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April 2, 1910
RECORD AND GUIDE
693
_ ?STABDSHED^MJ«^H£lil'**'I868.
.Dented to R.E\L EsTAIE.BuiLDiKg l4;R,CrflTECTUR.E .HoUSQlOU) DESORATlorf,
Bifsufess Affc Themes of Ge^&I 1,"Jtei\esi..
PRICE PER YEAR IN ADVANCE EIGHT DOLLARS
Communications should be afldressed tO
C. W. SWEET
Published EVerg Saturdap
By THE KECOKD AND GUIDE CO.
president, CLINTON W. SWEET ** Treasurer, F. W. DODGE
Vlca-Pres. Sc Genl. Mgr., H. W. DESMOXD Secretary, F. T. MILLER
NoH. 11 to 15 East 24tli Street, New York City
(Telephone, Madison Square, 4430 to 4433.)
"Entered at the Post Office at Neio York, N. Y., as seeond-class matter."
Copyrighted, IDIO, hy The Record & Guide Ca.
Vol. LXXXV.
APRIL 2, 1910.
No, 2194
THE SEVERAL SUBSTITUTES which are being proposed
for the personal property tax have certain merits, hnt
It is wholly improbable that even if the personal tax is abol¬
ished, any of them will be adopted. They are all of them
politically inexpedient, because they would impose taxation
on a larger numher of people than now pay the personal tax,
or would be obliged to pay the increased real estate tax,
resulting from its abolition. The habitation tax, which is
theoretically an excellent method of raising necessary local
revenue, would be a considerable income producer, and would
give a much larger proportion of the population a direct
pecuniary interest in the city government; but FOR THAT
VERY REASON it will never be adopted. No administration
would dare face the odium, incurred by its imposition. A
tax on business transactions would be less unpopular, but it
would also be far less desirable. It would be so undesirable
that it will never be seriously considered. The owners of
real property should realize at the outset that in case the
tax on personalty is abolished, they will have to pay the bill.
Under ordinary circumstances they could afford to do so,
and they would in the long run reap considerable indirect
benefits from the abolition of the tax. New York City
would then become one of the few places in the country, iu
which rich men could live and, a large business transacted,
without any legal threat of unfair taxation; and undoubt¬
edly real-estate values, particularly in the residence districts,
WOULD BE BENEFITED by the change. But at the pres¬
ent time they cannot afford to pay this bill. The tax rate
has, during the past three years increased steadily and
largely. It is likely to be still further increased by over ten
points, nest fall. Under such circumstances an addition of
six more units to the rate would be a grave burden, which
would be equivalent to the confiscation of just so much real
estate value. Before any further burdens are imposed on
real estate a certain time should be allowed for the distribu¬
tion of those increases in taxation, which have already be¬
come inevitable. The only way in which the burden of the
personal tax could be imposed on real estate without injuring
real-estate values would be hy means of DRASTIC ECON¬
OMIES in expenditures on the part of the existing adminis¬
tration. Such economies are promised, but in such matters
there is often some discrepancy between promise and per¬
formance. The plan to abolish the personal property tax
can very well go over until next year—by which time the
amount of these economies will be definitely known.
THE Record and Guide has frequently pointed out that
the most significant innovation in New York real estate
methods during the past few years has consisted in the in¬
creasing popularity of THE CO-OPERATIVE APARTMENT
HOUSE. There can be no doubt that this type of huilding has
now passed beyond the merely experimental stage and is
firmly established as one of the methods whereby New York
families will secure suitable habitations. The buildings
erected by this method have not been uniformly successful,
but they have always succeeded when the associating indi¬
viduals were financially responsible, and when the particular
operation was conducted according to sound business meth¬
ods. The general success of these ventures has naturally
aroused speculation whether the same methods of ownership
and financing could not he applied to husiness buildings;
and we understand that at least one enterprise of this kind
'is^DQW beiug seriously considered. Its details have not as
yet been worked out with entire satisfaction; but in arrang¬
ing the plans no serious obstacles have been encountered.'
The Record and Guide is unable to see why the co-operative
office and loft building is net as practicable a form of rea!
estate and buiidiug enterprise as is the co-operative apart¬
ment. Indeed, in certain repects. as we shall see,, the former
offers even more advantages than the latter. The co-operative
apartment has appealed to well-to-do New York families
chiefly for three reasons. In the first place, it, enables a ma..n
to secure an apartment in a desirable location at a smaller
annual expense than he can obtain as much space either in a
private house or in an ordinary apartment house. In the
second place, he has a fair assurance that the cost to him
of this apartment .will not be materially increased. In the
third place, the plan and the decoration of his apartmeint
can be adapted to his own peculiar needs and tastes. In
return fcr these advantages the purchaser of stock in a co¬
operative building company is obliged to assume certain
risks, hut whenever the buildings have, been well-planned
and financed these risks have not proved to be serious. The
large number of additional enterprises of this character,
which will be started this spring afford a conclusive indica¬
tion that the majority of purchasers of stock in these com¬
panies have profited hy their investment.
IN THE CASE of a co-operative loft or offlce building
these advantages would be increased rather than
diminished. It is becoming extremely important for certain
business men to secure permanent offices for their business
iu some desirable central location. At present they can do
so only by either purchasing a site and erecting a building of
their own or by securing desirable premises on a long lease.
In the first case he is obliged to tie up a large amount of
capital. In the second he faces the probability that when his
lease expires he wil! be asked to pay a larger rent—particu¬
larly in case his business has fiourished in that particular
location. Why then, should not certain numbers of cor¬
porations and firms, so circumstanced, combine to buy a site
and erect a building of their own. in which they could have
some assurance of permanently possessing the ofiiees they
need without the threat of a constantly increasing cost?
In buying the land and erecting the building themselves,
they could eliminate the speculators' profits and secure their
own space at a smaller annual charge. The rest of the build¬
ing could be rented at the full prevailing rate, which would
still further reduce the cost to the stockholders. Finally,
they would be much more likely to obtain a building, planned,
equipped and decorated in a suitable manner. Obvious¬
ly, a plan of this kind would be much more feasible in
the case of an office or loft-building than in the case of an
apartment-house. In the former the apartment is the unit;
and a stockholder who wishes either to increase or diminish
his space has difficulty in doing so. But the space in an
office or loft-building is divisible into smaller units. A busi¬
ness man who purchases a certain number of units can in
the case of a change in the circumstances of his husiness
either buy more space or sell off part of the space he already
owns. We are convinced that when this idea is examined it
will appeal to many of the wholesale merchants who are now
moving up town into the new mercantile district, and tbat a
considerable opportunity of profit is waiting for men thor¬
oughly informed as to real estate and business conditions,
who will promote this class of building project. The great
objection which business men would be likely to make
would turn upon the way in which capital invested in such an
enterprise is tied up. Of course the stock in a well-managed
building would always be salable, but would not constitute
a security, upon which money could be readily borrowed.
In all probability, however, even this difficulty would disap¬
pear in time. In proportion as these enterprises were suc¬
cessful and increased in numbers certificates of ownership
would become more and more desirable as security for loans,
and we should not be surprised eventually to see a company
organized, which would make a specialty of advancing money
on this class of security.
THE COURT HOUSE COMMISSION is certainly confronted
by a problem of extraordinary difSculty, and its mem¬
bers are not to be envied in the task of selecting the best of
the several alternatives. The fundamental difficulty arises
of course from the prohibitive price of real estate in every
central location, yet as soon as it is proposed to depart from
a location in the neighborhood of the existing Court House,
the plan is blocked by the opposition of vested interests. It
has always seemed to the Record and Guide tbat, the best