- Section 220 is of utmost importance to the urban renewal program for it provides a new section that will permit FHA to insure mortgages in urban renewal areas. A new kind of economic soundness test will be provided based on the city's activity in renewing the area. A city will make application to the HHFA Administrator for an urban renewal project and the Administrator will make the final approvals as to its adequacy and the ability of the city to carry it out. If it is also required that the FHA Commissioner make these same determi nations, then cities will be in the position of having the FHA Com missioner double check his chief, the Administrator, and the resulting administrative duplication will unnecessarily complicate such urban renewal projects.

In other words, we would like one finding instead of two.

The FHA Commissioner has adequate authority in the second part of the proviso to see to it that the structures to be rehabilitated are suitable for mortgage insurance, but it should be the sole responsibiliy of the Administrator to determine the adequacy of the urban renewal plan. We suggest that this language be changed to provide that the Administrator certify to the FHA Commissioner that "there exist necessary authority and financial capacity to assure the completion of such plan."

On page 78, lines 10-12, there is a requirement that the local governing body as a condition of receiving a planning advance in order to study a proposed urban renewal area make a determination that the area is "blighted, deteriorated, or deteriorating." We feel that this is an unwise requirement-not that we object to such a determination being required but only that it be required at this stage in the development of the project. At the time an application is submitted, the city will usually have only sketchy information about the area-census data, some few scattered surveys, and the like. These data, which cities will, of course, submit to HHFA, will be inadequate to determire the character of the area to the degree necessary for a legal determination. City councils will be reluctant to base such a legal determination upon this kind of preliminary data because the finding could properly be challenged.

In other words, they don't have the information at that time.

With the planning advances, the city will make detailed surveys og the area and will amass sufficient data to give the city council a factual basis for its legal determination. Therefore, we suggest that this determination be required later on as a condition precedent for the loa nand grant contract, which provides specific Federal financial assistance for the actual carrying out of the project.

In this same clause there is also the requirement tha the Administrator approve the area as appropriate for an urban renewal project. We realize, of course, that the Administrator must have standards by which the judge the eligibility of the project, but we fear an implication that there is a subjective kind of judgment which the Administrator may make in approving a project. There is also the implication that the Administrator will pass upon the determination of the city council as to the appropriateness of the area. This is contrary to the philosophy stated in the Ast that this is a local program. We suggest the deletion of this phrase since it adds nothing but a question mark. The Administrator will continue to judge all projects

n whether they meet the eligibility requirements of the act, and this uthority is implicit in the act.

On page 79, subparagraph (c), "urban renewal project" is defined. This is a new definition; it differs, of course, from the definition of redevelopment project" in the Housing Act of 1949. A major differnce is the removal of the predominantly residential requirement, hat is the requirement that a project must either begin or end as redominantly residential. This requirement in the 1949 act has prouced many administrative difficulties here and in the cities. Everyne recognizes that the removal of slum housing and slum neighboroods is the primary objective of the act. However, the word "preominantly" as applied residentially can and does lead to endless rgument and to determinations that must be arbitrary. Its removal sa step in the right direction. However, it has now been replaced y this clause:

o achieve sound community objectives for the establishment and preservation · well-planned residential neighborhoods of decent homes and suitable living vironment for adequate family life *

his clause, we feel, is also a limiting one. For instance, would it ermit us to pursue the desirable objective of redeveloping a blighted dustrial area which contains pockets of slum housing, and bring the istrict into its proper uniform industrial use? Would it permit us to tack the widespread problem of "skid row” areas, which are so revalent at the edges of our downtown districts and which usually ontain a mixture of low-grade commercial uses, rooming houses, ecayed residences, and distributive industry? The proper redevelopent of such districts, due to their in-town locations, is often for ommercial use, instead of family housing. There are many other miting factors which will occur to all of you who are familiar with ties and their problems.

These questions are not answered by the narrow definition that has en cited from the bill.

We would suggest broader language, preserving the housing intent it recognizing the varied character of land use in well-planned cities. On page 82, lines 6 to 8, there is a provision that a city cannot ount as noncash local grants-in-aid those "revenue-producing public ilities, the capital cost of which is financed by service charges or pecial assessments." We find this provision, which was added by the ouse and was not in the bill as introduced, to be unclear and certain be very confusing in application. We have no quarrel with the inciple that where a site improvement is paid for by special assessents against the property in the project area, it should not be allowed a noncash grant-in-aid. In such cases, the city is not paying for the provement; the property owners in the project area are. This is ow prohibited under administrative rulings. What concerns us is e inclusion of service charges. Municipal accounting and termilogy are wonderfully different. Service charges can include the bills ndered for water supplied or an additional fee for installation of aterlines, or standby charges; service charges can include a payment r the installation of sewers, for the operating costs of sewage treatent systems, or for the capital and operating costs of such systems. any cities are using the service charge as a form of taxation, with a ofit to the general fund, or doing just the reverse, absorbing losses on

utility systems through general taxation. Most service charges are citywide in application, and represent no special attempt to recover for expenditures made in a specific redevelopment area. The present language would be most difficult to administer, and would often require a cost accounting of the city's entire water supply and sewage treatment systems if it were taken literally. The burden of proof will fall on the cities, because it will be natural for HHFA to rule strictly rather than liberally on the issues. We suggest that all reference to service charges be deleted and if the limitation on assessments be retained that it be qualified by language like the following:

that part of revenue-producing public utilities financed by special assessments against property in the project area.

Not in this bill but really a part of it, is the rider now attached to the appropriations bill for the independent offices. This rider reads:

Provided, That no funds in this Act shall be available for payment of capital grants under any contract involving the development or redevelopment of a project for predominantly residential uses where incidental uses are not re stricted to those normally essential for residential uses.

This would seem to me to be substantive legislation and conse quently within the purview of your committee rather than in the Appropriations Committee. We find this an extremely limiting proviso. It would preclude some 85 projects now underway and would interfere drastically with the local determination of the best use for cleared slum land. Then, too, it is in conflict with the philos ophy expressed in the Housing Act of 1954. This proviso would make it impossible to put anything in a residential project except uses incidental to residence. That means than any public use, any civie development, any important commercial development that should logically be in the area cannot be included. This proviso, in effect, dictates an extremely limited principle of land use for all cities, placing them in a planning straitjacket insofar as they participate in the Federal program. We suggest that the Housing Act of 1954 contain language specifically striking this proviso,

That is our testimony.

Senator GOLDWATER. Mr. Robin, we certainly appreciate your coming here and the giving of your time and your valuable background for our determinations on this bill.

Thank you very much.

The next witness this afternoon-and I understand this is by mutual agreement-will be the Honorable Donald Mead, the mayor of the city of Syracuse, N. Y. Mayor Mead, it is a pleasure to have you here this afternoon. You can testify in any manner that you care to. STATEMENT OF DONALD H. MEAD, MAYOR OF THE CITY OF SYRACUSE, N. Y., AMERICAN MUNICIPAL ASSOCIATION

Mayor MEAD. Mr. Chairman, I may say at the outset that I rather detest submitting any subject from a prepared text, but in view of the fact that there are several important points that I would not like to overlook, coupled with the fact that we have to catch a rather early plane this afternoon, I am going to adhere rather closely to the prepared text.

My name is Donald Mead, mayor of Syracuse, N. Y. I am appearg this afternoon as the representative of the American Municipal ssociation, a nationwide organization representing 1,000 municialities.

Mr. Randy Hamilton, director of the association's Washington. fice, is with me to assist me in presenting to this committee the viewoint of the Nation's municipalities.

I am also accompanied by my secretary, Mr. Torrey, and the execuve director of the Planning Commission of Syracuse, Mr. Sergei rimm, to assist in the event you desire information about our experiice in Syracuse. I might add parenthetically that being a comratively new mayor, I have insulated myself with some rather rong shock troops.

Our testimony is confined this afternoon to those portions of the oposed legislation that deals with slum clearance, urban renewal, development and planning advances for public works, and other

irposes.

My verbal testimony is confined to generalities, while submitting the honorable members of your committee a more detailed copy of v text, including specific references to the sections and lines of the

11.

The American Municipal Association, representing 12,000 municilities, supports the principles outlined in the bill and endorses the erall approach to community value preservation as envisioned in We commend its author and the administration for the hard work d diligence that went into its preparation. Our association had the ivilege of sitting in on some of the Washington shirt-sleeve conferces held by Administrator Cole, and consequently, we appreciate e tremendous amount of effort that preceded the drafting of the islation.

Unfortunately, the municipalities were not represented on the Present's Housing Advisory Committee. Consequently, some of the aknesses of the proposals which are apparent to us as operating city cials could not be strengthened prior to this time. There is some estion in our minds as to whether or not the conditions placed on nicipalities who wish to participate in the program will tend to w down work on redevelopment and slum clearance. Likewise, ne of the provisions may envision more rapid action in adjusting to new concept than is possible in many cities. We hope that the new islation will not serve to impair or slow down the fundamentally portant slum clearance and urban redevelopment operations which just now beginning to come into fruition through the Nation. As FHA Commissioner Guy T. O. Hollyday told us in an exclusive erview in our October 1953 American Municipal News:

* neighborhood rehabilitation programs are not a substitute for slum cleare or redevelopment.

The legislation should clearly point out to the Administrator that it lesigned to provide new tools for attacking urban blight and slums, not put roadblocks in the way of established slum clearance and an redevelopment objectives.

If new conditions, new programs, new requirements, and new muipal administrative organizations are to be necessary before municiities are permitted to engage in activities which they are already

empowered to do in existing legislation, the attack on slums and blight will, in fact, be slowed down or stopped. Since this is not the intent of the legislation, the point should be clearly made in it.

For example, as now drafted, section 220 would provide no supplementation to the insurance of mortgages for communities already engaged in redevelopment projects. Section 220 (d) (1) does not make a mortgage eligible for insurance unless it is in an area for which a specific plan of "rehabilitation and conservation has been established." We suggest the technical change to make mortgage insurance available for areas which also have redevelopment projects. On page 17, line 19, after the word "rehabilitation," the words "or redevelopment" should be inserted so as to comply with the spirit of the legislation to broaden the concept of blight prevention to include rehabilitationbut not to toss out redevelopment as a legitimate function and purpose of government.

On the same page-page 17-we feel that it is not consistent to provide for second-guessing by the FHA Commission after his su perior, the HHFA Administrator, has already made a final determination and finding as to the authority and financial capacity of municipalities to engage in urban renewal.

This comes about, as the bill is now written, because the first part of the provision beginning on line 23 states that—

*** in the opinion of the Commissioner (i) there exists necessary authority or financial capacity to assure completion of such a plan * * *

Under the proposed urban renewal plan, this determination has already been made by the HHFA Administrator. A second such decision will only serve to slow up the procedure and add a cumbersome administrative burden.

Turning to title IV of the bill, we should like to make the point at the outset that the proposed legislation is aimed at making a Federal purpose for which funds may be spent, the rehabilitation of homes and prevention of slums by various techniques to fight blight and deterioration.

We support those aims and purposes. We agree with the principles, as yet untested in the courts, and eagerly await the results of municipal action under these expanded and broadened concepts. This section and title makes a contribution in that it recognizes the role of rehabilitation and conservation in an honest attempt to cure the problems of urban blight and slum.

It can work and it will work, if the concept of rehabilitation is not substituted for redevelopment and slum clearance. Its strong point is the granting of Federal financial support for conservation and redevelopment. Its weak point is that there is no indication that any additional funds will be set aside for these approaches. They may, therefore, encroach on redevelopment to the detriment of the entire program.

Title IV makes the receipt of all aids under all Federal legislation dealing with housing, slum clearance, redevelopment, urban renewal and other purposes recognized in the Housing Act of 1949 contingent upon there being in effect a "workable program." This can broadly be defined as rehabilitation and conservation plus slum clearance, redevelopment and housing code enforcement.