New-York tribune., 1920-09-20
Mayor to Ask
City Bond Issue
To Aid Housing
Corporation Counsel's Bills
Providing for Municipal
Loan Will Be Presented
at the Assembly Session
Would Create Trust Fund
Six Per Cent, Fifteen.Year
Securities To Be Issued i'm
Next Five Years, Is Plan

ffteen-year building loan trust bonds
is favored by Mayor Hylan as means
Of stimulating building to relieve the
housing shortage. The contents of five
bills, drawn up by John P. O'Brien
Corporation Counsel, and approved by
tbe Mayor, for presentation to the spe-
eial session of the Legislature, which
convcnes tonight, were made public
yesterday by the Corporation Counsel
The bills were worked out by Frank
Mann, Tenement House Commissioner,
in collaboration with Alanson T. Briggs
and other housing experts. The Mayor,
in transmitting the proposed measures
to Senator Charles C. Lockwood, chair
man of the Legislative Committee on
Housing said the bills "are designed
to afford some measure Of relief in the
housing crisis now confronting the
city"
II do not claim for the plan," said
Mr. Mann, "that it is panacea to cure
all housing ills, but believe that it
will give substantial relief"
Mayors Program
The Mayors program is:
"1-A bill to provide for relief in
an emergency existing in the City Of
New York due to lack of housing and
to enable the City of New York to
provide means to encourage the con-
struction of new dwellings, apartments
and tenement houses in said city dur
ing said emergency.
"a bill amending Section 205 Of
the greater New York charter author
izing the Commissioners of the Sink
ing Fund to invest sinking fund
moneys in the bonds authorized by the
bill numbered /.
ga bill amending the greater New
York charter by adding Section 2o5o
authorizing the Commissioners of the
Sinking Fund to create the Office Of
housing commissioner to be appointed
by the Mayor, and providing for en-
ployees and expenses.
ga bill amending the general tax
law by authorizing exemptions to be
be performed under the bill num-
bered |.
GA bill amending the general
business law permitting a higher
rate of interest to be charged in mort
cages authorized by the bill num-
bered l."
Summary of the Bills
Summarizing the provisions Of the
hills Mr.. O'Brien said: "Bill No. l au-
thorizes the Commissioners of the
Sinking Fund to sell per cent, fifteen
year building loan trust bonds charge
able only against special trust fund to
ho foI ~ ~,A
credit Of the city. This fund, to be
raised from the proceeds of sale of
these bonds, is to be loaned at any
time during the next five years upon z
per cent, ffteen-year mortgages upon
property upon which the owners will
agree to erect houses of the kind pre-
sc1ibed by the commissioners at cost
to exceed by 20 per cent the amount of
the loan, thus making the encumbrance
upon both land and building about co
per cent of the total value thereof. The
commissioners are also empowered to
invest sinking fund moneys and the
Chamberlain to invest trust funds in
these bonds.
GAS an inducement to build, exemp-
tions from the following taxes are
granted during the term Of the mort
gage to the owner Of the land: Real
property tax on the building, real prop
erty tax on increase Of value of the
land, and income tax on the income
from the premises.
"a tentative provision Is included in
the latter part Of Section s, permitting
the commissioners on the approval of
the Board Of Standards and Appeals
to suspend the operation Of any law
or ordinance with respect to the con-
struction of the buildings to be erected.
"ln order to complete the scheme
and to meet constitutional objections,
four companion measures are pro-
posed.
"Bill No. 2 amends Section EOS Of
the charter so as 70 allow the in
vestment of the sinking fund in these
trust bonds.
Bill No. 3 authorizes the oppoint-
iment by the Mayor of director Of
housing, with necessary employees.
BILL No. amends the tax law in
the five particulars mentioned above
and also by an exemption of the mort
the erection OF the new building.
Bill No. S amends the general bus
mess law SO as to permit the charge
OF per cent interest upon the mort
gage. 1t should be noted that the
difference between this rate and that
Of per cent paid on the trust bonds
furnishes reserve against possible
iSoS anu tftdt the TUte 10 the borrower
Is really but 4 per cent, owing to the
exemption from taxes"
How the Bonds Would Operate
The Mayor in memorandum accom-
panying the bills thus describes the
operation Of the proposed bonds:
1.-THE proposed bill is based upon
the so-called rentes system, long es-
tahlished in France, whereby bonds are
issued by the government and sold TO
srna!! investors and the proceeds used
70 aid, BY cheap mortgage loans, the
estate.
The commissioners OF the sinking
fund are constituted trustees Of a spe-
cal trust fund, TO establish which they
src authorized to provide for the issu-
enee and sale of building loan trust
bonds--6 per cent tax-exempt bonds
maturing within fifteen years---in de-
nom nation of $3.50 and upward.
the proceeds are held by the COM
mI7Fioners Of the sinking fund in Il
trust fund, out Of which 7 per cent
mortgage loans. maturing within
fifteen years and paid in installments
annually. graduated in decreasing
ratio az the emergency diminishes. NAV
be granted by the commissioners OF
the sinking fund to the owners OF va
can't land for the construction thereon
OF dwellings. tenements or apartment
houses. up to 80 DeP cant NJ * A ,ns,.1