Critical Period

There comes a time in the ownership of income property, particularly multiple dwellings, when the return begins to drop off. This may be due to obsolescence and reduced rents or an increase in operation and maintenance costs, including utilities, fuel, and taxes. At this point, the property may be sold (unloaded); repairs may be made to prevent further deterioration of the property; the property may be abandoned, sold, or demolished for a more appropriate use; or a minimum of repairs may be made consistent with a maximum return and tax payments delayed. This is a critical time and will determine the subsequent character of a neighborhood. In situations where repairs are not made or where a property is sold and repairs are not made and taxes are not paid, the annual rental from substandard property may equal or exceed the assessed valuation of the property. A complete return on one's investment in five to seven years is not considered unusual in view of the so-called risks involved.

Because of this, housing ordinances should be diligently enforced and owners required to reinvest a reasonable part of the income from a property in its conservation and rehabilitation, at the first signs of deterioration. This would tend to prevent rapid deterioration, the "milking" of a property, and nonpayment of taxes. The burden on the community to acquire and demolish a worthless structure for nonpayment of taxes or to maintain an eyesore and fire and accident hazard would be lessened. Shortening the time, from the usual five years to one or two years, required for the initiation of in rem * proceedings to foreclose for real estate

* Legal actions or judgments to seize property.

FIGURE 2.2 Run-down, filthy, vermin-infested backyards present many real health hazards.

tax delinquencies, while the property still has value, would reduce abandonment if coupled with firm but reasonable code enforcement. Cause for further property devaluation and extension of the blighting influence would also be reduced. See Figures 2.2 and 2.3. In New York City, in rem proceedings on one- and two-family dwellings can be taken only after three years, but after one year for multiple dwellings. An owner can redeem a building after four months and may, at the city's discretion, within two years if all back taxes and repair costs are repaid.5

It is an unfortunate practical fact, because of the complexity of the problem, that effective code enforcement for housing conservation and rehabilitation is in many places not being accomplished. Efforts suffer from frustration and lack of support, aided and abetted by government apathy or sympathy and marginal financial assistance through welfare payments. A greater return can be realized by giving greater assistance to those communities and property owners demonstrating a sincere desire to conserve and renew basically sound areas. Evidence of actual maintenance and improvement of the existing housing supply, code enforcement, encouragement of private building, low-interest mortgages, and provision of low- and middle-income housing are some of the facts that should guide the extent and amount of assistance a community receives.

Rent controls, however, can place the owners of rental properties in poor neighborhoods in a financially untenable position. An inadequate return on an investment usually leads to reduced services and maintenance and to property

FIGURE 2.3 Rental housing gross income versus total costs with time, showing critical period. Gross income tends to go down and total costs up as property ages.

FIGURE 2.3 Rental housing gross income versus total costs with time, showing critical period. Gross income tends to go down and total costs up as property ages.

deterioration. Since a significant number of renters in poor neighborhoods may be on welfare, it would appear sound to provide higher welfare rent allowances and rent subsidies tied to property maintenance and housing code compliance. But an adequate return or profit may be distorted by the sale and resale of property by speculators to dummy corporations at increasing cost. Hence, fairness and caution are necessary.

Another factor may add to the housing problem. When there is a shortage of dwelling units and rentals are high, there is pressure to purchase rather than rent. There is also an incentive to purchase since an income-tax deduction can be taken as a homeowner, which is not available to a renter. However, there is likely to be a concurrent rise in property values when this occurs because of the shortage of rental units at a moderate price. These factors favor the conversion of existing multifamily units to condominiums and construction of new condominiums, thereby excluding from the housing market many who are poor or not sufficiently affluent and those on fixed incomes who cannot afford the higher cost of a condominium. If not protected, those displaced may be forced into less desirable housing and possible exploitation, thus contributing to the spread of slums.

Health, Economic, and Social Effects

The interrelationship of housing and health is complex and not subject to exact statistical analysis. For example, poverty, malnutrition, and lack of education and medical care also have important effects on health. These may mean long hours of work with resultant fatigue, improper food, and lack of knowledge relating to disease prevention, sanitation, and personal hygiene. The problem is compounded by poor job and income opportunities and by the slum itself, through the feelings of inferiority and resentment of the residents against others who are in a better position. In addition, slums are characterized as having high delinquency, prostitution, broken homes, and other social problems. Who can say if people are sick because they are poor or poor because they are sick. Although a real association is perceived to exist between poor health and substandard housing, it has not been possible to definitely incriminate housing as the cause of a specific illness. Many factors contribute to the physical and mental health and social well being of the family and individual, of which housing or the housing environment is one.6 7 Studies show that as a matter of practical fact, many factors associated with substandard housing are profoundly detrimental to the life, health, and welfare of a community. The results of a few early studies and reports are summarized in Table 2.1.

The higher morbidity and mortality rates and the lower life expectancy associated with bad housing are also believed to be the cumulative effect or result of continual pressures on the human body. Dubos8 points out in a related discussion that many medical problems have their origin in the biological and mental adaptive responses that allowed a person earlier in life to cope with environmental threats. He adds:

The delayed results of tolerance to air pollutants symbolize the indirect dangers inherent in many forms of adaptation, encompassing adaptation to toxic substances, microbial pathogens, the various forms of malnutrition, noise, or other excessive stimuli, crowding or isolation, the tensions of competitive life, the disturbances of physiological cycles, and all other uncontrolled deleterious agencies typical of urbanized and technicized societies. Under normal circumstances, the modern environment rarely destroys human life, but frequently it spoils its later years.

Emphasis must be on preventive sanitation, medicine, architecture, and engineering to avoid some of the contributory causes of early and late disability and premature death. This avoidance includes the insidious, cumulative, long-term insults to the human body and spirit, as well as maintenance and improvement of those factors in the environment that enhance the well being and aspirations of people.

Although this discussion concentrates on the environmental health aspects of housing, it is extremely important that concurrent emphasis be placed on the elimination of poverty and on improved education for those living in poor housing and neighborhoods. It is essential that the causes of poverty and low income be attacked at the source, that usable skills be taught, and that educational levels be raised. In this way, more individuals can become more productive and self-sufficient and develop greater pride in themselves and their communities.

TABLE 2.1 Effects Associated with Substandard Housing



Health and Other


City Costs

CD rate 65%

Half of cases

Source of 40%


20% of area in

higher, VD


of mentally


city brings in

rate 13 times

one-fourth of

ill in state

twice as

6% of real

higher, CD




estate taxf

death rate as

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