First, the Department will continue to strengthen the quality of planning both through its requirements for planning which are essential to specific development programs, and in its planning assistance functions.

Second, we will increasingly emphasize the critical relationships between planning and action. These are not merely two stops on the way to executing some specific project. They constitute a continuing process, of which the decisionmaking authority is the fundamental element. Both the Demonstration Cities Act and the Urban Development Act stress coordinated action for sound development, and both demand the full participation of those institutions which have the responsibility to the people for such development.

Finally, to insure that planning and development programing are, in fact, a continuous process, we do not intend to rest content with unworkable administrative arrangements. We will be pressing for the creation of new forms of management and leadership arrangements, where needed, to make planning and programing effective. Barriers between planning and action programing must be eliminated, and community goals must be realized through the process of comprehensive development.

Senator SPARKMAN. You make some comment about the supplementary grant. Frankly, I have not yet fully understood just what part the supplementary grant is to play. Do you understand that it is to be a part of the demonstration cities program, or is it to be a part of the existing urban renewal projects, or where is it to be applied?

Mr. WILLIAMSON. Your question, Senator, was whether this was to be an additional grant over the demonstration cities grant program? Senator SPARKMAN. Let me say Mr. Coan tells me it is for metropolitan planning and is separate and apart from the demonstration cities

program.

Mr. WILLIAMSON. Yes, sir. I think there is a provision that no local authority could get the two grants for the same project. I think there is a savings clause in there. I think they are directed at different

Senator SPARKMAN. The use of that word "supplementary" I think is the thing that caused me doubts. "Supplement" means add to something.

Mr. WILLIAMSON. The metro bill-we refer to it as the metro billwould give a supplementary grant to an existing grant for these aid programs. The demonstration grant is really not a supplemental grant because they are going to give the city money which it can use for any purpose whatsoever, even though unrelated to specific Federal grant-in-aid programs. So the demonstration grant is a gift of money for any purpose, and the metro bill is a supplementary grant that is tied to a particular program, where the program meets their criteria. But the grant would be available for the projects.

Senator SPARKMAN. I think I understand your point.

Mr. EMLEN. I would like to say, Senator, there has been in my association some confusion and reasonably intelligent members of our committee think the metropolitan planning part of this is a grant program for actual projects, when it is actually grant money for planning projects. It took me 15 minutes to convince somebody that under S. 2977, the Urban Development Act, these grants are not for projects but for the planning of the projects. It doesn't read very well in the act and people misunderstand the difference, I think. Senator SPARKMAN. Thank you.

Now on page 9 you call attention to the fact, and I recall you did this last year, you placed in the record a list of 61 new communities corresponding more or less to new towns. Have any been added during the year?

Mr. EMLEN. I refer it to Mr. Williamson.

Mr. WILLIAMSON. We are not aware of any. House & Home conducted a survey at that particular time of these new towns, and they were readily available. We don't have a supplementary list, although we are convinced that there is such a list and we certainly would make an effort to find it.

Senator SPARKMAN. In other words, you don't consider that those 61 started and just stopped there, but they are continuing to develop

new ones?

Mr. WILLIAMSON. We are convinced that they are all continuing to the degree that Reston and Columbia are continuing.

Senator SPARKMAN. Thank you very much, gentlemen. We appreciate your statement.

Next is Mr. Frederic A. Fay, National Association of Housing & Redevelopment Officials.

Mr. Fay, for the benefit of the record, give the name of the gentleman who accompanies you.

STATEMENT OF FREDERIC A. FAY, PRESIDENT, NATIONAL ASSOCIATION OF HOUSING & REDEVELOPMENT OFFICIALS; ACCOMPANIED BY JOHN LANGE, EXECUTIVE DIRECTOR

Mr. FAY. Mr. Chairman and members of the subcommittee, I am Frederic A. Fay, executive director of the Richmond (Va.) Redevelopment and Housing Authority, and president of the National Association of Housing & Redevelopment Officials. Accompanying me is Mr. John Lange, the executive director for the association, and it is in connection with the association's testimony that we appear before you today.

We are mindful, of course, of the hour, and we will, on that account, summarize our testimony if we have your permission to introduce a complete version of it, with the attachments, for the record.

Senator SPARKMAN. Let me say a complete copy, and your supplementals, if you desire, will be printed in the record.

Mr. FAY. Thank you, Mr. Chairman.

Senator SPARKMAN. And if you can summarize and cut down on it some, we will appreciate it.

Mr. FAY. We will do that, sir.

Senator SPARKMAN. Thank you.

Mr. FAY. We are here today to give our support to three bills under consideration, the Demonstration Cities Act of 1966, the Urban Development Act, and the Housing and Urban Development Amendments of 1966.

As we give our support to the new demonstration programs we express a firm belief that the existing programs of housing and urban development are the solid base on which the demonstration programs must be built. The prospects for these existing programs should be as exciting and promising as the prospects for the demonstration cities program. We should have assurance that they will be strengthened where necessary by amendments and funded at a level where they can fulfill their highest potentials, both as part of and independently of the demonstration efforts. It would be ironic and tragic if, in

emphasizing what cities can do under the demonstration cities program, we overlooked what is being accomplished even with limited funds under the existing urban renewal and housing programs. I will have some specific recommendations to make in this regard a little later in this testimony.

Mr. Chairman, since the introduction of the demonstration cities proposal early this year, NAHRO has been concerned, along with other interest groups, over what we feel are misconceptions concerning the nature of this proposal.

First, NAHRO feels that the proposal is for a collection of demonstrations to show what local plans, with adequate funding and coordination of Federal assistance, can accomplish in a short period of time.

We do not feel that a new superprogram to take the place of existing Federal assistance programs for housing and urban development is contemplated and would not support such a move at this time.

Secondly, NAHRO feels that, largely because of the misconception just mentioned, the discussion of the proposal has centered too much. attention on the adequacy or inadequacy of the suggested $2.3 billion for funding the program.

We feel that no sound and scientific calculation of total cost can be made until the plans for the selected cities are in and the magnitude of their proposed demonstrations are certified as workable by the Secretary. Until this is done, which will be next year, we feel that Congress should accept the administration's calculation as a first approximation, withholding a final decision on total cost until the demonstration cities have been selected.

Thirdly, NAHRO feels that the President's proposal for demonstration projects in our cities has been unfairly caught up in the antiinflation fever that is currently gripping the nation.

Of course, NAHRO supports all efforts, both public and private, to stem the tide of inflation before it eats away the gains of the past few years. However, we feel that Congress must realistically evaluate the need for massive spending in the area of housing and urban development in terms not only of its possible inflationary effect but also in terms of our commitments to the people of this Nation and our failure thus far to live up to those commitments. There is a great cost involved in failing to respond to growing social unrest among the poor which may far exceed the present cost of inflation.

In any event, NAHRO fails to see how the current proposal for demonstrations, which will not even begin until 1967, can be inflationary. The heavy emphasis on social programs as opposed to bricks and mortar, and the President's encouragement of expansion of the "soft" housing market which is also emphasized in the demonstration cities proposal, are completely consistent with our Nation's efforts to withhhold unnecessary public and private capital investments for the present.

We would also like to point out, especially in connection with the urban renewal program, that the release of funds for commitment is more important than funds for expenditures. Much of our housing and urban development activity is still in the planning stage and planning depends on firm commitments by the Federal Government that the funds will be available when needed. The same holds true

for drawing up plans for demonstration programs, or any other local program that depends on the Federal Government to provide a part of its funding.

In this regard NAHRO would like to suggest that the Congress seriously consider holding a series of hearings directed toward the possible creation of a set of national priorities for public expenditures, one of which should be the revitalization of our cities. We can no longer, especially with our large yearly increment in national income, expect the executive branch of the Government to make important decisions about priorities in Federal expenditures without the benefit of specific guidelines from the representatives of the people.

NAHRO feels that our commitments abroad will likely grow rather than diminish. Therefore, we feel it would be unrealistic to forgo the establishment of domestic priorities until such time as expenditures for the support of our foreign commitments can be reduced.

Mr. Chairman, this program of demonstrations is vitally needed, not because it will cure all the ills of all our urban centers; obviously it will not. It is needed to develop insight into new and more effective ways in which the Federal Government can assist our local communities. The demonstrations may give us the prototype for all future Federal urban assistance; only experience can tell.

In the meantime we must proceed with our established programs for urban development. We must improve them, alter them and, perhaps, discontinue some aspects of them. But, above all, Mr. Chairman, we must fund them.

We should now like to revert to our earlier point, our concern that existing Federal assistance programs, especially the new programs enacted in 1965, may not be funded adequately to realize their highest potentials.

The most critical need for funding as we see it is for the urban renewal program.

When NAHRO testified before this committee in 1965 we stated that the administration's request for $2.9 billion in capital grant authorization for urban renewal projects fell considerably below the demonstrated need for funds. We regret to inform you that we underestimated the seriousness of the shortage.

We have since followed the monthly figures on supply and demand for urban renewal funds. It is predicted that there will be almost $1 billion in urban renewal backlog by the end of this fiscal year. Additional demands on the same total renewal authorization will come from cities embarking upon concentrated housing code enforcement programs, demolition programs and rehabilitation grant programs, all authorized as grant-in-aid programs by the Congress last year. Requests for all these programs are now coming in at the rate of $200 million per month.

Although $725 million will become available for fiscal year 1967, this will be inadequate to provide for the applications that will be processed and ready for approval by July 1. In other words, cities that are sending applications in today will have to get on line and wait on line until July 1, 1967, before they may even begin planning projects that will be carried out some years later.

Thus we are faced with the most serious gap in the history of this program between the cities' needs and the Federal Government's supply

of urban renewal funds. We face that gap at a time when this bold demonstration cities program would create an immediate and substantial new demand for urban renewal funds. This will be over and above the new demands created by the passage of the 1965 act.

Mr. Chairman, this immediate need can be met out of the $2.9 billion authorized last year by the Congress to be used over a 4-year period, if the yearly restrictions on the use of those funds are eliminated. Those funds should be made available to the cities to use as their capabilities and needs demonstrate.

One additional word about this $2.9 billion. The commitment of this money is needed in the form of reservations to enable cities to start planning their projects. Actual disbursements come later. This is advance funding and it is vital for housing and urban development programs. Cities are reluctant to begin planning a project if they do not have assurances that funds will be available to carry it out. Until 1965 urban renewal was conducted through advance funding, defined as "contract authority." We urge the Congress to restore contract authority to the urban renewal program and to extend it, as well, to the demonstration cities program.

Mr. Chairman, now I would like to say a few words about current demand in the low-rent housing program. Commissioner McGuire of the Public Housing Administration has said that the backlog of public housing applicants on the waiting list is estimated at 500,000. Demand for public housing in this fiscal year will probably be the largest in any year since the passage of the Housing Act of 1949. The number of reservations issued in the first 8 months of the fiscal year which began last July total almost 45,000 units in 273 communities. This 8-month figure is larger than for any full fiscal year since 1950 when World War II housing backlog and passage of the Housing Act of 1949 were stimulating factors. The number of applications received in this first 8 months-over 84,000 units-is similarly the largest in 15 years. Even though the current pace of applications and reservations does not yet reflect the new proposals authorized in the 1965 Housing and Urban Development Act, the prospect is that the number of localities with reservations issued will be the second largest in public housing history.

I cite these figures to point out that this program is on the move, that the current annual projection of 60,000 units a year anticipated in the 1965 act may already be outdated, and the prospect is that the total authorization of 240,000 units for 4 years will undoubtedly be inadequate to meet the demand. Needless to say, current projections do not reflect the demands to be made on public housing under the demonstration cities program.

Mr. Chairman, I should like at this point to turn to S. 2977, the Urban Development Act.

NAHRO fully supports the President in his desire to provide a more realistic approach to problems that have, for some years now, defied solution within the limitation of traditional political jurisdiction.

In connection with S. 2978, the housing and urban development amendments, there are a number of sections that we feel are particularly important, and while we endorse the entire bill, we should like