Housing advisory and appeals board, Resolution No. 2850-. ADDITIONAL STATEMENTS AND DATA From the East Oakland Housing, November 6, 1974– Article from the McGraw-Hill News, Chicago, Ill. City of Oakland, letter from Cecil S. Riley, city manager, to the city council... Page 37 45 45 46 47 95 Bank of America News, "Unique Bank Programs To Aid Blighted Areas of Three Cities". 104 Preliminary report by Michael L. Grigoni, housing foreclosure and abandonment.. 114 HUD, Housing Management, H. R. Crawford_. 127 Veterans Administration, letter to Senator Cranston regarding abandonment_-_ 140 TABLES Critical path of defaulted home. 57 HUD aquisitions by FHA program__ 116 Cities with over 25 HUD-acquired properties as of March 12, 1975. Number of HUD owned properties, Los Angeles area office, by city, by program-- 118 118 Foreclosure process under deed of trust. 122 Calculations to determine greatest net dollar return for programming consideration____ ABANDONMENT DISASTER DEMONSTRATION RELIEF ACT OF 1975 THURSDAY, AUGUST 28, 1975 U.S. SENATE, COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS, Oakland, Calif. The subcommittee met at 10 a.m. at Melrose School, 1325 53d Ave., Oakland, Calif., Senator Alan Cranston, a member of the subcommittee, presiding. Present: Senator Cranston and Congressman Pete Stark. Also present: Carolyn Jordan, assistant counsel, Banking, Housing and Urban Affairs Committee, and Jerry Buckley, minority counsel, Housing Subcommittee, Banking, Housing and Urban Affairs Committee. Senator CRANSTON. The hearing will please come to order. Congressman Stark will join us shortly but in order to assure we have plenty of time, we are going to start now. I will make an opening statement and then we will have three panels that will appear before the committee. OPENING STATEMENT OF SENATOR CRANSTON Senator CRANSTON. Last year Senators Hart, Mondale, and I introduced S. 3115, the Housing Abandonment Disaster Demonstration Relief Act, a bill to test a new mechanism for acquiring and disposing of abandoned property and to develop new financial resources for localities afflicted by the disaster of large scale housing abandonment. Because of the urgency of this problem we have introduced this bill again this year as S. 1988. Housing abandonment is still a major menacing housing problem in our urban cities. Housing abandonment is a problem of poor people concentrated in overcrowded, unsafe, and unsanitary housing units, of streets scarred by vandalism and fire, of neighborhoods shunned by businesses and investors, of cities with dying central cores. Housing abandonment is creating housing, crime, health, and tax crises in many of the Nation's cities. The last national survey in 1971 completed by the Library of Congress on national levels of housing abandonment indicated the growing magnitude of this problem. Conservative estimates on the number of nongovernment-owned abandoned units for example, run around 100,000 in New York, 12,000 in Baltimore, 10,000 in St. Louis, and 5,738 in Oakland. (1) Recent up-to-date figures of HUD-VA owned foreclosed properties in selected cities indicate that this problem continues to haunt our cities. As of May 1975 HUD owned 69,695 single-family properties nationwide and the VA owned 11,345. The following table will illustrate the volume of units that could be turned over to the corporation by HUD and VA in selected cities: As of March 1975, the Los Angeles area insuring office of HUD had 3,874 foreclosed single-family homes in their inventory. Of this total, 100 were in Ventura County and the remainder, 3,774 units, were in Los Angeles County. The city of Los Angeles accounted for 1,395 of these units, 37 percent. Compton owned 759, 20 percent, units and Pomona had 462 units, 12 percent. Seventy-three other cities within the county accounted for the remaining 1,162 units. The heaviest concentration of units was in the south-central section of Los Angeles where 1,084 units accounted for 78 percent of that city's total in south-central. The VA has 1,105 repossessed properties in the Los Angeles area, 404 in Los Angeles citywide, and 8 in Watts. Exact figures fall short of describing the full magnitude of the housing abandonment problem in terms of the destruction of the quality of life it produces. The Department of Housing and Urban Development has implemented several programs to rid itself of its growing inventory of repossessed homes. These attempts include: the urban homesteading program announced May 1974, a 1-year experimental program with a projected goal of putting 700 homes in the hands of low-income citizens. This program has been fraught with difficulties because low-income homeowners have difficulties getting financing to repair these units; the "sale as is" program to encourage rapid purchase of HUD repossessions; "policy release option" program for local governments; neighborhood housing services program that make available loan funds for inner city areas that are deteriorating. In addition, a few cities have their own homesteading programs. Overall, very little has been done at the Federal or State level to adequately address the abandonment issue and none of the HUD programs have the necessary elements and flexibility to deal with developing unique solutions to the abandoned housing problem. There is no specific program to stop the housing abandonment wave from gaining momentum in city after city or to repair the destruction abandonment leaves in its wake. Many different reasons have been given for the abandonment problem but it is difficult to deny that the Federal Government is not at least partially responsible for the problem. Many persons who could not afford housing were allowed to buy units. Little or no counseling for families buying a house for the first time was provided. Kickbacks, schemes and speculation, by realtors, builders and HUD personnel have also contributed to this problem. Recognizing that the Federal Government had a hand in creating the abandonment disaster and also recognizing that the Federal Government has a strong interest in the quality of housing generally and specifically in protecting the housing for which it has insured or guaranteed mortgages. The Abandonment Demonstration Relief Act establishes a special government sponsored corporation to deal with the problem of abandoned housing units. The Agency to be called the Neighborhood Preservation Corporation would work in this manner: It would be empowered to seize and acquire title of abandoned housing units quickly to prevent deterioration of the unit and to stem the spread of abandonment in a neighborhood. The Corporation could renovate, rent, sell, construct, demolish units, repair, refinance, purchase property, condemn, and originate mortgages at interest rates below the going market rate. The Corporation could hold land for redevelopment and construct new housing according to a city's housing plan. This proposal seeks to turn abandonment disaster into a "plus" by preventing deterioration of abandoned units by securing possession quickly and seeing whether a single purpose agency on abandonment can bring together with the Federal Government, local officials, lenders, renewal and housing agencies, and community organizations, and others necessary to develop a corporative effort for the improvement of urban life. [Copy of the bill being considered follows:] 94TH CONGRESS 1ST SESSION S. 1988 IN THE SENATE OF THE UNITED STATES JUNE 23 (legislative day, JUNE 6), 1975 Mr. CRANSTON (for himself, Mr. PHILIP A. HART, and Mr. MONDALE) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing and Urban Affairs A BILL To provide, on a demonstration basis, emergency relief for the general welfare and security of the United States by preventing the loss of existing housing units through the phenomenon of housing abandonment, to protect the health and living standards in communities and neighborhoods threatened by abandonment, to protect the interests of the United States in connection with certain mortgage transactions, to assist local public bodies in the development and redevelopment of well-planned, integrated, residential neighborhoods and in the development and redevelopment of communities, and other purposes. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, II |