structed in a manner consistent with a local plan of the municipal government for the development of the area, which would avoid future slums, offers in my opinion the most constructive answer to the problem of development of these areas which has been suggested. Under this proposal the public agency does not construct the houses, and public participation in the program is limited to the one area in which public participation is essential, that is in assisting in acquiring blighted areas and absorbing the difference between the cost of such areas and their use value.

7. (a) It is my opinion that some sort of public financial assistance is absolutely necessary to write off the excessive costs of acquiring and clearing the land in slums and blighted areas, and making it available to private enterprise for uses and construction under a plan of development approved by the city of Dallas. (b) There are several bases for this information. In the first place, the mere fact that these areas exist to the extent they do is the strongest argument that it is uneconomical and infeasible properly to develop these areas, otherwise it would have been done long ago by private investors.

In the second place, in various other cities of the country, repeated efforts have been made to accomplish such redevelopment without public financial assistance. These have failed. In the next place, those projects which have succeeded, such as the Metropolitan Life Insurance projects in New York, have succeeded in a large measure because of subsidy in the form of tax exemption for a period of years, which is permissible under the New York constitution. Finally, this opinion is based on the local conditions and the knowledge that there is a considerable differential between the cost of acquisition and improvement of these areas and the use value for residential construction. The other requirement for public participation is equally essential; that is, it is necessary that the power of eminent domain, vested in the city or its agency, be exercised in order to acquire the property for such a project.

(c) The city of Dallas would be in a position to provide assistance in the provision of utilities such as water and sewage facilities, parks, streets, and schools. The city is not in position to finance such a program without outside help.

(d) Such funds are not available for this purpose.

(e) In my opinion, the proposal in S. 866, providing two-thirds of the net cost of local urban redevelopment program be carried by the Federal Government and one-third by the locality, is reasonable; nevertheless, as stated above, the city of Dallas could participate only to the extent and in the manner hereinbefore set out.

(f) I make no alternate proposal at this time.

8. In the event a program for the redevelopment of blighted areas should be instituted in the city of Dallas, it is my thought that preference as to occupancy of any dwelling units constructed on the project should be given to the prior residents of the project. I recognize, however, that there may be persons living in such an area whose incomes are so low that it would be impossible for them to become occupants of the new dwellings constructed by private enterprise in the area. When this condition exists, it would be my suggestion that these persons be housed in existing public housing projects. In instances where public housing is not available for such persons, additional public housing would have to be made available for them.

9. (a) Texas does not have urban redevelopment legislation.

(b) Inapplicable to the situation in Texas.

(c) Inapplicable.

10. No additional comment.

CITY OF MADISON, WIS.,

December 30, 1947.

Hon. ROBERT F. WAGNER,

United States Senate, Washington, D. C.

DEAR SENATOR WAGNER: Your letter with respect to survey of urban redevelopment and public housing, recently received by the president of our city council, has been referred to my office.

The city of Madison has a housing authority created by virtue of Wisconsin statutes and by ordinance of the city of Madison. The housing authority was requested to make answer to the questions which you submitted with respect to urban redevelopment and public housing.

I take pleasure in transmitting with this letter a copy of the report of the Madison Housing Commission on the subject above mentioned. I trust you will find it of some value in your study of housing conditions.

Very truly yours,

Enclosure.

LEONARD C. HOWELL, City Manager.

SURVEY OF URBAN REDEVELOPMENT AND PUBLIC HOUSING

1. Based on your knowledge of conditions in your city, what is your estimate as to the approximate number of low-income families now living in substandard housing, in slums, or under other unsatisfactory housing conditions?

Answer. As of November 30, 1947, the Madison Housing Authority estimated a current active unsatisfied demand of about 1,500 dwelling units over and beyond buildings now under construction or the subject of permits issued as of that date. This demand is for rental and sales units and at all price ranges. Of this number it is estimated that about 1,000 should be provided so as to require monthly payments of no more than $50. For the most part this unsatisfied demand for 1,500 units represents families that are now living doubled up, split up, under greatly overcrowded conditions, or on the verge of eviction.

In addition to this compelling need, it is estimated that Madison has a minimum of 100 family groups that are earning low incomes and at the same time are living under housing conditions that are bad from the standpoint of both structures and facilities. Housing is considered substandard where it is either in need of major repair or is lacking in one or more basic facilities such as a bath, flush toilet, or central heat. These units are substandard in both respects. These figures are based on spot surveys made in 1946 by the MHA to follow up the 1940 census. In 1940 there were some 837 dwelling units reported as being substandard in one respect or another and it is now estimated that in addition to the approximately 100 families living in units that are both structurally unsound and lack basic facilities there are probably about 500 low-income families now living in units that although structurally fair to good still lack basic facilities. Rents for these units run $15 to $20 per month higher than for complementary "slum” properties. Families forced to live in these quarters may be just as badly off as those living in quarters rated “bad” on all counts.

2. (a) In your opinion will private enterprise be able now or in the foreseeable future to provide decent housing, new or old, for all of these families at rents or prices within their ability to pay?

Answer. No.

(b) Please indicate, briefly, the basis for your opinion.

Answer. In 1940 only 25 percent of all rental units in Madison were on the market at rents below $30 a month. As compared to other comparable capital and university cities, Madison has long been deficient in the number of tenant units offered in low-price ranges. Standard rental construction for years just prior to the war has been unable to enter price ranges below $40. Now the gap is even greater between top rents that can economically be paid by low-income families and the lowest rents offered in new, standard construction. Private building of rental units in the last 2 years in Madison has provided about 75 units all at rentals upward from $75. Construction is now under way on a good many more rental units but all of these units will rent at figures well above $50. The current high cost of building makes it impossible for private industry unaided to produce units for those who can't afford to pay more than $50 a month. Key building statistics in the Madison area during 1946 and 1947 are as follows:

3. (a) If it is your opinion that private enterprise will not be able to provide decent housing for all such families, do you favor the provision of publicly assisted low-rent housing as a means of supplying decent housing for such families?

Answer. Yes.

(b) If so, what is your estimate of the number of low-rent units which, in your opinion, it would be desirable to provide in your city over the next 4 years? Answer. 400 to relieve shortage of rental units; 200 to replace substandard properties.

(c) To what extent is your city in a position to finance the cost of constructing such low-rent housing?

Answer. This is a matter which the city council would have to decide. In 1939 the council voted down a joint local-Federal low-income project. The city has limited revenues.. Its property tax base is crippled by the fact that so much of the property in the city is already tax-exempt (about 30 percent). It cannot enact levies on income. The city is not in a position to contribute much if any of the capital cost of constructing such housing.

(d) To what extent is your city in a position to furnish annual subsidies needed to permit such housing to be rented to such low-income families at rents within their ability to pay?

Answer. This is another question that the council would have to determine. This probably would depend on the exact terms under which Federal moneys might be offered.

(e) To what extent are State loan and subsidy funds available for such purposes?

Answer. No State loan funds are available. The State under chapter 412 of the 1947 session laws set aside funds for veterans housing. Up to $9,000,000 will be made available in the next 2 years to be donated to local authorities putting up veterans projects for rent or sale.

Grants are made on the basis of 10 to 15 percent of capital cost of the project. Subsidy is used to bring rents down to proper level. No State aid of any kind for nonveteran housing.

NOTE.-A 192-unit rental project for veterans, sponsored by local authority, has been approved by the council. Details of plan and degree of city and State aid are set forth in attached statement.

4. If there is low-rent housing in your city developed under the United States Housing Act of 1937:

(a) Has the housing served low-income families?

(b) Has the housing been built and operated efficiently?

(c) What has been the effect, if any, of this housing on neighborhood?

(d) Has this housing presented competition to the builders or owners of standard private housing in the city?

Answer. None.

5. (a) Do you favor a continuation of a program of Federal assistance to local communities, along the lines of the United States Housing Act of 1937, as a means of aiding the communities to provide decent housing for low-income families?

Answer. Yes.

(b) If so, to what extent is your city in a position to pay a portion of the construction cost of such housing? (This may be indicated by the approximate percentage of the capital cost of any low-rent housing projects which your city would be able to provide.)

Answer. Council would have to decide this. Recommend 10 percent.

(c) Have you any modifications in that program which, in your opinion, would make it more effective, or would make it more adaptable to conditions in your city?

Answer. No.

(d) Please outline briefly, and describe the practical effect of, any alternative proposals which you desire to recommend as a feasible means of meeting this phase of the housing problem.

Answer. None.

6. In your opinion, wholly aside from low-rent housing for low-income families, is a redevelopment program necessary for your city in order to clear slums and blighted areas and making the land therein available for new private and public development?

Answer. Yes. Madison has scattered slum or blighted areas but no great concentrations of substandard units. It will be necessary over the years to provide for redevelopment of these and other areas.

7. (a) If so, in your opinion, is some form of public financial assistance necessary to write off the excessive costs of acquiring and clearing the land in slums and blighted areas if it is to be made available at prices which will permit its redevelopment for the use which your city determines is most appropriate? Answer. Yes.

(b) Please indicate, briefly, the basis for your opinion.

Answer. High cost of land and slum clearance makes project uninviting to private enterprise since operation cannot be conducted at a profit.

(c) To what extent is your city in a position to finance these costs?

Answer. City could borrow for this purpose.

(d) To what extent are State funds available for this purpose? Answer. None.

(e) S. 866, now pending in Congress, proposes that two-thirds of the net cost of local urban redevelopment programs be carried by the Federal Government and one-third by the locality. In your opinion, is this an equitable and adequate proposal?

Answer. Yes.

(f) Please outline briefly, and describe briefly the practical effect of any alternative proposals which you desire to recommend as a feasible means of meeting this problem.

Answer. None.

8. In carrying out a program for the redevelopment of slums and blighted areas in your city under such a program, what means do you recommend to assure that low-income families now living in such areas will be provided with decent housing?

Answer. Haven't completed our study of the problem in the Madison area and our outline of a program to meet this problem.

9. (a) If your State now has urban redevelopment legislation, please indicate the results achieved under it or now in prospect in your city.

Answer. None now in prospect here.

(b) In your opinion, under this legislation alone will your city be able effectively to carry out its program for the clearance and redevelopment of its slums and blighted areas?

Answer. No.

(c) Please indicate, briefly, the basis for your opinion.

Answer. State legislation merely enabling; provides no State aid.

10. Are there any other matters in connection with low-rent housing for lowincome families, or in connection with the clearance and redevelopment of slums and blighted areas, as to which you desire to comment or make recommendations? Answer. No.

Mr. BOGGS. Now, Congressman Gamble talked about these slum areas. Is it not a fact that by clearing these areas, from the municipal point of view, municipalities will increase their tax yields and probably decrease their expenditures. Tax yields would be increased by putting revenue-producing properties on the cleared land and expenditures would be decreased because of the lessened police problem and lessened social problem existing in those areas, would they not? Do you think that is a fair statement?

Mr. FOLEY. I think that generally is true, although one would have to consider many factors as to whether the increase or decrease was a total net. But, generally speaking, yes.

Mr. BOGGS. Did you have occasion to follow the debate in the Senate when the bill was up for consideration there?

Mr. FOLEY. I did have occasion, Congressman.

Mr. BOGGS. Do you recall whether or not there was any substantial fight made on this slum clearance provision of the bill?

Mr. FOLEY. My recollection is that there was apparently little controversy over it.

Mr. BOGGS. That is all.

Mr. BROWN. Mr. Chairman.
The CHAIRMAN. Mr. Brown.

Mr. BROWN. Mr. Foley, I notice in title VII, under farm housing, you have two types of assistance. One is a direct loan by the Secretary of Agriculture, and the other is an annual contribution. Will the Government make the entire contribution, or will the county government have to contribute also?

Mr. FOLEY. Was your question, Congressman, whether, under this bill, the contribution contemplated would all be made by the Federal Government?

Mr. BROWN. Yes, sir.

Mr. FOLEY. My recollection is that they would. It does not call for a sharing of contributions. Mr. BROWN. Thank you, sir. Mr. FLETCHER. Mr. Chairman. The CHAIRMAN. Mr. Fletcher.

Mr. FLETCHER. Mr. Foley, you know we passed out a bill for a 1-year extension of title VI. Would you care to give your opinion as to whether that, as an emergency-housing matter, could be handled separately from this bill? It is now before the Senate, you understand. Need we tie it in to this long-range-housing plan? Why can they not act on it separately on the Senate side? Or do you care to comment on that?

Mr. FOLEY. That, Congressman, is purely a matter for determination by the Congress rather than by me. I testified before this committee on a separate bill, you will recall, in favor of the amendments which were proposed. But as to whether the Senate could or would act on it separately, I think, could only be decided by the Senate. Mr. FLETCHER. Your testimony here still stands-that there is no reason why it could not be acted upon separately?

Mr. FOLEY. This committee of the House asked me to testify on a title VI bill separately set up and we testified in support of the bill, as you will recall.

Mr. FLETCHER. I notice on page 2 of your statement (transcript p. 12) you say:

We have many families who must live in slums and other inadequate housing because their incomes are not sufficient to permit them to pay an economic rent for decent shelter, new or old.

The question always arises as to what is the range, because of their incomes, as to what income level you are going to use.

The formula that is in this S. 866, is that the one you support? Mr. FOLEY. Yes, we are supporting that formula generally, and realizing also that no formula will fit every case or be perfect. We hope that in time our experience will lead us to greater perfection. But what is provided in S. 866 is the preservation of a gap of at least 20 percent between the highest income families, which are housed in the proposed low-rent housing, and the lowest, for which there is locally being furnished an adequate supply of rental housing, those determinations to be made locally by the local authorities.

Mr. FLETCHER. Has this formula ever been tried anywhere? Is it Working anywhere at the present time? It seems to me it would be very vague.

Mr. FOLEY. As a matter of fact, what is proposed in the bill would merely make a statutory provision of what is presently a policy being followed, and which has been followed for a considerable time, by the public-housing agency.

Mr. FLETCHER. Followed or not followed?

Mr. FOLEY. I was about to discuss the exceptions.

That has been the basis upon which initial admissions have been approved.