There is one other program which should be added to this list. The clean rivers demonstration restoration bill of 1966 submitted as part of the President's program last week would provide special grants for sewage treatment facilities serving eligible river basins. The administration recommends that this grant program, when enacted, also be made eligible for supplementary grants under title I of this bill.

Basis for inclusion of programs

The programs supplemented by this bill serve some of the major needs of the Nation's growing metropolitan communities.

Transportation facilities, water and sewer systems, and recreation and openspace areas all knit together metropolitan regions and help to shape their growth. A highway or a rapid transit line, for example, can open large areas for suburban development, and influence the scheduling and location of other public facilities to serve such development. Similarly, the location of water and sewer lines and of parks and other open-space areas can greatly affect local subdivision and other development. But if planned inconsistently, these projects can distort urban growth, and one project can greatly reduce, or even negate, the benefits expected from another.

The supplemental assistance provided under this title is, therefore, directly keyed to critical types of development projects for which there has already been Federal recognition of need and a commitment to assist in meeting these needs. Amount of grant

A supplemental grant could not exceed 20 percent of project cost. Thus, projects under an eligible program with a 50-percent grant level could receive a total of 70 percent in Federal support.

However, in no case could total Federal contributions exceed 80 percent. Under the mass transportation program, for example, Federal grants could be raised from 66% percent only to a maximum of 80 percent.

Also, the grant supplement could in no case exceed the basic grant amount. Effect on basic grant programs

The supplemental grants provided under the new program would not affect the basic grant programs themselves, which would continue in full force and effect. The new program would merely increase the Federal share of the cost of development projects meeting the standards of metropolitan coordination set out in the bill. In this way, the proposed grants would reward State and local governments which have actually reached, and provide encouragement for others to reach, a high level of metropolitan planning and arrangements for coordinated development.

The amount of a supplementary grant will be based on a certification, by the Federal agency having responsibility for the basic program, of the cost of the assisted projects and of the amount of non-Federal contributions. These certifications and other aspects of administering their own programs will remain under the full control of the individual Federal agencies.

The Department will, of course, work closely with these other Federal agencies to provide Federal leadership and coordination toward more orderly metropolitan development. This is one of the principal tasks which the Congress has assigned to this new Department.

Eligibility of metropolitan areas

Before supplemental grants can be made for projects in a particular metropolitan area. it will have to be shown that (1) metropolitanwide comprehensive planning and programing provide an adequate basis for the location, financing, and scheduling of public facilities and land developments of metropolitanwide or interjurisdictional public significance; (2) adequate areawide arrangements exist to carry out such planned and coordinated development; and (3) public facility projects and other land developments having a major impact on the development of the area are in fact being carried out in accord with compre hensive planning and programing.

The required metropolitanwide comprehensive planning and programing would include such elements as areawide population and employment forecasts; forecasts of where and under what conditions residential areas, employment centers, and other major land uses will be located throughout the area; and comprehensive short-range programs for the provision of needed facilities and services, taking into account both the needs and financial capabilities of the various communities within the area. Planning and programing would generally cover

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at least land use; transportation; water, sewer, and other public facilities; housing and relocation; education, health, and other institutions and services; parks, recreation, and other open space; and air and water pollution.

The emphasis in title I is on planned development, rather than planning for its own sake, and an additional requirement for eligibility of metropolitan areas would be the existence of arrangements for carrying out such plans on a coordinated basis. This would entail findings that adequate institutional or other arrangements exist in the area to coordinate local public policies and activities. Similarly, a metropolitan area would be eligible only if projects and developments of major areawide significance-whether federally assisted or not-are actually being carried out in accordance with metropolitanwide planning and programing. Eligibility of applicant

Not all localities or other public bodies in an eligible metropolitan area could receive supplemental grant assistance under the program. An applicant public local body would have to show that public facility projects and other activities over which it has jurisdiction and which are of interjurisdictional or areawide significance are being carried out in accord with the metropolitan planning and programing. The objective would be to further areawide and interjurisdictional coordination where that is needed.

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Special attention would be given to whether the applicant is effectively assisting in, and conforming to, metropolitan planning and programing through the location and scheduling of its public facility projects and its establishment and consistent administration of zoning codes, subdivision regulations, and similar This land-use and density controls.

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This requirement could not, of course, be applied directly to a sewer district or other special-purpose body. If the applicant is not a county, municipality, or other general-purpose government, then the general-purpose government having djurisdiction over the location of the project would also have to qualify under the program. This might involve prorating of project costs-for example, in the case of a road project located in both eligible and ineligible communities.

Evolution of Federal planning policies

During the past 15 years, the Federal Government has increasingly supported planned urban development.

Under the Housing Act of 1949, urban renewal projects were required to be consistent with local plans. However, planning was viewed largely as a local vehicle for meeting the needs of the newly enacted urban renewal program. The Housing Act of 1954 established the citywide workable program requirement for the expanded urban renewal program, for public housing, and for renewal-related FHA housing programs. The emphasis was placed on total community effort. Planning became an integral workable program element to help thguide community growth and improvement.

The 1954 act also created the "section 701" urban planning assistance program. Grants were made available to help prepare the comprehensive plans required for local workable programs and renewal activities. Assistance was also provided for metropolitan planning activities.

The first requirement for metropolitan planning as a condition to Federal assistance was applied to the open-space land program under the Housing Act of 1961. Next, the 1962 Federal-Aid Highway Act established the requirement for metropolitan area wide transportation planning carried on cooperatively by States and local communities. In 1964 and 1965 new programs with areawide planning requirements were established to assist such activities as mass transportation, the provision of basic water and sewer facilities, and FHA-aided land development for subdivisions and neighborhoods.

These requirements have resulted in an increased tempo of metropolitan planning. Much of the planning is, however, still directed toward meeting the specific Federal planning requirements and has not resulted in effective overall planned development.

The proposed new program would meet this problem through its special incentives for multipurpose planning and on areawide implementation of plans. It would provide grants only when planning and implementation are found to be satisfactory for all major developments within the area.

Role of areawide comprehensive planning agency

The metropolitanwide comprehensive planning agency would be expected to assist materially in making these necessary determinations of eligibility. It would provide comments on the consistency of assisted development projects with area

54

wide planning and programing. It would also report on the overall status of the area's development activity as it relates to carrying out areawide planning and programing, and on the contribution made by local governments. This information would be taken into fall account by the Secretary in making the required determinations as to eligibility.

Estimated level of activity

Each metropolitan area is different: each must be given full recognition of its varying limitations and capacities. However, the proposed supplemental grants would be conditioned upon a high level of metropolitan planning and programing, adequate to provide a practical guide to the immediate concerns of public

and private decisionmakers.

Metropolitan planning has in fact now advanced sufficiently to permit the setting of high standards. By the end of 1964. some form of metropolitan planning activity was underway in about 150 of the 219 metropolitan areas.

It is expected that about a dozen metropolitan areas, encompassing several hundred local communities, might become eligible for supplementary grants dur ing the first year. Accordingly, the Department estimates that the first year

program level will be $25 million.

With continued encouragement under this program, about 75 metropolitan areas, having an aggregate population of around 60 million, might qualify for supplemental grants by the end of 5 years.

However, the size and speed of expansion of the program would depend primarily on the degree of effort that metropolitan areas and localities are willing to put forth. The supplementary grants would be available to any jurisdire tions which show, as stated in the President's recent message, "that they are ready to be guided by their own plans in working out the patterns of their own development and where they establish the joint institutional arrangements neces

sary to carry out these plans."

New planning program under existing law

able under our section 701 urban planning assistance program. In addition, a Financial assistance for metropolitan comprehensive planning is now availprogram to develop new techniques of metropolitan planning and implementation. 26, 1966, for a "series of demonstrations in effective metropolitan planning." This will put into effect the President's proposal in his message of January I estimate that the total cost of this program will be about $6.5 million.

TITLE II-LAND DEVELOPMENT AND NEW COMMUNITIES

States will increase by some 70 million people between 1965 and 1985. By 1980, According to the most recent published projections, the population of the United

our population will be over 244 million.

The net effect of this increase will be felt in our urban areas where, currently, By 1985, it will be over 265 million.

3 million new residents are being added each year.

Most of this urban popula

tion increase will occur within our metropolitan areas, and within this pattern of metropolitan growth, the great bulk of population increases will occur outside

of the central cities, in suburbs and new communities.

There has been a growing recognition of the need to assure the continuing availability of land at reasonable prices to accommodate this growth. There has also been a growing recognition of the need to avoid the wasteful sprawl gress took a significant step toward meeting this need by enacting a new pro fering valuable credit assistance to help finance well-planned developments for gram of FHA mortgage insurance for privately financed land development, of

residential and related uses.

That program has already attracted considerable interest throughout the processed. This title would strengthen the FHA land development program in several important ways so as to enable it to facilitate further private effort and more effectively serve the increasing needs for our expanding urban population.

New communities

A new provision would be added to the existing FHA land development pro gram under title X of the National Housing Act, authorizing the approval of a category of "new communities" for which sites could be improved with the aid

of mortgage insurance.

The development of new communities is already well underway throughout the country. A number of large developers, despite the difficulties in obtaining adequate financing for these projects, and often despite very high financing charges, have undertaken to develop new communities planned with imagination and boldness that are characteristic of private enterprise at its best. As the President has said: "The private sector must continue its prominent role in new community development."

This new provision would provide needed credit assistance to facilitate such private efforts by a broader range of developers. It would encourage adequate private financing at reasonable cost for large-scale preparation of sites in well-planned communities. The sites produced with FHA mortgage insurance aid would be made available to a cross section of private builders, particularly small builders.

New communities would consists of land developments, satisfying all other requirements under existing title X, which meet certain special requirements. A development would be eligible for approval as a new community if the Secretary determines it will, in view of its size and scope, make a substantial contribution to the sound and economic growth of the area in which it is located. This contribution would be in several forms:

1. Substantial economies, made possible through large-scale development, in the provision of improved residential sites;

2. Adequate housing for those who would be employed in the community or the surrounding area;

3. Maximum accessibility from the new residential sites to industrial or other employment centers and commercial, recreational, and cultural facilities in or near the community; and

4. Maximum accessibility to any major central city in the area.

New communities would be distinguished from developments under the existing program primarily on the basis of the size and scope of the undertaking and the additional benefits they can offer to the consumer. What is contemplated here is land development planned on a scale that could provide a wide range of urban facilities and services, while maintaining close ties with nearby major cities. While these new communities need not be established on wholly undeveloped land, as a practical matter they would usually be found some distance beyond the nearest built-up areas because of the large amounts of land that are necessarily involved. This, in turn, would facilitate economies over and above those possible under ordinary land development, through the ability to seleet land in areas now largely undeveloped and yet provide needed facilities efficiently.

New communities could also more easily provide nearby industrial, commercial, civic, and recreational facilities, thereby minimizing transportation costs and efforts. They could also provide a fuller range of housing both as to incomes served and as to design. In short, by authorizing FHA credit assistance for this category of large-scale development, we would promote long-range economies in the use of our land resources, permit a greater flexibility in the private housing market and, above all, assure a greater range of choice for the home-buying public.

Several features of this new program deserve special mention. First, particular emphasis would be placed on maintaining close ties between new comnunities and nearby major central cities. One of the factors which the Secretary would consider in determining the approval of a development as a new community is maximum accessibility to any major central city in the area. Thus, along with the present development, redevelopment, and mass transportation aids accorded cities under Federal legislation, the central cities can enhance their economic base and become even more the major service, edurational, cultural, and distribution centers of their regions.

An important purpose of the existing land development program is to encourage the participation of small builders. This emphasis would be equally applicable with respect to the new aids for the development of new communities. The availability of FHA mortgage insurance will permit smaller land developers and smaller local homebuilders, as well as local mortgage lenders, to participate in both aspects of the land development program.

Unless our small- and medium-sized builders are able to obtain lots at reasonable prices on which to build houses in our Nation's new and better planned communities they will find that an increasingly important segment of the housing market has been lost to them, and this will be a loss not only to the builders, bnt to the new communities themselves. What will be lost to our new communi

wide planning and programing. It would also report on the overall status of the area's development activity as it relates to carrying out areawide planning and programing, and on the contribution made by local governments. This information would be taken into full account by the Secretary in making the required determinations as to eligibility.

Estimated level of activity

Each metropolitan area is different; each must be given full recognition of its varying limitations and capacities. However, the proposed supplemental grants would be conditioned upon a high level of metropolitan planning and programing, adequate to provide a practical guide to the immediate concerns of public and private decisionmakers.

Metropolitan planning has in fact now advanced sufficiently to permit the setting of high standards. By the end of 1964, some form of metropolitan planning activity was underway in about 150 of the 219 metropolitan areas.

It is expected that about a dozen metropolitan areas, encompassing several hundred local communities, might become eligible for supplementary grants during the first year. Accordingly, the Department estimates that the first year program level will be $25 million.

With continued encouragement under this program, about 75 metropolitan areas, having an aggregate population of around 60 million, might qualify for supplemental grants by the end of 5 years.

However, the size and speed of expansion of the program would depend primarily on the degree of effort that metropolitan areas and localities are willing to put forth. The supplementary grants would be available to any jurisdictions which show, as stated in the President's recent message, "that they are ready to be guided by their own plans in working out the patterns of their own development and where they establish the joint institutional arrangements necessary to carry out these plans."

New planning program under existing law

Financial assistance for metropolitan comprehensive planning is now available under our section 701 urban planning assistance program. In addition, à special program will be undertaken within the framework of the existing 701 program to develop new techniques of metropolitan planning and implementation. This will put into effect the President's proposal in his message of January 26, 1966, for a "series of demonstrations in effective metropolitan planning." I estimate that the total cost of this program will be about $6.5 million.

TITLE II-LAND DEVELOPMENT AND NEW COMMUNITIES

According to the most recent published projections, the population of the United States will increase by some 70 million people between 1965 and 1985. By 1980, our population will be over 244 million. By 1985, it will be over 265 million. The net effect of this increase will be felt in our urban areas where, currently. 3 million new residents are being added each year. Most of this urban population increase will occur within our metropolitan areas, and within this pattern of metropolitan growth, the great bulk of population increases will occur outside of the central cities, in suburbs and new communities.

There has been a growing recognition of the need to assure the continuing availability of land at reasonable prices to accommodate this growth. There has also been a growing recognition of the need to avoid the wasteful sprawl and disorganization of much recent urban development. Last year, the Congress took a significant step toward meeting this need by enacting a new program of FHA mortgage insurance for privately financed land development, of fering valuable credit assistance to help finance well-planned developments for residential and related uses.

That program has already attracted considerable interest throughout the country. Sixty-six proposals for well-planned developments are currently being processed. This title would strengthen the FHA land development program in several important ways so as to enable it to facilitate further private effort and more effectively serve the increasing needs for our expanding urban population. New communities

A new provision would be added to the existing FHA land development program under title X of the National Housing Act, authorizing the approval of a category of "new communities" for which sites could be improved with the aid of mortgage insurance.