Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 16, no. 405: December 18, 1875

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L Estate Record ND BUILDERS' GUIDE. NEW TOEK, SATUKDAY, DECEMBEE 18, 1875. No. 405. Publ THE REAL ESTATE RECORD ASSOClATiON. C. W. SWEET...............Pbesideot and Tbeasubeb PRESTON I. SWEET...........Seobetaby. L. ISRAELS.........................BUBINEBS Manageb TERMS. ONE YEAR, in advance....$10 00. Communications should be addressed to Nos. 345 AND 347 Bboadwat. THE CEISIS IN EEAL ESTATE. ME. S. E. CHUKCH'S LETTER. To the Editor of the Beal Estate Becord: Many of your readers were not a little sur¬ prised at the article which appeared in the last week's Recobd entitled "The Crisis in Real Es¬ tate." Tour sense of justice towards this great in¬ terest, and your general disposition of fairness, ■will, I am sure, prompt you to give place to the expression of an opinion somewhat adverse to your own on that subject. In the opinion of the writer, the declension of prices in real estate, especially in" the district to which you refer, the West Side, is hot in any wise due to over-speculation, or the misdeeds of "speculators," but to quite other causes. This I think ought to be apparent if we consider for a moment that in other sections of the city which haye been entirely free from spieculation, the de¬ clension in prices has been, to say the least, equally great. Foreclosure sales demonstrate that the mortagee takes the property, whether it be on the Boulevard or in Baxter street, on the Eifth avenue or at the Five Points, and more likely in the latter places than in the former. It is not speculation, then, that has produced the de¬ cline, for "speculators" have not conspired very recently to rain either Baxter street or the Five Points. What, then, is the causp, especially as affect¬ ing the West Side district? Lots did, indeed, attain a high valuation in the years between '69 and '73. Was there no cause for it ? There had been expended upon that district, of public money and private capital,, over $30,000,000 in parks, boulevards, and; other works of public improvement, calculated and intended to make it, when completed, an attractive place of residence second to none on this continent, nor probably in the world- The city got its return in the taxes derived from high assessed valuations, and private owners got theirs in the assurance of high values, pred¬ icated upon the completion of these works. Do you think it wonderful that in a city of rapidly growing wealth, where a dozen millionaires may anywhere be counted in a group of- twice that number of men without exciting a passing no¬ tice, a lot in such a district, with such imprave- jnents, should be worth $10,000.or $20,000, or even $50,000 ? Why, our rich men often spend more money in the purchase of an India shawl, or an ordinary wedding present, than is required to buy the ground upon which may fitly be erected a merchant's palace. Now I venture to say that with all the spec¬ ulation that has heretofore existed, lots upon the West Side have never yet reached one-half their intrinsic value, or one-half the price they will hereafter and very shortly attain. The cause of the declension is not speculation, but that sudden and disastrous change of pol¬ icy which, inaugurated some three years ago, under the name of economy and reform, has put a stop to the completion of these works, which has notified every owner that while he shall continue to be enormously taxed and assessed, he shall have no access to his property to build npon or improve it, to make it available or productive and which contiuually taunts him in ofScial documents with the threat that this condition of things is to continue " for fifty years to come." No property can maintain its value under such a condition of affairs as this. And the plain, unvarnished, solemn truth which property owners may contemplate at their leisure is, that "reform" and reformers have cost them, dur¬ ing the last four years, more than $200,000,000 of .their own substantial wealth, which is equally the wealth of this city. A lot which might well be worth $20,000, if a house could be built upon it, is hot worth half that sum, nor one-quarter, nay, is dear at any price, if it be understood that it cannot, for indefinite years, be buDt upon or improved. And you may find here the cause and the whole cause for the "crisis in real estate." , But these things are happily now passing away. The rights of property-owners, which are always identical with the true interests of the city, are coming at last to be recognized. These improvements will be made and com¬ pleted. Streets will be opened, sewered and paved, and the property made ready for im¬ provement. Eapid transit, long and painfully coming to the birth, springs forth all at once full grown and double-handed, to do the work in a year which two decades of years have been preparing for it. Ihe Greenwich road will reach this district within a month, while a sec¬ ond road, the Sixth avenue (Gilbert charter) is now fully organized, the money secured, and bids for the iron structure are being received. So that the Centennial year wiU find this whole district traversed by two double-tracked, com¬ pleted steam roads, affording, in the most com¬ fortable , maimor, and the quickest time, access to it, from, every part of the city. Seventy-second street will then be more easily reached from Wall street, in less time and far more comfortably than Fourteenth street now is by any existing mode of conveyance. . Do you think lots, then, in; this .hitherto^ excluded section" of the city, now made most accessible of aU, bounded by parks on either hand, and divided by the Boule¬ vard (the future street of the Continent), will be deemed to have been over-estimated ? I venture the prediction that no lols elsewhere on this island, not excepting the Fifth avenue, have yist attained the value which will ultimately be ac¬ corded to lots within this district. Nor wiU the district be monopolized by the few only—the extremely rich. The French flat is the coming house of New Tork. Palatial in size, imposing in style, and occupying the very choicest locality of the city, it will yet furnish, at a moderate cost of $600 to $1,200 a year, an ample, complete and perfect home to the man of the most refined taste and yet of the most moderate means. Buildings of this class have already been erected in upper Broadway, and are found to pay 15 to 20 per cent, upon the investment. And this upon lots costing $40,000 and $50,000, What, then, must be the return upon lots costing half that sum ? And the whole West Side is still far below that average of price. Many more such buildings are projected, and several are already under way; The effect is already be¬ ing felt. I do not hesitate to say that the con¬ certed action of half a dozen property owners in the erection of such buildings above Fifty- ninth street will at once restore the whole sur¬ rounding property to its former valuation, to move thence steadily forward to the real value which the district is ultimately to attain. Any property is cheap in New Tork which will pay steadily ten per cent, upon the cost as improved, and there is not a lot on the whole West Side which will not pay that, upon double any valua¬ tion it has yet reached, when these two steam roads are completed, as they will be before the buildings themselves can be finished, however soon commenced. S. E. Chubch. P. S.—Now, that this lette^r has lain over a week, it affords me opportunity to add a few words to what I have above hastily written. It will strike most of your readers, I am sure, as something entirely new to hear that the Cen¬ tral Park was the work of real estate speculators. The names of the venerable and Hon. Samuel B. Euggles, Judge Michael Ullshoeffer, Eobert Dillon, Samuel F. Butterworth, and Charles H. Eussell are among those mosi; intimately asso¬ ciated with the beginning of that great work, and if any of them were real estate speculators or had any private interest to promote or which was promoted by it, I have never yet heard of it. The Central Park was the creation of that genius of some of, our truly great men, now rapidly passing away, who foresaw the future of New Tork, and in the right titne laid a founda¬ tion which rescued New Tork from the category of a mere provincial town and made it the cen¬ tral point of the continent. We could not pro¬ ject that work now.- We have no statesmen left. Our highest statesmanship now seems to be to