One of the reasons I am for urban renewal is because over the long term the program will do more good for more people and will have greater effect on improving urban life than any other program I can think of.

In its concentrated attack on slums, urban renewal did more to expose the ugliness and squalor of the provertey stricken among us than any other program. Urban renewal did not cause problems anywhere near so much as it exposed human problems and is continuing to expose these unhappy elements in Ameri can life.

The exposure of the deplorable housing of the urban slum made the public generally more aware of the need to provide adequate housing for the forgotten fifth of our population. And I believe this attention has been in a large part responsible for sparking some significant efforts to meet the needs of this group. No one of us would argue that housing alone, even in the best of neighborhoods, is the total solution to quest for the good life. But decent, healthful housing in attractive neighborhoods, with adequate schools, plays an important role in making it possible for the poor to break out of the poverty cycle.

To be sure, good housing alone can't do the job. Unquestionably, however, family life is made a good deal more attractive when one doesn't have to suffer from the physical discomforts which are commonplace in the slum.

Urban renewal has starkly exposed the shame of the slum-the indignities man must suffer if he is poor; and urban renewal was the first Government program, at any level of government, which said if you take a family out of the slum through a publicly sponsored clearance program, you must, if possible, relocate him in standard housing.

Other government programs which involve displacement now are beginning to recognize the obligation to make sure that adequate relocation practices are followed.

Relocation has brought home to many city officials the need to do more than just find new housing for the displaced.

All manner of social and human problems have been uncovered by the relocation process. And it is incumbent on the local public agency to see that every available resource of the community is brought to bear to help the family or individual involved meet the problem and solve it.

For many families this change to improved surroundings is sufficient for them to function at a satisfactory standard, but it does not get to the heart of the problem of the low-income families and the so-called culturally deprived individual or family.

Much more effective and intensive efforts must be made in the direction of human renewal if we are to successfully attack the fundamental problem and to carry out the spirit of the President's war on poverty.

The basis for this position is hard facts. We know. for example, that a disproportionally large segment of our population is poorly educated-in truth many are virtually illiterate. We know that a large proportion, particularly of our low-income families, have no male head of the household.

We know that an alarming number of persons have no job skills amenable to current employment demands. As a result the income levels of these families as well as of many aged and disabled persons are far below the minimal subsistence levels.

Low-rent public housing can meet the housing needs of such families but until these basic limitations are effectively dealt with the problem can only grow in magnitude and intensity. Essentially the same facts of life hold true whether we are talking about low-rent housing, urban-renewal sites, or other geographic areas of economic depression.

We in St. Louis in cooperation with a wide variety of public and private agencies are making a strong concerted effort to attack these problems at their roots. Our land clearance and housing authorities have on their staff persons specifically trained to serve as liaison persons between individual families and community agencies.

Public agencies at the National, State, and local level have been actively participating in this broad program. Universities have been involved on a consultant and research basis in order to give sound guidance to active programs. The city of St. Louis has created a new division of community services within its department of welfare in order to expedite and coordinate our concerted efforts toward the rehabiltation of individual families. And we hope to be expanding our efforts soon.

Time does not permit me to go into extensive detail about the multifaceted approach of our human redevelopment program. The significant fact, however,

is that it is imperative that we keep foremost in our minds the concept that the programs we are carrying out, as much as they deal with blueprints and buildings, with budgets and balances, are still "people oriented"-and we cannot afford to forget it.

More than anything else, urban renewal has dramatized our inability to provide decent housing for our low-income and middle-income families.

The search for needed relocation housing-which must be available to enable renewal to continue has exposed the two fundamental weaknesses of our housing resources: (1) our apparent inability to come up with a viable program of new housing for low- and middle-income groups; (2) as I have already mentioned, our failure to come up with the means to carry out a continuing largescale program of rehabilitation of our old housing.

It is time we took the initiative on both these problems. It is time we tried new methods, new approaches. It is time to make a decision to solve the problem with action and not talk.

To that end the U.S. Conference of Mayors has agreed to support this year legislation which would provide a demonstration middle-income housing program for the construction of 10,000 units.

The suggested program follows suggestions made by Dr. Wheaton and involves charging a variable interest rate which is set according to the family's income. We have talked about this approach for many years. We think it is time to actually test the feasibility of this approach.

In this same area, further liberalization of 221(d)3 is in order. Other approaches need to be explored, but we should try them. We should not be afraid to experiment, to test, to exhaust all possible approaches to solving this particular important problem.

In addition, we should tackle rehabilitation in exactly the same spirit. We should try all possible avenues.

Since 1954, after an exhaustive housing survey, the city of St. Louis has completed or is in the process of rehabilitating 14 neighborhood areas consisting of 2,200 acres designated by the city plan commission. The program is operated in areas where housing is generally better than a slum area, but showing definite signs of blight.

This unique program-without Federal assistance-complements our Federallocal urban renewal program.

Under our rehabilitation program 13,700 premises consisting of 34,400 dwelling units have been brought up to standards established by our housing ordinance, which was strengthened early last year. As a result of this code enforcement program, 56,400 housing violations have been abated through an orderly house-to-house inspection program. We estimate that the citizens of St. Louis have spent $7,200,000 of their own money to bring their properties up to standard.

We attribute much of the success of the St. Louis program to the public improvement features which, we believe, motivate the homeowner to spend money on his property. Under our program, the city spends approximately $500,000 per neighborhood on public improvements simultaneously with the code enforcement program because we recognize that public facilities, such as parks, streets, street lighting, and other neighborhood facilities, have deteriorated over the years as have our older residences. Thus far, the city has spent about $3 million in public funds to improve the neighborhood environment.

However, new techniques of financing for the property owner are needed for the fullest success of this type of program.

The conference of mayors is actively supporting legislation which would open 221 rehabilitation to the entire city where the city has an approved, workable program.

We also would like to have the local public agencies be able to do rehabilitation without limit on all projects. We're even ready and willing to let the LPA undertake rehabilitation work with their own work forces. We want the local agencies to have as free a rein as possible to try to make rehabilitation work.

The conference also favors having housing enforcement costs associated with urban renewal projects made eligible as part of project costs.

This would go far in bringing the manpower necessary to promote and sustain rehabilitation programs into our project areas. We believe the sustained effort which can be provided through systematic enforcement and help will go a long way toward developing a viable rehabilitation program.

These are in many respects critical times for the cities and for the urban renewal and public assistance programs.

Despite our successes, we are far from having it made.

We continue to labor under heavy fire and unfortunately few of our critics can be categorized as being constructive.

We must do a better job of selling our programs, our goals, and objectives. We must stop telling each other what we want to hear, about how good we are and how lofty are our aims.

We must continue the battle to eliminate blight and to halt its spread.

Recognizing that housing is not the entire answer to social welfare, we must devote new emphasis to human renewal.

However, we must fully understand that the redevelopment of our cities is a central element among the efforts to improve the level of the economy and to reduce poverty.

Indeed, properly drawn programs of urban renewal should develop balanced communities in which attention is given to commercial and industrial regeneration as well as to purely residential areas.

The balanced community approach would help create jobs for those whom we are housing. Such an approach will further recognize the interrelationship which must exist between purely physical renewal and human renewal.

Perhaps the ultimate climate of success for our community development programs will be provided as the public recognizes that properly planned urban renewal is a major weapon in the war against poverty.

Thank you.

Senator WILLIAMS. We have a visitor from California, Mr. William Blackfield, president of the National Association of Home Builders, and Perry E. Willits, first vice president of the association. We are honored to have you here, Mr. Blackfield.

STATEMENT OF WILLIAM BLACKFIELD, PRESIDENT, NATIONAL ASSOCIATION OF HOME BUILDERS; ACCOMPANIED BY PERRY E. WILLITS, FIRST VICE PRESIDENT, JOSEPH B. McGRATH, DIRECTOR, GOVERNMENTAL AFFAIRS DIVISION, AND HERBERT S. COLTON, COUNSEL TO THE NATIONAL ASSOCIATION OF HOME BUILDERS

Mr. BLACKFIELD. Thank you.

Senator WILLIAMS. The homebuilders have been very helpful, of course, over the years, in the development of and improvement of our housing programs.

Mr. BLACKFIELD. Mr. Chairman, I would like to introduce first, on our far left, Joseph B. McGrath, director of our governmental affairs division; on my right, Herbert S. Colton, counsel to the National Association of Home Builders; and my fellow officer, on my left, Perry E. Willits, from Miami, Fla., first vice president of NAHB. Mr. Chairman, members of the committee, my name is William Blackfield. I am a builder in the San Francisco area, as well as in Hawaii, and I am president of the National Association of Home Builders, on whose behalf I appear before you today.

Your subcommittee is of course familiar with the National Association of Home Builders and its great interest in providing homes and development in the communities for all Americans.

As a background for the legislation before you, I am pleased to report that the homebuilding industry operated at a very satisfactory level in the year 1963, and our own economists, with others as well, foresee in the year 1964 no slackening of the high rate of starts.

We are particularly pleased that with the aid of portions of the legislation enacted in 1963, we are now meeting with increasing success in the private production of homes for families of modest income.

Of particular significance is an experimental project constructed in Tulsa, Okla., under the leadership of NAHB's past president, R. G. Hughes, whom some of this subcommittee may remember. Of course, much remains to be done in marshaling the traditional ingenuity of American enterprise to provide for our less fortunate families in a time of general abundance and prosperity.

I understand the subcommittee has under consideration S. 2468 together with 21 other bills. These include a great number and wide range of important proposals. Although many of these warrant extensive discussion, to conserve the time of this subcommittee, we have set forth NAHB's position on each major subject in appendix I attached to this statement.

I shall confine myself to brief comments on some of these items which the executive committee of our association, meeting in Washington especially for that purpose last weekend, consider of prime importance.

We favor many of the sections of S. 2468 which have had the benefit of consideration and discussion over a period of time in the homebuilding industry, in Government, and among other groups interested in various aspects of homebuilding and residential finance.

We believe that many of these are necessary or desirable, as technical amendments and improvements to existing legislation, and they are required to maintain the high level of production to which I have just referred.

However, a few proposals (some of them of possibly far-reaching effect) are also included without the benefit of the thoroughgoing public consideration which we believe should be given them.

Some of these could possibly impair the effective job which we believe the homebuilding industry is currently doing in meeting its public responsibilities. We therefore have no alternative but to oppose these proposals, at least for the time being.

Specifically, our comments follow in the order in which the proposals appear in S. 2468-the principal bill before you today.

AIDS TO LOW-INCOME FAMILIES

We support two of the major provisions of S. 2468 (sec. 101 (a) and sec. 402). These would provide direct assistance to supplement the rent which certain low-income families can afford, so that they can obtain decent living accommodations. However, the total dollar amounts such a program could involve should first be determined.

AIDS TO LAND AND COMMUNITY DEVELOPMENT

The principal bill before you, S. 2468, contains a series of farreaching proposals to provide Federal loans and financial assistance for acquisition and development of land for housing in new communities and in large subdivisions.

Such assistance would be in two categories-the first in the form of loans to local governments for planning and construction of basic

utilities and community facilities, and the second as FHA mortgage insurance to land developers to encourage construction of large subdivisions and large new communities.

The first category is a series of proposals, in effect simply extending existing programs generally familiar to the Congress and to our industry. These would lend Federal help in the financing and construction of basic public utilities and community facilities-the essential first step in land development.

We believe Federal assistance of this type is necessary, sound, and will increase the supply of buildable land, particularly in local communities which find themselves simply unable to provide utilities and facilities as rapidly as community growth requires. We therefore support sections 310 to 313 inclusive and 601 to 614 inclusive.

We suggest further that serious consideration be given to developing a system of insurance of the obligations of local governmental bodies, issued to provide such facilities, as a means of providing equally effective assistance at considerably less expenditure of Federal funds.

The second series of proposals; i.e., FHA insurance for the acquisition and development of land in large subdivisions and new communities, is not fully understood in our industry. They were first publicly presented January 27-just a month ago-as part of a complex bill containing some 59 separate important items.

We submit the brief period of a month has been utterly insufficient for thorough study of these proposals and intelligent conclusions as to their impact. For this reason, we must oppose section 201 of the bill at this time, and urge the Congress to postpone action on this section until this far-reaching proposal can be thoroughly studied and discussed.

In this connection, as this committee may recall, 2 years ago our association suggested a much more modest proposal for insurance of loans for land development. This did not go nearly as far as proposed section 201 in that it covered only improvements, and not acquisition. It did not make loans eligible for FNMA purchase, and did not place the Federal credit behind the vast undertaking of the construction of an entire new community.

As your committee is undoubtedly aware, even the restricted proposal of 1961 evoked almost equally divided opinion within our industry as to whether it would inflate the price of land and in turn the cost of housing to the ultimate buyer. We were also divided as to its effect on the typical small businessman-builder, whom it was primarily intended to help. The considerably expanded proposals in the bill are, of course, even more highly controversial at this time.

It should be noted, in any event, our opinion is unanimous that the Davis-Bacon prevailing wage requirements included in section 202 would make the entire proposal unworkable. We are agreed that this "prevailing wage" provision, by the unrealistically rigid conditions, the burdensome reporting, and in many cases the artificially high wage rates which it requires, would substantially increase the cost of land improvement and of structures on the land. In effect, it would for the first time extend the "prevailing wage" requirement to individual homes for sale.