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Real estate record and builders' guide: v. 77, no. 1973: January 6, 1906

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January 6, 1906 RECORD AND GUIDE *■ ^uwjwmyzfsW""" ■"'" ESTABUSHED ^ JAAR.CH ^I'V*^ 1868. Dented p f^L EsTWi. BuildiKg ift^FtcKiTECTURE .HouseHoid DEeOf^TlOrf. Bi/sif/ESS A[feThemes oFGt]JER,Al Wtei\esi, PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Published every Satiirdap Comraunlcatirins should bo addressed to C. W. SWEET. 14-16 Vesey Street. New York Telephone, Cortlandt 2157 "Enifred at the J^ost Office al New Yorl:, N. Y., as sfcond-das^s niatle}'." Vol. LXXVII. JANUARY e, 100(5- No. 1973 INDEIX TO DEPARTMENTS. Advertising Section. Page, Page. Cement.....................xxv Law.......................xi Clay Products..............xxiv Machinery....................iv ConsuUing Engineers..........v Metal Work................xxl Contractors aud Builders___viii Quick Job Directory.........xxi.K Electrical Interests..........vi Real Estate.................xvi Fireproofing..................ii Roofers and Roofing Materials, .x Granite....................xxvl Stone.....................xxvi Heating....................xxii Wood Products...........xxviii Iron and Steel..............xx REAL ESTATE AND BUILDING IN 1905. 1905 As Compared to Other Years. In order to understand the true significance of the existing activity in real estate, the transactions of the past year must be compared not merely with those of the preceding year, but with the general course of real estate business since 1S97. The years from 1897 to 1900 were not prosperous years for real estate broilers, operators and owners. Consolidation had resulted in large increases of taxes, which for the time being were paid exclusively by the owners of real estate. The land¬ lords were unable to recover from their tenants this heavy in¬ crease in taxation, because the builders of tenement and apart¬ ment houses were putting an over-supp'y of living accommoda¬ tions on the market. Building was indeed very active on the lower East Side, on the West Side and in Harlem, but its activity was not restrained by any careful calculation of tire current demand for new habitations. The upper part of tlie city was full of tenements which were only partly filled and whose owners were offering inducements to tenants to occupy their buildings, and this description applied to comparatively expensive as well as to cheap flats. A large number of seven-story elevator apartment houses were btiilt under the old law in 189S and 1S99, their builders being encouraged by their ability to obtain electric power from the street, but they were hard to rent and harder to sell. The only section of the city in which real estate was strong and active was on the lower East Side, which was being filled up by the gathering body of Jewish immigrants. Throughout the rest of the city values were practically stationary, and trading was dull—partly be¬ cause the revival of general business had not yet affected real estate, partly because of the increase in- taxes, and partly be¬ cause the growth of the city was stunted by wholly inadequate means of transit. Of course, the most crying and exasperating deficiency of all was the wretched means of interborough transit, and it was during these years that preparations began to be made by the city for new bridges to Brooklyn and a subway from City Hail to the Bronx. The beginning of better times, however, was brought about by causes independent of rapid transit, which would have had their effect, subway or no subway. It wns almost entirely the result of general business prosperity. This prosperity, demanding as it did much financial reorganization, and bestowing as it did an increased importance upon New York in the financial organization of the country, only affected those parts of the city, in which large business affairs were transacted, and in which rich men lived and amused them¬ selves. By stimulating the demands for offices, it encouraged the erection of "sl^yscrapers" in the financial district, and caused large increases in real estate prices south of IVIaiden Lane. By increasing the number of rich men who lived for greater or shorter periods in New York, it brought about a lively demand for property adapted to expensive residences and hotels. Finally it also had the effect of raising values on those thoroughfares, such as Fifth avenue and middle Broadway, whose places of business cater to the needs and amusements of well-to-do people. Throughout 1901 and 1902 the conditions briefly described above dominated New York real estate and served to enrich the owners of expensive property in the mid¬ dle districts of IManhattan; but they exerted practically no effect upon the much larger areas occupied by the residences jf people who were poor or only moderately well to do. In the meantime, however, causes were also at worlc which were destined to have a corresponding effect on low-priced resi¬ dential property, and these causes were such as both to in¬ crease the demand for new residential accommodation and temporarily to diminish the supply thereof. The demand was increased, because the general prosperity increased the em¬ ployment of all grades of labor and because the volume of immigration was reaching unprecedented dimensions. At the same time the enaction of the new Tenement House Law placed a temporary check upon, the construction of tenement houses. The consequence was that soon after the speculation in high- priced property diminished in 1903, a speculation in low-priced property began. In the first place, the more stringent provi¬ sions of the new Tenement House Law gave an increased value to the older types of five-story fiats and encouraged their pur¬ chase by speculators- In the second place, the enormous immi¬ gration, particularly of Polish and Russian Jews, filled the lower Bast Side to overflowing, and the overfiow gradually flooded the East Side of Harlem. In this way Harlem itself soon became overcrowded, particularly as very few new tene¬ ments had been built, and similar causes diminished the va¬ cancies on the West Side. The landlords of tenements and apartment houses soon found their incomes substantially in¬ creased: and, w:th the improved renting conditions, it was natural that the construction of new dwelling accommodation was begun on a large scale. It so happened that just about the same time the new subway began to have its effect, and opened up large areas of vacant land in Harlem, on Washington Pleights and in (he Bronx, which had been inadequately pro¬ vided with means of communication. A violent speculation on unimproved property was the result, and an enormous in¬ crease in the construction of tenement houses. The speculation in vacant property had largely spent its force by the spring of 1905, and the real estate and building operations of the past year have been devoted largely to a less precarious kind of transaction. The activity during the past year has been enormous. It has surpassed that of any previous year in the history of New York real estate by a large percentage- But it has at the same time been exceptionally well distributed and wholesome. There has been no violent speculation in ai:y part of Manhattan, but there has been a sustained and her-ltby demand for real estate, both for use and for investment- Wherever the current condition is tested it shows similar characteristics. In the financial district there has been no such increase in values as there was during 1901 and 1902, but buildings have been well rented, and a fair amount of new construction has been undertaken—more than during any year since 1302. At the same time there is a sensible tendency shown to erect new skyscrapers on the cheaper land to the west of Broadway. In the new wholesale district a very large amount of rew construction has been undertaken between Fourteenth and Twenty-third streets; and it has been made manifest that within a few years the wholesale trade will begin to occupy the area between Twenty-third and Thirty-fourth ctrccts. Along Fifth avenue there has been steady progress, looking chiefly tov/ards the control of Fifth avenue property by the business men who use it, and towards the occupation of the adjacent side streets. In the residential districts there has been a revived demand for high-priced houses, and at the same time the largest volume of new tenement accommodations projected that has ever happened in New York. As we shall see presently, this new construction is well distributed through¬ out the different districts in the northern part of Manhattan. Real estate is being sold and new houses projected in all parts of the city, and in response to a substantial business demand. The net result, consequently, of the real estate history of the past five years is the complete rehabilitation of real eSlate as a form of investment. During all these years, while one class of real property after another has been restored to favor, there has been no increase of taxes. The landlord has reaped the fruits of the improved conditions. He is prosperous, as he has not been for over a decade, and he has no reason to fear that the bottom of his prosperity will suddenly drop out It is, after ail, founded on the fact that an enormous increase has taken place in the demand for land in Manhattan by people who must use it, and owners can rest assured that this demand will become even more imperative. The truth is that the improve¬ ment of the past few years, great as it has been, is merely a suggestion of the vaster improvement which will be brought about hereafter by the accelerated means of communication