Evening star., 1932-02-06
SLUM CLEARANCE
PLAN IS OFFERED
Architect Proposes New Form
of Managerial and Finance
Corporation.

A new form Of managerial and
financial corporation, designated as a
real estate equity trust, is proposed as
q solution Of the slum clearance prob
lem by Arthur c. Holden, New York
architect, in an article In the Archi-
teCtural Record
Taking the Lower East Side of New
York as the best known example of a
bllghted district. Mr.. Holden says: The
necessity of improvement is recognized
Rents have declined. The property as
a whole is unable to pay its own way.
Many owners have been obliged to pay
out money annually in order to keep
their equities or have let their prop
erty revert TO the owners of the mort
gage rather than carry it at a loss"
Collective System Urged.
Declaring that no practical way had
been found by individual owners to re-
habilitate these deprecated properties,
and that the city is too encumbered
to undertake the financial responsible
ity of rehabilitation. the architect states
that it would serve all the public and
private interests concerned in these
properties for the city to grant to all
owners within a given district the right
TO act together for their collective bene-
fit and the benefit Of the city
1t would neCeSSitate creation of a
district authority to act in the capacity
of trustee for the interest of all own
ers. This agency might take the form
OF a real estate trust which would pro-
vide a pool into which each owner
could put his individual interest in his
property so far as ownership was con-
Cerned He would then be a partici-
patlng owner in the trust and would
obtain in exchange for his isolated lot
q prOpOrtionate share in the collective
ownership enjoyed by the trust Every
iWner. moreover, would retain the right
to enjoy the fruits of ownership to an
amount equivalent to the benefits which
he was actually enjoying at the time
OF the pooling Of interests.
Entirely New Method.
Scientific valuation on the basis Of
earning power of the properties" Mr..
Holden continues, "opens up an en-
tiTely new method for the adminiStra-
ton Of real estate Economies of ad-
miniStration and physical upkeep may
at once be introduced. The equity
trust becomes responsible to its par
tlCipant owners for increasing income
and leSsening outgo. 1t is concerned
with the net income Of the whole dis
trict. 1t is free to concentrate on those
parcels that can Immediately be made
TO produce greater profits.
The objection on the part Of mort
gage owners to the demolition of unfit
buildings is removed because the con-
Solidated mortgage can be guaranteed
by the whole district both as to prin
Cipal and interest This guarantee
should lead to the reduction of the
interest rate and make possible the
wip.ng out Of discounts previously i'm
posed because of the indefinite risks
encountered through the chaotic and
competitive individual operation usual
in deprecated neighbOrhooGs.
IN line with the idea that the
function Of the equity trust is land
utilization, not land purchase. it is
conceived that under equity trust ad-
ministration a district may study its
own needs and plan for its own fu-
ture. Subsidiary corporations may be
formed to build and develop certain
of the Improvements needed"