The Federal assistance which provides local leaders and governments with incentives and the tools for revitalizing their communities has proven its worth

in eliminating housing blight;

in contributing to restoration of the economic base of our communities; and

in helping reshape our central areas into effective nerve centers for our cities.

The Housing Act of 1961 doubled the previous urban renewal authorization to a total of $4 billion. By the middle of this year, all of that increase will have been committed. I recommend that an additional $1.4 billion of urban renewal funds be approved for a 2-year period Despite existing programs assisting families and persons displaced by urban renewal projects, the human cost of relocation remains a serious and difficult problem.

The vast majority of those displaced by urban renewal and public housing have relocated in better and standard housing, but some have not. For most, the cost of improved housing has been an unsought burden. For some, the inconvenience of displacement has meant only another slum dwelling and the likelihood of repeating this experience.

To assist further those families and persons least able to bear the burden of displacement, I recommend —

A. that an additional annual subsidy of up to $120 per unit be available for local public housing authorities, where needed to provide access to such housing for displacees with extremely low incomes.

B. that low- and moderate-income families displaced by urban renewal receive 2-year supplemental relocation payments equal to the difference between rentals on standard housing in their communities and 20 percent of their gross incomes.

C. that low-income single persons displaced by urban renewal or other public action be made eligible for public housing.

Similarly, small businessmen- especially those in leased premises - often incur economic loss and hardship as a result of displacement by urban renewal or public housing which is not offset by current compensation practices and moving expense reimbursements. To provide more adequately for these firms, I recommend authority for a separation payment of up to $2,500 for small establishments.

At this time of the 1960 census, 7 million nonfarm dwellings were found to be deteriorating, including 21⁄2 million occupied by their owners. Rehabilitation and preservation of existing housing wherever possible is a key element in the urban renewal process today. Elderly homeowners in urban renewal areas with low, fixed incomes are at a particular disadvantage in trying to meet the increased housing payments required by rehabilitation. To assist them, I recommend a program of Federal insurance and purchase of low-interest loans, with a deferral of amortization of principal, for home rehabilitation by elderly homeowners in urban renewal programs.

III. COMMUNITY DEVELOPMENT

The great expansion of our urban areas over the last two decades has too frequently been carried out in a sprawling, space-consuming, unplanned, and uneconomic way. All levels of government are spending vast sums to accommodate this tremendous urban growth

with highways, sewer and water facilities, schools, hospitals, and other community facilities. Rural communities and small towns face similar pressures. If the taxpayer's dollar is to be wisely used and our communities are to be desirable places in which to live, we must assure ourselves that future growth takes place in a more orderly fashion.

I recommend that the urban planning assistance program and the open space program administered by the Housing and Home Finance Agency be extended.

Although the planning requirements of these and various other Federal programs such as the Federal-aid highway program-also emphasize orderly growth and development, much more can and should be done.

The pioneering efforts of progressive and imaginative private developers in planning totally new and complete communities indicate some of the exciting possibilities for orderly growth. In the tradition of the long-established partnership between private industry and Government in housing and community development, the Federal Government should encourage and facilitate these new and desirable approaches.

Such a partnership can help achieve the orderly accommodation of a significant part of our forthcoming urban growth by means of entirely new communities, complete with all public services, all the industry and commerce needed to provide jobs, and sufficient housing and cultural and recreational facilities for moderate- and low-income families as well as for the well-to-do. To realize such new community development, and to encourage the participation of private initiative on the greatest possible scale, I propose a program of grants and loans to States and local governments for the planning and provision of necessary public facilities and of loan insurance for private developers constructing such facilities.

Many existing communities face problems of expansion as well. Even though they may foresee enormous development ahead, they often lack the resources to build sewer and water systems and other facilities with adequate growth capacity. Building in such capacity in advance could result in tremendous savings and prevent costly duplication or premature replacement of inadequate facilities, I, therefore, recommend a program of public facility loans with deferred amortization to enable communities to plan and build ahead of growth.

Early acquisition of land for right-of-way and other public improvements is frequently sound public business. Many communities which are prepared to exercise foresight in acquiring land-and to save private owners from uncertainty and hardship-lack the financial capacity to do so. Such advance acquisition, which would assure location of such facilities in accordance with planned development, could also result in substantial savings, inasmuch as the increases in land prices that occur as development proceeds would be avoided. I, therefore, recommend that public facility loans, with deferral of amortization as required, be made available for advance land purchase or option by States and local governmental jurisdictions.

To encourage better planned new development on a neighborhood scale, and to preserve and increase the supply of improved land for homebuilding, I recommend Federal insurance of loans to private developers for acquisition and improvement of land for planned subdivisions.

It is essential that all of these programs be based on the existence of effective planning arrangements in the community or region. For planned subdivisions, there should be, in addition, assurance that the neighborhood itself is carefully conceived to maintain its residential integrity and will result in efficient land use.

In our great metropolitan areas, and in our rural communities as well, the difficult problems of growth and development require understanding and cooperation at all governmental levels. The Federal Government can assist and encourage, but, in the last analysis, the success or failure of programs of community development depends on those most directly involved.

IV. URBAN MASS TRANSPORTATION

Efficient transportation systems are essential to our urban communities. Each local system should be tailored to its particular needs-existing and prospective and the proper mixture of good highways and mass transit facilities should be developed to permit safe, efficient movement of people and goods in our metropolitan

centers.

A matching grant mass transit program along the lines proposed by the administration was approved by the Senate last year (S. 6) and reported favorably to the House by its Committee on Banking and Currency (H.R. 3881). I urge early enactment of the mass transit program as lasic to the development and redevelopment of our Nation's

cities.

V. TRAINING NEEDS

The sound administration of local governments and the success of our federally supported programs of community development depend heavily on the competence of State and local public service staffson their ability, their imagination, and, especially, their training. Throughout the range of local functions-from traffic control to tax administration, from recreation to renewal-their efforts will influence greatly the quality of community living.

The substantial Federal investment in local community efforts. justifies a deep Federal interest in the quality of local government employees and the expenditure of funds to help attract able people to local public service and help them develop the skills and perspective they need.

To this end, I recommend a program of up to $25 million a year in matching grants to States for the establishment of urban public service training and research programs.

VI. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

If we are to deal successfully with the complex problems of our urban and suburban communities, we need governmental machinery designed for the 1960's, not the 1940's. The Housing and Home Finance Agency, established 17 years ago primarily to administer housing programs, has seen its responsibilities enlarged progressively by the Congress during the intervening years to include the broader aspects of community development as well. The Agency now administers such major community development programs as urban renewal, urban planning, public facilities planning and loans, open

space, and mass transit. These basic changes in the Agency's role and mission are not adequately reflected in the Agency's current organization and status which remain much the same as they were in 1947. Action to convert the Housing and Home Finance Agency into an executive department is long overdue.

The size and breadth of the Federal programs now administered by the Housing and Home Finance Agency and the significance of those programs clearly merit departmental status. A new Secretary of Housing and Community Development would be in a position both to present effectively the Nation's housing and community development needs in the highest councils of government and to direct, organize, and manage more efficiently the important and closely interrelated housing and community development programs now administered or proposed for the Housing and Home Finance Agency. I recommend that the Congress establish a Department of Housing and Community Development.

CONCLUSION

The dramatic increase in our Nation's population projected for the coming decades-over 300 million by the year 2000-and the increasing concentration of our population around urban centers will create increased housing needs and intensified problems of community development which must be anticipated and acted upon immediately. How we respond to these challenges will have a lasting impact on the character of our cities and rural communities. Whether we achieve our goal of a decent home in a decent neighborhood for every American family rests, in large measure, on the actions we take now. The substantive programs I have proposed in this special message will speed our solutions to today's problems and the predictable needs of tomorrow. I earnestly urge the Congress to give the attached draft bills the attention they merit.

THE WHITE HOUSE, January 27, 1964.

LYNDON B. JOHNSON.

A BILL To establish a Department of Housing and Community Development and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the Department of Housing and Community Development Act.

DECLARATION OF PURPOSE

SEC. 2. The Congress hereby declares that the general welfare and security of the Nation and the health and living standards of our people require, as a matter of national purpose, sound development of the Nation's communities in which the vast majority of its people live and work.

To carry out such purpose, and in recognition of the increasing importance of urban communities in our national life, the Congress finds that establishment of an executive department is desirable to achieve the best administration of the principal programs of the Federal Government which provide assistance for housing and for the development of the Nation's communities; to assist the President in achieving maximum coordination of the various Federal activities which have a major effect upon urban, suburban, or metropolitan community development; to encourage the solution of problems of housing and of community development through State, county, town, village, or other local and private action, including promotion of interstate, regional, and metropolitan cooperation; and to provide for full and appropriate consideration, at the national level, of the

needs and interests of the Nation's communities and of the people who live and work in them.

ESTABLISHMENT OF DEPARTMENT

SEC. 3. (a) There is hereby established at the seat of government an executive department to be known as the Department of Housing and Community Development (hereinafter referred to as the "Department'). There shall be at the head of the Department a Secretary of Housing and Community Development (hereinafter referred to as the "Secretary"), who shall be appointed by the President by and with the advice and consent of the Senate. The Department shall be administered under the supervision and direction of the Secretary. The Secretary shall receive compensation at the rate now or hereafter prescribed by law for the heads of executive departments.

(b) The Secretary shall, among his responsibilities, advise the President with respect to Federal programs and activities relating to housing and community development; develop and recommend to the President policies for fostering the orderly growth and development of the Nation's communities; exercise leadership at the direction of the President in coordinating Federal activities affecting community development; provide technical assistance and information including a clearinghouse service to State, county, town, village, or other local governments in developing solutions to community development problems; encourage comprehensive planning by the State and local governments with a view to coordinating Federal, State, and community development activities at the local level; and conduct continuing comprehensive studies, and make available findings, with respect to the problems of housing and community development.

(c) Nothing in this Act shall be construed to deny or limit the benefits of any program, function, or activity assigned to the Department by this or any other Act to any community on the basis of its population or corporate status, except as may be expressly provided by law.

UNDER SECRETARY AND OTHER OFFICERS

SEC. 4. (a) There shall be in the Department an Under Secretary, three Assistant Secretaries, and a General Counsel, who shall be appointed by the President by and with the advice and consent of the Senate, who shall receive compensation at the rate now or hereafter provided by law for under secretaries, assistant secretaries, and general counsels, respectively, of executive departments, and who shall perform such functions, powers, and duties as the Secretary shall prescribe from time to time.

(b) There shall be in the Department an Administrative Assistant Secretary, who shall be appointed, with approval of the President, by the Secretary under the classified civil service, who shall perform such functions, powers, and duties as the Secretary shall prescribe from time to time, and whose annual rate of compensation shall be the same as that now or hereafter provided by or pursuant to law for administrative assistant secretaries of executive departments.

TRANSFERS TO DEPARTMENT

SEC. 5. (a) Except as otherwise provided in subsection (b) of this section, there are hereby transferred to and vested in the Secretary all of the functions, powers, and duties of the Housing and Home Finance Agency, of the Federal Housing Administration and the Public Housing Administration in that Agency, and of the heads and other officers and offices of said agencies.

(b) The Federal National Mortgage Association, together with its functions, powers, and duties, is hereby transferred to the Department. The next to the last sentence of section 308 of the Federal National Mortgage Association Charter Act and the item numbered (39) of section 106(a) of the Federal Executive Pay Act of 1956 are hereby repealed, and the position of the President of said Association is hereby allocated among the positions referred to in the proviso of section 7(e) hereof.

CONFORMING AMENDMENTS

SEC. 6. (a) Section 19(d)(1) of title 3 of the United States Code is hereby amended by striking out the period at the end thereof and inserting a comma and the following: "Secretary of Health, Education, and Welfare, Secretary of Housing and Community Development."

H. Doc. 206, 88-2- -2