Abstract
First authorized in 1968, then significantly expanded in 1970, the New Communities Program was, according to its former administrator, “reduced to a salvage operation in exactly four years.”1 The program was dismantled in the fall of 1978, three years after even its modest objectives had been jettisoned in an effort to bolster the precarious financial positions of individual projects.
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Notes
W. Nicoson, “The United States: The Battle for Title VII,” in New Perspectives on Community Development, ed. M. Apgar ( London: McGraw-Hill, 1976 ), p. 56.
For some criticisms of the new-towns policies, see L. Rodwin, The British New Towns Policy (Cambridge: Harvard University Press, 1956); M. Kaplan and E. Eichler, The Community Builders (Berkeley: University of California Press, 1965); W. Alonso. Rodwin, The British New Towns Policy (Cambridge: Harvard University Press, 1956); M. Kaplan and E. Eichler, The Community Builders (Berkeley: University of California Press, 1965); W. Alonso, “The Mirage of New Towns,” The Public Interest 19 (1970).
Supplementary grants for public facilities included: water, sewers, parks, and open space under Title IV (1968); and under Title VII (1970) highways, mass transit, airports, hospitals, libraries, neighborhood facilities, and public works in areas of high unemployment.
Under the 1968 legislation only four projects were offered assistance: Jonathan, St. Charles, Park Forest South, and Flower Mound. Developers of the latter two later opted for assistance under Title V II. A project at San Antonio, Texas was also offered assistance under Title VII, but because of a lawsuit has never advanced further.
Government-initiated reviews and evaluations of the New Communities Program include: U.S. Congress, House Committee on Banking and Currency, Subcommittee on Housing, Oversight Hearings on HUD New Communities Program,May 30, 31, 1973; Comptroller General of the U.S., Getting the New Communities Program Started: Progress and Problems, U.S. General Accounting Office, November 1974 (B-170971); U.S. Congress, House Committee on Banking and Currency, Subcommittee on Housing and Community Development, Oversight Hearings on the New Communites Program,September 23, 29, 30, 1975; U.S. Congress, House Committee on Appropriations, Independent Agencies Appropriations Hearing,Part V:HUD, 1976; U.S., HUD, New Communities Administration, New Communities: Problems and Potentials,December 1976 (report and four appendices). See also R. Burby and S. Weiss, New Communities USA (Lexington, Mass.: Lexington Books, 1976), particularly Chapter 7; M. Howland, Approaches toward Implementation, Intervention and Impact Analysis in Energy Conservation Case Studies,(University of California, Berkeley: Institute of Transportation Studies, 1977) Chapter 10; Nicoson, Battle for Title VII.
There were, of course, other possibilities for less controversial forms of profit taking at the later stage of above-ground construction of housing, industrial buildings, and commercial areas—especially the latter, if the land could be sold high and repurchased low after improvements.
The New Community Development Corporation (NCDC) was set up under Section 729 of Title VII to administer guarantees and loans authorized by the 1970 Act. Subsequently the NCDC has assumed responsibilities for the overall administration of the program, previously the function of the New Communities Administration, which is now abolished.
U.S., HUD, New Communities Administration, New Communities,Appendix C, p. III-5.
Ibid.
Ibid., p. III-49. At the outset HUD aimed for a Title VII debt-toequity ratio of 4:1. In practice it was more often 5, 6, 7 or more to 1, in which the developers’ contributions took diverse forms. For example, at Maumelle, Arkansas, with a Title VII guarantee of $14 million, the developer’s share comprised a letter of credit for $600,000 plus land valued at $1.4 million. At Cedar-Riverside, Minnesota, where Title VII-guaranteed debentures amounted to $24 million, the developer was expected to contribute $7.5 million of cash equity; initially only $100,000 was forthcoming, followed later by $1 million, specifically to pay off liabilities to an affiliate.
Ibid., p. III-4.
lbid., p. III-24–25. In one case it was assumed that a new community would capture at best 3% of its metropolitan residential market, a rate achieved in practice by few. In a second case the developers’ own revenue projections were accepted, but, to simulate downturns in the business cycle, were reduced by 50% for two years in every period of five years.
Ibid., p. III-4.
This warning was issued just at the start of the New Communities Program in an article presented to the AIA Conference in 1971. The article was subsequently placed in the Congressional Record by Senator Humphrey. See L. Rodwin and L. Susskind, “New Communities and Urban Growth Strategies,” Congressional Record (Senate), July 21, 1972, p. S11462.
Ibid., p. S11463.
However, in face of widespread defaults in the payment of debt-service charges, HUD was obliged to make good its guarantee to loan institutions through borrowings from the U.S. Treasury.
In place of 75% planning grants authorized under Section 735 of Title VII, two-thirds planning grants were made under Section 701 of the Housing Act of 1954.
To a certain extent the New Community Development Corporation has been able to make good the lack of funding for some of these programs after the passage of Title I of the Housing and Community Development Act of 1974, with $15–20 million of block grants for community development. Block grants, unlike categorical grants which are subject to tight restrictions, may be used for a wide variety of purposes to be determined at the discretion of recipient authorities.
See, for example a report by the League of New Community Developers, The Status of the New Communities Program ( Washington, D.C., 1974 ).
Title VII, Urban Growth and New Community Development Act of 1970, Section 710(f).
Ibid., Section 712(a)7.
Ibid., Section 710(f).
U.S., HUD, New Communities Administration, New Communities,Appendix D, p. 39.
U.S., HUD, New Communities Administration, Regulations, Section 720. 14 (c), 1971.
U.S., HUD, New Communities Administration, New Communities,p. 84.
Comptroller General, “Getting the New Communities Program Started: Progress and Problems” (Washington, D.C., 1974 ).
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Evans, H. (1981). The New Communities Program and Why It Failed. In: Cities and City Planning. Environment, Development, and Public Policy: Cities and Development. Springer, Boston, MA. https://doi.org/10.1007/978-1-4684-1089-1_8
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