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The new federal approach is to help the cities help themselves, and to harness private enterprise for the long pull. Federal aid is conditional on each city's presenting an overall plan for preventing as well as destroying blight. To become eligible, a city must convince the Housing and Home Finance Agency that it has adequate building codes and is equipped to enforce them. a city plan for zoning, streets, land use, a sound financial program to pay its share of the cost, arrangements for rehousing families displaced by slum clearance, and assurance that the citizens of the community support the plan. Eight cities (including Chicago, Clarksville, Tenn., Somerville, Mass.) have already qualified for federal aid under the 1954 Housing Act, are thus eligible for such benefits as 95% mortgage insurance for low-cost private housing, grants up to two-thirds of the cost of projects, including improvements such as schools and parks.
Already Chicago has begun four slum-clearance and redevelopment projects and is planning three others. All told, they will generate about $95 million in private investment. Baltimore, which has received more than $9,000,000 to help clear some 80 acres of slums, has borne down on building violations, forced the owners of 6,000 houses and apartment buildings to repair or remodel. New Orleans has started a nine-year program to require the repair and modernization (mostly by private financing) of 5,000 houses a year. Civic groups, e.g., the new nonprofit American Council to Improve Our Neighborhoods (A.C.T.I.O.N.), are readying all-out campaigns to help cities improve housing.
The President's housing committee, after studying ten cities, found that tax receipts in slum areas rose two to ten times after redevelopment. In seven of the ten cities studied, the cost of slum clearance and redevelopment could have been paid off in 15 years or less, with only 75% of the increases in tax revenue. If the savings in police, fire and public health protection were added, all ten could have paid the cost of slum clearance.