Page images
PDF
EPUB
[graphic]

127,500 16,000

289, 300

161, 800

1,883
1, 715
. 9, 167
186, 800
173, 760
363, 120
411, 920
15, 750
34, 200
13, 530
15, 566
54, 800
60, 690
600, 904
24, 801
79, 935
112, 617
99, 040
53, 220
198, 838
11, 550

9, 424
97, 020
139, 175
226, 623
203, 900

25, 428
1, 284, 840

96, 950
915, 190
98, 846

5, 126
15, 796
3, 269
4, 050
63, 750
5, 429

National Bank of Washington.

Southwest Branch..
National Capital Bank..
National Savings & Trust Co.

38260_3145

North Capital Savings Bank.
Northeast Savings Bank.
Park Savings Bank.

1207
221

Potomac Savings Bank.
Riggs National Bank.

Farmers & Mechanics Branch.
Dupont Circle.
Eighteenth and Columbia Road Branch.
Fourteenth and Park Road NW
Friendship Branch..

Seventh and I Streets Branch.
Second National Bank.

1333 G Street NW. Branch,
Security Savings & Commercial Bank.

1518 K Street Branch
Seventh Street Savings Bank
Union Trust Co.
United States Savings Bank
Washington Loan & Trust Co.

West End Office
Washington Mechanics Savings Bank.

3401 Connecticut Avenue NW Branch
East Capitol Street Branch

Georgia Avenue Branch
Washington Savings Bank,
Woodridge and Langdon Savings and Commercial

Bank.

919
2897

Total.

1 105.1 per cent.

Mr. RICHARDS. As another illustration, I want to take up our handling of apartments, to show to what details some of these apartments are gone into. The office has lately made a special study of apartment costs, as to every kind of detail. I have here a sample of what it cost to build an apartment of 1,000,000 cubic feet in the year 1914, which was $200,000. The same apartment, thrown into details, and built in 1928, would have cost $370,000, or 80 per cent above.

I have been asked in some cases whether we go by what is shown on the permits as to our valuations. I will say that we pay no attention to the permits, only in a general way, and for this reason.

I am going to submit some cases here, which will illustrate that:

In January, 1928, a permit was taken out for an apartment on lot 24 in square 1972. The number of cubic feet was 900,000, which at 45 cents per cube would be $405,000. A top figure would be $405,000, although the estimate given in the permit was $600,000.

An apartment house built on lots 16 and 17 in square 1879 was begun in May, 1926, and finished in January, 1927. The estimate of cost given this office was $126,000. However, it has 430,000 cubic feet and cost a little over 49 cents a cube, or about $180,000. The estimate in the permit is $225,000.

In square 168, at the southeast corner, an apartment was built in 1927. It has 11 stores and steam heat and outside finish of brick and stone, It cost about $800,000. The estimate for the building alone is $1,100,000 and sold in September, 1927, for less than its estimated cost.

An apartment on Columbia Road, lot 37, square 2535, was begun in April, 1926, and contained 745,000 cubic feet and could not have cost over $350,000. The estimates in the permit is $500,000.

An apartment on Fourteenth Street, lot 802, in square 2696, was built in 1925 and 1926 and contains 450,000 cubic feet. The estimate in the permit is $200,000, although it cost below this figure.

In May, 1926, an apartment was started on lot 14, square 2940, and the estimate in the permit was given as $100,000. In 1928, it sold for $75,000. See appeal in this office.

In October, 1926, a permit was taken out for an apartment on lots 46 and 57 to 61, in square 2971. The estimate in the permit was $160,000, although the land and building sold in 1928 for $117,000. See appeal.

An apartment on lot 78, in square 197, gave an estimate in the permit of $154,000 and sold in 1925 for $124,600.

In square 2541, lot 806, the estimate in the permit is for $307,000. The property was traded in 1926 and is for sale for $300,000. See appeal.

În square 67, lot 801, an estimate in the permit is $100,000, while the land and improvements sold in 1927 for that amount.

In square 2549, lot 856, a permit was taken out in August, 1925, for $150,000 and traded in 1926, and is now for sale for $125,000. See appeal.

In the year 1918 or 1919, before things commenced to jump so much, I examined the sales then coming on of about 25 or 30 apartments. At that time we were assessing at two-thirds value. Those sales were in 1916, 1917, and 1918, before the jumps began. The total full value then indicated was $2,420,000, and the total sales

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$2,426,000. The gross rental was $329,000, indicating that they were selling at seven times the gross rental. After the jumps began there were a series of jumps in the rentals of the apartments. Those we paid some little attention to, but we raised those apartments about 40 per cent, where the jumps in the rentals were about 60 per cent, and I judge some of those rentals will drop to nearly our basis of valuation.

I have here a series of apartments that were examined as to their earning capacity, and I find that in about $10,000,000 of valuation, about 20 apartments, they had a rental of $1,500,000, an expense of $787,000, and net earnings of $725,000, or, on the assessed valuation, they were paying 7 per cent. If 2 per cent be allowed for depreciation that will only give you about 5 per cent as the real earning capacity of the apartment.

I have here as a last illustration in regard to apartments, as a means of arriving at the potential earning of apartments, by working out its value and then working out its expenses, another tabulation. I found in most apartments where they had not come too close to the high-class property that the lot is worth about one-fifth of the value of the building. In other words, if the land value is $80,000, the building value $400,000, there is probably tied up with it a 20 per cent overhead, so that the total value of the building would be about $560,000.

In the expenses there are about 10 items of expense that can not very well be sidetracked by the best sort of management. There are a certain number of tons of coal to be gotten; second, there is janitor help; third, elevator and telephone operators; fourth, current and light; fifth, taxes; sixth, insurance, about $2.50 per thousand; seventh; water rent; eighth, commission; ninth, repairs and papering, and tenth, miscellaneous, including loss of rent.

When the expenses are worked out and the earning capacity worked out and the potential rental gotten, the two amounts that make up the potential rental are very nearly the same, that is, 50–50. In other words, about one-half the potential rental comes in the way of earning, without allowing any depreciation on the property at all.

(The statements referred to are as follows:) Real-estate earnings-Comparative figures of sales, values, contents, and gross rents

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66. 81. 97 109. 109 110. 120 151 151 155. 156. 163 205. 208. 208. 214. 218 247 280. 283 313.

70 83 82 48 48 20

160,000 302, 500 216, 700 800,000 317,740 112, 800 154, 300 195, 700 113, 110 102, 200 190,000 300,000 880,000 235, 000 235,000 375,000 526,000 238,000

$6, 180
10, 974
10, 920
21,018
11, 434
2, 100
5, 700
5,874
3, 420
2,000
7, 464
17, 190
27, 720
8,562
8,856
21,828
21, 030
9,012
1, 584
11, 556
5, 448

$39, 828 62, 571 67, 926 163, 023 73, 820 19, 437 36, 795 43, 980 26, 700 17, 624 49, 563 114, 540 208, 022 55, 355 55, 356 127, 169 190, 101 76, 953 17, 618 55, 125 44, 034

$36,000 March, 1918.
70,000 September, 1918.
75,000 March, 191%
165, 000 May, 1916.
80,000 April, 1916.
16.000

iiii

3 257 259 331 352

50 61-65

126 124 96 14 59

3 36 L-19

90, 200
301,940
215, 030

.27
. 14
19
14
.18
. 19
20
15
.22
.30
. 20
. 20
. 20
.30
.30

24
.17
. 15
. 16

September, 1916. 40,000 October, 1916. 35,000 August, 1917. 28,000 March, 1918. 14,000 April, 1918. 55,000 March, 1918. 125,000 March, 1919. 190,000 March, 1918 64, 000 January, 1919. 53,000 April, 1918. 143, 000 November, 1917. 200,000 September, 1916. 70,000 August, 1919. 16, 500 March, 1918. 55. 000 March, 1917. 41,000) March, 1918.

iii

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Mr. RICHARDS. As another illustration, I want to take up our handling of apartments, to show to what details some of these a partments are gone into. The office has lately made a special study of apartment costs, as to every kind of detail. I have here a sample of what it cost to build an apartment of 1,000,000 cubic feet in the year 1914, which was $200,000. The same apartment, thrown into details, and built in 1928, would have cost $370,000, or 80 per cent above.

I have been asked in some cases whether we go by what is shown on the permits as to our valuations. I will say that we pay no attention to the permits, only in a general way, and for this reason. I am going to submit some cases here, which will illustrate that:

In January, 1928, a permit was taken out for an apartment on lot 24 in square 1972. The number of cubic feet was 900,000, which at 45 cents per cube would be $405,000. A top figure would be $405,000, although the estimate given in the permit was $600,000.

An apartment house built on lots 16 and 17 in square 1879 was begun in May, 1926, and finished in January, 1927. The estimate of cost given this office was $126,000. However, it has 430,000 cubic feet and cost a little over 49 cents a cube, or about $180,000. The estimate in the permit is $225,000.

In square 168, at the southeast corner, an apartment was built in 1927. It has 11 stores and steam heat and outside finish of brick and stone, It cost about $800,000. The estimate for the building alone is $1,100,000 and sold in September, 1927, for less than its estimated cost.

An apartment on Columbia Road, lot 37, square 2535, was begun in April, 1926, and contained 745,000 cubic feet and could not have cost over $350,000. The estimates in the permit is $500,000.

An apartment on Fourteenth Street, lot 802, in square 2696, was built in 1925 and 1926 and contains 450,000 cubic feet. The estimate in the permit is $200,000, although it cost below this figure.

In May, 1926, an apartment was started on lot 14, square 2940, and the estimate in the permit was given as $100,000. In 1928, it sold for $75,000. See appeal in this office.

In October, 1926, a permit was taken out for an apartment on lots 46 and 57 to 61, in square 2971. The estimate in the permit was $160,000, although the land and building sold in 1928 for $117,000. See appeal.

An apartment on lot 78, in square 197, gave an estimate in the permit of $154,000 and sold in 1925 for $124,600.

In square 2541, lot 806, the estimate in the permit is for $307,000. The property was traded in 1926 and is for sale for $300,000. See appeal.

În square 67, lot 801, an estimate in the permit is $100,000, while the land and improvements sold in 1927 for that amount.

In square 2549, lot 856, a permit was taken out in August, 1925, for $150,000 and traded in 1926, and is now for sale for $125,000. See appeal.

În the year 1918 or 1919, before things commenced to jump so much, I examined the sales then coming on of about 25 or 30 apartments. At that time we were assessing at two-thirds value. Those sales were in 1916, 1917, and 1918, before the jumps began. The total full value then indicated was $2,420,000, and the total sales

$2,426,000. The gross rental was $329,000, indicating that they were selling at seven times the gross rental. After the jumps began there were a series of jumps in the rentals of the apartments. Those we paid some little attention to, but we raised those apartments about 40 per cent, where the jumps in the rentals were about 60 per cent, and I judge some of those rentals will drop to nearly our basis of valuation.

I have here a series of apartments that were examined as to their earning capacity, and I find that in about $10,000,000 of valuation, about 20 apartments, they had a rental of $1,500,000, an expense of $787,000, and net earnings of $725,000, or, on the assessed valuation, they were paying 7 per cent. If 2 per cent be allowed for depreciation

7 that will only give you about 5 per cent as the real earning capacity of the apartment.

I have here as a last illustration in regard to apartments, as a means of arriving at the potential earning of apartments, by working out its value and then working out its expenses, another tabulation. I found in most apartments where they had not come too close to the high-class property that the lot is worth about one-fifth of the value of the building. In other words, if the land value is $80,000, the building value $400,000, there is probably tied up with it a 20 per cent overhead, so that the total value of the building would be about $560,000.

In the expenses there are about 10 items of expense that can not very well be sidetracked by the best sort of management. There are a certain number of tons of coal to be gotten; second, there is janitor help; third, elevator and telephone operators; fourth, current and light; fifth, taxes; sixth, insurance, about $2.50 per thousand; seventh; water rent; eighth, commission; ninth, repairs and papering, and tenth, miscellaneous, including loss of rent.

When the expenses are worked out and the earning capacity worked out and the potential rental gotten, the two amounts that make up the potential rental are very nearly the same, that is, 50-50. In other words, about one-half the potential rental comes in the way of earning, without allowing any depreciation on the property at all.

(The statements referred to are as follows:) Real-estate earningsComparative figures of sales, values, contents, and gross rents

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66. 81 97 109. 109 110. 120. 151 151. 155. 156 103. 205. 208 208 214. 218 247 280 283 313

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160,000 302, 500 216, 700 800,000 317, 740 112, 800 154, 300 195, 700 113, 110 102, 200 190,000 300,000 880,000 235,000 235, 000 375, 000 526, 000 238,000

90, 200 301, 940 215, 030

. 15 .22

$6, 180 $39, 828
10, 974 62, 571
10, 920 67, 926
21,018

163,023
11, 434 73, 820
2, 100 19, 437
5, 700 36, 795
5, 874 43, 980
3, 420 26, 700
2,000

17, 624 7,464 49, 563 17, 190 114, 540 27, 720 208,022 8,562 55, 355 8, 850 55, 356 21,828 1 127, 169 21, 030 190, 101 9,012 76, 953 1, 584 17,618 11. 556 55, 125 5, 448

$36,000 March, 1918.
70,000 September, 1918.
75,000 March, 191%.
165,000 May, 1916.
80,000 April, 1916.
16.000 September, 1916.
40,000 October, 1916.
35, 000 August, 1917.
28,000 March, 1918.
14,000 April, 1918,
55,000 March, 1918.
125,000 March, 1919.
190,000 March, 1918.
64,000 January, 1919.
53,000 April, 1918.
143,000 November, 1917.
200,000 September, 1916.
70.000 August, 1919.
16, 500 March, 1918.
55. 000 March, 1917.
41.000 March, 1918.

.30
. 20
. 20
. 20
.30
30
.24
. 17
. 15
. 16

36

44, 034

L-19

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