We have shown specifically where and how this minimum sum must be spent, but we cannot emphasize too strongly that it applies only to one particular section of Philadelphia. Other areas in South and West Philadelphia would also become eligible for treatment in this program. But we recognize the need for practicality and manageability, as well as the obvious imperative imposed from without to confine ourselves to what is achievable within the resources potentially available to us. The scale of expenditure that is really required to meet our needs for a decent living for the inhabitants of our city could probably absorb the $2.3 billion scheduled in the demonstration cities bill. We still look to you, the members of this committee, for a total program in terms of these dimensions. At this point, may I comment briefly on a specific provision of the bill which has been severely questioned in some quarters. This is the creation of the position of a Federal coordinator who will be assigned to cities in the execution of their demonstration programs. We look upon this function as a most desirable and essential device to facilitate and expedite the execution of the entire program. By no means do we object to it-rather we encourage and endorse it-we think it is needed-and we are gratified that the insight of the drafters of this program should recognize the specific need for this function. In Philadelphia, we have for 10 years had an office of the development coordinator, formerly headed by William Rafsky. This is a single individual whose responsibility it has been to bring together, in the closest cooperation, the efforts of the planning commission, the Philadelphia Redevelopment Authority, Philadelphia Housing Authority, the Philadelphia Industrial Development Corp., the food distribution center, our city operating agencies, all of the involved Federal and State agencies, and a host of other quasi-public and pri vate groups, all of whom are deeply committed to the solution of our pressing problems. We have found this function to be indispensable. If a Federal coordinator is included in the program he will be working side by side with Mr. John J. O'Shea, our development coordinator. We can indicate that Mr. O'Shea is ready to work with him. Such a sweeping concept as the demonstration cities program not only seeks the services of a local Federal coordinator-it demands and requires him. As I understand the intent of the bill, this official will, in point of fact, serve as much as the spokesman for the community before the Federal agencies as he serves as an official of the Federal agencies themselves. Members of this committee, you must decide on what we are to tell 341,000 people. Will it be that with all our awareness of their prob lems, with all the strain we are placing upon our human and economic resources devoted to solving these problems, they will still have to wait in their present physical, economic, and social condition for a quarter of a century. Or will it be a promise to deliver a healthy, decent community in 6 years as called for in the bill? I know how busy the members of this committee are with its work, Should they come to Philadelphia, however, we would be very glad to take them about some of these areas which contain the blocks and blocks of vacant structures I have described to you today. In the ab minimums areas in N or treatmen cality and sence of that opportunity, what I have tried to do is at least suggest to that it app you the frightful level to which, not only this city but most of our older cities should never have been reduced. But this is talking in the past. Knowing that within your tenure of office 80 percent of our Nation's population will be living in urban complexes, we now appeal to you to move forward toward a better America with the passage of the demonstration cities bill now before you. d from sources po to meet could p on cities t ee, fora e pros Iters. Tas will le ere By no - me that drafters unction of the bring ve огра f the While my remarks today have confined themselves to the demonstration cities bill, I would like to submit to you a supplementary document containing some of my views and suggestions for improvement of the Urban Development Act of 1966. Mr. BARRETT. It may be put in without objection and it is so ordered. SUPPLEMENTARY STATEMENT OF HON. JAMES H. J. TATE, MAYOR, CITY OF Mr. Chairman and members of the committee, I want to thank you for again allowing me the privilege of presenting to you some of my views on the housing and urban development legislation being considered by your committee. In the testimony I have presented thus far, I have placed major emphasis on the proposed demonstration cities legislation because of the enormous promise this dynamic new idea holds. In this supplemental statement I would like to comment as well on some of the proposals contained in the two other bills which have been introduced and are presently before your committee. I would also like to review some other proposals for housing and urban development legislation, which we in Philadelphia believe to be worthy of your consideration. The landmark Housing Act of 1965 contained many new and valuable aids for the solution of city problems, but, unfortunately, some of the best tools provided have not yet been able to be fully employed. The rent supplement program, for example, which was the keystone in the President's housing program, has not yet been able to be launched because of technical objections raised to it. Now that these have been resolved, I hope that the program will be able to get underway in full volume. Other important programs authorized by the Congress are not operating at the full capacity envisioned by this committee, including grant assistance for basic water and sewer facilities, the acquisition of land for public facilities, and the grants for neighborhood facilities. In this last case, $12 million has been appropriated to serve the neighborhood facilities needs of all major cities in the United States. Philadelphia alone could easily consume the $12 million and not meet its pressing needs. To make matters worse, several new and worthy program innovations, such as the provision of Federal aid for comprehensive code enforcement, must share the already scarce and hard-pressed funds appropriated for the urban renewal program. Turning to the urban renewal program in greater detail, we find a very unhappy situation. Last year, I testified to the need for $6 billion over 4 years in order to assure adequate funds to meet the predictable needs of the program. Only $2.9 billion was authorized for those 4 years. The resulting authorization of $675 million for the current fiscal year will fall short by several hundreds of millions of dollars, the amount of applications already received in the offices of the Urban Renewal Administration. When it is realized that funds for demolition grants outside urban renewal areas, rehabilitation grants, and increased relocation grants must be taken from this appropriation, it is obvious that we are falling further and further behind in the struggle to save our cities. As I have testified, we in Philadelphia applaud the creative new approach represented by the great cities demonstration program in trying to find new ways of meeting our problems. However, I must repeat that the ultimate value of the program will be seriously diminished unless the maximum utilization of existing urban development programs is made possible through adequate funding of these programs. I must again urge, therefore, that the authorization for urban renewal be set at least as high as the level of demonstrated capacity of the cities to handle. This would mean $1.5 billion a year. This will not do the whole job; it will at least permit us to continue working at our present pace. I would urge with equal fervor that every effort be made to reverse the action taken last year in terminating the longstanding contract authority for urban renewal which was made in the face of express statutory provisions continuing that authority. In a program as complex as urban renewal, and involving the long-range cooperation of local and Federal Governments in long-range planning, and coordination with other State and local programs, it is clearly impossible to conduct a reasonable program on a year-to-year basis. The provision of contract authority is equally necessary in all of the other urban programs which become more and more entwined every year. These include low-rent public housing, housing for the elderly, mass transit, open-space and public-facility grants. Returning to the urban renewal program itseif, I must again urge, as I did last year, that the time has come for certain basic criteria governing the administration of the program to be reevaluated. The requirement of specific project boundaries and a set time sequence for completion of projects is another impedi ment in the way of cities desiring to undertake large-scale planning and renewal efforts, incorporating all of the programs and techniques available. An understanding of these problems is indicated in the outlines of the proposed demonstration cities program as it has been thus far presented. However, the freedom to exercise local ingenuity in order to find new solutions to urban problems in a comprehensive manner must be applied in the existing programs as well, par ticularly in the urban renewal program. This has been one of the major recom mendations to emerge from nearly 3 years of study under the Federal grant for our Philadelphia community renewal program. Specifically, it would be our recommendation that the urban renewal program be amended to permit communities, able to demonstrate a sophisticated grasp of program activities, to treat all of its urban renewal activities as one project. both for purposes of crediting local noncash grants-in-aid and for the free use and movement of its renewal program funds. Ideally, this would mean that cities like Philadelphia would be given an annual appropriation for urban renewal activities, to be used as the city would see fit within the approvable area of the city. The expenditure of these funds would, of course, be subject to program regulations and to postaudit by the Federal agency. Exceptions taken by the Federal agency could always be disallowed and deducted from future appropriations, but it is time, in my opinion and that of many other city leaders with whom I have discussed this matter, for urban renewal to be the truly local program which Congress intended it to be. It is only in this way that it will ever be able to have the flexibility and creativity to meet varied and changing urban needs. Now let me say a few words about another new effort in Federal-local coopera tion to preserve our cities. In 1964 the Congress, for the first time, recognized the necessity of providing aid to the cities in their code enforcement efforts. In 1965 it was found necessary to amend the earlier legislation to provide for more than mere code enforcement assistance if this program was to be meaningful. The program now permits financial support for other improvement efforts, such as tree planting, street improvements, new street lights, and other amenities which are needed to make a community one which meets at least minimum modern living standards. But again, city officials have found themselves frustrated in trying to heal ailing neighborhoods because the program is prohibited from operating in the very areas where it is needed most. The reason given for this is that the program should operate only in areas that can be reclaimed or preserved by these efforts alone. The implication is that more comprehensive measures will have to be taken in areas that are more severely blighted. This is fine, if it possible, but as you and I both know, we have not had the means to do the job and are not likely to in all areas of greatest need in the near fu ture. So, we have a situation in which the cities are effectively being told that if they cannot do all that should be done then they should do nothing-or at least the Federal Government will not help them. As I have already indicated. it is clear to everyone that urban renewal funds are not available in anywhere near the amount needed to treat all of the decaying areas which are also presently ineligible for inclusion under the Federal code enforcement program. Unless sufficient urban renewal funds are provided to let the cities get the job done, it seems to me that there is no other conclusion the Congress can reach but to permit code enforcement funds to be used in the areas where so many our neediest citizens live. of de to 2022 Now let me turn to what is probably the most important single subject of our concern: the expansion of our housing resources, particularly for low-income citizens. As in the case of urban renewal, I urged last year a construction goal of 125,000 public housing units each year in both new and rehabilitated units for a 4-year period, but the Congress only authorized an amount sufficient to provide approximately half this number of units. At the present time, the city of Philadelphia alone has an application filed with the Public Housing Administration for 5,000 units of new and rehabilitated housing. We expect to submit similar applications for an equal number of units in each of the next 3 years for a total of 20,000 units. In greatly increasing the supply of good homes for low-income, needy families, these new units will displace no one. They will be provided through the rehabilitation of presently vacant existing structures and the construction of new houses on vacant lots which blight so many of our neighborhoods. Such a program could be useful in many of the cities across the United States, but only if the magnitude of the total public housing program is great enough to allow its full utilization. Many other improvements in the public housing program are also necessary. Funds should be specifically provided for the rehabilitation and modernization of existing public housing projects, many of which are now more than 25 years old. Funds for this purpose should not have to be taken out of limited normal maintenance money. More funds are also needed for social services to be provided to tenants, more and more of whom suffer not only from economic problems but social and physical problems as well, over which they have little control. Such problems include age and physical disability, lack of education, or unsalable employment skills. The present stautory limits on construction costs per rental room must also be eliminated if new public housing units are to be able to be constructed in the high-cost situations which exist in almost every big city. The leasing program, enacted last year, and for which I personally hold great hopes of providing needed units in a rapid and flexible manner responsive to changing needs, should also be amended to provide for longer term leases, perhaps as long as 5 years, in order to both reduce administrative redtape and to encourage property owners to rehabilitate their properties up to public housing standards in return for promise of guaranteed rentals at fair market rates. I am happy to note a suggestion along these lines in one of the administration bills now before your committee. There is one change in the public housing program I would like to beg with special emphasis because, Mr. Chairman, I must say that I and the people of Philadelphia, feel specially mistreated. Last year the Congress agreed that the public housing program could be greatly strengthened if local housing agencies were able to sell single-family units to their occupants on favorable terms in an effort to create greater homeownership. Ironically, however, and at the last minute, the conference committee decided to change this provision. It eliminated row housing units from those which could be sold. This meant, in effect, that Philadelphia was unable to utilize this new provision. I assure the committee that we have no intention of selling off units which are needed for public housing families. We are, however, proud of Philadelphia as a city in which homeowners make up nearly two-thirds of the population, and believe that homeownership produces positive attitudes of responsibility and good citizenship. It is for this reason, that we would like to be able to devise means of selling public housing units to lower income families. In this way, we not only create homeowners, but we are able to use the public housing program as a renovating tool for the city. Finally, with regard to public housing, I would like to again urge that the Congress authorize the Public Housing Administration to make grants to local agencies for land acquisition in the same way and to the same extent as is now possible through the Urban Renewal Administration in renewal areas. This would make it possible as it is so often not at present, to build new public housing units on land which grows ever more scarce within our cities. However, housing is not only a problem for low-income persons in our cities. Many people who cannot qualify for public housing are also unable to find satisfactory housing. I know that the Congress has worked for many years to solve this problem and I certainly do not have all of the answers to it. However, I respectfully urge that the sections 220 and 221(d) (3) programs be revised and improved to remove the many impediments to the development of projects under these programs in high cost areas. In the case of the 221(d) (3) program, this means a lifting of cost limitations which prohibit the construction of high rise buildings which are all that are feasible in cities like Philadelphia, where high land cost makes low-rise construction unfeasible. This could be done if construction cost ceilings were based on permitting the prospective residents to pay 25 percent of their incomes for housing expense, as is the case under the new rent supplement program, rather than the present 20 percent. The sales housing program administered by FHA under section 221(d) (2), should simi larly be amended to raise the mortgage limits to permit realistic use of this program as a resource for the relocation of persons displaced by governmental action. Loans could also be made to nonprofit and limited-dividend corporations seeking to build new middle-income housing but lacking the necessary funds to organize and operate prior to receiving long-term financing. Federal loans to cover these organizational expenses would require very little money but would be likely to offer immeasurable aid in encouraging participation under existing programs in which such groups and corporations are eligible. The 3-percent loans and direct grants for rehabilitation of housing made available to families living in urban renewal and federally aided code enforcement areas will be of enormous help in accelerating the rehabilitation of some older areas to the levels that we have so long strived for, but neither of these programs is of any aid to persons living outside of these special project areas. May I suggest as I did last year that the FHA title I program be revised to permit maximum loans of $5.000 for home improvement rather than the $3.500 at present and that the term of these loans be extended to 7 rather than 5 years. I am aware that the interest rate is higher than under other programs, and for this reason, many people did not agree with this approach. But the fact remains that this program has been one of the most successful ever operated by the Federal Housing Administration. Borrowers and lenders alike are familiar with it, and it operates with a minimum of paperwork and delay. I note that one of the administration bills recommends that lenders be permitted to collect the onehalf of 1 percent insurance premium on these loans from the borrower, in order to revive this progam which has recently been declining. This may help; I think my recommendation may do as much without increasing the interest rate to the borrower. During the past few years, we have seen the section 202 progam of the Community Facilities Administration become, in a short time, one of the most success. ful housing programs ever launched by the Federal Government. The direct loan program for housing for the elderly has grown so rapidly that the $150 million for a 4-year period provided last year is already greatly inadequate to meet the demand. As a result, I must reiterate my suggestion made last year that this program be given an increased authorization of $250 million a year for the next 4 years. The program should also be amended to permit the rehabilitation of existing property which would meet the needs of the elderly. At present, acquisition and rehabilitation of such property is ineligible for financing under section 202. The financing of nonprofit nursing homes under section 202 should also be authorized under the same terms as nonprofit housing projects for the elderly. This would make it possible to reduce nursing home charges by as much as $30 a month in comparison with nursing homes financed with FHA section 232 mortgage insurance. Finally, capital grants should be authorized for the construction of related facilities, such as clinics, community rooms, craft shops and the like, in nonprofit housing for the elderly. Much has been done in recent years to extend relocation assistance to persons displaced as a result of governmental action but, I believe, Federal legislative changes are still badly needed. Last year, benefits previously available only to those displaced by urban renewal were extended to all those displaced by the programs of the then Housing and Home Finance Agency. I hope that this year the Congress will see fit to extend these privileges still further to include all persons displaced by Federal action of any kind, to be administered on an equal basis to all. In addition financial assistance to low-income families should be made more flexible and further liberalized, so as to guarantee their firm establishment in their new loca tions through such means as payment of security deposits for rent and utilities or grants for purchase of furnishings. Also, the relocation adjustment payments authorized in 1964 should be broadened into a rent certificate program to supple |