Renewal starts with a city planning commission adjudication that an area is "blighted." The commission prepares a general area plan and the revelopment authority sets up specific projects in conformance with the city comprehensive plan, including procedures for rehousing displaced persons.

The authority's plans, in turn, are approved by the planning commission and city council. The Federal Government reviews every step, from planning to acquisition and reuse prices, including the contract with the builder.

Redevelopers are selected both by direct negotiation and by bid. The public has its say at hearings before city council and the authority, after the planning commission has set out the basic plan.

SO

In rehabilitation areas, the authority is instrumental in drafting "codes of standards" for dwellings substantially stiffer than the city housing code and persuading homeowners to conform to them. It buys and removes called blighting influences in these neighborhoods. The Federal Government insures some of the rehabilitation loans on homes.

The authority also carries out projects without Federal involvement, such as the industrial program in which it acts as a "middle man" in disposing of cityowned land to private developers.

The five members of the authority are appointed by mayor and serve without pay. The day-to-day operations are conducted by a staff under an executive director; the staff work is approved by the authority at monthly meetings.

[From the Philadelphia Inquirer, Nov. 9, 1964]

REDEVELOPMENT: A PROGRESS REPORT-COLD, HARD FACTS DISPUTE FLOWERY RENEWAL CLAIMS

(Second of six articles by Joseph C. Goulden of the Inquirer staff)

In its multicolor 1963 annual report, a heavy-stock production that would make General Motors envious, the redevelopment authority boasts of its programs as a "tonic to the ailing heart of Philadelphia.'

"Feverish activity" and "rush of building" are a couple of the promoter-hued phrases through which the authority claimed that urban renewal's "beneficial effects were felt on the city's tax receipts."

Through this type of report, and this type of language, is the urban renewal story told to the citizenry and officialdom of Philadelphia.

Because of such claims, which largely go unexamined and unquestioned by the citizenry and officialdom, urban renewal gradually has become something of a municipal sacred cow, one whose every whim and wish is unquestioningly satisfied in the name of progress.

COLD FACTS CITED

But few of those officials-much less the individual citizens-got a chance to see another document which is barren of adjectives but brimful of cold, hard facts about urban renewal.

"Technical report No. 6," dated December 1962, was written by staff members of the community renewal committee of the city planning commission. It is an objective working paper intended for intra-agency use in evaluating the urban renewal program and the redevelopment authority.

So far as could be determined, the report never has been circulated publicly. But the Inquirer managed to obtain a copy of the 106-page document.

Hidden in the report's column of figures and page after page of dry, bureaucratic language are some bombshells. And they bring into question two of the redevelopment authority's most basic reasons for existence:

Claim: That urban renewal, by upgrading properties, produces enough additional tax revenue to make itself a paying proposition.

Fact: By 1968, when programs costing in excess of $300 million are completed (the authority hopes), extra valuations will add tax revenues of around $600,000 annually. In other words, about 50 years of tax revenues will be needed to repay urban renewal's basic public cost-not even considering in-progress programs not counted in the $300 million.

Claim (as quoted on p. 54 of the report): "It is frequently hypothesized that urban renewal programs will generate large amounts of private expenditure on new development within the project area and in adjacent areas."

Fact (continuing the same quote): "With the data available, it is not possible to test this theory completely. Although it is suspected that renewal activity in center city has spurred other new development to a much greater extent than renewal acivity in other sections of the city, no adequate information exists to prove this."

In the 1963 annual report, Authority Chairman Gustave G. Amsterdam uses some figures that leave the impression urban renewal is, as of now, paying for itself.

He wrote, "In 1963, the renewal program resulted for the first time in a net gain to the city's assessment rolls.

"The increase was only $4 million, but in 1964 another $22 million will be added, and the new assessments will have balanced out all the blighted property removed from the lists by urban renewal since the beginning of the active program in 1951."

Amsterdam's statement is true-so far as it goes. But it doesn't begin to tell the entire story. It is in the category of a man who spend $4,000 fixing up a junk automobile and then brags he saves 2 cents a day through better gas mileage, without considering his investment.

As of 1963, urban renewal had stricken properties from Philadelphia tax rolls with a cumulative value of $25,595,000 less than those added. The yearly totals range from a low of $115,000 in 1950 to $13,249,000 in 1959.

$4,917,343 LOSS

Application of the city and school tax rate for each of the years (1950-63) shows an accumulative tax loss of $4,917,343.

The "net gain" of $4 million cited by Amsterdam for 1963 translates to a tax yield of $160,000, based on the city rate of $2.20 a $100 of valuation and the school rate of $1.80 a $100. This makes an imperceptible dent in the previous tax deficit of nearly $5 million.

The technical report estimates that by 1968 urban renewal will have removed properties valued at $155,474,000 from city rolls and added others worth $169,090,000, for a cumulative gain in assessments of $15,116,000.

Applying the $2.20/$1.80 a $100 tax rate gives an additional yield directly attributable to urban renewal of $604,640 annually.

The Redevelopment Authority says it is counting on center city valuation increases to offset losses in other areas where tax-exempt public housing and other institutions replace privately owned properties.

GAIN EXPECTED

The technical report anticipated a center city gain-excepting Washington Square, for which no overall figures were available of $36.6 million (or $1,560,000 annually in taxes).

The public expenditures in those projects were estimated at $43.6 million— enough to eat up the new tax revenue for more than 30 years, without allocating a dime to offset tax losses in the other areas.

Figures on Washington Square East, unit 1, illustrate how even the most intensive of urban renewal projects can go years in red-ink status, from a tax viewpoint.

The project covers 43.4 acres of Society Hill and contains the 3 30-story Society Towers, now completed, and is the site of a paritally finished townhouse complex.

The Redevelopment Authority spent $20,789,415 buying and clearing the land and preparing it for the developer. Alcoa Residences, Inc. Resale proceeds were $8,254,700, or 39.5 percent of the cost.

PUBLIC PAYS

The difference, $12,535,415, came from public funds in a form of a "writedown." In planners' terminology, "writedown" is the public expenditure— not a subsidy, mind you-which enables a developer to handle a tract he couldn't assemble by himself on the private market.

After

Prior to renewal, the 43.4 acres had an assessed value of $7,563,000. Alcoa Residences, Inc., finishes its project, the assessed value is estimated to be $23,919,000, a net gain of $16,356,000 (216 percent).

The annual tax gain will be 654,240-which in 19.1 years will equal the public investment of $12,535,415. (This investment does not include a cumulative tax loss of $709,076 on the properties since they were condemned in 1959).

Prior to condemnation, the area had 343 residences; after development, the number (an estimate) will go to 1,764, for a net gain of 1,421.

$8,821 A UNIT

Each of these 1,421 dwelling units-high-rent/high-rise apartments and town houses-represents a public investment of $8,821.53, in the form of land cleared and sold to the developer at a cutrate.

The authority, actually, was fortunate in getting a return of 39.7 percent of its costs when it sold the land to Aloca Residences, Inc. This figure is considerably above the average.

Here are percentages on resale in other types of projects, according to the technical report:

Residential clearance 13.7 percent, residential conservation 11.2 percent, center city residential 35.1 percent, center city commercial 32.5 percent, industrial 20.8 percent, institutional 16.9 percent.

The difference between the resale percentage and cost, in each instance, is the part of the project cost borne by the taxpayer, city and State and Federal. Examining the "hypothesis" that public expenditures in urban renewal areas generate private investment, the technical report city these figures:

Morton: 26 cents private for each $1 public.

Independence Mall unit 1 (Rohn & Haas Co. Building): $7.50 private for each $1 public.

East Poplar: $1.12 private for each $1 public.

Washington Square East, unit 1: $1.11 private for each $1 public.

[From the Philadelphia Inquirer, Nov. 10, 1964]

REDEVELOPMENT: A PROGRESS REPORT: SLUMS MUSHROOM IN "JUNGLE," DEFY PLANS TO RAZE, REBUILD

(Third article of a series by Joseph C. Goulden of the Inquirer staff)

Planners live in a heady world of optimism not unlike that of a used-car salesman or Florida tourism promoter; "failure" is a word stricken early from professional vocabularies.

Yet no other term better describes what happened to the redevelopment authority when it tried to cleanse the Augean Stables that constitute the North Philadelphia slums east of North Broad Street.

The authority, briefly, cleaved the heart from the slums with the intention of reseeding the area with moderate-income housing.

Block after block was left as bleak and vacant as a Kansas prairie in the winter. The displaced families were shunted into housing possibly a thin cut above what they left.

A decade later, the bulk of the land is still vacant. responsible for building the new homes are plodding along.

Two private developers

STUBBORN JUNGLE

One, Abraham Singer Sons, Inc., has a handful of occupied homes in East Poplar-and a row of samples with broken windows.

The other, Denny Development Corp., has put together the semblance of a community in Southwest Temple-in a project that has been on the drawing boards, in one form or another, since the late 1940's.

With the North Philadelphia experience bitter gall in its throat, the redevelopment authority has abandoned, as a matter of policy, slum clearance on a massive scale.

What happened?

An authority executive said, "We had hoped to cut a clearing in the heart of the jungle and spread outwards.

"But the jungle grew back thicker and faster than we could clear it. end up with more jungle than clearing-and a tougher jungle."

So we

Map locates Eastwick and Southwest Temple development areas with photographs of projects

An official authority report phrased the same sentiment somewhat more formally.

"People living in substandard dwellings in other parts of the city did not rush to move into the new middle-income accommodations because of the neighboring slum conditions," the report said.

"And families displaced by demolition often moved to the fringe of the cleared area, further overcrowding the houses there.

"This resulted in more rapid deterioration and turned what was sometimes only 'bad' into 'totally bad' sections. Thus the consequence of starting in the worst slum areas was that the total cost of redevelopment in slums was increased." In cold retrospect, one could legitimately ask how the authority, on the basis of its own stated plans, ever hoped to solve housing problems with massive clearance.

Based on an intraoffice technical report acquired by the Inquirer, the authority listed 12,128 dwelling units in clearance areas when it started in 1951. Of these, 7,860 (65 percent) were substandard, and 9,160 (76 percent) were listed for demolition.

SLUM TO SLUM

After completion of the projects, the authority estimated the land would hold 8,289 dwelling units, a one-third decrease of approximately 3,800 units. There also would be 1,960 dormitory rooms for Drexel, Penn and Temple students.

The persons occupying these 9,160 dwelling units were displaced-more than 30,000 of them.

Where did they go? Where low-income people go, naturally to other low-income housing, mostly on the west side of North Broad Street, intensifying the city's most squalid slum.

The private housing in East Poplar and Southwest Temple is called inexpensive and it is, relative to what is being built on Society Hill.

But to the low-income persons it displaced, an $88 monthly house payment is so far out of reach as to be a barrier to any thoughts they might have of reentering their old neighborhood, other than in public housing.

EASTWICK HOPES

The authority says that it hopes to make overall gains through housing in Eastwick and Hartranft, both predominantly unbuilt before renewal.

"The total net gain in both projects is expected to be in excess of 5,000 dwelling units" said the intraagency report.

Before renewal, both categories clearance and Eastwick/Hartranft—had slightly more than 17,000 dwelling units only 8,000 of them standard, the report said.

After renewal, it hopes to have 18,800 dwelling units and 1,960 dormitory rooms, all standard.

The gain, of course is contingent upon success in Eastwick. And progress there is lagging even when compared to urban renewal's sluggish pace elsewhere. An Eastwick housing market study prepared for the authority in 1960 by Penn's Institute for Urban Studies estimated that in its first 3 years, Eastwick "should be able to market about 760 single family units a year without difficulty." Eastwick residential construction started in September 1961. Instead of 2,280 sales there have been around 300-and there is no evidence of an overnight boom.

SECOND THOUGHTS

The Philadelphia experiment-some skeptics call it the Philadelphia disasterplayed a large part in a realinement of the entire Federal renewal program. But first, some background. Urban renewal started under the Federal Housing Act of 1949, which had these aims:

Elimination of substandard and other inadequate housing through clearance of slums and blighted areas;

Stimulation of housing production and community development sufficient to remedy the housing shortage (the major part of the act, this provided for FHA loans);

Realization of a goal of a decent home and a suitable living environment for every American family.

After Philadelphia and other big cities found that renewal through slum clearance would consume an intolerable part of the Nation's wealth, Congress changed both the goals and the methods of achieving them in 1954 with an amended housing act.

Instead of slum clearance alone, urban renewal was expanded to include every part of the community. To participate, a town was required to draft a so-called workable program for renewal.

PHILADEPHIA PROGRAM

Philadelphia's workable program has these seven parts:

Revitalization of the central business district;

Conservation of older but still sound residential neighborhoods;

Slum clearance: pending this, maintenance of minimum housing standards and some neighborhood improvements;