The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-31
TAX EXEMPTION TO
INJURE PROPERTY

Because the bill making 1t optional for
municipalities to exempt new residential
buildings from taxation applies only to
structures of four stories or more. Isa-
dore Montefiore Levy. lawyer and real
estate operator has written to Mayor
Hylan advising that the option be not
exercised by New York city Mr.. Levy
writes that such a measure would dis
courage the construction of one and two
family houses. which, he says, make for
the best citizenship. Builders, Mr. Levy
says, will naturally abandon construction
of one and two family houses and pro-
coed to take advantage OF the tax bonus
offered by building houses of four stories
or more.
Those who favored the tax exemption
bill laid stress on the fact that the
creation of one and two family houses
could never solve the problem of housing
shortage in cities, and that therefore
| anything which tends to encourage the
projection OF multifamily houses comes
the nearest TO solving the problem.
Mr.. Levy's letter to the Mayor is, in
part. as follows
I'm my humble opinion, under normal
conditions. within two years, IL we had
healthy building revival. the housing
situation would be entirely relieved. The
great rise in rents has been due to ten
ants bidding each other up and to the
speculative realty dealers. These two
factors have now been eliminated and
we are going to have a remarkable cas-
ing up OF the real estate situation.
New buildings can to-day be con-
CtrICtHd
the cost of old buildings. This can be
done by building on a 100-foot plot, as
| recently demonstrated. and by many
other modern applications. II you give
the new owner 80 per cent credit In
taxes and add to that the interest that
he saves on his money you are making
the new building cost only about 60 per
cent. more than the old buildings The
new building Is intrinsically worth al
most that much over the old building,
because In figuring the value of old
buildings there should be allowed depre-
citation in value for age as well as the
lessened value because OF the improved
method of construction now In vogue.
When you add to this the new laws
which place no restriction upon the rent
charges. the new building can easily
compete with the old building to the lat
ters substantial disadvantage. Within a
short time this will reflect in a lessened
valuation of the old buildings. with a
.c consequent reduction in their assessment
valuation and tax return. with all the
economic consequences that follow there
from.
THE great aid to new buildings Is in
the supply Of capital not tax exempt.
The tax exemption will have an imper-
ceptible effect upon the additional capi-
tai Capital will not now go into the
real estate field, with a six per cent re-
turn. when Il can go into more attrac-
tive fields. II the builders had sufficient
capital they would build without any
tax exemption.
1T Is true business buildings a-plenty
are going UP, but they are not affected
by lack of capital. They also need no
tax exemption. The business buildings
are principally built by large capitalists
who have no trouble In financing their
own projects. On the other hand, tene-
ment houses and small houses are gem
orally built by builders whose capital
resources are very limited. The large
capitaiistic interests are not Interested
In building tenement houses. II they
were. the housing situation would be
cured In very short time"