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ment because of short amortization schedules. In addition, his age makes him a poorer loan risk. Government's only effective alternative to relocating the elderly businessman successfully as a self-sustaining person—businessman or employee—is to give him public assistance. The personal and psychological consequences of depriving an independent businessman of his livelihood and putting him on public welfare can be imagined.
Adding to the relocation difficulties of displaced businesses is the economic hardship they may suffer in the critical period between announcement and start of an urban renewal project. The announcement creates a “wet blanket” effect which depresses the area. Tenants are anxious to move out, thus decreasing the area's attractiveness and lowering the income of property owners. During demolition and construction, businessmen who remain in the area lose income. They sustain further losses during the actual period of packing, moving, and resettling at a new location. Finally, adjustment to the new location requires at least 6 months and perhaps as long as the "critical 2 years” during which survival of new businesses is most in doubt.
Frequently, businesses would like to return to the renewed area but face appalling obstacles. Many difficulties of the first move out of the renewal area must be repeated. Rents in the renewal area are invariably higher and space is less likely to be suitable to their needs. Finally, small commercial establishments, which relied originally on a neighborhood trade, now find that their market has dispersed.
Prof. William N. Kinnard, Jr., summarized recent findings on the problems of business relocation : 29
1. Relocation payments are useful but hardly sufficient to compensate the businessman for all losses involved.
2. Some affected businesses are marginal or even submarginal and could not be saved under any circumstances. Even so, many that discontinue or disappear could have survived in their previous locations or, under conditions of voluntary relocation, in other locations as well.
3. Compensation for real property solely in terms of the prices and rentals paid in the old location fails to recognize that the public program, by removing some of the supply of business space and creating a large volume of demand at one time, changes the market confronting the businessman who is forced to relocate.
4. Businesses that disappear or discontinue often involve a loss of livelihood for the owner-operator and his employees, particularly the older ones.
5. Businessmen need loans as well as grants to see them through the period of interrupted income.
6. A large proportion of businessmen and their employees may remain without income for a long time. They often must be supported by public assistance and need the help of social agencies.
7. A very large share of the displaced businesses are tenants who are in no way benefited by compensation for real property takings.
GOVERNMENT RELOCATION ASSISTANCE
The public programs that displace people and businesses make varying provisions for relocation aid. Tables 13 and 14 summarize the pay
Select Subcommittee on Real Property Acquisition, Hearings, op. cit., pp. 309-311.
TABLE 13.-Statutory maximum relocation payments authorized for Federal and federally aided programs
Department or program
When individual or family is displaced from
When displaced business terminates (does
Urban renewal, public housing, Moving expenses and losses on disposition of $3,000 (almost exclusively for losses on dis- Loss of property only to $3,000; or moving
neighborhood facilities, open personal property to $200 for anyone, plus position of personal property) plus an addi- expenses and loss of property combined to
for low and moderate income families and annual net earnings of less than $10,000 per without limit; plus additional flat $2,500
Same as urban renewal
Same as urban renewal.
$3,000 (moving expenses only).
"Fair and reasonable costs" 2 (moving ex-
penses, costs in sea for replacement
property, costs to obtain financing, and closing costs for replacement property).
closing costs for replacement property).
1 This is the only program among those listed in which relocation expenses are not paid
2 Statute limits total payment for all relocation claims pertaining to a parcel of real property to 25 percent of its fair market value. Select Subcommittee on Real Property Acquisition staff found no cases in which it was necessary to reduce a payment because
of the statutory limitation; however, current programs of these agencies generally cause
Source: Study of Compensation and Assistance, op. cit., p. 101 and Public Law 89-117, approved Aug. 10, 1965.
TABLE 14.-Statutory requirements for relocation assistance and assurance of standard housing in Federal and federally aided programs
Department or program
Assurance of standard housing
Same as for persons
Urban renewal, public housing, Secretary of DHUD issues regulations requiring a re
neighborhood facilities, open location assistance program including measures to
(1) determine needs of families and individuals for
Mass transportation and commun- None..
Secretary of Commerce requires State highway de
partments to give satisfactory assurance that reloca-
cept National Park Service);
Authorized to advise and cooperate in readjustment
of population displaced by its projects and to cooperate with Federal, State, and local agencies to that end.
Source: Urban renewal-Housing Act of 1949, as amended through Sept. 2, 1964, and Housing Act of 1964, Public Law 88-560, approved Sept. 2, 1964, Public Law 89-117, approved
ments and assistance available for Federal and federally aided prograns. Urban renewal and public housing have gone further than any other programs in making Federal funds available to compensate people for the costs of relocation, and in requiring local governments using the program to help displaced families, individuals, and businesses find new quarters at prices they can afford. Relocating people in sound housing is a particularly appropriate concern in the case of urban renewal, since a major statutory goal of the Federal program is the “realization as soon as feasible of the goal of a decent home and a suitable living environment for every American family.” 30
The Federal aid highway program, the second major source of displacement, provides considerably less assurance that displaced individuals and families will be spared hardship and will be made whole.” Unlike urban renewal, no assurance is required of responsible public officials to show that there is a “feasible method” of relocating families and individuals and an adequate supply of standard housing available or being made available and within their means. An advisory service is required, but it applies only to families, not individuals and businesses, and is far short of the requirement of the Housing Act for a positive relocation assistance program, applicable to all three categories of displacees. Relocation payments are authorized, not required, with the result that in 17 States displacees are not entitled to payments under the Federal act, including such urbanized States as California, Illinois, and Texas. Payments to businesses are limited to a maximum of $3,000 for expenses of moving up to 50 miles and may not include payment for direct loss of personal property. Finally, the cost of administering the relocation program qualifies for reimbursement by the Federal Government as part of the project cost, that is 90 percent for interstate highways and 50 percent for primarysecondary highways.
The many inconsistencies in relocation aid lead to unequal treatment for people in urban areas where different Federal and Federal grantin-aid programs displace neighboring properties. A homeowner whose property is taken for a federally aided urban renewal project is entitled to moving costs up to $200. His neighbor, whose property is taken for a federally aided highway program, is entitled to $200 only if the State has authorized it. Among the 33 States that have done so, an appreciable number have not authorized payments up to the Federal limit, or not for tenants. A third homeowner in the same neighborhood may receive nothing beyond market value if his property is taken by the General Services Administration for a Federal office building. Inconsistency in payment of business moving expenses is even greater, since the Federal Aid Highway Act allows business moving expenses only up to $3,000, while displacement by a federally aided urban renewal project entitles a business owner full cost of moving expenses. Displacement by GSA would be without compensation for moving costs. Advisory assistance extended under Federal urban renewal is the most comprehensive. The Federal highway program provides no service to businesses and individuals, and only TVA among other Federal programs is required to give any kind of advisory help.
* 42 U.S.C.A. 1441 (Housing Act of 1949).
Varying State and local practices lead to still further inequalities in relocation in different parts of the country and even within individual States and communities. Connecticut, Massachusetts, New York, and Pennsylvania contribute to the local share of urban renewal costs, including the cost of relocation administration. Relocation expenses, however, are 100 percent federally financed. In New York, the Staté reviews local urban renewal relocation plans and performance in determining eligibility for State contributions to urban renewal. A few States also provide technical assistance for local renewal programs, including assistance in techniques of relocation. Several States have general statutes requiring relocation payments to people and businesses displaced by any property takings by State or local authorities: among them are Maryland, Wisconsin, Pennsylvania, Minnesota, and Tennessee. A few other States have established
. study commissions to review eminent domain procedures; the work of these commissions may well lead to additional comprehensive State legislation affecting relocation payments and procedures.
At the local level, about half the cities that reported displacements for public buildings in response to the ACIR-CM survey paid moving expenses for both families and businesses. Almost all offer relocation advisory service to people and businesses displaced for public buildings. Fewer localities offer relocation aid to people displaced by code enforcement. Only 5 of the 69 cities reporting code enforcement displacement in the ACIR-CM survey paid for moving expenses and property losses. Many more provide some form of advisory assistance.
Cities in the ACIR-CM survey were asked their views on the desirability of uniformity. A typical response was: “The reason for uniform practices in relocation payment and service among agencies of all three levels of government seems readily apparent. Of the 100 cities responding, 86 answered this question:
* * * 71 favored uniform practices in relocation payments and services among all local agencies.
* * * 70 favored uniformity among all state agencies causing displacement. * * * 74 favored uniformity among all Federal agencies causing displacement.
* * 72 favored uniformity among agencies of all three levels of government causing displacement.
Adding emphasis to these opinions, a substantial number of cities mentioned "uniformity" when asked what actions, at each of the levels, would contribute to more effective resolution of their relocation problems. A number described the impact of nonuniformity on citizens forced to move. Chicago commented, for example:
Families on one side of a street may be displaced by urban renewal and obtain numerous services, whereas families on the other side of the same street may be displaced by an expressway and receive relatively few services. In the one case a relocation payment is processed; in the other there is no relocation payment.