60 
is a well publicized Finnish new town undertaken in response to the 
post war housing shortage and is often cited for its excellence of 
design and ability to achieve an effective socioeconomic balance of 
population.” : 
Up until 2 years ago, contemporary new town development in the 
United States has been exclusively a creature of private enterprise, 
and its origins were in the post-World War II period. Although a 
housing shortage followed World War II, the economic condition was 
one of growth rather than recession and large-scale merchant-builders 
moved into this favorable market. 
These merchant-builders differed from the earlier developers who 
had initiated the suburban movement primarily in terms of scale of 
operation. The merger of land acquisition and improvement with 
standardization and merchandising of residential construction per- 
mitted more efficient production of housing units and greater returns 
on invested capital. The result of the merchant-builders operations 
during the late 1940’s and 1950’s was the full maturization of the 
suburban movement which had begun decades before.” 
During the late 1950’s and 1960’s the contemporary community 
developer emerged with a new product—total environment—which 
was designed to answer the criticisms which have been directed at 
suburbia while retaiming profitability.* Contemporary new com- 
munities have been developed by a variety of developers. Both Reston 
and Columbia were initiated by individuals who believed that a better 
quality environment could be profitable. Corporations such as Gen- 
eral Electric, Westinghouse, and Boise-Cascade have become in- 
volved in new community development, primarily to stimulate sales 
of their products and to provide a test market.44 Other corporations 
such as Gulf Oil and Sunoco have become involved probably because 
of tax savings. Corporations with large landholdings and families with 
extensive holdings, primarily in California, have also begun to de- 
velop new communities. However, the common thread of all developers 
to date is the problem of returning a substantial profit on invested 
capital. 
In 1968 the Federal Government made its first significant gesture 
to help the private new community developer.!® Seeking to reduce the 
pressure of the heavy ‘front end investment’? which characterizes 
large-scale development, Congress offered a Government guarantee 
for the loans of new community developers. The novel aspect of the 
new legislation is that it permits the developer to issue “cash flow 
debentures” which require no repayment until the new community 
project begins to generate a positive cash flow.1® In spite of the theo- 
retical advantages of the Government guarantee, it has been neither 
enthusiastically received by the private sector” nor adequately 
11 ACIR: Urban and Rural America, op. cit., at 67; See also discussion in H. Elderi fe i - 
Boo (1967) at 835. ; : Ee eee 
12 See discussion in E. Hichler and M. Kaplan, ‘The Communit lders”’ i 
mighlewetd Kaplan) at 20. gene, y Builders’ (1967) (hereinafter cited as 
13 Tphid. 
14 Interestingly, General Electric recently withdrew from the field of large-scale development, claiming 
that a greater public commitment—with the use of eminent domain—would be required in order to make: 
such ventures economically feasible. 
4s ACIR: Urban and Rural America, op. cit., at 79-82. 
16 Title TV, 1968 Housing Act. 
16 See testimony of Robert B. Weaver, Secretary of HUD, before the House Committee on Banking and 
Currency, March 1968. 
Fi om conversation with William Finley, executive director for the new community of Columbia, Md.,, 
