In fact, in 1968, through the leadership of this subcommittee, Congress emphatically reaffirmed that goal and established a 10-year program to assure its quantitative achievement.

This is a time of crisis in housing. Established housing assistance programs are now suspect. Some have been suspended. The value of the various legislative enactments over the past 40 years is now being called into serious question. The issue of what role the Federal Government should play in housing and urban development, if, indeed, any at all, is being re-examined.

Mr. Chairman, I believe that re-examination is a healthy thing. Programs should periodically be put to the test of analysis to determine whether they are worthwhile, and, if not, they should be modified and, if necessary, abandoned. The danger, however, is over-reaction in abandoning good workable programs along with those that are not. In this connection, I believe that it was most unfortunate to suspend precipitously all four low- and moderate-income housing programs last January, especially without first establishing new and better ones to take their place.

I am gratified by the approach taken in H.R. 10036. As the chairman has pointed out, "the block grant approaches-evolutionary in nature, moving gradually from a dominant Federal role in carrying out of community development and housing activities to one in which the community is the principal actor, and HUD exercises a more qualitative review and evaluation function." The bill recognizes the need for balanced programs, and recognizes also that housing and urban development are issues of national concern which cannot be met solely through local approaches.

There are many admirable features of H.R. 10036. In my longer statement submitted for the record, I discuss them in greater detail. In this summary statement, I would like to mention some of the provisions I consider to be of particular importance, as well as some aspects of the bill which I believe to be deficient.

I would like to concentrate on what is without question the major housing and urban development problem facing metropolitan areasthe need to reverse the trend toward racial and economic stratification and to establish choice as the factor that determines where people will live. This is a problem recognized and addressed to in the bill, but in my view, not adequately. The proposed legislation does, however, provide the basic ingredients for one of the requisites of equal opportunity in housing-an adequate supply of shelter for households of varying income ranges.

I have long advocated a mix of production and better use of existing housing, and it is gratifying to note that this bill reflects adherence. to that principle and policy. I believe it is important, however, either in the language of the bill or in the legislative history, to establish vacancy rate criteria for determining the mix between new and existing housing, so as to avoid the inflationary impact of housing allowances in tight housing markets.

I also firmly support the bill's approach of coordinating housing assistance and community development grants at the local level, where such coordination can be most effectively achieved. At a time when some advocate the demise of FHA, it is encouraging to find the bill forcefully delineating the role of FHA and modifying the FHA program in ways that will enable that important agency to continue its

essential participation in providing a mortgage credit for residential construction.

No feature of the bill inspires greater support on my part than its recognition of the need to continue sections 235 and 236, both during the period of transition and until the housing block grant program commences operation, and on a residual basis after the program goes into effect. Despite exaggerated criticisms of sections 235 and 236, and inflated estimates of their costs, as well as deemphasis of administrative deficiencies in their operation, these subsidy programs do produce housing.

The new program authorizing modernization and renovation of existing public housing units is clearly needed and highly desirable. I also believe that there is a need for increased volume of public housing in the years immediately ahead. As I read the bill, new public housing could be built, although the financing vehicle would be different from that provided under the existing public housing law. There is confusion as to whether this is true or not, and I think it would be helpful if this confusion could be cleared up.

I question some of the provisions of H.R. 10036. It is proposed, for example, that uniform standards be applied to all mortgage insurance transactions. No longer would there be special risk mortgages in FHA's portfolio. I fear this will have the effect of excluding deteriorated neighborhoods and the families that live in them from significant participation in the FHA programs.

In my prepared statement, I noted the need for a national urban land policy. Since my testimony was processed, I read that Congressman Ashley has proposed a joint committee on national growth and land use policy. I enthusiastically support that action.

I would like now to turn my attention to the need for linking housing assistance programs and community development programs in ways which will not only facilitate orderly urban growth, but also will facilitate availability of multipriced shelter throughout the metropolitan regions of the Nation for families of all incomes and races. This, in my view, is the most pressing housing problem facing the country. Indeed, the bill recognizes it as such.

Among the eligibility requirements for community development grants is formulation of a program which includes any activities. necessary to provide adequate housing in a suitable living environment for low- and moderate-income persons who are residing in the community or who are employed in, or who may otherwise reasonably be expected to reside in, the community. By the same token, one of the conditions of eligibility for housing assistance grants is activities designed to promote greater choice of housing opportunities, and to avoid undue concentrations of assisted persons in areas containing high proportions of low-income persons.

These provisions are salutary. I fear, however, that the bill cannot achieve its expressed goal of promoting greater choice of housing opportunities for lower income families. The e are several inherent weaknesses which, in my view, necessarily would prevent achievement of this essential goal.

Community development and housing assistance grants would be made for the most part to individual localities in metropolitan areas. But the problems of housing and communi, development in metropolitan areas are metropolitanwide, and can be resolved only on that

basis. I recognize that in both the community development and housing assistance parts of the bill a priority would be given to two or more units of general local government which combine to conduct. single programs. I doubt, however, that this would afford sufficient inducement to encourage metropolitanwide proposals, particularly with respect to housing assistance programs. Nor can we place sole reliance on voluntary "fair share" plans. Many suburban jurisdictions have taken extraordinary steps, such as adopting bizarre zoning laws and other land-use controls, which necessarily have the effect, and often the purpose, of keeping out the poor. It is extremely doubtful that these communities can be counted on to participate in voluntary "fair share" plans.

There is one additional provision which, it seems to me, necessarily could have the effect of concentrating most of the lower income housing in the central city, where the poor are already strictly confined. Under the allocation formula for housing assistance grants set forth in section. 124 (b), entitlements are based on three factors: Population, extent of poverty, counted twice, and extent of housing overcrowding. Under this formula, and lacking a metropolitan approach, the great bulk of housing assistance funds necessarily, it seems to me, would go to central cities, even though suburbs that have the best of intentions might not get much in the way of housing block grants if their populations are relatively low, if they are affluent and if they have little housing overcrowding.

This provision, in my view, is seriously flawed. It could have the effect of accepting the status quo of racial and economic stratification in metropolitan areas, and assure that this program is perpetuated and even intensified. The basic weakness, Mr. Chairman, lies in dealing with the housing problems of metropolitan areas on the basis of individual jurisdictions that make up these metropolitan areas. The language of the bill linking community development with adequate housing for lower income households would encourage production of low- and moderate-income housing for low- and moderate-income households. If that shelter is to be located beyond the central city, or beyond the older suburbs, and in areas where the jobs are, the linkage must be on a metropolitan basis.

In 1971, Congressman Ashley introduced what I consider an innovative and creative measure that promised to do just that. Title V of the proposed Housing and Urban Development Act of 1971 called for the establishment of metropolitan housing agencies, which would have had the responsibility and authority for developing long range plans for the location of subsidized housing based on a number of rational and sensible factors. Unfortunately, this proposal was abandoned before the bill left the subcommittee. I commend it to your attention, and urge that the subcommittee again give it serious consideration. I also recommend that to assure cooperation by suburban jurisdictions that otherwise might be reluctant to have lower income families living within their borders, eligibility for community development grants be tied strongly to full cooperation with the metropolitan housing agency in the developing and implementing of its plan.

Mr. Chairman, for some 8 years I have had the privilege of working in close cooperation with this subcommittee in developing some of the most important social legislation in the Nation's history. Through

that experience, I developed great confidence in the wisdom and compassion of its members. The bill you are considering, a product of the subcommittee, reflects that wisdom and compassion. I wish to stress that my recommendations for strengthening of the bill in no way diminishes my admiration for the basic approach it takes and the essential soundness of its provisions.

I am very much appreciative of your having invited me here to appear before you in that it not only has given me an opportunity to visit with old friends and colleagues, but more importantly, to be a part of the important legislative process in which you are engaged. [The prepared statement of Dr. Weaver follows:]

PREPARED STATEMENT OF DR. ROBERT C. WEAVER, PRESIDENT, NATIONAL COMMITTEE AGAINST DISCRIMINATION IN HOUSING

Mr. Chairman and members of the subcommittee:

I appreciate your invitation to present my views on H.R. 10036, the proposed "Housing and Urban Development Act of 1973."

At the outset I should point out that I am appearing in three capacities. First, as a concerned citizen and long-time student of housing and related urban issues. As many of you know, my housing experience in Government alone goes back some forty years, before housing problems were fully recognized as matters of Government concern and well before the Nation had begun to articulate specific goals, policies and programs to meet them.

Second, I appear in my capacity as President of the National Committee Against Discrimination in Housing (NČDH). This private organization, which I was privileged to help found nearly twenty-five years ago, has long been in the forefront of the effort to establish an open housing market and to secure free housing choice for all American families, minority and majority, poor and affluent, alike. Last, I appear as a former housing official at the federal, state and local levels. In the former capacity it was my privilege to appear repeatedly before this Committee. I am pleased to be here again.

As an informed private citizen, as President of NCDH, and as a former housing official my concerns are largely the same. In all three capacities I am guided, above all, by the national housing goal first enunciated in the landmark Housing Act of 1949: "A decent home and a suitable living environment for every American family." Mr. Chairman, I take those words both seriously and literally, as I know the members of this Committee do as well. In fact, in 1968, through the leadership of this Committee, Congress emphatically reaffirmed that goal and established a ten year program to assure its quantitative achievement. I also believe that success in meeting that goal cannot be measured solely by reference to numbers of housing starts and other traditional indices. Housing also is key to determining the quality of life our people lead and is crucial to facilitating full participation of all Americans in the mainstream of the life of the Nation.

These hearings are being held in a time of housing crisis. Established housing assistance programs are now suspect. Some have been suspended. The value of the various legislative enactments over the past forty years is now being called into serious question. The issue of what role the Federal Government should play in housing and urban development-if, indeed, any role at all-is being re-examined.

Mr. Chairman, I believe that re-examination is a healthy thing. Programs should periodically be put to the test of analysis to determine whether they are worthwhile, and, if not, should be modified and, if necessary, abandoned. The danger, however, is in over-reaction-in abandoning good, workable programs along with those that are not. In this connection, I believe it was most unfortunate to suspend precipitously all four low- and moderate-income housing programs last January, especially without first establishing new and better ones to take their place.

Change is necessary and I am not prepared to say that every program and every piece of housing legislation enacted over the past forty years has worked as well as we had hoped. Through long experience, however, I have learned that if change is to be effective it must be evolutionary. We must make sure to preserve programs that work and modify those that can be made to work, rather than commit ourselves to wholesale abandonment on grounds that results have not quite been up to expectations.

24-038 O 74 pt. 1 30

I am gratified by the approach taken in H.R. 10036. Through the feature of block grants for community development and housing assistance, the bill world represent a departure from past Federal programs in which the Federal role was dominant, but it would not represent a sudden abdication of Federal responsibility. The bill recognizes the need for balanced programs and recognizes also that housing and urban development are issues of national concern which cannot be met solely through local approaches. As Chairman Barrett has pointed out:

the block grant approaches

are evolutionary in nature, moving gradually from a dominant Federal role in the carrying out of community development and housing activities to one in which the community is the principal actor, and HUD exercises a more qualitative review and evaluation function."

The bill, through its provision for HUD review of local programs, implements that approach and I fully support it.

There are many admirable features in H.R. 10036. I would like to limit my statement to mentioning some of the provisions I consider of particular importance, as well as some aspects of the bill which I believe are deficient. I would like to spend most of my time discussing what is, without question, the major housing and urban development problem facing metropolitan areas-the need to reverse the trend toward racial and economic stratification and to establish choice as the factor that determines where people will live. This is a problem recognized and addressed by the bill. But, in my view, not adequately.

I have long advocated a mix of production of new and better use of existing housing, and it is gratifying to note that this bill reflects adherence to that principle and policy. I believe it is important, however, either in the language of the bill or in the legislative history, to establish vacancy rate criteria for determining the mix between new and existing housing so as to avoid the inflationary impact of housing allowances in tight housing markets. I also fully support the bill's approach of coordinating housing assistance and community development grants at the local level, where such coordination can be most effectively achieved.

At a time when some advocate the demise of FHA, it is encouraging to find the bill forcefully delineating the role of FHA and modifying the FHA program in ways that will enable that important agency to continue its essential participation in providing a mortgage credit for residential construction. One modification is the establishment of prototype construction costs which would permit participation in FHA programs of communities which, because of high construction costs, are now effectively excluded. A second, which provides for reduction in interest rates for FHA insured mortgages in periods of tight money, would permit many middle-class households now priced out of the home purchase market to become homeowners.

No feature of the bill inspires greater support on my part than its recognition of the need to continue Sections 235 and 236, both during the period of transition until the housing assistance program commences operation and on a residual basis after the program goes into effect. Despite exaggerated criticisms of Sections 235 and 236 and inflated estimates of their costs, as well as deemphasis of administrative deficiencies in their operation, these subsidy programs do produce housing.

The new program authorizing modernization and renovation of existing public housing units is clearly needed and desirable. I also believe that there is a need for an increased volume of public housing in the years immediately ahead. As I read the bill, new public housing could be built, although the financing vehicle would be different from that provided under the existing public housing law. Local government obligations would be guaranteed by the Secretary of Housing and Urban Development and what are now annual contributions could be financed by funds from the housing assistance grants. I believe there is considerable confusion as to whether additional public housing is contemplated by the bill and it would be helpful if this confusion could be cleared up.

I question some other provisions of H.R. 10036. It is proposed, in Section 201 of Chapter 3, that uniform standards be applied to all mortgage insurance transactions. No longer would there be special risk mortgages in FHA's portfolio. I fear that this will have the effect of excluding deteriorated neighborhoods and the families that live in them from significant participation in FHA programs. Moreover, it must be remembered that lack of mortgage credit has been a long-standing cause of deterioration of property values and continuing deterioration of inner-city

areas.

There is another major deficiency in this bill. It is the omission of provisions to delineate and help establish an urban land policy. We seem to be about to set