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Our answer may not be a perfect one. It is not as perfect as the idea of completely destroying the neighborhood in order to rebuild it perfectly. But that kind of perfection would, at best, in our lifetime, only affect a fraction of the job that has to be done, and would leave behind it a huge debt, even when only doing the job partially.
We are thinking more in terms of rebuilding and rehabilitating, and bringing up to better standards, all of our living accommodations, all of our older buildings, within the foreseeable future-possibly within the next 5 or 10 years.
In Los Angeles, we have a slogan "No slums by 1960." That is a little ambitious, but we believe we can do that, and if we eliminate the slums, then we certainly will have no longer any slum dwellers.
The purpose of my making those comments is this: We believe that in connection with the expenditure of funds for urban renewal, the grants that are contemplated under what is now title IV of the new bill, that they should be granted to cities only under specific considerations that those cities actually are pursuing a real honest to goodness law-enforcement program of their own.
We believe that the wording should be strengthened in that connection in the present bill. In the present bill it says that these funds shall be available to cities if they have a plan for law enforcement.
Well, I think that that is too mild at this stage of the game. Cities have had a plan for enforcement of the housing laws for years, but they have done too little about them, and we have some suggested wording in that connection. Mr. MCDONOUGH. Is that a recommended amendment to the bill? Mr. BURNS. Yes, sir.
Mr. MCDONOUGH. Recommended by whom?
Mr. BURNS. By the National Association of Real Estate Boards. Mr. MCDONOUGH. I would like to say for the benefit of the committee, Mr. Chairman, that Mr. Burns is a constituent of mine, and has a record, I think, of one of the larger home building agencies in the United States, having constructed around 20,000 houses, and to have this testimony from him, to rehabilitate existing neighborhoods, where he has built altogther heretofore in new subdivisions in the outlying sections of the cities, is very encouraging as far as the real estate board is concerned, because it shows that they are not only looking to rebuilding what we have, but also to providing new buildings in the suburbs. I want the committee to know that Mr. Burns is giving us testimony we haven't heard before from a large new builder of new houses. Mr. BURNS. Thank you, Mr. McDonough.
The whole purpose of this legislation is actually to make sure that local communities, before they are given the advantages of the Federal legislation designed for the purpose of aiding in the rehabilitating or urban renewal of these neighborhoods, that the local communities should actually be conducting a practical law enforcement program of their own.
The CHAIRMAN. I might say that the witnesses will have an opportunity to extend and revise their remarks for the record.
Does that conclude the statement?
Mr. WALTEMADE. Yes, sir.
The CHAIRMAN. Are there any questions of these gentlemen by members of the committee?
Mr. GAMBLE. Mr. Chairman, I think this is one of the finest presentations that we have had by the National Association of Real Estate Boards, and I would like to thank them for their cooperation and for the way they have presented their case.
Mr. McDonough, you were telling us about Mr. Burns. Mr. Burns was very, very helpful to the Joint Committee on Housing in the 80th Congress. I think you were here the day Ginsburg interfered with our schedule, were you not, Mr. Burns?
Mr. BURNS. I was indeed.
Mr. GAMBLE. I remember you came on and we had to cut down time, and I inadvertently said something to you about giving you 15 or 20 minutes, and you said "I came all the way from the west coast to testify." So I apologized and you went on.
Mr. MCDONOUGH. Mr. Burns, as I understand your rehabilitation and urban renewal program, you want the cities to lay the foundation for any Federal aid that may be extended by active cooperation in enforcing the safety and sanitary regulations, along with the other laws that will assure the Federal Government that they are not going into an area and taking over the whole thing by themselves, but that they are going into an area where there is cooperation between the governing body, city council, or whatever may be the agency, and the Federal Government.
But do I understand that you prefer that the cities do this without aid from the Federal Government if they can?
Mr. BURNS. I don't believe that they can, Congressman McDonough, without the aid of FHA insurance, as specifically mentioned in several portions of our presentation, and also without the aid of the urban renewal grants, but we advocate that such money be used to stimulate an increased activity in that city, so that maybe for every dollar of Federal funds that is spent there would be a hundred dollars spent locally in revitalizing an entire area, by using the Federal funds to pick out the specific slum pockets, rather than, as we have seen in some cities, just wiping the whole slate clean and in many instances destroying very suitable housing that had another length of life remaining. We consider that it would be wasteful.
Mr. MCDONOUGH. Of course, there are areas, in large congested, highly populated cities, that need additional recreation areas which they don't have, which would probably require the removal of certain of those structures, in order to provide it, along with school facilities, and so forth.
Mr. BURNS. We think that is the ideal way to use the Federal funds, to pick out these slum pockets for the purpose you might say of loosening up the congestion, and making it possible to have playgrounds and other community facilities.
Mr. MCDONOUGH. You think the encouragement on the part of an individual, who may find an area in a city, and is willing to finance the rehabilitation of old homes, and sell them on his own, is discouraging unless there is some general overall planning?
Mr. BURNS. Positively.
Mr. MCDONOUGH. I recall you informing me that you did some experimenting along those lines, in an area of Los Angeles that I know very well is blighted.
Mr. BURNS. Yes.
Mr. MCDONOUGH. But that is too expensive for an individual to attempt to do that without some aid from the Federal Government, in FHA insured loans, and cooperation in the overall planning of the city.
Mr. BURNS. These older neighborhoods have been virtually blacklisted in the past. In other words, it was impossible to get any kind of FHA loan, other than, of course, a title I repair loan. Those loans were possible, but substantial loans that would really enable a person
to do a complete job of rehabilitation, or to build on a vacant lot in an older neighborhood-it was impossible to get FHA insurance, and, of course, as you know, with respect to conventional loans, uninsured loans, many lending institutions just normally follow the FHA patSo those neighborhoods were, I would say. probably inadvertently blacklisted as far as FHA was concerned.
Mr. McDONOUGH. In other words, the builders went out into the new areas on the outskirts of the city and built another city, practically, because they had wide-scope planning, open acreage, and they could plan accordingly.
Mr. BURNS. Even to the extent of where some cities are now suffering from that decentralization, and it is probably time for the pendulum to swing the other way, and to start rebuilding the inner core of our cities. But by rebuilding I do not necessarily mean tearing down. and starting over again. Many of these houses have an additional 40 or 50 years of life, purely by being rehabilitated.
Mr. MCDONOUGH. We have had that experience in Los Angeles, where I know there are places as much as 35 miles away from the downtown area, where people go back and forth to their work. And there are many areas within the city limits which, if rehabilitated, would provide adequate and modern housing for new additional home seekers.
Do you have any figures that might give us a nationwide estimate of how many additional units might be constructed in this next year under this plan?
Mr. BURNS. It will relate, of course, to the encouragement given to the program in this proposed legislation, but I have talked to many people, statisticians, manufacturers of building materials and appliances, who are keenly alerted to this possible market, to men who are interested in employment-labor leaders and so forth--and I would say that a cross-section of their beliefs would indicate that this rehabilitation program could exceed, could even exceed the new housing program that we have had even during the past boom years.
In other words, we have almost 50 million dwelling units in our total housing inventory, and it isn't hard to conceive that in that 50 million units, there is as much of an opportunity for work and activity, as there is in the construction of an additional million or so of new units.
Mr. MCDONOUGH. In other words, you say that there is evidently need for an additional million units of rehabilitated homes in addition to the million or more new homes this year?
Mr. BURNS. Yes. I am not thinking purely of the creation of additional units. I am thinking of the money that can be spent on the existing units in bringing them up to standard.
In some instances that will be purely what you might call a windand-weather treatment, merely bringing them up to present-day standards of health, safety, and sanitation.
But in other instances, it will be a complete modernization job, including the garbage disposals, metal cabinets, and all the way down the line.
Mr. MCDONOUGH. Thank you, Mr. Burns.
Mr. SUMMER. Mr. Chairman, may I say something on this subject? The CHAIRMAN. Yes.
Mr. SUMMER. I think we have overlooked one very important point, too, and that is the vast cost to the Federal Government and to the cities, when slum clearance is brought about through exploitation.
We know that many slums are the result of decay. But many of them are part of a program of deliberate exploitation, and as a member of the President's Committee I was shocked to find that in many cases there is an unholy alliance between city hall and the ownership of slums, and the ownership of slums can be anyone in our economy and often is, and, therefore, the entire program was designed to have the Federal Government help cities that will help themselves.
Now, a centralization of code enforcement is the only practical way you will ever accomplish code enforcement. Today, in slum clearance, there is illegal occupancy where sometimes 5 or 6 families live in a unit that should be occupied by 1 family. We find a whole family in one room. And by capitalizing that occupancy, the Federal Government and the cities have paid through the nose for illegal occu
Therefore, if the cities, before any money is available, do two things, I think you will accomplish a great deal.
No. 1, a master plan, because lenders will not go into an area unless there is a master plan, which, because only 2 percent of our housing inventory every year is new housing, must entail largely a rehabilitation program, but must also have new housing.
Secondly, enforcement of codes, particular occupancy codes, because in enforcing those codes, you then, if you have to condemn property, are paying the true value, and not an illegal or fictitious. value, which is sometimes many times the true value.
And in so doing you are saving the insolvency of the cities, because today, in slums, with tax base reduced and taxes very greatly reduced, you have increased services, because of disease, juvenile delinquency, crime, and fire. Through the enforcement of codes, through the adoption of a master plan before any Federal help is forthcoming, or Federal cooperation, you thereby increase the fiscal solvency of your cities, and some of the cities are facing a genuine dilemma. I don't want to get off the subject without pointing out that this program envisions a great deal of rental housing as well as sale housing, because in some of your greater cities, rental housing is a greater need, and sometimes it is impossible to create ownership in all cases, though we favor it wherever possible.
Mr. WIDNALL. Mr. Chairman.
The CHAIRMAN. Mr. Widnall.
Mr. WIDNALL. I would like to commend the three witnesses for their excellent presentation. I am particularly pleased to see Mr. Summer here. He is a resident of the district adjoining mine, and we in New Jersey know of the tireless efforts that he has made not only to improve the standards of his own association, but to obtain decent housing and better housing for the people of America.
I am particularly pleased by the testimony that has been given about making the slums unprofitable. About a year and a half ago I was in Puerto Rico, and couldn't help but see the contrast between Puerto Rican slums and American slums. There the slums are unprofitable. They are squatter slums. Nobody owns them.
Here in America, to our eternal disgrace, we haven't within the cities, done the job that we could through code enforcement. And I
am particularly pleased to see how you have pointed that up today, Mr. Summer. It is something that should be brought to the attention of the American people and the governing bodies in our major cities. Mr. MULTER. Mr. Chairman.
The CHAIRMAN. Mr. Multer.
Mr. MULTER. Since we are all taking time out to compliment the gentlemen, may I add my compliments, too. You gentlemen have always, you and your association, presented a good case. We haven't always agreed on methods and procedures and details, but I think we always have agreed that the ultimate desire was better homes for the greatest number of people of our country.
I would like to have you tell me, any one of you gentleman, if you can, how you are going to build any more houses under title IV than under title I. How you are going to clear any more slums under one than the other. What is there in one title that is going to give you any more slum clearance than in the other?
In other words, what can you do under title IV that you haven't been able to do under title I?
Mr. SUMMER. I will be glad to try to answer that, sir.
First, under the 1949 act, as fast as slums were cleared, it was necessary to cause people to move out of those slums, and as fast as they were cleared, new slums were created, in another part of the city, and where you cleared an area, oftentimes the use of the property thereafter had fewer families in it, less density, than the original section. So that, in clearing one slum, and spending millions and sometimes hundreds of millions of dollars, you have only moved the slums to other areas, and we feel very strongly that your bill makes several provisions that never existed before.
Number one, it provides financing for existing structures, housing built during the war and since the war has already started down the road of decay. They are already starting to be slums. So by providing adequate financing for existing housing, you take the first step, and one that doesn't cost money, and that is the prevention of slums. The second step that is provided here, which was not in the 1949 act, is that as a prerequisite to any Federal funds or local matching thereof, that the city face up to its problems.
Now, the Federal Government cannot in its wisdom, in Washington, in any bureaucracy, made up of the most intelligent and sincere people of America, lay out a formula that would apply equally to New York City and Houston, Tex., or to Birmingham, and Seattle. Therefore, a program which calls for initiative by the city, and which provides for Federal cooperation under certain basic conditions, is, I think, a much sounder approach.
Thirdly, this program recognizes the fact that only two-point-something percent of our entire housing inventory can be new in any one year and doesn't try to rebuild the entire slum area.
I think that is a realistic approach, and I think in that connection that it is very important to point out that if there are, as the 1949 census showed, 3 million families in metropolitan areas earning $2,000 a year or less, another million and a half families, at that time, earning $2,000 a year or less who owned their homes-your present subsidy on public housing, and I will use the figures presented by public-housing, comes to $39.60 per unit-that is per family per unit.