Los Angeles daily herald., 1889-07-05
Low Rentals for Costly property


Take away from San Francisco the
vast capitals accumulated in a very few
hands, the surpluses of which seek in.
vestment in gilt-eged real estate and its
improvement, and Los Angeles would
actually lead that city by several hun,
dred per cent. in the permanent build
ings she is erecting. 1t must not be
forgotten that by a combination of ex.
traordinary circumstances immense for.
tunes have fallen into the laps of q
handful of San Francisco's citi'
zens. Bonanza mines have been
one source our great railway
system, with its wonderful developm ent
and it's immense land grants, has been
another. From these two sources the
surplus of gained capital and the con.
tinued accretions amount to many mill.
ions. Real estate in all parts of the city
is constantly falling into the possession
of the favored people who own these &C.
cretions, and nearly all that is being
done in the way OF erecting costly per-
manent buildings is being done by them.
Not five per cent. of the improve
ments under way is the result OF
what may be termed the gains
of the legitimate trade and commerce of
the city. The improvements are made
by persons whose incomes are so great
that they are constantly confronted with
an immense surplus which they cannot
find safe investment for in mines, and
which they do not feel impelled to use
in industrial enterprises either in the
city or the country, but which they can
place safely in city lots and in bricks and
mortar. So much of this has been
and is being done that real estate in
that city has assumed a value far
beyond that which would be justified
by the rentals. Indeed, some of the fin.
est buildings for wholesale business on
Market, Battery and other streets have
remained unoccupied for many months,
and yet in the face of this colossal
warehouses are constantly going up.
There would be great poverty of i'm
provement going on in San Fran
cisco if it were not for the me-
ceasities of the few whose incomes are
abnormal. Los Angeles never has
had amongst her builders any of these
excessive fortunes. She has been built
up by men who achieved their surplus
wealth by slow processes. The advance
in realty values, both in the city and the
country, has given US number of citizens
who are moderately wealthy; but we
have none whose incomes are so great
and coming in so rapidly that they are
compelled to invest in city property or
leave their money idle. Hence there is
no fictitious advance in realty values
such as has been brought about by the
class in San Francisco. Rent
ais in the business parts of our city are
consistent with the capital invested in
the buildings, and when parties have
stepped ahead of the march of business
in making Improvements, they were only
q little in advance of the times, and could
afford to take very low rents. A we'll
informed San Franciscan, in letter in
these columns few weeks ago, showed
that the best wholesale property in that
city was not paying in rents two
per cent. upon the investment,
inclusive of taxes, and yet that
such property was readily sold, even
at enormous rates per front foot. OF
course such state of things is devoid OF
the elements of legitimacy. 1t results,
and could only result, from vast accumu.
lations of money in the hands of few
who have neither the sagscity,
The time nor the desire to invest their
money in enterprises that would pay
lair interest in a legitimate way. But
there is limit to this process of build
ing up a city beyond its needs. If
here were not, we would find
San Francisco at the end of score
,r 30 Of years, built so far out of proper.
ion to her business that rents would be
he very cheapest thing to be had in that
Houses, as well as lots, will
,ecome dirt cheap, when there are twice
he number of buildings that there are