Evening star., 1932-12-02


bers of the Washington Real Estate
Board were both made and denied by
witnesses appearing before the special
Rent Investigating Committee of the
Senate when 1t resumed hearings today
Reviewing briefly testimony given by
several apartment tenants, and refer
ring to letter written by an employc
of the B. F. Saul Co., placed in evi-
dence yesterday, Senator Capper oi
Kansas, chairman of the Investigating
Committee, declared 1t appeared there
was an agreement among realtors not
to rent to tenants who broke former
leases unless they obtained a release
from them.
Charles j. Rush, executive secretary
OF the realty board, when called to tbs
stand this morning, made vigorous de-
NAL that there was any attempt made
to blacklist" but said that as a mat
ter of business practice members OF
the board ascertained the standing O.
prospective tenants as to former leases
Denied by Board.
The realty board, In a prepared state
ment filed with the Senate Committee,
also denied charges that exorbitant
rents, based on inflated values, had
been maintained by the realty firms.
The formal answer of the board ac-
companied the results of a. survey made
for the realtors by Rufus S. Lusk, which
was compiled independently of the data
gathered by the Senate subcommittee
A vigorous demand for reduction of
taxation was contained in the realtors
statement, which contended that taxes
are destroying property values and
breaking the back Of the rent payer" A"
Findings Summarized.
Outstanding findings of the Real
Estate Board survey, on data gathered
from Al firms here engaged in rental
management, included the following
points:
That apartment rents were reduced
As per cent in the past four years
ending with last January; that there
has been Sc per cent further reduc-
ton since January of this year, max
ing total reduction of 10.1 per cent
in the past five years; that the present
abnormal per cent of vacancies in
Washington apartments is caused by
the doubling up" Of families rather
than "exorbitant" rentals; that owners
low rate of return on their investment,
as figured on the basis of assessed
values; and that this year 1873 per cent
Of the maintenance cost Of apartment
houses is going for taxes.
272 Buildings Studied.
The findings of the Real Estate
Board we're based on an analysis Of
data on 272 buildings containing 10,-
008 residential units. In addition,
other data on 180 buildings containing
4,336 units now are being prepared and
will be submitted later.
The data already submitted, the COM
mittee was told, cover about IS per
cent of all apartment units in the city
and, in the opinion of the realty board
picture" The buildings were chosen at
random and there has been no at
Tempt to pick the buildings about which
we wanted information, the report de-
clared.
Rents are not exorbitant," the real
tors asserted. unless it be contended
that landlord who receives enough
rent from his building to net him, even
when figured literally, only As per cent
on the assessed value. is charging ex-
rates"
"Best Authority" Cited.
In computing the rate of return re-
ceived on the average by the owners OF
apartment houses, the assessed valua-
tions, rather than the actual capital in
vestment, was used, the committee was
informed. This was done because the
District assessor is the best authority"
In Washington, the report declared.
Had the actual capitalization Of
properties been employed,
the profit Of the apartment owners
would have been found to be much less
than the average Of As per cent, it was
argued.
The committee was informed that of
the buildings included in the survey
having total assessed value Of $685.
l53, 900 on which 1t was possible to OBJ
tain comparative data for 1881 and
1882 as to maintenance costs, together
with actual rent collections.
"These buildings at the end of 1881"
the report stated, had a gross rental
schedule of s6,247,000, but the actual
collections during that year were S.
471 900. The operating cost of these
buildings during 1881 was $3,638, 900.
That leaves a net return of $1,832, 900,
which is 4.8 per cent on the assessed
valuation.
Net Return Of As Per Cent.
"These same buildings, If we figure
the first eight months return on
yearly basis, will have during 1882 a
gross income of $5,208, 900. The ex-
penses of operating these buildings dur
ing this year will be $3,477,000. That
gives a net return of As per cent for
1882.
The meager net income of As per
cent made by apartments during the
first eight months of 1882 is based upon
the ideal situation-which, incidentally,
seldom exists-of an apartment that has
40 mortgage"
The statement then presented a
to show that building
assessed at 100000 and earning the
average OF As per cent return on that
basis, would give the owner an actual
return of only ~ per cent, if it had
interest.
This return of 81 per cent, the state
ment pointed out, would be less than
savings bank interest which the apart
ment owner could receive for his
investment.
THE detailed earnings for 229 build
ngs, for which we have maintenance
figures for 1882, show that l8 buildings
operated at loss" the statement
added. Eleven earned less than l per
cent, II between l and per cent,
Is between 2 and per cent, "a be-
.ween 3 and 4 per cent, 43 between 4
and 5 per cent, 80 between 5 and 6
Der cent, % between 6 and per cent,
I9 between and 8 per cent and 19
more than 8 per cent.
Bulk Earn Low Interest.
More than "a per cent Of the build
ngs earned less than per cent in
terest on the assessed value; more
than 80 per cent earned less than 3
per cent"
Sixty-six and f1ve-tenths per cent Of
The total rents collected in 1881 went
for operating cost, the Senators were
;old. Though operating costs were re-
duced in 1882. rents were cut so much
the operating cost was 66.7 per cent of
the total collections, the board con-
tended
Another sactio,, of tho raaIfnr S1lrvev