Changes made in section 8 could help pick up many of these because many of these homes are in areas that people don't want to buy in, but they certainly can make very good housing for people who can't afford to buy them. We frankly would prefer many singlefamily homes to putting people in projects. It works. We have got several hundred that we operate right now. Essentially, those are the points I wanted to make, Senator. Senator CRANSTON. Thank you very, very much. It's very helpful to have you with us, I appreciate your testimony. [Complete statement follows:] STATEMENT OF MICHAEL H. SALZMAN, EXECUTIVE DIRECTOR OF THE The purpose of S. 1988 is laudatory in that it proposes a demonstration to test new ways to acquire and dispose of abandoned property and to develop new financial resources for communities affected by the disaster of large-scale abandonment. I support the purpose wholeheartedly. For a federal demonstration to make the mark of "success" it must have established a system or process that becomes "reproducible" by either local units of government or by private enterprise. Otherwise what might have been a success is only successful in a very limited way, helping few people, and helping even fewer communities. But, what is probably even of greater importance, valuable time may be eaten up waiting for the demontration to prove itself. Obviously then, other existing programs must be continued and future cries of "let's wait for the demonstration to run its course before we consider other possible programs" will hopefully fall on deaf ears. Large-scale abandonment and repetitive abandonments are symptomatic. They aren't only indicative of a downturn in the economy but realiably indicate those areas of a metropolis where historically much higher rates of unemployment and underemployment have existed and still exist. Ways must be found to create employment opportunities for the people in those areas, thereby tackling the root cause of large-scale and repetitive abandonments as well as finding bonafide solutions to the many other problems faced in metropolitan areas: reduction of vandalism, reduction of crime, elimination of human degradation, and improving the financial condition of cities. The rapid and wholesale elimination of unemployment and underemployment is the one single step this country can take that would be most meaningful in uplifting this nation, in preserving the moral fiber of our people, and in revitalizing the morale our forefathers were noted for. This country, historically known as the land of opportunity, must gird itself with the will to make our land one of opportunity for all its inhabitants. There are some malingerers but the fact remains that the enormous and vast majority of American people are imbued with the spirit of work and the knowledge of how work can improve their lives-and this applies equally as well to those who have been unemployed for long periods of time, even to members of second- or third-generation families on welfare. But they want work, meaningful work, not governmental make-work programs that seem to get turned on and off-obviously, they even rush to make these if there is nothing else. They want permanent jobs in private industry, jobs that produce goods and services and such jobs will exert deflationary pressures to help combat infiation that robs our people of their savings, their ability to live decently, and to improve the circumstances of their lives. Federal policies and programs, spanning several decades, have contributed to the flight of industry from the cities and to the flight of those who were and are more affluent, leaving cities relatively destitute and with large segments of their population unable to find jobs. In the land of opportunity, America's cities have historically offered the greatest opportunity for education, for jobs, for advancement and for improvement. I would agree with the President when he speaks of the necessity of tax investment credits and increased stock dividend exemptions from taxation as a means of increasing the flow of money into the creation of new plant facilities and hence the creation of more jobs; but only if there are greater incentives to assure that new plant facilities are created within the cities and that the jobs thereby created go to the indigenous population residing in the plant's vicinity through specific on-the-job training. There are several very successful illustrations of the foregoing, one only a short distance from the site of this hearing. SPECIFIC RECOMMENDATIONS FOR S. 1988 P.13(e) The addition of: "However, where a community redevelopment agency exists, said acquisition shall be achieved by contract with the community redevelopment agency following the established procedures of the affected community." p.13 (f)-Change as follows: breaking (f) into two sections: (f) with respect to any real or residential properties the Corporation has acquired pursuant to this section, the Corporation may, by contract or otherwise (1) Insert existing (2); (2) Insert existing (5); (3) Insert existing (7); (4) Insert existing (8) with the following changes so that lines 13, 14, and 15 of page 14 read as follows: "change in its use, the Corporation, or in the event there is a prospective purchaser, the prospective purchaser shall make application for such change in use in accordance with the established procedures of the affected units of government. Any instrument ex-" (f) With respect to any real or residential properties the Corporation has acquired pursuant to this section, the Corporation shall, in the event any of the following are deemed desirable, contract with the affected community to: (1) Insert existing (1); (2) Insert existing (3); (3) Insert existing (4); (4) Insert existing (6). P.14(g)-Change to read as follows: (g) Except where the property is being disposed of in conjunction with and urban homesteading program being carried out by the affected community, tne Corporation shall determine that the homes it sells are in decent, safe, and sanitary condition at the time of sale. In the event of a sales which does not meet this requirement, the Corporation shall, at its option, make expenditures to correct, or to compensate the purchaser of any dwelling for occupancy by fewer than five families to place such homes in decent, safe, and sanitary condition; if (1) the dwelling was sold by the Corporation, (2) the purchaser notifies the Corporation not later than one year after the sale, and (3) the defect is one that existed on the date of the sale. P.16(i)-Change to read as follows on lines 17 and 18: "(i) The Corporation shall provide directly or by contract with the affected community counseling on household management, property man-" Comment on p.18(5): A desirable but probably an impossible objective to achieve in many areas affected by the diaster of large-scale abandonment. Senator CRANSTON. Mr. Korpsak, you may go ahead. STATEMENT OF JOSEPH KORPSAK, EXECUTIVE DIRECTOR, VALLEY ASSOCIATION OF CITIES Mr. KORPSAK. Thank you. My name is Joseph Korpsak. I'm executive director for the Valley Association of Cities. I am supportive of your legislation. I wish to thank members of your panel hereCongressman Hannaford, Jerry Buckley, and Carolyn Jordan—for this opportunity to speak regarding S. 1988. I wish to thank you, Senator Cranston and members of the Senate Subcommittee on Housing, for giving me this opportunity to testify regarding S. 1988. The purpose of this act, as I understand it, is to establish a neighborhood protection corporation to make possession of abandoned residential properties in order to prevent the continued deterioration and destruction of neighborhoods and communities and to hold and assemble parcels of land for the orderly development and redevelopment of neighborhoods and communities consistent with local government codes and ordinances. Review of this legislation is consistent with VAC's policy statement which proclaims it will support legislation related to its functions, goals, and objectives of its organizations. VAC is a California consortium of 10 cities-Chino, Claremont, La Verne, Montclair, Ontario, Pomona, San Dimas, Upland, Walnut, and West Covina-situated partly in a two-county area-Los Angeles and San Bernardino-as a joint-powers entity, and it was formed specifically to overcome its then areawide problems of boarded-up, vacant, and abandoned housing as identified in August of 1974. A year ago, we developed the goal of reducing the HUD inventory of Secretary-owned single-family units from 800 to 200 by December 30, 1975. As of this date, we have exceeded that goal by our combination, reduction, and prevention program funded by HUD's "701" funds and Department of Labor's "CETA" manpower funds. Also during this same period, we have facilitated the reduction of the VA abandonment_inventory from 200 to 40. However, I must indicate that in Pomona we still have 799 boarded-up vacant units belonging to VA-or formerly HUD—and a substantial number of them belong to private lenders. Part of the problem on the VA and HUD resales is that the occupancy doesn't occur immediately, and there are some problems we have identified with VA and HUD performing on a very rapid basis appraisals necessary so that these homes may be subsequently insured and guaranteed and occupied by families that wish to purchase them. Our success story, which relates to this reduction from 800 to 200 and from 200 to 40, respectively for HUD and VA, is contained in our award-winning "Mayors' Abandoned Housing Report" [Received award certificate from American Institute of Planners in 1974 for being an outstanding example of intermunicipal cooperation to deal creatively with the problems of abandoned housing], and we have recently completed a report entitled "Causes, Consequences, and Solutions to Abandoned Housing Report" of which complementary copies are here intended for your study. Specifically, in reviewing S. 1988, I wish to make the following observations: One: The definitions for single-family and multifamily abandoned housing are consistent with our observed experience and what is reported in the current literature on abandonment. Two: An alternative to the current array of solutions to abandoned housing is needed because HUD's and VA's property disposition resales programs may be committing and recycling the same errors in spite of the abandonment reductions which they have been accomplishing in the past 6 to 9 months, particularly in the Los Angeles area, and they have made significant reductions in their inventory, particularly in our area. Three: The proposed corporation's redevelopment activities are contingent upon approval of the local governing body which is commendable consideration. Four: Under this proposed legislation, the corporation should also include urban homesteading with a homeowners' counseling program as part of its disposition program, which is an excellent idea. Five: That corporation-acquired properties requiring demolition should be converted, when appropriate, to park facilities. I don't think this is indicated. Six: The proposed corporation should have its contracted homeowners' counseling program services provided only by local HUD certified counseling agencies. No additional bureaucracy or technical guidelines need to be developed; they already exist. Seven: That VAC agrees that housing abandonment is still the major housing problem in our urban and many suburban cities. Eight: The proposed three metropolitan housing areas for the corporation's demonstration program should be Los Angeles, Detroit, and Pomona. Nine: The time for abandonment to HUD resale is too long and requires an effective intermediary government-sponsored corporation to prevent the ravages of abandonment, and this is what we see your bill as. Ten: The expense of abandonment to all public agencies and its contribution to the shortage of adequate housing is significant. We talk about shortage of housing. If we had all the current vacant houses occupied, we would be able to reduce that shortage quickly. As is my practice, I have tried to keep my testimony brief and concise. I would be happy to answer any of your questions. Thank you. [Statement/position paper follows:] (By Joseph F. Korpsak, Executive Officer, Valley Association of Cities) VALLEY ASSOCIATION OF CITIES: THE MULTI-CITY ABANDONED HOUSING CONSORTIUM The following text was delivered before the "Issues in Federally Assisted Housing" panel during the Institute on Human Resources Development, sponsored by the California League of Cities in Oakland, California, on September 13, 1974. This exposition identifies the newest type of multi-city consortium which has been organized to overcome the problems of abandoned housing in the Southern California area known as the Valley Association of Cities (VAC). VAC consists of the cities of Chino, Claremont, La Verne, Montclair, Ontario, Pomona, San Dima, Upland, Walnut and West Covina, which are located in the two-county area of Los Angeles and San Bernardino Counties, and representing a resident population in excess of 360,000 persons. In October 1973 the Mayor of Pomona, Ray Lepire, called together the cities around Pomona to join him in a meeting of neighboring mayors to discuss the situation of abandoned housing in what was to become the Valley Association of Cities (VAC) area. The initial meetings led to the exploring and documentation of the abandoned housing problem in the VAC area. Subsequently a staff report was published entitled, "The Greater Pomona Valley Action Committee on Abandoned Housing". This study detailed the abandoned housing problem wherein it was determined approximately 1,000 houses were vacant, boarded-up and abandoned in the Valley Association of Cities area. Approximately 700 of those homes belonged to federal agency known as Housing and Urban Development/Federal Housing Administration (HUD/FHA). This compared unfavorably witn the 7,000 HUD/FHA houses that were vacant in the entire County of Los Angeles and compared nation-wide to the 250,000 HUD/FHA abandoned houses. Problems connected with abandoned housing showed that the neighborhoods suffered from general blight, lack of maintenance, vandalism, depression of property values, and conditions which were conducive to additional families abandoning their homes. The report made several recommendations, of which one was to establish a Valley Association of Cities (VAC) to tackle vigorously, actively, and politically the problem of abandoned housing in the VAC area. As a result of the report and its recommendations, the participating cities jointly formed together in a formal joint powers agreement for the purpose of reducing the number of abandoned houses in their individual cities. The funding of the organization, known as VAC, came from grants from the U. S. Department of Housing and Urban Development, Department of Labor, and the State of California. VAC is structured to accomplish the following goals: (1) to reduce the number of abandoned houses in the VAC area from the current level of approximately 1,000 to 200 by December 1976, and (2) to prevent further abandonment of single-family structures in the VAC area. In order to accomplish these goals, VAC is staffed to perform the following functions: (1) to stimulate initially HUD/FHA to make available for sale its vacant, boarded-up, abandoned houses, (2) to provide default and delinquency home ownership counseling in order to prevent additional abandonment, (3) to conduct a study to determine why people abandoned their homes, (4) to institute a program of early warning and identification of potential abandonment-like conditions, (5) to monitor the maintenance cotractors' responsibilities of HUD/FHA's agents responsible for these properties, namely the Area Management Brokers. These programs are currently being undertaken by VAC with a great deal of initial success. This is indicated by the fact that during the previous 12 months ending July 15, 1974, only 30 HUD/FHA houses were available for resale, while during the last 60 days (July 16, 1974-September 13, 1974) approximately 250 HUD homes have been put up for sale and approximately 100 houses have been sold. The VAC is governed by a Board of Directors which consists of City Council members from each of the participating cities. Meetings are held once a month to monitor the progress of VAC's objectives and to transmit information regarding the abandoned housing situation in the VAC area. Currently the VAC is staffed by eight full-time staff members organized around the five previously identified functions to eliminate and prevent abandoned housing. The relationship between the Valley Association of Cities and HUD is one of mutual exchange, communication, and a series of requests in order to have the effect of reducing and preventing abandoned housing in the VAC area. As a consequence of VAC's short time in operation it has been recognized by the American Institute of Planners in being awarded a state-wide California Chapter Award for dealing with the critical housing crisis and creation of a multicity organization to put into effect remedial programs related to abandoned housing and its prevention. It is anticipated that with success by VAC in dealing with the problem of abandoned housing, that it will branch into other problem areas, such as unemployment, economic development, and area-wide outdoor recreation programs. Additional information regarding this experiment in intergovernmental cooperation in order to tackle problems can be secured by contacting the Valley Association of Cities, located at 666 North Park Avenue, Pomona, California, 91768, or telephone (714) 623-4456. Senator CRANSTON. Thank you very much. STATEMENT OF HENRY B. DOTSON, SR., CONCERNED COMPTON CITIZEN Mr. DOTSON. I'm H. B. Dotson of Compton. I'm head of the Assistance Initiative Participation Coordination Commission of Compton, which was an outgrowth of the Crime Commission, and I'm very happy to have this opportunity to make this short statement to this committee and hope that it may have some impact. According to the 1970 Census, the percentage of homeowners in Compton is above 50 percent. With the median age at 20.5, it is obvious that Compton has a young population with an earning capacity that has good potential for homeownership. This, of course, will be predicated upon the economic situation. It can also be foreseen that the occupancy time-span for these young people can be forecast at 10 to 15 years. S. 1988, if passed, will provide the kind of incentive that will generate homeownership as well as good home |