"I must point out that we do not simply have a housing problem in this city. We have a markedly abnormal real estate market, influenced by forces unique to Cambridge."

(In recent months, much public debate in Cambridge' has centered around the City's "housing crisis," primarily about the shortage of housing for low-income families. Here is the text of a speech which City Manager James L. Sullivan delivered to a City Council hearing on housing last week.)

THIS REPORT to you this evening is presented as an interim report of progress by the City Manager for the purpose of placing into perspective the Housing Problem in the City and the action being undertaken by the City Managers Task Force on Housing in an attempt to define and overcome the obstacles to providing decent reasonable lousing for the citizens of Cambridge.

The problem is of long standing and is becoming increasingly worse due to the inflationary spiral and also forces particularly peculiar to Cambridge. A figure that must be kept constantly in mind in evaluating our present condition is that almost 85% of the housing units in Cambridge are over 40 years of age.

I must point out that we do not simply have a housing problem in this city. We have a markedly abnormal real estate market, influenced by forces unique to Cambridge. We have intense pressure on existing housing, and inflation in the price of it. We have a relatively inactive new construction market, in spite of intense demand. Part of the reason for this is that Cambridge is already a densely developed city, Scarcity and cost of land on which to expand the supply of housing is a constant barrier. We have families forced to leave Cambridge, or to tolerate poor housing conditions at continually increasing rents, because they have no other choice. I purpose tonight to face the housing crisis and a pledge to do everything I can as the City Manager to solve it.

I am here tonight to state as a matter of public policy that the housing crisis is not simply an unfortunate but predictable result of 'the law of supply and demand" or "an economic fact of life." We cannot be satisfied merely to remark that the lack of adequate housing at reasonable prices is a natural consequence of the fact that more people want to live in Cambridge than the number of units available can absorb. New construction to expand the supply of housing is a need for the highest priority, but not simply so that more people can live here. We must protect the ability of long-term residents of Cambridge to stay here. What we must do, as a matter of public responsibility, is to insure that housing is produced that the private market will not produce under any circumstances--housing for the elderly on small, fixed incomes, for large families and families with limited incomes who cannot pay the price the market must charge. But as I have noted, there is a limit to the amount of new construction that land in Cambridge, developed to its highest tolerable density, can support. Not everyone can live here; there will inevitably have to be hard choices made. There is no choice to be made for or against a 'free" market; no market in a just society has ever been free to abuse the people it serves. And I will declare now, as a matter of public policy, that the City has no other possible choice than to protect first those who are least able to protect themselves.

The City government's role in housing is complex, but one element of it emerges clearly. The most direct way we can insure an adequate supply of housing at reasonable cost is to produce one. We must stop talking about "low-cost" housing, at least in the short range; there simply is no such thing, given the high costs of land, labor, materials and mortgage financing. What we can prouce is housing for for low and moderate income families. The only way we have to do that, at present, is to build housing whose cost to those who live in it can be reduced with public money to a level consistent with their ability to pay. That solution, obviously, cannot be implemented by any city alone. Public money in adequate amounts to reduce the cost of land and operating expenses simply is not in our hands at the municipal level of government. It can--and must--be put into our hands by the Commonwealth and the Federal government. That has not been done so far. (Cited figures on national spending for housing in comparison to other purposes). A complete answer to the Cambridge housing crisis, and the housing problem in any city, depends ultimately on a fundamental, dramatic shifting a national spending priorities.

POINTING A FINGER of responsibility at the Federal and State governments, however, does not excuse us from using the tools we now have. The programs administered by the Cambridge Housing Authority are the means by which the public sector can most directly prove that it has answers to the problem, and we have fallen intolerably short of providing that proof. As of today, we have used only about 200 of the 1500 new units allocated to the Authority by the Federal Government. The Modernization Program for Public Housing, approved only this month, took seven full months to make its way through local and Federas agencies. I think we must all commit ourselves to the simple but forceful position articulated by the late Senator Robert Kennedy in response to the same kinds of problem: we find this unacceptable, and we must do more. I propose that we do it in the following ways.

First, we must have the remaining 270 units, allocate to the Authority under the short-team lease program, under lease and occupied no later than the end of the summer. If additional units will be available which cannot be put under lease until after that time, the Authority should make application quickly for additional Federal authorizations. Allocations for another program, which allows leases up to 40 years to be made by the Authority, will be sought concurrently.

Second, we must have plans finalized and beginning to be implemented as soon as humanly possible to use the other 1100 units presently allocated, for new construction and for acquisition and rehabilitation of existing housing. This means we must all move quickly and effectively than we have been. We must not build more institutional "projects," isolated from the rest of the community, no matter how hard that is to do under restrictive Federal cost and design regulations. We must stop talking about the need for more housing for low-income families, but objecting when a site in our own neighborhood is proposed. The Council and the Authority must respond promptly and positively to proposals put before them. We have not yet been able to meet the housing must go beyond that difficult task to the even more challenging problem of housing for low-income large families. Failure to do that has been a weakness of public housing programs in city after city, but we cannot let it be here.

Meeting that challenge will take more creativity and boldness than we have used. We should create opportunities for home ownership for low-income families, who can build up equity in apartments they occupy as purchasers rather than as tenants. We must shape the physical design and administrative procedures of public housing to make that possible. We should shift our thinking about management responsibilities to provide for cooperative management or even ownership of publicly-subsidized housing by tenants. We should be wiling to test new methods of producing techniques, scattered-site development, the "turnkey" method of housing built more quickly and efficiently by private builders and then sold to the housing Authority upon completion. All of these possibilities are before us now in the form of authorizing legislation. We have only to use them imaginatively, so that the product of public action in housing can be imitated rather than rediculated.

None of this will be possible without changes in the staff capability of the Housing Authority. The Authority now, with 1700 units to manage and several new programs to initiate, has one less staff member than when it administered a single project. If recruitment is a problem, we can solve it; it staff cannot be found, we can contract for services. The job is there to be done; we must have people to do it.

If we are totally successful in revitalizing our public housing program, only part of the job will be done. The two universities which have done so much to make Cambridge what it is--both good and bad--have a special responsibility. It is futile to argue much longer about how much or which parts of the pressures on the housing market are generated by students, faculty, staff and spin-off activities traceable to Harvard and MIT. The point is not whether the response of the universities will be proportional to the degree to which they are responsible for the problem. The question is whether they will do all they can, and should.

FIRST, THEY must build more housing for their students and faculty because the available housing simply cannot absorb them, and because the students themselves cannot really be served the housing market they find in Cambridge. When they do enter it, they are forced to accept housing conditions fully as bad as those experienced by other residents. This is equally true of single or married graduate students and younger faculty or staff members, who often live on genuinely moderate incomes.

Second, the universities should adopt and announce publicly a policy, of no future acquisition of residential property in Cambridge. They should pledge maximum development of land now held in institutional ownership before other, nonresidential, land is acquired. Clearly, corporation with endowments in the hundreds of millions of dollars do not need Cambridge real estate as part of their investment portfolio. They should be prepared to accept the costs of maintaining rents at moderate levels, in housing units they have already acquired for future development, as a cost of doing business.