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![handle is hein.gao/gaobabkrc0001 and id is 1 raw text is:
RELEASERESTRICTED _ Not to be the General /12 Ps
Accounfdrto Is teIe-
by the Cevel anNERAL 0F-T' t 7a Hon
by the Deprt ent ofoun
B-1871 RELEASED
DEC 14 1970
Dear Senator Saxbe.
On July 13, 1970, you referred to US for Consideration two tele-
grams in which it was proposed that our Office investigate the purchase
of the Crestv~ew Apartments by the Cleveland Metropolitan Housing
0 (0L Authority (Authority). This purchase was made under the low-rent public
~ ~'P~housing program administered by the Department of Housing and Urban
Development (HUD). Our examination into this purchase was directed
toward whether the apartments and the site were suitable for housing
the elderly and whether the acquisition cost was reasonable.
We examined pertinent records and files of HUD, the Authority,
and the developer of Crestview. We also interviewed officials of HUD's
Chicago Regional Office and the Authority and representatives of the
Cleveland Air Pollution Board, Old Brooklyn Citizens Association,
Cleveland Real Estate Board, and tenants of Crestview.
We concluded that the apartments and the site$ although containing
certain undesirable features, were suitable for housing the elderly and
that the total acquisition cost--all directly related costs, including
administrative costs of the Authority, in acquiring or constructing a
project--was reasonable when compared with the cost of other low-rent
housing projects for the elderly. Representatives of the Cleveland
Real Estate Board informed us, however that a buyer with time to shop
around and without an immediate need might have been able to purchase
apartments like Crestview for a lower price,
The United States Housing Act of 1937, as amended (42 U.S.C. 1401),
authorizes HUD to piovide financial and technical assistance to local
housing authorities to plan, build and/or acquire, own2 and operate
low-rent public housing projects. HUD provides financial assistance in
the form of loans for development and in the form of contributions
(subsidies) under contracts with local housing authorities. The contracts
provide for annual contributions which, if made in the maximum allowable
amounts, woald be sufficient to pay the principal and interest on bonds
and notes sold by the authorities to obtain funds to finance the cost
of developing the pzo]ects.
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