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The official municipal committee on postwar planning decided unanimously that this constituted one of the most important problems of the community, and it endeavored to develop a practical, workable, method for its solution.
Studies then were made of two blighted areas. One was comparatively small, situated in an area surrounded by industry, and which when cleared of its slums should be devoted to other industrial uses. The other was perhaps the largest slum area in the city, almost exclusively inhabited by Negroes. Both were within a mile of the center of the city.
These areas were surveyed to learn the number and characteristics and probable cost of acquisition of the properties involved; the number of dwelling units contained; the number of families and of individuals living within the areas; the average income of the family units; other social characteristics of the inhabitants, and prospectivebest land use under conditions of planning and control.
From these studies, the committee reached several conclusions. They are, briefly stated, as follows:
1. That the task of acquiring such areas and clearing them for redevelopment could not be carried out by private capital alone, because the cost of original purchase of the improvements on such an area and the clearing of such improvements to make the land ready for redevelopment would exceed any likely return on the investment; and, further, that so much vacant land within and outside the city is available for development that capital naturally turns to the land which is the least expensive or on which there is the greatest certainty of some profit.
2. That government could be reasonably expected to share in the enterprise because of the city-wide public benefit that would result from removing these sources of disease and crime which are a great expense to the entire community, and for the further reason that the securing of title to such large areas, of so many individual property units, would undoubtedly require the use of the local government's right of eminent domain.
3. That public subsidy should be confined to this one method of contribution, and no other means, such as tax exemption, should be employed. Our law specifically provides that the land acquired and the improvements on it never shall be exempt from taxation, unless and until it should be dedicated to a public use, such as public parks.
4. That the enterprise for our community did not exceed our own ability tofinance out of local tax resources, and that we could pay for it out of current income without having to borrow a dime.
The committee believes that in this respect we are no different from all other urban centers. It is unreasonable to contend that the Federal Government can afford to engage in such activity, in the committee's opinion.
The Federal Government must find the resources to pay for the Nation's greatest depression and now the fantastic costs of a cataclysmic war. It must obtain its revenue, in the long run, from the very people of the cities and the farms, who merely pay their taxes for State and local government a little differently than they pay their taxes for Federal purposes.
Any plan of Federal taxation that has been proposed or considered for the postwar period contains no provision for any enlargement of Federal grants to the local governments. Hence, it is only reasonable to assume that any such extension will be financed by further deficitson borrowed money.
If we, therefore, in our city can raise the money now to pay the cost of slum redevelopment, why should other cities not be able to do so,
and why should the Federal Government assume that it should go further into debt for these purely local purposes?
5. That we should devise a method that would require a minimum of Government participation and place main reliance on private capital and initiative for the redevelopment of the areas.
In this regard, the committee was, and is, firmly of the belief that governmental housing projects of all kinds are undesirable for both economic and social reasons, unless it is finally demonstrated that private capital cannot provide all needed and usable types of housing. Indianapolis builders and investors have assured us that they are not only willing, but anxious, to participate in this program. Several of the larger builders and realtors have worked untiringly with our committees in developing the Indianapolis plan. They are convinced it will prove to be "good business" and will tend to increase other property values and ultimately lower tax rates.
Therefore, the committee concluded that private capital could and would provide the necessary expansion of housing facilities within our community, so that within a reasonable time, no family need live under slum conditions..
6. That great care should be taken to provide safeguards so that our redevolpment projects could not be debauched by selfish individuals or groups for their own personal advantage.
7. That the redevelopment of the areas, once acquired and cleared, should be coordinated with the city's master plan, and should be regulated so that all new projects should meet minimum requirements of sanitation, comfort, and convenience.
The committee also was anxious to develop a plan that could be put into effect without delay.
This, then, was the background for the plan which was formulated, drafted into bill form by one of the able attorneys of the State, and enacted by large majorities in both Houses of the Indiana General Assembly last March.
Now, may I give an outline of the plan?
The law establishes a redevelopment department of the city government, which is made a special taxing district, with power to levy taxes, but not to issue bonds. The district is placed under the management of a board of commissioners of five citizens. These are appointed, without regard to political affiliation, but because of demonstrated interest in the problem, by a separate board of trustees which is appointed separately by the mayor of the city, circuit judge, and president of the common council.
This is a method we have used successfully for establishing the management of our municipal gas utility, the purpose being, principally, to prevent this activity of local government from becoming a part of the political spoils of the governing party.
This board then is given authority to designate blighted areas, to acquire them, clear them, plan for their redevelopment, and offer them for sale to private enterprise for redevelopment.
In order to erect safeguards to prevent any possible misuse of such authority, notices must be given both to owners of property declared to be blighted and proposed to be purchased and to the taxpayers of the whole community. Hearings must be held, and taxpayers may remonstrate against any project, in which case the whole proceeding must be heard by the full panel of our superior court of five judges,
whose decision as to the designation of a blighted area and the authority to purchase then is final.
Approval of all such projects and the plan for their redevelopment, however, must also be obtained from the city planning commission. The agency must cooperate with other public agencies, such as those governing our parks, flood control, thoroughfares, utilities, and other services so as to fit the redevelopment plan into the master plan of the city.
In acquiring blighted areas, the commission must follow specified provisions for appraisal, and determination of price, but the commission also is given the right of eminent domain, if it cannot agree with the owner as to price.
The commission, under its powers, has already levied the first tax for its work. Next year, a total of approximately $550,000 will be collected for this purpose. This entire amount, and perhaps even more, may be needed for the first large slum-clearance and redevelopment project. However, to some degree it will be recouped from the sale of land either to private capital, or to other public agencies for public development, as parks, schools, et cetera.
Hence, its fund will be somewhat in the nature of a revolving fund, being replenished from sale of land, as well as from further taxes. The commission has the power to levy this amount of money one more year, and thereafter it may levy up to half of this amount. It feels, after its first study of the problem, that this amount of money, together with proceeds of the sale of land, will go a long way toward redeveloping most of the blighted areas of Indianapolis.
Its jurisdiction lies over the entire city and to 1,000 feet outside the city limits. This is an important provision because of the fact that slums are sometimes developed right at our city's doorstep, not by deterioration of older property so much as by shack type of new development.
This plan will add 10 cents on the $100 to the city's tax rate next year, a tax rate that over-all, for city, school, county, and State purposes, totals $3.45 per $100. It is not a large proportion of the city's share in this rate. Out city's tax rate is neither high nor low in comparison with other large cities of the country, but Indianapolis is having the same problem that confronts most other urban centers—a demand for extension of public services, without proportionate increases in assessed valuation, and a top-heavy dependence on real property taxes. But we are convinced that the answer to this is not more Federal aid, but more economical spending of what we raise, plus the withdrawals by Federal and State Governments from some of the taxation fields which they now are so completely exhausting.
The law makes the plan applicable only to the city of Indianapolis at this time. This was at our request, because it was evolved from studies affecting Indianapolis made by Indianapolis citizens without outside participation, and the committee felt that we should not try to tell other communities of the State how to handle their problems. We were confident we had the solution for Indianapolis. We are ready at any time to agree to inclusion of other cities whenever they may desire. Inquiries from other cities indicate there will be such demand after they have witnessed our experience under the law.
I should like to make it clear that I am not appearing here to say that our plan is the panacea for any other community. The slum problems of all cities are different according to the different characteristics of those cities.
I am saying, however, that we are demonstrating that we can work out our own solution, without dependence on the Federal Government, and we are no better able to do so, by contrast of per capita wealth, spending for other public purposes or any other yardstick, than any other metropolitan center.
We feel fully confident we can do the job for Indianapolis without Federal aid. We shall, of course, feel a little foolish if we proceed to do so with our own resources, and then wake up to find the Federal Government pressing subsidies on other cities, which we shall have helped pay for. The answer to that suggestion, however, is not in our accepting Federal aid, but in all other communities awakening to their own possibilities and the threat to our national existence of further deficit spending and determining to meet the problem, themselves, without Federal aid.
Do you as Members of the Congress, or we as citizens, dare to take any other course, in the face of a near 300-billion-dollar Federal debt, and five to six billions of Federal taxes a year just to pay the interest on that debt?
If the Federal Government had had a record of a balanced budget during this time of great expansion of Federal aid, the answer might be different.
But let's be realistic and acknowledge that the whole history of Federal aid in this past dozen years has been that we sought it eagerly because we were not being called on to pay the taxes that were required. We thought we could "have our cake for a while and eat it, too." Does anyone in his right mind, seriously believe we can continue to do so indefinitely?
Why, right after our worst depression and war which has cost more than any other century of wars in the world's history; after destruction on a scale which surpassed all previous imagination; after nearly 15 years in which we have had to permit our physical properties to undergo depreciation and deterioration far beyond our custom and desire, why would we now suddenly assume that by passing a law and appropriating money out of anticipated further deficits, we can rebuild our housing within a few months, or even within a few years! We might as well realize it is going to take many years of patient toil and ingenuity to produce enough housing and improve existing housing to bring about the better standards of living that we all want. It cannot be done by the strike of a pen, or the utterance of the desire.
We believe and certainly hope that in expressing our views in strong opposition to Federal grants for purposes such as housing we are providing the very best type of cooperation with our Representatives and Senators in Washington.
We want you to know that we are convinced that the majority of the taxpayers want their local communities and their States to assume their rightful obligations of government and quite calling upon the Federal Government to transfer these obligations to Washington.
STATEMENT OF NEWTON C. FARR, REPRESENTING NATIONAL ASSOCIATION OF REAL ESTATE BOARDS, CHICAGO, ILL.-Resumed
Mr. FARR. Would you like, Senator, to have me finish reading this statement?
The CHAIRMAN. How much longer are you going to take?
Mr. FARR. It won't take me more than 10 minutes. I was hoping I would catch the 5:30 train, which I have missed.
The CHAIRMAN. All right.
Mr. FARR. This will not take long.
Senator ELLENDER. You provoked us into questioning you.
Mr. FARR. That is all right. I am tremendously interested in the task that you gentlemen are trying to solve. That is why I am here today. I am not here for the purpose of being an obstructionist. I believe in doing things. I want to encourage, and I want you gentlemen to encourage in every way you can the construction of houses of all classes, because I think it is the vital need today.
If we can simplify the procedure, if we can eliminate the bottlenecks, and get these builders in this United States to build some houses now-I don't mean a year from now, I mean this winter or next spring-we will help relieve this tremendous pressure; and again I will say, even many houses in the higher brackets or higher pricesit will help alleviate the sitution.
The CHAIRMAN. I just want to make an announcement of the witnesses tomorrow, beginning at 10:30, when Frank J. Lausche, Governor of Ohio, will be the first witness; Mr. Fred Kramer, president of the Metropolitan Housing Council of Chicago; Walter J. Mattison and Lt. Comdr. Philip H. Hill, National Institute of Municipal Law officers.
In the afternoon Joseph E. Merrion, president of the National Association of Home Builders; L. C. Hart, president of the Producers' Council; and the Right Reverend Monsignor John O'Grady, secretary, National Conference of Catholic Charities.
Mr. FITZPATRICK. Mr. Chairman, you are going to call on Mr. Meredith, the other witness from the United States Chamber of Commerce. He also has to catch a train. I think it might be well for him to make a brief statement or to file a statement.
The CHAIRMAN. Very well.
STATEMENT OF L. DOUGLAS MEREDITH, CHAMBER OF COMMERCE OF THE UNITED STATES, MONTPELIER, VT.
Mr. MEREDITH. Mr. Chairman, my name is L. Douglas Meredith, and I appear before you at this time as a representative of the Chamber of Commerce of the United States of America, by virtue of membership on the chamber's construction and civic development department committee.
It is also my privilege to be affiliated with the National Life Insurance Co., Montpelier, Vt., as vice president and chairman of the committee on finance. This company, incidentally, is a very active