Mr. ASHLEY. Has thought been given to this?

Secretary WEAVER. Yes. This has been a possibility. We have made no decision on it.

Mr. ASHLEY. Is it your thought that perhaps a decision will be reached within the next few weeks, or is it something to which you feel that experience is necessary; a year or so of working on the program?

Secretary WEAVER. The funding of this phase of it will not be until next fiscal year anyhow, and by that time we will have the first answers to those problems.

Mr. ASHLEY. The question is directed to you, Doctor, with respect to college housing. Last year, the Congress changed its program significantly, in that it now makes possible $300 million a year for 4 years directly for this purpose. I wonder if it would be possible to furnish for the record some indication of the extent to which this program has tended to eliminate from the financing of college housing the mortgage underwriting segment of our financial community?

Secretary WEAVER. This would not come under the mortgage underwriting section, I think it would come under the bond market, it is usually done by bond rather than mortgages.

We could give you a statistical review of what is happening in this, and from that you would have to make the deductions.

Mr. ASHLEY. It would not be difficult to do, because we know that the private market engaged in this to get a certain level over a certain number of years. And my interest is the extent to which this kind of private participation has been short-circuited and eliminated by virtue of the program that it adopted last year.

Secretary WEAVER. Of the 3-percent rate. We could give you the statistics on this.

Mr. ASHLEY. That would be very helpful. Thank you. (The information referred to follows:)

TRENDS IN COLLEGE HOUSING BOND FINANCING

Comparison of college housing bond financing during the past 5 months with the financing in corresponding periods during the preceding 2 years indicates that there has not been any diminution in the volume of private financing.

Heretofore, private investors have evidenced interest only in the college housing bonds issued by public institutions where the interest income is tax exempt. As shown in the following table, during the period October 1965 to February 1966, a total of $75.6 million of college housing bonds issued by public institutions were purchased by private investors. In contrast, during the corresponding period in 1964-65, private purchases of such tax-exempt bonds totaled $60.2 million and in 1963-64 private purchases totaled $55.2 million. Thus, private purchases during the 5-month 1965-66 period rose by 37 percent over the private purchases during the comparable 1963-64 period. On the other hand, for the same calendar period, purchases by the Department of Housing and Urban Development rose from $71.6 million in 1963-64 to $77 million in 1965-66, an increase of 8 percent. Significantly, the proportion of college housing bonds issued by public institutions accounted for by private purchases rose from 43.5 percent in 1963-64 to 49.5 percent in 1965–66.

In the case of private institutions, where the interest income is not tax ex empt, there has been negligible private investor interest in such bonds so that virtually all of the borrowing for college housing purposes by private institu tions is made from the Department of Housing and Urban Development. As will be noted, the volume of bonds issued by private institutions to HUD during the October to February period changed from $58.4 million in 1963-64 to $50.8 million in 1964-65 and to $65.7 million in 1965–66.

In evaluating these figures, it should be recognized that many of these bond purchases reflect basic determinations (as to whether or not to apply for Federal loan assistance) that were made some time prior to the actual bond sale. But so far there is no evidence of any significant diminution of private purchases of college housing bonds. In fact, notices of bond sales during March 1966 indicate that there will be no abatement of private purchases during the current month.

College housing bond purchases by private investors and Department of Housing and Urban Development during October-February, fiscal year 1964-66

Preliminary figures; full compilations of bond sales during January-February, 1966, as presented by the bond buyer, coupled with HUD reports, will probably result in figures higher than those shown for

these 2 months.

Mr. ASHLEY. Just a final question. I want to make certain with respect to a question and a concern that Mr. Reuss voiced. The $2.3 billion figure, if I understand you correctly, is predicated upon a certain number of participants in the act. Is this 60-is there a number that you can give us?

Secretary WEAVER. I can give you a series of numbers which I think will give the scope of what we are thinking about. These are again estimates rather than firm figures. We assume about 60, as I said, to 70 cities. We expect that the number of families in the demonstration areas will be over 600,000. We expect that the number of people in the demonstration areas will be over 2 million. We expect that there will be about 250,000 dwelling units rehabiltated, and that an additional 40,000 units of low- and moderate-income housing will be built under this program. This is the housing component of it.

Mr. ASHLEY. Now, the 60 to 70 cities, those that would be fortunate nough to secure approval, be selected to serve as examples and illustrations, as you put it, of what is meant to be useful to other cities, would not this bring them into an extremely advantageous position over the duration of the 6-year program, and would not actually a question arise as to other cities that would not find them also in this

advantageous position? I understand that there are some 250-plus general neighborhood renewal programs that are-have been approved, general neighborhood renewal programs, that there have been over a hundred community renewal plans that have been undertaken by cities obviously interested in upgrading their environment, or they would not have bothered. I find it difficult, although I must say I am sympathetic with the problem, but I find it difficult to see how this would not present something in the nature of a grab bag, inasmuch as there are 60 or more cities that would be interested, unless there would be increased numbers approved in immediately subsequent years; that is, the third year of the program. And the second year is the first year on which there would be programs to go forward, and if there be increased numbers and increased appropriations to support it in the following years, then there is no question, there is no problem. If this is not the way of it, I think that as a matter of fact, we ought to know about it.

Secretary WEAVER. I don't think I can answer the latter part of your question categorically, because I think it depends upon a lot of things. Many of them related to the budgetary problems of the Nation, which have to be considered and which are beyond the impact of any one particular program. But as to your first point, I would say that those which are now and will be by end of the period when applications come in most willing and able to deal with their major urban problems will get this supplemental aid. This will not take anything away from what any other city would get if this program didn't exist. So that the other cities are in the same position as they would have been if there hadn't been this program.

Mr. ASHLEY. Let me ask this kind of a question. What you are really saying is, "First come, first served, fellow, and you had better hurry."

Secretary WEAVER. No, we are not.

Mr. ASHLEY. You have said that. And this is what becomes clear

to me. And it might be quite easy for Toledo, Ohio, to qualify itself for it in an imaginative and vigorous way. But what about the city of New York, for example, where you have a problem which is so enormously difficult to tackle in any respect? I could see where it might be take them better than a year to put together the kind of plan that would be approved under the criterion that pertained to the act. I would consider it contrary to the purposes that I think should be represented in the act if upon ultimate review and approval of such a plan relating to such a critical area it would be found that the 60 spaces have been occupied.

Secretary WEAVER. I think this is inevitable in any type of a demonstration approach. I think you have a choice as to whether or not you are going to have a reasonable period of time when the cities can come in and can meet these requirements-some of them meet them better than others and have a demonstration program which will come within a budgetary figure that seems to be reasonable, or wait until you get a situation where you can budget a total program. This may not be feasible at this time.

Mr. ASHLEY. Doctor, as I suggested, I think I tried to. It seems to me that there might be an alternative. And I refer to one in which priorities could be established based upon these that are

perfectly

measurable, we have the sophistication and the ability to make measurements as far as density is concerned, and delinquency and crime are concerned, and public health and education. And if we don't do this and don't do it in a sophisticated fashion, then we are dismissing as an alternative the establishment of a priority that is perfectly

constant.

Secretary WEAVER. We have no objection to that. We are in complete agreement with that. But there is the other side of the coin, and that is the ability of the cities to make a success of this within a reasonable period of time. If you are going to give some demonstrations and some illustrations, you not only have to have the need, but you have to save the ability to carry through with the need. Mr. BARRETT. The time of the gentleman has expired.

Mr. Fino?

Mr. FINO. Mr. Secretary, is there any ceiling or limitation on the number of programs within a city? I am thinking of New York City particularly, where you have Harlem and Bedford-Stuyvesant. Can you have two programs within that city at one time?

Secretary WEAVER. Definitely. The only limitation there would be is that each of them would have to be large enough to make a significant impact on the area that we are dealing with. You would not take a block here or a block over there. But if you took a section which would have significance, you could cover several areas. And it would seem to me, knowing New York City as I do, and as you do, that this would probably be the type of approach a city like New York would normally take.

Mr. FINO. Getting back to some of the discussions we have had here regarding the coordinator, besides creating new jobs, why couldn't you have the job of coordinating to the existing regional directors of the FHA? I think you have about 76 around the country. Why couldn't they do the job?

mendous

Secretary WEAVER. I think for two reasons. In the first place, I don't think proximity necessarily means availability or ability. The present directors of FHA are pretty busy people. They have trepressures upon them. And they have a job of handling mortgage insurance which is quite different from the job of dealing with coordination of Federal, local, and State programs. They are, in many instances, inexperienced in this particular type of activity. Some of them may be temperamentally not suited for this. And others may not be interested in this. And finally, I think they are fully employed in their present job. The net result of using them for this purpose would be to dilute their efficacy in their present job and to find them not too efficient in the new job.

Mr. FINO. We have experienced a little difficulty, and in some instances great difficulties, in our private programs throughout this country. What is to prevent your Department through your commissar or coordinator from getting involved in local politics in the same manner as we had the means in the poverty program?

Secretary WEAVER. The first thing is to prevent him from being a commissar-which he will not be.

The second thing I think is the type of program which we have proposed here. And this is why we talk about a demonstration program. It is so that we can have flexibility, so that we do not have to

have the program administered in a fixed fashion. This is one of the reasons we want to do the demonstrations. So that we can deal with this problem, which in my opinion is a problem that has very different manifestations from one city to another. It has different manifestations in a large city from a small city or a town, different manifestations in one geographic area than another. This, I think, is going to be the main reason why we are going to minimize-we are going to have problems-this matter of citizen participation. It is fraught with problems. But I think, if you are going to succeed in doing what we hope to do, which is not only to revive and revitalize these areas physically, but also help the people psychologically and socially and humanly, you have to do this, and you have to learn to do it, and you learn to do it by having many patterns and finding out which patterns are the best patterns.

Mr. FINO. H.R. 12341 states among its purposes the provisions of educational and social services. Does this mean a coordination of the work that the poverty corps and HEW are doing?

Secretary WEAVER. Very definitely. It is impossible to conceive of this being done without such coordination.

Mr. FINO. Is there not some danger of duplication of services? Secretary WEAVER. This is exactly what the coordination prevents, among other things. It gets us together and prevents us from duplicating each other.

Mr. FINO. Mr. Secretary, in H.R. 12946, you are speaking of 60 to 70 percent living in metropolitan areas. Now, obviously, that includes the cities of over 1 million people. I would like to know, in dealing with the metropolitan areas that make up the 60 and 70 percent of our population, how far down are you going in the size of the cities?

Secretary WEAVER. It depends upon the makeup of the metropolitan area and the nature of the metropolitan area. We are using as the criteria for a metropolitan area the census definition, which is pretty well established. One reason that we make modifications in this is that we only get the census every 10 years, and sometimes these areas change between. But the definition of the metropolitan area is primarily and basically the definition of standard metropolitan areas as set forth in the census.

Mr. FINO. Well, under section 105 of H.R. 12946 where you define a metropolitan area, a standard metropolitan statistical area as established by the Bureau of the Census, you make that subject, however, to such modifiaction and intentions as the Secretary may determine to be appropriate. Does this not reduce a metropolitan area to whatever you, the Secretary say it is?

Secretary WEAVER. No. As I said earlier, the purpose of this is to recognize the fact that many of these areas are fast growing, and that between the 10 years when the census is announced you may have a very significant area which would be added to the metropolitan area that existed at the time of the census. We are now in the year 1966. It will probably be 1967 when we get to administer this. Some of the metropolitan areas as defined in 1960 will no longer include some very basic elements that will have come in during that 7-year period. The criteria which we will use to make any additions will generally be the same criteria that the Census Bureau originally used in designating the areas taking into account current situations and the needs of planning for future metropolitan development.