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PL 86-372 S. Rep. No. 41_ 86th Cong._ 1st Sess. _1959_. To

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PL 86-372 S. Rep. No. 41_ 86th Cong._ 1st Sess. _1959_. To Powered By Docstoc
					                                                         Calendar No. 38
MTH                             SCNATC
                                                                            fKEI'OKT
                                                                            IN T 0. 41




            HOUSING ACT OF 1959


                            REPORT
                                 OK THE


               COMMITTEE ON
           BANKING AND CURRENCY
                            TOfiETHEK WITH

                  INDIVIDUAL VIEWS
                            TO ACCOMPANY


                                 S. 57




             FKOP-I \r.v 3. Ui.Vj.-~ Onic-rcd to ho priiiu-<!
 Fili.il   .'ii.th.-ril; of tin; ...fUr uf tht- :v'ii.-ito uf February 3,


                           rsrri:it STATES
                      iIKNMKNT I'lMNTIXtl HKFICK
                         WASIII.N'UTilX : l!i.-.»
                                                                               .,*

                                                                               1


              COMMITTJiK ON RANKIXG AND CUKREXCY
                         J. IV. FUI.nitlGHT, ArVansi?, Cttiimea
A. WILLIS KOBERTSON. Vireinu                 HOMER E. C.\rEH.\RT. In.Ibra
J1IIX J. Sr.UtKM.lN. Ahtoina                 WALLACE T. HEX-VETT. CfcxJi
J_ ALLEN FKEAK. JK.. IJtUwarc                1'RESCOTT S. IlCSII. Connection
1'Al'L H. IiOl'GLAS.IIIiihu                 J. CSLENN IIKAI.L. Marylan.l
JOSEI-H S. CLARK. I'cnmjlRtnta              JACOI1 K. JAVIT', NV. Y«t
•WILLIAM K. rnOXMIKH. lVi.x<»nsin
KOI1EKT C. nVKP. W.-SJ \lrsjnu
IIAItltlSON A. WILLIAMS. JR.,.\>wJ«s<-y
EDMl-NIJ S. MrsKIE..MJr.e
                               J. II. YKWUNO. aiefClnt
                            Hoir.p.T A. \VAiuire, SU.


                  J.IUC3 A Cjui.Jit.,$:3ffJfi
      II




                                                                               ;j
                                             CONTENTS

    Introduction — '. __________________________________________________ 1
    Tit k- I — FIJA insurance programs                         -----------------------------------                     2'
          Projicrty improvement loans ____________________________________ 2
          Payment of insurance by FHA (technical)                                 ----------------------              "2"
          Increases in FHA mortgage ceilings (one-, tv,o~. and three-family) ___ 2
          Maximum mortgage for nonowner occupant ^                                   ----------------------             2
          l.uw-cte!i housing in outlying areas                       -------------------------------                   3-
\         Kuinoval of mortgage insuraiicf authorization limits ________________ _ .3"
         Incision of certain costs in FHA debentures                                ----------------------             4.
          Regular rental housing program                  ------           ---------------             -----------     4
         Maximum interest rates under certain FJIA programs____________ ___ 5
         Cooperative housing ____ ..... __________________________________ 6
         Eligibility of existing structures for coopemtivc- housing _____ .__ ______ 6
         Mortgage ceilings for A!asl::i, Guam and l!»:r^».-.________7                                         ------   7
         Payment of Si.Tiiw clung* by mortgagor in mortgages assigned to
             FH .'. ................ '....'.. ...... . ..... - ........ -------- ..... 7
         Grip-Till mortgage insurance authorization --- .-._______________..                                          7
         Kepeal of obsolete provision ___ _________ ...... _________________ S
         Housing sn urban renewal areas:
               Sales housing .......... „ ........ .. ----- ..... — ..... ---- 8
               Rnital Iiuii.-ing ........ ... ............. - ............ . ..... 9
         Eligibility of .-.ingle persons for FH.\ section 'J"JO aim 221 bousing ---- 10
         Kelocation housing:
               Elisible families ------------- ........ .. ....... _____ _______ II
               IncT«':i>e in. mortfjage ceilings           ____________                 .....      ---------------    12
               Elij£ible>tructiircs.             ..........................             —           -----------       12
               Xi-w co.-t ceiling for inultifamily rental hou.-ing ________________ 12
               Eligible mortgagor.-!. ...... ..'.               ..................         ___________               12
               Tost ba.«L>s for iii>ur.«nce          ____________________________________                             13
               Technical amendment .......... ___ ......... _______________ 13
         Housing for servicemen ........ ._                 ................        ______            _______         13
         d^t ccftificaiion ...... ----- ............. ...........___________14
         Voluntary termination of insurance ...... ____ ...... ______________ 14
         Avoidance of foreclosure ____ ..... ----- ..... -                              --------------------          14
         Technical amendment ______ ......... - ....... -                              ..............        ...     15
         Occupancy of FHA Iibusin? projrc's bj transient- in. Alaska ________ 15
    Title II— HoUM'nc for the ^Iderly ....... .' _______ ....... . ....... ____ 10
         Kur>ini; Imnn-s. ___ ....... _ ......... .                        ...........          ------------         17
    Title III— I'rban renewal                   ...........                 ..............................            10
         Statewict; piannini;. . .. _____ ..... ........ ___ ...... _______ ___ 10
         Terhircal amendment on certain financing authority ............. ..                                         10
         Eurly laii'l acqiiWtion        _____           ........       .........       ______            ...........  20
         t'rbari n-newal loan :<uthori7'itinn ............ ........ ________ ___ 20
         Cninr aitthiiruaiinn____. ..... ----------- ...... ____ ...... _.                                           20
         Hefinyjiii-nt of iinroKrctibli- .•iilvance>_____...____....._________...                                    22
         ('(immunity renewal program ....                   .................             ___             ......     23
         Technical amendment ............ ..... - ....... .                                   ................       24
         Ileinoial -if liiuitiiLoj on urban rcM nal luan funds in any oncSlalo..                                     24
         Hflorati»n naymrnt*            ........        _____             ........................         ____      24
         Priority tt> Slnte.sc(intribuliri); to local share. . . ___ ..... ___ .. ..... 25
         Nature nf urban renewal plan ........ ; ..... - ..... .                                   .............     26
         Konre.-idential dv\flo]nneiit..., ____ .... - ....... ..... ___ ........ 2C
        .Vo'ira-h grani>-in-:i!iK .              ..........               ... . ... _____ ..... 27
         Piihlir iui]ir<iveiiii-ni> -i-mng ii-nrwiil nn.i-.-                              ..............             27
                                                                                                           in
IV                                                  f OXTKNT-?

Title II I — I'rban renewal— Continued                                                                  .
      Pp-di! lor local iiit>ris-» i>:iy:ii"-il~_        _____       ___       ..                                       2£
      Uni!"»nn ilnti- for !ntiT»->i rat«- t|i-iiTiiiiii:iiio:i ____ . .                               .               2S
      Cn- lit for local j»iil»IiV' iiiiiiruvi-'aisit-.       ......           ........         ...                    20
      I'rluTi n.Tii-wal ar«-.s- ;;.i.j!ii. „ colli-2- - i-r iiiiiviTsiti x ........... ___                           211
      I - 'TI i»htMTiiiiS — -                       .....                     -          ............                 30
      Invt-tn— r«l In baiilsin iu:i<;-T*-riii uitlitiatiiiii~ofiiH.il |u.|i!k .-jH-r.i !>•>__                         31
      Ilatxoiiiria of urban fvnrwal capital -.rratit.-             .                           .                      31
Till.- IV— IAIV--IVIII hoii~iii!!- . _                       ...........................                              33
                        L --      ...........       _...__      . ...     —       ......       . ....... ..-          33
                    i of «oi.:i-y        --------             ...........             .        .......               31
                     r«'J« THAou ;; i.litnman-: ljiiii'Z'-i.i.> T> \l'-\\ .1'.-! .r>;ir>ti:il                        3-J
              ' li'nits jin«1 r«Tit~. . " . . . - . .              . .         ..           . — ...                 3t>
                .                  .__ .                                                               .
     Addiiinri.-tl anihorior.iiiTi--             .....               .........               ~            -           3S
     (ivi-rinciiiiic ti'Kant" ___ ___ .-                              .....                              .-           3fl
     K'.-vi-iou i>f.roiilrar!>. . . . . . . . . . .                -              .....               ...            -10
     Pnivi-i»Ti for r>nl>!it* hnu-ifis in n-m-wal ar«-:(»                               ......                        -10
TiM.r V -(Villisuhousiiis              ______          .........           ____             ............              -11
       IJKIIJ fur ai-H-rsi! « > «iiii.ilio*»:«l I»iirj>i».-f>-.-                       ................               -12
Titlt.- VI — Anni.il s?«rvici.-# -Iiuusiiii; .......... ______ ...... _____ . -------                               -1-1
       FAU-iirfon i if program \» .hint- '.W, 1'JCU         ................ .. ..... ...._                         -1-1"
       NoinluvlHlsi fKCililWS --- : ---- _. .„__               ._- . -r—~ — ---- _     -------            :   J5
      1"1U\ in.-iininct; |>iviniiiin on Wlnrrry lioitsiug by iTiu ^ccrrtary iif                                        '
          '. ii.-fi-a-i-. . - ............ ____ ..... -"               .......................             -"- - - -;    -J5
      Mon.-iii); for (li:fuii>i>iiuj»acli'il art-;i- ...           ___            ...................            . . -1C
      .•\r<|iii.-iiimi <if n-ntal liuii-ini; proji-t-L-                     .............................             -17
TitK- Vi:'-MiM-.-l!:m.:oii-._ ...... ........ ......... . _____ ........... -10
      Fwli-ni! National MortjKiB«.- ,\ssucialioii ...... ---- ........ --------- -19
      FllA MVliun 220 isiaxiyimi mortca^ti.- |u.rch:i>al)l<- bx I">TMA. .. ___ 40
      P:ir p.ittl Jtr .imltT '-'XMA jj)'--cial usistancv fiinctioiur . ....... ____ 50
      Tniii-frr of mortjlasus lo FXMA ..... —                         ........              ...'...____..              51
      Authority tuinvi^i i-\cu-.> funds ----- ......... _-                               .................         ._    o-
      Farm housing n.^-i-arcli ........... ---- — ..... — ........... —                                                52.
      Hoii.-iiig for mianint workers________.-._ ........ . ..... .                                     ........      53
      Siirvf.v of jiulilic works (ihiuriiii^ __________ ...... ________ . ________ 53
      VA MipiTvi*fi! Itndi-rs__________.......------. ----- ...... .....                                              53
      VA iiitrrcsit rates ----- .... ...... .-. — ...... ---- ..... ---- '. ..... 5-1
       Disqualification of K-ndcrs or hnili]i-r<                   .................              -------------          55
      Ailditional VA direct loan authorization _____ ....... ......... ___ 50
      CoiiM>Iii!:i(ii>n of I-nnhain Act a:«l otln;r low-r«-nt projects______......                                    57
       l)i>pu.-:il of liousiiiK projects.. ..... ________ —                         .......        __________           57
      Voluntary Hum«.- M-irtRaRe Crrdit Pro«nim                               -----              ..................     5S
      I'laniiirijf".-ciiul:ir>hip- anil frllow^liip- .......... ___________ ........ _                                   5S
       Home -I IWIUT.- Loan Aei                 .....   ..........      --------               ............        .   5S
       Hospital ro:i-«tnirtioii ...... .. ...... .               ...........................                    ..    50
     i-iiie rot-arch --------- ........ .--------....... ..... . ....... . CO
Cun>|Ari»oii tif aJniifii.-ti.iiii>:. prLpiwaU and S. 57, a> aiiu-ndcd... ..... ___ .01
fi'dioii-liy-M-etioii anah>i- ------- ----------- ..... . ........ -------- . (V?
Curiluii rulf              .................  ------      ... ...... - ........... _. ...... 7C>
Individual ii> «-<'f Mr 1'l.irk, Mr. I>niii*i.^. Mr. Javii>.an<l Mr PruMi.irf.                                             "
lodiviilual \ i f u - of Mr iViiin-li                 .....         ____                    ......             . . S,">




                                                           •J:
                                                             Calendar Nt 38
SGxir CONGRESS          ]               SENATE                    f               HEMMTT
  I.*t Xtxxitti)        j                                         1           .    No. 41




                                   SIXG ACT OF 1050


                    FEHRUACT ". l!i."i!».—Orilrri.il t» Iw i-rintt-d
        Fiktl under fliitliiiritv iiftlieiinlerMrtln-Swiaienf }t_'tiru:ir\ X. >.'•'.>



 Mr. SIMRKMAX. from tin- Committee <nt Banking and Ciirrencj,
                  submitted the following

                    -               REPORT
                                 IT" :lrri.ll)]«lli\ S. ."

   The Committee 01. Baukiii<r aiul Cunviu_>. tn uliom «.-i> ivferred
ilu Iiill (S. TiT) luc.xtriiil aiul iiiiioinl l.rA.- irl.itiiijrtotlu' pruxinuii and
iii.pi'. vi. mnt nf limi.-iiii; ,ui'l 1 1 it- ivin \\iil uf uili.in i.uuiinuiiiiii^. and
fur niliiT i>iirj»...-i->. Iia\ing ••un^iiliTci] tin- saini!. rcpurt fa\oralily
(licivnii \\ it!, .inioiiiliia-nl^ aiul iVLUiiiinun>l that llie bill ;i.> uini'ink'il do
pas-.


   The Cciiii.itt'^L- oi, Briiiking ami CurrfiifV held hearings on, and
consiilcrvil in c.\ceuti\c MV-MOU, tin- M'l\t\\ tins bill>. S. 57, SriiS, S. IJ'3,
S. 1!»K S. iji;,. S. -Jtit:. rf. ^71. S. ^7i, S. :;:JG. S. :>!:}, S. C12. and S. Or.."..
In addiMun i<> the bil^ uthnr p;;<ipi>».il» .UK] rivi)innieiid.tti(;iis in.ule
dnrin<r rlur legislative ht-a rings ,»vere considered.
  The bills and rccuniinci>{.i'tioii» ]>iv?entvil to tlic coinmittue liavo
dealt willi alniuAt evi-rv \Ji.\se of v\\n$ housing program under Lho
]"iiri?diclion of the conunittco. S. 5T.";is amuiidcd by Uic cuminittco
contain?, ainpngotheix-, the following major proposals.
   ]. A subsnTiTTTa^new aiiihorixation for FILV in. '(g.igc insura          nsurance
  2. Tin- (vonifon of a new mortgage i i i a i n a n < c prf/nun for elderly
pei>ons housing.
  :'.. LiU'ralixation of cquit\ rcqnireiimnti. and •.t»t limits for certain
FIIAii-ental housing program?.
  1. A Jong-range extension of tin- nrb:i;, rua-wal progi.im, w i t h
additional capital grant authorization.
   '<. A revision of the public housing program.
                          HOUSING ACT OF 1950

  6. All extension and re\ ision of tlie college housing program. These
major provisions and other features of The bill are discussed more
completely in the following paragraphs.
           TITLE I—FIIA INSURANCE PROGRAMS
                      rnoi-Eirrr nri-KOVE-irexT LOAXS
    Section 101 pi-ovule* for a 1 ;ear extension of tlie title I home
improvement program, until September 30. 1960.
    Tlie home impioiement program lias been useful in presenting resi-
dential deterujr.itiuii aiui obsolescence, The co.itinittei: is hopeful that
t'.ip progtam will cciitiiiue to play i.'s part in preventing shuns and
blight through the medium of iiisitnng lenders against looses on loans
for" tlie repair and rehabilitation of dwellings.
             1'AYMF.Xl l«J INsnrAXTE 1!Y FIIA .TKfMXICAL)

    Section 102 of u.e bill \\otild make technical amendments relating
to the handling of ;>i«|..in>d property and payment of insurance
claims by the FIIA. Tho provision contained in this section have
already been enaoti-J L\ fie Congress for most of the FIIA sales hons-
,;.ii programs, and would bu exJonded by tiiis section to some FIIA
sales, hoiisiri.; pio^i.iius fiun uhiJi such pro^5sions were inadvert-
ently omitted.
    I.\CniL\>» UN FIIA MOinViAGF. CEILINGS < J - . 3-, AND S-FATiniA*)

   Sfctiou 10.1, 'a") uioie.i^c- tlie )i..i.\iiiiiii]] insurable mortgage amount
applicjible to 2 - f a m i h huii^es injured Ijy the FJIA ujider section 203
uf the National TTijiisiiig Act, The new ceiling is $2ri.OOO fora 2 fam-
ily resiileiKC. Tins ch.i:.^k makr^ tlie ranire of ma.xitniini mortgage
iinumnts, a- folium.-; 1- family. *-20.00u: 2 : lfainily, $-2o,000; 3-family,
§27.000: and i-family,>?.°,5.006.'
   In ijrovidii.i' ihi.-. lii^I.cr niuii...ige amount for FITA's basic pro-
                  _
gram, the cnnmtit:,.•«; ha, ivcognized that over tho. pa..t scyoir.l y.^ars
there have ?ini, ..1, i.u.tial iiureaves in the cosls of builcli.i": mate-
rials, labpv, an.l l.ii.d. A tru.d lm& developed in tlie direction ol pro-
         higher pi iced hu!i.-c» which tin; ouUimitlee fuels does not serve
         s market fu. .* w litiinc^. The cuniinittce wishes to express its
                            ihat even clfort should be. made to re\orsc this
tie- a and that ImiLti-is should lie encouraged ; !o diix'ct_(hcirelTqr(s to
|ii ividihg inoie lioii.M! for the m»iit.\. There shciiid also boa contin-
iinl i-lToii (o encoiirago tin. I ichuilding industry to conccnlrafe on
             !.niiic\-, where tin'ilt luand and need arc real and urgent.
                        "MORTGAISK ron



                                                 ising Act (primarily
single f.imily homes). As n rondilion to receiving Jho hi^lipr loan
nmuuiit, the i.oiioiwiei » up.int miisi put into escrow L" jiorcont, of
                            HOUSING ACT OF If 50                                    3

the- original principal aiiiuiint until such tiinc a» he sells the property
to an owiier-o»;eupant. If the property lias not been sold to an owiier-
occupant at the end of an IS month period, tlie funds held in escrow
would be applied io reduce the loan.
   This provision would be helpful to the homeowner .mil the Indus-
try in two respects. First, it will av uld the duplication of closing costs
which may be ciitrently involved a» a result of closing tlie original
loan jit tlie naniu of the noiiowncr-o^cnpant and closing tlie subsequent
loanJn the name of the owner occup.ini. Under this plan, the original
mortgage wo^ld be aligned to tlie ow:icr occupant. Second, many
homo purchasers. *.otla\ already own their homes and "Mill io acquire
larger or improved d wull'ng*. SI icu most of I'icae ov ncrs ha\c accu-
mulated cmiity in their present la mes. they .mist utilize this equity-
as a downpaymeni on the new home. Thus, real estate dealers and
builders must accept trade-in homes in many takers .in lieu of down-
fXiyjiieiiteuiuiiuM home*. This- provision will enable builders pnd real
estate dealers to place a monyriire on the old house In the full amount
available to an ownur-oxxiipaiit and transfer that mortgage to the
new owner when the house is sold.
                   LOW-COST JIOUSIXO UN" OUTl/nXG \KE-\S

    •Swtioii li>;)(i,) inoruaste the maximum iiiaura.ble mort«age amount
'.•nder sectfon -203(i) from SS.OOO to $0,000.
    The special FTLV insurance program under section 203(i) is dc-
sitrneil to .uncouniire low coat-hoiiaing o'Uside of built-up urban arc;is.
.Vduijiiatu standards an- miuired uiuK Jie program, but the minimum
property rtimiruiueiitd are nut a» rigid as iiiosc under the regular sec-
tion 203 program.
    CoiiMituraliic testimony was Lenrd that the section 203(i) progrnin
could l>e made mou> i-.tlWtixe li\ ,i niodi-st iiurea.-e in the permissible
loan ceiling which, under the present law, is §8,000. Jt is hoped that
this, increase will encourage the const ruction cf needed housing in
rural and outlying areas.
       I!?:M<>V..L OF Mnirrr..\<;R IXSXKAXCK .\rTnoi:ix.\Trox i.unrs
   Sixiiun litl would leinovi: inortgage iiisur.ince authorixationceilings
for hoiisiii;.' insured under FITA M-I lion 20:5(i) (low cost housing in
rural areas) and section 701 (yield insurance).
   I'mliT prr.-tMit law, tin- maximum inMirarce aiithoJty under Fl'TA
M-L-tiou ^u:j| i | i.-, ^IIMI million. ITuw e\cr, this maximum is within the
limits \tf the general mortgage i!i>iiraiicc authority as established
uniU-r --L-tiiuii 217 of the National TToiu-.inw.Acl. According to t i ?ti-
i»ion\ pru-;-:iti-d to the tomn.ittoo. there is no longer any reason for
rsialihr.hinw a coiling on this particular prop-am in view of the
fairt that it 5.-? :iln idy co\erod hv the gi-n.ral mortgage insurance
autliorr/'ition.
   I'mliT pn-si-nt l.i w. the maximum authori/ntiou in.dor FITA sect ion
701 is si billion. Tille VTI of the National Housing Ait \yasMiaclod
inii)lavv in IJMfijis .1 program oMii.-Jiniiiie for hn.jslincnis in rental
hoiiMiig fur Famiru1!- of modulate income tin.- M> L.illoil \leld insur-
ant" [;r<igi;im. TfoMi'M-iMlu ri- h,i^ m-visr liven a n y a c t i \ 5 t y Uiiditrlhis
]>rognmi and tho.ivfore thpci-ilingis
                            MUI'SIX,; .UT     (IK I'-'.-.'i

                        x orrKirr.\iNni-Ts IN KIIA I>KI:KNTU:K^
     Si* lion lO.'i u.i,, M amend section i!ttl(K) of tin- National Housing
 .\rl in jA-imii FHA to unhide in the debenture* \\hii.-h are paid to
 nmrtgagi-e.-. iit ••a.-i-.- of default. curtain LO.-I.- which the mortgagee^
 iniiM incm iii order tu enable them tu con\c\ good title to the
                    -.
     I'nder prc.-eiit law. FUA can include a poriio-i of tin.- forcclo.-tire
     ?t in debenture.--. However. -(i.-tj. of auiui.-itiun and cost*, of con-
 vexing title of a propuu to FIIA i..nn<it lie iiuliulcil in the tlcbcn-
tnre.-. Tim.-. FllA. in computing debenture ilaiiii^, require^ inort-
ipisieej. to In, ak iluu n tlie total coM.- to?ep:»nite tlie two tj pe» mentioned
TibuM. Tin- iifcv.---it\ for this. ?epar:ition creiite.-^ a material dciav in
 proi-f>.-iiii; di-U-iitine ipplitailuiis. The dollar amount in.olved in
t!ii.-~ i.-< ivlati\fl\ .-mail and the- main purpose of making: t'it* change
iii the l.i w i.- to iliminate dil.tXf. in proce^ing debenture applications.
                                             sixfi riso«i:.\3t
   Sfiiion lin; i]ilfU>.- fpizii .-cttinii 2i>7 of the Xaiional JTons-iii" Act
c.\i?tJng jinn i.-Io._- ivlatini; to huUMiig for chlerh per^ont. The coin-
 iniiitv liil! |).u|n'.-i-.-- .1 in \\ pnigraiu of luortgage iiiMirance designed
to pioiiiK- !ioii.-in<: for the i-lder]\. whii-li appears in title H ol ihis.
bill.                                  . . .
   Seitioii IOC, al.-n iiuiea.-e> the in.nralili- loan amount^ miller FJIA
M-uioii in" uhe ivgnlai i«-ut.il Imu^iiitr prom-am). Unde, exi.~tin£r
lau. lunn^.iiri- aiimiiiit.-- a'i- limited li\ a ]n r unit ceiling for .-mall
aji:i:iim-ni> and h\ .1 pt-r rnum ivilin<; for large apartment-. Addi
tioiral allou.-iin f.-. .tie n>a.le fur i-le\atm t \ pe a]iai'tinriil> and for coa-
^lniiiinii in I'Jiih < o.-i ai'iM.-. TI.j- following table ilhi>tralr> ]ire,-ent
i-o-t limit. nii.i.?. mi niii.il hoiiMiig a> compaivd w i t h tho.-e -n S. Ti7.



                                                     r«Tun>l       I             |   lYrnriil
                                                     i' tin '- -   , •'•rr.'xiTi i   If nn-I-T


                                                                                          $'-.WO
                                                                                           y. lofi


     Ti'.-l"iinoii\ taken d u i i n g the hearings indii-ate that tho Lick of n
Mih-Maiitial pioihiilion of n ntal hoti.^iiig !••< bc-i-oining moiv .-erioii>.
F.iilmr to ii.aiiilain .u, .nl'-ijiiate animal prodtu lion of rental hon>ing
max id fuiuiv \IMI.-> leail to .-ei ion.-* i-oii.-ei|iien.•»•,-. An mifoi^een de-
in.iiiil fm I. liTi- iiimiliei> of rental nnil.i in .-ifnafion^ .siii'li as (!io~e
\\lii.li followed AVoilil AVai IT ami the Korean war could lead to
slu>il,ii. f r-. li,ii-(I>!ii|). and pir..>ihK iviit control. l'!\ce»i\e unmet
deinaiid ,»!.-» ma\ leau to ". i-a.-h" programs wlm-li tend to be more
cxpeii-ivi- and to p.-oduce les- desirable lion.-ing.
    The folliiuiiig talile militate* the total number of units in mulli-
f.ii.itlv MI MI in iv.- |.unhurt] dining eaih <if the yeaiv> 1017 through
in.>. Of | , u t i < alar inti iv.-l i> the nuinbor of F1TA starls, which in
lli.'ii'. d \ \ i n d l t d in an alllime lo\\ of 0.1100 unit.*. The increa.-e from
  O.tMMi toi!.r) iHhi in                                                                 In the urban renewal
  program.

                YL-J.-               I.e.'          FIIA                      Y.^r            ,    Tr.U      FIIA


 •vl-                                7* MII            '•] i*tri 1-C3                             T ' (U.I     *iOOO
 1'H*                     '"                                                                      1 -,OII      iXC-00
 !•..;••                            I1-:.!"!          lll.nn        I-.-V..   ..   ...                        - J.OOO
                                    l'*7,i"i          i.^nri        i«i>i                         :-.i.w        •i. 000
 j;V.',                             13* !••'           .'] l.lfll   ]*C<                                       iVJo
                                                                                              i
    1
        T..-U f -r Ihf yeir not yit av .il.i' i. . loul f.-r Ci>i 9 moatL". I ll.'»w untts.
     Iii iulilit ion to tin- [innlii. tioii liiruri^ \\Iiiili .-liu\\ ii.;nK't|iia;c K-fels
  in tl>e /n-U(.lii. tiuii of iciiial liiui.-iiiir. ^ '-"'itjiaivil u i t l i proiliii-tio.i in
  tin* pa>t. aiiuthur iiulli.nl .if ileiuuii.-tr.itin:.: tin- lu-i-il for iviital I.oiis-
  iiii: is tlu*. national \.nain \ late. In (lu> fourth i[iiaitiT of I'.l-'.S. only
 -.$ puivent of nil unit.- in .ht- I'nitcil .Siatti. wt-iv available for talo
  or ivnt. This, ligmv icllvc(<> a k-\el of -^.-> peivi-nt of standard units
  for reni. anil O.G pciveiit for *alc. ImliiMij. rt'invaeiitativit. have iu-
 divatijil that tlic ik-iliia- in \oluiiic of rental IIOII.MII<; ia attributable to
  the ntxco&itv for la rye ei]int\ ix-iiuiienn-iit.-. limitation.? WMMI tin- in
 con at wliiili maji be j^roilucuil b\ rental piopi-nii-*-, altrai-ti\uni^& of
 other upca of inM^inient. ami the -.lifluiihie.- of io.->t curt ilicat ion.
 The bill pruviilea nil incentive for ]H'oiliiiiion of rental Iioii£>in<r by
 iiu riN^iiiir the ii.. Durable loan amount, pt-r room and per unit, a^^pt'c.i-
 ficd in the table above.
     Tlu» M.X! inn of the bill aLu contains ;in aiiieinlinent \\hii-h alTect»thc
 issuance of FITA in. unim-e .'or trailer ioiirt> or park.s. At (hi- j)rcs-
 cnt time, the loan li'nita .ipj»lic;ibk>. to thi> pro^rnm are $1,IM10 per
 apn<-e, .iiul ^"JOO.OOO ]ier niort^ajre, Tlu-.-e liiruiei are clian-reil b_\ the
 bil 1 1 o $ i.f>00 per space, and SoOO.OOO per mori: jpiap.

               M-\.\IJtOr IXTKKEST KATES UXnF.1! CKI.TA1N F I I A riKX.ICAMS

   .Section JOT of the bill \\oiilil ini-rejiM- tin- maximum interest rate
from \\± to ."> ])Civpni. with :iuthorit\ for the ('ommi.^ioncr to
increase the i-nte to ."ii^ jjercent if lie fiml.s .-iiih action nei-e.»ar\ to
 meet the inortiragc market, on Motion 2.>T (reirular imiltifamih liims
 iiilT).. --ei lion ui:» ( inanaireinunt t\pe ciHijuiatiu-.-), a.ul .-ivlion M):
 (military housing) mortgajre-;.
    Tlio interest rate established for the new .-prtiuii ^:5I pro-jram
 Cehlerh pei^on.-. hou.-in-;; and the new .-.•i-tinii ^10 jirouram (liou>in^
 for i]cfen.-e impai-ted area.-.) would Ix>e,stal>li.-hed at "• percent w i t h au-
tli(,rity for fJie Coinmi.^Mn.cr to incrca.H' the rate to ."ii... jieivont if he
finds siieli action necessary to meet the niortirajre markoT.
    At ]>resent rate.-, >i<rnilicant disci. unt.- are demanded L\ lenders to
produce competitive yields. The treatment of d^ci.unts n, xaluntion
procedures rnise.-. technical problems w h i i h tend <«> disc»)\n-.i«e de-
velopmeni of muliifam.:., projects ilurin^ jienod.- of ti^
                                .                                             .
    Since rental projects are characteriMicall\ uudertaCen only "as a
busmen venture, ii :.-. reasonable to expert" that the entire c«.s| of
inorl^ire money will IK> undeivtood and carefulh bnr^iined for by
prospective project spon>or>. Fnder thoe « ia .ini.-lanre.-, there ap-
pears to l>e no reason why the stal'ile ..houhl reipiire intere.-t rates
           3.W77— .'•;•— 2
6                            Housn.-c ACT OK i .59
for these projects to be fixed b\ the FIIA at levels li>\\er than the
inuiiev inaiket requires and lower than wui.ld prevail as a result of
competitive lariBiininii hi die development of iiuta! projects.
    The bill -.\inilil inn change the basic '• percent interest rate ceiling
on- section -1'j sales housing program. However. it would au;hori/.c
the Comm:s--ioner to increase tlic rate to -15 percent if he finds such
action is nr Ci..uv to meet the mortgage market. The committee
believes t!i.it stu.li •Ktiuii is ncn -.-arv lu bring tne statutory provisions
governing thL- s;ilu housing program in line with other sales housing
programs containod in the National HousiiurAct.
    In the e\ei't th.it the FILV Coininis,-iuner authorize higher inter-
est r *es uiult-r any «»r the^-e program:-, he should make sure that
inort^ai.oi-i. ami luururagecs inxohed in pending applications for
]iii<rlg.ige iiisiii.inu.' are not nnduh harmed and are not unduly en-
riched b\ the itiaK'.uL- in which s»ih ii.. rea.-e> niv made clfcrtue.
                              COOl'KIL\TI\">:

   Suet inn 105 (a) brings inovtgJigc loan nxtios for cooperative hovaing
 (sec. ill3) gtiu'nill\ in line w i t h those aln idy established forbingle-
faniilj hoiking (YTIA. sec. 2it3)-jind pamllela the maxiinuiu niortgsigc
amounts pro]Hi.-i-iI for niiiliifamih rental housing (FIFA sec. :>i>7).
In its desire to encourage the consfiiictlun of iioitsing by and for co-
operatives, tin. Congress, has in the past provided bjjecial inducements
in FITA's cooperative hmi.-ing p«''jgraiH. These induri'ineiits have
«ner.illy been inore liberal mortg-age terms and authority for the
pimhase of i-oupiT.itive housing iiiurtga,;e=- b\ the .Federal National
Mortgage Association at par.
   This amendment \\oiild Iring mortgage loan ratios for ITLV sec-
tion L'l'j more in line with the corresponding figures in present law
for FILV section ^03. It pro\ ide> that the. cooperative housing loan
may not exceed 07 percent of the FJIA Commissioner's estimate of
the replacement cost of the project.
   The cost limits per room aiul per unit, as well ns the allowances
for elevator t v p e stniLtnres and high cost areas, are also increased in
tV- same amounts aa those applicable to FITA's regular rental housing
program, jwt ion iJi'7.
   Section 10S(b) would authoii/e the FILV to includn such commu-
nity and iuiniiicixi.il facilities, ;u-> the Coiiitnissioner deems adequate
to serve the m-> tipaiits. a» p.at of the mortgage security for a coopera-
tive project. Under c.\ist in:: law. these additional facilities may be
pi.rmlttcd fur iranngcincnt type cooperative^ only. This amendment
would extend similar benefit^ to the s.di's type cooperative and to tl.e
investor-sponsored cooperative.
     r.i.t(HKU.iT\ or f.xi^riN*. >TIU ITX m> KOI: » > * irF.i:.\Tiv i. iitu sist.
                    ii i would m.ikiM'.xi.-tii.gi niiMiu. tiiincligihli- a.-M-i-iiiitv
under .-K'tioii i'l" of tin* X.i'iniul Ilon.-ihg Aci. 1'ndrr existing law.
I In- hfiiclil - uf tin* M-I (Inn u'i:'i progi.ihi (coopcrativi* hmising) are
available only for propo.-i'il i-onst ruction.
    Ti>tin.-.iiiv u.i> pifM-nlrd bv uig.ini/.itiiiii-. s[ioii.Miiing ci>opcr:itive
iiiuvciiifiit.-- lh.il tlii-v .iiv ili-.-iroii.-. of pun h.i.Miig and o^-i-upv ing r.\i>t-
ing dwelling.-. itinK-i 1 tin- K.I I A in-ur.iiiii' piogr.im. They oli.-eived
                           HOfSIXG ACT OF 1059

that existing con.-tnictiun 111:13 be less expensive tlian new construction
and. with proper safeguards made to avoid. the Cooperative from pa3*-
ing an i-xcessive-prk-c. the purchase of existing construction would
iill :i real need for lowercosr housing.
   A special proviso i.- in*: hided in the amendment to i.iake clear that
the FIIA Commissioner must determine. that the interest* of the
          isj of the cooperative will be protected before approving the
     iraiKc. and. fiiruicr. that the amount of the mortgage must be
based upon tLv appraised value of UK- property rather tr in any other
basis of calculating: the maximum mortgage.
                       CKiuxns TOR ALASKA. cr.or. AND HAWAII
   Sei.tlou 10H auiliori/.es the FIIA Commissioner to increase mortwige
ceiliiiiir- fur murtgii^ef injured in Alaska. Guam, and JTawaii. Sec-
tion -2\i of the X7it tonal IToii^ng Act presently authorizes the Com-
inWioiifr to in> rease. inortgaiic ceilings by ."ill percent in Alaska,
Guaiii. and Hawaii Ijeoaiiev of liigher cu^ti. inwailin" in tho=c places.
It i> alto posi-ibJc fur the Commissioner to authori/.e special high-
cost Hivn incrtaises. jlowexer. he may not presently 5nci-e;ise b3" 50
pi-ixcnt tin hiirh cost area allowance. Thissectiuii would permit the
Commissioner to mcix.ise high cost area- allowances, in these areas b3*
an additional ."id percent.
   TA1 MJ.N . nK sU!\ !«. I. I HAIH.K, UY MoKTt.Al.OK IX JlOirTGAOES ASSIRXEO
                                    TO FJIA

               IftO also \\oiild permit the FI1A to assess a service charge
 airaiiist [iiojivt iuoiigauui» in default if thr mortgage is. assigned to
 FIVA.
    Under the present --t.it nt i:. mortgajrec-s, ha\e the option of aligning
 niuit^agcs in iK f.inlt and t,ii..ag a reduced amount of debenture^ or of
 foreclosing and coii\ eying title to tlie FIIA. If a mortgage is as-
signed, (he moi tg.igur i» no longer obligated to nay a mortgage insur-
 ait«.e pivmiiim bt-iaiise, as the inurtgiige i-> held 03 the. FJLV Commis-
sioner, it is no longer an insured mortgage.
    There ha\e been Jaiins. made that some mortgagors have intcn-
tionalh gone into default with the expectation that the mortgagee
 would a&aign i he inuitgjige, thiin relie\mg the inoiigngor of the lia-
bilitv fur the IMUHCIU of the o.ie half percent mortgage insurance
proiuiiiii'. This propos'-.d revision would aiitlunixt the Commissioner
 in s'i. 1» < a.-eji t«» .isses-, ,v sen ice ciiarge not exceeding- , ne amount of
the original inortg.ige insurance pix-mium as long as. ho holds the
iiiuitgagf. Tlii.- anu-iidment would apply uniformly to all FIIA
programs.
                r.RXEKM. >roirr.\«K IXSDI:AXO: AITIIOKIZATIOX
   Section llu pru\i;li%.aii increase, upon enactment, of $5 billion, in
the general mortgage insurance aiithori/ation which covers all FIIA
programs (except flie property repair and home improvement pro-
gram under title I, of the National Housing Act, and the armed
service* .vntal housing program under title VIII of that net). The
existing authorization' is approximately $-20.^ billion.
3                           HOTSIXr. ACT OF 1 U 5 H

     An additional & billion would In- made available on July l._l!)."ifl.
 This stun wmdd be in addition to authoii/atioiis beconiiii.u available
 clurinir each \ear as outstanding iii.-main «• and • ••iiiiniitineni- to in
Mire aie reduced through .iin»in/..iii"ii «ir prup.ixnieni .of mortgage.-
 or throimh expiration to outstanding <<>iniiiiu. ..I.-. Ihmevcr. the
           amount of the S.'i billion ii>> icim-iit lu.ulr .a.ill.il'lr
aciincnr of tliis bill wtnild lapse on June :50. l!)r»9
    The rununitlcc i^ aware tli.it ttartin^ dtuiiig tin; fall ,.f JMoS, the
         Cuiiiiniuiuiiui duiuriniiiuil tliat^it was nucossai-j to proiiml-
 H.ito certain ailiiuni-lnitivu pruuediirua in order to cuiiscr\c the limited
l-.iliHue leiiiainiiiiZ in tin- ^rni-ial inuii«.j;ij;i- iii.-niainr aiitliori/uitiuii
.tml to stretch out the ajrenrxV iii-ming anthoiity as far a.- po.-uble.
Tl.e i-oinmiltee rualixcx. that tin- ;<liun taken !i\ tin- Gumnh-Muncr
<»f i^uinir : a<ri"eeiiu!nt> In in.-iiri" «a.-> a de\ ce uliii-h iua\ ha^e been
 ni'i-c»&ar\ to hold tin 1 .-luall Iwlai. f for tluse evidein inir a clear in-
tent to rluse an Flf.V niDitir.ige. Thi> bill. ho\ve\ei. would inerea.-e
the geiieial inoi ty.iiio ih.-iuun.T authori/.ation b\ an aiuuiilit which (lie
« oinmittce feel» is aiifliiicnl to meet the need.-, of all ihosc becking
« oinniitnicntf. from the FJTA under all insurance programs go\ -
e.rncd by the gcimrol iiiurtgaire insurance ntithori/atiun. The eom-
mittce. therefore, i^ of the dpinion that by ihe action taken in this,
bill, the cuiMinis^'-uiT ^honhl ili,-n)iitiiiiu- all i-e.-itiirli\e procedure*
aduptcd to coiibcr\e the authori/.atioit when there uas a limited bal-
ance.
                         KKTKAI. i IF nr.siii.irn: I'Kiwisinx
   Se«-ii«in LI1 of liie bill \\fidd rept-.d ^cclioii '2l$> nf the Xational
TToiisinir Art. T'li.-. .-f< tinn deal.- u i t h (he tran.-fer of :i;>])'icatton fees
from one pio^ram. uhl. !• i.-« IIOM ul^uletc. to other F I I A programs.
Si. ..•!• thciv are no fee* \\hii-h i-an be tran>fep - i d. seciimi -J1.S is with-
out effect.
                             i-N« u\ ri:r..\x I:EXKW.\I. .\I:E.\S
   Section 220 of the National TTou>ii»« A< t wn.-. desiuiu',1 io assist, in
providing the fiiiaiu-ing iv(|iiiivd for the reh:ibiliiation of existing
duellings and the i-oiiat ruction of new dx.i-Hinjjs where sikli dwellings
are located in urban renewal areas. The terms under this Action were
made more liberal than the regular >ale.-< luiii.-ini; uiidoi M>ction 20:!
and the regular ivntal hmising under tei-tion 207 iti order to aid the
elimination of shuns and bl'ght and the prevent ho of the deteriora-
tion of residential property The dwellings ma\ 1m for .-ale or for
rent.

                                                                 insurablo loan




upward the total ro.-t of c o i u t i u c t i o n and ihe committee hclir\m that
mortgage < oiling:, should he ia!.-ed upward lon.Msleiil u i t l i the i hiinge,s
in costs.
                           HOUSING ACT OF 1950                                9

   Tu .ippro\iug tin- higher ceilings. the committee expressed the, opin-
 ion thai everTeil'oii shuidd be jundu l»_\ the hoinebuilding industry
 ami the FILY to provide housing in urban renewal areas at a prke
 •within reach of the moderate-income family.

       Section I ]•_'('' I would increase maximum insurable loan amounts
   for multifamiU housing in urban renewal area? under section 220.
   TI.I- new 111:1x1*11111111 amounts would be the same as. those proposed
   for F1IAV section 2i'7 regular rental housing in section 10G of this
  bill. In addition to inrrc.ising the in;s.\iinuin insuiablc loans, section
   lli'(l') »f the bill would revise the maximum permissible loan ratio
  from in i percent of replacement «.<i.-t i n h u - h may include a 10-per-
  cent alltiuan.-e for builder:. ai;«l tpi.n.-orV. risk and profit) to 100
   peiviKt of re].].u-eiiit-nt oi.-t (excluding an\ allowance for buildcrVi
   and spoilt n-'sprolit and risk).
      '1'hi- pri.n.'ipal reasnii fur t!ii.-« rbangc i» to make more equitable the
  equity ivtuilreiiu'iiii- fur iinain ihir nniitifainily rental housing as be-
  tw'i'fii a builder -poiu-ur on tlte one hand an an investor-sponsor on
  the other. Under pre.-ent law. a redevelopcr ma.y obtain an insured
  loan in .in amount equal t«i HO percent of the estimated replacement
  cor! of \LV\\ muhifamih rental housing to be constructed in an urban
  renewal area. In order to reduce the cash equity required for such
  projects, the Congic^- in the ITousiiig Act of 10oG added a provision
  thai, in oa-i>s when the rcdeveloper is also the builder, the estimated
  repl:' vM!« .t co-. inn-* inch. >ie ait allow.mcc for builder's and sponsor's
 prolit .uid risk (i.r.. invest lii^ time and profit), this reduces the cash
  in stu-h cases wlim- the rede\ eloper is also the builder, lie can avoid
 ca^h payment of the 1° pi-ivi-nt allouancc for builder's and sponsor's
 prolit and risk (i.e., invi- t hL-. time and profit), this reduces the cash
 equity required. The practical effect in such cases is that the re-
 developer who is also the builder is able to obtain a mortgage loan ap-
 pr"\iimting his actual out of pocket coat of construction exclusive of
 a- .. allowance for builder's and sponsor's profit and risk.
      However, in those cases where the redevuluper is not. also the builder
  (i.e.. the rcdeveloper contract* w i t h an independent general con-
tractor to const i net the luniHiig under a lump sum contract and has
 no idtntity of interest w i l h sin li . oiitrariur), (he situation is different
 and operates to tin- di.-ad\antage of Muh a redi-\e]opcr. In -such case,
the allowance for btiilderV and spon.-or's prolit and risk-is limited by
PX'-tinir law 10 in |)oiveiit <>f all nH.s except land and the amount of
 I he genera! i on>tnu lion m-t. Siiuv iln- pi-rcenfage allowance i.sa|>pli-
cahle only to a .-mall port inn <>f (dial c<i>(.-. the amount, which .such a
mlrvelopor can rodiur ihe t-a.-li c(piit\ required b\ avoiding ea.sli]>ay-
ineni of the allowance i» negligible. The practical effect in such vases
is thai the redcveloper who i» not al.-o the builder is notable to obtain
a l.onii approximating his actual oul of pocket cost of const ruction.
     The bill, therefore, ]>rovide.s (hat in the ca.se of new inullifamily
rental lionsing (o be constructed in urban renewal aivas mnler section
•22'1, the rodeveloper may obJain an insured mortgage loan not exceed-
ing his actual out of pocket cost, and (he formula would apply to the
rode.\vloper who is not the builder as \\ell as to the redevelo[>er who is
the builder.
10                       HOUSING ACT OF 1950

    It is to lie noted that the possibility oT a redcveloper obtaining so-
called w indfalls \ i.e.. insured mortgage luans in excess «»f actual iost of
 projects, and paying i . jiroceeils of the in.-invd inortgage loan in
extess of actual cost t<> ihenisehes) is eliminated bv continuing to
make applicable to the.-M. ...-»•••» tin. m.-t ceriilication requirements de-
veloped b\ the Congress, in I'J'il and applied tn FTTA rental hon-ing
ii<suiain.e. programs since that time. Thus, while the initial iiiturancc
commit).tent would Whaled «»n estimated actual out of pocket replace-
ment cost, at projei' Completion tla redivj-loper must certify out-of-
pocket costs, actually inclined and. if the out tif pocket CO>L, actually
iiii-nrred. as certilieil bv t'..e redeveloper and appii.ved In the Commis-
sioner, are less than the original estimated replacement u>s!s OM which
the mortgage loan was based, the iXcess nmrtiTa^e loan proceeds must
bo applied to reduction »f the principal aiuonnt of the FITA injured
loan.
   The. propo.-ed law permitting FTT.V iiisuran. c for the full ai..oun(
of the out-of-pocket costs of cuiisti u. tiun i.- pt rmi.-.-iveand nut manda-
tory upon FTTA. At the present lime FITA has an administrative
requirement that the ia.-h equity shall amount to at least :» percent
of replacement cost. The committee had no comment on this amount
believing that the rebuildiiig of urban renewal area.- is the one big
challenge, left unmet in t a m i n g out the objectives of slum clearance
and urban renewa' and th.it FITAV. regulations should be siillii iently
flexible within tb.. law to interest builders and sponsor in const)'act-
ing and rehabilitating houses in urban renewal aieas.
   Section 112 (b) would amend FTTA section '220 to permit the ex-
clusion of certain land improvements as defined by the FITA Com-
missioner from the statutory dollar amount limitations per room ,-uid
per unit presently provided in the act. This new authority would
apply only to multifamilv housing projet ts under section 220 (hous-
ing in urban renewal areas). Tt is, neccs.sir\ because the redevelop-
ment plan for thi-. tvpu. of protect frequently •'•-.iriets, land coverage
to an unusually small percentage of the total ana of the property,
thus leaving a large e.\pan.-e of land to be suitably landscaped and
otherwise improved. When the cost of this landscaping and related
improvements, must be included w i t h i n thedolhu limits pel room and
pi r unit as at- present, the. sponsor seeks some method to reduce his
co;-t through the elimination of otherwise desirable improvements.
Tn many ca.-e.-% land.-caping and other exterior improvements are the
first to be eliminated to the detriment of the appearance of a redevel-
opment area. This.iinenument would permit the lostsoflandscaping
and related improvements to be included as a pa:: <»f the mortgage.,
but to be excluded from the siatutorv dollar aiuonnt limits per room
and per unit..
   '1 uis section would make clear that the mortgage security could
include such coinmunitv and commercial facilities as the FTTA Com-
missioner deems adequate to serve the occupants.
i:i.i(iiiui.ii v ur MMii.i. ri.KsoNs nn: ru.v. six Tit IN zzu AXO 221 mu SING
   Section 112(c) would extend the benefits of FITA section 22ft and
221 programs to single persons. T'ndcr existing la\v, housing eon-
.structi'd' under FITA section 220 is confi'ied to fac.ililies for families.
No provision is made for the construction of apartments intended for

                                     ^U"**
                         HOUSING ACT OF 1959                            11

single pel-sons. This pr« • ision would authorize the FJIA Commis-
 sioner to permit the construction of dwellings intended for occupancy
by single individuals.
  "Likewise, the occupancy of housing insured under section 221 is
 limited to displaced fa*nil;?s. According to existing law certificates
for occupancy of such structures are now issued onlylo families.
   Witnesses testified that in slum clearance areas there are ?«resent a
 large number of individuals who li\e in dilapidated rooming houses.
These individuals arc desperately in need uf decent housing which is
 not now available to them. The needs of such individuals has been
neglecto'T'and a^istance should be pros ided lo thuin on tlie same terms
as"arc now provided to families living in such areas.
   The proposed provision would authori/e the housing agency to
issue certificates to individuals on the s.tme basis as they are now-
issued to families.
                          KErX)CATIOX IIOUSIXG

    Section 221 of the National Housing Act is designed to help in the
 financing of new or rehabilitated housing for families being displaced
 •as a result of governmental action.
Eligible families
    Under present law, the liberal mortgage insurance provided by
 section 221 housing is available to families located in a community
 with a federally approved "workable program"' for community im-
 provement who arc displaced as a result of governmental action or
 displaccdrfrom an urban renewal area.
     Sectio'i 113 would extend the benefits of section 221 to families dis-
 placed through go\ernmental action without mrard to the fact that
 these families live in a community which doe.-           ive a "workable
 program,"' provided that the displacement takes placi. 'in the environs
 of a commurity" vhich has such a program. The committee has been
 advised of Situation:- in which displ.aenient has occurred within the
 inrtronolit.in area of a community which has a "workable program."
 Tn thcr-e instance?-, the family displaced within the community which
 lias a "workable program" is eligible whereas i\v, family displaced in
 adjacent and contiguous communities within the metropolitan area is
not eligible for the benefits of FJLV section 221. The needs of these
 families arc as great as the needs of those families displaced within the
 "workable program" area and the, committee, therefore, feels that they,
'too, should be entitled to such benefits as are available. Tl.o statute
 refers to the "'environs of a community" which has a "workable pro-
 grain."' The committee proposed no specific definition for the term
   environs" but believed it advisable to leave such determination to tho
 Administrator.
     Fnder present la v loans may be insured under section 211 for hous-
 ing in a community having a "workable program" provided that tho
 community shall have requested such iiiMirahcu. Section 113 would
 make loans eligible for section 221 insurance in a community with-
 out an approved "workable program" provided that, it is loc'atrd in
 tho environs of a community which has such a program. Xo change
 is proposed in thpYeiniirement that (ho community must rubiest such
 insurance.
  12                                HW           \G ACT OF 10-T'l

  Jtii'i't ii*t tit iitorfff't'lt   iitJ/iifi*
      Sci-tiun 1 1 1 ( .1 1 uniil.1 iit> i.M.-e tin. maximiini in.-iirahlc loan amount
  f 11 mi Mi.uiiii to jSlii.'ii'ii in iiiiiiiial < o.-t a lea.-. and from ftlO.dllO fo
 $l:;.iii m in li'mli-i.,-1 arc.*,- fur simile famih hoii-Miiir in.-ured under
  FMA section 2-21.
      AM die urban lenewal program progiv>.-c;-. it become,- e\ idont that
 bitliMaiui.il numbers of perMHi.- \\ill In- di.-placed. For the most part,
  the.-e di>plai cd familic- x\ill In- ]o\v-iiniiii;f famili-.--. TIie\ will not
 be in a position to aiail t i n ' n-el\e.- nf hoii.-ing produced nt normal
 co.-i K-\fl> u i t l i i t i llifir H'>|ii'i t i \ e i-oiiinmiiiiii-.--. It v.a.s for thi:» rea-
 son that luiiitir.i^i' <-LMliii«r> at tin- r'.niiparnlixulv lo\\ \ v \ v \ of SO.OOO
  (^)n.tiini in lii^Ii .0-1 .iiva.-i \\cre i-Malili.-lii'il for (lii>.pro«:rain. Con-
 biiltM'iililf ti'^tiiiiDiu jiidihi. c'l oxer the p,i.-t 21 iiiuiith.^ has^iown tliat,
 purl ii ul, ill \ iii lar^i-r < it'n-> and i->pi'« i.illx in tin- nor: hern .-cctions of
 (lit- < n i i i i t i \ . (lie i j .\i>ii.,u in.-inalili- loan ainmint.- for t-ivtion -J^l aro
 not :i<lft(ti.itt> tu |)i<>\ ill- IiKii-inu. AVIttli 1 {In- cuninii'.tiH 1 recognizes
 the tl.iiiirfi of iin rca>iiii. niaxiiiiiiiii aiiioiin'.^ to tin- point \\hore lions
 inir will In- [Muilim-.l ln>\oiiil the iiu-uinc ratiire oj" di.^plai-cd Tainilies,
 it. .:>.••.< r'<n-U->>. «• n^'iii'i - t' .1; iiiiK*» >ni-h hotiMii^ is built it rnnnot
 be i.-atl,' a \ . : l l -Me foi tln->e i'.iiiiili-.^. Tlii.- in> re:iM- in the niaxiiiHiin
 loan ainoniit >iiinilil ein nui.iiTi 1 the |>i<nlurt HMI of aiMit ifial relocation


     ^i.-tinii l l l t a ) \xniild ' 11 make the inort<rairc insiuranre progranis
  of Mvtion u-21 applic.ible to •!-. 3-, ami 1- family thx-ellings. (At the
 ptvviit time, niil\ -'n«le- family or mull i family rental ;>rojeds con-
 st rii<;tetl by nonprofit corporations. ire eligible.)
     This amendment \\oiild jn'rinit iii.Miniiirp for a '2-. 3-. and ! family
 dwellmu, if tin- piopei~t\ imTi.^ F1TA minimum property standards
 and appioi.ii.itc K'aU- .iiui Im-al lioiihnis: ordinances or regulations.
 C»riv.-|niinl"ni-il\ higher loan limits are ])Rrmittcd for thci-e ilwiill-
 iinr^-^l^.Hiii) fl,! a ^-f.iinih dwelling (fifjn.OOO in high cost areas),
$'2"i.0rit) for a :} famih dwelling (!>-27."iOO in high cost areas), and
frW.Ou1' for a 1-famih dwelling ($3.">.000 in high-cost areas). 'J'he
 iiiiiiiiiiuni do^np.iuneiit l\n an o\\nur-occnpant .rotild be $200 for
each unit in the dwellii..:. AVhere. the moM-ragor is not the owner-
oi-i tip.int. the loan \\otiKl.be limited to 8,1 iH'iirnt of appraised value.
The FTTA i.- aiithoi i/.cd to prow ribe, proi-ediuc.s under which the
owner of tlu* ~2-, ;'•-, or 1 famil\ dwelling \xoiild .give a jiriority in rent-
ing the unit.- not- or. tipied f>.\ him to ]H:I>OIIS dit<placcd by urban
renewal activity.
                         funniiltifiimily rrntiil lion-ting
    Scitiun l l i ^ b ; \\ould inc.rea.-e tip maximum loan amount fi.r multi-
fainil.x rental project* from $0,000 to $10.000 per family unit (froin
$10,0ini to !>li,Uflt) in high-iuiM area.s). The p..rpo.se of the change is
to make m a x i m u m ro.-i for rental hou.-ing con.-i.-tent \\illi the higher
niaximum permissible for sales housing.
Eliffifilt' mortgagors
    Section l l J ( b ) \\otihlrtlsotnakescction221 inaurance available to
pr'uate l>nilde.i> for tin; production of rental housing for displaced
families. The. loan amount \\onld be. determined on the .same basis
                        HOrSLVG ACT OF 1050                             13

as under section 220 redevelopment housing; i.e.. in the case of new
construction, the loan could be in an amount equal to the estimated
replacement cost or actual certilied cost (\\liiclii-\ur is lowcr^,-exclu-
sive of any allowance f"i huildeiV and sponsor's profit and risk. In
the case of repair or rehabilitation, (he loan could be in an amount
equal to the Commissioner':) estimate of (lie \alue. of the property
when the proposed repair or rehabilitation is, completed. Such mort-
gagor corporations would also be subject to regulation by ihe Com-
missioner as to rents, sales, charges, capital structure, rate of return,
and methods of operation as in the <-.ise of other FIIA rental-housing
programs.
   The possibility of any siuh corporations obtaining to-called wind-
falls is eliminated b\ making the (ost'cirtilication requirements of
section 227 applicable to such mortgagor c«n poralions.
Cof-t itf.s/.y for ijmu ranee                                           -
   Under the present section 221, private nonprofit corporations and
public agencies are eligible for FIIA. injured mortgage loans equal to
300 percent of the Commissioner's estimate of the value of relocation
housing for rent. Section lll(b) would place determination of loan
amom.t on a cost instead of a value basis for new construction, but
leave relocation housing produced by repair or rehabilitation on a
value basis. This is the pattern followed in section 220 redevelop-
ment hoi -~'ig and there is no reason \\\\y housing for displaced fami-
lies shouh be- treated dill'erentlj*.
Technical amendment
   Seciion I M ( b ) also would permit the FITA Commissioner to in-
clude community and commercial facilities built to sene the needs of
occupants of property insun d under FIIA section 221 (housing for
displaced families).
   According to the FITA Commissioner, (he inter-relation of the
present Jaw is questionable regarding this matter. The purpose of
this amendment, therefore, is to remove uncertainties regarding tho
inclusion of such facilities in the sections 220 and 221 .mortgage,
                        not • ix« FUR sutviruMKx
   Section l l . " > ( a ) would increa-c Hie maximum loan amounl from
S17,lin> (o Si'n.Di 0 fo. hoiking in.-ured under FIIA seclion 2^ (mort-
gage insurance for servicemen).
   t'nde. this section, the F I I A is autiiorixcd to insure housing for
occupancy by members of t!.i> Armed Forces who have been on active
duly for :it lea>( L' yi-irs and are cerlilied by the Secretary of Defense
as cl'gible fur (he benefit* of (hi* program. The principal advantage
of this program for .••<•!\i emeu is the paviuent by ('ie Secretary of
Defence of (he F I I A mortgage in-'mmce premium, wi.ieh gives "men
on active duly a born-lit aii'orded veterans iliroiigh the Servicumei.'s
Keadjiisliui'nt'AcI of UM-1.
   Section ll."i(b) would permit the benefits of r-eelion 222 (o he made
arailabl to .-ervicemen for the punha>e of housing insured under
FTIA s-eolion 2'>.".(f). The ii.>urance under section 2n:l( i) is aj/plica-
lih« tnlioiciiniToiit'iilf •>!'!.,ult up urban areas whore the Comim'ssionrr
finds it not pvacticable to obtain conformity w i t h many of the m i n i
 14                          HOPSIXG ACT OF 1959

 ilium requirements essential to tin.' insurance of-mortgages. on hou.-iiig
 in built-up urban areas.
                                COST CEirrmCATInX

   Seciion llij \\ouKl amend sectioK 227 of tin.- National Housing Act
to conform it w i t h «• leiidiin'iits made to other sections 'f the Na-
tional'! lousing Act by .111: bill. Section 227 contains tl •? cost certifica-
tion requirement for FITA aided rental-housing programs. This bill
would change e.\isiing la«\ on loan to-\alue ratios ami the bat.it, for
computing i lie ratio for sin-lion;. 22«t. 221. ami 220. Changes- niaile in
loaii-to-v.iluc ratios under tach of these sections required correspond-
ing diaiiiri> in the eo?t curii.'u-ation section. 'J'his. seirtio-i \\onUl also
ailil a iie\\ reference to maUe the cost certification requirement, apply
to the. ne\v amieil services, holism*; program prujjoseil bv this bill (ice.
SluoftitleATUoftlicXationalllon^'-^Act).
                   VOWXTAKY TEKSriXATUiX OF IXSV/KAXCK

   Section 117 athls a new section 220 to the National TToiiMnjr Act
vvliiih woiihl permit the F1TA Coi.iinissioiier to tcrininate : FITAiiisUi -
ance iii)on the request of the mortyanor and ihe mortjr.itree. Tii such
cases., the FITA Commissioner is authorized to collect an adjusted in-
surance- premium.
   The present law contains no prov isioii for the volunian termina-
tion of FJTA insurance. It is nixcssai.v. therefore, in siicli cases for
the iiiort^iijror to pa.v liie e.\|n uses of letinaiicing the inorijiaj/e for the
purpuse of terininatinjr the insurance. In order thai (he financial pu- .
sition <if the FITA insurance fund would not be materially a fleeted
b\ .-iiili ailion, a pi'ov isioti is made in the hnv for the ])ayment of an
adjusted premium charge. Rights ainl privileges under the iiisiir-
nnce program, siii h as the privilege of receiving disliilmtivc shares
from the mutual in«it:;age in.-iiranre fund, vvoiild be the same as in
UH- ta.-e of in.MiraiKc tcrMinatiniis undo.' other ]jro\ isioiis of the law.
                                 .vxcK OK Koi;i:ei.osri:K
   Duri.ig ihe recession of earlv i:)."iS. thmv was considerable testi-
nioiiv .-ibdiit the po.-silile in« rea.-e in foreVlosurvs among deserving
hoiiieovvia-iN whose hoine loads vvi:iv iii.Miic] hy FIIA. It cauie to the
attention of ihe committee that Ihe FIIA program was la«Aing in
 proper safeguard* to .i.-siue that a deserving homeowner would not
lose his lu....e because of tdnporarv ureiuployment. Upon investi-
gation. the committee was impressed by Hie maiKcd dillereiice between
the FIFA and fiT loan guarantee progran.s in diis regard.
   1'nder the (!T loan guarantee program, the lender is. encouraged lo
fxleiid forebe.iraiiiv aiid tlu hoiiieo\>nei is provided several safe-
guards agaiiist iiiiinediali' foio IOMIIV. Foi example, under the GI
loan piogram. defaulted inteie-t pay menis are a legiliinate part of
the h-iider's claim for guarantee. However, under the FIIA program,
defaulted interest |.:iv lueiils are not prop.-rlv includible in the FITA
debenture in (he event of u l t i m a t e foreclosure.
   Sec-lion lls would eoriect this dd'ecl in tin FITA ]»rogram by
pel milling me ( 'iiiniiii-^iiiiii'i . in <a-c of u r f a n l i .,n.I siihse(|uenl fore-
                         "HOr-'.Xfi ACT OF 1959                             15

cl-x<iire.'to include unpaid interest in tin: di-ljentmvs issued to the
mortgagee. The con.uiiiii.-e bcliexc.- that this proxision would 111-
rrea^e the incciiliic on lin- pan uf tin: lender lo forestall foreclosure.
   Tin- propped amendment \\miKl aU«, aulhori/.e the FJTA Com-
missioner to extend the i'. e for curing the default and also. as a last
resort to avoid foreclosure. xxmild autlmri/e the Commissioner to ac-
quire the mortgage in ret inn i"oi debeniuii-:-. This last authority is
intended to K'VCcr. ;.-ed unlx when the lender i* either unwilling or
unal)le to cooperate in curing a default. Similar authority hat. been
piv-oiu in the OI loan piogniin s-iinv it* iiiceplion wliicl has bcca
successfully administered.
   licitli of ihe^e mea-ures an- de.-iinied to axoid foreclosinv and would
be discretional'; wiili tlu-KIIA ('oinniissioner. ThecoininiUecrccog-
niy.df that each rase must he judged "» it> own merits and therefore
would not want it- iin|iu.-e inand.it'-r\ ii'quireineut^ upon the Commis-
sioner. However, it i> In-'i" .ed 'Jiat this autliorUy given to the Com-
mi^sioner may IK> a nf'-e^.-; ry toul to aver: large nu.'iiliers of foreclo-
sures during any fiiituv pennd of recession.
                          TKi'lIXIC.U. AMKXOMKXT

   ^ecrion 111) would provide lliat noiilicaiion In the FJL\ Commis-
sioner to persons being denied future iK-nelitt of participating in
FI I A programs would fullill the requirement:- of the law if the notice
is properly mailed to the last ki-own nddiVAv.
   FJ1A may deny henelii- of participating in the FITA programs
lo individuals wlio knowingly \iolate the act or related laws and
regulations. Fnder pivseni law. the Comniissioiier must notify the
ell'erted jH-i^ons in writing. Tin- amendment would peiinit the Com-
mi^ioner to fullill the legal re«|uireinentj. of law by mailing the notifi-
cation to the last known addre>> of the peivon concerned.
   OIXTTAXCY OF FIIA 1IOl'>IM. I'lIiMfltTS 1JY TIIAXSIKXTS IX AUSKA

           n ]f>n would reiuuvi- tin- limit. -il ion applying to FJTAse«nions
2n7 and Ui's projens to jiennit iM-i-upain-y b\ tninsienls provided that
surli jirojei-ts have advcive varain-y history. l»epixventatives from
Alaska reported to the committee that there now exists in Alaska a
number of piv>jr.-t> inMiivd under FIIA .-ection.s 207 and (>i>8 which
have extremely high \.K-ancy ratio.-. At the same time, there is a
critical housing shortage for transient* and visitor.-. It was pointed
out that because of (lie re<-eiit entry of Alaska into the Union, travel
in this Stale has increased severalfold.
   It is predicied that iheiv w i l l he an even g eater expansion in the
number of tnurisi* iravelinjr to Alaska this. coi.. ig Minimei-. Hased
on la^l yiar's experiein-e, ilcmand f«.r .sleeping accommodations, will
exceed tlie available -iipply by al>fiul 2..*i'H'i units daily. Tt seems
ivasonable t h a t the T J . \ project- \\liidi nave such high vacancy
ratios should be opened fur occupancy to these transients for a
temporary period of time.
  'I'lie bill provide- lli.il siti b piojeris be periiiitled to take transients
for a pi-rind not lo exi-ceil .". \ear-. It w i l l be (he responsibility of the
FITA ('ommi—-ioner lo ceriif\ >pn - ilic project^ which will be eligible
for I he except imi c.intaiiii'd in I bisection.
            TITLE n—ITOrSlXG FOB Tin-: ELDERLY
  ^ Section 201 adds » new section 231 to-thc National Housing Act.
This would establish a program of im.i-tgage insurance for rental
 housing for elderly persons, (defined as "any jierbon. ninrricil or single,
who is 6<1 ycsin> of age or over"). Although there have been efforts
to provide a program of hoiking fur eh'eily persons in each of the
past 3 years, these efforts have not resulted in substantial success.
Existing provisions of law are contained in section 207, FILVV. regn-
lar rental housing program, and provide only a slight modification
from the standard provisions of that section. (Three eating provi-
sions are deleted from the statute by section 10G of tie bill.) In an
effort tii provide an effective rental huiiMng program for elderly por-
tions the committee recommends an entirely new section under which
it anticipates that a substantial number of suitable dwelling mills will
be produced.
    The FILV Commissioner advised the committee that he had foiind
widespread approval and interest in the ilex ejopmcnt of a program of
this type. lie pointed out tint limitation:, in exiting law had pre-
vented a more productive progi am. The new section would increase
the d»llar limit on the maximum amount of the limn for housing for
the elderly to $9,(iOO per unit for garden-tyjn.1 structures, $9,JOO j«r
unit for clevntor-tyjic stnictiires, with a permissible increase of $1,250
per room for high-cost areas.
   Loans would be insured up to 100 percent of replacement cost for
nonprofit cor jKjnitions, and up to 100 percent of replacement costless
any allowance for builder's and sponsor's profit and r;sk, for other
than nonprofit corporations. The maximum interest rate wonld-lxs1 5
percent with authority for thu Commissioner to raise the rate to o ^
pel-cent if lavc.-.-an to meet conditions of the mortgage market.
    The new section 231 would provide that at least .Vo percent of the
units in a project be hpecificalty deMgiicd for elderly persons ::nd that
elderly pui>oiis be given a prefiMvnre t>r priority of opportunity to
rent any unit in the project. The new section would al.-o omit the
requirement of "economic Siouinlne?.-" for FJT.\ imdenvritiag pur-
j)o^i\-% This remiiroment i> itot well adapted to projects, of special
design haviii!! a specialixed pmpo»e and nhich wil! not sen'e the gen-
eral n-ntal markot.
   FIIA would be permitted, but .\ot required, to establish rental ceil-
ing?. In actual practice, thp>e ceilings would ; serve no p»irix)Se for
project* nw ned and operated by nunprofit organ 7.ations. On the other
iiiind. FTTA \\uiild be enabled to control rents on projects owned and
operated by other than nonprofit organization?.
   The {in-Vailing wage requirements of the Davis "Bncon Act would
be applicaMc to both profit making and nonprofit mortgagors. TTow-
••\iT. it I.- poxMhlr that .-nine urgnnixiitions may bc> able to utilize, at
lea-t in p:iii.tholabiir.nnd sKill.Mif persons .•.yuipnllu'tii-to the purposes
of the oi<r:ini/.atioiis who m.i\ wi.-h to render services wholly or par-
      ifi
                        HOUSING ACT OF 1950                            17

tially without compensation. In order to permit this to be done, the


requirement of the Davis-Bacon Act.
                            XUKSIXG HOMES

  The new section 231 also initiates a new system of. FHA mortgage


ing for such liceiiring and regulation by the State, by the municipality,
or other political subdivision in which the facility is located), for the
acconiodation of convalescents or other persons who are not acutely
ill and not in need of hospital care but who require skilled nursing
care and related medical sen ices, in which such nursing care and medi-
cal services are prescribed by, or a_re performed under the general
direction of, i>ersons licensed to provide such care or services in accord-
ance with the laws of the State where the facil'ty is located." The
committee noted the testimony of the American -Cursing Home Asso-
ciation in support of legislation to provide FIIA insurance for nursing
homes. The table which appears subsequently in this section indicates
the number of nursing homes by class and the number of beds in these
homes, in total and by State, as of August 28,1957.
   To create a conservation program ami in order to avoid the danger
of attracting undesirable elements into the operation of proprietary
nursing homes, the bill authorizes the FIIA Commissioner to insure
mort£ra<res subjerf to the following conditions: (J.) The mortgage shall
lv held by a mortgagor approved by the Commissioner, and the mort
gagor may be restricted as to charges and methods of operation, capi-
tal structure, and rate of return; (2) the mortgage shall involve a
principal amount, not i excess of $l-2,*jOO,000 ami not to exceed 75
percent of the estimated value of the projwrty when completed; (3)
all of the standard provisions of (he FJIA. may be made applicable
to the insurance of loans on proprietary nursing homes, and (4) the
maximum interest rate would be 5 percent w..th authority for the
Commissioner to raise the rate to 0 percent. Witnesses testifying on
this subject stated that a 6 percent interest rate would be fair and
reasonable.
   The Commissioner shall not injure any mortgage under this section
unless ho has received, from the State asciicr designated in accord-
ance with sect jon G12(a)(l) of the Tufilic Ifealth Service Act for
the State in which is located the nursing home covered by the mort-
gage, a certification that (1) there is a need for such nursing1 home,
and (-2)^thorcare in force in such State or other political jurisdiction
of the Stale in which the proposed nursing home would be located
reasonable minimum standard.-, of licensure and methods of operation
for nursing home". __ Xo mortgage shall be insured under this section
unless tho Commissioner has received such assurance as he may deem
satisfactory from any such State agency that such st -ulanls will be
applied and enforced with respect to any nursing horn*, located in the
Stale for which mortgage insurance is provided under this section.
IS                                          HOUSING ACT OF 1959

Surrry madt, b>j tfti .\tnmcan Xtii.nny Horn* .\tsnciclio.. of anHi'tle i.uTsing and
                         canralcfeent homes as of A ug. 2S, >°5~

                                                                      XcapcoSi                cur. «cn«r.              Total     Total
                                       :           bxcej               bozxx                  «-Sutefa<i:-           OTmltr numUr
               Stilt                   ;                                                         tmion?              of l^ls of hosys
                                                                                                                     III frl3t€ tn j*la«r
                                                                                                                     r^iM rrPOK
                                           H,=^        B^           ll»su*        Ik-li       Holes      B*>Ss                        *°

Abhun                                         'f\     1.923                &         2W                                 iia             y,
Ali-ti             _                            1        13,                                      1          42
Ahi«ti .^                                     S7       I.Ko '                                                So [       l.««i           »
ArtiSxii      -.                 ...          r3       I. (Q                         273                    30>                         73
Calilia'a:                                 ^. '              I
   ^cjvloj             , . . . . . ...     ^*l         li3PO I                     1.S79                  5.Csf        13.SIS
   B-^-LIL;                            , ZK-J
                                         ZK-J          li.r*i J                    7.2K                        I       5I.SII
c-ix^:...                                  171                                       (S           f-        171 '       -t.RI          150
Coaa-etKa:.                                                                        \.VZ           SI                    7.12           210
                                              it                                                                                        41
Flocvii                                                S.MI '
<>.xnai-_.                                             3.117               II :      r/>          s                      i.i-rs        IK
                                                         317 '             12        •3)          I          &          I.KS
Main                                                   I.3f»l !             I I       i>         a           |i         Mil
ina>.i»                                                                 »l         •LOT          K        3.7J         21.172
                                                        l.MI '                                                                         233
                                                       IZIKr
Kan«ii..                                    3ST         S.229           23                                              T. W7          432
                                            151;                                     XI :                   173 !       3.M9           1-2
                                                                           17                                           3.«0
                                                                                                             12         iiis           221
                                            IW                             K                                            3.SI1
                                                                                   1.723         431     2-53          IS.BK
Mfai>t-.ii.                                 33i ; ,<7I1                 9> i                    "i\i "i."sS5T'         13.SJ2
                                                                                                                                       2S7
                                             so i      1.127                           n                    312         i.:a i          91
                                                       5.311                       l.i>7          4         IK          T.tcs          3-0
                               '!!!„         12'          2J-.                                                             CO           21
                                                       I..ST-                                    M                      •t. w I
                               -HI"         »•«        4.411                                                                          !7u
                                                                                                                                      VS.
                                                                                                                       33.il!        MM
                                                                           IS                    M '      I.3>7         5.911         373
                                              13      22-".                 S       31!                                                23
Ohi-v                                                 IX'VI i          I'«5                                                           S17
                                                       *..'-l'-.,         4         311                     112         fi.972        M!
Om-a                                        ISI        !.43!               17       132 i                   .Vii        5.431         2fi3
                                            i'<2(t    11-T7                       H3I--. '               11.211        h'.m '         Ml
                                                                                     K"«» '                               101            7
                                                                            ,!
                                                                        22 ' 1.122                a                      LIT; ;       551
                                              II            Mil                                              TO                        49
                                                                       „* '           ~           '
                                            2~ll       3! CO            "a '        sSi •         2 _.        S         3.7J7 I
                                                                         J
                                                                                   I 1^7 ,_                            n.?s; •
                                                                                                                        I.SS3
                                                                                                                                       SSI
                                            I"! .      I.3T» ,                       ^^2 1I       I      2T-2                          113
Vtrs-.-v.,                                  l.-l       1.33 '.          15           SO —                               I.7M !
Vjr.Vw*..                                   =••        3.«I i           H    2.11-i                       I.II'' i      7.itv'. •      S7S
                                                                        27 1.21"                            i'll '     Ii'.9>I •       33S
WVl Vir.-in-j..
                                                                       7> ! S.i.tj i                      i,:ct i      I'-. 177        ill
                                                                        2      41 i                         t'. i           7B
i»i-Tn.'i.rr".:Tj                                                                                                       1.7M 1

                                                       3. 171       1. 1          7'.Uvi                                            17. ISS


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 Iti
   .
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 • . rrr t ' k -vU-4:tLi h^ o».n r^ i..u *-n*- Itrti rn.u*-> Ala *» Srrr
 *«. V i» r iri^t ti.i rt^'. i. *4"M.^ i..-:.i^. \ ? i ».; nt *'.i (lUc-nt.-.
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  t**. Mi*-riTi <K1 ir»i                                    1 It- > .irr in tip- [ITITTN* <il (iiUinr uit*i rui-t a ttpvt
                 TITLE IH-UEBAX RENEWAL
                           STATEWIDE YUXXING

   Section 301 directs the HT£FA Administrator fo particularly en-
courage the utilization of local public agencies established by _ the
States to operate on a at ate w ide i»aaU in behalf of smaller communities
undertakin<r urban renewal programs.
   Most simill cities ha\ e neitlicr tl-u tniiueil staff nor the financial sup-
port to hire a stall to initiate and carry thrungh an urban renewal

e
[jroject, A. trained staff at the State level can be of great assistance
 >y helping smaller communities, initiate and complete urban renewal
projects. ~
     TECHNICAL AMfcNDJfENT ON CERTAIN FINANCING ACTIIORITV

   Se>.» u 302 is a technical amendment to avoid a possible misinter-
pretation of statutory language affecting certain private financing for
an urban renewal project. Where a local public agency enters into
long-term leases of the land in an urban renewal project, the Urban
Renewal Administrator enters into .1 long-term or definitive loan
agreement with the local agency. Because of existing statutory lan-
guage, crtain bond counsel have expressed some doubt as to whether
a definitive loan agreement of the Federal Governiiie I can be Used as
a pledge to cover the interest, ju> well as the nrincipa ; This doubt is
expressed because the second sentence of section 102(a) of the Hous-
ing Act of 1010 provides that the loan agreement of the Federal Gov-
ernment shall IKJ in an amount not exceeding the estimated expendi-
tures to Ite made by the local public agency "as part of the gross
project corf." The term "gross projccr cost" is defined in section
110(e) of that act as the sum of '\c actual expenditures of the local
public agency necessary to the project undertaking and the amount
of noiittuli local grants »n aid made in connection with the project.
It is contended that therefore the loan agreement must not only IKJ
within the amount of these expenditures and grants-in aid work but
that it may be used only for them. Under this^>ossiblc interpretation,
tho loan agreement could not l»e used in any case as a pledge foi in-
terest payments on a private obligation, as they are not part of gross
project fttft.
  The JTousing Agency does not ronstnie section ]02fa) in the above
manr.cr but follows the generally aixepfed view that the pertinent
language in that section limits die amount «f the Government loan
agreement and not its purpose. It i> durable, however, to remove
the pnssihility of any misinterpretation 1>\ Itoml counsel which could
hinder financing. Accordinglj, section 3rt2 of the bill would preclude
any interpi-etalion that sii.-h langnnire limits tlie purpose of the loan
agrooment.                         "
                                                                     10
20                        KOITSIXG   -ACT OF   1950

                         E.\i:i.r
    Section :Ji»3 of the bill authorize the Administrator of Uic 1 1 J IFA
to (1) I'Apcdile urlj.tii lei.i-w.il project^ 1»\ iM'rmitting; him to omit or
•to .simplify present detailed requirement;. for urban renewal plans.
 ami (~2) where State law jwriiiil;-. allow laiul acquisition prior to
sfijr!iin«r a loan ami grant rontrart.
    I niter present law. a local planning agcni.y cannot acquire property,
begl.. relocation. or commence the demolition of a slum until the
 iinal plan-. are approved. In many instances, localities find that it
 take: several \eara from the time preliminary plans sre approved until
 the approval of tinal plan.-- The preparation of iinal plans is a task
 requiring the makli.ir of lengthy surveys. lon_r ami detailed plans
 and i>iiecinY"itioii2>. and e.\U lu-he negotiation^ and clearances wjth local
governing bodies., as well as with Federal officials.
    Since it U general know ledge that the area has been designated for
clearance and renewal, the area delineated goes through a period
of transition. In many instances, families move out of rental
lodgings, landlords find they cannot rerent, and the area, for all
practical purposes, goes into greater de'erioration.
    By permitting the local publir agency to acquire properly, start
lelucatlon. and commence demolition in the area upon approval of
the preliminary plan, m.iiiy problem.-, which arise because of the long
delay in final approval would be abated. The local agency would
\ta. pruTtihiied from acquiring property without the approval of the
 local iteming b»j«ly ; and land could not be sold until approval of
the final urban renewal plan.
    The committee uL>hc?> to emphasize that loans made to finance
earh l.ir.d acquisition must be, repaid to the Federal Government;
and that the making of su.h loans sh.:!! not be construed to cat op the
Federal a^x-ncy from d^appro^I^g any urb.m renewal plan which
mny be submitted subsequently.
                  TTIBAX REXEW.M.

   Section -VI \vonld permit the Administrator to obligate and to bor-
row from the Treasury for urban renewal loan purposes in excess of
the §1 billion statutory ceiling, at the diicrction of the President.
   In additioi.. the propped section would redefine the obligations in-
cnrn-d again.-t the Imrrowir.g authorization. This is largely a tech-
nical matter required fur budgetary purposes only. Under the lan-
gu.i^e of the proposed .-ettion. the oblig-ation^ incurred against bor-
rov\',i,g ,u.tln>i.t\ Wnuld be deltiied ;u> the Mini of the amount actually
borrowed from tin- TivaMin, plus, the nnonnt the Adminiatrator esti-
in..ic.> Wnuld bo the maximum requirement under exiatini; contracts
to be Iwirrowed fron. the TrenMiry ns of any one time. 1.1. is unlikely
that within thr foi-o.-t-eable future the billion tin] la.-, would be ex-
ccoled. Tlmu-vur. the l.itiguage of the jiropoM-d atneiulmcnt would
pen»it ll.e «ihlig:itiunb to exceed the billion dollars at (lie discretion
ofthePresidcntT
                          OILXNT A

     The Hou.>in« Act of I'.M'.l, as expanded by the Housing Act of 1954,
        ^ to thr Teder.d Government a major role in the nationwide task
                             HOUSING ACT OF 1959                                             21

of pres»r\ ing our urban areas. The slum-clearance and urbr.n-renewal
 program is a-FeifrraMocal partnership of planning and cost sharing.
The Federal Go\ eminent extends financial assistance in the form of
loans, advances, ami capital grants to local agencies responsible for
 initiating and executing local urban renewal programs.
    Section 305 of the Gill would increase the present $1,350 million
capital grant authorization by $250 -million a year for each of the
-next G years beginning in the fiscal year 1959. This amount could
be further increased by $150 million in any one year upon a determi-
nation by the Adiniiiiatratu**, with the approval of the President, that
the addition;;! amounts are nsccssary to carry out the urban renewal
objectives. The total additional authorization could not exceed $2.1
billion for the d-year period. The new authorization plus the existing
authorisation nuiiKl aggregate a total capital <muit authorization of
$0.450 million durinn the 35-;ear period from Julv 1. 2149, to July 1,
19G4.
    As of December 31, I95S, approximately $1,326 million of the
$1,350 million .capital grant authorization had been reserved for 648
projects in 3S6 communities. Activity under this program has in-
creased sharply during the last few years, with applications being
submiited to the Urban Renewal Administration for amounts far in
excess of the available capital grant funds. A backlog of applica-
 tions began to appear in 1957 and has continued to grow ever since.
    The Housing Act of 1957 authorized $350 million of capital grant
 money but only $300 million was made available by the Administra-
 tion up to June- 30, 195S. Against this amount reserved, the TJRA
had requests for $6SO million.                                          :
    The backlog on July 1, 195S, amounted to $331 million. Because'
 the authorization ...is*not increased in 195S, the Administration re-
leased $100 million held by the President which, combined with $54
 million withheld by the Budget Bureau, provided $151 million to tike
care of requiiements for fiscal 1959. Stalling in September 1959, the
TJRA issued a formula for nuluning the limited funds. The results
of this formula have been to cut back many local projects and arti-
 ficially reduce the backlog. As of December 31,195S, the URA claims
a backlog of only $JS5 million of applications pending. Testimony
 received during the hearings, however, indicated that the real backlog
demand for capital grant authorization is several times this figure.
    Activity of the program in the last 5 yean, is indicated by the fol-
lowing data:
                       Capital grant activity over list 5 year*
                                     (In million*]

                           rbcal y«ar                                  Amount        Amount
                                                                       reserved      dlshnrwil

\K&                  *" ~.              .                                   J72.0          VO.i
ite6                                                        .....
                . .....r..... ........... ............. .. . . . . .        212.3           IXC
                                                                            237.9           &.6
1W»                                                                         ma              3i.2
                                                                            i.tar.          31.5
                                                                          1. 325.3         1U.I

       3SII77—S9-
22                                    HOUSING ACT OF I95Q

                                    Project actiritit orcr la ft 5 i/cc-.*

                              FittalYrar                         Pbnntn:       Kxrcu'lnn '       tit>>rl>
                                                                 approval        ptDW,       j      |.HM

I'M                             _                                        fii             -• I               0
i'jy?                                                                    JO                                 I
                                                                                         sil                o
                                                                        IK
IttVl <KI Ft m*^iths1                                                    VI              S                   0
Stain? ax i-f U«ic. 31. 1W*                                             332                                 10


                           Stut us ft/ cairitiilyrant fund-
                                                                                   >
Aincriint authorized bv Coii^ress                                                      $i.xr>o.G"o.ooo
           l,y VK.\        I                                                            i. :E!t;. u>u. ooo
           Balance as of Dec. 31. 195S                                                       2-1.000.000
   1
        1nduitat-$IiiQ million rcK-nsoi liy I'm-Meni Ir. September IMS.
   In arriving at the amount of new capita! grant authoi t/.atioii. the
committee was impressed by the iestiiuonv of vvitnessc.-. including
many mayorsof cities w i t h active urban renewal program?. *vho urged
the continuation and expansion of the program. These uit.n.-^es
pointed out that an urban renewal program cannot operate on a
 radic ba.-i? and urged that the new authorization should be.
to insure continuity.
   Another con.-idcratioii taken into account in estimating future needs
'W;l.- testimony to the clfect that the program will grow, not only by
an expansion within cities already participating, but also L-y an ex-
tendon of the program to nev. cities. Of the total of 1.&J3 cities in
the United States (hav ing populations of 10.000 or more in 10.">0). only
2i3 l:ad urban rein. i\al projects as of December 31, ]!K>7. A.-> the pro-
gram progresses, more of the iioiiparticipaiinu cities, jjarticiilarly
tho-e w i t h less than ]OlM'tlO population, are likely to request aiithor-
ixation for capital gniut funds.
   In making the recoinniendation foi a G year capital grant authori-
zation, the committee had in mind the extent of the job _\ et to be done
in clearing iltie> of slums and blight and the involved and time-con-
suming vvoik required to develop plans for urban renewal projects.
T^ong range planning is an absolute :ierw»ilv to the success of this
program. Ollicials of local communities beiieve it imperative that
the Federal Government be committed to a continuous and adequate
urban renewal program to assure the local communities of Federal
support as local plans, are tlc\ulo]ied. It was claimed that without
Federal a.-.-i.-taiac, loial lon.i.iiinities w<nild be financially unable to
carry out the rcdcvclopniriit program and ino.-t communities would
not r ••»> Iwgin ]>l.uming unless they were reasonably assured of avail-
able Federal a.<si<tanre when i)Tan> are ready. A fi-year program
^uuld jirovide hn-alities with an as.Mirance of continued Federal .sup-
port for their urban renewal progi-am?.
                        i:Kr.vYxn:N"T or rxcoi.i.Kcnr.r.B .VOVAXCK
   Section :.0f, vvould uithoii/e the Adininisirator to pay out, of ap-
propriated iMph.il grant, fund.-, .inuuml,- eijiial to sums ho has iwr-
rovvod from the Treasury and loaned to local ]>ub1ic agencies a.', ad-
vances for urban renewal planning, if these advances have Ix-come
                          HOrSJXl. ACT uF       1959                       23
 uin.ullect.ibk'. To obtain funds. for advances for urban renewal plan-
ning. the Administrator issues note*. lo the Secretary of llic Treasury.
From thv. funds thus obtained. the Administrator advances funds to
the local public agein x fm stu.li planni.ig. Tli^se adxances arc repay-
able by the local puulii igeiiey a& moneys become available for the
imdeilakiiii: of initial mban renewal projects. Hoxxexer. where the
planning \\ork is not completed or projects are not undertaken, these
.tdxancea becuiiu- iincullixiible, This amendment would permit the
nilFA Administrator to repay the Secretary of the Treasury for
these shinning adxanceo including interest, and eliminate the neces-
sity of haxing these dibts v-arni'd on the hooka and accuniulatii.ir
iiitcix-.-M iiideliiiiiuh. Jt uotild nut alFeci ihe ohligation of the local
publir agciicx to ivpa\ tin- Federal Go\ernment if funds should be-
.;omi; axail.iblc ihruii:.'h eiibautjuent autivatio.i of one-nf the projects
involved.
                      OiMJirXITV KEXKWAI. 1'KOfiIIAM

    Al piv--eiii. tliu Adiiiiniainiior may make advances of funds io local
 publii agencies, for 1 1 • MincNs. aitvl j,lan^ for apruific urban renewal
 projecl.-. c2) genur.ll neighborhoutl rei. rwal iilanning. .iiul (3) studies
 to deu-iiniiii- the feae-ibililA of proposed urbaa renewal projects.
 Thoac .idx.iiicirx. io\ci the entire cost of planning work and are repay-
 able .-i.K-U from nioi.cA becoming available u hen the conliact is signed
 for a i.-apital gnmt to the coinmunit.y.
    Sei.tion :iU7 would add a new purpose for the Use of capital grants,
luMiielv. for the preparation or completion of "community renewal
programs." SuJi programs would include (1) the identification of
slum areas or blighted, deteiiorated. or duturioniting areas in the coin-
munity. c2) tin niea.-iireiiient of ihe nature and degree of blight and
blighting fucUn.vttitluii O u. h aiea. (Z) deieiinination of the financial,
 reloc.ilioii, a«nl olhei re.-onries. needed and available to renew such
are;!.-. (J) the identification of potential piojcct sins, and, where
 fiMc-ibk-. i\pcs of uibai. rcneua' aition contemplated within such
areas, ami (~i) .- .heduliiig and progniining such urban renewal activ-
ities.
    Federal asstMain e undir thi.- pixignun would be limited to two-
thirds uf tlie i-ONt of the preparation or complutiun of the community
renewal program. Tlii1 prugrain inuM conform to the general plan
of the locality a.- a whole and the application must be approved \>y
the. local go\ e.rnli.i: buih. Tiea^onable rei|uircineiit.i go\erning tho
scope and nature of the piugrain ma\ be established by the Adminis-
trator to <arr\ out the putpo>e.--uf the- piognim. Thc,-e re(|iiirement.s
are iiece.xsin bri.in.-i1 a .MIIM.-\ of a (.omiiiiinityV toUil urban renewal
                IH- exic-ii^ivi- .ind in\ol\ed. Without tome general dimen-
sion.-. of the propo>ed \\oik and sunn- general plan of procedure it
would bti impi tiilrnt for the Adiuini.-t mtor in approve a ca|i'.Uilgnint
   The ne\\ "ciiiiiiiiiinitx iviievxal" l>l.iiiiiinu would be financed (lirough
            "
a "jjnint" nit her than b\ an "adx'an.v" as is the case with
]>lanniii<r fuml- The Federal .-hare would be (wo thirds of the total
COM in keeping w i t h the oxi.-ting capital grant formula. Tl.e use of
grant.-, railm than . [x.tin «•> \\unld a\oid the neie,v.ity of charging to
one ill IMII ivneival pioje. t the . n-t of planning uoik'whicli might bo
applicable (o .-fVentl
      24                        HOCSDCG ACT or 1050
         Testimony received from city ofikials and others supported the pro-
      posal for expanding the use of planning assistance for tlie purpose
      of surveying the entire community and preparing plans for a long-
      r.uige program of urban renewal for tin; community as a whole. For
      some communities this would bu an ideal \\.iy of proceeding bufore
      undertaking a specific project.
  ,      For other communities, however, there arc reasons wiry city wide
 .     planning is not practicable and the community therefore; would prefer
.'    to survey and develop plans for general neighborhood renewal, as
/     provided in existing law. A «-oni.nunity may also find it more prac-
      tical to use-planning advance? to determine whether the undertaking
      of a specific urban renewal project is feasible.
                               TECHNICAL AMENDMENT

        Sect inn 30S authorizes a Federal agency or the Disl i jet of Columbia
      to obligate itself and to agree to the sUtutory remuremeiits appli-
      cable to redevelopers when purchasing urban renewal land. Every
      purcha.-cr of urban renewal property from a h*.al public agency must
      agree (1) to devote the property to the uses specified in the urban
      renewal plan, (2) to begin within a riMsonable time any improve-
      ment of the property required by the plan, and (3) to comply with
      such other conditions as the Housing Administrator specifies. In
      several instances where the District of Columbia or a FeiWal agency
      has sought to acquire such urban renewal land, it ha.s been found that
      they lacked the statutory authority necessary to make the above agree-
      ments. This amendment woii'd permit the District of Columbia or a
      Federal agency to make these required agreements. However, under
      tho proposed amendment, neither the District of Columbia nor a Fed-
      eral agency would be able to agree to ilo'n (2}: above, only to the ex-
      tent that it is authorized to construct improvements and has avail-
      able funds.
      KKJtOVAL OF LIMITATION ON* V K I I A X R K X K W A L LOAN J L X D S IX AXV OXE
                                        STATO

         Section 309 would remove the pio\ision m.w in the law that not
      more than I-1,!, percent of Federal funds for urban renown! assist-
      ance may be loaned in any one State. Present law luntaius a limita-
      tion of l'2i,^ percent on the use of both loan and grant funds in any
      one State. Since the limitation upon grants is the ultimate control,
      this doitbk- restriction ia unnecessaiy. The commit tee believes that
      tho limitation on grant funds is .ulrquaU 1 to iiiMirea proper il«-,,ribu-
      tioit of Federal a.-s-istaiuQ fur urban renewal aid among all tlm States.
                                KELOCATIOX rAYJIKXTS

        Section 310(a) would permit relocation payments to families and
      businesses displaced as a re.sull of any govuinmeiital activity in an
      urban renewal area, 01 as .1 result of a program of voluntary repair
      and rehabilitation in connection w i t h an urban renewal project. This
      provision would aiitlioii/t* p.iMnent-s by the local public agency out
      of capital grant fun.ls to families or biis;ness cstaf 'ishmuiils displaced
      within an urban renewal area by such governmental activity as code
                         HOUSING ACT OF 1950                            25

enforcement and the construction of public roads, streets, buildings,
or public works, even though they are not carried out in conrection
 with the urban renewal project.
   Under existing law. individuals, families-and businesses displaced
 from an urban renewal area are not eligible for relocation payments
 where their displacement results from The activity of a public body
other than the local public ageiicA (for example where acquisition of
a highway right-of-way within an urban renewal area is by the high-
way agency) or where displacement results from \oluntary repairer
rehabilitation in the urban renewal area.
   This has created situations in a few communities where some dis-
placees within an urban renewal area are receiving relocation pay-
ments and their neighbors across the street are nut. To correct this
inequity, the commute*, approved the extension of eligibility for re-
location payment- to all indi\ iduals. families, and businc&cs displaced
by governmental activity from an urban renewal area.
  'This section nko would increase the present $100 maximum reloca-
tion paj-ment for families and individuals to $200. It would also in-
crease the present maximum relocation payment for displaced business
concerns from $2.500 Jo $3.000. These payments are for the purpose
of compensating f!ie displaced family or the displaced business for
 reasonable and necessary moving expen-va and am direct loss of prop-
erty' except goodwill or profit resulting from displacement.
   Evidence was presented to the committee which showed that the
present ceiling of $100 for individuals and families is nut adequate to
meet the actual costs of moving in some cities. This is also true re-
garding the moving expenses for business establishments in some
localities.
   Section 310(b) would give business concerns \\hich are displaced
from urban renewal areas a priority of opportunity to purchase- or
lea«e commercial or industrial facilities to become a\ ailablo after rede-
velopment.
   Under existing law, a business concern displaced from an urban
renewal area often suffers a loss of goodwill by being forced to vacate
long-established premises in one neighborhood and to move into an-
other where the concern may be completely unknown. This is most
often true of small-business concerns \\hich depend on neighborhood
customers.
   The provisions of this section would afford such an establishment a
priority to locate in the project area, provided that the local governing
body determines surh location Io be practicable and desirable. Noth-
ing In (Inspection should be const rued as ru<|iiiiing iin^ different plan-
ning for the prrject area than would uthei w ise conform to the general
plan for the development of the area in accordance w itli the objectives
of the urban renewal plan. Likewise, this provision should not he
administered in a way which would unduly delay completion of :i
project or occupancy of facilities.
         MHORITY TO STATKS COXTKIIHTTIXO TO I.OCAI* SHARE

  Section 311 would give priority to urban renewal projects in States
where the State conrribules at least one-half of the required local
grant-in-aid. The purpose of this provLi'jn is to o.m-ourago State
     ,26                     IIOrSIXG ACT OF 1050

   / participation in urban renewal programs. It is believed that by
 I establishinti a priority incentive,-inure States will como into the pro-
(    grain ami fiie linancial burden upon the Federal Government will be
  \ reduced.
 X
 -S.                    XATC15E OF CUBAN KEXKVVAn W.A2?

        Many complaints were made by witnesses thai urban renewal is too
      complex and cumbersome and overburdened v. itli too much redtape
      and detailed review by the Urban Renewal Administration in "Wash-
      ington. The typical time to complete a project is from 3 to 3 years.
      Soine- projects started in 1050 are still incomplete.
        To nelp reduce the time required to complete a project, section 312
      would permit tlie Adininiatr.uor to omit or simplify certain planning
      requirements which are unrealistic or which cause unnecessary delay.
      The urban renewal plan must still be found to be siiflicicntly complete
      to indicate, (he-general nature of such redevelopment, improvements,
      and rehabilitation as may be proposed in the urban renewal area,
      including the general land uses and general nature of building re-
      quirements amfdensity standards.
     \ The proposed language for the statute eliminates a mnnber of
      specific detailed requirements* and inuntioiisoidy general requirements
      which may be broadly interpieted by the Administrator.
                          XoXltKSinENTI.U. DEVELOPMENT

        Under existing law. urban ieiiew.il projects assisted by the Federal
     Govuinment must be predominantly ievidential, either before or after
     redevelopment. An exception to this requirement, up to 10 percent of
     tho capital grant auihoru.4«ioii, is allowed for nonresideiilial projects
     where the site includes a substantial number of slum or blighted
     dwellings.
        Section 313 of the bill would change ilic exception to the predomi-
   , -nanlly residential rule by increasing from 10>to-20'percent tho amount
   I of urban renewal grant authorization that -..in bu u-cd for nonresi-
  • dential purposes. The exception would only be permitted in areas
  I where the governing body of <he locality determines that (he rede-
     velopment of such an area for predominantly i.omevidential use is
     necessary for the proper development of the community.
        The present requirement that the site for nonresidential dc;ulwp-
     Jiient must include a substantial number of slum or blighted dwellings
     wmild be eliminated. ("rfubstanti.il" has been inteipreted adminis-
     tratively as 20 percent of the project.)
        Tho committee, heard testimony from ofluial rcpiv.ientntivcs of
     many cities that there .ue substantial blighted areas which contain
     few if any substandard duelling units. These are the areas of struc-
     turally deteriorated and fundionally obsolete facloiies, stores, and
j wari'hoii.-os. They drain the-economic, resource* o f » i t i i - s and hinder
• the establishment ofdi-i-.nl living and working environments.
j       The initial recognition of the need to expand the urban renewal
, program to clear out and eliminate commercial and industrial blight
I was mado in I'.KIl when (he exception was first w r i t t e n iiilo (he Jaw
     permit' /^V use of 10 percenl of total capital giant funds for this
     purpose. Since (hat time, application.-, foi this ly pi'of development
                               HOUSING ACT OF 1959                                        27

have been numerous. Many have been rejected because of failure to
meet the "substantial" test: it: addition many other applications were
never filed because the sites were and should continue to be u&ed for
nonresidential purposes. The experience to date under this' provision
is as follows:
    l.'iipltal grant fnn'lis fur projii-tx umlir tht. 10-pirnnt c-zccptiun («4 of

                                  tin millions of ilullnrs]
il.ixiiniiii] available (10 |K!rcczit <>C tulal iirant iiiuiii-.v released to L HA )   1-V>. 0
Ap])lii-ations approved for grant reservation (33 piojcvts)                            10o. 3
       ITlicniiiiniticd                   :                                             20.7
   The committee agrees that the basic objective of the program is to
eliminate slums ami blighted homes, but also rccugni/.i-s that no com-
munity ran survive without an orderly plan for renewing iu> com-
mercial and iulustrial areas. FYba.i renewal in its broadest sense
would renew the entire living environment of the community includ-
ing it> commercial areas where families must shop and its industrial
area- where families must work, as well as its residential areas where I
families live. Jt is appropriate, therefore, that a reasonable percent-/
age of Federal assistance .-Imidd be used to assist a community inl
renewing nonresidential as well as residential areas.
                               xo.vr.vsJt <;I:ANTS-IN ATI)
   Section -51-1 (a) would permit the acceptance, as a noncar-Ii grant -in-
aid. nf local public iniiirnuiiieiil-. prm lileil that llie InaiUJind. "Jjint
••outraci^fwrTne project is signed not more than •> vwarsafter the com-
meinvmeiu of the local ]>ublic improvements and {provided that the
local improvements fuI':Jl the reniiireinentj> of the act regarding their
eligibility as a h»-d grant -iu-aid.
   I'lider pre.-eht law. credit for a public improvement related to an
urban renewal project is not pel milted unless the construction is
Marled .it a dale siil^ei|uent to Federal rei»gniti,iii of the project.
According to ie.-timonv submitted to the. committee, many communi-
ties have IOM credit for certain puhlix. hnpro\umenK-> because they are
unable to delay the start of Mich improvement u n t i l the Mart of the
urban renewal project. It .-eim.-. reasonable ( h a t any public improve-
ment^ which are nero.-siry foi <-ai iy Ing out the objective.-, of the urban
renewal plan for a .-nirilic urban renewal pn>jc<t should be credited
toward the local grant in aid for ili.il project, if the improvements
are Marled within a rca.Minable time piior to the loan and grant con-
tract dale. Fivejear- «as.-eleded asa rea.-onable t i m e because many
projict reijuire •• vear-. t» <le\elop from initial planning to final plan-
ning and approval.
          n nut- IMPJ:I»VKMI:NTS NKCVI.NC i I:I:AX i:r..vi;vv.vi. .VT:KAS
   Seciion "il-l(b) vvioiild permit the, cost of a imblie impn>mut?iH
»er\ ing an urban renewal area i« IK*. < iviliii'i] ;i-, \\ |fn - ;ii "•raiil-iii-alcP
vflun liiiauu'il In ii'M«iTue liond-. pavable^ from sen ire charges against
the u-ers. 1'nder exisling law, I<»-\1 grants in-aiil uro uoi acce.ptable
in lieu of the local ^iinuuuiiiiv'sone tl.ird share if the public improve-


                                              *~\J^
28                        HOUSING ACT OK          1959

incuts are whollv financed with local bonus or obligation;. pa_, ablr
solelv out of revenues derhcd from service vh:in3». However. such
public improvements are acceptable if. they arc financed 1>\ general
obligation bonds payable from ad valorem taxes assessed against all
reafproperty in the municipality. Tlii- distinction seenib to have no
               _
                                           '    ~
 * The proposed revision would credit a:u.l» publk improvement*. pro-
\ ided the cost is borne, by burnt:: or othei. obligations. \\ Inch aiv Jiaigud
a<ruiiist all the taxpayers of (he connnuniu. There would bi> no
change in existing law regarding public iiiipiv \cmentb financed b\
at^'jc-nicnta a^ainat properU solely \\itliin the- urban re.nc.nal area.
Th'.- vust of public -.iiiipixiiuiiiuiito whiJiare linaii.-ed by chapre> s»le.l\
aiiaiiic,! properties within the urban renewal art-a i» denied at. A lm:al
csish jinmf in aid because otherwise t>'ich aciioii would dcprt-*.- the
resale \aliiL of cleared land and would conatituti; a double credit l>_\
tin- Federal
                  CIJKDtT KOI! I.HIV.I. IXTTUKST PAYJIKX'!*

   Se-tion .'>!."> \\ould authori/e the inu^i.iir and JTume Finnnce
-\<rvii>-\ to iiahide intcre.-t on ;idv.unv> by a t i r \ to the h>,al urliaii
reiunal aijiuu'j (local public fi.inl-.) .1- ah ittin of jri"?.^ pptji'ct COM
for an urban renewal project. In nm-t in.-liuic«'.». the Im-al urban
rei,e\\al a^eii«.\ borrows fiiiid.-- fruiu (lie. J'eilcial GovuMimeiit to under-
take an urb.in renewal piojj«.t. r.ntvrcet .m sjicli loans obtained from
the Federal Go\ frnine.nl in coii»ideivd a proper project cost by ihe
IToiisin.* aud Home Finance Agency.
   There are certain ex -plion.s: foi examj^le. Xc\v York City, where
the city has advanced its own funds to co\cr the otiginal cost* of the
urban "enewal project and has iin.hidiul interest c-n tliete funds as a
proper cost in determining "gross project cost.''
   The Housing and Home Finance Agency ha» questioned the city's
claim to piv.-ent these iiitei-v.il charges as a propir charge, and the
General Account ing Olfice has reiidcivd an opinion to the III ITT A
opposing iiifluMoi i of the-e charges w i t h o u t f-..rthe: legislative clarifi-
cation and author'ty. The amendment confined in thio section is
intended to pn>\ ide Mich Icgislaii\e clariliratioh and authority.
           UXll-MIOt DATIJ FOi: IXTBR1ST ItATK DKTKiariN'ATIO.V

    The delinition of "going Federal rate" in the Housing Act of 10-1!) is
used as a ha>i.^ for determining (he interest rate on loans and advance*.
for urban renewal project «>. '1'lie i-oniniilici 1 has found that existing
liiw incon.-i-tiiitly deiermines 'lie aj»l)licable rate atdill'ereiit times for
dill'erent types of contracts. One «latp (date contract is "approved"
by 1IITFA Administrator) is pro\ ided for contracts executed a f t e r the
enactment of the Housing Act of Ifl.'il ; another date ( d a t e contract is
'"made") appl'es to contrails executed prior to ( l i e enact menl of the
 I!i")l a c t ; .ind still a third dato (date contract is "revised or .super-
seded") is used for amendatory contracts.
    Sod ion :5Ki of tl.> nnnnitlpo bill would proxide a single uniform
dnte for Hie delermination of Ihe applicable going Fvdi-i.il interest
rule. This amendment would li.x the dale for determii ; i-g the appli-
                         UOCSING ACT OF 1959                                   29

cable rate for all contracts- as. the date the contract, or amendatory
contract, is "antliniized" by the Administrator of the IM1FA. Such
authorixation i>.evidenced by an internal allocation order, which allo-
cates capital grant fiinda for the particular project. This allocation
order would serve a* a uniform ami convenient date for determining
the applicable iiuere.-r Rite. This Change i» merely technical and
would not tend to either increase or decrease aggregate interest pay-
ments by localities.
                CKKIHT FOK I.OC-VI. I'UIILIC IJITKOVKJIKN'TS

    Section :>1S of the bill would w a i v e the requirement in section
ll«'(d) of rhe Housing Act of JO-JO for communities whoso urban
renewal projects could" not obtain Federal recognition during the
period from January I. l!i.">7. through i>ecend>er 31. I'.i.'i^. solely be-
••an-eof inability of the JIIIJ7A Administrator to make capital grants
or to reserve funds at ce'iaiu time* during thai period. Under exist-
ing law. prior Federal recognition i> required to enable the local com-
munity to include a»i.-t:ince given by a Stale, municipality, or other
public body as u noncash grant-in-aid.
     It was brought to the attention of the committee that several com- -
ni'.inities were denied credit for public improvement* within a re-
newal area a~ nonca-h grants-in aid becau.-e the public improvements
were started prior to the date the Administrator had given oflicial
recognition of the urban renewal project. It was further pointed out
that the rerognitio'i was delayed solely because of exiMing limitations
on the authority of the ITILFA Administrator to reserve capital grant
fund*. The communities claimed that the public improvement^ were
vitally needed and could not have U-en delayed until the project was
recognized by the Administrator. This, section would correct, anr. in-
equitable situation.
     Tin* s-pction would further extend the program to include individ-
ual counties or groups of counties, a^ being eligible for planning
grams. Jij recommending thi.s extension, the committee made it clear
That the grant* would continue to be made through State planning
 agencies.
      I'nder existing law, the Administrator is- auihori/.ed lo make grants
 to State planning agencio for-the proii.sion of planning assistance
 lo cities and oilier municipaliiie.- h a v i n g populations of less than
 ii.-i.iMni. ".M>!iiicij<iiliiiis" ha.s been inierprcted to include only incor-
 porated ciimniunitie.s and exclude.- mincr<>ii> .-mall place.- uliicli have
 equally si.j-iuiis nrlian planning problem.-- but which are not incor-
 porated. This -cctioii \\oiild extend the benefits of the urban plan-
 ning M-sistaiirc program lo group.- of .small place.- regardless of in-
 corporation, provided t h a t Mich .-mall place* h a v e common or related
  urban planning problems.
     rw.vx I:I:M:\V.\I .vi:i:.\s INVOI.VI.VC coi.i.i:crn< <u: i MVI:I:SITIKS
   Section .'!|!' would n-"\i<-e the pre.-cnt rcquireineiil regarding hjcal
     'a-h grant- in aid lo permit expendiiure> l>_\ college* and universi-
      (for acquisition and demolition of land and buildings within,
 adjacent lo, or in the immediate vicinity of the urban renewal area)
30                          JIOITSIXG ACT OF 1059

to be credited toward tla locality's one third thare. This credit
 would U» i*ermiucd even though the e.\]iendiiiire was made 0 years
prior to the approval of the loan and grant contract. This credit
 would be allowed, proxided that the local public agenev certifies that
(hi development of a project in an area involving an educational in-sti-
imiiiit would, in addition to the elimination of .-Ii.iiif. and blight, fur-
ther promote the public welfare and the proj»e.r development of tlio
e> -Miumity.
      i, iirat'ional iitetiiutiun" i> defined for purjMJses of this section as
auv nonprofit educational institution of higher learning, including
both public-and private institutions.
    T!ii» section al.-o would remove the predominantly residential re-
qulivniviit Aur urban renewal project area.-, involving educational
•uMKiitimu-. This provision, therefore, would jjermit urban renewal
di vi loj'iuri.i in .Mirli areas, provided there are a^ui^taniial nunilK-r of
.-.linn nr blighted buildings, wliich vvoiild be eliminated by tlie urban
renewal undertaking.                                         "
                                URBAN" l'I>\>"NIXC

    Section-32rt of the bill would increa.-e the present tuthori/.ation for
<;niitta to a^i^t urban planning (r-ec. 701 program) from $10 million
to £20 million
    Tlie suciiou T01 prognun \* designed opeiially to facilitate urban
planning foi ^mailer iniiiiiiiiiiitli-,-- lacking adequate planning re-
Miunv--. Graiit> made under t.he prognun aix- for oO jicrceiit of the
e--timaU'd i-».-t <>f the {ilaKniti^ work. Grant.- are made to State plan-
ning agem Ir.-. or to metropolitan or regional pl.inning agencie> m-og-
ni/.nl b\ the St.ite to an ompli>h .-urh planning a.-. itm-ey.-. land use
.-imlif.-. urban renewal j>lan.-. and technical ?ervice». but excluding
plans for ?peciiic public works.
    When fhi.-- prognsm vva.- enacted in 10r»J. onlv eight Slate> had par-
tially adequate enabling law.-, w h i i h would lH-niiit the States to u>e
this Federal ] irram. Tn live of the cighf State.-, jwrfctting legisla-
tion vva.s i-c<|,.ircd. Since Ifl'il. however. 20 Slate.- have adopted the
neee.»arv log!-I.ition. AM a re>ult, activity under the j)rognun has
been stendih ii.i-ren.-ing. Funds appropriated prior to iWal ]0.")0
 (?->.77.~>.iMiO) .vpre exhaiMcd (e.\cej>t for .-oine S^.fifil) w i t h the ap-
proval of applications received through inid-Decriiilier 10."»7. The
Agency has indicated that api>lication> ivceived for li.-eal 10">S
ainoiintul to -Hirl.tly le-> tlian ^1 miiiion. and that applii-ations on
h:ind at September 'l7. ID.'iS. totaled more than SJ.flOO,OftO. Applica-
tion-; for gi-anl> were coming to the ,igenc\ al (he n«lc of $:V2.»,0(W jx»r
jnoiith j'l iur to September 17. The Agency has indicated that the total
nppifipr'niion for li-i\-d \i-ar r.i.Vi will be used up prior to June 3t,
l!>"»!i. and. if -o. it w i l l leave i.nlv S07.">.rtflO to IK- a])]>ropriaied for th«
pmjjnun.
    The table ln>hiw >bow> the amount of :i]>])licaiioiis »]>]»roved and
theaniouni committed by fiscal years.




                                                 •t
                                   HOUSING .ACT OF 1959                                             31

                                 Total authorization. $10.000,000

                                                                    Arvxini    Application* Coal of
                                                                |af.rrJJ<ino! SpJTOVKl appUcuions
                                                                  by Coti^ic5J
                                                                      ;
I9S5                                                              11 C<» OCO          4         11(0.31*
I*W                                 ,      T    . , . . . . —      ZCW 000           36          $77301
I«T „.,                 ,„,,,,      JW,,   .......                 i.xc.—.0          43       I.TwP.KS
MS*,    .,              .. ^                   ,,,      , . .      1.I7&04O                   3.P3.3CC;
lt"°                                                               3.XO.OLO         «37        'SH.2/7
       T.K31-   ,,„„.                                              9.C23.CKH        192       6.BM.9M

 * Fturrs rt;otMat the tot A o*ilh> •>( Gic^l jai I4S>. oc i» of DR. 31. Mif; Atcncy toil on tvioJ as of
Dtc. 31. l-X!>, stoat OS J«> 'Ins 3pr-:icilit-n<. aiirrpitins il/I^SH,

  The eoniniitut.' believe that tl.ia proirram ^miihl be contiuiicil ami
the bill proixfec* an increase of $10 inilfiun in autliorizittion.
  Section 320 :il=o u mid extend the scojw of the urban planning
grant program to include any group of adjacent coinniunitiiij, havinir
a total iJopulaiion of less than .'lO.OOO. and Laving cuintnon or rclatetl
urban planning problems resulting from rapid urbanization.
1X\"JST3IF.XT IJY IUXKS I.S TA>Xn-TER3t OltUOAlTOXS OF U>C.\I.
                              AfiKXCIKS

    I'nclcr existing law. national banks and State member banks of the
Federal Uesene S\stem are permitted to purchase short-term (IS
montlis or lets) obligations of local public agencies if such obligations
are backed np by a loan agreement w i t h the Urban Renewal Admin-
istration. Section 321 would amend existing law to enable such banks
to purchase bo.h short term and luiig-tcnn obligations of a local pub-
li-1 agency issued in connection with an urban renewal project whei-e
all installments, when due, of both principal and interest on such
obligations are secured by an unconditional agreement by the Federal
Government as now authorized under sections 102(a) ami 102 (c) of
title I of the Housing Act of 19-19.
                   RATIONING OF UKRAX KEXKW.U. CAI'ITAT- GRANTS

   Many witnesses complained bitterly about the current practice of
the Urban Renewal Aclininistrauon in rationing^ capita] grant reser-
vations. When the Housing Act of 1958 failed to pass, the Urban
Renewal Administration found that it had only $!,)•» .Million of capital
grant funds to meet a backlog demand of over"$300 million in applica-
tion*. In order to spread out the limited funds over as many cities
IK po^ihle, the Urban Renewal Administration developed a rationing
formula on September S, 19.1S. The elFcct of the rationing formula
was to cut back the size of projects, many of which already had been
planned by the local communities. The Urban Renewal Adiuinistin-
tinn 'timed back a number of projects and asked that the communities
reduce the sizes of projects to figures which would come within the
formula applicable to each particular city. Many projects were
drastically cut and in some instances the size of the projects uuro cut
in half.
   Tho committee was impressed that, the effect of the rationing for-
mula is to reduce and cut back the urban renewal program. In many
32                       HOUSING ACT OF 1959

on?es it resulted h. an inefficient •li>\elojnm>ni of ansi» by requiring a
project much too .-mull in be eflii.'ient. The cunimittcc bclicxea that the
rationing program is uncalled for ami thai ihe Ix==t intei-oati- of the
urban ivnexval proirraiii will be tcrvctl bv rctumin:;; to the practice of
issuing- capital grunt rc=cr\-ations on a lirst-coinc. first-aervetl baai;-.
Tliero ?wnie<l to be almost unanimous a^i-uciiicnt that this uoiiKl It-
the better procedure among the communities participating in the pro-
gram. It i» intenued Uiat b\- ilie pnssngc of this, bill (lie Urban J?e-
newal Administnuion will have adequate fnmL to carrv out the
program without ihe necessity of rationing as Ijcgun in September
1958.




                                        ~t." O 7
                                        ••..-..» §
                          TITLE IV— LOW-SENT HOUSING
                                               BACKGROUND

   The committee has received extensive testimony, from hearings in
"Washington and in the field, on the difficulties confronting the low-
rent public housing program. For example, the 70,000 additional
unit* authorized by the Housing Act of Iv.'fi, to be made available at
the rate of 35,000 units a j w. have not j-et been constructed: in fact,
only 30.000 units have been placed under annual contributions
contract.
   This slowdown in the program has occurred during a period when
the need for low-rent housing has not lessened. The liecu has become
more acute as a result of an increasing volume of family displacements
caused by stepped up programs of urban renewal, highway construc-
tion. and other public activities. Evidence submitted bv the Housing



5 ynt                  7i>.*>. 1S5D, anil WHO) e.iliiiintc of familict to tic displaced by
                                        t/ftrcmincntal action

                                                                                   KItll.> for public hoiulne
                       TTT* of di>|4icen:ent                        XumUr of
                                                                                     Prrewnt        N'nraKT

           nercil (till* I'-   ..     -.-.»...                            a.fi'0               57         17.300
            TfopranB .          ........
                               .........                  .             = 74CfiO                          3I.SOO
Othtr go                                                                  SJ.OOO               K          40.WO
                                                                         2IS.OW                V)        12X700

               ji           a m i w . « « - * o « « u c o so c r r j n i t i i i u i } c a o c a n ( o r c .
                f Tn.WO fi:rT.nhf<l I > tbo Iliiruu of Put.lit Kui-U jn.i _i!jiu:cJ to inside cW«ly 5lnclc-peraon
honsrhol-b.
  "Siirti u put'M (OON'nictlon. nr.lt ei.f^.imcnt.cilctlunof o\«Incomc IcruntJ In public I'oiulnr, dtm-
olillon of Jf mi*r.uy hoinln;. tlf.
  Socr«: IIIIFA.
  Tx>\v-reiu public housing is an important aource of supply for nieet-
ing tliesc relocation needs. Therefore, the Committee recoimncnds
some changes in the low-rent program as necessary to meet these needs.
The committee has been impressed by testimony pointing out the
concentration of control of local prujects in the hands of Federal
official?. The committee believes that (his is coiili iry to the. interest
of the program. It is thi> committeeV. intent and b\i>eciation that
groat or rt^ponsibility .it the local level, together with the full cooper-
ation and assistance of the Federal Public Housing Administratioh,
will enable the program toiuakf abound cunlribution toward mucting
the Nation's needs for low-rent housing.
                                                                                                    33
34                         HOUSING ACT OF 1959

                           HKCI.AI:ATIOX OF roi.tcv
    Section 401 of the committee bill would amend ^ectiuii 1 of the U.S.
Housing Act of 1!157 by adding to tlic declaration uf policy a iitimbcr
of new jxjlicy object it re. In the o|>craii<':, of low-rent housing it
would l>e die policy (1) to vest full responsibility in the local liotiMiig
authorities for e>tabli?hinn rentj and iligibility ixtiuiix-iiienta (subject
to proposed statutory ceilings). (J) to provide for large families- and
for elderly jiertoiis. ai.d »:)» to acquire existing duelling for public
housing use.
    The committee dtloteil finm tin- bill cer:ain provisions relating to
the preparation of budget., and the auditing uf local public aguncies.
This action "a? taken i.i the understanding that the same objectives
urtilil be acroniplislud In Jiange.^ i" adinini.-ti-at5\e proceditrei and
practice*. In this coimectiun there i» qnoii.1 Ixilou a letter dated
J.munry 2S. lO.'ifl. from the C"oniini»ioiier of the 1'ublic Iloiining
AdministnUion:
                                 Pri-.i.ir IToi-jJtxo AnjnxisTKATiox.
                                 I lorsixi; AND I IOMK FIXAXC?: AoKxrv.
                                           W'Tx/iiiiflfnn. D.f1., January SS.lftoft.
linn. .Infix .1. STAKKMAX.
I~J>. Xi naff.. TViixhhirittiH. ]>.C.
    l^r_\i: SKXATOU SI-AUKMA.N: 1'Icai-e ai-i-ept my regrets that illness
pivveiited me fnnn itifdiiig w i t h yon Tuo.-day inoniim:..January i7,
and arrppt my th.mk.t fur i!ii'i()iine,-ie> \IMI e.xtended to my represent-
atives.
    The uiodiliiMtiiin of pre-M-nt 1'edenil practice u i t h respect to fi.ical
auditiiiir, ai.d bnd<retat\ iT\ii>u ai.d appnual di^ircd bv 1-^al housing
aiiihuriiic-M-aii Iu-.>t l>e.i, i-on.pli.-liiMl in my judgment.adminiMrat i\cly
niider a lien ])i»lii\ mandatt' j-.-tabli.-hed bv the (\in«ire». This j>ro-
• •ediiiT would ba\e .id\.iiti,-i<!c both to the Federal and local interest in
the administ nit ion of the low-rent housing program.
    With respect to li.-c.d audits, the pro\ision \\hioh now predndo a
hual liDiishi^ authority fioin sfi tiring ai. independent audit froin a
qualified public :uvi>nii(ant is cuiitained not in the statute but in MM--
tiui. :>11 b of tin- standard foini of annual contributions conduct lie-
iweoii the Pnblji TIoiiMiiir Administration and luc.nl housing aiitlmri-
ties. This soctioii can lie wai ed .10 as to permit a local lioiiMiig au-
thority should it >o desire to < bi.iin its own audit and treat the cost
thereof :vs an eligible operating x.'.i."iise. 1H retaining administra-
tive flexibility, \»e coiild satisfy the di -ire.-, of local housing aitthori-
tto and at the .-.nue tiine not into fere >\ith the stalling and program-
ing of PITA Ii-<-al audits as \\onld if .-tilt, were each local housing au-
thority in a poMtion to eh'.-i shorth In-fore the lieginning of each
 lix-al year to hau-a private or-PRA li.»c.il .uidit. With administra-
the llcxibility. the .iinoimt (if,id\.ii.. c noli, c reijuiii-d of local housing
aut!..<rilies mnld lie \aried from time to time so that the joint objec-
tive of local option and an orderly PIIA audit program could l>o
achieved.
    With respect In budgetary re\ie\v ai.d approval, this also is n re-
iniiivni'-nt of (!•> ..t.nual contributions contniit and not a specific
provision uf ;]»• Ia\\. I«i-t year PI FA adopted n completely niodi-
li«-il and improved budget system. Many loc(il bousing authorities



                                         j: '
                        HOUSING ACT OF 1959                             35

 have expressed their satisfaction with it and we have been com-
 mended fur its installation. Indeed, when I met with committees of
 local housing authority commissioner^ throughout the country dur-
 ing 1958,1 discussed with them the desirability of PIIA's relinquish-
 ing the approval of local housing authority operating budget*.
    There were differing viewpoints. Some commissioners felt that
 properly they should hare and would welcome full responsibility and
authority over their operating budgets. Others, however, felt that
they needed and welcomed PIIA's review and comments.
    Again. thj>«e viewpoints can be reconciled administratively-. I/ocal
housing authorities could file their budgets with PILV. This is re-
quired so that PITA can prepare intelligent forecasts of annual con-
tributions requirements. The PITA staff could then review and fur-
nish the local housing authority commissioners with comments and
suggestions on the local housing authority "s operating plans and costs.
Tlie local housing authority commissioners would then be in a posi-
tion to consider the projiosals of their own staff, the PITA comments
and, make their own decision. This would provide both local inde-
pendence and discretion and Federal advice and assistance.
    To my mind, this administrative practice would be preferable to
legislative changes in the statute, coupled with a directive to change
all existing annual contributions contracts to incorporate them, for
one very cogent reason. This procedure is experimental. If insti-
tuted by precise legislative requirements and contract modification,
should the Congress subsequently become dissatisfied with the results,
 it would be unable, to.restore the sf atus quo since local housing authori-
ties would bo protected by contract even against the i>owr.i- of the Cou-
gress. On the other hand, should this innovation in Federal practice
be instituted administrate ely under congressional mandate, coupled
with the requirement to report the results back to the Congress after
an exj>erimeiital jniriod, say of 2 years' duration, there would be no
contractual harrier to the Congress exercising its judgment and au-
thority as it deems best suited to the public interest.
    Further, by foil-' \ing the administrative route, should any particu-
lar situation aris\ ^ Inch cills for prompt action in the interest of the
low rent housing ^rogram, thesi waivers could be withdrawn in the
specific situation. It is unlikely flint such a situation would occur but
freedom to move might be essential under what are now unforeseeable
circumstances.
    To effectuate this arrangement, we would suggest the inclusion in
legislation of language in the United States Housing Act directing
the Public Housing Commissioner to vest the power in local housing
authority commissioners to exercise their judgment with respect to
the operations of the low-rent housing program to the maximum ex-
tent compatible with the accomplishment of the objectives and pro-
visions of the statute. This legislative change, coupled with a state-
ment, in-the commiltec report setting forth the above outlined admin-
istrative modifications in P.IIA procedure and practice, would assure
the institution of the changes and give the Congress an opportunity
to evaluate the- results.
36                      HOLalXG ACT OF          1959

  Should these suggestions commend themselves .to you. we should be
happy to meet with your staff to work out the technical details
involved.
       Sincerely yours,
                              CHAKLKS E. SiiisszK*.Co'mmis8ioncr.
   The legislative change suggested bv'the Commissioner appears in
section 401 of the bill. This change in intended to relieve tlie Public
Housing Administration of much of tlie detail of policing and su(>er-
•»"~ing local management operations and of placing responsibility for
th^se niiffters on the local public ȣC.icie>. Tin* committee believes
these responsibilities should extend to the control of manageme!>
budgets and to the general auditing processes of the program. The
Public- Housing Commissioner advised the committee (hat he is will-
ing to authorize local public agc.u-ies on an optional basis to under
ta'k? their own auditing and to coi.\p:le and appro\ e their o« M ojMjrat-
ing budget?. Tlie committee understands that this will be done
upon nn experimental basis and, the results thereof will 1« duly re-
ported to the Congress within 2 veal's'. The committee understands
that (1) (he Pnblji- /lousing Administration will rccci\e the budgets
of the local public agencies prior to their adoption by the local public
agency and will provide an advisory service in connection with the
content.; of lhes-e budgets. (2) the °iiblic Housing Administration
and the Comptroller General will continue to make postaudits on the
operation of the local public agency, and (3) in the event of dis-
clo^ure of any abuse, the Public Housing Administration will promptly
withdraw the waiver vesting these responsibilities in the particular
local public agency.
                      JN'COMB LOOTS .\    I) RENTS

    Section lo2 would amend several feel ions of (he F.S. Housing Act
of 1$?>7, in order to permit local authorities ^o sol rents and income
limits for projects in accordance with local needs, subject to a stat-
utory ceiling. Under existing Jaw the PHAj by virtue of its powers
of prior approval, sets lx>fh the income limits and Ine rent* which
local Lousing authorities must observe™ Local authorities are in an
excellent position to make these determinations themselves in view
of their knowledge of local conditions.
    The committee proposes a maximum ceiling on income limits which
is the same (except in the case of displaced families) as (lie present
statutory ceilinir which governs Federal approvals. Tn establishing
th'* ceiling a determination is made of the. lowest, gross ic'iit being
achieved by private enterprise for a suU-tnntial supply of .standard
d">llings of ditlo.rent sixes. This factual determination would ha
subject to Federal approval. For families reeding a dwell! ig of a
given sixe, the coiling on income limits is determined by deducting 20
 percent from the private rent determiiiatioii and then multiplying by
 a ratio of ."• (ha«cd upon the assumption.that housing expense should
approximate one fifth of income). Thi'M- are the same percentages
and ratios as in (ho present act. The committee proposes that the 20-
 pfivont gap IK> vaivcd for families displaced by urban renewal or
 othc-i governmonJal action in ordftr to prevent hardship to such fami-
 lies who cannot a fTord decent private housing.


                                          \ '
                              HOUSING ACT OF 1959                            37

   In determining eligibility for admission to public hui..-ing. the com-
mittee bill would Continue, the present exemption of up To £(>IM of
the income of each nieinl>cr of llie family other than the principal
income recipient. The committee proposes to continue the other
exemptions now ]>emiittcd. except that it would delete the present
§1 Of I exemption for minors and dependent adults.
   The committee pro|x>ses that the setting of rents be left solely to
local authorities, which would bt free to establish rents in accord-
ance with.the needa of Ion -income families in their localities. Under
such a flexible policy the local authorities, could establish lower reist.-
income ratios for large families than for small families in order
to help large families meet their budgetary needs.
   The local authorities would, of course. have to establish rents high
enough to meet the current operating expenses of their projec-ts.
   The delegation to local housing authorities of the power to establish
rents should not tempt such authorities to charge higher rents than
are necessary to keep their projects solvent. Local housing authorities
are under considerable local pressure to serve families \\ ith the great-
est housing need and at rents within their ability to pay.
   Soction""l03 amends section (2)."> of the Housing Act of 1937. as
amended, to j>crmit A local public housing agency, in any case where
the local public ho.ising agency and the local uiban renewal agency
operate through a combined central ollice administrative staff, to in-
clude fiS a development cost of its low-rent housing projects the con-
struction (either on or off the s'fc of "its low-rent housing projects) of a
cenri-al ollice building \ ith sufficient, sp-ice. for the cent nil oflicus of
both the local public housing agency . ml the h>cal urban renewal
agency, and to rent space therein to the local urban renewal agency.
The law now permits joint use of Mich space where the two local
activities have.a common legal identity. This provision merely ex-
tends (he authority to cover situations where the I\\o activities ha-vc
separate legal status.
                            USE OK KXISTIXO mVKLUXCS

   Section ini provide- that where a local public housing agency deter-
mines and certifies to .he Public Housing Commissioner and to the
Housing and Home Finance Administiator that, the acquisition and
repair, rehabilitation, or remodeling of existing dwellings for use as
a low rent housing project, the Commissioner and the Administrator
shall employ the powers, functions, and duties vested in them by the
United States Housing Act of 1037, as amended, or any other act in
such in..nner a.- shall facilitate and encourage the undertaking and
carry.ng out of such low rent housing project- by such local public
lion-ing agency, and the annual Deport of the Administrator shall in-
clude in format'on cm lie number of Mich cases and the manner in \\liic.li
such iuiirlijii-v-lx'H'cr*. and duties were so emplo)od and exercised in
such cases.
   Tt has come to the a»Jen'ioii of the committee (hat. the costs of imw
const run inn of low rent housing units h a v e risen in some cities to
unjn-liliably hi.qh figure.* As a partial answer to this, proposals hav e
been made t h a t - t n e oTbji'divo.-. of the low-rent public housing law would
l)o met by ptrni : ,iiing1hc u.«e of vs'iMiiigstructures to hoiiM^low-income
      .'i."!>77—.V,i   tf
                                        C
                                          J | »>O
                                        **-L - .^
38                           HOUSING ACT OF 1959
families. Testimony was submitted that considerable savings could be
effected l»y purchasi:..:and rehabilitating existing structures, provided
that extreme care was exercised in selecting structures that were of
pound construction and which could be eiliciently used for this purpose.
   The purposes of this provision are to remove any legal doubt about
the authority of the Commissioner in this regard, and to provide en-
couragement for such undertakings when the local public agency certi-
fies that such acquisition is in the best interest of the program.
                          .\nniTiox.\r. AUTHORIZATIONS
   Section 405 would amend section 10(i) of the United States Hous-
ing Act of 1037 by increasing the authorization for new- annual con-
tributions contracts by 33,001) units to become available on July 1,
1959. As a result of increasing the responsibility of local communities.
for the operation of their public housing, there should be a substantial
demand for additional low-rent housing units, particularly in con-
nection with urban renewal programs. The bill, therefore, provides
an authorization for an additional 33,000 units, as well as an extension
of availability of existing authorizations for 1 year. This would
provide for a program extending through June oO, 19G3. Such an
extension is essential for adequate community planning.
   The effect of the now provision is (1) to restore, until July 31,
TOGO, the 10.0-Ji units lost to ihe program by expiration of authority on
Julv 31, 195^, (2) to extend the balance of existing authoi'ty under
thc'insc act of approximately :JO,000 units to JuneTSO. 19C . and (3)
to authorize an additional 3r>.G'.)U units, beginning Ju / 1, 1959,
through June 30. 1903.
   The status of authorization under the Housing Act of IDoG is as
follows:
                                                                                             Dwelling unit*
Number authorized b.v II»ii.*in;: Act of W'Al (as of Dec-. XI, 105SI ---- 70.000
Jst-year program (Aug. 1,lor»G-.7niy3l, IJt.'iS) ;
     N'mnlirr authorized ___________________________________________ 3.". 000
              under contract-       .......      --------------------------------- 2-1. 9CO
     Number lost to program                 ---------------------------------------                  30.0-10
2d-.vt.ir program (July lf10."7-.Tiine:iO. 3fl.~>fl) :
     Number authorized____________________________________________'ft, 000
     Number under contract_______________________________________- -l.!)!H

     XmnliCT »rail:ililb until June M. lft."f»         .......   -----      ......      ..........   30. (XX)


     H^-orv.ition issiiod    -------   .................... ------------------ 8 1. 327
     Applk-ilions hi process ----- __________________________________ 17, 000
       Toed in process         ....................    _____             .....................       51. WW
  XnTK.— The TTousing Act of 19.")0 authorized a maximum of 35,000
units to ho put under -onlra • from Augiu-l 1, 19r>(>, to July 31, 19.r)S,
and another 3.*),0(Hi units from July 1, 19"»7, lo June. 30, 19;")!').
  As of July 31, 19">S, only 2 l,!K;o units were jmt under contract.; tho
remaining I0,(i-|» \inils authorixed by law were lost to the program.
                         HOUSING ACT OF 1959                             39

  Of the 35.000 units authorized through June 30, 1959, 4,991 have



                          OVEKIXCOME TEXAXTS

    Section 40C would amend several sections of the U.S. Housing
Act of lfl:}7 to permit families, whose incomes increase beyond the
 maximum limits for continued occupancy, to acquire their homes.
 Under jiresent law, families whose incomes increaac beyond the maxi-
 mum limits for continued occupancy must he evicted from their
 homes. This constant threat has been a continuing management prob-
lem. After very careful consideration the committee recommends
that where practicable such families be permitted to acquire their
homes. This should be relatively simple L the case of projects with
detached dwellings or row houses. Admittedly it will be more difii-
cnlt in the case of projects with larger buildings, where some kind of
cooperative ownership would probably be necessary
    Under the committee'.! proposals, occupants aMld-eiiicr into a pur-
chase contract for their dwelling. They would pay full local taxes,
ainoriixc the pmvhase price of their dwellings in 40 years, and pay
interest at the cost of money to the local aiuhority. Such families
would, therefore, not receive any direct Federal or local subsidies.
Tin- bill makes it clear that the purchaser would reimburse the local
authority fur a pro rat a share of the cost of any services furnished to
him. In the case of units owned cooperatively in a large projcct.the
local authority might, for example, provide management services or
furnish he.it or other utilities and would be-.reiiuburseil for such costs.
However, in detached units or row houses, the occupants would be free
to undertake the complete maintenance of their dwellings and furnish
their own utilities.
    ]t will probably not he possible to apply this plan to existing proj-
ects on which bonds are outstanding, except in the event, of refinanc-
ing. On new projects and (hose not \et permanently financed, bond
counsel IMS assured the column tec that the proposed amendments will
not detract from the security of local housing authority bonds, nor
adversely a licet their marketability or interest rates.
   The committee w ishca to make it clear that these sale provisions are
permissive. Any local authority thai finds such sales not feasible
would be authorized to permit overincome families to remain in occu-
pancy, on a finding made each year that decent private housing is not
available to them on either a purchase or rental basis at a cost they
can a H'oi d. Such families w ould be required to pay a rent that in\ olvc.s
no direct Federal or local subsidy.
   The purpose of the sale provisions is. to stabilize communities. The
committee wishes to make it cL.ii (I) that the sale provision is not
intended to decrease the supply of low-rent public housing for fami-
lies, displaced from slums. (2) that the local agency would repurchahe
a unit if the tenant failed to carry out the terms of the contract, and
(3) that (his provision cannot lie used as a \ehicle for rental or sales
speculation.
   On the basis of its studies, the cwimnif.tce believes that the provi-
sion: of this section w i l l permit overincomo families, to purchase «r


                                  *> I
                                  ~ JL'-
40                       HOUSING ACT OF 1959

continue to rent their homes at uiisiibsidi/.'jd hunting costs within
thilr means. and that the purchase terms anil the option afforded the
local housing authorities for repurchase are fair and equitable to both
parties.
                          KEVJSIOX OF CONTRACTS

   Section -107 would add .a new section 30 tp the United States IIouo-
ing Act of 1937 to provide for the amendment of existing annual
contribution cont.-acts upon request to local authorities. Local au-
thorities could not take any action \\hich would be prejudicial to third
parties, such as the holders of temporary notes or bonds. This author-
ity will enable the reopening of existing contracts foi conforming
(hem with changes in basic law.
       ruovisio.v FOR PUBLIC HOUSING IN VKKAN KRXKWAL .\RK.\»
   Section 108 would amend section 107 of the Housing Aa of 1910
to facilitate the dc\ elopntri.it of lo\\ rent hoiking in urban renewal
areas. In 1910. when the Housing Act of that year was passed, most
MvmLers of the Congress felt that public-hollaing- would be included.
to the cxtciiLjicceaaaiT. in urban redevelopment or renewal an:ns.
That has hot happened. At present. if a public houaing project is-
located outside of a renew .il area, the only louil contiibulioii i^ a for-
giveness of ;i portion of lucal taxes. But if the project is located
w i t h i n .-iich an area, the locality must make two contributions, (1)
tax exemption, and (2) one-third of the lossiiu'urrcd in buyii;,,. clear-
ing, and disposing of land in the urban renewal area. This situation
has caused communities to avoid the use of urban renewal sites for
public h> 'ising. Yet, urban renewal sites are often the most appro-
priate locations for the rehousing of displaced families of low in-
come. Such a TTsC can J f>ep-the=e families- in t4ie nuighhuihoodn to
which Hioy arc aci ustomed and which are convenient to_thcir jdaces
of employment.
   Section -108 would permit the 1TJIFA Administrator to treat the
local t.ix contribution as sufhVicnt to satisfy— a_ locality's one-third
share of any loss attributable to purcha.-e, clearance, and disposition
of ihaLllorVion of the_u,tb:ina>eiicnal.-are.uu.-<ed. fo.iLj.«_paibli«JioH»ing
project.          ^~   "
   For purposes of this section no distinct inn is made ImJwccn public
huiising projects en ibled by Federal piograuis, State progrnms, or citv
                       TITLE V—COLLEGE HOUSING
            JiUl incre;i.-ea the college housing Io:m fiuul authorization
from ?J'L'r. million to §1.3i"» million, a total increase of $400 million.
Within that total. $.10 million i» reserved for "other educational facili-
ties" as presently defined, and $.">0 million Js.ns-ervcd for housing for
student nurses and interns. The coinmiltec was impressed by the


Higher Education, the American Medical Association, and thi, Aineri-
can Hospital Association, all of whom advocated and requested a snb-
stam'uO.lnrrease. in the college housing loan funds.
   The college housing program has l>cen useful to colleges in every
section of (tie Nation, and the aid to educational institutions which
thi* program ha^ provided- and will continue to provide justifies the
confidence placed in the program 03* the Congress.
   The following table indicate.* the status of authorized funds and
emphasizes the luted for the new authorization provided- by the com-
niirree b:ll :
                               .' huiiislnij lunii fund, as of Dec. 31, JOSS
       T(.i:il authorized________________________________________$025,000,000
O'liniiituil :
    rollfjro lioiisii'jr dormitories ________________________________ S07, -150, 000
    Co]l.-«r service facilities ....... ____________________________ J)S,SW, 000
     Hi>x]iit;ii lioiising for nur-'OM :uul in'erns_____________________' 15. !Xi(i. 000

                                                                                       021.7S2.000

  ' M.iiiiiiiin anlliori?.-.! r»r <-c,lI.^-c vrnlri- fnclllllo. JIDO.OOd.dOl). nnd for liospllnt nurses
anil Inr«Tn lioimv-, S'.'.'.<MIII.(IIMI.
  'Till- luniiiy <- In-hiv '"I'M for rtiiiilnsenclts for cujninllincnts nlrr.tilf made. Xo new
lon:i- Kill I- ii..nlr

                                .-If/in/;/ (fixral l!>aS innl /i>5.9)
         or ••iiiiniiillud :
     •Inly 1. 1'.CiT, to Mcc. :t\, l!i.">7. .?i:M,017.(X)0.
     .hiii i. v.cis, to .iiuit>::o. i!ir.s. $!)r..ssi,(HHi.
     July 1. ISCis. to Uw. :{1, T.i.">S, ^Ci.OS't.OOO.

                             /'fin/in//   >i/f/i?iVfi/iV>n«,   Ore. SI,   Ifi'iti
                                is issued         ---------------------------------- §2.'{, G70, 000
A])|iiit-;iii(iiis lifinjr |iroi-(>.<.sod ____________________________________ 2ft. liis. 000

        Ti.I.-iI.                                                                       r>2.!M)7 r OQO

  A> indicated by the above table, there is a backlog of college hous-
ing loan applications aggregating some $5:2.0 million. It, is believed
that many colleges are withholding applications and, in fact., are dis-
couraged from ^ubmit I ing applicat ions because funds for tho program
arc nmv exhausted. TnWs additional-authorization is provided, no
loan* r:m !«• made, and (he urgent need for housing al colleges \ \ i i l
remain unmet.
                                                                •11


                                                     fci'JS
42                        HOUSING ACT OF 1959

               l.OAX FOK GKXKKAI. EDUCATIONAL P'JKI-OSKS

     Section 502 adds new sections 105 and luG to (itlc IV of the Housing
 Act of 1050 (college housing) to authorise ilic Administrator to make
 direct I >:ms to or to guarantee loans of educational institutions for
 the '•oust met ion of new, or the rehabilitation of existing, classrooms,
 laboratories, and related facilities (including initial equipment, ma-
chii.m. and utilities) necctsan or appropriate for the instruction of
 students or the, administration of the institution.
     Tli« term "educational institution" is defined ^6 any educational
 institution offering at le.i.-f a - year program acceptable for full credit
 for a baccalaureate degree, whether such an institution Ije either
 |.nb]ic or private so long as no part uf the net earnings of an institu-
 tion inuses to the benefit of -my private shareholder or individual.
Educational institution.-- are eligible for loans under the new iprograin
if 'lie institution has already entered into a contract for the work
• nntomplated by the loan. However, institutions are not eligible if
the work was commenced prior to the effective date of this bill or w:is
completed prior to tiie filing of an application under the new
provision.
    The new prograu would "be administered b\ the Housing and Homo
Fin.ince Agencj. w i t h the full consultation of the Office of Education
of the Department of Health. Education, and Welfare. The com-
mittee recoirni/es the fact that the Ollicc of Education is the agency
lir.-t tmalilii-d to tli-al \ \ i t h educational aspects of thu college housing
progr.tm and -.\L-hcs to j'laki- ile.ir that it expc.-ts full and coniplcto
i-oopiration between the IITLFA a«id the Oflice of Education. A loan
or iruaraniy undL-r the neu programs should IK? appro\cd only after
coiii urn-nee bj Hie appropi iale ofiioial of the Department o£ Health,
 Education. aiuHVe^ fare.
    This .ieition \\ould make axailable $125 million for the new direct
 !ii.in program. Sinh loans \\oiild bear the .-aine interest rale as other
• •olK-gi- lioii-ing loans, i-uneiitly '2~/^ percent per annum, and would
he made for a terni-nollo exceed JiOycaiv:.
    This M-I lion would al.-o cslablisli a $125 million revolving fund for
gii.iranficm<; loans. The loan« guaranteed by the Administrator
would Ic limited to those Leafing the s;.me rale of interest as other
   ollege finii.Miig loads and coiiKl noi bo guaranteed if the tcniLof the
 loan exceeded at) years.
    These new program-, art*-justified li\ a clear and present, need to pro-
 \ide :ud to institution.* of higher learning, decent internalionnl de-
 velopments l i a x c demonstrated ihe i.ecessil.y for impro\ed facilities
at our colleges and universities. It is estimated by the American
 Coiniril on I'.il.i. .ilinii that during ihe next JO \eais the enrollment, in
our i-olleires and HiiiuTsiiii-a w i l l be incrs>ased from aljout 3 million to
fi million. By 10<V3. an e.siimated $1$ billion will IH> required to pro-
vide .idci]ii,ite fa* dilies io take rare of the im fea.-eil enrollnient. The
 response of ])i;utically all of the college officials appearing before the
coininitleo indii .ites an acti\e desire on Hie part of higher ednoationnl
i n s t i t u f i o n s to impioM* and enlarge their facilities, and io meet the
demands t h a t :iiv l>ciu^ pl.n-cd upon the instilutionsby o\cr-incrcn,siiig
 enrollment.
    Section ."iO-2 also makes the prevailing wage, hcnle. of the Davis-
 Bacon Act applicable to li.o college housing programs.
                      HOUSING ACT OF 1959                         43

  It was brought to the attention of the committee that the prevail-
ing wage scale as determined by the Secretary of Labor is being
applied administratively to the existing college housing program.
The purpose of this section is to clarify any doubt that mayanse as
to whether the prevailing wage standard should b^ applied to all
the college housing programs covered by title IV of the Housing
Act; as amended, ana as f either amended by this bill.
                 TITLE VI—AlttCED SERVICES J lOUSLN'G
                       KXTKXSIOX OK I'KOfil.'.Ut TO JUNE 30. 10CO

   .Section 15"! (a) would extend the title VJCII armed services housing
mortgage in c iirani-e program (Oapehart housing) until June 30, 19GU-
The aggregate amount of all loans. ins *ml tinder tliisi.xlion of the
 National Housing Act cannot exceed $2.-, U million. The average
cci<t per unit of housing constructed pursuant to the program cannot
exceed $16.500. If the average it. applied against the total authoriza-
tion. "lightly o.-er 13$,000 I.oMsii>«: units « oiild bc_prodiiced- under the
" - u n l aiitlrorit-y.
  'On January lii. lflf>0. the Office of (he Secretary of Defense had ap-
proved a total of 23-1 projects containing 91,307 units for development-
under this program :
                       Military Imuximj jiroyrtiiH xlnlu.i (•Inn. 15,

                                                  To al                 Army           ;   Xavy            Air Kortr

Api>n>v*i| liy ASD rl". .t l.i...                ai.3.T      >Ztl>      27.H7S iWi         11.. IIS (31)   a<ci:(m>
    «
    In profrv*,...          .               '
                                            i     .«
                                                 15,2 :.      <ISii      3.r.lfl   (I7i    3.2W (II)        <5.X» (31)
    A»lv«rtix>i.          -                 j     -l.iV. 7    (Ini       I.lnl      Illl   I.1IS I3i        •AliiS (3)
    HMiIrraccriiteil                               I.I 'i       sl'.l      SI2      I3>        O               177 (3)
    t'niler contract '                      1    TH.II '••   (I7UI      51.513     (711    B.J74 (II)      ^I.a.V>- (Si)

  ' In:3n-I^ 17.7i>'. (.Ml !ini> in r»irnj»Vl^ 1 jirtijccl >, Army, p.iaii.Tli. Navy. !>iii3i: Atf \>arf. ~.ff>l <ll).
  N'orr — ViimluT uf |T.>j-s I- -huwii in |iurn'lir>r<i. sum t>f nnml«T- .n v.irimis >)asr» ro.ij nM ctjiial niim-
Ixrs approve! ,lur 10 cu>nl>ln .11.. n ..n I liuTrniriit.-iiinii <>f

   The committee is aware of the many dinicultics the Department of
Defence, a6; well as the varion> services, c.\jH.'rie]iccd in attempting to
got rim program underway. Jn addition, the commit tee realize.- (hat.
the planning, the advertising of con(racl>, the linal acceptance of a
contrarlor, and many other admini.strati\e. and reguhitory mallcis
nil are lime consuming nece.-ssary jireremiihitiih \\liinh cause delays in
ohtaining this vital housing.
   Tn view of the progress made, and in order to insure a- successful
completion of this needed housing program, t.he cominiltcu Iwlieves
it host to extend (he program aM.he present time for I year, until
Jimp :iO. IftfiO.
   Section < ; < H ( I > ) would increase from 25 years to I!fl years the maxi-
imn; msitnrity of secliou SOS mortgages. Pursuant to (lie Emergency
Housing Act,' Public Law R.Vofil, approved April 1, ID.">8, the maxi-
mum statutory interest rale on section S0:j mortgages was increased
from I percent to \\ '., ])ercenl. At tho pivsent time, (he Commissioner
of Hie FIFA has established a •P/.'|-i)Oiieen( interest rale on llie.se mort-
gagi"*. Paymenl of principal, intere.sf , and oilier obligations on Cape-
harl hoii«ing arc limited to an average of £00 per month oce sec. -105
of the- Housing Amendments oflO."i, Public Law ftl.l, S-Uh Cong., ap-
          •II
                                SIXO ACT OF 1059                                 ~4o

           Auirust 11. IH.V.). -Section ]<>7 of the bill would increase the
inaxiiiniin statutory interest rate on section jjii:j mortiraires from •!'{>
to i» percent. with authority forlJie Commissioner to increase the rate
to fii;, pen-fill. If the provisions of this bill result in still higher
interest rates on future projects. the Department of Defense has indi-
cated that it will IH.>I be possible to :unort;-/e housing approaching the
£li;.*iiHi per unit average cost limit.-uion within the *:>" per month
average payment Jiinitatinn miles.-. siich amort i/at ion is spread over
a greater nuinlx-r of ye:irs. Thei-efore. in order io provide some
llexibility in nieetinjr the hiirher :noiillily payments re«[iiircd by the
new inteivsi rates, the coinmitiee l)elieve.< it i> nivesairy to inoivasc
the iiiu.\i)iiun> inaliirity to:<tiyr:ir~.
                          XHNIIWEI.I.IXG F.WII.ITIK.S
     Si-i-tioii (H»I(c) of the bill would clarify the authority in existing
 laxv to permit the FI1A Commissioner to include, as a part of the
 jiinri'raue serurity. surh nondwellinjr faeilitie.s as he deems adequate
 m-servy wvnpanls of ai-nied servires hoiisinir units.
     It lias Lei-n brought to tlie attention of the committee ihai some
'military housinir pr«joi-t> are ron.-triiried at remote phu-es, or at lora-
 ti«ui* whirl; ;uv ivnti le fromthrccnterof permanent militar\ establish-
 inenis. where fadlilies do iot exist for children's activities. In suHi                }
 r.'i.-vs. no nondwt'liin.ir fa dires exist for ariivimvs siu-b as scoist meet-         i
 in;r>, PTA •fiinr:inn.x, conmnnify elnb mi'clMi^s. and orhcv :jctivii5e~              {
 essential to a well balance 1 social pro.ijfiiiia for yonnij people'.                 <
      In addiiioir. present !a\\ i> nnrlear a> to wheiher maii'ienaiicc and            ]
 adiiiini-iraiion liiiihlin<.'S. as well as protection fnciiides (such ns
  feiici-s. ^iiardhoii-'e. etc.). inay b.e included in such mortgages. Al-
 tlioii^li this se.%iion yivi>s the I-'HA ( 'onnnissioijer the discretion Io
 deicri'iine which nondiyellini: facilities are adequate Io serve the
 occupant.*.' need*, this scciicn would prohibit (he Commissioner fr-nn
 including school liuildings or classroom facililies withinJhp delini-
 lioiidf a iioiidwellingsinu.uire.
     This Mviitin of I he bill « on Id clarify lhe-Commi>sioiier"s :iulhoriry
 in regard Io includingxich noiid^elling facilitiesa>a p:u'l of the inori-
 gaire :M-curity in scciion s<i:; mortg.ige.-. The commit tee contemplates;
 thai ihecn-'i of such iiomlwelling facilities would be held to an average
 of about SL'OII per hoii>ing unit u i i h i n the e.\i-<iing sn;,riiiii.statutory
 •viling«if miliiarv honsin<r
v\\.\ v\\\:\\\\-\( ox wiu:i:i:v inn sixc .\'c<.irii:i:i) nv TIIK si:ci:irr.\KY
                                   i»i:n:.\sr.
           l i i ) l ( d ) would give the Fll.\ ('(uimiissioiier authority to
reduce (he insurance premium below one-half of 1 pcrccni per annum
mi AVherry hoiisinir projects acquired by the Hecrelary of Defense.
thus providing the Commissioner \ \ i i h the >ame aulhority as pro-
vided in exi-iing law with respect io ])rojecis linanced under ihc pro-
^nillienacleil in 1 '.I'M.
   The military Imii-ing'Matiilc- provide that, in cases where (he FIIA
Coiumissioiier -loo not concur in (he miliiary housing ncciN a> cerli-
lied by (he Secretary of Defen-e. ihe Commi-«-ioncr may re(|iiire (lie
 46                      HOUSING ACT OF 1959

 Secretary to guarantee the FJTA against loss with respect to the
 mortgages co\ ering the housing constructed. Since, in most instances,
 the Cuii.iiiisbioiicr requires a full ami complete guarantee against
 loss from the Secretary, the Commissioner reduces the insurance
 picmiiim on such mortgages from one half of 1 percent to one-fourth
 of 1 percent because the FIIA liability has been reduced.
    Present law pro\ ides that the Commissioner may ask for the same
 guarantee by the Secretary of Defense on AVherry housing which is
 acquired by the Secretary. Under such circumstances, the FIIA lia-
 bility is minced and the bill would ]>ermit the Commissioner to reduce
 the insurance premium on Wherry housing j)rojecis which have been
 acquired by the Secret ary.
                     .'s=!x«: KOI: i>KHKXSK-iMr.\cTKi> AKKAS
      Section (>02 would add a new section SlO to title VHT of the Na-
  tional Housing Act. This new section would authorixe the FIIA
  Commissioner to insure loans on single family housing and multi-
  family housing-(not to exceed 3,000 units) at or near military installa-
  tions if the Secretary of Defence certifies (1) that the housing covered
  by siirh mortgage is necessary in the interest of national defense to
  house military personnel or essential chilian employees of the armed
  sen ires or contractor thereof; (2) that there is i i present intent to
  curtail the number of such personnel assigned to the installations;
   l"«) that adequate housing io not available at reasonable rcn'als within
  u-a.-oiiiibie commuting distance of the installations: and (I) thai such
  mortgaged property will not curtail occup-jncy in any housing existing
  in the \ icinity of the installation, if such housing is covered by mort-
  gages insured under other provisions of the National lie-using Act.
  Such certification shall be e\ idencc of tint need for housing. In addi-
  tion, the new section would waive tho requirement that such hoiuinir
 be-economical I \ s< ..ml. for FIIA undi'.rwiitti.ig purposes: ;ind wouUl
  allow ihc Commisoioner of the FITA to require the Secretary of
  iJefviisi: to guarantee the FJIA r.gain.-t loss,if the Commissioner does
  not feel thausuch housing is an acceptable risk.
     Priority in the sale or rentalrof proper!ies covered by this section
  would be given to military personnel and to'essential civilian em-
  ployees of the armed sci\ices or contractors thereof. All properties
 Covered by .1 mortgage insured hcieunder must be held for rental pur
  poses for a period of not less than 5 years after flic project is made
 a\ailablc for initial occupancy, or until the Secretary of Defense re-
 leases the projects or dwellings from such rental condition.
     E.Ncupl as to the conditions descrilied above, the provisions of the
 regular FIIA sales housing program (sec. '20:5) and of the regular
 FIIA rental housing program (sec. 207) would be adopted in the new
 .-citioii and will determine eligibility for mortgage insurance.
     The committee has l>cen advised that, despite the regular housing
 programs of the FIIA, there are still many localities which au adja-
 cent in military installation where the need for adequate housing has
-not and is not be-ini' mei. This is particularly true in cases wncrc,
 beian.-e of strategic \aluu, the military installation is located in an
 area remote from communities where adequate housing is available.
 The. FlfA hesitates, to insure loans on housing the need for which has

                                         »t i * -f
                                         -~ -L -. !
                        HOUSING ACT OF 1859                           47

arisen principally because of activities of the Armed Forces. In
FHA's opinion, such housing is in excess of the housing needed for
normal growth of a community and therefore such housing does not
meet the test of economic soundness. This new program, therefore, is
nn attempt to provide needed housing in >oca!Uies where housing is
otherwise unavailable at present.
    This new section would also amend the appropriate sections of exist-
ing law in order to make the requirements of cost certification and
r'ip Davis-Bacon Act applicable, except that cost certification would
not be applied to sales housing built under this section. It also
amend? section 305(f) of the National Housing Act in order to make
section sjo mortgages eligible for purchase b\ the FXMA under its
special assistance functions.
              .ACQUISITION" OK KENTAIj HOUSING PKOJECTS

    Action 603 would amend section 404 of the Housing Amendments
of 1955 to permit the Secretary of Defense to acquire section 207
rental housing projects (FILV insured), if completed prior to July J,
1052, and if such projects were certified by the Department as neccs-
«5siry for military family housing purposes. This section would also
make acquisition of FJLV septiin 207 projects mandatory if housing
constmctioK-pursuant to section SO:) of title VIH (Capehart housing)
is built in the area of the section 207 project^ covered by this section.
   The committee's attention has been called to a situation which does
pot, appear to be equitable and which docs not appear to be in the best
interest of protecting t'^c Federal Government ngainst the liability
•which might occur through an insurance claim against the FILV. The
fans which have l>oeii presented to the committee in connection with
fhis matter are briefly as follows: In early 1950 upon inquiry and in-
terest evidenced by the Air Force, a 300-unit FIFA section ^07 rental
housing project was planned adjacent to an Air Force base. These
plans were brought to a point where the spo ors of the project were
ready to obtain a commitment from the FIFA under section 207. Just
prior to application for the commitment, a Presidential order imposed
a reduction of 5 percent in the amount of the FJTTA commitments
unless such projects were designated by the Secretary of Defense as
l>oing a "military necessitjv' subsequently, a letter was issued by the
Department of Defense to the FIIA in which the subject project was
declared to be a military housing necessity. Consequently, an FILV
section 207 commitment was issued to the sponsors of the subject
project,
   t'lider existing law, it is mandatory that the Department of De-
frnsc acquire "Wherry housing projects at or near military installa-
tions where title VIII (Capehart) housing is constructed. The law,
however, does not provide for permissive or mandatory acquisition
of other housing which was constructed on the basis of certifications
from the Departemnt of Defense that such housing was military
housingand was-needcd in the interest-of national defense.
   The- Department of Defense has scheduled 200 Capehart he using
units at the military base adjacent to the area where this FIFA section
207 project is located. Tho owners claim that flic Capehart project
will provide unfair competition and that occupancy of the section -Jo7
project will l» severely curtailed.
48                         HOUSING ACT OK 1959

   SIIKV tliia pioject \\a» oii<iinall\ roiiftrinUcd »n the bn/u. • «£ being
"militarx hou=.in«r." ami i-an^U" iiM-d a.-. MU h. it i.- in the be>i interest
of the 6o\ernnient for the Itep.-.'rtmeni of Dcfeiis-e to a-vtiiv the
project.
   Jtqjii'fOiitatiite uf the Dcpatliiiuiit of lA-fciun i|iii!a>tiuiiLif uliutaer
the anuaiv-fwt area of tin- iiiiiti> in tlii* prixntv projivt uuiilil meet
the iiiiiiiiiiiuii .-pace ixiiiiireiiiunt±> pnci-ril/wl for inilit.u\ liuii^ing. _In
this, connictioi.. fecl^on JiU ( b) of tlic act. cut it led "An act to authorize
certain coi^tru>:tion at miliiarv iii^tallatiuii? and for other purposes,"
Puhlii- Law jj.V:lil, approved ( August :$i». lIl.'iT). exempts "\Vlierry
IIOIIMII^ acqninid b\ the Department of Dcfeiu- from Vms: tle«1ared
"oubstanil.iriVaolulj InicaiifC i-in h housing doe» ni»t luec't tin, iiiiniiuum
bpaee requirement^ pre» ribed for militan housing. Since it apiMraiii
to {hi- committee, that the >:ase described herein i> ai;aloirou»to^VlieiTy
hoitein<:- thU section of tlie comn/titee bill also applies, acctioii iOl(b)
of Public Law 85 211 to the FJLV 207 project* co- ered by thi» i-ection
in i-rder to prevent such housing from ln;iiig deil uvd "snb>t;indard.''
                TITLE VH—MISCELLANEOUS
              l-EDKRAI, NATIONAL MOKTBACK ASSOCIATJOX

   Section 701 (a) of flic bill would increase the limit on the r.mount
of a loan which can be purchased by FXALV under its secondary
market operations from $15,000 to $20.000 for each dwelling unit
covered by fhe nu rtgaae. The §15,000 limit would remain applicable
to loans purchased under the special assistance function. As under
present law, no dollar limit would apply to military housing mort-
gages insured under section 803 of the National Housing Act- or to
mortgages covering property located in Alaska, Guam, or Hawaii.
   This change is necessitated by the progressive increases in housing
costs which jiave taken place in recent years. As re]>ortccl by the
Bureau of Labor Statistics the median sales price has risen from
$12.300 in 105A to $13,700 in WMS and to $14,500 in 1056. Jb or 1957,
the estimated median sales price was $15,100. Although the Bureau
doe? not have figures to show the median sales price of housing for
195S. evidence presented to the committee reflects that there was a
leveling off during the year at about the 1037 median sales price. In
the ca<v of lar«er families purchasing houses suitable for their needs,
cost levels would of course be considerably higher. In addition, this
section would help to meet the special problems faced by purchasers
living in higher cost areas. By increasing the maximmn'loan limit to
$20,000. the FXMA will serve"the. needs of families who buy median
priced housing, particularly if that housing serves larger families or
is located in high-cost areas.
   VITA SUCTION- 220 MAXIMUM: MOKTC.UIKS I-UICCIMSAIH.K KY F.VMA
   Section 701 (a) also would incrcasi lie FIFA section 220 maximum
innrrgagp amount for multi family housing purchasable by FXMA
through its special assistance function from $1,1,000 to the ceiling for
such mortgages established by FITA.
   Under existing |aw, FXMA is limited in its purchase of mortgages
through its special assistance category to an average per unit figure of
$15,000. No allowance is permitted tor the cost of nondwelling facili-
ties such as garages or coimucicial areas. Under FI1A, however, the
maximum mortgage for a section 220 loan is a much higher figure
and includes the cost, of uomhvolling facilities. For example, under
f.ho proposed bill an Fll.V section 220 mortgage may have a coiling
as high a' $3,700 a room in high-cosl. areas. Jf (he room size aver-
ages five, tho FTTA coiling wouUl l>oSlS,f>00 plus tha cost of nomlwcll-
inir facilities.
   Testimony received from huildp.iv; of section 220 housing claim that
the dilTorential coiling is unfai'-nud has been responsible for the lack
of activity in this lypo of const ruction.
                                                                 •10
50                      HOUSECC ACT OF 1959

  The committee believes that housing in urban renewal areas must
be encouraged or \\e may find that the entire concept of urban renewal
will be a failure. The committee therefore recommends that the ceil-
ing for FNMA be revised upward to bft identical with the FITA. ceil-
ing for such housing.
      VAK PURCHASE UXDEl: KXMA SL'KGTAI, AsSISTAXCR KCNCTIOXS

    Section 701(b) would amend section 303(b) of the National llou.~
 ing Act in order to restore for 1 year, until August 7, I960, the re-
 quirement that the FXMA purchase mortgages at par under its sj*-
 cial assistance functions. The Housing Act of 195G established for 1
 year a minimum purchase price of OO^percent of par for mortgages
 purchased under the social assistance functions. The Housing Act
 of 1057 required that social assistance- mortgages be purchased a. par
 and, in addition, limited the fees and charges which may be made by
 the FXALV to li« percent of the face amount of the mortgage. The
 "par.purchase" rcquireincntexpircd on August 7,10.1S.
   The charter of the FN^LV states that one of the principal functions
•of the association is to provide special assistance fur the financing of
 selected types of home mortgages which could not otherwise be pro-
 duced to the extent du&irable in (he national interest. There are two
 separate categories of this program, one under an allocution authority
 of the President and the other under the i.-ategories specified by the
 Congress.
   Under special assistance programs authorized by the President, the
 most active is. for urban renewal housing (FJTA sees. 220 and 231).
 Activity in thi.- program amounted to a total of $250.7 million up-to
 the end" of Dii ember lOfjS, of \\hich $r>0.0 million was disbursed for
 purchase of loans representing about 5,400 units. The remainder of
 thu $20S.ti million represents commitments issued on sections 220 and
221 mortgages. Other programs which are designated by the Presi
 dent for sptx.al assistance are (I) housing intended primarily for
 victims of major disasters, (2) housing in Guam, (3) housing 51
Alaska, (1) housing in connection with defense and military pit -
 grams, and (5) housing for elderly pnrsons.
   Tnder existing law, the Congress lias designated mortgages snor-
 ing FIIA section SOS (armed sen ices housing), sect ion SOO (housing
 for essential civilian employees at specified installations), and FIFA
section 213 (cooperative ho.isin<;) -for special assistance. The tahl<>
 below rellectft the .status of the FN^fA spi-cial assistance, fund :




                                        \ ^ <
                                       J. — • J
                                   HOUSING ACT OF 1950                                      51
            St<iii.s O/ *.\        »Pf«f?rt auutance /und {a* of Dec. SI, 105S)
                                       [In mlllloa* of dollars)
                                                                       Coramillct!    Baliiux*
                                                          authorl-         or        ivmlbbk
                                                           zalloa

Dc-hmolct! by ITrflifcal:
                                                              JIO.O           jar           19.3
                                                                7.5            .1            7.-I
   I'rton renewal-                                            4010           2».7          140.3
   ALisJca                                                     3X0            IIS           4.2
                                                               II. 1          11.1        None
                                                               70.0           K.S          41S
                                                                4.0            Z3           1.7
    Total                                                     K2.C j         3IG.2
   WithhcM by nuifeel Ilurou.
     Total authorizf!........                                 9M.OJ-


                                                                M.O           116
                                                               IM.O          115.9               .1
   . f ts«*I Mrvlccs:
   •^' - Srt. i03...._...___....                              441.3                         17.:
                                                               iS.7           1S.S          39.9
    Low ^nJ m<xltra!e cost bousln;                           i.ooaii       I.OOXO          N'one
         Total                                               1,7010        J.GO&4           93.6


   ^Vs indic;itc<l above, the most active programs of recent months
under the FXMA special assistance function are mortgages created
by urban renewal activity. Tho FIIA programs connected with
urban renewal only come into use during the latter stages of the
urban renewal process. As more and more urban renewal programs
advance to the latter stages, these programs will become more and
more active.
   The committee believes that the objective of the FNMA special as-
sistance functions would not be achieved and would not be of substan-
tial Iwnefit to the successful accomplishment of urban renewal activ-
ities, as well as other vital housing programs, if FNALA. were per-
mitted to establish prices substantially below par to purchase such
loans.
                             TKA.VSKEIt OK MORTGAGES TO KX3fA

   Section 701 (c) of the bill would permit, the Federal National
Mortgage- Association to assume the ownership, sen-icing, and sale
of certain mortgages and other obligations acquired or to be acquirer*
by the Public Housing Administration in connection with the liquida-
tion of various Government housing programs. The bulk of such
mortgages now in the portfolio of the PITA resulted from the sale
of Lanham Act projects that were constructed to provide housing for
persons engaged in World War II national defense activities.
   With respect to any mortgages acquired by the FNAfA under this
section, the FNMA would assume only those duties and functions
which arise under (ho FN1UA Charter Act or the mortgage instru-
ments themselves. Tims, the PITA would retain all remaining func-
tions under the Lanham Act respecting the liquidation of properties
securing the mortgages to bo transferred to FNMA. For example,
the PITA would complete pending land-condemnation proceedings;
handle complaints aim inquiries and assist the Department, of Justice
in handling litigations relating to (.lie development and sale of tho
52                        HOUSING ACT OF 1959

housing project*.; and carry out other liquidating responsibilities
arising from the former Federal ownership of the properties rathor
than f roia the mortgage instalments.
   The committee feels that it it. more practical to transfer the mort-
gages to FXiEA, which has nationwide mortgage servicing facilities
already established, than to attempt to maintain comparable facil-
ities in PITA. This section would alsp permit such transfers by other
Housing Agency constituent^ in similar circumstances if the need
arises.
                  ATCIHOIMTY TO i.fVKST KXCKSS KCXH5

   Section 701 (d) would amend FN^LV's corporate charier to permit
some increased latitude in the investment of funds that, from time to
time, may temporarily be in excess of current operating needs. In-
vest meiita arc >\\ restricted 'o Gopcrmnent and Government-guaran-
teed obligations, with respea to which the investment yield may often
bo wholly Inadequate to offset to any appreciable degree such cost to
ITXALY. of its borrowed ope.-ating funds.
   'J'his section would authori/.e FXMA to invest "in obligations of
the United States or guaranteed thereby, or in Federal Intermediate
Credit Bank debentures, Federal Home Loan Bank notes, Federal
Land Bank bonds, and Banks for Cooperatives delxMitnres." The
iminediatc purpu.-e of the proposal is to qualify for temporary invest-
ment by FXiLA in the so-called Fcderal-aircncy obligations. Thei*
obligations earn very high investment latings- -second only to U.S.
f!i>\ eminent obligation*. Although these obligations enjoy a high de-
gree of marketability. FXMA would generally aci|i!irc only obliga-
tions having an early maturity conforming with the time when the
funds will Ije needed for mortgage purchasing or other corporate
operating requirement.^ These Types of obligations Usually a (lord a
higher return than Government sconritie.s of Comparable term.
   The committee feels that by permit ting the FXXLY to invest ex-
cess funds in obligations de»crilicd by this section, it will offset the
cost to the FX^fA of operating funds borrowed from private sources
from time to time.
                         •FMOX IIOUSFN'O nESKAHCir

   Section 702(a) would extend the farm housing research program
for a period of 3 years, beginning July 1, 10,'fl, and ending June :!0,
1002. and would a u t h o i i / e a n annual appropriation of $7."»,6flO for the
program.
   The. object i\r of this program 5.-^ to improve farm housing condi-
tions by dfU-loping d.ita and information which will help farmers ob-
tain better housing at lower costs. The research program authori/.od
under this M-clion is to be carried out by land grant colleges
under terms, conditions and standards specified by the ITIIFA
Administrator.
   For li.-cal 10,'iS, S7.">.00u was appropriated for the program. The
rewaivh autlmri/.i'd to date is being t.arricd on by (he Alabama Poly-
tei.hnic Institute, the Uni\ei i sily'of Afissouri, 'and Colorado Slate
University.
   The original authorization granted in the Housing Act. of 1057
will expire at the end of li.-cal Ift.'O. The committee feels that this

                                             _L_
                        HOUSING ACT OF 1959                             53

additional authorization and Hie extension of time is necessary to
carry out tin's vital research program.
                             FOR MIGRANT WORKERS

                 b expresses
   Section 702 (b) exresses the desire of the committee that in under-
      tion
 aking
takin any future s'udy or research progniin, the IIIIFA Adminis-
trator" is to include '.he subject of the housing of migratory, workers
in order to determine the character and extent of their housing needs.
                 SCKVEY OK 1-nitUC WORKS I'UxXXIXG

  Section 7o3 would amend sec-lion 7<»:> of (he Housing Act of
to permit the Administrator of ilic HHFA to use $50.000 of funds
authorized for the program of :id\ancca for the planning of public
works for the purpose of obtaining information on the current status
of State and local public works planning and requirements for .such
public works. A survey of the status and volume of advance public
works planning was undertaken pursuant to authority granted in the
Housing Act of Ifl5k However, that siiney i> now obsolete- and no
authority exists for additional surveys to be wide.
  Pursuant to section 702 of the Housing Act of 195J, the JTTIFA Ad-
ministrator is now carrying out a program of advances for the plan-
ning of public work?. This program permits the Administrator to
make advances to State;?, through agenue» and political subdivisions,
for the planning of public works (other than housing) which conform
to an overall Slaie_. local, or regional plan approved by a competent
State, local, or regional authority. When this section was enacted in
1051, a revolving fund of $10 million was authorized for the operation
of the progniin.
  Tr is contemplated that the information, authorized to be obtained,
will be compiled through represents ive sampling surveys of (lie more
than 100,000 Slate and local government.-. The committee believes
that this would determine the current status and volume of plans for
public works and the estimated long-range requirements for public
works. This data, not now available, would provide the means for
mcnsuring the volume, type, and location of State and local public
works plans. It would also increase the extent to which such govern-
ments are meeting or planning to meet the steadily expanding require-
ments for public facilities.
                        v.\-sriT.i:visi:i> I.KXDKIES
   Section 7 0 f ( a ) would amend section ."iililfb) of the- Servicemen's
la-adjustment Act of 1SM-I to permit the VA to expand the existing
ela.-s of "supervised lenders" to include a new category of lenders
which make mortgage loans but which arc not classed as supervised
lenders and therefore must gel prior approval from the VA before
tho loan can he made. Supervi.-i-d lender.- arc prc.-cn: ly de>crihed by
the s t a t u t e as "Federal land banks, national banks, State banks, pri-
vate banks, building and loan associations, iiiMirance companies,
credit unions, or mortgage and loan companies ,Mibjc<-l to examina-
tion and supervision by an agency of the Tinted Slates, or of any
Slato or Territory." The new calegon of ".supervised lenders" would
-54                      HOUSING ACT 0* 1959

beany FJIA approved mortgagee, designated by theFJIAaaa'Vurti-
Jicil agent" ami acceptable to the Administrator of Veterans" Affairs.
   "Certified agent" i» a relatively new FIT A designation and relates
to mortgagees, which are approved by (he FIIA to operate under the
certified ageiicv program. Since I'.tvy must exercise discretion, they
are examined thoroughly by the FIIA before being .-o designated.
Jf. in addition to this speckil appro\al by tlie FIIA. They are : »IM> ap-
proved b\ the Veterans' Administration, the committee fecit, that it
would be proper (o permit them (o make VA-giiarantced loans, under
coiulii ions prescribed by (he Veterans" Administ ration.
                           V.\ IXTKIJKST   K.VTKS

      Section T01(b) of the bill would increase the statutory 5:ri ;est r.iie
 ceiling on VA-guarantcud and YA direct home loan mortg.iyi-s from
 F,.'t percent to .">i.j percent. In addition, this section \\ould repeal
 tlii! provision contained in existing law providing that the VA inter-
 est .rate shall be at least one half of I percent below the going rate as
 established b\ the FIIA Commissioner on FIIA section J()3(l>) Miles
 housing.
      Testimony pre -^nted to (.be committee by (he Veteniiis* Admiiiialra-
tion revealed that Hu- home loan guarantee program started to decline
 in (lie latter part of Jfl.'it; and hail i-cached a record low level by (he
eml of lO.'.T. For example, the number of appraisal rcijncbtb \\hic.h
 aro (ho most sen-'.live i'idicator of loan guarantee, ac.tivii.y had
 dmpped from a monthly average of more than 81,000 in 1!).V» to only
 ."..(mil in December 1 !).r>7.'
      Ib-wever, (he enactment of (ho lO.'iS emei-gency housing legislation.
Puhlic Law S."> 3G5, ;i]j])rovcd April 1, JO.">S, revived the program.
 This act permitted an increase in the OT interest rate from H;. per-
 cent to I:l.i pcri-cnt, removed (he ni;iiulator\ control of discounts on
 f»T loans in (he semndary market, and gave, authority to (he Federal
 National Mori gage Assoi-ialion to purchase VA guaranteed or PITA-
 inMircd mortgages of up to §J3,."»00 under its .special assistance pro-
gnim. These, together with the removal by VA of the rcguklory
'2 piT<-cii( ininiminn downp.iymenl recinircnient, combined tosLimulatc
 activity in GT loans.
     JV\ Julj of l^r»S, appraisal requests had increased (o 43,100, of which
S^.-'OO were on proposed homes and 11,000 were on existing liouses.
Ni-u dwelling u n i t * s(ar|cd under VA iiiapcuiion, which had averaged
  ibo.il_n3,OnO per month in 105,". and accounted for nearly ^0 percent of
 all lion farm private dwelling units started in thef nifcd Stales during
that \ear, dwindled to a low monthly average of 3,300 during the 3
months pivmling the enactment of the lO.'iS uineigency hoUMUg legis-
lation, and nrco.mted for less Ih.in ri percent of the TT.S. toUnl starts
tltiriiigthi.-quarlei. JToxvever, during the third quarter of 1058, units
ntarlrd w i f h VA-iiisipcctioii had risen lo a monthly average of 12,700
and accounted for about 11 \» percent, of the F.S. total starts.
      IK mid September of 1058, Jhp. $1 billion FXMA special ashislnnco
 fuml for pur«ha ing F1TA and A T A morlgagi's had been committed.
     At about this time al.so (hero wa,-> a reversal in the (rend of avail-
ability of mortgage funds which caused ihe GT loan (o be oven less
               io investors. Thi.s resulted from the incicaswl yield obtain-
                             HOUSING ACT OF 1959                                    OO

able on other mortgages and other competitive types of capital
investment.
    Consequent 1}-, the supply of mortgage money for GI loans has con-
 tinued to tighten a ml lias- resulted in a marked decline of GI loan
activity in recent months. Appraisal requests which had reached a
peak of 43.U>u in July of IflOS receded to21,lOO in December and dwell-
 ing units started with VA inspection dropped from a 105S monthly
high of 1-J.ftni in October to only a lidle over 9,000 in December. These
dec.renses are considerably in excess of the usual seasonal pattern.
   All indications point to a further decline in GI home loan activity
 in coinii.g month* unless something is done to bring the GI loan into
a more favorable position with competitive types of capital invest-
ments.
   Over the last .several \ears. n.any witnesses, including builders, lend-
ers, mortgage investors, representatives of veterans' organizations, and
official? of the Veteran*-" Administration, as well as veterans them-
selves, have continuously advocated an interest rate for VA home-
loans higher than the statutory rate established by the Congress.
There appears to l>e a preponderance of evidence showing that the
VA guaranty program, \\ith a statutory interest rate ceiling of 4%
percent, has not-met the, housing needs of worthy veterans because the
fixed interest rate does not attract mortgage investment funds. In
addition. In order to offset the low interest rate, the practice of dis-
counts in VA guaranteed mortgages has become so prevalent over the
last several \ears. tha* many builders who are forced to absorb these
diM-onntt- have discontinued their operation under the VA guaranty
program. This has resulted in fewer and fewer homes being made
available to the potential veteran buyer.
   Therefore, in order to rejuvenate the VA guaranty program and to
a^ist- those veterans who need adequate and decent housing, the com-
mittee feels (hat it is necessary to increase tho statutory interest rate
for iho VA home loan program.
                 niSQV.U.IKIC.VTIOX OK .J.KXM-.RS OH IJUIU>Klt>

    Sectioi: 7o-j(o) amends scctiur, .')O-J(c) and section 511 of the- Serv-
icemen's Readjustment Act of Ifll-J. It. anthorixes the Administrator
of Veterans' Affairs to bar builders, and lenders, from participation in
the VA home loan program* if such builders or lenders have been
barred from participating in FIIA programs.
    •Section .112 of the National Housing Act provides, in part, that the
Commissioner of the-FITA may refuse the benefits of the FIIA insur-
ance programs to persons or linns who knowingly or willingly violato
ihe pnn fsions of title ITI of the Servicemen's ^Readjustment. Act of
I'.i-M, or regulations issued thereunder, or who have failed materially
tu i/iirrj out l o i i i i a i t u a l obligations w i t h respect to the completion of
roiiMnifiioii, alteiation. repair, or improvement work financed with
assiMaiu-f under the act. However, there is no reciprocal statutory
pnn i-ioh .iiitliori/ing the Administrator of (he VA to bar from par-
< u-i|Mt urn in i In- VA home, hinu programs those persons who havo lx>on
disqualified under the FIIA. programs.
    The roinnutti-i- feels that iiuieascd cooperation between tho FTTA
an<l VA is most desirable. Tho operations of (ho FITA section 203
M«lr» lioiisin.!.' progiiiin and the VA home loan guaranty program arc
   56                         HOUSING ACT OF         1959

   similar in many re,-pects. The coiiiinutco oclieves, therefore, that :f
   one agency finds good cause to siibl>cnd a builder or len ler, the other
   agency should be authorized to suspend for the same olFense.
                   ADDITIONAL VA U1KKCT LOAN" AUTHORIZATION

        Section 701^1) of the bill would provide an additional $300 million
    for the VA d> «.t home loan program. The VA w uld be authorized
    to lire the,-e funds from the dale o£ cii:>ctnicnt of the Housing Act of
    19.19 until expended, without being limited by the existii.g statutory
    limitations goxenung; quarterly allocations. The purpose of this
    special authorization is to provide Joans for veterans who are pros
    ently on VA waiting lists. These veterans reside in areas where pri-
    vate loan funds are not generally available.
        TTnder existing law, The VA is authorized to make direct loans in
    an amount up to §.1il million per quarter subject to an annual ceiling
    of $1.10 million. As of December 3], 19.1S, there were more than
     1.1,000 veterans eligible for direct loans whose applications could not
    be. processed, because t-.uncut authorizations were exhausted. An esti
    mated additional authorization of $"00 million would IKJ required to
    dispose.of this backlog.
        The upsurge in VA loan activity is due in large measure to pro-
    \isioii% contained in the 19.1S Emergency Housing Act (Public Law
    S.1 3G.1). enacted by Uie Congress on March 19, 1U3S, and approved
    by the. President on" April 1.195S.
        During the first 9 months of the fiscal year 1958, no funds were
    a\ailable for the direct loan program. A.s a result, funds were vir-
    tually exhausted in all direct loan areas when the new- authorization
    became a\ailable on April J. The quarterly allocation for the fourth
    quiiiier of Osc;il A ear 1958. limited by statute to $."50 million, has been
    alloltid to VA field offices and falls far short of meeting the demand
    of veterans who are on wailing li^fs. many of whom have Leon wait-
    ins; for months.
       .Tin', committei- is a ware that, in order to implement (he objv-vthes of
    (he Emergency n«ijis;ng Act of 19.")S, it, was necessary for the. VA to
     re,-ei\e a certain pi-rccntage of the direct loan fund allotniei..s each
    quarter for making commitments to builders. Initially, llj.e. VA rc-
    sened 7,1 percent of the direct loan fund allotment each quarter for
    making commitments to builders, smh reservations pre\ Ailing for 2
    months of eacli (|iiarlor, and at (he. end of such period any ])or(ion
__, remaining being used to i.eet i n d i x i d u a l direct foan applicatioi . In
    January 19ri9, howe\er, the. VA reduced the 7.1 percent reserve for
    commitments to Imildersto iif> percent.
        The i-oiiii'i'ltee bi'lie\es that (lie method adopted by Ihe VA to meet
     the intent of the.TCmcigeiit\ ITousing Acl is satisfactory. TTowe\er,
     in connection w i t h t l i e additional &10D million dii.'d loan amhori/.a
     lion .pmvidfd in (his bill, Ihe committee bi-lie\cs t h a i first priority
     should bivsji\en to s; t( i.>f\ ing the .Mime. 1.1,00(1 indiv 'dual M^lerans who
     havo applied for, or are now on Ihe V.V M a i l i n g lisl for, direct home
    loans. If soin(> porlioi of the additional funds 'vmain after (his
     baikl^g has ln-eii met, this balance could be used i. 'vordaiice. with
     existing regulations.
                        HOUSING ACT OF 1959                              57

   CONSOLIDATION* OF LAXHAM ACT »XD OTHKIt I.OW-RRXT PKOJKCTS

   Section 705 of the bill would permit local housing aiitlioritics to
consolidate Lanham Act and other Iow->-« nt housing projects being
assisted with annual contribution contracts inuler the l".S. Housing
Art of 1949. Under present law, Lanhani Act war housing projects
which have been conveyed to local housing authorities for low-rent
use under <ecf ion GOG of the Lanhain Act cannot be consolidated with
other low-rent projects. The reason for this is thai section GOG re-
quires the return of residual receipts each year to the Government.
While the l~.S Housing Act provides for the retention of the residual
receipts by the local housing authority fur reduction of the Federal
annual contribution payable under thai act, this section of the bill
would remove (hi? restrict ion and permit the commingling of project
funds and the u-e of all residual receipts for reduciion of any Federal
annual contribution under the consolidated contract. Since the Lan-
hani Art prohibits the payment of annual contributions with respect
to any Lanhani AH project-conveyed for low-rent u.se and since all
funds and operations would l>e merged, the amendment to section
liiifi(h) would remove any implication that the payment of annual con-
tribution to an eligible project under the consolidated contract is a
payment witlr respect to the Lanhain Act project.
                     DISPOSAL UK HOUSING     I'KfMECTS

   Section 70G(s;) would amend section GOT of the Lanhain Act to
authorize the IT1IPA Administrator to modify the terms of a sales
contract applicable to a project purchased by a cooperative or other
mutual group, in order to enable the cooperative purchaser to retain
possession of the property. The committee is advised that one co-
operative group is unable to comply with the terms of the sales con-
tract originally entered into with the Public Housing Administration
for the purchase of a Lanhani Act project. 1'nder ordii ary circmn-
"tance.*, such a loan would be in default and the FJLV would lx? com-
pelled to foreclose. The committee does not- Ixilievc that such drastic
action would be necej.-ary, if I he- sales contract could be modified, and
it such action on the part, of the PITA Commissioner would be in iLe
public interest. This seel ion would permit such action.
   Section 7nr»(b) extends for 2 years the period during which mili-
tary personnel and civilian employees of the armed services may con-
tinue to occupy war housing projects in Philadelphia, Pa. Section
'ldG(c) of the'Housing Act of IMfl (Public Law 1020, S-lth Cong.,
approved AugiM 7. ]!».">fi) provided an exception to seel ion Gllfi of (he
Lanhain Act in order to permit military .personnel to continue to
occupy projects 1'A :>G(>I I ami PA -:>GOI2for a period .o/« years, u n t i l
January :51.I!)GI.
   Tlie Minimittop was advised t h a t (lie military personnel and civilian
employees now occupying I heso projects MiII require such quarters and
that unless this date is extended, HIP? » servicemen would Ix- evicted.
Tt was originally anticipated thai oilier arrangement.-* would he made
to house ihese military prrsomip] prior to the expiration of the .1 years.
 However, (he Department of Defense has been unable to provide the
housing needed by these service personnel, and a 2-year extension u n t i l
If'fil is necessary.                                   ' -
58                            HOUSING ACT OF 1959

    Section TOlHc) would permit disposal of the three P\VA low rent
 hoiking project* still remaining in Federal ownership to oilier than :i
local public <igeney. Tlie ejcijting law directs tlie LMFA to soil its
Federal projcii. or ili\e,-t itself »»J 'heir management through leases
":u> toon as i raetieable," but oiilv to a "pub!",, housing agency."
Forty -seven 1*\V.V projects. ha\c been .-old ai.d only three remain.
No .-ale or lease to a local public ageinA i? possible now in the ca.se of
the tuo project.^ located in .Enid and Oklahoma City. Okla., because
there is no enabling State legislation fur low rent public housing,
and iioncsecnis to be in the ofling. Neither has the PIIA been able to
negotiate a tale- or lease, w i t h a local piiblii agency, of the project in
Indianapolis. Jjid.. and. iKi-atise of local oppuMti'in it seem> imlikeh
that llii.^ can Ijc ii<;:ie in the near ftitniv. The committee feels this ac-
tioii i^ neci->j-ar\ in order io enable the PI I A to tell the three projects
uu (lie pi!\ate maiket if the three localities .-till do not ui.--!i to take
sie|i> to obtain S(;:le legi^latiori or :n:iii!ci]iai approval.^ which u.iiilu
make local public ownei'shij) possible.
                               l l l i M K MOKTlJ'iiK «'IJKI>IT I'KUCKAM
                               %
            ii 7<»7 \\oulil e.\li nd the loliiiit.uy Inline nmrtgairc <-iedil pto
IJCi-.nii until .Full 31. lO.'d. I'mlt-r pn-.-em law the proirnun wonhj.
cea.-e (tperaiiun^tiii .Iul\ 31. I'.KM. The \TI.MCP i.«. intended toa.-^ift
liniiii' bin IT- in iilit.iiiiini: residential ninitiraiii 1 loans in small I'om
litinul 'ir> aiul lul.il are:i> uhuiv. moi t if a Hi- inuiii-v i.-. scaice ai"l to a.-sist
iiiiin>rit_\ irrmip-. in ueiu-ial u n l m i i t ivyanl to tbi- >5/.eof the conumini
t'n-sin wliii-l; i hey live.
    Sinrr it w.j.-. e.-tabli.-hnl by the ITuii>in<; Act of I'.'.'d, the program
II.I..IK-IMI .-iiicessfid in ii.*<H.-tiiig the plaii-ment <jf o\er 3."i.l)(.OFJf.V and
VA loans \ \ i t h private lenders. Over lifi pi-rcent of the loan* were
VA <riiaianteeil loans. Some ^3 peiiviil of the total were for hoino.-
 for iiiiiiuiitA group families. Tliese liguio indi< ate that the progiiun
ba.^ Iirt-n lu-lpfn! and jibtif} (he i-oiitimiation of (hi* progi-ani for t In-
next 2 \'ears.

                 PI^IXXINC A'lini.Mrsiiii's .\xn ri:r.i.<i\vsinrs
    Tin1 < oiniiillic ivci-i\od tcst.iiiKinv tli.it the a< hievi-iuuiil of the. lion.-.-
ing goal.-« of the Nation i* .-e\eiv.l\ hampeivd b\ the lack of ((lialilied
pic>fi-~>iiii,.il . it \ plaiiiiiTr. aiid hoiisihg tf.-hniciaiis and specialists.
In nruVr to help >ohe tlii.- pioblem. .-ediun "<»>> of the bill contains a
piotiMiin aiillioii/.ing llic Ifoii.Miig and Home 1'inaiicc Adniiuistratoi
to g i a n t Mlinkiiship.-. aiul fellowships in public and p i i \ a t e nonpiotit
iiistitutioh.^ of highei ediuation fm the graduate t i a i n i n g of proft-.-.
siiih.il i il\ plai.nihg and limiting ti-chnii iaiis and s])L'iia I !.>!.-. IVi>on>
shall bt- .-rlri led foi siii li scliojai'sliip.-. Mih-l\ on tin- has]., of ahiliu.
The bill .uiili'ii i/.c> appniprialioiis of $.*iOi),ni)i) a n n u a l l \ for a -5 \e,-ir
pcrinrl.
                                      OWNKIIS I.IIAX Arr
      I ion ~u!l of (he bill would permit ,--a\ ing> aiul loan associations,
        Hi i omits aie iiiMiml by the I'^edrral ( I i A c i i i. u ,.!, t.» inve.it. not-
to i.vrcd ,". pci i fhl at an\ one time, of the'n withdrawable i> > oiint-
                        HOUSING ACT OF 1959                           59

hi loans to finance the acquisition of uiulcveloi>eil property and the
development of such property for residential usage.
   Evidence has been presented to the committee that man}- land devel-
opers have exjx lenced great difficulty in obtaining financing with
which to acquire and develop land to be used for housing subdivisions.
This eeciion of the bill is designed to bring together those sucking land
acquisition and development financing with those able to supply such
financing.
   This prppo?ed~amer.dment would not broaden or liberalize the area
restriction in which savings and loan associations may invest their
fund*. In addition, the investment of association funds, as authorized
by the proposal amendment, would be subject to Mich rules and regula-
tions as may bo prescribed by the Federal Home Loan Ban!: Board.
                       IIOSITTAr, COXSTKUCTIOX

    Section 710 of the bill would revive and extend to June 3U, WOO,,
that pnrtion-of the .Defense Housing and Coinninnity Facilities aiul
Services Act of 1931. which authorizes loans or grants for hospital
construction. One of the purposes of the act of 19.">L was to provide
needed community facilities in area*, designated as critical by the
by the President, in which there wa> an influx of population caused
by defen.sc activities. During the life of the program, the applica-
tions of 0 communities wi-re approved, but the applications from '22.
other communities were pending at the time the authority under the
art expired. The progii.m conk ..ijjlated undertaking on th«j part of
liv-al communities which in many instance^ required substantial ex-
penditures of local funds. These expenditure^ ucrc made in the
expectation that the application for Federal assistance would be ap-
proved prior to the expiration of the law.
   The Commit ice is satisfied that the Federal Government has some
moral obligation to help alleviate the critical shortage of hospital
facilities in those defense Areas where the locality undertook a pro-
gram of hospital construction in the expectation that Fedenil funds
would be available. Consequently, this bill extends this portion of
rho Defense Housing and Community Facilities and Services Act of
lfl">l for 1 year a.al authorizes expenditures of Fedenil funds up to-
?7.f» million for each of the fiscal years ending June 30,19i:», and
June 30,1060.
                                           RESEA.KCH
    Testimony received during the hearings- pointed out I lit bcriuiia
shortage of data on the hon-iug needs of our Nation. Witnesses
|Hjinted uiitthai it \\.i^alnu>.-t impossible tocstimatc the .-i/.eof our tin
met hoiis-ing need and defuriiiiuv whether \\u are aiicrei&fnlly over-
coming our cvriotib honking shortage. The only available data was
thai presented on a national basis. In the Bin-fan of the CCIIMIS a& rc-
]>urted in the Xational FIuu*iii<! Inventon of lO.'iU. Xo data on hous-
 ing nml.-< liai> ln:cn made a\ailaljk- in ivceiit \eai^ In the Hunting
Agency.
    The coiiiinittec \\a» ruininded that statuloiy antliority imu c.\iat.->
for tin- TI'mMiiit ami IIuinu Finatict- Adinini^tralur to conduct liutising
reseaivli. Public Law 171. Suth Onions*, provided that the Hoiking
Ai!iniiii.>tnitor .-hall niiidiict iv.-uarcli and report to the Congret^ e,-.
tiinat«.c of national linii.Miig needn and the prugre.-a being niadi- by the
Nation ioxvard meeting tlu-c-e need.-. Thi» law al.-o jjrovide.^ that the
Troii.-ing Administrator .-hall ein.-onrage liK-alitii-.-> to make .-tndie^ of
housing needs and housing markets.
    Public; T*uv ]O20 of the Slth Congress provided that the HuiiMiig
Adminiainitor .'-lioiihl cotidiu-t roeari-h |>nnrnnii> and report t<> the
('oiiirro.>s> on the honsinir necdsof the Nation. I'nder this jaw. the re
.-eaivh wan to be made on a i-onf rachial ba.-i> w i t h cdiiraiional in.->li-
tntions and with other private Co-.crninent i-eseanh agenJts-. This
proirnini u.i» denied fund.-v liy tlio Appropriations Committee^ and
not hing furl her was done in i his regard.
    Wit!.nut LiouV-dgc of tin-, l.oii.-ing ncod.i and liie condition of hour,
ii.jjj in vvliidi Aini'ilt-an faini!ii.ilive. it i.-, impo.-v-ilile toa.si-e.ssthe fccri
ou»ni'^ of the Natioii".-, !,...i.--iiiir pn»l»Ieni>. The Committee l»elie.vt>.-,
therefore, tliai the intei. of e.\i.^ting lau .-htnild be iin]>lemenled and
that iiie Housing Ay*.11 ,» .-hmild leipiesl the nei'e.-vsiry appropriaf ioiia
torarn out the |nirjii)M-.->(if Mich lau. The rnmniiilee 5.-, liopefnl that
the .V|i|>!ii|iiiatiuii.> Conimittei-s <if Hie Congre.^ will lw j-yiiipathctic
to the ivqur.-t* made by the Agein \ .-o Ilia! .in adei|iiale re.-eaivh
gnnn ran IK>started.
       GO
COMPARISON OF ADMINISTRATION PROPOSALS AND
             S. 5T. AS AMENDED
  The following tables were prepared by the lions-ing and Hume Fi-
nance Agency anil are included in thia report for the information of
the Semite. The estimates of budget expenditure:. for fisc.il year 10CO
have not been anah/.ed by the committee, and do not ne>--e»arily rep-
resent its views.
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      IA In-««.inii. MI 1:11 ir.uiliv tmtluirlMi Ion                                                                        whi'ti1 nri'i'l.H' flinil I'lIiTlj CIIIIIIDI |H< iloloitllliu'il liniiii'illiitvly. \\
      AA Ai|llli>rli>ll',iifin ii|i|ini|>rl.illoli.                                                                             • In lion o( I'ri'.Mili'inlnl U-.V-TVC, hill ninliilni JIM inllllon nnnniil «'V;\l»l»r C|IIIIM< within
  ' l(,-t-l.il.|l-lini, ui ot IT,-I'll nllil ii-.Tv,-iioi IIKhi^i-.lon (liltIUn>lH'(HUM'It him! N'O.V                       tnliil iiiilliorlty ii|K)ii iliiii'Miilinillflii of |ji(i AiliiilnliHriilnr wllli lln> mliin.viil (if tlu< I'lfl-
iinlll nli,i«il li> Hi, I'u^hliill S<-v"<)|||i'i IniMiiM'iljirovMoiiv"                                                      ili-iil.                                                                                \\
   i (••iiiniilKiv ri'i-m will M ili- it,iii;tr«>loii[i| inii ill Kill ntliuii H'licwul niiiltui't mil hot-                     i l.oul.ilnllon nrovlilcn fur i)|H'ii-vniU>il IIKIIIIIIHM iiiilliiirltr.ilnii uflcr MI.IVIIMO.'I u( omul-
                                                                                                                            hlii liuiishiK lil'l-                                      ,                              ii
  < Hill |iid\I'll ^f.ii' IIK-II iv In inii-n^t ruli-mi ,||t,'<-l mi(ltimriiiiu-i'il !o;un (4.',() |»'i<ri,l,
  1
                                                                                                                                i Uv.iiimivd Imiitimcv iiuihotlrnUOM iisof July I, lU.'.'J
    Kvlil'lt-^ iviliiln in;i||. r illihfiilt tu liiliiil.ili'. Inrliidlii^ |iriivNliin<i of >Vimti> (HIM-                       * Illll (irovlilM <74,l^l for ri-^.irrli coiilnii'lx for Il-your loliil of 4'."-'.'
                       SECTIOX-BY-SECTJON ANALYSIS
                         TlTI.K I. FITA iNnlTKANCK PltOfiKAMS

Property impfocement Joans
     >V »•//"»/« Ji'I. Amends sec'.ion 2(a) of the National Housing Act
to extend the titk I probity improvement program of the FHA1 year
until Septeinl>er30. MKHi.

  S i tint, Ji>2. Make.-1.•<!.-;.• reference between FHA section 2(H (pay-
ment of :n-nrancc) a.id the six insurance programs to which this
provision applies.
Jfnfff/>ltJ<      '• tlinffx ffirxillix   JtOHxiiiff
    Sn-r'ii-t. Jii.;. i . i ) A mends section-2'>:j(b) (2) of the National Hous-
ing Art iregiil. r -,-dc.> housing program) to incrca.-e the in:i.\immn
mortgage ami'.iiii \\hirh may be iii.-inx-d by FIFA from $^O.IM)0 to
§2"i.OiXion tw,)-family home.-.
    tb> Ame.uN -ei-tion 2<i:!(b) (S) of the National Housing Act (regn-
i. v -.tie- h tii-ing pniirniin) to increase tlie muioccnpant owner's max-
imn.n h>:.i. to il.i- m.i.ximimi permitted the homeouncr, the nonoccn-
pant «>v ner would pm into e.-crow hi percent of the mortgage amount
 for I**-month- «ir uiilil lie sells the proj>erty. (A noiioccnpant owner
i^ nr w permitted ^."i jjen -nt of the mortgjigc anionnt available to a
hor.ieowner. i
;
    (r( Amend- -eciion ^0:)(i) of the National Housing Act (housing
  n rural and outlying areas) to permit an increase from $b,0uu to
£0.1 H>o in the inaximnm insuniblcs Joan.
^ff||•tf/|{fft,   iiixiiram-t, (nithorizatiun. ci-illngs
    x«-t>f>n /"',. Amends i-ec; ion 2u:5(i) :unl .section 701 of the National
TFoii-ing Art to remote the ceilings on the FHA mortgage iiiMininco
nnthorixation-.
FJJA
    S,ftitai 1<>~>. Amends section 2U-l(k) of the Natioi.al Housing Act
lo pi-rmit the FIFA to inrlnde in debenture.- the io.>t of acqni.sition
ami thri-ost of eonveyam-e title to FITA.
   tffnttr n utii niiixiifi ]>r(iyniiii
    ^•> '!ith I"i:. Amends .-ection 207 of (lie National Ifonsing Act. lo
delete- .til provi-ion.-. relating to hoiking for clderlj puivon*, since the
]irn)x>M-d bill (in t i t l e If) e>tablWie> a new FIIA section 'j:}! pro-
gram «>f mongage insunuicc for elderly pm>on>' hon>ing.
61                                          IIOrs-IXG ACT OK 1059

  The present dollar limitation on (lie maximum amount of .1
207 mortgage would be increased. :is follows:


                                                                                   Ptr rjni: il '               I'a U&:: il
                                                                                    on-I^r* | Per rows


            -...      ...................          .. .        .........
                                                                    :
                                                                               .       i-.iw           a&xi i        sr-.ao
Kfcrator ivpo      ......       ....................      „_ .....         2.7"-        f.VO '         3.000
                                                                                   _   .........   I    J.2M



    Amends section 2<i7(c)('5) (o increase tlie mortgage limits for
            courts or paiks from !?I.OOU to SL.'iOO per space, anil from
$:'>(.IO.<KIO io$r><;0.on<.i per mortgage.
          ' rate i>icr< /7>/x
   >"» « .''/>« 7/>7.- - (a J A mentis section 207 of the National Holloing Act
by cstnLlifiiiii:! .ihcVi interest rate ceiliitgof ."> j>eix-fiit ( pruscM cciliiig
4K iKTcent) vritlt anthoriu for the Cuiuiii^&ioimr to inuvuse the na«-
to S1,^ percent if he lt:.il»s«ch action is mvt*san to mt-et t!ic niortjragi'
markui.
    (lj) AniDiuls ?»Ttinii 2J;;(il) of the Xalional Housing Act to esub-
Ii?li ani:\ intcivst rate i oiling for section :J13 management-type coop-
erative as in (a) nlxnc. Tliis section alao ameiuls section 2l3(d) of
ilif National Housing Act by authorizing tlio Commissioner to in-
crease the interest rate on section 213 sales-type cooperatives to G
percciit if ho iletenuii.os. siuh action is. necessary to meet the mortgage
market. (This =ection ivonM not change the basicceiling of 5 percent
on sec. 213 sales-type mortgages.)
    (c) Amends section S03(b) oftheXalioiial HoiiaingActto establish
a new interest rate ceiling for section So3 military housing mortgages
as in (a) above.
Cooperative hou.ting
   Section 10S.--(&) Amends section 213 (b) (2) of theXation.il Hous-
ing Act to—
            (1) increase the- maximum loan ratio from 00 ]>erccnt of re: __
      placement cost (03 percent of replacement cost if r>0 percent <>£ .^
      the coo|>ei-ators arc \utcrans) to 07 percent of replacement cos|.t ,.
      and                                                                         ~f
           (2) inrrease the present dollar limitation.-, on the maximum loan
      amount to the same amounts allowed for section 207.
   (1)) Amends section 213(d) to permit the. inclusion of community
and Ofinincivial facilities in mortgages on property held by sales-type
andJnvestor-sponsored cooperatives.
   (c} Amend1! section 213 to extend the coopen\ti\e housing program
to existing structure^ acquired by consumer cooperatives.
Mortgage ceiling* jor A!<i*7;a, 6'nam, and ffaicuii
   Ferdon JOS.— Amends section *J1 1 of tlie Xaiionnl K.itising Act to
provide that 'he ,V' jjercenl higher mortgage a mount which the. FHA
Commissioner, at his discretion, may allow in Alaska, Guam, and
Hnwaii, inay be applifd to high rost area mortgage ainount.s in tlu-
programs wlioro such high co.st area provisions pertain. This section
                        HOt/SIXO ACT OF 1950                           65

also permits the FIIA Commissioner to assess a service charge in con-
nection with mortgages assigned to him.
General mortgage insurance authorization-
   Section 110. — Amonds section 217 of the National -ITuiising Act to
increase FIIA's general mortgage insurance authorization by §5 bil-
lion for each of the fiscal years 1959 and i960. The portion of the
fiscal year IOoO increase which is unused through June 30,1959, may
not be added to the revolving fund.
Repeal of obsolete -provision
   &f(ion 117.- Kepeals section 218 of the National Housing Act, an
obsolete pioUfiun. which |n:riiiiitcd Uie transfer of application fees
from the FIIA section COS program to the section 207, regular rental
housing program.
Housing invrban renewal arcaa
           112. (a) Amendsisection 220 (d) (3) (A) of -the National
          » 1 / 1 .    ' - i       * \ i -         ji     •          .




§23.000 on two family homes: and from $27,500 to $30,000 on three-
faji;ily homes. Tito existing ceiling of §35,000 on four-family homes
would not be changed.
    (b) Amends section 220(d) (3) (B) of the National Housing Act
(InMialiig in urban renewal areas) to establish higher dollar limita-
ti'ins on the in.i\iiuiuii amount of the mortgage on nuiltifamily hous-
ing in urban renewal areas. The new ceiling;, would be the same as
those proved for FIIA's section 207 (regular rental housing) pro-
gram.
   Amends section 220(d) (3) (]J) to change the maximum permissible
Li.in ratio from 00 percent of replacement cost (which may include a
K'-perceni allowance for builder's and sponsor's profit and- risk) to
I'fi percent of replacement cost (excluding any allowance for build-
er's and sponsors profit and risk).
   Permits eMcrior land improtements (as defined by the FIIA Com-
miv_:i,iii.T) to be iin.liidcil in the mortgage without being computed as
part of the per room or j>cr unit cost limitations.
   Permits the inclusion of such noiidwelling facilities as the FIIA.
Coimni- lui.er dwms adi-(|uate to serve the needs of the occupants of
the property and of other housing in the neighborhood.
    (C) Amends section 2i!0 to permit housing in urban renewal areas
to be occupied by single persons.
Relocation housing
   Stctitm 1J3.--Amcn's section 221 of the National Housing Act
(relocation huiiaiiig) to uxieml the benefits of the program to any
family displaced \\itliiu ihc environs of a commu«iity that has a work-
able program.
   Secti'in. JJj.— (a) Amends section 221(d)(2) in order to—
         (I) Increase the maximum insurable loan for the construc-
      tion or rehabilitation of sales housing from §9,000 lo $10,000 in
      normal t-ust aiva-s .mil from $10,000 to $12,000 in high-cost nroas;
      and
                                                                               r
66                                 HOVS1XG ACT OK Ifl.VJ

          (2) >fake eligible for mortgage insurance uvo . three-. and
       four-family dwellings which "meet FJJA inininuini property
       standards anil appropriate State and local housing ordinances
       or regulations.
     ib) Increases the maximum iiisiirahle martinisc a«nount for inulti-
fainily projects from ^9.(.mO to §10.«XH) per unit (from $10,000 io$12,-
000 in high-cost aix-as-). andchangto the valuation basis for computing
tlit> maximum incurable mortgage amount on relocation rental hous-
ing constructed by nonprolit~inbrtgagors. At present private non-
profit corporations and public agencies are eligible for FHA-in>ured
loans equal to If in percent of the Commissioner's estimate of value.
This subsection would place such mortgage insurance on a co-t instead
of a value basis for new construction.
    This subsection uoulil also make section 221 mortgage insurance
•Available to other than nonprofit mortgagors for the production of
runtal'honisng Jor displaced families, on the same basis as section 220
redevelopment housing: i.e.. the mortgage would IM> in an amount
equal to the estimated replacement cost or actual certified cost (which-
ever is lower), e.vlns/ive of any allowance for builders and ^pon-or's
profit and risk.
    (o| Amends section 21:2 (a) of the National irousing Act to apply
the prevailing wage requirements of the Davis-Bacon Act to multi-
famiK" (Jo or" more fainilies) structures under FJIA section 221 (relo-
cation housing).
    >Yr//"»n JJ-f. — Anic!ul.N >ection -222(b) of the National TTousing Act
(mortgage insurance for servicemen) to (1) permit the benefit^ of
section 222 in the purchase of property constructed under the pro-
visions of section 2nS (i). and (2) increase the maximum incurable
mortgage from SlT.H'O to §2«).00ft"!

  >'•«•/*!»« HIJ. — Amends section 227 of the National Housing Act to
revise the co.>t -certification requirements alTecting FRA ^ecfion 220,
section 221. ami the proposed section 231 in aucordance with amend-
ments made by other sect ions cf t his bill.
Voluntary it fin imifimi of imsiiraafc
  Sci'lidn 777. — Amends title II of the National Housing Act by add-
ing a new sect ion 220 to anthori/.e the FJTA Commissioner to terminate
any mortgage insurance i-ontnict upon request of the mortgagor and
mortgagee.
. 1 »V//«/«7M<V   Of   -jufCtJtixlire
  Xi-rlioH /As'. — Amends tiile II of the National Housing Act by add-
ing a new section 230 lo authorize the PITA Commissioner to extend
the lime for curing a mortgage default con-ring a one- to four-family
residence, and. in older to a\oid foreclosure, to acquire the moilirage.
Lfflirf   nfilifralion* m nl //?/ until
  SII-HHH //.^.--Amends section r>12 of the National Housing Act to
provide t h a t n-riain legal noiiuYaiions be ron.Mdered snllicient if sent:
to the last known address.



                                            i;ri
                        HOUSIXG ACT OF 1950                            67

Transient hoiixinff in Alaska
  Art-ton M>.— Amends section .iI3 of tlic National Housing Act in
order to permit certain FI1A section 207 and section COS projects in
Alaska to be used for transient use for a period not to exceed 3 years.
                TITLE 11—IlbcsiXG FOI: TIIK£LDEI:I.Y
   Section 2(H.— Adds a new section 231 to tlit> National Housing Act
to provide :i new program of housing for elderly pei-sons.
   (1) Tlie dollar limits on the maximum amount, of the mortgage
would be the same as tho^e proposed for FJLV's section 207 (regular
rental housing) program. Interest rate ceilings would be the same
as those proposed for FJJA's section 207 program.
   (2) Would permit insurance of mortgages up to 100 percent of
replacement cost for nonprofit, corporations, and 100 percent of re-
placement cost (excluding any allouancc for builder's and sponsor's
profit, and risk) /or other than nonprofit corporations.
   (3) Would require that not less than 30 percent of the living units
in the- project be designed specially for use and occupancy by elderly
persons. Elderly persons would be given a preference or priority of
opportunity to rent all units.
   (•!•) The economic soundness test of PHA's regular rental housing
program (sec. 207) would not be applicable to the ne-w program for
elderly persons.
   (5) The FJTA Commissioner would be authorized to establish
regulations and restrictions as to rents, charges, capital structure.
rale of return, and methods of operation.
   (C) Would apply the prevailing wage requirements of the Davis-
Bacon Act. except that the wages whicb must be certified under the
Davis-Bacon Act may be- reduced by such amount as the FJTA deter-
mines to have been fully credited to the mortgagor.
    (7) Would include a provision making proprietary nursing homes
eligible for FJTA mortgage insurance, up to 7."i percent- of the value of
the new or rehabilitated properly. Mortgages insured under this
new provision would bear an interest rate of •"» percent with authority
for the Commissioner to increase the rate to G percent if he finds such
action is necessary to meet the mortgage market. In addition, (lie
Commissioner of the F1TA would be required to obtain certain cer-
tificates from State agencies relative to the licensing and inspect ion
of musing homes prior to insuring mortgages.
                     TITLI: TTT— FJ:UANW I»KXK\V.\I.
             phi lining
            .iff I.— A mends section 101 (b) of the Housing Act of 1040
by direct ing t he TTTIFA Admini.-irator to encourage the iitili/.aiion of
Slate agencies to provide elleetive Mjlutiiiiis for urban renewal prob-
lems of smaller communities.
TecJinical
  Xfi-linii >>02. Amends section 102(a) of the- Housing Act of 1040 to
clarify uncertainties in exislinjrlaw \\hdluM 1 the Federal Government's
loan agreement wiih the local public agency cover.-> interest as \voll as
f)S                       HOfSlNO    ACT OK 1050

 principal where local public agency pledging the loan agreement as
 collateral.
Eanj land acipiixifion and clearance
    Sect inn 5ft?.—Amends section 102 (a) of the Horsing Act of 10-19
 to authorize the 1IJTFA. Adminii-lrator to permit laiiil acquisition and
 clearance priur to Uie signing of a loan and grant contract, provided
 lucal law permits such early acquisition and clearance, and provided
 that land acquired unde. this procedure shall nut be disposed of until
 the urban renewal plan is appro\ cd by the local community.
 Urban renewal loan authorisation
    S'.i (Inn JG.J.—Amends section l02(e) of the Housing Act of 19-10 to
permit, the Administrator to m.ike borruvvings from the Treasury in
excess of $1 billion at discretion of the President.
Grant authorization,
    •^•ctivH J0.j. -Ajnends section 103(b) of the Housing Act of I9i9
to provide a fi-xeur, $2.1 billion slum-clearance and urban-renewal
prugr.im. with an annual capital grant authorization of $350 million,
which could be increased by $130 million in any 1 year.
Repay in fnf- oj uncollectible advances
    Section, 30G.-Amends bcction 103(b) of the Housing Act of 1049
toauthoiizc the uiu of urban renewal grant funds to repay Treasury
 loaho in.ulc t« finance urban planning advances which are now un-
collectible because of cancellation of the project.
Community n-neical programs
   Section. JO*—Amends section 103 of the Housing Act of 10-19 by
adding a new subsection (c) to authorize ])lanning granU for the
pieparation of "coiiiinunjty rw.ewal programs." which would enable
a community to aiirxuy its urban renewal needs and resources, and
schedule projects.
Technical
   .^i.tion JOS. - Aineiulb section I05(b) of the Housing Act of 19-J9 to
fa>ilitati-. public improvements invohing the Federal Government
.tin) tlif Di.-liicl uf Columbia in connection with urban renewal
project*-.
   Xt,<.t!vi>..W>.- -Aniunds, tectiun 100(e) of tlie Housing Act of 19-19 to
eliminate the provi.-ion in existing law that not more than l^Va pcr-
ct'iit uf the tot.d loan authoi izaliuii may be obligated in any one tState;
does tiut alter the UVi; percent State limitation on grant authorization.
Allocation payments
   Section. ,310.- (a) Amends section 106(f) of the Housing Act of
1019 to .liiiliuii/e U'lueatiuii p:> v \incnti> when flic displacement is a re-
sult of .my ymeinmeiilal activity in an urban renewal i.rca, nml of
pingiaiKMtf \uluitt.»i\ u-.pairiiml ii-liabilitntiun; increases from $100
(o.>-<iO tlic iii.i.xiiiiiiiu amount uf relocation ])n.iincuts to individuals
and f.uiiiliii.;.iiid inoie.ise> f rum $-,.'00 to $0.000 the maximum amount
of relocation payments to business establishments.
   (b) Amends section 106 by adding a new subsection (g) to give
business (.oi.^rns which are displaced from urban renewal areas a
priority of opportunity, insofai as practicable and desirable (as do-
                        HOUSING ACT OF 1959                           69

 termined by tlit: local governing body), to purchase or lease commercial
 or inJuAiiial facilities provided in connection with area redevelop-
ment,
Priority for Slate-assisted -projects
   Section 311.—Amends section 106 of (lie Housing Act of 1949 to
establish a priority for projects toward which a State contributes at
least one-half of the required local grant-in-aid.
Planning requirements
   Section 312.—Amends section 110(b) of the Housing Act of 1949 to
authorize the ITIIFA Administrator to expedite urban renewal proj-
ects by permiUiii*,' him to omit o: to simplify present detailed require-
ments for the urban renewal plan.
Nonresidential development
   Section313— Amends section 110(c) of the Housing Act of 1949 to.
permit up to 20 percent (now 10 percent) of the total capital grant
authorization to be used for areas which are not predominantly resl-
dentj.il, and which are not to be redeveloped for predominantly resi-
dential uses, even if such areas do not include a subsantial number of
slum dwellings as presently required.
NoncasJi granta-in-aifl
   Section 314. (a) Amend section 110 (d) of the Housing Act of 1949
to provide that improvements and facilities that are otherwise eligible
may be credited as lucal grants in-aid to urban renewal projects, pro-
vided their commencement does not precede the feigning of the loan
and grant conn-net for the project by more than 5 years.
    (b) Amends section 110(d) to permit the cost of certain public
improien.cnts serving the urban renewal area to be credited as a local
grant-in-aid when financed by revenue bonds payable from service
charges against the users of the system.
Credit for interest payments
   Section 315.—Amends section 110(c) of the Housing Act of 1949 to
authorize the HI IF. v to include interest on advances by a city (local
public funds) as an item of g^osa project «:obt for an; urban renewal
project.
Uniform-date
   Stdion JIG. -Amends section llp(g) of the Housing Act of 1949
toniake uniform the date for determining tin; application of the"going
Federal rate''of interest under urban renewal contracts.
Technical
   Section 317.—Makes con forming amendments.
Federal recoffnilion
   StrSion. J1S. -Waives the requirement in section J10(d) of the
Housing Act of 1919 for communities \\hose projects could not obtain
Federal recognition dining the period from January 1, ]957, through
December31,19,"<s,Lt»c,iiis<e of limitations on the UUP A Administrator
to make capital grants or to reserve funds.. Under existing law, such
Federal recognition is required t«> enable the local community to in-
clude local activities and facilities as noncash grants-in-aid.
70                                         HOUSING ACT OK 1959

                    i'cax iiieul-rhig cullfyzs
  .SVf//W .till. - AdiU> a new hpc.lion 11-2 to (lie Uou^iiii; Act of lfl-10
to--
        (I) relume "piedomiiiantly rc.-.iduntial" ipquiren.-Mit in areas
     involving an educational institution:
        (•>.) permit i led it. toward tlie loealih'*, one third th ire of ox
     pundit uiv.- in.itK? h\ ljn-uiliaaiiuii.il institution In pm Jia^ing prop
     ertyandi 1 clearing the property:
        (.')) permit th' 1 expenditure to be counted -low aril a community's
     luiiil .share pro\ ided-thc expenditure if inaili; no more than ,"> \curs
     prior to tlie Myiiiiiii of thc-loan and grant rontracl fu. Hie urban
     renewal project.

  ,^i.i limi •>-!>. (a) Aini'iid.t .-eel ion 7<U of Ilic ir<tn.--iii<]r Act of
i^raiiU to a.-.-i.-t in bah pliimiiiijr), tu e.xtund the Bi-opi- of the urban
planning <rtt?.nt to —
          (i) include am <;roiip <> r ailjau'iit i-iiiiiinnnitie.-. Iiai injj; a (of a]
      )jnpulatiiiii of lc.-.i Iliiin .")().( Kill. ;m,l ]ia\iiii; coiiiiuon or ixlali-il \\\-
      lian plaiiiiiiiirpi-oliloins:
          (•2.) iin-Iudca county or a •rronpur^oiiniii's: and
         (-'!) inriiiilf iiiiini< ipaliiii-> li.i\in<r a population of k'.^s than
                                                         '
             iak .-IH tioh 7ol to iiuiviiM- t i n - aiitlinii/..itioii for grants to
;i»i-=i urban p, •inning from S]0 million lo&ZCimiUioii.
//• I'l .tflll> /!/.< It '/ Illltt/i .« Ill / < > I H / - / < _ I III- I '•ttl/li/HIIIA I'f   fill llf   J/ltJl/lf   llljl,lll /V.S

    Sut'iiHi .;jl. Amende >wiion :il. t i t l e XII of tlie Tinted States
Code ( ( l i e .\.itiuii.il I'M iik A i t ) to pi i mil n a t i n n a l banks and State
iiii-iiiln-i baiiK.^ i to t i n - i-Mi-nt p t i i n i t t c d b\ Stale law.s) of (lie Federal
Uc.-H\r S\. cut to pnii liji.-i- <ii uiiilei \\\ ilc i>'.!i<!alioii> of local pitbl"
airi'iH'io Iiavinir a maturity of moro llian J^ nioiilli>.
                                  TITU: IV, Ixrtv-]it:.vr IIoi'sixc
J)i rliiriiliim of foHdi
     Xi-Hiim .{«/.— A ini'iiiK M-i'tioH I of Hie F.S. Tfousin«r Act
iif I Wn tu .idd tin- foll>..kiiig |jo]'u.\ oltji'i ti\c->. io make ailccpialc pro-
vi.Moii for l.n<;i'i fa'u'lit- .tiiil for f.iinilic^ ioii»i>tinir of eldcrh per-
MIII.->: ulu'ic a loi-al liit>i.-<ii. r aiil]i(-ii(\ IM-> determined llial the
.ii<]ui.-llioi, a lid irp.iii. I I'li.il ililal inn iti rclnutlrlilii; of existing ilwi'll-
iiiir-' b\ ihi- Idi.i] pu!;liu .iiri-in \ for 11-.- a.s a low rent housing , roject
 i.- iji t i n - pulilii iiili-if>t uf tin- ruiimnihiljt, (he I'ublic llon-inj; Coni-
 niif^iohci .iinl tin 1 Tlnii.^iiiy .iiid .TTitiiic Kiii.iiHr Adn.iniM.iiitor >hall
4-iu itiii'iiue .mil f.ii ililalc .>MI !i iiiiileitiikiii^^.yln \er-t in local housing
. i i i t l i i u i i i i . ^ full n^piiiisl>ilit\ fir tin olahh.sliiiiriil of rent.s and eli-
g i l i ' l l t V I r q i i i l i Ini lU - , M | ] i j i M t to i l i « i.liu- l i l n i t i filing p l < t \ idl-d ill ( l i e
,ii . ,/iiinl to aiillnii i/.i- loial h(iii.-iii<; atl'hoi it ie* to ] i r i i n i l familiu.s
 \\liu.T iiiioiiic iii> UM.-CS beyond (bu limil.^ for < untiniu'd oruipancy
to run ,iin iti llu-ii liojiL^cJIlii'i Ikruii^li j,"<»up or ihili\idiiiil pun lia.^i;,
or a--. k-niiftLi p.i.sin^ .i noii.;ub.Mdixed rent if p i j x a t e hoiinin^ i.s not
avixilablato'lho'n.              -


                                                          JiJLlilS
                           SOUSING ACT OF 1059                                  71

 fti-nts f"d income limits
    3ccfion .'{02. -Amends several sections of ilic U.S. 1 rousing Act of
 10:]7 (o permit local huiis.ng authorities to act rents anil income limits
 f. r tlieir low-rent projects, subject to a statutory ceiling on income
 limits.
     (a) aiid (b) arc-technical, amending section 2(1) anil 13(7} (b) to
delete provisions to be covered by other section of the -ict.
     (c) 'amends section l.~>(8) (a) "to authorize the local agency to fix
maximum income limits for admission anil continued occupancy. The
 statutory ceiling would differ from existing Jaw in two respects: (1)
 the present ?100 exemption for each minor or adult dependent io
 eliminated : (2) flic -0 perccii* gap requirement is w nived for displaced
 families. It also removes (he Public Housing Administration's au-
 thority : to rcquiro'the prior :ippro\al of specific income limits set by
 the loca l agency.
     (d) and (ej amend sections l.~>(8).(b) and 15(§)(d) to remove
references to the Public IIoji.-mg Administration's powci of prior
 approval of specific income limits.
     ( f) repeals section o02(b) of the Ilousing Act of 101S. relating to
 the exemption of benefits for disability or death occm s in connec-
 tion with military service, which is incorporated in the basic act by
 subsection (c) above.
 Central Administrative Office facilities
    Section -103.— Amends section 2(5) of the act of 1937 to permit a
 local public Junking agency to furnish administ rathe facilities to the
 local urban renewal agen«-y, at economic rent, in localities where the
public housing agency^aiid the local p'iblic agency operate as separate
 legal entities miF with a COIIIHI- . administrative stall'.
 Use of exixling dweJfhigs                  '- -
    Section 10-1.— Pi\iviilcs that wlii>iv-a local housing authority deter-
mines and certifies it the Public I'jHjiiig Coimiiissioiier and to the
Housing and Home I'Ii..:iicc Adminisinitur that tl.ie- a«|iiisition and
repair, rehabilitation or remodeling of existing dwellings for use as
a low rent housing project, the Commissioner and the Admini-tra-
tor shall employ the pov, ci-i-, functions, and duties vested in them by
the United States ITou^ing Act of 10:»7, as amended, or any oiliur act,
;
  n such manner n« shall facilitate and entourage the undertaking and
earning out of .Mich ;i low rent housing project b\ siuh lo-al public
liou«ing agency, ai.d the annual report of the Administrator shall
include information on tlie niiinlter of such ca.-i's and the manner in
•which such functions. pov»ers. and duties \\ercM» i-mplu^cd and exer-
cised in such L-n?es.
.•1 iii
    Sri-lion •Ifi.'t. Amende .section 10(i) of llm ,cl of 10;'i7 by increasing
the authorixatioa for now annual i-ontribution i-on<rad> by an addi-
tional Sri.OflO units to lipcor.ie a."^iilnbli< .Tidy 1, Ifl.'if). Tt would also
oxtond by 2yeais thojieriod during which the. existing authori/.atjons
 would be available. This would make available for 2 additional
year?, nnlil July 31, infiO, any units not conlracied for under tlio
 fust million/at ion of .°i."i,0fii) nnit.s wliirli expired July 31, I0."-f., would
extend (ho so«'ond niilhori/aiion of o.VNH) uni(> (o June ;io, Ilifil, and

                                               > --
72                         HOUSING ACT OF 1959

make the new aiuhuri/.ation of 35,000 units ara.ilr.blc until June
30,19C3.
Overincomc tenants
   Section 40G.—(n) Amends section 15(8) of the United States
Housing Act of 1037 by adding a new paragraph (c) to stipulate
the terms on which a low-rent dwelling unit may be sold to a public
housing tenant. The tenant would be re-juired to pay local taxes,
amortize- the full purchase-price of his home, and puy interest al not
Jess than tht cost of money to the local agency. The local agency
would have an option to repurchase a dwelling if the family fails to
carry out its contract. This plan is pennias>i\e with local-'ogencies.
If any agency tinds it is not feasible to operate under this ])lan, it
could permit oveiinooniu tenants to remain in occupancy if the local
agency detei         ie> that it i» impossible for tlie family to rent or buy
a'dceer.t pru ... dwelling, and if an unsubsidized rent is paid.
   (b) Technical: Amends the act in a i-.niuber of places to make
possible the sale of low-rent r.nits.
Amendment to existing contracts
   Section -if>7. Amends the United Stales Housing Act of 1937 by
adding a msw section • •(• to provide that existing annual contribution
contracts shall be ;-ei i=ed, npu.i request of local agencies, in accord
anc» with the icnns of the act of 1037 as it is amended at any time,
provided th.it the interest uf tlit- holders of outstanding bonds is not
jeopardized.
Low-rent hollaing in tirlinn rrnermJ areas
   Sc:(tion.',OS. (a) A mends section I07of the Housing Acl of HM9 to
fat ilit.ite tlio di-vulopiiiciit of low-rent lioii.Mng in tnban luiii-v.iil area.x
Under existing law, when a new public hunting project is located out-
side of an urban mji-wal an-a, the locality '^ rc(|iiirccl to make a local
contribution in (hi* form of t.i.x t-xcinptiuii, but if located within an
urban renewal area a further 1ma! contribution ].-> ixt|iiired equul to
one-third of tlic \\.ilcdown in land value. Tlie proposed amendment
would cliinin.itu this dilTorencu b\ accepting t;i.\ e.\eni]>tiun ;i.-> the only
required Iuc;il Contiibution for low rent prujcct.i in urban renewal
areas. This pro\ iMoii will -ipplj to Federal, Stale, and city projects.
   (b) T*ro\idcs tlint whero land t<i be acquired a.-^ part of an urban
renewal project i-, madi1 available to a local hou»ing authority as a
bito fur a low ivnt housing j>roji'ct a.-^i.^tud under the U.S. TTonhing
Act of 10:57. as amti.ded. .vii amount equal to the pi ice foraiu.li land
shall bi« in. liidi-d a.-, a ji.irl of tlip deu lopim-nt i-o.-t of Mioli low-rent
huii.Miig pruji-i't an.l paid over b\ (lie hual hoiiMng authority to the
hical agi-iu^ niidvrt.i>»ngMid., uiban itiiewal project a.-, the pnrch.i.-e
prico for said land..
                       TITI.F. V—Cou.Knr. llousixc
   Xi-rlitm t'0l.~Amends section -101 (d) of the Ho               A of 1950
to i- croa,-,e the revolving fund for ctjllcgc housing lo.t... ^v ^100 mil-
lion (tiio. presoi.t cuiliiif, is $02,') million). Ol tin- $-100 'million in-
rrTO.se, C-r>U million i.-> rescncd for "oilier cducjitioiial facilities,'"
iin n-a.-ing tlin ix-M-natiuii for this purpose from >IuO million to §150
million, and $."(o million i.s re.scr\(id for .sludcnt-nui>o and intoin

                                         V . '/ 7
                                         •^ JL «-• I
                         HOUSING ACT OF 1959                             73

housing facilities, increasing the reservation for this purpose from
?2o million io ?75 million.
  ffcfion ~j02. -Amends title IT of Hie Hoiking Act of 105U by add-
ing new section: 105 and JOG which authorize (he Administrator to
make 'ird guarantee loans to educational Institutions for theconstruc-
rion of new, or rehabilitation of existing Jaosroonis, laboratories, and
ivlafed facilities, including equipment and utilities. Authorizes a
revoh-inc: fund of $l:!j million to iinance the in".- loan program, and
?l2ii million to finance the new guarantee program. This section also
provides for the pi evading \\;ijre tcalc under the D.i\ is-Bacpii Act to
bo applicable ~u> all coii.-trui-tion fiiiancc.l with college housing loans*
                 TITLK VI—AKMEO SKKVICKS Horsixa
  Xrction GOL (a) Amends section 803(a) of the National Housing
Act to extend the military housing program l^cs. $03 and 809) for 1
year, until June 30, IJiGO."
   (b) Amends section S0.3(b) to increase from 25 to 30 years the
maximuir. maturity of mortgages insured under this section.
   (c) Amends see*ion S03(b) of the National Ilousing Act to per- /
mit the Comiiii-sioiier to include the cost of nondwelling facilities as /
a jinrt of the mortgage security, adwjuate to serve the occupants of /
militar}' housing.                                                   .       /
   (d) Amends section S03(c) of the National JTousing Act to permiT
the Commissioiicr to reduce insurance premiums below one-half of 1
percent per annum with respect to V/herry projects acquired by the
Secretary of Defense.
Defense housing for impacted areas
  Section 602. (a) Amends title YHI of the National Housing Act
by adding a new section 810 to authorize the FIIA Commissioner to
injure mortgage.- on nngle family and niiiltii~;miily projects (not to
exceed 3/iud imits), the need for wliidi is certilied by tlie Secretary
of Defense. Insuiain-c would be on an "acceptable ribk" rather than
an "economic soundness" ba.sis. The projects would beheld for rental
for a period of not les-s than "; years unleio rclcasul by the militaiT ior
<:ale. Priority in rent .1 or sale is given to military personnel and es-
sential civilian personnel of the a nun! services as e\iilenced by certi-
fication issued b}' the Secretary of Defense.
   (b) Amends section SOS of (he National Housing Act to make
iipplirphlo (he provisions of section 227 of the National Housing Act
(cost certification).
   (c) Amends pcction 212(a) of the National Housing Act to make
applicable the prevailing wa«ju requirements of the Davis-Bacon Act.
   (d) Amends section 305(0 of the National IToiiMiig Act to make
          SKI inortjra«i'* eligible for piiivhnse by the Federal National
      gagc Association under its special assistance fur.otion.
Acquisition nj rr.nfal htiiming projects
  Scrtioti nf>.1.~ (n) and (t>) Amend sections-JO.l(a) and (b) of the
nonsing Ann-nduicnts of 1055 to permit (he Secreiary of Defense Io
acfjnin- FTL\ ---i-tinn -07 rc-nlal projects, if completed'prior In July 1,
10"i2, :iiid ccrtilird by the Di-pai-fiuent of Defense as necp.--.-arv foi
military h«-'ii- : iigpiirp'>es and to make (he acquisition of such projects
 7-1                            HnrsiNi. AIT UK i :>:•'.>
 mandatory ii'i-i-i linn M»:;h"ii.-iii!i i?r«m.-l«ni ted hi tire area of the- FIFA
 firi ii in :i"7 1 m iji-rl<.
     i ri Amend.- -itijun J " 7 » r » nf (heart eiititlrd "An art to aiitluirixo
 •vrluii! n>. .-;iiii linn .il inililai;. iii-t;il|.itimi.-. and fur nther purpose-."
 a].;- ..n.-i. \nj«»i.-i ;'.'i. 1H.VT. in order tn exempt KM A MVIKHI if'i" rental
 pi-nji-i-is. i-miTt-d h\ ilii> M'-Jinii frniii In-ill!! iUi l.iM'il "r-nl'-taiitlar<l"
 Ih-i;iii--i- tin- niiii- iii >iii Ii pioji-. L- tin i, nt iiitvi iiiiniiiiiiin llimr an-a
 liiv.-«-ri'H-il fur i>i!u-riiiilHaiy Iunisiii<r.
                            TITI.I; VII — M.iM-Ki.i_\XKm >
                   FTTIiKKAI. X.\TIi«X.\I. XI"irr«:.\«ii: A^oflATIiiX

    .>»» tiim i»t. — (a) Aiiii-inl- M-i linn ^'it'-JiIil i»f ll'.t- Xa'ional
 A<:J '.» iii« riii>c' finiii sl."i.»Mi!i iiiSjn.iHHi i |ir elnllai liiiiii for
 |uiri-It:i.-iMl uinlcr tin- I-YiU-ial N.itiiuial .Morij^nre A»fM'ia(ionV >«•<•-
ninlarv inaikt-i i.|pci.itii.i.~. AI.-o |>i-niiii.- FX.\L\ i«i ]<urrlia^<* niori
iraL'<-> iii--uivil Ii\ F I I A iiinlri MM linn ±Iiiiif tin- Naiimial Ilnii.-injr Aft
 in |iriu.-i]>:il uiimiini-- a^ insureil \>y FIIA.
    i In Aiiifinl.^ .-if i inn :;iC.dn of ilir National HniL-inir Art in pxiriid
 for -2. \i-ar- ( u n t i l Anirn--t 7. lliiih) ilu- iv<jiiiivinriit tliat tin- Fwlunil
National .Mnii^i»r Ar->ui i.iti-in piiii Iia.-c iimrtirairi-:- under it.- >i>i'<ial
a^isiaii'-i- fniii-iimisat par.
    < i - i Ainrml~ .-.ri linn .",<»", of ihf Naifiiii.il Ilmi-in^ Ad in ordc-r to
                tin- I'Y'li-i.iI X.itinii.il Miiiiismc A.-MK iatinii to as-uinc the
           i -lii|>. -ri \ "H ih^. ainl .-.ill- of (t'Haiii innrljr.iiriv and other ol>Ii«ra-
linn.- a- qililcil. iti Iii IT ariMlirril. In the PITA in rdiiltrrlloii with llu-
lii|i idalinii nf varinii.- hou--'mir juvijeris.
    nl i Ann-nil.- .-!•• iitui- :;<>|( l)).:;iii;|I.).aii(I r i l c i u f i h e Xatimial TTons
iliU Ai I iliiil<lfl In lii-llnil the Knlrl.il Natiiill.il Mort<ra!!e A. --social idll
Iii in\i— t ii> « .\i r-.- fun I.- in Fedt-i.il internifiliati nvdh lianl; dehcu
lun-, I-Vilri-.d limiir In. in l>aiik imli--, Fedt-ra] I.iiid hank IHIJII!.-. and
li:iuk> for riio|u-rative> tlehenttuvs.
                              r\t:j| iiorsixi; i:^sr.\i:rn
  *i'fi>n, ?",'. la) Aliiend.-M-i tinlil'><i:'i|r) of the 1 lotl.Mili: Ad of I!l."i7
tin-Mend (lie f.iliu !nui-ili<r ic-ral-li pltiifiaiii for a perind iif .*• Vr:ir>.
        iu -'"'v I. I'.'.V.i. and .inllmi i/.i-- an .iiinii.il :i]>]]ni]>riatio!i nf

   (In l > i i i - i i > the I I I I F A Adiniiii-tratnr to.-tmly (lu-
of migratory f;inii\vnrlii-i>.
                     >I-K\I:VN <ir rrr.i.ii- \v<n:ic>
   ^•it'niii ,"".>'.— A Inetiil- -ei-lion 7«l^' of {hi- 1 loll-ill^ Art of I!l;"i-5 liV
addili>; a lii-NX -idi-i-. i i n i i (fl (<> .uillmi i/r the Adliilliisti-alur to the,
ill :in\ one li-i-il U M I . up to s'lii.iiiin of the rivohinir fund li« roll
dili I -in \i'_\.-. nf ( I n - -I. ilu- .iiid • u t i e i i l Mill, .nf of Stale alii! liK-al
plilili.- \\nrlo |ihlliliil>^ .Hid - l l l \ i > \ > nf I'-liln.iIi-d rei|llirellienl^ fnf
Slate and liM-al jnihlir work-.
                                                       .ACT       OF 1059                  fo

                       >-KKVirEMEX"s KE.\!l.irSTJIi:XT .UT OK u.-ll

   .^•,t',,,n :»',. la) Amends .-vrt ion iMgiil) of tilled. L~nitcd States
('•nli- to permit tin- VA to expand the e\i>tinir i-la.-* of •vii]>crviM > iI
lenders" u» Mi.-luilc a new niu-jrory of riiori«ra«re lender?. A "super-
vi-ed tdi-r" I.- entitled to make a A" A loan ttith<»m prior approval
by tlic VA. Tin new eatejrory w<niM i-on?i?t of "approved mort-
•rajrees" ruder llie -ei'tilied agency program of the FIIA. The ia-
•-IIMOII of ilie new rati<rnry \\ouid not be ;uit(Uiiati'-: eacli applicnnr
muni beai-«-i-pl:ibIe to the VA.
    t l i i Aim-mis; sei-iimi >i»"iie) of title -'Jx Hiiteil States Code (o in-
i-iva~r ihe rf;ii::tr.rv iKr.xiiiiiiin intere.-t nite on A'A-irnaRiiitfed and
iliivi-i home IJK-.IS IToin -I3.! pen-cut to ">J.t pciveni.
    » € • ) Ann"-1^ M'ctioii> -"iiiiicl ami .".II of the Servii.vnicifsRejidjn.-i-
IIII-M A.-r i»f l'.'4I to amhorixe the AdiniiiiMniior of Veterans" Af-
 laic- ti> (iroliiliir builder^, and lendei> from participatiiijr in ihe VA
holm loan |iru>!raiii*. if .-iii-h bnililer.- «n- Ji-Julei> h:i\e been barred from
tin* In'iii'lit-i of tin- Xational Jlnii.-inif ,vi-t by the Federal ]1oii>-in<i
('iiiiiiiiissioner.
    id» Ann-lids r-ei-|ion .~il3(d) of the Servicemen's Ixeadju.^dnent Act
of 1!>I I to provide an additional s?3iin million for the VA direct home
loan priiirnini.
I Hi'^tJ'nltttnin itf f.i'ii/ititii          Aif     iiniJ niln i' Itur-niit   projif'tx
   ,>"•••/«»!/ 7'.»J. Aiiifiula M-ctimi Cut; of the :n-f eiuilled "An art to ex-
|ii-«liit- i IK- |>r<ivi-ii>n-. of ]iiiiisin<r in ronnert ion w i t h national defen>e
and for oilier ]inr|m-es." ap[ir«i\"ed October \-\. I!Tii). to permit the
••iijiiminirlin^ of L-inbani Art ami low-rent project funds and the
n«v "f all resiihial ivi-i-i|»t.- fur i eduction «»f any Keder.il annual ron-
tribiilinii><'(iiiiRii-i iimler theriiii.oilidateil roiitnn-t.
                                       lilSI'oSM. or I'IM.lKlTS

    ^,,ti,,i, '.at',. (a| Amends MVIion (Hi? of tbea«-l of Oetober 1-1.10In
(Lanhiiii A n ) , to aiit(,..rixc the PRA ('oinmi.-,>ioner to modify the
tenn< f any i-onirart relating to any IIOIIMH<; project^ di^poned. of by
him toi-iiopvrative.-.
    do Ami-lids si'i-iion JIH'I(I-) of the lTou>in<r An of isiiiH (o extend
mnil January -".1. l!n;l. the time in which military personnel may
Continue to iHvupy war lniiisiii<r pron..-ts PA-:!iiiili and I'A-^Ciiil-J
(I'a^siyunk» \rliii-h are preseiillv owm-.l b\ the IFonMiifi; Anthoritv
..f Philadelphia. Pa.                      "            "               '
    ( • • i AmeiuN -i-.-tiiPii- li'ii-i and l i e ) of I lie I'nited States ] lousing
An nf !!»:;7 !o permit the 1MIA tii>.-II lluve PWA low-renl projei-ts to
other than a I'«-al piiblii-a^em-y.
                   Vol.! NTXKY IlnMK Arm.T'iAlii: HIKIHT IMiolii:AJf

  -V i tim, ;/','. — A luelid- -ei-liiui r.IH of the TToii-il jr Ai't of ISI.VJ to ex-
      the vuliinlarv hmor innii<r:i^e < I't-ilit ]iro^nim for ^ \eai>. u n t i l
      ::i. i!n;i.
 t'tliititilf   \t tlltnl I'^Jli *t\ tliitl ft     tinff\/tilf\
   >'. i t'liiu ;/'.N'.— Aiiiliori/.i-> H.VHI.OII/I sinnally for a J^year period Jo be
 -i'd by the III IK A Adiiiini>tr:ilor In pmx ide >'-liiil;ii>lii|i- and fel-
76                        HOUSING ACT OF 1950

lovships in public and private nonprofit institutions of higher educa-
tion for the graduate training of professional city planning ami hous-
ing technicians and specialists.
Home Owner's Loan Act of IftJJ
   bcrtion 70&.—Amends section 5(c) of the Tlonie Owners Loan A^-t
of 19-iK as amended, to permit an h-Mired savings and loan association
to invest an amount not exceeding at any one rime 5 percent r.f its
withdrawable accounts in loans to finance the acquisition and devel-
opment of land for primarily residential usage.

  Stffinn 7Jo.—J\c\ inland u\tcml:> until .Time 30. JflfiO. the authority
of the Holism:; Adinini.-tr.itnr to inakc hospital construction loans
or «rrant> tir other ]>a\iiitMit* uiiilur the Defense Il<iti>jn;r and Commu-
nity Facilities and Si-r\ ii-i* Act fif U'.'.I. in rases where loans, grants, or
payments \vnv den'.ed aulely becaiuc of the availability of funds for
the fiscal year ]0>;».
                             CORDON RULK
Ljn the opinion of the cummiitce, it is ne-cssa'.y to dispense with the
requirement* of Mibsection -1 of rule XXIX o( the Standing Rules of
the Si-nate in order to cxjiedite the biisintsss of tue Senate in connection
with this report. ~




                                        'ill
INDIVIDUAL VIEWS OF MI*. CLAJiK. MX. DOUGLAS. 3LR.
          JAY1TS, ANT) -ADJ.
    TJic committee has approved a bill which. in many ways, will iielp
stimulate' home const ruction and improve the housing standards of
the American people.
    In one major respect, however, it falls seriously short. The level
of authorization for the urban renewal program is so limited that, if
the bill is passed without amendment, it will force drastic curtailment
ami postponement of urban renewal projects now contemplated, pre-
clude the entrance of new cities into the program, and thus dim the
bright hopes \\hich urban renewal has. held out for better living in
America's cities.
   Title I of the Housing Act of 1H-10, which authorized urban re-
newal, was. the culmination of a decade of effort to develop a prac-
tical means by which our cities conhl cleanse themselves of their
spreading areas of slum and blight. That act recognized that slum;-.
wiib their accompanying manffold social evils and economic loss.
pose a problem that is national as w<?Il as local, and a problem of such
magnitude that only through a cooperative national-local effort could
an ellective solution be found. c
    Under the program, the cities elect the areas to be cleared, assemble
  the land, relocate the families living on the site, and sell the land to
developers fur new uses— earh step subject to Federal approval. The
cost of the project — that is. the e'"!lerence between the cost of the
cleared land and its sale value to the new user — is shared by the Fed-
eral Government and the city. The Federal share is two-thirds of
the total and city:s one-third (although (lie committee received testi-
mony that the cities frequently contribute as much as one-half of the
total co.-t ).
    In tin- 10 years >ince passage of the Housing Act of Ifi-lfl. urban re-
newal has been steadily gaining moment inn. Jt has becoine the most
important single Federal program directly asisting the cities where i!.1
percent of the American people live. By now, nearly -HiO cities are
parriciparing. and the number has been increasing recently at the rale
of about I Oft cities a year. Participating 1 communities are located in
•I<> States, and enabling legislation is pending in some of the remain-
ing Ji States. The largest i-ities were the lirst to get underway, but
by now fully one-third of the projects are in cities under i&.O:)!! popu-
lation. As the program proceeds, more and more smaller cities un-
doubtedly will be taking part.
    Witnesses be fore the commit tee testified that nrbnn renewal project*
1
  iave slhnulatcel private investment in amounts several times as great


                                         ipls which over a period
yea is will, in many eases, more than ollset the public expenditures.
                                                                  77


                                    •S i
                                    ** JL *
                                          j.
78                          HOfSIXG ACT OF          1959

                  THK u«.vs rmiACK ix n:i5.\x KKXEW.M.
     In the I loiL-ing .\<-{ of ll'-Jii. ami *.ub?equent arts. §l.:J.r» billion wa-s
 authorized fnr the Fcdend *haiv of the urlian renewal program. This
  was sufi'iciem t«i otj\ur the Ft-n -al .-hare of all project* approved dur-
 ing the H \eun. from the pa^sa-re of the original act until IH.VN. Cities
 were rhu- given full encouragement by the Federal Government to
 oijjanize for tin- t:u-k. lalU community Mipport. prepare their plan-.
 anil file theiranplieationiv
     IiV lust year, however, alnm.-t all of the authorized funds had been
 i-oiimiittcil. When S. -lic'-'i. which contained additional ol>li<pitinnal
 aiitlmritv. failrd of |»:^.--aire iinhi' Hon.-e of I{epivsentaiive.<. the I'rban
 lu'iii-wal A«li)iini.-lnUi<>n fouml \l?v]{ with oiih- Sl.M million on hand
 and a b:i'.kh>:r "f ^?;>>v- Jiulli«»n in ajiplications, already tiled, with addi-
 tional :ipjili--aiioii> ruiuiiiir in at the nite of $1(1 luillion a month. The
 Administration ua ? theivfoiv fnnvd to intitule a "nttionin^c" of the
 ftiiul^ available. ba^i'il upon population.
    Tin- tv>uli of jlu-ajiplii-aiioii nf shi*"'nitii)niii«r" rnnniila was to place
 thi* urban iviifual proj^iiun on a ulmlh uewl.asis. AVhereasin the past
 a i-iimniimitx rouM «lr.t\\ the boundaries «if an urban renewal project
 around a >Imn aiva and plan tl.e renewal of the area a^ a whole with
 a^Minuu-e t hat Federal fund.- u<,uld be available, under the "rat inning"
 formula it i.-. iv.-tr!cte<i toa pruM-i ivilinjr. Tlnif. cities an- forced either
 to.-uspcml thfirplaiij., *]u\\ them down to a "^nail's pace." or scale them
 do\\n Hi a MiialU-r area- \\hicli maj destroy the logic of the original
 planning. pmi-Mt lie e.\v.-tit!i«n •.!' truly buld reroi^i ruction sehome*.
and permit c»nl\ i.-olatud pat. In-,- of renewal within larger s-hun areas
 that .-hould all be i.-leared.
    The etJecU- nf the "rationing" formula upon individual cities with
applications jit-iiiling on September S, Ifl.'iS, are shown in the table
appended to thi^ report, -\s the table shows, many nuiniripalitie?:
were furcwl to.-raleilo\\n their jjending projects to less than one-third
of their original plan.-. Coiiiiminitii^ MI affected include Little Uock,
Ark.: Faii-bank> ami Juneaii. Ala.-ka; Santa CMnm and Stockton,
Calif.; I?ri«lgi-jioit and Xorwalk, Conn.: Waterloo. Iowa; Cambridge,
^^a^^.: Fliirlihiml Paik, .Mich.: St. I»ui.s. ifo.; Orange and Trenton.
X.J.: Bulfalo, PeeUkill, and White Plains. N.Y.; Cinciiiuati, Ohio;
Ifarrlsbiirg. LamaMei, .MoKei/.-jiort, Phil.idel|>hia, Pittsburgh, and
Siix|iifh.iiia Tii\Mi.-lii]i, P.I.; lhei>bnrg, Tenn.: AVaco. Tex.rand Mil-
waukee, AVi>. Manj oilier .,itii» were forced to cut their projects by
more than half.
    Ma\ niN uiul nt lu-i iiuiiiK-i]>al olli, la].-, \\hoappcarod before the com-
miilei ..iriv iiiiiiiiinmu.- in dephu'.ng the damage done to their renewal
plan> b\ the "nil inning" formula. The.-e ApolceMiien included Mayor
( Vlelire/Xi-. of Cleveland; M a \ o i Poitl.-on, of Tx» Angeles: Mayor I.x»e,
nf Xvi\ Kavi-u; M.i\or D i i w i u i h . of Philadelphia; .\fayor Miriani, of
T>etroit : ami M.i>or Sedita. of HulFalo. They piv.-cntcd the view's of
the. AmrriiMii Municipal A.-M»ciation ai.il (he I'.S. ('onfeiviiiv of
Mii\ot>. wliirh, together, ivj u-.-cnl c.\er i:;,(i(i(i local governments
throiiglinut tlicl'nited States.
    In addition, .statement.- W I M - .-ubmitled b\ Mayor .Vrnida, of Fall
l\i\er. Ma.-,--.; Ma\nr l)"\le, of An-oiiia. Conn.: (lovernor Lawrence,
of IViiii>vK.iuia i fiiiini-l lu.ani of Pilt.-hiirgh ) ; CiilnpIl'olliT Levitt,
                       HOUSING ACT OP 1959                           79

of New York St fe: Mavor Maxwell, of Tulsa. Okla.: Mayor Resnic.
of Holyoke. Mass: Mayor KiiJiell. of Oakland. Cali f.: Mayor IVagner,
of New York City: and Governor "Williams, of Michigan.
  Mayor Celebrezze preheated the ^lutciiient of policy adopted by the
American Municipal Association at its convention in December:
         We protest the establishment of a rationing formula winch
     puts all municipalities on a starvation diet for new capital
     grant resort .itiona ami we urge the Congress to write into law
     a requirement that capital grant reservations, arc to be inadt
     available to municipalities on the basis of applications made
     and indicated willingness to put up the local one-third share
     of net project cost.
         We object vigorously to tin .idministrative order.-? issued by
     the Urban Renewal Administration wh'ch destroy the con-
     cept of local plans locally arrived at anil which require the
     Cutting back of project plans in the interest of economy to the
     point that they offer no assurance that blight will in fact be
     eliminated. Wo urge the Congress to statc~cmphatically that
     the respjiir-ibility for devising workable urban renewal proj-
     ects is a local rcspt Ability not to 1« hamstrung by Pederal
     administrative ivgnlations.
   Mayor Sedita described the effects of rationing upon the plans of
his city of Buffalo sis follows:
         We had filed our applications totaling §18,200,000 for the
     waterfront and Mastcn Park projects in reliance upon the es-
     tablished policy that such applications would l>e honored in
     oruer of their receipt subject to the availability of funds.
     Nevertheless, we and other cities were suddenly confronted
     last August without priorconsultation—with n rigid ration-
     ing formula which would satisfy only a minor fraction of our
     most pressing requirements. Jfn the case of Buffalo, this
     formula limits the earmarking of Federal capital grant,
     funds for our city lo?:J,57fl,ilfl(i per fiscal year. Consequently,
     we havei>ceii forced to shelve our urgently needed waterfront,
     projwt, which offers the l>est hope for revival of the central
     section of our ciiy and for expansion of our real estate fax
     base. And we are able to proceed with planning for our
     Masten Park project only by accepting a reduction to capital
     grant earmarking from §7 million to $2,570,000.
          T judge from a reading of (he President's budget message,
     that the administration intends to continue this permanent
     rationing formula unless Congress legislates to the contrary.
     Tims, wo are con fronted by a rigid restriction on funds which
     in Buffalo would transform a feasible 10- to 12-jear program
     for i be clearance of our slums and the rejuvenation of our city
     into a '•'•••• t<« Ill-year program mil T am confident that the
     members of this committee will recognize that if we are re-
     stricted to this snail's pace in redevelopment and renewal,
     our problems will have multiplied long before the end of any
     "».">• to -lii-yc-ar period. Indeed, there is the real danger that
     the present policy will completely eliminate the possibility of
      fill lire largo-sea Ic renowal projects.

                                         *; J. * 4
                                         -^ I *.
,Sf)                                             HiiI'SINl. ACT OF i H 5 9

   All nf llii'.-r ttiim-M-> ii'Mnpi .Ma\»i> .Ma.xwi-ll and lli^lit-ll. who
did inn s-jici.if> :i liirni-i:. and Minor Ufr-nic. who endorsed S*. .~i7.)-
iir-n-tl an annual aiitin>n/..uii>n of fi'.no luillion fur the next IH yea re.
Tlii-i \\t-iv siinnoni-u ii, t!,i> -land I»\ IMP National Aia-ociiilioii of
llimVnii: ami I!«!ilir\i'liipiiirn! iillirial?". ilie National llou/ni-r Con
fiMviii-i.7 the Amiri. .-in Ii.-iiiiin- of ]'l MHH-I>. the AFL CIO. ami
 OtlllMU
    In iv-jni!ir»- i . i hi.-, ii-.-iiiiin \ . tin- •-•iiiiLiiriti- airivrd t<> an rypiv»iem
 in it> ivpmt iii.il "rriiionii»«i" > muli'.-in.I V. V.M it .-»vm> rlwir thai
 unl>~-« sin- t'iHid>:tii!!:"ii/i'-l in ih'- l-ill an ' •• i iMM'd.i-ithiT "rar 'oiling"
Ii)II>I IK- t-4int inlinl nl x\liiili' plujf. I.~ iln ...-lillir thu.-l' of rilir- M'i'k:iijjt
In niTrr tin- j M ' . ^ i a i n f'ii tin- lii>i tii.n- in- --I In 1 aliamloiu'il or ]»nt nil
tin- -In 'f u n t i l l'uniU:iivav::!lal)!r.
                   TIIK i\.\i.r.M< \i-y UK TIIK ri:.«r« SF.I' \i III
                        iiuiv liill .tut Inn !/.«-ir:;.".n iml!ii.:i .1 \i-ar fm-Ci yi-ar.-. bi-^ii:
iiiny w i t h iln« i-iin.-ni iiMal ' i-ar. It .I!M> pinviik^ that tin- I'lv.-idi-nt
inav iu.-iv:iM- ilit a n - ' ' . - ; .•« all -'.Ji- : 'i .my "in* \t-ar liy sl-'iii luiHiim.
w i t i i i n t h i - i i . t a l !:••« ;r.it!nii ./ ;'-^i, n. S-j.I liillimi. HOV.CMT. in vii-w
of (In- ;it!iiiini>in!iii> . - |-i«|-....ii .'i.i . j)ro^T:iin li-xi-1 of S^."»u iiiillinn a
\i-:ir. ii -i-cin- iinlikfh tti.il th« <!i-. v imiai \ .mihoriu \\onld In- n.-i-il.
'riifii-t'iii-r. fm [n.i. ii. •.ilpuipiiM-.-. t'n .iiiiiiiini wliii-a ihiMoniiii'itti'i'l/ill
aclnally in:ik<-~ :ivail:iiili- i^onl; >:'•."." million.
   IIv .June :M. I!M!n. I'HT- fmv. sTiiii : illli-i- \vi" hs> *t -tli- . : i i l - ' I i -
iili<liT I In- i i i l i i l i n l t r i * l i i l l .   I I < i U f \ i M . t i t c tui.i] of ,ip]>ro\l*d .l|>])lli..
il'ii,-. .iiii ,!,:: tli. it ]ii-ii<n{ \ \ i i l aiiiniiiit lo.iroui.i! SI.l hillion. calctil.iiiMl
as fi>IIo\vs:
.\|>)ili-;ili..i.s..ii him,]. July 1. V.i.\s ..... _         .....                    ___________
l i f i - i M i l . July 1 t" I in: :!1. llir.s _____ ....... __                   .......  _____        •Jlil.lHJO.OOO

          Ti.lal                                                           _                             ->S5, 000.1XM)
                                              July I i»I>i-..::l                               —         17ii.oOO.OoO

                                                                                                      '•111 I. 000,000
                                                                                                     r
rr..ji-liil .iilil. . in! i;,|.li«iti»n> J.U.. 1. l;."!» Junr :<(>. 1!lfi(»                            7'.'(l. IKX).000
          Total ni-fil                                                                               ]. rj|. OOO.IHMI
      I I . . - I ri.,i, !;. i,. ».,| A,lii>iiii*f;.ill>.n ll-ls. SJ1 II.MIHI.IUHI ,,f il.ls |,,MI .,* "nvii'liM or
uiu. ir ..MI. 1.1,1 |.I,--IIII..M> ii,,..,. |.n.j., u .ir. l«-iiig rctiMil ii.-s a n > u l l <n* r,ill»iiI'iK ami
l,i M-.- .l...n|.| I- t_.i-li:,|r.i lii ,,lij iiK-.iv.ir. »l n.i-il
     \i v , I | . | . H , - i l l - r,- ,r, ,.r..;.. I..1 .11 11;>- r.il,- nf SIII.IIIMI.IIIIII a innnlli. 1'rKin I:.-iinv;iI
-ii..I -Aiiu, r.,u..i- ' .,| id,- urn, r.ilioiiin: n.i. IIIII-.IM-,!. Air. Sit IIK r .il«" !>—lilnil III.H I)i<-
r.n. • . • - i r - r , . - , : ; . . l u - ' i r i.ik> n Inl 111,1 n,.ul.l In, r,-.-»-- tin- M.I Ml |,<n i»i.,l

      I'liii'. \M- , i i f fan-d u i i l i tin- pnopi-rt, under the rmimiiiU'O bill, of
. n i n i a ^ ,ii .lulu- .'>(). I Milt i. \\ith a liai'klo.i; of i?|liil million in appli'-a-
jii... .Hi limit' lh.HI the i-ntirc ainonni (hat will IM> niadi* iuailahh* our
iiii; t i n - fn]]i*i\iii^ II.-.,il U'.u. Proji-tl.s.-uliinilli-il t l i f n v f t t T miiM lie
on tin- - h i l f f<n ,\ \i-.u hi-foiv fnnd.s w i l l IK- axailal.le. And lln* tinn.-
jtt'imd mil ^ti.iddx It ii^llii-n. lu-i-aiiM' the rule of £|SO million a m \ear
m nt'u ,i|i|ili. aiion.- u l i i i l i i'.\|Kv.riciu't' intlidli'.-. xxill iin ivii.-r xxill
»-.\< red i In- i.iir nf s::."iii million a \eai al xvhiili new fnnd> heroine
axailalile.
     It .- "in v ii vx lh.il t i n - proyre.st. of nrliun renexxal .should noi !K>
lliii.- id.i ill' 11. Slim I <if .1 .-Imu ih^of jrivat iici-e.-Ml\, whiili \\obuliove
In-, ii.it li,<cii hi.i.li. .-.Iniiis ilnil i,iii In-ili-aivd in il*) vi-ai-s .should not
                          HOUSING    .\CT   OF I£»59                        SI

 be suffered in or :JO years inio (lie future. The farior of cost is a
••ritical one. loo. with costs of land risin«r fa*l: the way to irct the
 most for the money is I«y expeditious action. Nor >liniild the concept
of tin- comprehensive approach to planning IK de--l roved. 'J'he Fed-
eral (rovensment in tJie I lousing Art of I'.Ti-l called upon the cities to
develop "workable programs." When they have done su. and are
reaily to pay their share, the Federal (internment should he prepared
to keep its ?Iiare of the hariTttin. Coiimiiiiiities that Iiave lx.icii en-
••onnijrerl ^Iiould not now be discouraged.
   Tin- ?eope of tlie total nrli.-m ix-iiewsil problem >liinil«l \>c inea.siircd
ami a lonjr-nin'ie plan de'.elojH.-d that wotthl point the way to tin-
solution of the problem within one ^iteration. There is need for a
linn. continuii!|r cniiiiiiitciciit i>f r ilie Federal (ioveriniiem to urban
renewal like the Federal commitment to the Interstate Highway
System. -=o thai communities can-proceed liwlilv and with confidence.
In themean>iino. toas5nre>hat m< niciilum is not !ost.aniliorix;uion of
lip to :?iiOii million a ycjir for the next tex-enil years appi-ai-s wholly
comniciisunite with the need and with the importance of the objective.
   .\ccorrlingly. we supported in commitice an amendmeni. wbn-h was
tlcfcated fl to li, to niise the anthorixation lt> ^-l.'iO million a year for
•t veal's, with a proviso that the amount uouM he increa>ed automati-
<-;iIly to S(ji"K3 million in any year, within the £l.K billion total, if proj-
ect> exceeding ihef-130 million allowilion and \\ortliy of approval were
submitted. The Sl.S billion in our amendment was actually :>:;i)i) mil-
lion Ic.-s than the s-2.1 billion in the committee bill, but it \vonld IK*
available sooner. It would thus permit urban renewal tojro full >peed
ahead al this limp when so many cities are just hc^fiiiiiin^r to iret their
])ro^n-aiiis underway.
    It should he noted thai (he bndjret for the ne.\l fiscal year and the
year after that will not be aliened at all, since the H.UTVH! between
the authorization and the expendilure i* normally :i to "years.
   The national interest, in rlpsriny our urban .shims is as gruni now
as when the ITousinji .\cl of IfMO was passed. The urban renewal
title of the pemlinir bill dovs not mea.-iire up to that national interest.
   Jt should be made to measure up before it is approved.
                                               Senator .Tosi:i-ir S. CI.AKK.
                                               Senator ]\\vi. U. D<n:oi..\s.
                                               Senator JACOII K. .1.\vrrs.
                                               Senator "\Vu.i.i.\jr
 S2                                             HOUSING ACT OK 1959

  Till' I capital ijranl contract mith»ri:nhon- Approraiuctiuns Sept. S-fiec. SI, IMS.
                   Jor localities with applications jicniliny Sept. S, /i/.iS

                                                                                             Formula
                                 :?!at>- nn-l locality              __ lirivline              llnili              Si-IH.S-
                                                                                                                  IJ.X3I
                                                                                                                   Iffi-,-
                                                                                        •
        Total                                                       «C|^— ,-1                                    JICO. 000.220
 Alabama:
                                                                       3. 633. 000           11.737. ip             1. 711. COO
                                                                                                                       100.000
      K~Tifl?M                                                               37ft 1C7            '.'31179              J70.I67
                                                                                                 '72T..SIC              K.OOO
 Alaska: _
                                                                       l.KO.OOO                                       300. COO
     Jttnmu                                                                                      > 107!fi7fi
                                                                                             • i. u.\3>;
 Atknitsrvv
    Junction *?'T-
    Stntnpj
                                                                             153. OM
                                                                       -'•w'lMO
                                                                                              » 317.991
                                                                                            «I.3r,|.57o         - "'m-gfi
 California:
     AXil^ ^                                                           I. ITS. 201               MW.511
                                                                       I.K2.-I7A                 r-IUA,9II
                                                                        '9SlIhW                  >.v«.e&s
      RluVU.,                                                            13S.I«                                       il( 072

     **in Jttf*                                                       2.MS!274              « 1.24iSM              i.eOLca;
     S -111.* CIoT.i                                                  "(O7 SiO                •> 51 1. 701
                                                                        333. ftS

     ^annyr* \f*
                                                                      2.0I&3U1              1
                                                                                                 i.'cci.;ii
                                                                                                 1
                                                                                                     179. 100
                                                                                                                   i.o2n~.v)
                                                                                                                      •ITl'. 1O)
     V*icavlll*«                                                        'sail 111'               '313.919
     Wwlhn.l.                                                          I.U1I.2SI
                                                                         923.711                2,n7i;!sc         • i.iss/ns
Connecticut"
                                                                                                 'I3S.75I            I3J.7J1
     RrjConPalK.. -_
     ItrMr^-irt-. ....
     • >anT*iirv «.-^
                                                —                                                'ftll'li-.H
                                                                                                                     S.'0,77i
                                                                        Slll-lfl            1
                                                                                                                     S37.40I
  Vi ••TftiJJ;                                                        M5S.M2                    1. lt"<i.,XU       !,KO,000
  \\"ln-l<*r                                                            I'.II.lM                 '511 Till
DUrlcl i.f CulumM:i.                                                 27 II 1 6/1                2.W2.3SS         •SiM».9lX)
                                                                                                1
                                                                         110 000                   IOC..9II          2S7.000
                                                                                                '•ir.1.371           100.0)0
     OnMin                                                                                      ' 179. luO           2s',.3K
                                                                         Ml! WO                 '3M.9I9              111.000
                                                                        •mow                                         100.000
                                                                                                '511.' 701
                                                                         192. OUO               >35J.Jl|9             •x.;boo
ilUn-.u
    Alton -
                                                                         IT?' two              'boi'.sw              iriooo
                                                                     lr".,Ii.v>,9y|          io.rn.tita            % 797. t'iS
                                                                      3,0(M).(]Ol)          • I.W.TM               l,1f.S.73ti
                                                                        BOO) in
In-llin 4-
                                                                        ff
    MVlia« >ic»                                                       2 $a, ins
                                                                                                                   I.12-:.2(X1
Irtwu, \V t [f rl-Mi .., .„.                                                                                          Old. 179
                                                                        IUI..S7I            • l.tffj' I9fi            331. 1M
Mnry]:in-l, !(<i]lt:n«*ro ....,            *......           «.,.

    C*.m».*rt>|/i*                                                                          ' K-v.l. i.'.i         I, I',7,..V
    rii.i^-i                                                            233.MI I
    KiMi'iir*                                                        ^.•111.577 1
    !.«.«- !I
MMit/.m
    H.-.tti-! It-.i.l.l-   ...                                          717.IM              •2.IV.!ir.v,            'i,7ii[71t
    \Ill x| i "T* il
    I'»~l Illlftilt                                                                                                   SI.COI
                                                                                                1
                                                                                                    K!n| IU1
    U.i\n-'                                                             ITsliiT?-!                                   ISsI 1»S
                                                                     l.lll.-'.'Vi 1
   Sec footnote! »t tnd of Ublt.

                                                         •* \
                                                         f~> J,
                                             HOUSING ACT OF 19SO                                                          S3

 Titl'. I capital front contract aulhorizitian   Approval actions St.pl. S—Dcc. SI, li'HS.
            for localities vith applications ptnnin'j Sfjit. .5. Ii>5S- Continued


                                                                                        i     FonncU          actions
                                  r aa-I loolitr                                                              Sff.t.S-
                                                                                                              Drt-.31.
                                                                                                               IKS'

 Vlanwta:
                                                                           J3S».wo •        •J1.3S3.SW
        Mfanrj;«Iis..                                                                         Z.-I1(,MS
                                                                           '7».'3JS 1         I.C7J.S37
 Mbs-cri:
        St I»UtS.._ .__„      .                                                                ICv&ttl
                                                                            C$7.13! 1                             C$7.13!
        L*. Vrcaf        „         _.                                                           » 74 1.375        *77.«0
        n«i'.... . „_                                                    I.GO.K6
JCew HaiK-jbc*:          rMferaomb.                                         Zt.SfA                                 21.237
New JtnfV.
   AtUnitr Cit>-                                           -—.     '     I.73I.7-.C                               KO.S3S
                                                                                             •J.llO.iil
       IIaek<ns»cJ:__._.,                                                   is£i«              'SH.W1             110.313
       Jerwy Ci;y                                                                             1.1^5. 7>7          JS0.1M
       MtiiKh»n      _...                                                  120.S21             MTJ.IOO            107. -191
                                                                           .'•35. CCO         2.1SS.S37           SK.OOO

        r^«iic                                                          •j.'-jwlzo             J571.00J
        I'rfjh Ar3N>y._.,                                                  r3!l7:-3
        Tn&xion
        Trfnlva           „.          ._.-_.___-
                                                   _
                                                           „
                                                            _ _
                                                                  .;    7.3C».7W
                                                                           -Ilr".-ll2
                                                                                             «i.'37.ew                .
                                                                                ,              1
                                                                                                                  37.-417
    \Vayw Township"™       ""                                           1. 11'.'. CO)              SH. 701       •I3I.SI3
N'eif Yort
    11 lailaailoa.™ ...„„.
    Uulhl.)                                                            is.2n--.ooa            ZSTISOO          i'sfoisco
    Ha«ttar,n Hul-^n                                                      W3.33!
                                                                          KX.7K
       New YI-J                                                         2.1W.SI2             15. ItXft")     ' II.&I2..112
                                                                          •I7J.OOO                                475. POO
                                                                          700.000              '•wKcjs            ^oc>.coo
    r«ls!:»l                                                            1.SS5.000                                 £0.000
    Whirel-Mns
    Y'.nt»r<             ..                                                                 « l!s!>i.'j!6
N'orth Carolina.
    Ch.vl-'.ttc                                                         i.ooo.non                              1.000.000
    FaywitviIIe                                                           £S7.3t!                                270.000
    i::.IfL-h .                                                         1,000. ft\]
Ohl.
       Clndnmtl. ..                                                                                            I..W1.500
       Clevcbn-l  .                                                                          a.iffi.ti'i       3. «7>i.32S
                                                                        •I.AXi.OOU          «?.77i),7SI        2.7-2.000
O.veon-                       ""             "         "
    En«n«                                                               I.7I1.6SI)                               022, 7M
                                                                          7S1.732
                                                                          I«.2i5
Ptunsylvanti-
   All--ntuwii.                                                         I r'77 T*           • i. n.-.ai.-,     I.3M, 100
                                                                         'JBASSB                                      .
       F.im-n..                                                                                                  2SJ..TB
                                                                                               . .             1.2I7.CS1
       I»inr.LNi*-r._.                                                 3.7I7..1I*             • UI3, 1.M
               1                                                       f..35ili.iK«>                   '
       bnrity ""!                                                                             > <•.'«. ILO        .'.7.7S5
       rinw- \itit                                                                            ARIA. Adi       5.3K7IS
       ru-^'ntfl'..                                                    lr'...V.!..'a          3.7S7.UU        3.IS7.321
                                                                                                 . .            .'^,070
                                                                       y.iaf.'na            « I. 'M.7U        l,»I,Wi
   Scrunt-n                                                                                 • i.r.ii-.,7K       BII.S71
                                                                                              MW.OU                  .
                                                                                                                •127. (XVI



                                                                                                                 iW.SOfl
                                                                                              MW.W1           ii .Ml, 000
                                                                                              '.-(yi.77'       > 116. HV.
   Mnrr^lf.^ii...                        .
   VT.rt.jlv..
  Sec footnote* nt end of tnble.
   14                                          HOUSING ACL' OF 10SO

   'till: I dijuttl ijrant ciHtiracl anth" uatiun Appimnl nrlionx Xi.pt. S D e e . .i/. l:i.)$.
             fur lociililtix with upiilirntini-js prn'Unij Xtjil. .7, IHnS Continued

                                                                                                                                        .
                                                                                       Applications               Pnrniuli               ri-ll'.it.
                                        I-| locality                                    \* \v\\\i; ,               llmll           .     £r|>:. S-




      Ory-iiirny..                                                                 i        *„                      ,,, 2 j f B ]            SI AIM
      MriwI.-.                                                                     ;          ITI.'iVJf              ''lT!','lti '             I If-. ITS
    Sail AlK'illi'i                                                                       :; i.^"..i.~jt            z ;**.*'"x              l.K'7. 135
    U'ac ».                                                                               3. •.'-••••. f.Kl       ' 1 'Til.tV'41            1. K!. ISil
    Wink                                                                                     •Vli. i'it             * .l3Tf.!*-|              Xl't 7!*'i
Vinn'.nt. Hiirlinzt'.n .                                                                     i«i.l«i                 JSSI.IK'                 IW.OOO
Vire ni r
    Clurl'^ti^villr                                                                       I.|i:>..iui               'Ti'.l.''l'i              Tr.i.jtrt-
    ,<.ntliN'.rr.,lk.l.                                                                     ."'.1.3**               ' IT!'. H"                47: HO
                                                                                   :
     T win i                                                                              l.nlT.Wll , <l..siav>t                            l.ft-T..-i<)
     Viinviivir                                                                    I      l.ltn.Krii | ' l.oP?. l^l                         l.li'.'.IS!
\V»-^t Virgin! r \Vlii'rlin2                                                 ...   I         310.X. '               '&S7.III                 J ',7.1.371
W^MII^III .M.Hv.nlki-.-                                                                  I('.Sti'. "Cfll           2.TlM,l''.(t         B 13. (in. 1(10
i'u-Tlvltii»                                                                             r..i3i.i>;t                i.r.ui.oji             5
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 n.rti-.isr> in r\i>tllif; pnilrcl-*'/ iN-.uliir,: mi .-M-J .t. 5.
 pi
                                                                     Fur iii.in.% cil«.-. inuri :hali 1 .ipj>lU.itlol. «asr<ii'll"K
  n *i t»t. 5,
                                                           " iliLlii.lr.iH.illii.in.l- jnpronil '-n tht < II Ion III
                                                                                                                                       iVonl'Snnc
          . .
   ' i.linit for 3 yc.ir.-.
   1
     l.l-nlt for -i y.-jrs.
   • Iti iirnt-ni- Jinounl,. ,i|>|.ruvcil .u-. men <•> m rit-tins projcilco. im-lu line .in ml- j|>|ir»tc<I inuler
        .                                  .
   ' 11,-Prt I.- Ir-iiisSi-r ofn-rri.iii'JiL- m.i'lr prior to fi-eil n-.ir I'J'fi Irtno-ii pr >,<ii-. .1- .isnvl'ln ux-il yrar
    llrllivl.- MI tniii>lir n              tutnin «f $.>iu.icKi inailc |iru>r t. fi-c.xl jr.i                      lu Krnn.il i1
rrnr».il iiLiiiiuiii; uivi.iti            'iwni Mr tin- ~.nm .in-a. plu^ \*t, iu*TCM>i                              'VT^ In (lu
MMj«-( If ftinniila limn.
  1
      Ni» ^"Ik I ll.\ h.i'1 Kvn ~ub;rrt l".i liuiil.ilii>.i of nut to r. \u-r-l 1" l                           irt.».ill»!<l. .illlllorl<.ill>ill frc
t'.<o> nrmr l» t-rCUHIlliKul fl-f.il >i.ir .illtl v\.i> tllrrrli're rntltlr*! to II.IM'                       illu!i> up lulhU .llliolint Con
M-Irn I.
   ' In jtn'-riii^ rrvi^iui lu .uiiuuiit ul rt-tr taii<>n rri|in->tri| «mzni.ill> I I I > I I M I > anil plinnlnp ijipliontton
li-ii HUB «n Sr|>l. 5
   " Kr'lo"i> ir.iiis((r i>l ii-M-rvauikii ni i>it iirtur tu fi-ral ^r.u lU.pi" fur riMiiii: i!i iiir.il lu-kMfirl.ixxl rrnc;\Til
j'lamitnp filtration tdiirl> in nnr\\.il |*rn;rrt a|>H<< IM| for planntrik' In llx- iiri):hl^>rh(H. I .ir«a.
   •• itrfl't-ts actual ...... lilt <>( lr-<T v.ill'.TI rr<|i»Mi<i in a|ilillr-.lllo!i |- '"IllIK <-ii .-r|il. !..           \m»UIll o($H'i.JSt
••lioMn nn-Irr •• Xppllniii.iiix iuwllni;" n-tlrrl-i a rrphrtluc error.
   " In-Ill rUit.ii.si, r,,ii.-.-'-n. ill.. TI ii. .!•!,• I.IK, t luf.-r.i. >i-..r l'j&>lia i \Miiii. ir!.;ii. n-...-u.il |.r>joct loktiicrnl
iirl;)iN.r>iiKi-! fi-n. ival iilannlnc n|>rnition :ipi>nHr.l for Inc suinr arra.
   •• Ui llrrLs KII u.u.^IiT of n-rr< .IU..IL, .i..p|c |.n ' to fl-ml ><-ar IM'J in .unoiin' c,{$I,WI.'Wl )x-H'.«-n pro]-
rcl>, •>.- :i^r"-.l in ll>cui 11 ar ia:->, plus i'» urn rc^TiMimi- .ipproi< >l in tin- .i.noin.l <il 5l^,,tirt -nl>!i-cl t.)
fonmili limit.
                 iiii^lnR ami llomr Klnalux- .\gtncf, Url^nn lid i\ I A.lr.ilnL-.tr.llt.;n
                         L VIEWS OF AIR. BENNETT
    Xo one can question rhe need lor sound legislation in the field of
  housing. Bur flic proposed Housing Act of 1959 as amended and
  reported by the committee, goos beyond the realm of soundness in
  a number erf key provisions.
    The proposed b?d would authorize the expenditure by the Federal
  Govcrnn cut of $2.025 billion. This is §1.275 billion more than the
  amount requested in the administration's budget—a request which
  Avas made after carefully weighing, the Nations housing needs
• against the need for a balanced budget.
                      A DEFICIT-CHEATING    HILL

   The increased burden on the budget for fiscal j?ear 10CO resulting
from adoption of S. 57 rather than the administration bill has been
estimated at benvee:i 230 and 3-1-1 million dollars. This would more
tl an ear up 1 •> projected $70 million surplus for next }?ear, and
v>uld starr us on the road to :i deficit which the President has so
cc.-rcctly renounced.
   An ovcrridinir national concern now and during the years aho:ul
is tho battle against inflation. That battle cannot be won if we
pour unneeded billioi '-ito programs whose benefits will be- partially
offset by a resultant u"Cieasc in the value of the dollar.
   Except for the ni-od for Ihe emergency legislation to continue three
existing programs, as recor.imendcd by the administration, this is
not a period"of crisis for housing. Thus there would appear to be
little justification for the remarkably rapid manner in which the
wid-- ranging housing bill has been pushed through the committee
and oiuoTlho floor of the Scnati>. At the beginning of this tension
of Congress, we devoted several days of discussion to, the cc:;cept
that the Senate is ^deliberative body. Indeed, the Scnnlc ultimately
veiled 77- 20 in favor of 11m great concept. Now, a feu* weeks later,
tin* housing bill is being rushed to flu floor ar..l Members of the
Senate are told that (hey will be faced with night sessions until (.lie
bill is speeded on to Ihe lionsc.
   The housing bill Inis been hurried through commirleo in less than
2 weoks total time-, including hearings and markup of the bill. This
must be a record N'o doubt. HIP Senate leadership will point with
pride to such speed. However, flic goal of the Sonale should be more
the formulation of sound housing legislation and less the setting of
ne\v speed records.
   There are several provisions of the reported bill which are unsound
and demand further study. The Senate should avoid precipitate
action rtiul adopt the provisions of Senate Joint Resolution 05, which
would meet all urgent needs in the FITA mortgage insurance program,
tho urban renewal program, and the college, housing program. S<ich
                                                              85
86                        HOUSING ACT OE 1959

a step would permit the deliberation and careful study which should
bo given to the several objectionable, provisions contained in S. 57.
                               TJKIIAX KKXKWAL

Amount of Federal grants authorized
    First among the provisions which require more careful analyses is
 that dealing wit h urban renewal.
    Approximately three-fourths of the funds authorized by the bill
 arc found in the proposed fi-yoar program of $2.1 bill ; on in Federal
grants for urban renewal. The?e fuiids could be t-pininitlc-'T at tw-
rate of So.">0 million a year, with discretionary autli- ritv 10 increase
 this amount each year by an additional ftl.10 million. The net effect
of this discretionary authority is to commit the Federal Government
 to a sr>00 million a year program for mUiii renewal. Once this
annual rate it- established as a ttaii'lanl. it is doubtful that the Con-
gress would be able to resist the pressure of those groups now advo-
cating a largerprogram.
    In contrast, the administration, recognizing the pressing demand*
upon the Treasury as well as what the Stales and local communities
can effectively handle, recommended a more realistic program of
Si.-IS billion over the ne.\t G years (including $100 million for the
current li>calyear).
Xii rt ilnf-tinn ir, Fid< r<rf share
    The committee also rejected the rccommendat ion for :i gradual redue-
Imn of the Federal share of the co»t of the urban renewal projects
aiul an increase in the grants by the Stale and local-irovernments.
1'ndcr existing law. the Federal Go\urmnent pays, tv/p thirds of the
net project c<*t. and the lucality must provide the other third in the
 form of ca.-h or in>m-ash grant.- in-aid, Mich as land donation and the
const ruction of public facilities. The administration proposed that
the Federal GuviTiiniein"s share \>v reduced to fiO percent, on July 1,
 Ilifiii: .".:. percent on Juh 1, 1IH51: and ."»0 perront on July 1. U»V2, with
the local .-hare bi'it>g Jncreased accordingly up to a matching 50
percent.              -                                - . - .- -. " : • —~
    Tliis ]iro]>osal would jiermit the Federal grants to he spread among
a larger number of projects ii. ;> larger .,umber of cities than would
lie possible undei the present foiinula. It would ])roduce greater
partu ipiition and rc.-jniii.-ibililY on the |)art of the States and local
coiiinuimtic:. by rtN|iiiring thein to bear ;• larger share of the financial
burden of prosivts having primary kval boiii-lit. No one knows the
total amount th.:t will In- niress.iry to eliminate all the slums in o .r
cilios, but :t ob\ioii.-«ly v.ould be a t-lai.goringsum and will necessitate
greater linain-ial participation by the Stall and local governments.
 It is not unreasonable for (he local communities to share equally in
the cost, because the.se urban renewal projects result indirect financial
benefits to the>e communities. Cities recenc :in increased (ax base of
great and imiiu-diale linain ial value. In tin- lung run, many eilies
may n-cei'-e siulii-icnt im-re.iM-d ta.xe.s a.-» a result of redevelopment and
nnprovi'iiii-i't in urban renewal areas 10 n-.pav all of their conlribuliou.
    At jitinu- when the Feilenil Governmert is faced with large di-licils,
tlin administration lias jjro]n. -d a- reasonable approacli to our urban
            l probleins.




                                                                                  I
                         HOUSING ACT OF 1959                             .87

                             1'URUC IIOT7SI.VG

   There are two aspects ofthe public housing section of the bill which
nre most unfortunate.                          "~
Middle income lioming with local control
   The bill contains a j-erion- contradiction in policy on public housing.
The committee nropej-ly rejected language in S. ~>1 which would have
vested responsibility in local antJiorities for the preparation of
budgets and hi the" auditing of accounts. But t1 211 the committee
uddcd a specific-provision removing the Public Housing Administra-
tor's power of prior approval on rental schedules and liiuvne limita-
tions. (This provision would provide for Federal statutory ceilings,
but would permit local determination of the rents and-income limita-
tions.) This, coupled with the m_"ortunate provision which would
permit overincome tenants to occupy their units indefinitely, could
lead to abuses not in keeping with the philosophy of low-rent liousing
for low-income Juinilics.
   But the bill takes a further step in the direction of moving from
aid to the low-income group toward' a middle-income program by
liberalizing the statutory formula for computing income limitations
for admission ami continued occupancy. The net result of these
provisions would permit local housing agencies that to desire to sub-
stantially convp.ii this program into a federally subsidized middle-
income nrogr.im, competitive with private enterprise. I am oppo.*d
to these notions.
^n in lier of ihtif.
    With ivgard to the authorization of additional public housing units,
rhi- Pre^-denr"- recommendation, calling for no new ant horizat ions for
public iinit< during the iiext fiscal year, has been intei prcted by some.
»•* me-ining a complete stopping of the- public hoiking prugnun. This
misinterpretation by some members of the committee, and others,
apparently gave inspiration to the demand for tin* tremendous au-
thorizations we find in the bill 3,"i,000 new units, plus the extension
of an estimated (N<HIII units which will expire- July 1 of this year, plus
flit- reviving of ln.onO units \\liifh had expned under the 1J>;">(5 act.
This would nu-an a total of 51.000 new nn; s. As J review the facts
nn the -taiuie.^ of the public lumping prognun, I ?ee absolutely no need
for thi-J autlinri/ation. In the Iii>i t)lai-e. there were not sufficient
boi.a fide a])]ilicatio:is to use up the ]o,(nii) unit.-, referred to above,
whHi weiv -illowed to expire under the 10.M! act. If the demand were
there. lbc>e units would bavo been used.
    Secondly, ni the present time there are approximately SII,I>DO public
housing unit> aullmrized. but not yet umlcr continet. Fntil these,
pin.- the Sl.Tii!) (a.- of January 1, I!>.V.t) under contract, bin noi yet
-tailed, are ab-jirln-d. it would be .siipi-Hluou.- toaHlhorixe additicnal
unii<. Tt:ilhrr. as Jntlirated earlier. w t . >li<.iild make a inf>re careful
-tiidy of our needs, :>nd then gear our li-gMation accordingly.
    So rathiT (ban nu-elii-ga d.-moii^trated need, -uch nn authorization
is merely another ^ti-p down the road to ma»ive Fe<lenil inti-rveiitioii
ami inflation.
    It should be noted (bat the authorizations for public hoii-iug aif
not iiu-lnded iu the $-1025 billion total cost noted above.
SS                              HOrsiNC; -V~T OF I H 5 9




    I :i! i • ppo-vil m i in- MI«« iiiillmii inrrva.-rd authori/aliim «••: ••<i
h(Hi>:ii: r IIKIII.-. iiiit«'lii<-i \ \ n l i ihr iliu-i-J In-in aiithorixatitui nf
iniHin:i f:.n-l:iy <<iiii :uul iv'.iif<i fctr'Iilio. Il xviiiihl hax-e IHTII
apprupnat*' lo •_ .Jit ilii- >~ «"• itiiilinn rviiinv-n'd hy tin- :idiniiii~ira?i<>:t.
iin-|iiiiiii<r tin- >'2~' liiilliiu. fur "ijllii-r ciilir.-iiiiinal farililio" :iinl :il
lnUfil linn* In ron-iilfl- llu- priipu.-vaU fur oilli'iir hoil>ill«r :III<I nliior
farilifii^- wliii-h tin- .•iiliiiiiii^lialiiiii rxprct.-. to i)i:iki- al a la'i-r ilati1.
"I'n :iiiili»ri/c t i i i > iiiaju: __ rn^nun nil limit • «ni>nU i n:iy I In- •••mijilrX
       ls nu o\i>r:i!l .Kwii-nil iu»Ii<-\ tunaitl cdnratior, is a lia»1v and
                          - '



    Oin- ini|)c)ri;in; uliji-i tiuii in tin- roiiiiiiitifi- hill i> (lic> fart thai I he
>.">^."i mill i< HI (i> Itt-.-fn-iii iltiiiiiir I In- juvr-eiit li.-cal \v:ir for college hoii:?-
iiii; an. I tin- >.*><"' iiitlliuii ;iiitimri/.ci! fur (lirvri VA loans repivsiriu a
"diivi-t jiipi'l'ia-" in i In- Tiva.-niA. TIii> hvjia»in^ of the reirular ap-
propriaUi)ii> prow.-? i> aii inx.i.-ii.-it nf the pri'ro«raiive <if tlw Appro-

                         1'iTIIKK nr.IIi'iJiiXAKI.K I'KirtlSION'S

   In :iihli:i<>u in tin .-i- iiiajnf niu\ i>>un.-. ilu-iv aiv.-cxenil nilu-ra^po'is
nf tin- bill uiiii-Ii ilc-iTxi- iiniii- • .irofiil ^:ll(K than the i]iii<-k ••onnninec-
xvork permit U-<r.
/•".V.I/. [ \iu da] in^i^fiinff,             ;
   Tin- Iiill ivin-tiiiiU-r fi>i J Xf.ir> tin- par ]»mvha.-e iv<jniriMiii-nt for
FNMA s-iiii-ial a^i-iamv. 'J*hi> i> a iniitflki-. The jiro^rani is pnw-
eiillx npi-raiiiiy -;iti-fa< v liii ih ami t IK- par pun ha.-n nNjiiiivirn'm xx-oul(l
       -i—- aiih - ili.liiiili- C.iMMiiiiu-nt liiiaiirinir for private iiiiii

   AiiuiliiM- nlijf-iiniiaMi' iVatuiv of ilu- Iiill ivijiiiu's the FITA to
ai-<|iiirr ilrf.iiih'-il liiitin- iiiuiic-im-r- iti ivinrii fur ilfl>i'iiturc>. Tliis is
iiniirrc-^arx fur I hi- iitnii'i linn t»f ninrt^a^iit .-" iiiti'i'i'Ms in evei:i of <lo-
 fauli ami ixniiM M.-nit in il«- tliii.ipini; of iiinri<fn^es on the Federal
(inx f i n , MI-HI in IIH-I- I.IM-. x x i i h aihU-d .iiliiiinUlrntiri' hunli-iis and
••xpt •mlitiiro.-.
lit It'tiHt lii'i n,liiln fi 111 -r'll MttJuiriZ'li lOlix
    Ami linallv tin- Iiill x\ill afloxx ;i reirom-fivi- credit for local urhnn
rfiirn.il iiiipiuvi-iiifiit.-. c»iuph>tfil up to ;> xenrs prior to a lor., and
»rani rniitiiii-i. Tlii-M- xxuiild i-ii:inJ loward the local share of one-
tliinl uf tin- nor projn-t «(i-t. Thi* proxi.Mdi. xxoiild result in major
xxiiiilfall> ri> lurai «iiiniiiii:iitii-^. It xxo'ihl exlo:ul jji.int in-nitl credit
to pniji'<-t> \\liirh xxi-iv liiiilt uithont rejpnil t«i (he iirlmn renexval
(il)jc. ti\t--. It >hniihl lu> luiu-iiili'd to %-oiiliue >i..-h eli^ihilitv ^ns in the
            iniiioii hill n> ] • ijecf- Joc..vd '> an .t'l-a ixhii-h 'ins I't-on
             uiidi-r liu'i-'iiniiiiinity roiicn.il plan authority.




                                                              i
                          HOfSlXG ACT UF l->:,9                              S9

                     K\Vn|:.\i;i.E .\SrK«T> "K TIIK   Kll.l.

    T'ie hill does make sonic improvement:? in lioii.-in«r legislation. The
increase in the FIIA general mort^.i^c insurance authorization to ?;"»
billion in tlie pi-esent and the next fiscal year is a step in the riirhl
direction. However. :i higher ceilinir. or ;i i-eiiii)V:i] (.' tlie limitation
would Ix> better. 'I'llis is a self-supporting pixi^iinu which involve?
abrohitely no drain on tlie Treasury, and represents a lic-ulthy type of
Governiiient-private enterprise cooperation. This j> a pro^rnim com-
pletely in ki'epi'.iir with a philosophy of free enterprise v.-hli (tovern-
inent coopenition.
    The interest -rate ceilings on rcjrular n-iital housing. «-ooperatives.
and iniliuiry lionsin-r are rai>ed in the pivsi-nt bill to make them com-
petitive in the open market. This is a proper move. Thoiijrh there
 i.ill lie a theoretical i-eilinir of •> percent for each of the programs,
the actual ceilinjrs ivill be raised to it percent on sales-U pe eoopeivtives
ami ii1;. pfiivent on reirular rental lion.-in;r. management-type cooj>-
enitives. :uiil militar/ housing. This will enable ihe.-e programs to
I'ompete for fund- without" the need lor special :«.-.-istaiice expenditures
by the Federal Government:.
   The increase "MI the dollar limit for inortirajre.- purchased under the
FX.M.V sefond:iry market opunitions to $:ib.fltiO. and «ivin«r the asso-
ciation <liserc-tion in li.xinjr purcha.-e price.-, fees, and charire.s are <food
provisions.
    There ait- many other desirable features i.f this bill. However, it
is my view that tJie major en»>rs in the M-I lions f have noted above
make the bill in it's present fnrm unatveptahle.
    Theivfon-, I recommend the adoption of Joinr JJesolntion (!."» to
inc-et the urgent needs, and defer S. ~>7 for more careful deliberation.
                                    (Signed) WAU.ACK I". UE.VXETT.
                                                        /7.X. Senator, L'hih.

                                      O

				
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