market rate loans to private construction firms for moderate-rent housing. This program would make it possible for any qualified builder to enter the moderaterent housing field on the basis of market rate financing, provided that the project meets necessary criteria. The Federal Government would enter into a contract with the financing institution to supply the difference between the mortgage payment at the market interest rate and 20 percent of the tenant's monthly income, to a specified maximum write-down which would make the interest rate paid by the tenant equivalent to 1 or 2 percent.

■ An expanded and more diversified public housing program.

Since its establishment in 1937, the public housing program has produced only some 650,000 low-rent housing units. Insufficient funding has prevented construction of a quantity more suited to the need, and unrealistic unit-cost limitations have mandated that most projects be of institutional design and mammoth size. The resulting large concentration of low-income families has often created conditions generating great resistance in communities to new projects of this type. We believe that there is a need for substantially more public housing, but we believe that the emphasis of the program should be changed from the traditional publicly built, slum-based, high-rise project to smaller units on scattered sites. Where traditional highrise projects are constructed, facilities for social services should be included in the design, and a broad range of such services provided for tenants.

To achieve the shift in emphasis we have recommended, we urge first, expansion of present programs under which public housing authorities lease existing scattered site units. Present statutory restrictions on long-term leasing should be eliminated to provide incentives for private construction and financing. Families whose incomes increase above the public housing limit should be permitted to take over the leases of their units from the housing authority.

We also urge expansion of present "turnkey" programs, under which housing authorities purchase lowrent units constructed by private builders instead of constructing the units themselves. Here too, families. whose incomes rise above the public housing limits should be permitted to stay in the units at market rentals.

An expanded Model Cities program.

The Model Cities program is potentially the most effective weapon in the Federal arsenal for a longterm, comprehensive attack on the problems of American cities. It offers a unique means of developing local priorities, coordinating all applicable government programs including those relating to social development (e.g., education and health) as well as physical de

velopment and encouraging innovative plans and techniques. Its "block grant" multipurpose funding feature allows the city to deploy program funds with much greater flexibility than is possible under typical categorical grant programs, and the statutory requirement that there be widespread citizen participation and maximum employment of area residents in all phases of the program promises to involve community residents in a way we think most important.

The full potential of the program can be achieved, however, only if (a) the Model Cities proṛram is funded at a level which gives the cities involved an opportunity and incentive to produce si-nificant results, and (b) the various programs which can be brought into play under Model Cities, such as urban renewal, below-market interest rate housing, and health, education and welfare programs, are independently supported at levels which permit Model Cities' funds to be used for essentially innovative purposes. Appropriations must also be sufficient to expand coverage far beyond the 63 cities that currently are funded.

The President has recommended that $1 billion be appropriated for Model Cities. We strongly support this recommendation as a minimum start, noting that a much greater scale of funding will ultimately be necessary if the program proves successful and if it is to be made available to all the cities that require such aid.

A reoriented and expanded urban renewal program Urban renewal has been an extremely controversial program since its inception. We recognize that in many cities it has demolished more housing than it has erected, and that it has often caused dislocation among disadvantaged groups.

Nevertheless, we believe that a greatly expanded, though reoriented, urban renewal program is necessary to the health of our cities. Urban renewal is an essential component of the Model Cities program, and in its own right is an essential tool for any city attempting to preserve social and economic vitality. Substantially increased funding will be necessary if urban renewal is to become a reality in all the cities in which renewal is needed. A reorienting of the program is necessary to avoid past deficiencies. The Department of Housing and Urban Development has recognized this, and has promulgated policies giving top priority to urban renewal projects that directly assist low-income households in obtaining adequate housing. Projects aimed primarily at bolstering the economic strength of downtown areas, or at creating housing for upper income groups while reducing the supply of low-cost housing, will have low priority, unless they are part of balanced programs including a strong focus on needs of low-income groups.

With these priorities in mind, we recommend substantial expansion of the program.

Reform of obsolete building codes

Approximately 5,000 separate jurisdictions in the United States have building codes. Many of these local codes are antiquated and contain obsolete requirements that prevent builders from taking advantage of new technology. Beyond the factor of obsolesence, the very variety of the requirements prevents the mass production and standardized design that could significantly lower building costs.

Opinions differ as to whether a uniform national code is yet feasible, but it is clear that much greater uniformity is possible than presently exists. We urge state and local governments to undertake the task of modernizing their codes at once, and recommend that the Department of Housing and Urban Development design for their guidance a model national code. We can no longer afford the waste caused by arbitrary and archaic building codes.

Areas outside of ghetto neighborhoods should be opened up to occupancy by racial minorities

The Commission Recommends

Enactment of a national, comprehensive and enforceable open-occupancy law

The Federal Government should enact a comprehensive and enforceable open-occupancy law making it an offense to discriminate in the sale or rental of any housing-including single family homes-on the basis of race, creed, color, or national origin.

In recent years, various piecemeal attempts have been made to deal with the problem of housing discrimination. Executive Order 11063, issued by President Kennedy in 1962, provided that agreements for federally assisted housing made after the date of the Order must be covered by enforceable nondiscrimination pledges. Congress, in enacting Title VI of the Civil Rights Act of 1964, promulgated a broad national policy of nondiscrimination with respect to programs or activities receiving Federal financial assistance— including public housing and urban renewal. Eighteen states and more than 40 cities have enacted fair housing laws of varying degrees of effectiveness.

Despite these actions, the great bulk of housing produced by the private sector remains unaffected by antidiscrimination measures. So long as this continues, public and private action at the local level will be inhibited by the argument that local action produces competitive disadvantage.

We have canvassed the various alternatives and have come to the firm opinion that there is no substitute for enactment of a Federal fair housing law. The key to breaking down housing discrimination is universal and uniform coverage, and such coverage is obtainable only through Federal legislation.

We urge that such a statute be enacted at the earliest possible date.

Open housing legislation must be translated into open housing action. Real estate boards should work with fair housing groups in communities where such groups exist, and help form them in areas where they do not exist. The objective of voluntary community action should be (1) the full dissemination of information concerning available housing to minority. groups, and (2) providing information to the community concerning the desirability of open housing. ■ Reorientation of Federal housing programs to place more low- and moderate-income housing outside of ghetto areas.

Enactment of a national fair housing law will eliminate the most obvious barrier limiting the areas in which nonwhites live, but it will not deal with an equally impenetrable barrier, the unavailability of low and moderate income housing in nonghetto areas.

To date, housing programs serving low-income groups have been concentrated in the ghettos. Nonghetto areas, particularly suburbs, have for the most part have steadfastly opposed low-income, rent supplement, or below-market interest rate housing, and have successfully restricted use of these programs outside the ghetto.

We believe that federally aided low- and moderateincome housing programs must be reoriented so that the major thrust is in nonghetto areas. Public housing programs should emphasize scattered site construction, rent supplements should, wherever possible, be used in nonghetto areas, and an intensive effort should be made to recruit below-market interest rate sponsors willing to build outside the ghettos.

The reorientation of these programs is particularly critical in light of our recommendation that 6 million low and middle-income housing units be made available over the next 5 years. If the effort is not to be counterproductive, its main thrust must be in nonghetto areas, particularly those outside the central city.