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either the total land value or the value of highest priced land, offer
considerable variation. It is believed that the range of values in
Fig. 2 will cover the conditions in all except a very small percentage
of cities."

In an attempt to formulate the relation between the population
and land values in cities, the speaker some years ago addressed letters
to real estate dealers in the 109 cities of the United States having
a population of 50 000 or more, asking the value per front foot of

• Newark, N. J.



Rankin



DISCUSSION ON VALUATION OF LAND



627



the highest priced land in their respective cities, based on a standard
lot 25 by 100 ft., exclusive of corners. Replies were received from 47
cities, the smallest being Canton, Ohio, with 50 200, and the largest,
St. Louis, with 687 000 population (census of 1910).

The results obtained, though of a negative character, may prove
of some interest in connection with this paper. They have been plotted
on a diagram. Fig. 5, similar to Fig. 2, and seem to show the hopeless-
ness of attempting to base valuations on population, except in the
most general way. It would appear, however, that the curves in Fig. 5
are entirely too low.



Mr.
Rankin.



1 * — K^C

• • y'^

i ■ — . jT , ^

. .: \y . ^,.^i:_Z

«» )>[ ^^>^^ »



Population '*

Fig. 5.

Reduced to dollars per front foot per 1 000 population, the varia-
tions are perhaps even more apparent. Some of the main features
of the investigation, reduced to this basis, are shown in Tables 7 and 8.

Believing that the rate of growth of the city would have a decided
bearing on the valuations — on the principle that values would discount
the future — the speaker then made an estimate of the probable popu-



628



DISCUSSION ON VALUATION OF LAND



Mr.

Rankin.



lation of each of the cities in 1920, and calculated the value per front
foot per 1 000 of this estimated population. The results are given in
Table 8, and show slightly less variation, but are still too far apart to
be of any practical value.

TABLE 7. ^ '^^1



Maximum.



All cities $54.00

(Springfield. J/Iass.)
Population 50 000 to 100 000 54.00

(Springfield, Mass.)
Population 100 000 to 200 000. .. . 35.52

(Grand Rapids, Mich. )
Population 200 000 to 400 000. . . . 40.28

Population more than 400 000. . 29.48
(St. Louis, Mo.)



Minimum.



(Baltimore, Md.) $7.16

(Somerville, Mass.) 9.71

(Nashville, Tenn.) 15.60

(Jersey Oity, N.J.) 8.06

(Baltimore, Md ) 7.16



Average.



$27.^6
47 cities.

$30.85
24 cities.

$26.64
10 cities.

$23.12

8 cities.

$23.59

5 cities.



TABLE 8.





Minimum.






Maximum.


Average.








All cities

(Springfield, Mass.)
Population 50 000 to 100 000. . . .

(Springfield, Mass.)
Population 100 000 to 200 000. . .

(Albany, N. Y.)
Population 200 000 to 400 000. . .

(Newark, N. J.)
Population more than 400 OOO..

(St. Louis, Mo.)


. $38.40
. 38.40
. 31.13
. 28.86
. 25.00


(Jersey City, N. J.)

(Somerville, Mass.)

(Birmingham. Ala )


... 86.29
7.65
9.00


$20.33
47 cities.

$21.33
24 cities.

$20.29


(Jersey City, N.J.)


... 6.29


10 cities.

$18.77
8 cities.
$18.10




5 cities.



Classified as to location, into East, West, and South, the 17 eastern
cities show the highest average, $21.75, and the greatest variation,
$6.29 to $38.40; 20 western cities average $21.45, with the least vari-
ation, $11.84 to $37.62; and the 10 southern cities vary from $6.78
to $23.69, with the lowest average of $15.71.

All the populations used in Table 7 were taken from the U. S.
Census for 1910, and do not include suburbs tributary to the cities,
although the speaker fully agrees with Mr. Jerrard that such suburban
areas should be included. At the time the investigation was made,
however, it was impossible to obtain these figures.

The speaker would suggest further, that an important factor in
the value of land is the volume of traffic passing the point in question.
A careful investigation along this line might prove of considerable
interest.

Mr. T. Kennard Thomson,* M. Am. Soc. C. E. — Two interesting examples

Thomson. ^^ ^-^^ valuation of land in New York City, might be cited: First, the

corner of Wall and Nassau Streets ; a lot, about 25 by 75 ft., was bought

* New York City.



DISCUSSION ON VALUATION OF LAND 629

in 1896 for $500,000, and, after the old building had been torn down, a Mr.
17-story building was erected on the site at a cost of $1 000 000, making omson.
the cost of the new building and lot $1 500 000. The Bankers Trust
Company, 14 years later, wanted the corner to complete its property
in order to have about 90 ft. front on each street, so the 17-story build-
ing and lot was bought for $1 500 000 and then $50 000 was paid to a
wrecker to remove the building quickly.

The second case is that of a young man who had an assured income
of $25 000 a year ; he painted a little, wrote a little, and tried to make
himself generally useful, and at the same time was able to live com-
fortably on his income. An uncle bequeathed him a $1 000 000 piece
of property on West Street. Just then, unfortunately, the tenant
moved out, and a new one could not be found, and as the property
was subject to a mortgage which required nearly all the young man's
$25 000 income to pay, he was absolutely impoverished by the bequest
of a $1 000 000 piece of real estate, which he could neither rent
nor sell.

One of the great stumbling blocks in modern real estate is the old
25-ft. front lot, which was all right in the days of one- or two-story
cottages and stores, but is absolutely out of place in a modern city, and
is responsible for much of our "crazy quilt work". It is to be hoped
that future cities will be laid out on up-to-date lines, giving a whole
block for each building, then the question of the relative values of the
inside and outside of the block will disappear.

An interesting case occurred some years ago, when the caisson
foundations of a new building encroached on the adjoining property
at depths of from 30 to 90 ft. below the surface.

Mr. Jerrard's admirable paper has one defect which should be
remedied before the final publication, thereby obliterating this comment
thereon. It is the impression received by the reader that the engineer
is a better authority on real estate than the real estate man. No engi-
neer would grant that a real estate man, pure and simple, could do
better engineering than the engineer. It should be an easy matter to
remove this slight flaw from the paper, and the speaker trusts that the
avithor will make this correction.

J. S. Walker,* Esq. — The speaker, until lately, has been connected Mr.
with the Tax Department of Jersey City, and in his position witnessed
many contests between the City and the corporations. In connection
therewith he has heard able men discuss the various phases of this
question. He realizes the fact that this paper represents a great deal
of study, is to the point, and is correct.

The most interesting feature is the theory of the value of the
fractional part of a lot. As Mr. Kelly has stated, Hoffman's opinion,

* Jersey City, N. J.



630 DISCUSSION ON VALUATION OF LAND

Mr. in 1870, was that the front half of a lot was worth two-thirds of its
total value. Hoifman produces a series of numbers; as to how he
derived them we are not told, but they happen to be a series representing
a conic section.

The conversion of Mr. Bernard's 150-ft. rule into the 100-ft. rule
by Mr. Jerrard, agrees with the Hoffman Eule, which the speaker thinks
is very peculiar.

The little investigating the speaker has done tends to show that
the problem of the relation of depth to value results in an equation
of the second degree, between two variables, and is an equation of a
conic section.

In practice a curve is constructed or adopted, and, under certain
conditions if it gives too much or not enough value, some other curve
is copied in whole or in part. The curve then varies in such a manner
that it cannot be represented by a formula. Such being the case, no
two conditions are treated according to the same law.

A case in point is that of a district in transition from one use to
another, such as apartments taking the place of private dwellings, the
appraiser claiming that more value is found to a greater depth for
land on which was built apartments than that devoted to private dwell-
ings, and a variation of the curve in use was applied.

In 1912, or about that time, Newark had curves which differed from
those in use at present, to which the foregoing objections would apply.
The subject calls for extended and exact study.

The Manufacturers Appraisal Company, of Cleveland, Ohio, which
uses the "Somers Unit System of Realty Valuation", does not reveal
the method of calculating the value of corner lots, irregular lots, or
reflected influences. It appears that a city hires only the use of the
system, and, should it be desired to re-adjust values, it would be neces-
sary to re-hire the system. Nevertheless, all things about the Somers
System are not kept secret, and it has many good features.

First of all, it is a system that is carefully worked out. The speaker
thinks it overcomes some of the objections referred to by one of the
speakers.

A booklet, published by the City of Cleveland, Ohio, entitled "The
First Quadrennial Assessment, Cleveland, Ohio", shows how Cleveland
was assessed by the Somers System in 1910, and gives many details
and charts.

Mr. W. I. King,* appears to have gotten nearer to the heart of
the system than any one else, and shows some of the Somers charts
not found elsewhere, but he says:

"Since the scientific accuracy of the Somers tables is not proven,
and since these tables and their derivation are shrouded in secrecy,

* Bulletin No. 6S0 of the University of Wisconsin entitled "Tlie Assessment of
Urban Property."



DISCUSSION OX VALUATION OF LAND 631

it seems necessary to derive a method of corner valuation, and ulti- Mr.
mately a series of charts, which may lay some claim to a scientific W'^^'^ei'-
basis, and at the same time, accord with actual conditions."

This bulletin is of value to those interested in taxation.

In assessment work, Mr. Somers lays much stress on the value of
community opinion. He writes as follows with reference to an assess-
ment in Des Moines, Iowa :*

'The first public meeting was held; * * * about seventy-five
prominent citizens were present, including a majority of the largest
property owners. After the session a committee of citizens and prop-
erty owners was selected by the Mayor and Assessor to co-operate with,
and assess the latter.

"At the outset it was decided to avoid discussion of actual values
at first and to deal with relative values only. Therefore the efforts
of the Committee were devoted to expressing in percentage the relative
values of a Somers unit foot on each side of every block.

*'It was the unanimous opinion that the most valuable frontage in
the city was on the north side of West Walnut Street between Sixth
and Seventh Streets. This the Committee called x, or 100 i)er cent.
Then, at the several meetings, the relative value of a unit foot in every
block throughout the West Side was ascertained.

"When the relative values were compiled, a map of the district Avas
prepared, and the percentages placed thereon. Copies of this map were
distributed and printed in the newspapers ; another meeting was called,
and criticism of the relative values invited."

Another section of the city was likewise treated.

"When the two committees had completed their labors, it remained
only for the assessor to determine x, or the 100%, on West Des Moines
Street." The value of x, or 100%, also came under discussion. '"Cal-
culating clerks were then employed and trained in the methods of the
Somers System. As soon as the unit values were definitely ascertained,
the work of calciilating began."

The opinion of the taxing authorities throughout the United States
seems to be that the "Newark System" is fundamentally the best, but
it has taken 20 years to build it up. In Jersey City, a system is being
constructed by testing any idea that looks good in any system, and is
likely to develop into one which will be the best in the country.

William J. Boucher,! Assoc. M. Am. Soc. C. E. — The speaker Mr.
desires to present a few thoughts regarding the peculiarities of cer- Boucher.
tain sections in cities which seem to have a direct bearing on valuation.

One of the busiest retail business streets in Manhattan (New York
City) is 42d Street, and every day, including Sundays, its sidewalks
are filled with pedestrians and the roadway with cars and vehicles.
Between Fourth and Eighth Avenues, during the past 10 years, there

* As published in the June, 1913, issue of the Somers System News.
t Long Island City, N. Y.



632



DISCUSSION ON VALUATION OF LAND



Mr. have been erected several high-grade office buildings, one first-class

■ department store, numerous smaller stores, some excellent hotels and

restaurants, several banks, the Central Public Library, and the New

York Central Terminal Station. All these tend to make this one of

the most popular and attractive streets in the city, and the rentals,




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I I Ld I Grand

I I rS>i Central

bzzr^ p"| Terminal
I I 11



Retaining Wail;



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MAP OF THE CENTRAL PORTION OF THE BOROUGH OF MANHATTAN SHOWING THE
SECTION WHERE THE SHOPPING AND THE LOFT DISTRICTS OVERLAP

^ , , 500 1000 1500 20p
Swie of Feet



FIG. 6.



and consequently the valuations, are high. Contrast it with 41st
Street (Fig. 0), only 200 ft. away and parallel with it. True, it is
not a through street, but though this affects vehicular traffic, it is
strange that the street contains so little to attract the pedestrian. In
the 400 ft. between Madison and Fifth Avenues, there is only one



DISCUSSION OX VALUATION OF LAND 633

high-grade office building. This has a frontage of 50 ft., is 100 ft. Mr.
deep, and 20 stories high. It enjoys close contact with the Rapid °^^ ^^'
Transit Subway, as one has merely to cross the street and enter the
building on the opposite side, which has a subway entrance on its 42d
Street front. The remainder of the block is occupied with small
shops, restaurants for light, noon-day refreshments, and other estab-
lishments paying small rents.

Again, consider 43d Street, which is 200 ft. to the north of 42d
Street. It is a thoroughfare from the Grand Central Station to the
Hudson River, but it has practically no retail, or other business to
m.ake large rentals or valuations. It is given over largely to clubs
and other buildings where gatherings can be accommodated. One
office building fronting on 42d Street, with a subway entrance in front
of its door, has an "Annex" building on 43d Street. The buildings
are connected by a through corridor giving the "Annex" the full
privileges and benefits of the 42d Street entrance, but the rentals are
considerably less than those for the 42d Street front. The contrasts
of these two contiguous streets (41st and 43d), so close to 42d Street,
form an interesting study.

Reference is made in the paper to the advantages of transporta-
tion, and it does seem as though that is the originating feature of
value of land, although the speaker makes no claim to being an expert.
One location stands out prominently, viz., 149th Street and Third
Avenue, and vicinity, in the Borough of the Bronx, which is a goodly
distance from "down town", yet, through the influence of good transit
facilities (both "Subway" and "Elevated", as well as surface cars),
there has gro-wii up in that section in the 12 years since the subway
was opened to traffic, a very busy retail business center, where rentals
must be quite high. Comparing this location, about 5| miles from
42d Street, with its good transit facilities, with another location only
about li miles from the Grand Central Station, which has until
recently had only the poorest, or practically no, transit, and the con-
trast is remarkable. This other location is in the Borough of Queens,
directly across from 42d Street. It is true, it is separated from Man-
hattan by the East River and, until recently, that stream formed a
most effectual barrier to progress. Two ferries, one at 34th and another
at 92d Street, gave occasional access across, and brave was the pioneer
who had his home or his business there. About 10 years ago, surface
ear service was established over the Queensboro Bridge from 59th
Street, Manhattan, to Queens, but not until the Steinway or Queens-
boro Subway was opened, in June, 1915, with its free transfer privilege
to the main subway line, could it be said that rapid transit existed
there.

On the river front opposite Manhattan, from 45th to 59th Streets,
there still remain large tracts suitable for wharves and warehouses,



C3-i DISCUSSION ON" VALUATION OF LAND

Mr. and, farther inland, there are other large tracts, with railroad facili-
■ ties, and now served with rapid transit, simply waiting to be developed
with industrial establishments of every kind, with desirable locations
for vrorkingmen's homes near-by. These tracts may be had on very
favorable terms, and the valuations are low when compared with
other localities much farther removed from the business centers of
Manhattan.

It is very unfortunate that real estate in the Borough of Man-
hattan, which, for so many years, has been considered a safe and
desirable investment, should have proved so unstable and shifty in the
past 10 or 15 years. Since the advent of the modern, steel skeleton
building, with its cheap curtain walls and concrete floors, it has
offered peculiar inducements for the manufacture of garments of
white goods and clothing, in which lines large numbers of men and
women are employed. This line of manufacturing, until quite re-
cently, was conducted in the district south of 14th Street, in buildings
of the old type so common all through that section. About 10 years
ago, many progressive, but im.fortunately, as it proved, misguided
owners or speculators seized upon the section north of 14th Street,
and, in practically every east and west street, erected many of the
so-called "modem loft" buildings of ten and twelve stories, in which
these garment trades are housed. The thousands of operatives are
mainly recruited from the recently arrived immigrants, and, during
the noon hour and at opening and closing hours, the sidewalks and
streets literally are covered with the slow-moving, jostling, noisy
swarms. At the time this movement of these trades was taking place,
an entirely different movement was under way. The department
stores which, 15 years ago, were on 14th Street and on Sixth Avenue,
north of 14th Street, and on 23d Street, began to move to newer and
more commodious quarters in the vicinity of 33d and 34th Streets,
Sixth Avenue, and Broadway, and a little later to Fifth Avenue,
north from 34th Street. Thus, the new "loft" district and depart-
ment store district overlapped and conflicted to such an extent that
the very existence of the department stores was threatened by the
swarms of noon-day loiterers from the "lofts", who slowly wandered
up and down and along, completely blocking the passage of would-be
patrons of the stores.

The nuisance was so great that the "Save New York" movement
has become a reality, and is already bearing fruit. The first result
was the legal zoning of the city, during 1916, by which the character
of various districts will be restricted, and in the different "zones" cer-
tain restrictions will apply, which will prevent the intrusion of busi-
nesses or trades into districts which would have their real estate values
impaired or ruined by such intrusion. The "Save New York" move-



DISCUSSION" ON VALUATION OF LAND 635

ineiit is considerably diiJerent from the zoning plan in that it involves Mr.
a drastic remedy for existing evils in the district bounded by 32d ^°'^^'^^''-
Street (north side) to 59th Street, and from Third to Seventh Avenue.
In brief, the scheme of the Committee was: To persuade manufac-
turers who contemplated moving into this zone to stay out; to induce
those manufacturers already in, to move out; and to stop the erection
of new manufacturing "lofts" in the zone bounded as described. An
agreement was also made by buyers, to give the preference in buying
goods to those concerns who do not manufacture in this zone, this
measure to take effect on February 1st, 1917. The response to the
Committee's appeal was immediate, and up to January 1st, 1917, the
following results have been accomplished: First, not a single new
lease for manufacturing purposes has been made in the zone; second,
not a single new building for manufacturing purposes has been
erected in the zone; and third, all but 20 firms, out of a total of 225
now manufacturing in the zone, have agreed to move out at the
expiration of their leases, at various times during 1917, 1918, and 1919,

Thus the future of the district is assured by the new "zoning"
plan, although tenants of a different class must be found for the
buildings already erected which will be vacated.

Referring again to the comment that it is cheap, convenient, and
frequent transit which apparently forms the basis of land values in
the first instance, there are many persons who well remember when
the districts lying north of 59th Street, Manhattan, were sparsely
settled, where rocky hillsides and trees abounded, and where goats
roamed at will in and aroiind the shanties of the "squatters" who were
the first settlers. At that time the means of transit were confined to
horse cars and omnibuses, and as the time required to travel from the
business sections at or around the City Hall to the neighborhood of
59th Street was fully one hour, it was about all that the patience or
the physical health of the passengers could endure, as the cars were
not heated and the feet found cold comfort in the straw loosely placed
on the floors in winter. The elevated railway system was opened for
trafiic before 18S0, and by 1884 had reached Harlem, and with its
advent came the buildings and the people to fill them. A later instance,
within the memory of all, is the Washington Heights Section of Man-
hattan and the sections of the Bronx made readily accessible by the
subway opened in 1904. Until that date, only surface cars reached
those districts, but, during the first 5 years after the trains began
running, entire neighborhoods were transformed from open vistas and
low valuations to closely built blocks of buildings with much en-
hanced values.

Again, this matter of the influence of transit facilities is very
noticeable in Chicago. The four elevated railroad main lines are the



636 DISCUSSION ON VALUATION OF LAND

Mr. Northwestern serving the "North Side" and northwest section, the
Boucher, q^j. Park (Lake Street) and Metropolitan serving different sections
of the ''West Side" and the South Side line serving the southern and
southwest sections. Each has a very heavy morning and evening rush-
hour traffic. The four lines reach the business section, as shown on
the map, Fig. 7, and there jointly use the "Union Loop" on Wabash
Avenue, Lake Street, Fifth Avenue, and Van Buren Street. The
"Loop" was opened for traffic in 1897 and, until recently, all trains
entering it passed entirely around it and left it at the point of entrance.
It was merely a joint terminal, and fares began and terminated there ; if
a passenger desired to continue his ride, he left one train, went into and
through a station, paying another fare and boarded the train of another
company also stopping at that station platform. During the past 3
years, however, "through routing" has gone into effect, by which trains
are run through from the North to the South Side and vice versa,
and free transfers are issued from both these lines to the "West Side"
lines.

The "Loop" has been termed both a blessing and a curse. In the
first instance it provided a splendid terminal arrangement for all
trains, from whatever section, giving preference to none and permit-
ting passengers the maximum of convenience in the matter of reach-
ing the down-town section, but, on the other hand, it has undeniably
had the effect of creating the most congested business section in the
United States. From Wabash to Fifth Avenues is about 2 000 ft.,



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