TABLE 2.-Housing needs of the United States in 1960 (in thousands) Total effective supply of dwelling units needed in 1960. --Subtract: Estimated effective supply, beginning of 1949 (from table 1)... Net additional number of units which need to be added to Total nonfarm new construction conversion and rehabili- Add: Total farm new construction and rehabilitation need.......... Total United States housing needs to 1960---Bureau of the Census estimate of nonfarm families. 1 39, 500 1, 600 41, 100 34, 829 6, 271 8, 470 14, 741 2, 000-3, 000 16, 741-17, 741 IV. DECLARATION OF NATIONAL HOUSING POLICY Since the establishment of the Home Loan Bank System by the Seventy-second Congress in 1932, every successive Congress has given attention to housing, and numerous measures dealing separately with various aspects of the housing problem have been enacted. A great part of this legislation was orginally enacted to deal with acute problems which became apparent during national emergencies, including the economic crisis of the early thirties, the necessity of shelter to meet the production requirements of World War II, and the postwar veterans' housing emergency. It is now well recognized that housing is not a temporary problem which can be solved by emergency measures; that it requires a comprehensive, long-range program. Some of the programs of strictly emergency or experimental character have been discontinued and have been or are being liquidated. But from a considerable part of this legislation have emerged permanent programs which have been continually revised and improved by the Congress to serve changing needs. These include a system of aids to home financing institutions which is administered by the Home Loan Bank Board; the credit insurance programs of the Federal Housing Administration; and the low-rent public-housing program administered by the Public Housing Administration. Underlying the development of these programs, as well as the establishment of several emergency programs, has been the implied recognition that the well-being and security of the home are matters of national public policy, and that the stability of the home-building industry is essential to the health of the economy. There has never been, however, a statement by the Congress of the national housing objectives or of basic policies as to the respective spheres of activity for industry, labor, communities, and the Federal Government in the attainment of those objectives. Your committee believes that such a declaration of national housing goal and policies is needed. It would provide a frame of reference for the use of the Congress, the administrative agencies, the local communities, and industry and labor in appraising housing activities and progress. The policy declaration in H. R. 4009 reflects the 17 years of experience by the Federal Government in housing activities and the consideration which has been given to basic legislation during the last few years. Your committee notes that such policy declarations were contained in the comprehensive housing bills referred to this committee during the Seventy-ninth Congress and the Eightieth Congress and that a similar declaration was recommended by the Joint Committee on Housing. The statement in H. R. 4009, while it contains certain improvements, is in full accord with those earlier declarations and recommendations. The policy declaration in H. R. 4009 states that the general welfare and security of the Nation require the realization as soon as feasible of the goal of a decent home and a suitable living environment for every American family. It recognizes the necessity of attaining a rate of housing production sufficient to overcome the serious housing shortage and to replace slums and other inadequate housing, and to enable the housing industry to make its full contribution to an economy of maximum employment, production, and purchasing power. In defining the policy to be followed in attaining this national housing objective, the bill recognizes that primary reliance has been and must continue to be on private enterprise. It provides that private housing enterprise shall be encouraged to serve as large a part of the total need as it can and that governmental assistance should be utilized to the extent feasible to enable private enterprise to serve more of this need. Furthermore, the bill calls for assistance to communities in undertaking positive programs to encourage the production of lower cost housing of good quality. The definition of national policy also includes the extension of Federal assistance for slum clearance and for the provision of decent housing for low-income families in cities and rural areas, to the extent that those needs cannot be met through reliance upon private enterprise. To obtain further assurance that all housing activities of the Federal Government, at the regional and local levels as well as in Washington, will be administered within the letter and the spirit of this defined national policy, the policy declaration contains a specific congressional charge and directive to the administrative agencies of the Federal Government to exercise all powers, functions, and duties with respect to housing, so as to encourage and assist the attainment of the following specific objectives: 1. The production of housing of sound standards of design, construction, livability, and size for adequate family life; 2. The reduction of the costs of housing without sacrifice of such sound standards; 3. The use of new designs, materials, techniques, and methods in residential construction, the use of standardized dimensions and methods of assembly of home-building materials and equipment, and the increase of efficiency in residential construction; 4. The development of well-planned, integrated residential neighborhoods and the development and redevelopment of communities; and 5. The stabilization of the housing industry at a high annual volume of residential construction. Such a declaration of national housing policy can provide the necessary guide lines now lacking for the concerted and sustained efforts by industry, labor, communities, and the Federal Government which are required to help overcome the national housing problem. It will define our policies and objectives not only for the substantive programs contained in the pending bill, but likewise for existing programs and for the further legislation which the Congress will consider in the future. V. SLUM CLEARANCE AND COMMUNITY DEVELOPMENT AND REDEVELOPMENT NEED FOR A SLUM-CLEARANCE PROGRAM The provisions of this title offer, for the first time, a greatly desired, but long-delayed, program to eliminate the Nation's slums. Today about one-fifth of our city families live in slums and blighted areas. They obviously do not live there by choice. They live there primarily because only in the slums can they find any sort of housing accommodations at prices and rents which they can afford to pay. From city after city throughout the country has come evidence of the extravagant wastes of human and other resources arising from slum conditions. Slums and blighted areas foster delinquency, disease, and crime, the effects of which can only be partly measured in the statistics available to your committee. They create demands for welfare, fire, police, and other financial outlays greatly in excess of the revenues which cities receive from them. Communities have long been aware of the social and economic costs of these areas but have been unable to take effective steps toward their eradication because of their inadequate resources. A few, like Baltimore, have attempted to alleviate these conditions through the exercise of local police power in requiring the compulsory repair or closing of substandard housing. Such efforts frequently have been credited with offering an adequate solution to the problem. While your committee believes that all cities should utilize effectively police powers to mitigate some of the worst effects of slums and to help prevent their spread, it is convinced, from the overwhelming evidence presented by mayors and from many others, that this method alone will eliminate neither the slums nor the conditions which they create. The committee was impressed by the testimony of the mayor of Baltimore as to the limitations of law enforcement as a solution to the slum problem. He stated: The Baltimore plan might be compared to first aid administered in the temporary absence of a doctor, which would not be necessary if the doctor were present to begin with, and which in no way eliminates the eventual need for the doctor's services Your committee is convinced that the only way by which slums may be effectively eliminated is by the public acquisition and clearance of slum areas and by assuring that they will be redeveloped in accordance with sound plans as to land uses, density, and other factors contributing to good neighborhoods, and be properly related to the growth and development of the city as a whole. Because of their present intensive use, the prices which must be paid for slum and blighted areas, together with the costs of clearing and preparing them for reuse, will generally exceed the return which will be realized from sale or lease of the land for appropriate redevelop ment. 1 These are the costs which prevent slum clearance from being a profitable venture for private enterprise. These are the costs which, together with the large capital outlays required, have prevented the local communities, with very few and limited exceptions, from moving ahead with this task within their own limited resources. The objective of the programs contained in title I of this bill is to provide the necessary financial assistance that will enable local communities to make an effective start toward eradicating the slums. The overwhelming evidence presented to this and other congressional committees is that only through such Federal assistance can substantial progress be made in dealing with this problem. It is in the national interest that no further delays in starting an effective attack on the slum problem should be countenanced. Slum clearance is a time-consuming process and any further postponement of the already long-delayed start in meeting this problem would merely set back for a further indefinite period any hope for progress toward its ultimate solution. FEDERAL ASSISTANCE AUTHORIZED IN H. R. 4009 H. R. 4009 would authorize the Housing and Home Finance Administrator to assist localities in carrying out slum-clearance projects. The appropriate local public body in each city would select the project areas, prepare the redevelopment plans, acquire the project sites, and prepare them for disposition for redevelopment. The role of the Federal Government would be restricted to the making of loans and capital grants, furnishing technical assistance, and assuring compliance with statutory requirements. The Federal loans would be utilized to finance the capital cost of acquir ing, clearing, and preparing the sites for appropriate reuse. grants would help the local communities absorb the losses which represent the difference between the costs of the slum-clearance operation and the reuse value for which the land is sold or leased for redevelopment. The loan authorization aggregating $1,000,000,000 would become available over a 5-year period, with $25,000,000 becoming available on July 1, 1949, $225,000,000 on July 1, 1950, and further amounts of $250,000,000 on July 1 of each of the three succeeding years. The bill permits the initial loan authorization, and any of the authorized increases therein becoming available in any year, to be increased (subject to the total loan authorization of $1,000,000,000), at any time or times, by not to exceed additional amounts aggregating not more than $250,000,000 upon a determination by the President, after receiving advice from the Council of Economic Advisers as to the general effect of such increase upon the conditions in the building industry and upon the national economy, that such action is in the public interest. The capital-grant authorization totals $500,000,000 and would become available in five annual installments of $100,000,000 beginning July 1, 1949. The bill permits the initial capital-grant authorization, and any of the authorized increases therein becoming available in any year to be increased (subject to the total capital-grant authorization of $500,000,000), at any time or times, by not to exceed additional amounts aggregating not more than $100,000,000 upon a determina tion by the President, after receiving advice from the Council of Economic Advisers as to the general effect of such increase upon the conditions in the building industry and upon the national economy, that such action is in the public interest. HOW THE FEDERAL ASSISTANCE WOULD BE USED Under H. R. 4009, Federal assistance would be available only to finance the costs of acquiring and clearing slum sites and preparing them for redevelopment; none of the funds would be available to finance the construction of buildings on the cleared sites (except that temporary loans may be used to finance certain public facilities for open sites as indicated below). Temporary Federal loans would be available to finance the costs of planning of local projects, land acquisition, and the clearance and preparation of the sites for reuse. On disposition of the land for redevelopment, the temporary loans would be repaid out of the proceeds of sale of the land (or, in the case of lease, from the proceeds of longterm loans), the Federal grants, and the local cash contributions. Long-term Federal loans would be available to refinance, on the basis of the reuse value, portions of the sites which are leased and would be secured by the rentals from the leased land. The net loss involved in this slum-clearance operation would be shared by the Federal Government and the local community on a 2-to-1 basis. Thus, the Federal grants may not exceed two-thirds of the losses on all clearance projects undertaken in any one locality. The balance of the losses must be borne by the local public agencies either in cash or through contributions other than cash, such as the provision of parks or schools necessary to support the new uses of the land, the construction or relocation of streets and utilities or the use of municipal labor and equipment for the clearance operation. Evidence before your committee indicates that a substantial writeoff of excessive costs will be necessary if redevelopment of the slum areas is to be in accordance with the appropriate uses. In the light of the best informed judgment as to the ability of the cities to contribute to slum-clearance programs, therefore, your committee is convinced that the 2-to-1 sharing formula is necessary if the purposes of the program are to be achieved. It is obvious that the aid extended must be sufficient if the program is not to be self-defeating. If it is inadequate, it would either prevent the initiation of local slumclearance projects or, by forcing the overbuilding of the redeveloped areas, make them susceptible to deterioration into slums again in the future. The evidence presented to your committee on behalf of the United States Conference of Mayors and by other city officials, as well as the findings of previous congressional investigations of this matter, afford convincing evidence that any change in this sharing formula to require larger contributions by the cities would severely restrict or defeat the basic objective of this program. The clearance of land in residential slums in central city areas and its redevelopment in accord with a plan for the most appropriate use of the land, such as for housing of less density, for industry or for public purposes, will necessitate a dispersion of a considerable portion of the families now living in such areas. Your committee is convinced |