in acquired or leased dwellings. This "flexible formula" w 10 (c) of the United States Housing Act of 1937 by the 1965 ac At the same time, the Congress enacted a separate comp of the United States Housing Act for short-term (1 to 3 years of privately owned existing housing. This incorporates formula" limitation on the maximum amount of annual con subsidy that could be provided with respect to such leased dw Thus, both section 10 (c) and section 23 contain "flexible which permit paying the same annual subsidy with respect t existing housing as would be payable for newly constructe the community.

The amendment proposed by the bill would make it clear ble formula" provisions could be used for the leasing of housi as well as for the leasing or acquisition of existing housing. benefits would be derived from application of the "flexible fo leasing proposed privately owned new construction as well a existing housing.

This would be particularly true in the very promising pr tures between public housing authorities and private owne and middle-income developments. Presently such developme tion may only be financed under the 40-year, standard lowsions. These provisions are not suitable for leasing at desi which are often the only terms available from the private own Applying advances in technology to housing and urban develop

Over the years, the focus of Federal attention in providing a and urban development has been on financing techniques. payments required in connection with FHA-insured mortga kept to a minimum, loan maturities have been extended, and been lowered-in some cases to below-market rates. By t of housing, in terms of monthly payments, has been lower many families have been enabled to purchase new homes or who otherwise could not have done so.

In the area of urban development, programs of loans ar devised to help communities meet the problems of urban blig There are, however, definite limits to what liberalization o plish in the face of the continuing rise in housing costs and plexities of urban living. During the third quarter of 190 median sales price of single-family homes sold was $20,30 than the $18,900 median price for homes sold during the th During the same period, slightly more than 20 percent of nev than $15,500, nearly 5 percent less than in 1964. Coupled w fact that, as of 1964, half of the Nation's families could no homes priced at more than $14,000, or to pay rents exceed assuming a 5-to-1, income-to-rent ratio). b

9 Equally important is the fact that over the next decade t must increase its annual production by one-third-from 1.5 units-if it is to accommodate the expanding housing needs of 99 In addition, between 1960 and 1975, our urban population from 125 million to 171 million, placing added strains on o urban facilities, such as water, sewer, and transportation. Des Considerable technological advances are being made by 1 State and local governments both with respect to the cost construction and with respect to meeting the complex probl opment. Constant experimentation is being carried on in su design, materials, and construction techniques, and in makin safer, healthier, and more attractive places in which to live.

The problem is sometimes misunderstood as being entire logical progress. Rather, it is important to note that these in technique are often slow to be applied. Builders are relu major changes in designs or materials for fear of adverse m home buyer does not readily accept deviations from tradit or materials. Labor is often unreceptive to cost- or time-sa fear of economic loss. And communities that could benefit application of such new urban techniques as large-scale cent wastes or new methods of intracity transportation are ofter these lines.

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These are some of the practical problems that have held back progress. It is here that the Federal Government can and should assert leadership, so that the great technological strides that have been made in recent years, and that continue to be made, can be harnessed to the benefit of all Americans. This is what the bill seeks to accomplish.

The bill would direct the Secretary to encourage and assist the housing industry to reduce the cost and improve the quality of housing through the application to home construction and rehabilitation of advances in technology, and to encourage and assist the application of advances in technology to urban development activities.

The Secretary would be further directed to conduct research and studies to test and demonstrate new and improved techniques and methods of applying advances in technology to housing construction, rehabilitation, and maintenance, and urban development activities. He would also be directed to encourage and promote the acceptance and application of new and improved techniques and methods of constructing, rehabilitating, and maintaining housing, as well as the application of technology advances to urban development activities, by all segments of the housing industry, communities, industries engaged in urban developments activities, and the general public.

When this program is funded its administration would be handled as part of the Institute of Urban Development recommended by the President in his 1965 message on the cities.

The research and studies would be designed to test and demonstrate the applicability to housing construction, rehabilitation, and maintenance, and urban development activities, of advances in technology relating to (1) design concepts, (2) construction and rehabilitation methods, (3) manufacturing processes, (4) materials and products, and (5) building components.

Research and study projects could be undertaken either directly by the Secretary or by contract with public or private bodies or agencies, or by working agreements with other Federal departments or agencies. Each project would be required to be completed within 2 years.

Provisions of title III of the Housing Act of 1948 and section 602 of the Housing Act of 1956 presently authorize the Secretary of Housing and Urban Development to undertake and conduct studies relating to the reduction of housing construction costs through the use of new and improved techniques, materials, and methods. However, these existing provisions authorize such studies to be undertaken as part of broader research functions such as the collection and dissemination of data relating to market analyses, housing inventories, mortgage market problems, and the housing needs of special groups such as the elderly.

This bill recognizes the importance of a program designed specifically (1) to reduce housing costs through application to home construction of technological advances, and (2) to assist and encourage the application of advances in technology to urban development activities, by directing the Secretary to undertake such a program and authorizing specific appropriations for that purpose. Rehabilitation and code enforcement grants

This bill would repeal a provision in the Supplemental Appropriation Act, 1966, which limits the amount of urban renewal grant authority that can be used in fiscal years 1966 and 1967 for grants for rehabilitation and code enforce

ment.

The limitation that would be repealed is inconsistent with the general purpose of the rehabilitation and code enforcement grants. Authority for these grants was added to the Federal urban renewal law by the Housing and Urban Development Act of 1965 to encourage more conservation and rehabilitation and thus lessen the need for large-scale slum clearance and redevelopment. The limitation in the appropriation act limiting the total amount of these grants hampers the achievement of this purpose.

Repeal of provision for sale of Forest Hills project, Paducah, Ky.

Section 1005 of the Housing Act of 1964 would be repealed. This is the provision that directed the sale of an FHA-acquired rental housing project in Paducah, Ky., to the Paducah-McCracken County Development Council for use of the Paducah Junior College. Over a period of almost 2 years, the FHA has not been able to put this provision into effect and there is no foreseeable change in circumstances under which it can be put into effect.

The Paducah Junior College, after enactment of the 1964 provision, received private land donations more appropriate to its needs and lost interest in acquir

62-551-66-pt. 1—8

ing the project. The development council proposed other but has been unsuccessful in its efforts to obtain financing tion 1005 is desired to permit consideration of other mean property.

A requirement in the Federal urban renewal law woul which contracts for supplies or services which exceed the a be made or entered into only after advertising for bids.

The provision that would be repealed is inconsistent wi statute which imposes the advertising requirement on all this type which exceed $2,500 in amount. The repeal of urban renewal law would remove this inconsistency.

In addition, provisions in the urban renewal law and the law would be amended to make it clear that references Area Redevelopment Act include also references to law mentary to that act. These amendments were inadverten Housing and Urban Development Act of 1965.

A 1954 prohibition against FNMA's purchasing loans in prior to August 2, 1954, would be repealed. This provisio 1954, as it protected the fledgling secondary market of inundated by offers of existing mortgages. However, it purpose. While repeal of this provision would make eli few mortgages of an age of 12 years and upwards which the number involved is negligible.

TITLE II. CONFORMING NOMENCLATURE IN STATUTES TO DEP
AND URBAN DEVELOPMENT ACT

This title has no legal significance except to correct th statutes to conform to existing law as provided in the De and Urban Development Act.

The title would make technical amendments in the Federa the programs of the Department of Housing and Urban D related Federal laws to make the nomenclature in those provisions of the Department of Housing and Urban De amendments would make no substantive changes whatsoe of the laws.

For example, under the Department of Housing and Ur all functions and powers of the Department are vested in Department. This title of the bill would therefore chan and Home Finance Administrator, Public Housing Commiss Housing Commissioner, wherever they appear in the Feder tary of Housing and Urban Development. Likewise, the ter Finance Agency would be changed to the Department of Development.

Senator SPARKMAN. The committee will stand o'clock tomorrow morning.

(Whereupon, at 12:15 p.m., the committee rece at 10 a.m. Wednesday, April 20, 1966.) blow (The following correspondence and attachmen independent of Mr. Weaver's testimony :)

Th

QUESTIONS AND ANSWERS ON CITIES DEMONSTRATI Question. What is being demonstrated by the program? Answer. The city demonstration programs would sh concentrated programs of physical reconstruction or reh service can revitalize entire sections of our cities. cities of all sizes and types, and in all parts of the co mobilizing local resources and integrating them with attack major urban problems on the scale required to living environment. The city demonstration programs who live in slum and blighted neighborhoods that th anal rateful to ban hoon all the OTO

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Federal governments are concerned with their condition.

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They will show that concern for and service to people are essential ingredients in the rebuilding of our cities.

Question.—What advantages does this approach have over expanding the present urban renewal and OEO programs?

Answer. Both the urban renewal and anti-poverty programs are expected to be essential components of any city's demonstration program. In addition, this bill would provide a mechanism which will coordinate these and many other activities to provide the maximum impact on the areas involved. Furthermore, this approach has the advantage of providing substantial funds to encourage innovation without being subject to all the administrative restrictions inherent in any more narrowly based grant-in-aid program.

Question. Is it reasonable to expect cities to demonstrate a massive impact on their deteriorated areas in the six years contemplated by the bill?

Answer.-Through both the size and concentration of effort, it will be possible to achieve a greater impact on the problems of slums and blight than has heretofore been possible. The demonstration program, by coordinating and providing a sharper focus for various physical and social service activities, will constitute a total attack on major urban problems. It will avoid the fragmentation often characteristic of piecemeal approaches to the problem. Furthermore, because of the relative freedom the cities will have in the use of the supplemental demonstration grant funds, a high level of innovation can be expected to result in the development of new and better methods by each city for dealing with its particular problems. While there can be no absolute assurance of the desired massive impact in six years, it can reasonably be expected, particularly in view of the fact that cities will focus their efforts in selected sections or neighborhoods.

Question. What cities are chosen and on what basis are they chosen? Answer. A number of factors will enter into the selection of cities which will participate in the demonstration program. One will be the quality of the proposal submitted. That proposal must show that the city is prepared to make a strong commitment to achieving the purpose of the demonstration program and to deal with the major, social and physical problems that confront it. Acceptable proposals should show a high order of imagination and innovation in dealing with major urban problems, since one of the purposes of this program is to pioneer new approaches to solving such problems.

The decisions on which cities will be selected will also have to take into account both the population size and geographical location, since the intent is to provide the widest possible distribution among cities of all sizes within the limitation of the funds available.

Question.-Will small cities have an opportunity to participate in this program, or will it be a predominantly large-city program?

Ansicer. This bill is intended to aid cities of all sizes. Funds will be so allocated as to establish a definite pattern of participation by cities of all sizes.

Question. When will cities not chosen be given a chance to participate? Answer. This bill is intended as only a demonstration of what can be done rather than a total answer to the problem. If it is successful, we would expect the Congress would want to consider extending this approach to other cities and to consider drawing on its experience in authorizing or extending other programs.

Question.-What kinds of areas will be acceptable for the demonstration area? Must it be the area with the worst problems or can it be a better area where solutions are more likely?

Answer. The bill speaks of demonstration areas as being those of "widespread urban slums and blight". Although technical criteria and definitions of slum and blight will not be applied, at least a part of the area should consist of what would generally be regarded as hard-core slums in which low-income families are concentrated. The demonstration need not deal exclusively with the area of the poorest housing and worst social conditions. It might include areas which are still sound but in which there are unmistakable signs of deterioration. Some cities, knowing best their own local situation, may prefer to begin working in an area of slightly lower priorities in terms of need-but which would furnish much greater promise in terms of improvement for the dollars invested.

Question. The bill speaks of "slum and blighted areas". same thing as it does in the urban renewal program?

Answer. The reference to "slum and blighted areas" i have the precise technical meaning that it does under defini applicable to the urban renewal program. Rather, it is i in general terms the character of the areas to be helped. T demonstration program does involve undertaking urban such, the areas involved will, of course, have to conform used in the urban renewal program as well as the applic legislation.com

Question. Section 4(b) (1) of the demonstration cities demonstration program be "of sufficient magnitude in both dimensions (i) to remove or arrest blight and decay in neighborhoods; (ii) to provide a substantial increase in the housing of low and moderate cost; (iii) to make marked the poor and disadvantaged people living in slum and bli view to reducing educational disadvantages, disease, and and (iv) to make a substantial impact on the sound develo city." What guidelines will be used to delineate "entire borhoods"? Does the requirement that a substantial incre standard housing of low and moderate cost be provided p neighborhoods where current density levels are already hig requirement mean that there must be a substantial increase of low and moderate cost in other than the project section What criteria will be used to measure a "substantial in development of an entire city"?andi bat odd

Answer. The term "entire sections or neighborhoods" w terms of the specific city involved and its particular ne The intent is to deal with total cohesive areas rather th ments of a few square blocks.

In his Message transmitting recommendations for city grams, the President provided some general criteria of He indicated that a city program should involve as much of the substandard structures within the city. For the 1 program might involve a total of 35,000 dwelling units. population of approximately 100,000, the program mig four thousand dwelling units. batatas How asilio doldw

The proposed requirement that there be a substantial in of standard housing of low and moderate cost is intend city as a whole and not just to the area of the demon expect that the bulk of the new standard housing of thi provided either through rehabilitation of existing housing of new housing in the demonstration area. However, if of the demonstration area were excessive density, then the program would be the reduction of that density a housing in other parts of the city. It should be emphasi requirement that all of the activities of the local demonst be carried out within the boundaries of the demonstration a The term "substantial impact" is not intended to be terms. The objective is that there be major social and ph taking place in a substantial portion of the city so that th a better place in which to live and work and that this clearly attributable to the efforts of the demonstration Question.-The bill requires the program to provide for a in the supply of standard housing of low and moderate cost are expected to be used to accomplish this?

Answer. The principal resource would be extensive re ing housing with all Federal aid now available for such tional support to rehabilitation activities which might the use of the supplemental demonstration grant funds.

Each city will be expected to make full use of existing t provision of new standard housing of low and moderate cost public housing program, the rent supplement program, program. However, it is obvious that these programs meet the massive housing needs of the demonstration o will generally provide the largest part of the housing.