peo I mean, in fairness to the whole overall picture, it benefits the ple of the United States and you are bound to find some dishonest persons somewhere in such a large picture. Mr. EVANS. Well, I think it is much broader than that, Congressman. I believe that you will find that windfalls, for instance Mr. BARRETT. I am not speaking of the windfalls. Mr. EVANS. On the actual corruption? Oh, no, I would agree with you. This is not the big item that needs to be investigated. Mr. BARRETT. Well, Columbia Plaza and Erieview have been publicized throughout the United States and they are presenting a picture that 700 projects are infested with corruption-at least that is what the opponents of urban renewal seem to be trying to do. You will certainly say that that is not right, will you not? Mr. EVANS. Of course, the whole 700 are not. Some of these projects have been outstanding, and some of them have made contributions to cities which have been very fundamental and important. There is no question about that. In many ways the program has been successful and effective. Mr. BARRETT. Thank you very much. Mr. WIDNALL. Mr. Chairman, I agree with what he just said and what you just said in the main, that it has been successful, yes, but that does not mean that if you find a cancer or a sore that it should not be fully explored and those involved penalized for what they have done. I do not believe we should gloss over where these things have taken place because if we do you only encourage further malfeasance or misfeasance or whatever you want to call it in connection with the administration of the project. I think this is what the witness is trying to say. Mr. EVANS. That is correct, and I think it is important enough and widespread enough to justify very, very careful investigation. Mr. BARRETT. Well, just let me close on this one point: We have more fraudulent acts today, embezzlements, et cetera, of a greater numbers of dollars than ever in the history of the country, and certainly they are brought to task for it. I mean, do not close all of the banks just because somebody went bad in one bank, but what we are doing here today on this bill is learning from you people, and I think we are doing a good job here. Where there has been mistakes made we can correct them in the future. I think this is the answer to your problem. We want to learn and we want to correct mistakes, but we do not want to condemn something that is worth while to the American people. Mr. STEINER. However, Mr. Chairman, if I may recite again our principal point, we see no reason for extending this urban renewal program Mr. BARRETT. Oh, I appreciate the fact that you are against any Federal aid to any State or municipality. You want them to go on their own, but I am certainly talking for the greater good for the greater number. Mr. STEINER. We would believe that our recommendations-to make urban renewal a local responsibility-are the right ones. The talents are there. We have shown by our study that the funds are there available at a State and local level, and we think it is unworkable to provide two or more Pentagons full of people to direct decisions in water and sewer and rehabilitation for every locality in the country. That is the trend under the present urban renewal program. Mr. WIDNALL. Mr. Steiner, one more question right now: If the workable program were properly administered, and you are critical of the administration of it at the present time, do you feel that this would eliminate the need for Federal subsidies? Mr. STEINER. Yes; to a great extent. Mr. Evans has examined this particular factor a great deal. Would you care to extend your comments? Mr. EVANS. I think the evidence in support of doing more by exploring the workable program requirements is very considerable. Some of the best evidence was contained in the former hearings of your committee, where the GAO indicated what had happened because of the failure to enforce the workable program as it should: where projects were authorized that should not have been authorized if the workable program had been properly enforced. But here is the kind of evidence which, to me, is very persuasive. It is in the story, Congressman, put into the Congressional Record on December 23 by yourself in which you were calling attention to some of the things that had happened in Cleveland. Here is a quotation from an article by Paul Lilley, which appeared in a Cleveland newspaper on March 2, 1962, and it said: All of these This is one paragraph from the article All of these urban renewal dollars, city officials admit, have been spent as the direct result of the city's failure to enforce building and housing codes. Now, at this time, so far as I have been able to determine, there was no protest from any public official about this kind of declaration. This is an indication of the conditions which exist around the country. In our publication "Basic Decisions in Community Development,' we discuss the local alternatives available. These are pages 102 and 103 in that pamphlet. A hypothetical situation in a Midwestern community is described. The comparison is hypothetical because only one course of action was taken. It was estimated that enforcement of housing codes would have solved the problems. There might have been installation of sewers required in one part of the area, the cost to be assessed against the benefited property. Instead of this alternative, the area was turned into an urban renewal project and, according to figures submitted to us, the actual gross project cost to accomplish the same renewal results that should have been done very largely with the workable program was over $2 million. And in that gross cost, there were city improvements of $470,000no-noncash grants-in-aid of $577,000. The net project cost was $1,722,000. The city's share was $574,000 covered by that $577,000 in grantsin-aid, so the city paid nothing and Federal taxpayers paid $1,148,000 to take care of this project which could very largely have been taken care of by exploring the workable program. We think this is an example. Mr. WIDNALL. I think, for the record, you ought to cite the name of the municipality. Mr. EVANS. I stated that this was a hypothetical situation because the job via the workable program was estimated and the area ultimately became a Federal urban renewal project. These were figures which were submitted from a city in Indiana. These were not the final figures. They were estimates. I have no actual certification that these are the official figures. I believe them to be reasonably close. I think this is the kind of thing which would bear investigation, but I am not in a position at the present time to name that city. If I were to name it, I would have to get the permission from the individuals from whom I received the information. I think this circumstance provides an indication of how the Federal urban renewal program is carried out. It is worth looking into very carefully. Mr. MOORHEAD. Mr. Chairman, first I suggest that the witness try to get clearance to reveal the name because we cannot very well investigate something if we do not know what to investigate. Mr. EVANS. I will be happy to do that. Mr. MOORHEAD. And I think the record will be open for a while- Mr. MOORHEAD. Thank you. I should like to ask if you have made an estimate as to how much local money would be necessary over the country to do the job of community development which the chamber is proposing? Mr. EVANS. The important point is that the cost per project would be much lower under our program. Part of the evidence is to be found in part I of your own hearings dealing with Pittsburgh, Pa., the chart on page 46. I think you may be familiar with what I am talking about here. You have 13 projects listed in Pittsburgh. Eight of those were done with no Federal subsidy whatever. Mr. BARRETT. What are you reading from? Mr. EVANS. From the records of your hearings on October 22, 23, and 24, 1963, part I, page 46. The eight projects which were done without Federal assistance require a total public cost of a little over $2 million. The five projects which were done under Federal urban renewal completely changed the process and involved a lot more planning and other costs. There was an excess of $77 million public cost. Now, when such a large public cost is involved, a project is much more difficult to finance than is the case where only a $2 million obligation for the eight locally financed projects. Now, I want to go on again from the chart to point out that after spending the $2 million on the non-Federal projects, the estimated private investment to date, and pending, in the eight project areas was over $255 million. In the projects done with the Federal expenditure of $77 million, the private investment anticipated-was $211 million. What we are trying to say is that we are talking about two different processes, and we believe that there is a self-liquidating process that can be used in projects to produce a result better than the Federal process at far less cost. Mr. MOORHEAD. You have gotten a little bit off my question, but are you familiar with those projects in Pittsburgh? Mr. EVANS. To some extent, sir. Mr. MOORHEAD. Then you would realize, of course, that they are entirely different sorts of projects. There are some, as you can see, which can be done with private money. There are others, because of the economics of the situation which cannot be done with private money. Mr. EVANS. This is correct. Mr. MOORHEAD. It is obviously to the advantage of the city to do those projects which can be done with private money because the city taxpayers are not called upon to do it. There are others where the economics of the situations, if you are going to do the project at all, will require substantial sums of public money, whether it is local public money, local taxpayers' money or Federal taxpayers' money or a combination of both. Mr. EVANS. This is quite possible. Mr. MOORHEAD. So that I do not think you can compare the two. There are certain projects which either the city is going to have to come up with the $77 million for, or the Federal and the city are going to have to come up with it. Now, what I am asking is this: If you made an estimate as to the total cost of community developments across the Nation under the proposals that you make? Mr. EVANS. Well, we would say this, Mr. Congressman: That to the extent that projects can be made self-liquidating they should be made self-liquidating, and if this can be done the cost can be tremendously reduced. Now, let me give you an example Mr. MOORHEAD. Now, let me say, sir, that we in Pittsburgh, quite agree with you. When we can do one with private capital we have done it, as the chart proves. So, to that extent, we are entirely in accord. Mr. EVANS. But Pennsylvania, under State law, does not have the tools with which to carry this process as far as it can be carried. For example, California has a State law which says that on a project which is creating new and additional tax values the additional increment of taxation can be used as security for revenue bonds with which to carry out the project. Now, with this tool, I think, it is possible in Pittsburgh to extend the area that can be done on a self-liquidating basis at no cost to the Federal Government or to the local government, and I would like to support that by an example from New York City. The assumption in New York City is that all of the projects have to be supported by Federal revenues because New York City does not have the means of taking care of its own renewal. The first 10 projects in New York City, done under the Federal urban renewal program for which statistics became available, showed this result. The net project loss was $84 million. The Federal taxpayers' contribution was $56 million. That wiped out the deficit, cleared the boards, and New York City today is receiving an excess of $5 million per year from those projects which goes into the general fund, clear revenue, to be used for any purpose New York City sees fit to use it. If New York State had had a law which said that these revenues can be pledged as security for bonds with which to carry on the program, no Federal taxpayers' money need have been involved. No local taxpayers' money would have been involved. Those bonds would be exempt from the debt limit so that the financial position of New York City would not have been prejudiced in any way. But the cost would have been carried and New York City then could go on. You see, at the present time New York is limited in what it can do because only so much money can be made available from the Federal Government. On a self-liquidating basis there is no limit on the number of projects which New York City could be carrying out. So, from our point of view, this kind of a proposition would enable New York to do much more than she is doing today. Mr. MOORHEAD. We had a very fine witness, the mayor of the city of Boston, who got into this discussion and he pointed out that some projects could be self-liquidating and some could not. Maybe it is just making the city a better place to live; such as maybe a park. To have a balanced program you have to have the ones that are strong financially supporting the ones that are strong esthetically, and in this connection I would like to read a statement from the Boston Chamber of Commerce. This is their January issue in which I think that noble chamber of commerce recognized this situation. They said first: There is a critical need for some remedial action to combat the problems of blight and slums. Urban renewal, under the federally prescribed program, provides the means and the method for solving these problems. It represents what appears to be the only way the job could have been done in Boston. Now, I take it you do not agree with the position of the Boston Chamber of Commerce. Is that correct? Mr. EVANS. That is correct. Mr. MOORHEAD. Thank you, Mr. Chairman. (The following information was subsequently submitted for the record and is inserted at this point.) CHAMBER OF COMMERCE OF GREATER PITTSBURGH, Hon. WILLIAM S. MOORHEAD, House Office Building, Washington, D.C. Pittsburgh, Pa., February 28, 1964. DEAR CONGRESSMAN MOORHEAD: At its February board meeting, the Chamber of Commerce of Greater Pittsburgh's Board of Directors voted to support the administration's proposals on urban renewal and public housing. You may have seen the most recent report of progress prepared by the Urban Redevelopment Authority of Pittsburgh reporting 15 urban redevelopment and renewal projects completed or in execution. It is estimated that the total public cost of carrying out the 15 projects is $128.3 million with two-thirds or $85.6 million paid by the Federal Government. For these 15 projects the total investment by private commercial capital and institutional enterprise is estimated at $504 million with roughly 90 percent of that taxable. It is the considered opinion of the chamber's board that favorable action on S. 2468 and H.R. 9751 would be in the best interests of the Greater Pittsburgh area, in that the increase in authorizations for urban renewal and public housing |