Box 22, Folder 19, Complete Folder

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Box 22, Folder 19, Complete Folder

Text Item Type Metadata


Copy f or Mayor Allen
7 G AO 5300
10 12-206
Ivan Allen Jr .
Atl.anta,. Georgi a
on . D. C.
TO (DA"rE )
er 2
ovember 28 1
O utstanding
Amount co be applied
Balance to remain
TO -
APPROVED ( Supervisory an_d other approvals when required)
C ts

---- ------------------- -- ---------- --------+-------+------------ ------ ----- -- --- ---- ------------- ------ -+-------+-NEXT PREVIO US VO UCHER PAID UNDER SAME TRAVEL AUTHORITY
Total verified correct for charge co appropriacion (s)
Applied to trave l advance (appropriation symbol )
ACCOUNTING CLASSIFICATION ( Appropriation symbol must be shown; other classification optional)
• Abbreviations for Pullman accom modations: MR, master room; D R, drawinl( room ; CP, compartment; BR, bedroom ; DSR, duplex single room ; RM, roomette;
ORM, duplex roomette ; SOS, sing le occupancy section ; LB, lower berth; UB, upper berrh ; LB-UB, lower and upper berth ; S1 seat.
PREVIOUS TEMPORAR¥ DUTY (Comp lete these blocks only if in tra vel status immediately prior to period co vered by this voucher and if administratively required )
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grou.9 fro:n tile b~i.n,~tt~ ei."!d fir:,2~~! 0-l c .... ::-;-:.::'iit.y v:~ich \K,u. h'i C";-:.:vl o'3
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5. The .M visibilit;'[_of Establis ing a "Comsat". TYP,e CoI7?orat.ion for
Urban Rchab:!.l it,ation .
r Senator
Jav1ts expreGSed t;he hOl e that, the adoinistra.tion .C>inelly
~ had realized the vsJ.ue of Jchc "Comsat II approach to housinG problems .
Mr . Rocltefell er co!i'.U:lented t hat t c success of t· .e or i 3inol " Comsc.t 11
undertaking is no guarantee t hat a nimilar uould nee sGa.rily
succeed in t he housing field . .i:!.e streosed 'chat participation by
p1·iva.te business in urban rchebili·Gati on 'ff..i.11 'be as~m-ed only if a
prof it can be realized .
6. The Action of FlJ.:,~A. in .faking
A.reilable $250 l{i.llion in Specit£_
Assi s t ance FQnds .
Senator Ribicoff SU§~ested t ~at in view of the tightness of t he money
market the total umount of special assistance :funds authorized by
Congress should have been rel eas d .
Mr. Rockefeller stated that the administration policy on special
assistance funds was reasonable.


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�Knowledgable Persons in Neighborhood Centers Field
Dr. Fred Duhl (Dro Duhl 1 s brother)
Mass. General Hospital
Boston, Mass.
Marvin Labes
Mayor's Committee for Total Action
Against Poverty
Detroit, Michigan
/ Sanford K~rvitz
Brand'?is University
Mr o - - - - - = c , . - - - ~ Lall
Director, Poverty Program
New Orleans, I,ao
Richard Strickhartz
Detroit, Michigan
David Hunter
Stern Family Fund
Robert Choate
Public Affairs Foundation
Washington, D. Co
Henrik Blum 1~·1 , 0 ·
Contra~Costa County Health Depto
Martinez, California
Mel Roman
Albert Einstein College
Bronxj New York
Dinii t ri Ia trides f.G'i'!~ffik ~_;
Hyland Lewis
Howard Univers ity
Howard .Nemorovski
l IL,...,
San Francisco, California

r ,
Boston College (Avail able in Uanuary)
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. Antonia Chayes
Boston 1 Masso
Mortimer Brown
Chicago, Illinois
Norman Lourie
Pao Depto of Public Welfare
Richard Poston
N. C. Dept. of Welfare
Lee Rainwat er
Was hi ngton Uni versit y
Sto Louis; Missouri
?~orth Carolina Fund
Her rw.n Gallegos (Mex ic an )
National Commi t tee on Civil Rights
Francis McKinl ey (I ndi an)
Ari zona State Unive rsity
Dr. Geor ge Es se r, Director
Barney 0_ Cayote
Rev. Arthur Braz i er (Negro )
Pres . Woodlawn Org z.
Chicagoi Illinois
U.S. Dept o of Interior
Salt Lake City.., Ut ah
Preston Wi l cox (Ne gro )
Columbi a Uni vo School of Soci al Work
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ML ~
llJ~ ~#_,Mb
John ~!artin (Negr o)
OEO San Franc i sco Regional Off i ce
Archaic landlord-tenant law and practices, once appropriate to an
agricultural society, must be reformed and modernized to meet the
need of industrialized urban America.
Ancient legal doctrine, construing a lease as a conveyance of an
interest in land rather than an agreement, leads to the holding that
the obligation of the tenant to pay rent is independent of the duty
of the landlord to repair and maintain the premises. The sole remedies thus available to the tenant to secure his rights are limited
to his vacating the premises a nd then claiming termination of the
lease or himself repairing the premises, financing the cost and thereafter cla iming a set-off against future rents.
Such limitations, while onerous to all tenants, are intolerable in
their application to poor people. Their choice of accommodations
within their means is minimal; they can neither finance repairs nor,
often, even gain access to the parts of the premises requiring repair.
\Vhile states and local governments, in proper concern for the lives,
hea lth and safety of all citizens, prescribe mi nimum standa rds for
housing accommodations, out-dated legal practices thwart the poor in
direct assertion of their rights.
Reforma tion of l a ndlord-tenant law is a state and local g overnment
responsibility burdened with . consequence to the National welfa re.
While appropriate solutions may vary between jurisdictions, certain
broad principles must apply throughout:
St a te a n~ J oca l enforc ement of building, health a nd safety codes
must be stpe~ml ipeg ~nd imprQY?d. Admini§trgtive flexibili ty ~nd
f~@t fin ding muet be fo@tered and the ~ower af local courts
streng thened. The obligation of code compliance must be a prior
cha r g e on the property itself and a ll rights the~ein, rather than
merely a persona l obligation of the ownero
Complianc e with law mu st be a basi c part of every agreement and
every righto Obligat i ons of landl or d an d tenant alike, as provided in buil ding , h ealth and safety codes , must b e construed as
cr ea ting indepen dent righ ts enforcea bl e by dir e c t l ega l acti on.
Determination of such i ssues in the cour t r oom must b e facilitate d .
Public funds mu st not reward illegal -conduc t . Appropriate rent
withholding pr o.cedures must be devel oped for the welfar e tenant.
Appropria te acti ons must be taken in all public acquisitions to
the end that pric e s paid disregard valu es achieved from income
�derived in property operation contrary to minimum. building, health .
and safety codes.

* * * * * * * * * * * *

While these responsibilities are local, the Federal Government can and
has assisted:
The establishment of neighborhood legal centers in slum.s by
the Director of the Office of Economic Opportunity, who are
making a major effort to help tenants secure their rights to
safe and sanitary housing.
The convening of a Conference by the Attorney General to develop new procedures to insure that the rights of tenants are
fully and effectively enforced.
The appointment of a Commission to make a comprehensive review
of codes, zoning, taxation and development standards.
Programs and activities of the Federal Government, while indirect in
tha t enforcement of fire prevention, housing , building , hea lth and
sanitation law is a responsibility of local government, can be of decisive importance:
Section lOl(a) of Public Law 171 qualifies Federal assista nce
upon the appropriate local public bodies underta king "p ositive
programs" and "a workable program" for community improvement
through the
"adoption, modernization , administration and enfor cemen t
of housing, zoning, building an d other loca l laws, codes
a nd r egula tions r ela ting to - l an d use a nd a dequat e sta ndar~s of health, s a nit a tion a nd safety f or b~il ding s , inGl1H'iin6 t}rn lUH; ~ng, CHHHlPEl.IlQY gf dwel:U,n~§ e ,,
Administrative regulations heretofor e issued by the Secretary
of Housing ari d Urban Development should be further cla r ifi ed to
dire ct s pec i fic enum.erat i on and a tt ention to t he applic a ti on
and enf or cement of loca l co de s a n d or dina nc es rel ated to life,
hea l t h an d safety t hrough out the l oc a l i t y a nd t o demon s trat e
increas ed eff or t and progress -i n s uch enforcemen t. Such enf or c ement of minimum. co des shal l b e re quired as protect i on of
l i ves an d heal th of occupants , i rresp ective of whether a basi ca lly s ound and sta ble area is t hereby crea t e d o
The Se cretary of Housing and Ur ba n Devel opment can furt her impl ement t he purp os es of the l egi s l a ti on t hrough t he dev el opment
of nati onal uniform s t a t ist i cal repor t ing, whereby yardsticks
of comparabl e municipa l performance may be e stablished.
The Secre tary of Housing a nd Urban Development can tighten
ex isting regula tions to t h e end tha t mortga g e insuran c e a va ila b le through the Federa l Housing Administration for prop erty
acquisition, rehabilitation and improvement must be conditioned up on code complia nce. At t h e s ame time, mortgag e in s urance
a nd g rants under Section 312 ca n be promoted and exp edited .
Special personnel can be . designa ted in each insuring office of
the Federal Housing Administra tion with the specific assignment
of coordinating the insuring a ctivities of that ag ency with
city building departments and community organizations to the
end that provision of proper financing for complete rehabilit a tion to meet code standards be greatly expedited.
The Secretary of Health, Education and Welfare can, by admin istrative regulation, require that each local authority pa rticipa ting
in a dministration and disbursement of relief funds establish , in
collabora tion with a ppropriate local authorities, systems of housing inspection and certification to the end that appropriate withholding of rents 1 where justified , be undertaken.
All DBpartments of Government concerned with property acqui s ition,
wherever Fe deral investment is involved , can require tha t t h e acquiring public authority demonstrate and certify that no par t of
the a ward granted or payment made represents values achieve d by
. operation contrary to local codes - of building , health and safety.
All Depa rtments of Government dealing with the a udit a n d ver ifica tion of real estate and mortg age loa n a ssets ca n require ·cer tification t h at as to the property conc erned no complaints are present ly pending by any local authority charging violation of local minimum codes of building, health and safety.
At this t ime property owners in deter ior ated or declining city areas
a ssume tha t the muniqipality either cann ot or wi ll not enf or ce it§
'b-u.ilding, tHH.teing, h lth and EH:U11tat on ...... an assum:Ption be.s~d
on experience a nd occ a siona lly support e d by Federal s t atement:
" Chara c t erist i c of a typi ca l s lum ar ea is t he over c rowding
of h ous ing uni t s well b ey ond the level s permi tte d by lo cal
cod es. Any ef fort to enf orce th e occupan cy s tan da r ds of
the co de would h ave as it s immed i ate con s equenc e a massive
displa cemen t of t h e famil i es occupy i ng the overcr owded units.
Thi s might b e a cceptable i f it wer e c oupled wi th a concurrent
pr ogram t o make a va i labl e t o suc h famil ie s de c ent housing at
prices t hey can a ff ord. Unf ortuna t ely, t he latter tends to
be far sl ower an d mor e co stly than the carrying out of c ode
enforcement . In many cases local cour t s have recognized
this consequenc e and, as a matter of public policy, have
refused to p ermit enforc ement action. ·
- 3...

�"By its very nature, a program of code enforcement re quire s
property owners to make substantial investments in repairs
and improvements in order to avoid prosecution. Unless
that investment is coupled to an increase in rental r e turns
or property values, the owner is likely never to be able to
recover the cost. But since we are still dealing with a
seriously blighted area, neither the increase in rentals or
property values is likely to occur. The present tenants
usually cannot afford higher rentals, particularly if occupancy is reduced and there are f ewer wage earners to pay
the rent. Tenants with higher incomes usually cannot be
persuaded to move into a still blighted area. The value of
the property in a priva te sale cannot be expected to increase
unless the ~entals increase nor would the repairs or improvements add significantly to the property value in the event
of a future public condemna tion.
It has been argued that rig id code enforcement in deteriorated areas will so depress property values that new pu.rcha sers will be able to afford to make the necessary repa irs
without increasing rents. In fact, this does not happen on
any broad scaleo While our understanding of the factors
whi ch motivate owners of slura property is very limited, a
recent study does c ast some light on this. The larg e
'sophisticated' owners of slum property usually have so
little of their own money invested that any f easible reduction in cost of purchasing could not equal the cost of needed repairs. On the other hand, the small 'unsophistica ted'
investor is usua lly incapable of taking advantage of any
s uch economic effects.
i'In sum, it is our belief that concentrated code enforcement
by itself in badly blighted areas would result in more turmoil than improvement of housing conditions. But to s ay that
this one appr oa ch will not work is not a satisfac tory a nswer
to a very real and pressing problem. Althoug h we have not
yet arrive d at anything we regard as a n adequate sol ut i on,
it would be extremely v a lua bl e to pres ent some of t h e problems and p ossibl e approaches in order to get broader con siderati on." (Staff Report, Housing and Urban Devel opment,
forwarded by the Secretary to Senator John Sparkman, Chairman, Subcommittee on Housing, Senate Committee on Ba nk ing
and Cu~rency, 7/26/66)
a ssumpt ion b e comes a self- fulfilling prophecy:
Property owners r e duce ex penditures for property maintenanc e a nd
repa i r wherever possible.
Tenant and commun i ty morale collapse .
Construc tive community lea d e r s hip is deni e d c re dibility.
- 4- .
I .
�If it be assumed that power of stat e and local g overnment to regulate
housing condition in order to preserve life, health and safety i s a
prior charg e on all interests in prope~ty, then the equation as t o the
feasibility of property repair to minimum standard is simply whether
the gross rent roll will cover current operating expense, current taxes,
and principal and interest payments to cover the cost of repair. Antecedent mortgage commitments, as well as the equity investment, are irrelevant to the issueo Were mortgagees and property owners , con trary
to existing assumptions, convinced of this contingency, their conduct
concerning property repair and maintenan ce would be altered signif icantly. In these circumstances, it would not be necessary that public action be asserted against each property in a given neighborhood in order
to reverse the prior assumptions.
A formidable case exists, therefore, for selection of a few neighborhoods in which, after complete inventory of structure condition, ownership, mortgage debt , and prior history of code enforcement , an experimental progr~m be undertaken by the appropriate local public authority,
working in collaboration with the local community, in which a number of
the possible Federal sanctions here enumerated were employed. The effort is attractive in:
Presenting a new attack upon the syndrome of community decline
and collapsea
Offering promise of reduced public expenditures by imposing
costs upon non-conforming properties.
Generating increased voluntary compliance with minimum codes
-and standards.
�- - -- - - - - - - --·--·.. .
T e desire to own a home is a basic part of our tradition. Today 62% of American families hav
· achieved that desire. Yet there are still millions of families who would like to own their own
homes, but cannot. They are too poor to do so under present financing arrangements. At least
half a million such households now rent substandard housing in our metropolitan areas. A chance
to own a decent home of their own might have a profound effect upon their attitudes toward
society. Instead of feeling like frustrated and helpless transients floating along in the poverty
and fil th of the slums, they could begin developing a sense of control over their own destiny.
They could gradually build a stake in their communities, and would learn how to use and benefit
from legal and political institutions they now regard with hostility.
Furthermore, provid ing these low-income househo lds with home-ownership assis tance would merely
be giving them the same advantage we already ext end to millions of middle-income and upperincome households. These households now receive a large subsidy in the form of federal income
tax deductions for the interest and property taxes paid on their homes. This subsidy amounts to at
least $1.7 billion per year for just the wealthiest 20% o f our families. This is doub le the housing
subsidy we extend to the poorest 20% in the form of all public housing payments, we lfare paymen ts,
and tax deduc t ions combined. Clearly, tax deduc t ions aren't much help to families with little or
no taxable income. So simp le justi ce demands tha t we encou rage home ownership fo r them in some
o the r way mo re su ited to thei r needs .
Therefore, we recommend enactmen t o f a pi lo t program o f aid to low- income fam il ies to he lp them
ach ieve home owne rsh ip . This prog ram shoul d concen t ra t e upon slum dwellers because they now
ha ve th e least o ppo rt un ity to own dece nt homes, a nd because it would he lp im prove slum li v ing
condit ions. in g enera l. Th e prog ra m shou ld ass ist slum residen ts ei ther to move out o f slums by
buy ing hom es e lsewhe re, o r to acq uire owne rship o f new ly reh a bi lita t ed units in neighbo rhoods
whi c h a re be ing up- graded throug h a wi de va riety o f ot her prog rams too - - as in the Mode l
Cities Prog ram . Th is ho me - own e rsh ip p ro gra mwou ldhe lp low -in come fa mil ies b uy sing le fa mi ly
ho uses, indiv idua l uni ts in mul ti-fam i ly con dom in i ums; o r apa rt men t buil dings wh ich t hey
o perated a s resident lan dl o rds -- rep lacing absen t ee lan dl o rds w ho had neg lec ted t heir
ro perti es .
~ Several ty pes o f a id wou ld be invo lv e d in th is prog ram . First, the slum housi ng un its involved
would be substandard ones reha bilita ted by a publi c agen cy o r a non - profit gro up be fore being
sold·to nf:N.I owners. Second , below-mark et-rate loans shou ld be use d to fi na nce owners on a
no-downpayment basis. Third, potential ow ners should recei ve advanced training in the skills
of minor mai ntenance, fi na ncing, and other respon sibilities of ownership. Fourth, new owners
from the lowest-income groups would need a monthly housing supplement similar to the ·rent
supplement, but applicable to ownership payments. Fifth, some tenants in resident-landlord
buildings would receive rent supplements. Sixth, owners should receive follow-on counseling
about financing and repairs. Seventh, the public agency running the program would agree to
buy back the housing involved during a fixed period in case the owners could not carry the
required burdens.
�A Pilot Program to .Promote Home Ownership Among Slum Residents
Page 2
A pilot program incorporating these devices could be undertaken for 10,000 units at on annual
cost of about $5.1 million for rent and ownership subsidies, plus a reservation of $125 million in
below-market-rate (3%) loan funds, plus admin istrotive costs. These figures assume that ownership opportunities would be extended to even the lowest-income families.
This program would improve the life of slum residents in several ways besides allowing them to
become home-owners. Many would take much better care of their properties and develop a
stronger interest in good neighborhoods. Even landlord-tenant relations might improve because
resident landlords would replace absentees. Hence conditions in slums might be significantly
improved even for people not involved in the program.
In our opinion, this is a prosram solidly in the American tradition, and well worth trying.
The Task Force is convinced that the encouragement of homeownership by those now living in slum areas would have great value.
is an idea solidly in the Americ0ll tradition, and well worth trying as a
pilot program.
Offering slum dwellers a chance to own a decent home of their
own might have a profound effect upon their attitudes toward society.
stead of feeling like frustrated and helpless transients floating along
in the poverty and filth of the slums, they could begin developing a stake
in their community and a chance for control over their own destiny.
It should be stressed, however, that if the program is to actually
reach the poor, substantial subsidies will be required.
Based on an ex-
perience in Pittsburgh, the acquisitio~ and rehabilitation of a dwelling
cost $10,400 which required for all charges a monthly peyment of $lo6
an income of $5,000 -- even with 40 year, 3 percent financing .
The justification for housing subsidies for the poor is more
t han mor ally compelling .

The federal government subsidi zes middle - income
home owners by $2 . 9 billion a year through tax deductions .
It subsidizes
the poo:r by only $820 milli on through public hous i ng, public assistance , and
t ax deductions.
Recommendations :
The Task For ce ther efor e r ecommends ~ t hat the f ollowing
criteria should apply:
The pilot program should seek to provide opportunities for
all forms of ownership among sl~ dwellers:
single family ownership,
cooperative or condominimn ownership, or ownership by resident landlords
of multi-family dwellings·.
Subsidies in the form of low interest loans, rent sup-
plements, or "ownership supplements" should be provided to reach lowincome levels.
3. The program should provide opportunity for ownership
outside the slum, as well as in it.
The program should be based on rehabilitation of the unit·
to standard condition, and prior to assumption of ownership by the slum
The program should be undertaken only where major efforts
are underway to upgrade the surrounding neighborhood.
Organizational capacity should be provided to acquire and
r ehabilitate the property, prepare persons for ownershf p responsibility,
and provide continuing financial and other counseling.
The program should provide agreement to buy back the
house during a limited period in case owners cannot manage the newly
assumed burdens.

/ I
, 1.
In its proposal for the establishment of an Urban Development Corpor-
ation* HUD asserts, "The greatest domestic challenge that faces America
today is the need to rehabilitate and rebuild the nation's slum neighborhoods and the 5,000,000 substandard and deteriorating dwellings· in
which 20 million Americans live.
The problem exists in large and small
cities throughout the entire country. u,
The Proposal points out that .
neither government nor industry can do this alone, and proposes a
nationally based, private, non-profit institution--UDC--which has access
to substantial amounts of FHA insured mortgage credit, and the ability
to offer major inducements to cities, industry, labor, and residents of
It proposes that UDC be directed
at rehabilitation,
i"i ··
with the objective of rehabilitating 500,000 -slum dwellin.g units withi n "the
next decade.
dwelling units
The propos~d short term goal i s rehabilitating 30,000
. i
a •
, t he first two years of it s a per-
For these f irst two years it is as~erted the UDC will r equire a
reservation o f $200 million in 221 (d) (3) be l ow market interes t rate (BMIR)
mortgage credit funds, $200 mil lion in FNMA spec i a l ass i stance funds f or
r ent supplement dwellings, and $9 million in r ent supp lement funds.
addition, $12 million in working capital will be requir.e d for the first
two years of operat i on which i s to be suppl i ed by foundation

and corporate grants and l oans, and HUD demonstration funds.

"·A Proposal for a Nationally Based Private Non-Profit Urban Development

Corporation to ,Rehabilitate and Replace Substandard Urban Slum Dwellings,"
HUD, Nov. 1966
. 2.
The kernel of the UDC concept is that _the large and orderly market
it provides will produce an efficient,aggressive and technologically
advanced rehabilitation industry.
This new industry will serve the
total rehabilitation market, private as .well as public.
There appear to be :fbur key questions concerning feasibility of this
Scale of operations required
The technological feasibility of massive rehabilitation of many types
of slum dwellings has been demonstrated.
the 114th Street program in Harlem.
The most striking example is
There the buildings were largely
gutted, and attractive, healthy, modern apartments · created, one f or each
of the far below ~standard units that were scrapped .
HUD estimates that
the re are more than 5 million units in the nation's s l ums that are
structurally s ound and susceptible to such rehabilitat i on.
That many slum neighborhoods have potential to r espond to the impact
of rehab ilitation i s a lso strikingly demonstrated by the 114th Street
The pride shown by the residents of the r ehabilitated units,
the low l eve l of vandalism during construction, and the enthus iasm of the
ne i ghborhood for the project illus trate this.
HUD estimates that
5 million units suitable f or rehabilitation are located in slum neigh~
borhoods with the potential to respond to the improvements offered.
The minimum effective scale is largely a matter of judgement.
Experts consulted seem to agree that the scale proposed (30,000 units
in the first two years, 50,000 units/thereafter) is sufficient to
provide the leverage needed with labor, contractors, the materials
industry, and city administrations to achieve the innovations desired
and to visibly affect the quality of life in the nation's slums.
commitment to only the first 30,000 units may be sufficient but on this
opinions differ .
HUD has been in contact with industry, labor and city representatives and reports that in every case those interviewed were persuaded
of the merits of the UDC idea.
Organized labor's reaction was favorable
to the suggestion of a national contract with UDC containing work rules
providing for .
appropriate to eff icient rehabilitation and/crews which i nclude labor
from the slum neighborhoods .
Builders and developers were pleased with
the signif icant r ole the private. sector could play.
Manufacturer s
expressed i nterest in undertaking research and development of products
f or a new r ehabilitation market.
Co s t s
In t he UDC p r oposal the average tota l ·cost pe r dwel ling units is
estimated t o be $13, 000 .
Th i s is a conserva t i ve estimate bas ed on the
very limited experience to date.
There is reason t o ·b elieve that UDC
activity will bring the unit cos t s down due to economies of scale ,
improved contractor management) increased labor productivity) and to
technological innovations induced by the new rehabilitation industry.
That there will be cost reduction is highly likelyJ and that this reduction will spur private rehabilitation seems probable) but there is no
basis for quantitatively estimating the degree of reduction possible
and, in all likelihood) will not be until after a -few years of UDC
It is possible that costs could go as low as $9J000 per unit.
The UDC proposal suggests that the initial 30J000 units be financed
half with BMIR (Below Market Interest Rate) mortgage credit and half with
FNMA special assistance funds for rent supplement dwellings.
The annual
rent supplement funds that would be required depends ) of course J on the
average ability to pay.
If the BMIR funded 15)000 units were all rented
to families with annual incomes over $4J000J the annual rent supplement
required for the remaining lSJ000 units would be between $12.2 million
and $19.6 million) depending upon the t enants' incomes.
The mortgage credit and rent supplement funds required for the first
five year s of ope r ation are shown in Table l J based on the estimat ed cos t
of $13 J 000/uni t.
The ave r age annual te nant income can be expected t o be
be tween $2, 000 (whi ch was the 1965 nat iona l average income o f t he 2. 5 million s lum fami l ies with i ncomes be l ow $4, 000/year) and $4 , 000 whic h i s typic al
of income s in Harl em.
The commitment to future r e nt suppl ement payme nts depend s , of course,
on the degree to which c os t s a re re duced by the new r e hab ilitation
indus try and upon the change s in family income.
Tabl e 2 illustrates
It can be seen that unless costs are reduced to below $9,000/unit
Funding Requirements
(For Unit Cost= $13,000)
y E AR
Units Constructed
During Year
Units Completed
Average Units Cornpleted During Year
Annual BMIR Mortgage
Credit ($, millions )1(
Annual FNMA Mortgage
- 167
Annual Rent Supplement Funds($,rnillions)**
(Tenant Income=
Annual Rent Supplernent Funds($,millions)**
(Tenant Income=
· $2,000)
1. 6
11. 5

Based on half the units being financed with BMIR 3%-40 year

- mortgages, the other half with 6%-40 year mortgages .

Based on rent supplements applicable to the one-half qf

the units that are financed at 6%-40 years.
Annual Rent Supplement in$ Millions,
After Five Years
(90,000 Units, 6% 40 Year Mortgages)
Average Unit Cost
Average Tenant
Annual Income
$4, 000
or average incomes rise to over $4,000/yea; rent supplements will be
required indefinitely.
Additional Benefits
Cost Reduction for Private Rehabilitation
The total market for rehabilitation is far greater than the
500,000 units proposed for UDC action during the next decade.
Even if
half of the 5 million units presently suitable for rehabilitation are
torn down, the private sector market for rehabilitation is 4 times
larger than that proposed for UDC over the next decade.
Cost reductions
stimulated by UDC will therefore pay a large dividend in terms of reduced
economic rent for slum families .
This ' tan be considered - to· mu1tiply tp :
by 5 the savings which are reflected in the rehabilitation directly
sponsored by UDC .
Slum Employment
Rehabilitation is, and probably will remain, a labor-intensive
Approximately one-half man year of on-site labor is required
per rehabilitated unit .
If half of this were to be provided by local
labor, r ehabi l itation at t he ~ate of 50, 000 units per y ear will directly
employ some 12, 000 slum dwelle r s .
Since , presumably, the same people
wou ld partic.ipate in t he private rehabilitation market , t he number of
slum dwellers employed in the new r ehab i litation indus try might be
Application of New Tec hnology to New Const r uct i on
The degree t o which technological innovation stimulated by
rehabilitation will be effect ive in r educing the cost of new const ruction
is uncertain.
What is clear is that new products will be used when they
become available market items, t):J.ereby. improving the quality if not the
cost of new construction.
Interaction With Other Programs
UDC-sponsored rehabilitation activities can strongly reenforce
other programs.
Among these are the Demonstration Cities, home ownership
for slum dwellers, and neighborhood Service Centers.
Additional Problems
Mortgage Terms and Economic Life
~he use of 40 year mortgages (and consequently an implied remaining
economic life of 55 years) has been assumed by HUD.
However, it is by no
means clear that rehabilitation can provide either physical or economic
lifetimes approaching this in a substantial fraction (perhaps most) of the
neighborhoods under consideration.
Reduction of the mortgage terms to
20 years would require an increased annual rent supplement of $330/unit.
Property Acquisition
Limited experience suggests that it is possible to assemble
properties for rehabilitation, u&ing only the threat of rigid code enforcement to keep prices from rising.
Alternately, or in conjunction,
condemnation proceedings can be used in Urb~n Renewal Areas.
Rehabilitation vs. New Housing
While rehabilitation has well known social advantages over slum
clearances f ollowed by new construction, it offers far less opportunity
for cost reduction through technological innovations and raises the
thorny problem of the wisdom of investing heavily in obsolescent
An intriguing proposal for neighborhood redevelopment using
a mix of rehabilitation and new housing was developed in a working
session on UDC*.
UDC's concern with rehabilitation to the exclusion~£
new housing could become a block to the kind of federal effort needed
to obtain cost reduction through major innbvation<>in construction,
technology and project management.
It has been suggested that the reason the Proposal selected rehabilitation rather than a mixed rehabilitation/new housing objective for
the UDC was the concern that labor in particular (and perhaps the
construction and materials industries as well) would strongly oppose the
UDC unless it clearly restricted its activities to rehabilitation.
is a matter of judgment and could very well be correct.
It must be
noted , howev er, that acceptance of UDC might be forthcoming if these
groups realize that new construction based on improved and economizing
technology is inevitable and UDC can provide a sympathetic client with
which they could cooperate to gradually modernize traditional practices.
This is a subject that future staff work might illumine.
Effect on Equity Holders
If the costs of rehabilitation remain high , the federal govern-
ment , UDC and the cities involved will be p~edisposed to use all means
a t t hei r dis posa l to dr i v e down t he costs fo r acquir i ng t he propertie s
f o r rehabi lit at i on.
majo r to o l f o r th is .
Ri gid c ode enfo r cement has been suggested as t he
I t i s no t clear that a self - avowed polic y of
l i qui dating the equity ho lde r s by code e nfo r cement won't deve l op a fa tal
backla s h .

Int e rim Report :

Study of the Fea s ibility of an Ur ban Development
The proposed relationships of UDC with the local government,
various national groups, and the neighborhood (including the question of
continuing responsibility for maintenance and upkeep of the rehabilitated
buildings) are largely undefined.
While very many details of UDC remain to be worked out, it appears
highly likely that the major objectives will be met if a strong Presidential
commitment is given.
This is the only practical mechanism that has been found for
visibly improving the quality of slum housing within the next few years.
The minimum effective scale of the UDC is one which can stimulate
a new industry in the U.S.--the rehabilitation industry .
this industry will probably not develop.
Without the UDC
The proposed level of UDC effort
appears to be the minimum needed if it is t o b e successful.
The costs--in terms of below market interest rate mortgage credit
and rent supplements amount to a subsidy of a substantial fraction of
the total rent.
The rent supplements involve a firm long term commitment,
which is uncertain.
.,·,i ,
t; ·" j ' .
'.;;,';.; i
November 2, 1966
Paul Ylvisaker
Stuart Chapin
This is to set down a few ideas for the TF agenda. Some of them spell
out further the ideas I listed at the end of our meeting in Washington on
October 28. The first proposal could be considered in the short-range
category, whereas the other two fall mainly in the longer range category.
They are in rough form and need "debugging," and I leave it to you to judge
whether any of them have utility for the December 1 assignment.
1. A Program for Easing the Situation of Trapped Minority Groups. Let
me first state what is quite obvious to most members of the TF, simply to
underscore the urgency of finding solutions. Two statistics about Washington,
D. C., dramatize the gravity of the situation and provide clear testimony of
the necessity of action -- (1) the fact that approximately 65 percent of the
population of the District are nonwhite, and (2) the fact that approximately
95 percent of the school children are nonwhite. Only Federal employment
opportunities and constant work by concerned community service groups appear
to be keeping this tinderbox from bursting into flame. Though the figures
for other central cities have probably not yet reached these dramatic proportions, the indications are that similar buildups are in process in most
large central cities.
Reports from studies of these areas are clear enough that those trapped
see no relief in sight and that problems involving education, employment,
housing, health and opportunities for upward mobility have reached a critical
mass. As brought out in our session on October 28, a total program is urgently
needed to bring this segment of the population into the Great Society. Asstnning that very strong recommendations in this respect are presented to the
President and become operative, I would urge inclusion in the total Administration package a new HUD program -- call it a "Program for Humanizing Metropolitan Areas'r or a "Program for Urban Development, 11 or some other positivesounding substitute title for "urban renewal. 11 Two features would distinguish
it from earlier emphases: first, it would set up renewal and housing
programs on a metropolitan-wide basis as the new Tttle II type of emphasis
in the Demonstration Cities and Metropolitan Development Act has achieved for
other federal grant and loan programs, and second, it .would expand on the
workable program" concept to require certain steps for humanizing metropolitan
areas as a basis for qualifying for loan and grant assistance.
More particularly, under such a program current statutory provisions for
the array of different grants - in-aid, loan, and rent supplement authorizations
would be amended so that the eligible LPA 1 s would be new-type Metropolitan
--- ·- .
·r-...,..___._., _...._ ... ·,------

. Area Development Commissions .ll In addition tD the jurisdictional change,
the key feature of these new Commissions would be an entire new philosophy
in the execution of the traditional renewal, public housing, rehabilita tion
housing, cooperative housing and middle income housing programs, and the
new rent supple ment program. While the Demonstration Citie s Program woul d
· become the rr.ajor central city program, it would be required to meet the
/ workable-program-type criteria develop.ed by the Metropolita n Area ,Develop- ·
.ment Connnission.
- · _;
Under the new philosophy an empha sis on ttcommunity enclavestt would. he
· featured in contrast to .the old massive .area-wide clearance and r e development
or rehabilitation emphasis. The esse ntial objective of thi s- new appr oa ch
· would be dual -- (1) it would seek to humanize thei city environment by an
across-the-boards effort for the impr ovement of facilities and services i n
ihese enclaves,l/ each sensitively attuned to the mosaic of living patte r ns
in its environs , and (2) it.would deve lop and utilize workable progr ams tha t
would progress i ve ly put into effe ct voluntary open hous i ng gua r ant ee s a nd
intr oduce va rious services a nd improvemen ts in all e nclaves . Enclave s wou l d
be sma l l in sc'a l e , some times one block in extent, s ome t imes two or three, and
pe rhaps affecting no more than a dozen structures in a four or five block
a rea. They would be identified on the basis of a wide range of criteria ,
including struc t ura l conditions in the a r ea, hous ing vacancie s, vacant land;
t y pe of exis ting l a nd use , t he propos e d t rans por t a t i on and l a nd use s i n city
pla ns, the pattern of communit y organiza t ions i n the a rea , s ocia l inte r action
characterist'i cs i n the area , a nd a t tit ude s of re s i de n ts aixl u t the i r ne i ghbor hood. The proposa l f or human iz i ng an e nc l ave woul d :yary lvith the cha r a c ter .-- is tics , oppo.rtuni tie s, and needs of eachu Progr am empha se s would proba bly
diffe r i~ close -in a reas from t hos e -i n suburban a r ea s . Experiment a tion i n
ways of secur ing community par ticipation in e ncla ve are as wo uld be a n
i mpor tant pa r t of a ttaining respons ible invo l vement of r es i den t s i n suc h art
e ffo rt .
The hous ing aspe ct of the program might i nvolve publ i c l a nd a cquisition
of sca tte red propert ie s a few a t a t i me and the r e placement of outworn
struc t ure s wi t h new one s ; s ome might i nvolve r e habilita tion by priva t e groups
. I
1/ The t itle Me tropolita n Area Deve l opme n t Conm1i s s i on" is intended t o
convey emphasis on bui l ding and deve lopment function s , a nd might be cons olidate d
wit h the me tropol i t a n planning and pr ogramming functions t ha t are empha size d
under T"itle II of the 1966 Act. Whethe r it is po litica lly £eas i ble to phase
out the pr esent - day mun icipal programs in re newa l and public housing, I would
de f e r to othe rs on the TF on t his ques tion, but under any cir cums t a nces, the
new metr opoli tan empha sis, afte r allowi ng for a trans i tion per i od, should
rece i ve the lion 's sha re of loa n a nd gran t author i za tion .
I I This would mean i n troducing some of the same coordinat ive me chanisms
provided for under t he Demons tra tion Citie s Program i n to t h i s Program.
·;"··· ·~,
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- -7

or cooperatives and be planre d variably, some with and some without rent
. supplements. The key concept in the development of plans for these enclaves
would be voluntary open housing guarantees.JI Enclaves in outlying suburban arec!,s would be encouraged to receive small numbers of deprived
families .f rom the central city, and those in central areas would be designed t~ receiv~Jamilies of varying socio-economic circumstances seeking
close-in locations; For success of such a _Program a great deal depends on
develop~ng responsible participation by re.sidents of enclave connnunities
and in keeping the scale of adjustment at
low key.
To -achieve the full leverage ;iJa program of this kind, special related
efforts ··in local services, educatlon, employment, health, social work, and
recreation would be developed, especially in the central city areas. · By
and large schools would be found in interstitial areas bebveen enclaves and
depended upon to help supply a cementing force to the efforts in surrounding
enclaves. In short' the Program f .o r HumaniZ>ing Met'ropolitan Areas is based on
a philosophy of responsible involvement of small groups in making their . block
or locale a 11 foster home 11 . for . a few new families. A backup effort in s pecial
education, employment and other services would be an essential feature of the
Program. In effect, in the large me tropolitan a r eas this Program in a
_m etropolitan-wide framework would become a complement to the Demonstration
Cities Program which centers on the .c entral city problem.
2. A St epped-Up Effort in Re search on Inter-Group Re lations and
Liva bility in the City. The severa l rece nt crise s in ce ntral cities of
large me tropolitan areas and the groping a ction efforts to alleviate t he se
situa tions cle arly indicate a failure in ba ckup r esearch. In ·some r espe cts
more serious, there is a lack of an evaluation effort on action taken which
would enable conclusions to be drawn on t he relative effectiveness of
measures used.
In any effort to institute a ction programs in are as· as sensitive as
tho se of trappe d popula tions, and ce rtainly in a ny program to e liminate
ca u ses of t he se conditi ons , a major r esearch thrust is r e quired, one on · t he
order of that which this country has mounted in space research or in medica l
research in recent years.
_....,, ,
Ce rtainly the s ocial problems of today s hould- be hi gh in priority of
attent ion . But .in be late dly re searching t he s e pr oblems , t he big prob l ems
of tomorr ow should not be over looke d . One pr oblem r apidly desce nding on
~itie s is that of a dj ustments to changed ]Etterns of liv ing which wi ll come
fr om shorter work week. Ther e is a great deal of s~ecula tion on the boredom
J / Obvious l y vigor ous Admini stration l eadersh i p i n amending the
Demonstr ation Cities and Metropol itan Development Act of 1966 to e l iminate
Sec . 205(f ) would be esse ntial .

�of urbanites and their social psycho l og ical prob l ems of adjustment; the re
is speculation abo~t two-house livi ng arrangements becoming much more widespread wit h attendant changes in re c rea tion empha ses and traffic patterns;
and there are all sorts of unknowns i nvolve d i n new transportation and
communications technologies. With ;1 11 this i n t e rest and speculation, t here
is little systerna tic research going on that would en able cities to take
account of these changes in the pub l i c work s a nd service programs of a
catching-up and remedial sort be i ng l a unche d today, much less ena ble them
to embark on programs of a more pos i tive kind de signed for the Great Society.
A thir d research emphasis clea ly needed is one which frontally
e xamines the new kind of urban envi r onment res presented in the belts of
urba n deve l opme nt extending over seve r a l sta t es . These appear to be superce d ing the metropolitan area as a n ur ban environment (just at the time whe n
me t ro pol itan-wide approaches are rece iving a t t ention in Federal legisla tion
fo r the :first time to a significan t extent)G The qualitative aspects of
liv ing conditions in such regions of the k i nd noted above is one facet of
th i s envir onment, but also involve d is the whole area of governmental
mechanisms for dealing with needs a nd prob lems in these belts.
Sec. 1011 on the Urba n Environmen t a l Stud i es of the Demonstration Cities
and Me tro politan Development Act of 1966 needs t o be grea tly broa dened in
conce pt to recognize these three area s of neede d research.
3. The Wheaton Proposal for Me tropolitan Ar ea Fi s ca l Res pons ib ility
and Actio~ . Although W. L. C. Whea ton 2 s pr oposa l is already i n t he pub lic
domain, i t has not been widely cir c ulated as-ye t . I n any cas e, the r e a re
f ea tures o f his conce pt of 11 Me tr opoli t an Target Pl a nn i ng 11 which ma y ha ve
me rit fo r consideration by the TF i n t he s e cond stage of our work. Ve ry
br ie f ly he _ proposes using Federal gr a nt progr ams t o ac h ieve a more equitable
d is tribu t i on of fiscal r e sponsibil i ty among t he municipalities of a me tropolitan area, particularly in the a rea s of educa tion and housing . I attach
a c opy of his pape r.
�Tb foll
f lnt
. t~
Al t 0
Ut f

.3 )
. ill
to the
x cutlv OfU .
- con: .
Anthony Downs·, Chairman
Julian Levi
Edwin C. Berry
Julian Levi, Chairman
Stuart Chapin
· Urban Development Corp.
Ben Alexander, Chairman
Paul Ylvisaker
John Dunlop
Ezra Ehrenkrantz
Neighborhood information center
Theodore Sizer, Chairman
Paul Ylvisaker
Ivan Allen
Ralph Helstein
fGl- ~-- - ~.,,....,.--- ...-------,-.-c,'r,-;
'( 1- ~- -~--------r (~
l ,. ,·, ~ -- ~ - -~ :.. ,-,+ -----~--.r=·~ -..../
\ ,.
Washington, October 28, 1966
Rough Notes taken by Paul Ilvisaker
Distri but i on : -
Dr . Julian Levi
Honorable Ivan Allen
Mr . Ben Alexander
Mr . Edwin C. Berry
Mr . stuart Chapin
Mr . Anthony Downs
Professor John Dunlop
Mr. Ezra Ehrenkrant z
Mr. Ralph Helstein
Dr. Theodore Sizer
Mr. Ar Dee Ames
�Notes taken at meeting with Joe Califano, White House, Saturday, October 22, 1966
Mr. Califano
The Task Force is to have a short and long-range agenda with respective deadlines
being December 1 and June 1.
For the short-range the questions:-
( 5)
Should we encourage home-ownership in the slums and if so by what methods?
Does the idea of an urban development corporation for rehabilitation make
How can we honor the Presidential pledge to prov ide legal services for
tenants in the ghetto?
How can we honor the Presidential pledge for neighborhood service centers?
What about the proposed metropolitan expediter?
Task Force should proceed without constraints of costs and politics.
We should
keep in mind several other task forces operating in areas close to ours.
example, the "In-House" task force under Shriver to develop more permanent answers
to the hot summer problem.
Another headed by Bill Carmichael on personnel for the
Great Society .
The subject of transportation is currently being thoroughly examined with a view
towards setting up a new Department of Transportationj to that extent it's not a
subject on our task force's agenda.
Two Congressional committees having the same personnel will be holding hearings
during our tenure.
One chaired by Senator Muskie, exploring the proposal for a
domestic security council.
The second chaired by Senator Ribicoff which will
resume in December will not call government witnesses for a while.
It will con centrate first on non-governmental experts, beginning with the problems of data
and areal power arrangements.
Meeting with Secretary Weaver
Concerned with:(1)
( 3)
the development of national urban policy respecting migration and location of
the national populationj
encouraging a more positive role by the states in urban policy developmentj
metropolitan organization.
Robert C. Wood
Under Secretary
Department of Housing and Urban Developmen~
HUD is now concerned with several major pr ob~ems:-
working at s cale: fo r example, they now have $2 billion of urban
renewal appli cations with only $200 million available;
building up the staff ing c apabilitie s of the Department;
general r eorgani zation;
de-centralization of HUD operations -- bett er informat i on systems are
needed if de- centralization is to b e carried out.
The new programs occupying HUD' s attention of late: "model" cities; new
connnunities; expediter; metr opolitan desks; metropolitan planning.
HUD has been pr oceeding on the strategy of open opti ons; the expansion of free
choice for the individual; model for neighborhood facilities; home ownership
& jobs in the ghetto; provide count erparts f or the public s ector.
Wood's adv i ce t o the Task Force:(1)
Address ourselves to thoughts about cities; not only response t o them
and t he ir needs.
Concent r at e on t he infra-struct ure in research & training .
has been manpower .
Real constraint
M. Cart er McFarland
Assistant Commissioner f or Progr ams
Has been working c l os el y with Henry Schecht er
c~ec k out t he i dea of indi genous ownership of
wi th as s ympatheti c an out l ook a s possi ble.
vi nced ther e i s no s ingl e panacea; I det ected
he t ried to allow i n hi s di sc uss i ons.
sinc e they were assi gned t o
s l um pr operty . They have begun
At t he v ery l ea st t hey are conmor e of a grain of cyni c ism than
They start from a few b a s i c statistics : 9 milli on sub -st andar d dwelling units
nat i onwi de; of which 48% are owner -oc c upi ed and 52% re nted.
However , a gre at
v ari ance between centra l c i ty and s uburb. - -r n the s l ums : 21% owner- occupi ed
and 79% rented -- in the suburbs : 52% owner- occupi ed and 48% rented.
It is thei r impression that absent ee owners are le s s r espons ive to mai ntenanc e
eff orts than owners who occupy.
Al s o that absent ee ownershi p i s incr eas i ng
and getting "less desi rab l e . "
They fee l that ownership ha sn't been str es s ed as part of urba n re newal and
0E0 operations.
Some proposal s:
(1 )
(2 )
tie in any program wi th the mode l cit i es program which
offers supporting services;
use the urba n devel opment corporat i on if l egislated;
allow for several forms of ownership ranging from
individual ownership to cooperat i ve.
�-3Task Force questions included:-
Are there other and more effective techniques for getting the desired
results other than encouraging ownership?
Can you use old and new techniques for driving down the costs of property
in the slum areas?
These costs are now being sustained by present governmental programs.
Wha~ can we say about the possibility of "steady state" maintenance?
Aren't we trying to eliminate slums and how does slum ownership fit
into that objective?
William D. Carey
Assistant Director
Bureau of the Budget
So far no comprehensive strategy has been arrived at in the federal government
replying to varying proposals for the neighborhood information service centers.
During the summer several agencies produced "talking documents" for the Cabinet
Cormnitt ee.
Then the President's Syracuse speech "overtook" the Task Force with
a . "get cracking" order. . There emerged a servic e group for the facilities approach
of HUD, the latter focusing on recreation, etc.
They were then talking about
$50 million drawn from "pooled" program monies.
Presently they are thinking of experiments in 14 cities of 3 classes -- the sponsor. ing coalition would be OEO , HUD, Labor and HEW.
The purpose would be to provide
one-stop soc ial services to use 3 different models.
Physical facilities would
not be the primary emphasis.
The key would be to br ing toget her all serv i ces and
clients and evaluate the experiments.
Ralph Tayl or
As si stant Secretar y for Demon st rat ions and Int er governmental Relations
If model cities program is to succeed, need a rehabilitation industry of a scale
that hasn't yet emerged.
Industry, large contractors and labor ar e s~itti sh.
The proposed UDC approach using low interest rates and much volume as l evers,
hopefully might break through. The question remains whether the UDC would have
its own H&D or let industry do this according to performance standar d s that UDC
would set.
Major questions have to do with the market .
Another question has
to do with local mechanisms.
Indi genous c9operatives might be one answer.
As for the proposed expediter -- it ' s now be ing c alled a representative.
should not be confused with the idea of the metropolitan coordinator which is
The representative is to be the federal "pr esence " -- housed in HUD but
�-4available to all agencies.
It would be a source of information on federal
· programs; clearing house; .liaison; feedback; facilitator.
HUD is ready to
go in six experimental cities not necessarily the model c ities and concentrating
on state capitals .
. Martin Richman
Off ice of Legal Couns el
Department of Justic e
The Attorney General ' s work with landlord-tenant relations has taken its marching
orders from the Syr acuse speech .
It will Qe cal ling a conference in early
December .
They will be apparently concerned with tax incentives, though they are
not deali ng directly wi th the que st i on of r educi ng local property taxation .
. Comments from Task Force
Mayor Allen
Nat urally and necessaril y i s conc erned with i mmediate probl ems especi ally the
need for publi c hous ing and the problems of race and minoritie s.
Mr. Helstein
Agr ees that t he most pr essing prob lem is t hat of the ghetto.
Mr. Downs
·Disagr ees wit h Secr et ary Wirtz i f i t means forgetting the immediate probl ems
of the ghetto and r a ce.
Dr . Chapin
Especially c oncerned with three sub j ects :
(1) Impact on l ivi ng patt ern s of t he short er work week .
(2 ) · Emerging urban form; concentrating on the inner - cit y a nd regi onal arrangement s
necessary to get linear development .
(3) The dynamite of the central city -- wondering if there isn ' t a General Gavin
idea of enclaves of development.
Mr . Ehrenkrant z
Two matters on his mind:
(1 )
(2 )
urban development corporation
developing the data systems and inventory we need
on an accumulat ing basis.
Mr. Alexander
Impressed with the fundamental outline of the urban problem. We have neither
a theory on which to operate nor criteria by whi ch to measure purp0se.
�·,_. ,,
10/24/ 66
of- the
Initiated {or to be I nitiatea)under Legisl ation ·
Enacted from J une 30, 1; 61 t o Date
l ·.
Bel ow- market interest rate FHA rental housing f or l ow- and moderateincome families .
Urban mass transportation mat chin{J grants .
1965 ·
Rent supplements for special categories of low-income families occupying
ne r l ow- cost FHA housing .
?48.tching grants f or basic ,rater and sewer facilities .
Matching grants for nei ghborhood facili ties .
Demonstration cities pro~.
Supplemental incentive grants for pl.e.nned metropolitan developi!lent ,
Mortgage insurance progrm for "new coomunities" .
FNMA "pa.rtic1pa.tion sales " program for obligations of Department and other
Government agencies.
Matching grants for open space land acquisition.
Grants tor demonstrat ions of new or improved means of providing housing
for low-income famil i es .
�. ,·
Mortgage i ninu"ance 'Utidi.;;r new 1ong;-term l ow- downpa.y.m.ent sal ®t~ b.oudng
Loans i'ol" mass t rans"" r ion fa.cilities!I
d gl~a..11.ts :tor mss trans-

p.ortation deaonstr~
t.icnu ~

Direct l oa.n.s a t 3 per·~ent 'for rehabilit-a.tion of hou::;ing or business
prop..-:;rties i n urban r tm.,,,.-:al {'~a.;; .
Mt.1.tchin;g' g;ranta to St;; t e s
Clea:r-inghouse s -e r1ice and technical. a::rni:,;-ta.nce f"or S-w.tes al".d localities
on COJmlIU.nity and metropolits-...n ;,, evclopm.ont. pro'olems .
teasing of private 00 sing fo~ lo'W'--incm· e f&iilies und "'X' public housine,

progr~ of Departm nt.


·.. . .
.Vatchi:ng grants tor u1;ban'."n!a . io:a .cen.t--~r~ and 'technical as$btance
tor sn-!!Ul c:ities.
l':11\ mrlgag~ insurru1.ce pl'O~ :for b~ low-m.M"ket. i11.teNst rate sales
housing for low... incomc .f'-.J:..ailies ~ (rehabilitation by nonprofit coi-porations )
Va.riety of financial;t~c-:... t :, th"' : res~tion c.nd :it~tort;i;'i;ion
of bisto:rie structures
il-nd arear. o
Research progr~ on co,trt r~du.ctio:-1 ~ect:niquc;j :for lwusing construction
and :rerabilltation a nd urb3.n devol.op~nt .
ienea.reb p:r..og.ram on tictiotl~ to imp.rove undc:tstll.nd.:ing ~nd impl--ove.~ent
or urban envil"oninont.
The 1965 Housing Act authorizes the Public Housing Authority to fund the
purchase and rehabilitation of existing structures through local Housing
This program permits local Housing Authorities to contract a property purchase and rehabilitation with a builder. Upon project completion, the
builder is reimbursed for total project costs (land acquisition-rehabilitati~n).
The project title and management reverts to the local Housing Authority.
FNMA financing is not included in this provision. · The Public Housing
Authority makes theappraisal, reviews cost contracts and will accept a
cost figure from a bui Ider without competitive bids. Upon completion,
the project is turned over (turnkey) to the local Housing Authority .
The one requirement under this program stipulates that acquisition and
rehabilitation costs do not exceed 90%. new construction costs.
1965 HOUSING ACT: Contains new legislation that provides a below
market interest rate (3%) on rehabilitation financing for non-profit
sponsors and Iimi ted profit corporations.
221 (d)3: 1965 Housing Act provision that defines financial methods
available to non-profit sponsors and limited profit corporations.
· The non-profit sponsor category has two provisions:
I) Non-£rofit sponsor who holds property title .
Reha ilitates and continues ownership.
· 2) Builder-Seller who purchases and rehabilitates the property
under an agreement with a non-profit sponsor to purchase
the property upon rehabilitation completion.
221 (d)3 provides a 100% total mortgage (acquisition , reconstruction)
at 3% for 40 years.
221 (d)3 Limited Dividend Sponsor· - Limited to 90% total mortgage at 3%
for 40 years. Investment return on 10% equity is limited to 6%.
221 (d)4 Conventional FHA Financing - Limits sponsors to 90% total
mortgage at 5¼% for 40 years.
�; id

Ef_,.14 =::±

·Section 221 (D) (3)
Agrees to a 6% return on initial
Mortgage Terms
90% total project cost {land
acquisition-rehabilitation) at 3% for
40 years . *
A limited dividend sponsor must have 10% equity in the total project cost .
. (Example)
Building Purchase Price
Rehabi Ii tat ion Costs
Total Project Costs
Final FNMA mortgage at
90% projec~ cost
$180, 000
10% investme nt (equity)
$ 20 , 000
6% re turn on investment
a ll owed under this provision
$ I ~ 200 per year ·

40 year maximum under law . Actual term d~termined by local FHA.

5-11 -66
Section 221 (D) (3)
Bui Ider purchases property with agreement to
sel I property to a non-profit sponsor ofter
property has been rehobi Iitoted.
Mortgage Terms
100% total project cost (land ocquisitionrehobil itotion) at 3% for 40 years. *
Assigns 100% mortgage to non-profit sponsor
upon job completion.
Property. Title
Is transferred to non-profit sponsor ofter FHA
final inspection upon job completion .
Invested Monies
(Some as non-profit sponsor) .
Mortgage Loon
3% interest (below market rote) by FNMA
after FHA insures loon ofter rehobi Ii tot ion
job completion .
100% mortgage is assigned non-profit sponsor.
FNMA reimburses property purchase price.
FNMA reimburses rehabilitation cost.
FNMA reimburses incidental fees .
Construction loon
(Some a s no n-profit sponsor)
Fi no l Settl ement
(Sa me as no n-profit sponsor)
Upo n fi nol rnortgage sett Iement, property ownership and management is the responsibility of the
non-profit sponsor.

40 year mox.imum under low . Ac tual term determi ned by local FHA .

5 - 11-66
Section 221 (D) (3)
Foundation, church, university, etc., incorporated as a non-profit organization.
Mortgage Terms
100% total project cost (lal"!d acquisition rehabil itation) at 3% for 40 years. * ·
Property Title
Must be held for mortgage term .
Invested Monies
Property purchase (FNMA) reimbursed after
(FHA) final inspection upon project completion.
Mortgage Loan
- · .3% interest (below market rate) by FNMA after
FHA insures loan. FNMA mortgage loan made
after final FHA inspection upon job completion.
Construction Loan
For actual rehabilitation costs made by private
lending institution to non-profit sponsor as a
temporary loan until final FNMA mortgage loan ·
is closed. The construction loan is made in
timed stages as rehab iii tat ion costs become due .
Construction loan insured by FHA.
Final Mortgage Settlement - · Permanent FNMA mortgage finalized . Pri vate
I ending inst itut ion repaid construction loan by
Final mortgage balance minus constructi o n loan
payment awa rded to non - profit sponsor by FNMA .
(Thi s ba l once covers property purc hase and o ther
fees, e.g~, archite c t , legal ' ·, etc.)
Non-profit sponsor pays mortgage for term set in
mortgage from property rentals.

40 year maximum under low . Actual term determined by local FHA.

�=----= =

Section 221 (D) (4)
Mortgage Terms
For individuals 9r groues who do
not qualify under 221 (D) (3)
90 % total project cost (land
acquisition-rehabilitation) at
. 5¼% for 40 years.*
Al I other 221. (D) (3) financing provisions apply except private lending
institutions lend the monies instead of FNMA.
Under this provision, there is no I imit on amount of return on initial

40 year maximum under law. Actual term determined by local FHA.

�December 12, 1966
Special Task Force meeting in Washington
I talked with Ardee Ames and the meeting is set for Thursday,
December 15th at 10 :00 a. m.
I explained to him you inability to
get there before noon, and he said that it usually took them an
hour or so to warm up.
At the luncheon, Mr. Chester Rapkin, who was Chairman of the
study group last year, will talk about how they went about what
they did.
The meeting will be in room 444, Executive Office Building, and
the luncheon will be in the ca£ eteria in the same building.
should go to room 444, and if they have left, check by room 2 3 7
(A r d ee Ames office) for instructions wher e to me e t for lunch.
You a re confirme d as follows :
EASTERN flig h t 130 , l eave Atlant a 10 :3 5
A rr i ve Washin g t on Nation a l 12 :0 0
E ASTERN flig h t 137, L e a ve Wa s h ington National 5 :4 0 p . m.
Non - sto p t o Atlanta 7 :1 2 (dinner served)
Also at this meeting, plans will be made as how to continue in
January, with interviews, etc.
It s ounds like a rather important meeting .
�1 .
.. ·-::'
... .. .
on Executive Reotgtlftization
of the
Senate Committee on Government Operations
Tuesday, November 29
. .
(9:30 a.m.)
David Rockefeller, President, Chase Manhattan Bank
Richard Scammon, Vice President, Governmental Affairs Institute
,! ,
Wed~esday, November 30
Roy Wilk.ins, Executive Director, National Association for the Advancement
' of Colored People
Harry Golden, author and publisher, Carolina Israelite
Honorable George Edwards, Judge,
u. s.
Court of Appeals, 6th Circuit
Dr. Robert Coles, Research Psychiatrist, Harvard University Health Services
Friday, December 2
Dr. James M. Hester, President, New York University
Dr. George Sternlieb, Professor, Rutgers University Urban Studies Center
Lees. Sterling, Executive Director, American Property Rights Association, Inc
New York City
Monday, December · 5
Constantinos Doxiadis, President, Doxiadis Associates, Inc.
Walter Reuther, President, United Auto Workers, (a ccompanied by Jack Conway,
Executive Director, Industrial Union Department, AFL-CIO)
Tuesday, December 6
A. Philip Randolph,· President, Brotherhood of Sleeping Car Porters, (acconpanied by Bayard Rustin, Executi ve Director, A. Phili~ Randolph Institute )
Lee Rainwater, Professor of. Sociology and Anthropology, Washington University,
St. Louis, .Missouri
Anthony Dechant, President, National Farmers Union
Milton Kotl er, Institute for Policy Studies
Wednesday, December
Gerald L. Philliwe, Chairrea.n of the Board, General Electric Company
Dr. Philip B. Hallen, President, Y.aurice Falk Medical Fund, Pittsburgh, Pa.
James W. Rouse, President, Community Research and Development, Inc .
Jam~s H. Torrey, Senior Vice President,. a.11d Bruce P. Hayden, Vi~e ri·osi c'lent,
Connecticut General Life Insurance Company
Dr. Willia.rn. Doebele, Graduate Scho'Jl of Design, Harvard Un.-1.versity
..I •
Thursday, December 8
Floyd McKissicl<:, National Director, Congress of Racial Equality
Herbert J. Gans, Senior Research Sociologist, Center for Urban Education
Joseph .Monserrat, National Director of the 11'.tigration Division, Department
of Labor of Puerto Rico
Dr. John Spiegel, Director, Center for the Study of Violence, Branddeis
F~iday, Dece~ber 9
Budd Schulberg, author, (accompanied by Yir. Harry E. Dolan, Vil'. Johnie Sc?tt,
and Yir . Stan Sanders)
Derek V. Roemer, Psychologist, National Institute of Mental Health
Helen Peterson, Director of Community Relations, Denver, Colorado
Monday, December 12
Reverend Leon H. Sullivan, Chairman, Board of Directors, Opportunities
Industrialization Center, Philadelphia, Pa.
~Irs. Hortense Gabel, Former Administrator, City Rent and Rehabilitation
Administration, New Yorl( City
Tuesday,· December 1~
Daniel P. Moynihan, Director, Joint Center for Urban Studies, Harvard-MIT
Herbert J. Sturz, Director, Vera Institute of Justice, New York City
Dr. Kenneth B. Clark, Director, Social Dynamics Research Institute, City
College of New York
Edward J. Logue, Administrator, Boston Redevelopment Authority
Wednesday, December 14
McGeoree Bundy, President, Ford Foundation
vfnitney M. Young, Jr., Executive Director, National Urban Lea,eue
Howard R. Leary, Commissioner of Poli ce, New York City
Thursday, December 15
Dr . Martin Luther King,
rr~sj_(lfmt ,
T.e:=i.dP.:1.·sb :tr Con:feJ:.--n~e
�L1 u n
v t.
Low Re n t Pu b lic Housing

P r or::rn.m :

Nat lre a nd P~ r pose :
Th i s p r og r am provid es loa n s or guarant e es of loans to
loca l h ou sing a uth or i t ies to a ssis t t h em i n the dev e l oo~e~t
of s afe , decent and s ani ta r y lo w- rent h ou s ing p r o jec ~s · f or
low- i n c ome fami lies a nd others wh o c a nnot affo r d s tandard
private h ous i ng .
Th is p rog r am a lso provi des annua l cont ribu tion s to l ocal
hous i ng authoritie s to a s s i st t hem i n ac h i evi ng and ~aint a ini ng t he low- rent chara c ter of th e projec t s.
Thi s p rogram provides dire ct benefits f or pov e rty- s triken
p eop le .
Th is p rog ram als o provides f i nanc ial assis tance t o loc a l
h ousing a ut hori t i e s t o ass i st them i n meeting t h e s pecia l
housing nee ds of th e l ow- inc ome el de r ly .
When p roviding a cc ommodati ons des i gn ed s pe c ific a lly for
the eld e rly, higher t han normal;.~Low- Rent Public Hous i ng
Pr ogram~ per r oom c os t ~ l i mitat ions a r e permitted . An
ad di t iona l contributi on t o th e loc al h ousing a u thor i t y
( up to $120 pe r dwelling u nit p er yea r ) may be a uthorize d .
-s i
' rtl b ~ i C
6 w3. -S p C Ci a ~ - r a-m.--G-:f-a'S-S"'.i:."Si;a- n ~-t-h it...
'u~W - n'"eT:'c
- i ~* 1 - f ~s.e
~ ~s-.?
Eligib i lity :
~h e a pp licant a ge ncy mus t b e a l ocal housing a u tho rity
estab li sh e d by th e loc a l government , u nde r s tate ena bling
legi slation, to be eligible . The f o rmal a pp lic a tion m~s t
b e a pp roved by the local g ove rning body . The Atlanta Hous i ng
Authority op era tes the prog r am f or th e Cit y .
Although t he prog r am is gene r a l l y l i mi ted to low- i n c ome
fami l ie s, s i ngle pe rsons a re eli gi b l e f or a dmi ss i on i n ~he
case of the e l de rly, ha ndic apped , a n d th ose dis p laced by
u rba n renewal or other gove r mnent a l a c ti on.
~here a r e on ly f i ve r eal f a c to r s de termi n i ng elig i bi: ity
t o l ive i n At l anta Public Hous ing :
( 1 ) The a ppl ic a nt must hav e\an address in Metropol i -::2. ::.
Atlanta . Th is doe s n ot mean h e mu s t hav e r es id enc e :o~
any l ength of time , bu t he mus t be living _; u pon a pp li cation
somewh e r e in t he a r ea .
( 2 ) The a pplic ant may no t have a net inc ome ( determ~ncc
~ram g ross r epo r ted inc ome, emp loyer 1 s records, and incl~d ~ng
ce r t ain deduc tions for chi l dren, health , and other f acto~s
~ighe r than the maximums estab l ished by t he Housing frnt :o r~ty .
'::::-,ecc af'c : fo i' a family o: 1 - ;i;3,G0 0 ; 2 - :;i3_, i,.0 1 ; 3 - :-~~ .ovv;
Lr - ~;3, 800; 5 - '.;i4 , 000 ; 6 - :;;! ~, 300; 7 - '.;:LJ., L,.00; J - :::._,., ::) C\.~ ;
S - :;L~, 600; 10 or more - :;).;., 7 00 . Tl esc cw ,..axin,tEl :.:..~-:.12u::·. c2
,:,et i' n Dc•c ~r.w,cJJlb /\.""\.,.l:,
·~ 1 965 !:'."' ' a ·r. -'-- '1 t:.:' .l~i· , , .· - -: " ---. · · ,·~ s,-' S
uL ~V s
.._, t:n e lS,50 ' s . Once el.::..t:.::ibi2. i -cy has b8e n :;:' cn::.:-1~· , :.·;..-.::.::.lie s
~ay earn more t han t he maxiiw and cont i ue oc cupanc y ~p ~o
certain limit s . The se c ont i nue d occupancy max imums ar2
- \-
...... .
�Page 2 .
El i~ibility
continu ed :
$3J750 for one person, rising a t increments of about $ 300
pe r person) to a maximwn of $5 ,875 for a famil y of 10 or
more . Every family moving into public housing must show
some sourc e of income whether it be employment ., welfare
or social security.
( 3) Families of 10 or mor e must receive a special waiver
from the authority to be eligi b le . All other families.,
me eting other qualifications, a re eligib l e .
( 4 ) Fai,,i l ies must pass a p olice check as to ·moral chara cter .
Wh il e pa st convictions will not prohi bit eligibility., being
presently wanted f or a_ c rime will.
(5) Each family must demons trate the physical and mental
capacity to care for themselves without placing a burden
up on the Housing Authority .
I n addit ion, there are two further requirements for the
e lderly : (a) a doc t or ' s heal t h certif i cate,; (b) a spons or
1~h o can be called in case of death or illness . ?ina lly.,
f i r st priority i n public h ousing goe s to persons who ha ve
b een di splac ed by gov~ r mnent housing . Although occupancy
is 99% full, space is held to a very s mall degree for such
pe r sons . The Housing Autho r ity wi ll also house persons on
a n eme r Gen c y basis. 8 or 9 Cuban families are now being
so housed .
Re nts are determineddupon th e basis of income ., s ou r c e o:r
i n come., family siz.e , standar d deduc tions ., · n e eds and o-'che r
vari a bles including t h e nwnber of children under s ch oo_
~?e . The mi nimum rent is $20 and rent can be as high as
$0 5 or mor e . For the elderly t he av e r age rent is $29 . 00.,
while the minimwn elderly rent in a high rise is $25 . 00.
Present Utilization :
8.,784 units built., llL~O units i n planning, 1200 units
reservation made but n o planning as yet. Total funds
re c eiv ed to date - _$63,808,000 . 00 f or 15 projects .
.. r..d s
Da te Bt:.i lt
Te c hwood
Clark Howell
Gr ady
Carve r
Ea rris
Pe rry
Uni v ers i t y
J ohn Hope
Grav es *
Childs *
Palrr,e:c *
6 04
81 5
67 5
2, 61 9 ., 000
3 ., 215 ., 000
3 ., 634 ., 000
2 ., 490 ., 000
10., 200 ., 00
6 ., 397., 000
9 .,217., 000
9 .,7 36,000
2 ., 523 ., 000
2 ., 595 .,000
1., 942 ., 000
1 ., 883 ., 000
2., 177.,000
2 J780Jooo
- -z_ --
194 2
1 964
1 965
Ra c e
-" W
w ( I) 4
1,.r ( I)
Unit s for the eld e rly only . Th e re are 2 ) 383 (inc . udi n g
tho s e i n Gr a v e s ) Chi ld s ) and Palmer) e lderly units sc a ttered
t h rough out the pro j e cts.
Dn l ... ~ o the rwis e noted) st ructur e s are 2 or 3 stori es hi gh
a nd d o not h a ve hall ways.
A hi gh - rise with hall ways.
I t is intere sting to n ote t h at in 1941 about 550 uni~s c os t
2 million dollars; today 2 million will not buil d half t h at
many u nit s .
Th is means that the p ro j ect is predominantly white with a
s ma ll amount of integration. Wh en (I) is not s h own it
indicates the project is 100% of the indicated race.
�Pr og rarr,:
Low Rent Public Housing ,
Turnkey 11 Me t h od
Nature and Puroose :
~h is is a new techni que for the p r ovi s ion of public housing
which permits a priv ate deve loper o r buil der to de a l with
a local hous ing authority in essent i ally th e same way
a s h e is accustomed to deal with his private cli ent s . Und er
th is s y stem, c alled t he 11 turnkey 11 approach, a develop e r
who has a site or an option, or c an obta i n one, may approach
the Atlanta Housing Autho ri ty with a p ropos a l to buil d in
accordanc e wit h p l ans a nd specifications prepared by his
own arc hitect and to a standard of good desi g n , quality and
workmanship . In the ev ent that the deve lop e r 's propo s al is
a ccep t able to -ch e Housing Au th ority , th e p a rties 1,.rill e:-.te r
into a contrac t unde r which t he Housing Authori t y . a g r ees to
purcha se t he c omp leted b uil d ing . Th is c6ntract will be
backed by t he Housing Assistance Adminis t r ation 's financial
assistance c ommitment to the Hous ing Auth ority , a nd it will
enable the d evelope r to s e cure comme rical c onst ructi on
financin g in his usua l way .
It is anticipated that the developer will be worki n g wi -cn
architects, contractors and subcont ractors of his own
choice and will bring to the Housing Autho ri ty t he benefit s
of his experi enc e and know- how i n p rodu c ing the desired
hou s i ng and related fa ciliti es and amenities .
The housing $hould be suitabl e , wel l-desig ned, and well constructed, able to stand hard wear f or at least 40 ye a rs ,
be designed fo r e con omi c a l admini s trati on and mai nten a n ce ,
b e produced in the most efficient and economic a l ma n ner ,
and be J,oc a ted i n fte;i. e;hb Q;rh QQQ § t hg. t will prQvide o. t@ti: - -t l1=
fui a· a d~cent ~nvirorune nt and on site s a cc eptabl e t o t h e
Housing Auth ori ty a nd HAA f or l ow- r ent hous i n g . It will be
necessar y for the developer and the Housing Authority to
d iscuss in g ene ra l terms the types and si zes ( n umber of
b e d rooms) of the h ous ing and f a cilities to be deve lop e d .
Th e d e velope r s h ould con sult wi th t he Housin g Authorit y
f rom t i me t o time during t he course of his planni n g t o insure
t h e a cc e p tance of his p l ans when th ey are dev e lop e d .
In or d er t o p r omote .s maller p ublicly - owne d d ev e lopme~t s ,
e spe cially to enable l ow- income families to l iv e i n tn e
same e nvironmen t with famili e s o r i n div iduals of highe r
i n c ome a n d possib ly u nde r arrang eme n ts whe r eb y th e t ena~0 s
a nd the p rop e r ty a r e no t s p e cifi c a lly id e nti fied as be i ~g
pu blic or priv at e . Fo r thes e r e as ons d ev el op e r s ar e
enc ourag ed to prop o se sites cons i de r ed· t o b e t oo l a r 6 e fo r
e xclus ive ly publ ic h ou s i n g to p l an comb ined priva te - p ublic
d evelooment s which will be n e fi t b oth t he l ow- i n come tenants
s ub s i di z e d by t he HAA t h r ough t h e Hous ing Autho rity ~nd t t e
te na nts of th e d ev e lop e r who may be low, mid d l e , or h i ghe r
inc ome , dep endin g on fina n c ing and e conomic fea sib i l ity .
Suc h a c omb i nat ion could als o i n clude c ooperativ e or
cond ominium housing .
- '-\ -
�Pa~c 2 .
Eligibility :
Private developers wh o h ave sites or op tions on sites
should contact the Atla nta Housing Authority.
Present Ut ilization :
This s h ould be an e x c e llent means through which
t o c onst ruc t in a s h orter length of time the 1,200 units
f or wh ich t he Atlanta Housing Authority presently has
a reservation .
FHA 221 Mort gage Insuranc e for Low and Yio derate
Priced Homes.
Nature and Purpose :
A program of mortgag e insurance to assist p rivate i n dustry
for the c ons tructi on or rehabilitation of individua_ sales
h ousing , and for the purchase and r epa ir of new or existing
multi - family units (up to 4 - family units) that are to be
sold or rented to low - income fam ilies .
The p rog ram p r ovioes h ousing for families dis plac ed by
urban r enewal or 0-.:-. : ..-:..· g ove rnment a ction . Also for fc.r:-.ili es
wi th low or moderate incomes and elderly or handicappe d persons .
FHA d o es not g rant mort gage insurance d irectly to the
contrac to r . I nstead upon approach by a con tra ctor , and
foll owing app rova l a s to pr op e rty standards, location, need,
e tc., t he FHA issues a commit tment to the con tr a ctor to
issue 221 mortgage insuranc e to the buyers of t h e homes once
th ey are built . The contra ct o r then finances his operations
a s normal on t he private market .
221 mortgag e i nsu rance is also ava ilabl e f or non - new const ruction
when an ind ivi dual is buying a house and rehab ilitat ing it to
live in. The s ame elig i bilities and down payments apply .
Normally, the FHA mort gage insurance will be for all c osts .
Howeve r, if constru ction has started on the house b e fore
the 221 i ns uranc e 1'ias rec eiv ed , th e mort gage i nsur ed cannot
be for mo re t han 90% of value. Ad ditiona lly, i f the borrower
is no t to be an o wne r - occupier (for example, a person renting
hous i ng or mul ti - family units), . or if he is refinancing the
p roperty, the mo rt gage c annot be more than 85% o f t he a mount

Ln:;n,n·ab:Le for an own@ t=occupie r., or 85% of the prop ei :cty v lu ,

wh ichever is less .
Norma l ly , the max i mum mort gage term is 30 years . How ev e r,
it c an be increased to 40 years when:
( a) in t he c ase of a d is plac ed family, the FHA dete r m~nes
the mort gagor c annot make the required payments on
a short e r - t erm mor t gage,
( b)
in the c ase of ot h er mo rtgag ors, the mor t gag o r is ~he
owner-occupant . and the FHA determines he c an 1 t ~ake
the necessa ry payments in a shorter - term mort g a g e ,
p rovided the h ouse was a pp roved by FHA or VA before,
and ins pe c ted during, construc t ion .
Normal ly , builders have sold home s at a pri c e allowing
fo r the maximu..'n mortgage to c over the pu rc hase price .
Th ere f ore , the average purchase price would n o r,.ally
b e the max imum mortgage to cover the purc hase price.
Theref ore, ~t he avera ge pu r chase pric e would normally be
the maximum mortgag e plus $ 200 for certifie d buyers or
p lus 3% fo r other s.
Atla nt a t he maximum mo rtgage has ri sen a s the national
maximum has risen. However, as t he maximum mortgage in
�Nature and Pu rpose continued :
1958 was
purc has e
$11,200 t
$11,330 t
$ 1 1 ,000 and to day it is $12 ,50 0 , the average
price c a n be s a i d to have been from a bout
o $1 2 ,700 for c ertified buye rs and f rom about
o $12,850 for oth er buye rs.
It shoul d be noted that mortgage s on the multi - family
renta l housing or home s rented under this prog ram are a ll
at the established FHA interest rat e ( 5 3/4%) and that
on this housing the r e are n o income limitations on occupants
a s there are on the below-market interest rate housing unde r
22l(d )(3).

Eligib ility :
P riority i s g ive n to families who are qualifie d on credit,
family - re l ated by blood, and c e rtifi ed by t he U. R. A. as be ing
d isplaced by g overnmental action . These persons c an p ay a
minimwn $ 200 d own payment.
Other persons who a re not fa:-:iilies
but are ove r 62 years o f a g e or phys i c a l ly hand ic apped can ,
if otherwise qua li f ied ., qualify fo r the minimum $200 drn·m
Rayment , or $400 fo r a two - family dwe llin g ., $6 00 for th r ee .,
$800 f or f our. All other persons, i f they ar e families o r
over 6 2 or handicapped are eli g ible for 221 home mortgage
i ns urance but only f or sing le family units, but they must
pay down 3% of t he t o tal aquis i tion cost o f the home -which would be about $37 5 ,00 t o day as t he maximum mortgage
insurable in Atla nta under 221 is $12, 500. Non- c e r tified ·
fami li es a r e a llowed t o purc hase 221 housing bec ause,
a lthoug h the p rog ram is int ended for displaced pe rsons , the
FHA desires t o s ee all units, constructed with FHA encourage ment under 221, purchased.
Present Utilization :
From 1935 throug h 1965, 3 , 8 31 home mort gage s have been
issue d u nder this prog r a m at a v alu e o f $ 37.,991 .,450 . In
1965, 252 home mo r tgages were insure d f or const ru ction u n der
221 at a value of $2 ., 565 ,900 (thes e fi gures included i n 1935 65 to tal abov ~ ) . In 1965., 6~ home mort ~a g es were _p rof o ~e d
fo r construction., but as of J anuary 1 960 ., not cons Gruc vea,
for-a total of $769,000 ( not i ncluded i n 1936-65 total above ).
These tota ls include 221 new sales housing ., homes bo~ght a n d
rehabi litated under 221., and homes bough and rehabilita ted
~ya n on- occupant under 221. These fi gur e s are fo r th e
standa rd Metrop o litan Atlanta a r e a . There has not b een any
ma rke t-rate 221 mort gage insuranc e f o r ·multi- family h ousing
( up to 4 - family units) in Atlan t a as o f J anuary, 1 966 .
�Progra m:
FHi\ 221 ( d) ( 3) Mortgag e Insurance At Below
Ma rket Ra te Int eres t For Ren~a l and Coop erativ e
Housing For _Families of Low and Moderate Income
Nature and Purpose :
There are a number of famil i es whose incomes ·a re too h i gh
for p ublic housing , but not high enough to comp ete fo r
adequate hous i ng in the private marke t. Some of these
familie s have been forced into the mar ke t because of urban
renewal or . other gove r nmental action .
To help the se families obta in housing at p ric es they c an
afford, ~h e Fede r a l Housing Administration insures mortgages
on special terms unde r the provisions of Section 22l(d)(3)
of the Nat ional Housing Act .
To keep t h e rents within t h e means of the p eople f or whom
the hous ing i s intended , the Act autho riz es a mort gag e
interest rate below the current market rate on FHA- insured
mortgages .
Priorities f or occupancy are g ive n to families dis placed by
g overnmental action. Othe r families whose incomes are within
th e limits e stablishe d b y FEA a l so can qualify for occupancy,
as c a n single -elderly or handic apped persons .
Proposed new construction, and existing properties r equiring
rehabilitation, with five or more units may be eligible for
mort g age insurance .
A mortgag e i nsu r ed under Section 22l ( d)(3) may c a rry a
marke t inte r est rate (at the p r e sent time not more than
pe rc e nt), or a below-market rat e .
Under th ese p rovisions, the intere st rate durin g construc~ion
may be as h i gh as the establis hed FHA maximum interest r a te
a t the time of construction . Upon fina l e n do r sement of t h e
loan, th e interest r a te will b e lowered t o 3 p erc e n t ·. FEA
wa ives th e mortgage insurance premiu m o f ½ perc ent f or p rojects
with this low interest rate .
For.public a g e nc ies , cooperatives (includ ing investor :... sp onsored ),
and non-profit _sponsors, mort gag es on new con structi on ma y
not exc ee d t he r e pla c ement cos t o f th e proj e c t ; on r e habili t a tion
pro j e cts, t h e e st i mate d co st o f rehabi lit at ion plus t h e v a lue
of th e proj ec t before r ehab i l itati on; or -i f refina n c i ~g is
~nvolved , the estimated cost of rehabilitation p lus t · e amount
re qui r e d to r e finance t h e out - s t anding indebt e dn e ss . Fo r
l i mite d - d istri bution mortgag ors, mo rt gages ma y not exce ed
90 pe rc e nt of these amounts .
T:Crn mortgage on any p roj e c t i s f urth e r limi t e d by s u ch fa ctors
as family income limits estab li shed by the FHA, and deb t
s ervice considerations .
�Nature and Purpose
The max i mum mortgag e term is 40 years or three quarte rs of
the ?HA estimate of the remaining economic life of the
prope r ty, whi chever is less. The maximun mort g a g e araount
is $12,500,000 . The mortgag e on any proj ec t is l143.215.248.55t ed
by construction costs and median income fig ures es tajlish ed
by FHA f or the area . Information regarding these limita tions
for a pa rticula r area may be obtained from the local FHA
insuring office.
Public and private limited distribution projects : If
advances are to be insured during const r uction two percent
of the orig inal principal amount of the mortgage will be
required as working capital . This fund must be deposited
with the mortgag ee by the mort gagor and must come from
sourc es other than mortgag e proceeds.
?riva te nonprofit projec ts ~ An allowance of two percent
to make th e pro ject operational, in lieu of working capital ,
may be included in the mortgage .
Wit h re s pec t to rent, carrying c ha r ges , and o ccupancy
requi rement s, FHA control s will be maintained unti l
the i nsured mortg age is p a id in ful l . To prevent ea rly
refinancing and releas e o f FHA controls, full or partial
p re - payment of the insured mortgage without app roval of
the FHA Commissioner is prohibite d , except that limited
d istribution mortgagors may pay in full aft e r 20 years
f rom the date of final endors ement without such approval .
All housing financed unde r the p rogram must operate in
a ccordance with re gulat ion s as to rentals, c harges, methods
of operation and occupancy requirements set forth by t he ?iiA.
Occupanc y is limited to families and to elde rly or handi capped
indivi duals of low and moderate income, with preferenc e
being giv e n to di splacees . .
Project s may be sold only with the prior approval of FHA and
subject to prescribe d conditions.
Elig ibility :
Proje cts may be deve loped b y public agencies (except loc a l
h ousin g authoriti es that obtain their funds exclusiv e l y f or
p ublic housing f r om the Fe deral Government) or by c o-- opera ti ves
(inc luding inve stor - sponsored), priv ate nonp rofit c o rpo ~ations
or as sociations, or limited di st ribution corp ora tions , or
other mortg a g ors approve d by t h e FHA Commissione r .
A n onprofi t mort g agor is a corporat ion or associ a tion
organi z e d for p urposes other than the making of prof it f or
its e lf or p e r s ons identified with it a nd found by Fn A to b e
i n n o ma nne r c ontroll e d by or under the dire ction o f p e rsons
or firms seeking to deriv e profit from it .
'--1, -
�Page 3,
Elig i b ility
builde r- se ller mortgagor is a special type of l im~te d
d is tribut ion mortgago r organized to build or rehabilitate
a proje ct and sell it, i~nediately upon complet ion, to a
p r i v ate nonprofit o rganization at the c ertified c ost of
the project .
A public mortga g or is a Federal i nstrumentality, a Sta te or
its p olitical subdivision, or a n instrumentality o f a SGat e
o r of its political subdivision, wh ich c ertifies t h a t it
is not receiving financial assistance exclusively for pub lic
h ousing from the Federal Government and whic h is acceptable
t o the FHA .
A limit ed d istribution mo rtgag or i s a corpo r ati on r estricted
as to distr ibution of inc ome by the laws of the Stat e of
its incorporation ( or by FHA) - or a trust, pa rt ne rs ~ ip ,
a ss oc iation , individual, or oth er entity restricted by law
or by t h e FHA a s to distribution s of income - forme d
exc lusively for the purpose of providing housing and r e g ulat ed
as to rents, c harg es, rat e o f return, and operating methods
i n a manner satisfac tory to the FHA .
A cooperative mortgagor is a nonprof it coopera-cive 0 .-m e rs h ip
hous ing corporation approved by FHA . Pe r manent oc c u panc y i s
restricted to t he membe rs , and e lig i bility and transfe rs of
membership are subject t o FHA controls .
An investor - sponsor mo r tgag or i s a s pecial type of l imi t ed·
distribution mortgagor organized to build or rehabilit ate
a project and transfer it to a cooperative . If the project
is not sold to a coopera tive with in two years after co~ ple tion ,
the investor sp onsor wi ll op erate it as a limite d dist ribution
corpo r at ion, for the purposes a ut h orized .
To live in these l ow rent p r ojects, famili e s mu st be making
less than $ 5,250 per year . It should be noted that these
- income limitations do not apply to re gular 221 housing .
This is a maximum income limitation which va rie s by family
s iz e . There is no absolute minimum but a minimum n e t i n come
a ft e r t a xe s and obli~a t i ons, whi ch v aries by the type of
a pa r tment involv ed and the types of oblig ations out s t a nding ,
is required . ·
P ri o rities are given to families c e rtified by U . R . A : a s
d i sp laced by g overnment action . For individua l s t o be
e l i g i bl e , they a lso mu s t h a ve suff i c i e nt f ina nc i al c apa city
a n d be b l ood - re l ated ( e xcep t f or p e rsons over 62 or -che
handi c app e d ). Th e r e are no mini mum income l i mits, but each
f amily must pass a credit check to show they can .afford the
housing .
/ v
�Page 4. ·
Pr ese nt Uti li zation :
A t ot a l of 16 p ro je cts , p rov idi ng 2,071 u nit s hav e bee n
bu ilt, a re under const ruct i on, or i n p l anning i n ~etrop ol itan
Atla nta . Those proje c ts, statu s and rental rang es and
income limita tions f oll ow:
Wheat Stre et Ga rd ens
323 I rwin Street , N. E.
Sp ons or : Church Homes, Inc. ( Pri va t e , n onp ro fit)
2Bo u n i t s - $2, 975,000 - Op ened 196 5
Rent a l Housing
Income Limi t s: 2 person s - $5 , 650
6 , 650
3 & 4
5 & 6
All 2 bedroom apartment s, unfu r nis hed, ligh t , ga s a n d
t eleph one a ddi t i ona l .
$69 . 50 mont h
Rents : Up s tai rs
Downsta r is - 72 , 50 month
All en Temp l e Apartme nts


11 Allen Templ e Court , N.W.
Sp ons or : All en Temp le Chu rch ( Priva te , n onp ro f it )
150 units (10 bu i ldi ngs, 15 units ea ch ) , finan c ing not
y et clo sed - Op ened Dec emb e r, 1965 .
Rental Housing
2 person s
I nc ome Limits:
$5 , 250
6 , 650
3 & 4
5 & 6
7 .or more
8 , 500
2 and 3 b e dro om apa rtment s , unfu r n i she d . Light, gas a nd.
t eleph one a dditiona l.
Rents :
2 bedroom on t er rac e
$62 . 00 month
2 bed r oom 1st and 2nd f l.
65 . 00
72 , 50
3 bed room on t erra ce
3 bed room· l st and 2nd f l.
East'wyck Village
2892 Eas t wyck Circle , De c a t u r
Sp ons or: FCH Company, I n c. ( Founda t ion f or Coop e r a t i v e
Hous i ng, Sta nf or d, Conn. ) (P r ivate , nonp rofi t)
6 se ctions, 441 units - $5, 37 3 , 400 - Opened 1965
Coope rative Housi ng
1 p e rson
$4 , 650 (mu s t b e over 62 yea rs)
I ncome Limi ts :
5 , 650
6 , 650
3 & 4
5 & 6
7 or more
J) --
�Page 5,
Eas twyck Village
Furni s hed apartments .
Water , sewerageand garbage are
$3,70 additional .
Payments :
1 ·b8d: oom
$53 . 00 month
2 bedro~
69 . 00 month
2 bedroom , l ½ bath s, basement
3 bedroom
3 be d room, l ½ baths, b asement
4 be drooms, l ½ baths, basement
$79 . 00 mon t h
84 .00
94 . oo
· under Con struction
Allen Temple Apartment s # 2
11 Al len Temple Court, N. W.
Spons or:
Allen Te~p le Church (P riv~ t e, nonprofi t)
225 units, completion early 1967 ·
Rental Hous ing
Same as Allen Temple · Apa rtments # l
I nc ome Limits:
Same as Allen Temple Apartments # 1
Cambri dge Sauare
3061 Oakdale Road, Doraville, Georgia
Sponsor :
FCH Company, Inc.
( Private, · nonprofit)
134 units - complet ion March 1967
124 units - completion September, 1967
Cooperative Housing
Income Limits:
1 person
7 or more
Unfurnished apartments .
addit iona l $3 .70 c harge
$L~, 350 (must be over 62 years)
6, 200
Wa ter, sewerage and garbage are an
1 bedroom
$58 . oo
2 bedroom
69 .00
2 b ed room , l ½ bath , basement
79 .00
3 b e droom
3 bedroom, 1.1 bath basement
4 bedroom, l ½ bath: basement
79 . 00
86 . oo
97 . 00
I n P_anning o r di s cuss i on :
Wheat St re e t Ga rdens
( addi tion)
323 I rwin St r eet, N. E .
Sponsor :
Chur c h Home s, Inc .
( P rivat e , n onp rof it)
240 units in p l a nni n g , construc t ion to s t art spring 1967
( will probably b e mostly 3 bedroom apa rtments )
Rental housing .
Pac;e 6 .
I n Planning or dis cus s i on · continue d
97 unit s in planning , commitment issue d (but, b e c au s e
rent v alue s were t oo low, mi ght be reconsidered), no
con s t ruction plans yet .
Bal lard He i ghts
84 u nit s in planning, no formal application yet
Halyc on
200 units in planning , no formal app lication yet
?a r k Wes t
96 units in planning, no formal application yet
.I -,
, )


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