Good housing that pays /

by Fullerton L. Waldo

In 1903 the Association bought as agent two four-story brick houses about half occupied by a low class of negroes. Everything within and without was as bad as it could be. The houses had been converted from private residences into tenements without the knowledge of the city authorities. Behind the larger houses were six of the little “one, two, three” houses, all served by one hydrant. The owners had relied entirely on an agent who cared for nothing but the rents. When at last they saw what they had on their hands they were horrified, and parted with it for a lower price than they had named at first—$4,870.26. The alterations and repairs came to $3,214.06. The ground rent was $1,700. The insurance was $45.00. Five per cent. commission to the Association for making repairs added $160.70, giving a total cost of $9,990.02.

Now let us see what the Association got out of it, after putting in toilet facilities, skylights and windows, repairing roofs and rain conductors, plastering the walls and painting the woodwork, providing fire-escapes and making all minor repairs. In the larger houses the weekly rents were 78 cents per room, and in the smaller 55 cents per room, or $1.65 for the house.

The rents in the first year, 1904, were $1,210.95. Taxes were $126.21; water rents, $41.50; repairs, $174.37; 7½ per cent. commission to the Association, $90.80. This gave a balance to the owner of $778.07, or a net return of 7.7 per cent. on the investment.

In the year following the rents were $1,203.55, and the balance to the owner was $822.81, or 8.2 per cent. net on the investment.

The Association does not expect to show a return greater than 4 per cent.; it does not promise even this. It finds it advisable in some cases to withhold a return for a time and turn back what profits there may be into the improvement of the property. This has been done by the express desire of the owners in certain instances. A temporary stringency of the market and the high cost of building materials or of labor are conditions that are instantly reflected in the balance sheet of an organization traveling on so close a margin. But prudent husbandry has made it possible to show that while the return in exceptional instances has fallen below four per cent. it has frequently risen to double or nearly double that figure. We have seen that on the League Street houses in the Second Ward the return soon after occupation was 7.5 per cent. per annum, and these were houses in an exceedingly dilapidated condition. The North Third Street property from which the hundreds of barrels of filth were taken showed a return of six per cent. in the first year.

The total income of the Association for 1916 was $26,496.23. From rentals there accrued $18,834.23; the agency commissions totalled $3,792.84; the dividend on Model Homes Company stock was $1,400.00; commissions on new construction and renovation planned and supervised for other owners amounted to $2,469.16. As the expenses of operation came to $17,799.26, the net earnings for the year were $8,696.97. The dividend of 4 per cent. payable February 1, 1917 left a small balance of $13.26 to add to the outstanding surplus of $15,973.01,—a surplus chiefly created by gifts and bequests to the Association.

It should be noted that the above showing is made in spite of certain adverse circumstances. Materials and labor had risen in price. The sum of $896.40 was charged against the year’s earnings for repair work undertaken in cooperation with the Emergency Aid Committee. A capital stock tax of one-half of one per cent., collected on the entire issued capital, covered a period of 14 months and amounted to very nearly $1,200. Under such conditions as these it would have been impossible to maintain the four per cent. dividend without the commissions earned on the planning and supervision of new construction and initial renovation of agency properties, as well as the customary agency fees. There is no doubt that the Association, which is very distinctly a philanthropic institution to which the business administration is incidental, should be relieved of the heavy burden of the capital stock tax. The dividends the Association periodically declares are paid to attract investors in dwellings for the poor. They are not earned for the sake of enabling those who own small houses to amass a fortune.

Such work as that of the Octavia Hill Association brings returns that are beyond the immediate cash appraisal, and creates a satisfaction deeper than any that has to do with the dollar-sign. In scores of American cities that are now planning good homes at low rates for earners of modest wages, made necessary by the rapid expansion of industrial interests, it is realized that it is fundamental to civic prosperity, as well as to individual felicity, to give the people who are not rich the fullest measure of comfort and happiness procurable for what they are able to pay. The public is learning day by day what it has a right to expect, and is finding out that the corruption of politics, while pretending to confer a benefit, often perpetrates the rankest fraud. The taxpayer, intelligently informed, is demanding the worth of his contribution to the city treasury. The children in school are acquiring that salutary discontent with things as they are and that spirit of intelligent interrogation that are the conditions precedent to human progress. For it is rightly said that asking questions is the beginning of reform.

Such an understanding as that which the Octavia Hill Association promotes between landlord and tenant pays dividends in the supreme pleasure it is to any wise and kind trustee of great wealth to know that his money is easing the burden of living for the humble toiler. The absentee landlord, content with an agent’s accounting, who does not care to take the trouble to see who occupies his houses and what kind of houses are occupied, can never realize the cordial satisfaction that one who takes an intimate personal interest in his property experiences.

The investment is in so much more than bricks and mortar, concrete and cast iron. It is an investment in human lives, and it underwrites the welfare of the city, the country, the world in the age to come by assuring the health and happiness of the unborn. If he who makes two blades of grass grow where one grew before is a benefactor, then what is he who tears down a ramshackle tenement and rears in its place such a house as the Casa Ravello, where many families enjoy the privileges of privacy and individuality, or a group of houses such as those in the Richmond district, where the children have abundant play room and each occupant controls half his house, or a small home for one family of which so many examples are entered on the books of the Association in various localities and at varying prices, all within a modest range?