A building is a mechanical composite construction of various materials, serving the purpose of shelter for its contents and occupants.

The interior is its utilizable portion. The primary object of its exterior is to resist the ingress of the atmospheric elements, though it is secondarily utilized and extended for decorative, esthetical, or advertising effects. Such additions to the exterior and to the interior are economic only to the extent to which they contribute to induce a higher value to be placed upon the use or occupancy of the structure.

The materials forming the exterior construction or decoration are subject to special physical deterioration, due to exposure to atmospheric action.

A commercial building is one the object of which is to produce, by a rental paid for its occupancy, a return or percentage upon its cost and upon the value of the site which it occupies.

The value of the land or site on which any building is erected may appreciate, but such appreciation is of no present value to the owner unless the building returns an interest upon such increased value; thus any increment in value of land, unaccompanied by proportionate income from the building, is reducible by such a rate of interest upon the increment as would be earned if it were sold and the money invested elsewhere.

The value of the site, unimproved, is that which some purchaser may be willing to place upon it, by reason of its desirability, its local surroundings, or its effect on other structures. It is not mathematically determinable unless improved by a building upon the site, the earnings and life of which decide the actual financial value of the site.

The fundamental form of real estate improvement is a habitable structure of one story occupying the entire area of the site. When the site, by reason of the scarcity of other available land, or by the effect of contiguous developments, becomes so en-, hanced in marketable value as to require a return in the way of interest exceeding the renting capabilities of such a limited structure, it becomes commercially necessary to increase its rentable area by the addition of other stories.

Modern facilities of construction in the direction of height place in the power of a single property-owner the ability to create a disproportionate competition affecting neighboring properties. Whereas, in bygone times one building was customarily or perhaps necessarily of height similar to its neighbors, it may now vastly exceed them, and may introduce into their immediate vicinity a disproportionately large addition to the habitations of the neighborhood, increasing the local competition for tenants, and tending to lower the prevailing rate of rentals, either by directly reducing the rate, or by involving the current rate in the costs of conveniences or inducements offered as part thereof.

While the process of accumulating floor area on one site can, by modern methods, be extended to an almost unlimited height, the addition of height to the structure is accompanied by a relative increase in cost, which involves a progressive relative increase of earning capacity, and acts as an economic restriction.

Comparisons of cost of construction of modern buildings are conveniently based on computation of their cubical contents, and this may then be utilized to compare relative costs. The elements composing the cost are many and varied, yet for any given set of surrounding or local conditions the variation of values relative to height will be found to follow practically similar relations. Thus, if a typical or normal building of a given height be adopted as a standard of comparison, other buildings of similar character, but of greater or less height, will be found to bear a certain proportion in relative cost of construction. Prices of materials and labor may and do rise and fall, but this merely affects the total costs and not the relative costs. In Fig. 1 the relative costs of construction, as regards height, of two classes of building, viz., the business or office building and the loft or light manufacturing building, are plotted from a number of observations of actual expenditures, and the form of the variation shown by the curves indicates a harmonious gradation from a unit of a basic or normal building, which may in the one case be taken as including twelve floors, or a height of 150 feet above the curb, and in the other case eight stories, or a height of 96 feet.

The cost of a certain design of building being ascertained or estimated at the basic height, the result as a total, or by the rate per cubic foot, may be multiplied by the factor given in the curve, for any other height in the diagrams.

The elements which compose this difference of relative cost will be readily perceived to consist of extra material such as steel and foundations, and additional thickness of walls, added to which are additional costs in handling materials as height is extended, and a relative increase of carrying charges on the financial side of the undertaking. Added to this are progressive additions of equipment, such as those involved in elevators, stairways, fire-escapes, and sanitary appliances, and progressive additions to the proportions of heating, water, sanitary, electrical, and other systems of piping and conductors. All these elements render construction relatively more expensive as height is added, so that in the result a cubic foot of business building construction in a building of the basic height of 150 feet will be found to have increased, at double that height, to 1.575 of the basic price.

Fig. 1

Fig. 1

Furthermore, an increase of area by vertical addition involves cumulative expenditures in upkeep, maintenance, and operation, and these tend to increase at an increasing ratio, as compared with the addition to the height.

The addition of height to a building does not necessarily involve a multiplication of tenancies, but usually does so. Any subdivision of tenancy involves the ownership or control in responsibilities not only for the provision, but for the operation of conveniences common to all the inhabitants of the building, the cost of which then becomes a fluctuating element of expenditure and reduces the value of the rentals obtainable.