The Wilmington morning star., 1942-08-20
RENT HIKE issue
CLARIFIED HERE
Area Office Releases State.
ment Dealing With Capt.
tai Investment Factors

Factors constituting major
capital Improvement" one ground
on which landlords may petition
for increases In rents, were c1ari.
1led further in a statement issued
today by George W. Jeffrey, Area
Rent director.
Maximum rent regulations when
issued for a defense-rental area
cut rents back to what they were
on the maximum rent date with
certain exceptions, one of which
is when a landlord has made a
substantial change in the housing
accommodations by major capi.
tai Improvement since the i
mum rent date. When the i'm
provement has been made before
the regulation goes into effect in
an area, the maximum rent is the
first rent after the Improvement
is subject to review by the Area
Rent director. When the improve
ment is made after the regulation
goes into effect, the landlord is
not entitled to an automatic in
crease in the rent; however, he
may petition the Area Rent direc-
tor for an upward adjustment OF
the maximum rent.
The statement issued today
places "major capital improve
ment" in one of three. categories:
first, a structural addition; Sec
ond, a structural betterment; and
third, a complete rehabilitation.
and defines and illustrates all
three.
Another point made in the state
ment is that "even though a major
capital improvement is made, it
does not necessarily follow that
an adjustment in the maximum
rent is justified" The improve
ment must result in a material
Increase, in the rental value of the
accommodations.
The complete statement follows:
The general standard is that the
major capital Improvement has re-
suited in a substantial change in
the housing accommodation such
as would materially increase the
rental value in normal market
where free bargaining prevailed
unaffected by shortage in hous-
ing accommodations. 1t must be
different from ordinary repair, re-
placement and maintenance.
Structural Addition
A structural addition is clear
addition to the housing accommo-
dations, such as the construction
of an additional room or new
porch or the installation of plumb
ing, heating or electricity where
Fsuch facilities did not previously
exist. The addition need not neces.
sarily be a part of the structure,
but might include a new garage
or the installation of sidewalks.
If the improvement has resulted
in some added feature which did
not exist prior to the change of a
kind which would normally result
in an increase in the rental value,
then it would be substantial
change by a major capital i'm
provement.
Structural Betterment
A structural betterment is a quail
itative improvement, even though
such an improvement is in part a
replacement. Within this group
would be the modernization of an
existing bathroom, the installation
of modern heating plant replac-
ing an antiquated system, a change
in the interior partitions such as
would improve the layout, and all
changes of similar character.
Complete Rehabilitation
A complete rehabilitation is a
general modernization and recon
struction such as would make the
property attractive in a different
rental range. Even though the in
dividual items involved would, if
considered separately, be normal
repair, replacement and mainten-
ance, if, in the aggregate, there
is a substantial change in the char
acter of the housing accommoda-
tions, there would be grounds for
adjustment. The difference between
a rehabilitation which is maj
capital Improvement and ordinary
repairs is primarily a question of
degree and extent. Only where the
rehabilitation is so comprehensive
that it could b. expected to re-
suit in a comparatively high per-
centage adjustment in rental would
it constitute a major capital i'm
provement.
Even though a major capital
Improvement is made, it does not
necessarily follow that an adjust
ment in the maximum rent is JUS
tilted. Unless the improvement has
resulted in an increase in the rent
al value of the housing accommo
cations, no adjustments should be
granted. An example would be the
installation of an automatic stoker
IN an apartment building where
the landlord is obligated to furnish
heat and hot water. Such an i'm
provement does not give the ten
ants anything they did not pre-.
vlously receive and is made by the
landlord solely for his own bene-
fit. No increase in rental value
would result, and no adjustment
would De warranted.
1t is important to note that where
the landlord is now obligated to
make and is making normal re-
pairs, replacement and mainten.