are extremely limited in what they can accomplish. With the Federal financial assistance here provided, cities throughout the country should be able to undertake the additional programs designed to improve those areas that are not yet ready to be cleared and to conserve those areas that can be still salvaged while they continue to clear out and redevelop the basic slum areas.

We find, however, a major deficiency in the Housing Act as it is now drawn. The act makes no specific provision for relocation public -housing and without such housing the urban renewal program would be drastically impeded and in many cases made impossible. The act requires that cities relocate those displaced because of redevelopment and rehabilitation, and that these families be placed in decent, safe, and sanitary homes at rents the families can afford. A city cannot meet this requirement for low income families unless relocation housing is provided. Section 221 will provide some housing for families just above the public housing income level, but will not meet the needs of lower income families. If cities cannot meet the relocation requirement, they cannot carry out their urban renewal projects. At the end of 1953, there were some 154 redevelopment projects definitely firmed up. These 154 projects will displace some 71,000 families of which nearly 40,000 will be eligible for relocation public housing.

For instance, in our own project in Pittsburgh, we will have to displace 8,000 people who breakdown into about 2,000 families. There are about 1,200 of those families which are Negro and of those, 1,000 or more are eligible for public housing. Of the 800 white families, approximately two-thirds are eligible for public housing.

Basically, therefore, with such areas as that, and such massive numbers of people to deal with, a reservoir of public housing under our control and predictably under our control seems to be essential for carrying out a long-term program.

Under the new program, additional families will be displaced by enforcement of occupancy provisions, rehabilitation of structures, and other such activity in addition to the additional redevelopment projects that will be undertaken. On the one hand, the program is expanded, resulting in the increase in the number of displaced families, and on the other hand no provision is made for housing the lowincome families among them. We feel that as a minimum the Housing Act of 1954 should contain the housing program recommended by President Eisenhower, namely, 140,000 units over a 4-year period. We recommend strongly that this be included in the bill.

And, that should be on a 4-year basis. These programs, both in Washington and elsewhere, take some years to work out. I would say it takes 3 or 4 years for a redevelopment project to be studied and developed. It is a great handicap not to know that you are going to have a certain number of public housing units to march along these same years with you. Therefore, we feel very strongly that a determination that the 140,000 units will be provided over a 4-year period should be set down.

I should now like to raise some questions on several technical items in the proposed act. On page 18 of the bill, lines 3 to 5, there is a provision regarding mortgage insurance under section 220 that reads:

Provided, That, with respect to such delineated area-an urban renewal areain the opinion of the Commissioner (i) there exist necessary authority and financial capacity to assure the completion of such plan

Section 220 is of utmost importance to the urban renewal program for it provides a new section that will permit FHA to insure mortgages in urban renewal areas. A new kind of economic soundness test will be provided based on the city's activity in renewing the area. A city will make application to the HHFA Administrator for an urban renewal project and the Administrator will make the final approvals as to its adequacy and the ability of the city to carry it out. If it is also required that the FHA Commissioner make these same determinations, then cities will be in the position of having the FHA Commissioner double check his chief, the Administrator, and the resulting administrative duplication will unnecessarily complicate such urban renewal projects.

In other words, we would like one finding instead of two.

The FHA Commissioner has adequate authority in the second part of the proviso to see to it that the structures to be rehabilitated are suitable for mortgage insurance, but it should be the sole responsibiliy of the Administrator to determine the adequacy of the urban renewal plan. We suggest that this language be changed to provide that the Administrator certify to the FHA Commissioner that "there exist necessary authority and financial capacity to assure the completion of such plan."

On page 78, lines 10-12, there is a requirement that the local governing body as a condition of receiving a planning advance in order to study a proposed urban renewal area make a determination that the area is "blighted, deteriorated, or deteriorating." We feel that this is an unwise requirement-not that we object to such a determination being required but only that it be required at this stage in the development of the project. At the time an application is submitted, the city will usually have only sketchy information about the area-census data, some few scattered surveys, and the like. These data, which cities will, of course, submit to HHFA, will be inadequate to determine the character of the area to the degree necessary for a legal determination. City councils will be reluctant to base such a legal determination upon this kind of preliminary data because the finding could properly be challenged.

In other words, they don't have the information at that time.

With the planning advances, the city will make detailed surveys og the area and will amass sufficient data to give the city council a factual basis for its legal determination. Therefore, we suggest that this determination be required later on as a condition precedent for the loa nand grant contract, which provides specific Federal financial assistance for the actual carrying out of the project.

In this same clause there is also the requirement tha the Administrator approve the area as appropriate for an urban renewal project. We realize, of course, that the Administrator must have standards by which the judge the eligibility of the project, but we fear an implication that there is a subjective kind of judgment which the Administrator may make in approving a project. There is also the implication that the Administrator will pass upon the determination of the city council as to the appropriateness of the area. This is contrary to the philosophy stated in the Ast that this is a local program. We suggest the deletion of this phrase since it adds nothing but a question mark. The Administrator will continue to judge all projects

on whether they meet the eligibility requirements of the act, and this authority is implicit in the act.

On page 79, subparagraph (c), "urban renewal project" is defined. This is a new definition; it differs, of course, from the definition of "redevelopment project" in the Housing Act of 1949. A major difference is the removal of the predominantly residential requirement, that is the requirement that a project must either begin or end as predominantly residential. This requirement in the 1949 act has produced many administrative difficulties here and in the cities. Everyone recognizes that the removal of slum housing and slum neighborhoods is the primary objective of the act. However, the word "predominantly" as applied residentially can and does lead to endless argument and to determinations that must be arbitrary. Its removal is a step in the right direction. However, it has now been replaced by this clause:

To achieve sound community objectives for the establishment and preservation of well-planned residential neighborhoods of decent homes and suitable living environment for adequate family life * *.

This clause, we feel, is also a limiting one. For instance, would it permit us to pursue the desirable objective of redeveloping a blighted. industrial area which contains pockets of slum housing, and bring the district into its proper uniform industrial use? Would it permit us to attack the widespread problem of "skid row" areas, which are so prevalent at the edges of our downtown districts and which usually contain a mixture of low-grade commercial uses, rooming houses, decayed residences, and distributive industry? The proper redevelopment of such districts, due to their in-town locations, is often for commercial use, instead of family housing. There are many other limiting factors which will occur to all of you who are familiar with cities and their problems.

These questions are not answered by the narrow definition that has been cited from the bill.

We would suggest broader language, preserving the housing intent but recognizing the varied character of land use in well-planned cities. On page 82, lines 6 to 8, there is a provision that a city cannot count as noncash local grants-in-aid those "revenue-producing public utilities, the capital cost of which is financed by service charges or special assessments." We find this provision, which was added by the House and was not in the bill as introduced, to be unclear and certain to be very confusing in application. We have no quarrel with the principle that where a site improvement is paid for by special assessments against the property in the project area, it should not be allowed as a noncash grant-in-aid. In such cases, the city is not paying for the improvement; the property owners in the project area are. This is now prohibited under administrative rulings. What concerns us is the inclusion of service charges. Municipal accounting and terminology are wonderfully different. Service charges can include the bills rendered for water supplied or an additional fee for installation of waterlines, or standby charges; service charges can include a payment for the installation of sewers, for the operating costs of sewage treatment systems, or for the capital and operating costs of such systems. Many cities are using the service charge as a form of taxation, with a profit to the general fund, or doing just the reverse, absorbing losses on

utility systems through general taxation. Most service charges are citywide in application, and represent no special attempt to recover: for expenditures made in a specific redevelopment area. The present language would be most difficult to administer, and would often require a cost accounting of the city's entire water supply and sewage treatment systems if it were taken literally. The burden of proof will fall on the cities, because it will be natural for HHFA to rule strictly rather than liberally on the issues. We suggest that all reference to service charges be deleted and if the limitation on assessments be retained that it be qualified by language like the following:

that part of revenue-producing public utilities financed by special assessments against property in the project area.

Not in this bill but really a part of it, is the rider now attached to the appropriations bill for the independent offices. This rider reads:

Provided, That no funds in this Act shall be available for payment of capital grants under any contract involving the development or redevelopment of a project for predominantly residential uses where incidental uses are not restricted to those normally essential for residential uses.

This would seem to me to be substantive legislation and consequently within the purview of your committee rather than in the Appropriations Committee. We find this an extremely limiting proviso. It would preclude some 85 projects now underway and would interfere drastically with the local determination of the best use for cleared slum land. Then, too, it is in conflict with the philosophy expressed in the Housing Act of 1954. This proviso would make it impossible to put anything in a residential project except uses incidental to residence. That means than any public use, any civic development, any important commercial development that should logically be in the area cannot be included. This proviso, in effect, dictates an extremely limited principle of land use for all cities, placing them in a planning straitjacket insofar as they participate in the Federal program. We suggest that the Housing Act of 1954 containi language specifically striking this proviso.

That is our testimony.

Senator GOLDWATER. Mr. Robin, we certainly appreciate your coming here and the giving of your time and your valuable background for our determinations on this bill.

Thank you very much.

The next witness this afternoon-and I understand this is by mutual agreement-will be the Honorable Donald Mead, the mayor of the city of Syracuse, N. Y. Mayor Mead, it is a pleasure to have you here this afternoon. You can testify in any manner that you care to. STATEMENT OF DONALD H. MEAD, MAYOR OF THE CITY OF SYRACUSE, N. Y., AMERICAN MUNICIPAL ASSOCIATION

Mayor MEAD. Mr. Chairman, I may say at the outset that I rather detest submitting any subject from a prepared text, but in view of the fact that there are several important points that I would not like to overlook, coupled with the fact that we have to catch a rather early plane this afternoon, I am going to adhere rather closely to the prepared text.

My name is Donald Mead, mayor of Syracuse, N. Y. I am appearing this afternoon as the representative of the American Municipal Association, a nationwide organization representing 1,000 municipalities.

Mr. Randy Hamilton, director of the association's Washington office, is with me to assist me in presenting to this committee the viewpoint of the Nation's municipalities.

I am also accompanied by my secretary, Mr. Torrey, and the executive director of the Planning Commission of Syracuse, Mr. Sergei Grimm, to assist in the event you desire information about our experience in Syracuse. I might add parenthetically that being a comparatively new mayor, I have insulated myself with some rather strong shock troops.

Our testimony is confined this afternoon to those portions of the proposed legislation that deals with slum clearance, urban renewal, redevelopment and planning advances for public works, and other

purposes.

My verbal testimony is confined to generalities, while submitting to the honorable members of your committee a more detailed copy of my text, including specific references to the sections and lines of the bill.

The American Municipal Association, representing 12,000 municipalities, supports the principles outlined in the bill and endorses the overall approach to community value preservation as envisioned in it. We commend its author and the administration for the hard work and diligence that went into its preparation. Our association had the privilege of sitting in on some of the Washington shirt-sleeve conferences held by Administrator Cole, and consequently, we appreciate the tremendous amount of effort that preceded the drafting of the legislation.

Unfortunately, the municipalities were not represented on the President's Housing Advisory Committee. Consequently, some of the weaknesses of the proposals which are apparent to us as operating city officials could not be strengthened prior to this time. There is some question in our minds as to whether or not the conditions placed on municipalities who wish to participate in the program will tend to slow down work on redevelopment and slum clearance. Likewise, some of the provisions may envision more rapid action in adjusting to the new concept than is possible in many cities. We hope that the new legislation will not serve to impair or slow down the fundamentally important slum clearance and urban redevelopment operations which are just now beginning to come into fruition through the Nation.

As FHA Commissioner Guy T. O. Hollyday told us in an exclusive interview in our October 1953 American Municipal News:

neighborhood rehabilitation programs are not a substitute for slum clearance or redevelopment.

The legislation should clearly point out to the Administrator that it is designed to provide new tools for attacking urban blight and slums, but not put roadblocks in the way of established slum clearance and urban redevelopment objectives.

If new conditions, new programs, new requirements, and new municipal administrative organizations are to be necessary before municipalities are permitted to engage in activities which they are already