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The original documents are located in Box 17, folder "Housing (4)" of the James M.
Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 17 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
INFORMATION
WASHINGTON
February 4, 1976
MEMORANDUM FOR
THE PRESIDENT
FROM
SUBJECT
JIM CANNON X
PRESIDENT'S TAPE FOR NATIONAL
ASSOCIATION OF HOME BUILDERS CONVENTION
Secretary Hills and Nat Rogg, Executive Vice President of
the National Association of Home Builders, have each commented
that the tape you prepared for the NAHB Convention was an
immense success. Secretary Hills reported that it was very
well received by the Home Builders attending the Convention
and Nat Rogg indicated that he believed it was the best
public presentation he had ever seen you make.
It appears that this investment of your time in preparing
the tape was well worth the effort and paid big dividends.
/ ₹ FORD LIBRARY
THE WHITE HOUSE
WASHINGTON
January 30, 1976
MEMORANDUM FOR
JIM CANNON
FROM
TOD HULLIN
4
SUBJECT
PRESIDENT'S TAPE FOR
NATIONAL ASSOCIATION OF
HOME BUILDERS CONVENTION
Secretary Hills and Nat Rogg, Executive Vice President of
the National Association of Home Builders, have each commented
that the tape the President prepared for the NAHB Convention
was an immense success. Secretary Hills reported that it
was very well received by the Home Builders attending the
Convention and Nat Rogg indicated that he believed it was the
best piece of public presentation that he had ever seen the
President make.
Attached for your signature is a memorandum to the President
indicating that this investment of his time was well worth the
effort.
GERALD R. FORD LIBRARY
U: Lynn May
DEPARTMENT
OF
HOUSING
2/6/76 laction
*
*
THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT
AND
WASHINGTON, D. C.. 20410
UNITED
February 5, 1976
Fill
Honorable James M. Cannon
Assistant to the President
for Domestic Affairs
FORD i LIBRARY 938870
The White House
Washington, D. C. 20500
Dear Jim:
Under separate cover Assistant Secretary Meeker is forwarding
for review and comment the 1976 Report on National Growth. We
also are submitting a copy to the Office of Management and Budget
today.
As you recall from the preliminary meetings of last year, the
Administration has decided that the Report will review recent
developments during 1974 and 1975, identify current trends, and
discuss broad policy alternatives in the various areas of national
growth. The Report includes frank discussions, based on government
and private studies, of both unfavorable and favorable economic and
social developments of the past two years.
A letter of transmittal from the President will accompany the
Report to the Congress. It is my recommendation that this letter
point out steps the President is taking to address many of the problems
discussed in the Report. The letter of transmittal should refer to the
State of the Union Message, the Economic Report of the President and
other Administration initiatives. Tab A contains an outline for such
a letter of transmittal.
The Report presently contains no recommendations. Although
it is not the appropriate document for substantive policy recommendations
in the areas of housing or transportation, for example, I propose to
include recommendations to improve the process of study and planning
for national growth. These recommendations would be included in the
final chapter of this volume, and are contained in Tab B to this letter.
$
2
These recommendations grew out of the preparation of the
Report. They represent important steps that the nation should take in
coming years to strengthen our understanding of the effects of growth,
to develop adequate procedures to protect and enhance our physical
environment, to increase the awareness of citizens of the issues of
growth management, and to devise a more workable intergovernmental
approach to the management of national growth.
Sincerely,
Carla
Ford LIBRARY is
A
TAB A
PRESIDENTIAL LETTER OF TRANSMITTAL
I. Introduction
The Administration has taken positive steps to address
many of the problems discussed in this report through
policy documents such as the State of the Union and
the Economic Report of the President.
II. The Economy
The discouraging trends of the last two years in
inflation, unemployment, and GNP are turning around.
We have made notable progress from the depths of the
sharpest recession in the post-World War II period.
(1/76 Econ. Report of the Pres.)
The stock market is approaching the 1000 mark,
reflecting renewed confidence in the country's economic
future.
BERALD RD LIBRARY
III. Energy
The report points out the urgency of dealing with our
future national energy needs.
I have pointed out that unless we can assure an adequate
supply of energy, there will be neither sustained growth
nor more jobs for us to report in the future. (State
of the Union Address)
The recently signed national energy bill is a compromise
measure which only partially completes my comprehensive
energy independence program. (State of the Union
Address and 1/76 Econ. Report)
IV. Open Government
The lack of citizen confidence in government undermines
all our efforts to take the initiative in guiding the
country's growth.
The Administration's emphasis on citizen participation,
as exemplified by the preparation of this report, is
designed to win that confidence again.
2
The 1977 budget presents a realistic picture of what
the government can and cannot accomplish. This
Administration avoids promising what it cannot deliver.
(State of the Union)
V.
Government Operations
The report discusses the necessity for increased
government responsiveness to its citizens. I have
called for a stop to the increase in massive govern-
ment regulation. (State of the Union)
A major goal of the Administration is to insure a full
partnership among all branches and levels of government,
private institutions, and individual citizens. (State
of the Union)
This Administration emphasizes the block grant and
revenue sharing (State of the Union) approaches to
strengthening the responsiveness and flexibility of
Federal programs. The CETA and CDBG programs are
successes, and a block grant education program has
been proposed.
TAB B
B
RECOMMENDATIONS FOR STRENGTHENING NATIONAL PLANNING FOR GROWTH
I. Research and Exchange of Information.
A. Federal agency participation in preparation of the
National Growth Report:
The Interagency Task Force which guided development
of the 1976 report should immediately begin planning the 1978
report. The research involved in the next report should be
assigned according to agency responsibilities. This procedure
would widen the scope of the report and it would reflect from
the outset a greater depth of analysis and a wider range of
policy options.
B.
Continuing research on national growth:
Whether or not the National Growth report is utilized
for this purpose, an organized Federal research program into
the effects of national growth is necessary. This program would
assess the effects of specific Federal actions, existing and
proposed, on classes of communities or specific communities
throughout the nation, and would be carried out under the
general supervision of the Domestic Council. Federal agencies,
in cooperation with interested parties, including public
interest groups, research organizations and universities, would
finance and undertake specific studies according to an agenda
developed cooperatively among the Federal agencies to reflect
research priorities.
LIBRARY
C.
Federal growth information center:
A clearinghouse is needed for the collection and
dissemination of research results concerning national growth
and development. This information service would promote a
common understanding of the range of short-term requirements
for community facilities and services and related private
development and the impact of Federal actions on state and
local community growth. Such information, readily available,
would also enhance dialogue among the executive and legislative
branches of the Federal government, the states and local
governments, in determining appropriate public policies to meet
population and community growth requirements in the coming
decades. Such a center would serve the private sector by
providing a valuable information and education function for
private institutions and individual citizens.
2
II. Public Participation.
A.
National Growth Reports:
A series of public seminars should be held in the
spring of 1976 to critique this report, with a view towards
the formulation of the research program for the 1978 version.
Closer to the time of the next report, as was done last
year, a series of public seminars should be held to solicit
views on national growth issues and policy alternatives.
The object of public participation is not only to provide
for orderly and direct communication to the President and
the Congress of a wide range of perceptions of national
growth issues, but to increase public awareness of future
implications of present policies and of the necessity to
plan for the future.
B. Encouragement of public participation in the
preparation of material such as that presented in the
supplementary volumes to this report:
In conjunction with public participation in federally
sponsored seminars, encouragement should be given to similar
public contributions to the state and local governments'-
evaluations of growth alternatives and policies.
C.
Government Programs:
If citizens are to play their rightful role in
assisting in the development of public policy, planning and
program implementation, a clearer and more orderly opportunity
must replace the proliferation of public participation require-
ments in various categorical programs. At a minimum all
block grant proposals -- including general revenue sharing --
should have uniform participation requirements. At the optimum
a Uniform Public Participation Act could modify and standardize,
as appropriate, all legislative requirements for citizen
involvement -- thereby maximizing participation of an informed
and concerned public and helping ensure open government.
III. Intergovernmental actions.
A.
Executive Branch coordination of Federal planning
programs and requirements:
At present, Federal government funding for state
and local growth planning efforts as well as its procedures
for internal growth planning are fragmented and uncoordinated.
A designated element of the Executive Branch under the
auspices of the Domestic Council should undertake the
rationalization of Federal planning assistance programs and
requirements across department and agency lines.
3
B.
Legislative coordination of Federal planning
programs and requirements:
Congress should conduct a review of growth management
programs and requirements in Federal legislation to eliminate
duplicative and contradictory grants of power.
The present system of addressing environmental
questions regarding Federal programs almost exclusively by
the Executive Branch after the legislation has been enacted
is inefficient. Congress should develop mechanisms to
address in the formulation of legislation the prospective
impact on the nation's physical, social and economic environment.
At present we have environmental impact statements,
economic impact statements and inflation impact statements --
all seeking to protect or inform the government or public
against narrow concerns. The impact process as a coordination
tool to understand the effect of proposed policy, legislation,
rulemaking or regulatory processes needs to be expanded and
strengthened to serve, at a minimum, as a warning of unanticipated
side effects of government processes. This strengthening
should be a joint concern of the Executive and Legislative
Branches, each binding itself to the improved process to
achieve a degree of coordination not offered within the
organizational structures of the Executive Branch or the
Congress.
C.
Submission of National Growth Report:
In order to take best advantage of its usefulness
in the formulation of the Presidential budget and subsequent
Congressional committee debate of Federal programs, this
report should be submitted to Congress in October of odd-
numbered years.
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
5 Part VI-Sun., Feb. 8, 1976 S
Washington Agencies
Continued from First Page
E
however, they're only useful after he's been able to buy a
build
house.
mon
And critics charge that at the same time the govern-
and
ment helps the would-be homeowner through its various
keep
housing programs, it hurts him with monetary policies
Si
that drive up interest rates. The difference between a 9%
mos
interest rate on a 30-year, $45,000 mortgage and the 7%
mc
rate common a few years ago is an increase of about $63,
len'
or 21%, in the monthly payment. Put another way, if
mortgage rates had stayed at 7%, a purchaser could buy
as
a house costing $10,000 more today for the same monthly
payment required on that 9% loan.
lew
While she agrees that Interest rates are à a problem Mrs
3. Part VI-Sun, Feb. 8, 1976
Los Angeles Times
tex Corp.,
its homes
tively low.
Nation's Housing Industry
000 fully d
in the Los
five times t
Going on a No Frills Kick
Like Kat
firm depen
industrializ
Continued from First Page
a typical $38,500 home purchased in
cut costs. I
emphasis is on square design, which
1975 in the following manner:
& Jacobs C
is cheaper to build and which creates
Cost % of Total
schedule of
the most space.
Materials
$12,657
32.9
The comp
Land
8,280
21.5
Fireplaces, shake roofs, carpeting,
ings, pack
Labor
5,960
15.5
dishwashers and air conditioning are
ducting an
Financing
4,081
10.6
optional at extra cost on all models.
central core
Overhead/Profit
4,620
12.0
Family rooms also are options with
saved by el
Other expenses
2,902 7.5
three of the four models. All homes
knocker is
in California, however, have enclosed
"The greatest savings would be in
that works ,
two-car garages as required by local
mortgage," explains Sumichrast.
President
building codes.
"Finding cheaper money is just about
really no cc
an impossibility. The other possibility
Inside, less interior wall space-
homes and
would be in smaller land parcels."
part of a basic. box design-creates
company bui
an open effect. In models decorated
But land costs also have risen
business in I
and furnished by Kaufman & Broad
sharply because of environmental im-
in Carolton,
at its Chino development, light color
pact expenses and the general pres-
apiece. They
schemes, optional family rooms and
sure on cities to urbanize.
had no garag
plenty of mirrors are used to offset
Sumichrast says that land for a sin-
ditioning or c
the lack of square footage.
gle-family, detached house used to
Farther ea
make up 10 to 11% of the unit's
National Ho
prices For example, a $20,000 house
largest mani
We
HUD DRAFT 2/12/76
I am returning without my approval H.R. 5247, the Public
Works Employment Act of 1975.
I have charted a course for the economy, and this piece
of legislation is a substantial departure from that approach.
I believe that in order to assure a continued and healthy
economic recovery, we must contain inflation while reducing
unemployment and we must control the federal budget so as to
provide the individual taxpayer with more income to spend as
he chooses. It is only by stimulating the private sector
that we can create a permanent decrease in unemployment and
a lasting, rather than temporary, economic recovery. And,
it is only by controlling excessive government spending that
we can avoid another crippling bout of inflation.
I have proposed a budget which addresses the task
of FORD VIBRARY
restraining the pattern of excessive growth in federal
spending. Reducing the Federal Government's demand for
funds is necessary to make funds available for productive
investment in the private sector. More private investment
means more lasting private sector jobs and greater productivity.
I expect my policies to result in the creation of more
than 2 million private sector jobs in 1976 and an additional
2 million in 1977. These will be productive jobs, not just
temporary employment payrolled by the taxpayer.
- 2 -
This policy of balance and of realism is working.
Inflation is being brought under control. Unemployment
is decreasing, and people are going back to work.
The bill before me is a major departure from that
course. It will add $6 billion to the federal budget.
Those dollars will be taken out of the private sector
and rendered unavailable for the private investments
necessary to create lasting productive jobs. These
additional federal expenditures may drive up interest
rates as the private sector competes with additional
government borrowing, further endangering the economic
recovery.
This is largely an election year pork barrel only
loosely camouflaged as an anti-recessionary measure.
The specific deficiencies of this bill are legion.
This bill will create almost no new jobs in the
immediate future, when those jobs are needed. Its
primary, albeit very limited effect on employment, will
come a few years from now when the economy will be well
on its way to recovery and additional expenditures will
only fuel inflation. The cost of producing even temporary
jobs under this bill will probably exceed $25,000 per job.
- 3 -
The bill has a provision for federal subsidies for
local public payrolls. This proposal would not solve the
problem of unemployment. It would merely transfer to the
Federal Government the cost of high public employee wage
settlements, threaten to add to swollen public payrolls
and add costs that localities will have to meet when this
temporary program ends.
UNITED 3
- 4 -
Moreover, jobs created will be public jobs at the expense
of the private sector and the taxpayer.
The public sector jobs provision of the bill
rewards those communities who have been least
efficient in holding down costs. For example,
Westchester County, New York and Davidson County,
North Carolina had similar unemployment rates
last year but the per capita income in Westchester
County is almost twice that of Davidson County.
Yet, the formula in this bill would give Davidson
County only one-fifth the aid per unemployed person
that Westchester County would receive. In short,
under the jobs provision, the rich get richer
and the poor get little help.
O
Other provisions of the bill are equally ill
THAT LIBRARY is CERTIL
focused. The $1.4 billion increase for waste
water treatment facilities does not even pretend
to be anti-recessionary. $10 billion of the $18
billion already allotted to states for this purpose
is still unexpended.
O
A new multi-million dollar urban renewal program
is established. The prior urban renewal program
was terminated because it is better to let cities
decide for themselves how to expend federal funds.
Nonetheless, Congress is now resurrecting its
old categorical grant program.
- 5 -
And, another urban renewal program only further
fractionates the Federal responsibility for
urban community development, making coordination
of federal assistance to the cities even more
difficult and complex.
Both the urban renewal and public works provisions
resurrect the grantsmanship which this Admin-
istration has sought to avoid in its urban
assistance programs in order to assure an equitable
distribution of funds.
Finally, the new programs envisioned by this
legislation mean the creation of new federal
bureaucracies with delays in start-up time,
administrative costs, and red tape for recipients.
For all its faults, this legislative proposal at least
purports to deal with a real problem. There are urban
centers which have been particularly hard hit by the
recession and will be slow to recover. There is a need
for a program to provide financial assistance to such
local governments, whose fiscal problems have
6 -
been exacerbated by the general economic recession. But
that assistance should be provided without more red tape,
another federal bureaucracy, and stringent categorical limita-
tions to prevent local communities from setting their own
priorities for recovery.
Accordingly, I believe a more reasonable approach to
addressing the immediate needs of such cities is represented
by H. R. 11860.
This bill combines the private sector stimulus to
new construction represented by Titles I and III of H. R. 5247,
and the special assistance to areas of high unemployment
provided by Title II.
H. R. 11860 will build upon the successful Community
Development Block Grant program. That program is already
in place with an experienced staff and regulations and could
therefore be administered without the creation of a new
bureaucracy or the delay which is endemic to new programs.
The proposal would create private sector jobs in areas of
high unemployment by funding additional activities, such as
water and sewer line construction and housing rehabilitation,
eligible under the block grant program.
The proposed supplemental assistance would be activated
when the national unemployment rate is over 7%, as it is now,
- 7 -
and would make available for distribution each calendar
quarter a sum determined by multiplying $15 million times
each 1/10th of 1% by which unemployment exceeds 7%. Since,
under H. R. 11860 the distribution of funds is based upon the
next preceding quarter's unemployment and since unemployment
the last quarter of 1975 was 8.5%, as of April 1 of this year
$225 million would be available for distribution for that
calendar quarter (8.5% - 7% = 1.5% and 15 X $15 million = $225
million).
Approximately 75% of the assistance would be provided
to cities and urban counties with unemployment over 8%, based
directly and proportionately on the extent to which their
unemployment exceeds 8%. In the same manner, the remainder
of the funds would be distributed to states for distribution
in non-urban areas having unemployment over 8%. Thus, the
bill provides assistance where it is needed through a formula
rather than pork-barrel politics.
Grants under this supplemental program would automatically
flow to recipients' community development programs with a
minimum of red tape. Recipients would submit a brief statement
of their planned use of the funding, referencing their community
development plan and the proposed job intensive use, acceleration
of planned projects, and reduction of unemployment to be
accomplished.
- 8 -
The advantages of this proposal over H. R. 5247
are that it concentrates assistance on communities with
the highest unemployment, it phases out when the unemployment
it is designed to combat has passed, it assists recipients
to attract and keep industry by creating private sector
jobs, it preserves local government decisionmaking in
determining where the funds are most needed, and it
provides needed city facilities. Of equal importance, the
use of an existing administrative structure will speed
the stimulus which the bill provides.
TIMES, SUNDAY, FEBRUARY 22, 1976
3
a state
But the Dent in Urban Blight Is Small
legisla-
mostly
is own
trying
ing ac-
the longest, Wilmington, Baltimore and Philadelphia, fewar-
= none
political
Homesteading
than 200 properties are being homesteaded, according to
a new study by Rutgers University's Center for Urban
state's
Policy Research.
makers
In the Cities
In New York City, where a multifamily, tenement varia
tion of urban homesteading exists with city aid (it is called
spected
"sweat-equity cooperative conversion") only seven buildings,
m such
with 81 apartments, have been under rehabilitation.
= local
/hether
To those who never thought urban homesteading would
vn, but
Is Working-
work, these figures are proof that the concept is a romantic
cut as
nostrum that has only peripheral relevance to the huge
and professional redevelopment needs of the inner city. To
restore
others, however, the concept still has major potential, if
$ they
ucation
Occasionally
viewed in realistically and given the necessary support.
convic-
For one thing, experts holding this view note, the pro-
ucation
gram, at least where it involves small homes, generally is
not suitable for the poor (those with annual incomes below
dy, has
million
$10,000, depending on location) because the homesteader
must pay back a rehabilitation loan that can amount to
By JOSEPH P. FRIED
$20,000 or more,
ent of
March
During the Depression of the 1930's it was "public hous-
Support Needed
llowing
inc. After World Wer TV is ---- "umber durado
THE WHITE HOUSE
REQUEST
WASHINGTON
March 4, 1976
MEMORANDUM FOR JIM CANNON
FROM:
LYNN MAY
hyn m
SUBJECT:
HUD Reports
FORD & LIBRARY GERALD
As you know, I worked with HUD and OMB for several weeks on
the development of the 1976 Report on National Growth and
Development, which is prepared under the auspices of the
Domestic Council Committee on Community Development, chaired
by Secretary Hills. I received the final version of the
report late Thursday, February 26. I also received copies
of the from HUD at approximately the same time (the original
was sent directly to Bob Linder).
I personally took the original of the Growth Report to Judy
Johnston and explained to her that its due date was February 28
(Saturday). I also mentioned that the Mobile Homes Report
was due March 1 (Monday) and that Linder should have received
the original. I told her of Secretary Hills' desire to get
the Reports in on time and asked her to effect the staffing
immediately. She indicated she would do so but told me she
was taking leave the following day (Friday). The next
morning I called Bob Linder's office to see if they had
received the staffing on the Growth Report. They indicated
they had not. I personally went to Judy's office to determine
the status of the Report and after some searching I found
that both Reports had been staffed but with a suspense of
COB Saturday, the 28th (too late to make it to the President
and the Congress).
I then called the individuals to when the Growth Report had
been staffed - Friedersdorf, Lazarus and Doug Smith of
Hartmann's office. Smith became very irate over the phone
at my insistance in requesting an immediate sign-off on a
one sentence letter of transmittal. He expressed anger at
Secretary Hills prior tactics of getting Reports in late and
then steam-rolling them through. I had to personally visit
Smith to smooth over the matter and gain his permission to
send the Report to the President, without the sign-off by
his office. I then visited Bob Linder with a cover memo to
the President signed by you and asked that he get it to the
President as soon as possible and transmit it to the Hill by
Saturday. He stated he would send it to the President, but
indicated that it might be impossible to get it to the Hill
-2-
by Saturday because he believed the offices of the Speaker
and the Vice President were closed. I then called the HUD
Congressional Liaison office who indicated that the Speaker's
office was open Saturday morning and that they would work
out an arrangement with the Vice President's office to
backdate the Report to Saturday when they opened their mail
on Monday.
I went back to Bob Linder with this information, but he
indicated that it was not White House practice to send
Reports up when the Congress was not in session and indicated
FORD
he was averse to doing so. He maintained that the Report
would probably be returned to the White House if sent up as
HUD suggested. I then called you and told you about this.
GERALD
Subsequently Secretary Hills called Jim Connor, who ordered
that the Growth Report be sent up on Saturday. It was,
however, returned on Monday by the Vice President's office,
despite HUD's efforts. It had to be sent back to the President
for approval on Tuesday and was sent to the Hill later that
day.
On Monday, my secretary called Bob Linder's office regarding
the Mobile Home Report and was informed that it had not gone
to the President and they did not know when it would be
likely to be sent in. On Tuesday, she repeated the drill
and found that it had been sent to the President and was
awaiting signature. On Wednesday, she called requesting
detailed information why the Report had not gone to the
Congress and was told that Linder's office was awaiting 30
copies of the Report from me. I did obtain copies of the
Growth Report for Linder from HUD because I believed I was
obliged to since it was a Domestic Council activity. I was
not aware that I had to act as a total go-between for
Linder with HUD on the Mobile Homes Report. I arranged,
however, for HUD to send copies to Linder and as a result
the Report went to the Hill today at noon (Thursday).
I have spent between eight to ten hours of my time on the
staffing of the two reports in question. At each point, I
had to drag information out of Judy Johnston and Bob Linder.
I can not help but feel that the White House bureaucracy is
as unresponsive as the rest of the government. On the other
hand, the HUD Reports are just a few of the many such documents
that have to be processed daily and the short turn-around
caused by HUD's late submission and Secretary Hills' adamant
insistence on meeting deadlines complicated the process.
I do not want to deny my own responsibility on the Growth
Report but I fail to see what more I could have done apart
from walking the Reports to the President and delivering
them to the Congress personally. Regarding the Mobile Homes
Report, I intervened to attempt to honor Secretary Hills'
wishes, but it was a routine report in which the Domestic
-3-
Council had no real part to play. I can't help but feel
that the bad feelings caused by the Growth Report fiasco
aggravated the delays surrounding the Mobile Homes Report.
The only suggestion that I can make to avoid future re-
occurences is either (1) Agencies be compelled to get
reports in five working days before they are to go to the
Hill or (2) the White House Secretariat (including Judy
Johnston) be more responsive to Agency and Domestic Council
priorities. I don't believe that it is an effective use of
Domestic Council staff time to monitor every step of the
staffing process. I don't believe that either you or I
should be caught in the middle of explaining the actions of
another White House office to a Cabinet Agency or vice
versa. We only lose in the process.
CC: Jim Cavanaugh
THE WHITE HOUSE
WASHINGTON
Ant
April 27, 1976
Thank
MEMORANDUM FOR:
JIM CANNON
JIM CAVANAUGH
FROM:
ART QUERN
Art
P for
very very
SUBJECT:
Housing Issues
Ms keep
Attached for your review are two housing related items The
which were mentioned at this morning's 7:30 meeting:
1.
The decision) text of regarding the Supreme low Court income decision housing. (Gautree futur.
2.
The letter sent by Secretary Hills to Senator
Tower regarding S-3295, The Housing Amendments
of 1976.
Lynn May is working closely with HUD and OMB on these
issues.
Attachment
GREATE FORD LIBRARY
THE SECRETARY or HOUSING AND URBAN DEVIELOPMENT
day
WASHINGTON, D. C.. 20410
on
APR ? : 1975
Honorable John G. Tower
United States Senate
Washington, D.C. 20510
GERALD FORD LIBRARY
Dear Senator Tower:
In response to your request, I have reviewed 3.3295,
the proposed "Housing Amendments of 1976" as reported
earlier this month by the Committee on Banking, Housing
and Urban Affairs. In my judgrent, the bill is unacceptable
in its present form.
Our mutual purpose should be to provide decent, safe
and sanitary housing for our low-income citizens. We should
provide this through sensible, flexible and consistent
programs. This bill, with its set-asides and mandates,
would severely disrupt program delivery, would not expeditiously
produce adequate shelter for its intended beneficiarios, and
would undermine the local flexibility which was the keystone
of the 1974 Housing and Community Development Act.
Subsidized Housing
The Senate bill would alter dramatically the mix of
Federal housing programs in a way which is likely to impact
negatively both on the dollar effectiveness of those programs
and on the timely delivery of housing assistance to low and
moderate income families.
The bill would resctivate the conventional low rent
public housing program at the highest level of activity in
its 40 year history, only two years after Congress itself
determined to replace that program with a new rental assistance
medicanism. The disadvantagen of conventional low rent public
housing, which led to its abandonment as a major Federal
housing program, have been catalogued so often as scarcely
to need repetition. A nineteen told increase in operating
submidies, the concentration of social problems, the exclusion
of private sector involvement or private market discipline
from the program's operation, and its houizontal inequities
have all been well documented.
-2-
The proposed resurrection of public housing takes place
largely at the expense of the Section 8 program, which vas
drafted to avoid the failings of public housing and is just
beginning to demonstrate its true potential. Section 8 can
deliver housing to needy families far more quickly than
conventional low-rent public housing. For example, from
reservation of funds to completion, conventional low-rent public
housing takes up to 46 months versus 24 months for Section 8
New. Lower income families most in need of immediate housing
assistance will be adversely affected by the bill's precipitous
reversal of the Section 8 program.
Moreover, the bill's set-aside within the housing program
destroys the 1974 Act's flexibility to adapt Federal housing
assistance to the particular conditions and needs of individual
communities. The Section 8 program requires communities to
assess their housing needs in their Housing Assistance Plans.
Narrow mandates for new construction eliminate this local
discretion.
Also, the bill's heavy emphasis on newly constructed housing
greatly increases the cost of housing our lower income citizens.
First, public housing construction is more staff intensive than
Section 8. Second, the bill's five separate set-asides would
create an administrative nightmare. The administrative controls
necessary to assure compliance, ranging from funds assignments
to program reports, would constitute a moress of paper shuffling,
which will slow down production and delay program delivery.
Third, budget authority would be increased by more than $3.8
billion dollars. Each unit of mandated new public housing
construction displaces two units of Section 8 existing housing
that could be provided to lower income families, even where
use of existing housing best meets local needs. The additional
Federal borrowing required by this mandate will bring with it
the usual inhibiting effects on private housing production.
Modernization Funds
While HUD has requested an authorization to continue the
modernization program, the bill provides a $60 million set-
aside which triples that request. That $60 million set-aside
-- which translates into an $840 million increase in the budget
authority --- is more than LHAS can absorb. A program of that
magnitude would be unmanageable both by HUD and LHAs. The
result of this excess will be the funding of marginal projects
or the inadoguato implementation of projects which do address
legitimate needs.
Our experience with the modeunization program domonstrates
the limited capacity of its participants to absorb these funds.
From 1968 through 1975, HUD provided $1.5 billion in assistance
to local housing authorities for capital expenditures. As of
June 30, 1974, less than $870 million had actually been advanced
to housing authorities which, in turn, have disbursed only $675.5
million.
The more realistic $20 million level proposed in the
Administration's budget propesal will fund $215 million in
LHA capital costs.
Section 235
The authorization of $200 million for Section 235, which
would require budget authority of $6 billion, is unrecessary
at this time. The Department has just recently implemented
the revised Section 235 program and plans on an annual reservation
level of 100, 000 units, for which the Department already has
sufficient funds. With the proposed additional authorization,
the Department would be expected to reserve 325,000 units in 1977.
This would represent an unprecodented level of activity. Horenver,
such production levels would require over 1,200 additional staff
years for processing alone. This does not include workload related
to inspection during construction or management and servicing once
the units are completed.
Aside from staff needed for the Section 235 program, the
imposition of such a volume of work could undermine quality
processing. I genuinaly fear that the result would be the
dreadful situation we have had in recent years, the consequences
of excessive production levels and hasty, poorly conducted
processing.
The program we have planned for 1977 -- 100,000 units ---
is a reasonable level, which can be accomplished without a sacrifice
of quality. We are optimistic that we can meet this production
target while avoiding the pitfalls of the original program.
Extension and Expansion of 518 (b)
Section 9 of the bill would make 518 (b) a permanent part
of the National Housing Act with expanded programantic parameters.
The original 518 (b) yas enacted to deal with problems associated
with lapses in FHA processing affecting lower income home
purchasers; the outension in the 1974 Act maintained this basic
form. Sention 0 vould MY expand this progreme to a general
Lost festure of the PLA operation, without regard to whetner
there has boan a showing of comperable need or whether the 518(b)
approach is an appropriate way of dealing with the need.
It could make the taxpayer liable for a claim made by
the purchase of any home more than 1 year old covered by FHA
mortgage insurance, based on failure of the appraiser to
detect any structural or other major defect affecting use
or livability. The claims may be retroactive to January 1973.
The problems with this provision extend beyond its cost
and staffing implications, which are difficult to estimate
with any reasonable precision. The continuation and expansion
of 518 (b) in the form in which it appears in the bill will
add a new element to FHA insurance which will add to costs and
complicate processing without providing to homeowners the
benefits of true insurance. In the long run this can only
weaken further the role of the basic FHA insurance program in
relation to other forms of home financing. In this respect, I
think it is particularly imappropriate for the Congress -- with
no showing of emergency need --- to enact such a major change
in the FHA basic program in advance of the Congressional review
of the role and future of FHA which I hope will take place next
year.
Section 202 -- Housing for the Elderly and Handicapped
The approval of an additional $2.5 billion in direct loan
authority as included in section 11 of the bill imposes an
unrealistic goal. This level of authority would provide for
an additional 100, 000 units which, in terms of processing
requirements, would necessitate an additional 300 staff years
in excess of the level included in the budget for this function.
Budget authority and staffing increases of this magnitude place
an intolerable burden on limited Imdgetary resources.
The budget recommends our proceeding with a Section 202
program in the form of a permanent loan program as directed
by the Congress last year. The level proposed in the budget
-- $375 million ---- is a reasonable one which balances our staff
resources with the popularity of the program.
It should also be noted that, although this program has
been arbitrarily removed from budget totals, it still impacts
on Treasury borrowings and on interest rates in the came fashion
as if it were in the budget. This legislative "closing of the
eyes" does not change reality.
... 5 $14
Community Development
The philosophical basis for Title I of the Housing and
Community Development Act of 1974 was that within broad guidelines
local governments should set their own community development
priorities. As compared with the categorical programs it
replaced, the community development block grant program is
more flexible, easier for local government to understand and
work with, and less staff intensive at the Federal level.
The bill would represent a substantial reversion
to the categorical approach. Section 12 would reestablish
the Section 312 rehabilitation loan program at a funding level of
$150 million, despite the fact that in 1975, block grant
communities targeted 9%, or more than $230 million, of the
block grant funds for rehabilitation activities. This is
more than triple the reservation level we have experienced
under the 312 program. The funds under the 312 program will
be spent in accordance with a Federal rather than a local
priority and will divert the Department's community development
staff from the block grant program.
The expansion of the Section 701 comprehensive planning
program by Section 13 of the bill raises similar problems.
The Department has proposed that $25 million be available under
this program for units of local government which do not: receive
funds under the block grant program. But expanding the program
to $100 million and thereby enlarging the class of eligible
communities is once again to assert Federal over local priorities
and to separate the funding and administration of planning from
the community development activity which ought to be the end
product of the planning process.
To perpetuate categorical programs when the purposes they
were designed to serve are better achieved under the block grant
program is particularly inappropriate in light of the fact that
funding under the block grant program will be $446 million nove
in FY 1977 than it was in FY 1976.
Finally, depending upon unit mix and contractual terms,
implementation of the bill would require an increase in budget
authority of between $12.9 billion and $17.7 billion. Such an
increase would be wasteful and fiscally intesponsible. For the
reasons outlined in this letter, awong others, it will not
provide local government or low income persons with the benefits
intended by the 1974 Rob.
-- 6 -
Accordingly, I would recommend that the President veto
S.3295 if enacted in its present form. The Office of Management
and Budget has advised that it would concur in this recommendation.
Sincerely,
Carla A. Hills
NOTE: Where It is feasible, a syllabus (beaduote) will be re-
leased, as is being done in connection with this case. at the time
the opinion is issued. The syllabus constitutes no part of the opinion
of the Court but has been prepared by the Reporter of Decisions for
the convenience of the reader. See United States V. Detroit Lumber
Co., 200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
HILLS, SECRETARY OF HOUSING AND URBAN
DEVELOPMENT v. GAUTREAUX ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SEVENTH CIRCUIT
No. 74-1047. Argued January 20, 1976-Decided April 20, 1976
Respondents, Negro tenants in or applicants for public housing
in Chicago, brought separate class actions against the Chicago
Housing Authority (CHA) and the Department of Housing and
Urban Development (HUD). alleging that CHA had deliberately
selected family public housing sites in Chicago to "avoid the
placement of Negro families in white neighborhoods" in violation
of federal statutes and the Fourteenth Amendment, and that
HUD had assisted in that policy by providing financial assistance
and other support for CHA's discriminatory housing projects. The
District Court on the basis of the evidence entered summary
judgment against CHA, which was ordered to take remedial
action. The court then granted a motion to dismiss the HUD
action, which meanwhile had been held in abeyance. The Court
of Appeals, reversed, having found that HUD had committed
constitutional and statutory violations by sanctioning and assist-
ing CHA's discriminatory program. The District Court there-
after consolidated the CHA and HUD cases and, having rejected
respondents' motion to consider metropolitan relief, adopted
petitioner's proposed order for corrective action in Chicago. The
Court of Appeals reversed and remanded the case "for additional
evidence and for further consideration of metropolitan relief."
Held: A metropolitan area remedy in this case is not impermissible
as a matter of law. Milliken V. Bradley, 418 U. S. 717, dis-
tinguished. Pp. 11-21.
(a) A remedial order against HUD affecting its conduct in the
area beyond Chicago's geographic boundaries but within the hous-
FORD
ing market relevant to the respondents' housing options is
"y
warranted here because HUD, in contrast to the suburban school
I
GERALD
LIBRARY
II
HILLS v. GAUTREAUX
Syllabus
districts in Milliken, committed violations of the Constitution
and federal statutes. Milliken imposes no per se rule that federal
coarts lack authority to order corrective action beyond the
municipal boundaries where the violations occurred. Pp. 12-15.
(b) The order affecting HUD's conduct beyond Chicago's
boundaries would not impermissibly interfere with local govern-
ments and suburban housing authorities that were not implicated
in HUD's unconstitutional conduct. Under the §8 Lower-Income
Housing assistance program of the Community Development Act
of 1974 HUD may contract directly with private owners and
developers to make leased housing units available to eligible lower-
income persons, with local governmental units retaining the right
to comment on specific proposals, to reject certain programs that
are inconsistent with their approved housing assistance plans, and
to require that zoning and other land use restrictions be observed
by builders. Pp. 15-21.
503 F. 2d 930, affirmed.
STEWART, J., delivered the opinion of the Court in which all
Members joined, except STEVENS, J., who took no part in the con-
sideration or decision of the case. MARSHALL, J., filed a con-
curring statement, in which BRENNAN and WHITE, JJ., joined.
FORD LIBRARY y
NOTICE This opinion is subject to formal revision before publication
in the preliminary print of the United States Reports. Renders are re-
quested to notify the Reporter of Decisions, Supreme Court of the
United States, Washington, D.C. 20543, of any typocraphical or other
formal errors, in order that corrections may be made before the pre-
liminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 74-1047
Carla A. Hills, Secretary of
Housing and Urban De-
On Writ of Certiorari to the
velopment, Petitioner,
United States Court of
Appeals for the Seventh
V.
Circuit.
Dorothy Gautreaux et al.
[April 20, 1976]
MR. JUSTICE STEWART delivered the opinion of the
Court.
The United States Department of Housing and Urban
Development (HUD) has been judicially found to have
violated the Fifth Amendment and the Civil Rights Act
of 1964 in connection with the selection of sites for pub-
lic housing in the city of Chicago. The issue before us
is whether the remedial order of the federal trial court
may extend beyond Chicago's territorial boundaries.
I
This extended litigation began in 1966 when the re-
spondents, six Negro tenants in or applicants for public
housing in Chicago. brought separate actions on behalf
of themselves and all other Negro tenants and applicants
similarly situated against the Chicago Housing Authority
(CHA) and HUD.' The complaint filed against CHA in
the United States District Court for the Northern Dis-
1 The original complaint named the Housing Assistance Admin-
istration, then a corporate agency of HUD, as the defendant. Al-
though the petitioner in this case is the current Secretary of HUD,
this opinion uses the terms "petitioner" and "HUD" interchangeably.
74-1047-OPINION
2
HILLS v. GAUTREAUX
trict of Illinois alleged that between 1950 and 1965 sub-
stantially all of the sites for family public housing se-
lected by CHA and approved by the Chicago City
Council were "at the time of such selection. and are now,"
located "within the areas known as the Negro Ghetto."
The respondents further alleged that CHA deliberately
selected the sites to "avoid the placement of Negro fam-
ilies in white neighborhoods" in violation of federal stat-
utes and the Fourteenth Amendment. In a companion
suit against HUD the respondents claimed that it had
"assisted in the carrying on and continues to assist in
the carrying on of a racially discriminatory public hous-
ing system within the City of Chicago" by providing
financial assistance and other support for CHA's dis-
criminatory housing projects.²
The District Court stayed the action against HUD
pending resolution of the CHA suit.³ In February of
1969, the court entered summary judgment against CHA
on the ground that it had violated the respondents' con-
stitutional rights by selecting public housing sites and
assigning tenants on the basis of race.4 Gautreaux V.
2 The complaint sought to enjoin HUD from providing funds for
17 projects that had been proposed by CHA in 1965 and 1966 and
from making available to CHA any other financial assistance to be
used in connection with the racially discriminatory aspects of the
Chicago public housing system. In addition, the respondents re-
quested that they be granted "such other and further relief as the
Court may deem just and equitable."
3 Before the stay of the action against HUD. the District Court
had certified the plaintiff class in the CHA action and had rejected
'CHA's motion to dismiss or for summary judgment on the counts
of the complaint alleging that CHA had intentionally selected public
housing sites to avoid desegregating housing patterns. 265 F. Supp.
582.
& CHA admitted that it had followed a policy of informally clear-
ing proposed family public housing sites with the alderman in whose
ward the proposed site was located and of eliminating each site-
74-1047-OPINION
HILLS v. GAUTREAUX
3
CHA, 296 F. Supp. 907. Uncontradicted evidence sub-
mitted to the District Court established that the public
housing system operated by CHA was racially segregated,
with four overwhelmingly white projects located in white
neighborhoods and with 991/2% of the remaining family
units located in Negro neighborhoods and 99% of those
units occupied by Negro tenants. Id., at 910.5 In order
to prohibit future violations and to remedy the effects of
past unconstitutional practices, the court directed CHA
to build its next 700 family units in predominantly white
areas of Chicago and thereafter to locate at least 75% of
its new family public housing in predominantly white
areas inside Chicago or in Cook County. Gautreaux V.
CHA, 304 F. Supp. 736, 738-739.6 In addition, CHA was
opposed by the alderman. 296 F. Supp. 907, 910, 913. This pro-
cedure had resulted in the rejection of 991/2% of the units proposed
for sites in white areas which had been initially selected as suitable
for public housing by CHA. Id., at 912.
With regard to tenant assignments, the court found that CHA
had established a racial quota to restrict the number of Negro
families residing in the four CHA family public housing projects
located in white areas in Chicago. The projects, all built prior to
1944, had Negro tenant populations of 7%. 6%, 1%, and 1% despite
the fact that Negroes comprised about 90% of the tenants of CHA
family housing units and a similar percentage of the waiting list.
A CHA official testified that until 1968 the four proj-
ects located in white areas were listed on the authority's tenant
selection form as suitable for white families only. Id., at 909.
s In July of 196S, CHA had in operation or development 54 family
housing projects with a total of 30,S48 units. Statistics submitted
to the District Court established that, aside from the four over-
whelmingly white projects discussed in n. 4, supra, 92% of all of
CHA's family housing units were located in neighborhoods that were
at least 75% Negro and that two-thirds of the units were situated
in areas with more than 95% Negro residents. Id., at 910.
6 The District Court's remedial decree divided Cook County into
a "General Public Housing Area" and a "Limited Public Housing
Area." The "Limited Public Housing Area" consisted of the area
within census tracts having a 30% or more non-white population
74-1047-OPINION
1
HILLS v. GAUTREAUX
ordered to modify its tenant assignment and site selection
procedures and to use its best efforts to increase the sup-
ply of dwelling units as rapidly as possible in conformity
with the judgment. Id., at 739-741.
The District Court then turned to the action against
HUD. In September of 1970, it granted HUD's motion
to dismiss the complaint for lack of jurisdiction and fail-
ure to state a claim on which relief could be granted.
The United States Court of Appeals for the Seventh
Circuit reversed and ordered the District Court to enter
summary judgment for the respondents, holding that
HUD had violated both the Fifth Amendment and § 601
of the Civil Rights Act of 1964, 42 U. S. C. § 2000d
(1970), by knowingly sanctioning and assisting CHA's
racially discriminatory public housing program. 448 F.
2d 731, 739-740.'
On remand, the trial court addressed the difficult prob-
lem of providing an effective remedy for the racially
segregated public housing system that had been created
or within one mile of the boundary of any such census tract. The
remainder of Cook County was included in the "General Public
Housing Area." 304 F. Supp., at 737. Following the commence-
ment of construction of at least 700 family units in the General
Public Housing Area of the city of Chicago, CHA was permitted
by the terms of the order to locate up to one-third of its General
Public Housing Area units in portion of Cook County outside of
Chicago. See id., at 73S-739.
7 The Court of Appeals found that "HUD retained a large amount
of discretion to approve or reject both site selection and tenant
assignment procedures of the local housing authority" and that
the Secretary had exercised those powers "in a manner which per-
petuated a racially discriminatory housing system in Chicago." 448
F. 2d, at 739. Although the appellate court stated that it was
"fully sympathetic" with the "very real 'dilemma'' presented by
the need for public housing in Chicago, it ruled that the demand
for housing did not justify "the Secretary's past actions [which]
constituted racially discriminatory conduct in their own right."
Ibid.
74-1047-OPINION
HILLS v. GAUTREAUX
5
by the unconstitutional conduct of CHA and HUD.⁸
The court granted the respondents' motion to consoli-
date the CHA and HUD cases and ordered the parties
to formulate "a comprehensive plan to remedy the past
$ The court's July 1969 order directing CHA to use its best efforts
to increase public housing opportunities in white areas as rapidly as
possible had not resulted in the submission of a single housing site
to the Chicago City Council. A subsequent order directing the
submission of sites for 1500 units by September 20, 1970, had
eventually prompted CHA to submit proposed sites in the spring
of 1971, but inaction by the City Council had held up the approval
of the sites required for their development. See Gautreaux v. Rom-
ney, 332 F. Supp. 366, 368.
The District Court subsequently took additional measures in an
attempt to implement the remedial orders entered against CHA.
In May 1971, the city of Chicago and HUD agreed to a letter of
intent that provided that the city would process sites suitable for use
by CHA to permit the authority to commence acquisition of sites
for 1,700 units in accordance with a specified timetable. HUD then
released certain Model Cities funds on the condition that the City
Council and CHA continue to show progress toward meeting the
goals set forth in the May letter. After the city fell far behind
schedule, the District Court granted the respondents' request for
an injunction directing HUD to withhold S26 million in Model Cities
funds until the city remedied its existing deficit under the timetable.
See 332 F. Supp. 366, 36S-370. The Court of Appeals reversed the
injunction, holding that the District Court had abused its discretion
in ordering funding cutoff. 457 F. 2d 124.
Between July 1971 and April 1972, the City Council failed to
conduct any hearings with respect to acquisition of property for
housing sites and did not approve land acquisition for any sites.
342 F. Supp. S27, 829. Following the filing of a supplemental com-
plaint naming the mayor and the members of the City Council as
defendants, the District Court found that their inaction had pre-
vented CHA from providing relief in conformity with the court's
FORD LIBRARY "y GERALD
prior orders. In a further effort to effectuate relief, the court ruled
that the provision of Illinois law requiring City Council approval of
land acquisition by CHA "shall not be applicable to CHA's ac-
tions
taken for the purpose of providing Dwelling Units." Id.,
:at 830. The Court of Appeals upheld this decision. 4S0 F. 2d 210_
74-1047-OPINION
6
HILLS v. GAUTREAUX
effects of unconstitutional site selection procedures."
The order directed the parties to "provide the Court
with as broad a range of alternatives as seem
fea-
sible" including "alternatives which are not confined in
their scope to the geographic boundary of the City of
Chicago." After consideration of the plans submitted
by the parties and the evidence adduced in their sup-
port, the court denied the respondents' motion to con-
sider metropolitan relief and adopted the petitioner's
proposed order requiring HUD to use its best efforts to
assist CHA in increasing the supply. of dwelling units
and enjoining HUD from funding family public housing
programs in Chicago that were inconsistent with the
previous judgment entered against CHA. The court
found that metropolitan relief was unwarranted because
"the wrongs were committed within the limits of Chicago
and solely against residents of the City" and there were
no allegations that "CHA and HUD discriminated or
fostered racial discrimination in the suburbs."
On appeal, the Court of Appeals for the Seventh
Circuit, with one judge dissenting, reversed and remanded
the case for "the adoption of a comprehensive metro-
politan area plan that will not only disestablish the seg-
regated public housing system in the City of Chicago
but will increase the supply of dwelling units as rapidly
as possible." 503 F. 2d 930, 939. Shortly before the
Court of Appeals announced its decision, this Court in
Milliken V. Bradley, 418 U. S. 717, had reversed a judg-
ment of the Court of Appeals for the Sixth Circuit that
had approved a plan requiring the consolidation
of 54 school districts in the Detroit metropolitan
area to remedy racial discrimination in the opera-
tion of the Detroit public schools. Understand-
ing Milliken "to hold that the relief sought
there would be an impractical and unreasonable over-
74-1047-OPINION
HILLS v. GAUTREAUX
7
response to a violation limited to one school district,"
the Court of Appeals concluded that the Milliken de-
cision did not bar a remedy extending beyond the limits
of Chicago in the present case because of the equitable
and administrative distinctions between a metropolitan
public housing plan and the consolidation of numerous
local school districts. 503 F. 2d, at 935-936. In addi-
tion, the appellate court found that, in contrast to Milli-
ken, there was evidence of suburban discrimination and
of the likelihood that there had been an "extra-city
impact" of the petitioner's "intra-city discrimination."
Id., at 936-937, 939-940. The appellate court's deter-
mination that a remedy extending beyond the city limits
was both "necessary and equitable" rested in part on
the agreement of the parties and the expert witnesses
that "the metropolitan area is a single relevant locality
for low rent housing purposes and that a city-only
remedy will not work." Id., at 936, 937. HUD sub-
sequently sought review in this Court of the permissi-
bility in light of Milliken of "inter-district relief for
discrimination in public housing in the absence of a find-
ing of an inter-district violation." We granted certio-
rari to consider this important question. 421 U.S. 962.
II
In Milliken V. Bradley, supra, this Court considered
the proper scope of a federal court's equity decree in the
context of a school desegregation case. The respondents
in that case had brought an action alleging that the
Detroit Public School System was segregated on the
basis of race as the result of official conduct and sought
an order establishing ""a unitary, nonracial school sys-
FORD LIBRARY y GERALD
'tem.'' 418 U. S., at 723. After finding that con-
9 Although CHA participated in the proceeding before the Court
of Appeals, it did not seek review of that court's decision and has
not participated in the proceedings in this Court.
74-1047-OPINION
8
HILLS v. GAUTREAUX
stitutional violations committed by the Detroit School
Board and state officials had contributed to racial segre-
gation in the Detroit schools, the trial court had pro-
ceeded to the formulation of a remedy. Although there
had been neither proof of unconstitutional actions on
the part of neighboring school districts nor a demonstra-
tion that the Detroit violations had produced significant
segregative effects in those districts, the court established
a desegregation panel and ordered it to prepare a reme-
dial plan consolidating the Detroit school system and 53
independent suburban school districts. Id., at 733-734.10
The Court of Appeals for the Sixth Circuit affirmed
the desegregation order on the ground that, in view of
the racial composition of the Detroit school system, the
only feasible remedy required "the crossing of the bound-
ary lines between the Detroit School District and ad-
jacent or nearby school districts." Bradley V. Milliken,
484 F. 2d 215, 249. This Court reversed the Court of
Appeals, holding that the multidistrict remedy contem-
plated by the desegregation order was an erroneous exer-
-cise of the equitable authority of the federal courts.
Although the Milliken opinion discussed the many
practical problems that would be encountered in the con-
solidation of numerous school districts by judicial decree,
the Court's decision rejecting the metropolitan area de-
segregation order was actually based on fundamental
10 Although the trial court's desegregation order in Milliken did
not direct the adoption of a specific metropolitan plan, it did con-
tain detailed guidelines for the panel appointed to draft the desegre-
gation plan. 345 F. Supp. 914 (ED Mich.). The framework for
the plan called for the division of the designated 54-school district
desegregation area into 15 clusters, each containing a part of the
Detroit school system and two or more suburban districts. Within
this framework, the court charged the panel with the responsibility
for devising a plan that would produce the maximum actual desegre-
gation. Id., at 91S, 92S-929 See 418 U.S., at 733-734.
74-1047-OPINION
HILLS v. GAUTREAUX
9
limitations on the remedial powers of the federal courts
to restructure the operation of local and state govern-
mental entities. That power is not plenary. It "may
be exercised 'only on the basis of a constitutional viola-
tion." 418 U.S., at 73S, quoting Swann V. Charlotte-
Mecklenburg Board of Education, 402 U.S. 1, 16. See
Rizzo V. Goode, - U.S. -, - Once a constitu-
tional violation is found, a federal court is required to
tailor "the scope of the remedy" to fit "the nature and
extent of the constitutional violation." 418 U.S., at 744;
Swann, supra, at 16. In Milliken, there was no finding of
unconstitutional action on the part of the suburban school
officials and no demonstration that the violations com-
mitted in the operation of the Detroit school system had
had any significant segregative effects in the suburbs.
See 418 U.S., at 745, 74S. The desegregation order in
Milliken requiring the consolidation of local school dis-
tricts in the Detroit metropolitan area thus constituted
direct federal judicial interference with local govern-
mental entities without the necessary predicate of a
constitutional violation by those entities or of the iden-
tification within them of any significant segregative ef-
fects resulting from the Detroit school officials' unconsti-
tutional conduct. Under these circumstances, the Court
held that the interdistrict decree was impermissible be-
cause it was not commensurate with the constitutional
violation to be repaired.
Since the Milliken decision was based on basic limita-
tions on the exercise of the equity power of the federal
courts and not on a balancing of particular considerations
presented by school desegregation cases, it is apparent
that the Court of Appeals erred in finding Milliken in-
applicable on that ground to this public housing case."
11 The Court of Appeals interpreted the Milliken opinion as
limited to a determination that, in view of the administrative com-
74-1047-OPINION
10
HILLS v. GAUTREAUX
The school desegregation context of the Milliken case is
nonetheless important to an understanding of its discus-
sion of the limitations on the exercise of federal judicial
plexities of school district consolidation and the deeply-rooted tradi-
tion of local control of public schools, the balance of equitable
factors weighed against metropolitan school desegregation remedies.
See 503 F. 2d, at 935-936. But the Court's decision in Milliken
was premised on a controlling principle governing the permissible
scope of federal judicial power, a principle not limited to a school
desegregation context. See 41S U.S., at 744.
In addition, the Court of Appeals surmised that either an inter-
district violation or an interdistrict segregative effect may have been
present in this case. There is no support provided for either con-
clusion. The sole basis of the appellate court's discussion of alleged
suburban discrimination was the respondents' exhibit 11 illustrating
the location of 12 public housing projects within the portion of the
Chicago Urbanized Area outside the city limits of Chicago. That ex-
hibit showed that 11 of the 12 projects were located in areas that, at
the time of the hearing in November of 1972, were within one mile
of the boundary of a census tract with less than a 70% white
population. The exhibit was offered to illustrate the scarcity of
integrated public housing opportunities for the plaintiff class and
for lower-income white families and to indicate why the respondents
did not "expect cooperation from the suburban areas" in providing
housing alternatives in predominately white areas. In discussing
the data underlying the exhibit, counsel for the respondents in the
trial court expressly attempted to avoid the "possible misconcep-
tion" that he was then asserting that the suburban municipalities and
housing authorities were "guilty of any discrimination or wrong-
doing." In view of the purpose for which the exhibit was offered
and the District Court's determination that "the wrongs were com-
mitted within the limits of Chicago," it is apparent that the Court
of Appeals was mistaken in supposing that the exhibit constitutes
evidence of suburban discrimination justifying metropolitan area
relief.
In its brief opinion on rehearing, the Court of Appeals asserted
that "it is reasonable to conclude from the record" that the intra-
city violation "may well have fostered racial paranoia and encour-
aged the 'white flight' phenomenon which has exacerbated the
problems of achieving integration." 503 F. 2d, at 939-940. The
74-1047-OPINION
HILLS v. GAUTREAUX
11
power. As the Court noted, school district lines cannot be
"casually ignored or treated as a mere administrative con-
venience" because they separate independent govern-
mental entities responsible for the operation of autono-
mous public school systems. 418 U.S., at 741-743. The
Court's holding that there had to be an interdistrict
violation or effect before a federal court could order the
crossing of district boundary lines reflected the substan-
tive impact of a consolidation remedy on separate and
independent 'school districts." The District Court's de-
segregation order in Milliken was held to be an imper-
missible remedy not because it envisioned relief against
a wrongdoer extending beyond the city in which the vio-
lation occurred but because it contemplated a judicial
decree restructuring the operation of local governmental
entities that were not implicated in any constitutional
violation.
III
The question presented in this case concerns only the
authority of the District Court to order HUD to take
remedial action outside the city limits of Chicago. HUD
does not dispute the Court of Appeals' determination
Court of Appeals' speculation about the effects of the discriminatory
site selection in Chicago is contrary both to expert testimony in the
record and the conclusions of the District Court. Such unsupported
speculation falls far short of the demonstration of a "significant
segregative effect in another district" discussed in the Milliken opin-
ion. See 418 U.S., at 745.
12 The Court in Milliken required either a showing of an inter-
district violation or a significant segregative effect "[b]efore the
boundaries of separate and autonomous school districts may be set
aside by consolidating the separate units for remedial purposes."
418 U. S., at 744. In its amicus brief in Milliken, the United
States argued that an interdistrict remedy in that case would
require "the restructuring of state or local governmental entities"
and result in "judicial interference with state prerogatives concerning
the organization of local governments."
74-1047-OPINION
12
HILLS v. GAUTREAUX
that it violated the Fifth Amendment and § 601 of the
Civil Rights Act of 1964 by knowingly funding CHA's
racially discriminatory family public housing program,
nor does it question the appropriateness of a remedial
order designed to alleviate the effects of past segregative
practices by requiring that public housing be developed
in areas that will afford respondents an opportunity to
reside in desegregated neighborhoods. But HUD con-
tends that the Milliken decision bars a remedy affecting
its conduct beyond the boundaries of Chicago for two
reasons. First, it asserts that such a remedial order
would constitute the grant of relief incommensurate with
the constitutional violation to be repaired. And, second,
it claims that a decree regulating HUD's conduct be-
yond Chicago's boundaries would inevitably have the
effect of "consolidat [ing] for remedial purposes" gov-
ernmental units not implicated in HUD's and CHA's vio--
lations. We address each of these arguments in turn.
A
We reject the contention that, since HUD's con-
stitutional and statutory violations were committed in
Chicago, Milliken precludes an order against HUD that
will affect its conduct in the greater metropolitan area.
The critical distinction between HUD and the subur-
ban school districts in Milliken is that HUD has been
found to have violated the Constitution. That violation
provided the necessary predicate for the entry of a reme-
dial order against HUD and, indeed, imposed a duty on
the District Court to grant appropriate relief. See 418
U. S., at 744. Our prior decisions counsel that in the
event of a constitutional violation "all reasonable
methods be available to formulaté an effective remedy,"
North Carolina State Board of Education V. Swann, 402;
U.S. 43, 46, and that every effort should be made by
74-1047-OPINION
HILLS v. GAUTREAUX
13
a federal court to employ those methods "to achieve the
greatest possible degree of [relief], taking into account
the practicalities of the situation." Davis V. Board of
School Comm'rs, 402 U. S. 33, 37. As the Court ob-
served in Swann V. Charlotte-Mecklenburg Board of
Education: "Once a right and a violation have been
shown, the scope of a district court's equitable powers
to remedy past wrongs is broad, for breadth and flexi-
bility are inherent in equitable remedies." 402 U. S.,
at 15.
Nothing in the Milliken decision suggests a per se rule
that federal courts lack authority to order parties found
to have violated the Constitution to undertake remedial
efforts beyond the municipal boundaries of the city
where the violation occurred." As we noted in Part II,
supra, the District Court's proposed remedy in Milliken
was impermissible because of the limits on the federal
judicial power to interfere with the operation of state
political entities that were not implicated in unconstitu-
tional conduct. Here, unlike the desegregation remedy
found erroneous in Milliken, a judicial order directing
13 Although the State of Michigan had been found to have com-
mitted constitutional violations contributing to racial segregation in
the Detroit schools, 418 U. S.,. at 734-735, n. 16, the Court in
Milliken concluded that the interdistrict order was a wrongful exer-
cise of judicial power because prior cases had established that such
violations are to be dealt with in terms of "an established geo-
graphic and administrative school system," id., at 746, and because
the State's educational structure vested substantial independent con-
trol over school affairs in the local school districts. See id., at 742-
744. In Milliken, a consolidation order directed against the State
would of necessity have abrogated the rights and powers of the
suburban school districts under Michigan law. See id., at 742
n. 20. Here, by contrast, a metropolitan area remedy involving
HUD need not displace the rights and powers accorded suburban
governmental entities under federal or state law. Sce Part III-B,
infra.
741047-OPINION
14
HILLS v. GAUTREAUX
relief beyond the boundary lines of Chicago will not
necessarily entail coercion of uninvolved governmental
units, because both CHA and HUD have the authority
to operate outside the Chicago city limits.14
In this case, it is entirely appropriate and consistent
with Milliken to order CHA and HUD to attempt to
create housing alternatives for the respondents in the
Chicago suburbs. Here the wrong committed by HUD
confined the respondents to segregated public housing.
The relevant geographic area for purposes of the re-
spondents' housing options is the Chicago housing mar-
ket, not the Chicago city limits. That HUD recognizes
this reality is evident in its administration of federal
housing assistance programs through "housing market
areas" encompassing "the geographic area 'within which
all dwelling units
are in competition with one an-
other as alternatives for the users of housing." Depart-
ment of Housing and Urban Development, FHA Tech-
niques of Housing Market Analysis S (Jan. 1970) quot-
ing The Institute for Urban Land Use and Housing
Studies, Housing Market Analysis: A Study of Theory
and Methods, c. II (1953). The housing market area
34 Illinois statutes permit a city housing authority to exercise
its powers within an "area of operation" defined to include the
territorial boundary of the city and all of the area within three
miles beyond the city boundary that is not located within the
boundaries of another city, village, or incorporated town. In addi-
tion, the housing authority may act outside its area of operation by
contract with another housing authority or with a state public body
not within the area of operation of another housing authority.
Ill. Rev. Stat. c. G7½. §§ 17 (b), 27c (1959).
Although the state officials in Milliken had the authority to
operate across school district lines, the exercise of that authority
to effectuate the Court's desegregation order would have eliminated
GERALD R. FORD
numerous independent school districts or at least have displaced
important powers granted those uninvolved governmental entities.
under state law. Sce n. 13, supra.
74-1047-OPINION
HILLS v. GAUTREAUX
15
"usually extends beyond the city limits" and in the larger
markets "may extend into several adjoining counties."
Id., at p. 12.15 An order against HUD and CHA regu-
lating their conduct in the greater metropolitan area will
do no more than take into account HUD's expert deter-
mination of the area relevant to the respondents' housing
opportunities and will thus be wholly commensurate with
the "nature and extent of the constitutional violation."
418 U. S., at 744. To foreclose such relief solely because
HUD's constitutional violation took place within the
city limits of Chicago would transform Milliken's prin-
cipled limitation on the exercise of federal judicial
authority into an arbitrary and mechanical shield for
those found to have engaged in unconstitutional conduct.
B
The more substantial question under Milliken is
whether an order against HUD affecting its conduct
beyond Chicago's boundaries would impermissibly inter-
fere with local governments and suburban housing au-
thorities that have not been implicated in HUD's
unconstitutional conduct. In examining this issue, it
is important to note that the Court of Appeals' decision
did not endorse or even discuss "any specific metropolitan
plan" but instead left the formulation of the remedial
plan to the District Court on remand. 503 F. 2d, at 936.
On rehearing, the Court of Appeals characterized its
remand order as one calling "for additional evidence and
for further consideration of the issue of metropolitan
area relief in light of this opinion and that of the
15 In principal markets such as Chicago, the Standard Metro-
politan Statistical Area is coterminous with the housing market
area. See Department of Housing and Urban Development, FHA
Techniques of Housing Market Analysis 13 (Jan. 1970); Depart-
ment of Housing and Urban Development, Urban Housing Market
Analysis 5 (1966).
74-1047-OPINION
16
HILLS v. GAUTREAUX
Supreme Court in Milliken V. Bradley." Id., at 940.
In the current posture of the case, HUD's contention
that any remand for consideration of a metropolitan area
order would be impermisible as a matter of law must
necessarily be based on its claim at oral argument "that
court-ordered metropolitan relief in this case, no matter
how gently it's gone about, no matter how it's framed,
is bound to require HUD to ignore the safeguards of
local autonomy and local political processes" and there-
fore to violate the limitations on federal judicial power
established in Milliken. In addressing this contention
we are not called upon, in other words, to evaluate the
validity of any specific order, since no such order has yet
been formulated.
HUD's position, we think, underestimates the ability
of a federal court to formulate a decree that will grant
the respondents the constitutional relief to which they
may be entitled without overstepping the limits of judi-
cial power established in the Milliken case. HUD's
discretion regarding the selection of housing proposals
to assist with funding as well as its authority under a
recent statute to contract for low-income housing di-
rectly with private owners and developers can clearly
be directed towards providing relief to the respondents
in the greater Chicago metropolitan area without pre-
empting the power of local governments by undercutting
the role of those governments in the federal housing
assistance scheme.
An order directing HUD to use its discretion under the
various federal housing programs to foster projects lo-
cated in white areas of the Chicago housing market would
be consistent with and supportive of well-established
federal housing policy.¹ᶜ Title VI of the Civil Rights
16 In the District Court, HUD filed an appendix detailing the
various federal programs designed to secure better housing oppor-
74-1047-OPINION
HILLS v. GAUTREAUX
17
Act of 1964 prohibits racial discrimination in federally
assisted programs including, of course, public housing
programs." Based upon this statutory prohibition,
HUD in 1967 issued site approval rules for low-rent
housing designed to avoid racial segregation and expand
the opportunities of minority group members "to locate
outside areas of [minority] concentration." Depart-
ment of Housing and Urban Development, Low-Rent
Housing Manual, § 205.1. iT 4 (g) (Feb. 1967 rev.). Title
VIII of the Civil Rights Act of 1968. expressly directed
the Secretary of HUD to "administer the programs and
activities relating to housing and urban development in
a manner affirmatively to further" the Act's fair housing
policy. 42 U.S. C. § 360S (d) (5) (1970).
Among the steps taken by HUD to discharge its statu-
tory duty to promote fair housing was the adoption of
project selection criteria for use in "eliminating clearly
unacceptable proposals and assigning priorities in fund-
ing to assure that the best proposals are funded first."
Evaluation of Rent Supplement Projects and Low-Rent
Housing Assistance Applications, 37 Fed. Reg. 203
(1972). In structuring the minority housing opportu-
nity component of the project selection criteria, HUD at-
tempted "to assure that building in minority areas goes
forward only after there truly exists housing opportuni-
ties for minorities elsewhere" in the housing market and
to avoid encouraging projects located in substantially
racially mixed areas. Id., at 204. See 24 CFR § 200.710
(1975). See generally Maxwell, HUD's Project Selection
tunities for low-income families and represented that "the Depart-
ment will continue to use its best efforts in review and approval of
housing programs for Chicago which address the needs of low
income families."
17 It was this statutory prohibition that HUD was held to have
violated by its funding of CHA's housing projects. See 448 F. 2d
731, 740.
74-1047-OPINION
18
HILLS v. GAUTREAUX
Criteria-A Cure for "Impermissible Color Blindness"?,
48 Notre Dame Law. 92 (1972). More recently. in
the Housing and Community Development Act of 1974,
Congress emphasized the importance of locating housing
so as to promote greater choice of housing opportunities
and to avoid undue concentrations of lower income per-
sons. See 42 U. S. C. §§ 5301 (c) (6), 5304 (a) (4) (A),
(C) (ii) (1970 ed., Supp. IV); H. R. Rep. No. 93-1114,
at 8.
A remedial plan designed to insure that HUD will
utilize its funding and administrative powers in a man-
ner consistent with affording relief to the respondents
need not abrogate the role of local governmental units
in the federal housing assistance programs. Under the
major housing programs in existence at the time the
District Court entered its remedial order pertaining to
HUD, local housing authorities and municipal govern-
ments had to make application for funds or approve the
use of funds in the locality before HUD could make
housing assistance money available. See 42 U. S. C.
§§ 1415 (7) (b), 1421b (a) (2) (1970). An order di-
rected solely to HUD would not force unwilling localities
to apply for assistance under these programs but would
merely reinforce the regulations guiding HUD's deter-
mination of which of the locally authorized projects to
assist with federal funds.
The Housing and Community Development Act of
18 A HUD study of the implementation of the project selection
criteria revealed that the actual operation of the minority housing
opportunity criterion depends on the definition of "area of minority
concentration" and "racially mixed" area employed by each field
office. The meaning of those terms. which are not defined in the
applicable regulations. 24 CFR § 200.710 (1975). varied among field
offices and within the jurisdiction of particular field offices. Depart-
ment of Housing and Urban Development, Implementation or HUD
Project Selection Criteria for Subsidized Housing: An Evaluation
116-117 (Dec. 1972).
74-1047-OPINION
HILLS D. GAUTREAUX
19
1974, 42 U.S. C. § 1437 et seq. (1970 ed., Supp. IV), sig-
nificantly enlarged HUD's role in the creation of housing
opportunities. Under the §8 Lower-Income Housing
Assistance program, which has largely replaced the older
federal low-income housing programs," HUD may con-
tract directly with private owners to make leased housing
units available to eligible lower-income persons." As
HUD has acknowledged in this case, "local governmental
approval is no longer explicitly required as a condition of
the program's applicability to a locality." Regulations
governing the §8 program permit HUD to select "the
geographic area or areas in which the housing is to be
constructed,' 24 CFR § S80.203 (b), and direct that sites
be chosen to "promote greater choice of housing oppor-
tunities and avoid undue concentration of assisted per-
sons in areas containing a high proportion of low-income
persons." 880.112 (d). 8S3.209 (a) (3) (1975). See
§§ 880.112 (b), (c), 883.209 (a) (2), (b) (2). In most
cases the Act grants the unit of local government in
which the assistance is to be provided the right to com-
19 For fiscal year 1975 estimated contract payments under the
§8 program were approximately $10.700,000 as compared to a
total estimated payment of $16,350.000 for all federal subsidized
housing programs. The comparable figures for fiscal year 1976
indicate that $22,725,000 of a total $24,800,000 in estimated con-
tractual payments are to be made under the §8 program. See
Hearings on Department of Housing and Urban Development-
Independent Agencies Appropriations for 1976, before the Subcomm.
on HUD-Independent Agencies of the House Comm. on Appro-
priations, 94th Cong., 1st Sess., pt. 5, at 85-S6 (1975). See also
id., at 119 (testimony of HUD Secretary Hills).
20 Under the § S program, HUD contracts to make payments to
local public housing agencies or to private owners of housing units
to make up the difference between a fair market rent for the area
and the amount contributed by the low-income tenant. The eligible
tenant family pays between 15% and 25% of its gross income for
rent. Sce 42 U.S.C. $ 1437f (1970 ed,, Supp. IV).
74-1047-OPINION
20
HILLS v. GAUTREAUX
ment on the application and, in certain specified circum-
stances, to preclude the Secretary of HUD from approv-
ing the application. See 42 U. S. C. §§ 1439 (a)-(c)
(1970 ed., Supp. IV).²¹ Use of the §8 program to ex-
pand low-income housing opportunities outside areas of
minority concentration would not have a coercive effect
on suburban municipalities. For under the program,
the local governmental units retain the right to comment
21 If the local unit of government in which the proposed assistance
is to be provided does not have an approved housing assistance
plan, the Secretary of HUD is directed by statute to give the local
governmental entity 30 days to comment on the proposal after
which time the Secretary may approve the project unless he deter-
mines that there is not a need for the assistance. 42 U. S. C.
§ 1439 (c) (1970 ed., Supp. IV). In areas covered by an approved
plan, the local governmental entity is afforded a 30-day period in
which to object to the project on the ground that it is inconsistent
with the municipality's approved housing assistance plan. If such an
objection is filed, the Secretary may nonetheless approve the appli-
cation if he determines that the proposal is consistent with the
housing assistance plan. § 1439 (a). The local comment and ob-
jection procedures do not apply to applications for assistance in-
volving 12 or fewer units in a single project or deyelopment.
§ 1439 (b).
The ability of local governments to block proposed § 8 projects
thus depends on the size of the proposed project and the provisions
of the approved housing assistance plans. Under the 1974 Act, the
housing assistance plan must assess the needs of lower-income per-
sons residing in or expected to reside in the community and must
indicate the general locations of proposed housing for lower-income
persons selected in accordance with the statutory objective of
"promoting greater choice of housing opportunities and avoiding
undue concentration of assisted persons." 42 U. S. C. §§ 5304
(a) (4) (A), (C) (ii). See H. R. Rep. No. 93-1114, at S. See also
City of Hartford V. Hills, - F. Supp. -, Civil No. H-75-258
(Conn., Jan. 28, 1976). In view of these requirements of the Act,
the location of subsidized housing in predominantly white areas of
suburban municipalities may well be consistent with the com-
munities' housing assistance plans.
74-1047-OPINION
HILLS v. GAUTREAUX
21
on specific assistance proposals, to reject certain pro-
posals that are inconsistent with their approved housing
assistance plans, and to require that zoning and other
land use restrictions be adhered to by builders.
In sum, there is no basis for the petitioner's claim that
court-ordered metropolitan relief in this case would be
impermissible as a matter of law under the Milliken
decision. In contrast to the desegregation order in that
case, a metropolitan relief order directed to HUD would
not consolidate or in any way restructure local govern-
mental units. The remedial decree would neither force
suburban governments to submit public housing pro-
posals to HUD nor displace the rights and powers
accorded local government entities under federal or state
housing statutes or existing land use laws. The order
would have the same effect on the suburban governments
'as a discretionary decision by HUD to use its statutory
powers to provide the respondents with alternatives to
the racially segregated Chicago public housing system
created by CHA and HUD.
Since we conclude that a metropolitan area remedy in
this case is not impermissible as a matter of law, we
affirm the judgment of the Court of Appeals remanding
the case to the District Court "for additional evidence
and for further consideration of the issue of metropoli-
tan area relief." 503 F. 2d, at 940. Our determination
that the District Court has the authority to direct HUD
to engage in remedial efforts in the metropolitan area
outside the city limits of Chicago should not be inter-
preted as requiring a metropolitan area order. The
FORD LIBRARY & 028870
nature and scope of the remedial decree to be entered on
remand is a matter for the District Court in the exercise
of its equitable discretion, after affording the parties an
'opportunity to present their views.
The judgment of the Court of Appeals remanding this
74-1047-OPINION
22
HILLS v. GAUTREAUX
case to the District Court is affirmed, but further pro-
ceedings in the District Court are to be consistent with
this opinion.
It is so ordered.
MR. JUSTICE STEVENS took no part in the consideration
or decision of this case.
SUPREME COURT OF THE UNITED STATES
No. 74-1047
Carla A. Hills, Secretary of
Housing and Urban De-
On Writ of Certiorari to the
velopment, Petitioner,
United States Court of
Appeals for the Seventh
v.
Circuit.
Dorothy Gautreaux et al.
[April 20, 1976]
MR. JUSTICE MARSHALL, with whom MR. JUSTICE
BRENNAN and MR. JUSTICE WHITE join, concurring.
I dissented in Milliken V. Bradley, 418 U. S. 717
(1974), and I continue to believe that the Court's de-
cision in that case unduly limited the federal courts'
broad equitable power to provide effective remedies for
official segregation. In this case the Court distinguishes
Milliken and paves the way for a remedial decree direct-
ing the Department of Housing and Urban Development
to utilize its full statutory power to foster housing proj-
ects in white areas of the greater Chicago metropolitan
area. I join the Court's opinion except insofar as it
appears to reaffirm the decision in Milliken.
THE WHITE HOUSE
WASHINGTON
May 21, 1976
Lycun But the
MEMORANDUM FOR DAVE GERGEN
FROM:
LYNN MAY an
SUBJECT:
Housing Recovery in California
The following should be incorporated into the
remarks for California:
"In the past year, housing has improve dramatically, as
has the economy in general. Housing in the West, and
in California in particular, has improved more than the
national average. Over the past year, starts in the
West have risen by about 75 percent, from 200,000 on an
annual rate in the first quarter of 1975 to 349,000 in
the first quarter in 1976.
In California itself, building permits nearly doubled
in the last year, rising from 21,900 in the first
quarter of 1975 to 43,200 in the first quarter of 1976.
In some parts of the State, the increases have been
still more dramatic; permits have quadrupled in San
Jose, and more than doubled in San Diego and in Orange
County.
CC: im Cannon
Jim Cavanaugh
Bob Orben
FORD
THE WHITE HOUSE
Housing 1/31/16
WASHINGTON
May 28, 1976
MEMORANDUM FOR JIM CANNON
FROM:
LYNN MAY hyon
On the attached memo, you asked the status of the construction &
SUBJECT:
State of the Construction Industry
industry in the current economic recovery. According to HUD
economists, the overall picture of the construction industry
nationwide is still below that of 1973-1974, but they attribute
it primarily to the near completion of the Alaska pipeline
(the largest recent single construction project in the
country) and the residual impact of the recession on non-
housing construction.
Although there is no breakdown of housing employment figures
in the general construction statistics put out by BLS, HUD
estimates that housing employment, comprising 1/4 to 1/3 of
all construction industry employment, has improved dramatically
recently, particularly on the basis of the rapid growth of
housing starts since January. I have asked HUD and the
Department of Commerce to supply me with their monthly
figures on housing starts and housing employment estimates.
If you wish to receive these figures, I'd be glad to furnish
them to you.
Attachment
yr
Summing
w
form
FORD LIBRARY j GERALD
THE WHITE HOUSE
WASHINGTON
May 21, 1976
But tho
MEMORANDUM FOR DAVE GERGEN
FROM:
LYNN MAY
SUBJECT:
Housing Recovery in California
The following should be incorporated into the Presidential
gtm
remarks for California:
"In the past year, housing has improve dramatically, as
has the economy in general. Housing in the West, and
in California in particular, has improved more than the
national average. Over the past year, starts in the
West have risen by about 75 percent, from 200,000 on an
annual rate in the first quarter of 1975 to 349,000 in
the first quarter in 1976.
In California itself, building permits nearly doubled
in the last year, rising from 21,900 in the first
quarter of 1975 to 43,200 in the first quarter of 1976.
In some parts of the State, the increases have been
still more dramatic; permits have quadrupled in San
Jose, and more than doubled in San Diego and in Orange
County.
CC: Jim Cannon
Jim Cavanaugh
Bob Orben
FORD LIBRARY & CERALD