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September 5, 1908
RECORD AND GUIDE
.457
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ESTABUSHED-^ M,AftCH 21ii> 1868.
DD^tfl) p RfA.L Estate . BuiLdij/d A,R.cKiTEeTUR.E .Household DEflOEiATioil.
BiTsii/ESs AfioThemes of GEffeyil Ir/iEi^Esi.
PRICE PER YEAR IN ADVANCE EIGHT DOLLARS
Communications should be addressed to
C. W. SWEET
Pablisfied Every Saturday
By THE RECORD AKD GUIDE CO.
President, CLINTON W. SWEET Treasurer, F. W. DODGB
Vice-Pres. & Genl. Mgr.. H. W. DESMOND Secretary, F. T. MILLER
Nos. 11 to 15 East 24111 Slreet, New York City
(Telephone, Madison Square. 4iB0 to 4433.)
"Entered at the Post Office at New Tork. N. Y., os second-class matter."
Copyrighted. lOOS, by The Record & Guide Co.
Vol. LXXXII.
SEPTEMBER 5, 1908.
No. 2112
THE real estate market continues to be seasonably dull,
but there are many promises of activity to come. Con¬
sidering the severity of the panic last fall, and the long,
continued difflculty of borrowing money on real estate, there
has been surprisingly little liquidation. Of course, it was
inevitable that foreclosure suits should be more numerous
than they were during a period of real estate activity and
of easy money, but the number of foreclosures have been
few compared to similar periods in the past. Moreover, their
effect upon values has been comparatively small. The neces¬
sary liquidation has not been accomplished without a dimi¬
nution in the prices at which certain classes of property have
been held; but considering the steady increase in values in
almost every part of the city from 1900 to 1907 the subse¬
quent recession has been very slight and has not amounted
to much more than the abatement of certain notions as to
selling prices which were always excessive. Bargain hunt¬
ers have not reaped the harvest they might have expected,
and from this point of view the dullness which afflicts the
market is a sign of strength. Better inactivity accompanied
by firmness than activity as the result of weakness. The
time will come when buyers will regain sufficient confidence
to purchase property freely at prevailing prices, and when
that time does come the strength which real estate values
have recently maintained will count very much in favor of
real estate as a form of investment. There can be no doubt
that on the whole capitalists who invested their money in
New York real estate from 1905 to 1907 have suffered less
from the financial trouble and business inactivity than have
capitalists who invested their money in any other way, and
there can be no doubt that one of the causes which has con¬
tributed most effectually to this result-is the conservative
manner in which the business of lending money on real es¬
tate is now being managed. No speculative movement to
increase the selling price of any kind of property can suc¬
ceed without the aid of lending institutions, and the panic
of last fall was in part the result of the over-abundant facil¬
ities which certain banks had afforded to speculation in
stocks during 1906. But real estate values in this vicinity
have not of late years been inflated by any excessive leniency
on the part of money-lending institutions. The conservatism
with which this branch of the real estate business has been
handled is largely responsible for the comparative firmness
of real estate values. The pace was moderated as soon as
there were any signs of inflation; and the consequence was
that the reaction did not have to be severe.
THE recent foreclosure of au apartment hotel on Madison
Avenue, south of 34th Street, calls attention to the pecu¬
liar situation in which apartment hotels in that vicinity have
been placed by the business growth of the city. It is only
four years ago that the side streets between Sixth and Mad¬
ison Avenues south of 34th Street were very much in favor
as locations for apartment hotels; and about twenty-five
fireproof buildings of this description, most of them at least
eleven stories high, were erected within a few years. The
comparative quietness of this neighborhood, and its conven¬
ience to the shops, restaurants and theatres made it seem
an ideal location for a good class of private hotels. So for
awhile it proved to be, and so in some measure it still is;
but according to present indications, it will not continue to
be so very much longer. Of late years the tendency of im¬
provement has entirely changed. Large numbers of loft and
business buildings have been erected on the very streets on
which some of the most expensive of these hotels are stand¬
ing, and these new business buildings have been for the mast
part very successful. There can be no doubt that little by
little all the side streets south of 3-fth and even 42d Street
will be given over to various kinds of business, and that the
predominantly commercial character of these streets will
make them much less available for residential hotels. Many
Ioft buildings on a street means that the roadway is blocked
with trucks, the sidewalks cumbered with boxes, and a gen¬
eral atmosphere of bustle and noise. For this reason busi¬
ness structures of this class tend to drive out every sort of
residential buildings and tends also to injure a neighbor¬
hood for retail trade. There can be no doubt that in the
course of a few years this neighborhood will be far less
adapted to apartment hotels than it has been until recently.
Transformations of this kiud are continually taking place in
New York; but they rarely take place as quickly as they
have in this instance.
DURING the few weeks of its existence, the Taxpayers'
League, recently organized under the leadership of
the Allied Real Estate Interests, has already accomplished
excellent work. It has aroused public opinion among the
owners of real estate in reference to the manner in which
their interests are endangered by the steady and enormous
increase in the municipal budget. As long as the assessed
valuation of real estate was increasing by leaps and bounds,
the increase in expenditures did not mean any immediate
enlargement of the tax bills; but now tbat a period of
smaller increase in real estate values is at hand, the con¬
tinued enlargement of the municipal expenditures will mean
just so much money out of the pockets of the taxpayers.
Considering the high level of assessed values, the tax rate is
already one of the heaviest in the country, and it promises
during the next few years to become heavier still. Evi¬
dently, unless the taxpayer of New York does something to
protect himself, he will find the value of his property di¬
minished, because of the heavier public burdens which ;t
is obliged to bear. The question is. What can he do? The
step which it is proposed to take immediately is to appear
before the Board of Estimate and Apportionment during the
discussion of the new budget and to urge the necessity of
economy. This will undoubtedly be a very useful thing to
do; and it should be followed by good results. A very
strong case can be urged not only in favor of a closer scru¬
tiny of the municipal expenditures, but also in favor of a
budgetary reform. The fact of the enormous increase in
municipal expenditures, amounting to over 60 per cent, in
eight years, is patent; but nobody is in a position to state
precisely where the leakage occurs. It is known, of courser
in general, that the city does not get its money's worth in
its expenditures, particularly in the matter of salaries. Its
wages fund is constantly being increased in bulk and in
detail; but, at the same time, no economies and reductions
are made. During a period of bad business, when business
men are economizing to the last penny, the city does noth¬
ing to diminish its payroll. The heads of the departments
act as if their chief business was to spend their appropria¬
tions in any event, and try the next time to get as much
more as they can. Their estimates and system of account¬
ing conceal, rather than reveal, the details of their disburse¬
ments. The whole system is such that no one, not even the
members of the Board of Estimate, are in a position to place
their finger on different parts of the city's work and say
that there is where the leakage is occurring. No doubt the
Bureau of Municipal Research is working along the right
lines and will, in the course of time, help considerably to
locate examples of departmental extravagance; but it is
evident that in the long run the evils of the existing situa¬
tion can be remedied only by some radical changes, both
in the financial and the administrative machinery of the
city.
THE Record and Guide doubts whether anything effec¬
tual and permanent can be accomplished in the way
of municipal economy unless co-operation to that end can be
secured from the heads of departments. At the present
time these gentlemen spend the money appropriated for
the running expenses of the city. The budget, as a whole,
is the result of their calculations as to the needs of their
departments; and in making these calculations they are
actuated by only one motive—and that is to secure just as
much money as they possibly c^a. They know that in any