New-York tribune., 1922-12-10
Rentals VIII Stay
Hitched to High
RungforSOmeT Time
Building Costs and Labors
Refusal 10 Lower Wages
Are Factors That Will
Prevent Drop in Values
BY W. J. Moore
PRECEDENT. A mcricau Bond and Mort
gGgc CompnHB

PRECEDENT. American Bond and Mort
gogo CompdrB
slateriais, labor and money eondi-
tions determine cost o. new eer-
str. ion and therefore rents. Tho
trsu. these conditions shows forces
which must tend 90 check construction
and therefore 20 maintain rentals.
That rent. or tho price Of housing,
whether residential, Industrial or conf
moreiai. followr tho law. ~ supply and
demand is clear % an and tho e. e-
tationa % lower rents held bv nc
pcoplc arc logically based on thc be-
lief that there is enough volume or
construction now In progress and in
elght 20 cause an otoTbuilt market
and the lowering Of rents through COM
petition.
Construction Statistics Deceive
But fgures showing the value Of now
construction arc deceptive because the
fact is frequently lost sight Of that
these values arc Cor work being done
no about 40 per cent hirl rr.co
levels than before the war. Not values
OF construction but the amount of
space provided shouid be compared, and
when such comparisons are made lt
will be found new construction can
not make Up Tor the Undertaking. Of
six years.
II is time .aat there is now real
activity IN construction. and build ling
permits and other construction records
showed marked Increases this year as
compared with las. But in order to
provide anywhere uclr adequacy con-
struction activity should have been
| Three times greater than last year. As
lattcr OF fact, housing accommoda-
l tions are 20 far from on oyerbuil'
condition that "a survey OF the fi.y
I leading cities % thc countrv shows
them one 90 four ycarl behind in
buildinp.
Another illusion which raises false
hopes is ucighborhood building ln
some sections o. some cities rentals
arc reported az decreasing q few dol
/ lars. But this is due % strictly neigh
born0od conditions, where new areas
arc being developed. sometimes too
rapidly. With the result that there is
competition for tenants az rental times.
but these local conditions are not in-
dicntive ~ any hrold basic.
Labor Stands Firm
Building materials show heavy dee
mands and sustained prices. Labor
conditions ere against low prices, f0f
IN many industries warca are going up.
There is a decided labor shortage BOZ
some lines, even with wage incr'ases
OF o 20 20 pcr cont which have been
granted in recent months, as N the
brick industry. RGilroad conditions
have been decidedly against lower ma-
terial prices-car shortage. freight
embargoes and delays holding up pro-
duetion. Railroad freight rates, which
are a substantial factor in material
prices, may perhaps be forced somer
what lower, but the whole railroad site
uation probably viii be seriously un.
settled in the next few ycars.
Labor In the building trades shows
no signs % accepting lower wegc con-
ditions. ald iH fact, rcccat develop
menis indicate just the oppcsitc ten4-
cHcy. 10 m~y be expected that The tc.
maul for construction and ,hc demands
Of tho workers 20 maintain wages VIII
rcsul. lu tension. There is already o.
Increasing scarcity Of labor. even al
tho present rate of construction. and
In some cities builders report the high
cst wage rates on record. Y is doubt