g.

Should urban county entitlement be denied, wouldn't the alternatives be better?

What are the alternatives? There are two. (1) Every municipality participating would have to compete for discretionary CDBG funds. There are 225 such municipalities in New Jersey alone. It is difficult to imagine more than 50 of them receiving a grant in any given year. Under the prior categorical programs replaced by the CDBG program, only 31 of these 225 municipalities received funding in the last five years of those programs. If we suppose that for some solid reason the number of grants to New Jersey municipalities would greatly increase beyond that 31, consider the inefficiency, duplication, and waste inherent in the assignment of 225 grants as compared to eight through the urban counties. Moreover, consider the fragmentation and lack of coordination inherent in 225 Community Development plans. Also discretionary funding effectively aborts long range planning since it relies on a year by year decision by HUD to fund a given city in competition with all other projects for a given area. Lastly, many smaller jurisdictions, inadequately staffed, would never pursue such a program through sheer inability to deal with the application and implementation process.

(2) The second alternative is to enlarge the number of entitlement cities through a change in the definition of a metro city and leave the balance compete for discretionary funding. Consider the fact that New Jersey now has only 29 entitlement cities. Would any definition change be likely to add more than 32 more (with similar effects nationwide). There are 41 cities in New Jersey with a population between 25,000 and 50,000. Nine of these are already entitled metro cities because they are "central cities" of their SMSA leaving a net increase of 32 entitlement cities with such a definition change. Although this benefit would be appreciated by the newly entitled cities, the remaining 193 municipalities would have to compete for discretionary funds. I've said enough about the liabilities of discretionary grants. It is important to realize that this newly entitled group of cities (however defined) would have to solve its CD problems without any regional cooperation or complement. Moreover, the chances for duplication and increased administrative overhead through the addition of 32 more grants are increased. Less funds would go to actual projects in these 32 municipalities because of such inefficiency. It is also possible that due to a lack of coordination of projects among the 32 affected municipalities, the projects that are implemented will be less effective and more narrow in scope than the problem requires. It is clear that neither alternative to urban county entitlement is desirable.

Conclusion:

The Fact of Urban County Entitlement

Urban counties are real entities with real needs. Moreover, they form part of a metropolitan area whose needs transcend the simple sum of their parts. Urban counties have been the most significant contribution to regional planning and solutions for urban needs in recent memory.

There are weaknesses in the definition of an urban county. Such weaknesses are no argument against entitlement funding of all urban counties. Changes in such a definition must be careful to avoid exposing urban areas to more pitfalls than the present one does.

Urban county community development entitlement programs represent a significant step forward to adequate solutions to complex and costly urban problems. With adequate funding and continued federal support, urban county entitlement may prove to be the turning point in our nation's halting steps to solving the urban crisis. At the least, it will ensure the identification of and impetus to resolve the urban needs of areas that for too long have either ignored or have been unable to deal with such needs.

THE DEPARTMENT OF COMMUNITY AFFAIRS' ROLE IN THE IMPLEMENTATION
OF THE SECTION 8 EXISTING HOUSING PROGRAM:

RECOMMENDATION FOR EXPANSION AND IMPROVEMENT

However, it

Little analysis has been made on the Existing Section 8 Program. is a program of immediate and substantial assistance to eligible tenants which does not require bank financing. It further eliminates the long lead time for construction, the problems of site selection, and the long process of rent-up. In areas where the housing supply is adequate, it is the vehicle that allows tenants access to such housing. In areas of low vacancy rate it can, in tandem with a new construction program, add to the overall supply. Although many local housing authorities have not utilized the Section 8 Existing Program, there were unusual successes for those public housing agencies who did. Many new aggressive state housing agencies or housing agencies linked with social service or welfare administration entered into the housing field for the first time with the Existing Section 8 Program.

The Rental Assistance Program in the New Jersey Department of Community Affairs' (DCA), Division of Housing and Urban Renewal, is a prime example of the opportunity Section 8 Existing gave a relatively new group of housing professionals. Initially DCA applied for an allocation exclusively to meet the needs of the handicapped. This was done because other state and local housing programs, although available to the handicapped, had not made a special outreach to this group.

After demonstrating through the handicapped program that the Section 8 Existing Program could work, DCA applied for allocation of units throughout the State where local public agencies were unwilling or unable to participate. As a result, the Rental Assistance Program within the Department will assume the contractual obligation to provide rental assistance to 1,251 eligible families. The total administrative program will provide more than $15 million dollars over five years and will benefit 1,661 families.

The most significant success of the Rental Assistance Program is having provided housing for more than 200 handicapped individuals and families in ten months of operation. More than 37% of this number were moved from previously substandard dwellings or from institutions or hospitals into standard rental housing of their own choice in the community. Operated on a countywide basis in an initial four county area, eligible tenants are found by advertising and an outreach process to a wide range of community groups. The virtue of requiring eligible applicants to obtain or have the sponsorship of a community social service or neighborhood group has been the development of an invaluable support mechanism for assuring assisted tenants of services wider than mere housing assistance. The social service groups have assisted in the finding of qualified applicants, referred the applicants to other services, helped to prepare the application forms, and even on occasion helped in finding a suitable rental unit.

Involvement of community and social service groups has been the hallmark of this state existing housing program. Initially conceived as a necessary outreach method to locate the eligible handicapped, the use of community groups as sponsors is now being required even in the expanded program no longer limited to the handicapped.

The administration of the existing housing program by a statewide public housing agency provides a delivery system for communities either small, inexperienced, or unable to feasibly operate a housing assistance program on their own. Economics of program operation make it an efficient mechanism for reaching qualified applicants in remote, rural, or dispersed population areas. Perhaps more important, state administration provides the widest possible area for choice of program participants. Eligible participants can move from one county or municipality to another to obtain a better housing opportunity. Eligible participants with Section 8 certification can buy housing anywhere of their choosing assisted by the financial resources of the program.

The Section 8 Existing Program can therefore not only provide freedom of choice in housing, and wider access to available units, the immediacy of the program allows for large numbers of people to be assisted each year.

Recommendations:

It is recommended that the existing housing program be significantly expanded in fiscal 1978 and 1979. However, experience throughout the country with Fair Market Rents (FMR) have demonstrated the need for a more flexible and locally based system of assessing comparable housing costs. At present, these rent maximums are established in Washington by computing adjustments to six year old census data. Use of locally established cost comparables is the norm in many other HUD programs such as FHA and VA mortgage insurance programs and in Section 236, Section 8, new and subsidized rehabilitation, and Section 202. Area offices should be given far more authority by statute or in regulations to set realistic and effective FMR's in existing housing. Especially in the congested Northeast faced with both a housing shortage and unusually high utility costs, FMR's have not been based on actual rents particularly for three and four bedroom units. In fact, three and four bedroom units are often only found in single family homes. Supporting data from rent surveys and from program experience have been submitted to Area Offices, and have been repeatedly sent from Area to Central offices. These requests have not been acted on due to statutory limitations and unresponsiveness from the HUD Central Office.

THE NEED FOR A FEDERAL RESPONSIBILITY FOR

RELOCATION IN SECTION 8 SUBSTANTIAL REHABILITATION

The Section 8 Substantial Rehabilitation Program forms a crucial link in efforts to revitalize neighborhoods. In older cities and suburbs, an aging housing stock is in danger of being squeezed out of existence by high operating costs, deferred maintenance, rent control, and effective code enforcement. Section 8 substantial rehabilitation rental assistance payments provide the necessary source of rental income to cover the costs of financing, rehabilitating and operating the renovated structure. This program is in jeopardy because of the failure of the HCD Act to provide for relocation in such rehabilitation efforts.

Ever since the recognition in the 1960's that urban renewal must not be a process of people removal, federal programs have been provided with the benefits of the federal uniform relocation law to protect individuals dislocated by governmental action. The HCD Act of 1974 makes a specific dispensation for actions taken under Title II of its act. Perhaps because most Section 8 new and rehab projects were expected to be accomplished by private developers financed by private sources, it was felt that governmental action was not necessary. However, HUD cannot institute a wide ranging rehabilitation program which avoids responsibility for the dislocation of people removed from such projects.

Not only is there a moral responsibility but many courts have upheld a legal HUD responsibility to provide relocation. We recommend the legislation be amended to clearly fix on HUD the relocation responsibility for individuals forced to relocate in order to allow a building to be rehabilitated under Section 8. In addition there is a need to require developers to inform occupants of their rights to relocation assistance. It may be possible for HUD to allocate sufficient Section 8 Existing Housing authority to provide relocation for the occupied units in rehabilitation projects. But the obligation of relocation and the effective administration of the program must be the responsibility of HUD itself.

This is a particularly crucial problem ir ew Jersey where strong tenant protection legislation makes eviction difficult and where the Federal uniform standards have been adopted to protect tenant: located by state or local governmental action. Neither the federal government or the private developer nor the negligent landlord can continue to try to avoid the responsibility for their actions. More than 1,522 units are designated for substantial rehabilitation in New Jersey at this time. Tenants presently living in these structures must be provided with Federal relocation assistance.