Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 96, no. 2487: Articles]: November 13, 1915

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REAL ESTATE BUILDERS NEW YORK, NOVEMBER 13, 1915 I FUTURE CONSTRUCTION COSTS IN NEW YORK I Some Interesting Facts anid Figures Showing What Will | Happen If Foreign Markets Call for Building Materials | lillllllllliilllllilllllllillllllllllllllllllilllM BY this time building contractors, archi¬ tects and prospective building in¬ vestors are pretty well convinced that normal conditions are at hand. They have been bumping over a period of depressions for so long that they were about to rejoice over the return of pros¬ perous times, when an unexpected ad¬ vance in the price of Portland cement, structural steel, brick and some of the basic building commodities reminded them that perhaps conditions were head¬ ed for the extreme opposite to that from which they have just emerged, which prompted an investigation by the Record and Guide, with the following rather startling results. Satisfied early in the year that the war was going to have a continued de¬ pressing effect upon construction, build¬ ing material manufacturers, with hardly an exception, decided to limit their stocks this year. They had experienced considerable stress in 1913 and the latter part of 1914 from over stocks, in a dull market. This time they were going to be prepared. So they reduced their capacity. Building Gains Shown. Just at about the time when the fall reaction in building construction normal¬ ly develops, building conditions began to show gains. August showed more plan filings than for any single month since July, 1912. September gained over August by 22.9 per cent and October showed 37.1 per cent. The flotation of the Allies loan brought confidence. A market for our cereals and mill products was assured whether the Dardanelles were opened to the wheat fields of Russia or not. Rates of exchange automatically regulated themselves. Stocks began to be pur¬ chased and building money, notably in mortgages, became easier. That re¬ leased a great quantity of construction work that had been held back for a year or more. The Bronx began to take the lead in borough building activity. Queens was a close second. Industrial East Jersey kept pace. Shipyards began calling for tmiber. Machine shops called heavily for war steel. Then they began to take structural steel to enlarge their own plants. The reflection was found in in¬ adequate storage and housing facilities in various centers. Bridgeport, Conn., added 22,000 to its population in five weeks and some factories had to house their people in stock rooms until they could find boarding places. Newark pushed its plans for meadow develop¬ ment to completion this year, instead of next spring. Factories are going up there. All these operations called for building materials. Material Price Movements. In April of this year Portland cement was down to $1.23 a barrel. Dealers bought heavily. Their yards were filled. In September they were receiving their last shipments at that price from the mills. In October prices were at $1.52 a barrel and practically all the unprece¬ dented stocks of $1.23 cement had gone into construction. By the end of Octo¬ ber all the $1.48 cement had been sold, $1.52 prices were stifif and on November the first the price went up to $1.67, with dealers anxiously inquiring what pros¬ pects there were for getting cement at that price after thirty days. In March of this year common Hud¬ son brick was selling at $5.50 and $6.00 a thousand, dock, N, Y. wholesale to dealers. Manufacturers had some 400,- 000,000 still unsold from last year. On August 1 the price of this commodity had dropped to $5,25 and $5,75. Manu¬ facturers were in despair and were ready to close their plants down with less than half normal quota. There had been a strike, not wholly regretted by manufac¬ turers, at Haverstraw early in the brick making season. But when it became known that in August a gain of 13.7 per cent, had been made in building construction brick manufacturers changed their mind about closing down. They tried to get more men, but other mills offered more money and men were hard to get._ In the meantime prices in a dull building market in this city stayed steady at low levels until on October 9 prices were found to be at $6.50 and $7 a thousand, and not a great quantity of future brick available. Dealers had not stacked to any extent, so that the mar¬ ket was extremely tight at those levels and was considered firm. Ideal Building Weather Helped. To further aggravate building material conditions, ideal building weather pre¬ vailed almost continuously from Septem¬ ber 1 to the second week in November. Construction work went ahead as seldom before in New York at this time of the year. Operations were rushed to com¬ pletion for the October renting season, and so were other operations that were not scheduled to be completed until after the first of the year. This condition pre¬ vailed until it was suddenly discovered that the railroads were all congested with freight. The Panama Canal slides had shut out quantities of Oregon pine and other lumber from the far west. Every available steam packet doing a coastwise traffic had been chartered for foreign freight service, barges down the bay were impressed into floating store¬ houses and even premiums were unavail¬ ing in moving freight. Concrete Ingredients Hard Hit. If ever there was a case of unprepared- ness in the U. S. A. it is right now in the matter of making a meagre supply keep up with demand for building mate¬ rials. Concrete ingredients, for instance, are particularly Iiard pressed. Trap rock, ordinarily used for concrete bond, where gravel is not used, has advanced five cents a cubic yard and may go higher. The other alternative is gravel, which has been advanced between five and ten cents a cubic yard. All steel reinforce¬ ment material is higher by ten cents a pound than it was four months ago. Even sand has gone up five cents a cubic yard. What of Foreign Reconstruction? Leaders of thought in the building ma¬ terial and equipment market have been forced to consider possible eventualities should a demand develop from Europe for American quick-assembling building materials like hollow clay tile, Portland and natural cement, lumber, sheet metal, glass and insulating material for houses. According to reliable authorities in¬ vestigating the destruction wrought in France during the war, the structural damage to property in the city of Liie, France, amounts to $300,000,000, esti¬ mated as cost of reconstruction of all buildings damaged. This is about what the destruction to property in San Fran¬ cisco was at the time of the fire. But when there are several hundred cities and towns laid in almost equal waste in all parts of France, Belgium, Servia, Bul¬ garia, Greece, Turkey, Russia and, to some extent, in Germany, not to mention the damage wrought by air raids in England, the possible demand for con¬ struction material reaches unimaginable figures. Europe's Cement Resources. Under normal conditions, foreign pro¬ duction of Portland cement alone is shown in the accompanying table: Per cap. Bbls. Estimated consum., produced, population, bbls. England........ 16,000,000 45,000,000 .355 Germany........40,000,000 65,000,000 ,621 France.......... 3,500.000 39,300,000 ,089 Russia.......... 3,000,000 160,000,000 .0189 Belgium........ 1„500,000 7,.300.000 .2054 Austria-Hun----- 4,500,000 50,000,000 .09 United States... 92,000,000 95,000,000 .9^ With 78 per cent of the individual and mining section of France laid waste by an invading army, all machinery either removed or destroyed, and her men in¬ capacitated, it is apparent that she will not immediately be able to help herself in the reconstruction work and feed her people and shelter them. The percent¬ age of France's iron, steel and coal in¬ dustry under Germian control is as fol¬ lows: Coal, 88.8; coke, 78.3; iron ore, 90; pig iron, 85.7; puddle iron and puddle steel, 62.4; steel billets, 16; rails and sleepers, 16; girders, 88.3; sheets, 63.2; wire, 100; steel castings, 76.9. France has never been a large user of cement for house construction. She had used brick and stone. But now, with fewer men to make brick and hew the stone, it is look¬ ing for foreign supplies to help her house her people and quick-assembling materials are being inquired for. Al¬ ready there has been received very defi¬ nite proposals for Portland cement run¬ ning in volume from 1,000,000 to 3,000,- 000 barrels. How About Domestic Supplies? If this demand should develop, and it IS assumed that if it already has devel- op.ed in France, similar inquiries will de¬ velop in other countries, people here at home are beginning to ask where will building material prices go to. So specu¬ lative elements have entered the material field and while manufacturers are pro¬ tecting regular customers, it is likely that prices will continue to rise further, espe¬ cially if construction continues through¬ out the country. This will not be prob¬ able until after the railroads get into the supply market, but they have already begun to buy. It is a good time for build¬ ing projectors to be properly prepared.