Document jBJ7GJ1gwdVLMMjao7jD42nVN

N39078 0007-HUD-000003389 s t * * ( ff PUBLIC BOUSING TRENDS IN NEW YORK CHY ty EDWIN L. JffANLAN THE GREENWICH SAYINGS BANK 1356 BROADWAY, NEW YORK, N. Y. Submitted in partial fulfilment of the requirements of The Graduate School of Banking conducted by the. American Bank ers Association at Rutgers University New Brunswick, June 1952 0007-HUD-000003390 It 0007-HUD-000003390 0007- H U D-000003390 SSi PREFACE Public bousing has been the subject of considerable controversy in recent years. New York City has been in the spotlight of this con troversy, due to the magnitude of its public housing program under the New York City Housing Authority. Notwithstanding, bankers, generally, know relatively little about the dynamic economic, social and political forces which generated the Authority into being and eventually resulted in its becoming the nation* s largest landlord. This lack of knowledge can be partly attributed to the fact that there is nowhere available, at present, any comprehensive information under one cover portraying the whole broad panorama of the New York City Housing Authority. With the exception of one commendable thesis, submitted in June, 1951, covering the operational phases of 35 of the Authority's housing projects, most of the material on this subject is largely restricted to annual reports and statistical figures. The purpose of this thesis is twofold. The first is to assemble, in one easily understandable treatise, all pertinent information relating to the New York City Housing Authority, from the very first roots of initial U 0007-HUD--000003391 0007-HUD-000003391 0007-H U D-000003391 ; Federal intervention in the field of housing, during World War I, to the' ' present time.* No attempt will he made to examine, in any detail, the operational phases of the Authority's projects, since that was amply ' covered in the thesis previously referred to. Further reference to that work will he made herein, later. It is ay hope, therefore, that the first part of this thesis, the factual portion, will serve as a basic information guide for bankers who . desire to implement their knowledge on this subject in order that they might render a more valuable service to the community. Moreover, since the work of the New fork City Bousing Authority is emulated hy housing authorities throughout the nation, it is hoped that this material will be generally useful to bankers evexywhere. The second purpose of this thesis is to undertake a critical analysis of the Authority* s work, predicated upon this writer* s considered opinion, after a careful evaluation of all facts presented. In this phase of the thesis I will endeavor to show how, after World War II, the Authority strayed far afield of its original functions of clearing slums and provid ing decent housing for low-income families exclusively. A nunfeer of other deficiencies in the Authority* s program will also be pointed out. The oredit and debit sides of public bousing in New York City will be evaluated and, in arriving at conclusions, a series of suggestions and corrective measures will be explored and offered on the premise that the Authority could function more effectively. No attempt will be made in this thesis to evaluate the forces which produced and nurtured slums and sub-standard housing in Hew York City. That ill 0007** HUD-00000 3 392 0007-HUD-000003392 0007-H U D-000003392 ' subject has been appropriately end adequately covered In comprehensive publications to which suitable reference has been made in the Bibliography of this thesis. In concluding this Preface, I wish to make certain acknowledgements. In the first place, the basic idea for this thesis was developed during sy freshman year at the Graduate School of Banking at Rutgers University in June, 1950. During one of the lectures delivered by Dr. Ernest M. Fisher, which touched on public housing, it occurred to me that a thesis covering a specific phase of this broad subject offered interesting pos sibilities. Subsequent investigation revealed that, at that time, there was no thesis on record at the School covering ary phase of public hous ing. Therefore, I felt confident that ay topic might be of timely interest to bankers. In writing this thesis in partial fulfillment of the requirements of the Graduate School, I therefore wish to express ny appreciation to Dr. Fisher not only from the standpoint of the basic thesis idea, bub also for his constructive criticisms and sound advices as I developed the thesis outline. Moreover, I am deeply grateful to the entire Staff and Faculty for all their help and assistance in providing the tools which can make it possible for me to be of greater service to Banking, and to ay Bank for giving me the opportunity to attend the school. The principal sources of information for this thesis were the New York City Housing Authority, which was extremely cooperative in furnishing reports and other supplementary material, and the Rutgers Libxfexy, which made available to me, particularly in this past year, all of its literature and other information pertaining to the entire field of Housing. iv 0007-HOD-000003393 0007-HUD-000003393 0007-H U D-000003393 In view of the controversial nature of ny subject, I feel that I ShouLd go on record as relieving all those with whom I consulted, and ftom whom I secured information, from any responsibility for ny inter pretations and conclusions. Whatever the future holds in store, I feel that the Graduate School v. tof Banking will always rank as one of the finest experiences in ny life. I now comprehend the profound philosophy of "VIVERE ESI COGITAEE.* 0007-HUD-000003394 0007-HUD-000003394 0007-H U D-000003394 CONTESTS Page EAfiQT BISTORT OF THE N.X.CITI HOUSING AUTHDRUI-ROLE OF GOVERNMENT 1 Housing Shortage Following World War I .... ....................... 2 Early Attempts By Private Enterprise In Low Rent Field ... 3 President Hoover's Housing Conference. ........... 4 The Reconstruction Finance Corporation...................................... 5 The Public Works Administration............................. 6 The United States Emergency Housing Corporation. ...... 7 The Newlork City Housing Authority Is Created ....... 7 The Authority* s Comprehensive Survey And Recommendations . . 9 "First Houses" - The Authority* s Initial Project................... 10 "Williamsburg* and "Harlem River Houses"................... ... H n. THE AUTHORITY'S PROGRESS FROM 1937 THROUGH WORLD WAR II, UNDER GOVERNMENTAL AID........................................................... The United States Housing Authority...................................... Financing Under The U. S. Housing Act Of 1937....................... ... Federal And Local Subsidies Under The 1937 Act . ................... Example Of A Project's Financing And Subsidising ...... Rents And Construction Cost Limitations. .............................. Other Provisions Of The U. S. Housing Act Of 1937. ..... The Authority's Program Under The Act. .................................. Limitation Of Federal Aid. . .................................. ...................... New York State Aid For Public Housing....................................... New York City Occupancy Tax Law. .............. Construction Curtailment During World War H ........ Summary Of USEA Record - Comparison With PWA........................... The Federal Public Housing Authority ............ The Wagner-EHender-Taft Housing Bill....................... Emergence Of "The Housing Act Of 1949" ........... 14 14 15 16 17 17 IS IS 20 20 21 22 22 24 25 25 vi \ 0007-HUD-000003395 i 0007-HUD-000003395 0007-H U D-000003395 r Page UX. THE ROUSING ACT OF 1949 - US EFFECT ON THE N. I. CUT HOUSING AUTHORITY.......................... national Housing Polity Established. ............ Amendments To The U. S. Housing Act Of 193?................... Subsidies.. . . ................... ... - . . . . . . . . . . . . . . . Temporary Financing. ............................................ Permanent Financing.................. Construction Cost Limitations................ Tenant Eligibility, Rents And Local Tax Exemption. ..... Example Shoving How Rents And Subsidies Are Determined ... Title I Of The Housing Act Of 1949 ................... The Authority1 s Progress Under the Act ........... 26 26 27 28 29 29 30 31 32 34 34 IV. ORGANIZATION AND OPERATION OF THE N. I. CUT HOUSING AUTHOBITT . 35 Control Of The Authority .................. 35 Status Of The Authority's Projects................... 36 Types Of Projects. ....................... ... .................. ... .......................... 37 Site Selection, Planning And Construction....................... ... 37 Various Program Under Three Levels Of Government. ..... 38 Subsidy Operation Under Authority* s Program.............................. 3 The Federally-Aided Program. .................................. ...................... 39 ' Permanent Financing. ..................................................................... 39 Subsidies. .... ............................... ........... 40 s Texes. ....................... . 41 The State-Aided Program.................................................................- 41 Permanent Financing. ............................................. 41 Subsidies...................... 41 Tams. .............................................................................................. 41 The City-Aided Program ........................................................ 42 Permanent Financing and Subsidies............................................ 42 Financing The "Ho-Cash-Subsidy* Program. . .......................... . 44- General Reserve Fund ...... ....................... ...... 44 Debt Service Fund. ......................................................................... 44 Rentals In "No-Cash-Subsidy" Projects. ................................... 45 Rents In AH Permanent Projects...................................................... 45 Tenant Eligibility ............................................................................ 46 Surcharges .................................................................................... 46 Vacancies And Collections. ................. 47 Release Of Project From Debt-Limitation. ................................... 47 Taxation Of City-Aided Projects................................................... 47 Temporary Loans. ......................................... 4 Management And Operating.............................. 48 Nursery Schools And Community Centers. ........... 49 V. THE CHANGING PATTERN . . ........................ ................................................ Authority's Primary Functions In ThePre-War Period. .... Post-Var Shift In Authority's Primary Purpose. . ..................... Authority's Original Post-Var Plan ............................................. . Co-Operation Vith Private Enterprise ............................................. Reservoir Of Post-War Projects ................................................. Post-Var Housing Shortage In City............................. Temporary Veterans' Emergency Housing Program.......................... 50 50 50 51 52 52 53 53 ftt 0007-HUD-000003396 0007-HUD-000003396 0007-H U D-000003396 Page Permanent Public Housing Projects Undertaken ........................... 53 The "Straus Plan".............................. -.......................................... 54 Financing Under The Proposed "Straus Plan" .......................... ... 54 Proposal For A Special Tax .............................. .................. ... 55 Plan For Partial Tax Exemption ..................................................... 56 Proposed Rents Under "Straus Plan" ............. 56 Constitutionality And Financial Feasibility* Of Plan. .... 56 Site Selection, Cost And Density................... ... .......................... 56 0D'nyer-Sponsored "No-Cash-Subsity" Plan Finally Started . . 57 Record Of "Ho-Cash-Subsidy" Projects Built ................... ... 57 purpose Of 01Dyyer-Sponsoxed Flan. ................... ... 5 Status Of State And Federal Programs At That Time................... 56 Record Of State-Aided Construction ............. 59 Review Of Enabling State Legislation................... ... .................. 59 Unexpected Popularity Of Temporary Projects. ........ 60 Analysis Of Families Who Moved From Temporary Projects ... 61 The Density Trend In New York City ... ........... 61 Authority's Original Policy Regarding Density. . ...... 62 Deviation From Original Policy ................ 63 Ho Shortage Of Vacant Land ............................................. 63 The Trend Towards Greater Densities And Taller Buildings . 63 An Outstanding Low-Density Project ............................................. 64 The Trend Towards Costlier Project Sites ................................... 64 Lack Of A Uniform Policy ............................................................ . 65 The School Problem .............................. ... ......................................... 66 COHCLUSIOHS AND RECOMMENDATIONS.................................. ...................... Authority Goes Far Afield Of Original Intent ........ Temporary Housing Vas Practical Answer ........... Alternate Plans Available To Authority................... Tax Burden Shifted To Private Owners........................... ... Low-Income Families Barred From 0*Dwyer Program....................... Rental Competition With Private Properties............................... Authority's Advantages Over Private Owners............... ... Danger Of Too Much Public Housing. .............................................. Authority' 8 Policy Of Securing Best Sites................................... Segregation Of Public Tenants By Income Groups ....... Other Uses For Slum Areas. ............................................................. Effects Of Overcrowding The Land ................................................. Superb-Slums Of Future Being Created.................... ...................... Density Determined By Land Cost. .................................................. No Shortage Of Land For Low-Density Housing............................... Population Dispersal Necessary In Atomic Age ........ Authority's Independence Shoiftd Be Restored. ........ Authority Controlled By Mayor. ............... Collapse Of Authority's Astonony .................................................. History Repeats: Authority' a Powers Again Seized................... Continuing Dangers Of Political Usurpation ............................... Opportunities For Unscrupulous Exploitation. ........ Difficulty Of Halting Momentum Of Program................................... Authority's Policy Stifles Individual Enterprise ...... 67 67 68 6$ 70 70 71 72 73 73 74 74 75 76 76 76 ft 77 78 79 79 80 80 81 81**** **** 0007~HD-000003397 rr~~ i i 0007-HUD-00000339 7 0007-HU D-000003397 Private Real Estate Firms Should Manage Public Housing. . . Criticisms And Comments On Design And Architecture. . . . . *' Public Housing Nov National Policy.............................. Explore More Useful And Effective Methods....................... ... . Charity Should Begin At Home.................................. . The Sound Approach............................................. ...................... . The Danger Sign Of Socialism.......................... . . ................... Vigilance, The Price Of Liberty................... -...................... ... Appendix A Basic Rents Per Apartment Per Month In Permanent Public Housing Projects. . . . B Maximum Income Limits For Admission To. Permanent Public Housing Projects (Pre-'.far) G Maximum Income Limits For Admission To Permanent Public Housing Projects (Post-War) . D Details On 78 Of Authority' s Permanent Public Housing Projects (Pre-War and Post-War) BIBUOGRAPHI Page 82 82 83 84 84 85 85 85 87 88 89 90 104 0007-Hup-000003398 ix 00 0 7-HUD-00 0003398 0007-HUD-000003398 CHAPTER I EAREE HI8T0IS OF THE N. Y. CITY HOUSING AUTHORITY - BOLE OF GOVERNMENT The first definite link in the chain of events which led to the formation of theNew York City Housing Authority was forged in the flames of Vorld War I. That period marked the entrance of the Federal government into the field of large scale housing operations for the first time in the history of the United States. In May, 1918, & little over a year after this nation entered the conflict. Congress authorized the construction of housing for war workers employed in arsenals and In Navy yards, to relieve the serious housing shortages. In order to provide this urgently needed housing as expeditiously as possible, the government established two agencies. One was the Emergency Fleet Corporation, which operated with Federal loans through s separate housing corporation for each project. It built approximately 9000 housing units in 27 towns at a total cost of. $69,300,000 on land provided by ship building companies.'*' Wood, Edith Elmer, Recent Trends in American Housing (The Macmillan Company, New York, 1951) p 79* 1 007"OO~00000339! 0007-HUD-000003399 0007-H U D-000003399  'v&mvr* 2 The other agency 'was the United States Housing Corporation, under . which the projects were constructed directly by the Federal government. It built approximately 6000 dwelling units, plus accommodations for about 7200 single men, at a total cost estimated at $52,373,000.2 Thus the Federal government had established a precedent in housing policy in this nation. Notwithstanding the shortcomings of these initial efforts, there was little criticism of the government's actions during the emergency. Consequently, there were planted strong roots for a policy of permanent Federal aid for a national housing program. In the peacetime years ahead this policy slowly blossomed. Housing Shortage Following World Var I Shortly after World War I, New fork City was confronted with a serious housing shortage. Rents skyrocketed and accommodations Of prac tically any type were at a premium. The New Iork State Legislature was compelled to take action. Emergency rent laws were enacted and a bill was passed in 1920 granting tax exemption, until 1931, on all new dwell ings begun between January 1, 1921 and April 1, 1924* This exemption was not granted in consideration of lower rents and there were no requirements imposed beyond those which applied to all new dwellings. "The result of this tax exemption law was a tremendous building boom. From the time it went Into effect, until it expired, the City lost more then $190,000,000 n taxes. The builders and operators had a field day. Not one single dwelling unit was built for persons forced to live in the slums."3 housing for Defense (The Twentieth Century Fund, Appendix VI, New York, 1940), pp. 156-157. ^Post, Langdon W., The Challenge of Housing (Farrar & Rinehart, Inc., New York, 1938), pp. 121-122. 0007-U-003"00 0007-HUD-000003400 0007-H U D-000003400 This resulted in agitation to provide decent housing for slum 3 dwellers. In 1926; the State of New York took a major step forward to improve deplorable slum conditions by recognizing public responsibility for indecent housing. It enacted the New York State Legislative Act of 1926* Chapter 823; Laws of 1926; described itself as: "An Act to promote the public health and safety by providing for the elimination of unsanitary and dangerous housing conditions, to relieve congested. areas, and the construction and supervision of dwellings and for the letting of apartments at reasonable rentals." Early Attempts by Private Enterprise In Low Rent Field This Act created a State Board of Housing designed to assist limiteddividend housing companies under statutory rental limitations. It offered exemption from an State taxes and fees, as well as Arran local taxation, of buildings ahd improvements for a period up to 20 years, provided the projects met the requirements of the Housing Board. A limited dividend company was obliged to furnish one-third of the capital necessary for a project and to restrict itself to dividends of six per cent. Rents could not exceed $12.30 per room per month in Manhattan, $11.00 elsewhere in New York City, and $9.00 in other areas. The primary purpose of the Act, therefore, was to encourage private en terprise to build decent housing for those slum dwellers who could afford to pay higher rentals. Hew York City was the only community in the State which took the steps necessary to qualify under the provisions of this new State Act. Only 11 projects, providing 6925 dwelling units, were built in New York City with the assistance of the State Board of Housing. Typical exampleB 0007-HUD-000003401 0007-HUD-000003401 0007-H U D-000003401 4 Included "Sunnyeide Gardens" in Long Island Oily and the two projects of the Amalgamated Clothing Workers Union, one in the Bronx and one on Manhattan's Lover East Side. These projects rented for the * < tmwn allowed under the Act. Another Lower East Side project, known as "Lavanburg Houses," attempted to reach-the lower income group of slum dwellers, with apartments renting at $7.00 per room per month. However, it required philanthropic assistance to achieve this. During the administration of President Herbert Hoover, the Federal Government became intensely interested in the problem of decent housing for families of low income. Subsequently, during the administration of Franklin b* Roosevelt, this interest developed into a positive program of action. President Hoover's Housing Conference In 1929, President Hoover took the initial steps which eventually led to his Conference on Home Building and Home Ownership in December 1931. This Conference recognized, among other housing problems, the scarcity of good housing, which forced low-income groups to live in slum environments. The urgent need for corrective measures was given due regard by the Conference. However, the solutions offered were based principally on the utilization of private enterprise and private capital to alleviate the situation through limited-dividend housing corporations. Since the Conference was bom during the depths of the. depression, its material results were not very significant at that time. However, it succeeded in focusing national attention on the whole issue of housing.^ ^President's Conference On Roma Building And Home Ownership (The National Capitol Press, Washington, D. C., 1938), 12 Volumes. 0007-HUD-000003402 0007-HUD-000003402 0007-HUD-000003402 The Reconstruction Finance Corporation 5 the provisions of President Hoover's Emergency Relief and ition Act of 1932, the Reconstruction Finance Corporation -was to make loans to corporations organized for the primary purpose g housing for low-income families or for the rehabilitation of Only New fork State, by virtue of its 1926 legislation, '.ms meet the terms of this Emergency Relief and Construction Act. irons applications were filed with the Reconstruction Finance but only one development was approved and actually constructed. Spject was "Knickerbocker Village," which was built by the Fred F. Jjijompapy with a 10-yoar Reconstruction Finance Corporation loan in mt of $8,000,000 at a 5 par cent interest rate, ree of New York's worst slum blocks on the Lower East Side were , The land cost $2,000,000, or about $13.00 per square foot, and il cost of the project, which was completed in 1933, was 100. Containing 1573 apartments in 12-story structures, the averaged $12.50 per room per month. This was far in excess of Ft of the former occupants of the site could afford, with the g.t that 82 per cent of those families were forced back into tenements !' f., iter slum areas. "Knickerbocker Village" occupied 46 per cent of the 5 jjuad had a population density of 765 persons per acre. ipsrt -as World War I had precipitated the Federal government into i' [Scale housing for the first time, so too did the economic depression 1930's bring it back into the picture again. In 1933* with the jgr, Mabel L., Urban Blight And Slums (Harvard Press, Cambridge, 938), pp. 318-319. 0007-HUD-000003II03 0007-HUD-000003403 0007- H U D-000003403 advent of the Roosevelt administration, the Federal government mide its first significant peacetime entrance into the field of low-rent housing. The Public Works Admin w.-m-h* on The National Industrial Recovery Act of 1933 provided, other emergency measures, for the "construction, reconstruction, alteration or repair, under public regulation or control, of low-rent housing and slum clearance projects." The Public Vorks Administration, which was in the Department of the Interior, created a Housing Division to effectuate this portion of the Act. At first the Housing Division attended to function on a basis of loans to limited-dividend corporations, since there were no local public housing authorities at that time. These loans were to be made for 85 per cent of the cost of a project, at a 4 par cent interest rate and for terms up to 35 years. The net results were very disappointing. Over 500 applications were filed for funds, bub only 7 met the requirements of the Housing Division. A major obstacle was that when a limited-dividend corporation started to asseutole a site, the operation was blocked by excessively high land prices. Also, the Housing Division did not have the power of eminent domain, necessary to condenn land. Finally, due to difficulties in obtain ing substantial sponsorship, and the fact that rentals attained were generally far from the reach of low-income groups, the Housing Division abandoned this phase of the program.^ i j; II1. HColean, Miles L, 1944), P 276. Housing (The Twentieth Century Fund, New Fork, 0007-HOD-000003404 0007-HUD-000003404 0007-H U D-000003404 The United States Emergency Housing Corporation 7 r~ It then undertook a plan of direct financing of government-owned housing through the United States Emergency Housing Corporation, which was created in October, 1933. This corporation was vested with the power of eminent domain so that it could actually acquire land and retain title. In regard to the financing, 45 per cent of the cost of a project was considered an outright Federal grant and the remaining 55 per cent was a loan for not more than 60 years at a 3 per cent interest rate. Unfavorable lower court decisions, relating to the power of the Federal government to condemn land for purposes of housing, offered a serious obstacle. In order to offset this, the Housing Division of the Public Works Administration encouraged the formation of local housing author s ities so as to provide a solution to the problem of land acquisition. The New York City Housing Authority Is Created Early in January, 1934, the Public Works Administration notified Mayor Fiorello La Guardla that it had earmarked $25,000,000 for a loan to a duly constituted Hew York City Housing Authority, subject to the submis sion of low-cost housing projects meeting the approval of the Public Works Administration. Mayor La Guardla pronptly sponsored a bill in the New York State Legislature which provided for the creation of housing authorities by cities. This bill was enacted on January 31, 1934, as Chapter 4 of the Laws of 1934 and was known as the Municipal Housing Authorities Law. Section 61 of that Chapter declared the findings of the Legislature as followst 0007-HOD-000003405 000 7-HUD-000003405 0007-H U D-000003405 "It is hereby declared that in certain areas of cities of the State there exist unsanitary or sub-standard housing conditions owing to over-crowding and concentra tion of population, inproper planning, excessive land coverage, lack of proper light, air and space, unsan itary design and arrangement, or lack of proper san itary facilities; that there is not an adequate supply of decent, safe, and sanitary dwelling accommodations for persons of low income; that these conditions cause, an increase and spread of disease and crime and con stitute a menace to the health, safety, morals, -welfare, and comfort of the citizens of the State, and iuyn-fr economic values; that these conditions cannot be rem edied by the ordinary operation of private enterprise; that the clearance, replanning and reconstruction of the areas in which unsanitary or substandard housing conditions exist and the providing of deceit, safe, and sanitary dwelling accommodations in said areas and elsewhere for persons of low income are public uses and purposes for which public money may be spent and private property acquired; and the necessity in the public interest for the provisions hereinafter enacted is hereby declared as a matter of legislative determina tion." 8 Thus*, the State Legislature had enacted th%e first law which had as \ its aim not only regulation, bub also extensive slum clearance and re housing, in addition to the establishment of local housing authorities. Moreover, for the first time in the history of New York State, the Legislature had declared that housing was a proper function of government. Thereafter, whenever this law was challenged in the courts, it has been consistently upheld. Vithln a week after the bill became law, the Municipal Assenfcly of rt the City of New York established the New York City Housing Authority. Mayor La Guardia Immediately appointed Tenement House Cosmdssioner Langdon V. Post as Chairman of the Authority. 7 Hereafter, when the word "Authority" is used, it refers to the New York City Housing Authority; likewise "City" refers to New York City, unless otherwise noted. I, . 0007-HOD-000003406 0007-HUD-000003406 0007-HUD-000003406 The Authority* s Comprehensive Survey And Recommendations 9 Mr. Post formed a Long-Range Planning Committee to undertake a survey for the purpose of ascertaining the location and extent of substandard housing in the City and to outline an immediate as well as a long-range program of clearance and construction by the Authority. Data was compiled over a period of 8 months by 6000 employees of the Civil "Works Administration and the survey was completed in April, 1935. The report declared that there were 17 square miles of slums and blighted areas in the City. The Committee proposed that 10 square miles of this area must ultimately be vacated and rebuilt, since it was unfit for hiiranTi habitation and economically unprofitable. The Committee recommended an expenditure of $150,000,000 each year for 10 years so that, upon completion of this slum clearance and rehous ing program, 7500 acres would have been cleared and rebuilt and 1,320,000 slum dwellers rehoused at rentals of from $4.50 to $7.50 per room per month, including heat and water. It was pointed out that perhaps the greatest difficulty facing the Authority would be the excessive cost of land in existing slum areas. With respect to the recommendations made by the Long-Range Planning Committees "The program wasnot accepted by the Administration in "Washington but nevertheless it remains the basis for aiy plan for slum elimination and rehousing in New York City."8 Meanwhile, conferences between the Public "Works Administration and the New Xork City Housing Authority, looking toward the actual construction il ft-! !t; r: 8. Toward Tb t End fa Be Achieved (The New York City Housing Authority, New Yoric, 1937), pp. 9-10. 0007--HU D-000003407 ,-r 0007-HUD-000003407 0007-H U D-000003407 10 of new buildings, had been proceeding so slowly that the Authority sought other solutions. It studied, with private owners, plans for acquiring their holdings in exchange for bonds of the Authority, and the building of low--rent housing with labor and materials to be furnished by the orks Progress Administration. "First Houses" - The Authority* s Initial Project In Decenter, 1934, the Authority bought two Lower East Side tenement properties at the southwest corner of East Third Street and Avenue A from Vincent Astor, giving him a purchase money mortgage for the entire cost. It then acquired by condemnation six additional tenement properties, comprising the balance of the site, with funds borrowed from Bernard Baruch, also secured by a mortgage. These mortgages were for a period of 60 years with an interest rate of 3 per cent. The Authority, with the aid of several relief agencies including the Works Progress Administration and the Civil Works Administration, constructed and remodeled the 8 tenements into 123 apartments having a total of 372 rooms renting at $6.05 per room per month. Appropriatelynaming the project "First Houses," the Authority took over the operation of the completed development on July 1, 1936. It cost a total of $1,364,643* There were over 3000 applicants for the 123 apartments.^ The Authority has since been able to repay the entire debt on "First Houses" from project revenues and from subsidies paid by the City out of the OcctQiancy Tax which was enacted in 1936 and is described in a sub sequent chapter. %irst Houses (The New Ioik City Housing Authority, NewXoxk, 1935) , P* 29* 6007-HtJD-00000308 000 7-HUD-0 0 00 03408 0007-H U D-000003408 r 11 vn.Haniaburg And Harlem River Houses Also during 1934* the Authority, still hoping to obtain the $25,000,000 previously earmarked for it by the Public Works Administration, started, to secure options on a project site in Williamsburg, Qaeekc County, comprising over 400 separate parcels. This location, -which was known as one of the most squalid slum areas in the City, covered 12 square blocks between Btxshwick Avenue and Leonard Street, Mauger Street and Meserole Street. While'this was in progress the Public Works Administration suddenly abandoned its plan to build low--cost housing through local housing i authorities. Instead, it decided that the Federal Government should be in complete control and that the Public Works Administration should build S all projects directly. Thus the entire program became centralized in and directed from Washington, D. C. By June, 1935, despite the many problems confronted in dealing with hundreds of owners, completion of the purchase of the Williamsburg site was accomplished. It was then conveyed to the Public Vorks Administration. Williamsburg Houses" was thus built directly by the Federal government under the revised policy of centralized control. Completed in April, > if/' 1938, at a total cost of approximately $13*000,000 to the government, it consists of 20 four-story buildings occupying 10 blocks of the 12 block site. Of the remaining two blocks, one is occupied by & playground and the other by a junior high school. The old tenements of the Williamsburg site covered about 90 per cent of the land. The new buildings cover only 33 per cent, yet 1630 families live in. the new project as against 1400 famines formerly living on the site. While the Williamsburg project was materializing, the Authority was 0007-HOD-000003409 i-; 0007-HUD-000003409 0007- H U D-000003409 12 working on another project, hounded by 151st Street, 153rd Street, Macosfcs Place and the Harlem River. This did not present a problem of land assembly, since the entire site was owned by John D. Rockefeller,Jr. "Harlem River Houses," accommodating 577 families, was completed in October, 1937, at a total cost of approximately $4,230,000 to the government. Thus the Federal government, through the Public Works Administration, furnished all of the funds, totaling over $17,000,000, for these two projects. Forty-five per cent of this cost was ultimately to be a grant or gift. The remaining 55 per cent was in the form of a loan at a 3 per \ cent Interest rate. Since the completion of these two projects, they have been operated by the New York City Housing Authority under a contract with the Federal government, which still retains ownership. "These projects were undertaken primarily to create employment and stimulate the building industry rather than to wipe out the social evil of the slums.""* ? The primary purpose of the Public Works Administration* s program was to relieve, as rapidly as possible, the acute unemployment situation then prevailing. The providing of good housing therefore became of secondary importance. The net result was that the plan failed to achieve unity of purpose. On the one hand there was the exigency of quickly increasing employment. This demanded swift action. On the other hand there was the need for time so that comprehensive planning of a long-range nature could be undertaken, in order to insure success for this new form of Federal aid. 1 Must We Hatre fiiiima? (The NevXork City Housing Authority. Hew York, 1937), P. 11. 0007-HUD-00000 3*110 0 0 0 7-HUD-000003410 0007-H U D-000003410 "There is no doubt that ail of these programs attained their objectives of furnishing employ ment, and although some excellent housing was built, the projects, in general, reflected the emphasis of the program. They were too expen sive. They were superimposed upon communities rather than being made Integral parts of them. They were too often built without regard to the places of employment of the tenants."** 13 Between February, 1934, and November, 1937, only 49 projects, hav ing a total of 21,880 dwelling units, were completed throughout the nation at a total cost of $129,500,000, or an average of about $6000 per dwelling unit including land, site improvements and cost of demolition. Approximately one-half of the projects were on slum sites and about one- half were built for Negro occupancy. "Except for the use of expensive land, resulting from concentration in slum areas, the high costs of Public Works Administration houses were due chiefly to what may be called a mania for durability."*^ Finally, the centralized administration in Washington, D. C., was admittedly cumbersome and costly. A change in policy was deemed essential* 12 ^Public Housing. Yesterday. Today. Tomorrow (From an address given by Herbert Emmerich, Commissioner, Federal Public Housing Authority, May 20, 1943 before the Eleventh Annual Meeting of the National Association of Housing Officials, New York, N. Y. Reprinted in pamphlet form by the Association, June, 1943, as Publication No. 179), P H. 12 Colean, op. cit.. p. 227. I 0007-H0D-000003411 it's I li <ti 0007-HUD-000003411 0007-H U D-000003411 CHAPTER II THE AUTHORITY rS PROGRESS FROM 1937 THROUGH WORLD VAR II, UNDER GOVERNMENTAL AID The Public Works Administration's program, despite its deficiencies^ accomplished severe! important things. In the first place it was the motivating force which resulted in the establishment of the New York City . s Housing Authority in addition to 45 other housing authorities in 29 States which passed the necessary enabling legislation. Secondly, it developed enough support for the principle of public housing to result in the passage of the United States Housing Act of 1937, which had such a significant Influence on the New Xork City Housing Authority. Some of the more important features of this Act will be described herewith. The United States Housing Authority The United States Housing Act of 1937 stemmed from the experiences of the Public Works Administration* s bousing program and subsequent Congressional hearings. Originally referred to as the Va^ier-Steagle Bill, it was enacted into law in 1937. This Act provided for Federal partic ipation in public bousing along lines previously unknown in tide nation, \ ft.-' 14 0007-HOD-000003412 0007-HUD-000003412 0007-H UD-000003412 15 although certain fundamental principles of the Public Works Administra tion* s program vere preserved. The United States Housing Act of 1937 called for the permanent estab lishment of the United States Housing Authority, empowered to advance funds to local public bousing authorities for slum clearance and rehous ing. It was also authorised to make direct grants and Minimi subsidies to be supplemented by smaller local grants or subsidies. Reduced to simple terms, this Federal subsidy is the amount required to make up the gap between the rents which low-income families can afford to pay and the actual expenses incurred, including operating costs and debt services. \ The United States Housing Authority was established as a corporate bofy in the Department of the Interior. Although the policy-making and directive forces vere centralized in Washington, D. C., the planning, construction and administration of all new projects was decentralized in the local housing authorities.3^ Financing Under The U. S. Housing Act Of 1037 Under this Act, the Federal government could lend up to 90 per cent of the total cost of a project for a period not to exceed 60 years. The local housing authority bad to raise the remainder from non-federal sources so that at least 10 per cent of the permanent financing had to be in what is known as series A bonds, which were sold to the public. The bonds held by the government are known as series B bonds and carried a mandatory interest rate which was the "going Federal rate"13 13Colean, Miles L., American Housing (The Twentieth Century Fund, New York, 1944), P 278. 0007-HUD-000003413 0007-HUD-000003413 0007-H U D-000003413 *w (defined as the rate borne by the most recent issue of Treasury bonds due in 10 years or more)^ plus one-half of one per cent. Assuming the "going Federal rate* to be 2| per cent at that time, this resulted in a total coupon rate of 3 per cent. The series A bonds, sold to the public at competitive bidding, commanded lover interest rates than the series B or government bonds. Federal And Local Subsidies Under The 1937 Act The anmyti Federal subsidy constituted the primazy security, being pledged to the payment of the debt service onthe series A and B bonds. "The faith of the United States is solemnly pledged to the payment of all annual contributions."15 The annual Federal contribution could not exceed a maximum rate representing the "going Federal rate," or 2^ per cent as previously explained, plus 1 per cent, a total of per cent. Thus the man-fumm dollar amount of the annual Federal contribution could not exceed that percentage (3) of the project cost. The annual debt service on the series A and B bonds usually approximated, bub never exceeded, the annual subsidy. The Act also provided that the local government must join in the subsidy. The local contribution, -which could be in the form of a grant of land or partial tax exemption, had to be at least 20 per cent Sf. 14 | Devine, C. J. & Co. Inc., Local Housing Authority Bonds and Motes i (1949), p. 9. tV 116 e Dun & Bradstreet, Inc., Municipal Credit Survey, H. Y. City Housing IAuthority (July 2, 1948), p. 13- ` 0007-HUD-p00003ttl4 0007-HUD-000003414 0007-HU D-000003414 of tbs total Federal subsidy. 17 Example Of A TMimncing And Subsidiainff For example, In the case of a public housing project costing a total $1,000,000, a loan of 90 per cent could be provided by the government in series B bonds and the remaining 10 per cent by privately sold local housing authority A bonds. The maximum subsidy from the U. S. Housing tr Authority would be $35,000 annually (3j per cent of the $1,000,000 total i cost, the 3g per cent being the 2% per cent going long-term federal rate plus 1 per cent as previously shown). The local contribution, fixed by law at 20 per cent of the Federal subsidy, would amount to $7,000 annual ly and would usually be applied in the form of tax exemption. Renta And Oftnatructlon float T.-turttatlonB In order to insure that this housing would be used exclusively by those families who otherwise would not have been able to secure adequate shelter, this Act further provided that the housing be rented only to those who were occupying substandard quarters, at the time of making i application, and whose income did not exceed five times the scheduled rent, or, in cases of families having three or more minor dependents, ! six times the rent. As protection against extravagant construction costs, this Act provided that, in cities of over 500,000 population, the construction cost per room could not exceed $1,25(^ or $5,000 per family unit, while in smaller cities the maximal, were $1,000 and $4,000 reapectively. Another requirement was that as many unfit housing units, cm the site or 0007"HUD-000003415 flnwri 0 0 07-HUD-0 00003415 0007-H U D-000003415 18 elsewhere, bad to be demolished -or restored as were built in the new housing project. Other Provisions Of The P. S. Housing Act Of 19*37 Under the U. S. Housing Act of 1937, Congress initially authorized $500,000,000 for loans to local housing authorities, over a period of three years. In 1938, Congress raised the total to $800,000,000 and removed the time limitation. Also, at the outset, the United States Housing Authority -was authorized to make grants or subsidies tip to $20,000,000 a year. In 1938 Congress increased this authorization to $28,000,000. The United States Bousing Act of 1937 decentralized the nation' 8 public housing program by making local housing authorities responsible for the planning, building, owning and managing of the projects. The Act also took public housing out of the emergency group of governmental activities. Under the Act, the Federal government could not bty land, contract for construction, or own or manage the projects, except that in case of default the United States Housing Authority could take over a project and operate it. However, In 1940, amendments to the Act granted the United States Housing Authority power to build, own, and operate housing for defense purposes.17 The Authority's Program Under The Act The United States Housing Act of 1937, adopted in the latter part 17 " Vood, Edith Elmer, and Ogg, Elizabeth, The Homes The Public Bu-nria (Public Affairs Committee, Inc., Pamphlet Ho. .41, 1940), p. 11. 0007-HUD-000003416 i 0007-HUD-000003416 0007-HU D-000003416 19 of that year, made Federal aid available to municipalities In 1938. Accordingly, the public housing program of the New fork City Housing Authority vent into high gear. In the four year period between 1938 and the time this nation had entered Yorld War H, the Authority completed the construction of seven Federally-assisted projects comprising 10,409 apartments, providing hous ing for about 35,000 people, at a total cost of $47,389,000. These proj ects vere: Red Hook, Queensbridge, Vladeck, South Jamaica, East River, Klngsborough and Clason Point. They vere financed by the sale of 90 per cent series B bonds to the Public Housing Administration at interest \ rates of 3 per cent and 3*25 per cent. The balance of 10 per cent vere series A bonds sold privately.IS In 1940, these bonds vere refinanced at more favorable interest rates. Bonds representing more than 85 per cent of the total cost of the projects vere sold by the N. Y. City Housing Authority privately and the remaining 15 per cent vere taken by the United States Housing Authority thus practically reversing the original statutory plan of 90 per cent government loan and 10 per cent private loan. Interest rates on the pri vate refunding averaged 2.128 per cent as against 3 per cent and 3.25 per cent, which would have been payable to the government. Also the TO term was shortened from 60 to 45 years. The above 7 projects vere built at an average cost of less than $1,000 per construction room. One development. East River Houses, vas built in 1941 at a cost of $802 per construction room. Details of these `"'Tenth Annual Report, N. Y. City Housing Authority (1944) > P* 15* 19 JCjJSSh 0007-HUD-000003417 0007-HUD-000003417 0007- H U D-000003417 20 projects^ and other Authority projects referred to in this thesis are compiled in the Appendix. Limitation Of Federal Aid Since a provision in the United States Housing Act of 1937 limited the amount of loans to be made to any one State to 10 per cent of the total; it ms evident that New lork City would never be able to have a public homing program even approaching the size originally envisioned; unless funds from other than Federal sources could be obtained. As a result; an amendment to the New lork State Constitution ms formulated in the 1938 Constitutional Convention and ms approved at the Noventer election in that year. Hew York State Aid For Public Housing Under this amendment the State ms authorized to borrow funds end to make loans and subsidies to local housing authorities for public low-rent housing projects and also for the clearance; replanning and reconstruc tion of substandard areas. Included In its provisions ms an authoriza tion to each municipality to incur a special indebtedness of two per cent of the assessed valuation of its taxable property; for housing and slum clearance purposes; over and above the general debt incurring power of the municipality. The housing amendment required legislative implementation. Consequent ly; in 1939; the State Housing Lav ms repealed and the Public Housing Law of 1939 ms enacted. This new statute included the former provisions relating to limited dividend corporations and municipal housing author- \ 0007-HUD-000003418 0007-HUD-000003418 0007-HUD-000003418 21 lties in addition to the new provisions. The State Board of Housing was abolished and the position of State Commissioner of Housing was created, effective as of July 1, 1939* The housing amendment authorised the State to borrow #300,000,000 to be used for loans and to agree to pay a total of not more than #5,000,000 a year for subsidies. In 1945, 1946 and again in 1949, ref erenda raised the original amounts so that the totals were increased to #735,000,000 for loans and #25,000,000 for subsidies. 20 Sew York City Occupancy Tax Law Meanwhile, during 1936, Mayor La Guardia initiated a program of City aid for public housing through passage of the Occupancy Tax Law, enacted in June of that year. This was a special tax on all rented business premises in the City occupied for gainful purposes. The tax receipts were made available for subsidies for public housing projects to supple ment the Federally-aided program. This "occupancy tax*1 ranged from #1.00 to #6.00 annually, depending upon the annual rental of the occupied premises. The TMrtmnm figure of #6.00 per annum applied to rentals of #5001 per year and over. As a result of the Occupancy Tax Law and the Public Housing Law of 1939, the Authority constructed Vladeck City Bouses, the first completely City-aided housing project in the nation. The total cost of this 240 family project, which amounted to #1,269,490, was financed by the Author ity* s bonds which were sold to private bankers. The bonds were secured by a City guarantee of principal and interest payments and supported by 20'citizens* Housing & Planning Council of Hew York, Inc., Directory and Review (1950), p. 14. 0007-HUD-000003419 0007-HUD-000003419 0007-H U D-000003419 22 City cash subsidy funds obtained from the Occupancy tax. This project was colleted in October, 1940. Construction Curt'HTmen'fc buring World Var II During the period in which our nation was engaged in Vorld Var II, only two projects were completed by the Authority. The first was Edwin Markham Houses. It was started under the United States Housing Act of 1937, but \<as converted into a defense housing project during the war, under Public Act Ho. 671. Containing 360 apartments, it was convicted June, 1943* It was the Authority* s first project to he built on Staten Island, .in the Borough of Richmond. The only other project coupleted by the Authority during Vorld Var `l II was the 3501 family Fort Greene Houses in Brooklyn. It was finished in February, 1944, under the provisions of the State's Public Housing Law of 1939. The State's loan amounted to $19,788,065, covering the entire cost of the project, which was also used for defense housing. Thus, the N. I. City Housing Authority, with the cooperation of the City, developed the first State-aided public housing project in the nation. In the period following Vorld Var II, the State-aided program was accel ( erated. No Authority projects were started while we were at war. Simwarr Of USHA Record - Comparison Vith PWA Up to February, 1942, the United States Housing Authority had advanced or contracted for $770,000,000 of public housing throughout the nation, out of the $800,000,000 authorised. These advances covered approximately 185,000 dwellings in 747 projects situated in 548 localities. Approx- I 0007--HUD-000003420 0007-HUD-000003420 0007-H U D-000003420 23 lmately 60,000 of the units vere diverted to the use of defense -workers during World Var H. The average development cost -Has $4,604 per dwelling unit including the land and the cost of slum clearance. Excluding the cost of the slums demolished, the average cost per dwelling unit, including land, was :\ y $4,254, or $3,924 without the land. These costs vere considerably lower I- than the average costs of the Public Vorks Administration dwelling units f which were, respectively, $5,927 overall, $5,413 excluding clearance but K?\ . including land, and $4,975 without land. 21 In other words the United States Housing Authority's projects were k constructed at considerably lower costs than the projects of the Public \I'. Vorks Administration. The United States Housing Authority also maintained S i a general policy of extending its operations to locations where land costs were lower. As a result, the average dwelling rent in United States Housing Authority projects was $17.69 per month, including all utilities, as compared with $24*98 in the Public Vorks Administration program. The median income of families rehoused under the 'United States Housing Author ity program was about $820 per year so that the dwelling units vere rented, as intended, to a very low income group. The United States Housing Authority succeeded in making significant f inroads on the elimination of slums and in providing former slum dwellers with decent housing. "It has been widely accepted and supported as a permanent government activity, doing a necessary constructive work,"* 22 Oolean, o p. cit.. p. 280 22 Gray, George Herbert, Housing and Citizenship (Reinhold Publishing Co., Hew Toxic, 1946), p. 235. | 0007-HUD-000003421 0007-HUD-000003421 0007-H U D-000003421 24 In February, 1942, the functions of the United States Housing Authority were transferred to the Federal Public Housing Authority in the National Housing Agency under the Federal government** s reorganization plan in the early stages of this nation* s entrance into World War II. wr. !- The Federal Public Housing Authority The Federal Public Housing Authority comprised the functions of the Defense Homes Corporation,miscellaneous war .housing activities of the Federal Works Agency,off-reservation housing of the War and Navy Deparfcmeats,and the non-farm and war housing of the Farm Security Administration, in addition to the United States Housing Authority. The Federal Public Housing Authority was therefore essentially a wartime " super-agency During 1943, while World War H was raging, special Committees were established by both houses of Congress for the purpose of considering economic problems which were expected to arise when hostilities ceased. The Senate* s Special Committee on Post-War Economic Policy and Planning established a sub-committee on Housing and Urban Redevelopment. The find ings of this sub-committee became the basis for the development of signif icant legislation later on. The principal features of this development are found in the testimony of John B. Blandford, Jr., then National Housing Administrator, before this suh-comnittee in June 1944 end in January, Among other things, the proposals called for Federal assistance for the assenfcly of land In urban slum areas, and the resumption of Federal loans and subsidies for public bousing. i 23 78th Congress, 2nd Session, Part 4, pp. 1015-1063 and Part 6, pp. 1191- 1321. 0007-HOD-000003422 0007-HUD-000003422 0007-HUD-000003422 The Vaener-Ellender-Taft Housing Bill 25 Subsequently a bill, S 1592, proposing a comprehensive Federal housing policy, was introduced in the Senate In the Fall of 1945, the 79th Congress. In spite of the bi-partisan sponsorship of Senators Vagner, EUender and Taft (it was referred to as the W-E-T Bill), bitter controversy vas raised. Thus, while the bill passed the Senate early in 1946, it met with delays in the Bouse and was not enacted into law. One of the principal features of the bill was a provision for an expansion of the public housing program originally instituted under the United States Housing Act of 1937* This new provision called for the financing of 500,000 dwelling units over a five-year period. Emergence Of "The Housing Act Of 19A9" After several unsuccessful attempts to enact appropriate legislation in 1947 and 1948 embodying public housing and slum clearance provisions, the Congressional battle was renewed soon after the opening of the Hist Congress in 1949* By the middle of the year, "The Housing Act of 1949," as it was called, finally won over the opposition. It was passed by Congress in July, 1949, end enacted into law.^ ^SuMLiic Law 171, 81st Congress 0007-HUD-000003423 0007-HUD-000003423 0007-H U D-000003423 CHAPTER III THE HOUSING- ACT OP 1949 - ITS EFFECT OH THE N. X. CITI HOUSING ATTPmBTPy The Housing Act of 1949 exerts such an important influence on the public housing program of the New York City Housing Authority that it was felt essential to outline its salient features in this chapter. Also, the principal differences between the United States Housing Act of 1937 and the Housing Act of 1949 will be shown. Portions of the material used in this chapter were obtained from "A Handbook Of Information On The Provisions Of The Housing Act Of 1949, published by The Housing and Home Finance Agency in Washington, D. C., in 1949, and are presented herewith in condensed form while retaining the essential information. Mn-Mnm.1 Housing Poller Established The Housing Act of 1949 establishes, for the first time in the his tory of this country, national housing objectives and the policies to be followed in achieving them. Section 2 of the Act statee that: "the general welfare and security of the Nation and the health and living standards of its people require housing production and related community development 26 0007-HUD-000003424 0007-HUD-000003424 0007-H U D-000003424 sufficient to remedy the serious housing shortage, the elimination of substandard and other inadequate housing through the clearance of slums and blighted areas, and the realisation, as soon as feasible, of the goal of a decent home and & suitable living environment for evexy American family, thus contrib uting to the development and redevelopment of communities and to the advancement of the growth, wealth and security of the Nation*" 27 Vhile declaring that private enterprise should serve as large a 05 part of the total need as possible, the Act sets forth the governmen tal. responsibility for positive action for the redevelopment of cities, slum clearance, and low-rent housing in non-farm areas. ThuB, for the first time. Congress, representing the voice of the people of this nation, has expressed as national policy the propositions that the general welfare and security of the United States requires a remedy for the housing shortage, elimination of inadequate housing, and realisation of a decent home and suitable living environment for every American family. The Housing Act of 1949 authorized a large expansion in the low-rent and slum clearance program which first had its inception when Congress passed the United States Housing Act of 1937. The new statute called for the powers, functions, and duties of the former United States Hous ing Authority to be administered by the Public Housing Administration, an agency of the Federal Government. lmani^mants To The U. S. Housing Act Of 1937 Title III of the Housing Act of 1949, covering low-rent public hous ing, amends the United States Housing Act of 1937 by authorizing Federal _1 In this Chapter, whan the word "Act" is used by itself, it refers to the Housing Act of 1949, unless otherwise specified. 0007-HOD-000003425 0007-HUD-000003425 ? 0007-HUD-000003425 loans and contributions for local programs so as to provide a 28 of 310,000 low-rental public housing unite over a 3-year period, more than four times the total nunber of low-rent units built under the 1937 Act. Under this expended program the Public Housing Administration can authorize local authorities to construct 135,000 units a year, but the President is empowered to accelerate the program to 200,000 units a year, or retard it to 50,000 if he so determines, upon advice from his Council of Economic Advisers that such action is in the public interest, subject to the total authorization of 310,000 units. i j i t i Subsidies Annual Federal subsidies are authorized not to emceed $308,000,000 per year for a period of 40 years,a total contribution of $12,320,000,000 The annual contribution, or subsidy, mey not exceed a certain percentage of the development cost of the project. This percentage is the "going Federal rate*1 of interest, plus 2 per cent,a total of 4| per cent, since ** the "going Federal rate," as heretofore shown, is defined as the annual rate of interest on the most recently issued bonds of the Federal Govern ment having a maturity of 10 years or more, but not less than 2| par cent. Therefore, at the present time, the maximum dollar amount of the annual Federal contribution mey not exceed such total percentage (4|) of the i.r 1 project cost. Under the U. S. Housing Act of 1937, such total percentage was 3j, as previously explained in Chapter II. This annual contribution, or subsidy, together with the required ^.ocal tax exemption, makes up the difference between the rents which low- income families can afford to pay and the annual cost of operating the 0007-HUD-000003426 0007-HUD-000003426 0007-HU D-000003426 projects, including interest and amortization. 29 The faith of the United States Government is solemnly pledged to the payment of this rmT contribution, which can be used only to pay interest and amortization on the permanent financing bonds. The local housing authority may issue its own tax-exempt bonds secured by the pledge. Temporary Financing The Housing Act of 1949 further authorizes a total of $1,500,000,000 available as a revolving fund, for loans, principally for construction advances and commitments pending the permanent financing through the sale of bonds on the private market. Interest rates on Public Housing Admin istration loans to local housing authorities are presently established at 2^ per cent, defined as the "going Federal rate." Temporary loans may also be obtained through the sale of the local authorities1 temporary loan notes to private investors. Also, the Public Housing Administration obligates itself, if required, to lend a sufficient amount from the $1,500,000,000 revolving fund to cover the principal and Interest on temporary loan notes when they mature, so that these notes have excellent security. Temporary loan notes are retired as soon as a project is permanently financed. Permanent When a project is far enough advanced so that its cost may be accu rately determined, the local housing authority may secure permanent financ ing through the sale, to private investors, of the long-term Series A bonds, secured by the Government's pledge to pay the annual contributions 0007-HUD-000003427 HIM 0007-HUD-000003427 0007-HUD-000003427 30 to cover principal and interest. Any part of the permanent financing, up to a total of 90 per cent, not covered toy the sale to private inves tors, may toe financed by the Public Housing Authority Series B bonds out of the #1,500,000,000 revolving fund. However, indications are that substantially all of the permanent bonds will, be sold to private inves tors at very favorable interest rates. Interest on Series A bonds and temporaiy loan notes is exempt -from Federal taxation. Construction Cost ^inritatlnnn Under the new Act the cost of construction is limited to #1,750 per zoom, and an increase in this cost limitation of not more than #750 per room additional, totaling #2,500 per room, is authorized in localities where it would not otherwise be.feasible to construct such housing. The original United States Housing Act of 1937 had fixed a limit of #1,250 per room, or #4,000 per family unit, in cities of over 500,000 popula tion and $1,000 and #4,000 respectively in smaller cities. Also, the former requirement relating to the elimination of one sub standard housing unit for every new one built, is modified in the Housing Act of 1949. The local authority must agree to eliminate, within five years after completion of a project, substandard units substantially equal in number to those in a new project. However, if more than one family is living in such substandard unit, its elimination is construed as the elimination of units equal to the number of families accommodated. An acute shortage of low-rental housing in an area is considered suffi cient reason for defexing this required elimination beyond the five-year period. 0007-HUD-000003428 0007-HUD-000003428 0007-HUD-000003428 ET" Tenant Eligibility. Rents And Local Teat Exemption 31 On2y low-income families, -oho are unable to afford adequate private housing, are eligible for public housing under the Act. With the excep tion of veterans of both World Wars I and II, these families must come from slum housing, be displaced by a public housing or slum clearance project, or actually be without housing through no fault of their own. Initial occupancy preference is given primarily to displaced families, and secondly, to other low-income families. Veterans are accorded first preference in each of these groups. To further insure that this low-rent housing will be occupied only by low-income families, the Act sets forth the following additional provisions: 1. The top admission rent must he at least 20 per cent under the rents at which private enterprise makes available a substantial supply of housing, new or old. 2. The net income of families at admission may not exceed five times the rent, including utilities. However, the Act recognizes larger families by exempting, from income, $100 per year for each minor dependent. 3. Maximum income limitations for admission to a proj ect, as well as continued occupancy in it, must be set by the local housing authority subject to the approval of the Public Housing Administration. Moreover, the local authority must furnish the Administration with a report showing that the income of families admitted are within the prescribed limits. The local authority must also periodically examine an tenant families' incomes for the purpose of adjusting rents if required, or evicting families whose incomes have exceeded the marlmum established for continued occupancy. The local housing authority makes a stufy of local needs in order to determine the maximum income limits for admission. Incomes of families compelled to live in slims, minimum incomes of those steadily employed. 0007-HOD-000003429 0007-HUD-000003429 0007-HU D-000003429 32 and income levels allowed by relief agencies are factors which are considered. Usually the maximum income limits for continued occupancy are set at from 20 to 25 per cent above the admission limits so as to allow a family some increase in earnings without requiring eviction. Also, in order to insure low rents, the locality is required to make a contribution in the form of exemption from all real and personal prop erty taxes. However, the law permits local authorities to make payments. In lieu of taxes, up to 10 per cent of the shelter rents charged in the project^ less the cost of utilities. Example Showing How Rents And Subsidies Are Determined Famil ies living in low-rent public housing are required to pay aU< the rent that they can, within reason, in proportion to their incomes. Under the Act, each family must pay not less than 20 per cent of its net income for rent, including utilities, subject to the $100 exemption for each minor dependent as previously explained. The level of rents required to serve low-income families, the cost of operating and paying for the project, and the amount of Federal and local government contributions are the three principal factors which determine the rents to be charged. It is estimated that the shelter rents required to serve low-income families will average about #23 per dwelling unit per month, and that utilities will* cost #7 per month, a total of #30 per month. The Federal contribution, therefore, is the difference between this total and the operating cost, including utilities, payments in lieu of taxes and debt service. Wll I iMfl 0007-HUD-000003430 0007-HUD-000003430 0007-H U D-000003430 33 An Illustration of how the estimate of the average Federal contribu tion or subsidy is arrived at, follows: Operating cost (includes repairs,maintenance and replacements) $13.50 Heat and all other utilities 7.00- Payments in lieu of taxes (10 per cent of $23 shelter rent) 2.30 Debt Service (amortization in 29 years,! 7/8 per cent interest) 31.69 Total Monthly Cost .................................. ................... ......................... $54.49 Shelter Rent $23.00 Utilities 7.00 Monthly Income ............... ........................... 30.00 Estimated average Federal subsidy per month .............................. $24*49 As previously explained, the maximum dollar amount of the Federal subsidy nay not exceed 4| per cent of the project cost (the "going Federal rate" of 2^ per cent, plus 2 per cent). On a project costing $8,450 per dwelling unit, which for the nation as a whole, is the maximum possible average cost if the full contribution and construction authoriza tions are used, the maximum Federal contribution would therefore be 4^ per cent of $8,450 which amounts to $380.25 per year or $31.69 per dwell ing unit per month. Thus the estimated average Federal subsidy of $24*49 per month, as shown above, is only 77.3 per cent of the possible average maxi,mum Federal subsidy of $31.69 per month. Therefore, while it is estimated that less than the maximum Federal subsidy will be generally required, the Federal contract with the local authority permits the maximum payment, if necessary. In this way rents may be kept within the means of low-income families even in adverse times so as to provide the maximum security for the permanent bonds. Moreover, the Federal subsidy may be paid for as long a period as 40 years, as previously explained. However, the expected low rates of interest on the permanent financing bonds sold by idle local authority will permit amortization in less than 40 years. Therefore, if Interest rates 0007-HUD-000003431 0007-HUD-000003431 0007-HU D-000003431  average 1 7/6 per cent, as set forth in the foregoing illustration, amortization could be completed in 29 years. Federal subsidies empire when amortization is completed. Title I Of The Housing Act Of 1919 The Act makes a dear distinction between subsidized low-rent housing (Title III) and slum-clearance (Title I) on the basis that these are two distinct problems and not just one, as heretofor regarded. Briefly, Title I of the Act provides for the clearance and redevelopment of slum areas by encouraging the investment of private capital supplemented by Federal assistance. This Title provides that any loss incurred by a City or local agency in acquiring and dealing slum sites and making such available for private redevelopment, principally for new housing, will be shared two-thirds by the Federal government and one-third by the local government. Federal loans of $1 billion, over a 5 year period, to cover the purchase of blighted land and Federal grants of $500 million, over a 5 year period, to help "write down" excessive land costs, are authorized by Title I of the Act. The Authority* s Progress Under Title III Of The Act As of January 1, 1952 the Authority had 19 permanent subsidized lowrent housing projects under construction or pending construction under Title III of the Housing Act of 1949. The total cost of these projects will exceed $300,000,000, upon completion. Details relating to this program are on pages 92 and 94 inclusive. Details on all of the Authority1 s projects are on pages 90 to 103 inclusive. 0007-HOD-000003432 V `' 0007-HUD-000003432 0007-H U D-000003432 CHAPTER 17 ORGANIZATION AND OPERATION OF THE N. T. CHI HOUSING AUTHORITZ The New Xoric City Housing Authority, established in 1934, is the only official governmental agency in New Toxic City authorized to con struct housing for low income families. "The prinaiy functions of the Authority are to clear slums and to provide decent, safe and sanitary homes for families of low income who cannot afford them.'" Control Of The Authority Under the provisions of the Public Hpusing Law, enacted by the N. X. State Legislature in 1939, a local housing authority shall be composed of not less than 3 or more than 5 menbers, with overlapping terms of 5 years each. It also provided that members be appointed ty the mayor of a city, with each member to serve his 5 year term until his successor is appointed. Under the law the mayor appoints the first chairman bub succeeding y ................ .... Tenth Annual Report, N. Z. City Bousing Authority (1944), p. 10. 35 0007-HUD-000003433 0007-HUD-000003433 0007-H U D-000003433 chairman are selected by the Authority from among its members. The law also provided that menfcers shall serve without compensation, except for necessary expenses. The N. 7. City Bousing Authority was organized on this basis in 1934 end operated accordingly until 1947, at which time the Legislature passed a special Act, applying only to New York City, which provided that the Chairman of the N. 1. City Housing Authority shall not hold office . for a specific term and "say be removed by the Mayor whenever, in his l judgment, the public interest shall so require.**2^ It also provided that the Chairmen shall give his full time to his duties and receive such sal ary as is fixed by the Board of Estimate. Upon enactment of this special Act in 1947, Mayor William O'Diyer appointed General Thomas F. Farrell as Chairman of the Authority. Status Of The Authority1 s Protects As of January l, 1952, the Authority had 45 permanent projects in operation, ^containing 51,262 apartments plus another 33 permanent projects, comprising 40,406 apartments, in various stages of construction or pending construction. This makes a total of 78 permanent projeots consisting of 91,670 apartments. This will result in a total population of about 350,000, which compares with such cities as Atlanta, Ga. (331,31/k San Mego, Calif. (334,387)$ and Rochester, N. Z. (332,488). If the Authority*s 12 Temporary Veteran's Emergency Housing Projeots, having 11,091 apartments, are added to the above total of permanent proj ects the result is a grand total of 90 projects comprising 102,761 apart- 27 Bun & Bradstreet, Inc., Mmicipal Credit Survey, K. Z. City Housfog 4(July 21, 1949), P. 3* | . 0007-HUD-000003434 0007-HUD-000003434 0007-H U D-000003434 37 Bents. Details of these projects are set forth in the Appendix, from pages 90 to 103 inclusive. Types Of Projects The permanent projects range in type from 2-story buildings to tall, fireproof elevator apartment buildings of 17 stories. The temporary Veterans Emergency Housing projects are principally one-story prefabri cated row-houses and converted Quonset huts. The Authority's projects are scattered throughout the 5 Boroughs of the City. Site Selection. Planning And Construction The initial step is to select a sufficiently large site. It must conform generally with the Master Flan of the City, be convenient to schools, churches, stores and transportation, and be served by the nec essary utilities. If the selected site is approved by the Board of Estimate as well as the City Planning Commission, it must then he ac quired. Following this, the architects are engaged to prepare the plans and specifications for the project. Approval must also be obtained from the particular leading agency concerned and the President of the Borough in which the project is to be built. Meanwhile, arrangements may have to be made to close off some of the streets within the project area,, or to widen others and to rearrange utilities. Competitive bids are taken, contracts awarded and finally, provided the tenants living on the site are relocated and existing build ings are demolished, actual construction of the new project can start. Private architects are employed to plan and design the projects but they must work closely with the Authority* s own staff. ^ 0007-HOD-000003435 lvt * 0007-HUD-000003435 0007-H U D-000003435 Various Programs Under Three Levels Of Government She Authority's projects are sponsored by three levels of Governmeat: City, State28 and Federal. In addition there are several dif ferent programs operating under this trilogy. Therefore its structure, particularly from the standpoint of financing, might at first appear complicated.- The terminology "partly subsidized" projects, "fully subsidized" projects, and "unsubsidized" projects, used by the Authority, .and the fact that funds for its projects have been secured from a wide variety of sources, has contributed to general misunderstanding and certain confusion. However, these programs, when examined individually, are basically similar as will be pointed out. In the first place, financial obligations are secured ly some form of assistance contract from the particular sponsoring government,' and the bond issues have a pledge of the earnings of one or more of the projects. Generally the Authority enters into a contract of assistance with the Sponsoring government -whereby the Authority agrees to construct and op erate the project and the sponsoring government agrees to provide the permanent financing and to pay annual, subsidies sufficient to cover the total debt service, if- required. The contract specifies that rentals most cover operating expenses. Subsidy Operation Under Authority1 s Program As has been shown, subsidies were first provided by the Federal government for the purpose of furthering its nationwide program of public2 2S In this and subsequent Chapters, when the words "state" and "State-aided" are used, they refer to the State of Hewlork. 0007-HGD-000003436 *s 0007-HUD-000003436 0007-H U D-000003436 39 .housing. Subsequently, New Yoric State and the City of New York came into the subsidy picture, with the City being empowered to guarantee bonds issued by the Authority. In effect, these subsidies are the cash cost to the taxpayer for public housing. The low rents charged must be sup plemented by an additional source of income in order to make up the difference between rents and expenses, since low-rent public housing cannot pay its way from rents alone. To illustrate, the monthly income and expense for ah average New York City Housing Authority apartment in 1950 was as follows: 29 Income Expense Rent Subsidy Other $40.10 13.57 1.28 Total ...................... $54*95 Operating Debt Service Taxes Reserves Total ........ . $24.87 22.25 4.15 3.68 . $54.95 The Authority's various housing programs are all integrated, op erating under Federal, .State and City assistance as to financing, sub sidies and taxes, as follows. The Fede-wa^Tv-Aided Program Permanent Financing. Under the Housing Act of 1949, the Federal government can, if required, lend the-Authority up to 90 per cent of a project's cost, as has been pointed out. The Authority must raise not less than 10 per cent of the cost by selling its own series A bonds to the public. If the entire issue of series A bonds, covering the complete financing, is not 29 Seventeenth Annual Report, N. Y. City Housing Authority (1950), p. 27. | 0007-HUD-000003437 0 0 07-HUD-0 00003437 0007-HUD-000003437 40 publically subscribed, the balance is bought by the Federal government as series B bonds. For example, if the Authority had a #10,000,000 project and offered #10,000,000 worth of its series A bonds for. public sale, and only #8,000,000 was thus subscribed for, then the Federal government could complete the permanent financing by purchasing #2,000,000 worth of series B bonds. The minimum interest rate on the Federal, or series B bonds,- is set at the "going Federal rate" which is re-defined as not less than two and one-half per cent. Since the income, from the bonds.is tax exeng>t and the \ bonds are secured by the Federal government1 s pledge to pay annual con tributions, sufficient to cover debt service, if required, those sold to the public as series A bonds command veiy low rates of Interest. During 1950, the Authority issued over #116,000,000 in series A bonds to . the public at interest rates ranging from a high of 2.62 per cent to a low . of 1.84 per cent. At the close of 1950 the Authority had #552,600,000 of outstanding obligations.^ Under the present Federal program,bonds mist be paid off in not more than 40 years. Subsidies The Federal government is permitted to make an annual contribution equal to the interest rate on the bonds, but not less than two and onehalf per cent in ax$r event, plus two per cent of the project cost. The City18 contribution must equal at least 20 per cent of the Federal government's contribution, but such does not have to be in cash; it can be the equivalent in tax exemption.30 30 N. X. City Housing Authority, o p. dt.f p. 28. | 0007-HUD-000003438 ; 0007-HUD-000003438 0007-HUD-000003438 41 Taxes Although all taxes are legally -waived on Federally-aided projects, the Authority makes payments to the City, In lieu of taxes, equal to 10 per cent of the rents collected, less the cost of utilities. The State-Aided Program Permanent Financing Under this program the State sells its own permanent bonds to private investors. It then lends the funds to the Authority at the same interest rate which the bonds cany. These bonds, which are generally sold at about the time of a project's completion, have a 50 year maturity. Subsidies In accordance with the subsidy and loan agreement between the State and the Authority, the State agrees to give the Authority sufficient funds each year, if required, to cover the debt service of the loan. This ArmiiAi subsidy is determined by the largest annual interest charge on the State's permanent bonds, plus one per cent of the cost of the project. The City most match the State's contribution, and such can be in the form of tax exemption. However, if this exemption amounts to less than the State1 s contribution, the City must make ip the difference in cash. Taxes The Authority pays taxes, at the current rate, based on the assessed valuation of the property acquired for the project at the time the loan and subsidy contract is signed. The value of the improvement, represented by the new project, is tax exempt. Thus the tax payments may vary from year to year. 0007-HUD-D00003439 0007-HUD-000003439 0007- H U D-000003439 The City-Aided Program 42 Permanent Financing and Subsidies The Authority handles the financing of all City-aided projects directly. Under the present plan it sells, to the public, 50-year bonds guaranteed by the City. Prior to World War II, the City-aided program was restricted to fully subsidized projects, the subsidy being furnished by the special Occupancy Tax on all gainful business establishments in the City, already referred to in Chapter I. During that period, the cost of a project was financed by the sale of 40-year bonds to the public vith the principal and interest payments guaranteed by the City. This phase of the City-aided program is now referred to as Part I. In the Post-Vorld War II period, the Authority embarked on what orig inally was known as the City's "partly subsidized" program and is now referred to as Part U. In order to provide housing for returning veterans who could pay more rent than that charged In fully subsidized projects, but could not afford what was being charged in new private rental housing projects, it was planned to construct projects to rent for about $12. per room per month. However, since it was estimated that it would cost about $15* per room per month to cany these projects, the City agreed to make up the difference by subsidy payments. "Influencing the adoption of this program was the housing shortage in Hew Zork City. This shortage, at the end of 1948, was estimated by the Authority at 260,000 apartments."31 0007-HOD-QQ0003440 m 0007-HUD-000003440 0007-H U D-000003440 43 When the tine arrived for establishing the final rental schedule, it was decided that such would be increased sufficiently to cover expenses and not necessitate any contribution by the City. However, insofar as the security of the bonds was concerned, the City agreed to provide a subsidy if the rentals, as established, were not sufficient to pay all charges. While Fart II of this program was developing, the City, which still had considerable borrowing power but no further, immediate funds for sub sidies, proceeded with the Authority to initiate a "no-cash-subsidjr* public bousing program. \ Sponsored by Mayor William O'lhyer, and vigorously supported by him, this program, known as Part III, differed from any public housing previous ly built In the United States. In March of 1948 the Board of Estimate authorized a $200,000,000 program for this housing, thus conmiting the full amount of NevYork City's housing debt limit. The Authority decided that under this program the rents would be set at & level sufficiently high, viz: higher than in Fart II of the program, so as to cover all operating costs and. debt service without requiring ary cash subsidy. It was further agreed that tax exemption on the value of the improve ments would be granted by the City so as to make the program possible. "It was a time when the housing shortage was most acute, when no Federal aid was apparently, forth coming, and when & not-yet-expanded State program was inadequate to cover the pressing need. By means of this program, which set rents high enough to cover costs, the City could build the greatest amount of housing possible under its restricted debt limit for housing. .At the same time, rents ` would be kept low enough (through the savings made possible by partial tax-exemption, the City's guarantee of Authority bonds and consequent low Interest rates, and a non-profit operation) me 0007-HUD-000003441 0007-HUD-000003441 0007-H U D-000003441 that the program would serve the urgent need of those veterans* families who could afford rentals somewhere between those for subsidized public housing and those for available private housing. Financing The "No-Cash-Subsidy" Program Under the "nor-cash-subsidF," or Part III program, each project is financed by a separate bond issue. Each such issue is secured by a pledge of the revenues of that particular project and is also guaranteed by the City. General Reserve Fund Furthermore, provision is made for certain reserve funds. Surplus revenues from all projects are pooled in a General Reserve Fund which can be drawn upon, if required, to fcelp meet the debt service on any series of the bonds. Debt Service Fund In addition, a Debt Service Reserve Fund, equal to a year's debt service, is provided for each issue from the proceeds of the sale of the bond issue. Should it become necessary to draw on ttts reserve, the Authority is required to replenish it from ary monies legally available for this purpose. In particular the General Reserve Fund. Also, the City is under obligation to make good its guarantee should the Authority be unable to replenish the reserve. Although each project under this program is financed by a separate bond issue and its earnings are the security for that issue, the fact i. City Bousing Authority, o p. cit.f p. 7. 0007-800-000003442 0007-HUD-000003442 0007-H U D-000003442 45 that a*n bonds are issued under a standard resolution, hare the benefit of the General Reserve Fund, and are guaranteed by the City, results in their being regarded as of identical credit quality. Rentals In "No-Cash-Subsidy** Projects Rentals, including gas and electricity, originally averaged $16.39 per room per month for those four projects authorized in the first por tion of this program, known as City-aided, Part II. For the 16 projects authorized in the second portion of the program, known as City-aided Part III, the rents averaged $17.49 per room per month. Sue to favorable interest rates on its bonds, the Authority was able to effect reductions in these rents in 1950, as follows: rents in Part II were reduced in January from an average of $16.39 per room per month to s $15.45, and rents in Part III were reduced in 'Hay from an average of $17.49 per room per month to $16.59* Rents In All Permanent Projects In the Appendix will be found a concise tabulation of the basic monthly rentals, by type of apartment, for all permanent projects. This chart was prepared from information furnished by the Authority and was condensed by the writer to a one page chart for easy reference. A sim ilarly prepared chart, covering the maximum income limits for admission to these projects, follows the first chart. It will be noted that rentals in the State-aided post-war projects are higher than in the comparable City-aided and Federally-aided projects. This is due principally to the difference in the method of paying taxes, as explained previously in this chapter under The State-Aided Program. | 0007-HOD~000003443 0007-HUD-000003443 0007-H U D-000003443 Tannwfc Eligibility 46 The Authority makes a careful investigation of every applicant for an apartment regardless of what program the project is classified, in. Income and present living conditions are given particular attention. Eligibility requirements are set up by lav and by Authority regulation. Generally, to be eligible, a family must include an American citizen, must have lived in New York City for at least two years immediately prior to the time of its admission, must be without housing of its own, or else living in slum bousing, and must have an income not exceeding the pre scribed maximum. Also, by lav, veterans must be given priority in the post-war projects over all other applicants except eligible families displaced by public bousing construction. The lav is also explicit in that no discrimination can be made along racial or color lines. Surcharges As the income of a tenant increases, a surcharge is made until that tenant pays what is called a full economic rent. These surcharges are applied to reduce the amount of the cash subsidy being provided by the particular sponsoring government. The Authority makes periodic investigations of the income of tenants. The original plan was to compel tenants to move when their Income increased more than 50 per cent above the maximum allowed for the apartment occupied. In order to make housing available to others. During the war, and immediately thereafter, the Incomes of mazy public housing tenants shoved substantial Increases. However, due to the housing Shortage and rent regulations, moving was difficult and it became 0007-HtJD-000003lltt4 0007-HUD-000003444 0007- H U D-000003444 47 more or less expedient for the Authority to allow such tenants to remain. A considerable number of tenants in some of the projects had incomes In excess of the stated maximum. These tenants were, of course, subject to the surcharges which have decreased the required subsidies. Vacancies And Collections Once occupied, the vacancy losses are kept at the very minimum since this housing is such a bargain that no one moves out unless it is abso lutely necessary. Obviously, the rent collection experience is also very satisfactory and since these rentals are in line with what social service agencies will allow for relief, it does not appear likely that the collec tion problem would ever become too serious even in a depression.^ Release Of Project From pebtJfimitation As briefly pointed out in Chapter II, the New York State Constitution grants the City a debt incurring power,for public housing development, of two per cent,- over and above the 10 per cent limitation, of the average of the current assessed valuation and those of the past four years .Chargeable against this debt limitation are the value of all cash subsidies,aqjr direct loans for housing, and any housing bonds which the City guarantees.On the basis of one year's operating results showing that a project is self-support ing, the debt incurred for it may be excluded from the borrowing limitation. Taxation Of Cltv-Aided Projects While City-aided projects are fully tax-exempt by law, the Authority 33 Dtm & Bradstreet, I, p. 21. 0007-HOD-000003445 0007-HUD-000003445 0007-H U D-000003445 48 pays taxes based on. "the assessed valuation of the property at the time of acquisition, at the rate then in existence* The value of the improve ments, represented by the new project, is tax exempt* Thus, the tax pay ments are constant from year to year* One exception to this method was First Houses* Originally tax exempt, it now pays, in lieu of taxes, 10 per cent of the Annual rents collected less utility costs* Temporary Loans The Authority finances all of its projects, until nearly completed, with temporary loan notes, securing very favorable interest rates which vary between 3/4 of 1 per cent and 1*25 per cent* ManflftinArft And Operating Since management and operating were well covered in a very compre-- hensive thesis which was selected for the Library last year3, 4 those phases of the Authority1 s work will only be highlighted here* General management policies are formulated by the central office of the Authority while the details and the daily problems are handled at the individual projects, where representatives of the Authority have the responsibility and author ity to act* Project management and operating staffs include everyone from stenog raphers and managers to watchmen and porter-foremen* An average project <0 * ^ of 1,200 to 1,560 families requires 37 employees including a superintendent, o assistant superintendent, stock: cleric, stenographer, 17 porters plus a o .^ kelson, Valter H., "tri trial^rsls Of The Operation Of Thi-Hw-Jiva Permanent Housing Projects Controlled By The N. Y. City Housing Authority ^ For The Eleven Year Period From January 1940 To December 1950"(American | Bankers Association, New fork, N. I., and New Brunswick, N. J., 1951) 0007-HUD-000003446 0007- H U D-000003446 49 foreman, and five firemen, five handymen and five watchmen. As of January 1, 1952, The Authority had a total of approximately 5000 employees. The Authority is required by law to operate under Civil Service and the Staff, therefore, is appointed in accordance with the rules and reg ulations of the Municipal Civil Service Commission. The work week is limited to five days and each employee is entitled to 36 .days leave per year for vacation, paid holidays and sickness. Planned budgeting, careful inventory control, volume purchasing, standard parts, and prompt attention to repairs reduce maintenance and replacement costs considerably. Nursery Schools And Community Centers Specially designed nursery schools, which provide full-day or parttime care for the children of employed mothers, are a feature of all proj ects. In addition, there are community centers covering all age groups from children to elderly people, where a variety of activities are conducted. These centers are usually situated in the basement space of the projects, although in some instances special buildings have been provided for this purpose. 0007-800-000003447 0007-HUD-000003447 0007- H U D-000003447 CHAPTER V THE CHANGING PATTERN An analysis of certain statements of policy made by the Authority in recent years reveals a singularly significant shift in some of its orig inal purposes, especially during the period following Vorld War II. Authority* p^wary Functions In The Pre-War Period : Up to the war-time period, the primary functions of the Authority had been to dear slums and to provide low-rent public housing exclusively for people of very limited means. The primary functions of the Authority are to dear slums and to provide decent, safe and sanitary hous tihnegmfo.^r5.families of low income who cannot afford At that time Fiorello H. LaGuardia was Mayor of NewXork City, having been in office since before the Authority's establishment in 1934*. Post-War ** T" pTTrtWA However, in the post-World War n period, under the then -Mayor William 35 Tenth Annual Report, N. X. City Housing Authority (1944) > P 10. 50 0007-HOD-000003448 0007-HUD-000003448 0007-H U D-000003448 51 O'Dwyer's sponsorship and vigorous support, the Authority embarked on a vast program of higher-rental housing for middle-income families, described in the previous chapter under the "no-cash-subsidy" phase of the City-Aided Program. This shift in policy, from the primary functions of clearing slums and building low-rental housing for low-income families exclusively, was authenticated in the Authority's Seventeenth Annual Report.' "The primary purpose of the public housing program is to provide clean, decent, and healthful homes for families who otherwise, through.no fault of their own, could not afford them."1*0 Ary references to the clearance of slums and the housing of lowincome families, as primary functions of the Authority, were omitted from this post-war statement of the Authority's primary purpose. Authority's Original Post-War Plan This transition developed in the following manner. In the Authority's "Post-War Program," which was set forth in its Tenth Annual Report (1944) , it was recognized that the cecessation of construction during World War II presented an unusual opportunity to formulate plans for the peacetime period ahead. The Authority recognized the advantages of being ready for tiie day when materials and labor for public bousing construction would again be available. This report declared that, during the construction lull, the selec tion of suitable sites for a post-war program could be made with due and careful deliberation rather than in baste and confusion when peace came. Formal approvals and authorizations ty the Mayor,City Planning Commission, 36 " Seventeenth Annual Report, N. I. City Housing Authority (1950), p. 6. ri 0007--HUD-000003449 0007-HUD-000003449 0007-H U D-000003449 52 Board of Estimate and other agencies, could be obtained. Architects could be appointed, plans and specifications completed. Project sites could be acquired and cleared, wherever possible, and tenants gradually and systematically relocated. Co-Operation With Private Enterprise It was felt that a policy of advance programing would not only assist in the subsequent planning of necessaiy municipal improvements and facil- ities for the project sites, but. would also result in opening the way for private enterprise to co-ordinate its activities. Edmond Borgia Butler was Chairman of the Authority at that time. Reservoir Of Post-War Projects The Tenth Annual Report further stated that, in addition to the aforementioned project program envisaged, funds were available for 13 def inite post-war projects, of which 11 were to be built under the State- sided program. Also, tentative proposals had been made for the extension of 3 existing Federally-aided projects, and the Authority was also prepared to file proposals for several other projects, since the Federal government had announced that it was reafy to accept applications for post-war public housing projects. All of the above were to be low-rent projects for low- income families. Thus, in*1944, the Authority had 16 projects definitely scheduled for construction after the war. This program, by itself, and not Including the Authority's contemplated projects, was larger than the entire public bousing program achieved in New York City by the Authority in the 10 years since 1934, which totaled 13 projects. S. 0007-HUD-000003450 iwnt! 0 0 0 7-HUD-000003450 0007- H U D-000003450 Postwar Housing Shortage In City 53 The four-year period from 1942 to 1946 saw no new public bousing construction in New fork City due to wartime restrictions. However, in 1946, with hostilities raided, thousands of veterans of World War II were returning and new families were being created. The housing situation in the City was acute. In that year the Authority estimated that there existed a shortage of 150,000 apartments, the greatest housing crisis that the City had ever faced in its history.^ Temporary Veterans* Emergency Housing Program The Authority took immediate steps to relieve the criticsl situation insofar as the returning veterans were concerned. Tenqporary housing was started in January 1946, end the first units were ready in April of that year. A total of 12 Temporary Veterans' Emergency Housing Projects were built under the program, 8 with Federal assistance and 4 with State aid. Apartments'were provided in converted Quonset huts and prefabricated rowhouses. The Federal portion of this program accounted for 8600 apart ments end the State for 2491 apartments, a total of 11,091 units. ' Permanent Public Housing Projects Undertaken Meanwhile, that portion of the Authority's permanent public housing program, which bad been definitely prepared during the war period, also proceeded so that by the end of 1946, the first year after World War II, a total of 16 post-war projects, having 17,711 apartments, were either 37 Fifteenth Annual Report, N. Y. City Housing Authority (1948), p. 8. 0007-HOD-000003451 0007-HUD-000003451 0007- H U D-000003451 completed or under construction . 54 This included 8 permanent projects comprising 6620 apartments and 8 temporaiy projects having 11,091 units. The majority of the permanent projects vere State-aided projects. Details of these projects are compiled in the Appendix. In contrast, during the entire 10-year period from 1934 through 1944, the Authority had to its credit 13 projects comprising 16,840 apartments, which included the 2 Public Works Administration projects, Williamsburg end Harlem River Houses, built ty the Federal government and operated by the Authority.^ The "Straus Plan11 Meanwhile, on June 7, 1946, a number of veteran and labor organiza tions, of which Nathan Straus, former Administrator of the U. S. Housing Authority, was Chairman, presented to then-Mayor William 0*Dvyer a program for unsubsidized, self-supporting housing projects. Known as the "Straus Plan," it proposed that the H. X. City Housing Authority build public housing projects, of the 3 and 4-story garden apartment type, to rent for $40 to $60 per apartment per month to middleincome families who were not eligible for subsidized public housing due to excessive income. I :?P Financing Under The Proposed "Straus Plan" The plan was to obtain the capital for construction by the sale of bonds to be issued by the Authority and secured under a new and unique Housing Report to Mayor William 0 'Dwyer, January 1946 to July 1949, N. X. City Housing Authority (1949), p. 7. 39 Project Statistics, N. X. City Housing Authority (April 1951) pp. 2 to 4. I, . 0007-HUD-000003452 0007-HUD-000003452 0007-H U D-000003452 55 plan of permanent financing. This financial plan provided that tvothirds of the permanent bond issue -was to be secured by a mortgage Hm on the entire project. Interest and amortization of the bonds would be met by the rentals, of vhich 100 per cent were to be available for debt service. The balance of one-third of the bond issue would, under the plan, be guaranteed by the City. Since the rents were to be set at a level to cover interest and amortization of 100 per cent of the bond issue, the bonds would be self-liquidating. Proposal For A Special Tax The sponsors emphasized that there was no concern that the tenants would fail'to pay rent, based on the collection record of the Authority* s subsidized projects. Furthermore, it was felt that, in all probability, the City would never be called upon to make good its guarantee of one-third of the bond issue. Moreover, so long as the bonds were self-liquidating, the one-third guaranteed by the City would not be chargeable against the debt limitation. To insure further that the bonds would never be included in the City debt, the plan called for special taxes in the amount of $10,000 per year for each $1,000,000 of new housing, in other words a 1 per cent tax. This tax revenue was to be raised by the City under its power to levy excise taxes for capital or periodic subsidies. The "Straus Plan" sponsors contended that it would not be necessary to collect this tax after the first year, so that the initial proceeds would remain in the City treasury unless required. Thus, over the 50-year life of a project, the entire burden, insofar as the taxpayers were concerned, would, in all eventuality, not exceed 1 per cent of the Initial project cost. % 0007-HUD-000003453 W, 0007-HUD-000003453 0007-HU D-000003453 Plan For Partial Tax Exemption 56 It was also proposed that annual real estate taxes be charged at the rate of 3 per cent of the site cost, and that the nev improvements thereon be exempted from taxation. Proposed Rents Under "Straus Plan*1 On the basis of a 2 per cent or 2jjf per cent interest rate on the per manent bonds, and a 45 year amortization period, a project built by the Authority under this plan vould be able to offer 2-room apartments for about $40 per month and 4-room apartments for about $60 per month, includ ing utilities, according to the sponsors. 1-: 1v Constitutionality And Financial Feasibility Of Plan The proponents of the "Straus Plan" declared that, in the opinion of leading lav firms specializing in constitutional lav, the plan vas sound and that the special provision for a 1 per cent tax on the cost of a proj ect vould conform vith the State's constitutional requirements. From the standpoint of financial feasibility it vas pointed out that a number of hanking syndicates had purported that the bond issue as proposed could be marketed at an interest rate of about 2| per cent. I! Site Selection. Cost And Density The sponsors agreed to obtain suitable sites at reasonable cost in aqjr of the boroughs of the City outside of Manhattan. The cost of the sites vould he lov enough so as to permit a limitation on the density of 0007-HOD*000003454 0007-HUD-000003454 0007-H UD-000003454 57 from 25 to 50 families per acre, A number of actually available sites, ranging in size from 30 acres to over 100 acre% were submitted to Mayor 0*DwyerIn the case of sites available at $2 per square foot, the rents as proposed would be possible on the basis of a density of 50 families to the acre,whereas on land costing $1 per square foot the same rents could be achieved on the basis of a density not exceeding 25 families to the acre. "The 0'Dvyer administration neither accepted nor rejected the program as offered in June, 1946. For 18 months it simply did nothing. But civic and veteran organizations refused to let the plan die. A vigorous campaign was launched to push the City government into action. The campaign reached a climax with a radio series entitled 'A Home To Live In,1 urging listeners to bombard. City Hall with letters. Two weeks after the program was launched. Mayor 0*D>yer announced that the City would undertake a program of housing without cash subsidy."^ j [; j ., `j ! [: '' Ij ; ' { 0 Dwver-Sponsored "No-Cash-Subsidy" Plan TMnan-g Started However, 20 months elapsed between the time that the "Straus Plan" was submitted in June, 1946, and the time that the Board of Estimate au thorized the "no-cash-subsidy" program in March, 1943. The first project under this program, a drastically modified version of the "Straus Plan" was undertaken in June, 1943. Meanwhile, Meyor O'Lvyer removed Mr. Bubler, appointing Mr. Farrell as Chairman of the Authority. Record Of "No-Cash-Subsidy" Projects Built Under the 0'Ihyer-sponsored "no-cash-subsidy" program, 20 projects, having a total of 21,094 apartments, to accommodate an estimated population Straus, Nathan, Two-Thirds Of A Nation (Alfred A. Knopf, New-York, 1952), p. 105. \ 0007"HUD~000003455 0007-HUD-000003455 0007-H U D-000003455 58 of 73,403* were constructed at a total development cost of $232,307,000. Financing, and other details, were described in the previous chapter. Physical details and pertinent statistics covering the ttno-cash-subsidy11 program are included in the Appendix. These 20 projects were built, for the most part, on vacant land at densities which ran as high as 449 per sons per acre. Rentals originally averaged $16.39 per room per month in the first 4 projects and $17.49 per room per month in the balance of 16 projects. Purpose Of 0* Dwyer-Sponsored Plan The purpose of this program was to provide housing for those vet erans1 families who could afford rentals somewhere between those for subsidised public housing and those for available private housing, as previously explained. "It was a time when the housing shortage was most acute, when no Federal aid was apparently forth coming, and when a not-yet-expanded State program was inadequate to cover the pressing need.,,^J* Status Or State And Federal Programs A+. TVin-fc iMm. In the following paragraphs, reference is made to the actual record of State-aided public housing undertaken in N. X. City during the period covered by the above quotation. Thus, while the controversy between the proponents of the "Straus Plan" and the City government continued, and prior to the commencement of the City's "no--cash--stibsity" plan, the Stateaided subsidized public housing program, previously referred to in this ASeventeenth Annual Report, N. X. City Housing Authority (1950), p. 7. 0007-HUD-.00000 34 56 FK' " 0007-HUD-000003456 0007-HUD-000003456 59 chapter under "Reservoir Of Post-ar Projects," vas actually proceeding without interruption. The status of the program for Federal aid, during the period covered by the Authority's quoted statement in the above paragraph, vas described in Chapter II, on pages 24 and 25. Record Of State-Aided Construction During 1946, construction vas started on 5018 apartments in Ii. I. City under the State-aided program and another 4682 apartments were started in 1947, a total of 9700 undertaken in these 2 years. In 1948, construc tion vas started on an additional 5699 apartments under State assistance, so that the grand total of the State-aided starts in the 3-year period vas 15,399 apartments. This State-aided program continued -without pause in 1949, with 3669 apartments started' in that year and another 1737 started in 1950 so that in the 5-year period from 1946 through 1950 there was no cessation in this program, which accounted for 20,805 apartments. This compares with the total of 21,094 apartments provided in the 0'Dwyer-sponsored "no-cashsubsidy" program. In addition to the above actual construction starts, architects were at work on 7 more State-aided projects as of March 31, 1951, vhich would result in an additional 7356 apartments. Review Of lfri*Ai-tng State Legislation The N. X. State legislative action which made the above program possible goes back to 1939, vhen the Public Housing Law was enacted, as set forth in Chapter II, on page 20, under "New York State Aid For Public Housing." The law authorized the State to borrow #300,000,000 to be used for loans and to agree to pay a total not in excess of #5,000,000 a year ^ - 0007-HUD-000003457 0007-HUD-000003457 0007-H U D-000003457 60 for subsidies. The Public Housing Law further provided that the above suns could be increased only by the passage of appropriate bills by the State Legislature which must be approved by the voters at a general election. In 1945, a referendum increased the total annual subsidy payments to $6,250,000 and in 1946 another referendum increased them to $9,000,000. In 1947, before Mayor O'Dtyer* 3 "no-cash-subsidy" plan was authorized by the Board of Estimate of N. Y. City, the N. Y. State loan fund for sub sidized public housing was increased by another $135,000,000. Simulta neously, the subsidy payments were increased by another $4,000,000 to a total of #13,000,000 per year. In the 1949 State elections, another $300,000,000 in loan funds and an additional $12,000,000 in annual subsi<fcr payments were approved by the voters. The totals since 1939, therefore, are $735,000,000 for loans and $25,000,000 for annual subsidies.^ 1! Unexpected Popularity Of Temporary Projects During 1948, the year in which the O'Dwyer-sponsored "no-cash-subsidy" program was finally undertaken after considerable delay, the Authority conducted a survey of veteran tenants living in the temporary housing projects. This survey revealed some vexy significant information. In the first place, "nine out of every ten veterans queried stated flatly that they liked living in the temporary projects."^ In its Fifteenth Annual Report (1948), the Authority acknowledged that 42 Citizens' Housing & Planning Council of New York, Inc., Directory and Review (1950), p. 14. Fifteenth Annual Report, H. Y. City Housing Authority (1948) , p. 16. ;r j; . i \ 0007-HUD-000003458 0007-HUD-000003458 0007-H U D-000003458 61 this reaction ms unexpected, particularly in view of the fact that there had been a shortage of fuel in the temporaiy projects during the winter of 1947-43. Moreover, although 93 per cent of the tenants in the temporary projects were aware that they could apply for apartments in the new per manent projects, less than one-third did so. "While the survey did not indicate that veterans living in temporary units wanted to spend the rest of their lives there, it did indicate that they were not anxious to move until they found the right place; in the meantime, despite the inconvenience, they wanted to stay."44 Notwithstanding, the Authority proceeded with the building of over 21,000 apartments in permanent projects under the "no-cash-subsidy" plan as previously explained, after curtailing the temporary program. Analysis nf Vam-iHaa who Moved From Temporary Projects In a subsequent report, covering 1949* the Authority stated that out of a group of approximately 1500 families living in the temporary units, 25 per cent moved into private housing and 15 per cent bought their own homes. Insofar as the Authority's "no-cash-subsidy" program ms concerned, there were a total of 2500 families living in these new projects by the end of 1949, of which only 15 per cent, or 375 families, came from the temporary projects. As shown in more detail in the Appendix, rents in the' "no-cashsubsidy" program are as high as $89 per apartment per month and are avail able to families earning as much as $4,900 per year. The Density Trend In New York City The original street and block pattern of New Tork City was planned l'I 44 N. X. City Housing Authority, o p. cit.. p. 16. 0007-HOD-000003459 0007-HUD-0 00003459 0007-H U D-000003459 62 for a density of from 60 to 90 people per acre of land. However, the City's population expanded rapidly during the nineteenth century, due principally to the large streams of immigrants from abroad. Just before the turn of that century, the congestion was greater than in any large European city. The figures shoved 143.2 people per acre for Manhattan as against 125.2 in Paris; the Tenth Ward Of New York, 626.2, as against a similar area in Prague, (the worst in Europe), of 458.4."A3 Authority' s Original Policy Regarding Density Shortly after the New York City Housing Authority was established in 1934, when plans were being formulated to attack the long-existent slum problem, Langdon W. Post, the first Chairman of the Authority, propounded & fundamental precept relating to the question of density. "Ve must never again allow the crowding of the land as we have in the past. The number of people permitted to be put into an acre of land must be drastically reduced. The uses to which the land may be pub must be rigidly controlled and encroach ments on the plans laid down for this area must be _ prevented at all costs* If such a program is inaugurated the next few years will witness the rebirth of a city which at the present moment is rapidly decaying."*" Vhen. the Authority started to build its first projects under the U. S. Housing Act of 193V, the average population density of residential New York City was 190 people to the acre. JC Ford, James, sinwi nd Housing (Harvard University Press, Cambridge, Massachusetts, 1936), p. 187. ^The Feil-nva Qf Housing Regulations. N. Y. City Housing Authority (1936), P 19* .I ) 0007-H0D-000003*160 * 0 0 0 7-HUD-0 00 003460 0007-H U D-000003460 Deviation From Original Policy 63 Notwithstanding the precept set forth by Mr. Post, the population density of the slums vas not only maintained, but in numerous instances intensified, in the Authority's projects which replaced them. The first 7 projects under the 1937 Act: Red Hook, Queensbridge, Vladeck, South Jamaica, Bast River, Kingsborough and Clason Point, bad an average popula tion density of 235 persons per acre, well above the average for the City. Only one project, "Clason Point Gardens," had a density of less than 100 persons per acre. Ho Shortage Of Vacant Land Nevertheless, more than 30 per cent of the City's area, totaling over 58,000 acres, vas either vacant or occupied by unused streets at that time. "If one-third of this vacant area had been utilized for residential purposes - about the normal propor tion - nearly 2,000,000 more people could have been accommodated at a density of no more than 100 persons to the acre. Even in 1951, about 20 per cent of the area of the greater City was vacant land.4" The Trend Towards Greater Densities And Taller Buildings The trend In the direction of greater densities has continued steadily* One project, "Vladeck City Houses," has a density of 507 people for each acre of land. This trend has been paralleled by a trend to taller build ings. In the early part of the Authority's program, the projects ranged in height from 2 to 6 stories, as a general rule. Subsequently, the taller 47 Straus, on. cit.. p. 160. 0007-HOD-000003461 000 7-HUD-000003461 0007-H U D-000003461 buildings -up to 17 stories, in super-block developments, became the 64 general rule. There has also been a concentration of the Authority's projects in certain areas of the City, more particularly on New York's Lower East Side. An Outstanding Low-Densltv Project "Clason Point Gardens," in the Bronx, one of the Authority's initial projects previously referred to, has the least density of an the proj ects. With a density of 95 people to the acre, it consists of 400 apart ments built in 2-story groups on the garden type, around a central "village green." The project occupies 17 acres of land which was purchased for $260,300, and average of around $15,300 per acre, or .42 cents per square foot. This amounted to approximately $650 per family for the land. There are only two projects of the 2-stoiy type in the Authority's per manent program. At the dedication of "Clason Point Gardens," upon its completion in December, 1941, Nathan Straus, who was then Administrator of the 0. S. Housing Authority, said: "X have always believed, and I still believe, that men and women were not intended to live in tall, crowded buildings and that children can best enjoy a happy and healthful childhood, if, instead of being crowded into even the best of six, eight and ten-story buildings, they were enabled to live amid the surroundings that you see as you look about you today."* The Trend Towards Costlier Project Sites The prices paid by the Authority for land have ranged from a low of -------- -- -- . 4*Clason Point Gardens (N. Y. City Housing Authority, 0007-HUD-000003462 m 0 00 7-HUD-000003462 0007-H U D-000003462 65 #2178 per acre, or 5 cents per square foot, to a high of approximately #450,000 per acre, or about $10.63 per square foot. The following information, obtained from the Authority* e "Project Statistics," released on January 1, 1952, illustrates the two extremes: Todt Hill, Richmond Carver, Manhattan (Completed 6A/50) (Under Construction') Humber of Apartments Humber of Rooms * Humber of Acres Total Land Cost ** Land Cost Sq. Ft. Land Cost per Acre Land Cost per Family Land Cost per Room Total Population Density (Persons per acre) Coverage *** 502 1923 13.3 #32,013 #.05 $2178 $64 $16 1754 132 13.# 1246 5134 13.4 #6,006,722 $10.63 $450,000 $4820 $1170 5436 406 14JC * Refers to actual construction rooms. ** Land Cost, exclusive of site and other improvements. *#* Per cent of land covered ty buildings. Lack Of A Uniform Poller Thus, within a comparatively recent period, the Authority paid #32,013 for 13.3 acres of land in an outlying section of the City and #6,006,722 for 13.4 acres in the heart of the City, on Park Avenue. It will be noted that while the coverage, or percentage of the land occupied by the buildings, is about the same in each case (13.6$ and 1/Si), the high cost of the land in the Manhattan project dictated a density of 406 persons per acre as against 132 in the Richmond project. This resulted in a land cost per family of $64 in Richmond compared to $4820 per family in Manhattan. If the cost of the site improvements, exclusive of actual building costs, is added to the land cost in the Manhattan project, the cost per family for land and improvements to the V 0007-h o d - 0 0 0 7-HUD-00000346 3 0007-H U D-000003463 66 site will total $7169, which approaches the actual average construction cost of $7605 per apartment in the Manhattan project - resulting in a total average development cost of approximately $14,774 per family. This Illustration does not represent an extreme isolated case of high land costs, since the average cost of land, not including site Improvements, was $99,639 per acre, or about $1608 per family, for the 78 projects analyzed in the Authority's "Project Statistics," previously referred to. Thus, it is evident on the basis of the facts, that there has not been a uniform policy guiding the Authority's site purchasing program. The trend has been towards higher prices per square foot, and the pref erence has been given, therefore, to costlier locations in the congested heart of the City rather than in its outlying open areas, where the Authority has demonstrated that comparatively inexpensive land could currently be obtained. For example, in addition to the Richmond project above cited, the Authority had projects actually under construction in the Bronx, Brooklyn and Queens, as of April, 1951, where the cost of the land was less than .50 per square foot. However, these cases were very much in the minority, as shown in more detail in the Appendix. The School Problem. notwithstanding the fact that the Authority is fully aware of the need for adequate school facilities accessible to its projects,, a vast number of apartments have been built in areas where existing school accommodations are totally insufficient to meet the requirements. Consequently, new schools must be constructed or present facilities expanded. Meanwhile a large percentage of vacant classrooms stand idle in existing schools serving areas which the Authority has passed 19. i *j-. * 0007-HUD-000003464 0007-HU D-000003464 CHAPTER VI CONCLUSIONS AND HECOMMQfMTIONS From this point on, the thesis is based upon ay considered opinions after a careful analysis of all the foregoing facts. There are a nunber of fundamental deficiencies in the Authority1 s public housing program, in ny estimation. At the outset, however,it will be conceded that, up to a certain point, the Authority's record of accom plishment was generally commendable, insofar as its primary function of clearing slums and providing housing for low-income families was concerned. Aifthority Goes. iMJLAZlfiM P? Iufowfl However, in recent years, the Authority has digressed from that exclu sive function. This has been affirmed in its own words and deeds. It has been, shown in the thesis how the Authority's statement of purpose, follow ing Vorld War XX, failed to include the clearing of slums and the housing of low-income families as its primary functions. The launching of the 0'Dwyer "no-cash-subsidy* program in 1948 marked the point where the Authority embarked on a course contrary to that which m 0007-HUD-000003465 0007-HUD-000003465 0007-HUD-000003465 bad been originally charted and which, was reaffirmed during orld War 11, in anticipation of the advent of peace. The construction of 20 permanent housing projects under this program, at a total cost approximating $230,000,000, to accommodate more than 21,000 middle-income families at basic rents of as high as $89.00 per apartment per month, broke the traditional policy of housing low-income families to the exclusion of all other groups. Of the above-total cost, about $190,000,000 represented the improvements, which are exempt from taxation. Temporary Housing Was Practical Answer The "no--cash-subsidy0 program introduced public housing for higherincome families to this nation for the first time in its history, and thereby created a whole new series of problems. It was ostensibly justified by its sponsors on the grounds of the post-war housing emergency plus their contention, disproved by facts, that government-aided programs did not meet the urgent need. Notwithstanding, about three and one-half years elapsed between the hostilities ceased and the time that the first of the "no-cash-subsidy" projects was completed. On the other hand, temporary bousing projects for returning veterans were being built rapidly commencing in January 1946, so that In a matter of months they were ready for veterans and their families. As has been pointed out in the thesis, over 11,000 of these emergency units, approximating half the number of "no-cash-subsicly" units, provided a quick jyp satisfactory answer to the housing shortage. The Authority* s own sur veys nd reports confirmed the popularity of these temporary veterans homes. i 0007-HUD-000003466 0007-HUD-000003466 0007-H U D-000003466 It has also been shorn how the State-aided program was proceeding 69 uninterruptedly and the hugh Federal program was rapidly coming into being. Alternate Plans Available To Authority The Authority should never have undertaken the vast "no--cash-subsidy" program in the first place, in ny opinion. In doing so it committed one of its major mistakes. Even the widely debated "Straus Plan" was superior to this O'Dwyer sponsored plan. Conceding that the City felt obligated to provide more housing for returning veterans in the middle-income class, then the practical approach would have been to expand its temporary housing program. The addition of approximately 21,000 more of these units, which could have been quickly constructed, manifestly would have solved the immediate problem in a much more satisfactory manner than did a similar number of permanent housing projects, the first of which was not completed until December 30, 1948. Thus the emergency would have been met at its crisis instead of three and one--half years later. It was also within the Authority's power to avail itself of New fork State* s Limited Dividend Housing Lav of 1926, previously described. Under this law* s provisions, the Authority could have sponsored privately financed cooperative housing projects of the type which, the State initiated at Bell Park Gardens in the Beyside section of Queens County, N. Y. This project, the first of its type in the State* s program for middle-income families, consisted of two--story garden type apartments for BOO families. The veteran cooperators made original down payments of approximately $240 per room. Their monthly carrying charges, including full maintenance and operation, taxes, amortization, and interest on the | 0007-HUD-000003467 i | 4 *i ;! 0007-HUD-000003467 0007-H U D-000003467 70 EHA Insured, bank financed mortgage, amounts to an average of only about (14.00 per room per month, which, 'was less than the basic rents in the socalled "no-cash-subsi^y* projects. The Authority obviously under pressure from City Hall, did not take advantage of this opportunity either, and proceeded with the 0 'Dwyer sponsored program instead. Tax Burden Shifted To Private Owners Had the Authority wisely selected any of the alternate plans available for meeting the housing needs of veterans. Hew fork City would have been spared over a quarter of a billion dollars worth of permanent housing which enjoys the advantages of tax exemption on the improvements, a situation s which can prevail until about the year 2000 A.D. Obviously this tax load has been shifted to private ownerships, there by Increasing their burdens. Thus, while the program has been termed "no-- casb-subsicy, there is actually an enormous tax subsidization, since the Authority pays taxes on the assessed valuation of the property at the time of acquisition, at the rate then in existence so that the improvements, represented by the new project, are tax exempt. How, since the majority of the projects under the "no-cash-subsid(yn program were constructed on vacant land, the extent of the tax subsidy is apparent. Lowwlncome Barred From OtDwver Program Moreover, the doors of these projects were not open to poor and neecy families, since they could not afford the middle-income rents. These lowincome families were just as desperate for housing in the post-war period, \ | 0007--Hub-000003468 0007-HUD-000003468 0007-H U D-000003468 71 and undoubtedly had just as maty returning veterans as the higher income groups for whoa the permanent housing was constructed, at the expense of the less fortunate. Further repercussions of the mistake made by the Authority is home out by the fact that in mid-March of 1952, as these conclusions were being set down. Mayor Vincent R. Impelletteri, in opposing a proposed cutback of low-rent Federally-aided housing by Congress, declared in the press that low-income veterans, and their families, who have "lived since their return to civilian life in squalid quarters, awaiting a chance to rent a decent home, would meet again with frustration" if the Federal program were cut. Xet, while all this was going on, a policy of closing up the temporaiy Emergency Units was being pursued. * Rental Competition Kith Private Properties I The rentals in the "no-cash-subsidy" projects are in direct competi tion with a large segment of privately owned apartment buildings. More over, the Authority has the right to increase rents in these projects at will, and without notice or preliminaiy hearing for its tenants. This right has been upheld by the Supreme Court. The Court has ruled that since these projects are not subsidized, and since rents must balance costs, there is no provision of law which directly or indirectly suggests that a tenant's rent may not be increased by the Authority without a hearing. The Authority can also reduce rents, so that in a period of economic stress, as the income of tenants decreased, rentals could likewise be reduced. In the Authority* s subsidized projects, for example, this could 0007-HUD-000003469 0007-HUD-000003469 0007-HUD-000003469 72 be accomplished by using a larger amount, or all, of the cash subsidy available. Since rents are scaled to the income of each family and bear no relation to the number of rooms, the rents will be higher in good times and the full subsidy will not be required, whereas in adverse times the rents can he lowered by utilizing more, or all, of the subsidy. Authority* s Advantages Over Private Owners The Authority1 s apartments are such bargains that no one moves out unless it is absolutely necessary. Consequently, there is always a long waiting list. During a depression there will be an added demand for apart ments from higher-income families who have met with financial reverses. If a vacancy problem ever should arise, the Authority could obtain addi tional tenants, from privately owned apartment buildings, simply by increasing the required income levels for admission. Such flexibility by an agency of government is nothing short of phenomenal when one considers the governmental restrictions under which private owners are forced to operate, in addition to this potential threat of competition from public housing. Private enterprise enjoys no such multiple advantages for dealing with prosperous periods or for meeting economic depressions. On the con trary, the earnings of private owners are further reduced as a result of being required to bear the additional load of taxation resulting from the tax exempt features of the Authority's projects. I would like to point out, however, that the tax bill for public housing which provides decent homes for low-income families, who formerly lived in slums, must, in all fairness, be considered in respect to the high cost of maintaining slums. 0001-HUD-000003470 '1 0007-HUD-000003470 0007-H U D-000003470 73 The benefit from this type of public housing is the elimination of some of the conditions which make slums a drain on the community. 1; Danger Of Too Much Public Housing Manifestly, if public housing can reduce physical hazards, juvenile delinquency, crime and disease, then it will make a direct contribution toward decreasing the cost of municipal services. However, unlimited public housing construction and the resultant shifting of a heavier burden on the diminishing remainder of privately held property could prove disas trous for owners and could eventually bankrupt the City. On the front page of the March 11, 1952, issue of "Realty," Borough President Robert F. Wagner Jr., reported that. In Manhattan, $9 per cent of the area is tax exempt and that for the first time in its history, N. X. City has more tax exempt than taxable area. Since the City's basic taxing powers, as well as the restrictions on its borrowing capacity, are related to real estate assessments, it is obvious that more and more public housing reduces the source of revenue. Authority's Poller Of Securing Best Sites Moreover, the Authority's policy of acquiring sites, for exanple along the Bast River, on Manhattan's Lower Bast Side, has precluded the possibil ity of private residential development here along lines which transformed Upper Bast Side river view sites into some of the finest apartment residen tial areas in the City. The Authority "skimmed off the cream," and it is therefore improbable that private enterprise, in the foreseeable future, would construct higher ^ 0007-HUO-000003471 0007-HUD-000003471 0007-HU D-000003471 74 rental housing, to any large extent, on these interior sites on the Lower East Side, since they could not command the rentals which river view projects would bring. Even if there ever should be some private apartment developments here, the City would receive far less tax revenue than might have been obtained had the procedure been reversed, with tax exempt public housing on the interior sites leaving the river view sites for development ty private enterprise, which would result in higher rents and the payment of full taxes. Segregation Of Public Tenants By Income Groups It is a mistake to construct hugh concentrations of public housing, such as on the Lower East Side, which dominate the area, segregating it at one income level. Public bousing should blend into, rather than brand, a neighborhood. There is also the question of transportation, adequacy of modern community facilities such as schools, and the proximity of places of employment for the inhabitants of the housing projects. In the case of the Authority's concentration of projects on the Lower East Side it appears that Insufficient consideration has been given to these matters. I 1 i Other Uses For Slum Areas Consideration should be given to the development of light manufactur ing establishments, where permitted, and other types of business enterprises on slum-cleared locations so that there will be more employment opportun ities within dose proximity of existing and proposed public housing proj ects. Mary slum sites will make desirable business and industrial loca tions. It is a mistake to replace slum areas with new housing exclusively, 0007"HO0*000003472 0007-HUD-000003472 0007-HUD-000003472 remote from places of employment. It isolates economic groups and prevents the establishment of veil balanced and properly integrated neighborhoods. 75 Effects Of Overcrowding The Land The Authority has carried on a policy of overcrowding the land with high-density projects. It is, in effect, multiplying the very evil which it originally sought to cure. Notwithstanding the fact that New York City, and particularly Manhattan, is. suffering from almost unbearable congestion, the Authority has maintained, and even increased, the population densities of the vexy slums which it demolished to make way for its new projects. Ignoring the fundamental precept propounded by Lahgdon V. Post, the Authority* s first Chairman, relating to the inherent danger in overcrowd ing the land, it has constructed high-density housing which confirms slum standards of congestion and has even pursued this policy In the lesB crowded areas of the City on some of its projects* Thus, congestion has been increased in areas where it has already existed, and created in areas where it never was before. Nevertheless, the Authority has a tendency to emphasize the vexy low percentage of land actually covered by its buildings, in relation to the total site. This is vexy misleading, because the Important factor is the population density, the total nusfcer of people occupying each acre of land. The majority of the Authority's projects have a density of popula tion in excess of 250 persons to an acre of land, as shown in the Appendix. This is an inexcusable and utmecessaxy overcrowding of the land. 0007-Hop-000003473 0007-HUD-0g0' 0003473 0007-HUD-000003473 Super-Slums Of Future Being Created 76 Since ntangr of the evils of the slums are attributed to congestion of population, the Authority may find that it has created the super-slums of the future. Overconcentration of people in high-density permanent public housing projects is an irreparable mistake even though the occupants start out with clean, light, and well-equipped apartments. For although their living conditions may be decidedly improved as a result of the change from slum housing, nevertheless the former pattern of insufficient recreational areas, overcrowded schools, and generally congested condi tions still prevails. Penalty Peter-mined Bv Lend Cost The Authority* s policy of paying extremely high prices for land has invariably led to overcrowding the site. It is fallacious that the cost of the land should determine the density of population. Vith an abundance of inexpensive land available in the outlying areas of the City, from the time that the Authority was first established, up to the present time, there was no justification for the policy of purchasing high priced land in the City's core, then overcrowding it in order to attenpt to rationalize the excessive prices paid. t \ > i. j (i Sir Raymond Uatwin, a world-renowned authority on housing, maintained that housing people at a low-density rate brought human benefits and economic gainB whereas high-density housing was Injurious to tenants in that it deprived them of space for pleasant living and recreation. There fore, since there is no scarcity of land, all new housing should be of 0007-HUD-000003474 0007-HUD-000003474 0007-H U D-000003474 low-density, he contended. 77 In 1941 he estimated that it would require over 40 years, until the 1980*8, to absorb the 61 square miles of the then privately owned vacant land in Mew York City, at current rates of population increase, if the land were developed to house only 12 families to the acre. He also es timated that at 50 families to the acre, it would require over 170 years, or in the 2100*6, to use up all that vacant land. Population Dispersal Necessary In Atomic Age Dispersal of population over as wide an area as possible, rather than concentration of it, is a safer and saner policy in this Atomic Age in which we are now living. Conceivably, one of the most effective uses of atomic or hydrogen bombs by an eneoy against our nation would be to destroy, without warning, congested cities like New York, on the premise that such a blow against undefended civilian targets, rather than against protected military targets, would cripple our country's will and spirit to wage war. Measures must be taken to reduce New York City's vulnerability to such attack.' Thus a policy of low-density of population would not only insure added protection bub would also result In a better living environment for all of the City's inhabitants. Authority* s Independence Should Be Restored The N. Y. City Housing Authority should free itself of political % pressures) eotangleoente and control* Steps should be taken^ without further delay, to restore the independence and freedom of action vhich the Authority enjoyed vhen it vas first created* It should not be subject to 0007-HOD-000003475 0007-HUD-000003475 0007-H U D-000003475 78 the -will, of the Mayor or other City officials. Control should be kept as far away from City Hall as possible. Unless the Authority's powers are safeguarded, political usurpation can render it helpless. In the beginning; the Mayor had the right to appoint all members of the Authority. However, the term of office of each menfoer was so stag gered that, after the initial appointment was made, the membership could not be immediately overturned nor completely revised in any one admin istration. Furthermore, after the original appointment, succeeding Chairmen were selected by the Authority from among its menhers. Thus, the Mayor held little power over the Authority. The City's legislative body established it, appropriated expenses for its operation, provided for its exemption from taxation, and could also apply for its dissolution. The State itself was the Authority* s guardian, protecting its powers and operations, and preventing any abuses. Authority Controlled By Mayor However, in 1937, in the third year of the Authority* s operation. Mayor La Guardia usurped its powers and did not relinquish control during his entire administration. He forced Langdon V. Post, the Authority's first Chairman, to resign. Notwithstanding the fact that, by law, the mei&ers of the Authority were authorized to elect their own Chairman, Mayor La Guardia ordered the election of his own secretary as Chairman under the threat of dismissing the Authority's entire membership. Gaining virtual control of the Authority, La Guardia dominated its policies, directed its operations, and dictated its moves. The State, which took the attitude that the entire proceedings were a strictly local problem, did not institute any action or interfere in ary way. 0007-HUD-000003476 !! j ! i| * < 0007-HUD-000003476 0007-H U D-000003476 Collapse Of Authority* s Autonomy 79 In this manner the Authority's autonooy -was destroyed and its powers seized by the head of the City government. This was in direct contradic tion with the spirit and intent of the State law which had created munic ipal housing authorities* Worst of all, it left the door wide open for a repetition of this action in the future. Such action was not long in forthcoming. Histoxv Repeats! Authority's Powers Again Seized Edmond Borgia Butler, who had served as Chairman, without compensa tion, from 1942 through World War II, had built iqo a very favorable rep utation for the N. X. City Housing Authority. His proposed program for a limited amount of slum clearance and the building of decent homes for lowincome families in the post-war period has already been set forth in this thesis. However, Mr. Butler was not in the good graces of influential public officials. Obviously his program was likewise not acceptable to those in City Hall, who wanted to provide subsidized housing for just about eveiyone in the City. A special Act, applicable to New Xork City only, was introduced and passed by the State Legislature in 1947 which provided that the Chairman of the Authority might not hold office for any specific term and could be removed by the Mayor whenever, in his Judgment, he felt that the public interest required such removal. Upon the enactment of this Law, Mayor O'lhyer lost no time in causing the removal of Mr. Butler, thus clearing the way for the O'Dwyer sponsored "no--cash-subsidy" public housing program for middle-income families. 0007-HOD-000003C77 0007-HUD-000003477 0007-H U D-000003477 Continuing Dangers Of Political Usurpation 80 If the Authority* s Chairman, or any of its members, are continuously subject to control or removal by the Mayor or other City officials, and if top-policy decisions are made in the City Hall, then unwavering adher ence by the Authority to the true objectives of low-cost public housing and slum clearance becomes impossible. The- inherent dangers of political exploitation are ever present in Newlork City's public housing program. For example, since tenants are citizens, the voters in the projects constitute a significant ratio of the total vote. There is the danger of having projects filled with tenants who will "vote right." Likewise, tenants might feel obligated to an administration which, they felt, was Influential in securing apart ments for them. It is not too difficult to conceive of & vast any of subsidized voters subjected to the temptation, or threat, of trading their heritage of political freedom for a rent receipt at a reduced rate. Opportunities For Unscrupulous Exploitation Unscrupulous politicians might discern innumerable opportunities to exploit the public housing program. For example, a serious unemployment situation in N. 7. City's construction industry might be used as an excuse to initiate another vast "no-cash--subsidy" program, as a "make-work? measure. While temporarily creating jobs, such a program would cause a serious drain on privately owned apartment buildings. In an economic recession tenants of private buildings would migrate to as much public housing as could be supplied since they could actually improve their living accommodations at less rental outlay. Private owners 0007-HDD-000003478 0007-HUD-0 000 0347 8 0007-H U D-000003478 81 -would face the double blow of income loss while their taxes would increase further as a result of more tax exempt public housing. Difficulty Of Fat-Mug Momentum Of Program Nor would, unemployment or a recession be necessary to precipitate a further surge of public housing of the so-called "no-cash-subsidy" char acter. The O'Dwyer program took care of but a small segment of those vet erans' families who were eligible for this type of housing. The Authority considers veterans of both World War I as well as World War II in the "veteran" category. The Veterans Administration has pointed out that fully one-third of the population of this nation presently consists of veterans and their families, and that by 1955 this figure will reach 40 per cent. Since the Authority has built housing for only a fraction of the City's veteran population, and since a vast number of them would undoubt edly prefer the kind of accommodations offered by the Authority, there could arise a clamor for more of this housing. My contention is that once & program of building is started for a specific portion of the populance, it inevitably gains momentum in the direction of providing for all. Authority's Policy stifles Individual Enterprise When an individual becomes a tenant in one of tbe Authority's proj ects, he may find that he loses his incentive to better bib income through fear that he might be requested to vacate his apartment if his earnings increase too much. This is due to the Authority's policy on income limita tions in respect to its tenants. Actually, tenants should be encouraged 0007-HUD-000003479 fc; Ij v 0 007-HUD-00000347 9 0007-H U D-000003479 82 to seek advancement so that they could eventually move, to housing which was not subsidized ly the taxpayers. Also, the periodic check-up made by the Authority in respect to the income of its tenants, is a further encroachment upon individual liberties. e Private Real Estate Firms Should Manage Public Housing Management of all of the Authority's public bousing projects should he given to competent real estate firms in the City. This would lead to new concepts of management policy and would create a better landlordtenant relationship, as has been demonstrated in the field of private management. Moreover, Newfork City's real estate firms, having long experience in this field, are equipped to do a more efficient and econom ical job of management. Such items ad the furnishing of free gas and electricity to Authority project tenants, a practice which only encourages waste and carelessness, would be carefully checked into by private management firms. Likewise the whole question of restricting project maintenance jobs to Civil. Service employees only, a policy which has mazy drawbacks, could be explored. Criticisms And Comments On Design And Architecture The vast majority of the Authority's projects have been designed in such a monotonously regimental fashion that, from the exterior, most aryone can discern that they are public houses. They give the impression that they have been turned out of one mould, for one class of people. However, the apartment layouts, particularly in the more recent projects, are exceptionally good. Many of them are even superior to what can be 0007-HUD-000003480 0007-HUD-000003480 0007-HUD-000003480 found in some of the buildings oh Park Avenue in New fork. Little wonder that the demand is so great. Outside of their bleak appearance and the population densities which they have created, there is not very much to criticise from a planning and structural standpoint. From w own viewpoint, I believe that the simpler walk-up low density structures, of from two to four stories,would he more economical to construct and maintain and would create a happier living environment. I submit further that the tall elevator buildings are not as safe for families with growing children. Moreover, proper parental supervision cannot he exercised on youngsters at play from the window of a fifteenth floor apartment. Furthermore, the Authority should endeavor to effect a fuller use of existing facilities and public improvements, consistent with reasonable density standards. .\ i ! . IS Public Housing Now Rational Policy As has been shown. The Congress of the United States, representing both major political parties and the people of this nation, has expressed, as national polity, the propositions that the general welfare and security of our country requires elimination of inadequate housing and the realiza tion of a decent home and a suitable living environment for every American family* Thus we are committed to a program of public housing. It therefore does not seem sufficient that we simply deplore this situation, as mazy of us do, nor can we merely be "ag'ln it," just because we have an antip athy toward public housing. Ve must first ask ourselves if we can justifi ably take issue with the basic intent of the program. If we accept its iI: 0007*HUD-000003481 0007-HUD-000003481 0007-H U D-000003481 true Intent we can then question and criticize the wisdom and effective ness of the means enployed to achieve the program. Explore More Useful And Effective Methods For, if public housing is here to stay, and it appears that such is the case insofar as the foreseeable future is concerned, then would it not be desirable to explore the methods by which it might be made more useful and effective? Granted that this national policy has inherent powers to bring about benefits for our City, as well as the nation as a whole, efforts should be directed to harness these powers and guide them into channels where the most good can he accomplished, for the most deserving families, and at the least cost to the taxpayers. Charity Should Begin At Home A nation whose resources have been called upon, to the extent of billions and billions of dollars, to help peoples all over the world to improve themselves, cannot neglect its own citizens while deplorable condi tions exist right here in our own back yard. It is apparent that there are many deserving families in Hew York City who, because of their low income, cannot afford to pay rent sufficient to move out of their squalid quarters into a clean and decent home. Admit tedly, private industry has not been able to reach this segment of the population, at today's construction costs. Therefore, if these people are to be rehoused, the differential has to be made up by some form of charity or subsidy. 0007-HUD-000003482 0007-HUD-000003482 0007-H U D-000003482 The Sound Approach 85 Public spirited hankers and all civic-minded citizens are undoubt edly most anxious to eventually have every last slum eliminated from the City, -when it can be accomplished in a sound and practical manner. They want this done because it will not only stabilize properly values but also because it win, ultimately benefit all .of the people. The Danger Sign Of Socialism There are times when it is necessary for the government to intervene in the economic life of the nation for the good of all its citizens. However, this is a far cry from making such intervention a permanent establishment, or using the idea of "emergency" as a pretext for install ing & new type of socialism in housing, for example. Increased governmental ownership, control and absorption of property can lead us straight down the one-way highway to socialism. This we must avoid. vitrilanoe. The Price Of Liberty Therefore, I suggest that a complete re-examination be made of the Authority* s public housing policy and that there be effectuated a restora tion of the primary functions for which it was created. The true purpose of a public housing program, in ny opinion, should be to eliminate slums and to provide low-income families with very modest, but clean and decent, bousing where rentals, densities, building heights, and land and construction costs are the very lowest which it is possible to attain. Such projects to blend into neighborhoods rather than dominate them. 0007-HOD-000003483 0 0 0 7-HUD-000003483 0007-H U D-000003483 86 Moreover, "there should be a definite limitation as to the number of public housing units "which can be constructed in the City in any given year. This should be a predetermined figure and should be based upon what the municipal economy can reasonably afford, taking into consideration the tax revenues to be derived from the projects as against the cost of furnishing all essential municipal services and facilities, including schools. On the matter of taxation, a more realistic formula should be developed so that the Authority's projects will contribute to a more equitable share of the tax load, lest the economy of the City be wrecked. Also, the projects should he managed by private real estate organizations. This will result in more efficient and economical manage ment and will obviate the need for the large Central Office staff pres ently maintained by the Authority at vast expense to the taxpayers. The Authority* s independence and freedom of action should be returned to its original status, free of all political control. In conclusion, I wish to point out that public housers can be of immeasurable help if they will recognize that those who suggest construc tive improvements in the tools of public bousing, and the methods of employing those tools, are endeavoring to help and are not attempting to destroy the program. It is only by united purpose and action, and by a wholehearted coop eration on the part of all concerned, that the problem will ultimately be resolved. j;: "! t. ; I 0007*HUD-000003484 0007-HUD-000003484 0007-H U D-000003484 APPENDIX A BABTC HEMTS PER APARTMENT PER M3HTH m PEHMMtmT PUBLIC HOUSING PROJECTS* (Rent ranges shown are lowest and highest basic rents for apartments in specified projects) Fully Subsidized Pre-War Projects Fully Subsidized Post-War Projects Projects With No-Cash-Subsi^y No. of Federally- City- State- Rooms Aided Aided Aided 1 or l #14.75 2 or 2| 21.5022.00 3 or 3% 23.7525.00 4 or 4 25.7527.00 5 or 5| 26.5028.50 6 Roans 27.75 25.65 29.10 26.50 31.30 27.35 32.35 27.6028.45 28.90 7 Rooms 29.75 Federally- City- State- Aided Aided Aided City- City- Aided Aided Part II Part III #15.50 #25.00- #32.00- 27.00 37.00 22.70 23.50- 29.0032.00 32.00 32.00- 40.0037.00 50.00 24.50 29.0034.00 50.00- 55.0063.00 67.00 26.95 26.50- 33.0037.50 41.00 61.00- 67.0074.00 85.50 28.00 28.00- 35.5041.50 44.00 71.00- 82.0079.00 89.00 29.55 29.00- 39.5042.00 44.50 8 Roans 30.65 * Does not include "First Houses," the only project in which rents do not include gas and electricity. The fallowing are the basic monthly rents at "First Houses* (excluding utilities)t 2 roans------------ #13.05 3 rooms----------------15.00 4 rooms---------- 21*95 87 0007-HUD-000003485 0 0 0 7-HUD-0 0 0 0 0 3 4 8 5 0007-H U D-000003485 APPENDIX B MAKTMTTM INCOME LIMITS FOR ADMISSION TO PERMANENT POBLIO HOUSING PROJECTS FuUy-Subsidized Pre-War Projects No. of Rooms 1 or l FederallyAided CltV-Alded StateAided Veterans $1000 StateAided Non-Veterans $1000 2 or 2| 2000 1370 2100 1700 3 or 3| 2400 4 or 4i 2400 5 or 5 2880 15111764 16781890 1962 2100 2100 2100 1750 1800 1870 6 Rooms 2880 2100 1900 7 Rooms 2100 1950 8 Rooms 2100 2000 * Where maximum limits for admission to the -various projects in a specified program differ, the range of rood man limits has been shown. 88 il 0007-HOD-000003486 im 0 007-HUD-0 00 003486 0007- H U D-000003486 APPENDIX C 0007-HUD-000003487 0007-H U D-000003487 Federal Permanent Operating P rojects 3.66 n Sl i J1O3 to a 58 H 8 H 3 m H o> c- 8 in 3 8 cn ?i H ? 8 s -p -8 lc in H 8 tcon m in 8 vO a CM 8 vO CM cn Ol mo <4 cn tco" rH i 1oCTM>N *<UD 01 C*- o> s aa 9 , mH I d ! 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Cl*' 3 3to > nO CO * & cn cn co * 3si SEoTvZ 3co So 8 cn O' H m cn vO vO a 3 m cn 0> 'S CM S1=> O m fr* Hm 3St 3 3 oil o! $38 CM CinM m 8 to CM m CO 40 frco CM m vO Ua> -cPa CM 3d go tD O *3 u> *cHL 3* O oa t *H Ctd a. CQ 8 H i.8jJ5 o o M Js V* 0 <y 04 Cmo P 0) 1 a a ax tj ta CQ 2 d 8 Oo 2 oo oo Po rt 8 H O Ucoot O <M oO (D ~op t e- n 103 0007-HUD-000003501 0007-HUD-000003501 0007-H U D-000003501 BIBLIOGRAPHY This Bibliography has been divided into two parts as follows: Part 1: Confined to books and publications read by the Author, bearing directly upon the subject matter contained in the thesis, and representing some of the sources from which the Author derived his information. Part 2: Selected additional books and publications generally related to the subject. E&aUL.. Books and Monographs Abrams, Charles. The Future Of Housing. Harper & Brothers. New York, N. I. 1946. ~ Bauer, Catherine. Modern Housing. Houghton, Mifflin Co. New York, N. Y. 1934- Citizens Housing Council of Hew York. Ailing City Areas. New York, N. Y. May, 1941. Colean, Miles L. American Housing. The Twentieth Century Fund. New York, N. Y. 1944. Fortune, Editors of. Housing America. Harcourt, Brace & Co., Inc. New York, N. Y. 1932. Gray, George Herbert. Housing and Citizenship. Reinhold Publishing Co. New York, K. Y. 1946. Nelson, Valter H. An Analysis Of The Operation Of Thirty-Five Permanent Housing Projects Controlled By The H. Y. City Housing Authority For The Eleven Year Period From January 1940 To December 1950. "American Bankers Association. New York, N. X. 1951 Post, Langdon, V. The Challenge of Housing. Farrar & Elnebarb, Inc. New York, K. Y. 1938. Rosenmann, Dorothy. A Million Homes A Year. Harcourt Brace & Co., Inc. New York, N. Y. 1945. Strauss, Michael V. and Vegg, Talbot. Housing Comes of Age. Oxford University Press. New York, S. Y. 1938. Straus, Nathan N. Y. 1952. TurwTh-i rds of A Nation 104 Alfred A. Knopf. New York, 0007-HOD-000003502 0 0 07-HUD-0 00003502 0007-H U D-000003502 alker, Mabel L. Urban Blight and Slums. amibridge, Mass. 1938. 105 Harvard University Press, food, Edith Elmer. Recent Trends In American Housing. The Macmillan :o. New York, K. I. 1931. fright, Heniy. Rehousing Urban America. Columbia University Press, few York, Li. X. 1935* Reports and Pamphlets levine, C. J. & Co., Inc. Local Housing Authority Bonds and Notes, lew York, N. I. 1949. ~~ : Dun & Bradstreet, Inc. N. Y. City Housing Authority (Municipal Credit Survey) . New York, If. Y. 1948. National Association of Housing Officials. Public Housing. Yesterday, foday. Tomorrow. New York, K. Y. 1943* SevYork City Housing Authority. Annual Reports (1940 to 1950 inclusive), s __. Housing. January 19A6 to July 1949. Report to Mayor [filliam O'Dwyer. 1949- . Project Statistics. April 1, 1951. . Clason Point Gardens. 1942. . First Houses. 1935- . Must We Have Slums? 1937. _. The Failure Of Housing Regulations. 1936. . Toward The End To Be Achieved. 1937. The Twentieth Century Fund. Housing For Defense. New York, N. Y. 1940. Government Documents and Reports (Other Than "those included under Reports and Pamphlets) Committee On Banking and Currency Report To Accompany S. 1070. Housing Act of 1949. Washington, D. C. 1949* Hearings on S. 1592. Vagner-Ellender-Taft Bill. Joint Committee on Housing, 80th Congress. Slum Clearance. Washington, D. C. 1948. 0007-HUD-000003503 0007-HUD-000003503 0007-HUD-000003503 106 United States Housing Authority (and its successor agencies: Federal Public Hoxtsing Authority, National Housing Agency, Public Housing Authority and Housing and Home Finance Agency) . Annual Reports. 1938-1950. PART 2. Books and Monographs Abrams, Charles. Revolution In Land. Harper and Brothers. New York, N. Y. 1939. Armstrong, Robert K. and Hoyt, Homer. Decentralization in New York City. Urban Land Institute. Chicago, 111. 1941. Colean, Miles L. The Impact of Government on Real Estate Finance in the United States. National Bureau of Economic Research. New York, H. Y. 1950. Ebenstein, William. The Lav of Public Housing. University of Wisconsin Press. Madison, Wis. 1940. Fisher, Ernest M. Advanced Principles of Real Estate Practice. The Macmillan Co. New York, N. Y. 1930. Ford, James. Slums and Housing. Harvard University Press. Cambridge, Mass. 1936. Mumford, Lewis. The Culture of Cities. Harcourt, Brace & Co., Inc. New York, N. Y. 1938. President* s Conference on Home Building and Home Ownership. Gries, John M. and Ford, James (editors) Volume ITT T siimiR. Large-Scale Housing and Decentralization. Washington, D. C. 1932. Swan, H. S. The Housing Market in New York City. Reinhold Publishing Co. New York, N. Y. 1944. Reports and Pamphlets Carscadon, T. R. Houses For Tomorrow. Public Affairs Committee, Inc. New York, N. Y. 1944. Citizen* s Housing Council of New York. Densities in New York City. 1944. Greer, Gvy and Hansen, Alvin H. Urban Redevelopment and Housing. National Planning Association. Planning Pamphlet No. 10. 1941. Unwin, Sir Raymond. Nothing Gained By Overcrowding. The Garden City and Town Planning Association. Pamphlet No. 13* London, England. 1932. 0007-HUD-000003504 0007-H U D-000003504 0 0 0 7 -HUD-000003504 107 U. S. House of Representatives. Hearings On Post War Planning, IQ Bates, K. C., Vice President, American Federation of Labor; Blandford, J. B. Jr., Administrator, National Housing Agency; Moses, Robert, Triborough Bridge Authority (included in testimony of Mayor Fiorello H. L&Guardia) ; Olsen, Herbert A., President, American Municipal Association Periodicals - Magazine Articles Bacon, Edmund N. nA Diagnosis and Suggested Treatment of an Urban Conmunity's Land Problems," The Journal of Land & Public Utility Economics. Vol. XVII, No. 1, Februaiy 1940. Fisher, Ernest M. "Speculation in Urban Lands," American Economic Review. Volume 23, No. 1, March 1933* Supplement. Foley, E. H., Jr., "Low Rent Housing and State Financing," University of Pennsylvania Law Review. Vol. 85, No. 3, January 1937. Knight, C. L., "Blighted Areas and Their Effects Upon Urban Land Utilization," The Annals of The American Academy of Political and Social Science. Vol. 148, Pt. 1, March 1930. Maverick, Lewis A. "Cycles in Real Estate Activity," The Journal of Land & Public Utility Economics. Vol. XXVII, No. 2, May 1932 and Vol. mm. No. 1, Februaiy 1933- Meyer, Albert. "A Technique for Planning Complete Communities," Architectural Forum, January and February, 1937* Stevenson, Charles. "Housing, A National Disgrace," The Atlantic Monthly. December 1938, January 1939- Terborgh, George. "The Present Situation of Inadequate Housing," The American Economic Review, Vol. 27, No. 1, March 1937 Supplement. Unwin, Sir Raymond. "Land Values in Relation to Planning and Housing in the United States," The Journal of Land & Public Utility Economics, Vol. XII, No. 1, Februaiy 1941. Wood, Edith Elmer, "A Century of the Housing Problem," Law & Contemporary Problems. Vol. 1, No. 2, March 1934* Woodbury, Coleman, "Some Suggested Changes in the Control of Urban Lend Development," The Journal of Land & Public Utility Economics. Vol. V, No. 3, August 1929. " . * 0007-HOD-000003505 j 0007-HUD-000003505 0007-H U D-000003505 HUO LIBRARY DUE DATE / UG I 9 303 Printed in USA I 0007-HOD-000003506 0007-HUD-000003506 0007-HUD-000003506