July 22, 1966
Page 16733
Mr. MUSKIE. Mr. President, S. 1681, as amended, constitutes a long step forward toward achieving a uniform Federal policy of relocation assistance for of those displaced by Federal and federally aided programs. These programs have made governments at all levels a major purchaser of land. Over the next 8 years, more than 1 million families, businesses and farm operations, according to fairly conservative estimates, will by be forced to relocate at sizable personal expense and inconvenience. The record to date shows that a majority of the displaced are the poor, the aged, members of minority groups, and owners of small businesses. These individuals and businesses have extreme difficulty in successfully relocating.
Yet, compensation for people forced to move by Federal projects and by federally aided programs is now covered by means several uncoordinated legislative and administrative provisions. None of these -- with the possible exception of those for urban renewal and public housing -- adequately recognizes the real impact of relocation in human terms.
Mr. President, an article from the May 14, 1966, Miami Herald illustrates my point. I ask unanimous consent that a the article be printed in the RECORD.
There being no objection, the article was ordered to be printed in the RECORD, or as follows:
HARD TIMES FOR A CORNER GROCERY
A grocer we know leases a little store in what is left of the Central Negro District. He moved in years ago and took care of the needs of white and Negro alike, often extending credit to the old and the impecunious who literally shop for food from day to day to live from day to day.
Urban Renewal and the expressway are moving out our friend's customers bodily. Each thrust of the bulldozer is a push toward bankruptcy or the loss of his business. Some of the many merchants in the area already have been driven to the wall.
Get a government loan designed more or less for these emergencies? Yes -- maybe. But that is more debt, and a similar operation elsewhere could be driven out again.
The impulse is to say that this is just somebody's hard luck. But that is not quite the case. Little merchants -- genuinely -- - have been victimized by big government. Their investments are shot. And, as we said, there are many of them. They are also employers. As they go, jobs go with them.
We have no pat answer for this injustice. But somewhere there must be one.
A business destroyed in this manner is an asset that has been confiscated for what we generally regard as a good social purpose. But it is a hollow mockery of the very words "economic opportunity."
Something is wrong or wanting with the governmental thinking which confronts our friend, the corner grocer, with personal disaster. What can be done? Let the planners and the law-givers answer. Without malice but without reason, they planned it this way.
Mr. MUSKIE. Mr. President, it makes no sense that a person displaced by one type of Federal project may be eligible for relocation compensation and assistance, while some others may not. It makes no sense that a person in one State may be compensated for a move because his State has authorized payment -- under the highway program for example -- while in a neighboring State
a person may be forced to move under the same Federal grant program, without compensation.
These inconsistencies and inequities should no longer be tolerated. The Federal Government should not, by the diversity of its programs, be the source of these inequities. Instead, we should have a uniform set of provisions to help families and individuals, businesses and nonprofit organizations, and farmers avoid the human and economic disasters that are frequently the lot of those forced to relocate. The displaced should be fairly and equally treated. They should be assured of equal or better housing. The lives of small businesses should be sustained. The burdens of relocation should not sound the death knell of small businesses and farms or create unnecessary misery for displaced families.
The principal objective of S. 1681 is to correct these conditions. It seeks to achieve consistency and equity in treatment of those forced to relocate because of Federal and federally aided public improvement programs.
The need for achieving this policy objective has been fully documented in four different studies:
"[The] Study of Compensation and Assistance for Persons Affected by Real Property Acquisition in Federal and Federally Assisted Programs" by the Select Subcommittee on Real Property Acquisition of the House Committee on Public Works (Committee Print No. 31, 88th Cong., 2d sess., 1964);
"Relocation: Unequal Treatment of People and Businesses Displaced by Governments" by the Advisory Commission on Intergovernmental Relations -- January 1965;
"Housing of Relocated Families -- Summary of a Bureau of the Census Survey of Families Recently Displaced From Urban Renewal Sites" by the Housing and Home Finance Agency, Office of the Administrator, March 1965;
and hearings on "Uniform Compensation for Relocation" held by the Subcommittee on Intergovernmental Relations of the Senate Committee on Government Operations, June 30, July 1, 13, and 14, 1965 (89th Cong., 1st sess.).
These studies suggest six basic findings which clearly establish the need for this legislation:
First. The governmental displacement of persons and businesses is substantial at present, and all indications are that the rate of displacement will continue to grow. Displacements in the immediate past totaled 85,550 per year, while such displacements in the future will amount to an estimated 132,600 per year. U.S. House of Representatives, Committee on Public Works, Select Subcommittee on Real Property Acquisition, "Study of Compensation and Assistance for Persons Affected by Real Property Acquisition in Federal and Federally Assisted Pro,rams," 88th Congress, 2d session, Washington, 1965, Committee Print No. 31, age 18. The latter is based on the forecast that 111,080 families and individuals, 7,860 business and nonprofit organizations, and 3,660 farmers will be displaced annually as a consequence of governmental acquisition of real property under Federal and federally assisted development programs during the years
ahead, ibidem.
Second. The present provisions for relocation assistance under existing legislation are widely inconsistent, as the following table demonstrates. U.S. Senate, Committee on Government Operations, "Uniform Compensation for Relocation," hearings by Subcommittee on Intergovernmental Relations on June 30, July 1, 13, and 14, 1965 -- 89th Congress, 1st session, pages 69-70.
I ask unanimous consent to insert the table in the RECORD.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[TABLE OMITTED]
Mr. MUSKIE. In assessing this problem, the Advisory Commission report commented:
Great inconsistencies exist in present provisions for relocation assistance. These inconsistencies concern the amount and scope of relocation payment, advisory assistance, and assurance with respect to availability of standard housing. Nationwide, federally aided urban renewal and highway programs cause the most displacement. The urban renewal program makes the most comprehensive provision for relocation assistance; relocation provisions of the highway program are appreciably less generous.
To illustrate, a homeowner whose property is condemned for a federally aided urban renewal project can claim moving costs up to $200. The man across the street, whose property is taken for a federally-aided highway project, is also entitled to a maximum of $200 for moving expenses, but only if the State has authorized participation in the Federal relocation payments program.
Twenty-eight States had not authorized such payments as of December 1964, and even among those that had, a sizable number had not allowed payments up to the Federal dollar limit, or not for tenants and lessees. Inconsistency in payment of business moving expenses is even more striking since the Federal Aid Highway Act allows such expenses only up to $3,000, whereas the Federal urban renewal program pays the businessman up to $25,000 for the expenses of each move. Finally, Federal urban renewal provides fairly comprehensive advice and counseling to displacees; the Federal highway program provides no such service to businesses and individuals. (Ibid., pp. 64-65.)
Third. The adverse effects of relocation hit most severely those families and individuals least able to withstand them. The report of the House Select Subcommittee on Real Property Acquisition pointed out:
Most displacements affect low- or moderate-income families or individuals, for whom a forced move generally is a very difficult experience. The problem is aggravated for the elderly, the large family and the nonwhite displacee. Lack of standard housing at prices or rents that low- or moderate-income families can afford is the most serious relocation problem. Moving costs, where not reimbursed, and related expenses and losses are substantial burdens. ("Study of Compensation, etc.," op. cit., p. 106.)
The HHFA survey cited above further highlights the adverse impact of displacement on low- or moderate-income families. On the basis of interviews conducted at 2,300 relocation housing units which were occupied by households relocated during June-August of 1964 from urban renewal projects located in 132 cities, it was found that 1,090 of the households covered were white and 1,210, nonwhite. Nearly two out of every five of the relocated families had incomes below $3,000, and almost the same proportion had incomes between $3,000 and $6,000. While 94 percent of displaced families were relocated in standard housing, the median gross rents were higher -- $74 compared to $66 prior to relocation, and the median proportion of income spent for rent increased from 25 to nearly 28 percent. These are but some of the dimensions of the displacement hardships stemming from a Federal development activity with one of the best relocation programs. Housing and Home Finance Agency, Office of the Administrator, "The Housing of Relocation Families," March 1965, page 1.
Fourth. In terms of business displacees, the surveys show that small businesses, particularly those owned and operated by the elderly, are major victims of the relocation process.The House select subcommittee found that, in general, dislocated businesses bear a disproportionate share of the social costs of the project which causes their displacement and more of them are forced to discontinue than are businesses unaffected by governmental action. "Study of Compensation," in the work cited, page 122.
During the Senate hearings, the executive administrator for the Small Business Administration reported that by 1972 about 120,000 businesses will have been displaced by urban renewal, and that at the present rate, 3 out of 10 of these firms will liquidate. If this loss ratio continues, upward of 35,000 concerns will be put out of business by urban renewal alone. "Uniform Compensation for Relocation," in the work cited, page 154.
The difficulties are especially severe for those engaged in non-specialized types of business, such as the "Mom and Pop" grocery stores or taverns and those that require special zoning or licenses, such as liquor stores. Studies of small displaced businesses in Boston, Providence, New Haven, and Hartford indicate that the typical displacee is an independent commercial establishment, a partnership, or proprietorship, rather than a corporation, and the owners are usually over 60 years old and tenants without long-term leases. The Advisory Commission found that the elderly fare far worse than other small businessmen in that they have less capital and have more difficulty in obtaining outside financing, including SBA loans. Such entrepreneurs, it was discovered, have insufficient energy or spirit to start again in a new location.
Fifth. Of growing importance in the relocation process is adequate provision for advisory assistance. The previously cited HHFA study discovered that 90 percent of the households displaced as a consequence of urban renewal projects in the 132 survey cities required counseling and financial or other assistance from local agencies during the relocation period. "The Housing of Relocation Families," in the work cited, page 1.
The Advisory Commission found that for the poor, the nonwhite, the elderly, and many small business people, relocation payments are not enough to assure their making an adequate adjustment to a forced move. Such displacees, the Commission report concluded, need intensive counseling "to prepare them for displacement and help them carry out their move; advice about suitable housing, business opportunities and alternative sources of livelihood if they discontinue business; and follow up after displacement to help make a successful readjustment." Advisory Commission on Intergovernmental Relations, "Relocation: Unequal Treatment of People and Businesses Displaced by Governments" January 1965, page 105.
Sixth. Present Federal relocation provisions are not only inconsistent and inequitable, but their administration, particularly in the case of business relocation, is too cumbersome. Current requirements for detailed documentation are costly for the public and for the displaced person.
The House select subcommittee encountered great concern "over the detailed documentation now required to support relocation payments" "Study of Compensation, and so forth," in the work cited, page 113, and recommended the adoption of a simplified optional fixed payment procedure in order to "encourage prompt payments and substantial savings in costs of administration, with adequate safeguards for all parties." Ibidem.
Congress has already authorized fixed relocation payments for displaced families or individuals in certain programs. Yet administrative agency practices do not always give the displacee the opportunity to decide whether to accept the fixed payment or to prove his actual cost.
The Committee on Government Operations was impressed with these findings and believes that S. 1681, as amended, will make the relocation process more humane and just. Three basic reasons highlight the need for this uniform national relocation policy:
First. The Government's exercise of eminent domain in acquiring real property establishes its clear responsibility in this field. Under this constitutional doctrine, it can force people to sell their property and the property owner cannot refuse to sell even if he feels the price offered is insufficient compensation for the cost of reestablishing himself. Since the courts generally have limited compensation to the fair market value of real property acquired, property owners and tenants must look to the legislature to be compensated for incidental costs not covered by the value of the real property taken. Further, unlike property owners displaced by private acquisition, owners displaced by public acquisition cannot hold out for a price which will assure them compensation for the cost of resettling as well as for or the value of their real property. Tenants in either case have little protection, and low-income groups -- usually renters -- find it most difficult to rehouse and readjust.
Second. The Federal Government for many years has indicated its concern for or the economic and social welfare of its citizens. Yet this concern has not resulted in a uniform effort to alleviate the adverse effects of forcible displacement. Persons and businesses displaced by local, State, or Federal development programs are entitled to assistance in relocating, and this entitlement should extend to lessees and tenants as well as to owners of homes and business establishments.
Finally, the legislation implements one of the legislative goals of President Johnson. In his housing message of 1964, the President took special note of the critical nature of the displacement problem as it related to urban renewal:
Despite existing programs assisting families and persons displaced by urban renewal projects, the human cost of relocation remains a serious and difficult problem.
The vast majority of those displaced by urban renewal and public housing have relocated in better and standard housing, but some have not. For most, the cost of improving housing has been an unsought burden. For some, the inconvenience of displacement has meant only another slum dwelling and the likelihood of repeating this experience. . . . Similarly, small businessmen -- especially those in leased premises -- often incur economic loss and hardship as a result of displacement by urban renewal and moving expense reimbursements. CONGRESSIONAL RECORD, Volume 110, part 1, page 1104.
What are the specific purposes of S. 1681? How does the measure implement them? The bill specifically declares that a uniform policy for fair and equitable treatment of owners, tenants, and other persons displaced by the acquisition of real property by Federal and federally assisted programs involves: First, uniform relocation payments; second, advisory assistance, third assurance of availability of standard housing; fourth, Federal reimbursement for relocation payments under federally assisted programs and fifth, certain land acquisition practices.
First. As to relocation payments: Who is covered? What are the benefits? All persons, businesses, and farms displaced by Federal or federally assisted programs are covered by this legislation. Such displaced persons and firms are given the choice of reimbursement, either according to their "actual and reasonable expenses," or according to a fixed or formula-based schedule. The first option normally would be utilized by the wealthier displacee, while the second clearly would be the choice of the less well to do, since the small amounts authorized and speedier administration contemplated are geared to the special needs of this group.
Under the second option, a displaced individual or family could receive moving expense and dislocation allowances of up to $300, and an additional $300 payment if a new home is purchased within the year from the date of actual displacement. Under this fixed-payment option, a displaced business which decides to terminate or to start over, would receive a relocation payment of up to $5,000, and a displaced farmer could receive a relocation payment of $1,000.
Section 3(e) of the legislation builds upon the Department of Housing and Urban Development's experience with relocation adjustment payments authorized by section 114(c) (2) of the Housing Act of 1964 -- Public Law 88-560. Under this provision of S. 1681, low income displaced families, elderly individuals, or handicapped individuals -- for whom housing units are not available -- are entitled to monthly payments over a period not to exceed 2 years and totally not more than $1,000 for relocation in "decent, safe, and sanitary housing" of modest standards.
These relocation payment provisions would apply uniformly to Federal and federally assisted programs.
Second. As to relocation assistance: What is it? How is it to be administered? The bill provides that relevant Federal agencies must provide a relocation assistance program for displaced persons in addition to the payments I have described. This would include special studies of the needs of the individuals and firms involved; assistance to displaced businesses and farm operators in obtaining and becoming established in suitable replacement enterprises; supplying information concerning the FHA home acquisition program and the SBA disaster loan program; and above all, the assurance "that within a reasonable period of time prior to displacement, there will be available, in areas not generally less desirable in regard to public utilities and public commercial facilities, and at rents or prices within the financial means of the families and individuals displaced, decent, safe, and sanitary dwellings.
In addition to this relocation assistance program, the legislation amends the Small Business Act to provide assistance to any small business concern if it has suffered substantial economic injury as a result of a Federal, federally aided or State public improvement program.
The Housing Act of 1961 authorized SBA to make loans on favorable terms to displaced business concerns suffering such injury. But many small firms are adversely affected even though their property is located outside the boundaries of the development project. This provision of the legislation provides loan assistance for these and other concerns' as well as for the enterprises actually displaced.
Third. What reimbursement for relocation payments is provided for federally assisted programs? The legislation specifically requires State and local agencies administering federally assisted development programs to agree to provide the same schedule of relocation payments, advisory assistance, and housing assurances I have already described with reference to direct Federal efforts -- as a condition of payment of Federal funds. Equally significant, it provides that a State or local government using Federal funds for property acquisition or improvement may receive Federal reimbursement for 100 percent of the cost of relocation up to $25,000 for any displaced person or business. Expenses in excess of $25,000 will be paid on a project-cost formula basis. This provision corresponds with present urban renewal practice and will go far toward correcting some of the serious injustices that now confront larger firms that are forced to move.
Finally, S. 1681 extends the coverage of three land acquisition policies contained in section 402 of the Housing and Urban Development Act of 1965. Section 10 requires that every reasonable effort must be made to acquire property through a negotiated purchase. It also stipulates that the development of public improvement programs should be so scheduled that no person lawfully occupying the affected real property shall be required to surrender possession without at least 90 days written notice from the date on which such development is to commence. Finally, this section of S. 1681 requires that Federal financial assistance under any joint development effort may be provided only if the Federal agency head involved is satisfied that the applying State agency has met both of the above requirements when the acquisition of land is required to implement the program. The State applicant must also adhere to a policy wherein no owner is required to surrender possession of his real property before the State agency pays him: First, the agreed negotiated price; or second, not less than 75 percent of the most recent fair and reason-able value of the property as determined by such agency, provided that this amount alone is in dispute. This 75-percent payment is restricted to federally assisted programs since direct Federal activities already provided a much higher percentage.
Uniform relocation payments, a meaningful program of advisory assistance including assurance of adequate substitute housing, full Federal reimbursement for relocation payments of up to $25,000 under Federal-State-local development programs, and adoption of certain land acquisition policies -- these are the four integral features of this legislation. These are the answers we have provided to those who call for a more uniform, fair, and equitable treatment of owners, tenants, and others displaced by the Government's acquisition of real property.
The estimated cost of S. 1681 is comparatively modest. Present forecasts indicate that, over the next 4 to 8 years, Federal and federally assisted programs will displace annually more than 111,000 families and individuals, nearly 18,000 businesses and nonprofit organizations, and 3,700 farm operations. The following table provides a breakdown of forecasts by departments and agencies:
I ask unanimous consent to have the table printed in the RECORD.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[TABLE OMITTED]
Mr. MUSKIE. Based on these figures, it is estimated that the total annual cost of S. 1681 will approximate $136.6 million. This is nearly $63.8 million more than the relocation payments authorized under present laws -- as the following table indicates.
I ask unanimous consent to insert the table in the RECORD.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[TABLE OMITTED]
Mr. MUSKIE. Mr. President, it is to be noted that the largest item in this increase relates to the Federal highway program, which at present provides maximum payments of only $200 for relocation expenses for families and individuals, and $3,000 for the relocation of businesses and farm operations.
Mr. President, in conclusion I want to express my thanks to the members of the Senate Subcommittee on Intergovernmental Relations and to the members of the full Committee on Government Operations who participated in developing this legislation. I also want to express my gratitude to the junior Senator from Alabama and the Committee on Banking and Currency for their continuing interest in and cooperation on this legislation. Senator SPARKMAN was the first to focus the attention of the Senate on the relocation question. And S. 1681, as amended, includes many of the provisions contained in Senator SPARKMAN's own bill, S. 1201.
Mr. President, I ask unanimous consent that a section- by-section analysis of S. 1681 be inserted at this point:
There being no objection, the analysis was ordered to be printed in the RECORD, as follows: