New York for his presentation today and to assure him many Members, some not present, join with the gentleman in his efforts in this direction in the future when this matter is studied, and when this is brought to the floor of the House. I commend the gentleman for what he and his people have done for their own community, as we have in other communities, to solve local problems by local

means.

Mr. HORTON. I thank the gentleman.

Mr. HARSHA. Mr. Speaker, will the gentleman yield?

As a member of Subcommittee No. 4 of the House District Committee I wish to commend the gentleman from New York for his statement. I am familiar with the work of the subcommittee and can assure the Members of this body that a careful investigation has been made and a fair analysis of the results has been presented in the able summary of the chairman which has just been read.

During the course of the hearings on Columbia Plaza we had occasion to hear some testimony from my State of Ohio which seems to confirm the impression that conditions found in the District are national as well as local. This confirms the recommendation of the gentleman from New York that an appropriate committee of the Congress should make a national investigation or that a special or select committee should be appointed for that purpose.

The testimony to which I have referred concerning Ohio had to do with the Erieview project in Cleveland. That project has been justified largely on the grounds of the broad legislative delegation of discretion which exists in the Housing Act of 1949 as amended.

What happened in Cleveland was the same thing demonstrated to have happened in the Columbia Plaza project. Those in charge of the project chose to go beyond the mere delegation of discretion.

In the Erieview project in Cleveland, instead of relying on the broad delegation of discretionary authority made by the Housing Act, city officials chose to make specific inspections of buildings. They designated as substandard buildings which were almost new and against which no violations existed except minor ones which could have been corrected in a day and with small expense. There is no legal authorization Federal, State, or local for any building standards which would justify such a substandard rating.

Cleveland property owners attempted to present this irregularity to the courts as a defense against the taking of their property for urban renewal purposes. The courts refused to entertain the evidence on the ground that the delegation of discretion in the Housing Act was so broad that the courts would not question any agreement between the city of Cleveland and the Housing and Home Finance Agency based on the Housing Act even if part of the evidence on which administration of the act was based could be shown to have been illegally obtained. As indicated in the summary which my distinguished colleague has just read into the record, similar abuses of the Housing Act seem to have been involved in the Columbia Plaza project. They impose upon us an obligation to investigate this matter further and to reexamine the entire content of the urban renewal legislation. Congress must make certain that the abuses which have occurred are corrected and that the law be rewritten to facilitate rather than interfere with the orderly process of renewal which must take place in all our cities. I thank the gentleman.

Mr. WIDNALL. Mr. Speaker, in my efforts on behalf of the urban renewal program, I have been operating under the assumption that officials responsible for this program on both national and local levels are as eager as anyone to profit from mistakes and improve the program. One criticism that has been prevalent for some time has been directed toward the unwillingness of these officials to follow their own rules and regulations, and I had expected that this criticism would have been taken to heart. The cavalier attitude of urban renewal and planning officials in the District of Columbia as disclosed by the statement of the chairman of the House District Subcommittee investigating the Columbia Plaza urban renewal project has disabused me of any such forlorn hope.

The facts of this unfortunate situation have already been detailed. In general, the record discloses the discouragement of private rehabilitation both before and after the designation of an area as ripe for urban renewal, and the subsequent additional costs to the American taxpayer. It raises serious questions with respect to the eligibility of the project itself. The actions of urban renewal officials in choosing and collaborating with a redeveloper to the exclu

sion of all others, the secretive nature of the rules and proceedings involved, and the preferential treatment shown to the "chosen instrument" developer by these officials raise even more serious questions.

Any one of these developments, in my opinion, would be sufficient for an indepth study by the Urban Renewal Administration as well as Congress. The fact that all could occur in one project in one short space of time is simply incredible. If this could take place, in effect, under the very nose of the Federal Urban Renewal Administration here in Washington, I cannot have any great degree of confidence in that Administration's ability to supervise its numerous projects throughout the Nation.

The attitude of the Federal Urban Renewal Administration, as well as the District of Columbia officials, can best be ascertained by their reaction to the use of the secretive 50-percent rule in the disposition of the property and the selection of the redeveloper. In this instance, a decision was made to allow whoever owned 50 percent or more of the land area priority to become the redeveloper. This rule was never disclosed to the original owners of the majority of the property until after the favored redeveloper had succeeded in buying the land from them.

Had either Congress, or the courts, or law enforcement officails acted in a similar manner toward any individual, there would be little doubt in anyone's mind that this action constituted the deprivation of an individual right without due process of law. If this action on the part of local redevelopment officials goes uncorrected, the urban renewal program will suffer irreparable damage in the realm of public support, which is vitally necessary for the success of the program.

The subcommittee headed by our distinguished and able colleague, the gentleman from Texas, Mr. Dowdy, has done a valuable service in its investigation. I will urge that the Special Housing Subcommittee, reviewing urban renewal in general, take into consideration the problems raised by the Columbia Plaza investigation, in order to seek legislative and administrative solutions on a national level.

Tuesday, October 29, 1963

Mr. KYL. Mr. Speaker, in a recent speech before the Institute of Planning and Zoning, Urban Renewal Commissioner William L. Slayton noted that zoning controls are "decidely inappropriate to a large subdivision and a positive deterrent to good development."

Mr. Slayton also noted that the controls needed would give free rein to the talents of the planners.

As a matter of fact, Mr. Speaker, the emerging record indicates that free rein has been taken by those who arrange the financial affairs of the urban renewal programs. And they display considerable talent.

There is a law which says that in projects of this nature, all stock transfers must first receive approval of RLA. Yet major stockholders of the Harbour Square project apparently transferred 10 percent of their stocks to each of two employees in recognition of their faithful service to the firm. These gifts amount to half the holdings of the company in the project.

Now 10 percent might not seem like an unreasonable gift for faithful service. However, the gift should reach the total of $128,100 in 2 years for each recipient. This is a bit more than the usual gold-watch treatment afforded employees.

There are 427 housing units in Harbour Square-70 percent of them sold at the time of ground breaking at prices ranging from $20,000 to $70,000.

In the Columbia Plaza project, the faithful secretary winds up with another gift, 71⁄2 percent of the stock, the same amount as is held by the company partners and a primary promoter of the project who also happens to be one of the employees of said firm. This is a $20 million project. In this instance the generosity of the firm for the secretary is overwhelming. Hurried computation indicates that this gift will probably total something in the neighborhood of a million and a half dollars, which is a nice neighborhood, even for redeveloped Columbia Plaza.

But this is not the end of the story. The"boss" says he still has irrevocable power of attorney over the gift and that he can sell the stock at any time. Since all the stock is now tied up as a guarantee for the man who supplied the real money, the secretary who was the recipient of the most gracious gift could be in somewhat of a quandry, which is beside the point.

Not beside the point, however, is the testimony that the stockholders have been lost. This does not necessarily indicate anything sinister, because in the Columbia Plaza area many things have been lost, including good sense. And anyhow, we have finally received the admission that the whole thing was a mistake, because the area could not have qualified for urban renewal in the first place.

This is just another illustration of the irrefutable fact that the Congress had better redesign the entire urban renewal laws on the books or face the consequences of the myraid situations developing all over the country, which would be ridiculous if they were not so tragic.

APPENDIX B

CONCEPT NO. 1

Balanced community development.-Any comprehensive program for community development should involve activities in each of the following categories: Advantages of location and natural resources, industrial development, commercial development, comprehensive planning, housing, urban renewal, and the modernization of local government. If combined in the right proportions, these activities will insure the balanced physical development of any community.

CONCEPT NO. 2

Analysis is more basic than planning.-The growth of modern industry has resulted more from research and development than from planning. No comparable research effort has been made in community development although the need for it is evident. Research and analysis must be undertaken to help establish a viable ecological relationship between man and his environment.

CONCEPT NO. 3

Expanding comprehensive planning.-Comprehensive planning is generally defined as a public process concerning primarily land-use plans, transportation plans, public facilities, and public improvement programs. While each of these aspects is important, their sum is only part of the total planning requirement. Comprehensive planning must establish a working relationship with all that is involved in balanced community development and in fundamental research and analysis.

CONCEPT NO. 4

Bridging the gap between planning and implementation.—Many excellent planning studies, when completed, only gather dust on library shelves. This manifests, not a weakness in the planners, but the inadequacy of implementation procedures. A better division of labor must be worked out to coordinate the recommendations in planning studies with communitywide decisions and action.

CONCEPT NO. 5

Citizen participation.-Citizen participation, essential in a true democracy, must be transformed from a passive acceptance into a positive control over government. The possibilities of positive control must be explored, developed, and demonstrated until they become an accepted part of community development.

CONCEPT NO. 6

Motivation for leadership.—A close relationship exists between the quality of leadership and the results achieved in community development. In almost every community, the quality of leadership can be improved. Usually this improvement is more a matter of motivation than of specific skills. Better motivation must be encouraged as an essential part of sound community development. These six concepts have helped to make possible a step-by-step procedure which can be used by any community on a self-help basis to identify community development problems, to clarify alternate courses of action, to establish priorities, and to build the widespread public understanding and support which are essential to comprehensive and effective community development.