URBAN REAL ESTATE 1. Structure of a city.---A city is an organism that has differentiated but logically related parts, each of which is devoted to a distinct and separate use. The function of the whole organism is to pro mote the convenience and comfort of the inhabitants. It is the business of the investor who operates on his own responsibility to understand the relationship of the parts. Every city of considerable size possesses a mercantile center, a transportation center, a num ber of residence districts, and a group of more or less closely connected manufacturing areas. A large city develops still greater regional specialization; it divides merchandising into wholesale and retail, and subdivides residence sections in detail according to the race and wealth of the members. Such a city will possess a theater district, a hotel district, an office dis trict, and perhaps also a civic center.
The mercantile section normally belongs at the center of the populated area, since this location is most accessible to the majority of shoppers. The railroad routes usually run thru the outskirts for sev eral reasons. In the first place, the purchase of right of way thru the center would be expensive. More over, the movement of trains thru a densely popu lated area would necessarily be slow and would con stitute no inconsiderable menace to the inhabitants; it would also be a nuisance likely to cause a shifting of other utilities. Adjoining the right of way of the railroads lie areas into which railway spurs can be built, and which are therefore suitable for heavy man ufacturing. Between the retail and the transporta tion section is a commercially active region. It has no spurs, because of its urban character. It is suit able for wholesale trade, warehousing, and light man ufacturing.
When the dominant business interests have been provided with locations, the residence sections fall naturally into place. The homes and tenements of the less well-to-do classes occupy the sections between the various business areas, and form a close ring around them. These people endure the discomfort of the noise and dust for the sake of being close to their places of employment. The finer residence sec
tions stretch away toward the country, and especially toward high and rolling ground. They seek the clean air of the windward side and the sunshine of the south side.
The precise relation of sections to one another in any individual case will be determined by the topog raphy, the presence or absence of a river, lake or harbor, the method of plotting, the location of streets suitable for use as thorofares, and the enterprise of the property-holders.
2. Mercantile highest lot values in the city are found in the mercantile section. The demand among merchants to secure favorable loca tion in this section creates high values in the center. The superior accessibility of certain central corners will raise the values there to two or three times the average of the whole district. Mr. R. M. Hurd has estimated that the poorest locations utilized by shops in small cities will ordinarily be worth $50 to $75 per front foot, while in cities of 50,000 population the values may average $600 to $800 for the best loca tions. In cities of 200,000 population the maximum may be $2,000 per front foot.
Influences that tend to create high values in a mer cantile section are central location, "corner influence," a reasonably wide street, level ground, and the pres ence nearby of institutions depending upon or re sponsible for density of traffic. On the other hand, adverse influences are vacant buildings, parks, build ings used for purposes other than those to which the district is devoted, dilapidated and unsightly struc tures, buildings in process of construction, and grades sufficient to add noticeably to the difficulty of move ment—in short, anything that interferes with the homogeneity of the district.
3. Manufacturing of value are not so clearly definable for manufacturing loca tions as for retail and residence sections. The ground is transferred largely in plots of unequal size, so that lot-unit valuations are inapplicable. The market is not active. The vacant property is commonly on the outskirts, where values are determined by speculative prospects, rather than by the sober capitalization of demonstrated income-producing power.