We feel that Section 23 (a) (2) frustrates the placement of leased housing where it is very much needed and thus endorse the Administration's 1970 provision removing this roadblock. I would like to address some comments to the Housing and Urban Development Act of 1971 (H.R. 9688) because it contains many new and thoughtful concepts in the housing area. We state our strong support for Title III of that Act providing funding for improved counseling and management activities in federally assisted housing. As more and more concerned people in the field are beginning to realize, we must give real attention to the increasing management problems and, even more important, channel funds in that direction. We applaud the mechanism of utilizing portions of the HUD-FHA insurance premium toward that end. In that regard, we believe that Section 302 (a) should be amended to make clear that all of the mortgage insurance premium charged by HUD-FHA during the construction period and during the first year of occupancy should be devoted to improved management and tenant counseling services. Let us make clear that we support Title III as an addition to, not a replacement of, the tenant counseling provisions in Section 237 of the National Housing Act. We state our general support of Title II of that Act providing for grants to neighborhood preservation programs and a new mortgage insurance program to encourage preservation of basicly sound structures located in declining neighborhoods. Under the new program, HUD-FHA will insure 20-year mortgages for 97 per cent of the value of the property at a subsidized 6 per cent rate. The Act makes clear that this is not a rehabilitation program as such but is directed more toward the refinancing of mortgages on existing standard property. Although we approve the basic concept, we believe that a lower subsidized rate than per cent might be necessary if the rent on the property is to remain the same after refinancing as prior to it, as now required in the Act. We next direct ourselves to Title V of the Act concerning housing bloc grants to state and metropolitan housing agencies. These agencies would be given certain crucial powers, including the power to allocate Section 235, 236, public housing and rent supplement funds within their respective jurisdictions. We urge a thorough examination of this approach to assure that we are not creating just antother housing bureaucracy. Even more important, we want to assure that these valuable allocations will not be given out on the basis of local political considerations. Although some believe that political considerations are taken into account by HUD in making subsidy allocations today, we feel that the proposed transfer of this authority to a local political unit could produce a far more dangerous situation. We conclude with the following general remarks. First, we commend Secretary Romney and his HUD staff for the efforts that they have made in administering the federal subsidy programs. During this fiscal year, these programs will account for nearly 600,000 units an amazing total in comparison with the fewer than 1,000,000 units created by the public housing program since its conception in 1937. As prevously emphasied these programs are overlapping, complicated and new; yet the record indicates that HUD has used these programs as excellent production tools. We feel that much of the processing difficulties HUD faces arises from lack of sufficient staff and we urge increased funding in that direction. However, HUD-FHA will never have enough staff if its personnel feel that their role is to "redo" and not "review" applications submitted to them. In this regard, we feel that knowledgeable housing consultants serve a real purpose in presenting applications to HUD-FHA that do not require the meticulous massaging done in some offices. Finally, AIHC would like to reiterate the basic proposition that for now and the foreseeable future, if low-and moderate-income families are to be housed, there must be some subsidization. We have all read the warnings of the President's Third Annual Report on the escalating costs of such subsidization: that by 1978 the federal government will be paying out at least $7.5 billion annually for subsidy. Frankly, Mr. Chairman, this does not frighten us. We do not think the world will come to an end when in 1975 we conservatively will have a federal budget of about $325 billion, if approximately 2 per cent of that amount is spent on housing. We have heard no clarion call of alarm when in today's budget of $200 billion, approximately the same percentage is spent on farm subsidies. Our only complaint about this projection is that it is too low to meet our housing f needs. ་་ The CHAIRMAN. Thank you very much, Mr. Golz. You have given us a thought-provoking statement and I'm sure it will be helpful to us in the consideration of the new legislation. Mr. GoLz. Thank you very much. The CHAIRMAN. Thank you, sir. Mr. GoLz. Thank you, Mr. Chairman. The CHAIRMAN. Now, this finishes the hearings for today and the committee will resume tomorrow at 10 o'clock at which time we have a rather heavy program. We stand adjourned at this time until 10 o'clock tomorrow. (Thereupon, at 11:30 a.m., the subcommittee was recessed to reconvene at 10 a.m. on Thursday, September 16, 1971.) 1971 HOUSING AND URBAN DEVELOPMENT LEGISLATION THURSDAY, SEPTEMBER 16, 1971 U.S. SENATE, COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, Washington, D.C. The subcommittee met, pursuant to recess, at 10:15 a.m., in room 5302, New Senate Office Building, Senator John Sparkman (chairman of the committee) presiding. Present: Senators Sparkman and Cranston. The CHAIRMAN. Let the committee come to order, please. I apologize for being late and I'm sure that Senator Ribicoff understands how these situations arise when we have constituents present. I had quite a group of people from Alabama up here working on a very important question and both Senator Allen and I were tied up in it. Both of us were late getting to our respective posts. Senator Ribicoff, we are very glad to have you this morning. The CHAIRMAN. We shall be pleased to hear from you at this time. Senator RIBICOFF. I would ask unanimous consent that the full text of my statement be included in the record as read and I will then confine myself to the highlights of my statement. The CHAIRMAN. That will be done. Your full statement will be in the record and you may present it as you see fit. Senator CRANSTON. Mr. Chairman and Senator Ribicoff, before you begin I have to leave, unfortunately, because of the pending business on the floor. I wanted very much to be present at Senator Ribicoff's testimony because I feel that he has been very creative in the particular suggestions he is making to this committee today. I wholeheartedly support what he is suggesting. I am cosponsor of this bill and I would like, also, permission to insert a statement in the record supplementing these thoughts. The CHAIRMAN. Very well. That will be done. (Senator Cranston's statement is inserted at this point as though read :) Senator CRANSTON. I would like to commend Senator Ribicoff for the courage he has shown in dealing with the growing economic and racial isolation in this country. I am pleased to join with him as a cosponsor of the Government Facilities Location Act. If we as a Nation are serious about keeping people off welfare rolls and on payrolls, we must make sure that jobs are in easy access of those seeking employment. As long as low-income people are at one end of town and good paying jobs are at the other, we will never get the two together. The U.S. Civil Rights Commission in its study of Federal installations demonstrated the great hardships imposed on minority employees when Government facilities are moved from center cities to outlying suburbs. The study found that blacks who remained with Federal agencies after such moves had to travel much greater distances over longer periods of time than did their white counterparts. Often the decision to move to the suburbs is made by and for the convenience of upper echelon employees where minorities are generally underrepresented. If we allow the continued relocation of Federal building to the suburbs without effective counter-measures to avoid hardships on minority employees, we will be fostering the continued growth of de facto segregation. Both the Congress and the courts have recognized that the growth of de facto segregation must be avoided. Some communities have claimed that if they are required to take low- and moderate-income housing, it will be a great drain on the services they presently provide. The mere fact that a Government facility locates within a community, however, increases property value and general tax revenues in these communities. If government facilities relocate in these suburban communities, but do not provide housing for low- and moderate-income persons, they receive the benefits of Fedeeral facilities without accepting the obligation of assisting lower-income employees. It is unfair to allow these cities to receive these benefits and at the same time impose the obligation of helping poorer citizens in central cities who have lost their income base. I, like Senator Ribicoff, realize that this measure will only begin to solve the problems of economic and racial segregation facing this country. However, I believe that it is a good first step which will hopefully be followed by other significant steps in the very near future. The CHAIRMAN. I may say, Senator Ribicoff is always constructive. Senator RIBICOFF. Thank you, gentlemen, for your compliments. Senator CRANSTON. Right. STATEMENT OF ABRAHAM RIBICOFF, U.S. SENATOR FROM THE STATE OF CONNECTICUT Senator RIBICOFF. This subcommittee has long been at the forefront in the battle to assure decent housing to all Americans. The 1968 Housing Act reaffirmed our national goal of "a decent home and a suitable living environment for every American family." In the last decade, you have passed legislation to meet the increasing needs for adequate housing for our low- and moderate-income citizens. This progress is now threatened by the tremendous growth of jobs and housing in the suburbs of this country to the virtual exclusion of millions of low- and moderate-income workers and their families. The facts are clear. Nearly two-thirds of all Americans live in metropolitan areas. By 1985 these areas will contain an estimated 178 million people, a number equal to the entire U.S. population in 1960. This enormous growth is taking place almost entirely on the suburban fringes of our metropolitan areas. In fact, while the population of our central cities increased by less than 2 percent from 1960 to 1969, he suburban areas experienced a 30 percent jump in population. The population of our central cities, however, is not stable. While the total increase was less than 2 percent, the black population there ose by 32 percent. The leveling factor was a 5 percent decrease in white population-most of whom moved to the suburbs. Although the number of blacks in the suburbs has increased substantially over the last decade, they remain a small minority. In 1969 early 96 percent of the suburban population was white. Of all the whites living in our metropolitan areas, 60 percent resided in the subrbs while close to 80 percent of the blacks lived in the central city. Many of the blacks who have managed to escape the inner city find ife not much different in the suburbs. Suburban Negroes often live n residentially segregated areas where the housing is unsound and rowded, family income is low, education is inferior, and white-collar obs almost nonexistent. This shift of population to the suburbs has been accompanied by an qually rapid growth of industrial and commercial activities there. An nalysis of nonresidential building permits reveals that in the last 5 years approximately 70 percent of all metropolitan industrial buildngs were constructed outside the central cities. The Suburban Action Institute found that the 40 largest metropolian areas gained 5.1 million jobs in manufacturing, wholesale trade, reail trade, and related services in the last 5 census years. The suburbs rained 4,370,000 or 85 percent of these jobs. Many commentators have called this movement industry's flight to he suburbs. The evidence is, however, that "flight" is a misnomer, and hat the growth in suburban employment is primarily attributable to development of new businesses or expansion of existing suburban -olants. The Department of Labor has found that the expansion of manufacturing employment in the suburbs has primarily been in new types of industry such as electronics, aircraft, and aerospace. The suburban action study found that the 40 metropolitan areas studied gained 2,080,000 manufacturing jobs, 2,055,000 or 99 percent of which went o the suburbs. This expansion has been followed by retail firms and a variety of service industries while employment in the central city inreasingly is concentrated in finance, insurance, communications, and nanufacturing hadquarters. The growth of manufacturing and service jobs in the suburbs has egun to distort our labor market because those most able to fill those jobs are often unable to reach them. Our present housing policies have served to effectively exclude millions of low- and moderate-income Americans from new employment opportunities in the suburbs. Most of the Nation's housing units now being constructed are going up in the suburbs. In fact, it is now estimated that only 1 percent of the vacant land in our central cities is zoned for residential use. The housing being built, however, is simply too expensive for low- and moderate-income families. The land is there to be used, but low- and moderate-income housing has been zoned out through the use of largelot zoning and the absence of any provisions for low density multifamily zoning. The only growth policy in existence is a negative one 66-138 71 pt. 2 18 |