New-York tribune., 1919-12-28
By Emil Leitner

Secretary Leitner, Brener e .Sto'9
Real estate has come back into its
own after years of trouble and anxiety
on the part of owners Present condi-
tions as compared with even those of
former good times are so different that
there need be no fear OF a return to
the depressed conditions as they existed
up to few years ago.
In order fully to understand these
new conditions they should be COM
pared with those Of times gone by so
that it may be better realized that a
return to overproduction with the re-
sulting depreciation Will be practically
Impossible for many years.
Previous Real Estate Boom
The last satisfactory real property
market started in 1903 The tenement
house law had just been changed Tn
der the new law as then changed the
building trades declared a lockout be-
fore building got we'll under way and
building ceased for about eighteen
months. In the meantime the demand
for apartments had caught up with
the supply, and Is building showed a
good return operators and investors
came into the market. Profits were
being taken until prices went much
beyond cost Of production and build
ing was excessively stimulated because
builders found they could build anv
number of houses and sell them at a
profit before completion and sometimes
even from the plans.
When the land boom In 1905 sub
sided 1t left great many people with
more vacant property than they could
afford to carry and many of them de-
clded TO build In this way thcv were
dsposlng of the land at cost and al
the same time reaping a substantial
proflt on the buildings. This led TO the
big building movement which was tenn
porarily halted in 1907.
Sharp competition then started
among ingenious real estate operators
IN an effort to induce builders TO buv
tnelr vacant property New operators
agreed to take back second MORTGAGES
OF 90 to so per cent of the purchase
price of the land, and to subordinate
the mortgages to a first mortgage TO be
raised on the buildings.
Little Capital Needed to Ruild
This arrangement. brought a great
many men into the building business
because 1T was bound to appeal to men
with limited amount of capital. The
conditions worked out somewhat along
the lines illustrated by the followjnc
example. ''s
Taking 50foot house as unit Tho
man could buy two we'll located lots in
'he bronx, for about sl2 1000. The sec
ohd mortgage would be about $1,000
ana the first mortgage about s36 600
l otal $4,000. They would cost abon+
S35 900; land. $4,000; total. S47 7O00.
cash necessary, $4,000 q house.
as the payments to the larger con-
lractors were part cash and part notes
me puilder owing notes had more cash
IN the bank when the job was finished
IMAM when he started, provided he had
no no ueots at the beginning. Most of
'nese men were not men of means vben
lhey started. If they kept on buildino
lhey could swing their notes as thev
went along and for the time being thev
could hive better than they had hefors
and so they kept on building.
hardships of the Landlord
We are all familiar with conditions
at about l9l4-free rents to tenants
"hen moving In, redecorating for them
when demanded, and summer comes
sions occasionally to tenants so TINT
lhey would not store their furniture
WnlIe they went to the country. When
'he war started costs went up, and con-
structlon gradually stopped
mere has been practically no hnild-
lng Tor the last four years. and il is