View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

CONFIDENTIAL

D r a f t o f J u l y 30,

1941

URBAN REDEVELOPMENT AND HOUSING
(Summary o f Proposed F e d e r a l Program)

Among t h e f i r s t

o f t h e needs o f t h i s c o u n t r y f o r l a r g e

peace-time

c a p i t a l o u t l a y s i s t h e need c e n t e r i n g a r o u n d u r b a n r e d e v e l o p m e n t and
housing.

More s p e c i f i c a l l y ,

habilitation,

it

i s t h e need f o r t h e r e p l a n n i n g , t h e

re-

a n d i n l a r g e measure t h e r e b u i l d i n g o f o u r t o w n s and

b u t t h i s s h o u l d be c o u p l e d w i t h t h e p r o d u c t i o n o f g r e a t numbers o f

cities;
11

decent,

s a f e , and s a n i t a r y 1 1 d w e l l i n g s , b o t h f o r s a l e and f o r r e n t , t o f a m i l i e s
m o d e r a t e - t o - l o w income as w e l l as t o s l u m d w e l l e r s .

Heretofore, the

antici-

pated cost o f the whole j o b , whether p r i v a t e l y or p u b l i c l y f i n a n c e d ,
assumed s u c h p r o p o r t i o n s t h a t f e w have been p r e p a r e d t o c o n t e m p l a t e
taking i t

in its entirety.

realize that

,!

Now, h o w e v e r , we a r e b e g i n n i n g a t l a s t

a n a t i o n can a f f o r d a n y t h i n g i t

of

has
under-

to

can p r o d u c e ; f t and t h e r e i s

d o u b t o f o u r c a p a c i t y , m a t e r i a l and o r g a n i z a t i o n a l ,

t o perform

no

everything

n e c e s s a r y t o make o u r u r b a n c o m m u n i t i e s w h a t t h e y o u g h t t o b e .
In its

e f f o r t s t o deal w i t h the problem i n recent years,

F e d e r a l Government has a p p r o x i m a t e d success o n l y i n t h e f i e l d o f

the
financing

home o w n e r s h i p . F o u r o t h e r a s p e c t s o f t h e o v e r - a l l p r o b l e m may now be
considered s u s c e p t i b l e t o immediate




attack:

1.

E l i m i n a t i o n o f slums and b l i g h t e d a r e a s as t h e f i r s t s t e p
i n urban redevelopment ( o r g a n i z a t i o n f o r t h e a c q u i s i t i o n o f
p r o p e r t i e s to commence a t o n c e ; a c t u a l a c q u i s i t i o n and
d e m o l i t i o n o r r e h a b i l i t a t i o n l a t e r , when p o s t - d e f e n s e r e adjustment begins);

2.

Rationalization of the r e s i d e n t i a l construction industry
( g r e a t r e s e a r c h and e x p e r i m e n t a l agency t o be e s t a b l i s h e d
a t once);

3.

4.

Administrative

S t i m u l a t i o n o f t h e p r o d u c t i o n , by p r i v a t e e n t e r p r i s e , o f
h o u s i n g f o r r e n t t o f a m i l i e s o f m o d e r a t e ~ t o - l o w income
( l e g i s l a t i o n e n l a r g i n g t h e f u n c t i o n s o f FHA t o be passed as
soon as p o s s i b l e a n d t h e p r o g r a m s t a r t e d ) ;
P u b l i c h o u s i n g f o r d e f e n s e , a n d f o r r e l i e f when n e c e s s i t a t e d
by slum c l e a r a n c e o r o t h e r w i s e (immediate r e - e x a m i n a t i o n o f
USHA p r o g r a m ) .

Set-Up
Of s u c h f a r - r e a c h i n g i m p o r t a n c e i s t h e j o b t o be done a n d so

d e f i n i t e t h e need f o r o o - o r d i n a t i o n , t h a t a s p e c i a l and somewhat u n u s u a l
a d m i n i s t r a t i v e s e t - u p i s p r o p o s e d as

follows

T h a t t h e r e b e c r e a t e d f o r t h e p u r p o s e a new a g e n c y ,

functioning

d i r e c t l y u n d e r t h e P r e s i d e n t a l o n g s i d e t h e F e d e r a l Works A g e n c y , t h e
L o a n A g e n c y , and t h e F e d e r a l S e c u r i t y Agency.

It

s h o u l d be e s t a b l i s h e d as

a c o r p o r a t i o n , w i t h some such name as t h e " C e n t r a l Urban
Agency (CURA)."

Redevelopment

Under i t s h o u l d be t h r e e s u b s i d i a r y c o r p o r a t i o n s ,

all

bound t o g e t h e r t h r o u g h i n t e r l o c k i n g d i r e c t o r a t e s as o u t l i n e d b e l o w ,
first

Federal

The

o f t h e s e w o u l d b e t h e " N a t i o n a l L a b o r a t o r y f o r H o u s i n g Research

( N L H R ) " , c r e a t e d a t once and g i v e n a mandate t o d i s c o v e r ways and means t o
m o d e r n i z e and i m p r o v e t h e e f f i c i e n c y o f t h e r e s i d e n t i a l
industry.

construction

The second w o u l d be t h e F e d e r a l H o u s i n g A d m i n i s t r a t i o n

(FHA),

t r a n s f e r r e d f r o m t h e F e d e r a l Loan Agency and r e - c o n s t i t u t e d as a c o r p o r a t i o n ,
with its

functions enlarged t o s t i m u l a t e the production of r e n t a l

by p r i v a t e e n t e r p r i s e .
Housing A u t h o r i t y




housing

The t h i r d s u b s i d i a r y w o u l d be t h e U n i t e d S t a t e s

(USHA), t r a n s f e r r e d f r o m t h e F e d e r a l Works Agency.

Thus, t o i n i t i a t e

and c a r r y on a c o m p r e h e n s i v e program o f u r b a n

r e d e v e l o p m e n t and h o u s i n g , t h e r e w o u l d b e f o u r c o r p o r a t i o n s

(CUBA, and

its

s u b s i d i a r i e s NLHR, FHA, and USHA), o p e r a t i n g t o g e t h e r as a new F e d e r a l
agency.

To m a i n t a i n t h e n e c e s s a r y c o - o r d i n a t i o n ,

t h e heads o f t h e

c o r p o r a t i o n s should c o n s t i t u t e t h e board o f d i r e c t o r s
All

four

o f each c o r p o r a t i o n .

f o u r should be under t h e chairmanship o f t h e A d m i n i s t r a t o r

of the

parent

CURA. who, as i s c u s t o m a r y i n t h e c a s e o f f o u r - m a n b o a r d s , w o u l d have t h e
"casting"

vote.

major p o l i c y ,

I n a l l a d m i n i s t r a t i v e matters not i n v o l v i n g decisions

t h o head o f each c o r p o r a t i o n w o u l d e x e r c i s e f u l l

and r e s p o n s i b i l i t y ,

subject

only t o the s u p e r v i s i o n of the

of

authority

Administrator

o f t h e CU®L.
C o n s i d e r a t i o n s h o u l d b e g i v e n t o c h a n g i n g t h e name o f t h e F e d e r a l
H o u s i n g A d m i n i s t r a t i o n t o t h e " H o u s i n g I n s u r a n c e A u t h o r i t y ( H I A ) W ; and o f
the U n i t e d S t a t e s Housing A u t h o r i t y t o t h e " P u b l i c Housing

Planning:

Authority

(PHA)",

Precondition of Federal Aid
q u i d p r o quo o f F e d e r a l f i n a n c i a l

aid i n the elimination

of

slums and b l i g h t e d a r e a s s h o u l d b e t h e i n i t i a t i o n b y t h e c i t y o f a p r o g r a m
o f e x t e n s i v e r e p l a n n i n g and r e b u i l d i n g .

The f i r s t

step t o t h i s

end, and t h e

p r i m a r y c o n d i t i o n f o r F e d e r a l a i d , w o u l d be t h e c r e a t i o n o f a competent
p l a n n i n g commission or o t h e r a p p r o p r i a t e o r g a n i z a t i o n ,

a d e q u a t e l y endowed

w i t h powers e x t e n d i n g o v e r t h e e n t i r e m e t r o p o l i t a n d i s t r i c t f

Practically

e v e r y w h e r e t h i s w o u l d r e q u i r e new and f a r - r e a c h i n g S t a t e l e g i s l a t i o n and
p o s s i b l y some S t a t e c o n s t i t u t i o n a l amendments, t h e i n c e n t i v e f o r w h i c h
w o u l d be l a r g e c o n t r i b u t i o n s




of Federal

funds.

D e f i n i t e c o n d i t i o n s s h o u l d be p r e s c r i b e d i n t h e F e d e r a l

legis-

l a t i o n as t o t h e k i n d o f powers t o be g r a n t e d t h e m u n i c i p a l i t i e s ,

although

o f c o u r s e t h e l e g a l methods w o u l d have t o b e l e f t t o t h e s e p a r a t e

States.

I n g e n e r a l terms t h e S t a t e l e g i s l a t i o n should

include:

(1)

G r e a t l y e x t e n d e d h o m e - r u l e powers o f t h e c i t i e s , s p e c i f i c a l l y
t h e power t o a c q u i r e l a n d , b y c o n d e m n a t i o n where n e c e s s a r y ,
n o t o n l y f o r t r a d i t i o n a l p u b l i c p u r p o s e s b u t f o r any p u r p o s e
whatever t h a t promotes t h e g e n e r a l w e l f a r e .
(The i n t e n t i o n
w o u l d be f o r t h e c i t y t o a c q u i r e n o t o n l y s l u m a n d b l i g h t e d
a r e a s b u t l a n d a r o u n d t h e o u t s k i r t s as w e l l , t o be h e l d f o r
f u t u r e use.
Probably t h e "Model C i t y C h a r t e r " o f t h e
N a t i o n a l M u n i c i p a l League, as now b e i n g r e v i s e d , w o u l d
p r o v i d e a d e q u a t e h o m e - r u l e powers. )

(2)

A u t h o r i z a t i o n f o r t h e p l a n n i n g o r g a n i z a t i o n i t s e l f as a n
i n t e g r a l p a r t o f t h e m u n i c i p a l government.

(3)

S p e c i f i c a u t h o r i z a t i o n t o g i v e t h e p l a n n i n g body power t o
f o r m u l a t e (but not n e c e s s a r i l y t o a d m i n i s t e r ) zoning
o r d i n a n c e s , b u i l d i n g c o d e s , and r e g u l a t i o n s f o r s u b d i v i s i o n
platting.

The p r o g r a m w o u l d i n v o l v e p l a n n i n g o f a c h a r a c t e r and on a s c a l e
h e r e t o f o r e unknown i n t h i s
district,

its

country.

Covering t h e whole

metropolitan

scope w o u l d i n c l u d e v i r t u a l l y e v e r y t h i n g c o n n e c t e d w i t h t h e

p h y s i c a l l a y o u t o f t h e u r b a n community.

To f a c i l i t a t e and f u r t h e r

p l a n n i n g , t h e C e n t r a l U r b a n Redevelopment Agency s h o u l d have i t s
p l a n n i n g d i v i s i o n , whose o p e r a t i o n s w o u l d be o f a g e n e r a l
character.

such

own

supervisory

B u t e v e n t h e s e o p e r a t i o n s s h o u l d be s u b j e c t t o s t i l l

more

g e n e r a l s u p e r v i s i o n , b y t h e N a t i o n a l Resources P l a n n i n g B o a r d , w h i c h w o u l d
p r e s c r i b e t h e n a t i o n a l and r e g i o n a l f r a m e w o r k w i t h i n w h i c h t h e
p l a n n i n g s h o u l d be c a r r i e d




out.

detailed

5

The c i t y , a l o n g "with i t s a p p l i c a t i o n f o r s p e c i f i c a i d , w o u l d s u b m i t i t s p l a n f o r t h e l o n g - t e r m f u t u r e development o f t h e e n t i r e u r b a n comm u n i t y , accompanied b y d a t a t o

justify a l l a s s u m p t i o n s as t o f u t u r e changes.

Such d a t a and t h e p l a n s t h e m s e l v e s w o u l d be examined i n W a s h i n g t o n ,
p e r h a p s (when t h e f a c i l i t i e s a r e c r e a t e d ) i n t h e a p p r o p r i a t e
offices.

regional

S u i t a b l e a i d w o u l d be e x t e n d e d , w h e r e n e c e s s a r y , t o e n a b l e t h e

m u n i c i p a l i t i e s t o produce plans s a t i s f a c t o r y from a l l
view.

and

(For f u r t h e r discussion,

relevant points

of

see annexed memorandum I . )

E lI i m i n a t i o n,1 IoIf Slums I and B l IiI g. •h t eII-d I A r e a s
M
.
,
I
TY
Ml
The s p e c i f i c p r o p o s a l w o u l d b e f o r t h e a c q u i s i t i o n b y t h e

city

o f a l l the r e a l p r o p e r t y i n a c l e a r l y d e f i n e d slum or b l i g h t e d area w i t h
the view to eventual

removal o r r e h a b i l i t a t i o n o f t h e s t r u c t u r e s .

l a n d a c q u i r e d i n t h e p r o c e s s w o u l d be a b y - p r o d u c t
sanitation?
have c o s t

i n the m a t t e r of i t s

subsequent use i t

o f t h e ^ j ob o f

civic

w o u l d be deemed t o

nothing.
D e c i s i o n as t o a c q u i s i t i o n ,

as w e l l as t o f u t u r e k i n d o f u s e ,

s h o u l d be by t h e c i t y p l a n n i n g o r g a n i z a t i o n ;

not by t h e l o c a l

housing

a u t h o r i t y , b e c a u s e t h e c o n s i d e r a t i o n s i n v o l v e d w o u l d be b r o a d e r
housing alone,
be l e f t to

The

A c t u a l use o f t h e l a n d ,

others.

than

as w i l l a p p e a r p r e s e n t l y ,

Thus, s l u m - c l e a r a n c e would n o t be l e g a l l y t i e d

should
to

housing.
Upon a p p r o x a l b y t h e a p p r o p r i a t e a g e n c i e s i n W a s h i n g t o n ^ f

all

a s p e c t s o f a p r o p o s a l t o a c q u i r e p r o p e r t y , t h e Government s h o u l d be p r e -




p a r e d t o advance f u n d s f o r t h e e n t i r e c o s t o f a c q u i s i t i o n .

Possibly

payment o f t h e p r i n c i p a l m i g h t be r e q u i r e d , a l o n g w i t h a s h a r e o f
subsequent n e t p r o c e e d s f r o m t h e p r o p e r t y ,

i f any, i n - l i e u o f

I n v i e w o f t h e f i s c a l p o s i t i o n o f most c i t i e s ,
reasons,
drastic

re-

the

interest,

however, t h e r e a r e

strong

e i t h e r f o r g i v i n g them t h e money o u t r i g h t i n c o n s i d e r a t i o n o f a
overhauling of t h e i r tax structures,

o r f o r r e q u i r i n g them o n l y

p c y o v e r a s h a r e o f such n e t p r o c e e d s as may r e s u l t
d i s p o s i t i o n of the property,

from l e a s i n g or

to

other

(See annexed memorandum I . )

The C e n t r a l U r b a n Redevelopment Agency s h o u l d be s e t u p as e a r l y
as p o s s i b l e ,

i n o r d e r t h a t t h e S t a t e s and t h e towns and c i t i e s

might

p r o c e e d a t once w i t h t h e necessuxy l e g i s l a t i o n a n d t h e o r g a n i z a t i o n o f
p a r t o f t h e program.

By t h e t i m e t h e d e f e n s e emergency i s

over, the whole

a d m i n i s t r a t i v e s e t - u p s h o u l d be f u n c t i o n i n g , w i t h a g r e a t d e a l o f

land

a l r e a d y a c q u i r e d ( o r under o p t i o n or w i t h condemnation proceedings
under w a y ) ,

well

s o t h a t l a r g e o p e r a t i o n s o f d e m o l i t i o n and c o n s t r u c t i o n

be s t a r t e d w i t h o u t d e l a y .

on Government c r e d i t )

could

To i n i t i a t e t h e p r o g r a m t h e CURA s h o u l d be

a d e q u a t e l e g a l powers and a n i n i t i a l

appropriation (or authority to

o f a b o u t $500 m i l l i o n ,

their

or p o s s i b l y double

given

borrow

this

amount.

Housing P r o d u c t i o n

Research

I t i s a m a t t e r o f common knowledge t h a t
is

our most backward i n d u s t r y .

handicraft business.




Its

W i t h few e x c e p t i o n s ,

residential
it

construction

is a small-scale

i n e f f i c i e n c i e s and e x c e s s i v e c o s t s r e s u l t

from

-

monopoly p r i c e s o f m a t e r i a l s ,
materials,

7 -

from unwarranted d i s t r i b u t i o n costs

from a m u l t i p l i c i t y

o f l a b o r and s u b c o n t r a c t o r

and f r o m t h e r a c k e t s and c o n s p i r a c i e s p e r m e a t i n g
Conceivably,
to

rationalize i t s e l f

it.

f o r nobody knows how l o n g , u n t i l

eventually

h a s n f t d u r i n g t h e long p e r i o d of

l u t i o n a r y change i n o t h e r i n d u s t r i e s ) .

solution,

organizations,

o f c o u r s e , t h e i n d u s t r y m i g h t be a b l e
(although i t

of

revo-

B u t i f we w i s h t o a v o i d w a i t i n g ,

some p i o n e e r s t r u g g l e s t h r o u g h t o a

t h e F e d e r a l Government w i l l have t o s t e p i n and h e l p f
To t h i s

gested above,

end, t h e N a t i o n a l L a b o r a t o r y f o r H o u s i n g R e s e a r c h ,

s h o u l d b e c r e a t e d anc r i v e n an i n i t i a l a p p r o p r i a t i o n o f a b o u t

twenty m i l l i o n d o l l a r s ,

T h i s sum s h o u l d r e m a i n a v a i l a b l e u n t i l used up

and s h o u l d be r e p l e n i s h e d i f
Laboratory

sug-

and when n e c e s s a r y ,

The mandate o f

the

s h o u l d be t o c o n t i n u e o p e r a t i o n s u n t i l a s o l u t i o n on a

full

c o m m e r c i a l s c a l e i s f o u n d o f t h e -oroblem o f mass p r o d u c t i o n o f good l o w c o s t d w e l l i n g s , b o t h f o r r e n t and f o r s a l e .

It

s h o u l d engage t h e

s t r u c t u r a l e n g i n e e r s and a r c h i t e c t s t o be f o u n d , and i t s

ablest

operations

c o n s i s t not o n l y o f l a b o r a t o r y experiments ( i n several d i f f e r e n t

should

regions)

b u t o f t h e c o n s t r u c t i o n o f s u f f i c i e n t numbers o f d w e l l i n g u n i t s o f

various

kinds to

show t h e i n d u s t r y how t o s o l v e t h e o r g a n i z a t i o n a l and t e c h n i c a l

problems

involved.
It

facturers,

s h o u l d c u t c o u r a g e o u s l y t h r o u g h t h e maze o f m a t e r i a l manUf

distributors,

i n the i n d u s t r y .

subcontractors,

and s t u l t i f y i n g

rales of

Where n e c e s s a r y , t o o b t a i n f a i r p r i c e s f o r

large

q u a n t i t i e s o f m a t e r i a l s d e l i v e r e d d i r e c t l y from f a c t o r y t o s i t e ,




labor

it

should

- 8 -

be p r e p a r e d t o b u i l d i t s

ovm m a n u f a c t u r i n g o l a n t s .

To l a b o r i t

pay good w a g e s , on t h e b a s i s o f c o l l e c t i v e b a r g a i n i n g s
be t o l e r a t e d no j u r i s d i c t i o n a l d i s p u t e s
and e c o n o m i c a l

should

but there

or o t h e r o b s t a c l e s t o

should

efficient

production.

Stimulation of Private

Enterprise

From e x p e r i e n c e w i t h r e n t a l h o u s i n g u n d e r S e c t i o n 207 o f
N a t i o n a l Housing A c t , i t

the

i s c l e a r t h a t t h e P r o d u c t i o n and o w n e r s h i p

r e n t a l p r o p e r t y , when encumbered w i t h h i g h o e r c e n t a g e m o r t g a g e s ,
be o t h e r t h a n h i p r h l y s p e c u l a t i v e .
S i n c e u n d e r S e c t i o n 207 i t

cannot

(See annexed memoranda I I and I V . )

i s n->t p o s s i b l e t o h o l d o u t t h e hope o f

commensurate w i t h t h e r i s k s , t h e o n l y p r a c t i c a b l e a l t e r n a t i v e i s
cumbered o w n e r s h i p b y i n v e s t o r s

of

s e e k i n g moderate b u t s t a b l e

profits

unen-

returns.

The p r i n c i p l e o f t h i s was embodied j u s t a f t e r t h e f i r s t W o r l d t'fer and
l a t e r e x t e n d e d i n l e g i s l a t i o n b y t h e S t a t e o f New Y o r k , p e r m i t t i n g
i n s u r a n c e companies t o c o n s t r u c t

life

o r o t h e r w i s e a c q u i r e and own and o p e r a t e

h o u s i n g f o r r e n t — n o t o n l y i n Nev/ Y o r k b u t i n any S t a t e whose l a w s do
not c o n f l i c t

( t h e r e a r e v e r y few c o n f l i c t s ) .

O n l y one i m p o r t a n t

company

has t h u s f a r done a n y t h i n g s u b s t a n t i a l u n d e r t h e New Y o r k l a w ; b u t
e x p e r i e n c e d u r i n g n e a r l y 20 y e a r s has caused i t

its

recently to construct

an

immense p r o j e c t o f o v e r 1 2 , 0 0 0 d w e l l i n g s a t a c o s t o f o v e r 50 m i l l i o n
dollars.
Other great

companies d o m i c i l e d i n New Y o r k have a p p a r e n t l y

b e e n u n w i l l i n g t o u n d e r t a k e t h e e n t i r e r i s k o f such t r a n s a c t i o n s .

If,

h o w e v e r , t h e y c o u l d b e p r o t e c t e d a g a i n s t l o s s and g u a r a n t e e d even a v e r y




l o w r e t u r n , t h e r e i s good r e a s o n t o b e l i e v e

(on t h e basis

t h e m have s a i d i n p r i v a t e d i s c u s s i o n s )

t h e y would- go ahead u n d e r t h e

that

New Y o r k l a w , n o t o n l y i n t h a t S t a t e b u t e l s e w h e r e .

o f w h a t many o f

W i t h t h e movement

s t a r t e d , a l l t h e S t a t e s w o u l d be l i k e l y soon t o oass l e g i s l a t i o n
t h e "way, n o t o n l y f o r l i f e
t r u s t estates,

foundations,

of the opportunities

clearing

i n s u r a n c e companies b u t a l s o f o r s a v i n g s
and o t h e r h o l d e r s o f s a v i n g s , t o t a k e

offered f o r safe

Thoce o p p o r t u n i t i e s

CDUICI

banks,

advantage

investment.

be c r e a t e d b y an amendment t o

N a t i o n a l Housing A c t t h a t would e n t a i l p r o b a b l y less

the

r i s k to the

Govern-

ment t h a n now a t t a c h e s t o m o r t g a g e i n s u r a n c e u n d e r S e c t i o n 207.

The amend-

ment w o u l d a u t h o r i z e FEA t o i n s u r e r e c o v e r y o f s u b s t a n t i a l l y a l l

of

o r i g i n a l i n v e s t m e n t and a n e t a n n u a l r e t u r n o f ,
p e r i o d of something l i k e t h i r t y y e a r s .

the

say, 2 oer cent f o r

Technical details

a

o f t h e scheme

have a l r e a d y been w o r k e d o u t , i n a f a s h i o n p r o n o u n c e d w o r k a b l e b y
representatives

o f a number o f l a r g e i n s t i t u t i o n s .

(See annexed memo-

randum I V . )
If

t h e scheme w e r e p u t i n t o e f f e c t a t o n c e , i t w o u l d r o u n d o u t

t h e p r o g r a m p r o p o s e d above f o r t h e e l i m i n a t i o n o f slums and b l i g h t e d

areas.

The c i t i e s , when t h e y came i n t o p o s s e s s i o n o f l a n c j , w o u l d s t a n d r e a d y t o
lease i t

on r e a s o n a b l e t e r m s f o r use i n a c c o r d a n c e w i t h t h e m a s t e r

and p r i v a t e e n t e r p r i s e w o u l d be g i v e n a n u n p r e c e d e n t e d

plan,

opportunity.

Sometimes, no d o u b t , t h e h o u s i n g d e v e l o p m e n t w o u l d c o n s i s t
the r e h a b i l i t a t i o n




o f e x i s t i n g s t r u c t u r e s , w h i l e i n o t h e r cases new

of

- 10 -

d w e l l i n g s w o u l d be b u i l t .
be b u i l t

on v a c a n t l a n d ,

slum or b l i g h t e d a r e a s .

I n some i n s t a n c e s ,

t o o , the housing would

perhaps i n t h e s u b u r b s ,

cleared

FHA e x p e r i e n c e , t h o u g h n o t l a r g e i n s c a l e ,

demonstrated t h a t p r o j e c t s c o n s i s t i n g o f s i n g l e
k i n d o f r e n t a l accommodations most needed
profitable

rather than i n

f a m i l y houses ~

has

the

can be made sound and

investments.
D e s i r a b l e p r o j e c t s w o u l d be c a l l e d t o t h e a t t e n t i o n

institutional

of

i n v e s t o r s — " s o l d 1 1 t o them — b y d e v e l o p e r s and b u i l d e r s

a n i m a t e d by a n t i c i p a t i o n o f p r o f i t s
w o u l d be d i s t i n c t

f r o m subsequent

from t h e c o n s t r u c t i o n j o b ,

which

ownership.

The r e a l owners w o u l d have s t r o n g i n c e n t i v e s t o

obtain

consider-

a b l y b e t t e r n e t e a r n i n g s t h a n t h e g u a r a n t e e d minimum o f 2 p e r c e n t ;
being public

institutions,

t h e y w o u l d n o t be l i k e l y t o a t t e m p t

but,

any

profiteering.

Public

Housing
As now o r g a n i z e d , t h e USHA combines t h e b a n k i n g f u n c t i o n w i t h

the subsidizing function.
standing of i t s

T h i s has r e s u l t e d i n w i d e s p r e a d m i s u n d e r -

f i n a n c i a l operations.

I n England, t h e two

functions

a r e e n t i r e l y s e p a r a t e , and a somewhat s i m i l a r scheme has b e e n success**
fully

operated w i t h o u t t h e public
It

made h e r e .

c r i t i c i s m prevalent i n t h i s

country.

i s suggested t h a t a s i m i l a r s e p a r a t i o n o f f u n c t i o n s be
The b a n k i n g f u n c t i o n m i g h t be l e f t t o t h e c h u c e

of t h e

h o u s i n g a u t h o r i t i e s , w h i c h w o u l d have t h e o l e d g e o f s u b s i d y a d e q u a t e




local
to

- 11 -

w a r r a n t l o w i n t e r e s t r a t e s , among a number o f o r i v a t e
As a l a s t
if

resort,

institutions.

t h e y m i g h t c a l l upon t h e F e d e r a l L o a n A g e n c y ;

deemed d e s i r a b l e ,

t h e l o a n s m i g h t be made b y t h e CURS.

p r e s e n t USEA b a s i s , b u t i n a manner e n t i r e l y d i f f e r e n t
f o r t h e e l i m i n a t i o n o f slums and b l i g h t e d a r e a s .

or,

on t h e

f r o m t h e advances

At a l l events,

USHA w o u l d be r e s p o n s i b l e o n l y f o r g r a n t i n g t h e s u b s i d y *

the

This would

t h e n be r e c o g n i z e d as t h e o n l y r e a l c o s t o f t h e p u b l i c h o u s i n g t o
F e d e r a l Government — w h i c h i s i n d e e d t h e case now, a l t h o u g h n o t

the
gener-

a l l y so u n d e r s t o o d .
D u r i n g t h e c u r r e n t emergency, t h e p r i n c i p a l

f u n c t i o n of the

USHA s h o u l d be t o c o l l a b o r a t e w i t h t h e l o c a l a u t h o r i t i e s ,
private enterprise
of defense housing.

c a n n o t be r e l i e d upon t o do t h e j o b ,
With the administrative

i n a r e a s where-

f o r the

production

s o t - u p proposed above,

w o u l d be i n a p o s i t i o n t o make most o f i t s i m m e d i a t e o p e r a t i o n s

it

fit

into

and f u r t h e r t h e l o n g - r a n ^ e p o l i c y d e v e l o p e d b y t h e C e n t r a l U r b a n Red e v e l o p m e n t Agency.
Before large-scale

o p e r a t i o n s a r e resumed, a t h o r o u g h

e x a m i n a t i o n s h o u l d be made*housing,

(1)

of t h e c o n s t r u c t i o n standards o f

(2) o f t h e term of a m o r t i z a t i o n of the c a p i t a l cost,

(3) of the f e a s i b i l i t y

rethe

and

o f r e h a b i l i t a t i o n o f e x i s t i n g s t r u c t u r e s as w e l l

as p r o d u c t i o n o f new ones.

(See annexed memorandum

I n c a r r y i n g o u t the

III.)

c ) m p r e h e n s i v e program h e r e

suggested

w i t h r e s p e c t t o h o u s i n g , a l l p o s s i b l e emohasis s h o u l d be { r i v e n t o w h a t




- 12

m i g h t be d e s c r i b e d a s t h e t w o ends o f t h e c h a i n o f r e l a t e d p r o b l e m s ; —
c l e a r a n c e o f slums and b l i g h t e d a r e a s and t h e r r t i c n a l i z a t i - n o f
building; industry.

P r e s s u r e w o u l d t h u s be c r e a t e d , b o t h u p o n p r i v a t e

e n t e r p r i s e and uoon l o c a l g o v e r n m e n t , t o p r o v i d e a d e q u a t e numbers
d w e l l i n g s o f t h e k i n d s t h a t a r e n e e d e d ; and a t t h e same t i m e t h e
and t h e f i n a n c i a l

the

of
incentives

mechanisms f o r t h e p u r p o s e w o u l d be r e a d y a t hand.

Y f i t h r e s p e c t t o t h e b r o a d e r aims o f t h e p r o g r a m , a s y s t e m a t i c
b e g i n n i n g w o u l d be made a t once t o c o r r e c t t h e w e l l n i g h u n e n d u r a b l e
s i t u a t i o n i n t o w h i c h most o f t h e c i t i e s have d r i f t e d .

To c o m p l e t e t h e

w h o l e j o b w i l l be a t a l l e v e n t s a m a t t e r o f y e a r s , b u t i t

c a n and

s h o u l d b e p u r s u e d as r a p i d l y as t h e men and m a t e r i a l s n o t needed o r
employed on o t h e r j o b s a r e a b l e t o do




it.