Special Report 192

Relocation and Real Acquisition -&-

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TRANSPORTATION RESEARCH BOARD NATIONAL RESEARCH COUNCIL TRANSPORTATION RESEARCH BOARD 1981

Officers THOMAS D. LARSON, Chairman DARRELL V MANNING, Vice Chairman THOMAS B. DEEN, Executive Director Executive Committee Administrator, Federal A viatfon Administration, U.S. Department of Transportation (ex officio) Administrator, Urban Mass Transportation Administration, U.S. Department of Transportation (ex officio) RAY A. BARNHART, Administrator, Federal Highway Administration, US. Department of Transportation (ex officio) ROBERT W. BLANCHETTE, Administrator, Federal Railroad Administration, U.S. Department of Transportation (ex officio) FRANCIS B. FRANCOIS, Executive Director, American Association of State Highway and Transportation Officials (ex officio) WILLIAM J. HARRIS, JR., Vice President, Research and Test Department, Association of American Railroads (ex officio) PETER G. KOLTNOW, President, Highway Users Federation for Safety and Mobility (ex officio, Past Chairman, 1979) ELLIOTT W. MONTROLL, Chairman, Commission on Sociotechnical Systems, National Research Council (ex officio) JOHN F. WING, Senior Vice President, Booz-A lien and Hamilton, Inc., Bethesda, Maryland (ex officio, MTRB) CHARLEY V. WOOTAN, Director, Texas Transportation Institute, Texas A&M University (ex officio, Past Chairman, 1980)

GEORGE J. BEAN, Director of Aviation, Hilisborough County (Florida) A viation Authority THOMAS W. BRADSHAW, JR., Secretary, North Carolina Department of Transportation RICHARD P. BRAUN, Commissioner, Minnesota Department of Transportation ARTHUR J. BRUEN, JR., Vice President, Continental Illinois National Bank and Trust Company of Chicago LAWRENCE D. DAHMS, Executive Director, Metropolitan Transportation Commission, Berkeley, California ADRIANA GIANTURCO, Director, California Department of Transportation JACK R. GILSTRAP, Executive Vice President, American Public Transit Association MARK G. GOODE, Engineer-Director, Texas State Department of Highways and Public Transportation WILLIAM C. HENNESSY, Commissioner of Transportation, New York State Department of Transportation ARTHUR J. HOLLAND, Mayor, Trenton, New Jersey JACK KINSTLINGER, Executive Director, Colorado Department of Highways MARVIN L. MANHEIM, Professor, Department of Civil Engineering, Massachusetts Institute of Technology DANIEL T. MURPHY, County Executive, Oakland County, Michigan RICHARD S. PAGE, General Manager, Washington (D.C.) Metropolitan Area Transit Authority PHIUP J. RINGO, Chairman of the Board, ATE Management and Service Co., Inc., Cincinnati MARK D. ROBESON, Chairman, Finance Committee, Yellow Freight System, Inc., Overland Park, Kansas GUERDON S. SINES, Vice President, Information and Control Systems, Missouri Pacific Railroad, St. Louis JOHN E. STEINER, Vice President, Corporate Products Division, Boeing Company, Seattle .1

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Spedal Report 192' Relocation and Real Prope" Acquisition

Proceedings of conference. sponsored by 'the Federal Highway Administration and conducted by the Transportation Research Board•

Transportation Research 136ard S Commission on Sociotechnical Systems National Research Council

NATIONAL ACADEMY OF SCIENCES Washington, D.C. 1981 Transportation Research Board Special Report 192 Sponsorship of This Transportation Research Board Special Report Price $5.80 Edited for TRB by Brenda J. Vumbaco GROUP 1—TRANSPORTATION SYSTEMS PLANNING AND ADMINISTRATION modes Leon M. Cole, Library of Congress, chairman 1 highway transportation 2 public transit Social, Economic, and Environmental Factors Section Clarkson H. Oglesby, Stanford, California, chairman subject area 15 socioeconomics Technical Review Panel for the Conference on Relocation and Acquisition Transportation Research Board publications are available by order- Chairman: Hays B. Gamble, Pennsylvania State University ing directly from the board. They may also be obtained on a regular Members: basis through organizational or individual supporting membership in David L. Alberts, National Association of Housing and Redevelop- the board; members or library subscribers are eligible for substantial ment Officials discounts. For further information, write to the Transportation Re- Allen R. Austin, Illinois Department of Transportation search Board, National Academy of Sciences, 2101 Constitution Jon E. Burkhardt, Ecosometrics, Inc. Avenue, N.W., Washington, DC 20418. Joseph A. Fogarty, New York State Department of Transportation Beverlyn Lundy, Friends Neighborhood Guild Frances M. Lunney, Arlington County Government Housing Services Notice Section The project that is the subject of this report was approved by the Bruce D. McDowell, Advisory Commission on Intergovernmental Governing Board of the National Research Council, whose members Relations are drawn from the councils of the National Academy of Sciences, Walter A. McFarlane, Attorney General's Office of Virginia the National Academy of Engineering, and the Institute of Medicine. Falcon A. Morgan, Louisiana Department of Transportation and The members of the committee responsible for the report were cho- Public Works sen for their special competence and with regard for appropriate balance. Liaison Representatives This report has been reviewed according to procedures approved Max Foilmer, U.S. Army by a Report Review Committee consisting of members of the Na- Melvin Geffner, U.S. Department of Housing and Urban Develop- tional Academy of Sciences, the National Academy of Engineering, ment and the Institute of Medicine. David R. Levin, Federal Highway Administration The views expressed in this report are those of the individual Robert B. Thurber, U.S. Department of Transportation authors and do not necessarily reflect the views of the committee, the Transportation Research Board, the National Academy of Transportation Research Board staff Sciences, or the sponsors of the project. Floyd I. Thiel Stephen E. Blake

Library of Congress Cataloging in Publication Data The organizational units, officers, and members are as of National Research Council. Transportation Research Board. December 31, 1980. Relocation and real property acquisition. (Special report/Transportation Research Board, Commission on Sociotechnical Systems, National Research Council; 192) Papers presented at a conference held July 7-9, 1980 in Reston, Va. 1. Eminent domaln—United States—Congresses. 2. Relocation (Housing)—United States—Congresses. 3. Acquisition of property— United States—Congresses. 4. Real property—United States— Congresses. I. United States. Federal Highway Administration. II. National Research Council (U.S.). Transportation Research Board. III. Series: Special report (National Research Council (U.S.). Transportation Research Board); 192. HD1 262.R44 333. 1'3'0973 81-3970 ISBN 0-309-03120-6 AACR2 ISSN 0360-859X Contents Preface .

Part 1: Conference Highlights ...... Conference Summary and Highlights ...... 2

Part 2: Keynote Addresses ...... 5 Uniform Relocation Policies in the 1980s ...... 6 Relocation and Property Acquisition: Experience, Problems, and Prospects...... 7 Problems in Implementation of the Uniform Relocation Act ...... 13

Part 3: Workshop Reports ...... ...... 19 Summaries of Workshop Discussions ...... 20 Eligibility for Relocation Assistance ...... 20 Relocation Payments and Services ...... 21 Processes for Greater Uniformity ...... 24 Property Acquisition ...... 26 Impact of Relocation on People, Businesses, and Communities ...... 27

Part 4: Resource Materials ...... 29 Relocation Issues of Concern to the U.S. Department of Transportation...... 30 What's Wrong with the Uniform Act? ...... 33 Relocation Assistance Problems and Prospects ...... 35 Scope of GSA Acquisition and Relocation Program...... 36 State Perspective of Problems and Prospects ...... 37 Real Property Acquisition and Relocation Assistance in New York ...... 38 Relocation Assistance Program in Oklahoma ...... 40 Relocation Assistance in New Jersey ...... 40 Relocation Needs As Seen by Portsmouth Housing and Redevelopment Authority ...... 41, Proposed Revisions in the Uniform Relocation Act ...... 42 Relocation and Real Property Acquisition Implementation by Counties ...... 43 CondemnationBlight ...... 43 CaseStudies ...... 45 Part 5: Participants ...... 49

111 Preface

In October 1969, the Transportation Research Board's To identify problems that arose from carrying (TRB's) Committee on Economic, Social, and Environ- out such programs; and mental Factors of Transportation conducted a confer- To suggest approaches to solving these ence on relocation. The work of this conference was problems and to seek ways to improve the overall made available to the U.S. Congress, which passed effectiveness of the relocation and real property the Uniform Relocation Assistance and Real Property acquisition program. Acquisition Policies Act in 1970. The purpose of this act was to provide fair and equitable treatment In attendance were some 98 representatives of (including relocation assistance) to all individu- federal, state, and local public agencies from all als, families,.and businesses displaced by federally over the country, as well as consulting firms, funded projects. However, many concerns have been academia, and private-interest citizen groups. expressed since passage of this legislation about The conference consisted of a group of five work- the differences in procedures and the manner in shops in which conferees examined the problems in- which the act is administered by the states and the volved in relocation and real property acquisition. various federal agencies. These workshops focused on (a) eligibility, (b) re- In view of these concerns and because Congress location payments and services, (c) relocation pro- was considering revisions to the 1970 legislation, a cess, (d) property acquisition, and (e) adjacent- meeting was called in 1978 of representatives from a area impacts. number of federal agencies and other professionals This report is based on summaries of the plenary to see if a second conference on relocation would and workshop sessions prepared by the individual serve a useful purpose. Such a conference was workshop and plenary session chairmen and submitted approved. after the conference to the Technical Review Panel The second conference on relocation and real for the Conference on Relocation and Real Property property acquisition took place July 7-9, 1980, in Acquisition. The report presented here reflects the Reston, Virginia. The meeting was conducted by TEB consensus of the conference's participants on issues and sponsored by the Federal Highway Administration and problems examined during the three-day meeting. (FHWA), U.S. Department of Transportation (DOT), in The conference summary and highlights section (Part cooperation with the U.S. Department of Housing and 1) contains suggested actions that address these Urban Development (HUD), U.S. Army Corps of issues and problems. The report was reviewed and Engineers, Advisory Commission on Intergovernmental approved by the Technical Panel prior to its Relations, American Association of State Highway and publication. Where appropriate, dissenting views on Transportation Officials, and International Right- related issues and problems are stated. of-Way Association. It had the following objectives: This proceedings also includes the remarks of the conference's three keynote speakers, summaries of 1. To examine the experiences of federal, state, each workshop and plenary session discussion, and and local officials in implementing relocation and resource materials. real property acquisition programs; Part 1 Conference Highlights Conference Summary and Highlights

Hays B. Gamble

The Second Conference on Relocation and Real Prop- Some agencies do not cooperate in jointly erty Acquisition, held on July 7-9, 1980, in Reston, funded projects; Virginia, focused attention on (a) experience with Terms in the 1970 act should be clarified-- existing local, state, and federal relocation and for example, (a) a clear statement defining persons acquisition programs; and (b) suggestions by confer- indirectly affected is needed, (b) what is meant by ence participants for improvements to existing regu- all possible measures to minimize disruption must be lations and procedures. clearly stated, and (c) what constitutes improve- In 1970, the U.S. Congress passed the Uniform ments to land (must be included with acquisition of Relocation Assistance and Real Property Acquisition land) should be spelled out; and Policies Act (P.L. 91-646). Before this act became Court decisions, in which remedies to some law, different federal agencies had different of the above problems are sought, are currently made provisions for property acquisition and relocation; on an ad hoc basis. some agencies offered no relocation assistance. Thus, different persons displaced by federal actions To rectify shortcomings of the existing act and or state and local projects receiving federal aid to remove some of the remaining barriers to received unequal treatment, depending on which uniformity, Congress is giving serious consideration program displaced them. The purpose of the 1970 act to amendments to the 1970 legislation. One of the was to transform this situation into something more principal bills proposed is Senate bill S.1108 for rational and more equitable for the people affected, which hearings have been held. Some of the main and easier to administer. features of this proposed legislation are noted here. In one of the keynote papers at this conference, Jon Burkhardt summarizes his study on some of the Designate a single agency to promulgate effects that the 1970 act has had on the relocation uniform relocation procedures. process. Burkhardts most significant findings Expand the scope of coverage benefits to all included the following: federally assisted developments. Increase the maximum benefits available from Relocatees fare better than they had ex- $15 000 to $25 000 for replacement housing and from pected (only 26 percent thought they lost money dur- $4000 to $8000 for renters. ing the process); Provide relocation benefits for business. About two-thirds of the relocatees are Permit landowners to request a second ap- generally satisfied with their relocation experience praisal. after it is over; and Current compensation practices do not From the Senate hearings held for this bill, discriminate against any particular group, but several important controversies have emerged. These elderly relocatees suffer more than most because center on (a) the blanket extension of benefits to many factors in their situations are not compensable. persons indirectly displaced; (b) ways in which state and local officers can substitute periodic Thus. although it appears that the 1970 act has rent payments for lump sum relocation payments; and resulted in substantial progress and improvement, (c) the likelihood of establishing a new federal problems remain. Some of the obstacles to bureaucracy that would have central authority over uniformity that remain include relocation and land acquisition. The main attention of the conference centered on Interpretations of the 1970 act vary because ways to improve uniformity and meet the shortcomings regulations were left up to the individual agency; of current and proposed legislation. Conferees par- Some supplemental federal laws affect indi- ticipated in five workshops that addressed a variety vidual programs differently than under the Uniform of relevant topics. The principal suggestions that Act; emerged from the workshops, discussed next, can be State laws differ (e.g., New York precludes grouped into six main topical areas. These are more last-resort housing); uniformity, expanded eligibility, adequate pay- Field interpretations of whatever regula- ments, improved treatment of businesses, improved tions apply are not consistent; relocation assistance services, and project planning Some federally funded programs are not processes. Those suggestions that did not appear to subject to the existing law; have a clear consensus among the participants are so All displacements resulting from federal indicated. programs are not covered; Donated lands are accepted by some federal MORE UNIFORMITY agencies prior to appraisal, which is illegal; Administrative appeals remain difficult in 1. A majority of the participants felt there some agencies, despite interagency guidelines to was a real need for more uniformity in benefits and alleviate this; procedures. Many suggested a single agency to Treatment of business relocation varies enforce a standard set of federal regulations. widely among agencies; However, there was strong concern expressed over the possibility of creating a new bureaucracy that might TRB Special Report 192

interfere with effective administration by exhorbitant, but some additional help should be individual program agencies. provided, such as increasing the "in lieu" payment The various state statutes should be for displaced businesses that do not continue in clarified concerning the acquisition of uneconomic business at a new location, or early acquisition of remainders. the entire business as a going concern in hardship Project boundaries should be defined to cases. include all areas severely impacted. Business relocation should be timed so as to Greater coordination among agencies, approximately coincide with the relocation of the interested groups, and citizens should be encouraged patrons. before project adoptions. It would be helpful to businesses to provide a replacement facility before requiring the business EXPANDED ELIGIBILITY to move.

Eligibility for benefits should include IMPROVED RELOCATION ASSISTANCE SERVICES involuntary displacements whenever any federal funds are involved, such as loans and grants. The conferees generally agreed that the Eligibility should commence when negotia- whole relocation and acquisition process could be tions for property begin. improved if better relocation assistance were Displacees should be those involuntarily provided to homeowners, tenants, and businesses. displaced as a result of programs, but flexibility Relocation assistance should be limited to those should be maintained to work out individual persons who have property taken. solutions for nearby . The quality of relocation services needs to Indirect displacements (in the vicinity of be improved. Some ways •suggested were (a) prepare federally funded projects) should not be covered better training and guidance manuals for agency except as "consequential damages." personnel, (b) define and limit the scope of relocation services, (c) more closely monitor and ADEQUATE PAYMENTS evaluate such services, (d) develop a set of professional standards for agents, and (e) improve Payments to residents and businesses should reference sources. be increased; the majority felt payment limitations should be eliminated. The fixed payment for moving PROJECT PLANNING PROCESSFS expenses should be increased from $300 to $600, and the dislocation allowance should be increased from The relocation of elderly people should be $200 to $400. avoided wherever possible. Payments should be made more promptly. more innovative ways should be found to Rent supplements should be paid over a provide "last-resort" housing. longer time period. "Housing of last resort" needs clarification Interest payments should be increased, by Congress to avoid thrusting nonhousing agencies primarily an up-front payment to reduce the amount into a housing management role. of a new mortgage principal required, so that new There is a need to better define what is monthly mortgage payments are similar to old ones. meant by "a project." A larger, longer, or more flexible subsidy One-for-one housing is needed, particularly is needed to correct inadequacies in rental for low-income people. assistance. More improvements (e.g., shrubs) should be Interim financing for homeowners prior to permitted to be moved. receiving their replacement payments would be Minimum displacement should be viewed as a desirable. goal, just as avoidance of harmful environmental, Adequate compensation should be given to social, ecological, and energy effects are sought. tenants for improvements to structureè and land made The analysis of relocation problems in an by them. environmental impact statement needs to be upgraded. The conferees agreed that the $2000 down B. The conferees did not support the "good payment to enable a tenant to become an owner should faith" requirement as proposed in S. 1108, which be eliminated. calls for replacing residency requirements of 90 The conferees did not agree with the days for tenants and 180 days for homeowners. suggestion that a landowner be permitted to obtain a It was suggested that, if the offer to take "second" appraisal if he or she disagrees with the was made at the same time as the offer for condemnor's original appraisal (which usually relocation assistance, total compensation can be includes more than just an appraisal). made "just." The conferees did agree that a landowner Services removed from low-income neighbor- should be shown only a summary of the appraisal of hoods should be replaced. his or her property, and not the whole appraisal. People expected to be impacted by a project The conferees did not concur with the idea should be notified early in the process, while that relocation payments be increased (a) to cover alternatives are still being considered. higher property taxes, or (b) to reflect increases It is important to communicate with adjacent in the consumer price index. property owners early in the planning process.

IMPROVED TREATMENT OF BUSINESS Conference participants agreed that there is a need for legislative action, that regulations need Conferees agreed that relocation assistance to be revised, and that better performance in the for businesses could be much improved by greater field is required. It is hoped that the work of availability of low-interest loans and specialists this conference, as reported in these proceedings, trained in business relocation. will assist the responsible agencies and groups in The conferees also felt that businesses determining or planning future action related to could not be made whole because costs could be relocation and real property acquisition. Part 2 Keynote Addresses Uniform Relocation Policies in the 1980s

John J. Callahan and Dru Smith

The original Uniform Relocation Assistance and Real relocation act benefits to all persons displaced as Property Acquisition Policies Act of 1970 had a a result of federal activities, whether the commendable goal: To bring order and consistency to displacement is done directly by a federal agency or programs designed to compensate people displaced by through some private agency operating with eminent projects undertaken with federal funding. Many of domain powers granted by a state authority or by a the policies and legal initiatives that were state or local government agency. developed by FHWA's relocation assistance program Third, the act seeks to update the economic value during the 1960s were reflected in this act. of relocation benefits paid to businesses and Unfortunately, the framework established by the individuals displaced by federal activities. original act needs some shoring up. Changes are The ceiling for moving and related expenses is needed in the act to ensure that its application is raised to $1000 from the current potential payment as uniform as its title suggests. of $500. Lump sum payments to displaced businesses Recent court cases interpreting this law have are raised to $20 000. Replacement costs are raised revealed that it is riddled with loopholes and for homeowners up to $25 000 over and above the inconsistencies. These court decisions and federal costs of acquisition. Payments to assist displaced agency interpretations based on the 1970 law have renters in finding comparable housing at reasonable challenged Congress to take action to clarify its cost are raised to up to $8000. intentions about the scope of the act's coverage. All these changes are made with the intention of Consequently, S. 1108 was drafted to deal with the keeping the economic value of relocation benefits inequities of the existing Uniform Relocation Act. current with recent economic trends. As introduced, S. 1108 has several main goals. A final key element of the act states that it is First, it is designed to bring about greater the congressional intent to minimize displacement uniformity in relocation regulations and policy. wherever possible. It recognizes the fact that dis- Building on a detailed report by the U.S. General placement, if minimized constructively, can be of Accounting Office (GAO) on the subject, S. 1108 substantial benefit to the local community. It rec- authorized the president to designate a single ognizes that displacement is exceedingly traumatic agency to promulgate uniform relocation procedures for many members of a community--particularly those and regulations. The GAO study found that the 15 people who are elderly or poor. It makes a sensible federal agencies charged with relocation had statement that, where local and state authorities anything but uniform policies for relocation. They can constructively minimize displacement, the accep- found that the interagency committee originally tance of the development process by the community created to bring about uniformity among the agencies where it takes place will increase. met only about three times during its four years of In brief, S. 1108 as introduced provides for the existence. They also found that agencies followed creation of a truly uniform relocation process with very different policies in providing outreach to the guarantee of realistic relocation benefits that local communities about relocation benefits, in are adequate to the times. making payments under the housing of last resort provisions, and the like. S. 1108 HEARING RECORD In short, the Uniform Relocation Act is no longer uniform--in large measure because the Executive We found that drafting such a constructive piece of Branch has not committed itself to making the act legislation was not quite the easy task that we uniform. thought it was. The subcommittee on intergovern- Second, the act seeks to expand the scope of the mental relations held three days of hearings on the coverage for relocation benefits to all federally bill and heard from more than 30 witnesses repre- assisted developments, insofar as it is feasible to senting housing consumer advocates, private develop- do so. Because of a drafting irregularity in the ers, and state and local officials directly con- 1970 law, major legislation passed since 1970 has cerned with the redevelopment process. been exempted from the provisions of the Uniform As a result of these hearings, it is abundantly Relocation Act. clear that it will be difficult to draft legislation Thus, the federal courts have taken the position to meet the interests of all. Some of the housing that benefits for relocation need not be paid when consumer groups would like to see S. 1108 displacement is caused by activities undertaken with transformed into an omnibus bill that will give funding through the 1974 community development block benefits to all displacees, which some estimates grant program. Consequently, thousands of people place at more than a half million annually, whether displaced by federally-assisted projects in St. or not this displacement be directly or indirectly Louis, in Washington, D.C., and in other parts of caused by federal activities. At the end of the the country have found that they were not eligible spectrum there are private developers who wish to for relocation benefits. see little or no change in the act, contending that Even federal court opinions upholding these any increased development costs will markedly affect exemptions stressed that Congress might wish to their redevelopment efforts to the point where reconsider uniform relocation legislation to broaden relocation costs could severely impede the urban coverage and protect the economic and social development process. interests of displacees. Thus, S. 1108 extends In between these two groups are found those who TRB Special Report 192

wish to see some revision in the Uniform Relocation should be the federal policy to have minimal Act, but who also wish to see some of the sweeping displacement in federally-assisted programs, I am language in the current bill modified in a way to confident that the report language on the bill will support and not impede current development indicate that it is not the intention of. S. 1108 to activities, whether they be in the housing, otherwise halt or delay federal projects that are of transportation, or public works area. substantial economic benefit to the local community. I think that it is correct to say that we have In short, the hearing record on S. 1108 helps us benefited from all these comments and that S. 1108 to realize that we must update and revise the will undergo significant revision before it is Uniform Relocation Act to provide more current and reported from the full governmental affairs more equitable benefits to those displaced by committee. federal projects while at the same time not halting positive redevelopment efforts. S. 1108 is not POSSIBLE CHANGES IN S. 1108 intended to bring highway or urban development projects to a standstill. The many suggestions that What, then, may be some of the principal changes we heard at our hearings will result in a better made in S. 1108 as a result of congressional bill as we near mark-up of this legislation. hearings? First, I think that we all now recognize the dif- WHERE DO WE GO FROM HERE? ficulty of extending relocation benefits to those "indirectly" displaced by federally-assisted proj- Having given you a chronology of the Uniform ects or programs. We would hope that where there is Relocation Act legislation, you might ask where do a strong connection between the displacement of bus- we go from here? As transportation officials you inesses or individuals and the undertaking of a fed- are involved daily with the process of major public erally-assisted program or project that agencies works planning. You know the economic and social would provide relocation benefits. However, a importance of your work. At the same time, you blanket extension of benefits to "indirect" dis- know, many of you first-hand, the anguish that can placees is probably too sweeping to be put into the be caused in the relocation process. relocation act amendments. The Uniform Relocation Act was built in no small Second, I am sure that the subcommittee will look measure on the policy initiatives of FHWA in the favorably on increasing the value of relocation 1960s. And your charge must continue to be: To benefits but will also explore ways in which the build a fair, modernized, and manageable relocation costs of such increased benefits can be handled by process. state and local governments. Housing redevelopment In that vein, I would submit that as we move to officials have suggested that they be permitted to mark up S. 1108, we would like your support for the substitute Section 8 rental housing benefits in lieu subcommittee's effort to revise this law. of lump sum relocation payments. Such an approach Let's make the act more uniform. Let's build might be profitable if this eases the burden of more realistic benefits into the law. Let's iron providing relocation benefits and if it helps out the rough spots in its administration. But more tighten up the probability that relocation benefits important, let's once again ensure that the federal are in fact used for purchase or rental of decent government will •honor its basic commitment to aid housing. those it must displace in the performance of its Third, while the uniform relocation amendments development policies. will still contain language indicating that it

Relocation and Property Acquisition: Experience, Problems, and Prospects Jon E. Burkhardt

Ten years have passed since the enactment of the and compensation. These issues are not new, but Uniform Relocation Assistance and Real Property social attitudes seem to be shifting in ways that Acquisition Policies Act of 1970. Although this act will change appropriate responses of various levels has provided very significant improvements to of government. Second, this., paper also presents previous procedures, the experience with the act some of the key findings of- a' study conducted with over the last 10 years has indicated the need for individuals displaced from their homes by highway additional modifications and improvements. In fact, projects because their- experiences illuminate a Congress now has before it nearly a half-dozen number of the controversial relocation issues facing different proposals on ways to amend the 1970 law. us today. This review of' experience, problems, and We are faced with the need and the opportunity to prospects should help us focus on practical review the operations of current policies and improvements to relocation procedures. practices and to provide guidance for the changes that are apparently coming, whether we act or not. BASIC CONCEPTS AND CONSIDERATIONS This conference provides a chance to review and redefine what constitute appropriate relocation Despite rather considerable, efforts to resolve practices and procedures. certain questions, these questions seem to be in the This paper reviews some basic philosophical and re-resolution process yet one, more time. They legal questions concerning the nature of relocation include (a) Has a taking occurred? (Has an TRB Special Report 192 individual suffered as a result of government Net negative impact--the loss is not likely actions?) (b) What is just compensation? and (c) Is to be offset by benefits resulting from the public compensation possible (if not, can the taking be improvement and likely to be distributed in the same justified)? In these questions and in the rather way as the loss itself. considerable body of literature surrounding them, several concepts reappear again and again, including These tests should be kept firmly in mind as a guide to the deliberations on possible changes in reloca- property, tion practices. One additional test could also be taking, added to this list--i.e., significance to the relo- "just" compensation, catee--and the significance of this additional test equity and fairness, can be illustrated by the following material. societal risk, causality, and EFFECTS OF RESIDENTIAL DISPLACEMENT distribution of effects. The primary objective of the study (3) was to im- This list obviously could be much longer. if prove the highway planning process; first, by in- agreement on these concepts were obtained, much of creasing the planner's ability to forecast the dis- the discussions we are about to embark on would be location consequences of particular location and de- unnecessary. sign decisions, and, second, by suggesting tech- Perhaps the basic assessment of the problem we niques for more adequately compensating the persons face was best addressed by Michelman (1): adversely affected by right-of-way acquisition. The study found that specific dislocation When a social decision to redirect economic consequences of alternative route and design resources entails painfully obvious opportunity proposals cannot be accurately predicted by using costs, how shall these costs ultimately be data concerning the characteristics of the displaced distributed among all the members of society? households, the communities, or the projects. Shall they be permitted to remain where they fall Compensation practices and relocation procedures initially, or shall the government be paying have more of an effect on the nature and extent of compensation, make explicit attempts to changes incurred by relocatees than do demographic [rejdistribute them...? or geographic characteristics. The conclusion from this particular finding is that current compensation Michelman began to answer some of these questions by practices do not discriminate for or against any noting that particular population subgroup. However, the el- derly are more likely to be worse off after the move fairness ... demands. . .assurance that society than others--not because of compensation practices will not act deliberately so as to inflict but because of factors that are essentially noncom- painful burdens on some of its members unless pensable. Therefore, planning procedures to avoid such action is "unavoidable" in the interest of disrupting large concentrations of the elderly are long-run, general well-being. Society violates required. that assurance if it pursues a doubtfully The relocation process appears to work well for efficient course and, at the same time, refuses about two-thirds of those forced to move. Almost compensation for resulting painful losses. one-half of those relocated feel the relocation process is as good as possible. The actions of the Still the most readable and complete summary of relocation agency personnel significantly influence the requirements for compensation is that set forth the average satisfaction level upward or downward. by Downs (2). He proposes seven "tests for The elderly and higher-income households feel that compensability of losses," noting that "if losses do relocation worsened their overall condition more not pass these tests, I believe they are either not often than do other persons. Thus, although the deserving of compensation, or else no practical relocation process works well for many persons, means of providing it can be arrived at." certain improvements are still required. The seven tests are Overall Research Approach Attributability--the loss concerned is in fact caused by the public project or the relocation The overall approach centered on interviews with generated by it, rather than by other economic or persons who had actually been through the relocation social forces; process--both before and after relocation--to Significance--the loss is relatively large collect information on changes in their status and both absolutely or in relation to the economic to see which changes could be attributed to the capabilities of those persons who suffer it; relocation process itself. The sample of persons Noninherent riskiness--the loss cannot be interviewed was large enough to be statistically considered an inescapable risk of property representative of persons being relocated at sites ownership, or an inevitable price of progress in a that, in turn, generally represented the relocation dynamic society; experiences of the country as a whole. Because Identifiability--the individuals or class of particular sites tend to have unique characteristics people who suffer the loss can be personally (some of which are created by state policies and identified; procedures), information was also collected about Measurability--the magnitude of the loss can each site and its relocation process. be measured or estimated with reasonable accuracy, Six sites were studied intensively for more than at least sufficient to design roughly offsetting two years. Data were gathered from household sur- beneficial actions; veys and secondary sources. Only the dislocatees Deliverability--compensation made for the were re-interviewed due to constraints on the loss by public authorities can be accurately study's budget. The sites included several differ- directed at those who suffered that loss, whether ent neighborhood types and socioeconomic groups. they are individuals or an entire class of persons, The first survey was conducted in both the area and will not be received by others who did not contained in the proposed right-of-way and in the suffer any such loss; and land adjacent to the right-of-way. The second TRB Special Report 192

survey traced the individuals and families who were o significant compensation constraints no relocated and re-interviewed them to assess the operate in the relocation process. First, 16 consequences of their relocation and their attitudes percent felt that the time available was not toward the relocation process and agency. Many of adequate. One-quarter of this group felt they would the household socioeconomic data collected in the move again within the next two years. The second second survey were identical to those collected in problem was the slowness in payments due to the the first survey and included income, tenancy, relocatees. This created temporary hardships for 6 housing characteristics, family composition, percent of the sample. employment, and family shopping, business, and There was no evidence of a substantial change in social activities. Additional data were collected transportation costs for the households in our concerning the contacts and relations with the sample after they had been relocated. This was not relocation agency, attitudes toward the mechanics of surprising since the average households relocated the relocation process and the relocation agency, moved only 5 km (3 miles) on the average from their problems and issues encountered in the relocation previous locations. Distances traveled generally process, attitudes and reactions to the quality and decreased even though people traveled more often sufficiency of the compensation received, and the outside the neighborhood than before. Work trips families' long-run condition and prospects of their are typical of post-relocation transportation new location. patterns: Fewer of both the longest and shortest work trips occurred after the move. Frequencies and Timing of Interviews costs were the same before and after.

The two surveys were conducted at the six sites Overall Household Effects approximately 18 to 24 months apart. The initial survey was conducted after specific locations had A dilemma of relocation that has remained unsolved been determined and the right-of-way requirements for some time is as follows: If (as experience had been detailed. Relocation was scheduled to take shows) a household is in a better after place no later than six to eight months after the relocation but is paying a greater proportion of the first survey to give relocatees four to six months' household's income for housing than before the move, time to become oriented to their new location before is that household better off or worse off (4,5)? the re-interview survey. In fact, the second wave The relocatees were asked, "Considering all the was conducted much later than initially planned things about your new home--how much it costs, how because relocation did not take place on schedule at big it is, the neighborhood, and everything--would several sites. you say that you.are better off, the same, or worse off than you were in your old home?" Some 60 Interviews Obtained percent of the respondents were more pleased with their new homes than the old, while the reverse was Some 390 valid questionnaires were obtained from true for 27 percent. The results varied households to be relocated before their dislocation; considerably from city to city. Improvements in 190 of the same households were re-interviewed after housing, welfare were significantly correlated with they had established themselves at new locations perceptions of the new neighborhood as better than (because households were not relocated as quickly as the old, the sufficiency of relocation information, expected). Only 54 percent of the original sample the positive effect of the total compensation was available for interviewing, and 49 percent package, and the positive long-run effects of the furnished valid interviews (a completion rate of 90 move. Improvements in housing welfare were not percent of available respondents). Also, 159 significantly correlated with basic demographic residents of the remaining neighborhood were variables, including age, income, sex, , or interviewed at the same time as those households rate. Location (the specific city) was also a about to be dislocated. significant variable. For homeowners, it. was possible to establish a Findings: Experiences of Relocated Households statistically sigrrificant relation explaining half of the variance in housing welfare by using age, Most of those persons who were displaced and income, satisfaction with the house itself, and the relocated had never experienced such a situation assessment of relocation assistance and adequacy of before and did not know what to expect. Afterward, information. Age and income were negatively related many persons had positive feelings about the to increases in housing welfare, which is to say relocation process. This section discusses their that older persons tended to fare worse in experiences in terms of specific dislocation relocation, as did those with higher incomes. effects, the relocatees' view of the compensation Some 70 percent of the respondents felt they and assistance they received, and their personal would be better off in the long run, 20 percent evaluations of the relocation process. thought they would be worse off, and 10 percent did not know. Age, race,, income, satisfaction with the Dislocation Effects new home, sufficient assistance from the relocation department, and clear information from the Economic Effects relocation department were significant variables in explaining long-run expectations. The study considered specific components of location transfer costs, among them search costs, moving Social Effects costs, and compensation constraints, and found that, as expected, these costs were much less significant Social impacts are impacts on people. The basic in the eyes of the relocatees than other monetary unit of measurement is the number of people issues (3). None of the households contacted after affected. Mostv social impacts focus on how people the move felt that search costs were a burden to interact with others and how the interaction them (although most would not have incurred such patterns change over time (6-12). costs on their own volition) and only 1 percent of We found that, of the six components of the the sample reported that the current moving Neighborhood Social Interaction Index (13), five of allowances were inadequate for them. them decreased. Only the commitment to staying in 10 TRB Special Report 192 their new neighborhood was not different than their moving and everything else make your new housing commitment to stay in the old one. Neighboring, use situation better, worse, or the same as your old of local facilities, participation in neighborhood housing situation?", 58 percent said it was better, activities, identification with the neighborhood, 19 percent said it was the same, and 22 percent and the evaluation of the neighborhood as a place reported a worse situation. There were substantial for persons like themselves to live all declined city-to-city variations. after relocation. After relocation, the percentage of persons with Total Compensation all or most of their friends in the neighborhood de- When asked how they felt about the total amount of clined dramatically, while the percentage of persons compensation received, the responses varied widely with none of their friends in the neighborhood in- from site to site. Overall, 35 percent said they creased substantially. Before they moved, more than half of the relocatees felt that the changes to "came out as good as possible," 39 percent "came their old neighborhood were for the worse, while out even," and 26 percent "lost money." one-quarter said there was no significant change. After relocation, one-half of the respondents felt Overall Attitudes Toward Compensation and Assistance that the highway-related changes had a negative ef- The following factors stand out as key variables in fect on the neighborhood. Persons who felt that the the responses to various questions about compensa- neighborhood had deteriorated tended to feel that tion: way strongly. satisfaction with the new dwelling, Changes in Psychological Well-Being adequacy of assistance and information, clarity of information, The framework for representing the level of psycho- attitudes of highway personnel, logical well-being of an individual consisted of two price paid for the former dwelling, dependent variables (life satisfaction and happi- total funds received, and ness-unhappiness) and also included four factors future expectations. (independent variables) that could be expected to influence the level of psychological well-being fol- These factors indicate the interrelation of the so- lowing relocation: three sets of individual charac- called subjective aspects of relocation with atti- teristics (socioeconomic, psychological, and stress) tudes toward the so-called objective factors--that and the relocation project characteristics. [The is, money. The general lack of demographic vari- reader is referred to the full report (3) for fur- ables in the correlations and regressions indicates ther details.] that compensation is being equally distributed among The measure of life satisfaction showed a very all types of people. To the extent that they are slight (2 percent) increase, while the measure of required, compensation changes should focus on prac- happiness showed a 10 percent decline for those re- tices and prices. located. These changes were difficult to explain or predict, but certain socioeconomic characteristics Personal Evaluations of Relocation Process and relocation project constraints had more influ- ence than other factors; especially, level of in- many of those displaced found themselves better off come, source of income, education, age, the adequacy as a result of the move. In fact, the relocation of payments received, size of the new dwelling and process seems to have worked well for almost whether or not it was owned or rented, the desirable two-thirds of those interviewed both before and features of the new neighborhood, and differences in after relocation. However, some people complained project sites. To avoid negative psychological ef- bitterly about changes in their lives that they fects, the relocation agency should maximize the attributed to their uprooting. The responses significant relocation process factors shown to be indice that, while the 1970 Uniform Relocation Act significant--payments for the previous dwelling, the made many significant improvements to relocation quality of the post-relocation neighborhood, and the practices, room for improvement still exists in both amount of information available to relocatees. The the letter of the law and its application. number of elderly persons being relocated should be The intercorrelations of the relocation process minimized. variables were examined, and it was found that if a person had received enough money for relocating and Compensation and Assistance had moved to a better neighborhood, then everything else seemed to be positive. The overall adequacy of The relocatees reported generally favorable reac- compensation received and the adequacy of informa- tions to the compensation and assistance received, tion and assistance were often associated with the just as they had concerning the dislocation ef- values of other process variables. Once again, it fects. Within this generally positive response is remarkable that demographic characteristics were there were, however, some substantial site-to-site not significantly correlated with relocation process variations. assessments, as was also true for assessments of compensation. The long-run expectations were de- Prices Paid for Dwellings Taken pendent on a greater variety of factors than were other expectations. "Bad events" and attitudes of The expectations of homeowners did not often match the relocation personnel also had high correlations the actual payments for dwellings owned by the with a number of factors. respondents. Expectations most often matched the Several lessons are apparent here. The first is payments in two sites were 60 percent received what the interrelated nature of many of the relocation they expected. In one site, three-quarters of the process variables. The second is the significance owners got less money than they expected for their of monetary payments in shaping attitudes about the home. relocation process. The third is the importance of post-relocation satisfaction with the new house and Effect of Compensation on Housing neighborhood. If outcomes pertaining to these factors can be successfully managed, relocation can When asked, "Did the payments you received for work well for most people. TRB Special Report 192 11

The long-run effects of the relocation process The second issue is one of equity. Some persons appear to be somewhat predictable given commonly apparently received more of an additive payment if available data. The particular results should not they moved into a larger home after displacement be surprising to anyone familiar with relocation (and some persons moving to from homes problems. Relocation is a burden for the elderly reportedly received no additive at all). Such prac- (6,14). Many of them have strong attachments to tices were a source of extremely bitter complaints. their homes and neighborhoods that are difficult, if Persons in essentially similar situations before not impossible, to re-establish in other locations. displacement should receive approximately equal pay- Similarly, the more affluent have established ments. The concept of having to spend money for it individualistic patterns of satisfaction that are to be reimbursed should be re-evaluated. - hard to recreate elsewhere. The tightness of the housing market is probably an excellent proxy for Cash Flow the probability that a given household will be pleased with its new dwelling following relocation. The relocation payments are too slow. This results Finally, given current patterns of residential dis- in a substantial inequity for persons of limited tribution of nonwhite subgroups of the population, financial means or others who are "cash poor" when it is possible that a well-managed relocation pro- it comes to matters such as down payments or gram can significantly upgrade the housing and gen- costs on a new home. Procedures should be changed eral welfare of nonwhite families. so that either (a) the money is available more quickly, or (b) the highway department will Overall Assessment of Dislocation Consequences guarantee and pay the interest charges on short-term and Their Compensation loans that can be used to expedite the purchase and of the new dwelling. We conclude from this study that the policies imple- menting the Uniform Relocation Act of 1970 represent Ancillary Property Improvements a very significant advance over previous relocation policies. The economic consequences of dislocation Some persons may have invested considerable money, are now basically covered by existing compensation labor, and time in ancillary improvements to their techniques, but social and psychological conse- property such as gardens, special trees and shrubs, quences remain, for the most part, not compensated and other unique features. These improvements at all. Despite this disparity, the few currently should either be compensated at their replacement uncompensated or undercompensated economic effects cost or the relocatee should be permitted to move as cause more concern to the relocatees than do the many of them as possible at government expense. generally uncompensated social and psychological ef- fects. This is a clear indication that immediate Income-Producing Property policy improvements should focus on economic is- sues. Certain modification, or "fine tuning," of The separation in the law between residential and the current law and procedures could raise the business relocation neglects the actual comingling present assessment of generally good treatment and of these activities in many instances. For example, compensa- tion for displaced households to generally persons who rent a portion of their home to another excellent treatment and compensation. household are likely to be worse off after A great deal has been written about the suffering dislocation under current compensation practices. of disadvantaged persons faced with relocation, This income-producing aspect of a basically whether by urban renewal or highway projects residential unit may be ofcritical importance to a (4,15,16). The results of this study do not support household in terms of cash flow. To the extent such Contentions. It was found that the overall possible, such persons must be relocated in a housing status of nonwhites improved more than that comparable structure (returned to their former of whites and that nonwhites were more satisfied position) for them to have been treated equitably. than whites with the overall changes (including the cost of housing). In addition, it was found that Cash Needs persons dissatisfied with relocation tended to be of higher rather than lower incomes. Our survey showed that the $300 moving allowance (or other scheduled allowance) was considered sufficient Recommendations by all but 1 percent of those interviewed. However, From our analysis of the experiences of the the relocatees felt that not enough of the cost of relocatees, we recommend that certain Changes be re-establishing a residence was covered. Increasing made to relocation policies and practices. These the dislocation allowance to more than the currently Changes have been divided into three categories: available $200 should be considered. (These compensation, relocation practices, and the highway Comments, accurate at the time of the surveys, now planning process. have to be revised due to the serious inflation experienced in the last few years.) Compensation Changes Rent Supplements

Prices Paid for Dwelling Units The four-year limitations on rent supplements is No factor caused as much upset and anger as the insufficient for a small but significant number of price paid to homeowners for their former dwelling. households. Extensions of the time and dollar The heart of the matter is the so-called "additive limits are warranted, but there does not appear to payment," and the problems include confusion and be a clear means of determining how long and how apparent inequities. Homeowners who were much would be equitable. interviewed often felt that the fair market value offered for their home was too low, not realizing Relocation Practices that their concern should have been the total compensation package. This is reported to be less Attitudes and Assistance of a concern today than when our study was undertaken. The attitudes and assistance of the relocation per- 12 TRB Special Report 192 sonnel were crucial--and nearly as significant as these improvements onto the residential monetary payments--in determining a relocatee's at- households they displace and others nearby.... titude toward the process. Most relocatees reported This injustice results in forcing relatively excellent dealings with highway personnel, but some low-income families and individuals to bear heavy relocatees reported encounters with rude, belliger- financial burdens which really ought to be paid ent, or arrogant relocation agents. Granting that by society as a whole. some of these actions were probably provoked by hos- tile or frightened relocatees, additional care, At the same time, it appears that certain training, and professionalism on the part of the re- questions that were relevant then will remain as key location agents will substantially reduce the number issues, even though our responses to them may change of such complaints. over time. These issues need to be constantly re-evaluated. Re- Acquired Property Lacking obviously correct or exclusive answers to these issues, either from legal, moral, or other Early acquisition programs have substantially grounds, the expressions of satisfactory and increased the number of occupied housing units owned unsatisfactory components of the relocation process by highway departments. This is looked on with of those who have endured it are probably the best extreme disfavor by those who remain in such guide available. What relocatees express is that a dwellings after they no longer own them. Re-renting few economic issues remain unresolved and that these acquired property, with rents established on current are more significant to them than the largely fair market values, often results in the practice of uncompensated social and psychological effects of charging the former owners more per month than they residential relocation. had paid as owners. Those who suffer this practice view it as extremely unjust. ACKNOWLED4ENT The practice is especially burdensome for elderly persons and others who have already paid off a mort- Portions of this paper are derived from work gage because it creates a substantial (and noncom- sponsored by the American Association of State pensable) financial hardship. Acquisition of the Highway and Transportation Officials, in cooperation property should not occur until the owner-occupants with the Federal Highway Administration, and was can be relocated and can receive full compensation. conducted in the National Cooperative Highway Re- search Program administered by the Transportation Highway Planning Process Research Board of the National Research Council. That study, which contains more detailed acknowledg- Consideration of Displacement Effects ments, is cited in Burkhardt and others (3). The opinions and findings in this paper are mine and are The consideration of displacement effects can be not necessarily those of any other individual or or- brought into the highway planning process by ganization. avoiding areas of potentially serious uncompensated impacts, such as neighborhoods with a high REFERENCES proportion of elderly people. These and other social impact calculations should be brought to bear F.I. Michelman. Property, Utility, and Fair- on decisions concerning route location by mapping ness: Comments on the Ethical Foundation of demographic characteristics of subareas (census "Just Compensation" Law. Harvard Law Review, tracts, enumeration districts, or blocks) in Vol. 80, April 1967, pp. 1165-1258. relation to proposed route locations. We proposed A. Downs. Losses Imposed on Urban Households that highways not be built through areas where more by Uncompensated Highway and Renewal Costs. In than a certain proportion of the population is Urban Problems and Prospects, Markham Press, elderly. The effect of this suggestion would be to Chicago, 1971. narrow the possible routes for highway locations at J.E. Burkhardt, N.K. Boyd, and T.K. Martin. the corridor planning level. Residential Dislocation: Costs and Conse- quences. REC Research Corp., Bethesda, MD, Involvement of Local Citizens Dec. 1976. C.W. Hartman. Relocation: Illusory Promises A great discomfort to many persons to be dislocated and No Relief. Virginia Law Review, Vol. 57, and to remain in areas near the highway was that 1971. they simply did not know what was going on or what W.G. Adkins and F.F. Eichman, Jr. Consequences to expect. Psychological research has shown that of Displacement by Right-of-Way to 100 Home- persons can more readily accept adverse decisions if owners, Dallas, Texas. Texas Transportation they have been a party to the decision-making Institute, Texas A&M Univ., College Station, process. Highway agencies should publicize their Bull. No. 16, Sept. 1961. plans as much as possible and should establish J.M. Mogey. Social Effects of . hotlines for persons with gOestions about the Boston Univ. Press, Boston, 1971. relocation process. W.H. Key. When People Are Forced to Move: Final Report on a Study of Forced Relocation. CONCLUS ION U.S. Social Security Administration, 1967. D. Thursz. Where Are They Now? Health and Clearly, the passage and implementation of the Welfare Council of the National Capitol Area, Uniform Relocation Act of 1970 provided substantial Washington, DC, 1966. benefits. The situation has changed markedly from U.S. Housing and Home Finance Agency. The that time about which Downs (2) wrote: Housing of Relocated Families: Summary of a Census Bureau Survey. In Urban Renewal: The It is clear that present compensation practices Record and the Controversy (James 0. Wilson, related to residential households displaced by eL), Massachusetts Institute of Technology highways and urban renewal are grossly unfair. Press, Cambridge, 1967. Those practices in effect shift a substantial M. Fried and P. Gliecher. Some Sources of part of the true costs of acquiring property for Residential Satisfaction in an Urban Slum. TRB Special Report 192 13

Journal of the American Institute of Planners, P.L. Niebanck and J.B. Pope. The Elderly in Vol. 27, 1961, pp. 305-314. Older Urban Areas: Problems of Adaptation and S. Keller. The Urban Neighborhood: A Socio- the Effects of Relocation. Univ. of logical Perspective. Random House, New York, Pennsylvania Press, Philadelphia, 1965. 1968. L. Watts and others. The Middle-Income Negro J.E. Burkhardt, A. Lago, and J. Rothenberg. Family Faces Urban Renewal. Florence Hellen Changes in Neighborhood Social Interaction. Graduate School for Advanced Studies in Social RMC Research Corp., Bethesda, MD, 1971. Welfare, Brandeis Univ., Waltham, MA, 1964.

Problems in Implementation of the Uniform Relocation Act

Robert Hadley

Progress can be viewed as change for the better. This paper is drawn primarily from the report GAO Sometimes, however, progress means that certain issued in March 1978, entitled Changes Needed in the people must move from their homes or businesses to Relocation Act to Achieve More Uniform Treatment of make way for a federal or federally-assisted Persons Displaced by Federal Programs, and GAO project. Although such projects benefit the general testimony on S. 1108. The paper specifically public, hardships may be suffered by the people comments on proposals of S. 1108: (a) to establish required to move. The Uniform Relocation Assistance a central authority to create a set of uniform and Real Property Acquisition Policies Act of 1970 regulations from the agencies to implement, (b) to provides assistance for these people in relocating clarify the coverage of the act, and (c) to adjust to another home or business site. The relocation payment schedules to 1979 levels. The GAO report act is intended to provide for uniform and equitable concluded that the federal government has not treatment of persons displaced from their homes, completely met its goal of providing uniform businesses, or farms by federal or federally- treatment to people displaced from their homes and assisted programs. Its purpose is to prevent indi- businesses. The report concluded that the root viduals from suffering disproportionate injuries as cause of this situation is the president's lack of a result of programs designed to benefit the general authority to promulgate uniform rules and public. regulations to replace the multiple sets of Prior to passage of the Relocation Act of 1970, regulations that now exist. It also reported that nearly all federally-assisted programs had differing some people displaced by federally-assisted projects and conflicting provisions for relocating people who were not covered by the act. Our recent informal were displaced. The program ranged from providing contracts with federal agencies indicate that the no assistance at all in some cases to providing conditions described in the report remain liberal benefits and protection in others. In one essentially unchanged. neighborhood, for example, people on one side of the S. 1108 does three important things: street received special relocation assistance and fairly negotiated prices for their property, while It gives the president authority to designate on the other side people were evicted with no one agency to establish a single uniform set of assistance or compensation and were offered prices regulations and procedures applicable to all below the appraised value of their property. In relocation activity supported by federal funds; another section of the neighborhood, small It gives the designated agency the authority businesses received little or no relocation or to assure the uniform application and interpretation economic adjustment assistance. of the regulations; and These inequities created irritation and confusion It attempts to clarify the coverage of the in the affected communities. Continuing and existing act. - annoying conflicts arose between federal agencies and state and local grantees, damaging the image of GAO strongly endorsed the amendments to Section the federal government at the state and local 213, which are designed to improve the administra- levels. Provisions to standardize relocation tion of the act. GAO believes that these amend- assistance in all f&deral programs were originally ments, if adopted, would go far toward more com- contained in the proposed Intergovernmental pletely achieving the basic purpose of the act--a Cooperation Act of 1968. Although these provisions uniform, fair, and equitable treatment of people up- were removed from the act prior to passage, they rooted as a result of federal or federally-assisted formed the basis of the relocation act. programs. Implementation of the relocation act has improved Relocation assistance is an extremely complex and the delivery of assistance to displaced persons and technical subject. The courts and the Executive businesses. However, the congressional goals of Branch have wrestled with many difficult problems of uniform and equitable treatment for all displaced interpreting and applying the act--very often persons and businesses have not been completely reaching different conclusions. This conference achieved. Work by GAO, the Executive Branch, and will be hearing more about many of these problems several nonprofit groups has disclosed a series of later from the agencies who are confronted with them obstacles to more effective implementation of the each day and from the displaced people affected by act. These obstacles originate primarily in court the decisions. S. 1108 addresses a number of these decisions and differences of opinion among federal problems, some of which will be briefly discussed agencies. Several bills have been introduced in here. - Congress to remove these obstacles. 14 TRB Special Report 192

SINGLE SET OF REGULATIONS Relocation Assistance Implementation Committee--to (a) provide guidelines for the agencies to use when The Congress considered and rejected the idea of developing their regulations and (b) continually giving the president authority to make rules and review agencies' relocation program and recommend regulations to carry out the act's provisions when improvements and necessary legislation. In 1973, it passed the legislation. The administration the president transferred OMB's responsibilities to sought this authority, arguing that vesting the General Services Administration (GSA). 0MB was regulation authority in the head of each federal to maintain broad policy oversight and to offer agency would likely result in different and assistance in resolving major policy issues. inconsistent administration. The act allowed This approach worked only when there was federal agencies to write their own regulations in unanimous agreement. The committee was a good forum order to prevent unnecessary interference with for agency officials to exchange information and agency programs. The Congress anticipated that the provide assistance to each other. On the whole, agency consultation process required by the act however, the committee has proven an inappropriate would assure uniform policies. vehicle for resolving agency differences and The requirement for agency heads to consult on obtaining interagency coordination of relocation the establishment of uniform regulations has not activities. Because the committee is composed of overcome the desire of individual agencies to go peers, agreements among agencies have to be their own way. Because of this individualism, the unanimous, and no one organization is empowered to federal government has not provided uniform and ensure consistent and uniform implementation of the equitable treatment of persons displaced from their act. homes, their businesses, or their farms, when they GSA and 0MB have not pushed the federal agencies are required to move for the common good. to identify and resolve differences. The GAO report During the review, GAO examined the relocation pointed out that the committee and its working group regulations of 13 federal agencies. An analysis have met only sporadically. Under GSA's leadership, revealed a confusing array of different formats, the committee met only once (in August 1973), and wordings, and degrees of detail. Because of these the working group last met on a regular basis in differences, which were often very subtle, relocated October 1975. Since the issuance of the GAO report persons and businesses received different payments. the committee and its working group have not met. Some of the major differences in agency regulations As a result of the lack of effective process for and practices include, for example, HOD regulations resolving agency differences, obtaining coordina- that allow professional service costs incurred by tion, and exercising oversight, problems were not businesses in securing a replacement site. FHWA being effectively addressed and resolved. For ex- regulations, however, did not discuss whether or not ample, differences in regulations and practices such costs were allowed. The following case identified by the Federal Regional Councils remain illustrates the differences that can result. unresolved; agreements reached and incorporated into A Baltimore business relocated by a HUD project agency regulations still contained differences that used professional services for (a) preparing, could result in different payments; and new federal reviewing, and executing a contract of sale; (b) programs and court decisions were not studied to de- complying with Occupational Safety and Health termine their effect on the act's administration. Administration requirements; and (c) reviewing In addition to recommending legislative action to insurance coverage for the new site. The services authorize a single set of regulations, GAO suggested cost about $5500, and the business applied to HUB that the act be amended to require the president to for reimbursement. designate a central organization to direct and MUD agreed to pay for most of the costs because oversee relocation activities governmentwide. it believed the services were necessary to Although not in agreement on which agency should re-establish the business at the replacement site. have responsibility, both 0MB and GSA supported the According to an FHWA relocation official, the cost recommendations as being needed to more completely of these services would not have been approved on an achieve the objectives of the act. FHWA project. S. 1108 addresses this problem by directing that The various federal agency regulations, in addi- the agency designated by the president to establish tion to causing inconsistent payments to relocated a uniform set of regulations also take appropriate persons, also cause administrative difficulties for action to assure uniform application and interpreta- local relocation agencies that work with more than tion of the regulations. GAO testimony suggested one federal agency. For example, a Federal Regional that Section 213 be expanded to provide the desig- Council chairman cited reports that some local ac- nated agency with authority to waive the regula- quiring agencies work with as many as five different tions. This would provide for unforseen situations sets of federal regulations. where application of the uniform regulations might The proposed amendment giving the president produce inappropriate results. authority to establish a uniform set of regulations and procedures should significantly improve the CLARIFYING INTENT OF CONGRESS chances of uniform treatment and ease administrative burdens at the local level. GAO testimony also recommends amendments clarifying the intent of Congress on payments of benefits to ADMINISTRATION OF THE ACT persons displaced as a result of government subsidized ventures, regardless of whether they are Adopting one set of regulations will not be enough. privately sponsored. The report cited several The administration of the act needs to be issues in this area for consideration by Congress. centralized and improved. The amendments proposed by S. 1108 address most When the act was passed, Congress anticipated of these issues. GAO reviewed the amendments and that the Executive Office of the President would had some observations for the consideration of participate in discussions with federal agencies and Congress. would review agency regulations and procedures before they were issued. The president directed the RELOCATION BENEFITS Office of Management and Budget (0MB) to establish and chair an interagency committee--known as the The act originally provided relocation benefits to TRB Special Report 192 15 persons displaced by projects that did not involve benefits to such tenants. GAO believes these acquisition of real property, such as code amendments need clarification. enforcement, rehabilitation, and demolition, funded under the Housing Act of 1949 or the Demonstration BENEFITS TO BUSINESSES Cities and Metropolitan Development Act of 1966. These two acts were superceded by the Housing and GAO described issues in one area that the amendments Community Development Act of 1974, but the do not address--relocation benefits provided to relocation act was not amended. As a result, businesses. Unlike the situation where people are persons displaced by similar projects funded under moved from their homes, replacement facilities are the 1974 act are not eligible for relocation not required to be available before a business is benefits. displaced, and displaced businesses do not receive The proposed amendments to Section 217 remove the financial assistance to help pay for the higher reference to superceded legislation and are intended costs of rent or purchase at the new location. to extend relocation benefits to displacements Federal Regional Council task forces have resulting from activities under the Housing and indicated that a significant number of businesses Community Development Act of 1974 and any other are being closed because of financial burdens they similar legislation.. The proposed amendments, face when forced to move. Particularly vulnerable however, drop the reference to direct cause and are the neighborhood-type small businesses. effect between a displacement and a federal During the GAO review, it was learned that two project. They also remove the reference to specific states had authorized payments over and above the types of activities that do not require acquisition federal payment to reduce additional costs incurred of real property in order for displacement to by businesses at new locations. A city official occur. GAO believes the proposed amendments are said these payments had probably kept a number of vague and could expand coverage beyond the purpose businesses from closing. intended. GAO encouraged Congress to consider the issue of providing additional benefits to businesses during DISPLACEMENT BY NONSTATE AGENCIES its deliberations on S. 1108. Two possible approaches would be to require that replacement The GAO report pointed out that the relocation act facilities be available or acquire the business as a is applied only to displacement caused by federal going concern. agencies or by a state and its political subdivi- sions operating federally-assisted programs. Even ADJUSTING BENEFIT LEVELS though federally-assisted programs are involved, persons displaced by entities other than a state or GAO also commented on the adjustments to payment its political subdivisions, such as nonprofit schedules to bring them to 1979 levels. Basically, organizations, are not entitled to relocation the amendments call for doubling the existing benefits. payment schedules and then using the Consumer Price The amendments to Sections 101.3 and 101.6 seek Index (CPI) to annually update the payment amounts. to provide benefit to those individuals who are The CPI between January 1971 and July 1979 has forced to move by a private individual or entity almost doubled. carrying out a federally-assisted program or The act provides replacement housing payments of project. The amendments would extend benefits to up to $4000 over four years to displaced tenants and two new classes of displaced persons. The first are up to $15 000 to displaced homeowners to compensate all owners and tenants who are displaced by an the displaced person for the increased costs of entity with the power of condemnation. The second acquiring comparable housing that is decent, safe, class Consists of tenants whose property owners and sanitary. The proposed amendments increase the require them to move so that the owners themselves $4000 limit to $8000 for tenants and completely may undertake a project with federal financial remove the $15 000 limit. GAO believes the rent assistance. component of the CPI, which has not risen as rapidly Tenants are not covered, however, if the owner of as the overall CPI, is a more specific indicator of the property displaces them in order to sell the the changing costs of rental housing than the property to an entity without condemnation powers, overall CPI. GAO suggested, therefore, that the even though the property is to be used in pursuit of amendments be changed to use the rent component to a federally-assisted purpose. Unless the entity adjust the $4000 limit for tenants to current levels acquiring property has the power of condemnation, a and for future annual updates. property owner is not forced to sell and can The amendments provide for increasing the minimum negotiate a price that will provide adequate and maximum payments made to businesses in lieu of compensation for the expenses and attendant actual moving expenses. Federal agencies have disruptions associated with a move. Tenants do not advised us that the current minimum occasionally have the same degree of leverage. In view of the results in windfall payments. Therefore, we saw no implicit social goals of the relocation act--i.e., need for the proposed increase in the minimum. that displaced persons be provided comparable decent, safe, and sanitary housing--the subcommittee DIFFERENCES BEJJEEN FEDERAL AGENCIES may wish to consider extending coverage of the act to them. This section summarizes the differences in federal agency practices and regulations described in the D ISPLACEES AND LOAN March 1978 GAO report.

The courts have reached different opinions on Inconsistent Payments similar cases where BUD has become the owner of a property through loan foreclosure and, then, evicted The act provides replacement housing payments of up the tenants at a later date. The U.S. Supreme Court to $15 000 to displaced homeowners and rental held that in such cases, tenants are not eligible assistance payments of up to $4000 over a four-year for benefits under the act because the property was period to displaced tenants. These payments not acquired for a federal project. The proposed compensate the homeowner and tenant for the amendments are intended to provide relocation increased cost of acquiring a comparable replacement 16 TRB Special Report 192 dwelling that is decent, safe, and sanitary. agencies considered increased utility costs at the Because federal agency regulations and replacement site when determining the comparable instructions were not uniform or specific, displaced housing costs and computing the rental assistance homeowners and tenants received differing payments payment. for replacement housing and for rental assistance in situations where comparable replacement housing was PAYMENTS TO BUSINESSES DIFFERED not available. In addition to the fair market value of the real Computing Replacement Dwelling Costs property, displaced businesses are paid either actual costs for moving and related expenses or an FHWA and HUD permit state and local displacing in-lieu-of moving expense payment of up to $10 000. agencies to select one of two primary methods for Mowever, federal agency regulations differed on how determining the cost of comparable replacement to compute payment amounts. As a result, businesses dwellings. Although these two methods are designed relocated by different agencies received different to produce similar values for a replacement payments. dwelling, differences do occur. The use of one method for FHWA programs and another method for HUD Replacement Business Sites programs in the same city resulted in different payments to displaced persons. Replacement facilities available to a displaced Because of the different payments that would business may not meet all of the business' result, HUD and FHWA central office officials agreed requirements. Electrical service, plumbing, and to use the same method on their projects in one floor layout may need to be improved or changed. At city. This agreement, however, was not used in the time of the GAO review, HUD regulations allowed other geographic areas where both HUD and FHWA payments of up to $10 000 for improvements necessary projects existed. HUD officials have advised GAO to make the structure of equipment suitable for the that under their new regulations, the difference in displaced business. In contrast, FHWA regulations methods will be eliminated after September 26, 1979. and procedures were generally more restrictive. FHWA officials believe this difference is Payments to Sleeping-Room Occupants currently being resolved • by proposed changes in HUD regulations. However, an earlier change in MUD FHWA and HUD regulations differed in the method used regulations did not resolve this problem. for computing rental assistance payments for sleeping-room occupants. HUD regulations allowed Professional Services higher benefits if the monthly rental of a replacement dwelling exceeded 25 percent of an Some displaced businesses need professional individual's monthly income; FHWA regulations did assistance when planning to move their operations, not. Therefore, low-income, sleeping-room occupants preparing for the move, or during the actual move. could receive higher payments from a HUD project Professional services include consultation with than they would receive from an FHWA project. architects, attorneys, engineers, and others. FHWA contended that its regulations provided for Federal agencies' regulations differed as to the same benefits as BUD's.. While this may have allowing these expenses, and, as a result, some been FHWA's intent, GAO and the responsible businesses were paid for some or all professional relocation official in one city did not so interpret services and others were not. the regulations. This illustrates the problems that can result from each agency preparing unique Payments to New Businesses regulations. FHWA officials acknowledged that the regulations as written could be misread. The act authorizes payments to displaced businesses The Appendix to the GAO report contained a in lieu of actual moving expenses. The payments detailed analysis of various agency regulations and range between $2500 and $10 000 depending on the provided additional illustrations of the types of business' earnings. HUD and FHWA regulations, subtle differences that result from multiple however, treated differently those businesses that regulations. have been in operation for less than one year. HUD regulations allowed for the in-lieu-of payments to Last-Resort Housing Provision such businesses; FHWA regulations did not.

Homeowners or tenants are sometimes faced with OTHER DIFFERENCES acquiring comparable replacement housing where costs are so high that the maximum assistance payments The following are some additional differences not specified in Sections 203 and 204 of the relocation discussed in the GAO report, but they have been act ($15 000 and $4000) are not sufficient to cover identified by federal agencies. the costs. When this happens, some federal agencies, such as HUD, generally make the maximum Maintenance of Ownership Status payment only. FHWA, however, treats this situation as falling within the scope of the last-resort In some instances, comparable housing is not housing provision (Section 206). available for purchase by displaced homeowners who FHWA interprets this section to mean that if wish to buy a replacement dwelling. FHWA believes comparably priced replacement housing is not that a displaced owner has a legal right, as well as available, assistance payments over the limits can an equitable right, of preservation of ownership be made for the benefit of displacees to compensate status. If the displaced homeowner wishes to for higher-cost replacement housing. purchase replacement housing, FHWA uses Section 206 to alleviate such situations. Other Payments HUD follows the FHWA policy, unless it cannot reasonably do so because of the $15 000 limit of Other federal agency regulations and procedures Section 203. HUD will relocate homeowners to rental differed, causing tenants to receive different units or postpone relocation until replacement rental assistance payments. For instance, not all housing is available for purchase. TRB Special Report 192 17

Existing Patronage for Payments in-lieu-of payment, the business must not be part of a commercial enterprise that has at least one other Rather than receive moving expenses, displaced establishment not being acquired. businesses may be paid from a minimum of $2500 to a maximum of $10 000 for "loss of existing DEFINITION ISSUES patronage." This is based on average net earnings during the two years prior to displacement. Different definitions of real and personal property Problems have arisen with the definition of "loss of used by different agencies affect what is existing patronage." compensable; however, GAO does not want to get into HUD interprets the loss of existing patronage to the definition issue. Rather, it wants to provide mean the loss of existing specific clientele. No background to help others define real property. consideration is given to the possible increase or decrease in the net dollar volume of the business SUMMARY after relocation. FHWA interprets loss of existing patronage to mean the loss of net dollar volume of It is appropriate to give credit to those agency income. The only consideration given to loss of personnel who have worked diligently to administer specific clientele is when this loss would directly the act. They identified the difference in agency affect the net income of the business due to its procedures; the Federal Regional Councils were being relocated. especially effective in this regard. The HUD places responsibility on the displacing interagency staff also worked to develop alternative agency to demonstrate that a business will not solutions to identified differences. suffer a substantial loss of existing patronage in The central management authority, which GAO order to deny an in-lieu-of payment, whereas FHWA recommended and that would be established if S. 1108 requires the displacing agency to determine that a is enacted, should not result in the creation of a substantial loss will occur before the business is large administrative bureaucracy. Expertise in entitled to such payment. administering relocation activities rests, and In addition, HUD allows businesses to have should remain, in the line agencies. A very small another outlet as long as business volume in the staff could fulfill the needed leadership, conflict remaining property is below certain limitations. resolution, and decision-making role envisioned by FHWA requires that in order to be eligible for an the proposed amendments. Part 3 Workshop Reports Summaries of Workshop Discussions

The conference was structured around panel discus- ees: eligibility, relocation payments and services, sions and workshops and included representatives of relocation process, property acquisition, and adja- those who have been relocated and of relocation, cent-area impacts. Summaries of these discussions, transportation, and housing agencies. There were prepared by workshop chairmen, appear below. five principal topic areas dealt with by the confer-

Eligibility for Relocation Assistance MINIMUM DISPLACEMENT

(Cochairmen, Daniel R. Mandelker and David L. Alberts) The planning, location, and design of a federally- funded activity must respond to environmental, so- The following eight-item agenda is recommended by ciological, ecological, energy, economic, and dis- the workshop on eligibility for relocation placement considerations. Procedures set forth in assistance for reference during and for review of the National Environmental Protection Act should be proposed amendments to the Uniform Relocation clarified where necessary to assure that projects Assistance and Real Property Acquisition Policies minimize displacement within the context of other Act of 1970, and any regulations thereunder. factors. Decisions based on minimizing any one fac- tor to the exclusion of the others is not in the ELIGIBILITY public interest. Legislation that mandates projects minimizing Eligibility for relocation assistance and benefits displacement as an isolated consideration is opposed should be clarified to include any involuntary by workshop participants. displacement that results from federally funded activities directed toward the specific property RESIDENCY REQUIREMENTS occupied by displacee. Federally-funded activities carried Out by any governmental, quasi-public, Current legislation requires that owners must be in nonprofit, or private entity are all intentionally residence at least 180 days and tenants 90 days in included in the eligibility statement. "Federally order to receive supplemental benefits beyond moving funded" refers to the use of federal loans, grants, costs. Potential inequity can occur. This area or payments for the purchase, rehabilitation, or should be reviewed carefully to correct the modification of a subject property when its potential that a shorter-term occupant could receive occupants are required to move. It also includes a higher payment than a longer-term occupant solely funds made available, or "leveraged", from as a result of that occupancy. nonfederal sources on favorable terms due Participants support the 90-day and 180-day specifically to the use or expenditure of federal requirements. They do not support replacing these funds or guarantee when used on the subject with a good-faith requirement. property. Indirect displacement is not intended to be considered for relocation assistance and benefits TIME FOR ELIGIBILITY under the Uniform Relocation Act. Eligibility for relocation assistance and benefits INDIRECT DISPLACEMENT should be triggered by the initiation of negotiations for the use of federal funds on the Indirect displacement means the voluntary or subject property. involuntary relocation by an occupant of a property Any earlier eligibility date was cited as unfair in the vicinity of and possibly influenced by a to public agency funding, and any later date was federally-funded activity provided that federal viewed as unfair to the property occupants. Some funds are not used on the subject property. disparity exists regarding procedures or Compensation for indirect displacement should only interpretations of the legislation and regulations be considered as "consequential damages," in within and between federal agencies and funding accordance with applicable laws and, regulations in recipients. the community in which the subject property • is located. HOUSING OF LAST RESORT Extensive discussions by workshop participants covered comprehensive neighborhood revitalization Congress should clarify the role of housing of last and rental housing conversion to cooperatives or resort and the use of supplemental payments to . Displacements in such situations provide such housing. Such clarification should should only be considered for relocation benefits include procedures or linkages so that governmental and assistance if the use of federal funds can be agencies, not otherwise geared to provide ongoing traced to the subject property. housing management assistance, are not thrust into this unfamiliar role. The workshop discussed and opposed the use of

20 TRB Special Report 192 21 detailed and specific multiprogram relocation plans Rather, they felt that this is a rather trivial due to the variations in timing and nature of point considering the magnitude of the overall displacement and changes in the local market. It, program. After discussion, the majority of the likewise, opposed the designation of any single conferees favored the proposal to raise the entity to provide housing of last resort for all displacement allowance to $400 for all residential programs in a community. Instead, it favored the displacees. closer coordination of projects, relocation planning, timing, and the development of resources.. Maximum Payment Limitations for Relocation Housing Payments LUMP SUM PAYMENTS In every workshop the same two lines of thought Public agencies should be permitted, but not emerged when the desirability for establishing required, to make periodic disbursements of rental maximum replacement housing, down payment, and rent assistance payments rather than lump sum payments. supplement payment limitations was discussed. This is intended to further the probability that One group believes that the existing prohibition such payments would be used for decent, safe, and against displacing residential occupants unless and sanitary replacement housing. until comparable decent, safe, and sanitary replacement housing is made available to them causes SECTION-B MOUSING maximum payment limitations to be totally ineffective. This group explained that, when a Section-8 housing assistance should be used in lieu relocation cannot be accomplished within the maximum of four-year rental assistance payments whenever payment limitation, the acquiring agency (of possible and available. Section 8 is a more necessity) merely "switches" to the last-resort permanent form of housing assistance and is housing program and pays the amount necessary to periodically adjusted for changes in housing costs provide the required replacement housing--without and the renters ability to pay. It is also limited regard for the so-called payment limitations. to decent, safe, and sanitary housing. Their contention is that such payment limitations This recommendation implies a closer linkage do not reduce, control, or, in reality, even affect between displacing entities and the administrating the amount of actual relocation housing payments. Section-B agency or housing authority. That linkage They do force them to unnecessarily use the more could include clearer and higher priority for complicated and time-consuming last-resort payment displacees and/or the targeting of additional process that increases administrative costs and Section-B funds to a locality facing a significant often imposes payment procedures that are relocation worklbad. undesirable to the displacee. This group favors the elimination of all maximum payment limitations for relocation housing payments. The remaining participants did not necessarily disagree with the contentions of the majority, but Relocation Payments and Services believed that maximum payment limitations are necessary to effect better control of the program (Cochairmen, Floyd I. Wise and Herbert L. Selesnick) and assure that the amounts in relocation housing payments are properly computed and fully justified. This summation of the opinions and desires of those They explained that, in many cases, the agencies who participated in the workshop on relocation under their jurisdiction that administer the payments and services is divided into two parts. relocation program in the field are understaffed, Part 1 relates to relocation payments. Part 2 inadequately trained, and often operate with limited covers the discussion of relocation services. supervision by the parent agency. As a result they fear that, without this element of control, reloca- RELOCATION PAYMENTS tion housing payments could, in their words, "run wild". This group strongly favors maximum payment Various types of relocation payments were considered limitations. individually in the workshops. Workshop partici- Both groups for the most part agreed that, if pants were encouraged to discuss (a) existing pay- such maximum payment limitations are included in new ments available under P.L. 91-646, (b) payments that legislation, they should be increased to $8000 for would be available under proposed legislation, and rent supplement and down payments and to $25 000 for (c) other payment proposals that should be con- replacement housing payments to 1$0-day owners. It sidered. was also generally agreed that such maximum payments relate only to the basic relocation housing payment Residential Fixed-Payment Moving Expense Schedules and do not include incidental closing and/or increased interest payments. Practically all workshop participants favored the proposal in pending legislation to increase the $300 Down Payments maximum fixed moving-cost payment to $600. There was some reservation, however, about raising the A substantial majority favored eliminating the $2000 $200 dislocation allowance to $400 for all down-payment matching funds requirement because residential displacees. The dissenting participants those who most need the payment often cannot produce believe that the occupants of sleeping rooms and the required matching funds and, as a result, furnished units should receive a smaller receive a lesser payment than those who are displacement allowance because they do not financially able to do so. A limited number of the experience the incidental expenses that this payment participants expressed the feeling that the was designed to cover. Their reasoning is that such requirement should be continued. Their reason is displacees would receive somewhat of a windfall if that displacees will take a greater interest in they receive $400 plus their "per-room" moving-cost their replacement homes if they invest some of their payment, and then they would merely "pack their own funds in the purchase. suitcase and walk away." The majority did not necessarily disagree with these contentions. 22 TRB Special Report 192

Business and Farm In-Lieu-Of Moving Payments between the monthly loan payment at the current commercial interest rate and some lower-interest Almost without exception, everyone in the workshops requirement. For example, if a displaced business preferred to increase the maximum in-lieu-of moving owner borrowed $50 000 at an interest rate of 12 payments to $20 000 but to leave the minimum at percent, the monthly payment may be $700. The same $2500. It was generally agreed that the eligible loan at 6 percent may result in a monthly payment of owners of displaced businesses and farm operations $550--reflecting a difference of $150. This monthly producing average annual net earnings in excess of payment difference would, be converted into a current $10 000 are unduly penalized by the existing maximum worth value that would be paid directly to the payment limitation. The participants also agreed lending institution with the understanding that the that payments in excess of $2500 to the owners of displacee will pay off the loan at the lower rate. marginal operations with little or no income-produc- As an incentive to the lending institution, the ing ability cannot be justified. (Some preferred discount rate used in computing the current worth of that the existing $2500 minimum payment be de- the monthly payment differential could be 1 percent creased.) less than the going commercial loan rate. There was little, if any, support for an additive Business and Farm Operation Relocation Allowance payment based on the increased purchase price or Payment rental cost of a replacement site. It was generally agreed that it would be impossible to compute a fair A majority of the workshop participants favored the and reasonable payment of this type (or one that Creation of some type of payment to help the owners could be documented) because, in nearly every case, of displaced businesses and farms to reestablish business operations are updated, expanded, modern- their operations. The payment would also provide a ized, and/or otherwise changed when reestablished at cash flow during the difficult displacement and the replacement site. As a consequence, no one relocation period. The proposed payment would only could establish the actual additional cost that be available to those who relocate and continue would have been experienced (if any) in reestablish- their existing operations. Various payment propos- ing the operation at the same level that existed als were presented. After considerable discussion, prior to displacement. the following two proposals were considered most de- sirable. All agreed that only one payment procedure Increased Tax Payment be Created--but did not express a firm preference. (Most believe, however, that Procedure A, described The workshop participants expressed a firm opinion below, would be much simpler to administer.) that, based on their extensive experience in dealing with residential displacees, the creation of an Procedure A increased tax payment is neither necessary nor justified. Eligible owners of displaced businesses and farm op- erations would receive a lump sum relocation allow- Annual Increase in Maximum Payment Limitations ance--in addition to their normal moving-cost payment--based on their average annual net earn- The participants summarily rejected the proposal ings. The following fixed payment schedule, which that maximum relocation payments be adjusted establishes a $25 000 maximum payment limitation, annually to reflect increases in the Consumer Price was suggested: Index. In fact, they rejected annual adjustments of any type. Some of the reasons given for this firm Net earnings of $0 to $5000 justify a $2500 stand are (a) displacees would delay their relocation allowance; relocation during the latter months of the payment Net earnings of $5000 to $20 000 justify a year to take advantage of the next anticipated $5000 relocation allowance; annual adjustment; (b) inconsistent payments would Net earnings of $20 000 to $50 000 justify a be made in the same area (even in the same $10 000 relocation allowance; and neighborhood) for identical displacements--depending Net earnings of $50 000 to $100 000 justify a on when the payment is made; (c) it would be $25 000 relocation allowance. necessary to reprint relocation brochures, manuals, regulations, and other publications on an annual Procedure B basis--creating confusion and unnecessary expenses in administering the program; and (d) some states This procedure provides an element of flexibility would need annual permissive state legislation to for infusing capital to all non-residential adjust maximum payment limitations. displacees who desire to relocate, but do not have There was a feeling among the participants that the financial backing to make the transition. It is the "one agency" to be designated by the president based on the proponents' belief that the most to write relocation regulations and procedures (if responsive way of providing financial aid to this proposal becomes a reality) should be business and farm operation displacees who genuinely authorized in the act to adjust maximum payment wish to relocate is to assure the availability of limitations--without the necessity for legislative low-interest loans. The acquiring agency would action. offer to subsidize a commercial loan provided that the resulting money be used exclusively by the Increased Interest Payments displacee in reestablishing the operation. (As to constraint, an increase in operating capacity of up With no dissenting opinion, the workshop to 150 percent of the existing establishment could participants favored approval of a new increased be allowed.) interest computation procedure. The new procedure The displacee would be encouraged to investigate should be based on the amount (payment) necessary to all relocation options and discuss prospective plans enable the displacee to reduce the balance of the with local lending institutions. The acquiring mortgage on the replacement dwelling to the monthly agency would then enter the loan negotiations and principal and interest payment that was being paid develop a plan with the lending institution to on the dwelling from which he or she was displaced. reimburse them the current worth of the difference For example, if the remaining unpaid balance of a TRB Special Report 192 23 mortgage on the dwelling from which the displacement relocation services noted by workshop participants occurs is $16 500, the remaining term of the is the ineligibility of relocatees who are displaced mortgage is 288 months, and the annual interest rate by federally assisted activities when there is no is 8 percent, the displacee would be entitled to an intervening public acquiring agency. Moreover, in increased interest payment of $17 803 under existing high-density high-social-impact displacement areas, computation procedures if he or she borrows the same where most of the relocation stafVs time is spent amount ($16 500) for the same term (288 months) and on a small portion of the relocation caseload that pays an annual interest rate of 17 percent has the most visible and urgent problems, there is a Under the recommended procedure, he or she would strong likelihood that other elements of the receive a payment of caseload who could also benefit from services go unattended. $7550 to reduce the unpaid balance of the With regard to the adequacy of relocation ser- mortgage on the replacement dwelling to $8950; vices, workshop participants observed that experi- $16 500 at 8 percent interest for 288 months enced and trained staff are difficult to come by. requires a monthly principal and interest payment of In addition, there are in the field in many cases $129.04; or staff who are not well qualified to provide reloca- $8950 at 17 percent interest for 288 months tion services effectively, and that not enough em- requires a monthly principal and interest payment of phasis is placed on staff training and the enforce- $129.04. ment of standards of quality in relocation services. Participants noted that the current inflationary It was generally agreed that the mechanics for situation with regard to housing prices and mortgage implementing the recommended procedure could be interest rates has vastly complicated the nature of worked out without difficulty. housing information and advice that must be conveyed to displacees. Many relocation agents are not RELOCATION SERVICES sufficiently informed about housing finance and transactions to provide the necessary advice The workshop on payments and services considered or referrals adequately. three specific questions with regard to relocation Participants also observed that, while it is assistance advisory services: How available are highly desirable to make more advisory assistance relocation services? Are relocation services available to displaced businesses, especially small adequate? and Are relocation services used? businesses, the nature of this advisory assistance With regard to availability, workshop partici- is usually more technical and more complex than the pants observed that budgetary cuts and staffing kind of guidance that is needed by most tenants and freezes are beginning to affect the ability of state homeowners. Workshop participants expressed doubt highway agencies, local public agencies, and other that many acquiring agencies possess the necessary acquiring bodies to provide relocation services for business relocation experience on their staffs to displacees. In the highway programs there has re- advise or refer commercial relocatees adequately. cently been pressure to combine relocation with In addition, the workshop participants questioned other right-of-way acquisition functions and elimi- the adequacy of relocation staff capabilities in nate staff who specialize solely in relocation. It relation to the kinds of homeownership counseling was generally agreed that this consolidation would assistance typically required by many displaced be detrimental to the relocation services program low-income tenants who are becoming first-time because the skills and aptitudes of appraisers, ne- homeowners. gotiators, and property managers are very different It was generally agreed that existing training from those required of relocation agents. In addi- and technical assistance opportunities for tion, the time-consuming nature of the other acqui- relocation agents are simply not adequate for sition activities would further reduce the current equipping them to deal effectively with the social low priority given to relocation services. and personal problems of residential displacees or Other participants noted that relocation services with the technical and financial problems of are one of the first items state and local acquisi- displaced businesses and farm operations. Moreover, tion agencies have been cutting back in response to workshop participants expressed the view that it is recent budgetary constraints. The result in some unreasonable to expect any one relocation agent to areas has been an increased tendency to contract out acquire the broad range of knowledge and skills the relocation portion of the acquisition program. necessary to deal with all of these problems. Typically, relocation contractors do not place much With regard to the use of existing relocation emphasis on the provision of advisory services, and services, workshop participants observed that the the services they do provide vary greatly in quality. single factor most responsible for a low-utilization Most of the workshop participants were in rate is the current emphasis on lump sum payments. agreement that the single, largest impediment to This causes displacees to view the acquiring agency greater availability of relocation assistance as a cash disbursement agency rather than as a advisory services for displacees is the current rehousing agency. Many then fail to take advantage attitude of administrators of state and local of the advisory assistance services they could also acquisition programs. The consensus was that many receive from the agency. In, addition, workshop program administrators simply do not recognize the participants observed that inadequate information "make-or-break" importance of relocation services in programs, insufficient explanation of benefits, and accelerating the acquisition process and in building inordinately slow or rapid acquisition schedules public acceptance and good will for acquisition contributed to "premature moves" and underutiliza- programs. In addition, it appears that many program tion of available relocation advisory services. administrators underestimate or are unaware of the scope and complexity of social and personal problems RECOMMENDATIONS in the relocation caseload. They, therefore, tend to discount the legitimacy and value of key To address these relocation service problems, work- relocation functions, such as information and shop participants offered the following recommenda- referral, and to view services in general as "a tions. necessary evil." An additional constraint on the availability of 1. Define and limit the scope of services. Ac- 24 TRB Special Report 192 quisition programs have as their primary objective agencies for rulemaking, standard regulations, and the assembling and clearing of parcels for improved central relocation offices. It did not focus on the reuse. They cannot resolve all the personal, so- substance of what should be made uniform. cial, and financial problems of the site occupants. Nevertheless, substance could not be ignored Relocation services should, therefore, be limited in totally. Initially, some participants questioned scope and designed to support and expedite the the need for greater uniformity. It was pointed clearance and reuse goals of the acquiring agency. out, and almost everyone agreed, that great progress The principal thrust of relocation services should had been made over the past decade in raising be to explain the program and assist with securing benefits and achieving fair and equitable replacement properties and claims processing. compensation and benefits under the 1970 relocation Broader social and technical problems of displacees act. However, each of the five groups recognized should be dealt with by referring them to special- the need for at least some further progress toward ized agencies that are properly equipped and fi- greater uniformity. At that point, consensus ended. nanced to help them. Information and referral ser- Feelings about the degree of additional progress vices for these broader personal and financial prob- needed ranged from minor needs for fine tuning the lems should be provided on an "only-as-needed" basis. 1970 act to serious inequities needing urgent Improve the quality of services. Increase attention. Some of the most troublesome differences the emphasis on training and development opportuni- discussed included the following. ties for relocation staffs. The initiative for in- creased training opportunities must come from the Certain federally-funded programs are not federal agencies that fund the major acquisition subject to the existing law. programs. Staff training and development incentives "Housing of last resort" is not always can be reinforced, however, through increased allowed, either because of federal agency attention to and support of relocation services by interpretations or because of state laws. the administrators of state and local acquisition Donated lands are being accepted by some programs, sustained efforts to keep politics out of federal agencies prior to appraisals, though this is the relocation staff recruitment process, and the technically illegal under the 1970 law. There are promulgation of "relocation service standards" as significant advantages to this in some cases, but part of the regulations pursuant to the Uniform proposals to change the law have been unsuccessful Relocation Act., so far. Monitor and evaluate services more closely. Some federal agencies require the preparation Increase the frequency and stringency of cost of relocation plans before displacement may take benefit and impact evaluations of relocation place, while others simply require assurances that services. Again, the impetus for closer monitoring relocation will be accomplished. This ignores the and evaluation of relocation services must come from 1973 interagency agreement calling for preplanning the federal funding agencies as part of their as standard practice. ongoing audit and compliance activities. Formal Mministrative appeals under the act are easy evaluation should emphasize "rate of return on and quick in some federal agencies, but difficult service dollar" and "rehousing success." and long delayed in others. Some are worse than Develop professional standards for relocation formal court cases, despite the intent that fairness agents. The duties, responsibilities, functions, and equity demand expeditious handling. and qualifications of relocation agents should be There are great differences among federal more fully defined and documented. The initiative agencies in the treatment of business relocations. for professionalization of the relocation discipline There is no specific authorization in the should continue to come from professional 1970 act for one federal agency to take responsibil- organizations. Relocation agent experience and ity for all acquisition and/or relocation involved educational requirements should be codified, with an in jointly funded projects. Although some federal eye toward possible eventual certification of agencies cooperate with each other in this fashion, relocation and other right-of-way practitioners. In others feel that they cannot do so. this regard, it will be important to develop broad agreement on the appropriate balance between Relocation offices that provide central services program, agency, and taxpayer representation and under several different federally funded programs displacee advocacy in the proper execution of notice these differences most. Examples were cited relocation agent responsibilities. from Maryland, Ohio, West Virginia, and the District Improve relocation reference sources. The of Columbia. rapidly growing body of relocation services Although substantial progress has been made literature should be made available, in appropriate toward uniformity among those programs involving forms, to state and local field practitioners. In federal funds, relatively little progress has been addition, more state and local agencies need to made in most states among programs funded strictly develop resource inventories and catalogs that can by state or local revenues. Of course, such be used as referral sources by field practitioners. projects are beyond the direct reach of the 1970 Case-study manuals are also useful and should be act, but the same concepts of fairness and equity more broadly disseminated. still apply in principle, and the federal act does call for parallel state legislation. Thus, eventually all federal, state, and local acquisition and relocation programs would become comparable. This simply has not happened yet. Lackof uniformity comes from several different Processes for Greater Uniformity sources. These include the following:

(Cochairmen, Bruce D. McDowell and Robert R. Poinsett) Supplemental federal laws affecting only one The topic of "process" deals with the means and co- program or one agency--The U.S. Department of ordinating mechanisms for achieving greater unifor- Interior and HUD were cited as examples; mity in relocation and real property acquisition ac- Differing federal agency interpretations of tivities. Therefore, this series of workshops dealt the 1970 Uniform Act--This causes differences not with such things as coordinating committees, single only between one department and another but among TRB Special Report 192 25

the various agencies within a single department. Although many felt that uniform regulations were The Department of the Interior and DOT were cited; primarily a federal responsibility, others pointed these differences are reflected in divergent out the supremacy of state law and the differences regulations and legal opinions; found from state to state. Therefore, it was Differing state laws--These actually are more proposed that each of the 50 states should prepare a controlling than the federal law in a legal sense; uniform set of regulations and should consider all some state laws are more limiting than the federal provisions of state and federal law that would apply one, while others are more liberal (examples were within the borders of that state. A single set of New York and North Carolina, which do not allow federal regulations could not possibly achieve this housing of last resort, and New Jersey, which has degree of unification. Yet, a number of expanded eligibility provisions; the District of participants still felt that this procedure would Columbia was also cited as an example where local establish an extra level of regulation writing that law provides greater benefits than the federal law); might interfere with the application of the federal and act. Admittedly, the state-by-state approach would Field interpretations of whatever regulations work best if the federal regulations were written in apply--All groups agreed that, regardless of whether fairly general terms, probably following the the regulations are uniform or not, field personnel performance standard approach. will make different interpretations of them. There was some discussion of the consultation process that would be followed in writing the The fact that uniformity may be breached at so federal regulations. This process has expanded many different points'was used as an argument both greatly in the past few years and would now include for and against redoubling the effort to achieve extensive involvement of state and local governments greater uniformity. It was argued that the chances as well as relocatees and their representatives. It for uniformity would be increased with a reduction was suggested also that field staffs should play a of differences at any one or more of the four points significant part in writing the regulations under cited above. In other words, the irreducible which they must operate. divergence of field interpretations very likely The question of whether a single federal agency would be less serious if there were a single act should be designated to write and enforce a uniform that cleared up some of the controversies and a set of federal regulations received a great deal of single set of regulations backed up by more thorough attention. An informal tabulation maintained training of field personnel. It was also stated throughout the day showed that 33 percent of the that ever getting complete uniformity through a participants favored such an agency and 40 percent single set of regulations might also be impossible. opposed it. The remaining 27 percent felt that However, there was a general recognition that 100 there should be some single source within the percent uniformity is unachievable--perhaps federal government from which to get quick and unnecessary--and may be undesirable because of definitive answers about the application of the 1970 divergent program objectives. Differences between Uniform Act, although they objected to a large new the HUD approach and the approach of other agencies bureaucracy. In practical terms, these alternatives were cited frequently. reduce to (a) the creation of a new bureaucracy in In general, two very different definitions of the Executive Office of the President, (b) the uniformity emerged from the workshops. The first issuance of a new management circular by 0MB with was framed in terms of achieving substantially the minimal enforcement staff, or (c) retaining the same assistance results in equivalent situations current practice of having individual federal (recognizing a certain plus or minus leeway for agencies responsible for their own regulations and human judgment exercised by field personnel). programs. This would reactivate the interagency Essentially, this is a performance standard committee and its regional counterparts in the approach. It allows some differences in procedures Federal Regional Councils (FRCs), thus improving among programs so that they can follow different communication among the agencies and working toward paths to the same goal. This would mean that greater consistency on a voluntary basis through several sets of roughly equivalent, though not shared experiences. identical, regulations could exist side by side. if the middle alternative is combined, The second definition simply calls for a uniform set alternatively, with the two polar positions, it is of regulations applicable to all programs, though it found that 60 percent of the participants want some recognizes that there may be some options within form of central authority in the relocation and land those regulations that would apply to different acquisition field, while 70 percent oppose the situations. current provisions of the Senate bills that, in the The prescriptions for attaining greater eyes of these participants, would establish a large uniformity, which emerged from these workshops, new bureaucracy duplica'ting and interfering with differed widely. Some felt that uniformity should current agency operations. be achieved primarily by clarifying basic policies With respect to striving for greater uniformity and benefit levels in the law. Others felt that below the federal level, three examples were cited. this would not go far enough and that procedures In Maryland, the legislature passed a uniform were also in need of standardization through the relocation and property acquisition act in 1972 in development of more uniform regulations. Others response to the Uniform Act of 1970. The governor recommended additional efforts to effect actual then issued an executive order creating an practice in the field through greater training and interagency committee of affected state departments development of guidance manuals like the one and agenci-..s, and the Maryland Department of recently prepared by Floyd Wise and distributed by Transportation was designated as the central the International Right-of-Way Association. These relocation authority for the state. The state are not either/or propositions. They all could be transportation department then developed a standard done at once, and a number of participants felt that set of regulations applying to all state agencies they should be. and to local governments within the state. A manual There was substantial discussion about who should was developed that is used for training courses write uniform regulations and guidance manuals. attended by state employees, local public employees, Opinion was divided about the appropriate role of and personnel from other states. Currently, 80 the federal government versus that of the states. percent of all relocations in Maryland are carried 26 TRB Special Report 192 out in conformance with the standard regulations and Acquisition Policies Act. While Congress is looking manual. Exceptions arise only in cases of at five separate bills, the one that appears to have variations between the regulations of different taken the forefront is S. 1108. federal departments and agencies. Some of these exceptions, including those for HUD, have been SECOND APPRAISALS incorporated more recently into Marylands manual. The City of Baltimore developed a uniform S. 1108 provides that the landowner may ask for and relocation and property acquisition manual for the receive a second appraisal if he or she disagrees city in cooperation with state officials and the with the condemnors first appraisal. The majority federal departments and agencies represented on the of the conferees were against allowing the second FRC for Region 3 (Philadelphia). This manual appraisal. For the most part, most agencies use two provides completely uniform procedures for appraisers on large parcels. They then use a review everything within the city and was agreed to by appraiser to balance the two and decide what theac- everyone through the FRC level. The mayor pledged tual offer for the property will be. Consequently, to make all purely local projects, as well as those in many. instances, providing the second appraisal with federal or state aid, subject to these standard will result in four appraisals for the property. procedures. However, upon submission of these Participants in this workshop expressed a variety of procedures to Washington headquarters, the project opinions on the requirement for the second appraisal: was abandoned after failing to receive DOT or HUD approval. Several felt that it was necessary to provide Virtually the same thing is now being tested in the second appraisal as a benefit to the landowner. Louisiana. Several drafts have been prepared and Because more than 50 percent of takes are reviewed, but statewide agreement has not yet been under $5000, the cost of an appraisal could outweigh obtained. When such an agreement is reached, it is the cost of the parcel taken. planned to take the standard procedures to the Quality control should be placed on the states congressional delegation for support at the second appraisal. That is, a limitation on costs national level. While standard procedures for the and time for completion, along with a standard of state are desperately desired, there is not a great ability of the second appraiser should be deal of optimism about the chances for their established. ultimate success. Agencies should not require that the second The conclusion from these cases is that it is appraiser be a member of an appraisal association quite difficult to work toward uniformity at the such as the . There are state or local levels when such uniformity has not independent appraisers who are excellent. been achieved at the federal level. All such Second appraisals will cause problems. For efforts require a substantial amount of flexibility example, (a) they will be used as a tool against the in the federal regulations and that is not available acquiring agency in trial; (b) they will cause yet. The differences between the regulations of one negotiation problems inasmuch as they will give the federal department and another are especially landowner another tool to use in the negotiations; troublesome in this effort. (c) they will cause delays in the projects; (d) A final topic discussed was the concept of there is no assurance that appraisers chosen by the certification acceptance. Under this concept, state landowners will be competent (as to this question, and local governments subject to state or local it was suggested that a certified list of appraisers regulations for relocation and property acquisition be established so that the landowner could choose that are substantially equivalent to the federal from that list or, in the alternative, that the requirements would be certified as meeting the fed- agency itself provide the second appraisal); and (e) eral requirements without having to make specific the landowner should not be allowed to advise the showings of compliance on each project. Opinions jury or the commission as to who paid for the among participants split on the advantages. it appraisal. If it is known that the agency paid for would be most difficult to obtain such certifica- the appraisal, then it could give an improper tions now, given the diversity among federal re- inference. quirements. A separate certification would probably One person argued that every appraisal should be required for each federal department and agency, be reviewed by the federal government to be certain and the existing specificity of federal requirements that the agency is giving the landowner fair market would allow little if any leeway for incorporating value or just compensation. The majority opposed state and local factors. Nevertheless, if federal this approach and felt that the acquiring agencies regulations are unified, others felt that certifica- were just as competent and trustworthy as the tion acceptance might have significant potential for federal government. streamlining the process by using a performance In order to cut down on delays, second standard approach with some built-in flexibility. appraisals should be done simultaneously with agency In brief, greater uniformity is needed. However, appraisals. the seriousness of this need is debatable, and work- shop participants differed significantly on their BUSINESS RELOCATION prescriptions for achieving greater uniformity. At this moment, there appears to be no solution in The next major concern of the conferees was business sight. relocations, and the most prominent question was whether government could make a business whole" in the same manner as it can a residential displacee. The great majority felt that businesses cannot be made whole and that to try to do so would be very Property Acquisition costly. The majority did feel, however, that additional help should be given to businesses (Cochairmen, Walter A. McFarlane and Peter Levine) because, under existing law, you can take a persons home and pay for it, but, if you take that persons The topic in this workshop was the legislation that livelihood (i.e., business), he or she receives is pending before Congress and would overhaul the little payment. Several suggestions were made: existing Uniform Relocation and Real Property TRB Special Report 192 27

In relocating a business, a replacement should be given to displacement and relocation prob- facility should be required before the business is lems in determining which corridor or alternative is forced to move; selected. Although participants emphasized that The business must have been acquired as a this should be a major factor, they recognized that going concern; numerous other variables had to be considered in Loans, with a substantial reduction in the making an acceptable decision. Relocation is only interest rate, would be very helpful; one of these important decision-making considera- The in-lieu-of payment should be increased; tions. Emphasis was placed on improved evaluations and in the preparation of environmental impact state- The interests and aid of the relocation ments. Authority for such action exists under envi- assistant specialists should be expanded. ronmental statutes, but some indicated that more em- phasis is placed on physical environmental factors Of these five suggestions, the last three received than on social and economic issues. Hence, reloca- the most emphasis with the loan provision favored by tion problems are sometimes not given adequate at- the majority. tention.

NEED FOR NEW LEGISLATION STATUTORY CHANGES

The great majority of the conferees thought that no A number of recommendations were made by new legislation is required because, it was felt, participants concerning legislation now under the existing system for acquisition is working. consideration by Congress. These are noted here. Some of the conferees suggested that, if legislation were necessary, it take the form of a pilot program Definition of displacees should be in order to test its theories. restricted to those involuntarily displaced as a result of programs or projects. However, OTHER FACTORS participants expressed a desire to retain existing flexibility to determine properties that are being A number of other factors were cited during the adversely affected economically and to work out workshop that related to property acquisition. individualized solutions. Strong sentiment to These are noted below. preserve existing merits of the act were expressed. Current legislation under study has dropped the It was pointed out that statutory authority was now relocation assistance for those displacees who had hazy regarding expenditure of funds for properties no property taken but were forced to relocate adversely affected that are not part of the neces- because the traffic pattern changed. The great sary right-of-way. If a good case can be made for majority of the conferees agreed that this indirect providing funds, approval is usually possible. compensation would have been a very difficult matter Need was expressed for a better working to administer and that the cost factor would have definition of a project. In the planning and design been tremendous. phases of project development, those individuals or Others felt that the cost of the acquired institutions adversely affected should be included property could be kept to the actual just in project development to enable agencies to take compensation if the offer for the take was made at appropriate action to achieve community objectives. the same time as the offer for the relocation The financial maximum should be removed from assistance. Use of this "package approach" has federal statutes because of the greatly increased proven successful in a number of states. property and relocation costs. Such action would Most felt that the magic ingredient in a simply extend existing practices because agencies successful program was an efficient and dedicated are now forced into last-resort housing due to the relocation assistance staff. They felt that the fact that current limits do not cover costs for better the program is administered, the more satisfactory housing. satisfied the landowner will be and the more prone Federal statutes should standardize require- he or she will be to settle without litigation. ments among agencies concerning such matters as eli- Also, relocation assistance provisions have gibility (tenure), , and choice of hous- substantially reduced the number of condemnation ing. cases. Only about one-third of displacees were Provisions should be made for a supplement dissatisfied with the payments and the treatment to businesses that are displaced. This would not that they received. necessarily mean the same treatment as for residents displaced from homes, but matters such as the cost of acquiring a new business site should receive attention in legislation. If necessary, criteria for applying assistance to businesses could be Impact of Relocation on People, Businesses, established within the proposed statute. A desire was epressed to replace services and Communities in low-income neighborhoods when these essential services are removed as a result of projects or (Co chairmen, Evan Iverson and Raymond Wardwell) programs. Provisions should be made in state statutes Even though the comments varied considerably, to remove any uncertainty about the ability to several major subjects were discussed at each acquire uneconomic remainders. workshop. Those involved expressed a strong desire If loans cannot be provided by the U.S. to take whatever action was possible or make Small Business Administration to assist businesses statutory changes, if necessary, to achieve equity that lose revenue and experience problems during the and justice for those displaced by highway relocation process, then other funding should be projects. Many felt it was necessary to update and made available by some process to be established by revise federal, state, and local statutes to achieve statute. this objective. In the project planning phase, more adequate The evaluation of relocation impacts in the proj- social, economic, and land use evaluations should be ect planning stage was also examined. More weight made to determine the feasibility of pursuing a 28 TRE Special Report 192

project or program and defining project boundaries involvement programs, and hearings when various to include those areas that are severely impacted. alternatives are being considered. When the Such action would make the relocation process more preferred alternative is adopted, persons directly satisfactory. If necessary, statutory requirements impacted should be notified so that they can make concerning these evaluations should be strengthened. their desires known prior to project approval and The environmental impact statement should have adequate lead time prior to the relocation contain project analysis that addresses displace- process. ments and relocation problems for each alternate Greater coordination among agencies, evaluated. A need was expressed to upgrade these interested groups, and individual citizens should analyses. take place prior to project adoption. This becomes People and businesses who might be affected part of an effective general public and agency by proposed projects should be notified early. This involvement program. process should include planning meetings, public Part4 Resource Materials Relocation Issues of Concern to the U.S. Department of Transportation

Martin Con 'isser

The U.S. Department of Transportation (DOT)--in par- development, preferably at the time that environ- ticular, the Federal Highway Administration mental and feasibility studies commence for the var- (FHWA)--had been heavily involved in relocation mat- ious alternatives. As project planning and develop- ters well before enactment of the Uniform Relocation ment proceed, regular communication among these Assistance and Real Property Acquisition Policies parties is supposed to continue, though some busi- Act of 1970. Controversies over relocation impacts nesses would cease to participate as alternatives seemed to reach their height in the late 1960s. are eliminated from further consideration. Since passage of the act, considerable progress has Use of DOT grant funds to support the been made in assuring fair and just compensation to process. DOT planning and/or engineering monies are owners of property taken for public purposes and in being made available to assist the transportation providing equal or improved housing for displaced agency, local officials, and the affected businesses households. Moreover, substantial uniformity has in addressing relocation concerns through been achieved in the treatment of displacees. feasibility studies and in developing reasonable It is true, however, that a number of problem plans, including special financial arrangements, areas remain and deserve further attention. This where appropriate, to mitigate the potential adverse paper outlines some of the major issues of recent impacts on those businesses. These special efforts concern to DOT, as perceived by staff from the Of- are considered part of the regular technical and fice of the Secretarys policy unit and FHWAs Of- funding assistance which is normally provided. fice of Right-of-Way. The discussion here focuses Assistance from local, state, and other fed- on business displacements, last-resort housing, in- eral agencies. In helping displaced businesses, creased interest payments, the one-for-one housing cities are to be actively encouraged to explore pos- concept, energy-saving measures, and proposed legis- sible sources of funding from local and state enti- lation. ties as well as from HUD, the Economic Development Administration, the Small Business Administration, BUSINESS DISPLACEMENT POLICY and other federal agencies. Aid from these agencies may be extremely helpful in supporting successful Many small businesses and some larger ones operate business relocation, financially and otherwise. under marginal conditions; disruptions in clientele Relocation advisory services. Special or cash flows may be critical. Displacement of such emphasis is being placed on relocation advisory firms by transportation and other projects can services for businesses. DOT expects relocation substantially increase their fatality rate, offices to have staff who possess the requisite underscoring the need for improved relocation skills for handling business as well as residential planning and assistance. displacement issues. In this regard, an aggressive At the same time, businesses forced to move outreach program is needed to ensure that the firms elsewhere will all too frequently select outlying to be displaced are fully aware of their rights, the locations when displaced from a city or other courses of action open to them, and any provisions developed areas. Sometimes the move outside the designed to retain businesses within the same city or community is prompted by real economic community. We are directing that every reasonable advantages such as cheaper land or lower taxes. In effort be made to involve the affected jurisdictions other cases, however, inadequate information and and to assist displaced firms who wish to find planning for sites within the particular acceptable replacement facilities in a timely manner. jurisdiction result in the loss of the business to Documentation of steps to aid businesses. it. Such losses undermine the viability of existing When relocation of businesses will be necessary, the population centers across the country. results of early consultation, planning for incen- To address these problems, DOT instituted the tive packaging (e.g., tax abatement, special financ- following eight-point program in an attempt to ing, and flexible and building requirements), mitigate some of the difficulties faced by and advisory assistance must be documented in con- businesses when DOT-assisted projects led to their ceptual relocation plans and, as appropriate, in fi- displacement. nal environmental impact statements. Hardship acquisitions. Although DOT appears Establishment of the necessary relations at to be mostly prohibited, because of court decisions, the local level. Departmental field and regional from supporting advance acquisition of parcels, office units will seek to ensure careful coordina- hardship acquisitions of business and residential tion and planning among the applicant transportation properties are still permitted on a case-by-case agency, the affected local government(s), and busi- basis. For some businesses, help of this sort can nesses potentially subject to displacement by any of be vital to their survival or economic health. the major transportation alternatives under consid- Therefore, each of the modal administrations is eration. reviewing its procedures to ensure that all such Initiation of the consultation process. The businesses have maximum opportunity--to the extent coordination and consultation process is to be ini- permitted by the existing statutory and judicial tiated at the earliest practical stage in project

30 TRB Special Report 192 31 framework--to qualify under the hardship acquisition discount rate (applied to the unpaid balance of the program. mortgage on the acquired dwelling) "shall be the 8. Loss of patronage at the old site. During prevailing interest rate paid on savings deposits by the acquisition stage, particular attention must be commercial banks in the general area in which the given to businesses that depend heavily on local replacement dwelling is located." This is the patronage from residents who are also being source of our problem. FHWA has further interpreted displaced (or cut off) by the same or other nearby this to mean the interest rate paid on passbook projects. As timing is crucial, such businesses savings account deposits by commercial banks, i.e., should have the opportunity, if possible, to move at about a 5-5.5 percent interest rate. Discounting the same time or prior to the relocation of their differentials on this basis generates an patrons. unjustifiably high increased interest, given the high rate of inflation and alternatives that would The implementation of these eight points by the yield greater returns. However, during past months, displacing agencies will be a step in the right this and the spiraling mortgage interest rates have direction; however, there is still a significant made our method of computing increased interest need for additional monetary benefits for business payments totally unrealistic. displacees--benefits that can only be provided by During this inflationary period, it has become the passage of additional legislation. commonplace for interest differences between old and new mortgages to amount to 5-10 percent, and more. LPST-RESORT HOUSING These differences reflect the fact that some mortgage interest rates being asked across the During the past year, there has been a substantial country have exceeded 16 percent in recent months. increase in the number of last-resort housing increased interest computations are sometimes as projects initiated by the states. In the same high as $25 000 based on the current method of period, the cumulative number of dollars programmed computing the payment. Some payments even exceed for last-resort housing since the passage of the the remaining balance of the original mortgage. Uniform Act has increased more than 50 percent. FHWA is exploring a variety of ways to combat the The reasons for this increased use of the problem created by this run-away program cost. New last-resort housing provision can be readily methods of computing or establishing interest ascertained. The continuing inflationary spiral of differentials are being examined from both legal and housing costs has driven the need for purchase and equitable viewpoints. Preliminary indications are rental-housing supplements above the statutory that equitable solutions to the problem can be limits of $15 000 and $4000. Also, the increased devised. Among the possible solutions being interest differential, which is an integral part of considered are the replacement housing payments, has skyrocketed. These factors are likely to continue pushing Delete the requirement that the passbook payments above the statutory limits for some time in savings rate be used and permit the use of interest the future. rates currently paid for long-term certificates of FHWA is moving to meet the need for increased use deposit (this would provide partial relief); of the last-resort provisions of the Uniform Act. Provide an up-front lump sum payment to FHWA proposes to take the steps necessary to promote reduce the new mortgage principal to a level that a greater understanding of that aspect of the would require the same monthly principal and program and to encourage its use as a solution to interest payment to amortize the new loan as is problem relocation cases. being paid on the old mortgage; and Any innovative method of providing needed housing Pay a discount fee or points to the lending will be considered for approval by FHWA. Some of institution in consideration for its issuing a new those methods might include the following. mortgage to the displacee at the same principal amount, term, and interest rate as the old mortgage, Purchase of an existing decent, safe, and thus retaining the same monthly mortgage payment as sanitary house by a state highway agency and renting before and eliminating any interest differential. it to a displaced tenant, or selling the unit to a third party with the stipulation that the rental ONE-FOR-ONE HOUS ING CONCEPT unit be made available to a displacee at a specific rate within the displacees financial means for the In order to mitigate adverse impacts in areas where four-year statutory period; there is a shortage of low- and moderate-income Purchase and rehabilitation of an existing housing, such as the Century Freeway Project in Los housing unit that is not decent, safe, and sanitary Angeles, a strong movement is emerging to institute where no such housing is available; one-for-one replacement of these types of housing Purchase of a replacement house by a state units. Where environmental and housing studies highway agency and adding one or more bedrooms to clearly indicate a need for such housing, a new meet the needs of a relocatee with a large family; dwelling unit may be constructed or acquired Construction of new housing; and dwellings moved and rehabilitated to replace the Movement of an existing suitable house from housing taken for highway purposes. Although there the right-of-way and renting and selling it to the may be more areas where this may be necessary in relocatee. order to proceed with the project, the application of this concept will be quite limited until there is INCREASED INTEREST PAYMENTS an opportunity to properly evaluate such action. When it is applied, the emphasis will be on the Section 203(a) (1) (B) of the 1970 Uniform Act re- provision of dwellings to assure affected areas of quires that relocation housing payments include the an adequate supply of affordable housing for increased interest costs incurred by displacees. occupancy by low- and moderate-income groups in The current method of computing increased interest target populations rather than for general community payments is resulting in unrealistically high pay- housing replenishment. ment amounts because of the current economic situa- tion. Section 203 of the Uniform Act specifies that the 32 TRB Special Report 192

ENERGY-SAVING MEASURES because the language is susceptible to unreasonable interpretations. DOT has recommended the use of In response to the need to conserve energy, a number less restrictive language in this section. of local communities throughout the country have recently adopted, as a part of their local housing Section 202 codes, various energy conservation requirements, e.g., specified amounts of wall and ceiling H.R. 6756 provides for payments to businesses to insulation, storm windows, and storm doors. cover professional services required in moving. Existing DOT regulations require that for a Although DOT agreed that displaced businesses should dwelling to be considered decent, safe, and be reimbursed for reasonable costs incurred in their sanitary, it must meet the applicable state or local reestablishment at replacement locations, DOT would building, plumbing, electrical, housing, and probably recommend the adoption of a lump sum occupancy codes or similar ordinances or regulations dislocation allowance similar to that which is for existing structures. available to residential displacees. In those areas where local housing codes have been enacted that require energy conservation Section 202(b) measures, FHWA has agreed to participate in the additional costs incurred in providing the All bills call for an increase in the maximum limits energy-saving feature, as a part of the replacement on payments for moves made under a schedule. DOT is housing payment, in order that the replacement convinced that such an increase will simplify dwelling will comply with the local housing code. administration of this phase of the relocation Whether the displacee is an owner or a tenant, program. However, to obtain the maximum benefits the state must assure itself that all comparable from such an increase, the current limits of $300 properties considered in computing the replacement and $200 should be increased to $1000 and $400 housing supplement contain the required energy instead of $600 and $400 as proposed. conservation items to meet local code requrements. This will then provide the displacee with a payment Section 202(c) that is adequate to enable him or her to obtain a comparable dwelling unit that may be certified as DOT agrees with proposed revisions increasing the decent, safe, and sanitary. maximum payment in lieu of actual moving expenses !A has and will continue to encourage state and from $10 000 to $20 000 but disagrees with the local governments to incorporate energy conservation proposed revision to increase the minimum payment requirements into their local housing codes. How- from $2500 to $5000. No need seems apparent to ever, FHWA does not favor any change in national de- raising the minimum of $2500 because it would cent, safe, and sanitary standards that would man- entitle marginal or part-time businesses to a date these features for all displacees because we payment of $5000 even if their earnings were feel that requirements of this nature should be han- substantially less. dled at the local level. Otherwise, much of the na- Because of the difficulties involved in making tion's housing resources could suddenly become sub- uniform eligibility determinations for in-lieu-of standard under federal criteria and, hence, unavail- payments, this section should be revised to simply able for replacement housing on federally-funded give a displaced business the option of receiving a projects. payment for actual, reasonable moving expenses or the lump sum payment in lieu of actual expenses. PROPOSED LEGISLATION Section 202(d) Five bills that would amend the Uniform Act have been introduced in Congress. DOT's views on some of Revision of this section would provide for the more significant amendments are summarized adjustments of benefits each year on the basis of below. The following are keyed to the sections of the annual increase, if any, in the Consumer Price the existing Uniform Act that would be affected by Index. Although DOT does not disagree with the the proposed revisions. intent of this revision, this measure could work a hardship on those states in which legislative Section 101(6) changes would be required.

All of the bills propose to broaden the definition Section 203(a) (1) of displaced person to include those involuntarily displaced directly or indirectly as the result of a The proposed changes in this section provide for the federal or federally-assisted program or project. deletion of the maximum limit for replacement Though DOT favors some expansion of the current housing payments and the deletion of the existing definition, these proposals eliminate the current 180-day occupancy requirement for eligibility. requirement that eligibility be contingent on either Prudence dictates that a statutory maximum payment an acquisition of real property or on a written be retained. However, the need to increase the order to vacate. Adoption of the new definition current maximum to $25 000 is recognized. would make it difficult to determine when a person Although DOT would not object to reducing the is indirectly affected by projects. Provisions minimum occupancy to 90 days in conformity with the broadening the terms program or project would occupancy requirements for tenants under Section similarly expand eligibility for Uniform Act 204, DOT is convinced that, for payments under this entitlements. section to be administered equitably, the minimum occupancy requirement should not be eliminated Section 201 entirely.

Amendments to Section 201 state that no federal or Section 203(a) federally-assisted project shall be undertaken unless the project "includes all possible measures A new paragraph here would provide for the payment to minimize such displacement." This appears to be of increased real property taxes. DOT does not somewhat vague, tending to be overly restrictive object to this in principle. However, computation TRB Special Report 192 33

of the payment should not be related to the life of vide eligibility for benefits under the act to per- the mortgage on the replacement dwelling. This sons outside project limits who might sustain sub- would penalize a person who paid cash. Payment of stantive economic injury because of project-related increased taxes for a specific term, such as five or activities. These proposals effectively expand the ten years, would be preferable. definition of displaced person given in Section 101(6) and suffer from the same deficiencies noted Section 204(1) in comments on that section.

Some proposed amendments are objectionable because Section 213(a) (b) they eliminate the statutory limitations on both the number of years for which the displaced tenant is Most proposals amending Sections 213(a) and (b) eligible to receive rent supplements and the maximum provide for a single set of regulations for use in dollar amounts of supplemental housing payments. implementing the Uniform Act in connection with all Given the geographic and economic mobility of our federal and federally-assisted programs and population, DOT questions the necessity for projects. An agency would be designated by the extending Uniform Act entitlements to displaced president to assure uniform application and tenants for an undefined period of time. DOT also interpretation of the single set of procedures. feels that the guarantees of last-resort housing (H.R. 6736 would create a Federal Relocation provided by the government are preferable to making Assistance Compliance Office.) Development of a unlimited payments available to displacees. single set of regulations by such an agency would be DOT favors increasing the maximum time frame of a positive step toward greater uniformity among tenant responsibility to six years and the dollar federal agencies in this area. We believe that the limitation to $8000. DOT has also recommended that agency assigned to this activity--i.e., developing the matching downpayment be dropped. the single set of regulations and resolving differences among agencies--should not be an Section 205(a) operating agency. Various proposals to amend section 205(a) would pro-

What's Wrong With the Uniform Act?

H. J. Huecker

Many proposals for changing the Uniform Act of 1970 acquisition carried out for a federally-assisted are being talked about today. Rapid inflation may program. have outpaCed payment ceilings. Some interpreta- Surely, a tenant given a notice to permanently tions of the law are not shared by all federal agen- vacate a dwelling unit because the owner wishes to cies. In 1979, Congress held hearings on S. 1108, a carry out federally-financed rehabilitation faces bill that would make changes in the Uniform Act. the same problems as a tenant displaced by public Several bills have been introduced in the House of acquisition. It is not fair to ask that tenant to Representatives. pay such a disproportionate share of the cost of Some changes in the law are needed to minimize carrying out that project. And yet the Uniform Act differing federal agency rules and to simplify does not generally cover such displacements. administration. But these are not major obstacles The Uniform Act does govern displacement caused to the kind of consensus that can produce new by rehabilitation, code enforcement, and demolition legislation. Some changes are needed to address the under several programs administered by HUD that were increased cost of buying or renting housing in the in effect when the law was enacted. But these past nine years. These may have to be negotiated programs, which include the Urban Renewal and Model with one eye on personal need and one eye on the Cities Programs, are now being phased out. There budget. have been no amendments to the law since its But there are two issues that I believe raise the enactment. most concern. And in some respects they are Undoubtedly, the cost of providing relocation related. Why doesn't the law cover all persons assistance has weighed heavily against a decision to involuntarily displaced as a direct result of a expand coverage either by law or federal federal or federally-assisted program? And how can regulation. To some extent, liberal interpretations the rental assistance payment under Section 204(1) of the existing law and proposals to legislate of the law be improved to meet the needs of low- and substantially increased payment levels have probably moderate-income persons? fostered opposition to expanding the class of eligible persons. Then, too, under many loan and DIRECT FEDERAL DISPLACEMENT subsidy programs, it is more difficult (than under public acquisition programs) to find a way to The Uniform Act covers all displacement as a result provide the cash payments required by the Uniform of acquisition by a public agency for a federal or Act. federally-assisted program. With few exceptions, it I believe, however, that sensible ways can be does not cover the involuntary displacement of found to overcome the cost objections. Placing the tenants as a direct result of rehabilitation, code burden for the funding of relocation costs on the enforcement, demolition, or privately undertaken project causing the displacement provides a strong 34 TRB Special Report 192 incentive to the project sponsor to take steps to reasonable choice of opportunities to move to avoid unnecessary displacement as a means of suitable affordable housing.) For good or bad minimizing such costs. In fact, the total number of reasons, the lump sum nature of the payment also those displaced by public acquisition for a federal fuels the opposition of many public officials to or federally-assisted project has fallen signifi- changing the law to expand coverage or to increase cantly since the Uniform Act was enacted. Under the payment ceiling. HUD-assisted programs, which account for most of It does not effectively assure standard housing these activities, the total number of such displace- accommodations. Indeed, faced with the absolute ments decreased from approximately 60 000 in fiscal limit of the payment, a person who has relocated to year 1973 to about 16 000 in fiscal year 1978 (the standard housing in order to obtain a payment may latest year for which such figures are available). shortly thereafter move to substandard housing. The high cost of relocation under the Uniform Act is A discussion of these features should help focus a primary reason for this shift. on the means by which the Uniform Act rental On the other hand, all displacement is not assistance provisions might be improved. Ideally, undesirable. With good relocation programs, both such changes would take into account the need for the public and the displaced 'person may benefit from a project. (Moreover, efforts to prevent A deeper subsidy that truly meets the gap displacement may sometimes cause more harm than between the income of the poor and the cost of good. Avoiding public expenditures to revitalize a standard housing; neighborhood may allow even greater displacement to A subsidy that does not have a short-term take place through deterioration and disinvestment, expiration; without assistance to those affected.) A subsidy that increases or decreases From the viewpoint of controlling costs in a according to variations in income and housing costs responsible way that makes it feasible to expand (such a subsidy would reflect true needs and coverage under the law while meeting the needs of preclude windfalls); low- and moderate-income renters who are most hurt A subsidy that enables the displaced person by displacement, the Uniform Act rental assistance to permanently occupy standard housing; and provisions (Section 204) deserve the closest review. A subsidy that does not substantially increase administrative costs or require the RENTAL ASSISTANCE PAYMENT institution of a new bureaucracy.

The most acute relocation problem under the Uniform Is this a pie-in-the-sky proposal? How could it be Act is that faced by displaced low- and feasible or even possible? Well, it is feasible. moderate-income tenants who often receive a lump sum In fact, it exists now. It is called the Section 8 payment of $4000 to assist them in making a Existing Housing Program. transition to better but more costly housing. Unfortunately, for many, the transition is EXISTING HOUSING PROGRAM impossible. The payment does not provide the means to sustain the new and better life initially Under the Section 8 Existing Housing Program, an promised. eligible family receives a Certificate of Family Consider, for a moment, the position of the Participation that assures the family the subsidy elderly, the handicapped, or the very unskilled who needed to reduce the cost of privately owned decent, have little or no prospect of increasing their safe, and sanitary housing to a level the family can permanent incomes to meet higher housing costs after afford (15-25 percent of adjusted income). Because the $4000 payment runs out. In many cases, the the subsidy is allocated to the family, the family can choose any housing that is decent, safe, and payment does not last more than a year or two. Who then can, blame the displaced person for moving back sanitary and within the fair-market rents estab- to low-cost substandard housing at the earliest lished for such housing. If the owner of the dwell- possible date? Better to spend the money on ing agrees to the arrangement, a is signed and higher-priority needs than merely postpone the the necessary subsidy is paid to the . As- trauma of finding and relocating to less-expensive suming a dwelling unit is found, a certificate (with housing (which is probably neither affordable nor subsidy) is effective for five years. But the cer- standard). If the replacement housing payment is to tificate may be renewed. Budget authority now operate for such damages suffered, why even require covers a 15-year period. And the subsidy could con- that the person move to standard housing as a tinue indefinitely if Congress continues to fund the condition for receiving the payment? In brief, program. then, the Uniform Act rental assistance payment is The program is administered by local public wanting in several respects. housing authorities using funds provided by HUD. It is insufficient to accommodate the housing The family income of the occupant is periodically needs of the poor. Based on the four-year reviewed and the subsidy adjusted to reflect need. computation period, the maximum subsidy is To meet program requirements, the housing occupied $83.33/month. The subsidy is neither deep enough must be standard. nor long enough to provide the help needed for The program has been operating for five years persons whose future income prospects are not with excellent results for those tenants who are commensurate with their increased housing costs. It participating. More recently, through the Housing does not respond to changes in need. No allowance and Community Development Act Amendments of 1979, is made for a future decrease in income or an Congress established criteria granting a priority increase in housing costs. (Of course, for those under the program and other assisted housing whose income materially increases after computation programs to persons who are displaced or are of the payment, it is a small windfall.) occupying substandard housing. The lump sum nature of the payment often induces This is not to say that there are not some a person to move when that move is against his or drawbacks in the program as a relocation tool. her best interests. [The tenant may obtain somewhat Perhaps the program should be revised to pay the greater assistance under Section 206 of the act subsidy directly to the tenant, rather than to the (last-resort housing) by refusing to move until the landlord. Now some refuse to participate public agency takes the steps necessary to provide a TRB Special Report 192 35 in the program and that limits the choice of a Permit the displacing agency to meet its tenant seeking housing. obligations to a displaced person by offering a Another rule that limits choice in some areas is Section 8 certificate and identifying a reasonable a requirement that the housing rent must not exceed choice of suitable (or comparable) replacement the government approved ceiling. The ceiling is dwellings at which the certificate may be used. based on average fair-market rents. Thus, if a tenant is willing to pay an extra $5 out-of-pocket There are pros and cons to each of these to rent housing that cost $5 more than the alternatives. And the workability and desirability established rent ceiling, he or she is unable to do of each may vary on a program-by-program basis so. according to the availability of relocation These issues may justify some future refinements funding. As stated earlier, the first alternative in the program. But even now, the Section 8 applies to displacements under the Uniform Act. The Existing Housing Program is a superior relocation last two alternatives are now being tried under tool for meeting the housing needs of low- and certain MUD-assisted programs that are not subject moderate-income tenants. To overcome the cost to the Uniform Act. concerns of many who do not support an extension of Which of these alternatives is best or whether or Uniform Act coverage, however, one additional not a uniform procedure needs to be adopted for all question must be resolved. under what circumstances public programs should be a matter for public should the Section 8 subsidy be substituted for the discussion. There may also be other issues. For Uniform Act rental assistance payment? There are example, should displacing agencies share in the three basic alternatives. cost of the subsidy by making a transfer payment to the Section 8 program? Continue the existing Uniform Act rules that What is clear, however, is that we already have a give a displaced person who elects to rent a program to meet the needs of displaced low- and replacement dwelling the right to choose a lump sum moderate-income persons to an extent not possible Uniform Act payment, regardless of the availability through the basic Uniform Act rental assistance of Section 8 assistance. This rule provides freedom payment and in a manner that may make feasible the of choice in the selection of housing and in the extension of Uniform Act coverage to all persons type of payment. involuntarily displaced as a direct result of a Assure full freedom of choice in the federal or federally-assisted program. selection of replacement rental housing but allow As we look forward to another decade of progress the public agency, at its option, to substitute a in the development of public relocation policy, this Section 8 certificate if the displaced person potential of the Section 8 Existing Housing Program voluntarily elects to rent a particular dwelling of ought to receive careful consideration. his or her choice and if any necessary arrangements to make the Section 8 subsidy effective can be completed.

Relocation Assistance Problems and Prospects

Max Folimer

This paper highlights some aspects of the Uniform administration. GAO has noted in several of its Relocation Assistance and Real Property Acquisition studies that different amounts might be paid as Policies Act of 1970 that affect its implementation benefits by different agencies under the same set of by federal agencies. it is not a detailed review of circumstances. This is possible, even under a the act or of all problems encountered by the U.S. uniform act, because the act vests responsibility Army Corps of Engineers in administering it. for implementing regulations and procedures in the Rather, it is an overall impression of experience head of each agency rather than in a central with the act or of all problems encountered by the authority. The legislative history shows that Corps in administering it and its future prospects. Congress delibqrately chose this course to allow Although the act has been generally successful in some flexibility to accommodate differences in achieving its objectives, there are areas where it agency programs and missions. I feel that this could be improved. flexibility outweighs any advantage to be gained by The Corps perspective of relocation assistance to imposing a central control, particularly since displaced persons is somewhat different from that of practical differences in results are rare and a high most other federal agencies. Because of the nature degree of uniformity in interpretation has actually of its programs, Corps personnel in some 30 field been achieved. offices perform almost all of its land acquisition Immediately following passage of the act, the Ex- and provide accompanying relocation assistance. ecutive Branch sought to enhance uniformity by con- This direct action eliminates the local or state vening an interagency group to discuss differences agency 'middleman" through whom most agencies work and work out a set of guidelines for use by all fed- and makes it easier to administer the act uniformly eral agencies in promulgating their regulations. within the agency. It also makes possible a close Such guidelines were issued by the Office of Manage- overview of the entire acquisition and relocation ment and Budget (0MB), pursuant to presidential or- process. der, and were later revised and reissued by GSA af- One area in which the act has frequently been ter that agency was designated to head the inter- criticized is the lack of uniformity in its agency group. Although most, if not all, federal 36 TRB Special Report 192 agencies voluntarily followed these guidelines in accuracies and inequities that prevent the act from their regulations, the group eventually ceased to being as effective as it should be in fulfilling its meet because no binding method of resolving differ- objectives. These inherent faults, although mini- ences in interpretation was available under the mal, are more responsible for deficiencies in carry- law. Despite this, a good rapport was established ing out the act's intent than are the separate ad- for exchange of ideas and information among agencies ministrative defects of the agencies. (more uniformity in practice exists than is some- Most of the problems connected with the act can times recognized). Accordingly, the reconvening of be solved by appropriate amendments. Congress such a group might provide some valuable suggestions obviously contemplated amendments after some for improving the act. experience with the act because it required annual Some problems in administering the act stem from reports from agencies through the president during omissions or ambiguities in the act itself. For in- each of the first four years of its implementation. stance, it does not define the work dwelling, al- Although these reports, in addition to operating though its meaning is crucial to several provi- agency and GAO recommendations, have not produced sions. This has caused the Corps considerable dif- any changes, several bills now pending are based on ficulty in dealing with recreational cottages or a GAO study and could make extensive revisions in summer homes. Regulations in accordance with the the act. While their provisions are too complex to interagency guidelines exclude such structures from address here, and some are considered inappropriate, eligibility for replacement housing payments. The they could correct some of the act's shortcomings. law should be clarified on this point, as well as It will be interesting to watch the progress of numerous other terms and provisions. these proposed changes. The act obviously prescribes different treatment My experience over the life of this act has been for displaced businesses than for displaced resi- that all of the federal agencies I have dealt with dents. While it guarantees displaced residents de- have sincerely tried to carry out the intent of the cent, safe, and sanitary replacement dwellings, it act and have generally succeeded. While the Corps makes no such promise regarding a business build- has not always agreed with some agencies' ing. About all a displaced business can be sure of interpretation of certain provisions, Corps goals getting reimbursed for are its moving expenses and have always been consistent. It is clear that, some advice and information on relocation sites. I because of this act, persons displaced by government agree that displaced businesses deserve more reloca- projects are much more equitably treated than at any tion assistance than has been authorized in the previous time in history. With appropriate act. Current benefits can leave a small business legislative improvements and continued dedication to without a practical relocation site or adequate com- the spirit of the act, its objectives can be pensation for the disruption. achieved. The foregoing are but two examples of several in-

Scope of GSA Acquisition and Relocation Program James W. McMahon

Over the past several years, the General Services The overview organization should be given the Administration has had a very limited federal authority to approve regulations issued by the construction program. The relocation activities various agencies, as well as to impose sanctions associated with all of these projects in the last against deviations by agencies that are not few years were accomplished through local supportable by program needs. redevelopment, housing authorities, or other federal Inequities do exist as to displacement caused by agencies, acting in behalf of GSA. No inequities or some federal activities that have not been subject inconsistencies were experienced with the handling to the act and with respect to last-resort housing of the relocation program in this manner. However, because of various interpretationè of Section 206. because GSA's program has been limited, this does Congress should amend the relocation legislation not imply that there are not inequities. It is to cover all persons displaced as a result of a simply that GSA has not experienced them. federal or federal ly-assisted project whether caused GSA believes that substantial progress has been by a public or private agency. Also, Congress made in carrying out the Uniform Act. GSA is also should amend Section 213(a) of the act to require cognizant that there are some inequities that have the president to issue a single set of regulations, to be resolved as pointed out in a 1978 GAO report. providing guidance to federal, state, and local GSA feels that a greater degree of uniformity agencies. Congressional clarification is also could be achieved with a single set of regulations, needed because of various interpretations of Section when coupled with a central organization to direct 206(2). GSA will support any proposed amendments to and oversee governmentwide relocation procedures. the act as outlined here. TRB Special Report 192 37

State Perspective of Problems and Prospects

Allen R. Austin

The stated objectives of this conference on Provide that generous increased rentals were relocation and real property acquisition are to (a) to be paid forever; and examine the experience of local, state, and federal Provide that minimal displacement should be transportation and housing agencies in implementing the controlling factor in route selection to the relocation and real property acquisition programs; exclusion of all other valid criteria. (b) identify problems with Current legislation and regulations; and (C) suggest approaches for solving We would like to see the program improved where these problems. improvements are needed, but we would also want to To this end, I, as a representative of Illinois preserve the integrity of the program by reserving and a member of the AASHTO Subcommittee on Right- the benefits of the program to those who are of-Way, will outline some of the problems facing directly displaced by acquisition and to those whose state officials charged with the responsibility of needs are demonstrable and subject to reasonable administering the Uniform Relocation Act. Proposed measurement. federal legislation, higher replacement housing pay- Although one of the purposes for this legislation ments, and regulatory changes should all be men- is to eliminate nonuniformity, the ambiguous and tioned. confusing language used throughout both bills would First and foremost among our concerns is pending accomplish just the opposite by eliminating any federal legislation, namely S. 1108 and H.R. 6256, possibility of uniform interpretation, or reasonable which would amend the Uniform Relocation Assistance administration. It is apparent that many of the and Real Property Acquisition Policies Act of 1970. provisions were drafted by persons unfamiliar with Based on replies received from 26 states regarding the everyday realities of administering a complex S. 1108, it can be said that, with the exception of set of rules and regulations, and we would, those amendments that would increase the payment therefore, recommend that changes, if any, to the limits, most of the states are opposed to the Uniform Act be adopted only after due and deliberate proposed added provisions and requirements. consideration by persons familiar with its operation. H.R. 6256 basically proposes to amend the same We are all well aware of the on-going economic sections of the act as S. 1108, but the House bill pinch on today's dollar, particularly with regard to also proposes certain additional payments, which increased interest rates on home financing. should be given careful consideration, not only At one point, mortgage interest rates throughout because of their considerable financial impact but the nation reached the 16 percent level or more and, also because of the overwhelming administrative had they remained at that level for very long, could burden they would impose on displacing agencies. have had considerable impact on future projects, Both bills also incorporate certain controversial particularly with respect to mortgage interest concepts of grave concern to displacing agencies differential payments. Even with the interest rates because they could compromise the integrity of the leveling off at 11 or 12 percent, it is conceivable program and those charged with the responsibility of that mortgage interest differential payments can administering it. approach the principal amount of an existing We believe that most of the proposed increases in mortgage as well as use most of the $15 000 maximum payments are justified, as is the removal of arbi- replacement housing supplement. The potential is trary eligibility standards regarding replacement here to either stop projects completely or otherwise housing payments. We do not believe, on the other be forced into last-resort housing programs because hand, that all relocation payments should be tied to of excessive mortgage interest differential and a rising Consumer Price Index. Nor do we believe other replacement housing payments. that unrealistic restrictions should be placed on One way to solve the problem of excessive the use of available housing resources with which to interest differential payments would be for the provide replacement housing to the detriment of the acquiring agency to be able to make a lesser and early development of projects. more equitable payment with which to pay the Most states feel that the Uniform Act as it principal amount o the new mortgage at a level exists is administratively sound and workable, has where the total monthly payment of principal and stood the test of time and public scrutiny, and has interest on the new mortgage would not exceed the proven beneficial to those directly affected by total monthly payment on the existing mortgage. public improvements. Conversely, we submit that, if Unfortunately, the formula in the Uniform Act for the provisions of the Uniform Act were to be computing the interest differential payment is very extended to those "indirectly displaced," it would specific and does not allow any flexibility. There be nearly impossible to administer the program on a is nothing to assure that interest rates will ever rational basis and at best would subject the program recede to where they were more than a year ago, or to extended and infinite litigation, not to mention that they won't go back up to 16 percent again. the financial impact on federal, state, and local Therefore, this is one area of the Uniform Act that government budgets. The proposed legislative should be amended to give acquiring agencies the changes being opposed include the following: type of flexibility suggested here. One other area that should be considered is Include reimbursement to homeowners for relief for those persons who incur interim financing increased real property taxes on replacement housing; costs in the course of purchasing or building Make homeowners of tenants at the expense of replacement housing. Many times, displaced taxpayers and then force the taxpayers to pay their homeowners must secure some interim financing with increased costs of homeownership, i.e., increased which to make a down payment for purchasing or principal, interest, taxes, insurance, and utili- building replacement housing prior to the time of ties, and make such payments ad infinitum; receiving their acquisition and replacement housing Burden displacing agencies with the task of payments. Although the costs are not great, they do demonstrating that occupancy of acquired lands was impose another out-of-pocket expense for payment of in good faith; interest on the interim financing that we are unable 38 TRB Special Report 192 to reimburse them for under the 1970 act. Payment businesses to the suburbs; and nothing that we do, of such costs will require additional enabling leg- as proposed in this latest addition to federal islation; Illinois is considering state legislation procedures, will appreciably slow such movement. I to that end. think more displaced businesses could be helped if In the area of regulatory change, suffice it to the Uniform Act and federal regulations were to be say that, in the judgment of most states, we are amended to remove the eligibility requirements for grossly overregulated. For example, in answer to the in-lieu-of moving expenses payment so that criticisms that businesses are leaving the inner businesses would have a clear-cut option to select cities as a result of displacement by highway the payment that would benefit them the most. projects, federal procedures now require the states There have been other changes in federal to "consult with the affected local government and regulations or procedures for promoting programs, with the businesses potentially subject to such as to require increasing the availability of displacement on all reasonable alternatives under housing resources as part of a highway project. consideration" on the premise that inadequate This may look good to some, but it is not the information and planning for sites in a particular mission of state highway organizations to build jurisdiction may contribute to the loss of housing to carry out highway programs. It is not businesses and employment opportunities in that area. required by the law unless there is absolutely no "The results of early consultation with housing available and, therefore, should not be an businesses to be displaced, planning for incentive additional drain on declining highway resources just packaging (e.g., tax abatement, special' financing, to have a few more housing units available from and flexible zoning and building requirements), and which displacees may choose. The tendency toward more and more regulations advisory assistance that has been or will be beyond the scope of the law adds tremendously to the furnished should be documented in the conceptual costs, workload, and responsibilities of acquiring relocation plan, and, as appropriate, in the final agencies requiring additional funding and manpower. environmental impact statement." This situation causes further difficulty in develop- I agree that we should be, and we are, offering ing the required environmental impact statements. aid and assistance to businesses. At the same time, I submit, we are not responsible for the exodus of

Real Property Acquisition and Relocation Assistance in New York

Joseph A. Fogarty

Unlike most governmental agencies, New York State provides specific instructions concerning advance acquires property needed for public purposes through notice of the hearing, how the hearing will be an administrative rather than a judicial process. conducted, and in what manner the hearing results This system allows state agencies to acquire needed will be disseminated to the attendees. lands smoothly and efficiently without lengthy court Once the hearing process has been satisfied, the proceedings. Legal authority for this method of department's engineering section prepares detailed acquisition emanates from the recently enacted construction plans and individual appropriation maps Eminent Domain Procedures Law (EDPL), which became for each property affected by the project. When effective July 1, 1978. This state law controls all these maps are received by the real estate division, eminent-domain , proceedings within the state each proposed taking is personally inspected and a regardless of why the property is needed or whether preliminary determination is made of the taking's the acquiring agency is public or quasi-public in value so that appropriate title data can be nature. The EDPL controls the acquisition secured. For takings with an estimated value of activities at all levels of government as well as more than $5000, a full title abstract is ordered, public utility companies within the state. In order but a title certificate is sufficient for properties to provide maximum flexibility, the EDPL allows valued at less than $5000. The real estate division properties to be acquired by both appropriation and is also responsible for preparing individual condemnation, but, as mentioned earlier, New York appraisals for each taking. In partial takings, a uses the appropriation process. full before-and-after appraisal must be made for all As one of the larger state acquisition agencies, takings valued at $5000 or more, while an the New York State Department of Transportation abbreviated short-form appraisal may be used if the operates on full compliance with the EDPL but estimated value is less than $5000. The division derives specific authority to acquire properties for uses the latest techniques in assessing compensable new or reconstructed highways under Section 30 of damage that emanates from the acquisition. the state's highway law. The department also works Appraised damages are finalized by including in the under other statutes in acquiring the lands that are appraisal the value of all land that is directly needed for a wide range of transportation-related acquired together with any diminution in value to projects, but the aforementioned Section 30 is, by the remaining lands. Benefits, if any, that flow to far, used most frequently. the remaining lands may be offset against damages to Prior to any acquisition, an opportunity for a the remainder but may not be offset against the public hearing to review the proposed improvement value of the land actually acquired. and its impact on the environment must be provided Appropriation maps must be filed three times before the project can be advanced. The EDPL before title transfers to the acquiring agency. TRB Special Report 192 39

The maps are filed in the main office of the other service-oriented agencies may have to be acquiring agency or department. This allows the solicited. It is most important to stress that agency to initiate appraisals and title potential relocation problems should be recognized investigations. early and that a remedial plan be developed to The maps are filed in the office of the New minimize these problems. York Department of State. This enables the agency As acquisition for the project gets under way, a to allocate funds for the taking and to extend an public announcement defining the area and the offer to the property owner. After the offer is relocation program should be made so that all made, it also allows the acquiring agency to enter prospective displacees are notified of the the lands, if vacant, to advance the project's acquisition agency's plan. Further details of the construction. program are then provided during the first official The maps are filed in the county clerk's interview, which usually occurs when the offer of office for the county in which the property is appraised compensation is extended--for tenants, located, and, at this point, title transfers to the this usually occurs during the first meeting after acquiring agency. As a prerequisite to the final the owner receives the offer. filing, the property's title must be certified by In New York, the initial or first official inter- the state's law department. view marks an important point in the relocation pro- cess as the occupant's eligibility is established on Once the full offer of appraised damages is that date and applicable benefits are fully de- extended, the property owner is given the option of scribed. For residents, a predetermined supple- either accepting the amount in full settlement of mental allowance is also presented, and the occu- the claim, or to accept the amount as an advance pants are informed about payment application re- payment with the understanding that the property quirements. In short, New York's relocation assis- owner can file a claim for additional compensation tance program is fully consistent with the Uniform through the state's Court of Claims within three Relocation Assistance and Real Property Policies Act years from the date of official notification of the of 1970 with the sole exception of not having legal property's acquisition. As an additional authority to provide last-resort housing. After nu- accommodation, property owners who seek no more than merous attempts to convince the state legislature $5000 in total damages are allowed to personally that authority was needed to provide replacement initiate and pursue a claim through the Court of housing when not readily available, the department Claims without legal counsel. Finally, property is still conducting its relocation program without owners are paid in accordance with the agreement this provision. Through the years, this has caused that has been selected after closing requirements problems from time to time, but, for the most part, have been satisfied. Some 6 percent interest is the department has been able to clear needed right- included in all payments that have been delayed of-way without undue delay. beyond the control of the property owner from the Relocation benefits are also available for date of the acquisition through the date of payment. commercial occupants, and, while direct recognition Acquisitions that involve the displacement of of increased replacement property costs cannot be residential or nonresidential property occupants made under existing laws, a wide range of moving require special attention, which is provided under cost reimbursement is available. As part of the the department's relocation assistance program. available moving expense options, displaced business Since the early 1960s, an increasing array of operations may be entitled to a payment in lieu, of relocation benefits has been developed to assist moving costs if it establishes that the business those who are displaced. An awareness of relocation cannot relocate without a substantial loss of needs is maintained throughout the planning process, patronage. Administratively, this is one of the and appropriate consideration is given to avoid most difficult payments to justify. Although causing displacements whenever possible. However, certain occupants can easily be declared eligible, in those instances where relocations are deemed others are borderline. In these instances, the necessary, the department maintains a full line of department traditionally approves the application services that are geared to ease the transition to a for payment and rejects only those that can replacement site. This is accomplished by first obviously continue to succeed in the replacement identifying potential problems as soon as possible site. after the project is approved and to initiate steps Other relocation services for commercial to promote a smooth relocation. From an operational occupants include direct referral to other federal standpoint, this is accomplished while preparing the and state agencies that specialize in commercial project's stage B relocation plan. This report, type problems (e.g., Small Business Administration which must be completed and approved before and U.S. Department of Commerce). Through the acquisitions can be commenced, provides an excellent collective efforts of these agencies we are able to vehicle to identify potential relocation problems provide counseling services, low-interest long-term and to develop feasible solutions before the loans, tax incentives, and various types of property acquisition is initiated. Often, it is information to make relocation easier. prudent to schedule a particular property for early New York has maintained an enviable record in acquisition, thereby allowing the occupant accomplishing its acquisition program and has additional time to review and explore various demonstrated a progressive attitude in solving relocation options. In other instances, depending relocation problems. on the needs of the displacees, the assistance of 40 TEB Special Report 192

Relocation Assistance Program in Oklahoma

W. Howard Armstrong

The Oklahoma Department of Transportation has been dealing with the first area of concern, far too involved in providing relocation assistance benefits often the official positions and decisions that and services to thousands of residential, business, govern all of the relocation assistance programs are nonprofit, and farm-operation relocatees displaced made without appropriate consideration for how this as a result of highway projects during the last 20 really impacts the administration and implementation years. The program has grown from one of providing of a relocation program at the grass-roots level. mere token advisory assistance to a program that now The relocation assistance program involves working plays an integral role in the planning process of with people in businesses and, as such, there is no highway projects as well as in the acquisition of way that any agency can adopt rules and regulations real property. that can govern all possible events. The position The state's relocation assistance program is con- has been taken for some time now that control of sidered a success. This success, however, is not administration and implementation of relocation measured by the number of people displaced or the assistance programs should be left up to those expediency with which this is accomplished, but by people who are directly responsible for the programs the state's ability to minimize the impact and hard- with a minimum of interference and regulations from ships created by a forced displacement. Although the federal level. Often these federal regulations, the overall objective of the Oklahoma Department of which are intended to protect displacees, eventually Transportation is to build transportation facili- end up hurting them. ties, the importance of providing humane treatment In looking at the second area, many people and understanding for those whose lives and busi- recognize the fact that commercial businesses have nesses must be disrupted in order to accomplish our very little consideration given to them under the objective is recognized. The job of the relocation relocation assistance program. The fact that you assistance program is to ensure that each and every are physically going to move the inventory of a individual who is displaced receives the maximum business from point A to point B does very little to benefits and assistance to which they are entitled. help that business, should it be necessary to buy a In doing this, the program is governed by federal replacement site or to incur major expenditures in laws, federal regulations, state laws, and state developing the replacement sites to meet their regulations, all of which deal with providing relo- business needs. With all the amendments to the cation assistance benefits and services. Uniform Act now before Congress, it is a concern It is also known that all these laws, rules, and that this area of real need has been neglected. regulations count very little unless the particular On the whole, anyone who has been involved in the requirements that a relocatee may have or that a relocation assistance programs from the standpoint business may have are considered on an individual of the displacing agency through the displacee has basis in order to minimize this impact. The had the benefit of a very good program. While it is importance is stressed to relocation agents of very rare that one would meet a displacee who really presenting a good public-relations image to wants to move, it is always rewarding to look at displacees so that the agent and the program will be displacees after they have occupied their accepted and trusted bythe displacee, and that the replacement dwelling or replacement business site displacee will have every confidence in the state's and see that they have assimilated into their new ability to guide them through this maze of laws, surroundings with a minimum of difficulty. These rules, and regulations. successful relocations uphold the Uniform Act's Perhaps the two major areas of shortcomings with declaration of policy, which provides that persons the state's program as it now exists are in the shall not suffer disproportionate injuries as a areas of (a) excessive federal regulations and (b) result of programs designed for the benefit of the the lack of equality for business displacees. In public as a whole.

Relocation Assistance in New Jersey

Joseph G. Feinberg

Among the more important changes suggested by any relocation programs in New Jersey has been the need assessment of the Uniform Relocation Act are to extend uniform relocation benefits to those eliminating uneven eligibility requirements that displaced through all publicly-assisted programs. have existed under the Uniform Relocation Act; New Jersey relocation statutes have always required increasing payments to a level more consistent with this but have encountered implementation problems in today's costs; re-sorting responsibilities for federally-assisted projects due to conflict with the relocation payment between public and private federal Uniform Relocation Act. The most glaring partners in joint projects; and integrating illustration of this problem has occurred in Section relocation rental assistance with Section 8 rental 8--substantial rehabilitation. Where a Section 8 assistance. sponsor was a public agency acquiring property for rehabilitation, uniform relocation benefits were ELIGIBILITY awarded. If the sponsor was private and no public acquisition was involved, such benefits were not Of particular importance to those administering required. Inasmuch as both types of Section 8 TRB Special Report 192 41

rehabilitation programs relied on a public subsidy, developers found this of even greater concern. precluding persons displaced through a privately While not desiring to jeopardize rehabilitation sponsored Section 8 substantial rehabilitation from projects that would provide housing for those of low relocation benefits was a completely unacceptable and moderate income (the New Jersey HFA had been a position in New Jersey; the state's position was leader among state financing agencies in this that there should be a broader interpretation of respect), the state's relocation administrators held federal law and regulations by HUD and statutory the position that the added income accruing to a change accordingly. project from the sale of the developer's equity Initially there were many who expressed concern interest for tax shelter purposes could be used, in that our position would jeopardize the financial part, to cover relocation expenses in conjunction feasibility of rehabilitation projects by adding with the public contribution. In this way, there Uniform Relocation Act level relocation costs. would be a more equitable sharing of costs in a However, the Senate bill S. 1108 and the prevailing public-purpose project wherein private financial sentiment of the conference have now clearly moved advantages could be realized. - toward the position New Jersey has held since first With the subsequent development of initial confronting this problem a number of years ago. federal regulations that still did not require equal Adoption of those provisions of S. 1108 that benefits in all Section 8 rehabilitation projects eliminate what is felt to be very superficial (neighborhood strategy areas were an exception), the distinctions in relocation eligibility between state's position was weakened because federal privately and publicly sponsored Section 8 regulations took precedence over state law in rehabilitation projects will eliminate serious federally-assisted projects. However, developers inequities that have presented very difficult anxious to receive state grants-in-aid for interface problems for the state. relocation were disposed to negotiate with the state despite the primacy of the federal regulations in a INCREASED BENEFIT LEVELS federally-subsidized project. It now appears from recent HUD regulations that there are changes with While those involved with displacement in highway respect to federal ly-subsidized rehabilitation that projects have, understandably, a somewhat different look for some of the relocation benefits to be perspective on relocation than those in housing and assumed by the developer--i.e., the private owner community development, there certainly appears to be would now be responsible for moving costs and a no argument about the need to increase benefit four-year rental assistance payment. New Jersey's levels (as called for in S. 1108) that have remained prior efforts to assign these costs to developers, the same since the passage of the 1970 act--despite at least in part, helped point the direction for the what is by now very acute inflation. Particularly recent HUD changes and similar proposals in S. 1108. important and more pertinent to the housing programs that cause displacement, however, is the need to RENTAL ASSISTANCE examine who pays for relocation when you have public-private collaboration (as in privately While there are many other dimensions to this sponsored Section 8) and a very definite profit particular relocation problem, I would close by aspect involved. singling out the state's agreement on changes in rental assistance with some of the sentiments PAYING FOR RELOCATION expressed by Joseph Barry, a major developer of Section 8 substantial rehabilitation projects in New New Jersey's situation has been considerably more Jersey, in a 1979 hearing before the Congressional complicated from this standpoint. When the federal Subcommittee on Intergovernmental Relations, and community development program first started, state H.J. Huecker of HUD in his paper for this statutes and regulations could be applied to conference. Rental assistance under the Uniform federally-assisted projects in the absence of HUD Relocation Act, which covers four years, should be regulations. M opportunity was thus provided to the same as Section 8 rental assistance, which invoke the state's position: Persons displaced by covers five years, and is renewable. As Barry Section 8 substantial rehabilitation, irrespective advocates, New Jersey prefers annual payments as of sponsor and acquisition, were eligible for opposed to the one lump sum method. New Jersey has uniform benefits. In the face of the state's always made annual payments that ensure that this position, developers and the state's own Housing rental assistance is used for the purpose intended. Finance Agency (HFA) were greatly discomforted by Consistent with these purposes, the state recently this; The HFA was apprehensive over the prospect of advised relocation agencies to seek out Section 8 having to provide for relocation costs as an item units for displacees in lieu of a four-year that could be mortgaged and possibly render a relocation rental assistance payment. project financially infeasible as a consequence;

Relocation Needs As Seen by Portsmouth Housing and Redevelopment Authority

MichaelA. Kay

With the implementation of the Uniform Relocation Act of 1970, all persons and businesses subject to Assistance and Real Property Acquisition Policies displacement from a federally-assisted program or 42 TRB Special Report 192 project were to be. provided uniform and equitable are forced to move back into substandard housing. treatment in conjunction with their relocation. AlthOugh a comprehensive counseling program is While the Portsmouth Redevelopment and Housing essential 'to carrying out a successful relocation Authority, Portsmouth, Virginia, has encountered program--and' such a program is in place at this little difficulty in its displacement and authority and many other agencies--the enticement of acquisition programs in addressing the basic goal'of receiving a check for $4000 often distorts the the act, it is strongly felt that the law and purpose for which the assistance is intended. accompanying regulations must be amended and updated One suggested method of updating the replacement in order to continue to address legislative intent housing payment schedule for tenants would be the and to make the act responsive to todays conditions establishment, by geographic area, of a schedule of and needs. Only through such revisions can the act maximum differential payments, similar to the continue to provide uniform and equitable treatment procedure used by HUD to establish and update of displacees. The following represent several fair-market rents. This would help ensure equitable revisions that have been suggested to accomplish compensation for displaced tenants, taking into this goal. account differentials in housing costs' throughout the country. A similar method could be used for MOVING EXPENSES homeowner payments that are pegged to the Consumer Price Index or some other relevant guideline. The $10 000 in-lieu-of payment for businesses has proven to be inadequate in todayes market, DOWN PAYMENT ASS ISTASCE particulaily for large business concerns. Further, computation of the average annual net earnings by The down payment assistance available to tenants and using only the two years prior to acquisition in certain others is presumably designed to encourage most instances has not provided a true picture of qualified tenants to purchase rather than rent, and the displaced firms earlier operations. During the requirement for matching funds over $2000 is this period, many former patrons have moved out of correspondingly intended to be an incentive for the area due to redevelopment and displacement tenants to become homeowners. However, the activities, thereby considerably decreasing net authority notes that this requirement has seemed to earnings. Increasing the maximum in-lieu-Of payment discourage many tenants who might have otherwise and increasing the time period for computing average become homeowners, leaving them with the feeling net earnings from two to five years (permitting that they have somehow been penalized. business concerns to select the most representative two years) would prevent windfalls as well as RELOCATION INCENTIVE FUNDING inequities. Together with the other ' needed amendments, the REPLACEMENT HOUS ING PAYMENTS problem of having to use community development block grant monies for relocation costs has placed a There is a critical need for increases in both the significant burden on other eligible programs, $15 000 replacement housing, payment for displaced oftentimes precluding a locality from undertaking homeowners and the $4000 payment to tenants. The activities necessitating displacement. Therefore, differential ceiling amount for homeowners is it is recommended that the development of incentive unreasonable in todays housing market because in funding be considered for communities undertaking the vast majority of cases this payment is large-scale community revitalization activities insufficient to permit homeowners to purchase a involving displacement. replacement dwelling free from a mortgage. Further, dispersal of the rental assistance payment for [N.B. These and other initiatives have been offered tenants and certain others in a lump sum has often by me in testimony before members of the U.S. Senate encouraged tenants to rent standard units that are Intergovernmental Relations Committee on behalf of well above their continued ability to pay. After the National Association of Housing and Redevelop- these monies have been expended, many tenants often ment Officials.]

Proposed Revisions in the Uniform Relocation Act

Dudley H. Millen

The 1970 Uniform Relocation Act, based on the expe- rate housing actually exceeded their means. rience of the District of Columbias Department of A proposed solution to this inequity may be an Housing and Community Development, has been success- increase in the range of financial assistance for ful in its intent to provide meaningful information, all categories of displacees. The District of services, and payments to displacees required to re- Columbia has incorporated programs to supplement the locate as a, result of government-related endeavors. $15 000 replacement housing payment for homeowners Agencies have been compelled to ensure the eventual up to an additional $10 000 and down payment relocation of residential displacees into suitable assistance for displaced tenants up to $11 000. and standard replacement housing and supplemental These provisions have significantly increased home payments have enhanced this process. Thus, the ownership opportunities among D.C. residents. The goals have generally been achieved. The exception Uniform Act should be amended to include similar may be the households whose financial resources dis- benefits. qualified them for subsidized housing while market- Nevertheless, this still leaves a void for TRB Special Report 192 43 displacees who relocate into rental housing. It is payment. Any amount in excess of the net moving among this group that the greatest inequities may cost would be substituted for the dislocation have occurred and an increase of the $4000 tenant allowance and would be appropriately scaled in assistance payment may not be the solution. The proportion to the size of the vacated dwelling unit. cost of current market housing may require a totally The relocation program of the Department of Hous- different and more innovative approach. ing and Community Development's Central Relocation A complete Change in the moving expense payment Assistance Office for the District of Columbia has provisions is also recommended. While the actual been most notably affected by the limited availabil- moving expense option should 'be retained, the ity of dwelling units within the financial means of dislocation allowance should be eliminated and the a preponderance of low-income households in the dis- fixed payment. increased to provide displacees $150 placee workload. However, this predicament may be for each of the first three rooms of furniture and created more by the economics of supply and demand $75 for each additional room up to $975 for 10 within the District's housing market rather than by rooms. This amount will be the maximum fixed shortcomings within the Uniform Act.

Relocation and Real Property Acquisition Implementation by Counties

Fred Rogers

There are very few small counties that have the per- The County Superintendents Association of sonnel or expertise in the field of land acquisition Illinois, cognizant of the problem with the small necessary to acquire property in accordance with Ti- counties, has through its secondary road liaison tles II and III of the Uniform Relocation Assistance recommended that the policy be instituted to allow and Real Property Acquisition Policies Act of 1970. the local agencies to acquire property valued at Several of the -larger counties (i.e., those with less than $2500 without the use of a certified a population of 200 000 or more) do acquire appraiser. This policy change has gone a long way properties in accordance with the 1970 act. The in alleviating the problems that the small local problems of acquiring trained personnel in the, field agencies encountered. Further, reduction in costs are very real. In order to have a well-organized of acquisition could be realized by increasing the program, the personnel needed are a person to write land values so acquired to $5000. legal descriptions, an appraiser, a negotiator, a In the area of relocation assistance, person for relocation assistance for residential particularly in urban renewal areas, the property, and another for relocation assistance for compensation for relocation is not commensurate with business property. the actual cost involved in relocation. Some of the In most cases, the counties or local agencies local agencies have, through their local public work with the state's department of transportation bodies, used additional funds to supplement federal in order to gain familiarity with the program. I funds in assisting with, relocation. The greater might add that the Illinois State Department of inequity is the movement of businesses from their Transportation has been very cooperative in established locations to new locations, which does, assisting local agencies in complying with federal in most cases, decrease the amount of business that requirements. It is almost mandatory that the local was realized in their previous locations. There is agencies have a person who can devote a substantial no fair and equitable method of mathematically part of his or her time, at least initially, to computing such losses of business or disruption of studying the requirements of the policies and the cash flow. procedures presented by the various agencies for In brief, the intent of the Uniform Relocation acquisition of real properties. As far as the local Assistance and Real Property Acquisition Policies agencies are concerned, it is felt that they have Act of 1970 has been adhered to and has worked as done their utmost to achieve the goals that were set well as any federal policy in place now. I believe by Congress and have in all instances to my that local agencies are, in their own way, trying to knowledge been uniform and equitable. achieve the intent of the federal legislation.

Condemnation Blight

Paul B. Rodbell

The Fifth Amendment to the U.S. Constitution pro- erty be taken for public use without just compensa- vides in part that no person shall be deprived of tion. Article III, Section 40, of the Maryland Con- property without due process of law nor shall prop- stitution provides that the General Assembly shall 44 TRB Special Report 192 enact no law authorizing private property to be PLIGHT OF THE OUTER BELTWAY taken for public use without just compensation. In other words, the government is permitted to take At one point in time the outer beltway, which was to private property if there is a public purpose, but circumscribe the existing beltway that circles the due process and other constitutional guarantees re- District of Columbia, was included within Maryland's quire that compensation be made. 20-year highway need study and was shown on all The traditional method by which the public sector relevant master plans adopted during that period of acquires private property is pursuant to an action time. Subsequently, the outer beltway was whereby the government exercises its powers of substantially shelved from the state's perspective, eminent domain. Further, even without an actual but the alignment of the outer beltway still physical acquisition, there can be a "taking"--if remained on many of the planning documents. During pursuant to a valid governmental regulation a person this period of time, a client of mine wanted to is effectively denied the use of his or her property. develop a 40-acre parcel of land within what was My focus will generally involve a discussion of shown as the outer beltway. In order to present a the impact of proposed highways upon a landowner's case to the county council, the landowner was rights and privileges, especially with regard to required to expend a substantial amount of time and Prince George's County and Montgomery County in incur substantial expense in preparing and Maryland. submitting a building permit so that it could be Condemnation blight should not be equated with a denied, thereby permitting the landowner to seek de facto taking. The term "condemnation blight" relief from the county council. This landowner was (inverse condemnation) denotes the debilitating in a financial position to put forth this effect upon the value of land caused by threatened, expenditure, but what of all of the other landowners imminent, or potential condemnation; the term "de who are similarly situated who cannot afford the facto taking" denotes a substantial interference of expense of presenting an adversarial case before a the landowner's right to enjoy his or her land. An county council? inverse condemnation is inverse in the sense that It should also be noted that in Maryland the the property owner initiates the necessary legal inclusion of a road in a master plan does not in and action in an effort to secure payment as a result of of itself constitute a taking, and one must put the "taking." Usually, a de facto taking involves a forth some type of development effort in order to physical entry of the land by the condemnor; an bring the matter to issue in terms of either ouster of the landowner; a legal interference with securing the necessary building permits or, in the the physical use, possession, or enjoyment of the alternative, payment for the deprivation suffered. property; or with the owner's right to dispose of (See Arnold v. Prince George's County, 270 Md. 285, the property. 311 A.2d 224 (1973).] The aforegoing discussion concerned the potential MASTER PLANNING DOCUMENT plight of a developer and landowner in securing building permits where the subject property is The purpose of a master plan has often been defined located within the path of a proposed road. This as guiding and accomplishing a coordinated, ad- "catch 22" situation can arise again in many justed, and harmonious development of the municipal- situations even before one approaches the building ity and its environs that will, in accordance with permit stage, i.e., at the subdivision stage. In current and future needs, best promote health, most jurisdictions the division of a large parcel of safety, order, morals, convenience, prosperity, and property requires one to subdivide the property general welfare as well as efficiency and economy in pursuant to a formulized subdivision proceeding. In the process of development. This includes, among Maryland, a recent decision by the Court of Appeals other things, adequate provision for traffic, provi- involved a subdivision process that provided that a sion of safety from fire and other dangers, adequate submitted plan of subdivision must conform with the provision for light and air, promotion of good civic relevant master plan. Therefore, if one submitted a design, wise and efficient expenditure of public subdivision plan, which in effect ignored a proposed funds, adequate provision of public utilities, and highway facility because there was no intention in other public requirements. Thus, a master plan re- fact to fund and construct the facility, the local flects proposed highway alignments, public facility planning agency would be forced to deny the locations, and land use recommendations. In most subdivision plan because of its failure to conform jurisdictions the elected county council enacts the with the relevant master plan. This action was master plan with input from the local planning notwithstanding the fact that the proposed facility agency. In Prince George's and Montgomery Counties, was not to be funded or pursued within the forsee- the Maryland-National Capital Park and Planning Com- able future. (See Board of County Commissioners of mission is the planning arm of the county. Cecil Co. v. Gaster, 401 A.2d 666.) Within the jurisdiction of the Maryland -National Capital Park and Planning Commission, once a master LAND RESERVATION plan for a highway has been adopted, no public road, building, or utility can be located, constructed, or In both Prince George's and Montgomery Counties, authorized without the approval of the planning when a parcel of land is being processed pursuant to commission. Furthermore, after the adoption of the the local subdivision procedures, the planning master plan, no building permit shall be issued for commission has the authority to place the subject any structure on any land within the planned property in "reservation" for a period not to exceed acquisition lines of a proposed highway or street three years (if the property is to be acquired for a unless (a) the county council finds that the entire public purpose). While the land is in reservation, property of the owner cannot yield a reasonable no building can be erected on the land. Also, no return (unless the permit is granted) and (b) the trees, topsoil, or cover may be removed or issuance of the permit is required by the destroyed; no storm drainage structure shall be consideration, of reasonable justice and equity after built so as to discharge water onto the reserved balancing the interest of the county in preserving land. In other words, land placed in reservation the integrity of the master plan against the shall not be put to any use whatsoever without the interest of the owner. approval of the planning commission. The landowner, although not allowed to put the land to use, is TRB Special Report 192 45

required to maintain the property in accordance with of just compensation. The court ruled that the county law. The only benefit obtained as a result reservation was tantamount to a taking because the is that, during the period of reservation, the land reservation inhibited all beneficial use of the land shall be exempt from all state, county, and local for a period of three years. taxes. If, at the end of three years, the land has not been acquired for public use or condemnation CONCLUS ION proceedings have not been instituted, the reserva- tion becomes void unless the landowner consents to Property rights have taken a serious downturn since renewing the reservation for an additional three the birth of this great nation. There once was a years. time when a person could use his or her property in If the landowner has no plans for the land, wants any manner short of constituting a nuisance. As we this tax liability abbrogated, and does not want to have moved from a pure democracy to a social sell the land, the reservation can be beneficial. democracy, the rights of the property owner have However, if the landowner wants to sell the land or been measured against the societal good. use it for any purpose, chances are that the Condemnation blight can have a most devastating landowner is injured more by the reservation than effect on rights in property. In the more serious benefited by the tax break. cases the owner often cannot sell, lease, or derive In the case of Maryland-National Capital Park and any income from the property. Yet the property Planning Commission v. Chadwick, 405 A.2d 241, owner must generally continue to pay taxes, meet (1979), the Court of Appeals used the no-reason- mortgage installments, and suffer all of the other able-use test to determine that the Maryland- burdens of ownership of real property. National Capital Park and Planning Commission's I believe that the scales of fairness must begin reservation of property for a period of up to three to tip in favor of the landowner. The acquisition years was tantamount to a taking. In Chadwick, the and construction of a public improvement, once de- planning commission placed Chadwick's land in a velopment has occurred, is still possible, only more public reservation without his consent. Chadwick expensive. Where a proposed road, for example, is filed suit (a) seeking a writ of mandamus directing designed to benefit the entire county, I would pro- the planning commission to approve their preliminary pose that the added cost of condemnation because de- subdivision plan and (b) requesting a declaratory velopment has occurred should be spread over the en- judgment that the reservation of the property is an tire public rather than unduly burdening a single unconstitutional taking of property without payment landowner.

Case Studies

Attitudes, Opinions, and Experiences of relocation program generally had negative attitudes toward the whole highway project. Relocatees in Texas Displaced by Highways Some 44 percent of the respondents, on the other hand, were pleased with the relocation program even Under the 1970 Relocation Assistance though many had bad or mixed feelings about the highway improvement and the news that they would be Program displaced. Another 44 percent of the respondents gave the program a fair rating, while the remaining Jesse BufJIngton 12 percent said they did not know. More than half of the respondents indicated that BUSINESS AND INSTITUTIONS financial aid was the most helpful relocation service rendered, but financial assistance was also A sample of 108 business and institutional the most often mentioned problem with the relocation proprietors who were displaced between 1971 and 1972 program. Less than half the respondents who owned was interviewed to evaluate the relocation program. their original property felt that they received More than 75 percent of those who were displaced by adequate compensation for it. the highway construction relocated their facilities Among the recommendations of the study were (a) and stayed in operation for at least a while. The that affected citizens should be informed at the majority of those who relocated felt that they had earliest practical date of the need for the proposed improved the overall quality of their facilities and highway improvements and of the specific provisions that neighborhood conditions were at least as good for relocation assistance; (b) that greater efforts or better than at their former location. Some 54 should be made to assist relocatees in finding percent of those interviewed had difficulty finding suitable replacement facilities; (c) that greater a replacement location and more than 50 percent of efforts be made to ensure that the property those who did not reopen their businesses cited appraisals are updated so that the owners will their inability to find a suitable replacement receive fair compensation; and (d) that the minimum facility as a primary reason for closing. official time given to move should be extended from Only 10 percent of the respondents gave the three months to six months. relocation program a bad rating; almost all of these were against the highway improvements before URBAN RESIDENTS IN LOW-VALUED HOUSING relocation and were upset with the news that they would be displaced. Thus, those upset with the Another study analyzed the experience of residents 46 TRB Special Report 192 displaced from low-valued housing (under $15 000) Relocation of Residents Displaced by for highway construction in Austin and Houston, Texas. The 171 respondents (all of the households Construction of 1-205 in Washington available in the study areas) were relocated under the 1968 or 1970 provisions that afford relocatees Evan Iverson housing comparable to their previous housing. About 50 percent of the respondents were owners and the This study examines the effects of relocation (in other 50 percent were tenants. Other characteris- Clark County, Washington) including the adequacy of tics included (a) 67 percent were males; (b) 55 per- housing before and after relocation, benefits cent were Anglos, 33 percent blacks, and 12 percent provided by, the state, opinions of relocatees Mexican-Mericans and other nationalities; (c) 73 concerning their new housing and neighborhoods, and percent were fully employed and 14 percent retired; opinions of the type and amount of assistance (d) the median age was 49 years; (e) median family provided throughout the relocation process. The income was $7000; and (f) households averaged 3.2 purpose of the study is to provide citizens, people (2.6 for owners and 3.8 for renters). A to- planners, and public officials with factual and tal of 126 (73 percent of the 171) respondents up- attitudinal information derived from the actual graded their housing. The others relocated in hous- experience of families who were relocated under ing comparable to their previous housing and a few recent federal and state statutes. in less-expensive housing. Of the 96 respondents to the survey, 42 owned Upgrading affected the relocate&s housingcosts, their own home prior to relocation, but practically net worth, and financial position. Most (83 all of the relocatees acquired dwelling units of percent) had higher housing costs; for example, their own in the relocation process. The dwelling mortgage payments by 42 tenants who were now units acquired after relocation were newer and of owners. (Half of the original tenants became approximately the same size as their previous homes. owners; 10 percent of the owners became tenants.) The appraised market value of the dwelling units Transportation and utility costs for each household of the owners was in some instances sufficient averaged $8 more per month after relocation. Of the without supplemental payments to permit owners to 142 respondents who indicated changes in net worth, acquire new housing, but it was necessary to provide 132 (93 percent) experienced an increase. The payments in addition to the assessed value for 64 average change in net worth was $1485. Despite the percent of the owners to enable them to acquire large proportion reporting increases in net worth satisfactory housing. The average amount of the (132 of 142 respondents), 38 percent felt that they housing supplement was $1564. were worse off financially and 22 percent thought Of the renters, 82 percent qualified for and they were better off. Of the Anglos, 40 percent chose to receive a payment to purchase replacement thought their financial position was worse; 21 dwellings. The average amount received was $1515. percent indicated improvement. For non-Anglos, 36 Some 79 percent of the families interviewed percent indicated financial worsening; 24 percent indicated that they considered the current state reported improvement. relocation program to be adequate. The information Although 65 percent of the relocatees indicated received about the relocation process was also that - they had been upset about the prospects of described as satisfactory. moving, only 23 percent were upset about the entire One of the significant findings, as far as the relocation experience. Most relocatees were financial impacts of relocation are concerned, was satisfied with the payments, information, and the upgrading of the housing that occurred as a services received. About 75 percent gave the result of the relocation process. The renters had program a good or very good rating. the option to receive a rental supplement for new living quarters, if such proved to be necessary, or RESIDENTS DISPLACED BY HIGHWAYS to receive.a single payment that could be applied to the purchase of a dwelling unit. About 82 percent A third study analyzed the experiences of residents (44) of the renters qualified for and 'chose to relocated from their homes as a result of highway receive a payment to purchase replacement dwellings; location in several areas of Texas. Interviews were 9 percent (5) of the respondents elected to remain conducted with 165 households (58 percent were as renters and accept the additional rental homeowners and 42 percent were renters) from the replacement supplements. These five respondents 1130 households relocated in the state between resided in mobile homes prior to and after the January 1971 and January 1973 under the provisions relocation. Another 9 percent of the renters of the Uniform Relocation Assistance and Real received no rental supplement because they had not Property Acquisition Policies Act of 1970. The lived in their residence for the period of time typical respondent was Anglo, employed, male, and required (90 days). All of the respondents were about 48 years old. He was a member of a two-person eligible to receive the moving allowance. household with annual income of $6000-$8000. The The structural changes examined in this study median value for acquired properties was focused primarily on the age and size of the approximately $7700 ($8500 for owners and $6800 for dwelling. The age of the residences after renters). Before relocation, monthly housing relocation was generally newer, with 72 percent of payments averaged $50 for homeowners and $80 for the respondents living in residences 15 years of age renters. After relocation, payments rose to $90 and or less after relocation. This compares with 59 $105, respectively. percent prior to relocation. The number of bedrooms Relocation housing payments approved under the per residence also increased from 2 to 2.5. The 1970 act enabled at least 60 percent of the average number of rooms per residence remained the respondents to upgrade their housing accommodations same. By using these factors, the residences after and neighborhoods. About 82 percent of the relocation represented an upgrading over those lived respondents liked their new homes and neighborhoods in prior to relocation. about the same as or better than their previous homes. Supplemental housing payments also encouraged homeownership. More than half (41 of 70) tenants became owners after relocation. Only 11 percent (10 of 90) owners became tenants. TRB Special Report 192 47

Residental Relocation: Impact of ing. Emphasis on improving these aspects of the re- location program can, then, lead to improvements in Allowances and Procedures in Ohio the general attitudes about displacement. The economic analysis revealed that the Da'id Colony relocation program had served as a vehicle for renters to become homeowners. Owners, too, were This study analyzed the experiences of residents found to have benefited. In most cases they had displaced from their dwellings for highway upgraded their housing; in fact, 75 percent of the construction in Cleveland, Ohio. The findings from owners questioned had purchased homes of greater interviews with 250 respondents (i.e., all of the value than their previous dwellings. Yet among prospective candidates for relocation housing homeowners, the largest group of those dissatisfied payments relocated between July 1, 1970, and with relocation claimed that the relocation housing February 15, 1972) corroborate those reported in an payments had been inadequate. In addition, the data earlier study of 228 respondents who were relocated gathered in this study seem to imply that the social before pertinent federal and state legislation impact of a change in physical dwelling is not sig- provided funds, for replacement housing that may be nificant, but a change in neighborhood is. Prefer- more costly than that acquired at fair market value. ences concerning neighborhood comparability were Relocatees purchased homes 'with a median value found to influence the respondents attitudes toward about $5000 higher than the value of the housing the entire relocation experience. The percentage of from which they were relocated. More than 75 respondents who preferred their replacement neigh- percent of those who bought homes costing more than borhood was much lower than the percentage that pre- $20 000 added personal funds to the state' allowances ferred their replacement housing. The effects of to do so; while none of those whose new cost this preference were revealed repeatedly in cross less than $10 000 used personal funds. tabulations of these responses with those concerning The negative aspects of relocation, initially attitudes about the administration of the relocation felt by, more than 60 percent of •those responding, program. continued to affect 36 percent of the respondents. Again using a survey technique to collect data, Concerns included complaints about the physical in a second study, we analyzed adjustment of renter strains of moving and loss of contact with familiar displacees from two standpoints: their mobility and surroundings , and acquaintances (mostly by older the quality of their current housing. It was relocatees), higher interest rates on new mortgages, concluded that .relocation procedures under the 1970 vandalism at the project sites, timing of relocation act did not appear to have significantly influenced payments, and inability to repurchase homes or either the length of residence in the original treasured fixtures and appurtenances. replacement housing or a decision to move from it. Despite monthly housing payment increases for 90 It was also concluded that the manner ..in which households, only half of these households thought relocation housing payments had been made to that their financial position had worsened. Gener- renters--whether in a lump sum or in annual ally, most respondents thought that (a) housing and allotments--had had no significant effect on how moving payments were adequate; (b) the relocation these payments had been used or on the length of program and relations with the state highway depart- time a renter had remained in the replacement ment were either good or very good; and (c) the housing. state highway department successfully solved most of A third study on relocation conducted in 1978 the problems and provided most of the services as- evaluates a portable audiovisual system for use by sociated with relocation. Some unsolved problems, right-of-way agents at public meetings, in meetings such as financial assistance or dislike of replace- between agents and displacees in their homes, and in ment homes, mentioned by relocatees were not capable the training of agents and other personnel. The of solution by the highway department. agents overwhelmingly endorsed the slide show as an aid in explaining all aspects of the relocation program to displacees.

Relocation Research in Virginia Michael A. Perfater and Gary R. Allen Attitudes and Experiences of Relocated As part of its program of research on the problems Household Heads: A Causal Analysis associated with the relocation of people displaced because of highway construction, the Virginia High- Clarence H. Thornton way and Transportation Research Council undertook a statewide study in 1975 to further the understanding New highway projects have disrupted community life, of the issues surrounding displacement. For the divided economic and cultural areas, and uprooted study, a sample comprising displacees from both ur- many families from surroundings once familiar to ban and rural communities dispersed over a wide geo- them. This paper identifies those factors that graphic area were contacted to obtain data for an either distract from or contribute to positive analysis of the social and economic effects of dis- feelings following relocation. placement. The analysis showed less than one relo- catee in five to have a negative overall feeling to- STUDY AREA AND SNIPLE ward the relocation experience, even though almost one-third of them felt the total payment had been This study is part of a much larger study of the too small. Although the relocation experience socioeconomic impact of a segment of the Interstate evokes a general emotional distress, certain por- highway system on a predominately black community tions of the relocation program were found to have known as Scotlandville. Scotlandville is a contributed significantly to the overall negative partially unincorporated, low-density residential feelings. Foremost among these were inadequacies in area of approximately 8 miles2 north of the (a) the total payment, (b) the notice to vacate, and central business district of Baton Rouge, (c) the help given in finding a replacement dwell- Louisiana. It is a very stable community with a 48 TRB Special Report 192 population of nearly 23 000; about 65 percent of its relocatees were asked about how happy they were residents are homeowners. With the exception of two about having moved for the highway. It should be middle-income residential subdivisions, mainly noted that there were differences by tenure status, inhabited by black professional educators, the as well as by the intensity of feelings. The group community is relatively poor. The median family expressing the least favorable attitude was the income for the area was approximately $6530 at the renters. Nearly one-fourth of these persons were beginning of the study (1972). Approximately 27 sorry about having moved. The corresponding percent of the families are below the established percentages for homeowners and those who switched poverty line, and 16 percent of all families are from renting to owning are 12 percent and 11 headed by females. percent, respectively. Because Scotlandville is located between large industrial and residential areas to its immediate RESULTS north and south, very heavy traffic is generated along the main thoroughfares. The result has been a For renters, the results of this analysis indicate severe traffic congestion problem. The segment of that money was the chief problem. While counseling the Interstate highway system known as the partially reduced the number of problems encoun- Scotlandville Bypass is designed to intercept much tered, the financial assistance package was per- of this through traffic and channel it onto a ceived by many of these relocatees as insufficient. partially elevated expressway. To build the bypass, Apparently, the displeasure of this group stems from of course, entails displacing a number of residences their own financial woes and their perception of the and small businesses. In 1972, the Louisiana inadequacy of the financial assistance given to them Department of Transportation and Development by the highway department. both of these influences estimated that as many as 500 households were restricted their choice of housing units, which, in located within the highway right-of-way. With turn, lowered their level of satisfaction with hav- subsequent changes in the location of the ing moved. The counseling services they received, right-of-way, this figure was reduced to 327. To however, should not be ignored since these services date, only 214 households and 21 businesses have served to minimize their problems. The majority of actually moved. the renters (68 percent), however, remained in Scot- By using the names and addresses of all landville following relocation. There is a limited relocatees supplied by the highway department, we number of quality rental units in the area, and contacted and interviewed 172 (80 percent) of the their lower level of satisfaction with their new relocated households. These households comprise our dwellings may have been tied to this problem. In study sample. Among these households, 52 percent any case, more attention should be paid to tenant- were homeowners, 35 percent were renters, 12 percent relocatees--e.g., through consultation with other were former renters who purchased new homes, and governmental agencies where appropriate--so that only 1 percent were former homeowners who later rent supplement payments are not confined to a sin- became renters. The median income level of gle period or amount. relocatees is $5714. In a follow-up survey, the Part 5 Participants Hajji Abdullah Ahmad, North Central Unity Nonprofit - Harold Huecker, U.S. Department of Housing and Urban Community Corp., Inc., Philadelphia Development David L. Alberts, National Association of Housing and Redevelopment Officials, Washington, D.C. Evan A. Iverson, Washington State Department of Gary Allen, Virginia Highway and Transportation Re- Transportation, Olympia search Council, Charlottesville Louis S. Allen, Jr., North Carolina Department of Joseph F. ,Jaskiewicz, Washington (D.C.) Metropolitan Transportation, Raleigh Area Transit Authority Joan Allman, U.S. Department of Housing and Urban Larry R. Joachim, South Dakota Department of Trans- Development portation, Pierre Howard Armstrong, Oklahoma Department of Transporta- tion, Oklahoma City Michael A. Kay, Portsmouth Redevelopment and Housing Robert L. Art, International Right-of-Way Associa- Authority, Portsmouth, Virginia tion, Columbus, Ohio Wayne Kennedy, Federal Highway Administration, U.S. Allen R. Austin, Illinois Department of Transporta- Department of Transportation tion, Springfield Gar Kissinger, Florida Department of Transportation, Tallahassee James E. Bailey, West Virginia Department of Trans- Merritt R. Kotin, Chicago Transit Authority portation, Charleston David R. Levin, Federal Highway Administration, U.S. Irving Brand, OTA-Real Estate Group, Miami Pattie Brown, U.S. Department of Housing and Urban Department of Transportation Development Peter Levin, U.S. Senate Roland Brown, U.S. Department of Housing and Urban John Lindsay, Newsweek Magazine, Washington, D.C. Bevelyn Lundy, Friends Neighborhood Guild, Phila- Development Jesse L. Buffington, Texas Transportation Institute, delphia Texas A&M University, College Station Frances M. Lunney, Arlington County Government, Ar- Jon E. Burkhardt, Ecosometrics, Inc., Bethesda, lington, Virginia Maryland William Bynum, Federal Highway Administration, U.S. Kenneth R. Mak, U.S. Bureau of Land Management Department of Transportation Peter J. Malloy, Maryland Department of Transporta- tion, Baltimore John J. Callahan, U.S. Senate Daniel R. Mandelker, School of Law, Washington Uni- Georgia Carter, U.S. Department of Housing and Urban versity, St. Louis Development Denham A. Maupin, Washington (D.C.) Metropolitan P. Caton, New Jersey Department of Transportation, Area Transit Authority Bruce D. McDowell, Advisory Commission on Intergov- Trenton David Cavanaugh, Federal Highway Administration, ernmental Relations, Washington, D.C. U.S. Department of Transportation Walter A. McFarlane, Office of the Attorney General, Pauline Clark, U.S. Coast Guard, Clinton, Maryland Richmond, Virginia David Colony, University of Toledo, Ohio James W. McMahon, U.S. General Services Administra- Martin Convisser, U.S. Department of Transportation tion George Cotterman, Ohio Department of Transportation, W.L. Mertz, Federal Highway Administration, U.S. De- Columbus partment of Transportation Dudley H. Millen, District of Columbia Department of Terry W. Donavan, Continental Field Service Corp., Housing and Community Development Elmsford, New York Ola Mitchell, Friends Neighborhood Guild, Phila- Travis E. Dye, Mississippi State Highway Department, delphia Jackson W.D. Moon, North Carolina Department of Transporta- tion, Raleigh Douglas Feaver, Washington Post, Washington, D.0 Robert J. Moore, Federal Highway Administration, Joseph Feinberg, Bureau of Housing Services, New U.S. Department of Transportation Jersey Department of Transportation Falcon A. Morgan, Louisiana Department of Transpor- Joseph A. Fogarty, New York State Department of tation and Development, Baton Rouge Transportation, Albany Thomas F. O'Byrne, Pennsylvania Department of Trans- Max E. Follmer, U.S. Department of the Army portation, Harrisburg Hays B. Gamble, Pennsylvania State University, Uni- Linda A. Park, City of Cleveland, Ohio versity Park C.E. Penn, West Virginia Department of Transporta- Melvin Geffner, U.S. Department of Housing and Urban tion, Charleston Development Mike Perfater, Virginia Highway and Transportation Jane G. Goodspeed, City of Fort Worth, Texas Research Council, Charlottesville Robert Poinsett, Fish and Wildlife Services, U.S. Robert Hadley, U.S. General Accounting Office Department of the Interior Hester S. Lewis, Virginia Department of Highways and Transportation, Richmond Jack Reefer, Pennsylvania Department of Transporta- Ernest Holsendolph, New York Times, Washington, D.C. tion, Harrisburg

50 TRB Special Report 192 51

V. Wayne Rizzo, Delaware Department of Transporta- AndrewJ. Taylor, Jr., Delaware Department of Trans- tion, Dover portation, Dover Reginald H. Robinson, Pennsylvania Avenue Develop- Floyd I. Thiel, formerly of the Transportation Re- ment Corporation, Washington, D.C. search Board, Washington, D.C. Paul B. Rodbell, Myers and Billingsley, Riverdale, Dianne Titsos, Federal Highway Administration, U.S. Maryland Department of Transportation Fred Rogers, Peoria County Highway Department, Robert B. Thurber, U.S. Department of Transportation Peoria, Illinois Clarence H. Thornton, Southern University, Baton K. Neil Ross, Federal Highway Administration, U.S. Rouge, Louisiana Department of Transportation, Baltimore Carrie Turner, Friends Neighborhood Guild, Phila- delphia D. Sarno, Massachusetts Redevelopment Authority, Boston Raymond Wardwell, Michigan Department of Transporta- Gerald Saunders, Federal Highway Administration, tion, Lansing U.S. Department of Transportation Al West, U.S. Department of Housing and Urban Devel- Herbert S. Selesnick, Harbridge House, Boston opment Frank T. Shenck, Pennsylvania Department of Trans- Elizabeth Whipp, County Fast Printing Service, For- portation, Harrisburg estville, Maryland Marshall A. Schy, U.S. Environmental Protection M. Eugene White, North Carolina Department of Trans- Agency portation, Raleigh Paul Sinkovic, Federal Highway Administration, U.S. Nadirah Williams, West Polar NAC, Philadelphia Department of Transportation, Baltimore Max M. Williams, Utah Department of Transportation, Jerry Smedley, Pennsylvania Avenue Development Cor- Salt Lake City poration, Washington, D.C. Floyd Wise, Missouri Highway and Transportation De- Dru Smith, U.S. Senate Committee on Intergovern- partment, Jefferson City mental Relations Chip Wood, Federal Highway Administration, U.S. De- Ted Smith, U.S. Department of Housing and Urban De- partment of Transportation velopment Douglas Wubbels, Federal Highway Administration, Gerald L. Starkweather, Federal Highway Administra- U.S. Department of Transportation tion, U.S. Department of Transportation Jerry W. Sutherland, U.S. Department of Agriculture Forest Service The Transportation Research Board is an agency of the National Re- science and technology with the Academy's purposes of furthering search Council, which serves the National Academy of Sciences and knowledge and of advising the federal government. The Council the National Academy of Engineering. The Board's purpose is to operates in accordance with general policies determined by the stimulate research concerning the nature and performance of trans- Academy under the authority of its Congressional charter, which portation systems, to disseminate information that the research pro- establishes the Academy as a private, nonprofit, self-governing mem- duces, and to encourage the application of appropriate research find- bership corporation. The Council has been the principal operating ings. The Board's program is carried out by more than 250 commit- agency of both the National Academy of Sciences and the National tees, task forces, and panels composed of more than 3100 adminis- Academy of Engineering in the conduct of their services to the gov- trators, engineers, social scientists, attorneys, educators, and others ernment, the public, and the scientific and engineering communities. concerned with transportation; they serve without compensation. It is administered jointly by both Academies and the Institute of The program is supported by state transportation and highway de- Medicine. partments, the modal administrations of the U.S. Department of Transportation, the Association of American Railroads, and other The National Academy of.Sciences was established in 1863 by organizations and individuals interested in the development of trans- Act of Congress as a private, nonprofit, self-governing membership portation. corporation for the furtherance of science and technology, required to advise the federal government upon request within its fields of The Transportation Research Board operates within the Commis- competence. Under its corporate charter, the Academy established sion on Sociotechnical Systems of the National Research Council. the National Research Council in 1916, the National Academy of The National Research Council was established by the National Engineering in 1964, and the Institute of Medicine in 1970. Academy of Sciences in 1916 to associate the broad community of