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CITY OF .ATLANT.A October 4, 1968 CITY HALL ATLANTA, GA. 30303 Tel. 522-4463 Area Code 404 !VAN ALLEN, JR., MAYOR • MEMORANDUM To: CECIL A. ALEXANDER. Chairman Housin g Resources Committee MALCOLM D. JONES Housing Coordinator Mr. Dan E. Sweat, Jr. Director of Governmental Liaison Reference is made to your Memo of September 20 and Bill Wofford's letter of September 12 to Mayor Allen pertaining to difficulties encountered in Housing Code enforcement in the Cooper-Glenn area. FHA has recently liberalized its policy by relaxing its requirements for mortgage insurance. This should help. A copy of the liber al ized policy is attached. The billion dollar commitment by the Insurance Industry to the President for purchase of mortgages in hard-core and previously uninsurable areas, should also assist somewhat in this field. However, insurance companies are still extremely reluctant to make the loans without FHA insured mortgages. The Housing Act of 1968 has liberalized the requirements for direct 3% Federal Loans, under Section 312 of the Act, and has increased maximum Federal Grants, under Section 115, for rehabilitation from $1,500 to $3,000 for needy home owners. However, both the Federal Loans and Grants are still limited to certain areas; these are: Urban Renewal areas, Code Enforcement areas, Neighborhood Development Pr ogram areas, Section 117 areas (which require little acquisition), Certified areas (See sub-par. (B)(i), Section 509) and the so-called "Fair P lan° areas (See Section 1211 of the Act and sub-par. (C)(i), Section 509). At present, it appears that the Cooper-Glenn area .. does not automa tically qualify under any of the above indicated Sections of the Act; and if sufficient improvement is made in the area through rehabilitation, this could still poss ibly prevent subsequent qualification of the area for an Urban Renewal Project. This has been confirmed by a Federal official. I have been advised by Mr. Phillip Johnson of the Rehabilitation Loans and Grants Branch of Renewal Assistance Administration of HUD, the mere fact that this or other areas are included in Atlanta's Model Cities area is insuff~cient within itself to enable property owners to qualify for assistance under the 1968 National Housing Act; that perhaps the simpliest and quickest means of qualifying the �Mr. Dan E . Sweat, Jr. October 4, 1968 Page 2 the Cooper-Glenn area, as well as other similar areas, for direct Federal Loans and Grants would be through the filing and Federal approval of an application for a "Certified" area; and further, that in order to qualify for direct 3% Federal Loans and Rehabilitation Grants, the property involved must be residential and owner-occupied; definite boundaries must be established for the area; the area must be eligible for Urban Renewal within a three (3) year period; and the City must demonstrate its ability to meet its share of the Urban Renewal costs within that length of time; and the Federal authorization will be limited to a l year's duration. A,,owner-occupied residential structure may comprise 1-4 units; the Federal Loans and Grants are 100%. However, administration of applications and follow through, except in Urban Renewal areas, must be borne 100% by City funds; and the individual applications must be processed by a City designated LPA and filed with the Rehabiliation Loans and Grants Branch of the Renewal Assistance Administration of HUD at 645 Peachtree. Even though the application for a Certified area may be approved by HUD, I have been informed that the Federal authorizat·ion for expenditures is still extremely limited and funds may not be a'\Eli.lable until additional funding by Congress. The "Fair Plan" to which reference is made in sub-par. (C)(i), Section 509 and Section 1211 of the Act (See "Fair Plan", page 83, Public Law 90-448) requires the passage by the State of Fair Act legisl a tion. To d ate, no State has passed such legislation and only one State : is .workipg on it. If and when the State passes the required Fair Act legislation, specific areas will not then have to qualify as "Certified" areas. It thus appears that the liberalization of extending the direct 3% F ederal Loans and increasing t _h e Federal Grants to $3 1 000 will not apply on a City wide basis (but will apply only within certain specif i ed areas discussed above); that it can only be ta k en advantage of on a city wid e ba s is when and after the State Fair Act ha s bee n enacted by the St a te Leg isl at ure. All of t he above has been derived f r om curr ent interpre tati ons of the Act b y those in HUD who have at tended speci al b r i e fing conferences in Washington on provisi ons o f the Ac t . It is still wi thou t interpreting administrativ e mater i al . To me, this a l l appears t o b o il d o wn to this: Federal Assistance in the form of Direct Loans and Rehabilitation Grants to owneroccupants of residential properties can only be obtained in Urban Renewal areas , Code Enforcement areas, Neighborhood Development Program areas, Certified areas, Section 117 areas and Fair Plan areas, only one type of which currently exists in Atlanta i.e. Urban Renewal areas. �Mr. Dan E . Sweat, Jr. October 4, 1968 Page 3 Furthermore, it is also quite clea r that Atlanta does not have enough time nor money to qualify all of its slum areas for Federa l assistance; and that it is a fallacy to deliberately hold in suspense any area which is in need of substantial residential improvement, whj}e hopefully waiting for e x tensive direct Federal assistance. I f we are to eliminate the slums and put ever y family in a d ecent, safe and sanitary dwel l ing, as the Mayor has indicated, in a 5-yea r period, or even within the next 10 years, in addition to such Federal Assistance as may become aw l able in any of the various type Federal approved areas which may be designated, the following steps are necess ary: A. The Hous ing Code and a p propr iate Sanitary Re g ul at ions will hav e to be rig orously enf orce d in a ll areas o f the City <w h ic h are not d efini te l y s ch-;Tu ed £o r acq u isition wit h i n the next 1 - 2 ye a rs) a g ainst pro p ert y owne rs who are abl e t o pay ( and also a ga ins t t enants , a s approp r i a te ) f or the ne c e s sary imp r oveme n t s . ( As Bi ll Wo ff o rd ' s l e tter states, th is i s not be ing done now in all areas of the City.) B. The Zoning Or d inanc e should be amend e d t o perm i t stru:tu r a l cha n ges in No n - Co nfo r mi ng Us e Re sidential property (if used f o r resid ential pu rpo ses) to meet full requirements o f the Ho using . (This would e nc o urage i mpr ov e me nt o f res id e nt ia l pr o p er ti es , rather than perpetuating slum conditions. This was recently unsuc cessful l y recommended by the HRC. c. Churches and N6n- Profi t Orga nizations wi l l have to financially assist those home owners who are not financial l y able to p i y f or the required improvements; a nd, D. I n order to improv e residential environment in ma ny areas, the City should adopt a Commercial and I ndus trial Code. 13:18, 29 December 2017 (EST)­ Ma 1 col m Hous ing MDJ/mc Encl: Copy , FHA MEMO o n Relaxatio n o f Mo r t g a g e I n sura nce Requirements. �