will be e citie Tanning rs, zo citie know concer munity lespread uces the ime, de he city's ht the ing that acity for hniques S. ove that onstruc: s of our HOUSING LEGISLATION OF 1966 9 I believe that these demonstration programs will prove that, with State and Federal assistance, cities are capable of mobilizing local energies and resources on the scale required to create a totally new living environment. I believe that these demonstration programs will show the people who live in slum and blighted neighborhoods that their local, State, and Federal governments are concerned with their condition, and will do what is necessary to provide a decent environment and an opportunity to participate in the mainstream of American life. Enactment of this legislation could make 1966 "the year of rebirth for American cities." URBAN DEVELOPMENT ACT Let me turn now from the problems of urban blight to the problems of urban growth. This is the subject of the bill referred to as the Urban Development Act. TITLE I. GRANTS TO ASSIST IN PLANNED METROPOLITAN DEVELOPMENT The first title of the bill would provide the new incentives for effective metropolitan planning and development recommended by the President in his January 26 message on city demonstration programs. In brief, the incentive consists of increased aid to federally assisted projects of types which generally affect the growth of metropolitan areas. This incentive would be given only within metropolitan areas where all public and private development, having a major areawide impact, is consistent with fully comprehensive and current metropolitan planning. This represents a new approach to making planning effective. It will not deprive any project of aid it would receive under existing programs. It will simply increase assistance to cities and other State and local bodies that actually develop projects and administer local zoning and subdivision controls consistently with metropolitan plans. This aid is distinct from existing aids to planning bodies for preparing comprehensive metropolitan plans. It is also distinct from Federal financial aids the purpose of which is to help provide specific types of well-planned public works. This new aid would consist of grants supplementing other Federal assistance to projects for transportation facilities (including mass transit, roads, and airports), water and sewer facilities, and recreation and other open-space areas. The supplementary grants could not exceed 20 percent of the cost of these projects. Grants will be available only for projects in those metropolitan areas that maintain current areawide, comprehensive planning and programing. This must be adequate for evaluating and guiding all public and private actions of metropolitanwide or interjurisdictional significance. These grants will be available only to those public bodies in the eli- 1. The location and scheduling of their public facilities; 3. Their other policies and actions of metropo jurisdictional significance. As President Johnson said in his January 26 me gress: The powerful forces of urban growth threaten to overwhe orderly development. A metropolitan plan should be an in: sound urban growth-not a neglected document. This program would provide valuable and much for effectuating such plans. This program, which is an outgrowth of existi development policies, could vastly influence, for the environment of many of our people. Today 125 mi two-thirds of our total population-live in m Twenty years from now we will have added, accordi estimates, 54 million people to our metropolitan poj bulk of them in suburban areas. This is the equiv New Yorks or 27 Washingtons. Federal, State, and local governments will be s] period, billions of dollars for basic services for these highways and other forms of transportation, parks systems, and other community facilities. Careful a ning can greatly reduce the capital costs of provid and can, in addition, make great contributions to able living environment for every American family. The programs supplemented by this bill serve s needs of the Nation's growing metropolitan comm Transportation facilities, water and sewer syster and open-space areas all knit together metropolitan to shape their growth. But if planned inconsistentl that growth, and one project can greatly reduce the from another. The supplemental aid provided under this title is, keyed to critical types of development projects. projects for which there has already been Federal r and a commitment to assist in meeting that need. The proposed supplemental grants will reward S ernment initiative toward higher levels of plann ment and coordinated action. In areas where the called for under this new program cannot yet be gram will not stop needed assistance under the basi The Department of Housing and Urban Dev course, work closely with the other Federal departn whose program areas are being supplemented, t leadership and coordination toward more orderly velopment. This is one of the principal tasks whic assigned to this new Department. It is expected that about a dozen metropolitan a several hundred local communities, might become e mentary grants during the first year. Accordingl estimates that the first-year program level will be With continued encouragement under this progra politan areas, having an aggregate population of might qualify for supplemental grants by the end o 0 HOUSING LEGISLATION OF 1966 11 However, the size and speed of expansion of the program would depend primarily on the degree of effort that metropolitan areas and localities are willing to put forth. The supplemental grants would be available to any jurisdictions which show, as stated in the President's recent message "that they are ready to be guided by their own plans in working out the patterns of their own development and where they establish the joint institutional arrangements necessary to carry out these plans." Additional metropolitan planning efforts under present law: Financial assistance for metropolitan comprehensive planning is available under our section 701 urban planning assistance program. In addition, a special program will be undertaken within the framework of the existing 701 program to develop new techniques of metropolitan planning and implementation. This puts into effect the President's proposal in his message of January 26 for a "series of demonstrations in effective metropolitan planning." I estimate that the total cost of this program will approximate $6.5 million. TITLE II. LAND DEVELOPMENT AND NEW COMMUNITIES Last year, the Congress enacted a significant new program of FHA mortgage insurance for privately financed land development. This program has already attracted much interest throughout the country. Over 100 proposals for well-planned developments, both large and small, are currently being processed in all parts of the country. Title II of this bill will authorize the approval of a category of "new communities" for which land could be prepared with the aid of FHA mortgage insurance under the program. Without the benefit of such mortgage insurance, private enterprise has already undertaken the development of a large number of extensive new communities. Many of them have been planned with imagination and boldness characteristic of private enterprise at its best. But the scale of these projects is such that only large developers can find an adequate volume of favorable financing for the site preparation. Even for them, the financing is often inadequate for efficiently scheduled land development operations, or else the cost is far out of line with the financing charges that the market demands for smaller scale land development, or for actual housing construction. This bill will provide needed credit assistance to facilitate broader participation in these private efforts. It will encourage adequate private financing at reasonable cost for large-scale preparation of sites in well-planned communities. The sites produced with FHA mortgage insurance aid will be made available to a cross section of private builders, especially small builders. They will thus be able to participate more fully in this increasingly important segment of the housing market. If this segment of the market is lost to our small- and mediumsized builders, our new communities will lose the enormous vitality that a diversified homebuilding industry is uniquely capable of producing. The category of new communities would consist of land developments satisfying all requirements under the existing land development program, and meeting additional standards prescribed by the bill. A development could be approved only if the Secretary determines that in view of its size and scope, it will result in substan will contribute substantially to the sound and econo area in which it is located. What is contemplated here is development of la land on a scale that will provide a wide range of u services, while requiring maximum accessibility to cities in the area. This would facilitate such benefit: land costs, a better balance of varied housing and ot reduced traffic. Above all, we would be affording: desirable choices for the home-buying and home-r To encourage well-planned developments of this s cial aid in the form of FNMA special assistance co able, if needed, and longer mortgage maturities wo for this category of land development. These spec be available for land developments, no matter how are not approved as meeting the special requireme new communities. The title would also increase from $10 to $25 mill outstanding mortgage amount permitted for a single opment. Title II would also authorize Federal loans to agencies to finance the acquisition of land to be u with the later development of well-planned residenti subdivisions, or new communities. These land dev would include municipalities and other public corpo designated or created under State law for this pu The Federal loan could equal the cost of the acqui including capitalization of interest, and would be 15 years. The interest rate would be the same as facility loans program. The loan proceeds would n site improvements, although other provisions of F authorize assistance to State and local public boo such improvements. The land acquired by the land development agen for private residential and related development in development plan made by the agency and approved The land could be developed by the private owner FHA mortgage insurance assistance. These proje dential neighborhoods, housing subdivisions, or mor opments, including new communities. TITLE III. URBAN MASS TRANSPORTATI Title III of the bill will authorize appropriations tinue the urban mass transportation program throug It will increase the present authorization, by $95 m to assist localities to finance needed mass transporta equipment. It will also increase, by $10 million, the appropriations to develop, test, and demonstrate new transportation facilities, equipment, or techniques. Advance funding is essential in the urban mass t gram. It allows communities time to plan their pr Jeds comiorralah in HOUSING LEGISLATION OF 1966 13 ance that funds will not be exhausted during the "leadtime" between starting to plan for a project and applying for grant assistance. This time amounts to several years in the case of larger projects. The proposed program level is well supported by the volume of applications in hand and known to be in preparation. The capital grant assistance under this program has given-and will continue to give-help to communities of all sizes, including so ne faced with a breakdown or total loss of public transportation service. It is helping communities to carry out planned improvements in eq tipment and facilities which they could not themselves finance out of the farebox. And it is stimulating local initiative and local action in the planning and provision of transportation facilities in coordination with community development. TITLE IV. GRANTS FOR URBAN INFORMATION CENTERS Title IV of the bill would authorize a new program of Federal grant assistance to States and metropolitan area agencies. These grants would finance up to 50 percent of the cost of programs demonstrating methods of establishing effective urban information centers. These centers would make it possible to assemble, correlate, and disseminate information and data on the physical, social, and economic problems of urban areas, and on the governmental and other programs dealing with such problems. In recent years, there has been a great expansion of Federal, State, and local programs dealing with urban problems. These programs can be used to best advantage only if State and local governments, organizations, and individuals have ready access to information regarding them. In addition to information as to the availability of urban assistance programs, the urban information centers can provide useful and necessary data needed for planning, programing, budgeting, and coordinating these programs. Few States and local agencies have been able to develop effective information centers with their existing resources. There are considerable technical problems involved in selecting the data which should be fed into the system, and in combining Federal, State, and local data which exists but is not in readily usable form. The assistance provided by this title would help State and local agencies resolve these problems. HOUSING AND URBAN DEVELOPMENT AMENDMENTS OF 1966 The Housing and Urban Development Amendments of 1966 will make some needed changes in laws governing existing programs, and will encourage the application of advances in technology to housing and urban development activities. First, an amendment would permit lenders, who make loans under the FHA title I property improvement program, to collect the onehalf of 1 percent insurance premium from the borrower. This is the only FHA program under which the cost of the insurance is not directly borne by the borrower. We are nevertheless suggesting that the amendment be effective for only 1 year, as provided in this |