Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 65, no. 1669: March 10, 1900

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March lo, 1900, ICOUD ^ GUIDE. 401 1te%D p REA.L Zsrtjz.BuiLDIffc A,RCH"rrECmjRE.I^OUSEKOID DEGQRfTWrf, Bt/sitfess AiJbThemes of GEjfeR^l IiJtehest.^ r PRICE PER YEAR IN ADVANCE SIX DOLLARS. I'liblinhed every Saturday. Telepiioke, Coktlandt 1370, Gommunlcatlona should be ariiJressed to C. W. SWEET, 14-16 Veaey Street. I T. LINDSEY, Busifiess Manager. "Entered at Ihe Post-0_gi3e at New York, N. Y., as sncond-claSH mailer," Vol. LXV. MARCH 10, 1900. No. 1669. THE story oi the stock market this week ia one of extreme dullness in the commission houses, and of half-hearted proSessional trading on the short eide. A hundred and one rea¬ sons are assigned for this state of things except the right one, the indiflerence of the public to speculation, because, it is to be Hoped and with ample basis, of their better employment in their more legitimate concerns. The best feature of the situation is the comparative strength of the railroad list, In which the de- ellnes for the week, where there are any, are light. Local trac¬ tion stocks ha)ve all sympathized with Third avenue, it being an accepted rule of Wall Street to make believe that the fate of any one security in a class will he that of the whole lot, so that Manhattan and Metropolitan are sold because it is known that they must spend large amounts of money to bring their plants and motive powers up to modern completeness. It is probable t|hat the selling of the Industrials is much more logical and the consequeat shrinkage in their quotations more easily explain¬ able. In sugar we see the natural result of a combination that makes a large profit by controlling a particular line of indus¬ try; it invites the creation of competitive organizations with which it must fight or share its profits and so lose the very benefit for which it was organized. This example has its effect on other Industrials. The newer ones, particularly those based on iron and steel manufacturers, are also affected by the sur¬ prising phenomenon of selling by insiders who are at the same time bragging of the immense profits that are being made in them. It is naturally assumed that this argues very little con¬ fidence on the part of those best informed In a continuation of the business that has made the heralded proflts possible. More¬ over, the ordinary buyer will not touch these issues for fear that Congress may take action either to undermine the organizations or to directly affect their profits, through changes in the tariff. When this fear is removed and an incentive to activity is sup¬ plied by the enactment of the Currency Bill, there will be better things to record of tbe security market. --------—.».----------- IN the withdrawal of the Long Island Railway Company's ap¬ plication for a franchise to tunnel under the East River, wlMch is much to be regretted, we get an idea of the results of over-zeal in pushing municipal tunnels and of the paralyzing effect a too active agitation of municipal ownership has on pri¬ vate enterprise, with consequent loss to the public, before we are ready for it. It is admitted that in undertaking to build a rapid' transit road from the City Hall to the city limits, with the other improvements underway, or urgently required, the debt ttmit is fully reached; then how foolish it is to drive away any assistance that private capital will give in providing com- iBUBicationa between the boroughs.or indeed in creating any im¬ provements that will tend to strengthen real estate valuations and so increase the city's revenue and borrowing power. Recent events have given ua a mere prospect of a tunnel at South Pferry, surround'ed by all the doubts that accompany such things, for an apparently sincere intention of a capable corpo¬ ration to build an equally convenient connection between the two boroughs as Boam as they could get the legal permission. That this is not bad business could only be shown by proof of insincerity on the part of the Long Island people. It will be very much to be deplored, too, if the agitation for pipe galleries along^de the rapid transit railroad delays that work now that a contract has been made aud bonds have been authorized to carry it out. Apparently there is no need for such a fear, but ra.pld transit has been such an elusive thing in this city for so many years, always appearing about to succeed and then dis¬ appearing, that the people will not tolerate with equanimity anything now that scents of delay to tbe work already laid out and provided for. The Municipal Assembly would have to ap¬ prove the pipe galleries and they are so notoriously obstructive of public, development that no one will want the execution o( the work agreed upon to await their consent for doing that proposed. Dullness and Its Causes. TEMPORARY EFFECTS OF INCREASED TAXES—LOFT RENTING SUBURBAN LAND. T IS impossible to speak with confidence concerning the con¬ dition of the real estate market. Normally, we should be in the midst of the busy season. As a matter of fact, current dealing hardly rises above midsummer mediocrity. The in¬ activity of the autumn was sufficiently accounted for by general tightness in money. However, from the middle of January to the middle of February, a distinct improvement was discernible in the brokerage business. Not only were sales more numerous, but they gave promise of a broadening field of activity. So far as can be seen, no new factor of disturbance has been injected into the real estate market. On the contrary, one would think the general situation had been materially improved. The cur¬ rency act wiil undoubtedly have a tendency to enlarge the sup¬ ply of money, while rapid transit will just as unquestionably tend to reduce the rate of taxation by creating a new body of taxable values. The main causes to which brokers ascribe the current in¬ activity are the Stranahan bill, high taxes, and high cost of construction. The deleterious influence of the Stranahan bill lies principally in the uncertainty as to whether it will become law. The bill passed, it is conceded that the mortgage loan market will resume a normal tone, whether the virtual interest rate to the borrower rises or falls a mill or two, for certainly some part of the five-mill tax must be offset by new influx of capital. The high cost of construction is not an unmixed evil. It is putting an effectual check on the production of the common type of flats and tenements. A very considerable part of the decrease in sales is caused by falling off in the demand for sites suitable for improvement with this class of housing. A season or two of quiet in speculative building will not only serve to fill up the existing tenements and flats, but to abolish the free-rent abuse, and ought to be suEScient to restore this class of housing into favor with small investors. Current building activity Is confined chiefly to elevator apartments and dwellings, and this activity, by no means excessive, is justified by the comparative readiness with which the finished product sells. The brokerage reports this week, as in the recent past, relate chiefly to dwell¬ ings and elevator apartments and to sites suitable for improve¬ ment with the one or the other housing. The rise In cost of construction, while discouraging the market for lots, ought to stimulate the market for improved property. By adding to the value of every existing building, the rise makes it possible to offer improved property at lower prices than it could be dupli¬ cated for, besides making liberal loans easier to obtain. That taxes are high in comparison with rents must be ad¬ mitted. There has been some advance in rents, particularly In small apartments and stores. Stores, of course, cannot be mul¬ tiplied indefinitely in a given district, like lofts; consequently they are the first to benefit by the improvement in general trade and industry. It is a curious incident of the better demand for stores that second-floor lofts have lost in tenantry. Firms which a year or two ago, for the sake of economy in running expenses, thought it expedient to ask thei^' customers to walk up one Sight of stairs, are now desirous of coming down to the street. As regards offices and as regards lofts above the second floor, there has heen perhaps no general rise in nominal rents, but the ruinous reductions allowed two years ago and less have been discontinued. What this saving means to the owner may be inferred from the following typical incident. In August, 1898, two young fellows starting in the advertising business hired a small office in perhaps the best known office building in Broadway, north of 23d street, a building which was then sever¬ al yeara oid. The asking rent was $450 per year, but the flrm got it for $265. Speaking generally, the jump in the local tax iast year haa not been compensated by correspondingly higher rents. On a 5-story building in Sth avenue, south of 19th street, the tax was raised from $1,507 to $2,976. In this instance no attempt has been possible to obtain any access of gi-oss income from the property, as it is leased for a term of years. But even if the lease had been by the year, it wouid have been impossible to get ?1,469 more for tbe store alone; the lofts would stand no chance of competition with the numerous new tall buildings In the neighborhood. Despite the gloomy forecast of the Comptroller, however, on the subject of the local tax, there is good reason to conclude