In the City of Cleveland recent economic trends can be expressed briefly by the following statistics:

1. The population of the City has declined from a high in 1950 of 915,000 people to an estimated 1970 population of 740,000 people.

2. The population of the City of Cleveland as a percent of Cuyahoga County has declined to less than one-half for the first time in our history, 3. The number of manufacturing production workers located in Cleveland as a proportion of the total metropolitan area has declined from 85% in 1947 to 60% today.

4. Retail sales in the City of Cleveland have declined from $1 billion 400 million in 1958 to $1 billion 250 million in 1963-a 13% decline in only five years.

5. Retail trade employment in Cleveland has declined as a proportion of our metropolitan area from 78% in 1954 to only 49% in 1963-a 296, decline in only nine years.

6. The vacancy rate in our housing inventory has declined from 1960's figure of 4.5% to 1.5% and the quality of the housing stock has declined as well despite all our efforts in community development.

7. Although we have begun more construction by dollar volume in the last three years than ever before in Cleveland's history, much of that construction has been devoted to downtown office buildings and institutional expansion. If we are not to be faced with the bleak future of a downtown based on office buildings and retail service facilities, but surrounded by a waste land in our residential neighborhoods we must take firm action to reverse these trends.

The creation of a Community Development Corporation seenis to offer hope for a major breakthrough. Under the major new powers proposed for the Corporation we are particularly interested in the power to acquire land on behalf of local public development corporations as well as the power to contract for the planning and construction of new communities when a local public authority approves new community development but lacks the ability to build it. We are particularly aware of the lack of success of Title IV of the Housing and Urban Development Act of 1968 which failed to stimulate significant development because it lacked recognition of three critical factors in large-scale development: the exhaustive planning required, the need for seed money, and the long term nature of projects.

We are particularly interested in the fact that H.R. 16647 apparently proposes to commit the federal government to expenditures in solving the problems posed by crisis-plagued urban areas which are far beyond the levels now anticipated by the Administration. Although no authorization for funding is established at this point, the next-to-final draft of the Bill seems to suggest $22 billion for each of the successive four years. We urge that these sums be appropriated ir, addition to a more realistic appropriation for the existing tools of the National Housing Act.

It is apparent that development of new communities under H.R. 16647 will render the present structure obsolete. Under H.R. 16647 the Development Corporation may award grants to eligible developers for 75% of the cost of an initial economic feasibility study, and additional expenditures for a detailed community planning study. Under the existing law, a developer must pay for his own planning studies which we understand often run to costs of $500,000 or more in a case of a formal New Town application. We also support the concept that the proposed corporation would be authorized to make 60-year loans for land acquisition, 40-year loans for developing the community's governmental and public service infra-structure, and 20-year loans for developing the community's local and industria! facilities. The thrust of this provision is to make more readily available the kind of "patient" money that is so essential to the development of new communities before a suitable cash flow return may be established. Our interest in these provisions is frankly selfish since Cleveland is now preparing a “pre-application" proposal to HUD for a New Town of 45,000 people on 1,000 acres of City-owned land, but outside of the City's corporate boundaries.

H.R. 16647 also requires the State adopt and follow consistent land use programs and policies rather than depend on the current situation where individual competitive programs are now the rule among competing municipal jurisdictions. Title III of H.R. 16647 offers the hope of a new, firm, and adequately funded commitment to urban problems. The main opportunities of direct interest to the

City of Cleveland are contained in Section 302 which amends Title I of the Housing Act of 1949 to provide for "inner-city development projects.” Under this section. Cleveland could seize development opportunities in:

& Infrequently used rail yards and rail storage facilities or vacated railroad rights-of-way

1 Air rights over streets, expressways, railroads waterways and similar

jecations.

Strips and plots of land which are vacant or occupied by functionally obsolete non-residential buildings or used for low-ntility purposes.

& Park and oper. space land which would be more appropriately devoted t uses consistent with present plans and needs.

e. Other land or space within the City which is vacant, under-used or mappropriately used

Expansion of eligible areas for write-down subsidies would be extremely beneficial. Let me stress one local example of a development opportunity for Finei ne proper vehicle now exists. A large manufacturing concern moved out of Cleveland last year for a suburban, one-story location. It left behind 10 acres of land located at 75th and Quincy) which are occupied by seven vacant and obsolete factory structures which are approximately 70 years old. The structures contain a total of 950.000 square feet of loft space which are compierely beyond the scope of acquisition, demolition and reconstruction because of the economics involved. To acquire, demolish present structures, and redevelop this land needs subsidies beyond present available levels. In order to adequately use land of this sort, which is now increasingly occupied in older cities by vacant and unmarketable factory, commercial, and residential uses, it is necessary to have an acquisition vehicle, to acquire them with ease and substantially write down the cost of preparing the land for new uses.

I wonid suggest that the scope and focus of the federal concern with urban reconstruction continue to be expanded beyond the provisions of this Bill to include at the earliest date possible the following three recommendations:

1. The elimination of the requirement for cooperation agreements for housing authorities within their territorial jurisdictions. At present, the law provides the need for such cooperation agreements because housing authorities traditionally make payments in lieu of taxes rather than direct property tax payments. I would propose that any development constructed by any housing authority anywhere go on the tax duplicate and be subject to Lormal property taxation. A federal subsidy should be used to pay the full property taxes to the jurisdictions involved. Hopefully, this will go far in removing the present economic objection to public housing in suburban

areas.

2. I recommend that the funds to be made available under H.R. 16647 be applicable anywhere in the local community, without restraint, so long as their application is in conformance with a locally approved plan authorized by the planning body and legislative authority of that community.

3. The rebuilding of our cities presents a major challenge to be innovative not only in techniques but in finding new sources of funding. I would join with others who have suggested the possible use of the Highway Trust Fund as a means of funding highway related objectives which are a part of urban renewal activities. This would include provisions for offstreet parking, the creation of new streets, and street improvements. Moreover, the construction of these types of facilities with Trust funds should be made eligible local non-cash-grants-in-aid.

Mr. Chairman. members of the Committee, thank you for this opportunity to present my statement.

Mr. SPARKMAN (for himself and Mr. BENNETT) introduced the following bill; which was read twice and referred to the Committee on Banking and Currency

A BILL

To increase the supply of decent housing and to consolidate, extend, and improve laws relating to housing and urban renewal and development.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Housing and Urban 4 Development Act of 1970".

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TITLE I-MORTGAGE CREDIT

MORTGAGE CREDIT ASSISTANCE ACT

SEC. 101. This section may be cited as the "Mortgage

8 Credit Assistance Act".

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4 (a) The term "first mortgage" means such classes of 5 first liens as are commonly given to secure advances on, or the 6 unpaid purchase price of, real estate, under the laws of the 7 State in which the real estate is located, together with the 8 credit instruments, if any, secured thereby.

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(b) The term "mortgage" means a first mortgage on 10 real estate (or for purposes of section 505 a lien or liens

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on real estate), in fee simple, or on a leasehold (1) under a lease for not less than ninety-nine years which is renewable or (2) under a lease having a period of not less than fifty

years to run from the date the mortgage was executed.

(c) The term "mortgagee" includes the original lender 16 under a mortgage, and its successors and assigns approved 17 by the Secretary.

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(d) The term "mortgagor" includes the original borrower under a mortgage, and its successors and assigns.

(e) The term "home mortgage" means a mortgage cov21 ering either a one- to four-family residence or a one-family 22 unit in a condominium.

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(f) The term "project mortgage" means a mortgage 24 covering multifamily housing, a land development project,