HOUSING AND URBAN DEVELOPMENT LEGISLATION

OF 1970

MONDAY, JULY 27, 1970

U.S. SENATE,

COMMITTEE ON BANKING AND CURRENCY,

SUBCOMMITTEE ON HOUSING AND URBAN AFFAIRS,

Washington, D.C.

The subcommittee met, pursuant to recess, at 10:10 a.m., in room 5302, New Senate Office Building, Senator John Sparkman, the chairman, presiding.

Present: Senators Sparkman, Tower, and Percy.

The CHAIRMAN. Let the committee come to order, please.

Our first witness this morning is Mr. George M. Raymond, president of the American Society of Consulting Planners.

Mr. Raymond, come around, please.

We have a copy of your prepared statement (see p. 1135). I will say this to all. Your statements will be printed in the record in full. You may handle them as you see fit.

We are glad to have you, glad to hear from you.

STATEMENT OF GEORGE M. RAYMOND, PRESIDENT, AMERICAN SOCIETY OF CONSULTING PLANNERS

Mr. RAYMOND. Thank you, Mr. Chairman. I will try to summarize the statement to try to save some time.

The CHAIRMAN. Very well.

Mr. RAYMOND. I want to express the appreciation of the American Society of Consulting Planners for this opportunity to present our views on pending housing and related legislation.

My name is George M. Raymond. I am the president of Raymond, Parish & Pine, Inc., a consulting firm in White Plains, N.Y. I am also a professor of planning and chairman of the department of city and regional planning at Pratt Institute in Brooklyn. And I appear here as the chairman of the American Society of Consulting Planners committee on housing and urban development.

First, Mr. Chairman, I want to express our amazement at the enormous and growing disparity between the amount of legislation enacted by Congress over the years and our ability to produce that which this legislation is intended to produce-namely, housing for low- and moderate-income families and a better urban and metropolitan environment.

Perhaps one of the most eloquent proofs of the crisis in which we find ourselves is the squatter movement in New York City which is

seizing abandoned buildings, and not only abandoned buildings, but also buildings which are simply vacant and city owned.

The late Charles Abrams in one of his books described the breakdown of authority which usually accompanies the proliferation of illegal property seizures in the underdeveloped world. Surely, Congress would want to do something to help before New York City becomes the Calcutta of the Western Hemisphere.

To build houses, we need more than good intentions embodied in housing bills, and to save American cities form total decay, we need more than complex bureaucratic structures administering complex processes. What we obviously need is sufficient dollars to enable us to do the job. If the funding deficiency is not made up soon, new legislation of the type which you are now considering will make very little difference to the rate at which we are currently descending into chaos and urban anarchy.

Even though our primary concern is for more funds, we fully recognize the validity of perfecting the tools we already have to optimize the operation of existing programs. The Housing and Urban Development Act of 1970 is a landmark attempt to bring about such an improvement.

We believe, however, this committee should make certain that the cost of such improvements will not be borne by those who can least afford it. In fact, we believe that asking low-income families to pay even as much as 20 to 25 percent of income for rent is totally inexcusable. If as claimed by the Bureau of Labor Statistics the poverty line income for a family of four is around $5,500, it is difficult to accept the provisions in the bill under which families under $3,500 would pay 20 percent and those over $3,500 would pay 25 percent of income for shelter. Families of low-income should be expected to pay not more than 15 percent, and families of moderate income not more than 20 percent if their other needs and especially health and education are to be even minimally provided for. We emphatically urge that all modifications of existing programs aim to lessen rather than increase the burden of housing costs on low-income families.

The proposed elimination of fixed statutory housing cost limits is a welcome realization of their longstanding interference with the localities' ability to produce adequate housing and, in some instances, any housing at all. The proposed legislation would substitute for it an approach which would recognize the widespread land and construction cost differentials in various parts of the country.

We wish to point out that construction cost limits can also come about indirectly through the statutory imposition of income limits for admission into various types of housing. If housing under a certain program cannot be built to rent at a level for which families within certain incomes can afford, no liberalization of construction costs will make it possible for a private builder to produce it. The immediate temptation is to request that income limits be determined on the basis of the rents which an assisted project must charge, given the particular subsidy formula under which it is built. But to do so would simply move the resulting housing further and further beyond the reach of the families which need it most.

Based on 35 years of experience with housing programs, it must by now be clear that there is only one way in which suitable housing

on the one hand, and low- and moderate-income families who need it on the other, can be brought together; and that is by aiming the program directly at families to be served. Land and construction costs are what they are area by area. Given their lack of responsiveness to housing needs and Federal housing policies, there seems to be little choice but to peg subsidies to a level which would enable the families for whom housing is intended to take advantage of it. If necessary, the subsidy formula should be broadened to include the possibility of a negative interest rate.

While looking into ways of simplifying housing programs, we also urge that you give serious consideration to the possibility of establishing a single Federal housing subsidy pool to be apportioned to families displaced by all public action and in ned of housing assistance to the full extent of the disparity between their income and the housing costs which they must meet.

All other approaches seem to always produce gaps which cause some families not to be able to take advantage of the programs. This problem has particularly bedeviled communities which find it necessary to displace families to make way for public improvements. Such displacement is based on geographic considerations rather than on neat income groupings.

To relocate displaced families whose incomes may range from low to moderate to middle in a satisfactory manner, the local public agencies must be permitted maximum flexibility limited only to the extent needed to assure that only families which cannot afford unassisted housing on their own will benefit. The least that could be done is to broaden eligibility for the section 23 leasing program to all displaced families unable to afford housing being produced in quantity or otherwise available in the community.

Now, I would like to turn to the proposed Urban Growth and New Community Development Act of 1970. In its breadth and scope and its understanding of the interrelatedness of urbanization symptoms of all kinds, in its insistence on the formulation of a national urban growth policy, we believe that this proposal is one of the best to come before you in many years. But while we unqualifiedly support its aims, we wish to put on record certain reservations based not so much on the substance of its provisions as on its timing and the present chances of its objectives being realized even if it were enacted.

As I already stated, it appears to us as it does to most other knowledgeable observers of the urban scene that our existing programa are much better able to help solve urban problems than they have been allowed to demonstrate. They are now, and have been for a long time, shamefully starved of funds.

In our present extremity, a highly expensive, untried, new communities program. no matter how desirable in theory, is definitely not what we need the most. This is especially so since ever, the most optimistic supporters credit it with the potential for serving at tre most only 10 percent of the Nation's foreseeacie population growth of the year 2000.

This is a most important consideration. It means that of the 106 or so million people who will be added to this country a pops, ation in the next 30 years, 90 million will gastata most pin our existing cities. Most of these will complicate di .

ready bewilderingly complex problems of our major metropolitan areas. This will occur no matter what is done or is not done, and even if the new communities program will succeed beyond our wildest expectations.

Under the circumstances, what we need and need desperately is to pump as much money as possible into our better existing programs to give them a better chance to work. These programs are, after all, the only thing we have to help us solve problems in these areas. Besides, even new communities, if they are to serve the needs of lowand moderate-income families, will also need public housing, rent supplements, and sections 235 and 236 type subsidies. There is nothing on the horizon now to justify the expectation that such subsidies will suddenly become available in huge quantities out in the country, in addition to the enormous subsidies and advances which will be needed to launch the new communities themselves.

In New York State, we have had the benefit of the existence of the New York State Urban Development Corporation for more than 2 years. This unique agency which is only one of its kind in the Nation is of precisely the type which S. 3640 hopes to encourage everywhere. It has gone through its growing pains and is now admirably staffed to produce housing for low- and moderate-income families in both central cities and, what is most important, in their suburbs as well. What it has found, however, is that its efforts in that direction are constantly thwarted by the chronic national shortage of urban renewal and section 236 subsidies and section 23 leasing funds. If housing will get a larger Federal allocation, would it not be best to put as much of it as we can into tested programs which are in demand, are ready to go, and can demonstrably serve present needs?

We do believe, however, that it would be most beneficial if as a first step Congress enacted that part of the new communities concept which deals with grants to corporations similar to the New York State Urban Development Corporation for startup purposes and for the financing of feasibility studies and plans. This should spur the several States to establish these corporations and this, in turn, would greatly increase our national capability to produce housing.

We would urge that Federal financing of such corporations be made available only if the powers granted to them by the State legislatures would be sufficient to assure that they would be capable of performing effectively in both the inner city and in the suburbs.

There are two other important contributions that Congress could make to the ability of such corporations to renew decayed areas of inner cities.

First, it should recognize them as the local public agency in all instances in which their presence in a community is requested by resolution of a local governing body; and, second, it should appropriate in addition to the normal urban renewal appropriations urban renewal write-down funds to be used exclusively in programs undertaken by such corporations.

But, despite the problems we see with the enactment of a major commitment to new communities, we fully agree that the concept is most challenging. Such communities have been successfully established abroad, and, even if they have only mildly alleviated rather than solved the urban problems of other western nations, they have