New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-12-03
THE HEAVIEST LIABILITY
High Land Prices Do Not Mean a
Rich Community.
To the Editor Of The Tribune.

To the Editor Of The Tribune.
Sir: A letter from Mr.. Charles Z.
Manierre opposing the reduction n the tax
on buildings, printed in The Tribune last
week, embodes a noteworthy collection Of
fallaces, two Of which ask your pernis-
sion 10 point out. Mr.. Manierre asserts that
untaxing buildings would literally and sb'o'
lutely destroy the value Of vacant land in
this city TO the amount Of s65,oo0.0oO; as
land cannot be either consumed or trans
ported, its only value Is its value for use.
This value Is expressed by the rent IL will
command, and is wholly unaffected by the
proportions in which such rent is divided
between the landlord and the city.
What Mr. Manierrs means without doubt
is that transferring the tax on buildings
to ground rent would reduce the price
obtainable for the right to tax for tho own
ers' benefit the future users Of land At
present vacant. Instead Of being, as the
writer evidently considered H. staggering
blow to the country, such a reduction seems
contamination devoutly to be wished. And
this leads directly to consideration OF the
other fallacy to which desire TO draw atten-
ton, the assumption that tho higher the
aggregate asking price Of the city's, or any
city's, land the richer that community must
be.
This is one OF the most astonishing OF
fallacies, and yet It Is one that hnis wids
If not general acceptance. Take the case OF
New York City. The acknowledged munio-
ipal debt approximates a billion Of dollars
and the annual debt service Interest and
sinking fund.- amounts roundly 20 MY
million dollars year This debt Is owed
directly or through corporations, 10, say
&C 900 persons. The assessed selling value
of New York City's land exclusive Of i'm.
provements, is placed at FIVE billions OF
dollars. The selling price OF land being based
upon the net rent il will bring, and this rent
being on the average per cent, IL Is
reasonable to estimate the net ground rem"
Of the municipality at s250000000 q year.
As the Tax Department estimates the totsl
number of land owners at not over 2OO,OVV'
we see the assessed selling price OF New
Yorks land as q debt of FIVE billions owed
By FIVE million New Workers 70 two hundred
thousand landowners, to whom the FIVE MILF
ion have 70 pay two hundred and hfty million
dollars s year as interest In other words
the holding price Of New Yorks land con
stitutes generally fnrecognized debt burden
upon her citizens FIVE times as large and
costly as her recognized municipal dso-
bearing the same rate Of interest, never e1-
tinguishable under present laws, but always
growing, and owed to about the same num-
Der Of individuals, proportionately, as hsr
bonded and short term Indebtedness.
Would II be q public calamity, as MI
Manierre and others with similar Interests
aver. II this enormous interest charge were
TO be Offset by the amount Of the present tsN
exactions from buildings and other human
products and II the prices at which isnd
is held should come down eorrespondingy
As fast as people arrive at an understand
ing of what high land prices mean 70
community they will cease TO boast OF these
big figures as an evidence Of municipal
wealth, or to mistake for an asset that wnien
Is at present every city's heaviest liability
CHARLES I. ROOT
New York. Nov a6, 1915.