Senator CLARK. I would also like to offer for the record at this time a statement by Mr. George McLain, president of the National League of Senior Citizens, and chairman of the California Institute of Social Welfare, directed to this subcommittee and these hearings.

(The material referred to follows:)

STATEMENT OF GEORGE MCLAIN, PRESIDENT, NATIONAL LEAGUE OF SENIOR CITIZENS; CHAIRMAN, CALIFORNIA INSTITUTE OF SOCIAL WELFARE, LOS ANGELES, CALIF.

Mr. Chairman and members of the committee, my name is George McLain. I am president of the National League of Senior Citizens, which represents some 250,000 elderly men and women in 21 States. I am also chairman of the California Institute of Social Welfare. Both are nonprofit corporations dedicated to the welfare of the elderly. The National League operates on a nationwide scale, with broader interests and goals. The California Institute conducts a wide range of activities at the State level, constantly struggling for better conditions for our old people, as well as the blind and the otherwise handicapped. I appear before you today as the spokesman for the California Institute, to describe briefly our difficulties in attempting to provide low-rent housing for California's aged.

Of our 50,000 California members, most are elderly men and women, in circumstances similar to those of older folks all across the Nation. The majority are women. Almost all are very poor, engaged in a day-to-day struggle to maintain spiritual, moral, and physical standards of living, despite minimum financial resources. Their needs are many and great. I won't go into these in detail, because most of you gentlemen are familiar with the grim facts that have been exposed by recent investigations. Our old folks are, for the most part, among the neediest citizens of our rich country. They live in daily dread of serious illness, knowing that a breakdown in health means pauperism and a cot in the charity ward of a county hospital. It is our fervent hope that this Congress will take some action to offer the elderly some form of health protection. Less dramatic, perhaps, but equally urgent, is their need for decent housing. Since the end of World War II, this country has displayed unprecedented interest in providing homes for its citizens.

Returning GI's came home to a land that opened its purse wide to establish them in homes of their own. Thousands of neat subdivisions, populated by young, working families are an inspiring testimony to the timeliness of this program.

In our big cities, slums are being demolished to make way for vast redevelop ment projects. The facelifting of our great metropolises, on a scale never before dreamed of, will unquestionably make America's cities the most modern, most fabulous in our age.

Finally, the murmur of unrest among the elderly came to Congress' attention. The old folks, too, wanted help from their Government to improve their living conditions. A revolution in living patterns had left them in a housing limbo, so to speak. The urbanization of America deprived them of the traditional rocking chair on the broad porch of the old homestead. And the demolition of the slums drove them from the beehive-hotels in which they had sought shelter in the cities. As new hotels, new apartment houses, and modern subdivisions displaced the older boarding houses, walkups and tenement buildings in cities and towns, old men and old women were scattered in waves of human bewilderment and confusion.

In 1956, Congress enacted the first "Housing for the elderly" section of the Federal Housing Act.

The leadership and the members of the California Institute of Social Welfare were jubilant. Long concerned about the lack of decent, low-rent housing for older men and women, the California Institute viewed the 1956 action as the first long step toward meeting an urgent need. Under the terms of section 207, nonprofit organizations could qualify for 90 percent financing for the development of low-rent housing for the elderly projects.

We lost no time in seeking to translate our hopes and plans into reality, under the provisions of section 207. Since 1957, we have been working toward the consummation of a housing for the elderly project in Fresno, Calif. This project-FHA No. 121-00055-A-has a replacement value of $4,356,200. It would provide homes for 1,050 men and women of later years, in 556 living units on

a 42-acre tract. Facilities would include a completely equipped community center, with stores, shops, post office, medical offices, and a place of worship. Social and recreational facilities would also be provided. In short, this carefully planned community for the elderly would be a model village, self-supporting and self-contained.

We have been informed by the Federal Housing Administration that our proposal is unique in its field, in that in comprises the first large-scale housing for the elderly development, offering low-rent dwelling units. Other proposals submitted to the FHA have been much smaller in scope. Virtually all are planned for higher income oldsters. Some restrict occupancy by means of substantial admission fees, as high as $7,000 to $9,000. Our Senior Citizens Village, as we propose to call our development, entails no admission fees. Rentals would range from $63.50 per month to $72.50 per month, amounts easily within the reach of most California oldsters, even though their incomes consist only of World War I pension, social security, or the State old-age pension. This is the income group most desperately in need of help.

Unfortunately, we are still far short of our goal of providing decent homes for these oldsters, although it has been almost 4 years since the passage of the original "Housing for the Elderly" section of the Federal Housing Act. The major stumbling block impeding our progress may be expressed in two words: "economic soundness."

This phrase, as applied by the FHA, effectively nullifies the intent of Congress by its narrow emphasis on fiscal feasibility. It places nonprofit groups in the position of meeting financial requirements that would be difficult for profitmaking corporations to meet.

Only with respect to "subsidized" projects does the FHA set aside its "economic soundness" yardstick. But they refuse to accept our contention that our project is (a) fiscally sound in its conception and (b) subsidized. As a nonprofit corporation, we are exempt from payment of local property taxes. This amounts to (FHA estimate) $90,000 per year. We anticipate no repayment or interest return on our substantial equity investment. This would represent an additional subsidy of some $45,000 per year, making a total subsidy of $135,000 annually. I believe that few organizations could offer more firm guarantees of continuing subsidization.

The FHA, in apparent defiance of the intent of the people, as expressed by Congress, has used the criterion of “economic soundness" repeatedly to frustrate and thwart our efforts.

In section 231, passed by Congress in 1959, Congress directs the FHA Commissioner to "*** insure any mortgage *** to provide housing for elderly persons which shall *** if executed by a private nonprofit corporation *** effectuate the purpose of this section, involve a principal obligation not in excess of the amount which the Commissioner estimates will be the replacement cost of the property or project when the proposed improvements are completed." Thus the 1956 section was broadened in 1959 to provide for 100-percent financing.

This obvious advantage has never been applied by the FHA to our proposal. In answer to an inquiry by Congressman B. F. Sisk of California, under date of March 22, 1960, FHA Commissioner Julian Zimmerman offers this hazy explanation:

*** For those projects dependent entirely upon the rental income to meet operating expenses, reserves, and debt service, and not subsidized, a ratio of debt service to net income criteria, or limitation, is imposed, and no change in status is apparent."

As a result, we find ourselves in the difficult position of providing a total of $771,255 in equity requirements, demanded by the FHA for our project. This means that our proposal will only receive mortgage insurance equal to 83 percent of its replacement cost, notwithstanding the provisions in section 231 for 100 percent financing.

With $105,000 already spent in processing our application to this point, plus a $200,000 investment in land, we cannot afford to abandon our plans.

We will proceed, despite the sacrifices we must make sacrifices we did not even vaguely anticipate when we embarked so hopefully upon this effort 3 years ago.

But the eventual establishment of our Senior Citizens Village in Fresno will represent only minute progress toward meeting the housing needs of all our elderly people. Other projects, in other places, at other times, must be under

taken. It is our fervent hope that they will be undertaken under more encouraging circumstances. Therefore, I recommend the following proposals for the consideration of this committee:

1. Appropriation of $100 million or more, for direct, Federal loans for housing for the elderly developments.

2. Allocation of these funds on a basis of State-by-State need and interest, instead of a share-and-share-alike policy.

3. Elimination of the "economic soundness" criterion and substitution of the “acceptable risk” principle in housing for the elderly, such as is now applied to section 203 (i) “under $10,000" housing, and military housing.

4. Mandatory legislation requiring FHA to grant 50-year loan payback periods, as specified by Congress in the Housing Act of 1959. (Present FHA policy is

to restrict paybacks to 40 years, regardless of the 1959 provision.)

5. Federal legislation to make funds available to nonprofit corporations at minimum interest and service charges, for the development of housing for the elderly projects. Ironic as it seems, this Government now extracts a profit in providing funds to nonprofit groups for this purpose, a practice that makes establishment of genuine low-rent housing for the elderly projects vastly more difficult. Adoption of these recommendations in the form of legislation would greatly stimulate the construction of housing facilities for America's older men and

women.

It is to be hoped, too, that this committee will take note of the attitude of the Federal Housing Administration toward legislation enacted by the people of the United States, through their elected representatives. In its strange determination to administer as it sees fit, the FHA appears to have lost sight of a basic tenet of our form of government-the sovereignty of the people. This agency should be reminded that the people delegate powers, but only such powers as are distinctly specified. For the FHA to usurp powers not delegated to it, and interpret the laws passed by Congress to fit its own purposes, places the FHA in conflict with deeply rooted American principles.

Perhaps the answer lies in tedious spelling out of every detail in legislation which must be administered by this Federal agency, in order to prevent obstructing and obfuscating interpretations.

Whatever the possible solution, this problem deserves the most serious consideration of this committee. I am confident that, with full possession of the facts, this committee will arrive at a just and practical conclusion. Furthermore, I am certain that this committee will give due regard to the factual presentation of our frustrating efforts to provide low-rent housing of good standards for a large, neglected segment of our population, and will take such action as is necessary to expedite the development of future housing for the elderly projects. This is one of the greatest challenges facing our Nation today. It is the responsibility of this generation of Americans to meet it boldly and imaginatively. Thank you for your attention.

Senator CLARK. Our next witness will be Mayor Dilworth of Philadelphia, the president of the U.S. Conference of Mayors.

Mayor Dilworth, will you come forward, please? We are very happy to have you with us again. Do you want to bring any of your associates with you?

STATEMENT OF RICHARDSON DILWORTH, MAYOR OF PHILADELPHIA, PA., PRESIDENT, U.S. CONFERENCE OF MAYORS

Mayor DILWORTH. Good morning, Senator Bush. How are you, sir? Senator CLARK. Please proceed in your own way, Mayor Dilworth. We have your prepared statement here. It will be printed in the record. Proceed as you think best.

Mayor DILWORTH. Thank you, sir.

I would like, first, to offer for the record the resolution on urban redevelopment passed at the recent meeting of the annual conference of the U.S. Conference of Mayors. This was more than a perfunctory resolution. Actually, that morning there were about 400 mayors from all the cities on the floor from all the political parties, and it received very careful consideration.

Senator CLARK. The resolution will be admitted in the record at this point.

(The resolution referred to follows:)

RESOLUTION ADOPTED BY 1960 ANNUAL CONFERENCE, U.S. CONFERENCE OF MAYORS, CHICAGO, ILL., FRIDAY, MAY 13, 1960

URBAN REDEVELOPMENT

Whereas the redevelopment of the blighted and deteriorating sections of American cities is vital to the welfare and prosperity of the entire Nation; Whereas two-thirds of the people of the Nation live in metropolitan areas; Whereas more than 400 cities throughout the country have undertaken or are planning redevelopment programs to meet the challenging need for housing, community facilities, commerce, and industry;

Whereas the domestic expenditure of the Federal Government for assistance to and development of cities of our country has failed to recognize that ours is now an urban civilization;

Whereas surveys of the mayors of the United States conducted in 1959 and 1960 demonstrated that $600 million in Federal grants annually over the next 10 years is urgently needed in urban renewal activities;

Whereas present laws provide but half the Federal funds needed in the fiscal years 1960 and 1961;

Whereas the uncertainties growing out of the inadequate level of funds and short term 1- or 2-year extensions of the Federal law disrupt orderly local planning and cause inconvenience and waste: Now, therefore, be it

Resolved by the U.S. Conference of Mayors, That the Congress of the United States and the President recognize the imperative need for urban renewal and housing legislation, and, further, that the Congress insist that any extension of guarantees to the private housing market also include provision for urban renewal and low-rent public housing to meet this imperative need.

Senator CLARK. I think I am correct, am I not, in saying you have recently been elected president of the United States Conference of Mayors?

Mayor DILWORTH. After a very sharp struggle.

Senator CLARK. I want to congratulate you.

Senator BUSH. Could I see a copy of the resolution, unless you are going to cover it?

Mayor DILWORTH. No, sir. There are, I think, the necessary number of copies there, Senator.

Senator BUSH. May I ask a question about this?

Senator CLARK. Yes, indeed, sir.

Senator BUSH. The mayors renewed their position as $600 million annually as an appropriate amount. Is that right?

Mayor DILWORTH. That is right, Senator, for 10-year continuity. Senator BUSH. For a period of 10 years, yes.

Mayor DILWORTH. Yes.

Senator BUSH. I have no objection; I just wanted to see what they recommended.

Senator CLARK. Go right ahead.

Mayor DILWORTH. Also, I would like to submit for the record, if I may, the summary of the results of the 1960 urban renewal survey conducted jointly by the American Municipal Association and the United States Conference of Mayors. That is the survey which showed the needs of the cities of the United States of over 35,000 population for urban renewal, and breaks it down by States, by areas, and the amount for each city.

Senator CLARK. I have an idea that that may already be in the record. But if it is not, it will appear, and be printed at this point.

(The survey referred to follows:)

SUMMARY OF RESULTS OF THE 1960 URBAN RENEWAL SURVEY CONDUCTED BY THE AMERICAN MUNICIPAL ASSOCIATION AND THE U.S. CONFERENCE OF MAYORS

SCOPE OF THE SURVEY

Questionnaires were sent to all cities with a population of 35,000 or more, plus all other local governments in the 50 States and the District of Columbia thought to be interested or considering the initiation of an urban renewal program.

Close to 1,200 local governments were requested to respond by completing and returning the questionnaire. Local officials assigned the task of handling the survey were instructed to make all estimates "in line with your community's fiscal and relocation capabilities."

RESPONSE

By May 1, 1960, 386 communities had responded. A tabulation of the number of questionnaires mailed and responses on a State basis is attached.

Of the 386, 258 answered in some detail. Of this group, 198 had one or more Federal project programs underway, representing slightly over half of the total of 390 localities (exclusive of Puerto Rico) estimated as having been active in the Federal program as of December 31, 1959.

Although the remaining 188 communities returned no useful information on the survey form, 125 of this group did indicate positive interest in the Federal program and an intent to further consider the feasibility of local renewal action. Almost three-fourths of the Nation's cities with a population of 50,000 or more filed a completed questionnaire. Of the 60 cities in this population group which did not respond less than half were active in the program at the end of 1959.

SIGNIFICANCE OF SURVEY RESULTS

Thus while the survey totals probably include the estimated immediate needs of about three-fourths of the Nation's larger cities, they nevertheless are based on information furnished by less than half of the communities of the communities now actively engaged in renewal activity as provided for under the Housing Act of 1949.

The survey totals do not include any estimates of needs other than those furnished by the community. The totals do not include any projections from the "sample" responding.

Total estimates of needs, by State, for the periods covered are included in the attached tabulation.

SUMMARY OF SURVEY RESULTS

Forty-seven cities indicated that they had applications pending with URA for increases in existing capital grant reservations amounting to $132 million.

Thirty-eight cities indicated that they had applications pending for new projects with URA which they estimated would require $173 million in Federal grant funds.

Of the over 430 communities now participating in the program, 108 indicated that they intended to file applications during calendar 1960 covering projects which would require $458 million in Federal capital grant funds.

In addition, 93 cities indicated that they would, some time in the near future, file applications for $44.5 million in grant funds to carry out community renewal programs as authorized under the Housing Act of 1959.

Thus, for calendar 1960, local governments will request URA to act on applications for either increases in existing grant reservations for existing projects or for new projects involving in excess of $763 million.

Of the over 430 local governments now active in the Federal program, responses from 131 indicated intent to file applications for new projects during calendar 1961 in the amount of $424.2 million. Assuming one-half of these applications will be filed during the first 6 months of 1961, i.e., $212.1 million, it is estimated the total Federal grant funds required between the 18 month period from January 1, 1960, to July 1, 1961, will exceed $1,019 million, which amount includes the additional $44.5 in grant funds it is expected will be requested from URA for the completion of community renewal plans during this period.