and multifamily rental assistance payments under Sections 402 (g) (1) and 502 (h)(1) -- would be allocated by the Secretary on a basis where 60% goes to metropolitan areas and 40% to non-metropolitan areas, including housing research and demonstration projects. We support a system to achieve an equitable distribution of housing subsidy funds to different areas based on appropriate criteria as to needs.

We question the proposed percentages for the distribution of funds as between metropolitan and non-metropolitan areas. According to the figures of the Bureau of the Census, it appears that over 80% of the urban population is located within metropolitan areas and less than 20% of the urban population is in non-metropolitan areas. Accordingly, we would recommend that the formula for distribution of housing subsidy funds should be changed to the one for community development, namely 75% for metropolitan areas and 25% for non-metropolitan areas, including housing research and demonstration projects.

If HUD finds that the funds allocated to any geographical area are not being used due to the failure to receive sufficient applications within a reasonable time, HUD should reallocate the unused funds to other areas where applications have been filed that show a greater need and demand.

Second, there is a requirement for the allocation of part of the money as block housing grants directly to each metropolitan city or its designated public agency, and directly to state and regional bodies. We do not support these provisions for the direct allocations of housing subsidies to metropolitan cities, state or regional bodies.

These housing subsidies of the type covered by Section 402 and 502 have previously been limited to private housing where the sponsors were builders, developers or nonprofit agencies. In this respect, these housing programs are

different from the community development block grants which relate solely to public programs of cities and other public agencies.

For the reasons set forth below, we believe that the present method by which housing subsidy funds are allocated by HUD to sponsors should be continued for Section 402 and Section 502. The structure of present programs is continued under S. 2182 with consolidations, simplifications and improvements. The allocation and contracting of these housing subsidies should continue to be a Federal responsibility in order to achieve national goals and policies for housing, subject to the additional requirement described below for conformity with each city's housing plans.

Third, there is a requirement that housing projects in each metropolitan city shall be in general conformity and support of the city's housing plan. In the case of a city which has its plan under preparation, the housing projects shall be in accordance with such terms and conditions as the Secretary may prescribe. Even though we recommend that allocations of housing subsidies continue to be made by HUD directly to sponsors, we support the provision that the projects of sponsors should be in general conformity with the city's housing plan. To qualify for community development assistance under S. 1744, each application must include a three-year housing plan. Full coordination will be achieved between the Community Development Assistance Program and the 402 and 502 housing programs by the requirement that HUD determine that housing projects of sponsors are in general conformity with such city housing plans.

Under the Community Development Assistance Act, obligations for community development grants could be issued commencing July 1, 1974, so cities would not be formulating their three-year plans until then. Accordingly, the provisions in S. 2182 requiring conformity of housing projects to the three-year plans of

cities should not become effective until July 1, 1974; then, they should be applicable to all applications filed with HUD after that date for assistance under Sections 402 or 502.

Fourth, there is an authorization for public agencies designated by cities to undertake projects with subsidies and financing under Sections 402 or 502. We are in favor of such an authorization.

The present prohibition against public

agencies participating in such programs should be repealed.

should be eligible to file applications with HUD

Public sponsors

in addition to the private

sponsors who have been eligible Sections 402 and 502. This will provide HUD with a wider choice among projects

for subsidies and financing of projects under

and encourage HUD's selection of the better projects. This procedure is certainly preferable to the one in the bill which involves a direct allocation of a large share of housing subsidy to public agencies who have previously been excluded entirely from these programs.

In summary, the recommendations we are making would retain the desirable features of Section 9 and eliminate its undesirable feature which would make local

public officials responsible for allocating a large part of the housing subsidy funds. There have been too many past instances where local public officials have indulged in exclusionary practices, particularly in the suburbs, to prevent the construction of housing for those of lower incomes.

Moreover, there would be

additional complications, burdens and difficulties if local public officials become responsible for allocating federal subsidies for housing.

13. MATTERS COVERED IN PREVIOUS STATEMENT

For a fuller report on NHC's views, I refer you to my previous statement of

July 23,

1973. There are two items that I wish to refer to again briefly:

(A)

NHC supports S. 1744, the Community Development Assistance Act, with the amendments set forth in that statement. Until the authorizations for the Community Development Program become available on July 1, 1974, there should be an orderly transition from the present categorical grant programs to the special revenue sharing programs. Accordingly, we recommend authorizations and appropriations for Fiscal 1974, commencing on July 1, 1973, which would equal $3.7 billion to cover the categorical grant programs that would be consolidated under the Community Development Program.

(B) Many of the concerns with crime and vandalism now associated with public housing developments can be eliminated by proposals which

I discussed in my earlier statement. These are:

(1) The adoption of minimum security standards based on

model security codes developed by the Department of

Justice's National Institute of Law Enforcement and

Criminal Justice; and

(2) For existing assisted projects, funds should be made
available (a) to provide necessary locks, communica-
tions systems and space modifications which will be
effective in reducing crime and (b) to meet the cost

of volunteer citizen patrols and resident's meeting

expenses.

CONCLUSION

Finally, Mr. Chairman, in summary, referring again to the President's housing message, we have strong objections to its failure to recommend the adoption of an adequate program now to meet the urgent housing needs of those of low and moderate incomes. As substitutes for the battery of housing programs that we had to work with prior to their suspension by the Administration, we are offered a limited revived Section 23 program and a limited release of 236 funds. While these will help, they are indeed objectionable as wholly inadequate to meet the need. The promised housing allowance program is objectionable on the grounds that it is not designed to produce the additional housing that is needed. experimental program, it will produce few units with little impact on the housing needs of our nation.

As an

We support the President's goal of improving the operation of present public housing, and look forward to proposed equitable solutions to the problems. In the interim, however, we ask you to consider NHC's adopted resolutions recommending necessary action to meet deficits in public housing projects.

We are pleased also that the $60 million in Section 312 rehabilitation loans for the current fiscal year will be made available.

Both today and in earlier testimony we have expressed our support of Senator Sparkman's Community Development Assistance Act rather than the Administration's Better Communities Act. We have a history of strong support for equal opportunity for all Americans seeking housing.

We do not support the Administration's apparent belief that we can survive with virtually no assisted housing programs for another 18 to 24 months. We urge this Committee to act to reinstate our existing programs to avoid the disastrous social and economic consequences of no programs. We support S. 2182 with amendments as presented in NHC's testimony of July 23, 1973, and today. We look forward to early passage. We deplore the Administration's rhetoric that pretends

that promises are an acceptable substitute for action.