Mr. SEVERIN. The interest rate would have to be higher than in most cases to be attractive. Senator BUSH. Yes. Well, you have advocated that, too. Mr. SEVERIN. Yes. Senator BUSH. Now, you said on the next page: FNMA's Board of Directors should be greatly strengthened. Mr. SEVERIN. We hope to come before this committee at the first opportunity, but not before October, and explain our ideas for the expansion of FNMA into a true central mortgage-reserve facility to avoid the highs and lows that we in our industry have been forced to endure for the past few years-of having money or having no money to support our industry. And this, in our judgment, involves bringing people who are actively engaged in the lending and building business onto the Board of Directors of FNMA so they can provide the businessman's approach to this. This is no criticism of FNMA's operation. On the contrary, as I have said here, we think they are doing a most businesslike job, and we are very glad to work with them. Senator BUSH. You are reserving your suggestions about the Board of Directors for the present? Mr. SEVERIN. Yes. Senator BUSH. I think that is all. Thank you, Mr. Chairman. Senator SPARK MAN. Anything further, Senator Clark? Senator CLARK, No. Senator SPARKMAN. Thank you very much, gentlemen. We are very glad to have had you. It has been a great help to us. Next we will ask Hon. Joseph Langan, mayor of Mobile, Ala., to take the stand. Mayor, we are glad to have you with us. I understood that you and Mayor Dilworth were to appear together, but he has been delayed. I am glad that you are able to proceed without waiting for him. STATEMENT OF JOSEPH LANGAN, MAYOR, MOBILE, ALA., UNITED STATES CONFERENCE OF MAYORS Mr. LANGAN. I am Joseph Langan, mayor of the city of Mobile, appearing in behalf of the city of Mobile and, also, as a representative of the United States Conference of Mayors. Mayor Dilworth, of Philadelphia, also, will appear, and he will be here probably in a few minutes. I want to thank this committee for affording me the opportunity to appear before you to present matters pertaining to the need for legislation for a continuing, comprehensive housing program. I would like to commend Congress for its interest and great assistance rendered during the past two decades to the cause of better housing for our American citizens. This bill, S. 3418, introduced by Senator Sparkman and passed at this session of Congress, provides for many of our needs, but, as he himself expressed when he presented said bill, later on this session he proposed that, after hearings, another bill would be presented to make a thorough program for the housing needs of our citizens. I 25834-58- 19 received a printed copy of that bill this morning. I have not had a chance to review it too well, but I did read, during the hearing here this morning, somewhat, the committee-print bill of May 8. Senator SPARKMAN. May I say, Mayor, that committee print, in order that you may fully understand, is not intended to be a complete measure. What it really represents is bringing together some thoughts that we had had that were not included in other legislation pending before us. Mr. LANGAN. Yes, sir. Senator SPARKMAN. We have a whole mass of bills that we are considering, including that. Mr. LANGAN. Yes, sir. Of course, the bill passed earlier this year has only been in effect a few months. We have not seen the complete reaction of the housing industry to it. But we do feel that its provisions are certainly in consonance with the thoughts and ideas and things that we feel are necessary for the improvement of our housing, and we do look for many improvements to be brought about through the provisions that have already been passed at this session for aid in housing. Senator CLARK. Mayor, could I interrupt you to ask whether you have noticed any pickup in home building in the Mobile area since that bill was passed? Mr. LANGAN. There has been some; yes, sir. It was very slight there the first part of the year, but it has picked up some now, and we do have considerable numbers in the planning stages now. In particular, our planning commission's requests for planning of subdivisions have increased considerably during the past few weeks. Senator SPARKMAN. By the way, you said that it had only been in effect a few months. It has only been in effect five weeks, And the testimony we have had before the committee so far has been to the effect that there has been a considerably pickup in housing throughout the country. Mr. LANGAN. It has many features which I feel are very important and which will help the building situation. We feel that many factors are at work in our country which are producing conditions which necessitate the enactment of the legislation which has already been passed plus supplemental legislation to create an overall, comprehensive housing program for the United States. Some of these factors are: First, a rapidly expanding population requiring housing for new families and also more adequate housing for larger families. Second, we have, through advances in medical science, many older citizens with special needs in housing-and housing within their economic ability to pay for the same. We have a rapidly increasing enrollment of students in our colleges, which requires additional student housing. A large segment of our population, because of the economy of our Nation, lack of education, age, disability, or other reasons, do not have adequate income to provide itself with adequate, proper housing, and, therefore, it is in vital need of low-rent housing programs in order to provide it with adequate housing. The continued rapid urbanization of our Nation, and especially the recent rapid growth of some of our older cities, is causing a number of problems which can only be met by a comprehensive program of housing and urban renewal. The ownership of the automobile by a greater percentage of our population has caused a trend of living great distances from business and places of occupation and has brought about great changes in the pattern of our city planning. It has also brought on problems concerning street-paving, widening and improving, traffic control, and parking areas, all of which involve displacing of persons and the need for urban renewal. The above-described conditions are at work in all of our American cities today. And, while I will use as an illustrative example my own city of Mobile, I am sure that what is true in Mobile is more or less true in our other cities. Mobile was founded by the French over 250 years ago, and the French engineer planning the original city, which is our present downtown area, stated he hoped he was not overly optimistic but he was planning a city that might some day grow to a population of 400 souls. In 1940 Mobile had a population of 78,000. Today its population is 180,000, with two other cities recently coming into being on its borders, so that the total metropolitan area has a population of 250,000 people. The population of this area has, therefore, tripled in the last 20 years. With this growth have come many problems concerning all phases of housing. As our cities grow, changes take place in the character of all our neighborhoods. That which was once our finest residential neighborhood close in to the downtown area, because of limited transportation and utilities, has now changed to an industrial or business area with some remaining blighted and slum housing areas. There is still a need for some close-in housing for our laborers and low-income people who need to be near their places of employment or within reach of public transportation. This need, however, is not met by slum housing. In earlier years there was little or no planning for our cities, and most of them just grew. However, we are now planning and establishing planning commissions and employing trained technical persons to design our cities for the future. The future plan can only be carried out through the elimination of the mistakes of the past, either by a redevelopment program that completely removes the structures in an area and makes the land available for a completely and properly planned use or through rehabilitation and renewal which save that which is in conformance with the planned character of the neighborhood and rehabilitate the same where necessary and remove and replace that which is incongruous to the overall plan. This program has not been able to move forward as rapidly as it should because of many limiting factors. The requirements ot initiate the program take time to prepare and are often difficult to meet. The fact that the people occupying the slum areas in the areas proposed for renewal were not financially able to procure other housing has had a deterring effect on urban renewal. We have an urban renewal program which has been held up for some time awaiting the construction of low-rent housing in order to provide housing for those who would be displaced by the urban renewal program. Delays are also caused by problems connected with appraisals of property in the project area, controversy over the sale of property and condemnation proceedings. Senator CLARK. Do you mind if I interrupt you for a minute? Mr. LANGAN. No, sir. Senator CLARK. Because I am very much interested in what you said about your relocation problems. Do I understand that you have pending some applications for public housing units in which to rehouse those who will be relocated as a result of your urban renewal program? Mr. LANGAN. Yes, sir. Senator CLARK. Can you tell us how many units you have in mind for public housing? Mr. LANGAN. We have now 407 units under construction, and we have 2,180 units that we filed an application for the past week. Senator CLARK. Does your experience give you any hope that you are going to get that application approved by the Public Housing Administration? Do you think you are going to be able to meet their terms? Mr. LANGAN. We did on the 407 that we are constructing now, and we hope that we can on the others. Of course, as I say, we do not know until we actually get into planning. We made the application for preliminary planning. Then, when we lay it out, we will make the final application. We hope we can meet their terms. But, as I say, some of them are difficult. However, some of the proposals allow the placing of smaller units and not the large areas, and probably in future years as people become better situated economically they can maybe even purchase those homes. We feel both of those recommendations in this proposed bill are very good. Senator CLARK. Does your contemplated highway program give you any relocation problem? Mr. LANGAN. Yes, sir. We will have over 1,350 people who will be removed through 1 of the expressways coming in to the city. Senator CLARK. Could you give us an estimated total of the number of individuals who are going to have to be relocated as a result of all of your planning for Greater Mobile? Mr. LANGAN. It will be better than 3,300. Senator CLARK. Thank you very much, Mayor. Mr. LANGAN. We also have been delayed in the development of some of our urban renewal by our drainage and our paving and our other utility programs that have to tie in to the urban renewal area. Of course, the other planning in conjunction with this must be financed, carried out, and proper programs set up for it. We are now, however, pushing forward with our master plan for an enlarged and growing city, and the only way that this master plan can be made effective is through an urban renewal program adequately financed by the Federal Government with matching requirements which can be met by the local governments which are deeply in debt and hard pressed to find funds in their meager income to provide the increasing demand for city services. Senator CLARK. Would you stop right there, if the chairman will permit me? I would like to have you amplify that business about the ratio between the Federal grant and the local contribution and to get your comments as to whether you believe in your city or in any other city you know anything about it is going to be feasible as a practical matter to increase the local contribution and decrease the Federal grant. Mr. LANGAN. No, sir. I feel that actually the converse is true, that actually we are faced with great difficulty now in making the twothirds to one-third matching. We have many incidental developments in connection with these areas. In other words, as we try to move into an urban area and put in urban renewal, it has its effects on the surrounding area. For instance, to put in overall drainage programs, which cannot be just placed there for the urban renewal section itself but must take in the entire drainage area of a section of our city. Right now we have one that is just absolutely necessary because of a proposed highway that is coming through a portion of our city. It is proposing to dump water into an area which is already being flooded, so that we must divert this water. Present plans call for a $2,500,000 expenditure. We just do not have that kind of money. So there are many things connected with it. The highway traffic movement in and around urban renewal areas. Drainage in and around them. The extension of utilities in and out of those areas. We do not have in our funds the ability to match this, and the mayors are proposing that actually the fund ratio be changed from a two-thirds to one-third to either a 75 to 25 or even an 80 to 20 percent. Senator CLARK. Mayor, you say you do not have that kind of money. I wonder if you can give us a few approximate figures as to what has happened to your revenues in Greater Mobile since the war? What has happened to your tax rate? What has happened to your bonded indebtedness situation? All for the purpose of getting some testimony in the record to persuade the administration that they have been living in a dream world when they think that our local communities are going to be able to pick up a larger part of this tab. Have you not had a very real demand for extra revenues? Have you not had to raise your taxes? Would you follow along that line for a little bit? Mr. LANGAN. Yes, sir. We have tightened up in every way possible to increase the revenue for our city. Of course, the basic city tax in Alabama is such that we are limited under the constitution as to the amount of property tax we can levy, which now is 71⁄2 mills. We can go to 122 mills under the constitution, but that only on the vote of the people. We have now 211⁄2 mills of that 5-mill leeway on the proposal to be voted on on June 3. We are trying now to get the people to vote 21⁄2 additional mills of property tax to provide for the drainage program we are faced with now. Senator CLARK. Do you have any other sources of revenue for your municipalities other than the property tax? Mr. LANGAN. Yes, sir. We have our business licenses, the main productive source. We have one-tenth of 1 percent on the gross revenues of most of our businesses, and some of them even higher. Senator CLARK. That is, in effect, a sales tax? |