Such uncertainty might be expected, in view of the long-continued existence of certain buildings which are within the knowledge of every one, some of which are even to be found in our own country with a recorded history of over two centuries and which are still able to afford some degree of usefulness to their occupants. Such instances naturally tend to the conclusion that if equally excellent methods and solid materials be employed in modern structures, with an equal degree of care during their existence and occupation, at least an equal term of physical existence might be expected, and that therefore the anticipation of any depreciation may be dismissed as being too remote a prospect for necessary consideration or for any financial provision.
The opposite point of view is that of those who are influenced by the short term of existence of many modern buildings under metropolitan conditions, resulting from rapid changes of circumstances and surroundings, and in certain cases from poor character of design or construction, all of which are undoubt-edlv contributory causes to the shortened existence of many buildings.
"The investor in buildings cannot afford entirely to ignore the fact that the isolation of Manhattan is rapidly disappearing"
Depreciation of the Value of Buildings
This diversity of outlook naturally results in the wide divergence of opinion on the general subject to which reference has been made, but on a closer investigation of the matter it would seem that the main considerations of both points of view may be brought into agreement.
Depreciation is a result of one or two causes: either a fall-ing-ofT in the effectiveness of the structure in fulfilling the purpose of its existence, or a decay in its physical constitution. Strictly speaking, the result of the former cause is more properly to be described as depreciation, and that of the latter would be better regarded as deterioration; but as common practice has applied the same term to the result of financial as well as material decay, they may be defined respectively as economic and physical depreciation.
The two elements are admittedly interrelated, yet may better be understood if considered separately.
Economic depreciation is shown very definitely in commercial buildings by reduction in earnings, by inadequacy for designed duty, or by inadaptability to the progress of requirements.
The prospect of economic decline may lack sufficient definite-ness to impel the owner of a building to make provision in anticipation of such a result, but the effects of physical decay are defined causes for the eventual disappearance of value.
Physical decay may always be expected to combine with exterior circumstances to aid in the process of financial decay, since age is in itself a bar to complete desirability and full effectiveness, and a building though in excellent condition, if it be out of fashion, out of date, antiquated, or insignificant, is just as liable to fall behind in the race, or to be neglected in favor of younger rivals, as the still vigorous man or woman similarly circumstanced.
Age is inevitable, and its effects are progressive in all materials, especially in combinations of materials or of appliances.
The effects of age are always in the direction of depreciation, and are only stayed or discounted by more or less radical reconstruction or remodeling'.
The current attentions included under the often misplaced and much misunderstood terms of maintenance, upkeep, and repair are necessary accompaniments of the course of existence of all building materials and mechanical appliances, without which the advance of depreciation would be hastened and decrepitude would be precipitated.
Maintenance is a process of continuous attention to, and supply of, operating necessaries, including solicitous observation of the condition of the object cared for, and corresponding to the protection, shelter, clothing, and food supplied to living beings in order to maintain their functions in operating condition.
Upkeep is a course of partial re-creation involving expenditure of time and money in anticipating causes of decay, of failure, or of possible injury to the object under care, corresponding to the hygienic and recreative methods, often involving considerable expenditures without apparent direct results, which are or should be followed in safeguarding the general health and strength of living beings.
Repair is the course of partial reconstruction, replacement, or renewal of worn or injured portions after the necessity therefor becomes apparent, and, unless brought about by accident, the need for the process is due to the failure or inability of maintenance and of upkeep wholly to arrest the progress of decay.
Deterioration is the physical result of the natural insufficiency of the foregoing processes of maintenance, upkeep, and repair, all of which are dependent on human agencies, wholly to forestall the effects of wear and tear, of age, decay, or accident.
Depreciation is the financial result of the combined effects in a monetary sense of all the foregoing, although it may be, as hereinbefore explained, brought about by exterior causes, just as the health, the vigor, and the energy of a man may be discounted or rendered inoperative by circumstances.
However carefully conducted, the processes of maintenance, upkeep, and repair do not do more than assist the object along toward the eventual period of obsolescence, by avoiding breakdown on the way, or evading premature failure of any part.
But the arrival of that condition is inevitable when the object or combination of objects, its various parts from time to time repaired, replaced, rebuilt, or remodeled, becomes more or less a combination of new and original materials, containing a number of minor elements of weakness, as a garment ever so efficiently yet frequently darned, mended, or patched finally becomes useless, though much of its original material may remain in excellent usable condition.