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development in cities where a local group has had an opportunity to go in and redevelop land, but they have had to pay what it cost to assemble that land and the cost was so high the project was not sound economically.
The CHAIRMAN. New York State passed a law, too, you remember that, and they have appropriated large sums of money to aid in slum clearance.
Mr. FARR. We have a law in the State of Illinois which was enacted at the last session of our legislature which will also help along those lines; that we think is constructive. We think that the wise way to assemble land and make it available
The CHAIRMAN. What do you do with the poor people under your act?
Mr. FARR. Well, every time a new house is built, whether it is in the low-income bracket or the middle bracket, or the high bracket, it provides accommodations for someone to live in. We want to provide accommodations, as I see it, for people in all brackets to have living accommodations. If you take a family out of a lower price house and put them into a higher price house, the lower price house is available for someone else.
I don't think we should confine ourselves entirely to the construction of the minimum-cost home. I think we should provide for the type of people who are in this room today, to have places to live. Many of our friends cannot find apartments or houses to live in today. I think people in all classes should be housed, and the more housing that we can produce of different classes the more it will help alleviate the situation.
Senator ELLENDER. That is what we had in mind in providing more tools so that private industry could do more of the job."
Mr. FARR. We respect that provision of the bill.
Senator ELLENDER. You respect everything in the bill except public housing, as I understand it, generally speaking.
Mr. FARR. There are certain points we are raising in this statement here.
Senator Wagner, Mr. McCord is trying to catch a train. I have missed mine, but he can still catch his, and he would like to file his statement before he leaves.
The CHAIRMAN. Very well. Who is that?
Mr. FARR. Mr. Paul McCord, of Indianapolis.
The CHAIRMAN. Oh, yes. He is with the United States Chamber of Commerce.
All right, Mr. McCord.
STATEMENT OF PAUL L. McCORD, PRESIDENT, INDIANAPOLIS REDEVELOPMENT COMMISSION, INDIANAPOLIS, IND.
Mr. McCORD. Mr. Chairman, my name is Paul L. McCord. I live in Indianapolis and I am president of the board of commissioners of the recently established Redevelopment Department of the City Government of Indianapolis. I am appearing on behalf of the Chamber of Commerce of the United States and I have brought with me to assist in making this presentation William H. Book, executive vice president of the Indianapolis Chamber of Commerce.
I am sorry I have to rush off because I would like to answer the question that Senator Ellender has been asking all afternoon. I am here to tell you a little about how we in Indianapolis have met with our own resources and our own ingenuity the problem that you gentlemen are trying to solve on a national basis.
This is a redevelopment plan at the city level. It is working. It is not theory. It is practical. I would have much preferred to have delivered this discussion here and subjected myself to your questioning, but that seems to be impossible, so I will present this statement. Senator ELLENDER. Is that the so-called Indianapolis plan we heard about this afternoon?
Mr. McCORD. That is correct.
Senator ELLENDER. How much slum have you cleared?
Mr. McCORD. We are in the process of developing the first area.
Mr. McCORD. The law was just passed in March, at the general assembly.
Senator ELLENDER. Does the State furnish the funds?
Mr. McCORD. The State does not.
Senator ELLENDER. The city does?
Mr. McCORD. We taxed ourselves to the extent of 10 cents in our tax levy which furnishes us-——————
Senator ELLENDER. Ten cents per thousand?
Mr. McCORD. Per hundred dollars, in the general levy, and in Indianapolis
Senator ELLENDER. Is that $10 per thousand?
Mr. McCORD. $10 per thousand. Our tax rate is $3.45, if I remember right, per $100. Out of that 10 cents goes for some slum clearance. That is a sufficient sum of money to do that job. I think if you will examine this plan you will see in it an idea that bigger cities can take to their bosom because they have more money to work with than we do.
Senator ELLENDER. Do you find it very difficult to get the local people to vote such a tax?
Mr. McCORD. We did not. We had a very substantial majority in both houses of the legislature. There was no difficulty before the board of review when the tax levy was discussed.
Senator ELLENDER. This land is purchased by an authority and it is charged down to an economic price-that is, one that would give a better return to the investor?
Mr. McCORD. That is correct.
Senator ELLENDER. Then how do you plan to build on that?
Mr. McCORD. That property will be replotted, replanned, and restricted so that it will get into the right usage and fit into the city's master plan, and be sold to private enterprise for redevelopment and financing through the FHA.
Senator ELLENDER. You have to get Government dollars to rebuild it-FHA, or some plan that we have?
Mr. McCORD. That is correct. The FHA.
Senator ELLENDER. I presume you are for this bill, except the publichousing feature, aren't you?
Mr. McCORD. No, I am not; but that is a long, long story and I have only got a few minutes.
The CHAIRMAN. May I ask you one question? You are clearing the slums?
Mr. McCORD. That is right. I have some pictures here I would like for you to see. Those I am going to leave with you.
The CHAIRMAN. What do you do with those displaced people, or slum dwellers?
Mr. McCORD. There are enough undeveloped areas in most of our slums, as we studied them-I didn't know our slums until we started to study them-we found there is enough undeveloped areas in most of our slums to start developing, so that these people can be gradually moved out.
The CHAIRMAN. Where do you move them into?
Mr. McCORD. Our studies have developed the fact-and this is factual, this is not guesswork-our studies have developed the fact that a majority of the people living in the bad housing are able and willing and anxious to have better housing and can pay for it.
Senator ELLENDER. You have a lot of folks in your city, I presume, that prior to the war and probably after the war, will get from $800 to $1,200 a year.
Mr. McCORD. That is correct.
Senator ELLENDER. You think you will be able to provide decent housing at a rent commensurate with their ability to pay?
Mr. McCORD. No, sir. It is absolutely insane to think
Senator ELLENDER. Well, how do you propose to take care of those people?
Mr. McCORD. Senator, as you make housing available at the lowest income level, there is always a filtering down, that is one way. Are you going to penalize the people in housing who have shown thrift in this country? There is only going to be a limited amount of building material and labor available in the next 2 years. Who should get housing first, the people who have shown some thrift and are able to pay rents or purchase, or the people who are the poor, whom we will have with us always?
Senator ELLENDER. Then your system is the same as that advocated by Mr. Farr-that is, as people move out of the old housing the lower group can come in and occupy these vacated homes.
Mr. McCORD. I was born in an old house, and I expect you were too. Senator ELLENDER. Sure I was.
Mr. McCORD. There is no disgrace in living in an old house. Senator ELLENDER. I was born in one that cost less than $100. Mr. McCORD. My house was green. I know plenty of people that live in old houses. I live in a 25-year-old house today, but that doesn't mean it is a slum. It doesn't have to be a slum.
Senator ELLENDER. Well, you have facilities in that.
Mr. McCORD. It is our purpose to eliminate those houses without facilities, just as fast as humanly possible. We think so far as past record is concerned we can do it faster than the Federal Government.
Your bill proposes that the Federal Government engage in a tremendous housing program that includes a comprehensive redevelopment operation. This means that you are proposing to use Federal funds to assist municipalities in such projects. We in Indianapolis are already doing this job. We are doing it with no assistance from
the Federal Government. We are do not need that assistance, and we do not want that assistance. We think that on the basis on which we are proceeding, most cities-perhaps all cities-can do the same. The bill which you are considering involves the Federal Government in intricate municipal operations. To my mind this is unnecessary. Why? Let me tell you about what we are doing in our communitya metropolitan area of 400,000 people who are deeply conscious of public debt and their own responsibility to meet their own problems without financial crutches furnished by the United States Treasury. May I take a few moments before describing the Indianapolis redevelopment plan, to describe a few of the characteristics of the city, which have a bearing on the conception and execution of the plan? Indianapolis is a city of about 400,000 population within its official borders, plus about 70,000 who live under urban conditions around its perimeter.
It is 125 years old; the second largest State capital.
Of its total population, there are at this time about 185,000 persons gainfully employed. They are roughly divided into main classifications as follows: Industry, 100,000; retail, wholesale, and service trades, 53,205; employees of State, local, and Federal Governments, 16,351; and miscellaneous occupations, 15,444.
From the above it will be noted that while this is a State capital, with substantial employment from the public service, it nevertheless is an important manufacturing center, and hence could be expected to have problems that arise from growth and expansion and offsetting blight and retrogression that mark all such large cities.
It has, however, an area of 53.86 square miles within its official borders, and the urban population on the outside of the official city is contained within approximately 15 square miles, which means that it has an average density of population of 11.6 persons per acre within the city, and 7.29 in the area outside, or an average of 10.66 persons in the entire metropolitan area. That is an important characteristic to note, because it is substantially lower than that of typical eastern cities, and somewhat lower than most older cities in the Midwest.
Indianapolis, therefore, does not have extensive closely built-up areas of tenements and row houses. It does have, however, numerous areas in which property has suffered severe depreciation, so as to be properly classified as slums which are common in all of our large cities. In these areas, unsanitary, congested, unkempt housing has been a major factor in the prevalence of disease and crime. These areas, according to our official records, produce contagion and other health conditions, far out of proportion to their percentage of the total population. Likewise they require expenditures far above the average for crime control and social-welfare activities of government.
Far from producing in tax revenue enough money to pay the costs of governmental services which they require, they are a heavy drain upon all the rest of the taxpaying community. These facts were gathered to determine whether the citizens, through their municipal government, had justification for spending tax money to remedy these conditions. The committee then concluded that the local government was fully justified in doing so if for no other reason, because it could make these areas more nearly self-supporting, but that it also had the obligation to do so for the welfare of all of its citizens.
The official municipal committee on postwar planning decided unanimously that this constituted one of the most important problems. of the community, and it endeavored to develop a practical, workable, method for its solution.
Studies then were made of two blighted areas. One was comparatively small, situated in an area surrounded by industry, and which when cleared of its slums should be devoted to other industrial uses. The other was perhaps the largest slum area in the city, almost exclusively inhabited by Negroes. Both were within a mile of the center of the city.
These areas were surveyed to learn the number and characteristics and probable cost of acquisition of the properties involved; the number of dwelling units contained; the number of families and of individuals living within the areas; the average income of the family units; other social characteristics of the inhabitants, and prospective best land use under conditions of planning and control.
From these studies, the committee reached several conclusions. They are, briefly stated, as follows:
1. That the task of acquiring such areas and clearing them for redevelopment could not be carried out by private capital alone, because the cost of original purchase of the improvements on such an area and the clearing of such improvements to make the land ready for redevelopment would exceed any likely return on the investment; and, further, that so much vacant land within and outside the city is available for development that capital naturally turns to the land which is the least expensive or on which there is the greatest certainty of some profit.
2. That government could be reasonably expected to share in the enterprise because of the city-wide public benefit that would result from removing these sources of disease and crime which are a great expense to the entire community, and for the further reason that the securing of title to such large areas, of so many individual property units, would undoubtedly require the use of the local government's right of eminent domain.
3. That public subsidy should be confined to this one method of contribution, and no other means, such as tax exemption, should be employed. Our law specifically provides that the land acquired and the improvements on it never shall be exempt from taxation, unless and until it should be dedicated to a public use, such as public parks.
4. That the enterprise for our community did not exceed our own ability to finance out of local tax resources, and that we could pay for it out of current income without having to borrow a dime.
The committee believes that in this respect we are no different from all other urban centers. It is unreasonable to contend that the Federal' Government can afford to engage in such activity, in the committee's opinion.
The Federal Government must find the resources to pay for the Nation's greatest depression and now the fantastic costs of a cataclys-mic war. It must obtain its revenue, in the long run, from the very people of the cities and the farms, who merely pay their taxes for State and local government a little differently than they pay their taxes for Federal purposes.
Any plan of Federal taxation that has been proposed or considered for the postwar period contains no provision for any enlargement of Federal grants to the local governments. Hence, it is only reasonable to assume that any such extension will be financed by further deficitson borrowed money.
If we, therefore, in our city can raise the money now to pay the cost of slum redevelopment, why should other cities not be able to do so,