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MICHAEL J. KIRWAN, Ohio
JAMIE L. WHITTEN, Mississippi
GEORGE W. ANDREWS, Alabama
JOHN J. ROONEY, New York
ROBERT L. F. SIKES, Florida
OTTO E. PASSMAN, Louisiana
JOE L. EVINS, Tennessee

EDWARD P. BOLAND, Massachusetts
WILLIAM H. NATCHER, Kentucky
DANIEL J. FLOOD, Pennsylvania
TOM STEED, Oklahoma
GEORGE E. SHIPLEY, Illinois
JOHN M. SLACK, JR., West Virginia
JOHN J. FLYNT, JR., Georgia
NEAL SMITH, Iowa

ROBERT N. GIAIMO, Connecticut
JULIA BUTLER HANSEN, Washington
CHARLES S. JOELSON, New Jersey
JOSEPH P. ADDABBO, New York
JOHN MCFALL, California
W. R. HULL, JR., Missouri
JEFFERY COHELAN, California
THOMAS G. MORRIS, New Mexico
EDWARD J. PATTEN, New Jersey
CLARENCE D. LONG, Maryland
JOHN O. MARSH, JR., Virginia
SIDNEY R. YATES, Illinois
BOB CASEY, Texas

DAVID PRYOR, Arkansas

FRANK T. BOW, Ohio

CHARLES R. JONAS, North Carolina
MELVIN R. LAIRD, Wisconsin
ELFORD A. CEDERBERG, Michigan
GLENARD P. LIPSCOMB, California
JOHN J. RHODES, Arizona
WILLIAM E. MINSHALL, Ohio
ROBERT H. MICHEL, Illinois
SILVIO O. CONTE, Massachusetts
ODIN LANGEN, Minnesota
BEN REIFEL, South Dakota
GLENN R. DAVIS, Wisconsin
HOWARD W. ROBISON, New York
GARNER E. SHRIVER, Kansas
JOSEPH M. McDADE, Pennsylvania
MARK ANDREWS, North Dakota
WILLIAM H. HARRISON, Wyoming
LOUIS C. WYMAN, New Hampshire
BURT L. TALCOTT, California
CHARLOTTE T. REID, Illinois
DONALD W. RIEGLE, JR., Michigan

KENNETH SPRANKLE, Clerk and Staff Director
PAUL M. WILSON, Assistant Clerk and Staff Director

SUBCOMMITTEE ON INDEPENDENT OFFICES AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

JOE L. EVINS, Tennessee, Chairman

EDWARD P. BOLAND, Massachusetts

GEORGE E. SHIPLEY, Illinois
ROBERT N. GIAIMO, Connecticut

JOHN O. MARSH, JR., Virginia
DAVID PRYOR, Arkansas

CHARLES R. JONAS, North Carolina WILLIAM E. MINSHALL, Ohio LOUIS C. WYMAN, New Hampshire BURT L. TALCOTT, California

G. HOMER SKARIN, Staff Assistant to the Subcommittee

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INDEPENDENT OFFICES AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT APPROPRIATIONS FOR 1969

MONDAY, MARCH 18, 1968.

DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT

STATEMENT OF THE SECRETARY

WITNESSES

HON. ROBERT C. WEAVER, SECRETARY

ROBERT C. WOOD, UNDER SECRETARY

PHILIP N. BROWNSTEIN, ASSISTANT SECRETARY FOR MORTGAGE CREDIT AND FEDERAL HOUSING COMMISSIONER

RAYMOND H. LAPIN, PRESIDENT OF FEDERAL NATIONAL MORTGAGE ASSOCIATION

DON HUMMEL, ASSISTANT SECRETARY FOR RENEWAL AND

HOUSING ASSISTANCE

CHARLES M. HAAR, ASSISTANT SECRETARY FOR METROPOLITAN DEVELOPMENT

H. RALPH TAYLOR, ASSISTANT SECRETARY FOR DEMONSTRATIONS AND INTERGOVERNMENTAL RELATIONS

DWIGHT A. INK, ASSISTANT SECRETARY FOR ADMINISTRATION THOMAS C. McGRATH, JR., GENERAL COUNSEL

ASHLEY A. FOARD, DEPUTY GENERAL COUNSEL

WILLIAM B. ROSS, DEPUTY UNDER SECRETARY FOR POLICY ANALYSIS AND PROGRAM EVALUATION

THOMAS F. ROGERS, DIRECTOR, OFFICE OF URBAN TECHNOLOGY AND RESEARCH

L. EDWARD LASHMAN, ASSISTANT TO THE SECRETARY FOR CONGRESSIONAL SERVICES

JOHN M. FRANTZ, DEPARTMENTAL BUDGET OFFICER

NATHANIEL J. EISEMAN, DEPUTY DEPARTMENTAL BUDGET OFFICER

Mr. EVINS. The committee will come to order.

We have with us this morning our friends of the Department of Housing and Urban Development, headed by Dr. Robert C. Weaver and his Under Secretary, Dr. Robert C. Wood.

We also have Mr. Philip Brownstein, Assistant Secretary for Mortgage Credit, and Federal Housing Commissioner, an able Assistant Secretary; Mr. Raymond H. Lapin, President of the Federal National Mortgage Association. He is the biggest banker in the country. Mr. Don Hummel, former mayor, Assistant Secretary for Renewal and Housing Assistance; Mr. Charles M. Haar, Assistant Secretary for Metropolitan Development; Mr. H. Ralph Taylor, Assistant Secretary for Demonstrations and Intergovernmental Relations, the popular model cities program; Mr. Dwight A. Ink, Assistant Secretary for Ad

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ministration; Mr. Thomas C. McGrath, Jr., General Counsel, a former colleague. He ought to advise you well. Mr. Ashley A. Foard is Deputy General Counsel; Mr. William B. Ross, Deputy Under Secretary for Policy Analysis and Program Evaluation; Mr. Thomas F. Rogers, Director of the Office of Urban Technology and Research; Col. L. Edward Lashman, Assistant to the Secretary for Congressional Services. We see him around occasionally, a good man; Mr. John M. Frantz, departmental budget officer. He has all the figures. Mr. Nathaniel J. Eiseman, deputy departmental budget officer.

This is a very distinguished group of administrators, Mr. Secretary. Your budget is well prepared. We have looked it over and we commend those who prepared it. We always listen to you with interest and profit.

You may proceed as you wish. We would be glad to hear you at this time.

GENERAL STATEMENT

Secretary WEAVER. Thank you.

Mr. Chairman and members of the committee, I appreciate your courtesy in affording me the opportunity once more to make some introductory observations as these hearings begin, and to join with my associates and you in a general discussion of our basic plans and problems before you take up your detailed examination of our budget estimates for fiscal year 1969.

I believe the committee is acquainted with all the gentlemen who are with me this morning, except that some of you may not yet have met Mr. Raymond Lapin, the relatively new president of the Federal National Mortgage Association, and Mr. Thomas Rogers, who has joined the Department since our hearings last year as the Director of our very important Office of Urban Technology and Research.

Mr. Chairman, the presentation today of our requests for appropriations and authorizations for next year constitutes the second half of the Department's major effort for which we seek the support of this Congress. I speak of it as "second" only because of the sequence of events. Last week I completed our presentation to the Committee on Banking and Currency of a broad set of legislative proposals, embodied in the proposed Housing and Urban Development Act of 1968. The budget requests before this committee are an equally important part-indeed, an inseparable part-of the President's total approach to meeting the most urgent housing and urban development needs of the Nation in a feasible way and in the foreseeable future. The two sets of legislative proposals are interlocked in many ways: Including the fact that, under our legislative procedures, a number of the budget proposals will not be ready for appropriation action by your committee until Congress has acted further on the underlying authorizations. Therefore, both in order to understand the whole picture and because of purely practical considerations, it is important to view the legislative and appropriations measures proposed by the Department

as a whole.

I think most people would feel that the major new thrust in the Department's plans for next year and those immediately following is embodied in the President's 10-year housing goal, as spelled out in his recent message and in our appearances before the legislative committees. In presenting this phase of our plans, I pointed out that it represents a total new effort aimed primarily at achieving a single, specific

and unified national goal-the building and rebuilding in 10 years of enough good housing to permit the replacement of substantially all substandard dwellings. No such program can be achieved solely by financial help to families. It will require construction labor-which means jobs managerial skills, mortgage funds, developed sites, private initiative, and public vision on new scales of magnitude. Such a broad program must encompass

New means of encouraging home ownership and the provision of rental and cooperative housing for low and moderate income families.

Assistance to nonprofit sponsors.

Stimulation of limited-dividend sponsorship and development through national housing partnerships.

Expanded access to mortgage funds.

Encouraging the provision of well-planned new communities which include sites for housing low- and moderate-income families.

Extending the programs of assistance for supporting community facilities and services.

Improving the effectiveness of housing rehabilitation.

Stimulating the provisions of low- and moderate-income housing, including sites, through expediting and expanding the urban renewal process.

Assisting the preservation of older neighborhoods.

I would stress to this committee, Mr. Chairman, that there is not one of these elements of this comprehensive approach which is not significantly dependent on actions which you will take in the appropriation measure which you are now considering.

The same is true of the other major areas in which our plans and energies will be concentrated in the coming year: in urban renewal, in model cities, in aids to comprehensive area-wide planning and development, and in our efforts to improve both our understanding and our capabilities through a comprehensive research and development program and through support of State and local programs of training, information, and technical assistance.

A number of important legislative proposals, of course, are entirely new, and I will not extend this statement to describe them here. Let me say, however, that knowing, as I do, the great interest of members of this committee in housing and urban development legislation, I shall be glad to answer any questions you may wish to raise during this general session about our legislative program, even though parts of it will not be before you for action until a later stage in the legislative

process.

Before turning to the specific proposals before you, Mr. Chairman, I would like to summarize certain broad purposes or approaches which we have tried to build into this budget, and which I hope the committee will bear in mind as it works upon the estimates:

The budget looks toward continued and increased emphasis on providing housing for low and moderate income people. Thus it recognizes that the unparalleled success of our private economy in providing not only adequate shelter but the materials of relative luxury for an affluent society becomes progressively attenuated as one moves down the income scale through middle to moderate incomes-terms which themselves have no exact or accepted definitions-ending in the grim con

ditions under which far too many of our urban poor still live. Where once the Federal Government was assumed by many to have no role at all, it is now rather generally accepted doctrine that it has a responsibility which grows greater in rough proportion to the obstacles which confront the private economy in solving problems through its normal mechanisms, and which is therefore greatest in connection with housing people of low and moderate income, where the productive mechanisms of the unaided private market have been least effective. This emphasis can be seen in the proposals for substantial increases in the production of low-rent public hosuing; in the proposal for a major increase in housing aided through the rent supplement program; in the direction and magnitude of efforts in the urban renewal programs; and in the definitions of goals emerging in the model cities program. The budget seeks to maintain and enlarge the increasing role of private enterprise in the solution of problems of housing and urban development. The Department has never entertained or sponsored the illusion that the immense and immensely complicated problems of our cities can be met by Government alone, or even by programs and activities which are predominantly governmental. It has sought instead to foster the concept of a multilateral partnership involving governmental awareness and responsiveness at all levels-Federal, State and local-combined with the fullest possible enlistment of the financial, productive and managerial skills of the private economy. This necessarily recognizes an appropriate role for legitimate profits, which are the major propellant of the private enterprise system. At the same time, it leaves ample scope for private contribution through an infinite variety of limited profit or nonprofit forms of organization, association, and individual activity. This concept underlies the budget proposals for greatly increased reliance on private enterprise in housing lowincome people: through the rent supplement program, the turnkey approaches in public housing, and through a variety of legislative proposals foreshadowed though not detailed in the President's budget. It is reflected as well in the increased reliance on the private market for funds necessary to support the levels of investment required for all these activities: through measures to make the interest rates on Government supported mortgages viable in the market, to substitute private for public credit through a continued program of participation sales, and to make possible the transfer of the secondary market functions of FNMA from public to private ownership and management.

The budget seeks to maintain and to advance the concept of a coordinated and orderly approach to the problems of urban areas as a whole. It is easy to say that these problems cannot effectively be attacked piecemeal, and that a coordinated approach and an overall concept are essential; in our complex and multijurisdictional society with its many overlapping and conflicting motives and interests, it is much more difficult to find practical ways to bring this about. The programs presented in this budget are designed to contribute to this end: through a strengthened program of urban planning assistance; the introduction of area wide development grants; the selective use of grants for water and sewer and for open space; the coordinated planning and execution requirements of the model cities program; and through a number of related efforts to improve the quantity, the quality and the availability of information to those who must make the plans and the decisions.

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