Spencer Heath Archive

Item 2776

Newspaper clipping sent to Heath by Janet Mabic, 55 East End

Avenue, New York City, and preserved by him. New York Times?

January 22, 1952

 

 

City Services Seen

Setting Realty Value

 

Hurley Declares Worth of Property

Depends on Adequate City Revenue

By Stephen G. Thompson Real Estate Editor

 

Whether the City of New York obtains additional needed revenue from real estate or from other sources — unless it acquires the necessary funds to provide more adequate and more modern facili­ties, and to render improved municipal services, “the value of your real estate holdings is in serious jeopardy,” according to Denis M. Hurley, the city’s Corporation Counsel.

 

Addressing the annual dinner meeting of the Brooklyn Real Estate Board at the Hotel St. George on Saturday night, Mr. Hurley emphasized that real es­tate brokers, bankers, property owners and all persons concerned with investments in real property, whether in equities or mortgage liens, have a common interest with the city in the municipality’s fiscal problems.

 

A particular parcel of property obtains its value from its proxim­ity to transportation facilities, highways and parkways, schools, parks, libraries, and its servicing with adequate sewers, water mains, police and fire protection and hospitals, Mr. Hurley explained.

 

All these facilities or services are rendered by the city, Mr. Hur­ley continued, and thus “every new sewer, every new school, every new subway provided for in the city’s capital budget tends to increase the value of real property in the community. Every improvement in city service keeps valuable property from declining in its worth. To the extent that the city falls down on its job of furnishing adequate facilities and services through want of necessary revenue, to just that extent do equity and mortgage investments in real property decline and you and your clients become the sufferers.

 

If these services are not prop­erly supplied in an adequate measure, the value of your in­vestment gradually disappears.

 

“The revenue from real estate taxation does not, of course, pay for all of these city capital im­provements and city services. Real estate taxes pay only a part of their cost. A cursory examination of our city expense budget shows that real estate taxes provide only 43 per cent of the total amount of the budget. The rest of the money the city has been ..trying to get from other sources.

“This is a comparatively mod­ern trend. Once upon a time, substantially the entire city budget was paid for out of real estate tax revenues. That may be the case again if the State Legislature and the Governor reject the city’s other tax proposals and compel the city to impose a 1½ per cent county tax in addition to the city tax now limited to 2 per cent of the assessed value of real property in the city of New York.”

In contrast to Mr. Hurley’s warning that real estate will suffer if the city doesn’t obtain in­creased revenue from one source or another, James M. Glimm president of the board, protested against “any unfair or unjust” in­creases in the levies against real estate.

 

After pointing out that residen­tial rents in New York City had been increased only 8 per cent since 1943, while food and clothing had gone up about 60 per cent in the same period, he said:

 

“Because of the straightjacket in which real estate is being held by the various rent control laws it would certainly be unfair and unjust to increase real estate taxes at this time. One of the proposals alone, that of increasing the constitutional limit on real estate taxes from the present 2 per cent to 3 per cent would result in an annual increase of $100 on a one family house assessed at $10,000.

“It must not be forgotten also that real estate is now paying an entirely new tax, namely the sewer tax, in addition to meeting a 28-point jump in the tax rate during the past three years.”

 

To meet the demands for new taxes, Mr. Glimm suggested that the city consider the imposition of an occupancy tax to be paid by residential tenants, and also asked that a 20 per cent increase be granted for residential rents, similar to the provisions of the Federal rent act which applies in states other than New York.