need for a new metropolitan planning grant program to be superimposed over the existing one. Under this title the county, municipality or other general-purpose unit of local government, to qualify for the grant, must satisfy the Secretary that its land-use controls, zoning codes, and subdivision regulations, including those unrelated to the project qualifying for the added grant, are effectively assisting in and conforming to metropolitan planning and programing. The Secretary, in his House testimony on February 28, disclaimed any desire to promote so-called metro forms of government. April 18 in an address before the American Society of Planning Officials in Philadelphia he said, in referring to the prerequisites for the grants: "There must be adequate governmental administrative arrangements for the execution of all such development in full accordance with the plan." From the Secretary's soft-pedal approach to this bill as reflected in his testimony before the House and Senate Housing Subcommittees, we were convinced that this Federal money would not be used as a device for the promotion of metro government. However, his hardhitting approach to the bill in his April 18 address, the day prior to his testimony before this subcommittee, leads us to believe that there is more to title I than meets the eye. Certainly his emphasis on "decisionmaking authority" on the metropolitan level as a "fundamental element" makes this program something more than a mere gift for good planning. Another question we pose relates to the reason for the supplementary grant. Will it be an inducement to encourage metropolitanwide planning, or will it prove to be in the main a reward to existing metropolitan areas who have attained a substantial degree of metropolitanwide comprehensive planning? It is our belief that the supplementary grant is a gift or a reward for comprehensive planning and therefore bears little or no relationship to need. It lacks an essential element which underlies all Federal grant programs. We sincerely believe this should be sufficient to justify the subcommittee's deferral of the proposal at this time pending its own study and investigation of the need for such a gift. Title V of S. 561, a bill to which I have previously referred, addresses itself to the need for comprehensive planning of land uses for residential, commercial, industrial, and other purposes and other facets of urban development. Areawide, metropolitan or regional planning will be required as a prerequisite to the grants under the eight projects set forth in the bill before the subcommittee. The only difference is that S. 561 would require this comprehensive planning as a condition for grants as presently constituted. The bill before the subcommittee wants to do the same thing by increasing the Federal share. S. 561 has aroused little interest because it wants the State and local governments to accept responsibility without giving them more money. We thus have the rather strange situation of a Senate subcommittee considering a bill which addresses itself to the same problem as that encompassed in a measure which passed the Senate and is still under consideration by the House. To compound the com plexity of these developments, we note from page 144 of the President's budget that he recommends the enactment of S. 561. GOVERNMENT CONTROL OF FUTURE LAND DEVELOPMENT There are two provisions in S. 2977 which we group under the subject: "Government Control of the Land." These are section 201, which would expand title X of the National Housing Act to conform to the "new town" proposals made in 1964 and 1965; and section 208 providing loans to State land development agencies for the advance acquisition of land. Both proposals have been rejected twice by the Congress, in 1964 and again in 1965. We opposed these two provisions when they were recommended. We said then, as we reiterate now, that they are unnecessary, that they represent an unwarranted intrusion of government in the control of the future use of land, and that they would lead ultimately to the federalization of the Nation's communities. Under the proposed amendments to FHA title X, the Secretary would have the power to force his standard of every aspect of community life onto the plan for the new community. Our concern is not allayed by the fact that this new Federal assistance under title X would be permissive, available only if the developer accepts the Department's standards. A $25 million mortgage supplied through FNMA specal assistance is sufficient to give the Department a predominant role in all future new town developments. The land development proposal is even more objectionable than the provisions rejected by this subcommittee in 1964 and 1965. Under the language of this bill, municipalities would be included as beneficiaries of this financial assistance. Thus any incorporated community would be encouraged to acquire land in the path of urban expansion and parcel it out at some future date to developers and builders who will develop the land in accordance with plans previously approved by the Department. If either of these provisions were approved, instrumentalities of government would determine the direction of urban expansion; who would do the developing, and on what terms. Last year the HHFA announced that the FHA will avoid acceptance of applications for mortgage insurance on properties which would be competitive with the urban renewal development, unless sufficient market demand is evident for both. Because of the Federal interest already committed to the success of the urban renewal project, FHA will not jeopardize the market for the proposed housing in the urban renewal area by issuing commitments to insure loans on other housing that would preempt the market demand for housing planned in the urban renewal project area. Applying this principle to the new towns, which would also involve a federally committed interest, we view the proposal as adversely affecting private development through FHA in any of the surrounding area upon FHA determination that both might compete for the same housing market. Last year we submitted for the record excerpts from two issues of House and Home magazine listing 61 new communities being developed by private enterprise without Federal assistance in land assembly and site improvement. During the 1965 hearing before this subcom 62-551-66-pt. 1-34 mittee the then HHFA Administrator's only comment on this evidence was admiration for what private enterprise was doing and a desire to help them do better. We respectfully suggest that the involvement of the Federal Government into new subsidy programs should rest on a firmer foundation. Certainly we ought to see how well the existing title X program, with its $10 million ceiling, works prior to increasing this amount to $25 million and enlarging the scope of the Secretary's powers. The burden of proof is on the Secretary to justify his case for the Federal Government's further involvement in controlling the future use of land. He has submitted no evidence that private enterprise is unable to accomplish this purpose. On the other hand, the preponderance of the evidence points to the impressive record of private enterprise in this area, accomplished without Federal criteria to determine whether the plans for the new community are appropriate and without Federal financial assistance in the assembly of the land and its site improvement. S. 2978, THE HOUSING AND URBAN DEVELOPMENT AMENDMENTS OF 1966 Section 23, housing We are limiting our testimony on this bill to the two sections relating to privately owned housing leased by local housing authorities for occupancy by low-income families. Our association endorsed this program at its last convention, and we have urged our local boards of realtors to cooperate with local housing authorities in making available existing housing for rental to lowincome families. The first of the two amendments, section 104 of S. 2978, would permit local housing authorities to lease dwellings without regard to the 1- to 3-year lease limitation provision where the housing is needed for low-income families displaced by governmental action. The justification for the amendment is to remove any threat of dislocating the family again presumably after the 3-year lease expires. When we realize that the normal lease for rental housing is 1 year and month-to-month thereafter, the argument for leases of perhaps 10 to 20 years has no validity. This program is designed to make privately owned housing available for low-income families. A longterm lease makes the housing for all practical purposes publicly owned. The amendment is unnecessary; it makes a fundamental change in a worthy program enacted less than 1 year ago, and it should be rejected. The second amendment, section 105 of the bill, involves an even greater and more fundamental departure from the program as originally conceived and enacted. As we said earlier, the purpose of the program is to make adequate existing housing available for low-income families. The amendment would change so-called section 23 housing from one limited to the leasing of existing houses to one which would be available for the leasing of both existing and new housing. Of the 60,000 public housing units per year authorized by the 1965 act, the Public Housing Administration advises that 10,000 units would be available for section 23 housing. If this amendment is approved, all of this allocation could be directed to new construction, thereby negating the purpose and intent of the Congress in enacting section 23. The House report on the 1965 act devotes considerable language on pages 11 and 12 emphasizing that this program is designed to tap the supply of privately owned existing housing as a supplement to the basic program of new construction. The proposed amendment permits the Department to change section 23 housing to new construction. It should either be rejected by the subcommittee, or appropriate language should be included in the committee report reflecting legislative intent that section 23 housing is to remain predominantly an existing housing program. Interest rates The recent increase in interest rates on FHA and VA mortgages has revealed an irregularity in the FHA interest structure, affecting multifamily programs, which operates to the disadvantage of some of these programs. We now have six multifamily programs with a 52-percent rate and four with a 54-percent rate because the latter are subject to a statutory ceiling of 514 percent. On the other hand, of the the six programs that were increased to 52 percent, five are subject to a statutory ceiling of 6 percent and one of 512 percent. We strongly recommend that all of these programs be subject to the 6-percent ceiling now applicable to all the single-family programs and five of the multifamily programs. A draft of a suggested amendment is attached for the subcommittee's consideration. That concludes my remarks, Mr. Chairman. Senator SPARKMAN. Thank you very much, Mr. Emlen, and I notice your proposed amendment is attached. That will be printed in the record. (The document referred to follows:) PROPOSED AMENDMENT TO S. 2978, HOUSING AND URBAN DEVELOPMENTS OF 1966 Insert a new section as follows: INTEREST RATES-MULTIFAMILY PROJECTS Section (a) The second paragraph of section 207 (c) (3) of the National Housing Act is amended by striking out "not to exceed 52 per centum" and inserting in lieu thereof the following: "not to exceed a rate prescribed by the Commissioner, but not in excess of 6 per centum"; (b) Section 213 (d) of the National Housing Act is amended by striking out "not to exceed 54 per centum" and inserting in lieu thereof the following: "not to exceed a rate prescribed by the Commissioner, but not in excess of 6 per centum"; (c) Section 231 (c) (6) of the National Housing Act is amended by striking out "52 per centum" and substituting in lieu thereof "6 per centum"; (d) Section 234(f) of the National Housing Act is amended by striking out "not to exceed 54 per centum" and inserting in lieu thereof the following: "not to exceed a rate prescribed by the Commissioner, but not in excess of 6 per centum". [NOTE.-Section 810 of the National Housing Act incorporates by reference the rate under section 207.] Senator SPARKMAN. Let me ask you about one or two things. On page 4 of your statement you referred to a speech made in Cleveland, Ohio, by the Secretary. You do not give the entire quote, I believe. Do you have that speech available? Mr. EMLEN. Yes, sir. It is in my briefcase, in the hall. Senator SPARKMAN. I was just thinking, if you might extract the quote you are talking about and Mr. EMLEN. We can supply that for the record. Senator SPARKMAN. On page 6 you make reference to a speech in Philadelphia. I believe you do give the complete quote there. Mr. EMLEN. "There must be adequate governmental * * *" Is that it? Senator SPARKMAN. Yes, sir. You gave the direct quote there, I believe. Mr. EMLEN. Yes, sir. I have that speech here, too. Senator SPARKMAN. That is with reference to metropolitan planning. Could you extract the quote from that, too, and include it at this point in your statement? (Mr. Emlen subsequently supplied the following excerpts:) DEMONSTRATION CITIES PROGRAM (Excerpt from an address by Robert C. Weaver, Secretary, Department of Housing and Urban Development, before the Cleveland Chapter, Americans for Democratic Action, Cleveland, Ohio, April 16, 1966) The demonstration cities program will offer what I think is an unprecedented opportunity to eliminate urban ghettoes. For one thing, the blighted area itself will, through concerted and coordinated action, become a more desirable place in which to live. But obviously we cannot be content with reclaiming such areas without other actions. Such programs must proceed in tandem with simultaneous moves to open up housing occupancy to all potential customers throughout the whole metropolitan area. Housing choices must be maximized and this means not only making central city areas more attractive for any who wish to live there, but also insuring that suburban housing is available for those who can afford it, or, with subsidy, wish to live there. THE URBAN DEVELOPMENT BILL-METROPOLITAN PLANNING (Excerpts from an address by Robert C. Weaver, Secretary, Department of Housing and Urban Development, before the American Society of Planning Officials, Philadelphia, Pa., April 18, 1966) Before supplemental grants could be made through title I, it must be shown that the area has a metropolitanwide comprehensive planning and programing operation which provide an adequate basis for determining the location, financing. and scheduling of the public facilities and land development needed for sound growth. Moreover, there must be adequate governmental administrative arrangements for the execution of all such development in full accordance with the plan. Thus we intend to press for not only a higher order of planning, through strengthened requirements and coordination, but also for more effective metropolitan development. We shall insist upon administrative arrangements that work, without rigidly specifying the form or character of such arrangements. We are interested in performance and effective results, not in pro forma devices, or development administration which is nothing more than a paper organization chart. Before I say a few words about the demonstration cities program, let me underscore some of the main points of the new Federal approach to metropolitan planning. |