October 12, 1912.





RECORD  AND  GUIDE





673





sessment. If in this instance the city
could have condemned a strip of land
at least 100 feet wide on each side
of the line of the new avenue—includ¬
ing, of course, as much more as the
survey of adjacent property rendered
desirable—this improvement might well
have paid for itself because the prop¬
erty would have the benefit not merely
of the street improvement but of a
new subway. In any event the deficit
would have been comparatively small
and the business development of the
new thoroughfare would have been ac¬
celerated because the property con¬
demned in excess of actual needs could
have been sold to builders in plots
adapted to the actual business require¬
ments of the neighborhood. In the
same way the city could begin imme¬
diately to lay out the proposed new
street to connect 7th avenue and 34th
street with Sth avenue and 40th street.
New York traffic experts are agreed
that this connecting street, which it is
proposed to call "The Crossway,"
would do more to relieve the conges¬
tion of traffic in New York than would
any improvement which could be car¬
ried out for any similar sum of money.
Real estate experts are also agreed th-it
it would furnish a considerable amount
of street frontage to that district in
Manhattan in which additional lots
available for the retail trade are most
needed. Yet, although the plan has
not been abandoned, it is doubtful
whether it will ever be undertaken
under existing conditions. Neighbor¬
ing property owners oppose it because
they dread the frequent unfairness of
the method of assessment.

The city officials hesitate to under¬
take it because they are afraid of
adding to the burdens of an already
overtaxed cit^. Yet, in this instance,
the increase in value of adjoining prop¬
erty, provided it could be sold in prop¬
erly sized lots, would be enormous. At
present there are very few expensive
buildings which would have to be d'b-
stroyed. The property on the side
streets, which would have to be con¬
demned, is worth, roughly, $40 a
square foot. Such property, when
fronting on a street which would con¬
nect the Grand Central, the Pennsyl¬
vania Terminal and P'ifth and Seventh
avenues, would be worth three or
more times as much. The crossway
would be a combination of Broadway
and Fifth avenue and would have
a unique value for purposes of retail
trade. It would be thronged with traf¬
fic and people from the day it was
opened, because it would cut all the
most important longitudinal thorough¬
fares in Manhattan in the district of
their greatest activity. The openiiitj
of such a street, instead of being an
expense to the city, might well be di¬
rectly as well as indirectly profitable.
Yet it may have to be postponed until
the present constitutional prohibitioa
of excess condemnation is removed;
and by that time the side streets on
the line of the proposed "Crossway"
may be occupied by so many new'
buildings that all possibility of direct
profit will be destroyed.





ment in the real estate market. The
property at 138 and 140 East Fifty-sev¬
enth street, just off Lexington avenue,
was being offered from the stand of Jo¬
seph P. Day in foreclosure of a mort¬
gage. The plaintiff started the bidding
at $48,000. A furious competition then
set in between professional operators,
who were eager to acquire so desirable
a piece of realty adjacent to the new
subway. The ninety-ninth bid taken by
the auctioneer recorded an advance of
only $9,500. Beyond this the profes¬
sional operators declined to adventure,
and a firm of clothiers, Adelberg & Ber¬
man, got a handy warehouse on a plot
37.6x100.5 in a rising neighborhood for
the low price of $57,500.

The incident bears out the statement
made by brokers generally, and reported
in this column last week, that there is
plenty of shopping around by operators
in speculative .neighborhoods, but that
it is difficult to close deals, partly be¬
cause there is as yet no consensus of
opinion as to where the building activity
of the near future will be. The pro¬
fessional element will not pay anything
like market value for property in un¬
tried localities, no matter how promis¬
ing, because of the modern tendency of
building enterprises to concentrate in
small, well-defined neighborhoods.

Real estate rtiovements, with their ac¬
companying building activity, are cre¬
ated nowadays by groups of big oper¬
ators working in concert, and such
groups take action only after having
studied the needs of given mercantile
trades or classes of tenants, whether
commercial or residential. On the first
sign of a new move by the big oper¬
ating syndicates or groups of leaders, the
rank and file of market followers rush
in. As yet the leaders have given no
sign, and the average operator is afraid
to act on his own judgment; if he builds,
he may find that the class of tenants
he expected to recruit from has in the
meantime been diverted to a new trade
or residential center created by a strong
group of operators acting in common.

This hesitation on the part of the
professional element explains in large
measure the character of the current real
estate market. Feeling is optimistic, and
brokerage trading is on the increase,
compared with the corresponding season
of last year; but no well-defined, impor¬
tant seats of activity have developed.
Some notable building enterprises are be¬
ing undertaken, but they are inconsider¬
able in number and are mostly belated
operations in neighborhoods recently
built up. The general expectation is that
the big operators will presently lead the
way into fresh territory. Meanwhile, the
support of the market, as is to be ex¬
pected after a period of industrial de
pression, comes mainly from professional
buyers, investment purchasers being rel¬
atively few.





THE WEEK IN REAL ESTATE.

A performance that took place in the
auction room this week may be cited as
an amusing but entirely faithful illus¬
tration of the present temper of a con¬
siderable seQtign of the prof^ssignal ik--





Building Materials Go Higher.
Continued upward movement of build¬
ing materials was a feature of the week.
Hardware and metal ceilings were the
active factors, although in the case of
metal ceilings the activity is due pri¬
marily to an impending increase rather
than to actual lift now. It is rather re¬
markable that the buying movement in
building materials is not more active
than it is. in view of the general in¬
crease in prices in practically every de¬
partment. The apparent reason for this
is hesitancy due to the timidity of
money covering building construction in
the immediate future. Consumers lean
to the position that they would rather
pay a little more for building materials
next year than to hazard cash in build¬
ing operations that might prove disas¬
trous if there is any reaction following
the election.   This may account for the





very heavy inquiry in all lines of build¬
ing materials and a corresponding in¬
activity as far as actual buying is con¬
cerned.

All lines outside of brick and Port¬
land cement have felt this change. At
present Portland cement is very inac¬
tive, sales being taken at prices below
$1.58, the asking price. Dealers are
buying in stock, anticipating a possible
further advance. In the case of com¬
mon brick, Brooklyn and Newark in¬
terests are fairly well stacked, while
Manhattan is just beginning. This ac¬
counts for the heavy buying movement
of last week at the brickyards, which,
therefore, did not have the earmark of
permanency to it sufficiently pronounced
to warrant an interpretation of real
stability.

Building managers are in the peculiar
position of actually being forced to pay
higher prices for coal when there is a
large quantity available. This shows
the effect of car shortage upon the av¬
erage consumer of coal, because it re¬
flects the inability of the carrying roads
to move vast quantities stored at the
mines as rapidly as consumers can take
it.

The average consumer of building
materials or building supplies is ad¬
vised to take advantage of whatever
concessions that can obtain at this time,
because prices are bound to move up
between now and the first of January
in almost every line and will continue
to hold a stiff level until a break occurs
in the iron market. In view of the fact
that steel deliveries are now being con¬
tracted for well into the first quarter of
1913, thus insuring a heavy demand for
pig iron well into next spring, it is not
considered that any weakness will de¬
velop in that department. However, the
stiffness of the general building market
may be expected to continue through
the winter at least.





Overburdened Taxpayers.

Kditor of the Record and Guide :

In calling attention editorially to the
burden of the increasing tax rate in the
City of New York, you point out that
"people who own real estate in specu¬
lative districts where property would or¬
dinarily advance in price can stand the
strain, but all those property owners
whose holdings are stationary or retro¬
gressive in value are having their prop¬
erty taken away froin them without any
redress."

One reason why the increasing tax
rate is so severely felt by many prop¬
erty owners is that the tax fails alike
upon land and buildings. We all know
that a building does not increase in
value after it is erected but, on the con¬
trary, depreciates both from ordinary
usage and from the competition of new¬
er types of buildings subsequently
erected. Unless therefore there is an
increase in the value of the land on
which the building stands, sufficient to
take care of this depreciation, it is
evident that an increase in the tax rate
will decrease the total earnings from
the land and building.

Several suggestions have been ad¬
vanced to relieve improved property of
this burden. One is that in the assess¬
ment a greater allowance should be
made for depreciation, but this involves
an arbitrary use of judgment that
might lead to much discrimination.
."Vnother suggestion has been for a gen¬
eral reduction in the tax rate on build¬
ings. Still another suggestion, which
I made about a year ago. was for a fixed
rate upon buildings which would not in¬
crease or fluctuate as does the ordinary
lax rate.

None of these suggestions for tlie
positive relief of buildings have as yet
received much general support. There¬
fore, it may be advisable to attack the