4. If HUD makes rapid and vigorous participation in meeting the national housing goal a condition precedent to the granting of Federal aid. Mr. Chairman, throughout this testimony, ADA has commented on the need for urgency in confronting the housing problem and our urban development problems. We believe that unless some dates are placed on accomplishment of general goals, such as those in the Housing Act of 1949, we will move at too slow a pace to accomplish what should have been accomplished many years ago. We thank you, Mr. Chairman. Senator SPARKMAN. Thank you, Professor Davidoff. You have given us a very full and clear statement, and we appreciate it. Did you have anything to add, Mr. Cohen? Mr. COHEN. No, thank you, Mr. Chairman. Our next witnesses will be Mr. Alfred D. Stalford, chairman, and Mr. Walter Monasch, director, California Department of Housing and Community Development. Gentlemen, we are glad to have you. STATEMENT OF ALFRED D. STALFORD, CHAIRMAN, CALIFORNIA COMMISSION OF HOUSING AND COMMUNITY DEVELOPMENT, AND WALTER J. MONASCH, DIRECTOR, CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT Mr. STALFORD. Thank you, Mr. Chairman. Senator SPARKMAN. We have your prepared statement. It will be printed in full. You present it as you see fit. Mr. STALFORD. Mr. Chairman, because of the lateness of the hour, would it be more convenient to you, sir, if we were to return tomorrow morning? It would be equally convenient for us. Senator SPARKMAN. No, I don't believe so. on now. We have a full schedule every day. We would rather go Mr. STALFORD. All right. I would like to read our testimony. We will leave out certain portions of it which contain statistics and will request their inclusion in the full record. Senator SPARKMAN. Very well. Mr. STALFORD. In the past year, the State of California has created a new commission and department of housing and community development. Almost simultaneously, the new Federal Department of Housing and Urban Development came into existence. A significant difference in these two departments should be noted as to the scope of their concern. The Federal Department in its title and its operations is limited. to urban and suburban housing and development problems, whereas the California State commission and department are concerned with all housing and development problems in the State, including notably those in rural areas. We desire to make recommendations concerning the following bills pending in the U.S. Congress: Demonstration Cities Act of 1966 (S. 2842). Housing and Urban Development Amendments of 1966 (S. 2978). In addition, we desire to make further recommendations for changes in Federal law in this field, particularly with regard to farm labor housing. I. DEMONSTRATION CITIES ACT OF 1966 We endorse the Demonstration Cities Act of 1966, particularly the concept that our cities should be treated as organic units. We are also heartened by the comments of the President and Dr. Weaver which emphasized that this will be a local program, planned, developed, and carried out by local people who will make the judgments of the cities' needs. In this regard, we are concerned over the role of the Federal coordinator, as are other groups which have given testimony to this subcommittee. There have been suggestions that the name might be changed, but this, of course, does not deal with the concern of local and State governments that the demonstration cities program be a true local undertaking. We feel that thoughtful consideration should be given to the fears of local and State governments that these programs not only should not, but cannot, be accomplished without the maximum of local freedom in determining the methods to be used in solving the individual urban problems. We believe the Federal role should be limited to assurances that Federal funds are being expended within the broad goals established by Congress for the solution of the total problem. Only with great freedom in this regard can the considerable creative power at the local, State, and private levels be utilized. Another fundamental problem, which seems to recur in all discussions of this bill, is the question as to which cities will become demonstration cities and how each will be chosen. We believe the existence of this problem emphasizes the general feeling that the bill provides opportunities which will be of great benefit to our cities. We recommend that this subcommittee in its report specify that the demonstration cities be chosen to represent as many different kinds of urban problems as possible. A further problem arises from the fact that some cities, not chosen as demonstration cities, may lose funds or have them delayed because of higher priorities for demonstration projects. II. URBAN DEVELOPMENT ACT We endorse the Urban Development Act. We question, however, the provisions in title II, section 208 of that act, which would permit loans to public land development agencies to finance acquisition of land. It appears possible that such acquisition may, by artifically reducing the supply of land, increase the cost of properties remaining on the market. It also would appear to place public development agencies in direct competition with private enterprise. It apparently would remove such land from local tax rolls and create additional burdens on the local taxpayer. It is possible that development goals could better be achieved by strengthening local and regional planning controls, such as zoning. We urge intensive consideration of the possible problems in connection with this section. The objective-that of enabling development of better living environments in the mass urban areas of tomorrowcertainly is worth striving for and has been a major effort of California's administration. We also urge the deletion of section 404 (b) of title IV which precludes grants to assist in assembling data or providing information to be used primarily in the day-to-day operations of State or local government bodies and agencies. California, through its commission and department, is particularly interested in the gathering and dissemination of facts, data, and statistics to State agencies, local governments, and private industry in order that the day-to-day decisionmakers will be able to have the best possible information available at the time they are faced wtih making a decision. 1966. III. HOUSING AND URBAN DEVELOPMENT AMENDMENTS OF 1966 We endorse the Housing and Urban Development Amendments of Among other provisions, this bill would permit local housing authorities to lease dwellings-without regard to the 3-year limitation provision in the present law-where the housing is needed to rehouse low-income families displaced by governmental action. We believe that the 3-year limitation should be extended to a longer period for all low-income families, not for governmental displacees only. We are particularly in support of the provision directing the Secretary to encourage and assist the housing industry to reduce the cost and improve the quality of housing through the application of advances in technology to home construction and rehabilitation. We are equally impressed with the provisions allowing this Federal agency to take part directly in programs to test and demonstrate new and improved housing construction technology, which would include development and use of new products and materials, and promote the acceptance of such improved technology by the industry, communities engaged in urban development, and the general public. Such new technology will make it possible to produce homes in cost ranges not presently available, thereby greatly increasing use of construction labor, materials, and equipment, while also providing housing with potentially reduced long-term subsidies. At this point, Mr. Chairman, I would like Mr. Monasch to read the portion regarding rural housing. Senator SPARKMAN. Very well, sir. Mr. MONASCH [reading]: IV. RECOMMENDATIONS FOR FURTHER CHANGES IN FEDERAL LAW A. Rural housing Rural housing conditions in many areas of the Nation are deplorable and are not improving. The creation of the Department of Housing and Urban Development on the Federal level has dramatically shifted most interest to the urban and suburban areas. While we in California are also seriously concerned with those areas, as you know, we are equally concerned with rural housing, particularly as our commission and department are working on it. Forty-seven percent of our Nation's poverty exists in our rural communities. The disposable income per person of the farm population in 1964 was only about 60 percent of the average received by the nonfarm population in spite of the fact that gross farm income reached an alltime high in 1964. In 1960 there were 1,600,000 farm families living in outright poverty, with family incomes below $3,000 per year. Three-fourths of the people who live in rural America neither live nor work on farms. In 1960 there were 2,800,000 rural nonfarm families living in poverty. There are between 2 and 3 million farmers who receive less than a 5-percent return on their investment and less than the national minimum hourly wage of $1.25. The proportion of substandard and deteriorating housing is twice as high in rural communities as in our metropolitan areas. Almost half the people who live in bad housing in this country are rural people, although they make up only 30 percent of the population. Despite this heavy concentration of need in rural areas, the Federal Government, since 1950, through the Federal Housing Administration insurance programs alone, has helped to build more than three dozen new houses in the cities and their suburbs for each single one that has been built with the assistance of the Farmers Home Administration in rural areas. The nature and magnitude of the housing problem in rural California was comprehensively outlined in the survey completed by the division of housing in 1962 and incorporated into the report on housing in California of the Governor's advisory commission on housing problems. The highlights of that report indicated the following: In all of the six sample communities surveyed, general farm fieldworkers composed the largest single occupational group-50 percentof the combined households. The second largest group-13 percentwere retired persons, of whom 31 percent were individuals living alone. Of these households 85 percent had low incomes with a median of $2,668 annual income. General farmworkers as a single group had a median annual family income of $2,207. A survey of 10 agricultural counties, from San Joaquin south to Imperial, revealed that these areas contained 32 percent of all dwellings in California classified as "deteriorated" and 40 percent of the State's dwellings classified as "dilapidated," even though the area covered contained only 27 percent of the State's total housing units. In the specific area of farmworker family housing, the following conditions were reported: More than 80 percent of farmworker families live in dwellings which violate standards of health, safety, and comfort. Nearly 65 percent of the dwellings are dilapidated or deteriorated. Thirty percent of the dwellings have no bathing facilities and 25 percent lack even a kitchen sink with running water. Pit privies serve 33 percent of dwellings occupied by general farmworkers. The Governor's advisory commission concluded: The small rural town with its economy supported mainly by the low wages and seasonal employment of its residents is simply without the resources to meet the most fundamental needs of utilities and sanitation * * *. The immediate and most fundamental need of these communities is for assistance in providing the most elementary amenities-those which precede the development of housing; i.e., water, sewage, planning, schooling, and similar facilities fundamental to any civilized community. It is manifest that this aspect of California's problem has not received consideration in national housing and farm-aid programing. In order to meet those needs, it is our recommendation that the Farmers Home Administration authority and operations should be expanded in the following manner: 1. Expand the section 515 below-market interest rate Farmers Home rental multiple-housing program for low- and moderate-income elderly to include all low-income persons and families regardless of age and to increase the loan maximum from the present $200,000 to $1 million. This would provide larger projects for more people of all ages in need of low- and moderate-income housing. 2. A rural rent supplement program coordinated with section 514 and the expanded section 515 Farmers Home programs should be created in a manner similar to the present urban rent supplement program coordinated with the section 221(d) (3) market interest rate and below-market interest rate programs. This would make it possible to provide rentals which reflect rural tenants' ability to pay, rather than only the need to repay outstanding mortgages. As incomes and rent-paying ability increase, as they no doubt will, the supplements would be proportionately reduced. 3. A conditional commitment program should be initiated by the Farmers Home Administration in a manner similar to the methods in this regard used by the Federal Housing Administration under section 203(b). This would encourage the private homebuilding industry to enter as actively into the rural housing market as it has during the past two decades in the urban areas. 4. The Secretary of Agriculture should establish a definition for special interest rates. Moreover, such definitions should recognize cost-of-living regional variations as is done by the Federal Housing Administration and the Public Housing Administration. 5. A direct loan fund should be created in the Farmers Home Administration loan program to supplement the farmers mortgage insurance program. This would furnish a source of funds for those applicants unable to purchase housing under the Farmers Home Administration insured loan program interest rates. 6. The housing grant available under section 504 for improvements available in rural areas should be raised from $1,000 to $1,500. This would more nearly reflect the actual cost of home improve ments. 62-551-66-pt. 1—32 |