of the property or project, or the statutory percent of the actual cost to the sponsor for the physical improvements on the property or project including land, whichever is the lesser. Also, since, as stated above, many individual sponsors transfer land to mortgagor corporations at prices higher than those originally paid by the sponsors, we believe that in such cases the land cost to the mortgagor corporations should be the amount arrived at through "arm's length" dealing and that this amount be shown on the cost certification. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. Senator SPARKMAN. A few weeks ago, the President sent his housing message to the Congress, and, as we all know, the program proposed is a very large and most ambitious one. In some respects I was impressed by the President's message. It proposes many good provisions that I feel will have the effect of broadening and improving some of the housing programs presently on the statute books. On the other hand, it contains some provisions which are controversial and other provisions which I personally do not feel that I can support in their present form. It was for the latter reasons that I introduced the proposed Housing and Community Development Act of 1964 by request. The last major housing legislation occurred in 1961, and it was more or less understood, at that time that the Housing Act of 1961 would be a 4-year bill. We are now approaching the limitations both moneywise and datewise-established by the 1961 act, and if the old and new programs contained in the 1961 act are to be continued, then we have reached the period in time that the Congress must act, by either providing additional funds with which these programs can be carried on or by extending termination dates. The proposed Housing and Community Development Act of 1964 is perhaps one of the most complex and comprehensive housing measures laid before the Congress in some time. The bill itself contains some 92 pages with approximately 60 sections, each of which has two or more subsections. In addition, we must consider some 20 other pending measures. I believe I can therefore say, without being facetious, that "our work has been cut out for us." We have a broad range of witnesses scheduled to appear over the next 7 days, and I am indeed hopeful that these hearings will be most beneficial to the subcommittee members in considering all the bills which are before us. I should like to make this further comment. I have never made it a policy to limit the number of witnesses nor the amount of time such witnesses need to present oral testimony to the subcommittee. Since the first announcement of these hearings, the subcommittee staff has been deluged with requests for appearances. We have done our very best to honor each and every request but, in doing so, we have had to take into account the amount of time that has been assigned to the hearings as well as the schedules of all concerned. We have, therefore, made the request that oral testimony; that is, direct testimony, be held to 15 minutes, with the understanding that written statements will be printed in full in the record. There is no limit, of course, on the time permitted for questioning by subcommittee members. And I may add parenthetically that this will not apply to the administration witnesses who are appearing today. As I have already said, any bills introduced during the hearings will be made a subject of the hearings. I note in the Congressional Record of yesterday that Senator Smathers has introduced a bill, S. 2516, and an amendment to be imposed upon S. 2468. These two matters are, of course, included in these hearings. Now, Senator Javits, would you care to make any comment before we start? Senator Miller is just ready to testify on the bill which he has introduced. Senator JAVITS. Mr. Chairman, I would like the privilege of making a statement just preceding the testimony of the principal administration witnesses. I think it would be more appropriate at that time if the Chair would allow it. Senator SPARK MAN. Very well. All right, Senator Miller. STATEMENT OF JACK MILLER, U.S. SENATOR FROM THE STATE OF IOWA Senator MILLER. It is a pleasure for me to appear before you this morning to testify in behalf of S. 2045, a bill which I introduced with the distinguished senior Senator from Oregon, the Honorable Wayne Morse. Mr. Chairman, I would ask consent to have a copy of the bill inserted at this point in the record. It is a short bill, and I am sure it will not cause undue printing and I think will help those who follow the record. Senator SPARKMAN. That will be done. I was going to suggest though, as I said in my remarks, that I am listing all of the bills and printing the bills and the Department reports on the bills at the beginning of the record. Senator MILLER. Well, if that is done, then might I suggest that a reference to the page on which the bill is printed be inserted at this point if that is practicable? Senator SPARKMAN. I believe that can be done. Senator MILLER. I thank you, Mr. Chairman. (S. 2045 is reproduced on p. 165.) Senator MILLER. S. 2045 is a simple bill. It would amend the definition of the term "project" contained in the Housing Act of 1949 to preclude Federal assistance for the acquisition, disposition or demolition of any building other than a "substandard building." Our bill defines "substandard building" as any building other than a building (1) which can be economically improved or modified to meet requirements reasonably established by the local public agency for integration into an urban renewal plan, and (2) whose owner or lessee promptly agrees, and presents satisfactory evidence that he is able, to make such improvements or modifications within a reasonable time limit set by the local public agency. Last year when S. 628, a bill to amend the District of Columbia Redevelopment Act, was debated on the Senate floor, I introduced a similar amendment to that bill. At the time, however, it was suggested that the better approach would be to amend the basic housing act. Since we are dealing with legislation concerning urban renewal, we are affecting the homes and places of business of a great many people. Therefore, it is our belief that some practical guideline should be specified in the law for appropriate administrative officials to follow. This is especially important in light of President Johnson's recent housing message in which he recommended an additional $1.4 billion of urban renewal funds for a 2-year period. The Housing and Home Finance Agency has provided in its regulations-chapter 1, selection and treatment of project areas-some guidelines for clearance and redevelopment as follows: The necessity for clearance of a project area, or of any part thereof, must be satisfactorily demonstrated in all cases. If conditions warranting clearance do not exist, the appropriate treatment will be conservation and rehabilitation which may include spot clearance ***. The local public agency must also (1) show that the extent of clearance proposed is warranted, and (2) fully justify the acquisition of individual parcels of basically sound property which involves 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. Unfortunately, however, these regulations have not always been complied with. The most notorious example of the failure to follow these regulations is pointed out in the report of the General Accounting Office on the Urban Renewal Administration's approval of funds for the Erieview Urban Renewal project in Cleveland. The General Accounting Office stated that many buildings were torn down that need not have been demolished. It found that only 24 buildings in the area were substandard in contrast to the 84 substandard buildings cited in the urban renewal agency's approval of funds. And I just briefly want to refer to page 26 of that report, which says: We reviewed the condition of 77 of the 84 buildings. During our review, the HHFA specialist, who defined a standard building as one that is structurally sound and does not warrant clearance for reasons of structural deficiency, determined that 60 of these buildings were standard structures. Another example can be found right here in the Nation's Capital. Subcommittee No. 4 of the House Committee on the District of Columbia, under the chairmanship of Representative Dowdy, spent a great deal of time this past year in conducting hearings on the matter of urban renewal in the District of Columbia area. The results of the investigation of the Columbia Plaza project in the District raise serious questions about the grant of discretion which Congress has made to nonelected administrative officials and about the direction which future urban renewal should take. It is my understanding that the House District Committee's hearings are being printed now and will be available in the very near future. In the meantime, I would invite the attention of the subcommittee to the rather shocking statistics set forth in a summary of the findings by Representative Dowdy appearing on pages 24046 to 24049 of the Congressional Record of December 19, 1963. In its report on the Erieview project-on p. 35-the GAO made the following recommendations for the Administrator, HHFA, and the Commissioner, URA: 1. Revise the criteria governing the eligibility of areas for large-scale demolition to more clearly define the condition "substandard requiring clearance" and to relate this condition solely to the structural condition of the specific buildings being considered. 2. Clarify the criteria for Federal participation in proposed large-scale demolition projects to provide that, if an area does not have a significant number of structurally substandard buildings, expenditure of Federal funds shall be limited to other feasible but less costly forms of urban renewal (e.g., rehabilitation and spot clearance). 3. Obtain more effective administration, at all levels, of URA's established policy that the Government will not share in the cost of acquiring and demolishing properties which can be improved and successfully integrated into a project. 4. Require thorough examination by qualified HHFA personnel of the condition of structures in proposed project areas before such areas are approved for large-scale demolition. 5. Review the proposed demolition of buildings in Project I-Erieview, with the view toward retaining those buildings that can be successfully integrated into the project. Commissioner William L. Slayton, of the URA, commented on the GAO report on the Cleveland Erieview project in a letter to the chairman of this subcommittee as follows: Neat 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. Our bill would carry out the GAO recommendations. It would not vitiate the flexibility needed for a positive approach to urban renewal unless the redevelopment plans are designed to destroy property rights on a whimsical basis. It would not hamper those seeking to develop our urban areas who really wish to give recognition to the policy that buildings which can be integrated into a plan should be preserved, even though they may require some modifications. If modifications can be made economically to those buildings to meet reasonable requirements, and if the owners are ready, able, and willing to do so within a reasonable period of time, we believe it would be contrary to good policy for the Government to acquire such buildings for demolition. From the statement in his housing message of January 27 that, "Rehabilitation and preservation of existing housing wherever possible is a key element in the urban renewal process today," it appears that President Johnson agrees. I want to emphasize the almost absolute power which the legislative branch has in this area. In 1954, the Supreme Court rendered a decision in the case of Berman v. Parker (348 U.S. 26), approving the public taking of property which was not substandard or slum property because it happened to be in an area covered by a redevelopment plan. Moreover, the fact that the public taking was followed by sale for private use in conformity to the plan was held to not disqualify it under the "public use" requirement of the Constitution. The Court declared: Subject to specific constitutional limitations, when the legislature has spoken, the public interest has been declared in terms well-nigh conclusive. In such cases the legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation, whether it be Congress legislating concerning the District of Columbia or the States legislating concerning local affairs. This principle admits of no exception merely because the power of eminent domain is involved. The role of the judiciary in determining whether that power is being exercised for a public purpose is an extremely narrow one. Aside from the constitutional requirements of due process and just compensation, then, the legislature holds in its hands absolute power over urban renewal. It seems to me that property owners are entitled to the protection which would be provided by the guidelines we propose in our amendment. If Congress were to enact this legislation, as aggrieved property owner who did not think his property should be condemned for an urban renewal project could go into court. In the condemnation proceeding, the local public agency would have to show that the building to be acquired and demolished was "substandard." In that connection, the agency must prove that the building could not be economically improved or modified to meet the requirements, which it had reasonably established, for integration into the plan; or, if the building could be economically modified, the agency would have to show that the owner refused to do so. This is not a very large burden of proof to put on an administrator who wishes to be fair. In our zeal for improvements for the public good we should never forget that government exists primarily for the individual, and individual rights should be protected. In conclusion, Mr. Chairman and members of the subcommittee, I would like to point out that I am not questioning the dedication of our administrative officials engaged in urban renewal. We all know, however, that to err is human. One reason we serve in Congress is to enact laws so that there will not be as many errors as there might otherwise be. That is why we have tried to devise an amendment to the Housing Act to prevent a repetition in other parts of the country of poor administrative judgment as evidenced by the allotting of funds for the Erieview project in Cleveland and the Columbia Plaza project in the District. Senator SPARKMAN. Thank you very much, Senator Miller. Senator JAVITS. I just wish to express my appreciation to Senator Miller for coming here and helping us in the housing area and to assure him that I shall certainly give the utmost attention to this approach which he has laid before us to see if we possibly can work it into whatever we do on the act. I thank the Senator for his appearance. Senator SPARKMAN. Senator Miller, have you seen the letter that the Agency wrote to the chairman of the full committee regarding this bill? |