It will be seen from an examination of these statistics that the owners of these Manhattan properties are in partnership with the community to a very substantial extent, for upon the net returns the average owner is called upon to share nearly one third of his entire income with the city in the form of taxes, and such are the inequalities that while a more fortunate neighbor may be paying no more than 15% of his income, another may be parting with no less than an amount equal to 40% of the net returns from his property.

A system of public taxation which involves a tenth of the entire earning capacity of a property may or may not be regarded as burdensome, but when it is so unequal as to involve in a similar property double that proportion, it cannot be considered to be based on an entirely satisfactory system of allotment. Nor does its present adjustment appear to much better advantage when regarded from the point of view of comparison with the total invested value, for we find that where one property gets off with a rate of less than 3/4 of 1 % per annum, another of the same class is loaded with three times that rate.

If these buildings may be considered representative of present average conditions in respect of taxation - and there seems no reason to doubt that other instances would confirm them - we find that the annual contribution made by the ownership of such improved properties to the support of the city expenditures varies from 3/4 of 1% up to 2% of the total value, from 10 to 20% of the entire incomes, and from 15 to 40%, or an average of 27%, of the net returns from the investment.

Any system, therefore, which takes no account of the economic deterioration or decreasing earning capacity of any building, but, in spite of these elements, fixes or raises their contribution by empirical assessed valuation, must tend to render some improved real estate unproductive, and therefore unattractive to capital.

It is of course to be conceded that the burden of this taxation is ultimately borne by the lessee, tenant, or rent-payer, who is the real taxpayer. But while that is the case, it also follows that when a point is reached at which the contribution of the property is on an undue scale or is raised beyond that which can be levied upon the occupants, not only the burden of reduced income, but a loss of capitalized value, falls directly upon the property-owner, so that undue increase of assessed value, in the face of the deterioration of a building or depreciation of its rentals, effects a direct reduction of the commercial value of the property, and by such action the State or city indirectly reduces its own credit.

Tenants of buildings, particularly the large part of our population who live in apartments and community business buildings, have a common interest in this subject. Their usual happy-go-lucky view of the matter is to ignore it altogether, or blindly to assert that they are not taxpayers.

As a matter of fact, the majority of rent-paying citizens pay taxes twice over. Of the rentals paid in their homes, from 10 to 17% applies to this purpose, and of the rentals paid for their places of business, from 12 to 20%. This comes more directly to view when the proportion is related to the rental paid, and is also apportioned to the room occupied, as in the accompanying instances from actual circumstances in Manhattan.

If the proportion of the tax to the rent could be uniform, then a. tenant would know just what his or her contribution to the city amounted to; but concealed in the rent is an unequal and often disproportionate share of the general burden.

Taxation Per Occupied Room Per Annum


Per cent of rent

Per room per annum

7-story high-class apartment.......



7-story high-class apartment

l6. 70


8-story modern apartment........



8-story modern apartment........



5-story new-law flats..........



5-story cold-water tenement.......



5-story cold-water tenement........................................






Being somewhat more than one and one half months' rent, sometimes two months' rent.

If this feature were more fully understood, it is probable that a very lively interest would be evinced by tenants in the question whether their share of taxation was on an equality with that of their neighbors, and a more general interest in the matter of taxation charges would be awakened, which might be expected to lead to an understanding of the principle that the building exists for the purpose of establishing the value of the site, and that the earning capacity of buildings is the measure of the commercial value of the land on which they stand, and that, while it may be fulfilling this purpose, the building itself may be and generally is a fluctuating and decreasing quantity, the value of which is not determinable for taxation purposes with positive definiteness.

The relation which expenditures upon fixed charges and those which may be classified as Maintenance and Conveniences bear to the total income obtainable from the building is illustrated by Fig. 14, which in diagrammatic form represents both the highest and lowest observed expenditures for each item of operation as detailed in Table H, from which the limits within which they may be expected to fall are readily visible, and demonstrate the fact that the more economical results are shown by buildings in which the lesser extent of Conveniences is afforded gratuitously to tenants.

Fig. 14

Fig. 14

This indicates that investments in buildings may frequently suffer by reason of burdens laid Upon them, sometimes by competition, sometimes by mistaken ideas as to their necessity, which, in the form of conveniences, are offered gratuitously in order to draw tenants to the buildings. That these conveniences are too often afforded at unreasonable cost, or at the expense of the financial success of the building, will be seen on further examination of the subject.

It is not to be assumed that these and the following remarks are adverse to the introduction of modern improvements or advantages, but to their unconsidered introduction, to the methods of their operation, and to the undue expenditure of capital upon them, regardless of the effect of time upon their value.