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displaced by a highway project may receive up to $3,000 for moving expenses while another businessman displaced by urban renewal may receive up to $25,000.

In the past, the average number of displacements per year across the country as a result of federally assisted urban renewal alone totaled about 34,000. This figure is expected to double in coming years. In New York State during 1964, 2,027 families, 787 individuals, and 537 businesses were displaced by federally assisted urban renewal programs in 25 cities. Not all of these people required or received payments for moving costs, but more than half did-for a total of $973,005. This is a good indication of the size of the program in New York and the prospects for expansion of these relocations.

We have a problem facing us in the Fordham area of the Bronx in New York City right now. The General Services Administration is proposing to build a new post office and Federal office building in this area. Forty-one commercial properties which pay from $30 to $2,000 a month rent will have to be relocated; approximately 250 people paying from $46 to $103 a month rent for 62 rental apartment units will have to move; and 20 private homes in the lower middle income range will have to make way for the new building.

How are these people to be assisted to find new housing and where will they find the financial resources to relocate? How will the businesses reestablish themselves in a new neighborhood and what will they do to keep going while they build up their businesses? GSA may now pay only the fair market value of the property acquirednothing for expenses, losses, and damages incurred by these owners and tenants as a direct result of moving themselves, their families, and their possessions.

A final word about S. 1201 which the committee has considered with S. 1681. S. 1201 establishes a uniform relocation payments policy for all direct Federal programs. In addition, it includes four titles covering different aspects of compensation arising from property acquisition. These provisions would require the head of the acquiring agency to establish fair and reasonable prices for the property not less than the appraised fair value.

Since this bill would make major changes in Federal land acquisition practices and in the Federal tax laws, I believe it deserves careful consideration and study, which the affected agencies have indicated they desire. I believe we should have the recommendation of all these agencies before proceeding on this crucial question. Highly complex problems are involved which require our attention so that we realize our purpose of providing fair and adequate treatment of the people and businesses involved.

S. 1201 also does not require assurance that adequate housing be available for those to be relocated as a result of a federally assisted project. I believe this provision is essential to relocation programs and should be included.

We want our cities to continue to grow and prosper. We want to encourage improvements through urban renewal and highway and Federal building programs. But we also want this progress accomplished with a minimum amount of hardship to families and businesses who are affected. This we can with a uniform policy on relocation compensation tied in with careful programs of preparation and as

sistance to these groups in finding adequate housing and business sites. I believe S. 1681 will help move toward this goal.

Senator MUSKIE. Our next witness this morning is from the Advisory Commission on Intergovernmental Relations, Mr. William G. Colman, Executive Director.

There will be included in the record at this point the report of the Advisory Commission on Intergovernmental Relations, which includes a table showing a comparison of present Federal relocation policies.

ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS,
Washington, D.C., June 29, 1965.

Hon. EDMUND S. MUSKIE,

Chairman, Subcommittee on Intergovernmental Relations,
Committee on Government Operations,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in reply to your letter of May 21 to Mr. Bane requesting the views of the Advisory Commission on Intergovernmental Relations with respect to S. 1201, "a bill to provide for equitable requisition practices, fair compensation, and effective relocation assistance in real property for Federal and federally assisted programs, and for other programs"; and S. 1681, “a bill to provide for uniform, fair, and equitable treatment of persons, businesses, or farms displaced by Federal and federally assisted programs." S. 1201 deals with many facets of the Federal Government's policies and practices in acquiring real property, among them the problem of relocating persons and businesses. S. 1681 deals exclusively with the relocation problem. Since the Commission has taken positions only with reference to the relocation aspects of real property acquisition, our comments on the relative merits of the two bills are confined to their relocation implications.

In its report "Relocation: Unequal Treatment of People and Businesses Displaced by Governments," approved in January 1965, the Commission recommended that the Congress establish a uniform Federal policy of relocation assistance for those displaced by Federal and federally aided programs. Both of the cited bills now before your subcommittee would accomplish this objective. It is the Commission's opinion, however, that S. 1681 establishes requirements resulting in stronger protection of the interests of the displaced, with particular reference to housing accommodations, and provides a more equitable and workable Federal-State-local formula for sharing of relocation costs. Therefore, while we would endorse passage of both bills in the interest of a uniform Federal relocation policy, we would consider S. 1681 to be preferable to S. 1201 in certain respects.

THE COMMISSION'S STUDY OF THE RELOCATION PROBLEM

The Commission's report on relocation placed important reliance on responses to a questionnaire survey conducted in cooperation with the U.S. Conference of Mayors of the relocation practices of cities over 100,000 population. In addition, Commission staff worked closely with the staff of the Select Subcommittee on Real Property Acquisition of the House Committee on Public Works.

Relocation problems

From its analysis of the impact of Federal, State, and local government programs in displacing people and businesses, the Commission made these findings: 1. Great inconsistencies exist in present provisions for relocation assistance. These inconsistencies concern the amount and scope of relocation payment, advisory assistance, and assurance with respect to availability of standard housing. Nationwide, federally aided urban renewal and highway programs cause the most displacement. The urban renewal program makes the most comprehensive provision for relocation assistance; relocation provisions of the highway program are appreciably less generous.

To illustrate, a homeowner whose property is condemned for a federally aided urban renewal project can claim moving costs up to $200. The man across the street, whose property is taken for a federally aided highway project, is also entitled to a maximum of $200 for moving expenses, but only if the State has authorized participation in the Federal relocation payments program. Twentyeight States had not authorized such payments as of December 1964, and even among those that had, a sizable number had not allowed payments up to the

Federal dollar limit, or not for tenants and lessees. Inconsistency in payment of business moving expenses is even more striking since the Federal Aid Highway Act allows such expenses only up to $3,000, whereas the Federal urban renewal program pays the businessman up to $25,000 for the expenses of each move. Finally, Federal urban renewal provides fairly comprehensive advice and counseling to displacees; the Federal highway program provides no such service to businesses and individuals.

2. The single greatest problem in relocating families and individuals is the shortage of standard housing for low-income groups. Nonwhites have the greatest problem of all population groups. Large families and the elderly present other special housing problems.

3. Among business displacees, small businesses, particularly those owned and operated by the elderly-such as "Mom and Pop" grocery stores-are major displacement casualties. They have less capital, find it more difficult to secure outside financing, and have little energy or spirit to resume business in a new location.

4. Advisory assistance is of growing importance in the relocation process. The poor, the nonwhite, the elderly, the small business people need intensive counseling to prepare them for displacement and help them carry out their moves. 5. The relocation process often discloses the social and economic needs of displaced persons and thereby offers a unique opportunity for effective application of the techniques and services of local, State, and Federal programs dealing with the less privileged social and economic groups, such as housing, public assistance, education, employment, and job training.

Number of families and businesses affected

One hundred of the largest cities in the country reported in the Conference of Mayors survey that 36,900 families and 5,800 businesses were displaced by all types of governmental action in the past year-local, State, and Federal. They estimated that within their jurisdiction an average of 62,500 families and 8,000 businesses would be displaced in each of the next 2 years. Sixty-one percent of the estimated displacements of families and 88 percent of the displacements of businesses were attributed to the federally aided urban renewal and highway programs.

The staff of the House Select Subcommittee on Real Property Acquisition estimated that in the next 4 to 8 years Federal and federally aided programs will displace an average of about 111,000 families and individuals, 18,000 businesses and nonprofit organizations, and 4,000 farm operators each year. The federally assisted programs alone (mostly urban renewal and highway programs) are estimated to displace an average of about 106,000 or 96 percent of the families and individuals, 17,000 or 96 percent of the businesses and nonprofit organizations, and 1,350 or 34 percent of the farms each year.

Average annual displacements by the nine Federal departments and agencies causing substantial dislocation in the next 4 to 8 years would amount to the following (figures rounded):

Average displacement per year by direct Federal and federally assisted programs causing substantial dislocation estimated for next 4 to 8 years

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The Federal Government's displacement of persons and businesses is thus substantial particularly with respect to the federally aided urban renewal and highway programs. Urban renewal displaces about 60 percent of the families and 73 percent of the businesses displaced by all programs; the highway program displaces about 33 percent and 22 percent, respectively; and the remaining programs displace 7 percent and 5 percent, respectively.

Recommendations for Federal action

The Commission recommended legislative and administrative action by the Federal Government, the States, and local government to achieve reasonable consistency and equity among governmental programs. For Federal action it recommended:

1. That the Congress establish a uniform policy of relocation payments and advisory assistance for persons and businesses displaced by direct Federal programs and by Federal grant-in-aid programs, and that the President direct that the necessary steps be taken to formulate uniform regulations for carrying out such a policy.

2. That the Congress require that State and local governments administering Federal grant-in-aid programs assure the availability of standard housing before proceeding with any property acquisition that displaces people. This requirement should be at least comparable to that in Federal urban renewal legislation, assuring that (a) there is a feasible method for temporary relocation of displaced families and individuals, and that (b) there are or are being provided standard housing units within their financial means and in areas reasonably accessible to their places of employment.

3. With respect to financing relocation payments under federally assisted programs, that the full costs of payments to any person for relocating a family, and the costs of payments up to $25,000 to any person relocating a business, be completely reimbursed by the Federal Government; and that the costs of business relocation payments in excess of that amount be shared on the basis of the costsharing formula governing the particular program.

4. That the Small Business Administration Act be broadened to authorize disaster loans to small business concerns (a) that suffer substantial economic injury as a result of a construction program conducted by State and local government, as well as one conducted by a Federal or federally aided program; or (b) that are adversely affected but not actually displaced by Government property takings.

5. That the Congress amend the Manpower Development and Training Act to permit widow and widower owners of displaced firms to be eligible for manpower retraining allowances.

6. That the executive branch (a) authorize and encourage all Federal agencies causing displacements in urban areas to centralize in a single local agency in each major urban jurisdiction, through formal or informal agreement, responsibility for administering relocation planning, payments, and services; and (b) require all displacing agencies to give advance notice at the earliest practicable time to local units of general government of any construction programs which will cause displacement.

Recommendations for State and local action

For State and local action, the Commission report recommended:

1. That each State establish a uniform policy within the State covering those displaced by State and local programs.

2. That State legislatures require the assurance of availability of standard housing in all State and local programs causing displacement.

3. That States share in financing local governments' relocation costs when States contribute part of project costs, and on the same basis as the grant formula for the aided program.

4. That State and local governments encourage centralization of administration of the relocation function in a single agency in each major urban jurisdiction. 5. That central cities contract to provide relocation services to suburbs and, when necessary, that smaller governments join together to provide such services. 6. That States and regional organizations require their agencies causing displacement to notify local government in advance of construction programs that will displace persons and businesses.

The Commission has drafted suggested State legislation implementing these recommendations which it will submit for consideration by the Committee of State Officials on Suggested State Legislation of the Council of State Governments and for eventual transmittal to the 50 State legislatures.

S. 1681, UNIFORM RELOCATION ACT OF 1965

S. 1681 would carry out the above Commission recommendations (a) that Congress establish a uniform policy of relocation payments and advisory assist-. ance for persons and businesses displayed by Federal direct and grant-in-aid programs (secs. 3, 4, and 8); (b) that Congress apply to all federally aided programs a requirement at least as strict as that in the urban renewal and public housing programs that State and local governments administering Federal grantin-aid programs assure the availability of standard housing before proceeding with any property acquisition that displaces people (sec. 8(a)(2) (D)); (c) that Federal Government fully reimburse State and local governments for relocation payments up to $25,000 in federally aided programs and on a formula cost-sharing basis above $25,000 (sec. 8(d)); and (d) that the executive branch encourage Federal agencies causing displacements in urban areas to centralize in each major urban jurisdiction responsibility for relocation administration (sec. 6(c)).

Although, as noted, the Commission recommended a uniform policy of relocation payments for Federal and federally aided programs, it took no position on the issue of the level of actual payments for expenses such as are involved in moving, finding a new dwelling, business location, farm, or reestablishing a business.

S. 1201, FAIR COMPENSATION ACT OF 1965

S. 1201 would also carry out the Commission's recommendations for Federal action with respect to (a) a uniform policy on relocation payments and assistance (secs. 107, 108, and 111), and (b) centralization of responsibility for relocation administration within major urban areas (sec. 110(c)). S. 1201 differs from S. 1681, however, in three major respects: assurance of availability of standard housing for those displaced, amounts of Federal reimbursement for relocation expenses in grant-in-aid programs, and provisions on Federal eminent domain procedures. We are submitting for the record three tables which set forth these differences in detail.

S. 1201 would not extend to all federally assisted programs the current requirement of the urban renewal and public housing programs for assurance by State or local displacing agencies using Federal aid funds that an adequate supply of standard housing exists or is in process of being provided. It would also depart from Commission recommendations in regard to Federal reimbursement to State and local governments for relocation payments on federally aided programs. It would provide 100 percent Federal reimbursement up to $10,000 per payment, Federal sharing on a project cost-sharing formula basis in the portion between $10,000 and $25,000, and sharing on the same basis above $25,000 except that in no case would the Federal share of an individual payment above $25,000 exceed 50 percent (sec. 111(d)).

The Commission found in its study that the most serious problem in relocating families and individuals is the housing of low income groups. Believing that provision for availability of standard housing for all persons displaced is an important national goal, the Commission felt strongly, therefore, that the assurance of housing for those displaced should be a requirement of all Federal aid programs. The major effect would be on the Federal aid highway program which, next to urban renewal, causes by far the most displacement nationwide. The Commission also believes that the effect of placing a $10,000 limit on full Federal reimbursement for business relocation expenses, as provided in S. 1201, would be to effectively exclude payments above $10,000 in many States. Certainly the failure of 28 States through December 1964 to implement the present permissive highway relocation provisions with the 90-10 or 50-50 sharing formulas gives support to this opinion. In addition, $25,000 is the current limit by administrative action for full Federal reimbursement of business moving expenses under the Federal urban renewal program. The staff of the House Select Subcommittee on Real Property Acquisition found, moreover, that only 3.6 percent of all urban renewal business relocation payments were above $10,000 (subcommittee staff report, p. 41). This suggests that full Federal reimbursement of individual payments up to $25,000, as provided in S. 1681, while very significant for the few business displacees entitled to it, would have a relatively small effect on the Federal budget.

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