utilizing this existing program as a means of providing additional insurance to th national government that the cities will be able to adequately meet the new challenge and responsibility present by the block grant program.

HOUSING

The National League of Cities and the United States Conference of Mayor strongly support the need for a significant federal role in the nation's struggle t secure a decent home in a suitable living environment for all citizens. In thi regard, we have worked with others over the years in efforts to persuade Congres of the importance of providing a range of housing assistance programs, particularly for low and moderate income persons. This has included strong support for th public housing program, including the operation, modernization, and maintenance of existing units and the production of new stock. This has also encompassed backing programs such as rent supplements, Section 235 and 236, and most recently abandoned housing studies and housing allowance experiments.

It was, therefore, with shock and dismay that we greeted the President's decision to suspend the nation's low and moderate income housing programs las January 5. While we readily acknowledged the need for continued study and reform of our present efforts, we could not then and still cannot today find any persuasive evidence to support the conclusion that all current programs should be stopped until something better can be found. So far as we have been able to determine, the Administration's decision to close down the nation's assisted housing programs wa budgetary, not programmatic.

Eight and one-half months after the moratorium was announced, the Administration came forward with a series of suggestions which, taken together, were said to comprise a "program" designed to replace most of the existing low and moderat income housing mechanisms. Although there are some useful suggestions for pro ducing more and cheaper credit for the private market, it doesn't appear that the "program" offers much hope for those persons who will be unable to find decent housing on the private market. Little hope is also held out for the many cities seek ing to revitalize their neighborhoods through the use of public subsidies.

With the exception of the announced administrative action of allowing com mitments of up to 325,000 units this fiscal year, the only other action in the subsidized area is a single legislative request to amend the statute creating the Section 23 public housing leasing program. Nothing else is proposed for Congress to consider now. Instead, Congress is asked to publicly acknowledge as a matter of national policy that all of the federally assisted programs have failed. In addition the Administration's housing bill requests the Congress to agree several years in advance that the housing allowance or "direct cash assistance" approach-which has not yet been fully tested-is the best available substitute for our present efforts. That bill would also terminate any further activity under the public housing program on December 31, 1975. We urge the Subcommittee to oppose these aspects of the President's bill.

Where, then, do we go from here with our nation's housing policy. We feel constrained at this point to raise what may seem to the Subcommittee to be a familiar complaint from students of the urban scene. It is now and will continue to be impossible to truly understand the problems of our core cities without referring to a broader range of issues not just federally assisted housing. The housing problems of our core cities are the product of extremely powerful non-housing policies having to do with employment, transportation, social welfare, and tax matters, to mention but a few. The national government-the Congress and the Administration-must begin to address this wider picture before the nation can expect to make any headway against these negative forces which now seem inexorable.

Having said this, however, we do not wish to imply that we do not acknowledge the importance of resolving the future direction of our nation's assisted housing programs. Quite to the contrary, because of our firm commitment to the community development block grant approach, we are now more concerned than ever about the status of the national government's own goal to provide a decent home in a suitable living environment for all Americans. Because the improvement of the housing stock for low and moderate income citizens is central to the long run success of the block grant program, we are extremely anxious that the Federally assisted housing programs be tangible, functioning, well funded entities readily available to the cities.

Mr. Chairman, you and Congressman Ashley have proposed as part of H.R. 10036, that our existing federally-assisted housing efforts be consolidated into a

gle package with a design quite similar to the community development block grant. Before commenting directly on that proposal, we would like to briefly tline the major principles we would urge to be included in any final new legisla

Sn in this area.

First, as we have already suggested earlier, there must be a strong linkage between the community development block grant program and Federal housing policies and programs. Without a firm connection, both major efforts will suffer greatly.

Second, housing funds should, as nearly as is practicable, be made available to communities on the basis of need and of capacity to utilize the funds. Third, the locational and other broad programmatic decisions necessitated by sisted housing activity legitimately belong within the purview of general purpose cal government. To shift the program design decisions for community developzent upon local elected officials and then to withhold similar decisions for the qually important and related housing activities would make little practical sense. Fourth, as with the community development block grant, localities will also need the flexibility to adapt the national housing mechanisms to their own special situations. Thus, the national program should make it possible for some communities to concentrate upon new production while others put most of their forts into conservation. Similarly, the national program should recognize that the configuration of the poor and the problems which their condition presents to the community differ from place to place.

Fifth, any new housing legislation must also adequately resolve the increasingly manding problems of the maintenance, modernization and management of our sting inventory of one million public housing units. An agreement must be reached in this legislation regarding the availability of operating subsidies and the manner in which they are to be computed. The nation simply cannot afford to allow this mammoth investment of public resources in our existing stock to wither away.

Finally, it seems clear that the states have a greater role to play in housing than they have assumed up to now. The current trend toward creating more state housing finance agencies is good and should be supported. Assisting in the Sancing of housing programs is a very appropriate function for state government. The widely held misconception, however, about the state role issue is that what is needed is that the state develop programs of its own or that it assume nes now being operated by the Federal government. To the contrary, the much more significant potential contribution of the state can and should be in the area of setting policies, in consultation with local governments, controlling the future development and viability of our urban environments. Without rational state urban policies, all of the efforts, disjointed or otherwise, of Federal, state and kcal governments will continue to be seriously hampered.

As you can tell, Mr. Chairman, each of these broad concerns we have just expressed would be resolved satisfactorily by the Barrett/Ashley housing block grant bill. As a result, we are excited over the prospect of working with the Subcommittee during the next few months as it refines its legislation on housing. We have a number of technical questions regarding the precise way in which the proposed block grant for housing would work in various communities-questions which can no doubt be handled between our staffs. It is clear, however, that the potential combination of a community development block grant and a housing block grant poses a most fascinating and challenging task for local governments. Mr. BARRETT. Thank you, Mayor Taupier.

Mayor Holland, you indicated in your statement that the middleincome people are leaving your city, leaving Trenton. Why are they leaving and where are they going?

Mr. HOLLAND. They are leaving for several reasons. Some people, I think and I have no quarrel with this-are leaving simply because they prefer the suburbs. Most people, I think, when the exodus started, were running away from black people and Spanish-speaking people, at least in our city. They associated the coming into the neighborhood of minority members with the beginning of blight, unfortunately not giving newcomers an opportunity to demonstrate what kind of neighbors they might be. Invarially newcomers, minority newcomers are good neighbors seeking to prove themselves, but when exodus from such a neighborhood takes place, those who are not

..

qualified economically on their own to uphold the level of the neighborhood to which they are moving cause deterioration.

The riots, I think more than anything else, accelerated the exodus of middle-income and high-income people, so that today the No. 1 concern, on the part of the people of our community at least, is with their personal safety and with the protection of their property. With the change in the nature of the population has come an increasing number of people who are low income, who are less educated. Those are the characteristics which over the years have been associated with those who commit crimes.

Unless we can retain what middle income base there is and strengthen it with the kinds of programs which your bill would make possible, and the coordination which would come with the availability of those programs, then we are going to see a continuing worsening of the situation in the cities. Not only can the cities not withstand that, but neither can, in my opinion, our States nor our Nation. Our problems as presented are really the States' and the Nation's problems.

Mayor TAUPIER. Mr. Chairman, may I add something about that situation?

We are all aware of the flight to the suburbs, but I think there is another problem here which deals with the conditions of housing in the inner city, and with a program which we have been experiencing since 1949 which created new ghettos, especially when the Housing Act required a large amount of housing units under the Public Housing Act to be built in the areas that eventually became blighted areas themselves. I think the idea of being able to spread out the low- and moderate-income people throughout all the neighborhoods would have a better reflection on the ability of the inner city to cope with the maintenance of its own population.

Mr. BARRETT. I would just add that I think physical deterioration combined with the inability to get grant money and 312 loan money to rehabilitate existing homes also tends to exacerbate the situation. This is, of course, what we hope we can accomplish in the BarrettAshley bill.

Mayor Holland?

Mayor HOLLAND. Mr. Chairman, I would question that, however, because the families who would be eligible for grants or for loans. under 312 are not the income type families, especially these days, who would qualify for any kind of housing in the suburbs. One of the basic problems is that there simply is not any low-income housing, especially no public housing in the suburbs.

Your point, however, is very important so far as the maintenance of the neighborhoods in our cities is concerned by those people of limited means. The 312 program, one of the most successful programs we have ever had, is essential. Ironically, in our city, where we had three 312 areas, for the first time white people of limited income or low income who always associated Federal programs with programs designed to care for minority groups had come to believe that they, too, were receiving assistance from the Government, and their suspicions were gradually dispelled. Just when everyone who is eligible in a 312 area was beginning to apply for loans or grants, the program was cut off.

Incidentally, one of the weaknesses of the program-and I do not know how you can really correct this-is that people right on the

periphery, right over the line of the delineated area, equally eligible, saw their neighbor apply, and they could not. I sometimes wonder whether there should be no geographic limitations within the city on such programs, and that perhaps all programs should be only on the basis of need.

I recall a year ago reading, for example, that in New York City there were 400,000 Jewish people who were eligible for certain programs on the basis of need but who simply did not qualify geographically. I do not want in any way to slow up your legislation, but I thought I would make that point.

Mr. BARRETT. Thank you very much.

Mr. Ashley?

Mr. ASHLEY. Let me first commend you, Mayor Holland and Mayor Taupier, for your testimony. I am extremely interested in the views of the chief elected officials of a city. How large is Trenton, Mr. Mayor? Mayor HOLLAND. Trenton is now 106,000, although by official 1970 census count, 104,000. The recent estimate has us back up to 106,000. Mr. ASHLEY. Mayor Taupier, Holyoke is what?

Mayor TAUPIER. 51,000, sir.

Mr. ASHLEY. I beg your pardon?

Mayor TAUPIER. 51,000, sir.

Mr. ASHLEY. There are an awful lot of communities in the country. the size of the cities that you represent, and I think it is a very refreshing thing to get the views of mayors of smaller communities and focus on them, as well as on the New Yorks, Chicagos, and so forth, of our country.

Did I understand, Mayor Holland, that your testimony in response to questions by Mr. Barrett was that the use of the 312 rehabilitation program is pretty limited in terms of what it can achieve as far as weakening the force of the exodus movement from the city to the suburbs?

Mayor HOLLAND. I do not really think that this problem with 312 is related to the exodus, because the people who would qualify simply do not have the means with which to purchase housing in the suburbs because housing within their means is not available in the suburbs. Mr. ASHLEY. Well, do you not have a middle class in Trenton proper that does have access to the suburbs, perhaps the more modest priced housing in the suburbs?

Mayor HOLLAND. Perhaps I speak as I do because the three areas in which we employ the 312 program were areas which were marginal, which were potentially blighted areas, and we wanted to strengthen those areas.

Now, if we had selected an area where the income level was higher, I think then the point that you make would be valid. I realize now as Mr. Garrison pointed out that under your bill we would have considerable flexibility with 312 type activities. I was thinking that if the categorical programs had to be extended pending passage of block grant legislation, that we would continue to have difficulties during the interim.

Mr. ASHLEY. Frankly, I have some questions about the income limits on 312 myself, because I think that we may want as a matter of policy to at least consider whether it isn't worthwhile to offer the middle-class family that does have access to the suburbs an inducement to stay in the city, and if inducement is a subsidized loan, it is

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no more subsidy than the homeowner is getting out in the suburbs who is able to deduct his mortgage interest every year that he is buying that house.

So I think that there might be some efficacy to this in communities like Toledo and Trenton, communities that have the problems that you very candidly acknowledged, the collision between the Polish and the black and the tendency for the white, if he has the means, to go to the suburbs either because he prefers it or because schools are better or whatever.

To the extent we can stabilize our central cities, the better off we are. The alternative that we are looking at is a very bleak one indeed in which our cities become all poor and all black with enormous costs of public services, and so forth, the litany that we all know, and it would seem to me that this is one technique and one mechanism that might well be used to. We really do not know, because we have been appropriating so little money for the 312 program.

I think on the basis of cost efficiency that the 312 program is probably as good a program as we have had. The real problem with it is, is that it has been so underfunded that we have had to establish priorities which have removed the program from those who might well take advantage of it, and thereby make a somewhat different decision in terms of where they are going to live.

Do you think that has any substance?

Mayor HOLLAND. Congressman, I so move.

I am frankly just so mindlocked with regard to expectations from Federal programs that I guess I just didn't envision or didn't entertain the hope that that program could be raised to include people of that level. I think it would certainly be a good investment because anything we can do to stabilize the situation represents a good investment on the part of the Federal Government and the State government.

I started to make the point that if there is one basic solution-and I realize this is the most difficult of all solutions for which to get acceptance-it is one to which Congressman Barrett pointed a couple of years ago: it is the provision of low income housing in the suburbs. Let me explain that by relating it to the ADC program.

There are 13 municipalities in our county. Ninety percent of the ADC cases constituting 20 percent of the county's population are resident in our city because there is no place else to house them. There is no real fostering of a finding of homes for ADC cases outside the central city. It is the easy place to put them. Perhaps a block can take one large, fatherless family. We have five small children, and it is difficult to keep the rate of rehabilitation ahead of the rate. of destruction. In the case of a large fatherless family with a dozen children, let's say, maybe a block can absorb one. You put in two or three such families, there goes the block, there goes another neighborhood eventually.

That, more than anything else, has been killing the cities. That's why the application requirement is so important, why A-95 is so important. If those suburban communities want some water and sewer money, let them begin to participate in meeting the housing needs of the Nation's poor families.

Mr. ASHLEY. Well, you bring up two points that I will just comment on briefly.