Real  Estate   Record





AND BUILDERS' GUIDE.





YoL. XXII.





NEW YOKK, SATUBDAY, SEPTEMBEK 7,1878.





No. 547.





Published Weekly by

TERJIS.
OiVE YEAR, in advance....SlO.OO.
Communications should be addressed to

C.  W.  SW^EET,

Nos. 345 AND 347 Broadway





CENTRALISM AND DISTRIBUTION IN

REAL ESTATE.
In a 3'oung and growing city like New York, it
is pcrtinent and interesting to inquire w-hich
principle is to be the Controlling one in determin-
ing the coui-so of real estate tifcles—the principle
of centralism which would concentrate these
titles in'a limited number of individuals, or the
priuciple of distribution which would scatfcer
them broadcast among the masses of the people.

With varying ascendancj'^ these two principles
have heretofore worked side by side in the devel¬
opment of this metropolLs, never harmoniously,
however, because antipodal and naturally autag-
onistic—the supremacy of oue implying the sup-
pressiou or exclusion of the other. Amid the
changeful phases of commercial affairs, so char-
acteristic of this city, such supremacy mustlneces-
sarily be precarious and short-Iived; and with
the ebb and How of business prosperity, these
principles have interchangeably and alternately
occupied dominant aud servient positions.

The most striking exemplification of the princi¬
ple of centralism may be found in the early his¬
tory of this city, when the greater portion of the
island was occupied as farm land, and the titles
were necessarily but sparsely distributed, the city
itself being the owner of extensive tracts then
known as the common lands of New York. With
the breaking up of farm lines, and the blocking
out of farm tracts by the extension of municipal
limits, the titles to these various estates gradually
became dispersed and sub-divided. Still the
priuciple of centralism found fresh, Ulustrations
among the later owners. The pioneer repräsen¬
tatives of the now famous landed aristocracy of
New York, those keen-sigbted and courageous
men, were then laying the foundations„of the
colossal fortunes that are now enjoyed by their
descendants. Outside of the City of London,
probably no city in the world is distinguished by
so large a body of owners of inherited tracts of
valuable land. With the lapse of time these
tracts have suffered continuous and gradual sub-
division. To this day, however, a sufficient num¬
ber of extensive parcels has been retained in
Single families to furnish apt and fitting ulustra¬
tions of this general principle. Foreclosure suits
are now creating single ownere, both corporate
and individual, of collective parcels to a conspic¬
uous and alarming extent.

The principle of distribution finds its exemplifi¬
cation notably in periods of prosperous land speeu¬
lation wheu the wbole community, erat least those
in.the commimity possessed of adequate means,
seek the titles of real eatate with a view of thereby
bettering their fortunes. Such holdings are apt
to be of an ephemeral chaiticter, the tenvure,
hnder the circumstances, being maintained dur¬





ing the continuance of the speeulation or until
successfuUy marketed. At the moment of recoil
and collapse speculative titles are apt to be rele-
gated into the .hands of mortgagees, usually the
original owners.

The best type of the distributive principle may
be found in the Operations of the speculative
builder who buys parcels] of adjoining lots, sub-
divides them into sizes convenient for improve¬
ment, and after having erected suitable buildings
proceeds to market them as he may have oppor¬
tunity. Occasionally, improved property is dealt
in by wholesale, and builders succeed in finding a
Single purchaser for a whole block of buildings,
but in tho ordinary course of business the produc-
tions of the speculative builder are retailed off by
piecemeal to separate buyers. Choice dwelling
property particularly is apt to flnd an individual
purchaser for each dwelling. In this way, be¬
yond any other method that can be devised, is
the wholesome distribution of real estate effected.
Building loan projects, as commonly conceived,
are not promotive of this distribution; because, in
the large majority of such cases, the properties
fall into the hands of capitalists who help to float
these schemes, and are by them held for invest¬
ment.

Having defined these principles, it is our pur¬
pose to try and determine which one is more be-
neficient and desirable in its Operation, and more
likely to promote the healthy growth of the me¬
tropolis and the true welfai*e of its Citizens.

Centraxism.—This principle finds many zeal-
ous  advocates, and strong  arguments  can be
offered in support of it.   For example, when the
real estate of a large city is concentrated in a
few hands, it may be said to possess a greater
element of strength than when scattered among
weak  holders.    The qualification of owning a
large tract of property implies the ability also to
carry it through all the vicissitudes of business.
The mainstay of land speeulation in this city al¬
ways has been, and probably always will be the
extensive holdings by individuals and estates who
are able and detennined to carry them, and who
bear the reputation of being ready buyers at low
prices, but sellers rarely at any price.   A strong
element of conservatism and solidity is thus in-
fused into staple New York property.   Besides,
the improvements made and owned by these
wealthy holders of large parcels afford the op¬
portunity of renting premises which might not
be satisfactorily attainable if the same property
was split up into innuraerable ownerships.   The
leading estates of our city that make a business
of  renting   property,   particularly  stores   and
dwellings, enjoy an enviable reputation for fair
dealing.   The solid guarantee which their wealth
affords of good faith and strict Performance of
contract, constitutes an invaluable indemnity to
tenants who have suffered at the hands of weak
and  unscrupulous landlords.    The promptness
with which repairs are executed, and tbe per-
manence with which the tenant may retain
premises, so long as the rent can be agreed upon,
are other features especially acceptable to the
tenant class.

Under a system of taxation which has grown
hoary with age, it is the established rule to levy
the, major share of local taxation on real estate.





This consideration at the present time is operat-
ing to deter jiersons of small means from em¬
barkiug in real estate investments. It is much
more convenient for the city to levy and collect
its great blocks of taxation from those who are
so abundantly able to respond to the demand,
and this consideration no doubt determines the
perpetuity of the present system. It is puzzling
to decide w-hether this method of levying taxa¬
tion fosters the principle of centralism in real
estate, or whether the fact that there are so many
miUionaire owners of property in the city, oper-
ates as an incentive to our law makers to fasten
the great Ioad of taxation upon this class, under
the conviction that thereby the poorer classes are
relieved from the bürden.

The determination of this proposition belongs
so strictly to the philosophy of taxation that we
shrink from enteriug upon its consideration here.
AVe may remark in passing, however, that it is a
notorious fact that during the present revulsion,
few, if any, representative miUionaire owners
have appeared as purchasers of real estate at
what are considered the depressed prices. Either
their past experience in these investments must
be of a discouraging kind or they are w^aiting for
the e-stablishment of still lower prices.

Wealthy and centraüzed ownership has also
the effect of buoying up values. Where property
is withheld from sale or held with no Intention of
ever offering it for sale, values become undefina-
ble, and the speculator in saleable property seems
to be justified in indulging the wildest vagaries
as to values. There is also a reciprocal working
of this influence. When titles are limited to a
few wealthy owners, prices will naturally under-
go an artificial inflation, and this very inflation
when established in a Standard of high prices,
effeetually excludes persons of small means, and
renders real estate an investment .suitable only
for persons of large wealth.

So much for the views advanced in favor of
this principle of centraUsm. A consideration
presents itself as strongly inimical to this condi¬
tion of real estate titles. The typical wealthy
land owner in this city is afflicted with a chronic
prejudice against meddling in public affairs.
Though all his interests are so largely bound up
in the course of legislation, and in the current ad-
ministration of public affairs, no great property
holder has as j'et figured successfuUy or conspicu-
ousl}' in shaping and directing the title of public
events. In this city we have the anomaly pre¬
sented of an interest of colossal niagnitude and
incomparable public concem that is heavily
taxed, and yet w-hose voice is searcely heard in
public Councils. Under a repubUcan form of
government, this result must be deemed prejudi-
cial to, if not subversive of, the public welfare.

Distribution'.—-The other principle which we
have outlined aims to divert land tenure from
these few and dominant owners, and to scatter it
as widely as possible among individuals of a com¬
munity.

One good consideration-will serve to strongly
enforce the value and merit of this principle, and
to demonstrate its political superiority o-ver the
other. In a populär government, the only sure
and reliable safe-guard against the mnl-admizds-
tration of affairs lies iii the intelligent devotion