the development of well-planned, integrated residential neighborhoods, the development and redevelopment of communities, and the production, at lower costs, of housing of sound standards of design, construction, livability, and size for adequate family life. As a complementary policy, the section states that governmental aid to clear slums and provide adequate housing for urban and rural nonfarm families whose incomes are so low that they are not being decently housed in new or existing housing shall be extended to those localities. which estimate their own needs and demonstrate that these needs are not being met by reliance solely upon private enterprise, and without such aid, and that governmental assistance for decent, safe, and sanitary farm dwellings and related facilities shall be extended only where the farm owner demonstrates that he lacks sufficient resources to provide such housing on his own account and is unable to secure necessary credit for such housing from other sources on terms and conditions which he could reasonably be expected to fulfill.

To assure that all housing activities of the Federal Government will be administered in accord with the objectives and policies thus established by the Congress, there is included a specific congressional directive to the administrative agencies which have functions, powers, and duties with respect to housing to so exercise them as to encourage and assist (1) the production of housing of sound standards of design, construction, livability, and size for adequate family life; (2) the reduction of the costs of housing without sacrifice of such sound standards; (3) the use of new designs, materials, techniques, and methods in residential construction, the use of standardized dimensions and methods of assembly of home-building materials and equipment, and the increase of efficiency in residential construction and maintenance; (4) the development of well-planned, integrated residential neighborhoods and the development and redevelopment of communities; and (5) the stabilization of the housing industry at a high annual volume of residential construction.

TITLE I-SLUM CLEARANCE AND COMMUNITY DEVELOPMENT AND REDEVELOPMENT

GENERAL SUMMARY

This title provides for Federal aid to local communities for the clearance of their slums and blighted areas, so as to make such areas and other areas needed for residental construction available for development or redevelopment, with the active participation of private enterprise. Two types of assistance are authorized:

1. Loans, both temporary and long-term (but not in excess of 40 years in the case of long-term definitive loans), where needed to finance necessary project costs, at an interest rate designed to return to the Government the cost to it of the funds it obtains to make the loans; and

2. A capital-grant subsidy where necessary to enable the land in the project areas to be made available for use at prices consistent with proper and sound land use and planning.

The administration of the program would be under the jurisdiction of the Housing and Home Finance Administrator. In the administration of the program adherence to the following principles is required:

1. That any project assisted be related to the improvement of housing conditions in the locality.

2. That every project assisted be a local undertaking, locally planned, locally approved, locally managed, and designed to serve local needs.

3. That the redevelopment plans for the redevelopment areas in the locality afford maximum opportunity, consistent with the sound needs of the locality as a whole, for the redevelopment of such areas by private enterprise.

4. That there shall be local financial participation in an amount equal to at least one-third of the difference between the aggregate costs of all projects of the locality and the new reuse values of the land comprising the project areas.

5. That there be adequate provision for the rehousing of the families displaced by the clearance of the area.

SECTION 101. RESPONSIBILITIES

This section provides that in extending financial assistance under this title, the Housing and Home Finance Administrator shall give consideration to the extent to which the locality has undertaken positive programs for (1) encouraging housing cost reductions and efficiency in construction through the adoption and improvement of building and related codes, and (2) preventing the spread or recurrence, in such community, of slums and blighted areas through the adoption, improvement, and modernization of local codes and regulations relating to land use and adequate standards of health, sanitation, and safety for dwelling accommodations. It also requires the Administrator, in extending financial assistance under this title, to encourage the operations of such local public agencies as are established on a State, or regional (within a State), or unified metropolitan basis, or as are established on such other basis as permits such agencies to contribute effectively toward the solution of community development or redevelopment problems on a State, or regional (within a State), or unified metropolitan basis.

SECTION 102. LOANS

This section, together with section 103, sets forth the forms and extent of Federal financial assistance. Section 102 provides for assistance in the form of loans which (whether temporary or definitive) must bear interest at not less than the rate specified in the most recently issued bonds of the Federal Government having a maturity of 10 years or more at the date the contract for the loan is made. Any long-term definitive loans made pursuant to this title must mature within a period not exceeding 40 years from the date of the bonds evidencing such loans.

In connection with any project on land which is open or predomi nantly open, temporary loans may be made (pursuant to subsection (b) of section 102) to municipalities or other public bodies for the provision of school and other public buildings or facilities necessary to serve or support the new uses of land in the project area. This is necessary, particularly in the case of outlying projects which can facilitate the clearance of central slum areas, where difficulties may arise due to the lack of certain public facilities, especially schools.

For example, the school district for such an outlying area might not have a tax base sufficient to permit the issuance of bonds for building a new school until the project area is actually developed. In such a case, a temporary loan could be made to the school district itself, or alternatively a loan could be made to the local public agency undertaking the project so that this agency could construct the school and lease it to the school district pending the ability of the district to take the building over through the issuance of its own bonds. Such temporary loans must be repaid in not to exceed 10 years.

While providing for Federal assistance in the form of loans where necessary, the section also contains provisions to facilitate financing by private capital. It contains a provision to enable the local public agency to obtain loan funds from sources other than the Federal Government to the fullest extent practicable, and to substitute such funds for borrowing from the Government.

The section also provides that the Administrator may make advances of funds to local public agencies for surveys and plans in preparation of projects which may be assisted under this title, and that the contracts for such advances of funds may be made upon the condition that such advances of funds shall be repaid, with interest at not less than the applicable going Federal rate, out of any moneys which become available to such agency for the undertaking of the project or projects involved.

To provide the funds necessary to make the loans, the Administrator is authorized, with the approval of the President, to issue and have outstanding at any one time notes or other obligations for purchase by the Secretary of the Treasury aggregating not more than $1,000,000,000. This loan authorization becomes available over a 5-year period at the following rate: $25,000,000 on and after July 1, 1949, increased by $225,000,000 on and after July 1, 1950, and by $250,000,000 on and after July 1 in each of the years 1951, 1952, and 1953, respectively.

The section also permits the increases in the loan authorization becoming available in any year to be increased (subject to the total loan authorization of $1,000,000,000), at any time or times, by not to exceed an additional $250,000,000 upon a determination by the President, after receiving advice from the Council of Economic Advisers as to the general effect of such increase upon the conditions. in the building industry and upon the national economy, that such action is in the public interest.

SECTION 103. CAPITAL GRANTS

This section provides for Federal subsidy, in the form of capital grants, in those cases where such assistance is necessary if the land in the project area is to be available for proper use in accordance with an approved plan for the project area and at prices consistent with such use. The capital grants would be limited in amount to two-thirds of the net cost of the projects assisted in the locality. This has the effect of providing that the net loss or write-down involved in making the land in project areas available for appropriate redevelopment (i. e., the difference between the total costs of the projects and the proceeds received from the disposition of the land) will be shared on a 2 to 1 basis. the Federal capital grants being

available for not to exceed two-thirds of such loss and the local grants-in-aid being available for at least one-third of such loss.

The Federal capital grants with respect to all projects of a local public agency on which contracts for capital grants have been made under this title cannot exceed two-thirds of the net loss on such projects. With respect to any individual project, the Federal capital grant cannot exceed the difference between the net loss on such project and the local grants-in-aid actually made with respect to that project. Thus, if a project cost $1,000,000 (including $150,000 in site improvements and public facilities paid for by the municipality as local grants-in-aid) and if the proceeds from disposition were $700,000, resulting in a loss (or net project cost) of $300,000, the Federal grant would then be limited to $150,000 (being the difference between the loss of $300,000 and the local grants-in-aid of $150,000) rather than $200,000 (being two-thirds of the loss of $300,000). In the event that local grants-in-aid were sufficient to cover the entire loss, no Federal grant would be made for the project.

Although Federal loan assistance for the acquisition and preparation of open, unplatted urban or suburban land for residential use is provided for, it does not appear that Federal subsidy assistance for such cases would at this time be justified. Accordingly, no Federal capital grants may be made in connection with such a project and, correspondingly, no local grants-in-aid are required. Such projects would be excluded from the computation of aggregate project costs, local grants-in-aid, and net losses used as the basis for the sharing of Federal and local grants for all other projects in the locality.

The Administrator is authorized to contract to make capital grants aggregating not more than $500,000,000. This capital grant authorization becomes available over a 5-year period at the following rate: $100,000,000 on and after July 1 in each of the years 1949, 1950, 1951, 1952, and 1953, respectively. The section also permits the specified amounts of the capital grant authorization becoming available in any year to be increased (subject to the total capital grant authorization of $500,000,000), at any time or times, by not to exceed an additional $100,000,000 upon a determination by the President, after receiving advice from the Council of Economic Advisers as to the general effect of such increase upon the conditions in the building industry and upon the national economy, that such action is in the public interest.

SECTION 104. REQUIREMENTS FOR LOCAL GRANTS-IN-AID

This section requires the locality to share the net losses of any project assisted by Federal capital grants under this title and to call upon the Federal Government for aid only to the extent necessary. It provides that the local community must itself participate financially to the extent of at least one-third of the net project cost, as defined in this title. Such local assistance may be in the form of (1) cash grants, (2) donations of land, demolition or removal work, or site improvements in the project area, or (3) the provision of parks, playgrounds and public buildings or facilities which are of direct or substantial benefit to the project. Where a locality undertakes more than one project on which Federal capital grants are to be made, this requirement relates to such projects considered in the aggregate.

The definition of local grants-in-aid in section 110 (d) makes it clear that the local community may not count as local grants-in-aid (1) the value of any land in streets, alleys and other public rights-ofway which may be vacated in connection with the project, (2) any low-rent public housing, or (3) any demolition or removal work, improvement, or facility for which any grant or subsidy is to be made by the United States or any agency or instrumentality thereof. If any of the public improvements or facilities provided are charged to specific property owners by way of special assessments, the portion of the amount so charged would not be eligible for inclusion as a local grant-in-aid. Local public buildings or facilities, otherwise eligible as local grants-in-aid, remain eligible in the event they should be assisted by temporary loans under section 102 (b).

SECTION 105. LOCAL DETERMINATIONS

This section assures that aid to projects under this title will be based upon local determination of need and maximum reliance upon private enterprise. It provides that any contracts for financial aid under the title may be made (1) only with a duly authorized local public agency, and (2) only if the redevelopment plan is approved by the governing body of the locality. Moreover, such approval must include findings that the Federal financial aid to be provided in the contract is necessary to enable the land in the project area to be developed or redeveloped; that the redevelopment plans for the redevelopment areas in the locality will afford maximum opportunity, consistent with the sound needs of the locality as a whole, for the development or redevelopment of such areas by private enterprise; and that the redevelopment plan conforms to a general plan for the development of the locality as a whole.

This section also assures that all projects assisted will conform to the locally approved redevelopment plan. It provides that as a condition to Federal assistance, the local public agency must agree to obligate those to whom it sells or leases the land in the project area to devote the land to the uses specified in the redevelopment plan and to begin the building of their improvements within a reasonable time.

The section also requires that there be a feasible method for both the temporary and permanent relocation of the families who have been living in the area and who are displaced as a result of the clearance of the area. The provisions of this section that contracts shall require that there are or are being provided, in reasonably suitable locations, permanent dwellings for families to be displaced, are not intended to be rigid specifications. Obviously, slum clearance projects cannot go forward without some difficulties for the families to be displaced. Provisions are therefore included to afford reasonable protection for such families. The provisions of this section are general in nature, in effect requiring that decent, safe, and sanitary housing be available for the displaced families in areas which have generally satisfactory public and commercial facilities, and which are reasonably accessible to their places of employment.

In view of the present acute housing shortage, this section would prevent the demolition of residential structures in connection with this program prior to July 1, 1951, if the governing body of the locality