Skip to main content

Full text of "Post-war economic policy and planning. Hearings before a subcommittee of the Special Committee on Post-war Economic Policy and Planning, United States Senate, Seventy-eight Congress, first session-Seventy-ninth Congress, first session pursuant to S. Res. 102, a reslution creating a Special Committee on Post-war Economic Policy and Planning"

See other formats

mm :■ :■: 










Given By 

1 I'V (- 1"*.- 










S. Res. 102 

(78th Congress) 


JANVARY 12, 1945 

Printed for the use of the Special Committee on Post- War 
Economic Policy and Planning 


91188 WASHINGTON : 1945 






MAY 8 t94S 




WALTER F. GEORGE, Georgia, Chairman 




SCOTT W. LUCAS, Illinois 

Meyer Jacobstein, Director 

Subcommittee on Housing and Urban Redevelopment 

ROBERT A. TAFT, Chairman 



Note. — There will appear in the final volume an index bj^ subject matter 
covering the entire series of hearings. 


Statement of — Page 

Mott, Seward H., director, Urban Land Institute 1593 

.Bettman, Alfred, chairman, the American of Planners, Cincinnati, 

Ohio 1604 




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 

Senator Taft. The committee will come to order, 
Mr. Mott, representing the Urban Land Institute, will be the first 



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 

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, 



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 

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, 

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 

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- 

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 


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::, 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. 


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 


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 

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. 



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 

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 

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 

91183 — 45— pt. 9 2 


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 

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. 


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. 



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, 


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 


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. 


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. 


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 


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. 


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. 


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. 


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 


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. 


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 

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 


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. 


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. 


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 

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 


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. 


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 


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 


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? 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 


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 

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 

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 


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- 

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 

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 


our present tax system, is absorbing the necessary additional tax 

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 


whose official statutory function is planning, not administration or 

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. 


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 


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 

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. 


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. 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. 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 


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 


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 

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 

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. 


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- 

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. 


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 

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 

Mr. 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. 


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- 

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 


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 factors 
or, 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, 


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 

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 


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 

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 

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 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, as, for instance, the Corps of Army Engineer- 


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 

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 

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) 


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. 


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. 


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 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 

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. 


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 


\'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 

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 


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. 


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 

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 

_(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 

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. 


Title II 


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 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. 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. 


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 

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 


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 

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. 



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 

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 


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- 

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. 


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, 

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. 


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 

Senator Taft. The committee will adjourn until 10:30 Monday 

(Whereupon, at 12:15 p. m., the committee adjourned until 10:30 
a. m., Monday, January 15, 1945.) 




, iilllilllli 

3 9999 06352 505 7 


■ - Uf-.*,->i,._f('. 

1 (