The CHAIRMAN. I think you have been one of the most valuable witnesses. Senator CAIN. Mr. Mayor, do you see anything in the bill with which you disagree? Mr. WELSH. The matter of administration, so that we did not have to go to three or four different offices. That alone I think would help. Senator CAIN. You think that you would like to prepare a criticism of the bill? You have commented rather fully in supprot of the bill. This committee is faced with a very practical task, not only of considering its merits and virtues, but of considering its practical aspects, too. If in your experience, representing a number of mayors of this country, you could make certain constructive criticism, I know we should all be indebted to you. Mr. WELSH. I shall do that, and will be glad to submit it. I would like to have inserted in the record at this point a statement showing how the bill would work out in a typical community of 500,000. (The statement is as follows:) Example of urban redevelopment under S. 866-city of 500,000 population-total project area of 100 acres B. LAND USE AFTER REDEVELOPMENT 16 acres sold for privately developed upper-income housing. 5 acres leased for commercial development. 5 acres school and playground. 6 acres park. 24 acres streets. 100 acres, total in project area. C. GROSS PROJECT COST Project expenditures by local public agency: $3,600, 000 Demolition and clearance of old buildings. 60, 000 325, 000 Administrative, planning costs, and carrying charges__ Example of urban redevelopment under S. 866-city of 500,000 population-total project area of 100 acres-Continued C. CROSS PROJECT COST-continued Local grants-in-aid, other than cash: Land and improvements, etc., donated by city to local public body- Expenditures by city in project area Total gross project cost- D. NET PROJECT COST Gross project cost Less land sold or leased (fair value in reuse): 16 acres sold for privately developed upper-income 28 acres leased for privately developed middle-in- 16 acres sold for publicly developed low-income 5, 000, 000 $320, 000 504, 000 256, 000 Cash grant to local public agency to meet requirement as to amount of local grants-in-aid.. Land and improvements, etc., donated by city to local public agency: 423, 333 Site improvements on project land (sidewalks, etc.) 1 acre tax-foreclosed land donated at approximately. $60, 000 Expenditures by city in project area: 5 acres purchased by city for school playground and Total, local grants-in-aid....... 150, 000 300, 000 150, 000 90,000 20, 000 15, 000 25,000 600, 000 1, 173, 333 Example of urban redevelopment under S. 866-city of 500,000 population-total project area of 100 acres-Continued G. COMPLIANCE WITH LIMITATION OF S. 866 1. Annual contribution base must not exceed % of the net project cost: 1⁄2 of the net project cost of $3,520,000 amounts to.. 2. Local grants-in-aid must be at least equal to % of the net project % of the net project cost of $3,520,000 amounts to.. (NOTE. In accordance with the provisions of S. 866 the above limitations are applicable to aggregate amounts for all of the projects in the locality.) H. PERMANENT FINANCING OF PROJECT EXPENDITURES Proceeds of sale of land ($320,000+$256,000). Cash grant by city to local public agency. Proceeds of bonds sold to private investors, secured by pledge of Federal annual contributions. Proceeds of bonds sold to Federal agency, secured by pledge of rentals on leased land ($504,000+$400,000) Total project expenditures by local public agency. $2,346, 667 2, 346, 667 1, 173, 333 1, 173, 333 576, 000 423, 333 2, 346, 667 904, 000 4, 250, 000 I. ESTIMATED ANNUAL COST OF PROJECT TO LOCAL PUBLIC Annual cost of project: Debt service on bonds sold to private investors, totaling $2,346,667; 14 percent interest and 45-year amortization requires 3.23 percent per year Debt service on bonds sold to Federal agency, totaling $904,000; 21⁄2 percent interest and 45-year amortization requires 3.73 percent per year___ Overhead of local public agency in connection with project_- Total annual cost of project___ Less annual income of project: 75, 797 33, 719 4,000 113, 516 Rental of land valued at $400,000 for privately developed commercial use, at 4 percent net per year Rental of land valued at $504,000 for privately developed middle-income housing, at 4 percent net per year.. $20, 160 16, 000 36, 160 77, 356 Annual contribution required from Federal agency. Legislation requires that Federal annual contributions (in this example, $77,356) must not exceed the annual yield, at the applicable going Federal rate plus 1 percent, upon the annual contribution base: Annual contribution base.. Federal annual contribution (assuming going Federal rate of 21⁄2 percent) must not exceed 31⁄2 percent of the above amount or 2, 346, 667 82, 133 Example of 1 year program of urban redevelopment under S. 866—Annual contribution authorization of $4,000,000 A. GROSS PROJECT COSTS Project expenditures by local public agencies. Land and improvements, etc., donated by cities to local public agencies Expenditures by cities in project areas Total gross project costs.. B. NET PROJECT COSTS Gross project costs-- Land sold for private development, 40 percent. Net project costs.. $232, 000, 000 13, 000, 000 40, 000, 000 285, 000, 000 285, 000, 000 $43, 000, 000 43, 000, 000 108, 000, 000 177, 000, 000 C. LOCAL GRANTS-IN-AID (Averaging 36 percent of net project costs) Cash grants to local public agencies to meet requirements as to amount of local grants-in-aid__ Land and improvements, etc., donated by cities to local public agencies. Expenditures by cities in project areas. Total, local grant-in-aid. D. ANNUAL CONTRIBUTION BASES (Averaging 64 percent of net project costs) Net project costs_ Less local grants-in-aid_ Annual contribution bases - - Maximum annual contributions at 31⁄2 percent (assuming going Federal rate of 21⁄2 percent) would amount to the total authorization of $4,000,000. E. TEMPORARY LOANS REQUIRED BY LOCAL PUBLIC These temporary loans could be obtained from private investors; secured by Federal agreement to loan funds to extent needed at time of permanent financing. Example of 1 year program of urban redevelopment under S. 866—Annual contribution authorization of $4,000,000—Continued These amounts could be obtained through sale of bonds as follows: (b) Bonds sold to Federal agency, secured by pledge of rentals Total_____ 114, 000, 000 43, 000, 000 157 000, 000 The CHAIRMAN. Mr. William Reid, assistant to the mayor of the city of New York. STATEMENT OF WILLIAM REID, ASSISTANT TO THE MAYOR, APPEARING ON BEHALF OF THE HON. WILLIAM O'DWYER, MAYOR OF THE CITY OF NEW YORK, AS REPRESENTATIVE OF THE UNITED STATES CONFERENCE OF MAYORS Mr. REID. I am William Reid, assistant to the mayor of New York. The mayor could not get down. He very much wanted to come. I have a prepared statement that I would like to submit. I would like, in connection with it, to also request if I might submit, in view of what I have heard since I came here, a memorandum as to whether we would have any objections to the bill, or what objections we may have. Senator CAIN. I think any opinion of yours would be gratefully accepted. The CHAIRMAN. I concur. Mr. REID. The Wagner-Ellender-Taft general housing bill, S. 866, would establish a broad housing program for the Nation. Its basic purpose is to assure the construction of adequate shelter for all sections of the population. The well-being and continued growth of our Nation depends uopn the extent of our success in providing good homes in sufficient number. To remedy past shortcomings of housing production and supply for the low- and moderate-income groups, the bill provides commendable assistance. All in all, the measure is a long step forward to solve what is undoubtedly the country's most pressing need. Many of the cities in this country are confronted with a housing shortage so serious that it jeopardizes the health and family life of our citizens. Those hardest hit are veterans and their families. The chief executives of our cities must do everything they possibly can to endeavor to solve the problem, as should every other public official. You will agree with me, I am sure, that we have had enough explanations, excuses, and historical reasons for the crisis which confronts |