5 02 NATIONAL MUNICIPAL REVIEW [October

determined and promises t o be a n a matter of such profound importance

additional factor of confusion in prac-
tical rate making.
I n a very important rate proceeding
involving one of the largest companies
in the country, the question has come
up to what exiient the rates in each
community should be separately de-
termined where the company serves a
number of cities in the same state.
The astounding proposition has appar-
ently been laid down by the commis-
sion in the case t h a t no valuation or
determination of investment for the
individual cities is needed, on the
assumption that the company is en-
titled t o a return on its entire property
throughout the state without regard
t o segregation between the different
municipalities. This view, of course,
is not established law, and its discus-
sion does not come within the scope of
this article: its significance here is
that after twenty years of regulation
should not have been decided and
should now become the subject of
extended litigation.
Many other points which should
have been decided definitely long ago
are still shrouded in uncertainty;
enough have been enumerated t o show
why regulation has not succeeded.
Manifestly, before the commissions
can perform their task of rate making
in a practical way, the must formulate
clear-cut principles, adopt definite
rules and methods and establish a n
automatic machinery by which costs
and returns are shown. They must
get rid of present chaos; they must not
be compelled t o reconsider the same
questions and issues ad infiniturn; they
must make actual decisions, establish
certainty as t o facts and methods,-
cut through the circle of forever going
over the same ground and never
getting anywhere.

ONE HUNDRED MILLION DOLLARS IN NEW

HOUSING UNDER TAX EXEMPTION
BY HENRY H. CURRAN
President, Borough of Manhattan

The Fusion Candidate for Mayor of N e w York describes what i s being

done in that city to provide homes for the people under the law
granting tax exemption for new houses.
AT this writing it is just a little over
four months since the board of esti-
mate concurred in the board of alder-
men’s action approving atax exemption
ordinance for the City of New York.
Since that day, results of the ordi-
nance have practically silenced its op-
ponents; even the loudest of them. I n
those four months, plans for 20,897
homes have been filed in the five
boroughs of the greater city. This is
a n increase in building over the same
:: ..
.. .. ..
period last year of more than 215 per
cent.
As we know, it was the exigencies of
the war that started the housing short-
age. Bending all its energies toward
the task of beating the enemy, our na-
tional government decreed that labor
and materials should be mobilized in
war work, while building was practi-
cally suspended. And we have never
yet caught up. Each month for the
past two years, a t least up t o the be-
19211 HOUSING UNDER T A X EXEMPTION 503
ginning of this spring, has seen the concerned, the New York legislature
number of available homes becoming enacted laws designed t o relieve condi-
smaller, while the number of families, tions here in the city for the time being.
without adequate living quarters, has These laws were somewhat drastic in
grown steadily greater. character. They had t o be, t o be effec-
This housing shortage, which tax tive. And they brought their measure
exemption is helping t o relieve here, of help in a desperate situation.
was perhaps more serious in New York
City, due t o the tremendous popula-
PERMANENT RELIEF NECESSARY
tion and congestion thereof, than any-
where else in the country. It was and When it came t o permanent relief,
still is, in my opinion, the most serious however, those at Albany felt that they
problem facing the municipal authori- must encourage builders in some way,
ties. And its results have been most and, so, in the special session of Septem-
demoralizing t o good citizenship. ber, 1920, the legislature passed the
I n the first place, rents have sky- tax exemption law allowing municipali-
rocketed beyond the ken of the man of ties to exempt, for ten years, from local
moderate means. Some unscrupulous taxation, all new buildings erected for
landlords have gone to the most out- dwelling purposes. To the governing
rageous length in their efforts t o secure bodies of each city was left the option
all that the traffic would bear. Feople of taking advantage of this law, or not,
are trying t o make the most of all sorts as they deemed best.
of makeshifts in order t o have a place I felt then, as I feel now, that the
t o live. Apartments built for one only way t o solve our housing problem
family have been divided and sub- was t o build homes enough t o go around.
divided again until men, women and I also felt, that, t o get builders t o in-
children are crowded into cramped vest their money during the period of
quarters t h a t are unsanitary and inde- reconstruction, following the war, there
cent. Patients suffering from such in- must be some definite incentive in the
fectious diseases a s tuberculosis and way of financial aid. Otherwise, a
typhoid fever have been and are even man who started, say in the spring of
now forced t o take their chances of 1921, t o erect a n apartment house
recovery jammed and huddled in the might find himself in competition with
same rooms with their well fathers and a man who waited a year or so and
mothers, brothers and sisters. built one a t two-thirds the cost. It
Efforts t o relieve these conditions seemed most likely that builders would
began about eighteen months ago. simply wait for “better times”; and,
Plans were considered from two in the meanwhile, our people had t o
separate and distinct angles: First, have houses, and have them right away.
there were the immediate needs of the Therefore, as soon as the tax exemp-
case, touching primarily the relations tion measure became a law, I asked the
between landlord and tenant, the size Board of Estimate t o instruct the
of rentals, regulations of dispossess corporation counsel t o prepare a n
proceedings, etc. Second, there was ordinance putting the law into effect
the question of permanent relief, which here. This communication of mine
could only come about in one way; was killed by the Board with very little
that is, in the construction of more ceremony.
homes. Shortly afterwards, Alderman Col-
So far as the immediate needs were lins, the majority leader of the board
504 NATIONAL MUNICIPAL REVIEW [October
of aldermen, introduced the Hylan 1, 1920, or if not so completed, whose
ordinance, which purported t o give the construction was commenced before
city full advantage under the state law. April 1, 1922. Such exemption was
Before granting t o any home builder granted t o the extent only of $1,000
tax exemptiqn relief, however, this for each living room, including kitch-
ordinance provided that : ens, but the total exemption shall not
exceed $5,000 for each single family
. . . the Board of Estimate and Appor-
house, or for each separate family
tionment shall first inquire into, hear and deter-
mine any application for such exemption, when apartment.
the Tenement House Commissioner shall have After the ordinance was passed, some
certified to said Board in writing that in his judg- of its opponents declared that, inas-
ment the granting of such exemption in any such much as the state law had not set any
case will provide relief in an emergency existing limitation on the cost of the building
in the City of New York, due to lack of housing; t o be exempted, the city ordinance, in
and provided further that said Board of Esti- limiting that amount a t $5,000, rend-
mate and Apportionment shall, thereupon, by ;red the ordinance unconstitutional.
unanimous vote, approve of applying such However, in its session last winter, the
relief. . . .
legislature settled this question by an
amendment t o the original bill permit-
T H E ORDINANCE PASSES
ting municipalities to make what limi-
tations they chose, and legalizing those
I felt that the housing crisis in our already made, so that there is now no
city was so acute that no unnecessary question as t o the constitutionality of
obstacles should be placed in the way the act.
of builders, who desired t o build homes While the ordinance did not become
for the people. And I was sure t h a t effective until February 25, 1921, yet
the Board of Estimate, as constituted, all dwellings finished since April 1,
could never reach a unanimous decision 1920, will receive the benefits provided
on anything. Therefore, I also intro- for in the law. The fact that dwellings
duced into the Board of Aldermen an completed since April 1 were included
ordinance which followed closely the in the assessed valuation for 1921,
language of the statute. which valuations have already been
The Committee on General Welfare confirmed and fixed, will not prevent
combined both our measures and re- the relief being given for 1922 and sub-
ported out the combination which was sequent years.
defeated by the Board of Aldermen.
Changing my ordinance then, in cer-
tain respects, I again introduced it with BUILDING PERMITS INCREASE 216 PER
CENT
the co-operation of Alderman Collins,
and it was passed on February 15, The following table gives the num-
1921. The board of estimate on Feb- ber of building applications filed during
ruary 25 set the final seal of approval the four months from February 26 t o
on tax exemption for this city. .July 9, inclusive, for the past two years.
T h e ordinance, as enacted, provides It shows that since the enactment of
for the exemption from local taxation the exemption ordinance plans for an
until January 1, 1932, all new buildings average of more than 1,000 homes a
planned for dwelling purposes whose week in the greater city have been
construction was completed since April filed :
 19211 HOUSING U N D E R T A X EXEMPTION 505
NUMBER OF FAMILIES :PROVIDED FOR

1 1
2
Feb. 26-Mar. 5 . . . . . . . . . . . . .
DWELLINGS

1920

291
1921
--
317
TENEMENTS

1920

86
~
1921

111
_
1920

377
DWELLINGS
_
AND TENEMENTS

1921

428
I
Incr.

51
Per cent

13
Mar. 7-12 . . . . . . . . . . . . . . . . . 277 391 12 257 289 648 359 124
14-19 . . . . . . . . . . . . . . . . . 442 433 0 567 442 1000 558 126
21-26 . . . . . . . . . . . . . . . . 401 475 92 90 498 565 72 14
Mar. 28-Apr. 2 . . . . . . . . . . . . . 428 478 0 465 428 943 515 120
Apr. 4-9 . . . . . . . . . . . . . . . . . . 527 608 139 317 666 925 259 39
11-16 . . . . . . . . . . . . . . . . . 410 696 120 266 530 962 432 81
18-23 . . . . . . . . . . . . . . . . .
2S30.. ............
May L- *I . . . . . . . . . . . . . . . . .
‘1
...I 420
256
326
615
G52
729
44
79
94
660
513
696
464
335
420
1275
1165
1425
811
830
1005
174
248
239
9-14 . . . . . . . . . . . . . . . . 213 607 32 479 245 1086 84 1 343
16-21 . . . . . . . . . . . . . . . . . 234 728 5s 754 292 1482 1190 407
23-28 . . . . . . . . . . . . . . . . . 830 0 545 190 1375 1185 624
May 31-June 4 . . . . . . . . . . . . . 145 617 51 475 196 1092 896 459
June 6-11 . . . . . . . . . . . . . . . . . 240 924 31 GO4 271 1528 1257 656
13-18 . . . . . . . . . . . . . . . . . 231 840 163 612 394 1452 1058 268
20-25 . . . . . . . . . . . . . . . . . 122 731 0 522 122 1253 1131 927
June 27-July 2 . . . . . . . . . . . . . 175 701 22 400 197 1104 907 460
Julv 4-9 _-. ............ . . I
Total. . . . . . . . . . . . . . . . . . . . 1
114
5442
-527
11902
139
1162
662
__-__
8995
253
6604
1169
20897 I
936
14293
- 370

Average percentage of increase

I 216

BUILDING O F SMALL HOUSES STLMU-

that in practically all building plans
filed this spring, the cost per home has
LATED
averaged under $5,000.
A feature of these building applica- I believe t h a t the tax exemption
tions that have been filed, which is ordinance is accomplishing all its
very encouraging t o me, is the great friends said it would. It is bringing
number of little one- and two-family homes t o thousands who would other-
houses that are being provided under wise be homeless. However, if the law
the impetus of tax exemption. Plans is t o achieve the fullest measure of
for nearly 12,000 of these old-fashioned, success, help must come from those
so far as New York City is concerned, able t o help. I a m speaking now of the
little, honest-to-goodness homes, have man or woman who can afford t o lend
been filed thus far in 1921, as against money on first or second mortgages.
5,442 in 1920. They are literally There is no greater public service t o be
springing up in the outlying sections of rendered to-day than co-operating with
the city, and what this means to our the man who is trying t o find a home.
people, only the man can tell who has It is a responsibility that no citizen can
moved from his cliff-dweller-like abode afford t o evade. Tax exemption makes
in an apartment house t o one of these the investment doubly secure, and the
real homes where the family comes investor has added returns of inestima-
downstairs t o breakfast and goes up- ble value in the better citizenship that
stairs t o bed. decent housing facilities for everybody
At the same time, under tax exemp- will insure.
tion, apartment house building has T o the builder, the tax exemption
taken on a healthy new lease of life. ordinance has meant t h a t much, if not
Plans for 447 of these, t o house 8,995 all, of the increased cost of building
families, have been filed. This is an over normal conditions is written off.
increase of 674 per cent over the preced- Careful estimates place the saving a t
ing year. It is, perhaps, significant 35 per cent of the cost of construction.