EXHIBIT FOUR A FEDERAL OFFICE FOR GROWTH POLICY PLANNING A FEDERAL OFFICE WITH ADEQUATE STAFF AND RESOURCES IS NEEDED TO The Office would be organized to carry out essentially two types of functions: first, appraisal of goals and priorities at the national level, and second, liaison among the participating bodies. On the assumption that all matters which are germane to growth policy should come within the purview of this operation, I have included provision for consideration of foreign as well as domestic goals and priorities. All of us are aware to a greater or lesser extent of the impact of trade policies, military activities, and foreign aid and investment on development here at home. This formulation suggests that it is time to begin to make some of the choices in context, rather than on an ad hoc basis. The liaison side of the chart is more or less self-explanatory, although perhaps one comment is needed. What bodies would perform the functions indicated for the regional, or multi-state level would not be clear at the outset. Presumably there could eventually be multi-state bodies modeled on the Appalachian Regional Commission. In the early stages, however, they might have to be simply regional arms of the central office. One final comment on Exhibit Four. Most of the kinds of thinking and action I have included in the proposed federal office are already being carried out somewhere in the federal government-in the National Security Council, the Domestic Council, the Office of Management and Budget, the Department of Housing and Urban Development, this Committee, the Joint Economic Committee, and the House and Senate Committees on Government Operations, to mention only a partial list. One of the chief contributions of this office would be to relate these activities to each other from the point of view of growth policy, in most cases by establishing close working relationships, but perhaps in a few instances by the transfer of functions to the new office. What, now, can be said about how these general thoughts on growth policy and its formulation relate to the bill under consideration, S. 3640? While I am in agreement with the findings and intent of this bill. I have some reservations about the approach which is provided for in Sections 102, 103, and 104, establishing a three-man Council on Urban Growth and giving it certain powers and duties. I also have some reservations about the language in Section 101 (d), which sets forth what Congress intends the national urban growth policy to accomplish. The functions proposed for the Council can be summarized briefly. Broadly speaking, the Council would be directed to work along two lines. One line would be to monitor urban growth in general, and federal efforts to deal with it in particular, in order to have some perspective on existing and emerging problems and how well or how poorly we are handling them. The other line would be to monitor interstate, state, local, and private plans and programs in order to evaluate their relationship with federal programs and policies, and to estimate current and foreseeable needs of these federal programs. Biennally, the Council would prepare a report for the President, which he in turn would transmit, with recommendations, to the Congress. [Sec. 104 and Sec. 105.] You will note that this approach is kept strictly within the federal family, so to speak. There is no provision expressed or implied for cooperative working relationships with state and local counterparts. Furthermore, although it can be argued from the language of Section 104 (4) that the Council is to be selective in estimating needs, since presumably they would be for plans and programs “... affecting the policy described in Sections 2 and 101 and developed pursuant to this Act . . ." nevertheless, I have doubts about how far the Council can go in the absence of such working relationships. For the cold facts are, if my apprehensions are correct, first, that a national urban growth policy will demand choices-sometimes very hard choices; and second, that these choices cannot be made individually by any single entity. Rather, they must be made jointly, by all those concerned, in view of all available facts and all available alternatives. This failure of the Act to build in any joint choice-making procedure leaves doubts in my mind as to whether and how well the Council, the President, and the Congress will be able to achieve their intent, especially as expressed in Section 101. I hope the Committee will give serious consideration to ways in which the Act might be strengthened in this regard. In conclusion, let me simply mention my reservations about Section 101 (d) concerning the intended accomplishments under the Act. If we are going to have to make choices, and to make them collectively, I think we are going to have to realize that no one group may be fully happy with the results, even though a given choice is the best that can be made under the circumstances, and all parties can live with it. I think we are going to have to be rather humble about our ability to control certain phenomena, such as fertility and migration, even though we are sure we know in what way they ought to be directed. I think we are going to have to make sure that our sights are set squarely on the achievement of social justice, not merely the avoidance of conflict. Perhaps above all, we are going to have to learn to be philosophical about our shortcomings-to be able to pick ourselves up, dust ourselves off, and start over again when, in the words of a certain well-known poet, "The best-laid schemes o' mice an' men/Gang aft agley..." Thank you. STATE OF NORTH CAROLINA, GOVERNOR'S OFFICE, Hon. JOHN SPARKMAN, Chairman, Senate Banking and Currency Committee, DEAR SENATOR SPARKMAN: North Carolina is suffering from a severe shortage of housing for low and middle income families. I therefore support the administration's housing bill (H.R. 16643 and S. 3639) because I think it will result in increased housing production in the State. My only reservation about the bill is that its provisions do nothing to encourage state housing programs. A member of my staff has worked with a housing committee of the Council of State Governments in developing the enclosed amendments which if included in the bill, will cure that deficiency. These amendments will provide funds to assist state housing programs, assure FNMA priority for state housing development corporations' mortgages and encourage the states to take on greater responsibility for their housing problems. North Carolina has an embryonic housing development corporation and a small staff of housing specialists. These proposed amendments would assure financial support to the existing programs and enable the State to embark on a more ambitious program. I urge your support for the enactment of this bill with these suggested amendments. Sincerely, ROBERT W. SCOTT. RECOMMENDED AMENDMENTS TO H.R. 16643 AND S. 3639, "HOUSING AND URBAN DEVELOPMENT ACT OF 1970" I. STATE ASSISTANCE IN THE ADMINISTRATION OF FEDERAL HOUSING PROGRAMS On page 148, Title VI, add a new section as follows: "Sec. 608. Not withstanding any other provision of law, the Secretary shall prescribe necessary regulations to enable a State, upon application, to participate jointly with the Secretary in the exercise of his authority granted under Titles I, and II of this Act." Titles I and II of the proposed bill would authorize the Secretary to administer the basic housing programs assisted by the Department. The proposed amendment would enable the Secretary to constructively utilize the manpower and expertise of state government personnel. Specficially, the Secretary would be able to call upon the States to assist him in the establishment of development costs and maximum mortgage amounts for single and multifamily mortgages (Section 3), the contracting to make periodic assistance payments on behalf of low-income homeowners and owners of multifamily housing projects (Sections 402 and 502), and the making of loans or annual contributions to public housing agencies (Title II). In all cases the Secretary would establish by regulation the terms and conditions under which he would receive such assistance, and the States would be given the option of offering such assistance to the Secretary. II. STATE TECHNICAL ASSISTANCE FOR LOW-INCOME HOUSING SPONSORS On page 138, line 14, Title VI, Section 601 (a), after the words "The Secretary is authorized to" delete the words "provide or contract with public or private organizations" and substitute in lieu thereof the following: "make grants to states" And further, on page 139, line 14, after Sec. 106(a)(3) add a new paragraph as follows: "(4) There are authorized to be appropriated for the purposes of this subsection not to exceed $15,000,000 for the fiscal year ending June 30, 1971 and not to exceed $25,000,000 for the fiscal year ending June 30, 1972, and such sums as may be necessary thereafter." Section 601 would provide for advice and assistance with respect to housing for lower income families. The Section would provide for three administrative mechanisms whereby the Secretary could provide technical assistance to local housing authorities: Section 601 (a) through contractural agreements with construction representatives during project development; Section 601(b) through loans to nonprofit and cooperative organizations; and Section 601 (c) through grants directly to the project sponsor. Section 601 (a) is based on Section 106(a) of the Housing Act of 1968. Construction representatives are allowed to charge a fixed fee to the project sponsor (usually three percent of project costs) to pay for technical services. In the past, program receipts have been used to cover those expenses rather than use separately appropriated administrative funds. The proposed amendment would allow the Secretary to make grants to the States to provide predevelopment technical assistance to local public housing sponsors. It is anticipated that states not currently having the personnel and competence to provide the necessary technical services will use its grant to fund such services through a construction representative. This amendment would have the effect of enabling the Secretary to assure that local public housing sponsors have the benefit of coordinated relevant state services in the very early stages of project development. By separating out technical services into a regular appropriation item, the Congress and the Secre tary would be assured that project costs are not inflated by unnecessary professional fees. III. USE OF STATE FUNDS FOR SINGLE FAMILY MORTGAGES On page 27, line 2, Title I, subsection 402(a), after the word "section" add a new phrase as follows: or which are financed under the state or local program providing assistance rough loans, loan insurance or tax abatements and, prior to completion or habilitation, are approved for receiving the benefits of this section." Section 402, based on provisions contained in Section 235 of the National Housing Act, would establish uniform criteria under which the Secretary could insure all subsidized housing mortgages. This amendment to Section 402 (a) is necessary to permit the use of assistance payments for single family mortgages which are financed under a state program that are not insured by the Federal Housing Administration. A comparable provision already exists for multi-family projects. It does not seem logical for Federal law to inhibit state sources for financing low-income single family units but not multi-family units. IV. COSTING OF SERVICE FEES CHARGED BY STATE AGENCIES On page 29, line 2, Title I, subsection 402 (d), after the word "mortgage" add the following: ", and, in the case of mortgagees which are state or local governmental agencies or public corporations created by state or local governments, as he deems appropriate, to cover fees and charges, service fees or other fees for the financing and servicing of the mortgage and the administration of the agency or corporation required to be paid by the mortgagor under the mortgage." And further, on page 38, line 14, Title I, subsection 502(d) after the word "mortgage" and the following: ", and, in the case of mortgagees which are state or local governmental agencies or public corporations created by the state or local governments, as he deems appropriate, to cover fees and charges, service fees or other fees for the financing and servicing of the mortgage and the administration of the agency or corporation required to be paid by mortgagor under the mortgage." Subsections 402(d) and 502(d) would authorize the Secretary to reimburse the mortgagee for its additional expenses involved in handling a mortgage insured under sections 402 and 502. These amendments would permit an annual service fee charged by state agencies to be included in the assistance payment. Under present interpretations of Section 236 these fees and charges cannot be included in the subsidy payment but must be borne as an operating expense by the tenant or owner with a resultant increases in carrying charges. This treatment adversely affects the feasibility of state projects to be combined with federal assistance. The Illinois Housing Development Authority is presently projecting that its annual fee will be 11⁄2 of 1% of the mortgage amount; the New York Housing Finance Agency fee is presently 4 of 1%. These fees are analagous to the insurance premium of 11⁄2 of 1% charged by FHA and should be accorded the same treatment by including them within assistance payments. V. CHILD CARE FACILITIES IN PUBLIC HOUSING PROJECTS On page 37, line 25, Title I, Section 502 (c) (1), after the word "mortgage" add the following: ", and (iii) with respect child care facilities, the monthly payment attributable to such units for principal, interest, and mortgage insurance premium which the project owner as a mortgagor is obligated to pay under the mortgage." And further, on page 91, line 21, Title II, Section 5(a), after the word “projects." add a new sentence as follows: "Such annual contributions shall include payments for the maintenance of child care facilities required by Section 7 of this Title." And further; on page 98, line 15, at the end of Title II, Section 7(1), add a new sentence as follows: "Any such contract shall contain a condition requiring the construction and maintenance of child care facilities in connection with the housing project if the Secretary finds that adequate child care facilities do not exist for the children." And finally, on page 141, line 23, Title VI, subsection 106 (c), after the word "project" insert the following: "the development of child care facilities and services;" These four amendments would provide for the construction of child care facilities in all projects assisted under Title II and Section 502 of the proposed bill. The amendments stipulate that the increased costs associated with the construction, but not necessarily the maintenance and staffing, of child care facilities is to be paid by the Secretary through increased annual contributions in the case of Title II projects or increased monthly payments in the case of Section 502 housing. The current shortage of child care facilities has a severe impact on low-income families residing in public housing. Both the proximity and the financial burden of child care facilities may determine whether or not a single parent is able to seek or maintain gainful employment. These amendments guarantee the close proximity of child care facilities by mandating that the Secretary reserve space within the project itself. These amendments would also require that the construction of the necessary space be entirely subsidized by the Department rather than by increased rents. VI. RESEARCH AND TECHNOLOGY On page 133, line 13, Title V, Section 501, add a new sentence as follows: "Not more than ninety percentum of the sums appropriated to carry out the activities under this section shall be used for testing and demonstrations." Section 501 of Title V (Research and Technology) would authorize and direct the Secretary to undertake such programs of research, studies, testing and demonstration relating to the mission and programs of the Department as he deems necessary and appropriate. The suggested amendment to this section affects only sums appropriated for purposes of carrying out its activities. The amendment would guarantee that a portion of all research appropriations would be used for necessary studies, other than testing and demonstrations. The Department has conducted substantial research on such problems as relocation assistance, tenant services instruction, and housing management techniques. This type of research should continue. This proposed amendment would distinguish between "hardware" and "software" research and guarantee that the Department will continue to devote its efforts to the latter. Hon. JOHN SPARKMAN, BOARD OF CHRISTIAN SOCIAL CONCERNS OF THE UNITED METHODIST CHURCH, Chairman, Senate Subcommittee on Housing, DEAR SENATOR SPARKMAN: On behalf of our Board I would like to express my concern in favor of the "Open Communities" Amendment to S-3639. Such an amendment, designed to overcome roadblocks against the placement of low- and moderate-income housing in the suburbs, is admirable indeed. Its intent conforms with the purpose of our own Board's policy statement on Housing (passed October 9, 1969), a portion of which reads: "Steps must be taken, despite land cost problems, to locate an increasing amount of low income housing in suburban areas." We tend to agree with Secretary Romney that this is "one of the most important provisions of the Bill." Also, we are in accord with the Secretary's statement made before your distinguished Subcommittee on Housing on July 13. 1970 when he said: "Adoption of this provision is a necessary first step in ending the ominous trend toward stratification of our society by race and by income." It is our hope that neither zoning nor building codes nor any other barrier will stand in the way of expanding needed public housing in Suburban areas. We would therefore encourage you to include the "Open Communities” Amendment as you mark up the Housing Act of 1970. We are indeed grateful for the many advances which have been made recently in the field of housing through responsible efforts of your Subcommittee. Yours sincerely, J. ELLIOTT CORBETT. Director, Department of Church/Government Relations. |