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IMPLICATIONS OF WATER RESOURCE EXPERIENCE Governmental performance in providing for urban water supply and sewage disposal illustrates a number of significant obstacles that result from the organization of government and the allocation of public responsibilities in metropolitan areas. Local approaches, particularly in the suburbs and in the case of waste disposal, have clearly been inadequate. The availability of significant economies of scale when large water and sewage systems are developed, as well as the frequent desirability of tapping distant sources of water or taking advantage of large natural drainage basins, have prompted many communities to attempt broader solutions to their problems. Many alternatives have been used, ranging from joint undertakings with neighboring communities to contracting with central cities or establishing metropolitan water and sewage districts. Other inherent weaknesses of a local approach have also become evident. Spillover effects, in which inadequate sewage treatment pollutes water for downstream users, have often led to local irresponsibility in the absence of broader governmental approaches. With the growth of vast metropolitan regions and the rise of many conflicting interests among water users, State concern for water resource development and management has increased. Finally, the Federal Government has also emerged in a critical role both in stimulating more adequate local investment and taking a hand in controlling water pollution.

Similar issues emerge from a consideration of other government functions in urban areas. The pattern of local government has many inadequacies for performing urban functions, but many kinds of corrective action are possible. Aside from more comprehensive planning and sharing of local undertakings, the resources of States and the Federal Government need to be brought to bear on urban problems such as water supply and sewage disposal. Specific recommendations for improved performance of water and sewage responsibilities are presented in chapter VII, pages 141-148, within the context of he Commission's overall program for strengthening governmental capabilities to deal with urban problems. Before opening an exploration of governmental reform, however, it is useful to consider a somewhat different type of governmental responsibility-relocation assistance which is the subject of the following chapter.


Chapter IV



The metropolitan areas of the United States are being transformed not only by rapid social change but by vast programs of physical development as well. Unlike earlier periods of city building when the role of government was limited mainly to regulation of private undertakings, the process of urban development today involves major governmental commitments. Cities, States, and the Federal Government have embarked on programs of highway construction, urban renewal, public housing, park development, and the provision of public buildings. Much of this construction activity takes place in heavily populated cities and suburbs where new facilities are needed. As a result, thousands of people and businesses are forced to move every year because of governmental acquisition of property as well as Government enforcement of housing and building codes. All indications are that this pace of displacement will accelerate with increased urbanization and the consequent mounting demands for urban services, and with the growth of Federal, State, and local programs for the renewal of cities. It has been estimated, for example, that between 1964 and 1972 the federally aided urban renewal and highway programs alone will uproot 825,000 families and individuals and 135,000 business and nonprofit organizations. 1

As the magnitude of displacement has increased in recent years, there has been growing concern over the impact on those forced to move-concern over whether these "displacees” are being forced to bear a disproportionate share of the cost of public works programs that need the land they occupy. There is special concern for the poor and the elderly and for small businesses. These individuals and businesses seem most often to be in the way of property-taking programs and are least capable of coping with the adjustments of a forced move.

President Johnson, in his 1964 housing message to the Congress, commented on the human costs of relocation in specific reference to urban renewal:

Despite existing programs assisting families and persons displaced by urban renewal projects, the human cost of relocation remains a serious and difficult problem.

The vast majority of those displaced by urban renewal and public housing have relocated in better and standard housing, but some have not. For most, the cost of improved housing has been an unsought burden. For some, the inconvenience of displacement has meant only another slum dwelling and the likelihood of repeating this experience.

*U.S. Congress, House, study of Compensation and Assistance for Persons Affected by Real Property Acquisition in Federal and Federally Assisted Programs, printed for use of the Committee on Public Works, 88th Cong., 2d sess., 1964, p. 258.

* * * Similarly, small businessmen-especially those in leased premises, often incur economic loss and hardship as a result of displacement by urban renewal or public housing which is not offset by current compensation practices and moving expense reimbursements.?

Government has not been oblivious to the relocation problem, as the President's statement indicates. At all levels-Federal, State, and local—it has responded to some degree by providing relocation payments and other assistance to displacees. But these provisions are inconsistent-among programs of the same level of government and among the different levels. Also, serious questions have been raised about the equity and adequacy of many of them. One consequence sometimes has been to slow down necessary governmental programs that require the taking of property. Relocation has been called, for example, the "Achilles heel of urban renewal.

The relocation problem has many intergovernmental implications. The two major programs causing displacement are the federally aided urban renewal and highway programs—the first carried out by local governments, and the second by State governments but to a considerable extent within urban areas. Urban areas are the focus of most of the displacement problem, and the inconsistencies and inadequacies in relocation provisions are aggravated by the fact that many different displacing programs of different levels of government operate side by side within the same community.

In addition, efforts to organize effective and humane programs of relocation are hampered by poor coordination between the different communities of metropolitan areas. The housing market within which displaced people must look for other quarters typically extends across local boundaries to encompass the larger metropolitan area. Similiary, businesses that need commercial or industrial space for relocation may best satisfy their needs in some other part of the metropolitan area. Unless the different local governments of any area cooperate in planning for relocation, the choices available to displaced people and businesses may be unduly limited and the hardships of relocation compounded.

Broader issues of intergovernmental relations are involved in relocation questions. The pattern of local government and finance in metropolitan areas often encourages local efforts to exclude low-cost housing and thus to limit the freedom of movement of many people who are forced by government action to leave the places where they have been living. Social and economic disparities noted earlier tend to sharpen conflicts between local communities in metropolitan areas in ways that interfere with relocation efforts. Further, the limitations of a purely local perspective can be as unfortunate for relocation as for water supply and sewage disposal. Just as provincial water and sewage policies impose significant burdens on neighboring communities, so policies of excluding low-cost housing create hardships for people and governments elsewhere in the metropolitan area.

Relocation, like water supply, is widely acknowledged as a major governmental concern in metropolitan areas. As such, it puts the governmental arrangements in these areas to a further test. Again, inadequacies in intergovernmental relations emerge as major obstacles to more effective performance. An examination of these weaknesses leads to no simple prescription for curing the ills of relocation, but it does reveal a great deal about why the governmental system breaks down in coping with this contemporary problem and what can be done to strengthen it.

* Congressional Record, 88th Cong., 2d sess., 1964, vol. 110, No. 13, p. 1047.

GOVERNMENTAL RESPONSIBILITY FOR RELOCATION The question of governmental responsibility for relocation arises out of governmental authority to acquire private property against the owner's will. This authority, called the power of eminent domain, is provided in Federal and State constitutions and may be exercised only when the property is needed for a public purpose and “just compensation" is paid to the owner. The courts traditionally measure “just compensation" in terms of the market value of the real property taken.

Unlike the property owner in a transaction between two private parties, the owner in an eminent domain case is not in a position to withhold his property until he feels satisfied that he will be compensated for the full costs of giving it up—including not only the fair market value of the real property being taken, but also the costs of moving personal property and other incidental damages. He is forced to give up his property. Therefore, if he is to be "made whole” economically, he must rely on a judicial construction of “just compensation" sufficiently broad to cover the full costs of giving up his property and relocating, or on legislative adoption of a policy of compensating for incidental damages.

JUDICIAL PRECEDENTS Federal and State constitutions do not set forth any rules or techniques for implementing the guarantee of just compensation for private property taken for public use. Never in the Congress, and only lately in some States, have attempts been made to establish broad legislative policies on the subject; consequently, the courts have assumed the task of developing basic principles for measuring just compensation. They early adopted the concept that just compensation should be measured in terms of market value. Gen

Generally, this has been construed to be the cash price agreed on at a voluntary sale between an owner willing but not required to sell and a buyer willing but not required to buy.

The majority of the courts have held that there is no obligation to pay for losses or damages suffered by property owners and tenants as a direct result of land acquisition programs (for example, uselessness of equipment tailor made for a particular building). The courts have held that these damages are not reflected in the market value of the real property the government acquires, or are too speculative. In the case of a lessee, the additional argument is made that since he must stand the cost of removal at the end of his term, the taking does not cause him to incur moving expenses but only changes the time when these expenses occur. As a consequence, the courts generally have held that owners and tenants have no constitutional right to compensation for such items as good will, business interruption, costs of mov

* State of California, California Law Revision Commission, The Reimbursement for Noring Erpenses When Property 18 Acquired for Public Use (October 1960).

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