Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 85, no. 2187: February 12, 1910

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February 12, 1910 RECOKD AJND GUIDE 321 7M ESTABUSHED-^ MART'H 21^^ 186 8. DEV^TEB P REA.L Estate .BuiLDlffc AftcKlTEerURE .HoUSEirOlD DE(MfiATK«l,> BUsn^ESS Alto Themes of GEffeR&l iKTERfy., PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Communications should he addressed tO ' C.W. SWEET Published Every Saturday By THE KECORD AJVD GUIDE CO. President, CLINTON W, SWEET ** Treasurer, F. W. DODGE Vice-Pres. & Genl. Mgr., H. W. DESMOND Secretary, F. T. MILLER Nos. 11 to 15 East 24tli Street, New TorU CItr (Telephone, Madison Square, 4430 to 4433.) "Entered at the Post Office at Ncio York, N. Y.. as S'.co'nd-eluss mailer." Copyrighted. 1910, by The Record & Guide Co. Vol. LXXXV. FEBRUARY 12, 1910-. No. 2187 IT is much to be hoped that the existing labor troubles in the building trades will not involve a downfall of the General Arbitration Plan. Under the operation of that plan the building trades have enjoyed a period of rest from labor disputes that has been as advantageous to the union mechanics as to their employers. The latter have been spared the losses ■which the formerly suffered through petty strikes, and have been able to make bids upon pro¬ posed work without allowing for strike delays and expenses. The mechanics, on the other hand, have secured steady and remunerative wages, and have been able to obtain increased pay whenever they could advance a valid claim for more money or fewer hours. The consumer of build¬ ings has benefited, because he obtained his building more nearly on time, and because the contractors were able to give him lower figures. An arrangement of this kind, whose operation has stood the test of so many years and has been so successful, MUST BE RETAINED; and if neces¬ sary it must be retained at the expense of a prolonged labor war, A return to the conditions which prevailed from 1900 to 1903 is inconceivable, and the avoidance of such a calamity is worth any sacrifices which it may cusl. The employers' association has the power to keep the plan effective, and it should not hesitate to use its power to that end. The benefits of the Arbitration Plan are worth fighting for. Everybody interested in real estate and build¬ ing will hope that the fight can be avoided, but it should not be avoided in case the success and the authority of the arbitration machinery is thereby weakened. THE WHOLE QUESTION of the local taxation of real estate and personal property is raised by Mayor Gay¬ nor's letter to Tax Commissioner Purdy. In that letter the Mayor asks for information as to the effect of the com¬ plete abandonment of the taxation of personal property in New Tork City, and it is evident that thei Mayor himself is inclined to approve of such a measure. There is undoubt¬ edly much to be said in its favor. The existing laws taxing personal property work badly from almost every point of view; and they are universally condemned both by experts in taxation and by the actual administration of the law. The personal property tax has about every dis¬ advantage which any method of raising public revenue possibly can have. Only a very small proportion of the property which the law proposes to tax is actually reached by the statute; and personal property owners have good grounds for evasion, because if it were fully collected, its collection would mean either an intolerable burden to the property owner or flagrant double taxation. So far as it is collected, its incidence is unequal, and falls largely upon estates belonging to widows and minors. Por the city it is a wholly uncertain source of revenue. The city does not, and cannot, actually collect more than half of the small sum which it ostensibly should collect; and real prop¬ erty owners are now suffering from the burdens conse¬ quent from entering on the books of the city suppositious revenues which eventually have to be paid by real estate. It is probable, as Mayor Gaynor points out, that the entire abolition of the personal property-tax would not raise the tax-rate more than a few points, and action of this kind would, at least, have the immense advantage of removing one source of unsound municipal finance. The question, however, is, How -can the proposed change be brought about? The Legislature has always refused in the past even to consider the abolition of the general property tax; and it has been equally determined not to grant to any muni¬ cipal authority loca! option in matters of taxation. Assum¬ ing that the Legislature will persist in this attitude, what can the Tax Department do? It must try to execute the law; and as long as it tries to execute the law, it remains dedicated to the task of assessing taxes which, for the most part, are evaded or are not collected. It remains to fee seen whether the present Mayor and Tax Commissioners can flnd any way of breaking the bonds which have in this respect tied the hands of their predecessors. STRONG as are the arguments which can he urged in favor of the abandonment of the personal property tax, it can hardly be expected that the owners of real estate will enthusiastically favor the proposed change—particularly as this change is advocated partly on the ground that the owner of real estate will not be able to shift this proposed increase in taxation to the tenant. During the past three years the tax rate has been steadily climbing. Tax bills have been increased by almost one-sixth during that period; and from various causes it looks as if still further increases were to be expected in the normal course of municipal busi¬ ness. In addition the tax-payers are threatened by an agi¬ tation, which has not been wholly discountenanced by the city authorities, and which proposes to pay a great many more millions ot dollars out of the City Treasury to a certain class of school teachers. If in addition to all these other burdens the tax rate is further increased by assess¬ ing on real estate the several millions now collected from personal property, the outlook will become discouraging enough to seriously affect the real estate values in New York. Admitting that the proposed change looks in the right direc¬ tion, the time for effecting it should be selected with ref¬ erence to its probable immediate results. Just at present real estate owners are staggering under an enormous recent increase in burdens, and a prospective increase which looks equally disturbing. In case still further burdens are added, the investment of capital in real estate and buildings will be discouraged, and the general prosperity of the city threat¬ ened and diminished. It is not too much to say that the whole scheme of local municipal finance is in danger of breaking down. Our American cities, and particularly New York, are called upon to perform an enormously in¬ creased number of services for their inhabitants, while at the same time they derive but small returns from many general sources of municipal revenue, such as franchises, which in foreign cities help to pay the cost of these increased bur¬ dens. The whole expense falls upon the owners of real estate, who at the same time are being vexed and injured by an increasingly restrictive use of the police powers of the state. Before, consequently, they are asked to pay the millions of dollars now collected from-personal property, it would be well to inquire what the effect of such increased taxation would be, and to what extent they will probably have to submit during the next few years to other in¬ creases in taxation. It is right and necessary that real estate proprietors should be drained to the limit lor the support of the municipal government; but it is equally right and necessary that the limit should not be exceeded. THE subject of possible legislation at Albany, in which New York has the most interest, is undoubtedly the method whereby the Legislature will give effect to the con¬ stitutional amendment in respect to the debt limit accepted by the voters last fail. The question is: How are those, the self-sustaining subways and docks, which are to be left out of the reckoning of the net debt of the city, to be determined? A bill, introduced at the solicitation of the Citizens' Union, proposed the judicial rather than the ad¬ ministrative determination of these subway and dock im¬ provements, which can be constitutionally deducted. The principle of this bill is undoubtedly correct. Before any stock issued for subways or docks is declared to be ex¬ empt, the city authorities should be obliged to prove in court that the improvements are self-sustaining and have every prospect of continuing to be self-sustaining. More¬ over the same rule should be applied to any future improve¬ ments of the same kind. In case the city should decide to build a subway at its own expense, the money appropriated for the construction should be included in the estimate of the net debt of the city, until the subway has been operated for a definite period. If after the expiration of the period the revenues from the subway are sufficient to pay for the You have ALL the records in the Record and Guide.