Senator MUSKIE. Thank you very much. Miss Fern M. Colborn, secretary for Housing and Urban Renewal, National Federation of Settlements and Neighborhood Centers. It is a pleasure to welcome you. STATEMENT OF FERN M. COLBORN, SECRETARY, HOUSING AND URBAN RENEWAL, NATIONAL FEDERATION OF SETTLEMENTS AND NEIGHBORHOOD CENTERS Miss COLBURN. I will be very glad to submit my statement for the record and comment on certain parts of it. Senator MUSKIE. That will be very useful. Miss COLBURN. In general, we favor the legislation as submitted by President Johnson and make certain suggestions about it throughout the document. We have always been very good friends of urban renewal. On the bottom of page 2, I have done a statistical example which applies to the cities of half a million in size that shows that the elderly are not subsidizing urban renewal in such cities to the tune of about a million and a half dollars because of our current relocating policy. I did that this way to underscore the seriousness of this problem, with the hope that this Committee will approve those sections of the legislation, and possibly even go further, if you can find ways to do this, because it is a very serious problem. Then the next place I would comment is on page 6. Here, like some of the previous speakers this morning, I am urging that the public housing program as envisioned in this legislation is not large enough in relation to the need. I also indicated, as we always try to in advocating any public policy in our organization, that this is a program that can pay for itself and does pay for itself. On page 7 then Senator MUSKIE. On that point, it is always difficult to get as much as we ask for. Miss COLBURN. Yes; I do know. I think the best we can do is all work hard to get it in view of the great need. Senator MUSKIE. I think it is very useful to have you people here stressing the urgency of the problem. That at least gives us something to work with. Miss COLBORN. That is good. Beginning on page 7, I have a new section here that I would like to present and give a couple of arguments for. In recent years, we have begun to rebuild our cities. We have been obliged and, properly so, to move to public housing a great bulk of those relocated. This will increase as we continue to rebuild. Accordingly, in our large housing developments we now have a far greater concentration of dependent and have-not families than we ever had in our slums. This has resulted in a whole gamut of social problems. Many social agencies, public and private, have been grappling with these problems. To the extent of available resources, our member settlements have been providing services to families living in low-rent public housing. We are currently putting several million dollars each year into such service. Our limited private resources are not enough. Each year we must turn down requests to develop needed services because we do not have sufficient funds. Some examples follow of results that a little bit of money spent this way can produce. Hundreds of families are evicted from public housing each year because of poor housekeeping. Both housing authorities and welfare people believe this is a problem that can be corrected. In one city, one of our member settlements did a 2-year program to see what could be done to improve housekeeping of families living in public housing. This agency worked with groups of families who, the housing authorities said, would have to be evicted because they were poor housekeepers. Each group was worked with over a period of 90 days. The project was evaluated by a research team from the university. There was marked improvement in the housekeeping of over 50 percent of the families. Approximately 80 percent of these families were not evicted and on a further check several months later, the great majority were again rated as fair or good housekeepers. In another city, a similar team of agencies worked together on a family rehabilitation program to assist not only in improved housekeeping but in home management, as well. Here families began to pay their rent regularly, to handle their problems, and the whole family picture improved. The cost per family of this rehabilitation help ranged from $371 to $471 per family. This is slightly less than the cleaning and redecorating costs to an authority for one apartment when a family is evicted for poor housekeeping. Yet, the results are far more permanent. In another city, in order to get needed services into public housing, one of our settlements placed one worker in a housing development and he put together a team of people whose salaries are paid by public agencies or foundations. This team included home economists, caseworkers, youth workers, work with aged. This team worked on housekeeping, health problems, juvenile and adult delinquency, and many other family problems. As people learn to solve their individual problems, the team brought together the families living in the development and those from the surrounding neighborhood. Together, they planned and built a playground. To equip it, they ran a street fair and raised the funds. For the first time, these citizens worked together as volunteers in the civic project that brought a permanent improvement to their neighborhood. A new role for families living in public housing to be able to work with their less fortunately housed neighbors to develop a neighborhood asset. Congress has wisely made money available through various programs and the Department of Health, Education, and Welfare for rehabilitation of families, strengthening family life, vocational education, child care and so on. Other programs can be financed by available funds in the Department of Labor and the Department of Agriculture. These are available to all families in our communities including those living in public housing. The fact is, that the whole package of services is needed in the larger housing developments but funds are not available for the kind of staff needed and necessary to get these services moving. If such funds are made available through the Public Housing Administration to local authorities, these services could be started. These are services that local communities ask for and want. In general, local private agencies have extended their services as far as possible. Financial assistance must now come from elsewhere. We therefore ask if you will provide supplemental financial assistance to PHA to provide the necessary local leadership for the development of essential services for families residing in low-rent housing. I will stop reading at that point, and this is the major things we wanted to bring before you. Senator MUSKIE. I don't think there is any question but what the kinds of services you have described are of tremendous value. I have had some exposure to their value in New York. I think if I may undertake to characterize this committee's attitude toward the problem in the past, it is that it is something of a no man's land. This really is more of a welfare problem than a housing problem. I think the committee has been reluctant to get into it for that reason. But that kind of work is profitable in terms of the values which it preserves and improves. I think there is no question about it. I would like to take this opportunity to compliment you people who are doing it, even under such difficult circumstances now. Miss COLBORN. Thank you. I have prepared an approach here which some of us close to this have been talking with the people at PHA about and we have done quite a lot of work on this. There is more information that could be made available to the committee, and we urge you to think along these lines as I do think there is a way here that would work. We have spent a great deal of time figuring it out. Senator MUSKIE. Thank you very much, Miss Colborn. Miss COLBORN. Thank you. (Miss Colborn's prepared statement follows:) TESTIMONY OF FERN M. COLBORN, NATIONAL FEDERATION OF SETTLEMENTS AND NEIGHBORHOOD CENTERS, NEW YORK, N.Y. I am Fern M. Colborn, staff member of the National Federation of Settlements and Neighborhood Centers. I appear before you today to testify in favor of S. 2468 and to ask for additions to this legislation. The National Federation of Settlements and Neighborhood Centers has nearly 300 member houses in almost 100 cities and in the majority of the States. More than one-third of our agencies work with families who live in low-rent public housing developments and most of our agencies are located in neighborhoods receiving urban renewal treatment of some form. In general we favor the proposals and amendments of the bill that are in line with President Johnson's recommendations. In particular we wish to emphasize the need for : (1) A Department of Housing and Community Development. (2) Increased relocation payments to displaced persons and businesses. areas. (4) Improvements in the mortgage insurance program. (5) Capital grant authorization and amendment in connection with urban renewal. (6) Increased authorization and amendments pertaining to the low-rent housing program. (7) Programs advocated in title VI community facilities. (8) Grant authorization for the open-space program. (9) Loan authorization for housing for the elderly. Even though we do not work in rural areas, we know many families who come to the cities seeking better living, as well as migrants who stop for the winter in neighborhoods where we work. Our organization therefore favors the rural housing program of loans and grants as outlined in this legislation. URBAN RENEWAL We have watched and assisted in the development of urban renewal programs since 1949, and believe that this program holds the key to the elimination of our slums and the renewal of our communities. In the light of our experience we would like to call your attention to certain problems not adequately covered in the legislation before you. RELOCATION As already indicated, our organization supports the recommended extensions of the relocation payments. We do question the 2-year limitation on the proposed rent supplements. Until a great dent has been made on poverty and the tide on unemployment has been successfully turned, it would be more realistic to have such supplemental payments available as long as standard housing is not available to a displaced family at rents not exceeding 20 percent of annual family income. Our organization also recommends that the maximum relocation payment to displaced families be increased to $300 to cover part of the costs related to moving that are over and above moving expenses. In addition to improvements suggested in the relocation program, the legislation should go further in providing for older people of low income, living on pensions and other sources of limited income. In many cities that I visit, a high percentage of the relocatees is in this group. Illustrating by a typical situation (developed from statistical information both national and local): In a relocation program of 2,400 families, 800 are elderly of low income and limited assets; the urban renewal agency pays the homeowners an average of $6,000, true market value for their property, but 300 of these elderly families must pay $12,000 to $14,000 for another house which they must mortgage. This means that urban renewal has been subsidized by the low-income elderly to the tune of $12 million in that city. In addition, these people have probably given up their neighbors, their friends, their church, and their favorite stores. The interest payments on the mortgage, even with deferring payments on principal as this legislation provides, further impoverishes the low-income elderly. We should do better by these independent citizens than is now contemplated. In my visits to many cities and in discussions of urban renewal problems with citizens and city officials, the question always comes up: isn't there some way we can do better by the elderly who must be relocated? This situation we are now asking the Congress to remedy. The next group in need of better assistance is the small businessman, and here I am referring to the corner store, owned and operated by one or two persons in a family. It is quite likely that many of these people should not try to reopen their businesses. In one neighborhood some 350 barber shops were doing business, when by any stretch of the market potential "yardstick" not more than 200 could hope to be profitable, considering location, population, and other factors. In this particular locality it is obvious that there are "too many barbers." Many small businessmen will need advice and assistance in preparing for a new livelihood. The pending legislation gives financial relief of a temporary sort and is needed, but in addition there is a role that could be played here by the Manpower Training Office, vocational retraining programs, and the Small Business Administration. The legislation could encourage such cooperation. The forgotten man in urban renewal is "the roomer." Yet, in every large city, industry uses hundreds of such men and women. Moreover, a large number of individuals attending vocational schools or who are part of the Manpower Training program, live in "the rented room." For many reasons, this is the most desirable way for thousands of individuals to live; a large number do not have the funds for self-support if they were to rent an apartment. Many of these people are young and just getting started in the labor market. This saving in housing is one way to accumulate funds for marriage and purchase of a home. If the person is already married, it is a way of saving money to support a family who lives elsewhere. Yet I know of only one urban renewal area that is even considering a way of rehousing these people. The roominghouse operator is considered a small business, but does the Small Business Administration consider him a good risk for a loan if he wants to improve or expand his business? Because they are small business they are not eligible for FHA insurance. This is a needed service in our communities, yet we are putting these people out of business as fast as we can. I have pointed up two interrelated problems: (1) need for inexpensive housing for single individuals and (2) the need for assistance to enable roominghouse operators to reestablish their business. REHABILITATION The amendments proposed in the legislation before you will be of important value in rehabilitation, yet I find nothing in this legislation that strikes at the two basic problems: (1) the unavailability of loan funds and (2) financial assistance that will make the rehabilitation of housing possible at a cost that is not prohibitive for middle income families. It is with great difficulty that loans can be found for rehabilitation of properties in urban renewal areas. I have found this true in Philadelphia, Pittsburgh, Boston, New York, Cleveland, and in almost every city where I have had occasion to look into the matter. This would seem to say that new approaches must be found whereby the loan institutions can be assured that these loans can be economically feasible. Another approach that would seem possible would be to require FHA (1) to liberalize their procedures and (2) to take the initiative in finding a solution for this problem. DIRECT LOAN PROGRAMS Further incentives are essential to provide housing for middle-income families. The 221 (d) (3) program is of great value, yet the rents in this program can in general only be met by families with incomes of $6,000 and above in most sections of the country. In Boston, where the urban renewal agency studied this program extensively, used new materials, simplified design, the lowest rental housing they can build will be for rental at $110 per month. These houses will be in an area where families to be rehoused can afford to pay in the $60-$80-permouth range. Would it be feasible to provide a means whereby the 3%-percent interest rate on 221(d) (3) could be lower? Another way of reducing these costs would be to encourage the establishment of nonprofit groups to handle planning and development costs. A substantial increase in units built under both 221 (d) (3), the direct loan program for the elderly, as well as other means of subsidy, is essential if we are to provide needed housing for low-income families. DEMONSTRATION FUNDS We would urge you to expand demonstration funds both under urban renewal and low-rent public housing. We ask you to make urban renewal demonstration funds available to nonprofit groups. In addition, we hope that you will see fit to insert the word "environment" in the section on demonstration funds for public housing, so that this money can be used to find better ways than we now know of assisting people to make a fresh start in family living when they move into public housing. PUBLIC HOUSING The authorization for public housing should be raised to 200,000 units per year if we are to eradicate the slums and provide decent housing for the poor. In New York City alone there are 200,000 families of low income who need to be rehoused, 50,000 of whom are elderly. Using the 60,000 units annually recommended in this legislation and assuming that New York City were allotted 10 percent, it would require a third of a century to catch up, even if deterioration stood still, which it doesn't. You are already familiar with the statistics on slums and poverty in this country. We are losing ground because our small public housing program in too many cities is only able to house relocatees from the various public programs and cannot make the kind of attack on slums that we need if we really mean business. It is likely that public housing is very similar to urban renewal in that it pays its own way in the long run, if we are willing to take into account increased taxes received and indirect taxes resulting from stimulation of the building industry. This does not take into account the major factor of social costs of slums that are now too high for any community to continue paying. Our organization favors the plan under public housing to rehabilitate a fair number of housing units, as well as the plan for long-term lease of another group. This provision provides for an effective trial of this new approach. Our organization recommends an amendment to eliminate the 20-percent gap between the lowest private rents and the upper rental limits for admission to public housing. |