Merely relocating in a similar building on another site may not be feasible for many small businesses because of the importance of their neighborhood trade. To help owners of such businesses make a satisfactory adjustment requires heavy emphasis on advice, counselling, 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. Thus, governmental assumption of responsibility for helping to relocate displaced businesses and helping owners adjust to forced change should go beyond mere moving of a business establishment.

Beyond advisory assistance, positive measures to aid displaced people and businesses can be taken under other public programs. An important part of the advisory service, in fact, is to make people aware of other programs that can help them. And a parallel effort is necessary to review relevant programs and make appropriate modifications to that they can provide necessary help. For example, the Commission has recommended extending authorizations for Small Business Administration "disaster loans" to make them available to small business concerns adversely affected by property takings to all levels of government. Currently such loans are authorized only for firms affected by Federal and federally aided programs. Further, they are now available only for firms whose property is actually taken; clearance projects, however, may remove a store's patronage without actually displacing the business.

In the case of displaced families and individuals, the greatest need is to expand the supply of low-cost housing in sound condition. Here the programs that exist generally require the active participation of local governments-to sponsor public housing or to help nonprofit groups to build middle-income housing by making necessary zoning changes, for example. In addition to Federal housing programs, about 15 States provide financing for low-rent housing or housing for veterans or the elderly. The need here is to encourage more widespread local use of programs that already exist and to stimulate additional State programs where they are needed. A useful first step would be to require in Federal legislation that State and local governments administering Federal grant-in-aid programs assure the availabiliy of an adequate supply of standard housing at reasonable cost before proceeding with any property acquisition that displaces people. Similar provisions are now embodied in Federal urban renewal legislation. A complementary measure at the State level would take the form of legislation requiring State and local agencies to assure the availability of suitable and sufficient relocation housing before proceeding with property acquisition that displaces people.

INTERGOVERNMENTAL COMPETITION AND METROPOLITAN HOUSING

In metropolitan areas the housing market is areawide, subject to the limits of convenient traveltime to jobs and shopping and to individual neighborhood or community preferences. The most effective

use of this market for residential relocation requires a metropolitan perspective in planning for relocation as well as cooperation among local government units to provide needed relocation housing throughout the area. In practice, metropolitan approaches to relocation and cooperation in housing policies are usually lacking.

A recent study of metropolitan planning has noted the need for metropolitan approaches to relocation planning:

Local renewal authorities must furnish evidence that decent housing is available for relocation within the metropolitan area, but the reports of local authorities are often poor substitutes for a study of the metropolitanwide housing market. Various local agencies may each lay claim to the same vacancies as resources for relocation; vacant units within one locality may be counted as relocation reserves in the reports of several different renewal authorities. In addition, unless the total metropolitan housing demand is taken into consideration, a simple count of vacancies may fail to reveal that families other than those to be displaced by urban renewal are likely to occupy them. *** Metropolitan housing studies, which should be conducted as part of the work program of a metropolitan planning agency, would make possible a more realistic overall assessment of an area's housing resources, and would furnish the basis for a comprehensive attack on the problems of slums. Particular renewal projects could be reviewed in the light of such studies, and modifications could be indicated where the metropolitan picture reveals inadequacies in the supply of relocation housing."

Metropolitan planning agencies can appropriately undertake such studies, and Federal aid is available to them for this purpose. In addition, localities undertaking comunity renewal programs are required to include consideration of metropolitan factors related to relocation.

The problem of securing cooperation with neighboring localities is still more fundamental and reveals serious obstacles to effective relocation. The structure of local government and finance in metropolitan areas tends to penalize communities where poor people live. Low-income families need many services; yet they contribute relatively little in the way of local taxes. In particular, low-income housing generally does not yield sufficient property taxes to cover the cost of educating school children who live there and providing other necessary public services. Since local property taxes continue to serve as the mainstay of municipal finance, many communities attempt to use land development controls (zoning, subdivision regulations, building codes) to discourage the construction of low-cost housing. Instead, they compete for "clean" industry, shopping centers, and high-value housing, all of which typically yield a property tax surplus over the service expenses they necessitate. These local policies tend to raise the cost of new housing, contrary to Federal housing policy which has long attempted to stimulate the production of moderate-cost housing. Further, localities pursuing these policies are not likely to make much use of public housing and similar programs to produce housing at moderate cost.

Joint Center for Urban Studies of Massachusetts Institute of Technology and Harvard University, The Effectiveness of Metropolitan Planning, prepared in cooperation with the Subcommittee on Intergovernmental Relations of the Committee on Government Operations, U.S. Senate (Washington: Government Printing Office, 1964), p. 13.

Thus considerations of local finance join with social prejudice to produce policies that reinforce the social and economic disparities noted earlier. Families displaced from low-cost housing in the older cities often confront obstacles created by restrictive zoning practices, failure to authorize public housing, and other public and private actions in the suburbs that restrict housing opportunities and retard freedom of residential movement.50

Cities covered in the ACIR-CM survey were asked, "What actions, if any, by other local governments in your area (including counties and neighboring municipalities) would contribute to more effective handling of your relocation problems?" Their responses indicated the prevalence of restrictive local housing, zoning, and building code policies:

(We need) more low income housing in suburbs.—Buffalo.

If they [neighboring municipalities] would adopt a fair housing ordinance in their communities.-Cleveland.

Overall consideration of housing problems in the bay area would be helpful. The development of a comprehensive program for meeting the needs on an areawide basis would enable consideration of such factors as land costs, employment opportunities, etc., in relation to the various sections of the bay area.-San Francisco.

The suburban areas, because of present real estate practices, or because of the economics of the metropolitan market, are pretty much closed to displaced families in the District of Columbia *** [we need] a fair housing ordinance [in the suburbs], such as that now in effect in the District of Columbia.—Washington, D.C.

[County and neighboring municipalities action needed]: Making information available through uniform reports on additions to the housing supply and any deletions from the same supply together with information on the vacancy ratio and rate of turnover ***. Through local building and housing codes and zoning ordinances which were created to provide varying types of housing in terms of price, size, and density.-Minneapolis.

Regional centralized service and technical assistance in prediction of housing supply and housing requirements to those displaced.-Oakland.

Creation of low and middle income housing and open housing policy [in suburbs].-Rochester, N.Y.

The county should adopt suitable building and minimum housing codes.Wichita.

Zone land for new housing to allow construction of moderate income rental and sales housing.-Hartford.

INTERGOVERNMENTAL ACTION

Many Federal and State measures would help enlarge freedom of residential movement in metropolitan areas and add to the general supply of low-cost housing, despite the prevalence of interlocal competition to exclude the poor and attract tax resources. The Commission has recommended the enactment of State legislation to restrict zoning authority in metropolitan areas to larger municipalities and to county government and to require that zoning authority be exercised to permit a wide range of housing prices within each jurisdiction; enactment by States of legislation authorizing adoption of uniform housing,

50 See Bernard J. Frieden, op. cit.

building, subdivision, and zoning codes in metropolitan areas; amendments to Federal and State housing statutes to diversify and disperse low-income housing, including more frequent use of existing units for public housing, subsidies of rents in existing housing, and financial aids to private nonprofit organizations for provisions of low-rent housing; encouragement of State-Federal cooperation in administering laws banning discrimination in housing; and State enactment of legislation authorizing counties in metropolitan areas to provide urban renewal and public housing services to unincorporated areas and small municipalities. These measures for a general increase in housing opportunities in metropolitan areas would contribute measurably to meeting the basic relocation problem-adequate housing.

A more basic approach would seek to moderate the interlocal competition that restricts housing opportunities by removing financial incentives for communities to exclude the poor. This approach would attempt to equalize local governmental finances and thus to alleviate tax burdens for communities where the poor are located. For these purposes, the Commission has recommended that States review their present systems of grants, shared taxes, and local tax authorizations to remove features that aggravate differences in local fiscal capacity to deal with service requirements; that States finance at least half the cost of general assistance welfare programs; that States consider using grant funds to equalize local property tax loads among local jurisdictions in metropolitan areas; and that the Federal Government recognize variations in local fiscal capacity in making grants to local governments.

In the area of Federal policy, the Commission has supported measures now before Congress, S. 1681, the "Uniform Relocation Act of 1965" and similar provisions included as title VII of the Intergovernmental Cooperation Act of 1966. These bills would close an important gap by requiring heads of Federal agencies to make relocation payments and to provide advisory assistance in direct Federal programs that cause displacement, such as those of GSA, the Post Office Department, and the Defense Department. The same set of requirements for payments and assistance would apply to federally assisted programs conducted by State and local governments. Further, the bills would require State and local governments administering Federal grant-in-aid programs and Federal agencies undertaking projects to assure the availability of standard relocation housing before proceeding with any property acquisition that displaces people, thus extending a statutory requirement that now applies only to urban renewal and public housing. The bill also provides full Federal reimbursement for State and local relocation payments up to $25,000 in federally aided programs, and on a formula cost-sharing basis for any expenses above $25,000 per displacement.

Specific recommendations to achieve greater uniformity in relocation policy are presented in chapter VII, pages 149-154, within the context of the Commission's overall program for equipping governments to deal with urban development problems.