Our problem, Mr. Keith, is that we have eight witnesses this morning. You are the third. The Senate is voting at 12:30 on the tax bill, and we would like to do what we can to expedite the hearing without in any way affecting the proper presentation of your state

ment.

STATEMENT OF NATHANIEL KEITH, PRESIDENT, NATIONAL HOUSING CONFERENCE

Mr. KEITH. Thank you very much. I will be happy to sumarize my statement.

Senator CLARK. Mr. Keith, Senator Douglas has raised a question perhaps you would answer for the record. Are you executive director as well as president of the National Housing Conference?

Mr. KEITH. NO. I am the president, Senator.

Senator CLARK. You are a citizen and not a slave?

Mr. KEITH. That is correct.

Senator, with your permission, I would also like to submit for the record at this hearing the resolutions pertaining to legislation which were adopted at the 33d Annual Convention of the National Housing Conference which just adjourned yesterday.

Senator CLARK. That will be done.

Mr. KEITH. I think they have some pertinency.

Mr. Chairman, we are happy to have this opportunity to comment on the important legislation that is now before this subcommittee and the Congress. We are confident that the members of this subcommittee recognize as deeply as our organization does the fact that we are at a very critical point in the housing, urban renewal, community development programs, for two reasons:

No. 1, the available funds for additional low-rent public housing projects, for which there is increasing demand from communities throughout the country, are exhausted at this point with respect to any new projects.

No. 2, the urban renewal capital grant funds which are equally vital to continued progress will be exhausted in the very near future. Third, the third point of urgency in our opinion is that, notwithstanding the notable progress which has been made in recent years, particularly since the passage of the Housing Act of 1961, there still remain large gaps in our programs in relation to pressing national needs for housing for the revitalization of rundown urban areas, for community facilities, and for assisting the sound development of suburban areas.

We welcome the forcefulness and scope of President Johnson's special message to Congress on January 27. At the same time, we feel that the recommendations contained in the administration bill, the proposed Housing and Community Development Act of 1964, fall short in a number of important respects of what in our opinion will be necessary not only to maintain momentum in this very crucial field but also to begin to close the additional gaps.

At the same time we feel that by and large the proposals contained in the administration bill are essential to maintaining momentum and further progress, and as a minimum we strongly support the enactment of that bill in general. We have some reservations on a few of the items.

Senator CLARK. Have you had a look at S. 2031?

Mr. KEITH. Yes, I have, Senator.

Senator CLARK. As you go along, would you indicate to what extent you agree or disagree with this bill?

Mr. KEITH. Yes, I certainly will.

With respect to the proposed authorization for low-rent public housing as contained in the administration bill, as you know, this calls for approximately 35,000 units of new public housing per year for 4 years, 15,000 units of rehabilitated housing for 4 years, and 10,000 units a year for financing and leasing by housing authorities of privately owned units for use as low-rent public housing, a total of 60,000 units a year for 4 years.

It is our position, Mr. Chairman, that in relation to the demands from communities the volume proposed in the administration bill in our opinion is not adequate to meet the expanding need for public housing.

Our recommendation would be financing for 100,000 units of new public housing per year in addition to whatever volume could be soundly produced through the rehabilitation of existing structures or, where necessary, the leasing.

Senator CLARK. What do you think of this idea of giving a subsidy to the individual tenant to enable him to rent a privately owned house in a block or community?

Mr. KEITH. Well, the National Housing Conference has, in effect, been recommending the equivalent of that with two basic objectives in mind, one to extend the use of the below-market interest rate program for families of low or middle income.

We support the 221(d) (3) program. We do not think it goes far enough. We feel that additional assistance is needed to bring in the families and the individuals below the income level that 221 (d) (3)

can serve.

Senator CLARK. Right at the public housing level, what I am fishing for an answer to is this: Is it not pretty clear to you by now that we are never, never, never going to be able to build enough new public housing to take care of the need, and therefore we have to do something else, and why is this not a good way to start?

Mr. KEITH. That is certainly correct, Senator. And we do recommend in our testimony that over and above the continuation of the present low-rent public housing program, and, where feasible, the use of rehabilitation and leasing, there be additional methods of housing assistance to low-income families such as low-interest loans and/or grants for rehabilitation of private homes, participation in mutual help programs, and cooperation with nonprofit philanthropic organizations should be actively explored and definite recommendations formulated.

Senator CLARK. It seems to me this is more a renting problem than an ownership problem. Many of the people are ambulatory. Many do not have the financial background to buy a house.

Mr. KEITH. That is correct.

Senator CLARK. But public housing is really rental housing, is it not? Mr. KEITH. Oh, yes.

Well, consequently, our recommendation on public housing calls for higher volume and the exploration of new methods of broadening the the program out.

We quite agree, since we are talking in terms of about 9 million families whose incomes are within the public housing range, that it is not realistic to anticipate that we can solve that whole problem through new construction alone.

Senator CLARK. What do you think about the criticism we often hear that public housing does not really take care of the very lowest income families? This sort of ties in, I guess with the war against poverty.

Mr. KEITH. Well, it is true, Senator, that under the financing formula for public housing the real poverty-stricken lowest level of families with little or no income can only be accommodated in public housing, even at the minimum rents, if there is either welfare payment from the community or some other additional assistance.

Senator CLARK. What has been your experience with respect to welfare recipients, those on public assistance, as public housing tenants? There are qiute a lot of them, are there not?

Mr. KEITH. Yes. There are quite a substantial number.
Senator CLARK. Does this not work out reasonably well?

Mr. KEITH. Well, I think on the whole it has, Senator I mean there have been cases of problems resulting from the welfare client group of

tenants.

As a matter of broad policy, it is our feeling it would be a mistake to, in effect, use public housing solely as a device to take care of families with extremely low income, but there should be a mix from the standpoint of the community as well as the families themselves.

Now, there is a provision, as you know, or a proposal in the administration bill with respect to displaced families of very low income. This is families displaced from urban renewal areas.

Senator CLARK. You mean displaced by urban renewal?

Mr. KEITH. That is right. And under which the local housing authorities would receive a supplemental subsidy of $120 per family per year to enable them to accommodate families that cannot even afford the minimum rent in public housing. And we support that proposal.

Our urban renewal proposals themselves in the administration bill, again we feel-and I think this is demonstrated by the record-that the proposed increase in capital grant authorization for urban renewal of $1.4 billion, if this is to be considered a 2-year authorization, which the statute does not say but which seems to be the intent of the legislative history, is substantially below the current rate of demand for qualified urban renewal projects from communities.

Senator CLARK. În my opinion, it is completely inadequate. S. 2031 calls for $1 billion a year for 3 years.

Mr. KEITH. That is right.

Senator CLARK. I would like your comments on that. I am not sure it is enough.

Mr. KEITH. Well, what we propose and we call attention to that proposal in S. 2031, Senator-is that we feel that the rate of a billion dollars a year is adequate at this time.

Now, the NHC recommends that the authorization be at that rate for 5 years.

Senator CLARK. I agree with you, but there you have practical legislative problems in the light of the way these authorizations are always misrepresented, always, both by Members of the Congress and the

press. They will come out with a story of a "$5 billion bill," and down in the fine print you will get a billion dollars a year. So you have to defend against that some way.

My thought was 3 years was about the most we could hope for.

Mr. KEITH. Well, we would certainly support the proposal in S.

2031.

Senator CLARK. What is your experience, Mr. Keith, with the administration of the urban renewal authorization by the agency? Do you think there has at times been a tendency, perhaps inevitable, to hold back the grant of authorization because of the fear that the authorization is going to run out? Do they slow it down? Is this ceiling a very real deterrent to the granting and the putting under construction of needed urban renewal programs?

Mr. KEITH. Well, I would certainly agree with that, Senator. I think I would say this: It is certainly our impression with respect to the present administration of URA that there is no desire on their part to slow down or ration. Now, there are, as I am sure the committee recognizes, other pressures from the Bureau of the Budget and so on which tend toward the rationing or scheduling system to which the administrative officials have to respond.

Senator CLARK. Now, as a matter of administration, you watch this pretty carefully. Do you think they could efficiently process at a higher rate than a billion dollars a year these requests for urban renewal? That is giving me some concern.

Mr. KEITH. Well, I would have some question that they could at this point without a further simplification of their processing procedures and without some additional competent staff. They have a rather limited staff, and I think——

Senator CLARK. Do you think the bottlenecks can be overcome with more and abler staff, assisted with some knocking out of redtape? On that redtape business, this is what we always holler about, you know. It is the easiest thing in the world to crucify an administrator on the ground he is a slave to redtape. And sometimes if we do not have some administrative procedures the taxpayer gets absolutely murdered, and the next thing you know you have a fraud case.

What is your experience with respect to the existence or nonexistence of administrative procedures in the agency which slow down unnecessarily the administration of the program?

Mr. KEITH. Well, I would say that in my opinion that there is still too much procedure in the URA program. Now, there is also variation between various regional offices, I mean not as to national policies but as to the way and the speed with which they apply them.

Senator CLARK. Do you think the program is too highly centralized? Mr. KEITH. Well, there has been a real effort to decentralize it, and most of the decisionmaking now is in the regional offices rather than in Washington as far as specific projects are concerned.

In this same connection, Mayor Cavanagh, of Detroit, addressed our convention and made quite a strong statement on just this point. He also, incidentally, supported the billion dollars a year.

But in that same connection of rationing or scheduling, in our statement we recommend that in the event that only $1.4 billion is actually recommended by this committee-and we think it should be more than that-but if that is the case, we would strongly urge that

the committee in the legislative history make it clear that it is the intent of this committee that there not be a rationing system, that eligible applications be processed in order or receipt.

Senator CLARK. Get it out as soon as they can get it out?

Mr. KEITH. That is right. And that the need for additional authorization be reexamined next year.

Also in our testimony, Senator, we recommend the provision in S. 2031 with respect to liberalized and more flexible provisions in regard to central business district urban renewal. We feel that this is a very needed step.

Senator CLARK. Let me ask you about that. That is a matter which Senator Douglas, who has been on this committee a good deal longer than I have, has had some real doubts about. His fear has been that when you liberalize, as S. 2031 does, the ability to place under urban renewal grants a central business district, you are really departing from the greater need which is that we ought to be providing housing, safe and sanitary housing, in accordance with the provisions of the old Taft Act-a decent home for every American family-and that we get off on another line when we say: "Well, sure, there is a lot of 'skid row,' there is a lot of obsolete old factory buildings up in New England and elsewhere, and you cannot get people to come and live in a community if they do not have a decent place to work."

I am in somewhat of a dilemma about this myself. I wish you would let me have the benefit of your thinking.

Mr. KEITH. Well, certainly our organization is a strong advocate of using the urban renewal powers to the maximum extent possible for the development of sound new housing development where the location is appropriate, and so on. At the same time, we are certainly impressed by the need of cities for more flexible assistance for the revitalization of central business districts.

Now, this does not mean that these programs would not include housing. In fact, to an increasing extent the plans for renewal of central business district areas, in addition to aspects that will serve the commercial and the public activities of the community, are including private and/or public housing of a type suited for that kind of a central location.

Senator CLARK. Let me put it this way. I have been viewing this thing as a matter of priorities. that the act said we should take care of residential housing. Then these exceptions have crept in with respect to commercial, industrial, skid row, and the like. We have gradually been increasing the percentage of Federal assistance for them.

Now, I would like your opinion. I agree it should be a mix, because you just cannot redevelop a community unless you do something about the central business district. But in your judgment is the mix suggested by S. 2031 about right?

Mr. KEITH. Well, I would say so, Senator. This would still leave the major concentration on

Senator CLARK. On residential?

Mr. KEITH. On residential development.

Senator, I wish you would let me know any time you think time is pressing.

Senator CLARK. Well, I have extended you more than I intended, and I am going to try to shut up now and let you finish.