works and improvements, and most particularly, as we proceed with plans and implementation of our multi-million dollar city freeways, we are faced with the displacement of an ever-increasing number of people.

The key to success in the first concept which emphasized clearance and redevelopment, and in the broader urban renewal concept of today, lies in the ability to stimulate the production of housing by private enterprise geared to the economic needs of families to be displaced without sacrifice of sound standards of design, construction, livability, and size.

We now stand face to face with the disheartening knowledge that, though many tools and techniques have been devised in the intervening years, we see little or no progress made toward an increased supply of housing suitable to the needs of displaced families.

Through coordinated planning of additional public housing units with our slum clearance project we expect to house all those eligible which will number approximately one-third of the residents of the project area. Despite an aggregate of $21 billion devoted to housing aids last year, the families ineligible for public housing continue to face almost insurmountable difficulties. These families for the most part have yearly incomes ranging from $3,000 to $5,000 and include minority group families of all sizes, white families of five-plus members, and elderly persons with fixed incomes.

As we evaluate the tools available to us, we find section 221 mortgage insurance with a $9,000 limitation patently unrealistic for a high-cost area such as ours. Builders relate their lack of activity to the cost of construction, the cost of land development, and restrictive requirements of FHA.

Senator DOUGLAS. By "restrictive requirements," do you mean building plans?

Mayor WALZ. Building plans, among others.

Senator DOUGLAS. I thought that one of the good features of FHA was the fact that it did hold construction to certain minimum standards of durability and safety and was some barrier against jerry-built homes.

Mayor WALZ. That is true, except that under section 221 the restriction of $9,000-with a possibility of increasing it an additional thousand-is unrealistic in a high-priced area such as the one we are considering.

Senator DOUGLAS. I do not object to that, but I wondered about your last clause at the bottom of page 2, "restrictive requirements of FHA," just what it was that

Mayor WALZ. That is the excuse that we invariably get from the builders as to their lack of interest in building this type of housing under section 221. Their contention is they cannot build housing in this category under the restrictive requirements of FHA.

Senator DOUGLAS. I mean, if you throw the gates wide open on standards of building construction, do you not pave the way for jerrybuilt homes, which in the end will be a bad investment?

Mayor WALZ. Not necessarily, if building codes are modern and appropriate and properly enforced.

Senator DOUGLAS. How many cities have modern building codes? Mayor WALZ. We do in our city, fortunately.

Senator SPARKMAN. Mayor, before you proceed, I notice your reference to the $9,000 limitation. It is $10,000 now, is it not, in highcost areas!

Mayor WALZ. It is permissible to increase it an additional thousand. The basic figure is $9,000, but it may be increased an additional thousand.

Senator SPARKMAN. What would you suggest as a figure there? Mayor WALZ. I would feel that somewhere in the area of $12,000 to $14,000 would be a more realistic figure.

Senator SPARK MAN. From $12,000 to $14,000?

Mayor WALZ. That may vary in various parts of the country, but in our particular high-construction-cost area, in an area that is the fifth fastest growing in the country and, as I understand, the third east of the Mississippi, with most of the construction, the bulk of the construction, in the $17,000 to $25,000 class, it is very difficult to get contractors to build down in the lower brackets for the low-income or middle-income family, what would be in the $14,000 home-construction bracket. So that the $9,000 to $10,000 figure now appearing in section 221 is not appropriate to existing conditions in our cities.

Senator SPARKMAN. Of course, you realize when you get away from, say, around $12,000 you are getting pretty close to being out of range for these very people you want to build for. A person with a $5,000 income could afford a $12,500 house.

Mayor WALZ. Of course, you have the FHA limitation on rental which I assume, would be the appropriate figure applied-plus principal, of course to amortization, which is 18 per cent.

Senator SPARKMAN. The rental and the amortization are pretty close to the same. Just as a rule of thumb we say that the cost of a unit should not exceed 21⁄2 times the income of the purchaser or of the renter.

Mayor WALZ. My recollection was there was a specific provision that set out the 18 to 20 percent as a requirement.

Senator SPARKMAN. Twenty percent. It works the same way.
Mayor WALZ. The same way; yes.

Senator SPARKMAN. The same thing.

Mayor WALZ. In that connection, I think, our failure to activate housing construction within the rental and sale prices needed by residents of blighted areas can be attributed to the lack of knowledge of all the dynamic factors involved. We need a factfinding program on a national scale, but in sufficient detail to clarify the socioeconomic factors affecting these families and the urban centers in which they live.

May I add, parenthetically, that what I am referring to there is a current study not only applied to the facts that one normally finds in the census reports but current, up-to-date facts with respect to income brackets, employment, and the other, as I referred to here, "dynamic factors" which a family must face in supplying the needs of housing for themselves. The Federal agencies must look at these factors in the same light.

I submit that if the urban-renewal programs are to attain goals set forth in the national housing policy and not just sweep families from one blighted area to another, and if we are to afford private enterprise maximum opportunity to serve this segment of our population, there must be an immediate and intensive effort made now to bring to light

that in formation which can provide a frame of reference for tooling more realistic financial aids.

The second point to which I have reference is the Federal-local relations. We have seen an increasing domination by the Federal agency, which results in a consistent reduction of local determination. This was not the intent of Congress, and not only spells danger to our established right of determination but also hampers progress to the point that we creep forward at a snail's pace.

Our efforts to achieve the twofold purpose of elimination and prevention of blight is already fraught with difficulty, so that the speed with which we can proceed in no way matches the speed of deterioration. The ever-increasing demands on the part of the Federal agency and the directives and counterdirectives have made our survey and planning stage far more lengthy and costly than necessary.

I do not wish to challenge the need for revision or the evolvement of new techniques as this complex and vital program is broadened, but I do sincerely believe that there must be far better judgment used in each individual case, so that plans for any given project are not forever being reviewed, rereviewed and, again, stringently reviewed, against a backdrop of ever-changing views for procedure.

Further, I believe that the Federal agency has no right to dictate the size, scope, and cost of a project. Such decisions must be left to the judgment of local officials and will, at any rate, be limited by the financial means of the locality and, in all probability, will be far below a theoretically perfect goal.

Though an effort was made to analyze Federal-local relations for the purpose of reducing the frustrating and costly bureaucratic entanglements, little relief has been felt. We feel that much more can be done to improve specific areas in this relationship, but such improvement will be predicated upon a continued clarification and repetition of the intent of Congress to have both decisions concerning urban development emanate from local officials, geared to local pattern and needs, and brought to fruition without restrictive controls or unwarranted amendments.

Senator SPARKMAN. Mayor, we just had testimony from Mr. West advocating, as I understood it, abolition of the urban-renewal program. Do you agree with that?

Mayor WALZ. Sir, may I put it this way: Whatever one's concept or theory of government may be, the inescapable fact is that since 1949, at the instance and encouragement of the Federal Government, the municipalities have been encouraged to proceed on a blight- and slum-clearance program. Much effort and much money have been devoted to that effort.

Senator DOUGLAS. You do not have to do it. I mean it is optional with you to do this. There is no compulsion from the Federal Government.

Mayor WALZ. No, there is no compulsion. But it would seem to me there would be a tremendous waste of money, Federal and local, if at this point the entire program were scrapped.

Senator DOUGLAS. Then you are opposed to scrapping the program? Mayor WALZ. At this point I am, yes.

Senator DOUGLAS. This is interesting testimony. What about the argument that Mr. West advanced that the cities should take care of

this themselves; that they have bonding capacity, tax resources, and so forth, and that cities should care for this?

Mayor WALZ. My observation in most cities, and it does not pertain only to my own city, is that meeting their local municipal needs, the municipal services that are required to be furnished, particularly in this ever-growing metropolitan area which now extends from Boston to Richmond, takes the entire credit of practically every city on the coastal plain. So that the broadening of these programs to take in the responsibilities for housing and for displaced persons, displaced by virtue of the Federal road program, cannot be met alone by local financing.

Of course, municipalities are assuming one-third of the financing in this slum-clearance program, but no provision has been made and I cover this later in my next point-no provision has been made by the Federal Government to take care of persons displaced by virtue of this multi-billion-dollar Federal highway system. Someone is going to have to take care of the many, many families that are going to have to find homes elsewhere.

Senator DOUGLAS. How is your bonding capacity? Have you bonded up to the limit in Wilmington?

Mayor WALZ. No, sir; we have not. We have outstanding approximately $29 million in general obligation bonds of our city.

Senator SPARKMAN. Excuse me just a minute. I will ask to be excused to answer the quorum call. Senator Frear has already answered the quorum call and can stay.

Senator DOUGLAS. I will have to ask to be excused, too, but I will come back if I may.

Senator FREAR. I think you are in safe hands now.

Mayor WALZ. I feel that way. I assumed I was up till now.
Senator FREAR. I am sure you were, too.

Mayor WALZ. May I proceed, Senator?

Senator FREAR. You may. Would you rather be seated, Mayor?
Mayor WALZ. I prefer to stand, if I may.
Senator FREAR. All right.

Mayor WALZ. The third area causing grave concern to communities all over the country is the reduction of the requested capital grant authority from the amount proposed in the President's budget. Two hundred and fifty million dollars for each of the next 2 fiscal years with an additional $100 million to be released at the discretion of the President is looked upon by housing and city officials as a minimum to meet the needs for adequate future planning.

The language of the Housing Act of 1954 showed the recognition of Congress that shortsighted piecemeal planning was both inadequate and ineffectual, and the broadened concept was predicated on the belief that long-range, well-integrated planning is necessary.

Perry Cookingham, one of the country's outstanding city managers, voiced the need for urban renewal planning in conjunction with the highway program in an article appearing in the February issue of Street Engineering, as follows:

Because proposed routes are bound to major impact on the entire community and the way its people live, an urban renewal program can serve to speed construction of highways in and around cities under the accelerated highway program. Progressive cities, confronted by problems stemming from the building and the proposed building of multilane, grade-separated, limited-access routes in their

vicinities, are recognizing the essentiality of tying their urban renewal efforts to the unprecedented national highway program. It becomes increasingly evident that the more advanced the urban renewal program, the fewer and shorter will be the delays that occur while officials and civic-minded citizens give sober thought to the overall effect proposed routes will have on the city as a whole.

If we look no further than the need for coordination with highway planning we see the gross negligence which will result if one program is subsidized to proceed with tremendous speed and the other is hampered through lack of funds from assuming a role which could facilitate the alinement of highways, reduce delay in construction, and reduce hardship to people involved whose properties lie in the path of the freeways.

The proposed reduction of capital grant authority at this time is dangerously unrealistic when compared with the need for action and acceleration in programing now being evidenced by cities.

Senator FREAR. May I ask a question at this point?

Mayor WALZ. Please do.

Senator FREAR. First, I am sorry I was not here for the beginning of your testimony, but I am sure you understand why.

The Senator from Illinois was questioning you when I entered, and you, at that time, I believe, brought out the point of the displacement that has been caused or will be caused by this Interstate Highway System.

Mayor WALZ. That is right.

Senator FREAR. To what extent will that affect the city of Wilming ton and its surroundings; may I ask?

Mayor WALZ. As I understand, the contemplated route or proposed route through our city goes through a section of our city which one might say falls within the middle category of housing, in the $14,000 to $16,000 bracket. It does not go

Senator FREAR. Is that Union Park Gardens?

Mayor WALZ. That is correct. It involves approximately 90 such homes. It involves a total of 140 homes, some of which fall in a lower category and some in a higher category.

Senator FREAR. Yes.

Mayor WALZ. Altogether, about two-hundred-odd properties.

Outside of our city limits, north of our city, I understand it will involve only 10 properties, and they are all in probably a high-price bracket.

Senator FREAR. Yes. That is sort of an estate area in that part of Wilmington?

Mayor WALZ. Yes.

Senator FREAR. I am interested, however, in the families that may be displaced in the city. Of course, I am a bit familiar-not as much as you are, but a bit familiar-with the area up there, and the Union Park Gardens park or development is an area in itself. Those people, as I view the thing, are people who have to live within a prescribed income. In other words

Mayor WALZ. May I describe it this way to you, if I may, Senator: We have in this group a large number of people where the breadwinner is retired. The home is paid for.

Senator FREAR. Right.

Mayor WALZ. There is a fixed income which is sufficient to keep body and soul together, living quietly.