tivities during the current year of the CDP, the community would receive a grant reservation for the following year. The community would then have an assurance that it could follow through with activities started the first or current year.

In order to make this concept work, NAHRO is recommending that Congress authorize funds on a three-year basis and appropriate money for CDP on a twoyear basis, including the current year and the following year, to assure continuity at both the federal and local level.

The basic annual grant to the community would cover two-thirds of the cost of budgeted CDP activities, or threefourths of the cost for communities or jurisdictions of less than 50,000 population. The local share could continue to be covered, in whole or in part, by investments in new or improved facilities and services related to the CDP.

In addition to covering budgeted activities, the grant would include a 10 percent override or bonus payment to carry out other activities necessary to the success of the CDP. For example, the community might want to provide day care centers or finance the design of a housing project being sponsored by a private, nonprofit community organization.

The community could also use CDP loan funds for making low-interest loans for various purposes, such as interim financing of schools and other "supporting" facilities for which permanent financing will become available at a later time. The interim financing of supporting facilities could be a critically important innovation. Past experience with urban renewal shows that such facilities are often difficult to program in with other scheduled activities because of such uncertainties as the passage of school bond referendums or local debt capacity.

Among other steps NAHRO is recommending to implement the CDP are: "set asides" of federally assisted housing commitments to insure that moderately priced housing is available when needed and an incentive grant equal to 5 percent of certain federal grants-in-aid for construction of supporting facilities.

Administration: Unlike the model cities and poverty programs, CDP would not require a new governmental structure over an existing structure. The local governing body could serve as its own CDP

agency or designate existing agencies, such as the local renewal agency, to administer the entire program or pertinent parts of it. In other words, the community determines its own CDP organizational structure.

For example, the CDP application, as well as the continuing forecast, budget, and evaluation process, could be handled by the general government having jurisdiction, by any designated unit of local government, or by a designated agency where the CDP covers more than one general jurisdiction. The agency designated to make a CDP application could, of course, contract with other agencies and entities qualified and legally capable of planning and executing any of the activities called for in the CDP.

NAHRO also recommends as eligible CDP-assisted agencies local development corporations. Such corporations would be authorized, under law, to accept grants, gifts, and donations; borrow money; and issue stock. They would use the proceeds to acquire property for development, redevelopment, rehabilitation, and conservation in accordance with the CDP plan and for making loans for industrial, commercial, or residential purposes related to CDP.

The requirements of existing civil rights statutes and the recent Uniform Relocation Assistance and Property Acquisition Policies Act of 1970 would apply to CDP and all related activities.

Comprehensive Housing Assistance Program

The comprehensive housing assistance program recommended by NAHRO would replace the existing collection of fragmented housing programs, each with its arbitrary restraints on design, income limits, and construction costs. The purpose of the new program is to simplify and expand the effort to house all Americans who cannot now afford adequate housing. The test for those who

would benefit from the new program would not be solely one of income but would take into account local housing costs and availability of decent, moderately-priced housing in the private

market.

New Subsidy Formula: The key element in this NAHRO recommendation is a variable housing assistance payment that would cover the difference between the cost of providing decent, moderatelypriced housing and what a family or individual could afford to pay for such housing. The single subsidy mechanism could apply to rental housing, housing for sale, or cooperative housing, depending on individual choice and local conditions.

The subsidy would go to the housing sponsor or mortgagor, not the individual. NAHRO believes this method of payment best assures the production of critically short, moderately-priced housing. It also makes the housing subsidy program much easier to administer by avoiding some of the complicated problems associated with other government aid programs to the individual, such as welfare or income supplementation.

Sponsoring Agencies: The NAHRO proposal recognizes the experience and competence of existing housing agencies, public and private. Among those who could sponsor housing eligible for housing assistance payments would be local housing authorities, regional or state housing agencies, nonprofit and limited dividend corporations, cooperatives, and similar groups.

Any family who could not afford comparable housing in the private market would be eligible for an assisted dwelling. Occupancy would generally be on a first-come, first-served basis, across a broad range of incomes. However, a portion of the national housing assistance payment funds would be reserved for low-income families requiring deep assistance and each project would be required to include occupancy by such families. The resulting income mix should put an end to the all too common phenomenon of having assisted housing projects develop into social, economic, and racial ghettos. Under the basic assistance plan, a local housing authority could help meet community housing

needs without being restricted to serving only the very poor. And, for the first time, the nonprofit sponsor could serve families on the lower rungs of the economic ladder. Both could also design and manage housing for the elderly and handicapped and the needy, single, nonelderly person.

Financing: The NAHRO recommendation calls for flexibility in the financing of assisted housing. It would, for example, permit the use of:

privately secured, market-rate insured mortgages;

tax-exempt bonds issued by local housing authorities;

state and local mortgage loan programs.

Under the NAHRO proposal, local housing authorities or other. public agencies would be able to seek insured private mortgages or, with approval of the Department of Housing and Urban Development, a local housing authority could use its bond issuing capability to provide development funds for other qualified sponsors, thus acting as a local lending agency for publicly assisted housing.

The NAHRO recommendation envisions a continuation of the public housing turnkey and leasing programs.

Mortgage and cost limitations would be based on the true cost of building reasonably designed housing on a particular site, with periodic adjustments to reflect changing conditions.

Any rental or cooperative project financed through any of the three mechanisms mentioned above would be eligible for a federal housing assistance contract guaranteeing payment of the entire deficit-the difference between total costs and total revenues attributable to the project. In addition to debt service, total costs would include operating and maintenance expenses, expenses for approved tenant services programs, and the payment of full real estate taxes.

Included as revenues would be rents or cooperative charges, which would be based on locally established rent-to-income ratios. These ratios, in turn, would depend on local spending patterns, family size, and income level, with an anticipated range of from 15 to 25 percent of family income for housing; federal legislation would contain only these floor

and ceiling ratios.

The NAHRO recommendation calls for a standard definition of income, similar to the definition in the 1970 housing act. Sponsors would recertify income of residents periodically for purposes of making rental or mortgage adjustments. The housing assistance contract, itself, would provide for annual adjustments in payments; increased rentals would mean a decreased subsidy; an increase in operating costs would mean an increase in the federal payment, etc.

In order to preserve and use the existing housing stock to maximum benefit, NAHRO recommends earmarking 25 percent of the housing assistance contract authority for use in existing housing, whether rehabilitated, leased, or purchased by an eligible sponsor.

Incentive Grants: The NAHRO proprosal includes incentive grants covering two-thirds of the administrative costs for three years for local housing authorities and nonprofit and limited dividend housing sponsors that undertake cooperative administration and management covering at least 1000 federally-assisted housing units and a similar grant to any community of over 50,000 population with at least 1000 assisted housing units that establishes a community-wide housing planning and housing coordination function in conjunction with a Community Development Program.

To encourage housing development in coordination with comprehensive regional and state-wide planning, the NAHRO proposal would authorize an incentive grant of two-thirds of annual costs, annually for three years, to any state undertaking the preparation or assisting local political jurisdictions or agencies in undertaking the preparation of long-range programs for the development of housing in coordination with regional and statewide planning and Community Development Programs.

Finally, in order to move toward fulfillment of the goal of a decent home for every American, the NAHRO proposal would include a provision that, two years after the passage of the act incorporating the new housing assistance proposals, if the Secretary of HUD determines that there are any areas of the country where a substantial number of families require

housing assistance and no agency or sponsor is providing such assistance, he may act as sponsor, or designate a sponsor to develop housing to meet this need. NAHRO believes that this approach to meeting housing needs has great advantages.

Each project could serve the full range of incomes of those who require housing assistance, but with a commitment to serve a fixed portion of those in the lowest income ranges.

Communities that have resisted building government-assisted housing might be less resistant to do so if they knew the housing would pay full property taxes. In addition, the community would be eligible for grants for public services, to defray extra service costs.

Local housing sponsors will know that the assistance payment will cover all deficits and will, therefore, be able to offer all necessary management and service programs.

The simplicity of the program should attract builders and developers, particularly because cost limits will be based on local conditions with which they are most familiar.

Most important, NAHRO is recommending what would be the first national program to ensure that all citizens could obtain decent housing.