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METROPOLITAN AMERICA: CHALLENGE TO FEDERALISM

ers of small businesses make a satisfactory adjustment requires heavy emphasis on advice, counseling, perhaps special assistance in financing a new operation, and if the owner does not wish to stay in business other types of assistance to help him earn a living in some other occupation.

The same reasons cited for supporting consistency among Federal programs apply equally to State-local programs. The few States that have adopted relocation compensation through broadening of the eminent domain law have achieved uniformity for displacements caused by real property acquisitions. However, these laws do not apply to code enforcement displacement nor do they, with few exceptions, provide for relocation advisory assistance. The Commission believes that States should broaden their laws to apply to all types of displacing action conducted by State and local agencies and should include relocation advisory assistance as well. While displacements caused by State activities other than highways are relatively limited, where they do occur persons and businesses affected should also receive adequate payments and assistance. The same applies to local government displacements and they are usually more substantial-in code enforcement procedures, for example.

2, ASSIGNMENT OF RESPONSIBILITY FOR DETERMINING RELOCATION

PAYMENTS

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The Commission recommends that Congress and State legislatures assign to administrative agencies responsibility for determining the amount of relocation payments, subject to specific statutory maximums.

Two general legislative approaches have been used in the United States to authorize compensation for incidental damages suffered as a result of forcible takings of real property by government. The first used by the Federal Government and such States as New York, Massachusetts, and Ohio gives responsibility to administrative agencies to determine payments within statutory specifications as to compensable items and maximum allowable payments. The second approach used by such States as Wisconsin, Maryland, and Pennsylvania works through a broadening of thé eminent domain law by specifying items of incidental damages that are to be included within the context of fair market value and awarding just compensation for property taken.

Basically the difference between the two approaches is that the first is essentially an administrative procedure in which final determination of compensable cost is made by administrative officials within the statutes. The second, on the other hand, adheres to the eminent domain concept and gives the condemned the access to the courts for determining the equity of the condemnors offer if the condemnee is not satisfied with that offer.

On balance, the Commission concludes that in the interest of (a) expeditious handling of relocation claims, (b) effective provisions of an overall system of relocation assistance including advice as well as compensation, and (c) the needs of those most urgently requiring relocation help, responsibility for determining relocation payments should be vested in an administrative agency subject to maximums established by statute.

3. ASSURANCE OF AVAILABILITY OF STANDARD HOUSING UNDER FEDERAL

AND STATE GRANT-IN-AID PROGRAMS

The Commission recommends that the Congress require State and local governments administering Federal grant-in-aid programs, before proceeding with any property acquisition that displaces people, to assure that there is a method for temporary relocation and that standard housing in sufficient quantities in a comparable location, within their financial means are or will be available, and that the States enact legislation with a similar requirement for State and local agencies.28

A joint survey by the Advisory Commission on Intergovernmental Relations and the U.S. Conference of Mayors found that inadequate supply of housing, both public and private, is the single most important obstacle to expeditious relocation of displaced families and individuals. At the present time, only the programs administered by the Department of Housing and Urban Development-federally aided urban renewal, public housing, neighborhood facilities, open space, code enforcement, and mass transportation-require that localities provide a feasible method for temporary relocation of families and individuals and assure that there are or are being provided the necessary number of standard housing units to meet the needs of displacees. States under the Federal-Aid Highway Act are required to help families find housing, but there is no requirement that housing be assured as a condition of payment of grant funds.

Assurance of standard housing is uniquely germane to the purposes of urban renewal and public housing programs as it is not to other Federal grant programs. Also, it is true that persons displaced may presently be living in substandard housing and that assuring a standard housing supply requires many types of public and private action governing the total supply of housing: However, the Commission believes the goal of providing standard housing for all is of such preeminent importance that its availability should be assured even if it means a delay in a federally aided project. Establishing this requirement for all Federal grant programs would probably, in fact, furnish a stimulus to the elimination of substandard housing. States as well as the Federal Government should use the relocation process to achieve the goal of standard housing for all even if by doing so, progress on public improvements is occasionally temporarily postponed.

4. FINANCING THE RELOCATION COSTS OF FEDERAL GRANT-IN-AID

PROGRAMS

The Commission recommends that under Federal grant-in-aid programs the full cost of payments to any persons for relocating a family and the cost of payments up to $25,000 to any person relocating a business be completely reimbursed by the Federal Government; and that the cost of business relocation payments in excess of that amount be shared on the basis of the cost-sharing formula governing the particu

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lar grant program. The States should share in local governments cost of providing relocation payments and services when such costs are incurred in programs for which localities receive State grants or Federal grants to which the State contributed part of the local share. The State share should be the same as that provided by the State grant formula for the aided program.

The Commission believes that the need for assuring adequate relocation payments is so urgent, particularly in the major Federal grantin-aid programs that cause most displacements urban renewal and highways—that it is in the national interest to assure payment of at least a substantial amount of each displacee's total relocation cost. It would be desirable in the Commission's opinion that the cost of individual payments above $25,000 be shared with the State and local

governments. The Commission believes this policy would reasonably accomplish the twin goals of assuring substantial payment of the total relocation costs of those displaced by Federal grant-in-aid programs and providing some State and local participation in financing as well as administering the partnership programs.

The Commission believes that where the local project is one conducted under a State grant-in-aid program the cost of relocation payments and administration of advisory services should be reimbursable by the State on the same basis as the aid distribution formula. Costs of relocation are charges against a program as legitimate as, for example, cost of building a sewage treatment plant or a highway. Further, where localities receive direct grants-in-aid from the Federal Government, States should share in the non-Federal portion of the cost including relocation expenses.

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5. MODIFICATION OF THE SMALL BUSINESS ADMINISTRATION DISASTER LOAN

PROGRAM

The Commission recommends that the Small Business Administration Act be broadened to authorize disaster loans both to small business concerns suffering substantial economic injury and to those adversely affected but not actually displaced as a result of a construction program conducted by State and local governments.

Since 1961 the Small Business Administration has been authorized to make loans under its disaster loan program to small business concerns displaced by Federal and federally aided programs. The law should be amended to permit loans to small businesses displaced by local and State activities as well. Under the present law, small businesses that may be adversely affected though not actually displaced are not entitled to low interest disaster loans. Damages suffered by these businesses are not less traceable to governmental action than actual displacement, and the Commission believes they should be entitled to small business loans on disaster terms.

6. EXTENDING ELIGIBILITY FOR MANPOWER TRAINING ALLOWANCES

The Commission recommends that Congress amend the Manpower Development and Training Act to permit widow and widower owners of displaced firms to be eligible for manpower training allowances.

Many small displaced businesses are owner operated. Because many owners have operated marginal businesses and do not have the resources or the spirit to re-establish themselves, their only chance of sustaining themselves without resorting to public assistance is to find other employment. Under the Federal Manpower Development and Training Act heads of households are eligible to receive training allowances for up to 52 weeks while training to acquire a new skill

. Widows and widowers are usually not eligible since they are rarely heads of households. Manpower retraining allowance would be of substantial assistance in enabling them to prepare themselves for their new occupation and thereby remain self-sustaining citizens.

7. CENTRALIZATION OF RESPONSIBILITY FOR RELOCATION IN

URBAN AREAS

Federal, State, and local governments should authorize and encourage all agencies causing displacements in urban areas to centralize responsibility for all aspects of relocation programs in a single agency which is part of the regular administrative organization in each major urban jurisdiction.29

Several existing programs either require or authorize coordination of relocation activities. The National Housing Act requires coordination of urban renewal relocation with other project activities and governmental actions in the communities which may affect the relocation program. The workable program of the Housing and Urban Development Department encourages localities to designate one agency to coordinate or centralize planning, relocation assistance, and action designed to make standard housing available for families displaced by all types of governmental action. The 1962 Federal-Aid Highway Act authorizes, and the Bureau of Public Roads encourages, States to contract to provide highway relocation services.

Experience of local relocation agencies point strongly toward the desirability of having a single agency in each locality administer relocation planning, relocation payments, and provision of advisory assistance. Administration through a single agency would have the advantage of clear visibility for displacees—there would be less doubt about where to go for relocation assistance particularly in cases where different programs take adjoining properties. Governmental agencies would benefit from added expertise and economies of scale. Administration of social service programs, both public and private, would benefit from the resultant simplification of referrals.

8. JOINT PROGRAMS AND CONTRACTING

Cities in metropolitan areas with relocation staff and experience should offer to contract to provide relocation services and area wide studies of housing needs and resources for all local governments and agencies operating in the area and where necessary smaller units should undertake to provide such services and studies jointly.30

Certain aspects of the housing function are most effectively handled on an areawide basis. Most important of these is surveying housing needs and resources since the entire metropolitan area rather than an individual municipality constitutes the housing market. The munici

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See "Interlocal Contracting and Joint Enterprises," ACIR 1966 State Legislative Pro. gram (Washington, D.C. : October 1965), pp. 398 406.

pality just starting out on a program involving relocation can profit from studies already made by a neighbor with previous relocation experience. Municipalities can enjoy the benefits of economy of scale, ample experience, and expertise if they are able to contract with neighboring agencies to administer relocation.

9. TECHNICAL ASSISTANCE IN PLANNING FOR RELOCATION

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States and regional organizations should assist local governments in planning for relocation through such means as technical assistance in preparation of workable programs in community renewal programs; where States make urban renewal capital grants, advances therefrom should be provided for relocation planning

The Commission believes that relocation is an area where States can be of substantial assistance because many localities, particularly the smaller ones, have a long way to go in providing effective relocation assistance. With continuing growth of metropolitan areas, regional bodies such as planning commissions, development councils, and councils of governments are being established as a means of assisting local governments in coordinating activities of mutual interest. Such regional units are also frequently in a good position to provide assistance to local governments of the area in planning for relocation.

10. EARLY NOTICE OF POSSIBLE DISPLACEMENTS

The Commission recommends that Federal and State Governments require their departments and agencies and special districts causing displacement to give advance notice at the earliest practicable time to local units of general government of any construction programs which will displace persons and businesses.

With advance notice, site occupants can arrange for new housing or new business establishments and the relocation agency can survey housing needs and resources and work with displacees who need assistance. Also, in making plans for relocation every relocation agency should be kept informed of the plans of other governmental programs causing displacement within its jurisdiction. Finally, State employment service offices should be notified of pending business displacements so that preparations can be made to ease the employment transition of these people. The centralization of relocation planning and assistance in a single agency in each locality as recommended above would provide machinery for routine coordination of information on displacement plans.

SOCIAL AND ECONOMIC DISPARITIES: INTERGOVERNMENTAL RESPONSES

Social and economic disparities in metropolitan areas create more complex problems for intergovernmental action than the need for particular services, such as water supply and sewage disposal or the need for a uniform and equitable policy, such as that for relocation payments and services. These disparities have far-reaching consequences that can be alleviated only by action at all levels of government moving along several lines of concern at once. The Commission

31 See “Uniform Relocation Assistance," ACIR 1966 State Legislative Program (Wasbington, D.C.: October 1965), pp. 263-274.

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