The Birmingham age-herald., 1920-03-07
For the Good of
 the Community

N ARlOUS reasons for not putting up new
 buildings to relieve the house shortage that has existed for two or three years past are gwen by property owners and investors, but the one most frequently heard is that present prices Of labor and materials make such investments unprofitable Walter Stabler, controller of the Metropolitan Life Insurance Company, gives different reason, however.
 MT. Stabler, in an article published i'll the Real Estate Magazine of New York states that the in- come taxes under existing laws take such large proportion Of the earnings of mortgage loans that capital is seeking other forms of invest ment, mostly of the non-taxabe varieties.
 Between the explanations given by the land owners and the lenders represented by Mr. Stab Ter, 1t would appear that there is small prospect of the house shortage being relieved for a long time.
 'The most serious shortage in the entire sit uation, says Mr. Staber, Ifs the shortage of money for mortgage loans to finance building operations. There is plenty of money in the country, but it has been taxed out of the mort gage market into other channels, where the chances profit are greater or the income taxes less, or where securities are tax exempt. Money for mortgages has heretofore come very largely from individuals and estates; very many of whom preferred this very safe form of invest ment to other securities of fluctuating values. doubt ii this practice will be continued so long as income taxes on large incomes remain as high as now When gross interest rate of per cent is reduced by income taxes to a net of 2 or per cent, the non-taxable municipal or state or county or school or even road bonds, paying 4 1-2 to per cent net, naturally are preferred This has resulted in the entire removal from the real estate mortgage market of untold millions of money, and this process will continue unless the income tax laws are so modified that investors will feel justified in again putting their funds into mortgages. They surely cannot be expect ' ed to leave their money in highly taxed mort gages or make new investments of this kind when there are many other perfectly safe secur- ties which will pay twice as much because of tax exemptions.
 Life insurance companies Mr. Stabler says are Iend- ing to the limit of their ability but that their loans must be divided between city and farm loans and besides that farm loans do not increase housing to any extent
 From these premises he that is imperative that the funds of individual investors and estates be - duced to return to the mortgage market there is to be marked improvement in building operations
 Commissions and committees may meet and re- solve and report and suggest but this does not produce housing,' Mr. Saber continues. We have four years or nearly total cessation of building make up and we cannot make up and never catch Tp unless we go at 1t with unusual vigor But we cannot 20 at it ln- less we have the usual funds for mortgages and these funds cannot be had unless there is relief from income tax requirements on mortgage interest until the short age is greatly relieved"
 Whatever 1t is that is retardng hldino onora+ionc and no one will say they not being retarded the cause should be removed if possible There is said to he scarcity of materials which makes for higher prices: anor wages are on higher level than ever before and tnls too makes Tor higher prices of materials we'll as increases the cost of construction work It case Of take your choice but that is small consolation h th