behind them. There is so much that has to be put in ahead, in terms of utilities and shopping centers, what have you, to begin with, that the major institutions just feel it is too much risk to put that in one pie. Senator PROXMIRE. Is this actually blocked, you are proceeding in Honolulu ?

Mr. HAIGHT. It has not, we have been exploring out methods of financing, but we are eager to pursue this one, if it becomes available. Mr. GELDERMANN. Mr. Chairman, financing in the main is available for a substantial project. However, the price of this financing, which ultimately reflects on the purchase price of the products, and the cost to the ultimate home buyer, sometimes becomes quite extreme. Successful planning of a long-range program is something that is not well received by the typical developer. I have been a developer for many years and I have gone the route of having to develop 100, 200 lots, build them out and then when the necessity came for a service station or a small commercial, we would run down to the planning commission and try to get that zoned, because we had enough people to substantiate this commercial.

We have attempted to approach this in, you might say, short-range, long-range planning by a master plan of a development which is possibly a 5- to 7-year program. But then we are taking one more step. We are building a project which we know will take 20 years to complete and we must pass great areas of land with utilities, streets, properly sized utilities at that, and not use this land, because it is not going to be ready. It is in the right location, and it is properly placed, but it won't be ready for that supermarket for maybe 15 or 18 years.

This type of financing really is not available, because land financing in the main is short-term, normally 2 to 5 years maximum is your longevity of a land development loan, more normally it is 2 to 3 years. This is the problem really.

The Federal insurance on this program, FHA participation, would make funds available from private sources; in other words, there would be private sponsors for the loans, but the insurance would make them more attractive.

Senator PROXMIRE. I think this has a lot of appeal, it is just, there are so many groups, as you know, which are opposed to this, or who have been. You have the mayors of the central cities, who feel they will have the most affluent people move out; you have the little homebuilders who feel they will be excluded; you have the fear that the Federal Government, because it doesn't put up any money, but has the insurance program, will be a dictator and insist on its own standards that might interfere with local option.

As I understand it, the staff tells me there are some 60 of these new towns in operation without a Federal insurance program.

Mr. GELDERMANN. This is a matter of opinion. Of course new town being an adjective, what is a new town?

Senator PROXMIRE. Communities, outside of big urban areas, on the same basis you describe here, or similar.

Mr. GELDERMANN. Really in our travels, we find that there are possibly fewer than five or six true new towns as we are viewing the new

town.

Senator PROXMIRE. I see.

Mr. GELDERMANN. In fact, we are in the city limits in each instance, in Honolulu and San Jose. We are not trying to create a new city or political subdivision. We are merely trying to create a type of development which we call a new town, because of consents that are embraced within the plan.

We have discussed this with the conference of mayors, in our instance they are not, they don't have this concern that we are going to create a new city that will drain taxes and things out of the old city. They do see that this type of legislation, whereby the FHA insurance would be extended to land development, would have considerable significance, and would make for better planning. But I think the conflict basically is with the idea of creating a new city. I know lots of people have addressed themselves in this direction, when they speak of a new town. And I think it is unfortunate that the words are misunderstood at times.

Senator PROXMIRE. Well, I appreciate that. That is a good distinction, and I also appreciate your excellent and persuasive statement. Thank you gentlemen, very much.

The subcommitte will stand in recess until tomorrow morning at 10 o'clock.

(Whereupon at 12:50 p.m., the subcommittee was recessed, to reconvene at 10 o'clock a.m., on Thursday, April 28, 1966.)

HOUSING LEGISLATION OF 1966

THURSDAY, APRIL 28, 1966

U.S. SENATE,

COMMITTEE ON BANKING AND CURRENCY,

SUBCOMMITTEE ON HOUSING,

Washington, D.C.

The subcommittee met, pursuant to recess, at 10:08 a.m., in room 6226, New Senate Office Building, Senator John Sparkman (chairman of the subcommittee) presiding.

Present: Senators Sparkman and Williams.

Senator SPARK MAN. Let the committee come to order, please.

The first witness was to have been Senator Magnuson and the mayor of Seattle, but Senator Magnuson has not arrived yet. We do need to get these hearings on the way.

Mayor Lindsay is here from New York and also Senator Javits, so, if there is no objection, I think we will proceed.

Senator JAVITS. Mr. Chairman, I have the great honor to introduce our former colleague here in the Congress, and the mayor of the city of New York, John V. Lindsay.

Senator SPARKMAN. We are glad to have you, Mayor. I didn't expect Senator Javits to be so concise. He usually isn't so brief. Senator JAVITS. He knows we are very proud of him. He is in a hurry today.

STATEMENT OF JOHN V. LINDSAY, MAYOR OF NEW YORK CITY; ACCOMPANIED BY ARTHUR PALMER, CHAIRMAN OF THE MAYOR'S COUNCIL ON TRANSPORTATION IN NEW YORK CITY

Mayor LINDSAY. Thank you, Senator Javits. Mr. Chairman, I have with me today Arthur Palmer, who is the chairman of the Mayor's Council on Transportation in New York City.

I should like, at the outset, to present my credentials for testifying on the bill that is before this subcommittee. First, I am the mayor of New York City.

Second, I am a graduate of the 12-day cram course conducted early this year by the "Michael Quill Institute for the Study of the Interrelationship Between Collective Bargaining Procedures and Mass Transportation Operations."

I said only that I was a graduate; the kind of marks I received are still being evaluated.

More seriously, I appear here today as the representative of the millions who ride New York City's bus and subway systems every working day.

The Federal Government, by and large, has either ignored or neglected these people-not only in New York, but in virtually every major American city. The Congress traditionally has viewed bus and subway systems as the sole responsibility of the cities. Yet it has committed billions of dollars in Federal grants to the construction of highway and freeway networks in those very cities.

The freeways have not resolved the strangulation of the commercial core of our cities by traffic; they have, in fact, added to the congestion, noise, and pollution. Even worse, the Federal emphasis on highway transportation has solidified the stagnation of mass transit systems by encouraging subway and bus passengers to use automobiles.

It is my purpose today, accordingly, to argue the case for the straphanger.

My testimony consists of three general sections:

The first is a description of New York City's mass transit system; the second is an assessment of the impact upon that system of federally assisted highway; the third consists of an endorsement of the bills introduced by my former colleagues, Senator Javits and Senator Williams.

NEW YORK CITY'S RAPID TRANSIT SYSTEM

The United States is developing into huge city complexes, among them Boston, New York, and Baltimore-Washington. Between Washington and Baltimore, the theoretical boundaries of the historic city have been overrun. Geopolitics tells us the entire eastern seaboard from Boston to Norfolk will be joined in a community of cities well before the end of this century.

Metropolitan New York, the largest of any of the existing city complexes, will stand at the center of this massive concentration of people. Already, 1 of every 10 Americans lives within commuting distance of New York City.

The broad policy question of which this hearing forms an integral part is whether adequate commuting facilities are to be available 25 years from now, and, if so, how they are to be provided. A review of New York's existing public transportation system may contribute to the eventual resolution of that question:

New York City's rapid transit network forms the largest railway in the world in terms of passengers carried. Every weekday, the city's transit authority dispatches 8,500 trains along 30 routes and 240 miles of track. They carry about 4.5 million persons. Most of the passengers are en route to or from their place of work. Another 100,000 persons travel on 2,500 transit authority buses every day-a number matching less than 10 percent of the rail system's volume. Thus my testimony will be concerned chiefly with rail transit.

The city's subways transport almost 1.5 billion persons a year. Most of them ride between 7 and 10 a.m. and between 4 and 7 p.m. The destination of the majority is the area of Manhattan Island south of Central Park. To a great degree, consequently, many functions of our rapid transit system are frozen in both time and space.

The costs of transporting millions of New Yorkers and commuters are formidable. Almost 26,000 employees are needed to operate and