The economic as well as the physical depreciation of buildings involves the deterioration of their equipments or mechanical appliances, which to-day form no small part of their first cost, and constitute some of the largest items of expenditure in their operation.
The effect is felt in fixed apparatus and in motive appliances, but the latter are subject to more rapid effects. With regard to this part of modern buildings, a personal occupation during a third of a century has afforded the means of observation of the progress of economic deterioration in both classes of apparatus. While physical deterioration of equipments has usually received consideration, the subject of depreciation in economic value has received less attention, with unsatisfactory results which have-adversely affected some building investments. If no fund is regularly apportioned or laid aside for the purpose of replacement of apparatus on reaching the inefficient or uneconomic condition, the day of reconstitution or replacement is unduly delayed, and costs of operation become excessive.
Many instances of this nature could be cited and may to-day be observed; one or two must here suffice.
A large office building constructed twelve years ago was equipped with elevators of a type which at that time was advocated as of the highest known efficiency. A considerable amount over and above the cost of other then applicable forms was paid for these appliances. From the first they proved expensive in physical upkeep, and this cost has advanced with age at an increasing ratio, which is provided for by the usual methods. But the property has suffered also by their ineffective service, and is to-day operated at an increasing cost by reason of growing inefficiency of the machines. The result is that the building's renting credit has suffered, and rentals are not what its position and importance would appear to-day to justify. Had a sinking-fund been established at the time of installation, money would have been in hand toward the replacement of the apparatus with up-to-date appliances.
Since the foregoing was written electric elevators of effective and economic type were installed, affording a more efficient service. A direct increase resulted in the rentals of the building which covered the entire cost of elevator reconstruction in less than two years. The subject of adequate elevator service and the economic proportioning of elevator installations is laid down in detail in "Elevator Service."
"The vast ramification of piping buried within the construction of modern buildings"
Depreciation of Mechanical Equipments and Power Plants
The deterioration, both physical and economic, of fixed equipment in buildings, which largely consists of piping systems, is an element which has not come into much notice, as the multiplication of services provided by their means is of comparatively recent introduction. But it is a fact that the growth of the uses and demands for pipe systems has been accompanied by a radical reduction in their permanency, for the material of which much of the vast ramification of piping is composed, and which has been buried within the construction of modern buildings, is not of the substantial character which was at one time obtainable. As an instance may be cited the experience of one large modern hotel, in which a considerable proportion of the sanitary piping has been recently replaced under difficult and expensive conditions.
Remodeling operations in a number of buildings have afforded opportunities of similar observations.
The proportion of cost which the modern equipment bears to the total cost of a building varies with the elaborateness of each, but may be expected to involve not less than from 9 to 15% of the whole cost of the structure when unaccompanied by power machinery, and when the latter is included, to involve from 16 to 26% of the total. The economic deterioration of these appliances and apparatus is more rapid than in the case of the building they occupy, and may be greatly accelerated by maldesign or poor construction.
In allotting the periods of effective or economic existence to such equipments, the results of actual experience and observation again must be the guide, reinforced by knowledge of the extent of usage and the character of their operation.
The results of such observations are embodied in Table G, in which the arrangement of motive apparatus is in the order of rapidity of operation, a feature which has a greater effect on physical and economic deterioration than mere continuity of operation. It is needless to add to the table the effect of cheapness or poverty of construction in every class included in the list.
From the table the conclusion may be reached that the average economic life of fixed equipment is about one half the average effective life of the buildings it occupies, which agrees with many observable conditions. In other words, the fixed equipment requires reconstitution to an efficient point at least once during the effective life of a building, unless the rate of general deterioration of the whole is to be accelerated, or, otherwise stated, if the equipment be not brought "up to date" at least once during the effective life of the building, the general life of the investment is reduced.
Here again the reader must be reminded that the mere length of existence of such appliances is not the question. There are to-day in existence mechanisms which have been in operation of a certain sort for a century, a life which may by some surrounding circumstances be even further prolonged. But the effective earning existence of all apparatus is a different matter, and in the case of appliances installed in buildings operated for profit, the results of ineffective service may be and are much greater than mere mechanical inefficiency would represent under other conditions.