The Association in its office-building at 613–15 Lombard Street utilizes the first floor for its own purposes, and rents the two upper floors to careful tenants. The repair shop in the basement has been mentioned. All day long the tenants of every race, and condition come to pay the rent or to seek light upon the wide range of personal and social problems indicated in the preceding pages. They are given to feel that the office is their office, and that a deaf ear will never be turned to anyone who really needs and honestly deserves counsel. They are receiving free of charge—though they may be unaware of the fact—a business and a social education. They find the data bearing on their individual cases card-catalogued, and if they should be guilty of evasion, an accurate system of book-keeping will bring them to confusion. No record of a transaction in the business of the Association depends upon haphazard recollection or mere say-so. The office-hours are conducted without fuss or flurry, the floors are spotless, the desks are cleared for action. Waste motion is eliminated, the virtues of thrift and of system are illustrated, and still there is heart and human feeling in the enterprise. It is not possible to visit the headquarters without realizing at once the atmosphere of sincerity and diligence and practical success that surrounds the work. It is philanthropy; and it is business.
V
DOES IT PAY?
Now we come to the question—does it pay? Obviously there are two sides to the answer, one the material, the other the spiritual. Let us consider, in the first place, the actual cash return.
We have already cited the satisfactory financial results in the case of a few typical properties. It is a postulate that those who are looking for the largest possible dividend on an investment without regard to any other consideration will scarcely be satisfied with the 4 per cent. which the Association is paying. The stockholders of the Association and the directors as a rule are glad to realize that their investment is providing good homes for the poor at low cost, and they are content to forego the somewhat higher profits that might accrue if nobody cared how the tenants lived.
A trust company, in behalf of an estate, had charge of a group of small houses erected as model homes for the poor. Under the trust company’s management, the average gross income from these houses for three years was $72 per month and the net income was $14.34 per month. The property came under the control of the Association. During the first two years under the new order the gross income was $148, and the net income was $70. The trust company, far from the scene, sent a clerk or depended on the services of a local real estate agent. Neither personally interested himself in the welfare of a tenant. The Association sent the friendly rent-collector who immediately reported the need of repairs, watched the workmen, stood at all times in the closest personal relation to the living problem of the householder, and obtained good tenants as soon as vacancies occurred, thus reducing to a minimum the losses due to unlets.
We see that under the system of absentee landlordism the net returns were about a fifth of the gross receipts, while under the system of constant personal vigilance the net returns were about one-half of the gross income.
The inherent possibilities of the Association’s system extended to Chambers of Commerce or Boards of Trade or Women’s Clubs are almost infinite. One of the best rent-collectors the Association has had says that the essential things are “to know the value of money and of punctuality, a little housekeeping, a little home-making—the rest will come in the doing.” Collectors of this type, in the employ of the Association, could give invaluable aid as agents to trust companies and other organizations that occupy a fiduciary relation toward the owners of property in the congested areas.
The organization and operation of the Model Homes Company, formed to build the group of houses in the Richmond district, have been described. To show how closely, from long experience, the Association figures on the cost of repairs and other expenses, a leaf may be taken from the account books of the Model Homes Company. These estimates and actual costs are, except as noted, for a year ending November 29, 1916.
| Estimated | Actual | ||
|---|---|---|---|
| Taxes | $ 780.00 | $ 779.97 | |
| Water rents | 382.50 | 382.50 | |
| Repairs & allowances | 675.00 | 327.75 | (11 mos.) |
| Depreciation | 450.00 | 450.00 | |
| Unlets | 302.00 | 138.10 | (11 mos.) |
| Losses | 9.00 | (11 mos.) | |
| Fire Insurance | 30.88 | 30.88 | |
| Liability Insurance | 26.66 | 26.68 | |
| Cost of Collection | 441.75 | 413.60 | (11 mos.) |
| Interest on Mortgages | 1,870.00 | 1,575.36 | (11 mos.) |
Here is another example of the profitable handling of houses that had seen better days.