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COMPARATIVE ANALYSIS OF THE PRINCIPAL PROVISIONS OF STATE URBAN REDEVELOPMENT LEGISLATION

(National Housing Agency, Office of the General Counsel, October 31, 1945)

INTRODUCTION

This analysis relates to State legislation (other than housing authority laws) designed to facilitate and make possible the clearance of slum, blighted, and deteriorating areas in our local communities and the rehabilitation and redevelopment of such areas. The statutes enacted to date fall logically into three main groups and are treated on this basis in this study, which is, therefore, divided into three parts-one for each group.

Part I treats those statutes intended to encourage private enterprise, through the operations of private urban redevelopment corporations, to accomplish both of the two basic phases of urban redevelopment: (1) land assembly and clearance, and (2) the actual redevelopment of the area. Toward this end certain public powers and aids are granted or made available to these private corporations. Part II deals with those statutes where the responsibility for land assembly and clearance (as distinguished from the subsequent redevelopment of the area) is placed upon the municipal bodies themselves, which generally already possess the public powers necessary for this purpose, or other local public instrumentalities. Under these statutes, actual redevelopment of the area still remains basically the job of private enterprise. The statutes treated in part III involve substantially the same approach as those in part II except that the legislation specifically designates local housing authorities as the public body for accomplishing the initial task of land assembly and clearance.

It will be noted that the statutes of 11 States are analyzed in part I, of 11 States n part II, and of 4 States in part III. Allowing for 6 States which have statutes alling into more than one of these groups, there are altogether 20 States which have, as of the present time, enacted urban redevelopment legislation.1

The following chart indicates the States now having urban redevelopment egislation and the part in this analysis where the legislation is treated:

Urban redevelopment corporation laws, which have been enacted in 11 States, uthorize the creation of private corporations for the purpose of undertaking rojects to acquire and clear slum, blighted, or substandard areas, and to construct nd operate in those areas dwelling accommodations and appurtenant commercial or recreational facilities. These projects are authorized to be undertaken with he assistance of certain public powers, privileges, and exemptions, and so are ubject to certain limitations, regulations, and supervision by public bodies. The orporations, known as redevelopment companies or corporations, are given all ecessary general corporate powers, including the power to borrow money and ssue bonds. In 6 States, the laws are applicable to any city or other municipality

In addition, the Ohio Legislature, during its 1945 session, created a committee to develop an urban reevelopment bill to present to the next session of the legislature. Also, there is now pending before the ongress a bill, already enacted by the Senate, providing for an urban redevelopment program for the -istrict of Columbia.

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or county. In the other 5 States, they are applicable only to the largest city or cities in the State.

All of these laws require that before a project may be undertaken by a redevelopment corporation, detailed plans for its location, construction, and operation must be approved by one or more designated agencies of the municipality, including generally its planning commission. The detailed plans of the project must usually include a description of the land and buildings to be acquired, the dwelling, recreational and other structures and open spaces to be provided, anticipated costs and method of financing, a statement of the approximate rentals to be charged, and data to show that the project will not cause undue hardship to families then living in the area to be affected by the project. Additional public controls and regulations are provided by all of the laws, including usually a limitation on the amount of dividends a redevelopment corporation may pay each year, restrictions designed to prevent the transfer of a project for a use not intended by the law, and the general supervision of a redevelopment corporation's finances and financing operations by a designated agency of the municipality.

All of the laws provide for assistance through the power of eminent domain for projects of redevelopment corporations, authorizing the exercise of the power either by the corporations themselves or by municipalities for the corporations. The laws generally authorize public and private agencies and fiduciaries to invest their funds in obligations of a redevelopment corporation and to sell or lease property to be used for a project of a redevelopment corporation and accept stock or obligations of the corporation in exchange. Over half of the laws authorize, in widely varying degrees, some form of partial tax exemption, or exemption from increased assessment for tax purposes, of projects of redevelopment corporations. Some of the laws provide for other public assistance to such projects, including certain financial assistance and the furnishing of streets, parks and other public

works and facilities.

II. CITATIONS TO LAWS

(a) Illinois: Laws of 1941, pages 431 to 460, H. B. 179.

(b) Indiana: Laws of 1943, chapter 307.

(c) Kansas: Laws of 1943, chapter 118.

(d) Kentucky: Acts of 1942, chapter 36.

(e) Massachusetts: Laws of 1945, chapter 654.

(f) Michigan: Public and local acts of 1941, No. 205, as amended by public acts of 1945, Act No. 102.

(g) Minnesota: Laws of 1945, chapter 493.

(h) Missouri: Laws of 1943, H. B. 239.

(1) New Jersey: Laws of 1944, chapter 169.

() New York:2 (1) Laws of 1942, chapter 845, as amended by laws of 1943, chapter 234. (2) Laws of 1941, chapter 892.

(k) Wisconsin: Laws of 1943, chapter 333, as amended by chapter 475, laws of 1945.

III. SHORT TITLES OF LAWS

(a) Illinois: "The Neighborhood Redevelopment Corporation Law."

(b) Indiana: None.

(c) Kansas: "Urban Redevelopment Law."

(d) Kentucky: None.

(e) Massachusetts: None.

(f) Michigan: "Urban Redevelopment Corporation Law."

(a) Minnesota: "The Neighborhood Redevelopment Corporation Law."

(h) Missouri: "Urban Redevelopment Corporation Act.'

(i) New Jersey: "Redevelopment Companies Law."

() New York: (1) 1942 law-"Redevelopment Companies Law." (2) 1941 law "Urban Redevelopment Corporation Law."

(k) Wisconsin: "Urban Redevelopment Law."

New York has two separate statutes, one enacted in 1941 and one in 1942, having the same general purpose but with the following differences: (1) The 1941 law does not provide that insurance companies can organize, or cause to be organized, redevelopment companies and purchase and hold the stock of such companies. (2) The 1941 law authorizes a city to grant tax exemption to projects of a redevelopment company for a period of not more than 10 years, instead of a period of not more than 25 years as provided in the 1942 redevelopment companies law. (3) The 1941 law does not provide that a redevelopment company can at any time elect to pay the total amount of all such tax exemption with interest and thereby become free of all restrictions and public controls applicable to tax-exempt projects. Both these laws are discussed in greater detail in this part and for purposes of convenience are referred to as the 1941 law and 1942 law, respectively.

IV. MUNICIPALITIES AND COUNTIES TO WHICH LAWS ARE APPLICABLE

(a) Illinois: Any city, village, or incorporated town.

(b) Indiana: Any city, town, or county.

(c) Kansas: Any city which now has or shall hereafter have a population of 110,000 or more (which has the effect of limiting the present application of the law to Kansas City and Wichita).

(d) Kentucky: Any city of the first class (which has the effect of limiting the present application of the law to Louisville).

(e) Massachusetts: Any city or town.

(f) Michigan: Any city which now has or shall hereafter have a population of 150,000 or more.

(g) Minnesota: Any city of the first class (which has the effect of limiting the present application of the law to Duluth City, Minneapolis, and St. Paul).

(h) Missouri: Any city which now has or shall hereafter have a population of 700,000 or more (which has the effect of limiting the present application of the act to St. Louis).

(1) New Jersey. Any municipality, including any city, town, township, village, or borough or any municipality governed by a board of commissioners or an improvement commission.

6) New York. (1) 1942 law-Any city, town, or village. (2) 1941 lawAny city.

(k) Wisconsin. Any city.

V. ORGANIZATION AND CHARACTERISTICS OF REDEVELOPMENT CORPORATIONS

(a) Illinois: A neighborhood redevelopment corporation may be organized by three or more persons filing with the secretary of state a verified statement of incorporation, which shall contain certain organizational information required by the neighborhood redevelopment corporation law, and a statement of the purposes of the corporation (which shall include the eradication, rehabilitation, and rebuilding of a slum and blighted area, subject to the supervision and regulation of the redevelopment commission of the city, village, or incorporated town where the slum and blighted area is located). The verified statement shall declare that the duration of the corporation shall not exceed 60 years. Any city, village, or incorporated town may establish a redevelopment commission to supervise and regulate neighborhood redevelopment corporations organized to operate within such municipality. A redevelopment commission shall consist of three to five members appointed for terms of 2 years by the chief executive officer of the municipality, with the advice and consent of its governing body. Such commission may hire employees and fix their compensation, subject to the approval of the city council or the president of the board of trustees of the village or town, as the case may be.

(b) Indiana: Any corporation may be organized under the Indiana General Corporation Act to exercise the rights and powers contained in the redevelopment law if its articles of incorporation shall state that: (1) Such corporation is incorporated for the purpose of acquiring a slum or blighted area for redevelopment, with a description of the community in which such area is located; (2) the dividend rate on any stock of the corporation shall not exceed 6 percent of its par amount, until the expiration of the period during which the assessed valuation of the corporation's property is limited under the redevelopment law; and (3) no stock shall be issued by the corporation except. in return for money or for property having a fair cash value equal to the par amount of the stock.

(c) Kansas: Within 10 years of the effective date of the law, a redevelopment corporation may be organized pursuant to the corporation code of the State, by three or more persons filing with the secretary of state articles of incorporation which shall be in accordance with such code, except that such articles must state that the purpose of the corporation is the formulation, construction, and operation of a redevelopment plan pursuant to the urban redevelopment law, and that the duration of the corporation shall be at least 50 years. However, before the secretary of state may furnish a certified copy of such articles of incorporation to the incorporators, he must secure approval of such articles by the State corporation commission. The commission must approve them if it finds the corporation will be organized for a public purpose, that its officers will have the requisite ability to handle the affairs of the corporation, that its plan of organization is There is now pending in the State legislature a bill, senate bill No. 42, which would in effect extend the provisions of the existing statute to include cities with populations of between 350,000 and 700,000.