requirements and procedures to find where they might be strengthened and to assure careful regional office examination of proposals made by local public agencies. The Comptroller General's report, however, with its strong emphasis on making structural substandardness of buildings a primary criterion for approving large-scale clearance, gives only superficial recognition of the full range of factors which were considered in our approval of that type of treatment for this project area. I object to the indication that our approval was premature. We are keenly aware of how large-scale clearance can increase urban renewal costs; also the importance of preserving, when feasible, buildings that are structurally sound. At the same time, as shown by our established criteria for clearance treatment which are quoted at the bottom of page 13 and the top of page 14 of the report, the need for clearance can develop from a number of factors in addition to the structural substandardness of buildings in the area. All these factors were considered in the original URA decision to approve the extent of clearance proposed for the Erieview project. One tour of the project site by regional office officials on the afternoon of November 15, 1960, and the following morning was not, as indicated in the first paragraph on page 26 of the report, the "principal basis for the determination that the area met URA requirements for clarance." Regional office staff had visited the project area on other occasions before and during preparation of a general neighborhood renewal plan for the larger area of which this project is a part. Even though interior inspections may not have been made, the regional office would have had an adequate knowledge of the area to evaluate data submitted by the city in terms of the presence of a sufficient percentage of substandard buildings and also the presence of other factors such as incompatible or deleterious uses, obsolescence or incompatible and use relationships, all of which are recognized under URA policy as conditions warranting clearances. There is no question but that several of the buildings to be cleared were structurally standard and that some of them involve high acquisition costs. Here is where we come to grips with the question of whether retention of such buildings would be compatible with the achievement of the urban renewal plan's objectives for the project area. As your letter recognizes on its second page, the urban renewal plan which the city developed for the area called for a different type and character of use than would have been fulfilled by retention of these buildings. It was not necessary to make interior inspections of these buildings to appreciate that their presence would be incompatible with new construction in the surrounding area. What is more important, their presence would have stymied achievement of an urban renewal plan which grew out of the city's intensive study of what was needed to revitalize its downtown area. I believe that it is not only appropriate, but also necessary, that a local public agency, in establishing its plan objectives, should aim at giving the urban renewal area the role it should play in the city's future development. Even though these objectives require radical changes in existing land uses, they must be accepted, rather than watered down, when there are no reasonable alternative means for their achievement. The basic purpose of an urban renewal plan is to develop a course of action that will result both in the elimination of blight from the area and prevention of its recurrence. We have consistently recognized that achieving this purpose in the light of valid local objectives may require acquisition and demolition of some basically sound preparations even though this might prove to be more costly than a limited, but ineffective, treatment. I am satisfied that the city of Cleveland did establish sound and realistic objectives and a well conceived urban renewal plan for the renewal of this portion of its downtown area, both in the light of local conditions and the objectives of title I. I believe that URA had sufficient information at the time this project was approved to make a realistic judgment that the large-scale demolition proposed was warranted. It would have been most unwise for URA to have taken a position which would have upset achievement of the plan through retention of scattered structures. One other point, which I believe is pertinent to this case, is that the Ohio courts have found that this project meets the requirements of Ohio law and have rejected efforts by property owners to prevent acquisition and demolition of their properties. The above comments on the Erieview project cover, in essence, my reactions to the Comptroller General's report. They also cover some of the considerations we apply to local proposals for large-scale demolition. Our present policies with respect to minimizing the amount of clearance which takes place in an urban renewal area provide as follows: The LPA must (1) show that the extent of clearance proposed is warranted and (2) fully justify the acquisition of individual parcels of basically sound property which involve high acquisition costs and might not be incompatible with land use proposals. Every possibility must be explored to develop an urban renewal plan which permits a maximum number of sound structures to remain in the area. HHFA will not concur in the acquisition for demolition of property that is: (1) Of such quality and potential use that its retention is compatible with the achievement of the urban renewal plan objectives for the project area. (2) Capable of being improved and successfully integrated into the project. Our criteria are expressed in this manner because, as the above comments indicate, we believe that sound judgment in the light of circumstances surrounding a specific project must be the primary basis for decisions. Most rules based on the structural condition of buildings or on the number of structurally substandard buildings in an area have an appeal in an engineering or accounting sense. I believe, however, that they would be self-defeating through vitiating the flexibility needed for a positive approach to urban renewal. They would work to prohibit clearance which may be required to achieve the objectives of a sound urban renewal plan. They also could make it extremely difficult for a local public agency to prepare and carry out an urban renewal plan that meets the objectives of the Federal statute as I understand them. I agree with the thought expressed in your letter that this is an issue requiring special attention in the case of downtown projects. Rehabilitation and limited clearance undoubtedly can be the basic treatment in many cases; in others, a creative revitalization of the area will require more radical treatment. I believe that we can and should rely on broad criteria; that careful scrutiny of specific proposals, with analysis of all factors involved, will be more effective than a tight formula under which decisions as to demolition would be based on structural condition. As I said at the outset, we are concerned about the questions raised in the Comptroller General's report and are studying our requirements and procedures to see where weaknesses might exist. Sincerely yours, WILLIAM L. SLAYTON, Urban Renewal Commissioner. 88TH CONGRESS 1ST SESSION S. 2086 IN THE SENATE OF THE UNITED STATES AUGUST 26, 1963 Mr. BREWSTER introduced the following bill; which was read twice and referred to the Committee on Banking and Currency A BILL To amend sections 220, 221, and 233 of the National Housing 1 2 3 4 5 6 7 9 Act. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsections 220 (f) (3), 220 (h) (6), 221 (g) (3), and 233 (g) of the National Housing Act are each amended by adding the following sentence at the end thereof: "If payment is made in cash pursuant to this paragraph, there shall be added to such payment an amount equivalent to the interest which the debentures would have borne, computed to the date of the settlement of the claim, if payment were 10 made in debentures." 88TH CONGRESS 1ST SESSION S. 2130 IN THE SENATE OF THE UNITED STATES SEPTEMBER 10, 1963 Mr. SPARKMAN (by request) introduced the following bill; which was read twice and referred to the Committee on Banking and Currency A BILL To empower the Federal National Mortgage Association to deal in conventional mortgages and to provide otherwise for its further development as a secondary market facility. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That section 302 (b) of the Federal National Mortgage 4 Association Charter Act is amended to read as follows: 5 "(b) For the purposes set forth in section 301 and sub 6 ject to the limitations and restrictions of this title: 7 "The Association is authorized under section 304, pursuant to commitments or otherwise, to purchase, lend on 9 the security of, service, sell, or otherwise deal in any mort10 gages which are insured under the National Housing Act, or 2 1 which are insured or guaranteed under the Servicemen's 2 Readjustment Act of 1944 or chapter 37 of title 38, United 3 States Code, or which are insured under a contract of in 4 surance and by an insurer which are generally acceptable 5 to private institutional mortgage investors (as determined by 6 the Association), or which, although neither insured nor 7 guaranteed, are of a quality generally acceptable to private 8 institutional mortgage investors and otherwise meet generally 9 the standards of the Association in its other operations under 10 section 304: Provided, That the Association shall not pur11 chase mortgages as to which the outstanding principal 12 balances exceed 80 per centum of the appraised value of the 13 properties covered thereby unless payment of such excess 14 amount is insured or guaranteed. 15 "The Association is authorized under sections 305 and 16 306, pursuant to commitments or otherwise, to purchase, 17 service, sell, or otherwise deal in any mortgages which are 18 insured under the National Housing Act, or which are in19 sured or guaranteed under the Servicemen's Readjustment 20 Act of 1944 or chapter 37 of title 38, United States Code: 21 Provided, That (1) no mortgage may be purchased at a 22 price exceeding 100 per centum of the unpaid principal 23 amount thereof at the time of purchase, with adjustments 24 for interest and any comparable items; (2) the Association. 25 may not purchase any mortgage if it is offered by, or covers |