Of course, one way of correcting this is to change the requirement for workable program to one whereby FHA's only requirement is that the workable program be in effect at the time of filing of the application.

Senator DOUGLAS. Would you repeat that?

Mr. STALFORD. I say one way we can correct the problem that sponsors are faced with is that if we change the legislative requirement that the workable program be in existence at the time the FHA application is filed with the fee, rather than require that the workable program be in existence at the time FHA issues its commitment.

Senator CLARK. Of course, that would be kind of self-defeating, would it not, because here would be a situation where they had a workable program and it was not working and therefore it had been canceled or certification had not been renewed, and yet you go ahead and give it more money for middle income housing.

I think there is a real problem here. I have thought the workable program was an excellent tool to require overall programing and planning by a community as a condition to getting Federal aid for its housing problems.

But the problem which you raise disturbs me very much. I think we are kind of caught on the horns of a dilemma.

Mr. STALFORD. Exactly, sir. I wish to repeat, sir, we endorse the principle of workable program for our communities. The question is whether it is proper to include that requirement for eligibility under 221 (d) (3). It is a requirement for public housing and, of course, urban renewal. But at least if that change could be made, Senators, to change the requirement to the workable program being in effect at the time of filing of the application, this would at least tell the sponsor that he is assured of getting his commitment at the time FHA completes its processing.

Because the sponsor by itself is not influential enough, I am afraid, to induce a community to move along faster to get their recertification or to comply with the requirements of recertification. Very often

Senator CLARK. Of course, as you say, when that certification expires they do not get any more urban renewal or public housing, do they?

Mr. STALFORD. That is correct.

Now, in keeping in mind that often the workable program will expire and the community will endeavor to obtain recertification but there may be a lapse of many, many months until that is accomplished, the sponsor is caught whereby he cannot proceed. He has paid for land and invested in FHA fees and full sets of architectural drawings and other expenses that at that point are quite voluminous. Senator CLARK. Anything else, Senator?

Senator DOUGLAS. No.

Senator CLARK. Thank you very much, gentlemen. We appreciate Mr. STAFFORD. Thank you for the opportunity.

(Governor Brown's prepared statement and addendum follow :)

STATEMENT OF GOV. EDMUND G. BROWN, OF CALIFORNIA

Mr. Chairman and members of the Subcommittee on Housing, I appreciate this opportunity to present my views on the Housing and Community Development Act of 1964, which I consider one of the most comprehensive and important proposals in the housing field ever advanced.

I offer my wholehearted support of the measure now before you as the very minimum that should and must be done without delay.

As the largest State in the Nation, the largest growing and the State which last year built one out of every five dwelling units in the Nation, we have a significant interest in this legislation.

Each day, 1,000 persons cross the border into California to make their homes. Each day another thousand babies are born in the State. Today, we have 18 million population. By 1980, there will be 28 million persons living in the State. To meet this population explosion, and the greatest migration in this history of man, we must build 250,000 new homes annually and 10,000 classrooms; we are building a 12,000-mile freeway-highway system at a cost of $10.5 billion and we have under construction the world's largest water development project at a cost of $1.75 billion.

To meet our housing needs from population growth and replacement, we must build 5 million new dwelling units by 1980.

At our present building rate, enormous as it is, we are not meeting those long-range needs. We are falling behind.

And we are falling behind principally for this reason: Unlike other parts of the country, we do not have a large supply of older housing which provides most of the shelter for low-income families.

Nearly half of the housing in the United States today is more than 30 years old. Not so in California. Nearly half of our housing is under 10 years of age. Only about one-fourth of it was built more than 30 years ago and most of it is already occupied by low-income families.

Those statistics mean that California will require over the next 17 years staggering amounts of new housing-an estimated 5 million new homes and apartments-priced over a wide enough range to fall within the reach of people of all incomes.

No existing program, State or Federal or private, comes close to meeting that requirement.

Even today, one-third of the families in Los Angeles and San Francisco do not earn enough to buy the lowest priced houses on the California market. If present trends continue, their ability to pay will go down, not up. The cost of living in general has risen 33 percent since 1950. The cost of housing has risen 42 percent.

More than 60 percent of California's elderly couples, widows and widowers, live on incomes of $2,000 or less. The rents they can pay are meager and so are the quarters their rent payments buy.

Moreover, older housing in California is being destroyed at the rate of some 43,000 units a year by flood, fire, freeways, or Federal projects. Urban renewal alone has displaced 6,045 families and 5,975 single persons. Freeways force an average of 5,000 families to move each year.

In 1961, I appointed a group of distinguished Californians with broad experience in housing to take stock of our housing programs, and recommend action to solve our problems.

The report of the Governor's Advisory Commission on Housing Problems is now complete. I hope you will study it. I believe it is the most comprehensive housing study ever completed by a State.

The commission found, in general, that California is still relatively "unspoiled and unslummed." It found that housing conditions in California have improved over the past decade and that the quality of housing is unequaled in the Nation.

But it also reported that the foundation on which we must build during the coming 17 years is shaky in these areas:

Racial discrimination and limited income force most members of minority groups to live in the center of cities while growth industries are locating more and more in the suburbs and beyond. Those who can least afford it, therefore, must travel farthest to find work with a future.

Some 700,000 California dwellings, or about 13.5 percent of the total, lack plumbing facilities or are so decayed that they fail to measure up to Federal standards as "sound" housing.

Nearly 400,000 Californians are forced to pay 35 percent or more of their income for rent because the supply of low-cost housing is too limited to meet the demand.

The elderly, minorities, farmworkers, large families with low incomes and families displaced by public projects have virtually no access to Government programs designed to foster and facilitate homeownership.

While there is no land famine in California, there is land hunger in areas where industry is concentrated. Land prices in parts of the State have tripled in a decade.

In summary, the commission said the most pressing needs in California are for new Federal aid programs and broader use of existing Federal programs. Congress has directed American policy toward a "decent home and a suitable environment for every American family."

But, the commission pointed out, the current Federal effort is "inadequate to California's needs and largely irrelevant to its situation."

The report said, in part:

"While the urban renewal program is needed by California's older cities, its main concern should be to prevent the slums before they form. California's communities, in short, require new tools and new techniques for land development and housing of all kinds to serve the needs of the future.

"Federal mortgage insurance can only help those who can pay their way in new houses but provides little for those who cannot. If California is to have 250,000 new houses built annually, they must be in all cost categories and no Federal program exists to achieve this. The public housing program is small, ailing, defective, and applicable only to older cities. No adequate aids exist for the elderly poor, some of whom are even too poor to rent public housing; for the worker earning $5,000 a year or less; for the agricultural worker and for the low-income group generally.

"If we have learned anything from the history of cities in America and Europe, it is that a city must provide for people from all walks of life. This is a city by its very definition and organization.

"If this lesson is to be carried over to California's new communities in which most of the 5 million new homes will be built, California's new cities must provide a place for the settlement of industries and of all people dependent on them and for the secondary services connected with city life. It must provide for those formations before the fact, not after, if these cities are to grow and remain sound in the long run.

"In failing to deal with the problems of a mass migration and the development of new communities on its still virgin land, California's new areas will continue fortuitous victims of acquisition by developers of sites, mushrooming one-class enclaves beset by mounting transportation problems, piecemeal developments and excessive upkeep costs of local governments.

"California's main problems are to keep drawing enough credit from the rest of the country to build housing for those who can afford the market prices, and to stimulate a stock of housing at all levels of cost for others, while simultaneously improving existing deficiencies in its existing housing plant.

"This is a gigantic task and manifestly too much for the State to cope with through its own resources. No State-sponsored program, however well intentioned, can hope to meet more than a fraction of the need. The Federal housing program, therefore, is one of California's main concerns."

To carry on the work of the commission, this year I have introduced before a special session of the legislature a bill to create a State office of housing and community development to promote, develop and coordinate programs which will expand the supply of decent housing available to all Californians.

This new office will enable California to take full advantage of all past and new Federal housing programs.

For example, I cite title VII of H.R. 9751 on Federal-State training programs. This would provide $25 million in matching grants to the States for training and research in community development. The most directly affected programs would be in city and regional planning, public administration, transportation engineering, real estate, and urban economics.

I am in full and enthusiastic support of this section of the housing bill. The State for many years has had a vigorous planning program to meet the explosive urbanization process which is taking place in our State. We have had major inquiries into housing and metropolitan problems. At the last session of the legislature we created new procedures to review local incorporation and annexations and to encourage regional planning and community development. The University of California has established a new institute of urban and regional development and a center for planning and development research within the last year; it has redirected and invigorated its institute for governmental studies and center for real estate and urban economics.

Despite these efforts, there remain acute shortages of skilled personnel in local government and in the professions directly concerned with community development. And not nearly enough long-range planning research is being

done.

efforts.

We believe title VII will vitally assist us in our research and planning

The next step is to convert research and planning into actual projects. Title X of the proposed housing act will assist us in that effort by providing FHA mortgage insurance of loans to finance the cost of land development (1) for residential and related uses in new subdivisions and (2) for developing sites for entirely new communities.

Finally, I want to call your attention to what probably is the most urgent problem of all-housing for the agricultural worker and farm families.

For the farmworker truly is America's forgotten man. No one lives under more pitiful, degrading conditions. A survey of six agricultural communities

by our State division of housing shows that:

More than 80 percent of farmworker families live in dwellings which violate standards of health, safety, and comfort;

Nearly 65 percent of the dwellings occupied by general fieldworkers are dilapidated or deteriorated;

Pit privies still serve 33 percent of the dwellings occupied by general fieldworkers;

Thirty percent of the dwellings have no bathing facilities and 25 percent lack even a kitchen sink with running water.

And because he is so poorly paid, he cannot afford to build or rent better homes. Nor can he improve the slum dwelling he already is living in. Do I need to point out that these rural slums are trap ghettoes which breed crime, juvenile delinquency, disease, and illiteracy?

Somewhere we must begin to break the vicious circle which the rural and urban slum dweller finds himself. A decent home will give him and his family hope and a new sense of decency. It will infuse him with aspiration, without which only despair remains.

There is a special urgency for farm housing this year. The expiration of Public Law 78-the Mexican bracero program-in December of this year means that in 1965 California and other States will have to rely completely on domestic farm labor. Today we do not have enough housing available for workers with families. Nor will growers invest the enormous sums needed to build such housing.

A State senate factfinding committee on labor and welfare has been conducting hearings throughout the State on the subject of farm labor and related matters. Representatives of the grower associations and labor organizations both have testified before the committee to the need for low-cost housing for farm labor and the inability to provide it without low-interest, long-term loans. I believe there is a need for at least two kinds of housing.

First, permanent, off-the-farm homes for the farmworker family who wants and needs a year-round home. This is the most desirable situation for the farmworker and it is the one public policy we must strive for.

Second, temporary housing for these "migrants" who are needed for certain farm operations in certain areas for short periods of time. This could be built and operated by local housing authorities or the State. In any case, however, whoever builds it will need Federal assistance.

There may be other alternatives as well, although I do not favor one that would create "company towns," with the worker completely at the mercy of the grower for housing. American experience with that system shows a long, bitter struggle by the worker to free himself. The farmworker has little enough freedom of movement. He needs more, not less.

As your hearings show, there is no single answer to the housing problems of our Nation. They are rooted in poverty and an attack on housing problems should be coordinated with Federal and State programs. President Johnson has declared "unconditional war" on poverty. Let us marshal the first assault by passing a comprehensive housing act.

ADDENDUM TO THE STATEMENT OF Gov. EDMUND G. BROWN OF CALIFORNIA

LEGISLATIVE SUGGESTIONS

(Prepared by Alfred D. Stalford, Special Assistant to the Governor on Housing)

1. Urban renewal

(a) Local noncash grant-in-aid credits.-Problem: Facilities of communitywide service serving an urban renewal project area should not be excluded for

credit as local noncash grants-in-aid as is presently done through administrative procedures. Although this is a problem for large cities, it is particularly unfair to smaller communities in that their local credits are reduced in connection with the urban renewal program.

The urban renewal program can be used effectively to encourage the development of rapid transportations systems. Before the Urban Renewal Administration will permit adequate local noncash grants-in-aid for rapid transit improvements, it will be necessary for Congress to provide guidelines to the Housing and Home Finance Agency on the liberalization of providing such credits. Through increasing local credits for rapid transit systems, the Federal Government would be providing an additional incentive to localities to develop and finance such systems in their communities and adjoining areas. The device already used in the Federal open space program could be used to provide a higher degree of credit to localities in which the development of rapid transit lines is carried out on a metropolitan basis.

Solution: The following is proposed language for amending section 110 (d) of the Housing Act of 1949, as amended, to liberalize the noncash grants-in-aid for rapid transit lines:

"Notwithstanding any other provision or limitation of this subsection, the cost of any mass transit facility serving an urban area in an appreciable degree shall, subject to the third proviso of this subsection, be eligible for inclusion as a local grant-in-aid to the extent that the cost of such facility is determined by the Administrator to be proportionate to the approximate degree of benefit of such facility to the urban renewal area."

(b) Problem: Under the Housing Act of 1956, section 110 (d) of title I of the Housing Act of 1949 was amended to permit a tax credit to be considered as a part of local cash grants-in-aid where land owned by a local public agency in an urban renewal area was not subject to taxes and no payment in lieu of taxes was made with respect to it. Under existing procedures, however, and a ruling of the Bureau of the Budget, no grant-in-aid credit is given with respect to such taxes or payments in lieu of taxes after improvements on property acquired by the local public agency have been removed. This administrative ruling has had several undesirable results. It has encouraged communities to delay the demolition of vacated buildings which become fire, health, and safety hazards. Communities not receiving tax payments or credits for taxes on cleared land not yet developed have tended to delay the undertaking of additional projects. This has resulted in an end-on-end approach to urban renewal projects where an overlapping program would be more appropriate. Local redevelopment agencies across the country suffer from the criticism of taking land off the tax rolls. This is an argument used by the opposition and those who will not look ahead to the long-range tax benefits of the urban renewal program.

Solution: It would be extremely helpful if the committee report showed congressional support for continuing credits for tax payments and payments in lieu of taxes on cleared land held by redevelopment agencies.

(c) Early land acquisition.-Problem: The Housing Act of 1949, as amended, provides for early land acquisition loans to communities in order to enable them to purchase land in project areas under planning prior to the execution of the project. However, the administrative provisions of these loans are extremely cumbersome and have proven unworkable in practically all communities of the country. The principal reason for the lack of use of these loans lies with the legal and fiscal problems at the community level of guaranteeing the Federal loan for early land acquisition purposes. It is especially desirable for localities to be able to purchase land in proposed project areas during the 18 to 24 month average period required for planning a project. Such land could be used for demonstration purposes and especially for constructing housing for families or single persons of moderate income in order to allay the fears of residents about forthcoming relocation. It would be desirable to provide a legislative amendment which would make available to communities Federal loans not requiring local guarantees in any form for early land acquisition during the planning stage of projects. In order to insure that the provisions are used for basically a demonstration and experimental program and would not be abused by localities, the Federal Government might provide such loans up to a maximum of perhaps 7 percent of the total estimated acquisition costs of each project.

Solution: We would propose adding the following amendment to the Housing Act of 1949, as amended, as the second proviso of section 102(a):

"Provided further, that the Administrator may, when the purpose of the proposed acquisition is to provide a housing resource for families and individuals

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