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Defaults in the City of Oakland—660 as of December 31, 1974.

Foreclosures Total January-December 1974; Acquired—292; Sold—428 (a number of properties sold in 1974 were acquired in 1973).

Inventory:
January-

423 February

423 March

419 April

412 May

387 June.

360 July-

334 August

324 September

329 October

327 November..

325 December

328 Estimated per unit acquisition cost

$15, 437 Estimated per unit repair cost-

5, 535 Other costs (cost to hold in inventory, commission on sale, escrow charges, etc.).

2, 595 Estimated resale price.

16, 844 Loss per unit.

6, 723

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Senator CRANSTON. Thank you very much.

We will hear next from Fred Cooper, chairman of the board of supervisors. Fred.

Mr. COOPER. Thank you, Senator.

STATEMENT OF FRED COOPER, CHAIRMAN, BOARD OF

SUPERVISORS, ALAMEDA COUNTY Mr. COOPER. For the record I am Fred Cooper, chairman, board of supervisors, and we happen to be in the heart of the third supervisorial district which I represent. I would like to enter a slight dissent from some of the things that have been said. I think what we saw this morning would perhaps serve as an example.

Obviously, redlining has occurred in Oakland from time to time, and probably still does, but the one-block area on Bromley Street we looked at this morning had five or six abandoned homes.

At the same time, there were under construction two apartment buildings financed by savings and loan and other lending institutions. So at the same time there were 5 or 6 vacant dwelling units on that block, 8 or 10 new dwelling units in the form of apartments were being constructed, so I think it is hard to say that the lending institutions have redlined that area in terms of being unwilling to make loans.

I think what you saw there reflects the fact that there is a market for rental housing, low-cost rental housing in the area, and no market for single-family homes.

I think that is a reflection of a number of things. It is a reflection more of the fact that essentially because of the problems of poor schools and problems with law enforcement in East Oakland, people who qualify for it, want to buy a home, will buy some place else other than East Oakland and that the basic problem is to develop community involvement.

A long-range program to improve the schools, improve law enforcement so that people who qualify for home loans will want to live there.

Obviously, part of the problem is abandoned housing and that turns off people who might otherwise want to live there but the basic thing, the basic problem, is that that block points out that there is a market for rental housing because a lot of people wouldn't qualify for a home loan. They had to rent, and if their income is low, they had to rent in an area where rentals are low and that market exists, and is obviously expanding and new rental units are being built.

So one of our problems is to develop means to qualify some of those people for home loans. If they are willing to live in East Oakland, and if they are willing to rent, some procedure of urban homesteading, relaxing the homeowner requirements needs to be done.

Similarly, consulting both before home purchase and counseling when people get into problems with their loans are vital because we have learned those kind of programs can help people who can qualify for homes who wouldn't otherwise qualify and also help them avoid foreclosure if they get into financial difficulty, and the city has been involved in that.

Let me say the county does not have direct jurisdiction in Oakland. We have a small redevelopment-type program, community development-type program in the unincorporated area but the Federal Government recognizes the fact that while we have over 100,000 population, we don't have serious problems in the unincorporated area because most of the housing in those areas are relatively new compared with Oakland.

Oakland gets $12 million in funds and we get $375,000.

Similarly in terms of a housing authority, we have a County Housing Authority; Oakland has it. And the housing authority covers the city, some county and incorporated area, and we have just gotten approval for 700 or 800 units under the section 8 program; and we are proceeding with that.

That, of course, wouldn't help Oakland, but it will help some of the poor people.

One of the things I have been most concerned with is getting savings and loans involved in an urban homesteading program involved in East Oakland in terms of relaxing or reducing their requirements for home loans and loans for other homesteading and get them involved in the counseling programs. And to get banks and savings and loans to commit their funds, it is important for them to know whether the Federal agencies that are involved in mortgage lending will back up or purchase those mortgages.

Yesterday, I met with representatives from the Los Angeles office of GNMA who said GNMA would participate.

I have been working with the mayor on this. Last week, I met with the president of GNMA in Washington. He said he couldn't commit yet, but he would look into it and probably would be able to send a representative to a meeting.

We previously had a commitment from the Federal Home Loan Mortgage Corporation, so as soon as we get a commitment from GNMA, I will work with the mayor in terms of setting up a meeting with the banks and savings and loans and mortgage bankers to meet with these Federal agencies and attempt to get commitments from the Federal agencies to back up or purchase the mortgages of the savings and banking institutions, maybe in East Oakland which will in turn enable them to make some commitment to get involved in these programs, to get more people qualified and able to buy homes in East Oakland.

Thank you.
Senator CRANSTON. Thank you very, very much, Fred.
Did you have a comment?

Mayor READING. Yes. I would like to reinforce Supervisor Cooper's statement, but we just received as of last week a recap of the number of new building permits that were issued in Oakland last year. We were staggered to find it was only 102 permits so you can see there really is obviously practically no new construction taking place throughout the whole city.

Senator CRANSTON. Councilman John Sutter. Delighted to have

you with us.

Councilman SUTTER. Thank you, Senator. It is a pleasure to be here. My name is John Sutter, and I sit here with two hats on as does

the mayor.

One is as a member of the city council and another is the council representative to the East Oakland Housing Task Force.

STATEMENT OF JOHN SUTTER, CITY COUNCILMAN, OAKLAND,

AND REPRESENTATIVE TO THE EAST OAKLAND HOUSING TASK FORCE

Mr. SUTTER. About a year ago the citizen group which you have referred to, I think, Senator, in our walking tour of the East Oakland Housing Committee, brought to the attention of the community the serious problem of housing abandonment in_Oakland. I suggested that the council sponsor an official body, the East Oakland Housing Task Force and that has been done.

I think that our studies indicate that this is really an emergency situation. The city council has passed a motion to that effect. As a matter of fact unless action is taken and taken rapidly, the situation deteriorates.

Anyone who lives on a street such as the one we toured today and sees around him abandoned houses becomes pretty demoralized. There is little incentive to maintain your own property when you see other properties around you deteriorating and deteriorating rapidly.

So there is an effect of more abandonment once you have one or two abandoned houses on the street. So we need whatever assistance may be available.

There is no one answer. I think the bill which we are discussing here today is one approach which will be useful and helpful.

I would hope that if this bill is passed, that Oakland is designated as one of the cities, and I would hope that the hearing here is some indication that that is what is in the back of our Senators' and Congressmen's mind.

It would be one approach that would be helpful for the reasons of which Mr. Chastain has mentioned.

I think there are a number of other things that can be done and which we need your help on. One of them requires appropriations. The others require some regulatory or administrative changes.

The one that requires appropriations is help with our public housing program.

One factor which is often overlooked in the abandoned housing problem is that it extends to public housing, not only in Oakland but in other communities. We have the phenomenon of some very new public housing, some of which was only built 5 or 6 years ago with abandoned units.

The reason the units are abandoned is that the Housing Authority does not have enough money to do the modernization or the repairs that are required in order to get those units rehabilitated and re-rented.

The Federal Government has decided to cut back on modernization grants and in general to try to reduce the cost of public housing in this country and we see one of the effects of that. One of the effects of that is that we have a substantial number of abandoned units and that's a very depressing situation for the other tenants who reside in public housing and for the people who reside in the neighborhood and that's a particularly serious problem for neighborhoods in Oakland because we have scattered-site public housing in East Oakland. We have triplexes, four-plexes, six-plexes in neighborhoods which are primarily single-family areas and those multiple buildings in those cases are public units, public housing buildings with abandoned units in them.

The other items which I think can be attacked by administrative regulation or direction, one of them-or three. One relates to urban homesteading; another to redlining; and the third to the whole process of the 16-month cycle which Mr. Chastain referred to when there are foreclosures.

With respect to urban homesteading, as you have been informed, an application has been filed by the city of Oakland. I know that you gentlemen have been helping us. We need your help, your continuing help and continuing support so that Oakland can be designated one of the cities for the urban homesteading program.

I think we have to face reality. The program which has been suggested by HUD is a $5 million program nationwide. That is a very small program. I understand they are going to select a few cities, perhaps 10 or so nationwide. For those few cities it could be a substantial help. I think that Oakland is in an excellent position to be one of those cities. We have the citizen organization which has been working on this problem, the East Oakland Housing Committee. We have the unanimous support of the mayor and the city council to try to resolve this problem. We have dedicated a substantial portion of our public funds to the East Oakland area.

So we have the local support. We have designated a substantial amount of our community development funds for this problem. So we feel we merit support and we hope that you can help us become one of those cities for the urban homesteading program.

Second, with respect to the redlining, I really don't agree with what Supervisor Cooper has just got through saying. Redlining is a serious problem. There is redlining in East Oakland and there has been for many years and the studies of the East Oakland Housing Committee show this very conclusively.

I don't know if they brought their map but they have a map where they checked all the recorded sales and loans over a period of several vears in East Oakland, and you see a lot of dots in hill areas, Piedmont, in the more affluent areas of Oakland. And you see very few dots representing loans made in East Oakland and when you examine those dots they are usually where there is some kind of 100 percent guarantee so the bankers and loaners can't lose a dime. It is a problem.

We are now living with a problem that has existed over many years. One of the reasons that some single-family dwellings are hard to sell is because they are not in good condition and they are not in good condition because one could not get a loan for the purpose of rehabilitation.

I would like to call to your attention an item which appeared in vesterday's newspaper on the approach that's been taken by the State of California. Our business and transportation director, Mr. Donald Burns, had promulgated a number of regulations which would outlaw or which would prohibit the practice of redlining by State-chartered

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