DEMONSTRATION CITIES AND URBAN DEVELOPMENT THURSDAY, MARCH 3, 1966 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HOUSING OF THE Washington, D.C. The subcommittee met, pursuant to recess, at 10 a.m., in room 2128, Rayburn House Office Building, Hon. William A. Barrett (chairman of the subcommittee) presiding. Present: Representatives Barrett, Mrs. Sullivan, Ashley, Moorhead, Stephens, St Germain, Gonzalez, Reuss, Widnall, and Fino. Also present: Representatives Gettys and Mize of the full com mittee. Mr. BARRETT. The committee will come to order. This morning, we have as our first witness Mr. Boris Shishkin, representing the AFL-CIO. STATEMENT OF BORIS SHISHKIN, SECRETARY, HOUSING COMMITTEE, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS Mr. SHISHKIN. Mr. President, I appreciate the opportunity to be here before your committee and to testify on these bills which are before you now, which deal with what I call America's urban revival. We have been talking about renewal and redevelopment, but I think that what is involved here in response to President Johnson's proposals and other bills that the chairman of this committee has presented, taken together, represents the broad revival of our urban centers, both large and small. And I want to emphasize this today, because I think it goes all the way across the board. Mr. BARRETT. Mr. Shishkin, the committee is glad to have you here this morning because your statement is always edifying and informafive. And if you desire to complete your statement before we ask you any questions, you may do so. And at the end of your statement, use our regular procedure under the 5-minute rule, and each of the members will have an opportunity to ask you any questions. You may proceed. We will Mr. SHISHKIN. I thank you very much. I have a statement here. I don't want to take the time of the com- Mr. BARRETT. That may be done, without objection, it is so ordered. presentation of mine. Let me say at the outset that the enactment last August of the Housing and Urban Development Act of 1965 was a historic step toward translating into positive action the Nation's concern with the plight of our cities and with the plight of the people forced to live in city slums. But this one step, important though it was, was not enough to enable us to come to grips with the enormous, urgent, and deep-seated problems confronting our Nation's cities and towns. Much more remains to be done, and labor welcomes further initiative reflected in the new legislative proposals before you, to carry forward this vital task. I have some facts here to emphasize the point that our cities are really bursting at the seams, but the population is growing by leaps and bounds, and the impact of this population growth concentrated in the urban centers must be taken into account and provided for if any sound planning for future growth is to take place. And I would like to stress especially that this problem is immediate and urgent, and the immediacy and urgency of this problem is underscored by the developments that are upon us now. Modern America must assure the provision of modern living conditions for its people. The need is for better cities and towns, better neighborhoods, and above all, for more and better housing. Housing construction has been out of step with the rest of the U.S. economy. The AFL-CIO has estimated that, in the face of the present backlog of past deficiencies and increasing current needs for adequate housing of a growing population, the volume of residential construction should be maintained at the minimum of 22 million dwelling units a year over 10 years. Yet, in the first 6 years of the present decade, the total of private and public housing starts (including farm) has been far below this minimum. In 1965, these housing starts totaled only 1,542,400 units, and in January 1966, the seasonally adjusted annual rate of these starts was still at about that level. The accompanying table I shows in perspective our performance as shown by housing starts since 1960. This performance has been deficient. It has been far from dynamic. For 2 years in a row, residential building has failed to keep pace with our Nation's economic progress. nder Added to the previous shortfalls in the volume of new housing built within the reach of moderate- and low-income families, this deficiency has resulted in a far-reaching imbalance in America's economic development. Consider this performance against these basic facts of urban life confronting us today: Our population is growing by about 211⁄2 million or more per year. And each year, hundreds of thousands of people move off the farms and out of the rural areas, seeking homes and jobs in the cities. From a largely rural country of fewer than 36 million people less than 100 years ago, America is now a nation of 1942 million. In the past 20 years since the end of World War II, the population grew by 55 million. Approximately 70 percent of all Americans now live in 212 metropolitan areas that occupy less than 10 percent of the surface of the country. By 1985, only 20 years from now, the population is expected to reach 250 million, and about 80 percent will live in metropolitan areas. The rapid growth of our increasingly urban population has been developing great pressures on available facilities. The cities have exploded into unplanned metropolitan areas with water shortages, air and water pollution, and inadequate mass transit, as well as shortages of schools, health-care facilities, recreational areas, and cultural facilities. The central cities have increasingly become slum ghettos and decaying areas with concentrated populations of the poor, the elderly, and minority groups. At the same time, the spread of sprawling suburbs and highways is gobbling up millions of acres, with little, if any, planning for metropolitan areawide needs. Close to 15 million dwelling units most of them in urban areas— are still substandard. With an annual residential construction rate of only 11⁄2 million units a year-including the annual construction of merely some 30,000 low-cost public housing units-it is clear that the Nation's housing needs are not being met. Moreover, the continuing rapid growth of our urban population in the next 20 years will require millions of new housing units, supplemented by improved and expanded community facilities and public services. The immediacy and the urgency of this problem is underscored by the developments that are right upon us. In the fiscal year 1967, starting next July 1, according to a census estimate, basic population factors should increase the rate of household formation by 180,000. This increase alone calls for a corresponding increase in housing starts. A much greater step-up in starts is necessary not only to redress the accumulated deficits of previous years, but also to make possible the rehousing of families living in slums and substandard homes and those doubled up in overcrowded tenements. This relates to the fact that we have had a lag in housing construction, and this has persisted during the past 2 years. Even this last January the 1,700,000 rate is far below the minimum rate of 22 million housing units a year that we should be building right now. That is the unit we should aimat. And we have a deficit of housing at the moment. I would like now to turn to the major legislation before you, the It is against this background of hard, incontrovertible, facts that I am here to state that the AFL-CIO gives its stout support to the Demonstration Cities Act of 1966, proposed by President Johnson in his special message to Congress on January 26, and embodied in the two identical bills introduced on that same day, H.R. 12341, by the distinguished chairman of the Banking and Currency Committee, Mr. Patman, and H.R. 12342, by the distinguished chairman of its Subcommittee on Housing, Mr. Barrett. We regard this legislative proposal as an important and auspicious step in the right direction. At the same time, we believe that the specific recommendations proposed to carry out this program are unduly modest in magnitude. It is our view that their scope should be enlarged to make possible a truly effective onslaught on urban blight in cities and towns large and smaĬl. This program is of strategic importance not only because it will help eradicate and help cure the festering sore spots in our cities and towns, not only because it would generate activity which would help redress a serious imbalance in the Nation's economic growth, but also, and most important of all, because it would represent a social investment assuring a large return to the whole community by rebuilding people's lives and regenerating their capacity to contribute to the common wealth. The effectiveness of this approach is enhanced by the fact that it would bring together our resources for housing, urban renewal, employment, education, training, and social help, in one combined, concentrated attack on the most acute public needs of the community. Slum clearance is indispensable in that it eliminates the breeding grounds for disease, crime, and deterioration of human values and human resources. But slum clearance by itself, is no guarantee against future slums. Even new housing developments, well intended and well built, can deteriorate unless the people living in them have access to jobs, educational opportunities, medical care and hospitalization, recreational facilities, and social services, To deal effectively with the problem of poverty, we must direct the most effective remedies against both its causes and its consequences. Basic long-term economic programs, such as the establishment of realistic minimum wage standards, unemployment compensation standards, social security, medical care, equitable progressive tax policies, and the allocation of economic resources to employment-generating and socially useful, productive activity, provide the approach to the eradication of the causes of poverty. On the other hand, the most immediate practical way for America to treat poverty is to make every attempt to eradicate it when and where it is found. We know that impoverished generations have. since the 1930's tended to produce subsequent impoverished generations. Therefore, as a practical matter, it is much more economical to make every effort to assist the impoverished family in the first place. Apart from all other considerations, it should be recognized that the cost of such assistance serves to offset the far greater costs to the community of relief and welfare loads to care for those of its disadvantaged citizens who are unable to help themselves. that the the One great merit of the proposed Demonstration Cities Act of 1966 is that this program is directed toward remedying both the causes and the consequences of poverty. For it will help direct the allocation of economic resources, both public and private, to a priority area of public need, helping in time, to eliminate the causes of poverty. At the same time, it is also designed to deal effectively with the consefitquences of poverty, by making slums and blighted areas its direct priority target. the ittee. cious The proposed Demonstration Cities Act of 1966 is soundly conceived and carefully drafted. We are strongly in accord with its riors objectives. -ude. ble a and Let me comment on some of its specific provisions of particular concern to us. One of these is section 9, dealing with relocation requirements and payments. This provides for relocation payments by a comprehensive city at demonstration agency to a displaced individual, family business conhecern, or nonprofit organization, in the amount and in the circumstances al authorized by sections 114 (b), (c), (d), and (e) of the Housing Act of 1949. We ask that the language of this section of the proposed 1966 act be amended to bring it up to date. Surely, the amount that may have been reasonable and adequate 17 years ago is far from sufficient to make a reasonable and adequate provision for this need in the coming e year. The very least that can be done-and that is not enough—is to relate the language of section 9 to section 114 of the Housing Act of 1949 as amended. While the 1949 Housing Act recognized that the National Government considered relocation a public responsibility and an essential feature of slum clearance, important revisions in the relocation program have since been enacted into law. The Housing Act of 1954 shifted the entire emphasis from individual redevelopment projects to a broader program of attacking the entire problem of urban decay. The 1954 act also gave the HHFA Administrator the nondelegable responsibility of approving a local public agency's relocation plan. In addition, the 1954 law authorzed Federal Housing Administration loan insurance on liberal terms for low-cost private housing for displaced families in eligible locali ties. In the Housing Act of 1956, Congress decided for the first time that people displaced by urban renewal could receive financial help as a matter of right rather than as a device for facilitating slum clearance. Local public agencies receiving Federal funds were authorized to make payments to all dislocated families, individuals, and businesses for "reasonable and necessary moving expenses and any actual direct sses of property" up to a specified maximum amount. The 1956 act provided for such relocation payments to be covered by 100 percent Federal grant. The maximum limits of relocation payments were raised by the discretion of the HHFA Administrator. |