./7 1433 J3 2 STATE OF NEW YOR1 PRELIMINARY REPORT of THE STATE BOARD OF HOUSING to GOVERNOR ALFRED E. SMITH December 15, 1926 ALBANY J. B. LYON COMPANY, PRINTERS 1926 STATE OF NEW YORK PRELIMINARY REPORT of 4 '-. f THE STATE BOARD OF HOUSING to GOVERNOR ALFRED E. SMITH December 15, 1926 ALBANY J. B. LYON COMPANY, PRINTERS 1926 THE STATE BOARD OF HOUSING Department of Architecture DARWIN R. JAMES, Chairman. OLIVER CABANA, JR. LoUIs H. PINK. JOHN HALKETT. AARON RABINOWITZ. SULLIVAN W. JONES, State Architect. GEORGE GOVE, Acting Secretary. WILLARD L. THORP, Statistician. CARL S. STERN, Counsel. [2] DNUME)dTS N. Y~~f. L. JUL `3 32 LZ7480 CONTENTS PAGE State Housing Law........................................................... 5 Typical Block Plans..........................................................8 Cost of Acquiring Sites...................................................... 10 Rents at Given Site Costs................................................... 13 Costs of Metropolitan Type I............................................. 16 Costs of Metropolitan Type II................................................. 18 Costs of Compact Type I.......................................................... 20 Costs of Compact Type II....................................................22 Costs of Open Type I........................................................ 24 Costs of Open Type II....................................................... 26 Methods of Estimating Cost..................................................... 28 TABLES Table Number I Number of Blocks Available at Various Estimated Costs per Square Foot..........11 II Distribution of Blocks according to Ownership.................................. 12 III Summary of Rents for Different Land Values................................... 14 IV Effect of Store Values on Rents............................................. 15 [31' The Board acknowledges its appreciation of the assistance given throughout the inquiry by Mr. Walter Stabler, comptroller of the Metropolitan Life Insurance Company; Mr. Alexander M. Bing, president of the City Housing Corporation; Mr. Clarence H. Holmes, president of the City and Suburban Homes Company; by officers of the Building Managers and Owners Association, and by the Committee on a Regional Plan for New York and its Environs. As consulting architects, Arthur C. Holden and Associates prepared the type studies which are shown in this report. [41 THE STATE HOUSING LAW The State Board of Housing, created under the terms of the State Housing Law,* was appointed by Governor Alfred E. Smith on July 1, 1926. The Board at once began studies of the cost of acquiring suitable sites and of various types of building that may be erected thereon under the terms of the law. The studies have now progressed sufficiently to justify the conclusion that a material contribution to the imnprovement of'housing conditions can be made provided those interested are prepared to act under the law. This preliminary report is presented to show several types of multifamily dwelling that can be erected in present tenement house areas of New York City, or other cities of the State, to rent f or not more than the statutory maximum. The essential features of the State IHousing Plan are: Limitation of dividends on capital invested in housing projects to eliminate speculative profit. Exemption of the housing corporation, its stock, bonds and interest thereon from State taxation to reduce annual charges on the project. Exemption of buildings and improvements from local taxation to further reduce annual charges. Exercise of the power of condemnation to insure acquisition, at fair prices, of suitable sites for large scale production. Statutory limitation of rents to insure that the economies so gained shall be conserved for the tenants. Creation *of a State Board of Housing to administer the law. For the actual construction of housing projects, the act authorizes the creation of two types of limited dividend company. The first, or "public limited dividend housing company," may exercise all the powers giranted under the act including the power of condemnation, but is prohibited from selling or otherwise disposing of any land acquired under con--demnnatiomii except to another "public limited dividend housing company" after the transfer has received the approval of the State Board of Housing(. The second, or "(private limited dividend housing company,"' differs from the "public limited dividend housing company"' primiarily in that it may not exercise the power of eminent domain in the acquisition of *Chapter 823, Laws of 1926. 15] property and is not prohibited from selling or otherwise disposing of land or buildings, provided the State Board of Housing shall consent. Both the "public" and "private" limited dividend companies are required to raise at least one-third of the actual cost of the project by the issue of stock of the corporation and to raise the balance by mortgage bonds which shall not exceed two-thirds of the actual cost of the project. Stockholders are allowed the privilege of exchanging their stock for income debenture certificates bearing no greater interest than 51/2 per cent per annum. Dividends on the stock of the corporation may not be paid in excess of the rate of 6 per cent per annum but the companies are permitted to accumulate a surplus equal to 12 per cent of the outstanding capital stock. For the money raised on mortgage bonds the companies are not permitted to pay more than 5 per cent per annum. Should the gross receipts of the company exceed interest and dividend payments and the authorized transfers to surplus, the balance shall be applied to the reduction of rents within one year after it becomes available. If the company shall dissolve, any non-distributed earnings in excess of 6 per cent revert to the State of New York. Limited dividend companies both "public" and "private" are exempted from the payment of taxes and fees to the State or its officers, and their bonds and mortgages and the interest thereon are exempted from State taxation. The act authorizes municipalities to exempt the buildings and improvements of each project from local taxation, providing, however, that the buildings and improvements of a private limited dividend company may be exempted only so long as it owns and operates the property. Condemnation may be used only by "public" limited dividend housing companies after specific authorization has been granted by the State Board of Housing. With such authorization the corporation may proceed under the condemnation law, or in the case of property situated within the City of New York the corporation may petition the city to institute proceedings under Chapter 21 of the Greater New York Charter for the acquisition of title. The city may then acquire property as for a public use and convey it to the corporation upon payment of all sums expended. In such cases the act requires that the city obtain satisfactory evidence or assurance that the corporation will have the funds necessary to complete the transaction. The law provides that rents in apartments built under its terms shall be limited to $12.50 per room per month in the County of New York (Manhattan); $11 in the County of Kings (Brooklyn) and The Bronx; $10 in other counties within New York City (Queens and Richmond) and first class cities of the State and $9 elsewhere. An important provision of the act invests the State Board of.Housing vwith power to increase rents above the maxima fixed in the act but only when the Board finds that changes in economic conditions in their application to the project are such that the maximum rents fixed by statute are insufficient to meet annual charges and that the deficit cannot be corrected by reasonable economies in management and operation. There is no complicated procedure under the act. Any three or more persons may become a limited dividend company by incorporating under the terms of the law, after obtaining the approval of the State Board of Housing. They may then issue stock and proceed to acquire a site by purchase or by condemnation when necessary. Thereafter, they may borrow on mortgage the remaining capital necessary to complete the project. The corporation is then required to manage the property for a term of fifty years, nor may the company dissolve within that term except with the approval of the State Board of Housing. Within the life of the cor'poration two-thirds of the cost of the project will be completely amortized. With regard to tax exemption preliminary conferences have already been held with the municipal authorities in New York City. At the suggestion of the mayor, the chairman of the State Board of Housing has appeared before the Committee on Housing, Zoning and Distribution of Population of the Mayor's Committee on City Planning and Survey. An ordinance has been drafted for introduction into the New York City Assembly to provide that buildings which shall be erected hereafter and until 1937 under the terms of the State Housing Law, shall be exempt from all forms of local taxation other than special assessment. Assured that practical operation under the law is feasible, the Board has proceeded to formulate regulations and rules of procedure to be followed in the organization of limited dividend corporations, in the acquisition of land, and in the erection of buildings which will meet the requirements of the law. Toward the initiation and operation of housing projects under the law the Board offers assistance and cooperation. TYPICAL BLOCK PLANS Seven types of apartment buildings are shown on the opposite page. Each type is projected on a single block 200' x 800'. In the following pages six of these types are described in detail with estimated cost of construction, annual carrying charges and estimated room rents. The seventh is the old Dumbbell type, covering 87 per cent of the lot. It was outlawed twenty-five years ago but approximately half of the multifamily dwellings in New York City today are of this type. It is shown for comparison only. The Board began its studies with two Metropolitan Life Insurance Company types of which the actual costs are known. Having ascertained the maximum cost of land on which these types can be erected to provide rents within the limitations prescribed by the act, a third type was designed to meet conditions imposed by still higher land costs. In this type the land coverage is increased to 58 per cent, 8 per cent more than the Metropolitan Life Insurance Company types. The maximum coverage permitted by the Tenement House Law is 70 per cent. Thereafter a fourth type was designed to conserve the values inherent in the third type but at the same time to provide a large recreation court. This great court covers almost one-sixth of the total area of the block. A fifth type was then designed to provide a series of large courts distributed uniformly throughout the block with an additional great central play court, the buildings covering only 47 per cent of the total area. A sixth type was designed to incorporate the utmost in open courts and playspace that may be realized on the lowest priced land available in the congested areas of Manhattan and is especially suited to large sections of Brooklyn, Queens and The Bronx. In this type land coverage is reduced to 40 per cent. The series of plans here shown embraces approximately the entire range of possibilities with respect to land coverage in the congested areas. [8] Old Dumbbell IMetrop17olitan Type IIType I Type It 87-61,9f 5O.56Yo 51.05%/ 5 8.33% 50a 7.7% 4Q.zgz Various Typesof-Ten ements on City Blocks ZOO'x 80 0"0 with 60' St r Ieet s 10 COST OF ACQUIRING SITES The Board first made a survey of land values in Manhattan and in parts of Brooklyn. Its immediate study of eligible areas includes about 950 assessment blocks or about 1,250 ordinary blocks. These fall within the Manhattan areas known as Greenwich Village, Chelsea, San Juan Hill, the lower East Side to 14th Street; the middle East Side, from 14th to 40th Streets and from 40th to 96th Streets; the Upper East Side from 96th to 125th Streets and from 125th Street to 145th Street; the area north of 145th Street, and the Navy Yard and Williamsburg sections of Brooklyn. They include the most congested districts of the city. For each block as a unit, the estimated acquisition cost was calculated, taking the present assessed valuation of both land and buildings as a base. The market value of each block was estimated by adding to the assessed value an allowance determined by the record of approximately 1,900 sales of the current year. The experience of the City of New York in acquiring sites for public buildings by condemnation, from the years 1904 to 1924, inclusive, was accepted as representative of the cost of condemnation. This has been added to the estimated market prices. The costs presented in Table I are therefore liberal estimates of the totalkcost of acquiring sites for housing projects. Table I is in no sense to be interpreted as inclusive of all blocks in Brooklyn available at the lower prices for it includes only the Navy Yard and Williamsburg sections. Further studies of the Board will include other sections of Brooklyn and parts of Queens, The Bronx and Richmond. At this time the Board is prepared to assist any who are interested in operation under the State Housing Law in projecting further studies of site cost with respect to any areas in New York City or other cities of the State. The Board has studied the record of ownership of all the blocks considered. It is obvious that acquisition of sites for housing projects whether by purchase or by condemnation or by combining both methods, will be facilitated wherever title rests in few owners. Table II presents the number of owners of blocks classified according to estimated cost per square foot in the various sections of Manhattan. It will be observed that with increasing land value there is an increase in the number of owners. Of 63 blocks on the East Side, estimated to cost less than $10 per square foot, there are 20 blocks of which the number of owners does not exceed 5. Of 118 blocks estimated to cost from $10 to $14 per square foot there are 104 to which title vests in more than 10 owners and of 58 such blocks the number of owners in each case exceeds 30. TABLE I NUMBER OF BLOCKS AVAILABLE AT VARIOUS ESTIMATED COSTS PER SQUARE FOOT (Cumulative) In Manhattan between 187th Street and 210th Street there are six large areas not yet subdivided into lots of which the estimated cost is less than $6 per square foot. These areas have not been included in the table. There have also been excluded all blocks having an estimated cost of more than $14 per square foot, blocks now occupied by public buildings, public utilities, large churches, hospitals, schools, etc., as well as blocks either too small or too irregular to be suitable. MANHATTAN- EAST SIDE MANHATTAN- WEST SIDE MANHATTANj BROOKLYN I I I COST PER SQUARE FOOT STREETS Greenwich Village Chelsea San Juan Hill Below 14-40 14th Above Navy Wil145th yard burg burg 40-96 96-125 125-145 -- - 1---I I I------- - 1 1 1 1 1 1 1.1---- ---- -- - I --------~ Under $6 00.................. " 7 00................. " 8 00.................. S 9 00.................. S 10 00.................. 11 00.................. S 12 00.................. 13 00.................. S 14 00.................. 3 5 11 19 27 34 44 49 70 1 1 5 7 13 17 28 31 37 1 3 8 11 14 20 29 52 2 4 14 16 20 27 34 44 53 4 6 11 15 19 26 32 38 47 2 5 10 13 2 3 5 5 10 2 2 4 5 8 12 18 38 39 42 42 43 43 45 47 49 11 24 33 38 41 43 43 43 43 2 8 13 20 22 26 - 27 30 32 ~ SUMMARY COST PER SQUARE FOOT MANHATTAN BOOK- GRAND East West Above Total LYN TOTAL Side iSide 145 Under $6 00................. 10...... 38 48 13 61 " 7 00................. 17...... 39 56 32.88 " 8 00.................. 44 2 42 88 46 134 9 00................. 65 2 42 109 58 167 " 10 00................. 90 6 43 139 63 202 " 11 00................ 118 10 43 171 69 240 " 12 00................. 158 18 45 221 70 291 " 13 00.................. 191 27 47 265 73 338 " 14 00................. 259 41 49 349 75 424 TABLE H DISTRIBUTION OF BLOCKS ACCORDING TO NUMBER OF OWNERS COST PIER SQUARE FOOT 1 2-5 6-9 10-19 20-29 30 owners Total owner owners owners owners owners and over MANHATTAN - EAST SIDE Under $6 00.............. 3 4.. 3.. 0.. $6 00-$9 99.............. 6 16 8 27 7 16 80 10 00-13 99................ 2 6 5 14 37 105 169 Total................ 11 26 13 44 44 121 259 MANHATTAN - WEST SIDE Under 86 00............... $6 00-$9 99.............. 2 2.. 1 1 6 10 00-13 99............... 2 2 5 3 8 15 35 Total................ 4 4 5 4 9 15 41 MANHATTAN - NORTH, ABOVE 145TH ST. Under $6 00.............. 7 11 12 8.... 38 $6 00-49 99.................. 3 2.... 5 10 00-13 99.................. 4 1 1 6 Total................. 7 11 15 14 1 1 49 BROOKLYN - WILLIAMSBURG AND NAVY YARD Under $6 00.................... 2 5 6 13 $6 00-$9 99............... 2 1 14 19 14 50 10 00-13 99...................... 9 3 12 Total................. 2 1 16 33 23 75 TOTAL Under $6 00.............. 10 15 12 13 5 6 61 $6 00-$9 99.............. 8. 20 12 44 27 30 141 10 00-13 99............... 4 8 10 21 56 123 222 Total................. 22 43 34 78 88 159 424 13 RENTS AT GIVEN SITE COSTS AND STORE VALUES The estimated rents per room per month for each type at various site costs is shown in Table III. From this table it will be seen that the Metropolitan types of buildings, five stories in height may be constructed on sites costing not more than $8 and $10 per square foot respectively, or $20,000 and $25,000 for a city lot, to rent for not more than $12.50 per room per month. The compact type may be constructed on much more costly sites, the first compact type, six stories in height being entirely practicable on land costing as much as $15 per square foot, or $37,500 a city lot. The open types can be built only on low priced land. This table used in conjunction with Table I represents the Board's findings with respect to the extent of possible operation for each type on Manhattan and in the two limited sections of Brooklyn included in the studies. For example, from Table III it can be seen that the Compact Type II with playground, six stories high, can be built on land costing $13.00 per square foot to rent for $12.50 per room per month. From Table I it can be seen that there are 49 blocks on the lower East Side whose cost is estimated to be under $13.00 per square foot. Therefore, these two figures determine the feasibility of this type within this area. All rents have been computed on the basis of exclusive residential use of the building. Nevertheless store values obtain in almost all blocks in which commercial use is now permitted under the zoning law. These values must be paid for in the acquisition of these sites. They vary greatly according to location. Their effect on room rents is measured by the added income which they produce over gross income obtainable from exclusive residential use of the building. The effect of store values on room rent is shown in Table IV. A concrete instance of the effect of store values on room rents may be cited in the case of a block in the lower East Side recently inspected by the Board. This block is occupied by five and six story tenements covering about 90 per cent of the total area. The present annual income from stores is $70,000. If this block were to be reconstructed and the same area were again devoted to store use at the same annual rental it would permit a net reduction in the monthly rent per room of approximately $2 below the rate that must otherwise be charged. An alternative effect of store values is exemplified in the experience of the Metropolitan Life Insurance Company. In the Metropolitan block in Astoria fronting on the north side of Ditmars Avenue, 200 feet by 830 feet and containing sixteen houses, stores were established in the Ditmars Avenue frontage but covering only 164 feet. The stores rent for about $14,000 more than would the same space if used for apartments. This extra income pays 11 per cent of the total land cost of the entire block and this block pays about 1 r-er cent greater net return than any of five other blocks. TABLE III SUMMARY OF RENTSS FOiR DIFFERENT LAND VALUES Figures in bold face type indicate rents within limits fixed by law for New York County, without consid3ration of effect of store values. This table summarizes the estimates presented in detail on pages 16-27 inclusive for blocks 200 x 800 feet. METROPOLITAN COMPACT OPEN SQUARE FOOT COST OF LAND TYPE I TYPE II TYPE I TYPE II TYPE I TYPE II I 5 story 6 story 5 story 6 story 5 story 6 story 5 story 6 story 5 story 6 story 5 story 6 story $6 00.......$11 19 $10 31 $11 35 $10 49 $9 87 $9 25 $10 31 $9 59 $12 03 $11 18 $12 29 $11 36 7 00........ 11 73 10 76 11 89 10 94 10 29 9 60 10 80 10 01 12 64 11 69 12 98 11 94 8 00........ 12 27 11 20 12 43 11 38 10 72 9 96 11 30 10 42 13 25 12 19 13 67 12 51 9 00........ 12 81 11 65 12 97 11 83 11 15 10 31 11 80 10 84 13 86 12 70 14 36 13 08 10 00........ 13 34 12 09 13 51 12 28 11 57 10 67 12 30 11 25 1447 13 21 15 04 13 66 11 00........ 13 88 12 54 14 05 12 72 12 00 11 02 12 80 11 67 -15 08 13 71 15 73 14 23 12 00........ 14 42 12 98 14 59 13 17 12 42 11 38 13 29 12 08 15 69 14 22 16 42 14 81 13 00........ 14 96 13 43 15 13 13 62 12 85 11 73 13 79 12 50 16 30 14 73 17 11 15 38 14 00........ 15 50 13 87 15 67 14 07 13 28 12 09 14 29 12 91 16 91 15 24 17 80 15 95 15 00........ 16 04 14 32 16 21 14 51 13 70 12 44 14 79 13 33 17 52 15 74 18 48 16 53 TABLE IV EFFECT OF STORE VALUES ON RENTS If the utilizing of store values increases the gross income by: $15,000 $30,000 $45,000 $60,000 $75,000 $90,000 The monthly rent per room may be reduced by: Metropolitan I -5 story...........................49.98 1.46 1.95 2.44 2.93 6 story...............................40.81 1.21 1.61 2.01 2.42 II - 5story...............................49.98 1.47 1.96 2.45 2.94 6 story...............................40.81 1.21 1.62 2.02 2.43 Compact I - 5story...............................39.77 1.16 1.54 1.93 2.31 6 story...............................32.64.96 1.29 1.61 1.93 C II -5setory...............................45.90 1.35 1.80 2.25 2.70 6 story...............................38.75 1.13 1.50 1.88 2.25 Open I - 5story...............................55 1.10 1.65 2.21 2.76 3.31 6 story...............................46.92 1.38 1.84 2.30 2.76 II - 5story...............................62 1.25 1.87 2.49 3.12 3.74 6.9tory...............................52 1.04 1.56 2.08 2.60 3.12 Or, the original cost of land per square foot may be increased by:All types............................ w..........89 1.78 2.67 3.55 4.44 5.33 Or, the original building cost may be increased by: All types.......i..................................j $202,455 $404,910 $607,3655 $809,820 $1;012,276 $1,214,731 16 METROPOLITAN LIFE INSURANCE COMPANY TYPE I The housing project of the Metropolitan Life Insurance Company is the largest single low rental multi-family operation ever undertaken in the United States. It is the outstanding example since the war of apartment construction for rents as low as $9 per room per month. It was made possible by legislation, of which the company took advantage in 1922, permitting life insurance companies to invest part of their funds directly in housing. Its outstanding features include large scale operation, uniform standards of construction and improved facilities represented by the planning and mechanical equipment of the apartments and the relative openness of rear courts with space for landscaping and gardening. The Metropolitan building unit occupies a plot 100' x 100'. It is approximately 88' x 83', of five stories, containing thirty-nine apartments, a total of 172 rooms per house, the entire building covering 50 per cent of the plot. The total project consists of fifty-four buildings in six large groups housing 2,125 families. It is located in the Borough of Queens. The Metropolitan Life Insurance Company's housing is exempted from municipal taxation for nine years after the date of completion of the buildings. The net return on the project for the year 1925 was 8.8 per cent of the total capital investment. Of this net return 6 per cent is allotted to income, the remainder, after federal income taxes, being credited to amortization. In the Board's calculations the original plan has been slightly modified in two respects; the eight-foot ceiling height has been adopted and the cellars have been extended throughout the building area. From the computations on page 15 it will be seen that this type of building, five stories in height, may be erected on land costing not more than $8.43 per square foot, or $21,075 per city lot 25' wide x 100' deep, to rent for not more than $12.50 per room per month. Building costs and rentals have been estimated for the same type of building six stories in height. The six-story building of this type may be erected on land costing not more than $10.92 per square foot or $27,300 per city lot to rent for not more than $12.50 per room per month. 17 METROPOLITAN TYPE I Typical Block 200' x 800' Showing Metropolitan Type I Five story Number of units..................................... 16 Number of apartments................................ 624 Number of rooms....................................2,640 Area of land, square feet............................... 160,666.64 Area of buildings, square feet........................ 80,576 Coverage, per cent.................................... 50.15 Cubage, cubic feet................................... 4,431,680 Cost Land per square foot.................................. $8.43 Total land cost...................... 1,354,419.78 Building at 45 cents per cubic foot...................... 1,994,256.00 Financial and carrying charges.......................... 187,395.19 Total cost..................................... $3,536,070.97 Annual charges Interest, 5.34 per cent................................ $188,826.19 Amortization, 1.5 per cent............................ 53,041.06 Real estate taxes, 2.71 per cent (land only)............... 36,704.78 Federal income tax, 25 per cent.......................... 8,840.18 Maintenance, 20 cents square foot, gross area............. 96,691.20 Six story 16 752 3,200 160,666.64 80,576 50.15 5,156,864 $10.92 1,754,479.70 2,320,588.80 230,924.48 $4,305,992.98 $229,940.03 64,589.90 47,546.40 10,764.98 112,806.40 $465,647.70 3,104 $12.50 Nu Rer Total annual charges............................. $384,103.41 mber of rooms allowing 3 per cent for vacancies....... 2,561 It per room per month...................... $12.50 ESTIMATED ROOM RENT ON LAND AT VARIOUS COSTS Land cost per square foot $1................... 2................... 3................. 4.................. 5................... 6................... 7................~~ Rent 5 story 6 story $8.49 $8.09 S 9.03 8.53 9.57 8.98 10.11 9.42 10.65 9.87 11.19 10.31 11.73 10.76 12.27 11.20 Rent Land cost per square foot 5 story 6 story $9................ $12.81 $11.65 10................ 13.34 12.09 11.................. 13.88 12.54 12.................. 14.42 12.98 13.................. 14.96 13.43 14.................. 15.50 13.87 15................. 16.04 14.32 16................. 16.58 1.76 18 METROPOLITAN LIFE INSURANCE COMPANY TYPE II Two of the buildings in the Metropolitan development were planned for a wider frontage, permitting wider courts. The widening of the rear center and side courts of each building in Type II gives better daylight illumination in the apartments than in Type I. Both types have the advantage of courts so placed in the planning that each contributes to the openness of the other. Type II is identical with Type I in specifications for construction, finish and mechanical equipment. It includes steam heat and hot water furnished from a central plant in each building, and dumb waiter service. With respect to construction both types follow the standards of the New York City Tenement House Law, with masonry exterior walls, fireproof stairs and dumb waiter shaft, the remainder being timber construction. From the computations on page 17 it will be seen that this type of building, five stories in height may be erected on land costing not more than $8.12 per square foot, or $20,000 for an average city lot to rent for not more than $12.50 per room per monith. The six-story building of this type may be erected to rent for not more than $12.50 per room per month on land costing not more than $10.50 per square foot or $26,000 for a city lot. 19 METROPOLITAN TYPE II 7, 77777771 -f 60 F o OT 5 T ILYE, E T 0 Fb o _____ 60 FOOT- 5 'TPuM /E E T __ I 1 I N%%SS^-%2^-- ^^ii^i^- BS%%^^^^ t-g3SSSSSi%;) ^K^S'i'^Se'S''^;?7^-^^^?'^^;; / \ LLJ 0 o 4-4 00 E I-r Typical Block 200' x 800' Showing Metropolitan Type II Five story N um ber of units....................................... 12 Number of apartments................................ 600 Number of rooms......................................2,634 Area of land, square feet................................. 160,666.64 Area of building, square feet........................... 81,955.32 Coverage, per cent............................. 51.05 Cubage, cubic feet................................. 4,507,543 Cost Land, per square foot................................. $8.12 Total land cost.................................... 1,304,613.12 Building, at 45 cents per cubic foot..................... 2,028,394.35 Financing and carrying charges........................ 185,340.36 Six story 12 720 3,186 160,666.,64 81,955.32 51.05 5,245,140 $10.50 1,686,999.72 2,360,313.00 227,846.76 Total cost........................... $3,518,347.83 $4,275,159.48 Annual charges Interest, 5.34 per cent................................. $187,879.78 Amortization 1.5 per cent............................. 52,775.22 Real estate taxes, 2.71 per cent (land only).............. 35,355.02 Federal income tax,.25 per cent........................ 8,795.87 Maintenance, 20 cents square foot, gross area............ 98,346.39 Total annual charges............................ $383,152.28 Number of rooms allowing 3 per cent for vacancies........ 2,555 Rent per room per month............................$12.50 $228,293.52 64,127.39 45,717.69 10,687.90 114,737.45 $463,563.95 3,090 $12.50 ESTIMATED ROOM RENT ON LAND AT VARIOUS COSTS Land cost per square foot $1................. 2................... 3................... 4................... 5................... 6................... 7................. 8.............. Rent 5 story 6 story $8.65 $8.26 9.19 8.70 9.73 9.15 10.27 9.60 10.81 10.04 11.35 10.49 11.89 10.94 12.43 11.38 Land cost per square foot $9................ 10................. 11.................. 12............... 13................. 14.................. 15................ 16.................. Rent - - - --- - 5 story 6 story $12.97 $11.8l 13.51 12.28 14.05 12.72 14.59 13.17 15.13 13.62 15.67 14.07 16.21 14.51 16.75 14.96 20 COMPACT TYPE I The Board endeavored to discover whether it is possible to produce a building which can be erected on relatively higher priced land in the congested centers of the city to provide lower rents than would the Metropolitan types. To this end the consulting architects developed a preliminary plan which is here referred to as the Compact type. This type, on land costing $10 per square foot, when carried six stories in height, may be rented at $10.67 per room per month as compared with $12.09 per room per month for the Metropolitan Type I. In part, this substantial saving is obtained through a more economical stair arrangement, by which each stairway serves four apartments instead of two apartments as in the Metropolitan Type I or two and a half as in the Metropolitan Type II. Further economy in Compact Type I is obtained through increased coverage. The plan maintains courts as large as the Metropolitan but these do not open opposite each other along the block as do the courts in the Metropolitan design. The bedrooms are slightly smaller. The living rooms are larger than in the Metropolitan plan. This type of building may be erected, five stories in height, to provide rents of not more than $12.50 per room per month, on land costing not more than $12.18 per square foot, or approximately $30,000 for the average city lot. This type, six stories in height, may be built to provide the same rents on land not exceeding $15.17 per square foot or approximately $37,500 for the average city lot. 21 COMPACT TYPE I Typical Block 200' x 800' Showing Compact Type Five story Number of units...................................... 11 Number of apartments................................ 840 Number of rooms...................................... 3,340 Area of land, square feet.............................. 160,666.64 Area of building, square feet.......................... 93,713 Coverage, per cent................................... 58.33 Cubage, cubic feet................................... 5,154,215 Cost Land, per square foot................................. $12.18 Total land cost..................................... 1,956,919.68 Building, at 45 cents per cubic foot..................... 2,319,396.75 Financing and carrying charges......................... 245,466.76 Total cost.................................... $4,521,783.19 Annual charges Interest, 5.34 per cent................................. $241,463.22 Amortization, 1.5 per cent............................. 67,826.75 Real estate taxes, 2.71 per cent (land only).............. 53,032.52 Federal income tax,.25 per cent........................ 11,304.46 Maintenance, 20 cents square foot, gross area............ 112,455.60 Total annual charges............................. $486,082.55 Number of rooms allowing 3 per cent for vacancies........ 3,240 Rent per room per month....................... $12.50 Six story 11 1,008 4,008 160,666.64 93,713 58.33 5,997,632 $15.17 2,437,312.93 2,698,934.40 297,182.31 $5,433,429.64 $290,145.14 81,501.44 66,051.18 13,583.57 131,998.20 $583,279.54 3,888 $12.50 ESTIMATED ROOM RENT ON LAND AT VARIOUS COSTS Land cost per square foot $1................... 2................... 3................... 4................... 5................... 6................... 7................... 8................... Rent 5 story 6 story $7.74 $7.47 8.16 7.83 8.59 8.18 9.02 8.54 9.44 8.89 9.87 9.25 10.29 9.60 10.72 9.96 Land cost per square foot $9.................. 10.................. 11.................. 12.................. 13.................. 14.................. 15.................. 16.................. Rent 5 story 6 story $11.15 $10.31 11.57 10.67 12.00 11.02 12.42 11.38 12.85 11.73 13.28 12.09 13.70 12.44 14.13 12.80 22 COMPACT TYPE II This type differs from Type I only in that several building units in the center of the block have been omitted, leaving a large recreation court 174' 9" deep x 153' 4" wide. It should be noted that the elimination of the center building units has been so contrived as to open up five interior courts and do away with another and at the same time to obtain a maximum perimeter for the resulting great court. The introduction of this recreation space into the block reduces the average coverage from 5813j per cent to 50 per cent, approximately the coverage of the Metropolitan types. This decrease in coverage increases the rents that must be charged. For example, on land costing $10 per square foot the rents for five and six story buildings respectively are $12.30 per room per month and $11.25 per room per month as compared with $11.57 per room per month and $10.67 per room per month respectively for the Compact Type I. The difference of 73 cents and 60 cents per room per month represents respectively the cost of the recreation space. A comparison of this type with the Metropolitan types all having approximately the same coverage shows the effect on room rents of reducing the number of stairways in the Compact Type II. Thle difference in rents on land costing $10 per square foot is as follows: Compact Metropolitan Metropolitan Type II Type I Type II 5 story.................................... $12.30 $13.34 $13.51 6 story.................................... 11.25 12.09 12.28 The Compact Type with play-court may be erected, five stories high, to provide rents of not more than $12.50 per room per month, on land costing not more than $10.41 per square foot, or $25,000 for the average city lot. It may be built, six stories high, to provide the same. rents, on land costing not more than $13.00 per square foot, or $32,500 for a lot. 23 COMPACT TYPE II Typical Block 200' x 800' Showing Compact Type with Recreation Space Five story N um ber of units...................................... 10 Number of apartments................................. 720 Number of rooms.................................... 2,860 Area of land, square feet................................ 160,666.64 Area of buildings, square feet........................... 80,341 Coverage, per cent.....................................50.00 Cubage, cubic feet.................................... 4,418,755 Cost Land, per square foot.................................. $10.41 Total land cost.................................... 1,672,539.72 Building, at 45 cents per cubic foot..................... 1,988,439.75 Financing and carrying charges.................... 210,069.91 Total cost...................................... $3,871,049.38 Annual charges Interest, 5.34 per cent................................ $206,714.04 Amortization, 1.5 per cent............................. 58,065.74 Real estate taxes, 2.71 per cent (land only).............. 45,325.83 Federal income tax,.25 per cent........................ 9,677.62 Maintenance, 20 cents square foot, gross area............ 96,409.20 Total annual charges............................. $416,192.43 Number of rooms allowing 3 per cent for vacancies........ 2,774 Rent per room per month..............................$12.50 Six story 10 864 3,432 160,666.64 80,341 50.00 5,141,824 $13.00 2,088,666.32 2,313,820.80 254,714.78 $4,657,201.90 $248,694.58 69,858.03 56,602.86 11,643.00 112,477.40 $499,275.87 3,329 $12.50 ESTIMATED ROOM RENT ON LAND AT VARIOUS COSTS Rent Land cost per square foot 5 story 6 story $1.................... $7.82 $7.52 2.................... 8.31 7.93 3.................... 8.81 8.35 4.................... 9.31 8.76 5..................... 9.81 9.18 6................... 10.31 9.59 7.................... 10.80 10.01 8.................... 11.30 10.42 Rent Land cost per square foot 5 story 6 story $9.................. $11.80 $10.84 10.................. 12.30 11.25 11.................. 12.80 11.67 12.................. 13.29 12.08 13.................. 13.79 12.50 14.................. 14.29 12.91 15.................. 14.79 13.33 16.................... 15.29 13.74 24 OPEN TYPE I The Board authorized the consulting architects to prepare, in sketch form, a plan which should provide much larger room sizes and court areas. Accordingly a new plan was evolved, here called the open type. Several variations of this open type plan were made, all containing approximately the same room sizes but with varying coverage ranging from about 35 per cent to 47 per cent. Two of these variations were chosen for illustration, here called Type I and Type II covering approximately 463/4 and 40 3/10 per cent of the site area respectively. The effect of increasing room sizes and courts on site cost is apparent from a comparison of these types with the more concentrated types previously shown. The central recreation space in Type I is 116 feet wide by 146 feet deep and the smaller courts of similar depth are as wide as those of the Metropolitan type. In this type larger room sizes prevail throughout. Economies are gained by increasing the number of apartments served by each stairway. To provide monthly room rentals of not more than $12.50, the Open Type I, five stories in height, can be constructed on land costing not more than $6.76 per square foot or approximately $16,000 for the average city lot. The same type, six stories in height may be built on land costing not more than $8.60 per square foot or approximately $20,000 for the average city lot. This type is planned for projects covering at least one city block, and is not adapted to smaller areas. 25 OPEN TYPE I 60 FOOT T R EET Typical Block 200'x 800' Showing 471/% Open Type Five story Number of units......................................... Block type Number of apartments.............................. 605 Number of rooms...................................... 2,337.5 Area of land, square feet.............................. 160,666.64 Area of building, square feet........................... 75,152.14 Coverage, per cent..................................... 46.77 Cubage, cubic feet................................... 4,133,367.70 Cost Land, per square foot................................. $6.76 Total land cost...................................... 1,086,106.49 Building, at 45 cents per cubic foot..................... 1,860,015.47 Financing and carrying charges......................... 162,008.98 Total cost................................. 3,108,130.94 Annual charges Interest, 5.34 per cent................................ $165,974.20 Amortization, 1.5 per cent............................. 46,621.97 Real estate taxes, 2.71 per cent (land only).............. 29,433.49 Federal income tax,.25 per cent........................ 7,770.33 Maintenance, 20 cents square foot, gross area............ 90,182.57 Total annual charges............................. $339,982.55 Number of rooms allowing 3 per cent for vacancies........ 2,267 Rent per room per month.......................... $12.50 Six story Block type 726 2,805 160,666.64 75,152.14 46.77 4,809,736.96 $8.60 1,381,733.10 2,164,381.60 197,020.13 3,743,134.83 $199,883.40 56,147.02 37,444.97 9,357.84 105,213.00 $408,046.23 2,721 $12.50 ESTIMATED ROOM RENT ON LAND AT VARIOUS COSTS Rent Land cost per square foot 5 story 6 story $1................... $8.99 $8.64 2.................... 9.60 9.15 3.................... 10.21 9.66 4.................. 10.82 10.17 5................... 11.43 10.67 6................... 12.03 11.18 7.................... 12.64 11.69 8.................... 13.25 12.19 Land cost per square foot $9.................. 10.................. 11.................. 12.................. 13.................. 14................. 15.................. 16..................... Rent 5 story 6 story $13.86 $12.70 14.47 13.21 15.08 13.71 15.69 14.22 16.30 14.73 16.91 15.24 17.52 15.74 18.12 16.25 26 OPEN TYPE II In this type the courts have been further expanded. The great central recreation court of 146 feet in depth is 126 feet wide. The smaller courts of equal depth are 52 feet wide. The resulting low coverage of 40.79 per cent is not to be found even in the most desirable and expensive structures in Manhattan. Open Type II, five stories in height may be erected to provide rents of $12.50 per room per month on land costing not more that $6.30 per square foot or $15,000 for the average city lot and six stories in height on land costing not more than $7.98 per square foot or approximately $20,000 for the average city lot. It is obvious that this form of open type cannot be erected on land at prevailing cost in the most congested areas of Manhattan. On the other hand it is entirely feasible for large sections of moderate priced land between the congested centers and the sparsely developed suburban areas where land costs range from $1.50 to $5 per square foot. 27 OPEN TYPE II 60 FOOT Typical Block 200' x 800' JST R.E ET Showing Open Type Five story Number of units...................................... Block type Number of apartments................................505 Number of rooms..................................... 2,067.50 Area of land, square feet................................ 160,666.64 Area of building, square feet........................... 64,732.84 Coverage, per cent............................ 40.29 Cubage, cubic feet.................................... 3,560,306.20 Cost Land, per square foot................................ $6.30 Total land cost....................................... 1,012,199.83 Building, at 45 cents per cubic foot..................... 1,602,137.79 Financing and carrying charges......................... 145,075.80 Total cost................................ 2,759,413.42 Annual charges Interest, 5.34 per cent................................ $147,352.68 Amortization, 1.5 per cent.............................. 41,391.20 Real estate taxes, 2.71 per cent (land only).............. 27,430.61 Federal income tax,.25 per cent........................ 6,898.53 Maintenance, 20 cents square foot, gross area............. 77,679.41 Total annual charges............................ $300,752.43 Number of rooms allowing 3 per cent for vacancies........ 2,005 Rent per room per month............................ $12.50 Six story Block type 606 2,481 160,666.64 64,732.84 40.29 4,142,901.76 $7.98 1,282,119.79 1,864,305.79 176,334.60 3,322,760.18 $177,435.39 49,841.40 34,745.45 8,306.90 90,625.98 $360,955.13 2,407 $12.50 ESTIMATED ROOM RENT ON LAND AT VARIOUS COSTS Land cost per square foot $1................... 2................... 3................... 4................... 5................... 6................... 7................... 8................... Rent 5 story 6 story $8.85 $8.49 9.54 9.07 S 10.23 9.64 10.92 10.21 11.60 10.79 12.29 11.36 12.98 11.94 S 13.67 12.51 Rent Land cost per square foot 5 story 6 story $9................ $14.36 $13.08 10.................. 15.04 13.66 11.................. 15.73 14.23 12................... 16.42 14.81 13.................. 17.11 15.38 14.................. 17.80 15.95 15.................. 18.48 16.53 16.................... 19.17 17.10 28 METHOD OF ESTIMATING COSTS The costs of housing are of two kinds - the original capital outlay and the current running expenses. In computing rents it is necessary to ascertain how much capital is required for the acquisition of the site, the erection of the buildings, the payment of interest on the capital invested during construction, i. e., until the building is completed and rented, and the cost of financing the enterprise, including costs of arranging mortgage loans, title search, legal and other expenses. After the building is completed, the current charges will include (a) interest on total capital investment, (b) an annual charge for amortization of the building, (c) taxes, including local taxes on the land (the building being exempted), and federal income tax on the earnings of the building corporation, (d) the actual costs of maintenance and operation. The gross income from the building must be sufficient to cover all of these annual charges, and provide a relatively small surplus allowable under the Housing Law, as a safeguard against unforeseen contingencies. CAPITAL COSTS Land Cost has been taken arbitrarily from $1 to $15 per square foot at intervals of $1 and the number of blocks falling within these price groups are shown in Table I. Building Cost is estimated at 45 cents a cubic foot. This figure is based on actual costs of constructing the M'etropolitan Life Insurance Company apartments in Queens corrected by the change in price of building materials and wages, with allowance for differences of one foot in room height. The estimated cubage cost has also been compared with estimates of builders in similar types of construction. Financing Charges are estimated at 1.25 per cent of the mortgage on the basis of current experience and practice. The financing charges include cost of arranging loans, title search, legal and incidental expenses. Carrying Charges during Construction are assumed to operate for a year during which interest will apply on the equity in the full amount of 6 per cent, with interest on the mortgage at 5 per cent for one-half year covering the average term the total amount of borrowed money will be employed, and real estate taxes (site only) for one year at 2.71 per cent, the current assessment rate in Manhattan. 29 ANNUAL CHARGES Interest is computed at 5.34 per cent of total capital cost. This figure is the average of the limited 6 per cent interest charge on the equity, represented by stock or bonds of the limited dividend company and the maximum 5 per cent interest charge permissible under the law for money borrowed on mortgage. This average interest charge may be reduced by the issuance of bonds of the corporation bearing interest at 5.50 in exchange for 6 per cent stock. Under the law such bonds are exempt from taxation by the State. Taxes include the annual local tax on land only and federal income tax. In the computations of the Board, the current New York City tax rate of 2.71 per cent has been applied to the total estimated site cost, thereby providing a considerable margin against possible increase in either the assessed value or the assessment rate. Federal income taxes amounting to 12.5 per cent of the net earnings of the building company are equal to one-quarter of 1 per cent of the total capital cost of the project and are computed at that rate. Amortization is arbitrarily fixed at 1.50 per cent of the total capital costs. An annual charge of 1.50 per cent of the total capital costs will amortize two-thirds of the total investment in twenty-five years. Thereafter this annual charge may be applied to reduction of monthly room rents. Maintenance Costs are estimated at twenty cents per square foot of total floor area, including cellar. This figure represents a liberal estimate based on average experience in operating non-elevator housing projects in New York City, including the Metropolitan Life Insurance Company buildings in Queens, the City IHousing Company's dwellings and several which have operated continuously for as much as twenty years. Translated to a cost per room basis the average maintenance charge approximates $3 per room per month. VAcANCIES Vacancies have been estimated as reducing gross income by 3 per cent. This allowance is larger than the experience of the City and Suburban Homes Company or the Metropolitan Life Insurance Company would justify. Their experience has shown them to be negligible. There have been no vacancies in the Metropolitan Life Insurance buildings in Queens since they were first opened in 1922. Mr. Walter Stabler, comptroller of the company has advised the Board that there is at all times an applicant's waiting list of over 2,000 for apartments in their buildings. The experience of these limited dividend companies may be accepted as normal for apartments in which the rent charged is limited, either by limitation of dividends as in the case of the City and Suburban Homes Company or by statute as in the 30 case of the Metropolitan Life Insurance Company. Buildings erected under the terms of the State Housing Law will incorporate both of these, features. However, in buildings erected by commercial enterprise and renting at current market rates there is a normal margin of vacancies variously estimated. as ranging from 5 to 10 per cent. Current practice justifies a vacancy allowance of 5 per cent for this type of building. In estimating rents in projects built under the State Housing Law by limited dividend companies, the Board has arbitrarily added an allowance for vacancies despite the experience of the existing companies cited, believing that sa~fety lies in anticipating all possible contingencies. The 3 per cent allowance f or vacancies serves to reduce the estimated income from the buildings by that amouant and correspondingly increases the minimum es~timated rents required per room per month. In inspecting the estimated room rents in Table III this allowance should be borne in mind as a factor which may apply in a lesser degree or not at all. 31 The data contained in the foregoing report represents but a small part of the material gathered by the Board. All of this material is now available, including detailed cost estimates of land and buildings applicable to any suitable block in New York City. The law affords a practicable method of abolishing the worst housing in. congested areas and of substituting for it sanitary, healthful dwellings adequate to the mainte-nance of decent family life. The Board is confident that housing projects can now be undertaken on a large scale. To those interested in the reconstruction of the tenement house areas of New York and other cities of the State, the Board offers its assistance. THE UNIVERSITY OF MICHIGAN DATE DUE A ROG1 t () 910 I I UNIVERSITY OF MICH4IGAN 39015 01326 9090