Evening Star Newspaper, May 4, 1940, Page 27

REAL ESTATE. 2 Depression Bared Excessive Really Taxes, Says Report Found to Exceed Cost Of Capital Investment In a Property ‘When taxes increase to the point “Where they are higher than the cost of the capital investment in a prop- erty—a level already exceeded in thousands of communities—real es- tate is carrying an intolerable bur- den, a report to the Federal Home Loan Bank Board pointed out today. “Property taxes were high prior to 1930, but they did not represent an obstacle to the sale of real estate because real estate had the money to pay for them,” said the report. “Values were increasing and rental income was at a satisfactory level. “But the history of the depression - records a recession in the cost of nearly everything connected with real estate except taxes. These have become an unbearable burden on the ownership of real estate, a depres- sant on its value, a deterrent to its sale and a hazard to its economic stability.” The report was made by F. B. Bourland, former Illinois State man- ager for the Home Owners’ Loan Co1 . and recently assigned by the cororation to a study of the real €s'ite tax problem. Coupled with iis criticism of high taxes was aj condemnation of overvaluation of properties and lack of uniformity in assessments, and a demand for sounder appraisal methods. Uncovered by Depression. The “forced cheerfulness” with which property owners paid high real estate taxes prior to 1930 ob- scured the evil until the depression, according to the report, but that the evil existed is proved by the fact that the H. O. L. C, in its $3,000,- 000,000 refinancing operations, was forced to pay up $230,000,000 in de- linquent taxes for its borrowers— almost as much as it had to make up in delinquent interest. “It does not seem faulty, then,” the report concludes, “to reason that this tax bill was almost equally responsible with other factors for the mounting rate ot foreclosures which precipitated the advent of the H. O. L. C. into the picture in 1933.” ‘The report is featured by numer- ous specific cases on tax inequal- ities. To illustrate the burden placed on real estate, the foliowing assess- | ment of real estate and other prop- erty in an Illinois county is cited: Home. Securities. Cash. ~---$10,000 $10.000 $10.000 500 1250 100 200 20 8 Real value _ Assessed value An;nxfl tax at 8% 1AL b 'I"‘he1 é’;’,}fi%‘knon of this rule in a specific case works out as follows: Assume in 1929 a home valued at $15,000 was incumbered for $10,000. ‘The mortgage has not been reduced and the home is now worth $10,000. ‘The owner is paying interest, taxes and upkeep equal to or in excess of the amount of the current rent level. ‘The value of the owner’s equity has been reduced to nothing, on which his tax is $200. On the mortgage of $10,000 (worth perhaps $8,000), on which the investor is receiving $500 interest, the tax is $20. On $10,000 of real cash in bank the tax is $8. ‘Wisconsin Case Cited. ‘Many other examples are given in the report. In one Wisconsin city, a study of over 150 sales of single- family residences revealed that it takes slightly in excess of three months’ gross rent to pay the an- nual tax on the properties—and in many instances five and six months. Another instance, illustrative of countless cases, dealt with an old home owned by the H. O. L. C. in a city of 40,000 population, rented with difficulty at $65 per month. The assessor’s valuation on this property is $10,500, although the H. O. L. C. has been trying in vain to sell it for $8,500 and now is con- sidering an offer of $7,500. Taxes on the property are $334 per year. An- other property in the same com- munity is assessed at $8550, costs $345 a year in taxes, but the max- imum rent obtainable is $40 a month —a presumption of high land value still being retained by the assessor, although the neighborhood long since has gone into decline. Wide Range Found. Buttressing its claims of lack of uniformity in appraisal and assess- ments, the report cites conditions in many communities. “In one State,” the report says, “it was found that on exactly comparable properties in & $3,250 price range, the gross rent available for each tax dollar varied from $361 in one community to $7.53 in another. By another com- parison, it was found taxes on one property valued at $3500 were $55 per year and on another nearby, valued at $3,000, were $120. The first property rented for $35 a month, the second for $25. This distortion resulted in the owner of the first property getting $7.63 of gross rental for each tax dollar, the second prop- erty owner paying $1 tax for each $2.50 of gross rental.” The report finds that “several notable examples exist today to prove that when real estate boards and enlightened appraisal personnel are employed in either an advisory capacity or in actual valuations, commendable results follow. But, a8 & general matter, the philosophy of assessment must change if the inequalities and systematic over- valuation of real estate that now obtain are to be corrected.” IN OLDE VIRGINIA PRESENTING Plymouth HAVEN The Ultimate in Low- Cost Housing $..9 Down—$20 Month it colony is now open for This quaint open B (are poriray old Plimectn i the days of John Alden and Pris- Pigrims from Washington Getiing o mew 1ana” 1n which 16 and live happily are in- vited to of in_Plymouth T R Aok month 1a-all you need 5o settie TO REACH: Drive ‘miles beyond. Alesangr m’;“m-u- ful Mt. Vernon Blod. Turn right at Wellington. Watch for signs. . THE EVENING STAR, WASHINGTON, D. C, SATURDAY, MAY 4, 1940, BUY SPRING VALLEY DWELLING—Mr. and Mrs. William A, Weeks recently purchased the above home at 3808 Fordham road, Spring Valley, from the W. C. & A. N. Miller Development Co. —Star Staff Photo. Building Costs Easier, But Rents Hold Firm Building costs have recently shown a slightly easier tendency, accord- ing to the Alexander Hamilton Institute. The prices of building materials have tended to weaken, while wages in the building trades have failed to extend their upward movement since the beginning of this year. This has meant the de- velopment of a slightly more favor- able relation between building costs and rents, since rents have held firm. Nevertheless, building costs are still high as compared with rents. The index of building costs in March, on the basis of 1926 as 100, was 1067, while the rent index was only 855. As long as this unfavor- able relationship exists, normal 14th ST. HIGHLANDS 5705 14th St. N.W. Priced to Sell— Spacious home, 6 large bedrooms, 2 baths, breakfast room; recon- ditioned. Beautifully é g L] planted lot, 1-car ga- rage. Convenient to everything. Open Today and Sunday! Realty Associates, Inc. Realtors 1506 K St. N.W. NAt. 1438 % HOMESITES WITH TIVELY PRICED. Chevy Chase Lake over bridge Beach Drive and turn right. our signs. Investment Bldg. Drive out Connecticut Ave. past See building activity will be retarded. Building will continue to be con. fined chiefly to the erection of small residences. additional unfinished walks and large garden house. but here you can—REALLY 729 15th St. SILVER SPRING, MD. 821 Highland Drive Distinctive Masonry Bungalow Lot 86x260 A beautifully wooded site. in a highly restricted community. convenient to schools. stores, churches, transportation and finest suburban shop- ping center: it is individuaily designed. appealing_architecture: center entrance, having huge living room with open fire place, three ex- posures with beautiful view overlooking rea large dining room, master bedroom with bati and open deck living porch off dining room. lari rooms and roughed-in bai 86x200, with towering shade trees. wild flowers. rock Priced as moderat prevailing types of homes having the same 1iving accommodations, garden and lily pond: den or lbrary, kitchen guest room and = on 2nd floor: lot s the general ge th Open All Day Sunday Drive out 16th to circle, rioht on Colesville Rd., past Silver Spring trafiic light to Highland Drive. left to house: or, out Georgia Ave. past Stlver Spring trafic light to Highland Drive and right 3 squares to house. L. T. Gravatte Realtor NA. 0753 to screened porch. OWNERS & DEVELOPERS OF ROCK CREEK HILLS A COUNTRY ESTATE WITH EVERY CONVENIENCE Exhibit Home—9519 WEST STANHOPE ROAD TWO OTHER HOMES COMPLETED —SIX UNDER CONSTRUCTION. 100 FT. FRONTAGE OR MORE ATTRAC- A magnificent home in a setting of beautiful trees— an incomparable suburban environment, close to the center of the city. Eight rooms, three and one-half baths, club room, maiq’s quarters, 2-car garage, Lot containing nearly Y2 acre. CONTINENTAL LIFE INSURANCE CO., INC. New Home With eal Distinction in ROCK CREEK PARK ESTATES 7600 17th STREET N.W. OPEN DAILY AND SUNDAY J. WESLEY BUCHANAN, 1732 K STREET N.W. Acommunity of smart new homes in nearby Montgomery County, Md. NA. 8503 This picturesque home has a perfect setting—a wooded site with 118 feet frontage, in one of the city’s most fashionable residential areas. The home contains 3 bedrooms of master size and three baths, first-floor lavatory with adjoining kavatory, large screened porch at rear with sun deck above, servant’s quarters, 2-car garage, conditioned-air oil heat. ments are the finest money can buy—and decoration is in exquisite taste. To Inwpect: Oxt 16tk St. to Holly St. left one block to Nome. Its appoint- New Real Estate Licensees Listed During the past week the Dis- trict Real Estate Commission issued licenses as real estate salesman to Adrain P. Lyon, 410 Hill Building; Harry L. Best, 925 New York avenue, N.W. Cora O. Woodard, 1417 K street N.W.; James Reilly Moore, 1515 K street N.W.; Louis H. Col- legeman, 1001 New York avenue N.W.; William A. Hill, 1115 I street N.W.; Frank H. Kemon, 1012 Fif- teenth street NNW.; and Samuel J. Henry, 907 Fifteenth street N.W. A business chance broker’s license was issued to J. Ramsey Maxwell, trading as Business Sales Co., 1 Thomas Circle N.W. Business chance salesmen’s licenses were issued to Walter A. Hoffman, 1010 Vermont avenue N.W.: Solomon Goldenberg, 1006 K street NW., and Walter M. Eber- man, 604 F street N.W. Applications for real estate sales- man’s licenses were recelved from Harley P. Evans, 729 Pifteenth street N.W.; Harry C. Webb, 2024 Rhode Island avenue NE.; Dorothy M. Hathcock, 1326 Twenty-ninth street oil heat, full basement. 7733 Alaska Ave. Realtor| . MEtropolifan 1143 you want . . . isn't it? MYRON 11 Mansion Drive This charming Old English home contains 3 delightful bedrooms, master’s bedroom, 23x15; 2 baths, living room, 25x15; large dining room, kitchen and breakfast nook; Open Saturday, Sunday, 1 to 6 P.M. To Reach: Out 16th St., turn right on Colesville Pike thru Silver Spring to Mansion Drive, turn left to home. Roberts E. Latimer. Realtor 3 ROOMS Attractive Living Room, full-size Dining Room, all-steel Kitchen, 2 attractive Bed- rooms, Tile Bath, space for large Recre- ation Room in Basement. value in this area at $29.75 monthly. than 300 families are already living TO REACH: Take a 3 minut St., drive 2 blocks on 34th St. Homes, open daily from 10 till 10. RIVER TERRAGE N.W, and Kenneth F. Hodges, In- vestment building. Applications for business chance salesmen’s licenses were received from Lane Pastor, 1010 Vermont avenue N.W., and Morris Shore, 1426 G street N.W. An application for a business chance broker’s license was received from Joseph H. Parker, 313 Southern building. FIRST-TRUST LOANS Construction loans and permanent long term financing for apart- ment house and busi- ness property develop- ment ®or refinancing. Tyler & Rutherford, Inc. 1512 L St. NA. 0475 D PARK . “?a N B first floor lavatory, 2-car garage, GE. 1270 $4,650. Best TOP VALUE They're sturdy Brick and Masonry, have Poured Con- crete Basements, Slate Roofs, Steel Window Frames, Hardwood Floors, Furred Walls, Rock-Wool Insula- tion, Bronze Screens, Year-Round Air-Conditioning (Oil [Fired)—in fact, everything to save you upkeep expense in years to come. That's the kind of a home Our splendid new Shopping and Parking Center is now under construction. people of River Terrace will now enjoy the facilities of these shops at their very doors—a complete city within the city. More here. Don't gamble on promotional developments. Come here first . . money. River Terrace homes are s0ld COMPLETE . . . ready to live in. They’re honestly built and truthfully advertised. e ride out Benning Road from 15th & H N.E., turn right into development at 34th . to Diz St., turn left, and 2 blocks ahead youw'll find two beautifully furnished Model MONTH PAYS TAXES INSURANCE PRINCIPAL INTEREST 1000 HOMES REAL ESTATE. Here is Value—Easy to Recognize New Semi-Detached Brick Homes Popular North Cleveland Park 3630-3632 Warren St. N.W. 10,750 These homes represent masterpieces of construction, thought- fulness of planning, selectiveness of location and economy of a good livable home. Many Outstanding sFeatures—Come Out and Inspect for Yourself 2 Real Wood-burning Fireplaces Finished Recreation Room 6-Cu.-Ft. 1940 Westinghouse Refrigerator Delco, General Motors Qil Burner Brick Garage with Overhead Doors Real Homes that it will be a pleasure to inspect. See them today or Sunday. Open—Heated—Lighted Today and Daily 2—9 Sunday 10—9 Floyd E. Davis Co. REALTORS NA. 0352 733 12th N.W. Let Us Build It for You See Our Wooded Acreage Homesites If you are like most particular buyers, the search for the perfect ready- built home is almost a hopeless problem. So why net consult with us and let us help you plan, finance and build 2 home of your own design to fit your particular needs and problems—your dream home that you have looked and hoped for for so long. Come and see Rradley Hills Grove —where we have done just this for so many people like yourself Here, in a 350-acre highly restricted, planned subdivision of small country estates, we offer wooded acreage homesites on winding roads in the heart of the country club district in nearby Maryland for as low as 51,650 Drive west (left) on Bradiey Boulevard 31 miles from Wisconsin Ave. to fleld ofice. R. BATES WARREN WIS. 6009 WIS. 3159 6 ROOMS Large Living Room, large Dining Room, ample Kitchen, 3 Bedrooms, Tile Bath, space for large Recreation Room in Base- ment. Only $5,100. $33 Monthly pays Taxes, Insurance, Principal and Interest. IN WASHINGTON Why spend countless hours, of your life commuting to o home miles out of town? You'll find the quiet and charm you're looking for right here IN THE DISTRICT . . . plus every city convenience. There's trolley service, boulevard street lighting, sidewalks, and you'll save money because Taxes, Insurance, Gas and Electricity are lower in Washington. This beautiful English City is RESTRICTED. In addition to all other city conveniences, the . save time and TRANK J. = DAVY (AL JURPHY..