In such condition the constitution of the building cannot be expected to withstand, any more than can that of a man or a garment, the stress of existence in the same manner as when it commenced its career.

Therefore we may frequently find, in the arrival of a certain extent of physical deterioration, the direct cause of financial depreciation, and by analyzing the former may be able to define or confirm a proper period of provision for both.

The determination of a rate of physical depreciation has occupied the attention of many owners of property, and is commonly dealt with by some empirical allowance, such as is represented by a flat annual allowance of a certain percentage of, or deduction from, the original value. Such a percentage may or may not be correct. The physical aging of a building depends upon the excellence of its original construction, just as much as the substantial health, or, as we call it, the "constitution," of a man may enable him to postpone to a certain extent the effects of the progress of age.

This subject has taken on a new and insistent character since the establishment of the income tax. Depreciation and obsolescence are officially recognized and are allowed to be considered in the computation of income tax. Additional observations on the subject of obsolescence are to be found in "Power for Profit," pages 142-5.

A building is, however, a composite structure, all the elements in which are not of the same character and do not possess the same age-resisting quality. Inert materials, such as brick, terra-cotta, and concrete, are of a longer-lived character than those with which they are combined in structures, such as worked stones, wood, and metals.

Much confidence has been from time to time expressed in the durability of steel buried in brick or cement; but its real life, even if the most optimistic view be adopted, is modified by that of other elements combined with it, or entering into the structure which it supports. The frame of a steel cage or of a reinforced concrete structure may exceed in durability the exterior shell of the building, and certainly exceeds the life of the interior trim or the roof, and of many other less durable parts; but its eventual fate is parallel to that of a man whose skeleton is in excellent shape, when his demise is brought about by some cause affecting other and less stable elements in his composition.

Thus, some of the diverse views expressed on this general subject may be due to the consideration of a single feature to the exclusion of others, or to consideration only of one or more elements in a combined or compound structure.

Some attempts have been made to assign a life-period to structures proportioned upon the character of their usage, but such classifications, as a rule, have really been based upon considerations affecting the economic depreciation of the structure, and this method may fail if it does not take into account also the character of the construction of the building; in other words, the mere fact that a building is occupied for one form of tenancy or another does not in itself decide the length of its existence, but the period of its effective life may be very largely dependent upon its ability to withstand the stress of usage, and

I Physical Deterioration 18

"Buildings only temporarily enjoy benefits of light and air derived from their location among smaller neighbors"

Depreciation of the Value of Buildings if suitably sound in material and construction for the purpose of its occupation, then it may be reasonably assumed that its physical life will extend its efficient condition.

A step further in this direction is the view advanced by the author of "Principles of City Land Values," Mr. Richard M. Hurd, who assigns a duration of life to buildings of certain characters in proportion to the cheapness or to the excellence of their general construction, with modifying reference to their general usage. This apportionment is shown in the following table, to which has been added the column of the rate of annual sinking-fund recommended by that authority, with the term of years within which that sinking-fund will mature at 3% compound interest, which brings the real limitation of all buildings in this classification within a period of fifty years.

Classification Of Depreciation Deduced From R. M. Hurd's Assignments Of Life

Construction

Occupancy

Term of life in years

Rate of fund proposed

Termof sinking fund @ 3%, in years

Cheap frame

Tenements

10-15

I0-5

9-16

Cheap frame

Residences

25-30

3-2

23-31

Better-class frame

Residences

50-75

2-1

31-47

Cheap brick

Tenements

25-30

3-2

23-31

Cheap brick

Residences

35-50

2-1

31-47

Cheap brick

Office buildings

25-30

3-2

23-31

Better-class brick

Residences

50-75

1 1/2-1

37-47

Good brick or stone

Office buildings

75-100

I

47

Note: Sinking-funds bring all the above within 47 years.

This apportionment is based on a shrewd analysis of, and a practical acquaintance with, the relative effects of good and poor materials and workmanship in prolonging or shortening the physical life of a building. Such a method is, however, not quite determinate, because the percentages of original values suggested to be annually laid aside for the amortization of the cost of the property do not agree with the spaces of time allotted, though they do agree in a conservative limitation of the economic existence of each class of structure; and the classification of buildings by their character of construction is reasonable, in view of the general practice of building to a certain standard for certain characters of tenancy and accompanying-rates of rental.

Such a classification, however, accepts the building as a whole, or unit of equal character of permanency throughout, or at best limits the life by an assumption that the life of all parts is alike and of the length assigned.

The essential feature in defining a method for arriving at the period of physical existence appears to be the segregation of the elements which compose the building, the assignment to each of a reasonably effective existence, and the ascertainment, by a comparison of either the extent or the value of each element, of an average life of the whole combination.