Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 86, no. 2231: December 17, 1910

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December IV- iQio- RECORD ANI> GUTDE 1033 mi .SSTABDSHED <^ MJWf^H £!«> 1868. Dp6Tfl»p!HLEsTAn,BuiL0Ifib A,RCKlTECTJI^,l{0USE:i(0O)DE«IiXIira^ BKsnfess Atto Themes of GEiiEf^l IK^hesI .j fRICE PER YEAR IN ADVANCE Commtinications shouM ba ftddressedl ^ C, W, SWEET Publislied Everff Saturdap By THE RECOKD AND GUIDE CO. President, CLINTON W. SWEET Treasurer, F. W. DODGB VIce-Prea Sc Genl. Mgr., H, "W. DESMOND Secretary, K T. MILLER Nos, II to IS East 24tli Street, New York Cltr (Telephone, Madison Square, 4430 to MSB,) "Entered at the Post Office at Nav York, 2i. Y., os second-class matter.' Copyrighted, 1010, by Thn Record Se Guide Co. VOL. LXXXVl. DECEMBER 17, 1910, No. 2231 DULL BUT STRONG. THE real estate market for the year 1910 is closing dull, liut strong. There is little activity, but there are no signs or liquidation. In the meantime the general and the local conditions that are responsible for the diminished activity of the past year are slowly heing repaired. Un¬ wholesome speculative extravagance was checked six months ago, and the country is gradually reaping the benefit in a declining cost of living, larger exports, smaller imports and the accumulation of capital. The process of recuperation will probably continue throughout 1911, but by the fall of the coming year the way will be cleared for another year or two of business expansion. The local real estate and building market is sharing In this process of repair and re¬ cuperation. The fall renting business bas been on the whole very satisfactory—particularly in view of the overproduction of lofts and apartments. A good many tenants have been taiten at concessions in rents, but if the existing demand for new living and business accommodations continues, such concessions will in all probability not be necessary in the spring. Very few new buildings will be open for rental after February 1st, and in six months the owner rather than the tenant will bold the stronger position. Tbese remarks apply to Washington Heights as well as to the new mercantile dis¬ trict. By the spring also some deflnite decision will prob¬ ably be made about the proposed Subway extensions, and this decision will stimulate local speculation. It looks as if the worst was over, and while the better time will not come suddenly, it is most certainly on the way. NO BIDDER, AN ATTEMPT to sell at auction a desirable vacant plot in the best residential part of Fifth Avenue failed to ob¬ tain a bid anywhere near tbe flgure for which the plot was purchased flve years ago. Of course the poor showing made at this sale does not mean that tbe property is not worth any more than the price, at which it was bid in; but it does mean that Fifth Avenue residential property has not shared In the recent prosperity of Fifth Avenue business property. In spite of the steady displacement of expensive private dwell¬ ings south of 59th Street, values north of 59th Street, on tbe East Side, have not been rising of late years, and this is particularly tbe case on Fifth Avenue itself. Very few new residences have been built, and even the most desirable property bas not commanded a ready sale. No doubt this condition should be in some measure traced to the fact that the accumulation of wealth has not been going on as rapidly since 1906 as it did during the previous six years. Then, too, the number of rieh men from other parts of the coun¬ try who come to live in New York has diminished consider¬ ably in volume. People of this class visit New York more than ever, and spend more money in the shops; but they are not so likely to take a permanent residence here. Probably the increase in land values has something to do witb these facts. It costs so much to buy or build a desirable dwell¬ ing in New York that even very wealthy families have to consider the expense. But the change in the habits of liv¬ ing of well-to-do people also has undoubtedly a great deal to do witb the smaller demand for costly residential prop¬ erty. They are spending a larger proportion of the year In the country; and during the few months which they pass in New York they are content with apartments in a hotel or in a good apartment house. This tendency is likely to be¬ come more rather than less pronounced in the future; and the result will be an increased demand lor expensive apart¬ ments of all kinds and a diminished demand for expensive private houses. Values on tbe East Side will hold firm enough, because the limits of the best residential district are so small, but it is doubtful whether they wiil increase very much further. CLEARING THE ATMOSPHERE. THE announcement by Mr. McAdoo that bis bid for the operation of the Triborough route is to be allowed to expire by limitation clears the atmosphere to a wonderful extent. It means practically that bis company is not in a position to compete with the Interborough Co. for a share in the Subway business of the metropolis. If he ever ex¬ pected his bid to be immediately accepted without any at¬ tempt to do better, he must have been deceiving himself. Not even New York City could aiford to accept such an offer without couuting the cost. There has been no answer made to the argument advanced in last week's Record and Guide, that if Mr. McAdoo's offer were accepted, the city would be rejecting competition at the moment when it was effective in order to establish it at the time when it would be inef¬ fective. Two different corporations make bids for the priv¬ ilege of operating certain additions to the city's Subway system. The fact that one of these offers provided much better means of communication than the other at very much smaller cost was not disputed. But it was alleged that the better offer should be rejected, because a monopoly would result. One of the competitors is disqualified in advance, and the city is to discriminate in favor of the other. Such a policy would be suicidal. There can be no competition in the operation of urban transit lines. If the Triborough route were built and the operative contract given to Mr, McAdoo, nine-tenths of the passengers would have to take either one route or the other. There would be for a while a certain amount of competition between the two routes for tralSc between 42d St. and tbe flnancial district, and this compe¬ tition might be of some beneflt in keeping the service of both companies up to the mark; but within a few years the trafiic would increase to such an extent that both routes would be overcrowded and competition would necessarily cease. It must be remembered, also, that the Triborough franchise would be granted, not to a man, but to a corpora¬ tion, and that in the long run all corporations are much alike. Mr. McAdoo may be popular and unusually well-in¬ tentioned for the head of a public service company; but his personal popularity never constituted a serious argument in favor of the acceptance of his bid. Nobody could know how long be might remain at tbe bead of the corporation be rep¬ resents, and nobody could know whether in a few years the control of his corporation would not pass to the same in¬ dividuals who control the Interborough Co. Tbe city is now obliged to place its faith, as it should, not in tbe good in¬ tentions of any individual, but in a contract which gives it the most for its money and which reaps all the beneflt of competitive bids, while still permitting a re-opening of the same question hereafter—provided the Interborougb Co, proves to be an utterly unsatisfactory operating agent, --------------------4-------------------- COMPETITION AND DUPLICATION. ONE of the most curious aspects of the outcry in favor of competition at any cost is the fact tbat it ignores the teaching of economic experts and the experience of otber American cities. All the economic text books describe urban railway systems as natural monopolies; and by natural mon¬ opolies they mean an economic condition which makes com¬ petition either disastrous or ineffective. Whenever such a condition exists combination and co-operation inevitably dis¬ place competition, and tbe combined services are placed under public control. The most perfect example of the waste and inefflciency involved by competition in a local public service is the telepbone—in which duplication of service in¬ volves the utmost inconvenience to the public and a double expense to a large number of subscribers. But an urban railway system is a hardly less perfect example of the same thing. Competition in rapid transit also means expensive duplication of service, and the payment of two fares, in¬ stead of one by a large proportion of the traveling public. For tbat reason tbe two cities in the Middle West whicb have most consistently fought their local street railway companies in the interest of low fares—namely, Chicago and Cleveland— both of them ended their flght, not by building an indepen-