and State legislative officials; and representatives of all elements of the housing and urban development field. At the conclusion of our hearings, which I expect to be the most informative we have ever held, we will attempt to fashion the best possible solutions to our urban problems. (The texts of H.R. 9688, H.R. 9331, and H.R. 8853 follow:) [H.R. 9688, 92d Cong., first sess.] A BILL To broaden the national housing goals, to provide housing assistance and promote community development through block grants with emphasis upon the preservation and more efficient use of the existing housing stock and upon the revitalization of declining neighborhoods, to improve programs of Federal planning assistance with emphasis upon modernizing and increasing the management capabilities of State and local governments, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Housing and Urban Development Act of 1971". TITLE I-HOUSING GOALS AND ANNUAL HOUSING REPORT PURPOSE SEC. 101. It is the purpose of this title to broaden the national housing goal, as set forth in present law, in order to place greater emphasis upon the preservation and more efficient use of the existing housing stock, to provide for the formulation of State and local housing goals, and to require the inclusion of additional information in the President's annual housing report. BROADENING OF GOALS AND EXPANSION OF ANNUAL REPORT SEC. 102. (a) (1) Section 1601 of the Housing and Urban Development Act of 1968 is amended by inserting “(a)" after "SEC. 1601.", and by adding at the end thereof the following new subsections: "(b) The Congress further finds that the achievement of the national housing goal will require a more efficient use of the Nation's existing housing stock through such measures as preservation, rehabilitation, and improvements in management and maintenance policies, in order that losses to the housing stock may be minimized and the current level of housing services improved. "(c) In order to facilitate the achievement of the national housing goal and provide a more precise basis for determining national housing requirements, the Secretary of Housing and Urban Development shall encourage (through the provision of planning assistance and otherwise) the formulation of State and local housing goals covering major housing market areas. Such State and local housing goals shall be developed and formulated so as to include both the housing production requirements of the areas involved and the actions needed to preserve the existing housing stock in such areas, including "(1) the numbers and types of subsidized housing units which are needed to serve various income groups, "(2) the Federal, State, and local programs which might or should be utilized to meet the goals established, and the adequacy of private financing resources in meeting these goals, "(3) the identification of impediments to meeting these goals, such as unrealistic or obsolete building codes and zoning regulations, and any recommendations or proposals for eliminating such impediments, "(4) plans for the location of low- and moderate-income housing so as to provide the residents thereof with greater access to employment opportunities, and "(5) plans for the promotion of market aggregation in order to achieve the benefits of economies of scale." (2) The heading of section 1601 of such Act is amended to read as follows: "REAFFIRMATION OF NATIONAL GOAL; DEVELOPMENT OF STATE AND LOCAL GOALS”. (b) Section 1603 of such Act is amended by redesignating paragraphs (5) and (6) as paragraphs (8) and (9), respectively, and by inserting after paragraph (4) the following new paragraphs: "(5) include a contingency plan for the provision of required mortgage credit, setting forth proposed governmental actions to be carried out in the event of adverse mortgage credit conditions; "(6) provide an analysis of changes affecting housing costs borne by occupants, together with recommended actions to reduce the cost of any inflationary elements; "(7) provide an analysis of annual changes in the number and conditions of units in the national housing inventory;". TITLE II-PRESERVATION AND REVITALIZATION OF DECLINING NEIGHBORHOODS PURPOSE SEC. 201. It is the purpose of this title to help preserve older urban neighborhoods which are threatened with blight and housing abandonment by establishing a program of neighborhood preservation grants and a new program of Federal mortgage insurance which, in conjunction with additional activities to be carried out by the localities involved, give reasonable promise that the threat of housing abandonment will be eliminated and a suitable and stable living environment. GRANTS FOR NEIGHBORHOOD PRESERVATION PROGRAMS SEC. 202. (a) The Secretary of Housing and Urban Development is authorized to make and contract to make grants under this section to cities, municipalities, counties, and other general purpose units of local government (including the District of Columbia) to assist such localities in carrying out in designated neighborhood preservation areas programs designed to improve basic community facilities and services and bring about such other changes as may be necessary or appropriate to eliminate the threat of housing abandonment in such areas and to restore or maintain for the residents of such areas a suitable and stable living environment. (b) Grants under this section may not exceed 90 per centum of the cost of carrying out, over a period not to exceed 5 years, any of the following types of activities: (1) the repair of streets, sidewalks, parks, playgrounds, publicly owned utilities, and public buildings to meet the needs of the area, (2) the improvement of private properties to eliminate dangers to the public health and safety, (3) the demolition of structures determined to be structurally unsound or unfit for occupancy, (4) the establishment of temporary or permanent public playgrounds on vacant land, and (5) such other similar activities and improvements as the Secretary deems reasonably calculated to aid significantly in achieving the objectives of this section. (c) To be eligible for assistance under this section, a locality, acting through its local governing body, must designate a specific and identifiable area threatened with housing abandonment which the Secretary finds has a reasonable prospect of being restored or maintained as a suitable and stable living environment with Federal assistance to be provided under this title in conjunction with increased and improved social services to be provided under other federally assisted or wholly local programs. Upon approval of a neighborhood preservation area by the Secretary, the locality shall prepare and submit to the Secretary a plan specifying the improvements in basic community facilities and in services to be made in such area over a five-year period. No grants shall be made under this section to a locality with respect to its designated neighborhood preservation area unless the Secretary finds (1) that the five-year plan submitted by such locality is workable and will provide an effective means of carrying out the purpose of this title in such area, (2) that the locality has the necessary capacity to carry out in a timely fashion all of the activities and undertakings set forth in such plan, and (3) that the locality satisfies such other conditions and requirements as he may impose to assure that the purpose of this title will be achieved. (d) There are authorized to be appropriated for grants under this section not to exceed $25,000,000 for the fiscal year ending June 30, 1972, not to exceed $25,000,000 for the fiscal year ending June 30, 1973 and not to exceed $25,000,000 for the fiscal year ending June 30, 1974. The amount so appropriated shall reman available until expended, and any amounts authorized for any fiscal year under this subsection but appropriated may be appropriated for any succeeding fiscal year commencing prior to July 1, 1975. FEDERAL MORTGAGE INSURANCE TO FACILITATE SALE OR REFINANCING OF HOUSING IN NEIGHBORHOOD PRESERVATION AREAS SEC. 203. (a) Title II of the National Housing Act is amended by adding at the end thereof the following new section: "MORTGAGE INSURANCE IN NEIGHBORHOOD PRESERVATION AREAS "SEC. 244. (a) The purpose of this section is to assist in the preservation and upgrading of housing in designated neighborhood preservation areas by facilitating the refinancing of such housing or its transfer to resident or nonprofit ownership. "(b) The Secretary is authorized to insure any mortgage in accordance with the provisions of this section upon such terms and conditions as he may prescribe and to make commitments for such insurance prior to the date of the execution of the mortgage or disbursement thereon. "(c) In order to carry out the purpose of this section, the Secretary is authorized to insure any mortgage which covers residential property located in a neighborhood preservation area (as designated and approved under section 202 of the Housing and Urban Development Act of 1971), subject to the following conditions: "(1) The mortgage shall cover property which is basically sound or is capable of being placed in standard condition without substantial rehabilitation, and which contains "(A) two or more (but less than seven) dwelling units if the mortgagor is an individual described in clause (A) of paragraph (2), or "(B) seven or more dwelling units if the mortgagor is an organization described in clause (B) or (C) of paragraph (2). "(2) The mortgage shall be executed by (A) an individual who owns and occupies the property and is refinancing outstanding indebtedness related to the property, or who is purchasing the property and will occupy one or more of the units in the property after its purchase, or (B) a cooperative or condominium organization which consists of or includes a majority of the occupants of the property, or (C) a private nonprofit organization or association approved by the Secretary. "(3) The mortgage shall involve a principal obligation (indlucing such initial service charges, and appraisal, inspection, and other fees, as the Secretary shall approve) in an amount not to exceed the sum of 97 per centum of the Secretary's estimate of the value of the property before any repairs or improvements deemed necessary by the Secretary to help restore or maintain the area in which the property is situated as a suitable and stable living environment, except that in no case involving refinancing shall such principal amount exceed such estimated cost of repair or improvements and the amount (as determined by the Secretary) required to refinance existing indebtedness secured by the property. "(4) The mortgage shall "(A) provide for complete amortization by periodic payments within such term (not exceeding twenty years) as the Secretary shall prescribe; and "(B) bear interest (exclusive of premium charges for insurance and service charges, if any) on the amount of the principal obligation outstanding at any time, at such percent per annum not in excess of 6 per centum as the Secretary finds necessary to meet the mortgage market. "(d) The Secretary shall not insure any mortgage under this section unless he has received satisfactory and enforceable assurances from the mortgagor that the refinancing or sale of the property (and any improvements thereto) will not result, directly or indirectly, in any increase in the rentals charged for dwelling units in the property for a period of at least one year from the date of final endorsement for mortgage insurance, or in any increases in such rentals thereafter in excess of such increases as the Secretary finds justified and approves on the basis of increased operating expenses. In addition, the Secretary shall place such further restrictions on the mortgagor as to sales, charges, capital structure, rate of return, and methods of operation as, in the opinion of the Secretary, will best effectuate the purpose of this section. "(e) The Secretary may consent to the release of a part or parts of the mortgaged property from the lien of any mortgage insured under this section upon such terms and conditions as he may prescribe. "(f) The provisions of "(1) subsections (b), (c), (d), (e), (f), (g), (h), (j), and (k) of section 204, or "(2) subsections (d), (e), (g), (h), (i), (j), (k), (1), and (n) of section 207, as may be appropriate, shall apply to mortgages insured under this section; except that (A) all references in the enumerated subsections of section 204 to the Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the Special Risk Insurance Fund and all references in such subsections to section 203 shall be construed to refer to this section, and (B) all references in the enumerated subsections of section 207 to the General Insurance Fund or the Fund shall be construed to refer to the Special Risk Insurance Fund and all references in such subsections to section 207 shall be construed to refer to this section." (b) (1) The first sentence of section 238(b) of the National Housing Act is amended by striking out "and 243" and inserting in lieu thereof “243, and 244”. (2) The third sentence of section 238(b) of such Act is amended by striking out "and 243" and inserting in lieu thereof "243, and 244". (3) The fourth sentence of section 238(b) of such Act is amended by striking out "and 243" and inserting in lieu thereof "243, and 244". TITLE III-COUNSELING AND IMPROVED MANAGEMENT ACTIVITIES SEC. 301. It is the purpose of this title to increase the capabilities of the Secretary of Housing and Urban Development to meet the urgent need for improved housing management practices and homeownership counseling services in federally assisted housing programs in a manner which will be responsive to the needs and desires of those assisted and supportive of the national housing production goal. COUNSELING AND IMPROVED MANAGEMENT ACTIVITIES SEC. 302. (a) Section 238 of the National Housing Act is amended by adding at the end thereof the following new subsection: "(c) With respect to receipts from premium charges for any mortgage or loan the insurance of which is an obligation of the Special Risk Insurance Fund, and which is accepted for insurance pursuant to a commitment issued on or after the date of enactment of the Housing and Urban Development Act of 1971, up to 100 per centum of the amount received during the first twelve months after the mortgage or loan is accepted for insurance and 50 per centum of the amounts received thereafter shall be available to the Secretary for the following purposes: "(1) the provision, either directly or by contract, of training programs in family budgeting, recordkeeping, maintenance, and other activities related to homeownership for families eligible for mortgages or loans which are, or would be, obligations of the Special Risk Insurance Fund; "(2) making studies of typical homeowner problems, including but not limited to basic home maintenance problems, and disseminating information on such problems through periodic consumer bulletins; "(3) conducting continuing analyses and studies designed to develop criteria for determining the eligibility of families for Federal homeownership assistance that makes such assistance available to a maximum number of families while furthering successful homeownership; "(4) providing counseling programs in family budgeting, homemaking, and utilization of equipment for tenants in federally subsidized rental housing covered by mortgages or loans which are obligations of the Special Risk Insurance Fund; “(5) providing training programs for local and other personnel recruited to be members of the management staffs of federally assisted rental housing; "(6) preparing model management operating manuals for project managers in federally assisted rental housing projects; "(7) providing 'seed money' loans (repayable with interest) and advanced training for those with management experience to help them form corporations to manage federally subsidized housing projects covered by mortgages or loans which are, or would be, obligations of the Special Risk Insurance Fund; "(8) participating in Federal Housing Administration rental project application reviews and conferences prior to approval to ascertain that design, materials, and the management and operating budget and plan is conducive to good management and operating efficiency; (9) providing encouragement and assistance to management in the formation of tenant councils in projects covered by mortgages or loans which are obligations of the Special Risk Insurance Fund; and 66-842 71 pt. 1 ---2 "(10) engaging in adequate Federal monitoring of management operations in order to identify developing weaknesses before federally assisted projects covered by mortgages or loans which are obligations of the Special Risk Insurance Fund reach a serious problem condition." SPECIAL ASSISTANT TO SECRETARY OF HOUSING AND URBAN DEVELOPMENT SEC. 303. Section 4(d) of the Department of Housing and Urban Development Act is amended to read as follows: "(d) There shall be in the Department a Special Assistant to the Secretary, designated by the Secretary, who shall be responsible for “(1) providing information and advice to nonprofit organizations desiring to sponsor housing projects assisted under programs administered by the Department, "(2) maintaining surveillance over present and proposed fees and charges required in connection with federally assisted housing which will be reflected in monthly housing costs, "(3) maintaining surveillance over present and proposed minimum property standards affecting the livability of housing, (4) investigating inquiries and complaints from consumer groups concerning procedures and regulations, and their interpretations by the Department, and "(5) representing, within the Department, the special interests and needs of the occupants of federally assisted housing." TITLE IV-EXPANSION OF EXPERIMENTAL HOUSING ALLOWANCE PROGRAM SEC. 401. It is the purpose of this title to expand the existing demonstration program of housing allowances for low-income families by providing sufficient funding to allow the testing and evaluation of a wider variety of housing allowance techniques. EXPANSION OF PROGRAM SEC. 402. (a) Section 504 of the Housing and Urban Development Act of 1970 is amended by striking out subsection (b) and inserting in lieu thereof the following new subsection: "(b) The program undertaken pursuant to this section shall include the development and utilization of different types of housing allowances, and different techniques for providing such allowances to families of low income, in order that a wide variety of potentially effective types of and techniques for providing housing allowances may be tested and evaluated. Particular attention shall be given to the impact of such allowances on rent levels for housing units of comparable size throughout the housing market and the extent to which any increased rent levels reflect improved housing services." (b) Section 504(d) of such Act is amended by striking out "not to exceed $10,000,000 in each of the fiscal years 1972 and 1973" and inserting in lieu thereof "not to exceed $25,000,000 in each of the fiscal years 1972, 1973, and 1974". (c) Section 504 (e) of such Act is amended by striking out "1972 and 1973" and inserting in lieu thereof "1972, 1973, and 1974". (d) Section 504(g) of such Act is amended by striking out "June 30, 1973" and inserting in lieu thereof "June 30, 1974". TITLE V-HOUSING BLOCK GRANTS TO STATE AND STATEMENT OF PURPOSE SEC. 501. It is the purpose of this title to provide for the establishment of State housing agencies and metropolitan housing agencies within States, to prescribe the powers and functions of State and metropolitan housing agencies, and to authorize the financial and other assistance needed to enable these agencies to develop, on an area wide basis, balanced housing programs which further the achievement of the national housing goal of a decent home and a suitable living environment for every American family. Its basic objective is to stimulate a |