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REAL ESTATE
AND
NEW YORK, JULY 29, 1916
DISTRICT AND RESTRICTION RESOLUTION
PASSED BY BOARD OF ESTIMATE
Passage Hastened on Account of Large Number
of Plans Filed With Superintendent of Buildings
REAL estate entered a new era last
Tuesday at four o'clock when the
Board of Estimate passed the resolution
on Building Districts and Restrictions,
which immediately became a law. The
resolution will have a very wide effect
upon real estate and is generally con¬
sidered by those affiliated with the mar¬
ket to be a step in the right direction.
It is not humanly possible that mis¬
takes have not been made, or that the
maximum amount of good will result
from the resolution as it exists today,
but wise provisions have been put into
the law which makes it possible at a
future date to change and alter sections
so as to properly meet conditions as they
are found.
The Commission has been most faith¬
ful in its arduous task and has done all
in its power to meet objectionists more
than half way. Principles were laid
down, and wherever possible deviations
were made, always provided that injury
did not result.
It is apparent that the basic principles
of a resolution of this kind are designed
to do the greatest good to the largest
number of people, but it is very drastic,
and for that reason there were many peo¬
ple who did not approve of the change.
Others said that they did not know how
it would work out, and thought that pres¬
ent-day conditions should be left alone,
for fear that worse effects would ensue.
Plan Approved by Many.
Many students of real estate, those
who have been in the habit of looking
well into the future, approve of the plan
as a whole, though they might disagree
with the Commission on some minor
point. These objections were unavoid¬
able, and were met as best they could.
People interested in certain parcels
made the objection, in several cases, that
they were being discriminated against in
favor of those who had already erected
structures, because they could not like¬
wise improve their properties. There
are cases, and many of them, where this
is true, but a beginning had to be made,
and now is the time. It would have
been far better had a resolution of this
kind been passed twenty-five years ago,
before the tall skyscraper became a reali¬
zation. The city would be in better con¬
dition, realty values more stabilized and
"booms" practically done away with.
The "boom" is the curse of the real
estate market. There is no better kind
of a market than a steady, normal one,
which enhances gradually by reason of
legitimate supply and demand. This sup¬
ply should be based upon demand from
tenants, and the prices should be based
upon income return to the owner. The
passing of the old regime and the enact¬
ment of the resolution into law seems to
indicate that "booms" are practically
done away and that a logical upbuilding
of the city will result. Opportunity is
given to those_ who own old houses to
improve the sites in a reasonable way
and the business zones occupied by the
various trades should expand over a
wider area, rather than going higher up
in the air.
The vote of the Board of Estimate was
IS to 1, Commissioner Morrison of
Richmond, who was acting for President
TVyrAYOR MITCHEL made the
following statement yester¬
day: "From 1911 to 1916 there
was a decline of $120,000,00 in the
assessed value of land in Manhat¬
tan south of 40th street. This is
an enormous loss, and directly af¬
fects the city's borrowing capacity
and the tax rate throughout the
five boroughs. Much of this loss
could have been avoided had the
city exercised a reasonable control
over its own development. We
believe the Building Zone Plan will
prevent the registration of losses
in the district above 34th street
similar to those already sustained
between 14th and 34th streets. The
plan is necessary to save the entire
hotel and retail business section.
The residence sections throughout
the city will be protected against
the sporadic store, garage or fac¬
tory. In the past, one good resi¬
dence section after another has
been destroyed by the coming of
the garare or factory. A certain
measure of order and system in
city building is essential not only
to the public health, safety and
general^ welfare, but to the con-
serevation of property values.
Van Nam, voting "No" on the entire
proposition. Action on the part of the
Board of Estimate was somewhat
hastened by the recent avalanche of
building plans filed in Manhattan which
aggregated about $23,000,000. It was
previously announced that the final vote
would not be taken by the board until
Thursday.
At the public hearing last Tuesday,
all those either in favor of, or opposed
to the resolution were given an oppor¬
tunity to express their opinion. Charles
A. Peabody, as attorney for the William
Waldorf Astor Estate, objected to the
placing of the block front in the west
side of Madison avenue, between 35th
and 36th streets in the residential zone,
claiming that the block was suitable for
business improvement and that no ade¬
quate rentals could be obtained for resi¬
dential purposes. Mr. Peabody's objec¬
tion was over-ruled, and Madison avenue
from 3Sth to 4.')th streets on the east
side, and froin 31st to 39th streets, on
the west side is now in a residential
zone.
From now on interest will be largely
centered in the assessments being made
liy the Tax Department on which taxes
fnr next vear will be based. It is not
unlikely that the Department of Taxes
will be flooded with protests from many
owners of propertv to claim reductions.
The members of the Planning Com¬
mission, however, do not look upon this
side of the question as serious, although
they adinit that some of the properties
may be adversely affected; nevertheless
the greater portion of the city should
show rapid improvement on account of
the safesruards created in the various
neighborhoods.
The gpning plan covers the entire city.
Every borough has been divided and
sub-divided into sections and districts
and restricted as to use, height and
area for building construction. The
Record and Guide last week published
the final resolution upon which the
Board of Estimate acted Tuesday and
what modifications and changes were
inade are noted in the current issue.
Lawson Purdy Favors Plan.
Lawson Purdy, Commissioner of
Taxes, said yesterday: "The enactment
by the Board of Estimate of the ordi¬
nance districting the city and regulating
the height, bulk and use of buildings is
the most important event in the history
of the city for fifty years. It is impor¬
tant not only to the City of New York,
but to all of the United States. Ordi¬
nances regulating buildings have been
enacted in various cities of the country,
butnone of them are as far-reaching in
their scope as the ordinance enacted for
the City of New York. We shall, of
course, have complaints from those who
think their property has been lessened in
value; we shall not hear from the vast
number who will be benefited. Such
complaints as may be made public dur¬
ing the next few years should not mis¬
lead anyone into the belief that the or¬
dinance is not in the highest degree
beneficent.
"We shall have litigation, cases will
doubtless be carried to the highest court
of this State, and probably to the United
States Supreme Court. In view of the
cases already decided by the United
States Supreme Court, and the conserva¬
tive character of the ordinance now en¬
acted we need have no fear of the out¬
come of such litigation.
"For several years past various causes
have produced a decline in the value of
land in the City of New York, and chiefly
in Manhattan. In Manhattan the most
important cause of this decline has been
the failure to regulate building in the
past. During the past five years the as¬
sessed value of land south of 40th street
has declinedmore than $120,000,000. In
the zone lying between 14th and 40th
streets. Fourth avenue and Seventh ave¬
nue, there has been a decrease in the
assessed value of land and buildings of
$57,000,000 since 1913. Much of this de¬
cline has been due to the failure to ex¬
clude factories from this district. In the
first section of Manhattan, which lies
south of Grand street, the assessed value
of land has declined $18,000,000.
Cause of Decline.
"An important cause of this decline
has been the failure to regulate the
height and bulk of buildings. There are
very few high office buildings that yield
a reasonable return on what the land
was deemed to be worth five years a.go,
plus the cost of reproducing the building.
The theory that a building could be
erected to a great height has caused
ima.ginary land values. It many cases
this imaginary land value has been
proved to be unreal.
"We cannot expect a great advance in
value immediately as a result of the pro¬
tection afforded hy the districting ordi¬
nance. There will doubtless be a further
decline due to the causes that have been
operating, but we may be sure that the
decline will not be as rapid, and will