Mr. BALDWIN. The city of Richmond is required under this amendment to pay to the Federal Government the full value at which the Federal Government acquires it, plus any legal costs involved by the Federal Government and under the city of Richmond's program-I might say Mr. Murdock is here representing the city of Richmond. I would like to give the platform up to him in one jiffy, but the plan of the city of Richmond is to dispose of it to developers at the same acquisition cost as the city acquires it from the Federal Government. Mr. RAINS. The city of Richmond is going to pay the cost of the condemnation which the Government will incur? Mr. BALDWIN. That is correct.

Mr. RAINS. That looks like a good proposition.

Mr. BROWN. How did you arrive at the $4 million?

Mr. BALDWIN. That is just an estimate of what it is. That is an estimate of the real-estate cost to acquire the full title.

Mr. RAINS. Is it an estimate made by the Housing Administration here in Washington?

Mr. BALDWIN. With your permission, I would like Mr. Murdock who represents the city of Richmond to come up with me because I believe Mr. Murdock can answer that question in more detail. Mr. Murdock.

STATEMENT OF DANA MURDOCK, REPRESENTING THE CITY OF RICHMOND, CALIF.

Mr. MURDOCK. My name is Dana Murdock. I am representing the city of Richmond.

In answer to the question last put forth, the estimate of $4 million is arrived at by striking an average of $750 per 25-foot lot, which was the actual estimate made by the Housing Administration's appraisers for the pilot project, which was under way to test the legislation enacted last year.

The CHAIRMAN. How is the city going to raise the funds necessary to purchase this? The city, I know, hasn't that surplus now to do that. Would that be through a bond issue? ·

Mr. MURDOCK. The city has no fund now. The State law permits the development of this kind of money, either through a bond issue, which is a charge upon the land, or by the sale of revenue bonds, which will be paid off by the increment of taxes that are added to the lands through a redevelopment program, which taxes are sequested and placed in a special fund to amortize the principal and interest on the bonds.

Those are the only two methods that they have.

The CHAIRMAN. That only binds the city. That only binds them to collect the levies and assessments?

Mr. MURDOCK. That is right.

The CHAIRMAN. The only way you could bind the city would be by a vote of the city.

Mr. MURDOCK. A vote of the people on the general obligation bonds. The CHAIRMAN. Will those be marketable?

Mr. MURDOCK. We are told they are marketable. You never know until you have one to sell whether they are marketable, but we are told these types of bonds are marketable.

Mr. RAINS. One other question, Mr. Murdock: After you demolish those houses, if this bill is passed with the amendment added, and the agreement is reached, following up the chairman's question, and the Government starts condemnation, when will the Government have an assurance that the city of Richmond will have the money to pay onethird down and pay the other two-thirds within 12 months? Can you give that assurance to the Government prior to the condemnation?

Mr. MURDOCK. That is one of the administrative conditions which the Administrator will impose upon the city of Richmond, because this is discretionary with the Administrator, and unless the city gives him some assurances that they will pay for the lands, one-third down and the balance in a year, no doubt he would not embark on such an undertaking.

Mr. RAINS. I haven't read the Senator's amendment. Is there any provision in the Senate amendment that would nail down that kind of a proposition, or is it left to the discretion of the Housing and Home Finance Administrator?

Mr. MURDOCK. The provision in the amendment requires both the Administrator to make certain findings and the legislative body of the city, the city council, to make certain findings to the effect that the assembly of the land will aid in the disposition of the Lanham Act housing by facilitating the availability of improved sites needed to replace the families and the homes that will be torn down.

Now, there is nothing else in the act that requires the Administrator to get assurances from the city other than those findings.

The CHAIRMAN. You expect to be bound to pay the money, not in special assessment bonds?

Mr. MURDOCK. That is right.

Mr. BROWN. If you pay a million dollars the Government would be fairly safe.

Mr. MURDOCK. As a practical matter, wholly apart from what has been said heretofore, an entirely new thought, the practical approach to the thing will be something like this: The city will find a developer who will agree to develop the land in accordance with the community redevelopment plan, and it will be his money that will be used by the city to turn over to the Federal Government, to reimburse the Federal Government for the cost of the condemnation.

Mr. RAINS. That is the million dollars?

Mr. MURDOCK. Yes, sir.

Mr. RAINS. That is the downpayment?

Mr. MURDOCK. That is correct.

Mr. BROWN. Do you expect to get the other 2 million from the same contractor?

Mr. MURDOCK. This permits the sale of the land to various and sundry contractors, so that it would be possible to have one contractor, but the chances are there will be a lot more than one involved.

The CHAIRMAN. In the process of the condemnation it is usually rather slow, on the part of the Government, to take over the land. Most people are not able to raise the money.

Mr. MURDOCK. The land title companies in California have agreed that they will issue a clear marketable title upon the Government's filing of its declaration of taking. They won't force us to wait until the final decree or award is made, so that this is a really fast, or rapid

method of assembling title, something we cannot do under our State law because the constitution of our State forbids it.

The CHAIRMAN. You think the amendment in the Senate bill would meet the requirements for your city?

Mr. MURDOCK. We certainly do, Mr. Spence.

The CHAIRMAN. Are there any further questions?

Mr. MURDOCK. I would like, if permitted, to file a statement and have it entered in the record, if I may, please.

The CHAIRMAN. You may file your statement and it will be included in the hearings.

(The information is as follows:)

STATEMENT OF DANA MURDOCK ON BEHALF OF THE CITY OF RICHMOND REGARDING PROPOSED HOUSING AMENDMENT TO EXPEDITE THE DISPOSAL AND REPLACEMENT OF TEMPORARY WAR HOUSING IN RICHMOND, CALIF.

The city of Richmond, Calif., wholeheartedly endorses the statement submitted by our representative, the Honorable John F. Baldwin, in favor of the proposed amendment.

The amendment is designed to remedy a problem facing the city of Richmond resulting from the construction by the Government of the vast number of temporary war-housing units upon leased land. We are informed and believe that the city of Richmond is the only place where temporary Government-owned housing in such quantities was erected upon leased lands rather than on lands. to which the Government had acquired a fee simple title.

Some of the members of this committee are acquainted with the background of the housing situation in Richmond. The 80th Congress in adopting section 405 of the Defense Housing and Community Facilities and Services Act of 1951 (section 1593 d, title 42, U. S. Code) authorized the Housing Administration to acquire 300 acres of land in the Richmond area to be used for the provision of improved sites for privately financed defense housing. The purpose of that section was to permit the assembly of substantially the same lands so that private enterprise would be able to build housing needed to replace the temporary housing owned by the Government which had previously been constructed under the Lanham Act. While section 405 contemplated that the sites would be used for defense housing, it would nevertheless appear that the overriding purpose was to substitute new, permanent, privately owned housing for temporary Lanham Act housing. Had the major purpose been the filling of defense-housing needs during the Korean war only, there would have been no necessity for enacting section 405, since the temporary Lanham Act housing could have been retained to serve Korean defense needs.

Largely because of the freeze on removal of temporary housing in Richmond during the Korean war, the city was unable to propose a feasible plan for taking advantage of section 405 prior to the expiration (June 30, 1953) of title IV of the Defense Housing and Community Facilities and Services Act of 1951. Congress repealed title IV which dealt primarily with provision of sites in connection with isolated defense installations party because it had never been used, and more importantly, because the Korean need was no longer present.

The 83d Congress enacted section 805 of the Housing Act of 1954, which authorized the Housing Administrator to convert the Government leasehold interests in Richmond to a fee simple interest as an incident to the orderly disposal of the temporary Lanham Act housing by providing improved sites for privately owned housing needed to replace such temporary housing.

The primary purpose of section 405 of the Defense Housing (etc.) Act of 1951 was actually the same as that contained in section 805 of the Housing Act of 1954. The enactment of section 805 is clearly indicative of the congressional intent to carry out the purposes of section 405 which had been designed solely to meet the special problems involved in removing temporary housing in Richmond and providing land for privately financed housing needed to replace it.

In the absence of a plan such as has been enacted into legislation by the Congress, the removal of temporary housing in Richmond would be delayed for many years; the area would be further blighted because it is not economically feasible to maintain in good condition housing which is slated for removal; and eventually the Federal Government would probably be called on under the provisions of title

I of the Housing Act of 1949 (eligibility for further planning advances and capital grants for the planning and redevelopment of such area having heretofore been established by the Federal Government) to bear two-thirds of the cost of land acquisition and blight removal estimated to total $3 million. Other Federal interests and considerations in Richmond occur since the temporary housing constructed by the Government is a substantial factor causing the blight now recognized by the Government as existing in the community. These Federal interests and considerations have been cited by the President's Advisory Committee for Slum Clearance and for the Removal and Prevention of Urban Blight and they are, of course, doubly applicable in the case of Richmond.

The proposed amendment is designed to remedy the situation which has developed based upon experience under last year's legislation.

The proposed amendment requires that before the Housing Administrator can acquire a fee simple title to any such lands both the Administrator and the city must make certain findings to the effect that such acquisition will tend to expedite the orderly disposal or removal of the temporary housing by facilitating the assembly of improved sites on which private enterprise can provide privately owned housing needed to replace the temporary housing.

Sale of the lands so acquired may be made during a period of 5 years following acquisition to the city or its public redevelopment agency at fair market value. Downpayment of at least one-third of the price is required, and the balance would be payable in not over 1 year. Interest at 4 percent would be charged for any part of the price not paid at the time of conveyance.

The Administrator could, during the 5-year period after he acquires any land under the amendment, sell it either to the city or, if negotiations for sale to the city do not make reasonable progress with respect to any particular parcel, under the authority of existing law.

Any land not sold by the Administrator 5 years after its acquisition by him, would be required to be disposed of as expeditiously as possible in accordance with other authority of existing laws.

Advantages of proposed amendment include:

(1) Permits more efficient assemblage of larger parcels;

(2) Eliminates requirement that city guarantee full payment before Federal Government acquires land;

(3) New safeguards are provided through the 5-year limitation on holding title;

(4) Costs to the Federal Government will be recovered on resale;

(5) Eliminates defects encountered in the administration of last year's legislation; and

(6) Provides a more flexible and feasible method of carrying out the intent of the 83d Congress.

Mr. BALDWIN. I might say that the authorization for the condemnation is the law now under the 1954 act which authorized this procedure affecting the city of Richmond. The only change in that act is the fact that here there is a change to allow the city this 1-year period to complete full payment, and pay 4 percent interest in addition to it.

The CHAIRMAN. Has the Government started procedure for the condemnation of all this property?

Mr. MURDOCK. They haven't started yet, no.

The CHAIRMAN. All right.

Mr. BETTS. Mr. Chairman, I have just one legal question. Possibly it isn't legal, but to keep the amendment in this act it has to be a general proposition to apply to any city?

Mr. MURDOCK. Yes.

Mr. BETTS. I know it has to be that way in this act. Do you think that is fairer than to have a special act, or couldn't you do that?

Mr. HALLAHAN. Mr. Betts, they have a peculiar situation in Richmond, Calif. Although the present statutory provisions are framed in general language, the conditions which a community would have to meet under the provisions of the statutory language are such that they apply principally to Richmond, Calif.

Mr. BETTS. As a general proposition, it is so worded that it can apply only in a specific case?

Mr. HALLAHAN. It has a very limited application.

Mr. BETTS. It occurred to me that maybe because it was general that there might be some opposition to it.

Mr. HALLAHAN. It does cover other communities, but the provision is limited, very limited, in its nature.

Mr. MURDOCK. As a matter of practical approach, Mr. Betts, the land title companies have agreed to insure title on the obtaining. Mr. BETTS. I understand.

Mr. MURDOCK. Even in advance of a court ruling on the validity of the act.

Mr. BALDWIN. I might say further, Mr. Betts, that the wording in the 1954 act, identifying the cities to which this applies by a city in which there are more than 10,000 temporary housing units held by the United States in March 1, 1953, is repeated exactly here, so far as the identification of the area, it is exactly the same as in the 1954 act. Mr. BETTS. Cleveland, Ohio, has it applied the same way. It is limited to cities over 500,000, or something like that, I understand. That clears up my point.

Mr. RAINS. It is generally local in application.

The CHAIRMAN. Is each city under the constitution limited in its tax rate for indebtedness and expenditures for the year? Isn't there a constitutional provision?

Mr. MURDOCK. There is, sir, but I am not familiar with the amount of the limit.

The CHAIRMAN. If that is true, then the only way that could be increased would be by a vote of the people and a bond issue. Do you feel sure you could get that if you submitted it to them?

Mr. MURDOCK. We certainly feel this way about it: That this debt limitation does present a problem, and we are confident that the people of our community will support a bond issue, if a bond issue is necessary.

The CHAIRMAN. Your proposition will be considered by the committee when they go into executive session.

If there is anything you desire to insert in the hearings, you have the privilege of doing so.

Mr. BALDWIN. Thank you very much, Mr. Chairman, and members of the committee.

Mr. MURDOCK. Thank you very much.

The CHAIRMAN. Call the next witness, Mr. Clerk.

Mr. HALLAHAN. The next witness is Hon. Robert Jones of Alabama. The CHAIRMAN. We are glad to have you appear before us, Mr. Jones.

Mr. JONES. Thank you, Mr. Chairman.

STATEMENT OF HON. ROBERT E. JONES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA

Mr. JONES. I appreciate the opportunity, Mr. Chairman, and members of the committee, to again appear in behalf of the provisions of the existing law, title V, for the continuation of the rural-housing program.