Spencer Heath Archive

Item 1377

Carbon of a letter to David L. Wickens, c/o National Bureau of Economic Research,  1819 Broadway, New York City

April 8, 1941

Dear Mr. Wickens:

     I am writing to express to you my appreciation of your important contribution to the factual data concern­ing real estate and its shifting income and values. I am sure others, like myself, find it difficult in gath­ering statistical information on the values of real estate.

     As early as 1851, George Opdyke in his Treatise on Political Economy says, “We may readily infer that the value of real estate greatly exceeds that of personal estate, but if from the gross value of real estate we deduct the value of the buildings and add it to the personal estate, we shall find them equal…”  He then goes on to sug­gest that the market value of land is merely the reflection of the value of the productive capital placed upon it and its immediate vicinity. If he is right about this, it would seem to be not only the highest but the exclu­sive interest of land owners, as such, to foster and pro­mote such public policies as will make their lands econ­omical and otherwise inhabitable and its inhabitants highly productive. It is a suggestion that the admin­istration of land in a community with a view to attaining its highest value, through making the community in every respect the most desirable, is the proper and, perhaps, exclusive function of those who own the land.

     Your recent work appears to be almost exclusively factual and statistical, but it does go into theory so far, at least, as to observe the direct relationship between the income to real estate and the incomes — in other words, the productivity of those who occupy and use it.

     Thinking it may interest you to know something of my own very modest contribution to the theory of real estate administration and a suggested positive policy for restoring its incomes and values and creating new ones, I enclose, herewith, an explanation of property in land from the functional point of view, and with refer­ence to it as an agency to public services and adminis­tration I also enclose two pamphlets on real estate administration, the smaller of the two being in the main an epitome of the matters more fully discussed within the other.

    I am glad you are working so diligently and with such valuable results in your research concerning real estate. Every special science must be developed upon its factual foundation. This is essential to the devel­opment of sound theory and, finally, upon this of its successful application through a practical administrative technique. I hope you will continue your researches, and that much sound theory can be built upon the data you collect,

     I shall be glad to have your comments on the theory of real estate administration that I am attempting to disclose. It is a common observation that real estate is prosperous only when general business is active and productive. It seems to me that it will be a matter of great public benefit when land owners discover the dependence of their values upon community prosperity and take concerted action to promote it.

     Do you know of any adequate compilation of the value of real estate in terms of the actual income yielded by it rather than in terms of the estimate price it would bring if placed on the market? Data as to income is probably much more valuable as being factual and object­ive rather than hypothetical. Moreover, I suggest that the income of property rather than its estimated sales price should be the appropriate figure to balance against the income (productivity) of its occupants or users.

     When we have as good data on the income of real estate as we have on family income, this comparison can then be made.

     With best congratulations on your work, I am,

 

Sincerely yours,

 

 

SH:ML  Spencer Heath

SH:ML