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Substantial progress in the clearance and rebuilding of slums and blighted areas depends upon making it possible to assemble and clear the land in these areas and to reuse it for a variety of purposes-for housing, for business, commercial, or industrial uses; for parks, playgrounds, and other public purposes; or for whatever use the local community determines is best suited to its own needs. That is the core of the problem which faces almost every American city-large and small alike.
The cost of acquiring land in slum areas and clearing it for purposes of redevelopment are greatly in excess of the value the land will support when it is redeveloped for appropriate purposes. These costs make it impossible for private enterprise to purchase, clear, and redevelop slum areas except on a relatively small and sporadic basis. This basic difficulty is compounded by the further difficulties in assembling large enough sites, particularly in central city areas, to permit an efficient scale of rebuilding operations.
The cities are well aware of the serious results of the failure to meet this problem effectively. They know the social costs of slums. The mayors and other city officials daily face the problem of heavy municipal expenditures for essential municipal services in slum areas which far exceed the taxes derived from those areas. As new building is forced to the periphery of cities and the tax base in the central city areas decreases, they face the problem of constantly increasing municipal outlays for capital improvements and additions required to serve the newly developed areas. Certainly it is not from any lack of interest, or from any lack of a real desire to do something about it, that our American cities have not met the problem themselves. They have not met it-and without Federal assistance they probably never will meet it–because they do not have access to the financial resources required to absorb the full costs of the necessary write-down in anything approaching the volume that is required for effective slumclearance operations. Measured against the need, but little has been accomplished or can reasonably be expected to be accomplished without Federal financial assistance in this urgent and serious problem area.
Title I of the pending bill would authorize contracts with local public agencies for Federal loans and capital grants for locally planned projects. An authorization for $1,000,000,000 for loans is provided. The loan authorization becomes available over a 5-year period, commencing with $25,000,000 on July 1 of this year and increasing by $225,000,000 on July 1, 1950, and by further amounts of $250,000,000 on July 1 in each of the succeeding 3 years.
The capital grant authorization is $500,000,000. It also becomes available over a 5-year period, commencing with $100,000,000 on July 1 of this year and increasing by a like amount on July 1 in each of the succeeding 4 years. Subject to the total loan authorization of $1,000,000,000 and the total capital grant authorization of $500,000,000, authority is provided whereby the President may increase the loan authorization and the capital grant authorization for any year by $250,000,000 and $100,000,000, respectively, if he determines that such action would be in the public interest.
The Federal aid provided by title I of the pending bill could be extended only in cases where the project areas are predominantly residential in character or where the project area is to be redeveloped for predominantly residential uses. A local public agency would
acquire the land within a project area to be developed or redeveloped. The redevelopment plan for the project area must be approved by the local governing body of the locality involved.
The plans for the redevelopment areas in the locality must afford maximum opportunity for private enterprise. Much of the construction required in connection with the development or redevelopment of these areas will therefore be private construction. There will, of course, be some public participation in all areas through the provision of schools, streets, parks, and other public facilities required to serve or support the new uses of land, and public housing may be built where the local governing body determines that a particular area is best suited to such use.
Advances of funds would be available to finance the preparation of plans for projects. Temporary Federal loans would be available to finance the acquisition and clearance of the land, and its preparation for reuse. These temporary loans would be repayable when the project is completed and the land is sold or leased for redevelopment. The long-term Federal loans would be available to refinance any portions of the site which are leased and would be secured by the rentals from any such leased land.
Upon completion, the total cost to the local public agency will be determined—including the cost of acquiring and clearing the land, site improvements and similar work required to prepare the land for development or redevelopment, and the cost to the municipality of new public facilities of direct benefit to the project area. From this will be deducted the total amount received by the local public agency in disposing of the land the value of any lands which it has leased.
One-third of this difference must be borne by the locality as the local grants-in-aid required under title I of the pending bill. This local share must be in the form of the cost of installations or work required to make the land available for development or redevelopment or to serve the new uses of the land, donations of land, and so forth, or cash donations to the local public agency. The remaining twothirds would be borne by the Federal Government through its capital grant. These capital grants may not exceed two-thirds of the losses on all projects undertaken in any one locality, and, in the case of any one project, the capital grant may not exceed the difference between the loss and the local grant-in-aid actually made with respect to
Title I of the pending bill recognizes the importance of local initiative and local responsibility in the contemplated program. It requires that the projects shall be locally initiated, locally planned, and locally executed, and that each plan for the development or redevelopment of a project area have the approval of the governing body of the locality involved. It will permit an effective start to be made now in meeting one of the most difficult and pressing problems in the field of housing and I hope it will have the complete support of your committee.
Mr. PATMAN. The object of this bill is to carry out the policy that was announced by the Joint Committee on Housing during the Eightieth Congress; that is correct, is it not. Mr. Foley?
Mr. FOLEY. Å little more exactly, I think, Congressman, it would be to carry out the declaration of policy contained in this bill which
I think, in general, is in accord with the policy and other recommendations of the Joint Committee on Housing.
Mr. PATMAN. In general, it carries out the policy of the Joint Housing Committee?
Mr. FOLEY. It is substantially the same policy.
Mr. PATMAN. That committee heard witnesses all over the United States?
Mr. FOLEY. That is right.
Mr. PaTMAN. It was a unanimous report, was it not? I do not recall anyone objecting to it.
Mr. Rains. As far as policy is concerned, I believe it was unanimous.
Mr. PATMAN. That is what I understand. It seems we should have support from both sides of the House on this question, since the joint committee representing both parties joined in announcing this policy and may I express the hope that we have their support again.
Mr. COLE. Might I suggest the policy is one thing and the implementation of it may be entirely a different thing.
Mr. PaTMAN. That may be true but the main thing is to provide housing for people who are not able to provide it for themselves.
The CHAIRMAN. I suggest, Mr. Foley continue. He will be available for interrogation when he gets through his statement.
TITLE II-FEDERAL ASSISTANCE FOR LOW-RENT PUBLIC HOUSING
Mr. FOLEY. I have described briefly to your committee the problem of slum clearance. I think it is a matter of common knowledge that the occupants of the slums are predominantly families of low income. It is equally obvious that these low-income families do not voluntarily choose the squalor and congestion of the slums as the proper environment in which to live and raise their children. They live in the slums because their incomes are too low to pay the economic rent which private owners must charge for adequate housing, new or old.
Obvious as these facts may appear, they constitute, nonetheless, the primary answer as to why the provision of decent housing for families of low income is indispensable in any program which seems to improve the housing conditions of the American people as a whole. Inability to provide adequate housing for low-income families now living in city slums or rural shacks represents our most acute problem area. I believe this represents the area of need which has been most neglected. It would appear indisputable to me that a program of substantial Federal aid for housing must make adequate provision for those families most urgently in need of help.
I have made clear to your committee my strong belief in the importance and desirability of the slum-clearance program proposed in title I of this bill. I must also make clear my belief that a program which undertook to clear slums for redevelopment but phich was not accompanied by adequate provision of decent housing for the families now occupying those slums would be morally wrong and socially indefensible. Such a program would compound the neglect of the housing needs of a substantial proportion of our population by diminishing even the present inadequate supply of substandard shelter now available to them without in any way making available a substitute supply. Such a program would do nothing to satisfy the basic justification for Federal assistance to slum-clearance projects, which is to remove the blight of bad housing from American families. Moreover, in my opinion, no such program could hope to succeed or to command the kind of community acceptance necessary for success.
The only substantial degree of progress which has been made in providing decent housing for families of low income has been through the 172,000 units of low-rent public housing developed by local authorities with Federal financial assistance under the United States Housing Act of 1937. Small as this program is in relation to the need, it has demonstrated by experience its ability to serve lowincome families at rents within their means and without excessive expense either to the Federal Government or to the local governments. I call the attention of your committee to the fact that the rents charged in the original low-rent projects in 1947, which were graded in accordance with the paying ability of the tenants, averaged only $27.24 per month, including substantially all utilities. This compared with the estimated average rent of approximately $28.50 per month charged for substandard dwellings in urban areas, on the basis of Census Bureau figures.
I also call the attention of your committee to the fact that the average incomes of the families admitted to those projects during the first half of 1948 was only $1,481. Even though a considerable number of tenants with incomes in excess of the maxima set by the local housing authorities were still occupying the projects last year, the
aperage income of all tenants was only $1,884. I cite these figures as evidence that this program is actually serving low-income families with decent housing at rents within their ability to pay and generally comparable with those charged for slum housing.
Title II of the pending bill would extend the original program under the United States Housing Act of 1937 by authorizing Federal financial assistance to local communities for the development of not more than 1,050,000 low-rent public housing units over a period of 7 years. The bill would also make various amendments to the United States Housing Act which have been shown to be desirable by experience under the program or by the extended studies of public housing conducted by various congressional committees.
Admittedly the low-rent public-housing program has been one of the most controversial issues in the housing legislation which has received such prolonged consideration in the Congress during the past 4 years. Numerous arguments have been presented by the opponents of public-housing legislation in the course of these hearings and debates. I believe that a candid examination of these arguments in the light of actual experience will demonstrate that they do not present a valid case.
It has been contended, for example, that private enterprise can suitably provide for the housing needs of low-income families. When I say that experience invalidates this argument, I speak as a strong supporter of private enterprise in housing and as one who believes that the private housing industry can greatly enlarge the area of its operations. But I know from personal experience over the past 14 years that, as far as new housing is concerned, private enterprise has continuing difficulty in servicing fully even the middle range of income and that there is no current prospect of its reaching the income levels now requiring public housing. Moreover, while some low-income families are undoubtedly occupying used housing that meets adequate standards, the fact that millions of substandard dwellings continue in intensive use is clear evidence that the great bulk of our supply of standard housing is beyond the financial reach of low-income families.
It has also been contended that the housing needs of low-income families are strictly the responsibility of State and local governments, which can and should assume the obligation of meeting those needs without Federal assistance. The realistic answer to this argument rests on the demonstrated inability of States and cities to undertake major programs to meet those needs. While a few of the wealthier States and cities have launched housing programs through their own resources, even these have been clearly inadequate in relation to the need, and are recognized by those States as supplementary to any Federal-aided program.
I do not subscribe to the position that this inactivity stems from any callous disregard on the part of local officials for the housing plight of citizens of their communities. Rather I think it reflects the severe limitations on the sources of revenue for local and State governments and the heavy demands on those revenues arising from the mounting costs of established municipal and State services. In this connection, I am impressed by the testimony of the two national organizations representative of local governments—the United States Conference of Mayors and the American Municipal Association—that the mayors of an overwhelming majority of American cities believe that Federal assistance is essential to progress in meeting the housing needs of lowincome families and strongly support the public housing provisions in this bill.
The facts of the housing situation also, in my opinion, fully justify the size of the public housing program proposed in this bill. The housing bills before the Seventy-ninth and Eightieth Congresses proposed a program of 500,000 units over a period of 4 or 5 years, as compared with a program of 1,050,000 units over a 7-year period in the pending measure. The previous bills clearly contemplated an early review by the Congress of the remaining needs for public housing and of the ability of low-income families to secure adequate housing through other means. The weight of experience since those bills were first considered and the further studies undertaken by congressional committees confirm the large need for public housing on the part of low-income families. In the light of that fact and of the long delay in authorizing a resumption of the low-rent public housing program, the production of public housing at an average rate of 150,000 units per year over the next 7 years is a minimum requirement if real progress is to be made in this critical problem area.
In the statements which have been submitted for the record and the information of your committee by Public Housing Commissioner Egan and myself, there are rather detailed explanations of the various provisions of title II. Without duplicating those explanations, I believe it may be helpful to the committee to high light some of the major amendments to the existing provisions of the United States Housing Act.
Title II would further emphasize local responsibility for the initiation of low-rent public housing projects. It would require approval