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Real estate record and builders' guide: v. 86, no. 2225: November 5, 1910

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November 5, rgiO. RECORD AND GmDE 735 'ikAnBTo Rf\LEsTA:t.BaiLoi)/G i\^iTEeTuiiE",KcwsnioiDDEOffl(«wfc BusDfess Alt) Themes of G^jto^lIrfreRgsi^ PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Communications shouli] be addreSBOd to a W. SWEET I published EVerg Satnrdap By THE RECORD AND GUTDE CO. President, CLINTON W. SWEET Treasurer, F. W. DODGE VIcQ-Prea. & Genl. Mgr., H. W. DESMOND Secretary, F, T. MILLBB Nos, 11 to 15 East a4th Street, New York City (Telephone, Madison Square, 4430 to 4433.) "Entered at the Post Office at Nco Torfc, Jf. T., as second-class matter." Coryriglited. 1910, by Tho Record Se Guide Co. Vol. LXXXVL NOVEMBER 5, 1910. No. 2225 THE BUDGET, THE SUBWAYS AND REAL ESTATE. THE three matters which contiiiue to excite the most lively interest on the part of the property owners of New York City are (1) the Budget for the coming year, (2) the prospects for additional subwaj' constructions and (3) the real estate and building outlook for 1911. It must be ad¬ mitted also that in respect to no one of these matters of vitai interest have the recent developments been of an encourag¬ ing nature. According to the latest information, the Budget, instead of being Increased over the current year by the sum oC about $8,000,000 will be increased by the sum of over 1^10,000,000, which means a substantial increase in our bills. As the days go by the subway situation l)ecomes more, rather than less, crowded, and the criticism of the Public Service Commission more rather than less severe. These two facts are in themselves sufficient to diminish real estate and building activities, but they do not stand alone in their tendency to discourage active operations. The condition of the money market, the attitude of the large purchasers of mortgages, and the general results of the fall rental season all contribute to the impression that, unless the situation undergoes a change, the outloolv for 1911 favors a diminished rather than an increased volume of real estate and building business in and about the Greater New York, THE attitude of New York property-owners towards the Budget was admirably summed up by Mr. Michael J. Horan, counsel for the United Real Estate Owners of New York at the hearing on the Budget. He pointed out that the present administration was pledged to economy, aud that ex¬ pectations had been held out to property-owners that their taxes, even if they were uot reduced, at least would not be increased. But in spite of these pledges, in spite of a sup¬ posed improvement in the methods of Budget making, and in spite of a great deal of newspaper talk about economies which had been actually effected, the net result would be a substantial increase, not merely in the amount of money to be raised by taxation, but in the tax bills. It is no wonder that the average property-owner whose real estate has barely advanced in value during the past year is disgusted and ag¬ grieved. Since the Budget hearing about $2,500,000 has been added to the totals; and the total appropriations for the coming year will reach the enormous total of $174,000,000. The resulting increase in taxation, following on the increases of the past three years will have augmented the tax bill of the average New York property-owner by more than one- third, only a small part of which has been shifted to tenants; and it becomes literally true, as Mr. Horan says, that in pro¬ testing against these successive increases the real estate owners of New York are becoming engaged in a contest for sel f-preservation. JUST because the crisis is so serious, nothing is to be gained by indiscriminate abuse of the present administration, or by loud demands for economy without any speciflc suggestion as to the manner in which economy is to be brought about. There is undoubtedly room for a difference of opinion as to the make-up of the aew Budget. Many property owners will believe that in making such a huge appropriation towards meeting the past deficiencies in taxation, an appropriation of no less than $10,000,000, the Board of Estimate has imposed an unnecessarily heavy burden upon tbe tax bills for the coming year; and they will naturally wonder whether the accelerated pace at which the Board is paying these deficien¬ cies may not be due to an appreciation of the political ad¬ vantage of being able to reduce the Budget just previous to the next raunicipal election. In another year these deficien¬ cies w'ill he paid, and a large amount of money now raised by taxation can be deducted from the totals. This is, however, only a matter of detail. The debts had been incurred in the past by vicious financial methods and they have got to bo paid. Whether the Board of Estimate was wise or not in making such a large appropriation in any one year towards the settling of these debts every candid property owner should recognize that the Board of Estimate has desired to economize and to place the finances of the city on a sound basis. It is perfectly obvious that the conditions which have resulted year after year in an increased Budget, are in large measure beyond the control of the Board of Estimate as constituted at present, and that nothing is to he gained by personal and partisan denunciations of a group of raen who are public spirited officials. The condition is too serious, the crisis is too acute and dangerous for the use of such methods. There is only one thing to be done. The real estate and business interests of New York must cooperate with the administration in taking stock of the situation and in reaching some definite conclusion as to the way in which this constant and deplorable increase in taxation can be checked. A commission of paid experts should be appointed for that purpose, and in case such a commission cannot obtain necessary powers of investigation frora the local government, legislation to that end should be obtained at Albany next winter. There is no other method of tackling the problem adequately. We may all have our individual opinions as to the way in which the increase in the Budget can be checked and its burdens better distributed, but it is useless to urge them in view of the fact that successive Boards of Estimate have really desired to economize but have been unable to do so. There is need of some authoritative and comprehensive investigation of the liabilities and respon¬ sibilities of the city, and of its resources in property taxation. IN view of the financial difficulties under which the city is laboring, many people are urging that the use of the city's money to construct the Broadway-Lexington Avenue Subway without any guarantee of a responsible tenant should uot be considered for one moment. They say the City is already building a subway in Brooklyn, and a connecting sub¬ way in Manliattan, for which no tenants have been secured; and in the opinion of the best transit experts one if not both of these subways will be operated at a loss. Such a risk must not be repeated. Since consolidation some $60,000,000 or 70,000,000 have been invested in East River bridges, which, whatever their value to the city, are not or will not be even remotely self-sustained, aud which constitute a grave burden* upon the Manhattan taxpayer. These citizens think that hereafter ail' transit improvements should be made to pay for themselves, and unless their profitable operation is as¬ sured, they should not be constructed. It is a fair presump¬ tion that they cannot be profitably operated, in case a respon¬ sible operating company cannot be found; and the policy should consequently be definitely established by the Board of Estimate of never, or almost never, constructing a sub¬ way until it is assured of a satisfactory tenant. Possibly some exception to such a rule may be allowed under certain conditions, but assuredly every effort to avoid construction in advance of an operative lease should be made. The city cannot afford to spend its credit on possibly unremunerative subways, when so many remunerative subways could be built. THE Wall Street Journal recently contained one of the most convincing exposures of the subway policy of the Public Service Commission that has yet been published. It points out that the economical way to build new subways would be to construct a small portion first, supplying the larger center of population, in order that the old work should be self-supporting during the period when the new constrnction was undertaken bit by bit. In the case of sub¬ ways, every arrangement would, be made to limit the amount of excavation and to insure cooperation with existing sub¬ ways, so as thereby to obtain traffic-feeders. The Journal then points out that the tri-borough route violates every one of these fundamental canons. No attempt is made to connect with other subways. From 42nd Street to the Battery, where it is proposed to establish that fruitful source of congestion, a stub-end, it is in competition with a subway in which the