APPENDIX II.-NAMES OF TOWNS, OUTSIDE OF URBAN AREAS, POPULATION 5,500 TO 10,000, BY STATE 1960 CENSUS Continued

APPENDIX II.-NAMES OF TOWNS, OUTSIDE OF URBAN AREAS, POPULATION 5,500 TO 10,000, BY STATE 1960 CENSUS-Continued

NEW YORK COUNTY LAWYERS' ASSOCIATION-COMMITTEE ON FEDERAL LEGISLATION

REPORT ON LEGISLATION TO CREATE A NATIONAL DEVELOPMENT BANK Legislation has been introduced calling for the creation of a national development bank to finance construction of low and middle-income housing. The creation of such an institution would have many advantages and could help to implement recommendations which have been made by this Committee and other Bar groups. Title V, H.R. 17495, 91st Cong., 2d Sess. (1970) to establish such a bank was approved by the Housing Subcommittee of the House Committee on Banking & Currency but deleted by the full Committee. We believe that revision of the structure of the bank as proposed in Title V could obviate the grounds for objections raised to the proposal as originally framed and contribute to meeting its great objectives.

It requires no emphasis that the rebuilding of blighted areas is of critical importance today for many reasons, among them the need to create a decent environment for all, the need to reverse the flight from our inner cities, the need to provide new sources of jobs both within the building industry and for those previously outside the industry, and the need to provide new evidence of national commitment in the domestic field.

A development bank can also finance rebuilding in all areas, including inner cause of its power to make long-range commitments of financing for comprehensive rebuilding in blighted areas. With such commitments, leverage will exist to achieve the high objectives of "Operation Breakthrough" in modernizing building methods at low cost through mass production and with a gain rather than loss in job security, and the objectives of the 1968 housing law of construction of 2.6 million units per year.

A development zank can also finance rebuilding in all areas, including inner cities, suburbs and rural areas, and for persons of all backgrounds, thus establishing a program truly for the benefit of all and with a corresponding broad base of appeal.

Because of the powerful nature of this engine if fully used, it is critical that it be connected to a national rebuilding effort of sufficient scope which will overcome the defects of previous housing programs. The Housing and Urban Development Act of 1968 called for a 10-year program for rebuilding the nation's cities. This approach was adopted because:

"The goal of a decent home and suitable environment for every American family can best be achieved through a definite plan . . . for the effective utilization of available resources and capabilities... in both the public and private sector period of 10 years."

over a

In 1968, this Committee called for long-range commitments in federal housing programs in order to achieve such ends. We said:

"In order for such a plan to be effective it must be based on firm commitments and long-term planning. A plan which cannot be counted on by those engaged in carrying it out would be ineffective.

"Long-range commitments under federal programs are not new. Under the federal highway program, contracts running many years into the future must be entered into in order that large scale highway construction can proceed in an effective and economical manner. United States Code, Title 23, Section 118(b) provides for such contracts running far beyond one year. Under the demonstration Cities and Metropolitan Development Act of 1966, funds appropriated are to remain available until expended.3

"In the case of housing today, as President Eisenhower said at the outset of our present federal highway program in 1954: 'Large-scale improvement is needed simply to remedy deficiencies not met in the past.'

"Effective rebuilding in the central cities will benefit every group in our society. Residents of the central city will obviously suffer until it is achieved.

"If the central cities are not rebuilt, the suburbs will lose their suburban character. Increasing numbers will move to the suburbs merely to escape intolerable conditions in the inner cities unless the central cities are made attractive for those who wish to live there. Blight, like rot on an apple in a barrel, is bound to spread. . . .

1 Public Law 90-448. Title XVI (1968).

S. Rep. No. 1123. 90th Cong.. 2d Sess. 119 (1968).

380 Stat. 1259-60, 1264 (1966).

1954 Public Papers of the Presidents par. 102, p. 460.

"In the absence of long-range funding, there is little job security in the building trades. Each construction project is separate and there is no assurance of continued employment when it is completed.

"Unemployment is often high and jobs sporadic. Employees in the building industry therefore use every means that they can to protect their jobs. As a result, it is more difficult than it otherwise would have to be for newcomers to enter the industry.

"Likewise, employees concerned for their jobs are obviously going to be reluctant to accept new technologies which might reduce work necessary for construction of buildings. This is reflected in union rules. It is also reflected in the great variety of local building codes.

"If long-range commitments were made for rebuilding entire parts of cities on a comprehensive basis, the following advantages could be achieved:

"1. On the basis of long-term contracts given to contractors, building contractors could be enabled or required to hire employees on a longer term basis. "If this were done and the program were sufficiently extensive to assure jobs for the labor force in the industry, the reasons for resistance to technological advance and to the bringing in of newcomers to the industry would be largely obviated. As part of such a program, Congress or the agency administering the program could require or expect that restrictions on building methods or on what work particular employees are permitted to do-primarily designed to protect jobs-would be waived in return for the job benefits which the employees would receive.

"2. Transportation, education, shopping, entertainment and other facilities could be built into the housing as constructed, generating exciting diversity and replacing the drab and repetitious architecture of many existing projects.

"3. Based on continuation of present methods and the present way of doing things, prospects for advances in effective building technology are not bright." But if institutional barriers were overcome, the opposite would be the case.

"The reduction in cost achieved through long-range planning and use of the most efficient technologies would permit lower rentals or purchase price payments for lower-income persons, with less and perhaps in some cases no direct subsidy.

"Assistance for low-income residents could be provided by means of a sliding scale of payments for residents based on income of the resident and the quality of the accommodations.

"This would eliminate unfortunate features of old-style public housing where there has been a fixed income ceiling. Residents' incentive to improve their earning power is stifled by such a ceiling. It promotes a high turnover, low morale and high crime rates. As part of such a program, persons in ghetto areas should be enabled to own their own homes where this would not otherwise be possible.""

This Committee's views were in accord with those of a group of civic leaders in the greater New York area known as the Community-Wide Panel which was formed to seek to bring together previously opposed views.' The Panel unanimously urged long-range commitments for rebuilding as a means of promoting job security, opening up use of the most modern technologies, and developing new job opportunities in the urban core. The Panel's statement received the support of important segments of the building and construction industry and construction unions. The views of this Committee were also commented upon

8

5 See Schlefer, Industrialization of Housing: Today's Potential (Library of Congress, Legislative Reference Service 1967): compare NLRB v. National Woodwork Mfrs. Ass'n, 386 U.S. 612 (1967) (union rule prohibiting use of prefabricated doors).

Bulletin of the Committee on Federal Legislation. New York State Bar Association 16-19 (January 1969), 115 Cong. Rec. No. 33, pp. S2015, S2018 (daily ed. 2/25/69). Footnotes from this report have been renumbered."

See also "Urban Highways," Hearings before the Subcommittee on Roads, Committee on Public Works, United States Senate. 90th Cong., 2d Sess. (1968), Part 2. pp. 208-220, 374-379 (May 1, 7, 1968) (testimony of Hon. Charles B. Rangel and Vincent L. Broderick). Among the supporters of the Panel's proposals were citizens from widely differing segments of the community, including Monsignor Harry J. Byrne of the Archdiocese of New York; Rev. Lawrence E. Beebe of the Unitarian Church of All Souls; then City Councilman Edward I. Koch: Vincent L. Broderick author Ralph Ellison; Harold Baer. Jr.. former Executive Director of New York City's Civilian Complaint Review Board; Joseph Overton, President of the Negro Labor Committee: former Assistant U.S. Attorney Moses L. Kove; Assemblyman Charles B. Rangel of Manhattan.

Compare "Job Security in the Building Industry-and High Quality Low Rent Housing," 18 Labor Law Journal 468 (Commerce Clearing House. August 1967).

⚫ Endorsement was received from Peter J. Brennan, President of the Building and Construction Trades Council of New York, and from the Board of Governors of the Building Trades Employers Association of New York City.

favorably in an editorial in America magazine (8/17/68, p. 93).

The Committee on Housing and Urban Development of the Community Service Society of New York has likewise endorsed the concept of working toward a sliding scale of payments by residents of publicly aided housing in lieu of fixed income ceilings. The Society urged abolition of income limits for those living in such housing and urged instead that those whose incomes go up be asked to pay an additional amount to help build more housing or reduce costs for less-well-off residents.

Apart from Title V of H.R. 17495, introduced by Representative Wright Patman, Chairman of the House Committee on Banking and Currency, proposals for development banks have been offered by others including Senator Jacob K. Javits, Senator Sparkman and Representative Pepper. S. 409, 91st Cong., 1st Sess. (1969) and H.R. 5549, 91st Cong., 1st Sess. (1969), the Sparkman and Pepper bills, create a development bank for financing state and local investments in public facilities but do not apply to housing. We believe that the framework of S. 409 and H.R. 5549 could be expanded to include long-range commitments for financing of rebuilding with minor changes. Title V of H.R. 17495 represents a step forward in applying the development bank concept to housing. We recommend revision of Title V of H.R. 17495 as originally drafted in the following respects:

(1) The provisions for compulsory purchase of bank obligations by private foundations, pension funds and the like should be deleted because of their discriminatory character and disruption of the operations of such foundations and funds, and because these provisions inevitably generate unnecessary hostility to the otherwise unexceptionable purposes of the bill.

(2) Structuring the authority of the bank in terms of housing for specified income groups tends to perpetuate the evil of income ceilings and income limitations previously referred to by this Committee and others. We agree that no subsidy is needed by upper-income residents; they should be permitted to remain in rebuilt housing but required to contribute to the cost of further new construction. Only by elimination of invidious income limitations can rebuilt housing ultimately help to provide decent neighborhoods with dignity for all rather than perpetuation of blight with all of its evil consequences.

(3) It is vital in our view that the powerful engine of a development bank be connected to a long-range rebuilding program. To continue the use of existing outdated methods would only make it more difficult and costly to overcome those methods in the future when truly modern twentieth century building procedures must be developed, adopted, and made available for the benefit of all. Such a longrange program should include proper provisions as recommended by the President's Commission on Urban Problems (Douglas Commission) 10 and others for overcoming technological and jurisdictional restrictions in return for job security. preemption of local building codes when necessary, and a new approach to outdated tax systems as applied to rebuilt housing.

In our view, a national program based on long-range commitments is necessary in order for national action to be effective. One means of arranging long-range commitments would be through the creation of a national development bank to finance at low interest rates construction under a national program of the type recommended here, using the most modern methods.

In the absence of long-range commitments providing expanded jobs and job security for employees, they will necessarily resist the deletion of code requirements which protect existing jobs. In our view it would not be politically or industrially feasible to seek to remove existing job protections while putting nothing in their place. On the other hand, under a program of long-range commitments, employees could be hired for substantial periods of time and the size of the program could also assure high employment in the industry. At the same time, such a program would open up new job opportunities in the industry in the urban core. Under these circumstances, federal preemption " of restrictive provisions of local building codes on federally sponsored projects would not threaten the job security of employees. If long-range commitments providing job security were initiated, it might also be possible to obtain waiver of some union rules in exchange for the availability of additional jobs. As part of a long-range program. other improvements such as use of a sliding scale of payments, mentioned earlier, and new emphasis on social services in publicly aided housing could be made.

1 Report of the National Commission on Urban Problems (1968).

E.g., Mayo v. United States, 319 U.S. 441 (1943); Johnson v. Maryland, 254 U.S. 51