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Real estate record and builders' guide: v. 85, no. 2194: April 2, 1910

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April 2, 1910 RECORD AND GUIDE 693 _ ?STABDSHED^MJ«^H£lil'**'I868. .Dented to R.E\L EsTAIE.BuiLDiKg l4;R,CrflTECTUR.E .HoUSQlOU) DESORATlorf, Bifsufess Affc Themes of Ge^&I 1,"Jtei\esi.. PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Communications should be afldressed tO C. W. SWEET Published EVerg Saturdap By THE KECOKD AND GUIDE CO. president, CLINTON W. SWEET ** Treasurer, F. W. DODGE Vlca-Pres. Sc Genl. Mgr., H. W. DESMOXD Secretary, F. T. MILLER NoH. 11 to 15 East 24tli Street, New York City (Telephone, Madison Square, 4430 to 4433.) "Entered at the Post Office at Neio York, N. Y., as seeond-class matter." Copyrighted, IDIO, hy The Record & Guide Ca. Vol. LXXXV. APRIL 2, 1910. No, 2194 THE SEVERAL SUBSTITUTES which are being proposed for the personal property tax have certain merits, hnt It is wholly improbable that even if the personal tax is abol¬ ished, any of them will be adopted. They are all of them politically inexpedient, because they would impose taxation on a larger numher of people than now pay the personal tax, or would be obliged to pay the increased real estate tax, resulting from its abolition. The habitation tax, which is theoretically an excellent method of raising necessary local revenue, would be a considerable income producer, and would give a much larger proportion of the population a direct pecuniary interest in the city government; but FOR THAT VERY REASON it will never be adopted. No administration would dare face the odium, incurred by its imposition. A tax on business transactions would be less unpopular, but it would also be far less desirable. It would be so undesirable that it will never be seriously considered. The owners of real property should realize at the outset that in case the tax on personalty is abolished, they will have to pay the bill. Under ordinary circumstances they could afford to do so, and they would in the long run reap considerable indirect benefits from the abolition of the tax. New York City would then become one of the few places in the country, iu which rich men could live and, a large business transacted, without any legal threat of unfair taxation; and undoubt¬ edly real-estate values, particularly in the residence districts, WOULD BE BENEFITED by the change. But at the pres¬ ent time they cannot afford to pay this bill. The tax rate has, during the past three years increased steadily and largely. It is likely to be still further increased by over ten points, nest fall. Under such circumstances an addition of six more units to the rate would be a grave burden, which would be equivalent to the confiscation of just so much real estate value. Before any further burdens are imposed on real estate a certain time should be allowed for the distribu¬ tion of those increases in taxation, which have already be¬ come inevitable. The only way in which the burden of the personal tax could be imposed on real estate without injuring real-estate values would be hy means of DRASTIC ECON¬ OMIES in expenditures on the part of the existing adminis¬ tration. Such economies are promised, but in such matters there is often some discrepancy between promise and per¬ formance. The plan to abolish the personal property tax can very well go over until next year—by which time the amount of these economies will be definitely known. THE Record and Guide has frequently pointed out that the most significant innovation in New York real estate methods during the past few years has consisted in the in¬ creasing popularity of THE CO-OPERATIVE APARTMENT HOUSE. There can be no doubt that this type of huilding has now passed beyond the merely experimental stage and is firmly established as one of the methods whereby New York families will secure suitable habitations. The buildings erected by this method have not been uniformly successful, but they have always succeeded when the associating indi¬ viduals were financially responsible, and when the particular operation was conducted according to sound business meth¬ ods. The general success of these ventures has naturally aroused speculation whether the same methods of ownership and financing could not he applied to husiness buildings; and we understand that at least one enterprise of this kind 'is^DQW beiug seriously considered. Its details have not as yet been worked out with entire satisfaction; but in arrang¬ ing the plans no serious obstacles have been encountered.' The Record and Guide is unable to see why the co-operative office and loft building is net as practicable a form of rea! estate and buiidiug enterprise as is the co-operative apart¬ ment. Indeed, in certain repects. as we shall see,, the former offers even more advantages than the latter. The co-operative apartment has appealed to well-to-do New York families chiefly for three reasons. In the first place, it, enables a ma..n to secure an apartment in a desirable location at a smaller annual expense than he can obtain as much space either in a private house or in an ordinary apartment house. In the second place, he has a fair assurance that the cost to him of this apartment .will not be materially increased. In the third place, the plan and the decoration of his apartmeint can be adapted to his own peculiar needs and tastes. In return fcr these advantages the purchaser of stock in a co¬ operative building company is obliged to assume certain risks, hut whenever the buildings have, been well-planned and financed these risks have not proved to be serious. The large number of additional enterprises of this character, which will be started this spring afford a conclusive indica¬ tion that the majority of purchasers of stock in these com¬ panies have profited hy their investment. IN THE CASE of a co-operative loft or offlce building these advantages would be increased rather than diminished. It is becoming extremely important for certain business men to secure permanent offices for their business iu some desirable central location. At present they can do so only by either purchasing a site and erecting a building of their own or by securing desirable premises on a long lease. In the first case he is obliged to tie up a large amount of capital. In the second he faces the probability that when his lease expires he wil! be asked to pay a larger rent—particu¬ larly in case his business has fiourished in that particular location. Why then, should not certain numbers of cor¬ porations and firms, so circumstanced, combine to buy a site and erect a building of their own. in which they could have some assurance of permanently possessing the ofiiees they need without the threat of a constantly increasing cost? In buying the land and erecting the building themselves, they could eliminate the speculators' profits and secure their own space at a smaller annual charge. The rest of the build¬ ing could be rented at the full prevailing rate, which would still further reduce the cost to the stockholders. Finally, they would be much more likely to obtain a building, planned, equipped and decorated in a suitable manner. Obvious¬ ly, a plan of this kind would be much more feasible in the case of an office or loft-building than in the case of an apartment-house. In the former the apartment is the unit; and a stockholder who wishes either to increase or diminish his space has difficulty in doing so. But the space in an office or loft-building is divisible into smaller units. A busi¬ ness man who purchases a certain number of units can in the case of a change in the circumstances of his husiness either buy more space or sell off part of the space he already owns. We are convinced that when this idea is examined it will appeal to many of the wholesale merchants who are now moving up town into the new mercantile district, and tbat a considerable opportunity of profit is waiting for men thor¬ oughly informed as to real estate and business conditions, who will promote this class of building project. The great objection which business men would be likely to make would turn upon the way in which capital invested in such an enterprise is tied up. Of course the stock in a well-managed building would always be salable, but would not constitute a security, upon which money could be readily borrowed. In all probability, however, even this difficulty would disap¬ pear in time. In proportion as these enterprises were suc¬ cessful and increased in numbers certificates of ownership would become more and more desirable as security for loans, and we should not be surprised eventually to see a company organized, which would make a specialty of advancing money on this class of security. THE COURT HOUSE COMMISSION is certainly confronted by a problem of extraordinary difSculty, and its mem¬ bers are not to be envied in the task of selecting the best of the several alternatives. The fundamental difficulty arises of course from the prohibitive price of real estate in every central location, yet as soon as it is proposed to depart from a location in the neighborhood of the existing Court House, the plan is blocked by the opposition of vested interests. It has always seemed to the Record and Guide tbat, the best