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we know nursing homes to be. Nor do we need old folks' homes as we have known them. We need an entirely new type of facility. It may be a village of old folks, such as I have read has been established in Arizona. It may be just homes clustered around a medical facility that is set up to care for older people. Frankly, I am not certain just what kind of facilities we should be talking about.

And so we come closer to the question at hand. How do we go about providing the type of facilities that will most adequately fit the problem of our aged citizens? Do we do it by establishing a commission to study the matter, or a congressional committee? All this may help, but I suggest that there is a more direct way, a quicker way, a more satisfactory way-indeed, a way which is being followed to some extent in the natural course of events, whether the Government is aware of it or not.

The way is the private enterprise system. What Government should be doing is encouraging what is already coming about.

So many people misunderstand the private enterprise system. To me it is essentially a trail-and-error system, a system which permits individual citizens or groups of citizens to follow out their ideas of how to sell to or service certain social needs. The best way I know to provide adequate facilities to the older people is to allow various people to go ahead and provide what they think the older people would like at the price they can best afford to pay.

Ninety-seven percent of the nursing homes for the aged today are private institutions. These institutions are under State regulations, and the regulations are improving as experience with the operation of nursing homes grows. All that is needed now is to give some encouragement to private enterprise to move more effectively into the area of administering to the needs of our aged people. The Federal Government is in a very logical position to do just this through the FHA program.

I am familiar with the testimony of George T. Mustin, the head of the American Nursing Home Association, before your committee on May 14, 1958. I want to endorse what he has said wholeheartedly.

I believe that in this area the most can be done for the money to assist our older people, and this can be done right now. The plans, thousands of them, are in existence; all they need is financial implementation. Why we have not extended the FHA program to include private nursing homes before now is hard for me to understand. These are not fly-by-night operations. They all must qualify under State standards. Indeed, the Federal Government through the use of FHA funds can encourage the growth of the State-approved "Nestorian" facilities-I am coining a new term; Nestor was the respected older citizen in Homer's "Iliad"-and give impetus to the growth of qualified private facilities for our older citizens.

I urge this committee to give consideration to amending S. 3497, an act to expand the public facility loan program of the Community Facilities Administration of the Housing and Home Finance Agency or whatever proposed legislation would be most appropriate to include proprietary Nestorian facilities that meet adequate State standards.

Thank you, Mr. Chairman.

Senator SPARKMAN. Thank you, Congressman Curtis. You have given us a very thoughtful presentation. However, having the privilege of serving with you on the Joint Economic Committee, I know that is characteristic of you.

Mr. CURTIS. You are very kind.

Senator SPARKMAN. I am glad you make reference to the testimony of Mr. Mustin before this committee, and I may say that I personally am greatly interested in the program that he suggests and that you

endorse.

In fact, I think our whole committee has demonstrated in the past its interest in this question.

I wonder if you are familiar with the study that our committee made about 3 or 4 years ago on the question of aid for the elderly in the field of housing?

Mr. CURTIS. Yes; I am, and I certainly want to commend the committee for that study. I think that has given rise to a lot of the new thinking that is coming about.

I might say this, and I should have made it clearer in my prepared text: I am really talking about a minimum when I talk about the encouragement of the private institutions. Already encouragement has been given through the other sector. It seems to me, though, that is the minimum that we ought to be doing, and that is something we certainly could be doing immediately while we might be arguing out some of these other programs that the Federal Government might get into which are a little more controversial.

In this area, though, I do not believe there would be much controversy at all.

Senator SPARKMAN. Help has been extended in various ways to the publicly supported nursing homes.

Mr. CURTIS. That is right.

Senator SPARK MAN. And to charitable or nonprofit institutions. Mr. CURTIS. That is right.

Senator SPARKMAN. You bring out the point, as did Mr. Mustin, that the overwhelming majority of these homes that care primarily for old people are private institutions.

Mr. CURTIS. The interesting thing, Mr. Chairman, and Mr. Mustin made this point, too, is the reluctance of our private lending institutions to finance these projects because they are new. And they are almost what you might call a one-purpose type of loan. In other words, the buildings and so on probably would have to be used for the purpose for which they were built. There is a reluctance on the private financial institution's part to lend money in these areas.

So it is, again, an area where I think the Federal Government could do some pioneering to demonstrate that this is an area where you can make a safe, adequate loan.

Actually, it has been lack of funds that has prevented the private enterprise from going ahead and really taking care of this job.

I do not think it is going to cover the whole thing. We are always going to have our indigent. But it is certainly true it could cut the cost to older people considerably if we went ahead with the proper facilities, avoiding the great expense that now most older people are confronted with of either going to a hospital or just not being cared for when they really do not need full hospitalization.

Senator SPARK MAN. You suggest as one possible vehicle S. 3497.

Mr. CURTIS. Yes.

Senator SPARKMAN. You realize that has already passed the Senate? Mr. CURTIS. Yes, I realize that.

Senator SPARK MAN. We have lost control of that. Furthermore, I doubt that that would be a proper vehicle. My own feeling is that we might very well incorporate it as part of this housing program that we are studying now.

The question in my mind is whether it should be under the direct loan program or whether it should be under the FHA insurance program, and, if so, just how we would work it in for the FHA insurance.

Mr. CURTIS. I think again Mr. Mustin pointed out a very good thing. He is suggesting that it certainly not be one of these 100 percent lending propositions.

Senator SPARKMAN. In fact, he suggested 75/25.

Mr. CURTIS. I think that is very good, because we do not want to get into this business of caring for our aged people by fly-by-night operators.

Certainly it seems that there are plenty of people who are willing to put their money on the line if they could get what should be the normal financial backing that other types of enterprise could receive. But because it is new, private lending institutions are reluctant to go ahead.

The Government can well, in my judgment, pioneer in this area and demonstrate to the private lending institutions that these are good, solid, financial risks and something that can be carried forward.

There is one other point I would like to make and I would commend the American Medical Association for taking the affirmative position they have recently taken in gathering together these various organizations who are concerned in this area and affirmatively proposing ideas of how to meet the problems of the aged. I believe the American Medical Association approves of this approach in this limited

area.

Senator SPARKMAN. I believe that is true. As a matter of fact, when the committee interested in this first came to see me, a couple of members of the committee were connected with the American Medical Association and indicated to me that the Medical Association would approve this kind of a program.

Mr. CURTIS. They have apparently been holding meetings and decided that they wanted to get some affirmative proposals. To me it was very gratifying to see that they have done that.

In other words, they are suggesting ways of meeting the problem of our aged, and this is certainly, I think, the most important area that we could move ahead in. It would be the area that would help the older people most financially by having facilities that actually are tailored to meet their needs rather than, as I suggested, taking facilities that we have in our society and trying to adjust them, which does not work, or trying to adjust the needs of our older people to meet the facilities we have.

Senator SPARKMAN. I appreciate your interest and I appreciate your statement.

Senator Clark?

Senator CLARK. Just this comment, Congressman. I was very much interested in your testimony. We have had a number of witnesses here who have been concerned about the lack of adequate rental

housing. We are giving great encouragement to building houses for purchase, but there is a great need for rental housing.

Mr. CURTIS. Yes.

Senator CLARK. It has been suggested that we ought to make rental housing for profit feasible and not just confine it to cooperative rental housing.

Really, your proposition is to encourage individuals and corporations to provide rental housing at a profit for a special group, the elderly, who are physically handicapped to such an extent that they need the facilities of nursing homes. That is about what it comes down to, is it not?

Mr. CURTIS. That is right. Yes. I think that is a fair analysis of it.

Senator CLARK. I would think, Mr. Chairman, that if we are going to encourage rental housing for other fields this would be a good place to start.

Mr. CURTIS. Yes, I think it certainly would. I think it is in this area that we all agree the greatest need exists.

I again say that it is a minimum, because that much we could do, and then, obviously, there are going to be areas that would not meet the full need because we have the problem of indigency, and where we have that we are not going to solve it through this method. And then we can see how far we have to go in that area.

Senator SPARKMAN. Thank you very much. We appreciate your taking time to come over and be with us.

Mr. CURTIS. Thank you.

Senator SPARKMAN. Next is Mayor Richard C. Lee of New Haven, Conn., representing the American Municipal Association.

We have had you with us on other occasions, Mayor Lee, and it is always good to have you.

STATEMENT OF RICHARD C. LEE, MAYOR, ACCOMPANIED BY EDWARD J. LOGUE, DEVELOPMENT ADMINISTRATOR, NEW HAVEN, CONN., REPRESENTING THE AMERICAN MUNICIPAL ASSOCIATION

Mr. LEE. Mr. Chairman and members of the committee, I represent the American Municipal Association.

I would begin by submitting the AMA's urban renewal recommendations which were adopted at the 34th annual congress last December in San Francisco.

Senator SPARKMAN. Without objection, the recommendations will be included in the record.

(The recommendations referred to follow :)

URBAN RENEWAL RECOMMENDATIONS

25-1. The President is urged to appoint a new advisory committee with full representation of mayors and other municipal representatives to study and recommend a national, workable program designed to eliminate slums and blight throughout America through Federal and local cooperation. (1957)

25-2. Increased Federal aid should be made available to municipalities for slum clearance and urban renewal. (1954)

25-3. We urge that the United States Congress enact legislation amending the existing urban renewal law by increasing the Federal aid from two-thirds to four-fifths of the net project cost. (1956)

We recommend that the Congress amend the Housing Act of 1949 (as amended) as follows:

25-4. Recognize the long-term needs of urban renewal and authorize a 10year program with an annual authorization of additional capital grant reservation funds of $500 million a year. (1957)

25-5. Recognize the need for a broadened approach to permit a greater share of the Federal program's resources to be devoted to redevelopment for commercial and industrial purposes. (1957)

25-6. Permit acquisition of project land at an earlier stage in the project activity than is now possible. (1957)

25-7. Authorize the Urban Renewal Administration to accept certifications of the local public agency as to local action taken in meeting the requirements of the Federal law. (1957)

25-8. We urge that the United States Congress enact legislation amending the existing urban renewal law to allow capital improvements to become eligible for prior approval as local noncash grants-in-aid. (1956)

25-9. The Congress and the administration are both urged to take all possible steps to effectuate more expeditious and efficient processing on the part of the Federal Housing Administration of applications under section 220 for mortgage insurance on new residual construction in urban renewal project areas.

(1957)

15-10. The American Municipal Association urges the Housing and Home Finance Agency to investigate the possibility of greater delegations to the field offices by the various agencies of the Housing and Home Finance Agency to the end that the work of these agencies and municipalities can be accomplished more expeditiously and economically. (1955)

25-11. We recommend that all possible steps be taken to obtain maximum coordination in the planning and execution of urban renewal and arterial highway projects thus permitting enormous economies in highway right-of-way cost through property acquisition and utility relocation by local public urban renewal agencies and the minimization of potential blighting effects of limited access highways by application of redevelopment programs in areas adjacent to such thoroughfares. We recommend immediate and effective action by the United States Bureau of Public roads, the Urban Renewal Administration, and by State and local highway and urban renewal agencies to develop legislation for presentation to the Congress and administrative procedures to accomplish such coordination. (1956)

Mr. LEE. For the first time in the history of our organization, urban renewal was designated as the No. 1 priority in our legislative program. It is a recognition, I believe, of the growing dimensions of the problems which are confronting our cities and the importance of urban renewal as a means of combatting it.

I have been here 3 times before you gentlemen. When I was here in 1956 and 1957, in those days the economy was booming, and the country was in a confident mood about the state of the Nation and our position in the world. Things, to put it mildly, are vastly different today. We are beset by a serious recession and a substantial lack of agreement on what to do about it.

I would like to say that I feel the committee's action in originating the Emergency Housing Act of 1958 is the single most effective step taken to date in combatting this recession. It has had a small but direct impact on the volume of housing sales and housing starts in the New Haven area.

My general subject today is cities-the shape they are in, what the future seems to hold for them, and specifically what the American people should be doing about them through their elected representatives in city hall, in the State Capitol, and in the White House.

I would like to begin by presenting a series of questions which I intend to answer in as brief a fashion as possible.

The first question, of course, is: Are spreading slums and blight a serious national problem?

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