"The second obstacle is the tremendously high cost. The acquisition costs to a private developer would often reflect inflated, speculative values. They would also include the costs of existing structures which, though deteriorating and obsolete, do have an economic value that becomes a significant item of cost when they are demolished to make way for new buildings.

"The answer to these obstacles provided by Congress was title I of the Housing Act of 1949. Briefly, it provided a system of loans and grants and technical assistance to communities to help them undertake urban renewal.

"By enacting title I, Congress clearly indicated that the clearance and redevelopment of blighted areas was a national objective, that private enterprise could not do it alone, that public power to assemble land was necessary, and that the public costs should be shared by Federal and local governments. In providing for a Federal sharing in the costs, the Congress recognized two hard facts. First, our cities were financially strapped-as they continue to be-by the squeeze between rising municipal expenditures and limited taxable resources. Secondly, and I think equally important, the Congress acknowledged that urban blight was a national problem and that the afflicted cities could not be expected to solve it alone. The human, social, and economic costs of slums spread far beyond municipal boundaries.

"At the outset, urban renewal was, by law, oriented toward residential renewal. However, in 1954 Congress made an important change. It authorized the use of 10 percent of Federal urban renewal grant funds for nonresidential projects. This was gradually increased to 30 percent in the Housing Act of 1961.

"This increase in the authority to undertake nonresidential projects illustrates an important trend in the urban renewal process. It has reflected a growing awareness of the importance of using renewal to revitalize the economic base and the taxable resources of cities, large and small. It has recognized the contribution of urban renewal in creating better job opportunities as well as in improving housing conditions. These two objectives of renewal are interdependent. "Now, where do we stand today? About 1,500 urban renewal projects are being carried out by nearly 750 cities. Of the original $4 billion authorized by Congress for urban renewal grants, all but about $200 million has been committed. "We are now beginning to see some substantial results from the urban renewal program. About 30 square miles of land have been acquired and approximately 10 square miles have been committed to redevolpers. A good deal of construction has already taken place.

"You can see the results in such places as Lake Meadows and Prairie Shores in Chicago, the apartment houses and shopping center and townhouses in Southwest Washington, the impressive office buildings in Constitution Plaza in Hartford, the shopping center adjacent to downtown Lowell, Mass., the new downtown motel in Norfolk, the stunning office building in Charles Center in downtown Baltimore, the sports arena with the movable roof in downtown Pittsburgh, the new downtown complex in New Haven, to mention a very few.

"But let's get down to cases. One of the basic worries of cities is how to increase their diminishing tax bases. With the flight of middle and upper income families to the suburbs, followed to some degree by trade and industry, cities have been squeezed between a rising volume of welfare services and decreasing tax revenues. One of the objectives of urban renewal has always been to sustain and increase the capacity of cities to meet these rising needs-and its impact thus far upon taxable values is noteworthy. Significant increases are already evident. After redevelopment, assessed values are averaging more than five times the values before redevelopment.

"For example:

"The redevelopment of Southwest Washington, D.C., is expected to produce about $4.8 million annually in taxes as compared to about $600,000 previously, an increase of eight times in annual tax revenue.

"The Gratiot project in Detroit resulted in taxes increasing from $70,000 before redevelopment to $512,000 after, and this occurred despite a 31-percent decrease in the taxable land area.

"Mayor Richard J. Daley, of Chicago, has stated that the annual tax revenues from 27 redevelopment projects in his city are expected to increase from $2.3 million to $4.8 million.

"Calexico, Calif., was the first city in that State to complete an urban renewal project. Before redevelopment, the 21-acre project paid $4,400 annually in property taxes. According to our latest information, the same area is now paying approximately $16,400.

"Prior to redevelopment, annual taxes on the properties in the Norfolk, Va., downtown project were $165,650. It is estimated that when redevelopment is completed, the annual taxes will amount to $375,000.

"The Clinton Park project in Oakland, Calif., a rehabilitation and conservation project, resulted in nearly $7 million worth of new construction, and tax revenues from the project area rose from $49,000 to $195,000 upon completion. "These tax revenue increases were obtained directly from land and improvements within the urban renewal project areas. It is our experience that urban renewal also generates new investment outside the project area-particularly the fringes and that this too results in higher assessed valuations and tax levies. However, as yet we have no way of measuring this increase. It is also significant that the tax revenue increases occurred despite the fact that in most of these projects urban renewal resulted also in an increase in the proportion of tax-exempt land-parks, playgrounds, and so on-in the redeveloped areas.

"Where do such tax revenues come from? For the most part, from private enterprise. An article in a recent issue of the Wall Street Journal describes how various communities are utilizing urban renewal to retain older industries and attract new ones. The article states, for example, ** cities have recognized that companies can't be kept in obsolete, cramped plant they have outgrown, but must be helped to find new land on which they can put up roomier and more modern buildings. * *To get the land, many cities have begun federally assisted urban renewal projects.' The article goes on to tell how businessmen in various cities are teaming up with their local officials to develop new more efficient sites.

"With all of this new construction, employment goes hand in hand * * * employment in the construction of the new buildings, and employment generated by the new enterprises.

"Let's take a small town-Morristown, Tenn. The Morristown Chamber of Commerce has issued an attractive little leaflet on the benefits of urban renewal in its own community. It quotes the president of a local freight line as saying that, since its move into the urban renewal project area, 'volume of outbound traffic has increased some 43 percent over the same period of 1961.'

"It quotes the owner of a chicken-processing plant as saying, 'When we have relocated in our new plant in the urban renewal area we will increase our chicken-processing operation from 4,800 to 9,600 birds per hour. This increased production should provide jobs for 150 additional Morristown citizens.'

"The chamber of commerce leaflet also states that more than $200,000 in payrolls has already been engendered by urban renewal in Morristown.

"I could go on and cite numerous other instances of economic growth stimulated by urban renewal, but I think you have the point.

"These are visible evidences of what urban renewal has accomplished in the way of rebuilding. As I have indicated, urban renewal also has cleared many square miles of slums and blighted areas and is also in the process of rehabilitating a good many more square miles of housing that is still salvable. Urban renewal has also relocated more than 125,000 families into decent, safe, and sanitary housing. In effect, urban renewal has become in this respect a program of rehousing families from slum and blighted areas into standard housing.

"When you look at this record of accomplishment and the prospects for the future you can understand why President Johnson, in his recent message to Congress on housing and community development, said, 'The Federal program of urban renewal is today our principal instrument for restoring the hope and renewing the vitality of our older cities and wornout neighborhoods.'

"So much for the physical and social accomplishments of the program. Now I would like to emphasize one of the philosophie concepts of urban renewal. That is, the reliance upon private enterprise for the rebuilding process as one of the most important aspects. It is a partnership between the city and the private entrepreneur to rebuild the city.

"This is a new kind of public-private relationship. It requires the closest kind of collaboration and the closest kind of understanding on the part of each. On the one hand, the public-the city government-must understand that if private enterprise is to participate, private enterprise must be able to make a reasonable profit.

"Obviously, private enterprise cannot and will not participate if it cannot make a profit.

"On the other hand, the private enterprise representative must also recognize that urban renewal is a public program in which public funds are being used

to achieve public objectives. The renewal plan as adopted by the city is a statement of the city's public objectives in the rebuilding of a particular area. Private enterprise must therefore recognize that it must subject itself to the carrying out of these public objectives. Hence, it must be sympathetic to and understanding of these public objectives.

"How has business responded to these opportunities and challenges of rebuilding and revitalizing our cities through urban renewal? I have given you some instances, but I believe it would be well to probe a little deeper.

"Today, the great majority of cities with urban renewal programs have the support of their local chambers of commerce or other chief business organizations. In some cities the chamber has been a prime mover in the program, in others it has been an important support factor. In still others, a special organization, created with the blessing of the chamber, has been the urban renewal catalyst.

"We find chamber support in the old cities of the East, the small towns everywhere, the vigorous Great Lakes cities like Rochester, the newer cities of the west coast-cities all across our great land. Some examples are:

"Boston: Where the chamber raised the money to pay Victor Gruen $150,000 to develop a downtown plan, with the idea that ultimately an urban renewal project will implement the plan. The chamber also financed some studies of the deteriorating waterfront area through a nonprofit corporation sponsored by the chamber.

"Providence: Through the chamber itself, as well as a number of other entities organized by chamber members, the city's redevelopment program has been assisted immeasurably.

"Hartford: When the original plan for the redevelopment of Constitution Plaza bogged down, it was the chamber of commerce that took an active role in the negotiations that eventually brought about the Travelers Insurance sponsorship.

"Philadelphia: The chamber of commerce has actively supported the local renewal program and has worked closely with other groups in various aspects of the city's overall redevelopment program. This includes such independent action groups as the Philadelphia Industrial Development Corp., the Greater Philadelphia Movement, and the Old Philadelphia Corp. Many of the members and officers of the chamber are among the leaders of these groups. The chamber has also encouraged and stimulated the efforts of the West Philadelphia Corp., in its program to upgrade the western section of the city.

"Newark: As in Hartford, the chamber was a prime force in inducing PruIdential and Mutual Benefit Life not to move from Newark, but to get behind renewal efforts. As a result, Newark has seen a halt in the exodus of business and population, and for the first time in a generation, the ever-spiralling real estate tax rate has been stabilized. The chamber has issued a series of reports on the program.

"Washington and Little Rock: Both cities have active downtown progress groups. In Little Rock the movement has been actively supported by the chamber of commerce, and in Washington by the board of trade.

"Atlanta's Chamber of Commerce has been one of the most vocal advocates of urban renewal of any such group in the United States. Its monthly magazine has reported periodically on the status of the program and its benefits.

"San Antonio has strong support for urban renewal from its chamber. A subsidiary of the chamber is advocating a 'HemisFair' to be established in an urban renewal project.

"Woodbridge, N.J.: One of the first communities in the country to undertake a community renewal program in advance of any project activity, Woodbridge experienced a tremendous growth in recent years. One of the largest townships in the State, it is really a collection of loosely knit neighborhoods. The chamber, Jaycees, and a Citizens' Redevelopment Commission all collaborated in bringing about the survey.

"Sacramento, Calif.: One of the best programs in the country has resulted in a tremendously improved downtown environment and a major revamping of the approaches to the State capitol. Throughout, the chamber, has taken a very active supporting role.

"Minneapolis, Minn.: The chamber has been an active proponent of urban renewal since its inception. It has a special Urban Redevelopment Committee that acts as liaison between the business community and the local renewal agency.

"In this discussion, I have touched on a number of points. Most of them I hope have been of close personal importance to you, because I know of your pride in your city. This is the thought I would like to leave with you: "Today we have the greatest opportunity in our national history to strengthen our cities. Whatever we do or fail to do will have its effects for a long, long time. Let us do the best we can-using every tool, every instrument, every program available. In this way, we may leave to future generations the kind of cities and Nation that past generations could only perceive in hopes and dreams."

Senator SPARKMAN. Our next witness is Mr. Jay I. Naman, president of the Texas Farmers Union, accompanied by Mr. Reuben L. Johnson, director of legislative services of the Farmers Union, and Mr. Walter Hasty, assistant director. Will you gentlemen come around?

STATEMENT OF JAY I. NAMAN, PRESIDENT, TEXAS FARMERS UNION; ACCOMPANIED BY REUBEN L. JOHNSON, DIRECTOR, LEGISLATIVE SERVICE, NATIONAL FARMERS UNION; AND WALTER HASTY

Mr. JOHNSON. Mr. Chairman, the two of us will sit at the front table. Mr. Hasty is here to be called on if we need to refer to him during the question and answer period.

Senator SPARKMAN. That is all right. He can stay there or come up to the table, either one.

Mr. JOHNSON. Mr. Jay I. Naman, Mr. Chairman, is the witness for the National Farmers Union. He is the president of Texas Farmers Union, and a member of the board of directors of the National Farmers Union.

Senator SPARKMAN. Very well, we will be glad to hear from you, Mr. Naman.

Mr. NAMAN. Thank you, Mr. Chairman.

I am Jay I. Naman, president of the Texas Farmers Union. I appear here today not only in behalf of the Texas Farmers Union, but the National Farmers Union as well.

you

Mr. Chairman, we appreciate your long and distinguished record of service in the Congress-particularly, the leadership which have given to housing legislation. Under your chairmanship, substantial progress has been made in upgrading housing for rural people.

It has been the privilege of Farmers Union on a number of occasions to work with members of both the Senate and House Banking and Currency Committees on legislation that would help farmers, ranchers, and other families in rural America to acquire decent housing. We have recognized in the past, and recognize now, the need for housing legislation that will also assist city and urban areas with their mounting housing requirements-public housing, urban renewal, and the programs designed to meet the housing needs of elderly and low-income families and individuals.

Our national president, Mr. James G. Patton, is vitally concerned about the extent of poverty in our Nation. In 1961 he appointed 35 distinguished Americans, including former President Harry Truman, to a national policy committee on pockets of poverty. The first objective has been to define the dimensions of the problem. We hope to make specific recommendations at a later date.

Senator BENNETT. Do I understand then, that even though 3 years have passed, you have not yet been able to develop a definite statement as to the dimensions of the problem?

Mr. JOHNSON. Yes, we have, sir. We have a statement available and we would be most delighted, Senator Bennett, to include it in the record of hearings.

Senator BENNETT. Then you do not refer to that statement in making the statement, "We hope to make specific recommendations ***"

Mr. JOHNSON. As a matter of fact, the statement was released yesterday, and the housing testimony was written the day before. We just haven't had time to catch up.

Senator BENNETT. Thank you.

Mr. NAMAN. The President has pointed out that 35 million Americans nearly 1 in 5-live in poverty; approximately 19 million in city slums and 16 million in rural areas. We are concerned first because 16 million of the poverty stricken live in rural America and second, because we also recognize that poverty in our cities is by and large a product of poverty in our rural areas. Many of the people who have left the farm are now victims of poverty in cities. Further loss of farm people to cities will aggravate this problem.

Farmers Union's support of farm programs toward the objective of parity of income reflects our effort to build prosperous, recapitalized rural communities with parity farm income, off-farm job opportunities and a good life for our rural citizens. Farmers Union's support of housing legislation is only one facet of a broad program to meet this objective. The testimony before the committee this morning, however, is directed specifically to solving the problem of inadequate housing in rural areas.

President Johnson has recommended broader assistance to rural and farm areas in title V of S. 2468. He has recommended:

1. Continuation of the insuring of loans to finance rental housing for older people in rural areas.

2. Establishment of an insured rural housing program, and

3. Broadening the types of assistance available to improve housing for domestic farmworkers.

While we are impressed with the President's knowledge of rural America and its housing problems, I would point out in all sincerity that if the war on poverty is to be won, the provisions of title V are inadequate. We cannot agree that the objective of cutting the budget is to be accomplished at the expense of cutting the proposed massive attack on poverty. What is needed is to change the procedure of tailoring programs to fit the budget to tailoring the budget to fit needed programs. This is not only true for housing, but other programs which are underway or being planned in the attack on poverty.

I think it is of tremendous importance that we recognize and that our national leaders emphasize, that these programs are only an infinitesimal fraction of what needs to be done to wipe out poverty in America.

We should not be talking about several hundred million dollars of national effort-we should be talking about tens of billions of dollars. In an economy as large as ours, with our annual national product now exceeding 600 billions of dollars, we should be able to devote 1 or