towns, who like it, who have determined that they need it, and who want to undertake more of it.

The bill therefore provides for an increased urban renewal grant authorization of $1.4 billion to cover new reservations for the next 2 years. This is at a slightly higher rate than the $2 billion authorized for 3 years in 1961. In accordance with this administration's emphasis upon rehabilitation in urban renewal areas, the bill provides assistance to owners who are required to upgrade their properties. The most significant of these is restricted to elderly households which I have described. Another permits more liberal FHA-insured rehabilitation loans.

The bill would also amend the 1961 act to increase the nonresidential exception in that act from 30 to 35 percent. This is in recognition of the continued need of many communities to strengthen their economic base as a source of increased employment and tax revenues, which are necessary for the support of housing and other community improvement.

The bill proposes a number of amendments to improve the urban renewal and urban planning assistance programs. These are explained in detail in the statement I have submitted for the record. I would like to discuss the most important of these the benefits to be available for displaced persons.

First, the same obligations with respect to rehousing families displaced from urban renewal sites would also be made applicable to families displaced from public housing sites. Also, in both programs, these obligations would run to individuals as well as families. Although local authorities generally follow housing construction, it is a strange anomaly that under Federal law they are not entitled to benefits equal to those of urban renewal displaces. The bill would correct this.

Second, the bill would provide additional benefits for displaced families and for small, independent businesses. At present, these benefits pay for moving expenses incurred by families and small businesses. This does not, however, take into account the higher rents that these lower income families often have to pay for the decent housing to which they move. Nor does it provide for the loss of income and the costs incurred by a small business when it is compelled to leave its present location.

The bill, therefore, would authorize rent supplements for displaced low or moderate-income families and for elderly individuals relocated in private housing. These supplements would pay, for a 2year period, the excess of the amount over 20 percent of such displacee's income that is needed to enable him to get modest decent housing without excessive strain on other living needs.

For a small, independent businessman, the bill would authorize payment of $1,000 to tide him over the relocation period. If he is unable to get reestablished in a year's time, it would authorize an additional $1,500 as a severance payment.

I would like now to discuss the provisions of the bill for aiding planned development of our urban areas in advance of population growth. These measures are new in their application and their outlook. However, they make use of familiar and tested programs in the housing and community field-our urban planning grants, our FHA mortgage insurance program, and our public facility loans.

Under the pressures of housing shortages and heavy demand that followed the lean years of World War II, we had little choice but to build and expand as fast and as best we could. There was little time to anticipate or plan head. In many cases, the people got there before sound development patterns could be set.

That was not the best way to do it. But under the pressures of the time, perhaps it was unavoidable. Today, much of the rising tax burdens in our suburban and new areas result from the necessity of undoing and redoing many of the things we did 10 years ago. The need for new or larger sewer and water lines, new traffic arteries, new schools, business expansion, and shopping centers, and more housing for these mushrooming areas has involved disrupting much of what we built a decade ago. We have had to replace our water, sewer, and other utilities, and recast our land-use planning. We have had to double and triple roadways that bear an ever-mounting traffic stream. This is costly and disruptive. It is wasteful.

Today this is unnecessary, and can be avoided. We cannot afford to continue to build vast urban communities that will be obsolete and unmanageable within a decade.

What we have experienced in urban growth thus far is but prologue to the years ahead. The Census Bureau estimates that by 1970 our population will reach 208 million, a 9-percent increase over today. By 1980 it will be about 241 million. Most of this increase will be in urban areas, large and small.

This bill would provide a set of measures, designed to help prepare for this growth before it happens, and to be ready for it as it comes. There are specific aids for this purpose.

1. The urban planning grant program (sec. 701) would continue to be available for regional, metropolitan, and smalltown planning. It would provide assistance for the first basic step of planning for the growth of the urban area or community. Two-thirds of our metropolitan areas already have such planning underway. The bill would permit regional and metropolitan planning bodies to provide planning assistance directly to small towns in their areas.

2. FHA mortgage insurance would be authorized under a new title of the National Housing Act for insuring loans for the acquisition and site development of land in conformance with the area plans. Such insurance would be available for large subdivisions in expanding suburban communities, and also for complete new communities to be built farther out.

FHA insurance for inlying subdivisions would be authorized for loans up to 75 percent of the value of the developed land, but not in excess of 50 percent of land value before development and 90 percent of development cost. For larger outlying new communities, loans could be insured up to 75 percent of the value of the developed land, with 90 percent of development cost permitted for major water and sewerage facilities provided by the developer.

The specific plan for the new community would have to be approved by the Housing Administrator as to its soundness and the ability of the community to provide housing for families of all income levels. In the instance of new communities and large subdivisions, it would be required that site planning and public facilities systems be so designed as to provide economic and efficient utilization of land. This would facilitate greater open spaces, adequate public facilities, preser

vation of trees and scenic attributes, and frequently lower costs to the homeowner.

3. Another type of assistance would enable public bodies with jurisdiction in the area involved to provide the public facilities, particularly the water and sewer systems, for the area's development. It would enable them to install such facilities to care for expected future growth, rather than for short run needs that would soon render them inadequate. This assistance would be furnished under the present public facility loan program, now confined to small towns, which would be extended to serve outlying areas of any size that are experiencing or expect substanial population growth. In such cases, the principal and interest, on that portion of the loan that is needed for growth capacity could be deferred for up to 10 years.

4. In addition, loans would be made available under the bill for advance acquisition of land by public bodies for future public requirements, such as water and sewerage systems, roads, and schools to be provided when actual growth occurs. This would enable these local bodies to acquire the land before price inflation occurs, and spare private owners from uncertainty as to whether to develop land and from hardship where private structures are built on the land before it is taken for a public purpose. Local bodies could also deliberately support planned and rational development as it takes place. The bill would provide for loans up to 15 years maturity and permit deferment of principal and interest on these loans for land acquisition. Within the 15-year term, repayments would be made before or as the land is put to use.

These measures will help eliminate the costly clutter of blindfold growth and blunderbuss expansion. They will make it possible for our metropolitan areas, our growing urban communities, and our private developers to get there before the people do-and to meet their needs on an efficient, economical long-range basis.

One of the most serious problems long facing our local communities and urban bodies is the shortage of trained professionals and technicians. We are forced to cope with increasingly complex problems of traffic control, real property assessment, building code standards and enforcement, public finance, and the planning and administration of renewal and development programs. The limited amount of training being offered in these fields falls far short even of the present demand. The need will grow, and grow rapidly, as our urban population increases.

It is imperative, therefore, that we begin at once to develop the trained manpower that will be needed to meet this urban crisis. The bill would authorize a program of matching grants to the States to permit the training of professional, technical, and administrative personnel for our governmental bodies. It would authorize appropriations for this purpose of $5 million for fiscal 1965, $15 million each for 2 following fiscal years, and $25 million for each fiscal year thereafter.

These grants would assist and encourage the States, in cooperation with public and private universities and institutions, to develop and expand training in the urban field, and would support State and local research into the housing and urban community problems that will have to be solved. That completes my oral statement, Mr. Chairman.

(The statement and attachments follow:)

STATEMENT OF ROBERT C. WEAVER, HOUSING AND HOME FINANCE ADMINISTRATOR, ON PROVISIONS OF H.R. 9751, 88TH CONGRESS, HOUSING AND COMMUNITY DEVELOPMENT BILL OF 1964, AND H.R. 9769, 88TH CONGRESS, BILL RELATING TO SALE OF PARTICIPATIONS IN POOL OF FNMA AND VA MORTGAGES

H.R. 9751-HOUSING AND COMMUNITY DEVELOPMENT BILL OF 1964 TITLE I. NEW AIDS FOR DISPLACED FAMILIES AND BUSINESS, AND ELDERLY IN URBAN RENEWAL AREAS

Relocation payments to displaced persons and businesses

The bill would authorize additional relocation payments to certain individuals, families, and business concerns displaced from an urban renewal area. These payments are made by local public agencies which are reimbursed by the Housing Administrator from urban renewal grant funds.

At present, an individual or family displaced from an urban renewal area may be paid reasonable and necessary moving expenses and any actual direct losses of property, but in no event more than $200. Business concerns and nonprofit organizations displaced from an urban renewal area may be paid reasonable and necessary moving expenses and any actual direct losses of property (except goodwill or profit), but in no event more than $3,000, or the total certified actual moving expenses (which under Housing Agency regulations are permitted to be compensated up to $25,000).

The bill retains these existing relocation provisions and consolidates them with new provisions which authorize additional payments to certain displaced business concerns, individuals, and families. Increased relocation payments to small business concerns

To proprietors of displaced small business concerns (those with average annual net earnings before taxes of less than $10,000 per year), the bill would authorize the payment of $1,000 when the business concern is displaced from the urban renewal area. An additional $1,500 could be paid to the proprietor of such a business concern if he has not reestablished himself in some business within 1 year and if he has not received any relocation payment for moving expenses or any actual direct losses of property.

These payments would be available only to those small displaced business concerns which (1) were doing business in a location in the urban renewal area on the date the locality approved the urban renewal plan or on the date it approved early land acquisition, (2) were displaced on or after the date of introduction of this bill, and (3) are individual businesses independently owned as distinguished from separate units in a chainstore operation.

The bill authorizes the Administrator to establish appropriate rules and regulations to carry out these relocation payment provisions. A number of complex situations must be anticipated in these regulations to assure that no abuses arise in connection with these payments.

We must be very sure that the new relocation payments authorized are made only to bona fide business establishments. For example, we do not expect that these payments will be made to a woman who lived

in the urban renewal area and, from her home, sold Christmas cards to her neighbors.

The regulations will also spell out the conditions under which the additional $1,500 payment could be made to the proprietor of a small business concern who has not reestablished himself in some type of business within 1 year after his displacement. We intend to carefully avoid abuses of the program by proprietors who reestablish themselves under a different form of ownership, or in an establishment fictitiously owned by someone else.

The regulations will also make clear that net earnings before taxes, for the purposes of this program, include salaries paid to the proprietors, or owners, of the displaced business establishment (whatever its legal form) and their immediate families. This is necessary to make sure that these new relocation payments are made only to the small business establishments we intend to assist. It is expected that each applicant for these payments will be required to certify as to the controlling facts in his case.

These small business establishments are far less able than large concerns to adjust to a new environment and compete with larger or more modern enterprises. Even those small business concerns which are able to reopen suffer substantial losses which are not presently compensated. Often there is a period of time required for them to reestablish operations, and often the cost of doing business is substantially higher in the new location. For some time after their displacement, such small business concerns suffer a loss in volume of sales while their operating expenses are greater than they were in the location in the urban renewal area.

The initial $1,000 payment for each such small business concern would help compensate for the losses sustained because of its displacement. The additional $1,500 payment would go to the proprietor of the small business who still has not reestablished himself in some business 1 year after his displacement from the urban renewal area. This $1,500 is essentially a severance payment to compensate the proprietor for the loss of his source of business income as a result of the displacement of his business establishment.

Increased relocation payments to families and elderly individuals To each displaced low- or moderate-income family or elderly individual (62 or over), this bill would authorize monthly payments (for up to 24 months) of an amount which, when added to 20 percent of his income, would equal the average rent being charged in the community for a decent, safe, and sanitary dwelling of modest standards adequate in size to accommodate such displaced family or individual.

To qualify for these monthly payments, the displaced families and elderly individuals would have to have incomes well within the income limits established for eligibility to occupy rental housing financed under the special FHA below-market interest rate program of mortgage insurance for housing for moderate-income families (sec. 221 (d) (3)). Within the framework of this statutory maximum dollar amount, we would by regulation prescribe income limits that would be significantly below the statutory limit in most instances. These income limits would be designed to assure that no payments are made to any displaced individuals or families for whom there