EXHIBIT TABLE II Persons over 65 years of age, education and unemployment rate, Upper Peninsula of Michigan Source: 1960 Census of Population and Michigan Employment Security Commission. PREPARED STATEMENT OF THOMAS P. ALDER, COUNSEL, NEIGHBORHOOD DEVELOPERS, INC., OF WASHINGTON, D.C., AND JACKSON, MISS. Neighborhood Developers Inc. is a D.C. non-profit corporation serving as an operating agency for mutual self-help housing and community development projects in the Mississippi Delta. Financed up to this time by private donations, it has just completed an eight-unit self-help project, housing fifty people, at a site known as Strike City near Greenville, Mississippi. All participants in this project are displaced plantation hands, evicted in mid-1965 for collective bargaining activity. After a harsh winter of tent living at the site they have, during the past five months, completed concrete block and wood-veneer dwellings which exceed FHA standards, have considerable esthetic value, and required an average cash outlay of $4000.00 per unit, including basic utilities. Each home-owner has, as a result of his labor contribution, an unliquidated equity of $13.00 in his house. This capitalized paycheck for five months work exceeds in amount the previous annual earnings of every family engaged in the project. Neighborhood Developers has sought funds under Title III-B of the Economic Opportunity Act to conduct a comparable 96 unit project on adjacent land, to help meet the needs of several hundred individuals who are or will soon be severed from plantation employment and plantation housing. During the seven months of discussions which this application has entailed, OEO has felt obliged to alter its original interest in funding mutual self-help housing projects in the Mississippi Delta. Simultaneously, the extent of assistance available under Title III-B has been sharply contracted by the program division in charge, and the Office of General Counsel has independently adopted the more stringent view that there is no Congressional mandate for any housing program under Title III. Although this latter position is at odds with the Program Data accompanying the Director's presentation to this subcommittee on June 21st, the General Counsel has since indicated to me that the housing program outlined in the Director's presentation is only a projection, and that no final decision has been reached on whether there will be a Title III housing program in FY 1967. It is difficult to testify to a policy as elusive as this without introducing evidence of how it has developed. The following series of letters is abstracted from Correspondence between OEO, members of Congress and representatives of Neighborhood Developers, and is to the best of my knowledge the principal, if not the only, documentation of recent shifts in OEO's Title III-B program. Home SaperaT SHRIVER. MARCH 30, 1966. Homeless people from Mississippi Delta arriving in Washington Thursday to gop you shout projected O10 mutual self help housing programs. We want to meet with them and hope you will too. Urge you to expedite funding of programs in face of mass evictions and desperate need. Such pilot projects could be basis of new housing legisation and new national policies. Phillip Burton, Charles C. Diggs, Jr., John G. Dow, Don Edwards, Ton. MARCH 31. 1966. House of Representatives, Thank you for your wire of Marc. Ab eoneening the Mississippians who are coming to Washington în connoccior, with the self help housing progessa! eurThese theme proposals arrived here on February 28, rently under review bara. March 3. March 16. We are fully wire of the critical nature of the situation and one stufe is making every effor, to speed the review of these muse's and well; cooperate in every way possible. We appreciate knowing of your interest. SARGENT SILVER Divesta-07 Economic Opportunity, Washiwum D.C. OFFICE OF ECONOMIC OPPORTUNI March 31, 1966. : This will confirm the information furnished your self-help housing proposals from Mississippi that are oposals are being considered under Title 111 of the Act which has to do with Migrants. The proposals * February 28, March 3 and 16, and every effort is being final action. All things being equal, we hope that this within the next two weeks. We cannot, of course, commit at this time. Our people are in constant communication and we foresee no problems. Knowing of your interest in this matter, and we most certainly wt be in a position to favorably consider these proposals shortly. DEAR MR. SMITH: As you know, the only section of the Economic Opportunity A that can provide housing is Section 311. Under this section, Congress has Appropriated $25,000,000 to provide services of education, sanitation, day care and housing for 71⁄2 million migrant and seasonal farm workers. Naturally, we owe it to these 72 million people to assure ourselves that this money is wisely spent. We have, in the past, used our funds for two types of housing programs. One has been demountable housing for migrants and the other has been selfhelp permanent housing in conjunction with loans from Farmers Home Administration. We have reviewed your proposal and require some additional information before a complete evaluation can be accomplished. While this information may look complicated and detailed, it is the result of questions raised at our meetings both here in the Office of Economic Opportunity and with other Federal agencies who share our hope that additional facts can contribute toward converting this application into a meaningful program. This information should be in writing and submitted as soon as possible so that we may continue with the review. The information we require is as follows: 1. How does your organization plan to get the additional financing necessary to run the project? When will this money be forthcoming and from what sources? With assurance that sites will be provided, without any use of grant funds, what is the total unit cost of each dwelling unit, including water and sanitary sewerage? Provide detailed cost breakdown, and source of financing difference between costs covered by proposed grant and total cost. Will funds covering this difference be contributed or loaned? If latter, by whom and on what terms and security? What arrangements will be made to service any loans? 2. If financing will not be obtained from Farmers Home Administration, please submit detailed specifications and drawings for the houses to be constructed. These should be in the same detail as required by Farmers Home Administration. Your local FHA office can supply information on the detail necessary. 3. What assurances have been made, or will be made for inspection of the houses as they are built? We are looking for information that will show periodic inspection during the building process so that there will be assurances that houses are being built according to sound plans. Who will perform these inspections and in what way will his recommendations be followed? 4. Exactly where are the houses to be built? The answer to this question should include the number in each cluster, the distance from population centers, the town, the county and the tract. What are your specific plans for acquiring this land? Does applicant own land on which houses are to built? Furnish certified copy of deed, or option to purchase, containing legal description and topography plot for development. What is availability of water and sewer? If sewer system not available, what is soil suitability for septic tanks? If septic tanks are to be used, what size lots will be provided for each house and land space for septic tank leaching? What is nearest area for marketing and employment of residents? 5. Once the houses are built what steps are being taken to provide the other necessities of economic uplift such as education and jobs? This is especially important if your answer to question 1 shows that money will be received on a loan basis. 6. Please provide us with the detailed construction schedule showing the timetable for completion. 7. What criteria have you set up for selection of those individuals to participate in the program? Who will be selected and who will be rejected and on what basis? 8. What provisions have been made to assure that material purchased under the grant and partially completed homes will not be destroyed by either fire or theft? What will be standards of eligibility for families to occupy dwelling units created by grant? Will occupants be tenants, leasees, purchasers on contract, or purchasers subject to mortgage obligation? Financial terms? Who will be title holder of land and housing unit, and primary obligor on the mortgage? What will be the protection for occupant against eviction or foreclosure in case of default? 9. Can you guarantee that all funds to be supplied by grantee will be available before project commences? 10. What provision will be made to prevent sale and potential windfall as soon as houses are built? If any of the above questions should be unclear, please do not hesitate to contact us for additional clarification. The Office of Economic Opportunity will, where feasible, make technical assistance available to you in applying this new information to a revised application. Sincerely, NOEL H. KLORES, Acting Director, Special Field Programs Division, Community Action Program. Mr. NOEL H. KLORES, WASHINGTON, D.C., April 16, 1966. Acting Director, Special Field Programs Division, Community Action Program, Office of Economic Opportunity, Washington, D.C. DEAR MR. KLORES : Section 311 of the Economic Opportunity Act reads: "The Director shall develop and implement as soon as practicable a program to assist the States, political subdivisions of States, public and nonprofit agencies, institutions, organizations, farm associations, or individuals in establishing and operating programs of assistance for migrant and other seasonally employed, agricultural employees and their families which programs shall be limited to housing, sanitation, education, and day care of children. Institutions, organizations, farm associations, or individuals shall be limited to direct loans."* This language unmistakably authorized OEO to provide 100% of the cost of housing sewerage and water supply to a non-profit agency proposing a mutual self help housing program for seasonal agricultural workers. OEO is also authorized, under Section 302 of the Act, to meet the cost of lands by loans of up to $2,500 to low income rural families who are not qualified for loans under other Federal programs. In requiring the Director to develop and implement a program of assistance for seasonal workers, Section 311 does not suggest that such a program should duplicate the features of other federal housing programs. On the contrary, the language of Section 302(b) indicates that the title is intended to meet the needs of those not otherwise eligible for federal assistance. This means, presumably, the needs of the poor. I go over this old ground only because it seems that if it was once familiar, it is now forgotten. Your letter of April 7 requests information which can only be provided by people who have acquired and spent a considerable amount of money, and are capable of acquiring and spending a good deal more-all before OEO will even consider further review of their application. During our conversation on the evening of April 7 you justified these requests as necessary to protect OEO from embarrassment in its first zero-income housing and community development grant. Your interest in minimizing the risks borne of OEO is understandable, but I wonder if you appreciate the risks you thereby shift onto the poor you are directed to help. By your letter you are asking them, among other things, to organize at the risk of reprisal, to buy land with no certainty that houses will be built on it, to secure detailed building plans with no assurance that they will ever be used, and to cover costs of certain materials with funds which you know are no forthcoming from other federal agencies. If this is OEO's response to those who seek to solve the problem of housing very low income families, OEO has defaulted on its statutory obligation under Section 311 to "develop and implement as soon as practicable a program to assist *** nonprofit agencies" through which the poor might hope to help themselves. Instead you have asked the poor to meet requirements which have been developed in federal programs for moderate to middle income families. In fact, if all these requirements were met on the terms you demand, the proposals might justifiably be challenged as an improper duplication of existing programs. Your letter suggests that the questions it raises might require further clarification. This point is well taken, as the questions are set out in such a way that *Since a 1965 amendment, requested by OEO and described in its presentation as "technical." section 311 reads: "The Director is authorized to develop and implement a program of loans, loan guarantees, and grants to assist State and local agencies, private nonprofit institutions, and cooperatives in establishing, administering, and operating programs which will meet, or substantially and primarily contribute to meeting, the special needs of migratory workers and seasonal farm laborers and their families in the fields of housing, sanitation, education, and day care of children." several seem to overlap and no clear sense of priority or logical sequence emerges. It would be helpful, for purposes of greater clarity, to divide these questions into two groups; those requiring actual performance by the applicant before the project is considered further, and, on the other hand those requiring the applicant to commit itself to do something after OEO has first made its commitment to the project. Unless OEO will expressly waive its usual rule against reimbursing expenses incurred before the date of the grant, most of these questions should fall into the latter group. If you could restate your requests along these lines, meaningful information can be submitted at an early date so that you may continue with the review. Neighborhood Developers Inc. has, as you are aware, already answered most of these questions in discussions with your office over the past four months. On the night of March 31st, in what we understood to be a formal working session, all outstanding points on OEO's checklist of questions were resolved to your satisfaction, except the issue of OEO's share of material costs. We do not know why OEO repudiated that agreement within 12 hours, or why it consistently refused our offers to continue negotiations after that time. However, as this has happened, we feel we must once again state our essential position formally and explicitly. Neighborhood Developers, Inc., through good fortune and considerable effort, is now completing, under a private grant, an 8-unit mutual self-help project for zero-income families at Strike City, near Tribbett, Mississippi. The Administrative and technical outlays made in connecton with this project and the experience gained in carrying it out make it possible for Neighborhood Developers to give reasonably precise answers to your exacting requests. But other groups, existing or emerging in the future, may not be so fortunate. The three applications now pending represent in aggregate a minimal pilot program to establish the feasibility of self-help housing in the Delta and, in our view, ought to be funded in the absence of compelling objections against one or more of them. If, however, Neighborhood Developers or any other group accepts the literal requirements of your April 7th letter as essential to an OEO commitment, the effect will be to launch a federal program which will demonstrate, principally, that the first step away from homelessness is to attract a private benefactor of considerable means and talent. There are those who would like to see such a precedent established, but they are not generally regarded as friends of the war on poverty. For these reasons, Neighborhood Developers reiterates its request for 100% OEO participation in the costs of the project, and for a modification of your April 7th demands. There is one final matter which I am obliged to raise despite my high regard for your earlier efforts on behalf of these applications. OEO's conduct over the past two weeks has led many potential participants in the Washington County project to question sharply OEO's good faith. If negotiations are undertaken again, only to be repudiated once more by OEO without explanation, these people may abandon hope of mutual self-help housing under any auspices. To avoid what would surely be a tragedy for everyone concerned, it is only fair that we be assured that agreement on any or all remaining points will, in substance, survive later review within the agency. If you are unable to provide that assurance, then we must request that someone who is empowered to make it join any negotiations growing out of our present correspondence. Awaiting your reply, I remain, Sincerely yours, THOMAS P. ALDER, Counsel, Neighborhood Developers, Inc. OFFICE OF ECONOMIC OPPORTUNITY. Subject: Use of OEO Grant Funds for Housing Projects Under Section 311, "Assistance for Migrant, and Other Seasonally Employed, Agricultural Employees and Their Families." Under Section 311 OEO is authorized to provide assistance in establishing and operating housing programs for migrants and other seasonally employed agricultural employees. This section has been interpreted to permit grants as well as loans to public and private non-profit agencies. However, when working |