remedying this situation, and I would urge this Committee to consider the inclusion in the 1970 Act of provisions as follows: 1. Where a state or local comprehensive plan unreasonably interferes with the provisions of low- or middle-income housing, zoning prohibitions based on such plans should be subject to being declared inapplicable as they apply to a project otherwise deemed feasible by the F.H.A. 2. Federal funds should be appropriated for nonprofit sponsors and other approved sponsors of low or moderate-income housing to defray the costs of extending existing public utilities, including educational and transportation facilities, and sewer and water lines. Present legislation, so far as I am familiar with Section 236 of the Housing Act and its predecessor, Section 221-D3, has only limited application in and around Norwalk. Of course, existing law requires that any proposed project comply with applicable zoning requirements. Empty land in central Norwalk is priced at about $60,000 per acre. This is far more than the F.H.A. can underwrite at approved densities for family units. Where land is less expensive (presently an acre sells for about $20,000 in suburban Wilton, Connecticut), the zoning density requirements again make assisted housing unfeasible. To the limited extent that F.H.A. insured housing is built, generally the obstacles of the high cost of innercity land seems less difficult to overcome than the zoning obstacles in the suburbs, and, by means of building to what I think is really an unconscionably high density, or through urban renewal funds, some small amount of constructions has been achieved in the downtown areas. A proposal has recently been made in Norwalk for building 50 units of cooperative, moderate-income housing in a moderate-density neighborhood. The application has been given F.H.A. feasibility approval, but there are obstacles which threaten it from which informative lessons can be drawn: Hostile neighbors first attempted to rezone the land so that multi-family housing could not be built. This failed. Then, existing city sewer facilities were shown to be of dubious adequacy. Now, lack of pressure in the existing city water supply system has required the sponsors to agree to pay for a 500-foot extension of the water main system and to install a pump and storage tank. Under existing legislation, these costs must be put into the mortgage and the cost of interest and amortization must be borne by the resident families. At the public hearing on the project, it became clear that a main reason for the opponents' resistance was fear that their homes would lose value because of the cooperative. They retained a real estate appraiser who testified that a multifamily development tends to devalue adjacent, detached residences. Present legislation makes no provision, insofar as I am aware, for compensation for any such losses, and the applicable principal of law provides that "incidental" damage of this sort is not compensable. III. The proposals that I suggest, quite clearly, are based on the view that it is necessary to build future moderate-income housing outside of the traditional central city areas where it has hitherto been located. The Committee, I am sure, will realize that many persons will question whether it is proper to move moderateincome housing into neighborhoods that heretofore have been homogeneous in their white, upper-middle class make-up. I think this is a question that must be faced, here and now. We should be very clear in specifying our alternatives. At present, in the areas zoned for low density which, in lower Fairfield County, comprise literally scores of contiguous square miles; there are virtually no black or Puerto Rican families. no apartments, and very few poor families of any race or national origin. The alternative is by no means a massive influx of the poor. I propose that the goal be the creation of clusters of 25 to 30 units of attractive, garden-type apartments at widely scattered intervals in such regions. At least 50 such projects are urgently needed in lower Fairfield County alone. They could be scattered and financed in such a way as to make really no difference to the residents of this low-density belt. Such a development would be stoutly opposed. But this Subcommittee is obliged to weigh the needs of our Country as a whole. So long as good jobs are permitted to come to Stamford, and Norwalk, and Bridgeport, workers will follow them from North Carolina, Georgia and Puerto Rico. So long as natural increase goes on, people will marry and need new places to live. If economies and zoning are permitted to exclude them from the suburbs, then these people will find a place in the central city. It will not be a good place, or healthy, or attrac 1 སྟ ཝཱ My proposal to provide a funi, te componente bågelosa, may vaine occasioned by the construction, o, assista; hap same sort of consideration. The diminution or valve to from the placement of multi-family housing, norrla & St costs of such housing I do not believe that well enn especially if there is a home-ownership formae the luded the cho m tive or condominium housing-will have much or an advaynada property values. In some cases, however that mist When son of me that the public benefits so greatly from the provision an 1 1. that the public could well afford to compensate private Prom loss they may suffer thereby, and that fusflee perputy This justice is especially compelling where suph faith and paid for their properties in reliance on woning tow single-family neighborhood. It now appears that such contrary to the public interest and should slotych suggested fund were allocated, not only could fabnem fa of public hostility to vitally needed housing could la mom haatiot My proposal that zoning laws be superceded to bruta way to the indirect costs of housing Often land to want to cause of the problem of disposing of waste and darau rat and lack of water. My proposals described above mix abund 1 remedying this situation, and I would urge this Committee to consider the inclusion in the 1970 Act of provisions as follows: 1. Where a state or local comprehensive plan unreasonably interferes with the provisions of low- or middle-income housing, zoning prohibitions based on such plans should be subject to being declared inapplicable as they apply to a project otherwise deemed feasible by the F.H.A. 2. Federal funds should be appropriated for nonprofit sponsors and other approved sponsors of low or moderate-income housing to defray the costs of extending existing public utilities, including educational and transportation facilities, and sewer and water lines. Present legislation, so far as I am familiar with Section 236 of the Housing Act and its predecessor, Section 221-D3, has only limited application in and around Norwalk. Of course, existing law requires that any proposed project comply with applicable zoning requirements. Empty land in central Norwalk is priced at about $60,000 per acre. This is far more than the F.H.A. can underwrite at approved densities for family units. Where land is less expensive (presently an acre sells for about $20,000 in suburban Wilton, Connecticut), the zoning density requirements again make assisted housing unfeasible. To the limited extent that F.H.A. insured housing is built, generally the obstacles of the high cost of innercity land seems less difficult to overcome than the zoning obstacles in the suburbs, and, by means of building to what I think is really an unconscionably high density, or through urban renewal funds, some small amount of constructions has been achieved in the downtown areas. A proposal has recently been made in Norwalk for building 50 units of cooperative, moderate-income housing in a moderate-density neighborhood. The application has been given F.H.A. feasibility approval, but there are obstacles which threaten it from which informative lessons can be drawn: Hostile neighbors first attempted to rezone the land so that multi-family housing could not be built. This failed. Then, existing city sewer facilities were shown to be of dubious adequacy. Now, lack of pressure in the existing city water supply system has required the sponsors to agree to pay for a 500-foot extension of the water main system and to install a pump and storage tank. Under existing legislation, these costs must be put into the mortgage and the cost of interest and amortization must be borne by the resident families. At the public hearing on the project, it became clear that a main reason for the opponents' resistance was fear that their homes would lose value because of the cooperative. They retained a real estate appraiser who testified that a multifamily development tends to devalue adjacent, detached residences. Present legislation makes no provision, insofar as I am aware, for compensation for any such losses, and the applicable principal of law provides that "incidental" damage of this sort is not compensable. III. The proposals that I suggest, quite clearly, are based on the view that it is necessary to build future moderate-income housing outside of the traditional central city areas where it has hitherto been located. The Committee, I am sure, will realize that many persons will question whether it is proper to move moderateincome housing into neighborhoods that heretofore have been homogeneous in their white, upper-middle class make-up. I think this is a question that must be faced, here and now. We should be very clear in specifying our alternatives. At present, in the areas zoned for low density which, in lower Fairfield County, comprise literally scores of contiguous square miles; there are virtually no black or Puerto Rican families. no apartments, and very few poor families of any race or national origin. The alternative is by no means a massive influx of the poor. I propose that the goal be the creation of clusters of 25 to 30 units of attractive, garden-type apartments at widely scattered intervals in such regions. At least 50 such projects are urgently needed in lower Fairfield County alone. They could be scattered and financed in such a way as to make really no difference to the residents of this low-density belt. Such a development would be stoutly opposed. But this Subcommittee is obliged to weigh the needs of our Country as a whole. So long as good jobs are permitted to come to Stamford, and Norwalk, and Bridgeport, workers will follow them from North Carolina, Georgia and Puerto Rico. So long as natural increase goes on, people will marry and need new places to live. If economies and zoning are permitted to exclude them from the suburbs, then these people will find a place in the central city. It will not be a good place, or healthy, or attrac tive, or private, but they will and do find a place. As a consequence of the demand, rents rise and families are required to bring in relatives and friends to share the expense-and so the cycle proceeds. It is, of course, possible to redevelop the overcrowded slums, but the relocation problems in so doing are overwhelming, and, in a real sense, to do this is merely "borrowing from Peter to pay Paul." It is clearing space to provide space for the same families. What is really needed is to find new space. The only places to look for new space are those areas which are now zoned for lower densities. This means in the suburbs. Is this fair? Is this fair to the families who have often struggled and saved so that they could leave the apartments of the Bronx, who have dreamed of a little house in the country? I think it is. It is fair because it is in these families' interests to live in a Nation free from the threats that further overcrowding presents, and fair because the effects on the families already there can, and should be minimal. For example, Wilton, Connecticut is a community of 31.3 square miles in area. If it were to accommodate 300 units at a density of 8 units per acre, approximately 28 acres would be consumed, or about 1/20th of a square mile. It can easily be seen that such a small scattering need not bring much change into the style of life of the town as a whole. Likewise, North Stamford, New Canaan, North Greenwich, Weston and Westport, Connecticut, which comprise well over 100 square miles, are now zoned in such a manner so as effectively to exclude families of moderate means. This is too large an area from which to bar average American families. In each of those towns, provisions should be made for allowing at least small samplings of the average family. The relief to the population pressure of central Stamford and Norwalk would be striking, if only a few thousand units were scattered through that broad area, and any inconvenience to present residents would be slight. IV. The specifics of my proposals are designed to insure that the effect of the introduction of assisted units will be small indeed. At present, if 300 units of such housing were constructed in some of the towns I have mentioned, it might well have adverse consequences. New schools would have to be built; existing water supplies might be overtaxed; and traffic and other facilites might prove inadequate. It is not enough simply for the Federal Government to be committed to bearing only the direct financial costs of building housing. I believe housing construction has been so discouragingly slow largely because of the failure to recognize that the construction of new housing inevitably involves related costs, which are often quite considerable. To my knowledge, the present Section 236 Program, and its antecedents, do not take this into account. Until the Federal Treasury is willing to relieve localities of such connected costs, little progress can be expected. Undeniably, this proposal could double the per unit cost to the Federal Government of new low and moderate income housing. It must be left to the Congress to decide if the need for an adequate volume of new housing is worth this cost. My proposal to provide a fund to compensate neighboring owners for loss of value occasioned by the construction of assisted housing really stems from the same sort of consideration. The diminution of value to single family residents from the placement of multi-family housing nearby is another species of indirect costs of such housing. I do not believe that well-run, low-density apartments, especially if there is a home-ownership feature included in them—such as cooperative or condominium housing-will have much of an adverse effect on neighboring property values. In some cases, however, they may. Where they do, it seems to me that the public benefits so greatly from the provision of adequate housing that the public could well afford to compensatė private persons for any financial loss they may suffer thereby, and that justice requires that the public do so. This justice is especially compelling where single families originally purchased and paid for their properties in reliance on zoning laws which guaranteed a single-family neighborhood. It now appears that such vested guarantees may be contrary to the public interest and should selectively be abrogated. If the suggested fund were allocated, not only could fairness be satisfied, but a source of public hostility to vitally needed housing could be much calmed. My proposal that zoning laws be superceded is likewise related in a limited way to the indirect costs of housing. Often land is zoned for low-densities because of the problem of disposing of waste, and because of inadequate roads and lack of water. My proposals described above are aimed at coping with this basis for low-density zoning. Unless some such proposals are attempted, the cost to local taxpayers of providing public facilities for assisted housing may be prohibitive. However, it should not be overlooked that many towns do not wish to have more modern facilities than they now do. There is a psychological attachment to the idea of a small, unhurried community. This attachment dies hard and, indeed. I feel it myself. It is one of the reasons that so many people like me have settled outside of the very large cities. A discreetly scattered introduction of moderateincome apartments, however, would by no means transform these communities. The resistance to their construction in residential towns is largely based on the fear that once the "gates are opened" apartments will come in a flood. Of course, this need not be so long as the Administration exercises a proper discretion. Experience shows that it is very difficult to discuss limitations on new moderate-income construction with the potential neighbors. The atmosphere be comes too emotional. Yet, to me, the urgent need of our cities for new housing seems more imperative than the fears and reservations against apartments in suburbia. So long as the neighbors are permitted through the zoning laws to enforce economic segregation there will be little integration in the suburbs and the effects of the housing shortage must grow worse. I recognize that the implications of the proposals contained herein are farreaching and must be extensively explored, including particularly the question of how widely assisted housing should be scattered and how such a determination is to be made and enforced. The urgency of the problem requires that expeditious work be done in this field now. STATEMENT OF RALEIGH W. GREENE, CHAIRMAN COMMITTEE ON LEGISLATION, NATIONAL LEAGUE OF INSURED SAVINGS ASSOCIATIONS Mr. Chairman and members of the Subcommitee. My name is Raleigh W. Greene. I am President and Chief Executive Officer of the First Federal Savings and Loan Association of St. Petersburg, Florida. I also have the honor of being Chairman of the Committee on Legislation of the National League of Insured Savings Associations, a national trade association serving the savings and loan industry. In that capacity it is my privilege on behalf of the National League to comment on some of the general housing bills pending before the Subcommittee. INTRODUCTION By way of introduction, I would like to note the major role played by the savings and loan industry in providing housing finance. Federal Home Loan Bank Board statistics show that in calendar year 1969, savings and loan associations made $21.8 billion of home loans, resulting in their portfolio holdings of $140.2 billion of such loans. (Federal Reserve Bulletin, June 1970, page A51-Table "Mortgage Activity of Savings and Loan Associations") Despite the difficulties encountered in attracting savings funds in 1969, this investment record compared very favorably with acquisitions by the savings and loan industry of $21.9 billion of such home loans in 1968; $20.1 billion in 1967: and $16.9 billion in the poor year 1966. (Federal Reserve Bulletin, June 1970. page A51-Table "Mortgage Activity of Savings and Loan Associations") Of an estimate $314.1 billion of residential mortgages outstanding at the end of the third quarter of 1969, savings and loan associations alone held in portfolio $138.6 billion, or 44% of the total outstanding. (Federal Reserve Bulletin. June 1970, page A52-Table "Mortgage Debt Outstanding on Residential Properties" and page A51-Table, supra) I respectfully submit that this record of acquisition of $21.8 billion of home loans by savings and loan associations compares very favorably with the issuance of $9.1 billion FHA-insured mortgage loans in calendar year 1969 and $4 billion of VA-guaranteed mortgage loans in that year. (Federal Reserve Bulletin, June 1970, page A52-Table "Government-Underwritten Residential Loans Made.") The latest published material available shows that by preliminary estimate at the end of May 1970, savings and loan associations held in portfolio $141.9 billion of home loans, of which $8.3 billion were FHA-insured, $7.7 billion were VAguaranteed and an overwhelming $125.8 billion were conventional mortgages. Selected Balance Sheet Data-May 1970-Federal Home Loan Bank Boardble 1) The figures bear witness to the fact that the savings and loan industry |