New-York tribune., 1920-09-15
Getting New Houses


Governor Smiths remarks at the
City Club concerning the housing
problem were marked by common
sense and sense Of reality, and
raise hopes that next week at AL
bany something will be done to lift
load of anxiety which rests heav-
lily on many thousand families.
He gave no sign of a wish to play
politics or to fool away more time
on mock remedies, and it is to be
hoped the Legislature will display
similar spirit.
The rent laws of last spring, al
though in many instances they have
checked the rapacity of greedy land
lords, have done, on balance, little
good, if any. The unknown terrors
of the laws, as inconsistently ap-
piled by the municipal court judges,
, have dried up housing construction.
Rents on an average are probably
higher because Of them, for if some
have been protected against extor-
ton others are paying more because
of an engendercd dearth of apart
ments.
To retain the laws to guard
against rack rents in clear cases is
well enough, but unfairly applied
they deter, rather than stimulate, the
building operations which promise
the only escape from the deadlock,
with the law of supply and demand
steadily working against the public.
Hence it is agreeable to note that
the Governor is a little more en-
phatic than he was last spring in
recognizing that the Legislature
partly erred in commission and
wholly in emission.
Concerning the most helpful pro-
posal in sight-namely, that hous-
ing lmIio> e!nents cf specified
character shall be exempt from tax
alton for ten years-the Governor
did not speak. But this does not
imply he is opposed to it. Its prac-
tlcalltleS must appeal to him. But
the Governor did glance at the
companion proposal to exempt in
come from realty mortgages from
! the state income tax. He recognizes
the excessive flow Of investment to
exempt bonds, but naturally doubts
whether the remedy is in more ex-
emption. He might have added that
an income tax exemption would be
almost negligible in promoting new
/ construction. If the exemption were
restricted to new mortgages whose
! proceeds are to 60 into new con-
struction this would have influence.
but the proposal is net this. 1t is
to exempt all realty mortga ges, old
! as well as new. The normal effect
would be to enhance the value (the
9o per cent old as we'll as the S Der
cent new of mortgages to their
owners, with few new houses.
So far as stimulating construc-
tion is concerned the good of ex-
cmptIon Is in observation-disclosures con-
fining the subsidy, if the exemption
is to be called such, to the invest
ments desired. These Investments
being new houses, it follows that the
exemption should be limited to hous-
ing improvements. Water a subsidy
too much, give it to every one, and
1t becomes valueless in special
way.
Little objection in principle can
be raised, it would seem, to the pro-
| posal to lend municipal credit to
house builders under proper safe
guards. The city went into part
nership with the subway companies
to secure rapid transit not otherwise
gettable, and it is late to cavil at
aid to housing undertakings, even
more necessary. For the city itself
to- build and to become a large
scale landlord would open the door
to all sorts of evils, not the least of
which would be that as the munich
pality went into the landlord busi-
ness private investors, in the main