-PRINCIPLES OF

CITY LAND VALUES

/.^vl^>

RICHARD M. HURD

President, The Lawyers' Mortgage Insurance Co.

PUBLISHED BY

THE RECORD AND GUIDE

NEW YORK

^903)

• • • •
• • • • ••

' • • •/ •
• • • •

/^""^^Tf?

r:sRAL

Example of highest type of Improvement of short block front.
A skyscraper on each corner and a low building — controlled by one
or both of the skyscrapers— in the middle, giving a light well above.
Broadway, between Cedar and Liberty Streets.

Principles of City Land Values*

Preface.

When placed in charge of the Mortgage Department of the
U. S. Mortgage & Trust Co. in 1895, the writer searched in vain,
both in England and this country, for books on the science of
city real estate as an aid in judging values. Finding in economic
books merely brief references to city land and elsewhere only
fragmentary articles, the plan arose to outline the theory of the
structure of cities and to state the average scales of land values
produced by different utilities within them.

The material for this study of the structure of cities — includ-
ing their locations, starting points and lines of growth — has
been gathered from a large number of local histories of Ameri-
can cities, old maps, commercial geographies, &c.

The material for the study of average scales of values has
been drawn from the mass of valuations of land and buildings,
rentals and mortgages, obtained in about fifty cities in the
course of the mortgage business of the U. S. Mortgage & Trust
Co. and also from many visits to these cities.

The viewpoint is that of a conservative lender on real estate
and while the examples cited are chiefly from the smaller cities,
it is believed that the principles stated are universal and differ
only in application and in resulting combinations.

Special acknowledgment is due for aid in figuring the struct-
ural and commercial value of buildings and in the preparation
of maps, to Cecil C. Evers, late member of the American Insti-
tute of Architects.

'..' i\ u »

Table of Contents.

CHAPTER I.— General Principles 1

Economic rent the basis of value.— Urban economic rent the
residuum after payment of all charges and interest on build-
ings.— Intrinsic vs. exchange value.— Utility precedes value
in city land.— Ground rents^ based on social service of loca-
tions.— Structure of cities controlled by definite laws.— Cities
originate at point of contact with outer world, and grow in
line of least resistance or greatest attraction or their result-
ant—Central or axial Growth.— Influence of buildings.— Final
basis, psychological.

CHAPTER n.— Forces Creating Cities 19

Defence against enemies.— Commerce. — Manufacture. — Political
forces.— Social forces, i.e., culture, education, art, fashion,
amusfements.— All forces intermingled in the larger cities.—
Final basis, energy, enterprise and intellect of people.

CHAPTER III.— Locations of bities 22

Situations for defence originally most important.— Later trade
routes located by topography create commercial cities, where
break in transportation occurs. — In manufacturing, extractive
Industries follow raw materials, and cheap power, and later
seek the largest cities for labor supply, home markets and
cheap transportation.— Political locations compromises.— ETx-
act starting points analyzed. — Topographical influences most
compelling.

CHAPTER IV.— Ground Plan of Cities 33

First influence consists of topographical faults, i.e., water sur-
faces or sharp variations from levels.— Characteristics of
platted cities, straight streets at right angles, permitting
free movement throughout.— Characteristics of haphazard
growth, irregular tangle of crooked and narrow streets pre-
venting quick access to business center.— Some early plats
attempt to forestall later needs and some to determine cen-
ter of city.— Normal sizes of streets, alleys, blocks and lots:
percentage of public and private land.— Unit from which plat
built up.

CHAPTER v.— Directions of Growth 56

External influences.— First lines of growth of waterfront city
parallel to water front; of inland town, along intersecting
turnpikes and of railroad town, away from railroad station
along principal turnpike.— Contest between axial and central
growth.— Normal city star-shaped.— Framework of cities laid
down by water courses, turnpikes and railroads.— Influence of
public buildings and exchanges.— Continuity the vital feature.

vii

CHAPTER VI.— Distribution of Utilities .75

As city evolves, continual specialization in business and dif-
ferentiation in social grades.— Classification of utilities and lo-
cations sought.— Distribution of business utilities, economic,
of residence values, social.— Movement of point of highest value.
— Direction and rate.

CHAPTER VH.— Currents of Travel 89

Regularity of daily travel the basis of its effect on city struc-
ture.— Chief daily movements between residence and business.
—Shopping habits of various classes— Retail stores chiefly
located by currents of travel. — Change of axis of city traffic.
—Fluidity of daily travel.— Street railroads, elevated, under-
ground, bridges, ferries, etc.

CHAPTER Vin.— Types of Buildings 97

Suitability to location.— Proportion of cost of building to
value of land.— Effects of skyscrapers.— Table of business
buildings suitable for various locations.— Table of residences
suitable for various locations. — Depreciation and life of build-
ings.— General effects of buildings. — Nuisances and restrictions,

CHAPTER IX.— Rentals and Capitalization Rates 122

Basis of gross business rents, what the property earns for the
tenant; of gross residence rents, what the tenant can afford
to pay.— Deductions from gross rents in properties of different
character, and table of percentages.— Effects on net rents of
fluctuations in gross rents.— Capitalization rates.

CHAPTER X.— Scale of Average Values 133

starting with i.o value in city site, aveiage values of acreage
on outskirts, mechanics' residence lots, better grades of
residence lots and business lots.— Tables of average values
for best business and best residence land in cities of different
sizes and in certain selected cities.

CHAPTER XI.— Summary 145

Review of evolution of value in city land, economic lent
factors of attraction and repulsion.— Value by proximity and
by accessibility.- Reactions of utilities.— Scope of individual
Inquiry. — Problem always complex, change a law of life.—
While conditions change, values will change.— The study of
principles should reduce errors in judgment to a minimum.

Vlll

Principles of City Land Values.

CHAPTER I.

Introductory.

Economic rent, .the basis of value.— Urban economic rent the
residuum after payment of all charges and interest on build-
ings^Intrinsj.c vs. exchange value.— Utility precedes value
in city land.lrGround rents based on social service of loca-
tions. -^rStructure of cities controlled by definite laws<r-Cities
originate at point of contact with outer world, and* grow ih
line of least resistance or greatest attraction or their result-
ant^Central or axial Growth. -^Influence of buildings.— Final ,
basis, psychological. > U

THE basis of agricultural land values has been established
since the time of Ricardo, and throws light on the funda-
mentals of our problem. Value in urban land, as in agricultural
land, is the resultant of e^qnoimc^pr, ground ..xept capitalized^
As first laid down, the theory of agricultural ground rents em-
phasized fertility as a source of rent. Later, when it was noted
that it was not the most fertile lands that were first occupied
but rather those nearest new settlements, accessibility or prox-
imity to cities was recognized as an important factor in creating
agricultural ground rent. In cities, economic rent is based On
superiority of location only, the sole function of city land being
to furnish area on which to erect buildings.

Urban economic rent is ascertained by deducting from the
gross rent of land and building, first, all charges for services,
such as heat, light, elevators, janitors, agents' commission for
collecting rents, etc.; second, taxes, insurance, and repairs, and,
finally, interest on the capital invested in the building. Thig
interest on the cost of the building must exceed the average in-
terest rate by an amount equal to the annual depreciation of the
building, thus providing a sinking fund sufficient to replace the
building at the end of its life. To make a correct showing the
building must be suited to the location and managed with or-
dinary ability, or the apparent economic rent will have little or
no bearing on the value of the land.

2 PRINCIPLES OF CITY LAND VALUES.

The rate of capitalization, turning income into value, is based
on the average interest rates of all investments and fluctuates
with them, although within closer limits and more slowly. Wide
differences occur in the rates of capitalization of rents from land
of different uses in the same city, and smaller differences from
land having the same use in different cities. Where a locality
is advancing in value, capitalization rates are low, where station-
ary they are normal, and where declining they run very high.
After the vital factor of prospective increase or decrease of value,
the lesser factors -are stability of rents, ease of convertibility, —
in part by mortgaging or in whole by selling, — and character of
utilization, as involving the rates of depreciation of different
classes of buildings. In general, the larger the city and the
higher the class of property, the greater the stability of rents,
and ease of convertibility and the lower the rate of capitaliza-
tion. Differences in rent are plainly apparent, but differences
in rates of capitalization are frequently overlooked, although a
very large proportion of value in urban land comes from a low
rate of capitalization. To illustrate, of two pieces of land yield-
ing an economic rent of $10,000 annually, one well located and
improved with ofllce building or retail shop might sell, exclud-
ing the building, on a 4 per cent, basis, or for $250,000; while the
other, covered with cheap tenements, might sell, excluding the
buildings, on a 10 per cent, basis, or for $100,000. The rate of
capitalization is ascertained by figuring backwards, i. e., divid-
ing average prices paid for similar land by the net income,
which shows the interest rate which the community is satisfied
to receive on such investments.

While intrinsic value is correctly derived by capitalizing
ground rent, exchange value may differ widely from it. As ordin-
arily expressed, "value" means exchange value, average sales be-
ing considered the best test of value, and since all ownership lies
subsequent to the date of purchase, the estimated futiu-e pros-
pects form the mastering factor of all exchange values. Al-
though speculation in the sense of assuming large risk for the
chance of large gain, is normally confined to limited sections of
cities where marked changes of utility are taking place, specu-
lation in the sense of an attempt to make money from an in-
crease in the value of property apart from its earnings, is a fac-
tor in all real estate transfers. We may note that real estate spec-
ulation is always for the rise, speculation for the fall or "short"
sales being impossible, owing to the non-representative quality
of land.

Even where properties are fully improved for their present
use, if a new utility arises or is anticipated, since this may m-

EVOLUTION OP A CITY.
Paris in 56 B. C. (Lutece) Site , )n Island chosen for defence.

(Maps printed in 1705.)

EVOLUTION OP A CITY.
Paris in 508 A. D. First walls surrounded buildings on island. Second walls on north sid<
First beginnings of axial growth along each roa<? issuing from the walls.

EVOLUTION OP A CITY.
Paris under Louis the VII. Axial growth outside the walls has developed into centers at road

intersections.

EVOLUTION OP A CITY.

Paris 1180 to 1223. New walls, Include much greater area. Central growth takes place

around the abbeys and churches erected mostly on ihe sites of the old Roman temples.

EVOJL,UTION OP A CITl.

Paris 1367 to 1383. Third wall on north side includes added area. City shows marked
growth on north side within the walls and on the south side, outside the walls.

EVOLUTION OF A CITY.
Paris 1422 to 1580. The Tullleries cause strong axial growth out the Faubourg St. Honor

EVOLUTION OF A CITY.
Paris 1589 to 1643. The hills to the north check extension in ttat direction.

EVOLUTION OP A CITY.

Paris In 1705. The city has spread In all directions. The high land to the north is being cut

up into building tracts.

INTRODUCTORY. 11

volve a different basis of economic rent, capitalization rate and
value, by such estimated difference the exchange value may vary
from the present intrinsic value. If the new utility does not
arrive, prices may advance and recede, while values do not
change, but if the new utility arrives, both prices auu values
will alter their levels.

To be reckoned with under the head of future prospects are
not only local changes of utility, but the rate of growtn of the
city as a whole, the prosperity or depression of the surrounding
section and the success or failure of the industries directly sup-
porting it. Moreover, general financial and economic condi-
tions enter so largely into exchange values, that values are at
times not based on income, or supply and demand, but represent
simply a condition of the public mind.^

First houses in Grand Rapids, Mich. Located on river bank.

The dependence of value in land on economic rent is clearly
seen in the origin of any city, utility in land arising when the
first buildings are erected, but not value in land, as is evi-
denced by the fact that the first settlers are commonly allowed
to build their houses wherever they please and enclose whatever
land they need, as occurred in New York and many other cities.
As a city grows, more remote and hence inferior locations must
be utilized and the difference in desirability between the two
grades produces economic rent in locations of the first grade, but
not in those of the second. As land of a still more remote and
inferior grade comes into use, ground rent is forced still higher
in land of the first grade, arises in land of the second grade, but
not in the third grade, and so on. Any utility may compete for
any location within a city and all land goes to the highest bid-
der, but owing to the limited suitability of certain areas for cer-

12 PRINCIPLES OF CITY LAND VALUES.

tain purposes, some land has but one utility. Whatever com-
petition there is here, will be among those of the same class of
utilization. Where, owing to increase or decrease of various
utilizations, their area and location change, competition among
different classes of utilization arises. Practically all land within
a city earns some economic rent, though it may be small, the
final contrast being with the city's rentless and hence, strictly
speaking, valueless circumference. The prices at which land on
the outskirts of a city is held may represent either the cost of
platting and opening streets, or more frequently the discounting
of future hopes, the chief factor lowering values being the ex-
tent of competing land due to the fact that area increases as the
square of the distance from any given point.

Ft. Wayne, 1794. Site chosen at intersection of small rivers (also
of Indian trails).

An apparent exception to the law of no value in the site when
a city starts, occurs where a city is speculatively undertaken and
the lots sell at high prices in advance of utility. The difference
between price and value is usually demonstrated before many
years, the invariable reaction carrying the prices of lots as far
below their value as they were formerly above it. Thus lots in
Columbus. Ohio, which sold in 1812 at $200 to $300. sold in 1820
at $7 to $20, and more recently there are the collapses in the
early history of the speculatively started towns of West Super-
ior, Wis., Tacoma, Wash., Wichita., Kan., and Sioux City,
la. The attempt to force economic rent into city land seems
to be uniformly unsuccessful, history showing that cities grow
and are not made, and that human beings cannot be uprooted

INTRODUCTORY.

13:

and moved in large numbers and immediately adjust themselves
to the different opportunities of a new environment.

Why are ground rents paid for some locations and not for
others? In general terms the difference in desirability is based
on the social service which they render, or conversely, the sac-
rifice which they save. The land which is most convenient is
first utilized, and that which is less convenient is made of
service in accordance with its diminishing facilities. Since con-
venience means economy in time and effort, the value in any
piece of land will represent the cost saved or the pleasure ob-
tained by its use, as compared with the use of land worth noth-
ing, multiplied by the number and economic quality of the peo-
ple for whom the saving is made. Thus the value of all urban

Eay City, Mich, 1837. Point of origin at first dock.

land ranges from that which least serves the smallest number
of people of the lowest economic quality, up to that which best
serves the largest number of people of the highest economic
quality.

Since value depends on economic rent, and rent on location,
and location on convenience, and convenience on nearness, we
may eliminate the intermediate steps and say < aat value depends
on nearness. The next question is, nearness to what? — which
brings us to the land requirements of different utilities, their dis-
tribution over the city's area and the consequent creation and
distribution of values.

Our problem divides itself into two sides, o^e the study of the
structure of cities, their origin, growth and movements, the-
other, an analysis of the gross rents due to various utilities,.

PRINCIPLES OF CITY LAND VALUES.

their economic rents, rates of capitalization and resulting land
values.

Beginning with the structure of cities, if cities grew at ran-
dom the problem of the creation, distribution and shifting of
land values would be insoluble. A cursory glance reveals simi-
larities among cities, and further investigation demonstrates
that their structural movements, complex and apparently irregu-
lar as they are, respond to definite principles. The basis of this
similarity is that the same factors create all modern cities; com-
merce and manufactures, with political and social forces, being
everywhere operative, the chief difference in influence coming
from variations in their relative power.

Cities originate at their most convenient point of contact with

Marietta, Ohio, 1788.

Laid out as military post with water pro-
tection on two sides.

the outer world and grow in the lines of least resistance or great-
est attraction, or their resultants. The point of contact differs
according to the methods of transportation, whether by water,
by turnpike or by railroad. The forces of attraction and resist-
ance include topography, the underlying material on which city
builders work; external influences, projected into the city by
trade routes; internal influences derived from located utilities,
and finally the reactions and readjustments due to the continual
harmonizing of confiicting elements. The infiuence of topog-
raphy, all-powerful when cities start, is constantly modified by
human labor, hills being cut down, waterfronts extended, and
Bwamps, creeks and low-lands filled in, this, however, not tak-
ing place until the new building sites are worth more than the

INTRODUCTORY.

cost of filling and cutting. The measure of resistance to the
city's growth is here changed from terms of land elevation or
depression, and hence income cost, to terms of investment or
capital cost. The most direct results of topography come from
its control of transportation, the water fronts locating exchange
points for water commerce, and the water grade normally deter-
mining the location of the railroads entering the city. As cities
grow, external influences become constantly of less relative im-
portance, while the original simple utilities develop into a mul-
titude of differentiated and specialized utilities, tending con-
stantly to segregate into definite districts.

Growth in cities consists of movement away from the point of
origin in all directions, except as topographically hindered, this

St. Anthony, 1857, now East Minneapolis, on east side of river.
Minneapolis itself originated as an overflow from St. Anthony, the
starting point being determined by the bridge resting on the islands
shown.

movement being due both to aggregation at the edges and
pressure from the centre^. Central growth takes place both from
the heart of the city and from each subcentre of attraction, and
axial growth pushes into the outlying territory by means of rail-
roads, turnpikes and street railroads. All cities are built up
from these two influences, which vary in quantity, intensity and
quality, the resulting districts overlapping, interpenetrating, >
neutralizing and harmonizing as the pressure of the city's
growth bring them in contact with each other. The fact of vital
interest is that, despite confusion from the intermingling of
utilities, the order of dependence of each definite district on the
other is always the same. Residences are earlv driven to tl^f ^
circumference, while business remains at the centre, and as resi-

16 PRINCIPLES OF CITY LAND VALUES.

dences divide into various social grades, retail shops of corre-
sponding grades follow them, and wholesale shops in turn fol-
low the retailers, while institutions and various mixed utilities
irregularly fill in the intermediate zone, and the banking and
office section remains at the main business centre. Compli-
cating this broad outward movement of zones, axes of traffic
project shops through residence areas, create business subcen-
tres, where they intersect, and change circular cities into star-
shaped cities. Central growth, due to proximity, and axia l
growt h, due to accessibility, are summed up in the static power
of established sections and the dynamic power of their chief
lines of intercommunication.

Turning to the various types of buildings occupied, we note
that buildings are frequently spoken of when it is the utility

Los Angeles in 1857. A Mexican city which has disappeared under
American rebuilding.

carried on within them which is meant. That it is utilities and
not mere buildings which are Influential should be strongly em-
phasized, since the view is commonly held that buildings create
value in land, so that where expensive buildings are erected the
land will be expensive, and where cheap buildings are erected
the land will be cheap. It is easy to disprove such a superficial
view by noting misplaced buildings, such as a business building
in a residence section, a residence in a business section, or an ex-
pensive residence or business building in the midst of cheap ones,
which, even though occupied, probably do not yield enough to pay
taxes. Also the buildings of an entire section may by no means
evidence the value of the land, as note the handsome residences
on the upper west side of New York on cheap land by contrast
with the old brownstone residences on the costly land near Fifth

INTRODUCTORY.

Avenue; or witness any declining business section from which
the tenants are removing, so that values are falling, although
good buildings remain. Nevertheless, it is true that the quick-
est method of arriving at an approximate estimate of the value
of land is by looking at the buildings by which it is covered, for
in general, buildings are properly located. To say, however,
that buildings create land values is to reverse the truth, build-
ings being the servants of the land and of value only as they
fulfil its needs.

Chattanooga, 1863. Population chiefly soldiers. Market Street
from 5th to 8th Streets, shown in center of picture (even then the
principal street).

The continual readjustments in the life of a city reflecting the
total social relations of its inhabitants, lead to the concept of a
city as a living organism. That such a concept is popularly held
is shown by the common phrases, the "heart" of the city, to
represent the business centre, the "arteries" of traflBc to repre-
sent the streets, the 'lungs" of the city to represent the parks,
and to carry the simile further the railroad depots and wharves
may be called the mouths through which the city is fed, the
telephone and telegraph lines its nervous system, while man in

18 PRINCIPLES OF CITY LAND VALUES.

his residence has been likened by Spencer to a particle of
protoplasm surrounding itself with a cell.

One fruitful source of error in studying land values is to
regard the problem as involving only a point of time instead of
a period of time. Any valuation based on present facts alone is
incomplete, consideration of past influences and future pros-
pects being vitally necessary. The life of value in land, whether
the unit taken is a city, a section of a city, or a single lot, bears
a close analogy to all other life in being normally characterized
by a small beginning, gradual growth and increased strength, up
to a point of maximum power, after the attainment of which
comes a longer or shorter decline to a final disappearance. Thus
all value in city land undergoes a continuous evolution from a
state of non-existence through a cycle of changes, to a final dis-
solution, or to a new birth, when the process is repeated on the
same land. One more qualification should be made limiting the
working of economic laws, viz., the individual factor, which may
create or destroy cities, sections within cities, or individual prop-
erties within sections. A striking uniformity exists, however,
in the obedience of individuals to economic laws, self-interest
being a compelling factor, so that individual sections, especially
on the negative or destructive side, may be classed as excep-
tions.

Underneath all economic laws, the final basis of human action
is psychological, so that the last stage of analysis of the prob-
lems of the structure of cities, the distribution of utilities, the
earnings of the buildings which house them, and the land values
resulting therefrom, turn on individual and collective taste and
preference, as shown in social habits and customs.

CHAPTER II.

Forces Crcatingf Cities.'

Defence against enemies.— Commerce— Manufactures.— Political
forces.— Social forces, i.e., culture, education, art, fashion,
amusements.— All forces intermingled in the larger cities. —
Final basis, energy, enterprise and intellect of people.

Defence against enemies, the chief factor in primitive times
creating cities, survived as an influence affecting the first settle-
ments in this country, the early forts on the Atlantic Coast and
in the West drawing population around them in the same way
that the Roman camps on the borders of the Danube and Rhine,
and the Cossack camps in southern Russia started cities. With
the establishment of civilized government the necessity for de-
fence has vanished and population is concentrated either by
commerce or manufactures, or by the less important political
and social factors.

Commerce, or the distribution of commodities, involves their
storage and transfer, and requires warehouses, docks and freight
depots, while the population engaged in this business requires
residences, shops and public buildings. Where the products
handled are of low value, and the handling is a simple trans-
shipment, the result of even a large flow of commodities in
locating population at a point of trans-shipment may be small.
It is when the transfer of goods is accompanied by a breaking
of bulk or by a change of ownership, there being then added the
complex mechanism of commercial exchange performed by im-
porters, exporters, wholesalers, retailers, insurers, brokers and
bankers, that wealth is accumulated and localized, with conse-
quent power to control business for local beneflt.

Manufactures are of constantly increasing importance in city
growth, owing to the development of the factory system and
the advantages of labor supply, transportation, and markets in
the larger cities. Diversifled manufactures are a creation of
the last fifty years, the law of development being an evolution
from a rough working of coarser forms of necessary articles in
the newer sections of a country, through various grades of refin-
ing and specialization, to a great variety of necessaries and
luxuries in the older and more populous sections. A city created

20 PRINCIPLES OF CITY LAND VALUES.

solely by manufactures is a modern development, among such
being Essen, Germany, Pullman, 111., and South Bend, Ind.

Political forces operate to build up a city when it is the seat
of national, state or county government, either legislative, exec-
utive or judicial, or all combined. The administration of govern-
ment as a single factor has created but few cities, Alexandria
furnishing an ancient example, St. Petersburg, Moscow and
Washington later examples, and in this country a few state capi-
tals being arbitrarily started, such as Columbus, O.. Indianapolis,
Ind., and Lincoln, Neb. Nevertheless the rapid growth of Berlin,
London and Vienna has been largely due to the centralizing of
national government in those cities. In many American state

Boston Back Bay about 1845. Since filled in and made the most
fashionable residence section of the city.

capitals, city growth is injured by public attention being diverted
from business to politics.

All other factors creating cities may be broadly classed as
social, cities being centres of culture and furnishing education,
art, fashion, intellectual stimulus and amusements to their trib-
utary country. The social factor operates in direct ratio to the
size of the city, social ambition and opportunities constituting a
steady attracting force through the various grades of cities,
migration being from the farm to the village, from the village
to the town and from the town to the city. Thus the fact that
New York counts among its inhabitants the great majority of
American millionaires is of vital importance in maintaining its
luxurious standard of hotels, shops, theatres, clubs and restau-
rants, which in turn attract the pleasure-seeking travel of this
country. In so far as a city is a market or consuming centre,
business is created and population attracted, cities in some cases
being consuming points only, such as Atlantic City, St. Angus-

FORCES CREATING CITIES. 21

tine, Newport, etc., where wealth is not created, but a city is
required to minister to those distributing wealth.

All cities which have attained any considerable size include in
varying proportions all the above factors of commerce, manu-
factures, political and social forces. In each city the sections
built up by the different factors may be clearly distinguished,
these flourishing or decaying according to the prosperity or de-
cline of their special factors. Thus the railroads, docks ana
warehouses evidence the city's commerce; the factories its in-
dustrial energies; the retail shops the consuming power of the
population; the residence sections the wealth, social grades and
numbers of the citizens; and the buildings of public and semi-
public utility the standard of civilization and civic pride of the
city.

The underlying factors which start all the processes creating
and distributing wealth, are the energy and enterprise of the
people, these being in the last analysis the sole sources of
wealth. Raw materials, waterways, favorable climate and other
natural advantages are only indirectly decisive and always pre-
suppose men to exploit them.

CHAPTER IIL

Location of Cities*

situations for defence originally most Important.— Later trade
routes located by topography create commercial cities, where
break in transportation occurs.— In manufacturing, extractive
Industries follow raw materials, and cheap power, and later
seek the largest cities for labor supply, home markets and
cheap transportation.— Political locations compromises.- ESt-
act starting points analyzed.— Topographical influences most
compelling.

Situations favorable for defence determined the location of
ancient cities, as with the Greek colonies on a promontory or
an island, the Etruscan cities on hill tops, Athens with the
Acropolis, Rome on seven hills, Paris on an island and Lon-
don in the midst of swamps. In modern times the individual
settler locates his cottage to satisfy his first needs for water,
wood, grass, shelter, etc., and small settlements are widely scat-
tered in all available spots. It is largely geographical superi-
ority which renders certain localities capable of satisfying more
extensive demands and lifts small settlements into cities.

Trade routes, the lines of least resistance between the sources
of products and their final markets, have in all ages located
commercial cities at the points where a break in transportation
occurs. Where a traae route traverses an ocean or lake, cities
arise at the harbors which have easy topographical approach
from productive regions and from which markets can be readily
reached. For example, the phenomenal growth of New York
is due to there being but one topograhically easy route from the
West through the Appalachian Range to the Atlantic Coast, con-
centrating the flow of products to New York, aided first by the
Erie Canal and later by the New York Central and other rail-
roads. Where a gulf exists, the trading city is commonly located
at the innermost angle, as with Christiania, Liverpool, Genoa,
Naples, Venice and Hamburg. Where the action of the sea
closes harbors, ancient cities were ruined, as with Ephesus,
Utica, and the coast cities of Asia Minor and northern Africa,
while modern cities retain their harbors by constant dredging.

Where the trade route follows a river, cities arise either near
the mouth where ocean and river navigation meet, as at New
Orleans or Philadelphia, at the head of rivers where river and
crtek navigation meet, as at Albany, Richmond and St. Paul, at

LOCATION OF CITIES.

the confluence of two or more rivers or branches of the same
river, as at St. Louis, Omaha, Mayence, Coblentz, and Cairo, at
the intersection of a river and a canal, as at Richmond, Syra-
cuse, Evansville, and Fort Wayne, at an obstruction in the river
requiring unloading, as formerly at Louisville, or at a marked
bend changing the direction of a river, as at Cincinnati, Kansas
City, Madgebm-g, Toulouse, and Lyons.
A river in forming a natural highway forms also a natural

'^^^^'^I'T'^^^TTTTT?;^'^'

Constantine, North Africa. Typical site of ancient Mediterranean
city on flat-topped hill, chosen for defence.

barrier to intercourse between its two sides, so that facilities for
crossing the river may so concentrate travel as to create a small
trade route and thus a town at the river crossing. For example,
Harrisburg started at a ferry across the Susquehanna River;
Rockford and Reading at fords in the Rock and Schuylkill
Rivers, and Terre Haute at the bridge of the National Pike
across the Wabash River. Deep water in rivers will locate cities,
as with Memphis, Vicksburg, Natchez, Bremen, Rotterdam,
Antwerp, and Havre. New Orleans owes its location to the fact

PRINCIPLES OF CITY LAND VALUES.

that the land on which it was built was a few feet higher than
any river land within many miles of it.

Land trade routes, prior to the time of railroads, created cities
at their intersections, commonly in the centre of great plains, as
with Paris, Vienna, Moscow, Berlin, and Prague. Other points
were where plain and mountain met, requiring a change in trans-
portation, as with Turin, Milan, Augsburg, and Munich. The
old trails from the Missouri River to the West caused the begin-

"--iKr^\ -"'■m

•a

j>^.K,

W-'

'•i

Boston, 1777, showing how nearly the site was an island; site chosen
chiefly for protection against Indians and wolves.

ning of a number of towns as oufltting points, such as Council
Bluffs, St Joseph, and Topeka.

When railroads were invented, they superseded all other land
trade routes, and owing to the greater economy, both in the con-
struction and operation of railroads which follow a water grade,
their influence has in most cases strengthened existing cities
located by water routes. The exceptions to this occur where rail-
roads run contrary to the general topography of the country, as
in the Mississippi Valley, the trade routes now running east and
west and not, as originally anticipated, north and south; where

LOCATION OF CITIES.

mountain barriers are overcome by means of tunnels, such, as
those under the Alps and the Cascades, and where railroads in
process of building have made temporary terminal points, wMch
started cities, as with Worcester and Atlanta.

In manufacturing, the extractive industries locate near raw
materials, lumber mills being built near forests, as in Saginaw,
Bay City, Minneapolis, and Seattle; iron foundries near iron or
coal mines, as in Pittsburg; smelters near gold and silver mines.

mre/t.

Savannah, 1818. Showing line of fortifications, also rice swamps
on either side, which have restrained growth of city to one direction.

as in Denver and San Francisco; salt works near salt wells, as in
Syracuse, and formerly in Lincoln; oil refineries near oil wells,
as in Cleveland; salmon canneries near the waters where salmon
run, as in Portland and Seattle; fruit canneries near orchards, as
in Los Angeles and San Jose; beet sugar factories in or near beet
sugar fields, as in Saginaw and Bay City. The extractive industries
migrate as raw materials are exhausted. Thus the lumber indus-
try has moved from Maine to Michigan, Wisconsin, Minnesota,
and finally the Pacific Coast, and the meat-packing industry
from New York to Buffalo, Indianapolis, Chicago, and finally

PRINCIPLES OP CITY LAND VALUES.

3^^S>''^''

ABIT -WAS

Ajagca aoth, 1749.

4^— Ammafiilaal'E'BoaMt
iJ.- QoArA House and Bazrackt.
iS^TovdJtsr Marline.
!>.— Tarlsh Ciiurctu
Z^Frkat's Houee.

O.— Boyat Qardaos.
9^-lMUTulaal OArtfcn.

ICBHCHCHffl

DETROIT RIVER

Detroit, 1749. Showing old plat and first houses within the
fortifications.

ALLEGH ENY

PLAN or

FORT PITT.

A.. Wtrl Jfufurm:

J. ttockMU ntrt ffM.

SCAIC
ioon too 10

tealt SOC n.ptrintK

Starting point of Pittsburg. Fort at junction of rivers for military
reasons.

LOCATION OF CITIES.

Kansas City, Omaha, and St. Joseph, near the centre of the corn
belt.

Water power, when of sufficient volume and fall and located
in a section of natural resources, has created many cities, such
as Pall River, Lowell, Minneapolis, Spokane, and Schaffhausen.
Also in many cities water power greatly stimulated the early
growth, although steam has since supplanted it, as in Provi-
dence and Philadelphia. The recent development of electric
transmission of water power for long distances is promoting the
growth of Buffalo, Los Angeles, Salt Lake City, Portland, Ore.,
and Seattle.

As industries become more specialized a steady supply of
highly trained labor becomes of greater importance, tending to

First map of Memphis, showing start of city at junction of Wolf
River and Mississippi River.

draw them to the larger cities, but opposed to this is the greater
danger of strikes in large cities, which creates a slight counter
movement towards smaller villages. A further argument for the
larger cities is that they furnish a home market for much of the
product, and that being located on trade routes low transporta-
tion rates are given, the commercial and industrial factors thus
reacting on each other. Climate is a factor to be reckoned with
in the textile industries, cotton and woolen manufactures being
aided by a moist atmosphere. The general tendency of manu-
facturing seems to be, first, to create many small towns, and
later to promote the growth of the larger cities already started
by commerce.

Where politics govern in selecting a city site the location is
ordinarily a compromise. Thus Washington was located half

PRINCIPLES OF CITY LAND VALUES.

way between the north and the south, before the west was de-
veloped, and Columbus and Indianapolis were located at the
geographical centres of their respective states. The influence
of climate in locating cities is shown in such summer resorts as
Newport, Bar Harbor, and Lenox, and such winter resorts as
Los Angeles, St. Augustine, Atlantic City, and Pasadena.

The exact starting point of cities is worth noting, since all
growth consists of movement away from it To say that a city
owes its location to a harbor, to the head of river navigation or
to a fertile inland plain, is somewhat indefinite, since a large

Baltimore as laid out. 1730, and showing present boundaries.

part of the harbor may be neglected and valueless, and the head,
of river navigation and the inland plain may furnish many other
locations apparently equally desirable and yet not utilized. In
the early days when protection was all-important, the fort was
the point of origin, but with commercial cities the starting point
Is the most convenient point of contact with the outer world;
this being a wharf where deep water and a high bank meet, if
transportation Is by water, the intersection of turnpikes
topographically located, if transportation is by wagon, and a
railroad depot placed for the convenient shipping of products, if

LOCATION OF CITIES.

transportation is by rail. With river cities the requirement of
deep water and a high bank, and further, the avoidance of swift
currents, was frequently best met where a creek ran into a river,
the first docks of New York being on the creek where Broad
St. now is; of Philadelphia, where Dock Creek joined the Dela-
ware River; of Toledo, where Swan Creek joined the Maumee
River; of Memphis, where Wolf Creek joined the Mississippi
River, and of Richmond, where Shockoe's Creek joined the
James River. Where steep hills descend close to the water's
edge there are in some instances two starting points for the

Lucca, Italy, in 1870. Example of European city surrounded by
fortifications, tending to concentrated land utilization.

town, one for business buildings at the water's edge and the
other for residences on the hill, as at Richmond, Knoxville, and
Kansas City. At Omaha, owing to variations in the height of
water, the town started about ten blocks back from the water-
front.

Where the first settlers, having in mind a future city, lay out a
plat at the inception of the city, the starting point of the city may
be determined arbitrarily, the central point being a public square
or a public building. Corporate or private ownership is in some
cases suflSciently powerful to alter the location of a city, either

PRINCIPLES OF CITY LAND VALUES.

by forcing it away from the original point of the older settle-
ment, as at West Superior and Tacoma, or by preventing it from
occupying its normal site, as at Houston.

Sometimes the first location of a city is so unsatisfactory that
the entire settlement is moved, as with Akron, O., where the soil
did not hold the water from the power canal for the flour mill.
Hence the mill was moved and the town followed. Also Charles-
ton, S. C, first started on the west bank of the Ashley River, and
Mobile moved in 1710 from 27 Mile Bluff. Small towns have
been bodily moved either to avoid municipal debt or to secure

(D9AI&A &ne \SmSi\S.

&•<« I MXinoo

Osaka and Kobe, Japan. Example of city, back from waterfront with
smaller city serving as a port.

better locations. Recently in the Dakotas several towns were
moved on rollers from six to twelve miles, from the small rivers
on which they were first built to the new extension of the Chi-
cago, Burlington & Quincy R. R. In most cases vested in-
terests, both in the buildings and in the value of the land, are too-
powerful to permit of a wholesale moving, the efforts of inhabit-
ants being aimed towards counteracting any deficiencies of loca-
tion by increased or differently directed labor.

While we may properly speak of cities as having started from
one centre, the largest cities have swallowed up many villages

LOCATION OF CITIES.

and towns, both their own offshoots and independent settle-
ments. Thus New York absorbed Greenwich, Chelsea, Bowery,
Harlem, Brooklyn, Long Island City, etc.; Philadelphia ab-
sorbed Spring Garden, Northern Liberties, Kensington, South-
walk, Moyamensing, etc., and Boston absorbed Roxbury, Dor-
chester, Charleston, Brighton, Bast Boston, South Boston, etc.
The impetus of the chief city is so great as to practically ob-
literate the influence of the smaller towns.

The importance of studying the geographical location of cities
is due to the insight thus obtained into their structure, the dis-
tribution of population conforming to the same principles within

M 8b r e o t 1

Ancient Alexandria. Rectangular plat laid out by the Royal architect.

a city as without. Topography operates in a similar manner,
whether within or without a city, in causing population to flow
along the same levels. Water surfaces, whether within or
without a city, if navigable, facilitate the movement of popula-
tion, and if non-navigable prevent it. The law of continuity is
the same, every city being a link in the chain stretching from
the first settlements in a country to the last, and every growth
within a city a part of the chain of development which first
reaches the city from the outside and continues its life within.
Manufacturing has the same centralizing* effect, whether on a
large scale it creates a city or on a small scale it builds up a dis-

PRINCIPLES OF CITY LAND VALUES.

trict within a city. The small streams of products from the
farm, the forest or the mine flowing together on the way to their
markets, create trade routes, and similarly the inhabitants of a
city, controlled by economic forces and flowing together on their
daily way to their places of business, create traffic streets or city
trade routes. Railroads which create cities at their terminals

OTIS fMORroT)

Modern Alexandria. City shifted onto the former Island of Pharos.
Reversion to irregular plattings.

and, in lesser degree, at their transfer points, have their coun-
terpart in street railroads which draw utilities and values to
their terminals, and, in lesser degree, to their lines and street
intersections. Finally, the law of gravitation, which draws
bodies together in direct proportion to their mass and in in-
verse proportion to their distance, operates similarly in drawing
together two cities or in drawing together two sections within
the same city.

CHAPTER IV.

Ground Plan of Cities.

First influence consists of topographical faults, i.e., water sur-
faces or sharp variations from levels. — Characteristics of
platted cities, straight streets at right angles, permitting
free movement throughout. — Characteristics of haphazard
growth, irregular tangle of crooked and narrow streets pre-
venting quick access to business center. — Some early plats
attempt to forestall later needs and some to determine cen-
ter of city.— Normal sizes of streets, alleys, blocks and lots:
percentage of public and private land. — Unit from which plat
built up.

rhe first step in studying the ground plan of cities is to note
the topographical faults which normally control the shape of
cities, by interfering with their free growth in all directions
from their points of origin. These are of two kinds; water sur-
faces, such as harbors, lakes, rivers, creeks and swamps, or
sharp variations from the normal city level, such as steep hills,
deep hollows and ravines.

Water surfaces may either leave islands on which a city orig-
inates, as with New York and Galveston; promontories at the
mouths of rivers, as with Boston and Portland, Me.; promon-
tories between two rivers, as with Philadelphia and Pittsburg,
or may consist of lakes scattered through the city's site, as with
Minneapolis, Seattle and Grand Rapids; of rivers, as at Fort
Wayne and Dayton; creeks, as at New Haven and Toledo; or
marshes, as at New Orleans and Savannah. The rivers may
have either a straight front, as at Albany, St. Paul and Port-
land, Ore., a curved front leaving a convex site, as at Cincin-
nati, Louisville and Memphis, or may be combined with small
rivers and creeks intersecting the city's site in various ways.
The deep harbors, lakes and rivers cannot be filled in, so that as
far as they extend they furnish an outline for the city. Increas-
ing demand for land, however, may project growth across the
deep water surfaces and form suburban settlements beyond
them. The power of rivers to hold growth on the side where
the city originates depends on their width, on the area and rela-
tive advantages of the sites on the two sides of the river, and .on
speculative enterprise. At St. Louis, New Orleans and Kansas
City, where the river is wide and the land across the river not
attractive, the river forms practically an absolute bar to growth.
At Toledo, Portland, Ore., Cincinnati, Pittsburg and Des

PRINCIPLES OF CITY LAND VALUES.

FMRLmUNT

A MAP

PHILADELPHIA

A.D. 1682.

vBt-ig*

ifiBBBB

DDDDD
DDDD

DBDDiraDDnnCDBDnosgDDDUlJ

HBDDDDDDDDDD

TDnDDDnnnnnmnnn
"iBunnnannDDDisnDC

nnDDnmnnDDDDDD

nmnnrinnnmnnDDnD

Philadelphia, 10582. Old plat shows central square, now the mu-
nicipal center.

Pt«n o« City, thowlng Bulldin

New Orleans, about 1728. Old French city; canal on the west
later became Canal St., and American city built west of it.

GROUND PLAN OF CITIES.

Moines, many bridges connect the two sides and minimize the
deterring effect of the river.

Creeks are of chief importance when their erosion has worn a
deep and wide ravine, the difference in level constituting a bar
to a city's growth ratner than the creek itself. When the creek
is narrow it is frequently covered over and ceases to exert any
influence, as in New York, Richmond, and other cities.

Swamps limit growth, for example preventing Philadelphia
from growing south, and Savannah from growing east and
west. On the other hand. New Orleans is largely built on a

gS2:sDWQ0 "^^Ni^.-^QOODOODODdflDflOQaOQII aODDflOaaOBaa^np tq

nslViilaca-o^t,^-ff€WJ^^^^^^^^^^^^wi iafl 000000080000 dad

.■^jQ QflOflOiia aoo!iaQD{i!ioiH!flaflirDocQt]fl3DaaoiDnooofl^

...r, nnnnnnn « .,.„. 00 00 lIQ Qi QO [1 D D

□ aQQOBOBDQaQODO
DUGOj 10000000

oaaoL Iqoqodqq

oooQoattiaoQCPDD

mmraaQBiQDQffODC'

Qoccal \ '^DnoflQQQiiaaaiiaca

tfOJeo-DpanmaoD] / '"'aQoaaiaaoanca

DQDDODlflOaC<?4''/cf,
3DDO.0OQDr~lQt!L'<7^%^-;
[lODD,Q0(]O OflDD

3ocraat!ool ^od'^

aopDaODDQDOODOaQGDb

coaDooaoaoDoooDQOD

aoaDQQaOQOOflOQOODOCIZA

noDopaDDaDi — Ir
coDOOQaanoi-J
EoanoooooQoi! ^

BQODQQQOaQOD

fcOODOQOOQMD

h DOIDODQG'

^ DOQODDO

Example of platting parallel to irregular water fronts. Baltimore.

swamp, important parts of Washington and Syracuse were for-
merly swamps, and in the lower part of New York the Collect
Pond, Lispenard Meadows, Beekman Swamp, &c., have been
filled in and obliterated.

After a city has spread over the original levels and climbed
some moderate elevations, the demand for land may cause a fill-
ing in of the lower levels. In Boston the Back Ba^ district was
created by filling; in Chicago, after the great fire of 1871, the
city was raised from seven to ten feet; in San Francisco from
Montgomery Street east was formerly mud fiats; and the pro-

PRINCIPLES OF CITY LAND VALUES.

cess of filling in land for business purposes continually goes on
in the majority of water front cities.

The influence of topography may be summarized by saying
that level land attracts business, moderate elevations attract
residences, land below the normal level attracts transportation
lines, and filled-in land is generally used for warehousing, man-
ufacuring and cheap tenements.

The main direction of city growth is usually controlled by to-
pography. For example, the cities at the west end of harbors or
on the west side of rivers grow west, as Boston, San Francisco,
St. Louis, Omaha, Minneapolis; cities on the east side of har-

}»innnno^n[zi[7DanDDSuDSanpDQai ii iQjDDDDciiDDDGkv

JOCZDDDOCIII

IpSq^BS

jpagpt^g

icilDDanDDnDaDi:^!

anDDDnnnDDDDEz:)'

DaDS°°^ocS^nDD Q^[70 DPSLlQS'aD0DDD^ZDP^QDDD

□nanaiiziDDDp;^Trdcz:3Czinnnaa

Q/]raaD^°°2]GDDDD^^^^^^g^l^

□ fla floaat*.

DSDODDDDDDDKSt^^

\ \,'ac=ici]Do >.nnnQq anno □DC'^Dc^'^izziC'j:' '

Example of diagonal avenues superimposed on rectanglar plat-
ting. Washington.

bors or rivers grow east, as Columbus, St. Joseph, Memphis,
Grand Rapids, Seattle, and similarly New York, Philadelphia.
Detroit, New Orleans, Milwaukee, Indianapolis grow north; and
Louisville, Kansas City, Savannah, Houston grow south. The
impression that the points of a compass affect the direction of
city growth Is based on the statement that the majority of Eng-
lish and German cities are growing west, owing to the prevail-
ing west winds which drive away the dense smoke from soft
coal and render the west end of these cities the preferable resi-
dence sections. No such general tendency, however, exists in
this country.
As to their laying out. cities may be divided into two classes,

GROUND PLAN OF CITIES.

those which have grown up without any definite ground plan
and those whose ground plan has been laid out in advance of
growth. The cities which have grown up haphazard exhibit a
tangle of narrow and crooked streets of varying and irregular
size, evolved from cow paths or old trails, whose directions were

Irregular platting in old sections. Rectangular platting in new
sections, especially in Back Bay District, Boston.

originally influenced by trifling obstacles, such as hillocks,
rocks or clumps of trees. These flrst streets left large tracts be-
tween them, which were later pierced by irregular streets or
lanes laid out for the convenience of the owner of the tract, and
without consideration for the general interests of the city.

Where a plat has been laid out in advance, long, straight
streets of even width, at right angles to each other, are found.

38 PRINCIPLES OF CITY LAND VALUES.

leaving rectangular blocks for building sites. The older cities
with marked modern growth, such as Rome and Athens, New
York, Boston and Baltimore, exhibit almost uniformly an old

SAVANNAH RIVER

]

ZD
HI
Z]

nnnnnnnnnnnn

□□□□□nnnn
□□□□□nnnn

CZZ3CZ] wcD c:

CI] cm ^ tz: CZ3 1^ czj o^czicii ^cn
□ CD [ZH [ZD CZI CZDCZD CZD □ □□ □

c=3^i=i(=)^i=i [=iM|c=3c=ia ^^^_ [=11=1 ^[=3 L-X^

nnaanana

ggDnnnnnnn[

□□DDnnnnnn[
HH°Dnnnnnn[

UUlls

ISSI

'°°t!

^BgiDnnnnnnn
z

nnsDDD

DDDD

nnoDDQ
nnDDD

nDDDD

nnnDD

DDDD
DD

□□GB

DDnnnciziL

nnn[

nnni

□ □D

z
zi

Z!
Z]

DDnnnnnnciDnn

nnnnnnnnn
nnnnnnnnn

— I r-|| — II — II — II — II II — 1

Savannah

Plat of Savannah showing unusual percentage of park and street
area. Plan said to have been derived from Bunyan's description
of the Heavenly City.

centre of crooked streets, surrounded by modern rectangular
plats, this change proving the general appreciation of the ad-
vantages of the rectangular method. Some cities, however, have

GROUND PLAN OF CITIES.

never changed to rectangular platting, among them being At-
lanta, Los Angeles, Salem and Lynn.

A number of the older cities originated with a small rectan-
gular plat, surrounded later by rectangular additions, as Phila-
delphia, New Orleans, Cleveland and Cincinnati, while the new-
est cities have generally started with widespread rectangular

/ /

1 — 1 y y 1 — 1 /

First plat of Los Angeles. Lots around Plaza (marked P) given to
settlers; also tracts between irrigating ditch and river, for farming.

platting, as Birmingham, Sioux City, Tacoma and Topeka. An
exceptional instance would be Memphis, starting with a small
rectangular plat, extended later by irregular streets, a rever-
sion recalling the contrast between ancient Alexandria in Egypt
with its rectangular plat, and modern Alexandria with irregular
laying out.

PRINCIPLES OF CITY LAND VALUES.

In waterfront cities with rectangular plats the waterfront is
normally used as a base, whether straight, curving or broken
and irregular, and in inland cities the turnpikes are used as a
base. These plats extend to a greater or less distance accord-
ing to the expectations of the early inhabitants, but finally
reach land held according to the section lines of the U. S. Grov-
ernment survey. This change in the direction of holdings com-
monly changes the direction of the new additions and streets
platted, as in Denver, Seattle and Montgomery.

Another variation in rectangular plats is due to the survival
of old turnpikes in parts of the city subsequently platted. Many
of these old roads are obliterated by platting, but others remain,

QREAT «*1.T tAKt CITT. (Flt.ni lllC Xpnll.

Salt Lake City, about 1860. Large blocks designed for a farming
community.

on account of their convenience for traffic, the important build-
ings upon them and the fact that land titles are often meas-
ured from them, as from Broadway in New York. Of surviving
turnpikes, the most common are those which exist in the sub-
urbs, but have been merged into the rectangular streets before
reaching the heart of the city, as in Chicago, Philadelphia and
Milwaukee. Diagonal turnpikes reaching to the heart of the
city still remain in Cleveland and Detroit, and one main turn-
pike remains in San Francisco, Macon and St. Joseph.

Historically distinct but practically similar to turnpikes are
the diagonal streets laid out on the original plat of some cities,
such as Washington, Buffalo and Indianapolis. Variations in

GROUND PLAN OF CITIES.

plats occur where a Ci.y is tke result of two or more settlements
which have grown together and merged, as in Toledo, Mont-
gomery, &c.

The general effect of irregular laying out is to strengthen
central growth as opposed to axial growth, quick access to or

Albany, 1G95. Intersection of Handlers and Jonkers Streets, now
Broadway and State Street, still the business center of the city.

from the business center being afforded only by turnpikes. A
disadvantage felt later is that as a city expands and quick com-
munication over great distances becomes imperative, vast ex-
pense is incurred in widening and straightening streets, this
expense being sheer waste due to lack of foresight, Paris un-
der Baron Haussmann spent $250,000,000 on a system of

PRINCIPLES OF CITY LAND VALUES.

boulevards; London's new Strand improvements are to cost
$33,500,000 (of which $80,000,000 will be refunded from the sale
of frontage) and some older American cities, notable Boston,
have spent large sums on such work.

PLAN or the: TOWN (kFORT/nCA T/ONSo.rDBTROIT

JTs I net/ sloocl be/ore the year t7&C.
IrtoBh TtimiOts Map macfe May 3o"W6, m'fft txddltions Jrom JfoleS
""""^ t;-^ «^bMine(i jy-om the lYeir D^fi€trltnene,sk0tring it*

f^^^n~~Y\' -tt rtleUion to Ike fu-esent plan </ /fie Ce'fjf
^ect/e 4^0/ eei ia///ie/$'

WwiiiiH/iTA. *"^'

Detroit, 179G. The small first plat near the river and parallel
to It has been wiped out by the larger modern platting.

The effect of rectangular platting is to permit free movement
throughout the city, this being further promoted by the addition
of long diagonal streets. The need for diagonal streets depends
largely on the shape of the city's site, there being but little use

GROUND PLAN OF CITIES.

for them in such narrow cities as New York and Boston, while
they are of great utility in any city which spreads in all direc-
tions over a level area, such as Chicago, Detroit and Buffalo,
Washington furnishes an extreme example of diagonal streets,
the large proportion of land taken up by streets and squares
being suitable to a political city, where it would not be econom-
ical for a business city.

While early platting is generally made to conform to the
needs of the period, in some cases attempts were made to fore-
see later needs, as in the plat of New York laid out in 1807 from
Houston, Eighth and Thirteenth Streets to the Harlem River.

arlem, 1670. An unusual plat in that the principal street ran at right angles to the river.
Old plat wiped out by the New York plat of 1807.

Since at that time all commerce was by water, it was reckoned
that the chief traffic in New York would necessarily be between
the Hudson and the East Rivers, for which reason east and west
streets were placed 200 feet apart, while north and south ave-
nues were placed from 600 to 900 feet apart, there being thus
fourteen avenues instead of fifty. As a result New York pre-
sents in the main the unusual condition of having its business
streets running in one direction and its residence streets at right
angles. If the Commission had had greater knowledge of cities
and could have foreseen the vast growth of New York, they
would have realized that the chief internal movement would

Constantinople. Irregular roads both in city and in outlying dis-
trict Illustrate process by which city is laid out. Buildings are
crowded into the large irregular blocks, and small alleys (not shown
on map) furnish accesB.

GROUND PLAN OF CITIES.

IDDD
IDDD

ytDnDDanoDLj

LiLJUUUUUUUUUKfl^

DoaDnnn
DDScnna

ODD

uDOD
nnnn|]nnn

DDllCD
QDDnODD
LulDQQ
OnDDDDDDDDDDDQO

uuDDM

DDDDDQa
pa DC

mr■o^nn\\

bhULMf

BngB

ODDDODDDBO
DDDDD

J tlDDDOr eBDDD^i
DDUOnDDDLJUODBLln

IDOC

«i^nnnn^nnnnnnnannN'nnnnnnnrinnFinnnnGnsir7^e3inc

A Lost Pike. Old Westport-Independence road recently platted
out, with growth of residence section. Kansas City.

Map of Chicago, Showing the Surviving Turnpikes.

PRINCIPLES OF CITY LAND VALUES.

necessarily be on the line of the longest axis, and the check put
upon north and south travel, with the resulting economic loss,
would have been avoided.

The plats of some cities indicate an attempt on the part of the
early platters to locate in advance the centre of the city. In New

^^\X

DUCT
DOC

nor

uUDDULI!

, „ [joancntjfiij:

,^A^&/>^ jDDaQQDnaGnc
--\ ^ ■ yO^PS^"^. iDuGDnanaoDL

\,sM§m.

^<yMPM

WMM

[IJOulJmiLILiLJu'JLlLnl^GnQnciDoccDCQaDGaaQODna

^.^^-^^^^^^ IDOOnGGOOaDD^qDnODGGQui '

jn'JnanfTuoQnDDDUDo

nnnnnnnnnnnnnnnnrm

U0l]UiJBOCQ[]GnriQUDODaDDDDDDDDD0GnnDCGana

UDOODDDDDDDOGOnr^ninaLiQD

noDDnonDDDDGQ JHDGDn

.!5,0naQ0IIlDDDC[iDDDCDGI]P ^°°^°°

OaC^GOGUGDDDDGDQGDOOODi:

OGGnDnGOQiJuuanQcnGDnaoDDKDDC

QDGDOlJIiGOGaTtCQGDDDnQDaDDDIlDGCGQ

QDQijciJGDGanorffianQ-uGoi — dogcqgoqoqdge
oniJDGDoinnGDLfBrr

GGQQQDDDi.
^nODGGDO

rscac

DQUGL
I

Original plat parallel to river. Black line marks change of plat-
ting to conform to U. S. section lines. Denver.

England and frequently in the south a public square was com-
monly laid out on which, or facing which, the State and County
buildings were erected, also the principal churches and business
buildings. Such a square by serving as a barrier to business
growth, tended to confine the business part of the city to that

GROUND PLAN OF CITIES.

side of the square on which it started, with the exception of
such business as spread along the turnpikes, which usually
bounded two sides of the square. Another method was to lay-
out two wide streets at right angles to each other, and strengthen
this by locating the County Court House at their intersection,
as in Philadelphia, with the Court House at the intersection of

Tokio, Japan. Example of star-shaped city, normal type of growth.

Broad and Market Streets; in Reading at Penn and Fifth
Streets; in Knoxville at Gay and Main Streets; in Terre Haute
at Third and Main Streets; in Bay City at Center and Madison
Streets, and in Canton at Tuscarora and Market Streets, It is
needless to say that such attempts were futile, the business cen-
tres of cities depending on more powerful factors than platting

PRINCIPLES OP CITY LAND VALUES.

FIRST 5-r

V/3

5 TEMPLE 3\

SALT LAKE CITY
Fig. 1. Simplest form— block divided
into Quarters.

THIRD

s-^

zee

) 5

PORTLAND 0«

Fig. 2. Quarters of block divided
In half.

:SECOND A^

X
u

riRi>T A>^

SEATTLE:

Fig. 3. Same as No. 2, except
for alley.

and Court Houses. In general,
in proportion as a plat is laid
out to further the natural lines
of a city's growth, it defines and
establishes values, and in pro-
portion to its variance with the
city's needs it tends to disperse
land values and render them
unstable.

Turning to a more detailed
consideration of plats, varia-
tions in the width of streets and
sizes of blocks involves the pro-
portion of public land used for
communication, and of private
land used for buildings. In rect-
angular plats streets usually
range in width from forty to
eighty feet, sixty feet being a
fair average in the newer cities,
though every city shows wide
variations. There is a common
impression that additional width
in the street always adds to its
value, since the. wider the street
the greater the volume of traffic
which can be accommodated. In
a business street width is prac-
tically disregarded, but few
streets in the world having
more traffic than they can carry,
additional transportation facili-
ties below ground and above re-
lieving the pressure. In a resi-
dence section, however, a wide
street is always desirable. A
somewhat narrow business street
has a slight advantage in facili-
tating intercourse between the
sides of the street, especially as
lack of width does not operate
to limit the height of buildings,
although prominent locations on
open squares are sought for
some forms of business.

Alleys are modern develop-

GROUND PLAN OF CITIES.

LOCUST 5-'

1327

•J)

^ \->1.

.=z -

WALNUT ^-^
PJE5 MOINES. lA

Fig. 4. Same as No. 3, except for
double alley.

5-^ CLAIR

3-^

i2o

V*'

SU>t>IlT £>'^

TOLEDO

Fig. 5. Variation on No. 3. The more
valuable frontage cut into smaller lots.
Corner lots face on Jefferson St. be-
cause more valuable than St. Clair St.

THI-RD ^■^"N"

I-

"/3

(fl

££!.

sz's

ra'/j

yoURTH ^I'N

MINNEAPOLIS

Fig. 6. Variation on No. 3. Lots
face the most valuable frontage.

ments not found in older cities
and usually run parallel to the
principal business streets, or the
streets which are expected to be
the principal business streets
when the city was laid out.
While in cities of moderate size
alleys are useful in furnishing
access to the rear of buildings,
in the larger cities, where land
is closely utilized by means of
interior courts and light wells,
they are a detriment in interfer-
ing with such economic arrange-
ments.

Blocks range in size from 200
feet square to 660 feet square,
any depth over 200 to 250 feet
involving a waste of land at the
interior of the blocks owing to
non-accessibility. Salt Lake City
with blocks 660 feet square fur-
nishes an aggravated case of
loss of value in land by bad
platting. The attempts which
have been made to utilize the
interior waste land by cutting
streets through the large blocks,
exhibit a reversion to the prim-
itive methods of individual
rather than municipal laying
out of streets, these being nar-
row, irregularly laid out and
lacking the vital feature of con-
tinuity through the various
blocks, thus defeating their
avowed object of attracting
traffic into the interior of the
blocks. The shortsightedness of
these owners is due to a sup-
position that the value of retail
business land is based on area
instead of on frontage on traffic
streets.

PRINCIPLES OF CITY LAND VALUES.

F1R5T 3"^

9*3

198

1
99

199

■09

199

SECOND ^"^

Fig.

DAYTON . O.

Lots face' Main St., the most valuable frontage, an exception to
the generafl'plat.

PRAIRIE A^

5 '-

«.

,00 ^

-<0o

■SST

""^

•

£^

««.

1,- ^

,. ^

TEXAS A^=

HOUSTON . TEXAS

Fig. 8. Lots face all four streets in proportion to
value. Land closely platted.

i (iWASHlNGTON fiC^*^ 3

^<^

1
^6

THIRD S-^ S

MINNEAPOLIS

Fig. 0. Similar to No. 8, but a
larger block.

FIFTEENTK S"^

S '" ■

-* s

£.

N loo

FOURTEENTH S't

NEW YORK
Fig. 10. Typical long New Yorlc block; end lots facing on avenues.

GROUND PLAN OF CITIES.
TIRST SOUTM S-r

t6^

114

145-

96«

65- i6s-

^ ,6^

1&5

SECOND SOUTH 6^

^ALT JLAKE CITY
Fig. 11. Irregular cutting through very large block.

SECOND 3-^

T-*)* -^'

••

7^A

-■

•-3

7V/,1

MAIN 51
1^

COUPJT
.6« VJAT^E

151^

n?I

,65^

74-^

f.y.

n;^

•.

3T-)(

T.y.

»?T^>*

V} ^

ftjM

ji^

3V^

THf

MEMPHI5 TENK

Fig. 12. Lots platted to face square, originally designed to be city

center.

PRINCIPLES OP CITY LAND VALUES.

The proportion of city area used for streets and alleys ranges
from about 35 per cent, in Vienna and New York to 55 per cent
in Washington. The first theoretical aspect of the division of a
city's area into public and private land, is that the more land
given up to streets the greater the dispersion of business and

OHIO S^

^s IS

4'^'

T</.

\ \ ^
\ \ S

""\/^^

sr/y

T-A

MARKET 5-^

MONUMEKT T^

MARKET S^

/ / »

SX'A

4o 6e

T'^

<
p
2

T.;^

6o (S*

WA5HlN<^T01Nr S-x

INDIANAPOLIS . IND

Fig. 13. Waste of land where circle lots deepest. Also monument
interferes with traffic in both directions and injures both streets.

area covered by the city. Limiting this tendency would be a
natural increase in the height of buildings, on account of wide
streets and greater light and air obtained on the smaller build-
ing plots remaining. Practically the proportion between public
and private land has but little influence on the density of city

GROUND PLAN OF CITIES.

population, although there is an economic mean in the pro-
portion between land for communication and land for buildings,
which varies according to the utilization of land and which
makes itself felt when disregarded in either direction by loss of
income.

The unit, both as to the depth and width of lots, from which a
plat should be built up, consists of the average shop in the busi_
ness district and the average dwelling in the residence district.
Since the growth of cities leads normally to the ultimate con-
version of residence land into business land, a uniform system of
platting suitable for business purposes throughout the entire

EAST

47-

EAST

0-6'

WEST

S7'

West

S6-

Old utilization of high-class
residence block. (Shaded sur-
faces represent houses.)
New York,

Modern utilization of high-class
residence block. Note increased
area covered, (Shaded surfaces
represent houses.)

city is generally preferable. Such a system need not necessar-
ily lead to small holdings in the residence sections, although it
has a tendency in that direction.

The average depth utilized by shops varies from 30 or 40 feet
for cheap shops up to 70 or 80 feet for high class shops, with
some department stores 200 to 400 feet deep. The average
shop was formerly limited in depth by the necessity of obtain-
ing light from each end, but this limitation has been removed
by the use of artificial light in the day time. Allowing 30 or 40
feet in the rear for light and air, we have a normal depth of 100
to 120 feet for a lot, or a total depth, including an alley, of 200
to 250 feet to the block. Very long blocks are much less disad-

54 PRINCIPLES OF CITY LAND VALUES.

vantageous than very deep ones, the unfavorable feature here
being that shops in the middle of the long fronts are difficult of
access, as with the side streets in New York from Fourteenth
Street up.

Office buildings can utilize a greater depth than shops, extend-
ing from 100 to 150 feet, and as to wholesale and warehouse
buildings, light and air being almost unnecessary, the only limi-
tation of depth is that of convenience in handling goods.

Residences erected in blocks are usually two or three rooms

'' tifll

i Jj^^H

^i^^^^i

^ ^^1

Planned as interior street, in effect an alley through the most
valuable block in Salt Lake City. Frontage practically worthless.

deep, covering 50 to 70 feet, so that with an allowance for light
and air. 100 to 120 feet is also a desirable depth for residence
lots. Where residence land is most valuable it is economized in
the same way as with office buildings, the entire area being
built on except for such light wells as are necessary or required
by the building laws. In some of the best residence sections
of smaller cities, lots of extra depth are found, permitting the
dwellings to be set far back from the street, as with Euclid Ave-
nue. Cleveland, where the lots on one side of the street are 900
feet deep, and Meridian Avenue in Indianapolis, where the lots
on one side of the street are 400 feet deep. In the outskirts of
small cities where land is cheap and but a small proportion of

GROUND PLAN OF CITIES.

the land is built upon, great depth is customarily made use of for
gardens, the deep lots being cut by additional streets as further
demand for building land arises.

As to width of lots, these vary in the smaller cities from 20 to
25 feet for mechanics' homes, 40 to 60 feet for medium class resi-
dences or small shops, and lOO to 150 feet for high-class resi-
dences or the largest business buildings. In the largest cities
residence lots run from 12 to 25 feet and business lots from 25
to 50 feet, with larger plots of 100 feet frontage or more used

Example of too wide street. Street narrowed from 100 feet to 56
feet. Sidewalks moved to edges of driveway. Expense of maintain-
ing driveway reduced one-half and desirable parking effects ob-
tained. Macon, Ga.

for large oflace buildings, shops, hotels, theatres or costly re«i-
dences, the general rule being the larger the city the smaller
the average holding of land.

A marked effect of the subdivision of land into small lots
occurs in the largest cities, when large plots are needed, such
plots having greatly increased value, technically known as
"plottage" value. From one standpoint this represents the
"hold-up" cost of securing the last few lots of a plot, the plans
concerning which almost invariably leaking out and advantage
being taken of purchasers' necessities.

CHAPTER V,

Directions of Growth,

External influences.— First lines of growth of water-front city
parallel to water front; of inland town, along intersecting
turnpikes and of railroad town, away from railroad station
along principal turnpike.— Contest between axial and central
growth.— Normal city star-shaped.— Framework of cities laid
down by water courses, turnpikes and railroads.— Influence of
public buildings and exchanges.— Continuity the vital feature.

The first feature of any settlement to be noted is its corre-
spondence with external influences, the first buildings of a com-
mercial city clustering around the point of origin, whether a
wharf, railroad station or turnpike intersection, in order to han-
dle the traflic from the outside world.
*jrjn a waterfront city the first line of growth is normally along

Geneva in 1687. First streets parallel to the water front.

the shore, both because additional docks and buildings opposite
them start an axis of travel parallel to the waterfront, and also
because the bank of a river or harbor furnishes a natural high-
way for the first settlers^^the Strand in London being the typical
first street of a waterfrint city. Thus the first business street
of New York was Pearl Street, originally on the shore line of the
East River; of Chicago, Water Street, on the edge of the Chi-
cago River; of Boston, Washington Street, then in part on the

DIRECTIONS OF GROWTH.

shore line; of Savannah, Bay Street; of Bridgeport, Water

Street, &c., these streets being now in most cases a number of

blocks from the water, owing to the extension of land by filling.

A not uncommon variation in this normal development has oc-

Richmond in 1781. Showing the first buildings on Main Street.

curred where a creek emptying into the river or harbor made a
sheltered landing-place, whose traffic brought business buildings
on either side. When the size of ships was so increased that the
creek became useless it was filled up, the business street, how-

Utica in 1802. Typical start of a city at intersecting turnpikes.

ever, remaining, as with Broad Street in New York; Dock Street
in Philadelphia, and Canal Street in New Orleans. Where the
topography of the waterfront, either because of shallow water at
each end or of cliffs along the banks, is such that only one good

58 PRINCIPLES OP CITY LAND VALUES.

approach to the water exists, the first business street will nor-
mally extend back from the waterfront up the hollow between
the hills, as at Evansville, Montgomery and Kansas OUy.

In the case of an inland town there may be four or more direc-
tions of growth along the lines of the intersecting turnpikes.
Where an inland city originates from a railroad, the railroad
station takes the place of the wharves of a waterfront city, and
the first direction of growth is along the turnpike leading
t J the largest body of productive farming land. Since this usu-
ally lies along the valley through which the railroad runs, the
first axis of growth is commonly parallel to the railroad. Wher-
ever a town is found, in which the railroad station is evidently

Cleveland, 170G. The first streets run up the hill from the
river docks.

apart from the organic structure of the town, it is clear that
the town existed before the railroad reached it.

The chief exceptions to these general principles would be
where inland villages arose before their turnpikes were of im-
portance, as with Lancaster growing up about a spring; Syra-
cuse near the salt wells; Indianapolis artificially laid out, but
with the settlers shifted over the city's site, first, by absence of
timber on part of the city plat, next by the terminus of the canal,
and next by the location of the National Pike.

In their methods of growth cities conform always to biological
laws, all growth being either central or axial. In some cities
central growth occurs first and in others axial growth, but all
cities illustrate both forms of growth and in all cases central

DIRECTIONS OF GROWTH.

growth includes some axial growth, and axial growth some cen-
tral growth. Central growth consists of the clustering of utili-
ties around any point of attraction and is based on proximity,
while axial growth is the result of transportation facilities and
is based on accessibility. A continual contest exists between
axial growth pushing out from the centre along transportation
lines and central growth, constantly following and obliterating
it, while new projections are being made further out the
various axes. The normal result of axial and central growth is a
star-shaped city, growth extending first along the main thor-
oughfares radiating from the centre, and later filling in the
parts lying between. The modifications of the shape of cities

'^^1^^^

Portland, Ore. Showing first growth along river bank.

come chiefly from topography, the lesser influences being an
uneven development of some one factor of growth or individual
ownership of land.

\Turning first to axial growth, the frame-work of a city is laid
down by its water courses, turnpikes and railroads. Of these,
the turnpikes in the older cities are of chief importance.
Before the days of railroads these controlled so much outside
traflac that their city ends became the principal business streets,
and many still maintain their supremacy. For example, Broad-
way in New York was part of the old Albany turnpike which
runs on to Montreal; Washington Street in Boston was the turn-
pike to New York, which in passing through Providence was
known as Westminster Street; Main Street in Hartford was the

60 PRINCIPLES OF CITY LAND VALUES.

New Haven *;urnpike, which continued north of Hartford as the
Albany and Windsor turnpikes; Montgomery Street in Jersey
City was the through road from New York to the south, which,
continuing out Newark Avenue, runs through Newark as Broad
Street, and so on to Philadelphia; the National Pike built from
Washington to the west one hundred years ago, runs through
Wheeling as Market Street, Columbus as Broad Street, Indian-
apolis as Washington Street, Terre Haute as Main Street, and
so on; and in Kansas City Main Street was the old Sante Pe
trail, running a thousand miles from the Missouri River to
Santa Fe.

Turnpikes are the natural outlets for residences forced away

Wheeling, W. Va., in 1845. Showing first growth parallel to river.
The road over the hill is the National Pike.

from the business centre and in small towns attract the inhabi-
tants by the human interest and protection of the passing travel.
Growth along turnpikes continues to a point where the incon-
venience of living so far out of town more than offsets the at-
tractions of the turnpike when back streets are laid out.

Steam railroads affect city land in three ways: First, by their
terminals; second, by their lines as barriers to growth or com-
munication; and, third, by their lines as influencing land imme-
diately adjacent. The central effect of a passenger depot in a
small city is to attract cheap hotels and shops, such abnormal
cases as the vacant lots opposite the Union depots in Toledo and
New Haven being due to railroad ownership of the land. In the

DIRECTIONS OP GROWTH.

larger cities high class hotels gather near the principal depots,
as in New \ork and Boston, and in England, where they are fre-
quently built as a part of the railroad station itself.
The axial effect of railroad depots is of great importance in the

Cincinnati in 1810. First houses along the river bank.

smaller towns, where the depot constitutes one of the strongest
single forces attracting traffic within the city. The distribution
of this axial effect depends upon whether the travel to and from

Chicago in 1820. First houses at the mouth of the river.

the depot is concentrated on one principal street, or whether the
streams of travel pass through a large number of streets. Ordi-
narily the railroad terminal occupies so much area, and blocks
so many streets that it is most conveniently approached by one

■

PRINCIPLES OF CITY LAND VALUES.

Street. The axial effect of a depot is more easily noted when it
is located a few blocks from a through traffic street than if lo-
cated on such a street, the travel off the through street being
then directly due to the depot and not being mingled with the
general travel. In some cases a depot blocks the end or furnishes
the beginning of a street which would for other reasons have
been a good street, but which is greatly strengthened by the de-
pot, as with 17th Street in Denver. Freight depots are com-
monly a part of passenger terminals and attract warehouses,
heavy wholesalers and tenements.

The restraining effect of railroads, whether main or belt lines,
varies according to the territory traversed. Where a railroad
runs through a business section at grade, it limits communica-
tion between the divided sections and tends to concentrate busi-
ness on one side of the line. Where a railroad in a business sec-

Dawson City, Alaska, 1899. Sho^

tion is carried below or above grade, its effect is minimized. In
a poor residence section a railroad has but little effect, but in a
high class residence section it forms a nuisance which good resi-
dences shun. Added to the noise and cinders of passing trains is
the fact that the railroad attracts factories and warehouses,
which are also nuisances in a residence district. In some in-
stances the railroad travels along the line of a small creek or
gully within the city, which has already kept land values down,
so that the railroad has but little added effect, as with the
greater part of the Belt Line in Kansas City. If the railroad is
in a deep cut, its limiting effect on good residences is diminished,
as in Chattanooga and St. Paul. In some cities demand for land
in the good residence district is so great that the residence dis-
trict is projected beyond the encircling railroad with little fall
in values, as in Louisville and Richmond, where handsome resi-

DIRECTIONS OF GROWTH. 03

dences are built adjacent to the railroad. In New York, the N.
Y. Central R. R. on Park Avenue, between 42d and 56th
Streets, holds the high class residences on the west side of the
track, the east side of the track being ruined by absence of ap-
proach, the only communication being by the elevated foot
bridges. From 56th Street north the tracks enter the tunnel and
their effect is lessened-, the only objection being the vent holes
in Park Avenue. In all cities railroads detach great slices of
city area, in which they alter utilizations and values much as
important water courses do.

The effect of railroads on adjacent frontage is to prevent its
use for either shops or residences, the chief exception to this be-
ing in small towns where the street facing the railroad often
starts as the principal business street, this conditions still sur-
viving in Syracuse.

growth along river bank.

Water fronts, if navigable, invite commerce, resulting in docks
and warehouses, and away from the city centre, attract factories.
If not navigable and not bordered by railroads, and if the land is
not low, they attract residences, as in Chicago, north of the Chi-
cago River; in Charleston, and formerly in New York, when the
best residences faced the Battery Park. Where the land rises
sharply fifty or more feet above the river level, so that the rail-
roads and traffic along the water are not seen or heard on the
hill above, residences are attracted, as in the Riverside Drive
district in New York; the Summit Avenue district in St. Paul;
the Independence Avenue district in Kansas City, and the Wal-
nut Hill district in Cincinnati.

Turning to central growth, this has two aspects, first the main
general growth in all directions from the point of origin, second
the growth from various sub-centres within the city, such as

t>4

PRINCIPLES OF CITY LAND VALUES.

Washington about 1840, looking up Pennsylvania Ave. from the
White House to the Capitol.

transportation termini, public buildings, exchanges, factories,
hotels, &c.

The first and simplest form of central growth is that of aggre-
gation or adding of buildings one after another along the streets
leading from the centre of the city. The first dwellings in a vil-

Broad street canal of New York in 1R50. Location of early mercan-
tile houses and the first exchange.

DIRECTIONS OF GROWTH.

lage are located near the business buildings, so that the mer-
chants can walk to and from their business, and so great is the
power of inertia that even in the smallest villages the few stores
find it advantageous to be close together.

The influence of public buildings on the structure of a com-
mercial city is small, unless such a commercial city is also a
national capital, as with London and Paris. Where a city is
wholly a political city, as is Washington, the public buildings
largely determine the structure of the city. The smaller public
buildings found in all cities, such as the Post Oflace and City
Hall, have considerable influence in determininig the line of

Richmond, Va.

about 1^0. Showing growth along river and up
gradual slope to the south.

early growth, but are of constantly diminishing importance as
the other factors of a city's life become stronger, so that not in-
frequently the public building which created a street in time be-
comes a detriment to it. It is easy to find public buildings badly
located which have no effect on the city's structure, as the Post
Oflice in Chattanooga, the County Court Houses in Salt Lake
City, Kansas City, Seattle and Tacoma, and the State Capital in
Salt Lake City. If the City Hall includes a public market for
the sale of vegetables, fruit, meat, &c., this being similar to a
large shop attracts much daily travel, a good example being in
Knoxville. In some cities, as i^ Columbus and Dayton, 0.,

PRINCIPLES OF CITY LAND VALUES.

Farnam St., Omaha, 1863. Old buildings replaced by modern ones,
leaving but few traces of first growth.

r^^

St. Paul in l.Sd.s. «.;il> f,iarted at deep water and high bank,
making good steamboat landing. Climbed hill to "Seven Corners,"
then grew east on lower level towards railroad station.

DIRECTIONS OF GROWTH.

farmers sell their products from wagons on certain streets
of the city on market days. When this was first instituted the
shop-keepers on these streets feared injury to their trade and
secured the passage of a city ordinance prohibiting it. Finding
later that they had lost patronage by the removal of the farmers'
wagons, they petitioned for their return, this experience showing
the value to shop-keepers of massing people in front of their
stores, even though the new attracting force consists of com-
petitive sellers. The practice of surrounding public buildings
with large grounds is a common one, by which their influence is
nullified, the net effect being similar to that of a small park.
Such a small park, even though including a public building,
makes a bad break on a through business street, injuring espe-
cially the adjacent property on the same side of the street. It

Water front of Seattle, 1878. No commerce demanded docks, so
water front was bulkheaded. Two new streets have since been laid
out over the water, and continuous docks built.

a^ay sometimes slightly enhance the value of the business prop-
erty facing it by concentrating travel on that side of the street,
and in the largest cities furnishes a desirable outlook for high
office buildings. The most detrimental effect of such p. public
building in a small park is felt in the early stages of a city,
where the park checks the extension of the business centre. A
public building surrounded by a park, if located in a residence
section, tends to attract good residences, the outlook for the
park more than off-setting what travel comes to the public
building.

To summarize the effect of public buildings, if located at or
near the old business centre, they tend to maintain central
strength in their first location, as in Boston, New York, Phila-
delphia and Chicago. This is the normal case. The first excep-
tions would be where public buildings are located at a moderate

PRINCIPLES OF CITY LAND VALUES.

Macon, Ga. The point of origin, where bridge croocta irom East Macon, which was fli
settled. This frontage formerly the highest priced in the city, now worth about $10
front foot.

Paris. Central growth exhibited by successive encircling boulevards, formerly fortiflcatio:

DIRECTIONS OF GROWTH.

Brooklyn. Illustrates growth along the axis of the Long Island R. R.

Boston. Illustrates central growth at points on railroad axis, issuing from the city.

PRINCIPLES OP CITY LAND VALUES.

distance from the centre where the tendency is to draw business
in their direction, and the second where they have been so mia-
placed as to fail to have any influence.

Arising later in the life of a city, but in time acquiring more
central influence than any other factor, are the Exchanges, such
as the Stock Exchange, Produce Exchange, Cotton Exchange,
Coffee Exchange, Wool Exchange, &c. The New York Stock
Exchange is the strongest single influence maintaining the flnan-
cial section. The proposition considered some years ago of mov-
ing the Stock Exchange above Prince Street, and on another

Fine old Southern residence separated from its neighborhood by
railroad cutting. Value of land and building destroyed. Mont-
gomery, Ala.

occasion to 14th Street, if accomplished would have removed all
the Stock Exchange brokers and the majority of the Banks and
Trust Companies, private bankers. Safe Deposit Companies and
lawyers, with disastrous results on land values in the financial
section. The leading Exchange varies in different cities accord-
ing to the dominant form of business. The Board of Trade,
handling the grain business, is the leading Exchange of Chicago
and Minneapolis; the Cotton Exchange of New Orleans, Savan-
nah and Mobile; and the Mining Exchange of Denver and Colo-
rado Springs.

Factories create sub-centres, most distinct when on the out-
skirts of cities, by causing the erection of laborers' cottages near

DIRECTIONS OF GROWTH.

Charleroux, France. Illustrates first lines of buildings along
roads, which form large irregular blocks, later subdivided.

PRINCIPLES OF CITY LAND VALUES.

1 1 ill K'.. >^ 4^--/L. ■ ''

Vienna, 1873. Showing fortifications and surrounding ring (used
as a park), which made the old business center, in effect, an island.

DIRECTIONS OF GROWTH.

Vienna, 1898. Showing ring outside the old fortifications, platted into regular blocks.
These now highly improved with municipal and public buildings, apartment houses, &c.

PRINCIPLES OF CITY LAND VALUES.

the factory, which in turn attract small shops and public and
semi-public buildings. Where factories are erected within the
built-up section of the city, their central effect mingles with that
of other factors, but attracts tenements near at hand.

In all growth, central or axial, great or small, the vital feature
is continuity, the universal tendency being to add on buildings
one by one, of the same general character as those which pre-
ceded them. Lack of continuity from whatever cause explains
many of the greatest disappointments in anticipated real estate
movements, such as for example the failure of the west side In
New York, when first developed, to attract fine residences. While
growth in general is continuous, in detail it may hasten on, leav-
ing vacant places behind, especially where rapid transit draws
it, the stations of the elevated railroad on the west side at 72d,
81st, 93d, 104th and 116th Streets being starting points in new
territory from which growth took place in all directions.

Atlanta. Example of star-shaped city.
(See page 47.)

CHAPTER VI.

Distribution of Utilities,

As city evolves, continual specialization in business and dif-
ferentiation in social grades.— Classification of utilities and lo-
cations sought.— Distribution of business utilities, economics*
of residence values, social, Movement of point of highest value.
Direction and rate.

The physical evolution of a large city from a small one results
not only from increased population and added industries, but
also from continual specialization in business and differentiation
in social grades. The first step is the separation between busi-
ness and dwellings, the original buildings used for business
below and dwelling above being replaced by separate business
and residence buildings. Later the social activities in educa-
tional, charitable and recreational lines, become organized and
evidence themselves in schools, hospitals, theatres and clubs,
increasing diversity of function resulting in increased diversity
of structure. Analyzing city land according to its utilization,
it may be divided into three main classes, that used for business,
that for residences and that for public or semi-public buildings.

Business land may be subdivided into that used for distribu-
tion — retail or wholesale stores and railroads — that used for ad-
ministration — banking and office property — and that used for
production — manufacturing property.

Residence land may be subdivided into that occupied by a sin-
gle tenant, ranging from the cottage to the palace, and that occu-
pied by more than one tenant, ranging from tenements to apart-
ments and hotels.

Land used for public or semi-public buildings includes that
used by the Post Office, City Hall, County Court House, &c., and
by all such institutions as asylums, hospitals, churches, libraries,
museums, clubs, &".

The locations sought by these utilities and the reasons therefor
seem to be as follows: Retail stores either cluster at the busi-
ness centre or follow out traffic streets. In retailing the buyer
necessarily seeks the seller, but since in all forms of trade it is /
the seller who is anxious to promote business, the retailer facil-
itates his possible customers by placing his shop where the larg-
est number of them would pass, even though his shop were not
there. Here he utilizes his shop windows and signs to draw cus-

•

PRINCIPLiES OF CITY LAND VALUES.

tomers into his shop, the two elements of convenience of location
and advertising advantage working hand in hand.

Wholesaling may be divided into two main classes: First,
wholesaling of objects of great weight or bulk but relatively-
small value, which seeks locations near transportation lines or
termini for economy of handling, the selling being done by
traveling salesmen or by selling agencies located in the business
centre; and second wholesaling of articles of small bulk but high
value In the retail- whole sale way, that is, making up an order
including a variety of objects for the trade only — which seeks
locations near their chief customers, the retail stores. Here the

Second Street, Seattle, in 1876, looking south. Lots which sold in
1860 for $10 now bring $120,000. None of the original buildings
survive.

ability to quickly supply a small order of mixed goods is sufll-
ciently important to induce them to pay considerable rents.

Railroads in striving for passenger traflSc project their passen-
ger terminals as far as possible towards the business centre of a
city. Economy of handling freight locates the freight depots
either near the docks for interchange of freight or near the
heavy business houses.

In the largest cities a separate section evolves devoted to of-
fice buildings, whose ground floors are utilized by banks, trust
companies, insurance companies, &c., and whose offices are
rented to brokers, lawyers, architects, &c., the location of such
an administrative district being usually the result of slow
growth around old institutions.

DISTRIBUTION OF UTILITIES. 77

Manufacturing follows similar lines to wholesaling, the pro-
duction of articles of great weight or bulk and small value seek-
ing the waterfronts or railroads away from the centre of the
city, both for economy in handling the product and because re-
quiring a large area for a low utilization they must have cheap
land. The manufacture of light articles of high value or that
which consists of the final combination or finishing of products
seeks the wholesale or retail stores which form their custom-
ers. In such manufacturing the seller seeks the buyer and sells
.by sample, so that a location with an advertising value is not
imperative, but the requirement of constant visits to customers

:li

Memphis levee, showing use of waterfront where marked changes
of river levels occur. Absence of docks prevents localizing of river
business, and resulting effects on city structure.

and the ability to supply small articles quickly, cause surh man-
ufacturers to pay considerable rents.

In general the basis of the distribution of all business utilities
is purely economic, land going to the highest bidder and the
highest bidder being the one who can make the land earn the
largest amount. We may note that the better the location the
more uses to which it can be put, hence the more bidders for it.

On the other hand, the basis of residence values is social
and not economic — even though the land goes to the highest
bidder— the rich selecting the locations which please them,
those of moderate means living as near by as possible, and

78 PRINCIPLES OF CITY LAND VALUES.

SO on down the scale of wealth, the poorest workmen taking
the final leavings, either adjacent to such nuisances as
factories, railroads, docks, &c., or far out of the city.
Certain features appear to attract the wealthy in selecting their
residence districts, among these being nearness to parks,
a good approach from the business centre, not too near nor
yet too far, a moderate elevation if obtainable, favorable trans-
portation facilities, despite the fact that the rich ride in their
own carriages and automobiles, and above all absence of nui-
sances. Having selected a district the wealthy make it their own
by erecting handsome residences, making good street improve-
ments, restricting against nuisances, and finally and of chief
importance living there themselves, the value of residence land
varying directly according to the social standing of its occu-
pants. The main consideration in the individual selection of a
residence location is the desire to live among one's friends or
among those whom one desires to have for friends; for which
reason there will be as many residence neighborhoods in a city
as there are social strata. In securing a home in a good residence
section a man secures safe, healthy and attractive conditions for
his family to live under, and in the smaller cities, desirable so-
cial life, these social considerations explaining the strong press-
ure in all cities towards the best residence sections. The contrast
should be noted that business property is selected by the man
from an economic standpoint, and residence property by the
woman from a social standpoint. Social growth and pressure is
upwards from class to class, all ranks being continually recruited
from below — as well as dropping members from time to time —
and the ultimate aim in residence location is to be as close as
possible to those of the highest social position.

Where residences contain more than one tenant, whether tene-
ments, flats, apartments or hotels, the basis of value is economic
and conforms closely to the principles governing business prop-
erty. The hotels of various classes seek locations similar to the
retail stores of the same classes on convenient traffic streets
which advertise them. The highest class apartment hotels seek
locations on or near such traffic streets as run through or near
the fashionable districts, the rents being dependent both upon
fashion and on the character and service of the building. Below
this grade the various classes of flats seek locations for the con-
venience of their tenants, tending to draw nearer and nearer to
their tenant's places of business, until finally we reach tene-
ments crowded among the factories where their occupants work.

Turning to the main central growth of cities, a successful busi-
ness at or near the city centre which requires more space can

DISTRIBUTION OP UTILITIES.

secure it either by acquiring adjoining ground, by building
higher in the air, or by moving away from the centre. To build
higher in the air solves the problem in a banking and office dis-
trict, but not in a retail shopping district, where ground floor
frontage on traffic streets is required. Whether an adjoining lot
is acquired or the shopkeeper himself moves, the result is the
same, which is the starting of the movement away from the cen-

nv-j"i! 'a" ^ -^' ■

■ft ^-.t ^fii^fc-^"^^ ■; ^ . ■

■ ^ ■ ■■ '^^■- " i'

•3;

Utilization of shallow harbor for warehouses and railroads. Duluth.

tre, a slow but endless procession. The fact that land is cheaper
away from the centre has a slight tendency to further promote
the outward movement, which continually evidences the Unsta-
ble equilibrium between the centripetal force of economy'- in the
transaction of business and the centrifugal force of cheap land.
The uniform tendency as a city grows is toward greater concen-
tration in the business centre and greater dispersion in the resi-
dence sections, and as long as there is an outward movement, so

PRINCIPLES OF CITY LAND VALUES.

long is there certain to be a continual readjustment at the busi-
ness centre to conform to it.

The various embryonic sections gathered closely together in
the first small area of the city, in expanding largely influenct
the location of utilities. Whatever the new building to be
erected, whether retail or wholesale, shop or residence, it can

Union Railroad Depot, Toledo. An exceptional case of non-utiliza-
tion of frontage opposite an important depot due to railroad owner-
ship of land. Many thousands of dollars of income thrown away
by not making short-time ground leases.

either be placed next to similar buildings or apart from them.
With this choice, buildings are usually placed adjacent to
others of a similar kind, so that the general tendency for all
sections is to extend continuously, expanding in breadth as the
centre is left. One expensive residence, if not overcome by un-
favorable factors, may be suflacient to attract similar buildings
and create the most fashionable residence street in a city, as in

DISTRIBUTION OF UTILITIES.

a more marked way the royal palaces in Paris and London have
created the most fashionable residence districts in those cities.
This, however, does not mean that individual enterprise or whim
can run counter to the orderly evolution of a city.

When the best residence district is determined, the main
growth of the city is quite certain to follow it, as note the move-
ment of retail stores after the best residences on Fifth Avenue
in New York; on Boylston Street in Boston; on Michigan Ave-
nue in Chicago; on Olive and Locust Streets in St. Louis; on
Madison, Monroe and Jefferson Streets in Toledo; on Morrison
and Washington Streets in Portland, Ore.; on St. Charles, Ca-
rondelet and Baronne Streets in New Orleans, &c. The reason
the best residence district rather than the largest residence dis-

Clark Street, Chicago, in 1857. Showing raised buildings and
sidewalks, as city level was altered.

trict draws the city, is doubtless that the far higher percentage
of purchasing power of the wealthy more than offsets the supe-
rior numbers of the poorer classes, and to the further fact that
the shops patronized by the wealthy become fashionable, and
hence sought by all classes as far as their means permit.

Exceptions to this progression are due chiefly to topography,
business remaining on a level if possible and climbing hills only
under great pressure. A further exception to the normal would
be where two or more good residence districts are located on
opposite sides of the main business section so as to balance each
other, as in Fort Wayne and Knoxville.

Probably the most important movement within a city as it
grows is the gathering together of those carrying on the same
kind of business into special districts. This tendency was com-

PRINCIPLES OF CITY LAND VALUES.

mon in Rome and Constantinople thousands of years ago, and
is in harmony with the law of evolution, that increasing differ-
entiation is accompanied by increased integration. Retail stores
cluster together at convenient points for their customers and not
because they do business with each other. The chief attracting
power of such a retail section seems to be the insurance to cus-
tomers against failure to find within the section what they seek.
Undoubtedly the selection within this special district is normally
better than that in all the rest of the city combined, and shop-

Example of absence of Influence of public building. Post oflice in
Chattanooga, erected twelve years ago, away from business center,
has attracted no business.

pers are saved the time, trouble and uncertainty of seeking
through scattered shops. While one shop may attract a cus-
tomer and another make the sale, such an interchange of cus-
tomers is probably in the long run closely balanced. The per-
sonal factor, or the business ability of managers to advertise
and develop a business, is most influential in causing gradations
of values in adjacent business locations. A successful shop con-
tinually enlarges the area from which it draws custom and di-
verts special currents of travel towards it. This attracts the no-

DISTRIBUTION OF UTILITIES.

tice of other shops in the same line of business, who, reasoning
either that the location has helped their successful rival or that
by moving near them they can secure some of their customers,
move close to the successful store. Formerly it was held that
the further a retail store was removed from a competitor the
better, but this has been found to hold true only of those small

n
d

Perry Street, Montgomery, Ala. A curious example of the most
fashionable residence street ending abruptly in a meadow, only
thi-ee blocks from fine houses. Of course axial strength is not
necessary for residence streets.

stores which depend for business on the immediate neighbor-
hood.

In many forms of business the clustering together of those
transacting it finally crystalizes into an Exchange, which forms
the centre of the district. Since the Exchanges are the result
and not the cause of the special districts in which they are lo-
cated, we must look back of them to find the causes for the loca-
tion of various utilities. For example, the leather district in

PRINCIPLES OF CITY LAND VALUES.

New York, was located in Beekman Swamp, on account of the
wet ground suitable for tanning pits, and similarly in Philadel-
phia, the leather district was located on both sides of Dock
Creek. There were banks on Wall Street long before the Stock
Exchange was established, the location of the banks and of the
United States Sub-Treasury and Assay Office attracting the
Stock Exchange, which in turn drew further Banks, Trust Com-
panies and Brokers. The location of the Cotton Exchange apart
from the dry-goods district would seem strange except for the

Cost of excavating high bank has made a break in business build-
ings on traffic street. First floor of new building shown excavated
60 feet back, which upper stories run 120 feet back. First Avenue,
Seattle.

fact that thirty or forty years ago Hanover Square was the cen-
tre of the dry-goods trade.

The reasons for the clustering together of wholesale houses
are not so clear as in the case of retail shops, except that the
features which are favorable for one wholesale house are equally
so for another, such as proximity to transportation facilities to
save trucking, and the fact that by locating together they attract
more out-of-town buyers than if scattered.

The outward pressure of one zone upon another involves the

DISTRIBUTION OF UTILITIES.

slow advance of the banking and oflace section into the older re-
tail or wholesale districts, the continual following along of the
lighter wholesale houses into the buildings vacated by the re-
tail shops, the close pursuit of the best residence sections by the
best retail shops, with normally a mixed zone of institutions,
&c., acting as a buffer between them, and the steady march of
residences into the outlying country, first utilized for gardens or
cottages. Whatever the size or shape of a city, the order of de-
pendence of one district upon another remains the same, al-

Frontage on traffic street used for advertising purposes. Seattle.

though many districts are not clearly defined but overlap others
of different character.

In connection with the progression of districts in a city, W3
may note the movement of the point of highest value, which
means the most desirable location for a retail shop in all cities,
except in the few financial capitals where the banking and ofiice
district produces higher values than retail shops.

In a waterfront city the highest values start at the point of
ongin and spread normally along the first street on the water-

PRINCIPLES OF CITY LAND VALUES.

Berlin. The clustering of railroad stations towards the city
center Illustrates the efforts of railroads, for strategic reasons, to
reach the business heart of the city. This map shows only a small
part of the city.

DISTRIBUTION OF UTILITIES. 87

front, moving later to the next street parallel to "it, and so on
back.

The rate of this backward growth from street to street varies
according to the prosperity of a city, a rapid increase of popula-
tion being reflected in an expansion of the city's area, and often
a rapid shifting of the business centre. In slow growing cities it
may take from twenty to forty years to move the principal re-
tail business from one street to another, as note the movement
from Water Street to Main Street in Bridgeport; from Bay
Street to Congress Street and later Broughton Street in Sav-
annah, &c.

If the principal street runs at right angles to the water front,
the shifting of the highest point of value takes place much
more rapidly than if the street is parallel to the water front,
where it has to be moved laterally. The rate instead of averag-
ing from twenty to forty years might vary from eight to twelve
years per block, the length of the blocks affecting the movement.
One factor delaying such movement would be a strong traffic
street at right angles to the principal street, which might hold
the highest values at its intersection for many years. Such
strong cross streets often produce jumps in the onward move-
ment of the highest values, as with 14th, 23d, 34th and 42d streets
in New York.

The rate of movement of cities is sometimes affected by the
destruction of whole districts by fire, which brings up the ques-
tion to owners whether or not to rebuild the same, type of build-
ings on the same locations. In many cases a conflagration causes
the erection of handsome new buildings in place of the oM ones,
so that a new period of higher utility arises. On the other hand,
the destruction of individual buildings by fire will have an un-
favorable effect if tenants move elsewhere and owners do not
rebuild.

The unfolding of a city, with its change in land utilization
shows normally in the case of any lot a slow increase in value
up to a high point, after which a gradual decline takes place,
with occasional fluctuations varying the main movement. Thus
where good residences take the place of small suburban homes,
a higher utility supplants the lower, and when these good resi-
dences become old-fashioned and are converted into boarding
houses, a drop in value will ordinarily occur. This is sometimes
offset by the more intense utilization of the land, a larger rent
being earned from more people even at lower rates. Moreover,
property of this class having the prospect of being overtaken by
business buildings has an anticipated value in advance of its
yield. When retail stores arrive and become firmly established

S« PRINCIPLES OF CITY LANB VALUES.

the high level of value is usually reached, this period lasting
possibly thirty to sixty years. As the retail stores move on a
lower utility succeeds — and usually a lower value unless the
city's increase in population, more than offsets the drop in util-
ity — wholesale houses being followed by storage warehouses,
cheap tenements, dilapidations, &c., until sometimes land for-
merly the best in the city becomes so remote from the active
business centre as to have little or no value.

CHAPTER VII.

Currents of TravcL

Regularity of daily travel the basis of its effect on city struc-
ture.— Chief daily movements between resicence c.ni business.
—Shopping habits of various classes.— Retail stores chiefly
located by currents of travel.— Change of axis of city traffic.
—Fluidity of daily travel.— Street railroads, elevated, under-
ground, bridges, ferries, etc.

The life of a city involves continual travel, day and night,
throughout its entire area, the most notable feature of which,
and the basis of its effect on the city's structure, is its regular-
ity. The inhabitants of a city do not intermingle at random,
but go from one place to another by the quickest, shortest, or
most agreeable route. For example, in New York many thou-
sands of the upper classes have never been west of Sixth Ave-
nue or east of Third Avenue, except to the ferries, and many
thousands on the lower east side have never seen Fifth Avenue,
while in New Orleans, many Creoles have never crossed Canal
Street into the American quarter.

The chief daily movements consist of the journeys of business
men between their residences and their places of business, the
complex interweaving of these men within the business centre
and the shorter trips of workmen between their homes and their
workshops.

In modern cities the main currents of business men's travel
are carried by street railroads, so that the travel consists of
short trips on foot converging to the street railroads, a long
trip in the cars to the business centre and there short trips on
foot again. In some cities where there are hills between the
business and residence sections, the currents of foot travel follow
a zigzag course up and down the hill, it being easier to turn cor-
ners than encounter grades. A variation may occur in the re-
turn trip where men stop at clubs, cafes or hotel lobbies, the lo-
cation of these favorite haunts causing a different route to be
taken, with some resulting influence on values.

Within the business districts occur the continual interchange
of visits, by means of which the business of the city is accom-
plished. Here, although the trips are short, the necessity for
saving time leads to the gathering together of the various forms
of business in special districts. In large cities the daily trips of

90 PRIN-CIPLBS OF CITY LAND VALUES.

workmen are made chiefly on foot and are widely diffused
throughout the tenement districts, with small effect except that
certain more convenient streets attract cheap shops.

The daily trips of women are made either for shopping, call-
ing or driving. Here, as in men's trips, the travel consists of
short trips on foot to the street car lines, which carry the con-
centrated travel to the largest shops, where the cars are left and
the women walk to the other shops. For the same reason of
convenience women's shops are crowded together in order to
save time in going among them.

The display of goods is vital for shops, and in order to display
goods shade is necessary; hence the side of the street which is
shady during the part of the day in which women shop is nor-
mally worth from 20 per cent, to 40 per cent, and occasionally
100 per cent, more than the sunny side of the street. The west
side of streets running north and south, and the south side of
streets running east and west, are shady the greater part of the
year from about 12 or 1 o'clock on, permitting a display of goods
without fear of fading, and rendering the sidewalk agreeable.
The greater part of the purchasing in the large shops is done by
women of the middle classes, whose household duties prevent
them from reaching the shops until after 11 o'clock. The busiest
shopping hours are from 11 o'clock to 4 o'clock, many women
taking lunch either in the department stores or in restaurants
nearby. The women of wealth shop usually in the morning be-
itween 11 and 2 o'clock, so that even in their case the west
or south side of the street has some advantage of
shade. In southern cities where shade is even more im-
portant, the relative value of the four corners of two
intersecting business streets is well defined, the southwest cor-
ner being the most valuable, the southeast next, the
northwest next, and finally the northeast corner. This refers
only to retail shopping fronts, the corners having a different or-
der of preference if desired for other purposes, such as hotels or
office buildings. It is said that in such northern latitudes as those
of St. Petersburg and Montreal the sunny side of the street is
more valuable than the shady side, since it attracts the travel In
the long winters. In New York some difference can be noted in
the tides of foot travel according to the time of year, but since
for eight or nine months of the year the climate is mild, the
shops become established on the shady side of the street and
whatever travel in winter changes to the sunny side is not suf-
ficient to draw them over.

Other factors are sometimes strong enough to overcome the
advantage of shade, such as proximity to a section of customers,

CURRENTS OF TRAVEL.

as in New York on Sixth Avenue, between 34tli and 59th Streets,
where the east side of the street is more valuable than che west
side.

In the larger cities the general use of private carriages by
wealthy women influences values, in that the high grade
women's shops seek locations away from car lines and easily ac-
cessible to the "carriage trade." Such locations are usually on or
near the most fashionable axial streets, such as Fifth Avenue in

Map of Baltimore, showing street railroad lines, which illustrate
the gathering of traffic to the business center and its interchange
on intersecting lines.

New York, Michigan Avenue in Chicago, and Boylston Street
in Boston, all of which were fashionable driving streets long be-
fore the residences facing them were driven out by shops.

The daily shopping of women clerks, shop girls, &c., is done
either at small stores in the neighborhood where they live or at
the large department stores, to which they make a special trip,
lower prices being more important to them than the time con-
sumed.

92 PRINCIPLES OF CITY LAND VALUES.

The travel of mechanics and laborers in the morning is hurried
bv their having to report at the workshops at a certain hour, but
ii the evening they have a chance to shop in the small stores on
the way from the factory to their homes. Ordinarily, the time of
workmen and their wives is so much occupied during the week
that the bulk of their shopping is done on Saturday nights from
6 to 10 o'clock, on the traffic streets which pierce the tenement
districts.

In the smaller cities there are so few strangers that their in-
fluence may be disregarded. In the large cities there is an im-
portant and continuous visiting population, which varies daily
as to individuals. The average number of strangers in New
York is estimated at 100,000 people, who support many of the
theatres, shops, and hotels, the latter being important as the
starting points from which the visitors trips originate.

In the smaller cities suburbanites are few in number, and
reaching the business centre chiefly in electric cars merge with
the general population and may be disregarded. In the large
cities suburbanites arrive by ferry or train and usually make
hurried trips to their offices in the morning and back in the
evening. This effort to reduce the time between their homes and
iheir business militates against their purchases en route, with the
exception of small articles which can be carried, such as fruit,
books, flowers, furnishing goods, &c., shops for which locate
around some of the ferries and railroad depots. An extreme
example of a large current of daily foot travel of the highest eco-
nomic quality is furnished by the summer travel on Rector
Street, New York, where thousands of wealthy men walk daily
from the Wall Street section to and from the Sandy Hook boat
Here every factor is favorable to promoting an increase of
values, except the speed with which the walking is done and the
fact that the traffic lasts only five months of the year, which
causes it to have no influence on values.

Added to the daily travel in a city is the evening travel to the
theatres, opera, music halls, &c. The theatres, usually en street
car lines and near the most important hotels, chiefly attract the
evening travel, which in turn draws restaurants, saloons, cigar
shops, candy shops, soda water fountains, florist shops, &c. The
variations between summer and winter business become more
marked the higher the social class, the little shops on the lower
east side of New York probably selling an equal amount of goods
throughout the year, the shops supplying the wants of the mid-
dle classes falling off during the hot summer months, and the
season for fashionable shops lasting about flve months. The
competitors of the fashionable New York shops are the shops

CURRENTS OP TRAVEL. 93

at Newport, Lenox, Bar Harbor, and those of Paris and London,
and the competitors of the next grade of shops are those of the
summer resorts of New Jersey, Long Island, or near New York.
Tradesmen in many cases meet this condition by having winter
stces in New Yorli and summer stores where their patrons go.
In so far as retail purchases are made outside of New York, the
earning power and value of retail property in New York is low-
ered, this varying in proportion to the length of the summer
absence.

The main effect of daily currents of travel is on the location
of retail stores, increasing traffic being certain ultimately to
change any street into a shopping street. As a corollary to this
is the important fact that the relocation of the best residence
districts is certain to change the axis of the principal travel
within the city, which will draw the shops and values to new
streets. Such changes of axis have taken place in New York
from Pearl Street to Broadway, and from streets parallel to the
river front to streets at right angles to it in St. Louis, St. Joseph,
Minneapolis, and are now taking place in Toledo, Portland, Ore.,
and Cincinnati. As shops follow the shifting currents of travel,
rentals move with them, the value of retail land depending on
the number of people passing, qualified by their purchasing
power, the causes which bring them past the property and their
method of locomotion. This dependence of retail business on
daily trafiic is due to the operation of the laws of chance, by
which of a given number of passers-by a certain proportion will
become customers.

The mention of traffic within a city suggests the double* func-
tion of a city street as contrasted with the single function of a
country road. A country road is a means of communication
only, while a city street also furnishes frontage for buildings.
Ordinarily, city streets are first a means of communication and'
later furnish frontage for buildings, but in waterfront cities this
may be reversed. The principal business streets usually have
some definite point of origin, such as a ferry or a railroad sta-
tion within a city, or a country town or district outside of it, and
long distance or through traffic is a prime essential for business
streets, those which are cut off at one or both ends being almost
useless for retail business, even though immediately contiguous
to main arteries of traffic. Currents of traffic are not always
straight, but may follow a street which has turns or angles, or a
short street cut through a block between two main business
streets, as with New Bond Street in London, and Union Street
in Nashville. A serious detriment to values is caused by a break
in the continuity of shops, whether due to a vacant lot, a church,

94 PRINCIPLES OF CITY LAND VALUES.

a private residence, or an institution of any kind. A row of
stores resembles a chain, the insertion of a vacancy or of any
different utilization breaking its cohesion.

Besides the main currents of travel, the little feeding streams
are closely watched, such shops as hatters, tailors, lunch
rooms, men's furnishing goods, etc., locating in the men's dis-
trict near the oflSce buildings. The grade of shops on the streets
leading from the office sections conforms to the character of the
passers-by, high-class shops being where employers pass, and
cheaper shops where clerks go, while push-carts and hawkers
catch the office boy trade.

A noteworthy qualification in the location of retail shops is
that the larger and more expensive the articles to be purchased
the further people will go in search of them. Large and well
managed shops will attract purchasers wherever located, but
even such shops are extremely sensitive to the merits of differ-
ent locations and pay high rents to be exactly where they can
obtain the largest number of customers. In all cities there are
constant changes in the population, and all shops to be most
successful must keep themselves before the public by means of
prominent locations.

The most striking feature of the daily travel within a city
is its fluidity, or the closeness within which it seeks its own
level. Obstructions check it and turn it aside as they would a
stream of water. In flowing down a street it backs up each
cross street, carrying stores to a distance proportionate to the
strength of the current; and where two currents meet the pres-
sure at the intersection intensifies the back currents. The
stronger the current the further it spreads back or the greater
the depth of shops, in some cases running through the block, as
on 23d Street, New York, where the shops extend to 22d Street
on one side and 24th Street on the other. Similarly, the stronger
the current of traffic the higher it is heaped up, or the taller the
buildings to accommodate it. The current of travel blocked by
Washington Square, New York, flowed up Broadway and 6th
Avenue and meeting at 23d Street, a back current of business
building has flowed down 5th Avenue, in the same way that a
stream meeting a rock divides, the pressure of water causing a
current to flow back to the rock.

Street railroads have wrought a revolution in the structure of
cities, scattering population over a wide area, adding value to
the circumference by rendering it accessible for residences, and
to the center by concentrating traflEic within it, a part of this
added value being removed from the intermediate zone. By
rendering new districts acessible, thus increasing the area of

CURRENTS OF TRAVEL. 95

supply of land, the value of all competititve land is reduced, so
tliat the effect of street railroads on residence land is
to lower its average value. The speed of an electric car is so
great that the tendency is not to add on gradually to existing
residence sections, but to project beyond them into the cheap
country land. Ordinarily, capitalistic handling takes hold of a
new outlying district and by laying out fine streets and side-
walks, sewers, water, gas, electric light, etc., and erecting high-
class houses, establishes a residence section of higher values
than much of the residence land nearer the business center. Op-
posed to this condition are the two factors of long settlement,
which makes old residents reluctant to move, and the cost of
car fares amounting to between $5 and $10 per month according
to the size of the family, which operate in favor of the old fash-
ioned residence sections near the business center.

It may happen that the best business street in a city has no
car line on it, as for example Nicollet Avenue in Minneapolis;
6th Street in St. Paul, and Felix Street in St. Joseph, these being
for this reason better adapted to the "carriage trade." An ex-
ample of the effect of street railroads on carriage trade oc-
curred in New York when the construction of the electric roads
on Broadway and 23d Street produced such a dangerous inter-
section that ladies were timid about driving across it. This
hastened the northward movement of high-class shops from
Broadway below 23d Street to 5th Avenue above 25th Street.

Transfer points, owing to concentration of daily streams of
people and consequent opportunity for shops, are strategic points
in a city's area, creating business sub-centers, whose prospects
of increasing values are limited only hy the number and quality
of the people likely to utilize them. As examples, note the
marked effect of transfers in New York at Broadway and 34th
Street, Madison Avenue and 59th Street, Lexington Avenue and
59th Street; also in New Haven at Chapel and Church Streets;
in Denver at 15th and Lawrence Streets, and the many transfer
points in the outlying districts of Chicago.

The success of street railroads in running cars to the top of
fairly high hills has added millions of dollars of value to the
higher lands in all hilly cities, as in San Francisco, Seattle,
Peoria, etc. Similarly, every improvement in the construction,
operation or service of street railroads strengthens their in-
fluence on the structure of cities. In general, if a city has less
than the normal street railroad mileage the result is a number
of small business sub-centers in outlying districts, and a con-
sequent irregular diffusion of values, while a well developed

96 PRINCIPLES OF CITY LAND VALUES.

street railroad system renders stable the normal distribution of
values.

In the largest cities the elevated railroads have the same gen-
eral effects as the electric street railroads, with the additional
influence of removing value from between the stations and in-
creasing it at the stations. Despite the heavy damages paid by
the elevated roads in New York, it is doubtful if they have in-
jured many properties. It is certainly noteworthy that over
50 per cent, of the property owners affected did not claim
damages from the elevated roads, also that the regular scale of
damages paid out of court is only $10 per front foot. One bene-
ficial result of the elevated road between stations is in affording
shopkeepers along the route an opportunity to display advertis-
ing signs and goods on the upper floors. Where the elevated sta-
tions are only five blocks apart, as on the 6th Avenue line in the
shopping district from 14th to 23d Streets, no building being
more than 600 feet from an elevated station, the crowds from the
different stations intermingle, so that all stores on the short
stretches between the stations are benefited by the travel.

Where stations are ten blocks apart there is no such overlap-
ping of streams of travel, but if there were sufficient travel to
demand it there would be additional stations, in which case the
beneficial effects of the elevated would be intensified and the
detrimental effects diminished, so that it might be said to be the
fault of the property that it has not sufficient business strength
to make an elevated road a source of additional value rather
than the reverse. While an elevated road is always detrimental
in a residence section, and partly detrimental and partly helpful
in a small business section, in the most patronized retail shop-
ping sections it is a strong advantage.

The infiuence of an underground road is similar to that of the
elevated, except that the feature of advertising is absent. The
longer haul of an underground road creates residence values at
still greater distances, and also still further intensifies values at
the center of the city and at all stations, especially express
stations.

Bridges, ferries and tunnels, which serve as additional outlets
to a city, co-operate with long distance transportation facilities,
and any change in their location or any competition of new
bridges or tunnels by changing traffic routes cause marked
shifting of values. Thus the construction of the Brooklyn
Bridge by diverting traffic from the old Fulton Street ferry, and
throwing it half a mile back from the river on either side, re-
moved millions of dollars of value from the streets leading to
the ferries, especially in Brooklyn.

CHAPTER VIII.

Types of Buildings.

Suitability to location.— Proportion of cost of building to
value of land.— Effects of skyscrapers.— Table of business
buildings suitable for various locations.— Table of residences
suitable for various locations.— Depreciation and life of build-
ings. — General effects of buildings. — Nuisances and restrictions.

Let us consider next the types of buildings erected for differ-
ent utilities and their reflex effects on values. The most im-
portant consideration governing suitability to location is that
of proportion of cost of building to value of land, the safe gen-
eral rule being that the cost of the building should approxi-
mately equal the value of the land. In other words, the typical
successful property, land and building, appears to earn
double interest on the cost of the building, one-half of
which capitalized as economic rent gives a value to the land
equal to the cost of the building. While there are excep-
tions to this proportion it forms a median line of de-
parture, applying most closely to business property, whether
the building is a $5,000 one-story brick on a cheap
lot or a $3,000,000 office building in the highest priced loca-
tion. The chief destruction of capital comes from the
erection of expensive buildings on cheap lots, while the erection
of cheap buildings, known as tax payers, even on expensive land,
should not lead to loss, although it may not lead to great profit.
On a street whose traffic is increasing rapidly a business
building costing several times the value of the land may
profitably be erected, since within ten years the value of the land
may overtake the cost of the building. If, however, the building
runs at a low return for ten years, the investment may prove
a poor one, and the compromise of erecting one or two-stories
of sufficient strength to carry later five or six, is sometimes the
best solution.

In the largest cities increasing demand for space in favored
localities has steadily increased the height of buildings, the
practical checks arising from time to time having been suc-
cessively overcome by new inventions. While fifty years ago
the average height of business buildings in New York was three
or four stories, and in the best locations five or six stories, the
general use of elevators after 1870 ran the height up to eight

PRINCIPLES OF CITY LAND VALUES.

The economic error here consists of placing ornamental columns
In front of the oflaces on either side of the entrance — especially the
column on each end — causing vacancies and low rents, representing
an average loss of probably 4% on $200,000. The entrance to a
large and important building should be duly emphasized, but such
sacrifice of income is unnecessary. Broadway and Leonard Street,
New York.

or nine stories, where it was checked by the expense of the
heavy walls and by the waste of the most valuable space on the
ground floor taken up by the walls. Skeleton steel construction,
developed since 1890, has saved the space on the ground floor,
modified the cost of the highest buildings and run them up to

TYPES OF BUILDINGS. 99

twelve or sixteen stories, which express elevators have lifted to
twenty-five and thirty stories.
When skyscrapers were first erected it was the common

Chamber of Commerce, Duluth. Badly planned front; over 60%
of frontage wasted on stone masonry and entrances, leaving less
than 40% to earn ground floor rentals. Building has been financially
unsuccessful.

opinion that buildings of this character in the midst of low build-
ings bycuttingoff their light and air robbed them of their rights,
so that justice demanded a legal limit to the height of build-
ings. It was soon found out, however, that where a skyscraper

100

PRINCIPLES OF CITY LAND VALUES.

was SO built as to require light and air from the adjoining lot,
it was the owner of the small lot who had the skyscraper at his
mercy. The threat of replacing the low building with a high
one, destroying the value of possibly a quarter to a third of the
skyscraper, has quite uniformly compelled the owner of the sky-
scraper to buy or lease for a long term of years the adjoining
property, as with the American Surety Building, Washington

Chamber of Commerce, Cincinnati; designed by H. H. Richardson.
A magnificent building, but with Income from ground floor subor-
dinated to the architectural design.

Life building, etc. Skyscrapers being naturally located on cor-
ners, the typical development of a small block would consist of
four high buildings on the four corners and four low ones be-
tween them controlled by the high ones. With long narrow
blocks, as in New York, the development would be more irregu-
lar, the tendency being to alternate high and low buildings.
Further variations occur where a skyscraper owns one or two
lots in an adjoining tract in ordor to block the erection of an-

TYPES OF BUlLDlN&S'.' ' ' '>''''''' >*101

Other high building, as with the Park Row Realty Building, and
the Broad Exchange Building, or the purchase of low buildings
across narrow streets to insure light and air, as with some of
the life insurance company buildings.

The height of buildings has been limited by statute in Boston
and Chicago, and attempts have been made to do so in New
York, but the general sentiment seems to be that the economic
check is sufficient.

When skyscrapers were new, rents diminished from the
ground floor up, as in older buildings, but the upper stories
being more desirable on account of better light and air and
freedom from noise and dust, the rents were soon equalized.
The demand for the upper stories has continued, so that in some

Planned for a bank building. The solid wall of stone and brick
ten feet high throws away the ground floor frontage, from which the
chief income should be obtained. Berlin Building, Tacoma.

buildings higher rents are charged for them, the least desirable
floors being from the third to the sixth, this less productive
stratum furnishing an economic check to the height of buildings.
Wherever modern office buildings have been erected, the ad-
vantages they offer have drawn tenants from the dark and old-
fashioned buildings surrounding them. The offset to owners
from this destruction of capital in old buildings by modern im-
provements, is the increase in the value of the land due to the
possibility of similarly improving their land. Old property two
or three blocks away, however, may lose its tenants without any
-dorresponding gain in values, since the increase in space sup-
t)lied by the skyscraper is so great that its district is more
limited. As illustrating the increase of floor space from high
buildings, the Bowling Green Building increased the floor space

io^

' PilIN^C!lf>L^ b^ CITY LAND VALUES.

on the same area from 80,000 to 567,000 square feet, and the Grer-
man-American Building from 26,000 to 126,000 square feet. An
example of a shrinking office district was offered by lower Wall
Street, where of late years buildings have been vacant owing
to the completion of the new buildings around the banking
center at the intersection of Wall and Nassau Streets. As the
office district spreads the old locations regain value, and lower
Wall Street is now building up with skyscrapers. Similarly the
old three and four-story buildings on lower Broadway became
unremunerative and some were closed up, until the Bowling
Green Building with its modern facilities attracted tenants. The
concentration of the office district caused by skyscrapers results
in a great saving of time in the interchange of business, and
hence an economic gain to the community.

Subject to limitations from changing conditions and local cir-
cumstances in different cities, the following table is an estimate
of the character of business buildings, as to cost, height and
material, which may suitably be erected on land of varying
values:

On land

valued

per front foot.

$200

300

500

800

1,000

1,500

^ 2,000

3.000

6,000

15.000

18,000-35.000

Buildings may

cost per cubic

foot about:

8 to 10 cents

12 to 20 cents

18 to 25 cents

30 to 50 cents

Construction

of build-
ings may be:
Ordinary brick
Ordinary brick
Ordinary brick
Ordinary brick
SlowbAirning
Slowburning
Tending to fireproof
Tending to fireproof
Skeleton steel, fireproof
Skeleton steel, fireproof
Skeleton steel, fireproof

Height
of build-
ings may be:

2 story

3 story

4 story

5 story

6 story
6 story

9 story
. vw 9 story
10 to 12 Btory
12 to 20 story
20 to 30 story

3 to

4 to

5 to
5 to

7 to
7 to

Turning to residences, the proportion of cost of building may
vary from one and a half to three times the value of the land,
except as to workmen's cottages, where it may vary from three
to five times the value of the land. The highest grade houses
are ordinarily built for homes and cost more than they will sell
for or than their rentals will pay interest on, this lack of com-
mercial value increasing with the cost of the house. In expen-
sive houses in smaller cities there is a tendency towards restor-
ing the equilibrium between the value of the land and buildings
by placing them on plots of 100 to 150 feet front by 200 to 400
feet deep. This equilibrium is more apparent than real, since
not over 75 feet of frontage is necessary for the house, the bal-
ance of the land being a luxury on which taxes are paid and in-
terest lost. In all cases the cost of the house should be closely
proportioned to the cost of the surrounding houses — a |50,000

TYPES OF BUILDINGS.

103

house in the midst of $5,000 houses, or a $5,000 house in the midst
of $1,000 houses, having a commercial value but little in excess
of the cheaper neighboring houses. Instances could be cited of
houses costing five times as much as the surrounding houses
which have not sold for as much as th© cheaper ones, because
rich people will not live among cheap houses, and poor people

The error consists in placing entrance to three-story building on
principal street instead of side street. These 16 feet would have
yielded from $1,500 to $2,500 per annum for the past ten years, or
6% on $25,000 to $40,000. The error has been partly remedied by
blocking the entrance with a cigar stand, yielding $720 per annum.
Second and Cherry Streets, Seattle.

cannot afford to keep up large houses. Such houses usually sell
for boarding-houses or sanitoriums. On the other hand, a small
h'ouse in the midst of expensive ones will usually sell and rent
well, there being strong competition to obtain a residence
location of social importance at small outlay. There is, how-
ever, a limit to the erection of cheap residences in good locations.

104

PRINCIPLES OF CITY LAND VALUES.

Front of corner store in Duluth. About as badly planned as possible.

a large number of them spoiling the value of locations otherwise
suitable for handsome residences, and some houses in fashion-
able sections being too small to sell well.
Turning to the larger cities, houses built in blocks represent

TYPES OF BUILDINGS.

lOo

a pressure of population on land, which does not permit the use
of land for light and air around detached houses. In this class of
residences the cost of the house should not greatly exceed the
value of the land, with a general tendency, where the land is
cheap, of the cost of the houses exceeding the land value, and
where the land is expensive, the cost of the houses being less than
the land value. A still more intense pressure of population on land

Income from corner about 50% of what it should be, due to error
of architect, who aimed at a massive appearance. Morrison and
Sixth Streets, Portland, Ore.

results in apartment houses, which may properly vary in cost
from two to four times the value of the land. Where apartment
hpuses are built in smaller cities, especially if they are large and
expensive, they anticipate a pressure on land which has not
yet arrived, and are apt to be unsuccessful. Such apartment
houses sometimes cost ten to fifteen times the value of the land,
the danger of such a top-heavy investment being the abundance

106

PRINCIPLES OF CITY LAND VALUES.

of competing land which can be cheaply obtained, and the fact
that almost the entire investment is in the building, which is
certain to depreciate physically. For example, where a $50,000
apartment house has been erected on $5,000 of land, assuming in
10 years a 30% depreciation of the building, or $15,000, and a 30%
appreciation of the land, or $1,500, the net capital loss would be
$13,500. The mistake of all owners who erect expensive build-
ings on cheap land is in not realizing that buildings erected to

Equally massive, but steps omitted. Rents sacrificed. The dealer
in sewing machines and bicycles can only exhibit six bottles of oil
in each window to attract customers. Morrison and Seventh
Streets, Portland, Ore.

rent do not dominate their environment. The advantage of an
even division of investment between land and building 3« clear,
in that as against the certain physical depreciation of the build-
ing there may be an appreciation of the land to offset it. Where
tall apartment houses are erected on the corners of the traffic
streets they injure the value of the adjacent lots on the side
streets, despite their acting as buffers to the noise and dust of
the traffic streets.
With limitations, the following is an estimate of the charae-

TYPES OF BUILDINGS. 107

ter of residences as to cost, size and construction, which may
suitably be erected on land of varying values:

On land Av'ge Residences may cost.

valued front- , » »

per age of Construction may be. Per

front ft. lot. cu. ft. < Total »

$5 in smaller cities 25 Frame detached $5 to $7 $400 to $800

10" " " 25 " " 5" 7 800" 1,000

20" " " 30 " " 5" 8 1,500" 2,000

30" " " 40 " or brick 6" 9 2,500" 3,000

40' 40 " " 7 " 10 3,000" 4,000

50 " " " 50 Brick, detached 8 " 12 4,500 " 6,000

75 " " " 60 " or stone " 10 " 15 6,000 " 10,000

100'" " " 60—100 " " " " U " 18 10,000" 20,000

150 " " " 60—100 " " " " 15 " 20 12,000 " 30,000

250 " " " 75—150 " ' 15 " 25 15,000 " 50,000

500 " largest " 12—16 Brick or stone block 10 " 15 6,000 " 15,000

750 16-20 " " " " 12 " 18 10,000 " 20,000

1,000 " " " 20-25 • • 15 " 20 20,000 " 50,000

2,000 " " " 20—80 " " " •* 18 " 25 40,000 " 60,000

3.000" " " 25—40 Fireproof 30 up. 100,000 " 150,000

5,000" " " 30—50 " 40" 200,000 " 400,000

7,500-9,000" " 40-100 " 50 " 500.000 up.

One feature affecting the suitability of buildings to land is
that of the life of buildings. The useful life of a building may
be ended from any one of four causes: Physical decay, destruc-
tion by fire, change of utility, or competition of new buildings..

The physical decay of ordinary buildings depends more on re-
pairs than on the character of the original materials used. Steel
frame buildings are of such recent invention that their life has
not yet been tested, but engineers estimate that they will last
several hundred years.

An estimate of the physical depreciation of buildings if kept in
repair would be as follows:

Life in Annual

Class of building. years. depreciation.

Cheap frame tenements 10 to 15 5 to 10%

Ordinary frame residences 25 to 30 2 to 3%

Cheap brick tenements and office buildings . 25 to 30 2 to 3%

Cheap brick or stone residences 35 to 50 1 to 2 %

Better class frame residences 35 to 50 1 to 2%

" " brick and stone residences 50 to 75 1 to V/2%

Good brick and stone office buildings 75 to 100 1%

Steel skeleton buildings Unknown. ....

The loss from a change of utility is modified by the greater or
less convertibility of business buildings, many office buildings
being convertible into hotels or lodgings. Thus the old Astor
House was changed into an office building twenty or thirty years
ago, but was reconverted into a hotel, and there are many in-
stances in western cities of buildings used interconvertlbly for
lodgings or offices. The destruction of buildings from change of
utility constitutes an offset to increased value in land, in that
the more rapid the increase in land value, the more rapid the

108

PRINCIPLES OF CITY LAND VALUES.

destruction of value in the building. In locations of rapidly
changing utility, old buildings are generally considered to be of
no value. The correct basis of their value, however, would be
the amount of gross rents they will earn before being removed,
less such expenses as are due to their still standing, such as
insurance, repairs, taxes on the building only, etc. From this
standpoint the great number of old buildings are generally

Type of blocked entrance with more than 50% of frontage taken
up by obstructions. Royal Street, Mobile.

undervalued, since the process of replacing them is certain to be
a gradual one.

Competition of new buildings operates more strongly in the
case of residences and office buildings than of retail shopping
buildings. As to residences, for example, when the public has
been educated to prefer light stone or brick renaissance houses
to the old-fashioned brownstone front, and modern interior
arrangements, decoration and plumbing to former styles

TYPES OF BUILDINGS.

103

A repelling approach to a store. Liberty Street, near William
Street, New York.

and equipment, the value of the old house has about departed,
even though it is in good physical condition. As to shops, the
location is paramount, and tenants pay high rents for the ground
floor with little regard to the architectural appearance of the
building above.

The natural tendency to erect continually better and hand-
somer buildings is an added force drawing retail shops onward

110 PRINCIPLES OF CITY LAND VALUES.

How to carry on business behind a granite quarry is the problem
confronting the prospective tenant. A common error of architects
is to sacrifice income from store frontage to "solidity" of construc-
tion. Jersey Central Building. Liberty and Washington Streets,
New York.

into new locations. Thus, while the best business street in an
old city has usually been built up with brick houses two or three
stories high and converted into shops on the ground floor, the
buildings on the next business street are larger and better built,
and so on until the best section is reached. Sometimes the best

TYPES OF BUILDINGS.

Ill

buildings when new are rented for less than the old ones, but
as tenants are attracted the pressure of demand causes rents to
advance in the new buildings, while removals cause rents to
drop in the old ones. When the rents in the new buildings are
the highest in the city the shifting of the shop centre and point
of highest value has been accomplished. Efforts are sometimes
made to bring back tenants to the old buildings by improving
them, but rarely succeed, because the onward movement is too
strong to be overcome, and because the efforts are usually made

Corner store on Nicollet Avenue, Minneapolis. Removing brick
work to permit more show windows. A not uncommon recon-
struction.

too late and without co-operation among the owners of the de-
clining street. The owners of property yielding the highest
rents in the city usually anticipate nothing but continued in-
crease of rents and seldom realize that the business centre of a
ci_^ can shift, until declining rents bring this fact forcibly to
their attention. Even then many of them have not the courage
or enterprise to tear down their old buildings and erect hand-
some new ones, and others are financially unable to do so, it be-
ing more difficult to obtain building loans on a declining street
than on an improving street.

112 PRINCIPLES OF CITY LAND VALUES.

To take up the general effects of the erection of buildings, these
may either increase, diminish or have no effect upon the value of
the land covered and the surrounding land. The hypothesis of
absence of effect may be eliminated, since while the selling price
of a lot may not be affected, some effect on the surroundings will
surely result. The first principle is that if the building is suited
to the needs of the location and is equal to or superior in con-
struction, arrangement and appearance to existing buildings, it

Good and bad store fronts. The store on street level with good
windows yields about 25% more rent than the adjoining one. Madi-
son Street, Toledo.

tends to increase values, while if inferior and cheaper than ex-
isting buildings it tends to depress them. Such an effect of in-
ferior buildings is by no means uniform, as there are locations
in which the erection of any building, however poor, increases
values.

The effects of buildings differ chiefly according to whether they
are erected in a built up section within a city, or in new terri-
tory on its outskirts. If erected in a built-up section, old build-
ings are removed to make place for the new ones, public atten-

TYI'ES OF BUILDINGS.

113

The five-frot fTId on th° comer, yipldin'^ a l-^r^e income for a
saloon and advertising, illustrates the high value of a good location,
even though the area is small. Broadway, New York.

tion is attracted to the locality and the prices of surrounding
land stiffen. The new buildings are quite certain to draw some
tenants from the older surrounding buildings, so that their rents
and value will diminish, while the land being suitable for better
buildings will increase in value.

The building of new residences in long-established residence
sections tends to increase values, public opinion being apt to con-

114

PRINCIPLiES OF CITY LAND VALUES.

cede a new lease of life for i>ossibly 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 in-

Good planning of light well used for stores. Augusta, ua.

vested, which is begging the whole question. It is the business
of building operators to know what class of people can be at-
tracted 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 stand-
point that land has no value until there is demand for its utili-
zation, 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

TYPES OF BUILDINGS.

115

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 set-

IL. *''*'

1; ^ IF

fc^^^^^ "

Good store front. Wide and low windows. Piers covered by show-
cases. Summit Street, Toledo.

tlements on the upper west side in New York, and the negro
ownership on residence streets in Washington.

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

116

PRINCIPLES OF CITY LAND VALUES.

buildings demonstrates again the fact that it is effective 'lemand
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 resi-
dence district, or a saloon in a business location, which while

Good store front. Great width between piers. Low show windows
with prism glass above. Summit Street, Toledo.

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 util-
ity 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 rea-
soned, have resulted unsuccessfully, owing either, to the direc-
tion of growth or, equally important, the rate of growth, being

TYPES OF BUILDINGS.

117

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

Recessed front with piers utilized for show cases. A good plan for
so narrow a street as Nassau Street, New York.

to environment, and public buildings, factories, churches, hos-
pitals, transportation terminals, etc., being more independent.

Before outlining the normal yield and resulting land values of
the various utilities, we may note that the chief variation in
them is in the form of deductions due to nuisances, under which
name w« may class anything tending to depreciate the value of
land. The character of nuisances varies according to the section

118

PRINCIPLES OF CITY LAND VALUES.

in which they are located, the cheaper the property the more im-
pregnable to attack, and the more expensive the property the
more sensitive to the levelling power of proximity, the ten-
dency of all adjoining buildings being to strike a mean.

To classify nuisances, those affecting retail business property
are adjoining vacancies, whether caused by rebuilding, fire,
removals or failures, low class neighbors such as saloons, dilapi-
dations, whether of buildings, sidewalks or surroundings, and
topographical faults, such as sharp variations of grade, under-
ground streams or quicksands. One of the most serious draw-

Example of converted building. Old style residence altered Into
stores. Denver.

backs which could happen to business buildings would be the
construction of a viaduct carrying all the traffic past them at an
elevation, as with the 8th Street viaduct in Kansas City and the
High Holborn Viaduct in London, the latter being constructed to
avoid the blocking of traffic at the intersection of Oxford and
Farringdon's Streets. In office sections the chief nuisance to tall
buildings consists of their being crowded so close together as to
cut off light and air from each other. Apart from this, sky-
scrapers remote from the earth's surface have but little to fear,
unless it be the chimney of adjoining lower buildings, which can

TYPES OF BUILDINGS.

119

be compelled to run up higher if the smoke is objectionable.
Temporary nuisances, however, may arise at the ground level,
such as streets torn up for repairs, the laying of pipes, etc., or
sidewalks blocked while an adjacent building is being erected.

Residences are more easily affected than business property, al-
though values are lower, in that the erection of almost any build-
ing other than a residence, constitutes a nuisance. For example,
all kinds of factories, even those which emit neither smell nor

Change of utilization of building. Church converted to stores and
offices on desirable retail street. Madison Street, Toledo, O.

noise; power-houses of street railroads; hospitals, largely for
fear of infection; public schools, on account of the noise made
by the scholars; business buildings, hotels or apartment houses,
on account of their taking away light, air and quiet from the ad-
joining property; low lands, owing to fear of malaria — ^and all
cheap, old and dilapidated buildings constitute nuisances. All
rough and rocky land, or a steep grade with bluffs, hollows,
standing pools or ponds, is undesirable, unless the unsightliness

120

PRINCIPLES OF CITY LAND VALUES.

has been taken away by conversion into small parks. Stables
constitute the most common nuisance to residences in New York,
a "stable street" having a greatly diminished value, as for exam-
ple, lots on 55th Street, west of 5th Avenue, sold for about half
the price of those on 54th Street, and lots on 52d Street, east of
5th Avenue, about two-thirds the price of those on 51st Street.
Street railroads, which in the smaller cities may raise residence
values, in the larger cities are always nuisances on residence
streets, one certain result being that they attract shops, and

First Presbyterian Church located back from street. With growth
of retail business on Fourth Street the space in front was built In
with stores and offices. Entrance to church through building shown
by sign. Cincinnati.

when this process begins the desirability of the street for resi-
dence ends.

An elevated railroad renders any street through which it runs
Impossible for residences, while steam railroads ordinarily drive
residences a block or two away. Where a railroad runs in part
or in whole through a tunnel, as with the New York Central
above 56th Street, the injurious effect is modified.

Even residences are a nuisance to their neighbors if they oc-
cupy an abnormal proportion of their lot area, as where the en-
tire lot is covered except for a side light well.

TYPES OF BUILDINGS.

121

So many and so severe are the nuisances to residence property
that many residence neighborhoods are controlled by restric-
tions, usually running with the land, but sometimes limited in
time. In the smaller cities the ordinary restrictions in new resi-
dence sections provide that the premises shall be occupied for
residence purposes exclusively, that no residence shall be erected
costing less than a given amount, and that no residence shall be
placed within a certain distance of the front line of the lots.
Such restrictions greatly enhance values, in guaranteeing pro-

Change of utilization of building. Church converted into a stable.
Cheap location, not suitable for retail business. Minneapolis.

tection against cheap buildings, stores, saloons, etc. In New
York the Murray Hill restriction to residences is well known,
this having, undoubtedly helped to keep stores and apartments
iway from some locations on Murray Hill. As instancing the
value of a restriction, recently on 53d Street, west of Fifth Ave-
nue, the owner of the only two lots not restricted to private resi-
dences, having planned an apartment house, was paid |25,000 to
restrict them to private residences. The chief disadvantage in re-
stricting land to certain uses is that the utility of American city
land changes rapidly, and when residence property should be
converted to stores but cannot owing to restrictions, a serious
detriment to values occurs.

CHAPTER IX.

Rentals and Capitalization Rates*

Basis of gross business rents, what the property earns for the
tenant; of gross residence rents, what the tenant can afford
to pay.— Deductions from gross rents in properties of different
character, and table of percentages. — Effects on net rents of
fluctuations in gross rents. — Capitalization rates.

While gross rents are fixed by competition, the question arises
how do bidders determine what they can pay? The basis differs
radically between business property which earns income for the

Example of misplaced building. Expensive building on cheap land.
Foreclosed and sold at heavy loss. East Portland, Ore.

occupant as well as the owner, and residence property, which
for the occupant consumes income only.

The gross rents of business property are gauged from the eco-
nomic standpoint, these being in the long run the normal propor-
tion of what the property can earn for the tenant. The pro-
portion of gross receipts which a shopkeeper pays as rent varies

RENTALS AND CAPITALIZATION RATES.

123

according to his ability as a tradesman, the character and class
of his business, and the location, a fair average being from
20% to 40%. The better the location for retail trade the higher
the proportion of receipts paid for rent. For retail trade the
location and the consequent advertising perform the vital func-
tion of selling the goods, and the shopkeeper can largely devote

No. 1. Contrast of income between extravagant and cheap build-
ings. This building, which cost $396,000, has always yielded, in
good times and bad, less net income than the building across the
street, which cost under $20,000. This due both to bad planning
of expensive building and to high ratio of expenses, 50% to 60%
versus 15% for the cheap buildings. Second and Cherry Streets,
Seattle. (See following picture.)

his energies to selecting what the people want. Similarly, though
in a less marked way, prominent office buildings help to adver-
tise the business of their tenants. On the other hand, mercan-
tile property not on traffic streets, wholesalers, etc., pay but a
small proportion of their receipts as rent, the saving, however,
going to the hire of drummers to sell goods.

124

PRINCIPLES OF CITY LAND VALUES.

The gross rents of residences represent the proportion of in-
come which various classes can afford to pay for house rent.
While the return for such expenditure is chiefly the satisfaction
of suitable surroundings, social ambition influences all classes to
live in the best neighborhoods within their reach. The propor-
tion of rent to income varies from 15% or 20% among the
wealthy, up to 25% or 35% among tenement dwellers. Taking as

No. 2. Contrast of income between extravagant and cheap build-
ings. These cheap buildings opposite expensive building shown in
previous picture:

Cheap Expensive

buildings. buildings.

Gross rents $19,600 $34,000

Expenses 2,900 18,200

Net rents $16,700 $15,800

Or 6% on 278,000 263.000

Deduct building 20,000 396,000

Property earns 6% net on ..$258,000 minus $133,000
In other words, the expensive building is capital wasted.

RENTALS AND CAPITALIZATION RATES.

125

gross rents the amounts actually received and not the full rental
value, from which an allowanace for vacancies must be made, we
may note first the great difference in the proportion of operating
expenses according to the class of property, this varying from
10% for one or two story brick store buildings, up to 50% for
office buildings or apartment houses.

Example of misplaced building. In the despression of 1893-
1898 this building did not quite pay expenses, leaving no return for
the land, which cost $100,000, or for the building, which cost $240,-
000, while adjoining one and three-story buildings on less valuable
land, covering same area, paid 6% net on value of building, and $600
per front foot for the land. The error consisted in placing bank and
office building in small retail section. Tester Way, Seattle.

Explaining this difference is the fact that in office buildings
and apartment houses, from 20% to 25% of the rent represents
the payment for services, such as light, heat, elevator, janitors,
cleaning, &c. If from gross rentals all service charges are de-
ducted, the other charges, taxes, insurance, repairs and rent col-
lecting, approximate in percentage quite closely in all classes
of property.

126

PRINCIPLES OF CITY LAND VALUES.

Example of misplaced building. Expensive eleven-story fireproof
office building placed about 150 feet off the principal street. Has
earned from 2% to 3% net per annum as against a probable 5% if
on the best street. Land 60 feet by 62 feet, appraised $25,500. or
$425 per front foot for half depth. Building, $160,000. Building
costs 6% times the land, a "top-heavy" investment. Columbus, Ohio.

Average taxes vary somewhat in different cities. Taxes on
individual properties in the same city \ary more sharply owing
to irregular assessing by tax officials. Figuring the aver-
age of a large number of American cities, taxes range from 1^4%
to 15^% of actual value, the chief exceptions being in Washing-

RENTALS AND CAPITALIZATION RATES.

127

ton, where taxes amount to 6-10% (the U. S. government paying
half the taxes), and in San Francesco, where taxes amount to
8-10% (the city having no honded debt). The chief errors of
assessors come from their over-estimate of external appearances
and from the habit of following former assessment rolls, so that
quite uniformly property which has been valuable but which is
deteriorating is assessed higher than property in the line ot
growth and yielding larger rents.

The cost of insurance is usually so slight that it can be disre-
garded in making up the budget of annual expenses. Rates
range from .15c. to .30c. per $100 per annum for first-class risks

'2.0

0.0

Side street on lower level.

fTeT7t*?<7 per Tnotttf^

20.

»> ' Zl7 n

10.

\*4-00. \*1Z5. \*5ZS. I
pc-r -{i'\o-riX\ti

Rentals on traffic street $11,400 versus $600 on side street, or
nearly 20 to 1. This illustrates the severe drop in rentals and
values off from a traffic street. (In the present instance partly due
to grade on side street.) Corner Second and Marion Streets, Seattle.

in the larger cities, .50c. to .75c. per $100 on nrsi-ciass risks in
the smaller cities, $1.00 per $100 on stores and office buildings in
the smaller cities, and so on up.

Leases vary in their provisions as to payment for repairs by
landlord and tenant, but if paid by the tenant the rent is pro-
portionately reduced. Average repairs vary from one-half of 1%
of the value of the building per annum in the case of the high-
est type of fireproof buildings, 1% for ordinary mercantile build-
ings, 2% for older property or that of cheaper construction, 3%

128 PRINCIPLES OF CITY LAND VALUES.

to 4% for old tenements, and so on up in proportion to the age,
character of construction, and lack of care of the. buildings.

The cost of rent collecting averages from 2%% to 3% of the
rent receipts in the larger cities, according to the class of prop-
erty, and about 5% in the smaller cities, according to the class
of property. Owners who are competent to manage real estate
may save agents commissions by so doing, but instances are not
uncommon, especially as to large business property, where own-
ers managing their own property lose their time and from 20%

Example of expensive residence wrongly located in suburbs of
Indianapolis. Later surrounded by cheap cottages. Land and build-
ing appraised at $48,000. Mortgaged for $20,000. Foreclosed and
sold ten years later for $1,900.

to 30% of the income which an expert rental agent could have
obtained.

An estimated scale of proportion of total operating expenses
and net rents would be as follows, the cost of services where
rendered, as in office buildings, apartments and some tene-
ments, being included in expenses:

Expenses. Net rents.

Low retail or wholesale buildings 10-25% 90-75%

Residences 20-30% 80-70%

Non-elevator office buildings 25-35% '^^-^^'^

Tenements, non-elevator and elevator 25-45% 75-55%

Elevator apartments ' -10-55% 60-45%

Fireproof office buildings 40-65% 60-45%

RENTALS AND CAPITALIZATION RATES. 129

It is clear that the lower the cost of the building in proportion
to the value of the land, the nearer the income approaches to
pure ground rent, against which the sole charge is taxes. On
the other hand, the more expensive the building the higher the
maintenance cost, owing both to the greater number of services
rendered and to the higher standard of accommodation. Since
the operating expenses of a building, whether fully or only
partly occupied, vary but slightly, the larger the proportion of
expenses to gross rentals the more marked will be the rise or
fall of net rentals as gross rentals fluctuate. Ordinarily, expen-
sive office buildings are properly located, the chief errors being
In the erection of expensive buildings in small cities, or in poor
locations in larger cities. When hard times cause a sharp drop
in rents in the smaller cities, instances have been known of the
upper floors of such buildings not earning sufficient rent to pay
for the mere services rendered, so that it would pay for ownei^
to close the buildings above the groun4 floor, even though the
ground floor stores are in active demand. The danger to owners
of heavy fixed charges is shown in the following table:

With
percent-
age of ex- If gross Then net If gross Then net If gross Then net
penses to rents rise rents rise rents rise rents rise rents rise rents rise
gross inc. : or fall or fall. or fall or fall. or fall or fall.

40%

10%
20%
30%
40%
50%
60%

20% 22%

20% 25%

20% 29%

20% 33%

20% 40%

20% 50%

40%

40%
40%
40%

or fall.

or fall

44% 1

60%

50%

56%

60%

66%

80%
100%

60%
60%
60%

^7o
75%
85%
100%
120%
150%

The next charge against gross rents is for interest on capital
invested in the building, this being figured at the same rate as
the capitalization of the ground rent, after an allowance for de-
preciation has been made.

The final residuum constitutes the economic or ground rent,
which represents the competitive premium paid for location.
Where there is no residuum of ground rent in city land it does
not follow that the land has no value, but usually that the im-
provements are not suitable, so that the value must be esti-
mated under a different utilization. If the improvement is a
suitable one, absence of ground rent may be due to temporary
drop in rentals or bad management, all city land normally yield-
ing some ground rent.

With an established economic rent, the sole i emaining factor
to transform this into intrinsic value is the rate of capitaliza-

130

PRINCIPLES OF CITY LAND VALUES.

toion. As capitalization rates vary with securities, Government
bonds selling below a 2% basis, railroad bonds and stocks on a
31/^% to 5% basis, and industrials on a 7% to 10% basis, so the
rates of capitalization of urban rents vary from 4% lor the high-
est class property in the largest cities, to 5% and 6% for second-
class property in the same cities, or for first-class property in
smaller cities, 7%, 8% and 10% for tenements in the largest
cities, and 12% to 15% for temporary utilizations or disreputable
purposes in the smaller cities. The great power of capitalization

Substantiai buildings from which rentals and value iiave departed.
Land and building would sell for less than half the cost of the build-
ing. Front Street, Portland, Ore.

rates on values is due to the fact that for every change of 1%
in the rate of capitalization, values may change from twelve to
twenty-five times the difference in interest. For example, a
property with a net income of $10,000 would sell on an 8% basis
at $125,000, on a 6% basis at $166,000, and on a 4% basis at $250,-
000. The lower the capitalization rate the greater the effect of
any change of values: For example, a fall from 8% to 7% adds
but 14% to the value of the property, while a fall from 5% to 4%
adds 25% to the value of the property. Moreover, as large in-
terest rates apply to the largest properties all further fractional

RENTALS AND CAPITALIZATION RATES.

131

Example of financial history of real estate. Land 89 feet by 99
feet on south corner of 16th and Laurence Streets, Denver, bought
on tax title many years ago for $500. Leased 1890 for $14,000
ground rent net per annum for 99 years, or 5% on $280,000 = $3,150
per front foot. Nine-story and basement slow-burning building
erected 1890, costing $325,000. Gross rents 189i, $35,200; net
rents about $17,500, less ground rent $14,000, leaves $3,500, or 1%
net on cost of building. Leasehold mortgaged for about $75,000;
rents dropped, building surrendered to mortgagee and then to
groundowner, who acquired thus a property now renting well and
worth— land and building— about $300,000 (not $600,000, as at one
time estimated), for an original outlay of $500.

132 PRINCIPLES OP CITY LAND VALUES.

lowering of low interest rates results in an enormous mass of
values. The marked difference between capitalization rates of
high class and low class property in the same city indicates the
large number of people who desire to own high class property,
and the few who desire to own low class property. The reason
foi' such preference is that with high class property, rents are
more stable and easily collected, the property is more quickly
and certainly convertible, it can be mortgaged at a lower rate of
interest and for a larger percentage of value, the buildings de-
preciate much less rapidly and the prospects of increase in value
are better.

That land, even of the highest type and in the largest cities, is
a slow asset, is due to a number of causes, among them being
the fact that land is not easily passed from hand to hand as are
stocks and bonds, land involves personal or directly deputed
management, where stocks and bonds do not, there is no Ex-
change with daily quotations giving the values of land, as with
stocks and bonds; and finally the value of land is Influenced by
many complex changing factors, whose effects are differently
estimated by different people. Because -land is a slow asset, con-
vertibility, or certainty and speed in selling it, produces a high
premium for the best property by lowering its capitalization rate.

CHAPTER X.

Scale of Average Values.

starting with no value in city site, average values of acreage
on outskirts, mechanics' residence lots, better grades of
residence lots and business lots. — Tables of average values
for best business and best residence land in cities of different
sizes and in certain selected cities.

Starting from the condition of no value in land when a city
originates, let us consider the scale of average values of resi-
dence and business land in cities of various sizes, land used for
other purposes being omitted as being more of an individual
problem.

At the outer circumference of cities land is held as acreage, the
prices per acre advancing from the normal value of farm land
near cities, $50 to $150 per acre, up to market garden land, which
may earn interest on $300 to $1,000 per acre, and, finally, to spec-
ulative tracts held at $500 to $5,000 per acre, whose prices are
based on the estimated earnings of the land when it secures the
anticipated utilization. Since the proportion of land occupied
by streets averages about 35% , the conversion of acreage into lots
means a loss in building area of that percentage, so that with
the expenses of platting, opening streets, taxes, loss of interest,
&c., it is generally estimated that property bought by the acre
must sell by the lot for double the acre price in order to avoid
loss in handling.

The cheapest lots in any city are those utilized for workmen's
houses, varying in smaller cities from $150 to $300. The larger
the city the larger the number of well paid mechanics and the
greater the effective demand for lots. A mechanic's lot on the
outskirts of a small city differs from one on the outskirts of New
York not only in price but in size, those in small towns having
50 to 60 feet frontage, and those in New York 15 to 20 feet front-
age with usually two-family houses on them. Thus an average
price of $150 for 50x100 foot lots in small cities would be
equivalent to $1,300 per net acre after platting, or $850 per
acre as acreage, and a price of $300 for 15x100 foot lots
in large cities would be equivalent to $7,700 per net acre after
platting, or $5,000 per acre as acreage. In the outskirts of the
smaller cities platted land runs as low as $2 to $4 per front foot,
and there are built up mechanics' sections with street car ac-

134

PRINCIPLES OF CITY LAND VALUES.

■WtSHlNSTOW Af

A_J"LJftl_.

mHSJcnA^i 25 ) ( 2S ] 1 25 1 1 25

Council Bluffs. Business section. Figures represent value of
corners, for lot of average width and depth, in dollars per front foot.

SCALE OF AVERAGE VALUES.

135

Salt Lake City. Business section. Figures represent value of cor-
ners, for lot of average width and depth, in dollars per front foot.

ih=&=^

RAIi.KO/(0 TWACK3

©ULUTM..

Duluth. Business section. Figures represent value of corners, for
lot of average width and depth, in dollars per front foot.

136

PRINCIPLES OF CITY LAND VALUES.

Seattle, Wash. Business section. Figures represent value of
corners, for lot of average width and depth, in dollars per front foot.

SCALE OF AVERAGE VALUES.

137

Atlanta, Ga. Business section. Figures represent value of corners,
for lot of average width and depth, in dollars per front foot.

138

PRINCIPLES OF CITY LAND VALUES.

Sorf*ioi> fCLAim

Toledo. Business section. Figures represent value of corners, for
lot of average width and depth, in dollars per front foot.

SCALE OF AVERAGE VALUES.

139

Columbus. Business section. Figures represent value of corners
for lot of average width and depth, in dollars per front foot.

SCALE OF AVERAGE VALUES.

141

commodation less tlian a mile from tlie centre of cities of 30,000
population, where land sells at but $5 per front foot, equival-
ent to 5 cents per square foot.

From this figure, land for detached residences grades upwards
more in proportion to the class of people utilizing it than the

WALNUT GffflNO

Kansas City. Business section. Figures represent value of corners,
for lot of average width and depth, in dollars per front foot.

Size of the city, to land worth $20 to $30 per front foot for the
residences of small shopkeepeers and clerks, and $40 to $75 for
the more fashionable residences in cities of 75,000 population and
under. Such residence property would have good street car
service, graded streets, sidewalks, sewer, gas, water, electric

142 PRINCIPLES OF CITY LAND VALUES.

light, etc., the cost of which may vary from $5 to $15 per front
foot.

The best residence land in cities of 100,000 to 200,000 popula-
tion runs from $75 to $150 per front foot, in cities of 200,000
population to 400,000 population from $300 to $500 per front foot,
and in New York from $2,000 to $5,000 per front foot on the side
streets and $6,000 to $9,000 per front foot on Fifth avenue.
1 The poorest locations utilized for shops in the small cities are
ordinarily worth from $50 to $75 per front foot, from which point
values rise to an average of $600 to $800 per front foot for the
best business property in cities of 50,000 population, about $2,000
per front foot in cities of 200,000 population, $10,000 in cities of
2,000,000 population, and $15,000 to $18,000 in New York. Above
these levels, land in the financial district of New York averages
from $15,000 to $25,000 per front foot, this financial district hav-
ing no counterpart in any other American city and being due to
the supremacy of New York as a financial centre. The highest
values in London are similarly in the financial district, while in
Chicago and most of the smaller cities, shopping land, owing to
the large amount of retail business and small amount of bank-
ing, is worth about twice as much as financial land. The aver-
age figures given represent corner lots having not less than
2,500 square feet, $350 per square foot (equal to $35,000 per front
foot) having been paid thirty years ago for two small comers at
Wall and Broad Streets, and recently for a small corner at Broad-
way and 34th Street. An approximate scale of normal values
based on the consideration that each thousand of population
adds from $10 to $12 to the front foot value of the best business
locations and from $1 to $2 to the front foot value of the best
residence locations would be as follows, It being understood that
the application of any such scale Is limited in practice by differ-
ences in wealth, character of industries and inhabitants, topog-
raphy, transportation, platting, climate, etc.

TABLE I.

Best business,

Best residences.

City population.

per front ft.

26.000

$300 to $400

$25 to $40

50.000

fiOOto 1.000

40 to 75

100,000

1.200 to 2.000

75 to 150

1.50.000

1.500 to 2.500

100 to 200

200,000

1.800 to 3,000

100 to 300

300.000

2.500 to 4.500

200 to 500

600.000

4.000 to 7.000

500 to 1.000

1.000.000

7.000 to 10.000

700 to 1.500

2.000.000

fl.OOO to 1 6.000

1.000 to 2.000

3.500.000

18.000 to 35.000

4.000 to 9.000 1

SCALE OF AVERAGE VALUES.

143

The proportion between land values due to different utilities
varies widely indifferent cities, evidencing the response of special
sections to special forces. Thus the best business and the best
residence land in the same city shows in New York, with $35,000
per front foot for business and $9,000 per front foot for residence

Minneapolis. Business section. Figures represent value of corners,
for lot of average width and depth, in dollars per front foot.

land, a proportion of about 4 to 1; In Buffalo with $4,500 for
business land and $500 for residence land a proportion of 9 to 1;
In Minneapolis with $2,500 for business and $100 for residence
land a proportion of 25 to 1; and in Seattle with $2,000 for busi-

144

PRINCIPLES OF CITY LAND VALUES.

ness and $100 for residence, a proportion of 20 to 1. When we
turn to southern cities, Richmond with $1,600 for business and
$300 for residence shows a proportion of 5 to 1, and Atlanta
with $2,000 for the best business and $200 for the best residence,
a proportion of 10 to 1.

As explaining this difference between western and southern
cities, business is active and progressive in western cities, pro-
ducing high business values,while residences are scattered by the
trolley and are not held together by the old-establshed residence
sections, whereas in southern cities the scale of business opera-
tions is less, partly owing to the diminished purchasing power
of the negroes, resulting in low business values, while residence
values are raised by the greater importance attached to social
considerations and the greater age of the cities. The abnormally
high values of residence property in New York testifies to its
limited quantity and to the keen demand for it on the part of
the many millionaires who make New York their home.

Heavy wholesale property responds but feebly to increased
population, varying from $100 to $400 in value in cities of 300,-
000 people or under. Where values run above these figures the
property would include some retail feature. The proportion of
value between the best retail land and the best wholesale is,
therefore, one which increases with the size of the city, ranging
from 4 to 1 in the smaller cities, up to 10 to 1 in the largest.
Ae examples of the value of the best retail, best wholesale and
best residence land in various cities, the following list of front
foot values is submitted.

TABLE II.

Best Best Best

Population. retail. wholesale, residence.

New York 3.437,202 $18,000 $3,000 $9,000

Financial land 35,000

Chicago 1.698,575 15,000 2.000 2,000

Financial land 8,000

Philadelphia .. ..1.293,697 11,000 2,000

Washington 278.718 5.000 500

Louisville 204.731 1.700 400 150

Minneapolis 202.718 2,500 400 100

Indianapolis 169,104 2,500 400 150

Kansas City 163,752 2.500 450 150

St. Paul 163,065 1,800 400 150

Denver 133,859 1,800 250 100

Toledo 131.822 2,000 300 ' 150

Memphis 102,320 2.000 400 60

Portland, Ore 90.426 1.600 300 70

Atlanta 89.872 2,000 400 200

Richmond 85,050 1,800 150 200

Seattle 80.671 2.000 400 80

Des Moines 62.139 1,500 200 75

Salt Lake City 53,531 1,400 200 75

Duluth 52,969 1.000 300 65

Spokane 36.848 800 200 60

CHAPTER XL

Summary^

Review of evolution of value in city land, economic rent
factors of attraction and repulsion. — Value by proximity and
by accessibility. — Reactions of utilities. — Scope of individual
inquiry.— Problem always complex, change a law of life.—
While conditions change, values will change.— The study of
principles should reduce errors in judgment to a minimum.

In reviewing the evolution of value in urban land, the first step
is to conceive of the naked site apart from the buildings, having
only the qualities of location and extension and without value
until there is come ^tition for land. Intrinsic value is the capital-
ization of the economic or ground rent, provided the buildings
are suitable to the location. Bxchan :e value consists of intrinsic
value modified by future prospects. Ground rent is the residuum
after deducting from gross rents all operating charges, taxes,
insurance, repairs, rent collecting, and interest on the capital
invested in the building. Ground rent is a premium paid solely
for location and all rents are based on utility. Utilities in cities
tend constantly toward specialization and complexity, business
being broadly divided into distribution, administration and pro-
duction, and then indefinitely subdivided; and residences being
divided into as many classes as there are social grades.

Insofar as land is suitable for a single purpose only, its value
is proportionate to the degree to which it serves that purpose
and the amount which such utility can afford to pay for it
When land is suitable for a number of purposes, one utility com-
petes against another and the land goes to the highest utiliza-
tion.

The total value of a city's site is broadly based on population
and wealth, the physical city being the reflex of the total social
activities of its inhabitants. Whatever the type of city, growth
consists of movement away from the point of origin and is of
two kinds: central, or in all directions, and axial, or along the
watercourses, railroads and turnpikes which form the framework
of cities. Modern rapid transit stimulates axial growth, produc-
ing star-shaped cities, whose modification in shape comes
chiefly from topographical faults.

The factors distributing values over the city's area by attrac-
ting or repulsing various utilities, are, in the case of residences,

146

PRINCIPLES OF CITY LANB VALUES.

absence of nuisances, good approach, favorable transportation
facilities, moderate elevation and parks; in the case of retail
shops, passing streettraffic, with a tendency towards proximity to
their customers' residences; in the case of retail wholesalers and
light manufacturing, proximity to the retail stores which are
their customers; in the case of heavy wholesaling or manufac-
turing, proximity to transportation; and in the case of public

\ PJEW ORILEAKIS.iA.|

New Orleans. Business section. Figures represent value of corners,
for lot of average width and depth, in dollars per front foot.

or semi-public buildings, for historical reasons, proximity to the
old business centre; the land that is finally left being filled in
with mingled cheap utilities, parasites of the stronger utilities,
which give a low earning power to land otherwise valueless.

Value by proximity responds to central growth, diminishing
in proportion to distance from various centres, while value from
accessibility responds to axial growth, diminishing in propor-
tion to absence of transportation facilities. Change occurs not

SUMMARY.

147

COG

nan

snnnnnnnnn[

I L_l LJ LJ L.J I I [saTt lake city

nnnnBDL-

_ ^t'^^t

Salt Lake City. Residence section. Figures represent value of cor-
ners, for lot of average width and depth, in dollars per front foot.

148

PRINCIPLES OF CITY LAND VALUES.

only at the circumference but throughout the whole area, of a
city, outward growth being due both to pressure from the centre
and to aggregation at the edges. All buildings within a city
react upon each other, superior and inferior utilities displacing
each other in turn. Whatever the size or shape of a city and
however great the complexity of its utilities, the order of de-
pendence of one upon another is based on simple principles,

Seattle. Residence section. Figures represent value of corners,
for lot of average width and depth, in dollars, per front foot.

all residences seeking attractive surroundings and all business
seeking its customers.

While the outward glacial movement of a city continues, the
daily currents of travel within alter its internal structure. The
fluidity of daily traffic shifts utilities, creates plastic conditions
in cities and keeps values in a state of unstable equilibrium.

To look at the problem from the individual standpoint, in at-
tempting to state the value of any single property, the inquiry

SUMMARY.

149

would seek first, upon what forces does the city itself depend,
how permanent are they, how diversified, are they strengthening
and what is the resulting index figure, to wit, the rate of increase
of the city's population; next, what are the characteristics of the
section of the city in which the property is located, its past his-
tory, its present stability, its future prospects; what is the cen-
tral strength of the property, how near the main centre of the
city or the various su^centers of attraction; what is its axial

ICHMOND VA.

K.e.Slp>g"NCe. 3E.CT10N

Riclnnond, Va. Residence section. Figures represent value of
corners, /for lot of average width and depth, in dollars per front
foot.

Strength, the quantity, quality and regularity of the passing
travel, what is the character of building on the property as to
suitability, planning, physical condition, prospect of changing
utility, management, convertibility, gross and net income; at
what prices have surrounding property been selling, are they ris-
ing or falling, and do they suggest any factors not yet taken
into account; is the property liable to be injured or benefited
by changes in the building laws; is there any special enterprise
or strength on the part of the owner or of surrounding owners
likely to affect the property, what would be the probable effect

Columbus, O. Residence section. Figures represent value of corners, for lot of average width

and depth, in dollars per front foot.

Atlanta. Residence section. Figures represent value of corners, for
lot of average width and depth, in dollars per front foot.

Toledo. Residence section. Figures represent value of corners, for lot of average width and

depth, in dollars per front foot.

.^-,1,

a^ssi

■TunnonnGooQDDr

DODQnOOOOi

fKansas City, Mo. Residence section. Figures represent value of corners, for lot of average
width and depth, in dollars per front foot.

3Hr

™g^^l™

Minneapolis. Residence sections. Figures represent value of corners, for lot of averkge width

depth, in dollars per front f«ot.

NEW 0RLEAN5.LA

feet

New Orleans.

Residence section in American quarter. Figures represent value of corners
for lot of average width and depth, in dollars per front foot.

156 PRINCIPLES OP CITY LAND VALUES.

of any inventions or improvements in transportation or the con-
struction of buildings, and, finally, what are the general com-
mercial conditions as affecting the earning power of tenants,
actual or prospective, and financial conditions as affecting the
capitalization rate.

The problem is never a simple one, being as complex as city
life itself, but it is not insoluble, since the forces creating
cities are governed by uniform laws, like causes producing like
results, apparent exceptions being due to the influence of factors
\ not reckoned on. The popular impression that the ability to
j forecast future movements of city growth points a quick way to
I fortune is an over estimate, since real estate movements are
slow, large capital is required to handle it, carrying charges are
heavy, and even though the forecast may be ultimately correct,
the rate of movement is uncertain, depending on the operation
of vast economic forces impossible of exact prediction.
I If business expands and population increases in a city, the sum
total of land values is certain to increase. All the land, however,
will by no means increase in value, the great mass of medium
business and residence property advancing but slowly since it
supplies the wants of a large number of people of moderate
earning power who cannot pay beyond a certain price. Coin-
cident with the gradual lifting of values as population becomes
more dense, decaying sections, left behind in the onward march,
drop down the scale of inferior utilities and values, sometimes
to the point of extinction. Such worn-out property exhibits in
its dilapidations both absence of utility and public confession
of that fact. If population and business become stationary the
sum total of land values will decrease in proportion to the pre-
vious discounting of future growth, subsequent movements con-
sisting of redistribution of value, as one part of the city or an-
other, or one individual or another, flourishes or declines.

The principal causes of the redistribution of value in all cities
are, increase in population and wealth, especially in causing re-
location or extension of the best residence district, changes in
transportation, such as new surface, elevated, or underground
lines, new bridges, tunnels, ferries and railroads, and the read-
justments of new utilities in new areas harmonizing the complex
contending factors.

Present tendencies point towards greatly increased values at
strategic points, with relative and frequently absolute drops in
value in locations formerly competitive. The quiet side streets,
the back alleys and deserted nooks and corners where land has
almost no value, despite its proximity to valuable land, will doubt-
less continue at their present low planes, unless they are either

Map Showing Value per Square Foot in Dollars of New York Real

Estate.

158

PRINCIPLES OF CITY LAND VALUES.

Map Showing Value per Square Foot in Dollars of New York Real Estate.

SUMMARY. 159

reached by the spreading growth from some centre or are inter-
sected by some new traffic street.

The point of highest value, responding in scale and location
to the growth of the city, moves from the first business centre
towards the best residence district, the crest of the wave being
usually the middle of the retail shopping district, frequently
strengthened by exceptionally large and handsome buildings,
and occasionally checked by cross traffic streets. Apart from
any factors which may deflect the line of growth, the land lying
in its path is certain to increase in value, the time of such in-
crease, however, being difficult to gauge, while the land left be-
hind will usually sink in value, although in the largest cities,
while decreasing relatively in value and utility, it sometimes
increases slightly in absolute value. New York, the one financial
centre of the country, is an exception in that its financial land
is more valuable than its shopping land.

New inventions and new habits and' customs will probably
cause the most marked future changes other than those due to
growth or transportation. All cheapening of the cost of build-
ings, all improvements in construction, all inventions, tend con-
stantly to destroy the value of existing buildings. ^11 improve-
ments in transportation, such as the trolley, the elevated, the
underground, the bicycle, the automobile — and in future possibly
the flying machine — tend to destroy the value of these locations
which depend on existing transportation!] All changes in social
customs, such as longer summer absences from the city, shift
values, as in this instance from the city to the summer resorts.
The great interchange of travel throughout the year from one
city to another strengthens the radiating influence of the hotels,
while the movement from residences to flats and apartments,
concentrates population and augments the power of capital ta
attract.

Change is a law of life, and as long as human activity con-
tinues to alter the conditions of city life, and human tastes,
prejudices, fashions, habits and customs continue to vary, city
structure and values will shift and change, but the study of the
basic principles of city growth should reduce errors in fore-
casting to a minimum, permitting well equipped intelligence,
whether in buying, selling, renting, loaning on, or in any way
dealing with city real estate, to largely eliminate the power of
chance.

IIS*^C.RCULAT10^^DEPART^AENT

LOAFTPERiODl
HOME USE

«e„.«c.s end Recharges ..oy ^^-"'^J^^^^
..„..™av be Renewed byconmg_J^^ ^

DUEASgASllIl!:?^

Books may

FORM NO. DD6

^^^^^^SSi^'o .

vc 54e4i

U.C.BERKELEY LIBRARIES

CD42USimi

UNIVERSITY OF CALIFORNIA LIBRARY

.jiiMiia^