opment. The municipalities have not been given adequate encouragement or incentive to launch the broader scale programs with their greater potential in improvement per dollar of Federal money expended. Administrative action to place the required accent on the broader scale requires, in our opinion, some specific expression of policy on the part of the Congress.

We therefore recommend for the committee's consideration an amendment to title I of the Housing Act of 1949 to require the establishment of a system of processing urban renewal applications that would give priority to those applications which propose urban renewal programs based predominantly on rehabilitation and conservation procedures.

By March 31 of this year the Federal Government has committed itself to more than a billion dollars in capital grants to cities for the purpose of carrying out urban renewal programs, and by the same date disbursements on executed projects approximated $113 million. Most of the funds committed are for total clearance undertakings-not only a tremendously costly process but an extremely slow-moving one. With this much total clearance work in the "pipelines," we submit that it would now be timely to establish a priority system giving an advantage now to those cities that propose to approach suitable problem areas with the determination to save and rehabilitate everything worth saving and to demolish only those structures that are unfit to rehabilitate or that will not mesh in an urban renewal plan.

SUMMARY OF RECOMMENDATIONS PROPOSED BY THE NATIONAL ASSOCIATION OF REAL ESTATE BOARDS, IN TESTIMONY BEFORE THE SENATE HOUSING SUBCOMMITTEE, MAY 20, 1958

I. Sales Housing

1. Approval of sections 101, 102, 106, 109, 201, 202, of the bill S. 3399.

2. Increase dollar limit under section 221 in normal cost areas to $10,000. 3. Amendments to the FNMA Charter Act (secondary market operations) providing for:

(a) Standby commitment on existing homes under same conditions as now accorded new construction.

(b) Appointment of FHA Commissioner and VA Administrator, or their designees, to FNMA Board of Directors.

(c) Appointment of one representative of the common-stock holders to the FNMA Board of Directors.

4. Approval of the basic elements of the plan for the coinsurance of conventional loans (S. 2791) with the following changes:

(a) Increase maximum loan to $30,000.

(b) Increase insurance to 90 percent of top 30 percent.

(c) Provide formula for participation of all lending institutions on equal basis.

II. Rental housing

1. Approval of sections 108, 109 of S. 3399.

2. Amendments to FHA rental housing provisions as follows:

(a) Amend section 227 of National Housing Act to require that mortgagor remit excess of mortgage over actual certified costs for reduction of mortgage instead of excess over the approved percentage of certified costs.

(b) Increase maximum interest rates on FHA multifamily programs to 6 percent with discretion of FHA to increase or decrease rate in accordance with market conditions.

(c) End rent controls on sections 608 and 207 projects with proviso that FHA Commissioner may reimpose controls on case basis where rents are excessive.

III. Urban renewal

1. Approval of sections 301, 302 and 303 of S. 3399.

2. Amendments to urban renewal provisions of the Housing Act of 1954 as follows:

(a) Condition Federal financial assistance for urban renewal on active enforcement by community of an adequate housing code.

(b) Give priority to those communities utilizing the rehabilitation phases of urban renewal as part of their urban renewal plans in the consideration of their applications for Federal financial assistance.

Project applications filed with FHA nationally, January 1947 through March 1958

1 of this total 40,486 were filed in first 6 months of 1954 (only 4,267 in last 6 months). Source: Federal Housing Administration.

Senator SPARKMAN. Mr. Williamson?

Mr. WILLIAMSON. No, I have no statement, Mr. Chairman. Senator SPARKMAN. Mr. Albert, I wanted to ask you just a question or two regarding the proposal that FNMA be permitted to make advance commitments on existing homes. You say at a price reasonably below the market sufficient to insure against excessive use of FNMA's facilities for this purpose. About what did you have in mind for that?

Mr. ALBERT. Oh, perhaps 12 or 2 points below the market. Senator SPARKMAN. Do you think something like that would prevent the excessive use of FNMA?

Mr. ALBERT. Yes, sir; I do.

Senator SPARKMAN. It seems to me that the primary purpose of holding it to new construction is to encourage the building up of our housing inventory. And also it has been my understanding that FNMA has felt that if it were allowed to do this on existing properties that the first thing we knew it would be taken up just as you forecast here excessively for that purpose.

Mr. ALBERT. Well, I think that the thing has been done backward under present conditions. I think, to the contrary, if money were available for good used housing-that is, the financing of good used housing these people who own the used homes would sell and realize substantial equities.

Senator SPARKMAN. You think it would stimulate the market and even stimulate new construction?

Mr. ALBERT. It would more than what is being done now, in my opinion. The seller would have a substantial equity, thereby not needing the facilities offered by FNMA in purchasing mortgages at par or anywhere near par on new construction. They would be in a position to buy with conventional mortgage loan financing or at least with FHA loans involving sufficient down payment not to require the facilities of an agency such as FNMA to support the new construction market.

I think we are missing a big bet there.

Senator SPARKMAN. I wanted to ask you, Mr. Gill, just one question about rental housing. We are all very much interested in rental housing. I think you point out something that we must take note of, and that is that it has been sloughing off to such an extent that we find ourselves in need of rental housing all across the country. Do you believe that the recommendations that you have made will produce rental housing?

Mr. GILL. I very definitely do, Senator.

Senator SPARKMAN. Thank you very much. I thank all of you gentlemen. I appreciate your presentation. I am sure it will be helpful to us.

Senator Javits, we are glad to have you with us. You proceed in your own way.

STATEMENT OF JACOB K. JAVITS, A UNITED STATES SENATOR FROM THE STATE OF NEW YORK

Senator JAVITS. Thank you. I shall take but a very few minutes. I am very grateful to the committee for the opportunity to appear. Mr. Chairman, the primary reason for my appearance is twofold. One, I appear in support of S. 3548, which, though not before the committee on this hearing, is practically before it because it deals with the question of the authorization for urban renewal funds.

The bill is sponsored by Senators Aiken, Case of New Jersey, Ives, Potter, Payne, who is here today, a member of the committee, and Purtell.

Senator SPARKMAN. Senator Javits, will you hold it? Senator Payne, I clearly forgot that you were here. Did you have any question to ask of these other gentlemen?

Senator PAYNE. I am a very quiet individual. I am listening. Senator SPARKMAN. I am sorry. You ought to move up closer. All right, Senator Javits. Go ahead.

Senator JAVITS. The bill proposes to authorize immediately an additional $500 million for urban renewal to take effect upon the enactment of the measure. It is an emergency $500 million appropriation but fits in very closely with the subjects of the committee's hearing. Senator SPARK MAN. S. 3548?

Senator JAVITS. S. 3548.

Senator SPARKMAN. Mr. Carter tells me that that bill is before us. Senator JAVITS. Good. It has been referred then. I did not know you were having this hearing on that bill. But if you are, Senator Sparkman

Senator SPARKMAN. We have all of the bills that are before us up to this time, all of the bills that have been referred to our subcommittee relating to housing; up to the present time.

Yes, S. 3548 is one of the bills.

Senator JAVITS. Good.

Senator SPARKMAN. It was mentioned in the opening statement and has been printed in the record.

Senator JAVITS. I thank the chairman.

Now, that is one purpose of my testimony, which, as I say, will be brief.

The other is that I have a number of recommendations with respect to the Housing Act, some of which I have discussed before on the floor, but I thought I would round them all up in one package and present them to the committee, so they might be considered when the committee marks up the bill.

First, on urban renewal, and the bill sponsored by myself and the other Senators I have mentioned, I have a piece of direct information on that for the committee. A few days ago I sent to the mayors of 30 cities in New York State a telegram which I would like to read into the record. It is addressed to the mayor of each city, and I will submit a list of the cities for the record:

In connection with testimony I will give May 20, 1958, in favor of a bill to increase substantially urban renewal funds, I am contacting several cities throughout New York State requesting the following information where available:

(1) Do you have one or more project applications pending before the Urban Renewal Administration. If so, how many projects are involved and how much in Federal Capital Grant Funds are you requesting?

(2) If Federal funds are available, approximately how much would your city request in capital grant funds for fiscal 1959, beginning July 1, 1958, and ending June 30, 1959?

(3) How much would you request for fiscal year 1960?

(4) Approximately how much in capital grant funds would you request for the entire 5-year period ending June 30, 1964?

(5) Numerically, how many projects are involved?

I would greatly appreciate your immediate attention to my request and ask that the information be wired collect to my Washington office.

Then follows a list of the cities, which include the major places in New York State, but with a sampling of smaller cities, because we feel very strongly in New York that urban renewal is extremely important to the smaller city.

(A list of the cities to which the above telegram was sent follows:) Niagara Falls 1

11

Lockport
Rochester
White Plains
Glen Cove1
Yonkers 1

Mount Vernon
Beacon 1

Peekskill1

Elmira
Kingston'
Schenectady
Watertown'

New York City1
Dobbs Ferry

Utica

Oswego

Oneida

Little Falls

Troy1

1 Cities that have already replied with specific answers to most, if not all questions.

Senator JAVITS. Mr. Chairman, interestingly enough, even in our wealthy suburb of Nassau County, which now has a population of over a million, right outside of New York-it is the Long Island area outside the great city-we are already having slum problems. It is just an indication of how fast these problems crowd upon you unless you are constantly running to keep up with them.

I am not going to detain the committee with any detailed recital of that, but I mention it because it is indicative of the problem of the American city, which now incorporates not only the city limits but the suburban area as well in terms of what we are interested inthat is, housing.

Now, the answers to this survey were very interesting, Mr. Chairman. We did not get answers from everybody, and we have showed who did answer, but we got answers from most all the cities.

We had to take an estimate on New York City, because, it being a very big place, authoritative figures there are a little slower. But it is quite an accurate estimate we believe.

Here is the report.

So far the survey indicates that probably at least half of the urban renewal projects desired by New York State communities will have to be abandoned unless Congress substantially expands the urban renewal program as originally proposed.

In other words, unless we give more than $200 million for the next fiscal year and more than the total program of $1.3 billion for which the administration has asked, we feel that our program will have to be cut by about 50 percent.

These answers give strong support to legislation already introduced by myself and six other colleagues requesting $500 million in new urban renewal funds immediately.

The answers from 21 of the 30 New York State communities turned up the folowing facts:

More than $375 million in Federal capital grant funds to be spent on slum clearance and urban renewal projects from July 1, 1958, through June 30, 1964, is required by the 16 cities able to detail their future needs.

For the very next fiscal year they want $62 million in new funds and at the present time have more than $70 million in project requests now pending before the Urban Renewal Administration.

Now, those figures are, of course, tremendously significant when we realize that urban renewal has about $40 million on hand, that at the most it could get $50 million-odd more if it was released by the Budget Bureau, and that there is within reach a possible $100 million additional which is in the hands of the President. But the whole kit, even exhausting every conceivable availability, does not begin to meet what New York would need, considering its proportion of the aggregate, which for the whole State is about 122 percent of whatever is available for allocation.

Now, that is 16 cities out of the 30. Four of the cities reporting said they needed urban renewal programs but were unable at present to estimate their financial requirements. Only 2 out of the 30 cities had no interest in starting urban renewal programs.

New York City alone is expected to request $35 million in new funds for fiscal 1959 and wants a total of $175 million for the additional 5-year period ending June 30, 1964.