Mr. WELSH. All of us are deeply grateful that Senator Taft has again taken the leadership in sponsoring what we in the cities believe is the most important long-range measure, insofar as the progress of our cities is concerned, that has ever been presented to the Congress in the history of our republic.

S. 866 is truly a Magna Carta of housing and redevelopment for our great industrial centers. If enacted into law, it will aid in the begining of a Nation-wide program for elimination of slums and blighted areas and the redevelopment of these areas in accordance with the needs and requirements of our cities.

Of all groups interested in housing and in the clearance and redevelopment of slum areas, the executives of American cities, speaking through the United States Conference of Mayors, are beyond question -except perhaps for the people who themselves live in slums-the most vitally concerned. To us, housing together with slum clearance and redevelopment are not just questions of social reform but concrete and practical matters of good municipal housekeeping.

The city of today, laid out as it was primarily in a horse-and-buggy age, is now faced with revolutionary developments in housing and the whole pattern of urban land use. The structure of our cities should provide the broad background for improvement in the conditions under which our people live. Instead, our cities today are so constituted that people cannot take full advantage of the scientific progress in housing and urban planning which at this time really exists only in our laboratories and on our drafting boards.

The automobile has made it possible for people to live at greater distances from their places of work. Improved land planning and the features of the modern house have attracted people to the suburbs. The central city could not compete. Those who could afford the advantages offered by the countryside left the cities. Those who could not, remained. At the same time, municipal costs have increased because of increased and improved municipal services. The burden of greater local taxation, divided up among fewer and relatively poorer people, is rapidly approaching impossible limits.

We have patched things up here and there as best we could. The dismal fact remains, however, that large sections of our cities are morasses of slum and blight. People no longer take pride and pleasure in living in our cities. To be perfectly frank, many of them live there those who cannot afford escape to the countrysidebecause they must. If people did not have to live there, our cities would very quickly, in my opinion, be technologically unoccupied.

The answer to the problem of our cities is their regeneration as places to live and to work. Actually, except for relatively minor civic improvements, the only large-scale urban redevelopment programs carried out in our cities have been the slum clearance and lowrent housing programs under the United States Housing Act. The public-housing projects built under this act have not only replaced unsightly and vicious slums but also they have arrested still further decay in the surrounding areas and in many cases led to their improvement. The benefits of public housing have thus not been limited to the people who actually live in the projects, but have been felt directly in their immediate vicinity and indirectly by the community at large.

I want to stress particularly the importance of title VIII of the proposed bill-the title dealing with land assembly and preparation for redevelopment.

We must have a program which will clear our slums and then see to it that the land is redeveloped for the use which is best in the interest of the community. Wherever possible this redevelopment should be done by private enterprise, but where low-rent housing or other public uses are most appropriate, the local housing authority or the branch of the municipal government concerned should undertake the redevelopment. In either case, whether for private or public redevelopment, the price paid for the land should be a fair price in relation to the use which will be made of it.

Admittedly such a program of slum clearance and redevelopment will involve losses-often substantial losses. We believe that Federal aid will be necessary to help the cities meet the deficits involved in clearing the slums and making the land available for proper redevelopment. Various proposals have been made for Federal assistance to localities in carrying out such programs. Minor differences in these proposals can be readily resolved. They are unimportant compared with the central fact upon which there is general agreement that slum clearance and redevelopment is one of the Nation's most critical needs and that the cities are powerless to act without the aid of the Federal Government.

The Conference of Mayors endorses S. 866 realizing that the contemplated program represents only a small beginning or attack on a Nation-wide problem. At best, with the amount of funds authorized. only about one-fifteenth of the total job can be taken care of.

In carrying out programs of slum clearance and redevelopment some of the land acquired will be sold outright. In some cases it may be advantageous to retain title to the land and enter into longterm leases with those who are to reuse it. The net capital cost of such a program will then represent the whole cost of the land and its preparation for use, less the amounts realized on the portion sold and the use-value of any land retained under lease. The cities will probably require no very large loans from the Federal Government except temporary loans up to the time the projects are ready for permanent financing. There is little question that local governments will themselves be able to obtain the necessary permanent loans in private financial markets, except for amounts equal to the value of any land retained under lease, provided that the Federal Government will assist by making annual contributions as provided in this bill. The cities, under the bill, must assume one-third of the net cost of any project.

The Federal contribution will thus serve to write off two-thirds of the loss involved in scaling down high land costs in the central parts of our cities and make it possible to reuse the land in the best interest of the community and without letting the prices paid for the land again force us to overintensive land uses and a pattern of exploitation which would cancel our gains.

For the record, we want it plainly understood that this is a subsidy to the cities and that we recognize it as such. It might be possible through devious financial subterfuges to hide this subsidy. Let us not camouflage the issue. The cities are asking the Federal Government to bear a part of the cost of clearing out the slums.

The use of annual contributions for this purpose has two signal advantages. First of all, no city wants more funds than it actually needs. If in the future the revenue from land increases, the contribution of the Federal Government would correspondingly decrease.

In the second place the pledge of annual contributions means that the cities will have to ask only for relatively small capital loans from the Federal Government, all of which are to be repaid in full. It will be of great advantage if the Federal Government is not called on for any capital grants. If capital grants for an adequate redevelopment program had to be provided through Federal appropriations this would substantially increase the immediate burden of taxation. Annual contributions represent a pay-as-you-go plan, with the amount paid in any year relatively small when compared with the tremendous and lasting good which will be accomplished.

While the cites will naturally accept assistance in whatever form the Congress determines, it seems to us that the annual contribution method is by far the most feasible.

The question next arises as to what agency should administer such a broadened program of slum clearance and redevelopment. This of necessity would be a public program and will be almost inextricably related to the provision of low-rent housing. The slum areas to be cleared are predominately in substandard residential use, and the lowincome families living in them must have decent and adequate accommodations provided for their use at rents within their means. Such provision is required under section 802 of S. 866. In some cases the cleared areas may be redeveloped for public housing, which will provide new low-rent dwellings equal in number to all or a part of the dwellings demolished. Where the cleared areas are devoted to other uses such as middle-class or more expensive housing or public uses, equivalent accommodations must be provided elsewhere as a part of a public housing program. For these reasons we feel that the broadened slum clearance and redevelopment programs should be administered by the same agencies that administer the public housing programs.

On the local level, as you know, many of our cities, including almost all of the large cities, have well-established local housing authorities. These authorities have been set up by the city councils and their their members appointed by the chief executives of the cities. In a number of States recent legislation has conferred urban redevelopment powers on these local housing authorities. The powers of many other authorities are already broad enough to enable them to serve as the local agency through which a broadened slum clearance and redevelopment program could be carried on. Since the local housing authorities are municipal agencies we will have a firm assurance that their plans for the redevelopment of slum areas conform with the plans of the city government, including those of the city planning commission. The mayors of our cities have had experience in working with these authorities and have every confidence in them. They represent a broad base of community interests. They are composed of men and women of high integrity and public purpose. The Conference of Mayors urges the full utilization of local housing authorities in any broadened slum clearance and redevelopment program.

We believe that similar reasoning holds good on the Federal level, and that one and the same agency should administer the slum clearance

and redevelopment program and the low-rent housing program. you know, one of the greatest difficulties confronting the cities in their relations with the Federal Government has been the multiplicity of Federal agencies with which they have sometimes had to deal. It would be of great advantage to local authorities operating low-rent housing programs and slum clearance and redevelopment programs if they dealt with the same Federal agency on both matters. The two programs, as we have pointed out, are inextricably related the one to the other, both as to land use, as to the rehousing of families, and as to financial patterns.

We venture, therefore, to suggest to the Congress that the Federal Public Housing Authority, which is already administering the lowrent program, be assigned the job of administering a broadened slum clearance and redevelopment program. Its present store of experience and technical knowledge will be of great value in this program. The cities have already had many dealings with the FPHA in the provision of both war and low-rent housing, and would be well satisfied to continue to deal with it. The FPHA has performed with admirable efficiency under the most trying circumstances, and has shown a real understanding of local problems and needs.

Turning now to the problem of housing itself, we want to make it clear that we believe that in the postwar period every possible attempt should be made to solve the housing problems of our people through the operation of private enterprise.

Every legitimate assistance should be given private real-estate operators. They should be given the right to lease or to acquire land in redevelopment areas at prices consistent with the use to which the land will be put. High land prices in our central areas would thereafter no longer deter the construction of reasonably priced homes.

It must be admitted, however, that after every attempt has been made there will undoubtedly be a very substantial number of families who cannot afford even the lowest cost houses of adequate standards produced by private enterprise. For these people the only answer is public housing. I believe that we all agree that ideally there should be no families with incomes too low to permit them to pay for adequate housing and purchase the other goods and services necessary for a decent life. However, until such time as our economic system provides such necessary income it is a clear function and duty of Government to see that no family has to live and rear its children in surroundings which are a disgrace to what we refer to with pride as the American standard of living.

The cities of the country have had a visible demonstration of the benefits which can be achieved under the low-rent public-housing program authorized by the United States Housing Act. This program has, within the limit of its resources, accomplished what it set out to do. It has taken families from the slums, and it has made decent housing available to those who would otherwise have to live out their lives in the slums. It has rigidly restricted admission to families of low income except in a relatively few cases of essential war workers who could not otherwise find accommodations. It has made this housing available to them at rents which they can afford without depleting the amounts which their meager budgets allow for other necessities of life.

Our only complaint with this program is that it has been too smallfar too small in relation to the needs. We must have a vast extension of this program and we must have it immediately.

The stresses and severe dislocations which the war has wrought upon our cities makes the problems of housing and of slum clearance and redevelopment more acute than ever before. The cities of America are fully conscious of their responsibility to all of their citizens. They are conscious of the imperative need for a low-rent program with adequate funds, and for a broadened program of slum clearance and redevelopment which will enable us to clean up the slums of our cities within our own lifetimes and pass on to our children a heritage of adequate housing.

I appreciate very much what you gentlmen are doing. I would like at this point to include the fact that officials of the cities of America are deeply grateful for what the Federal Congress has done in helping

us.

As most of you know, cities of America are legislative captains of their Government. They are financially starved. They are stepchildren.

The CHAIRMAN. In some cases they cannot even appoint the police commissioners.

Mr. WELSH. That is right. Due to the fact that we have had several distinguished members of your body who have met the problems of people on the city hall steps, we are making progress.

I have just recently completed a trip with my colleagues through 10 cities of the Southwest. The picture that we saw was not a very pretty picture.

The coming years will witness the building, out of the dust and ashes of the bombed areas of Europe, of some of the greatest cities the world has ever seen. The new Warsaws, Rotterdams, and the Coventrys will rise with majestic grandeur out of the devastation and ravages of war. Part of our own funds will go to make this possible.

The CHAIRMAN. Through the International Bank.

Mr. WELSH. While all of this is happening are we here in America to witness the gradual decay of our great American cities and the continued development of slums and blighted areas in which no human being should be expected to live?

The CHAIRMAN. I think you have made a very graphic point there. Mr. WELSH. We have a much higher obligation and duty. That is to provide a decent shelter for those returning veterans who came back after having given their all for their country. I have just returned from a series of visits to 10 important cities in the country and if you gentlemen could see the conditions under which some of our veterans and their families are now existing, you would revolt against a society which permits such treatment of those who carried on the fight, to see the children in the streets, and think that those are the future citizens of this great Republic of ours.

The CHAIRMAN. And as the years go by, they are brought up with the lack of these conditions, and nothing will ever replace it.

Mr. WELSH. We ask therefore, that this committee concerned with these problems on the national level recommend passage of this great measure which will assure the survival of our cities as institutions of which we can be proud and make certain the rights of every American family to a decent home.

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