fund at that time would be $17,050,000. TJi4ess the full amount is laced in the mutual fund, the provision for pek~iodic disbursements ba ed on the strength of the fund is of very little~va1ue. We urge the co nmit- tee to include sections 1 and 2 of H.R. 1~766 in its bill to make pertain that all loopholes are closed and that the mutual fund can pr~perly function. Finally, gentlemen, I ask this commi4tee to mandate the reduction of the mortgage insurance premium p4dd by the managemen~-type housing cooperatives. In 1961, 1egislati~n was introduced to m~ndate the reductio* of the mortgage insuranc4 premium, from one-l~alf of 1 percent to one-fourth of 1 percent. ~nstead, on the urging ~f the House and home Finance Agency and t~ie FHA, the Congress j~assed the legislatio~n permitting a reduction in Jthe premium in the disc~retion of the FHA. Unfortunately, the FHA has not exercisec~ that discretion. In 1963 legislation was again introduced in the House to r~quire the FHA to reduce the insurance premium. After a meeting ir~ June 1963 of Congressmen Abraham Multer,, James J. Delaney, Seymour Halpern, Benjamin Rosenthal, Joseph1 P. Addabbo, and Jo n M. Murphy, with the Administrator of thef HFFA, Robert Weavi r and FHA Comm~issioner Philip Brownsteir4 and with Mr. Irving Sher- man, then P~esident of the Federation fin attendance, it was : greed that the Congressmen would introducel legislation to mutuali e the management-type cooperative funds. O~i July 5, 1963, FHA Co imis- sioner Brownstein confirmed in a letter that stated at the June meet- ing that "~ ~ ~ the insurance fund in which section 213 loss s are included is entirely adequate to meet our estimate of losses " It wasn't until 1965 that mutuality was enacted. And still, as I have related, because of certain prOblems, it h~sn't been implemented. The perfecting of the mutuality legislation ~vill not completely sol e the injustice dons to the co-op owners. Their excellent record cries out for a *eduction in the mortga ;e in- surance preniium. In fiscal year 1965, ffr example, managemen -type co-ops paid premiums to the FHA of $4,301,000. After dedi cting losses, and administrative expenses attrllbutable to operating thi~ pro- gram, and after making provision for n~cessary reserves, the i~et in- come to the FHA from this program was $3,371,000-and this w~is for fiscal year tt)65 alone. Had the management-type co-ops pai~l the reduced premium of one-fourth percenb during fiscal year 196~, the net income to the FHA would still have !been $1,218,000. There is no better evidence to support the position t t the time has come to make PAGENO="0225" be no misu: ret on of subsection the pending bill. Mr. Chairman. extended to r I statement- mutuality legislat very fine work thE AI~T RBAN DEVELOPMENT 811 - reduction DEMONSTEATION C~TIES courtesy 60-878-66-pt. 2- PAGENO="0226" 812 DEMONSTRATION CITIES AND~ URBAN DEVELOPMEN~ honorable committee-the Demonstr~ti~n Cities Act, the U ban De~ ve1opm~nt Act, and the numerous c4~rreètive amendments c ntained in H.R. i$06& I wish Ito express. my ~1ncere ~pp~e~ation. to this impor ant sub- committe4 to permit our views to be:4iade known. With 14e toda~y are Edward J. Lflik~tt, J~r., editor and co ublisher of one of~the Nation's outstanding ti~frspapers-the Scranto i Times, who is serving as chairmazi of our dettionstration cities task f ~rce ; the president ~ of tho Board of Commiss~ôners for Lackawanm County wherein Scranton is county seat-Patrick J. Mellody ; and B rnard B. Blier, vethran community development official who is with the city planning bomnissioh arid the Serani4n Redevelopment Anti ority. You have already heard muth tes$imony from the exper s on the technical aj~~dments a.ncl I am sure~that the pebple~ over ai the new Departim$nt of Housing ~nd Urban ~ei~eloprnent will b~in constant liaison 0111 this subject. So in iifiverse order, I would like t~: move on to the new U ban De- velopment Act of 1906. After reading this bill, I was de~p~Ey impressed by the lar guage of the first title, "Grants To Assist in ?lanning Metropolitan )evelop- merit." There is no area in Federal and SEate legislation and Go ernment assistance that is so neglected as th4 no-man's land of met opolitan programátg. Enact~*ent of this title alone wilt accomplish much in 11 urban districts~Lthe large and. the small-joward bringing toget] er all of our resoii~'ces arid all of our potentiat--both public and priv te. Title IV-, "Grants for Urban Info4niation Centers," to m at least, representh a companion program so fthat metropolitan area ~ can co- ordinate uot only the essential planthng process but also th~ y will be able to bring together arid utilize vItal information so nec ssary in approaching and solving our urban~~problems. Also, I believe that in the form~ ~i~n of local or regional action groups to implement these beneficial `ederal programs, direc recogni- tion of the political structure electe by the people should I ~ insisted upon by ~he Congress~ My ii~1*rpretation ofyc~ir deftnitio . of a "metropolitan are agency" appears tb assure that type of recogi ~tion. In the inthre~t of brevity, I woi .d like to recommend he early approval of the Demonstration Citi~ Act of 1966 without ~ oing into any major details of the program *hich have been more han ade- quately supported by a host of other witnesses. My associates here from Scranto* and Lackawanna Co nty, Pa., join me in complimenting Presiden1~ Johnson for placing ~ efore the Congressthis significant urban devel4pment program. Likewi]~, we commend the House ~f Representatives and rour sub- cornmitte(e for conducting he.arings 40 early in the session : id to the dimensioti which you ha~ve gone tof establish public and ~ idividual attitudesion this demonstration progfram. I join ~ny fellow Pennsylvanian, ~fayor John W. Barr, ~ r., of Oil City, and former president of our State's league of cities organiza- tion, in expressing our general sup~~t of the program but also con- PAGENO="0227" DEMONSTRAflON 6TIES ~ curring with his observati n 1~efoi prehensiveness in attack ii ~he a notable characteristic o m~trol ~ to the detriment of many o these p As chief executive of a ei1~y w i renewal programs-~compl~ted, in ~ newal-in-depth approach~not m~ s in the Nation, I know the s~gnificai ~ on blight as envisioned by the ?res~l If Scranton is chosen as on~ of ~ position to meet all o~ the eig~ht e 1, Section 4. But as broad a~ these i~ecessar Scranton and other comx~iunities another field where compreI~ensi take place. It is the blight which hats v~site heritage of coal mining-the ~in Those Members of the ~ngres and whatof I speak, I am~ sui'e, ~ program as the flemoustr~tiqn C t: rental residents regain the ~fre~dor a full real estate equity foi~ ~v1~ich ~ In your ~committee delib~ra~ions, thrmination should be mad~ that t e sufficient to remove the hist~ori~ bli I surface stabilization so th~t n~o on very life. . If you believe that the la~agi~1age to cover the situationswhiqh I hay sary new language is insert~d i~i the b Communities such as Se~ar~ton the finances be made avail4bl~ by I the local communities to i~egain t clean air, stable surfaces, `~anc~. a ~ o by sound property rehabilitation p In closing, I want to tha4k t~he c committee on behalf of m~ a~soci t will speed your consideration of Ii legislation and . that eligible cities ~ the very near future. I thank you. : Mr. BARRErr. Thank yc~u, ~1ay and presenting an outstanc~ing sta I just want to tell yoit, ~ou are very handsome gentleman. Thank ~ Mr. WALSH. Thank you, Mi~. 0] a (Whereupon, at 11 :55 a.~m, the ~ vene at 10 a.m., Wednesday~ M~rch ~. JREAN I~EVELOPMENT 813 committee last week. "Corn- problem has not always been R programs in the past, often ms." ias more than a dozen urban~ ution, and in planning-a re- d by other comparative cities a direct, comprehensive attack lected cities, it is in immediate lity requirements suggested in lifications are in their intent, ounding it . are able to offer Ld coordinated renewal must. communities resulting from a idence,probl~m. know the conditions whereof ree that only through such a ~ct oan our homeowners and L mine caving and aga~in enjoy worked so hard. ~mit to you, a committee de- rent prc~isions of the bill are om our homes and regain full he future should f~.r for his is act should be more adequate d, then, I hope that this neces- text. nly asking that the tools and ecleral Government to permit leserved place in a future of living environment enhanced ms. an and all the members of the nd myself. I hope that you mportant urban development be in position to utilize it in ~% `aish, for coming down here ie: t o fly an excellent mayor, but a on. mmittee adjourned, to recon- )66.) D ,Ig a~ iti gi~ h er ib lu~ i~t~ e ill t. bc~ ,~ ., ,: ~ ]. PAGENO="0228" PAGENO="0229" ~iOVSE C Su~co~MIT OoMiI~r~r~ The subcommittee m~et, pursuai 2128, Rayburn House Offic4 Bt~i1di man of the subcommittee) pre~idin Present: Representative~ B~rret Mr. BARRETT. The committee wil Our first witness this mprning i dent, Mortgage Bankers 4ssociati Jones, director of research and M governmental relations. Mr. GoOdwin, we are very mu morning. We want you td feel at statement in full and give the m~ questions, we would like tb do th will be glad to I do w~4 morning~ ~PRESENTAPIVES, N HoUsING OP THE ~NR1NG AN~ CURRENCY, Wa$hingto~, D.C. recess, at 10:25 a.m., in room on. William A. Barrett (chair- ~. Sullivan, Widnall, and Fino. e to order, please. e Mr. Ewart Goodwin, presi- ccompanied by Dr. Oliver H. ahath t. Northup, director of leased to hatre you here this If you desire to read your s the opportunity to ask any Whatever way you select, we committee this ~at4~ DEMONSTRATION CITI~S 4~i~ URBAN DEVELOPMENT WEDNZSD4Y, *~$~ 16, 1966. E?1 R~ ~to~ Ii al op 111 1, ~ be~ STATEIVEENT PAGENO="0230" 816 DEMONSTRATION CITIES AND URBAN DEVELOPMENT our director of governmental r4atio~s and Dr. Oliver H. J rector of r4~search of our as~ociation. Our a~sbciation rBpres~ntatives h~$ve appeared before t mittee on i~umerous occasions, so I feet that you are aware of areas of rnterest in all forms of reaj estate financing Ho ~wou1d like to emphasize. the word `~ai~," foi~ ourthemb~rs; bo ers and juvestors, are actively engaged in a variety of finai tivities, farm and ranch loans, 1ow-~st housing, income-p properties, such as ~apar~ments, ~actQ*~eS, a nd office building insured and VA-guaranteed home mortgages, special-purpo tures such as nursing homes, clinics, ai~d so forth. The constai for new inv~stment:opportiinities is tite lifeblood of our indu has enab~eh~ to serve ~n~ver-increa~ing variety of the Nati est~tefimt~jignecds. ~. Becaus& of this we have; a keen inl4rest in Federal legisla affects ri~a~I estate and local community activities in which our members have taken an active p$~t. We appreciate thi junity to comment on the various biils~ourrently before this co There are a number of bills before the committee, some embody ` some new conc~pts. Before discussing these m ~ould like to comment on the bills rel~ting more to existing f First, we wish to endorse H.R. 118~7 and H.R. 11858, intro the ch~iirrnan and Represthtative Wi~all. We believe tha criminath~n against vetera~ris who j~reviously used their loan bei~LEIts which resu~tecI from 1*st year's legislation ~ tentionaL ~ These bills would grant su~h veterans the same ôp~ to utilize the F'HA veterans loan pr~gram as other vetera: which is the only fair thing to do. We urge your favor sideratiOn. H.R. 13064 contains desirable technical amendments but three amendments to the National Housing Act, not present bill, which we would urge the commi~tec to consider favora'l ~ First, ~ believe the maximum mor gages aniount for secti i~ura1 ho~de~ mortgages shomid be mt ~eased to $17,500. Fo years our industry has devøted major' fforts to better serve th~ needs of~flra1 nonfarm residei~its. D ~pitecoo~er~tion from. er~1 Hoi~ing Adrninistra~tkon, ex~peri ~ce ta~s shown that th program, oriented primarily toward i rban markets, cannot r adapted to this market. Section 2O~ (i) has sevei~ely limite ness so long as the maximum mortgage is artificully low. M residents need, and can afford homescosting more than $12, ~an and *ill serve this market if O4ng'r.ess will gii~ us a c increasbig this loan limit. . We call to your attentkin that.ther~ are two federally adn prograths~ designed to aid rural nonfa~m residents-both of mit loaiislin excess of $i2~5OO and bo$h of whith involve a c GoverniU~nt. The Vet~tns' Admii~istration's direct loan has just~ Iiiid its maximu~m loan am~iint increased from $ $17,500. The Farmers Home Loan Administration's titl program does not have any maximunt loan amount establish We understand their average loan is $11,000 thus far in fiscal ~ nes, di- is corn- ur wide 7ever, I li bank- cing ac- oducing FHA- e struc- t seardh try and &s real ion that ~any of oppor- ~mittee. f which ~sures I inctions. Tuced by the dis- *1 home as unin- ortunity S enjoy, ble con- here are y in this ly. ti 203(i) several housing he Fed- 203(b) adily be I useful~ ny rural 00. We iance by inistered hich per- st to the program 5,000 to V loan i by law. ear 1966. PAGENO="0231" DEMONSTRATION ~~ITIES A To reach this average arnoi~nt ~an substantially higher princii~al ~mo ~ The me~nbers of the c~mr~iitt available to people ~i1~h ~Lft~-in t~ Governmeflt a penny. ~ Wiiph all th ~ enterprise should not `be pr~clu~ded ~ can, by th~ retention of an ~rt~cal ~ on this program. We urge yoi~ to'i C Second, we recommend ~hat th Housing and Urban Deve~op~nen 1 increase the ~ maximum . in~er~st r t mortgages to meet market 4on4litio single-family homes. * ~ ~ ~ The mortgage market today is ~ was in the days when Con~re~s fi~ tthlishing maximum intere~t i~ates t~ tween mortgages, Governrn~t bond~ rowe4. Insured and guar~i,nt~ed ~ accepted * `and understood b~r ii~vest)Oi interestrates~are today far more r' conditions, whereas in thc~ pa~t t ~: behind to permit legislation to be ~ a supply. TJnder today's con~1it~ons e: flow of mortgagemoney if ~nte~est a response th market oonditio~is. Th ~ since thefirst of the year. ~ ~ Congress has this year i~te~ ~ of Veterans' Affairs and sh~iid do s~ The third amendment wo~ild esta~I surance program in FHA ~ homes constructed other th~n ~or ~ of Federal programs in the T~epartni~: merit of Agriculture oonoer~ them êl nomic activity in rural ar~s wher sult of changing farm pro~1uc~ion rr creased leisure time could ~iti1ize ~ Ii moderately priced flnancin~ were a homes. At present many ~f 1~hes'e nancing while in others th~ only fi ~ count, or time price loans, ~rith the h ciated with consumer financ~. Un e: developing the recreation potential i impeded. The amendment which we p~opo e through ~`HA, to establish ~ mörtg ~ fled construction requir~m~ts, .~eoo intended for year-round occ~1p~ncy. whom we have talked hav~ e~pres e participate in this program~ We fe I if this amendment i~ adoi4ed `our H ) ~IRBAN DEVELOP]~tENT 817 he loans would. have to involve ognizé that assistance made mortgage~ does not cost the iands on the Treasury~, px~ivate helping whe~ we want to, and ~ maximun'i mortgage amount seit, ret~r~ of the Dep~rtment of ~iven `permissive authority to ~n FETA-mnsured multifamily to the ~uthority he has for ex~ably diE~n~ fron~ that it ablished tl~ precedent of es- g~iation. yield spreads be- corporate securities have nar- ~g~s are n~uch more widely The rësul~ is that mortgage 3ive to gen~ral `money market r'equently l:~g~ed, far enough ~I to avoid mal~djustmcnts in is disrupt~o~is oan. occur in the are not adjusted promptly in ~e various e~amples, of `course, h~9rity for the Administr~or FHAmnltlf~mil~ programs. a section 2O3~l) mortgage in- the Commissioner to insure ound oocuj~ancy. A number f the Interior and the Depart- with the stimulation of eco- omies have suffered as a re- ods. Many people with in- recreation facilities if some able for inexpensive second `s are practically without fi- rig' we kno* of involves dis- interest rates normally asso- ese circumstances progress in ese areas has been seriously ~uld authorize `the Secretary, e ii~surance program with m'ôdi- i~~g that the properties are not ~M~4ny individual investors with ci ~he desire and willingnJess to w~ can assure'the Congress that ~c~stry can make a substantial bs. re `4 lo re ~si( ~ )r~ s, ~io1 te~ fo~ i~h Lt c~i :etl n~ Lgl tiT it PAGENO="0232" J*~MONSTRATION CITIES AN] URBAN DEVELOPMEN1 contributiOn to the efforts to revita1i~e depressed rural area cost to the Govermnent. We urge yc~ur favorthle considera Attached to our statement you will find amendments to these sug~stions, which I will not read unless requested. H.R. 9~56 would authorize FHA t~ insure lOans, and HIT direct lo~ns, to construct group me4ical practice facilities. lieve this~ legislation is unnecessary. ~ So far as we have be determii4, the supposed need for si~h legislation arose fr isolated ~reas of difficulty, not from ~ariy widespread lack of any re1ud~ance of lenders generally t$ take this kind of risk. We were interested to ncte that ~n 1~he testimony of Wilber ~ Under Secretary of the Departnmnt of Health, Education, fare, on March 1, he did not oiler any figures demonstrating adequate group medical practice fa~ilities, or funds to fina The dated figures he did offer ind~cathd only there has I growth in the concept of group medi~al practice. We certaii nize this since we are going a trerne4dous amount of financi area thrdugh out the United State~-4hat is, our memberi own orgainization. Thi~in~its~lf, d~es not suggest any lao ity to fin4nce adequate st~u~tures in wfliich to practice. We ca~inot find evidence of any 4hortage. In the time legislation was introduced we haveT looked into this quest director of our research department advises us that figur particular type of structure are app~rently not collected by ernment agency. Nor do our own statistics shed any hg] subject. However, we have conduot~d an informal survey. our menil~ers we have yei~o find anyj indication of difficulty ing rnethc~1 office buildings of th~ type we understand financed tinder this legislation Th4t would not only be th it is probably QRC of the most ~ough~t alter type of loans b~ say, ailtypes of investors. In February of this year-just 1 mt~th ago-~the Mortgag Association's Washington Committee, Executive Commi Board of Governors, representing ~i~ortgage bankers and from all parts of the Nation, unanimously approved the recommendation: : T1~t M~A eppose H.R. *9~56, citing in i*trtieular that there are ft avail~1e In the private market for suclj facilities, and that this totally uni~eeessary. I With t~iE~ heavy burdens already o$ the U.S. Treasury, wit hiferatioi~ of programs FHA alreadyihas to administer, with to indicate a need, and with the pre~jonderance of evidence: ers indicating that there is no umnet~need, we urge you to v H.R. 9~56. In considering H.R. 12341, the Deixonstration `Cities Act, 12946, the Urban Development Act, we have kept in mm former is directed at correcting existing urban problems, w latter directs itself to the problems of future urban growth. edly these are two probl~ms deserv4ng our, and your, atte effort. However, in approaching th problems ~hioh facc 818 without ion. arry out to make We be- a able to m a few funds or 1. Cohen, nd Wel- a lack of ce same. ~en some Lly recog- g in this and our of abil- ince this on. The S on this any `Gov- t on this Among `n financ- vould be case, but ,~I would Bankers tee, and investors ohlowing ds readily `rogram is the pro- 10 figures ~om lend- ;e against and H.R. that the ierea5 the Undoubt- ition and `5 in these PAGENO="0233" L.. Its p enough Fe le for a~. or contribi~ PAGENO="0234" 820 DEMONSThATION CITIES ANDf URBAN DEVELOPMEW[ Nowhere dan we see that it would dern~strath the value of be tive. T1I*C ~eem~ to~ be no incentive ~or local awl State gov tø strengthen their own programs or ~ke use oftheir owia r it would encourage local gov~rnmBi4s to abdicate responsil the administration of their own programs and for finding cooperate voluntarily in desirable metropolitanwide efforts. I this bill seems to be aimed at weakening the incentives for st: telligent, local government bodies at the very time in our development when we need them the m3st. Counteii ar~uments have been offeifed, of course. It has t that thes~ will be local plans, boc4ly administered with financial ~4ssistance in the new spirit ~ creative federalism. mit that tbis concept has yet to dem*nstrate its workability extensiou ~of it now would be unwis4. One outstanding ex~ this apprd~ch ha~ been they OEO. program. ~ We have not bee~ attend cth~rent hearings, but press reports indicate strong sional pressure for increased Federal~ control to avoid the w scandal which has accompanied thi~ unsupervised distrib Federal money. ~. It was a predictable result which till inevitably occur un circumsta*ces. It doesn't matter thatimost of the local admir were hone~t and conscientioiis-they ~iil all be subjected to tli effects o~jhe tighter controls. We s*bmit that no program *withFed~al money can long escape F+deral controls. I would like to comment briefly oi~ title II of H.R. 1294( opposed. this measure last year and w~ continue to feel as we that such a program is undesirable ai~d unnecessary. We at~ portion of our testimony from last y~ar for inclusion in you I will n~t read it unless requested t~ do so, but would like it in the record. ~ . Mr. 1~upti~rr. Without Qbjection, it~is so ordered. Mr. Go~DwIN. The provisions of s~tion 208 would authori or the' pi~rchase of securities and ~4Jigations, of.. land dev~ agencies, ilefined as public corporat4~s, mcludmg municipal the ac4t~is~tion tf land fot future de4~pment. This land ~ have to b~ in any metrop~lita~n area,{hut the Secretary wou theless ha've. to approve all plans for i~ts use, including purch~ and sales prices. The combination of provisions in title II would give the authority to control the use of virtual~1y all land in metropoli and any land adjacent thereto which local land development could pü*chase. Such authority isi unprecedented in our Thereisiio justification for the supj4sition that Federal oft better ju~ges of the proper use of la~id than local officials, is serious ~danger that the creation ~ such authority would a serious*ave of land speculation. The land development provisions o$~ title II are wholly urn and a dangerous limitation of our freedom. We urge yol against this title of E[.R. 12946. This concludes our formal statement. We shall be happy t any questiOns. ~l initia- rnments ~sourees. ility for ways to [n short, in- uational een said Federal We sub- and an mple of i able to ~ongres- ~ste and ition of der such istrators e stifling paid for ~MBA lid then, .ach that ~ record. inserted ze loans, lopment ities, for ould not ci never- se prices ;ecretary :an areas agencies history. .cials are nd there louch off iecessary to vote answer PAGENO="0235" DEMONSTRATION CI1~IES (The atthchments refer~ed to f 4~rTAC P~o4ssD To increa$e macoimun~ mortga~ Amend section 203(1) of the ing the words "üot in eicce~s 0 To c~thorize intere8t inOrease3 Amend section 207(7) (e) (~ ing the words "not to exceed thereof," "6 per centum per prescribe." For insurance on mortgc~ges fo! ~ Section 203 of the National tLioi~sing of the following new subsectio~: " (1) The Secretary Is aut~iori$d t meeting the r~quiremctita of sub~ectt by this subsection, which inV~lve~ a p1 and not in excess of 95 per $nttim approved for mortgage insur~nc~ prio the construction of the dwellttig ~vas application for mortgage .ins~iraz~ce, ~ the property as of the date th~ mbrtga gage shall cover a dwelling designee need aot b~ designed for ~y~*r~r~und scribed by the Secretal7, and~ma~,T mci of 1 per eentum per year on the aver~ The dwelling ma~ be located In i~n ar practicable to obtain conformity *ith insuring of mortgages ofl ho~isin~ in respect tQ which the niortgagE~ is ~xect. EXCEEPTS FnoM19~5PE~Pfl~oN~ or BANKIN~ A~O Cr LAN1~ DE~~LOPJ Section 201 proposes a ne4v prog~ra loans for land development, h~clu~ing ~ ments in the acquisition oftrácts.~. W~ do not recommend its pa~sage.~ Land development loan ins~rai~ce h~ edge, and ~ this proposal w~s ~1r~t mad yet accustomed to this type o~ le±idlng been a widespread recogtiitIo~i o~ the growth in the number andty es ~f in~ land development loans. . The results are nowhere mo e appar~ ton, D.C. New subdivisions an ~carc towns-the largest of ~btch cor4temp process of development. It 1 estimat the process of planning *ct~ eve~opm~ largest part of the population inei~ease projects are privately finance althoug subdivision requirements In o der t~iat Will be available to purchasers We may well ask ourselves what thE easier. It is almost impossi le i~o es~ would lead to overspeculatio and fu )~tt~ t~ il (b e ip] e~ ilt- tl~ bE es tb ;hØ e )~ 1 ier* A: ~D URBAN DEVELOPMENT ~1i~ o~r:) 821 fl~ DMIINTS k~i~ e a~o~n Nattona f," ~nd Ii ~n mi~iti/ ) b~y stri L" i~i thiu nn~tm oi Hi ki r sectio~i~O3(1) dng A~ct by striking `~$12,5OO" follow- igtherein the figure "$17,500." peogran'E8 `51/4 per centurn per annum follow- nd paragraph and inserting in lieu lower figure as the Secretary shall ~,in.q areas amended by adtling at the end tbe~e~ A re under this section any mortgage of this section, except as modified 1 obligatiOn nOt in excess of $15,OQO, any case where the dwelling is not ie begilming of construction, unless ted more than one year prior to the centum) of the appraised value of I Accepted for Insurance. ~ inert- 4ngle-famlly occupancy, but which nc~y, and shall ~meet standards pre- serVice feenot in excess of ohe-haif tshlndIng balance of the mortgage. ~rre the Secretary finds (1) it is not c~f the reepiirements e~sent1a1 to the ip areas, ttii4 (2) the project with an necepteihle r1~k." :n L40n BANKimS ASSOCIATION Baronu Y COMMITTEES. t~StuANC~ V :bin the .FUA for the insurance of wns, and assistance to State govern- hat this progre~m is unnecessary and ii ill bE~ wtii I~l t0~, .~ studied for 7 years to our knowl- n the financial community was not ~he last 7 years, however, there has for this type financing and a large ~ willing and able to invest funds in tnin the area surrounding Washing- counteçl and approximately . 15 new housing 100,000 people-are in the tt the humber of new towns now in 11 be adequate to take care of the pated by the year 2000~ All of these planning is of a caliber to meet ~HA ~nefits. of this type of home mortgage tI would be of making land financing he conclusion that easier financing increases in land prices. It would PAGENO="0236" 822 DEMONSTRATION CITIES AND URBAN DEVELOPMENT place an unnecessary workload ~ on PITA and HITFA. It would be far our judgment, to leave them free to work on those problems for which tions are not yet apparent. Already FITA i~1required to spend a dispro~ amount of time on special-purpose programs to the detriment of basic serving a broad segment of the population. May we point out that many members }of this association throu~ country nz~e turrently engaged in land develc$pment activities. The tee] this type fi~4mcing are well known to our ~nembers. While it requir of substantial financial strength to undert4e anything as large as tb ment of a new town, this does not mean tb4t small builders are preclu enjoying th:e benefits of the developed bi~iiding sites. Few land d hold all of t~ie developed properties for thei~r own construction. Parti this true when a mortgage banker is the 4eveloper. It is customary developed building sites available to a wide range of builders. who will develop the properties in a manner consistent with the developm Even with an FHA insurance program, few mall builders would be in financially, or organizationally, to undertake any significant land devel The present proponents of this program argue its necessity to assu ability fuiids at reasonable prices. We beli~ve it is evident that adequ are eurrent1~r available to finance as many 4f this type of project as tb is in a pos&Ijon to absorb. LICe insurance c~mpanies, savings and loai t1ons~ coni~m~reial banks, and nibrtgage banl4ers are all involved in lam ment firianeihg. Competition is inereasingjas more investors and th growing aec~imulatIon of savings make inc*eased funds available for lending. Pilder such circumstances the eos~ of funds for these activit tam to 1~e highly cobipetitive. We can see ~io benefit to be derived fr sured lending program for land development at this time. Mr. BARRETT. Thank you very muQh, Mr. Goodwin for y~ thoughtful statement. Even though I do not agree with many observations, certainly. we will study pour recommendations c~ I note on page 11 of your statement~that you use the Office nomic Opportunity program as an ex$nple of the pressures w velop for Federal control over aid programs. I do not want t the issue ~ith you, but I would like t4 ask you a forthright Are you a ~upporterof the antipovert~y~program? Mr. GoODwIN. I would sa~y that ce$ainly the objectives of gram are desirable. Whether we oould~agree with all of the rn are or may be used to implement it, is, øf course, another questi Mr. BARRETT. Thank you very much. Mr. Widnail ? Mr. WIDNALL. Thank you, Mr. Go~dwin, for your statem certaihly welcome you befoi~e the comn4ittee. I kn2w' l~oth Congressmth Barrett *~id I are glad you end bill which we introduced with respec1~ to vetei~ns' loans. W stand that~ the bill that was adopted `ast year is working qu We expect that to develop a great deal snore this year. Have ~rou had any experience at a~ll with the~ modemiza rehabilitation loan program ? ~ Mr. GooDwIN. Not a great deal persenally. Our members h i: believe the two men here from the staff would have more exi that program through our members who are very active in it. Mr. WIDNALL. Could you give us tije benefit of any experi have had `vc~ith respect to that program~ Mr. Goo~wrn. We, in our own org~riizatioii, ar~ not actii moderniz~ion program, I am sorr~r ~ say. In other word tetter, in the solu- rtionate rograms hout the niques of 5 a firm develop- led from velopers ularly us to make can, and But plan. position pment. ie avail- te funds t market associa- develop- rapidly uiortgage ~s Is cer- m an in- ur very of your refully. of Eco- Lich de- debate uestion. he pro- Ins that II. 1t. We ~*sed the under- te well. ion and ire; and osure to nce you e in the , in the PAGENO="0237" IJR]3AN D]3~V]~LO1~MENT ~23 flEMOW~T~ATWN- ~]TIJ~S mortgage banking busine~s, ~nan~ ventional commercial jen~ing~ tha~ Mr. WIDNALTJ. I underst~and. Would you have any c9~ime~it ~ Mr. NORTIIUI'. I am jus1~ wónde~ü of getting the downtown ~re~ ren~ tunities in this section, I~ that w~ Mr. WInN~n~. Yes. ~ Mr. NORTHEP. I think ~ve woui~ have firsthand experience ~witii it. [~ are making some progress in this 4~ ship is making an effort t~ get in ~1 in recognition. of the fact tha~t rel~ centers is one of the most pressing ~p Mr. WIDNALL. What do you me Mr. NORTHUP. There h~s been i getting a building and be~ able to r makes it come up to proper sta d area and still come out with ren s the debt service and still be ldw e o or low-income people, caii~ oQdup effort to try and bring th~se two 1 difficult. Mr. WIDNALL. Is this the re r estimates? Mr. N( n$n pur ~` quirem tictibn ? Mr. Mr. comm Mr. GOODWIN. I that the threat of t for mec" e ade ;that have to take anot aware that there that are needed in c us are more active in the con- he modernization. orthup? -your problemis~he difficulties ~d and finding economic oppor- ron are referring to? have to admit that we have to as posed some problems but we ion Snow. I think our member- rnd try to find ways to do this tation in the downtown urban [ems we have facing us. posing problems? ilty, as near as we can tell, in bilitate it in the manner that s for, say, an urban renewal t are economic and will meet that moderate-income people, structures. It has been the ~s together that has proved so of your estimates, or FHA. ~stimates of cost or FHA re- [n le] it at :t] re4 re )~l b~ ~li~ ~rc ig~ th in~ lt PAGENO="0238" 82r4 that be av~ih&T4~. But if it was-if the i4ne ~was c1~~Iy drawn n area, as I ~37, I think we would have j~ tthe another look. Mr. WxiicALL. That is all.. Thank ~u. ~ ~ ` Mr Noimitii May I coi~iiment on tht adthtionally, Mr idnall I would like to say in reviewing this~p~ of legislation ora y type of legislatkrn that comes up, we try to~ draw parallels betw~e it and existing programs that are on the books. It appeared to us thi would have a parallel with the nuising home program which FRA p~esently operates Under that pro~am, certai~i equipment is permitt d to be financed in~ th~ mortgage We have assumed, m re'viewing th~~ h~gislation, that it w uld in chide a ~tr1ictüre p1ii~ this ~paralle1 ty~ of equipment \vhic `would be needed; iand it was our ~ ~ssumptioi~Hthis is the basis on hich I talked ~ Washington eommitt~ ~roup~-that we were fi ancing this parallel type of strüetnre. ~ . Now, if t~he thrust is intended to be even more toward equip ent, we have not looked at it in that light. ~ Mr. Wh*~ALL. Are you currently financing some nursing ho es? ` Mr. No~thit~r. Yes. . S Mr. WmT&ALL. HOW many points do on charge? . ` Mr.NOR~HUP. Currently, I can't tell you. ~ ~ "Mr. OóbtWIN. A half to one, gener ily speaking, among t e mort- gage bank~rs., I ~m not speaking for other ienders. A half oint to onepoint;'ori ~ ` the nursing home or medic 1 ~enter. Mr. WthNALL. I had someone call m¾~ over the weekend abo t a mil- lion dollar"loai~i and they said they wei~e being charged 8 poin s. Mr. `GOODWIN. To get the loan ? I cannot conceive such a t]~iing. I never heard of that many points on a nursing home ora medic~1 clinic. That `is not' to say there may not be in~t~nces of `such charges. Mr. WIDNALL. Thank you. ` , ` Mr. Gào~ywIN. ` Bathcally, our memb4rs are placing these lo ns with eastern iu~festors-insuran~ companh~-I would say primari y-and I don't bel~teve I know of any instenc4s, even when things we e rock lug along jbretty well a year or two"a~g~hen'it would have be n above 2~ points, and if the eastern investor~ heard that there wer points higher thati that, I think th~ would bø extremely disturbed an would not even make the loan. Mr. WID~NALL. Thank you. Mr. BARRETT. Mrs. Sullivan? ` Mrs. StJWVAN. Thank you, `Mr. Ch~.irman. Mr. `Goodwin, when you argue `a~aãn~t making loans availabl for the building olf medical facilities or medical centers, you `say th t there are pientytof' conventional loans avai1~ble. Wouid'you sugge t we do away witliiali FHA-insured loans ? Ajfter all, using your `sam ` reason- jugs, ther~ is plenty of conventionaI~ money for FIIA ho e loans. The point' is, `conventional loans require much larger downp yrnents ~nd short~r maturities. Mr. GOODWIN. No. I would for this purpose. Mrs. SU~EJLIVAN. Can you tell me in your own experience hqw many requests for funds for medical centers: your firm, whom you r~present, has turned down? PAGENO="0239" DEMONSTRATION ~ITIES ) Mr. `GOODWIN. That is ~ little `d: would say very few, if a~iy, whe probably 75 or 80 percent ~f the v~ ous reasons why loans of t~iis sort often the doctors that are tog~ethe often they ares willing to ~o On p between 75 and 80 percent~ and 10 they want the extra financ~ng~ per. a lower rate of interest, they, o~ cou a local commercial bank, ~n *hic~ But I would say that whi'e v~ h~ someone else wanted it m~re, wou exactly like the doctors w~nt~d it~ were not able to plaice a loanwhen ~ Mrs. SULLIVAN. Have yo~i fmanc Mr. GOODWIN. Yes ; a g~ea~ ma which is not, of course, a ~ig city south of Los Angeies, but rur~nin~ a great many running front $50,00( Mrs. SULLIVAN. Have y~u 1~Inan going into this area? Mr. GOODWIN. Yes. / Mrs. SULLIVAN. I woulc~ lil~e to Mr. Chairman, a list ofth~se~e h well as private groups of 4octprs, been turned down, and w~ th~y w Mr. GoODWIN. I *ill be ~rery gla trouble finding those that ,~ere turi Mr. BARRETh That may be don (The infoi~ination reques~ed folli M~R~rG~GJ~ ]~ URBAN DEVELOPMENT 825 t to say with accuracy. But I e fit~anoing would not exceed f the project. There are van- little easier to finance. Quite he~ proj'~ct sign leases. Quite ~l notes to raise the difference ~ent. When that prevails and by offering the extra security, ecornethe natural borrower of ~ we often lose the financing. )st a number of loans because ~n more, or would do it more iow of ~io instances where we ugl3t it ~rasa legitimate credit. ~iiy of them? Up in the area where I live, cover ~il southern California, $2.5 millk~n, $3 million, and 0 $2,5;~r $3 million. ny nonprofit groups who are it * him submit for the record, ancød, including nonprofit as ~ll as a list of thOse that have urned down. do that. I am going to have own. hout objection. So ordered. 1r,U~wart GQodwln, was testifying iat lie ~uhmit ~ list of loans made We are pleased to enclose that mit ~ list of loans which they have ritten me as follows: )~titors such as banks, savings and re they were in a position to give ~ can ~ecail ~ situation where we La, we may not have always made 14 be because some other investor a petter deal." ith t1~is portion of your request. on and to the committee in consid~ *de further information we will be D if e L~ ii ~r~s el ~ 14 I? Le t~i to 4 ~ :~ A: EtS AsSoCIATIoN OF AMEEIiA, ~ Wc&shingt~*, D.C., April 4, 1966. fli I] Hon. LEONOR K. SULLIVAN, House Comnmitte~ on Raaki~ ~nd Qurr~ Washington, D.C. ~ Dn~&n Mas. SULLIVAN : When ~ur ~resi on the current housing leglslati~.n ~ou w by his firm to group practice m~dlca1 fa list for the record. I You asked additionally that 1V~r. ~oodw rejected. On this subject Mr. ~oo4win: "While we have lost various a~cotjnts t~ lQan companies, and to mortgage bunker. them mOre money, neither I no~ ni~r `ass refused a medical center loan. In othei the loan when it was applied fo , bi~tt th~ came up with what the borrowe co~iside For this reason ~e are not ab e t~ cOin We hope this Information will be ]~ielp~ ering the merits of H.R. 92~6. f we can pleased to do so. Sincerely, `a sni ruE at~ rc~1~( bo roy GRAHAM T. NoRTHUP. PAGENO="0240" Date of loan PERCY H. GOODWIN Co. Borrower Report on medical center accounts Original amount Rate of interest (per- cent) Term of loan (years) Existing loans: Hillcrest North Medical Center (Gynob) La Mesa Medical Arts Bldg.1 Fallbrook Medical Center E. M. Hayes, 661-Palm Aye, imperiaJ Beach Robert F. Bruce, West Park, El Qajon Carlsbad Medical/Dental Center Carlsbad Harold McCarthy, 1991 Sunset C'liffsBivd Schrum & Bond, La Jolla Loans committed: De Anza View Medical Center Processing applications: Chula Vista Doctors Park . -n.. ~ Investor Appraised value July 15, 1965 Oct. 1,1965 Mar. 1,1966 Aug~ 17, 1960 July 31,1963 Dec. 8,1958 June 5, 1967 Aug. 1,1958 Buildings Land J3sctilmg on: Paramount (Los Angeles) $1, 550, 000 385,000 135, 000 80~ 25, 22, ~3 i~000 2~000 1, 10~ 000 750, 000 150~0~ 300k 000 255, 000 EQuitable National Life~ ~ ~ Comieetlent ~Mutu~1 Equitable Connecticut Mutual ~ _____ do National Life 6 5y~ 53% 6 53% 6 6Y~ 6Y~ 63~-63'~ 43~ 20 12 15 20 15 15 15 20 20 20 20 20 15 15 15 15 15 02 $700,000 ~ 125, 000 25, 000 16~ 500 24,000 ~ 8,750 ~-3 8,000 ~ 11,250 02 310, 000 ___________- ____________ $2,100,000 600;000 180, 000 54, 0~MJ 62,825 44, 000 24, 000 57,350 1,500,000 1, 100, OQO Loans paid in full: Benbough Investment Co., 6th and Hawthorne Dó~58~Figtteredo, Barca, 7603 Oirard Avenue, La ~olla. Draper, E. ;r., 4002 Park Blvd Fifir, Inc., 5th and Fir Sts Kromschroeder, John G., 218-20 Palm, Imperial Beach. Latimer, Jonathan W., 850 Prospect, La ~olla Ledford, Roy M., 4th and Palm Sts., S. D Owen, Lincoln L., 344.11. Vista Way, Vista Lost to competitors: La Jolla Medical ~ -_ - - Mar. 19, 1951 Sept. 21, 1953 $1,400,000 475, 000 155, 000 ~7, SOd 38, 825 35, 250 16, 000 46,100 1, 190,000 Life & ~ Massachusetts Mutual or Life & ? Casualty. Mar. 27,1961 Mar. 1, 1951 June 18 1954 60,000 ~0,000 . 6~ 4~ Connecticut Mutual ~ ~ Feb. 15, 1954 Dec. 29,1954 Feb. 2~,1954 14, 500 65, 000 27, 500 14,~00 300, 000 Connecticut Mutual ~ 5 6 (~) (3) 10 10 10 I Term set at borrower's request. 2 Long-term loan made in 1963 by Southorn Cailfornia Mortgage in the amount of 400, 000 ~82, 000 99~OO- 100, 000 97, 000 30, 000 154, 500 54, 000 28,000 650, 000 20 -___- ~ ~ 457,000 - 72~00C 68, 000 72, 000 23, 800 93, 000 .35, 000 17, 100 100, 000 _____ ~ 125, 000 27,000 32, 000 2~,000 6, 200 61, 500 19, 000 10, 900 550, 000 $475,000. Could not match Metropolitan loan of $1,100,000. 3 Date of loan, 1960. PAGENO="0241" Mr. N Mrs. ~ this 0 Lizatio comm about 1 cO-878---~L6--pt. PAGENO="0242" 828 DEMONS~RATIbN CI~IES AND b~EU3AN 1!~EVE1LOPMENT be constrnc1~ive suggestions ~or making ~t work bBtte~r. In cons this pa~ict~1a~r matter in oi~ cc~rnrnitl4~, comparing the existii grams and! this dethonstr~ion progr4th, our committees ha ~ that they v~ou1d have us b~pose th~ dJ~ñionstr~tion city conc~ ~ not change your position with respect t~urban renewal. I would like to have you view our c4rnm~nts on this demon~ cities program as a commei~t on this approach as we have trie it forth in our statement for you, and riot as a total approach i ing the cities hanging completely on their own with no assistan the Federal Government. ; Mrs. SiJ~LIVAN. For years those of bs who have sat in the~ ing hearh~s-year after year after y4~r-hav~ had groups c fore us wh~ were all for ev~ything iij the bil1~ that would he particular ~itiiation or problem, but w$n it cakne to doing soi for someböi~r ~ that ~ra~ just not 4~eptabl~ at all. We a that in every housing bill We have ev~r writteti in this subcoi and in this~ full committee, we have td look at the entire pict just at th~ ~section or sections which each group or industry ~ particuiarl37 interested in. For many years the homebuilders re~fñsed to recognize the f in additior~ to helpir~g them on mortg4ge funds, we also want everything we possibly cot~ld, and fel~ that we should do, for who were i~aving a difficult time pureh~sing a. home. A majo for our hø~sing legislation,~. from the I~uiider's standpoint, wa enable fantilies which could afford it to buy their own hoir readily available financing. ~ .. The builders were not in ~ position t~do anything for the .fel had a haj~ time to get the 4ownp~m6nt, and who. could not t thing in ~e price bracket that he felt~ he could afl!ord, and tI~ not very helpful to us in our efforts to find solutions. Finall years ago, the builders began to see th~ light a bit and began t~ that there were other sections of the till that they. would ha interested ~n, and become enthusiastiq. about, in seeing to it~ benefis of wood housing cou~Id go to al1~ classes ana types of pe they ha~re l~een very cooperative on this~lately What :i: ~uggest is that ~ou give a 1~ittle dee~er thought to these issue~, because if we want the cities renewed and rebuilt, think any city can do it without som&kind of financial help are trying~to do in this demonstration~citie!=s program is to try all of these factors together under one, shall we say, head, so t1 be coordinated in a more orderly way. One,prQgram should mesh with the cither. That is all Mr. Chairmap~. ~. Mr. GOonwn~. Mrs. Sullivan, we d~ unforti~inately judge t the light c~f our own ezp~rience. Ag~in, in csur own commu did a $47 Million downtownproject tIy raising an amount of 000 from the business comn~iunity in 6 ~veeks ar~d, in effect, goir with a the rest of it-giving the Counbil sufficient courage to witI~ the rest of the borrowing. I perh~s am a little more concerned about, what the Fede: ernment, therefore, would do in other areas that would take t and the ithtiative away from people in the various commun Ldering ig pro- ~e said pt, but tration I to set o leav- ~e from e hous- me be- [p their lething [1 know ~imittee ire, not ~uld be ~ct that d to do people reason just to es with ow who uy any- ey were v, a few realize ~e to be that the ple and ~ome of [do not All we to bring at it can ~dngs in trity, we $1,600,- g ahead ~o ahead ~al Gov- ie desire ties, be- PAGENO="0243" cause if I t to jusi C ~Lil~ is our too far in a i first instance. feel could be w Mrs. ~ bility city. be acc many] Mr. Mr. 1 - interest ~he FHA Mr. C~ is true, I commenting on, tJ the man who can only pay F The un~. that it was rely on wh~ wasf ne should pro ~. market has Leerned and thai oan~ Lat are no~ the rate I count c 2 or 3 y worked count has of 5 or 6 man's ec~ to r Mr. 11iwo. ministration in~ur Mr. GOODWIN. ~ They make them a FNMA. Mr~ FINO. ] gives more p~ you say ~L the intimate L3wledge t. ~~LoPM~T 829 cneerned and so we done a lot on that woui( stifle ~t deal of resp a dernonstn .e, or can MONST1~tA~TON bIT~IDS ners Home Ad- ?t insure selling housing ~vith PAGENO="0244" presi- sao ~ .. OWS~A~TION CITIES A]~D ~LThBAN 4~VELOPMENT . Mr. 000IYWEN. It could. I don't s4i~ they i~ou1d. Of cou se, they could get the knowledge on this, or o1~tain the knowledge I , in cases, they took the trouble and were fc4tmiate enough to do it. Mr Fn~o Ott page 10 of your testi*iony, you express your concern over the broad powers granted to the Secretary of HUD by 111. . 12946. Let me ask you : Are you aware that the bill goes even furthe in that the definition of a standard m~tropolitan area would be left u to the Secretaryof HTJD ? Mr. GOODWIN. Yes, sir. Mr. FIN~. Do you have ~uiy further c$omment~ on that? Mr. GOOI1~WIN. No, not beyond that. I was aware of that in th~statementsfr~e made. Mr. FINO. That is all, Mr. Chairman~ Mr. NORTIJUP. It would only mean, ~as we view that, he cou d, if he was granted the authority of that bill, Md that authority to ex end the metropolitan areas according to his own determination of wh re they should lie, that he is virually then in control of all lands if th y are in any particular metropolitan center. T~ be eligible for these p ograms, as we intei~pret it, one must have a met~opolitax~wide program nd this program T~ust also be executed in a nifanner which satisfies t e Secre- tary, and ~t does say in the legislwtio~i that ai~y land ~ use wh ch is oi~ such sigiliticance that it might affect ~nything in that metropolitan- wide program would have to be accept4~le to hhn. So, it appears, and truthfully, you h~ve to judge this by app arance, it appears that this would give him cdntrol over land develop ent on the federally insured loan programs. l~ederal land-grant prog ams, or conventional loan programs. This is~the basis of the conce of all groups as to just how extensive is supervision of all land, and hether there would be any room for private cjevelopers such as those who are building n~w towns that we hear of. qould they actually go a ead and utilize their own initiative and their ofwu Jesir~s under this p ogram? We think that it is desirable that t~his flexibility remain, hat this is the free enterprise system, and ma~ny of oi~ir good ideas c me out ofthese khids of efforts. Mr. BAniu~r. Time has expired, Mr~oodwin. We certa~inly appreciate you and y~ur associates coming ere and giving us a very. constructive statement. Mr. GoODwIN. Thank you. We appreciate the opportunity. Mr. BAi~irnrr. Our next witness wilhlbe.Mr. Isadore Oandeu dent of C~ndeub, Fleissig & Associat4s, Newark, N.J. Do.you have any associates with youf? Mr. `O~uirnii. No, sir. Mr. BAitRFYrP. We certainly want ~fou to f~el at home, You have a great admirer here, ~y colleague, Mr. Wid all, has spoken very highly of your capabilitie$ and your organization. He will be here shortly. Mr. CANDETJB. Thank you, Mr. Chah~man. Mr. BARRIcVr. We would like you to complete your statement if you wish, and maybe we could ask you so~ne questions at the enc~ of your testimony; PAGENO="0245" DEMONSTEATION CITIES DEVELOPMENT bo ioods, and sin of the good life in America this time we have been co through public housing, t~u nent, code enf [amilton, ( were so subs antia. ~ories outs ~ of cities for ~ renewal pro- eded, auct net oosts. net cost of many communities ion prevails in ii PAGENO="0246" 832 DE~1\4ONSTRATI0N CITIES AND tURBAN DEVELOPMENT of our o1d~r urban~ centers. The need is so great that even existing level of Federal financial aid ~t is not possible to real schedule a total program of neighboithood revitalization in these communities. OTW~ ELEMENT~ NEEDED The limitation of funds has had oth~ conse4uences for the program ~c4'~hich ~houhl bi~ ~ec,ognized.j~ Some ~f these are as: 1. "ProjectitiI'..~-Projeets designec~ around limitations of sometimes too limited ~to rañically alt~ the characteristics of borhood. ~ ~. Up~qrading of coimmwtity fa~ilit~es.-Deflciencies in cor facilities are commonly en~ountered hr neighborhoods in poc tion. The correction of these deflcier~cies to give proper bal tween the older urban neighborhood~ and the newer ones c~ properly 4~arried out except throu~r comprehensive neigh treatmc~jt ~ programs of the type vi~ualized by the Demor Citie,~ Aet~ ~ ` . I ~ 3. Soc~a~ action.-Social programs 4f family education, cor involvemetit, motivation for home improvement and other c~ can readily be made part of compr~hensive renewal progr entire ~ nèi~hborhoods, while they are. generally difficult to in small p~ojeet areas. In projects o~ the first type such as ~ Side pro)~t in New York City, the Arbor Hill project in N.Y., the Opportunity Park project ~n Akron, Ohio, and th velt SchoOl project in Toledo, Ohio, ~there . th~e frequently a sochd dividend~ from the active inv~Ivement of many con minded organizations, and effective i4oIvemei~t of the resider planning ~xU the project. The empha~is ô~i ~ c~4mprehensive t: will lead tD moresueh invOlvement an~I participation. Also, areas of the type mentioned above, it j~ possible to provide fc variety oçf~ housing types for famili~s~ of all thcome groups, clearly a desirable goal. . ~ ~ 4. Coi~tinuity and ounvuiatii'e imp~ct.-Most renewal pro designed for inunediate action with the project to be complete a 2- to 3-year period. Programs of 1bng~r duration are nee~ mitting c~inii~usstaff op~rations th~t would build up good with own~rs and tenants and pern~it~ iinprôv~nients of a nature to ~e carned out o'~er an exte~ed peri~od of tithe for neighborb~ood. ~ I Theoret~icai1y, some of this conti4uity ca~i be achieved existing p~ocedures of the general neighborhood renewal plai this can $ of great value in some insthnces, the need to detail ual applications for projects usually results in a serious lo~ mentum and discourages local inter st. The experience of with G-NRP areas has generally pro luced problems for th~ and the Urban Renewal Administrat [on. EMPHASIS ON EXPERTh I strongiy endorse the "demonsti rtion" aspects of the need experimentation in releasing t ~e potential forces for provement of the people living in our )ider neighborhoods. rj require ie~s rigid conformance to fixed standards, less defini ~ith the stically Enost of renewal !ollows: ~~ost are ~ neigh- imunity r condi- ince be- nnot be borhood stration imunity )jectives ams for initiate he West Albany, ~ Roose- ditional rnunity- ts in the ~eatment fl larger r a wide which is ects are ci within led, per~ relations gradual ~n entire through . While individ- 3 of mo- working ~ locality ENTAL APPROACH Lct. We self-im- hey may tive con- _________________ 1 PAGENO="0247" DEMONSTRATION CI~IES ~ URBAN DEVELOPMENT 833 trols over land use, and a~ higher ~ complete structural rclia1~ilitatio~. experimentation we may ~cl~ve ~ to be employed in generat~in~ self FE some of the population tI~at j~res~ ofitself. . ROLZ 013' TH~ FE] . Under the proposed l~gis~atio ordinator twill be an esse~ti~l fo Federal functions that will `be ii Because of his impo~ta~ace~ it consideration be given to ~ specia the Government to have a~ su~llcie viduals available f&r `this f~inotion 000RDINATION ` WIT~I o~rHE: The Demonstration Cities 4ot will broaden and extend ~he deg blighted neighborhoods a*d `~ium supplement to, and not a r~ph~cem If; in the process of getting starte from the older on-goixrg ~ro~ra~ since that program has b~iilt up years of trials and tribuM~ior~s. promise the seric~us effort~ ` o~ m renewal agencies. in seciirh~g publi their projects. . ` `I, therefore, urge that ~pp~opr funds will be made avai~vb~e fo Demonstration `Cities Act~. ~CXT~ES TO' I strongly ` endorse t~h~ 4de~ th~ diverse size and ty~pe~,iu o$~r to ence. under the act. How$~ér~ as ~ in, every city that has exte~isi~e bi too, have the right to sec*e t~he ~ effect would be to put a da~nper on t action, and efforts at comp~el~nsi~ e posed in the act. I `say t1~ds beca newal, open space funds, 7O~ pl~nni has shown that once such ~rograi .s back on moving on project~ with l~ ç remote chance that Federal funds n a However, there is still a ~urther In many cities, local citizer~s a~id o ~ opportunity to deal with sc~me of t , prehensive fashion. In these citi s, selected group of demonstration c~t them to become so should b~ se1~ for ~i attached"to the possibilities of fl the other `hand, `out ` of this ~ uudth~standing of the means ation and pride on the part of is poorly equipped to take care COO1~fl~ATOR newly provided Federal co- L puiin~ together the vai~ious d in' this program. pectfully ` suggested . that early ning"program that will permit argo flumber' of qualified mdi- A~ RENEWAL PROGRAMS e valuable to the extent that it which we~ can cope with our S suth, it must be viewed as a , the present renewal program.. as the ef1~ect of draining funds, ill, in `~f1~ect, be self-defeating resent momentum after many. ~ drain' will also sharply com- councils, citizen groups, and ~rstanding *aiid.support behind teps be' takeii so that suitable irnziaediate initiation of the. tii initial group . of cities be. of d~ ` the `broadest possible experi- n S this act is approved, citizens 1t~ I areas will assume that they, a~ ~age~ of this act. If not, the S ype of experimentation, social ne ghborhood revitalization pro- e ,` ur experience with urban re- gi ants and other grant programs a~ ~ announced, most cities hold 1 ~ mds for which there is even a , b available. as n of even greater importance. ia ; have waited for years for an r ~najor problem areas in a com- if ~ they are not in the initially es, clear-cut criteria permitting to permit the community leaders I' )él: l~ C I re r~ l~ t~ t i e 1 y S cJ i~ e tl~ IGIBL]~3. j . .. . ~ PAGENO="0248" 834 DEMONSTRATION CITIES AND tIRBAN DEVELOPMENT ment aiiid community d ub, for: a very sp1cPdi~ ment. It is veryconstructive and very infor rn~tive. I do not have any questions to ask ybu but I do want to tha for your firk statement ~n support of 1~he legislation. Your s background and years of experience adkis a great deal to help* get accepted by both sides. Mr. CANDEUB. Thank you very .much~Mr. Ohairman. Mr. BARRETT. Mr. Widnall. Mr. WIDNALL. Thank yoU, Mr. Chair~nan. Mr. Candeub, thank you for a very c$~nstruct1ve statement ai sorry I wasicaliotl out to the telephone 4t the tiu~e. you were intr I want to comment on your backgroui~d and ~perience and that you bring much to these hearings. On the question of rehabilitation, do~ you think enough thou, enough effort has been given to this pI~ase of the activity? Mr. CANDEIJB. Well, there have he~n many attempts mad past to introduce rehabi1it~tion, first ~ii the extension of the of redevelopment to urban renewal, o course, in 1954, and, s in the directives given to the FIIA, a d to the provisions to assistance ~o individual homeowners,~ and thirdly, in the ii emphasis in the workable programs or further housing co code ellfor~ement activities. This, of tourse, is the background f to rehabilitation as a major concept ii themselves~ . . However, the experience with rehaibilitatioh in the past, has not been Very good and despite the directives coming out c ington, the actual working experience ~t the local level has be frustrating. Possibly, with the increase in social ~ through the availability of a Federal better bas4 to work from in the eomit~ of tfunds, l~verage of staff availabilit turn out-we hope effectiveness-of Mr. W~DNALL. From your own expi tration in connection with using the e~ and modernization of homes ? Mr. CA~DEUB. Well, we have ~ recon~iended rehabilitation renewal projects and our experience i~ that we have to then feasibility of rehabilitation to a degr4e that Would warrant t to go along with us in the locality arid give ii~ their approv In virtu~lly every instance that I ca4 recafl, the initial FHA has been negative, and this means that ~n many cases, you are ci discouraged from proposing rehabitit~ttion because it does m extensive meetings and review and, ili large measures, even rehabilitation proposal is accepted ahd incorporated in the project, there is a real quest~ion as to whether or not it will be when the individual homeowners go to the FHA for impi funds. The experience has really bee~i quite discouraging altl to move ah~ad on their goals of improv ment. Mr. BAR1~ETT. Thank you, Mr. Cand Bvelop- I state~ nk you )lendid his bill ~d I am oduced. he fact ~ht and in the concept ~condly, furnish ~creased Les, and r the en~iphasis given jI ft terms of helping peo . the act )le help ~rankly, ~ Wash- 1 rather .nterest in this act, and coordh~ator, there mi~ iuhiti~s i~i terms of the ~ ~t1:d th~ effectiveness a he coordinator. ~rience, what has been dsting law in the rehal possibly ~ht be a Leverage S it may he frus- ilitation in many how the ie FHA reaction ~ectiveiy an quite ~fter the renewal effective ovement ough we PAGENO="0249" DEMONSTRATI~N CITI S A~D URBAN DEVELOPMENT 835 trying and keep ~nc~rpo in rehabilitation in many of these t has been encour- ~iinistrator? cities, s many ~, they ~iink that ack to some degree. i estimate would be necessary to PAGENO="0250" 836 DEM~N~rRAPIO1~T~ ct~L't~ AND ~t1 ~AN DE~ELO1~M~NT I don't think we can move at an unlimil1ecl rate and I think whe have situations such as the ci1~y of Akron-this is their communi newal prógt'a~m, virtually the entire part~bf the city here needs ment as you can see on this cover [indicating] . It is idle to talk, a prograrn-~ifl definitive terms, in `terms ~f a give~ dollar amoun I have refèrr~d to the $160 million ` `rógram for Akron th have suggesttd here, but I am not even . Oi~pleteiy sure `that thi realistic figu~3. I think what we should e~talkii~g about is begi on a `total pro~rarn as this act does,in ten s of pr~iding the full ure of p~w~r~' and the strong objectives f. ~flnedin~the act, `and th' us see wht~re t~iis cati take us~w~r a period ~r~rs ~luring which w have some e~erimentation. ~ ` ~` Mr. WID~i~i~. `From your own experi~nce, what would you the percentag~ of money that should be devoted to physical recon tion as against social reconstruction ? Mr. CANDWB. Here, again, the experience to date would be p which to base it because most of the f$rnds ha~e been for ph reconstriic~tiot. I f~e1 that the efforts n~ " ade, serious efforts in reconstructioi~ have `been terribly limited~and. I a4i not' sure that this need be f~Oni i~newal funds or even ffom'the ~emonstration Act funds. ~ ~ J I think oth~r funds should be better tiM into this-the antipc funds, education funds-other social ser~4ices. To date there har relatively litt1~ of this tied in. Mr. WIDNALL. That is all. Mr. BAmtm. Mrs. Sullivan ? , Mrs. SULLrVAN. I really do not have ~4r~y question's, Mr. Chai but I want tc congratulate tI~ witness 4his intelligent present I admire yo~Mr Candeu~, f~i~ trying to qind Out how you can do thing in help~ng to meet a problem inst~d of jttst complainin~ what cannot be done. : ` ~ ~ Mr. CANDWii. Thank you very much. Mrs. SULLtVAN. I think your testimon extremely helpful. ` `1 hank you. ~ ~ Mr. CANDETJB. Thank you. Mr. BARRETT. Mr. Fino? Mr. FIN0. On page 4 you `suggest that ~ve enter upon a special, in~ program ;to provide a sufficiently la*ge number of qualified viduals availsble to serve as Federal c6t4~dinators. Are you im~ there is now ~ shortage of trained personn~l? Mr. CANIM~tIB. Y~S, Sir. Mr. FINO. ~Is it not a fact, that the bes4trai'ning that one can r ceive is a lifetime &f experience with city gov~rhthent and municipal Drob- lems ? Mr. CANn~rrm. Yes. However~ I am ~$aking, really, with r to problems that we have been facing i~& the field in the last d where~ for instance, in the work of the l4cal level we find `some sentatives of the tTRA that we have to~ `work with are young, perienced; a~d really, in many cases, iac~dng in training. This has b~en a perennial problem ar4 ~he point that I am m is, if we exp~ct to get. aii~v i~al partne~hip from the Federal working parlinership, not just a matter o funds-a-but a working e we y re- reat- bout t we is a fling icas- n let will ay is true- or on sical ocial ~ll of )ities rerty been man, tion. ome~ over rain- mdi- lying ~ard cade, epre- inex- king lovel, part- PAGENO="0251" DEMONSTRATION CIflES nership to pull th~se pro~raths t an inexperienced m~n i~to~the fiel That chap would be a b~j.rc1en t ~tx~ pe~rforrn responsibly. ~SThat I ~o1e given a rathei~ high ~thig ft ernment who do hav~ experience that they. can really be h~1pfu1 i: appointments will `be ma4e, `but t be1~ choice, tor. they are of a coordinator.. still feel that mor of people to take ~Tmably, the o~ to know 1 Mr. FIN0. eral coordinat go~rernments t administratio ticins. Would Mr. CANDEUB to be a specifica how a ~D URBAN DEVELOPMENT er, it can't ~óine from sez~ding ot a help. Tie will not be ~bie d like to ~ this coordinator s oftakingp~ople out of g~v~ iving them special training so field. B~ca~se, otherwise, the id of i~esults that we want will r a year- ;e at a re~ ~yors ~vhc iey would I iey would ~ choice ~~he ~.l level al level will know ~ the city that well. ~s to be able to speak efTe ~essed that these s S commiss~ ir, no mati will beco 837 a 1 1 th he h'~ve sible lev Mr. regarcL~ _ city in questi would know ., ~ Washinr~ ~ that had nec . . ~ from scrate] .-~- this comr the say because L~ he has to PAGENO="0252" I 838 D~tONSTRATION CITIES AND ~TJRBAN DEVELOPMENT Mr. Fiwo. Are you satisfied with the language in the bil 12341, or page 8, where we talk about t~ Office of the Federal nator ? It says- i This perso~i ~lia11 per1~orm such functions las the Sek~retary from tim shall presei~ije with respect to helping to ac~iieve the jnaxirnum effecti~ nation. ~ I Mr. CANbEUB. As long as he operate~ by rules handed down, suming that the Secretary will hand clown effective rules and tions. My concern is that he not operate sbnply on his own as a c unto him~if. Because that would make him an impossible p work with. He is needed. The role is needed, as a coordinatc assistant, ~ a partner of the local gov4rnment from the Fedei ernment inthe field to help with the p4~oblems of the related a Mr.FINo. What we are talking about~ is cutting redtape ~ Mr C4Nif~Eui~. ~Right. ~ ~ Mr. FIN~. Would an expediter, a 1~ederal expediter, do tl at job? The feartliat I have is that a coordin*or, as outlined in this bill, has more power than he should have and the Secretary of the Dep: trtment is telling him exactly what to do and what not to do. And I think he may be stepping on the toes of beau governments. Mr. CANDEUB. I think this is a danger, and I think this is a~ danger with regard to almost anyone that th~ Federal Goveriiment ~ends in the field. There are occasions when ofii~ials overstep their `bou~ds and tell the city what tc do instead of dis4~ussing with the city ~hat the city wants t~ do. I However~ the funotion is an import$nt function. We need it. So that I thinit danger should be recognize~1 and some provision `s ould be made to coi~trol the coordinator but I believe that the functio of co- ordinatoris animportant function. Mr. FINO. Would you say the control should be from a lo al gov- ernment tosome extent? Mr. OANDBUB. Let me put it this way. I think the coor~linator should be a partner with the local govetnment and if the local govern- mont finds that the coordinator is oversl~pping J~iis bounds, they should have some ~neans of appeal and reques1~ possibly tohave him c~xanged, because I think his role should be a help4r and nOt a dictator. Mr. FINO~. Thank you. I Mr. BARi~ETT. Thank you, Mr. Oand4~uh. All time has expi ed we are certainly grateful for your comiiig down. Mr. CAI~4EUB. Thank you very much. Mr. BARRETT. Your testimony is among the finest of the w triesses we have heard. Mr. OANDEUB. Thank you. Mr. BAEi~ETT. The committee will ~tand in recess until 10 o'clock tomorrow ntorning. (Whereupon, at 11:05 a.m., the a b4ommi;ttee adjourned t( recon- vefie `at 10 aIm., Thursday, March 17, 19t~6.) 1, H.R. Coordi- to time e coordi- and as- regula- ~ar and ~rson to r, as an al Gov- gencies. and PAGENO="0253" k{OVSE StJBCOMM is mon ennsylvania, PAGENO="0254" I 840 * DEi~ONSTRATION C~PIES AND TEBAN DEVELOPMENT are not just thinking of scientific bre~kthroughs but also ec nornic, psychologi~al, and other grt~at things o~ this nature. In this connection, I think the Carnegie Institute of Techn logy is particularly well suiled to administer such an institute, because, among other things, it has the great, well-1mow~i school of business adm nistra- tio'n, and it~ i~ also one of the leading o~mputer centers in the ~ation. I think that the application of the pjroblems of a pa~ticular city of mass trans~ortation c&n be worked i4o the computer systeu and a more accurft~te answer obtained therefr$m. For that ~reasort, I think, Mr. Chairm$an, you will find that t. e testi- mony of Th~. Romualdi and Dr. Stelsoniwill be particularly mt resting and helpful to this committee, and I Ibok forward eagerly m self to hearing their testimony. Thank you, Mr. Chairman. Mr. BARnrn~r. * Thank you, Mr. Moorhead. Dr. Rorr~ualdi, we are, of course, d~esirous of making you feel at home here this morning as well as y~ir associate, Dr. SteAs n. We want you t4~ choose as to how you want~to make your presentafon. If you feel th~t you would like to make it jn full, without being as :ed any questions i~ntil you complete your sifatement, we will cert~ inly be willing to go along with you. We want you to have the freedom artd give you the comfort that we try to gii~' ~very other witness, and we ~will abide by whatever Lecision you make along this line. Dr. ROMUAWT. We have a prepared statement, and it r ight be convenient if we read it. If you have any questions, or if anyone desires an3~ clarification while we are r~ading it, please do not aesitate to interr~t and we can discuss it. Itfis not necessary to for] ally go through it~ I . If thei~e~are no other questions at t1~e moment, perhaps thi can be started off by reading the pt~pared statement as it appears. ~ Mr. BAiuu~rr. Please proeced. STATFIM~T O~ DR. ~J'AMES P~ RO*UALDI, DIRECTOR, .~ ND DR. THOMAS ~ STELSON, CODIRJ~CTOR,~TRANSPORTATiON RE EARCH INSPItTrTE, OABRDGIE INSTITUTZ o~' TECHNOLOGY Dr. Ro~u~tLm. We appreciate this ~pportunity to express o .r views on the prOposedamendmei~ts to the M~tropoiitan Demonstrat ons ~and Urban D~4velopment Acts. In parti3~u lar, we wish to corn nent ~ on amendrne~ No. 4, : Expedited prograi4 for research, developii ent, and demônstra~ións of new systems of urba~i development. Transportation-the rno~ement of ~ men and materials-i a vital function df all urban centers. It might appear redundant * o repeat this, but it deserves repetition. Fre~-fioWing movement in traffic ai~teries is a sign of urba health. Congestion and strangulation in these arteries is a prelude o death. Even the most casual obserVer can pla nly see the critical con itions of ill health ~uffered today izi many urb n centers due to. trails] ortation arteriosc1~rosis. Fu~therrnore, what once seemed to be * an obvious cure-th~ bonstructicni of i~iore and be ter highways, streets, a Ld park- ing facilities-is now obviously mad quate if not downright wrong. PAGENO="0255" DEMONSTRATION CITIES URBAN DEVELOPMENT 841 is not, Can It be planning a: o persons per peisons pour PAGENO="0256" 842 DEMONSTRATION CITIES AND URBAN DEVELOPMENT transit line running on exclusive right-o~-way can move 40,000 p per hour with ljttle or no ~to~age prthh~ The economic incen move to rapid mass transit is virtuallj' ~rresistible yet such is exasperatingly slow. I The sec~iid need-imaginative and Innovative research- carefully coupled with the planning, d~reiopment, and I emp demonstration of new transit systeths.~ . The serious need fo research and development is clearly evident. Studies of prop s~pension, guideway and control will all provide fruitful The economics of mass transit-and the conservation of urban are closely related to developments in propulsion and gu research. A good ra~pid mass transit system mu~t be clean and quiet. be attractiv~ and available when need4 It must penetrate th lation pocköts of the urban and suburban community and di passengers at a multitude . of conveni4nt locations. We don this yet. In short, it rEiust be skillfu]4Ey woven into the fabr ~ modern cit3~ with intelligent, comprehensive planning and re This then i~ the third need. . Demonstration projects provide the~ final step in translati knowledge in transportation systems ~ and technology into For better urban rapid transit, there ~must be cooperation an nization on the local level because each 1~ocal problem is unique. ning groupLs must have compethnt p4rsonnel and assistance design and ~ e~eeution of public proj4s. TJniversities will active impdrtant role in these devel4pments. Engineers trained to properly understand and ~pntrol such new and c systems, and universities provide the *ackbone of resources f training and research. Large expenditures of money will be required to attract a the necessary brainpower in transportatãon technology. We cannot emphasize too strongly hqw little research has be in rapid mass transit and.consequently~, of the danger of rushi premature construction. ~ . Transpoiiit systems are expensive. ~pending billions for systems would be tragic yetmany are ~ushing to support this of folly. the reason for this mistakefis obvious. A balloon plane canmbt take a man to the moon a~id everyone realizes th and different vehicle must be built to a~hieve a moon landing. On the ó~her hand, a horse and buggy will still move a man a city if he is willing to risk life and~lirnb, or better yet, pe always walk as they have for thousa~ds of years. Thus, th transport problem has a different chtaracter from a moon The problem is not one of feasibility, bi4 of optimization. The need for and payoit from well~planned research may greater in transportation, however, be4ause the results intima directly afF~ct such a large portion of &~r population. The urban transportation crisis is ajnational issue whose re will require substantial resources thaif only the Federal Gov can provide. Assistance in planning, b~search and the demo of new and better urban rapid transit must be substantial t nificant,. This program can be viewed essentially as the bre srsons ;ive to ;hange ust be iasize, more ilsion, esults. and- ~eway .t must popu- charge t have ic of a search. new ~eality. orga- Plan- in the lay an ust be )mplex r both d train ~n clone ag into bsoiete ~osition or air- a new hrough pie can urban anding. be even ely and ~oiutiofl ~rnment Btration ~ be sig- king of PAGENO="0257" LOPMENT 843 rLLIVAN. you ha~ iere will be I want in this lot we: obsen hat the pro r ransit sys- There PAGENO="0258" D1~MONSTRATION CITIES AND VRB4N DEVELOPMENT would be ~Seop1e risking the eonstructi~n of lines for profit. I been a long time since an urban transit system has made a pro fare box. We recognize now that the profit to the coinmum many times greater thaii the cost of * the transit system. T reveling in th~ amount of increased tèx inicome they are gett their sy~t~n. They are claiming the thing was paid for bef finishe~ ~Statethen$~ like this are b4iing made. They are with it. We haven't seen tha,t in thisicountry for quite some cept for a few systems hete and~the~-the local bus comi makes iit~ie~r. ~ ~ ~ . ~ ~ . . : Mrs. StTLLIVAN. This is the thing 1fha~t worries me. We 1~ it exists. ~ We talk about It, Other 4~ountries have it and h something about it. I realize you just cannot build a system portation that will give you the good~ fast, rapid transportat and baok i~n a certain area, without also taking into considei feeder iin~s hi order to expand it out ~ where itmust reach t] Dr. R0MUALDI. This then represen s another aspect of the With what we have now, without re ily adding any new te in fact ~without doing any major I iilding * Of ~ systems we to organi~e this terribly complex syst tn we have now, just b ing throttgh the most complicated c rnputer solution that imagine-it can be done-if we wer to attack the problem we would already increase its useful ess and therefore the ness of our mass transit syst~rns. * * ~ If everything were so carefully scheduled to meet the local which can be statistically predicted, we would have a bett now. ~ if the buses arrive at the airport ust in time for the opt of gettillg from the bus to the plane -if the transit system, and bused were effectively interrelai ~d, many of our proble disappea~. That is a thsk;that alon c~stitutes anenormou ture of research,. We use the wir Es "systems engineerin is the developing of the computer procedures and gettii peóp1e'k~iowing how to use thei~ to ajpply them to their own cities. This, in itself, is a formidable task. Mrs. SULLIVAN. Usually the risk involved is one factor has held it back. Dr. ROMUALDI. I, as an individual, would hesitate very n vesting my own money in experiment~l transit systems for an is suppoSed to make aprofit over an4 above capital expendit is too m~ich. Mrs. SULLIVAN. If it is the risk, ~then in your estimatio not `be done unless the Governmenl takes over a large p financin~. Dr. ROMUALDI. Yes ; I have also another fairly strong on this subject. I used the word "logjam" in here. We in a situation where this whole process of mass transit ha descending, continually deteriorating situation for a long ti this happens on an economic scale of such a magnitude, people's minds. Lines are abando~ied when, really, with imagina~tion and effort, it could be ~rofitmaking. We hai happen. This has been a problen~ since the Transportat 1958. 844 I I I I I ut it has it at the y can be ronto is ng from ~~it was elighted time cx- fly ~ that iow that we done of trans- on down ation the e people. problem. hnology, are able schedul- on could this way, ~tractive- demands r system mum use he trains us would exp~ndi- ,,, which g enough )articular iat really uch in in~ r city that re. This , it could ft of the viewpoint re sort of become a ie. When it poisons , bit more ~ seen ~this on Act of PAGENO="0259" DEMONSTRATION acro~ tion from~the problem, vast amount~ Roi~&u~&r~ni. Mrs. I hay But I that at 3ct would he tential market that es in the te? I w Jersey ~`oads PAGENO="0260" 846 DEMONSTRATION CITIES AND IBAN DEVELOPMENT unit for years. Some of , the best minds in Japan have bee~i con- *centrating on improving their transit sy~ms. ~ Ifyou t.ak~ all r search people in t1~ United States who have $~n working for all o r rail- roads, plu~ 4mr railroad associations, pius nuiversities and so n, you come upwith about 200 professionals. ~ ~ . In other words, our effort in the U4dted States is someth' g like between a third and a quarter of theLeffort that the Japan so are putting in~to this same kind of. activity. ~ One of t1~e first things we do when we want to find out ab ut im- provernents in transportati~i is to go t~other countries and se what they have done because they have b~i~utting a lot more imag'nation and intelligence to bear on the ~robiem. ~ ~ It is a neglected area in this countijy, I think in terms o feasi- bility, ther~ is .110 questioii but wh~t~ attractive, competitiv mass transit canbe built. It cert~Linly is nof~at all impossible. it ~ easily aphieved with ~omparative1y small effort, for example, in corn arison with aerospace problems~ ~ I . Mrs. ~DwTER. Is the Japanese railrc4d-~-4s that private ente prise? Dr. R0MUALDI. It is Government operated. Mrs. DywEn. The Japanese road system-what about the r road system? Dr. STELISON. It is far less adequate than ours. So conse uently they have had even greater pressure to~get their mass transit orking right. Because their highways cannot ~i*andle the passenger lo ds that our highways can. ~ ~ Mrs. * DW~ER. Are you of the opinio~ that many of our ra iroads, particularly in th~ East, would like to g~t rid of their commuter transit serviceS an4 jest ~lQ freight? Dr. SmrA~ That is my impression ;~y~s. Mrs. DrwpR.. Thank ~r~u very much. ~: ~ Mr. BAmu~rr. Doctor, in talking abo*it th~ rapid transit fro Japan to Yokohama, i: w~~s ~i those trains anti:they ar~, in many wa s, corn- parable to an airplane. But the foundations are very costly. While I was on ~rn, I ~aswônd~in~g if we ~repursuing the proper oncept of overland transportation~ or should ~re~be pursuing another eature, iindergtoui~d transportatiou ? What 4roii~1d be youreomrnent ` n this? \ Dr. ~S~soi~. Myi~oni~ient-aud I ~AouicNik~ to emphasfz that I have spei~ no great4inie studying ~this problem-this is ust an impression frOm~ ~ ~gen~'a~l backgroun4 of. knowledge, but my impres- s~ien~ is ~t1l:~t ~ transportatioli ~ systems probably do. not promise ~good .fltjrn~t~ ~oIution. Th~ reason for this is . as fol- lows : In an urban area for examp1~ in most city areas, he con- slruction costs otf a subway is of the~~order of $20 to $30 illion a mile. This. sa~n& masa t~nsit syste~v can be built in ope ~ ~ cut if we don't consider the damage to the ~structures there ; for . bout $2 to $3 mil]i*n a mile. I . ; In otb~ words, the expense ~of'coi~struction is about one- enth as much. Sd you pay one-tenth 1ess-~a$ ~. for the~same amount o money yell can g~ 10 times as much mileag4 in ~your system. Tha `s a big economic difference, a fa4~tor of 10. t Consequently, when you consider th~ three possibilities, on- rade or elevated, Qr Subways, there are certh~inly going to be-in he final PAGENO="0261" oie of PAGENO="0262" 848 DEMONSTRATION CITIES AND 1~TRBAN DEVELOPMENT people, whe~i they think of having a tz~nsit line come right t rough, next to their bedroom, they shiver in h*rror from the idea. S there is a general popular opinion ~ that fo$ces the separation of transit systems. They want to get them awayJ from where they live, ut iiot so far away they can't walk to it in the mrornin~. But this is one whole system, an interweaving of housing, b siness, and transportation, so they are connected in some logical jatte Now, going ahead with the description of the system, is qui e clear that all modern, new mass transit systems are going to be aut mated. The reason for this is that. a comput*. ~an handle the job. s much better than ~~an any traffic dispatcher o$~ any team of men. For exaniiple, in a complex traiisp4rtation system, there ill be demands-certth~ indusl~ieswith shift1~imes~ there will be reor tional events-parades, and one thing or anoth~r-and all these events èquire a shifting of'cars and routes o~ a transpbrtation arrangement to handle the loads. A computercan do that and ~11 do it well. In other words, for example, one might have somethmg uk this- every time somebody puts a fare in a fare box, he would p ch his destination. The computer would ta1~te his data and process it. It would program the cars on the tracks s~ that they are diverted to pick up the person and all the other people 4n the most convenient anner. There will c~ert~inly be a need for indivi4lual response. In other ~woths, when you indicate y~our idea, your desire t travel somewhere ~at a certain destination, ~nost systems would p obably then call caFs, so a normal commuter c~n be assured that a vehi le will arrive there within a certain time, lil~e 2 or 5 ~ minutes. T e corn- puter will handle his request and direct a car there. Now, computers can do that kind of job and they can do it ell. We are handling today far more complex jobs than that wi Ii cOrn- puters, but we are not handling theua in a transportation ystern. This is what we mean by systematizingJthe whole arrangement There are other concepts, for exa~nple, in connection w th the economics ~f a project. ~ Route locatioi~~ is one, where the route should be placed fbr greatest benefit to the p$~ople and for greatest ncome. This is a co~np1ex system that interwe*es physical and social cience. This is a complex system. It is a very broad topic but it has a awful lot to do with transportation. Mr. MOORHEAD. How do systems engineering and the compu er help us in the making of the decision as to what kind of a rapid transit system to use or where to locate it ~ This is a process which is very difficult for us to comprehend. Dr. SP1~LgON. ~ This is another systen4 ~nd this is what we n rrnally call optimization, and decisionmakhig. In other words, you have got to. de~1e. what kind of syst rn you want to build, where yo~i want to put i~, and so on and so forth rather than inakirtg these decisions on an ina4equate basis, the comp ter can compile all the tremendous number of ~variables-the balance etween costs and desirability. The balance between attractiveness nd re- spouse, the balance between competiti$e roUtes with automobiles and with mass transit, and evaluate all of these various aspects of a system. Then it can determine what system is the most likely to be success- ful-wliat system will use the least hi resources-both hun an and PAGENO="0263" ~RBAN DEVELOPMENT ~fits in terms of convenience in roblem to solve, it is very~ corn- r~MdI1g aspects. * The normal LaXldle all these factors but a to say that the thrust ~f your endment No. 4, is that we haVe nd working and research and uld have in this country ? Is ctaraflte& h~ve we that if we thaP~hepeopie willuse them? ~, aeeiI~ine:iaith~ ~ us~ ~of mass iaratitee have we that if we do .pié~ ~back to theuse of t~ansit? ~ job. of intelligent plarniing iformation to begh!i with, and aliiate~ th~ public response. It. per amOunt of study and the blic tot~transportation system LceuraCy~ before it is ever built. will be, and certainly nothing well. ~ that, too. ~nt ~xampie~ already on hand you inquir~d about. Can we* Dughout the country there are in market analysis. `This may ~a, but they use the same kind :ing about, they store into the ey will need, the reactions of `things of this sort. They use ie,r acceptance of an ordinary cry `fonnidable task involving or a particular company. uracy that would be virtually own~4t a table and tried to do .atic' fashion. Again, because ions and so many variables . at .5' that we are `lookixig forward ~ttilizing people who hav~ ha4 nxious now to turn these tech- `We a$ fa~ced with one very susceptible to it. We would id spend 20 minutes in a mod- I waiting 5 minutes on a street o~blern.' can give ourselves guidelines sums of money to guarantee DEMONSTRATION CITXES D 849 e I `Ii ~, S.. material, and will yield the greate iransportation. That is a very to' plex and there are thousands of mental capacity of a man just c computer can. Mr. MOORHEAD. Would t be co testimony, particularly in ~ upport not been doing that sort ~ f think study into the kind of sy tems w that correct? Dr. STELSON. That is co rect. Mr. MOORHEAD. Gentle: tan, wi spend the money and get t Lese sys Because we have observed, as yoi transportation in this country-w spend the money that we will brin Dr. STELSON. This is part of th of a transit system. There is eno certainly more research is needed is relatively certain that with th development, that the response of t can be predicted with reasonably Then you evaluate what the condi should be built unless it is going to Mr. MOORHEAD. We need researc Dr. ROMUALDI. We have some to prove that you can do this- guarantee the people will use it? many people who are very skilled seem at the moment to a difFere of computer techniques that we a computer all of the data they thi blocks of people to certain stimuF this kind of technique to predict c product and in many cases it is a v proportionately a great de 1 of m They predict this with a degree impossible if a group of p anners this. It is done in a corn letely the computer can handle s many one time. This has been done. One of the to in our own institute, br examp experience in marketing, who are' niques to transportation. Now, this is a marketing prob severe problem-all of us in hen rather leave our house in the morn erate jam, listening to our car radi corner for a bus. This is a marketi We can approach this problem. ahead of time before spending n hi )r~ t :0] r I t 0 C PAGENO="0264" 850 bT~I\~~STRApION CITIES: ~D these results. It is part of the whole that just has. to~be done. Mr. MOORIIEAD. In the Sky-Bus sy~ is not one ~f the problems thattiley a~ vehicle to arrive; maybe you can te11~ that system? Dr. R ~1ALW. The guideline is th4 2-mirnite ~Ieadway betweei~ vehieles..: 1 minute 4~r perhaps just another rn just missed one, there is no more tha: ~1tJU~AN DEVELOPMENT Le things picture. It is one of ti ie struc- he. corn- transit ur cities .n urban ent that place- ~ff at the lanning enough, m leave t to the is that a letter on, con- roposal I tern, our demonstratioi tack this waitiiag perio the committee a little project [for the it about &tbere must be no gre ton have either misse nute to wait. Or if: ~ 2 minutes to wait for ter than one by oil have the next oneS. it has thi~other advantage which can be improved upon. If t ture is so attractive and light that it esn be weaving through munity, then the person does not have to walk very far to thi system. Incidentally, in terms of the optimization concept again, c change. The centers of population 4ange. If we imagine transit syStem that is not such a tren~endous piece of equipr it actually. is economical to tear it d$in and put it in anothe we can do it with a light structure. We can do it by cutting it ground line and putting it someplace else. This kind of optimizes the whole thing. The concept is to get it frequentl~ attractively enough, and close. enought to the people to let tb the. car in the garage when they leave in the morning and g rapid transit. Mr. MOORIIEAD. This is the area wjhere research is neede correct? Dr. ROMUALDI. Definitely. Mr. MOORHEAD. Thank you, Mr. Ch~irman. Mr. BARRErr. Mr. Reuss ? Mr. REuss. I would first like to ask~ unanimous ~onsent tha from the president of the Minneapolis~ City Council, Glenn 01 cerning precisely this mass transit research and development be placed in the record. Mr. BARRETT. Without objection, so orde:red. (The letter referred to follows:) MARCH 7, 196~3. ~8e Office he major es only a hat these with the Representai~ive Hxsio~ S. Ri~uss, Chafrnu~ ~e the Research aiu~ Technical ~ograrn~ S~ubCbmmiittee, H B~ild4nt~i, W~hin~qt~n, DAY: ~ . . DEA~RM~RSRA~ATIVE Th~tTS5 : The~e1tj~~ o4 M1n~ap~li~,ifke most of cities in the country, finds th5t its presentfpublic transit system can very sma1i~ercentage of the total daily cc4imutjhg traffic, ~The fact systems ~i4not effectively con~pete, from 4 funètional point of view, a~itoñiObfle~ias create~l pr~blè~is for our côthinunity: 1. *O~d for more road~ to handle the ever-inctea~1g antomol 2. Need for more off-street parking facilities. 3. Traffic congestion that gives promise of becoming more se if present road and parking construction proceeds according to p 4. Continued loss of taxable propertp to accommodate roads. 5. A central or core city who~e grow4h is stagnated because of C parkh~ j~roblems. I In our se~rch for alternate sOlutjGns (ot~ier than simply building in ore roads and more ofl~-street parking) ~réhave turne~L to public transit. We fin [ that the bus systems cannot provide ettective comp~t1tion to the private car. We have been told th~tt ourS community cannot suppoJ~t a high-speed rail system patterned after the BARDT system of the San Francis~o area. le traffic. ere, even an. raffle and PAGENO="0265" 851 DEMONSTRATION CITIES . A D URBAN DEVELOPMENT In view of the oIiv~u~ nee~I fcft ilTi t' v~ public transit systems and the In- adequacy o~ currently ava4l4ble syst s, would strongly recommend that the Federal .Governxneiat provjde fund t ~ s pport researc1~ and development of new and novel public tra~isit sy~tem.s t at give the promise of transportation service more competitive wit1~ th~ pri ~ e ~ r. `i~h~t a change in policy on the part of the Federal ~ Gov~ntt~it is. n e ~ i~ borne out by the fact that the Federal Governm~~t ~s~now s~ipp~rtln $~ rch ai~l development of, as HHFA puts it, tried and proven publió transit y t s. Such a policy actually militates against the devel~ment ç4~ pülpiic tr~ins t ~ ems that, on a functional basis, can compete with the automobile ~n pz~ovidn t anspôrUttion serVlce~ in our cities. Yours truly, ~ ~ ~ ~ ~ ~ ~ ~ GLENN G. 0. OLsON, , ~ re iden~ Mi~nnec&polis City Cqi~noi1. Mr. REUSS. Dr. Romualdi and . ~ telson, I want to congra~u1ate you both on your m~st e~o~1eut co t lb tion. It has always seemed to me iro i tI~ t ~his oountry, which is doing such a marvelous job of systems an ~ in putting a man on the.moon by 1970, at the cost of sc~me $2ö r 30 billion, and more recently at a cost of some billioms~ of dol ~ s, rying to evolve a supersonic transport plane which wckild tak yo to Paris in 3 hours, rather than in 61/2 hours-~-it alw~ys seem me ironic that we spend that kind of money to a~tdève t~hose obe U es at a time when I belieVe it is true that on research ` ar~d ~evel ~ iii ~ ut into ~holly new means of mass transportation in ~ oui~ cities~ e ye spending zero, or substan- tially zero, is thatuot oori~e~t? ~ ; Dr. STELSON. That is corx~ect. Mr. REuss. I * have p1ag~ied varo is members of the Government from time to time onthis poin~. ~ * ~ t e answer they gave me to our present do-nothing attitucie-~an ` t it de incidentally whic~h I be- lieve, within the next few~ weeks~ iii be changed, and I think we are going to get a proposal tI~rou hen I asked them about our present do-nothing att~ud~, tl~ey ~ a ci, "Well the mOon shot, that is a dillerent matter ; there is r~o priva .e ca ability of reaching the moon. It takes g~vernmenta1 coo~dinatio ~ action. * Eut, after all, we do have transportation systpms in ~ tt c ties, and therefore we do not see any spearheading role for the Fe e al Government." I try not to be unfair in my stat~ ~ ts, but take it as it is, would you comment `on that argttm~nt, ~ e)t er you think it is valid or not ~ Dr. ROMtIALDI. I believe i~hat they ew oint that w~have expressed in the formal statement h'~re in an ~ * r to questions subsequentl~, constitute a very enthusiastic ~nd : s n~ t ~of your point `of view, I believe, and a lack of `endcvi~sen~ient ~ o th~ `alternate point `of view that you mentioned. We have `a very good-I `am sor . e have a very sad record of the fact that this `will not `~e `spea a4 d by `any group other than the Federal Government att~his poi t. he record comph~tely points the other way. I do not be~ieve th t thi will ever be a g~ômbination approach, other than a pie~emeal ` ioi~ from time to ~ time by the private sector of our econom3r. Mr. RETISS. I `would like `t~ h~vé b ~ ntlemen put your minds on the ways `and me~sr~ t~arrying~out ~ ~ ` `a Government spearhe~c~ed research `and `dev~iopmek~t ` p~rogram. L ~ us supp~se that Congress passes an `amendment somet~iing li' ~ th one you a~e testifying on today, to have the Department of `o i~i g and IJrban Development PAGENO="0266" I 852 DEMONSTRATION CITIES AND : URBAN DEVELOPMENT and perh'iMp~ the new Department o~ Tr~ns~ortiation char ed with the task o~ bringing back to the Oon~ress, within a year, le us say, a program for research ~rnd deve1opr~ient and clernonstratio of new systems of urban transport. ~ Can yoi~ suggest useful ways of or~anizing that program Obvi- ously, it ta~kes not only the Governmetit, the Federal Govern ent, but local and State governments. It certainly takes the great unversities of which Carnegie Institute is one. It takes industry, of w ich it is interesting to note that the aerospace industry, which has d ne some great things iii getting to the moon, i~ now ready to apply it talents, as soon a~* it gets to the problem of h~ow do you get from 12 Ii Street to 184th Street ? How would you en~isage such a program ~ This is a little premature, but I hope we are~going to be facing this problem very shortly. I Dr. STELSON. I think it is-I don't think the organizationa problem is severe because we, for example, when we started the moon hots, we didn't have many moon experts. On the other hand, we Ii ire a lot of transportation experts-as a matter of fact, probably three quarters of the population consider themselves such. Talents from any dis- ciplines such as the aerospace which you mentioned can be a apted to transportation . problems. with relatifre ease. The systems concepts are similar. Theproblems are differ~nt but the training of any peo- ple in this country is suitable for a sol4ition of transportation roblems. It is mainly a problem of organizing. I Now, universities, I think, are ver~ suitable for adjustrnen in orga- nization and they have a pool of tale~it that is very useful in ranspor- tation. * They have the interdisciplinaiy characteristics th t are re- quired, the economics, urban planners, sociologists, engine rs, scien- tists. Most large industries have the same combination. Now, for example, we are working with an advisory comm ttee from industr~t,~ representatives of about 20 industries, in our tran portation activity at Carnegie Tech. I hav&~nev,r seen such enthusiasm[on the part of indust to advise us on our activities and help mesh oi~r activities with their c pabilities to ultirut~te1y turn out improved ~ransportation technology. The combined efforts of industry and p4ivate companies, the Government and universities, I think, can be orgtnized along many possible lines, all of which would be suitable and fruitful. It is not impossible task at all. I think it is a relatively easy task, but it is going to take a certain amo~mt of time and effort. Mr. Ri~uss. If this amendment is ~naoted into law, and the executive branch is given the mandate to blocl~ out a Manhattan District project type of approach to urban transp4rt, undoubtedly the chairman of our subcbmmittee will be. working ~Ith the administration in blocking out that~study. If this should happ~n could we count upon the advice and help of you gentlemen ~ I Dr. StELSON. We would be deiighLed to help. Mr. R~uss. Thank you very much. Mr. BARRETT. Thank you, Mr. Reuss. Doctors, I understand that Mr. Fino has a question. Mr. FINO. Dr. Romualdi, I assume, coming from New York City, you are somewhat familiar with the transportation system in New York PAGENO="0267" DEMONSTRATION c~ii~ 853 N ~ VRMN DEVELOPMENT City. I assume also tha you Ii ~ s m~ knowledge of the transporta- tion system in New York Ci~y. ~ What would y~u care to bom~ ~ i~1~ ~ Wouid you say-what can be done to improve that system in ~ ~ ~ ~ ork City ? It is a $6~L question. Dr. ROMUALth. It is a 1~it i~ior~~ ~tL that. Mr. FIN0. Based on ydur ~ ~ ~ y t~ might~ta call from Lindsay. Dr. ROMTJALDI. Let. me g~ve o ne ~mall example and it is not unique with us. ~ N~w Y~rk enc ~i ~t es automobile tra~Ic. The corn- muter who is a r~gular~ stead. ~ o muter, ~tl~~~öne * who stores his car in the city every day, wh cO es in ~ at, a fixed time in the morning and goes back ~ at a fi ~ d imO in the afternoon, is given an advantage because he buy ~ season ticket on the bridges and toll tunnel~. He is ~nc~ura ~ ci o use it ~becau~e by using it fre- quently, he gets it at a c~a~per té~ This i1tt1~ example points out the backward thinking or~. th~s. ~ ~ With all due rt~5pE~t 1~o t~ie d I ~ ~, it should :~be. made a bit more difficult for the person w~io ~lwa s ~e nes in `by 8 and ~ and goes back between 4 `and 5. . In faó~, New ` r1~ would be' a much better place if we made the city free fo~ th~é an ~ ile, ` The ~p~iison who comes in every day, the person wh~ is `the ost likely,one,to go on a commuter train, is the one who `ci'c~' ~he ` i ~. There ` a~IM untold people ~ really need `their ~utomoI~nl~. ". ~ ~ ~insit ~o&ts~tti'sf,y:everybody. Th~e automobile is a . ver~r ,tt~fu ~ ` a: ~ ` tra~t ` t&~L ~ The salesman, the doctor, the person `wl~o ~ust ~ i~ * iii and ` out `~f th~ city several times a day in th~'iiorm~l c~urs f. us ~usiness, ~Ts~'b~ttl~d ii~. , So there should b~ `a ~ i~j~o~ `~f~ort `t ~ *e, i~icI ma~ ` `transit mbr~ efI!ective. ` ` ` ~ ` ~ ` ` ` ` ~ ~ New York is doing a ~ot in t a Trans~Hudson System `h~s n~ade ~ You have trackless ~a~s that'~uri ~ this direction. ~ But 1 think, frankly, t~ie `~ity * `` morning and afternoon Motorist ,a more efFective. Certainl~, tl~e re attempts to decimate the urban t Jersey, have not been `apr~pei~ ste ` Mr~ BARRI~TT. Th~u~k yo'~i, 1~r. F ~ Thank you, Drs. Stelso'nan~'Ro , ` You ha~ê been tw~"v~rf~ue *~t am quite sure, has been ~y l~lpf I We ar~ c~rtainiy goii~g to~ak~ acT ~ Mr. R~uss when ~ ~ wo~ki9g u ~ you., ` ~ ~` Thank you very mUch. Dr. ROMUALDI. Thank you. *` Dr. STELSON. "Thank yot~. `,` Mr. BARRIYrr. Our next witnes ` `I Congressmen from the `StMe of Flôi mittee to come over here `to $est~fy ~ He is in a greathurry tox~etti~nt ~ Congi~essmari :Ch~de Pepper, if we will be glad to hear our4ist~ngifs] irectiou. Th& Port Authority. ~on~ibTè~'st~? in that direction. frequ~i~t~y.~ That is one step in i~1~ be iüade i'~s attractive for the id the rna~s transit must be made r~t' in the last 15 years, with the t~ t system .ctming in from New ~1'~ at, direction. ),~` ` ~ , ` " i~4 i. ` ` ~ e~ here ~nd your testin ~ allmé~ñbers on' `our comm ~ ~ øtth~ `qttestion put to ~ i~ i~li¾~On. , Wemay call ~ `` ~ f;~ teti ,thor~iing' is one of the o~reat ~ ~ho'just left the Rules bill. ~üles~Corthn1tt~. will come t~ t~he witness table, colleague. PAGENO="0268" 854 DEMQNSTRATION CiP~ES AND iJ~tBAN DEVELOPMENT Everyone on our committee has a g~eat deal of respect fo your `tbthty We certainly appreciate your advice because of you long experience in the Senate and also in the house. If you desire to complete your statement, or if you desire t read part of it, then put it into the record, I am quite sure the corn ittee will abide by whatever you choose to do1 STATEME1~ OP HON. CLA~TDE PEPP4R, A REPRESENTATI IN ~oNeRESs ~`i~o~ ~nr~ ST4DE OF PLOItIDA Mr. P~rri~. Mr. Ohairman, I thank ~ou very much for you kind words. ~ You know I am delighted to be here before you, my old collea ues on this distinguished committee. That was .a very happy experie ce for me, the ~ years that I was privileged tq ~erve with you on thi great committee. ~ You have done great work~ in the service of our cpuntry and I know ~you are going to continue to~do that. This bill that you have . before you today is another evid ce of the important contribution that this committee is making o our country. . ~ . You do have a little bit more space. ~ urroundings than we e joyed in our old committee room. It is very lovey and very fitting to the dignity and importance of this committee. I just have a relatively short statemei~t here, Mr. Chairman which I will read if I may. Mr. Ohairman, I am glad to have this Gpportunity to regi ter my fervent support of the legislation beir~g considered by this S bcom- mittee on Elousing. ~ j ~ ~ . ~ .1 have k~tig been an advocate of for~fard-looking housing pr grams and Ihave consequent~Iy:introduced foujr tills, H.R. 13278, H.R 13279, H.R. 13280, and Hit. ~13~8i, which arefidentical to those put f rward by the administration to encourage a ~iew surge of urban re ival in our Nation. ~ First on the list is the imaginative Demonstration Cities Act of 19G6. Cities have always represented the citadel of culture and human accomplishment, but America has now~ been witnessing the tr gic re- sults of insufficient care and concern fbr these monuments of Amen- can creativity. Decay of inner city te~iements, the exodus of ~ iddle- income fai*ilies and the steady polluti~n of air and water an only a few of th~ problems our urban areas ar~ facing. ~ They ca~mot solve these problenis $Jone. Billions of doll rs and giuch hum~mn talent are ne~Ued. And lit will demand the coo eration of our Federal Governm~nt and our States, as well as the citi s them- selves, to begin the task of making the quality of life in o r cities commensurate with our m~,terial abundance. Therefore, the proposal for Federal grants to cities of 90 pe cent of planning costs and 80 percent of coststfor demonstration proj cts is a greatly ne~ded first stepin.this effort. The con4~ept of the demot~stJration;p*oject is sound. It stresses the provision of eñueabof~ai and social service a well as p1~ysical r~newaL The city's plans *ust pay adequate atte tion to the supply of housing of 1Gw and mo4erate cost. And in Jigi t of the PAGENO="0269" r on coordina educatic flow 11 Angeles last for a congres- y speech on the to beter on local do what DEM0NSTRATIO~ t~ITIES -~---~ ~ pro-. e more ty-~that nmodate avai1aL~. equipmei PAGENO="0270" I 856 DEMONSTRATION CITIES AND UItI3AN DEVELOPMENT fessional personnel and so arrangements for personnel that we have to provide their services most efficientl~' to the public. The roup practice for medicine, I believe, has beer4 demonstrated to be pe haps the most efflelent of all methods of rend4ring those professional serv- ices to the pu~b1ic. Mr. Chairman, 1966 can be another ~great year for housin and urban development legislation by the Oongress. If those fou bills are enacted, 1966 will indeed be what President Johnson has alled the "year of rebirth for American cities." This distinguished committee made an immeasurable contri ution in this area. I am sure you are going tp carry on your progra this year. I commend you for what you did.; Mr. BAmuti"r. Thank you, Congressi4an Pepper. You have given us a very fii~e statement iii support of 1~hese bills and your sta ement will be of greathelp. I Mr. PEPPER. If you get them up to th~ Rules Committee, I wi 1 give you allthe help I can. Mr. BAiuu~rr. Our next witness is ~ Morris Ketchum, pre ident, American Iflstitute of Architects. It is certainly nice to have you here this morning. It is the desire of this committee to always try to ma~ke the witnesses feel a home with as much relaxation as possible and we hope we can give y u this feeling, too.~ ~ I note that you have associates wit4 you. I was wonderi g, Mr. Ketchum, if you would be desirous to Jiitroduce them for the ecord. Mr. KETCHtmi. I do, sir, but before~I do and before I go i to my statement, I would like to ask your advi4~e. I have here, and I believe the memb~rs of your subcomniitt e have, as well, our statement. I can either read it in full, which I eave to your judgment, or take the most basic and important points in this statement and dwell on those. I would like your advice n that point. Mr. BAmu~rr. We are hopeful, as I i~pointed out, that we c ii make you feel at home. ~u~l anything that jTRt desire to do, you ay take advantage of. ~3'e will be quite sure fl~at this committee will g along. Mr. KE~brnmi. T~iank yGu, $0 .mucht STATEMENT O~ MGItRIS KETt~ILUi~!, ~1L, PAI& PRESIDENT, MERI- CAN INSTITUTE OP ARORITEOTS; ACCOMPANIED BY ~ LLIAM :ii. SCHEICK, EXECUTIVE DIRECTa1~; AND PHILIP RUTO INSON, JR., DIRECTOR OP GOVERNMENTAL AYFAIRS, AMERICA INSTI. TUTE OP ARCHITECTS Mr. KE9~CHUM. M~r name is Morris ~Cetchum, Jr. I am a p acticing architect ~nd principal of a firm locat$ in New York City. ith me are William H.. Scheick7 executive difector of the American nstitute of Architects, and Philip Hutchinso4i, Jr., the institute's di ector of governmental affairs. Today it is my privilege to appeaj~ before you as preside t of the American Institute of Architects. The AlA, now in its 10 th year, was organized to unite architects~ ir~ a professional society wherein they could combine their efforts to promote the artistic, scie tific, and PAGENO="0271" 857 DEMONSTRATION CITIES ND URBAN DEVELOPMENT practical efficiency of the profes io . AlA members now number about 24,000 and include 95 perce t f the architectural firms in this country. Although a small profe si n in number, we have a great role to play as builders of Americ `s ities. I would like to limit my remar s his morning to specific sections of legislation, introduced by Rep e ~ ntatives Patnian, Barrett, and others, entitled "Demonstration Ci ie Act of 1966" (H.R. 12341 and H.R. 12342) , the "Urban Develop e t Act" (H.R. 12939 and }LR. 12946) , and the "Housing and Ui Development Amendments of 1966" (H.R.. 13064 and H.R. 13065). I. DEMO~STRATIOi~ I S ACT OF 1966 FINDINGS AND DECLA AT ON OF PURPOSE Under the heading . "Findings ~ nd Declaration of Purpo~se" the Demonstration Cities Act begins: The Congress hereby finds and declar s at improving the quality of urban life is the most critical domestic problem f ci g the United States. We could not agree more. The A e ican Institute of Architects has repeated over a~id over again that o e aspects of urban life are sad indeed. We amplify this statement. I w ul be happy to read that if the committee would like me `to. May h ye your advice on that point? Mr. BARRETT. You may. Mr. KETCHTJM. Shall I proceed? Mr. BARRETT. You may read it if yo so desire. You may read the entire statement. ~ ~ Mr. KETCHTJM. The pattern is ess nt. ally the same hi the great ma- jority of our towns and cities. The p roaches to the city are defaced by billboards, garish srtore-froiit si , , utility poles, overhead wires, junkyards, iuid blightedbusiness bui di gs. Downtown is usually con- gested, rundown, and rr~y already ~ av been dissected by a badly lo- cated highway. The waterfront, p ially a place for recreation, is littered with junk and industrial deb s. ToO often, that part of the suburbs air ilable to rn~dium-income resi- dents is devoid of interest and vitaii y~ Most suburban shopping cen- ters are squat islands in a sea of asp alt. In many things, large and small, there is a blindness to the go d esign and planning necessary to i mprove urban lh7ing. WThy should the Nation, with th ost advanced technology, the highest living standard, the best pro ` ra for mass education, the most successful political system, and the hi h st degree of ingenuity in solv- ing scientific problems make such a es of its physicai environment? It is not that we do not know how o ope with community growth. We have a rich and valid heritage in community design. Thomas Jefferson, our third President and n architect, designed not only Monticello and the campus of the U iv rsity of Virginia but several towns ; he also made a design for h city of Washington before L'Enfant did, and he proposed a~ nati nal system of roads. and canals. 1\Tiliian~ Penn's original design for hiladeiphia was strong enough to guide the orderly development a d redevelopment of the city to PAGENO="0272" 858 DEMONSTRATION CITIES AND 9RBAN DEVELOPMENT fliis day. Distinguished examples of 4riy ~&mericaii coiiumrnity de- sign also embraced Annapolis, V%Ti1]iaii4~burg, Savannaii, and a nurn- ber of communities tJ~iat have been designed and built imcler both pri- vate and public auspices over the I)a.St two ceii~uries. Communities have been built as "company towns" like hershey, Pa. ; as religious centers, like Salt Lake City, Utah ; as governmental experiments, like G-reeiibelt, Md. ; and as private developments, like Reston, Va. Let me assure you that the arcIiitecti~ral profession, which is daily confronted with the problems this legislation seeks to meet, is well equipped for the task of revitalizing c~ur cities. Presently, the pro- fession is carrying out all major objectives of the housing laws. We harbor no illusion that the architect is ~ superhuman who can remake a decaying city in a blinding flash of esthetic inspiration. But, as men who will be intimately involved in th~ rebuilding process, we assure this subcommittee and the Congress that by working together with 1)Oliticjans, sociologists, engineers, city ~ planners, and others we can arrest the decay that is gripping our metropolitan areas and create an urban architecture worthy of our greet Nation. COMPREHENSIVE CITY DEMO~STRATION PROGRAM We are e~tremely enthusiastic abo4 fhis section of the bill. For the first time, to our knowledge, langu~ge has been written into a bill that recognizes the importance of qua1~ity of design and construction. Section 4(c) (2) requires the Secr~tary of J-Iousin~ and Urban Development to give maximum consideration, in determining whether a comprehensive city demonstration program is eligible for assistance, to whether "the program will enhance neighborhoods by applying a high standard of design and will, as appropriate, maintain distinctive, natural, historical, and cultural char~eteristics." Practic~1y, you might ask, what do4s the phrase "high standard of (lesign" mean to an architect and ho~ would this ideal be translated by a den~opstration city ~ Primarily I"design" is the function of an architect, and he applies the methods 4f design to creating man's total environment. The solution to the very existence of our cities lie basically in the architect's ability to d~esign these complexes of build- ings and related services so they will function and serve man rather than stifle him. "High standards" are the rules for the measure of quality. This quality we attempt to produce with our knowledge, dedication, and skill. Our activities in increasing the publIc awareness of, and demand for, excellence in architecture and commufriity design are supported by a swelling tide of interest~ In the demc~nstration cities program lies the unprecede~ited opportunity of contemporary times for transmitting to this great movement the efficiency anc~ beauty of which our profession and this Nation are capable. Section 4 (c) (3) further directs the Secretary to give maximum consideration, in determining wheth~r a comprehensive city demon- stration program is eligible for assistance, to whether "the program is designed to make maximum use of new and improved technology and design, including cost reduction techniques." Writing this into the proposed lawt will insure that the demonstra- tion cities will be truly demonstrative of good quality constrtic~ion and design at reasonable cost. PAGENO="0273" DEMONSTRATION CITIES f~D ~RBAN o of C ~l be ~ incoherence rtity, of prop~ OFFICE F ~J~I :E ~E~L COOED~~ATOR s ~unctions is correct, we believe he urban information center j Thisr PAGENO="0274" DEMONSTRATION CITIES AND URBAN DEVELOPMENT facility to assist the demonstration cityL Later in my statemen I sug- gest an amendment to the Urban De~e1opment Act to estab ish the first urbaninformation centers in coordination with the demon tration cities. Suc1~i arelationsiiip will, webei~ve, provide great as~is ance to the demonsh~ation cities program and,~at the same time, dem nstrate the utility o~f the urban information cerijer. IL URBAN D1!WELOP~[ENT ACT GRANTS TO ASSIST IN PLANNED MTJ~ROPOLITAN DEVELOPMENT The AlA agrees with the findings e4ressed in the proposed Urban Development Act and supports the pufpose of the legislation which is to encourage the States and locali~ies to make effective e mpre- hensive met~opo1itan planni~ig and programing. Earlier u~ my statement I describedithe Topsy-like growth cities and the unwholesome result of inlklequate planning. I ~ stress, at this point, our approval of t*e local initiative and ë federalism written into this legislation Only through Federal, and local cooperation and participation can comprehensive met tan planning be accomplished. This concept represents the recognition o~ the vital need for plant future growth of populated urba~i areas wElch, heretofore, have been sprawl and grow with little or not attempt to~antlcipate the consequence we are realizing today. Again, we recommendthis program F~c~use we believe it wil important step in creating the sound urb~n environments of torn We believe it is important to incorp4rate. into new commur foundamental concern for design quality. Fortunately, man posed communities are now being planned and built with this c for quality in design. We hope that this pattern will be firmly lished and that future projects will provide attention to design q of the total urban environment. We would like to see written into the "new communities pros of this legislation (title II, sec. 1004) th~ same concern for good and improved technology that is express4d in the Demonstration Act. This cOuld be accomplished by an ~mendment directing th retary, in d~termining whether a devel4pment would be eligib approval as a new community, to give ~naximum consideratior To whether the new community will apply a high standard of and will, as appropriate, maintain natural, historical, and cr characteristics; and (2) to whether the new community is de~ to make maximum use of new and improved technology and d including cost reduction techniques. 860 of our rant to ~eative State, ~opo1i- LAND DEVELOPMENT AND xi ~W COMMUNITIES The AIAis pleased to Ibid a ~ection vision to th4 existingland developmenl National housing Act, auti~rizing mo: munities. SVe have, over the ~ r inherent in PITA programs. In 1964, 1 of the Institute, testified before the ~ Committee and endorsed the program a~ ~f this bill adding a; ne program under title X tgage insurance for no1 oognized the~ immense t~y Carroll, Jr., then pr ~nate Banking and Cu EOllows: w pro- of the ~ corn- values ~sident rrency ing the left to ~ which be an rrow. [ties a 7~ pro- ~ncern estab- Liality isions Lesign Oities ~ See- le for : (1) Lesign ltural igned esign, PAGENO="0275" to the direc~ ~onstration Cities ier ,a city deinon~ Weaver said: DEMONSTRATION CITIES A EBAN DEVELOPMENT 861 You will recognize this ~angua~ tives :iven the Secr take into oon~ inities rehabil: Jvances L I The same reasoning ap~lie~ to we have the opportunity tojrnake a~ card or build around, In4ee4, fr and all professionals participa1~hig I should be thie to realize th4ir greal :i 1. e~s .~ t community programs. Here start, there is nothing to dis- pristine beginning, architects planning of a new community ehievements. T ~ed )n. i~i ~ii~ba~ information centers. by F~4eral, State, and local ~r~q$r~s a centraAl depository ~orkof the centers, said they LII Lat~ c$ URBAN INFORiL The Institute supports the conc The great host of programs devel governments to deal with urban prc to collect and disseminate informai Secretary Weaver, in describing would- assemble, correlate, and dlsseiiilnate info atid economic problems of urban areas, grams dealing with such programs. TI Secretary Weaver explained- will expedite and coordinate Federal C the various proje~ts and activities that a program. While we are fully in accord with program, the AlA suggests it be cities program. ~ We believe the FE plated by ~ the Demonstration Cith with, or part of, the urban infori would give both programs the grea prove to be demonstrations We also suggest that urb~ a new point, include a pre "street furniture" such as street identification signs, I tial elements of urban stree sented by manufacturers of proved examples to an exh Dnai~ ~1~ta on the physical, social, ~ the go,ern~rei~tal and other pro. rdinator-~ ~ti~ns and technical assistance to art 0± the approv~d demonstration ~ra Ac Lt1C ii~a~of the 1nfo~óation centei's Lated `cs~:ith the demonstration coôrdith~,tor position content- should be closely associated a cei~ter. Si~tch. an approach iance for success and literally ~n infot entatio benches Ligikwa3 equipi suqh Pr ibition ci( Df at. ,w~1 )n centers and I believe this is the best design standards for Ei recepticles, directional and dards, and many other essen- Private enterprise, as repre- 5, could contribute typical ap- in these information centers. III. HOUSING AND 1 APPLYING ADVANCES IN FECI TRB~N D w :xoi~oov'x~: PMENT AMENDMENTS lot SING AND (71iEAN DEVE~LOPMENT Secretary Weaver, in exj~la~nin i proposed amendment recogi~iizés th 1: specifically (1) to reduce home co s' aims of section 106, said the )rtance of a program designed ~tion costs through the appli- PAGENO="0276" 862 D1~1~STRATION CITIES AND URBAN DEVELOPMENT cation of 1~echno1ogiea1 ad~vances, and (2) to assist the appli technological advances to urban devel . pment activities. The ardhitectural profession stron~1y endorses these ain'i materials, technology, or design are often resisted at first. Bu ance can be bro~ught about by research, testing, ~nd education. material o~ process is successfully clemenstrated, we believe the place and public demand will dictate its use. Certainly the pi will encourage and foster innovatIon~ in building techniques. ~. ~ CONOLUS+N We beli~ve the Secretary of JTousin~ and Urban Developmeri make maximum use of nongovernm4tal talent to assure th of the demonstration cities program ai4l the new con~munities ~ If would be useful if the legislation directed the ~Secretary to interprofessional advisory group to off~r expert advice to the S Such a group could be of tremendous ~s~istance, as has beer strated in other activities, to the Secret~ary i~i determining for whether a city demonstrath~i program~"will enhance neighbor. applying~ high standard~fdesign." . Archite~ture must always success ully interpret the soc nomic, am! psychological demands o societyià physical te should be ~apable of~meeting man's da ly needs~andinspiring I and heart. City, suburb, satellite city, and region * are interl form and function. They must be j~lanned together for pu private benefit if this cotmtry is to havG a iiviiig environment ~ the name. It is high time for action. Within the next de mounting population, the dwindling land supply and ex growth of our technology will either result in the creation of and beautiful cities and urban areas or~the cities will diffuse ml ly built-up metropolitan regions with4mt form, amenity or a grace and tbeauty worthy of a maturi~ig and responsible soci The cit~ is the natural gathering p~ace for Our thinkers, o vators, and our specialists. It is whe* education flourishes a born. It is the generator of much of our national wealth. no earthly reason why it shó~ild be dirty, dull, ugly, and genci livable. it should be our greatest work of art and an examp] quality of urban life available to every American. Thank you, sir. Mr. B~uu~m. Thank you, Mr. Ket4hum; for a very fine st~ I am goitig to ask yGujust one small ~e~stion. . I n~te* ~ page 6, the bottom of page~6, you indicate that yo~ the Fec1~**4,l coordinator for each coi$j~ehensive city demou prograrn~Wi1l be an extremely useful lia$iion officer. Mr. Ki~tbrtuM. Yes, sir. Mr. B~u~m~vr. What I want to ask y~u is this, do you think h~ be optional or should it be mandatory~-the coordinator, the d would you comment on that, please? Mr. KETCIJUM. I believe the Federal coordinator is an mi link in this whole mechanism. It shouki be mandatory. Mr. BARRm. Mandatory? Mr. K~L1onuM. Yes, sir. Mr. BAItiu~n'r. Mr. Finol ation of s. New accept- Once a market- ofession t should success rogram. form an cretary. demon- ~xample, ~oods by ial, eco- ems. It us mind )cked in blic and orthy of ade our panding liveablie n dense- L~ other ety. ir mno- id art is [here is ally un- e of the ~tement. * believe ~tration should irector; portant I I PAGENO="0277" problem u will start the e for succe~ss. - imany iect. the rited, as~this pro- urban renewal ~ae is kind Dfl would certainly not board ~ Lgent, imp] I DEMONSTRATION 863 a fig- ~re this ~ not 1~ia -somet ing think this PAGENO="0278" I f our- t we try rely, but Sm, that ore they I think in these iaving a bring in provid- he main idicated fficiency But I ace, and r which Let me tor over city. has ~nt is to will be be with- ight be al court aid, for t comes ed, `and should should city to r where kly. ms and iculties change. in the ddenly, There re bad, to have i~serve? anew? 864 D~MONSTRAPION CITtES ANU URBAN DEVELOPMEN' intelligent urban archite~ture and not endl'e~s monotony which we all too often achieve. Mr. Fx~o. Would you suggest inste~td, in the new towns, th to revitaJ~ze some of thdse ~ that we 4iready have? Mr. Ki~onuM. Wherei~er that is ir4dicated `as necessary, si again, y~ see, `I believe In this con~pt of creative federal the 1ocaiii~jeg therns~lves have to anajyze their problems be: are complt~tely helped out by the Fe4eral or State agenciea local initlittive is required ~ to demOns~rate there is a problem existing sttburbs. Mr. FINO. Do you think we can crthte new towns without built-in economy or a built-in base such as the one residents with them or having an employment base in the town prior t ing housing? Mr. KI~IITUM. Dormitory towns o~ course are children of central co~ ~ of the city. A healthy ~ete1oprnent which is i across th~ country would be to ~eric4urage economic self-s through local industry, local empIo~ment of various kinds think botlki types of~ satellite ciUes,'hh~e their time, their p] their use. ~ ~` ~ , ~ ` Mr. FTNo. Gettingto the part-the bther part of the bill ov I expressed some ~oi~er~i ~ that is, the F~dèral coordinator. ask you this question : If a'Fëderal official istO be a coordini a program whose aggregate is in tM ~iflions for. which no asked fcir-iess th'ai~, pay, a miI1k~i, ah~ the Federal Governn pay 9O~or 100 percE~mt of the cOsts, ca~yon sn~ that this ma: able to-t1~iat this man will be only a ~iaisoi~i, that he will not out now~r~~o OHer~a~4'~jr~t? , I Mr. Ki~c,mjM. I ~ ~beiieve ` that toot `much responsibility r placed in the coordinator's hancl~ if ~ie is in any sense a flu of appeals, on these questions. I thii~k there is a need, as I the coordination and centr~ulizatiôn of information, whether from the computer or some other source, tn the problems invol their alternative solutions. I don't thiflk thatany undue powe be given' to the coordinator. * ~ Mr. Fn~-o. In other words, you fe~l that the coordinato: have certa~n. limited' responsibilities ? Mr. K~yiximi. I do. ~ . ~ Mr. Fnq~o. And you do ii~t feel th t he ` should step into take over the local government manag~ment and tell the may togo? ` Mr. K~PCHUM. I think that would ~e a great mistake, fra Mr. FINb. One final question. We all want to eliminate si blight. We are also aware, more than the most, of the di' inherent in the problem. `We know, for example, that tastes Georgetow~n, one of the most `soughlf-~after' residential area Capital, ~jas, ~ 40 years .ago, in part, ~ slum area. Then, si through :r~habili1~tion, it became a. i$uch sought-after area. is Willia~n~biii~g,. that wa~ mentioned. ISome things we know but we ~riticiP.~ the Executive Offièe ftu~ its architecture only an army arise in its defense. Now, the AlA has had arguments, and what should we p What should we keep ? What should we follow when we buil PAGENO="0279" DEMONSTRATION CITIES Mr. KETOI-IimI. I believe, sir, ii and changing patterns in our cii of the past, and I think, however, because I could imagine nothing vironment than a stereotyped n That doesn't mean the new satelli livability but ideally, the inherit~ ocrity-diat inheritance should city that goes around it. I don't be building housino slabs and hc build neighborhoo~s where the planned as a unit and the gems, p the inherited architecture of the Mr. FIN0. Thank you. Mr. KIrJPOHTJM. Mr. Scheick wo Mr. SCHEICK. I am going to s~ reference but there is a matter c~ has to do with historic preservat sponsored by the Ford Foundati Federal Government could do to There is the National Trust foi~ can Institute of Architects has i the years throughout the country ~ There is a thing developing he with the cooperation of the Depa: job than has been done in the pa~ The Housing and Urban Develop this, too. The mechanism is beii ested in. Mr. FIN0. The reason I asked portance of this legislation and sible and get to the core of this answers. Mr. BARRETT. Mr. Ketchum, o~ Gray and the former chairman of testify on this very subject about you have any further statements record. Mr. KETOF[UM. We will have t Mr. BARREVr. Gentlemen, time you, Mr. Ketchum, for your very We appreciate your coming.. Mr. KETcHu1~. Thank you so m Mr. BARm~rr. Our next witness say one of the greatest CongresE State of Ohio. He comes from d( He is very knowledgeable and The mayor of your city was he the Honorable Ralph Locher, ma~ excellent and informative. Any abide by your choice. URBAN DEVELOPMENT 865 se days of great urban growth hat we can only save the best ~ that is a, worthwhile objective, ~e monotonous as a living en- ne-made city without a past. ties can't have their charm and of the past~-we can't say medi- ;pice and diversity to the new ye, for example, that we should g projects. 1 think we should construction and the old are ps, of that new construction are ike to have a word with you. here a moment without specific ~ up before Congress soon that LS ,are~tilt of a study that was ad is outlining things that the ~ this, ~ one Preservation. The Amen- vn system Qf preservation, over iat is going to make it possible, at of the interior, to do .a better identifying areas worth saving. people have been interested in eated to do what you are inter- questions is because of the im- ant. to explore as much as pos- )lenl and try to come up with nday we will have Mr. Gordon [lousing Su1~committee who will oh we are speaking now, and if b, you may submit them for the in mind, Mr. Chairman. ` expired and we want to thank adid statement. ~e of our colleagues, and I would who has come from the great )Wfl Cleveland. y capable man. ~ other day,namely on Tuesday, ~.Cleveland. His testimony was v `yqu elect to proceed we will th( ~s 1 h~i cc 4 ~ii~ sth ha .d] 1iI~ SIB Li~i fl11~ in. ~ ~rO `is, at pl~ ±1 7:ót r~ Jt~ LI LC b p ;t, t~] t] C ii `S )1~~ PAGENO="0280" 866 DE~4ONSTRATTON (~ITIES AND ~LYREAN DEVELOPMENT STATEME1~T OP RON. CHARLES A. V4Nflç, A REPRESE1~TA WE IN ~ ;. CONGRESS PROM TEE ~TATE OP OHIO Mr. VANIK. Mr. Chairman and rnen~bers of the subcommit e, I ap- preciate your generous treatment. At this time, I am not going to restate the housing needs and prob- lems which plague our cities. I think that these needs ~ ha e been repetitiously brought to th~ committee by this time. We are a 1 aware of them. ~ ~ I want you th know, Mr. Chairman. ~nd members of the co mittee, that my interest in this total problem l~as not waned simply b cause I moved to aijiother committee. My inteifests. have always remai ed con- stant in this vital area of the rehabili~atioh and preservatio of our cities. First of all, just let me state that I s~ipport in principle the egisla- tion of the Demonstration Cities Act. Without going into the specific det~iis, I want to talk abo~it some other things that I think are impo~ant~to the conunittee. I hoje your committee can consider these suggesti~.ns at the time that yo.~i write up the Demonstration Cities Act. ~ In Cleveland we have been anticip4th~g the demonstratio~ cIties program. . . Within urban renewal and ~rithout, we are endeav~ring to rehabilitatel our city. Citizen interest ~s very keen in this ma4ter. I might say i~n fairness to the people in$rolved, that citizen inMrest is, in my opinion, far ahead of Governme~it cooperation and leac~ership. It is amazing how many people cOme from the central areas~ of the city who say they want to live there. They want the neighbc~rhoods made decent so they can stay there. ~ They want to live i~i close proximity to the center of the city and, its cultural life. Thi~ is not myth. It is something that has been rei~aled time and time aga~in. At the outset that thereis nOt any qi~tion in my mind but t~iat our handling of the urban renewal progra4~, both nationally and ~ocaUy, has not elin~inated the blight we thoug~it would beeliminated y this time. I thihk this is true in every pai4 of the country. I am sure it is as true in Philadelphia as it is in Cleteland. We havebeen . * oving blight around. I think it is time for ~ to find out how to e ase the causes of this problem. I want to pay tribute first of all to people in the Federal ousing Administration like Robert Smith and Sybil Phillips in the multi- family division. They have gone far beyond the ca1l of * their duties. The~y have gone out into the conimtmi~ti~s and tried to help u . For the first time under the new administr~tion of HUD, we are ~tting teamwork ~where groups of ~eop1e are ~$~ming to us and consol dating the whole j~rogram and pointing out ~o the community gro ~ ps the ~pa~ate aspects of the housing laws th~t are going to be effect~ve and relatively iniportantto our community. I With respect to the demonstration c~ties program, the $12 ~nilhon in planning money in this bill is ridiculously disprôportionat~ to the task ; $50 million and upwards of $50 million would hardly b~ ~nough. We are finding in Cleveland that our programs suffer for lack ~f plan- ning money for which we have no local resources. We are trying vitally to utilize pro rams like 221(b) (3) aLnd 312 in urban reuewal areas. ¶ PAGENO="0281" MONSTRATION CITIRS UI~BAN DEVELOPMENT 867 nile-square ~ y are endea~ J was involved, but ~ job in analyzing f they own PAGENO="0282" 868 DEMONSTRATION CITIES AND VRBAN DEVELOPMENT and I want to put in the record at this point an editorial of Sa urday, March 12, 1966, which sets forth the special problems in app1~ ing for financing under 221 (d) (3) ~ I do not know whether all of th ~ mem- bers of the ~comixiitte~ are familiar wit~i these loan applicatio: s. ~ Mr. BA~n~m. Your doewnent.may l~e submitted without ob~ection. ~ (Theediliorial refBrred t,o follows :) ~ f . ~ ~ ~ ~ (From the Plain 1~eaIer, ~ 12 1966j ~ ~ ~ R~rAPi~ SLGWS W~$ oi~ si~w~s ~ ; ~ ~ ~ ~ ~ ~ To stop spreading slum blight, Congress ~1ast year voted up tO $10 million for low-inte~rest loatis so. poor householders t~ould bring their ~ houses u to par. But when the urban renewal agency put out the rules for those ba s, those rules became a tangled jungle of redtape. ~bey ~re strangling the ope ation in its cradle. ~ * ~ The loans ~are for poor or almost-poor p~eple. * But the iifles demand that they be good~frredit risks. ~ * ~ They deni~4nd that the borroWers be able 1~ pu$zle their w~y througi a three page appl1ca~ion blank which only a Phi1*~elpb~ lawyer could ~U out. It contains itéi~is 1ike~thIs : * j ~ : ~ "Contingencies for nnforese~ eligible $sth related to loan ( p rcent of line 1)." : ~ ~ ~ "Refinancing costs, if applicable (terrnina~ion fee, prepayment penalt `, etc.) ." Worse yet, when the householder signs ~ his application, he agree -under penalty of a fine up to $10,000 or 5 years inprison, that he will abide y a five- page set of "terms and conditions." Those terms require that he do such things as these: Keep invoices, lists of materials, payrolls, conditions of employ: ent and other data and records. Put tl*e fix-np job out fOr bids by ad~vertising and solicitation i the job runs over $3,500. ~ I Insur4 that the eantraCtor does not~ discriminate against any race or creed 1n~ hiring. And help enforce the l~tw if the contractor fails t comply with Federal law in doing the work. The terms~ demand that the contractor o~en his books to Federal i spection at any reasonable time. Good, tight penny-watching, no doubt. ~But the result is that Cl veland's rehabilitati~~ workers must sit down at the kitchen table with every possible borrower and help him through this Iabyrh~th of redtape inch by inch With a staff of barely eight workers-knockers on doors to "sell" t e loans, estimators of jobs, inspectors and all-thi~ city has managed to get only one loan check ~ut of Washington. That one eame 2 weeks ago. The applic4tion went in last Decembe . Of 50 homeowne~,sI worked on house to house~ on1~' 18 have asked to go thro gb with the loan âp*lication. ~ Acting Vrban Renewal Director James I~ Th~iedman spotted the tr uble last year and pr~tested the bureaucratic tangle~ items by Item. Stephen Za~rae, assistant commissioner o~ urban renewal, sweating this pro- gram through, gave this diagnosis : ~ ~ ~ . "It's put together by people with middle-~lass minds-like mine-b t It's for people that these lawyers' and auditors' wotds don't api~ly to." There has to be a better way. If there iSn't, Uncle Sam will keep ~lmost all of that $100 million and slum blight will o.verwheljn neighborhoods hat now are sinking fast. Mr. VA~rIK. I would like to point put some of the things the edi- tonal taik~ about. ~ ~ The regulations demand borrower~ be able to puzzle th ~ir way through a1 three-page application bli4nk which only a Phil clelphia lawyer could handle. The Plain Dealer article points ou~ items in the applicati n form like- PAGENO="0283" DEM0NSTRATI0~ CITIES two bedrooi hree-bedroom I do not i on the prc this. In my distr~.. family incomes of ristructior ~1 ~.1...L ~, that the r ed to do apart this is a family tion; I am sure anybody into f with a 3-perce The peopi They have t rest of the p one else Lnto one of rules say lica- ~l take is financed 1 out farms. for the reclude any- for them. 869 t of line 1). penalty, et ~, he agrees, under will abide by a five- PAGENO="0284" n be de- to give ~wer the esire of level and sanitary are not a exorbi- need of sistance. dividual he is not ~~reeisely ponsible )(3) see- the time he mern- so many eople we atement, i will be profits. who are k this is ought to ward the Ls decent, L~ ifleQme ent here udied in into the sing our ~ helpful dents left project. stop the 870 `DEMONSTRATION CITIES ANL* URBAN DEVELOPMENr So wha~ I ask is that yout drafts4nship on this legislati signed fó~ the capability of the pe$ple to * whom we nee priority. ~ I .~ ~ Mr. BAEm~rr. Will. the gentIeman~ just yield to me to ai question put to the Chair ~ You wanted to know the the comn~dttee on the basis of this type project. I `think the committe,~ and I do thii~k the gentleman from knows, we are hopeful that we can obtain decent, safe, and housing, dwellings for people who ~ are in real need. W interested~ in creating a condition froit which onemay make taut prof1~. W~ are inthrested in ti4~ people who are in dir good hou~ing, ~good environment, ~ s*b~antia1 education-a This is tI~e purpose of this commit1~ee and not give any ii contractôt or builder any opportuni1~y to make dollars that entitled tb. ~ ` ~ Mr. VANIK. Mr. Ch~ii~uin, T conc~r with evei~ything and with what the chairm~ says. As a thatter of fact, I am re with the rest of the members of the committee for the 221 (d tions, because I was here in sharing your respor~sibi1ity at we passed that legislation. I did n~ realize, as I am sure bers of the committee did not reaiiz4 that we were creating handicaps and so many difficulties Thr the very group of ~ were tryifig to help. I just want tojsay, as I sum up my s that I hdpe that in the demonstratibn cities program, thei some easier formula or simplification of these forms. The chairman mentioned somethin~ about someone makir I think we have to provide some pr~fit incentive for peopl commercially in the business of rehabilitating areas. I thi an essential part of the program. But I do feel that we direct the rehabilitation housing and the rehousing efforts t( true low-income citizens who so d~p~ately need a place that safe, audi clean in which to live ai~l which is within th& capacity. I thar~k the gentlema~n. Mr. BAERETr. Mr. Vanik, you ma e a very splendid state and your testimony will be very car+fully looked into and s the interests of th~e people about ~hom you spoke. Mr. VANIK. I ask one other request. I would like to pu record some newspaper statements ~n project HOPE (ho people economically) which describe~ it and I think would 1 to the coprniittee. . ~ " Mr. BAIUU!YFT. That maybe done without objection and is 5 (The i~ewsp~per eippings~ referi4l to follow:) [From the Plain Dealet; Mar. 12, 19~61 AID COMPLAINS-ROUGH REHABILI~vA~IoN SNARLED IN REn T ordered. (By Donald $abath) Until last year, the word rehabilitatiou meant little' to the re~ behind in the Hough seetien of the Untsrei'sity-Euclid ui~ban renewal F~or 4 years, there was too much talk and not enough action t spread of blight and slums in the 87O~acre East Side project. PAGENO="0285" DEMONSTRATION C~TIES Then last thet -. c~ontract tions ~ sections of the I DEVELOPMENT 871 5, making available ants and low- rehabilita- area. ret than a star WASHINGTON.- ~1new'1 PAGENO="0286" URBAN DEVELOPMEWI (From the Clevel4nd Frees] GOING TO CAPITAL-HOPE SZ1~KS V~. B5~HAB~LITATION FuNDs A delegation from HOPE, Inc., a nonprofitcorporation to rehabilitate in the western Hough area, will travel to Washington next week to se financial aid. * ~ The Revere~id Walter A. G~ev~tt, Jr., j~aster of the Hough Aven Church at Qhrist, 1650 East 65th Street, w~l1 lead a delegation of abo meeting Tuesday with Philip N. Brownstein, Commissioner of the Feder Administration. . HOPE Seeks a liberalization of FHA rul~s on insuring 14~ng-term, lo loans to get a stalled rehabilitation prografri geh~g in the Superior~Ch a section of Ilough, west of East 79th Street. The area is not in an urb project. HOPE stands for housing our people economically. "We are especially interested in getting funds through 100-perceiit iii the Reverend Grevatt said. Under a section of the 19~5 Housing Act, PEA insures loans for reh for the full eo~st of acquisition and renovatiofri at 3-percent interest. However, under present rules, the Sup~rior~Chester area is not e such financing. I The area, according to William H. Hacl4man, Cleveland FHA dire the necessary qualifleations because of the~ tisk of marked deteriorat area. * . HOPE, wbi4~h was incorporated `ast June~ has been stalled because of funds. It has rehabilitated one structttre, a two-story frame hou~ Hough Avenue NE. HOPE also purchased two brick buildin~~ at 6215 and 6303 Belvide NE. The structures contain 22 units. Without more liberal financ however, HOPE has been unable to fix up the buildings. HOPE'S plea to Browi~stein would be ba~ed on its feeling that the potential fo~ rehabilitation if more liberal hancing terms are allowe erend Gre~1~ said. . Brownst~ithi, , hi a letter to HOPE, i~aid t~at the discussions will ce: search for ti~iy way theFHA program could l~éhélpful." Because Superior-Chester is not in ax~y ~ fresent urban renewal pro area is ineligible for many of the low finan4ing aids for rehabilitation. Residentscall the area "thèforgbtten Hofi~h." Among those making the trip will b~ the!Reverend Grevatt ; the Re bert Koklowski, pastor of Our Lady of Fa~1rna Church, 6822 Lexingt NE. ; Mrs. Pearl Crawford, secretary, 7019 ]~urnham Court NE. ; and 1~l B. Lewis, director of the League Park Neighborhood `Center. Mr. BARRETP. Mr. Fino? Mr. Fn~o. Congressman Vanik, I want to compliment you wond~rM pr~sentat~on here this mo4hing. I agree with yo hearted1~' ~with what you said and n4re particularly in ref 221 (d) (n,. the abuses, and I have bee~i very much concerned abuses on ~2i(d)(8). Let me ~say right here for the rec4~d that these abuses t cropped up in this program are not aUuses that originate fror islation itself. The problem is not in~the legislation. It is i ministration of this legislation. The fact that abuses have co the administration of the legislation is something that we hay cern ourselves with. I asked the Secretary of HUD to ~ubmit to me a report 221 (d) (3> a year ago and I only received it last week. For s son they d~d not want to give me thistst~idy and this report b would point out exa~tly what you are~pointing out here this 872 ThI~iMONS~1'RATION ~ CITlE~ AND esidences k Federal e United Lt 12 in a 1 Housing p-interest Ster area, II renewal I I `rtgages," bilitation igible for tor, lacks on In the f the lack e at 6516 `e Avenue ag terms, rea has a the Rev- ter on "a ram, the erend Al- a Avenue ~s. Archie on your I whole- rence to ~vith the I I I at have thele -` the a - ne from , to con- )n these ane rea- cause it iorning PAGENO="0287" DEMONSTRATION CITIES I want to commend th~ ge~ttlei spoke SO eloquently on thi~ subjec Mr. BARRETT. All time has ex certainly appreciate your corelng Mr. VANIK. Thank yo~, Mr. ( to be in this fine committ~e room. Mr. BARRETT. The com~nittee i morrow morning. (Whereupon, at 12:10 p.1*., tI vene at 10 a.m., Friday, ~arc1i 18, URBAN DEVELOPMENT 873 ho came here this morning and Thank you, Mr. Vanik. We ian. It certainly is a privilege ant to commend the committee. and in recess until 10 o'clock to- committee adjourned to recon- I A h re. 1 st~ PAGENO="0288" PAGENO="0289" / F DEMONSTRATION ~~~IES A t D URB4N. flEVELOP1~iENT ~ PRTD4Y, NA: ~ ~ 18, 1966 :~i OVSE 0 ~ Ri~1S~NTATIVES, SrBcbMi~rrrT ~ ~ HorSING OP THE COMM TT1~E o: ]3~ N1~ING ANTh CUREENCY, ~ ~ Wq~hington, D.C~ ~ ~ `rue subcommittee met, ~ ursiian~ t ~ ~ cess, at 10 a.m., in room 21~8, Rayburn House Office Eui dii~g, I~ ~ . ~ rilliam A. Barrett (chairman of the subcommittee) presi .ini. Present : Representative ~ Barre oorhead, Stephens, Widnall, and Mrs. Dwyer. ~ Mr. BARRETT. The committee wil ~ ou e to order, please. Our first witness this mo~ning w 1. b~ the Honorable J. D. Eraman, mayor of Seattle, Wash. * Mr. Mayor, it is certainly nice t a~ e you here this mornii~g. ~ We are looking forward to lie~ring y u t~ stimony. I see that you have an associate with you;this thor~iing t ud I was wondering if you would be kind enough to . introdi~tce . him' f r he * record,. in case one of the members may d~cide to. ask ~jn~ a q e ti n or two. Mr. BRAMA~. Certainly, M~. C~ i~ an. With me is Mr. Ed De~ vine, who is my administrai~ive assi~t n1~ for public affairs. Mr. BARRETT. Mr. May r; ~e c~ t~4 Ll~ want to make you feel at home here this morning. It ~s th i~ ôm of this committee to make. witnesses feel as comforta le as t] ~ * ~ ossibly can feel, and we want you and your associate to h ye ~hat ~ el~ g. ~ We have, too, here this r orr~ing, t~. 4ayor~ one of our very capable and knowh~dgeahle Memb rs ~vho m~ s from your great State, Con- gressman B~ock Adams. 1 l~new ~ before he camehere. He has been a great TJ.S. distra~tOt~ney d ~ splendid Member of Congress. :H:e would ~ like to hav~ t~ie opp~ th~ ty to welcome you here this morning. ~ ~ ~ ~ Brock, would you be kir~d c~iough td ntroduce your good mayor? Mr. ADAMS. Thank ~`ou, ~Er~ Oh~: ~ n. I appreciate very muc~l~ your c~ rt sy in letting me sit with you this morning and the cOnri~esy of t~ ~ô nmittee in having Mayor Bra- man appear befOre the com~nitteet~ ~ est fy. I. might say, Mr. Chaii~r~an~ that 11 ~f us in the Pacific Northwest, as elsewhere in the countr~r. are ve~" ii terested in the committee's de- liberations on this problei~i o~f ur~ n iass transportation, in partic- ular. ~ , M~ror Brath~i is an e±pert in~ t us field,. has spent a great many. . years both.frai~e1ing to cifies sucl'~ `S roronto to study their. system and at the present time th~ Seattle s ~t .in~-Se~ttie is in the proce~ of preparing a project and has aire d ~ ~ resented it to the Department 60-878-e6-pt. 2-19 875 PAGENO="0290" I 876 DEMONSTRATION CITIES AN1~ URBAN DEVELOPMENr of }IUD~and I think that perhaps 4e can assist the commi some expth'tise in outlining how it is t1~iat the cities have prese: cal problenis and perhaps your comnjittee can do this in ten swering some of these problems. So, it is a great pleasure for me to ~~ntroduce Mayor Bram city of Se~ittle and his assistant, Mr Edward Devme, to the tee, and we appreciate your courtesy. * Mr. BARRErr. Thank you very mu4h,~Congressman Adam I just want to tell you that t~his co4imittee will certainly u expert kn~wledge when we are markh~ ~p-this bill. Mr. Mafror, if you deci4e to make frour statement in full, be glad to ask you questions at the en~l of your statement. I now prepared to make your statement, ~rou may start. STATEMENT O~ HON. L D. BRAMA)1~, MAYOR OP SEATTLE, ACCOMPANIED BY EDWARD L DE~INE, PUBLIC AITAIRS ANT TO THE MAYOR Mr. BRAMAN. Thank you very muqh, Mr. Chairman. First, let me say I am most appreciative of this opportuni pear befoiie this committee and presefit our thoughts regard transporta~tion and anything else thatjmay be appropriate to sion. I might also say that we, too, are q~hiite proud of our cong delegation here, including Mr. Adams. We think we have coi in both long service and wisdom in bHl1ian~ young men to th of thinking in both branches of the National Legislature. If it is agreeable with the committ~e, I have a prepared s which we would like to introduce for 4he record as though it. read. Then, I will proceed to just m~ke some comments of and I cer1~ainly will be at your plea4ure to answer question have~any at the conciusiono~f my remarJ~s. Mr. BAjiincrr. You may do so, as you jplease. Mr. BRAMAN. The problem of tr4nsportation in a city Seattle is probably no different than t~iat in many other cities each one has its own peculiarities as ~o age, composition, ge~ and topography. We have been mos1~ encouraged, all of us, icipal government, by the renewed interest, the high degree of expressed by the Federal Government in the problems of oi We have. felt for many years that we ~vere sort of alone in th4 ness with `these prdblems, these trem~ndous problems. It most heart~arming and encour4ng 4 feel we now have som irt high places who ar~ also lookmg alj the problems with us. Keeping; cities heaJthy is a matter oi~ national concern, and c the health of the central core of cities ~nd the urban area surr them is of paramount importance. One of the reasons that is most impértant to maintahiing ti of a downtown area is that it contributes so heavily to the and consequently to the ability of the city to provide necess~ ices. If people are to live reasonabl~y safely and happily maintainir~g a healthy core to the co unity is essential.. tee with t practi- .s of an- n of the commit- ilize his we shall you are WASH.; ASS1ST.~ y to ap- ng mass he occa- essional ~ributed balance atement ad been iy own, if you such as though graphy, n mwn- interest r cities. wilder- as been friends a'tainly unding health ax base 17 serv- I cities, PAGENO="0291" DEMONSTR4TIO~ CITIE URBAN DEVELOPMENT 877 asive plai even :1 it rise nee. v, ~ are ac~l r downtown I e been for some time engaged mates a trat Dnstruction f ~ 25 years. s, because this e we presently would have to ~jorexpan& aot eve which~ Lned to. con~ PAGENO="0292" 878 DEMONSTRATION CITIES AND URBAN DEVELOPMENT for the latest technology that may deve4lop before we actually get to the point wh1~re contracts have to be let, ~nd we hope that there will be something b~tter than the standard typ~ of rail transportation such as in Toronto. I Mr. MOOR~EEAD. So the development *ill be a new system, and new technology will be very important? ~ Mr. BRAMAN. It would be, as in any cit~y contemplating rapid transit. It would be extremely important. This section right in here [mdi- eating] , from this point to approximate~1y out here, would be subway, because that is in a very heavily dev~1oped area, where obviously right-of-way on the surfact just simply is not practical, in order to get the size of stations, the switching, a4id all of types of thmgs, that would be required. I The rest of it way out here would be a I~ombination-a portion would be subway here [indicating]. Some c~f it would be cut and cover. Some of it would be surface, and some cbuld possibly even he elevated. The next step which we are hoping to approach, our engineering design would indicate this. The rest of the lines across here would have to cross a future third bridge across Lake Washington which is now in the design stage, and we are hopeful we can get approval by the State and the Federal Bureau of Roads to include on it a sep~rated right-of-way for the use of rapid trahsit, whether it initially starts out to be rubber-tired rapid `transit followed latter by some other 1~ype, or whether it initially is part of our rail system. The other lines undoubtedly would fr surface because the topog- raphy adapts itself well and would not b~ too expensive. At the present time we are relying dntirely on surface transporta- tion, city streets, a new freeway which is nearing completion, passing the base of the high hill and just to the east of our business district and which contains 12 lanes of right-of-way, 8 of them on 1 level and 4 at a depressed level which would be a4 reversible lane to the north of the city coming, in the morning, and goi~ig out, in the evening. This freeway is constructed as ` pa4t of the entire State system, and we are most happy to have the fr4eway. It started out with the idea that it would be a toliway until t~ie Interstate System came into being, and how it is, fortunately, not a 1~oflway, but it is a freeway. We are very happy with this freeway, but we would be v ry un- happy with the idea of another one ~1ike it, constructed so ewhere through the downtown business district, where we have, in ddition to the existing freeway a~ong the waterfront, a two-level viaduct structure which, in essence, is a freeway containing six lanes, hree in each direction. There is no land left for furthe~, highway constructio . r1~he problem a~ we see it now, as cars appr~ach the legal limit, 70 iles an hour, eigh1~ lanes coming in, they wo4ld have to peel off, an it is a rather smafl downtown business disti$t, and then become en aged in city traffic moving at an average of l~etween 8 and 11 mi]es n hour on the streets. It is necessarily inter~upted by traffic lights, and its becomes apparent to even a layman that we are not going to be able to handle the people, the approximat~1y 130,000 jobs that a e going to be in the downtown district within fhe next 20 to 25 years. PAGENO="0293" DEMONSTRATION CITIES ND URBAN DEVELOPMENT 879 Sc~, while we like the freeway, e o not believe that any possible solution lies in the expansion of t is aluable asset by way of further service construction for the use of in le rubber-tired vehicles, or even mass transit, operating in the sa e stream of traffic, with~ the `bus with the 60 passengers standing m ti nless along with the car with 1 passenger. In addition to which, we are concerned in Seattle, as all other cities, with. air pollution, and it s quite apparent that until some solution is found to the handle the mssions from internal combustion engines, vehicles gathered in grea masses on freeways are going to aggravate air pollution. The benefits of rapid transit are e 1 known, and I am sure you will hear technical testimony on that, t at ould far exceed anything I can give. However, it is apparent tha , i you can move, in our instance, in a subway fed by surface lines an y well-integrated surface trans- portation systems, tying into this mas rapid-transportation system, as many as 40,000 persons per lane, a mpared to approximately 2,200 persons per lane in automobiles at 1/~ persons per car, which is about the average in Seattle, and it beco es apparent that rapid transit can i~nd will serve the purpose and assu e t e economic health for the bene- fit of the entire city. Now, while it is true that our p i ular configurations differ from others, I am sure it is no different t 11 in the concept and m the im- pact on the core in any other city t at as had this same problem. There is still time in Seattle to p es rye an already existing healthy district. This is not a case of reha ili ation.. On the other hand~ time is running out, and we are quite co fi ent if we cannot get about the construction of this kind of system, it. ill not be very long before we will start to see the decay by way f he exodus from this district of the headquartering type of activit hich is really the lifeblood of our community. Now, I am also here today to su p rt the amendment to the Mass Transportation Act introduced by on ressman Adams. At the present time, as I previo sly stated, we have completed the feasibility study. We have made pp ication for $850~000 under the title 702 of the Housing Act to eng g in the engineering work upon which we can then base firm estima es f cost to go `to our people, first for bond support for our part of ti e rogram and hopefully to come to the Mass Transportation Act for su port to do the actual construe- tion of the first section of the line. The first two sections, the one lea in to the north city indicated on the map, and the one across the lak t the heavy populated east side, which is the growing bedroom com ii ity, will cost iii the neighbor- hood of $1'TO million for constructio . These are estimates, based only on the feasibility study and they c ul change with the engineering. We are told that we are not going o e able to get the $850,000. The most we can hope to get from title 7~ w iild be in the general iieighbor- hood of $125,000, and while $125.00 is onsiderable mo'ney~ it is virtii- ally useless for engaging in the eng iie ring of a project of this type, because you can't do a bit of it at. a th. e ~ ou have. to do it al]. It appears to us that the amendme it. ifered by Congressman Adams is not only an answer to this particular roblem in Seattle and in other cities but also makes a great deal of se se in general. Title 702 which PAGENO="0294" 880 DE~NSTRATION C1~TIFiS AND ~ ~tBAN DEVELOPMENT has to be us~E for community faciliti~s of all descriptions-4ewers, water systems, parking installations, ~nd everything of that natUre simply cannot be funded or is not funded to a levei to absorb he im- pact of the tremendous heavy expense irtvolved in rapid transit. The Transportation Act, which is set up, as you know, to *rovide funds for the purchase of equipment or~ construction, does not rovide any advance whatever for engineering,~and it just seems to ma e sense to me that the same organizations, the~sa~ineoffi'cials, who ma e deci- sions that a project is a feasible and i~aáonable one in which money should be ivesthd . by the Federal G4vernment with the be 1 com- munity for engineering, should be the~ same people who woul make the decision as to whether or not or to what extent money w uld be put in to support the construction. Sb, we do support very strongly Congressman Adams' amendment, and ~I would like to say that ~ speak here for not only the city of Seattle, 1~ut for the U.S. Confe ence of Mayoi~ and for the Natk~nal * League of Cities in support of this measure. If this amendment is enacted and a4vanees couldbe made f om the funds set up in the Mass Transportati~n Act, we can actually start to make some progress toward the objeetiv~s of this act. As it stands, there are few cities, 4 1 understand it, who are far enough along that they can actually logically ask for, and get, and use money for cOnstruction. If some of this money could be a vanced for planniiig, we would then be moving toward the time when t a cities would be able to present a proper case to the Federal autho ties for support, and would be able to go to their people for necessary fi ancing to carry the local share of the burden. We have: already used considerable fl'ederal money in this fe sibility study. W~ would feel that it wouldibe certainly a tragic aste of money and of our time and effort if ~4e cannot proceed with he next step. It is our estimate that even tflough having moved a fast as possible from the time, it would be so4iewhere in the neighbo hood of 8 years before the first train could rolil, and this is probably oiug to be about 8 years too late. I think with this I will conclude. I would certainly welco e ques- tions if the members of the c,ommitte~ have any that they w uld like to direct to me. Mr. BAiñETT. Does that complete yo!ur statement ~ Mr. BEA~MAN. Yes. Mr. BAi~iu~rr. Thank you, Mr. May4r. (The coi3nplete~statementof Mayor ~raman follows:) STATEMENT OF J. D. Bi~AMAN, M~&YOR OF SEATTLF, WASH. Mr. Chairman and members of the comi~iittee, my name is J. D. raman, I am mayor of the city of Seattle, and I am r~ost pleased to have this o portunity to share my views on the problems of urban mass transportation, * as they per- tam to my own city and as they aftect many other of the great citi s of this country. The problem of moving people and things through out cities ansi o specific points in our cities is every bit as importan$ to the physical health of ur urban- ized nation~as the problems of blight, poor~tise of land, inadequate ho sing and open space.; Indeed, they are ~o intertwin~i that to solve one Is to p rtially al- leviate the others. They sheuld most in Iligently. be attacked on all fronts simultaneollsly. PAGENO="0295" DEMONSTRATION CITIES A D tJRBAN DEVELOPMENT 881 You gentlemen are well aw~ti~e that o e~t or region has a ittonopoly on trans- portation problems. Cities v~bicb we e c~ri inally designed to give shelter and support for people have been redesig e to accommodate the automobile. The same machine which has serv~ed tis so 11 ~ so many areas threatens to become our master unless we give né~s~ thought to th role of the automobile in a city built for people. Let me use my own city ~or an exam 1 o what I mean. This is a map' of the comprehensive plan of Seattl~. t~ong d arrow, Seattle is walled in by Lake Washington en the east and J~uget Sou ofl the west. The heavy gray area rep- resents some of the most val~iable md tn 1 and commercial land on the west coast. This small orange r~etangle s ou business district. It is compact, ~ efficient, and serves as the headquarte S for much of the important business of the Pacific Northwest. It represents 7 /~ ercent of the valuation of the city of Seattle. The central business distri~t i$ restri te by natural topography to an area eight blocks wide~ With two~ fr4eway lr~ dy constructed and a third one in ~ the planning stage for this n~rrow corn Oi~, it should be plain that there is no space left for additional surf~ice trans r~ ion facilities. And highways coin- plicate our life downtown to a~ ii~toler b e egree. Highway planners dump th~ traffic ~ m 2 lanes of freeways on our streets, and we have to take care of t~es~ cars b p oviding distribution roads, parking and other services. We are ~lag~ied ~ ~r co gestion and harassed by air pollu- tion. Roads tear out valuable taxj~ayin $ erties and encourage the dispersion of the vital business of the heart area ai~ Mr ntually will tend to downgrade the entire tax base of the distric~. ~ccordi ~ o present trends, we will have to provide an additional 27,000 p~kii1ig sp ~ s I~ 1985-double our presbnt capacity. Perhaps most alarming Is that th~ nati~ir 1 rowth of downtown will be choked off. There is an almost predi~tabie lin~ Q~ how far and how fast it will grow before It starts to feed on itse~f. Compare that situation witl~ th~ `ben~l s ~ hich we expect from an integrated transit sys'teih. First of `all, a 1~ransit sy ill offer virtually unlimited growth and expansion to downtown, ~n a~iditi ji t~ roviding fast, `safe, easy access to the people who work there. ~ktc1i lan ~ f ransit can carry 40c000 persons an hour, in contrast to the 2,200 p~opIe ` ho can arrive on each lane of free- way. ~ ~ Where the freeway eomplic~tte$ do ~ , a transft system would simplify the problem. It delivers its ~assenge s al ost `to' the office where they work. No expensive distribution ~y~tem wo 1 b needed. It eliminates the park- ing problem and makes it easiei~ for `thos p ö~ e who m~ist drive. A. `transit system would add to the e 0 0 IC. health of the city by preserving and enhancing the primary ta~ .b~ue io t 0 Ity. Not only the downtown area would `benefit from this incre4sed vain , * bu the areas adjacent to the transit system would be made more val~iable as ~ 11. Seattle's `situation, while dii±eretit in ~ og aphy, is certainly no' more critical than that of a dozen other cI't~es in th~ a~i n. ` While we have the advantage of being able to attack this *robiem `l~e ote it has become totally unmanage- . able, we are beset ~ttth the pi~oblénm o~C ` a]~ U growth and development of our entire region. If we are to `sit~rt èonst ~i tiO in time, we must `begin planning at once. `, ~ On that point, I would like to s~ëak f an amendment which Representative . Breck Adams of Seattle has offered o `tl~ Mass Transportation Act. The amendment would provide ~ for a ~ost ~ i ni cant advance in `the world which the act itself encourages. In sim~lest t rm , the ~ propesed amendment would permit `the alloca!ted fund's to be used f r etailed planning, as well as tire presently authorized construction o~ new tr n's t facilities. In the terms of the limited funds ~ ic are currently available for the development of mass transit, this is th~ ~ es possible way `to broaden the ap~ plication of the act. `Oonatru&ion co'sl~ for rapid transit s~istems are so in- mense that a few rities could take al~ * he moneys allocated, and even they would not have `scratched the suiiace `of C e r i~ eds. By expanding `the act to in~lude do ai e4 planning, many `additional cities would be `able to get started o~i solving ` ~ i~ most pressing need. And the do- ma~nds for speed are a's critical a's ar ` be demands for n~oney. Each year that pa'sses, ~*ti~ problenis become tl1at * u h ore difficult to solve. Each year that passes, the ~1tiesmtist `tbrn to ~ t~ . ~ te ~o1utions which are not only PAGENO="0296" 882 DEMONSTRATION CITIES AND ~(JEBAN DEVELOPMENT inadequate and even dangerous to the 1ong~range health of the city, ut could complicate the metropolitan situation so much that solutions woul become prohibitively expensive. Planning :;tseif is a complicated, e~pensi~e item which takes years o accom- push. In ~atUe, we have started our ~annIng with Federal f ds made available th4~ough the 70 programs. The r~ext stage of our planning, the pre- liminary engineerIng atudIe~, are vital if ~we are t~ present a ceh~rent pie- ture to the totem of the Seattle ar~ 18 n~mths from now. We neec~ the pre- liminary engineering to give us the facts ~nd costs of the system p~ior to a vote. I do not want to belabor you with tI~e details o~ Seattle's progr~tm. I do not wish `to nhow you why I believe that the Urban Mass Transport~tion Act should be amended. ~ To begin with, no other source of money is available to the cities for `the rather large expenditures which are required for this stage of the planning. You are already enough aware of the financial pligl4 of cities to realize that we must use appropriate ~Federal programs if we are to ~olve our problems. The cities which are likely t~ have urgent transit needs ar~ the ones which are most likely to have urgen1~ financial problems. In Seatth~, we looked to the 702 ad ances for public works planning funds of the Dej~art~ent of Housing and llrba Develop- ment. ~ I This rev$ving fund, however, is ina4equ~te to the needs of transit planning. Transit plai~n1ng for a dozen cities like Sea1~tle would exhaust the fund and leave nothir~g for the equally demanding proble~ns of planning for neede utilities. The Department has been most helpful anc~ has made significant sugg stions on how some of our plans could be pared dawn to a size which they co ld assist. If I may interpret their statements, the ~Iepartrnent recognizes tha plann-i~g is a necessary step in transit development, 4tcknowledges that it shoul be finan- cially assisted, but does not have the capaeit~r to do so. At any rate, I believe that the Urban M~tss Transit Act is the veh cle which should be u$ed for Federal participation in *anstt planning. The roles~of planning and construction $ould be linked together. ne imple- ments the dther. Oonstructio~ is not possil~le if planning is not perfor ed. The two equal1~ necessary functions should be~ec~m.b1ned under one Iegisl tive roof, just as they~would be on the local level. Planning on this magnitude will not b4 accomplished by local go ernments unless the~ are supported by Federal fun~ling. I speak for Seattle, but I am joined by the National League of Cities a*d the U.S. Conference of ayors in asking for consideration of mass transit o*i the same basis as highw ys, which include plahning costs. I use the analogy of highways to point ,~up one ~of the perils which confronts' a city like mine. There are two possible solutions to the problem of moving people into and through our downtown ~reas : transit and highwa s. If the two programs are not put on an equal ba~s, then the cities of Amerj a are left ~it the mer~y of the bigbwa~ builders. An~ I believe that the highway builders have demonstrated that they are either i4sensitive to the real probl ins of `the cities or in~apable of meeting their dernand$ ` A look at any city during the rush hours ~s ample demonstration tha the people who have so creatively and Intelligently mt the demands of intercity ransporta- thai have failed when it came to intracit~ traveL Indeed, the very eads they have built have tended to destroy some M~the values which we strive to protect. To many of us, and to the citizens who 1~lve in urban America, it se ms logical that we should devote more energy and i~are money `to developing r~ id transit systems sensibly scaled to present needs ,and designed with fiexibiFty to meet whatever `tomorrow brings. No city is capable of attacking this job~witb its own resources. T at is why I urge yo~ to expand the act to include t~te ~letaijed planning functi n. Unless you offer t~bis opportunity, many cities wilibe unable to take even the oat tenta- tive steps~oward solving thefr tran~ortatIon problems. You gentlemen are well a~vare of the ~uge `amounts of money w ich are re- quired if our cities are to construct the Jtransit systems they need to survive. Only a fraction of the systems now in pla~inIng would use up all the authorized funds. seattle's contemplated transit ayst~in would cost perhaps $170 million for the first t~vo corridors. it is you who have to `determine the order of priorities. I might nly remind you that many cities cannot ignoTe their transit problems while the attempt to PAGENO="0297" I DEMONSTRATION CITIES N URBAN DEVELOPMENT 883 cope with oilier urban ills. It is a ma t r o the most urgent priority to them and to us. I do not claim that mass rapid tr sit s a panacea which will cure all our urban ailments. I do say that hew s lye our transportation problems will have an effect on every one o~ oi~ir `so i 1, e onomic, and physical problems. And I say that if we do not solve our tra s ort tion problems swiftly and with solue thought for the `ultimate consequence , e ill not have cities worth preaerving. Thank you. Mr. BARRETT. We certainly a p c site your coming across the con~ tinent from your great city of Se tle and giving us the benefit of your firsthand knowledgeand excellen ec mrnendations. You know, I think the commi t ants to brag a little bit. May I say, our Banking Committee is r u to have put through the urban mass transit legislation in 1964. h was a great breakthrough, and our ability to get it passed surpris m ny people. Title III of H.R. 1294~ would ov de enough funds to continue the mass transit program through s al 1968, and we intend to see that this program, which has such r at promise continues to have the funds it needs. I just want to ask you one que fon. I had the opportunity to see a very fine rapid transit systern-t e ra id transportation in Tokyo, go- ing from Tokyo to Yokohama. It as comparability, in the cars, with an airplane and the services of a. ir lane, and I think in some ways is much better than an airplane. he roadbed, of course, is extremely expensive. I talked to the president of t e J panese Railway. He said it is very expensive, but it is paying o e said it goes over 300 miles in 3 hours and brings p~sengers ri t i to the heart of `the city, and he said this is really attractive. I asked him this question, and m throwing it out here now to get your reaction-I notice you say U esire to put a bridge for mass transit, mass transportation, ov r ke Washington. Are we ap~ proaching this in the wrong conc t y putting it overhead or over a surface and not under a surface? Mr. BRAMAN. I think I could s er without a question of doubt in my own mind, that it would b u h better, if it appeared to be at all feasible, to start out with a tu e co struction. On the other hand, from the angle of feasibility, of a y possibility of accomplishment, this would so increase the cost an co plicate the program that I am afraid that I would find it di'fficu t to upport that as part of our mi- tial program. It certainly can c e long. There is nothing we are talking about that would change t The bridge we are talking about s oing to be built anyway. It is part of the State of Washintgon's ro ram, and as you may know, or may not, we have one floating brid e hich has been there for many years which became a free bridge u h earlier than anticipated be- öause of traffic, and then of course it be ame glutted to the point where it. was almost a barrier rather than h ip in moving the people across the lake. Since that time, a second bridge as been built., floating bridge, and this one, still bearing a toll of 35 c n a car, but in spite of the fact that it is in competition with the fr ridge just 10 miles away down the lake, it, too, is reaching its cap bil ty and it is starting to pay off much faster than anticipated. Bu n ither of these structures were PAGENO="0298" 884 DEMONSTRATION CITIES AND TfrBAW DEVELOPMENT built, nor ~v~s the~fre~way, with any co~itemplatitn whatever f r any support to rapid transit, whether it bec$~ne just for buses or an thing else. The third~ bridge will be parallel to the first bridge and it i going to be built ai~iyway. The question is : * Should we have a bridge constructed so ~ hat it would take the impact of 80-mile-an-hour trains, for exampi , run- ning either on rubber tires or concrete strips or rails or wh t have you-depending on what the latest teeh~iological advance woul be, or should the i~ridge be constructed againj as were the first two, trietly to serve th& automobile ~ ~ Atmi we ~,re 4üre that we can get thi . We are quite cohfident we can getthis dcci~ion made, that the brid e will be construc~d to provide right-of-was bec~ause if, by any ch nee, it cannot be used by us this will become *i~r~ly two. more lanes eversi- bie-two more lanes reversible for theh~utomobile to use. Sc~, at no point would there be a waste here, if at some futuretime the cothbincd traffic of automobiles and rapid transit required a new right- f-way. The tunnel could be built, and the old cbnstruction could still s rye its purpose anti beeconornically proper for~he use of rubber-tired v hides. Mr. BARRETT. ThanJ~ yOu. Mrs. Dwyer? . Mrs. DW~YER. Thank you, Mr~ Cha~irrnan. Section 301 o H.R. 12946 has ~he administration prOpos4i for mass transit. re you familiar with that section ? Mr. BEA~tAN. Yes. Mrs. IDWTER. A bill has been introdubed by our colleague, Co gress- man Widn~Jl. It is a simple bill whikth would increase the mount from $150 to $175 million, starting in~1968. Would you app ove of this amendment to the bill of increa~ing the amount? Mr. BRAMAN. I certainly would. Ii~ fact, I think it is a ost im- portant ~in~ndni~nt, and I think Con~ressman Widiitidl is c rtainly right o~:tr~k I In. the fi~~st place, assuming that w~ g~t Mr. Adams' am dment, and plans dodevelop.at a little faster ~ace than they are now,and we get to the point where the demand foi~ this support for cons ruction becom~s .a real.thing, and then the am~unt of money that is c rrently fi~nded, or the increase, probably will tiot be adequate but certainly it will be an improvement. The one thing that I see that is a tre endous improvement in Mr. Widnall's proposal is that it becomes a re urring appropriation rather than one that ha~ to be battled out at so e level every year which makes it impossibiet4 `advance plans with an degree of certainty. ~ Mrs. D~mt. Mass transit is some~hat. apart from other ousing problems. ~It may even bemore apart iEf~ve get a Department o Trans- portation. Would you favor passing, ias was done in 1964, a eparate mass transit bill ? ~ Mr. BRAMAN. This certainly would be desirable. I think it i a great idea. I am not prepared to know what complications would ii behind that kind of bill here in the National Congress. Assuming that there are no s~rious complications, I would . favor such enaction, es, but I think this is something that I wouldihave to leave the dete ination to those of ~ôu who are~f ace to face witl~ the problem. I PAGENO="0299" DEMONSTRATION CITIES N URBAN DEVELOPMENT Mrs. Dwrn. Thank you, *r. ~ yor. ~ Would you care to cornmer~t o h~ city demonstration bill which is beforeus at the present ti~ne ~ Mr. Bi~MAN. Yes, I woulU. The d&uonstration bil1~ of cou s , I a very intri~guing and chaileng- i~rig approach. We, in S~attie, h e b~en looking at it. We are going to continue to attempt to ~Eevø1op o ~kind tf proposal should the pro- gram become one in which appi c ti~ns are actually going to be re- ceived. ~ I have misgivings, ho~ev~r, o ~ bill, and on this program, be- cause, at this moment, if yoia wi 1 x~ ise me, I would just like to ex- press a little, I guess you nkigbt ca 1 t~ ~ hilosophy. ~ As I stated earlier, we ~iave be ~ m~ st. impressed and encouraged by the apparent interest at t~ae Fed 1 ~ vel in our problen~, whether it is in transportation,urba~i r~ne a , i~ the development of open space or a better city to live in~ in gen al. ~ I a~tn sure it has all been done with full sincerity. Thit ~s ~c~e sp nd ~ great deal of time on these pro- grams, and we spend ourowh an o~ ie Federal money, and we work closely with the field people in t ~ partment that administer these things, generally HTJD a~ ti~e pr s zit time, and then we find there is little or no funding back ~f the p o o ais that we are working on, this is a little disconcerting. ~ While I recognize the ~bvious ~va~ tages to those cities that might be selected, I would be ho~efül if e rogram goes ahead, that we ean present a good enough cas~'that S ~ t1~ willbe selected. Recognizing thatcertaib cities ~ s lected, the cost of this program will probably be, if impl~m~nte uc that will clean out the funds that I think could be bett~r u~iliz ~ t~ eep on track and going accord- ing to some kind of schedt~le ~n w i h great deal of work has already been done, and I refer to ~uch thi s a mass transportation programs and urban renewal progr~tms. e h ye a couple of real good urban renewal programs in Seattle. T~i y re dead in their tracks at the moment. We do not kno~v ~rhy ~ t e think it is probably because of lack Of money. I would much ~ th r see the funds utilized to carry forward jhe programs that are ~i e dy tried out and found to be workable. They can, an4 a~e b~i g mproved by experience. Per- liaps, this is just a person~~i philo~o h: , but this is the way I ~ee it. Mrs. Dwyiai. But you prefer tI~ ~v ~ start with 5-5 or 7-demon- strations rather than . go t~ a pro~r m of 70 cities which would cost a great deal more than $2 biUiô~ ~ ~ ec~ use it is a new program and we ought to start small, so to s~e~k, ar~d *j h three or five or seven demon- stration cities ? ~ Mr. BRAMAN. I wish I could an~ e~ more a~ithoritatively, and mci- dentally, I am not as authorjtati+e a~ that, and it is a rather broad question. I will have to ~dii~it th~ I ~m not firm enough in my own mind as to whether I understancj ul y what is intended under the demonstration city program. If what we are thinking of is ti~y ng to take a city and correct vir- tually all of its urban ills ~t one tir~i , ~ we come up with a city almost perfect, then I think we a$ *ay b t I the dream world somewhere. But, on the other hand, u~in~ Se t le s anexample, we have solved our water pollution probl~ms wit th metro program-which, mci- 885 PAGENO="0300" 886 us DEMONSTRATION CITIES AND ~ RI3AN DEVELOPMENT dentally, :was financed through title 7O~ to the extent of $2.5 ilhion, all of whiëh either has been or will ve~y shortly be repaid. ow we need help in the area of transportatiort primarily, and we nee some help in the area of urban renewal. If we had these progr ms in Seattle, I think we would be almost a ~demonstration city wit these programs w~ell implemented . Mrs. Dw~R. Thank you very much. Mr. BAm~r. Mr. Moor~Iiead? Mr. Mooi~ii~. Thank you, Mr. Chai man. Mr. Mayer, I commend your excellen ~ statement and analysi of the problems that face all of our cities. . I ope on the way back to eattle, you might stop over at my city of Pitt~burg~h and see our dem nstra- tion project called Sky-Bus. It is a fiflly automated vehicle r nning on rubber lures on its own right-of-w~y, and it might be ye well suitedtcusE~ in Seattle. ~ Mr. BRAI~*AN. Sounct~ very intere~tin~, Mr. Mo~$ijmsj. in this connection, 1~?Lr, Mayor, a number o us on the conunitfee have proposed an amen$hnent kr an accelera d pro- gram of research and deve1~pment and jdemonstration. Are you familiar with that amendme4t? ~ Mr. Bi~&~&N. Y~es~ reasonably so. Mr. MOORHEAD. To the extent that you are familiar wit it, do you support the i~a behind the amend~nent or do you oppose t? ~ Mr. BRAMAN. No, I support it. I think that the encoura ement in every possible way of breakthroug ~ s, of `technology, in this field is highly ii~iportant. Of co~irse, we ar aware that in the priv te see- tor, througI~ many of the companies whi are!engaged in the pro uction of equipm~it for this type of instaflati. ~; that there has been great deal of this iwork gone forward. As you are all aware, in San Franci o, they devel9ped a si op and demonstration track of sogie length, ~ n which they are tryn~ out today's latest known methOds of ears ~nd controls, of comput rizing, and so forth. So, I think that the prGposal that you refer t as one that would be funded is part of the program of the Feder 1 Gov- ernment in mass transportation and would be very desirable. Mr.MOORITEAD. Thank you, Mr. Chairman. Thank you, Mr. Mayor. I Mr. BAi~Err. Thailk you, Mr. Moorh$d. Mr. Maybr, thank you very much ~r coming here and gi ing the benefit of your experience and know'edge in this field. We are certainly grateful to you an~ your associate for com ng this long distance. ~ ~: Mr. BRAMAN. Thank you, Mr. Chaii~inan. Let me say I onsider it a real honor and privilege to appear before your eommit~ee, and let me assure you that we are aware of the fine work that th~s corn- mittee has done in many fields helping the cities, in the past ; so that we know this is going to continue. Mr. BAiu~rr. Thank you. j The nexti witness is John J. Gilhool4y, acting chairman, Ne York City Transit Authority. Will you~come forward ~ It is nice to have you here this orning. We apprecia e yOur coming to the District of Columbia. PAGENO="0301" 887 1~MONSTRATION CITIES ND URBAN DEVELOPMENT I notice, too, you have an associ te ere with you this morning. I wonder if you would be kind enou t introduce him, for the record? Mr. GILHOOLEY. Mr. Chairman, I isli to say I appreciate deeply the opportunity to appear before t is distinguished subcommittee, to greet you again, sir, and say " e lo" to Mrs. Dwyer, who is an old comrade-in--arms of the Eisen o er days, and to introduce my associate, Mr. Stuart Rothman, o erly General Counsel of the National Labor Relations Board a d Solicitor of Labor when I was the Assistant Secretary under Jame Mtchell. Mr. BARRETT. WTe certainly wan y u to be a part of our family, and any way you desire to offer our testimony will be acceptable to us. You may proceed accordingly. Mr. GILHOOLEY. I would like to sa that Mr. Bothman is special counsel to the New York City Trans t uthority I would appreciate. it if I might re d a seven- or eight-page state- ment. I shall read it as quickly a~ I an. I will not take tOo much time. Mr. BARRETT. You may proceed. STATEME~TT OP ~1OHN J. GILHOO , MEMBER, NEW YORK CITY TRANSIT AUTHORITY; ACOOMP N D BY If. STUART RO'TBMAN, SPECIAL COUNSEL, NEW YORK I TRANSIT AUTHORITY Mr. QILHOOLEY. Mr. Chairman nd members of ~ the committee, I appreciate very much the opportuni y o appear before you tc~ present my views on urban mass transit need a d the bills before the Congress designed to meet these needs. But I would like to make it clear t t e outset that I speak not only on behalf of the largest mass transit sy tem in the world, but in prin~ ciple, on behalf of all the people, th bi lions of riders throughout the Nation, dependent on mass transit. Gentlemen, these bills in their pres nt form are wholly inadequate to meet the transportation problems of u urban areas. The percentage of our people livi g in urban areas in this Nation leaped from 56 percent in 1930 to 7 p rcent in 1960. In 1970-only 4 years away-it is estimated that o e than three-quarters of our national population will be living i u ban areas. In terms of num-. hers, this means a jump in urban p p lation from less than 70 mil- lion in 1930, to 125 million in 1960, an a projected 155 million in 1970. The need for adequate public m ss transportation pervades the Nation. Cities from every section f lie country, from those with populations of 50,000 to the largest ci ies, require transit improve- ments to permit them to cope wit piraling urban populations. Urban mass transit, which at first ma 1 ok like a problem in running a railroad or a buslme, is at its bas a roblem of humanism in the metropolitan area. The New York City Transit Auth nt is charged with the respon- sibility for operating the No. 1 passe g r railroad of the world. Its complex police and operational problem provide other metropolitan areas with both a source of experien e d a testing ground for new programs rising above old limitation t meet. the challenge of trans- portation congestion in the ~ ~ PAGENO="0302" ~88 DEMONSTRA1~ION CITIES AND W~BAN DEVELOPMENT But oui~ j~rob1ems are basically the ~rob1ems of people-ri ers by the billions ~Iependent on public mass l4ransportatiou ; over 7 illion riders a di~; over. 200 million ~ montI~ ; over 2 billion a year. This was evidenti from r~ent e~perjence iuj January in New Yor City, when the ~ppb1ic was deprived of thejpublic bus and under round transit facilities necessary for a ba1an~d transportation syste Our most critical social arid economic problems arise in th cities. They are the crucial spots where the problems of the poor and he un- employed and the disadvantaged will ha've to be solved. The ou breaks of social unrest have been most violent hi the cities-not only in giants, such as Los AiigeJes and New York-~but in medium-sized, uch as Rochester, ~N.Y., I believe that an 4dequatc, comprehensi e, and balanced transportation program in th4 cities, including mass ransit, is vital to the success of the Federal w~4r on poverty and of th~ Presi- dent's demonstration cities program. ~ ~ I would iiJ~e warmly to endorse .an4 commend President J7ohnson and the. Congress of the United States ifor the courageous and rogres- sive stand they took in 1964~ to make mass transit legislation ossible. Much good has already beeii accomplisbed under the 1964 act. While I recognize, and commend, and urge full support for the Pre ident's programs to improve housing, and cr~ate jobs and training o portu- nities., I still think jnsufficient attentio* is paid to transportati n with the cities. . ~ ~ ~ ~ ~ .~ ~ As ycerkhow, most of our urban gro4'th has tnken place at t e edges and in the ~uburbs of the cities. No oi~ candeny that one of t e most important factors in stimuiating. this~ growth has been the reedom of movem~nt made possible by the private automobile. At t -ie same time the older city centers have deterirorated physically, have become the residence of depressed and disa4ya~aged groups, and are the focuses of the infectiOn causing our major city ills. The private automobile has created.other city problems. By dis- placing the mass transit systhm-witl~ public assistance-it as pre- empted urban space for highways that blight the area throng which they pass, ~nd its appetitefor parking ~ is voracious. 0 e result has been aldeterioration in the city's t~ base as more land in the city center is tkken by highways, and thej1~ss productive use of arkrng Another riesult has been the difficulty that the poorer citiz ns, who cannot affOrd private automobiles havb had in getting to jobs by pub- lie mass transit. The commission inhrestigating the first atts riot pointed tlii~ out. * . ~ ~ . There are other effects, such as the increase in air pollutio and the increasing ugliness of decay of the dity, which I will not t ke your time to describe in detail. * ~ Now, I am not here to advocate th~ abolition of the priv te car- or even the restriction of its use, TI~ auto is here to stay- nd God bless it-it has a vital plajce and a vitaj function to perform. ~ t is a re- source which we must use constructive'y. . And just as we have encouraged it~ use by providing billi ns upon billions in public funds to provide tthe highway facilities we need, we must now provide funds on relatitely the same scale for t e public mass trailsit facilities fore our cities And I submit the a tomobile can provide some of the funds for this purpose. The only ay to re- PAGENO="0303" up with supporte course, "baLLnce". i. DE tional, State, and local phases on rubber maximum ben then. ~a 196~ the Secret which estimated the portation through tentative estimate' exist, I t plannin of c `I what co this progr Congress AdminLtrator for mass trans~ ily a rough and ~nt needs may I the point DEMONSTEA~tO~ C~TIES~ ~ URBAN DEVELOPMENT 889 ovement to the reduce - that ---3 U- attract ed present rate PAGENO="0304" 890 DEMONSTRATION CITIES AND U~BAN DEVELOPMENT the program: structured as I have sugg~sted, we in New York would have been able to undertake a subway ~pansion program more than a quarter of a billion dollars on a 50-5@ matching grant basis. Un- doubtedly, we would have embarked already on the vital and necessary extensions to northern, central and southern Queens, and, perhaps, the building of a new East side line from the Battery to the Bronx to alleviate our terribly overcrowded T4exington Avenue line. I am certain that the story would be similarly striking and spectacular in every other ~ urban center of the Nal4on. I, therefore, urge you, gentlemen and Mrs. Dwyer, to think in t~rins of that kind of financing and to think in terms of the eommitme4 of funds to support the debt service of a capital investment rather t~an the amount to be used in the investment itself. I have cited mainly the benefits to tl~e New York subway because that is where our major problems are ; but in most of our cities mass transit means bus systems. I do not think these need be the bus we know today. I think we have the techkiological ability to produce a more comfortable and quieter vehicle *ith turbine engines that will not pollute the air. What is needed t~ produce this in addition to the stick of public insistence and the c4rrot of a large market, is the willingness on the part of the large m4nufacturers of buses, and, in particular, Eleneral Motors, drasticall~4 to step up its research and development effort for the gas turbine engine. In any event, whatever surface vehicle ultimately is produce , it is 20 to 30 times more economical in its us~ of space than the priv te car. And space is one of the most valuable éf our city's assets. In the larger cities, not only. the giants, but those of over half a million population-our Seattles, Pittsburghs, Atlantas, and W shing- tons-we need an off-the-street transit sj~stem. In these cities s ace on the street si*face has become so valuabl4, and so crowded that e must supplement the street system by an effici~nt mass carrier that no longer requires the;use of the streets-modem ~ubways and the better s stems we will develop in the future. The essential needed ingredient to priduce this balanced trari porta- tion system to revive our cities is money. The cities are at or n ar the end of their resources. Federal help isneeded, and the Congr ss had recognized the principle in the assistance it has already made av ilable. Your committee has before you for~ consideration the Pre ident's demonstration cities program, and the ~proposed Urban Devel pinent Act, H.R. 12946, Mr. Patman, and i~;R. 12939, Mr. Barre , par- ticularly titie III dealing with urba.i~i n4ass transportation. Title Iliwould amend section 4(b) 4f the UrbanMass Tra sit Act of 1964 to provide an additional aiithoifization of $95 million f r fiscal year 1968. It would also amend seciUon 6(b) to extend the annual authorization of $10 million for researcl~i, development, and de onstra- tion projects. . I am happy to vigorously support the principle exemplified y these bills, and the bill just introduced by Representative Widnall which makes mass transit aid a~ permanent Federal program, but I submit that only the surface of the transporl4ion problems of our ci ies will be scratched by the amounts authorized by these bills, unless the adopt Uue, financirtg method I propose. PAGENO="0305" 891 DEMONSTRATION CITIES AN URBAN DEVELOPMENT As I have said earlier, gentle a d Mrs. Dwyer, the present level of expenditure is not enough. e i America should invest, in my judgment, at least $12 billion ov r h next 20 years in America's mass transit system. This anaount wo 1 but 25 percent of the amount to be invested in the Interstate I-Iighw y ro~rani. These amounts could be used n as capital grants but as the annual debt service payments on a nat a investment in improved mass transit. Used in this way, even t es small annual amounts, such as the $95 million proposed in this i 1, ould permit an annual capita] investment in our transit plant ~ d quipment of $1.5 to $2 billion. This investment could be made b t e ppropriate local agencies in our cities and States, with the ann a bt service met by Federal ap- propriations. Exhibit A, attach , s ows Federal transportation ex~ penditures for all purposes ot e an rail. It is submitted as pertinent background informatio o ermit the $12 billion estimate of urban mass transit needs to be vie e in proper perspectiv& It is true that I suggest here an II recedented method of financing for this Federal purpose. But why h uld we not move forward in this way ? Every private corporation, nd probably every State and local government finances capital inv~ tm nt-and I use the word ad- visedly-in this manner. Our Fe er housing program is financed this way. It is a sound and logical p dure to pay for a capital in- vestment over the life of the facility. The sources of funds for such a in the same source as for the Federal n Interstate Highway program. In 11 son why the automobile-the creato o should not be taxed to help solve t ó mobile, its parts, and its fuel will grow as its use grows. This growt s when it is economically and special y includes full payment for the conse u use of highway funds for expansio o the development of the kind of bala c seek to achieve. I also believe the 90 much more realistic and has establi he applied to mass transit aid. i: would submit a]so that there us be a review of the matching features of the existing legislation, the 12i,~ percent limitation in the amount which any one State may ec ive. A recent published study by Sena or avits shows that the formulas for determining Federal and State p rt cipation are not at a]] uniform but are more and more related to nee a d numbers of people affected. To the credit of the Congress, I t in the needs of the people have become the guiding principles in r ce t Federal aid legislative pro- grams, such as poverty and educatio . ather than melting down the effectiveness of these programs, the un S authorized have been chan- neled toward those States and ]ocalit e where the need is most urgent among the greatest number of people n this respect, I think the 12% percent limitation on the amount whi h ny one State may receive from the aggregate authorization is unfai a d shortsighted and considera- 6O~-87S-66-pt. 2-20 vestment is also at hand. It is [S used to finance the $47 billion airness and equity I see no rea- many of our urban problems- 1. As a tax resour~ce the auto- tinue to be available, and will ould be encouraged where and istifiable, and this justification aces of jts growth. I urge the needed mass transit to permit d transportatIon system we all to 10 * split for highway aid is :1 a precedent which should be PAGENO="0306" 892 ~MbNS'TRATION C1i~ES A~D~ V~A~DEVU~LOPMENT ~ tIon should be given to eliminate it fro~~~ thé'iirb~m transportati n aid program. I do not believe there is anyone on thjs subcommittee who d es not recogrnze th~ need for continuing F4eral financial assistan e for urban mass ~ransit~ I do not believe th4 there is anyone who d es not also believe that every effort must bem4le to support the Admi istra- tion's desireto hold the line against ii4ationary pressure. A d yet, within the t6tal administration budget, ~ believe, that seen in p rspec- tive, the national interest in adequate ui~bantrans$rtation sy~t ms as p~%rt; of the new age of humanism that ~we are entering require a re- evaluation of needs inthrm~ of people setved. I do not think it is too much to ask that the authorization be based upon a continuing program of meanin~ ful size and I believe tI~at the suggestions I have made will permit it financing on a realisti scale. Thank you, Mr. Chairman. ~ ~ . ~ ~ (Exhibit A referred to follows :) , ExzmrrA Federa' ecope~u~iturc$ for other t14~ rail transportation [In billions of do*arsj Purpose ~ ~ ~ ~ ~ Calendar year 1966 (estimate) Oi~mu1ative to~a1 to date Airways ~ ~ Airports, ipc1u4jn~reseatch and administration ~ -t. Airline oashsubsi~ies formail and1oca1ser~,dce lines 4. Highways 4 :4. Waterways, in1au~, Great Lakes, intracoisstal and eoastatha~bors Total - .4. - $0.8 ~ . ~ . 1 4.4 .4 $6.7 2.7 . 1.1 48.0 7.2 5.8 65.7 Mr. BARi~rr. Thank you, Mr. G11h~h~r, for a very fine ~ nd in- formative statement. I gather you thiEk Federal grants shou~d go to t~o percent the same as for thEs highway j~ogram, is that corerct~ Also, I understand you received a grant under the mass transit pro~ram to help fiflthice about 400 new subwaycar~. Can you tell us a litt~e more about that ~ well ? ` [ ~ ~ . ~ Mi~. Gu4ooi~r. Are we talking ab4ut the funds we have ~iJready receiv4~d unkler th~ prog~m,Mr. Ch~tii4sn~ , ~ Mr; BAiuhs~rp. Yes. ~ ~ ~ ~fr. GILHO0LEY. I would be glad tdo that.~ I do iiot co e here and pose before this committee as an ezpert on legislation or hat the Congress should do in connection with~formulas. . I suggest t~ at it be reviewed. ~ Now, maybe 9040 makes $ense, and maybe it do sn't. I do beli~ive deeply this, Mr Chairthati, that there should e some sense of respoxisibility on the urban cen~re and the people in ti e urban cente~rs, thk~mse1ves, iô help themsehfes ~d my ~ own feeli: g deep within me ~s that a 50-50 matching gijtnt which is less than y~u have now, becau~e you can pay up to 662/3, a~ you know, would be so~nething equitable a~nd reasonable There are Jthose, and I speak for~ the au- thority, who believe that itshould b&?O-IQ, and there. are others who feel there should be other kind of breaks ~ ~ . Insofar as the aid we have received so far, irhas been in aluable. PAGENO="0307" I DEMONSTRAT31ON CXTIE ~ URBAN DEVELOPMENT 893 since to a certain these new cars w that the old cars deeply grateful forward, down Mr. BARRETT. C Could tell me som Mr. GILHOOLEY. ~ with those 1-~" is ~loubtful thased again b have ~ - of your cars ~orked very hard ~ bodybuilders to t~ a fan~astic~. tone for mass eavyweight car will be w day. y. ~rtainly welcome ~e subject and re a better mass b .the country. suggestions ~sonally, ap- [introduced I PAGENO="0308" I 894 O~STfl~~T~N C1T~S X~D D~BAN. D~WF~IJ~ ENT and also tIiêi~riti~isrns that also it only 4atche~s the `surface. I hi~ in the beginthng we should have a permt4nent setup rather than orne- thing that *e do not know whether w~ are goin.g to continue ~ from~ year to year~ ~ ~ ~ . ~. ~ What is the present probleni in New Yèrk City-what is your pera- tional deficit at the turnsti1e~ . Mr. GthHOOLEY. Let us take it ~ on a*~iii. the wake of the ettle- ment that we havejust made with the Trak~sport Workers Union, hich is the largest seittlenient that we have~4er had-that they hav ever received-I ~ 1~e1ie'~re it is 54 percent hi~h~r than the average ettle- ment over th~ lastlO yoare~-4ii the w~Lke ~f that, our projected o rat- ing deficit fOE calendar 1966is$81 nuihon~. ~ Mr. Wn~rAi~L. $8lmiIlion ? . ~ ~ Mr. GTLHOOL]~. ~Yes. ~ ~ Mr. WIDNALL. What would it have b4~en if the old scale ha been maintained ? * ~ . Mr. GTLHOOLEY. There are other fMtors that come into i ~, Mr. Chairman. ; Mr. WIDNALL. Can you break them do*n? . Mr. Gir~iidpLTET. Yes, lean, I think. ~ ~ We lost 1~3 daye of reveattie the first ~ days of January. I don't know the fig~ures. I can get these figrn~~or you. We lost I days of revenue. ~ We also anticip~te,'and;th4has been borne out-o~. r eco- umnic ~advis~rs havetold usthatbeicause `4f the strike there will ~ ~. loss in passengers riding both on our bu4 s and on our subway lines, which will cause a tremendous ides in r~vèir~ie. I had the figur once but it is not in my head now. ~ ~ But a combination of the loss of rei~nue for 13 days, the s~ of revenue because we have lost nders due~tO changed riding habi s as a result of th~ strike and the in~rea.se in~ the bargain offer and above what we had estiin~ted. It p~&iced,~I believe, an increase ~ n our estirnateof~(eficit ofsonie$2~1 to $80 ~nffljon. Mr. Wiñ~4~LL~ You have an addftionej$25or $30.million ~ Mr. Grr~i~or~i~. Yes, sir. ~ That flgu~e is subject to check, must say. Mr. WIONALL. If we adopted the met~od of financing by ann al ap- propriations on a Federal basis for th~ funds that have been raised by local `agencies or State ageneies, witat do `you estimate wo ild be needed for New YOrk City alone? Mr. Girii~oon~r. I have said that tile transit authority wo id be looking to~*rd-if I am there, I shall ~e driving-I shall be riving as hard a&I~can for a capital investmen4of a billion and a half ollars intotal. j ~ ~ ~ ~ Mr. Wn~ALL. Thatis just New York~ity? Mr. GILn~ooLi~Y. That wonl~1 be for ~he New York City ar a ; yes, sir. Mr. WID~ALL. Total in 10 years? Mr. QIL1JO0L~Y. Yes. ` ` Mr. WTDNALL. Roughly, $150 million? Mr. GILnooLEY. Yes. Thait's the ide~, Mr. Widnall. Whet er that is possible ~r not, I don't know. I hoj~e it will be because 1 .11 tell you, if I mar, we `are going to need it. et me tell.you why. PAGENO="0309" DEMONSTRATION CITIE lit is all very well for us t policies ~ and unification Qf trans I~ am sure you and Mrs. Dwyer k i on. I have tried to encourage i I mean bringing together all of t them all into one area so we can velopment and execution as well. It is well to say we must get e mass transit system. That's fi: e oiijroing mass transit system no v iiot at the present moment take a do know, we can't take any mor practically any of our li Les-th `Queens are intolerably vercroi Line. What we need, a: d need way line that will reliev the co: crow(led lines so we can `o to th say, "You can leave your ~~utomoi ii we aie not going to treat you 1:~: fortable and clean arni efficient ri why we are suffering a loss in ri i: important and that's why I say if I next 10 years to press as hard as I c I think that's about as rapidly a kind of money and those kinds o he `able to do that kind of job unles Mr. BARRETT. You seem to emi h that imlicate to me that any other t acceptable to you? Mr. GILHOOLEY. Monorail. `V~ a the concept during Civil War da s vated structure with one rail ai d through. We have looked at in see no real use for it for us in New Now, it may be that there may b Island-the Verrazano Bridge- ~ such as the sky bus which the ~ :` would be appropriate. We are n t things. I think I know what we i have outlined that to you. I wil need subways in Queens, East Side li Mr. BARRErr. Mr. Widnali? Mr. WIDNALL. Is it your idea t a interest on borrowings, would act a for your cars, structures, and main e costs? Mr. GILH00LE'r. Not for mainten tensions and equipment. The same- have set up in the bill would be very i Mr. WIDNALL. So it would not be take your wages and salaries, as well. Mr. GILuoorj&y. No, sir ; it would~] Mr. WIDNALL. That is all, thank ~r about balanced~ transportation tion' and this is a concept which : have tried to lead public debate us~e!I think we need it. By this iiepa~ata elements and' bringing a ~niore harmonized policy in de~ e out of the `automobile onto the areas where you don't have an ~e haveoneand wesim~ply can- ~noi~e~ as `you must know, and I ~gers during our rush hour on pende nt trains coming in from ~ `is -the Lexington-East' Side ly', is to build a supporting sub- on &n `those heavily intolerably )le' bf thè city `of' New York and `me. Wedo have space for you, ttle. W~ mill give you a com- We can't say `that now. That is So that timing here is terribly there, I shall continue over the or these extensions. ` `cai~ `move but we do need that nsions and we are not going to `at them~. e mndergroñnd subways. Does ~of surfa~e transportation is not I monorail-not monOrail, but fonorail to me is a modern ale- blights the areas that it goes il. Our experts have and we B, a bridge leading from Staten S some other kind of vehicle çhouse people are working on, sing our minds' to any of these lit terms of subways. And I so again, if you like. But we 5 extensions. e Federal contribution, to pay ~e paid interest on borrowings ce, but nc~t for actual operating ~, either. Just for capital ex- ther the same criteria. that you operating subsidy that would .~ ~ ~ ~ ~ A~ URBAN DEVELOPMENT 895 rt~~ ec VE~' )p 14 n4 ad `~ al U p~ ha it or rl~ 1$ te~ ci To t l3r az is~ ot~ U. PAGENO="0310" I 896 DEMONSTRATION aETIES AND BAN DEVELOPMENT Mr. BARJmTP. Mr. Stephens? Mr. STEPHENS. Thank you for giving us a clear statement. 1 was interested in your comments, and I wouild like to know further~about the idea of peopiebeing willing to leav4 their automobiles at h*me if you provid~dequate trauspørtation hit~ the city. I thought th~t was one if the$asoñs why we did not h&4 ~lequate transportati n, be- cause so many people were not using irka~s4ransportation syste s that we have. ~ flo you thii~k that is not reaijy one of th~ problems? The problem isthat theycaimot get theaccon~m ~ odations ? Mr. GILH~OLEY. I speak óniy for. tb4 area that I know ~om thing about, and that is New~York City. . Mr. STEPHENS. I understood that. Mr. GILHOOLEY. I dobelieve, sir, if we had thekind of mass ransit facilities that I can ideali~ze sitting. here~ in my mind, a fast, co forta- ble, air-conditionedmass transit' carrie4, that we could then p suade people who~are, morning after mornin~, sitting on the Long Island Eypressway~ whiehis called in New Yoi~kOity the longest park ng lot in the worl4-~cars f~r rnili~s sitting the~e. We would be able t go to those peoplø and say, "Look, what cioe~ it profit you to sit her every morning and every night in the snthi~4rtithe with your engin over- heating ? Why don't you take this modern mass transit syst that we have built for you and provided t1~ie buses to get you the. e at a reasonable cost, air conditioned in the. summertime ?" I thin if we could go to them with a modern syste~n we could persuade t em to come back to us. They are leaving us1~ow, because the facili ies are intolerable. They are not adequate. ~ Mr. ST~HENS. Thank you. I wa*ted to ~ develop that little further. llhad the impression that we ~idnot have the system ecause we could not have those things. I Mr. GILHOOLEY. T think they will c~m~ back to us, because think we cannot build roads fast enough to ~ive even the automobi es, and I mean the private automobile, the full ambience and scope t could have if there were modern transit syste~ns, too. Mr. STEPHENS. What you have said makes me feel bette about voting for the mass transit bill to.begi* with, because if what ou say is right, 20 years from now we will be ~4ble to retool and to ree uip the capital inv~stment out of the fares. Mr. GIrJItOOLEY. Yes, sir. I may sat, that as far as I am co cerned, as an obsei~ver of the Federal scene, Ifthink the passing of t e mass transit billhis one of the most excitin~ things that has happened in terms of the future of the cities of this Nation. Mr. BARRETT. Mrs. Dwyer ? Mrs. DWYER. Tharikyou~Mr. Chairrtian. . Mr~ Gilhooley, I want to thank you'~for your very construc we and unique statement, particularly as it concerns financing. My first question to you is : Mass t~ransit is somewhat apa t from other housing problems, as you know. ~ It may be even more i portant a part if we get a Department of Tra$portation. . Would y u favor passing, as was done in I964~ a separate ~ ~ transit bill? Mr. Giii~r ~ OOLET. I mustSay to you, ~Ets. Dwyer, I don't un erstand the implic~ttion of the question. ~ ~ ~ .. . . Mrs. DWYER. A separate bill from tjiat included in our hon lug bill this year? PAGENO="0311" DEMONSTRATIO~ CITIE URBAN DEVELOPMENT 897 time peo ~et, it may s U/J imilion a~ .:` rntry a 1 ~itw BARr president, P 1 ent, annua' is some ~s in the S~ assistant vice PAGENO="0312" 898 DEMONSTRATION CITIES ~ AND 1$TRBAN DEVELOPMENT Please 4~othe forward and be seated ji,t the witness table. ~ e are very glad to have you hei~ this morn~g. We want you to ~ eel at home. ~ ~ ~ I ~ ~ if you d~sire, Mr. Morris, to coimpi4te your statement in f 11, we may then ask you some questions after frou terminate your sta ement. You may start. ~ STATEMENT OP JOHN D. ~ MORItIS, ASSISTA~T VICE PRES DENT, SPECIAL S~EVICES, PENNSYL~Th~NIA MILEOAD CO. Mr. Mom~is. I do fei~l very much at $owe since* we ~are from Phila- dephia, an~d~I al$O mamtam a residence 4i~ N~ew Jersey Mr Oha~4n~ and membe~rs xf the sjibc~mmittee, I appreci te this opportunr~3t ~ ~appear before your coni~riitt~e to express our ews on H R 1~94~ We bthwe this legislatio4i will go a long way in carry- ing out the ~intent of th8 bifl to provid1h~iéntives tO the corn unities of our Nati~n~ ~ The section of this legislation with ~ccrhich we are ~partieula y con- cerned and upon which I ain"best qualifthd to speak is Title III Urban Mass Trni~portation. Thi~ ~alls for a$n additional i-year au oriz~- tion for theurban mass tran~p~rtMion~rog'ram by specifically mend- ing section 301 (a) and section 4(b) of the Urbari Mass Tra sporta- tion Act O:~ 1964. It provides that gi$~s may i~e authorize up to $95 millioz~ for fiscal 1968. it also ~thends the present act by in- ereasfiig th~ re~arch 4~mon~tration grt$~ts from $30 million fo July i, 1966, to $40!mihion for July i, 1967. j ~ The Peiiitsyivania Railroad has one ~f the larg~st suburban ailroad operations `in the United States. We~'have i~0 * ~burban tr ins per day operating in the New York metr~poIitan area of northe n New Jersey and 400 suburban trains operal4ng in the Philadeiphi' metro- pohtan area of southeastern Pennsyi$nia, which also includes the State of D~laware. We also have sui~in,ban seryices in the hicago, Baltimore, ~nd Washingtoi~areas. While tl~e ridership on these trains ouñts to about 115,0 0 daily passengers,j or 30 mfflions passengers ~r year, the operation f these services is *. losing proposition for thejrailroad. Even after r ceiving certain limtited local contract paymez4s, our losses in i965 o a full- cost basis amounted to $13.6 million. tWhile this was a sligh reduc- tion from previous years, due princi~ly to the fact that th city of Philadelphia has purchased for our u~e 38 of the most mode , high- performance, air-condition~d, suburbairt rail cars in the worl which will be paid for by the railroad thrc4igh lease rentals, it w s still a very subst$ntial sum that railroad fr~ght shippers should n t be ex- ~ected to s~ibthdize. ~ The cost~ of this public service cou'd be further reduced f adcli- tional capital expenditures could be m~de to provide more ne equip- ment, panting lots, modern maintena~ce shops, and so fort . More importailt, however, for the economyjand welfare of our urb n corn- munities, these capital improvements ih addition to irnprovin service for the public would eliminate the vry definite possibility f aban- clonment of many of these importan1~ services. Such aband nments have `already occurred in many parts of the country. Les than 2 years ago, in the absence of local finatcial assistance, we wer forced PAGENO="0313" DEMONSTRATIO~ ~ITIE to abandon all suburbai~~ ra~J se v once operated more trains thai politan area. Up* to the present ti4~ie, no ~ . been ~ applied to any pr~je~t in e by the Pennsylvania Ra~ilróad. such assistance will soo4. be for ~ improvements will be oi~ m~teri 1 ices for the benefit of the cowmu i A program to provid~ a fleet ~ sored by the State of New Jers ~ grants. Under this progra~n, t quated fleet of suburban~cai~s wi i cars that can be obtain~d. Thi State in helping it to cope wit in its metropolitan areas and ~ 1 living conditions of the State's m t ~ Many other programs of capi a to reduce the cost of providing t prove it and to help carry peak r have to be carried on already that the Federal Government I a because of its involvement, not i for the primary and secondary the extent to which the Inters~ a matching grants, is used to ca short distances over sections of farsighted officials, it seems sen alleviate ` this load by carrying 1 density travel corridors by rai. Transportation Act of 1964, th do this ~job without any Federa efficient rail systems to carry soi e do the job completely by highw to do was put up 10 percent of 1 would provide the other 90 perc i solely by using the Interstate FIi~ h more costly the additional high ~ hour commuter loads might have b I Quite properly, the admiiii: t Finance Agency have moved ye y izing capital grants under the only $320 million of the presen appropriated is no indication f grants. The need of our con ii preserve the present level of ser' it to meet the requirements of ti e braced in even the $375 million i that this real need ran into the b1] politan areas in which we operat services, the needs to preserve a d for the communities we serve r dollars. ) URBAN DEVELOPMENT 899k in the Pitt~b~iigh area, where we low do in the New York metro~ for capital improvements have ci to benefit communities served hope, in the public interest, that ing. We a~re confident that such p iii retaining essential rail serv- which we serve. w suburban railroad cars, spon- dependent upon these matching ate proposes to replace our anti. finest high-performance modern [ be of substantial benefit to the problem of highway congestion Lrther er~hance the economy ~and olitan areas. Lprovement's are needed, not just service to the public, but to im- hour loac1~ that would otherwise urdened highways. We believe direct interest in this program m the matching grants provided vay systems, but also because of [ighway System, with its 90-10 iousamls Qf commuters relative interstate highways. To many t~o use the suburban rail lines to ~ volumes of people along high util the inception of the Mass es and local communities had to if they wanted to use the more these loads rather than trying to On the other hand, all they had ~st and the Federal Government they chose to solve the problem T System regardless of how much a~nes needed primarily for peak rs of the Housing and Home Ltiously and carefully in author- ent legislation. The fact that ~ million authorization has been e lack of the need for further ties for facilities necessary to iuch less to improve and expand ure, is far greater than that em- am. Previous studies indicated . Just in the two major metro~ ~reatest amount of our suburban prove the suburban rail services tO the hundreds of millions of c~ di~ he ie~ :~ t1~ `Ti. [ Ii ut s1~ 13T~ gi~ e. es e1~ 0± S. e ti at 37 ti ft~ )g he ir~ si PAGENO="0314" DEM&N~STEAT[O~ CIflES AND ~ ~ ~BAN DEVELOPMENT The center city connection project in~Phi1ade1phia connectii g two downtown rail terminals and comprising a vital link in the redo1 ~elop- mont of the center city is a project which will cost about $45 m~llion. Th~ two railroads serving this area also need new equipment cbsting over $40 million, plus improvements to stations, parking fa ilities and facilities to improve the service aiid make it more efficien , in a total program costing upwards of $20~ million for this one * ietro- politan area ~lon~ * ~ Turning tp north Jersey, to meet th~ needs ~ of the public i L just the area ser~~ed by the Pennsylvania ]~iiroad, the equipmen pro- gram will cost about $30 million, plus anbther $20 million for el otrifi- cation and improvement of facilities onf one of the main route , plus another $20 million for station hnprov~ments. This gives yoi some small idea of the great need that exists hi portions of one or two f our major metropolitan areas. It isevident that the need is great, not only in the area we ser ~ e, but throughout ~he Nation. Local commui `ties and the States hai e seen the value óf~ preserving and improvin~. these ~, suburban rail si rvices and other pi4lic transporta1~ion operat~ :~ to meet their transpo tation needs. UntIl the Urban Mass `Tran~po tation Act of .1964, the e was no alternative buf to avail themselveè o ~ the 90-10 Federal ma ching grants for the Interstate Highway Syst m in the desperate, but some- what futile, attempt to solve this probh~m solely by higi~iways. ~ Now, there is an opportunity for a rational,,balanced solution to the prob- lems of our major metropolitan areas. . I respectfully urge passage of this legi lation. In view of the rgent need for these funds and the fact that he $95 million prograi level proposed for fiscal 1968 seems hardly ~ dequath. I would evei~ have the temerity~ to suggest that (1) in vie~v of the 90-tO matching funds obtainable . l~y local communities for sing interstate highw ~ys to carry comrni~iting loads that this honora le committee take a go d look at ~ the possibility of increasing the pr~ osed 2-to-i ratio of ~ rants; and that (2) since the Philadelphia a ea alone should have everal hundred million dollars, a much large4 figure be substituted or the proposed $95 million additional appi~opriation. In these c rcum- stances, these appropriations should be ektended above the $150 iillion annual rate for the next few years. Subsequent to this Senator Javits an~ Mr. Widnall introduc d bills to which I.pqrtainly and heartily subscrilfe. Thank yo~i, Mr. Chairman. Mr. BAiut*'nt Thankyou, Mr. Morris4 ~ The presi4lent of the Japanese Nation~d Railway `Corp., Mr. I eisuke Ishida, sat hi on a briefing with us in th~ early part of Pecemb r. Of course, he is quite proud of this new r~ilrOad system they ha e over there. He indicathd that he can take ~ glass of water, fill it to the brim and there is not enough vThration4 at any rate of speed t cause the waiter to even show a ripple on it,~let alone spill. I ask d him the question : Is . it possible that in thd far-distant future we might better build our short-run transit syst~ms below the surface ` yen if more costly. His answer irLdicwted to m~ that he felt under the ~ urface might be th~ proper approach in the fartdistant future. What s your concept ? ~ 900 I PAGENO="0315" DEMONSTRAT] ing Un trains per day are northern New Jerse deiphia metr~ - includes the ins ope~ ~ern Pennsylvar ~iat `~ lew York to high ~ -and rsey- that are proc- nh cooperation eliminate the we low, since oads-it is somewhat ohitan in the Phila- ia, which also PAGENO="0316" I. 902 DEMONSTRATION CITIES AND ~URBAN DEVELOPMENT What wasthe figure 10 years ago? Mr. Moi~.tus. In north Jersey, it is ah~iost the same, very litti differ- ence. If auythrng, a slight revision d4wnward. Inthe Phi1~a elphia area, it has increased about 10 percent. Mr. W~j~i~t. Increased about 10 p4~ent? Mr. Mox~s. At least 10 percent~-~-ab~at 10 ~rcent. Mr. Wm~Au~. What about the figu4es on the passenger tra c dur- ing that period ? Mr. Momus. Our passengers have m~ved up to the figure of 150,000 from 75,000 in those areas. If I may interject, I think one of th~ best examples we hay of the demonstration of what is known as t~e Levittown operatio which of course originates and terminates in ~I'renton on the north e d. In 1961, when~ this was done, where we p4t in lower fares, more f uent schedules, ~ew ~rs, faster schedules,j it jumped from ~79, 0 pas- sengers pei~yearto ~1ast year Qf 1,600,00Q. Mr. Wn~ALL. During that time, wh~,t change was made in he fare box? Mr. MORRIS. We cut the fares in about half. Mr. WIDNALL. I note in your thstin~ony, to meet the nee of the public in just the area served by the Pennsylvania Railr ad, the equipment program will cost about $30 million, plus another 20 mil- lion for electrification and improvem~nt of facilities on on of the main route~, plus another $20 million ~or station improvemen s. `What applications are p~iding at tl~e present time on behal of the Pennsylva4ia Railroad for assistance ~oir their existing prog ams? Mr. Moi4us. The State o~ New Jers4y ha~ an application u der the Mass Transit Act of 1964 for $5 milli@n in matching funds. The $2 million, they would have allocated forithe fiscal year 1966-t ey took that and are taking the $3 million th4~t they had budgeted f r fiscal 1967, making up $5 million and asking for $5 million from t e Mass Transit Act-this will replace 40 of the needed 80 cars for t e main line, Trenton-New Bruns~ick-Elizab~th service. This is efinite. We are awaiting the return of Mr. Pajiner from his operatio to talk further ab~ut what can be done on th4 Long Branch line. Mr. WII*~rALL. How long have you been waiting for a dec sion this? ~ ~ 1. Mr. Mo~as. I would say about 3mon~bs. Mr. WIJiNALL. I . always like to ma1~e this comment, a rati er gen- eral comment about a number of raijr~ads that I have bee on in recent years. There has not been much inducemer~t for commuter on a p ssenger train to take a railroad train `because the maintenance has een so horrible on many of the trains and mpny of those who are f reed to use the railroads during t~e subway ~rike in New York-t ey only did it by suffering and they. w~re~nott~ing converted because he cars were so filthy and the restaurants ~ weke so filthy, the windo s were cracked, th~re was debris in the aisles tfhat had not been swept out and. there was not anything at.ali to encoui~~ a person coming ba k. What is going to be donewhenyou ~et the new cars and the tations to improve existence maintenance, because you cannot see out the windows in some cars, and it is not a very pleasant ride? on PAGENO="0317" DEMONSTRATION CITIES D URBAN DEVELOPMENT 903 Mr. MoRIus. I aiii a commuter, ~know the train I ride on, but our to put some older cars in service. program. We clean those cars th rains and snow and so forth, of ~automobile does. But we have ha 1964 in Philadelphia that cost ~ inspectors on our necks, which is `we have not had a single complai Mr. WIDNALL. Mr. Morris, this ~are concerned, but I have ridde: trains and I know others have, an other to find the one seat to suit ~others are much too hot, and you t'~ and they say they are sorry, and] Mr. Moinus. It is true to a certai Mr. WIDNALL. It is quite obvi maintained too well on some of the Mr. Momus. I can answer it. speak about 1932 cars-a lot of ou no question that we cannot give t ~wasting money-costing us about in repair. I would think your question is, Even so, the savings would only ju iuot in any way amortize the cost. I was at a chamber of commerce was, you could have done it wheu~ $10,000. We didn't. Mr. WIDNALL. You spent all this. facilities and they are not going to Mr. MORRIS. This is why we hai to lag. The president needs a ho directors needs stockholders and I we need to do. Mr. WIDNALL. Let me ask this fu ~will not the railroads take a check Mr. Momus. I would be guessing Mr. WJDNALL. Are different peo ~on planes? Mr. MORRIS. We have just as goo ~ever will have. Mr. WIDNALL. I think the meth :and you have to many times stand :a ticket and unless you are there Ii not get a Pullman and I have ~ee seats where they could have purcF the railroads have been very backw this way. Lots of times people resist ch~ng~ Mr. MORRIS. We do have a rail ci hibited by some regulation or what ,on a train. I happen to ride. They don't ~ are generally clean. We had Lo have a rather rigid cleaning hly, but during the storms and ~, the outside gets dirty as an se new 38 cars now since early DO apiece and the city keeps ght, and I can truthfully say that score. bably very true as far as you many Pennsylvania Railroad have to go from one car to the needs. It is much too cold, somebody who is on the train ot know whether that is true. ent. at maintenance has not been S. cars, I heard Mr. Gilhooley were built in 1915. There is a good job. We are actually~ its a train mile to keep them .y don't you buy new ones?" ut pay the interest a~nd would ave gone out of sight in price. iig r~c~nt1y ~ and the question could have bought them for ~37 il)ileW equipment and new iiutaiuiecl. sea Whëi~i we have a tendency f directors and the board of the president. That is what question about service. Why me as the airlines will? but I would be surprised- ling with you ot trains than .le ~n thetrains as the planes saks technique is outmoded cng line at the station to get hour bef~e hand, you can- L~ trains riding with empty th~rti `on th~ train. I think catering to passenger traffic ard, but I b~liéve we are pro- T~[ t~ aècept personal checks I 0 rCl t~ ii o~L Di~ 1 L~ t I) I L 1: ~t ~ PAGENO="0318" 904 DEMONSTRATION CITIES AND 1URB4N DEVELOPMENT Mr. Wn*Au~. Can we not change tijat ? . ~ Mr. MôiIis. We probably could an4I I think we will look into iL Iknowwewifl. I *. ~ Mr. WII~NALL. I know you have so~ne very major prob1en~is with the railroads and it is very discouraging, toO. Because you are~hmited as to delivery of passeiiigers where buses and freight traffi~-they have limited possibilities as to where ~they can pick up and deliverS I know many of us havequeried many times why it is cattle r sheep~ seem to get better treatmei~t than passengers and are in clea er cars~ The interesting thing, you do not rehire cash in advance ~ n your freight del~veries,' d6 you? * ~. Mr. Mt~jns. When a freight car i~ delivered, unless a pe son ha~ credit, whjbh is limited to 48 hours, it~ is. practically cash on he line, on freight. ~ A mart put~ hischeck on tl~e.line. Mr. WIDNALL. But dattle and sheep c~in travel from destin tion to~ destinatiô~ while passengers have to pa~yin advance. Mr. Moi~ius. We havea rail credit caFd. ~ . .. Mr. WIDNALL. There are areas where. the railroads can de ote th& same time and effort to improvement qf passenger service and encour- agem~nt * of passenger service . as the~have done with respe t to the freight i5u~iness. I do not lthow tha$ you are eveE going tO reach a position w~th passenger service where ~pii. are going to be in t e black. But I do think deficits could be im4terially reduced and e coulit arrive at ~me sort of central approa~h when we have State cip and Federal he~p to help them carry it. ~ ~ ~ Mr. Moimis. We are optimistic on the corridor projects. f we do not make it there we better pass in .the.~onge. Mr. WIDNALL. Thank you very mu~i. Mr. BARRETT. Mrs. Dwyer ? . Mrs. DWYER. Thank.yo~ Mr. Chairman. Mr. Morris, have peipie who oper4~te these railroads ever . made it perfectly plain they do not want tojstay in the ~ommuter business any longei~ ? . ~ I ~ ` ~ ~ Mr. Mo~uus. Well, of course, I cai~ ~ctua1ly only speak for our rail- road. We are not against commuter ~ervice. We are psych ogically against losing money, if you can cailtit as such; We think hat this is a public need and therefore it is ~n area of public respo sibility. This may be argumentative, as the iawyers would say. B t this is our belief. I think the ~ demonstratbns of the Levittown ~ run, the activity of the city of Philadelphia by creating improved ser ice, that this is going to sp~tir the railroads to ~ better effort and its is going to awake even the public to using the i~pid transit method of going to and from work rather th~n sitting o~i the ~ longest parking ot in the world. We have tTiisin Philadelphi~tand we allknow wha we have in North Jersey, the tubes and ~ so f4rth. I don't think it akes too much-it takes mere push of the ava4iability, and technolo that we now have and as one man called it, "gi4tsy" decisions. Mrs. Dw~r~n. I get the impressiôn~that some railroads, in the East particularly, running in New ~Jersey ~do not want to carry c mmuters~ any longer and are not too interested in the State prop ing sub- sidies, if you like, to keep them running. Mr. M~ias. I read the papers. I think I know what yo refer to.~ PAGENO="0319" DEMONSTRATION CITIES A I will not agree that the ~ernisyl ~ personally proposed ~ to ~r, ~ rain e Jersey for 10 years and w~ ~wc~u~d f ~ Mr. WIDNALL. Will ~yoi1 yield before the Public TJtil~ies dornr I not even interested in a p~tia~ pa~ ~ payment for commuterse~vioe un e part of this is tied up with th~iz~ a i roads and unless they eai~ shbw they cannot merge with otl~ier~. Mr. Moi~RIs. This is a i~at1~er o that Mr. White-this is Mr. Whit his railroad. J~ ~ ~ . Mrs. DWYER. Mr. ~ Mor~$? h~Ow success they had in the C~ucágo light of development of other rail duplica~ted elsewhe~? Mr. MORRIS. Mr. ~Ieinei~an has several things going for h~m. Hi stations that we would call streetc~ per passenger of over 2~ i~iiles. average haul per passeng~r. ih th miles. When you are haul~ng emp of the matter. Also, he *~s ~ble We on the Pennsylvania Ra~lro~ electrification cate~ary an~I that s they have done can be dope ~i ii Jersey, if we~go thrc~ugh w~th the: has working with us, we~ are going at least break even. Mrs. DWYER. Thi~,nk you, Mr. Cii Mr. WIDNALL. Before y~u cilose, sufficiently important to be ~n ~ bill bill? Mr. MoRRIs. It is our bel~ef that: is s~ important that it is ce~tain1y-J gress, but it is our feeling th~t i1~ sho Mr. WIDNALL. Tha~ik you. ~han Mr. BARRETT. Thank you, Mr. your coming here and givi4g ~s th Mr. Momus. Thank you, Mr. Cliai~ Mr.. BARnrn~. Our ne~xt witness t ran, representing the Arn~ri~an Tra:, Mr. Cochran, will you come forwa I observe that you' have oi~e of O~ is always `a pleasure to gre~t a for see that we have with us today Jud to serve in the Congress with him in rese~itative from the State of Thin Interstate and Foreign Coniràe~ce. he heft the Congress to accept ai~i ;ap glad to `have him here today. URBAN . DEVELOPMENT 905 has that attitude. As I say, I at we would run his `trains in y would replace the equipment. ~thinl~ one gentleman testified 1' in New Jersey that they are . They are interested in a total ertain things happen. I think t~ merge with son~ other raih ir passenger service `approach, hic record, what you just said, ,bhic. utt~ranoes and position of `U account for the remarkable rth Western operations in the ? Why. cannot this success be a very good job. He has had ~ ehimin~ated, by permission, 22 ;ions. ~ He has an `average haul ailroads are, ~ for example, the iadeJphia `area. is less than 11 ts this is really the whole crux t~hie gallery,. ~toublè-deck , cars. ~ ~restricted b~ our overhead f, thing. Certainly, anything ailroads. I still say in New am that the Railway Division ke the best results and we will n. oil think' that mass transit is ; own, apart from the housing uld `stand onits own feet. It T to the judgnthnt of the Con- separate. ; Mr. Chairman. ~s. We certainly `appreciate efit of your testimony. orning is Mr. Carmack Coch- `ssociation. ase? inèr colleagues with you. it olleague and I am pleased to `an Howell. I had the honor irst term when he was a Rep- id sat on the Com~nittee on r four terms of service here, ment `a~ judge. We `are very r~ Ii~1 t t~ eli I 0 I r Q r 0 ne st~ LIS4 t rn 1 0 m 0, ~ it it I 1 sh bo 1, b !O1 ia~ n t-~ :Pl ±0 B, .ft in 1 S I ) PAGENO="0320" ThBAN ~EYELOPMENT rrnan. ~ Evan Howell, counsel ~ar today in support have a prepared stater ~ association will be pi ony, t~ he presented by chairman of the Was ~it Associaition and p ainly come in good c us and certainly we ~ I am quite sure the r bhis morning. ~ment in full we shall ii are finished. It is ent s been prepared and fi `~ that statement as hair. snppleth~ntal stateme ~ht about by some of t re beard this morning. d with my oral stateme ~d filed into the record ~lq', ?RESTD~ENZ NM ~K 4M~1~XCA1~ T~ANSJ 1~VAN HOWELL, WAS~ ~OCIATION ~ntlemen of the comm sident of Nashville T~ any, which operates a: he city of Nashville, T rta.tion service in the ~ated with other privwb ~ similar service in th Cincinnati, Ohio; WI ~ Allentown, Pa.; Al L; Eichmond and Nor~ for the f H.R. ent be- ~sented iy col- ington esident mpany nt you embers ~e glad rely up ed with ig been t, some 10 ques- Lt if the EVILI~E F ASSO- INGTON ttee, my nsit Co., 1 all-bus ~nn., and area de- ~ capital, cities of ~nington, ron and olk, Va.; sition of Co. and ension of I in H.R. ion, corn- thorities, d transit uburban, together ~9O6 DIJflVIONSTRATION CIflES AND Judge HowELL. Th~Lflk you, Mr. Chal Membersof the committee, tny name American Transit Association. I a~p~ 12946 and related measures. I do not cause the f~ll and complete views of t in a prepai*id statement and ora 1 testh league, Mr~ Carmack Oochtan. lie I Affairs Cofmnittee of American Tra of the Na~l±vn1e Trnnsit O~ Mr. BAmm Mr. Cochran, you ce and we are glad to have the judge wit 1;o feel at home here this morning a~i want to extend every courtesy to you If you desire to complete your stiat to ask you ~ne or two questIons when y 1;o you as t~ how to proceed~ Mr. Coc~n~N. Smee a statement h~ -the comini~tee, I would like to conside Tead intO 1~he record and tjien make ~commenth embodied whteh were broti 1~ions and some of the testimony that With that explanation I will proce~ written statement will be accepted a~ Mr. BAIUU~rr. You may do so. ~TAT~M~1T O~ CA1~ACK COCEI TRANS~ CO., REP~S~NTIN~ fl OIATIO*; ACOOMPANI~ B~ RON. colJNSJ~iL, AIVIERICAN TEANSIT A Mr. COOHRAN. Mr. Chairman and name is Carmack Cochran. I am pri fL private capital, local transit com~ urban mass transportation system in its envirqn~, supplying such transp ~scribed. Nashville Transit Co. is sill local tran~it companies, ~bich furni~ Omaha, ~ebr. ; Coving~on, Ky. ; and Del. ; H~risburg, Wilkes-Barre, ai Youngsthwn, Ohio; Baton Rouge, L ~nd Chattanoog~ Tenn. I am appearing before your conuhititee to present the p American Transit Association, of iicPhich Nashville Transil its affiliated companies are rnernbers~ with respect to the exi Federal transit aid legislation beyo~ June 1967, as provide 12946 an~l similar legislation. ~ S AmeriØn Transit Association is afroluntary trade associa prising i4 its membership private cap~tai coiñpanies, public a and rnuii~icipal operationS, transpo4ing passengers by rap oars, st~etcara, motorbu~es, and trgjley coaches, in urban, and interurban service. The mem!ers of this ;aSSOciatioi PAGENO="0321" ~, in the light of experience are 1. We look forward to what is ~gislatioIL. ~ ~fl~1 we think that nity for !iócal mass transit to [igatiQn to the American city r~rn befbre thislegislation was JRBAN DEVELOPMENT 907 ~ansit riders in all parts of the DEMONSTRATION CITIES D ( handle over 80 percent of all the 1 c 1 ti United States. Our company was the first comp y of its typeto have a demonstra- tion project under the Urban Ma ransportation Act of 1964. We, therefore, are familiar with the in er in which the act has worked. We are familiar with the procedu by which they are able to benefit. The demonstration project in N ville hasa three-pronged opera- tion. The ultimate was that t of those operations continued through their full course and as t e aftermath the local company has been able to continue a part of t service which was developed in those demonstration projects. It would have been altogether i possible to have financed those demonstration projects out of fare~ Ox revenue. It would have been unfair to the other riders to saddl hem with the burden of develop- ing the territory in which these d oustnttion projects occur. Yet, the demonstration projects have ulted in service being furnished in certain areas and in certain typ s where there was no service before and the studies made indicated t at actually new ridership was developed. We at Nashville Transit Co., of o rs very much encouraged by this legis ior truly a long-range program under e 1 this legislatioii has offered an op rt develop aiid grow, to carry out i S ob where transit Was faltering in that og enacted. We American Transit Associatio bers have endorsed this legis- lation. They would like to see it o i ue and the amendment which has been offered by Widnall or the e a ate bill which has been offered by Widnall to us is most encourag g. Tue bill of Mr. Widnall as I understand it would amend the s - all d Iong-r~nge program under the Urban Mass rfraflsit Act of 1 4 nd his amendment recognizes long range. In transit planning f r 2 ears, this is hardly bug-range planning and if the aid is left on t b sis of 2 years, in my persona~l opinion, that might encourage has y ac ion and cqubd develop maybe ill some ways where comp.ai~ies w u d e-where local operators and private companies and publicagen&e ~w uld move a little more rapidly than they otherwise would if they h d before them the idea this was a long-range program. Therefor , it S the position of the associa- tion that Congressman Widnall's pr ch could well be given very serious consideration and we woul 1 ke to see that approach adopted. At the same tune we would hop th t the demonstration program would not be abandoned but that it ul continue, at least for another period of 2 years, and ~s the mayo ro Seattle suggested this morn- mg, that that could embody an e gi eerin~ and planning feature which in and of itself could affect ec n mies in the use of urban mass transportation aid from the Federa so rce-a program of planning and engineering could r~s~ilt in a be te program being submitted for consideration by the agency which i t handle the administration of these funds. So that without furthe aboration, the position of the American Transit Association is tha th Urban Mass Transportation Act of 1964 has been the most encour gi g development in the field of local mass transportation which bias oc urred in the last two decades. 60-878-66-pt. 2-21 PAGENO="0322" had ~the e appli- as a pri- gulatory ~onstra- s to the hich the ipon the ~yse1f to e to ask. 908 DEMONSTRATION CITIES AND~ URBAN DEVELOPMENT d on the The program we hope wilibe continu~d and will not be limit4 long rang4 to 2 years. The deniionstratiom program will ~4ibody, we hope, a proce~lure for funds th ~e made available for plt4*ing and engineering. ~ insofar ~as the private c~pital oomj~mi~is are eonce~rned, as~urances are given in the pr~ent la~ that th~ thmds will not be used as many of these `companies fear, to forceth~m into public ownersi ip. We do suggest that the Congress'might ~give full consideration to such provisio~ as might assure * the . private capitsi companies hat this money will not be used to force them ~ntó public ownership a d possi- bly consideration could be given to making some procedure vailable whereby the private capital eompany~could be the applicant. It can- iTot be un~erth~pr~s~nilegisiation, ~ Possibk~! that may: b~ d~ine ifthe fli~ratè capital company approvn~1 t~f ~ts loe&l r~gul&~ory agei~y in connection with t cation wh1~h~ is sithmitted~ We, in N~ShviHe have been able, vate capital company through the tcooperation of our re agency, to~ make application for and ~io have the benefit of de tion projects by the simple procedure of committing ourselv regulatory agency that we would underwrite the one-third ~ local~gove~nment is required to furnish. With that statement, Mr. Chairmaii, and relying of course statemei~t~ formal sMtemeRt which wi3sfik~d, I would submit] any que~tionsthat any member of th~ committee might desi Mr. BAi~ugi~r, Thank you, Mr. OOch~an. (The c~mplete statement of Mr. C~chran follows:) STATEMENT: OF GARMACK ~ REp~ESENTING THE AMERICA]~ ASSOCIATtON TRANSIT Cochran. company, of Nash- the area. ital, local a, Nebr.; `, Wilkes- uge, La,; Mr. Chairman aud gentlemen of the comipittee, my name is Oarm.ac~ I. am president of Nashville Transit Co., a j~rivate capital, local transi which operates an all-bus nrb4ui mass tran ~portatjon system in the cit yule, Tenn., and its environs, supplying su h transportation service i described. ~ Nashville Transit Oe. is. afilli ed with other private ca transit con~panies, which furi~ish similar ~ rvlce in the cities of Oma ~kvington, Ky., and Cincinnati, Ohio ; W Imiugton, Del. ; Ilarrisbur Barre, andT Ajielitown, Pa. ; Akron and Y ungstown, Ohio ; Baton R Richmond 4nd Norfolk, Va. ; and Ohattano `a, Penn~ I am ap~ear1ng before your eomthittee to present the position of American Transit Association, of which Nashville P .nsit Co. and its affiliated ~ompanies are membe)rs, with respect to the extenSi U of Federal transit aid egislation beyond June 1967, as pr6vided in H.R. 1294 and similar legislation. . American Transit Association Is a volun~tary trade association, con prising in its membership private capital companle~, public authorities, and municipal operations, transporting passengers by rapi~l transit cars, streetcars, otorbuses, ~tnd trolley coaches, in urban, suburban, ai~d interurban, service. Tb members of this association together handle over 80 r~ercent of all the local trans t riders in all parts of~the United States. In cveryjcommnnity there is a ~large an4 ~ubstantia1 segment of th populace which 4e~nds partially, an~ in some instances entirely, upon the ocal mass transportai~ion system for regular transpo4ition. Use of the local trai sit system may be be~ause of the ~cono~nic status offthe riçler, the economy of the trans- portation ~rvice, theconvenienee of the se~vlce, the~age of the passen or, or the passenger'S condition of health. In every dommunity there Is a growi g number of elderly people who do net and cannot dr4ve an automobile. There i also that large group who are under the age to qua1i~y for a driver's license, an while our national e~onomy has reached its highest ~tate of affluence, still ther is a large group of people whose economic circumstthices will not provide for he second PAGENO="0323" DEMONSTRAflON CITIES A REAN DEVELOPMENT 909 ~ej~ied ~ - ~- local mass trans- e because of the ~sons each weekday been the most of local mass t the past 20 s----. reoriented thems characterized the optimism. tnsit i to belabor the mObilit~ PAGENO="0324" 910 J~EMONSTRATION CITIES AN local government to have flnar~ced complet resulted ir~ the furnishing of new service service needs were developed by these p local regulatory agency, the local governr Federal aid was obtalned~ and some peel . now have and now use transjt service. T~ embodied in i!eports which are available f would pro~t1t by the experier~~e just as throughthese dernmstratjoj~ projects a~ A gener~1 examinatIpi~ of~the use of 1!wi aid to transit di~e1oses ~ grantä have been bus cernj~ny; fOr the pureI~se of rnot~ garage sites and to unprove shops and eq radio un1t~ ; for~ the h~ipreveinent of stat newly planned transit ways ~nd pedestrh tension of rapid transit systems ; for new and for other improvements ~n plant and demonstration grants for bus and rail serf bus system design for cities ç~f various siz? Jar or special services in central busine* maneuv.er~tble bu~es in small city servic 1~or expre~s bus services ; for study of th appropriate informatl~n aids to transit ri of use ~k1~ linass transit ty a ~rewing sab gineering 1an4~ rqpid transit extensions ; ordlnatio4 of commuter rail~oad servkes. rail system ; for studies of automobile-: services ; for rapid transit rare collectio ordinatioii of projected `rail, rapid trans metropolitan area ; and for computer sc of all of these demonstration projects hav( ports, creating a vast source and fund of by which the needs and demands in any ~ against the results obtained through d~ munities. Through the Federal aid t~ transit, t ~` to the fa~t that to meet the demand of made forjadequate transportation 1~aciii munities. ~ The importauee~ ~f the~ dema ~ through greater efficiency In the ~e of and the e~tlciency of the urban ti~nsit ye hasbeen emphasized. Further, through Federal aid to trai~ awakened to the fact that ` essential tr~ be planned, along with the planning foj integrate4 into a balanced transportatioj portation modes. This new legislation ~: public support that long ` has been enj and thus has attracted the constructiv planners, and the a~chiteets ~of urban more Ii~portant, Federal aid to tran under h~ve stimulated the estabUshme State i~n41 local transit aid as indicate legislatk~n. Loca,l governments through observin have hnd their attention focused upon t munities3 with the result that urban tr~ from local government than it has rece munitles served by private capital trat Chattanooga, Tenn., with which I am between ` local government officials. and1 is to encourage contlnuanc4 of private $ time to ~ise the position oi~ local go~ei$ encouraèe the use and growth of local ~ portatiO~i in the general community go URBAN D~V~LOPMEN y these d1~mon:stration pro n areas of the community ejects. With the coopera ent and the private capita ~le who . did not have tra ie results of these project r communities similarly si L~ experiences in ether c ava~1a~le `to us in Nashvi a.he~etofore appropriated ~ad~ for the pureh~se of :~i~ees ; for the purchase ip~ept ; for the installatio ~ris, stops, shelters, and ii ~ malls, for the imprevem apid transit cars ; for new service equipment. Ther ice and reduced fare exper `5 ; for the use of small bus S area ; for tests of smal `; for contractural fare b monthly transit pass ; fo ~rs in using the bus syste jte community ; for rapid ar improvement, modificat nU facilities; for studies 11 comniuter and bus-ral study and experimentat b, and existing bus servic eduling and run cutting. ~ been embodied into compi information for the tran articular community can monstration projects In s ects which where tl~e ~on `of the company, sit service have been uated who mmunities le. or Federal ssets of a f garages, of mobile hting; for ~t ` and cx- ~erry boats havh been ments ; for 5 for regu- and more a services; studies of L ~ for tests transit en- on and co- f a modern commuter m; for co- S in urban The results hensive re- it industry, e measured milar corn- ` publjc conscience has bee iture urban growth provis ea in4oth new and older ~: for the control of traffi wee perperson moved is ide in this facet of urban I awakened on must be urban corn- congestion ecentuated, evelopment sit, the public ~ consciousn ~nsit ~ services in an urba , overall community deve 1 system along with other bas given to urban trans yed by the automobile a attentlon of the public gr~wth and development~ it and the various pros 1; of direct and effective by recently enacted Stat ;s has been area must opment and local traps- t a type of d highway, ificials, city And even rams there- rograms of . transit aid ` developments In other ~e position of transit in th Lnsit is receiving more ati ved in the past two deca Lsit companies, such as I ~am1liar, a spirt of coope transit officials, the purp apital in local transit and unent to the fullest extei Tansit as a means of mdi L Local transit Is genera unicipalities jr own corn- ~ntion today es. In corn- ashvllle and ation exists se of which at the same I possible to idual trans- ly a publicly PAGENO="0325" DEMONSTRATION dTIES ANt regulated industry. There is ample oppo local government and the local transit cor ernment and the local transit operator a Federal Government under the Federal t immeasurably toward the improvement o toward the transit operator, and has requi its attitude toward local government. The opportunities offered under the exis transit have been recognized both by publ: capital companies. Many of them have ac had loans, grants, and demonstration proj what is happening to the communities whi now have applications pending or in th been accomplished but much more remain~ eral transit aid legislation Is essential to prosperity and effectiveness of which are i to be preserved. Mr. BARBE~TT. Just one short questi Yo~i are a private operator who has eral mass transit program. Do you crimination against private operatoi program? Mr. CooIIit~N. No, sir. I have fou relationship with the administrative ination against the private capital coii company is already under the burden. lug out some arrangement with the lc Government to obtain the approval c local governmental agency as the ap tence of the cooperative relationshi local Government, then the privat Now, there is of course no way that ti date can directly make an applicati( law, as written, there has been no di: the administration of the act. Mr. B~nRicrr. Thank you. Mr. 1~ Mr. WIDNALL. Thank you, Mr. C Mr. Cochran, I am very grateful a the committee are for your staternei perience on the programs that we ha gestions for the future. I would like to ask you this : Wh~ Federal aid for physical improvem nance shops, and other things as ag& Mr. Cool-IRAN. If I had to make t eral aid for capital improvements that-I am somewhat reluctant to possibly the Federal Government. in the capital improvements, but won. tion of the local mass transit compa something of that experience that is choice I would prefer the capital assis Mr. WIDNALL. You have one or t have one or two examples that you c demonstration projects where it has I have `been? Could you give us that it tn tc Ii d EiBAN DEVI~LOPMENT 911 itty for cooperation between the iy. The fact that the local gov- `equired tQ participate with the ~it aid pi~ogram has contributed Le attitude of lOcal governments bhe transit operator to reevaluate program of Federal aid to local operated `systems and by private ed the challenge offered and have approved. Many others, seeing ire partlcjpating in the program, nrse of preparation. Much has be done. The extension of Fed- preservation of an industry, the pensable if the American city is I would like to ask you. ~ticipated in the present Fed- love there has been any dis- a the administration of the iothing, certainly in our own ney to indicate any discrim- ny. Now, the private capital, .der this legislation, of work- Government agency or local at least have the use of the nt. But,' assuming the exis- ~Ween the company and the )ttal company can proceed. ivate capital company at this But' I ha~ found under the iin'ation to my knowledge' in di? nan. ~ know the other members of .d your comments out of cx- ied so far and for your sug- Tour position with regard' to like' parking lots, mainte- traight operating' subsidies? )ice I would prefer `the Fed- r than the subsidy. I say ito a situation where I feel 0 further than participating into the control, and regula- The subsidy might connote loping. If I had to. make a ~amp1es-do you~? Do you ye us of aôtual value of the ielpful and what the results V `p~t bi~ii cl~ ct~ cli t Ii idi )n' .bø] Si ~4, .ica rjx p 1E xi: Sc Ti Ii it `V dij dii i~: st ch th~ b ii ~n4 311, PAGENO="0326" I out i the aban- ~iat that a waste of ~1se. ~vasn~needof where t. ere were lesson we lear ed from ,,however, that were going on i to comp] ~tion. 0n of them co11eg~ s-a dire t service. * ~.-wh~ther you ~o avoi~1 coming trips qoming to )okes ~ a wheel. `""~aged us types of operat two- a ies. i that. ~er two p at the ~ iey went thr was a si * ~ two hosp Itwasan ~ tto ~ would have sufficient patronage in down to the downtown transfer area the downtown transfer area and ~ That was a success, a complete su in that operation, but it has enco operation~ andI may say that the mission olf that type operation she * * * * the riders were completely new ri ~ ~ us in the t ness in iily community wss fantas~ iecause I have heard ~f people trying to get new riders on the bus. ~ We started out trying to get new r~iders but our program ~nd effort has been to try to preserve the riders that we have and to pick up 10 or 15 percent of the passengers as new riders was-well, i was cer- tainly encouraging and an illuminatiiig experience. The third operation w~ to ~ satei~ite community, service lite comn~mnity connecting with .. an express service dowi~tow out gohi~ into the elaborate details t~at service was-with s ming amj adjustment, and cutting o~i where it was develop was not fleeded-that has continue4l today and we have operations in Nashville which we woi~Ed not have had. Mr. WIDNALL. Thank you. Mr. COCHRAN. We have also und~er consideration other things of thatnaturenow. Mr. BAmi~rr. Mr. Moorhead? Mr. MOORHEAD. I have no question~, Mr. Chairman. Mr. Bi~Riu~irr. Mrs. Dwyer? ~ Mrs. IJ~w~rio~. Just one question. ~ Cochran, mass trans t is apart from oth~r housing problems. It mji~y be even more apart i ~ we get a Departm~nt of Transportation whic]~ has been proposed. ~ rould you favor passing, as was done in 1~64, 4 s~parate mass transit ill rather than having it included in the housin4 bill? Mr. COCHRAN. Given the choice, Nrs. Dwyer, yes. I th nk it has been phrased this way, that of course, you bow to the supe ior judg- I I 912 DEMONSTRATION CITIES ANDt URBAN DEVELOPMEN'I I could give you -- own-that Frojec ~t on a ti an ope:~* i area. It five sh~ my own ex~ roj ects. of tli at ra erience, It local r contemp atory ~ted 3 ye~ ` -that wha t~ shoul L be conserved am ~ that it was a failure, w V service in a -- "r fair~ I ii a satel- 1. With- me trim- 4 that it hose two PAGENO="0327" JARRETT. and we are grateful Mr. COCHRAN. I - ul~j~ oppor~ Mr. BA with you and 3 - Mr. LENNARTSON. for ~ne Cu f the countr3 ~wise he would not ~1ENT BY ~`OFTHE( T~JTE statement isr tee, who went bring was set. I time has expired L certainly PAGENO="0328" 914 ~Y~MONSTRATION CITIES AND their pub1Th~transportation se~rji~es. HUD level of thea proposed program will suppor and known l~o be in preparation. In this cOntext, the RI~I CO~nmittee on muter railroads can be a vit~l component which are established in our metropolitan a vital component because of their inh passenger-carrying capability. ~ In additioi are extensive railroad networks which co rapid transit operations; Our committee how railroa~ls can help solve the commuter poilent of b~lanced transportation in our me The com4ilttee feels that aPy mass tran that the fift~ potential of the most advancei ger service~ can be fully utilized. The r with the technology and capability to pr and facilities for efficient mass transit syste Today's passenger trains have been op hours and many name trains in regular seri/ miles per hour. They operate at these sp( the growing market for rapid transit and years, major advancements have been made rail passenger service compo~ents~ Thee available h~ the Nation's rali~ay supply* The .RP1~ Committee on E~ssenger Ti~a transit sys$ems be developed to make ful passenger ~ervjce eapabil1t~S which exis make~use df this rail capability which ca On some ne~v systems that might not prove In closing, the HPI Committee on Passen of railroad passenger service be emphasize problems which now exist and will exist~ areas of this Nation. Thank you. 7t~RBAN DEVELOPMENT ~4tn~sses have also testifie that the the volume of application in hand assenger Traffic feels thai of. balanced transportatio areas. Communter railro ~rent economics and thei , in most metropolitan ar Id be used for new corn as sought to promote kno eryice problem by being a ropolitan areas. p9rt program should be d fói'ms of high-speed railro iway supply industry sta vide necessary advanced S.. ated at speeds up to 130 Ice can operate at speeds of ~eds with comfort and saf L commuter car equipment ~ in tl~e design and perform ~ developments and exper udustry today. ~!Q will continue to urge use of existing and deve~ ; today. Programs shoul do the job, rather than r practical for many years in er Traffic asks that the full L as the solution to many m ii:i the future in many m I, the com~ systems ds can be greater as, there inter and vledge of rital corn- signed so . ~ d passen- ds ready quipment miles per 110 to 115 ty. With in recent nce of all ences are hat mass oping rail strive to ly unduly he future. capability ~ss transit tropolitan ints-we ndly, we )nsidera- Mr. TA]~NNARTSON. P110 statement in effect makes two p recognize the seriousness çf the mass i~nsit problem and sec urge that~the t~hnica1 c~abiIi~y of i~i1roads be given full c tion in h4lpi~tQ try to solve ihose `roblems. . Mr B~u~rx'r Th~in~ you very muc for coming Our next witness this morning wi 1 be gene R. Schaefer, mass tra~i~it operations, Westingho so Air Brake Co., Pi Pa. ~ ~ .~ ~ ~ , ~ Mr Schaefer, of course, I want ~you to feel contented morning,~ as w~ have asked .everybod~t-who has been a witne You: m~y desire to complete your ~tatement and then we you a qU~~tion or two. if you want i~o su bmit your statem~ we will siso agree on that Wliateve* you choose to do you n that proc~edure and we will go along~ with you STATE~NT ~OP ffF~E ~ ~ ~ I~IRECTOR, MASS OPER~TIONS, wJ~STI)~øKeUsE A~R BRAKE Co (WABC~ BURG:EI:, PA. J Mr. `SCHAEFER. Thank you very dutch, Mr. Chairman. terest of committee time I would like to have you accept my statement. However, I will summarize very briefly with an ment if that is acceptable to the Ohai: nan. Mr. J3AERErr. Thu may proceed. . ~. director, tsburgh, iere this ~.. ould ask ~ in part, ay follow I~RANSIT ), PITTS- n the ii~i- prepared ral state- . .:~ PAGENO="0329" DEMONSTRATION ~ITI~S RBAN DEVELOPMENT 915 Mr. SOHALFER. transit opera heaciquartere need for This i*s I there ha appro~ to a p: PAGENO="0330" 916 Di~MONSTRATiON CITIES AN ~ URBAN ~ DEWELOPMEN~ sub~ittè~d' by Congressman Widnall, 1f New Jersey, which I feel is a very logicaland practieal ext~nsion ofthat act. Mr. Chairman, aftd members of ti~ committee, that conc udes my oral statement. ~ ~ ~ (The cMplete stathiñen~f Mr. S~J Lefer follows:) ~ R, Scm~i~, DIRECT R~ MAss~ P1~ANSIT. OP1~R~tfl NS, WEST- 44rnoUsE Ai~ Biwo~ Co)LP~NX (WABOO) PI11~SBURGH PA ~ Mr. Chai~~a~i awl genthnnen o~fthe corn :~itt~, my nairte~.is Gene R Schaefer. I am dixe~cr o1~ mass ~transit operations or the W~s~rnghouse Air ~rake Co (Wabco) ~eadqw~rtered ~i Pittsburgh, a My cwupany s intere t in and knowledge ~of urban and interurban tran~o~rtatw~i deveJo~inents an 1 deficien cies is based on years ef experience in sup~1ying tIns industry ~1 ode ~ur work ~ in theurban transft field ra~es from takh~ prelim4nary soil samples, to air poi- lution studies frr~m tunne1rng~ and excavatjng roadbeds to designing nd mann facturing e~puterized control systems ~- new transit properties. In fact. nearly 75 P~'~ent of the worid~s present ra Id transit systems are, h~ ~ ne way or another cthistrueted ~ontro11ed braked outed or protected by W bco prod Ucta Qth~ ~rwestflient in th~ft~ture of urb~t fransit L~ great. ~ ~ Under~taJndab1y, we have a strong desire to s~ the urban mass trai s~ortation ~industry ~Wthas eoun~ry prosper This ih~s e in based net or~1v on our ong range commitment and necessity of malnng a refit to stay rn business- it is also based on our firm beltef thM unproved a d adequate mass transpor ation will make ~urci~tiee bett* places ifl whiëh to liv . ~ W~th fe~* e~ceptions!1n t'e~ent years, th eeuntry'a urban mass tra sit fadili- ties have 1~een little improved alid are gem*ally inadequa te to me~t fa t growing urban area transportation neeis. As is often th~ case, this inadequa~y was not publiëly recognized until it b~ame a sori~s problem in many cities. Today the lack if adequate means to ~fficiently mOve great numbers of ieople ir~ci, out of, and withim ttrban'c~enters is reeog~tized a4 more than a local proble i. It has become a d~1emma of national imporU~iee, I Let mepi~it the problem in perspective as ~ ~ee it. Seriou~j~ ini~equate facilities to servelessential needs of the pe pie living in urban ~eairTh att~h~ root of the mass ifânsportation problem. Pr anization has proeee~jed until nearly 70 percent of o~4r p~rpulation is conc4mtrate I in urban areas.; but] mass transit facilitIes ~ have 4et :~mly deteriorated, the; ~ have de- creased Thituzte population growth wifl m4aji further urban growth By 1980 it is expeotod that our populatiøn will reach~2~O million and that 3 out of every 4 persons wifl be living within. urban areas... ttrban transportation need will grow aeeordir~1y. ~ ~ . ~ Urban growth has brought changing lirving habits and pattema Growing inasses~ç~f people 1iving~ farther from ~th*p1aces of work and the ity's core need and want fast tz'au~;portation. The ~4ttomobi1e with its fiexibili and con venience, h~s beeh increasinglv u~ed to rn~tho~t of the oxpanded trat aportation demand. ~ ~ ~ ~ ~. I -. ~ ~ Bat it .h~a bee~me evident thwt~the~rn~yb~nob11ea1one cannot provid the total anaw~~r ftai the taan~rtath~u needsof a ~nodern urban area. Traffi flow has outpneed t$a capacity ~f. om~ streets. `and ~iighways ; on- and off-str t parking facilities are filled as fast as provIded b~nnper to-bumper travel an the corn petition for narking space are levying heaty toils on the finances, th time, and the narv~a &f~irbkan and suburban dwel1ers.~ Although the great ina~oi4ty of t*a1. ui~ban. transportation needs is and will continue t6 be met by private auto trave1,~4mproved public transporta ion in our cities will reduce the overall coat of pro~1d4ng adequate tran~porta ion f'wih ties and ~til give their residents greatly 1it~rea~ed corrtenience and fl xibllity of choice. ~ In our l~wrar cities, as ranch as 90 percent of the peak-hour tray 1 into the cIty Ia de~4n&mt on puhlie transportatlonf-a dkily main transfer of opnlathin thet can ~ ofllv be met by lar~e-seale tran$t. such an bunea. subways and corn- muter trslhs. A1s~o~ many ner~ons in 14h 1ar~e and small urhen evens are oomn1etel~t lenernlent on pnblh~ trnn~norta~urn at all timec~ They in lude ~lio~e t,oo yoiin~ or to old to drive. and tboae who~iind owning a car too inco' venient or too expensive. PAGENO="0331" ~ELOPMENT PAGENO="0332" aaslstance program. It ~.effieIent staff. The sue ~Ls due in large measure *~standing of the social, mass transit. A lesser in: he transit Industry owe J( *fora "crash program" of o~ research, particularly S HQwever, I have serious a sums of Federal money i a better definition of urb~ rogram, wbic~ we do not uteru~tionai complex of e~ n 4~lose~ touch with tech: is technological progress a ~ountry,~is second to none~ ces expands,, private ind~j wed products. One of ti industry is the limited mi specific mass transit sy: ving people efficiently and ecome worse. The limlte( relieve this creeping eôn~ inue. Congressman With ~ our urban regions c ua~e mass: transportation ~tshed, suppliers to the t] into transit research an~ ne and will be done by th an~i services. urban mass transportatiw ~4eral Government can ar hug, building, and equipp: ~1deration of extending an We a~oiainyour ~ederally atistical reserva- or hard- ~n needs. ~ublicize mpanies iological plicable As the try will e major ocmation tem and econom- Federal estinn Is all's bill sitinuing ~acilities. ansit In- develop- ~ private systems d should ng these expand- 918 DEMONSTRATION CITIES AND kRBAN DEVELOPMENT ias been ess this to John political, ,n in the hn Kohl administered the first Federal mass transi1~ a pleasure to work with both him and h* limited but jmportant program has enjoye4 Kohl's abillt7, dedication, and thorough un4 economic, and technological factors affecting~ job would not have succeeded. All of us in a debt of gratitude. Much has been said recently about the nee4 funded mass transit research. In some area* and economic studies, the need is immediate~ tions about the wisdom of appropriating larg ware research and development until there i~ Wabco's transit research and development ~ for competitive reasons, is extensive. Our supplying the transit industry keeps us development~ throughout the world. I can say tie you without reservation that I to mass traz~sit, now going forward in this market for mass transit products and ser quickly supply new and significantly imp problems facing all of us in the transit suppl$ available from most cities regarding theii4 hardware needs or desires. In conclusion. the complex problem of m~ ically in our urban areas is acute. It will ~ program now underway to help urban area~ a vital first step. The program must coi4t represents a logical, practical proposal to j~ assistance in upgra4ing and expanding inad~q American indust~y, particularly the est4il dustry, are jouring ever increasing resourc4s ment progr~nis. Much more needs to be d+ sector to improve and expand transit product~ This country must and will have the fine that known technology can provide. The flancially aid our cities in planning, desig~ needed systems. I urge your favorable conl ing the Urban Mass Transportation Act of 194 Thank you. Mr. BARREI'r. Thank you very rnuc~ statement. I have no~questions to ask j~ou. Mr. Widnalil Mr. WTi~,NALL. Thank you, Mr. Oh Mr. Schaefer, I certainly apprecia your testimony for the bill that I have ~ I do feel that there is a definite n~ basis whereas you have a system of permit adequate planning in the fii company, having been in the field s~ by way of supplies, research, is in a out of its own experience as to the from the sidelines of watching the they have~ot had the means to carry of equipn~nt or operations. Your co your comiing before the committee. Mr. BAmmrr. Mr. Moorhead ? Mr. MOORHEAD. Mr. Schaefer, wIia~ relationship do you h~ you contemplate between Wabco and the Transportation Institute at Carnegie Tech? ~ery fin~ r you in irtnam ~ the sup~1't shown b ubmitted. ed to put this on a permanent annual authorization that will turé. I think that y )ur own , long,. the trai~portat [on field ~ood position to testif~ on this ~Teiopment of systems Ind also Leterioration of systems because ~tI in the field here for ti .e future 1)jnent is sound and I à~ preciato XC or do Research PAGENO="0333" DEMONSTRATION C1'~iES Mr. SCHAEFER. The Transpor formed at Carnegie Tech offers that would not be competitive wi prise such as Wabco. We won work very closely with Carnegi Institute in those areas of resear the improvement of mass transit t Mr. MOORHEAD. Thank you, Mr Mr. BAImETT. Mrs. Dwyer~ Mrs. DWIrER. No questions, Mr. Mr. BARRETT. Thank you, Mr. ing. You make an excell'~nt witne Mr. ScI-IAEri~R. Thank you, Mr. Mr. BARRETT. Our next witne president, Institute for Rapid Tra Mr. DeMent, we are glad to ha be completely relaxed here and have given all witnesses. You ni part or submit it for the record o may do so. We will go along with Mr ~ DEMENT. I would like the up from Miami where the sun wa: cause I think it is a most importa worthy of a full statement. Mr. BARRETT. Thank you, Mr. statement. ( ( e 1 S t Mr. DEMENT. Mr. Chairman at first introduce myself. I am Geor~ of the Chicago Transit Authorit: agency, operator of the mass tran~ suburbs. Previously, I was publi Chicago, and have spent my entir engineer and administrator. As c responsible for completion of suc ways, O'Hare International Airp of which one major route is the West Route, which incorporates median strip of an expressway. P ber of the newly created Illinois St Transit and as a member of a spe Richard j. Daley, of Ohicago,. foi of a new downtown Chicago subwa, However, I am appeai~ing befor of the Institute for Rapid Transit is a not-for-profit corporation wh proveS, and expand rapid transit, the Nation's heavily populated me I ~TD tRBAN ~3E\!=I~T~OPMENT 919 I iO~ Ii ti~ `ft ~ InstitutO which has just been lieve, a great hope for stuthes Se undertt~ken by private enter- e ~ to work-we fully ~ expect to h ,aud: the ~ itew Transportation at will coi~tribute materially to logy. ~ ~ irmati. , ~ ~ ~ : rrnan. ~ ~ ` ~ . ~ ~fer W~ appreciate your com rman. . . . Ii ~ be Mr. George L. DoMent, I it~ rl~ st~ ~. ,w~ ~erttthii~ desire that you ii give you the ~ same choice wo sire' ~to ~~ke~y~ir steten~ient in ou chôo~ ter~d it' in `full y~u ilege of `reaiditig it thnce I flew ing, `to cometo this hearing, be- ject. I think this'committee is STATEMENT OP GLOB~GE L DeM `, ` i&PID TRANSIT, AND.' CE~4flt CA'GO .TRANS~T nt, you',ma~roceed with your PRESIDENT, INSTiTUTE FOR O:F'~ TIlE B OARD OF ~ CIII- I d ~ , ) .tJ. ~t $ art p4~ mbers of the committee, let me )eMent, chairman of the board autonomous, nontaxing public tion system in Chicago and 29 L~s commissioner of the city of essional career in public as an ssiouer o:E public works, I was jects as Chicago's initial sub- `ci the new expressway system, 5 Eisenhower Expressway or rst rapid transit route in the ly, I am alsos'erving as a mem- mmission on I-ugh Speed Rail mmittee appointed by Mayor rvising preliminary planning em. today primarily as president e Institute for Rapid Transit bjectives are to promote, im- `cularly rail rapid transit in itan areas. The membership PAGENO="0334" 920 ~ ~ of thc~ ins1~itute omlraces all facets of the industry-op~rati g a~nd plaarning orga~nizations, ma~nufacturers and suppliers, and con ulting engmeermg firms. However, the instith~ute's board of direotors as the policymaking body, consists entirely of representatives of th~ ollow- ing operating ;and planning organizations : Bi~Sltate Transit ystem (St. Louis) , Chicago Transit Authoril~y, Oleve4and Transit ystem, Massachusetts Bay Transpcntation Ajuthority (Boston) , M ntreai Transportal~ion Oommission~ New Yorl4 City Transit Authorit , Port Anthority ~ Allegheny County (Pil4thurgh) , San Francis o Bay Area, Rapid4 Ttansit Districi~, Toronto `J~'ransit Commission. First, ~ ~ representative ~f the rapi4 transit in4ustry, I wo id like to express oUr appreciation for the reeo~nitioifthat Congress ha given to the need for financial assistance t~o mass transit impro ments through the enaotment of Mass Trans$rtation Acts of 1962 ançl 1964. The position of our industry long hats been that metropolita~i areas must have tt balanced approach to their transportation problem~. Oh- viously, the. automobile is here to stay. ~ It is performing a~id will continue t~ perform an important fu4rtion in fulfilling the ~overaB transporta~t~n needs of the communit~. At the same time, h~wever, I am sure ~we all realize that in our ~ongested and growing urban areas the ai4toinohik~ alone cannot possij~ly perform the total tr~nspor- tation j*th. ? This is particularly true [with regard to moving large numbers . of people to and from the e~ntral business district~ in the peak hours of travel. The truth of th~ matter is that unless odern transit facilities, particularly rapid t*ansit facilities in larg areas, are provided niong with similar urban highway improvement , there is little or no hope of maintaining p~rosperous ~ and growing central business districts. j . Our pi~oblem in the post-World War . II years was that most part, this importance or need for~.public transportation recognizedj To further complicate m~tt~rs, funds were readil able for hi~hway construction while 1~ttie. if any' such assists avaiiablef~r transit. j Now that Congress is being asked 1~o continue this assista might veiy well iiiquire about what h~ b~en accomplished assistance previously . authorized. I .lJ~ink, Congressman, yo thatquestion. Many cities throughout the country;: part of The Fedeml G~rvernm~nt, ~ avail them~seFifes of this ~ much needei~ permit a complete re~riew$ the benefit transit sy~temS. We. wou~d like, ho~ which ai~i~ypica1. 1. Clev~Tand : In Clevelaild, Federa sible the é~Onstruction, for the first t~ rail rapid transit facility connecting ~ town business district. Some local fu extension for a number of years. H~ grossly insufficient to carr~y out the. ~ - dormant thitjl Federal assistance bec$ 2. New Vork City: I think Mr. Gill~ . I need not exphdp that. They bought 200 n~ e would not haveb~en available to them. fGr the vas not avail- tee was ce, you ith the i asked grateful for this actioi we taken immediate assistance. Time we ~derived by the varioi ~ever, to cite a few e: on the teps to uld not ts rapid ~amples I I assistance now is mak me in the United Stat ,: major airport with th 1~s had been available )wever, these local fur ~onstruction so the pr tme available. ooley explained that an ~w ears which otherwi~ ng pos- ~ of a down-. for this Is were ject lay PAGENO="0335" as con than i e subway west ares DEMONSTRATION CITIES A~ ~RBAN DEVELOPMENT 921 onduc under a Fe~ train operat construction important ~ could. ~utomaL ved track cre been rajid t~ansft sy~tems E PAGENO="0336" greater of the * metro~ ars is a it today ~et even to con- ci exten- Jone at ablished commu- ~e made In the will be t a con- s ahead. a handi- ts under .ds could program, by cities Federal 0 we all onsider- e carried Transit, Congress t you on ates ~ that You are teful for sit to the titute for ticularly the exist- unds and you rec- have had not sub- al appro- 922 IYEMO~TRATION CITIES AN~D' URBAN DEVELOPMENT ~f cities their facilities and their service to the public. A number of major size do not have anyrail rapid transit at all. Great as is the need now for rail rap I transit, it will be mud by 1980, *hen, accorditrg to popula ion experts, 85 percen Nation's rapidly ~panding populath t will be concentrated i politan a~reas. The y~ar 1980 may ~ ~nnd far off, but 14 y short perieci to accomplish improveme ts of this magnitude. The reasons why there is a serious ~ck of rail rapid tran and why existing rapid transit syste*is cannot expand to n today's needs are obvious. ~ Rapid tr~nsit systems `are costi: striiot, to maintain and to operate. Maj or improvements ai siOris cannot possibly be financed but of the fare box reasonable rates of fare. The Mass Transportation Acts c~f ~962 and 1964 have es a l)attern bf Fede~al assistance that ~ aSneeded by our urban niti:E~. *A~tually, howe~; The amO ~t of Federal assistai av~i,ilablo thus far i~ only a fract;ibh * f what will `be needed. years tO ~ the e~ptia1'requiremer ~ of rapid transit `alon evaluatedin terms.of'billions rather ti n millions of dollars. Consequently, the Institute for R~ )id Transit believes th tinuous and expanding program will be required in the yea We would like to point out that many of our cities have be capped by the two-thirds, one-third matching fund requireme the existing Mass Transportation Act~ If 90-10 matching fu be made availi~ble, as i~' provided in he interstate highway it wou]d'eriable much greater partici ation in this program throughcnkt the country. It is extremely imporfant that our it~ies be assured that th aid to transit will be a continuing rogram. As I am su realize,. the planning of improvemen s of this scope require able time, and cities must be assured hat the programs can 1 out if they are to undertake ventures of this magnitude. Therefore, gentlemen, on behalf o~ the Institute for Rapi I respectfully urge that this c,ommiLtee recommend to the the enactment of the legislation cover$d by H.R. 12946. Mr~ B~rn~Err. Mr. DeMent, I cert4inly want to complime a very ~fiuie statement. I have no questions, but this mdi you have done an impressive amountj of research and study. certainly ~to be commended for your fi~ie.statement. Mr. Widnalli ` ` ` Mr. WIDNALL. Mr. DeMent, I think we are all very gr your bringing your long and sound experience in rapid tra committee and giving us your views as president of the In; Rapid Transit. I think we appreciate being broug .t up to date and we pa were interested in the applictaions t at have been taken on ing programs and the good use to which demonstration: other funds have b~n put. * I note that your recommendation to the Congress is tha ommend enactment of H.R. 12946. I do not believe you an opportunity to examine my bi1l,~ H.R. 13732, which wa initted until M a t'eli 16 and which authorizes additional anni PAGENO="0337" DEMONSTRATION CITIES priations for grants under the :~ tually, what it does is to autho and $175 million for each fiscal y Would you be in a position t or lack of support, or your own p Mr. DEMENT. I would be hap~ I think in my statement I mdi' and I think the bill that you rn maybe nOt in sufficient amount, I think it is necessary for the transit in all of our urban comn Mr. WIDNALL. Unless we got tion we are not going to get the ot ~ Mr. DEMENT. Yes, I would su Mr. WIDNALL. Thank you ver Mr. BARRETT. Mr. Moorhead ~ Mr. MOORHEAD. I have no ques Mr. BARRETT. Mrs. Dwyer? Mrs. DWYER. No questions. Mr. BARRETT. Thank you for preciate your comments. `All time has expired. The committee will stand in ing. (Whereupon, at 1Q :35 p.r~i., t vene at 10 a.m., Monday, ~Ea~ch ~ URBAN DEVELOPMENT 923 ransportation Act of 196~. Ac- 150 million for fiscal year 1967 ereafter. this time, indicate your support ito this bill?. that we needed continuing funds would cover that area partly- rtainly this is a proper bill and Lumg improvement of our mass es. I would support it; yes, sir. a basi~s of permanent authoriza- it. a 1 0 U t ti~~ bo4 ed id t~ 1t~ L11~ o1~ or r~s C ~ig here, Mr. DeMent. We ap- e , 19~ until 10 o'clock Monday morn- ~committee adjourned, to re.con- 6.) 60-878-66--pt. 2----22 ` I PAGENO="0338" F -1 PAGENO="0339" DEMONSTRATION C~TII~S MON~AZ M~i HotrsE S~ri~ioMM Co~xM±TTi~i The subcommittee met, pu$uai 2128, Rayburn House Offic~ Buildi~ man of the subcommittee) pre~idin, Present: Representath~es Bar Harvey. Mr. BAm~ETT. corn~nittee Our first witne~ . mçrning i mi-~-~--~ DuAB M. that.I am itment Mr. Mayor, when a rna~or corn country, we have made it a practi sents that city here to introduce hin URBAN DEVELOPMENT 21, 1966 P1~ESENPATIVES, ON HOUSING OF THE ~ANKING AND CURRENCY, Waa1~ington, D.C. recess at 10:10 a.m., in room :on. Whuiam A. Barrett (chair- tt~ Mrs. Sullivan, Reuss, and 11 ~orne to order, please. th~ Honorable James H. J. Th~te, extend to both Mayor Tate and art of the minority for their ap- contribution that they will make WILLIAM B. WIDNALL. fi~orn a city in any part of this ~ td have the Member who repre- I I [~I tø ~Ti S greeting It S that. I would further appreciate it 1~ you~ ~ Mayor Collins a very real w~1co~ie o~ t pearance here today and our ~ha~ks f~r toour hearings. Sincerely, did not expect oiii t1~ 925 PAGENO="0340" 926 Mr. Mayor, I come from the city from which you come as and I think it might be misunderstood if I gave you a flower: duction here this morning. People know my feeling for you a know that you have done a tremendous ob in Philadelphia on: and urban development, and I want i~o say to you very frai mcst every mayor that came before ouf committee ha~ indicat they are using more or less tl~ city ~Philadelphia as a pr or a patt~r*i for the urban renewal 4id housing activities i respective cities. : . . ~ ~ ~ . . So this would indicate, Mr. Mayor, that I certainly do riot give you a flowery introduction to sp~l1 out the fine work t have been doing ~ and I am quite sure the 68 projects that y have functioning. in the city is helping. to eliminate the sli blight, the delinquency and crime areas in the cit,y of Phula Mr. Mayor, I am' quite sure that Cqngres~man Widnail w~ when he said. he was sorry he was not We to get here to bene the testimony you will offer here this rn ~iing. Mr. Mayør, if you are desirous. to ci nplete your statement you may do so, at the end of which 1 :embers may want to one or two questions. If you are prepared now, you may sta t. STATEMENT ~OP EON. JAMES H. L T~A.TE, MAYOR, c~ITY 0 ADELPBIA; AOCOIVLPANIED BY ~1O1tN L O'SHEA, DEVELO COORDINATOR; A1~D IVAN `GL~Q1tMA~, ASSISTANT DL M1~NT COO'it]~INATO1t ` ~ Mr. TA'r4 Th~thkyou, MJ~ Chairm~I ~ I wou1d~ ~hke to reiterat& and almo4t repeat the par agrap out of cont~t~in Congress~i~th Widn~$'~ letter to ~ that y record in Phiiadeiphia,~'as' We11'~as you~ greatrii~terest in the] and Urban Development Program thi~oiighout this country I have had the privilege of serving or~ the executrcie commi the National League of Cities which wt~ formerly the Americ nicipal AssociatiOn where ` we rel~d ~ great extent on' the Congressni~ ~ Rains and hi~ great wô4k ~t~d th~e was some about who j~he new chairu~au would be~ rep1$~ce him Of coi were all pf4a~ed to find that you had tl~ seniority ne~essary ti you to d~nionstrate the talent whi~h ~ou have displayed so handling, ifi engineering this legislati4~t th~ronghth~ ~last sess in conduotüig~aii ôf;these th~étings whi4h:are so ithportant to th program for the urban centers of AmeFica. I. first wai~t-to apologize to the coijimittee f~r. not. being ~eviously scheduled meetir~gs. As I ijirdicated to you, Judge Alessandroni who was the ~rand Ven8raible of the Sons of It who presided as judge of Police Court No. 5, died and it i~as tant for me to attend his funeral inasniuch as I was a longtim of his family to whom I wished to 4~xJ~end my sympathy at t of his deatb. I I do not ~añt to belabor you and the 4ommittee with' a long, e presentation on why .1 think the demoi~ttation cities program apply to Philadelphia. DEMONSTRATION CITIES AND TRBAN DEVELOPMENT mayor intro- d they ousing kly al- d that totype I their ave to at you U flOW m and elphia. ~ right t:from ~n. full, sk you PHIL- `MENT rELOP- ` taken ur `fine .ousing tee for ~n Mu- former oncern rj, we enable veil in On and ~ entire .ere on ~ugene ~1y and impor- friend e time tended should PAGENO="0341" DEMONSTRATiON CITIES Mr. BARRETT. Would you just y I appreciate your kind remark this very honestly, that if I wei' want to give me, I think our ho in the Congress. Mr. TATE. Thank you, Coiigr that and that has been brought Nationai League of Cities, as we which of course, as you :now, t legislation. I have prepared a sup )lement ivith the committee with t te thou extend my views with res ect to o mass transportation whic is no~ It is my understandin that ~ and testimony is acceptab e in thi The main thrust of my testinio thing which I think is urgent ai it, not particularly because it is f~ your knowledge of our great city, that it should have priority, but this as a prototype for the proble I want to applaud and cornrnei tion for the development i f a first us who have struggled so ong an bers of the committee, v ith the feeling of renewed * stren, th in t need for action on a massi e scale and underlined 4 times, Ii s `been stated and placed before he Am in our minds that the demonstr most ambitious and comprehensi' emi Government for the creative wish to state that it has our un Secretary of HIJD, as well as ou be made on urban areas, now in d restore a sense of control to thos for this and are committed t communities. On the basis of the specificatio 12341, I can say without hesitatic will be ready as a demoiistration the basis of its long-range coinpr program for the blighted core. This plan is~ the blueprint for ~ facilities and to remove deterioi press a large area of our city. I still needs such a program after 18 ment. We have 68 title I project execution or SuI)miSSioll in our c title I, city-assisted projects at w( of a conibined total of more than local funds. URBAN DEVELOPMENT 927 ) me for a second 9 ` it would be remiss, and I say ;ake the credit that you really staff is the finest of any staff n. I am very much aware of T attentigU by the staff at the he TJ.S~ Conference o~ Mayors, great deal ~f interest in this tatement which I want to file at this may be helpful and will egislation on housing as well as g considered by this committee. re pursuing all of these items ion. fore you this morning is some- ~t is why I wish to emphasize iladelphia alone, although with know it is very important to us use it is iml)Ortant to consider the big cities of America. President and his administra- program which will give all of uously, and this includes mem- ense problems of our cities, a ~owledge that at long last the emphasize "massive" in quotes rightly recognized and clearly people. There is no question cities program is by far the cept yet advanced by the Fed- ldmg of our urban cities. We ed support, as I told the new f that substantial inroads will and decay, at a pace that will shoulder public responsibility S future betterment of our d objectives contained in H.R. t Philadelphia, . our great city, The city's technical staff~ on i~ plan, has conceived a total i91 to provi4e desperately needed ecj' structure which presently de~ h~ ild be noteçl that Philadelphia ar ~ of urban r~newal and develop- l~ ~e and small, at some points of . We have additionally 13 non- :. These repre~ent a commitment *8~ million in Federal, State, and I e d~ 1:~ti to in, 1 e I 2 a 1:. IL :~ c b t. aS b P1~ oi:~ U) tii a ri o1~ bil li~ eli t t. S 1 I `~[I PAGENO="0342" 928 DI~MONSTRATION CITIES AND ~UEEAN DEVELOPMENT Over this period, our city has been 4n the forefront of the at.ion's renewal effort-setting the patterns, dj~ve1oping the program , devis- ing pilot p~ojeets ~nd new approach4, the experience from many of which were ultimately adopted as star~dard procedures and programs by the Urban Renewal Administratio~t and the Public Housing Ad- ministration, for use throughout the e~itire Nation. I know many of you are familiar with these programs but I should like to cite here just a few of them showing where and how funds from the deinonstra- tion cities program might be directly applied: 1. There is the recently formed, city-sponsored Philadelphia 1-bus- ing Development Corporation, a nonj4rofit agency funded by $2 mu- lion of ca,pital funds * of city money ~hich will take tl1e initiative in acquiring and rehthilitating a suist4ntial number of deteriorating but salvag~ab1e homes, plafles in whie1~ people can dwell, throughout the city in a unique partnership of the ~ity, private resources and non- profit community groups and organizations. This has spearheaded a commitmebt of $20 million in financing from some of the savings banks in Philadelphia. 2. We have this very day before the Public Housing Administra- tion an application under the used hoiise provisions of the 196~ lions- ing Act for sufficient funds for the rehabilitation ~ or rebuilding of 5,000 vacant and derelict structures an~ opeil. lots in the North Phila- deiphia s~t.ion of our city in 1 year. 3. The newly organized PhiladelpI~a Sch~l Board under former Mayor DilWorth, is moving toward ad~ption of a program which will daringly innovate a dynamic cun~iculu~i as well as school construction program, anticipating an expenditureof $434 million over the next 6 years. As a first step, the city council! awl voters of Philadelphia are being asked to consider a $65 millith local bond issue which will come before the voters at the primaryclection in May of thi~ year. This total education program antic4a.tes great emphasis on ~ultural and social conditioning of the economically deprived so that ~hey can live a better life. ~ ~ . For the first time in the history of}Philadelphia, the scho~d board will beconie, a part of the ~ comprehenJ~dve program which will make Philadelphia so much a better place in~which to live. 4. We have what I believe to be 1~he strongest code enforcement program of any city in this country,~ calling for an expenditure of $7.5 million in the next 3 years to bring to at least minimum code standards 130,000 structures in the donservation areas of our city. There was some fear and concern about whether or not such a strong, strict code enforcement program could be executed without hurting too many people. . We have done so, and no one has b~en hurt. On the contr ry, peo- pie have been helped by it becatise it~ has lifted up these p rticular areas to heLter standards o~f living. [ I say to all Congressmen who are w+rried about strict code nforce- ment that it is the best thing that can happen in many areas b cause it brings the landlord and homeowner ~p to a proper standard Strict code enforcement now, I think, is the order of the day, not only in Philadelphia, but in all the cities of America who want to take the bold approach to preserve their housing. PAGENO="0343" of Phila- PAGENO="0344" D]~ONSTRATION CITIES AND I have distributed copies of the first The particular section that I want substandard area where we have 9,O~ Here in North Philadelphia we have 6 are now 2,151 vacant lots. But this i~ just North Philadelphia alone. West: adeiphia are also afflicted with these s~ ning to spr~ad their terrible ravages. I This is tl~e particular area to which j close to 9,000 vacant houses which can ~ cities program and where we have pf request for r~habilitation of 5,000 hous~ able under tI'e public housing prograi~ ing Adminis~ation and you will reca~] I, together with members of my adn presentation before Mrs. McGuire, the ing, some weeks ago in this connection. ~ This aloiiie is just `a beginning. In `a4 out the entire city close to 19,000 simij the block 4ots which are superimpose4 we are fa~céd with. The area in whiuh the derelict strt4 Spring Ga~rden to Lehigh Avenue an~ the Delaware River. The black marid selves. But the superimposed yello~4 a block of row houses. There are 802 such blocks in the area.-46 percent of t number. But housing is not, of course, the ~frhole pictures And th portant because the public. housing a~ministration itself is ii ]n more than just having houses reh$~bilitated. They want about the ~ total picture. We in Phi~ade1phia are very fort having a, very fine planning commis~ion, which has as its director Mr. Edmund Bacon, one of ~he finest planners in ~ the commission and its staff have ,profrided this excellent pla: area just referred to, from river tq river, and from here [indicating] . This is a comprehensive plan wh* quired to meet the needs of the peop~I in the problems of relocation. At tl~ tion will be needed, resulting in roj~ Instead t~ie people will be able to r4 have the facilities and amenities th ample, to build 12 new schools over cated in blue [indicating]. In addition, six new recreation ceni marked in green. You will notice that in several lo~ program will be developed jointly i recreation areas for greatest effect. This will cost the school board, alone. Recreation centers will cos 930 URBAN DEV)3ILOPMENT hartthat I am referri to. ) call your attention t is the ) vacant structures a d lots. ,827 vacant buildings. There ; not a situation which affects Philadelphia ` and Sout Phil- ~d! ~ blight which ar begin- ax~ referring wbere y U have eupliftedby a demon tration ~se$iy undei~ conthde ation a ~ whk~h are vacant but advage- now before the P~bli Hous- ,~ Mr. Chairman, that iou and iinistration, made a v ~ry fine Commissioner of Publi bus- ~ition to that, we `have t. ar vacant houses and b ~n the map show exact irough- ~ts; and ly what ~tures ~re indicated ru d from the SchuykiIl: shows the vacant hous areas show what this is from ~iver to ~s them- does to he total LSIS im- terested ~o know mate in ~ecutive Lmnerica; i for the to here ~ii will provide the hoi ising re- :e there witbout involv~ ng them ~ same time, no massiv ~ demoli ~ and rows of public housing. w~i~mi im~ their i~eighbor ods and V deserve. We propos , for ex- L 6.year ~perjocl. They are mdi- : will b~ developed. They are ~tions the school and ecreation ~vith the schools adjac mit to the [~If, $32,800,000 in c ty funds :~emore " than $1,300, 00. The PAGENO="0345" DEMONSTRATION CIflES P URBAN DEVELOPMENT 93.1 proposed ~year demonsti~atipn p ~ r~ for this ai~a.canbe expanded to ~2 new schoøls instet~d .4~f j,ust 1 , a~ ~28 reereational centers instead of just 6 at a cost of$180 ~ni1~ion. . . This is a ~ oomprehensF~e plan hi h will se~ye the people there, giving them real homes, ~eaUy ~ merican living, in our modern urban sooiety. Not only~ decent ~ el r but decent recreation and a decent place to send, the 1~ids to s oo s s~ they can get the education they need in order to compet~ on ~ w~ terms in our society. The total 6-year dem,o$ti~atio ~ ~ gram is shown on this multi- colored map here [indic~itthg], e lüe refers to the new public schools-~-22. We have di~scu~sed ~ . ith the staff Of the new board of education and th~ ar~e prepa~ ~ o :face this ch~~Jienge ; 23 new recreation centers and playgrou d ~ hich are marked in blue and green next to each other. The proposed 5,000 to ~ ne o sing units are marked in dark brown and there are ~,OQO l~ous s w ich can be rehabilitated under this new housing progran~ tl~rou h t * combined efforts of the Fed- eral and city governments an4 our e~* nonprofit housing corporation. Finally, we show 16 new .~on~ther i ~ nd public administration cen- ters in the area. Thetot~d ~1an er~ includes six major centers, six minor centers, schools anc~ rcj~eati . , ~ mmerciai centers and govern- ment facilities. it involv~s 400 c~t . Ip ocks, 1,400 acres, 70 blocks of clearance for housing. T~iis is a as r pla~ñ, a comprehensive plan provided by the pian~aing~ *co~nmi s~i and a real blueprint for the future. . ~ I Just as my very gø~d ~rie~d, y . r Richard Daley, of Chicago, said at one of th~ meetings~ of the ~ c ive committee of the National League of Cities, this is th~ ki~id o i~ we ne~1. Instead of provid- in.g satellite cities, which ~nu~t be ~ p rimposed upon the landscape outside the main boundaries Of th it~es, you ~take that satellite city and place it into the b1~igh~ed are o rovide good living conditions for people who live th~rea~id des~ ~ ~ em. ~ ~ . . That is ~ principally my ~toi~y~ ]~r. Ch~irman amid members of th~ comn~t~e. I believe this i~ a~ou1~i ~ ~ ~ demoh~ration program in action, and one whi~h~i~Q~ de~non~ a~t s tbat~ ~s*e h~ Philadelphia are prepared to execute it. . ~ ~ ~ . . ~ . ~ . On~ a very conservative ~ba~is ~ t~ huieians have estimated that th~ e~ecutiou of th~~ plait ~vil~ Qall ol~ investments a~tid expenditures in excess of $400 ~ miUio~~. Wha~t ~ e ~ ~ o~isider m.Qst important and uxdque here is the socia1..1$tt~,rn ~ pI~ graming that the~demonstra- tion cities bill makes possi1~le, so t t r the first time physical and humanimprovement can b&~ax~ried é s~ ultaneously. However, you . . must clearly understand that ~rese . ly his plan i~ scheduled as part of a total development prog~rar~i.de ~ ~ tobe~nsistei~t with present patterns of Federal grant-~n..aid r g~ m funding and local finan- cial resources. . . ~ . Limited in this way, we~ ~xpect t his plan would take 25 years to complete. You will thC~I under t the sense of urgency, which brings me before you toda~ to ap ~ 1 you for the passage of this bill. For it would permit ~s toco p e~ the North Philadelphia plan into a 6-year period. ~ . PAGENO="0346" 932 DEMONSTRATION CITIES AND tEBAN DEVELOPMENT We have shown specifically where and how this minimum sum must be spent, but we cannot emphasize to~ strongly that it applies only to one particular section of PhiladelpI~ia. Other areas in South and West Philadelphia would also become( eligible for treatment in this program. But we recognize the needr for practicality and manage- ability, as iwell as the obvious impera~tive imposed from without to confine ourselves to what is achievable ~$vithin the resources potentially available to us. The scale of expenditure that is realily required to meet our needs for a decent living for the inhabitants of our city could probably absorb the $2.3 billion scheduled in the~demonstration cities bill. We still look to you, the members of this committee, for a total pro- gram in terms of these dimensions. At this point, may I comment brief]jy on a specific provision of the. bill which has been severely questione4l in some quarters. This is the creation of.the position of a Federal c4ordinator who will be assigned to cities in the execution of their dem~nstration programs. We look upon this function as a most desirable ~nd essential device to facilitate and expedite the execution of the entire program. By no means do we object to it-rather we encourage and endorse it-we think it is needed-and we are gratified that the insight of the drafters of this program should recognize the specific need for this function. In Philadelphia, we have for 10 years had an office of the develop- ment coordinator, formerly headed by William Rafsky. This is a single individual whose responsibilit~ it has been to bring together, in the closest cooperation, the efforts ~f the planning commission, the Philadelphia Redevelopment Aut.horfty, Philadelphia Housing Au- thority, the Philadelphia Industrial ~ bevelopment Corp., the food distribution center, our city operating agencies, all of the involved Federal and State agencies, and a host of other quasi-public and pri- vate groups, all of whom are deeply committed to the solution of our pressing problems. We have found this function to be indispensable. If a Federal coordinator is included in the program he will be work- ing side by side with Mr. John J. O'Shea, our development coordinator. We can indicate that Mr. O'Shea is r4ady to work with him. Such a sweeping concept as the d~ionstration cities program not only seekS the services of a local Fedefal coordinator-it demands and requires him. As I understand the ii~tent of the bill, this official will, in point of fact, serve as much as the spokesman for the community before the Federal agencies as he sex~res as an official of the Federal agencies themselves. Me.mbefs of this committee, you mtist decide on what we are to tell 341,000 people. Will it be that. with all our awareness of their prob- lems, with all the strain we are placing upon our human and economic resources devoted to solving these pro~ilems, they will still have to wait in their present nhysieal. economic, a~d social condition for a quarter of a century. Or will it be a pron~ise to deliver a healthy, decent community in 6 years as called for in tfr bill? I know how busy the members of this committee are with its work. Should they come to Philadelphia,~ however, we would be very glad to take them about some of these areas which contain the blocks and blocks of vacant structures I have described to you today. In the ab- I I PAGENO="0347" DEMONSTRATION CITIES NI~ URBAN `DEVELOPMENT settee of that opportunity~ what av tried to do is at least suggest to . you the frightful level to ~vh~ch, o o ly this city but most of our older cities should never have F~een red c d~ But this is talking in the past. Knowing that within yot~r t~nur 1~ ffice 80 percent of our Nation's population will be living in urb n c~ plexes, wenow appeai to you to move forward toward a ~ett i~ ~A. eri~a with thB passage of the demonstration cities bill r~ow bef ~ y u. While my remarks today hafve c fi ed themselves to the demonstra- tion cities bill, I would lik4 to sub i t you a supplementary document containing some of my vi~ws and ~ g e~tions for improvement of the Urban Development Act o~f 1966. Mr. BARRETT. It may be put in i l~ ut objection and it is so ordered. (The information ref err~ed to fo 1 w :) 933 SUPPLEMENL Mr. Chairman TATE, MAYOR, CITY OF As I have resented by I meeting our program urban dev programs. newal be set a PAGENO="0348" 934 DEMONSTRATiON: CIPIES AND ~EBAN~D)~V1~LOPMENT to ~iand~1e~ ~fliis wouki mean $1.~ ~ilWon a yei~ Thia wiiFnot do the wh le job; it will at 1~a~tipermit us to coRt~ewor~king~4 ourpresentpaee.. . ~ I would ux~ with equal forvw~ that every ~ort be niade to reverse th action taken last y~r in terminating the 1ongs~n~ing~ëontrk~t authority ~ urban renew~v1 wh4ë1~ was inadein th~ f~ce of exp$Ss statutory pro~isions Co tinuing that authorit3r. Jfl a program as complex `a~urban renewal, and invol Ing the long-range cooperation of local and Federal Gbvernnients; in long-range p anning, and coordination with other State and local j$rogram,s, it is clearly impo sible to conduct a rea~onab1e program ou a year&to~ye~r basis. The provision of ontract authority ~is equally necessary in all of the other urhan programs which become more und more entwined evej7 year. Theije include low-rent public ousing, housing i~or t~e elderly, mass transit, open-s~ace and public-facility gra ts. Retumipg 1~o the urban renewal program ~4)~e1f, I munt again urge, ~ s I did last year, t1j~t the time has come for certainfbasic criteria governing th admin- istration of the program to ~e ~eeva1uated. tThe requirement of specifi project boundaries a~id a set time sequence for comp'etion of projects is anothe impedi- ment in the ~*ray of cities desiring to undertake large~scaie planning `and renewal efforts, incorporating all of the programs arid techniques available. A under- standing of these problems is indicated in ttie outlines of the propose demon- stration cities program `as it has been thus fa~ presented. However, the freedom to exercise local ingenuity in order to find new solutions to urban probl me in a comprehensive manner must be applied in the existing programs as eli, par- ticularly in the urban renewal program. This has been. one of the maj r recoin- mendations to emerge from iiearly 3 years~ Of study under `the Fede al grant for our Phlii~delphia communIty renewal program. ., Specificall~r, it would be our recommendgt~on that the urban renewal program be amended ` to permit communities, able t4 demonstrate a sophistica ed grasp of prograflh~~ctLvities, to treat ~ll of its urb~trt renewal activities as o project, both for p~~*poses of crediting local noncasji grants4n-aid and for the free use and `movenn&it of its . renewal program fur~ds. Ideally, this would can that cities `like i~hiladelphia would be given aniannual appropriation for rban re- newal activities, `to be used as the city "~ould see fit within the `a provable area of the city The expenditure of these~nnds would, of course, `be ` abject to program regulations and to postaudit by th~ ~`ederal `agency. Excepti ns taken by the Federal agency could always be di~aliowed and deducted fr in future appropriations, but it `is time, In my opinioi~ and' that of many other ci y leaders with whom I have discussed tjris matter, f* urban renewal to be `the t ly local program wJ~ich Gongress inteflded it to be4 It is only in this way t at it will ever be ~ahle to have the fi~xibility -and' er~tt~ity `to meet varied and' changing urban need~. . ` `. * ` .` ` ` .:. ~ ~ ` ` ` ` `` Now let n~e say a few words about another new effort In Federal lee coopera tion to pres~rve our cities lu 19M the ck4ngress for the first time ecognised th~ neeessi~r of ~rovii1ing aid to the eati~ ~n their code enforcement e erie In 19~5 it was~found necessary tO amend the s~tr1ier legislation to~provid for more than mere code ~nforceiwent `*rsistanee if ~bi~ program ~ was `to be in aningful. The program now permits. ftnaneiaL'snppo4ler `other' improvement e . orts, such as tree pla~ating, `street improvements, .ne~istreet `lights, and other amenities which are needed to make a community on; which meets at least mini urn mod- em living ~tandarUs. But again, city officiitls have found themselves rustrated in trying to heal ailing neighborhoods bec~nise the program is prohi ited from operating ~i the very areas where it is ne~ded most. The reason giv n for this is that tbe~program should operate only i4' areas that can be reclai ed or pre- served b~ ~these efforts alone. `The impijleation is that ,more corn rehensi~e measures *tll have to be taken in areas t4iat are more severely blig ted Tins is fine, i~4l~ possible, but asy~u and I botl4'know, we have not had th means to do the iob~ and are not likely to in all a$as of greatest `need in t e near fu- ture. So,. we have a situation in which tb~"eities are effectively bei told that if they ca~iiot `do all that should `be donef-then they should do not ing-or at least the Federal Governmenl~ will not hel~, them. As I have alread indicated, it is clear to everyone that urban renewa1~ funds are not available i anywhere near the amount needed to treat all of tIie decaying areas which a e also pre- sently ineligible fQr inclusion under the~ Federal code enforcemen program. Unless sufficient urban renewal funds are provided . to let the cities et the job done, it ~seems to me that there is no otl~er conclusion the Cengres can reach but to permit code enforcemGtit funds to `e used in the areas where o many of our neediest citizens live I PAGENO="0349" DEMONSTRATION CIflES URBAN DEVELOPMENT Now let me turn to what i~pr~babl l~ most important single subject of our concern : the ~ expans~ou~o~. our ~ous~ ~ ouree~, partieulái~ly for lo~w-lueome citizens. As in the case ~of u4,bat~ ~ rei~t iv ~ urged last;year a construction goal o~f 125,000 public housing ttn~ts ~aeh ~ a~ ~ u botb~n~w a~id rehabilitated units for a 4-year period, but the ~ Coi~gres n~[ ~tut1iorized ~au a~nount sufficient to provide approxirnate~y hair t~iis ~um .o~units~ At th~ present time, the city o~ Philadelpbia alone has *an~ ap$icato ft ed with the ~ublie Housing Admhi- istration for 5,000 uuit~ ot ~ew a~U ~ ~ litated housing. We expect to sub- mit similar applicatioiis ~ora~i eq~1al i~ b~ *o~ units in each o1~ the next 3 years for a total &f 20,000 units. Zn g~atl ~ ` ~ as~ng the supply, o~ good home~ for low-income, needy fanzilies, these new u It will displace no one. They will be provided ~hrougb the ~ebabil4tatipn o I~e~ ntly ~can~ existing structures and the construction o~ newt ho~ses on v ca4i~ lots which ~ blight so ma~iy of our neighborhoods. Sucb, a prog~,am~ coul b~ ~eful in many of the cities across the United States, but only ~ft1~e m it, de of the total public housing pro- gram is gre~tt enough to allo* it~ full ~i iii tion. Many other iniprovement~ ~n t~ie p l~l ~ ousing program are also necessary. Funds should be specifically 4ro~ided ~ r ~ e* rehabilitation . and modernization of existing public boiising prqjects, m ~i p~ which are now more than 25 years old. Funds for this purpose ~hothd n t ai~ to be taken out of limited normal maintenance money. More funds are also needed for social er ices to be provided to tenants, more and more of whom s~f~er not only ~` m~ economic problems but social and physical problems as well, o$r which t e~ have little' control. Such problems include age and physical 4isabilit~, la k of ducation, or unsalable empioyment skills. , The present stautory limits ç~i ~onst eliminated if new public i$in1 unit high-cost situations which exi~t ir~ aim ~ enacted last year, and for w~ilcl~ I ~` needed units in a. rapid a~4 ~e~lbIe ma ~ also be amended to proylde fo~ lo~iger t order to both reduce acTmixU$tr~ttiv~ red ~ rehabilitate theij~ properties u~ to publi ~ of guaranteed rentals a4 fair nia~ke;t ~ a,iong these lines in o~ of thE~ acthiinis r There is one change in the p~biic ho ji special etaphasi~ because, Mr.~ Oh~1rm ~ Philadelphia, feel specially .~i$tre~t~d~ public housing program could ~e ~reatl , werç~ able to sell single$amIly ~u~its to. effort to create greater home~wn~shi minute, the conference committes decide row housing units f~~om those ~r1iiØi co, ` 1 Philadelphia was unable to utilize this ~ that we have no intention of sc~ling off nil families. We are, howeve~,, j~vou~L of owners make up nearly two~tlth~ds of the p ship produces positive attitud$ of reap this reason, that ` we would ll~e to be a housing units to lower income ~a~mbies. owners, but we are able to use the publ'~ for the city. . Finally, with regard to publ~e 1~oiisin ., X ould like to again urge that the Congress authorize the Public EIrn~sing r~i Istration to make grants to local agencies for laud acq~uisftlon in the sam ` ~ and to the same extent as is now possible through ` the Urban. Rpne~al ~i 1 ~stration in renewal areas. This would make it possible as it Is s~ ofl~eu n ~ t es~nt, to build new public housing . units on land which g~wse~r ~ore scar ~e in our c1ties~ However, housing is not only1 a ~robl fo iow4neyme persons in our cities. Many people who cannot qualify for pub ~ 11~ sing are also unable to find satis- factory housing. i know that t~ie Oongr s h s worked for many years to solve this problem and I certainly do no~ hay ii f the answers to it. However, I respectfully urge that the sectiQn's ~2O a 2 (d) (3) programs be revised and improved to remove the manyi4ipedime l~s to he development of projects under 935 t~iQ1 ~ CO~t~ per rental room must also be re ~o be able l?o be constructed in the ; e~ ery big city. The leasing program, ~o~u lly ~ bold , gveal~ hopes of providing ?r ~ esponsive to changjng needs, sh~nld n 1.i `ases, perhaps as long as 5 years, in e ~ nd lo encow~rage property owners to ou~ lug standards in return for promise es~ I am happy to note a suggestion Liii n bills ~1Q~W before your committee. ag rograu~ I w~ild like to beg with I ~ ust say that I and the people of 4a~ year the Congress agreed that the s~1~ ngthened If local housing agencies 4~, ccupants on favorable terms in an I~ n~caliy, however, and at the last ) ~ lange this provision. It eliminated L l~ .s~ld, This meant, in effect, that ~w. ] rovision. . I a~~ure the committ~e ;s:v -hich are needed fo~ public housing Lli~ leiphia as: a city in which borne- ~ ation, and believe that homeowner- ii~i] tty and `good citizenship, It is. for )ie tO devise means. of selling public :u t his way, we not only create home- h9t sing program as a renovating tool PAGENO="0350" 936 DEMONSTRATION CITIES AND ~ RBAN DEVELOPMENT these programs in high cost areas. In the c~se of the 221(d) (3) progr m, this means a lifting of co~st limitatkrns which prOhibit the êonstruction of igh rise buildings which ai~ all that are feasible in ~itles like Philadelphia, wh re high land cost makes low-rise construction unfeasible. This could be don if con- struction cost ceilings were based on permftting the prospective resi ents to pay 25 percent of their incomes for housin~ expense, as is the case der the new. rent supplement program, rather than jhe present 20 percent. T e sales housing prog~'am adm~n(ster~ by FHA. nnd~r~ section 221(d) (2) , she ld simi- larly be anxe~ided to raise the mortgage li*ts to permit realistic u of this program as ~ resource for the relocation of ~persons displaced by gave nmental action. * . I Loans coulil also be made to nonpro~lt andy limited-dividend corporati ns seek- ing to build new middle-income housing b~it lacking the necessary unds to organize and operate prior to receiving 1on~-term financing. Federal loans to cover these organizational expenses would require very little money but ~ ould be likely to offer immeasurable aid in encouraging participation under exi~ting pro- grams in which such groups and corporations lire eligible. ~ The 3-percent loans and direct grants for i~ehabilitation of housing m~de avail- able to families living in urban renewal aqd federally aided code enf~rcement areas will be of enormous help in accelerati~g the rehabilitation o~f s~me older areas to the levels that we have so long s1~rived for, but neither of t~lese pro- grams isofl~ny aid to persons living outsidelotf these special pro~ject nr~as. May I suggest ast I did last year that the PHA $ltle I program be revised ~o permit maximumlo~ns of $5,000 for home improven~nt rather than the $3,500 ~t present and that th~ term of these loans be extendfrl to 7 rather than 5 year~. I am aware that the interest rate is higher thanE under other programs, an~t for this reason, many people did not agree with this ~tpproach. But the fact rer4ains that this program has been one of the moot suc~esstul ever operated by th~ Federal Housing Athninistration. Borrowers and lekiders alike are familiar with it, and it operates with a minimum of paperworkL and delay. I note that o~e of the administration bills recommends that lendbrs be permitted to collecl~ the one- half of 1 percent insurance premium on the~e bane from the borrower in order to revive this progam which has recently be4~n declining. This may hel ; I think my recommendation may do as much witho~it increasing the interest r te to the borrower. ~ ~ I During the past few years, we have seei4 the section 2O~ progam of the Com- inunity Facilities Ad~mlnisti~atidn beOOme, iu~fa short time, one of the m t success- ful housingiprograths ever launched by the Iedcral Government. The irect loan program ft~ housing for the eMerly has gr~wn so rapidly that the $1 0 million for a 4-year period provided last year is al~eady greatly inadequatet meet the demand. As a result, I must reiterate my~ suggestion made last yea that this program be given an increased authorizati&i of $250 million a year fo the next 4 years. The program should also be amended to permit the rehabi itation of existing property which would meet the needs of the elderly. At prese t, acquisi- tion `and rehabilitation `o~ such property iskhieligi'ble for financing un er section 202. The financing of nonprofit nursing h4mes under section 2&2 `she ld also be ~uthoriz~d under the same terms as nonp4ofit housing projects for t e elderly. This would make it possible to reduce nur~ing home charges by as m ch as $30 a month injeomparison with nursing homed financed with PHA sectio 232 mort- gage insui~Oce. Pinally, capital grants shc4uld be authorized for the c natruction of relat*~d ~ facilities, such * a~ clinics, coi4munity rooms; craft sho s and the like, In nonprofit housing fOr the elderly. f Much has been done in recent years to *tend relocation assistance to persons displaced as a result of governmental action but, I believe, Federal legislative changes are still badly neede& Last year, benefits previously availabTh only to those displaced by urban renewal were extended to all those displacefl~by the programs of the th n Housing and Home Finance Agency. I hope that this year the Congress wil ` see fit to extend these privileges still further to include all persons displaced y Federal action of *ny kind, to be ad~ninistered oi~ an equal basis to all. I addition, financial ajssistance to low-iiicome famili4s should be made more flexible and further liberalized, so as to guarantee theif firm establishment in thei new loca- tions throt~gh such means as payment of se~urity deposits for rent and utilities or grants' for purchase of furnishings. Al~o~ the relocation sdjustmen payments authorizel in 1964 should be broadened in~o a rent certificate progra to supple- PAGENO="0351" DEMONSTRATION CI~IES A~D URBAN DEVELOPMENT 937 of public ho' standard l'~" ~at all r~ faced with ~~tto ems irn on this statE [nistration ~ in Phila- I am proud Elected Th PAGENO="0352" ~RBAN D1!WE3LOFMENT community ~mpro~r~*nent whkii has be~li ~o siu~eessfn1 in aiding ~ 1 al c~xn' mnn~ties to a~sess their overall progress. J ~ I would r~conimend several changes in tl~é~workable program that ~ ould im- prove regional cooperation. Ltirge ~itles sl~ruId be re~tilred to ~ show itiation and support of regional ergani~ations whil~ small citios ~hou1d be re nired to show proo~f of participation in regional org~nizations where they exis in their areas. Cities seeking recertification shouldf~iso be required to includ develop- ment o~f reg1~nal housing policies and ~rOgra~ns and the workable progr rn should be expande4 to apply to all programs und~r the new Department of Housing and TJrban'Developinent. ~ . ~ On the ~4her ~ hand, I do not believe th~t ~the workable program intended b~1 Congre~ss to~ be a straitjacket 1~~r lpcal communities, but aid to the4evelojMneiit ot thejr lmproveifl$~nt programs. In recent workable ~*ogram has beeii t~plied ltiflex~Ld~r tb s4i~uations of great rather th~ in response to lo~ai cOndfflon4~d~a~ àset of fixed req rather than as a set of goals and guidelines ~loóal ~orts. Ithink tb should make Its intentions crystal dear tt~ tbis~ resp~ct. ~ Finally, to from beinga burden upon either local or FØ~raiofficials, I would recom recertification be put on ~ biennial rather th*n aft annualbasis. . In regard to the masS transit provisio~ of title III of the propo Development Act, I am proud to say that ?hliadelpMa has arleady national prominence as a "demonstration Ity" in its commitment to urban mas~ transportation. What leader h~p we have achieved as a region ~*~ts possible only tbi~ough the co peration of the Federal G4 in a SiÜEL1â4~ type program as that b~fOre ti a committee today. Phila44~h1a has always r~eogxiized 1~he ~pó~tai~e of a balanced ~ransporta- tion syst~ to the viability ot the core cit ~ in~a metropolitan area. ~ubstantial investm~uts have :becn made from ~ity t ~t dollars in a transit sy~tem which affords millions of people pe~ year a mob `flty and freedom of move4ient which otherwise would be denied th~m were they orced to rely solely upon h~ghway and street facilities. ~ ~ ~ ~ ~ ~ From 1~58 to present, Philadelphia's rec~gnitlon of the importance o commuter railroads to thecontinned improvement ó~ a balanced transportation system has stemmed ~ decline of this facility, In ems of (1) the levels of uality and serviceafl4 (2) the pt~bllc's patronage. ~ hlladelphta's stor~y, which egins with the Passe~iger Service Improvement Cot~ `~and evolves to present wi h the crea- thai o~ t~1e Southeastern ~énnsy1Vania Th~rnspertation Authority (SEP1PA), hats pr~vft~qTh~lU$lV~y to tite miwe than ~ nililionpeople residing wthin south- easter1~ j~ennsyivanla that~ the ~public ii e~trnent of local, State, nd Federal dollars th~ mass transpo±~t~tiOn ISnot en!: `of t~ethendo11s benedts, b t is, indeed, a neeesst4y. ~ ~ ~ In i9~, the Philadelphiareglon, with the aid of FedOral moneys uñdOr the Housing ~Act of 19~il,entered into a dem Sti~tLth~1 project Which sought answers as to whether the commuter facilities co~a~uiipete within and shar ~ the burden ol! the transportation system serving thlk regioti. That project terminated October ~ 1905, and although the final ~~ort on thisproject has y ~t to be con- ciuded~ the reported fact~ of this pro~~e~t demonstrate that we ha e increased ridership on one `segment of our~facllit$ by 50 percent to a level o ~ 5.G million passenger trlpsper year, a~L~1 by 150 per4~ent `on another segment of that facility to a leve~oH.~millionass~1'gert~ips pe~3rear. . The d*nionstration ecnc~t which pr4ved sueh an unqualified s ecess estab- liahed a regional p~liey felt the retenti4~ti and improvement of th se facilities, which; b~it a few years previously, ~rei~ of dubious yalue within the region's progresS~ That policy, once established ~omm1tted ua to a second d monstration progra1fl~ again with ~the ai4of the Feder~l-granta todetermine what must be done for finding ways of preserving and impr~w1ng this regionalasset of the rail corn- muter system. That demonstration, i~eferred to as Operation eading will continue until October 31, 1966. The d~mands and commitments o this project graphically portray the demands and ~ommitments of the "demo: stration con- cept" wherein all parties concerned must actively participate in full coopera- tion to a predetermined goal. In Ope~atlon Reading, we have ~ sked for and received such a commitment from railr4ad management, labor bro herhoods, the commuth~gpublic, and the public at iarg. A d$ionstration concei~t has thus $dned and clarified for the Philadelphia region 1~he real issues and problems ofja complete and balanced ransportation system, one which melds the highway d n~ass transportation fa ility into ons 938 D1~$T~NSTRATION CITIES' ANIY vas ever ather an ears, the diversity .irements Congress revent it nend that ed Urban chieved a revitalize city and )vernment PAGENO="0353" 939 DEMONSThATION CITIES ~ ND URBAN D1~VELOPMENT thtegrated, regional transpc~rtattioii sy~ e a~ This ref1~iement a~id c1arfflca~tion has afforded us the opportunity~ of makiu wis r public in~estiuents in the suture. Such a program ~iot o~ily bene~1ts the P 1 ~d iplila regib~i, but benefits those senior governinent~, State and Fed~ra1 in ou ~ J~41it~r to sui~stantiate a request ror aid ar~d our ability to use that a~d where ~ tt s its maximum value. Philadelphia has budgeted and progran~e~ $153 in 11 oit for expenditures between 1966 and 1971 to accomplish the first s~ge~n ~re t p~ vastly impro~e~ network of modern transit raeillt1e~. In additlox~, th~er~ L I 4~ ated a need in excess oct~ $139 million to preserve and improve the region's r ii omniuter ~iUties. We are firmly convinced that there are no r~asobable o ~ noniic alt~natIves available. to that program, and those needs wl~ich can i e ~ mOre value tor our public dollar expended.. ~ Accordingly, we are of tl~e opinio th~i Uouse bill 12946 authorizing an increase in grant authorizatjon ~ for ~ a mass tra~isportatiou for only $95 million for the fiscal year ~~38 Is t .ê b se minimum, less than truly ade. quate, which this committee s.~iould co ~l .~ Ftherz~ore~ it is imperative that consideration must be g1ve~i tO~ legisla io ~ hieb allQws A treater percentage o~ Federal participation In ~ac~ a~id e e ~ a~ trau~pot~ation grant project. The dollars which the local ar~as ~nust ~ en i~i providing ~ balanced trartsport~~ tion system should not be rè~iired to O i$ e with each other as they relate to highway and, mass transportat~oi~ proj ~ . Again, let me thank t1~ con*ulttee fo ~iyi g m~ the oppoi~tunlty, on be1~ajf of the people of Philadelphia, t~ pz~eseu ipy lews on the Important legislation before the committee as Well as çai ot ~ ~ atters r~ia~ix~ to the housing. and development problems of Amei4can citle PROPosAL TO THE DEPARTMaN~ OF HOlY I 0 ND URs~ t VRLOPMENT B~ HoN~ JAMES H. J. TATE, MATOE, C~TY, OF P ~D lilA iron P4i~T~CIPATIoN IN Pnnsx- D1~NT JoHN.sON'~ DEMONS~CRA~ION tJITI .$ RAM ehavec~. sive and cooi path which v, to plan and execu ortatlon, C )II.L~ ecurit; economic tls-the arci itects, So 1 types, as well as the this level of I --~-~-~`-~is ~ needed now i decency and THE rRO1?o~an l'ITIL t~ LP~ IA PROOR4M Baokgro'uaeZ . , The format of this proposal is pui~posel a~ to coincide with the eight major requirements of the Demonstr~tIon Cite ~L t of 1966. The plans and pro~ grams that are now operational~ in the It o Philadelphia are definitely con- GO-878--66---pt. 2-23 to pay l_~ deprived iij :~ squaloi ~ to the iated a ~, and ci. ~ ~ accomplisi I one of C( f~ the PAGENO="0354" 940 DEMONSTRATION CITIES AND RBAN DEVELOPMENT sistent with each of these requiements, but lhe lack of funds has limit d their effectiveness to a mere fraction of what is 1~ea1ly needed to produce decent environment. Thus, for each of the eight requirements a summary st tement concerning existing programs is set forth as ~ a goal yet to be achieve and is then followe4 by a propysal for extraordidary action which would e made possible by `t~ demonstration cities program. The city o1~ rhiladeiphia is completely ge4red fOr such action as a esult of a 3-year effoJ~t on its community renewal p~egrarn~ The plans and re ommen- dations whie~i emerged from that effort ar~t~dpa~ed the philosophy be md the demonstration cities program ; namely, . tb~t the entire core of bli ht and deterioration must be considered as a single~problem and a single opp rtunity. Throughout the city's problem area the progr~m called for an even and quitabla distribution Of renewal activity with the additional requirement t at each investment have a clearly demonstrable s~edfic return. The major actions called for included selected clearance, accompanied by a relocation lan pro'- viding maximum coordination between the ~1splacement rate and the contem- plated increase in housing supply for the entire city, strengthening of r maining housing and neighborhood environment, th~ injection of schools, co munity facilities, ap1~ropriate1y priced housing, ge~erators of economic acti ity, and mass transpqrtation facilities. This propdsed demonstration program is 4~t J~Orth in the conviction hat this is the logicail and needed stej~ toward con~foIi&ttlon of renewal effo s on all fronts. We ~e1ieve that the actions propose~i herein will bring about a substan- tial alteratioli in the phy~ica1 and social enflronmeñt for 20 percent of he city's population. GenersZ 8trategy for red~u,ing segregation The program outlined below incorporate~ the following strategies designed to reduce housing segregation by race and ~ income levels: I. The provision of first-rate schools sbrategically placed within t e project area will attract families of all backgrounds who place the edu ation of their children before other consideratio~is. 2 Through the new concept of conini4uity schools, the provision of sociaI~ economi~, and medical services of ever~ description to produce In he disad- vanta~l residents of the. project areaj the upward motivation a ong with the skil~s that will enable them to surfive in an environment of heir own selectioi~ whefl, and if they should decide to leave the ghetto are 3. The production of well designed~ attractive neighborhoods refie~ting totally hew concepts in community living which will be sufficient y attrac'- tive to other than minority groups as a p~aee to live. 4. Intensification of the full range of housing programs now operating throughout the city which have been specifically oriented to roducing Integrated housing and open occupancy~ 5. The development of a program t~ generate employment fo minority groulis in suburban Industrial and comn~ercial centers. 6. E4largement of a centralized b~using information servic to keei~ the lov~t-1ncome minority faintly infor4~ed on hottsing avallabilit through- out t1ie~metropolitan area. : ~. SOOPE OF ~ P1&yeics~ and~ sociai Urnensi&n~ North Philadel~phia constitutes the sinkle most. deteriorated, so ially cam- cerous and economically deprussed area i~i the entire city. It cove s an area of 5,000 acres and contains 15 percent of all the dwelling units in the city- shelter for 341,042 people. Table 1 on the succeeding page places t is area in relation to the city as a whole. The 8,97S~derelict structures and iii ble-streiwn lots located in North Philadelphia compri~e nearly 50 percent of all structures so classified in the entire city. There ar~ some of the representativG pltysieal dimensions of the p oblem. A measure o~ the human dimension of the ~problem is set forth in t e selected social indléators set forth below which wfre assembled from stand~rd sources and based on data collected frequently ~nd uniformly by agencies concernEd with specific problem areas: A. PAGENO="0355" DEMONSTRATION CITIES TABLE 1,-Physical mag~initude Item Population - - Total dwelling units H-- Soundw.a.f Owner occupied Overcrowded Derelict houses _ Derelict lots 17 13 12 10 35 47 40 Percent of city populatic Percent of city blrths__ Percent of illegitimate Percent of depe Percent of j'~ Percent of ( anee B. Arresting blight and decay Present programs sing: A target o treated e - ar for the first year's expenditure is 2. Code enforcement: P enforcement prou~ms of 16.5 l& 6 39.2 52. 1 243.4 36. 0 ictures oval. ~ the major `~~")tobe v. The - -~ )rices ~ Proposed programs The three-pronged attack on thig reach every structure in t~ dem~ tude of the action will as well as involvc will spell out how. ation .-- - i grant ur ~r moderate ~nd in all parts of --4 elphia PAGENO="0356" ~1 D~MONSTR TION CITIES AND URBAN DEVELOPMENT 1. It is prqposed tha~ the temaining 4,000tderelict structures and lots located in the North ~hiladelp1~Ia area not presently ~cheduled for treatment in he joint effort started as item i~ under Vresent programs above be incorporate . in the 6-year demoflstration pf~ogram. * However, n~t all of these properties w 11 be r& built or totally reconstru~ted. For one of the~ goals will be the strategic osition- ing of open green space~ plantings, conneet~ng walkways, and general opening up of those areas long co~gested by rubble-filLed lots and junkyards. TI e budget for this program is estima~ted at $24 million. 2. Implementatkni of ~f comprehensive rehabilitation program for 28 standard units : Here it ~ls proposed that the low-Interest loan and g visioiis for residential r4abilitation of the 1965 Housing Act be utilizel isting owners who are wi'ling to participate. Alternatively, of course, t ness to participate will 4iean major acquisition. A first estimate of t~ this phase oftbe program~would be $140 rnilli+n. 3. It is proposed that N~ie 110,000 strnctfires in North Philadelphi brought up tb or above codA~standard withir4 the ~3-year period of the d tion progranhi. It is estimated that funds i~ the amount of $8 millio needed for the execution of th operation. C. Narrowinqi the housing gap Despite the fact that the ci ~ of Philadelphia has carried out a dynai renewal program over the pas 17 years, theke are still 8 square miles rated housing in the city of 1 illadeiphia. Present programs, because ciency of ftnds or dela~Vs in naking then evailable, are unable to re deficiency at a pace which m kes general u~grading of the city's hoir possIble. \ The extent of Philadelphia's housing sup~1y problem has been dete a recent market analysis. It is\estimatedj that demand for 81,000 housing units for low- and mode~tte-inconfe families will be generat next 6 years~ by grçwing poptiIatlon\as well ~ts demolition for public de programs. What ~OIlows is a sche~ule fo~ the next 6 years of the housing supply expected to be produ~ed by ~resent city programs: Pre8e+~t programs \ 1. Philadelphia's 6-year housing prog~am t1965-71) (all agencies): - New dwelllz~g units: Urban Public uruan ----~--- phila4E~lphia housing dev~iOpment Total dwelling ~41-~, This schedule applies to renewal and coiu city. HoWever, even ~ this figure is subje( expected that the 6,960 unIts Scheduled to b( areas will not be in the price range that afford. - In addjt~on, the- j~a;900- units schaduled corded as 4iet additions to the hou8lng st gram will produce- only 9,54~ addItional more than~ 10 percent of the city's low. btusing deniand over the next 5 years wil ipated gap is 71,000units. Proposed progrö~ei 1, The city's goal is to create a floor in the level of physical and sod below which it will no, longer permit humian beings to fall. The de: program proposes three ~ major actions ~hich will be executed o 942 000 sub- ant pro- with ex- willing- 0 cost of will be nonstra- will be Ic urban deterio- f insnffi- uce this Lng stock mined in dditional d in the elopment dditional Rehabill~t4~d d~1llng unitS : Public ~ionsing-used L 6, 960 3, 419 10, 379 4, 630 13,900 1.500 20, 030 30, 409 the entire veiy, It is clearance rruilies can ~ervatIon action throughou ~t to revision. Conservat ? provided In -urban renews low- and middle-Income f ror conservation cannot r c~k. At the maximum the LZIjtS. This -means that o and moderate-income fa be met by this program, ally be re- aitire pro- ly slightly Lilies' new The antic- I existence onstration neurrently. PAGENO="0357" DEMONSTRATION CITIES A These include new constructi~n, ~eha ii extension of the used hotise pr~grarn. (a~) New construction : Coi~stri*ction c for appr~ximate1y 300 `acres c~f a+aila ~ rhiladeiphia, which will inco~Yoi~ate e~ space, in neighborhood development, a d ~ The new environment would be orienta e for human interaction, the need for i ei of beauty in one's environuient. ~I~he ~ the relocation accommodations for fa ii: projects that would be execut~ed t1~ou Ii They would also be ~ part of the total s quired by 1~7O. At varyIng~ dei~isItie or underused space resou~ce~ wc~u1d e 18,500 single and multifamily dwéllin t ing 55,000 persons. The inve~tmetit he e (b) Rehabilitation : In tl~ $st 6 mo rehabilitation on a broad s$le have ~ adelphia Housing Developmei~t Corpo city, in the amount of $2 millh~n, ~zhich and resell salvag~able houses~ It als I dividual owners to complete re~iab~litat4~ The second operation consi~s of a $2 ~ institutions in Philadelphia. These ~w purchase of FHA-insnred fir~t tx~órtg~ expected that these two oper~tiohs s~l the two possible decisions pr4per~y o~ program. The decision to participate wi'l me~i absentee, will have extensive architec~n services available to assist hi~n ir~ carr~Vi the decision is not to partlcipa$, tj~ie Phil tion as well as other cooperat~ng ~igern ie and resell such properties as a i~atte li1~eliliood 7,000 to 10,000 $f tl~e 71,3~1 1~6o housing census will require sçme (o) Clearance and replacevçien't: w: place, the pattern of demolitio~ and rej stration purpose~, require cai~eful plan projects at a time. With the g~adual as which will permit total recon~truction *perimentation in space plannlijg afld ds~ (4) Used house program: r~ecer~t sur presently vacant and In aceep~able con white neighborhoods of the cit~~ 4~s a it Is proposed that these units also be br used house program. The result of this In the project area `would be ~edt~ced; reasonable rate could be gotten uflder~ $100 million. II. Tll~ PLAN I~O1~ c~ A. Schoois The Board of Education'~f ~he ~$lty `o~ 6-year `building program for th~ entire ci plan. It consists oflower scho~ls o~ 3 ye followed by 4-year middle and i~per s uniform in the fiz~st 4 years, with diff~re: through appropriate program~ `for .tho~ academic acc~mpllthm'euts as ,oppp~ed and technical responsibiLities,. Ot~ier c slow learners. Sep~rate1it~h s~I~G~ls Wi academic training. ,~ ` Part of the *eori~trnctj'o~i pro~r~n~i call; i are felt to be major steps tow~ ~econ ~p ~ew directions in ethication. The IIrst I URI3AN DEVELOPMENT 943 on, clearance and replacement, and otally * new. environment is proposed ~r ground and/or air space in north ~sign concepts in' the general use of the individual family dwelling unit. ward the human condition, the need ~ation, and theneed for some sense ~ units so constructed will represent :0 be displaced by vario~is clearance the entire north Philadelphia area. Ly of 71,000 neW dwelling units re- dwelling ~udts , types these uhused )ected to accommodate as many as ;, and house a population approach- ~ld approach a total of $150 milliQn. `to signific~ii~t operations to facilitate constituted. The lirst is the Phil- a nonprofit agency, funded by the ie authoj~ity to acc~uire, rehabilitate, tile authOrit~r `to lend money to in- ~grams. n, fund sub~Ibed to by four lending are dési~at~d to be used in the td bou~e illiprOvement loans. It is rk closely t~getber in dealing with will make upder the demonstration at the owner, whether resident or financial ~nd community relations ut his Individual program. Where Dhia I~ottsing Development Corpora- 11 be ready to acquire, rehabilitate, ormal operating procednre. In all ug units judged to be soinid by the I~ `maintenance afid/Or improvement. :t~nsive new construction will take Lent will, for experience and demon- rnd be limited `to one or twe small age of cleared land to a sizable area, neighborhood basis, all types of e~- ~ unit relationships will be executed. udicate that6,200 dwelling units are for improvement in predominantly )ward reducing housing segregation, into the Public Housing Authority's 1 would be twofold. First, densities d, movement, opt of the ghetto at a Fhe cost of this program is set at rir~ `~AOTLITX5s ~deipbit ha~ &1opted a $4~O million `he program Is known as the K7-4---4 1~ preschool and the `first four grades, L Th~ curriculum would be fairly )~1 being itiade in the middle 4 years Q show' promise of leadership and ~e' who wlll be grOomed for trades lum~ will give special attention to )tetheznseltes to either technical or ~J1i$~es Whi~h have not existed but n~'i~te~ie~ as well asprovi~ling e `cö~ce~t ót `the magnet school hi tat a cle 7 dl to I tc ti~1 es ottt tnd ~4 IS t en `S t iI,l~l w~j t~: raI', ~ig tUe f rel ~1g rub] 1ii~ ys i ;iot p ~i gut ~tio cor ft O] Ii :s: a ie~ PAGENO="0358" 944 DE~IONSTRATION CITIES AND URBAN DEVELOPMENT which, initia~11y, facilities will be added to e isting high sohools. Thes schools will ~ro~Tide instruction and trainhig I concentrated subject area~ the sciences. ~ fine arts, applied arts. In add ion, special tutorial servic also be available. Under `this program stude ts could come from every p~ city to use the special facilities. Wherever ~possible, new housing woul structed or made available in the vicinity of these schools. The concept c schools will also be applied to lower level schools for demonstration an tory ptirposes. As stated eárler, this part ofPhiladelphia's proposal is ~ a key factor in achieving Integration. The entir~ program places integration a*ead of convenience and r that fifth to eighth grade students can be exi~ected to travel reasonable from their hpme~ aXid would p~rnilt 63 pere~nt of middle school childr perience int4grated education. liigh sehoo~s, on the other hand, will likely tob~1aced in the fringe areas, that is~ the outer, less densely sett of the city. ~ This wonid permit schools to $rve students drawn from populationba~e and would set the stage for g~adiial merging of city and school systems. In addition, ~ha~ed time p~grams, shared use of magt centers and community schools are viewef as ways of increasing p~ parochial school contact. Finally, there is the community school concept designed to develop cc leadership, bring about improvement in the physical and material well the people, and a closer rOlation of curriciila~r content and instructional with the life and needs of the immediate 4onimunity. These schools ceived of as operating during evenings and ~eekends as well as throu day. Withiti these community schools, thete would be systems of ge individual s~rvices which will form the foi~ndation for every prograr services WOthd include : ~ 1. Didgnostilc services for health, educ~t1on, and welfare problem~ 2. Metital health services. I 3. Leadership idontifleation, recruitm~rnt and training for respoi in new civic programs that are developed. 4. Cultural activities in the visual and performing arts. 5. Manual arts. 6. Employment services. 7. CommunIcations and liaison servi~es with other public agen The program for North Philadelphia ov4r the next 6 years calls f elementary $ehools, 12 middle Schools and 5 *ew high schools. In additi substamlar~ school in the entfre project ar~a is to be replaced. It is that this po~tion of the city's total prograul will inv~lv~ an investmen~ than $150 üIllllon. B. RecreaUón The city~ comprehensive plan for the orth Philadelphia area ca new and 6 ezpanded recreation centers to set the needs of the reside area. These are planned to be combined ~with educatIonal facilities use wherever possible. They will vary in sjze from 4 to 12 acres. Ph standards call for visual as Well as recreational amenity in the neig The minimum cost of this program Is set at $10 million. C. Com~nerokrl facilities Eleven nit~jor and five mLinor new eomn the shopph~g and buainess sel~viee needs c sites for S~C1aI aetivity, libraries and lo would reqnfre the investmeu~ otamininium magnet such as ~s would rt of the I be con- 11 magnet I labora- lewed as cognizes listances ~n to ex- be more led areas a broad ~uburban et school Lblic and rumunity ~being of methods are con- hout the eral and i. These sibilities les. )r 5 new on, every stimated of more is for 17 ~ts of the for joint ~ir design Lthorhood. ~reial centers are ~ the population as LI government services. designei well a f $20 million. L to meet a provide ~his plan JJ. Transportation The attached comprehensive plan for year sets forth a clear-out ezpansbm plan system. That this plan will ~th~ily be bx the recent purchase of the entire System fix Pennsylvania Transportation Association, pose of this purchase has been to accompli~ coiicepia bringing about redu~ed cO~ts and public. The city's capital program refiei access throUgh this system to~its commerc has also `taken the lead inin~t1ntthithg thi apid transit pnbli~hed es for the city's public tran ~ught into existence is ass 51 private hands by the Soi a city sponsored agency. ~ new management and de increased efilèiency for the te a total conimitxnent t al and industrial centers. öommuter railroads at a ~lier this qxrtation ured with theastern The pur- velopment traveling ~ improve The city ugh level PAGENO="0359" DEMONSTRATION CITIES of service and efficiency, wit~i the ide suburbs. These programs have acliiev In keeping with the mand~ite to e cities, a portion of the pla~ining fu problem of creating an 1nter~ial puibli be to decrease the number ~f s~ngie * At the came time the city w~'uld seek residents to commercial are~s, cente: play areas. In addition to developli actually be applied to the de~ign of ai Present programs A. The city is obviously *ell nude the human conditions; how~ver~ it i surface At least a dozen p~o'gi~ams `18 months oriented toward human r special skills. Approximate~y 1~,2OO gramis and well over 90 percent of thi ment. The investment in people in t mated at $8 million. The Philadel board of education, and the city's man major roles in coordinating, impleme addition, it should be pointe4 out thai and cultural enrichment invo~ve~ an s Proposed program A. The guiding philosopy b~hind the ~i rests in the single principle ~bat peo~~le of their own values, rather t1~an on th~é to impose. The only way that purpo~èJ done effectively and not be se~f-defeati~i own future. Further, that iii order i~O given, the first prerequisite will be t learn what it is they want. Once tb it is that which they themsel~es desire a direction will not be that fraught with 11 The foundation for widespread citiz U principle is well established tiiroi~gh p 5 and urban renewal agencies, which o neighborhood organizations ~nd lead r~ plans. A considerable amount of expe i major conservation project ai~eas. M I~E Implemented with the comm~inity act o: In carrying out surveys of soci~tl aüd ph s B. Total citizen part1cipatio~i is plan e~ 1. Community action eoun~ils ~voul process, with competent iead~rship to ~ the kind of neighborhoods the~ desire. 2. As a part of this proces~, the ex e sidered imperative for the pt~rpose of c needs of individuals and fan~ilie~, the~r to pay, as well as gain some 1~db~atioi~ and neighborhood area. 3. Citizens would be trained arid ei~ip ~orcement program which woi~ld ~over~ e~ 4. The new Philadelphia H~us~ng L~er opportunity for work experience t~ resi~le rehabilitation. 5. Plans are now underway for the c~e~ development corporation. It is 4eslgr~é the Negro entrepreneur through the f~ finance institutions and servic4s. How~v demand will first be establis1~ied thr$g 502 program. Under this prOgram, S~A toward reaching goals of bettering r that we have just scratched the been put Into operation In the past Litation, job holding, and providing ns have participated in these pro~ er have gone on to regular employ- rograms during this period Is esti- ntipoverty Action Committee, the utilization commission have played and executing these programs. In rams for general human betterment nal budget of $8,700,000 for 1905. :i participation aspect of the program *ke their own decisions on the basis 5 of values that someone else wants mltural change, or planning, can be El occur when people determine their rg about change and for help to be ;t the citizen in the project area to tion of change is determined, since ot something external, taking a new ty. ticipation consistent with the above licies and programs of the planning olve close working relations with the development of neighborhood has been achieved in at least three ently, cooperative activity has been uncils of the antipoverty program * conditions. ng the following lines: ndoctrinated in the total planning * them in their decisionmaking on a of a socioeconomic survey is con- ly establishing the specific housing sent financial condition and ability ~iat their feelings about their homes d in the execution of the code en- structure in the project area. ~ment Corp. provides an immediate of the area in the field of residential I of a businessman's investment and achieve the ultimate liberation of nvolvement of normal commercial uch competence as these Institutions ie Small Business Administration's .11 lend to the nonprofit investment ND URBAN DEVELOPMENT 945 of educing automobile traffic from the 511 stantial successes. ri ent expressed in the demonstration ~ oulcI be allocated to deal with the ra sportation system. The goal would ~to obile trips inside the project area. ~ e~tablisb a system that would connect o~ employment, schools, churches and tI~ circulation patterns, funds would pp opriate vehicle for this purpose. a 4: Lg II1~. CIPtZEN~ I~A~ICIPATION 1 di ele~ ye sb! srs our ~e rog Liti :i~è c~á~ ul WI tel Lire 4 Lcu] pai ~nc re 1 C cal uld itic Lea: pri Loy !er3 010] its tb to 11 ~r, 1 ii PAGENO="0360" 946 DEMONSTRATIoN CITIES AND tIRBAN DEVELOPMENT and development corjx~rat1on 80 percent o1~ th~ funds required ~r land, b ñldings, and equipment, for 25 years at 5~/2 percent h~terest. Under the timbrel a of the flonpro~it investment and develGpment corpor~ttion, a maximum single lowable loan per bu~Iness will be $~5O,OOO. TYnde* this program, shepping centers, factories, par~dng garages, nursing homes ai4i a wide variety of busine enter- prises ~ can ~ 1Inan~ed. Here again the n~cessary supporting funds will be sought ufld~ ~he demonatration program. I The total ~ost over 6 years t~1ng the etp4~rience outlined under pre ent pro grains is ~sth*ated at $50 mill1on~ f ~ Iv. ECONOMIC DF~VKLOj~MENT A large number of residents in the project ~rea have been, and contin e to be, totally removed from the mainstream of intlustrial, commercial, busi ess and professional life of the greater Philadeiphia~ area. To date there has been no professionally directed and coordinated effoit to initiate new enterpris s or ex~ pand existing ones in the area. This shouldtbe an integrai part of any develop- ment program. Fortuitously, the area is O~racterized by a host of existing industrial faqilities all strategically located ~n relation to the residenti 1 areas. The city pT~*oses the iraplemelitation of a4eoerdinated effort to aeq ire land an~d eonatrue~ or r~thabi1itate suitable struii4uFea through a combinati n of in- vestment fiin4is from private bU~inessmeu, Io~al banks, and government develop- ment funds *here available to bring these ~ac1llties into maximum p ductlve use. It is proposed that $10 million be ailocajed for a revolving fund to acilitate the regeneration of business activity in the ~rea. The mechanics of I s opsra- tion will be founded on sound practice and~ experience the city has d veloped with its industrial revolving fund over the past 10 years. The demonstration prOgram will also inclttde a coordinated effort to stablish conditions in the area to make It attractive for business to locate ther . Such effort will include, but not be limited to : A. Residehts of the area through their e~isting organizations makin known their desire tb attraet, protect, ~nd foster bu$inesses in their community B. Assisting existing small businesses 14 the area to e~pand the cope of their operati4ms so as to employ more perso~is. 0. Prom~41on of industries and bnsiness~s that are not technologi ally ad- vanced, so as to absorb presently unemploy4d workers with low-level kills. D. PromotIon of hiring of local residen1~ insofar as is practicabl by all bi~Sinesses inthe prOject area. V. PVBLIC IMPRO~*ENTS Costs for itnprovements of streets, water attd sewer, lighting, and pob Ic facili- ties of all types to complement and supperl~ the myriad of structural de~ve1op- ments can ly be tentatively approximated. firm estimates must a alt firm plans. However, the record wjll show tha4 at least $50 million in p blie im- provements have been invested. in North P~ffladelphia over the past 0 years in the projc~ts thus far executed there. We expect as a minimum that an equal a~toun4 should be reservedfor the demo~1stra:tion program. VI. ADEQ1YAckY oir MUNICIPAL APPnOPRL&TIO~4 AND snnvicns ARE DEMON TRABLE The atta~1ied capital prograi~i for the 6-y~ar period 196~-71 is typic 1 of the continuous pi~ograming processes carried on ~by this city since 1945. E ch such program is adopted by city coUlleil and re~Seht~ a systematic executi u of the various facets of the comprehensive plan ba~ed on a total strategy of unicipal development. The adoption by council rep~~sents a commitment to ake the investments ~iecessary to realize the long-r4nge goals of this plan. The capUi~i program schedul~d for 1965-~1 calls for an expenditure of $1.19 billion. Oft ~thls figure, $508 tnillion willftte appropriated from cit funds. Each project is carefully scheduled to refie4t realistic production rate in view of the lii~its4ttbecity's total r~sources. The city 1~as scheduled $80 million in ~p~b1ic improvenients for No th Phil~ adeiphia iii ~the current 6-yea~' capital pro~rab~. The additional fun s which would be mi~de pOssible by the demonstratl~it program are essential to meet all of theneedg4f the area. PAGENO="0361" w t T n S )f Efrt ~t. ?ral hI se. I di~ ~i1l~ ath ~ sa~1 ani operated an e~tremeiy successful icy program formulation and ion, the qity will bring together all ave a 1e to play in this program. te systen~s' ap~roacb to the entire the ai~proach that has worked ~o !Fbis tool will enable us to specify n~ formulate new ones directed toP. i~ Intended to eliminate duplication ci a ximtun return on Investment. R1tLOCAPIO±~ ~O~tT~fl~G housing programs set forth under persed throughout the city's neigh- ly provided iti the project area will ~n pOssible of accom~tlishment with- )ds* hi whhth they have been living for ne~v ccnistru~tioti proposed under s of dlsplaeed families. ItOUSING~ AsS~1tE~ ider .ge~evai strategy for reducing Little elaboration is required here Und~ I-~J, as eonceived, will pro- )lce of l~onsjng ~or nil citizena, aMENTS appZiod `~n~ the progra~nA concepts already exist. The high rig already established in the Phil- Center and Society fill will be cx- a comprehensive basis. This will e architecturally inspiring and will means threading through the area iuty to residential streets and pro- ci and playgrounds and mothers to `ay, i~or example, in the Mill Creek Park. ~, in phV8icaZ development provide technical information and Os to cost reduction and improved tudy is being executed by the ?ratt Llty Co. o~ New York City. Building Lards are all coming under thO pur- study should have a major influence and practices. .ction program outlined In this pro- building contractors and trades as- 1flc relationships, so as to facilitate iled residents of the North Philadel- ts unskilled job openings. The ob- f manpower to accomplish the task ~ith ea,4 sting pkvns ri city has extensive industrial and ?awlde transportation plan covering ion program would in every way be bility of such programs. W~BAN DEVELOPMENT 947 A SINGLE GOVEE~ING BODY pEMONSTRATION CITIES ND VII. PEQGRAM AtXvIIdRXP* vn~ a The city has, for a con~ikh~$ble ~: system of lnteragen~ ~oifl1~ilttOes f r coordination o1~ in~iplemehtati~n ef~orts. In line with preseht ~Yatte*xiS of co~ p of the public and private ag~nc1es wi h The city's admin1str*tlon~ Is ~tudy In development program oi~ th~ city. T ~ii successfully in the Dep41'~tme~it Of Dci 0 the merits of each of the pr~grams a ward improving the nrban et~Vft~nmer ~. of ef1~ort, assure a shigleness of ~urpo ~e bs VIII. ADEQtATI~ rROvIsI4 The many-faceted existing an~l pro 1-0, will provide 19,700 dwØllln~ uni borhoods. The increase In tI~e honsin make clearance of some 5ite~ attd re] out moving families out of the ~ieigh if they do not choose to do so. .Plje pro I-C is more than adequate fc~r the rel4 IX. FEEEDO~ OI~' (11101 feferenee is made to the. ~t~tem( segregation at the beg~nu~ug df this pr to dem~nstrate that the pro~~osed pro duce a full range of opportur~itie~ in I I~1 hi ~. OP~IEE ~tIt aPi on Ill 1 a~ ll~j] A. The highest sta'n4ards of design `iji Task forces on design an~I dE~velo] level of architectural design anc~ lan adeiphia program in such p$jects as tended into `the less pr1v1le~ed ares include new community eent*s ~bieb give new dignity to old instit~tio~is. garden feotpaths or greenwa~vs bringi viding safe ways for cluildrei~ to go t shopping. This program Is álretkdy u Greenway, Penn's Landing, an~l the Seh B. &~tting new goa~~ ofeco,to~hy and e~7 The city has funded a sp~icial stud guidance, as well as to' estØlish ne~ standards in residential eGnst~uctlon. Institute of Technology and tl~e Tlshm materIaLs, construction tecbni~que~ and view of this investigation. The re~tilts on altering present public and ~rivatep Further, in view of the enOrmous ci posal, the city is prepared to bri~g toi soclations and labor unions tO work o~ the entry of large numbers of presently phia area into the various ti~ade~ as jective will be to create an a4eq~ate 1 on a continuing basis without *ork stoF C. The demonstration progran~ is ôonsi~ In addition to the comprehensive p1 commercial development progi~am~ and mass transit and highways. ~he demo consiStent, and in fact, enhanced b~r the e~w to oni Lie Re~ tb~ ~ie~ itri ~pe ~l c ge~ n~t i ., t~ ra PAGENO="0362" FUNDS REQUIRED 1~OR THE tEM Table 2 si~inrnar!zes the cost elements o~ ~the demonstration progri simplified form.. Rather than hazard a firm E stimate of total ëost of the i we have set forth the t~ta1 amount of publi ~ funds that should be res its execution. Note should be taken of tw ) items which would subs alter the total requirements. The first is l~ nd acquisition. This is si because it is difficult at this writing to deterir me precisely to what exten from resale otf acquired land would reduce th ~ land acquisition cost. TI Item is schooJs. Under the Elementary and Secondary Education Act which provides construction funds for expei~lmental schools, we would cover the eu1~ire cost of the school plant req$dred for the new K7-4-4 If the cost:for schools Is not admissible, tl~en the total Federal grant ~or this prog~~am, using the demonstration cities program formula, woi~ duced to $450 million. Further, regardless o~ what level acquisition co~ reaeh, we ea* feel sure that the total requirfr~d Federal share would bE of $400 millitoji. The amount of private investment gener~ted by this program can guessed at. Our program calls for 7,000 new}dwelling units to be consti the private market and major expansion, in ~commercial centers over t area. The$1O million revolving fund for ecoi~omic development could co generate 10 times that amount of private expeflditure. Some Idea of the magnitude of the requi*ed contributions by the ci this program can be. gotten if it is assumed that no part of the land ac cost will be recovered. ~`rom table 2 it will I~e readily seen that the bc butionfor the 6-yearperiod would amount to $17 million. To snmma~ize, the city administration ta*es the position that fundE to less than ~Ivhat is proposed herein would ~e inadequate and unsatisf the stated goalsofthe program are to be reall~ed. TABLE 2.-BUdget for the proposed PMlade~hia 6-year dcmonsfration Title I: Land acqtilSilton Public Inipro~rements Code enforcement Rebabffltation program Total Public housing Poverty program Economic development Schools Total Esti *Eeder ii' demos pro $s~ooo,ooo 5,000,000 8,000,000 14O,ooo,ooi~ 233,000,000 174, 000, 000 50, 000, 000 10, 000, 000 150, 000, 000 $218 174 49 9 150 617, 000, 000 600 nated %1 share der stration ~ram ` . 7,000 new dwelling units. 16 new or improved centers. 13 new or Improved centers. Street Improvements, uti 110,000 structures. 28,000 substandard dwelJ 14~700 dwelling Units! TraIning and social imps RevolvIng Investment fu ExperImental progras schools. 000, 000 000, 000 000, 000 000, 000 000, 000 -.--- 000, 000 Applicable Federal program Estimated reservation of funds Projects [ties, etc. Lg units. 948 DE]~I[ONSTRATION CITIES AND tURBAN DEVELOPMENT ~SPEATION PROGRAM im in a rogram, cved for antially niñcant returns ~ second of 1965, hope to rogram. equired d be re- ~ would upward only be icted by e entire ceivably y under uisition 1 contri- amount ctory if program~ Dmmercial recreation vement. id. -22 new PAGENO="0363" DEMONSTRATIO&\CthES URBAN DEVELOPMENT 949 PRI~LIMINARY PLAN PR0POs4S ~OR .~ CITY PLA~NI1\9 Co~, D~S~t~TIo The North Central East s~ct1oi o~ Lehigh Avenue, on the east 1~y t~*De a by Spring Garden Street and on t~ 7~ 1960 census 152,305 people liyed bei cent of these dwelling unit~ were ~ population has declined froi~ a hig~~ e A large part of this decline ~an be t ~ in the western part oi~ the ~rea. T dominant residential patterti. In g~ ~ the minor streets and in the x~ewl~y co three-story houses, now ofteii convert streets, and in the area boun~led by ~ and Norris Street. Except fqr p~*blic ~n no large multifamily high-rise! strUetur~fj In addition to the predominant re~Ø1 ments have located in ëontin~ious strilá Avenue, Frank~ord Avenue, Pront Str~ Street, and parts ôi! Marsha'l Street establishments are scattered throu~h t shopping areas serve the adj~tcei1t be o Street, Lehigh Avenue, Fror~t Street,~d market. Completely modern~ shoppin c Next to residential, indust4~ial tises ~ North Central East. Except for Pe [~ shopping complex, port oriented i~tses 1 ~ An area predominantly indu~trial bu extends from Fifth Street t~ Frankf ~ Garden Street. North of ~ B~rks Stre of American Street to Lehigh 4ve~iue. Avenue and the Ninth Street tine of th obvious concentrations individual pla t apparent pattern. Six hospitals, St. Mary's, I~ensingto ,~ and Stetson along with Temple Univer F institutions in the area. Te*nple JJni E with an extensive building program. ~ have recently engaged in major new cc tutions, many churches and local club East. There are 13 playgrounds a~id 6 park are below the minimum recon~mended I for field games or for fieldho4ses. Tb s PR0POsA~S ron N YJov~sing In August 1965 the Phi1ade~phia. Dei a tilled 3,926 dei~elict structure~ an~l 1,5~ 4 lots are grouped to form larger par ë improvement in the physical ênvirOnm ~t quality and the number of t~ie l~ousi ~ Philadelphia acquire through thE~ pro ~e program all those properties o~itside ar ~s them to the Philadelphia Ho4siné De~ ~1 ing Development Corp. would the~i elm s or sell it to the Philadelphia I~ousjug ~ u action. ~ This net gain in the total number of :~o : [ ~ will provide new quarters for ~a crowded conditions. AnnA, PrnLADEL~IA Ib~, MARO~T 166 un AREA elphia. is bounded on the north by River pierhead line, on the ~ south IT ~ Broad Street. According to the t dwelling units. Sixty-t~re~ per- d Sound with all facilities. The ed in the 1~5O census of 205,137, extensive~ urban renewal activity three-story row houses form the he two-story structures exist on urban renewal areas. The large, Lltifamily use, front on `the major et, Eighth Street, Girard Avenue, and Temple University, there are th Central East. ~tse, many commercial establish. Rênsingt~~ Avenue, Gerfrtantown gh Avenue Girard Avenuue, Broad ond Street. In addition `smaller esidehtjal blocks. Most of these thity but those `located on Broad aflkford Avenue `seek ` a broader S are rare in this hrea. ` ` th~ ~ greatest ~moiint o~ land in l~ Park jznk~a new , restaurant. 11 ldiigth oi~, the Delaware River. `ith residential and commercial e from Berks street to Spring acturing plants line both sides esser size Occur along Aramingo Railroad. In addition to these Lttered through the area in no `1, St. Christopher's, st. Luke's, ~ Salvation Army are the major expanding the present campus ft. Ci~rlstopher's and Episcopal n. In addition to these insti- red througho~~ North Central a'n'unlty. All the playgroun~5 do not provide adequate space equa~~ for the area. AL EAST `icenses and Inspections iden- te in this area. Many of the dnce an immediate positive in a net increase in both the is proposed that the city of fled in the derelict Property d for other uses and transfer L'p. The Philadelphia Hous- itate or rebuild the property h would undertake the"Mme will be used in several ways. itly living in adjacent Over- IS Ila t 8,~ or t ln( ~rn ~tr tti~ c~n~ eb 0' d en Ilt~ in, ~op Ui is `5, Ct! att Co DI 1~f c~;l l~ti 4t ~i~il ` ` ` ` ` ~ ` ~ ~ PAGENO="0364" 050 DEMONSTRATION CAND~~DEVELOPMEN~ 2. Families being displaced to provide s1te~ foI' needed Community facilities or to eliminate unfit dwelling units would ha~e1/~i residence waiting in the same neighborhood. i Thus while the number of standard dwellh~g,ünits would Increase, there would be a decrease in the density of population in tl~earea. In addition the housing plan indicates ne4~Gnstructjon ~n those areas of most severe deterioration and mixed uses. Th~rebuilding is concentrated in the areas defined by 8th Street, 5th Street, jR~rks Street, and Thompson Street and by' Glrard Avenue, 10th Street, Sp~ Garden Street, and 13th Street' Many of th~ blocks while deteriorated ty~ hot so severe that they are beyond recovery. `l~hese blocks are designated 1I~ l14tensive rehabj1j~t~0~ These programs taken together will ~t ~he housing needs of North Central East. Limiting new construction to ~ ~0 30 dwelling units per gross acre relieving overcrowding, eliminating un0~fld structures, and Providing space for community facilities will cause a fur~1eTP0PUIation decline of 10 Percent from the 1960 levels. &3h0018 -- The school plan is designed tq 2neett ba~klGg of space needs, to eliminate obsolete structures, and to proy1d~ mc*fl~ facilities for improved educationai facilities. ~ `~ .4 Four new elementary sehoøls are pl5~e jor this area. Three are to replace obsolete structures and oue is to proie f~r Shifts in school age Population Three newt junior high schools are 4n1~$ed ~o relieve overcrowding. One new senior higl~ school will replace an obso° ftC!lity. These flew facilities are corn- bined w1~ever possible with recre~na ~ ~treas. ~ Ti~ 3oint use of the land allows th~ play area to be used for ~rVlS~d activity during the sch~l hours and for community play after sch~aflu ~turing the summer. In addition,~axpansion is ~ropose~ "ue play yards of many of the existing schools to* provide adequate-space tciIi~uOor activity. Recreation ~ Seven new playgrounds and si~PandE~ ones are proposed to nieet the recreatioi~al needs of the residents~Orth~frentra1 J~3ast These are combined with educational facilities for 1o~PJ~ wh~ever possible They vary in size from 4 to 12 acres. These playg~5 W1~ be designed to provide a visual as well as a recreational anienla Lue peIghborho~j Both Planting and structures will be used to enhancE appea~n~~ of Surrounding streets coGnAnwrcka fadtitie8 ~ In addition to existing comme Concentrations such as thQse on Marsliail Street and Front Street, eight ~e1htie~ are proposed. Two o~ these one at Girard Avenue and Broad Sty' e oth r at Germantown Avenue and Dia- mond Street will contain a ma, ~ store, a major dry goods store, and 10 to 15 small independent facili `~ exi~ting commercial concentration is proposed to be strengthened at ~t?Wfl ~tnd Lehigh Avenues The remain. ing centers are located whenP4~8S1ble Inear existing comxfler~a1 concen- trations and each contaths #"marke~, several small stores, and corn- inanity services. Inatitutiona~i 1 Three major areas of insti1~ expan~on are proposed for North Central East. The largest of these i ~mple ~ niversity. Constructioii of an cx- panded campus is already un~, . ~ enlarged facility for the Salvation Army is proposed for Broad Stre~ ~.airmOUut Avenue ; and expansion for 5~ Mary's Hospital is shown at ~ reet aqd Frankford Avenue. . BVMMARY~ The concentrations of cj~~ . 1'acilitles, SChoolS, ~ playgro~~~5 pro- vides a series of focuses ~bIn~~t1 East. The introdu~jon of these necessary community faclid l~ Wi ii the elimination of the most o1- vious deterioration throuL~ C 1C P1~operty program Will enhance the total environment of the many ~f the Immediate needs of the rest- dents, and encourage a p ~ nse f om Private sources of investment PAGENO="0365" 60-878 0 - 66 - pt. 2 (Face p. 950) No. 1 PAGENO="0366" PAGENO="0367" PAGENO="0368" PAGENO="0369" DEMONSTRATIO~ CITIE Mr. TATE. I am including a s pertaining to mass transpor~ati deiphia has pioneered in this w~ stration city with Federal part transportation. I hope that y tention to my concerii that the $95 million for fiscal year 1968 committee should approve. Ladies and gentlemen, I will tions or comment further on a forth before you today. I do appreciate the courtesies organizations, the National Le Mayors. Mr. BARRETP. Thank yoU, M informative statement. I l~ave I am certainly appreciat~ve çf y~ tinguished Philadelphi~n ep'mii, Director of Civil Defens~, ~r. H It is nice tohave you ~nd I ax the mayor's program~~ Mr. Harvey ? Mr. HARVEY. Mr. Tat~, I ~vôul I am sorry I was not h4~re ~he however. I notice in your closix~g i~ema the administration's pro~osa1 f portatiOn bill should be conside One of our colleagues, qon~ress years ago, which would ~nc~ease take it you would be in fa~or of t Mr. TA~re. I think it i~ hjghl; becoming alive to the nee~Is of ma Mr. HARVEY. You do ~xot ~risu ayear?~ ~ I Mr. TAPE. I thi~ik thi~ is~ a lo considerable urgency,.as ~oti~ally to a great extent antici~ated in example, it was necessary foi~ us t for what is known as th~ RØadi] which is one of our major `ines would have lost the enti~e conu our commuter program to whi This, to a great extent, ~nvo1ves but I think we have got to face up Mr. HARVEY. Do you t tin~ th on its own in a separate hi 1? Mr. TAnG. I think it ertaini I do not know the views of the I do say if there is anyth ng that moving in and out of ci ies wit are facing ~ today, to m~ ke mas ~D UR~~ DEVELOPME~ 951 . ~ I i~eferenceto title III of that bill LS you trndoubtedly know, Phila rogram. : It is currently a demon~ ion i~the hnprov~ment of mass ~iii~t±ee will give particular at- ci aj~t~öpriatiôn for that title of besta b~r~ minimum which this ~ppy to~Wet any of your ques- the døcumeuts and material set ded to me ~s well as the two gr~at of Cities aiid the Conference of yor, for that excellent and very estions for yOU this morning but ri~iing audi do Observe a very dis- who will add much and he is the Salkind. . you are dc~*n here in support of like th *~l~othe you. bega~xtyour statement. I read it, xat you suggested, I think, that ear extension of the mass trans- S a bare minimum, you thought. ~tidna11, in~troduced a bill.a~few uthorization to $175 million. I thorization ~ ortant, sir. I think we are just nsportation. his as something to be solved in ng~ program, . although th~re is nstrated by some crises that we, ~delphia.. :En the l~st' year, for ertake a demonstration program ilroad in the Philadelphia area if it had not been for that, we structure or a good segment of I had ~tlready been committed. subsidy at the operating level f sufficient importance to stand its ~ that kind of consideration. members of the cormnittee but zpedits this and get the people ~ia~ving the congested roads we ~sportation more attractive to p~ L~ te~ tie M q ~ oh ax~ ~14 r e a 1 st 1~1 ie a m: tr ZE~ I g a h S t S ~th i~~r it~ IS 4 C PAGENO="0370" 952 DEMONSTRATION CITIES AND U~BAN DEVELOPMENT the people who use the commuter, cars ijn and out of the busy cities and also within the cities, face the prob~e~n of mass transporta~ ion- this would be~very helpful. * ~ Mr. IIARVF~Y. On another~subject, Major Tate, the Federal c ordi- nator-do you think it would be helpfu1~ to. have this Federal c ordi- nator, say, several of them, nominated byi the local community a d the Secretary pick one of them that the ~ocal community nomil ates ~ What I am getting at, do you think his qualifications are-his uali- fications of local areas, are important, o~ affairs of Federal affa rs Mr. TATE. I do think that while it ma~ be desirable to have th local community suggest 3 or 4 or 5 or even ~O names, and then ha e the Federal Gov~rnment seleot the final one-~--- Mr. HAi~n~fr. You think tht~t would be helpful? Mr. TATL ~ While it may be desirabhj, r do believe that fin lly it should be th~ responsibility of the peoj~le who pay the bill to select the Federal ctordinator. ~ Mr. HARVEY. Let me ask you this. , ik you think that the d mon- stration program for the cities should b~ confined to the major iities? We have had a lot of mayors come befbre the subcommittee h re in the last several weeks. Some of them fbel it is being spread to ~ thin over too many cities. Others feel that it would not be spread ~ ough. Mr. TAi~. ` I say, Congressman, with p rdonable pride, I think Phil- adelphia sh~u1d be considered as one ~ f the possible demonst ation cities. But ~aotually I agree with the Secretary, Dr. Weavei , who has said we ~annot sell this.~by applyin it to specific big citie or to specific smaller cities, or cities which ir ~y be medium sized-t at we have got to take a cross section of Amer ca and we are willing t take our chances that Philadelphia will be ~elected as one of the ~ emon- stration cities because we dG feel that ~ve have a pretty good ystem for determining our city's future. Mr. HARVEY. Let me ask you this : DO you think a limitation hould be written into the bill which would limit the amount that would go to any oiie city or any ofle* State, fo ~ `example? Mr. TATE~ I think that should be th ` work of the committe here, sir. Frankly, we have e~perienoed th ~ allocations approach efore, and I wouldn't want to suggest, on the basis. of experience, th t such ].imitations ~houldbe placed in the bill. ` Mr. HARVEY. How much would Phii~d~l~hia need, for exan ple, as a denionstration city ? Mr. TA~. Many millions, but I wouldn't want to name a ~ pecific amount. I said in my testimony that Pur needs are so great t ~at we could almost use the $`2.3 billion. This would, of course, be imp ssible, but we would like to have a reasonable percentage of it as a goo start, and that couldn't be done with only $10 4r $15 million. My staff men suggest it should be in ~xcess of $400 million. Mr. HARV~EY. In excess Gf $400 millio~i? Mr~ TA~r1~. Yes, sir. So that would 4ertainly support a $2.3 billion allocation. . ~ Mr. BARREPT. Mr. Mayor, I wonder it~ou would identify yo ir staff representative ? ~ Mr. TAPE. This is Mr. Ivan Gluckn~an and Mr. John O'SI ea, our development coordinator. Mr. Gluckihan is Mr. O'Shea's as istant. PAGENO="0371" DEMONSTRATION CITIE~ Mr. HARVEY. Would ~ou car the State of Peniisylvar~ia itsel Would you have any ic~a? Mr. TATE. We have no idea. needs of the whole State of Pen request by the State of Pennsyl Mr. HARVEY. I was thinking i Mr. TA'ri. I understand. Wi Pennsylvania and I would say b~ in the major urban centers 1 perhaps one or two of the third Mr. HARVEY. In your judgme or `is it too low, too high, or wh: Mr. TATE. Having had expe will accept anything we get, bu Mr. HARVEY. Mayor Tate, ho :I:s' ~o cities too small? Mr. TATE. It seems to be all ri Mr. HARVEY. That is all I ha~ Mr. BARRETT. Thank you, Mr Mrs. Sullivan? Mrs. SULLIVAN. Thank you, ~ Mr. Mayor, you and your city imagination in the program th~ think we all recognize the sen are in. These needs are clear and obvi is another problem. Iii item 1 on page 2, you men veloprnent corpora)t~on, a i~onp separate corporation, ju~t 1~eepi city-directed nonprofit a~gency? Mr. TA~. This is an action We have an unpaid expert boa its poverty program. We are executive director a ma~ who field being formerly employed is going to and ready is~ doing The corporation is clôsel~r aT Phi1adelphia~ Housing 4ssociati on the problem of aid tb the p 25'or3O years ago. It ~ias cont has encouraged the interest an~ community which provi~1es real Mrs. SULLIVAN. 1Vher~ these h they be sold ? Just anyo~ie? Mr. TATE. They would be sol with priority given to th~ pqor a Mrs. SULLIVAN. Whattwotild Mr. TA'ri~. Mr. O'Shea who that it i~ hoped that the sales p Mrs. ~ULLIVAN'. What wotild URBAN DEVELOPMENT 953 ake an estimate as to how much id need, including other cities? tave not made an estimate of the ania and I am not aware of any ~ under this particular program. geographic area. ~ more than 11 million people in li thrust of this program would hiladelphia and Pittsburgh and cities. the $~.3 billion a workable figure ild beyour estimate?' with this kind of problem, we )Uld say it is a low figure. S the 70-city number strike you? have no further questions. iairman. really shown a lot of vision and cited to us for Philadelphia. I .ight that most of our big cities I every area. How we solve them d the city-sponsored housing de- agency. Would this work as a .e city officials informed, or as a In fact it. is already in action. ~ a small staff paid for through underway and have selected as ad particular experience in this ~ city government. I believe he mendable job. ith citizen elements such as the Lich began to focus our attention pecially for better shelter, some its interest in this problem and icipation of that element of the 5. are rehabilitated to whom would ow- and middle-income families, dy. price range ? te competent in this advises me ill be between $8,000 and $9,000. ortgage rate of interest be? t U c~Q I h c t :~ y1~ `U is do :i 7ey. U To ~1 I ~T1I fit it~ at S. ti 01 w ,e ae a~ nc se~ d D Dl ( 0 he U PAGENO="0372" 954 D~EMONSTRATION CIPIES AND U~BAN ~VJ~LOPMENT Mr. TATE. I?HA rate is ~½* 1 was ho~ing we cculd get it for cent but this'se~ms impossible at present. ~ , Mrs. SULLIVAN. The reason I asked this i~ because I r~cefit1y: duced a bill, H.R 13063, to make some 3 ~percent money availabi Mr. TAm. That would be excellent. Mrs. SULLIVAN (continuing) . To :boiia fide nonprofit org~ tions which wbuld rehabilitateneighborh~ods a~ well as houses. ] area, this is done separate from the eity ladministration, but wit city fathers khowing what is going on aii~l working with the non organization t~t least on the planning. I~ is my hope that we ca such a provision into any broad new hdu~ing. bill. This would e the very lowlincorne people to buy ho~ing they could afford- they could never buy otherwise at th~ going rate of interestS course; it would have to be limited to families within certain in that would now be eligible for the rent supplement program and ~ housing. This would also work in cases where the poor family re that point in public housing where theit income is just a little the limitation and they have to leave to s*other housing. Mr. TA~PI~. It would get a lot of hou~esIback oii the ptivate hoi market. Mrs. SULLIVAN. And it would help th~ to these people a stake in the upkeep a~ they will eventually own. Mr. TAn~. This is exactly the reason ~*e have set up this flOfl] hrnising corporation. Tt will start to provide decent shelter approprjate figure, a reasonable figure for many poor people unable to afford it. At $8,000 or $9,000, it is within reach pf many people in Phil phia. These reople can hold their neigl~borhoods together and is the importan.t thing. We don't want ~o provide all of the m single-family ~ homes through our publici housing program resu in rows and rows of public housing unit~, but rather mix publi private efforts throughout the neighborhoods. I spent some time in a iiumber of areas yesterday and sorne~ like this just lifts them dramatically. If we had something lik propose, it would certainly help many peo~1e. As a matter of fac wife told me the other day about a very fine old couple who have] ably seen the best of their years but * who have been able to get a lease on life I*cause they have been able totget a 3-percent loan. 1? they greatly appreciate the help, they als4 get the feeling that the not stealing the money. ~ They are doing something toward it~ ~As a matter of fact, the: in Congressman Barrett's district. Mrs. SULLIVAN. This would cost the G~o$ernment very little. Mr. TA~ri~. I agree completely. Butwhat are we to do in the mean- time. That is why we have established this nonprofit organization. Mrs. SULLIVAN. The group in St. Louis, which started this reh~ ~bili- tation program, started on a very, very modest scale. They have already rehabilitated and sold and installed families in 41 of ~ ;hese houses. Of eourse the mortgage rates t~iey can get now have lo be at the regular going rate, I think, 6 perce~it. The financing was clone through savings and loans associations but the funds avaiThbLe to per- ntro- niza- n my Ii the rofit ii get r~able -that Of omes ~iblic iches over ising coi~nunity, too, by g id huprovement of ho Lying ising profit ~t an uow ~del- that eded Iting and hug ~ you :, my )rob- new Ihile ~7 are ~r arc PAGENO="0373" DEMONStTRATIO C]~TIES them are limited in any one n having difficulty in constantly ge to try to do this financing. I t to be carefully administered so ti to the groups for whom it was jut On page 3, Mr. Mayor, you tal] of your city and you say it calls the next 3 years. Is this financ& Mr. TAIT. It includes match gram, in the 1965 Housing Act. underway for it but haven't rece Mrs. SuLLIVAN. If the code wa real estate people from selling p people who do not understand ~v to think they can rent out space code actually prohibits multiple Mr. TATE. It definitely stops deal of fear by many people in ment would drive people out. found that strict code enforcem their homes up to standard, but the neighborhood picks up. A maintenance and overcrowding catching up to what we call the them are now going to jail becau ing code. Unfortunately, some their property rather than mak ments. They abdicated he mar ing these poor people, ii what Mrs. StTLLIVAN. Is th re som estate boards to take actio i again Mr. TATE. I think yo have your city government. ~ `he real you have to give them th leader Mrs. SULLIVAN. Code nforce~ tant aspects of raising ho sing st~ Mr. TATE. It is very im )ortant Mrs. SULLIVAN. Thank you ver Thank you very much, Mayor of help and leadership, p rticula Mr. BARRETT. Mr. Mayor, on member. I understand y~sterday, when blighted areas, you ran into a hal ity as a hitter. Mr. TATE. Well, ~Congressmnan neither am I going to Plead the bore you with the story, but it so some extracurricular religious v and was shown a house which h~ students at Temple University a 6O-8~8-66-pt. 2-24 URBAN DEVELOPMENT 955 ~rhood arid the organization is new money from private sources the plan in my bill would have ~ 8-perc~ertt moneywould go only Ltthe code ~nfqrcemeritprOgram i~ e~ienditure of $7.~ million in Le city of Philadelphia ~ . T~*1~y, under the Federal pro )`Sbea' said. we have applications, h&n~ney yet. ly e~órc~d, it would stop shad~ y under misleading coiné-ons to ley are buyin~, and who are led p bafty the mortgage, when the ~ricy. ~plôitation. : There was a great le~Ip~hia that strict code enforce- ~ not b~ën the case. We have orc~s owher~occupants to bring gives them hope. As a result, same time, because of deferre4 e war years, we are just about landlords. A great number of y did not comply with the hous- m have vacated and `abandoned required ~ rep~i'rs and improve- l3ut they' a1& ~o~l~g~er e~pioit- I the 10-percent money market. outside of the action of real, type reai estate. ~e good code administration hi e board `will work,~ with you but. S really one of the most impor- Is. h, Mr. Chairman. ` Philadelphia is giving us lots the siiboommittec, I might add. tion before I turn to the next were making .a survey of these ~ and th~, challenged your abil- &t want' to say that's true, but amendment. ` I don't want to ens that I haite been `engaged in n the North Philadelphia area~ n acquired by a church for the hile there ~` I, was approached by NJ l~ th de ho a `S )~j1 r r. a is t~ he t 1fl t~ tli c~ ~ h~ p. it ar I 1: to ii tt~ DU a d ft. `p l~ be ` `] PAGENO="0374" 956 DEMONSTRATION CITIES AND TJ~EtBAN DEVELOPMENT the pastor of the church who took me frito his church and show d me what they were doing by way of rehahijititiom This man, thi~ pas- tor, is a monsignor in the Catholic Chñr~1h. ~ He left a xery imp~rtant post. in~ the eharities to lead this eongr.~gatión which is near1~ coin-. pletely non~hit~ and is now lifting th$ whole area. up with hi~ own hands and with money which he begs .fr4m the total coxmnunity~ . While shOMng me the ins~x1e of the o~iurch, he. said, "Let's l4ok on the outside.". Outside we found some cljildren playing what is l$nown as stick ball, which I don't understand, t~xcept that I've seen th~ kids playing it. They use a large .broomsti4 as a bat and they pla~ with half of a rubber ball because they can't ~fford a whole rubber b 11. I asked for the stick and said to one of 1~he boys, "Toss one up. ` He tossed one up from the pitcher's position and to my amaze ent I picked it off and hit it over the fence. ~ didn't expect to hit it `n the the first pla43e, especially when you ar4 wearing bifocals-bu they invited me tè try again and I guess we 14th thought I wouldn't hit it. Well, we tried again and I hit it again. I I am not eying I am ~ grewt home r4n bitter-I was raised n the era of Babe Ruth and some of the great theme run hittors of erica, but I'd like to hit a home rim in that parlicular area, by providi g not only good housing but good recreation ~facilities, so these kids won't have to play stick `bail in the middle of. i~ street which is no mor than 15 feet wide. and which has a lot of vacalt houses on it. Incide tally, the street is named Watts Street-the same as the unfortunate a ea of Los Angeles fwhich has come to represen$ so many of the proble s we are facing h4 our older areas. ~ . And wherj these kids kne* that. therej was interest by their ayor, in this gam~ of stick ball, they said, ;"T~ we only had a play ouncl where we co4ld play this out in the open frithout the restrictions. of the street with the vacant houses, everybodj~ would be happy." B t the big concern was, one kid said, "I hope *e get this before I get ut of the eighth grade." I don't want to discuss the bureaucrivtic problems of gover ment but it does take so long for people wh4 want so much someti es. . Mr. BARREn. This would ~ indicate 4hat you still maintai your skill. ~ ~ . . Mr. Iteuss? . ~ . . Mr. TAn. Just lucky, sir. . Mr. REuss Thank you, Mt Ohairm As a prelude to this hearing; I took S~y family to Philadelph a yes- terclay afternoon and I can see why our~ chairman and the inaypr are so ~ proud of the great strides that Philadelphia has made in ecent years. We took a look at not only the hi~toric. area, but at Societ Hill, and it is. really an inspiring setting and rt has helped me to unde stand your testimony a little better this morning. . You ma1t~ a very convincing case tj~at the Federal GoVer ment should. help those who are willing to l$p themselves, and ce ~ ainly Philadelphi4 has done a remarkable job i~ that. I have ~ question about a matter tb$ was not covered `dire tly in your testimcfr~y and that concerns the r4~arch aspect of mass t ansit4 Congressman Moorhead, Oongressman ~Ashley of Ohio and yself PAGENO="0375" DEMONSTRATION CITIES have before the subcommittee the Secretary of Housii~g ~i~d T year, to come back to qongress :ment and demonstratio~i ~rog identify and make poss~b1e wh and to review that program witi our great universities. I would appreciate your corn ~ `be a useful program. Mr. TATE. Congressin~ui, ~`an ested in thatparticul~r p~iasê ofi ~ ~ You know, it takes a lot of ~ propose these programs ~vhich s ~ sky. On the other hand~ so~ne f tries in this country like the rail o this particular industry,~ in ~fact ~ not realize it until som~ 1~ ye; i~ America got together to ~1ô som l~ But the industry is ch$ngjng s what we have ~O years fi~om ~iow There will be rernark~,ble con r So I feel that research would e just a question of going 150 mil s bed. I think we have ~t t t~1 ~ deiphia which already l~as a ne' be enormously costly to i~eplace. I Oakland, I understand i~ will rqq million. To provide the same kind of f~c~ tan area would cost a similar su~i have the advantages we I~av~ tod~: liners which have br9ug~it new ~ system from the suburbs ii~to I~1 our stores, into our shop~, and t~ t go out at night with th~ co~ñfo: t ride in dusty old cars. ~ think think research would be i~ery hel modern mass transportatior~. Mr. HARVEY. Mr. Chafrmaai, : I One apprehension tha has be Tate, is the fact that if the deT t~ enacted, it would gthble up as r ti renewal funds and, of ~ oui~se, i~ would be fine, but if you ~ re one o tion city, there would be real c progress. I wondered if you cared to coii ~ Mr. TA~n~. I believe t1~at whil must continue the preser~t r~te o by the Federal Government by not afford to have one p~ograin o ~N URBAN DEVELOPMENT 957 ciendment which would require 1 Development, within the next a 5..year research and develop- n urban transport designed to ~W systems for urban transport, e and city governments and with nt ~ whether you think that would ~hted to know that you are inter- life. ~e to move out in front and to eople might. refer to as `~ pie in the Ley are subsidizing major indus- and the `transit companies. But een sick for many years and did *0 when some of the mayors in ` about it. kly that what we have today and be entirely different. in the mxh~s of transportation. 7 useful. But it . is more than hour on a well-constructed road- ) consideration cities like Phila- : of rights-of-way which would ~e bay area of San Francisco and a bond issue of more than $900 es in the Philadelphia m~tropoii- money. And yet we would not ~Te have what are known as silver e flocking to ride the commuter leiphia. They are coming into I jobs, and it~ is easier for them to mowing that they don't have to S just scratching the surface. I n developing other techniques of. one question. pressed by other mayors, Mayor ation cities program were to be ~s' 80 to 100 percent of the urban I are a demonstration city, this ~ities not selected as a demonstra- ~m whether it will impede the ei~ onthat~ hi concern has been sugge~sted, we ~p&~ iding that is now allocated to us y f urban dev~lopment. We can- er~te to the detriment of the other. I a iti ii ta eli Lr~ r S ~1 a ui ill st ye an ith or tit Lir liti o~ o~ of is ul av is~; th yo he nc PAGENO="0376" 958 DEM~NSTRATION CITIES AND 1 ~BAN DEVELOPMENT I think w1~a~t~ we do witi~ respect to ~ monstration eities prc must be a,d~2i~iona1 to what we are doing ~r way of urban develo Mr. thi~*r. Thaaik you, Mr. Tate~ I have no ~nrther questions, Mr. Chai nan. Mr. BAmu~m Mr. Mayor, all time ha~ expired and I am very nil for your coming here and for your statement which wa splendid, Mr. TAn~. Thank you, Mr. Chairman.~ I do want to thank the bers of the c~mrnittee, not only for court~ously listening to my ~ tation but ~dr giving me the advantage jof their very searching tions which s~iow not only an a~wareness c4t this problem but their to be helpfuiland I do appreciate them Mr. f3AR*r. Thank you, sir. . . The Chair~ has an announcement to m ke. There has been a c in the sched~tle of the hearings. Mr. Collins, &f Boston, will not be hea4d today. The subcommittee stands in recess un1~il ~p.m. this afternoon our first witness will be our great and dthtinguished former coil former chairman of the subcommittee, ~Ubert Rains, of Alaba (WhereupQn, at 11 :20 a.m., the sub ommittee recessed to veneat 2p.ñ~*. the same day.) Present : 1~epresentiatives Barrett (pre Widnall, Mrs. Dwyer and Harvey. Mr. BAmm~rr. The committee will com~e to order, please. Our first witness this afternoon is our~ old friend and disting fotmer coi1e~ague, Albert R~tins, of G~dsd&i, Ala. The RepresentatFves and the Senate, as well, are ifiled with outst; Representatives of our people, but we 11 know that among ti Members c~f fthe House and Senate tha a, relative few stand giants ani~ legislators. Al Rains was nd is one of those men. very s~1:~D~ittee which me&~ts here tod y is his creation. He ii legislativer~oi~d in the housing field tha wilT probably never ag matched i:~i the Coiigress he combine a superior intelligenc a~ma~ter~&f~he legislative process, with. a superior knowledgei, ters concerning economics and finance, ~nd above all, with añ~ standing of our country's needs and th~ legislative tools necess meet those needs. We all miss his presence on this com constantly tr~ying to learn from his outs ment. Al, j~1ease come forward and le to you. I would li~ke to point out to the sul ommittee that Mr. R appearing here today as Chairman o: the Oommittee on Ft Preservation and while all of us will be ;empted to ask him qu about the general field of housing legis ation he i~iil address marks toda~r solely on H.R. 13790, a hi introduced by our est colleague, William Widnall, which deals with the preservatio maintenance of historic buildings, and so~I would ask the subcoir members to eonfine their questioning to fthis single subject. (H.R. 137øt:~ follows :) iding) , Mrs~ Sullivan, ~rams nient. crate- very mem- `esen- ques- desire iange when ague, ia. ~econ- AFTERNOON SE~ ION ~euss, ished s~. of iding te 535 )ut ~1S This iade a Lin be with mat- nder- ~ry to itte~ very deeply and ~nding record of accon us all extend our gre re are push- ~tings ins is stone stions is re- emed 1 and iiittee PAGENO="0377" I (H.]~. 1~79O, ~ BILJA, TO p~oviJe ftnancial a~u~ Qther Federal programs, tQ encowage and hiatoric structures Be it enacted by the t~enate and States of Ameriea~ in: Ooivf,ir6~9~9 a~8~n~b TITLE I-PR]~SBRVATIO~ OF } URI3~ ~IU~I~ SI!~o. 101. (a) Section ~iO(b) of th ing out "and" lrnmediateli ~ef~re " ( the end thereof the *fo11oWix~g': `~, and tion by the local public aget~cy c~1~ str *of historic or architectural ~aIu~ anc tures to public bodies, pri~te $~gan vate and maintahi such stri~ctntes tO (b) The first sentence of secl~1on 1 after "rehabilitation or cox~ser~atto~ ~of historic structures)". ~ ACQtISI'X~EON AND R5~AnXLI1~TIO~ o1~ DF~MON Sue. 1O2~ Section 110(e) (8~ ~t th (1) by striking out "of s~ruct area and which, under t~ie ~rban tated for dwelling use or related tollowing : "of structur~s, locate the urban renewal pian~ are to I or related facilities, or ~hlch ar of historic or arebItecti~ral value and maintained for h1sl~oric,purj (2) by striking out `9for Such the purpose of repair oi~ rehabili Rnx~oc~&TIO~ ANI~ Pn~sEW~ Sa~c. 103. SectIon 110(c) 9) of th as follows : "(9) reloeatlng with i~ o~ out local public agency det rmtnes which is owned by or wi1~ be nlzation, or other pers n *hlch for historic purpOses." LOCAL GRANT-IN-AID O~EDI~ rc~u PU ~ Src. 104. Section liQ(d) ~lf the I ing ImmedIately before the la~t sex grant-In-aid' also inoludes ¶be ~øst any Structure located in. t1~e urban ageney~to be of h~storlc or ~rebiteet a nonprofit basis for histork~ pu~pose GRANTS TO N~~IO~tL TRUST ron UI Sac. 105. SectIon 115 of the 1~Tousl end thereof the following n4w subsec " (c) The Secretary Is authorized Historic Preservation trozh funds. subsection (a) , on such teri~is and co $90,000 with respect to a$~ one sti 959 Dng., 2d sess.] ~1~r the. Hou~ing Act of 1949 ~uzd related in the preservntiQn and maintenance of e of Repre8entativea of the UnAted RIO STRUCTURES AS ?ARP OF ~1 PflOfl3~~f2S ~! slngAOt of 1949 Is arfteuded by strik~ ud by inserting before the period at iay include provision for the acquisi- S which such agency determines to be ale or other dtsposltlofl of such struc~ 5, or other persons which will reno- Drie purpoS~S". of such ~&ët iS amended by inserting following t " (~iti~?lud1ng preservation ~c STaUOT~1~aS tyNDE1~ UJ~.BAN RuNEWAL ON PROGRAM sing Act of 1949 `is arnend~-~- hich are located In the urban renewal al pian~ are to be repaired or rehabili- ties" and inserting in lieu thereof the Le urban renewal area, which (under ired or rehabiitatedfor dwelling use mined by the l~cai public `agency to be under such plan) are to be renovated ; and' ` es" and insetting hi lieu thereof "tor for dwelling use or related facilities". OF HI&tOIUO ` sing Act of 1949 `is amended to read ie project area a structure whii he d historic or architectural v d of to a public body, priv~ enovate and mamtaan such E AND EuHAIilLIPATION OP HIS RES g Act of 1949 is , amended by insert- the following new sentence : " `Local uirlng and rehabilitating or restoring al area which is determined by such alue and which wiUbe mainta4nedon PRE$ERVATIØN TO C~VER RE8TORA~IO~ t of, 1949 is aipended by adding at the ake grants to the National Trust: for ble for rehabilitation grants under LS and in such amounts (not exceeding t) as he deems appropriate, to cover DEMONSTRATION CITIES N~ URBAN DEVELOPMENT 9 S I hC `U 1st Io~ ~ (e) t~ I I, f d a V ~I~O ci n id es" rpo Lou iOt `e~ t be 11 0 r V 1 t FIA c~J~ ad DS~ al~ ftiQ t1i~ I ~ ~ ~ PAGENO="0378" 960 DEM6NSTRATION CITIES AND t RBAN DEVELOPMENT the costs incurred by such Trust in renovating or restoring structures whick it considers to be of historic Or archltectura1~ value which it has accept `U and which it will maintain (after such renov*tlon or restoratioii) for ] Istoric purposes." URBAN PLANNING GRANTS ~OR SURVEYS ~ OF' IUSTORICAL STEUCTTJRE~ Sno. 106. Section 701 of the housing Act ~f 1954 is amended by ad~ ing at. the end thereo~ the following new subsection : "(h) In ad~tion to the other grants auth4zed by this section, the Se retary is authorized l~i make grants to assist any eit~ or other municipality In ~ aking a survey of the structures in such city or u4inicipality which are dete mined by its appropi~tate authorities to be of hist4rlc or architectural value Any such survey ~al1 be designed to identify the historic structures in the ity or municipality ii~volved, determine the cost of *elr rehabilitation or resto ation,. and provide such other information as may ~ be ~ necemary or appropriate t serve as a foundation for a balanced and effective program of historic prese: ration in such city or municipality. A grant under this subsection shall not evceed two-thirds of tjie cost of the survey for whieh~ it is made, and shall be n ade to the appropriate agency or entity specified in paragraphs (1) through (9) of subsection (a): or, if there is no such agenc~ or entity which is qualifi d and willing to rec$ve the grant and provide for tS utilization in accordanc with this subsectloi~ directly to the city or municipal ty involved." LOA1~t5 i'ân ACQUISITION AND .EFHABflITAI ON OFHIS'I~ORTC STRUCTtTRES SEC. 107. (a) Section 312(a) of the Housiug~4ct of 1964 is amended by `usert- ing " (1) " after "(a) ", by striking out the secolid sentence, and by adding at the end thereof*the following new paragraphs: . " (2) To assist In the preservation of historik~ structures both. within a d out- side of urban renewal areas, the Secretary is alao authorized under this sec ion to make loans to ~the owners or tenants of struc ires which are determined in ac- cordance with ~regulations preserfled by him o be of historic or archit ctural value to financfrthe rehabilitation-or restorati a of such structures, and t make loans to other ~ersons to finance the a~quisitio and rehabilitation or rest ration by them of stri~ctures which are determined in accordance with such regu ations to be of histo~jior architectural value. "(3) No 1oai~t shall be made under this secti a unless the Secretary fin s (A) that the applk~ant is unable to secure the ne essary funds from other sources upon comparable terms and conditions, and ( ) the loan. is an acceptabi risk, taking into cobsideration the security availabi ~ for the loan, the ability of the applicant to repay the loan; and the * need for the rehabilitation or rest4 ration invoived. . " (4) Nothing * in this section shall prevent. a person from receiving loan under this section with respect to property in ~onnection with which he r ceives a gi~ant under section 115 of the I~ousing Act 4xf 1q49, if and to the extei t that such personis otherwise eligible to receive si4~h loan under this section.' (b) (1) The beading of section 1112 of snch A~t is amended to read as fo lows: "LdANS FOR RETIAEILIPATION OR HI~TOE!O PREslmvApIoN" 2. Section 31i2(1) (1) of such Act is amen4d by striking out "or the urban renewal plan" ~nd inserting in lieu thereof ", ~* the urban renewal plan if any,". (3) SectIon ~12(b) (3) of sueh Act is amen4~rd by striking out "rehabil tation loan" and inserting in lieu thereof "loan". ~ (4) So much of section 312(c) as precedes ~ragraph (1) thereof is ar ended by striking out "rehabilitation loan" and inserting in lieu thereof "loan" (5) Section 812(e) (4) of such Act is amended by striking out "The ~ ost of rehabilItation" in su'bparagraphs (A) and (B) and Inserting in lieu the: eof in each instance "the cost of the rehabilltation~ restoration, or acquisiti n and restoration". , I PRESERVATION 413' nisronic STIflTCPVE~S UNDFStI URaA* BEAUTIFICATION PE ORAM Sac. 108. Sedion 706 of the Eousing Act of 19~i Is amended- (1) by i~nserting before the period at t~he end of the first senten e the following : ", inoluding provision for the atquisition of stru~tures whi h are PAGENO="0379" DEMONSYI~RATION CTTIES dE~termined by the authorities ad or architectural value ~nd the tures for maintenance f~r hi~toric (2) by inserting befo~e t~e se: ing: "and for the preservation priate and feasible". FELLOWSHIPS FOR AROHITEOTS AND SEC. 109. (a) There is het~by aul $500,000 annually, for a th~ee-ftar used by the Secretary of Houshig ai providing fellowships for the gradus technicians In the field of historic for such fellowships soley oi~ th~ basi of the Historic Pres~rvatio~ F~llow~ to subsection (b). Fellowsl~ips shall nonprofit institutions of hi~her educ in the field of historic preservation oriented to trathing for careei~s in preservation aspects of url~an rene~ fields. ~ (b) There Is hereby es$blthbed vistory Board (hereinafter ~eferred nine members to be appoiu1~ed by th institutions of higher learning, thi higher education ~ho are ~be head courses appropriately relate~d to the three from national organizations w relating to histOric preserv~tiokt. `I the Secretary and shall make recom to be selected for fellowsh1j~s under be entitled to receive trans1~or~atior sistenee as authorized for i4emi~ers section 601 of the Housing ~4t of~1049 TITLE II-~STAi URBAN DEVELOPMENT :èring such programs to be of historic litation Gr, restoration of such struc- )ses"; and ri in the second sentence the follow- one structures to the extent a~pro- ~TICIANS t~ EISTORIC PRE5ERVATXO~ ?d ~ to be appropriated not ~ to exceed comthenclng on ~u1y 1, 1966, to b~ ~an Development for the purpose of Lining of , architects ~ and professional n~ratiofl. Persons sh&l1 be selected bility and upon the recommendations Ldvisory Board established pursuant ely tor training in public and private having programs of . graduate study related fields, which programs are ~ic preservation and in the historic Dunflunity development, and related istorie Preservation Fellowship Ad- the "Board") , which shall consist of etary as follows : Three from public rn private nonprofit institutions of .epartments which ~ provide academic ~ referred to in subsection ( a ) , ar~d re direelty concerned with problemñs and shall meet Upon the request of tions to him with respect to persons ection. Members of the Board shall ases and a per diem in lieu of sub- [sony committees created pursuant to NAL ADVISORY COUNOIL [`ION t least four Gov- es. Ldividuals in i the matters ~Nl :961 LaIJ hi~ ELIJ Ti $1 d te i~t 0 Ii .li~ liE e tr~ rE~ ~f S ~p [oi~ , ii sto L, ~ fr ~ b nclr Ls ~ ~pe rdv ON PAGENO="0380" 962 DEMONSTRATION CITIES AND *RBAN DEVELQPMENT such paragra~)hs shall serve for terms of fro~n one to five years, as des by the Pres1d~nt at the time of ~pointment ~in sueh manner as to insu the terms o~ lot less than one uor more thaji ttsro of them will expire one year. I (d) An~ va~ancy in the Coun~fl shall n~t ~ Its powers, but shall I in the same ibannér as the original appoinl4i~ent (and for the balance unexpired terfli). (e) The (Jo~uicil shall elect a Oliafrman akid a Vice Chairman from it~ members. (f) Eight memIiet~ of the Council shall e4sistitute a quorum. DUTIES OF THE COtYNOIL Sno. 2O~. (a~ The Council shall- (1) advise the President ~nd the Congr~ss on historic preservation as it affects the national welfare ; I (2) as,4st in the developitient of a str~ng national historic prese policy, an~ provide inapfr&th~nand leader4bip for the implementation policy; ~t (3) sup~port and aid In. the coordlnati4u of activities of Federal merits and ~ agencies relating to historic ~reservatlon, and develop guidelines, and studies for the review aha resolution of conflicts different Federal and federally aided prcIgrams affecting historic p~ tion,; ~ ~ (4) ~ enoourage~ in cooperatIon with a~ropriate private agencies, interest and participation in historic preservation; (5) make and publish studies in such~ areas as adequacy of leg and administrative statutes and regulatl4ks pertaining to historic p~ tion activiities of State and I~cal governm4xLts, and the e~ects of tax at all le$ls of governments' on histoi~1c freservation ; and (6). prepare guidelines for' the assistan~ of State and local gover in~ drafting legislation relating to historicf preservation. (b) The Coi~nclI shall submit annually a cth~iprebensi~e report of its ac and the i'esuits of Its studlesto the President i$tidto the Congross, and sh~ time to time submit such additional and spe~Li reports as it deems ad Each report shall propose such legislative ~nactnients and other act! in the judgment of the Council, are necessary and appropriate to carry `recommendations. PowERs OF THE O~UNOrL Sno. 2G3~ (a~ The Council, or, on the auth~r1zatlon of the Council, ai committee ~n~ember thereof, may, for the pu4ose of carr~ying out the pro of this Act, h~d audi hearing~ a*d sit and acf at auch times and places, later such oaths, and require, by ~ubpena or o4herwise, the attendance an mony of such witnesses and the prodncti~ñ of such books, record respondence, iñemorandunis, papers, and docufnents as the Council or an committee or member may deem advisable. ~ubpenas may be issued un signature of the Chairman of tI~e Council, ol~ snch subcommittee, or a~ designated member, and may be. served by an~ person designated by such man or member. The provisions of sections 142 to 104, inclusive, of the I Statutes of th~ United States (2 U.S.C. 192494, inclusive) shall apply case of failurs of any witness to comply wj$~h a subpen.a or to testif~ summonedunder~authority of this section. ~ (b) The Ooi~ñell Is authorized to secure dl*ectly froni any executive ment, bureau, agency, board, cothmis~ion, oflI4~e, independent establl.shiti instrumentaII~ information, suggestlhns, estl~iiates and `statistics for U pose of this A~t ; and each such department bjireau, agency, board, comxi office, establisijinent, or~ histruui~nta1Ity Lu at4thorized and directed to I such intormatibn, suggestions. estimates, and ~fatist~ies directly to the C upon request made by the Chairth~n or Vice~ Ohairman. CO&t?Ei~SAPION OF ~àMBEas Sso. 204. The rnøinbers of the Council ap~fi~d ft~ paragraphs (1) t (6) of section 201(a) shall serve without ad~itlonal compensation. Th bers of the C~Uncll a~pelnted undur paragrap~s (7), (8), (9~, and (10) .gnated re that In any e filled of the among Lusofar ~vation ~f such lepart- olicles, etween ~serva- public alative ~serva- olicies iments bivities U from 4sable. )ns as, out its L~ sub- visions admiii- I test!- ~, cor- `h sub- icr the y duly Chair- ~evised in the when Jepart- sit, or Le pur- LiSSlOfl, urnisli ouncil, irough ~ mem- of sec- PAGENO="0381" DEMONSTRATION CI~TIES t!cw 201(a) shall receive $~O0 j~er d the duties of the Council. 411 i~iem~b~ ment for necessary traveling an~1 sub performance of the duties of the Comic sT~,JrF ~ SEC. 205. The Council ~ha11 hai~e an by the President, by and wit~h the adi the pleasure of the Presldei~t, a~id w provided for level 2 of the Fed~ral Executive S~iary Act of 19~ (5 U.S~ (b) The Council shall ha$ po~crer t additional personnel as may be r4eeess to the provIsions of the civil service (c) The Council may a1s~ procure and the Classification Act o~ 1949, t same extent as is authorized for th the Administrative Expense~ Act of ceed $~0 per diem for lndivldi~ufls. (d) The members of the `~ow~cl1 s section 201(a) shall provide the corn their jurisdiction and contrOl as may duties, to the extent that such f~cWti cil and are otherwise avui1al~ie. for th propriations, the Council in~y ~btaii wise, such additional properl~y, f~icilit out its duties. MEANI~O ~ HJ Sno. 206. For purposes of this Act, the protection, rehabilitatio~i, r~stor~ areas, structures, sites, and objects b tural significance to the .U~lted Sl~ates. AUPU~lliIZ~TIO~ URBAN DEVELOPMENT 963 rhen engaged in the performance of the Counell shall receive reimburse- ce expenses inenrred `by them in. the tive Director, who shall be appointed ad cozisent of the Senate, to serve at all receive compensation at the rate bive $aiary Schedule of the Federal [1(b)). )iflt' ai~d fix the cothpnseation of such carry out its ditties, without regard and the dlasslñcation Act of 1949. out regard to the civil-service laws ary and intermittent services to the utlve departments by sectIon 15 of 1 U.S.C. 55a), but at rates ilot to ex- d In paragraphs (1) through (6) of Ui such facilities and `services under uded by the Council to carry out its services are requested by the Coun- ~ose. To the extent of available a~ )urchasO, rental4 donation, or other- d services he may be needed ~ carry I~EESi~1tVA~1ON erm, "historic preservation" includes and reconstruction of communities, historic, architectural, social or cul- 0 D'LI'r'ns ea s~1 ecu L1~ v~1~l ~ (, -4, a: ~i. s~ I~1E it ~LE~ o~i~ IF ~ rPRoPnIAnIONs t~i 5 11 `opriated such Sums as may be neces- Ue. it: p VE a ~m] l~ tdi LI~ 11 ani&1 by another distinguished iuairn~n of the b o.ard of trustees ~eservat~on in the United States. Hill. He was a distinguished the Eisenhower administration md an outstanding president of Et is a pleasure to welcome both SEC. 207. There are authoi~ize~ to b sary to carry out the' provizlon~ of Mr. BAmm~. Mr. R~s is a guntl&man~ Mr. Geardon ~ wi of the National Prust fo~ Histoi Mr. Gray is no strange~' to Ca Deputy ~ecretary of De~en~e di and Secretary of the Aa~my as i the University of North Carolir you gentlemen. I am sure that the gei~itleman of welcoming our distinguis~ied 1 here this afternoon. Mr. Widnall ~ Mr. WmNALL. Thank ~ou Mr. I want to say that A~ R~ins House he served so well with gr tion, and led the way in so man housing legislation, with a great Al, I know that you k~iew wit at least a half hour to get th through giving you the praise t Mr. Gray, we weicom~ you he that you have had in' go~er~uner interest in the things tI~at have f ~~or 1 Ne* Jersey would be desirous r chairman of this subcommittee C Ii fig. rol :tgl a~t ,, e~ rmalr. rely missed as a Member of the redit to his State and to his Na- its in the House to put through fit' to all of our people. [call in the House, I would have I before Chairman Barrett got ~ou deserve. >0, with all the great experience I in the educational fields ; your . very worthwhile, highly moti- PAGENO="0382" 964 DEMONSTRATION CITIES AND . ~JRBAN DEVELOPMENT vated and hiave helped to deliver prog4~ns oi~ such great prom great fu1fih1~m~nt. We look forward t3 your testimony. . Mr. BAR~TT. Mrs. Dwyer? I Mrs. DWYER. Mr. Chairman, I also wbuld like to welcome Mr back to the House committee and I want to say how much we you and as a Republican I want to say how very proud I was t with you. . Mr. BAimErr. Mrs. Sullivan ? .. Mrs. SULLIVAN. Thank you, Mr. Cha~irman. Mr. , Rajms, it is a genuine pleasur4 to welcome you bad though yoñ are now on the other side 4f the table. As aiway ever, ~ you are still working for better housing. I did not ~ take up yottr time, but since everyone ~ else was showering yo little flowery bouquets I could not be left out. I think you kn much we all thought of the work you did while you were ch~ of this subcommittee. We also know the work you are perfi right now as a private citizen. I am d~lighted, also, to welco: Gray. I have a . few questions to ask ~ you later. We welcoi both. ~ Mr. BARRETT. Thank you, Mrs. Sullivan. ~ I do want to tell my former eolleag4e and very distinguish mer OhairITl~Lfl of this committee that j~re have made it a cus follow the pattern that you have inaugrtr~ted on this subeommi making everybody feel at home, conte~ited, and completely r and certainly we would be remiss if we~did not extend the sam tesy to our distinguished chairman. You may, Mr. former Chairman, start your testimony any ti see fit, and when you complete it, as you would say to others, desire to ask you one or two questions. STATEMEIft OP EON. ALRE1~T BAINS,~CKAIRMAN OP THE CO TEE ON HISTORIC PBESERVATION~ ACCOMPANIED BY 0 GRAY, ~IAI1UVIAN (W ~HE BO4D op ThUSThES O~ NATIONAL TRUST POE HISTORI4~ PRESERVATION ii UNITED STATES Mr. RAINS. Mr. Chairman, I never r~ally dreamed that .1 w on this side of the table, but I must confess to you that it is a p position to occupy, and I want to say o you, to the committ there is a bit of nostalgia about going ~ ~ay from Capitol Hill is the very first time that I have beer back other than just downtown, ~nd I almost found myself I eaded toward where m used to be. 1[n 5 minutes' timeyou feel eacclimated and feel ti are back amOng you all. I am not going to clutter the record ~ y a long speech except that while I am no longer a member o~f the committee, I tak pride in the good work that you do. When most people get th gressional Record, they throw it away and don't read it. But you have spent 20 years here like I did, you can't help but re hearings of the committee and I was gre~itly pleased to see the fin that you ar~ doing. I want to congrai~rlate you and the memi the committ~e on both sides of the aisle, for what I think is a si job. I Se and Rains [1 miss serve , even , how- ant to . with w how irman ruling ~e Mr. e you d f or- om to tee by laxed, cour- ie you e may ~IMIT- RDON THE THE uld be easant ~` that This ~, visit r office at you SI to say great Con- when ~d the work ~rs of lendid PAGENO="0383" DEMONSTRATION CITIES I know you had some battles watch the committee get down t every one of you. ~ *1 said, and IL mean thi~, that I controversial xuatters si~nply b housing, but I am here to speak ~ all the years that I was chairm~ `housing legislation, and that is architectural sites in this cc~unt chairman of the commit1~ee, thei put special bits of legis1~ttion in the destruction of certai4i histor I used to grieve greatly over th ings, some of which ough~ to hay that what we needed was a great preservation than we have h~d in by patchwork, but we should hay So I was delighted wh~n my f the Joint Council on H~usi~ig, ference of Mayors, and the Nati we seek a Ford Foundation grar I am pleased to tell yo~i that ir were encouraged by Sec$tary of guished people down Pe±insylva] absolutely and completel~r a~ide `This was done by a nonp~ofit gr of the distinguished gentleman with the Senator from Ma4ne, Sen There are eight people on it. very beautiful books thai~ is aboi ter of fact, and is publi~hed by Among the people who c4~nt~ibut esteemed friend, Gordon Gray, Trust. So it was a labor of love, long journe-~ We did I time was cor fascinating a t ear and it pleased me greatly to he meat, and I want to compliment ( o~'t want tO testify concerning any 0 u~ I am here not to speak about b ii~ something that came up to me in ~: 0 `the committee, growing out of h p eservation of our historical and y ` ime after time when I was the e ~é e occasions on which we had to i e f housing-in order to prevent ~ 1 ~ tes in the cities , in , this country. a~ that we are pulling,down build- e~ preserved, but I ~ilways believe ~ d Tider national policy on historic t 0 : ast, and that we should do it not : ~ ieral overall piece of legislation. i n( , Larry henderson, who is with ~ 4 tity of the United' States Con- `n d `eague of Cities, suggested that t wi ereby we could do a real study. ` he rery beginning of that study we ~ e ~ nterior Udall, by certain distin- ~i , i venue, but this study was done ~r )n~ any governmental entity at all. ~u ), y private citizens with the help ~r ~ New Jersey, Mr. Widnall, and ~ or ~fuskie. V e re going to give you one of our .1:) to turn into a bestseller, as a mat- ~ a~i lom House and tells the story. B gi~eatly to the whole idea was our v~ 0 ~S the chairman of the National ~s a r~iatter of fact, and it was ~ ) URBAN DEVELOPMENT 965 [Excerpt from "WI PINDTh~G~ A~D I 1~'AE~ I-I In formulating Its findings ~mn~L rec Historic Preservation `has attE~mp~ed b State, and local government, and pri' ~:) itage So Rich"] IME~NDATIONS UCTION datlons, tile Special Committee on op a program to encourage Federal, ~encies and individuals to preserve ~NJ h ITs B DO I I ea ". ` ` ` I " PAGENO="0384" DJD1~ONSThAflON CI'~PIES AND t RI3AN DEVELOPMENT communities, areas, structures, sites and obje4ts significant to architeetu tural, social, economic, politlaal ~tnd mi1it~ry~ history and which contri the quality and meaning of American life. In pursuit of this objective, the conimitt ~,. which includes represe Of all levels ~ Government and the agencies wolved, has studied probl programs reb~ted to historic preservation in the Tnited Staten and in At the reques1~ of~ the committee, a number of Federal agencle~ and the I Trust for ths~orie Preservation have s~ppiit studies, reports, docume comments on ~numerous historic preservatlo activities and accomplis The cornmitte4~ has examined contemporary ui~opean practices In hist servation, r~stccaUen, and reconstruction. : has obtained from auth~ sources in lil.*land, France, Holland, Germ ny, ~ Seand~navia, Poland, slovakia, ~A~trIa, ~ and Italy legal and admi f~b~athr~ information `Whit be used to evaluate European experience in $h~t1on to American needs posals for Improving `and developing hlsto~ic preservation programs United states. It is clear to the committee that ocr own n~eds and the evidence of cx in Europe, where historic preservation is a i ~ ajor responsibility of gove suggest an et~ansion and development of our own programs, placing gre phasis on Gth4ernment support of private effi 1~s in historic preservation The c&~ml1~te~ has' been aided in its work ; y consultants and by the c tors whose w~rk appears in the' various ~hi~ ters and photographic set "With Heritage So Rich." The commiittee is indebted to many public fficials and private citizen United States and ~urope, who have provi4 ~d information and ideas study. We thope this material and our findin s eM recommendatiotis wi the growing interest in and concern with hi toric preservation throng United States. One of the exciting conditions which has encouraged the committee its recommendations is the attitude of public officials and private md toward historic preservation. What has lx4en a ground swell is bee great wave of Interest and support. This growl4g intereet is part of an evolutio4ary process which began a or more ago pith the first movements to pr4serve important historic s structures. ¶~1'he historical matérial provide~i ~ this committee, shows process has' lbvolved many dedicated puNic~ s~rvants, private individ groups~ sthoh~rs and experth. In accordai~ce with this increasing desire 1~o make historic preservati ing part of our community life and developm~nt, the committee recomm tam new programs described in this rep~rt. Along with enlargem enhancement of existing programs, they will broaden and deepen the national historic preservation activity. Findings If it ean be said that there is a new awak$iing of interest in the pree of our cnltnr~I and architectural heritage, l~ muSt he added that never need for~it~gr4ater. f Since Wexl~d War II a great wave of urb4mzat~on has been sweepin the Nátioi~.; ~ And such is the rate of gro~th that in the next 40 y United St~te~' will have to build mere hoztI~s,'more schools, * more stor factories,. ntoMpublic facilities Of all kinds t4an In the eetire previons b the country~ Out of the turbulence of building, tearing down, and rebuilding th America, more and more Americans have cotne to realize that as the f places the past, it destroys mu~~h of the ph~Pslca1 evidence of the past. The curent pace of preservation effort id not enough. It Is as th preservation movement were trying to travel~up a down escalator. The come for bold, new measures and a national jian of action to insure tha children, and future generations may have ~ genuine opportunity to a and to enjoy 4ur rich heritage. The Unite~l States, with a short history[ and an emphasis on its growth, has ieft historic prese1~vatlon prhiia~iIy to private interests an In the older,i history.conscious countries of ~urope, preservation bade: been provide~~ prnnitrily by government . One of the ~chte ~1iortages in the field of hisjortc preservation is that of ti~ined architects and other technicians ai~d trained preservationist~ 966 al, eul~ ~ute te tatives ms and )urope.. ational ts, and ments. Ic pre- ritative Czeeho~ ~ .c~5nld nd pro- in the n-ietic~ nment, ter em- ntribu- ions of , in the or this .1 assIst out the 0 make viduals ming a century ten and Lat this als and II a liv- nds cer- nt and `cope of rvation was the ~ across ars the 8, more story of face of iture re- ugh the ime has we, our predate conomic efforts. ship has ;peelally T1ie~e PAGENO="0385" DEMONSTRAT1O~ cITIES ID URBAN DEVELOPMENT 967 sh~tage~~ iuust be raimedied i~th~obj in time and the quality. øf pr~ervat~i envisage. A program ~ s~h~1arsbtps need. Our Nation began with n~igr~tion nation of pecple on the niOve~ F4~w o with places and buildings. ~Phe nat neglect of starting p4ints and an mdi ~and places. Thl~ is what we a ~e ti~ying As is apparent from `a stud~ r of van cern for historic preservation in the Ti with some notable exceptions. At the Federal level, the I ~ws now neetly include the Autiqu1t1e~ Act of 1 on Government property ; an ~ct ~tal the Historic Sites Act of 193 ~ w~iich for public use ; the act of 1~ ~, which National Trust for Historic P eservati which gave to the Departmen of How Pederal funds to acquire op n s1~ace renewal areas. The following Is a summar tonic preservation. The Department of the I ter~or Ii historic pres&vation acttviti s ~ m ~prehi~tonic Indian viJla~es `in ~i1~~tEU~ of our military history, of h Stoi~i~ b pIoneers and of many other xa~nple growth. The National Park er~ice, responsible for this vast progi~am, has Of its work and the s:erv~ce It i~ende visitors. The National Park Sei?vlc~ al~o cord and buildings, which, with tI~e b~1p o thousands of historical prop~t1e~. thr ~ ~of the I~tenjor has c1ass~fleI~*~O sw~ landmarks. Recently, the s~irv~y h ~ `historic districts such as ]~r~ok1yn I ei the past 2 years, 13 such area$ have be ~i as registered national 1l1stor~c ia~idau t landmarks and districts ~t~e s~udled an I Another major program, the bistor Le tanee `to the Natloii as a whole and t' goes beyond the study of hts$ori~; `sith all exa~nplee of American ar~h~ctur r The invaluable records of t1~e~aur~vey a ~rnd they have been indispen~ible aids t Department of the `Interior ~4ll iss~e ~ and photographa for a slngl~ State- ~ present available for fu~thei~ pu1~11cat o ~the dual function of a bIstT4tcal pre i Nearly half the &~ullcthi~s ~eco~ded ii been razed or destroyed by i~nutt1atio Buildinga Survey estimatee t~iat ~o fe ~ be inventoried, and that at ~ea~t 18, they should also be reeorde~ in phot g mately 3,000 of `the 90,000 buikjings ~ more, l'o'eate~ in coi~nrnuniti~s throug .0 or another by current ~ed$~ai prog ~ of `the 19~O"s. At the ~urrént ~ate ~ 75 yeara to~ aecon~p'lish its work. The National Park ` Servic~?, ii~ coo e ~coordhtates the lnteragenc~ a~cheo ~ ati icfl) outlined in th~'r~port are to be met ivity is to be at the `high level we ants-in-aid fo~ studies is a pressing T with migrations, and remains a ye bad close ties with the land and sult' in to'o many cases has been a ~e to our cultural trail of buildings ~ect. 7s and programs, governmental con- States has been limited at all levels, ect which mentlGn"preeervation di- ritten to~ protect historic monuments the National Park Service in 1916; ` the national policy of preservation isheci and defined the powers of the d the Housing ~Acts of 1961 and' 19435 d Urban Development powers to use move historic structures in urban Federal programs which affect his- a ii respon~lbIe for a wide range of are. It has ~erve~I as. custodiaii of ` c~f the ba~tIé~~4h'~and f~rt1fiøations S ~nd p'h~.es, of the eyidence of our e history Of our social and cultural Es the agency within the t~epartmeet worldwide renown for the excellence bhe American people and our many the national survey of historic sites and local authorities, has identified ,t the United ~t~tes. The Secretary ~rt1es as regi~th~d national historic an to identify nationally imp~tant , N.Y., and Annapolis, Md. Within sified by the Secretary. of the Interior As the snrvery continues, additional ~nized. E~nlcan buildings survey, is of Impor- State and community. The survey major historical buildings to include 213? of public concern and protection. vailable at the Library of Congress rehers of preservation projects. The L publication of some of the drawings nsin-in 1966 ; but funds are not at ~ueh publication is intended to serve on and a slource book for architects. ~il in the past 30 years have already t the staff of the Historic American an 90,000 additional buildings should these are of such exceptional merit a and measured drawings'. Approxi- tnated on ]~ederal lands and 25,000 inerica, may be afi~ected in one way nd projects during the second half grass on this survey, it would take El yes ~ig 1 r rëZ co~ 1* ed 1: u ii 1 43 .~ e. ,~ 4~1 ne tab ;4 `a dt of the iOu ~RTM~ENT 5 eth rOj be~, `~it S. ec~ An ~-et nd ~O1 e~ ni~ [se tat do Y ~t L5 p1~ ii with the Smithsonian Institution, salvage program, involving seven PAGENO="0386" DE1\~ONSTRATION CITIES AND tEBAN D~VELOPMENT 968 Federal and ~ny ~State and local agencie$ pins program wa~ initi ~ted 20 years ago to iteseue irreplaceable archeologic$i sites destined to be perix anently lost through flkoding in the eour~e of darn and ~aservOfr construction. The Bureau of Outdoor Recreation is autl4rlzed to provide various f rms of financial aesiStance for historic preservation~ but at present it lacks a lequate funds. Historic preservation projects of the Department of the Interior an and local agencies have been supported by the Neighborhood Youth Oo ministered by the Department of Labor und~r the Economic Opportun: and by funds from the Area Redevelopment 4dministration-now the E~ Development Administration-in the Departm~nt ~f Commerce. DEPARPMENT OF HOU5ING AND 4fl]3AN DISVELOPMEWP Many histo*ic buildings and areas are in 4he hearts of our cities. 9 Department ot Housing and Urban Deveiopm4nt administers the many a~ of the former ~ioinsing and Home Finance Age~iey. These include, among Federal assist~nce for renewal of our cities, ~or planning and developm~ grams ~of States, eonnties~ regions and cities, fOr oven-space lands and for his~toric preservation assistance. Under the urban renewal, local planning assistance and open~spa~ programis the Department has provitled funds for planning, surveying facilities, open space and property acquisiti~n for historic preservatioi local planning assistance (sec. 701) grants anid demonstration (sec. 314) have been used by a number of communities ~n conducting surveys of hi: assets and preservation potential as part of tJ~e process of preparing bc prehensive plains and community renewal prograras. To date, 119 comn have utilized ~unds In one or more of these ~thgorie~ as a part of thei: preserva'tior~ a4nd renewal progranua All of theod coramunity development prog~a~mis have important roles preservation lWd and are being used to hel~ achieve. local goals for preservation. Under current henning and urjan development legislatio~ ever, the cost of restoration and continued malnteiiance must be borne by public or private agency. No grant-in-aid or~ loan funds are available specific purpose of restoration. ~ Federal loan and grant-in-aid funds available for rehabilitation of I buildings cannot be used for more than m~king the building habitat marketable. Any historic design elements which do not relate to str safety and economic usefulness are not eligib~ for such public funds. Improvemen~ts needed in the Department's ~rograms include the addi historic sites ~tnd buildings, both within an4 outside the project area, list of aecepta$e local noncash contributions Ito renewal costs, and an e ment of assist~nce programs ~o include loans fur acquisitiun and rehahi] of historic strr~ctures and districts. GENERAL ~J5RVIOES ADMI)~flSTRAPION The General Services Administration is the management agency for fe lerally owned buildings and sites. It controls a wide variety of major buildin ~s and areas, many of them dating from the founding of the country, including c~ourt- houses, post o~ces, fortifications, army campo, customs houses and eve y con- ceivable kind of structure which Federal pro~ams have required in the course of the last 1T5]years. The agency is reaponstl~ forsafeguarding and sa vaging and disposing; of the huge inv~5tory of suifbns Federal property, in luding public bulldin~s, some of which have histoije significance. The Generall Services Administration and cJ~operating Federal agenci s, par- ticularly the I~epartmênt of Interior, have dev~bopod agreements for iden ifying the historicaiór other significant of sites and ~tructures under Federal u~anage- ment. They al~ea1so seeking means to devebop~workabbe solutions to the $mplex problems arising from the changing uses of such structures, and the ch~inging patterns of Ouverument administration. The General Services Adminis~ration has assisted in the admirable efforts to preserve and restore such structu~res as the old State, War, and Navy Building and the Pension Office Building in Wash- ington, D.C., amOng others. I State `ps, ad- ty Act, onomic he new tivities others, nt pro- limited e land public L. The grants ;torical tl corn- unities broad in the Listoric L, how- a local ]or the Listoric le and ]ictural lion of to the rilarge- itation PAGENO="0387" DEMONSTRATION CITIES DEPAI~P~U~NT 0 The Bureau of Public Roads in the isters the Federal highway prc~gra~n, ha way projects in the interests~ of histo tology. In this connection, a ~irc~i1ar Bureau concerning outdoor re~reation "To assure that full eons1dex~ation ia in both the Federal-aid higIiw~y p~ogra proveinent of public recreatioi~al ~esou to public parks, playgrounds, f~rests, o~ and historical resources, it wi'l ir~ the cations and estimates (P.S. &l E.) for affects natural or man-made ~esotirces for, public recreational or hist'o'rical pr having the official responsibi~ity then Mghway department did affo~d to sue portunity at the eanlie~t pra~ticable t planning for the proposed hi4iwa~sr be for such a review, as a niinim~im, wonl department of a direct eonta~t betwe public authority preferably d~irin~ th~. for the highway. In all cased th~se e time at which the public heani~ig is adv public authority do not agree *ith the: their reason for nonconcurrence s~taib and the State highway depart~nent aba referenced public officials haire been* Public I~oads provide the bes1~ po~aible department." ~ I INT 1~G0VERN There have been some nota~1e Fede tion. However, the present d~spo~itioii tion of historic buildings and slte~, the the planning of details of th~ federall ment of national defense facilitie~ and and program involve a series of çompl ties and activities is the result of a sei is separately adminiatered. ~Turisdicti servation have been inevitable. Such provisions for their early res~lution m grams for historic preservati9n. There is no present administratjve m between Federal agencies or 1~et~een ~ the various Federal agencies. The Cc mends establishment of an Ac~visOty C~ adequately represent paramount inter private sector. Such a counc~l could ervation liaison and coordinc~tioi~. Similar problems of coord~nation a States and many localities can lay cls in too many cases, even whe~e State interest is high, preservation efforts h tion of public funds for pre~ervation may not be acquired withoat f~iir comp It is one thing to know that~a threat importance. It is another t~ find th establish and maintain an appropriate Moreover, as at the Federal level, b State, and local preservation ~~rog~ama E~ven in the private field, whicl~ so f preservation in this country,: thq effo private philanthropy, have b~en Insuf The focal point of private endeavoi Preservation, which has been eng~aged at N1~ xMiraan tment of ~Jommence, which admin- loped rules. and guidelines for high- eservation, archeology and paleon- andum issued May 25, 1964, by the stone resources stated: 0 the over-all interesth of the public programs for the protection or liii- stich as but not necessarily limited ce, game sanctuaries, and the like) be required that the plans, specifi- Federal-aid highway project which ed to, or include in realistic plans tion purposes by a public authority ontain a statement that the State opriate public authority ample op~ review the highway department's and copstruction. The opportunity ist of the initiation by the highway t department and the appropriate ailnary stages of plan development shall have been made prior to the . If thO officials of the appropriate g of the State highway department, uded with the P.S. & E. documents, r that the suggestions of the above- ed and the plans as submitted to on in the judgment of the highway L LT~IS0~T ~omplisbments in historic preserva- deral properties, the otilcial designa- opment of urban renewal programs, d highway system and the develop- Federal operations, responsibilities ivities. Elach of these responsibili~ congressional authorization. E~tch [isputes in the field of historic con- tes will occur again and again and an important part of national pro- ~ai lam or appropriate method of liaison te tub local preservation programs and cli. tee on Historic Preservation recom- ~il on Historic Preservation which wffL 5 ~ t all levels of Government and tTie uc~ conflicts and Improve historic pres. state and local governments. Most historic preservation programs, but cal law is sufficient and community ~n bobbled by the lack of appropria- th is crucial since private property n. iilding is of historic or architectural y to stave off the bulldozer . and to iving use for the property. danning and coordination of public,. eking. provided most of the leadership for U especiallv the financial outlay by een the National Trust for Historic otable but limited program of educa- D TRBAN DEVELOPMENT 969 pa P1 nO liii en an ur cli ~v0 r~r, r, pp on on 1~l~ reI~ ac~ 1s~ Ln but I ii a C u d S ±1 t 1 r a 1 I Id be at al a 0 ~1 0 a d ii 11 B n n a r 11 c~t tQ ic be rh atb ~ 1~ ha . I PAGENO="0388" i~B~ D~VELOPMENT~ tion, dis~e~nirnthon ~yf information, and th ~ acqnisftion `and mainten nee of a nun~ber~of 1~i~st~ric pr~pertie2. , However~ tile largest historic propert holders outside the Federal Government are the ~orporations holding and ~ anaging historic communities., sueh as Williamsburg,. Va., Sturbridge Village, M LSS., and Old Salem, N.tJ. The Society 1~or the Preservation of New England An iquities, with 57 struoture~, is probably the largest hOlder of scattered propertie But nufficient funds are not ~tvailatde for ~be development and staffi g of the National Pru~t's programs, for am~rgeucy ass~stance to others facing pre ervation er&ses~ or for4the aequisitk~n and support by J2ze trust of additional pro: erties of hb~toric and~ultuxal imp&rtnnee. j. While !the1~e is a growing national interest$in Mstorie preservation, it means e~ren&~ 4i~trIbuted. I~i cities welthd .~he widest discrepancies ii and accompl~shment In cities such as Ne4 Orleans, Boston, Oharles San Anton1o, Santa Barbara, N~itehez, Wins4n-Salem, N.O., Bethlehem, Providence, R.I., there has been excellent and. growing support by business community and local government. ~ And there are others. there is a longer list of cities and small towns and villages where either ence reigns or there is outright hostility. un the latter case, preserva quently loses the battle to strnger forces. Curiously, business lead4 ignore the economic ben~fits of prestige vaIue~ and tourist dollars. INTW(AT1QNAL CO Phere is a growing ix~terest ft~ programs tone preserv4ttion sponsored by the United Cultural Org~nization. These include the Study of the Preservation an4 the Restora newly ~ es1~a~1dshed international Council on national Relations Committee of the Nati Historic Preservation of the American Instil inendig support of theee programs for severs first Inter-American Historic Preservation in June 1965. It is impo~'tant for Americans to share re~ to participa~b~ in international meetings on hi. to learn and 4mueb to contribute. Support abroa~d,. wilLtnvoive;the :~ooper$tIon of the tho~ty ~ purp Peehnical ~eIp, such as the Rome center c tual educatith proeess. There must be a research, ~f' ideas, approaches and philosoph~ cations, exhibitions, motion pictures and diaF of high quality. This suggests that conside: be given when the Federal Government appr toric preservation program. CONCLUSIONS P0 TEE TINDINOS The pace 0* urbanizatlftn is a~eelerat1ng a heritage is rn~unting ; it will take more than stern the tide, ~ The Unit~d1 States is a uatioiI~ and a peep) ~ on the move. It is in a mc~bility *ant~ ~ehunge. 1~1very year 20 perceni of the population moves' place oi~ resMence. The result is a feelin~ of rootlessness combined longing for those landmarks of the past whi Ii give us a sense of stabi belonging. If the preservation movement is to be suqcessful, it must go beyon bricks and mortar, It must go beyond savi~g occasional historic hou opening `museums. It `must be more than a cult of antiquarians. It' more than revere a few precious national sljvines. It must attempt t sense of orientation to our sociE~ty, using str~ii~tures and objects of the establish va~uts of time and place. , This means ~L reorie~itation of outlook and ~1~n~t in several ways. First, the ~`eservation movement must rec~gn1ze the importance of a turn, design, 4nd esthetics as w~il as histori4, and cultural values. Tb treasure a ~n~Uding for its pleasing appeara~ce or local sentiment do it less importa~nt because it lacks proper hi~torl~ credentials. ` " ` 970 D~fONSfPRATION CITIES AND I is by no interest on, S.C., Pa., and oth the owever, indiffer- ion fre- rs often SEEATION international cooperation ations Educational, Scien ome , International `Center ion of Cultural Property tonuments and `Sites. TI al Trust and the Comm tte of Architects have bee years and also participat ~onference at St. Augusti for his- ific, and for the and the e Inter- ttee on recom- d in the C, Fla., ~arch and education progr tonic preservation. We ha or such conferences, at h ~epartrnent of State which yes. ms and e much me and has au- Lfl provide, is only part of genuine interchange of rs and It is essential that o Lays at international gaths atlon of international coo ~priate funds for an expan the mu- ults of r publi- ings be ?ration ed his- 4 the `threat to our enviro ;he soundIng of periodic al mental mis to era of rom its with a ity and saving es and LUSt do give a past to ~chitec- se who ot find PAGENO="0389" * Second, the new preservatio~i m~ist h individual landmark and concern itsell valued areas and districts whi~h e~ntai] A historic neighborhood, a fin~ o1~ stre marketplace, a courthouse squa~,e, an est~ fall within the concern of the ~resérvat fight for the preservation of a h~stoiric ho at the same time to ignore an éntii~e are community which is being nibl~led awa3 Third, if the effort to preserve ~iistor as well as individual buildings is to sue be given to economic conditior~s a~id ta to preserve such areas as living~ parts of In sum, if we wish to have ~ future ourselves not only with the hi~tor~c hi~ the total heritage of the Natio~$i and all as a living part of the present. PARr II-~-REo Throughout this report the term "his dude the protection, rehabllitt~tioC, res nities, areas, structures, sites, ~ind obje or cultural significance. To carry out the goals of h1s~ori~ pre~ of action is imperative. Such ~ pli~n wU lie and private leadership. Many individuals and prlva~e o~gani preserve the physical evidences of çur h today. Public agencies have also made the current crIsis and to accelE~ratØ the: increase the amount of Govern~nen~ supj Our traditions differ from tl~ose of ~ii 1i~arn from European experienc~. ~he w to historic preservation has restLlteçl in s and expansion of State and ioeaj program an excellent object lesson in tl~e EuropE buildings and areas as living j~art~ of c ventures. * A national plan of action for historic elements: 1. A comprehensive staten~e~iit of nat programs of all Federal agenc~es. 2. The establishment of an 4dvi~ory vide leadership and guidance for the provide liaison with State an~l local g and the general public. 3. A greatly expanded natio~ial ~egisl communities, areas, structure~, sites, sistan~e to States and localitie~ fo~ con public information program ba~ed çn th( 4. Added authority and suffi~ient fun buildings and sites of national~his~oric renewal program to permit lo$1 noncas historic buildings on the natio~ial regis area. 5. Provision for Federal loa*s atid gr and expansion of State and lo~al ~rogr~ 6. Federal financial aid to an~l tl~rougl vation to assist private interest and acti tional purposes and for direct: ass~stan~ Detailed recommendations a~~e as fol] FBI) 1. Enact legislation to: (a) affirm policy, recognizing its enlarged din~ensi ing historic preservation progr~mS, (o) 60-878 0-66-pt. 2-Z5 DEMONSTRATION CITIES A TRBAN DEVELOPMEW2 971 yond the individual building `and L the historic ` and architecturally ecial meaning for the community. Liouses, a village green, a colorful iualityof the townscope-all must ovement. It makes little sense to t `between two service stations, and pedal charm or importance in the ~compatible uses or slow decay. I architecturally significant areas intensive thought and study must .cies which will affect our efforts mmunity. i~eater meaning, we must concern s, but we must be concerned with *s worth preserving from our past rDAflONS preservation" has beeti used to in- n, and reconstruction of commu- ving historic, architectural, social, ion a comprehensive national plan urage, improv~e, and reinforce pub- 5 have worked long and hard to I) which we are privileged to enjoy ;tantial contribution. But to meet ~f historic preservation we need to ad joint public and private efforts. Ln countries, but we have much to which European governments give ful programs for saving, restoring, stone preservation. hievement In maintaining historic nities and as successful economic ration should include the following policy to guide the activities and El on Historic Preservation to pro- on of interagency actions and to nents, public and private groups, gram to inventory and to catalog ~jects ; a Federal program of as- n programs ; and a strong Federal rial in the register. Federal acquisition of threatened tance, and expansion of the urban bributions to include acquisition of )tlT within and outside the project md other financial aid to facilities historic preservation. cational Trust for Historic Preser- n the pi~eservation field, for educa- private property holders. sig national historic preservation ) coordinate and consolidate exist- rize annual appropriations for the ) 0 [C ~Tl il b~ vjt] ~I o~ bic~ lz$~ I) SE ~y i ali pol :11 gl~t at: .ic ra~i vat nC( tioi ce .t )U c~ê~ ~f b imi ith~ e~ eri~ Pt lo fo po~ `, I~ *th so he: ty to 78 ~ stp ~ U )~ 0: bo 0: el Ic ~ ~i] Oi rE Ic Ii Dl e .11 p r Is II *i1~ ~Ti PAGENO="0390" I I 972 U~MON~TRATION CITIES AN1~ URBAN DEVELOPMEN' Department of the Interior to acquire hi~toric structures and sites of major national importance, (1) consolidate theiFederal inventory and a rvey pro~ grams in aination&l register and to autho ze additional appropriatio ~s forthe National ~*rk Service to administer this r ~Ister, (e) authorize gran s to State and local governments. to carry out s1mil~ ~ * in~entory an4 survey pr grams in coordinatioji with the National Park Servi e. 2. EnaetjiegisIation authorizing prepara ion, ~ administration, public tion, and distributk~i4 by the National I~ark Service t a national regi~ter, in ecordan~e with caretdlly prepared standards and crit na, ~f: structures and site , whether publicly or ~ privately owned, of national 1 penance because of histo ic, archi- tectural, archeological, or other cultural values. Such a register hould 1n~ dude several categories of buildings : Ph~ first category should in lude our prime natiOnal monuments and Oongress should pass legislation wh ch would protect them from dhmolition, mutilation, or alteration without appro al of the advisory body which this committee propo$es. * This group would mci de struc- tures such ~ as the Capitol, the White Hojise, Mount Vernon, and 1 onticello. Many of the buildings are at present in pul4ie hands and most of those n private ownership ~tre in no danger. But there sl4uld be an orderly evaluat on of the structures belohglng in this efliall class W$ch should be protected i ith every legal safeg~ard. I A secofld~category of buildings should in~lude sti'uctures oflesser r uk which have meritland should ~ be eligible for theIbr~ad. range of assistance prograino proposed in~ this report. Provision should be made for the Governme t to have the right offirst refusal should the owner~dcide to sell or demolish the structure. ~ A third category `should include th~e .stfl~jres of local concern wh so preser- vationshottid be a matter of local decision aild initiative. 3. Estabi~sh an adequately staffed Advisery council on Historic Pr servation, with membership representin~ the major ~deraI departments and a encies in- volved in preservation matters, as well s State and local govern Lents and public and Tprivate organizations interesk In historic preservation nd urban developthelit The functions o1~ such a Oo~ idi should include (a) ad ising. the President ~i'4 the Congress on historic pre~ rvation as it affects the na ion'al wel- fare and pr~eviding inspiration and leaders ip for the implement of th national policy ; (°b) 4the development ~tpolie1no, gui ?lines, and studies for the r view and resolutiOn 4f conflicts between different F deral and federally aided programs affecting historic preservatiofi ; (o) the fi~óui~agemènt, in coopera ion with appropriate~private organizations, of publii Interest and participation n historic preservatiofi ; (d) supporting the nattonal ~egister as an instrument o national historic preservation policy and insuring t~be coordination of the reg ster with activities of other agencies of Government ; ~e) making and publishing studies in such areas as adequacy of legislative and a riinistrative statutes and r gulations pertaining to preservation activities of Sta e and local governments, a id effects of tax polities all level of government on historic preservation, and (f) prep- aration of guidelines for assistance of ~ta e and local governmente 1: drafting preservath~4 h~gis1ation. 4. Provid* by Internal Revenue 4J~de m erniment or clarify by reg lation or published r~iling the status o~ : (a) histo C preservation as a publi , exempt charitable ~etivity, deductibility of gifts f historic easements or estrictive covenants t* governmental units or exemi organizations engaged in preserva- tion, and permissibility of revenue-produci g adaptive or incidental ses : (b) acceptance Qcf a registered historic property ~or conveyance to the Nati ml Trust in lieu of an equivalent estate tax payment; (c) income tax deduetibil ty to pri- vate ownerS. of registered historic properties for preservation and r storation expenditures within appropriate limitations ; (t) recognition of cony yanees of registered bistoric properties to governrn~ntal units or exempt pr servation organizatiolis as present gifts, despite reser ed life interests, provided the prop- erty is open to the public on a reasonable bae s. 5. Make r~iandatory a preliminary review ~f the location and status f historic sites and b~iild1ngs in relevant areas prie to the undertaking of I deral or federally st4led programs or j~rojects affec ng plans for physical dei lopment. Where the i*view produces evidenee of the e lstánceof historic sites and buildings and that suirveys made In accordance with I i~ stand~arils of the natiorn 1 registry are lacking, make mandatory a historic ~ irvey prepared in accord~ nee with such standards. Where necessary, provide funds for the preparatio of such surveys through the Department of the Interior, Department of Ho sing and PAGENO="0391" DEMONSTRATION CITIES D RBAN DEVELOPMENT Urban DeYelopment, Department of m erce, or other concerned Federal agencies. Plans prepared for such d v lo ent projects must take all such historic surveys into consideration, and U show evidence thereof. 6. AuthorIze the use of Federal mat i g rants for acquisition by an appro- priate public agency of historic struct r s, ehabilitatlon loans and grants foi~ restoration of such structures, and roe i on of public expenditures for such acquisitions as eligible noncash contri U s under urban renewal programs. Under the urban renewal program, co un ies must match the Federal grants with local contributions. In most cas a, co munitles must put up$1 for every $2 of Federal aid, although In the cas o ties under 50,000 and cities In eco- nomically distressed aruas, the formul i $ for every $8 of Federal assistance. However, the community has the optio 0 ake in lieu of cash, a noncash con- tribution of a commnuity benefit such a a school or sewer and water services within the project area. A little less t an two-thirds of these local matching contributions are in this form. Und r th 1965 Housing Act, $2.9 billion of Federal grants are authorized which I 1 b matched by between $966 million and $1.45 billion of local matching con ri uton~. Expansion of eligible noncash contributions to Include acquisition of i o c structures on the national register both within and outside the project ar a w ld enable local communities to play a far more effective role In preservation 7. Establish new and liberalized lo n pr grams for private groups or mdi- viduals for acquisition and rehabilita I n f historic structures and districts. 8. Enactment of a scholarship and r In g program for architects and tech- nicians In the field of historic prese v ti n, similar to the program enacted by Congress in 1964 for the field of h u in and urban planning. An adequate program is of vital importance to the e ye implementation of the other pro- posals of the committee. STATE AND LOCAL GOVERNMENTS ( Co NTY, TOWN, AND MUNICIPAL) 1. State : Enact legislation establishin a appropriate State agency, and en- abling and encouraging local comm n tie to establish historic preservation districts and to acquire through emi nt omain (where necessary) historic structures and sites and preservation e se ents and restrictive covenants, and providing special property tax treatme t fo historic structures and preservation and restoration expenditures. 2. State : Establish an organizatlona tru ture capable of : (a) providing lead- ership, information, standards and c i en , technical and financial assistance to local communities for preservation rp ses, ( b ) reviewing and coordinating the programs and projects of State g nci s to avoid to the maximum extent conflicts with preservation objectives c) c rrylng out appropriate preservation programs, plans, and studies, and ( d st bushing and maintaining an official State register coordinated with the n t on 1 register. 3. State : Enact legislation clarifyin nd encouraging the use of preservation easements and restrictive covenants o th benefit of governmental units and preservation organizations. 4. State : By statute or re~ulation, a su e exemption from inheritance taxes for gifts o~ historic property to gove m nt 1 units, the national trust and other preservation organizations, and inco t x deduction for such gifts and for pN~servation and restoration expenditu 5. State and local : Where authoriz , r quire by legislation and apprqpriate notice procedures, a waiting period e ore demolition or significant alt~atlon of registered historic structures, In or r t provide time for acceptable alterna- tives and new use solutions to be worked ut 6. Local : Undertake a thorough and sys ematic survey of historic and archi- tecturally important buildings and areas wthin the community, in coordination with the national register and the State egi ter. 7. Local : Make a comprehensI~re stud of all available legal tools for preserva- tion purposes, including historic distri t z ning and formation of architectural and historic review boards. Such stud es hould relate to official general plans of the locality and be Incorporated in om unity renewal programs. 8. Local : Provide an annual budget f r e penditures to preserve and maintain those historic and architectural struc ur s and places of importance to the community. 973 I PAGENO="0392" I 974 Th1~MONSTRATION CITIES ANDI tTRBAN DEVELOPMENT 9. The C~ngress should strengthen and1broadeu the District of olumbia historic pre~ervation legislation. GENE 1. Historic and cultural sites, structures ~ and objects acquired wit the use of Federal funds and not retained by the acquiring department or a ency, or not otherwise directly disposed of, should~ be transferable under th surplus property disposal program to the nationall trust in fee simple. The national trust shouldbe empowered to lodge operatidnial responsibility for such property with local preservation groups wherever poss ble. 2. In ord4~r that representatives of the * epartment of Housing a d Urban Developmei4 the Department of Commerce, be General Services Admi stration, and other ~propriate agencies may be allo ed to sit with the board of trustees, the nationalt trust charter should be amen ed to provide that the tr stees, at their discretion, be allowed to ~tppoint add! onal ex officio trustees fro among heads of Fedk~ral departmeuts azid agencies. 3. Federal4authorization should be provid for matching grants to the national trust on a tsVo-thirds Federal/one-third nati nal trust formula for the cHewing purposes : (a) to provide educational and learinghouse services and nancial assistance to individuals and organizations ~ in preservation and related fields; ( b ) to prepare information and educational publications, conduct meetngs and conferences, finance scholarships, develop library resources, provide echnical consultation and establish award programs ~ (c) to acquire, restore, a d main- tam registered structures of national histoi$Ec or architectural impor nce. 4. To assure that public funds for privatejbistoric preservation are sod only for authenti4~ neeth and In aecordance with established criteria, su h funds should be tr$nsmitted to nongovernmental o4ganizations and private in ividuals only with th~approval of an appropriate auth~rity. 5. Private corporations, trade associatio4s, and labor organization should be encourageti to identify and ~reservé the l~cations, structures, and o jects on which the development of their enterprise ot craft has been based. 6. The great national philanthropic found~tions should be urged to a imulate and assist programs for the training of aróhitects, landscape architec s, engi- neers, historians, desigiiers, and decorators In careers in historic pres rvation. In addition, they are urged to assist histo~1c preservation research rojects, publications, and conference and communicati~n media programs. INTER1~ATIONAL CO4PnRATXON The Unit~4 States should provide financi4 support to the UNESCO historic pre~ervat1oh ~rograms including the Rome O4nter, and the International Council on Monume1it~s and Sites. In a~1dition, Fede4al fun~1s should be used to support international ~ conferences and scholarships and fellowships for jute ational study of historic preservation. Mr. RAINS. The preservation of our gkeat American historica herit- age has become a critical problem. Near half of the 12,000 str etures listed in the historic American buildiPg survey have airead been demolished. Unless we take immediate~acti:on, it will be too la e. In less than 200 years, America has gr~wn from a sparsely po ulated agricultura1~ community of States to t~he most urbanized an tech- nologically t~dvanced nation in the histoity of the world. During tl~iese 20 decades and before lAmerican genius has reated marvels of thortar and stone. We also Ijave designed charming neigh- borhood and beautiful streets, restful village greens, bustling arket- places and other sites to meet our needs~ In the years ahead, and no one knows it better than the m mbers of the committee dealing with the economy of the country, our owth will accelerate. In the next four decades alone, our expanding p pula- tion and urbanization will require more ~onstruction than we ha e wit- nessed during our first 20 decades, the la4 200 years. Young pebple like you will probabl be here 40 years fro now. PAGENO="0393" 975 DEMONSTRATION ~ITIES D RBAN DEVELOPMENT This will be a true statement-we i I uild more things in the next 40 years than we built in all of our st y. This means that much of what e ha e created to date is threatened by the thrust of bulldozers or the rr ion of neglect. America must move promptly .` n gorously to protect the impor- tant legacies which remain. TWs we can achieve without blunting our progress. And this achievem t ill enrich our progress. With sensitive planning, the past and th f ture can live as neighbors and contribute jointly to the quality of ou civilization. I had the honor to serve during th past year as chairman of the Special Committee on Historic Pr se vation. This committee, oper- ating under a grant from the For F undation and sponsored by the U.S. Conference of Mayors, had as its members Senator Edward Muskie, of Maine ; Congressman i ham Widnall, of New Jersey; Gov. Philip Hoff, of Vermont ; f rm r Mayor Raymond Tucker, of St. Louis ; Gordon Gray, of North a olina, chairman of the National Trust ; and Laurance G. Henderso , irector. Serving with us in ex officio ca ac ties were Secretary of Interior Stewart Udall who was represent d y George Hartzog, head of the National Park Service, and Wal er ozen ; Secretary of Commerce John Connor and Rex Whitton, A m nistrator of the Bureau of Pub- lie Roads ; Secretary of Housing n Urban Affairs Robert Weaver, and William Slayton, Commissio er of Urban Renewal ; and Lawson Knott, Administrator of General Se vices Administration, and Wil- ham A. Schmidt, Deputy Corn is ioner of the Public Buildings Service. We had a very fine technical sta h aded by Carl Feiss. We received invaluable assistance from a gre t umber of historians, architects, and technicians, both within and o ts de of Government. Much research, many trips, lo g ebates, and above all, an ardent love for country went into the pr p ation of our findings and recoin- mendations which I would like t s bmit for the record. I hope you will take the time to read it carefu ly. The legislation introduced b Congressman Widnall carries out much of the program recommen ed y the special committee. Identi- cal legislation has also been in ro uced in the Senate by Senator Muskie who has as cosponsors a la ge number of Senators including Majority Leader Mike Mansfield Briefly, the legislation before y u committee would: 1. Create a National Adviso y ouncil on Historic Preservation that would include six Cabinet e bers, two Governors, two mayors, a representative of the counties, an four public members eminent in the fields of history, architecture a cheology, and culture; 2. Provide for new programs fo loans and grants for the acquisi- tion and restoration of structure of istorical significance; 3. Permit cities to acquire st uc ures of historical significance for which they would receive credi as local noncash contributions under the urban renewal program; 4. Set up a 3-year program f f llowships for architects and tech- nicians to meet the critical shor a e of trained personnel in the field; I submit you ought to put you nger on that one. We found that there are not too many people in this country, architects or anyone, PAGENO="0394" 976 1~MONSTRATION CITIES AND ~ iJRB~N D]WELOPMENT who are completely trained in the art o~ preservation, such as e found in Warsaw, or places like that where th~y have trained technici ns, and we need some trained people to work~in this field of historic preser- vation. 5. Prcwide urban planning grants ~r surveys of historica struc- tures; ~ 6. Make~grants to the National Tru)~t for restoration of s~ ctures under its a~m4nistration. The Wic~nalI-Muskie legislation be(cre your committee h s corn- panion legi~3lation now before the intc~i~r Committee which ould- A part Gf this pro~rarn, because of th~ jurisdiction, had to go before the Inthrioz~ Committee ; I don't mind Lelling you we put eve thing wecoujd in this particular one becausewe are willing to risk 0 r fate Oh this bill but certain things had to g to the Interior Commi tee- 1. Establish a National Register of sites, buildings, and obje ts sig- nificant in ~ Arnerican histo~y, architecture, archeology and ture. There woul~i be three categories in th$~ Register, the first of which covering s~i4h buildings as the Capitol, ~E~imt Vernon, and Mon icello, would bei~iriolate ; ~ 2. Make ~rants to States and local g4~ernrnents for surveys, plans and projeets~for historic preservation ; 3. Make grants to the National Trus1~ for Historic Preserva ion to assist in education, service, and financial assistance to prese ation projects. The Widn~all bill, I feel, is an imperative measure to save im rtant connecting links with our Nation's past4 The cost of the pro am is nominal in d~ollars but the cOst of faiin~ to a~t is beyond meas re in dollars. I u~e speedy enactment of this~egisIation. I hope yoi~ will giire the bill the consi~eration it d~erves. I hope you will ~giv4 us~ a favorable repor1~ .andll hope that this can b put on the calenchu, forearly passage by the i~Iou~e of Representative. I would very rnu~ch like to see this cbmrnittee and the Ho se of Representatives show the Senate just ho* fast we can really be hen we have a measure that no one can really~ object to when we get own to brass tacks.~ I learned ~ long . time ago, Mr. Gray, ~that the best witnesses that have appeare~I before my committee w*e the shortest ones. am going to reme4nber my good advice. That is all ~E have to say, and if I can ~nswer any questions, will be delighted. ~ Mr. BARKEIIE'. Thank you, Mr. Rains, f~*? your very fine stateme t. I want to. mssure you that every consi4eration will be given hese two bills. I was wondering if Mr. Gray desired to complete his testimony ow, and we may ask questions of you. Mr. Gi~v. That will be quite agreeable t~ me, Mr. Ohairinan. Mr. BARi~r. You may start you.r tes~m~ny. Mr. Gn~r. My name is Gordon Gray. jiappear inmy eapacit as chairmanof~I~e National Trust for Histo~,i~ Preservation, and s : E~ftk on behalf of oi~r trusteesand more than 1~OOcontributing mem ers. Mr. Chairnii4n, I should like to make i4y~ own comment about r. Rains. I am ~honóred to be here wider h~ umbrella, asit were, nd hear the fine things that the committee ha~ said about him becau I I PAGENO="0395" found this to be the case s~rvi~ig u mittee, of which I was cbair~na~. If you will forgive me for an kind enough to refer to soi~ie of m; should show that my ser~ice as . President Truman and my lat4?st s of Course. America's heritage of la4idtñark as in many other lands, bu~ b~ a ~ unceasing quest and drive ~for dev tionally and, in many ins$ne~s, u destruction. The new has~ris~n o: hood, a vista, an open sj$ee whi passed on to new generations. Oi ble for us to legislate ~ tc~ p.ri remains of the landmarks ~ cro~s th We celebrate the 25th ai aiversa we commemorated an an Liversa~ Celebrations are directed ~ ~ tI~e su of those leaders who. brin ~ t~em while causes protect a natonal he stored, displayed and v'ew~d. cannot be treasured from uch sto exhibition. These landm ~rk~ wi must be preserved on their n~tur ings and their functions, ~ro~vin~ age them and until their c~nti~ibut Townscapes of tomorrow ~nus manmade resources rooted ~ iti na years. It is worse th~nn~ea~iing best that we have, while trying to ments. ~ Organized concern for~ ou~ ta ladies from every State pt~rchased a dedicated number of ii~dis'iidua through the National Tr4st for T enlightened Americans h~s sprea the focus was on the houses of th and military history were i~iad~. design and neighborhooc~ ch~rac i~ assuming their placesof i~fl:p~rta] ~ President Johnson in ~iis mes a 1.965, and the White Hduse Co: f provided th~ instiratior~ and s published "With Heritage So R c mittee on Historic Preser~vation ~ ii ence of Mayors with a griuit fror the techniques. Public ~wa~ene ~ America has been kindled ar~d m s tion and participation. Public i~ obligation to the citizen~y 1~or a attractive through the p~s~rvat c RBAN DEVELOPMENT 977 him as a member of the corn- personal reference, you were ic service. I think the record ary of the Army was under under President Eisenhower, been ravished not by invaders our own making. America's cut and progress has uninten- 7ingly left a wake of senseless shes of a building, a neighbor- ~uld have been preserved and dorn, however, makes it possi- interpret, and use that which ntry. the National Gallery ; last fall the Smithsonian Institution. )f programs and to the wisdom )emg. These just and worth- which can be taken inside and he ~ other hand, the cityscape ses and brought out for special nrich the city and countryside ~ in relation to their surround- ~ valuable as time and weather felt and made known. ~ ~ this character and beauty of which accumulate through the indeed, wanton-to destroy the ne~ and inspirational environ- ~. heritage began in 1859 when aved Mount Vernon. Through .d organizations linked together ic Preservation, this concern of .55 the United States. Initially t and the places where political w, landmarks of beauty, good ~ also being recognized and are on natural beauty in February ice on Natural Beauty in 19~5 ted the method. The recently the report of the Special Com- the auspices of the U.S. Confer- Ford Foundation, recommended the problems of a rootless, ugly stimulated into active apprecia- rivate agencies must assume an ironm~nt ~ made meaningful and f our landmarks. Once the leg- DEMONSTRATtON ~ITI~S ~` ~ ~ I I 4 ~1 no ~1I f~ 0 to ag L~ `I sit ii rè ) Ic S I `bi to hs of d ~th I I PAGENO="0396" I 978 DEMONSTRATION CITIES AND! URBAN DEVELOPME islative m4ans are available to identity and protect, once w is evaluat~d, the American people witl4 their initiative and im must findilises for the worthy structu$~intheir cities. The National Trust is dedicated t4 this total effort to bri a distin~ti4ve environment, assisting l4ie American people in heritage which is theirs and which th~ey must protect. The Trust has cooperated with the successful Federal program of partment of Interior in its protection of parks, scenic wond derness areas, and historic buildings,~ predominantly in rur The great problems of our urban s~ciety today make it for the F~deral Government to hroa~en subs~anti'a1ly its le and contrifbutions to preservation. The traditional role of leadershipi in preservatioit in the U*ited States will be in and bolste~ed with the programs mt$le possible by this le The Nati~nai Trust, as the only 4rivate nonprofit orga chartered by the Congress to lead th~ private preservation p is prepared to assttme the additional r4sponsi'biiities which tth tion will co~fer upon it. This charter was granted in 1947 tb a cause backed simpi sponsoring organizations ; less than 20 years latsi' this well-est cause, known as the National Trust, r~aches out to about 10,0 vidual members, and to more than 6~0 national, regional, a member ~rr~anizations, supported by their estiniated membe 720,000 iui~ividiials; these groups ow4 or supervise more th houses, sit~ and other properties ; approximately 16 million visit or usel these houses and other faci~iities annually; One of these organizations, the Vie~ix Oarre Commission supervises 8,000 houses, sites or other ~roperties in New One tonic district ; the Society for the Preservation of New Antiquities is responsible for 51' properties, ranging in date f inid-l7th ce~iatury to 1811, which it own~ and maintains in 5 Sta American Institute of Architects is 16,000-member prof society wit~i 153 chapters. From th se members and the public the Natioiial Trust receives in re than. 200 requests for advice~or consultation e~ud confere ce~ for funds, for inter to save aud3for legislative iüfonination' The greatest number quiries àon*~ from those areas of the ~ country where this Trust membership is the strongest-wh re there is the greatest ness of the importance of landmark pres~rvation. Nevertheless, the success of these effói'ts, like the number of involved, has been too limited. There ~have been too few lead few dollars, and far too many great h~uildings and places de or ignored. I The proposed legislation provides 4he means to accumul necessary iniformation to locate and cert~ify historic places ; it p assistance Mr preservation and inthrpr~tation to States and palities ; it strengthens the National `lfrust's program of edu service~ and financing of projects. It pill be possible for the through public education to broaden tbe awareness of `the gre of American people to values of their~ landmarks and to ore citizen participation required for the success of this endeavor. It will not only permit the trust to m~et needs with tangible ance, but it will enable this public serVice institution to exp at exists gination ig about saving a ~ational the De- ~rs, wil- 1 areas. scessary ;dership private ;ensified islation. ~iization rogram, legisla- by 35 hlished )0 mdi- td local ship of n 1,800 persons ~wns or tfls his- ngiand ~om the es ; the ssional ~eneral Lonthly rentjon of in- ~tional aware- people ~rs, `too troyed te the ovides LUfl1O1- ~ation, Trust t; mass te the assist- nd its PAGENO="0397" DEMONSTRATION CI*IE~ D U BAN DEVELOPMENT . 979 program intelligently, moving ahe o day-to-day crises, so that in time the preservation movement ii b one of planning and orderly action, rather than frantic, last mm e e ort, which too often results in failure. That completes my statement, sir. Mr. BARRETr. Thank you, also, r ray, for your splendid state- ment. Mr. Widnall? Mr. WIDNALL. I certainly want c mpliment you on the work that you have done in your unselfi h de otion, shown as the head of the National Trust and the way yo ro ght together so many others who are interested in the same p po e, historic preservation and preservation of our heritage. It s een too long forgotten, and too much has been bulldozed out t e way, and we got to get a little bit of that human touch back i ga n. First of all, I would like to ask M . ai s a few questions. The bills that have been intro u e by Senator Muskie and by m~ are actually only part of the a k ge that are trying to achieve something very much affirmative in e ld. You mention in the testimony e 1 gislation that is now before the Interior Committee of the H Se. Is it not true, though, that the other legislation that ~ is pres tl being prepared goes to the Ways and Means Committee ? Mr. RAINS. Yes ; it is our hope t at there will be because some of the recommendations which the co i tee made had to do with taxa- tion-with tax credits, tax induc en s of various kinds to people individually, to restore historic 1 ce . Of course, that particular bill since it does affect taxation w u d o before the Ways and Means Committee. There is a bill now nd ng in the Interior Committee and there will be, we hope, legisi io having to do with taxes and its relation to the preservation of sto ic sites and structures. Mr. WIDNALL. Actually, this pa t f he legislation, in the legislative program, is probably the hardes o rite and takes the longest to prepare in that it must become p 1 ta le since it does pose legislative problems here on the Hill. I appreciate the fact with Sena o uskie that I am able to sponsor the legislation and try to assum so e leadership in the House to filling the needs that so badly hay t be met in the entire country. I wish that we had the same syst m of sponsorship that they have over on the Senate side, because e ator Muskie has already been able to have others join with him n he original bill, including Sen- ator Mansfield and I think this i g ing to be very meaningful as far as the future of this legislation i Co cerned. Mr. Gray, you indicate our need t how much do you think in the way of historic buildings-how m C do you think we have lost in the last decade ? Mr. GRAY. There are figures ava la le. I can't be precise, of course, because many things that have be n estroyed were never identified and registered, Mr. Widnall. Mr. RAINS. We put some figur i the record and I think Mrs. Johnson used it in the foreword to t e ook. PAGENO="0398" [~`roin "With Heritage So Rich"] FoREw~Rn Mrs. Lyndon *1. Johnson For 2 years I have had the privilege ~f `living in one of the gr t histoHc homes of 1~he Untied States. ~ Daily the 1i~es of the President and o my whole family ha'i4e been affected by tangible mei4eiitos of earlier Chief Ex utives and their families. Phe experience has drive4 home to me the truth tha the build- ings which! express our national heritage 4re not simply interesting. They give a sense of continuity and of heightened r~lity to our thinking about the whole meaning of the American past. I was dismayed to learn from reading this report that almost alt of the 12,000 structures listed in the Historic ~ American Buildings Sur ey of the National Park Service have already been destroyed. This is a sorb loss and it underlines the necessity. for prompt action if we are not to shirk o r duty to the future. . We must preserve and we must preser4~ wIsely. As the report e phasizes, in its best sense preservation does not meanimerely the setting aside of thousands of buildipg~ as museum pieces. It mea$s retaining the culturall valuable structures ~s useful objects : ~ home in w~ieh human beings live, a uilding in the servh~è ~ of some commercial or commu~iity purpose. Such prese ation in~ sures strudural integrity, relates the pres~rved object to the life of he people around it, and not least, it makes preser~ration a source of positiv financial gain rather than another expense. In the beautification work In which man~r of us are now enegaged, e try to carry on o~*r activities within the sturdy American tradition which seeks the beautiful which is also useful. George Wa~diington and Thomas Jeff son may have disagreed politically. They emphatic*tfly agreed, however, that a garden was one of the most "rational" of pursuit~ because, while throwing glow of color and charm on everything around it, ittalso provided food for the body and a place ofrépose and refiectioti for the Uth41. May this tradition of sefulness guide all o~ir beautification work, inc1ud~g that specific important form of beautificatio~i, the retention and rehabiitati4n ofour buildings of spect 1 historic signifteance.~ I I hope tba~t many Am~rieans will read thl$ thoughtful and spirited vo ume and consider ser~ously what they can do to h~p bIIIfg its `message to f lfillment. The report points out that a number of Ifiuropean countries have 1 rig since undertaken extensive programs for protecting the national heritage n highly practical ways. We, blessed with so exciting and meaningful a herita e, should hardly be less active. LADY BIRD Jo NSON. Mr. Giu~r. The information, to be ~recisc, as though it m ght be, Mr. Widuall, is that about half of th~ buildings, half of th 12,000 buildings listed in the historic AmeHc~m Building Survey, h ye dis- appeared. ~ About half of the 12,000 w~iich were listed-~-but of course, this doesn't include great numbers of Istructures and historic places, sites, whicl!i never were li~ted, whicl4 also have gone beyo d any recovery. ~ Mr. WmNALL. What are the appare±~.t needs, and one of th things we are tryilig to do is to have a Nationail Registry so we can in entory what we have. Mr. * Gn~&r. In my judgment, that i~ the first step, Mr. Ch irman, bacu~e thereafter anything you try to do has a * measure. It ill be possible, then, to make legislation whi h involves housing, ur an re- 980 ~EMONSTt~ATION CITIES ` 1JRBAN DEVELOPME * Mr. WThNALL. If you do have it, hill you supply it for tl~e record? (The information referred to follo*s:) 1 PAGENO="0399" DEMONSTRATION CiTIES A newal, highways, General ~er~tices have been identified and they will eral projects threatens destr~ict1on. One of the problems has been, a ~ I for example, with respeøt tç~ public acj has been badly criticized a~d, in : destroying part of our natiôna~ he: t g~ has been that Public Road~ w~uld p to ~et rights-~of-way and m~ke thei ~ vation movement, have cc~me for ~ destroy a structure, when ~t i~ at Ii ~ registries established and functio I g to disappear, because all ~`~eral a ~ have access to such a regis1~er. So I be Mr. WIDNALL. As I und~rst~nd ~ ~ preservation there are ar~as of Ii 1 , istration and also reconstr~iction. 1 ~ areas will be covered and i~ia~ be ~ p not true Mr. Gi~r. I believe that ~s right, $i Mr, RAINS. Mr. Widi~al~, could I ~ give me-if I go back and ~nention ~ e I don't know how this ~an be d ~ with reference to historic ~reserv t or~ vidual who owns a house ~uilt in ~ 00 that ought to be preserved as pa~ f if he goes in and improv~s t~iat o his taxes go up because h~ hits m ~ e the value. That should n$rer be w~t i that will be marked undei~ th~ his o be given tax credits if we are goi~ g realize that the testimony~ of wh~ ~ [ exactly to this committee,~ I woul [ h~ to the Ways and Means Cc4mmitte ~ to giving tax credits for i4ie peop~ e wi rehabilitate one of these landma 1 ~ of putting a burden on to ii~crease $: e~. Of course, I would assur~ie when y ti to repair it and rehabilita~te jt in 1~ ~ tion itself. But I hope yoi~ gi~e so ~i t it was in England, Mr. qray, in ~ forth. In some of the c~unfries e The National Historic Tr~ist in ti 1 in England. It is a treme~ndo ~ o~' through the National Ti1ist tha he old palaces and great histpry of : gl~ buildings, architecturally ~eatitif 1 n( There ought to be some tax cre I the committee to say this before. h tion written where a pei$n i~i th ~ to the National Historic Trust or o RBAN I~EVELOPMENT 981 inistration-these places will in advance when some Fed- think itis fair to say this- , the Bureau of Public Roads c~ases justifiably, I think, for . The problem in some cases ~re a route some place, begin :s and then we, in the preser- and said, you are about to ~th hour, and if we get these :his problem will then begin cies, State and private, will ievethis is the first step. eds and objectives of historic nd rehabilitation is one, reg- as envisaged that all of these I by this legislation. Is that back-if Mr. Gray will for- ax situation again? ret it is one of the sad things We take some private mdi- and it is the type of that day tir historic heritage. Today, ~ spends his own money, then n improvement and increased spect to a building, a structure, landmark. I think he should induce him to do it. While I m saying now does not apply ~e that when we do present it t; consideration would be given ) would, on their own, restore, hich will be marked instead ~t to that he would be required ng with the original construc- ought to that, because I believe 1 they give tax credits and so isited, I foun4 that was true. intry should become what it is ~anization in England. It is . have preserved many of the ad-~the fine homes and the old ~i I realize again that this is not ~`e ought to be some tax legisla- ntry could make a contribution hey would like to preserve. I 01 PAGENO="0400" 982 I DEMONSTRATION CITIES AN1~ URBAN DEVE.LOPME Mr. BARRETT. I think what you are referring to is the act that when there are some improvements ~n any property, the r al estate tax assessors come in immediately an~I increase the assessme t. Mr. RA~NS. That is wh~t I am refer~ingto. Mr. B~rnu~. You mean that if a ~person lives in a histo ic house, and if hel does not change the ch~r4ter of the house, then e ought to be give~a consideration for the exp~iditures in keeping up he place. Mr. RA~NS. That is what I mean, $~xactly. That is correc. But I would also like to see estate~ in this country able t convey to the National Trust some of these wonderful properties a d not be eaten up with taxes. What is the sittation, Mr. Gray, as to hat can be done about that now ~ Mr. GRAY. Mr. Chairman, I shoul4 say, first, the National Trust is a tax-exethpt organization and, in brief, has qualified for th 30 per- cent dedu~tion, and thus, gifts to the ~National Trust are no exempt for incom4 tax purposes. * But we pave no arrangement in thi4 country similar to wh attains in the United Kingdom. There, as y~u know, where death uties, as they describe them, are more onerous than ours, the owner f one of these great properties dies, and aftet his estate is evaluate , which largely in many cases consists of the ~property itself, there i no way to pay the death duties. So that in 1~ngland, they have dev loped a system under which a great historic hduse in such circumstanc s would be taken by the Treasury in lieu of tax~s and conveyed by the reasury to the Engilish National Trust. They al~o have an arrangement, th~ough, in these situatio a which permits this family to continue to live ~n the house with certai obliga- tions impo~ed upon them such as opcnif~g the house on a reason ble day to the public, usually in that countri~ from May until Octo r, and so there is a public benefit which deriv~s from this tax arrang ment. While we are on the subject of taxeS, Mr. Rains has referre to the reward, as it were, that we now give to people who own h uses in letting-and letting them run down 1~ecause the reverse is a penalty for putting them in good condition. There are tax provisions, I think, tI~at should be considere by the Congress. ~ I think there should be de~yeloped the concept of istoric easement$ `4vhich might be granted, eitl~er to a local governmen al unit or even im~eed to a private organizat~on such as the Nation 1 Trust which would be tax deductible. W$ started on this prin&ple on scenic easements but there i~ no provision, as I understand it ow, for historic easements. I don't want to dwell too long on; taxes, but one other hought occurs to me. In this country, if the owner of a historic property should ish to give it., in ijiis lifetime, to the National Trust, for example, hi gift is tax deduct~ble on a strictly actuarial asis if he hopes to li e in it until his d4ath-if he hopes to reserve it for. the lifetime of is chil- dren. I fe~l, and I speak also for th . Committee in this ca , that when a tru~ historic house should be gi en to the National Tru t, even though a life estate is reserved by the . ecupant, by the donor, that it might qualify for full tax deduction a d not on some actuari 1 basis. PAGENO="0401" DEMONSTRATION C~TIES AN RBAN DEVELOPMENT 983 These are the kind of tax incentiv s t restore preservation that we thought of, and there are a good m n more thmgs that, of course, can be done. May I just say, also, Mr. Chairm n, this relates to Mr. Wicinall's question to me a few minutes ago. I ost of the European countries preservation is done entirely by g v nment. In France, there is some private effort but otherwise os ly on the Continent it is all governmental. * I was struck with r Rains and many of us who visited Austria, and I discussed it i h the officials in Austria, the preservation officials-the question f oluntary cooperation in these matters and they didn't understan hat I was talking about. In this country I think it is fair to say th t over 60 percent of preserva- tion effort is in private hands and thnk it should continue to be in private hands, but the Government sh uld support it. Mr. BARRETT. The time of the gen le an has expired. Mrs. Sullivan? Mrs. SULLIVAN. Just a few questi ns, Mr. Chairman. Mr. Gray, doe~ not the United St te now have a National Register for historic buildings? Mr. GRAY. Yes. Mrs. SULLIVAN. For the record, te 1 s where it is located. Mr. Gi~Y. The Park Service mai ta'ns it. Mrs. SULLIVAN. The Registry for Hi toric American Buildings? Mr. GRAY. There are two pro~r * , Historic American Buildings Survey and the Register of Hist ri Landmarks Program, which actually involves certifying the p op rty or a case in putting up a plaque and so forth. But these t uc only on a limited number of cases that should be saved in this co nt y. Mrs. SULLIVAN. Tell us how the r perty or the house or the ob)ect or whatever it is gets on the Regist r aintained by the Park Service. Mr. GRAY. As far as the Regi t f Landmarks is concerned, the Park Service has a body-I thin t i called an advisory group which has compiled in differeut catego i s American history those places and sites which should be mark d. t would be those related to the Indians, for example, and to the v lutionary War movement. And also to phases and periods in r istory. I am unable to speak precisely to the extent to which a has been completed and it is a fine program but it doesn't go f r enough to accomplish what we think should be done to put the i print-to put the Good House- keeping Seal of Approval on all t e tructures that need to be saved. Mrs. SULLIVAN. In other wor s, this Committee looks into the historical background, rather t an the architectural value of the property? Mr. GRAY. Well, the emphasis n hat particular program has been historic and I might say, Mrs. ulFvan, my experience in this city has been that it is better to say h n you don't know something, to say you don't know. I think it is based primarily on historics. I doubt that they pay too much a te tion to architecture, although in the Historic American Building ur ey, it is architectural. Mr. Garvey serves on the Commtt e. PAGENO="0402" 984 D~EMONSTRATION CITIES AN4 URBAN DEVELOPME Mr. ~ B~i~m~rr~ Will yon be kind e ough to introduce yo rself for the reco~ ? Mr. Ebtiv~y. I am Robert Garvey Jr., executive directo for the NationaiTrust for Historic Preservat on. The theme of architecture withii~ the registered hmdm rk pro- gram is under study as is the then* on education. This rogram will also mark sites Gf culture as well as history and there re, I be- lieve, about 25 different themes and ~the program is roughi three- fouxths finished. It is anticipated t1~at as time goes on, ot er sites, structures will be found and added t~ each theme and the rograin is now lin~ited to the finding or marl4ng the sites rather tha * giving them pern~anent protection. j Mrs. SIITJLIVAN. My knowledge on~ this subject is limits to the experience~ we have had with a buildi4ig in the central part o down- town St. Louis that you may be familiar with. This is the id U.S. Court Ho~ise and Custom House. An effort was made to ave the building registered, but it was not co*sidered historic. Mr. RAINS. You have a champion ~iere on that building. Mr. Gi~r. I hope that Mrs. Sullivan views that in the same ight. Mrs. SUlLIvAN. The thing that I wanted the group who ere in- terested in saving the building to do-~hen the decision has be n made to tear tli~ building down and build ~. new building on tha site- the first thIng that I advised them `wa4 to go to the Interior epart- ment to see if the building could be ~egistered as a historic site or as one who~e architectural designs shoi4ld be preserved. Inter or told them that they did not quality for adi~ii'ssion on the register or his- torical sites which is, to my knowledge~ the top register, but t ey did say that the building had sOme architectural value. There was a great deal of confusion in St. Louis about that. Mr. Gi~y. I speak as one interested~may I speak to that ? I win quite familiar with the Old Post 0ffi4 Building, and I desp rately hope that tb~ will be a way found to s~ve it. The pr~em here in this case, Mrs. ~Suilivan, is that the n tional registeredlt~aidmarks program has not listed any Govemment~ wned buildings asja registered landmark. Ii4ependence Hall is not a regis- tered landmark. In some time, as a resuit of this legislation whi h will be before the various committees and I nope before the Congr s and Senate, Ho~ise and Senate-such a situation could not take place. Now, it is arguable whether the old post~office is historically an archi- tecturally important enough building 14 be registere~d. I belie e it is but the opponents of saving the old pos~~ office don't always poi t out that it isn't ~on the register, or is Independence Hail, or any other . federally op4~rated building. There ought te be a federally wned register-a i$~gister of federally owned ~uildin~s and if thisl sla- tion adopted~ across the boa~rd I think $here will be. I don't now whether this~answers your question. * You have seen the report. of the. Advisory Committee to the ecre- tary of the Interior which says the buil4ing ought to be saved, ut it doesn't qualify sufficiently as a national landmark. The Corn ~ttee which makes up the list of registered iiational landmarks h not addressed itself yet to Federal buildinga PAGENO="0403" 985 DEMONSTRATION CI~IES D U BAN DEVELOPMEN1~ Mr. RAINS. May I internlpt here t s: y that the bill which is H.R. 13792, which is before the Committe~ n [nterior and Insular Affairs, does provide that Government buildi g will be on the regis't~r and the register that Mr. Gray is talking bo t, of course, is in the legisla- tion, Interior, instead of in this bill. h re is a provision in this par- ticular bill by Mr. Widnall before th Ii `tenor Committee that would put those buildings on the national e isi r. Mrs. STJLLIVAN. I know this bill t i t ~ ou mention on page 4 of your testimony, Mr. Rains, would establi ~ a Tational Register of Historic Sites, but there is much confusion a out what the registers are, and what they mean, and what one ha~ o do to get certain buildings or objects listed. I wonder, at this p ~i t, Mr. Chairman, if something could be submitted for the record that we know what the various registers are and how they differ. Mr. RAINS. That register now, a i the people who make it up, are only advisory. But under this la~ i would become more specific be- cause they are only advisory now. Mrs. SULLIVAN. It would need 1 g slation? Mr. RAINS. Correct. Mrs. SULLIVAN. I wish you oou d Mr. Gray, with the chairman's permission, let us know what the istoric American Buildings Sur- vey of the National Park Service r presents, and what the National Register of Historic Buildings co * rs, and what the register is that you have under the National Trus or Historic Preservation. Mr. Gi~r. I would be very glad Mr. BAmu~rr. That may be don ~ ithout objection. So ordered. (The information requested foll ~ s:) NATIONAL . tJST FOB HIsTORIc PBZSBRVATION, Wa8Mngton, D.C., Maroh 22, 1966. Hon. WILLIAM A. BAi~TT, Ho~use of RepresentaUve8, Washington, D.C. DEAR MB. BAiuirrr : We appreciated h opportunity of appearing before your committee yesterday and look forward o any fUrther assistance the National Trust can provide during the considera ion of HR. 13790. In response to the question Mrs. Sulli ai raised concerning registration and identification of historic places, I attach t rc documents-two from the National Park Service and one from our own repri t s ries. In the reprint, "State Partici- pation in American Landmark Preservat on, ` there are two paragraphs on page 211 that explain programs now in oper tb . It seems to me that these para- graphs are sufficient for your record unl ss ~ou prefer to include the more corn- plete description contained In the Park er ice folders. We are enclosing copies of these doc me ts for distribution to the full corn- mittee. Sincerely, L [1 ~ GORDON Ga&~, Chairman. PAGENO="0404" State Participation NEW Yoiu STATE was the first agency, public or private, oflI~ia1ly to preserve a landmark in the United St~tes. On July 4, 1850, General Winfield &ottlcame from West Point to New- burgh to raisej the flag over the first historic house museum~ in the United States-~the Has- brouck 1:Iouse~ which had served as General Washington's headquarters from April 1782 to August 1783. In 1848, under the United States Deposit Fund, it had been acquired from Jona- than Hasbrouck, II by the Commissioners of Orange County. The Commissioners, in their desire to preser~'e the 1750 house, appealed to Governor Hamilton Fish. He recommCnded in a message of 18~O that the venerable building become a state property, and a bill was passed making the stat~ acquisition possible. With this ac4ion, New York not only pre- ceded her sistâ states into the preservation movement, but also the federal government, whose first acquisition was Casa Grande Na- tional Monument, Arizona, in 1889. New York's was also followed by the first private endeavor, represented by the Mount Vernon Ladies' Association in Virginia with its rescue of Mount Vern~n in 1858. Almost a century 210 lai~er, the National Trust for Hist nc Preser- va$ion accepted its first historic ho se, Wood- 1a4!n Plantation also at Mount V rnon, Vir- gi4ia, in 1951. p ther state action followed th t of New York, but over the years New Yo k and the stafrs have not maintained their lea , although ma~iy states have sizeable budget for state- ow~ied landmarks. New Jersey, fo example, speIsds approximately $400,000 a ear on its historic sites. According to the State Bureau of Pai$ks and Recreation, half is privat donation an4 half is state budgeting, and the t tal would ris4 considerably if much of the ii e spent to m4stain the sites wCre not donated 4t a September 1965 Preservati a Confer- enc~ cosponsored by the National rust and ~ol$nial Williamsburg, it was gener lly agreed tha4 although there was a variety f private andlfederal projects, the states were agging in development of programs to pro ect land- marjs. In addition, an ironic note wa sounded witch New York was branded by a p rticipant as "~ne of the fifty states which had done the leas for the preservation of its hist1ry." 986 ~EMONSTRATION CITIES URBAN DEVELOPMEN [From State~ Government, Summer, 1965] In this article.Robert R. tGarvey, Jr., Executive Directo of the National Trust for Hist4ric Preservation, urges a large increase in state action-along with Arivate efforts and local and nat onal gov- ernmentalprograms-to ~ave historic landmarks in A m rica. After indicating the scope ofpr~vateandgovernmentalactivit in this field up to now, he emphasize4 the importance of surveys, en bling legislation and financial âid as essential parts for a succe sful state program. I in Anierican Landma4 Preservation by Robert R. Garveyt Jr. I PAGENO="0405" 987 DEMONSTRATION CiTIES RBAN DEVELOPMENT MERICAN LANDMA1~K PRESERVATION 211 nd udget. But it will undertake studies in rea facing particular problems in conserving hei architectural heritages. ~ e program of the council and these sur- ey~ are sound, and they are typical of many ht~ ghout the country. But they are only part f w at is needed: a very large and thorough ur+ y to locate, identify and study all historic t*il ings in the United States essçntial in o~ ulating a successful, nationwide preserva- ióñ program. Studies in such a survey would ro ide data needed to evaluate buildings and 0 ~ an intelligent historic preservation before he~ ecking ball swings. 4 chitectural surveys were begun systemat- ca~ in the United States by the federal gov- err~ ent as a Works Progress Administration pt4~ ect during the depression, but few have be~ ~omp1eted. Of these, most are not current. Ti~ National Park Service, in addition to deal- ir~g with its vast preserve of lands and historic Site ~ conducts the Historic American Build- ifl~ Survey, a long-range program for assem- bU g a national archive of historic American arc itecture. Today it is one of the world's lai~ est collections of its kind-with more than 27 00 measured drawings, 87,000 photographs an 6,000 pages of architectural and historical dat for approximately 10,000 historic build- in throughout the United States. nother National Park Service program con- ct~ ent with the HABS, authorized under the sá e Historic Sites Act of 1935 which author- i~ it, is the National Survey of Historic Sites ar~ Buildings. Under this survey the entire f~l of American history and prehistory is ~t~i ied by themes, making possible a compara- ~ evaluation of sites. The criteria relate the it~1 ortance of the sites in history and analyze th ir integrity or present conditions. A product o1~ the same national survey, cosponsored by th National Trust for Historic Preservation, is tb Registry of National Historic Landmarks. `t rough the registry the federal government re( ognizes significant historic sites; their preser- v~ ion by private, state and local agencies is e~i ouraged. he Historic American Buildings Survey h $ had a seesaw type of career during its thirty RECENT AND CURRENT SURVE S Actually, New York State had a ye~r ea~lier instituted an architectural program ir~ its ~ew York State Council on the Arts whic~i shQuld help offset this charge-and, hopefull~, en~our- age similar action by other states. S~on ~fter the council came into existence, it~ received letters and calls about the threatened ~tnd ~ften imminent destruction of buildings c~nsi4ered worthy of preservation. "The Cou~icil'~ re~ sponse," reports William Hull, its Assi$tant Director, "was one of agreement an~l encour- agement which, in several instances, ~ielped to deter razings until a thorough study~ cou'd be made by the local communities in qt~estión." A technical assistance program ~ras 4evel- oped to deal with the insistent prol~lem~ and the category of architectural conserv~ttion and survey was added to its services. T~ireatened buildings brought to the council's attelition are now referred to an architectur~l or state historian, who is asked to appraise th~ structure in question. The report of this sj~ecia~ist is placed in the hands of the local g~oup con- cerned. The council's first programmed ar~hite~tural survey was undertaken by the Syracuse U4~iver. sity School of Architecture. It was asked tb pro- vide a study of "Architecture Wor~h Saving" in Onondaga County, to anticipate the prob. 1cm of the razing of significant bui~dings in a typical city-dominated upstate cou~ity. Grad- uate students documen*d and com~ilec~ a list of the buildings from which app~oxithately sixty examples of structures with x~.ierit were finally chosen. With a continuing emphasis on urban re- newal throughout the state, the Cot~ncil bn the Arts instituted a second "Architect~ire Worth Saving" study in Albany and Renss~laer Coun ties, by the School of Architecture~ at Rensse laer Polytechnic Institute. The coi~ncil hope that guidelines will emerge from th~ two differ. ent approaches to the problems of as~chit~ctura conservation. Althiugh the counc~l is ~onsid ered a strong and well.financed org$niza~ion, i reports that no statewide architecthral surve is practicable within the limitation~ of its tim 60-878 O-66-pt. 2-26 PAGENO="0406" 988 DEMONSTRATION CITIES AND URBAN DEVELOPME V y~ When this six-year project w S concluded i 1957, with 300 buildings desi ated worthy ot preservation in the city's five oroughs, it w~t 5 also noted that nearly a third f the build- iI*gs scheduled for the listing ha been torn down while the survey was being ade. After three years of study, New York ity adopted p4eservation measures this spring, but during t4s period, as one summary put it, "her build- inks continued to fall like leaves." II, ublic funds effectively manage will gener- a4 several times the appropriated amounts in n4w private support, as they have d ne in busi- ne~s, science and agriculture. Jus as private an~l public support exists for libra ies, health setvices, education, scientific resea ch and the petiforming arts, it is appropriate hat public support be available for the prese ing arts- bnpadly known as historic preserva ion. Many groups and individuals a e available to Ssist in such work, and many have con- du ted surveys-historical societie , preserva- tio groups, universities, the Ame ican Insti- tu of Architects Preservation Corn ittee and its oqtl chapters. Many efforts, ho ever, have Ho ndered in well-meant attempts, frustrated be4tuse of the extent of the work a d its corn- ple)dties of research and identificat on. When thejoint Landmarks Committee I the Na- tioi~al Capital Planning Cornrnissi n and the Coi~inission of Fine Arts set out to inventory Wa~1iington, D.C. landmarks in th spring of l96~I, it had to coordinate fifteen list resulting fro4i that many earlier attempts. 14t addition to being culturally s gnificant, the~ historic and architectural lan marks are the hold-bearing ore of the tourist ndustry- bot4 domestic and international. Th y must be mir~d on the basis of a professiona, orderly, systámatic study, as any natural resou ce. PRI~SERVATION LEGISLATION A~ the survey is the first essential in a success- ful preservation program, the secon is legal pro4~ction which can be obtained thr ugh state enal~iing legislation and local ordina ces. His- tori4 preservation legislation was u held na- tion~lly by the United States Suprem Court in Ber4zan v. Parker in 1954. But, although 212 STATE C~OVERNMENT SUMMER, 1965 years, and it o~erates today on a modest annual budget of a~roximately $170,000, or $3,400 for each of the fifty states. (For $3,387.52 the New Haven, Connecticut, Preservation Trust recently conducted an inventory which identi- fied 750 buildings, and from these selected 150 New Haven landmarks.) An HABS request for a budgetary increase to $260,000 has been made since 1960 but this has never been allocated. Because of tb4 lack of funds HABS ~s reduced principally to giving advice and aidsto others undertaking s~irveys, keeping records, and as- signing severs~l summer measuring teams to areas and buildings of national importance. STATE-LOCAL-PRIVATE TASKS This highly regarded federal program, in my view, should be strongly augmented finan- cially. But to achieve the needed goal-survey- ingof a11histos~ic American buildings-the task will have to berlividedwith the states. I would suggest that the states investigate the technique developed oves~ the past thirty years in the fed- eral work, foi u~e on the state level. After evalu- ating the needsl each state should initjate, reac- tivate or extend a state survey program, dde- gate an appropriate agency within its system to take the responsibility, and coordinate and di- rect related private programs. In 1964 the state-financed Maryland Histor- ical Trust and the Association for Historical Societies of Maryland asked for HABS assist- ance to cievelop.a comprehensive program in the state and co4~rdinate county projects. HABS cosponsored an ~especialy arranged workshop- "ASurvey of l~stoHc Maryland Buik~ings and Sites;" two HA~1S staff members spoke at the conference. Th~y presented a list of all Mary- land buildings aiready recorded and surveyed, displayed a selected photographic exhibition, distributed survey forms, bibliographies, man- uals, etc. Similar assistance is being given to the n~wIv orgarnzect Massacflusetts instoricai uom- mission and to afl states requesting such aid. States should ~hare the financial b~tden of the surveys and induce the counties to partici. pate withmatd~ing funds in order to under- take prograrns~ar~dcompkteothers.Ath'amatic illustration of th~ needisa New York City stir- PAGENO="0407" Charleston, South Carolina, developed con- . trols as early as 1931, only fourteen states toc~ay ~ have enabling legislation, and only ~ever~ty ~ municipalities protect their buildings ar~d areas under ordinances, acts and resolves. ~ In 1962 North Carolina's State Dep~rtm~nt of Conservation and Development use4 a "VOl Planning 1 ~ survey the historic area of . Wilmington, as a part of the future l~ind.~sse plan. The study identified thirty-five st4ictu~es ~ as worthy of preservation because of t1~eir l~sis- torical and architectural importance. `the area not only contained these scattered h~storical ~ buildings, but many community facili~ies and ~ ~ other houses constructed after 1900 which con- ~ tributed to its character. The entire aria had a ~ homogeneous nature, and the report, recóm- mended that organizing it as the "Wil~ing~on Historical District" would help pres~rve its ~ identity. ~ The study also proposed an amend~nen~ to the Wilmington zoning ordinance to ci~eate the historical buildings district, establish reg~sla- tions for the preservation and protectic~n of the buildings and provide for creation of a board of architectural review. This amendm~nt sub. I sequently was adopted. The report fu~thei~ in- . dicated need for additional state enabling l~gis- . lation to empower local governments ~o pl~y a stronger role in preservation-perfnittibg tl~em to acquire structures about to be der~iolis~ied and to grant tax exemptions in certair~ case~. It emphasized preservation as a cooperat~ve e1~ort of individual property owners, local gov~rn- ment and community organizations. FEDERAL-STATE COOPERATION Bureau of Outdoor Recreation. Directly and indirectly the cause of historic pre~erva~ion ~ .. can be greatly advanced through fec~eral aid. With the establishment of the Interio~ Depart- ment's new Bureau of Outdoor Recre$tion~ the federal government has issued an inv~tation to the states and other entitiesto work ~rith.~t in "the race for inner space." The broad ~pect~um `Grants for two-thirds to three-fourths of the cost of pre. paring comprehensive urban, regional and state plai~s are made by the Urban itenewal Adminh:..~tion of the H~using and Hone Finance Agency under Section 701 of~the Federal Housing Act of 1964. 52 pective outdoor recreation opportuni- volved includes historic and cultural of the aspects is provision, jmder the nd Water Conservation Fund which be- fective last January, for matching grants states to stimulate recreation planning, tion and development. States may allo. rtiotls of the money they receive to po- subdivisions. ng many state preparatory actions re- 0 the work of the Interior Department's L of Outdoor Recreation, Virginia has its Outdoor Recreation Resources ission, with a subcommittee on land- Ideas reported from this commission in- plans foy a novel highway system to en- e travelers to reach destinations by ` more roundabout routes. Reversing the :oward high-speed freeways, the Virginia I Coordination Committee disclosed re- that it is preparing a report on "shun- -scenic highways designed to avoid turn- and capture more tourist time and dol- cenic easements * along such a highway be obtained~ using a tax deducationprin. otnake them more easily available. Platzning Grants. 701 Planning Grants e obtained to plan statewide outdoor rec- n programs. North Carolina availed itself h a grant to prepare a "Strategy for Dc- aent," and a resulting study concluded in iber 1964: "State policies in nearly all are affected by federal assistance, yet all. equently we are unaware of the impact S aid. So long as the state passively accepts 1 programs, instead of planning for their Se, North Carolina will not realize its full . in the federal system. When the state plan creatively for its own future, as in se of North Carolina's `war on poverty,' Serve as a model for the entire nation." A er of cogent recommendations for plan. were made inthe report. en-Space Land Program. Federal-aid for preservation also are to be found in debook, Manual and Foci Sheet on the Bureau of Dr Recreation may be requested from the Department Interior, Washington, D.C. 20240. r DEMONSTRATION CI~IES AJ~l V BAN DEVELOPMENT 989 4 uRbAN LANDMARK P1tESERVATION 213 pro i i~ f c~a to ac li çr C c p )rit- rid tie the ka~ A~i ed re~s at~ ili~ tl~s d~ tiri~ w~ rai~ nt~ ke~ rs. ulçl pi~ 70 a~ ati st~ lo~ ph, ~k~s ~o f U! d~ eSt IC ui~i iii p c c r 0 V S ,fu~I~ PAGENO="0408" 990 ~EMONSTRATION CITTh~S AN 214 STATE GOVERNMENT * SUMMER, 1965 the three-year-old Open Space Land Program of the Urban Renewal Administration. In Au- gust 1964, Commissioner William L. Slayton announced that more than 100,000 acres of valuable uii~nopen-space land had been saved for present 4id future generations in 177 com- munities thr~ughout the nation since this pro- gram was ix~itiated. It authorizes the federal government ~o make grants of up to 30 per cent of the cost ~f undeveloped land for recrea- tional, scenic, historic and consei~ation pur- poses- Those made to assist in the preservation of historic sites and areas of natural scenic beauty have included grants to Columbia, South Caro- lina, to assist in acquisition of Ainsley Hall Mansion, of importance in architectural his- tory; to Ale,~andria, Virginia, to assist in the preservatiOt~ ~f Fort Ward; to the State of New Jersey to hel~ acquire Monmouth Eattlefield; to Roanoke, Virginia, to help acquire 1,060 scenic acres in the Roanoke Valley; and to Port- land, Oregon, to acquire the Pittock estate, with a fine view of the city and the Cascade peaks.8 Area Redevelopment Funds. In its efforts to provide long~term permanent employment, the Area Redevejopment Administration is also advancing hi~toric preservation. At Pleasant Hill, near I4xington, Kentucky, a group of citizens succe~ded in purchasingan entire early 19th Cennit~ Shaker village, Shake~town, by amortizing th~ payments for the property over a ten-year period. Having once secured their option, they appealed to the Area Redevelop- ment Administration for a low-cost, long-term loan to assiSt in the project. The agency is not interested itt preservation but in tht creation of jobs in depressed areas. Pleasant Hill, lo- cated in one of these areas, received a public facility 1oano~ $2 million. It is estimated that the restorati$ will provide 285 ne~ jobs and will beviited ~y 150,000 tourists by ~)70 A technical4 assistance project to determine the economic feasibility of the restOration of `Other ways in Which preservation and urban renewal may interact are discuesed in Historic Preservation Through Urban Renewal, an illustrated booklet, published by the Urban Renewal Administration, United States Housing and Home Finance Agency. Ste. Genevieve, Missouri, and to .evelop a res- oration plan for it, was announ ed in Decem- )er by the ARA. Its investmen t of approxi- ately $30,000 is to be supplem nted by local irids, the project having been requested by IC Ste. Genevieve Tourist Burr u. Cooperation with Bureau of ublic Roads. us cooperative programsof fed rivate groups. In May 1964 the epartment of Commerce anne Bureau of Public Roads Policy de i~ect parks and other recreational i4esources in the location and co ~deral-aid highway projects. Fed 4 dministrator Rex M. Whittoi 4'ould be the responsibility of ea %$r ay department to give public j$xrisdiction over these resources Ijity to review federal-aid high 1~1 ent plans. The state highway de akided, should make contact with att the earliest practicable time, pr i~kg the preliminary stages, but in j~rior to the holding of a public h i~nerested persons a chance to be ~4ned federal-aid improvements. I If officials of the public agencies ~4ith the state's proposed plans, e*plained, the rCason for disagree i4duded in the highway depat-ti s~ecifications and estimates for n$itted to the Bureau of Public I p~oval. It is the obligation of the s, department in all cases to show si4eration has been given to sugges bj~ the public agencies in question a*plies to possible effects of propc p ojects on forests, park and other h tone, scenic and wildlife areas. Five years ago, long before M a nouncement of the federal poli C nnecticut established such a coo g irn on its own initiative. Its High 1] SU appointed a liaison member historical groups in the state to a*are of proposed new highway c A~number of specific successes ha S~veral old structures have been sa ) URBAN DEVELOPME~ r I ral, state and Jnited States inced a new ~ igned to pro- nd historical struction of ral Highway declared it h state high- gencies with an opportu- ay improve- artment, he LC5C agencies ferably dur- all instances aring to give card on pro- I So not agree `r. Whitton ent must be ent's plans, rojects sub- oads for ap- ate highway at due con- ions offered The policy ed highway ecreational, ~ Whitton's y program, erative pro- ray Depart- 0 the major keep them nstruction. `e resulted. ed through PAGENO="0409" I transfer of ownership and removal to new sites -Leffingwell Inn, Norwich, Dudley 1~ucki~g- ham House, Old Saybrook, and the G~ver~ior Fitch House in Norwalk. The Goodsp~ed ~p. era House in East Haddam, which l~as b~en used as a Highway Department record~ reppsi- tory for a number of years, was given to~a gr~up of local people who restored the Victorian showpiece to its former beauty and use~ MANY APPROACHES ARE PERTIr~~EN~ Historic preservation can be apj~roached from many directions and in relation ~o many programs. A successful preservation frog~am by anyone or any group, for any are~s of any size, should include: 1. A survey and knowledge of the exis~ing inheritance, through study of architec ural and local history. 2. Legal protection through state ~nab~ing legislation, if necessary, and local ord~nan~es. S. Financial assistance, private or go'~ern- mental. 4. A permanent plan to continue tl~e su~vey, interpret the laws, and cooperate `~vith the broader community, thus bringing con~tant reevaluation, as the community ch~nge~, of tBAN DEVELOPMENT 991 SERICAN LANDMARI( PRESERVATION 215 as been inherited and recorded on the 11 of this, state leadership and action are c importance. As summarized in A Re- n Principles and Guidelines for Historic ~ation in the United States, published by ational Trust for Historic Preservation ar: "Every state should recognize historic vation as a legitimate purpose of govern- and should have legislation on its statute clearly placing administrative respon- I' for the state's historic preservation pro- upon an appropriate state agency, and ring upon that agency adequate powers nds to conduct surveys, acquire and ad- ter historic properties, publish informa- and classify, register and mark historic nd buildings having state-wide signifi- ~ regardless of ownership. The state pro- should be coordinated on the one hand local voluntary and governmental efforts, n the other with collateral national pro- S.', list of publications designed to aid in rvation may be obtained from the Na- 1 Trust for Historic Preservation, 815 Street, N.W., Washington, DC. 20006.) r DEMONSTRATION C~TIE~S AJ I -ry at In 1~a rt e$~ el Sty e~4 en~ ol~ bill an~ nfe c~ ,f mi t~s LI~ i~h nd ail (A rè~ io~t 7tI~ S I, c a PAGENO="0410" 992 I~MONSTRATION CITIES AN ) URBAN DEVELOPME~ Mrs. SULLIVAN. I am not going to get into an ar~umen between our two newspapers in St. Louis, as to whether the building should or should not be saved. Those who ai~e expert in such matte s should help make the decision, based on factsjand expert opinion. Mr. Gi~y. The building still stand$, at least up until now. Mrs. S~ruavAN. Yes, it does. I si4icerely hope the contro ersy can be resolv~d, for it isbitterly fought injSt. Louis. Mr. R~iNs. You mean you are inithe middle of two ne~ spapers? That isa~ good place for a Congressmidn to be. Mr. Gi~&r. When we were on the ibur-when Ray Tucke -he had been on the other side and finally I h~d to agree that we wou d declare a moratorium on it. Mr. BAmrr. The time of the lady ~ias expired. Mr. Harvey? Mr. }Lu~v~r. I just want to join ~s4ith our committee in ~ elcoming back ouri distinguished colleague, o~ir former chairman. Al, it is nice to ha~re you back with us. Mr. R~NS. Thank you, Jim, I app4~eciate it. Mr. H~Bv~y. I could not help b~ think in listening to the dis- cussion `that perhaps all of this couM turn the balance-of- ayments problem into a plus. The heritage of Europe seems to be wha attracts tourists. It is one of the reasons we have trouble keeping ou tourists here at home. Maybe it will turn into ~ plus. I have one question, Mr. Gray. Where historic preservat on is al- ready in the hands of good private bo~iies, what action would you rec- ommendthat we take? Mr. Gn4r. Not any, sir. If they a~e good, stable, privath bodies- I tried t&say perhaps not too a littI~ earlier, that most of t is work should continue to be done by private jndividuals and foundai ions and corporations just as most of our wholb society is private. I t iink the genius of American society has been ~ the partnership of goi ernment and the private sector. Where a property is well taken care f in the hands of a stable organization, I wouldn't touch it. It is o ly those that are threatened that we are conderned with. Does tha answer your question? Mr. H~i~v~y. Yes, sir. Mr. RAINS. In connection with th~at and supporting Mr Gray's good state~nent, it is not the intended purpose of this legislatio i just to establish rkiusewns, but w~ actually l~4ope to be able to do ~ hat Mr. Gray said with the legislation to encbura.ge private people ~ho ran them to do the things nece~ary to reI~abilitate and restore oi y those that would be in danger, as Gordon said, a while ago fro i being destroyed. Those would be the ones that would ~take this position. I ti ink you will find a great deal of encouragement in the legislation to th person who owns one of these establishments t~ do something about it himself once it is named as a landmark. Mr. H&i~v~r. I thafik you both v~ry~much. I have no furth ~r qu~s- tions, Mr~ chairman. Mr. B~uth~rr. Thank you. Mr. Reus~? Mr. REtr~s. Thank you. I want to join all my colleagues hei~ this afternoon. I wa one of the some 585 Members of the House and Senate who regret ~d very PAGENO="0411" DEMONSfl~RATION diTm~s much Albert Rains' retire~ne~t a could not keep a good man ~lo~n an cent contribution that he h~s made thank him and Mr. Gray ai~d I~il1 I i volume "With Heritage So~ Gi~eat.' tainly think it will bring ~ 1$ of have some of the greatest !riters so on do some of the pieces. I ~vill I also commend Mr. Wi~Enall fo him right now my full supportpf it I would have just one qi~est~on (: the relationship between tI~e Widn panion bill now before the House lapping in the grant provision~ to 1 ticularly in respect to gr~nts to historical preservation anc~ grants Preservation to provide fii~an~ial ~ How do those gear into the urban r Mr. RAINS. There is n~thi~ig, before the Interior Commjtte~ th~ under the urban renewal pi~og~am. the fine-tooth comb, there~ is ~iot vided in each of the bills ~i11 ~m1y that particular bill. They ~re com Mr. REUS5. Mr. Widnafl, the urban renewal technique ~vhi~h I and one-third local, is that ~ot rigi Mr. WIDNALL. The inter~t-that~ Mr. REuss. What perce~itage a Mr. Gi~&y. There is a-41 shou tween the two bills in one respect any grants to the .Nation~1 Trust two-thirds-one-third basi~ a~id t vision-I beg your pardo~i. The ~ other committec, the Intthio~ an introduced by Mr. Widn~ll and Aspinall. There are somc~ di~erg ~ particular, in one case, tl4e gx~ant the other two-thirds/one4hi~d. T ciliation between those. I am n t would guess from reading the thr ing that there mustbe som~ mèshi: In specific answer to yo~ir ~ues sion in the bill before the~ ot1~ier c for a project to receive Federal received Federal funds from ano~ ~ go to the Interior and ge~ part ~ get the remainder of the i~ioney. E vision in that bill and shoi~ld 1~e, o: c Mr. REuss. I am concerne4 tha merit and it would not n~ak~ seii e ing that happened to be jn ~n u RBAN DEVELOPMENT 993 e of years ago. I knew you as so good to see this magnifi- tone preservation. I want to 11 for putting on our desks the ake it these are for us. I cer- ~ all of us. I notice that you country, Sidney Hyman and t with a great deal of interest. oducing this bill and promise gentlemen and that concerns uskie legislation and the com- or Committee. Is there over- overnments of those bills, par- governments for projects for e National Trust for Historic nce for preservation projects? d features of the Widnall bill? r, in the bill that is pending ild give any grants that come ile I have notexamined it with verlapping. The grants pro- ! tO whatever the program is in n measures. section of your bill uses the it means 66% percent Federal intent. Interior bill grants? there is an inconsistency be- the bill before this committee, natchin~ ~p urposes would be a tenor bill has a similar pro- ~ two bills pending before the ular Afl~airs Committee. One ttroduced by a request by Mr. I might say in these bills. In proposed in a 50-50 basis and e will have to be some recon- expert in these matters but I ces of legislation already penci- D overlapping, there is a provi- ttee which makes it impossible from one agency when it has In other words, no State could money and then to HED and are mutually exclusive by pro- se, e should be uniformity of treat- , example for a historic build- renewal area to get two thirds I ~cp it. h 1t~ I nt 0 e ii al 1; iSt~ w~p v1 y p~ ltE~ 1 I: C t1~ th s~, or a In 01 re 1e~ a~i pi~ rn~ nd r. th lel he ~, . ~ PAGENO="0412" DE~MONSTRATION CITIES AN1~ URBAN DEVELOPME~ matching.j and one that happened to }be out in the oountry o get 50 percent. ~i: would hope that perhaps~this committee and th Inthrior Committe~, Mr. Chairman, could work these bills out togethe . After all, we haVe done that in matters like ~i~e area redevelopment program of the H~use Oommittee on Public ~Works. And it might even be sound to combine the two bills someI~ow into one, I would h ~pe with the approval of both these committees. However, I am delig ted that at least for 1966 you are doing what ~[ wish we had done m~ iy years ago and there would be many a fine llaülding, including som in Mil- waukee, that would still be standing t~iat are bulldozed down Thank you. Mr. B~$~ii~rr. Thank you very mu Mr. Wi4nall has one or two questio s that he may desire to ask you, Mr. Gray. Mr. WI~NALL. This goes to both r. Gray and Mr. Ra is. The committee on its trips visited everal of the Commun st coun- tries. We all know that ever since the 1920's the Communists have been very anxious to rewrite history a~nd have it begin from ~he time they took power. Is it not true that t1~ey are showing a great zealous- ness in preserving the tradition of histbry of their country in lany in- stances ? Did you not find that? Mr. Gi~çr. Yes. It is interesting th~t those countries-bear in mind everything that is done there is done b~r the government. Bu for the governments to have done what they pave done is very interi sting. As you know, Warsaw was 85 per$~ent rubble when the 4 ermans finally got out of there. The Commu4iist government chose n ~t to re- place all of these rubble with new st*uctures, but in the old city, in the heart of Warsaw, from architectttral drawings and phot graphs they have reproduced the city as it was, even to the point of sagging roofs, and leaning chimneys. The ph~btographs before and a: ter, you can hardly tell the difference. That is reconstruction that is less d~sirable than preservat on, and restorationi is less desirable than rehabilitation. But when th ngs are fiat to the ground, if you are going to ~iave it look as it did, y ~u have to complet4ly rebuild. Mr. WTD~ALL. In other words, they completely recognize t e value to the country in having preservation `of historic places and lso the great attra~tions it is for foreign visitors coming there? Mr. GRA1~. Both of these. They recpgnize that the people emand roots and no matter what kind of government they live und r they take pride in the past and their traditioits and ancestry. Mr. WirNAu~. I certainly would like to commend you again for your unselfish devotion and great .atiter~tion to something that is most important ~n America and as head~ ofjthe National Trust y u have exhibited g~eat leadership ~nd you a~4 the groups working w~th you deserve a 1c~~ of credit for what has been $1~ne in this field now. We havelhad a prohibition placed o4 us with respect to Mr. Rains. I would like toask Mr. Rains one questi~n. I know that you would like to ans*er no questions on `a ~ubjeot other than historic preservation. But in view of your own ~ ork on this committee, the type of committee it was and producing he fine reports produced by `the committee, I i 7onder if you have `an pinion 994 PAGENO="0413" DEMONSTRATION CITIES AN BAN DEVELOPMENI' 995 that a similar committee might do ew towns. This is a coritro- versial matter. I believe at the r se t time we need a study-an expert study. Do you think a ~o 1 ee like this, like the one that you have `on historic preservation co 1 of use in this area? Mr. BARRETT. Mr. Widnall, if yo 1l yield for just a second. I certainly would be delighted o r. Rains to answer this ques- tion. It is very educational to rn n I am quite sure editfying to everybody in the committee. B t w en the former chairman of this committee began his testimon e aid, on my experience on this committee a short statement right th point is very effe~tive. This is a very controversial matter and e u ht to give him an `opportunity to return `and `answer the statement. Mr. WIDNALL. I was not asking o opinion as to whether he was for or against new towns. I th h that with his very valuable experience in this particular fiel h he might throw some light on how he thought we might app o c the solution to a highly con- troversial matter at the present tim Mr. RAINS. You ~remember, of c rse the new towns came up while I was still chairman of the commt ee nd I know all about the con- troversy. I am not going to get n t one way or another. I will say this, I will use the chairman' o ds-it is a controversial, diffi- cult subject and it does need grea tu y, using his words, by knowl- edgeable groups. Now, I do not know that I kno of any such group, but if I were still a member of this committee, I w uld want all the help I could get from knowledgeable people. ould just like to say this-I have been chairman of committees a ong time in the Congress and I know you are all smart and distin ushed people and we held many hearings while I was chairman of th committee in various places. But I never served on a committee th t worked more diligently and manifested more real interest than he Special Committee on Historic Preservation and if you think that th trip that the committee went on was a fun trip, you are absolut ly rong. When you do a study which we did in 3 months' time n er Larry Henderson, you are a busy man. I would like to compliment the e hers of that committee, all dis- tinguished people, and they knew u h more about preservation and restoration than I do and among ho e who were of great help was Gordon Gray and a]l of them co tr buted greatly. If I do say it, if I was sitting in y r place, I would have liked to have had that study on historic pr se vation which you have there to guide me in my consideration beca se it is a well-done job. I do not take credit for it-but the commit ee is truly entitled I think to the thanks-not only of the Congress b t of the people for a labor of love. That is what it really is. Getting back to your question, th ore information you get on that subject the better. I do not know o it ought to be done and I do not want to express any opinion at all, r. hairman. Mr. WIDNALL. One more thing, M . Chairman. Mr. Rains, it is always good to ee you back here, either before us as a witness, or counseling with u i the office on the Hill. Because your work, your opinions, your k o ledge is invaluable to all of us PAGENO="0414" Hon. WILLu~M A. BARR~rT, Cha4r~na'n, ~ ~bcommittee on HOU8inQ, Co~ urrenoy, U.S. Ho~u8e of Representat~'pes, Wa8hin~g~ Dw~ 1~~tL4 ORAIRMAN : The Amerlean In association ~rgan1zed in 1857 and which to than 22,000 ~icen~ed ar~hiteôts,.apprec!ates Li 13790, 1egi~i~Ltion to eneouragei and assist of historic sfruetures. : - AlA's aetl$re participation In blie presei~va tion passed 4it the 1890 convention calling f historic buildings. From its establishment, foster prese~vatlon of the Nation's historl having architectural significance-and to eno to care for these structures. In late 19~3, the historic American buildl~ the AlA, the National Park Service and the ~1 instrumental in forming the National Pru$ orga~zati~ft~ehartered by Congress iii 1949, ~ ings, and ObJ~CtS significant hi American hist~ activities uñ4ertaken by. the ir~Stitu~te inch4 tional rostertof 1~O AlA prèser~ation offleei~$ preservation ~needs, projects, and techniques. To round out this summary of our involtement in the historic pre i activities, we note our support of `the work~t the special committee on preservation which recently. pi~JSlished the1r~report entitled~ "With He Rich." The legislation (IJ.R. 13790) pending before your subeommltt in part, the recommendations made by this i~eport. A bill to further i these recomn~endations Is pending before the souse Ooinmittee on mt Insular Affalts. ~ As WH~h Heritage So Rich ` points out4 historic sites and buildi architectura1~and historic signhl~cance are fi~e~uen~ly lost to future ge of Americana under the guise ~f progress. ~euator Muskie, a membe special comm$~tee and an author of conipanio~i Senate legislation, recent "half of our ~ilntorically signifi~ant structure~ have been destroyed. If another 5 yea$, `there may be no need for this ~g1slation." We snppo~t H.R. 13790 in every aspect an~t find particularly notewor hy pro- visions in thebIll to : ` - Restore buildings of arehitectural as we~1 as historical value; Sell or dispose of such structures for restoration to private as well as pub- lie groups ; . Relocate such buildings without as well as within urban renewa areas; Authn~ize grant-in-aid credit for putfehase and renovation of istoHe structures; i. Auther~ze grants to the ~ational Pru4t for Historic Preservatio to re- store ~trubtures of historic orarchiteeturalvalue; - Mak~-g~antst6ei1i1es to survey such ex1~ingstructures; Provid~ loans to tenants as well as oss~ners of historic or archit urally significant structures to assist in their r -ration; I 996 DEMONSTRATION CITIES AN . URBAN DEVELOPME - a-s members. I will be very remiss i~ I did notat -this point say how well your successor has been servin~ Mr. Barrett, as chair an. Ho has a maiinmoth job in trying to bring forces together and bringing out a housing bill like he did last year is very much to his cr dit. Mr. RAINS. He is a great chairmart. He looks the part, t o, when you sit down here and-look at him. ~1e is a great chairman. Mr. B~4uu~'rr. Thank yøu very m~4h, Mr. Rains. Now, y u know why I 10$ the gsntlemau -from New.J~sey. Time h~s expired and thank you, jNtr~ Rains and Mr. Gr y. We are very ~rateful for the informationjyon gave. (The fOllowing information was ~ubmitted for the reco d:) THE AMEi~[QAN INsnrurn OF AECHI `rs, Washi,igton~, D.C., Apri~ 6, 1966. ~am4ttee on Banking an4 - ~on, D.C. titute of Architects, a pr~ fessional iy represents a membershi- of more his opportunity -to commeii on H.R. i the preservâtien and ma ntenance _on movement began with t 1' the appointment of a corn the committee's duties ha~ c buildings-particularly ourage the establishment oi ge survey was jointly org~ Abrary of Congress. AlA i for HistOric Buildings, s'hlch helps to preserve sit- ~y mid culture. Other pro ~ developing and malntaia and keeping up-to-date ms ie resolu- rni-ttee on ~ been to mildings agencies nized by was al-so L service ~s, -build- ervation ng a na- terial on irvation historic tage So reflects, plement t'lor and gs with erations of this y noted, we wait PAGENO="0415" DEMONSTRATION CItPIE'$ Al Preserve historic struetur~s i~nder Provide fellowships ~or arthit~cts tion field upon the reëornfli~ndation lished for this purpose. On this final point, we wish ~o a~v1se ready to assist the Secretary o~ ~Jousing priate way to assure the success pf t~ie fe tion with ils sister orgai~izat~on, the ~ Architecture, presently awards ~tngj admi I students of architecture. * Furth~r, t~he In Secretary qualified talented Ind~vidi~als Historic Preservation Fellowsh1~ Ad~rIsor The institute has two suggest~on~ rega I vides for the establishment ~f ~t Ni Preservation. ~ First, we note that with t~ae excep Council members are eppo1~itec~ b~ t organizations of recognIzed~ sta~d1n~ two of the four private Ooi~nci~ mci preservation, we suggest th~t tb~y be of at least four indlviduals~sub~nl.tte toric Preservation and the ~IA. Second, we suggest t~iat $he Côun the Council from among qü~difi~d aj tor should be responsible on~y t~ the H:R. 13790 is exceedingly ti~nel$r leg . . eountry has needed for yeara. ~t will pr Ings which are uniquely Amer1c~ni i~nd `~ .. to the alarm sounded by ai~chi~eets, Ma fought a generally losing battle against We urge speedy enactment of H~. 1~79O. Sincerely yours, Mr. BARRFJrr. Our next ~vitness from New York, Congressn~an Will Mr. RYAN. Thank you v~ry znuc Mr. BARRETT. We are go~ng to g LEAN DEVELOPMENT 997 `ba'i beautification program ; and hnlclans in the historic preserva- fellowship adyisory board estab- tibeommlttee that the Institute Is rban Development In every ap~pro- Ip pregram. The AlA In associa- latlon of Collegiate Schools of S some 70 scholarshIps to worthy Is prepared to recommend to the uld serve with distinction on the d. tItle II of ~ 13790, whIch pro- 4~dvIso~y CouncIl on HIstoric Federal and private members aU sident from a panel suggested by elr field. To assure that at least ~re experts In the field of historic nted by the President from a panel tly by the National Trust for His- ~ecutive DIrector be appointed by ~s. Further, the ~3lxècutlve Direc~ a. It establishes a program thIs ~e toolatosave thousands of build- an never be replaced. It responds and others who have, up to now, ldozer approach to redevelopment. Moiaiis KnvroHuM, Jr., FAIA. fternoon will be our colleague ,- Ryan. U as much time as we possibly 0 It tl etJ~ iI~ 0 ca c~4 can. r~1 ii V STATE1~~ENT O:F HO1~. WX$LIAM ~ OONG~~ESS PRO~[VL ~ S 1~. AN~, A R~PflBSENTATIVE IN `E OP N~W YORK ds lb tr~ of welcome. I am honored to ance of the distinguished for- rt Rains of Alabama. I think )ution he made while he served 1 ei~ Mr. RYAN. ~ I appreciate yoi~ir w appear this afternoon, aft~r the n mer chairman ~of the subco~nmittée that all of us appreciate the great C in the House. I am pleased to be able t~ a~pea stration cities program bilL I believe that H.R. 12341~, the de resents a bold new effort t~ u~gra need not dwell on the point that thi The facts and figures doc4met~tin the Housing Subcommitte~, t~ yoi time and energies to shaping le Americans with better hou~in~. Although the Housing ~ct of 19 arresting ideas, it is only ~iow wil today to testify on the demon- 1 h~ *1i~ la ration cities program bill, rep- quality of life in our cities. I itry is a nation of city dwellers. are all too familiar to you on have devoted so much of your ion that would provide more ti ~1 th tamed new housing ideas,. even demonstration cities program L . ~ PAGENO="0416" 998 DEMONSTRATION CITIES ANI) URBAN I)EVELOPMEN that the `need for a total approach~ to combating the insi ré1ent1es~ growth of urban slums an4 city ghettoes is recogn There$re, today I will limit my~ testimony almost exeli the dern$stration cities program. }lowever, I- also will disci a bill I ~1jave introduced that would ~e~tend the rent supple gram to l~ou~ing financed directly or ~tthrongh loan insurance and munIcipalities. Finally I will pouch on the sensitive discriminatorylimitations in some F~cleral grant-in-aid prog work to the disadvantage of large citi~s. Last year in testifying before this subcommittee I address~ to more than 15 housing bills that .[ had introduced durin~ session, most of which dealt with vatious aspects of the Ho~ of 1949~ ~ Of my many bills, one I ~iiwe testified on severa that one [H.R. 3962) which calls foil the establishment of a gram of ~Federa1 loans to be made 4rom a revolving fund assist wii~h the construction and r4abilitation of nonprof income housing. I believe that the ~points I made in my t on April ~, 1965, are still relevant to4la.y as far as this county all housing needs are concerned. With that for a * preface like to now turn specifically to H.R. a2341. I agree with President Johnson, ~ho said, in sending thi stration cities program concept to tl~e Congress on January heretofore "the size and scale of urb~n assistance has been I and too $dely dispersed." ~ H.R. i~341 nourishes the hope that~tbrough expanded Fed~ which cor~ibines ambitious physical *onstrnction and reha with effective social programs at evei~y step in the rebuildin~ our cities thay truly be reborn. The hope is based on two aspects ~f the plan. For the fi the potential scale of the attack on ~nrban slums, at least i standpoint of the plan's intent, matdhes the magnitude of t lem. Secondly, the demonstration cities program matches plexity of the causes of urban decay with cures ; housing, poverty, ~nd education are to be de$Jt with simultaneously bilizing a~l government agencies, programs, and resources. With ti'e Federal Gover~nment paying 80 percent of the lo of all Fe4era~l grant-in-aid projects Jhat are focused on th stration areas for the first time the jocal community can ta that the ~robiems are not insoluble 4nd that Washington w important partner in reaching these ~olutions. I personally believe that, unless niassive remedial and pi steps are taken to ease the torment of life for those who live neighborhoods, there are grave risks that these slum inhabit~ take matt~rs into their ow~ hands in ~n attempt to alter the: ing patterli of their lives. I The bil' we are now considering, ~LR. 12341, has been h many as l~ndmark legislation ; other$ have called it one of I compreh~thve and far-seeing Federal j~ro~rams ever designed. my own enthusiasm for the bill is nc~t without its limits, as resentative of a great but embattled~ American city, I cone demonstration cities progt~am a ventui~esome plan for the hui physical renewal of our w6rst slum n4ghborhoods. As Cong r lious but ized. isively to ss briefly ient pro- Ly States aatter of ~ams that ~d myself the last ~sing Act times is new pro- ;et up to miadle ~stimony y's over- I would demon- 26, that `oo small ral help, ilitation process, rst time, rom the lie prob- the corn- welfare, by mo- ~al share demon- ~e heart 11 be an )neering in slum ~ats will rustrat- tiled by he most While he rep- der tfie ian and ~essrnan PAGENO="0417" DEMONSTRATION C~TI1~S A RBAN DEVELOPMENT 999 from the city of New York~ I belie the shameful conditions th~t e~ist throughout this Nation. Although the Nation is ~ ove $7 billion of the Federal 1~md~et while less than 1 percent of~ th~ F~ anti to the orderly develop~ei~t of our central cities, we musi~ impreE ui~ban help is needed if we are and more stimulating place ~o i~ve,' Only in the last few yeats have ingful scale for the relief of]th~ city For decades, Congress, 4on~inat concerns, has been guilty ~f buryi come to meeting in a mas~ive~ or i lems of our urban areas. ~ D~cay problems this deteroriatio~i b~ing~ night. It is the result of lo~ig year For that reason conditions ~n so described as depressing. ~Yet, at can be tremendously exhi1~ar~tin~ draws its economic and ci~ltt~ral easy way out and abandoi~ th~ cit: mately would consume it c~mpletel We should aspire to assv4re that Clearly, in sending to the qoi4gre~ the President has demonstrated of the problems of slum ho~isirtg, u illiteracy that plagues the ~ity If and, especially if amply fi4nd~d, t the potential for setting in~ m~tion ally, the demonstration cities proj revitalize slum neighborI~oods: We must provide decer~t, safe not the answer. We must upgrade edu~ation, answer. We must create new job~ and st ment alone is not the ans~er. We must provide bettei~ høalth answer. We must have the ftthds and povert~y, although fightin~ pover No single program will cure the sickness of the slum or ghettb. I plan embodying all Feder~tl progi Therefore in the face c~f the n of only $2.3 billion over the r~ext is a disappointment to sta~e it mi] in terms of larger amount~s o~ Fe Many of the mayors o~ our bi subcommittee, have already touch I0 m well qualified to talk about many parts of so many cities mingly ur~banized, more than 05$ to subsidize agriculture, )udget is allocated to housing trban communities. To save II the Congress that massive e the American city a better ~ President says. gun to legislate oii any mean- ler. rural interests and parochial head in the sand when it has iative way the comjjlex prob- blight and the terrible social S train did not happen over- eglect and official indifference. ~ our major cities can only be ame time, the American city n which the rest of America ance. We must not take the he ravages of blight i~hat ulti- r time the city is transformed. demonstration cities program, lerstanding of the magnitude Loyment, poverty, sickness, and ted with vision and dedication ionstration cities program has esired transformation. Basic- acknowledges that if we are to *ng although housing alone is gh education alone is not the job training, although employ- although this alone is not the ~rams for easing the pain of one is not the answer. e economic, social, and physical require an audacious, creative n one massive effort. Le recommended appropriation 5 for the supplementary grants We must think in bolder terms, expenditures. cities, in testimony before this this point. Mayor Cavanaugh L so 0 U vi ii Lg~ Ic~ f S 0 tc~ t U he ii~ cl~ Le h p a a CU 7i1 is ,t ea y. e0t 0 PAGENO="0418" 1000 1~EMONSTRATION CITIES AN~ TJEBAN DEVELOPMEN of Detroil, Mayor Lindsay of New jYork, Mayor Daley o~ alihavestated with great candor that~the entire $2.3 billion a tion could be used exclusively for rej4~renating neighborhood own citiee. Asked how much he believed New~York City would need out one demonstration program, M~iyor Lindsay told you that perhaps $600 million would malte a "dent" in a single] hood. I estim~te that with between 60 a4d 70 cities participatin program, as outlined by Secretary R4bert C. Weaver, that N City can~easouably expect to receiv~4 over the 5-year period than $~5O~ million. That would amo$int to about $50 millio presumably to be funneled into morefthan one demonstratio In N~i~York, it wouldbe cruel and hnconscionable to plan stration p~'oject for Harlem but not One for the Bedford-St section of Brooklyn. Reliable estimates place the numbei~ of persons in New Y living in poverty stricken households~at more than 1.5 millic thermore,~t is believed that nearly 29~;000 of-the city's 3 milli ing units ~~re substandard. New Yoi~k City's welfare progr have soa$d to more than half a bii~1on dollars. ~ Since 19 York has~ *eceived an aggregate of only $28~ million in Feder for urban rene~wal, a program for w~ii~h a total of $5.3 bil been speutnationwide. Clearly $50 million a year in suppl~rnentary grants for Ni is not going to result in dramatic improvements in life in ou In his message on cities in January ~6, 1966, the President s for the largest qualifying cities a program could provide dece lug for 5,000 families, rehabilitate høusitig for some 50,000 and invohre a total of 35,000 units or 104~,000 people. There ai~e a couple of ways to deal ~vith the obvious inadei the appropriation. One is to pare th~ number of cities that' ticipate, p~rhaps to a dozen or so. Tli~e other method would crease the appropriation. The 1att~r course should be f Either make the entire $2.3 billion available the first year or spe provide $10 billion over the next 5 years, a more realistic figu mind. While this is moon money, only this amount will ass the entire constellation of Federal programs now available made to have an impact on the galaxy of problems facing us. But let ~s not lose faith in this un4ertakin~ even if we cs the outset obtain the volume of mon4y that is needed for t ahead. ~ I I would like to turn now to another ~spect of the bill that c me. In hi~ testimony on the opening ~1ay of the hearings, S Weaver said of the proposed Feder~l coordinator that w created bythe bill for each demonstratitin program: This legislation makes clear t~iat the Federfil coordinator will not be a until after the demonstration program is approved. The Federal coo will not, thei~efore, be involved in the plan4ing and development of t demonstration program. I emphasize both "nots." I am gre~.tly disturbed b~ this state4ent for two reasons. I to me that ~t is precisely h~ the early ~lannin~ stages that t] Chicago propria- in their to carry frankly eighbor- in this w York no more a year, area. demon- Lyvesant rk City i. Fur- )n hous. m costs 9, New 1 funds ion has w York ~ slums. ggested it hous- amilies uacy of ill par. 13 to in. ilowed. ifically e to my re that can be knot at ie task ncerns ~retary uld be pointed dinator e city's seems e local PAGENO="0419" DEMONSTRATION CITIES ~ community requires the most help a the Federal Government providin Washington unquestionably has an o out for the interests of Federal tax a The demonstration cities conce t "the complete array of all existin~ grams in the field of housing, rene ~ fare, economic opportunity and rela Unfortunately, I have found t often are ignorant of the ~ nature o programs. Therefore, I believe h an encyclopedic technical knowl ~ grams would be essential in the e; I am convinced that the Federal in expediting and coordinating 1 e assistance if he is involved at the ~ not after the plan is completed. ~ r from the standpoint of both the 1 Government. The Federal Government shoul lion in planning funds that are ~i ordinator, who is involve4 in the d program from its very in~ep~ion, ~ control. In order to make clear r4y i~ecox amendment to H.R. 12841 On page 8, line ~1, afte~ "prog each locility to which assjsta~ice i ning such a program." This would make cleai~ t1~e co ~ ~beginning and would not k~othe in a planned. He would beth~re from At this point I would ~ike to of which 60 or ~TO cities of th~ mo ~ try that are participating in the ~ for the demonstration citi~s progr Secretary Weaver has indica qualify because of the ma~iif~st n ~ rather greater weight ma~y b~ gi' è stration or model can be expected~ t Also there is a strong I~eel~ng i~ for the coveted designati~n ~s a come, first served basis wi~th t~he s grants going to the speedi~st plan ~: The overall demonstra~iofl co: ~ funds is reduced to a k~nd of n planners. The demonstrations m~st ~not e a city but ~s part of a sot~nd, ion principle of master plann~ng or t the desire of one city to beat an t supplemental Federal g~'ants. RBAN DEVELOPMENT 1001 guidance. Furthermore, with ercent of the planning funds, ation to have someone looking 5. ls for a city to avail itself of eral grant and urban aid pro- ransportation, education, wel- rograms." ocal planning officials all too ie complete array of Federal he presence of someone with of Federal grant-in-aid pro- t planning of a local pro)ect. dinator can be more effective il contributions and technical sis of the demonstration plan, endment to this bill is critical, community and the Federal close controlover the $12 mu- available by this `bill. A co- opment of each demonstration d be able to provide this tight dation, I propose the following 11" insert the following : "and for r( vided under section 5 for plan- ator would be there from the the demonstration program is ception. 5 myself to the prickly matter n 800 communities in the cou~- I renewal program will qualify iat a city * will not necessarily ~ a particular neighborhood but a city whose proposed demon- a palpable success. e quarters that the competition nstration city will be on a first in the form of generous Federal can only suffer if the quest for ~ipal foot-race among panting ught of as spot projects within ~e plan for the entire city. This l'anningmust not be sacrificed by to the punch in qualifying for just~ such disdain for overall, 0 1, ~c1 t f li~ od Le~ en Vt 1 di~ el Lo 01 rn~ il~ rs, pt~ In th l~ PAGENO="0420" of need, not in terms city must meet in ord~ istration cities progran ~illy, impact in meetin I support the amench ~ad, and Reuss requiri y for the program be: ing the the ad- Devel- orkable demon- city of the ap- nt was vas ob- f possi- r to be- should needs, ent of- ~g that pulation unem- ibstanci- brathon I be- eeting -Moor- xtbook ~ clear ything luable st em- rately be the d pro- ham- iot be cities, ement 3 were i and Corn- Is had rious, io are 13285, lan. 1002 DEMONSTRATION CITIES AND URBAN DEVELOPMENT thoughtful city planning that has produced an impressioni tic col- lege of ill-conceived renewal projects.: The matter of planning is so imjx~rtant to our cities bat dual chathuiges of decay and growth~ that it is the heart of ministratiOn's other major housing bi*.this session, the Urba opment Mt. I I hope t~iat what have been allowed~ to pass the muster as' programs ~rnder urban renewal legisl4ion will not turn up as stration ci~;y projects. In many citie~ and, especially in thc New Yor1~, the requirement of a wo~kable program before proval of urban renewal funds was a sham. This requirem never applied with vigor or enforced ~when the renewal law viously flaunted. Furthermore, we must think in term~ ble success in establishing the criteria ~ come a demonstration city. The demo~i have its F4atest application and, hope~ not providing points. * For that r~asoi~ fered by qongressmen Ashley, Moorh~ the sectionS of cities that would quali1~ Subject to high-priority economic and s~ i~1a1 pressures, such as p density, crime rate, public welfare particl~ation, delinquency, povert ployznent, educational levels, health and di$ease characteristics and ard housing. While I agree that it is desirable to~focus this total demon attack on dities of varying sizes, as o4tIined by the Secretar lieve that i~i each city the first order ~f business must be to needs-nee4s that are measurable as sj~elled out by the Ashle~ head-Eeussj amendment. I Let us nbt view the demonstration jcities program as a t solution applied to essentially academ~ic problems. There a and present needs in our cities. The ci'isis on a Harlem is ai but academic. The demonstration cities program could be a v weapon in our arsenal, if trained on specific targets and not j ployed as a scattershot attempt to perft~rm good works. There is no section of any American city that is more desi in need of fresh approaches than Harle i. Harlem will have t4 most impor~ant and a.mbitk~us demonst: ation project in this tot gram~ even 4hough many months may g ~ by before a plan can Ic mered out ahd even though the ultimat success of the plan ca guaranteed. In any discussion of steps that can I ~ taken to upgrade oui we must at ` some point touch on the r atter of the rent supp program which was approved last year~ but for which no fmic voted. The President has asked for $30 n~illion for this progra hearings have been held on it by the ~House Appropriations mittee. I r1~ad in the New York Pime4 this morning that ñrn been cut byl the subcommittee to $12 i~ilhion. This is most s and if pei~tted to stand will shatter lfr hopes of all of us `w concerned with the housing crisis in our.~i.g cities. I would like to take this opportunity ~co outline for you H.R. a bill I have introduced that would e4and the rent subsidy~ PAGENO="0421" DEMONSTRATION. C~TIES A U BAN DEVELOPMENT 1003 Under my bill, rent su~pl~m~nts ~ 14 be provided to persons living In housing that is finance4t direct y o thrGugh loan insurance by States and municipalities. . . ~ As~ the law now stands, ~ily pro ` d~s which have loans insured by the Federal Housing Adn~inistrat o r receive a direct loan from the Community Facilities Aclmins ra ion are eligible for the rent supplement program. . ~ ~ ~ In New York State Mi1~che~1-L a evelopments, which are pri- vately owned, construct~d,~ and op ~t just ~s projects jn the rent supplement program may I~e-~are t ~ igible beøause the financing is. insured by the State and J~ew Yo C~ y. Between the city. o~ New York and the State nearly 35,000 u it have been constructed under the Mitchell-Lama limite4 profit hoi~ i~ program. This housing could cons~itu~e a a u le housing ~resource if it were eligible for rent subsidies~ $ecre ry Weaver, in testifying he~ a few weeks ago, noted that ~ome 50 , O~ families are ci~rrently waiting for public housing units ~o beco ~ ailable. In New York ~ City there is~ a backlog of 125~OOO ap ~ `ons for public housing. We should seize every opportóity to et his need. *Extendh~tg the rent subsidy program to State- ~ cit ~ i~ ced hous~ing is one step in this direction. . . ~ . S ~ We must employ ever~ tool a ii~ disposal tc~ ease th~ Nation'~ . housing crisis. ~ Although hundreds~ of ~niilions o 4 llars~ have been spent and lent by cities, States, and the~ ~Fe~eral o erument in an effort to bridge the gap between the den~nd fo id , economical housing and the supply of this housing, the o+eral it ation deteriorates at an alarm- ing rate. During the past 5 yea$, ii~ fac , ~ w York ~Ziity slum housing has spread more rapidly ~th~n it ha b~ n eliminated. ~Jnsounci units. (exclusive of rpomingho~ises) h ~ ~ creased from 420,000 in 1960 to 525,000 in 19~5. ~ . ~ ~ ~ ~ It also has b~en repor1~ed by pe ial taSk force on housing that in New York in the sam~ period ~ e edian rent4o-income ratio has. gone up from 18.4 percent~to *0.4 e ee t. ~ ~ Taken as a whole- The report saysr- . the people o~ New York are paying ig~i r proportion of their Incomes for a less satisfactory inventory of ~iou~ing t n ey were ~ years ago. Employment of famil~r rent s ~ si `es is now viewed as essential if we are to solve the ~ ~iousing j~ 6 lem an4 meet t~he housing short- age. For that reason I~ believ y bill should be given favorable consideration during thi~ se~sion. Finally, I would like ~o turn tention to three other bills that bear directly on the great task of g~ ding our cities. I Almost all of the majqr legisl t~ot~ involving grant-in-aid programs for urban areas contain ~imitati n a to the amOunt of assistance that any~ single State can rec~ive~ P e e I mitations~ which vary from pro- gram to program, discrhlninate . it rily against large cities in popu- lous~ States. ~ ~ ~ `. For instance there ~s 4 limit o ~ percent of the appropriation on the amount of money tl~at a sii~ 1 ~tate shall receive under the Mass 60-878-66-pt. 2-2~ PAGENO="0422" 1004 t~EMONSTRATTON CITIES AND URBAN D~WELOPMEN Transit Act of 1964 ; a 12.5 percent Ii~nit of urban:renewal f ds ; and a 15 perceht ceiling on Federal funds~or public housing. Those limitations are out of date, 4apricious and manifest y unfair to our 1ar~e urban centers whioh are n~ost in need of expand Fed~ra1 Help. ~ . ~ For that reason I have flIed thre4~4 bills, H.R. 3968 wipe out the public hoiising ceiling ; H.R 12915 strikes out the urban ren wal ceiL~ rng ; and ER. 12823 eliminates the ma~s transit limitation. I hope that the Banking and Curr~ncy Committee will gi e favor- able consideration to these bills duri~g this session of the ongress and right !the long years of injusti~e~ suffe~red by our most opulous urban centers. I ` ~ . Mr. ChaArman, I h~ve ilot touchedion the mass transit su ject. I have intrc4luced H B 12850 to provi4e for Federal contribu ions for operating ~x~enses in mass transit. ~enator Harrison Will ams in- troduced this bill in the other body. Ii hope action will be tak n. I would like to call the attention ~f the committee to H.R. 7311 which I ha've hitroduced. It relates ~1irectly to small rehab litation projects under section 220 It wo~ild ~nake it possible to buil larger units for fanlilies in urban renewal ar~as. I would be glad t discuss this in more detail because it is somewhat technical, but it wo ld give us an opp~tuitity to keep more famili~s in our cities. * It will greatly assist in t~ rehabilitation of brownslx4ies for family. occupan y. Ex- perience in rehabilitating brownstones ~n the West Side urban enewal area of Ne~ York shows th~need for th~legislation. I appreciate the opportunity to app4~ar here to express som of my thoughts oi~ the ~1emon~trktion cities program and some of th needs that confront us in housing throughout the country. , Mr. BAItRID~rr. `Thank ycai, Congressnian Ryan. You can~ al ays be depended' upon for submitting good, liberal, and intelligent recom- mendations `for irnprcwing cities and particularly in the city emon- stration program. We appreciate your~testimony. Mr.Widna 1 ? Mr. Wim~i~i~. Thank you, Mr. Chai~man. I have no questi us. I would like tb~coi1ipliment you on a goo~tátement~ . ~óu are `Ce tainly very forthright about the things yóuw~t and `you follow the ` up iii proposed legislation, too. ,` ` Mr. RYAN. Thank you, Mr. Widnall. Mr. BAmu~rr. Mrs. Sullivan ~ ~ ~ ` ` ` Mrs. SUI~IIIVAN. No questiOns, but I ha~ve one comment, Mr. Ryan. I do not think I would agree with yOu to eliminate the lim tation on the `distribution of these funds to cert~,in percentages for the arious citie~-we have discussed that long an~ hard. If we did not put a limitation of how much' any one city or~State could get, it coul very well all go to one place! I think in m4iy of the discussions w have had about these bills it was the feeling of the con-imittee that to be fair, to ~ve~veryon~ a chance to get int4 the program, we had t have a limitation' Ion how much or what pe4centage could go to ` a y one locality. ` ~ Mr. RYAN.. One of the results, of cour~&-just take the public hous- ing limitation of 15 percent-is that a city like New York, whi h has the tremendous need I described, finds itself without adequate ublic housing. This same thing has occurre4 in thrms of urban re ewal PAGENO="0423" DEMONSTRATION CITIES AN U BAN DEVELOPMENT 1005 a fair dis- itations ~~ithas reconsider In some ~o come ~YAN. Let us r BARRETT. T~ J time has expi here this afternoon Mr~ ~her than it is. i Ryan for coming veneat1Oa~m.,~~, to r~con- lunds and mass tranr work to t reached s PAGENO="0424" I PAGENO="0425" DEMONSTRATION C14!ES AND URBAN ~EVELOPMENT THURS~AY, M 24, 1966 HOUSE P R fl]~SJ~NTAP1V1~S, StTBCOMMI E N Hon~sING OF PI11!~ CoMi~trmi ANKING ANI~ CUEI~ENCY, Waehington, D.C. The subcommittee met, pursua t to recess, at 10 :15 a.m., in room 2ii~28, Rayburn House Office Buildi , on. William A. Barrett (chair~ man Qf the subcommittee) presidi . Present : Representatives Barre , M s. Sullivan, St Germam, Gon~ zalez, Reuss, Widnall, Fino, and Mr . D yer. Mr. BAiu~rr. The Housing Sub ittee will come to order. Our first witness this mornin is Mr. Ferd Kramer, president, ~ ~ Draper & Kramer, Inc. Mr. Kramer, come forward, pie s . It is nice to have you here this o i g, Mr. Kramer, it is customary for our committee to make every o y feel at home. If you desire to complete your statement in full, ay e we will ask you one or two questions when you finish. If th r is another way you would like to. approach it, we will abide by your eel ion. ~ Mr. KRAMER. That is perfectly tis actory with me, Mr. Chairman.. STATEMELNT OP PEED KRAMER SIDENT, DRAPER & KRAMER, INC., CH A 0, ILL. Mr. Kn~MER. Mr. Chairman n embers of the committee, my name is Ferd Kramer. I live a 80 South Parkway, Chicago, Ill. I am in the real estate and mort e ankin~ business, and am presi- dent of Draper & Kramer, Inc.. ra er & Kramer has been in exist- ence for 72 years, and I have been i the firm for 43 years. I am a past chariman of the board of A TION, now known as Urban America, Inc., and I am chairman f i s local services division. In my business capacity, I have di ected the operations of my firm in the fields of new construction o r ntal housing, of redevelopment, and have participated in the finan in of various new subdivisions up to and including a new communi y f 30,000 people. My firm has played a role in the construction f 2 large-scale redevelopment proj- ects, 1 of 2,000 family dwelling un~ts nd 1 of 1,700. I am most appreciative of the op o timity to speak to you on the irn- portance of the "land development and new communities" provision of ~ title II of H.R. 1~946, because thei eaning to the future of our coun- try cannot be overemphasized. I b ii ye that the importance of title II will become evident when one co si ers the magnitude of our urban problem in the light of the followng facts: 1007 PAGENO="0426" 1008 DEMONSTRATION CITIES A~D URBAN DEVELOPME T 1 Population experts have estim~ted that there will be 80 million people added to our urban populatio~i within 15 years. By 1 81, three- fourths of the American people will ~e living in urban area . 2. Probably the most dramatic st~tement of all was tha of Presi- dent JoIit~ison when he-stated that in 4he next 35 years we mu t literally build in ~his country as inany home~, schools, stores, and f etories as have beei~ built since the Pilgrims la4led at Plymouth Rock. 3 The~ amount of money involved~in this building progr m will be seven times greater than the total cost to us of World War I or three times our gross nation~d product lastyear. It is obvious that the formidable task ahead of us has to b attacked on two fronts One is the improvement of living conditio s in our existing cities. This involves the cl4aring out of slums and building modern facilitie&. It means cleaning~the air we breathe, a ne look at transportation, and dealing with a ho~t of other problems However, it us crystal clear that o~ existing cities cannot ake care of~ all of the growth that will thke ~Y1ace. Therefore, we ust also develop n~w land adjacent to our citi~s and new satellite co munities surrounding them. ~ . ~ ~ This means that we must escalate b3th the war on slums an the war on suburban sprawl. Every metroptlitan area has its exa ples of urban spiflover that has, since World War II, consumed mile after mile ~ of green countryside. Too often, th~se subdivisions, witho t proper building standards, lacking adequat4 sewage disposal and rainage systems, lacking schools, recreation an4l transportation, poorly planned as to the~ use of the land, have desti~ed these settlements t become ~ slums aim4st~the inst~uit theyare builJ~. The New York Tim draws a familiar picture ~ * * * our suburbs are made repulsive by tt~ste1ess rubberstamp house that fall apart and fati ~ valne Commuting is a nightmare. The countryside I a plague of junkyard~, gravel pits, signs, and potential shacks. Schools are ove crowded, local taxes soar. . The ~earcb for privacy aM repose defeats itself, as the open unspoiled land recedes. ~ , We are permitting the same intensity of blight that we ar ~ at great cost, to overcome m the centraj city, to take over in th metro pohtan a$Ls Clearly with expansio4 forces pushing ever o tward, the only safeguard against chaotic gro~wth is the rational pla ning of developmeiiit ~outside of the central c~ties. Title II will en * urage rational planning and development. At present, most mortgage lenders will not make vacant la d loans in large enough amounts or for long enbugh periods of time to encour- age the development of new model co~munities. The provi ions of this bill will make loans oh vacant land and on land impro ements available to developers. ~ . ~ . Two of the best planned cOmmuniti$s now being built-C lumbia and Reston~-ha~ exceptional financia* backing. In one cas an in- surance con~pany became its land banl4 and partner In the ther, a large oil co~npany is playing a simi1ar~role There are few o er in- vestors on the horizon who ~re willing ~o takesirnilar roles, an there are even fewer deveiop~rs who ha've t~e capital and the bor owmg capacity in the private market to enalfde them to develop ne corn- munities. Th~ new comniunity sectioi~ of this bill will enabi more PAGENO="0427" DEMONSTRATION' ~ITIES is a direct~ rc the central city and t portunities in So l----~ as we lein c e city scrat( vjth ix It assuring some of deinonstr our tena~ D RBAN DEVEI~OPMENT 1009 Qf new, modern, livable s planners to do.. EOS of renewing mploymont op.. ny, the prob~ towns from a choice of Dnomic I the Mr. ii~ tive stat( words, we i. how would work. Mr. KRAMER. I can see only on be good strater~r but the~e is one are 01. ~an sprawl and .0 arguments for _or an excellent and informa~ rance of loans to re our committee for subur- insurance on about new rize FHA insur- nple, a dozen ~ In n program to see .twould ment. mo doubt k new tr~ colossal pro~i1'em i PAGENO="0428" io~w D1MONSTRATION~ . ~IPJi~S~ AN ~ ~1~fl~AN .D~WELOPMENP If we doW1~ hom~e them and give them ~n opportu tdty of 1ivin~ planned c~mmunities that make prop4r use of land and of op and gre~imry arid safety for chi1drer~ in walking to school sort of thi~ng, then we will have this ~ountryside built up ag the type of urban sprawl with which w~ are only too familiar. ~ They a~t~ going to get the housing ~omeway and I think it the Oon~ ~ do wka,t it can to se4 that in gets housing i families ~n live happily in communities that will endure so are not M~d ~with rootingthem out 4s ~ are now being rootingou~ much~of the ental~reas4oiirciti~ Mr. BAn~m. Thank yoüvery much Mr. Widnall ? Mr. WID~ALL. Thank you, Mr. Chait~man. Mr. Kramer, do you have any sug~estions as to the crit~ should be used in locating these new towns? Mr. KRAMi~R. The oiily suggestions ~ have is tha~t they shot lQoated th~t they conform to a regioni4 plan near a metropolit i: don't thi*k they should be stuck off b~ themselves. I certain that theiseloans should not be n~ade 44 new communities that p1:ans fc~rjl~ dev~ilopmentof a metropo~i~n area. I Mr. W~NALL. All the new towns ~ili need a-they will ~conQmic1*se on which to operate to ~4ualiy live and progress do you beli~v~ should supplythe econoi~i~ base? Mr. * KRAMER. Well, I think the plans for the new corn: should inciu~e all the facilities that `~ new community need~ means industrial areas, comm~rcial ai~as, recreational areas, as housing both for many income gro ps aird both rent and and it should be a oomplet~ economic nit. But, in addition it should h~ve goc~i transportation fa~ lities and be convenien mothercit~. ~ Mr. W$TALL. Do Colrni~bia and R ston hav~ a breakdow: planning st;they do have a good econoir c basis? Mr. KRAkER. I believet.h~t they do ; es, sir. Mr. WITh~TALL. As th~ chairman ha said, I have just fell believe we understand that there is quite a bit of oppositior new-town program from the mayors of some of the larger cii I think part of it, it will go off and have them rebuild the cities do the job that should be done, reh~ )ilitation, modertiizati constructio~i, ancl orderly development -clearing of slums-wi problem iti that connection. Mr. BAI~Err. Mr. Widnall, will yoi just yield for a morne Would n~pt the fear which lies beh rd this opposition be lessened if We authorized the program nly on an experimenta Mr. K~tER. Mr. Chairthan, ladie and gentlemen, I thi would help alleviate these fears, but think these fears ar quite groundless. I think the demand is going to be so gr~ the cities are not going to be able to tak~ care of it thern~elves, a and I think that the cities are going th have to wake up to t that they, too, have to provide reloca4ion housing and facili these peopi~ that they take out of the slu~ns. They c~Ln~'t dodge tbat by saying ti~ey are all going to gc suburbs. j I in well- n areas, nd that in with is up to iwhich tha1~we with ia that Ed be so n area. y think [rave no eed. an What ~unities , which as well or sale, to that, ~ to the I of the and I to the ies and nd not II, new have a t? greatly basis? Lk this really at that lyway, re fact ies for to the PAGENO="0429" DEMONSTRATION ~JITiES Some of them will, ofcourse, a] that they are worrying al~out a ~ face them. Isn't it a fac~ that t i losing, what you might c~ll the b the last 20 years ? This is nothing n~w and in or~ replan their cities, ançi compete wi 4iaces in which people ~w~nt ~o ii ~ we are going to have in th~s ~oun ~ prthh~rn. ~ ~ I think that they are w*rried a come about. Mr. WIDNALL. Mr. Kramer, t.h r ~ in the new town program that we t revitalize those and we will have than going out and attempting to 1 ~ new areas. What is your reaction to that. pr p Mr. KRAMER. It is not a very g are going to be so great, if we ar~ strike out for this-for the new ~ places to live, we should build mo e some of the other communities coi and catch up and compete with th s I think, it would be much easi r ~worth while for this country by bu 1 Mr. WIDNALL. Just one furthe towns as a means of relocating a 1 r , Mr. KRAMER. I think of these ~ trum of the economic base and I t Federad aid and insurance to en 1 and that, therefore, we will have. g trum, rather than only good liv n ~nd higher income groups in the s Mr. WIDNALL. We do not t.hinl c self-contained. Mr. KRAMER. Actually, they ~ i] successful ones will be self-contai e muting between the cities. Tha i . Mr. WIDNALL. Thank you, Mr. Mr. BARRErr. Mrs. Sullivan? Mrs. StrILIvAN. Mr. Kramer, I about Prairie Shores, mentioiied is Prairie Shores? Mr. KRAMER. Prairie Shores is city within 4 or 5 minutes drivin what was one of the worst 100-pe was adjacent to Michael Reese Ho: tute of Technology and the area w built, both Michael Reese and the I considering leaving the n~ighborh IRBAN DEVELOP1VtENT 1011 ie of them should, but I think m that really is not going to ies are losing, and have been TIe ~f their economic base for rectify this, they have got to e suburbs and make these cities I with the tremendous growth iling these places will not be a something that is not going to S been a suggestion made that some of the smaller cities and icker and b~t.ter working base ,w lend ~tnd develop completely l~ e, reali~y. I think the demands g to really progress ` and really ons~ in ~the building of better these communities and then let ng and rehabilitate themselves her coinmmth*ies. start and dc something t~iat is ~ somene~W t*ns. tion, do you think of these ne~ art of our low income citizenS? owns as housing a `broad spec- : that the tools are available in ousing of that type to be built living conditions for this spec- nditions for the upper middle ~s. .ese as commuter towns, they are both. ~ ` But certainly the more But certainly there will be corn- going to stop. ier. d like to a~k you some questions ge 4 of your testimony. Where Levelopment project in the inner me of the Loop of Chicago, in Lt Negro slums in Chicago: It Ed and close to the Illinois Insti- ) had before ?rairie Shores was ois Instittite of, Technology were D so: M kb t ai ,1 71~ oi~ ri o~ al to ii * )Oi 1. ra `l diii p; pit lj~ Dcl. . .. ` ~ . PAGENO="0430" the 1 1012 DEMONSTRATION CITIES AND ~ URBAN DEVELOPMENT Since that time they have both expanded their buildings, re ovated old buildings, and it is now becoming~what it once was, just .fter the turn of the century, a fine place in wI~ich to live and work. As a.mat~er of fact, I lived within. tw3 blocks of this area for he first 13 years of my life and moved out as jt became a shim and n w I am living hac1~ there again. Jam retrog4e~sing... I am right bad where Istarted. ~ I ~ Mrs. SULLIVAN. I was not sure ~etIier it is in the sub rbs or whether it is in the city.. i ~ Mr. KRAMER. It is in the city. I only mention it becaus ~ of diverse income groups. Mr. SULLIVAN. This is what impress~cl me, too. I wondered when you mentioned that these f~mi1ies whä live in Prairie Shores area in difFerent in~omebrackets-are thelots 4~f wiiform size, and do amilies of widely~d~ffering incomes liveside by bide ? Mr KEAkER This is a multistory fiousing development ith five 19-story bufidings-about 340.units to t~ie building. I might ~dd that this project, whic~Tt was in a 100-percen Negro neighborhobd is now about, 75~percent ~vhite, 25 nonwhite. Mrs. SULLIVAN. In this range of incéme brackets,. you have erhaps already answered this when you said that you have gone back into it, w~s there any difficulty in attracting higher income groups to .~ back into this area? ~ Mr. KRA~EER. Only on the first building. When the area ar und it was still a~ rubble and slum. I We had great difficulty really in get4ing any seWi'especting person to move th~1re to start with. But afterjthe first building was o cupied and people bould comeiii and see the k~nd of tenants that wer living there, we h~td no difficulty whatsoever, ~nd .1 believe it is proba ly one of the few projects in the city of Chicag4~today that has a large aiting list. Mrs. SULLIVAN~ In these high-rise apartments in which yo have lower income families, have you any id~a what percentage of f milies havechildren~ Mr. KRANER. I have a very definitiv~ idea beca~e we have all the statistics. We had a great many child~en but they are all pr school age, and thiLs is one of the huiportant tjiingsin building any roject but, particu~Iarly, a slurn~cleiarance pro~ct. If you don't ha e ade- quate schools, you cannot keep those rthiiilies in. the neighb rhood. And what happens now-and this apjplies to nonwhite as cli as white-the minute the kids ~et to school age, almost all of the move out of the neighborhood. Therefore, w~ do have a good deal o turn- over but still you have turnover in metropolitan cities anywa . We have families who start their married lIfe there and live there 5 or 6 years before they move. And then we T~ave many families mo e back when their kids are away at college or ~marrith off. So I wo ld say we have m~4y children, almost all prese~iool age. There are so ~ e ex- ceptions. There are some who send thefu to private schools an there are busesthi pick kids up there every d4. Mrs. SUT4IVAN. One other question +n that. Are these co- ps or are they renthJ units? I Mr. KRAMER. Entirely rental. PAGENO="0431" ` I Mrs. StTLLXVAN. I W~ banker; Mr. Kramer tives come before u proposal. You Mr.Ki~~ inform me ~c' r letters, ther Dfl to .urr -- this isai on her own initiative or am most anxious to hea' strong wonder i you woul suggestion that has Mr. KRAMER. I h ~ A~ ~RBAN DEV~L~?~ENT 1013 a well-known mortgage ~e bankers' ripresenta- program sign icons lout. Have you among some a number of ise the slum - ithem that slum s on white ~iserimina- who are very iment should solution to ~e uneconomic up and rebuild correspondents on wrote this letter some group. I [anation for the E~. estion, and I am not sure hinking of communities I DEMONSTRATION OITIES opertie~ .d torn down. it is als( would ~don areas. tory how Then t sincere, I 8 manner to PAGENO="0432" 1014 DEMONSTRATION ~TIES AND ~VRBAN DEVELOPMENT ~Vet7 bad. ~ I do ~1I~1Uk, however, thai1 ~me can b~ ~bs~bed towns, bi~t~I eert~ain1y wei~Jdz~ want 1~ sgreg~t~ 1~he~ i~ ne~ Mr. S'i~ GERMA~N. In your Qpizüou,. ~he i~iew t~.ow~s ~ou1d i~ ~in such a manner so that all ~eonomi~ro~ps. a~i a~ii ~ac~s ~ afforded an opportunity to iuove into ~1$mi Mr. ~ I tIiir*I~ they shouLd 1~e `p1ann~d ~o that all ~ groups oou~ld live there~ As far as rale is ooncerne~, under ti rng laws, these new towns~anything t~i~t has mc4~tgage insure to be nond~orin~iiiwt~ry. ~ Mr. S~r ~4~(4D(. . YO~1 S~I4d in youf ;pair~i~ular project wil city, Prai~ Shores, ytu h~ve 75 perc$iit white and. 25 p~rce~it Mr J~n~i~ Nonwhite h~oau~e we I4~ve some o~ientals Mr. S'r ~EB~{AIN. WhOZ~aS, prior. 14 that time it was- Mr. Ki~4n~a~. One hundrøi percent ~egr~. Mr. S~r G1~RMA~N. If yeuknow, wh4~ did the 75 percent ni find ho~tsm~, within the immediate are~ or wasthere-~-was hot improvement over what they left in the ~iums? Mr. KRAMER. You are now ta~lkinØ about the pople who possessed in the ~lum clearançe, proj4ct ? We, in Chicago, really did quite a. good jdb in the rna~t~ of relocation. In I place, .bef~e theproject wa~ ever start4d, ~ got State funds ai funds-a ~tath apprQpriat~on, if I ri~njeinber correctly-it wa $20 million~ and a local bond issue of tlke same amount to build tion housink~to take care o~thp~p~e~ They aløo gave thei ority of OC~UP8Afl~7 UI the e~isMng pi~b!c housing projects, so I people who could afford tc~ get stand4rd ho~ing on their o~ the people who couldn't were taken cark~ of, and the surveys th been made have shown thaI~ something like 90 percent of the who were. dispossesed were located in standard housing, eithei ~rprivate. S Mr. ST ~ERMAIN. Which was an irr4provenient, because th being disp~~d from substandard ? ~ Mr. KRA*ER. A great impj~oveme~t, 4e~ Mr. ST G~ERMAIN. On the ~Prairie Sh$rea .prQject ~`do you kno~ the time h~g was fromthe ti~ne the ci1~j of Chicago took over ~ estate inV~hTed and when you, as develo~M~s, were ready to go ~ Mr. Ki~A*n~R. From the ~tart time, Eke city started acquiri iand up to the start of construction-4i*t. was something less years. This project went fairly qui4kly. As slum clearan private redevelopment was very new w~ didn't know whether w get people to live in the multistory buil~ings in the slum area. had a dealivith the city to ts~ke up the laud, one-fifth at a time 5 year periQd So we started construction on one building and the year wa~~ out we started ~onstructio* ~n th~t next building a shorter timt~ on the third building, and ~it went so well that the and fifth biiiildings were built simultailteously at the end of ~ So we neverwent the 5-year term at all. Mr. ST GERMAIN. In addition to the~ housing that you erect five units, was there any other work 4 ne in any other area- stance, you stated that since your tenan s who had children wh school age are moving out, this would :ndicate there were no built to care for these people. in new ~ towns. set up culcj be cnomic e exist-, nee has hin the Negro. aiwhite sing an ~re dis- [think he first id local $10 or reloca- ~ a pri- hat the ~n, and at have people public y were v what he real rig the than 2 ~e and ~ could So w~ over a before id in a fourth years. ~d, the for in- ) reach ~choois PAGENO="0433" DEMONSTRATION ~ITiES D URBAN DEVELOPMENT 1015 Mr. KRAMER. Actua11y~ ~he~e w~ magnificent, one-story modern sch and was built almost on th~~i1~e `be' Life project, which is ca11~d ~ake first five or six grades on~y.. It m~nthry grades. ~ The city sh~u1d school at the right time to1 take ca what they didn't do-I sh~1d say the school didn't fill up rig~xt a~vay, construction, they im*medi~te~y o area beyond them, so it ~$s ii~un slum children. Th~ref~re,~ thE~ pee large-there are few cxc~pti~&- would send their children~ th~re. them to private s~hóols, p~ro~hia Negroes as wellas the'whit&s. Mr. `ST GERMAIN. One l~st ~ues which your particular prc~ject is 1,700 units, families. Ho~v n~.any within~that same area, pri~r tb th Mr. KRAMER. There ~ve~e i~iore that there were many roon~hig~ `hou were couiited in the cen'~s a~ fa: member c~orrectly, there w~r~ ~rob living there. But if~roii ~ ooi~ i~et dren-we probably hoiis~ ~ Mr. S~ G1~RMAII'~.' Than. ~ Mr. KRAMER. Of cours , it w~ ~3upants. Mr. BAimErr. Mr. Reus ? Mr. REUSS. Thank you, Mr. Ch Mr. KRAMER. You spok of hay people. ~ What was that ~ Mr. I~RAMER. This was u comm good commuter service to Chicag it. We financed it as m~iortgage b did all of the financing. I think million worth of financing in tha It was planned from scratch as a `with rental housing, commercia venient shopping, churches, schoo school. There was a complete c Mr. REuss. I am very much in of this legislation, but I will have your associates could finance Pan help needed? Mr. KRAMER. WelL I can tell The people that promoted. it woiib able to get an RFC loan after th had this terrific problem of carryi houses in one fell swoop. This v years and, in the meanwhile, the ` broke them and, as a matter of additional school built. It is a ilding of superior architecture our prO~ct and the New York lows. This was for either the t go all the way through ele-. rnmended ~n having built the the tenants who moved in, but hey did do, due to the fact that ise the projects were still under up to the children of the slum and became jOO percent Negro ho lived in this project, by and er the Negroes or the whites r therefore moved out or sent therw1s~. This applies `to the You take th~ physical area on d. You say you have close to lies were housed, if you knows you built your apartments? that. * The reason for that is ith a sii~gle person in them who ~roups and,' therefore, if I re- ~5QO ~to ~,OOO `so~called families iilies-hitsband and wife, chil- wer~' hôu~ed there before. rificaii~ transient type of oc- jn. uilt a new community of 30,000 30 rnile~ south of Chicago with ~d Park ~or~st~ I didn't build ~s. Another firm and our firm ther we had something like $80 n. This was a complete town. F and weli-.plann~ed community elopment, sales housing, con- In the ele~entary through high inity. ort of the new towns provision : you this question. If you and est in the past, why is Federal at it was one terrific struggle' ~ gene broke if they hadn't been `ect was started. Because they' S land, and you. can't sell all the was built over a long term of ng charges *on this land almost I think it is well-known that 0 r Lb o:I~ at* I3E~ rL~ at `UI `1~I t te n all lie; Lth (1 1;. a~ ag r~ ct, PAGENO="0434" 1016 DEMONSTRATION CITIES AND URBAN DEVELOPMEN Reston, the developer there, had to bring in help and take a partner, or he might have been in trouble. Mr. REIJSS. So what you are saying about Park Forest is i hat Fed- eral assistance was used ? Mr. KRAMER. Yes ; it was a peculiaijtype at the time. Mr. REUSS. What you say about Re~ton and Columbia, it is the Con- necticut ~eneral, is it? Mr. KRAMER. Gulf Oil on the other hand. Mr. REUSS. They are few and faif between and they jus are helpful. Mr. KRAMER. That is correct. There just aren't any. Mr. REuss. In speaking of the incOme distribution of the eople at Prairie Shores, how much do the rer~ta1s and amenities in t e apart- ments there vary ? Mr. KR~~LMER. First of all, I woul4 like to preface my re iarks by saying that Prairie Shores was built ~for a dual purpose. 0 e was to provide a ~ decent atmosphere to the periphery of Michael R ese Hos- pital because this slum was choking it.I ~ The other was to provide housingj for staff-married mt ms and residents as well as nurses and medi4~al technicians. So oui ~purpose right from the start had been to keep the rentals as low as possible. There was no 221 (d) (3) in those days. This was a section 22 ) project and our rentals could have been. very much higher than they ~re. We started in at rentals of $32 per room per month at a time w en there was nothing being built in Chicago i~i multistory buildings, ertainly at less than $45 per room per montl4, . so even today-and c sts have gone up hi operation since this was b4ilt, even today our rent is range from $3~ to $38 per roo~i per month. ~ Mr. REUSS. By and ` large, the w~dthy people with inc me over $10,000 a year live in the same apart~nents and pay the sam ~ rent as the people with incomes below $5,000 a year? Mr. I(RAMER. That is correct. A~tua1ly, in our tenant selection policy, we purposely keep down the number of high incorn ~ people, because that wasn't the reason it was built. On the other Land, we would like to have a diversity. ~ ~ Mr. REUSS. One more question. Y u do not mention Prair e Shores as evidence of the need for the new t vns? Mr. KÜAMER. No ; not at all. Ju t evidence that econo] ic-that diverse economic groups can live tog ther. Mr. REUSS. As I think you pointed out, further Praire Sh res proj- ects, which I think are excellent, can e helped by 221 (d) (3) the new town proposal is not addressed to this problem. Mr. KRAMER. Not at all, you are absolutely right. Mr. REuss. Thank you. Mr. BARRETr. Thank you, Mr. Kramer, for a very excel~, nt state- ment, and we are certainly glad to iave you here this mo ling. I am sure Congress has learned much f om the testimony. Mr. Ki~&i~. Thank you. Mr. BAERErF. At this point in the ecord I will ask unanii otis con- sent to put in the record a number o statements sent to the subcom- mittee pertaining to the legislation b fore us. , No. 1. Letters to Chairman Patma and me from Russell ~ . Thack- roy, executive director of the Natioii~1 Association of State Tniversi- ties and Land-Grant colleges, and John F. Morse, director of he Corn- not PAGENO="0435" ri cy m B. 01 O1~L S4 g ti: st L~ th 1 st ro 111 oI~ a~i io~ oSt us sti~ C an 1o~ el& ro DEMONSTRATION CITIES D URBAN DEVELOPMENT 1017 an Council on Education, ex- of funds available for college t in testifying when the bank- iittee . considers legislation af- m. dSQn, executive director of the ~ Massachusetts in support of mission on Federal Re1at~on~, A i pressing concern over the~ in~c1eq housing loans and expressing ~ an i t ing committee or the hou~in~ sul c fecting the college housing 1o~tn p No. ~2. A letter from Rc~be~t G. I metropolitan. area planni~ig. coun i H.R. 12946. .~ ~ ~ ~ ~ No. 3~ A letter froth Mr fi~war of the Kissell Co. in Spi~ingfiel demonstration cities bill ~n his c field Committee for Comm~inity A t No. 4. A letter froth Mr. S. Fra ii Brotherhood of Painters, De&~ra support of H.R. 13064 an . ei~dor recommendations in his st tement t No. 5. A statem&it in s ipport the Honorable George S. Smith, Pa. The mayor makes a very fi No. 6. An excellent stat~meptin s Act by Hon. Stanford B. Brooks i N.C. We ar~ most p1ease~1 to ha e sipn of.support. ~ No. 7. A letter from th~ city cl i~ pressing his full support a~id ~ndo s ton for the demonstratior~ cities i of the city council with th~ splend d the committee has already~ receive of Scranton; ~ ~ No. 8. A telegram f.roi~i Mr. ` District 44, luternatlonal .4~ssocia. ~ ers urging the subcommi1~tee to i ~ legislation provisiotis which will c] ernment to the oraerly a4d expe i adversely affected emp1o~ees as ~ Federal installations. (The material referred I~o follo~ s )C ~oonan, ch~tirman of the board jo. ~ Mr. Noonan supports the y as chairman of the Spring- Now. ~ ~ :ftery, general ~president of the - Paperhangers of America, in oris Shishkin's testimony and ~ committee for the AFL-~CIO. ~ Denion~tration Cities Act by , mayor of the city of Easton, tement in support of the bill. ortof the Demonstration Cities aayor ~f the city of Charlotte, mayOr's views and his expres- the city of Scranton, Pa., ex~ nt of the city council of Scran- nd expressing the. concurrence tement and endorsement which n Hon. James J. Walsh, mayor rn H. Ryan, president of the f Machinists, Aerospace Work- orate into this year's housing ~y the law to commit the Gov~ S acquisition of homes of such element. in . the closing of such ON OF SPATE UNIVERSITIES AND LAND-GRANT COLLEGES, Wc~shffigton,D.O., March 21, 1966. Currcacy, Washington, D.C. Banking and Currency Committee, . NATI~NAi~ Ass~ Hon. WRIGHT PATMAN, Chairman, House Committee Øn Banki~ g Hon. WILLIAM A. BARRETT, Chairman, Subcommittee on~ 1~ousing, ~t Wa$hington, D.C. DEAR FRIENDS : I am writi~g on be a Universities. and LanthGrant ~ Colleges t situation with respect to the college h mission for the association to 1~res~~nt te t As of January 31 of this year the t] e which administers the college hot~sing r no new applications for college housing 1 rationing system wa~ ihstitut~d, lim'iti4~ig with not more than one-fourth of this fo~ A~ of the cutoff date appro~dm~te1y $~ hand. Had receipt of app1ic~tior1s co ti is estimated that the total would be p the National Association of State 11 your attention to a most serious loan program, and to request per- y at an appropriate time. mmunity Facilities Administration, m, announced that it would receive . For applh~ations already on file a ns to any one campus to $4 million, ed service facilities. ililiori in loan applications were on ~ through the current fiscal year it imately $1.1 billion, of which $192 I. ~ PAGENO="0436" 1018 DE~EONSTRATION CITIES AND ~URBAN DEVELOPMENT million repr4~sented a carryover from fiscal be funded th~tt year. It thus ~ms clear that evCn with all app this year, tl* program will go ~hto fiscal 194 tions on han4l of perhaps $500 million and an have come hi had aipplicatirnis not been cut to private sales, changes in plaus, etc., it ia will enter the new fiscal year with a backlog d 1967 fiscal year budget recommends limitin~ million. Thus i1~ would appear that the agel any new applications until, at the earliest, ~ than a year from now. ~ The budget message proposes : ~ (1) `!P~iat the new borrowing authori1~ fiscal y$rs, at $800 million ~t year, be eliz4 t~)' That the program he limited 14 ye*. ~ . ~ I (il) That ~sx million in ~xIsting obll$ through ~a "Fannie May pool" operation ~ . made available for new 1oan~for fiscal i9f~ .~ For the . current fiscal year, i$i~w borrowln~ and the program is being held to this amount in excess of $200 million in previous loan rr constitute a revolving fund from which addi~t this fund would permit a $500 million rather current year~ and permit that many more ha be provided at least a year earlier than the: are provided. For the fl~67 fiscal year, the proposal to liminate new borrowing a n:ot use the ~,evel~r1hg fund of thore than $~ 0 millIon, and sell $800 i existing oblI~ations but use onl3r $34~(J millioi kr new. loans, would in el down the pr*gra~m as far as approval of n w applications are concer some time after July 1, 1908. Meanwhile c lege enrollments are at ai high, larger high school ~ classes are graduat ug each year; the cold wa will swell enrollments of returning servieemet1-~provided they can get In. Our association Is sensitive to and sympalhetic with the budgetary related to Vietnam, the pressures of' infiatio~ etc. We feel that the r financing the program is a matter for deciston by * the executIve and 1 branches. Icte ~re greatly eoneèrned, howe~t~r, that a reasonably adeq gram be provIded.. According ~o the best Information we can ~ th reducti* in the intE for the col~g~a housing loan progt~am made by~.the Oongress last year has a major fa~t4r in the excess of á~*licatIon de~1nmd over the $800 million the program ~s now limited. In this connecth~fl ~noté that $19~ million cations was carried over from~sca1 1905 to *scal 1966, indicatIng that- the 3-percent feature-demand was afready ~substaflthtlly u~ex~ess of million leveL We trust that the Congress, in passing on t1~e proposed chai~iges in law, wish to assure Itself that a reasonably adeqi~ate and continuing progra vided for, and wish to offer testimony at the aj~propriate time. Sincerely, Au ~ CAN COPNÜtL ON EI)UOATI jWas~i~~qjt&a, D.C., March 2 Hon. WRIoll!i~ PATMAN, 4 Chairm~n, UE1~mn~ttee on Banking and cltwre*y, U.s. Hov~se of 1i~epresentativea, Washingtoa, D.C. Hon. WILuAi~ A. BARRETT, Chairman, E~ubcomnUttee on Ro~8ing, Coi$m~ttee on BaG~king and (~ Uj~. Ho'ase of Repr8efltati'Oe8~ Washingt~in,. D.C. DEAR --------- ~-~- : Yeat~rday Mr. Russel' Thackrey, executtve direci National Association of State Urth~ersitIes an~ Land-Grant colleges, wro 965 of applications which ould not nations shut off as of Janu ! With an unmet backlog o additional $300 million wh I. Allowing. for some "fal siservative to say that the n hand of at least $400 mill ~ th~ program for that yea icy will not be in position ate in the 1967 fiscal year, ry 31 of applica- ~h might out" due program on. The to $300 0 accept or more r *now fixed in law as of t tuated. $300 million in the comi e next 3 tg fiscal atlons held bV the Treasur with, I assume, $300 mililo V be sold a of this ~7. ~ authority is fixed at $30( ;, although there is in the ~payments, which were in tonal loans could be made han a $~00 mllhion progra ly neOded student housing will otherwhe be provide million, [`reasury i~nded to Use of I for the paces to , if they Lthorlty, illion in act close eEl until all-time 11 bill roblems ethod of gislative ate pro- `est rate not been :0 which in appli- without ~he $300 will also 1 iS pro- RUSSELL I. TBAOKR Eo,ecutive Di ector. 1966. srrency, r of the elio you PAGENO="0437" I DEMONSTRATION CITiES an~I Mr. Barrett the concern ~f t~iat a prevails in college housing. May I say that the AmerIca~i Counci membership 1,194 colleges ai~d i~tnIve has the same concerns and fbr ~recis to you by Mr. Thackrey. At a meeting of our Comrni~s'ioz~ on problem was discussed in det~d11 ~ It ~ ability of colleges and uuiver~it,j~s to students who will be seeking a~Imi~s1on in college housing and that ui~less sorn be of crisis proportions. ~ L :t have discussed with Mr. T]~ac1~rey I permitted to present testin~on~ at an tion and the council are faced wil~h th~ little point in our presentin~ se~ara~ therefore, that the council joir~ with th I hope that this approach will ~e $tisfa Sincerely yours, JOH un CaM Mn Hon. WILLIAM A. BAmmrr, Congre8sio~aj.Oj~e B~Ud~g, Wa8hington, D.C. ~ DEAR CONGRESSMAN B~m~r~r : I ai recer~tly adopted by the memI~ersI~p O You will see that it relates t~ R~R. 1 currently before your ~ As you may know, the Me~ropolitt~ by the Massachusetts Lbg}e1a~t~a$ in in the Boston standard met$poUtan ttion of over 2'/2 millieh. ~ ~ .. Obviously, this area and tI~ëse cOin plauMug efforts. The incentive$ t1~â activity, makes it a worthy an4 den committee will take favorable act~on 0 Respectfully yours, RF~s Whereas the Meth~pcijtan ~&r~t ~Pia working toward a coinprehen~ive deve to coordinate the efforts oi tI~e Ii~db'i~ and ~ Whereas PtOsklent L~Ikd6~ B. lohn message : "The powerful for~es ~f ur to achieveordei~Iy devei&ptheut. ~ A ii for shaping sound urban grô'w~h~-~not Whereas Hit. 1294~, knowij as the u the Congressional CominitteO on Ban incentives for effect~at~ipgplans by ~ 20 percent in addition to ~t1~er ~eder areas which have establi~hej~re~wid therefore, be It Re$oived by the Metropoi~tc~n 4re dotses and tfrgen a~rO~i~iat~ flutanel and favorable aetiop on this~ me~tsure area and becatise it generaii~r ~nc4nrag 6O-8T8-66-pt. 2---~2S URBAN DEVELOPMENT 1019 tion with the situation which now ducation, which numbers among its and ~3i education organizations, e same reasons as were expressed 1 R~lations February 28 this whole e view of the commission that the ~ the greatly increased numbers of ~Ldy severely ~rippled by a shortage ion is found the situation wftl soon ~ieat that th~ national association be ri~tte times Since both the associa- inexor~bie facts, there w~uld seem imozLy. I have suggested to him, iation in presentjng joint testimony. 0 YOU. ORSE, Iflreotor of the Uommi8sion. A;~n OF ~L~SSAQIIU5ETT5, TAN AnnA t~LANNING COUNCIL, . Bo$ton, March 18, 1966. lug along ~ uesolution which Was :efro~klit~ii Area Planning Council. he iirbeii develb~hpent bill which is Planning Comu~i1 was OStaMf~bed ) represent the 70 dties and t~ns Ical árda. ~ This area has a poj~iila- es ha~e a vital stake in respori~ible . 124~46 hOids~ out for this kind Of piece of legislation. I hope your itál rnea~ure. P ci; DAVIDSON, lfrecuiive Director. N Council has siireO it~ inception been it p1~n 1~or `Ws district, and has acted ties and toWns Within that district; id in hiN renèat state of the Union owth threz~ten to overwhelm efforts l1ta~i j~lan ~houl'd be an instrument cteddo~uth~nt"; and evelopment bill and currently before nd Currency, provides much needed of offering supplementary grants of istance for projects in metropolitan rehensive planning programs : Now, N4flt~ CounciZ, Tbat the council en- thiffil the objectives of E.R. 12046, so of Its crucial importance to this onsiblepThnrdng efforts. 11 t)le t~ cd re~ 1 0 .~ 0 t ut b S 0 ti Li bi In 4 g'ii n~ on ~çt~ re~ PAGENO="0438" ]3noriinunoon OF P~T I~RS, DECORATORS, AND PAPERH4GERS or AMERICA, AFL-OI Washington, D.C., March 1. Hon. WILLIAM A. BARRETT, Chairman, Housing bcom0n4ttOo,. hOuse COfi*mittee on Banking and C WashinØon,D.~3. DEAR ~3owo~ESsM&~( BA~n'r~L';. This letter ~s. In. support of the urban ment amendi~ents as introduced by you un~er H.R 13O6~. I have read with keen interest the testimo~iy of Mr. Boris Shishkin, time he testified before the committee on beh*lf of the AFL-CIO and I: 1020 ThJ~MONSTRATION CITIES AND. URBAN DEVELOPMENT Tim KI55ELL $pringfleld, Ohio, Mardh 4, 1966. Hon. WILLIAM A. BARRETT,* Cl? airman of the $ubcommittee on Housing, House of Representatives Office Building, Wdshington, D.C. Mv DEAR MR. BARREn : I am writing to thank you, both in my ca chairman of the Springfield Committee for ~C~mmunity Action Now, personally, ~or having extended to the repr sentatives from our city t tunity to appear before your c~mmittee ins ~Week to testify as to how we feel thai the proposed lemonstratlonc ~1es bill is. As chair$an of this citizens' conimIt1~ ~ I hope that we sneak of the entireJpopulation of Spfrngfield, repr entiug all interests-busin and many clvii groups. ~ We feel there is ~ tr mendous merit in the proj and speakin~ for Springfiekl, I can assure ~ ~u of our whOlehearted ba enthusiastic support. We are dhing everyth ñg we can to demonstrate and to come up with th~ broad planning ~ hich we feel is. nec~sary us to be considered. Once again, please let me thunk you for your courtesy and conside permitting our city officials to testify. Very truly yours, I mcity as well as e oppor- desirable n behalf ss, labor, osed bill, king and ar needs, o permit ation in HowAim B. NooN Chairman of the N, Board. of irectors, ~oi~fl~rrRE F'0ft C0MMuN PY AcirloN Now MEMBERSHIP LIST Howard B. Noonan, coinmitee chairman, c airman of the board the Kissell Co. ~ Robert C. Acton, attorney, Acton, Dunn & R~4'~ern.us. . Edward COleman, presidout, Olan Mills,Inc, Bitner Browne, attorney, Martii~, Browne, H~Ul 4 Harper. : Robert S. Hamilton, executive vice presider~t and general ~manager, S Newsp~p~s, Inc. . . . ~ .. . . Loren 0. Sc1~u1tz, managing editor, Spr1ng~Ie~$l News & Suu. ~ A1vinMcQre~or,presidOut, Bobbins & Meyei~s~ ~ Rev. Kay M.1 Olaesner, pastor, St. John's L4heran Church. Dr. John N.!tauffer,.preSident, WIt~eub~rg~I~iversity. Joseph SbOii~rlin, president, Bauer Bros. Co~ ~ * Reed Robert~on, president, i~obertson. SiguC . Robert Yontz, master of ceremonies, radio sta onWBLY. Peter Dennertein, industrial consultant. H. D. Crabtree, president, Springfield Labor COuncil. PRoPOsED STATRMENT~F PURPOsEs 1. To en~age public concern in finding an~ achieving solutions to Ui problems ufoUr urban community. . .. ~ .. 2. To sthn~flate actipñ by . appropriate ag~ucles, both public and pi planning añ~flexecutingneeded projects. 3. To us~ ~tll possible resources, both pri'~ate and public, to accomr objective. ~ . . I . . ~ 4. To sOekjimmediatelj ~ cre~tive and cou~ageOus program to rebuild area of Spriilgfiéld, as a first step in dynain~Lc urban improvement. ringfield urgent vate, in ish this Ihe core 1966. rreney, tevelop- t which erewith PAGENO="0439" :.i~ es Es, eo~ Fl pr o~ a~ Co 1 g re a C, er )~U Dtl I DEMONSTRATION CITIES URBAN DEVELOPMENT 1021 most respectfully urge that ~rou~ bill bill, H.R. 13064, be revised along the While I convev support fc~r tl~ese also for the 202,000 members afi~liate Thank you in advance for your kilt Very truly yours, 11 I . 18065, and congressman Patman's f Mr. Shishkin's testimony. do so not only on my behalf but our International union. tideration in these matters. S. FRANK RAFTERY, General President. ~., MAYOR OF. THE CITY OF ~ EASTON, IINNSYLVANIA C ittee, my name is George S. Smith, appearing before you to requebt the wOUld like to express in this testi- irban ~ parti~cipation by the Federal blem of ~ blight, decay, arid human demonetratlon ` projects in blighted ill ha~e tremeildous salutary effect pie, our city of Easton is a core city. dings, the college, the churches, the nty jail, county courthouse, Federal tate employment office, and visiting STATEMENT OF HON. GEORGE S. MMIT: . COMMpNWEALT . Mr. ~ Chairman and membei~ o~ the mayor of the city of Eastoli, Pa., and passage of the Deflionstratio~i Cities. mony, the necessity for a ~ n~ore 1nc~i Government in order to alleviate ti privation. ~ I strongly advise the est~b1i~hm.e: cities in ordOr to préve tba1~ this ac on tb5 future of American cit~es. For It is the repository of the g~ver~imen library, social agencies, YMCA, YWC post office, and social security buildi nurs.e and other social agencies. In fact, one4hird of the ci~y i~ occ Easton has been the haven ~or the I have gradually provided ; pnbli~ hou . elderly. * Shopping centers about us have cos evaluation in our downtown busines provIde proper services, the ity has The community about us se our r children to our college, use o r post o tage of all the city functio s, but i government" have refused to share ti The basic rea~on fol' this Is that they that can bC only shared if you move our citizens are doing this. `~fl~e ci It is Only through Federal a~l~tan fully rejuvenate themselves. WI~y d poor, the needy, the unfortu~ate~ tha Please help us carry out this ~ imp Demonstration Cities Act and help Am 0 I 0 C U C C r by taz-free properties, The city of rtunttte of the community, and we `or * th~ ~ iow~4nQOme groups and the illions of dollars in loss of property . To offset loss of revenue and to )rced to adopt a high tax rate. , our water, oltr streCts, send their brary ; in fact, they have the ~dvan- the guise Of "maintenance of local en, and remain politically separate. joya low taN rate and an affluence the city into the suburbs. Many of 9w poorer and the suburbs richer. ,n enlargOd scale that the cities can 0 this? ~ For the betterment of the been aucOpted as the citie~' burden. task. I urge you to support . the i who ~Oed your aid. ~ ~ ~ CITY OF CRARLOTT~ N.C, OFFICE OF THE MAYOR, March 11, 1966. `1 Hon. WILLIAM A. BARRETT, Subcommittee on HoRsing of the Uonu House of Representatives, Washington, D.C. DEAR CONGRESSMAN : I do ~tppreciat suggested that I send a state~nen~ whi after bringing it to the att~ntion of volved in current hearings 0' H41. 12 Thank you for this oppor~up~ty f~ Sincerely, ~ tee on Banking and Currency, ot~ y~ e Ii t 4 letter ~f ~&Larch 2 in which you have ~ wcruLd include ta the printed record ubcommittee members . presently in- mitting the attached statement. STANFORD R. BROOKSHIRE. PAGENO="0440" ~1 1022 DEMONSTRATION CITIES AND tURBAN DEVELOPMENT STA~EMENT IN Su~roi~~ o~ . DEMON~TEATION CITY LEGISLATIOI Ajii~erican ~~ities are in serious trouble. ~ hue the older. sections of city suffer, fto~n physical decay, social wire t, and. economie difficulties sprawl ov~i; 4the eountr3rside tfraJnii~g hwn~ i and financial resources creasing dei4and~s for niunicipal services. I e pattern of modern urba~ ment is I~k~a~ ezpan~ng wheel, the hub ~ which needs repair. ~ We are anlurban civilization. Over three- narters of all Americans 11 urban centers. The future of these cities ~ ill determine the future o tion. All le~rel5 of O~vernment must fully comprehend this and coo finding Sohitlons to the prohleth~ b~etting t é city. These problems are complex. With the ~ ~odii~ of business from tli city, blight and decay erode property value~s~ disperse business and civ ship, and 1tOI~ the city of its vitality. The ~ liness. and absence of eco portunity . wliiioh this. exodus ~ea.ves behin alleiiates the indiivdual presses.thel~miian. spirit. ~ Halfhearted effo~ ~iid patchwork cannot s probiem~. But maJo~r surgery and compreh~ isive physlc&l, economk~, a redevelopme~t will reuó~ the city. ~ . ~ ~ The centrt~1 city must be completely overh nied, slums eliminated, au and physI~a1~ blight~ arréSte& *Oompreheii~at ~fUt~ure pianiiing .i~iust be this effort ~ ~eot aecess ~hufliaui coivenl ~ esthetie improvements panded socia!I, edneational, and economic ol ortw~Ity are some of the g must be achieved. ~ ~ This job cannot be done be local gover1~m~t alone. Thl~ job cannot by private enterprise a'loiae~ . BUt eooperat1~n. t~mong levels of govern: private enterprise can get the job done. Intergovernmental csoperath~h in meeting new. The concep ~ t of IL&. I~41 Simply exp ~ one ~ of our *ost. severe- urban problems. T a challenge t~o the Nation to d~ those thing our cities. Hon. WIIiLI4 ~ Chai~m41~n, ~44~bOO)fl4fl4tt~53 i~~1f~it~, House B~n1c~g a~ui C~rrency Com*Ut4~e,: Washingte~ ~D.O. DnAa STE ~ On Tuesday, March 15, 1966k: mittee of looal citizens appeared before th House Banking and Currency Committee enactflient of the demonøtratlon cities prog and ezpressed 4esire tMt Scranton might 1 At a meet1~ng held on M~eh 16, the city with the testimony of Mayor Walsh and hi and endorsen~ent to the pi~ogra~.: . We slneei~iy hope that if and when the p Scranton will be given serious consideratini~ cities progra4i. ResfnIl~eur~; [Te1egram~ Hon. Wi~u~ A. BAn~'r~, Chairnuzii~, i~8~i~ Hub~ein.n~tMe, Con~m~tfr~ Bfl4?Ak3~~Jt4 ~*~*M,y, Ra~~bt*** ir44~e~ Offlee Waskin9to,v, p.C.: This or~ttti~1zatton repreSeiit1Ti~ thousand~ Department 4~f IJefense and other base closu mittee to ineorpor~te liit& H.R. 13064, provi commit the Government to the orderly and such adversely affected employees as a cost eral installations. ie inner suburbs rhile in- develop- e in our our Na- ~rate in central c leader- ernie op- and op- ye these d social I human : part of and ex- als that be done ent and 1~e needs~of urban society 1 nds upon sncii eooperatio: e~eoneept: is sound and r now that will shape the nothing to meet presents uture of JORANTON, PA,, Mar~/~ `, loec. I~a37~M~ James ~T. Walsh an a corn- ~ Subcommittee onIlousii ~ of the and testliled in support d early am now under study in ongress ~1nclu4e~l in the program, oimeil of Scranton, Pa., c neurred ~ eoi~mittee and gave full suppox~t ogramis approved that th for inclusion in the demo . city of stration PRANK DESARRO, City Cierk. 1~ASHINGPö~, flO., March 2 , 1966, )f employees adversely al 58 respectfully urges your ions which will clarify Ui ipeditious acquisition of lemént In the closing of s cted by subeom- law to canes ot ich Fed- PAGENO="0441" DEMONSTRATION CITIES D URBAN DEVELOPMENT 1023 Mr. Boris Shishkin, secretat amendments when testifying ~ nization wholeheartedly endo we respectfully request the si Pre$ident, Di8trict 44~ 1~ Worker~s. Mr. BARRETT. Our hext wi~ess Thomas j. Whelan; mayor~of ~rse . Mr. Mayor, will you cQu~e f4~rwa Mr. Mayor, we are! eer1~aii~Iy v this morning. We have had 4~om of the country testifying on this morning, and I am quite'~re ~ouj I would like to say at ti~is ~oin colleague, Congressman J.~ M~nish a good friend of yours, w~nted m able to greet you here in jer$n meeting which he has to ~ I also want to express ~in~iIar when this great mayor wh~ c~mes sired to welcome you here ~and ext or this committee to extei~d t~ all Congressman Dominicl~ V.~ Da he also is tied up in meeti~rig~ and sistant, his confidential s cretary~ this committee. STATEMENT OP HON. DOMIN] THE DEYLIN. CiFI i:i, )~ :1 t~ DC ler a reason, he ~ralyzed. The city us that one would y's residential area te 3 years ago, this is on the move ~utive, Jersey ~t in Jersey which is "~son that at poten~ of~ the ~ ~tor~ you: ses~Mr. thcthnrnit tér~tio~ 310 housing ~ommitteé urged such nittee on March 3, ~966. This orga- :in's testimony in this respect, and act favorably thereon. WILUAM H. RYAx, sociation of MaoIvini$ts/Aerospaoo 4 ti ~i] aioi~ni~rig will be the Honorable y, N.J. ease? luoli: plea~ed to have you here ar~gr~t ina3rors from all parts We are having you here .this ese great men. my very good friend aud able Newark, who is, I understand, 11 you that he regrets not being Lornitig because hehas another I ts for Mrs. flwyer. She said, New Jef~ey, tO say how she de- is courtesy which is customary :~ witnesses. ~vonld have been here, too, but Lot leave, and has asked his as- me over and introduce you to ASSISTANT TO PAGENO="0442" 1024 ~ D~ONSTRATION CITIES AND ~JRBAN DEVELOPMENT tia1~itsr~i~road~-itsharbor faci1ities~ and its unexcelled geo~ advantages Wiould be considered as one~ of the 60 demonstratlo to be chosen~ when this 1egis1~tion is ena4~tøL Rather.:th~ii intrude upon the time i°~ our distinguished would liketo present toyo~i the very ~utstancIirig mayor of t of Jersey City, a man who was describ~d by the Wall Street this week as the man who is revitaliiing Jersey City. I present the mayor~Of Jersey City; the .Honora4~e Thomas J. Whebui Mr. BAi~Err. That is quite~ a comn~dation and, certaini3 sure you warrant it in every respect. If you de~ire to $tate your testimon: along with~ou in.that respect. . STATEME1~ OP HON. TRO1~AS L ~ CITY, N~ ; ACCOMPANIED B Si]YN Mr. WHELAN. Thank you very .rnuel~ congressman Barrett. indeed * grateful to you and the other 4istinguished members committee who granted me the time to come here to present oui and I am extremely grateful to my goo4t friend, Congressman and Congre~sman Dwyer~ før his and h~ c~mments and,. of cm are extremejy grateful also ~o our very ~arw and personal frie great Congifessman, DQminiôk Daniei~,j~or his kind remarks. Qentler~i, my name is Thomas. J. Yfhelan, and I am the m .JerseyCity, N.J., a commw~ity of 276,~Q.eitizens loca~ted upol New York Harbor in the heart of the ~ew York metropolitan Jersey City is the second largest muhicipality in the State Jersey. More important, perhaps, is that our densely populat munity is more than 300 years old. We have more than our s the problems which result from ~OO y ars of unplanned grov uncoordinated industrial and resident i~1 d~eveiopment. It is only natural, therefore, that : ~ ~oin with the mayors~ Nation's ol4Ler cities in urging your a proval of the Dernon~ Cities Act c~!~ 1966. But I would like ota.ké a few minutes~ time to o~r several brief suggestion~ àoncerning the progr~ are now conisidering. . First, we~ of Jersey City support th concept of limiting th ber of cities to be selected under this pr gram. I hope, of cour Jersey City is among the 60 cities selected, but in any case we wisdom in limiting this program to ~ relatively small nun municipalities. But we f~el that some stx~ictly objective criteria should be to determiming which citie~ are select4d. This important pr with all its ~ far-reaching potential, sho~ild not evolve into son of Federal ~1ottery with 60 lucky citie$ holding the winning Among ti~ese determining criteria, ~4e feel, should be the si city and it~ role within its metropolitan area, the extent of nomic and social deterioratiOn, its ~res4nt and future economic tial, the character of its population in t*ms of race, age, and ec status, the ~tent . of hard-core poverty ~within the city, and other factors., And pos~ibly the most ~iportant : f these criteria~ we s should be a. hard-headed appraisal of th ability of each city to a raphic ~ cities iest, I ie city ournal to you , I am ~1 full, we. will be gla to go .aEZ~, MAYOR OP J ~ WILLIS, CITY PLA~ ~RSEY WEB I am cif this views, linish, rse, we Ld and yor of upper egion.. f New d corn- are of th and of our ration f your m you nurn- e, that see the ber of pplied Dgram, Le kind ickets. ;e of a ts eco- poten- nornic many iggest, ~tually PAGENO="0443" I DEMONSTRATION CITIES carry out its reneWal program án taxpayers' funds invested i~i this p ~ There is no sense in se1e~tir~g as whichhasia't yet tried to h&p itset 1em~. Such a city woiiid 4~ot poss and the know-how tO i'nak~ a~succ stration city. Frankly, we of Jersey qiiy~ feel our own benefit, for we ha$~e á~n oi ment staff which has initi~ted a development program whi~h ~as Federal authorities. ~ Selection as a demonst~at~on portance to Jersey City, o~f c~urs plish in just a few years~ th~ ki: municipal financial limitations ha decades or more. In the past 3 years, we l~ave cut employees to approxirnat~ly 8,80 tax stability-while simu~taneou newal program and incr&~sing th reasonable levels. . Our latest step has bee~i the c out a sweeping housit~g coc~e eñfór We know what must be~ doxie. ii how to do it. But: we hav~n't the carry out our program as qiiickl~ problems demand. And i~e `are i we have brought one set o~f p~obl lems will have arisen. B~ the tir up to code standards, twoJ or thre ward being slums. Time i's our cities. The second comment we offer proposal is in support of having to oversee the Federal program t effective coordination of all the volved in a project of this magn a Federal coordinator with appr ly to the regional administrator Urban Development. We don't fe: But we also urge that this Fe4 not just on top. His function would be a tragedy if the demon come bogged down in adrninistrat buckpassing. The counterpart to the Federal cal coordinator, reporting direetl body. Just as the Federal coordinat existing Federal programs and a cal coordinator mobilize all the r on hand in the fight to rene~w the co N ~RBAN DEVELOPMENT 1025 to effective and lasting use the nonstration city a community d:owhat it can about its prob- .e skills, th~ trained personnel its a~signed role as a demon- :i~ch èriteria will work toward ding planning and redevelop- nd comprehensive community d the approval and praise of vould be of tremendous im- it would permit us to acoom- program~ which our present ced us to schedule in terms of ersey City payroll from 5,200 order to be able to maintain :panding our community re- ries of many city werkers to II of a ~ new division to carry t program. ~eyCity. We know generally ~y or the trained manpower to he increasing urgency of our singly `afraid that by the time nder control, still worse prob- ~ residential `section i~s brought e may have slipped to far to- , `as it `is the enemy of all old ding the demonstration cities deral coordinator in each city We `are strongly in favor of ~al programs that will be in- We clearly see the need for te `authority reporting direôt- ~ Department of Housing and ederal "czar." coOrdinator ~hou1d be on tap, I be examined closely, for it on cities program were to be- per shuffling and bureaucratic dinator would be the city's 10- the mayor and the governing ~uid help to mobilize `all the es available, so `would the lo- ipai and community resources iity. D 1 0 a 5 de 0 at tai d i d `C or fc~ 7.' LC ,ti le: OI~ is .5 1 `OX no e r e h t re. de al ~i1 to n~ rn~' ai~i PAGENO="0444" 1026 D*WNBTRATION CITIES AND TJRBAN DEVELOPMENT Only in thi~ way, with ~aoh ooor nator wieidin~ a broad scope of powers, can we see an effective ~nd well~funct:ioning ~ rogram resulting'. ~ . , ~ J3t Final 3T, Wt~ f~1 that ~i- pt~im~ fi~o~ ir~ ~lm ~ .~ ~ ~ stration ci'1~ies should be the effect th~*t the chosen cities can have in sharing tI~ bene~fits of the~tr expe~riern4under this program ~ ith oth- er commun~ities around them. This pir4gram has ~to~ b& more tha4 ~ a handout for 6 ~ lucky municipaJ~ies. it has to beiiefit as wi4k an ~rea~ and. as broad a range of urban si4~iatIous as:possibI~. . Almos1~ ~;ny city, of çour~e, could ap~lythis new program f r their individual benefit, but rnat~y of these cities are surrounded : ~ w~ell- to-do suburbs which do not face the pi~ght of America's agin ~ urban centers. Other cities, in contrast, a*e at the hub of pove ty and deterioration in the form of smaller mi~inicipalities which have neither the resour~s nor the potential for overcoming their problem Jersey city, for instance, is surr~unded by 11 smaller Tudson County coi~m~iunities which are strug~ling with varying de, rees of efTort tu~id ~uccess to meet Many of th~ ~ama urban problems f ~ced by Jersey Ci:t3~ itself. * ~ ~ But Jers~y City is fortunate to have tour colleges within its bound- aries, and their enrollment in a dem~istration cities progra i could help spread the results of this effort far~oiitside ~ur own city un its. We see city officials from not only other. Hudson County com~ unities but from imunicipalities throughout N~w Jersey participating n week- long on-the-job training courses in w~ich :they would see and experi- ence firstha~nd how tocope with the m~$iiy problems involved i i urban renewal. ~ We se~ ~he Federal coor~iinator * an4l. the local c~rdinator' jointly maintaining a regiontd urban resourcè~enter-a library of p rtinent regional ~4ata and recent publicati~ns ~ . available to all nearby municipalities. ` ~ We see Jersey City gaining from th~ experience of its sister nunici- palities even as they are seeii~ how c4thmunity renewal can ~ork their own ~4ties-and this entire approach to the demonstrati n cities program simply wouldn't be of real effect in the center cit~ which is surrounded by quiet, welkordered ~tibiirban "country-clu " corn- munities. This should be an ithport~i ii lactor in the demon tratmn citiesprogi~am, we feeL ~ ~ . In eoiu~h~sion, let me stress my enth ~ia~ni for the potentia of this dynamic n4w approach to s~thring the.1 roblims-hideed, the c' isis-or our aging ëities. And unlike some ~ io fear this pf~oposed nassive Federal i~oivement in the: battle ag inst blight, we of Jers3y City know froim personal experience that 1 ederal, city, and State author- ities can ~work together to achieve results of lasting benefit ~ for the people. At this moment, a unique experiment in urban redevelop underway in Jersey City, the results~ of which we know will ev be hailed by citizens from all parts o ~ our great Nation as achievernei~tóf ~ulighteni~d governmen . I speak o~f Liberty State Pa~rk on tlu~ ~ersev City waterfront ately belnr$ historic Elhs Isl~and and the Statue of Liberty City conc~tved this 4OO-acr~. reereatiol ~cl :an& cuittiral facility nent is ntually ~ major ~nmedi- Jersey severaL PAGENO="0445" DEMONSTRATION ~JITIES 1 D URBAN DEVELOPMJ~NT 1027 THE DEMONSTBAPIO1~ CITIES AdT OF C]: ~. IN~ The proposed Demonstrat~on ~kJitie selected, with an nnpa~,a11e1ed ôppoi which will reverse the soda an~1 ph; sections of our community. In recent years, Jersey Ci y has cs have resulted in the formul~ tiofl of a city's many problems. An xp~rienc development official~ has be a assen have been initiated. But the city's fina~iciá1 lii i:tat~ons- ing revenue sources-have severely renewal effort. Desplte. st~ngept ec a third of the city's munici~al empl necessary to budget impIemE~nta~ion terms of a decade or more. The purpose of this r~por~ is to o' . city proposes to use wider the Den lined is practical ancE real~tic, and eral body of knowledge b~in~ accu the critical and growing próble~ of our cities. A. A de8cription of the oiti~/ Jersey City i~ ~one o~ t1~e ol~~t in settled well Over 800 rears ~ b3'~ New York City. ~ Its 15 sqt~are mile peninsula, and ~e~Sé~ City'~ w~t~rf and Upper New York Bay o~r th~ eas Bay on the west. riront d~e1opment plan, and the park's total acreage to the he remai~adei~of the land under m. , inspired the Federal Govern- n~1 historic shrine, and youths arE~ now engaged in the initial id Ellis Island. deral-St~te-m~inicipal coopera- of p~tner~hip that we see re- ;~rOgp~l. tt as tangible proof urely be of lasting benefit not but to rnuni~ipalities through- arrett, and the. members of the sent thes~ humble and simple or, for a very good statement. 1, the Demoiistr~tion Cities Act rsey City, N.J., entered in the out objection. 19~O-a pt~posed program ~for PION of 1966 will provide Jersey City, if . to oarr~ out a program of action lecay that is occurring in the oldest Dut intensive research studies which rehensive program for attacking the ofessional staff of planning and re- and a number of renewal measures creasing municipal costs and shrink- d the size and scope of the city's Cs, including the dismissal of nearly during the past 3 years, it has. been total community renewal program in the Ideas and methods which Jersey tion Cities Act. The approach out- contribute substantially to the gen- d throughout the Nation regarding ing the social and physical fabric of itles in the Nation, having been first iliet Dutch lthmigrants who founded py theCenter of the Hudson County provltTh ~iccess tO the I~EudsOn River to the Hackensack River and Newark a a 0 at 1z~ ~z~t at~ t~ F t years ago as part of our ov~rai1 last year the city donated on9~thi State of New Jersey, whicl~ ~ oh our State's renowned green acres p The creation of Liberty Paz~k, I ment to designate Ellis Isl~4 as from the Federal Job Co~ps pro~ development work in Lib~rt~ Th This is an outstanding e~an~iple. tion and coordination. I~ is the suiting from the dethonst~at~on c that this program can wdrk and only to the 60 cities uitim~tte~y Se. out the entire Nation. I am very grateful, Cohgressm committee, for giving u~ tithe t views. * Mr. BARRETT. Thank ~ou, Mr. I assume you desire to have tI~e pr of 1966-a proposed progra~n f record? Mr. WHELAN. Yes. Mr. BARRETT. This ma~ be don (The Demonstration Cities A Jersey City, N.J., foliow~:) I :~ t i~ 1 OtYi -A PROPOSED PROGnAM FOR JERSEY ij1~; al 51 ui~ C 11 y t e s~ wll la~ 0 I, cc its r~4 .j . I, ~ PAGENO="0446" )f hard- relocate [1 stress sources. iof the al pub- is. zations, iousing, roblems iich all itation. volved, broad he city. tration cipally These 1028 DEMONSTRATrON CITIES AND URBAN DEVELOPMENT Jersey city, like New York City, has ser~Ted throughout its~history s a port of entry. l~ ~the United States. It is sy.mt~4ic that both:Ellis . Islan and the Statue of X$berty are located ipimediately 4J~ the Jersey City waterfr nt The eity ~ gr~w~s$~adiIy th~r~ugh ~thè sears rea~h~g a pea1~ ~popü1ation 31~715 in 1930. Tije population in 1960, however,jwas only 276,101. Like man~r of the Nation S older centralkities Jersey City has ex rienced ~t flight of ~t~he middle4ncome segments to ~ubuthan areas of New J rsey and ~t correlatel increase in its Negro and P*erto ~Rican population. I is esti- mated that ~ersèy City's population is now~ áböut 86 ~ereent white, 1 percent Negro and 3 percent Puerto Rican. Some industry, too, has joined the flight to the suburbs-and of ere greater economic importance to Jersey OJ~y has been the sharp decline in it~ railroad ratables. The railroads once Owned 98 per~ent of the city's eastern w terfront, but th~y now own less than half and are co4tinuing to withdraw. B. What Jettsey City will deinhnstrate ~ . With the ~atalytlc impetus of suhtantial~IV~d~ral aid, Jea~sey City c * begin putting into limmediate effect programs prntly scheduled to start ye rs from now. The I~emonstratiOit Oitk~s Actwillen*ble the city to fully *utiliz its total community ~sou*es and experienced organizational skills in a progra which will dramatically improve the physical, soci~1, and economic environm nt of its deteriorating areas within a relatively short time. The city will : * . 1. Eliminate all substandard housing conditions through the mech nis~m of code enforcement, conservation, rehabilitatton or, ~ when necessary, c earance. 2. Improve the physical environment to such an extent as to evoke a positive response from residents through the use ~f modern construction te `liniques, imaginative building types, integrated arcI~itectural effects of skysc~ pes and landscapes, vistas, parks, and Street pattern$, and cleanliness of neighi orhoods. 3. Provide housing at~prices ~bat ear residents can afford. 4. Create. 4r uncover additional jobs, re$Inéing the unemployment ~3 percent ortless. ~ I ~ 5. Substai~ftaily reduce the welfare easek~ad. 6. Improve~ the health levels of the resid~uth. 7. Increase the educational attainment le~els. 8. Reduce discrimination in housing and employment. 9. Induce residents to participate effective1~y and enthusiastically in t and physical rejuvenation of their neighbor~od. 10. Accomplish any necessary relocation ofresidents with a minimum ship and inconvenience, and give these res dents the opportunity to either within~ or outside their neighborhood. rate to e social ]~. THE PEO~Th The augm~ted community reflewal effort e wlsioned by `Jersey City wi ~ommun1ty participation and the mobilizatlo : Of all the community's re Citizen partidipation can be achieved throug L expansion of the prograr dty's present ~ antipoverty organization and brough setting up additio] lically financed citizen groups on both a neigi orhood and a citywide ba~ Some of these groups, together with exist ng civic and social organi would concentrate their attention on special ~treas of concern, such as employment and education. Others would fo ~us their energies on the ~ faced by the residents of a specific neighborheod or block. All such groups will have representation in an areawide council, at w concerned public and private agencies also w~ll have permanent repress And bringth~g together the plans and the p4~grams of all the groups ir other than th$e on the Federal level, wouldibe a local coordinator will powers who W*uld report direetl~' to the mayoijrtnd the governing body of~ A. The dcmonstratiosv area The sectlon~ of Jersey City proposed as l~ie location of the demorn program (hereafter termed the demonstrati4n area) is comprised pri~ ~ of the neighborhoods known locally as Downt~wn, Lafayette and Bergen. neighborhoods are the oldest and most deteri~'ated sectIons of the city. PAGENO="0447" PAGENO="0448" t PAGENO="0449" DEMONSTRATIO~ CITIE The demonstration area jota~ a~ r i~ercent of the city. The pop~t1atio percent of the city total. The nonwhite segment o~ thØ pop 1 ing into this area in increa$ng nun b mated in 1960 to be $4,600, as domp~ *i ment is more prevalent in ~he demo i with an unemployment rat~ of 6.6 : er a~erage of 5.8 percent. Housing in the dem~sti~ation ar ~t three~story frame or~ bricki structur s higher densiti~s th~th the~ were o ~ third of th~ 8~,8OO housing ~inlts In ~i The community faeilitles~ serving 1 ~obso1ete. Fourteen of the 1~ i~ub1l The demonstration area~ h~s a~1 of ~ standing and increasing phLysb~tti de e Well aware of the area'~ prçbleii ~, marked a great amount o~ m~ney o capital Improvements prog$xn. In ( in the planning stage fi$ urban e area's boundaries, but the last of t ~ 1975. Although the city's sha'e of th ~ million, it Is increasingly ap~aren neighborhoods will remain out~ide t e When all of the city's ~ong~rang projects have been compl~ted,~ pov 1~ remain. Limited by a. res~rlc't~d ii. a ing municipal expenses an~1 st~adi1 City renewal effort to dat~ b~s bei z~ creasing rate of physical ~nd ~Ocia B. Propo~cZ ot'erall 8tra~te~y The city's program for 4 success coordination of . four line~ of ~ end a Improvements ; complete, ~ntegrate tion ; centralized records, ins~ectio ~ prebensive citywide and n~ighborh o 1. All the urban renewal project programs now in existen*e or pla eluded in the demonstral4on ~ prog a can promptly be put into Øxe~utio*], ~ults. They will provide ~entfrrs o s This process will have a n~utua 1; newal projects and the e~itlre dci o rehabilitation, and pbysic~U a~d s c'~ carried out as~part o~ the projects ri to extend these impro~em~z~ts into t 2. A series of nelghbor~iood cen é: stop service to all person~ w~o n They w111 be patterned after neig b city's antipoverty organiz~tti$~i. . These neighborhood ee4ter~ wil I effort to induce persous Who are p in the varied services ar~d p~ogra ~Ti through these, neighborh~od cent ~` 1!eeling of community part~ip~tion 3. A central facIlity to ~ee~ rec ~ ownership in the demons~rat1on a This operation also will pi~ovl~Ie a f 1 upgrading, financing, an~ hujldin ~iiltles which result ~on~ the eff r area tl~us wilibe focused iii one ope a ) VRBAN ~DEVEI~OPMENT 1029 Lately 4,2QQ ac~res, which is about 40 stimaje~ ,to~ b~ about 113,700, or 41 ~~4ot1~~rininority groups are inov~~ The median family income was esti- a city average of $5~24. Unemploy- ion area than in the city as a whole, lI1~ 1960 as compared to the citywide redomtnantly a mixture of two- and ny ~of Which have been converted to Ly~ ~biuilt for. ~ It Is estimated that a a are substandard. ~ mon~tration area are inadequate and )1s serving the' area are overcrowded. clal problems ~hich result from long- tion and overcrowding. sey Oit~ ~already has invested .or ear- e neighborhoods involved through Its Dfl,~ the city ia~ now constructing or has .1 projects within the demonstration ` not expected to be coi~ipleted before ~Lt1 renewal projects will exceed $17 many nearby similarly ` deteriorated `S ~esource~ under current programing. ~nl improvements and urban renewal Leterioration, ~ind social ills will still 1 situation which is threatened by ris- dung revenues, the pace of the Jersey slow to catch up with the rapidly in- ewal demonstration is based upon the urban renewal projects and c~p1ta1 Lc~s to the family and general popula- d sOi~ices to the buildings ; and corn- nning. in the demonstration area, plus other for the immediate future, will be in- Since several of ~ the planned projects e will be immediate and important re- gtb from which tO work. `nforcIu~ effect; on both the urban re. ation area in terms of marketability, ategration. ` The capital improvements t as' model points, and it will be eas~ier parts of the detnonstration area. ill be established which will give one- bile or private assistance of any sovt. od centers already established by the to cut redtape, and will make every spicious of Government to participate hich will be offered. It is hoped that e serially disinherited can acquire a yolvement. U all aspe~ts of building conditions and 11 be established within the' area itself. ge of services relating to reha'biljtation, ~lajpts~ All of the problems and diffi~ physically upgrade the demonstration rs4 ~tt i~4 in~ e~L iç~r ~ft1 ew 4 c~' y, ci tó~ o1~' p rt~: ed ~ist EU la er :i~i t Sc Ii PAGENO="0450" estab- 1030 `S~A~I~ON~ OI1~1ES AND t~R ~AN ~ DEVELOPMENT 4. The city j~ now e~nti~~1etftig wotk on a ~n~w master plan which p ovicles basic deeisi~n~ on land use~nd traffic patter~s, and which clearly delta s mdi- vidua:1 neighborhoods within th~ cl~ty. The 4~aster plan is the framew rk for detailed ~Ianh~ng ot ~e1ghbot'hoO~ renewal. ~ ci. ~peciflo proDesals To carry ont the abjectives of the demonstration program, the city wil lish the ~oilowing agencies and programs : 1. Ne'tgkborhood cen~ter8.-A series of nelght~rhood centers will be esta lished. They will .prdvtdie such serYfees as s4tills ~*vélltory, en~p1oymeut cou seling, medical diakgn4sls recreatwfl~ ~e~1r~ir ~eJ~t1Zens ~LetW4ties day nurseries a d cal tural deve1oi1fli~ent programs Ab~ead~ eiisbn4 j~rIvate centers such as th city s antipoverty or~ganization s faeiUtIe~ will he $neonraged to participate n this ~rograzn; ; ~ I 2. Ernp~oijrn~t.-The j~b counseling servi~$s provided In the neighb ~r1wo4 centers will be ~nnhiary to a main empIoyment~c~nter ~far residents of the ~mon stration area. ~Praining programs to upgradeithe skills of the unskilled vilI ~e instituted throagh the combined cooperation ~Pf the city schools, labor nions, local i~adustt~ies, and Federal, State, and loca} antipoverty progya~ns. T e em- phasis will be o~i training for specific tasks. Residents or the denionstration area will ~ given first priority to w rk pn construction r~iated to the .proJe~t, and the m nirnum wage for all proje ts and programs in tile area will be req~iired to mee er surpass State minimur ~ wage requiremen5s~ Ufliofi~ which praetlce raeial ~ ~er1Uilnation will be harre from working on cèiistrnctlon related to pr ograms ii the demonstration area. The eit~cc4ij pi~sa the ~tate Isgisiature to ;xpandnnempioyment ben fits to cover workerS presently itmeligibl~. A series ~ di~y1iurser~y facilities will nable some mothers ~o seek woi~k~ Dff~1,ts will be ~ d~ to~ regnire unions working on projects I-n the idemonatration area to have a ~ rt,ion of their work-force s lected from partieipabts in the ~j~b training progri L, and the city also will ngage trainees in its public works projects and age4cy programs. ElTorts will be made to strengthen small bn~~iéssos in the demonstratio area, and the establishment of new small businei~ses by local residents ~ ill be encouraged. Under Jersey: City's community renewal program, existing industrial di tricts with vacant lafld are slated for ifldustrial de4loj~ment The program ir~ ludes expansion of tije Lafayette mdüstrial district ~l the southern boundary f the demonstratiuu~ ~irea. This ~ianne4 industrial ~panslon, together with n. ac- celerated oap1t~4l improvements p$gram will s rye to increase job opport nities as part ofthe d~monstration progi~arn. The ~1ers~~ city Area Devel&pinent ~óiind , an agency of the Jerse City Chamber of C$imerce, will be called upon for etive participation in this phase of the total pregram. . 3 Hovsing -~A facility centralizing all hous4tg building services and r lated activities will I~e maintained "i~ the demonstr4tlon area. The city housi ig in- specters will WOrk from this office, and all hou~ing data regarding buildin con- ditions, property ownership, iind tenancy will heikept there. The code enforc ment program will b*4? expanded and intensified, an services will be establis ed to facilitate rëloea~tion, financial aid and advice, : omeImprovement, afid leg I aid. Racial diseriibination in housing will be att dked with legal, ethicatio , and social measures~ 1~rivate sponsor~of housing, specially noxiprofltsponsor , will be encouraged 4o build in the demonstration tea. Rehabilitation of e~ isting housing beyondltbe demands of code enforcein nt will be stressed Jerse City is presently urgjng the State legislature to ame d the State constitution to allow limited defernietit of the assesemei~ increases ~ dch presently result when iajor improvements are ~nade to homes. Existing publIc housing units In the demonst ation area will be rehabili ated, and changes in the lower and upper admimioi~ ~iucopie limits will be mad . In addition, the Jetse~r City Eousin.g Authority wfl~J buy or lease vacant priva e and convert them to public use, and "Vest pocket" imbue housing will be distri uted through the demonstration area. ~ Residents of ~he einon5tration ttrea will be~encouraged to form coope ative apartment biiil4ings. The city ~iii sell sa~vag~able strnctures to nonpro t or- ganizations for ~rehabllitaUon. Pl~ë building &~1~ will fre amended to allo r ex- perimentation iz~ a limited number of cases, I order to encourage contr ctors PAGENO="0451" DEMONSTRATION CITIES to try new building method~ sucb a sertion of units into an exist~ng shell. curvilinear, walled-in, jlastie~ al~tmin r encouraged. These developi4ent~ wil bihity of the eity'~ present bni~th:~g cod 4. Education~.-The budget~ for sehoQ1 increased so that the schoels can beeo and theories with regard to ~ner~asin delinquency and droponts, overc~inin 1 and fostering integration. The increased budget will al1o~v th vide special remedial classes, mátntai ~ stipends or loans to graduates ~vlshi g and vastly increase the city's presen low-income families, after-~chopl re r juvenile delinquency. ~ . The ties between the scho~is i~nd t i fering special adult activ!ti~s, and n ~ iptegration in public ed~ueatk~n 5. The family.-Families ~vill be ad centers. Families and~ stnglØ in~llvId a capped by physk~al hardship~ wi1~ be e hood center's programs by sending v when possible, to do such cho~es ~ts ba )` The volunteers and paid ~ta1~ of t e planning, child care, fc!tyd bi~idgE~ting, ~1 will help the work!hg m9the~ to cope of housecleaning and upkeei . 6. Wehfare cdse~.-P~soi s o~i wel and attention in all of the mp~oym ~i tQ break the vicious cycle ofwelfare L seling service to aid low-in~ me fami merchants of high-priced in eridr go sites who prey on the poor. ~ ~ 1~ Phy8icaZ envirQnrnen~& -Aix arc ~iI coordinate all construction : roppsal~ $ the code enforcement prog am', str ë Construction of new build ngs and x transform the visual and p1 ysk~al e~ Vi . By use of experimental l~uilc~ings made to create the stimula~1n~ and ~ in European cities. Thes~ Include bicycle paths, multilevel p$~ths of ponds. Community groups wili be ~ in this realm. The demonstration area wilt be ~ experimental types of developwent, ~ changes in the zoning laws whli~b e~ ing the area's special need~. ~he c 1~ collection, and other relat~d ~nunl ii encouraged to promote cle~n-u~, fix ~i ~: ii. ~~OLLø r At the end of the demon~tra~Ion p centrated effort and accom~lishmen go into effect-measurlhg t~1E? relati and techniques described previously. Sophisticated statistical ~ec~rds activit~y througl~out the life~of the d data processing, it will be~pos~ible of each lndlvhbml ~roje~t ~nd the p published fcr the benefit of otl~er ci The comprehensive, caa'efully ke as tht estiniated a~d actual cost of ND URBAN, DEVELOPMENT 1031 ~e assembly, ~ pre~a~rication, and in- dU~fere~t building types as circular .~det&c and ~nd~rground, also will be d an opportunity to test the applica- thin the dernozistration area Will be oratories to test t$ latest tec1~niqUes ducational levei~ prev~Atlng juvenile of educationaL motivation and skills, to reduce tl~ size of classes and pro- rmaflent ."Headstart" program, offer enter technical or academic schools, ram of free lunches for children of on, and special projects to reduce ~munlty #111 be strengthened by of- ~s will be ~ropesed to foster further ~nclpahly throiig~h the fleighborhood specially the elderly, who are handi- ~ged to participate in their neighbor- ers from the centers to their homes, ng. ters will provide guidance on family L1~ ~ care, and ~iedical aid. Nurseries he somèt1me~ overwhelming prOblemS ohs ~ wiU i~ given special assistance using, and~ ~n4ly programs in order The cl~y~ ~vili ~et Up a Spe~ial coun- avoiding e~pk~itation by loan sharks, scrupulous salesmen, aild other para- ural service will propose ideas and ui~ban beautlflcation effort. Through ad appurten~a~ces will be improved. )lIltfltiOfl Of ~ e±isting structures will aent. ~iaginative planning, an effort will be ing atmosphere which is often found LS, bistros, ~ parks, pedestrian paths, ent, artificial topography, hills, and aged to O~er ~nd to Implement ideas ated as a special zone to allow such tting the city tO make any proposed ce indicates will be practical in meet~ 11 expand Its street cleaning, garbage ervlces, and citizens groups will be ~tiut-up campaigns. VALUATION 1, as the final phase of 6 years of con- st segtaent of the total program will ess Qr tailure of the various proposals accumulated for every phase of each ~ration program. By use of electronic ~kly arrive at an objective evaluation L as a whole. This evaluation will be ross the Nation. *istical record will `include such data ti~e program and its individual parts, n~s ff0 la ek it~ $0 Du~ i~$ a' S .otI d$ ea~ lit~ ot~ r14 lb rá at *0 t bi 0th qi4~ sth eé PAGENO="0452" 1032 DEi~ON~TEATION CITIES AND tFRBAN DE~JLOPMENT the number * of jobs created, unemployment, thealth, education, juvenil delin- quency, welfare cases, substandard housing ~ Units remaining, the numi ~ er and expected life o1~ rehabilitation units, the attitude of residents toward thel neigh- borhoods and Society, the impact ~f the demon~tration program on the res of the city, the cost Of using different construction ~eth~s, the variations in entals charged, a~idtI~e complex r~Ioc~Ltio~n breakdoWns In these i1~j statistics will b~ found a st4~r of cooperation at all le rels of government~an~kI all walks of lIfe-~a dramatic.~periment In shapiag a new future for the most Jlepressed sections o~ an old eity~ so that blight will not to ch the lives as well as the homes of its families. Mr. BARRI~rr. Mr Mayor,. New York i~ about two swimming s rokes from Jersey City? Mr. WHELAN. About four strokes now. Mr. BARRETh We have one of the great Members of New Y rk on this committee-he swims the opposite way. He is a New York r. I want to ask you. this question : You bring it up on page 4 0: your statement. ~ would like to ask y~u th~ same question I have asked severa' of th~ witnesses who Mve appei4red here before Some peo~1e seem to havø the fear 4hat the Federal coordnator which the bi~E1 would ~set up for each d~nionstration cities pro ram, would be SQ~1O sort of a Federal dictalor or czar. Now, I d ~ not believe this and I think that the bill is blear that he would not have~ dictatorial powers, but I would like to ~sk you two questions. First, would people who have such fears feel better, do you hink, if we renamed this Federal Official "the l~al coordinator" rathei th~w. the "Federal eo~rdinator" ? Second, what do you thmk of the idea~of giving the clty some voice in the se1ecti~ou of the coordinator? * I~ Mr. Wrn~r4i~. This is Mr. sidney Willis,our city planner. Mr E~iu~*~r If you desire him to an~wer, if you would hay hum identify hiin~eif for. the record, we will Ibe glad to have him. ~ Mr. WHELAN I think I can answer Ithe question, Mr. Con ross- man. I would just like to introduce M~. Sidney Willis. Ho i ~ our city planner-a very fine, talented, dedicated young man, and we have him along with us today. His observation was, with which I h ye to agree, that the tame isn't: too impd~rtant~ as Shakespeare says "a rose called by any thor name smells 45 sweet"-perhaps to some ~ Federal coordinator I ight carry a con~io~tA~tiou of bureaucracy or ii .~erf~rence from the Fe oral level or an i~npedhnent that could be ~ifficu1t t~ work with- per- haps a local c~erclihator m4ght be more eceptabie to some. I i ally don't think i~ia,t i~ke~ too much diffei, ice. The second part of the question was, i o you think we should have one ? Is one necessary ? I answer:that question-that is an abs lute must. The little experience I have had in government- Mr. BARRETT. I want to repeat my qi4ion. I asked yOu, wh t do you think of the idea of givi~ig the city ~me voice in the selecti n of the coordinator ? Mr. WHELA~K. I would say the positionj assuch is mandatory. You have to have this position to function p4operly-4o coordinate 11 of the governn~*tal agenciesthat are av&ii'41e aud the power that r ems~ therefrom. Whether the coordinator sho4d have a voice in the m tter, is a question of iudgment My answer td that would be no, that gen- erally as with~other appointments of this lthid, sometimesit can r ~ult~ I PAGENO="0453" DEMONSTRAT] RBAN DEV the sends us anc~ spirit of coopera ~is. I ( i't thin1~ aat of an t are not in 1 ~ it, air or v who :strate th ~rrtment ~ b have a voice `isome to correc I suppor'~ iisgivings own suggesL~. I~ bill if we were all of your zon- government 1 its internal ~ome in as a PAGENO="0454" I I ~ederai eagues, r ordi- in our is' must ipletely on the easier .a little ~ve ap- clonizio a gopd I 1034 DEMONSTRATION CITIES . AND IUEBAN DEVELOPMENP k~gues op~osition to these concepts. ILt I could have some: weight to ` ~ie;lp to S~ll the new idea~ 4~sr: ~on~pts `to 1my eo[ this wou1d~ benefit m~r city. Our cO ar~ antiquatt~d. Ot ñances, maby of them~ are' ~ntiquated.~ ~ But `for many reason~ older cities, and I can sjeak with certahity for my own city, tI~ and has to be changed. I In the effort that I made in 21/2 years, I have not been con successful. ` If the availability of Federal funds were based community accepting modern ideas a~id con~pts it might b for me to oyercome the `opposition. Mr. FIN~. Of course, Mayor Whela4i,, your posilion here is different titan the. position expressed ~y ~ other mayors who h peareci~bef*re this comrnitt~e,and one~ p~ticiilar, Mayor Ad of Newark.~ ` I Mr. Wm~AN. A very good friend ~f~nine. Mr. Fmte. And a former member o~ this subcommittee and friend `of mine, also. ~ ` lie expressed some fear abouta czar Ioming in and doing all He cites, like Mayor Lindsay and ot1~r mayors that have t that he would like to `have a~ voice in `1~he selection of the coot and they wbuid notlike to leave the ~e~tion ii~ the hands of ` eral G~iverflment, and have th~ Fedèra!.G~ernth~nt'throw `do~ throats or ~Force ~dôwn `,your throat~ ~ ~4ñ~ne1röm Washingt does mt how ~Jersey~ City from a h~oi~4 h~1~iie wall a~id starts] your whiIØ city without your consentjor kn~owledge4 What asisthuce ` do ytu ` think th~ Federal'~dôr ~ dinator would cont hop~fuily ~pedit~ ? Mr. WHj~a~tN. In detail, not beingt'a prôfessiôiial in the municipal planning, I couldn't say. My `concept would be t coordina,tor would be~ doing just that,!he would coordinate al many a~n~ues that now exist for Fed4ral ` help to `our cities. know that 4ur cities cannot deal with lfhese prthlems without Federal ai4E But our efforts, many t~rnes, have been frustr that we 1111* go in many direetions I~ the coordinator had th and thc~ ~ctr~llinguess ~nd the ability `i~ó ~oordInate these ave would be luch easier for our staff tojwork with one man im going in nine directions, if that makes 4ense. Mr. Willis, being a professional, could perhaps give a. mo or technical explanation or answer to that question. Mr. FINO. All~right. Mr. Wn~is. If I may, we are fulI~r aware that Mayor 1~ position ow this is probably contrary t4 th~ statements of man mayors ~wh* may have appeared befOr3 you But we have ha~ good relat~i4nship with t)ie regio~l ai~n1~trat~r in Philadel the Urbafl1Ren~waI, lousing and fl~j~e Finance Agency, a with liEu!. ` We have found with h~ aèsisbance `and throi techniques ~f `the work of the prôgr~, `as bureaucratic as ti have seemed to have been, we found tli~se techniques have he] mayor in sponsoring~and promoting anil pushing the programs wants to b~ adopted~ and promoted in ` J~sey City. We don' Federal coordinator. I would sugge~ t that. the coordinator be in a position to make field decisio ris and speak for the of that. ~tified, dinator ie Fed-' , 711 your on that evising reas of ~ol and field of hat the ~ of the We all massive ting in' ~ power riues, it tead of "~ ~e lucid rhelan~s ~ofthe ["avery hia, of rid now igh the cy may ped the that he b fear a should E~giona1 PAGENO="0455" DEMONSTRATION ~~ITIES administrator. He heisgoin~ these prof in~ t1~ I Mr.~vv.. Mr. WIDNAI ~ttohe1py thought billion an i~EVELOPMENT 1035 60-878-66---Pt. 2-29 PAGENO="0456" 1036 ~D~fONsTRATIoN. CITIES AN submit før the record your own idea -not a * firm estimate a your cities would need under a prog `am such as this.. If yo could submit something like that in the near future, I wou ciate having it in the record. Mr. WHELAN. I might say this. We feel that Jersey City would be an ideal city for this program becaü~e, as I understar~d it, : test city means just that. We wai~t to test o it these programs ~ to s e if they areeffectjve in solviiig the problemr we have. It may be i hat these progra~ms will not or cai~tiot solve ( ir problen~s. So we a e testing ~ them out4nd.~ur city isnc~t too large ithat the effort that ca: be made at this time in sampling or testing which is what we ar talking , about, would not be lost. Sox~e eff :t could be made and : he effort could show results, b~ause wc are not too big, and yet we a: e not too small, that the sampling would not be conclusive. I think we are theideal size and we. have all the ugly si ial.. prob- lems that spring from urban decay in such depth that all of these programscould be tested. ~ : Mr WIPNALL Are you at the presefit time using to any maj modernizjtion and rehabilitation pf~ograms that is possil urban rei$waJ~ . Are you using thatfto any extent in Jerse: Mr. WIIELAN. We have now organi~d a division in our dev : and planning section for doing just t~iat, but to answer you: . with reference to what I think the mdst important criteria is ing a test city, I would say the willi~gness and ability of th nity to help itself, would be the most important criterion and Mr. Willis, the professional, could ans~wer the question in grea if that would be of any help to the com~nittee. ~ Mr. Willis ? Mr. W~uis. If I could just say ~ word on that. The have an ~proved general neighborh~d renew&l programs f~ part of the t~rea that we ~ have sck4,ed to be a dernonstrat This program calls for the rehabili4ation of four neighbo~: downto~ Jersey City and has been ~pproved for. approxim million of Federal assistance with $10 million additional be: by the municipality. W~ have the $10 million programed of public improvements out over the i~e~t 10 or 12 years. The point that the mayor made ~was that we now can these t~eighborhoods can, in fact, 14 rehabilitated and say we fear titiat should we be doing it 4 the rate of rehabilita we anticij$ted in our general neighb~rhood renewal plan, th time we p~t to the last neighbo~hoodj~r even the last neigh they woti~d no longer be rehabilitab~è. but . would have to h drastic aM more expensive treatme*ts. That is why we 5 accelerating the program. We laid i~ out and programed it of meeting our share of the financial Eequirement. If we cou that limitation and accelerate this *hole thing the downt could, in ~fact, be the kind of rehabilitation area that we planned it~ to be. Mr. W~NAu~. Thank you very mu~h. Mr. B~mu~rrr (presiding) . Mr. St G~nnain? Mr. Si~t~ni. In your submissjon, the one that is enti led "the .` Demonstrà,tion Oith~s Act of 1966-_.i Proposed Program f r Jersey I URBAN. DEVELOPMEN I to what feel you d appre- or extent le under City?' ~lopmeñt question in select- commu- perhaps, er detail ity does r a large `on area. hoods in tely $20 rig spent in terms say that d. But ion that ,t by the orhoods, ye more iggested in terms d escape wn area already PAGENO="0457" DEMONSTRATION CiTIES AN] City, N.J.," yougo~into de~i1 on ~ scribe 40 percent of the tot~1 area c what you feel should be tl~e demo w~mdered in view of the de1~ail you ask you a few detailed questions on staff does not really have ar~ idea 0: dered if you might ask the staff if ti jected costs? you, M~. 0 Aven ho ~ever, has need it, but because we don~t have ~ h mit ourselves to further renewal pr j In terms of the scale of costs, a submit a total figure-4n ter~ns of ti e roughly $20 million for do~wn~owi, have estimated it for a 10- or 12-y a town which has been appr~ved by t Urban Development. We have an a the Montgomery area and an additi Jackson area. That would roughl~ the range of $30 to $40 million ~s re~ is within the demonstratioi~ area th~á However, the legislation ~ its~lf ~o grants and advances for the prep~r ~ ~ area, and it would be in that stage ¶li . cost estimate. In the meantime, an course, during the executic~n stage i I and is already spending, soi~tet~iing ii ~ tal improvements in this ai~ea *hic i or not we are in the demo~istr~atio a borrowing capacity of sothething, f we mean to be spent. That 1 think s lem in this area without, if necessarjy, to do what we can. ST GERMAIN. Have ~Ou urba tion going on, two i project. Mr. S~ GERMAIN. LYeS,w .1'. S~ L_ to move FtBAN DEVELOPMENT 1037 with 10 points * and you de~ city that would come within tion area in Jersey City. I submitted, and I am going to specifics, whether or not your ection of costs here ~ I won- ye given any thought to pro~ smaii. of the items have. outlined~ tration area is , - ~ a general .rban ~ ~ ~al project or the one-quarter of the total area, newal, not because it doesn't sources to go ahead and com- in that area. ~ will not at this time tr~y to e of oosts,we have authori~ed ~; is, the Federal share as we eriod-~-$20 million for down- Department of Housing and ~ional $~ million roughly for ;3 million or $4 million in the me to believe that we are in d in Federal aid to do all that have outlined. rovide, of course, for initial n of a detailed plan for this ~e could get a more definitive uring the next stage and, of f, the city will be spending, ~ order of $15 million in capi- will and must spend whether a program. For a city with his year, like $3 or $4 million, ommitment to solve the prob- cleral aid.. At least a commit- newal projects now in prog- -in commercial areas or resi- - ime, that is with construc- ct one industrial-commercial experience with relocation? xperience that you have been ~ them in housing that is I f a tr es( ie id al ea ir ti~ it H 1, a r PAGENO="0458" I 1038 DEMONSTRATION CITIES AND URBAN DEVELOPMEN standard; living up to the réquiremei4ts that we anticipate th y should haves I Mr. Wju~is. * We have met fully t$e Federal requirements for relo~ cation ofl decent, safe, and sanitaryfhousizig. We are not unaware, however, that this is a problem. We ~iaye proceeded under 2 1 (d) (3). We have jiow under construction 200 ~nith and an additional 400 units and are about to receive Federal coihmitrnents. There are other as- pects oi~ meeting the relocation proI~1em which we agree is a serious one and will have to be solved. W~ have not had serious problems on the projects we have already cleared in our execution. e know the job will be a large or~e should w~e go into this, but that too, can be solved. . ~ ~ Mr. STGERMAIN. The housing.~Uia~ y~u are nowbuilding is repiac- ing subst~ndard housing? Mr. Wi~t~LIs. Yes. ~ Mr. Si~ GER~IN. You have Iow-'~ come families in that housing? Mr. Wtu,is. Yes. Mr. ST GERMAIN. What is it going ~O be replaced with? Mr. Wn~is. At the present time, the area undsr construct on in the St. John's project area is providing 1,200 units, 1,000 of whic are of a middle income-I distinguish middl&from moderate, and 20 of which a~e modera~te. We have low-rent pubjlic housing.in th~ proje t areas at this time4~ We have 3,800 units in th~ city of low-r~t publi housing. Mr. ST~ QERMAIN. 3,8O~ low incor~e. How many people ere dis- pla~ced inj these projects that were lot-income families ? Mr. W~t,is. I don't have that figufe. Mr. STGERM~tIN. Approximately ~ Mr. W~iiras. I can Only say that, tIn general-the densiti s we are putting back are higher than-~-in gei3eral, the densities that re going back into the projects are higher th~an the number of unit that we renewed. However, I know your point and I , appreciate fully the housing that is being built is not me&ing the needs of the fa lies who were displaced. Mr. STG~ii~i~. Looking tor page J3once again, point No. provides housing qr places tl~at oi~r residentsfcan afford. This pro ram that you are dontemplating ir~ the Demo4stration Cities Act, if ou are a successfu' applicant, you would gi4 more thought to repl cing the housing, low-income housing with hc$using for low;income f milies, is that correct ? ~ Mr. Wn~is. I wouldn't say more thought. We have been conscious of this problem all along. Mr. S~ GERMAIN. You thought you could put that into e~ecution? Mr. Wn~LIs. With the public housMg that is available which would be more acceptable in Jersey City tItan some of the larger i~nits, and we. are building 28~ public housing units in the city at this very moment. ~ That is not aci&juate to ~neet the needs, but w~ are pro- gressmg m that field with the new p~4ovisious of the }Tousing~ Act, and with the new programs f~r1eas~ng ai4Lrent supplement, if yo~i will, we can s6lvè more of this problem and flopefully all of it. Mr. J3r~iu~rr. Mr. Willjs, Mr. Fin4 has a couple of short q~iestions. Mr. ~INO. Thank you, Mr. Ohair~man. I ~just have one question, Mr. Mayor. PAGENO="0459" DEMONSTRATION thIES A: Jersey City has beeii the~reoipie: newal, has it not? Mr. Wm~AN. Y~?fS ; it h~ Mr. FIN0. My question i~ t}~is : ~ ~ stration cities program if J~ers~y C't lucky ticket and urban rei~w~1 fi n would you still be for this p$g~am Mr. WHELAN. If urba~ r~n~ral : u situation will be hopeless. Mr. BARRETT. Mr. Willis, may I i pose of this committee to cut a~iy u 1 city if they miss or are not lucky e: a the program. We are desir*us of h 1 getting these things corrected, whi slums, juvenile delinquency ~ an4I cri i city off in the entire Nation. Mr. FIN0. Will' the gentle~na~i yie d First of all, the mayor hats aireac not be for this program if ~t ~ut o ~ would not be the intent of t~he ~egis a well work out, because it is t~ied in t~ this is tied in with urban ~`enewal without intent to eliminate Jei~sey ~ renewal program, because tl~ey are c demonstration cities. I want the i aware of this. `Mr. WHELAN. If I may I~e able t vation. If Jersey City is not ~oin~ program. I think I can sa~v this. : gram. . I think this is an e~cel~ènt we should have it. If we were to be cut off ~ from. l~ ~ knell of Jersey City. ~ We ~ an times-I may say it here for ~he ~ city flows throughout the ~at~on i wealthy, the virile, intellige~it, ~con r in our cities. Their strength ~con throughout the Nation and ~ielped 1 ii , ity, and the land in the W~st. ~ No gone with the strong, solid, middi the vacuum comes the pooi~, unfor t a contribution, but takes fr~m us w i police protection and".fire ~rothctio ~. city included-unless this~problem s we are not going to solve th~ di~eim Mr. BARRETT. Mr. Mayot, may bill we will show the intent by rec r cities who are not cooperating in t. will not be in any way dair~ag~d bi ~ cations. Mr. St Germain ? Mr. S~r GERMAIN. I thii~k actua . meant when he said if Jer ey City RBAN DEVELOPMENT 1039 Federal funds for urban re~ you still be for `the demon~ left out, does not draw that ~re cut off from your city- are cut off from our city, our nterpose? It is not the pur~ renewal money off from any , to come within the scope of ~, not preventing, people from e call ~ookets full of blight, There is no int~rit to cut any wered the question, he would f~~ds.' But I am saying, it to do that, but it could very monstration çitie~ `program- [5 and it could very. well be rom this program, the urban .trating all the funds on these rs all over the country to be , your time to make an obser- , a test city, I am still for the iusiastically support the pro- pt and an excellent idea, and ei~ 1 aid, it would be the death ~ y an4 I have said this many c~i~ L-just as the wealth of our h~ heyday when the cities were ic~ lly strong people desire to live ic lly and sociologically flowed ld the Tennessee Valley Author- th wealth of ou~ community is la s leaving by the day, and in u~ e, who not only cannot make t .~ ibstance i~ heft in the `form of ~ ~ niess the cities, and my own n~ ~soon by.massive Federal aid, of urban decay. ni~ rpose ~ In marking up this in ~ this in the report that those e .emonstration cities program u~ of their urban renewal allo- hat m3~ colleague, Mr. Fino, to be cut off, i: do not think dr I st ar~ ai~ I~t a cc ak ob nt 1 e1~ I, PAGENO="0460" *i'040 rti~Mo~smATIoN. CITIES AN1~ URBAN ~DtVELOPMEN he wa~speakiiig~tboui *~ ~tb~ire~ent. ~ City has from the Federal Government, but Mther his question~i ~ ink, was directed to the question in the mind's o~a:g~eat ma~pei~oi ~ should a~ number of.óit~es,~say 50 ~cities~whe* submitting~t1Meir plan ~nd a.p- plications far urban renewal, w'ould~the~ then get a prefer nee that would eliminate the money for applications to other tha~ demon- stration cities ~ We all share that cc~rcern and hope that w can leg- islate in this area in such a manner 4 as not to affect other ( ities who wish to cpntinue with urban renew~l, although they are n t picked out as dei~ionstration cities. I think~the mayor of Jersey C:ty would I agree this~should be ourintent. I ~ Mr. Wtw~r~&N. I understand wha4 you mean, Mr. Con~ ressman. There is only so much economic stre~igth in the Nation and if this is going to be drained for this particular program and made 1 ss avail- able for existing programs or future programs, that is going 1 o present a problem. I am hopeful we, as a people in this Nation, ~ re going I to be prepared to make greater sacrifices to put a greater p rcentage of our gross national product into t~ie public sector becaus I think we as a people have neglected our citie~. While ~we enjoy great prosperity,~ on one ~ hand, we hair terrible poverty ~nd suffering, on the othe4 hand. So I would ] ope this program would be over and above ahd in addition to that ~ hich we hope to receive with existing progranlis or greater programs hat may become available in the future. Mr. BARRETT. Mr. Mayor, while y~bu are at this point, ths will be spelled out in the report. There will be no severance of th moneys allocated for urban renewal, and there will be a continuan e of the money allocated for the purpose of i~habilitating the city. Mr. FINo. I wanted to make crysi4 clear the position of t e mayor of Jersey City. I am sure ~t will b~ the position of every iayor of every city~, if his city is not includ4i in this program, tha he will not sufferother Federal programs, su~h~as urban renewal, an I would not want this program to go throu~h if you are going to uffer by reason of the new program. Mr. WHELAN. Absolutely not. Mr. FIN0. This is a fear we have and we want to make ure that there is no cause for that kind of fear. Thank you. Mr. BARRETT. Mr. Mayor, I certainly appreciate your con~ing here and I am now firmly convinced thatiyou are a great mayor~ . Mr. Wrn~LAN. Thank you very muc~i. Mr. BAm~rr. All time has cxpired4 We wilil stand in recess until 10 okjlock tomorrow mornin (Whereupon, at 11:04 a.m., the subcommittee adjourned, o recon- vene at UYa.m., Friday, March 25, 1966,) PAGENO="0461" flflONST] ~BIPAY. The~ 2128, 1 (chairman of L~ ~comm~.~ Present: Representatives [r. BARR1~T~ ur first ~ here this quite sure 3 committee. 1 abers are aJ ~ be al ~To: ~_1RCH &] 1~OUSE & 00., Mr. Rouse. I -- J mpany is en~ ,monstration ~l. WeL~ lit a new city Reuss, and ~, president, PAGENO="0462" I te farms and parcels o 1964, obtained our ap~ ~ obtained our zoning, ~rway. This in its fi rovide employment fo g units that will accou~ ipany executive, and at all the prices and re U ~O chui~ches, a hospit idings, and the full tex ~re that this ic trui r~taivalidityin the nat ~ We have studied th cities of 100,000 to 200, those cities to see that S tht~t ought to be acco STill live in Columbia. ~ sentiment. We expe d by a combination of i~Connecticut General and Teachers' Annuit d $50 million to our fin j~ct by 1980 is someti and we ink will ! land in royal by h~tve ob~ al form . almost t for the vill run ts of the ,l, a uni- ure of a , because iral tex- ~ growth 00. We we have nted for ~ it to be the Na- Life In- r Insur~ neing in ing over why we hat you hat this ~e Home tion, of )oard of he need r misun- `~sed and ler that Ly. The tl devel- 3ommo- ~s under as ~ ours e urban ~ indus- e out of ias been ent. 1042 DEMONSTRATION CITIES ANJi URBAN DEVELOPMEN' We have assembled 15~60O acres of l~nd in Howard Count: have under development a communi y which by 1980 we t have overe hundred thousand people. We ass9mbled more than 165 sepal 1963, con4ileted our plansin the yea Howard~wity Plaxnthig.Commissi tamed oi~k thianciñg and we are un would be a complete city. It will 30,000 pe~~le. It will provide dwelli company janitor as well as the ~ con through the whole spectrum of housin~ market, .It will A~onsist of over .50 schools aij versity, ~nc~rt halls, hotels, office but city. . ~ ~ I We h~i~n~ to some pains to ma~ we~belie~ that there is scatie fundarn4 ture of a city that has distilled over ti4 of Racine~ Wis., and Charlbtte, N.C.-4 have inventoried all the activities in accounted for the full spectrum of us~ to provide a full life for people who ~ We are doing this for profit, not foj a profitable venture. We ~ are financ tion's lar~t financial institutions-t surarIce ~b,, Chase Manhattan Bank anne Ass~$iation-they hate committ order that~we can build this city. The ~tot~1. estimated cost of this p $2 billion. `1 would like to back off for a minu~e and tell you how and ar~ doing ~ this. I think they are exactl~r the same reasons should pass this legislation. I am i~ery aware of the fact legislation is opposed by the U.S. Coi ~erence of Mayors, by t Builders' Association, andby the Mo tgage BanJ~ers' Associ which I In~ppento be a member and ~ former member of the gGvarn6rs~~ ~. `. ~ :~ , : ~ ~ .~ ~ ~ ~ ~ I tb1nk~he~t a~e ~ I think th y misunderstand both for thislegislation and its purposes, a d I think they seriousl derstand what the impacts would be i: this legislation were p~ Federal. ~si~tance was extended to ~ cal communities in o they couicl~ aseemble land in the than~z~ we have do~ privat country cannot rely upon the homebtdlding industry or up opers sw~h: aa~we to do this on the scalp which~ is required to a date the growth of our cities. There a~e too many circumstan( which it .*ould be absolutely impos& ~ for a company suci to succeed! and the need for fine cmii ~unitiee to accommoda growth i~ 1;oo g~eat4to 1~l~T 1* pon;the ~ ~dmof~tbehomebuildix try~as we i~ow m~st dGinthis country~ ~ ~. ~ .1 should~ explain to you that my coi ~ictions on this are bor: o~'actuaiexperience and put. of my ~ iole career-my career in the bUs1ne~s of mort~ag~ banking ~nd real estate dev~lopr PAGENO="0463" 0 LO `C L~4 4 Et~b st it~ tBA~T DEVELOPMENT 1043 have `b~ifltcitie~ in , little ~c$t Qnr~ ~ is~ on~ of the e~ ~n1~1tiiüor~ Washington, rren'tly servicing more than ~ çox~panies and banks. We ~ Mr. ~hair~ ~ Full near ~iymóuth Meeting Ccnt~ ~n )J;dn, ii~tropo1itan area. ~ ~ . , 1E~tuc1~3~ NQ~th Carolina, tho .~#si~t~ of building ~ big ion, t;i~~ t OCCU~S between ..t1~e mfl~uii~y. ~ ~ Ou build a shop- ces, the~iUàr ~partments, then ndoni;~ aeci~nt, by unpian, eveIop.wbi~h creates the prob- etured ldiid 9f sorvice is pro- ential, devêioprnen~ we have bett~jobcq~d i~ donêi~ we erarea~ :~ ~ ~ , ~r ~. ye ~ëu o~i~ ,ci~;iesgrbw by bits tter for experts-a1~ of us see ~ld axxd ~j~Ti$ raising hoi~es er farm br~k~ ~it. into hous- ut of ~:]~e bas~rnents, and ~e eleme1it~~ ~hool. Then the xies a;O'oOd ~p~t f~r a gasoline up. `the roadhasto be wid- th~n someWhere a junior laigh o:I. Now~he t~f~i~ has become park*ay i~ cut through the he 1th~c1 ~nótigh to yield to me out schools and high schools. I and women who ~L1~ here with ire interns of the Pübli~ Ilous- ising and Urban Development PHA regidi~al ~ffices to attend nference. ~ ~ e grath~atés. ~ They have bee~ii ~ moñ~hs ai~d in some case/s f~r exac~iy h~w the. Th~deral Gov- orities through athisory and or so añ4 return to their home ~ i,stter homes for ~Li flne4Ookhi~ gentlemen here, In various parts of this country. I DEMONSTRATION thIES ~ A As mortgage bankers ai~1 4~ve1 ~ bits and pieces all ov~ ~th~ tT~dte largest in the cóuntry~ W~ ha~~ b ~ Pittsburgh, and Chicago a~d we ~ $500 million in mortgages fq~r life ii ~ are also devalopers of large $gional ~ man, outside of you~r ~ honi~, ei~y o Camden, N.J., and *~ ~ust~ opene the northwestern sectiou qJ~,JtJae Phi ~ We have deveiop~cl een~rs ~ii ~ ~ew Jersey, and Ohio. We have. regional shopping c~iter-~4he in variou~ usesthat are neecle4 to serv ping center, and there is ~ p~arlbt f r for an inn or a hotel an4 gr4du~lly, ) a kind of business community begni . . tems of traffic and c~ige~tibn ~ind vided to a community. . ~ As mortga~ge bankers fn~an~mg r seen how limited they ar~ a~id 1~Ow i were planning and develophig ~ver It is out of this backgrou~d ~hat ~ ~nd pieces. You know, this ~ not ~ the growth of our cities., A ~farn ~ instead of potatoes, and ov r there a ing, and then churches b~ in. to c .i school. board finds it has t ~ p~Oyi e old road that ran through he area b station, a Tasty Freeze. ` rthic b .i ened and comes md1~3 deve opi~nent a sehool aud ~ome~h~e a sei ior hig~ s sp heavy `~ve need ~ii exp ess~vay landscape, and we hkve a clpve~1ea Mr. 13ARI~ETT. Mr. Rotis4, ~ou'1( just a minute ~ . . Mr. Rousi~. I will ind~d, siz~. Mr. BARRETT. You we$ talking We are happy to welcome the yotin -us in the audience this rnor~iing. ~ Ii ing Administratiofl, Depa~tmènt o who came here early last w~èëk fro: ~ the D~partment'sWa~hit~ton Tnt ±~ All of these young pe~i~ ~re a with the Federal Goverrni~ent~ at 1 ~ year, learning by ôn-the~job tr~ ~rnment supports lo~al ,l~oü~in~ ~ financial assistance.. . ~ They will leave W~hin ~thn ifl cities to continue with thei ~ career Thw-incomepeople. Certainly,. it is a pleasu ~e t~o ha . atid you mostbeautiful gir~s c~mh ~ PAGENO="0464" 1044 DEMONSTRATION CITIES AND URBAN DEVELOPMEI P ~ We hi~ve M~ Wid.nall here. i]~~ ~4s the minority leader. He comes from thi~tt great State of New Jersey~ and he has Itèen a grea factor in helping ~ur people, particnh~r1y he1~ing this cthi~iittee, to get legis- lation n~cessary to help the peop1e~ who ~ are in dire need Of decent ~ housing. ~ ~. Mr. WIDNALL. Thank you, Mr. Cthirman. We certainly welcome you here today. When onr chai man gets through spea~king to a grOup there is nothing ~eft for an: body else to say. ~ ~ ~ We eai~iest1yhope you enjoy yout~.e~perience in the brief time that you are ~iere and that you shall co4tribute toward your o n future and the ~visdorn of a better housi.ng~ program for all of ou country. We feel *e think of all itmericans 4s part of our growth a id of our economy,! and what is good and dec~t for the people of t e United States. *e are trying to do a job tog~ther up here on this col mittee to provide the tools to work with. Glad~o see you~ ~ Mr. BARR~rr. Mr. Rot~se, thank ~u very much fpr yiel ing. Of course, you know these young people lea~rn faster and much f ster than we who are over 21. In order to we~lcorne them here this n orning, I took advantage of your time to iflte~ ~upt. Thank you very much. Mr. Roust',. Happy to be interrupt d. Mi~ ~ You may continue. `Mr Th:~tsi~ I might just say plc lug up from this int~ ruption, without ~ven turning a~round to loo] aM to see what attra tive and . briffiant ~rOuflg people these are, I c n assure you of one tW.ng, they can plan the American city better th ii w~ are building it to ay. Be- ca~use any group could. Your cornrn'ttee members m~y not consider yourselves experts in city planning, but the knowledge ö how to build a better city is a common~lace khowledge in America to ay. We know it docsn't make sense to build ~chools and1 churches a .d stores and recre~i,tion areas in unrelated p~sitions in a cominunit ~ made- quately seirved by roads We know 4 doesn't make sense to bury the forests, tq put the streams undergro4nd in storm sewers anc to dese- . crate the: `andscape as we are ~loing..j There is, throughout Lmerica, a growing wave of concern about th4 failures of urban gro~ th. We have come to derisively label suburb~n sprawl and we need an ugly word-~we need the word "slums" in prder to describe' `what ~as hap- pening at the heart of our cities It~takes some ugly words to make us aware &f the fact that over the nekt 20 years we are goin ~ to add `TO million. people to the American city. This means we are ~oin~ to build a Toledo every month over th~ next 20 years. It m~ans that every single year we are going to bui~Ed .a new Denver, a ne~ Dallas, and a new~kthuita inAmerica-every ~ By .th~ tend of this century, the. P~esident said in his m ssage to Congress, find I believe it is a .reliablejgaess, we will build th equiva- lent in this American city of everything that has been bu'lt since Plymouth ~ Rock. ~ ~ This is the task that we have ahea4l and I doubt that the e is any aspect of Ame~rican life in which the gap is so great bet~ cen our knowledge of how to do something s~nd our actual perfori ance in doing it, as the building of Americai~ cities. I am not now talking aboutthe cenewal and restructuring arid reorganization of the old city. PAGENO="0465" I DEMONSTRATION. CITIES I am talking about the a1~so1~ite adding layer on layer of unrelated the outlying areas of our cii~ie~. Mrs. SULLIVAN. Mr. Chairman, this point ? . . ~ if this legislation is enac~ed~ do skelter building now going on in s would be stopped ? . Mr. RousE. No ; Mrs. Si~lliiran, think in America we just .~Jon't, a 1800. But we have been ~hrougI years in which we have eno~m~usl~ ual housing as such in Arperica. perhaps as the next step it~ the lad of enormous growth, that~ there important than housing a~id that live, the sense of community, the p~ we need to do now is to find. a i running. It is an importaht thend When we set out to btdld Col thought we were real fro~it-runni discovered that we are part of a ti4 as we thought.. The Ford Four of $250,000 to r the United States. each month-five co ideas and there are Electric Co., issued saw the list, that are i `~verrng rEBAN. DEVELOPMENT 1045 onsibility with which we are ng,. business, roads throughout I ask the witness a question at iink the unplanned and helter- an sections of the countryside L~t think it will be stopped. I 1~ sudden turn direction 90° or ocess over time in the last 20 ~oved the standards of individ- we are now becoming aware, nd also because of the pressure iething as important or more environment in which people es by which people live. What encourage this trend that is Lb~4t and to acquire this land we p~ioneers. But we quickly have ~Te are not nearly as pioneering of California ommunities in rneeting ~ral riany us ~rica today lace is di~- ~ ir D es C ttr 1 i 1 do )f jc~ (11~ so es~ 7t S a I PAGENO="0466" T 1046 D~1~NSPRA~tON C11~Th~S AND AN DEVELOPMENT If we a~re successful in Co1nmbia~, ai~d naturally I think we will be, we will be able to market land to `buiMers, small builders, wh would have had no opportunity to compete in the market-no opp rtunity t~ provide the quality of environments that we can provide. Of our 15,000 acres of land, 3,500 acres will be devoted to perman t open space, 1ake~, tennis courts, `swimming~poois, golf courses. is will be a part ~f the community. I There will be community halls in tlje village. The town ro ds will be smailtown freeways that are lands~$i~ped * and not chopped p with commercial uses. Along U.S. 29, whi~ch runs through Colu bia, we have acquired all the commercial froiltage and will decomm rcialize it to create a landscaped parkway thrbugh Columbia. `Phese are not fanciful things. These things are po~sib1e because of the siz of the land area with which we are dealing. * ~ Our first two lakes are costing us $1,500,000. That is a lot of money ~or a developer to spend. But we have 15,000 acres of land and this~ is only $100 an acre s retched over that iimch land. I We are providing a public transpoi4tion system that has be n care- fully engineered by top engineers to pr$wicle public transporta ion in a suburban h~cation. Everyone has written this off as being im ossible. We will ha,~e 40 percent of the dwellihg units in Columbia ithin a 2-minute walk of a bus stop that conne~ts all village centers an major places of employment and downtown. Our engineering stu ies say that this bus system can move on a 5-minute headway at 10 cen s a ride for adults and a nickel a ride for kids rand be fully econornica. Think of what that means. Think o~ what these things mea to the little biiiid~r who comes in and buys 50 ]~ts. I think that if we are right ; if we bu~ld the quality of envir nment; it will be because of large-scale land a4q~iisition and large-sca e plan- ning. Thi~ is the fundamental bedroc~.of what. we are doing. Other people would pl~~n it differently, so4o better, some worse. There would be hundreds of different process~ and a hundred differe t plans for a large land area. But anybody who took 15,000 acres co id do a better job than on 150 acres. A class of high school seniors co ~ id take 15,000 acres of land and produce a better plan than will be p oduced by developing in bits and pieces. If ~ve are right, if environ ent is important and our pace moves faster b~ause of it, then think * . ow this. will accelerat~ the market to want to d) it in other places. But let me tell you why it is so imp~tant for local agenci to do this. We h~we been very lucky to hav4 been able to do what e have done. We. . stumbled upon a fleeting ~ópp~rtunity. People ill be inclined to say, what the heck, you arefdoing this, Reston is d ing it, Irvine flanch is doing it, there are these large developments. Why is any Federal assistance needed ? B~it everyone of these evelop- ments, except Columbia, is the accident of a large single tract f land happening to still be available on the8dge of metropolitan rowth. That's too much of an accident for the ~ountry to rely upon. In our ease we happened to hit a ~ ~orridor area where th re was no sewer and no wathr-miclway bet*een Baltimore and W shing- ton-a fantastic growth area and. we ~ot tremendous financin . We hrd the Co~necticut General Life Ihsui~nce Co. join us in this roject. We also have had very good fortun~ in our* relationship ith the county government which has supported our planning and onmg. PAGENO="0467" DJ3~MONSTRATION CITtES tR1~AN ~ V]~I~OPI~tENT 1047 STATEMENT OF 3AMES ~ RousE ~ ~ . 4~ DEVELO Mr. Chairman and m~bers of the c z appear before you to testify 14 support~ it is importa~it tothe soni~ fi~tur~ gro grows out of extonsive e~er14nee in Ui ~ bits and pieces of the America~it city : A is attached~ ~ ~ May I begin ~y sayhig that~ I a~n a~ posed b~r the U.S. Confereiiide~ oi~ May Builders and by the Mortgag4~ Banker I have great respect for their órgaji1zat~ need and the purpose of this 1~gis~atiô it is ` passed. It is very mu~h i~i the tile bomebuilding industry an~1 our co enacted. ~ The simple fact is that, wit~i tI~e po government and in the hon~et~uilc~iug I Li orderly and intelligent way, f~r the me ahead. ~ Our cities grow by accidei~t-iy w agencies. A farm is sold an~1 b~gin~ r another farm ; forests are cut ; v~ulley sewers ; kids overflow the scbool~-he e Then more schools and more 4~hurches. ice stations, Tasty Freeze, h~mburge strangles. An expressway ~ is1 cut thri u which bring shopping ce~ter~, office ~i lessly, the hits and pieces of a 4ity are s 1 By this irraUonal process, r~oncomm s order, beauty or reasoli ; wlt1~ no vlsi 1~ sands of small, separate d&slons-n a another, nor to their compo ite 1mp~ e suture o~ our cities and ou civiliza "suburban sprawl." Sprawl is dreadfully ineffi 1en~. It s travel to work, to shop, to s~ orsI~i1p, t in ways that strengtheu cad a$, th ~ tionships andeoncentration of use~ won Sprawl is ugly, oppressive m~ss1v of nature-forests, strenms, h UsHes- housing and graceless, thstele~ s c1~ttter. Is antihuman. The vast, for de~s sp: ~ spotting of schools, churcheS,~ sto~res, ~ they are out of scale with people-be o big for people to feel a part of, responsi 1 N~w Jersey and it would. be a~ uld be ~ ba~tt1e in most metro- in t~iOst pi~a~e~ the d&vek~per for a müiute? You certainly ble in this field. I was won- bmitting the balance of your r members could actually read tè~isth~t~I~nt Which i: as~ne ~x~ré ~ by readifi~ d in the record without objec- e follows;) ~DEN~, CO~fl\~uNIPY RESEARCIt ~, INC. tee, by name is James W. Rouse. I ~e II of ~R. 12946 because I believe our country. My support of the bill ness of financing and developing the ne ofmy baékground and experience the fact that this legislation is op- the Na1~ional A~OciatiOn of flome ciation of America, and. that while beijeve that they misunderstand the nisj~dg~ ~what the results will be, if interests of the cities of ,~merica, as a whole for this legislation to be nd processes that now exist in local y, It is itnpossible to provide, in an itan growth which we know lies just the private developer and public g houses inste~d of potatoe~-~then filled; ~ streams are buried in storm ew school Is built-there a church.. file grows ; roads are widened ; serv- ds pockmark the highway. Traffic he landscape-brings clover leafs- igs, high rise apartments. Relent- ed across the landscape. ~ are born-formless places, without pect for people or the land. Thou- ith little or no relationship to one oduce a thajor decision about the a decision we have come to label ches out the distances people mu~t ~. It fails to relate these activitlea suppresses values that orderly rela- nulate. 11. It squanders the resources of roduces vast, monotonous armies o~f worst of all, sprawl is inhuman. It f housing, pierced by the unrelated areas so huge and `irrational that heir grasp and comprehen~ion-t~o , important in. a t ic. But this ~would be a~ ba~ttl4 in pajr battle ii:i p~rts of Long I~1and~. politan areas. ~ This is ~ bat~le would lose. ~ ~ , Mr. BAmu~rr. May 1j: st inte indicate that you are vei~ k$owl dering if you would, be esi~'ous statement in the record so th~t th it and know the answers. Mr. RousE. I h$yeh~Lt1 ~d in is for the recoI~d and. I di n't ~ it. ~ Mr. B~Rn~m That; n~a~ ~ h~ suij tion. It is so Ord~êred. * * (The complete staterneñ~ of Mr. g~ t~ itt )U ml Ui ut~ 5 pO t~LJ idi tt~ ti~ re fl- la~ st~~ at~ fo PAGENO="0468" 1048 b~MON~TRATIÔN CITIES ANI~ VEBAN DEVELOPMENT : The rieI~ness Of real community-in &~oth i~s support and its demand- is largely iroided. V~Lriety and eh&ice are reduced t4 a sort of prepackaged b anduame selection ~f~recreation, culture, and educafllon. The Individual is im iersed in the mass. ~ ~ I What nor~sense this is. What reckless, ~rresponsible dissipation o nature's endowment &nd man's hopes ~or dignity, beauty, and growth. ~ This subc~mmittee can plan better than w[e are building the America city. It requires no vast program of research, no technological breakthrough no huge subsidy, no army of technicians or crusadin~ volunteers to build better ~mer1can cities. We know the rough measurements of our future growth-how many eople we must provid~e ~or ; what they will require lü:houses and apartments, sc iools and ~ colleges, churches, hospitals, . offices and factories, retail stores, lumber ards and service stations. Our task is simply to pr~vide now for what we can calculate will be required to accommodate our future growth ; to provide rationall r now for what we knew is going to occur to arrange Jhe pieces in a constructive ray with a decent re~pect for man and nature instea~1 of Improvising franticall ~ and im- pulsively with each new thrust of growth aslif It were a gigantic surpri e beyond our capacity~to predict or to m~iage. I Why, in a nation with such enormous ci~pacity for organization an L produc- tion, is there such bewilderment about prc4ucing the environment in ~hich we grow our people? The answer is easy bitt frightening. We simply have no machinery, no process, no organized capacit~' in the United States to p~ t to work . the knowledge that exists among us about p'anning for the future groi th of our cities. Is there any other aspect of American life in which thegap I ~ so wide between our knowledge and our performance as in the growth of the ~merican city? The building of the city is nobody's bt4siness-neither governmen ~ nor in- ~ dustry. W~ have assigned a vague respons!bility to local government o provide for orderly ~rowth but have given it neith~r the power, the processe , nor the financial ca$eity with which it can fulfils that responsibility. The most ad- ~ vanced plathiing and zoning concepts in Ai~ierica today are inadequa e to pre- serve our forests and stream valleys and 4naintain open spaces. Ph y cannot produce well-formed communities with a ricl~ variety of institutions and activities , and a wide range of choice in housing densil~y, type, price and rent. As a matter of fact, zoning hasbecome almost a guaran~ee of sprawl rather than rotection ~ against it. Frightened communities with no alternative process avail ble, leap ~ to the illusion that low-density zoning will preserve a way of life and protect ~ against rising taxes. The 1- to 3-acre zoning that results simply extei da a thin ~ coat of suburban sprawl over an ever-widening area. Nor have we developed the capacity in th~ homebuilding industry to ~ produc- ing well pla~ined large scale urban developr~ient. Although the busine s of city building is t~ie largest single industry in A4~erica, there is no large co poration . engaged in il'. ~Jft;y building hax no General ~totOrs or General Electric- -no IBM, . no Xerox ; ~ big capital resources to invest ~in the purchase of large la d areas: no big resea*eh and development program ur~folding new techniques to roduce a better environment. There are no large corj~orations engaged in the en [-product production (~f the American city. City bulldling-the development of h rises and apartments, stores and offices-is the busine~s of thousands of very sm ii corpo- rations, no one of which has within its owfl resources the financial c pacity tO ~ invest millions of dollars in lbnd `holdings toc be planned and developed ver, say, :10 to 15 years. Thus, except for the occasicsial accident of a large land holding remaining in single ownership on the threshold of urban~ growth, there is no vehic e, public or private, by which planning and developm it occurs on a scale sufficie tly large to provide se~asitlvely for nature or for man. We face the ad4ition of 70 million peo~Ie o our cities over the next ~ ~ years- a new Poled~ each month or a Denver, a Di las and an Atlanta each y ar. Yet, not one sing~1e metropolitan area in the Ui ted States has plans to p atch the growth it ki~ows it must face ; and, if it ha the plans, it would lack t ~ powers ~ and processes to execute them. Phis.is the s~ te of our Nation and the p aspect of . our civilization as we convert over 1 mil ion acres of land each y ar from ggricultural to urban use ; as we move forward to produce, `over the next 40 years, in our urban centers, the eqtiivalent of everything we have built in ur cities ~ and suburbs since Plymouth Reek. PAGENO="0469" I most, m~ ~c~vernment. re have assembled, at s of land lying rn' ~erewe .e land foi ~nd ro~ - DEMONST T 1049 y in- areels Into I ~ou in PAGENO="0470" ~1E MONSTRATION CITIES AN]~ VEBAN DEVELOPMEN The ma3~rs have been misled and they w~tll see that this is so. But canii~t W~4t these pr4~rns~ars, wh~r tJi~ gro*th is~ rolling in on aUd ~tahd~4im1esSiywr1nging ~ our inablilt the dema~&s~oft~rtrafl gi~oiVcth~ W~*~w~ 1~ to oui~ ecsuntry to make o tion ~ the b~St thate~~t~ ~ ane~ ttot h~4dflt bank to `something nine the ~ eontr~tSt with the wcth~ieut, old I W]tieh we ~ kn~r ~e ~ust ~ r~e~eW. ~ ~ ~ ~ And .whai~ ab~Mitthe `h~met~iiide~ Th~ h~mebuI1ding Industry Is largest Industries in Americt~ and yet thi re are no large ~ ~erporatlo in it. ~ It~ J1.~ a ~r~1iIf~rtt1on Of ~nia1l ~ en ~rp~i~ tliat,~ ihdividuall: capitd1'to4nga~1n bi~*ge~aie de~lopn~é i~ ~ There ~revery few, if builders cI~Am~k~twho~oii1d have, out ~t tlieIr~ewn reeources, in million to lacquire the land that will be Columbia. AILd without ~ 4~lai~n i~g~ aTat gOo~i ~lOthrnuflit~r d Is aimosti1tflliO~siide; ~tet ~ 1lluztr~tte : ~ ~ ~ `*1. Wewbre~able"tO ~ir~set~V'e~the thi~ea mayor stream valleys in and over 8~OOOactes ot fo1,est-~+.beeaiiseo rlandhoiditiga were large transfer developmeat out eft~seareas or~to ~the iandn~ost suitable f ment. We have thus been ~sble to estabJ~It lakes, bridle paths an space systam which will sei~ the entire ~It~ of ~!3olumbia. Our first will cost o~ser $1,500,000. ~ ~ ~ ~ A buiMe~ a~qulringa fe~r hundred `aer( possibly have absorbed this cost. But a $100 pet'ai~r~ t~ ~our land ~iest-less, wel 2. We~ :li~ ~ro~!de~l toi~ai pnblic:~trafl~ system, ~tu~iili~ dii ~ its ~ oWn Hght-o1t-Wa~y pedestrian lwalkways ; connecting all the employint~eenters. T~rty~eréent of the ~alk~ of a'I4us stejjt Bu~é&Wlil run every and . a n1~ls~l a ride for~.kMS~ and, ~ accord ftlly eceno~dc. But the success~ of this s~ uses-major employment centers, ret~iil s1~ a large pOpnla%lon of prospective users. even a few thousand acres, could not hop~ 3. We have been able, In Columbia, to t they serve4~-an ~ elethentary sObool at the high schOe~ and a high scI~oo1 at the heart to walk or~rIde abike to school. At thepi Oounty, 1is~i~os~ihle that the county ~ wil year in s~l~oolbusing~a1one. ~nd the sek where the ~dds and their parents live. ~W approval :~ the school board and the loci school site$ to meet the sch~M needs in * ( cf this is only possible because of very planning. 4. We were able to acquire the ugly coitmercial Islands along U.S. it runs through the heart of Columbia, and we will be able to extin~ commercial uses. Thus, instead of havingt these ugly beginnings of c blight extehd like a cancer along the main road through our town, we able to establish Columbia 1~ike (U.S. 2 ) as a landscaped parkw 5 miles it passes through COlumbia. W will strengthen the comr and the s~rvlee to customers by conce: trating business In attra planned b~sines~ centers off the parkwa3 We paid premium price of this lifli4l, as high as $75,ø® ah acre ii some: instances, and we e to dO it on'y because we could spread the uxcess cost over our large ings. A devekper of a few hundred, or yen a few thousand acres, have asatexied this burden. 5. Washington's National Symphony has reached agreement with us 30 concerts a season in a summer musIca~ festival in Columbia eac the next 2O years. Thirteen Protestant denominations have joined form a Religious FacIlities Corporation an4 a cooperative ministry. T archdiocese and the Jewish ~alth are re~ `esented as participant ob this Church Committee and are working ~losely with the Protestan to achieve the ma~ximum Interfaith cooper tion. This is one of the m able dem$stratk~n8 of eooi*ration amoTi the churches that we ha 1059. be country our cities, to handle r civillza~ less than mer cities one of the a engaged , lack the ny, hothe-~ rested $23 uch large- velopment ur area- enough to r develop- , an open- two lakes I I .~or even a thousand acre èould not rea4 Ever 15000 aCres It adds only 4ieve than the value adth d. Qrtatkm system in `Colum ~ia-a bus ~se~ar~ted from the roa s and the Ulage centers, downtown, tnd major ~üiation will live within i 2~minute ~~iiiutes at 10 cents a ride for adults L~ to our engineering proj ~ctions, be stein depends upon a wide variety of r~r~b, ~efiices, hotels school , etc., and &, develOpment of a few h indred, or to provide such ~ system. elate the schools to the C( imunities eart of each neighborhoo ; a junior of each village. All kids ~ ill be able sent cost of sehoolbusing a Howard save mom than a millie dollars a )ls will be apkrt. of the C( amunities ~have been able to lay on , with the ~iann1ng commisSion, mc e than 50 1in~nbla over the next 15 ears. All large land holdings and ~ rge scale 29, where aish these )mmercial.~ have been y for the ercial use. lye, well~ for some uld afford land hold- could not to provide year for Dgetber to e Catholic.. ervers on churches it remark- `0 soon in PAGENO="0471" DEMONSTRATIQN CITIES. Nfl ~BAN DEVELOPMENT 1051 our country. The State depi~rtwent o pleted a study ~fc~r ~á 1ibi~i~ ~ysteui ~( u~e ot modern technói~y~ ~iic1i~thng retrieval systems. The C~ & ?. ~e1er~ muruications systems iii Oo1~inbia. au Q1~ communitywide co~rnnniu1~atiOns t: rnu~iity in America. All o~ t1ie~e de~ are iii~oived are pOSSTh~sOU1~V b~caus nity on a large enou~sc~th to spre~ wise be unacceptable, anti to support business systems, that small, ~ ~ie$mei 6. Most remarkab1e-and~ per~iaps zoning. Howard Coutity i~ ~sse~tia1] cause it despises the bits: and ~ie~es of are perched on the Mge o~ ~irb~n g~ 1962 election for coui~~y cox~im1$sio1iE tect Howard County~ again~ th~ ray that the announcement, 1 year later for tile purpose c~f building ~ city s~ perhaps a tou~ii of hostfUty~ I~ mu sentatives of your people, to knØw ~ new city, presented theth' t~ i±~e pe~ change in the~ county zoning~aw~ to c a new town district, not a ~ing~e pe ing request. The same p~op~e *ho a sprawl, accepted, and. sripp~rte~i thE would preserve the stream ~alle~rs ar entertainmeat, convenient, ~vell-p~a~n They were ~ willing. to, .acc~t~ h~gh-~i hoü~es, the vei~y lazid uses t~i~3r ~vere in a rational, beautiful, hum~n, well-i But uo~w, surely,, you are a~kin~ : "I azid flnance it priv~te~y, a~r~ th~ .sary?" Clearly, I tt4uk. th~y ape, oi ~ Let me remind you that ~ aip a banker I believe In the prt$te ente: In America Is the most prod~ictive in cannot do without assistance-the absolutely no means whatsoever by now constituted in America, ~an deve] that American need~ to aceomi~odat of the bomebuilding ~i4u~tr~ d~rive~ operators, and this v~ery ~ac~ gqar&n Is provided-that we will cc~ntii~e t irrationally, unrelated to o$ $noth capital among its 1ndtri4ual~ enterpri planning, and developrner~t. It ~acks quired to attract ~inancial invest~nent banks on the scale required to ~iand~ Of course, there are exceptions. The developers around the coun1~ry ~vho lumbia, And stieh new town~ wt~1 uni o~ American homebuilders a$ l~ft to The hope of the FHA,lns~1rEu~tce p to undertake m1ddle~s~ze de~elopment take larger developments th~n w~ould late planning and developm~nt ~ver] natural resOurces and prwi~1e óomn wife, and family. The FHA financing program has growth of the homebuilding industry I division standards and poin1~ed the w nE~W housing. It is specially appropriate that its the private banking and bu ldii~g in 6O-878-~6-pt. 2-8G ~ation hasobtained a grant and com- urnbi~t that ~o1~tenip1ates resoUrceful ~itere a~id iUformatiøz storage and :~o. ba~~ha~1e a special stUdy of corn- proposed the wo~t advanced ~ystern ~s been made arailable ~ to any coni- ae~its a~id ~ia~ others in which we Lre planning a complete new commu~ ~P~idual cost items that would other- tiOn, , cultural, health, recreation a~d ~iánned growth coitld n~t justify. ithportant of all : we obtained our al. It has resisted urbanization be~ ri, Its do né~trly all rural counties that . Zoning was the major issue in the `he ~*inniu~ ticket promised to prô~ c~1~ ifrbaag~owth. ~ou can irnagin~ ar assen~bty `of 1~,OOO acres of l~Xid eete~ With ~ke~t!ci~rn, ~rnxiety, ~ and s1gnifit~ai1t to yt~u, as Olected repre- ~ ~orn1~eted p~r ~4ans for a whole Ee ~öwa~d doinity and requested a a new zni~cl~ssffi~atIon known as a Howard County Opposed this zori- ~d and fought the invasion of urban ~lq~zneut of a whole new city that f~re~ts ; provide recreation, culture, usiness, an4 public transportation. artmeuts, garden apartments, town- ig w~en th~ were gathered together d new city. have been aJ~le to do this at Columbia wogrnws prop*~d in title II neces- )uld not be here now. 0 developer and. a private mortgage system Pl~e honiebuilding industry vorld. But there are some things it issistance it now resists. There is the homebuilding industry, as it is , sensibly organized new communities. !uture growth, The special vitality its enormous number of individual unless sou~e new form of assistance 1 our citi~s in little bits and pieees he be~uebuild4ng industry. lacks the un~ørta1~e large-scale land assembiy~ nanclal capacity and .orgaization re- Life insurance companies and savings growth of the American metropolis. ~ handful-perhaps two handsful-ot bract the capital to undertake a Ce- But the overwhelming preponderance Lmitations of piecemeal development. a i~ that small builders will be able that uliddle-size builders will under- vise be possible. Atid we must stimu- land areas If we are to preserve our ; that serve and dignify a man, his. led the underlying support for the rica. It has raised housing and sub- ~teady improvement in the quality ot rnce program now be used to permit ~s to, improve the neighborhood-the L~C, be t. fi t It] c~e a' uc ost ru ~ be ~te II oDt th~ dl ie ~ th its ~ ti on th~ is Le: ~itie 4 ,o1~i to Eu ;trt PAGENO="0472" 1052 DE~ONSTRATI6N CITIES AND 4f~8AN D~V~LOPMENT envirrnment-in which our housjr~g is hillIt. ~tI'he enormous growth of a calls for the piánuing and deve1opm~nt, not just of hot~ses, bi~t of new nities. This J~HA insurance program will be a~i important aid to private i in making J~ possible. ~ . But in ad~Ø;k~n to enlarging the capacity It possible fo*~ l~al government to take : th planning coth~unity development in the pat such action, jdecemeal, fractured suburban no threat to the private homebüilding indu local. governin~nt by initiating planning and. d the small builder handle on his own, can ci' small builder has a vastly improved oppôrtrni munity developer. We are performing evacti make the land available to homebuilder~ to b the market. ]3ut we will have si~pplied parkw~ halls, school sites, swimming pools, tennis c~ and offices to strengthen. his environment an~ The country needs to enlarge the applic 1 Columbia is bUilt. It cannot afford to rely o private developer alone. We have a national ties to accommfrlate our urban growth. Apro~ ment agencie& can be an important, perhap growth of this process. ADDuNDUM ~ Ontline of background and experience as relevant to the Issues raised 11of12946: 1. President of James W. Rouse & Co., In~., a mortgage banking fit offices in Balttmore, Washington, Pittsburgh, ttnd Ohicago ; servicing mo $500 million in mortgages for the 45 life insurance companies and bank it represents. 2. President of Community Research & D~velopment, Inc., a public real estate development corporation which h4ts developed, owns, and ii nearly $100 mi~lion in real estate in Texas, Ke~itueky, North Carolina, Ma Pennsylvania, ohio, and New Jersey. & President of Howard Research & Dev~lopment Corp., the devel Columbia, a ctenplete new city to be built 014 15,000 acres of land mid tween Washington and Baltimore, scheduled to have a population of by 1980. 4. Member of President Eisenhower's OomxUission on Housing Progra Policies, and chairman of the subcominittee~ whose recommendations the basis for the urban renewal program in the Housing Act of 1954. 5. Formely president and chairman of the b4ard of ACTION (America: cii To Improve Our Neighborhoods). Forme4y chairman of the Greate: more Committhe. In these and ether public ~Ctivities, eNtensively invo problems of utban growth, urbali renewal, arid metropolitan planning. Mr. RousE, Thank you, Mr. Chairmant Mr. BARR*IT. I am quite sure, with ~ou*r kn~wl~dge in tM: other memb~s would like to ask you que$ions. Mr. RousL Please do, sir. Mr. BAunnrr. We will eont~nue on thab basis. Mrs. SULLIVAN. I will conclude by sawing I am in agreemei' there ii~ nothing better than a real pla~, and I believe in pro assistance for planning, in the hopes of~avoiding or preventin~ hazard subui~ban building. But I am:poncerned about how i stop this-whether we could stop it if ~we developed title II proposed leg~islation-so that ive can ~d the areas surroundii cities that wa!nt to plan this kind of dcvel4~ment. Mr. Roust. In Europe they only stop~ it by flat. They say a London there will be a greenhelt and th*~t's that. In America only going to stop it by tw~ things, b~ local planning `and do r cities ommu- dustry I~ the homebuilder, we mu initiative in acquiring la L Of urban growth where wawl is the alternative. ~ry but an asset. , It me~ velopment over a larger ar ate an. environment in w] ty to compete with the lar y this role in Columbia a uild individual houses for Lys, lakes, open spaces, con urts, employment centers, I support his market. t;ion of the process by ~ the capacity or the whin ntérest in seeingbetter co ramof loans to local land tndjspensabie, stimulant t make id and ait for This is `IS that a than 1db the `e corn- aT will sale to munity stores, liich a of the imuni- evelop- to the ,y title 1 with 0 than which y held anages yland, per of ay be- .00,000 is and ormed C~un- Balti- ved in field, ~; that iding hap- 0 can f this g our ound e are .elop- PAGENO="0473" N~tENT 1053 ~iswh~ ~ possible, I authority to bc opment ~can ~ price, sewer and water and ~crement in land in ion-nothin~ t are munity development' greenbelts to protect I Financially it is well-planned~ alle to pay ~,5OO of this, L' by proving in ~o1e conimunity ye the beneI~ t happens t( e stre~~ - nornics of reen spaces, eresting `and I TI necessary for you to ~ years in had to stru one we have tradition in the PAGENO="0474" I iQ54~ DF~MONS~[RAT1OW' ~ITiES~ ~N~1~B~N Baltimorejmetropolitan area in that i~edo not have a prolife ation of local pQTh~ca1 suMivision4~. Ba1tim$~re County ~ which al ost sur- rounds Ba~Etimore City and has 6OO~~O people is one single govern- ment T1~re are no incorporated to~vns, no separate sehoo boards, one poiitic~ti arm. Howard County in which we are, *hich is between Balti ~ ore and. Washington similarly has one gover*rnent, one county gov rnment.. And Anne Arund~1 County has one ~xcept for Annapolis, t e ~ State capital. So that we would be flying i7 face of very strong tra ition if' we sought to incorporate and we wil' not. Columbia will b a corn- munity , ib wiU be part ~ Howard C4unty In physical for it will be an identifiable city. ` In :~o1itjcaj f~rm as far as the police, schools,, courts,.~ rec~rd~offlces~ planning, zoniii~ the usual fundarnent 1 range of local g~vernrneuta1 services will be~provided by the count . We arO *reating a kind of private .g~iternrnent. We are crea~ting the' Columbia Park and Eecreation Asso~ation which will colle~t an as~ sessment through deed and agreement~of 7ö cents per hundre dollars. of assessable base. This goes into a fiind that provides the ex ra layer of services. in the park and recreation~ommunity halls, and o forth~ That we will control. It will be a nonprofit corporation and we will control it~ With each 5,000 people tfteiy will elect a ~ memb to the board and ~y th~ time Colinnbia is ha! developed the commu ity will have a majority of the board and will frrntrol it `and then year by year we will dr$p a member of the board u411. there is a complete t nsition so that the~comm.unity takes over'this ~ind of private govern ent.. Mr. Wn~NALL. How do you contro1~the population? Ho do you control the economic and racial integraiion? Mr. RotreE. We don't propose to control. We propose it will be wide open. Mr. WmN~tiL. Wbat provision in t~e 1~$,OOO acres do you ave for low-income groups ? . . Mr. ot~s~. Well, agaii~ we aim t4 ~rneet the lowest moo e level that we ca~ economically meet in th4: market. . We can't d better than we ~1. ~ , . . Mr. W~P~AU~. What does that mean' Mr. Rot~. That means in the Bait . ore-Washington area ou can build today a two-bedroom house to sel,, in the $13,000, $14,000, $15,000 price range, ~ which means you can get~ down to something uk $80 to $85 a month. You can build a two-be4room apartment under conven- tional financing efforts that will rent for as low as $100 a mo th and if you use ~the nonprofit, 21(d) (3) provisions of the FHA, ou can get a two-bedroom apartment down t~ about $65 to $70 a rn nth. Mr. Wij*~Au~. Would people be ac4e~ted for that housing if part of the rent rwas being paid by welfare t~ie'sa~me as in the big cit'es ~ Mr. ROt~sE. As far as we are con~med they would be. I can't ,:~ answer tha~t in terms of the housing ~gencies. We are very serious about the `fact that one ~of the deficits of sprawl, we thin is the narrow stratification of in~othe levels ~nd from a marketplac stand- point-'.we are approaching this as ~ marketplace underta ing-to develop a city we ought to be approaohing all of our marke . And one of our markets is the laberers who~ work in the communit , either in construction or in service jobs, ju~t as one of the market is the `I PAGENO="0475" DEMONSTRATION~ è~TT~S executives. Our plan cc~nt~mpla whole spectrum of housing and we I think it is important that w economic to do it than not to do it,] Mr. WIDNALL. I just had this i want to do. Take Washington, f to a certain extent but you have going to have economic segregat Washington? Mr. RousE. You can look at ti ends of a telescope. It is segregati ing if it is voluntary. I believe- of rules T am expressing, not a could produce a truly open comm doors closed, then I think that t clustering by economic level,. by and I believe that this clusterii neighborhoods. We know perfectly well that w house alongside a $20,000 house y~ hand, Columbia will be a system each. And each village consists 0: each. ~ Within the neighborhood nomic band, but within a village income levels and certainly witl integration. Mr. BARRETr. Mr. Reuss? Mr. REUSS. Thank you, Mr. Cha You say in your statement, M: posed by the U.S. Conference o while in the past the U.S. Confer they have not renewed their opp happily vague. Mr. RousE. I am pleased to km it was opposed to by the U.S. Con it I kind of had the feeling that they wouldn't oppose it because doesn't make any sense to oppose it Mr. REnSS. This is one of the b our cities, is it not? Mr. ROUSE. Well, take the cit area of Baltimore since 1945 has of Denver, Dallas, or San Diego. and 1~)85 the Baltimore metropoli Houston. In that same period of time Wa than Baltimore. These are the occur by the hit-or-miss method to happen in well-planned commu interest to the city of Baltimore the growth around it occurs in d more as a political entity have ev D ~1~BAN DE\~ELO1~MENT 1O~5 at we ~ \vill r~ch thro~igh the this. ~ T 1~hJnk that it is more ~1think that- id. ~ ~hhik I know what you ,;tai:E~. You have integi~atiou r~ii~~ segr~tion. Are yoU not I Cohxmbia just as well as in rd "segregation" through two it Is~ cofrip~i1ed and it is cluster~ ~bis is a kind ~ o~ pragmatic set ific * one,-~-but ~ 1 believe if you in which,tKere really were no wt~iM be a~kind of voluntary lectu~l interests and activity, ~tild~ oc~ur `iii relatively small on attempt to market a $50,000 ~n~t do very ~ll. On the other lages of iO,0~0 to 15,000 people hbdrhdod~ ôf500 to 700 ho'use~ migM be. quite a narrow eco- e can b~ ~uité~ wide hand of village th~re ~ would be racial Lie, that this legislation is op- yors. My impression is that of Mayors has opposed it, that 1 and their present position is at. I have been informed that ~e of M~ors and when I heard could only talk to the mayors really shouldn't oppose it. It ~ys of relieving the pressure on Ealtim~e. The metropolitan a population bigger than that ~s is since 1945. Between 1965 rêa will add a city bigger than ~on isgoing to acid a city bigger o:~ growth. This is going to ye now do it by or it is going . Can it be of any conceivable )ohtical entity to s~e to it that ~r ? DOesn't the city of Baiti- terest in sè~ing that the metro- 1 .1 t l~. ax 1] * ii i~l e I a fl~ I 5 w cle I I at tie a, ~ 1~ . . ~ ~ PAGENO="0476" ~ T 1056 ~ - ~ DEVELOP1\~1!JNP' pcilit~an ax~ of Baltimore is the best .ik~ssibie environment fó peop1e~ to live in ? In the end this feeda support. and strength to al of the kinds of things tha~t ought to be ~ th~h~art of the city. ~ The city of Baltimor&s task like a~y. other city is to ma e itself work to get rid: of its obsolescence,. to ~Iear its slums, create laces of beauty~ I~; has all the advantages in~the. world to begin wi h. Co-V lumbia wo~ild be off `and ruiniix~g if 4ha4 the employment there is in the cent~r of Ba1timor~if we had ~Iic harbor that BaItim re has,. if we had the graduate schools, the Ui~iv~rsity of Maryland, èábody Conserva~t~ry of Music, the central bi~anch library-what B itimore needs to do is a better job of con*ehensive planning fo ~ urbam renewal. , ~ ~ If the outlying communities are better done they may have th~ effect of causing the city to see how &t ought to do a bette * job of environmetital planning and in the creation of better new co unities withm the city Mr. Ri~u~s. You have~been shown t~ be enthusiastic a prop nent of new town ~eve1opment rather than spfawl on the fringes of he city. instead of being opposed or 1ukewa~na, the conference of mayors ought to b4~ out in front on this one. YQU have also shown n your testimony4hat it is puzzling thu~t the Association of Home uiid'ers~ seem to be opposed.to new towns becai$, as you point out, ne towns are a great place for homebuilders to build a lot of homes. A third organization. which you de~ribe as being in oppo ition is~ the Mortga~ge Bankers' Association of America. You happ to be a very large mortgage banker yourself and if I am not mista en that is where you made most ofyour money. I Mr. ROTT~E. That is true. ~ . . Mr. Ri~u~s. Actually, is not anewto~vn a great place for a m rtgage banker toi4ake some money ~ ~ Mr. ROiJSE. It is just incredibly s1~ortsighted that the rtgage Bankers' Association would oppose tl4s legislation. Evei~y a pect of real estate investment seeks long-term tvalues, stability, solid rowth,. assurance against the kind of erratic, 1iit-and-miss, uncertain growth that occurs in the metropolitan areas $oday. This oppositio on the part of.the liome Builders and Mortgage Bankers' Association s built, I am sure-I am not really sure-I haTe to say I believe-is b ilt out of a fear that it is going tobecome som~ kind of a new form of overn- mental con1~ro1 over private business. ~ ~ ~ . Mr. REu~s. In fact, t~he people who ~v4i1l make the loans whic would make possi~de the new towns would befthe private mortgage ankers, would theytnot:? . ~ . . . ~: Mr. RousE. Of course they wo~ild. ~u know, there is a ver, unique aspect of the growth of American cit~.es that there are no ig cor- porations engaged in the business of city building. This is on of the largest. industries in America. and the~e j~.. not one single la ge cor-~ poration engaged in the business of cit~buiiding as.a business. Alcoa is involved and General Electric is involved, but their main usiness is sométhhig.else. There is no autom4il~ manufacturer-no eneral Motors of pity building. It is ~ prOl~fcration of little corp rations and none o1 us, the biggest of,us is n~t ~apab1e of going. out an doing thiskindof~thingalone. . .1 PAGENO="0477" .DEMON~T1~ATION CiIIIES A~ UE AN DJWELOPMENT 1057 ~n get in under on cities pro~ ~ARRETT ~ Rouse, we ce~i 1~ appreciate your coming here today and giving us your ve~ry `ine 4n ~r ry informative presentation.. Thank you very much. ~ Mr. RousL Thank you, ~r. Barr~t . (The following informatibn wits sii r~tted for the record:) AM1~S W, Rousr~ & Co.~ 1N~. . March &T, J966~~ ~ ~ Congressthan WILLIAM A. EARR~Irr, Cha~trma~n, ~ubco~nittee o~ Ho~sinq, Committee on Banking a~nd £Yv~rr~ncy, Hoii~se of Representc~tive8, Wa~hJ~ng~on, . DEAR MR. BARRETT ~ It WE~S a great pie 8 ~ tO have the opportunity to appear bei~ore your committee and to te~tif~ in b h j1~ * f the proposals ~or expanded Fl-IA mortgage insurance covering 1$uid pure se~ and loans to local land develop- ment agencies for eommunlty'd&velopme ~. I understand that you have some co c rn over whether or not the full pro- pos~l is acceptable to Oongres~ at this t~in. a d that you are interested in know- lug whether or not a limited pi~ogram t test the Federal loans to local -land de- velopment agencies might be ~ffective. I w nl,d feel that a very good way to launch this effort and to Oxp1o~,e t~-s eff C lye es-s would be to make loans avail- able on a demonstration basis to, ~ o~e local county or township govern- inents around the country to see how ft ~ti e they are in using it to produce- well-planned new communities. Best regard-s. Sincerely, - - . - JAMES W. RousE. Mr. BARRETT. Our nex1~ w~tne~ ~ will be Hon. Louis DePasca1e~, mayor of Hoboken, NJ., accomp i~ by Raymond G. Olyons, co- ordinator of urban renewa], direct i- - f ~ OPES, Inc. : We are glad to have yo~ here ths m rning~ Mr. Mayor. We desire to make everybody cornf4rtable o omes here for the purpose of ~ offering testimony and w~ want ~ ex end every courtesy to you be- cause we have learned oi~ so ma o casions from your great Con-- ~ gressman that you are one of -the re t mayors in the State of N~w I Jersey. I certainly want you to no Hoboken has sent us one of the finest and knowiedgei~ble and ro uctive Orngressmen who have ever come into the Hails qfdong ~ s nd I wøuld like to ~iave him in- - troduce you here this morr~ing. - - I ) not because LL~~a that solu- i massive PAGENO="0478" 1058 DEMONSPRATION CITIES A~rD URBAN DEVEtOPME T STATEMENT OP flON. ]YO1~'[Th~TOKt. DANE~S, A ~ ~ ~ IN OONGi~ESS ~1~OM TRE STATE OP KEW ~~EBS Y Mr. ]I~ANfl~LS. Mr. Ohairmaii andmernbers of the ilousi g Suheom- mittee. I I first want to thank you for ~our most kind re arks con- cerning znyseif. ~ . . I would a~so1ike to e~press to yo~i my sincere thanks an apprecia- tion for affording me an apportunitj to appear before this honorable conunittee to introduce the next witness, Hon~ Louis DeP scale, the. mayor Of the city of Hohoken, N.J. ~ I have the honor of representing the city of Hoboken, ne of the loca1itie~ located in the 1~th Oóngres~ional District. Mr Ciiairm~n, there probably is r4o city where there is gr ater inter- est in th~ concept embodied in the le~islation which this sub ommittee is consid~ring than there is in Hoboj~n, N J lioboken is n old city which Ju~s açro~s the riv~r from Ne* York City It is ofte referred to as the mile-square city for the ~bvious r~ason that it is exactly 1 square mile in area. It is the se4ond most densely pop lated city in the United States with a populatiop of 48,000. . ~ I There are those who have said tha~t Iloboken and other ci ies which were foundedin colonial America h~we had their day and hat there I really is no future for these cities. ~i~'ortunately, there are ome who do not share these sentiments and fortunately, there are so e of these forward-looking people who get elec~d to municipal office. oboken, N.J. is f~rtunate to have in its may4r'~ office a man who bel eves that the city l~as a future. Fnrther, he ~ willing to work to a sure that future fo~r the city which he has ser~ed well since his recen election. Mr. Chairman, I think when this lekisiation is enacted into aw there will be no city more deserving Of the consideration than oboken. Its geographic location, its facilities a~id its great potential fo restora- tion and renovation make it an ideal city for selection as a d monstra- tion city. ;~ It has one other great city asset. ~boken is fortunate to have the enthusiaa*i and leadership of a verjr oflthtanding mayor. It is my great hoi4r and privilegc to presei4 to you the mayor of oboken, N.J., th~ ~Tonorab1e Louis DePascale1cvh~ is accompanied by r. Ray- mond G. ~Jllyons, coordinator of nrban~rene~vval and director of the anti- pov~rty program. Mr. BARRETT. Thank you very mwih, Congressman Daniel. Mr. Mayor, I am quite sure Mr. Wi~nal1 is also most anxio s to wel- come you here this morning. Mr. WIDNALL. Thank you, Mr. Chairman. As a fellow New ~Terseyito I wouldilike to welcome you fore the committee. We know how effective jour Congressman, Mr. Daniels, is and he is a fine Member of the Hou~e.. ~ lie has told us of t e many. things.tMl you have achieved in youij own city and we certai y look forward t~hearing your retharks thda~ ~ ~ Mr. DE1E~ASCALJ~. Thank you very ith~ch. ,~ Mr. BAn~mrr. Thank.yo~i, Mr. Widn~dl and Mr. Mayor. . You may start your testimony. if ~ou desire to complete i before having any questions a*ed, you may 1o so. If youwould lik to sub~ mit your testimony it is agreeable to us. PAGENO="0479" DEMONSTRATION CITI~S AND AN DEVELOPMENT 1O5~ Mr. DEPASCALE. I have a v~ry brie ta elnent I would like to read the committee. Mr. BARRETT. You may pro~eed. TATEMENT OP ROlL ACCOMPANIED ~imittee, I i to speak on ~[y name is Louis I feel that in pre~ y but mai~y of th~ we are a model it e~ampIifies ~- one of our Conference y were we a to our need the circuin- ~erally aided In common ~ of the local ~ and co- ~t ;~n our ---V ~ ~ ~ ~ ~ ~ ~/ ~ ~ arrest in exodus ( ~ ho hav~.~ long been resident here. ~ Hoboken, as you doubtl~ss Irno , is a self-contained square mile. We are separated from our~ neighb r t the north and south by rail.' road lines and enclosed on the east 4 est by the Hudson River and the Palisades, respectively. ~ Withi th se si*rply defined boundaries are all the components of the con orary American * urban scene. `~ The city is, in fact, a mo~Iel of 11 t at is most hopeful and most troublesome in our country~s o~der ~ ics. Located directly betweer~ the H~ 1 ~i and Lincoln Tunnels, we are only 10 minutes away fron~ mi4to~ o~ downtown Manhattan by bus, tube (PATH) , ferry, ~r a~ito~nobi~e ile not the n~jor port that we were during World Wa~ 1, wh~n t1~i t~ity was the principal port of embarl~ation, we still hav~ m~n~ ~ ti e waterfront facilities-Beth- lehem Steel Shipyards, P~rt of w York Authority piers, ~ and a busy lighterage pier. W~ house t el astern terminal of the Erie- Lackawanna Railroad an4 are on r~i'nutes away from the region's major highways. One of the o z~ ry's outstanding engineering. schools, Stevens institute, is loca ~ era. We still have diversified. industries of national rep~at~on ~i~t el & Essex, Standard Brands, General Foods and West Virgi ~ P ip & Paper, to name a few. We have a heterogeneous ~optilat' o . liich, we are told by prominent sociologists, shares a coii~im9n S I ~ o~ cortimUnity. The city has a rich history with man~~ "first" g ~ng back to the 17th century. DEPASCALE. Mr. Chal -~--~ t:~ have the c oftheTh scale ; I am the r -~ .ou.r situation . . thro ent urb~n 341 is a r needy ~ out have also severely I stances, the full rewarth -- ... - i~ranis always seem t many other I share almost a 1 ordii~atel mobil PAGENO="0480" J is ~ ~ --- ~JO13OL ere responsible for C ~ent of oii nual income. .~ ~~ance t~s freight ea4'riers and are in his threaten our tax~ base, but it has contri uted to a ~ in industrial ra,tables ~rid employment. Our vater and tems require an estimated $25 million worth of re airs, and Dated new State directive requiring additional se age treat~* ment ,, ii add another : $5 million to our obligations. The per- centage of our housing rated as sour~d, with all facilities, b the 1960 census is fourth lowest in the Natjon for cities of 10,00 or over. The medjan income of Iloboken fai4ilies is sixth lowest in ` he State, and our ~ per capita expenditures ~or welfare are ~ seeon highest. Against this, our effective tax rate i'~ the highest in New Je sey. My administration has accepted tl4e fact that there is no hoice but to make a major renewal effort. Ov~rthe past 15 years, th city has built approximately 1,000 units of lOw-income public housi g and is proceeding with plans for 250 additi~nal units of low-incom housing for the aged. The total will approaôh 8 percent of our tota housing supply. Construction is underway o~i our first urbati renew 1 project which will supply 400 units of n4 ~ moderate-income ho sing. A second urban renewal project, aim~d at providing midd -income housing, i~ approaching the acquisiti4n phase. Our early experience with renew~d and various other ederally aided programs convinced me that ~ur limited re~ouroes ould be effective otily if all public actions wer~ carefully coordinated nd pro- gramed on a communitywide basis. ~ As a result, I was re ponsible for initiating a community renewal program and served as it unpaid director during the 2 years prior to my election as mayor. 0 e of the advantages of being a smaller city i~ that it is possible to onsider the entire city in such a study. Sintee my election, I have created the post of coordinator in my office. 4s a result the code enf rcement program, public works pliwning, urb~n beautification plans and the renewal p4ojects designated by our ~RP are being schedule to re- inforce eac~h other rather than to di~ipate our capacity in random fashion. * ~ ~ In undertaking our antipoverty pr~gram, we again chose o enter through a program development phase. As a result, a . co mumty action programs are being designed tb mesh with both our newal and education programs. We hope te use OEO funds not only to combat poverty, but to strengthen o~ir social resources by reating new leadership at the grassroots level. Nor have we overlooked the privat4 sector. It was our a visory council, cothposed of a broad cross s~tion of our communi y, that I 1060 I~EMONSPEATION CI'flES A~D UR~AN 1~VELOPME P , we are informed by the I~gibnal Plai~i Associati n; that w 1 place"-the only a$hentic river town on the lowerl ,j~a~re~ -- our l~he Betwee~ oi densely 118 popu- PAGENO="0481" I~EM0NSTRATXON CIT~ES J ~nthusiast nstitute, and the P~ This brings me to ~ ~ionstration Cities~ would like to join ~twould _1_ wou] cities c~ the heart of the mati An important eor~ -~ ~ other done to ~ wen under I funds a .ediate here a i in smaller the money r ii for implem ains I while, this e I In admin join us in 1 7aluable ted he continua~ and T5rba] inator .w D~V~iLOPMENT -1061 ms of the ~. a national com- ~ the grants a corn- ~andan- partment of )fl of a Fed- "~source in PAGENO="0482" 1062 DEMONSTRATION CITIES A~TD URBAN DEVELOPMENT can be converted into larger scale answers through use of the properi factors. We heartily commend the vision $~iown in the Demonstration Cities Act aucl.urge your~upport~for it. ~ Thank you. Mr. ]3unu~rr. Thank you, Mayot DePascale. 1 am now certainT convinced that the comments they ~ftke about you as being a great mayor are absolutely true. I hav4 no questions. But I do wish to thank you for your very fine and iiistructive statement. Mr. DEPASCALE. Thank you very much. Mr. BAiu~Err. Mr. Widnall? Mr. WIDNALL. Mr. Mayor, I wou'd like to commend you for your statement, also. I know, if we are going to pass t~ie demonstrations cities pr and cover medium-sized cities, th~t~ we tend to think of New Y c Boston,i~nd places like that. But I l4now yours would be a typical one where something effective might be d4ne. Do yoi~ have any estimate of what you think you would require in Hoboken~to do this job ? Mr. DEPASCALE. We would ne&l aj minin~um of $50 million for ap- propriate renewal program. We aheady have the communities re- newal program that we have been working on for a couple of years. Our budget is $50 million. Mr. WIDNALL. Thankyou very mu4h. Mr. BARRi~Vr. Mrs. Sullivan ? Mrs. StLLIVAN. No questions, tha4 you, Mr. Mayor. Mr. BA~RE~rr. Thank you, Mr. Major. All time has expired and we certainly ~ire grateful foryour comme4its. Our ne*t witness this morning is Mt. Robert L. Windham, of Robert Windham & Associates, Dallas, Tex. We are grateful for you coming h~re this morning and as you no doubt heard me express here on other occasions we are just hopeful we can make you feel comfortable, completely relaxed and I am quite sure we will be the beneficiaries of y~ur very fine testimony. If you desire to read your testimony withou1~ being interrupted, you may do so. We will go ~~Jong with you. You ~ay start. STATEMl~NT OP ROBERP L WTNJ~HA~, ROBERT WINDHAM & I ASSOCIATES, D4L~ TEX. Mr. WINDHAM. Thank you, Mr. Ch~irman. It is going to be a little difficult to 1~ollow Mr. Rouse. I-ic well cov~ ered the integral parts of our operations. We, too, are participants who are engaged in similar projects. I might just touch on one of them, *rhich is practically o~ the same nature as his, except in a different ai~ea of the country. While Mr. Rouse is involved in some 15,000 acres~ in a mass populated area, ours invokes 16,500 fee acres and 2,000 g~ernmental leased acres on the shores of take Havasu in t~e lower c4iorado River area which is the border between Arizona and Oaliforni~,. This pr~gram is different, perhaps !in one aspect, that being that the development is primarily a large land development with a great PAGENO="0483" merchand Wing prod chasers of land for: to this new area o~ coming from t'z~ so to speak. Mrs. Sullivan, we ha~ people who have ~ i r~ testimony ~ form of an article and I read it. It ~`s out a pror~~ by assed ~ city is b be for, or include. Mr. BARRETT. Mr. 1~ -~. agre& we consider the all great 1L is ap- miles )rnia populated an reservations. is a very, very great J pur- nd movement t the sales are he~ cold country, and development at are now provided t acts c~ ~ FHA. ~bion as imunities velopment that would DEMONSTRATION CIT~ES A~T ~ AN D11~VELOPMENT 1063 ram is oie~v~ I areas, the closest ~tely 150 air miles. ~ Ld it is about 300 miles ea~t o ea. It is completely ~irr4unt~ is no indu a~rie"titura rogram ha ud a land I may interpose here. in this field, I wonder if ~r statement in and so ordered. The homebuilding ii this yea ~iese uj ling units tomers an to do business; PAGENO="0484" 1064 ~MONBT1WJ~IQN ~ :CJ~IES A~D VRBAN DEVELOP1~ ~ sati~ej~tiie minister, but tb~ facts ~tre ~1~at the second man waa red-he suppGse ~o be building a garage. * ~ ~ In pre$ring for the future one s op$rtunities lie in tW~ gener I areas 1. Ofl~e~ing enstemera theu~usuâ1, 1,h$ "thagie somethiñg" that t e competitol has averlooked. Let's quote from a sui~vey ~ ~ondueted by our co pany amoni 352 families that were tran~erred to a tew plant location : ~ Percen~ Purchased new homes 92~ Bought existing homea Were purchased directly from the builder Were bought on conventional loans Were boiighton. 1~HA ~ 131 Were boi~ght on VA -- ~ PurehaseU 3-bedroom houses ` ~ Purehase~I 4bedroom hoös_~-_--.~-- ~ . Oompla1n~d about the follOWup servtce~ f the builde~ ~ Areri~t ~ve fortunate that so man~v of a r competitors tend to forg t their cus- tomers~ai~ter the. sale. What a gre~~t o rtunjty tbi~ affords us nd the cua tomer with FHA 234 condominium and UA 203(b) planned unit evelopment programs where maintenunce and manag~ement is ~ effered. 2. The second area of opportuflity is bl~sed upOn the many favora le long-term growth factors which affect the demapd for housing. Higher mployment, higher average earnings ipcreased capital e~pend1tures continue high Gov ernment spending, gradually ~wingin~ t*pward State and local pro rams ; and, of course, the muèh talked about populati4n explosithi. In this great country we seem to. hav4 a n~tmber of things going for us that I should spell "prosperity and opportunity i4iliinlted." To kno~v that the U S population will feaeh a billion in less than 100 years is almost in~omprehensihle. This sort af a4 Amos and Andy figure, a d it is diffi- cult foru~ to grasp its full significance. ~ When we talk about who's going to bet around in a hundred year , we find it interesting, but very academic. But let'~ look at the population ex losion from a different angle ; let's not forget what's~ going to happen, but let's look at the folks who are already here. Did you reai1~e that- Ten percent of the population did iaot exIst at the time of President Ken- nedy's inauguration? Twenty percent cannotrecall the K~srëan war? . . Forty percent were not here when the first atomic bomb was d opped? Sixty percent cannot recall Pearl H rbor, because they simply id not exist then. These are the young folks who ~re bul ing onr schools, who will ncrease the annual f~iitni1y formations by 25 percent in lily 5 short years. And thiS has to mean increased demand or residential construction of all kinds throughout the 1960's and 19~0's. StJM1~ATION ANDr ~ONCLUSTON The future is already on us-and it belb~gs to those who prepare or it. We have made our plans for the next 3 to 5 years-and we want to ass re all that we are ready to take advantage of the trØmei1dou~ growth opportuni les that lie ahead in the homebuilding and land dev~lopment ir~dustry-while t the same time carry out the objectives and vi~ws oJ~ the administration on bet er housing and urban development as is presently bel~ proposed by the Secreta y of Hous- ing and Urban Development undet tit~I&iII of bills H.R. 12939 mt oduced by Represeu~~tive William Barrett, a~iii iiJi~ 12~4~ introduced by Re resentative Wright Pa~man- The Urban Developmei4 ~I3ill We feel that should FHA land devèlop~ent .l~gislation, which was enacted in 1965 be amended by title II of these bills jwould certainly fit into ou operations as well as other builders and land develo~rs, both large and small, hroughout the country. ! We are presently engaged in a large la~id development located in an area on the Arizona.California border-an area designated by the Secreta y of Com- merce as a redevelopment area under the new Economic Develop ent Aét of 1965. The success, thus far, of this development Is primarily due to t e financi~l stability of private enterprise, as well as ~the Imagination and boldn ss charac- PAGENO="0485" DEMONSTRATION CITIES AN~ ~R~AN DEVELOPMENT 1065 625 41.6 14. 1 19.6 9.2 0 61 227 18 70 68 22 $331, 000 only a large e site prepara~ `easing with ig somewhat ~ COflsidere ~to keep I long-tern~ 1,728 92. 2 29.9 53 21.4 9.1 162 533 74 122 156 49 $1, 315, 000 (7) loyees. and nau1tip1e-resI.~ February 1967 (projected) are of ess, as pro by tht rid to aid ~eetive1y sarket sales demands, e~relopments for both s H~v~s~ City grow ilation February 1965 February 1966 ::::::~::::~ 3, 500 160 60 100 40C 20 462 1,000 110 250 300 100 1 1958. 26, 1966. woui,~ket~s / I do want to L. statement. As you kno~ to establish new towns a for several years. .e or two questions. ~n subdivi. PAGENO="0486" 1066 ~ DEMONSTEATION CITIES ; D t~~BAN DEVELOPM NT Mr. `~VINDnAM. We11~ it would ~ertain1y be the approa h that on might take, comparing it to a pro1~otype of a new busine . It woi certainly give an experience factor that would offer a way for the ture and I would cei'tainly think and st t that before corni bypassi~ig the new comiuuthties ~ . pr ach shou certainiy be considered. I thin~ Lch that wou certain1~y give a good e~perienc ~ . . . the coiT~munities program. It ~ that *o~ild at least offer a~test would be one that would be I wQUld be very mueh in i.~ ~ ~. .. ~ it `~. a solution to the program of the n*~w communities act. U1~ are experienced in it now. We a~e going along with cc~nv financing. We have had our prob1~erns and this would certaini vide a comparison to our program. . As I mentioned in my testimony, ~srith tight money and h gh interesi rates, it:~ou1d eliminate and is troi4ding us in order to en up with a~ progra~~i that would aJl9w US the r4teans to meet the dema d becausi of the f~,ctor~; . ~ ~ This program started 2 years agçj, so it had ~ different a titude am different approach to tl~e money mrket then, than it has t day. ~ called oil the Economic Pevelopme4t Administration for h ip in 1 ing with the establishment of ind*strial and commercial complE in which they are now participating~ We had to call on F A in or to get our homebuilding program ~started, because in thi new are conventional financing was not avaiiable for home construe ion. We feel~ that with FIIA in the program this will give a stronger base for the economy and con~equ~ntly i4i a few years conventio al financ- ing wiil~come in. So, M~. Chairman, yes, I would 4ertainly think it would' be wise to take th~a~,proach you h~ve sizggestfch Mr. E~AERETT. Mr. Wiudham, I ~st want to sa~ this. I do know, I have never seen any harm $rne to the municipalitie on whos fringes iliew towns have been built. I think the fears are roundless I am of the opinion now that if we authorize insurance ~ f loans tc build, say, a dozen new towns it wèuld give an opportuni y to sho~ how the program wouldi work and~ali~y the fears that s e ~ have. Don't you agree ? Mr. WINDUAM. I can best answ~r that by relating am vent thai happene~l last Puesday. The town ~ Yuma, Ariz., asked f I would come by~and visit with their chamb~r of commerce, the ma or of thel town, a~n~ there they i~ave county su~rvisors-a board of S perv rather t'i~an county commissioners. flhey had called this me ting wi. their hot~sing authority and it had ~iii been set up in order o have 4 or 50 people attend. ` They have a siuation that needs th~ program of the new co mur !L! as it is now proposed in this new l$gisiation. They have pro there with the bracero situation, tl~e legislation that has ust tak place r~iovmg them from the are~ as laborers. The cor s in t vast far~iIand are gradually being ~etei~iorated by the fact hat there is no one~to harvest them. Consequ~ntly there are personn 1 that arel favorabl~ to this classification of wo~k,who are moving, mi rating .1 id b~ a~ `appro~ ~rienc1 factor ~ ~ `at leasi PAGENO="0487" DEMONSTRATION CITIE~S AND U B N DEVELOPMENT 1067 for employxr.ent. their fami~. has become a its to see if we C( 7, a local city ng; they have i enacted, would r w, the New C et solution for ti of Yurnas us as con~ a munici- where this is ~ new communities legisla- Li Mr.' ML~. ~ available idertaken to help t. m-FHA doesn't 3ular situation. ~ais prob- fy for this areas. I ~ tha~a :o"the private Inv Mr. WINDHAM. Mr. BARRETT. 1. WIDNALL. ~ ~yourt ~ I have DIIAM. acting yourpi ;ide of Arizona ~. WINDUAM. s have ec~ - one may here is no they are and a half 60-878-643-pt. 2-31 iaterprise. committee I from a city. oopulation from? rnanently? ::~ you om Arizona or y of land pur- ~ area incid the pi - the lot before ~ owners and I at a million inese lots will average PAGENO="0488" to .~iceme area is qualified under t ~y jn ,eresting EDA ~ogram. To aitswer your question more s~ifically, you flew over a year ago and fly ove~' it now, ~ lang hexe and there all over the de~elopment ~ ~. ~ ~ who are now building those homes are arran~rng their own conventi nal finane ing ba~d on their financial stabilitf and they are primaril finanoin away ~M~in there, fromwhere they~n~ from, St. Louis, ~ hicago, oi wherev~ it might be. They are ~aying off their lots i advanc The lot hales call for 10 percent dc4wnpayment and balanc ~ paid out over a p~eriod of time and when 50 percent of the sales pri e has been paid in, then the developer will sultordiuiate the balance o his posi- ti'oti, thefirst position, to home mortgage financing. These people, as I said, are financing from their own sou ces so far, outsideof the FHA tracts that w~ n4whave underway. A 1 t of th are building second honi~*ith tl~ idea that eventually they v' move to Lake Havasu `when a moife~ solid base of econo y for t developn~ient has taken place. The3~ evidently eleotto mig ate to L~ sunny c~intry for some reason or other.. ~ . . In *just one moment I `will giv4~ y4u' abrief incident that just hap- pened re4ently. While at Lake Ha~4a~u City one day I got haircut. While taking with the barber 1 a*d him where he was f om. He said he was from St. Lo~iis. I sai4, "How long have you been out h~re ?" He said "3 years." I said ~"the city has not been here that long." He said, "I have been in Phoenix 3 years." I sai , "What' brought you here ?" He said, "When I left St. Louis I was in a wheelchair." I said, "What: was y~iir problem ? " He sai , "I had arthritis" and as he was cutting my j~air, standing cutting y hair, I turned athund and lookedat him. ` I~said, "This is interestin . What do you at1~ribute this to ?" He said, "Whe sunshine." I said, `It would" be pretty ~ai'd to get you to lea~re the'~esert?" Hesaid, "Ab olutely." Mr. BA~u~rr. Mrs. Sullivan? i Mrs. S~JLLIVAN. Just oi~e question. I think you have ma .e a great I contribution. , Mr. WINDHAM. Thank you. 1068 DEMONSTRATION CITIES ~ND URBAN DEVELOPM NT out about $4~OOO to $5,000 per lots. This includes also in ustrial ani commercial lots and parcels. A l~t ` of people are buying on spe~ü tion, r~cogni~ing' that the future ~wiil~ be there and they are buyS on the grounds. ~. Mr;WrnNAu~. How large are th4l*ts? M~ 1WIi~rnHAM~ The lots wouldftiverage' from the min~mum 7,~ square feet and the' average on th~ golf course is 12,5OO-~-1OO by i_ feet. ~ Mr. ~ [j~. Are many of the~e people buying the lo to build ` home I ement pu~ noses or fo~ active us&-earning a iving V. ~y with the develop ent o and we liave our first I is a ~ nare- oot maim ii to expanc INnEAM. ustrial-commE PAGENO="0489" DEMONSTRATION CITI~S AND ~ N DEVELOPMENT 1069 ur infor-, ie insigl to pro~ at to ask you this: i this particular area would be any to moderately :w. But in * All' time has expired I. we are grateful for your PAGENO="0490" 1070 ; DEMONSTRATION CITIES ~ND URBAN DEVELOPM NT in:eoi~iioii. We ar~ hopeful th~ we give you comfort rid corn ment a~nd complete relaxation hefe this morning when ou tes~~ I wila call on Mr~ Widnall of Ne$ Jersey. Mr. WIDNALL. Tha~k you, Mr. ~iairman. I would like to say Congressmaz Rooney who is repres nting area wanted to be here, and I know~he wanted expressly to ~lo so. I he has a conflict at the present tinie. So he wanted to co~ivey to yc his ~ B and his regrets that. j~e couldn't be here to ~nake a fu intrc ri. I I iber of th L~tEMZRT OP o cho'o~e your o~ a~tl~ 111] as a .1~~~ ,MAYOROP Mr. PArnow. Thank you, Mr. Olu~innan. It is my regret that Congressman ~ooney and I are each of differeii political affiliations. I If possible, I would like to present my testimony, read the complote statement, and then have questions. Ladies and gentlemen of this disti*iguished suboonimittee, I iv' the opportunity you have afforded ~he city of Bethlehem and myse. to appe~r here thday to support t~ie demonstration cities progra~r I do sup~port this program as a citI~f dweller myself, as the mayor one of the fastest growing cities irij Pennsylvania, and as an official of the P~nnsylvania League of Oities~ I heartily endorse the plan outli4ed by President Joimson to cat. a halt to urban decay aiid to begin today a comprehensive and dramat-I ic rebirth of Arne~rican cities. There is no doubt that tlie decline of urban i~eighborhoocls cnii be1 St&o~)p&i if all of the governrnent.al,~ social, educational, and welfare resources available can be united in ~ common effort to remove slums wipe out poverty, make the unemployed employable, provide adequate schools atnd neighborhood facilities,1 make available respectable I cost housing, create essential open sj~ace, and give rapidly expan~. urban areas a new life. The city of Bethlehem, Pa., is a ty~pical American commimity, with a population exceeding 75,000 and consisting of an area of appr Inately 20 square miles, located in ~astern Pennsylvania at the I of the rapidly growing Lehigh Valley. It is a basic industrial corn- munity, deep in culture. and heritage, with the average earnings in the neighborhood of $6,000 and with a~ unemployment rate of 2.7 per- cent. We enjoy two schools of high~r learning ; namely, Lehigh ITni- versit~y and. Moravian, College. W4 were founded `by a group of German immigrants who settled herein 1741. PAGENO="0491" DEMONSTRATION CITIES AND RBAN DEVELOPMENT 1071 For 44 ye TLO OX~( As eviden. im extent ~,eth1e1 for new laJ. al school s~ is cur- PAGENO="0492" URB~ DEV~LOPM NT 196f~ finds itsel~ old ne has ~ I in u~se I almost5~ dyn4mic attaci ~sector the C i1-~ir 21 of all non~ occupy housing ~lassi ~21 ~ _ fat a recGrd pace in Bethlehem uring 1964 and L. ~, ~. ~ a total value of mhre than $80 million, a d we ranked third in the State behind only ~?hiladelphia and Pitts urgh. Nevertheless~ the city's market value acl4ially declined during t e past year, partly ibecause of urban decay. Yes, we t~ Bethlehem endorse the de4ionstration cities progr m as a potentia1ly~ effective tool to rejuvena4e. declining urban are s and to do so in a ~-year period. If Bethleh4m and other cities mus con- tinue at current paces, and with only e~isting instruments, to make 1072 DEMONSTRATION CITIES commi what r _lnt - t's community rene~ -acre area of South e area of 1' ~ulation2 ( to be dom ~ogram. ii~. tics sho lehern, which repre~ents abot is concentrated ~ne-f dwelling units~ and two~] ~ne-fourth con- hem'l best effo newal p1 centr ricreased too s to halt det s which e ipiecE PAGENO="0493" ~rnonstraL incorporated i hes to be empi of Bethlehem ideas, ~Lch have i~ as the proposeu Th )ugh the to show t Joilal product by provi. of private enterprise, n We intend to show, t machinery, that aprog: ~end t sirable re y with a heav intend to ~`l facets 0 ;ructioi protest through c Mr BAiuu~r Bethlehem and we feel that ~ unique fea- a,nd new ap~- affe~ted citi- rom planning I citizen pread good. s to ask you ~nt statement on. ing is another statement and S. ~~it that will be needed by a? we under capital ~ say, it probably say $75 million. DEMONSTRATION CITIES AND URBAN DEVELOPMENT 1073 rating neighborhoods decent places in which to live, this process ~ decades of time and the uphill struggle we are now fighting .~ ~y be lost. But be assured that, in anticipation of favorable agressional action on this vital pro~ram, Bethlehem within a very hort time will have on the desk of Secretary Weaver a proposal to lemonstrate what Bethlehem is convinced it can do to combat urban ~ within its limits. ` r3 believe tIP] b thei is a b] iat the ~ ~ -. L~. decay. iort of tol to demon- ~rience id the'~ ~nent on t ~s na- ~ part ive structure and ~+T1 smoothly tonstration PAGENO="0494" 1074 DEMONSTRATION CITIES AND URBAN DEVELOPM NT Mr. WIDNALL. How much of tijiat would be devoted t residen~ housing of that amount ? Mr. PAYROW. I am m~t in a po~4tioti this morning to ive you ai accurate figure. I referred to thefrththlding of 320 housi g projec This i~a public housing, low cost, d~nd it would be a comple of priva dwellings, high rise for senior cit~izens. I am not in a osition ~ morning to give you a sound figure as to what it might b . Mr. WIDNALL. From your own testimony the most ur Sent need i adequate, good houshig for low-inc~me people ? I Mr. PAYEOW. Yes, sir. I am i~eferring to good housng and habiiit~tion in the present resid4ntial areas in this th usand-acr~ portioT4 ~ . I Mr. WIDNALL. For several years~i b~ve been personally very muc worneclj ~,bout the direction of the ~&rban renewal program and I hay h~ied to~bring this to the nttention ~f ~ll of our people, as : ommercial development has gobbled up more ~nd more funds. I have some figures right here. For January 1, 1960, o June ~ 1965, urban renewal projects apprth~ed totaled $430,438,00 . Of that amount $212,~T1,OOO or 49.5 percei~t went for residential and $217,- 567,000 or 50.5 percent for commei~ial, nonresidential ren wal. Almost the entire appeal that is nj~ade before this commit ee and for the demonstration city project pro~ram is to take care of the slu: to provi~le some decent housing foij low~4ncom~ people an ~ I am ju~ alarmr~Uthat since 1949 when hun:dfeds of millions of dol ~ ~ have sp4nit, such a large proporti~i has gone for development and so little for residetitial renewal. Let me give you an example of what I mean. The city ~f Atlanta that has 20,436 deteriorated dwelling units, and 10,417 d~lapidateâ dwellings as of 1960 census, 3 percertt of the urban renewal ~ioney ap- proved for Atlanta has gone for res~idential development. ~ We ca~n talk all we want about try~ng to cure the slums and help ~` slums, but if we are just going to hafe programs where it is `ust go~ to comm~reial redevelopment and ii4ury projects I think w are wast- ing our t~ime. I just hope that any ~ity that becomes a dem nstratioii~ city un~èr this program is going tj be sure they concentr ~ to on the hard-core, cam~erous~spots of the cit)1 hi giving decent housi g to low- income people. Mr. PAraow. If I may just cite ~ur own situation. Th s may be true and I think possibly Bethlehem h~shad maybe the same situation. However, this does not mean that ~ have not provided dditional housing for low-cost units. We ha*e iflicler construction ight now about a thousand apartment units w~iich would range in re tal from a low cost of $70 to $450 per month. ~ This is a gradual escalation all over our community. Now, peoph~ 4~ho have been displace through redev~,l~q*nent have been moving to tjiese ~treas and through gradual upgrading-in other words, a perso4 in, say a $40,000 hous and his children have gone out in the world 4nd his wife-they are eady for this so they will go into l~ury apartments and rent for $300 a month. This provides a vacancy for somebo~y in the $25,000 to me e into a $40,000 house and On up the scale. Although we have through redevelopment eliminated some housing, substandard housing and blight and In a few cases some gh ttos and PAGENO="0495" DEMONSTRATION CITXES AN R AN DEVELOPMENT 1075 we have been able to provide relocati" ~xpended money through pritrat~ mv rig. )NALI Mr. I Mr. WIDN Mr. BARR: We are cert~a inati Thank you~ ful foi~ :~ has expired. be Dr. Blue ational Farm- Te an associate. - - of legislation for the munity development foi ~L1~ with me. We ~ and I would like to IT tocom~ent on seve~a I STATEMENT OF I BLUE CARSTENSON, UNION We ap~"~"te the Or tee at 1965 gram is t ment s and ask Mr. me to point be subu~iUed; without objec- ~E DIRECT living on ~rned with ~ to the er, and demon proposed cafl h~ PAGENO="0496" ~`aousands of people hav~ streamed to ~1 areas of our counti~y who shou1d 1~rom rural Minne~ - - fromthe~ - In from I Illinois c thrive. Oi What his farm am urn on the inve the i~, and mud 1 continue t( Amer~ ~d perceni his s~eat produc ment i~ 1 r as t A NEW ntmAL RISNATS ities a~~d ~ orbiting the earth ( If there M~ as much substandard and I is In urban *reas as the censu~ reports, needed. ~ If: ~$ve are to prevent the contin rural areaa to urban slums, major new kind of credit In rural America which t~ housing and Inthan development programs We repeat an adequate family farm inc minimum wage for farm labor will be the Secondly, ~e need an We salute yclur chairman man Wright Patman for I able rates. S~re also salute on several .O~ the housing pro~ rams at 3 administratiofl should also, set fiscal poli~ Reserve Boa~l. There are easier ways I to pay the bai~kers more for their loans. squarely opposed to the current high Reserve Board. availa] areas. are work- one from I doun- One paid y are r sha~" by re not ~ 5 must farmer. In Lna-for a grand t 1 of $1.~ artmeut of Agricu ture, was :-:~ li~ paid $12.10 ; t e farmer lie ri~ral areas. Man will not ~ community facilitie ~ young constitute th majority nsas, in which our a tipovert3 e over (35. We r" ~ ~ ~ areas. We c'~ i~ as in urban Amer~ca. -~--~al programs, `obs an~ zation which an make tolerable in the ru al areas. PEOGEAM there de are from ~ieed the ;y\and the 1076 DEMONSTRATION CITIES D URBAN DEVELOPM NT are 40 more such h time financ~all~ taxes now county in ent of the id the on the ~Federal .n askin people inventlo stands of the ~edera1 PAGENO="0497" DEMONSTR4TION C~TIES 4 ~ BAN D~VELOP~ENT 1077 Third the Far] e~i a new program for rural housing ai A SPECX~I0 as do urbaii PAGENO="0498" 1078 DEMONSTRATION CITIES AN~ URBAN DEVELOPME NF~W PROGRAMS FOR 141~AL 1%1~NATSSANCE 1. Studi~ of rural communities have ~hown that many young p their corni4mnities because of:a lack of eo$~munity facilities. Congre ~rided andI will be providing Federal a14 for community facilities transit f~r~ large- urban a~reas. Phe demon~tration cities pregram woi further. We ask thal yell pay similar attebtion to the pr~bleins of bli, areas awl the slum pockets inour smaller towns and citIe~ While the rnas~ transth prugram ~lll ~provide rapid tra~sporta~ metropolitan area~ and megalopolis complex on the east ceast, our pi portation systems in rural arE~as is figuratj~vely in the horse and bug~ urge Cong~ess eatabli~h a ~alI e~perlm~tal program of~ aid to and small towns to help devek~p experime~ital public, cooperative, an transportation systema for these areas. lihe minibus has been d~vel metropolil4n areas with F~d?ral aid, bu4 n~ similar kInd of exper going o~i~ 1~i rrØ~ar~à&. ~flé-third of th$ L1~eOP1~ over age 05-6 in: pe*lr~i~flraI a~e~ and ~ 5~OOt~. Many od~ t c*mnot o~ ~nId ~t d~1ve~tbeir~ own car~for eeoi~omlc, physical, or sons. Isoliftion is the plaguec~f ru~aI old ape.. These elder people plu of* rirral A&nerica cry o*i~ ftA, public trar~po~rtation. The youth rn We :u~e C~ngress to adojrt an ~periment~ rural and small town tra program. 2~ We urge that Congress gb beyond prd~c4dIng water and sewer fa rural areas. Last year I appeared befor~ this ecmmtt~tee urging y the initiative In ~Woviding a eQmmttnity fa~llities program as a part housing Act. A~ you all kñ~*r, Senator A~iken took th~ initiative ln~ the resulting massive ~oiigresMonal ~uppo~t, passed the bill to provi rural wateir ~rrd* ~ewerage. Thrd the Aike4billbeen a part of the 19~ Act, perha*s those of ua who lnbb4ed so l~Ød would not have had t~ time in ptp4sing t~e hoasl~ng Hll wh1~h we ~fad. Perhaps the new bil~ with someilural sttpport~ . ThIs y~ai~ I a~k that the coinrnhttee~ add $o Its omnibus coir~munity 4 tion bill a ~rogrâin for a~d to rural commijntty facilities, over and al and seweri~gn fàci1itie~. ThiS program sl~Uld Include new low lnt~ and grants to predominantl)r rural areas f~r community facilities sue and fire facilities, street lighting, county clinics, and community Cente I feel certain that there would be strong~ rural support from among unteers active in volunteer fire departments working for better fire services, smalitown merchants seeking bet~r street lighting, and the aged, and iii fact people of all ages seeking ~ecreation, education, and programs in rural areas. We would sug~egt that grant provisions included str4uilar to those avail*blé far urba* community facilities. Thi might also ~nclnde provision fbr other coir$rnuntty utilitins, st~eh as g~ that small i~owns In rural arMs might f*m cooperatives, public or associatiom$ for piping gas Into homes. l~Eany rural communities h~ gasilnes passing through or near their area$, but the gas transmission do not want to retail the gas. This sectio* could be achIeved by am~ 1949 housing law or amending the rural co~nmunities facilities ` progra: by Congress last year, known a~ the Aiken law. The NatiOnal I~'armers Union supports th~ rural areas devlopment d as essential to the implementation of these ptoposed programs. The National Farmers Union conventloni recommended a coritinuat riiral housing direct loan program of the armers Home Administrat the Bureau pf the Budget continually seeks o eliminate, despite the str by this corn~nlttee and ~op~ress to ~ontinu the direct-loan program. that the ~ program, !nstea~ of being dn reased by $50 million to level of $itljmilliou, be i~ept a~ the past ra e of $~l5 million per year. this commthtee to take `a position o~posin~ the Bureau of the Budget erode all oftbe direct loan housing programs We feel that the Farmers home Admini tratlon and the new Deps Housing and Urban Development basicall ~ are attempting to do-ar lag-a good job with the tools they have. *e urge, however, that a dc ing relationship be established at all leveb so that the small cities e are not forgotten in the gap between these tw c agencies. We also feel that both Farmers Home A~ ministration arid tbe Døpn Housing and Urban Development have don excellent pioneering in ti ~ople leave ~8 has pro- and mass ild go even ~hted rural ion in the Lblid trans- y era. We ural areas I nonprofit )ped in the Lments are ilion older lese people other rea- the yonth al it also. sportation 1fflties for fl to take f the 1965 bead, with ie aid for 5 Housing ie difficult ~might do Lemonstra- eve water rest loans 1 as police `S. those vol- and police ~outh and mrmunity might be i program tslines, so nonprofit ~ve major ~ompanies nding the n enacted i strict bill .011 ~f the ion which ~g action We urge proposed We urge action to ~tment of. I are do- ser work- nd towns Itmont of e field of PAGENO="0499" DEMONSTRATION CITIES A TJ BAN PEVEJ~OPME~T 1079 senior citizen hc~ these excellent ~.e ask for city dweller, to r.~. Mr. BARmITT. Ii what I have ~ou DIRECTOR~ MEMBER] and for the .~ity. ot say to you that comi hat many of our PAGENO="0500" 1~O8O IiEMONSTRATION CITIES AN * . TJRBAN DEVELOPME were our ~next door neighbors and who have now left and g~ne to the city. We have great concern that they have an adequate diet, hat they have a.cornfortable home, that they have an adequate job. A idthere- fore, it is only fitting then that we should support the Demo istration Cities Act of 1966. I would like to point up, howevei~, a major cause of the poverty, lack of economic opportunity and tIT$e social unrest that is ~ tow pre- valent in ~the cities. We believe the tserious problem is the result of a lack of public concern for rural de~api.talization and rural depopu- lation. This has been caused by lack of eco~iomic opportunity, lao of jobs, lack of public services, doctors, medical clinics, the welfar services in the rural areas. These people have left, outmigrated, gon into the cities looking for a better life. We are happy that the De ionstra~ tion Oities Act promises to provide grants to plan and dove op, pro- vide educi~tion, consumer assistance, litter homes, transporta ion, and in genera1~ job opportunities for the j~eople who are there. But, Mi~ Chairman, having said wejsupport this act, I wou d like to say that ~vcte need a b~1l of this natur~ for our rural areas. Ve need the same kind of program. If we co~iId have this kind of a sistance we could stop the outmigration. A great number of people ~ ho have already migrated to the cities would ~like to move back to t .e rural area or to the farm. And to prove my point, Mr. Chairma , I hold in my hand a news story which appeared in the Washing on Post on Tuesday, March 2~, 19~6, 2 days a~o of a Gallup poll w] ich was taken, entitled "Rural Area Chosen a~ Ideal Home Spot." You may have seen this, in which 4nationwide poll by th Gallup Institute revealed that 49 percent of a~1l the people living in t te cities would prefer to live in a small town o~r on the farm. It said despite the longtime population trend towar~1 the big cities, many Amen- cans look wistfully upon the small to~tvn and farm as the id~ al place to live. And although we have about one-third of the people living n small towns and on the farm today and they define small town as tho e under 10,000 population, over 49 percent said they would rather liv on the farm or in the small town. The qu~stion that was asked, `If you could live anywhere in the United St~tes that you wanted t , would you prefer a city, an urban area, sma'l town, or farm?" Twenty-two percent of the people ~aid city ; 28 percent s id sub- urban ; 31 percent said small town ; andy 18 percent farm ; and 1 percent no opinion. The total of 49 percent f$r small town and farm. Mr. chairman, I might point out th~t this wasn't just the o d folks who remember what the farm was like Even the younger pe ple be- tween 21 and 29 years of age substantially had the same repl~, . So I would hope that not only would this co~mmittee pass this legisi tion to help those who are already there, but I would hope that this commit- tee might give serious thought to the~ housing blight and de )ressed conditions in the rural areas, to the la4k of economic opportu ity, to those things that truly caused the Wt4ttS riot of Los Aiigele where untrained, ~1inemployed people went to look for greener pastu es and didn't find them. PAGENO="0501" * * ~~tty ~ L~ I ~- * : ~ . ~`, ~,, dears ~ ~ ~d over ~ I ~ ~ ~ ~Y I ~:::::::::::::::::::::~ ~ - f ~.~~~::::::::::::::: ::: ::::::~ ---~ -~---. 22 2~ 22 2~ ic S~i~:~ rbs Small to~vnship Farm No opinion 28 29 27 32 84 23 31 29 * 33 28 27 3~ 18 18 17 16 19 ~ 17 27 25 50 24 20 ~ 7 16 23 27 60 35 23 2 8 9 9 38 69 2 3 (1) 1 1 1 1 1 1 1 1 DEMONSTRATION CITIES AND R AN DEVELOPMENT 1081 Mr. B~umErr. Do you desire to put t at urvey in the record? Mr. HASTY. Yes, sir ; I would be hap y t Mr. BARRETT. Without objection, so d red. (The article referred to follows:) I [From the Washington Pos , ar. 22, 1966] TilE GALLt~P POLL : RURAL AEir~& C os N AS IDEAL HOME SPOT PRINCETON, N.J.-Despite the longtime p0 ula ion trend toward the big clUes, many Americans look wistfully upon the sm 11 own and farm as the ideal place to live. Only about a third of the people of the at on actually live In small towns (under 10,000) or in rural areas, but nearly al (49 percent) of all persons sur- veyed by the Gallup Poll say they would 1 ke o live In a small town or on a farm if they could live anywhere they wished. This is the question asked in a recent al up survey, and the nationwide results: "If you could live anywhere in the Unite S ates that you wanted to, would you prefer a city, suburban area, small tow , r farm?" Percent City 22 Suburban 28 Small town 31 Farm ~ .-- 18 No opinion . .~ 1 In terms of the future, it is interesting to ot that the views of younger adults, 21 to 29, differ little from the views of older pe sons. The following table shows the detailed findings [in percen All adii1f~ Men - Womer .._ 2lto293ears 39f~~A0~ 50*i.. 500,000 an(t over. 50,000 to 499,999. Suburban arei~~ 2,500 to 49,999. Rural, no~~"' Farm I Less than 3/~ of 1 percent. Mr. HAs~rr. Mr. Chairman, I wou d like to stress the fact that the family farmer is still having a very r ugh time. We have not reached parity of income as you well know. any of the schools and social institutions in the rural areas ha d generated to the point that in many areas they are nonexistent. As I pointed out, hundreds of h us nds of people are streaming into the cities from our rural areas e feel that it would be proper, perhaps even more humane, and e n heaper-and this is very im- por~ant-if we would provide `thes e ices in the rural areas so that they might stay there if they so cho s ~ 4 1 PAGENO="0502" cept Mon-: ing to the 1082 DEMONSTRATION CITIES A*D URBAN DEVELOPME T I would also like toT ing in the Nation is in rura~i a on the fa~rins. I ~ ~ ~ ~ ~ . As you know, the principal mea4is of fln~tnoiiig our SOC4a1 institu- tions in the rural areas is the prope~tytax, and this has cau~ed a great disparity on the family farmers b$a~use they are not recei~ing an in come equal to their city brothers fdr the same work contril~ution am investment and yet they are being ~ at a higher rate. In 19~4 farm real estate taxes went up in every State e tana for. a id tot~J of $1.4 b'illio~i. Average tax, accor $1.51 per. acre, I iNew o paid rneai~s of p not fair to revenue. I ~e city-and this bill ~ for them, ho~ of the pre~ lack of ri * the c~ P01i( I ~ can L . to demonstra *s committee mi )le who are streair . - his has caused a po~ capacity of their sociaa service housing, health services, medical $icilities, There are more people than the cit± can accommodate i ~ ~ that you might give this some serious consideration. I knóiic~ Dr. Carstenson has more tl4at he would like to say about t bill and the proposals we submit for ~uraJ areas. Thank yo~j so n~ . Mr. BARRETF. Dr. Ca,rstenson ? ~ . Dr. CARSTENSON. Thank you, Mit Chairman, Congressnian Wid- nall. . I want to express at this time the appreciation . ~ worl~ th~ t you and the committee did last year in developing what I ~ very excellent bill. ~ ~ ~ I want td commend you on the 1 despite the excellent 1 * still feel ther more to be done to ~ . ~ ~ommunitie~ I have served on the l~e e National~r Conference and I have 1~ ~ ~ the var~o before th~ committee and in genera , ~ T with Mr. 1(eith at the National Housi: and many other people who have bee Having said that, I do feel that f of our small towns and rural areas. you this morning I have already discus of Georgia, who is most interested in i~ man HaTi~en On the coiumittee ar members from rural areas. Fra.nklj~, the portion of the hoi programs1help~d uz i'~ great der to pass th~ 1~ * Housing Act. We ~ ~le to sional support by the rural program~ ~ pre' the lack of enthusiasm among ~ uongressrnen bill might be increased if the small t~wns and rural areas ~ equity treatment, fair and equal treatment with the cities. making such a series of proposals. ~ence and I ~ on these ~eatment opose to :ephens, e other cone r on rura~ housing ~ heat of t~he effort ~ng~s PAGENO="0503" C~PIJ~S A 1~AN DEV~LO1~MENT 1083 iitioni. ~R~ST~NSON. a number of occasio: aembers in New JerSE rura by the conven- Confer- alking- we is arge meu ~poiu~ speak for equity 000, but towns of come tax relief ~ae. * The basic e~ecuti tion. but property taxes Mr. BARRE 60-878-66-pt. 2-82 PAGENO="0504" 1084 14MONSTRAflO~ ~IT1ES ANI~ ~ Dr~ O~;i~Sfl~ON. The specific pro~osa1, and I would hope that the comTnitte~ might consider this as a tit~ or sex~tion in whatever omrnbus bill is pr~ented. Oongresthnan Stepb~ns has requested that t ese pro- posals be developed by the Farmers 1~ome Administration ` to legis- lative language for his use and the co*wenience of the commi ee. Mr. B~u~m~rr. May I inthrpose at t~is point? All your fa legis- lation as far as this committee is conc~rned is going to be all cated to Mr. Stephens. He is our expert in thi~ field and any help you:can give him willbe of great help to this comini4tee. Dr OA~ThNSON Yes, I discusaed ~he matter with him y sterday moming~a~id also with Mr. Paul Nels$m atid Congressman IT nsen of the full ~*~rnittee.~ I went over some ~fth~se more technical peets of it' with Cohgressmen Hansen tuid ` St4~bens because there a several technical ~nendments which would gr4~tly aid the Farmers H me Ad- ministrntión and HtTD to ~crve the $ral communities in sm 11 cities and towns. For example, we would like to urge that the Seer tary of 111~10 be gi~ren the authority to waive tl~e rules' and regulations ` f HUD programs in order to give the very sm4ll towns and cities an e' uitable' share of~H~TD' progra~tns. ~ This is `~milar to the authority gi~i':Sargent Shriver u der the Eèonomie'~7ppoiPtuthty Act, in order t4' g1~ a fair and equitab e share to rur~l at~','s and small t~w~is. ~ ` ` ` `We wouM also `urge that the Secr4~y' of HUD be asked by the committee to report on ho* he is serv.~ng the small towns an small cities, and that a small amount of m~ney, about `$125,000, b given to the Department to study how best they can serve these `smal towns arid cities. Under the bill that w~s enacted last~year establishing the epart- ment of JIUTD, there is a prQvision the4e calling for close coop ration in the assignment of an Assistant Secr~ar~fr t1~ specific respon ibility for working with the Department of ~"icultiire to make sur there isn't a `ga~~in , the communities serve~ We would like to sk the committee `tp request as soon as possib~ e that jhe Secretary d , move ahead to dè~relop this relationship with the Farmers Home A minis- tration and !Depai~tment of' Agriculture th insure that the smal' towns are not overlooked. ` We also ask that a technical amendment `be proposed to allo non- profit groups to be used as consultants in `group housing un er the Farmers Name Administration similer~tO that which is now a lowed in the HTJI~ for the cities. , I think tj~is would greatly mov such programs ,~ niigrant'~ housing and s~iior citizens housing ` head. These hav& 1~een relatW~'ly s~bw in movi~i~g ~head.~ `` Specthc~1lty, we recommend, the Farn~ers Union, that the Co gress give the Farh~ers Home Administrationithe authority to extend credit for construeLion ` of' rental housing~ in tural areas for people of all ages and to provide the rent suppleme~tation where such is eeded and this should be in a similar mannet' to that whi~h is dev loped under the ~1 (d) (3) program in HIJIX This is to give a far and equitable treatment to low-ihcome fami~1ies and to senior citiz us in rural areas. We would like to raise the level of l~ousing grant for enie ency repairs which the Congress and comn4ttee has passed and r corn- men'ded and ~upported from $1,000 t~ $~,50O, as has been done n the urban renew~l areas. `~ ` PAGENO="0505" DEMONSTRATION CITIES AN I~R AN DEVELOPMENT 1085 technical mit them tc ~ to you. Mr. HASTY. *J Dr. CARSTEN (The materia tous dii of thE ~ms. ~i curt~ ~n experimental program , for the private, public, All of what you are a the record. a very whittle ~s full LWay support Banking and s to keep the very much your coming here animous consent to include a ~n of the Commit~ee on Legis- s Association. The suhcom- )rganization and we will give We ask that t committeE pprorriations Com~ again. -- - ~I loans g and t transportation sys$m ARRETT. Doctor, may I ii progr ~iority i~. iof the `eSS] right.] tee, very ideration ii. it enaeteZ by ~erioa in Oongr amended EpiC i~~t Mr. BARRETT. Thank yoi~. All time has expired and ~ve ~ppr and giving this splendid testimony. At this point in the rec4rd, I a 1~ u statement by Mr. John F. `1~ogie, ch i th ~ lation of the Chicago Pro~er~y ~ mittee is glad to have the views of~ is them close attention, We have now come to th~ end of t : ~ oad for these 4 long weeks of hearings. I want to thanl~ al~ of t e embers on both sides of the aisle for their fine record 4 attend ~ nd cooperation in making this a thorough and complete h~ari~ig. behalf of the committee, I want PAGENO="0506" 1086 uEMONSTRATION CITIES AIS~D URBAN DEVELOPME1 T to thank also all of the witnesses who furnished us with exce ments and expert testimony so that the members could ha understanding of the legislation before ~s. (The statement of th~ Chicago property Owners Assoc lows:) CRIOAGO ~ROPEETY OWNERS AssocIA * Chicago, i~u., Marc) ation lent state- e a better fol- le does not 2 the Corn- 11 are now ION, 22, 1966. `~tion, with using Sub- e hearings. s Associa- r manages ot condone tion in its rk for the s left over ave in the Ihe cost of ncrease in Hon. Wn~WM A. B~iuarr, Ckairman~S gv~bconwn4ttee on IlotwAng, Committee o~ Bainlthvg and Currency, House Office Building, Washington, D.C. S DEAR CONGRESSMAN BARRETT : We regret that your crowded sched permit us to person~2ly appear before the&Tbcomrnittee on Hbusing niittee on Banking and Currency, during the hearings in Which y engaged. We subWit the following views and rec4mmendations Son this legis'] your assa4ance that they will be brought~ to the attention of the H committeelmembers and also incorporated~in the printed record of t] At this i~irne, we hasten to assure you tI~t Obinago J~'roperty Own tion does ~iot `knowingly, and will floe, re~resent anyone who owns slum prOpE~rty in or about the city of Ohie~go and, furthermore, does this `type ~f We want to cetnp~y with the city administr: great eftort to rehabilitate svltetnver neces~ary and to assist in this w good of all. Many owners of these buildings are eld~rly folk who live on what after paying the usual eNpenses which are iever increasing. All they world is their building. The income from fents has not kept up with operating a building today ai~d they are ~gain faced with a sharp real estate taxes. I During ~he 1905 bearings before your jsubcommittee, the Chicag Owners 44sociation requested federally ~ubsidized payments or 1 sidized 1Oá~iS to owners of apartment brdl4ings forced to comply witi active bnll4ing codes. This is necessary to ~aveht most owners so aff losing the ~sseth Which they have lmrestedjlu their buildings. Fortunately, Congress did amend the 1~9~5 act to grant $1,500 o subsidized payments to owners of single-fdmily homes, plus liberal 1 liberal loans were made up to 40 years with subsidized interest at ~ to owners of small apartment buildings ~`i~" they liVed on the prernis building was owner occupied. * The abevempplied only if the privat apartment building was in an urban reneWal project or code enforce and was no more than one to four units. I also applied to buildings f units, investor owlied, located in the 2 men toned areas. This is e~tremeIy Inadequate because no * iief is given to either inve or .own~-o~cupied apartment buildings in excess of 11 units in ethe the city. 9Pbe clUes, under the ]~`eç1era1 u an renewal program, are to enforce *etroaetive bui1thn~ eo'd~ in *11 ~reas of the cities. We reco4nnexid the above subsklles and leans be granted or made to owners ~f apartment buildings, in exee s of 11 unIts, whether the be owner occupied or investorowned, in all arts of any city that has is enforcing compliance to retroactive buil ng codes. Without the above recommended provis ens, the assets of our cit were unaware of the fact that our elected officials would pass retrea will continue to lose their equity and be plilinged Into poverty under t urban renewal law as it now stands~ We know of many unfortunate cases i~i which these people hay their entire life savings in buildings and tare now called upon by t make drastic changes In the structure of ~heir buildings in order t with the rettroadive cOde.r~s~fremehts, aa `$v~ll as new' code requireme They bav~ had to lose their j~roperty beca*se no lending agency will g a loan, due 1o the age and neighborhood in which the property is beat people like to enjoy their later years being tree from debt. Now their is to appeal to the Government for assistlance through the Chicago Owners Association and they are herewith ~naklng this earr~e~t ~eque6 Property beral sub- the retro- ~ted, from federally ans. The V2 percent 5, and the home or aent area om 5 to :i~i tor-owned parts of compelled available buildings assed and zens, who tive laws, 0 Federal invested e city to conform ±5. ant them d. Older only hope Property PAGENO="0507" DEMONSTRATION CITIES I)EVELOPMENT 1087 Mr. BARRETT. We will ho'd l~he r~c additional statements and m~aterial $i We will probably hold m~rk-up after the April reç~ss. My th~nks ~ the hearing is hereby adjoui~ned. (Whereupon, at 12:20 ~ the s vene subject to the call of the Ohair (The following statements mitted for the record:) Hcvn~ WILLIAM A Chairma'i ;hout wL~ ~ntrai s, the industry is co .mpossible for rail iF ~s required to s( ~TORN F. BOGIE, ta~n, Committee on Legislation. open for the submission of April 6. us of the subcommittee soon i to everyone concerned and amittee adj ou~ned, to recon- lemental material were sub- OD ~F Th&ILROAD TRAINMEN, Wan1th~gton, D.C., April 5, 166. Cs. Is an urgent tieed eve that this is in act. The legis- e magnitude of i.We and Is the neces- ~~ted record AL IL CHESSER, Na ional Legiistative Representative. PAGENO="0508" v rela- irance th~ proposed Eli ~ommodity now exist advantage ers would it would this p lence land new comm~i ogran for s~ Iders which ~ otherwise ~. e aval scale developer installs roads and utilities ~ builds cc in a previously undeveloped area, he very oftet -. ~ts to ~ y out the homebuilding and retail marketing ph~es of the c.~ cur own operations this extends to custom builders who are intere~~. ~ as few I 1088 DEMONSTRATION CITIES A$D URBAN DEVELOPMEJ SPATISME*T OF VICTOR H. PALMnsms~ PREt~IDENP OF JAN58 INvnsTMEl ThEI~ II o~ 1294(1 this statenaent is offi Eons which have not b ~e. actor in the d it time the within i r Conr., ON ~red to brini ~en reflectec of southern - ~ation has nty, in- backgro~ organizat uinities now~ been e to tilfl sic points o the commi which dea It Is a~ ~nored in bicularly t `~T commr' eXa numi v commu-ni icating spec ation. mony 201 a: I everything )flS: as" -and t ore is lan- .eally that new towns `ed of 7 years, e of new .ently, ~ insurar ~equate ~ $ctive. ~f national 1" and r ring. uecl to up- PAGENO="0509" Hon.WRIGxxT PAPMA~, Chairman~ COmmittee on 13~inki~g ~nd Ui House of Representative, Washington, D.C. . D~u~ OONGR1~SSMAN Or~vsta1 City, Te: demon~tratfon city program, ~PheI city through a program of total url$n ~ene~ standard éonditions 1~ound htt all ou~ citi city Is a1way~ plagus~d, in terñ~ o~ urb~ priority use o~ bond funds, in~be~en1~ prob contact and persuasion of adix~1nistrati4 ~f the growth patterns ot ~ir~lties bot compete with the large urban are~s In tial, etc., yet their existin~f~cl1fties maintenance saving devicéica~ino1~ be p facilities to attract new industi~y oi~ anak In regards to the proposed ~emonstra is essentially the same rel~tl$ Si, in ~ population decreases but the pi~oblemts m the program. The neigithorboöd unit hi total population, while this ~me nelgi fourth to one-half of the total city or ii matter whether a project Is 1~o~ai~ed ii where a project Is not te~s1bl~ in terr gineeringlcosts in ratio to credits rE~celv~ The typical smaller city, by vlrttire c structure and cannot affced t~ wa~te C Is forced to lose credits hi ar$s ~iot i~i must he made due to the nOed~, voter d Any delay of improvements I~L t1~e sm another for whatever Pu1~Pos~ ~iay urban renewal program in the cothmun: ing practice, yet a city Is ~orcéd into tli From the very onset of the~ urkn r the city has been trying to caifry 4ut U] been hampered by regional a~ui centrs courage total urban rene*ái be~a~ise o: In an attempt to clrc~thvOn~ th~e a the first small city communI~y i~enew iithuslastic about the proposed new stal CIt~ST has always felt that only ild we eliminate the slum and sub~ tienlarly the small city. The small swal, with the problems of credits, S steaUness and constant Individual cials and self-interests. By nature : and~esent, the small city cannot ; of rate of growth, bonding poten- coming obsolete, * new and modern ~ed and the city cannot provide new Lancially attractive to developers. ity program~ the neighborhood unit es, it does not reduce in size as the V and it Is more difficult to carry out ~e city is only a small portion of the oa in a small city con~titutes one- y cases an entire city. It does not rge or small city, there is a point ~dminIstration, ac~uisition and en- itbeárea. ~oñomlc base has a very limited tax yet without total urban. renewal it irban renewal where improvements and overall political implications. cm In one area and construction in lize its political stability and the In most eases Is not good engineer- ition under current programs. .1 actIvities in Crystal City in 1960, enewal, on a citywide basis and has e directives which prohibit or dis- ack of proper Federal legislation. ctration decisions the city undertook tn in the Nation and ~intentionally DEMONSTRATION CITI1~S A RBAN DEVELOPMENT 1089 per year on ~ coiitrac~ ) of these b~iild~rs w~ ~a~atha1 for lot buyers. We have had as within our development at one ~ bill also pofi 1 ]NOZ TAL Orr~, Yrystal j, Teco~, March 28, 1966. L~è Es L~ is E r~a la~ l~ of !roi Ut~ er pa~ an IyoI~ LpJ PAGENO="0510" 1090 ~EMONSTRATION CITIES AN ~ URBAN DEVELOPMEN prepared ~ series of detailed general * n~ighborIiood renewal plans couraged under the program) in hope of carrying out total renewal an all the credit it could frarn a large, one-time bond issue that has taxed its capacity, in hopes that it could finance a 15-year urban renew All Crystal City urban renewal aetivitie~ have been planned and strict accotdance with these GNRP's and to date in 6 years the city 393 substandard houses, built 201 new houses, remodeled 318houses an 745 people from slum units to standard ~ expended $3,600,000 and local j~ubite funds and $2 million in ~r1vate expenditures, but ~ above act~rity, Crystal City still remair$~ 60 percent substandard inability ix* plan and execute on an overalltbasis. It must attempt to its activitids on a project-by-project conce4t with delays, changes in and Federal legislation. The city~ is experiencing problems in r~ard to credits, increased cannot continue to delay needed improvements outside approved urb areas. Without the assistance of the overall type of project activit City is confronted with tremendous urbai~ renewal gains being jeop creeping ob~olescence, time-consuming delars, lack of continued enthu general feeling of hopelessness among our ~ar citizens who. see other improved and no foreseeable change occurrftig in their area or no way poverty. ~ The city feels it i~ essential to the-futu4e success of its program a grams of other like communities, that it b~ ipeluded as one of the exa in the ma~ive attack on slums program. ~ The city is an ideal size munity of 10,000 population, it is support4d by agriculture, has 63.5 its inhabitints making less than $3,000 p~ year through migratory 79 percent having less than a fourth-grade e~ucation. The city feels that it is prepared teundertake this type of prajeci more than any other city, either large or sr~all, in the country, and ha support of all localirgencies and governmetital units. It is and has b to follow good planuing ideas and methods rather than political ex profit-moti~vuted schemes, and will be an h1~eal city to be an example slum elimhtation, rebuilding, and totalS coo~dination for other small substandard conditions to be guided by. ]~roof of this is not based o tions, but ~aet and current results even t4lrough all types of advers and financ~4l problems. Crystal c~ity proposes to make applicati44 for this program when Co provided le~iaIation. We pray that smal cities are nut eliminated program. Yours very truly, Ro~cs G. COOK, C~ METAL TRADES DEPARTMENT, AMERICAN 1~EDERATION OF LABOR AND CONGRESS Or INDVSTRIAL ORGANIZATI Washington, D.C., March Hon. WILLIAM A. BARRETT, ChaSrman, Rousing .Subconrnittee, Committee 4m~ Banking and Cnrroncy, House Of J~presentativet~, Wa~Mngton, D.C. DEAR K~O1~aRESSMAN BARR~T!5 (Plus is WI h regar4 to ll.R. 13064, e Housing afld Urban Developnlent Amendm nts of 1966 on beb~I~ of the metal trades departme t and its 22 affiliated mt unions with several hundred thousands of members employedin Defem ment aM ojther Federal installations tbro~ighout the country, may I opportunity to earnestly recommend that yom~ subcommittee give early able consideration to the recommendation o~ Mr. Boris Shishkin, secret AFL-CIO Ilousing Committee as given in his testimony on March 3: supplemental statement of March 11. There is no question but that it `is of u your committee to be amended to provide f ated by clostre of Defense t$~partment and Federal ei~loyses and their fardlies to nio their hoipe~t the location of such closing in (now dis- . capturing the city to 1 program. zecuted in as clea!= ~ relocated of Federal ith all the due to its ccomplish. directives, costs, and a renewal es Crystal rdized by iasm, and reas beiiig Ut of their d `the pro- aple cities ural corn- percent of rork, and probably complete en willing edient or of proper ities with L assump ~ political gress has from the uirman. 0, 1966. titled the rnational e Depart- take this nd favor- ry of the nd in `his most ~ importance for the r tl~e ex~tremely serious pr ther Federal installations a 1;o ai~ther location and t tallations. ill before blem cre- requiring abandon PAGENO="0511" DEMONSTRATION C~TIES A~ ri TJ ~BAN DEVELOI~MENT 1091 Federal workers caught in ox~e o~ tbe~ not able to rent or sell their ho~ues exce selves and their families. The metal trades department, therefo~ mittee give favorable consider*tIo~1 to provide the necessary relief to !ed~ral i cumstance. This can be done thro~igh expeditious acquisition by the ~ed~ral the cost of the closing of such Fe~ieral ins May I express to you and th~ m~mbe appreciation for the consideratZion whic we have set forth above. Wit] best wishes and kind reg~trd~, I re ~erely yours, NATI~NAL ASS~ Hon. WILLIAM A. BARRETT, Cha'trmai~, ~tbconviwtttee on Ho4~s~ House 01 Representafi'ves, Wa * DEAR ME. BARRETT: In T~ of Social Wo ure slttmtions find that they are remendous financial loss to them- re~ *ectfully urges that your suhcom- ~ propriate amendment which will s who find themselves in this cir- cccI yes allow~ng for the orderly and er ment of such homes as a part of au ns. our subcommittee -my thanks and I k ow you will give to the position in, B. A. GRITTA, President. mmittee on Banking and Currency, *ation of a repre gram." do at e 70 0 a] PAGENO="0512" I, 1092 DEMONSTRATION CITIES AN~ URBAN DEVELOPMRN group med~ca1 and `dental practice. NASW sees this as an imports more effective use of limited medIcal and d4ital personneL The eowmittee might be interested th~t more and more person graduate t~aining 1~or social ~Work are cbo$sIag to prepare themselve ning and ~ther ~ comthuni1~ ~rganization~taSks. Curriculum in th currently: i~ndergothg major review in a ~4roject at the Florence He of Advanc~d Studies in SOcial Welfare, I~randeis University, being by our sist~r organization, `the Council on ~oe!al Work Education. At the same time, we must add that ma~ipower requirements of all Society programs'have made ever-Increasing calls on the already shori social workers. NASW feels that this nechasitates substantial Feder~ for student aid, training' of fncuWv. snd. expanded educational facili~ Sincerely. MEr~vIN A. GIAssER, ~, `Commi$8iOn On S~OOiGl AC~ tvision of &oial PoUoij an~ 1' This statement on the proposed Demonsti ation Cities Act of 1966 is by the National Association of Manufact*ers, a voluntary assoelati member companies-large, medium, and s~na1l in size-account for percent of the Nation's production of manufactured goods and about percentage of employment in manufacturing. Because a great number of these compan1~is are headquartered In, or production ~r sales activities. in, urban area~, the association has a natt est in sound solutions to the problems of jAmerican cities. For a n years, the aissociatlon, tbrou~ ~ ~i its policy ~tatement cm' community 1 has advoeat4~d that businessnien should re~ognize fully community in the conduetl of their operations. As good~ cltiz~hs. and.. good neighF should conti~ue their interest In communitflproblems and affairs, and I active strength and counsel to efforts desig~ied to niake our communit places in wh~ch to live and work." This interest is also reflected by the exi$tence within the associati area industrial problems committee. This co~nmittee concerns itself entire gamut of problems related to urban~area land utilization and development. Upon the recommendation of~ this committee, the board tors of the association unanimously adoptO~l the following statement on November30, 1965 : "Cities hate traditionally provided excep4ional economic and cultur~ tunities. At~tbe same tIme, the primary fai~ure to intelligently plan ai ment the pla~ining has historically resulted ~n urban problems Postw ments of p?o1~le and industry have accentua1~ed some of these problems American cities. , . "American cities are possessed with sufficl~nt vitality to cope with th lems. The , most effective undertakings to ~solve urban problems ha shape under.' creative local leadership. We. should seek solutions imaginative efforts by business and indust~y in cooperation with oti ~ groups and local and regional authorities, rather than have the ete simply compete for and depend on funds airallable from the National' ment." We submit, that the proposed DemonstratiQn Cities Act of 1966 will intensify the jcompetition for, and dependenejfr on funds available from tional Govei~ment rather than promote . vit~fl, creative, and Imaginati leadership. ~ ~ I The propo~id act appears to reflect diss~~tactions arising out of ti comIngs of Ibderally s~ibsidized urban ren4wal projects. However, posed act does not provide any guarantee tl4tt such shortcomings will tinue to characterize these projects. Let us ~examine how the provisior proposed act would bear upon each of the shçrt~oxnings in turn: 1. Failure to relocate residents of urban re~ewai neighborhoods in an and acceptable manner, and failure to recogntte the irreparable damage I: nt step in i for plan- Ls area Is icr sponsored Ohairma the Great / supply of 1 funding ies. SPATEMENIV OF NATIONAL ASSOCIATION C DEM0NSflATI0N CIT]J iOn, Action. MANUFACTURERS ON H. s ACT OF 1966 R. 12341, ubmitted Mi whose about 7~ the same carry on ral inter- amber of adership, :erests in ers, they end their es better )n of its with the ~aci1ities of direc- )f policy tl oppor- Ld imple- ir move- ror some se prob- e taken through er civic imunity Govern- greatly the Na- ye local e short- he pro- riot eon- 9 of the ffective doue to ../ ,t PAGENO="0513" DEMONSTRATION C~TIES rlouncemen,t ~ ~ates a `wet b to the n~ C) DEVELOPMENT destroyed In .~dard by local PAGENO="0514" 1Q94 DEMONSTRATION CITIES AN URBAN c~ "low ~ ~e cost,' "maximr r new tion techi Lut~~. In a do such and such is no more than it happene~ a trade union restric~ improved technolou going t ~ ~ 3. r volve $4.7 billion. . . It should be. noted that section 12 of the bill provides that "There a~e hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this act." In other words, there would be no statutory limitation on the. amount of money which could be spe~it under this program~ Ti~e admin- istration 1~O called for a $2.3 billion prog4am over ~ years, but a n.~imber of mayors h*~v4 already advocated vastly iuckeased expenditures. Con~equently, as a practlö4l matter, there woi~ild appear t~ be no effective limitation as to the untold billi~~~ of dollars of e~penditiires t4 which the Congress woul be corn- mitting itself by the passage o~ this legislaj~ion. human Events for arch 12, 1c~66 state~ 1~hat "expert,s say the real figu~,e will be at least $10 bil ion, and probably mo*~e." At a time when. national Fdefense requirements app ar to be growing and there is need for ~cal restraints on the part of the Nationa Govern- mont to aveid runaway inflation, the Congress should reject this type of pen end, blank check, bottomless pit financial commitment. If the Congress coul refrain from this type of legislation, it would be a constructive contribution toward avert- ing a post~ible tax increase. Also it should b~ noted that there are no s vings in- volved in this program due to eliminating ot er programs, functions or ositions since it woul~l he superimposed on everythin that is already in existen e. It is clear that this bill could cause the expenditu e of bIllions of dollars wit out any more assurance of commensurate benetfis t i~n was had under prior ~ ograms. ~.~aalso. very expei for vastly Federal PAGENO="0515" DEMONSTRATION C1~TIES DEVELOPMENT lye, S the c costs." On ervinl connect sentence st Secretary law in any )usthg since more. long time. An from the start ~y, the Presi- Ternme. .t merit cent PAGENO="0516" UEBAN DEVELOPMEN for the Secretary to make grants to eove~ the full cost of "relocation The pladement of. a. Federal director i~i every demonstration cit excessive ameunts otFed~rai financial paritlelpation in every stage of program are certainly not conducive to the aim to "mobilize local and privató ii~it1ative" refei~red to in the `resident's message. And obscure juEt what such a sup~rprogram r ally would demonstrate. 5. Failurç to ai~oiL preierenti4i;i treatm i.t.-It is enough to note Is a spec~d program, participation In wh cli would be determined reviewahie ~11sereflon of the :$eci~etary. I ~ than 10 percent of the ticipating. t~i present FeJ~ral programs we 14 be allowed to partleip superprogri~m It would require a yenta e Solomon to insure that consideratldns did not enter into the ch Ice of these select cities~ especially true under ~ a bill such as this here the criteria for sele down by th~ Congress would be vague, gen ral, and highly subjective~ In addition, it appears that certain se~tl~ns and neighborhoods city will be preferred over ether sections ~nd neighborhoods within city. Thus, Instead of shutting the door t~ preferential treatment, t program wlltprovide greatly expanded oppo1tunltles for it. 6. Failure to wvoid the bulldozer ~pp~ra4oi~.-Pbe purported aim o posed act i~ to "r~bui1d A~e*ica." . This j~ ~a noble and lofty aim. urban renev~al under ~`ede~a1 legislation b$s become associated in th mind with ~tJ~e bulldozer dernot~t~on approa~b by which much good Is along witb ~he bad Will th1~ proposed pfogram be any~ mere diser in its appr4ch' There Is no sure-fire gua~rantee that It will As recentbr as March 20, 19G6, a New Y~o~'k Times news story In private urba~a renewal efforts lfl the Boernx4 tflhl area of Brooklyn refi concern, as fbIh~wS ~ ~ "In a sense the battle of Boerum Hill epi~omlzes in miniature the n tug-of.war bet*een two principal schools o1~ urban-renewal thought. "Ranged ~n one side are those * * * *ho envision renewal In terms of clearance and .coflipl~te rebuiidIn~ even If It means sacrific sound old buildings. - ~ ~ "And on the other side are those, like J'~tie Jaco~bs, the author an critIc & maii1y~ city planners wi~o see vitahty~ even In slums and seek to preservlnge4isting Sound strw~Pi$s and bni~ding aroü~id a community'~ and.people. ~ ~ I ~ ~ ~ We are ~ilgbl~ suspicions of~ rene~wal ` S~Id Rokert A Snider a 33 Oolumbia-e4i~cate~t labor lawy~r who 1spre~d eni~'of the B~erum Hill tion The a~so4?1atIor~i I~ comprised of aboi~ ~O famtlles that are ded reelaImlng~th~ heritage of tbear~a. " `We want to preserve, not to tear dow~i. The buIldings are sou turally,' said ~r. Snyder. ~ ~ The bill ~ pa~ * lIpse~vice to the fact tbat prior programs have quately prot4cted historical and cultural f~atures by the provision i 4(c) (2) that the Secretary shall give maxi~i~n~ consideration to, amo things, wbet1~er "the program will enhanee~~eighborhoods by applyin standard of ~iesign and will as a!pproprlatl4 maintain distinctive nat torical and c~a1tnral ~ characterIstIcs; * * *~,j fl~*he bill is perhaps dese a small "plu~t' in this rega~, but this is far ~~utweighed by the lack of' in regard toa~y other matter at 4ssue. ~ ~ THE PRIVA11~ ALT+~APIvu Communities without Federal urban rene~w*al aid are not abandoni cities ; they are "doing it themselves" through local public financing, or enterprise. Although privately financed iniprovements usually requi increase in local public facilities, this .publiO cost is a lower proportio total than Is found when a public project *les to attract private mv Some cities have had experience with both types of renewal. In a vs cities across the nountry-Houston, Pittsbur~1i, and `Rochester to nam few-private ~?nterpr1se redevelopment in bu$lness areas has been quic federally sp~$or~ redeveiopi~ent. Local 4ax revenues have been I sooner, ánd~$thout imposing a burden on p~le in other communities. Midtown Pi~iza, in Rochester, N.Y., baa gai~ied `wide attention as an a toeonimercialI rehabilitatIon of ~ de~tntown ~a~ea. ~ It was planned by t peting depart~nent stores. Afte~r 30 years ~r1thcait a * stngle new con 1096 *MONSTRATION CITIES AN] I I I I ayments." . and the his super- Leadership it is very that this y the un- ities par- ~t,e in this subjective Phis is ~tion laid n nature. within a the same is super- the pro- However, ~ public's [estroyed minatory egard to cted this tionwide e broad ng some caustic enew by heritage year-old, Associa- cated to d struc- not ade- section g other a high ral, his- ving of plusses" g their private e some of the stment. riety of just a or than rreased preach 0 corn- rnercial PAGENO="0517" DEMONSTRATION CI~UIES A t BAN DEVELOPMENT 1097 :io~n and f Rodie tized in left the tax ro~ o~ the four f been completed supposed to rede' Federal planning years may pass I the location, has ~ a Federal office In Pittsburgh, t~ ~ financed. There ba~ , $~56 million, which ~ revenues. Five :~ Øf $77 million. The :brea~down for I in Pittsburgh ~as presen sents some of the most pertth I .~ueraieust ~ Loc~1 public cost ~ ` ~ ~, Estimated private investment (aotua3~a~a4 pezu~iug lu ~9 Number of acres ~ Per acre: S Federal cost Local public cost ~ S ~ ~ ~ L H. It is obvious that nonpass'a~e o~ the 1966 would not leave a va~uun~ of mac ban renewal projects can invo~ve ~illio ~ axnount of construction an~1 re]~abi~Iitati with that ~ achieved through pz~1ya~e ciT Dr. Mai~t1n~ Anderson stated in the ~vlnt ~ S Problems of Duke tn1~ers1~, $c~looi of L~ "The eeononiic systecna ~ offr$ e~tterp ~ toward achieving better h~~us1~g ~çndli 1960, over 18 n~1lIIon standard hox~ies v total number of standard home~ increas increase of 64 perc~nt. "And these gains were pos~ib1'e *to .. . white population of the United States quality of its hot~sing. From ~t95O to standard units ocetipied. by u~nwhites, sitbs'tandard units. "Virtually all of this was accoi±iplis ti~n, and demolition efforts 1~nal~ced These activities were In no way ~on4ecte CONOL It is concluded that, although ~be shortcomings and failures o~ p~evldus a desirable that would Insure a~aiñ~t. a superprogram to `be super1mpo~ed upon be erected upon a supcr:struci~ure~ it .4.. e proj ~Iopment ty . never chester, none had ee Crossroads, `is ~ A $~?, COO, `000 $~4, 900, OOQ $211, 500, 000' 4s~ $118, 907 $56, 720 $481, 776 S S $ $2, 000,000 255, 900, 000 236 $8, 475 $1, 084, 322 `sed Demottstration Citie~ Act of Although feth~rally subsidized ur- dollars of taxpayers' money, the St results is very small compared Lrel'ated t~Q' Federal pro$cts. As ;` ls~~ué of La* and Contemporary ts mç~d powerfully and swi~tly or all Americans. From 1~5O to Ldei to the housing supply. The m 29.1 to 47.1' million, an overall ericans. For example, the non- ed a substantial increase in the Lere was an increase of 1,813,000 .panied by a decrease of 537,000 private construction, rehabilita- salve amounts of private funds. the FTJRP." .d act reflects `recognition of the 8ent pro~rams, It contains nothing ion of `those. same failures. As a ng' prOgr~tms, a superstructure to e viewed as highly unnecessary, I r~'--' 6 feder~11y aided projects 8 private projects 1. 0 I, `~ e `0 10 11 e e a .jo ot ec~: e l't~1 ~8 r d e I*8 Pr et~ :is St I Nation's ~Business May 1984. ` ~ S S 2~F~rom data~ presente4 ~,, t~1ie b~rings on Ftousfng, Commfttee oji BanI~iirg ai~d Cttrren~ 1st sess., October 1908, pp. 45-46, pt I of prin 17.' he ie~Ta1 before the Subcommittee on Hoti~e of ltepreSentatives~ 88th ConZ rings. ,1] e PAGENO="0518" 1098 DEMONSTRATION CITIES ANt~ URBAN ~ DEVELOPMEN ` extre~me1y k~Gst1y with no mssurance of e~mmensurate benefits, and with posi- tive unde~4rab1e features sm~h as local ]~l~ral coordinators or dir etors and excessive 1~ational Government partieipati4n in local respon~ibi1ities. We respç~ctfu1ly urge the dis1inguished~~beeü'mittee n~t to repo t the pro- posed act ft~r l~he following reasons : 1. The proposed demonstration cities )~r&gram w~uId cost billio ~s of dol- lars with no assurance of curing the failures of present Federai rban pro- grams. 2. The placement of a 1~'ederal coordithtter or director in each emonstra- tion city would result in the exercise of considerable influence over local agencies. 3. The program would be highly prefei$ntial in nature, with sec ions of 60 or 70 eitie~ ~pieked out by the Secretary ~of H~u'sfng and Urban D. velopment for special l~eneflts. I 4_ Th~ pkogram *111 grE~atiy Intensify ~he competition for, and ependency on, funds 4vailable from the National G~crernment rather than pro ote vital, creative, tU~II imaginative local leadership. 5. Nonpa~sage Of the proposed act wo4tld not leave a vacuum 0 inaction. The `Improtement fn housing conditions 14i recent years has virtuall ~ all been accomplished by private construction, reh*ibllitat1on, and demolition efforts fi- nanced by massive amounts of private ftinds and in no way eonn cted with the F~ederal urban renewal program. STATEM!~T OF P. BROOKS BRADEMAS, Pa SIDENT, Crr~ PLANNING ~ 5SOCIATES, INc.,~PLM5N'NG, UanAN Rm~EwAL, DEVI~L PMENT CON~ULPANPS, ON D MONSTRA- TION Cxri~ss Ac~ OF' 1966 (H~R. 12841 au ~H.R. 12~42) The exi44ence~ gained in takIng part I ~ the development of urba i renewal and comm~n1tY planning programs in soni 100 American comnaunitii ~ over the past 10 yea~rs, has convinred me o~f the b~ Ic soundness of President Johnson's demonstration cities proposal. We have b n hindered in our ability o success- fully solve the myrIad problems of our urb t areas by a number of fa . ;ors. Not the least of these has been our seeming mat ity 4~o properly utilize and oordiniate the physical, social welfare, educational, ectrnomlc opportunfty, and ot ter action programs that are presently available to us. President Johnson, in his ~essage to th~ congresS on the eitles in March of last year j~ought into sbaxp foeus the rnagn~Etude of the problems beset lug urban America. Eut, it is nOt enough to point ou4 the pr~blem.s that face ui an Amer- lea and ea1~ for dedication and commttrne4t on t1~ part of all of us concerned with these prublems wjthout ~ffeting us t1~e weapons to wage the ba tie The Pres~dent~ 1*~ offeredf 1~Lie weapons In fa~t he has offered an arse al in his demonstr4ltilon citi~ proposaL j ~ FUNDS ABE INS$EFIOIENT :i~t is app~Lrent that the demonstration cities proposal, which is clean the most significant ttnd far-reaching proposal for th&solution to America's urbai problems since the Housing Act of 1949, will not be effective ~inless su~cfent "am 1unition" is provided. Although the $2.3 billion prtposed to be appropriated over the initial 6-year period of the demonstratic5~ cities program may sou d like a substantial sum, divided amor~g some 60 or~ so ~ommunities, it would mount to an average df some $38 millioii per c~mmunit~~~ A reeenti~t completed study for the city of~I3uffaio, N.Y., revealed that to under- take the ~ dozen most pi~essing urbai4 renewal projects would equire a Federal gr*t$ of some $48 in~JJ4on. This w+ultI account for only a sm 11 portion of the reneWal ~ of the community. ~To carry out the eecond nd third priority renewal efforts ix~ Buffalo would require in excess of $100 ~nillion of Federal aid on the basis of the present one-hIlif/twO-thirds grant formu'a. These cost estimates include only tb~ undertaking of sp~cifi'~ renewal projeds and do not include the many other public activltie~ that must be undertaken the city i~ to regain its physical, economic, and sodal~health. Taking the considerably smaller community of Springfield, Ohio, wi a popu- lation of some 85,000 which has also comple~ed the development of a mmmtity PAGENO="0519" I developed as a s of $60 ~ again, ? cost of the 1 we cannot nunities can ~try. Sec- ion cities rograms to re~ i Improve public areas. ~n, then it should y that needs the irticipation. We ~s as envisioned e the necessary liable resour- ii health facili- the conditions I DEMONSTRATION C4IE~ ~ U~BAN DEVELOPMENT 1099 4CIALISTS Act of 1964 d/or private programs. The e to enable the us which would it community ans and s cialisi were In Lided in ~ortunity to not ove the general * res us a unique ~raining vehicle. ;le of today. The of a new breed of f urban problem ke administra- * of colleges am and training 1:.- monstration cities be `~rticipation ~, research President Johnso: ces-in plann ties, in recrea.~,~, I 6O-878-66~---pt. 2-33 PAGENO="0520" I I 1100 I~EMONSTRATION CITIES AN~ URBAN DEVELOPMEN of life in urban areas, and that we must1join together all available talent aiid skills in a coordinated eff~rt if we are t~ be successful. Such an r"~ will be a new and unfaimiliar approach to the professional groups day with the multitude of urban problems. This concept of the joini of all available talent and skills in a coordinated effort will require th~ to know of the areas of concern of the social worker and share these ~oncer will require the social worker to understapd and appreciate the role ~f t' neer; the er r the administrator; th+ administrator the planne~; ner;th etc. For t th~ ii~ - - the eco: ous f~ ra~ ~f CE~P j~; it~ coordinatin `anded rehabilitation pro the Office of Economic 0 iewal. Actions under thes ilng, municipal public wor Ivities. The C1~P offers s cularly at this point in the it of this technique." I his particular reference t ~conomic Opportunity givi of urban renewal were p La s to meet function. rams and portunity, programs s, housing cb an op- redevelop- the corn- g us new rticularly os of the the 1965 reat satis- )ormore 1 renewal LS well as all urban ning that at at last ban areas d poverty. ncept set This is Office of ye instru- demonstration c y to 1 reconstruction )rograuls time develop nei -, flexibl~, admi H COMMUNTT~ RENEWAL PROGRAM SOUND BAS]~S FOR DEMONSTRATiON CITI13~S PROGRAM ` ~`-"-4tion -` -- ~at altc i the c Unfortunately, the requ develop a community rene~ and relate4 programs was ~ ment Act qf 1965. The CR1 effective uthization of the det Speaking before the Nation~i 1965, Dr. Ibbert C. Weaver, oi ban Deve1o~pnient, stated, "I inunity Development Act of: to prepare a community ren newal aid. One-third of s ready preparing CRP's. ~ dously valuable not only foi difficulties, but also for sehe them. It ~an be used to 10cm community~s residenta, and W those neeth. `Perhap~ the most Importinit function Now we have opportunities, through ex through the community aetioli programs o for effectuating a higher erdei~ of urban re should be carefully correlated to city plani programs, and a wide range of other acl~ portunity, and we feel that it i~ vital, parti ment of the American city, to get the most et Dr. Weaver's comments on the ORP an~ munity action program of the Office of I methods for effectuating a higher order I gratifying. I Jack T. Conway, then Director of the ~oinmunity Action Progra Office of ` ~eonomic Opportirnjty, foiowedi Dr. Weaver'b remarks a National Hbusing Conference by stating : "~L'his Conference can take faction fro~n the President's recommendat~o~i that every city of 50,0 must devolep a community renewal progra~in to be eligible for Feder assistance. This long-range social plannin~g, consistent with human, physical needs, represents the best kind of democratic planning since renewal programs involve popular participation. It is the kind of pla will strengthen freedom and local initiative." The remarks of Dr. Weaver and Jack Conway gave us real hope t we had the basis for truly merging the phy$cal reconstruction of our u with the social and economical rebirth of o~ citizens living in slums a Unfortuniately to ~1ate there is little evi~1ence that this splendid c forth by ~ Weaver and Jack Conway a ~year ago has been realize imleed tra*ic. If, through the ~lemoflsti~lLtion cities program, the Economic Opportunity community action p~ogram can be made a posit PAGENO="0521" DEMONSTRATION CI~IE~ A~D~ U~BAN DEVELOPMENT 1101 demonstration mphasis on a piece of l~. urban renew tureit. program, li It can exe~ EnOnt relopment er. its urban renewal program, rn, its PAGENO="0522" :t 102 DEMONSTRATION CITIES ANb ~ UI~BAN DEVELOPMEN' NATIONAL Lir~AGuE OF INSURED SAVINGS AssociAP ONS, ~ Was~i~gto~, D.C., Apr~ 5, 1966. Hon. WIL9AM A. BAuRE~rr, I Chth~nuzn, ~ Ruboommittee on Houeiiuj, C4~inmittee on Banking and U~trrency, HOt~86~Of RepresentatiDes,Wa3Mngkm4D.C. Dir~ai~ M4. oa~un~ ; The National I~e4gue of Insured Savings Asso wuld likel to submit for tho constderath$i of your . committee seve al ments to p~nding housing legislation deall$ with the investment po~ ers of t] savings and loan bu.siness. ~ ~ ~ ~ ~ As you know, savings and iqan associati4ns in recent months have c :periencecl a tremendous squeeze on earnings which ha~ curtailed their ability to ~ ttrac't new savings funds and consequently reduced~ the availability of hom~ financing throughout the United States~ The squee~e ~ on earnings has been p oduced by rising interest rates on savthgs funds and reduced rates on mortgage oans with which I am sure you are familiar. ~ The National League believes. that the brimary function of the s vings and loan busirnlss is t4 pixwide funds to finan4~ borneownership-year i: and year ~ out regard~ess of the vagaries of the moi4~ market The earnings queeze of the past 2 ~tears demonstrates the necessityl ~Qr broader investment op ortunities for savingsland loan associations se that tl~T may secure the earnings necessary to attract alid hold savings money for hom4 financing purposes over 10 ig periods of time. 1 Fr mortg ~e loans are wr4 a for more than 20 year~ duration - - -: - ~itions must re~ain corn- morti ~WILuA~( ;J~. ~4wI~N, A8$stant Ecoecutive I . DxGEs~ 4F - ~ S~vi~dS & Lo~ 4~cxATIoN AMáDMENvS 0 ~ Section 1 gives the bill -the Short title of ~Tederal SavIngs & Loan ~ Amendments of 19G6." - . ~ Section 2 would permit the board of direc~ors of a federally charterE tion to designate it either as a Federal savings and loan association or savings association. . Section 3 would permit Federal savings and loan association.s to a todian of deposits of self-employed persons äinder the Keogli-Smathers Section 4 would enable Federal associati~ons to invest in revenue o of Federal and State agenciesaud In stoc~ of the Federal National Association ~tzi addItion to tiiefr present a4hority to invest in certais State, and l~aI obligations. ~ ~ Section 5 ~rould~ extend the educational lojin authority of Federal aa to include loins to students at vocational sch$ols. - Section -~ ~would authorize Federal associ~ttions to lend funds for th tion of durable household goods and moblle~ dwellings. It would also Federal associations to make secured or un~ecured loans for any purr $5,000 under board regulations to any persoln except a private busines tiOn for profit. ey market sti~ess sed in prey ous meet- )rnmittee 01 Banking nd tions for ~t er assist- ireotor. - ~ 1966 sociation , - associa- Federal t as cus- ~ * A~ct. . ligations dortgage Federal. ociáti&ns ~ acquisi- iuthorize' ose up to corpora- PAGENO="0523" I ees of domestic trusts "U. "`~~~d liquidity, in BILL To amend sectIon 5 of the Hom~ ~n rs' Loan Act of 1933 as amended i~acted by the 1' ~he United IS~tates Uongre$~ as the "Federal SEC. 6. ~ thereof the "Withoi tion~' the a of m ublic anti rtgage As~ .~eral I_S,~~ elude the District tories and posses- Section 7 v formF DEMONSTRATION C~TIES A RBAN DEVELOPMENT 1103 `.sa~d section 5 is hereby r contributions made -- .~ ~epted and no certifi- Li bori~owed money as may be of subsection (c) of. said ng at the end PAGENO="0524" I 1104 DEMONSTRATION CITIES AN URBAN DEVELOPMEN one o" `~`~" of such tri'~ arranger~ of such s r business (1) of section 401(d) of t ii building and loan associal as used meaning which it would ha paragra I not contain the provision SHowing a 5(A) of the Federal ~e Loan I s "or ~y agen~y of the L11 Puu A4~nEIOAN `RANKERS ASSOCIA Wa~ahie~gton, D.C., Apri Hong WTILJJ~AM A BAREi~Y2T, Chaiirman, ` ~ubcoin~mSttee on~ Ho'asing, Rayb~rn `J~ot~e Offtoe Beiiidiny, Waskin~gti~, D.C~ DEAR Ma. BARRETT': You wIll `find enclos(sI a copy of k statement si the views of the American Bankers Association with regard to the h on which your committee has `been holding hearings. It would `be appreciated If you would make this statement a ~ hearing record. I Sincerely yours, OHARLuS It. MeN Director, Wa&hin~it Under present law the Secretary of HU D has authority to increas mum interest rate that can be charged or `single family homes insur PITA to 4~ percent. In `our opinion, the `Sec ~etary should be given comi cretionary authority to adjust the inteN st rate on FHA-insured i mortgages. If FHA-insured mortgages ar ~ to remain competitive an stigma of heavy discounts, and if an even 1Iow of money into FHA m to be main~ained~ the Secretary must havi authority to adjust intere all future J~HA~ mortgages so as to reflect tb true cost of money. In todayls market, it is important that d( ~iaions as to rate be made i that the pi~lic not have to wait for legislati in. H.R. 9256 authorIzes FHA to insure `and, ~TJD to make loans to help cost of coilstrücting `and equtpping faduiti ~ fir the group practice and dentistry. FHA would insure 90 percent of the value of the fac' completion. `The `term of these loans could not exceed 25. years. If loan is not available to an applicant, the Góv'ernthent would make a upon terms and conditions as favorable as those provided `for insured Our members advise us that they are w , l~n'g and able to finance. fl physicians and dentists, and we find no a Idénee of any lack of cre conventiom~l loans for the `type of facili ec covered in this legisis Atherlcan.'l~ankers Association is opposed t this legislation. It is well that mediè~t1 doctors are am4ng the high `~t pa1d profession in Am with ãvet~e incomes *âpproa~hIng $25,000 br year. li~vidence at the indicates that the tyipe `of facilities provk ~d for in this legislation Ii without Federal assistance frOm 400in 194'~ to more than `5,000 today. indicate that conventional credit is kvaitgble `for this type finanrin, primarily geared to insuring loans on residential housing and develo] ects. It has `performed a very fine service in this field. Although it d insurance of nursing homes under an existi'~ig specified program, we fs be inadvisable for PItA to further extend its facilities into the comm We believe this field is being amply Served y other sources. This legK vides financing for equipment as well as m e permanent facilities. Po before 25 y~ears the equipment would be ~ solete or destroyed and of desirable a~ security. I , I , ~__) be entitled `to any `~ax statute [ON, 7, 1966.' tting forth using bills ` of `the STATEMENT OF TEE AMERICAN BANKERS art INTEREST RATE-FHA INSURE! ILL, ft Office. LSSOCIATrON ON Housixo 1 ` MULTIFAMILY PROJECTS SGISLATION 1 the maxi- d through arable di's- ultifa'mily `avoid the rtgages i~ `t rates on ` IN~URED AND DIEROT LOANS FOE M~ uickly and I DIO~L AND DENTAL FACILITI inance the f medicine litiés upon .n insured Lirect loan oans. cilities for it through ion. The recognized rica today e hearings tve grown ~his would . PITA i's ient proj- 55 provide 1 it would ~cial field. ation pro- sibly long ourse Un- PAGENO="0525" DEMONSTRATION CITIES A~ RBAN DEVELOPMENT 1105 The American r loan provish loans have for veterans used their V~ 51cm in the their GI homE program for ye it is believed over the next r the 60 or 70 is a demonstra- and may ei~n- corr~~~, and other i PAGENO="0526" 1106 ]~EMONSTRATION CITIES AN URBAN DEVELOPMEI' made up to 50 percent of th~ costs of th~ programs with the quaiL total grants could not exceed $5 million before July 1, 19~7, nor before Ju1~r 1, 1968. `The American Bankers Association st~pports titles I, III, and 12946 in view of the inabilityof the many~public bodies to cope with tions with~ut 1~ederal help in the way o~ ftnds, talent, and coordin There is a1 widespread need 1~or better int rn~tion and easier access tion. It i~ noted that transportation, s. ~rers, water, . recreation, a ment of o~en space areas are to be inclu ~d. These are the elemen a region together and should receive evei encouragement. These e essential t~ proper urban development ~ id for the protection of values. ~ Title IT would broaden the program of financed land development foi~ "new snb~Th amount permitted for a single land dev~ from $10 million (the present maximum al to $25 million. The ABA reaffirms its op which not only involves excessive Federal large developments can be handled with! ancing. ~ To date, FIIA has ~proved a I existing i~thority. After mere extensir authorizatlbn for new SUbdI~elSions, the to judge tl~e feasibility of thje much mor examples o~ "new towns" ~tbat ~ have been Title II ~would also authorize Federal ment agencies to flnan~e the acquisition ment of new suh4ivisioixs and new towns) to the Treasury (currently about 4 percenl sible for gØvernmental bodies to acquire direct Government loans and would restri~ out in a development plan. The ABA is op~sed to title II as we fe for develop~nent purposes would be to finan insured by the FITA similar to the loans ~ ~l a better method for aeqi ~ethe acquisition with prhr ~hhth ilnanee new subdielsi HOUSING ~&ND URBAN DF~VI5LOPMENP AMEN~MENTs-E.R. 130434 AND H, Section .1~1 would permit, ~reminms ch~tj~ged for FHA title I pr provement~ ~ loans, made or refinanced wi~hin 1 year after the date ment, to be paid by the borrower rather than~tbe lender. The ABA supports this change as it wil permit the PITA title I p compete on a more equal basis with other f~rms of consumer lending. encourage lenders to use the l~itle I progra~i and help counteract the* off in volume of title ~ loans. However, w~ recommend that thls cha be made per~nent rather than limiting it t. ~ year. The ABA~ supports section. 103 which w*id, increase the maximum limitations on single fami1~t dWellings flna$eed wider FHA's section home mortgage Ip~ura~e ~rogram for lowian4 moderate income and families fi¼~m $11,0~ to $I2,~00 and on t~vo-family dwellings from $20.000. . ~t~~ent economlecenditlong and 4~ests make this Inereased Section 104 would peinnit local housing a~theflties~to lease dwellin! income families for more than the present ~year limit when such fa displaced by urban renewal, highway const*iction or other govern.men The ABA iS oppeeed to this Section as a lGng~terni lease would make mental change in this program which was intended to make privat (not publielp owned) housing available for iow4ncome families as a s to thepublie housipg program. We believe that an optional renewal cia afford reliefin such eases. The intent of th4 present law is to provide t housing for those displaced. Three years $óuld suffice to enable disp sons to loea~e permanent housing elsewher4. ` ~ Tf the lease is made fo a period, the property would take on many o~ the characteristics of pub ship. ~ I ~ The ABA ~supports seetion 10~l which wo~r1d establish a program de encourage aDd assist the housing industry injredttelugthe cost and imp: quality. of høuslng through the application ~4 teehnokgical advances. cation that ;io million V of HR. I hese situa- ~ion study. 0 informa- d develop- ~ that knit ?ments are cal estate ~`IIA mortgage insurance visions" to include "new to 4opment project would b nount available for new su position to this "new tow~ planning but Is also unnece present authorization or tn for ouly~ one ~ubdivislo Use has been n~ade of t ~ngress will be in a bett ~xteñsive program. Ther evekped with. private fina cans to State or local lar ~f: land (to be used in lat at rates based on the cos a . The proposal would in raw land at low interest ~ use of acquired land to u r privately Tns." The increased divisions) ,, program sary since rivate fin- under its Le present r position are many cing. a develop- r develop- of money ke it pos- ates with Os spelled iring land te capital ns. :. 18065 perty illi- of enact- ogram to This may ecent fall ge should mortgage 21(d) (2) displaced 18,000 to sirable. for low- Lilies are al actiOn. a funds- Ly owned pplemerit se Would mporary aced per- too long ic owner- igned to ~ving the PAGENO="0527" ~v7~8hingt In behalf of 49 States, we u stance of .~` part I this com~ a policy ~ Both S~ Hon. WILLIAM A. BARiu3TT, Okairma'ii, ~ubcomm~ttee on 1~ou$i~tg, Rayb~rn House OfflceBvA~Un~g, W~shingto~, D.C. Dn~E OHAXEMAN ~ i~ehal1 would like to re~ômn~end con~idei~atioE amendments in couneCt~Q1~ with pei~din~ covering explanatory n~moranduni, a s~ section analysis. These amendments would periqit F better meet today's bousiu~ ~eeds by mobile homes, loans on bousehçld ±urnii ments in sites to be developed f~r heusin, Although these will be lmpoi~tan~ to t: associations, they do not cOnstifute an~ They are all closely rel'a1~d t~ ou~ tra nee~Ts of `the American fami~y. Sincerely, SAVU~G~ A~D L GE] The purpose of these `~av1'~gs 4nd i changes in the lending powGz~ Qtf Fede enable these InstitufiQils f~ be t~r ~eet tially, the~ provide ~or limIt d1~vest: housebøld equipment ai~dl~p oy~~i ,po~ merit o~' housing sites. Like the limited authoi'ity t~ make C( by Congress in 1g64, these ameridme: American fathll3t. They are modern closely related to the Amerlca~u h~me. basic character or purpote of~ savings W~BII It is proposed that FederSi è~~s~iati of their assets in loans on mbbilé her ingly iimportant to the bousi g markel `V ,~ in sub- 1 was ~ House. rs in large ç. To have -. ~ernment is ed section 310 last this telegram in .S. SAVINGS & LOAN LEAGUE, ~shl~n~gto~r, D.C., April 6, 1966. savi~tgs and loan associations to .g limited investments in loans on id equipment, and loans and invest- ida Qf individual families and many r revision of savings and loan law. ~furict1 11 of financing the housing STEPXXEN SLIrHER, Legislative Director. uendments is to make modernizing rings arid loan associations so as to ~s particular housing needs. ~sseu- ri loans on mobile homes, loans on finance the acquisition and develop~ education loans granted associations cognize the ~hanging needs of the ions. of existing powers and all are would not result in a change in the an associations, (ES 1~( authorized to Invest up to 5 percent [`he modern motdle home is increas- rit1~ a total of 282,000 units sold in 1964. I DEMONSTRATION C~TIES AN DEVELOPMENT 1107 March 3, 1966. the P es~ - -- ~ng .L~8OOit tion. ft Lou rest ~e 1~JM, Savings & Loan League, I Lven to Including savings and loan Ving ~egis1ation. I have enclosed a ud language draft, and a section-by- e a: 10 it isa L1~(ENnMENTS cia' a1~ ~ Lie~ d j~ PAGENO="0528" 1 108 DEMONSTRATION CITIES AN~D URBAN DEVELOPME T of these, 191,000 were strictly in the mob~iIe home category as eontr steci to the so-called travel trailer. T1~se mobile h~mes provide economical : ousing for many young couples, transient people, a~nd retired persons. How ver, under existing 14w, they are classified as "perjonai. property" and savin and loan associatioi~s are currently restricted to lo4ns secured by real estate. The entrance of savings and loan ass~ciations into this field woi Lid provide additional available capital which could ilesilit in loan terms more f tvorable `to the borrower, This authority has `the endorsement of the 1~edera1 ] lome Loan Bank Board wa~ approved by the House Banking and Currency Sul committee on Housing in 1964. HOUSEHOLD FURNITURb AND EQUIPMENT It is proposed that Federal associationc ~e authorized to invest up t of their assets in homefurnishings and eq$ipment. Such equipment part of the cost in the acquisition of a hoi~ie and its financing should nated with the mortgage on the home itse'f. The. savings and loan having already made the neci~ssary credit ~heck on the `home buyer, ~ a position Ito extend credit for hornefurnisl~ings on favorable terms. Whereas 20 years ago equi~ment was a vry incidental part of the ho' represents as much as 15 to 25 percent of tha cost. This is because of of such items as dishwashers, clothes washers and dryers, deep freeZE ditioning, draw drapes, waThto-wall carpeting, disposals and other modern equipment. This provision was also approved `by your Hoi committee in 1964. ACQUISITION AND DEVELOPMENT OF HOUSI1~lG SITES One of the major obstacles to homebuildi~ig today, particularly in th medium-price classes, is the lack of properl[y developed housing sites. more `It is fiecessary to go far into the s4flrb~ to dlYtain tracts and necessary t~ install appropriate utilities, s~urers, streét~, parks, etc. posed that ~`ederal savings and loan asso$iath~ns be given greater f developing land sites, including the right Ito own the property. This' limited to 5 percent of assets so that no association would be engag~ major way in the homebuilding business. A number of States have this activity for State-chartered association~ over the years. SUMMRR-HOMIL~ LOANS One of the latest developmertts in. hoflsin~is the emergence of the family. Growing numhers of families are ~eking vacation `homes at I the mountaihs, or "just away from it alL" ~It~s many as 100,000 such hc built in 1964. It is proposed that Federal 4ssoeia'tlon's be authorized t to $5,000 onlsuch homes within the present 4estrict.ions on property imp loans. A sutinmer-home loan would he treatled In much the same mann addition of ~t room or a garage or! existing ~toperty. No increase in ti cent of assets that restricts this general category is requested. AUTHORIZING ABBREVIATION TO FErkEBAL SAVINGS ASSOCIATION In the interest of simplicity in advertising and brevffy in theck writi Federal savings and loan assoeihtion's `have become informally known a~ savings associations. It is proposed that ~ie word~H"Federa1 `savingi tion" `be made a legally optional name for th~se associations. Those ass wrho wish to ~ontinue `the name Federal savi4igs and loan `association ( n large investitients in signs, htiliding `fronts, ~étc.) could continue to `do years comme~eia1 banks hav~ uted the popul~t nathe such as "Bank of instead of tbE~ legaleorporate title. j ` . Substitute in the place of the first senten~ce of the `second `paragrapi section 5(c) the following : , "Without regard to any other provi~ions of this subsection cx area restriction any such association is mjthorized to invest: "(1) not in excess of 20 per centum çsi the assets of such assoc loans insured under title I of the Natio~ia1 Housing Act, in home I I ) 5 percent [5 a major be coordi- asociation, ould be in ise, it now ;he advent 5, air con- pieces of sing `Sub- ? low- and More and then it is It is pro- `eedom in would `be d in any ~erinitted two-home he `beach, flies were ~ loan. up ~ovement ?r as the b 20 per- ~g, many ~ `Federal associa- ~clati'ons ~me have so. For merica" ` of sub- ~ept the ation in mprove- PAGENO="0529" I DEMONSTRATION C~TIES A] ment loans insured under t~t1e ~I of loans insured or guarantee4 under t justment Act o1~ 1944, as a~ner~ded, States Code, and in otlior ~oar~s for of existing structures on re~il proper thereon, or for home furn~shings a: loan, unless so insured or ~ guarantE An~t provided f'Urther, Pha~ the am equipment outstanding at ~ny. time assets of such association ; ~4nd "(2) in the purcbas~, de~telopmer primarily residential purposes, and cise the rights of an owner of ~ny a ments of any such assoclat~on in SUE exclusi\~e of any property ac~uirei pursuant to this section, shall not Add at the end of .subsectiOn~'5(4) th "Without regard to an~ other association may invest in ~oans, oh which are hereindfte~ ref~rred to dwellings, but no associati~n s~iall r if the principal amount o~ Its ~flVE investment which is or ~l~1ch at Ui thorized, would thereupon exceed ~ * * sTh~PLII~IcAT: Add at the end of subsecti$ 5(a) o~ 1464(a) ), a ne~r sentencö readi~ig: "Any Federal savings and lo~in as: `and loan' from Its prescrib~d title." SECTI~N-~Y~~SEC Section 1 ~tould ad~ to àist~ng áuthO: imprOvement roan a new strüctu~e on loans for the purchase of honie furnisi not exceed $5,000 and the âino~int in ba 5 percent of the association's a~sets. SectiOn 2 would authorize ~ed~ral in the purchase, developm&it, an4 Imp of an owner of such property. Section 3 would authorize a~ a~socia loan~ on mobile dwellings. Section - would authorize ~ "~eder~ at its option the legal title "1~e~leral ~avi Ben. WILLIAM A. BARRETT, Chairman, Housing Subcommi~tee, Root Wa~hington, D.C. My DEAn CONGRESSMAN: Pl~clo~ed h tive vice president of the Nattonal Re ILB. 13790 and }LR. 13'~2. We would appreciate it vei~y n~uch official record. Thank you. Sincerely, VRBAN DEVELOPMENT 1109 fl ational `Housing Act, in unsecured visions of the Servicemen's Read- ipter 37 of title 38 of the United Literation, i~epair, or improvement the construction of new structures ctipment Provided, That no such iall be made In excess of $5,000: f loans for home furnishings and not exceed `5 per centuin of the iibtrovement of real property for iold ~ sell, lease or otherwise exer- eperty : Prorided, That the invest- property ontstanding at any time, ~r any other' ` `authority exercised I 5 per centum of its assets." wing new paragraph : ion of this subsection, any such b~, and advances of credit (all of he), ~or the aç~quisition of mobile my investipent under `this sentence tip ~ucb loans, excli~ive of any ~ o~i1~e making' wO otherwise au- ~entum of jt~ assets." * * TITLES * [omO Owners' Loan Act (12 U.S.C ~on may at its option omit the words A~EAt~SX5 me authority to finance as a property property and authorize unsecured and equipment. These loans could home furnishings could not exceed tions to invest 5 percent of assets ~mt of land and exercise the rights invest up to 5 percent of assets in ings and loans association" to adopi ~sociation." RISATION& PARn AssocIATIoN, WashiLagton, D.C., April 5, 1966. Eayburn $uilding, riony by Joseph Prendergast, execu- ii and P~rk Association, relating to statement could be included in the KENNETH J. SMITHEE, Washington Representdti've. I e~ Cli ie or , 5] nt 1 IC mn4l Ly: un( cee ati~ ` lth ~ue or * he l~] ml f~] r ~11 1-c )It I sa' NATIoN~ ~st~ PAGENO="0530" 1110 t~EMONSTRATION CITI1~1S. AN STATEMEN~V OF J0sEPU PJ~ENDEEGAST, 1~ EECIW~ATION AND P~ Honorable chairman and members ~f Prendergast, and I am exe~ntive vice ~ and Park Association. This organization~ after six national recreation and park org zation ~to Serve the people o1~ the United and recre4tion facilities and programs and meani~ig~ful leisure timeactivitics' fort tions~ that ~iow e~ernprise the Nathrnal Recr~ were the. 1~atlonal Recreat!ou Asaoc!atio4, tives, Ax~ie~r1can Recreation Society, Nati$ tional AsS&eiatlon of State Park Directo4~ Zoological Parks and Aquariums. Laurance S. Rockefeller is president o~ trustees is made up of distinguished lay a~ of the Nation. Over 600 outstanding par1~ various national and district advisory com~ and loyal parks and recreation agèneiés, affiliates o~ the association and over 7,tX~ membern o~ its professional division. , We woul~I like to testify tod~iy on behalt aid to etb~age and ~ assist in thf~ ~pi~ese struetures)1 and ~LR. ~~i3792~ (o~i the ~ preservatiob activities ~f the Federat ~ , .1 public bedi~, and private orgapi~ations and The National Recreation and Park ~ss Government is showing concern and is Seé1~i Natiozi's .rleI~est heritages-the p~rpetuatio~p marks. It is our moral ~bligation to in~ inspired. .ana stimulated by being able t~ tç personages and the great moments in history, Our historical ~ structures are being dé are either being razed or abandoned' 1~h~ou ~ this trend 1~o continue. It ts hnper~tive t H.R. 1379~, by providing financial asst~ta~ of historic ~truetures will pruvide the i ment into l4gh gear This bill ~iiso provid. Advisory O4uIieil on thstorie Preserva1io~i 1 We are ph~4sed to see that r~~esentation officials at l~he local ax~d State levels by cou~ity of~h~jal, and a represenl~Uve of e will generate interest at the grass roots Jeii must receiv~ thei*, support. , , . H.R. 13~ provides for asslstanée and c~ ernments. ~or historic preservatiQu ot activit register of historical sites with perti~nt local governments will be of inilnile valu the action nØcessary to safeguard ouriiistori The Natio~ial Recreation and Park Assoc of these bi~l~ an4 urges their prompt e~iaetm ) URBAN DEVELOPME~ ~zoiirjvn Vic~u PRESIDENT, iK AssoCIATIoN ~e subcommittee, my nam resident of the National came into being on Janu Lnizations merged into a si ~tates in their pursuit of nd to help provide more the American people. Th ~tion and Park Associatio American institute of P Ml Conference on State i, and the American Asso this organization and it id professional leaders fro s and recreation leaders s uittees.. Sonic 2,500 n'atio both public and private, ~rofessionai recreation 1 )f i~t. ;I~37~io (o1~i financial ~`att4m and maintenance ~t}on and coordination bate, and local g~*ernm ndividuals). ~eiation is pleased that ti lug legislation to preserve of our historic structures ure that future generatio Leiiti~y with the lives of o operation with State and ice.. The compilation of a ziventories prepared for in accounting for and I al legacies. ation enthusiastically sup~ ut. f Senior r citizen I, NATIONAL is Joseph Recreation ry 1, 1966, gle organi- etter park wholesome organiza- formerly rk Execu- arks, Na- iation for board of ~ all parts rye on its al, State, re service aders are and other f historic f historic ts, other S Federal ne of our and land- S can be r famous troyed at an alarming ra a sheer neglect. We must at we act now before it I ce for acquisition and reh etus to get thia worthw ~b~r.the estab4ishniènt of. ~ earry .out the policies o oIl. the cuuncfl will inclu e appointment of two m: LCh State's Governor. TI el where programs * to be ;e. They not allow too late. bilitation [b. move- National the act. e elected y~ors, one is action uccessful ocal gov- . national tate and stituting STATEMEN~ Bt JOHN W. EDRtht~, PRDS$NT, NATIONAL COTJNCIL OF CITIZENS, IN SUPPORT k~F H.R. 9~6 )rts both ~ENIOR Mr. Ohairman and ~mbOrs of the comm1~ttee, the National Council Citizens is a nonprofit, nonpartisan organi~tion of independent 5mb clubs and individuals located mail States. ~ .. In the few years since it was first set up~in August 19~1 to spearhe spread public support for medicare, it ha4 become the largest-and one of the most effective-national organiz~4t1ons for older people eve America; O~ir more than ~2,OO4~ affiliated cl4bs include a combined me of over 2 mtllion elderly poo$e linked thfongh statewide and area munity councils. Ld wide- perhaps seen in ibership or corn- PAGENO="0531" DEMONSTRATION CITIES URBAN DEVELOPMENT 1111 as promoted the ILR. 9256 and eve this legislation achie~iL g a `better life for all ssist Its citizens to secure a free society but which s in the we popu- )propriate ment came wced with .1 interested ugh quality. ~ve become nericans who are to close the gaps all citizens. )fl and equ~ 1 as provid to all ( to support the Pz sital portion of thi only n to 5 p~-~ section 2( bill intro much-needE ~-ofalla ~that i direct em- ~itual1y help ication of citizens treatment. More their illness. PAGENO="0532" I 1112 DEMONSTRATION CITIES AND t~RBAN DEVELOPMENT ct was an pro- st rate which ~epart- 00 per- nprofit T. Wil- st rate would n corn- Arner- [plan- ities- avail- ~i, pro- ion of n and meet would be eligible in projects financed even before the 11105 Housing passed. ~ ~ I Nor would these funds meet the need in new frojects under this direct 1 gram which wftl continue to inctoase rapidly ~s the new 3 percent inter enables more ~nd mta-e potential sponSors to~~j~w~tleipate in this prograr serves the needs of the lowerinidth~ incom~old~rpeopie so welL We urge yopr committee to st~ppo~t S~ 252~whieh Would enable the ment of lousing and Urban Development to ~4ake direct loans covering cent of development cost for new or rehabilitated nursing homes to ii groups, lirnit~d dividend corporations trnd pnblik~ bodIes. Provisions o~ S. 2520 which has been intro4uced by Senator Harrison lianis of New Jersey would permit lottns to b&tnade at a maximum inter of 3 percent and for 50-year teribs. It has been estimated that this bill permit nursing home charges to be reduced b~ as much as `~80 a month parison with ntirsing homes financed with PH ~ 232 mortgage insurance. It is the experience of the leaders of our cml ~ across America that olde icans require l~uilt-1n access to health facilitb ~ and social services. Goo fling of housI~4E deveh~pments ~hou1dIneludo e amonspace for senior act! including cra~ shops~ meeting ro~mia, and Ion gas. Space should also b able for a health center, dining room and othe facilities to reluce isolati vide meaningful activity and stimulate good h alth, in the retirement yea Rut the menthers of the Housl~g Subcommi tee know that the installs these vital conitmon spaces tremendonaly inerdase~ the cost of constructi requires the elderly residents of the project to bear higher rental charges I these costs. It is therefore our hope that ~he comrnitte~ will provide these much- facilities under the existing nonprofit, consu~ner cooperative and pubi grams in the Department of Housing and Ur an. Development by institi program of grants for the capital cost ~ n~ieea ry related facilities such a~ These facilitie~ might be used by elderly per na in the entire communit limited only to testhients of the prójeet ~ Frankly, th~ trapid growth of the elderly pep lation calls for a serious r~ and evaluation[ program into all aspe~ta of ~ pior citizens hduslng. W learn more about the types of housing needed a d must provide adequate fi research such ~ program. We mubt also seek I o provide a program of gr States-preferrtbly administered bythe Depar. meat of Housing and Urh velopment-to provide communities with the hecessary * technical assista evaluate and review needs and pithis for housi4g needs for the elderly. We also urge the Federal Goveanment to make grants to States, comm and national nonprofit organizations forinitial ~rldng capital and "seed i for the neeess~ry working capibal required ~r Olderly housing-despi availability of 100 percent developpaent loans o mortgage insurance loans We urge that low mterest direet loans and rants for rehabilitation in renewal areas l~e made available to low-ineom ~1derlyhomeowners who substandai~d ho~iMng anywhere. It will benell t~ health, safety, and c of the e1derlyth~d help to upgrade ~ieighbarhoo~ ~ The Federal Government should also make g iftt~ to loW-income elderly owners forced to relocate because of go'~rernin~ ~t adtion, such as urban. ye etc., to asaist them to purchase auother home I they wish. Many elderly to relocate in this way now own their .homes~mortgàge free and wish t tinue bomeownership. However, the cost of a ~inode~t and suitable replac home is generally greater than the proeeeds r4ceivcd in the sale of their ing home. It should not be difficult to~ work o~t a grant to cover the cliff with proper safeguards with respeetto resale, ~naximurn cost and maxim come limits, etc. ceded C pro- ting a these. -not earch must nds to nts to n Dc- sce to nities OflCY" e the urban lye in mfort home- ewal, orced ~ con- ment exist- rence m in- IIC. ALO ALTO MEDICAL CLINIC, ~ F* Alto, Calif., March, 22, 1 Hon. WRIGHP P~tPMAN, Chairman, Banking and Currency Co~sun~ttce, Ilease of Representatives, Wathington, D.C. DEAR Mn. PADMAN : I am writing ~OU with Some suggestions as to thO ing legislation in regard to group practice. I have been associated with group practich for 40 years and have the head of one of the largest community orie3ited groups In the countr pend- been , the PAGENO="0533" DEMONSTRATION CI~'IES I' URBAN DEVELOPMENT 1113 Palo Alto Medical Clinic. I am cert services can be delivered efflcier~tly t marked shortages &f medical anc~ par~ the device of group practice,~ and I b way. ~ ~ ~ There are two things wbicl~ I think available on sonic sort o~ FH~. basis t periods so that clinics could t~uild thei be made without demanW~n~ anv equl of young doctors wants to st~rt a clini upon. All this money would ~e return o~ risk. of losing any of the ~nortgage~ same way a~ corporations so they, too funds. If the group could b~ sure it this would encourage group praetice Keogh amendments are so. c~ose that. set up a really adequate retirement p to put as much money as it thil4ks ii up. It is only fair to give t~he profe businessman and would, in itself, b In the long run, the enco~~agement problems of the supply aiicl d~m~u~id of Sincerely. Hon. WRIGHT PATMAN, 1 Curr~ ~presen D.C. .at the only way in which medical e who need them, in these days of al personnel, is by the utilization of it is important to help it in every aid this. The first is to have funds aned at regular interest but for long establishments. These loans should th. the group ~ because when a group ~ ordinarily have no savings to draw time and there would be a minimum e second is to qualify groups in the ~ withhold retirement and disability have a tax-exempt retirement plan, y. The limitations imposed by the S not permit a group of doctors to Legislation should permit. the group e into the retirement plan they set 1 man the same opportunity as the nsiderable boost to group practice. oup practice will solve many of the al practice. .RTJ5SEL V. LEE, M.D., Consultant. at p1-~Lel 1 on ~ds us to the eon- the interest of the vable method of ~n. . I shall - as well -~--~ has the at instead of S proper care 5 fragmenta- services and ~anizational 1 hO ev `7 it a S 0 p ill el the in ul~t ea~ I . HOSPITAL & MEDICAL CENTER, Bron~s, N.Y., March 25, 1966, PAGENO="0534" I 1 1 14 DEMIONeTRAPION CI1~IES AND IRBAN DEVELOPMENT ties of medici4e together in one location usinj one set of resources and f and producin'g~a s~ng1e patient record. Another factor about which ~ are all beco$ing increasingly concerne matter of health care cost. Despite the enorthous increase in our countr ductivity, the cost of medical care services-~and particularly the cost pital services~-has outstripped any other it~jn in the consumer index accounting for an ever-greater percentage of the gross national product. this is a development of which we can be proiud. It Is the explosion of in medieine-*ith new drugs, new machines, fthe involvement of physics istry, electronic engineers, comj~uter specia1~ists; and other newly de skills-which has produced the medical m!i~teles of which we are so proud. But $racles are expensi~e. `~or in a4[dition to these new develo the modern gei~ieral hospital whlc~ is th~ site here all these wonders are has also been ~uffected by the ne~d for ever n~Ore personnel to operate t] complex facilities, and the pay s4~ales of hospital employees which were the bottom of the heap have noW begun to arjproximate comparable lab in other industries. The result has been thI~t this combination of ne niques and new capacities in medicine plus i$Ore and higher paid hospi sonnel has seen annual increase In per diem I*~spital costs which, in our the country has averaged from 8 to 10 percent~ and I believe this to be varying degree throughout the country. Fitrthermore, ~ there is no 1 . sight. This upward spiral of hospital costs has b*ome of concern to those ~ their own hospital bill as well as to every third~arty insurer, whether Blu commercial iE~urance companies, or local, Stat~, and Federal Government concern with l~he matter of increasing cost o1~ health services, and part! hospital costs, ~s heightened at this time~becai4~e of the implications as m and title XIX ~o into operation. Because of 1±is growing preoccupation with hospital costs, a great appropriate coEcern has been directed to lns~riug~ that hospital operati as efficient as is possible, and at the same tiitie iEcreásingly effective st being taken to make sure that communities do~not build more hospital be they need and that duplication of ~ospital facilIties is avoided. There is ci ing, and should be encouraged, ever~r oppc~tmlity for hospitals to cooperatively In such economies as centraliz~d accounting, centralized computers, centralized launjries, and laborato4ies and purchasing. Despite the appropriateness and obvious e~ectiveiiess of these activ streamlining: the hoS~itaj ~operath~n, the singbj zuosfimportant factor ha do with total h~spital cost is hospital utilizatic4i,and ho~pit~i utilization in significant t4easure outhernethödby whkihlfr doctor carries on his pra The decision~to hospitalize the pa1~ient varlesjin indivIc~ia~rinstances fro: obvious and eSsential to other situations wh*ré it represents a doctor' ment which can be i'eadily affected bytheea~abi11t}e~ available to him f sultatlon, diagt~osLs, anti treat1n~nt on * an a4~buiatory basis. It has b pe4tedly demonstrated that when a doctor anci patl~nt have readily avai'] them extensive ambñlatory diagnostic and treatment services in a group ~ unit, hospital tttilization is slgnMcantly dimi~thhed, with some hospitali rendered unnecessary and many ~bo5pitaIizati4tis being of shorter durati the exten~ve group practice activity represeni~l by the hospital insuran gram of Great~r New ~ork,~hospjtaJization is ~t leá~t 2O~p~rcent less tha parable hosp1t~lizatio~.for. a~m~te1ted pepulatloJ~ * At Monte&a~e HdS~iUtl; we ha~e a medical ~oup prâctic~ unit which, h in operation f~r more than 17 y~rs. At thI4 time, we have approxima salaried physi4ians, full time or part time, p4oviding total medical care home, office, atid hospital for m*e than 32,OQ() people. The Inpatient Ii use of the pecq*e who are c~ed for by the grcn~p is20-percent Ions than w expected for the same group if it were earedfor by other methods of practice. A 20-percent-or even a 1O-percent--~cut in hospital days in Ne City alone re~fesents tens of millions of dollays in payment for hospital While the annual hospital operating costs ~frhich communities could s cutting down inpatient hospital utilization by 10 to 20 percent is reason to push the des~elopment of group practice, t1~ere are, of course, other consequences of such a developmept. The gros$rth of our population and i jug demand f~ hospital services `will surely 4equire additional construc hospital beds. The broad institution of group ` ~a'cticee1early makes the: I cilities is the `s pro- )f hos- and is Again, science chem- `eloped justly ments, ocated e more ong at r costs r tech- al per- )art of rue in tup in 10 pay Cross, . This ularly dicare cal of us are Ps are S than velop~ perate use of ties in ing to epends ~tice. being judg- r con- en re- `tble to actice ations n. In e pro- 1 coin- 5 been ely 50 in the spital uld be octoi~s;' ~ York are. ye by nough ositive creas- ion of umber PAGENO="0535" DEMONSTRATTO ~ C]~TIES of hospital beds which a eo~nm1*nity and there would, therefore,~ be a gr funding involved in the cre~tion of it is in operation-whether fully oc the community, and what n~ay be ev those health professiopals ~ho are manly physicians and nurses. Group practice is a much ~nore eco Instead of each of the 18 o~ 20 inte efflcienctly operated office w~ h. ~n in machine in each office ~tsed pa~t' ti' receptionist, etc., by workip * to~ethe serve not only the 18 or 20 int~rnist as well. These virtues of grouppraetlc~ are of medicare, where 19 zfi1ll~on older need than the rest of the p~pu~ation care and doctor's care ~mnanced, it is age every device which will ass~re p minimum use of the expensive iup effective methods of providi~ig c~octor It is clear that the hospital~ wil~ mor it will become more comp1e~ tnd~ costl in quality and economical i i o~erat bed more carefully `than we h ye ~ieret being primary. To insure quality ancl~ eco om~, we the hospital and broaden th exit. practice, group practice mu~t be enc integrate specialty services, It j~rodu pital use. The hospital ezi~ can be home care and by an adequale r~ursii There Is no question that ~n aciditi is much better served by th~ ari~ange a hospital bed he really doesnit need. I would be pleased to meet with y that to be of use to you in you de~iber~ Sincerely, Hon. WILLIAM A. BAR~U~T, Chairman, Subcomm4tt'ee on~ Housi~ rency, Rayburn House Oy~flce J3uil DEAR Mn. (JHAInMAN : The Ai4erica quests that ll.R. 9256, a hi 1 t~ am' mortgage insurance and author~ze d nance Administrator, `to hel~ fin~ince cilities for the group practic~ of ~ meW the words "or surgery" af~ter~ the wor definition of group practice.f~cili~y wil " (2) The term `group praCtice facil vision of preventive, diagno~tic, and (in which patient care Is un~1er the p to practice medicine or $?urgfry in `th or treatment, under the profe~sional dentistry in the State) and ~vhi~h is services by a medical or dent~l group." The purpose of the amen~ime~it is ` group practice facilities in ~hic~i pa vision of doctors of osteopatl~iy whose tors of osteopathy are so license~1 in 3 6O-878--66-pt. 2-34 URBAN DEVELOPMENT 1115 smaller than is the case otherwise, ving in the very expensive capital ospital beds, A new hospital, once ` Or not-becomes a fiscal drain on re serious, it creates a demand for y in desperately short supply, pri~ al method of practice for -physicians. in our medical group having an in- `.1 hiboratory, X-ray and fluoroscopie ineffiCiently utilized secretary and Le area, 2 fluoroscopic machines can the other doctors within the group wly discovered, but with the advent icañ~, who have a greater medical now be able to have their hospital `ent upon us to examine and encour- S `the services they require with the hospital service and by the most ces. more be the center of medical care- we are to have a health system high e must, ~ therefore, use the hospital always, of course, the patient's needs figuratively narrow the entrance to be hospital entrance lies in medical d because `It is the sound way to gh-quàlity care, and minimizes hos- ened. by extensive use or organized e establishment In this country. the fiscal considerations, the patient suggested rather than by occupying your committee if you would deem se Committee on Banking and Cur- 7as1u~ngton, D.C. eopathic Association respectfully re- e National Housing Act to provide eans by the Housing and Home Fl- st of constructing and equipping fa- r dentistry, be amended by inserting Licine" in line 3, page 10, so that the as follows: cans a facility in a State for the pro- ent services to ambulatory patients ional supervision of persons licensed e or, in the case of dental diagnosis `ision of persons licensed to practice rily for the provision of such health lie supplied.) sure eligibility for participation of are is under the `professional super- e to practice includes surgery. ` Doe- es and `the District of Columbia. u .1 eçl~ cc? n e 2 S f a m~ nil e~it I~l~ TIN CHERKASKEY, M.D., Director. COUN N 0 ~STE0PATHIC ASSOCIATION, ` FuDEBAL HEALTH PROGRAMS, Washington, D.C., April 5, 1966. I~] I t r 0 U Jo U, o~ `Ii at es ita )er ~fl! ( :ii~ Ft ie PAGENO="0536" 1 1 16 DEMONSTRATION CITIE~S AND 13 RBAN DEVELOPMENT The proposed amendment comports with th4 language employed in the defini- tion of medleal or dental group on page 10 as foUows: " (3) The term `medical or dental group' mJeans a partnership or othe elation or group ofperson~ licensed topraetic~ medicine or surgery in th~ or of persons ljcensed to practice dentistry in he State, or of both, who, principal prof~ional activ1ty arid ~s a grou responsibility, engage or take to engagq in the coordinated practice of their profession primarily or zn~re grôuj4 practice fâelftt1e~ and who (1 thIs cOh1i~ction) share c overhead expe~ises (~f and to the extent such expenses are paid by mem the group),, m1dical and other re4ords, and su. tai1ti~t1 portions of the eqi~ and the profes~iona1, technical, and administr tive staffs, and which part or association or group is compo~ed of~ at lea ~ ~ ~nch professional person make a~ailth1e at least suèh health services s may ~be provided in regt prescribed under this title." (Italic supplied.) The attached extract from Health Manpowe~ source Book, Section 14,: Specialists, Puhlie Health Servh~e Publlcatloij No. 2~3, which refers to of osteopathy as physicians (1).O.) , shows a~ ~ of 1962 the type of pract type of speciality of physicians (M~D.) and p ysicians (DO.) , and sum the number o~ full- and part-time specialist for medical and for oste physiciai~s. Incomplete iteturns reported in a Statistica Study of the Osteopathic sion, compilóà Iby the Amerkan O~teopathie A sociation, show that, as of ber 31, :t964, 1~here were 1,261 h~ small path .~hip and 470 in group p The number isincreasing and th~ benefits of I ~. 9256 should provide ad stimulus. Sincerely yours, LAwRY~cE L. GOnRLE~Y Legal Go PHYSI~AN5 (M.D. A~TD D.O.) The total simply of physician man~wer i~ the United States, Puert and other U.S. outlying areas numbered aln4~t 274;000 physicians (M; D.O.) in mid~i~962. Included in this total we4~ about 259,000 physicians and some 14,7~OO physieians (D~O.) . These fiumbers are based on md physician pun~hcards supplied ~y the Amerlican M~dical Association American Ost~opathic Association to the Ptibli~ Health Service. * All inte residents in ti~aining programs are included ~vhether United States, Ca or foreign doctors. The' 1962 ratio is 144.7 physicians (M.D. 4nd D.O.) per 100,000 pop about the same `as in `1940. This ratio is abo~e the 1931 level of 136 an the 1949 levelof 146.8 (table 17). TABLE 17.-Nuri~ber of physicians~ (M.D. and D.O.) and p1tysioian-po~ raUos, 1931-f~2 ` [tern ` 48 States and D strict of Columbia - 40 168, 906 ~ 158,406 10, 500 136, 0 I ii, 043 J ` 78, 643 12, 400 `144. 6 218, 977 206, 277 12, 700 146. 8 50 States, Di Columbia, Pu and outlyin 264, 193 249, 989 - ~` 14, 204 144. 2 trict of rto Rico, areas 1962 273,770 259, 105 14, 665 144. 7 1931 1949 asso- `State, S their under- in one mmon ers of pment ership ci and ations edical octors. ~e and arises pathic rofes- ecem- actice. itional nsel. Rico, ). and M.D.) vidual nd the n8 and adiari, lation, below tlatio'n Population, including Armed Forces abroad (in thoutinds, as of July 1) Number of physicians 124, 149 Physicians (M.D.) I Physicians (DO.) 2 32, 122 149, 188 Physicians per 100,000 population 183, 239 Physicians (M.~D.) - Physicians (D.O.) - 189, 209 127.6 8.4 135. 2 .9.4 . 1 Includes all int4e,ns and residents In training programs; a 2 Estimates for 19131-49 based on numbers surviving from all based on individual physician punchcards provided by the A Health Service as Of Dec. 31, 1959, and 1961. 138. 3 8. 5 136. 4 7. 8 136.9 7. 8 ~tab1es 1 to 3 for adjustment. )0.'s graduated from U.S. schools; ierican Osteopathic Association to I ater data IC Public PAGENO="0537" .~ U i and preventive medicine TyPE 0 About 131,000 or 48 percent of ti specialists. For medical ~octqrs ti specialists In clinical pract~ce *nd o proportion was only 9 p~cen1~, iit~iited 1 The largest nun~tbers of sp~cialiSts. Those in the medical speeial~ies numi ties," including pathology, p~iys~atric~ 17,000 full-time specialists, *hile psçy 12,000 (table 19). JIALTY ~sieians were~ classified as full-time portioii was 50 percent, including ~o'this. For osteopathic doctors the ie in private practice. v 60,000) were in surgical specialties. ~2,000. The group of "other special- irentive medicine, and radiology had y and neurology had the remaining Type of practice ).O.),1962 Percent of PAGENO="0538" All specialties- Medical speclalties~~ Internalme4l6i~ie' Anesthe~iolOgy4 - Obstetrics-gynecology Ophthalmol0gy~OtOlaryflgOlOgy Surgery 1 Urology Psychiatry-neurology Other specialties 1 And related specialties. 962~J~ lists ~1 ~i.o. (~~) 100.0 Type of specialty 10.9 6.3 6.9 14.5 13.7 4.2 29.5 37.7 2.5 1.7 3.0 I 36. 4 1.2 2.6 8. 1 10. 1 PAGENO="0539" we: rn All specialists - Medical specialties - ~EENT 1119 r~ b~ type of s~eciaIty, ime specialists M.D. DO. ~ 12,899 2, 169 - 3, 044 463 247 PAGENO="0540" 1120 D1~II~ONSTRAPION CIPIES AND ¶( Metro ~oUtan College (1st phai~e) 1 Does not 1nci~ude private investmeut. ~ NOTE-These figures are based on existing funds, including urban renewal, highways, o~ The city demonstration program I pr~p~se I flood, which ctj~used more than $*OO rnilliOii predicated oii~ th~ installation of ad~quate- fib and Mount Oa~b&n Darns, but c~nstruëtldn c eluded. * I I appreeiat the oppoftunity to add thi~ inf cornrnittet~'s b~ring. Cordiai1~r yoirs, I At the submit er and have ,ers of ig and a have ~newal *e vote voters of the ace of e corn- which ries of ***~ * ~BAN DEV~ELOPMENT T966. Ray- &ND COUNTY OF DJimrvna, ~* * OFFICE OF THE MAyo: I Denver, Cob., ApriS 22, lion. WiLLIAM A. BARRETT, Oluairman, Hou$ing Subcommittee, House Banking and Currency Committ burn Buikling, Washington, ThU. DEAR CONOR~sSMAN BARRETT: In response t the question asked by Mrs. at line 17, pane 1080, of the t~nsc~ipt taken ~t the Barrett subcommitt ing onMareli I~5, 1966, the fcdlowftigis submitt~l : Total cost of ~1nanc1ng 10 square miles of $ttte Valley as city demonstrath~n pr&ject over 20 years Divided a~ follows : * * * Local private investment L~ $190, 000, 000 Local city investment 85, 600, 000 State investment ~ 9, 750, 000 Federal investment ~ 149, 500, 000 Miscellaneous (including Metropolitan College, sports center, channel impibve- m~t) 5-year progran$ cost Divided54 follows: - -4-.- Dwyer e hear- $635, 50, 000 ~J-.UJ -4 State. Feder 228, 400, 000 20, 996 12, 189, 726 * 228, 418 * 25, 466,~ ~8~* 1, 836; 406 ratios for Federal-local m ~n space and beautificatiol ~ in the area ol! the June 1 tmage. My estimated f1gU 4. control, including the C ~ts for thqse projects are t'ntationto the record ~t tching ~*, 1965, es are atfield aot in- *e sub- *IIOF. 966. TOM; Cuiuuo~w, M rr~.r*n Cou~rv or Drn~vEi * * * ~ De~tver, Uoio., A~Z 21, Hon. WuLIAM E~ WIDNALL, ~** ~ * ~ * House of Representatives, * * ~ * * * * $uboomrnittec on Ho'usin.g of ~he Z~anking and ~4~rrency Uemtm4tee, TVashingtoe., D~U. * * * DEAR £~ONG~SSMAN WIDN~&I~-.: Thank you f4~ your letter of April 12. time of the Bo~sing Subcommittee hearing yo4indlcated that you would further questl4ns concerning Denver's urban ~eñewal program for ans~ insertion in tl~e record. I am happy to an~er the questions which yo submitted, and~ I sincerely hope they will be of~bel~to. you and other mern the Housing S~ibedmraittee in the1rdellberatt$ii~ on the important housi urban developflient legislation now ~before Coi~~gress I wiliset fo~th your questions and my ans*4~a in the same order as y presented them to me. *. * 1. Queatimv.+-Concerning the 1964 Denver botid éle~t1on, was the urban proposal defea1~ed? What was the vote? ~ Answer.-Yes, the urban renewal bond lssu4proposal was defeated. T was--.-for, 29,344 ; against, 34,300. 2. Questitm.-It is my understanding that the bond issue before the offered them t~e opportunity to raise funds f r the local one-third share Denver sk3rlin~ projeot Why has the skyline project l~eeu continued In the refusal oft~e boi~d issue~~unds? * ` Answer .-.~P4 give a complete answer to this Uestlon. you should have t plete lnformaI~ioi~ ~oncernbg the wording c ntahied in the ordinance authorized th~ bond Issue ele4~t10n. Section of Ordinance No. 130, S PAGENO="0541" DEMONSThATION CI~I?IES ND UEEAN DEVELOPMENT 1121 1964, as adopted by the City Council be voted upon: "SECTION S. That the ofl1c~al ~a1lo show the nature of the ~ue~tior~s to machines used at said election LShall which clauses shall be the s~ibm~ss1o: at said election and desiroi~s o~ voti shall indicate his choice by dej~ressi machine which indicates the wo~'d `F "For the Bonds "For the Bonds "City ¶hOI "For the Bonds "Community ai~d t the Bonds of special el Denver *on~ ~~te Qf sue] in ~be year following ques * * nd Recorder of the submission of such 1 .the same manner [ce of regular elec- f i'j )e 11 ar ver read as follows for the issues to he autornath~ toting machines shall ed on, as afo~esâld, and the voting ~ the following designation elauses, e~, and eaeh qualified elector voting or .again~t the following questions e approprtate coutiter of the voting the WOrd `Against': tioG'i~ Against the Bonds "For the Bonds "Forthe~Bonds "Juvenile Hall In~pr ~t the Bonds the Bonds PAGENO="0542" 1122 DEMONSTRATION CITIES AND uRBAN DEVELOPMENT "Tenth Quesôion a accordance ~ to bear inte' urban renewal rojects PAGENO="0543" luins and 1~ As mayor 0 tion port oL ~, I be ion. H is th~ curreni~ 4tat~is of your operating urban renewal h~tve you ~~a1~ed private developers to the poin~ of by ~o'ntr*c~? ~s ii~ ~xec~itio'n, I.e., ~ loan and grant con- f these we are in the and for sale. In the ~nent contracts uction coat of PAGENO="0544" ___________ 4- -.*~ 44- -~----- #4*4--4-4- ,,44~4 - 4~4 44 44~* -~ -4 PAGENO="0545" PAGENO="0546"