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

'A. EXISTING LAND USE AND PROPOSED CHANGES

65 acres privately owned

2 acres site of existing school_.

3 acres existing park

1 acre tax-foreclosed land__

60 purchased by local public agency, 5 by city.

2 retained by city.

3 retained by city.

1 donated to local public agency.

29 acres existing streets and alleys.---- 24 retained in streets, 4 vacated to

local public agency, 1 vacated to city.

100 acres, total in project area.

B. LAND USE AFTER REDEVELOPMENT

16 acres sold for privately developed upper-income housing.
28 acres leased for privately developed middle-income housing.
16 acres sold for publicly developed low-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:
60 acres purchased at approximately $1.50 per
square foot (including old buildings costing
$1,200,000) -

$3,600, 000

60, 000

325, 000

charges.

265, 000

$4,250,000

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
housing, at approximately 50 cents per square
foot__

28 acres leased for privately developed middle-in-
come housing, at approximately 45 cents per
square foot_

16 acres sold for publicly developed low-income
housing, at approximately 40 cents per square
foot___

5, 000, 000

$320, 000

504, 000

256, 000

5 acres leased for commercial development, at ap-
approximately $2 per square foot_____

Net project cost__.

3, 520, 000

E. LOCAL GRANTS-IN-AID

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:

1 acre tax-foreclosed land donated at approximately .
$1.50 per square foot----

Site improvements on project land (sidewalks, etc.).

Expenditures by city in project area:

5 acres purchased by city for school playground and
park, at approximately $1.50 per square foot___
Paving and necessary relocation of streets and
changes in sewer and water systems___
Remodeling and extension of existing school.
Improvement and equipment of school playground.
Improvement of existing park and addition_
Construction of new public health clinic..

Total, local grants-in-aid.......

423, 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
Annual contribution base__

$2, 346, 667

2, 346, 667

2. Local grants-in-aid must be at least equal to % of the net project

1, 173, 333 1, 173, 333

cost:

% of the net project cost of $3,520,000 amounts to..
Local grants-in-aid...... - -

(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 Fed-
eral 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.

576, 000 423, 333

2, 346, 667

904, 000

4, 250,000

I. ESTIMATED ANNUAL COST OF PROJECT TO LOCAL PUBLIC
AGENCY AND ANNUAL CONTRIBUTIONS REQUIRED FROM
FEDERAL AGENCY

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.

Overhead of local public agency in connection with project_.

Total annual cost of project_ -

Less annual income of project:

Rental of land valued at $504,000 for privately developed middle-income housing, at 4 percent net

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.......

$20, 160

16, 000

36, 160

77, 356

Annual contribution required from Federal agencyLegislation 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..
Less:

Land sold for private development, 40 percent.
Land leased for private development, 40 percent.
Land sold for public housing, 20 percent__

Net project costs.

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:
(a) Bonds sold to private investors, secured by pledge of
Federal annual contributions___

(b) Bonds sold to Federal agency, secured by pledge of rentals
on leased land.............

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