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idy for occupancy. When I say “partially," I mean it consists of veral buildings. Two of them are now open. We inspected them rently in Chicago, and it is on the side of a very bad slum area. In Nashville, Tenn., the entire capital was surrounded by the most leful slums. These slums are now in the process of being cleared t, in conjunction with a large project for housing and expansion the Capitol Office Building. Philadelphia has several projects underway, one which involved e rehabilitation of existing structures. Redevelopment has included habilitation in the past and has included around its periphery code forcement. There a project financed by the Quakers is now being cupied. Philadelphia has a new project now being planned which will volve 3,000 acres, almost 5 square miles of an area that is being claimed from nothing. In Washington, D. C., we have at last got our Southwest project oing, and we have a picture here of a proposal by Mr. Zeckendorf,
New York, which seems in every respect to be economically pracal and feasible for the city of Washington. The 75-acre tract in e Northeast section, only a few blocks from here, is now being cleared the present time. That is our project B. All in all, we feel that the remaining $250 million which is availle for further redevelopment can be used in the next 2 years, and e feel also that we will get a great deal more for our public redevelopent dollar than we were getting in the past, because there has been great increase in interest on the part of private investors, mortgage nders, and others in mortgage lending operations.
In Washington we were a little late in starting, but for that first, id probably least attractive, operation in the Southwest area we had ve very substantial firms compete in bidding for that area and ·ceived a price almost twice what we expected, which would mean e would only have to use half the capital grant we anticipated. So or these dollars we are getting many, many more slums cleared than e thought we would before. And that $250 million means another 125 million at least will have to be put in by the city as a direct conibution, and probably $150 million as an indirect contribution. And ith private industry going along with that, it means probably 10 mes that amount in investment in the reconstruction of these areas. f course, the future of the taxpayer, from the standpoint of both the cal and Federal Government, is terrific. That leads me to my two general comments: One, if this program to be expanded and redirected, we think that should be recognized , the authorization funds. The present authorization of $500 milon, of which half has been committed, is umchanged in the present gislation. If more is expected out of this program, we would arnestly recommend that the amount of that additional work, of dditional projects which the Congress expects to be undertaken, hould be recognized not necessarily with an appropriation but with n authorization of additional capital grant funds for additional Fork.
My second point-and this relates to the question which you askerl, :Ir. Chairman, about the difference between urban redevelopment nd urban renewal. Frankly, I don't feel there is any difference.
The CHAIRMAN. That was my point. I don't see the difference.
Mr. SEARLES. I don't either, except that it will be confusing. We feel the term "redevelopment” has finally been sold. It was like the word “budget" which for many years was kicked around, and people in public administration were thrilled when it hit the headlines, and now it is an everyday word.
“Redevelopment” in these past few years has been a hard word to sell, but at last we feel people do understand it. I notice, going to New York, the Pennsylvania Railroad timetable has a picture of the Pittsburgh redevelopment project. And it says, “In this scene, a century of expansion and redevelopment is symbolized in Pittsburgh's Golden Triangle.”
So, at least “redevelopment” has been a household word and we would not like to go through the same thing again to sell the program with a new word. So, if we could change back to the word "redevelopment" and merely expand the concept, as this law does, we feel we would be better off.
A real serious difficulty faces us in every State, and right here in Washington, although I understand Mr. Cole will submit
additional legislation for Washington, changing our name, if necessary. Every State law will have to be amended, just to change the name from “urban redevelopment,” which is recognized in this legislation, to "urban renewal." It will confuse many supporting court decisions, which have already come down.
So, our two general recommendations would be: That you don't change the name, that you keep the name “urban redevelopment, but with the same concepts which are in this legislation, which we feel is urban redevelopment and which people understand as urban redevelopment.
The CHAIRMAN. Does anybody know why the name was changed !
Mr. SEARLES. Mr. Colean wrote a book called Renewing Our Cities, which included some of the concepts here. I believe that is how it crept in, sir.
But we have no objection to the name, except the difficulty that it causes, and it seems not to be understood by everybody. We heartily recommend that we change back to the term “urban redevelopment, and that if there is to be additional types of projects, conservation projects, and so on, that it be recognized in additional authorization,
Could I just discuss a few specific points?
Mr. SEARLES. In the bill itself, sir, on page 17, section 220, as Mr. Winston pointed out, that is an admirable vehicle for redevelopment. The FHA has participated in assisting lending institutions and private builders to go into redevelopment projects. But in Baltimore and other cities, particularly with the demise of the 608, which may be a very happy demise, there may have been some difficulties.
Section 220 will solve many of the problems which exist. We know here in Washington that the problem on financing that first project area was made much easier in the case of 220 than it would be in the case of 207. We actually have 2 different plans, 1 which will pass 206, but which is crowded, and the rents are higher; and in terms of amenities and in terms of lower rents, 220 is just fine.
We, therefore, recommend that on line 20, the term "redevelopment" be added, where it says, “rehabilitation and conservation.” We
understand Mr. Cole meant that when he testified. Or, if you change the entire name and expand the concept of redevelopment by definition, to include rehabilitation and conservation, just the term "redevelopment" would do the trick.
We also question on line 22, the phrase, “there exists necessary authority and financial capacity to assure the completion of such plan, as a determination by the FHA Commissioner. It is required, back in the title on urban redevolpment and renewal, that the Housing Administrator, previous to approving a project, make this determination. It looks like a second guess on the part of the FHA Commissioner and the Housing Administrator.
On page 18, line 3, we have a small number of projects which are now just in the process of securing FHA financing, where the builder has an approved plan for carrying out a project and is ready to go. He is covered by a savings clause in a later portion of the bill, so that he can move ahead without the community having to submit a workable plan, which is a matter of time. However, he is not covered for section 220. The project is covered, but he would not be able to get section 220 insurance right now if he was ready for it. We, therefore, recommend that all projects which are now redevelopment projects, now underway-because contracts now exist with the Housing Administrator—that section 220 be applicable to them, without having to meet further equirements. It will involve quite a delay.
The CHAIRMAN. That has been recommended in other testimony, too.
Mr. SEARLES. Thank you, sir. We have cleared it with the Administrator, and others.
On page 26, as Mr. Winston mentioned, we do favor section 221. Our association recommended to the President's Advisory Committee-we sent them one joint recommendation, with the National Association of Home Builders, and they were almost ready to go along on this one, but not quite—that there be a special provision for the relocation of families on special low-cost housing which would be for sale.
This section 221 seems to be just about what we had thought would be a fine vehicle for that. However, we do feel that the $7,000 figure is a little high to shoot at, as a maximum. We prefer the $8,600 figure, recomended by the President's Advisory Committee. Even though rents there may run as high as $50 a month, there is still a large number of families living in these slum areas who would be able to move into such housing. And with this repurchase arrangement, we feel quite a volume could be done. We could still shoot for $7,000, but we would be cutting off those that might run to $8,600 or perhaps $10,000 in higher cost communities.
On page 39, the yield insurance title is eliminated, and I would just like to mention that some investment bankers, some bond council, and 2 or 3 of our redevelopment authorities felt that they had come very close at some time in the past to coming up with a project which would be feasible under title VII. I know they were never quite successful, but they still feel they could do it, and it might be a very attractive vehicle at a low interest rate in these slum-cleared areas. I appreciate that there would be a type of debenture that would be transacted by the investment banker rather than the mortgage banker, but these people still feel that it has possibilities, and I felt I should mention that.
I have a few comments also on title IV. My principal one is that we certainly request that the name be changed to “urban redevelopment,” so that we don't have to change all our State laws in some cases the legislatures meet every 2 years.
On page 73, line 5, there is a requirement that before anything could be done or before any of the new FHA titles could be made available, that the localities submit a workable program. I would like to stress the point mentioned by Mr. Winston, that a workable program may be the 100-percent adoption of housing codes, building codes, and achievement-in other words, of perfection. We do intend, and every city intends, to improve their housing codes, their enforcement, and their building codes, and everything that is required under this, if they expect to get any assistance under this title.' But we do hope that the language could be clarified to mean that there is evidence that a community is working toward a workable program.
On page 75, I would like to recommend merely a clarifying change in the language. This section, line 8, provides that “the Administrator may make advances of funds to local public agencies for surveys and plans for urban renewal projects.” This is like the language in the 1949 act, that we think is a great improvement, because we think it is clear and covers some of the things, like appraisals, which actually need to be done. However, the section (i), which calls for plans for carrying out a program of voluntary repair and rehabilitation of buildings and improvements, may leave out the most important and expensive operation a community may be put to, which are appraisals necessary to determine the feasibility of rehabilitating structures. Those run about $50 apiece, and we recommend that they be spelled out in that partieular section.
On page 77, line 4, we recommend after the word “constituting," the insertion of the words “the whole or part thereof," by which we only mean to say there are some areas that are so bad, and are properly bounded by parks, major streets, and so forth, that do require 100percent clearance. And we understand such projects are intended to be assisted under this title, and we feel the addition of the words "the whole or part” would clarify that. It means that such projects, if they can qualify under this title, are clearly intended to be included for assistance.
A brief comment on section 408, on page 78, which provides that the cost of Federal inspections be charged to local agencies. We consider that a Federal expense, and not a local one, and we feel the communities should not have to pay for being inspected by the Federal Government.
On page 80 there is a definition of urban renewal which we do not feel is a definition of an urban renewal area, on line 9, and we recommend it be deleted. It has two parts, both of which we consider either meaningless or objectionable.
The first one says: "*Urban renewal area' means an urban area that (1) the governing body of the locality determines to be blighted, deteriorated, or deteriorating." Actually, the urban renewal area is the area which we begin the plans on. We go on the basis of what might be called prima facie evidence, census data, and other evidence,
from driving around in a car, and determining that that area is blighted and needs study. But it isn't determined, until we get into it and discuss it very carefully with builders and realtors, that we decide what is to be done, and that it is a blighted and deteriorated
We feel that this determination by the governing body of the locality is premature. It is required back in a previous section that they do approve this area, that the governing body approve the area. So, we recommend that the first clause in that definition, requiring the governing body to say that an area is blighted and deteriorated, be inserted under their general findings, on page 77, as an additional item, which would come on line 16, as (iv).
The remaining part of the definition is "the Administrator approves as appropriate for a project under this title.” The Administrator throughout, we feel, is directed to weigh these projects which are submitted by cities against objective criteria, so that our association and our people constantly object whenever there is a phrase that says that he, in his objective judgment, can say a project isn't any good. We prefer language which says if it doesn't meet certain specified requirements, then it can't be assisted. So, we recommend deletion of that entire definition.
On line 17 there is a requirement that a plan for one of these renewal areas conform to the workable program of an area. A workable program, of course, consists of those projects, and they must be adopted by the governing body, the city council of a locality, so it would, of course, conform. And we recommend that as redundant language, because if it is adopted by the same body who is required to have a workable program, we feel that perhaps may be confusing.
On the next page, page 81, there is a clause which we do not fully understand; we have not been able to secure a fully satisfactory explanation of it, and that runs from line 2 to 6. It says that an urban renewal planshall include, for any part of the urban renewal area proposed to be acquired and redeveloped in accordance with clause (1) of the second sentence of subsection (c) of this section, a redevelopment plan approved by the governing body of the locality.
In view of the fact that these plans have to be adopted by the city council, we see no reason for that language, and therefore recommend its deletion.
On page 82, line 22, we feel there may be a subtraction from urban development, as we know it today. We passed around the pictures of the Philadelphia project, which showed that they had been able to conduct successfully a rehabilitation project. It was a little more expensive than they thought it would be, but we feel that in rehabilitation we may, in many cases, be able to do more cheaper for the given dollar, than we could otherwise, and our builders, here in Washington and elsewhere, have fortified that thought. We felt we could do it under the redevelopment program, as it existed, and one of the big blocks that private builders have had is in getting enough houses, a row of houses assembled in a block in which they could operate, and that rehabilitation here, there, and the other place generally did not stand up and they had great difficulty in financing it if the other properties remained a slum.