The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-05

with building operations, for those with
money to invest do not believe they can
get a greater return at present from an
apartment house. even though it be ex-
empted from taxation under the new rent
laws than they can from bonds or high
grade stocks at their present prices.
A remedy which builders and loaning
interests, such as insurance companies,
suggest as a means of increasing build
ing is the passage of State and Federal
bills exempting mortgages from State
and Federal income taxes. This, they
say, will attract more money to the field
from the Golfers of big investors. A COM
plant of builders Is that the lending
companies will not advance so per cent.
of the actual cost of constructing a
building at present labor and material
prices. Other builders chiefly attack the
rent laws for the cessation OF apartment
house building.
Blames All on Rent Laws
Joseph Palermo, member of the board
of governors OF Real Estate Investors of
New York, Inc, recently declared that
the rent laws killed the building of
apartment houses in New York city, and
asserted that since the building of
houses is the only solution of the hous-
ing problem the laws have retarded the
much needed relief
IF l could afford TO do so would
stop the construction of the buildings I
now have under construction and fence
them in until these drastic laws are re-
moved from the books" ne said. IF
these laws should remain In operation
l am of the opinion that It would be
unwise not only to consider building
more apartment houses but even to
finish those l had begun. / had planned
the erection of several more apartment
houses during the coming year and have
filed plans for their construction, but
under the existing conditions 1t would
be suicidal for any builder to proceed.
THE real object of a builder is to
construct houses for sale. Who under
the present conditions would be foolish
enough to invest funds in a building
where innumerable disputes and compli-
cations existed due to recent laws? Any
sensible investor would realize, even II
the new laws did not affect his particular
building, that the general market had
been seriously damaged. Furthermore.
he would not know at what time the
| Legislature would enact laws taking his
| own building away from him. And who
! is going to buy a house for renting pur-
poses when the Legislature decides that
contracts between owners and occupants
are mere scraps of paper" not worth
the paper they are written on?
"a builder in these days has sufficient
| obstacles to overcome with the high cost
of labor and materials and the uncer-
| tainty OF labor conditions. If construc-
| tive work Is to be done no other OBJ
stacles should be placed in the builders
! path. II there must be legislation 1t
must be constructive. Mere exemption
of new buildings from taxation for two
years, with the rent laws still unchanged
and operating to decrease property
values and property incomes. will not
serve the purpose.
Remember that the mere labor costs
of constructing apartment houses to-day
are 80 per cent higher than the costs
! of similar buildings n few years ago
The costs of building materials have in
creased almost unbelievably, and there
is no indication OF any marked decrease
in the near future No one with human
intelligence will go into a bsilding propo-
sition at such a financial hazard while
he is deprived of the right Of controlling
his own property when he has put his
money into it.
1.-THE situation will, of course, be re-
lieved If the existing rent laws are de-
| clared unconstitutional. But II they are
held constitutional the only relief can
come through legislative action. To
encourage the construction of more
| apartment houses the Legislature would
| have to do these things:
| Il. Repeal or amend the present laws
constructively.
"2. Give definite assurance to inves-
tors that no further laws will be enact
| ed against real estate which will permit
squatters to hold property against the
Will of it's owner. In other words. the
right of ownership of real property
must be restored.
Pass laws compelling savings banks
and other loaning institutions to invest
fair proportion OF their reserves in
real estate mortgages. Mortgages
| should be exempt from income tax.
| "a. Enact laws forcing loaning insti-
buttons to make loans based on new
| building costs. At the present time
building loans are based absolutely on
the old building cost schedule"
Denounced by state boards.
The rent laws also we're the target of
rather violent condemnation by the New
York State Association of Real Estate
Boards at their annual convention at
Rochester in October.
I'VE denounce the so-called rent laws
as attacks upon and as tending danger
ously toward the complete suhversion of
| the rights of individual ownership and
control OF property, freedom OF contract
and of the right of the individual owner
to due and proper process and the pro-
lection of the courts in the interpreta-
ton and enforcement of contracts and
contract rights based upon such indl-
vidual ownership" resolutions adopted
stated.
I'VE view with profound alarm the
entire body OF such restrictive legislation
as an insidious and dangerous attack up
on baAc principles of our Government.
upon which 1t has justly and rightly
risen to its proud eminence among the
nations and upon which there have hith-
erto been guaranteed and assured to the
individual the right to llfe liberty. the
pursuit OF happiness and protection In
the right and proper use OF his savings
from the fr'ilts Of his industry. The
said restrictive legislation cannot fail
to operate in the interests OF the So
called profiteers and against tho inter-
ests OF tenants and reputable owners
alike TO the impairment of true property
values and In depreciation of the States
greatest body Of taxnbies, 20 the CON
tlnucd increase In renta. and so inevita-
bly, 10 the further increase In the costs
OF ali the necessities OF life."
This IL tho view of a large PROMOTION
OF the real estate owners and builders.
Legislators and other spokesmen of ten
ants say that although repeal OF the rent
laws. exemption OF mortgages from the
income tax, the passage OF other laws
compelling savings banks to invest In