This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
It is practicable to determine with substantial accuracy the number of square feet of floor surface on each floor and the number of floors, because the size of a building can be ascertained by measurement or from the building records. In the case of many buildings, the size is almost unvarying for the class to which they belong. There are, in fact, comparatively few classes of buildings, and it will be found easy to determine accurate factors of cost for each class. For example, in the City of New York office buildings are rarely to be found to exceed $8 per square foot of floor surface, and tenements built under the new law, six stories high, will not vary very much from $1.40 per square foot of floor surface. In determining these factors it is convenient to include as part of the building area the area of interior courts and wells, which are generally uniform for each class of buildings. In the case of an office building, for example, it is usually the fact that all of the land is covered by the building that can be covered, and the entire area of the lot may be regarded as the area of a single floor. The amount of the factor is, of course, fixed in accordance with the method determining the area.
In the case of a tenement house built under the present tenement house law in New York, large interior courts must be left open, but it is convenient to take the extreme depth of the building multiplied by its width as equivalent to the floor area. In using these factors for the value of buildings the assessor has ample opportunity for the exercise of judgment, as the factor will show the cost of reproduction, and a proper reduction must be made for depreciation when the building is old, or for unsuitability when the building is no longer an adequate improvement of the site. In most of our cities population is increasing so rapidly, and business sections press so fast upon residential sections, that the suitable character of the building for the site on which it stands is one of the most important considerations in determining its value. It is no uncommon thing in the City of New York for buildings in perfect repair, which would last for 100 years, to be torn down to make way for more modern structures. Such buildings add little or nothing to the value of the land, and their cost of reproduction is no measure of present value.