Mr. BROWN. Do you care to comment on this section?

Mr. COLE. I think not. We will just answer questions, Mr. Chair

man.

Mr. BROWN. I will introduce the 5-minute rule in the first goround.

Mr. Wolcott.

Mr. WOLCOTT. No questions.

Mr. BROWN. Mr. Multer?

Mr. MULTER. Yes, Mr. Chairman.

Actually, I know the answer to the question that I am about to put to you, Mr. Cole, but I think it needs stating on the record.

We have a slum clearance project in New York that is referred to as the Coliseum, and we had a very bad accident there recently which everybody regrets.

Some comment has been made that your agency has made no investigation with reference to that project. Will you state what the facts are with reference to that?

Mr. COLE. Yes, Mr. Multer, of course. It was a distressing occurrence. I think some information or some statements were made about the situation, not realizing the background, the legal authority of the agency with respect to the program.

The title I program, slum clearance, and urban redevelopment, authorizes the Government to grant money after having made certain preliminary loans for planning, to grant money to a community to clear the slums, and then permit the community to redevelop.

Of course, in the planning and in the commitments made and contracts entered into, the method of redevelopment is agreed in broad general terms. The agency understands and knows the type of redevelopment which will be undertaken, either by public or private enterprise, but the agency itself, the urban renewal agency, Housing and Home Finance Agency, does not in any way supervise, inspect,. or control the construction in terms of knowing how it is built, the type of material-whether or not it is in place properly-that is not either the responsibility nor the authority of the Federal Government. Mr. Steiner may want to comment further than I have on the matter.

Mr. STEINER. I think that is substantially the story, Mr. Cole. In this particular case, the redeveloper is the Triborough Bridge Authority. As you know, sir, we did approve the contract between New York City and the Triborough Bridge Authority. In considering that contract, we were particularly concerned with the value, the reuse value to be received for the land, and that the other statutory requirements were met in that contract, but that contract would not operate to give us the basis for inspecting the actual construction under the Triborough Bridge Authority.

Mr. MULTER. And if there was any negligence or malfeasance or wrongdoing in any way whatsoever that is the problem for local authorities and not of your agency?

Mr. STEINER. Insofar as the construction of the Coliseum, yes, sir.. Mr. MULTER. Once the contract is completed, in accordance with the contract you are called upon to make your grant, after the project is completed?

Mr. STEINER. Yes, sir; although a grant has been made. A progress payment has been made on the grant-not the total grant in this case..

Mr. MULTER. There is one other subject, Mr. Cole, that you might touch upon. It has been with us ever since we undertook a slumclearance program, and that is, what to do with the residents of these projects that are being cleared. The problem is still with us. Of course, if we get enough new houses built the problem will disappear, but I wonder if you can't make some suggestion to us as to writing something into the law to improve that situation. It doesn't help any to tear down a slum or a blighted area and replace it with a middle cost or high cost dwelling project, and not do something for those residents of the slums who can't afford to pay more than they are paying in the slums. Unless we do that we will simply be driving them into another area where we will have a reproduction of what we tried to clear in the first instance.

Have you any suggestion along that line?

Mr. COLE. Mr. Multer, you pointed out what has seemed to me since I have been with the agency one of the most difficult, complex, and frustrating problems. I have said many times that we cannot sweep these people under the rug, and won't. I have said many times that unless the city shows us a feasible relocation program we cannot approve slum clearance and redevelopment.

Having said that, then I find myself faced with sometimes an almost insurmountable problem. We might as well face it very frankly. It is tough and very difficult.

I haven't solved it, the agency hasn't solved it, Congress hasn't solved it. I don't think we have solved it, quite frankly. I have been in many, many cities throughout the United States and have seen many areas which are rock bottom slums which must be removed, which will be removed, occupied by people of very low income, exceedingly low income, having no place to go.

Now, there are some things within the present law which we have, and I wish I had sufficient judgment or experience or knowledge, or whatever it may be, to advise the Congress that I knew something we could present to you that would solve it. I don't. There are some things which we have, though, which give me a great deal of encouragement, but it will take a lot of work and effort, thought and good will, and anything else you might want to add to it to accomplish it. Now, let us begin: We think that really there is a possibility in the rehabilitation of good, sound structures in the community. Now, when you point out one community, as your own, you have a very difficult problem there. Many of those structures may be sound but to rehabilitate them leaves you with unsatisfactory housing. I am sure of that, and yet many of them, even on Manhattan island, can be rehabilitated. Throughout the Nation there are many cities that have sound homes, soundly constructed homes, that can be rehabilitated, remodeled, and repaired, so that the people removed from the slum areas can find decent housing; this, through some of the Government operations, through the title I of FHA, through the open-end mortgage, through the section 220 and section 221, by use of the FHA expanded insurance authorization, and Fannie May take out in the event it becomes

necessary.

The building of low-cost, low-income housing-I said in the beginning I am not satisfied with. When we introduced it last time we said it was experimental. It is still in the experimental stage. It hasn't

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proven. I think it will and can, and I am optimistic about it. I am an optimistic kind of soul or I wouldn't be in this business, I think, but these sort of things are about what we have to offer.

We have certain new tools which have not yet been used either by private enterprise or the public or the community. We are going through the Nation advising the towns. We are sending teams into the towns from the agency to tell them what the Government has, and how we can help them, help them acquire land and help them acquire financing, and help them stir up community spirit to develop it.

This is not a satisfactory answer, Mr. Multer. We are aware of it, but we just keep doing the best we can to expand the construction of new housing, expand redevelopment of old housing, to add to what we can, public housing, where it is needed, and with these tools we do the best we can.

That is a long speech.

Mr. MCDONOUGH. Would you yield?

Mr. MULTER. Yes. I think my 5 minutes are up.

Mr. MCDONOUGH. In connection with that, do you think it would be advisable, Mr. Cole, in connection with this matter you are discussing with Mr. Multer, to provide more liberal terms for the purchase of a home for those people who we are forcing out of their homes by urban redevelopment; that is, if they qualify as a displaced home occupant in an area, that we should provide something in this bill to give them more liberal terms than we would an ordinary buyer? I would rather encourage those people to buy a home of their own in some location in that city than to seek an opportunity to get into public housing.

Mr. COLE. Mr. McDonough, we do have very liberal terms under section 221 and I think it has a possibility of working. The program hasn't yet gotten into operation.

Mr. MCDONOUGH. What terms do you have under 221?

Mr. COLE. Ninety-five percent on an existing house.

Mr. MCDONOUGH. Why not give them a no payment down?

Mr. COLE. I made that recommendation last year and Congress didn't agree with me on it. I thought it was a good idea, but Congress didn't agree with me on it.

Mr. MCDONOUGH. That is all. Thank you. I just asked Mr. Multer to yield.

Mr. MULTER. I was through with my 5 minutes.

Mr. MCDONOUGH. You have had some experience up in your area. What do you think of no downpayment for people who are displaced? Mr. MULTER. I don't think that is the solution to it. I am opposed to no downpayment in the purchase of anything, whether it be an automobile or a house, and I think the experience of most of the lending institutions throughout the country is that it is a bad thing to do.

A family who can't raise its initial downpayment, at least a small one, is going to fall down on the loan and you are going to get the building back and get it back in awfully bad shape.

Mr. MCDONOUGH. You would rather put them in public housing? Mr. MULTER. No. That is not the alternative. A person who cannot afford to pay more than $10 a month per room, cannot afford to buy a house. You can't build anything that that person can buy

with $40 a month. That sum is insufficient to pay the amortization on the mortgage, interest on the mortgage, taxes, and insurance-never mind any of the utilities.

Mr. MCDONOUGH. Mr. Cole, in your experience in urban redevelopment, where you displace people, what percentage of the people that you displace, that had to be provided with homes immediately, and what percentage, because of the urban redevelopment, went out and bought a home of their own?

They may be paying $10 a room, but they may be able to pay more than that. They may have money in the bank and want to buy a

house.

Mr. COLE. Mr. McDonough, the program is so new that we don't have in my judgment sufficient statistics based upon a broad enough foundation to give you any satisfactory answer. However, we will place in the record a statement, based upon such experience as we have had.

(The following tabulation was submitted for the record by Mr. Cole :)

Families to be displaced from areas approved for project execution as of

Excludes one predominantly open area (79th and Western, Chicago, Ill.) for which no family occupancy is reported.

2 Total includes 150 families reported for the Fort Street area, Port Huron, Mich., but omitted from subitems. Eligibility was not determined for these families, because there is no low-rent public housing program in Port Huron.

Rehousing of displaced families, areas where relocation has commenced as of

Mar. 31, 1955

It varies in different cities. I must say that there are people living in slums and rockbottom slums. There are people living in slums who can afford to buy a reasonable

Mr. MCDONOUGH. Can?

Mr. COLE. Can afford to buy or rent houses on an economic basis. Now what that proportion is, sufficiently to give you an accurate picture, I don't know yet, but we will give you such statistics as we do have upon it. Remember, that although the law was passed in 1950, I believe in 1949, the program hasn't progressed far enough in enough communities to have a broad picture of it. By and large, of course, the people living in slums are poor. We know that. Percentagewise-do you have any figures now, Mr. Steiner?

Mr. STEINER. Well, as of the end of the last calendar year, our statistics indicate-just one figure to give an example-statistics indicated that about 52.8 percent of the families resident on the redevelopment sites were in the economic range to be eligible for public housing. Mr. MCDONOUGH. 52 percent?

Mr. STEINER. 52.8, yes, sir. That doesn't mean all those families would end up in public housing, because there may be other arrangements made for some of them, or some of them may not wish to go, but quite a high percentage of those families would end up in public housing.

Mr. MCDONOUGH. In which urban redevelopment program, in what city in the United States has advanced the furthest up to now?

Mr. STEINER. Well, I guess probably in Chicago, the large project there, Lake Meadows, which is quite advanced. There is one in Baltimore, where all the residential portion is contemplated and

Mr. MCDONOUGH. In other words, you have moved the people out of the area?

Mr. STEINER. Yes. A large number have actually moved. This is a slow, progressive operation. I think I ought to say to you, sir, that we try to be very careful not to let a project get started-to get really going unless the locality can demonstrate to us in the planning phase of the project that it has a very well worked-out plan for handling the relation problems of the people resident on the site. Now, that doesn't mean that we eliminate all the headaches, but before we go into a loan and grant contract, we do require a very care