GOOD NEWS FOR THE RENT-PAYER
THOSE OF US WHO MUST GO apartment or house-hunting this fall will be cheered by the recent announcement of the Industrial Conference Board that for the first time in ten years the upward flight of rents has been checked. In forming its estimate, too, the Board explains that it has taken an average for the country as a whole, based on both large and small cities.
A survey of 179 localities in various parts of the country shows an average drop in rentals of slightly less than 4 per cent. To the New York Evening Post's finan-cial editor it is apparent that "construction of new buildings, which has increased steadily in volume until all previous records were broken this year, has eliminated the housing shortage, which became so acute during and immediately following the World War." "It will no doubt be surprizing to many," adds The Post, "to learn that the average rent in New York City is lower than in such cities as Chicago, Los Angeles, and Detroit."
Rents, we are told, do not fluctuate widely, but move slowly over long periods. For this reason, the downward trend that is now being witnessed is hailed as significant of what appears to be a growing tendency toward lower rent-levels generally. As the New York Times summarizes the Conference Board's statement:
"The highest rents within a decade were obtained in July, 1924, when average rental values for the country were 86 per cent. higher than in 1914. Thereafter rents on the average declined slowly but steadily, until last July they had dropt to only 79 per cent. higher than the pre-war level.
"The greatest net increase in rents since pre-war days at present obtains in Los Angeles, among the larger cities, where average rental values of moderately sized homes last July were still somewhere between 131 and 140 per cent. higher than they were in 1914. The tendency toward lower rents, however, is indicated unmistakably in Buffalo, Chicago, Los Angeles, New York and San Francisco. No change is reported in Baltimore, Cleveland, Detroit, Philadelphia, Pittsburgh and St. Louis since last spring. Rates in Buffalo, Chicago, Detroit, Philadelphia and Pittsburgh, however, are higher by 100 per cent. or more than they were before the war. Thirty-nine out of sixty-one Eastern cities report no change since March.
"Rents in the Middle and Far West also have been largely stable since spring, more than half of ninety-one localities in that region reporting practically no change. The tendency toward lower rental values is most general in the South."
In the Boston Globe, we are told that—
"Lower rents are in order for Boston tenants this fall, and still lower rents are in prospect when the bumper crop of 1925 residential buildings is completed.
"Boston had nearly $20,000,000 worth of new residential construction built last year, and building permits for dwellings so far this year show a 40 per cent. increase over 1924. Both the Boston Rent Commission and the State Commission on the Necessaries of Life see general indications of a gradual downward movement that is following close on the heels of increased building activity.
"The number of vacant apartments and the bonuses now offered for the signing of leases on moderate-priced apartments would seem to indicate that those landlords who are still holding to the very highest rentals of the period of acute housing shortage can not long keep their present prices and their tenants. Bonuses are commonly taking the form of two to three or even, in some cases, four months' rent free, for a year's lease, according to the Rent Commissioner. Bargains in heated apartments are attracting a sufficiently large number of suburban rent-payers into the city for the winter to make the movement noticeable to real-estate agents. The prospective coal strike seems to be pressing the tenant who stokes his hired furnace to accept the lure of reduced rent in apartments that are heated by soft coal."
A building program is going forward throughout the country, says The Wall Street Journal, " that would have been seriously handicapped in 1922 and 1923 by bonus payments to workers, a scarcity of material, and a shortage of skilled labor." In July, says the F. W. Dodge Corporation (New York) in its monthly review, contracts in the thirty-six Eastern States, which include about seven-eighths of the total construction volume of the country, amounted to $529,000,000. In only two previous months has this total ever been exceeded— April and June of this year. The increase over July of last year is 53 per cent. In a summary of the Dodge report, the Charlotte Observer says:
"The July record included: $224,712,500 for residential buildings; $72,743,400 for public works and utilities; $67,165,900 for commercial buildings; $58,148,000 for industrial plants, and $57,572,000 for educational buildings.
"July figures brought the year's total of construction started to date up to $3,189,173,800, an increase of nearly 20 per cent. over the first seven months of 1924.
"July building contracts in the Southeastern States amounted to $87,701,800, the highest monthly total yet recorded for this district. The increase over June was 18 per cent.; over July of last year, 53 per cent. Construction started in the district during the past seven months has reached a total of $422,824,200, an increase of nearly 19 per cent. over the correspond-ing period of 1924.
"The July record included: $36,390,600, or 42 per cent. of all construction, for residential buildings; $16,470,800, or 19 per cent. for public works and utilities; $11,563,800, or 13 per cent. for educational buildings; $10,322,500, or 12 per cent. for commercial buildings; and $4,988,700, or 6 per cent. for industrial buildings."
According to an Associated Press dispatch from Chicago, there wag a greater amount of construction, with greater financial outlays than last year, "from Ohio to Nebraska, and from Minnesota to Texas." That increased building operations, and the resulting improvement in the housing situation, are responsible for the recent downward trend in rents is the conclusion reached by the National Association of Real Estate Boards, after a survey of 225 cities. Says this Association: "The stabilization of rents, with a slight tendency downward, is doubtless the result of the disappearance of the housing shortage which followed the war."
Source: The Literary Digest for September 12, 1925
A survey of 179 localities in various parts of the country shows an average drop in rentals of slightly less than 4 per cent. To the New York Evening Post's finan-cial editor it is apparent that "construction of new buildings, which has increased steadily in volume until all previous records were broken this year, has eliminated the housing shortage, which became so acute during and immediately following the World War." "It will no doubt be surprizing to many," adds The Post, "to learn that the average rent in New York City is lower than in such cities as Chicago, Los Angeles, and Detroit."
Rents, we are told, do not fluctuate widely, but move slowly over long periods. For this reason, the downward trend that is now being witnessed is hailed as significant of what appears to be a growing tendency toward lower rent-levels generally. As the New York Times summarizes the Conference Board's statement:
"The highest rents within a decade were obtained in July, 1924, when average rental values for the country were 86 per cent. higher than in 1914. Thereafter rents on the average declined slowly but steadily, until last July they had dropt to only 79 per cent. higher than the pre-war level.
"The greatest net increase in rents since pre-war days at present obtains in Los Angeles, among the larger cities, where average rental values of moderately sized homes last July were still somewhere between 131 and 140 per cent. higher than they were in 1914. The tendency toward lower rents, however, is indicated unmistakably in Buffalo, Chicago, Los Angeles, New York and San Francisco. No change is reported in Baltimore, Cleveland, Detroit, Philadelphia, Pittsburgh and St. Louis since last spring. Rates in Buffalo, Chicago, Detroit, Philadelphia and Pittsburgh, however, are higher by 100 per cent. or more than they were before the war. Thirty-nine out of sixty-one Eastern cities report no change since March.
"Rents in the Middle and Far West also have been largely stable since spring, more than half of ninety-one localities in that region reporting practically no change. The tendency toward lower rental values is most general in the South."
In the Boston Globe, we are told that—
"Lower rents are in order for Boston tenants this fall, and still lower rents are in prospect when the bumper crop of 1925 residential buildings is completed.
"Boston had nearly $20,000,000 worth of new residential construction built last year, and building permits for dwellings so far this year show a 40 per cent. increase over 1924. Both the Boston Rent Commission and the State Commission on the Necessaries of Life see general indications of a gradual downward movement that is following close on the heels of increased building activity.
"The number of vacant apartments and the bonuses now offered for the signing of leases on moderate-priced apartments would seem to indicate that those landlords who are still holding to the very highest rentals of the period of acute housing shortage can not long keep their present prices and their tenants. Bonuses are commonly taking the form of two to three or even, in some cases, four months' rent free, for a year's lease, according to the Rent Commissioner. Bargains in heated apartments are attracting a sufficiently large number of suburban rent-payers into the city for the winter to make the movement noticeable to real-estate agents. The prospective coal strike seems to be pressing the tenant who stokes his hired furnace to accept the lure of reduced rent in apartments that are heated by soft coal."
A building program is going forward throughout the country, says The Wall Street Journal, " that would have been seriously handicapped in 1922 and 1923 by bonus payments to workers, a scarcity of material, and a shortage of skilled labor." In July, says the F. W. Dodge Corporation (New York) in its monthly review, contracts in the thirty-six Eastern States, which include about seven-eighths of the total construction volume of the country, amounted to $529,000,000. In only two previous months has this total ever been exceeded— April and June of this year. The increase over July of last year is 53 per cent. In a summary of the Dodge report, the Charlotte Observer says:
"The July record included: $224,712,500 for residential buildings; $72,743,400 for public works and utilities; $67,165,900 for commercial buildings; $58,148,000 for industrial plants, and $57,572,000 for educational buildings.
"July figures brought the year's total of construction started to date up to $3,189,173,800, an increase of nearly 20 per cent. over the first seven months of 1924.
"July building contracts in the Southeastern States amounted to $87,701,800, the highest monthly total yet recorded for this district. The increase over June was 18 per cent.; over July of last year, 53 per cent. Construction started in the district during the past seven months has reached a total of $422,824,200, an increase of nearly 19 per cent. over the correspond-ing period of 1924.
"The July record included: $36,390,600, or 42 per cent. of all construction, for residential buildings; $16,470,800, or 19 per cent. for public works and utilities; $11,563,800, or 13 per cent. for educational buildings; $10,322,500, or 12 per cent. for commercial buildings; and $4,988,700, or 6 per cent. for industrial buildings."
According to an Associated Press dispatch from Chicago, there wag a greater amount of construction, with greater financial outlays than last year, "from Ohio to Nebraska, and from Minnesota to Texas." That increased building operations, and the resulting improvement in the housing situation, are responsible for the recent downward trend in rents is the conclusion reached by the National Association of Real Estate Boards, after a survey of 225 cities. Says this Association: "The stabilization of rents, with a slight tendency downward, is doubtless the result of the disappearance of the housing shortage which followed the war."
Source: The Literary Digest for September 12, 1925