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Given By
U. S^ SUPT OV OOCUMKNTS
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POST-WAR ECONOMIC POLICY AND PLANNING
0.<-
HEARINGS
BEFORE THE
SUBCOMMITTEE ON HOUSING AND UKBAN
^ KEDEYELOPMENT OF THE
" SPECIAL COMMITTEE ON POST-WAR ECONOMIC
POLICY AND PLANNING
UNITED^STATES SENATE
SEVENTY-NINTH CONGRESS
FIRST SESSION
PURSUANT TO
S. Res. 102
(78th Congress)
A RESOLUTION CREATING A SPECIAL COMMITTEE
ON POST-WAR ECONOMIC POLICY
AND PLANNING
PART 9
HOUSING AND URBAN REDEVELOPMENT
JANVARY 12, 1945
Printed for the use of the Special Committee on Post- War
Economic Policy and Planning
PUBLIC
<^HAjj^
UNITED STATES
GOVERNMENT PRINTING OFFICE
91188 WASHINGTON : 1945
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SPECIAL COMMITTEE OX POST-WAR ECONOMIC POLICY AND
PLANNING
WALTER F. GEORGE, Georgia, Chairman
ALBEX W. BARKLEY, Kentucky ARTHUR H. VANDENBERG, ^richigan
CARL HAYDEN, Arizona WARREN R. AUSTIN, Vermont
JOSEPH C. O'MAHONEY, Wyoming ROBERT A. TAFT. Ohio
CLAUDE PEPPER, Florida ALBERT W. HAWKES, New Jersey
SCOTT W. LUCAS, Illinois
Meyer Jacobstein, Director
Subcommittee on Housing and Urban Redevelopment
ROBERT A. TAFT, Chairman
DENNIS CHAVEZ, New Mexico ROBERT M. LA FOLLETTE, Jr., Wisconsin
ALLEN J. ELLENDER, Louisiana GEORGE L. RADCLIFFE, Maryland
C. DOUGLASS BUCK, Delaware ROBERT F. WAGNER, New York
Note. — There will appear in the final volume an index bj^ subject matter
covering the entire series of hearings.
CONTENTS
Statement of — Page
Mott, Seward H., director, Urban Land Institute 1593
.Bettman, Alfred, chairman, the American of Planners, Cincinnati,
Ohio 1604
III
POST-WAR ECONOMIC POLICY AND PLANNING
FRIDAY, JANUARY 12, 1945
United States Senate,
Subcommittee on Housing and
Urban Redevelopment of the
Special Committee on
Post-War Economic Policy and Planning,
Washington, D. C.
The subcommittee met, pursuant to adjouniment, at 10:30 a. m.,
in room 301, Senate Ollice Building, Senator Robert A. Taft (chair-
man), presiding.
Present: Senators Taft (chairman), Ellender, La Follette, and
Buck.
Senator Taft. The committee will come to order,
Mr. Mott, representing the Urban Land Institute, will be the first
witness.
STATEMENT OF SEWARD H. MOTT, DIRECTOR, URBAN LAND
INSTITUTE
Mr. Mott. Mr. Chairman and members of the committee, my
name is Seward H. Mott. I am director of the Urban Land Institute,
an independent organization working in the field of city planning and
land development. It was estabhshed to inaugurate new approaches
to the problems of urban planning and land use, to act as a clearing-
house and stimulate broad public interest in city planning aflairs.
The Urban Land Institute has a membership of over 500. Although
larg.'ly composed of men in the building and real-estate profession,
many members as well as trustees ai'c active in other businesses such
as banking, department stores, and in municipal public housing. A
statement of the Urban Land Institute activities ami a list of its
trustees is attached.
(The list referred to is as follows:)
President : HukIi Pot for, Houston, president, Tliver Oaks Corporation.
Vice jjresident : Arthur \V. Binns, Philadelphia, .\rthur W. Binns, Inc.
Secretary: Herbert I". Nelson, Chicago, executive vice president, National
Association of Real Estate Boards.
Treasunr: Kenneth K. Rice, Chicago, vice president, Chicago Title & Trust
Co.
Chairman, executive committee: Albert J\I. Greenfif^ld, Philadelphia, president,
Albert M. Creenfield A Co.
William H. liallard, M. A. I., Boston, governing council, American Institute
of Real Estate .\j)praisers.
Ernest J. Bohn, Cleveland, chairman. Independent Committee on Zoning,
Toronto.
1593
1594 POST-WAR ECONOMIC POLICY AND PLANNING
L. F. Kppicli, Denver, president, tlie Denver Planning Commission.
(Jeorge K. Evans, Pittsburfrh, city councilman.
Niwton C. Farr, (Chicago, president, the Civic Federation.
John W. Galbreath, Columbus, president. National Association of Real Estate
Boards.
William IMay Garland, Los Angeles, W. M. Garland & Co.
Guy Greer, New York, board of editors, Fortune.
Roland J. Hamilton, New York, secretary and treasurer, American Radiator
& Standard Sanitary Corporation.
Horton H. Hampton, vice president, New York, Chicago & St. Louis Railroad,
Cleveland.
James S. Holdon, Detroit, president, James S. Holden Co.
]*l>ilip W. Kniskern, Philadelphia, president, the First Mortgage Corporation.
Walter R. ALacCornaek, Cambridge, formerly dean, School of Architecture,
the Massachusetts Institute of Technology.
Walter J. Mattison, city attornej% Milwaukee.
J. C. Nichols, Kansas City, Mo., builder of Kansas City country club district.
E. L. Ostendorf, Cleveland, past president, American Institute of Real Estate
Appraisers.
George Richardson, Chicago, trustee, Mi^rshall Field estate.
Mrs. Samuel I. Rosenman, New York; chairman. National Committee on
Housing, Inc.
Walter S. Schmidt, Cincinnati, past president. Society of Industrial Realtors.
Pichard J. Seltzer, Philadelphia, author of Proposals for Downtown Phila-
delphia.
Howard J. Tobin, manager, Citj' Loans, the Northwestern Mutual Life Insur-
ance Co., Milwaukee.
Paul p]. Stark, Madison, realtor and builder.
Mrs. Alan Valentine, Citizen's City Planning and Housing Council of Rochester.
Winston Wheeler, Wichita, vice president, the Wheeler Kelly Hagny Trust Co.
Foster Winter, Detroit, the J. L. Hudson Co.
Director: Seward H. Mott.
Mr. Mott. Previously, for 9 years, I was director of the Land Plan-
ning Division of the Federal Housing Administration in which position
I was responsible for the land planning and subdivision standards of
the Administration and for all technical matters having to do with
city planning and land development. I was in charge of a staff of 40
field technicians located in key cities throughout the United States
and spent a considerable part of my time inspecting housing projects,
lecturing, and consulting on urban planning matters.
Previous to coming with F. H. A., I, for many years, conducted a
professional office as town plaimer and landscape eugineer in Rochester,
N. Y., and Cleveland, Ohio. While with the F. H. A., and particularly
during the last 2 years, I have traveled extensively throughout this
country, have visited the larger cities and the major war-production
centers many times, inspecting their housing projects and becoming
familiar with their planning problems.
l^t^ome months ago it became evident to the officials of the Urban
Land Institute that there was a wide divergence of opinion as to
trends in post-war housing and land development. It was felt that
the institute could nuike a very valuable and realistic contribution if
opinions regarding these matters were seciu'ed from the men who
would be res])onsible for the actual post-war construction of homes
and the development of land. Consequently, a series of opinion
surveys was decided upon. They have already been held in 10 ke}"
cities selected geographically and from the standpoint of expected
activity in the post-war period. They are Seattle, Portland, Oreg.,
San Francisco, Los Angeles, Denver, Chicago, Memphis, Houston,
Dallas, and Cleveland. Other cities, particularly in the northeast
and southeast areas, will be scheduled 'later. These meetings take
FOST-WAKKCUXUiMR' POLUY AM) PLANNING 1595
the form of round-tnblo discussion of a |)i('i)iir(Hl list of qiiostions and
an> |)articii)at('d in by a srloctod {^loiip of 25 to 35 leaclinij; l)uild(M-s,
land d('V('K)piM's, niorlirJiiXt' baid^crs, roal-cstatc brokers, nic.ndjcrs of
the j)lanninir and liousiiiii; coniniissiftn, and n'pr(>s('ntativps of the
local F. II. A. oflicc. Questionnaires air Tnailt>tl -to tlie participants
|)revious to the uieetintis, which are full-day sessions. The topics
covered include such subjects as market analysis, trends in archi-
tecture and land development, efVectiveness of municipal regulations
and city plannins:: proi2:ra.ms, financinji;, and steps that can be taken
by Federal, State, ancl municipal authorities to assist housin<2; in the
dev(>lopnuMit of sound urban communities.
These meetings are not open to the public or the press, and frank
discussion is (Micouraged and secured. They are not held to prove
any theory or support any program, but to secure the frank and un-
biasetl opinion of th* local leaders in housing and urban development.
The comments which I have to 7nake will be based on these opinion
surveys and on .my own personal observations of many hundreds of
housing projects in all parts of the United States. When the opinion
is piM'sonal I will note it.
For your information, a copy of the questionnaire is attached here-
with. 1 will give you these copies. It might be interesting to refer
to them. I will not attempt to cover all the ciuestions listed, but only
tlios(» which I think will be of particular interest to your committee.
If there are any questions in which you are interested but which I
do not touch upon, I will be glad to comment. These opinion survey
groups were selected from the leaders in their particular professions.
The .men that organized these groups were leaders in their com-
muniti(>s, and their opinions were those of outstanding businessmen
and men with deep interest in tliis particular subject.
MARKET ANALYSIS
The estimate price range for homes to be built in the various
groups was —
Low cost: $3,000 to $4,500 in the South and West, $4,000 to $6,000
in the northern areas. They estimated the price range for homes
would be between certain figures. For instance, in Cleveland it
would range from $4,500 to $6,000. In that price range they could
furnish low-cost homes. For instance, the $4,500 figure might be in
the suburbs where land values were less and the improvement costs
less, but the average low-cost was $3,000 to $4,500 in the South and
West, and $4,000 to $6,000 in the northern areas.
Senator Buck. You could not build nuich of a home for $3,000
these days.
Mr. ^IoTT. In the South, thev have been able to; ves, sir.
Medium priced: $5,000 to $9,000 in the South and West. $7,500 to
$10,000 in the northern areas.
High priced: Over $10,000.
The estimated percentage of single-family homes to be constructed
in the various price ranges in the first 2 post-war years was: Low, 23
percent; medium, 67 percent; high, 10 percent.
Those figures ran very close in all cities except Memphis, where it
was estimated that 60 percent would be in the low-cost field, 30 percent
in the medium, and 10 percent in the high. The reasons for the
1596 POST-WAR ECONOMIC POLICY AND PLANNING
comparatively small percentage to be built in the low-cost range was
due not only to the expected tremendous demand for homes costing
over $6,000 due to war restrictions, but to the fact that the expected
departure of at least 50 percent of in-migrant war workers will leave
a great number of title VI homes vacant. It is estimated that these
vacancies will be sufficient to take care of a large percentage of the
low-cost needs in the first 2 post-war years. In Memphis, where there
has not been such a large number of title VI homes built, the per-
centage of homes expected to be constructed in the lowest-cost field
was very much higher, as aVjove noted.
Of the dwelling units to be built in the first 2 post-war years, the
average estimates are that 90 percent will be sold, 10 percent rented.
The small percentage for rent is due largely to the fear of continued
Federal rent control. I am of the opmion that a much greater
percentage of rental units would be constructed if present controls
were removed or greatly modified immediately upon the close of the
war.
The estimated sale of single-family homes to veterans under the
G. I. l)ill for the first 2 post-war years was 15 percent to 25 percent.
This would depend, of course, upon the speed with which the troops
are demobilized.
Practically all responsible builders are making definite plans for
post-war construction. Alany have secured land and are in process
of preparing detailed plans.
With only one exception, Memphis, where H. O. L. C. had already
done a lot of this, it was the opinion that the remodeling of existing
dwellings would be a practical method for housing a considerable
percentage of the lowest-income group if rent certificates or some
similar subsidy were provided. The estimates of the percentage of
the housing need that such remodeling would provide ran from 10
percent to as high as 30 percent.
The success of H. O. L. C. in remodeling existing dwellings for war
workers, which I understand costs on a national average only $1,600
per unit as against approximately $4,000 for a new structure, would
indicate a very careful study should be made as to the possibility of
providing housing for the lowest-income group in this manner before
large programs for new public housing are started.
I find considerable interest on the part of private operators in
Negro housing, and in practically every cit}^ survej^ed there was at
least one operator planning to provide such structures. I found some
very excellent Negro projects built by private capital, too, thi'oughout
the country.
There was a serious lack of data and statistics on housing needs
and expected market. Los Angeles and Cleveland, as already noted
by Mr. Blandford, have excellent local organizations securing such
information, with the cooperation of local businessmen. The local
F. H. A. oflices have made some estimates that were well thought of.
I personal!}' doubt if the local operators would have confidence or
would use housing statistics sent out by N. H. A. statisticians. They
have much greater confidence in data put out by the local F. H. A.
office or, better still, by local organizations with no program to forward
or case to prove.
POST-WAR ECONOMIC POLICY AXU PLANNING 1597
AVAILABILITY OF LAND
With the ('xci'ption of ihiro citios, 7") pcMccnl of the i)()st-\var housing
is oxpoctod to bo built on now, un(l('V('K)pi>(l acrcjii::!', th(> bahuifc on
oxistin<? improved lots. In C'hica>2;o, l)onv(M", and C'lovchuid, thoro is
still a surplus of woll-locatcd improved lots available, and the percent-
ages were therefore reversed. In other words, in those cities 75
percent would be on existing improved lots.
As yet there is no iiulication of inflation of land values. The
average cost of existing imj)roved lots for low-cost homes was $G60;
medium. $040; high. $1,500 and up.
Senator Ellkndkk. When you say there is no sign of inflation in the
price of land, do you mt>an in the cities that you covered?
Mr. MoTT. I am speaking of these surveys which covered the 10
cities.
Senator Taft. At what date, approximately?
Mr. MoTT. Since August.
Senator Taft. Between .Vugust and the present time?
Mr. MoTT. Between August and the present time. The survey in
Cleveland was held December 27.
Senator Taft. You are speaking only of land value?
Mr. MoTT. I am speaking only of land value, yes, sir. The cost of
homes has gone up surprisingly, yet there is no indication of indation
in land value.
Senator Ellender, Don't you attribute that to the fact that people
cannot obtain lumber and other material in order to build on such
property?
Mr. ^loTT. That may have some influence on it.
Senator P^llexder. To what extent did you find, if you investi-
gated that phase of it, any increase in the value of improved lots?
Mr. MoTT. That is, improved with a house on it?
Senator Ellender. Yes.
Mr. MoTT. I did not get any figures on it, but everywhere I went
there was an indication of a great increase in the cost of homes;
homes that were selling a year ago for $6,000 would sell for $7,500 — as
large an advance as that.
Senator Ellender. You would not attribute that rise to the addi-
tional cost of labor?
Mr. MoTT. I would attribute it to the great demand for homes in
these war areas — war production areas.
Senator Ellender. It is just inflationary.
Mr. MoTT. Yes. This shows the cost of the improved lot as about 15
percent of the value of the average $4,500 complete low-cost home,
which is a safe figure; that is, an improved lot at $650 would be 15
percent of the cost of a $4,500 low-cost home, which is a fair mean for
the low-cost homes throughout the country. I think for the F. II. A.
it runs from 1 1 to 16 percent, the cost of the improved lot as percentage
of the value of the complete unit. Acreage prices for low-cost homes
was $715; medium, $1,230; and high, $1,700.
Senator Taft. Per acre?
Mr. MoTT. Per acre; yes. That is for well-located land. The
question was well-located land that would, in general, meet the locating
ratings of the Federal Housing Administration, and those were the
prices.
91183 — 45— pt. 9 2
1598 POST-WAR ECONOMIC POLICY AND PLANNING
Senator Ellender. At what distances would thej^ be from the city?
Mr. MoTT. I asked one question: What are the distances that you
would consider feasible? The answer was: 40 minutes to employment ;
3 miles to major shopping center; 2K miles to high school, and one-half
mile to a small store or grade school, and within those limitations
they felt property was feasible to develop.
Senator Ellender. The prices you mentioned conform to that
standard?
Air. MoTT. They conform to that standard.
Senator E^llender. Thank j^ou, sir.
Mr. MoTT. In spite of numerous warnmgs to the contrary, there
is no indication that there will be a return to speculative lot sales
such as occurred during the' twenties. The vacant lots that will be
sold will be almost entii'ely for custom-built homes in the upper-price
brackets and for resort properties. The F. H. A. method of low-cost
financing, combined with their conservative land valuations as well
as local regulations recjuiring a developer to install complete street
improvements at his own expense in all subdivisions, have almost
completely stopped speculative lot sales except as noted above.
Tlie opinion on this was unanimous in every city. This trend was
clearly indicated m the years just previous to the war, as one seldom
found advertisements for am'thing except completed homes in our
metropolitan papers. The land subdividers have either become build-
ers or are wholesaling improved lots to builders.
Senator Buck. When you speak of an improved lot, you mean one
with a street, sewers, water, and utilities in it?
Mr. AIoTT. A lot with a street, sewers, water, and everything, ready
to build a house on. There is no indication of a swing-back to that
wild speculative selling that we knew in the past, and I think it is
largely due to these reasons that I have given.
Land located reasonably close to transportation, schools, shopping
centers, and water is available at reasonable prices in all areas visited.
In some sections, due to topographical conditions, the extension of
public sewers presents a problem, particularly in Portland, Oreg.
LAND IMPROVEMENTS
It is becoming almost universal practice on the part of local author-
ities to require land developers to install street improvements at their
own expense. The issuing of county and city improvement bonds for
such purposes appears to be a thing of the past. The minimum
requirements of local authorities and the F. H. A. now generally
include hard-surface streets, curbs, storm-water and sanitary sewers,
and walks within the city Imiits. Installation of water mains by the
developer is also required in some cases. There is strong opposition
in many areas to the developers being required to install oversize
storm water, sanitary, and water mains to take care of areas outside
their tract. In some cities, such as Baltmiore, the city installs the
mains and the developer puts in the house extensions and curb drains.
This appears to be a fair practice.
The use of septic tanks and individual wells has proved unsatis-
factory throughout the country, and the extension of public service or
the construction of small community systems will, therefore, be neces-
sary for all new developments.
POST-WAR ECONOMIC POLICY AND PLANNING 1599
IMPROVEMENT COSTS
Street imjMDveinents. iiu'liuling curbs, bituininous-houiul pave-
ment, sanitary and storm-water sewers, and at least partial installa-
tion of walks average $G to $8 per lot front foot in the suburbs and $8
to $10 in the city. In general, costs in the South and Southwest are
about 20 percent low(>r than in the rest of the country. Where water
nuiins. very higii-typi' paving and other improvements must be put
in by the developer, as in Cleveland and in Cincinnati, costs may run
from $10 to $14 per front foot. Where such severe requirements exist,
it is extremely (liflicult to construct low-cost homes without decreas-
ing lot widths below 50 feet, which is considered a desirable minimum
in the North, antl GO feet in the South and West. This is a matter
which should receive serious consideration from planning commissions
and municipal highway departments if they do not want to force a
large percentage of their citizens to live outside the city limits or force
reductions in lot widths to a point v.'here light, air, and privacy are
jeopardized. I think under such conditions part of the improvement
expense could well be borne by the city at large,
NEIGHBORHOOD PLANNING
The desirability of the construction of complete neighborhoods,
with provision for such facilities as shopping centers, schools, parks,
playgrounds, and churches, with a blending of various-priced homes,
is becoming universally recognized. These neighborhoods are de-
signed as self-contained units protected from the hazards of through
trafTic. Such projects, however, refiuire large acreage and heavy
investment, and in the past they were almost exclusively for high-
clnss homes. Notable examples of such communities were Roland
Park, Baltimore; Country Club District, Kansas City; Upper Arling-
ton, Columbus, Ohio; River Oaks, Houston, Tex.; and Shaker Heights,
Cleveland. The Land Planning Division of the F. H. A. has done
a good deal to stimulate development of complete neighborhoods for
low-cost homes, and where good zoning ordinances exist which pro-
tect property against adjacent adverse influences, much smaller
acreage need be purchased than would be the case if there were no
such protection. Several city planning commissions, particularly
Los Angeles and Chicago, are setting up neighborhoods of this kind
in their master plan and are establishing street lay-outs and land-use
controls that w^ould assure complete, well-balanced neighborhoods.
Another interesting trend is the cooperative action of groups of
small builders in the development of a complete new neighborhood.
The most notable example of this is Midwest City, near Oklahoma
City, where 16 small builders cooperated in the development of the
building of 1,500 homes. This is a war housing project done com-
pletely by private enterprise, with no Federal aid except F. H. A.
insurance. It was constructed in a j>eriod of npproximately a year,
with all the facilities of a modern community. It has been so suc-
cessful financially that the same group is planning a post-war
project of some 500 acres, with approximately 2,000 dwelling units.
There is also great interest being shown in the development of
local shopping centers to be built under one management with archi-
tectural control. The effect of such decentralization, which is ex-
pected to continue, is being seriously considered by the owners of
1600 POST-WAR ECOx"^OMIC POLICY AND PLANNING
downtown stores and real estate and is being counteracted by the
establishment of branch stores in the suburban centers and by pro-
posed construction of limited-access highways to the center of the
city, improved transportation, and provision for downtown parking
area or space.
ARCHITECTURAL TRENDS
Regarding trends in the architectural design of homes in the early
post-war years, there is universal agreement that there will be no
radical changes in exterior design of any price ranges, no miracle
houses as yet. More careful interior planning, more efficient kitch-
ens, and greater use of electrical and gas equipment is expected.
Even in the highest-cost range, the exterior design will remain con-
servative. Of 100 plans for homes costing over $30,000 in a fine
subdivision in Houston, only 2 were modernistic; and in a similar
project in Seattle, only 1 out of 70 plans presented for approval was
modern. However, even in the low^est-cost homes, the individual
touch is demanded.
In the average project of 100 low-cost units, the developers expect
to use at least 4 separate floor plans, with 6 exterior variations for
each plan. It was the opinion that the "desire for the individual
touch" would counteract savings up to 10 percent that might be
made in mass production of 1 low-cost model.
We asked numerous questions of this group as to the fear of competi-
tion in mass production of low-cost homes. The builders felt they
could handle their market and did not seem to fear mass product"^on,
such as Mr. Kaiser and other industrialists were spealdng of. They
felt when a man bought a home he wanted something that was a bit
individual, and they could take care of that market, and as yet they
were not fearful of the competition that mass production would present.
AIRPORTS
Because of the efforts being made to secure large Federal funds to
build .3,000 small airports close in to built-up areas, the reaction shown
in these surveys as to the effect of airports on residential areas will
undoubtedly be of interest to your committee. Very strong opposi-
tion to locating airports near residential areas was shown. The least
opposition experienced was in Los Angeles. The minimum desirable
distance for a residential area from a large airport was indicated as
2 miles along the fine of approach and departure and one-half mile
from other sections of the airport. The reaction to "air parks" of
60 to 100 acres in area and used for recreation as well as the landing of
small planes was that they would be equally undesirable and that any
residential property closer than a mile and a half would be at a dis-
vantage. Circling training planes were considered a great nuisance
and hazard. h\ Chicago the zoning prohibits airports closer than a
mile and a half to residential areas. The general opinion was that it
would be many years before piivate planes would be used for other
than rec;eation and sport. For some time their use woidd be similar
to that of a cabin cruisei or sailboat. It was felt that weather condi-
tions and stringent air regulations limit the use of light planes as a
regular means of transportation. There w\as no evidence of any
residential developments being planned with the use of airplanes in
POST-WAR ECONOMIC POLICY AND PLANNING 1601
mind. It was thouirlit tluit improved lii<rh-spood hiirhways and moi'e
c'iIici«Mit automobiles would make travel by auto safest, (juiekest, and
most convcniiMil up lo '200 mili>s.
TAXES
There was universal concern over tlie excessive tax load carried by
real estate. Tax limitations such as the 40-mill tax limitation in the
State of Wasliington were stronj2:ly advocated. The Cleveland group
appeared to be satisfied with the tax situation in Ohio.
There was strong support for the Hartley bill, H. R. 3886, which
would permit deduction of depreciation upon owner-occupied homes
from income in making Federal returns. It was the universal
opinion that the passage of this bill would greatly stimulate and help
home ownership.
MUNICIPAL REGULATIONS
In recent years the municipalities have and are taking steps to
revise their various regulations such as building and sanitary codes,
subdivision and land-use controls. The revision of a building code in
a large city is a slow and involved procedure as groups with conflicting
interests must be considered, such as labor unions, material manu-
facturers, and the construction industry. Unt'l re\'ie:ons ere made,
it will b,' difficult to const ;-uct leally low-cost housing in many cilies
or take advantage of some of the new materials and labor-saving
methods of consti-uction.
Because only 22 States have enabling legislation permitting counties
to set up building or zoning regulations, the control of building and
land use in areas outside of the cities is very lax and is a serious
problem throughout the Nation. Immediate steps should be taken
to correct this. Enabhng legislation permitting counties to control
sanitation has been passed in practically all of the States, largely
through the efforts of the United States Public Health Seivice.
CITY PLANNING
The benefit of comprehensive city planning is becoming recognized
by business leaders, but due to lack of an educational program and an
elfective public relations staff, city planning does not have the public
support that it should. A better public relations and educational
program was advocated in most of the cities surveyed. The benefits
of city planning should be taught in the schools and public support
for a long range planning program developed similar to that secured
for the community funcl. The best example of the success of this
type of public relations is the Wacker plan for the development of the
Chicago lake front, which was started 25 j^'ars ago and is being most
successfully carried out with full public backing.
Comprehensive regional planning is needed with master plans cov-
ering highways, transportation, and land uses. During the develop-
ment of such plans, the pul)lic and heading business organizations must
be ke{)t informed and consulted. Time and again where this has not
been done, the plans developed are unrealistic and impractical, strong
opposition is developed, and the plan is ineffective.
Business leailers, particularly those interested in urban real estate,
recognize that city planning problems are economic as w-ell as social
1602 POST-WAR ECONOMIC POLICY AND PLANNING
and esthetic and that the plans to revise their communities must re-
ceive the closest study and assistance of practical businessmen as well
as city planners and sociologists in order to be effective. To date
after 40 years of city planning, there are hardly a dozen cities through-
out the country that are effectively following an official and compre-
hensive planning program.
URBAN REDEVELOPMENT
Mr. Blandford's charts and figures indicate the serious condition
existing in our larger cities due to blighted or slum conditions and the
disproportionate burden it is putting on sound areas. The opinion
surveys indicate that the decentralization that took place before the
war is expected to continue at the same rate. As indicated by Mr.
Blandford, urban redevelopment bills have been passed in 9 States
and bills have been introduced or are in preparation in at least 10
more. I find that such legislation is popular and will receive strong
public support. It is felt by most that the use of Federal funds for
redevelopment would increase Federal control of local affairs. Such
control is strongly opposed and for this reason many medium-sized
cities such as Denver, Indianapolis, and Portland, Oreg., are either
going ahead with or proposing redevelopment programs financed
wholly by local funds through bond issues or additional tax on real
estate.
The city of Portland started a very extensive development in the
center of the city for which they passed a $4,000,000 bond issue. The
Indiana redevelopment bill proposed a tax of 10 cents a hundred on
real estate value to take care of it, and I understand a bill has been
prepared for Michigan which will take care of the expense of redevel-
opment locally.
There are some, however, who feel that due to the fact that cities
contribute such a large percentage to the Federal income, it is right
and proper that they receive some direct return and they are hopeful
that if Federal funds are made available the local controls will not be
too stringent. They also feel that in order to get urban redevelop-
ment quickly started, pump priming by Federal funds is necessary.
In practicaliy all survej^s the opinion was expressed that in the dis-
tribution of Federal funds they would rather deal direct with a Federal
agency than through a State commission set up for that purpose,
I have studied many redevelopment bills and discussed their
features with numerous groups of planners and officials. To be
effective there are several principles which I personally feel should be
followed: (1) The purpose of redevelopment legislation should be to
secure the highest and best use for the redeveloped area. It shovdd
not be a housing bill for its purpose is not just to rehouse the displaced
families. (2) I do not think it should be administered by the local
public housing authority, but by a well-balanced redevelopment
agency appointed by the city authorities with wide power for land
acquisition. (3) It should permit th(> replanning and development of
partially vacant and blighted subdivisions. (4) The redevelopment
legislation should require the appointment of a planning commission
and the creation of a regional master plan controlling futvn-e highwa3^s,
transportation and land uses. I think the legislation should include
some'definition of what the master plan should cover. (5) Recommenda-
tions of the area to be redeveloped and approval of the redevelopment
POST-WAR ECONOMIC POLICY AND PLANNING 1G03
plans by the planning coniniission should bo roquirod. (G) Provision
should hv nuuh' to sell or lease (he area after assembly and installation
of new roads and utilities to private enterprise as well as to the public
housing:. (7) Lantl uses on sold or leased property and rental controls on
public subsidized housing should be covered by zoning; and covenants
in the deeds and contracts. (8) Provision should be made for the
cons(>rvation or remodeling of properly located sound old structures
in the redevelopment area.
PUBLIC HOUSING
Considerable opposition to public housing was evidenced in most
areas. The chief reasons for opposition were given as bad location,
excessive cost, and method of selecting tenants. Strong opposition
was continuall}'' expressed against what was called Federal interference
in local affairs. One method recommended for making substantial
savings in housing for the lowest income group was through the re-
modeling and conservation of old dwellings as I have previously
discussed. In general, the site plan and construction of public housing
was consiilered good although too expensive. Fear was expressed that
pres(>nt occupants, man}^ of whom have high income due to war
conditions, would remain as tenants, and in this way public housing
would remain in direct competition with private enterprise.
FINANCE
In the post-war period, due to gK^ater efficiency and manpower,
labor and material costs were expected to remain about the same but
with trends slightly up.
Construction and mortgage money was expected to be plentiful, and
interest rates to remain about the same with the trend lower. No
necessity was expressed for F. II. A. insurance of construction money
for single-family homes.
F. H. A. procedure was very generally approved but with low lot
valuations a frequent criticism. Claim was made that increased
street-improvement requirements have not always been reflected in
valuations.
There was strong sentiment for giving local and regional F. H. A.
ofTices broader discretionary powers. They wore fearful that trend
is to c(>ntralize control in Washington wheie they think there is lack
of knowledge of local conditions and sentiment.
In most areas there is wide variance in the standards of appraisal
methods of the Federal Savings and Loan Associations and the
F. H. A., the Federal Savings and Loan appraisals running very much
higher than F. H. A. so that their smaller percentage^ of loan equals
the 90 percent insured F. H. A. loan. The location, subdivision
and construction standards of the Savings & Loan Co. are very much
lower than F. H. A., creating a very diflicult situation for both the
buil<l(>rs and mortgage bank(M's. It was the universal expression that
there should be greater uniformity in the standards and appraisal
procedures in F. H. A. and the Federal Savings and Loan banks, as
in the final analysis both organizations were dependent on Federal
credit.
1604 POST-WAR ECONOMIC POLICY AND PLANNING
The complaint made was, for instance, on a house that was valued
at $6,000 by F. H. A. or say $5,000, there a 90 percent loan would be
$4,500, and would be valued by tlie Federal Savings and Loan at,
say, $6,500, there a 70 percent loan would equal the $4,500 F. H. A.
loan and there was a complaint that the appraisal methods were not
the same. There were general approvals of the F. H. A. system,
and a very strong support, very loyal support, of the local F. H. A.
oflices. It was done everywhere I went.
I would like to make a personal comment on the excellence of
F. H. A. title VI war housing both in apartments for rent and single-
family homes.
I have inspected hundreds of these projects in all sections of the
country from Maine to Florida and from Seattle to San Diego. "With
rare exceptions they not only compare well with pre-war housing, but
on the whole the land planning and street improvements are superior,
which is cjuite unusual.
It is the exceptional case where F. H. A. w^ar housing was adversely
affecting a neighborhood, even when built on scattered vacant lots. I
feel this is a tribute to F. H. A. standards and the excellence of the
judgment of the local staffs.
It was feared in the beginning that these title VI war houses would
adversely affect the residential neighborhoods. I think an inspection
will show that this statement of mine is true.
To the question, "What steps can be taken b}'^ the Federal Govern-
ment to assist private enterprise in building post-war homes?" the
most frequent answers were: (1) Elimination of more careful control
of Federal subsidized public housing; (2) stronger support of F. H. A.
and discourage centralization of authority in Washington. Local and
regional F. H. A. offices should have greater authority in establishing
standards and in making decisions on local matters; (3) establishment
of a research laboratory to promote better housing, test building
materials, and assist with building codes. This would preferably
be a branch of the Bureau of Standards; (4) pass urban redevelop-
ment legislation to stimulate maximum construction in the early
post-war 3^ears; (5) elimination of unnecessary agencies. Most
groups did not understand or could not see the necessity of N. H. A.
and felt that F, H. A. could function better as a separate agency.
Tiiey, however, approved the elimination of the many scattered
housing agencies which N. H. A. made possible. They apparently
did not understand the functioning of N. H. A. in the field; (6)
elimination of rent and other Federal controls as soon as possible
if the housing industry is to flourish.
Senator Iaft. That is a very interesting survey, Mr. Mott. It
gives us the liackground of public opinion as to the effect of legislation.
Are there any questions from the niembcjs of the committee? If not,
we will go on with Mr. Alfred Bettman.
STATEMENT OF ALFRED BETTMAN, CHAIRMAN, THE AMERICAN
INSTITUTE OF PLANNERS, CINCINNATI, OHIO
Mr. Bett.\ia.\. i am Alfred Bettman of Cincinnati. For a quarter
of a century I have been verj'^ active in planning law and legislation,
have written planning law and legislation. I have been for many
years, for instance, chairman of the American Bar Association com-
mittee on planning law and legislation, also chairman of the legislative
POST-WAR ECONOMIC POLICY AND PLANNING 1G05
coniniiUoc of the American Institute of Planners, which is a profes-
sional organization and thus engaged in making and administering
the plans, which oi-ganization has been thinking for a quarter of a
century about the problem of urban retlevelopment, and perhaps by
experience and by technical knowledge has peculiar (lualifications for
thinking out this subjcH't of urban redevelopment, so I am going to
take the liberty, Mr. Chairnuin and gentlemen, of leaving with you
a statement of the American Institute of Planners. The institute
has prepared a report on this sui)ject, the original of which I have
hancletl to the reporter.
Senator Taft. I think it should be inserted in full in the record,
if that is what you wish.
Mr. l^ETT.M.vx. Yes. Growing out of this activity, I was also the
chairman of the City Planning Commission of Cincinnati for a time
that m(>mory of man know s not to the contrary, but I am not appear-
ing for that commission. 1 am appearing for the institute.
Also in that connection, 1 would like to offer for the record a report
l)y Prof. Alvin H. Hansen entitled "Three Plans for Financing Urban
Redevelopment." Professor Hansen is in the research branch of the
Federal Reserve Board and was the chief draftsman of the bill known
as the Thomas bill for Federal aid to urban redevelopment. Professor
Hansen unfortunately could not be here today. If I may, I would
like to leave that report here. I haven't copies of that, and I do not
intend to read it, but I would like to insert that in the record also.
Senator Taft. Yes, that may also be inserted in the record.
Mr. Bettmax. Urban redevelopment has come to be the recognized,
and is an accurate, expression for the process of rebuilding or rehabili-
tating tiiose portions of our urban communities which are in need of
that treatment and which are commonly referred to as blighted.
Consefiuently, url)an redevelopment legislation deals with the organ-
ization, procedure, and financing of this process of rebuilding or
rehabilitating the blighted districts of our cities. As these districts
are estimated to constitute al)Out 30 percent of the urban territory
of the United States, the problem presented is of great magnitude as
well as of the most profound economic and social importance. For
an intelligent solution of the problems involved in the formulation of
the legislation, we nmst know the causes and conditions with w'hich
it is to deal and from that know'ledgc draw our conclusions of the
remedies to be embodied in the legislation.
The disease which wc call blight must be something less visible,
more subtle, deeper, than the mere age or structural obsolescence of
the existing buildings; for, if that were the trouble, it would cure
itself by which is meant the areas would be rebuilt in the ordinary
course of private enterprise without novel or extraordinary forms of
public participation. If new buildings for old were all that is needed,
it would be practical and feasible to build them, and the ordinary
economic motives of private enterprise would long ago have engaged
in building the?n. Such has not been the case; and indeed the i)lighte(l
areas have tended to grow more extensive and decadent. One rt^ason
is that the obsolescence is not merely a structural obsolescence but an
obsolescence of the design of the areas themselves as well as of tlu?
whole urban territory. The existing lot and street layout of the areas
is obsolescent in the sense that it does not fit modern technology',.
and the rebuilding cannot, as a practical or economic matter, occur
91183 — 15— pt. 9 3
1606 POST-WAR ECONOMIC POLICY AND PLANNING
without the cure of this docpcr obsolescence by a redesigning of the
areas. But the obsok^scencc goes still deeper, for the present classes
of the land uses of these areas are obsolescent in varying degrees.
The processes of population, commercial and industrial allocation
induced by tlie automobile and other contemporary changes in modes
of transportation, in the types of territory required by or available
to modern industry, and other causes, the nature of which have been
explained and discussed in the literature on the subject, have made
the existing classes of the land uses, as for instance habitation of
various kinds, industry, business, and so forth, inappropriate and
unfit. To prepare these areas, therefore, for a redevelopment or
rehabilitation which would be socially and economically sound and
stabilized, the replanning of the design and uses of these areas, in the
light of the general master planniug of the whole urban territory in
which they are located, is essential.
This necessity is of the greatest importance for its bearing upon the
procedure and the organization of the redevelopment and rehabilita-
tion process; for this necessity indicates that any assumption either
that blighted areas are coterminous or coextensive or identical with
the slum areas or that areas now used for habitation should be rebuilt
for habitation or wliich are now used for the habitation of a particular
in?o.me stratum should be rebuilt for that particular income gtouo — •
any assumptions such as these would lead to the tragic result
tha' the rebuilding would simply institute the beginning of a new era of
blight and instability which would accelerate a repetition of the social
and econo.mic wastes of which blight is the manifestation.
For these reasons a serious warning needs to be issued against con-
ceiving urban redevelopment as a subject identical with housing or
housing with little variations — housing the theme, urban redevelop-
ment the variations. Of the uses of the land of an urban area, habita-
tion is the largest, running, I believe, from GO to 75 percent; but this
is just as true of the unblighted as of the blighted areas, of the whole
urban territory as of the blighted portion thereof. So, while housing
construction will always form the larger proportion of all urban re-
develop.ment or development, a costly mistake will be made if urban
redevelopment be conceived of as the replanning and rebuilding of
slum areas only or the replanning or rebuilding for housing only. The
redevelopment or rehabilitation process needs to be applied to all
areas wliich need it and for all the classes of uses which, according to
good city planning principles, are appropriate to these areas. As
urban redevelopment will prepare areas for reconstruction and will
finance this preparation, housing, that is habitation, will be the
greatest beneficiary of this process; but unless the legislation, planning
and adnunistration be understood to be for all kinds of blighted areas
for all classes of urban uses, the process will not produce sound and
stable results.
To give just a few illustrations of blighted areas which are not of
the slum species or necessarily to be redeveloped for habitation. Take
an old area adjacent to railroad yards and now occupied by a more or
less decayed or abandoned mixture of obsolescent structures, both
habitation and others; all of these uses being of a kind ^\■hich under
modern conditions cfinnot stabilize and thrive in theii- present loca-
tions or adjoining modern active railroad yards. Perhaps the master
planning will demonstrate that it is the railroad yard which needs to
POST-WAR ECONOMIC POLICY AND PLANNING 1607
1)0 moved; but if not, tlien tlio sittmlioii culls for some form of uoii-
hai)i(}itioii iiso, such as uutomobih' ])!i.rkiii<2; or modern Wftrehousc^s,
Or take nn area subject to river inundation more or less occnsionally.
Perhaps the planninii; will indicate the thini; to do is to remove the
inundation, makins: the area available for habitation; but ])erha])s the
plamiinj:: will indicate that the thinjj: to do is to devote the area to
types of uses other than habitation.
Take as another illustration an area comi)osed of the frayed por-
tion of a central business district with mixtures of all sorts of substand-
ard pi ices of dwelliiiir. Perhaps the master ])lainun2: of the whole
urban territory would indicate that this area is appropriate for a type
of habitation tributary to the central business district and not to
inilustry.
These illustrations could be multii^lied, making: ever more clear
that the problem is not restricted to slums or to housino;, and that no
rebuildinjj: which will have stability and therefore will produce the
desired social and economic welfare can be accomplished unless we
start with the conception that we are dealing with all types of dis-
tricts \\hich need the treatment and for all types of appropriate uses
in accordance with good city planning; all of which, as it will be seen
lat(T, has important bearings upon procedures and organization.
Berore going into the question of the role of Federal legislation and
government, it would illuminate the subject if we first inquired what
is the role of public participation. That the master planning and
the replanning of the areas in their general features, that is, the general
distribution of the land uses, must be done by the public should be
obvious w-ithout much argument. Naturally -the private citi?;en wnll
have a large part of this gov(M"nmental activity as he docs in all others,
and naturally, as in all other governmental activity, much of the ini-
tiation will come from the private interests, and naturally most of
the detailed structural planning of the private housing, business, in-
dustrial and other structures will be in the charge of the private
rcdeveloper. But the general distribution of the land uses in the
redevelopment areas, that is, the general location of the habitation,
industry, business, transportation, education, recreation, ana so on,
and the standards of ])opulation and building density, cannot pos-
sibly be soundly determined, from the point of view of social and eco-
nomic values, except by public agencies.
It is furthermore obvious that, as one of the obsolescences w'ith
which we must deal is the present lot lay-out and design of the areas,
the carrying out of the replanning is impossible unless ownership or
other form of control of the land of the area be temporarily concen-
trated so that the plan can be legally imposed upon it and become
binding upon those who will take over the area or their successors in
title.
I wish to say by "area" I mean a piece of the blighted district,
which is usually a single unit of the redevelopment ])roject. T use
the word "district" to mean the entire bli^rhtetl district or districts.
This means the assembly of the land of the area, that is, its acquisi-
tion and control long enough to impose the plan upon it, and, w'e can-
not rely upon voluntary sales entirely, this necessitates the exercise of
eminent domain. This in turn necessitates the availability of funcls
to finance this land assembly. It is important to remember that this
1608 POST-WAR ECONOMIC POLICY AND PLANNING
type of legislation deals with the financing of the land assembly and
not the financing of any construction.
One of the obsolescences which produced the blight, however, is
that the existing market land values are seldom harmonious with the
land values based on conformance with the plan, and its planned
use value which will be an important factor in producing the stabilized
redevelopment which is the objective of the type of legislation under
discussion. As we all know, the existing land values are the product
of speculative market values based on past uses or past expectations
or hopes for uses which are no longer appropriate to the area. There
is every sound theoretical reason for the hope that in the long-term
course of the history of the development of an urban territory, the
use values in the aggregate and market values in aggregate will tend
to be equal. But that is not even theoretically true of any area in
particular, and especially not true of the old areas where the hangover
of past speculative values is still strong. We must face, consequently,
the condition that many areas in the blighted districts cannot be dis-
posed of subject to the plan for an amount equal to the acquisition
cost, and we must be prepared not only to carry that proportion of the
land acquisition cost which will come gradually to be recovered by
sales or ground rents of the areas, but beyond that to expend from
public funds the acquisition cost which may not prove thus recover-
able.
This is no reason for hesitation; for this difference between acquisi-
tion cost and disposition yield is the evidence of the strength of the
disease which we are engaged in treating. Putting our urban com-
munities upon an economically and socially sound basis is worth not
merely the advance of public funds but some degree of expenditure
of public funds; and the indirect financial benefits to both private and
public treasinies will, if the redevelopment be well administered, un-
questionably show an enormously favorable balance.
"Wliat, then, is the role of the Federal Government in this process?
Why should it feel called upon to aid? The answers are easy to dis-
cover and are convincing. The very magnitude of the problem dem-
onstrates that it is a national problem in its scale. Thirty percent or,
say, 25 percent of the urban territory of the country is in need of one
or another degree of urban redevelopment or rehabilitation treatment.
But the patient is not only the obsolescent areas; it is the whole urban
community. In other words, the entire urban territory of this country
is, in its social and economic conditions, adversely affected by the
blight. This means that urban blight is a blight on the national
economy.
Furthermore, one' cannot attribute all blighting factors to local
causes. They include both local and national processes, such as the
location of great national industries and the location of great national
facilities such as railroad, major highwaj^s, Federal aid to suburban
private developments, and others.
The most convincing reason for Federal aid, however, is the fact
that, under our present tax system, the Federal Government takes
from the localities revenues without which they cannot finance this
redevelopment process. If, as is obviously the case, the revenues
available to the localities are inadequate for all other local activities
and also for carrying on this urban redevelopment, then, to the extent
of this additional need, it is the Federal Government which, under
POST-WAR ECONOMIC POLICY AND PLANNING 1609
our present tax system, is absorbing the necessary additional tax
revenue.
Senator Taft. That assumes, though, that it has some left over
after it gets that increased revenue and pays its bills. We have had
a deficit in our Federal system for 12 years, so there is no evidence,
as I see it, that there is any possibility of getting any more money
from the Federal Government than from the local government.
Mr. Bettmax. Of couree, it is a question, Senator Taft, of the
selection of the objectives of j^our expenditure. If this is important
enough, it ought not to be treated as a residue after many other
important things are done.
Senator Taft. The city has provided for the use of all of its revenue
and there is no revenue left for this. I say the Federal Government
has provided for the use of all of its funds under its existing uses, and
there is no residue left for this either. I see no difference there. At
least, I object to the theory that the Federal Government has an
unlimited source of tax power, because no one has invented a tax
system for the Federal Government which will pay for what we are
doing now, much less what we expect to do in the future.
Mr. Bettman. Of course, in administering Federal aid, the admin-
istrative agency must be sure that the city is contributing all it can.
I am hoping that this process will demonstrate that the returns from
the areas will growingly approach the acquisition cost and require
less final expenditure, as distinguished from advances, and that the
localities may be able to find local revenue, some local revenues with
which to do some of the aiding themselves.
The inliabitants of the localities .pay the Federal income and some
other Federal taxes. Perhaps the localities can furnish some of the
necessary aid out of their general local tax revenues; but if this is
very urgent, restoration of the economic vigor of our urban territory
is to be started and carried on vigorously, the localities must have
some financial help from outside of themselves. They will and they
should commit to repayment of the aid all funds they receive by way
of ground rents or sales proceeds of the areas. Beyond that some aid
from outside themselves is essential; and logically it certainly seems
that that aid should come from the Federal Government, which,
under the existing tax system, is the recipient from the people of the
localities of the moneys which are needed for this purpose.
Now, how about the organization of the work? The planning can
be soundly done only by a planning agency, by which is meant an
agency whose function is the master planning and the general features
of the area planning in conformance with the master plan; which
means an agency whose sole or primary function is the land-use
planning and the coordination, by means of the techniques of urban
design, of all types of uses — habitation,, industry, business, education,
recreation and the other categories of land use — a function which,
taking human nature as it is, cannot be well performed by any agency
which has a special interest in an}" one class of use, even housing.
For consciously or unconsciously, any special interest dislocates and
warps the quality of the territorial planning. And as it is the locality
which should be permitted to make its plans, this means that the
legislation, whether it be State-enabling legislation or Federal-aid
legislation, slioidd repose this use-planning or territorial-planning in
and should insist upon its performance by a local planning agency
1610 POST-WAR ECONOMIC POLICY AND PLANNING
whose official statutory function is planning, not administration or
construction.
Both logic and experience teach that this same analysis is applicable
to the Federal agency which is to be in charge of the administration of
the Federal aid to the localities for the land assembly. This Federal
agency ought likewise have no special interest in one functional use,
even housing, or in construction; this for the same reasons which
apply to the local planning agency; and, as no single Federal agency
can have charge of Federal activities in relation to all urban land uses —
housing, roads, public buildings, recreation, public works, public
utilities, and all the rest — the healthiest results, in terms of the
soundness of the redevelopment measured by its economic or by its
social values, can come only if the Federal agency which administers
the aid has planning for its function, not achninistration or construc-
tion or operation of any special functional type of land use.
I stated above that experience supports this conclusion. One avail-
able record of experience has been the English experience. Following
World War I, England entered upon a period of housing construction,
both public and private, on an unprecedented scale. England has
statutes and agencies for urban planning, what we call city and
regional plannuig. The central government's activities in relation to
both housing and planning were placed in the same ministry, namely,
in the Ministry of Health. England has a greater degree of central
governmental control over local activities than w^e wish over here;
but her experience is nevertheless logically applicable to the particular
question under discussion at the moment. The planning and housing
have now been departmentally separated, the housing remains in the
Ministry of Health, with all of the central goverim^ ent's activities in
relation to local planning transferred to the Ministry of Town and
Country Planning. A reading of the parliamentary debates and
official and professional reports on the reasons for this change shows
that one of the reasons is that experience demonstrated that the
locating of housing projects is not likely to be wisely determined unless
that determination is made in accordance with a city or urban regional
plan made by a plannmg agency. The issue is not one of the ability
or character of the individuals wdio occupy official positions in the
housing agencies or in the planning agencies, but in an inevitability,
arismg out of universal human nature, of the effects of placing specific
functional uses, such as housing, in the agency upon which the public
relies for that technique of the integration or coordination of all the
uses of the land of an area, district, city, or metropolitan region which
we know as city or urban planning.
If our urban economy is to be made beneficial to the national
economy and vice versa, then a Federal agency which will be the con-
tact agency between the Federal Government and local planning is
urgently needed, and this is time to bring it about in relation to this
all-important matter of urban redevelopment. Whether this Federal
agency should be a single-head agency with an administrator whose
office is now created for the first time or a multiple-headed agency
composed of heads of other agencies, such as those in charge of public
works, public buildings, public roads, interstate commerce, civil aero-
nautics, national housing, and so on, is a minor detail compared with
the basic principles above presented.
This brings us to the Thomas bill, S. 953 — I am not certain, Mr.
Chairman, whether these bills are considered pending bills.
POST-WAR ECONOMIC POLICY AND PLANNING 1611
Senator Taft. They have not been introduced as yet. No doubt
they will be. This committeo does not have specific bills before it,
anyway. We are considering all the bills introduced in the last session
as well as this one.
Mr. Bettman. This brings us to the Thomas bill, S. 953, in whose
composition I have had a part in association with Albert H. Hansen
and others. Incidentally, there may not be complete awareness that
the Thomas bill has been revised (committee print, December 10,
1943), representing not only a substantial shortening, but also many
otlier changes ni important features responsive to the criticisms and
suggestions which were received from numerous qualified sources.
This shorter form should be considered as the pending bill and em-
bodies, as is respectfully claimed, such sound principles of Federal
legislation relating to the organization and procedures of the Federal
pait in urban redevelopment, as well justifies its use in the process of
producing the final form of a Federal statute for aid to municipalities
for land assembl}' for urban redevelopment.
The great amount of detail in the original form of the Thomas l)ill
has been greatl}^ reduced, but the bill adheres to the sound principle
that the planning is a local matter; though of course, in determining
whether or not to grant aid, the Federal agency inevitably w^ill con-
sider the quality of the submitted plan. By its careful definition of
what is meant by master plan, planning agency and area redevelop-
ment plan, the bill would help the localities without controlling their
discretion beyond the necessities of the administration of Federal aid.
One debatable polic}^ embodied in the bill is that the disposition of
the redevelopment project areas is limited to the leasing of the areas,
sales of the areas being thereby excluded. While there is much to be
said in favor of a lease land tenure policy as promotive of the stabiliz-
ing of the plans upon which the Federal aid would be based, neverthe-
less the time may not have as yet arrived for the adoption of that
policy, and in that respect the Thomas bill should perhaps be changed
so as to permit sales of federally aided areas as well as leases.
Coming to the not unimportant question of the forms or modes of
Federal aid:
As it stands at present, the Thomas bill provides for advances re-
payable, plus 1 percent, out of the proceeds of the areas so far as they
reach, and does not call for the issuance of municipal securities with
definite interest and principal maturities.
Senator Taft. Does it provide for a municipal obligation to repay
the money put up by the Federal Government?
Mr. Bkttman. Not only to pay over everything received from the
area, but to pool and pay over everything received from all areas in
aid of land assembly for which Federal money has been advanced.
There is presented herewith a statement of Alvin, H. Hansen
entitl(>d "Three Plans for Financing Urban Redevelopment," one of
which plans is that embodied in the Thomas bill, one for local financ-
ing with Federal guaranties, and one for Federal loans at so low a
rate of interest, IJ2 percent, and long maturity, 100 years, as to offer
some promise that the difference between land-acquisition cost and
disposition yield may be absorbed by means of this low rate and
long maturity.
Senator Taft. I think it would be wise to insert also in the record
this committee print of the Thomas bill which, I presume, will be
1612 POST-WAR ECONOMIC POLICY AND PLANNING
the basis of the new bill introduced. I think that ought to be inserted
in the record in connection with your testimony.
Mr. Bettman. Yes. I have brought along a committee print,
and I have also brought along a mimeographed copy which is easier
for a layman to read.
Senator Taft. Just leave the mimeograph copy with the reporter.
Mr. Bettman. One hundred years may strike you as a long time,
but we are dealing only with the financing of land, which lasts beyond
100 years.
Senator Taft. The 100 years docs not strike me so much as the 1
percent. It would be hard to explain to farmers why you loan them
money at 4 percent and charge the cities only 1 percent.
Mr. Bettman. The idea was if you make it a low rate with a long
maturity you could thereby absorb the difference between what I
call acquisition cost and disposition yield.
What with the novelty of all financial problems involved in urban
redevelopment, all proposals regarding the fiscal provisions of a
Federal-aid statute are necessarily somewhat experimental and
exploratory. The important consideration is not whether the Federal
Government is going to get back every penny it puts out for this all-
important objective, nor even the very important stimulus to em-
ployment and construction materials which urban redevelopment will
produce, valuable as that consideration is. The recovery of the
economic and social soundness of the urban communities is the all-
important ultimate goal, and the most important consideration to
be applied in the determination of the mode of Federal aid is that it
tends to promote instead of to discoin*age the most genuine selection
of areas for redevelopment according to need and the rebuilding or
rehabilitation of these areas in accordance with best city planning
principles and techniques, including standards of population density
and building intensity, which will prevent a new era of blight and
represent a quality of urban living fit for American citizens.
Senator Taft. Mr. Bettman, as I remember the bill from reading it
at the time it was before the Education and Labor Committee, this is
still a local project; that is, the locality itself has to mitiate it.
Mr. Bettman. Oh, yes.
Senator Taft. Has to plan it entirely.
Mr. Bettman. Oh, yes.
Senator Taft. Of course, it is necessarily a local project or a State
project, because the laws of excess, condemnation, and so forth, are
all matters that the Federal Government could not itself intrude on
very well.
Mr. Bettman. All the powers to do this thing have to come from
State enabling legislation.
Senator Taft. So all you are asking the Federal Government to do
is to finance the acquisition of blocks of blighted areas?
Mr. Bettman. That is right.
Senator Taft. To finance it on, as I see it, rather low, favorable
terms.
Mr. Bettman. That is correct.
Senator Taft. And, of course, in the furnishing of that aid you pro-
pose to give them some power over the planning, to approve or dis-
approve, at least, to say whether the Federal Government will finance
that particular plan.
POST-WAR ECONOMIC POLICY AND PLANNING 1613
Mr. Bettman. Inevitably tlic administrator of Federal aid would
liavc to be satisfied that the commumty has a good plan.
Senator Taft. Yes.
Mr. Bettman. That he would have to be satisfied with the plan is
made oblitratory. In other wonls, that the plan on which the Federal
aiil would be advanced follows the man into whose hands it comes and
may not be modified witliout goinjj; back to the Federal administrator
to consent to the modilication. Naturally, it may happen that some
mistake was made in the plans, but the Federal-aid administrator
would certainly want to know that those legal steps had been taken,
that the State legislation and urban legislation and the urban adminis-
tration assured the carrying out of the plan on which the Federal aid
Avas based.
Senator Taft. I suppose there are no estimates on the amount that
might be called for. It is really an experimental proposition.
^Ir. BetTiMax. It is quite experimental. It has been estimated that
the total cost of assembly of blighted land in this country runs from
$12,000,000,000 to $15,000,000,000, which, if you spread it out, would
carry a proposal of $750,000,000 per annum.
Senator Taft. Does the bill authorize any particular subsidy?
Mr. Bettman. The bill leaves a blank on that in its present state.
In the original bill some small figure was put in just to start things,
but at that time there was no esti?nate. It has now been estimated
that between $12,000,000,000 and $15,000,000,000 of property acqui-
sitioned will be necessary for this long-term process. It is a long-
term process; it would naturally extend through a generation or two.
Senator Taft. Is it proposed in the bill that there will be some
contribution from a local cojmn.unity, or a city, or a State?
Mr. Bettman. There is nothhig in the bill which provides that.
You see, the bill provides that all of the yields of these areas— I am
talking of the municipality, of course — will be turned over for the
recovery of the payment for land assembly. If, therefore, you divide
the aid 3'ou will have to divide the yield.
Senator Taft. As I understand, the city assumes no financial obli-
gation beyond that of repaying the Federal Governm.ent and of any
revenues received from the project?
Mr. Bettman. No general obligation.
Senator Taft. It puts no credit of its own into the project at all,
under this bill.
Mr. Bett.man. That is correct. The difficulty comes from the
constitutional and statutory debt limits in various States. The
extent to which a city can commit its general credit, beyond the yield
of the area, is sojuething that has to be explored. There is no experi-
ence that answers the question. You know, for instance, in the State
of Ohio every conimittment of general taxes involves the debt limit
calculation and requires an annual levy of tax. You may rem.ember,
Senator Taft.
Senator Taft. Yes.
Mr. Bett.man. And probably some analogous to that exists every-
where. The bill does not j)rovide for any type of tax exemption, nor
does the corresponding jnodel of State-enabling legislation which wo
are also working on.
Senator Taft. If the plan that was made called for some part of it
to be developed for a public park, would there be some way in which
1614 POST-WAR ECONOMIC POLICY AND PLANNING
the city, or whoovor would get the park, could assume the obligation
to buy that part of it at least?
Mr. Bettman. In those parts of the area which are devoted to the
ordinary public uses, such as parks, recreation centers, playgrounds,
civic buildings of any kind, any public use, the city would actually
pay for it in the usual way, by its usual general credit bonds.
Senator Taft. I suppose there might be such an obligation asked
for in advance.
Mr. Bettman. Oh, undoubtedly, Senator Taft. In other words,
the public assembles the land. The corrm.unity asscm-blcs the land
either through the ordinary administrative organization or through
special developmental authorities created for the purpose. Now, all
portions of that asse:.nbled land which go into streets or which go into
playgrounds, or which go into any other type of ordinary public use —
I am leaving housing out now — there the community would pay for it
by its ordinar}^ general credit bonds. The community would have to
throw into the pot, for the return of those advances, that amount of
money which represents the cost of those particular parts of the area,
and, of course, for that it would pay out of its general credit bonds or
general revenue.
Senator Taft. My doubt is about the Federal aspect — not the plan,
because I fully agree with the idea — about the Federal interest in it.
We have been appointed a special housing committee. Tiie Federal
Government is committed to a policy of housing. I have assumed
that it is committed to that policy, up to a date at least, on a social-
welfare ground. The Federal Government is saying: "We are inter-
ested in providing a floor under essential services so we can eliminate,
as far as possible, extreme poverty and hardship from the United
States, because we have got production sufficient to do so." Housing
is one of those things. Our policy is justified on the ground that we
are going to provide everyone in this country, by the time we get
through with our plan, with decent housing, and if the economic con-
ditions are such that a man cannot earn enough money to pay "for
that housing, we are going to subsidize the housing.
Now, it seems to me a step beyond that, to go out and say that we
are interested in what a city looks like, or whether it has a lot of
tumbled-down structures around a railroad yard. I do not see what
that has got to do with it. When you separate it from the housing
end of it, I cannot quite sec what the Federal Government has got
to do with how Cincinnati lets itself look, or how any other city lets
itself look.
Mr. Bettman. If it were only a question of looks, there would not
be very much worry about it. It is an economic disease.
Senator Taft. What does that mean?
Mr. Bettman. That means that the city is maintaining huge
portions of its area into which it has thrown huge investments in
pipes, poles, street pavings, and what not, for which it spends huge
operating costs, for police, fire, and what not, but which, in themselves,
have no vigor, have no economic vigor.
Senator Taft. That does not affect me at all. I think that is just
talk. I mean, for every structure that is destroyed around the rail-
road yard a new one has been built somewhere that is more valuable
for that use. The tax revenue has steadily increased, except in a
POST-WAR ECONOMIC POLICY AND PLANNING 1615'
very recent period. Surely, I think the city ought to do something
ftboiit it, but I do not see any economic disease affecting the United
States of America in an}' respect. i^
Mr. Bettm.\x. If 25 percent of 3-our urban territory is bhghted, I do
think tluit all'ects the national economy.
Senator Taft. I tio not see where it affects the national income
in any way. As a whole, the city is still sound. The city has more
people, more manufacturing establishments. It does not spend vast
sums on these areas. Just as any man who bought real estate there
and i)erhaps made a profit when it went up in value, and now it is
going down in value and he loses, so tlie cit}' loses in a particular area,
but it can more than make up for it in some other part of the city.
Mr. Bett.m.\x. ^Yhat are you going to do with that area?
Senator Taft. I don't care what you do with that area. That is a
local concern. I cannot see how it affects the national economy in
any way.
Senator Ellender. Usually, you have a lot of poor people living in
those blighted areas.
Senator T.\ft. I am willing to do something to the extent that the
blight is a housing blight. Beyond that I run up against the difficulty.
Sir. Bettmax. If it is just a question of rebuilding for poor people,
you have a relatively easy question. You just decide who are poor
people, what standards you want to use to rebuild for them and
liow much money you want to spend of public money in addition to
the private money. That is relatively simple, but it is more than the
poor people, it is an economic disease right in the vitals of your city.
Senator Taft. I cannot see that. I have gone through those areas
in Cincinnati. Sure, some people have lost money on real estate and
those areas do not look very pretty, but I cannot see any economic
diseases that afl"ects the United States as a whole in any way. Cin-
cinnati is just as good a city as it ever was, and it is going to get better
constantl}'.
Mr. Bettman. If you had an industrial plant here. Senator Taft,
and its whole lay-out, its whole equipment, its whole construction no
longer fitted modern technological modes of manufacture, but you
kept it up, kept paying for all of it, kept operating all of it and then
ad(k'd some more, 3'ou did not just rebuild that, you left that as it is,
then you rebuild for your whole population anew and build your
whole industry anew, A^our whole activity was a new activity and at
the same time you kept all that old plant up, paid the operating ex-
pense of all that, I would say you would engage in an economic waste
that would bankrupt your industry.
Senator Taft. Not at all. Industry after industry has done the
same thing. The steel industry today has decrepit steel plants which
they are carr3'ing on. Sooner or later they sell them, or they tear
them down, or someone else comes along and finds use for them.
Mr. Bettman. That is what we are talking about, a use for this
area.
Senator Taft. That applies to individual property. As far as
planning for the whole business is concerned, I cannot see what efl'ect
it would have on the national economy, and I cannot see the national
interest in it. I have been unable to understand what that interest is.
Mr. Bettman. Rebuilding is itself a method of increasing produc-
tion and employment.
1616 POST-WAR ECONOMIC POLICY AND PLANNING
Senator Taft. If that justifies public works of a purely local
character we would have Federal participation in building all the
schools in the country, all the hospitals in the country, and everything-
else.
Mr. Bettman. I say that is a temporary result. I do not believe
in emphasizing that. It is the immediate strong motive. We ought
to have reemployment immediately. That is temporary. What
counts is the fact that you permanently invigorate and put health
into a very large territory which is capable of maintaining all your
aspects of urban life, not merely the poor.
Industry tends to decentralize, therefore those types of habitation
which are incident to industry should likewise be decentralized and
not be forcibly kept in an old area.
Senator Taft. Nobody wants to use those areas and there isn't any
good commercial use for them. Of course, if they can be used for
housing, we have got a plan to do that. We can permit that, but if
their only use is a commercial use, it seems to me it ought to be an
economic commercial use that somebody would w^ant, or if it is public,
the public can go in and acquire it for parks. The city can do that.
Mr. Bettman. Well, it can be used for parks, parking places — all
sorts of use, and some of it might be commercial.
Senator Taft. As far as any of it is needed for parking places,,
people W'ill acquire it for parking places. There is a steady growth
in Ibe use of places for parking.
Mr. Bettman. Yes.
Senator Taft. They are not so pretty, I agree.
Mr. Bettman. I am not talking at all about looks. If I said a
word about looks it is a slip of the tongue. I never intended to say
anything about looks.
Senator Taft. I don't know. It seems to me that public support
for an urban redevelopment plan is based on looks. Rebuilding an
area so it is better looking than it was before, that produces the public
support for it. I don't know what the thought is.
Mr. Bettman. We go to Naples in order to look at those old
tumbled-down areas because they are picturesque.
Senator Taft. It is a different kind of picturesqueness.
Mr. Bettman. They arc bad; their social effects are bad; they are
a manifestation of economic sickness. I am not talking about looks
at all.
Senator Taft. There may be a manifestation of economic sickness
there, but it seems to me that is no reason for saying the city of
Cincinnati as a whole is economically ill or is not doing as well as it
ever did.
Mr. Bettman. It is paying for the maintenance of an investment
in a territory less and less fit for the different contemporary uses of
its citizens.
Senator Eli.ender. Does not that go to the question of a return
to those who own that property?
Mr. Bettman, We know very well if you take the areas as a unit
and figure the cost and return, it would cost six or seven times what it
would return. In other words, it has a declining tax value. Increas-
ing vacancies decrease tax payments.
Senator Taft. I should question that. Except that it is decreasing
in tax payments, I should question whether that gets beyond the area.
POST-WAR ECONOMIC POLICY AND PLANNING 1617
Kliniiuato tlu> rcsidciitijil ([uostion aiul 1 douhl wlu'lhor it costs (lu;
city anythin*; substantially. The streets that run through it are
throuirh streets that you have to have auywa}^ as a rule. I would
question whether there is a great expense connected with that kind
of an area, apart from tlu> slum area where bad housing produces the
crime — 1 agree with that.
Mr. Bettmax. The areas are mixed, tlu>y are full of all kinds of
things, as you know, such as abandoned retail stores, or until some-
body moved upstairs of what used to be a warehouse, abandoned
decrepit storage places of all kinds into wliich some persons may
have moved, some ramshackle little houses, old houses scattered
around in the midst of these abandoned or decrepit ex-retail, ex-
storage, ex-wholesale structures. As a rule, it is a mixed situation.
The blighted areas are not all fit for habitation. We use the word
"slum" for those types of areas which are permanently habitation
areas, but these areas are not all habitation areas, they arc all decrepit,
obsolete areas, where there are vacancies, where they have declined
in tax values and they have declined in tax production. There is
nothing to show they have declined in public cost.
Senator Ellender. I am free to confess I have misunderstood your
proposition.
Mr. Blttman. Yes.
Senator Ellender. I am inclined to the belief of Senator Taft, that
the Federal Government should not step iii and try to remedy the
situation that you just described.
Mr. Bettman. No; but just to aid it.
Senator Ellender. Now, in your proposal you state that for an
area that would be, let us say, called blighted, a certain plan would
be proposed.
Mr. Bettman. That is right.
Senator Ellender. What would you have in contemplation there
in order to repay the Federal Government for purchasing that land
or advancing the money to purchase it?
Mr. Bettman. The area would be turned over to the Redevelop-
ment Corporation, which would pay a ground rent on it, or which
would bu}" it.
Senator Ellender. Who would finance the building of these homes
or review producing facilities?
Mr. Bettman. That would be financed by whatever the ordinary
method of financing of that type of construction is, that is, the group
dwelling with the shopping center. That would be financed like
anything is financed.
Senator Ellender. Would all of that have to be agreed to in
advance before the purchase would be made and the money advanced
by the Government?
Mr. Bettman. The plan would have to be agreed to.
Senator Ellender. I mean the execution of it. You would have
to obtain some method by which the Government would have to be
repaid.
Mr. Bett.man. That is right.
Senator Ellender. According to your view, the whole plan would
be so arranged that the money borrowed from the Government would
be repaid and provision would be made for its repayment,
Mr. Bettman. None of that money would go to construction.
1618 POST-WAR ECONOMIC POLICY AND PLANNING
Senator Ellender. I understand. I am talking now about the
repayment to the Federal Government of the money advanced. All
of that would have to be agreed to in advance.
Mr. Bettman. The area would be turned over to the Redevelop-
ment Corj)oration under a purchase or under a lease, and all that it
paid for the land would go back to the Government.
Senator Ellender. I doubt if you could get such a plan executed.
Mr. Bettman. Why not?
Senator Ellender. Well, to have the plan worked out in advance,
that is, first circumscribe the area and then put a value on it, and then
obtain companies or individuals or agencies to actually agree in ad-
vance to finance the construction of buildings, and so forth, whose
revenues would partially pay to the Government, I am just wondering
how far you would proceed if you depended strictly on the local people,
on private capital. My guess is you would have to come back to the
Government and make most of your money through the Government
on a Government project.
Mr. Bettman. I would not think so, because some of it might be
commercial, which paid for itself, and some might be industrial,
which paid for itself; some might be purely private housing, which
paid for itself. If the housing was the kind that went to F. H. A., I
would say that is a different type of Federal aid. In other words,
whatever the modes of financing were that were required by the con-
struction.
Senator Taft. You tried to separate it very clearly from housing.
I wonder if there is not an inter iiediate step, and inter.aediaLC possi-
bility? That is, that the Federal Government migiit finance the
acquisition where, by doing so, they eliminate a comparatively large
amount of slum housing, where two-thirds of the place is residential.
Mr. Bettman. That is right.
Senator Taft. In order to do that, you might have to help the city
finance a somewhat larger development plan. That seems to me a
possible approach to it. I would regard that more favorably tlmn a
wide open plan.
Mr. Bettman. It would be predominantly housing, because all
urban development is predominantly housing.
Senator Taft. I had in mind whc'Jier in dealing with the housing
problem, we should, to an extent greater than at present, separate the
slum-clearance idea and motive from the construction of new housing.
It occurred to me, in that way the thing might be worked out.
Mr. Bettman. You see, the financing of the construction would
take whatever forms it usually takes imder other laws. It might be
perfectly private mortgage laws, it might be F. H. A. laws. What-
ever the modes of financing construction are, under other laws, would
be available.
Senator Taft. The elimination of slums always seemed to be a some-
what different problem from the low-cost housing question.
Mr. Bettman. I am not talking about low-cost housing, because it
does not follow because a slum is down here to day that low-cost
housing is the type of thing you should put in there. You must not
assume that in advance. It is a problem of planning for the city as
a whole.
Senator Taft. It seems to me we had testimony here yesterday or
the day before — it was not very definite, but it implied that the cost
POST-WAR ECONOMIC POLICY AiND PLANNING 1619
of low-rciit housing was prjicticiilly $')0() a unit ii;roat(>r if it aroso out
of the eliniiuatiou of slum areas. It doos not scorn to me that cost
ou«i;ht to 1)0 taokod on to low-cost housiu|r. That is an elimination
problem rather than the provision of new housin^r. I thou«2:lit per-
iiaps we miirht sepaiate those, and tlu>n have some plan, perhaps modi-
lied alons; your lines, for (h(> elimination of slum housing.
Mr. Bin'TMAX. Tin; [>i-()i)leui is i^ettinfj; these areas in shape for
robuildin*:, the cost of jjetlin.ii; thcju up to a. point where they arc in
shape for rebuilding. 1 do not mean physical shape, but I mean
legal shai)e for n^building.
Senator Ellexder. According to your plan, .you would have to
have all of that agreed to before you took the land over: In short, you
could be compelled to finance the purchase of the land and provide for
repayment. That is the problem, as 1 sec it, and it would ])e diflicult
of solution.
Mr. Bettma.n. 1 have assumed that the American people are not
ready to permit their municipalities to pick up land without having n
plan as to what to do with it. That is a possible concept, thr,t the
city has the power to pick up hind here and there without having any
plan as to what to do with it. This assumes we are not ready for that
policy. Whether we ever will be or not, I do not know. We must
know what to do w"ith the land before the municipality shall have the
legal po\\'er to acquire. That is why a use plan for the area is made a
condition requisite to the power to acquire the land or to get Federal
aid for the cost of exercising the pow er of acquiring the land. If you
want to enter on a general policy of cities picking up lands knowing
that sooner or later they w ill have a good use for them, that would be a
different thing. The plan is made a requisite of the power to assemble
the land simply because the city should not have general, unlimited
power to buy the land or to get money from the Federal Government
just to buy land.
Senator Taft. Are there any further questions?
If not. thank you very much, Mr. Bettman.
Mr. Bettmax. Thank you very much.
(The matters heretofore referred to are as follows:)
Statement of the American Instittte of Planners (throcgh its Committee
ON I koi.slation) Concerning Federal Legislation for Aid to Urban
Redevelopment Within the States
By urban redovolopment is meant, the rebuilding, rehabilitation, and recondi-
tioning of what are known a.s the t)lighted districts of American cities. Blighted
districts are those portions of urban areas in which, owing to the otjsolescent
condition or character of existing buildings, or the ob.solete lot. and street layout,
or the obsolete character of the existing land uses, or combinations of the.se factors
or cau.ses, there is a state of decline and stagnation of development, thereby
damaging the prosperity of our urban communities, the tax bases upon which
municipal revenues depend, with harmful efT(>cts upon the health, jirospcrity, and
welfare of the inhabitants, and the cure of which necessitates a redesign or re-
planning of the areas and such disposition of the areas as w'ill produce rebuilding
or rehabilitation in accordance with the replaiming.
Blighted districts include slums but are not limited to slums. Urban redevelop-
ment legislation deals with sick areas, whether they be new housing, commercial,
industrial, or, as is usually the case, mixed.
While the largest jjortion of the needed redevelopment, as indeed of all urban
development, will be for housing, that is for habitation, it is of the utmost im-
portance to realize that urban redevelopment is not be to restrict<>d to slum areas
or to housing; that urban redevelopment legislation, though important for hou.s-
ing, is not housing legislation, and that the appropriate organization, procedure,
1620 POST-WAR ECONOMIC POLICY AND PLANNING
and basic principlos for the redevelopment of Vjlightcd, including slum, areas,
should not be identical with those which might be advocated were we dealing
exclusivciv with slum areas or with redevelopment exclusively for housing.
Indeed, ifthe housing itself is to be located where it ought to go and not be simply
a begiiHiing of a new era of blight, the legislation for the redevelopment of blighted
(including slum) areas should recognize that urban redevelopment must be planned
by urban i)]anni;ig, not housing, agencies and the assembling and disposition
of the land for the redevelopment must be administered by administrative re-
development, not housing, agencies. As was well stated by Mr. Lancjdon Post
in the conference held by the Califcjrnia .State Reconstruction and Reemploy-
ment Commission (Sacramento, October IS, 1944):
"The local housing authorities are merely another agencj' through which the
dis])ersal agency, the urban redevelopment agency, could negotiate and deal for
the Durpose of rehabilitating an area which the planning commission believes is
suitable for that kind of housing."
Housing agencies, public and private, will take over and do the constructing
on the areas which are to be used for housing; but there will be no sound urban
redevelopment unless the planning and assembly and disposition of the areas be
in charge of ]«lanning and administrative bodies whose functions are not weighted
with either exclusive or overmastering concern with one functional use, even
habitation.
In his article on Urban Redevelopment Explained, Gen. U. S. Grant 3d,
listed as tyi)es of blighted areas —
"Blight is an urban disease which, like leprosy, is undermining the economic
vitality of our cities, while manifesting itself in various sj^mptoms. Among these
we readily recognize (a) areas of decreasing taxable and use values, without
corresjionding decrease in municipal operating and maintenance costs; (b) areas
gradually being abandoned or relegated to uses incongruous with the character
of surrounding neighborhoods; (c) areas incapablij of adequatj deve!opme7it in
the normal way because of initial faulty subdivision, topographic obstructions, or
the thoughtless intrusion in the past of artificial obstacles to normal develop-
ment; (d) finally, slums with their squalid and overcrowded conditions, breeding
crime, disease, and only too often bad instead of good citizens. * * *
"In conclusion, one thing needs to be emphasized: Urban redevelopment is
not merely an effort to provide decent homes for the poor with the help of Govern-
ment powers and subsidies; it is much more, it proposes to take back into public
ownership the parts of our cities that are blighted, to replan them so as to adaot
them to the economic and social requirements of today, and to rebuild them as
balanced and healthy, stable Darts of the city with the facilities and amenities
recognized as essential today. Slum clearance will necessarily be included as an
important element, but only one element of the redevelopment. "
Urban redevelopment legislation is intended to provide orincinles and pro-
cedures whereby the land in the blighted (including slum) areas will be assembled
and then leased or sold to develoners, to be redevelooed in accordance with sound
redevelopment plans. Such legislation is therefore not concerned with the
financing of construction, whether public or private or for housing or other uses.
The grant of powers to the municipalities to assemble the land, to make the
redeveloi)ment plans and lease or sell the areas subject to the plans will, of course,
have to be derived from state enabling legislation, and consequently Federal
legislation in this field will be concerned with Federal financial aid to the munici-
palities for these purposes, with the conditions to be attached to such aid, and
with the organization, administration, and procedures for such aid.
Obviously urban redevelojiment offers the opportunity for large-scale employ-
ment of labor and purchase and use of materials, and, from that point of view, is
worthy of the favorable attention of the Federal Congress. Furthermore, so
considerable a portion of the inhabitants of the United States are adversely
affected by the blighted conditions which urban redevelopment is intended to cure,
that the problem calls for national attention by virtue of its scale. Furthermore,
the gradual and progressive cure of urban blight is so necessary, not only for the
reduction of the social evils produced by that blight, but also for the economic
soundness of urban communities, that the whole national economy is adversely
affected by the continuation of that blight and will be beneficially affected by its
cure. These considerations demonstrate the justification for Federal financial
aid if needed.
There can be no doubt that Federal financial aid is needed; and the obvious
reason for this need is that, under the present Federal, State, and local taxation
systems in this country, the revenues directly available to the localities are in-
sufficient, and some of the moneys which the citizens and residents of the cities pay
POST-WAR ECONOMIC POLICY AND PLANNING 1621
for taxes levied and collect od by the Federal Covermii(>iit may fairly he considered
as local revenues which, under our tax system, are payable to the Federal Ciovern-
ment and which the Federal C^iovernment ou^ht therefore return to help meet such
imperative situations as those produced by urban blight.
We therefore submit the following princii)les of Federal urban redevelopment
legislation:
First. 'Jhat the Federal Government should furnish aid to the urban com-
munities for urban redevelopment, which means funds to be applied to the
assembly of the land of blighted districts and the areas thereof.
As Federal aiii on a substantial scale would furnish so prime and effective a
stimulation to urban redevelopment, and as, furthermore, all of the moneys which
the nuinicipalities would realize from the leases or sales of the areas would be
npj)lied to the reimbursement of the aid, we do not see any good reason for re-
quiring State aid as a condition of Federal aid — a requirement which would
uiuiecessarily delay and complicate the redevelopment process.
Second. The planning of the redevelopment, the administration of the land
assembly and the leasing and selling of the areas and the administration of all the
details of the redevelopment should be left to the local governments, and the
Federal Governii.: nt should not in'i)ose any particular plan or any particular
administrative organization upon any municipality. Naturally the Federal
Government should require the necessary State and local legislation, and possibly,
in the administration of the Federal aid, some standards for this legislation might
well be prescribed; perhaps even a few more or less standardized clauses in leases
or sales of areas, as, for instance, forms of assurance that the redevelopment plan
will be carried out and maintained and modes of protection and enforcement of
the plans; possibly going so far as to specif}' that, with appropriate financial
adjustments, leases or sales would permit the recapture of the area by the com-
nninity if that should prove to be necessary to prevent the rcdecay of the area.
But the redevelopment plans themselves and the administration of the redevelop-
ment should be left to the uncontrolled discretion of the local governments
thein.selves.
Tliird. One of the standards which should be imposed as a condition of Federal
aid is that the municipality wliich receives it shall have an official planning
agency and that that agency shall formulate what is called a master plan which
would serve as a guide to and toi^l of integration of the more detailed and par-
ticularized redevelopment plans of the redevelopment areas.
The master plan shouki therefore contain at the least the general extents,
locations, and characteristics of the distribution of the uses of the land of the
planned territory for communication, transportation, industry, business, recrea-
tion, education, public buildings, and other general categories of public and
private uses of the land. Then before any Federal aid for the land assembly
of any proposed redevelopment area occurs, a redevelopment plan should be a
requisite which would, with a considerable degree of definiteness, specify the
extents and locations of the proposed land uses within tlie area for habitation,
education, recreation, civic activities, transportation, sanitation, and the other
clas.ses of public and private land uses, as well as standards of population density
and building intensity, and con.sequently the locations and extents of open spaces,
I)ublic and j)rivate. In the intarest of soundness from the point of vi;nv of both
.social and economic values of the area redevelopment plan, the legislation should
require that the planning agency shall make the area plan subject to the approval
of the governing l>ody of the municipality.
Fourth. On the important question of the character of the Federal agency
wliich will be in charge of the Federal aid, while there is present as usual the ques-
tion of whether it should be sinirle headed or a nuiltii)le-headed agency, the im-
portant specification is that, as the soundnnss of (h(; redevelopment is dejx'ndent
upon the soundness of the {)lanning for all the functional land uses and activities,
the P'ederal agency which administers the Federal aid shall, analogous to the
local ijlanning agency which makes the plan, be primarily interested in the
planning for all the categories of land uses and not in one or a few of the functional
lanrl uses, such as housing or highways or Federal public works. It is for this
reason that a housing agency or any agency which has charge of construction oi
administration of any other functif)nal lanrj use or facility is not the appropriate
agency to aflminister Ferleral aid for urban redevelopment; nor is there in the
present organization of the Federal Government any agency which is appro-
priate for this function. At the .same time, we call attention to the fact that
while almost every administrative agency in the Federal structure has relations
ships with municipal land u.ses, as, for instance, the Corps of Army Engineer-
1622 POST-WAR ECONOMIC POLICY AND PLANNING
with local flood works, the Bureau of Public Roads with highways running
through the municipalities, the Federal works agencies with numerous classes of
public works and utilities, the National Housing Agency with public and private
housing, and so on, still, there is no one public agency whose function is that of
Fffieral relationships with the planning of the cities and with the integration
and coordination of all the functional types of physical development, public
and private. Federal, State, and local; and, as sooner or later, such a Federal
agency will need to be established if we are going to realize in our urban com-
munilies the social and economic benefits of good developmental planning, this
would seem to be the appropriate lime for the establishment of such an agency
in connection with urban redevelopment aid.
Fifth. On the question of the form which the Federal aid should take, the main
question being the conmiitments which the municipalities should be required to
make, it is important that, in view of the unpredictable elements, the munici-
pality to which the aid is furnished should not be required to commit itself to
a repayment out of its tax revenues; for, unless the aid is furnished at so low a
rate of interest and with such long-term maturity that the direct returns from the
ground rents and iirocceds of sales of the areas will cover the obligations attached
to the aid, the municii)ality will be tempted to such a selection of areas for re-
development and such i)opulation density and building intensity standards that
assurance of getting enough out of the areas to repay the aid rather than sound
standards would become the controlling motivation. It would be unfortunate
if the redevelopment to cure one area of blight should become the beginning of
another era of blight.
There is good reason for the trust that in the long run urban redevelopment will
directly pay for itself, that is, will produce direct rentals or sales proceeds suffi-
cient to pay the cost of acquiring and assembling the land. But it is the long-run
pooled proceeds of the whole process of redevelopment which should be relied
upon and not the results of any particular area or of the early areas chosen for
redevelopment.
For these reasons the best policy would seem to be that the financial obligations
required of the municipalities relating to the repayment of the aid be to pay over,
up to the aggregate extent of the aid, the revenues and proceeds derived from
the areas in which the aid is used for land assembly. This means that the securi-
ties which would be demanded from the municipality be income or revenue type
of security in which the general credit or tax revenues of the localities are not
committed.
On the subject of interest for the advances, we believe the Federal Government
could well afford to make these advances without interest, or at least require not
more than 1 percent to cover administrative expenses.
The American Institute of Planners, whose members may be said to constitute
a group which, by virtue of their professional and official vocations, has had
greater occasion and greater facilities for the study of the problems involved in
urban redevelopment than any other group, begs to submit the foregoing con-
siderations to the Congress of the United States and to the committees and sub-
committees to which the pending urban redevelopment bills have been referred.
Respectfully submitted.
The American Institute of Planners
(Through its Committee on Legislation),
Alfred Bettman, Chairman,
Charles W. Eliot 2d,
F. A. Pitkin,
Flavel Shurtleff.
By Alfred Bettman, Chairman.
Three Plans for Financino Urban Redevelopment
(By Alvin H. Hansen)
A. THE NEED FOR URBAN REDEVELOPMENT
Any plan for financing urban redevelopment must go straight to the roots of
the conditions confronting towns and cities in the United States. Slum and
blighted areas are spreading in all urban communities. Financial limitations,
both in terms of statutory limitations on local debt and taxable capacity, make
it impossible for cities and towns to cope unaided with this problem.
POST-WAR ECONOMIC POLICY AND PLANNING 1623
Yet tlie need for redoveJoiMiiont is groat. About one-third of the total urban
population live in slums and badly blighted districts. The incidence in slum
areas of major crimes, juvenile delinciuency, tire hazards, tuberculosis, and other
preventable diseases — far in excess of the city as a whole — are well known. Cities
service costs in slum and blighted districts are frequently six or seven times the
tax revenues. Slum and blight is not only a social problem; it is a problem of
urban finance.
To tackle this problem it is generally recognized that the land in the slum and
blighted areas must be assembled and brouglit )inder unified control. The acqui-
sition and assembly of the land, and the making of a comprehensive land-use
plan should be undertaken by the munici|)alities themselves. But municipal debt
limitations and fiscal incai)acity make it impossible for the cities without aid
from the Federal Government to finance the land purchase program.
In accordance with the redevelopment plan, part of tlie assembled land must
be used for parks, playgrounrls, streets, and public buildings. A sound redevel-
opment program requires more open spaces. Standards must be imposed to pro-
tect against excessive density. This is an important part of the cost of a sound
redevelopment program. But most of the assembled land would be available
for residential, commercial, or other business use. For these purposes the land
would be leased or sold by the municipality to private companies for development
in accordance witli the master land-use plan.
l'rl)an redevelopment will stop the spread of blight and deterioration of prop-
erty values. It will strengthen the fiscal capacity of P'ederal, Stale, and local
governments. It is reasonably expected that the direct and indirect returns from
the rede\"elopment process will amply justify the cost of the program from a
strictly financial standpoint. Broad social and economic benefits will accrue to
the community as a whole through the revitalization of our towns and cities, the
elimination of the social and financial costs of slum and blight, and the general
stimulus to construction, emploj^ment, and high income levels.
B. THREE PLANS FOR FINANCING
I shall discuss briefly three plans for financing the assembly of the land. All
involve some measure of Federal aid. Some would involve capital financing by
the Federal Government; others would not. The plans differ also as to the extent
of urban redevelopment which can feasibly be undertaken.
Plan I. Federal loans.
Under this plan it is proposed that the Federal Government make loans to the
municipalities at 1 percent interest with an amortization period of 100 years.
This would make the annual interest and amortization payments 1.56 percent of
the initial loan. A hundred-year amortization period, while inapp^ropriate for
structures, may be regarded as not inappropriate for the purchase of land, par-
ticularly if land u.se is controlled by comprehensive planning.
I'nder this plan the cities would pledge their full faith and credit to pay the
annual fixed charges, interest, and amortization, of 1.56 percent. The Congress
might appropriate the funds available for making such loans, and the annual
interest and amortization payments might flow into a revolving fund to provide
for a continuing program.
Under this plan it is clear that the Federal Government would subsidize the land
assembly to the extent of the difference between the 1 percent obtained on the
loans and the cost of money to the Federal Government.
This plan could enable cities to engage in a considerable amount of urban rede-
velopment without financial cost to themselves. All projects which yielded net
returns equal to 1.59 percent on the purchase price would become feasible for
redevelopment.
There is, however, the danger that municipalities in undertaking a redevelop-
ment project would endeavor to make it pay out by permitting or even encouraging
densities way beyond the limits of a sound development. If excessive densities
are permitted, unsound projects would load again to future slum and blight.
Alternatively, there is rlanger that the cities will .select only such projects as can
cover the fiscal charges, thereby failing to tackle the really difficult problem of
redevelopment of the serious slum and blighted areas.
In some cases it would doubtless be possible for cities to undertake costly
projects by subsidizing the difference between the annual fixed charges and the
net returns from the land rentals.
Everything considered, while plan I is far from adequate or ideal, it is clearly
bf^tter than nothing. While the results would be limited, something worth while
could be achieved under this plan.
1624 POST-WAR ECONOMIC POLICY AND PLANNING
Plan II . Local linancing with Federal guaranty.
Under this plan it is proposed that urban land authorities be created by the
municipalities with power to issue revenue bonds amortized in a hundred-j'ear
period, .such bonds to be fully guaranteed by the Federal Government. Being so
guaranteed, the bonds would not come witliin the statutory local debt limita-
tions. The procedure w^ould be similar to the local financing by local public hous-
ing authorities. Being exempt from Federal taxation, the urban land authorities
could float bonds at a low rate of interest, presumably around 2 to 2i/2 percent
or less. In view of the low interest rate and the long amortization, the annual
fixed charges would run from around say 2.25 percent to 2.75 percent.
Since the bonds are guaranteed by the Federal Government, the difference
between the annual fixed charges and the annual returns from the redevelopment
process would be a liability of the Federal Government. It is proposed, however,
that the municipalities contribute one-third of the annual "loss" — -the difference
between the annual charges and the net return from the lease of the land. With
respect to each development project, estimates w^ould be made of the proV^able
annual net return from the land from which the probable annual Federal subsidy
could be calculated. Thus, with fixed charges of 2.5 percent and net rentals at
1.0 percent of the purchase price of the land, the Federal annual subsidy (covering
two-thirds of the annual loss) would run at $10,000,000 per annum for every
billion dollars of assembled land. The Congress would, however, have to author-
ize complete cover on the guarantee in order to ensure the investor against loss
in the event that the local government failed to make good on its annual subsidy,
and in the event that the net annual returns, from the land proved to be less than
had been estimated. At all events the maximum annual contribution of the
Fed'^ral Government can specifically be set forth, and the probable annual con-
tribution for each development project could be fairly accurately estimated.
This plan has several advantages. In the first place, it would involve no
capital financing by the Federal Government. Moreover, the loca.l financing
(by local land authorities) would not be hampered by municipal debt-limitation.
Both the Federal and the local contributions would consist of annual payments
which could fairly specifically be estimated. The financing procedure would
involve no increase either in Federal debt or local debt.
Plan II is, I think, distinctly superior to plan I. Urban redevelopment can go
farther if a municipality is called upon to provide a relatively small annual
subsidy than if it were to pledge its full faith and credit for the capital financing
of the assembled land.
Plan II has the advantage not only of providing a method of financing involving
neither the increase of Federal or urban debt, but also of providing for local
financial participation and therefore increasing local responsibility. Local
financial participation may, however, impose limits upon the possible extent of
the program. There may be a danger, as in plan I, that municipalities would
undertake only such redevelopment projects as would involve relatively little
subsidy or else would be tempted to make the projects pay out by pushing
densities beyond the limits required by a sound development.
Plan III. Federal advances.
The method here proposed is that of Federal advances of funds to municipalities
for the purchase and assembly of slum and blighted land. This is the method
proposed in the revised Thomas bill.
The Thomas bill provides that the cities shall in no way pledge their faith and
credit to repay the sums advanced by the Federal Government. The cities are,
however, required to pay over to the Federal Government any net returns ob-
tained from the lease of land to private development companies. These pay-
ments from net rentals would continue until the principal sums advanced by the
Federal Goveriunent were i)aid, plus 1 percent aniuially on advances remaining
unpaid. The net rentals thus paid over might indeed never equal even the prin-
cipal sums advanced. The obligation of the city is merely that the payment of
net rentals shall not cease imtil repayment in full of the sums advanced plus 1
percent per annum upon each advance or the balance thereof not covered by
prior naymonts.
Clearly this plan assumes that the Federal Government is prepared to absorb
losses accruing from the difference between the acquisition costs and the use value
of the land. Under the Thomas bill the Administrator is directed, in making an
advance to the local government, to consider broadly the effect of the development
program upon the productivity and real income of the community as a whole,
rather than the probable payments from net rentals which any project area may
POST-WAR ECONOMIC POLICY AND PLANNING 1625
\'wh\. This is precisely the kind of consideration that the Federal Government
has in n\ind when it subsidizes road l)uilding. It does not do so with the idea
of netting direct returns, but rather with the idea of promoting the general pro-
ductivity and real income of the entire community. Indirectly it can be expected
that the benefits flowing from the development program will increase the taxable
capacity of the Federal (lovernment. Thus, wliile direct losses may be suffered,
the Federal Government may nevertheless gain financially when all the indirect
financial In-nefits to the community as a whole are appraised. So far as the direct
returns to the Treasury are concerned, the success of the Thomas bill plan might
be regarded as fairly good if tlie sums advanced were repaid without any interest
whatever. In the case of Federal aid to road construction, no direct returns are
contemplated. Under the redevelopment plan as envisaged by the Thomas bill
very large direct returns woidd flow back to the Federal Government in addition
to the indirect and general benefits accruing to the prosperity of the community
as a whole and therefore to the fiscal capacity of the Federal Treasury.
This plan has tlie great advantage that it would permit urban redevelopment to
proceed on a sound ba.sis without being hampered by the financial limitations of
local communities. Desirable densities could be impo.sed which would insure a
sound development. Cities would not 1)0 tempted to "sweat the land" with
excessive densities in order to pay out. While initially more costly to the Federal
Government, the cost truly appraised may in the end prove to be less than that
of other plans which might limit and restrict the execution of a really sound and
adetjuate redevelopment j)rogram.
It is estimated that the total cost of assembling all slum and blighted land in
this country would not exceed from twelve to fifteen billion dollars. If this
program were sjiread over a period of 15 to 20 years, the annual outlay of the
PVderal Government for capital financing would amount to around $750,000,000 a
year. In view of the enoimous benefits which could be expected to accrue to the
Nation as a whole, this may be regarded as a productive and wise investment and
well within our fiscal means. That it would contribute directly and indirectly to a
high level of national income and thereby lessen the real tax burden, is areasonab'e
expectation.
IS. 953, 78th Conp., 1st sess.]
A BILL To establish the Urban Redevelopment Agency and to provide financial assistance to the mu-
nicipalities and urban areas of the United States for their development in accordance with plans there-
for, and for other purposes
Re it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled. That it is hereby declared, as a matter of legis-
lative determination and policy that —
1. In order to secure sound economic practices with respect to urban affairs
and to reduce to a minimum the expenditures necessary to revitalize and modernize
urban communities, it is nece-ssary to institute a program of planned and ordered
urban development.
2. The replanning and redevelopment of blighted or obsolescent (including
slum') districts and the reduction of the blighting factors in urban development
require the comprehensive planning of the whole of the urban area, and this
planning should proceed without delay.
3. This Act is designed to strengthen the fiscal condition of urban communities,
to encourage and stimulate private and public capital investment in urban
development, to reinvigorate the building construction industry, to provide
useful employment, to increase the productivity of the population, and to raise
national living standards.
Title I
THE UHB.\N REDEVELOPMENT AGENCY
Sec. 2. There is hereby created and established the Urban Redevelopment
Agencv, which shall be administered and the powers of which shall be exercised
by a Federal Urban Uedevelopment Administrator (hereinafter termed ".'Admin-
istrator"), who shall be appointed by the President, by and with the advice and
consent of the Senate, to hold ofTice for a term of five years and until his successor
is appointed and who shall receive a salary at the rate of $12,000 per annum and
shall be removable by the President upon notice and hearing for neglect of duty
or malfeasance, but for no other cause.
1626 POST-WAR ECONOMIC POLICY AND PLANNING
Sec. 3. The Administrator is authorized to appoint without regard to the
civil-service laws a Deputy Federal Urban Redevelojjment Administrator, who
shall act as Administrator during the absence or disability of the Administrator
or in the event that the office is vacant.
Sec. 4. The Administrator is authorized to establish such agencies and to
appoint and employ such officers and employees as he may find necessary for
the proper i^erformance of the duties of the Agency under this Act and may
prescribe their authorities, duties, responsibilities, and tenures and fix their
compensations. The Administrator may delegate any of the functions and powers
conferred upon him by this Act to such officers, agents, and employees as he
may designate or apjioint.
The Administrator may accept and utilize such voluntary and uncompensated
services and, with the consent of the agency concerned, may utilize such officers,
employees, equipment, and information of any agency of the P'ederal, State, or
local governments as he finds helpful in the performance of his duties or the
function of the Agency. In connection with the utilization of such services, the
Administrator may make reasonable payments for necessary traveling and other
expenses.
Sec. 5. (a) The principal office of the Agency shall be in the District of Colum-
bia, but the Administrator may establish branch offices or agencies in any State,
and may exercise any of its powers at any place within the United States. The
Agency may, by one or more of its officers or employees or by such agents or
agencies as the Administrator may designate, conduct hearings or negotiations
at any place.
(b) The Agenc}- may sue and be sued in its own name, and shall be represented
in all litigated matters by the Attorney General or such attorney or attorne3^s
as the Administrator may designate.
(c) The Agency shall be granted the free use of the mails in the same manner
as the executive departments of the Government.
(d) The Administrator may make such expenditures, subject to audit under
the general law, for the acquisition and maintenance of adequate administrative
agencies, offices, vehicles, furnishings, equipment, supplies, books, periodicals,
printing and binding, for attendance at meetings, for any necessary traveling
expenses within the United States, its Territories, dependencies, or possessions,
and for such other expenses as may from time to time be found necessary for the
proper administration of this Act. Such financial transactions of the Agency as
the making of advances, and vovichers approved by the Administrator in connec-
tion with such financial transactions, shall be final and conclusive upon all officers
of the Government; except that all such financial transactions of the Agency
shall be audited by the General Accounting Office at such times and in such
manner as the Comptroller General of the United States may by regulation
prescribe.
_(e) The provisions of section 3709 of the Revised Statutes (U. S. C, 1934
edition, title 41, sec. 5) shall apply to all contracts of the Agency for services and
to all of its purchases of supplies, except when the aggregate amount involved is
less than $300.
Sec. 6. In January of each year the Agency shall make an annual report to
Congress of its operations and expenditures, including advances made or con-
tracted for.
Sec. 7. It shall be the province and duty of said Agency to foster the eco-
nomically sound and socially beneficial development of the urban areas of the
United States in accordance with the comprehensive planning of such areas or
of the municipalities therein; to diffuse amongst the people of the United States
useful information on url)an planning, particularly as affecting or affected by the
national economy; to institute research into the economic and social factors of
the phvsicai development of urban conununities and to analyze, organize, and
disseminate the results thereof; to promote sound principles, methods, and
criteria of nuinicipal and urban area planning and improved financial and other
mechanisms for execution of such plans; and to assist in the coordination between
Federal policies and urban development.
Sec. 8. Neither the Administrator nor any officer or employee of the Agency
shal! participate i" any matter affecting his personal int-^rest or the interest of
any corporation, partnership, or association in which he is directly or indirectly
interested.
Sec. 9. The Administrator may from time to time make, amend, and rescind
such rules and regulations, consistent with the provisions of this Act, as he may
deem necessary to administer and carry out the provisions of this Act and the
functions reposed in the Agency by this Act.
POST-WAU ECONOMIC POLICY AND PLANNING 1G27
Title II
FKDKUAI. ADVANCES PX1K LAND ACQUISITION FOU I'KBAN UEVELOI'MLNT
Sec. 10. The Administrator may make advances to municipalities for the
actjuisition of real property for the carrying out of plans for the cknelopment
(inclu(?inK redevelopment) of the territories of nmnicipalilies, respectively, or of
districts, areas, or other parts thereof or of urban areas of which such munici-
palities are parts.
Sec. 11. Any municipality which receives an advance or advances shall he
obligated to pay over to the Administrator the rentals received by the munici-
pality from and uiuler the lease or leases of the j)roject area or areas in which the
real properties ac(|uired in whoU; or part from the proceeds of the advances may
be located; also the rentals and revenues received by the municipality from any
of said real properties while held by the municipality pending the assembly and
leasing of the project area or areas or after the termination of any such lease for
any cause and pending the consummation of a new lease; also the rentals and
revenues received by the municipality from leases or operation of real property
acquired outside of the project areas but for the protection or effectuation of
project area plan..; also siich portion o'i the rcvenr.es rec(_i\ed by the municii)ality
from any revenue-producing public utility or works for which an advance for real
property acquisition shall have been made under this title as the Administrator
may determine to l)e eciuivalent to a ground rent which, for a similar use, would
be properly chargeable to a j)rivate lessee or operator.
Such payments of rentals and revenues shall contimie until the total payments
by the nuiniciiiality to the Administrator shall aggregate the total amount of
the advances jjlus 1 per centum per annum upon each advance or the balance
thereof not co\ered by prior payments. The instruments setting forth the said
obligations of the municipality shall contain such provisions as, in the opinion of
the Administrator, will secure and effect that the said rentals and revenues shall
be paid over to the Administrator up to the aggregate amount of the advances to
such nuinicipality })lus said per centum.
No ailvance .shall exceed the cost to the municipality, as certified by it, of the
property with respect to which it is made; and the Administrator may require
proof tiiat the cost, whether the property be ac(]uired through purchase, con-
demnation, or otherwise, is reasonable and has not been increased by reason of
the prospective public works and utilities shown upon the master or project-area
plans or by reason of the prospective assembly of the land in the project area in
which the property is located or by the capitalization of earnings arising from
failure to comply with the structural and sanitary standards specified in the
State or local legislation regulating such buildings.
All of the said rentals and revenues received by any municipality from the
project areas and other real properties within such uuinicipality whose acquisition
shall have been financed in whole or part by advances to such municipality shall
be pooled. Payments by a municipality from the pool shall be made semi-
annually, dating from the date of the first outstanding advance to the munici-
pality. The.se payments shall contimie, nor shall any land acquired by means
of an arivance be withdrawn from the pool, until all outstanding advances to
the nninicipalilv and the additional 1 per centum per annum shall have been
fidly covered. The Administrator may require, as a condition of an advance
for the acquisition of real i)roperty in a project area or elsewhere, that the recjuire-
ment to pay over the rentals, revenues, and proceeds as hereinabove .set forth
shall apply to two or more municipalities of the urban area in which such properly
is located; and the Administrator may require that all such rentals and revenues
from all projjcrties accpiired within an url-an area be placed in a common pool
applicable to the advances to all the municipalities of such urlian area.
The .Administrator n)ay retjuire that the net proceeds of compensated transfers
of real properties in the project areas by the municipality to other political sub-
divisions, or other sums, such as grants or loans which represent recoupments of
the cost of real property acquired with the aid of advances under this Act, shall be
placer! in the pool.
The .Administrator is directed, in determining upon an advance, to consider the
social and econonuc consequences of tlie planned long-term development of the
municipality or urban area a.s a whole, the desirability of the project or projects
in terms of the long-run effect of the development program ujion living standards
and upon the productivity and real income of the community as a whole, rather
than the probable payments to the Administrator which that ijarticuiar project
area mav vield.
1628 POST-WAR ECONOMIC POLICY AND PLANNING
Sec. 12. Advances under this title may be made to those municipaHties only as
satisfy the foilowinp; requisites, furnish the following plans and reports, and take
the following actions:
(a) That the municipality has a planning agency.
(b) A master plan made" and adopted by the planning agency and which in-
cludes at least the following:
1. The general location and extent of existing and proposed future major thor-
oughfares, of street railway, bus, railroad, air, water, and other transportation
routes and terminals and of other major transportation and communication public
utilities.
2. A land-use plan which designates the proposed general distribution and gen-
eral locations and extents of the uses of the land for housing, business, industry,
recreation, education, public reservations, and other general categories of public
and private uses of the land. In determining the location and extent of the land
for housing, consideration should be given not only to the transitional but also
to the permanent provision for adequate housing for families to be displaced by
redevelopment projects.
3. A statement of the standards of population density and building intensity
recommended by the planning agency in and for the various districts or other
territorial units shown upon the maps included in the master plan.
4. Sujiporting data including estin)ates of population growth and a general
description of the amount and kind of industrial, business, and other economic
activities for which the planning agency deems that space should be supplied
within the territory covered by the plan.
The Administrator shall have the power to prescribe whether the above-
mentioned plan shall in any instance cover a single municipality or an urban area.
(c) The project area development plan, adopted by the planning agency and
approved by the chief legislative body of the municipal borrower or borrowers, of
the project area in which the land proposed to be acquired is located or for the
effectuation or protection of which development the proposed land acquisition is
necessary, which area development plan shall designate the locations and extent of
streets and other public utilities within the area and the other features of a site
and bulk plan for the development of the area, including the definite and specific
locations and extent of the land uses proposed for and within the area, such as
housing, recreation, business, industry, schools, open spaces, and other categories
of public and private uses. The plan shall include a time schedule of the develop-
ment and of the clearance if any.
(d) A statement by the planning agency, approved by the chief legislative
body of the municipality, of the limitations, restrictions, and regulations to be
imposed or accomplished, whether by exercise of the police power or procured by
purchase or condemnation, of or upon land uses within a territory surrounding the
proposed project area and of an extent satisfactory to the Administrator, for the
purpose of the protection of the economic strength and social benefits of the pro-
posed project area development.
(e) An agreement with the Administrator by the municipality that it will
transfer to or place under the jurisdiction of the appropriate public bodies, ad-
ministrative oflicers, departments, and agencies those pieces of real property
which, in accordance with the project area development plan, are to be devoted to
construction, operation, or use by the municipality or other political subdivisions,
such as the streets and other public utilities and works, public recreational spaces,
schools and other public uses (except public housing); and that it will, without
public bidding but after a pul)lic hearing upon the proposed lease, lease as an
entirety the remainder of the project area, which, in accordance with the plali, is
to be devoted to public housing or to private housing, industry, business, or other
private uses, or to niixtures or combinations of such uses, to a qualified corporation
or public hovising authority.
The initial term of any such lease shall not exceed thirty years; but the instru-
ment of lease may provide for renewals upon reappraisals and with rentals and
other provisions adjusted to such reapprai'^^als. Every such lease .'=hall provide
that the lessee, its successors, assigns, and subtenants shall carry out or cause to
be carried out the approved project area development plan or approved modifi-
cations thereof in accordancowith the time schedule specified in the plan or modi-
fications, and that no use shall be made of any land included in the lease nor
any building or structure erected thereon nor any use of any such building or
structure ^^hich docs not conform to such plan or modifications. All the terms
and provisions of any such lease or the assignment of any such lease by the lessee
POST-WAR ECONOMIC POLICY AND PLANNING 1G29
shall be siibjoct to the approval of the Administrator. The making of the ad-
vance or i)arts th.ereof may precede the actual efTectuating of the lease or the
determination of all the detailed terms and jirovisions of the lease; but the muni-
cipality shall agree that such terms and provisions shall be subject to the approval
of the AdminLstrator before the lease be entered into or have legal validity or
effectiveness.
The agreement by the municipality shall contain provisions to the effect that
the use which the municipality makes or to which it devotes or allows to be de-
voted any real property of or within the project area shall conform to and be
harmonious with th(< category of public or private use for which such property is
designated on the then (that is. at the time of the use) master plan and on tlie
approved project area jilan on which the advance was based or such modifications
thereof as may be consented to by the Administrator. The agreement by the
municipality shall also contain provisions whereby the municipality commits
itself to the carrying out. whether by ordinance, acquisition, or other means, of
the limitations, restrictions, and regulations described in the above subsection
(d) or such modifications thereof as may be consented to by the Administrator.
Sec. 13. Nothing contained in section 12 or elsewhere in this Act shall be
construed to prevent the municipal borrower, pending the devotion of any real
property to the use specified in the approved plan, from maintaining or permitting
the lessee to maintain any improvement which may be upon the property at the
time of its acquisition or from temporary leasing or letting of such property for
a period which will not interfere with the carrying out of the development or
other purpose of the advance in accordance with the time schedule specified in
the submitted plan or in accordance with the agreement entered into by the muni-
cipality in connection with the advance.
Skc. 14. In passing upon an application for an advance, the Administrator is
directed to take into consideration the adjustment of the master plan of the
municipality or urban area to available authoritative data relating to the national
distribution of industry, economic activities, and population; and if the Adminis-
trator deems that the master plan submitted to him by a municipal or urban area
planning agency is based upon untenable population, industrial, or income esti-
mates, he may submit to it a report on this aspect of the plan in order that it may
make such modifications in the plan as may represent a better adjustment to the
national economy and to national planning.
In the interest of a socially and economically sound achievement of the master
plan, the Administrator, in passing upon applications for advances, is directed
to give due consideration to a balanced program of redevelopment of blighted
territory and the development of new areas.
In addition to the plans and statements specified in section 12, the Adminis-
trator may require .such other data as he deems necessary to indicate that the
social and economic strength of the municipality or urban area and of the Nation
will be progressively strengthened by the carrying out of the plans and programs.
The Administrator may attach to any advance any conditions and requirements
in addition to and which are not inconsistent with those specified in this Act.
8k<-. 1.") In the event that at any time or times subsequent to an advance the
planning agency of the municipality adopt any modification of the master plan
or the planning agency adopt and the chief legLslative body approve any modifica-
tion of a project-area development plan the Administrator n)ay con.sent to such
modification of the agreements entered into by the municipality or of the terms
and provisions of any lease made by the municipality as in the Administrator's
judgment might be desirable to harmonize such agreements, or lease, with said
modification of the plan.
Skc 16. The accjuisition or assembly of real property by a municipality and
the holding or leasing thereof for redevelopment or development pursuant to
master and project area plans are hereby declared to be public uses.
Skc. 17. The sinn of $ , to remain available until expended, is hereby
authorized to be appropriated to the Urban Redevelopment Agency for the fiscal
year ending June 30, 1944. to carry out the purposes of this title and for adminis-
trative expenses in connection therewith.
In addition to aforesaid appropriation, receipts from payments by municipalities
to the Administrator under the requirements of section 1 1 of this Act, exclusive
of the additional 1 per centum, shall, without further atithorization or appropria-
tion by the Congre.s.s, be available to the Agency, in accordance with such pro-
cedure as may be prescribed by the Secretary of the Treasury, as a revolving fund
for further advances under this title.
1630 POST-WAR ECONOMIC POLICY AND PLANNING
dp:finitions
Sec. 18. The following terms, whenever used or referred to in this Act, shall,
unless a different intent clearly appears from the context, be construed as follows:
1. "Agency" means the Urban lledevelopment Agency and "Administrator"
means the Administrator thereof.
2. The word "law" includes Federal and State statutes and municipal charters
and municipal ordinances enacted under statutes or charters.
3. The term "url)an area" is meant to designate the combined territory of one
or more municipalities, or one or more municipalities and surrounding unincor-
porated territory, which together constitute an urbanized and urbanizing terri-
tory predominantly used or needed in the future for the location of and sites for
the requirements of urban, as distinguished from rural or agricultural, life, and
therefore possessing such common and interrelated social, economic, and develop-
mental problems as to be an appropriate unit for urban planning. The Adminis-
trator may, for the purpose of the exercise of his powers under this Act, define
the boundaries of any urban area even though such determination include less or
more territory than might be included within an urban area as above defined.
4. The word "municipality" or "municipalities" includes cities and other
incorporated urban political subdivisions; also the unincorporated territory which
lies within an urban area, as, for instance, a part of a county included in an urban
area; If an urban area have a metropolitan or joint government or governmental
agency possessing authority to acquire real property and enter into the agree-
ments specified in title II of this Act, such area may be considered as a "munici-
pality" under this Act. "Municipality" or "municipalities" includes agencies
or instrumentalities of a municipality or municipalities.
5. The term "master plan" signifies a group of maps, charts, and descriptive,
interpretative, and analvtical matter and social, economic, and financial data
which together present a general guide and pattern for the development of the
territory of a municipality or urban area, and furnish, in the light of the general
distribution of public and private land uses, of the standards of population
densities and building intensities and of the social objectives and economic and
financial practicalities presented and described therein, a framework of develop-
ment within which the various districts, areas, and development projects of the
planned territory may be more precisely planned and calculated. Master plan-
ning connotes a continuous process evolving with changing conditions and in-
creased knowledge, and the "master plan," therefore, includes at any time the
modifications and extensions thereof up to that time.
6. "Land" includes bare or vacant land, or the land under buildings, structures,
or other improvements; also water and land under water. When employed in
connection with the word "use," as for instance, "use of land" or "land use,"
"land" includes buildings, structures, and improvements existing or to be placed
thereon.
7. "Ileal property" includes land, and also includes land together with the
buildings, structures, fixtures, and other improvements thereon; also includes
liens, estates, easements, and other interests therein; and also includes restric-
tions or limitations upon the use thereof other than those imposed by exercise
of the police power.
8. "Development" includes both redevelopment of blighted (including slum)
and other built-up territory and development of still undeveloped territory or
combinations or mixtures of the same. It includes open-space types of uses,
such as streets, recreation grounds, agricultural tracts, and spaces around build-
ings, as well as buildings, structures, and improvements. "Redevelopment"
means clearance, redesign, reallotment, and rebuilding of the area or other terri-
torial unit, Vjut does not exclude the continuance of some of the existing buildings
or uses whose demolition and rebuilding or change of use are not deemed neces-
sary for the redevelopment.
9. "Project area" is an area of such extent and location as is deemed appro-
priate as a unit of development project planning and for a development project
separate from the developments of the other parts of the municipality or urban
area. In the provisions of this Act relating to leases to qualified corporations or
public housing authorities, "project area" means that portion or remainder of
the whole project area which, as stated in section 12 (e) of this Act, is to be
devoted to either private uses or public housing or both.
10. "Qualified corf)oration" means a corporation which, by virtue of the statute
or charter defining its powers, has the power to become a lessee of a development
project area in conformance with the provisions of this Act and to fully perform
POST-WAR ECONOMIC POLICY AND PLANNING 1631
and comply with ihv terms of tlu> lease of such area and which does not possess
the power to engaije in any enterprise or business other than the leasing, develop-
ment, and operation of such project area. "Corporation" may be construed to
include any form of association or legal entity which has succession throughout
the period of a lease and renewals thereof and which possesses said powers and is
subject to said limitations.
11. "Housing" includes and is synonynunis with housing, liabitation, or resi-
dential.
12. "Public housing" means housing constructed, acquired, or operated or to
be constructed, acquired, or operated by a public housing authority, whether
created under Federal, State, or municipal law, or by a public housing ageiicv as
defined in the United States Housing Act of 1937 ("U. S. C, title 42, sec. 1402),
and which has the power to be a lessee of a project area in conformance with this
Act. The word "authority," when u.sed in connection with public housing,
includes any public agency or body or public corporation possessing said powers,
whether designated as authority or by any other designation.
13. The term "planning agency" means an official planning body or agency
created by law to which the functiiln of making and modifying a master (general,
comprehensive) plan of a nuinici{)ality or urban area is expressly assigned by law.
A planning agency of a municipality authorized by law to make a master plan
of the territory of another municipality or municipalities of an urban area may be
treated as the planning agency of such other municipality or municipalities or
urban area.
14. In relation to a plan or statement, "adopt" or "adopted" means the resolu-
tion or other form of action by which a planning agency determines such plan or
statement to be in the form and content which it is ready to transmit to the chief
legislative body of the municipality or to the Administrator for the purposes set
forth in this Act; and "approval" means the ordinance, resolution, decision, or
other form of action taken by the chief legislative body of the municipality under
subsection (c) or (d) of section 12 of this Act, and "approved plan" means a plan
thus approved.
15. "Rentals" means the rents specified in a lease to be paid by the lessee to
the lessor municipality, exclusive of taxes or sums in lieu of taxes paid to the
municipality. " Revenues" means the revenues or income received by the munici-
pality from real property held by the municipality while not under lease from it,
after deducting operating expenses and taxes paid by the municipality including
taxes paid to it. self.
16. "Blighted" territory includes slums as they are defined in the United States
Housing Act and other Federal or State legislation but is not limited to slums and
may include blighted districts, areas, or other territorial units to be redeveloped
to any extent for industrial, business, or other nonhousing uses, as well as for
housing uses, or any mixtures, or combinations of such uses.
GENKR.\L PROVISIONS
Sec. 19. All general penal statutes relating to the larceny, embezzlement, or
conversion or to the improper handling, retention, use, or disposal of public
moneys or property of the United States shall apply to the moneys and property
of the Agency and to moneys and ])roperties of the United States entrusted to
said Agency.
Any person who, with intent to defraud the Agency' or to deceive the Admin-
istrator or any officer or employee thereof or any officer or employee of the United
States, makes any false entry in any book of the Agency or makes any false report
or statemrnt to or for the .\gency sliall, u]ion conviction thereof, be fined not more
tli.'iii $3,000 or imprisoned for not more than two years, or both.
' iiy person who shall receive any compensation, rebate, or reward, or shall
r into any conspiracy, collusion, or agreement, express or implied, with
intent to defraud the Agency or with intent unlawfully to defeat its purpo.ses,
shall upon conviction thereof, be fined not more than .$3,000 or imprisoned for
not more than two years, or both.
Skc. 20. Nothing contained in this Act shall be construed to authorize or to
require the exemption of any real property from taxation by any State or political
or taxing sulidivision thereof.
Skc. 21. If any provision of this Act or the application thereof to any munici-
pality, person, corporation, situation, or circumstances be held invalid, the
remainder of the Act and the application of such provision to other municipalities,
persons, corporations, situations, or circumstances shall not be affected thereby.
1632 POST-WAR ECONOMIC POLICY AND PLANNING
Sec. 22. This Act may be cited as the "Federal Urban Redevelopment Act
of 1943."
Amend the title so as to read: "A bill to provide financial assistance to the
municipalities and urban areas of the United States for real property acquisition,
in order to facilitate the development of urban areas and the redevelopment of
blighted areas including slums in accordance with plans therefor, and for other
purposes."
Senator Taft. The committee will adjourn until 10:30 Monday
morning.
(Whereupon, at 12:15 p. m., the committee adjourned until 10:30
a. m., Monday, January 15, 1945.)
X
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