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1. Programs of reserach and actior to improve our cities; these programs to be funded in proportion to the immensity of the task and structured with recognition of our nation's diverse culture, climate, resources, and occupational opportunities.

2. A program for coordination of all Federal urbar programs toward constructing and reconstructing complete neighborhoods and communities, in concert with local governments.

3. A program for revising our system of urban transportation permitting people to travel to work and play both safely and efficiently.

4. A program for increasing the scale and pace of urban land conservation, giving every citizen daily contact with nature.

5. A program to forge a plan of development for the nation to clarify goals, objectives, and priorities for the development of the nation's natural and urban environment."

Resolution No. 1

1967

Design in Suburbia

"WHEREAS, our suburban environment now contains more than half of America's urban population and has become ugly, disorganized, and without a sense of 'place' or community amenities; and

"WHEREAS, this condition results from concentration on the building of houses to the exclusion of other considerations: namely, a viable community plan, conservation and protection of open land and terrain, integration of roadways with land-use, design of parks, walkways, and recreational facilities, and a planned mixture of other building types to create an active rather than passive environment; and

"WHEREAS, a growing number of pioneering entrepreneurs, working closely with their architects, are creating imaginative and contemporary new towns and villages, some on scales economically feasible to many builders; and

"WHEREAS, this trend promises to create a renaissance of community life in America and reverse the growing impersonality of an increasingly rootless society; therefore, be it

"RESOLVED, That The American Institute of Architects in Convention assembled;

1.

Commends and congratulates those architects and entrepreneurs who are demonstrating the feasibility of creating an orderly environment and 'sense of place' for suburban citizens through the design of cohesive and meaningful communities; and

2.

Urges chapters and members of AIA to lend their influence to this movement, which promises a nationwide renaissance of town planning in America, and particularly to seek, through education and persuasion, those changes in local land-use and zoning regulations which are necessary to the realization of this worthy goal; and

3. Urges that the directors of federally-aided programs aimed at housing developments reevaluate their programs to the ultimate end of creating a community environment rather than encouraging the building of housing units alone."

Resolution No. 9

1965

White House Conference on Natural Beauty

"WHEREAS, individuals representing many groups and interests in
American life came together recently under the auspices of the
White House for a White House Conference on Natural Beauty; and
"WHEREAS, this unprecedented action was a signal step forward in
creating public awareness and discussion on the urgent matter of
improving the urban environment; and

"WHEREAS, beautification measures alone, while desirable and helpful, do not come to grips with the complex urban problems which now contribute to urban ugliness; therefore, be it

"RESOLVED, That The American Institute of Architects in Convention assembled, commends the President of the United States for creating the White House Conference on Natural Beauty and supports the actions taken at this Conference to protect the countryside, and at the same time, be it further

"RESOLVED, That The American Institute of Architects urges government at all levels to go further and correct the many aspects of our public policies which contribute to ugliness in our towns and cities, including tax laws which encourage inferior buildings and deterioration and make it less profitable to build well; inadequately considered design and location of highways and freeways within the city; lack of regulation of signs, overhead wires, and other eyesores which create ugliness in our communities and across the countryside; and general neglect of the principles and procedures of community design which can foster beauty and order in the communities of America."

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There can be no disagreement with the objectives at the hil de la crease the supply of desen, nousing and consolasku eXtane sing in prove laws relating to housing and urbar, devotaamani Cha999 J increased flexity in administering the programis ir laas greater uniformity of basic criteria and singlhosian and day), cềm tion of numerous separate programs, the proposed legislation mAY lead to:

1. Substantially greater private sector investment in low ami moderate-income housing.

2. Federal asssitance programs more responsive to the needs of local communities.

3. An expanded number of low-income families which can be ar commodated in both rental and homeownership programs Th clearly worthwhile goals. We would like to turn to some of the cifics for achieving them.

In title I (Mortgage Credit Assistance Act) of the propo lation, 50 existing HUD programs would be joduced in eight, w

existing authorities to four. Essentially, as we undestand the legislation, there would be two mortgage credit assistance programs, one for homeownership and one for rental housing. Under each of these, there would be one subsidized and one unsubsidized program, making a total of four basic programs.

This seems an eminently logical and long overdue arrangement for the Nation's federally assisted housing programs. And, if implemented effectively, such consolidation and simplification would have the strong support of our association.

Current federally insured and assisted housing programs are unduly complex and fragmented and, hence, discourage participation by many lenders, builders and developers. If truly simplified, these programs will attract greater private sector involvement and help insure their

success.

The concept of a flexible formula for establishing maximum mortgage amounts on home and multifamily loans according to designated "housing market areas" is a considerable improvement over current statutory dollar limitations, established without regard for area dif ferences. The success of this concept in practice will depend heavily upon how the flexible formula approach is applied. It will be important, for example, in establishing cost and mortgage limits for FHA eligibility, to develop several different types of "prototype units" of modest design in each housing market area. It will also be important to establish as many market areas as necessary to reflect adequately the different conditions in each area. Periodic review and updating to keep abreast of changing developments will also be essential.

For maximum administrative efficiency, local and regional HUD offices will need to have as much authority as possible. Moreover, a careful balance will need to be struck, in administering the new flexible formulae, between realistic adjustments in cost and mortgage limits and the need to discourage inflationary price advances. Recognizing these caveats, we believe the flexible mortgage formula approach has inherent merit and deserves to be implemented.

In the area of FHA mortgage interest rates and discounts, we agree with those provisions of this legislation which:

1. Authorize the Secretary of Housing and Urban Development to establish maximum rates at a level "necesary to meet the mortgage or loan market."

2. Permit the payment of discounts to be negotiated in the market place between the borrower, builder, or seller.

3. Establish an "experimental dual interest rate system."

The same provisions should also be made applicable to mortgages guaranteed by the Veterans' Administration.

Our association has long advocated the elimination of FHA/VA interest rate controls. Ceiling rates and control over payment of discounts have never really served their intended purpose of protecting the borrower against high interest costs. They have rather protected him out of access to FHA and VA loans when funds were channeled into other, higher yielding financial instruments, or have forced him to pay higher prices for housing which often included the cost of discounts. We believe that the ultimate solution to these inequities is an absolutely free market rate, which would eventually do away with the need for discounts.

Short of this desired solution, we agree with the interest rate and discount provisions, as indicated. Certainly the discontinuation of a statutory 6-percent interest rate on FHA and VA loans should be made permanent. The Commission on Mortgage Interest Rates. in its outstanding report of August 1969, showed beyond doubt how artificially low rates established by statute, relative to those determined in the marketplace, dried up the supply of mortgage credit.

With respect to the "dual interest rate system," we regard this as a proposal worthy of experiment if the Congress is still unwilling to provide for a completely free interest rate. This system offers a promising transitional step to a free market rate. We agree with the Commission on Mortgage Interest Rates, however, that this experiment should be conducted over a 3-year trial period. longer than is proposed in S. 3639.

We are aware that some objections have been posed to the dual rate system on the ground that it is unnecessarily complex and would prove confusing to market participants. Such fears, we believe, are unwarranted. Depending upon individual circumstances, we believe that lenders could readily decide whether to originate mortgages (1) at a market-determined level without discounts, or (2) at a ceiling rate established by the Secretary of HUD, with discounts. The choice is clear, voluntary, and uncomplicated.

Our association was among the first to urge the Congress to exempt insured and guaranteed loans from State usury laws. We are, therefore, pleased to endorse this provision. While some States exempt FHA and VA loans from usury ceilings, this is not widespread. As a result, unrealistically low usury laws have curtailed the supply of FHA and VA loans for single-family homes in several States. We strongly urge the Congress, therefore, to take action in this area.

With respect to mortgage insurance funds, we support the proposal to simplify the mortgage insurance provisions of the National Housing Act. We assume within this provision the identity of the FHA will continue to be maintained.

In the section on settlement costs, we are concerned about the practical workability of the provision requiring the Secretary to "prescribe standards governing the amount of settlement costs payable by the mortgagor ***" While we recognize the desirability of protecting mortgagors against unreasonably high closing costs, we wonder whether the wide variations which exist among the several States can be governed from Washington. At the very least, "standards" ought to be interpreted with some degree of flexibility. However well intentioned, rigid closing cost standards could well result in restricting mortgage credit flows into some States.

Carrying out the primary objective of consolidation and simplification of existing statutes, as we mentioned before in connection with the previous sections, we are in favor of this consolidation and simplification.

In the unsubsidized sector, we support the provision requiring the payment of closing costs in cash. These costs may now be included in the mortgage amount. The change will make the processing of loans more workable. In effect, closing costs will become the minimum required down payment in lieu of the minimum 3-percent down payment. under current law. We see no objection, moreover, in eliminating some

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