The building of new residences in long-established residence sections tends to increase values, public opinion being apt to concede a new lease of life for possibly thirty or forty years to the old residence district.
When buildings are erected on the outskirts of a city where the. conversion from agricultural land to building land is taking place, the character of the buildings will at first determine the value of the land. Such districts afford highly competitive sites, where the only difference between lots, barring topography, is in transportation facilities, so that building operators can control values in the new territory by their scale of development, as in South Brooklyn. This is always assuming that the speculative buildings shall be utilized at a normal return on the capital invested, which is begging the whole question. It is the business of building operators to know what class of people can be attracted to the new areas, and their success or failure in moving population to occupy the new houses, and in attracting various classes of people, determines the scale of values. From the standpoint that land has no value until there is demand for its utilization, there is a theoretical gain in transforming speculative or anticipated value into actual value, but the future of all outlying land is discounted many years ahead, so that prices may drop after development. The worst that can happen to a suburban tract is that it should be forced on the market before there is a demand for it, the result being that poor people attracted by low prices, will build cheap houses there and create a shabby and repulsive district, which, if large enough, may act as a bar to the city's growth in that direction. There are many cases, of course, where such occupancy is but temporary, as with the shanty settlements on the upper west side in New York, and the negro ownership on residence streets in Washington.
Good planning of light well used for stores. Augusta, Ga.
Good store front. Wide and low windows. Piers covered by showcases. Summit Street, Toledo.
Whether within or without a city, much can be done to force value into land by the erection of handsome buildings, if done on a large scale. It is true that tenants seeking accommodations are compelled to take them where they exist, except that if good tenants want buildings erected on new sites they can always secure them, capital being easily found where income is assured. This vital limitation to a hypothetical monopoly of existing buildings demonstrates again the fact that it is effective demand and not buildings which creates values.
The building which is most suitable to its location may be defined as that one which will for the longest term of years yield the. largest and most certain net return. The time element in this definition eliminates such buildings as a factory in a residence district, or a saloon in a business location, which while yielding a large rent injures the surrounding property. There are cases in rapidly changing sections where the most suitable building is one some years in advance of the time, since the utility of the building yielding the highest present rent will in a few years disappear, necessitating its destruction or reconstruction. Many such cases of discounting the future, though carefully reasoned, have resulted unsuccessfully, owing either to the direction of growth or, equally important, the rate of growth, being misjudged. The community feels its way along a few buildings at a time in one direction or another, watching carefully where anticipated demand is not realized and unsuccessful buildings point a warning. The main principle seems to be that the best neighbors any building can have are buildings similar to itself, business buildings and residences being most keenly responsive to environment, and public buildings, factories, churches, hospitals, transportation terminals, etc., being more independent.