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the requirement of qualifying examinations. It is clear in any event that open competitive examinations are not to be required but that the transferees shall be preferred for such new positions in the Housing Authority.

We believe this proposal to be ill-advised and unfair. Those appointed in the Housing Division of the Federal Emergency Administration of Public Works have not been required to qualify in any competitive civil-service test. While we have no serious objection to giving them credit in the examination for the experience they have gained, we believe it would be unfair not to permit other persons equally qualified and perhaps more competent to demonstrate their fitness for appointment.

The transfer of such employees without any qualifying examination would, of course, be indefensible. Yet the language of the bill is so vague that even that may be made possible.

We sincerely hope that you will see your way clear to amend this bill in order to obviate the potential threats to orderly, nonpartisan, efficient personnel policies which are contained, unfortunately, in section 4 (b), by eliminating the words "without regard to the civil-service laws and the Classification Act of 1923, as amended” in lines 17 and 18, page 7. This change would permit the President and the Civil Service Commission to use their discretion as to the method of selection of the employees of the Housing Authority, as its needs might dictate. Respectfully yours,

H. Eliot KAPLAN, Executive Secretary. The CHAIRMAN. The committee will stand adjourned subject to the call of the Chair.

(Whereupon, at 11:45 a. m., the committee adjourned, subject to call.) BRIEFS AND RESOLUTIONS

YONKERS, N. Y., April 10, 1936. COMMITTEE ON EDUCATION AND LABOR,

United States Senate, Washington, D. C. Because of serious need for slum clearance and low-cost housing in Yonkers, N. Y., I am prompted to urge that your honorable committee report favorably on thé Wagner housing bill, S. 4424, so that it may be enacted at this session.

Joseph F. LOEHR,

Mayor, city of Yonkers.

URBAN AND HOME REHABILITATION

a

By Judge Fred G. Stickel, Jr. For years a steady and continuous flow of population from city to suburb has been under way. The replacements have quite generally, if not always, been from classes whose income and living standards were lower than those whose homes and residences such classes took over. Sometimes one wave of population in a given section of a city has been in turn succeeded by another and on occasion still a third wave. Each succeeding replacement has come from a lower income class. All this has been known to most of us in a general academic sort of a way for years. It remained for the depression to bring it acutely home to our home-financing representatives.

Foreclosures and repossessions soon involved inspections of properties upon which our associations had originally granted mortgages. Such inspections in all too many instances revealed an almost unbelievable change in property and neighborhood over that which had existed when the loan was originally placed. The change in population was brought poignantly home as would not have been the case had the trend and tendency been known through frequent inspections of the loan throughout its life.

Today, however, we are face to face with the facts. They demonstrate that our larger cities contain few, if any, genuine residential communities such as we like to loan upon and perhaps have been accustomed to loan upon; or at least they demonstrate that the blighted and semiblighted areas have measurably increased and are increasing.

And while this decline in residential value and in neighborhoold standard has been under way, our home-financing agencies have not only not declined in proportion but on the contrary they have actually increased. Hence, though the market has lessened and declined, the agencies drawing upon or looking to such market have proportionately increased.

Moreover, the advent of the Federal Housing Administration accentuates or may accentuate the problem. With the high property and neighborhood standards, naturally designed to avoid loss, where is that agency likely to be able to insure loans in our larger cities? Certainly experience has shown few, if any, made in our larger cities and it has shown that the bulk of them have been upon new constructions and in our suburban areas. This is not strange for safety has been the governing factor in the operation of the Federal Housing Administration, and properly, and the social implications of that governmental instrumentality have not yet been fully appreciated, but I am sure will be.

And if the F. H. A. will not insure what justification exists for loans by lending agencies in such areas, and if they do loan and loss follows, may not the directorate of such agencies be faced with an inquiry by those they represent as to why they loaned in such areas with the warning before them arising out of the F. H. A. policy?

Mr. Harland Bartholomew, engineer for the city plan commission of St. Louis and a noted city planning expert, writing about St. Louis says:

"Population has been steadily leaving these older residential districts until today some areas contain only two-thirds of their former maximum population. Since industry and commerce have not expanded sufficiently to absorb all of these older residential areas, and since these areas have become less desirable as places of residence, there are large sections which appear to have no future either for residential purposes or for commercial or industry purposes.'

The State Housing Authority of New Jersey has prepared maps showing the blighted and semiblighted areas of our New Jersey cities and that which they show so graphically is startling indeed. In Newark, for instance, this map, based upon a careful real-estate inventory and other studies, shows good residential sections in parts of but 5 of our 16 wards and in some of such wards the good residential part constitutes only a very small section of the ward.

The problem presented by such blighted or near blighted areas appeals from various angles and to various interests. There are those to whom the fact that such areas are productive of crime inspires their attention and their demand that a corrective be found. To another group the health hazard created in and by such areas stands out as the reason something must be done. To still another group improvement in such districts is essential from the standpoint of better citizenship and government. To me, while sympathetic to all these viewpoints and appreciative of their vital importance, this problem and these districts arouse my interest as a taxpayer and as one interested in the mortage investment business.

“The cost in these districts”, says Mr. Bartholomew, "of providing city services ... is considerably greater than taxes collected. Tax delinquencies in these areas are much more numerous than elsewhere. Because these lighted districts are not self-supporting they have to be subsidized by those who pay taxes in the remainder of the city.” And the mortgage institutions of our State are larger owners of real estate than ever before. Their real estate repossessions total about 375 millions.

In the past the mortgage interests were smug and complacent. This population trend meant little or nothing to them, they thought. It was the concern of real-estate owners and perhaps of realtors. Today they are real estate owners and the problem is distinctly theirs. Moreover, their mortgage investments, unless a solvent of the problem is found, will increasingly be translated into real estate holdings.

The arrest of this residential decline is inseparably connected with slum clearance, but several reasons prevent that course from supplying a complete solution to the problem involved in such decline. In the first place the high cost of land acquisition and the extent of the territory involved would make it impossible, even in a country like ours, to secure sufficient public funds. Secondly, slum clearance as indulged in to date has quite naturally placed emphasis upon unemployment. This has made slum clearance even more costly than ordinarily and has as a consequence somewhat impaired its usefulness in the public mind. And finally probably because of the youth of this country and the opportunity it has afforded every man and woman to rise to such heights as their ambition and persistance might justify, the solution of social problems like slum clearance and social security cannot be approached in the same manner as in an old section of the world like Europe. Youth, whether individual cr collective, is ruthless and thoughtless. As a young country, therefore, our people are prone to look askance at coddling, at schemes savoring of the paternalistic, and at the use of taxpayers' money collected from one group to support another group. Unjustified though it may be, this sentiment exists. wie grasped American oj-portunities, why didn't they?" is still a mental attitude possessed by many who giving generously to aid their less fortunate brethren, resent what they consider to be the coddling of those same brethren as a matter of governmental policy. That sentiment will ultimately give way as the country grows older and the opportunities lessen, but it is still here today. It in part accounts for the adverse reaction so frequently made to pure slum clcarance.

Ślum cliarance, therefore, while inseparably connected with our problem, actuall; fills only a small niche in the solution of the problem, operating soundly as it can only in these sections so completely blighted as to be leyond the reach of private reclamation. But it should go hand in hand with a well-organized campaign by private interests reasonably aided by the projer governmental agencies. Such a solution savors of the Åmerican tradition built into the hearts of our people. They love to regard themselves as capable of coping with their own [roblems, even though this may be in part an illusion.

Nor, on the other hand, will the program suggested by the Committee for Economic Recovery, the construction of millions of new homes, desirable though it may be, meet the instant problem. Neither an extensive strict slum-clearance program on the one hand nor this program on the other would benefit the millions involved in our housing problem. Such persons are neither in the group that could buy the new houses the one program proposes and probably would not buy them if they could because suoh construction would likely be in the suburbs, too far away from their places of employment) nor are they largely in that lowertenth group, or whatever the percentage is, to which true slum clearance properly applies. Some other program must be evolved to reach these millions and to preserve the real estate and mortgage investments in the housing they must or desire to occupy or own.

It seemed to me that if this problem was to be solved, the mortgage institutions and the depositors, shareholders, and policyholders represented in such institutions must be aroused, not as a matter of sentiment or sympathy but solely as a matter of business and investment. To that end I wrote a memorandum addressed to the Board of Governors of the New Jersey Building and Loan League presenting the problem as I saw it and hesitantly suggesting as a possible remedy the setting up within our cities of redemption, recapture, or reclamation districts. Within these districts with the aid of Federal Housing Administration insurance, Works Progress Administration funds to furnish recreational facilities and city aid to supply zoning and environmental protections, organized real estate owners and mortgage holders would modernize and sanitize the existing housing, supplying living quarters designed and calculated to attract better tenants and to preserve existing investments against further decline or complete loss.

To procure reactions to the proposal and in an explorative effort to discover some agency that might perhaps sponsor the proposal or undertake an experiment in one or more of our cities, I submitted the proposal to representatives of the Federal Home Loan Bank, Home Owners Loan Corportaion, Federal Housing Administration, Works Progress Administration, and other governmental agencies, to a representative of the New Jersey State Housing Authority, Regional Plan Association, Inc., and to architectural, zoning, and engineering authorities.

All without exception were interested. Many offered to help. All desired to be kept advised of developments. All agreed as to the seriousness of the problem and the need of immediate attention. Some governmental agencies felt it was not within their province but the Federal Housing Administration offered to enter a conference with our State Housing Authority and with interested groups to determine just how it might aid, and expressed real interest, whik Jr. Fahey, Chairman of the Federal Home Loan Bank Board, who is always alert in the improvement and advance of housing conditions, recently requested an amplification of the memorandum in the light of such inquiry and study as had followed its submission to our league.

And curiously enough I found that the idea of recapture or reclamation dis. tricts was not at all new and that the remedies in the past suggested for the solution of the city housing problem had all revolved around the creation of such districts.

Mr. Arthur C. Holden, a prominent architect of New York, who appears to have been one, if not the pioneer in this field, says:

“Just a word of thanks and commendation to you on your paper. It seems to me you put the problem pretty clearly in your paper.

Mr. Herbert V. Nelson, secretary of the National Association of Real Estate Boards sent a copy of a suggested State statute authorizing the creation of neighborhood protective and improvement districts by property owners in cities, towns and villages, with an explanatory memorandum in which he gave due credit to Mr. Holden's neighborhood studies.

This proposal which would enable property owners to elect commissioners to properly lay out such districts and to control their development, etc., subject to the approval of municipal authorities, is most comprehensive, but may be somewhat more ambitious and advanced than is politically practical at this beginning stage. It probably, however, is an ultimate objective.

Mr. Harland Bartholomew 2 weeks after I presented my memorandum submitted an admirable study and report to his commission recommending the establishment of recapture or reclamation districts and his report contains a map outlining such proposed districts. The report is replete with findings and conclusions reminiscent of our own experience and conclusions in New Jersey. His report, of course, was prepared from an engineering standpoint, mine from a financial standpoint. Incidentally, when Mr. King Powell and I lunched with Mr. Bartholomew in Newark this month, he strongly approved the idea of seeking to arouse the mortgage interests to the seriousness of this city problem as it affected their investments. He told us that a prominent banker of New York City, an expert in mortgage finance, recently told him that he had thrice combed New York City looking for a place to make residential mortgage loans and in vain.

Mr. John J. Furia, an industrial engineer of New York City, collaborating with Prof. John J. Costa, has worked out a plan for reclaiming housing. The plan involves the use of areas composed of two and three blocks as units. His proposal, which papears in the November 1935 bulletin of the Taylor Society and of the Society of Industrial Engineers, develops in considerable detail the capital and operating costs involved and demonstrates the feasibility of recapturing our cities. His plan relies upon private capital, initiative and resource operating through Government regulated corporations and anyone interested in this problem should read his paper.

The New Jersey State Housing Authority has already made a real property inventory of most of our New Jersey cities and has accumulated a mass of statistics which could form the basis of any comprehensive program to reclaim our cities from the forces of blight and waste. According to somewhat large districts, it now has information as to the housing within such districts. It is soon to embark upon a program to secure the needed information, block by block, and I believe that that authority would be interested in furthering an experiment in recapture in a proper block. Drawings in its possession show a treatment of a block by the elimination of given houses in the block to give light and air, the modernization of the remaining houses and the creation of a central court or recreational center behind the houses. Mr. Alexander Randall of that authority is deeply interested in the problem and its suggested solution.

The mayor's committee on city planning of New York City, through Mr. Laurence M. Orton, its general director, expressed interest and invited me to examine their work. This I did. They have prepared a great number of maps from New York's real estate inventory and from the census records showing graphically the housing and population conditions of the city as a prelude to a basically sound rezoning operation. He made the point that recapture or reclamation districts should not be set up haphazard but only after careful study as all parts of a city are so interrelated that reclamation districts carelessly laid out might do genuine harm to other sections of a city.

Incidentally even those who were fully appreciative of the population trend did not visualize its ultimate deteriorating effect upon real estate values and mortgage investments. They felt that this population trend and consequent decline in residential values would be offset by the transfer of such residential sections to business and commercial sections with an increase in real estate values rather than a decrease in values. So strongly did they feel that way that during the zoning era, our cities were extensively zoned for commercial, business, and industrial uses and limitedly zoned as to residences. Events have shown, however, that the transfer of residence property to commercial and business uses

area.

was not in proportion to the population trend and that the zoning regulations in many instances were wrong.

This has served to accentuate the blight, for who would want to build & fine residence in an area zoned for commercial or industrial use.

The East Side Chamber of Commerce of New York City through its Secretary, Mr. Joseph Platzker, writes as follows:

"I read with much interest your very timely presentation before the New Jersey Building & Loan League on ‘Urban and home rehabilitation.' If I could in any way cooperate with the committee you have been asked to head, I will gladly do so.

"Under separate cover I am mailing you a copy of our December East Side Chamber News, which contains a summary of the financial property inventory of Lower East Side referred to in last Sunday's New York Times. I am also enclosing therein a copy of my East River Drive district report which I prepared as a guide for investors and business interests in that area.

“As a result of these studies, we now have in our office a perpetual propertyinventory and land-utilization inventory of each of the 8,062 buildings in this

All we have to do now to keep it up-to-date is to watch the foreclosure records, building reports on renovations or demolitions, and the tax payments. I am told that no other section in the city of New York has any such report. It will be our guide in the development of a modern district plan in cooperation with a special committee of the mayor's committee on city planning. This entire report, incidentally, is within the covers of a single book of 300 pages-loose leaf.”

This is surely an encouraging, visioned, and forward-looking program. It is keeping abreast of one's problems in a way that augurs well for the solution of our problem by private initiative and resource.

Since writing the foregoing, I have received from Mr. Platzker two articles by him which appeared, one in July and the other in December 1935, of the East Side Chamber News, relating to their housing problem and also a housing map of the district prepared for his Chamber of Commerce.

The map shows properties with buildings appraised in 1935 at $5,000 or less, exclusive of land appraisals; mortgages held by institutions, 1,034; mortgages foreclosed by institutions, 76; mortgages held by or for individuals, 971; number mortgages, 783; Home Owners Loan Corporation, 5. It also shows city properties and vacant land owned by others.

The July issue contains a land utilization map and a.proposed city plan for block consolidations, street widenings, etc.

Of the $38,000,000 and more taxable property in this district, from Pitt and Avenue C to the East River and from Grand to Fourteenth Street, over $2,000,000 is totally untenanted, 74 consisting of vacant lots, 88 of boarded-up buildings, and 27 of closed buildings. The land utilization statistics are interesting but time and space permit of a reference to but three items. Tenements (old and new law) not modernized, 1,000; tenements (old and new law) modernized, 31; dwellings (one- and two-family) 88.

Of the 1,611 taxable properties in this district, 493 are unmortgaged, 500 privately mortgaged, 6 Home Owners Loan Corporation, 501 institutional mortgages, 111 foreclosed by institutions.

Then follows this significant comment from one on the ground who is obviously a realist:

“Such division of mortgage interest should help explain at least in part some of the oft-asked questions why this district failed in rehabilitation in the past decade. It should also point out the vital need of considerable holding consolidations before any noticeable district change will become evident. If the ownership rtmains practically unchanged in the next 3 years, the district is bound to be become even a worse slum than it is stamped today. Absentee owners, estates, charitable, and philanthropic organizations as well as allied groups with equity or mortgage interests are invited to view their investments with an eye to the immediate future. Some of those that have customarily taken good care of their property are finding it increasingly difficult to buck the 'laissez faire' attitude of adjoining owners.

That the writer is a realist is further illustrated by his comment as to the effect on the district or perhaps the noneffect of two low-cost housing units, the Lavanburg homes, and the Amalgamated cooperative houses built 8 and 4 years ago respectively. He says:

“In the so-called sphere of influence of the Amalgamated and Lavanburg model houses, namely, the area from Grand to Houston and from Pitt Street to the East River, there is today $1,052,200 of totally untenanted taxable property. It consists of 12 closed buildings, 52 boarded-up or abandoned buildings, and 54

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