However, the size and speed of expansion of the program would depend primarily on the degree of effort that metropolitan areas and localities are willing to put forth. The supplemental grants would be available to any jurisdictions which show, as stated in the President's recent message "that they are ready to be guided by their own plans in working out the patterns of their own development and where they establish the joint institutional arrangements necessary to carry out these plans. Additional metropolitan planning efforts under present law: Financial assistance for metropolitan comprehensive planning is available under our section 701 urban planning assistance program. In addition, a special program will be undertaken within the framework of the existing 701 program to develop new techniques of metropolitan planning and implementation. This puts into effect the President's proposal in his message of January 26 for a "series of demonstrations in effective metropolitan planning." I estimate that the total cost of this program will approximate $6.5 million. TITLE II. LAND DEVELOPMENT AND NEW COMMUNITIES Last year, the Congress enacted a significant new program of FHA mortgage insurance for privately financed land development. This program has already attracted much interest throughout the country. Over 100 proposals for well-planned developments, both large and small, are currently being processed in all parts of the country. Title II of this bill will authorize the approval of a category of "new communities" for which land could be prepared with the aid of FHA mortgage insurance under the program. Without the benefit of such mortgage insurance, private enterprise has already undertaken the development of a large number of extensive new communities. Many of them have been planned with imagination and boldness characteristic of private enterprise at its best. But the scale of these projects is such that only large developers can find an adequate volume of favorable financing for the site preparation. Even for them, the financing is often inadequate for efficiently scheduled land development operations, or else the cost is far out of line with the financing charges that the market demands for smaller scale land development, or for actual housing construction. This bill will provide needed credit assistance to facilitate broader participation in these private efforts. It will encourage adequate private financing at reasonable cost for large-scale preparation of sites in well-planned communities. The sites produced with FHA mortgage insurance aid will be made available to a cross section of private builders, especially small builders. They will thus be able to participate more fully in this increasingly important segment of the housing market. If this segment of the market is lost to our small- and mediumsized builders, our new communities will lose the enormous vitality that a diversified homebuilding industry is uniquely capable of producing. The category of new communities would consist of land developments satisfying all requirements under the existing land development program, and meeting additional standards prescribed by the bill. A development could be approved only if the Secretary determines that in view of its size and scope, it will result in substantial economies and will contribute substantially to the sound and economic growth of the area in which it is located. What is contemplated here is development of large tracts of good land on a scale that will provide a wide range of urban facilities and services, while requiring maximum accessibility to any nearby major cities in the area. This would facilitate such benefits as cheaper initial land costs, a better balance of varied housing and other land uses, and reduced traffic. Above all, we would be affording a greater range of desirable choices for the home-buying and home-renting public. To encourage well-planned developments of this scale, special financial aid in the form of FNMA special assistance could be made available, if needed, and longer mortgage maturities would be authorized for this category of land development. These special aids would not be available for land developments, no matter how extensive, which are not approved as meeting the special requirements in the bill for new communities. The title would also increase from $10 to $25 million the maximum outstanding mortgage amount permitted for a single large land development. Title II would also authorize Federal loans to land development agencies to finance the acquisition of land to be used in connection with the later development of well-planned residential neighborhoods, subdivisions, or new communities. These land development agencies would include municipalities and other public corporations which are designated or created under State law for this purpose. The Federal loan could equal the cost of the acquisition of the land, including capitalization of interest, and would be repayable within 15 years. The interest rate would be the same as under our public facility loans program. The loan proceeds would not be available for site improvements, although other provisions of Federal law would authorize assistance to State and local public bodies for financing such improvements. The land acquired by the land development agency would be sold for private residential and related development in accordance with a development plan made by the agency and approved by the Secretary. The land could be developed by the private owners with or without FHA mortgage insurance assistance. These projects could be residential neighborhoods, housing subdivisions, or more extensive developments, including new communities. TITLE III. URBAN MASS TRANSPORTATION Title III of the bill will authorize appropriations necessary to continue the urban mass transportation program through fiscal year 1968. It will increase the present authorization, by $95 million, for grants, to assist localities to finance needed mass transportation facilities and equipment. It will also increase, by $10 million, the authorization for appropriations to develop, test, and demonstrate new or improved mass transportation facilities, equipment, or techniques. Advance funding is essential in the urban mass transportation program. It allows communities time to plan their projects with assur ance that funds will not be exhausted during the "leadtime" between starting to plan for a project and applying for grant assistance. This time amounts to several years in the case of larger projects. The proposed program level is well supported by the volume of applications in hand and known to be in preparation. The capital grant assistance under this program has given-and will continue to give-help to communities of all sizes, including so ne faced with a breakdown or total loss of public transportation service. It is helping communities to carry out planned improvements in eq upment and facilities which they could not themselves finance out of the farebox. And it is stimulating local initiative and local action. in the planning and provision of transportation facilities in coordination with community development. TITLE IV. GRANTS FOR URBAN INFORMATION CENTERS Title IV of the bill would authorize a new program of Federal grant assistance to States and metropolitan area agencies. These grants would finance up to 50 percent of the cost of programs demonstrating methods of establishing effective urban information centers. These centers would make it possible to assemble, correlate, and disseminate information and data on the physical, social, and economic problems of urban areas, and on the governmental and other programs dealing with such problems. In recent years, there has been a great expansion of Federal, State, and local programs dealing with urban problems. These programs can be used to best advantage only if State and local governments, organizations, and individuals have ready access to information regarding them. In addition to information as to the availability of urban assistance programs, the urban information centers can provide useful and necessary data needed for planning, programing, budgeting, and coordinating these programs. Few States and local agencies have been able to develop effective information centers with their existing resources. There are considerable technical problems involved in selecting the data which should be fed into the system, and in combining Federal, State, and local data which exists but is not in readily usable form. The assistance provided by this title would help State and local agencies resolve these problems. HOUSING AND URBAN DEVELOPMENT AMENDMENTS OF 1966 The Housing and Urban Development Amendments of 1966 will make some needed changes in laws governing existing programs, and will encourage the application of advances in technology to housing and urban development activities. First, an amendment would permit lenders, who make loans under the FHA title I property improvement program, to collect the onehalf of 1 percent insurance premium from the borrower. This is the only FHA program under which the cost of the insurance is not directly borne by the borrower. We are nevertheless suggesting that the amendment be effective for only 1 year, as provided in this bill, so that the Congress may have an opportunity to determine the effect of the change on the volume and pattern of these FHA-insured loans. The volume of this program has been declining greatly. By giving lenders the proposed small increase in the return on their loans, we will encourage the loans to be made. Without the loans, homeowners of lower income may be unable to obtain emergency home repair credit without paying high or even exorbitant rates. The limit on the amount of a home mortgage insured by FHA under its special program for low and moderate income and displaced families (sec. 221 (d) (2)) will be increased from $11,000 to $12,500 in the case of a one-family home, and from $18,000 to $20,000 in the case of a two-family home. These increases are made necessary by increased housing costs. There are two proposed amendments in the bill relating to low-rent public housing. One pertains to leased private housing authorized by the Congress last year. The amendment would permit local housing authorities to lease dwellings without regard to the 3-year limitation in the present law in cases where the housing is needed for low-income families displaced by urban renewal, highway construction, or other governmental actions. The leasing provision is particularly helpful in providing housing for large displaced families, many of which have been on the waiting list for public housing for many years. Local housing authorities cannot assure what will happen to these families when the short-term leases end. Authority to enter into leases with longer terms would prevent further insecurity, and in some instances the actual hardship of an additional displacement, for these families. The second amendment would make the formula for providing assistance to low-rent housing, as it was amended by the 1965 act, available for the leasing of housing to be constructed, as well as to existing housing. Increasing interest is being shown by private enterprise in working with public housing authorities in the development of housing for use by the authorities. This results in costs substantially lower than can be achieved when the authorities plan and construct the housing themselves. The amendment would provide additional stimulus for much greater participation by private building interests in the low-rent housing program. The rising costs of housing construction, and the rapidity and complexity of urban growth, give rise to problems which can best be solved if advantage is taken of available technical knowledge. We should make good use of those technological advances that have already been made in the fields of housing construction and design, and in the field of urban development. The bill would direct the Secretary to conduct studies and research to demonstrate methods of applying technological advances and to encourage and promote their acceptance by industry, communities, and the general public. These are matters where the Federal Government can and should assert leadership. This would not require additional basic research on building materials. In addition, I recommend to the committee legislation to help develop more effective methods of handling storm drainage problems in urban and metropolitan areas. This proposa Title II of the bill, on housing and urban development amendments contains no substantive provisions. It makes necessary adjustments in the wording of Federal statutes to reflect the new names of offices and officials provided in the Department of Housing and Urban Development Act. Before concluding my remarks, Mr. Chairman, I would like to endorse S. 3215. This legislation which you introduced, and which is now before this committee, would establish a new program (adminis tered by the Department of Housing and Urban Development), of mortgage insurance and direct loans to finance the provision of facilities for group medical and dental practice. The President, in his message last year on advancing the Nation's health, recommended establishment of such a program, which is urgently needed in order to assure the most effective use of our limited supply of doctors and medically trained personnel. I understand that Mr. Wilbur Cohen, Under Secretary of the Department of Health, Education, and Welfare, will testify on the bill later this week. Mr. Brownstein, our Assistant Secretary for Mortgage Credit, will accompany him and testify on behalf of the Department. Thank you, sir. Senator SPARKMAN. Thank you, Mr. Secretary. It is a very fine and clear statement. I shall ask only a very few questions. In fact, the Secretary wants to leave. I stated this at the beginning by 12:15 I would say. He has a 12:30 appointment, and if we will conduct our questioning in order that he may be released at that time I would appreciate it. I am going to ask you very few questions. On page 7 you state that demonstration cities help will be for all cities. You probably know that when this idea was first brought out there was a good bit of discussion and speculation as to the number of cities and how they would be selected. There was at one time a statement to the effect that a very small number would be used, and I believe finally the number was lifted to 70. I don't know where these figures came from or anything. There is no such list, is there? Mr. WEAVER. No, sir. Senator SPARKMAN. But it is a matter of the cities coming in with the best programs at the earliest date: is that correct? Mr. WEAVER. This program contemplates that there will be a limited number of cities that can come forward quickly with imaginative and creative ideas. We are interested not only in the quality of what they propose, but also the quality of performance that they can muster up to carry it out. 62-551-66-pt. 1-3 |