New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-07-20

struct1on industry was curtailed. In
stead Of stimulated, during the war. In
order to divert the materials. labor and
credit normally employed in tho indus
try, severe restrictions both on tho
production of materials and on con-
struct1on were enacted. The output Of
sixteen building materials, for exam
pie, was reduced from Is to 80 per
cent. Because the construction indus
try was one of those that were re-
pressed during the war, wages in that
industry and also prices Of building
materials were kept down, the metals
group of materials forming the most
notable exception to the rule.
Building Now a Safe Investment
1T Is possible that some building ma
terlals may come down in price, but it
is Just as probable that some other
some trades in the building Industry
may go up. The reductions in steel
prices, including those of March 20.
1919, have brought the finished steel
products number down from 228. in
November, 1918, to 1876 at present. a
drop of not quite Is per cent. But The
effect on the cost Of construction has
already, in some communities. been
largely or wholly offset by wage in
creases. Even in the case of high
grade steel skeleton Office building, as
crease in cost is far below the per
centage of increase in the general in
dex number for commodity prices.
One can hardly escape the conclusion.
therefore, that the cost Of construction
will not come down to such an extent
as to endanger a judicious investment
made in the erection Of new building.
Where the rents offered show a fair
net return on the cost to-day Of a new
building, after deducting a reasonable
sinking fund allowance, no one should
hesitate to build or to lend money for
building.
Rising Rents
Rents are determined by supply and
demand. In the case Of housing dur
ing the early part Of the war the de-
mand was curtailed by the rapid ad-
vance in commodity prices, which i'm
PEELED many tenants to crowd into or
get along with less space than their
normal standard of living required,
and by the drafting Of the young men
Of military age. Within a year, how
ever, these influences had spent their
force. By the end Of 1918, according
to the replies obtained from a ques-
tionnaire sent to real estate boards
IN nlnety-one cities, only four Of these
cities had a housing demand that was
below normal, while in fifty-two cities
rents had advanced 10 per cent or
more, in some instance 30 to so per
cent. This rise in rents took place
at a time when the population at
home was as economical of house room
as possible and while several millions
of soldiers we're absent in the service.
Land Values Certain to Advance
Another important fact was dis
closed by the replies to the question
naire-namely, that despite rising
rents for housing in the majority Of
the ninety-one cities the market
values of house sites had de-
clined in six cities and had re-
manned practically stationary in
seventy-two The market value
of land is, like rents, determined by
the interplay of supply and demand.
During the war the demand for city
land was relatively small, because
dealing in real estate was discouraged
ny the banks as a non-war activity re-
curing the use Of credit. With a
restoration of easier mortgage loan
conditions the demand for real estate
will inevitably increase. Nothing can
seem more certain than that in our
growing American cities the market
value of land must advance briskIy.
City land at present is probably the
least inflated Of all material wealth.