BUILDING A BETTER NEW YORK FINAL REPORT to Mayor Robert F. Wagner J. Anthony Panuch SPECIAL ADVISER ON HOUSING AND URBAN RENEWAL ■ ot 40MICS. Go l BUILD FOR GROWING NEW YORK CITY In-migrant mirf out-migrant figures me bated on period, 1950 to 1957; 875,000 more white profile moved out of the city than moved in; 295J0O0 more Negroes and Puerto Iticans moved in tlian moved out. All other data as of January I960. A R. FOREST, PIANOSCOPE CORP. N.Y.C. p . ANTHONY PANUCH Special adviser housing ANC URBAN RENEWAL City of new York Office of the Mayor NEW YORK 7. N. Y. 1 March 1960 OFFICES 228 BROADWAY WH 3-3600 Dear Mr. Mayor 1. I submit herewith the report you requested of me on 20 August 1959 which meets the specifics of your directive of that date. It is the result of a comprehensive survey of the policies and programs of the City's agencies responsible for or concerned with housing and urban renewal. It contains recommenda- tions for a comprehensive City policy and program for housing and urban renewal. It includes proposals for organizational realign- ments and suggestions for legislation necessary or desirable to put the recommended program into effect. 2. No other city in the country, to my knowledge, has subjected to independent scrutiny its policies, programs and organization in the sensitive housing field. To this task my staff and I have given our best and most intensive efforts, all of us dedicated to BUILDING A BETTER NEW YORK — the City in which we live and work. 3. With this Final Report I have discharged my mission. There remains only the orderly close-out of our office operations. In this connection I am pleased to report that, despite prepara- tion of the Special Report, RELOCATION IN NEW YORK CITY, and extension of the date for filing this report, we have stayed well within the limits of the $150,000 budget fixed by the Board of Estimate . 4. I am honored that you accorded me this privilege of being of service to you, your colleagues on the Board of^Estimate and to the people of the City of New York. The Honorable Robert F. Wagner Mayor of the City of New York New York 7, New York m MAYOR'S INDEPENDENT SURVEY on HOUSING AND URBAN RENEWAL J. ANTHONY PANUCH, Special Adviser PROFESSIONAL STAFF \V. Bernard Richland General Counsel William J. Dwyer, Jr. Executive Assistant Dean K. Boorman Urban Planning Assistant Meyer M. Kailo Chiej Management Assistant Oscar Kanny Public Information Assistant Lawrence f. Kaplan Chief Research Assistant Robert E. Paid Legal and Legislative Assistant Jacob C. Seidel Editorial Assistant CONSULTANTS Dr. Finest M. Fisher Professor of Urban Land Economics Coin m bia University Dr. Eli Ginzberg Director, Conservation of Human liesources Columbia t 'niversity *Evelyn Panuch Alexander R. Forest Urban Economics Conservation of Human Resources Co ordinator of Production Visual Presentation SECRETARIAT Mary M. Ryan, Executive Secretary Margaret Dwyer, Alma Houben, Dorothy Meredith, Elaine Robbins, Irene Rose, Marjorie Sheridan. Charles Appelman. Confidential Aide Mrs. Panuch has served full-time and without compensation as Production Co-ordinatoi for this report and the Special Report on RELOCATION IN NEW YORK CITY. ACKNOWLEDGMENTS The Special Adviser, while accepting sole re- sponsibility for the contents and recommendations of this report, gratefully acknowledges the coopera- Office o£ the Mayor Deputy Mayor Assistant to the Deputy Mayor Office of City Administrator Budget Director President of the City Council The Comptroller Office of the Borough President of Manhattan President of the Borough of The Bronx President of the Borough of Brooklyn President of the Borough of Queens President of the Borough of Richmond Board of Standards and Appeals Office of the City Construction Co ordinator City Planning Commission Committee on Slum Clearance Commission on Intergroup Relations Department of Buildings Department of City Planning Department of Health Department of Investigation Department of Public Works Department of Real Estate Department of Water Supply, Gas & Electricity Department of Welfare Fire Department Law Department Municipal Reference Library Police Department Tax Department Urban Renewal Board # * # New York City Housing Authority Triborough Bridge and Tunnel Authority New York State Division of Housing Limited-Profit Housing Mortgage Corporation Port of New York Authority Temporary State Commission on Economic Expansion Temporary State Housing Rent Commission U.S. Housing and Home Finance Agency Urban Renewal Administration Allegheny Conference on Community Development, Pittsburgh, Pa. The Association of the Bar of the City of New York Baltimore Urban Renewal and Housing Agency, Baltimore. Md. Building Industry League, Inc. Business and Professional Group— 87th-97th Street Area Central Planning Board of Newark, New Jersey Chelsea Community Council, Inc. Citizens Housing and Planning Council of New York. Inc. Citizens Union City Club of New York Commerce & Industry Association of New York tion and assistance of the heads and staffs of the public agencies, civic and business organizations and of the individuals listed below: Community Service Society Department of City Planning of Chicago, Illinois District of Columbia Redevelopment Land Agency Greater New York Association of Rooming House Operators. Inc. Housing Authority of the City of Asburv Park. New Jersey Hudson Guild Institute for Public Service Lenox Hill Neighborhood Association, In* Mayor's Committee on Harlem Affairs Metropolitan Council on Housing Metropolitan Fair Rent Committee National Association of Housing and Redevelopment Officials Neighborhood Improvement Association of Riverside-Amsterdam Area Property Owners of Greater New York Real Estate Board of New York, Inc. Redevelopment Authority of the City of Philadelphia. Pa. Regional Plan Association Skidmore, Owings & Merrill Social Planning Council of Metropolitan Toronto Two Bridges Neighborhood Council Urban League of Greater New York Women's City Club of New York # # * The Honorable Stanley M. Isaacs, Minority Leadei New York City Council The Honorable Nathan Straus, Former Administrator of the United States Housing Authority- Shirley F. Boden. President Middle Income Housing Corporation Frank Brooks, Brooks, Harvey & Co. Mendes Hershman, Esq. Abraham E. Kazan, President United Housing Foundation Joseph P. McMurrav, Former Commissioner. New York State Division of Housing Eugene J. Morris. Esq., Demov & Morris Frank Mucha, Zone Economist Federal Housing Administration Henry N. Rapaport, Esq.. Former Special Counsel New York City Rent Director, O.P.A. Louis Sachar, President Marshall Management Corporation Morton J. Schussheim, Committee for Economic Development Sidney Z. Searles, Esq., Raphael, Searles. Levin i- Vischi Oscar H. Steiner, President Community Development, Inc., Cleveland, Ohio Robert Szold, Esq., Szold, Brandwen, Meyer v Blumberg Robert C. Weaver, Consultant Ford Foundation Paul Windels, Esq., Louis Winnick, Executive Director Temporary State Commission on Economic Expansion TABLE OF CONTENTS PAGE Summary of Recommendations 6 Introduction <) HOUSING AND URBAN RENEWAL IN NEW YORK CITY Pari i The Power Politics of Urban Renewal 15 ii Essential Elements of the Problem 513 REBUILDING NEW YORK: THE PROGRAMS AND THE AGENCIES g Planning and Zoning 1 1 I New York's Big Building Program j", 5 New Techniques in I 1 ban Renewal (5*5 li Related Programs and Problems 71 CONCLUSIONS AND RECOMMENDATIONS 7 Evaluation of Major Programs and Progress 85 | Housing and Urban Renewal: Correlating the Programs facing 96 Proposed Organization for Housing and Urban Renewal Statement of Functions 112 Organization Chart inside back cover SUMMARY OF RECOMMENDATIONS 1. The City must undertake a vigorous program of desperately needed publicly-aided, privately-owned middle-income housing which will re- develop blighted and deteriorating commercial areas of the City, where the residential tenant relocation problem is insignificant and where the new housing will utilize existing facilities and services. 2. The Board of Estimate on the advice of the Comptroller of the City of New York, as the fiscal adviser of the Board, should adopt and pub- licly announce a uniform rule of tax exemption, applicable for a specified period of time, to all middle-income projects approved as to location and density, on which construction is begun during the period specified. 3. The Board of Estimate should determine the annual housing budget. This budget should reflect the public and publicly-assisted housing to be undertaken in the ensuing year by type, borough, site and rent class. 4. The Board of Estimate should carefully consider the desirability of the City sponsoring State legislation for tax exemption of new housing of all categories along the lines of Chapter 949 of the Eaws of 1920. 5. Take the profit out of slums. 6. Call on the New York delegation in the Congress to join in a bipartisan demand for legislative amendments to the Federal income tax law mak- ing capital gains from slum property subject to tax at the regular rates. 7. The City should consider sponsoring the enactment of legislation to provide for compensation to the small commercial tenant whose busi- ness is uprooted as a result of City redevelopment and who has no adequate remedy in condemnation proceedings. 8. The enormous importance of the housing and urban renewal problems of New York City require a non-political, non-partisan approach to all housing and urban renewal legislation affecting the City. 9. Request the President of the Association of the Bar of the City of New York and the President of the New York County Lawyers Association -6- to designate; as .1 public service, .1 joint panel of tax and condemnation specialists from their memberships to investigate condemnation prac- tices and procedures, and to recommend legislation designed to (1) take the windfall profits out of condemnation: and (2) allocate equitably the economic and social costs entailed for those adversely affected by condemnation and unable to share in its awards. 10. The Citv must adopt new techniques to assimilate its immigrants more effectively. Tim is not a matter ol "welfare". It is a matter of economics and human relations. 1 1. Don'i tear down desperately-needed, structurally-sound tenements which have been recentl) rehabilitated, or whic h the owners are willing to re- habilitate, or which can be rehabilitated with available aids. 12. Mobilize the lull managerial resources and know-how of the New York City Housing Authority in an all-out chive to conserve and utilize existing structurally-sound housing. 13. Initiate a program to mobilize the Welfare Department's rent dollar in the war against shuns to decongest existing single-room-occupancv buildings and eliminate many slum dwellings. This would give the City an investment instead of the subsidy whic h now goes to the slums. 1 }. The New York delegation in the Congress should press for legislation and appropriate administrative action by the Housing and Home Finance Agenc v and the Department of Defense to finance a massive program ol slum c learance in Puerto Rico. 15. Adopt appropriate zoning amendments to further the City's housing and renewal effort. 16. The Department ol Welfare's responsibility to house and relocate its clients should be gradually phased out and transferred to the Depart- ment of Real F.state. 17. Establish a Housing and Redevelopment Board to take over the func- tions of the Committee on Slum Clearance, and the Urban Renewal Board, the Neighborhood Conservation program, and the functions now exercised by the Comptroller under the Redevelopment Companies Act and the Mitchell-Lama Law. Correlate the housing and urban renewal efforts of all City agencies. ~1 ~ Digitized by the Internet Archive in 2014 https://archive.org/details/buildingbetterneOOnewy INTRODUCTION Scope of My Assignment Interlocking Problems of City Renewal and Tenant Relocation Tackling the Relocation Problem Necessity for a Non-Partisan Approach to Relocation Legislation Consultation with Experts Limited Objectives of this Report -9- INTRODUCTION Scope of my Assignment On August 20, 1959 Mayor Wagner, with the approval of the Board of Estimate, designated me to survey and evaluate the City's policies and pro- grams of housing, slum clearance and urban re- newal. He requested me to develop and submit not later than February 1 . 1 960 a report con- taining: "Specific recommendations for a comprehensive city policy and program for housing and urban renewal, including correlation of the City's func- tions, policies, programs, plans and operations in the field of publicly-aided private housing, slum clearance, tenant relocation and neighbor- hood conservation."* Interlocking Problems of City Renewal and Tenant Relocation New York's desperate housing shortage is inex- tricably interlocked with the problem of New York's redevelopment. Heavy in-migration of rural, low-income minorities essential to the City's econ- omy, coupled with lack of living space, creates massive over-crowding. The in-migrants are un- accustomed to city living; crowd into deteriorating neighborhoods, thus accelerating the spread of blight, which is rapidly followed by slum forma- tion. Speculation in slum properties, subsidized by the income tax structure and sparked by the desperate need of the in-migrants for shelter, be- comes a highly profitable business.f * The Mayor's public announcement setting forth the complete details of my assignment appears in full as Annex 1 of this Report. Because of the necessity of preparing the Special Report on Relocation, our time for submission of this report was ex- tended by the Mayor and the Board of Estimate beyond the original target date which had been set when I accepted this assignment. t For an excellent analysis of tax incidence and slum forma- tion, see: "Some Contributions of the Income Tax Law to the Growth and Prevalence of Slums" by Arthur D. Sporn. COLUMBIA LAW REVIEW, November 1959. Slum formation is inexorable and virulent; it can be brought under control only by attacking the causes which create it. So long as slums remain profitable — so long as in-migrants remain unassim- ilated — so long as tenements are permitted to decay unchecked — so long as the low-rent hous- ing supply and new housing construction fall be- hind demand — the problem ^\ill remain. But a major impediment to new residential con- struction is the scarcity of building sites. In New York City, vacant land on which any substantial part of the required new housing could be con- structed does not exist in appreciable quantities, except in Staten Island. The harsh fact is that new housing sites in significant volume can come only from a renewal of blighted areas of the City, al- ready developed. In a City as vast and as overcrowded as New York, a large-scale program of redevelopment means up- rooting the homes, families, small businesses and. if you will, the community institutions of the des- perately poor who live in the slums and blighted neighborhoods. New housing construction of sig- nificant scale, whether subsidized or private, drives them out of their homes. In terms of human val- ues, the problem of relocating these unfortunates becomes the supreme obstacle to any meaningful program of housing and urban renewal.* Tackling the Relocation Problem For years the City had been pushing its public housing and slum clearance program without re- alizing the explosive character of the tensions gen- erated by relocation. In the autumn of 1959 these tensions came to a head in the explosion on the Title I Penn Station South project and renewed * Louis Winnick, former Director of the Division of Research of the Xew York City Planning Department, said in a recent analysis of the Housing and Urban Renewal problem in New York: "Recognizably, a program which seeks to solve the housing and slum problems by a large measure of redevelop- ment must also deal with the awesome and controversial prob- lem of tenant relocation.'' — IO — the perennial agitation for a "central relocation bureau" as a panacea to the problem of relocation. On October (), 1959 the Mayor requested me to give top priority in my survey to the development of a program for tenant relocation which he aptly described as "New York's No. 1 Problem". A special report. RELOCATION IN NEW YORK CITY, was submitted by me to the Mayor on December 15, 1959. The report rejected the idea that a "central relocation bureau" could solve the City's relocation problem which was one of policy rather than Eorm <>l organization. Instead, it emphasized three principles as indispensable to a fair, equitable and humane administration ol relocation in New York City: First: The CitJ must accept responsibility Eoi fair, equitable and uniform treatment of all whose lives and livelihood are adversely affect- ed by the thrust of its sovereign power in eminent domain. Second: As a matter ol sound public policy it makes no difference whether that sovereign power is exercised in the c ause of slum clear- ance, urban renewal or public works. There must be equality before the law for all. Third: Once the se pi ant iples are established by legislation or otherwise, the City Administra- tion must accept responsibility for supervis ing compliance by all agencies responsible for relocation in New York City. The report proposed a comprehensive program ol action designed to put these principles into el lect immediately and to place the administration of tenant relocation on a sound, uniform and city- wide basis. It spelled out the administrative ma- chinery and resources necessary to put the pro- gram into effect. Key to the program was a rec- ommended State law which would enable the Board of Estimate to enact a Bill of Rights for tenants in relocation, fixing schedules of tenant benefits, and providing for the regulation of re- location administration on a city-wide basis. The recommended program was formally adop- ted by the Mayor and the Board of Estimate. It was well received by all segments of the New York press. It was welcomed by civic organiza- tions; neighborhood, community, small business groups, and minority organizations. But despite the commendably prompt action of the City Ad- ministration, the success of the program depends on the enactment of State legislation. For, to be effective, the program must apply to the opera- tions of the New York City Housing Authority, and the Triborough Bridge and Tunnel Author- ity.* This requires State legislation. Necessity for Non-Political, Non-Partisan Approach to Relocation Legislation The New York State Legislature is predomi- nantly Republican, while New York City is over- whelmingly Democratic. It is extremely difficult for legislation introduced by a New York Citv Democrat to be enac ted unless co-sponsored by a Republican member ol the legislature with sub- stantial support from his Republican colleagues. Most housing and urban renewal legislative pro- posals are of vital significance to New York City, and of relatively minor importance to other areas of the State. This is particularly true of the Ten- ant's Bill of Rights which I have suggested for en- actment. The costs of relocation administration on a city-wide basis which the bill proposes will be borne principally by Federal and City funds. The administration of the Hill of Rights will affec t onlx the relocation of inhabitants of New York City. The report on which the proposed bill was based has been favorably received by the Urban Renewal Administration at Washington. I earnestly hope that the Republican and Demo- cratic leadership in the State legislature will agree on a non-partisan and non-political approach to this bill or similar legislation. Passage of the Bill of Rights, or similar legisla- tion which will accomplish its objectives, at this session deserves the vigorous support of Governor Rockefeller and the leadership of both parties in the State legislature. * These two Authorities during the period from January 1, 1954 to October 31, 1959 accounted for 53% of all tenant relocation activities in New York Citv. — 11 — Aside from considerations of justice and equity which alone require its enactment, the Bill of Rights or any similar legislation which will accom- plish its purpose, should be enacted from the long- range enlightened self-interest of the State. • The City is the prime source of State tax rev- enues. • Decent middle-income housing and a vigor- ous program of urban redevelopment for New York City is essential to maintain and progres- sively enhance the economic productivity of its business and industry. Governor Rockefeller's own Task Force on Middle-Income Housing rec- ognized this fact. • The State will share in the increased revenues which will accrue from the City's housing and redevelopment effort. • A significant program of housing and redevelop ment of New York City is not feasible, in my opinion, unless the tenant relocation hardships which it unavoidably entails are ameliorated 1>\ legislation such as I have proposed. Consultation with Experts City Administration Experts In developing the basis for our recommenda- tions, we consulted with the heads and technical experts of all of the City departments and agen- cies in the area of our survey. Chairman Robert Moses and the staff of the Committee on Slum Clearance extended every courtesy and cooperation to my staff and myself. Mr. Moses' personal advice and counsel, based on his vast operating experience in the City Govern- ment, has been invaluable to me. Mr. James Felt, Chairman of the City Plan- ning Commission and Chairman of the Urban Re- newal Board, and the staffs of the Commission and the Board similarly extended to us all courtesies and cooperation. The same has been true of the members and staff of the New York City Housing Authority. Chairman William Reid and his colleagues, Messrs. Robbins and Madigan, were most coopera- tive. They placed the experts and technical person- nel of the Authority at our disposal. The Comptroller of the City of New York, Mr. Lawrence Gerosa, First Deputy Comptroller Louis Cohen, and their technical experts gave freely of their time and advice on the knotty practical problems entailed in the Comptroller's present responsibilities and functions under the Limited-Profit Housing Companies Act and the Redevelopment Companies Act. Experts Outside the Administration Mr. Joseph P. McMurray, a public member of the Committee on Slum Clearance, and former Commissioner of Housing of the State of New York, made himself freely available to me for con- sultation. His counsel and advice, based on long and varied experience in housing at the Federal, State and City levels was sound, impartial and practical. His knowledge of the organization, ad- ministration and interdepartmental relationships in Federal, State and City housing was most useful. The members of the Real Property Law Com- mittee of the Association of the Bar of the City of New York, through the professional courtesy of Mr. Mendes Hershman and Mr. Eugene }. Morris, provided my General Counsel and myself with expert advice on legislative matters of substance and procedure connected with our work. Among the civic groups, the Citizens Housing and Planning Council cooperated fully and made recommendations which have been most useful in the preparation of this report. Less frequently, we consulted with members of the Citizens Union, the City Club of New York, and the Institute for Public Service. University Experts We have had the benefit of consultation on a professional basis with Dr. Eli Ginzberg, Director of Conservation of Human Resources at Columbia University; Dr. Ernest M. Fisher, Professor of Urban Land Economics of the Graduate School of Business at Columbia University; Professor Isador Lubin of Rutgers University; and Dr. Philip M. Hauser. Chairman of the Department of Sociology of the University of Chicago. — 12 — Federal Experts My General Counsel and I have consulted with Mr. Walter Fried, Regional Administrator of the Housing and Home Finance Agency in New York. At the national level we have consulted with Mr. David M. Walker, Commissioner of the Urban Renewal Administration, and with Mr. Norman P. Mason, Administrator of the Housing and Home Finance Agency. Redevelopment Experts in Other Cities We have studied the forms of redevelopment and renewal organization for the cities of Wash- ington, Philadelphia, Chicago. Baltimore and Pittsburgh. Officials of the cognizant agencies con- sulted have been courteous and helpful in pro- viding us with materials and precedents and in freely expressing their views on the feasibility of various types of redevelopment organization. State Experts on Housing Mi. James Win. Gaynor, Commissioner ol the State Division of Housing and his staff were most helpful to us in their disc ussions ol the interrelated goals, policies and administration of State and City puhlic housing and State assisted housing in the middle-income category. Experts on the Relationship of Charter Reform and Urban Renewal I am especially indebted to my old friend, Mr. Paul Windels, Corporation Counsel of the City of New York under the administration of Mayor LaGuardia, and former President of the Regional Plan Association, lor his advice and counsel. Mr. Windels was particularly helpful to me in his analysis of the need for Charter reform and a greater degree of home ride for the City— so indispensable to its ability to plan and sustain a significant urban renewal effort. Limited Objectives of this Report I his report has limited objectives. They follow closely those outlined in a public address by the Mayor on the subject of urban renewal shortly after I had accepted this assignment. What he wanted from me. he said, was my best judgment in three broad areas: 1. How the City should handle the problem ol tenant relocation. 2. To look back at where the City has come from, evaluate where it is now, and to give him some sound advice on what path to take toward the goal we all agree on, modern buildings in a modern city. 3. Whether each and every one of the City*s- existing agencies dealing with housing should he consolidated or whether additional ones should be created. The first of these cpiestions I have answered in my special report on RELOCATION IN NEW YORK CITY. The second is one of housing policy and the third deals with the problem of organiza- tion. The second and third questions are the sub- ject of this report. Organization is a vehicle lor the development, systematic execution and control of policy. How ever, organizations are run by people who may or may not agree on what policy is or should be; or on the best means and methods for the realiza- tion of given objectives. This is true of govern ment as well as industry. Policy conflict occurs and is intensified where the differences in approach reflect deep-seated po- litical or ideological cleavage in the community. In New York City, such cleavage exists on the respective roles ol government and private enter- prise in housing and urban renewal, and on the balance of human and institutional values against what is described as the "public interest". Such a conflict of values can be resolved only by the statesmanship of accommodation; and the compromise by men of good will, working toward a common goal. Failing this, the formulation and administration of a coherent City policy on hous- ing and urban renewal will increasingly become an exercise in frustration. More important, it will be impossible to mobi- li/e the City's enormous resources of brains, vigor and imagination without which its renewal effort will be nothing more than brutum fulmen. - 13- Part 1 THE POWER POLITICS OF URBAN RENEWAL ABCs of "Urban Renewal" Enduring Slums The Urban Revolution Exploding Metropolis Power Stakes in Municipal Reorganization and Urban Renewal Power Vacuum Pressure Group Elites Pressure Groups and City Policy A Case History Part 1 THE POWER POLITICS OF URBAN RENEWAL 'The first duty which is at this time im- posed upon those who direct our affairs is to educate the democracy; to warm its faith if that is possible; to purify its morals: to direct its energies; to substitute a knowledge of business for its blind pro- pensities; to adapt its government to time and place and to modify it in compliance with the occurrences and actors of the age. A new science of politics is indispensable to a new world." Alexis DeTocqleville democracy ix america ABCs of "Urban Renewal" i The term "Urban Renewal" is bewildering to the average citizen. Even the experts do not agree; their pontifications add to the bewilderment of the man in the street.* Social reformers of the 1930 vintage still regard urban renewal as a program of slum clearance to provide decent public housing for the city's low- income groups. The planners and the architects take a more sweeping view. They see the elimina- tion of blighted, unsightly and obsolescent down- town areas as the first step to a well-zoned and * In 1953. Miles Colean wrote in RENEWING OUR CITIES (p. 181) "If . . . efforts to create a more compatible environment are to be effective, men must, first, have reached some general agreement as to the kinds of cities they want and second, have devised suitable legal, political and fiscal means for producing the desired results. At the present time, it is evident that ;i consensus as to what our cities should be does not exist and our mechanisms are either faulty in themselves or are ham- pered in use by a confusion about objectives ..." New York: Twentieth Century Fund (19.'>3). (Emphasis supplied. 1 ) decongested city, with wide streets, and towering, set-back buildings of modern design and controlled density— complete with off-street parking facilities. Some see in urban renewal the hope of better housing lor middle-income people, better schools, less crime and juvenile delinquency, and relief from paralyzing traffic congestion. But urban renewal— to urban economists, city husiness leaders, and the responsible heads of municipal governments— is the vital and indis- pensable condition of sound economic growth, and of municipal solvency. Enduring Slums The seemingly unstoppable spread of slums and blight has confronted the great cities of the nation with chronic financial crisis. The cost of slums is an old story. In terms of municipal services such as police and tire protection, public health and welfare, slum costs run to an average of seven to ten times the tax revenues which the City is able to collect from them. In New York City, the net cost to the municipality of its slums and over- crowded dwellings— over and above the tax rev- enues they produce— dwarfs that of any other city in the nation. In the reform era of the 1930s, public housing was generally regarded as the total answer to slum clearance and slum prevention. Today— after twenty years of public housing, and the expendi- ture of nearly S2 billions— almost a half-million persons of low income have decent homes. But the public housing program has not made any appre- ciable dent in the number of slum dwellings. New - 16- THE FIGHT AGAINST SLUMS.. QUALITATIVE PROGRESS QUANTITATIVE STALEMATE 324,000 *** 56,000 NnS ADDEo ^ CONVERS/o^ THE 1950 HO USING SITUATION 430,000 NEW UNITS NEEDED 980 000 100,000 .OVERCROWDED. tntn BnD : SUBSTANDARD + , TAK|nARD + NEEDED FOR 5TANDAKD t« v/ArAKirv 50,000 UNITS UNITS _ UNITS 3* VACANCY RESERVE A. R. FOREST, PLANOSCOPE CORP. N Y C. 430,000 UNITS STILL NEEDED I960 (1) The 256,000 net gain ovar the past decade was offset by increased household formations, newly created substandard units, additional overcrowded standard units, and units required for 3% vacancy reserve. (2) Estimated by New York City Department of City Planning as of January 1960. More current data will be available when the 1960 Census of Housing is completed. buildings go up— old ones deteriorate. The cycle of decay goes on. Even before World War II was over, the urgent need for a different type of assault on urban slums was recognized. The new approach was designed to eliminate their cause— deterioration of prime residential neighborhoods through the spread ol blight— by combined action of public housing and private building. John H. Blandford, wartime head of the National Housing Agency, in his testi- mony before the 79th Congress urged that ". . . government aid should be extended toward re- ducing the cost of acquiring and clearing our vast blighted areas, in order that redevelopment of the surface . . . may be accompanied by a large vol- ume of privately financed investment." This was the predominant view of both political parties in the Congress. The late Senator Robert A. Taft joined with the late Senator Robert F. Wagner to provide the driving force behind the Taft Wagner-Kllender bill, whic h became the Na- tional Housing Act of 1919. Title I of that law— coupled with the ability, imagination and driving force of Robert Moses— generated a large volume of private investment which gave New York City the most massive Title I slum clearance program ol any < itv in the nation. Hut, despite powerful assistance from the public housing program, Title I has been unable to rid our city of its slums. The Urban Revolution Dining and after World War II the face of the nation, and its economy, ( hanged radically- inevitable result of potent forces corollary to war. Enormous expansion of the economy, lor war purposes, concentrated the major portion of the nation's population in its metropolitan areas. The pace of that wartime expansion was main- tained in the postwar period under the policy of the Full Employment Act of 1946. Purchasing power of the dollar in the period 1947-1957 was reduced by forty per cent, result of a national fiscal policy powered by heavy expenditures for Free World Defense. A technological revolution of unprecedented proportions triggered sweeping social changes. As the population in the great cities of America in- creased in tidal-wave proportions, its composition ( hanged. There was a massive in-migration of low- income minorities of rural origin. Blight swept the cities' good neighborhoods as slum-speculators reaped a bonanza by herding the newcomers into rat infested, vermin ridden quarters; one family— and often more— to a single room. There was an exodus of middle-income families to the suburbs. In our overcrowded city, where low-income minorities fight desperately lor living space in its blighted neighborhoods, slum-formation has steadily increased. What had appeared to be a manageable problem in the 1930s has assumed staggering proportions in the 1 960s in congested New York City— a city almost as large as Philadel- phia, Chicago and Los Angeles combined. Exploding Metropolis The American urban revolution has all but overwhelmed the charter powers and fiscal capabili- ties ol the great c ities of the nation to cope with the awesome problems of the Metropolitan Age.* The ability ol the city to survive as a viable political entity has become a problem inseparable from that of its economic survival. The phenomena of the "exploding metropolis" have- absorbed the attention and study of sociolo- gists, political scientists, experts on municipal administration, demographers and economists.! Their work in turn has activated political and social reform agitation by social engineers, journalists and pressure groups. The cumulative result has been a proliferation ol numerous and conflicting ideologies on the causes ol our great cities' plight, and what should be done about it. * The new urbanism, according to Professor Alvin Hansen, will "throw up economic, fiscal and soc ial problems of which we have scarcely yet caught a glimmer." Committee for Econom- ic Development, PROBLEMS OF UNITED STATES DE- VELOPMENT, Vol. 1. Jan. 1958, page 326. f The most important of these is the New Vork Metropolitan Region Study, under the direction of Dr. Raymond Vernon, financed jointly l>\ the foul Foundation and the Rockefeller Brothers Fund. - 1 7 - Power Stakes in Municipal Reorganization and Urban Renewal The success of any urban redevelopment effort depends on the legal powers of the city; the fiscal resources available to it for the purpose; the effi- ciency of its policy and administrative machinery; and the ability of its leadership to arouse and sustain citizen support of and active participation in the effort. The weaknesses of sprawling city governments have always made them vulnerable to outside forces seeking control in the guise of reform. But the pressures of the urban revolution have given such movements an impetus which they never had before. Ideological attack on city governments usually follows one or both of two lines: orthodox reform, and regional reorganization. Orthodox reformers claim that city governments, as presently consti- tuted, can do little more than ordinary "house- keeping"; that they cannot plan for the future, let alone tackle the overwhelming problems of urban renewal. Conservatives among the re- formers usually demand drastic city charter revision, and a "Strong Mayor" type of city gov- ernment, with power concentrated in the Mayor, and with a clear separation of powers between its Executive and Legislative branches. Regionalists call for stronger medicine. They hold that municipal government is obsolete; must give way to some form of regional government- able to make policy decisions about the metro- politan region's transportation network, its broad pattern of land use, its common recreational facili- ties, the redevelopment of its blighted sections, the control of water pollution, air contamination and the like. This approach— ignoring what its proponents re- gard as "inconsequential" details such as State- lines, constitutional limitations and municipal charters— is succinctly summarized in a recent pamphlet, Metropolis Against Itself: "The system of representation of indi- vidual citizens looking directly to one small government or no government at all— will have to be replaced by a system which uses parties, pressure groups, pro- fessional politicians and legislators elected on a regional basis— in short by a modern democratic system."* Power Vacuum Both movements— orthodox and regional— are on sound grounds in agitating for city government reorganization. The harsh fact is that the cities of America are not only prisoners of the American urban revolution, but at the mercy of their state legislatures. They must cope with the dynamism of Twentieth Century technology, and a national economy powered by the profit motive— neither of which has any regard for state boundaries or city limits. They must also struggle to survive as viable municipal entities, despite their archaic govern- ment structures, and despite the fact that they are rendered all but impotent because prime sources of revenue are pre-empted by state governments. Finally, it is the state legislatures which determine what powers of self-rtde the cities receive. Aggravating the effect of power concentration in the state legislatures is the fact that in most great cities of the nation the traditional two-party political system— supposed bulwark of American democracy— is inoperative. In New York City, due to the fact that the Democratic Party has had no strong opposition organized on conventional political party lines, the power vacuum has been filled by pressure groups. The new pressure group system of politics operates across conventional party lines.f *A paper by Robert C. Wood, Assistant Professor of Political Science. Massachusetts Institute of Technology, published by the Area Development Committee of the Committee for Eco- nomic Development. The introduction to the paper states that its publication does not necessarily constitute endorsement of its content by the Committee for Economic Development, the Board of Trustees, the Area Development Committee or any member of the staff or officer of the Committee for Economic- Development. f For a discussion of the activities of pressure groups see MAJOR ECONOMIC GROUPS AND NATIONAL POLICY, The American Round Table: Peoples Capitalism: Part III sponsored by the University of Chicago and the Advertising Counsil. - 18- Pressure Group Elites In New York the number, composition and va- riety of pressure groups is infinite. Any group that has a grievance, an articulate leader, some good organizers, and an adequate supply of sub- was tokens can picket the Mayor at City Hall. At any public meeting of the Board of Estimate, it can vociferously exercise the constitutional "right of petition" on the Mayor and his colleagues of the Board. But the pressure groups operating in the inter- related fields of city government reorganization, city planning, housing and urban renewal are for the most part institutionalized^ and have a long political trajectory. They fall into these major categories: • Relocation (.roups which resist urban renewal because of the hardships of relocation, destruc- tion of neighborhoods and existing community institutions.* • Property interests which stand to gain or lose by urban renewal, subsidized housing, rent control, and the like. • Social Reformers who look oh urban renewal, slum ( learance and public housing as the instru- mentalities for effecting social change. • Good Government Groups which see in the need for urban renewal an opportunity for re- organization of the City Government by sweep- ing charter revision. • Regionalists who advocate the merger of the City with municipalities beyond its borders into a new regional political entity. • Political Insurgents who seek through urban renewal and slum clearance to atomize existing communities and neighborhoods in order to change the popular base of political party power in given political districts. * "The illusion exists that the way to get rid of slums is to tear them down with little or no concern about the people who live in them . . . The housing reformer who should be a protector of minorities has been numbed into acquiescence l)\ the momentum of the very reforms he himself launched. Having made slum clearance a goal, he now finds it hard to condemn it as an evil." Charles Abrams in TWO THIRDS OF A NATION by Nathan Straus, pages 211-212. • Promoters of urban renewal "planning" who seek to influence the policies of the appointive officials of the City in charge of its machinery of zoning and planning to determine the future use of the City's land. • Allied groups in and out of the City Govern- ment whose purpose is to gain control of the apparatus by which Federal, State and City housing and redevelopment policy is made and subsidies are allocated and administered. Pressure Groups and City Policy There is nothing legally or politically wrong in the existence, organization, or operation of eco- nomic or ideological pressure groups in the power arena.* They have been a part of our political landscape for a long lime. In his famous Federalist No. 57, Madison— regarded by many as the Father of the United States Constitution— wrote that the "regulation of these various and interfering inter- ests forms the principal task of modern legislation and involves the spirit of party and faction in the necessary and ordinary operations of the govern- ment." lint what was easy for a government to regulate in an age of Eighteenth Century individualism is not true of a modern mass-democracy.f Twenti- eth Century mass communication techniques, and the immense complexity of modern municipal administration have made the pressure groups far less susceptible "to the ordinary operations of the government" than were the "factions" of Madi- son's daw * Harold Lasswell in his POLITICS: WHO GETS WHAT, WHEN, HOW describes the study of politics as the "study of influence and the influential." He defines the "influential" as those "who get the most of what there is to get." "Available values," he continues, "may be classified as deference, income, safety. Those who get the most are elite; the rest are mass." f "Propaganda is as essential a function of mass democracy as advertising of mass production . . . the principal qualification of the leader is no longer his capacity to reason correctly on political or economic issues, or even his capacity to choose the best experts to reason for him, but a good public face, a con- vincing voice, a sympathetic fireside manner on the radio; and these qualities are built up for him by his publicity agents." THE NEW SOCIETY by Edward Hallett Carr, page C>8, Beacon Press Boston, Massachusetts. - 19- New York City— with its great metropolitan dailies and its concentration of mass media of communication— is an ideal market for the dis- semination of ideologies on municipal reform and urban renewal, and for the engineering of their acceptance through what is known as "operative public opinion". Pressure groups, despite and because of the fact that they operate across conventional political party lines, must be taken into account as a power factor at any level and in any branch of American government. This is particularly true of emotion- ally charged issues which have been made the sub- ject of violent public controversy. Even the judici- ary is not immune.* RELOCATION, PUBLIC and PUBLICLY- AIDED HOUSING, SLUM CLEARANCE and URBAN RENEWAL are highly controversial and emotionally charged issues in New York City. At the municipal level of government they present a continuing and unresolved ideological conflict. f This conflict involves the social ends of housing and renewal policy, and control of the policy ma- chinery for its realization. Few of the issues in- volved are of the black or white, right or wrong category which their respective advocates claim them to be. All of them are enormously complex and entail value judgments of crucial significance to the City's political stability and fiscal solvency In the mixed economy of housing which exists in New York City— where heavy private invest- ment is indispensable to the success of any urban renewal program— they can be resolved only by * In his famous dissent in the Northern Securities case, as long ago as 1903, Mr. Justice Holmes said: "Great cases like hard cases make bad law. For great cases are called great not by reason of their real importance in shaping the law of the future but because of some accident of immediate over- whelming interest which appeals to the feelings and distorts the judgment. These immediate interests exercise a kind of hydraulic pressure which makes what previously was clear seem doubtful, and before which even well-settled principles of law will bend." 193 U, S. 197, 400. t This is similar to the perennial controversy over the ideo- logical objectives of and administrative control over foreign economic aid, at the national level. For a description of the impact of ideological pressure groups on the development of national policies and programs in foreign economic aid, see my article, "A Businessman's Philosophy for Foreign Affairs", HARVARD BUSINESS REVIEW, March-April 1957. the statesmanship of rational accommodation, good will, and a spirit of compromise in a com- bined effort to achieve a common goal. A Case History My assignment came at a time when the Com- mittee on Slum Clearance, an agency of the Board of Estimate, was the target of violent attack. On its face the controversy involved a dispute over the policies and methods of operation of Mr. Robert Moses, Chairman of the Committee and for a quarter-century a towering figure in the New York City Administration. It raised the issue whether the Title I program should be under the control of a Chairman who could not possibly denote his undivided time and energy to its direc- tion and control.* On its face the controversy posed the issue of the feasibility of administering so huge a program with a part-time staff borrowed from other agen- cies under Chairman Moses' direction and control, such as the Triborough Bridge and Tunnel Au- thority. On its face the controversy questioned the pro- priety of Vice Chairman Thomas J. Shanahan's presence on the Committee. Mr. Shanahan was not a member of the City Administration at that time.f These and others were the surface issues in the furious controversy over Title I— all apparently raised pro bono publico. But the subsurface issues involved basic differences in ideology on the re- spective roles of government and private enter- prise in urban renewal, control of the policy and administrative machinery of urban renewal, and— * Mr. Moses is C hairman of the Committee on Slum Clearance, City Parks Commissioner, City Construction Co-ordifrator, Chairman of the Triborongh Bridge and Tunnel Authority and Chairman of the New York State Power Authority, among others. fAs originally conceived by Mr. Moses, the Committee was to include in addition to himself as City Construction Co- ordinator, the following members ex-offtcio: Chairman, City Planning Commission; a member of the New York City Hous- ing Authority; the Commissioner of Real Estate; the Corpora- tion Counsel; Commissioner of Buildings; and the Chief En- gineer of the Board of Estimate. Mr. Shanahan became a member of the Committee at the time he was Vice Chairman of the New York City Housing Authority. 20 most important— control of the flow ol Federal, State and Cit\ subsidies into the City's publicly- aided housing and urban renewal programs. An- other basic issue was whether a "master plan" should determine the renewal and development ol a city as huge and complex as New York. It was in this setting, intensified by pressure- group politics, that the Mayor (ailed me in to survey the housing and urban renewal scene, to give him a "situation estimate" and to propose a do-able program of action whi< h would correlate the City's policies, programs and operations in the housing field.* I had illusions as to the difficulties of the task confronting me. From long experience in the reorganization ol corporations and government departments here and abroad, I have found that organizational forms are of minor importance compared with the calibre, quality and ability ol the men who run them— and their willingness to (ooperate towards a common end. I knew that any reorganization program I might propose to the Mayor would be successful <>nl\ to the extent that the department and agency heads affected bv it accepted it and were willing to make \ an expert in administration. He has his appropriation, he has his staff, he has his mandate, and thai carries with it a free- hand in operation. "I want him to come hack and tell us here whethei the assumption by the city of the entire burden of relocation will be of any help — I want him to tell me whether each and every one of our existing agencies dealing with hous- ing should be retained, or should (they) be consolidated — or, additional ones should be created. "I want him to look back at where we ha\e come from. evaluate where we are now, and give us some sound advice on what path to take toward the goal we all agree on, modern buildings in a modern cit\." Address to the Broadway Association on the subject of Urban Renewal, October 27, 1 9.59. Chairman of the City Planning Commission. My hope was to develop a plan acceptable to both. W hether f could have done so is academic. Events beyond my control made such a solution impos- sible. From the very outset ol my assignment. I was urged In \. ii ions civic groups to recommend to the Mayoi the unification and consolidation into ,t new or existing City agency or department all agencies dealing with all aspects of slum clearance, public housing, publicly-aided private housing, urban renewal and tenant relocation. To anyone familiar with the myriad complexities of the op- erations, sitt h "unification" proposals of widely dissimilar functions could not be taken seriously. Even il the best managerial talent in the nation could be recruited at compensation arrangements comparable to that of private industry, such a pro- posed mammoth super-bureaucracy would develop administrative elephantiasis immediately. As- suming that the State legislation necessary to bring such an agency into being could be enacted, it would be unable to remedy structural defects of power in the City's form ol government, which can be cured only by sweeping charter revision. Nevertheless, the agitation for "unification" by pressure groups, combined with a continuance ol press attacks on the Committee on Slum Clear- ance, brought about the decision of Mr. Moses to withdraw horn the held of housing, slum clear- ance .ind urban renewal. Shortly thereafter, Mr. Shan, than. Vice Chairman of the Committee on Slum Clearance, indicated his intent to take similar action, contingent on Mr. Moses' resignation as ( Chairman. Most ol the civic groups urging the organization of a mammoth super-bin cam racy advocated that it be put under the direction of Mr. Felt. To my knowledge. Mr. Felt was not a party to or in sympathy with this campaign. My correspondence on these matters with Messrs. Moses, Shanahan and Felt follows. It is self-ex- planatory . — 21 — GEORGE E. SPARGO Assistant To Chairman WILLIAM S. LEBWOHL Counsel SAMUEL BROOKS Director CITY OF NEW YORK OFFICE OF COMMITTEE ON SLUM CLEARANCE RANDALL'S ISLAND NEW YORK 35, N. Y. Telephone Trafalgar 6-9700 January 28, 1960 MEMBERS ROBERT MOSES, CHAIRMAN City Construction Co-Ordinator THOMAS J. SHANAHAN. Vice-Chairman JOHN D BUTT J. CLARENCE DAVIES. JR. Commissioner, department of Real Estate JAMES FELT Chairman, City Planning Commission JOSEPH P. McMURRAY PETER J. REIDY Commissioner. Department of Buildings JACK I. STRAUS Mr. J. Anthony Panuch Special Advisor to the Mayor Housing and Urban Renewal 225 Broadway New York 7, N. Y. Dear Mr. Panuch: Just to be sure you understand my position, I want to repeat what has already been expressed to you several times in the past. The Slum Clearance Committee has done what it was originally estab- lished to do, namely enable New York City in the face of enormous difficulties and obstacles to take full advantage of Title One. It has finished the job for which it was formed, the job of putting an active program into execution under the Federal Housing Act of 1949. The time has apparently come when the functions of the Committee should be turned over to some other agency in the regular City organization. The program we have established is by far the largest and most vigorous under way anywhere in the United States. We have accomplished more to date in terms of actual construction than all of the other cities put together. Our last Progress Report proves this. Pressure is, I know, directed toward unification, consolida- tion and centralization of housing activities and sium clearance in all its phases. We shall be happy to discuss in advance arrangements for the transfer of the headquarters, work and staff not loaned by Tri- borough and the Co-ordinator office to some central or other agency. The transition to which I have referred on many occasions should be brought about with the least inconvenience. Mr. J. Anthony Panuch - 2 - January 28, 1960 As to firmly establishing Jamaica Track, the largest middle income cooperative in contemplation which is under the City Construction Co-ordinator, I believe it may be possible to do this before your reorgan- ization and consolidation becomes effective, so that others can carry it to completion from this point. I am writing this as an individual and on behalf of volunteer members of the staff and my Triborough associates who have cooperated by giving space and other facilities. Our position is definite and unequiv- ocal. You may, however, wish to discuss the matter further with other members of the Slum Clearance Committee who may have in mind retain- ing the Committee under other auspices with some other Chairman, staff and locale. Sincerely, - 23- 8 February 1960 Dear Mr. Chairman: 1. I have not formally acknowledged your letter of 28 January because I had hoped to be able to induce you to reconsider, or at least modify, your decision. At our luncheon of last Wednesday you convinced me that your position is definite and unequivocal. Accordingly, I am obliged to alter certain basic assumptions on which I had hoped to base my final report to the Mayor. 2. It is true that pressure has been and is being applied "toward unification, consolidation and centralization of housing activities and slum clearance in all its phases". But the Mayor, to whom I am solely accountable, would not have designated me for this task if he had any doubt of my ability effectively to deal with such pressure. On the general subject of unification, I think you will enjoy the enclosed poem entitled The Unification of the Gods. This opus was sent to me by a former Pentagon colleague who has been involved in an unsuccessful twelve-year effort to find his way around the labyrinth of the Defense Department's "unification". 3. I am sorry I was unable to persuade you to reconsider. I believe your retirement from New York's housing program is a loss to the City which even the most violent of your critics will regret. I greatly appreciate the full cooperation which you and your associates have given me and my staff. Beyond this, I am indebted to you for the wise counsel you made so freely available to me out of your vast experience. 4. I shall reproduce your letter and this reply in my report to the Mayor. Faithfully, (s) J. Anthony Panuch The Honorable Robert Moses, Chairman Office of Committee on Slum Clearance Randall's Island New York 35, New York -24- EDITORIAL The Unification of the Gods /'/' was hound to happen sooner or later. That Greek master of knowledge on all subjects, universally popular commentator, awesomely prolific writer, has pointed his lance at the Defense Department. His name: Anonymous (pen name Anon.' His observation: I Wa) up on the heights of Olympus In the era before time began Three Gods who were quite independent Ruled over the creatures and man. Now one had control of the oceans The fish of the sea and the wave He ruled in his watery kingdom The sailors and seamen so brave. Another was master of heavens The clouds and the stars and the sky The sun and the moon and the planets And all of the creatures that fly. The third on the earth was the ruler, Of mountains, and deserts of sand. Of cities, and forests, and vineyards. And everything else on the land. Each one to his own was the master An so for an aeon of time The earth and the sky and the oceans All functioned in heavenly rhyme. II But just as it is with we humans So it was with the immortal brain They had to improve on the system And so they began to complain: "Just mark you, we have triplication! It's useless, it's wasteful, and worse We don't have our true roles and missions Agreed on in chapter and verse." "We're wasting the worshippers' tribute, By bureaucracy's tape we are tied We'll have central procurement of nectar We'll be much better off unified." "One robe of a uniform fabric, A garland of single design. Ambrosia we singly will manage And no one will get out of line." "The Joint Chiefs of Status they'll call us A body of power supreme In cooperation we'll govern A truly Utopian dream." Reprinted by permission, III Alas and alack for the hopefuls For even the Gods can be wrong The outcome of unification Was something quite less than a song. "Just who will procure all the nectar? And how will he be reimbursed? What color the robe and the garland?" Each one said that his should be first. " Just how big a lake is an ocean? Are frogs of the land or the seas? Are seagulls of air or of water? What of birds when they nest in the trees.' And what is my share of the tribute? My Scribe always tells me I'm broke. There's so much more air than there's water And the land is so small it's a joke." And so not a thing was decided They all went around in a loop The Joint Chiefs of Status were headless And too many cooks spoil the soup. IV The Goddess of Discord is with us She'll be there till the end of all time Tis folly to simply ignore her Whatever the region or clime. Since Cain had a fight with his brother Since the Gods disagreed o'er the Ring To a just and impartial tribunal Our squabbles we've found we must bring. Democracy's tenets are noble And for them our fathers have died, Yet ever there must be a leader Whose function it is to decide. In all of our human endeavor Our strength is the way we've combined Each man makes his own contribution With the skill of his hands and his mind. We still would be living in treetops And all of our gains would be loss If somehow we hadn't discovered That someone has got to be boss! VRMED FORCES MANAGEMEN I magazine February 4, I960 FEB 5 1960 Mr. J. Anthony Panuch Special Advisor to the Mayor Housing and Urban Renewal 225 Broadway New York 7, New York Dear Mr. Panuch: Mr. Moses has been kind enough to permit me to read copy of his letter to you under date of January 28, in which he indicates his desire to relinquish his leadership of the work of the Slum Clearance Committee . You are, no doubt, aware of the fact that my affiliation with the Committee during the past several years, and particularly during the past year, is only because of my great regard for Mr. Moses, and our mutual desire to stand together against those who chose to belittle the work which the Committee was performing. Therefore, in the light of the Chairman's decision, I feel it incumbent upon me to make my position clear, and advise you herewith, for inclusion in your report to the Mayor, that my resignation will be tendered for concurrent action on that of Mr. Moses. TJS:H S February 1960 Dear Mr. Shanahan: 1. I have yours of 4 February referring to Mr. Moses' letter to roe of 28 January. I delayed a formal letter until after a face-to-face meeting with him convinced me that his decision is irrevocable. 2. I am aware of your great regard and admiration for Mr. Moses; and I understand your desire to stand with him against those who choose to belittle the work of the Slum Clearance Committee under his Chairmanship . 3. In accordance with your request, I shall reproduce your letter and this reply in my report to the Mayor. Faithfully, (s) J. Anthony Panuch Mr. Thomas J. Shanahan, President Federation Bank and Trust Company 10 Columbus Circle New York 19, New York -27- 8 February 1960 Dear Jack: 1. Considerable pressure has been put upon me by people in and out of the City government, to recommend to the Mayor the creation of a massive super-bureaucracy — under your control and direction — which would consolidate all of the City's planning, zoning, housing, slum clearance, relocation and urban renewal functions . 2. I know that, as a dedicated public servant and a man of integrity, you have no connection with this campaign. Further- more, I think we are both agreed that if any man living could operate such a super-bureaucracy, it would not be in the best interests of the City for me to recommend its creation. Nor could the necessary enabling State legislation be enacted if I did so. 3. Nevertheless, yesterday in the 7 February issue of the LONG ISLAND PRESS, there appeared a "dope story" purporting to be based on "inside information" that my report to the Mayor is expected to set up such a super-bureaucracy in the City Planning Commission, of which you are Chairman. 4. In the circumstances, I wish you would put down on one page and in your own words — what you told me when you visited me at home last Saturday. 5. With your consent, I shall include this letter and your reply in my final report to the Mayor. Faithfully, (s) J. Anthony Panuch The Honorable James Felt, Chairman City Planning Commission 2 Lafayette Street New York 7, New York -28- Around City Hall City Planning Commission May Take on New Powers By FRANK J. .MAC MASTER The upcoming report of- J. Anthony Panuch, special ad- visor to Mayor Wagner on housing and uroan renewal, is expected to contain recom- mendations which will make the City Planning Commission the most powerful group in the city administration. Insiders say the report will call for a complete reorganiza- tion and expansion of the plan- ning body. It will incorporate new zoning proposals aimed at saving many areas of the city from deterioration and overcrowding. High on the list of Panuch's recommendations, it is report- ed, will he proposals to tie up all housing problems in one big package and hand them over to the City Planning Com- mission for administration. As spelled out, this is con- sidered to mean the abolition bf the Mayor's Committee on Slum Clearance, the Urban Re- newal Board and the Neigh- borhood Conservation " Com- mission. Legislative action by both the city and the state will be needed to put the changes to. be proposed by Panuch into effect. Mayor Wagner plans to call in his legal advisors, legislative experts and bill drafters to put the proposals into effect short- ly after he receives the Pa- nuch report. The report, incidentally, was scheduled to come out Feb. 1 but will be delayed one month. In an eariler report on re- location, issued Dec. 15, Pa- nuch repeatedly referred to the Feb. 1 deadline for his final, comprehensive report on housing and urban renewal problems. His earlier report called tenant relocation New York's No. 1 problem. Whether it's the city's No. 1 problem or not, Panuch hit the nail on the head when he wrote Mayor Wagner: "What is needed now is fair and uniform treatment for the people on whom the impact of relocation bears heavily — those whose homes, families and businesses must be uproot- ed because of New York's growing needs." • Enclosure with letter of 8 February i960 — /. Anthony Panuch to The Honorable James h JAMES FELT CHAIRMAN FRANCIS J. BLOUSTEIN VICE-CHAIRMAN THE CITY OF NEW YORK CITY PLANNING COMMISSION DEPARTMENT OF CITY PLANNING 2 LAFAYETTE STREET (OPPOSITE MUNICIPAL BUILDING) NEW YORK 7, N. Y. TELEPHONE: WHITEHALL 3-3600 GOODHUE LIVINGSTON, JR. ROBERT MOSES LAWRENCE M. ORTON MICHAEL A. PROVENZANO ACTING CHARLES J. STURLA COMMISSION ERS PAULINE J. MALTER SECRETARY February 10, I960 Mr. J. Anthony Panuch Special Adviser, Housing and Urban Renewal 225 Broadway New York 7, New York Dear Joe: Thanks for your letter of February 8. I welcome the opportunity of re-iterating my views. When I was at your home last Saturday, I said that it seemed in- appropriate for the Chairman of the City Planning Commission to serve as Chairman of the Urban Renewal Board and as a member of the Slum Clearance Committee - that he should not be obliged to wear different hats on different occasions. I believe that interlocking relationships of this type are not to the City's best interests and should not be permitted to continue upon reorganization - even though I have a keen interest and take deep satisfaction in my Urban Renewal Board activities. It is my firm conviction, however, that the Planning Commission must play a key role in overall renewal programming. For this purpose, I would suggest that a Redevelopment Policy Board be formally constituted, responsible to the Mayor and Board of Estimate. It would be an ex- officio Board, consisting of the Chairman of the City Planning Commission and the heads of the other City agencies responsible for housing and redevelopment. The function of the Policy Board should be to prepare annually, for adoption by the Board of Estimate, an overall program of City-wide goals in public and publicly assisted housing and urban renewal together with specific proposals for the allocation by the Board of Estimate of available Federal, State and City resources among the projects em- bodied in the annual program. I am emphatically opposed to the creation of "a massive super- bureaucracy. . . . which would consolidate all of the City's planning, zoning, housing, slum clearance, relocation and urban renewal functions", regardless I of the stature and competence of the person in charge. It would be unwise and even dangerous to place so much power in any one agency. -30- Mr. J. Anthony Panuch -2- February 10, I960 You will recall that I and members of my staff have stated the fore- going views to you and members of your staff at our various meetings. In accordance with your suggestion, you may include your letter and my reply in your final report to the Mayor. Sincerely, - 3 1 - DECADE OF HOUSING 1950-1959 — BY TYPE Per Cent of Total City Construction Per Cent of Total Borough Construction N0MBF.R OF UNITS 22,500 1*500 24,000 7500 1,500 1007. NUMBER 01 UNITS 100* NUMBER Of UNITS Manhattan \ Bronx j Brooklyn Queens Richmond 7,000 1,500 3,000 5,000 Manhattan ! Bronx Brooklyn < Queens | Richmond 30,000 30,000 100% 116,000 | 11,000 74,000 New York City 16,500 5% OF TOTAL NYC CONSTRUCTION New York City 233,500 TOTAL UNITS Manhattan Bronx Brooklyn Queens 59,500 50,000 73,500 128,500 12,500 324,000 22,500 18,500 24,000 7,500 1,500 Manhattan ! Bronx Brooklyn Queens ! Richmond 7:000 1,500 3,000 5,000 Manhattan j Bronx Brooklyn Queens Richmond Figures lounded to nearest Five hundred. A. R. FOREST, PIANOSCOPE CORP N.Y.C. Part 2 ESSENTIAL ELEMENTS OF THE PROBLEM Human and Institutional Values vs the Ideology of Urban Renewal Recognizing the Factors of Feasibility Facing Up to the Causes of Blight and Slum Formation The Need for Modern Zoning Clash of Policy Objectives The Need for Administrative Reorganization -33- Part 2 ESSENTIAL ELEMENTS OF THE PROBLEM Human and Institutional Values vs the Ideology of Urban Renewal A recent essay defines the term "ideology" as "the conversion of ideas into social levers".* We have seen how this has become a force factor in American politics at the national and city levels. City government must learn to balance the impact of this new force for change against the human and institutional values with which it often comes in conflict. Recognizing the Factors of Feasibility Any meaningful effort even to determine a point of departure for a program of housing and urban renewal for a city as vast and complex as New York must carefully consider what is politically, financially, legally and administratively feasible. Uplifting speeches, public debates, calls for dy- namic and imaginative political and civic leader- ship all play an important role in mobilizing pub- lic attention on a problem of vital importance. But Utopian proposals calling on Government to undertake a task which is impossible without the * Daniel Bell in "End of ldeoIog\ in tlte Ti cs/," appearnig in the Winter 1960 COLUMBIA UNIVERSITY FORUM, writes: "The driving force of the old ideologies was a passion for social equality and in the largest sense, freedom. The impul- sions of the new ideologies are economic development and national power . . . And if economic growth requires the whole- sale coercion of a population and the rise of new elites to drive the people, the new representations are justified on the ground that without such coercions economic advance cannot take- place rapidly enough." The ideological commitment to urban renewal in the United States is a similar impulse operating at national and municipal levels of American government. massive support o\ private enterprise are self- defeating rhetoric. For the fact is that we live in a nation where residential construction is largely in private hands: where private builders and institutional investors increase their rate of activity only in response to market opportunities. • It is sheer escapism to believe that builders, mortgage lenders and institutional investors are likely to become philanthropists. • It is equally illusory to expect that the Federal, State and City governments— already burdened with grave fiscal problems— can be persuaded to assume the unlimited costs of urban renewal as an investment in the future. • Legislatures cannot be asked for favors which are not in their power to grant. • Nor will any amount of "master planning", unrelated to the realities and forces of our mar- ket economy mobilize the forces indispensable to urban renewal.* It takes an enormous amount of time and effort to obtain sufficient plottage for a large apartment development at a location which offers a chance of financial success. Besides the obvious barrier of high land costs and the problems of financing con- struction in an inflationary era, there are the unbelievably difficult legal entanglements of title. * During the decade 1950-1959, out of 323.496 housing units con- structed in New York City, privately-owned housing accounted for 72% of total construction: public housing for 23% and publicly-aided, privately-owned housing for onlv r j\ the fact that practicalh every public project— whether it involves arterial highways, public housing, slum clearance, public works or urban renewal— involves clearance ol existing struc- tures, and necessarily reduces the immediately available suppl) ol housing for low -income and middle iiK ome families. • Private, conventionally financed or FHA insured residential building, and in many cases com- mercial construction, also involves clearance of existing structures and reduces the immediately available supply ol housing for low-income and middle-income families. • Only a relatively small portion of slum dwellers who lose their shelter through slum clearance or urban renewal are eligible for, or are willing to go into public housing. -35- • The 'vacancy rate" of standard apartments in the City is inadequate— far below the three per cent deemed necessary to make relocation at the present pace tolerable. The vacancy rate in Man- hattan today is 0.4 per cent. • Over 33,000 families on public assistance are now living in substandard housing. • Roomers in buildings torn down for new con- struction intensify the City's problem of over- crowding by moving in with friends and rela- tives, many of whom already live in substandard housing, thus accelerating the spread of blight. The situation is dramatically illustrated by the fact that some $25 million out of the $64 million allocated by the Welfare Department to its clients for rent is spent for substandard quarters. The New York City Housing Authority reports that seventeen per cent of its tenants are welfare clients. The problem of conserving existing stock in New York City's housing supply is illustrated by a glance at the tabulation of its character. (See opposite page.) Highlights are these: • Old-law tenements, constructed prior to 1901 account for 373,482 dwelling units, of which 220,783 are concentrated in Manhattan. • New-law tenements account for 826,530 dwell- ing units, 218,452 of which are concentrated in Manhattan. • There are about 700 single-room occupancy buildings, the largest proportion of which is in Manhattan. The growth in the number of SRO's is the biggest problem in the spread of blight. • Many Class "B" structures which provide tran- sient accommodations— rooming houses, lodging houses and the like— have been converted to use for family occupancy. These pressures on the existing inventory can- not be alleviated by housing construction on va- cant land. Enough vacant land in New York City, except for the Borough of Richmond, simply does not exist. At the average rate of construction for the past ten years there has been a net addition to the City's housing stock of roughly 25,000 units per year. At this rate, it would take the public, publicly-aided and private sectors of the City's housing effort approximately twenty years to pro- duce the housing it needs NOW, without any pro- vision for an estimated increase of 250,000 house- holds in the next ten years, and without any pro- vision for further deterioration in the housing inventory as it now exists. CHANGES IN THE HOUSING SUPPLY OF NEW YORK CITY BY BOROUGH, 1950-59 Components of Change New York City Manhattan Bronx Brooklyn Queens Richmond New units completed 323,496 59,900 49,581 73,142 128,549 12,324 Units added by conversion 56,075 23,766 5,848 21,290 4,750 421 Total additions 379,571 83,666 55,429 94,432 133,299 12,745 Units demolished 108,250 65,889 13,127 23,913 4,546 775 Units lost by conversion 15,584 8,328 531 5,838 841 46 Total deductions 123,834 74,217 13,658 29,751 5,387 821 Net gain +255,737 +9,449 +41,771 +64,681 + 127,912 + 1 1,924 Note: 1959 data included here are Source: New York City Department preliminary. of City Planning from Department of Buildings data. -36- NUMBER OF BUILDINGS AND DWELLING UNITS IN NEW YORK CITY BY BOROUGH AND BUILDING CLASSIFICATION AS OF JANUARY 1, 1960 ITEM New York City Manhattan Bronx Brooklyn Queens Richmond Class A Old law tenements' 3 47,656 19,012 3,559 23,632 1,246 207 Dwelling units 373,482 229,783 26,71 1 1 10,807 5,369 812 New law tenements 50,637 6,249 10,791 25,260 8,287 50 Dwelling units 826,530 218,452 264,373 259,073 83,561 1,071 Multiple dwellings d 6,698 1,068 1,246 1,945 2,347 92 Dwelling units 454,833 1 17,291 oo,oyo 117 1 QO 1 1 / , 1 Or 1 J 1 ,U j4 i /in l Miscellaneous 6 355 346 7 2 Dwelling units 33,741 33,253 458 30 Converted dwellings' 35,303 5,193 4,729 18,050 6,915 416 Dwelling units 1 42,290 38,089 15,287 64,928 22,479 1,507 Total Class A: buildings 1 40,649 31 ,868 zU, J/j Oo,or4 1 O TO £ i o,/y j / 0/ dwelling units 1 830 876 ATA QAQ U J u , u u o 392,269 552,455 242,463 6,821 Class B Converted dwellings 9 - 1 3,858 7,73 1 484 4,465 1,077 101 Miscellaneous 11 632 395 29 69 119 20 Lodging houses 79 62 1 16 — — Total Class B: buildings 14,569 8,188 514 4,550 1,196 121 Total multiple dwellings (A and B): buildings 155,218 40,056 20,839 73,444 19,991 888 Dwelling units in 1 -family structures 368,908 8,987 29,164 92,997 199,846 37,914 Dwelling units in 2-family structures 383,878 2,014 42,600 196,650 127,438 15,176 Total 1 and 2-family dwelling units 752,786 1 1,001 71,764 289,647 327,284 53,090 Grand Total: dwelling units 2,583,662 647,869 464,033 842,102 569,747 59,91 1 (a) Dwelling units in multi-family structures (3-or-more apartments) are classified either as Class A or Class B. Class A is for permanent occupancy. Class B for transient occupancy, ib) Erected prior to law of 1901. (c) Erected between 1901 and 1929. (d) Erected after multiple dwelling law of 1929. (e) Includes primarily apartment hotels. ra\cr which hung framed in the command station of one of the great American heroes of World War II: ' I.oid, grant me the SERENITY to accept the things I cannot change— the COURAGE to do something about the tilings I can cliange, and the WISDOM to know the difference." -39- Part 3 PLANNING AND ZONING City Planning Commission Department of City Planning Origin Functions of the Commission Applicable Legislation Organization New Zoning Resolution Master Plan: Designation of Urban Renewal Areas Review of Projects Special Programs -41 - Part 3 PLANNING AND ZONING City Planning Commission Department of City Planning Origin The New York City Charter of 1938 established the City Planning Commission as the key instru- mentality for guiding and coordinating all aspects of the City's physical development. The City Charter also established the Depart- ment of City Planning, but assigned it no specific function other than to put it under the Chairman of the City Planning Commission. The Depart- ment acts as the staff arm of the City Planning Commission, and carries out specific planning pro- grams under the direction of the Chairman. As a practical matter it is virtually impossible to delin- eate any clear demarcation between the work of the Department of City Planning as such and its work as a staff arm of the Commission. Functions of the Commission: The three major functions of the Commission are: • Review of all proposed projects prior to then approval by the Board of Estimate. This review is to be made, according to the City Charter, in relation to the Master Plan of the City, which is to be prepared and maintained by the Commis- sion. A Master Plan, which would comprise a blueprint of future desirable public improve- ments and other physical development, has never been fully developed. • Maintenance of the Zoning Resolution, and primary responsibility for initiating changes. This resolution sets limits on land use and on building height, bulk and land coverage. It thus sets development controls on all types of housing and redevelopment projects. • Development of a capital program covering a six-year period, and preparation of the annual City capital budget, based on proposals by the various operating agencies for capital improve- ments within an over-all limit certified by the Mayor. Housing and urban renewal items in the capital budget consist of the City's capital grant contributions for Title I slum clearance-urban renewal projects. Applicable Legislation The City Planning Commission and Depart- ment are guided primarily by the City Charter of 1938. In addition to assigning the functions listed above, the Charter gives the City Planning Com- mission a certain amount of independent authority in that most of its determinations can be overruled only by a three-fourths vote of the Board of Esti- mate. Federal and State laws relating to housing and urban renewal apply to the City Planning Com- mission as follows: • Title I of the Federal Housing Act of 1949, as amended, which governs slum clearance and ur- ban renewal, requires the local governing body -42- to make a finding Eor each project of conformity to the general plan of the locality (defined as a plan prepared by the local planning agency) . Also, there must be a Workable Program, pre- pared by the locality, incorporating city plan- ning programs. • The State enabling act lor slum clearance and urban redevelopment (Section 72k of the Gen- eral Municipal Law) , the Public Housing Law (Section 151), and tin- Limited-Profit Housing Companies Law (Public Housing Law. Section 313) require the City Planning Commission to re- view and hold a public hearing on each project. Projects under General Munic ipal Law Section 72k and Public Housing Law Section '513 can be carried out only with the prior approval of the City Planning Commission. An adverse rul- ing by the Commission in regard to a public housing project can be overridden by a three- fourths vote of the Board of Estimate (Public Housing Law, Section 1")0). • The State enabling acts prov iding lor urban re- newal and open land redevelopment (Sections 72m and 72n of the General Munic ipal Law) require initial site designation by the City Plan- ning Commission following public hearing and separate approvals ol the preliminary and final plans alter public hearings. The Board ol Esti- mate can override the Commission only by a three-fourths vote. Organization The Commission consists of six members ap- pointed by the Mayor lor overlapping eight-year terms, plus the Chief Engineer ol the Board ol Estimate, who serves ex <>Hi< i<>. The Chairman and N ice Chairman are designated by the Mayor. The Chairman serves as head ol the Department of City Planning. The Department has a staff of 174 persons. This Marl is divided into two principal units: The Office of Technical Controls, and the Office of Master Planning. The Office of Technical Controls is responsible lor the mapping and zoning of the City. The Office ol Master Planning is charged with the technical responsibility for preparing a "master plan" for action by the Commission. The Commission is responsible for the develop- ment and adoption, after hearings and continuous modification, ol a master plan of the City. The master plan is to be .1 Eor ward-looking map of de- sirable streets, parks, water and sewer develop- ments, traffic and harbor improvements, public and private utilities, schools, other buildings, and other physical developments — all of which pro- vide lor the growth and welfare of the City. The Commission is also c ustodian of the "c ity map" which establishes streets and grades, and must register all changes authorized by law. Changes in the City map. in the zoning regula- tions, or the filing of a map or plat for the sub- division ol land in general may be effec ted by the approval ol the Commission and a majority vote of the Board ol Estimate or by a three-fourths vote ol the Board ol Estimate in the event of disap- proval of suc h change by the Commission. I he Commission annually prepares the Capital Budget lor projects to be undertaken during the ensuing year. This is clone on the basis of depart- mental recommendations and reports from the Comptroller and the Director ol the Budget. The Board ol Estimate may add to the Capital Budgei submitted by the Commission any item in the Cap- ital Program. It may add to the Capital Budget anv other item not recommended bv the Commission only bv a three-fourths vote. To advise the Plan- ning Commission, there are advisory Planning Boards in each borough, appointed by the respec- tive Borough Presidents for six-year overlapping terms. The De partment ol City Planning also collec ts and maintains comprehensive data on the City's population, economy and physical development. This basic data is used for research studies and by community organizations and business firms. In addition, the Department supplies staff for consultation with City operating agencies, where this is desired. A current example of effective co- operation at the staff level is in the school plan- ning carried on with the Board of Education. -43- New Zoning Resolution The New York City Zoning Resolution, the first comprehensive zoning regulation to be adopted in the nation, was enacted in 1916. The zoning of New York City today is controlled by the same 44- year old law, its text and maps overlaid with no less than 2.500 amendments. In 1950 a major attempt to overhaul the Zoning Ordinance was begun with a survey by a firm of expert consultants, but nothing was done towards putting the survey recommendations into effect. In 1956, the Citv Administration decided on a thorough restudy of the entire zoning problem and authorized the City Planning Commission again to retain expert consultants for the task. Pursuant to this authority, a comprehensive re- vision of the Zoning Ordinance was undertaken by the architectural firm of Yoorhees. Walker. Smith and Smith, working with the Department of City Planning. As modified by the City Planning Com- mission, the new Zoning Resolution is now in the process of being prepared for hearings by the Com- mission and the Board of Estimate. The proposed revision will differ from the pics em ordinance largely in placing greater restrictions on allowable building bulk and density. The 1916 ordinance would permit the building of houses and apartments for a popidation of fifty-five mil- lion, and business structures for a working popula- tion of 250 million. The proposed new ordinance allows development for a future population ol 11.830.000. The Regional Plan Association esti- mates maximum future population at 8,340,000. Master Plan: Designation of Urban Renewal Areas The Department maintains a Master Plan ol Sections of the City Containing Areas Suitable for Development and Redevelopment. This is one of the only two elements of the Master Plan adopted since 1940. (The other adopted element relates to highways.) Additions since 1940 have been largely to allow for individ- ual projects outside the original areas designated lor renewal: except that in April 1959 the scope of the plan was changed to include "deteriorating" as well as "deteriorated" areas as eligible for re- newal. The Division of Land Use Planning of the Office of Master Planning is now delineating pro- posed areas to be marked on the plan under this new category. Review of Projects Staff work on the review of housing and urban renewal projects is coordinated by the Office of Technical Controls. Under existing procedures, this office prepares project summaries Avhich are then circulated among the other sections of the Department. Decisions at the technical level are reached at headquarters meetings of the division heads, prior to submission to the Commission. Special Programs The Department of City Planning has under- taken two special programs in the urban renewal field: Urban Renewal Planning The present Urban Renewal Board developed horn planning studies initiated by the Department of City Planning on the upper West Side of Man- hattan covering an area of twenty blocks from 87th Street to 97th Street, between Central Park West and Amsterdam Avenue. A Federal demonstration grant financed a portion of these studies. The head of the Department of City Planning is also Chair- man of the Urban Renewal Board. Community Renewal Planning The Division of Urban Renewal Planning in the Office of Master Planning envisages development of a program to include a city-wide survey of blight conditions, the development of an over-all plan and program for urban renewal, and the general delineation of project areas, using community areas of roughly 100,000 population as a planning base. The present work, prior to the anticipated receipt of a $1,500,000 three-year Federal planning grant, includes the delineation of the community areas within the City and the completion of a prototype study of the Crown Heights community in Brooklyn. -44- Part 4 NEW YORK'S BIG BUILDING PROGRAM New York City Housing Authority Committee on Slum Clearance Office of the Comptroller New York State Division of Housing Public Housing Purpose of Public Housing Operations Federal Subsidies State Subsidies City Subsidies City No-Cash-Subsidy Public Housing Organization Accomplishments Special Programs Title I Slum Clearance and Urban Redevelopment The Philosophy Applicable Legislation Organization of The Committee on Slum Clearance Operations Program Accomplishments Middle-Income Housing: Publicly-Aided, Privately-Owned Limited Dividend Housing Companies Law Redevelopment Companies Limited-Profit Housing Companies Law Administration of City Mitchell-Lama Administration of State Mitchell-Lama Mortgage Corporation Financing -45- Part 4 NEW YORK'S BIG BUILDING PROGRAM Public Housing The New York City Housing Authority, devel- oper of public housing in the City, was established in 1934. It operates under the provisions of the New York State Public Housing Law. The Au- thority consists of a Chairman, who is appointed by and serves at the pleasure of the Mayor, and two other members appointed by the Mayor for overlapping terms of five years each.* At present. William Reid is Chairman: Ira S. Robbins and Francis V. Madigan are the other members. Purpose of Public Housing According to the statement of policy in the orig- inal United States Housing Act of 1937. the nation pledged its resources to alleviate present and re- curring unemployment, as well as to eliminate slums and provide decent, safe and sanitary dwell- ings for families of low income. The New York State Legislature, in enacting the Public Housing Law in 1939, stated a housing goal in broadened terms. The declared objective of public housing in New York is not only to elimin- ate insanitary and substandard housing and pro- vide housing for persons of low income but is also to eliminate overcrowding, improper planning, ex- cessive land coverage, lack of proper light, air and space, insanitary design and arrangement. These circumstances, declared the Legislature, not only resulted in blight upon the economic value of large areas, and impaired private investments and * The Authority was thus reorganized in 1 ( .).">8. the source of public revenue, but also seriously and adversely affected the health and welfare of the entire community. Covernment-aided low-rent housing develop- ments for low-income families operate at a loss, which is made up by subsidies. Public housing does not operate on an economic basis; it supplies a need which private enterprise admittedly cannot meet. Operations The Authority investigates living conditions and substandard housing in the City and plans housing projects for families of low and middle income. It gives preference for occupancy in its projects to those who are subjected to inadequate, insanitary and dangerous conditions, including serious over- crowding. To finance the development of such housing projects, the Authority enters into contracts with the Federal Government or the State for assistance. It also raises its own funds, with City approval, for this purpose. The Authoritv arranges for the demolition of structures and the clearance of areas in connection with construction of projects based upon its stan- dards. It supervises the design and construction of projects, and manages their operation. It also has the power to rehabilitate existing housing, and to lease, acquire, manage and operate such hous- ing facilities. - 10- Federal Subsidies Under Federal housing legislation, the Public Housing Administration gives financial aid to the Authority in the following form: a contractual guarantee to pay annual ( ash snhsidies to meet an- ticipated deficits incurred in operating a planned Federally-aided low-rent project. This guarantee serves to assure the marketability of bonds issued by the Authority to raise the development hinds needed. Revenue from rents together with the Federal subsidy is sufficient to meet the costs of project operation, including amortization and in- terest costs of the construction loan funds. The amortization period of such loans is forty years. In order for the Housing Authority to qualify lor Federal aid. it must obtain from the City an agreement that, within five years after the construc- tion ol the project for which aid is granted, there lias been or w ill be cleared or rehabilitated a num- bei ol substandard dwelling units throughout the .City equivalent to the number of units in the proposed project. The Public Housing Administration supervises all planning, development and management op- erations of the Authority w ith respec t to Federally- aided projects: audits their financial statements; and approves or disapproves any changes made by the Authority with respect to rents, improvements and other fiscal and managerial practices of the Authority. Such supervision ends when the forty- year development bonds are paid oil and the Fed eral subsidies cease. At that time the projects be- come the sole responsibility of the Authority. l r nder the Federal housing law, starting with the U.S. Housing Act of 1937, and amended per- iodically since, the City is required to grant lull tax exemption for each Federally-aided public housing project. However, the Authority makes payment in lieu of such taxes to the City amount ing to ten per cent of the annual rent income of the project. State Subsidies The State Public Housing Law provides lot bonds to be sold by the State Comptroller to fi- nance the development of municipal slum clear- ance and low-rent public housing projects. As the agent tor the State, its Commissioner of Housing enters into loan and subsidy contracts with the Authority and the City to supply financing for State-aided low-rent public housing projects. Such financing takes the form of one hundred per ceni loans (to cover all costs of site acquisition, slum clearance and construction) plus a cash subsidy (to help maintain the low-rent character of the projects) paid out of the State's annual budget. I'ncler the State housing law (unlike the ar- rangment for Federal subsidies) the City must match the State subsidy on an ecpial basis. Almost all ol the Cit) subsidy is in the form of partial tax exemption granted the project. The necessity for cash subsidies from the City for State-aided pro- jects is brought about as follows: The cost of op- erating a project, which includes retirement of the debt incurred for its development, is affected to a large extent by the cost of land and construction. Such costs in New York City are high. There is a statutory limit on the maximum sub- sidy the Slate c an pa\ to a spec ilic project, amount- ing to a sum ecpial to the largest annual interest charge on Eunds borrowed from the State to fi- nance a project, plus one per cent of the project (<>si. h frequently happens that the partial tax ex- emption granted the project by the City is not sufficient to match in value the actual maximum cash subsidy available from the State. Thus, the balance must be supplied in cash by the City. New York is the only city in the State where local cash subsidies are needed to meet the costs of project operal ion. State-aided low rent public housing projects, by law. must receive real estate tax exemption for a period of fifty years (the period ol amortization of the State loan) on the value of the improve- ments made by the project. The City continues to receive real estate taxes from the project in an amount based upon the assessed valuation ol the project site before it was redeveloped. The valua- tion is frozen at the time the property is acquired by the Authority, but the tax rate is not. Thus, if the City tax rate rises, the project real estate taxes rise accordingly. -47- State loan and subsidy contracts run tor a period of fifty years, after which time — when the loan is retired — State supervision ceases and the project becomes the sole responsibility of the Authority from the standpoint of ownership, management and control. The supervising agency under this program is the State Division of Housing. This Division must approve all actions of the Authority with respect to plans, sites, development, management and ac- counting, including changes and improvements in State-aided projects. New capital loan funds for State-aided public housing construction in the City are no longer available in any substantial amount, and the im- mediate prospect for the State Division of Hous- ing to seek additional authorization for new public construction is not encouraging. Although the State Administration is requesting a small addi- tional subsidy authorization for public housing, which is subject to the approval of the electorate, it is not now seeking any additional authorization for future capital construction funds. The funds of the two supervising agencies (Fed- eral and State) are never mixed or joined in the development of any project. The programs are separate and distinct, and must be kept so by the Authority. City Subsidies In addition to Federally-aided and State-aided low-rent public housing, the Authority has occa- sionally developed similar projects with City sub- sidies alone. Financing of such projects consists of the issuance of Authority bonds, backed by a City guarantee, to defray development costs, to- gether with cash subsidies given by the City on an annual basis to help pay for maintenance and op- eration as well as to retire the indebtedness in- curred by the sale of the bonds. Under this program, the City giants partial tax exemption to the projects on a basis similar to that under the State-aided public housing program. The extent to which the Authority can engage in a City-aided housing program is governed by provisions of the State Constitution and the Local Finance Law. These permit the City to incur an indebtedness for housing beyond its permitted in- debtedness, for an additional amount equivalent to two per cent of its total assessed real estate valua- tion averaged for the most recent five year period. City No-Cash-Subsidy Public Housing The Public Housing Law, under which the Au- thority operates, permits it to issue its own bonds supported by City guarantees for that type of public housing development which requires no cash subsidy. Under such an arrangement, the fi- nancial obligations incurred by the Authority are retired entirely from the rents it receives from such projects, which, accordingly, are set at a high enough rate to retire the indebtedness and to meet other costs. This is the Authority's no-cash-subsidy program, entered into in the postwar years as the Author- ity's contribution to help meet the need of return- ing veterans and others in the lower middle- income group. The City grants partial tax exemp- tion to these developments on a basis similar to those under the State-aided and City-aided low rent public housing programs. Organization The Authority is the largest organization of its kind in the world, employing more than 7.800 persons. The members determine broad policies and establish and direct the Authority's programs. A general manager is responsible to the Authority, advising its members, executing its policies and directives, and supervising and coordinating the activities of seven departments: design, construc- tion, management, legal, finance and audit, per- sonnel, and general services. In addition to the de- partments, there is an Assistant to the Chairman, whose responsibilities include public relations: a Secretary to the Authority: an Intergroup Rela- tions Office; and a Social and Community Services unit. -48- Accomplishments The magnitude of the Authority's operations is illustrated by the following statistics: In the period 1935-1959 inclusive, the Housing Authority com- pleted 1 ()!).()()() apartments accommodating a pop- ulation ol approximately 4 10. 000 in ninety-two large-scale projects. Fifty-one additional projects to accommodate approximately 40.000 more lain- ilies are either under construction or in the plan ning stage. Completion of these will vest in the Authority control over a two-billion-dollar hous- ing complex, accommodating nearly 600,000 men. women and children. — a population almost the size ol Buffalo, the State's second largesl cit\. • Since 1935, the Authority has cleared (>.">.."> '>."> dwelling units on substandard sites. • Admission income limits lot families range from as I it t le as $2,520 pet vcai in some subsidized proj- ects to $9,036 per year in some no-cash-subsidy developments. The rental range lor three rooms runs Irom approximate!) $28 to approximate!) $98 pci month. The annual rent roll is approxi- mately $80 million. • Under the Federally-aided public housing pro- gram. 10.704 apartments have been completed. 19,660 more are in projects under construc tion and on the designing hoards. • The State-aided program accounts for 10,873 apartments in projects completed: 10.941 apart- ments are nuclei construction and in planning. • City-aided low-rent projec ts house 1 .C>62 families in li\e completed projects. • Authority no-cash-subsidy projects account at present lot a total ol 26,036 apartments in proj- ects ompleted; 8,709 are under construction, and in planning. Special Programs Rehabilitation of Older Structures Under the I'uhlic Housing Law. the Authority can acquire run clown residential structures and NEW YORK CITY HOUSING AUTHORITY CONSTRUCTION PROGRESS BY PROGRAM AS OF JANUARY 1, 1960 Status of Projects All Programs Federal State City 1° City 11° City 111° City IV° Numbe r of Projects Total 143 57 47 5 5 15 14 Completed 89 32 28 5 5 15 4 Partially Occupied 3 2 1 Under Construction 14 4 4 6 Pending Construction 33 18 12 3 Under Study 4 3 1 Number of Apartments Total 148,585 60,364 51,814 1,662 4,693 16,401 13,651 Completed 105,825 40,704 37,628 1,662 4,693 16,401 4,737 Partially Occupied 3,450 3,245 205 Under Construction 12,488 3,105 3,758 5,625 Pending Construction 23,083 13,1 16 6,883 3,084 Under Study 3,739 3,439 300 a) Low rent projects. b) No-cash-subsidy (middle-income) projects. Source: New York City Housing Authority. -49- rehabilitate them for use as low-rent projects. The Authority operates forty-two such buildings (with a total capacity of 567 families) for use principally as temporary housing to ease its relocation activi- ties in the clearance of sites for new projects. An experiment, in cooperation with the State in 1958. involved the salvage and rehabilitation of two older buildings for permanent public hous- ing operation on the site of Douglass Houses in Manhattan. Now part of that projec t, the two older buildings produced fifty-nine of the project's 2.057 apartments at a rehabilitation cost which averaged about S3. 000 per unit. This did not include cost of acquisition. Most of the rehabilitated units have Si/, rooms. Construction cost of the new Douglass units of this size averaged about two-and-a-half times as much. The Authority is currently ex- ploring the feasibility of larger-scale operations in the rehabilitation of run-down but salvageable buildings for permanent operation. In February of this year, the Mayor's office an- nounced a special program in which the Authority will acquire, one by one, approximately 700 single- room-occupancy buildings which house an esti- mated total of 47,000 families. The Authority is to supervise the remodeling of each building for service as an individual project in the City's no- cash-subsidy housing program, to rent at under $30 per room monthly. The buildings would con- tinue to pay present taxes and would be self-sup- porting. Authority bonds will be sold to finance the purchase and rehabilitation work. Only such buildings which are structurally sound and worth saving will be included in this program. The announced objective is to use such remodeled structures as an influence to encourage owners of neighboring residential buildings to eliminate any existing deterioration, and thus contribute to the over-all improvement of the neighborhood. Conversion of Planned Projects into Cooperatives The Authority has proposed this year an amend- ment to the Public Housing Law which would au- thorize it to build housing and lease the completed projects to non-profit corporations for fifty-year terms for operation as cooperatives, at no cost to the City. Under this plan, eight middle-income projects now being designed, which will accommo- date an aggregate of 7,239 families, are to be con- verted to cooperative operation. Reported financial plans include monthly carrying charges of $18 to $23 a room, after down payments of not more than $600 per room. These charges are about $5 to $7 per room below the rentals scheduled for the same apartments if they Avere to be developed under the no-cash subsidy program. -50- Title I Slum Clearance and Urban Redevelopment The Philosophy Title I of the Federal Housing Ac t of 1949 estab- lished Federal aid to a city or other local public agency in acquiring slum sites and lor their rede- velopment by private or public capital, pursuant to plans approved by the local authorities and the Federal Government.* Aid is in two direc tions. The city or other local public agency may use the power of eminent do- main (condemnation) to acquire slum property held in many ownerships, which could not be as- sembled by ordinary purchasing procedure. The price of land to be acquired is written down to a figure private capital can afford to pay. In a rough way, this write-down represents the cost of build ings which must be torn clown and thus have no value to developers. The write-down losses as- sumed by a city or other local agency, as a result of the acquisition and resale ot sites, are shared two-thirds l>\ the Federal Government and one third by the locality, whic h may make its contri- bution in the form ol both cash and site improve- ments. Applicable Legislation Title I sets out conditions, criteria and stand- aids with which a municipality must comply be fore Federal assistanc e is made available. Proposed projec t areas must be substandard and. with limit ed exceptions, predominantly residential eithei in their existing or proposed new use. Assurance must be given that there is decent, safe and sanitary housing available lor the relocation of families re- moved from the sites to be cleared. There must be a finding ol conformity to an over-all c itv gen- eral plan, and the municipality must have in effec t a Workable Program which incorporates certain planning, code enforcement, and citizen-participa- tion requirements. There is prov ision lor advanc es of planning and survcv funds from the Federal * Aid for rehabilitation activities ua-; added to the I itle I law in 1954. ( .( >\ ernment to the city. Title I is supplemented l>\ State enabling legis- lation under Section 72k of the General Municipal Law. This section establishes the City itself as the agent for the program, instead of a separate au- thority (as in public housing) : sets certain ap- proval requirements, including a review and pub lie hearing by the City Planning Commission: and reejuires that project land be sold only at public auc tion. In 1958 the voters of the State authorized a $25 million bond issue lot urban renewal assist ance to municipalities engaged in developing Fed- erally-aided Title I urban renewal projects. Such State aid can be given to meet up to one-half the municipality's share ol the write-down costs. In the- City, three commitments for State assistance have been issued, two to Title I projects ol the Committee on Slum Clearance and one to a pro- ject ol the Urban Renewal Board. Organization of the Committee on Slum Clearance In anticipation ol the enactment of Title I. Mayor O'Dwyer appointed a committee on Decem- ber 17. 1918 to studv the promotion of specific slum clearance projects In private capital.* I he Committee, composed ol ex <>Hi mem- bers ol the Citv Administration, under the chair manship ol Citv Construction Coordinator Robert Moses, filed its definitive report to the Mayor on January 23, 1950. On January 26, 1950, the Board of Estimate ap- proved the report and passed the following resolu- l ion : NOW. THEREFORE, BF IT RESOLYFD that 1. The Board of Estimate generally approves ♦ The committee was composed of the Comptroller, the Chair- man of the Citv Housing Authority, the Corporation Counsel, the Chief Engineer of the Hoard of Estimate, and the Citv Construction Coordinator. the work of the Committee and the- recommendations contained in said Slum Clearance Report, and authorizes and di- rects the Committee to proceed with the development of a city program of slum clearance projects under the Federal law. 2. Said Slum Clearance Committee is hereby authorized and directed to negotiate with all interested developers terms and condi- tions governing specific projects and after consultation with the City Planning Com- mission and other interested city agencies to report back to the Board of Estimate in the case of each such project as and when the negotiations for such project have de- veloped to the point where action by the Board of Estimate is desirable." The Committee on Slum Clearance thus became the agent of the Board of Estimate for the nego- tiation of all contracts under Title I, subject to the Board's approval, and subject to its power to approve or disapprove any contracts, negotiations or applications for Federal assistance. The composition of the Committee on Slum Clearance has varied during the ten years of its operation under the chairmanship of Mr. Moses, hi the summer of 1959 three "public members" were added to its membership.* The headquarters of the Committee were and at the present time are the offices of the Triborough Bridge and Tunnel Authority, of which Mr. Moses is Chairman. Until recently the Director of the Committee was William S. Lebwohl, Ceneral Counsel to Triborough; Ceorge E. Spargo, Gen- eral Manager of Triborough, acted as Assistant to the Chairman. Neither drew any salary from the City. The Committee now has a small permanent staff which includes 19 persons. The work is sup- plemented by the firm of Skidmore, Owings and * Present membership of the Committee is as follows: City Officials: Robert Moses, City Construction Co ordinator, Chair- man: J. Clarence Davies, Jr., Commissioner of the Department <>f Real Estate; James Felt, Chairman of the City Planning Commission; Peter J. Reidy, Commissioner of the Department of Buildings. Public members: Thomas J. Shanahan, Vice Chairman of the Committee; John D. Butt; Joseph P. Mc- Murray; Jack I. Straus. Merrill (retained as Coordinating Architects) in the preparation of applications to the Federal and State governments, liaison with other City agen- cies, and progress reporting on project execution. Operations In most cases the initiative for jjrojects under the City's Title I program has come from devel- opers, known as "sponsors". They prepare the pro- ject plans prior to City approval. In the execution stage, sponsors arrange lor the relocation of site tenants, and the demolition of existing structures, under City supervision. All Title I oj^erations must follow the form pre- scribed by the detailed Federal regulations govern- ing the program. But the practice followed in New York City is unlike that of other cities, where the redevelopment agency itself selects the sites, prepares the plans, and carries out relocation and demolition before turning over the cleared land to the redeveloper.* The procedure in New York City is this: • Initially, an application is submitted for a reser- vation of capital grant funds, and for an advance of planning funds to cover the Committee's ad- ministrative expenses and consulting fees. This planning advance is repayable out of project funds only if the jjroject is approved for execu- tion. If the f)roject does not go ahead, the ad- vance becomes an outright Federal grant. • Planning is carried out in two stages: first, the preparation of a report on the eligibility of the project and on what it might involve in the way of tenant relocation; second, a final plan includ- ing development controls such as building height and density, and a detailed cost estimate. In addition to the work of the Coordinating Ar- chitects in preparing these rejxvrts, a number of City agencies, such as the Public Works Depart- ment, the Board of Education, and the Depart- ment of Real Estate, supply plans and cost esti- mates on public facilities needed to prej>are the sites for redevelopment and to serve its new uses. • Our study has indicated that what may be suitable for smaller cities is not necessarily the method to be pursued in a Cit\ as vast as New York. 52 ■ COMPLETED % UNDER CONTRACT ® ADVANCED PLANNING O 1960-1961 PROGRAM A FUTURE New York -53- Comparison United States and New York City, Capital Grants Progress as of September 30, 1959 Title I Slum Clearance and Urban Renewal Item CAPITAL Project Reservations GRANTS Disbursed Percentage of Capital Grants Disbursed United States $1,319,417,424 $225,517,393 17.1 New York City 156,257,947 50,214,087 32.1 New York City as per cent of United States 1 1.8 22.3 Source: Housing and Home Finance Agency, Urban Renewal Administration, Urban Renewal Project Directory, September 30, 1959. Project operations of the Committee on Slum Clearance are subject to checks at three points: The initial planning application for Federal assist- ance must be approved by the Board of Estimate. The final plan, following Federal approval, must be submitted to the City Planning Commission for review after public hearing. Then and then (done can a submission of the final plan be made to the Board of Estimate. Each project must be within an area designated by the City Planning Commission in its Master Plan of Sections Containing Areas Suitable for Development and Redevelopment. This plan has been changed and amended from time to time by the Commission to include specific projects. While State law requires that the project land be sold at public auction, in practice only the sponsor previously designated by the Committee on Slum Clearance has bid for the land. The City has aided the sponsors in the purchase of the land by taking a purchase-money mortgage (for up to four years) for a portion of the purchase price. Program Accomplishments Since the enactment of Title I, the slum clear- ance program developed in New York City has been the largest in the country. In all, twenty-four Title I projects have been approved for planning by the Board of Estimate and the Federal Govern- ment. Sixteen of these have become operating projects, for which the City acquired and resold the property, received capital grants from the Fed- eral Government, and entered into redevelopment contracts with private investors. When all sixteen projects are completed, they will contain 28,500 new dwelling units on approxi- mately 314 acres of slum-cleared land. They in- volve $174 million in Federal and City write-downs, $33,500,000 in public improvements, and $739 mil- lion in construction investment by private capital. Taxes before acquisition were computed to be almost $4,300,000. It is estimated that after com- pletion of the sixteen projects taxes at current rates will aggregate over $13,900,000. Housing Results About 7,800 of the new housing units under way have been completed and are occupied. In the sixteen projects under contract, over 10,000 units are for middle-income cooperative housing, with the monthly carrying charges running from $19-$25 per month per room. Of these almost 3,000 have already been built and are occupied. -54- Institutional Benefits In addition to housing, the sixteen projects in operation have been instrumental in aiding the ex- pansion and services of five universities, two hos- pitals, and numerous public schools, libraries, parks, police stations and fire stations. The Lin- coln Square project will be a great cultural center, housing the Philharmonic Orchestra, the Metro- politan Opera, the Juilliard School of Music and related facilities. Tenant Relocation* Some 21,500 families— tenants in the old slum and substandard buildings on the sites to be de- molished—have been relocated into new quarters from these sites. As improved procedures and supervision methods were developed, these reloca- tions, despite difficult conditions, were accom- plished with increasing efficiency and dispatch. Future Projects — 1960-61 Program In addition to the program under way, eight sites have been classified for slum clearance and are sc heduled for the 1960-61 program. Of these, five have been authorized by the Board of F.sti- mate. and applications for survey and planning funds have been submitted to the Housing and Home Finance Agency. f The over-all area for these eight projects consists ol ninety acres. The redeveloped areas will contain some 10.000 new apartments. They will require approximately s ll million in Federal funds, and half that amount in City funds. Seven other projects are also under considera- tion for future development. They will provide approximately 10.000 new dwelling units on 310 acres of land, at a cost of $52 million in Federal and $26 million in City funds. • This subject has been discussed lulls, in SPE( IAL REPORT- RELOCATION IN NEW \ORK CITY . j The live projects are Delancey Street. Division Street. Bellevue South and Brooklyn Bridge Southwest in the Borough of Man- hattan; and the Bronx Park South project in the Borough of the Bronx. Planning for the remaining three projects. Batten- Park North, Flatbush Avenue and Atlantic Avenue is scheduled for ihe year 1961. Total Program The total program— including future and de- ferred projects— is expected to clear over 900 acres of slums. The projects will provide 62,540 new dwelling units built by private capital, about half middle-income cooperative with carrying charges ol from $19 to $25 a room. The program wotdd entail a total investment— Federal, State, City, and private— of over a billion-and-a-half dollars. TITLE I PROJECTS IN EXECUTION: Comparison of Taxes before Acquisition and Af tar v_ o m p i c ii on T A X E s Before After Project Acquisition Completion Fort Greene S 145,000 S 278,000a Corlears Hook 104,640 104,640a Morningside 120,000 120,000a Columbus Circle 305,800 1,346,000 North Harlem 148,000 603,000 Harlem 162,000 671,000 Pratt Institute 212,000 900,000 West Park 456,000 1,233,400 Washington Square S.E. 396,000 1,300,000 Seward Park 222,000 467,000a N Y U-Bellevue 196,000 695,000 Lincoln Square 960,000 3,380,000a Sea side- Roc ka way 1 1 1,000 816,000a Hammels-Rockaway 185,000 1,1 12,000a Penn Station South 486,000 718,000° Park Row 88,000 160,700a Total $4,297,440 $13,904,740 (a) New York State Redevelopment Companies Law project. Includes partial tax exemption on all or part of project. Source: Committee on Slum Clearance of the City of New York, Title I Progress, Quarterly Report on Slum Clearance Projects, January 29, 1960. -55- TITLE I PROJECTS AS OF JANUARY 1, 1960 PROJECTS IN EXECUTION AND IN PLANNING DWELII N G UNITS DWELLI N G UNITS BEFORE AFTER Under Pending In PROJECT BOROUGH Total Rental Cooperative Completed Construction Construction Planning Fort Greene Brooklyn 510 842 552 290 842 Corlears Hook Manhattan 878 1,668 1,663 1,668 Morningside Manhattan 1,384 972 972 972 Columbus Circle Manhattan 286 590 590 — 590 North Harlem Manhattan 1,135 1,781 1,781 — 771 1,010 Harlem Manhattan 2,068 1,716 1,716 — 858 858 Pratt Institute Brooklyn 1,354 2,013 2,013 — 574 287 1,152 West Park Manhattan 4,212 2,525 2,525 — 861 1,664 Washington Square S.E. Manhattan 152 2,004 2,004 — 668 668 668 Seward Park Manhattan 1 ,469 1,704 — 1,704 1,704 N.Y.U.-Bellevue Manhattan 1,369 1,216 1,216 — 1,216 Lincoln Square Manhattan 5,403 4,500 4,100 400 4,500 Seaside- Roc ka way Queens 200 1,536 1,536° — 1,536 Hammels-Rockaway Queens 1,763 2,120 — 2,1 20 2,120 Penn Station South Manhattan 2,032 2,817 — 2,817 2,817 Park Row Manhattan 413 400 — 400 400 Battery Park Manhattan 10 1,224 1,224 — 1,224 Riverside- Amsterdam Manhattan 1,078 1,630 1,630 — 1,630 Cadman Plaza Brooklyn 350 722 722 — 722 Soundview Bronx 283 1,81 8 1,818 1,818 Park Row Ext. Manhattan 207 244 244 244 Seward Park Ext. Manhattan 1,700 1,700 1,700 1,700 Cooper Square Manhattan 2,277 1,800 1,800 1,800 Lindsay Park Brooklyn 1,300 2,700 2,700 2,700 Total 31,833 40,242 21,609 18,633 7,804 7,407 13,193 1 1,838 (a) Under the New York Slate Redevelopment Companies Law. (b) Fully approved, but not yet started. (c) Includes projects under survey and planning contract with the Federal Government. Source: Committee on Slum Clearance of the City of New York, Title / Progress, Quarterly Report on Slum Clearance Projects, January 29, 1960. Last four columns, New York City Department of City Planning. - 5 6- Middle-Income Housing: Publicly-Aided, Privately-Owned It has been recognized lor some time that between luxury housing, which has never been in short supply, and the broad public housing pro- gram, which ranges from housing for persons ol low income to housing lor persons ol moderate income, there exists a compelling need for housing for the large middle-income population. Private enterprise unaided bv government is unable to fill this gap, and the need for urgeni action in this area has been pressing upon the community in ever-mounting degree. In New York State, three principal legislative devices have been created to deal with this prob- lem: the Limited Dividend Housing Companies Law ol HUM), the Redevelopment Companies Law ol 1942 and the- Limited-Profit Housing Com- panies Law of 1955. All of these statutes have been amended from time to time as the problems generated bv the shortage ol middle-income housing intensified. Limited Dividend Housing Companies Law The Limited Dividend Housing Companies Law was enacted in 1926. It was originally designed to encourage the construc tion ol housing ■ it moderate rents by providing limited tax exemp- tion and the power ol eminent domain lor site assembly. The ret urn ol the companies was limited to six pei cent and rents designed to carry this limitation into effec t were subjec t to control bv the State ( lommissioner of I lousing. A famil) ol three or less may obtain an apart- ment in these projects il its total income does not exceed six times the rental. A ratio of seven times the rental applies to families of four or more. A tolerance up to twenty-five pet cent inc rease in income is provided lor continued occupancy. A total ol some li.ooo apartments in limited dividend housing was provided from the date of the enactment to 1955. The use of this device declined over the years as new and mote useful devices were introduced. The combination of income limits, rent regulation and lack of finan- cing aids appeal to have been fatal to this program. While the Public Housing Law permitted munici- palities to grant loans to Limited Dividend Hous- ing Companies up to seventy-five per cent of the project cost, this provision does not appear to have been utilized. Redevelopment Companies In 1942 the Legislature enacted the Redevelop- ment Companies Law. The statute was designed principally to induce the Metropolitan Life Insurance Company to c lear a large slum area in lower Manhattan and build Stuyvesant "Town. I he Redevelopment Companies Law permitted a contrac t between the Company and the City pro- viding loi site acquisition by eminent domain, tax exemption on the value of the improvements for twenty-five years, limiting the company's return to six pei cent and providing lor the control of rent to reflect such a return. NO requirement was made in the statute in regard to income limits. The statute was designed to induce the con- struction of large housing projects bv insurance companies and institutions of a similar character. However, difficulties experienced bv the Metro- politan l.ile Insurance Company in obtaining Chv approval lor increases in rents necessary to ac hieve the return prov ided lor in the statute and the con- tracl aie said to have discouraged the use of the statutory device bv such institutional builders. For some years the Redevelopment Companies Law fell into disuse. It has been revived however and is now commonly used in combination with Title I ol the federal Housing Act of 1949 for the construction of housing projec ts. With this new development, the New York City Comptroller, who under the law is the supervising agency in regard to Redevelopment Companies, has included NEW YORK STATE HOUSING COMPANIES LAW (Limited Dividend) AND NEW YORK STATE REDEVELOPMENT COMPANIES LAW: PROGRESS AS OF JANUARY 1, 1960 PROJECTS IN EXECUTION AND IN PLANNING DWELLING UNITS Pending In PROJECT BOROUGH Total Completed Construction Planning^ NEW YORK STATE HOUSING COMPANIES (LIMITED DIVIDEND PROJECTS)' Rental Academy Housing Corp. Bronx 467 467 Boulevard Gardens Housing Corp. Queens 956 956 Brooklyn Garden Apts. Inc. (Navy Yard) Brooklyn 140 140 Brooklyn Garden Apts. Inc. (Fourth Ave.) Brooklyn 165 165 Hillside Housing Corp. Bronx 1,412 1,412 Knickerbocker Village, Inc. Manhattan 1,584 1,584 Manhattan Housing Corp. Manhattan 46 46 Stanton Housing Corp. Manhattan 44 44 Total Rental 4,814 4,814 Cooperative Amalgamated Dwellings, Inc. Manhattan 236 236 Amalgamated Housing Corp. Bronx 1,433 1,433 Bell Park Gardens Queens 800 800 Bell Park Manor-Terrace Queens 847 847 Electchester Queens 2,226 2,226 Farband Housing Corp. Bronx 129 129 Harry Silver Housing Corp. Brooklyn 288 288 Ridgewood Gardens Associates, Inc. Queens 372 372 Total Cooperative 6,331 6,331 Total Limited Dividend 11,145 11,145 NEW YORK STATE REDEVELOPMENT COMPANIES LAW d Stuyvesant Town e Manhattan 8,755 8,755 Riverton e Manhattan 1,232 1,232 Hillman Houses' Manhattan 807 807 Queensview* Queens 728 728 Queensview West' Queens 364 364 Soundview Park 9 Bronx 2,184 2,184 Warbasse 9 Brooklyn 5,184 5,184 Total Redevelopment Housing d 19,254 11,886 2,184 5,184 GRAND TOTAL 30,399 23,031 2,184 5,184 (a) Fully approved, but not yet started. (b) Only includes projects presented to the City Planning Commission for review. (c) No new projects hove been initiated under this law since 1954. fd) 13 additional projects under this law included in the table of Title I projects. (e) Rental. (f) Cooperative. (g) Allocation of dwelling units between rental and cooperative not yet final. 3ource: New York City Department of City Planning from New York State Division of Housing data. -58- in i he contract between such companies and the City an income limit for admission of eight times the annual rent. Right projects, providing almost 1 5.000 apart- ments, have already been constructed under this program; seven more, providing a total of approxi- mately 1 1.000 apartments are under way. Limited-Profit Housing Companies Law One of the principal brakes upon the construc- tion of middle-income housing is the lack of readily available funds at acceptable interest rates for financing such construction. To deal with this problem, the Legislature in 1955 enacted the Limited-Profit Housing Companies Law. com- STATE AND CITY AIDS TO MIDDLE-INCOME HOUSING MITCHELL-LAMA LAW REDEVELOPMENT LIMITED DIVIDEND 1955 COMPANIES LAW HOUSING COMPANIES (Limited Profit 1942 LAW T E M Housing Companies) (As amended 1943) 1926 1 . Tax Concession a. Formula b. Duration 2. Source of capital 3. The Mortgage a. Amount b. Maximum period c. Interest rate 4. Equity 'capital stock) 5. Maximum return on equity 6. Control of rents and carrying charges 7. Income limits a. For admission b. For continued occupancy 8. Assembly of sites 9. Funds 10. Supervising Agency Law permits up to 50% of On all or part of value of total assessed valuation Max. 30 years a. Private b. Direct loans by N. Y. State and or N. Y. City (or any municipality) Up to 90 % of project cost 50 years N. Y. State: 1 /3 State @ 4% 2 3 Private @ 5V4% N. Y. City: 3'/ 2 % 1 % of project cost 6% cumulative N. Y. State Commissioner of Housing: City Comptroller on municipal loan 6 times annual rent; 3-or-more dep. 7 times Up to 25% above legal limit. Then required to move. Rental surcharges above limit City's eminent domain $1 50 million State $1 50 million City City Comptroller State Div. of Housing improvements above as- sessed valuation at acquisi- tion Max. 25 years Private Up to 80 % of project cost No provision Maximum 6% 20% of project cost 6% cumulative Contract between company and New York City None None City's eminent domain City Comptroller On all or part of value of improvements above as- sessed valuation before de- velopment Pre World War II projects. 20 yrs. Post World War II projects 30 yrs. Max. 50 yrs. allowed. Private Municipal loans up to 75%. of project cost (PHL § 93) Up to 80 % of project cost 50 years Maximum 6% 20% of project cost 6% cumulative N. Y. State Commissioner of Housing 6 times annual rent; 4-or-more dep. 7 times Up to 25% above legal limit. Then required to move. Rental surcharges above limit. City's eminent domain State Div. of Housing monly known as the Mitchell-Lama Law. That law, like the Redevelopment Companies Law, provides for the organization, regulation and supervision of companies created to construct and operate middle-income housing. Unlike the laws previously referred to. there is no express require- ment that projects be constructed on the site of existing slums. The Mitchell-Lama Law vests authority in the City to aid in site assembly by the use of its power of eminent domain. It permits the City to grant a tax exemption of up to fifty per cent of the total assessed valuation of the property for a period of up to thirty years. It limits the development com- pany to a maximum return of six per cent on its equity investment. It also limits admission to families whose income is six or seven times the annual rent, depending upon whether or not the tenant has three or less, or more than three de- pendents. The most important feature of the Mitchell- Lama Law is that it authorizes the State or the City to make direct loans for the construction of the projec t up to ninety per cent on a mortgage up to fifty years. The interest rate on such a mortgage is considerably lower than that obtain- able in the open market, since both the City and the State are able to borrow money at a lower rate of interest. Administration of City Mitchell-Lama The City Mitchell-Lama program is admin- istered by the City Comptroller through a Mort- gage Banking and Housing Unit in his office. The City has assigned SI 50 million of its housing debt margin for the use of Mitchell-Lama operations. The Comptroller's supervision and control extends from the initial choice of site, financial estimates of project costs, and preliminary construction plans through operation of the completed project. Upon the Comptroller's approval of a proposed project, the sponsor submits to the State Commis- sioner of Housing a proposed Certificate of Incorporation, together with a statement of the proposed project. Upon the approval of the State Housing Commissioner, the project is then sub- mitted for the approval of the City Planning Com- mission. Upon approval by the City Planning Commission, the project, including its description, the mortgage commitment of the City and the pro- posed tax exemption, is submitted to the Board of Estimate for approval. Thereafter, final plans for the project and all construction contracts and sub- contracts are submitted to close supervision by the Comptroller. Accomplishments of the Program Thus far, with only two exceptions, all City Mitchell-Lama projects approved have been on vacant land. The tax exemption provided by the City has been limited to forty per cent of its assessed valuation, with the exception of one project, the tax exemption upon which has been the fifty per cent limit permitted by the statute. Rents have been fixed in all contracts under this program at rates calculated to produce the six per cent maximum return permitted by law and by contract. Thus far the power of eminent domain has been used for site assembly in only one project. To date, two projects containing 820 apartments have been completed under this pro- gram. Including these two, the City has approved twelve projects to accommodate 3,690 families and has granted mortgage commitments amounting to $51,361,110. Ten more projects are now being processed in the Comptroller's Office and involve potential mortgage commitments by the City of approximately $35 million. Since January, 1959, twenty additional sites have been proposed and are under consideration. The City has granted building loans, sup- ported by mortgages, at an interest rate of five per cent and, upon final approval of completed proj- ects, will issue mortgages for permanent financing at approximately SiA per cent— a rate which will reflect the cost of money to the City plus a service charge. All but one project in the City program are cooperatives, in which the cooperators are required to invest an equity of $350-5500 per room. The average monthly carrying charges per room are expected to range from $20-$22. The one rental project will charge approximately $25 per room. -6o- Mitchell-Lama Financing In order to finance the construction of Mitchell- Lama projects, the City issues bonds under the Housing Article ol the Constitution, pursuant to which the City is authorized to contract indebted- ness outside its ordinary debt limit for housing up to two per cent of the assessed valuation of real estate in the City. Since there is exempted from the housing debt limit indebtedness incurred lor self-sustaining projects, charges against this debt margin for Mitchell-Lama loans are wiped out as soon as these loans start to carry themselves through the payment ol interest and amortization on the mortgages issued to the developers by the City. Consequently, that portion oj the City's housing debt margi^ assigned to the Mitchell-Lama pro- gram constitutes a potential revolving fund which not only is inexhaustible but will continue to increase as the total assessed valuation of property in I he City continues to increase. Administration of State Mitchell-Lama Under the Limited-Profit Housing Companies I. aw, the State is authorized to finance privately constructed middle-income housing carried out l>\ Limited-Profit Housing Companies. The pattern ol controls exerc ised by the Stale in regard to its Mitchell-Lama program is substantially the saun- as that in regard to City-financed Mitchell-Lama. As in the c ase of City Mitchell-Lama, the grant ol lax exemption and the exercise ol the power ol eminent domain is subject to the City's approval. Over-all approval of the project by both the City Planning Commission and the Board ol Estimate is required. I he Stale Commissioner ol Housing is the supervising agent lor Slate Mite hell-Lama. Origin- ally, the- State provided a fund ol $50 million lot State Mitchell-Lama and. pursuant to a proposi- tion adopted by State referendum in 1958, an additional sum of SI 00 million. This combined fund of $150 million is not a revolving fund. It is the total amount of indebtedness the State may inc ur under its Mitchell-Lama program. Out of the initial fund of S50 million. $35,900,000 was committed lor eleven State Mite hell-Lama projects located in New York City and the remainder for projects in other areas of the State. The eleven projects in Xew York Cit\ under the State program will provide 2,620 apart- ments. Five projec ts containing 1.118 apartments have been completed. An additional two projects, Ebbets Field and Baychester, involving a commit- ment ol $25 million, are being provided for New York City out of the additional $100 million authorized. The State does not issue temporal') building loans for its projects, requiring builders to provide their own financing through private sources. Temporary interest rates have ranged from less than one per cent to three per cent, plus a sen ice charge of ten cents per room per month. It is ex- pected that rales on the permanent financing ol mortgages will be approximately four percent plus the service charge. Mortgage Corporation Financing An additional legislative device was provided l>\ the 1959 Legislature through the enactment ol a Limited-Profit Housing Mortgage Corporation Law upon the recommendation of the Governor's I ask Foi e e- on Middle-Income Housing. This statute pre > \ ides for the c reation of a corporation w hose mem- bers shall be banking institutions and insurance- companies. The purpose of the corporation is to provide a fund for financing the construction ol housing by limited-profit housing companies. It was intended by this device to combine State or Cit\ financing of Mitchell-Lama projects with private financing through funds supplied to the State-created corporation by its savings bank and insurance com- pany members. It was thought that this would in- crease the amount ol monies available for Mite hell- Lama financing, particularly in State projects, at a combined rate of interest for the State and private financing which would be lower than could be obtained in the open market. Plans are now under way to finance a projec t under this law. -6i - LIMITED-PROFIT (MITCHELL-LAMA) HOUSING PROGRESS AS OF JANUARY 1, 1960 PROJECTS IN EXECUTION AND IN PLANNING DWELLING UN TS Under Pending In PROJECT BOROUGH Total Completed Construction Construction Planning NEW YORK STATE FINANCED Park Reservoir Bronx 273 273 Woodlawn Bronx 99 99 Parkside Bronx 166 166 Jimerson Brooklyn /ton Mutual Housing Brooklyn 160 160 Nordeck Queens 1 A "} A Inwood Terrace Manhattan 205 205 Inwood Heights Manhattan 207 207 Arlington Terrace Richmond 198 198 Tower Gardens Bronx 208 208 Patrick E. Gorman Brooklyn 340 340 Ebbets Field Brooklyn 1,317 1,317 Total 3,935 d 1,118 754 198 1,865 d NEW YORK CITY FINANCED Kings Bay (1) Brooklyn 540 540 Dennis Lane Bronx 280 280 Highlawn Terrace Brooklyn 124 124 Tibbett Towers Bronx Contello Towers Brooklyn 320 320 Aguilar Gardens Queens 256 256 Adee Tower Bronx 292 292 York Hill Manhattan 301 301 The Stuyvesant Manhattan 141 141 The Hutchinson Bronx 156 156 Kings Bay (II) Brooklyn 359 359 Big Six Towers Queens 697 697 Total 3,690 820 1,216 1,654 e Grand Total 7,625 1,938 1,970 1,852 1,865 (a) All Mitchell-Lama housing projects are cooperatives except The Stuyvesant which is a rental project. (b) Fully approved, but not yet started. (c) Only includes projects presented to the City Planning Commission for review. (d) Excludes the FJoychester project in the Bronx (298 dwelling units) whose plans are being revised to meet City Plonning Commission rquirements. (e) At leost ten projects are in preliminary stages of planning. Source: New York City Department of City Planning from New York State Division of Housing data and New York City Comptroller's Office data. -62 - Part 5 NEW TECHNIQUES IN URBAN RENEWAL Urban Renewal Board Office of the Deputy Mayor Urban Renewal Federal Aid to Urban Renewal Background of Urban Renewal in New York City Organization of the Urban Renewal Board Applicable State Legislation Accomplishments Planning, and Sponsor Relations Emphasis on Social Objectives The "Brick and Mortar" Experiment Open Land Redevelopment Neighborhood Conservation Organization Operation Accomplishments -63- Part 5 NEW TECHNIQUES IN URBAN RENEWAL Urban Renewal Federal Aid to Urban Renewal Title I of the Housing Act of 1949 was designed to clear slums and to replace them with new de- velopments. Amendments made in 1954 introduced a new concept— that of "urban renewal."* Urban renewal not only includes the clearance of slums but also the rehabilitation and modernization of existing housing, and the conservation of existing standard housing on a broad area-wide basis. The Federal Government makes funds available for surveys and preliminary planning work. It also makes loans and capital grants to municipalities to help meet project development costs. Financing of new housing, and rehabilitation of existing residential structures in urban renewal areas, must come principally from private invest- ment, since neither Federal loan nor grant funds may be used for construction or rehabilitation of structures. Section 220 of the National Housing Act, as amended in 1954, provides that in such areas the FHA may insure larger mortgage loans than are permitted under other FHA programs. Background of Urban Renewal in New York City In 1955, the Mayors Committee on Better Housing recommended a series of measures to improve, conserve and expand the City's existing stock of housing. It strongly recommended use of the new Federal aids to city planning which the Housing Act of 1951 had made available. * The Housing Act of 1954 encourages and assists the voluntary efforts of cities (1) to prevent the spread of blight into good areas; (2) to rehabilitate areas that can be economically re- stored: and (3) to clear and rebuild areas that cannot be saved. This includes the write-down to apply to the purchase and resale of existing buildings for rehabilitation to established standards. In addition, public improvements in rehabilitation areas such as schools, playgrounds and street paving, are allowed to count as project expenditures for which the Federal Government helps pay the charge. The first exploration of the possibilities of the 1954 Federal Act was made by the New York City Housing Authority in connection with a proposal to adopt the new urban renewal approach to the entire area from 59th Street to 125th Street, be- tween Central Park West and the Hudson River. The study proposed that this section of the city be revitalized by the combination of slum clearance, structural rehabilitation and neighborhood con- servation. Such a project could have been under- taken by the Committee on Slum Clearance by obtaining an amendment to State enabling legis- lation permitting the City to engage in rehabilita- tion as well as slum clearance. But Mr. Moses had grave doubts of the financial feasibility of the rehabilitation of brownstone structures which comprised a major portion of the West Side Project area. Because of Mr. Moses' lack of confidence in the project, and his lack of faith in the rehabilitation-conservation approach as an effective instrumentality for city renewal, nothing was done about the West Side proposal through *955- In 1956, however, the Mayor requested Mr. Felt, then Chairman of the City Planning Commission and head of the Department of City Planning, to review the feasibility of the West Side Project- but on a much less grandiose scale than originally proposed. The City's first step was the enactment of legislation which would enable it to apply for and accept a demonstration grant from the Federal Government for a planning study of the West Side Project. A grant of $150,000 was obtained and it was decided to concentrate the study on a twenty- block area of the City's West Side. The twenty blocks chosen for study— between 87th and <)7th Streets from Central Park West to Amsterdam Avenue— were considered to be representative blocks in the "heartland" of the West Side. The -64- HOUSING AND URBAN RENEWAL TODAY BOARD OF ESTIMATE Mayor: Chairman Council President • Comptroller 5 Borough Presidents i CITY PLANNING COMMISSION AGENCIES approval of plans, sites and financing of all city proj- ect!. Exercises power of eminent domain and gronts tax exemp- tion. (2) Approves all project plans. (3) Agency requiring new construc- tion site obtains informal ap- proval from appropriate Borough President. (4) Insures private housing mort- gages under Sections 207, 213, 220 and 221. V) 111 Z in o < V C a> 0) < 0) u C c 0) 3 O I £ ■o < 0) _c "35 3 (A c E ■o < 0) c *3i C .0 I 'c E < "5 * a> c a> c o -0 Comptroller Housing Authority Buildings «Tax Commission • City Planning Assistant To Deputy Mayor Buildings • Health • Local Courts Slum Clearance Committe Urban Renewal Board PROGRAMS Urban Renewal Title I Code Enforcement Neighborhood Conservation Tax Abatement. Tenement Rehabilitation -* Federal i Public Housing ► City <— State <— Mitchell -Lama ► City <- State 3 n o 3 3 (A 5' 3 D <[ 5* 5' 3 X i 3* (0 2 5 m z o m Redevelopment Companies Limited Dividend ^ A. R. FOREST, PtANOSCOPE CORP. N I.C area chosen tor study is "anchored" on the north by the West Park Title I project, and on the west partly bv public housing. The West Side Urban Renewal Stud) was carried out In the City Planning Department, under the direction of Donald Monson. with the help of an informal Interdepartmental Committee and the assistance <>l n firm ol architectural con- sultants. It concluded that rehabilitation was a practical, desirable and economically feasible ap- proach to rehabilitating the survey area: and on April 1958, the study was submitted to the Mayor and the Board of Estimate lor approval. Organization of the Urban Renewal Board On May 9, 1958, Mayor Wagner appointed an Urban Renewal Board* t<> implemeni the recom- mendations <>l the West Side Urban Renewal Study". The Board has .1 small permanent stafl ol six persons. Its Executive Director is Samuel Ratensky, Eormerly Planning Direc tor lor the New York Cit) Housing Authority. The Board's practice is to re- tain consultants lor project planning, appraisals and engineering lor its two current planning proj- ects: the urban renewal West Side Project, and the Flatlands Industrial Park. Platlands is the Board's Inst venture into "open land" redevelopment and is discussed below. Applicable State Legislation \s a result of the West Side Urban Renewal Study, the State Urban Renewal Law was enacted as Section 72m ol the General Municipal Law. This was necessary because Section 72k of the same law— the- enabling ac t lor the Committee on Slum Clearance— did not extend to rehabilitation and conservation. * Present membership consists of: |amcs Fell. Chairman of the City Planning Commission, Chairman; Abraham I). Beame, Budget Director; Charles H. Tenney, Corporation Counsel; J. Clarence Davies, Jr., Commissioner, Department of Real Estate; Peter J. Reidy, Commissioner, Department of Buildings; William Reid, Chairman of the New York City Housing Authority; Michael A. Provenzano, Acting Chief Engineer, Board ol Estimate. Section 72m of the General Municipal Law, the enabling act under which the Urban Renewal Board functions, requires more elaborate pro- cedures than Section 72k, the enabling act for the Committee on Slum Clearance. It requires mote public hearings and reviews. The City Planning Commission must designate the area for a project and review the preliminary and final plans, each with a public hearing: the Board of Estimate must approve the preliminary and final plans following additional hearings. In contrast, projects under the Committee on Slum Clearance require only one City Planning Commission review, one Board of Estimate approval and one formal public hearing. Subsequently, additional State legislation was enacted to enable the City to deal effectively with other aspec ts of urban renewal. Its "legislative kit" of Stale law for slum clearance and urban renewal under the General Municipal Law is as follows: Section 72k: for Title I shun clearance and urban 1 cde\ elopment; covers blighted areas which are predominantly residential c ither before or alter redevelopment. Section 72111: lor use of the- urban re- newal approach under Federal Title I: in- cludes rehabilitation and conservation ;is well as clearance and redevelopment. Section 7211: lor redevelopment of blighted open or predominantly open areas. Section 720 (Proposed): lor redevelop- ment of blighted commercial non-residen- tial areas lor predominantly non-residen- tial use. (It is intended that this new section will be used first as the legislative tool permitting the redevelopment of the Washington Market area of lower Man- hattan.) Accomplishments In addition to obtaining new legislation en- abling the City to adopt a broad approach to the -65- problems of City renewal, the Urban Renewal Board has: • Developed new methods and procedures in urban renewal and redevelopment, which shift the initiative from private enterprise to the City Administration in the planning, control and execution of urban renewal projects. • Introduced the concept of social objectives as a primary goal of City-planned and controlled urban renewal effort. • Initiated a "brick and mortar" experiment in the rehabilitation of twenty brownstone houses in the West Side Project area. • Started on a project to redevelop "open land". Planning, and Sponsor Relations There are a number of fundamental differences in the Board's methods of project planning and execution as compared with the methods of the Committee on Slum Clearance. In the planning stage, the sponsor of a Title I slum clearance project prepares most of the project plan and, in fact, may select the project area initially. The Urban Renewal Board, on the other hand, has selected its present project area without sponsor participation, and intends to carry the planning well along before opening negotiations with prospective sponsors. In the execution stage, basic differences between the two programs apply to acquisition, relocation and clearance responsibilities. Properties on the site of a Title I slum clearance project are ac- quired and resold at the same time: the purchaser is responsible for tenant relocation and demolition, as well as for the new construction. Under urban renewal, however, the land is to be cleared or otherwise prepared for re-use by the City before its resale, which is to be to a number of different redevelopers. The Urban Renewal Board has advocated com- munity participation as an important element in its method of project development. To some extent this attitude is reflected in the five public hearings required by Section 72m as against two public hearings required by Section 72k of the General M unicipal Law, under which the Committee on Slum Clearance functions. Emphasis on Social Objectives The West Side Project area consists generally of luxury apartments on Central Park West, old- law tenements on Columbus and Amsterdam Ave- nues, and brownstones largely converted to room- ing houses on the side streets. The area has been subject to heavy pressures from immigration by low ? -income minorities. Extent of slum formation is indicated by a high incidence of single-room occupancy by entire families. Basic objective of the projec t plan is the upgrading of the entire area to modern living standards while, at the same time, retaining much of the ethnic, economic and archi- tectural diversity which now exists. The West Side renewal plan contemplates the creation of a "balanced neighborhood". To ac- complish this it proposes to demolish most of the old-law tenements and the most badly deteriorated brownstones, and to replace them with a combina- tion of luxury, middle-income and low-rent housing: to rehabilitate and convert the remaining brownstones to good quality apartment use; and to conserve existing, structurally sound apartment buildings. Additions to public and semi-public facilities are planned to be made; special paving or other devices will be used to discourage through traffic on the side streets. A substantial number of existing stores, which line most of the Columbus and Amsterdam Avenue frontages, will be displaced by the proposed clear- ance. New sites for a more limited amount of com- mercial development are to be provided, however, and it is proposed to stage construction of the project over a period of six years, allowing time for the gradual relocation of the retail establishments. The "Brick and Mortar" Experiment The West Side Project received Preliminary Plan approval by the Board of Estimate on October 20. 1959. Final planning is now underway. Con- siderable interest has been manifested by private -66- sponsors in the redevelopment aspects of the West Side area. The Board feels that before the proposed de- velopment can be accomplished there remain main complex questions in the fields of finance, planning and design, law. administration and public policy which should be more thoroughly explored on a small scale to guide and implement the large vol- ume of rehabilitation which will be part of the total project.* While work on the Final Plan for the West Side Projec t is being completed, the City of New Yoi k — with Federal financial assistance under the Demon- stration Grant Program, which is assured— will undertake an actual rehabilitation program in an area consisting of portions of three blocks within the West Side Project. For this purpose, the Urban Renewal Hoard proposes to acquire twenty brown- stone buildings, rehabilitate seven of these by direct contract, and sell thirteen for rehabilitation by others. The rehabilitation of the remaining Structures in the pilot area will be sought through voluntary compl iance. The particular blocks have been selected because ol theil Favorable location and- the existence ol Block Associations' cooperation with which the Demonstration will be carried out. Physical bound- aries of the Demonstration Area have been set so that both street and backyard treatments may be pai i of the demonstration. * Vpplicatioh of Urban Renewal Board to the Housing and Home Finance Agency for a Demonstration Grant, West Side Urban Renewal Area. I960, under Section 72/ of the General Municipal Law. Open Land Redevelopment In addition to the West Side Project, the Urban Renewal Board has been assigned responsibility for the redevelopment of blighted open or pre- dominantly open areas. The Flat lands Project is being developed under Section 7^11 of the State General Municipal Law- adopted in 1958, which allows municipalities to acquire, improve and re-sell blighted vacant or predominantly vacant areas. No Federal aid is invoh ed. The Flatlands Project is now iii the final plan- ning stage, following approval of the preliminary plan by the Board of Fstimate in January i960. The projeel area is a 95-acre site, now largely vacant, in the southeast section of Brooklyn. The area is platted in small lots, mam of which are now tax delinquent. Residential development has been discouraged b\ a railroad line along one side of the site-. ()nl\ small-scale scattered industrial uses dot the area. Under the project plan almost the entire area w ill be acquired, c leaved and replatted in a super- block pattern. A canvass ol near-by plants and industrial developers has indicated a heavy demand lor the projec t land. Strict land-use controls are to be applied to assiue high-grade industrial park \ the sales price to be realized. Thus, no write-down 01 other financial aid is contemplated. -67- Neighborhood Conservation The Neighborhood Conservation Program, ini- tiated in August 1959 in the office of the Deputy Mayor, is an experimental approach to the arrest- ing of blight in areas not covered by the City's clearance and urban renewal programs. The pro- gram is designed to: • Return housing to at least minimum standards of Inability based on City codes, without such costly improvements that large numbers of low- income families would have to be relocated; i.e. 'moderate rehabilitation". • Decongest. through relocation, over-crowded buildings, primarily rooming house units, each of which are used by an entire family. • Provide educational and social services for fami- lies new to urban living or unfamiliar with accepted modes of personal conduct. • Assist and give financial advice to landlords to encourage them to make minimum improve- ments. • Coordinate on a local area basis, City housing inspection, law enforcement and utility services. The program thus far has been established only by administrative order. Legislative aid to the program is planned through a proposed State law, facilitating the use of City tax exemption and tax abatement aids for neighborhood conservation areas officially designated by the City Planning Commission. Organization The Assistant to the Deputy Mayor, Mrs. Hor- tense Gabel, and her secretary are the only City personnel employed directly for this program. In each of the three neighborhood conservation areas now in operation, a project director and assistant on the site are engaged by a local settlement house or social service organization, using special funds contributed for the program by these groups. Under a directive of the Mayor, several City departments have assigned personnel to work full or part-time in the specified conservation areas. Represented are the Building, Police, Fire, Health. Welfare and Sanitation Departments, as well as the Department of Water Supply, Gas and Elec- tricity. Other agencies involved include the Board of Education, the Commission on Intergroup Rela- tions, and the Housing Authority. The contribu- tions of all workers from these agencies are co- ordinated by the Assistant to the Deputy Mayor and the site staff. Operation Neighborhood conservation districts are selected by the Assistant to the Deputy Mayor in consulta- tion with the Department of City Planning, other city agencies, and with local social service and community organizations. To date, areas selected have been near the sites of existing or planned public housing, Title I, or urban renewal projects, or in other districts con- sidered to be especially subject to the pressure of receiving tenants relocated from clearance sites. No area is selected which is expected to be subject to clearance or renewal action within a seven to ten-year period. A site office is set up in the project area by the cooperating community groups for the use of the conservation director and assistant. City departmental supervisors and personnel to be involved in the project operations are briefed in person by the Assistant to the Deputy Mayor on all aspects of the program. Target dates are set lor saturation inspections of pilot blocks. Landlords of the block are called to the Department of Buildings and directed to eliminate violations -68- promptly or tace court action. The project site staff enlists the assistance of City welfare and police personnel, as well as volunteer social workers. Relocation of overcrowded families is being aided by the Department of Real Estate. The De- partment of Welfare assists its clients in the area and now no longer places additional welfare fami- lies in the area, unless the accommodations are adequate. The Housing Authority assists eligible families to obtain admission to public housing. Accomplishments At present, the program is operating in three areas, totaling twenty blocks. The areas are located in the Chelsea section of lower Manhattan, in downtown Brooklyn at Nevins and Dean Streets, and in the West 103rd Streel section of Manhattan. A fourth area, in East Harlem, is about to go into operation. The program began with a total of $135,000 in giants from civic foundations and social organizations. A demonstration grant appli- cation now pending with the Federal Housing and I fome Finance Agency would add another $150,000. The prototype for the program was the work initiated in 1957 by the Hudson Guild in the Chelsea area. Hut die first pilot block chosen by the Guild proved to be within the area of the Penn Station South Title I project, and was dropped alter some rehabilitation action had been under- taken over a seven-month period. A second block, the 400 block of West 22nd Street, was treated by the Guild in 1958 and is now under the City's con- servation program. Operations carried out in this block have included the relief of over-crowding, reconversion ol rooming houses to apartments, and building repairs and improvements. -69- Part 6 RELATED PROGRAMS AND PROBLEMS Code Enforcement Legislative Basis Organization Operations Welfare Housing >» Organization and Operations Substandard-Dwelling Subsidy Fair Housing Practices Rent Control Local Law Tax Abatement The Commercial Tenant -71- Part 6 RELATED PROGRAMS AND PROBLEMS Code Enforcement Responsibility for enforcing laws relating to the maintenance of existing housing is carried by four City agencies: the Department of Buildings, the Department of Health, the lire Department, and the Department of Water Supply, Gas, and Elec- tricity. The principal laws relating to housing con- ditions are under the jurisdiction of the Depart- ment of Buildings. While the housing laws require the City to con- duct periodic inspections of all buildings to assure that the required standards are maintained, in practice the Department of Buildings asserts that it cannot go much beyond following up the sub- stantial volume of complaints received from tenants on housing conditions. Occasionally, intensive area inspection campaigns have had a limited success, and drives have been carried out for special items such as fireproofing of stairways and, more recently, installation of sprinklers in rooming houses. The Department of Buildings is currently carrying on special enforcement programs aimed at the worst categories of deteriorated housing. Legislative Basis Housing inspections are carried out by the De- partment of Buildings under four codes, as follows: • The State Multiple Dwelling Law: This is the successor to the original Tenement House Law of 1901. It was adopted in 1929 and comprehen- sively revised in 1946. The law applies only to New York City and Buffalo; it provides a set of standards for the construction, maintenance, and occupancy of multiple dwellings. • The City Multiple Dwelling Code (Ch. 26, Title D of the City Administrative Code): Adopted in 1955, this code supplements the provisions of the State Multiple Dwelling Law and provides more stringent controls in regard to maintenance, facilities and occupancy of multiple dwellings. • The City Administrative Code (Section 644b- 1.0) requires a periodic inspection of every mul- tiple dwelling by the Department of Buildings to determine compliance with the housing laws. • The City Building Code (Ch. 26, Title C of the City Administrative Code): This code applies largely to new building construction. It also contains provisions relating to the safety of existing structures. In addition to the codes administered and en- forced by the Department of Buildings, other laws relating to particular aspects of the construction, maintenance and occupancy of housing are en- forced by the Department of Health; the Depart- ment of Water Supply, Gas and Electricity; and the Fire Department. The Department of Health has primary jurisdiction over one and two-family houses; the Department of Buildings is concerned largely with multiple dwellings (those having three or more apartments). Organization The Division of Housing in the Department of Buildings has primary responsibility for housing inspections. At present, the Division is authorized to have a staff of 401 inspectors, each of whom must have at least five years' experience in the building field. The number actually employed is approxi- mately 340, of which seventy are supervisory and office staff, and 270 are engaged in field inspections. Recruitment of inspec tors is stated by Department officials to be difficult, due to salary competition from private industry. The 270 field inspectors are assigned to five in- dividual Borough offices. Operations The Department's responsibilit\ is indicated bv the more than 155,000 multiple dwellings over which the Department has jurisdiction. (See table- on page 37.) Enforcement problems are most severe in the 48,000 old-law (pre-1901) tenements; the 14,500 rooming houses, man) oi which are actually used for family occupancy; and approxi- mately 700 structures whic h have been converted to single-room occupancy. Deterioration in many of the 50,637 new-law (post-1901) tenements pre- sent additional problems of cexle enforcement. The main activities of the inspec tion force con- sist of following up complaints about adverse housing conditions. During 1959, a total of 109,091 such complaints were received, of which approxi mately one-third required field inspections. A total ol 2 1 ,468 cases wei e taken to court, resulting largely from inspections following complaints. In response to each complaint, it is the inspec tor's responsibility to investigate, issue violation notices if the complaint is supported In the facts, re-inspect for compliance with violation notices, issue summonses and testify at the court proceed ings. Under Department policy, stated to be due to lack of adequate manpower, an inspector re- sponding to a specific complaint visits only the particular apartment involved. He is not required to enter other apartments in the building, even where it appears likely that other violations are present. He does, however, inspect the public halls, the roof and the cellar. Housing cases are tried either in the Magistrate's Court, to which all cases are initially referred, or in the Court of Special Sessions, depending on whether the violation involved is an offense or a misdemeanor. In order to speed the disposition of these cases, the Cit\ has proposed State legislation which would require all such cases to be tried in the Magistrate's Court. Special Programs • Between 1937 and 1959. the Department in- spected every dwelling in the City to determine compliance with legal requirements for central heating, sprinklers in buildings converted to looming units, and registration of buildings with the Department, as well as posting of registra- tion signs. • A sei ies ol crash programs ol team inspections, initiated in 1959, is being carried out jointly b) the Department of Buildings and the Depart- ment of Health. These inspections apply to groups of buildings subject to extreme deterio- ration. In some c ase s, the buildings are reported 1>\ local community groups. The completion of the tenth program in this series was recently announced, an inspec tion of a group of fourteen tenements in I larlem. • An intensive enforcement drive is being carried out on the approximately 700 buildings in single room occupancy. Suc h conversion was per- mitted prior to 1954 in an attempt to provide units for single persons, but this has been pro- hibited since 1955, when it was found that many of the 100ms were being occupied by entire- fa mi I ies. I he enforcement drive has consisted of immedi- ate court referrals and notification to the State Rent Commission of unlawful conditions, with the purpose of having rents drastically cut pend- ing correction of violations. To bac k up the enforcement drive, Local Laws enacted in i<>f>c> forbid occupancy after 1965 of families with children, and no new occupan- cies by such families. The City recently an- nounced a program of acquiring certain single- room occupancy buildings for reconversion to apartment use. -73- Welfare Housing The Department of Welfare is responsible for administering the public assistance programs in New York City. There are now some 135,000 cases, representing over 318,000 individuals, receiving public assistance at an approximate cost of $186 million for the year 1959. The City's share approx- imates twenty-eight per cent of the cost; the Federal Government and the State contribute the balance under various reimbursement formulae. Organization and Operations The Department administers its basic programs through its Bureau of Public Assistance, which operates seventeen welfare centers throughout the City. The Department provides assistance to City residents in financial straits. Grants for public assistance cases include monies for rent estimated at $64 million annually. The following table shows the type of shelter and average monthly rentals paid by Welfare families. NUMBER OF WELFARE FAMILIES BY TYPE OF SHELTER AUGUST 1959 Type of Number of Rent Paid per Month Shelter Families Per cent Total Average Furnished room 14,057 19.1 $ 886,002 $63.03 Furnished apart- ment 9,117 12.4 687,110 75.37 Unfurnished apartment 34,927 47.5 1,842,688 52.76 Public housing 14,109 19.2 923,618 65.46 Other 1,336 1.8 102,582 76.78 Total 73,546° 100.0 $4,442,000 $60.40 (a) Excludes 1 -person cases who live in the various types of shelter above or in institutional accommodations. Source: New York City Department of Welfare. Available housing supply of standard apartments at reasonable rentals is at a minimum— below that needed to house Welfare recipients now residing in substandard units, or forced to vacate from hazardous buildings or structures scheduled for demolition. Since no other City agency had the responsibility to rehouse Welfare recipients, the Department assumed the responsibility and estab- lished within its Bureau of Public Assistance a housing section to help house its clients in what- ever accommodations it can find. This section has twenty-four staff members at the central office. In addition, a housing adviser is stationed at each Welfare center. In selected cases, the Department uses finder's fees and broker's commissions equivalent to one month's rent to secure accommodations for the families most difficult to relocate. During 1959, it is estimated the Department spent approximately 5> 18,000 in this way to obtain 170 apartments. Thus the Department engages in real estate activities and finds itself in competition with the relocation agents of Title I projects, the Department of Real Estate, and the New York City Housing Authority. The Department estimates that between nine and ten thousand public assistance families require rehousing annually. In 1959, the Department was able to rehouse about 6,500 families. The rehousing of badly housed Welfare recipients is also ham- pered by the reluctance of landlords to rent to this group. Large families, families without husbands and those of minority groups are particularly diffi- cult to place. The Department's rehousing problem is also affected by increased code enforcement, which dis- locates many Welfare families. The conversion of large apartments into smaller units also reduces available accommodations needed for large Wel- fare families. Substandard-Dwelling Subsidy The Department estimates that it is paying $25 million or thirty-nine per cent of its total rent bill -74- to house 33,000 of its families in substandard dwelling units. The following table shows that of the 14,000 families housed in single furnished rooms, some 10,000 are paying rents ranging from $60 to S200 per month for essentially slum accommodations. MONTHLY RENTS PAID BY WELFARE FAMILIES FOR SINGLE FURNISHED ROOMS AUGUST 1959 Welfare Families Monthly Rent Number Percent under $20 198 1.4 $20- 39.99 829 5.9 40- 59.99 3,444 24.5 60- 79.99 7,816 55.6 80- 99.99 1,349 9.6 100-119.99 239 1.7 120-139.99 140-159.99 98 .7 160-179.99 180-199.99 84 .6 14,057 100.0 Source; New York City Department of Welfare. The Department is forced to house its clients in whatever accommodations it can find. These tend to be temporary housing, in "cheap" hotels and rooming houses, which becomes permanent in the tout inning period of housing shortage. Owners of these accommodations demand and receive exorbi- tant rentals from the Department. In many in- stances, such emergency housing creates illegal overcrowding— detrimental not only to the families concerned but to the immediate neighborhood and to the entire community. The Department feels strong!) that the re- housing of its clients is not its proper function. Welfare Commissioner James R. Dumpson has proposed that the City ". . . remove from the De- partment ol Welfare all responsibility for providing housing services. This is not under the law a Department of Welfare function. Its legal responsi- bility in relation to housing is to provide the necessary funds to meet the cost of the recipient's housing needs." -75- Fair Housing Practices B\ law, the City of New York lias prohibited discrimination in most of the housing in the City. I' 1 l 955 (Local Law No. 55) the City established the Commission on Intergroup Relations in order to "encouraare and bring about mutual under- standing and respect among all groups in the city, eliminate prejudice, intolerance, bigotry, discrimi- nation and disorder occasioned thereby . . ." In 1957, the Sharkey-Isaacs-Brown Fair Housing Practices Law (Local Law Xo. 80) was enacted, declaring it be "the policy of the City to assure equal opportunity to all residents to live in decent, sanitary and healthful living quarters, regardless of race, color, religion, national origin or ancestry, in order that the peace, health, safety and general welfare of all the inhabitants of the City may be protected and insured." The 1957 Local Law provided that there be no discrimination practiced in the renting or sale of housing accommodations in multiple dwellings, or in the sale of ten or more one and two-family houses located on land that is contiguous and under common ownership or control. The Law excepts from its provisions charitable, religious, and educational institutions to the extent of permitting such agencies to select or prefer persons of a particular religion in order to promote their religious principles. The Commission on Intergroup Relations is charged with investigating complaints alleging violation of this law. It is empowered to conciliate and eliminate any discriminatory practice it finds in housing under its jurisdiction. A Fair Housing Practices Panel, appointed bv rln Mayor, consists of persons other than those on the Commission. In the event the Commission fails to conciliate and eliminate a discriminatory practice, it refers the matter to such panel. For each case referred to the Panel, the Mayor is to designate three of its members to serve as a Fair Housing Practices Board and review the case, hold hearings and issue subpoenas. If the Board finds the case is justified, it may direct the City Corporation Counsel to bring in- junction proceedings in the Supreme Court, in the name of the City, for enforcement of the pro- visions of the law. The Commission carries on an education pro- gram to promote fair housing practices among owners and managers of property, public and private agencies, and community organizations. COIR cooperates in housing and relocation activi- ties with other governmental agencies to assure conformance with the fair housing practices law. Its chairman is Dr. Alfred }. Marrow; its execu- tive director is Dr. Frank S. Home. Most cases handled bv COIR have been con- ciliated to the satisfaction of the complainants or the Commission without resort to litigation. In the twenty-one months the law has been in effect the Commission has processed 511 housing complaints, of which 368 were made by individuals and the balance bv private and public agencies. Fifty-two per cent of the cases were settled by conciliation: twenty-one per cent were dropped, according to COIR, because allegations of discrimination were not supported bv the facts: and the balance, with one exception, were closed for administrative reasons, such as lack of jurisdiction or failure of the complainant to follow through. In only one in- stance has it been necessary to process a case through the Panel to a judicial enforcement pro- ceeding, which is now pending. -76- Rent Control While it is obvious th.it Rent Control, which has continued in this Citv lor almost seventeen years, has had and will continue to have an ad- verse effect upon the quality ot the housing supply, it is equally obvious that no Eeeommendation in regard to the continuance, the amelioration or the abolition of Rent Control can be made except upon the basis ol a comprehensive, scientific, non- partisan and impartial study <>t this emotionall) charged subjec t. Informed advocates of Rent Control readily con- cede that it results in the defcrrin» of necessary maintenance and thus contributes to the growth ol slums. Informed opponents of Rent Control concede that its abrupt total abolition would im- pose intolerable burdens upon people whose mod erate fixed incomes would not enable them to meet a sudden and significant increase in rent. I n determine what adjustments in the pattern of Rent Control c an be appropriately made in these circumstances requires the assembly, appraisal and scientific analysis of factual data of enormous complexity. This is a task whic h is not within my assignment and even if undertaking the job were not far be- yond any resources at my disposal it could not be accomplished within the time limit fixed for the completion of this Report. All that I can properly do at this time is to outline the problem and inch cate the kind of organization that could undertake a scientific and objective study. Rent controlled properties insofar as the\ affect the problem of the deterioration of our housing supply, fall into three distinc t categories: • Luxury property: Here maintenance and sen ice. while reduced, has not affected the physical structure. Rentals in this group are generally high enough to encourage minimum needed investment to maintain the building. • Property where rehabilitation possibilities exist: I his group is tomorrow's incurable slum prop erty. Deterioration is creeping in. Repairs are feasible, but adequate incentives have been lack- ing. Rent controls do not permit sufficient re- turns on the investment needed to restore the buildings. The buildings contain dwelling units with economic rental values below thai which can be produced new. even ai cm unt rates ol government subsidy lor middle-income housing. • The property dilapidated beyond the point o] economic rehabilitation: Additional capital in- vestment or any kind of modernization In land lords has traditionally been absent from this group. Exploitation ol the tenant and the prop- ert) is the accepted and profitable wav to oper- ate. With the future unc ertain and the neighbor- hood decaying, there is no other incentive but to skimp, reduce services and avoid repairs at all costs, even paving repeated lines for violations prosec uted. The best that can be hoped lor such properties, short of complete destruction, sub sidization or socialization, is the strict regulation of rents and the vigorous enforcement ol meas- ures against profiteering. Much of the data essential to a comprehensive stuck of Rent Control will emerge from the Fed- eral Census whic h is about to get under way. It will include not only rental, income and occupancy lads in regard to New York City but also similar matter in regard to other large urban communities, upon the basis of which comparisons and contrasts may be indicated. It will indicate the trends both -77- in New York City, in its metropolitan area and' in other urban areas across the country. All of this material is indispensable to any examination of the social and economic impact of Rent Control in New York City as it now exists. Such a study should be undertaken by an organ- ization whose scientific approach to the problem and freedom from partisan pressures and group control are recognized, and whose objective, scien- tific and impartial recommendations can be taken into account by the Legislature when the Rent Control Law comes up for extension in 1961. Such a study would command general public acceptance while providing the Legislature with a solid factual and technical basis for appropriate legislative action. -78- Local Law Tax Abatement One of the most potentially useful devices for reconstruction and renovation of rundown tene- ments and the preservation of the existing inven- tory of housing was that provided by a State Stat- ute, implemented by a Local Law under which two substantial benefits were offered to owners of rundown tenements: • A twelve-yeai tax exemption to the extent of the value of increases in assessed valuation to their tenements resulting from rehabilitation. • An annual tax abatement amounting to !S' :; per rent ol the certified value of such improvements annually lot a nine-year period, the total effect ot which would return to the owners seventy-five per cent of the certified value of their improve- ments. Tax Abatement Law (1955-1959) The State Statute and the Local Law went into effec t in 1055 and terminated last year. At the time the Tax Abatement Law was. proposed, it was anticipated that the number of applications by owners ol tenements lot the benefits provided by the law would run to many thousands. However, two circumstances intervened which effectively re- duced the number of applications and, added to an apparent lac k ol imagination by tenement house owners, resulted in an almost complete failure of the pi ogram. During the years 1955-1959, only 492 applica- tions lor the benefits provided by the Tax Abate- ment Law were granted. The certified value of the improvements made lot that period of time for which tax abatement has been granted is only $5,684,000, and the certified value of the improve- ments for tax assessment purposes in the same period has amounted to only S},of>2,ooo. The two circumstances which intervened to re- duce the effectiveness of the law are: • The State Rent Commission declined to permit rent increases for improvements for which the City was actually paying seventy-five per cent of the cost. The effect of this ruling was to render the use of these laws unattractive to tenement house owners by. in effect, providing that they obtain practically nothing for their efforts, other than an improved building. • A complex and burdensome machinery was pro- vided for processing applications lot the benefits of the law. An application had to be made to the City Planning Commission lot a certification that the building lot which the application was being made did not lie within the path of a possible public improvement or slum clearance program. Upon such certification, application had to he made to the Department of Buildings for certification that the building was structural- ly sound and for the approval of specified work. The Department of Buildings fixed particular value on the work to be performed, excluding from it all work which it did not deem neces- saiv and all work which it deemed to be a com- mercial or non-residential improvement. The scales of charges fixed bv (he Department of Buildings lor particular kinds of improvements did not necessarilv accord with the cost actually paid bv the individual owner. Through (he operation ol these I wo lac tors, what could have- been a vei v useful method for preserv- ing the existing inventor) ol housing was almost a total failure. It is recognized, however, that if the proper fac ilities were provided lor processing ap- plications under the law. if a realistic view were taken of actual costs and il (he Rent Commission revised its regulations to take cognizance of the intent of the law. the method set forth in the Tax Abatement Law could have played a significant role in rehabilitating buildings worth saving and preserving and improving the existing inventory of housing. Proposed Legislation The City Administration has prepared for intro- duce ion in the present Legislature a revision and -79- re-enactment of the Tax Abatement Enabling Law. Under that proposed bill the City would be em- powered to enact a local law exempting from tax for up to twelve years any increase in assessed valuation resulting from alterations and improve- ments to existing multiple dwellings "to eliminate presently existing unhealthy or dangerous conditions ... to provide central or other appropriate heating or to replace inadequate and obsolete sanitary facilities any of which represent fire or health hazards." The Local Law could also provide for tax abate- ment amounting to 8% per cent of the cost of approved alterations to such tenements for ten years, provided that each annual tax abatement does not exceed the amount of taxes payable in that year. The Local Law may provide that its benefits shall not be available to any multiple dwelling unless and until it is provided with a central or other appropriate heating system. The law would be limited in its application to improvements to buildings which the Planning Commission certifies do not stand in the path of projected public improvements or slum clearance projects and does not apply to buildings other than those certified by the Department of Buildings to be "structurally sound." The benefits of the law would not apply to dwellings which are not subject to rent control and the benefits "may be withdrawn" from any mul- tiple dwelling which is decontrolled after the benefits are granted. Special provision is made, however, to facilitate the conversion of single room occupancy dwellings within a designated "neighborhood improvement area," whether or not such buildings are subject to State rent control, provided, however, that uni- form rents in such buildings may be fixed by or pursuant to Local Law. The enactment of the proposed Enabling Act and an appropriate Local Law thereunder could provide a very useful device for preserving the existing inventory of housing. However, only if the law is fairly administered to facilitate this end w ill its purpose be accomplished. Obviously, stringent rent control of buildings rehabilitated pursuant to the law would only hamper and materially reduce its effectiveness. Moreover, only a liberal policy by l he city departments involved will make the law successful in operation. - Ho - The Commercial Tenant Special Victim of Urban Redevelopment In my Special Report. RELOCATION IN NEW YORK CITY, I called attention to the plight of the commercial tenants displaced by urban rede- velopment, public works and public housing. I noted that well over 10,000 suc h commercial ten- ants had their businesses dislocated in the six-year period, 1954-1959, and I called attention to the minimal benefits provided for them. I have given further consider .it ion to the special problems created bv the dislocation of commercial tenants from buildings King in the path of public improvements. A review of the law and practice of eminent domain in this regard reveals a situa- tion crying out for reform. There are two factors which result in severe and uncompensated injury to commercial tenants dis placed by the- use of eminent domain: (1) The doctrine of law under whic h the good- will and business value o&property taken in condemnation is totally ignored in determin- ing the just compensation required to be paid under the Constitution. (2) The standard c lause in leases which pro- vides for the automatic termination of a lease upon condemnation and the assign- ment to the landlord of whatever rights the tenant might otherwise have to a condemna- tion award for the loss of his leasehold. 1 . The direct consequence of the exercise of the power of eminent domain on the commercial ten ant is drastic and often utterly ruinous. This arises out of the position adopted by the Courts that when the government condemns property, it is required to pay only for what it acquires for itself and not for what it takes from the owner. Since say the Courts, the government is not, in condem- nation, acquiring a business but only the premises in which the business is operated, it need only pay for the premises, notwithstanding that such pay- ment nowhere nearly compensates the owner for the loss which he has sustained. (See e.g. Ban net Milling Co. vs. New York State, 240 N.Y.. 533; U.S. vs. General Motors. 323 U.S., 373). This doc- trine has continued to exist notwithstanding the oft-repeated observation of Judge Cardozo 1 Ja< kson vs. New York State, 213 N.Y., 34, 35-36): "'Condemnation is an enforced sale and the State stands tow ard the owner as buyei towards seller." ruder this doctrine, the proprietor of a candy store, a liquor store, a drug store, or a barber shop which is taken bv eminent domain is entitled to nothing from the government for the loss of busi- ness and the destruction of the goodwill which he has built up over the years and which has enhanced the value of his business. If he owns the building in which his business is located he is limited in his recovery to its value as a building. If he is a lessee, he is entitled at most to the value ol the remainder of his leasehold. In addition, if his li\ tines are solidly embedded in the premises and substantially irremovable, he is entitled to their value. Obviously, the business of such a commer- cial tenant has a value entirely apart from such considerations; and a businessman selling his busi- ness to a private person would obtain a price based upon its value as a going business, including goodw ill as an important factor. But the law pays no attention to these circumstances and takes away from the commercial tenant something of great value for which it pays him nothing. This doctrine is almost universally accepted in the Courts of our country, notwithstanding the existence of firm Constitutional guarantees that no person may be deprived of his property without the payment of "just compensation". Curiously enough the businessman in England or in Canada who does not enjoy the benefit of such a written -81 - Constitutional guarantee is much better off. For, both in England and in Canada full compensation is granted to a businessman when his property is taken by government action. He is paid the value of the goodwill that lies at the base of his business; his business losses are considered and paid for and even the expense of moving his equipment is paid for by the condemning authority. (See, e.g., Rought vs. West Suffolk [1955] 2 All. E.R. 337; Senior vs. Metropolitan Railway, 2 H.&.C., 266; Pawson vs. City of Sudbury [1953] Ont. 988, M'Cauley vs. City of Toronto, 18 Ont. 416) But it is not necessary for us to look to England or Canada for an appropriate pattern of condemnation laws to protect the inter- est of commercial tenants; New York City itself provides a striking example. When the City acquires property by eminent domain outside its own borders for water supply purposes, it is required by law to pay full damages lor the loss of business and goodwill sustained by commercial owners and tenants (New York City Administrative Code, Title K). This obligation is imposed upon the City even in situations in which the injury to a businessman does not arise out of the taking of his real property but results from the condemnation by the City of property within the area (Administrative Code, Section K4 1-44.0). Thus, a merchant who loses business as the result of the City's condemnation of his neighbor's prop- erty in the water supply area is entitled to com- pensation. A boardinghouse keeper whose business is adversely affected by the taking of property within the area is similarly entitled to an award. A newspaper which loses subscribers as a result of the City condemning its property is entitled to an award for the reduction of circulation suffered by it and the loss of revenues consequent thereon. Even the employee of an establishment taken for water supply purposes outside the City who loses his job as the result of such action is entitled to six months' salary. Thus, in New York City Ave have this anomalous situation: The City pays commercial tenants and commercial owners of property for the real and actual losses sustained by them and also compen- sates others affected by such condemnation, even though their property is not taken. But the City does this only when it is dealing with residents of upstate areas. When the City deals with its own people, whether they be owners or commercial tenants, or whether they be directly or indirectly affected by condemnation, it pays them nothing for the real and actual business losses that result from the exercise of the power of eminent domain. Such a double standard hardly appeals to a sense of justice and equity, particularly in cases of Title I condemnation proceedings where substantial pri- vate benefit resulting from government action has as its consequence substantial private detriment. Here, at least, is reform demanded. It is recognized that the cost of taking into account, in urban re- development improvements, business losses of the kind paid for by the City in water supply con- demnation proceedings might be substantial. How- ever, the alternative is to perpetuate a serious in- justice which not only inflicts grievous injury on businessmen but might well result in strong op- position to necessary urban redevelopment. 2. There is a second aspect to this problem: The form of lease used generally in New York City contains among its vast amount of small print a clause providing that upon condemnation the lease automatically terminates and whatever rights the tenants might otherwise have to an award are deemed automatically assigned to the landlord. The existence of this clause is generally unknown to the tenant and indeed so commonplace is it that a tenant who asked that it be stricken from a lease offered to him would receive little consideration from his proposed landlord. In its operation this clause completely deprives commercial tenants of all their rights in condemna tion proceedings. While the Courts have attempted to ignore it and to make small fixture awards to commercial tenants occupying such property under such leases (see Matter City of New York, 256 N.Y. 236), the commercial tenant does not even get the value of the remainder of his term as an award. Thus, although his entire property and his full in- -82- vestment is taken from him, he receives substan- tially nothing. It is suggested that this standard clause should be rendered invalid and unenforceable by statute. A parallel statute, upheld as valid by the Courts, is Section 234 of the Real Property Law which invalidated what was once a standard lease provi- sion exculpating landlords from damages for injuries to the tenant's personal property occur- ring as a result of the landlord's negligence. (See Billie Knitwear vs. New York Life Insurance Co., 174 Misc. 978, affd. 288 N.Y. 682) Examples of the unhappy results of the com- bination of the two factors referred to could be multiplied. However, a single reported instance makes the point: A druggist purchased a drug store for more than $40,000. A few vears later, the building in which his stoic was located was taken in condemnation. The total sum which he eventually received was an award of $3,000 for fixtures and that sum had to be paid over to the chattel mortgagee. Thus, his total investment was completely wiped out. Whatever reforms might be made in the law to provide compensation lor business losses and loss ol goodwill would merely enrich property owners at die expense of their tenants unless the auto- matic termination clause referred to is outlawed. Therefore, to whatever extent statutory reform is provided for the former, it must be accompanied by the latter. Urban redevelopment is a continuing process, the end of which is not in view. Large scale re- development will require the destruc tion of many thousands of small businesses, commercial, retail and service establishments. It is manifestly unfair to impose the burden of such cost of urban re- development upon these business people. Entirely apart from the proposals which I made in re- gard to commercial tenants in RELOCATION IN NEW YORK CITY, a means of compensating commercial tenants and commercial owners of property in the area of redevelopment must be provided, and the rights of commercial tenants must be protected regardless of fine print in standard forms of leases which constitute snares and traps for the tenant whose bargaining position compels him to accept whatever printed form of lease is tendered to him by his landlord. In the present state of the law, as I noted in RELOCATION IN NEW YORK CITY, a com men ial tenant whose business is destroyed through eminent domain receives only his actual moving expenses, and in no event more than $500 if he is unfortunate enough to be on the site of a public housing project, or more than $3,000 if he is on the site of a Title I urban redevelopment project. Thus far. attempts to obtain Federal legislation 10 provide direct government compensation to commercial tenants who are victims of Title I developments have failed. What appears to he needed is a c hange in the law of condemnation to provide such benefits, so that payment of awards for loss ol going business establishments would be reflected in the cost of Title I projects and in the write-down prov isions of Title I. It should be established as a principle that when the community takes away a man's business it ought to pay for it. and that in the United Stales, no less than in Great Britain or iii Canada, the community as a whole should bear the expense of community progress and that cost should not be imposed upon the unfortunate victim of com- munity progress. Part 7 EVALUATION OF MAJOR PROGRAMS AND PROGRESS The Criteria Central Planning The City Planning Commission Public Housing The New York City Housing Authority Middle-Income Housing: Publicly-Aided, Privately-Owned Office of the Comptroller Title I, Slum Clearance and Urban Renewal: The Committee on Slum Clearance Resume Part 7 EVALUATION OF MAJOR PROGRAMS AND PROGRESS In the preceding pages I have taken a good look at where the City has come from in its housing effort, and a hard look at where it stands now. In the new programs launched recently, such as the West Side renewal project and the Neighbor- hood Conservation program, there is little to evalu- ate. Both appear to be intelligently pursued, and on the way to demonstrate their value as instru- mentalities of City rehabilitation. But their objec- tives and administration must be coordinated with the work being done, and which must be done, in other areas of the housing and renewal effort. The City's programs for conservation of the City's existing stock— through the rehabilitation of tenements and the plan to reconvert single-room occupancy-building— are well conceived and should be vigorously implemented. The work of Code Enforcement by the Department of Buildings should be coordinated with that of other agencies in the housing and renewal field. But the City's housing and renewal effort will depend on the performance of the City's planning function, the public housing program, the critically important middle-income housing program, and Title I. These are the "bread and butter" func- tions and programs. How well have they been con- ceived? What can be done to improve their admin- istration as a result of experience? The Criteria Government does not manufacture and sell prod- ucts. Unlike industry, it is not in economic com- petition where performance is measured by the profit and loss statement. It deals primarily in services and controls. Its success or failure is not reflected in a dividend rate but in the election returns. An appraisal of performance at any level of gov- ernment, and particularly the municipal level, must balance the economically or socially desirable against what is politically feasible. In assessing the City's effort in housing and re- development, there are only a few simple criteria which can be applied: • What was the objective of a given program? • Was it soundly conceived? • To what extent was it achieved? • What were the methods employed? • Have circumstances rendered the original con- cept obsolete? • Is there a better way to do the job under changed circumstances? Central Planning The City Planning Commission* The City Charter of 1938 (adopted in 1956 but effective January 1, 1938) required the City Plan- ning Commission to "prepare and from time to The term Cit\ Planning Commission as used here includes the Department of City Planning. -86- time modify a master plan of the city."* The "Master Plan" is a much misunderstood term. It is not a blueprint of the New York of tomorrow. It is a concept which was incorporated in the 1938 Charter, during a period when public works were expected to be the bulwark of the City's economy for the foreseeable future, and long before World War II and the urban revolution's impact on the City was even dreamed of. The trainers ol the Charter apparently antici- pated that the Commission could and would pre- pare a long-range plan, for the physical develop- ment of the City, which would become the stand- ard for preparing the annual capital budget and for authorizing individual capital improvements. Theoretically, the 1936 "master plan" concept for the City as a whole might have been feasible in the 1930s, with the City's population ethnically static and its economy depressed. But its practic- ability in the 1960s, when the City's population has undergone profound change and is riding the crest of an inflationary wave, is open to grave question. This does not mean that the Commission should not do long-range central planning for the City's physical development. But it must be based on sound research on main essential factors: the com- position of the Citv's population and its locational distribution, the trend of the Citv's economic de- velopment, its patterns of land use. and the changes which occur in its economic position in the nation In its planning, the Commission should be guided by long-term goals and trends instead of the static concept of a "master plan", as obsolete as the City's 1916 Zoning Resolution. Goals and Guide Lines vs "Master Plan" There can never be a static blueprint for New York's development. A general central plan is use- • The Mayor's Committee on Management Survey, MODERN MANAGEMENT FOR THE CITY OF NEW YORK Vol. II. Chapter V. City Planning Commission, page 9(». said: "Perhaps the nearest thing New York City has had 1 to a comprehensive master plan was the shell of public works put together at Mayor LaGuardia's direction before the end of World War II, which has provided the hasic framework for much of the capital improvements undertaken since 1 04 .">.*" ful as a formulation of over-all goals and criteria on which the planning of the operating agencies should be based. These goals and guide lines must be flexible, and revised from time to time to meet changing economic and population trends. The) should he stated and revised, and above all pub- lished; at least once a year lor the guidance of private developers — residential, commercial and industrial. So far as the operating agencies of the City are concerned, the Commission should guide and assist them in their planning: it should never undertake to do their planning for them. Applying the military analogy of the difference between strategy and tactics: the Commission's job is to develop the long-range strategy of the City's physical development, based on the "grass toots" intelligence of the operating agencies, and to ensure adherenc e lot conformance to established criteria through its rev iew function. But its value as a centra] planning agency and as an agency of objective review is destroyed the minute it gets into operational or "tactical" planning. For this inter- feres with operations which are the responsibility of the operating agencies at the Citv and Borough level.* "Community Renewal" Planning The Commission has shown commendable enter- prise in promoting the adoption of the community renewal provisions of the Housing Act of 1959, and in filing an application with the Urban Re- newal Administration for a grant of $1,500,000 to studv the characteristics ol sixty-six selected com- munities in New York City. The idea of "community studies" originated as a segment of a plan for Charter revision pro- posed by the Citizens Union about ten years 140. * This is in accord with the recommendation ol the Mayor's Committee on Management Survey, ibid, page 105: "As a central planning agency, the staff: must con- centrate upon central planning functions and not exacerbate relations with operating departments by endeavoring to do their work all over again. More and better planning, we repeat, is sorely needed in the operating departments and should be performed at that level in the City's administrative hierarchy." -87- The proposal was circulated for public discussion by the Department of City Planning in December of 1950. The Citizens Union's plan for charter revision suggested community districts for plan- ning and administration, and proposed that these be used "for the development of local master plans under the City Planning Commission . . . and for the local administration of all or most of the de- centralized functions of local government includ- ing schools, libraries, police, fire, health and wel- fare."* Great care should be taken that the potentially valuable Community Renewal Study does not be- come the intelligence base for launching a "group dynamics" strategy of community manipulation for political or social reform. Even the "master plan" contemplated by the 1938 Charter was clearly in- tended to guide the City's physical development- riot to blueprint its social or political reconstruc- tion. One of the prec ious values of our great City is its impersonality and anonymity. The individual here has a measure of protection against "the group" which is impossible in a small communi- ty.? If this human value is to be impaired, it should be done by formal charter revision pursuant to the will of the electorate— and ttol by indirec- tion. Summary I conclude that the City Planning Commission under the leadership of Chairman Felt has done an excellent job. Mr. Felt is the Chairman of three agencies: the City Planning Commission, Department of City Planning and the Urban Renewal Board. He is * See "Minority Statement on Future Charter Objectives" by George V. Hallett. Jr.. Mayor's Committee on Management Survey, ibid. Vol. I, pages 299-300. t This aspect of the value of a great city to secure the dignity oi the individual is eloquently portrayed by David Riesman in his INDIVIDUALISM RECONSIDERED (Doubleday, New York), page 12: " Prior to the rise of passports and totalitarianism, the Modem Western city provided such an asylum and opportunity for many while the existence of this safety valve helped alleviate the pressure of g] oupism c\ erv ivhere." also a member of the Committee on Shun Clear- ance and a member of the Mayor's Administrative Cabinet. Mr. Felt is an energetic, able and dedi cated public servant. At the Mayor's request he launched the West Side Renewal Study and the Urban Renewal Board as the instrumental it v for its implementation. The Commission has done an outstanding job in the preparation and submission of a comprehensive amendment of the Zoning Resolution. With the enactment of this Resolution, the Commission, under Mr. Felt's Chairmanship, will have rendered a service of inestimable value to the City. But— as Mr. Felt will be the first to concede— it is not appropriate that he should be in a position where, as Chairman of the City Planning Commis- sion, he is expected to pass upon the merits or demerits ol specific matters which he may have initiated as Chairman of the Urban Renewal Board, or on which he may have voted as a mem- ber of the Committee on Slum Clearance. The Planning Commission should concentrate on the long-range planning job the City desperately needs, unhampered l>\ operational responsibilities of any kind. Public Housing The New York City Housing Authority From the standpoint of providing public hous- ing in the low-rent category ($i2-Sifi per room for Federal and State projects) and lower middle- income public housing (financed by the City at average rentals of 818-825 per room under the no- cash-subsidy plan) the Housing Authority, since it was organized in 1937, has turned in a magnifi- cent achievement far beyond that of any public housing authority in any other city in the nation. However, in the 1950s the Authority came un- der a heavy barrage of public criticism. This was due in part to reaction against public housing generally, and in part to its inability to cope with the unexpected problem of low-income families- unaccustomed to city living— who in-migrated dur- ing World War II and in the postwar period. Ag- gravating this situation was the fact that the An -88- thoritv, which had grown enormously in the twen- ty years of its existence, had reached a point where a thorough-going reorganization of its management and operations was necessary. The 1958 Reorganization To deal with this situation Mayor Wagner, on March 8, 1957, directed then City Administrator Charles F. Preussc to make a lull and searching study of the organization and management <>l the New York City Housing Authority. Mr. Preusse's report was filed on September 17. iu.")7- On May 1. 1958, the Housing Authority was reorganized. In place of a salaried full-time chairman and lour unpaid part-time members, tl ere was c reated a new bipartisan governing board consisting of a ( fiairman and two members, all three of w hom are salaried and are required to devote full time to the affairs of the Authority. The Authority currently is faced with two major issues of public policy whic h involve its soc ial serv- ice program and its no-cash-subsidy lower middle- income housing program. The Authority's Program of Social Services On December 17. 1959, Chairman Reid .111 nounced that more than 1,000 Authorit) employees (in the classifications of Manager, Assistant Man ager, and Housing Assistant) would attend ten two hour sessions in a human relations training course, developed by the Authority's Social and Community Services and [ntergroup Relations units. Tli is is in line with a major recommendation ol Mr. Preusse's survey of the 1 Authority's affairs. Chairman Reid feels that this training will enable Authority personnel to understand and deal more effectively with problems ai ising from the differing sociological, ethnic and economic backgrounds ol the tenants. As this repot 1 noes to press, State Commis- sioner of Housing |ames Win. Gaynor, and Herman D. Hillman, Regional Director of the federal Public Housing Administration, have an nounced that the costs of the Authority's program of soc ial services should be borne by the City as a part of its total welfare program, without con- tribution on the part of the State or the Federal Government. There are many people in and out of the Au- thority who go further than Mr. Gaynor and Mr. Hillman. They believe that the New York City Housing Authority's mission is public housing and not social welfare, or intergroup relations. Thev hold that the Authority should remain what it was intended to be when it was organized— a real estate operation financed by public funds for the purpose of providing low-rent housing to low-income fam- ilies: that its vole should be that of an "enlight- ened landlord": and that it should not venture into expensive operations, such as social welfare and intergroup relations, for which it is neither organized nor equipped. I am unable to agree with this point of view for three reasons: • From a sociological standpoint: there has been a profound change in the ethnic and racial com- position of the City's low-income population since 1937 when the Authority was organized. This change lias confronted the Authority with problems of human relations which cannot be solved In orthodox landlord-tenant relationships. • From a public policy standpoint: the ethnic and racial composition of New York's public housing population being what it is. the Authority has no alternative to the course which it has now adopted. • From an institutional standpoint: there is no great corporation in the United States which does not have an expertly conceived and system- atic a 11 \ executed company-financed program of human relations.* The same is true of the Armed Services. The Authority should not be penalized for pursing an enlightened policy ol human relations in accomplishing its mission. Soc ial relations, intergroup relations, tenant edu- cation, human relations— call it what you will — * \s far back as 1946 when Peter Drucker published his CON- CEPT OF THE CORPORATION which was a study of Gen- eral Motors, there was evidence of the management's strenuous efforts and eager desire to build a big, happy family within GM. -89- have become a part of the job of public housing management. It is no longer a question of whether it should be done by the Authority. The only ques- tion is how ivell the Authority is doing or can do the job and how the costs of the program should be shared. If this vital area is neglected and projects deteriorate, the marketing of the Authority's bonds in the future could be adversely affected. But more, the Authority will be unable to over- come the stigma which over the years has at- tached to public housing because of a small per- centage of "problem tenants". Uncorrected, this unfavorable climate will continue to invite stren- uous resistance to the public housing which the City needs. The forces of slum formation will intensify. General Otto L. Nelson, Jr., until recently Chairman of the State Commission on Govern- mental Operations of the City of New York, in a public address delivered on January 14. 1960. said: ". . . New York City must devise better and more expeditious ways of assimilating its low- income newcomers. Apart from any other con- siderations, New York, with its many services and other industries, cannot do without them." There are three possible methods of assimila- tion. One is "on the job" training. In the service industries where the newcomers 1001k this is not practical. The second method is to begin at the community level where the newcomers live and make their homes. The third is to do it indirectly by educating their children to city living in the public schools. The second and third methods, which are feasible, complement each other. With all due respect, I do not agree with Com- missioner Gaynor and Director Hillman that the costs of such an assimilation effort is a municipal burden to be borne by the City exclusively. Assimiliation of in-migrants essential to the econ- omy of a city such as New York, which contributes heavily to Federal and State tax revenues, is an obligation which rests squarelv on the Federal, State and City governments. From a moral, eco- nomic and political standpoint, it would seem that its costs should be equitably shared by all levels of government involved in public housing. No-Cash-Subsidy Housing It is generally accepted that under present and immediately foreseeable economic conditions, pri- vate developers operating without governmental aid cannot produce rental housing in the S18-S25 range possible under no-cash-subsidv programs. The no-cash-subsidy operations of the Authority have met a pressing need in the past. There is no ques- tion that this need continues. There is however considerable feeling that the Authority should not continue to build no-cash- subsidy housing, using the City's credit and with tax exemptions not available to private developers. To meet this criticism, the Authority recently proposed an amendment to the Public Housing Law which would authorize it to build public housing and lease the completed projects to non- profit corporations for fifty-year terms for opera- tion as cooperatives. This would open up a new means for financing privately-operated and main- tained housing for middle-income families caught in the price squeeze. Even if this proposed legislation should be enacted, there are aspects of public policy and feasibility to be considered. The plan would put the Authority squarely in the business of building low-cost cooperatives, with city credit and substan- tially full tax exemption, in competition not only with private developers but with experienced and successful institutional, non-profit cooperative de- velopers of middle-income housing. Furthermore, the plan would not solve the prob- lem of providing middle-income rental housing, which is desperately needed. And it is doubtful whether cooperators could be induced to make substantial investment in cooperative apartments in a building which, cooperatively, they may lease hut never own. Nor is it likely that any experienced and financially responsible non-profit organization could be induced to sponsor such a venture. -90- Summary I conclude that the Authority has done an out- standing job of constructing badly needed low- income public housing and lower middle-income housing. It vigorously carried out, its plans to rehabilitate structurally sound tenements, and to acquire and remodel single-occupancy-buildings will not only preserve existing housing stock but eliminate a prime cause of slum formation. Under its present leadership it has improved its management operations and has made substantial progress in correcting the defects disclosed by the City Administrator's 1957 report. From the stand- point ol high public policy, it is beginning to "worry about the ri<>ht questions". The Authority's experiments with new ap- proaches may eventually produce solutions to prob- lems which it has inherited through no fault of its own, and which were undreamed of when it was organized. Middle-Income Housing Publicly-Aided, Privately-Owned Office of the Comptroller The greatest single need of the City today, and lot the foreseeable future, is an increase in the supply of middle-income housing— to rent for $25 (o S50 per room per month, or in the form of cooperatives with carrying charges of $20-825 and down payments of $400 to S700 per room. Not only is there a desperate need for suc h hous- ing but the market for it seems to be unbounded. That need cannot be met w ithout government aid. The variety of aids and the combinations in which they can and have been employed have been described elsewhere in this report. The question arises whether they have been employed in a way to maximize their potential as an incentive in- strumentality to induce private builders to produce the middle-income housing that the City needs. A Uniform Tax Exemption Policy: Investment in New York's Future I have concluded that the most promising pos- sibility to maximize the effect of available aids for middle-income housing lies //; the elimination of uncertainty in the minds of private builders of middle-income housing as to what the amount of tax exemption (or tax abatement as it is commonl\ ref erred to) is to be. This is an important question of high public policy which must balance the City's need for middle-income housing against its needs for tax revenue. The answer rests in the first instance with the Comptroller, as the fiscal adviser of the Board of Estimate, and ultimately with the Board of Estimate itself. I firmly believe, however, that if the Board of Estimate, acting on the advice of the Comptroller, adopted and publicly announced a uniform policy of tax exemption applicable to middle-income housing projects, and one which would apply uni- formly to all such projec ts initiated after the policy had been adopted, much of the uncertainty which now prevails would be dispelled. Excess of Caution: Existing Deterrents Our survey of the situation indicates that middle- income housing developers are substantially de- terred by the fact that each project is passed upon individually as to the amount of tax exemption which will be granted. This is a complex and pains- taking process designed to protect the City's best interests against unscrupulous promoters and builders. It is conscientiously administered. But it is frustratingly slow and uncertain in application; the necessity for it, in my judgment, no longer exists. To be effective, an economic incentive must be definite or readily calculable. Under existing cir- cumstances it is neither. In some cases the tax exemption has been negotiated as a percentage of the total value of the new project, with different percentages being agreed to with respect to differ- ent projects. In other cases the exemption has been expressed as the full amount permitted by law, provided that the housing company paid additional amounts in lieu of taxes. These amounts have varied from project to project based on the Board -91- of Estimate determination of the amount of exemp- tion that would serve the City's best interest. The uncertainty of such a piecemeal approach to tax exemption determination is aggravated by the fact that, under present procedures, agreement on tax exemption is achieved only after the prep- aration of plans and their approval by various City agencies and in some cases by State and Federal agencies as well. Under the individual project ap- proach to tax exemption, this is unavoidable, but it detracts from the incentive value of tax exemp- tion. Preparation of a program and plans for a pro- posed new middle-income housing project in the City of New York requires the expenditure of a large amount of time, effort and money. A sponsor of a middle-income project which depends on tax exemption, however, cannot know whether these expenditures will be recompensed; it cannot know whether the amount of tax exemption to be granted will be sufficient to make the proposed new project economically feasible and desirable. Tli is is particularly true where the sponsors are non-profit organizations (e.g. labor unions and other civic groups), which have built most of the new publicly-aided middle-income housing in the City. These groups will not undertake the sponsor- ship of new housing projects utiless the amount of tax exemption will permit rentals which can be kept within the range that wage-earners and other lower middle-income persons can afford. Uniform Tax Exemption Policy for Middle-Income Housing The moment is opportune for the City to take a dramatic step toward ultimate solution of its middle-income housing problem. I repeat that such a step would be for the Comptroller to recom- mend and the Board of Estimate to adopt and publish a standard policy to be uniformly followed in the granting of partial tax exemption for mid- dle-income housing. This would immediately put any prospective sponsor in a position where he knows in advance whether the amount of the uni- form exemption would enable him to embark upon and complete a program of new construction, at rentals within a price range which the sponsor regards as essential. It has been suggested to me by responsible mid- dle-income housing developers, non-profit and in- stitutional, that the uniform tax exemption should be fixed at an amount of $1 ,500 to $2,000 per room. Such an amount, it is held, would permit con- struction of apartments at rentals of approximately $25 per room per month, with variations depend- ent upon the location of the project and upon whether it is rental or cooperative. In any event, such an amount, or any other standard uniform amount which the Board of Estimate might deter- mine, would have the great advantage of being easily calculable by the sponsor in making his plans. Moreover, it would greatly curtail the delays inevitable in any processing of individual projects. For such a uniform tax exemption policy to achieve maximum benefits for the City in its mid- dle-income housing objectives, it is vitally impor- tant that it be limited to a specified period of time, and available only to middle-income housing build- ers who have begun construction within the period fixed. No Danger of Abuse Under the law as it now exists, there is slight danger that a fixed uniform rule or policy of standard tax exemption could result in undue profits by sponsors undertaking such programs for private profit. The public authorities have and exercise the right to fix rentals in all such projects. The amount of rentals so fixed must be such that the benefits of the tax exemption will enure exclusively to the benefit of the residents of the projects and the City as a whole. The battery of laws now on the books contain elaborate provisions for audit of operations, by the Comptroller of the City of New York, limiting sponsors' profits. These effectively foreclose the possibility of improper use of the tax exemptions made available by the City. -92- Organization Our survey indicates that the administration of the City aspects of the Limited-Profit Housing Companies Act (Mite hell-Lama) and the Redevolp- ment Companies Act, now under the jurisdic tion of the Comptroller ol the Citv of New York, is a carefully conducted operation. In the case of the Mitchell-Lama Law. administered by the Mortgage Banking and Housing Unit of the Comptroller's Office, the function is entirely self-supporting. All salaries, costs and expenses ol this unit are paid out ol the Housing Fund— m ule up of lees received from housing companies, and surplus interest charges. However the Comptroller believes, and has re- peatedly so si, ued publicly, that the functions of the Mortgage Banking and Housing Unit (which has been administering Cit) loans to housing com- panies under the Mitchell-Lama Law since 1 <»",<) ) and the supervision of the Redevelopment Com- panies Law . are misplaced in his office. I concur with the Comptrollei that administra- tion of the Mitchell-Lama Law and ol the Re- development Companies Act should he outside his office but subject to his audit. >» Title I, Slum Clearance and Urban Renewal The Committee on Slum Clearance As far back as 1953 the Mayor's Committee on Management Survey described the City's housing effort as a "truly Stupendous enterprise in the housing field." It then went on to say: "The City Construction Co-ordinator is the coordinating and driving force and serves to give more central leadership in this program than is found in any other field which is sim- ilarly dispersed among the many independent administrative units."* * Op cit Vol. [, Chaptei \ III. "Policy Problems and Manage- ment". The Committee also said at page 231: "The Mayor's Committee on Slum Clearance now consists of officials ol \ ai ions operating agenc ies ol the city. Ultimately it should be a permanent statutory agenev or authority whose operations would be tied in closely wth the long-range plan- ning function of the City Planning Commission." This coordination was accomplished by Mr. Robert Moses through the Committee on Shun Clearance. Since then Mr. Moses and the Commit- tee on Slum Clearance have been attacked on a variety of grounds. Some of these are of a personal character which are not germane to this report. Others apply to the organization of the Committee and the management methods of Mr. Moses, as Chairman of the Committee and its principal exec- utive officer, in the conduct of its affairs as an agen< v of the Hoard of Estimate. The principal criticisms and my commentary can be grouped nuclei a lew major headings: • The Com mil le e tentatively approves a project sponsor before calling for public bids. This is true. But if the Citv introduced competitive bidding at the outset, the acceptability of the suc cessful bidder and his bid would still have to be judged, and the contract negotiated, largely on intangibles. Title I contracts are intricate in negotiation and execution. A vital element is the experience financial responsibility ol the sponsor, the depth of its managerial organization and its ability to adjust to changes in the con tract and specifications that develop after the contract is negotiated. There are many factors to be considered beyond the amount of the bid: integrity, know-how, financ ial resources, experi- ence and. above all. ability to produce. f • Mr. Moses is head of several agencies and cannot possibly devote the time necessary to proper supervision of Title I operations. It seems to me that the real question is not how much time Mr. Moses devotes to the Committee on Slum Clear- ance but the results which the Committee has achieved under his leadership. • The Committee on Slum Clearance is an "ad hoc" group improperly doing the work that \l\ experience with competitive bidding on complex multi- million dollar military procurement contracts in the Federal Government Ins proved to my satisfaction that the highest bidder is not necessarily the best contractor to do a given job. W hat often happens is that the highest bidder is obliged, in order to avoid default, to sub-contract to a company which should have been selected in the first place under a negotiated contract. -93- should be the responsibility of an established agency of the City Government. This criticism, which is most frequently advanced, has its gene- sis in the report of the Mayor's Committee on Management Survey, of which Dr. Luther H. Gulick was Executive Director. This report pro- posed a "Director of Administration" to relieve the Mayor of the operations of the City govern- ment. The plan, which was never adopted, proposed that Mr. Moses' function as City Con- struction Coordinator he put in the Mayor's office "where it would be handled by a special assistant to the Director of Administration." Current agitation by pressure groups urges that the function of the Committee on Slum Clear- ance be lodged in the Department of Real Es- tate or the City Planning Commission. Neither suggestion is practical. • TJie Committee on Slum Clearance relies heav- ily on the part-time services provided by the staff of the Triborough Bridge and Tunnel Author- ity, and on the work of the firm of Skidmore, Owings and Merrill as Coordinating Architects. The best comment on this is one which came to me from an expert on housing policy in the Federal, State and City governments. I received it in response to my invitation to express his views on the reorganization of the agencies con- cerned with City housing. He wrote in part: "I have revised my opinions considerably about the value of a permanent staff, and more and more favor under many circum- stances the greater use of consultants. Civil service salaries and civil service rules, es- pecially in a tight labor market, with some notable exceptions, today do not enable an administrator to acquire a professional staff equal to that which outside organizations can secure. Of course, it burdens the ad- ministrator with greater responsibility for careful selection of the consultant, more definite leadership and general direction." • The Committee on Slum Clearance does not follow the procedure used in other cities of clear- ing a site prior to resale for redevelopment . It is argued that acquisition of the site by the City and its immediate resale to the redeveloper has three great dangers: (1) it enables an unscrupu- lous developer to "milk" the properties before clearing the site; (2) it enables an unscrupulous developer to "milk" the properties and then fail to carry out the contract; and (3) it leads to ruthless and inhuman treatment of tenants to be relocated. These dangers, which existed in the early days of Title I, and resulted in episodes such as "Manhattan town", exist no longer. They have been prevented by the selection and super- vision of responsible sponsors, and by vigilant and strict supervision of the relocation process. In my opinion, the method followed in New York— judged by results— seems far superior to 1 lie procedure followed in other cities where the sites are cleared before sale, and the cities often find themselves with vacant lots, or at the mercy of a "buyer's market". • The major trouble with the Slum Clearance progt am is that there is no coordinated plan for New York urban redevelopment in a "consistent pattern". This is the principal count in the in- dictment of New York's Title I program, which appeared in the ARCHITECTURAL FORUM of September 1959. The writer assumes that a meaningful "coordinated plan" for New York City, which does not even have a modern zoning ordinance, is feasible. How does one evolve a "consistent pattern" of urban redevelopment in a non-totalitarian society, in a city such as New York, where private builders and investors respond only to market opportunities? Summary Viewed from the vantage point of hindsight, there is no question that the work of the Commit- tee on Slum Clearance in its administration of Title I could have been improved by better co- ordination with other City agencies, by better Federal liaison and better public relations. There is little doubt that sponsor selection procedures could have been improved in the early days and that tenant relocation practices by sponsors should have been better supervised in certain instances. -94- But hindsight docs not take into consideration that the Title I operation in New York was a pio- neering effort, launching a daring new concept of cooperation between government and private en- terprise in an all-out assault on the slums, fn this bold venture, the legal and administrative obstacles at all leve ls of government were enormously com- plex. The risks of failure were great, and were en- hanced by the mobilized opposition of powerful and entrenched interests. In this setting, it was to be expected that the launching and administration of the huge Title I program in New York City would be subjec t to a substantia] margin of human error. When these errors occurred they were corrected, either inter- nally or as a result ol public critic ism. Some of the criticism was informed and constructive: some was well-intentioned but uninformed; much ol it was triggered by ulterior motives, and some of it can only be characterized as malicious. I regard Mr. Moses as a great public servant. His contributions to the City's development over the past thirty years speak lor themselves. Thev need no winged words of tribute from me, except to say that, in my opinion, his successgs are due— not to any alleged "ruthlessness" or to the many "hats" that are supposed to be the source of his power— but to a quality of tough-mindedness which "gets things done". Tough-mindedness, as the great Harvard philos- opher William James explained at the turn of the century, is not a hardness of the heart but a tough- ness of the spirit and the intellect. The tough- minded of this world are not "other directed" characters. Thev have a /est lot tackling seemingly insoluble problems, and lot accepting the chal- lenge of the new and unfamiliar. They are not inhibited by conformity to regulations. They are not subject to group dynamics. They know that the answers to the really hard questions, in life or in great affairs, are not "in the book". Thev are masters in the management of risk. One of the best descriptions of this kind of tough-mindedness that I have found appears in an exhortation to leaders of industry. It is so relevant to government leadership today that it bears re- peating here. It is this: "If you are really tough-minded, you will cul- tivate cptalities of initative and venturesome- ness. You will not be afraid to act, even if you act on imperfect knowledge, for you will real- ize that all knowledge is imperfect and experi- mental rather than final. And you will not be afraid to take chances. . . You can never hope to make a perfect budget of income, expense and profit. If you think you are doing so, you are probably playing it too safe. The essence of profit in a changing world is risk and uncer- tainty. Your objective should be, not the avoidance of risk, but the intelligent manage- ment of risk."* One may not like the- philosophy of tough- minded risk-taking. One may prefer the ivory tower of "master planning" to the arena of purpos- ive, driv ing action. But Xew York's redevelopment effort cannot wait for Utopian blueprints. It is of such massive complexity that it cannot hope to achieve even a modest measure of success unless it is in the hands of men with the attitude, training and cptalities that enable them to seize on facts, and make those lads the basis for courageous ac- t ion. Mi. Moses has applied these qualities in ener- gizing the work ol the Committee on Slum Clear- ance in the renewal of the City. Whatever its faults, the Committee, under his leadership, has produced outstanding results. The problem now is no longer one of "evaluating" its work. It is the grimmer one of saving the program that Mr. Moses has launched and. if possible, completing what he had set out to do before he reached his definitive decision to retire as Chairman of the Committee. Without him. the continuance of the Committee would serve no useful purpose. But its work must be aggressively pursued, and its program accom pi ished. * "Tough Mindedness mid ilie Case Method" by Malcolm I'. McNair from THE CASE METHOD \T THE HARVARD BUSINESS SCHOOL (McGraw Hill. 1954, New York). - 95 ~ Resume Any program of housing and urban renewal must be considered in relation to its impact on the City as a whole. This is a matter of common sense. For housing and urban renewal affects not only neighborhoods. Alternative areas in the city, traffic, roadways, zoning, transportation, police and fire operations, and other city programs are also affected. Thus, it is not possible to judge the several housing, slum clearance and urban renewal pro- grams solely on the basis of their individual per- formance, or to say that the whole is equal to the sum total of its parts. The function of judgment is the ability to correlate facts, to be able to judge their value as dissimilar elements, and to have standards of comparison. This is particularly true of the "big picture" of New York's redevelopment effort, which contains many elements. Arterial Improvements Vital to New York City redevelopment, arterial improvements present no serious difficulties once a route is decided upon. The building of Federal- State-City major bridge projects is facilitated by the Office of the City Construction Co-ordinator. and by the Triborough Bridge and Tunnel Au- thority and the Port of New York Authority in the City proper; and by the Long Island State Park Commission (which now includes the Jones Beach State Parkway Authority) on Long Island, east of the City line. There is great flexibility and a minimum of red tape where these public authori- ties are in control of operations. For instance, in the arterial program on the City's outskirts, tenants who have had to be relocated had their houses moved to open areas acquired for this specific purpose. Public Works Site Clearance Clearance for public works projects (including parks, playgrounds, schools, hospitals and other buildings) is getting increasingly difficult if any considerable number of tenants must be moved. Sites for big, new State mental hospitals within the City— which are practically entire villages in Staten Island, the Bronx and Brooklyn— are selected on land which is largely vacant, by cooperation of the Construction Co-ordinator with the heads of State Budget, Public Works, and Mental Health de- partments. Tenant removal is an incident which presents no problem. Housing As pointed out in my Special Report Reloca- tion in New York City, a major difficulty is the increasing trouble where heavy relocation from built-up areas is involved. There is inadequate co- ordination both in site selection and timing of construction between low-income City Housing Authority projects and projects under other agen- cies. To ease the relocation burden, tenant eligibility requirements for Housing Authority projects should be liberalized. Even if the Relocation Law is enacted, dislocated commercial tenants will be inadequately compensated in relocation. Slum Clearance Program In view of Mr. Moses' withdrawal as Chairman of the Committee on Slum Clearance, a real ques- tion arises whether some other new head or group can pick up and handle exceedingly complex proj- ects—such as Lincoln Square, Soundview and Flat- bush Avenue— without loss of time and momen- tum. Conflict on the Future of Title I The construction of full tax-paying housing on Title I sites requires high rents, and has run into popular opposition. It seems necessary that con- struction of full tax-paying housing on Title I sites be balanced with middle-income housing— publicly-aided and privately-owned. Unless such a balanced program is developed, and the relocation problem ameliorated, experienced and reputable speculative sponsors will be difficult, if not im- possible, to find. Present Pattern of Title I Housing Unless a balanced program is worked out, Title f housing will boil down largely to middle-income. -96- • fOt COORDINATION AND UAISON ONIY * v fOtCST, HAN0SCOM CORP NIC heavily subsidized, largely cooperative projects (sponsored by labor and other civic groups) with rentals from $20 to $30 per room. It will take a great deal of Federal, State and City write-down, and reasonably ( heap mortgage money, to expand ;i middle-income program of this kind on some reliable, long-range basis. Mitchell-Lama Program So Ear this program has been used lor small proj- ects mainly on vacant land. It must be expanded to slum areas in combination with other aids. Jamaica Track: Middle-Income Housing The Jamaica Track project proposed by the Construction Co-ordinator, to be built with State aid and no Federal participation, seems to me to be the most important development by far in pointing the way for establishing a future, workable, large sc ale middle-income cooperative program. The Problem of Scale There is a great deal to be said for having a $300 million Slate cooperative middle-income program resulting in 25,000 units or 100,000 rooms for 100.000 people, probably ten projects averaging 25 acres each— with State or City ninety per cent mortgage money at 1 1 ._, per cent interest, and with fifty per cent City real estate tax exemption. But such projects would have to be in built-up slum areas, and public housing at about Sir, a room would be needed, carefully scheduled in advance for tenant removal. Tax Exemption: State Legislation It has been strongly recommended by many au- thorities that an Ac t based on. but less drastic than, the 1920 law exempting new residential housing from taxes for ten years, under proper restrictions as to rentals and costs, would be a most effective way of obtaining additional housing promptly, and without greatly augmented building by public agencies. No-Cash-Subsidy Housing by the New York City Housing Authority This type of rental housing overlaps on Title I, FHA co-ops, Mitchell-Lama and, in outlying sec- tions of the City, on conventional private building without public aid. The strong feeling is that it should be selectively employed in situations where public 1\ -aided, privately-owned construction is un- able to supply the need. Non-Partisan Approach to Housing Because of the vital importance ol State legisla- tion in all aspects of City housing, a non-political, bipartisan approach should be developed between the City and Albany on all housing and urban renewal legislation affecting New York City. The situation is graphically portrayed in a re port b\ Walter MacDonalel, Albany correspondent of the- New York World-Telegram and the Sun, of February iq. ig6o: "Gov. Nelson A. Rockefeller has signed into law 72 bills passed during the six-week-old session. Only one of these had Democratic sponsorship. Even that single Democratic success was co-sponsored by an up-state Republican. " The lone successful Democratic bill, spon- sored by a Bronx Assemblyman, dealt with volunteer firemen." Availability of Funds Planning a balanced program of public and publicly-aided, privately-owned housing for New York City depends on the ability to estimate the availability of future Federal, State and City sub- sidy of one kind or another lor the various inter- related types of publicly-aided housing. During the last decade only 5 per cent of the total housing construc tion in New York City came from publicly- aided, privately-owned residential building as against twenty-three per cent of housing con- structed by the New York City Housing Authority. The crucial factors in planning a balanced pro gram of public housing and publicly-aided, pri- -07- vately-owned housing construction in New York City are: (i) the future availability of funds; and (2) in-migration. Lack of Coordination and Conflict of Objectives Though each agency works well within its own field, there is no agreed program among them which commands any genuine enthusiasm and loyalty. This is particularly true in cases involving heavy tenant relocation accompanied by new hous- ing with high or upper-middle rentals. Obviously, no comprehensive, orderly, coordi- nated future program of slum clearance and urban renewal and rehabilitation is possible under these conditions. -93- Part 8 RECOMMENDATIONS for BUILDING A BETTER NEW YORK POLICY RECOMMENDATIONS Middle-Income Housing 1920-Type Tax Exemption Law Taking the Profit Out of Slums Economic and Social Costs of Redevelopment Non-political Approach to Housing and Urban Renewal Condemnation Practice Assimilation of ln-migrants Conservation Modern Zoning Welfare Housing REORGANIZATION of HOUSING and URBAN RENEWAL AGENCIES - 99 - Part 8 RECOMMENDATIONS for BUILDING A BETTER NEW YORK "Our business is not to see what lies dimly at a distance but to do what lies clearly at hand." — Carlyle POLICY RECOMMENDATIONS Middle-Income Housing i. The City must undertake a vigorous pro- gram of desperately needed publicly-aided, pri- vately-owned middle-income housing which will redevelop blighted and deteriorating commercial areas of the City, where the residential tenant relo- cation problem is insignificant and where the new housing will utilize existing facilities and services. The City must recapture the class of job-holders and bill-payers which it has lost to the suburbs in the past twenty years. This can be done mainly by building publicly-aided, privately-owned middle- income housing— rental and cooperative— in the City core. Subsidized middle-income privately-owned hous- ing, construction of which involves clearance of residential slums in the City core, is enormously difficult , often impossible. There, the problems of tenant relocation are almost insuperable under present conditions of over-crowding and housing shortage. It can be accomplished by building such housing on sites in blighted or deteriorating commercial areas. This does not involve residential tenant re- location in a significant degree and permits reason- able control of new building density. f rom an intensive study of the enormous prob- lems of relocation and building middle-income housing in the City (ore. I am convinced that mid- dle-income housing in the City core is feasible only through the redevelopment of blighted commercial areas. All available Federal, State and City aids should be concentrated in this critical sector. 2. The Board of Estimate, on the advice of the Comptroller of the City of New York as the fiscal adviser of the Board, should adopt and publicly an- nounce a uniform rule of tax exemption, applic- able for a specified period of time, to all middle- income projects approved as to location and den- sity, on which construction is begun during the period specified. This would eliminate the deterrents which pres- ently exist due to the fact that prospective sponsors of middle-income housing— rental and cooperative —are unable to know what their tax exemption w ill be until after a great amount of work and ex- penditure of funds in the preparation of plans, etc. With the adoption of a uniform policy of tax exemption of this kind, responsible and experi enced middle-income housing developers will have a readily calculable base on which to plan their projects. — too — The Board of Estimate should determine the annual housing budget. This budget should repre- sent the public and publicly-assisted housing to be undertaken in the ensuing year, by type, borough, site and rent class. Such a budget should consist <>t specific projects with an allocation of resources to each of the proj- ects in the budget according to the type of aid re- quired, such as tax exemption, city credit, propor- tional share of Federal grants, etc. In this way. the review of the projec t by the City Planning Commission for conformance to the mas- ter plan, and by the Board of Estimate for the con- formance of the project to the annual program approved by the Board will be largely routinized, and existing difficulties due to the processing ol individual projects will be greatly reduced. During the past decade. 1950-1959, private hous- ing accounted tor seventy-two per cent ol total residential construction in the City; public housing for twenty-three per cent and publicly assisted pri vately-owned housing lor only five per cent. Am middle-income housing program must, in order to make any dent in the renewal of the inner core of the City, raise its percentage of total resi- dential construction at least to fifteen per cent. This (an be expedited In the annual housing budget plan which will eliminate present uncer- tainties and delays due to separate multi-agency, often duplicative-, processing of indiv idual projec ts. 1920-Type Tax Exemption Law |. The Board of Estimate should carefully con- sider the desirability of the City sponsoring State legislation for tax exemption of new housing of all categories, along the lines of Chapter qji) of the Laws of 1920. During the course of my survey, I have given intensive study to the desirability and feasibility of State legislation along the lines of the 1920 law, enacted to cope with the housing shortage which then existed in New York City and in other cities of the State. The 1920 law smashed the housing deadlock then prevailing in the short period of three years.* It was sharply criticized because it did not produce middle-income housing and low-income housing. This was due to the fact that there was no public housing at the time. Middle-income housing was not subsidized, and cooperative housing was re- garded as '"Socialistic". Today, public housing is heavily subsidized. Middle-income housing is partially subsidized by tax exemption, reduced interest charges: and is ustiallv sponsored by limited-profit companies or bv well financed non-profit organizations. More intensive construction resulting from an "across the board" tax exemption law. in my opin- ion, would have the advantage of being attractive to large developers without whose efforts the hous- ing shortage cannot be overcome. It would provide a major impetus through the "filtering clown" pro- cess to increasing the total housing supply. Taking the Profit Out of Slums -,. Take the profit out of slums. No amount of code enforcement or tax-abated housing rehabilitation, or tenement rehabilitation by the New York City Housing Authority will be able to keep pace with slum formation until and unless the profit is taken out of slums by taxation. Cook County (Chicago) has begun a re- valuation of slum properties based on the great profits they yield to the slumlords. Valu- ations of slum properties are expected to rise as much as sixty-three per cent. f). Call on The New York Delegation in the Con- gress lo join in a bipartisan demand for legislative amendments to the Federal income lax laws making capital gains from slum property subject to tax at the regular rates. The City must take every means at its disposal to overcome the effect of the Federal Income Tax ' Report of Com mission of Housing and Regional Planning to Gov. Alfred E. Smith and to the Legislature of the State of New York on Tax Exemption of New Housing, March 14, 1924. — lOl — structure, the depreciation and capital gains pro- visions of which make slum ownership a highly profitable speculation for slumlords. Example: A slum owner in a congested area, where need for shelter is desperate and where the rents are what the traffic will bear, need not maintain the property. He pockets his annual depreciation allowance— year after year and after he has written down the book value of his slum property to zero, he then sells it at a price that capitalizes his high rent roll. Having made the sale, he pays a twenty-five per cent capital gains tax: on the difference between the book value and the sales price. He then acquires another slum property and goes through the same process again. The New York Delegation in Congress should demand saturation inspections by the Bureau of Internal Revenue of the income tax returns of owners of slum properties in New York City to determine the amount of back taxes and penalties due as a result of their pocketing any improperly claimed depreciation allowance. Economic and Social Costs of Redevelopment 7. The City should consider sponsoring the en- actment of legislation lo provide for compensation to small commercial tenants whose business is up- rooted as a result of City redevelopment and who have no adequate remedy in condemnation pro- ceedings. The Board of Estimate has taken a giant step to humanize the relocation of residential tenants dis- located by redevelopment. It should now explore the possibilities of simi- lar action through legislation in the case of the un- fortunate small commercial tenant who, under the law as it presently exists, loses his means of liveli- hood, and has no adequate recourse. I have discussed this problem at some length in my Special Report on Relocation In New York Citv and in this report.* It is my opinion that as * Page 81, The Commercial Tenant. a matter of public policy and ordinary justice. New York Citv, where the impact of redevelopment on the individual is most onerous, should follow the lead of Canada and Britain in establishing the principle that the community as a whole should bear the economic and social costs of its progress. Non-political Approach to Housing and Urban Renewal (S. The enormous importance of the housing and urban renewal problems of New York City requires a non-political, non-partisan approach to all housing and urban renewal legislation affecting the City. In Foreign affairs and matters of defense at the national level, legislation has been traditionally handled on a non-partisan basis. Housing and Redevelopment bills affecting New York City are of such vital importance to all of the people of the City that they should not be made the subject of partisan politics in the State Legis- lature. Condemnation Practice 9. Request the President of the Association o\ the Bar of the City of New York and the President of the New York County Lawyers Association lo designate, as a public service, a joint panel of lax and condemnation specialists from their member- ships lo investigate condemnation practices and procedures and to recommend legislation designed to (1) take the windfall profits out of condemna- tion; and (2) allocate equitably the economic and social costs entailed for those adversely affected by condemnation and, unable to share i)i its awards. A survey of condemnation awards made by the Tax Policies Advisory Committee of the Citizens Housing and Planning Council confirms my own findings in a survey of condemnation award pat terns in slum clearance and urban renewal. Condemnation awards in the C.H.P.C. study ran sixty-six per cent above assessed values and, even after making allowance for equalization, they ex- — 102 — ceeded market values by fifty per cent. This, in gen- eral, accords with the pattern of my own findings. If assessments are too low, either (a) the City is sustaining huge losses in revenue which it badly needs; or (b) other properties are highly overtaxed to absorb the cost of subsidizing undertaxed slums. If awards are too high, the owners of condemned properties are receiving windfalls involving mil- lions of dollars without bearing any share of the social and economic costs of small businesses dis- located by condemnation . Assimilation of In-Migrants 10. The City must adopt new techniques i<> assimilate its in-migrants more effectively. This is not a matter of "'welfare" . It is a matter of eco- nomics and hitman relations. The New York City Housing Authority has adopted a far-sighted program of tenant relations lor this purpose which should In vigorously pur- sued and substantially improved and institutional- ized on the basis ol .1 (lose control and periodic review ol lesults by the City Administrator. New York City sc hools, where children ol new- comer in-migrants of rural origin are pupils in significant numbers, should introduce mandatory courses on the essentials ol metropolitan citv liv ing as a major part of their good citizenship cur riculum. Where a language barrier exists, as in the case of the c hildren of in-migrants from Puerto Rico, these courses should be developed in close collaboration with the local offices of the Migration Division of the Department of Labor of the Commonwealth ol Puerto Rico. Conservation 11. Don't tear down desperately needed, struc- turally sound tenements which have been recently rehabilitated , or wliicli the owners are willing to rehabilitate, or which can be rehabilitated with available aids. The City not only has a shortage of standard housing, it has a desperate shortage of substandard housing. It is in this critical area where effort should be concentrated. The programs which the City has initiated for this purpose have limited objectives, but these objectives must be vigorously pursued if they are to achieve their ends. Specific- ally: The program for granting tax abatements to owners of residential property as an incentive to rehabilitation should be set up on a permanent basis .is a part of the City's Neighborhood Con- servation program. In all planned demolitions the praiseworthy "balanced neighborhood" objective should at all times be consistent with the City's need to save existing structurally sound buildings which (1) owners have recently rehabilitated; or (2) which owners are willing to rehabilitate; or (3) which can be rehabilitated with available government aid. There is no sense in hav ing the New York City Housing Authority attempt to rehabilitate tene- ments with public funds if other City agencies in good faith undertake to demolish a significant portion of the City's structurally sound housing supply also with the aid of public funds. The so-called "bulldozer" slum clearance meth- ods have been condemned as unnecessarily destruc- tive of institutional and human values in tearing down dwellings which, though theoretically "sub- standard", were not slums, were decently main- tained and represented irreplaceable dwellings for the majority ol their inhabitants. Every possible assistance should be given the Department of Buildings to enable it to carry out its I unctions of Code Enforcement. The Office of the Citv Administrator should survey the staff and personnel requirements of the Buildings Depart- ment and report to the Mayor as to what increases in resources are necessary to enable the Depart- ment effectively to carry out an intensive code en- forcement mission. 12. Mobilize the full managerial resources and know-how of the New York City Housing Author- - 103 - ity in an all-out drive to conserve and utilize exist- ing structurally sound housing. The Housing Authority should develop a long- range plan to acquire buildings consisting of two, three or four stories in which a store takes up the street floor and the rest of the building is vacant. These structures can and should be rehabilitated by the Authority, and after rehabilitation they can be managed either by the Authority or by the Department of Real Estate. This will result in a progressively significant addition to the usable housing inventory of the City at acceptable cost. To supplement its rehabilitation program, the New York City Housing Authority should consider adopting a policy of building a greater proportion of larger apartment units for large families who are now living in substandard units and who can- not afford to pay the current market price Eor de- cent quarters. The Housing Author ity should consider the sys- tematic development of vest pocket projects to house relocated families as well as welfare clients who now must be herded in substandard but ex- pensive housing. The buildings might be managed by the Department of Real Estate as a part of its relocation and welfare housing function. 13. Initiate a program to mobilize the Welfare Department's rent dollar in the war against slums, to decongest existing single-room-occupancy build- ings and eliminate many slum dwellings. This would give the City an investment instead of the subsidy -which now goes to the slum*,. 14. The New York Delegation in the Congress should press for legislation and appropriate admin- istrative action by the Housing and Home Finance Agency and the Department of Defense to finance a massive program of slum clearance in Puerto Rico. Many Puerto Rican in-migrants who come to New York do so to escape the horrible Santurce Canal system. My conferences with Commissioner Moses, and with New York, Washington and Puerto Rican experts on the subject of the worst slum area in Puerto Rico have convinced me that it could be reclaimed by an integrated project of slum clearance, reclamation, housing, industry, river and harbor improvements. This would move some 15,000 families from a grossly substandard area at a fraction of the cost which is annually expended for public housing, while substantially lessening the pressures of in- migration from this Puerto Rican slum area. The project could be undertaken in coopera- tion with and perhaps even by an exchange of sub- sidies with the Corps of Engineers. It would con- tribute to the national security and assist signifi- cantly the cause of intergroup relations in the United States and in New York. Modern Zoning 15. Replanning the City's housing and renewal effort, in the long run, will depend on modern zoning. Every effort should be made to adopt appropri- ate zoning amendments which will further the City's housing and renewal effort. The City's basic problem is congestion. It is cur- rently dealing w ith one aspect of the problem, con- gestion of population per room. In the long run, this effort will be self-defeating unless it establishes adequate control of density of population per acre. There is no point in tearing down old three and four-story tenements, which though "substandard" provide adequate shelter at low rentals, only to re- place them by skyscrapers in the commercial dis- tricts and high rise multi-family structures in the slums which may aggravate population densitv to intolerable levels. Welfare Housing 16. The Department of Welfare's responsibility to house and relocate its clients should be gradu- ally phased out and transferred to the Department of Real Estate. As indicated in my Special Report on Rkloca- tion I\ New York City, and in this Report, Com- missioner of Welfare Dumpson is of the opinion that housing and relocation of its clients is not a — 1 04 — proper responsibility of the Department of Wel- fare under the law. I agree. I therefore make the above recommendation be- cause the Department of Real Estate is being or- ganized along the lines proposed by me to super- vise the process of tenant relocation on a City-w ide basis as and when the requisite State legislation is enacted. It is organ i/ed to find and allocate avail- able housing. The office of the City Administrator should im- mediately survey the situation in the Department of Real Estate and the Department of Welfare, and report to the Mayor on an appropriate schedule for the transfer of functions. - 105- REORGANIZATION of HOUSING and URBAN RENEWAL AGENCIES Need for Agency Reorganization 17. The Mayor and the Board of Estimate must make and effectively implement treo decisions of high policy on which the future of the City's hous- ing and urban renewal will depend: (a) They must establish and build up from scratch a new agency to consolidate the functions and coordinate the programs of the various agen- cies now engaged in housing, urban renewal, slum clearance, and neighborhood conservation. (b) They must endow the agency so created with the power, authority, status and resources com- mensurate with the responsibility delegated. • Such an agency should with all deliberate speed take over and carry on the functions and pro- grams of the Urban Renewal Board, and the Committee on Slum Clearance; and the Neigh- borhood Conservation functions now in the Of- fice of the Deputy Mayor. • As and when necessary State legislation is en- acted, the agency should assume the housing functions now lodged by law in the Office of the Comptroller under the Redevelopment Com- panies Act and the Limited-Profit Housing Com- panies Law. • Such an agency must have a built-in ex officio mechanism of coordination at the policy level with the heads of the City Planning Commission and the New York City Housing Authority, and ex officio with the heads of such other City agen- cies as may be deemed necessary or appropriate. • It must have a built-in ex officio mechanism of coordination and operational liaison at the tech- nical level with all City agencies responsible for or affected by any aspect of housing, urban re- newal, or tenant relocation. • It must have a built-in mechanism for enlisting the cooperation of business, financial, industrial, civic, labor, educational and all other elements which have a stake in BUILDING A BETTER NEW YORK. Proposed Organization Purpose: The proposed organization must first of all effect an orderly transfer of the existing agen- cies whose functions it must assume. It must pre- serve and carry out the massive existing programs of the Committee on Slum Clearance. It must ef- fectively guide the course of development of the West Side Urban Renewal Project. It must re- survey the availability of Federal funds and their allocation as between pending Title I projects and other claims. It must prepare itself to take over the existing housing functions and programs now in the Comptroller's Office, pursuant to the Limited- Profit Housing Companies Law and the Redevelop- ment Companies Act, as and when the necessary State legislation is enacted. It must place the Neighborhood Conservation program on a solid footing and enhance its scope. It should be the spearhead for the vigorous implementation of the substantive policies which I have recommended, either directly or through the cognizant City agencies. Organizational Philosophy: The City now faces a situation dramatically comparable to that which faced the Federal Government in World War II when the multiplicity of war production agencies, their policy conflicts and their working at cross purposes led to the organization of the all-powerful War Production Board. I have applied the lessons — 106 — of this experience in the organizational proposals that I have made. I have rejected as impractical proposals that have hcen urged upon me to place the new organization in the City Planning Com- mission, in the Department of Real Estate, or in the Office of the City Administrator. • The City Planning Commission has fixed re- sponsibilities under the City Charter. It is a quasi-judicial agenc) with functions which, to be properly discharged, must be administratively divorced from operations, operational planning and operational programming. To vest opera- tional housing and urban renewal Functions in the City Planning Commission would he to place its Chairman in a position where he would Ik- obliged to review, in his policy capacity as a member of the Commission, substantive matters which he may have initiated in an operational capacity. I agree w ith Mr. Felt that such a power interlock would be- intolerable. • The Department o\ Real Estate. Housing and m ban renewal polic\ and operations as the\ exist and as they are likely to develop, are es- sentially different from those of the Department <>l Real Estate. The principal role of the Depart incut in housing and urban renewal should be to ( i) establish and maintain correlation, super- vision and audit ot tenant relocation on a C.it\ w ide basis: (2) provide decent housing for wel- fare recipients to prevent welfare funds from subsidizing slums: and H) maintain liaison with the new agenc \ to coordinate site selection and phasing of construct ion w ith relocation resourc es. • The City Administrator. As presently organized this office is the management staff arm of the Mayor. It is neither designed nor equipped nor should it be asked to undertake the policy and operating functions of a consolidated housing and urban renewal agency. Modern management in government, business and finance is not a matter of organization charts. It is a matter of the skills of the men who manage the organization. These skills are of three different types, and function at three separate levels: • Conceptual Skill.* This involves the ability to see the enterprise or government effort as a whole, and how the various functions of the organiza- tion depend on and are affected by one another. Conceptual skill is the coordinating skill. • Human Skill. This involves the ability to work with others. It is essential to administrative ex- cellence on all levels. • t echnical Skill. This involves the abilit\ and experience to perform the technical or spec ial- ized activities of an organization. The Problem of Mobilizing Managerial Re- >»niN'v 1 he gravest problem that the new organi- zation will lace, and one which it must tackle im- mediately, is that of recruiting a top and middle management staff of a calibre capable of coping with the complexities and difficulties which ti will encounter immediately. The new organization w ill have to be built up bom scratch because: • For more ih. in twenty-five years, inspiration and driving force behind the City's physical de- velopment has been Robert Moses and his highlv competent and dedicated staff in the Triborough Bridge and Tunnel Authority. • The Triborough Authorit) structure has given Mr. Moses a latitude and freedom ol action to which no head of am regular Cit) agenc\ could hope lo aspire. • I he rriborough top management team, undei Mr. Moses' direction, provided the drive for the work of the Committee on Slum (lien, nice ovet the past decade. Thai energizing force will dis appear with Mr. Moses' retirement. Whpevet lakes over must assume the build-up ol 1 new organization from top to bottom. • An inventor) ol resources indicates thai the Committee on Slum Clearance has a small staff tex Triborough) to handle a billion dollar pro- • Chester I. Barnard, former President of the New Jersev Tele- phone Company, describes conceptual skill thus: "... the essential aspect of the (executive) process is the sensing of the organization as a whole and the total situation relevant to it." FUNCTIONS OF AN EXECUTIVE, Cambridge Harvard Uni- versity Press 1948. page 235. - 107- gram. Staffing is minimal in the Mortgage Bank- ing and Housing Unit, the Redevelopment Com- panies Unit, the Urban Renewal Board, and in the Office of the Deputy Mayor which handles the Neighborhood Conservation Program. This is not a solid base on which to build an effective housing and redevelopment program for the fu- ture of New York City. Leadership. Housing and urban renewal is large- ly dependent on government action— legislative and executive. The leadership of the new organization cannot be parochial. It must know government at every level and how to achieve its objectives through government action. It must be public rela- tions oriented— from the standpoint of winning the respect and cooperation of the various elements- finance, business, civic and community— that make- up the power structure which can make or break the City's housing and renewal effort. Management Incentives. A permanent housing and urban renewal organization will take time to build. It will cost money— just as the recruitment and build-up of any successful business or indus- trial management costs money. But whatever its costs, the City must be prepared to pay the price- in salary structure and status as an indispensable investment in its future. New York's redevelop- ment effort will not be successfully organized and led by men who can be obtained "on the cheap". The great incentive for those willing and able to tackle the City's housing and renewal effort is its enormous challenge to their ability to manage, intelligently and skillfully, its massive risks and to produce results. Such men must be given the au- thority, power, status and resources commensurate with the responsibilities which they accept. The organization which is recommended is that which I believe necessary to the successful reor- ganization of the City's housing and renewal effort. It is charted and described at the close of this Report. It can be implemented by action of the Mayor and the Board of Estimate immediately with re- spect to the transfer of all functions, except those presently vested in the Comptroller's office. - 108- ANNEX FOR RELEASE THURSDAY, August 20. 1959 P M CITY OF NEW YORK FRIDAY. August 21, 1959 A M OFFICE OF THE MAYOR Mayor Robert F. Wagner today announced the designation of J. Anthony Panuch. New York lawyer and a leading authority on governmental organization, as his Special Adviser on Housing and City Renewal. The Spec ial Adviser will be responsible solely to the Mayor, will report directly to him, and w ill work out of his office. Today's action fol- lowed steps taken by the Mayor to strengthen and expand the membership of the Slum Clearance Committee, and was taken with the approval of the Board of Estimate. Mr. Panuc h will develop and submit to the Mayor, not later than February 1, 1960. specific recommendations for a comprehensive city policy and program for housing and urban renewal, including correlation ol the City's functions, policies, programs, plans and operations in the- held of publicly-aided private housing, slum clearance, tenant relocation, and neighborhood conservation. The Special Adviser's report will also include proposals for such organizational re- alignments and legislation as may appear necessary and appropriate to implement any substantive changes thai he may recommend to the- Mayor. Prior to the preparation and submission of his report to the Mayor, Mr. Panuch will survey and evaluate the soundness ol existing policies, programs, plans and organizational alignments within the area of his assigned mission. In this connec tion he will consult with and consider the suggestions, opinions and proposals of all appropriate officials of the City Administration. ResjMHisible officials of Federal and State- agencies — having jurisdiction in the held of publicly-aided, private housing— will be consulted regarding such legislative, policy and procedural changes as may appear to be desirable to improve the efficacy of Federal- State-City cooperation. The Spec ial Adviser will also invite and consider the suggestions and proposals of all responsible c iv ic . business, community or other groups w ho have a legitimate interest in the subjec t matter under survey. The Mayor said he was confident that Mr. Panuch's effort would be welcomed by all elements of the City Administration, and would receive the fullest cooperation of all officials exerc ising responsibility in the area of the survey. In making his announcement, the Mayor stated: "The Board of Estimate and I are gratified that it has been possible to secure the professional service of Mr. Panuch. on a lull time, exc lusive basis, to make this independ- ent survey and report. The problems of adequate housing, slum clearance, urban renewal and neighborhood conservation are vast in scope, and all-pervasive in their impac t on every segment of the City's population. "Operating in this area at the present time are The City Housing Authority, The Slum Clearance Committee, the Urban Renewal Board, The Building Department, The - 109- Office of the Comptroller, The City Planning Commission, and The Department of Real Estate. Evaluating the programs and activities of these seven bodies as well as the new Neighborhood Conservation Program is, in my judgment, a conceptual task aimed at a long-range goal, which requires professional skill and practical experience in a highly specialized field. "Mr. Panuch's project will not delay current housing and renewal activities of any of the agencies concerned. It will embrace the planning now in progress under the direc- tion of Deputy Mayor O'Keefe envisaging a long-range program of slum eradication. "Mr. Panuch's unique background and impressive record of success in governmental reorganizations of complexity are matched by his qualities of energy and demonstrated ability to achieve practical results. His experience with the Federal and State governments, and with the Congress and his standing and reputation among the business leadership of the City and in the nation should ensure a broad base of public support and confidence. "I have faith that this designation will prove to be a major step to the solution of the City's long-range problems in the massive and inextricably interrelated tasks of slum clear- ance, urban renewal and neighborhood conservation." Stressing the nation-wide significance of urban renewal, the Mayor added: "Next to world peace, the renewal of the great cities of America's urbanized society is the most vital task of the future, and one on which the nation's economic prosperity and social well-being will largely depend. "Nowhere is the task of urban renewal more exacting and significant than in New York — the domicile of the United Nations, the center of world communications, and the home office city of much of American industry and finance. If we tap our enormous res- ervoir of brains, skills, and expert experience, and enlist a broad base of public and com- munity support for the renewal of New York, we can face that challenge with confidence." — 1 10 — Proposed New Organization for Housing and Redevelopment in New York City with a <» Statement of Functions — mi — Statement of Proposed Functions within the HOUSING and REDEVELOPMENT BOARD HOUSING AND REDEVELOPMENT BOARD • Develop City-wide coordinated and integrated housing and redevelop- ment programs for presentation to the Board of Estimate. • Develop City-wide housing and redevelopment operational program within the approved plan of the Board of Estimate and within the framework of the City Planning Commission's master plan. • Determine broad policies to govern the operations of the Board, and the review of its operations. • The Chairman as the Chief Executive Officer of the Board will: • Advise the Board of Estimate on all housing and renewal matters. • Represent the City in dealing with State and Federal agencies on all housing and redevelopment matters. • The Chairman of the Housing and Redevelopment Board is to be the Chairman of the Policy Coordinating Committee, Chairman of the Interagency Technical Coordinating Committee and Chairman of the Citizens' Housing and Redevelopment Council. ADVISING THE BOARD will be: POLICY COORDINATING COMMITTEE. • Advise the Board on policy matters affecting housing and non- residential redevelopment in the City. • Advise the Board on items to be included in the City's annual program of housing and non-residential redevelopment to be pre- sented to the Board of Estimate. INTERAGENCY TECHNICAL COORDINATING COMMITTEE. • Advise the Board in the development of a coordinated City-wide program which reflects the views of City agencies directly concerned with and atfected by housing and non-residential redevelopment. CITIZENS' HOUSING AND REDEVELOPMENT COUNCIL. • Advise the Board on all City housing and redevelopment matters. • Suggest criteria for prequalifying sponsors. • Provide for maximum participation bv communitv and civic groups. ASSISTING THE BOARD will be: LEGAL UNIT: Act as house counsel for the Board. • Furnish the Boaril such legal advice and counsel as shall from time to time be required. • Represent the Board in non-litigated legal matters other than those performed by the Corporation Counsel. • Develop and review contracts negotiated by the Board. • Recommend and draft changes in the law and pending legislation affecting the operations of the Board. PUBLIC INFORMATION UNIT. • Develop and administer a comprehensive public information program for the Board covering all aspects of its housing and non-residential redevelopment program. • Develop informational and educational material for prospective sponsors, community and civic groups, and for the general public. • Deal with representatives of the press, radio, TV and other com- munication media pertaining to the Board's activities. STAFF AND SERVICE ASSISTANCE TO THE BOARD PROGRAM SUPERVISION AND SERVICES. • Supervise and regulate sponsors receiving City aids. • Negotiate with owners on rentals, loan payments, etc. • Act as banking and general management agent for the City's housing and non-residential redevelopment program. • Service mortgages. • Aid builders in dealing with the various agencies involved. REDEVELOPMENT PLANNING AND RESEARCH. • Develop the specific program for housing and redevelopment to implement the City Planning Commission's master plan. • Maintain close liaison with the City Planning Commission and the Housing Authority on all housing and redevelopment matters. • Prepare appropriate reports and plans as required by Federal, State and City agencies pertaining to the Board's operations. • Develop a research program to evaluate on a continuing basis the City's needs and accomplishments in housing and redevelopment. • Develop and maintain appropriate statistics. FISCAL MANAGEMENT. • Administer all funds assigned to the agency for its operation, e.g. Federal grants, rehabilitation revolving funds, etc. — 1 • Develop the necessary svstems and controls for the proper allocation and disbursement of these funds. • Vdvise the Board on all fiscal matters pertaining to Federal. State, and City funds applicable to the Board's operations. • Recommend and administer the sums to be charged sponsors for mortgage servicing, interest charges, etc. • Conduct studies and recommend to the Board the amount oi tax exemption to be recommended to the Board of Estimate. • Conduct studies to determine combinations of aids to produce the greatest amount of housing at the least cost to the City; and provide the greatest return to the City in the form of increased taxes. MANAGEMENT AND ADMINISTRATION. • Develop and recommend the appropriate organization and pro- cedures to carry out the transitional organization and to integrate the transitional organization into the final organization. • Develop and maintain a reporting and control svstem for the opera- tions of the Board. • Provide management advice and assistance to all organizational units. • Develop, administer and provide the personnel, budgeting, purchas- ing, internal accounting and controls, and the general administrative services required bv the organizational units within the Board. OPERATIONS PROJECTS IN PROCESS. • Complete all Title I and limited-profit projects presentlv under construction and in advanced planning. Note: This unit is to be dissolved on the completion of t in rent projects in process involving Title / and limited-profit (Mitchell-I.ama) aids. 'The staff now involved in performing the necessary actwities pertaining to these projects should be transferred intact to the Housing and Redevelopment Hoard. The Chairman is to assign a Hoard member to effectual! the completion of all projects in firocess. HOUSING REDEVELOPMENT. • Implement the Board's housing redevelopment program by enlisting and negotiating with private housing developers, and allocating the various public aids. • Administer the City's program in the assembling of sites, granting of loans and tax exemption for private housing. • Prepare applications to and negotiate with State and Federal agencies administering housing redevelopment and renewal aids. • Coordinate with appropriate City, State and Federal agencies con- cerned with the City's housing redevelopment. NON-RESIDENTIAL REDEVELOPMENT • Implement the Board's non-residential redevelopment program bv enlisting, and negotiating with private non-residential developers, and allocating the various public aids. • Administer the City's program in the assembling of sites, granting of loans and tax exemption for non-residential redevelopment. • Prepare applications to and negotiate with State and Federal agencies administering non-residential redevelopment and renewal aids. • Coordinate with appropriate City, State and Federal agencies conf cerned with the City's non-residential redevelopment. Xote: During the transitional period a Hoard member is to be assigned by the Chairman to be the Commissioner in r/(»)»< of both the Housing Redevelopment Unit and the Son- Residential Redevelopment Unit until the Projects in Process Unit is dissolved. At that time the Chaiiman will assign one Hoard member as Commissioner in charge of the Housing Redevelopment Unit and the other Board member in (barge of the Non-Residential Redeveloj>ment Unit. NEIGHBORHOOD CONSERVATION. • Develop and administer a neighborhood conservation program aimed at conserving and preserving existing housing. • Provide aid and assistance to owners to make necessary repaiis and to keep buildings from deteriorating. • Promote the cooperation of City agencies, community groups, tenants and landlords to conserve and preserve existing neighborhoods. • Develop and administer in selected areas programs to strengthen code enforcement. 2 — See fold-out for chart ~- v TRANSITIONAL ORGANIZATION: HOUSING AND REDEVELOPMENT BOARD BOARD OF ESTIMATE MAYOR < Policy Coordinating^ Committee S* / Interagency < Technical Coordinating Committee HOUSING AND REDEVEIOPMENT BOARD NEW YORK CIIY HOUSING AUTHORITY CITY PLANNING COMMISSION IB) Compoiad of Top RopmtntOlIm HOUSING AND REOEVEIOPMENT BOARD BUllDINGS DEPARTMENT CITY PLANNING COMMISSION NEW YORK CITY HOUSING AUTHORITY INTERGROUP REIATIONS COMMISSION OEFICE OF THE CITY CONSTRUCTION COORDINATOR OTflCE OF THE COMPTROUER REAL ESTATE DEPARTMENT Program Supervision & Services HOUSING AND REDEVELOPMENT BOARD CHAIRMAN &TWO MEMBERS Legal STAF F & SER VI Redevelopm'nty Planning & Research OPERA IT Public Information C : PROGRAMS Fiscal ■ Management T I O N S Citizens' Housing and Redevelopment Council Management - and , Administrat'rV namhar to oct 01 Commiitionar of tha Pfo/aclt III Proc.ii Unit lo handle cut- ronf Tille I ond limit.d Piofll Pro|oclli hoodad by a boo'd mamber ofFxo daiionotlon of Cetnmittl Projects in Process Housing Redevelopment Non-Residential Redevelopment Neighborhood Conservation A P. FOREST. PIANOSCOPE CORP. N Y C.