CHICAGO (Feb. 21)
For the first tiem since the Michigan Avenue Garden apartments were erected by the late Julius Rosenwald at a cost of $2,000,000 the big Negro apartment group has shown a loss. At the annual meeing of the board of directors of the Michigan Boulevard Garden Apartments corporation, held yesterday at the First National Bank in the offices of the chairman of the board, Edward E. Brown, the audited report disclosed a deficit of approximately $8,000 for 1933.
This is only one-half of one percent. of the capital investment after allowances for all expenses and fixed charges, it was stated by Alfred K. Stern, president of the corporation. These fixed charges include taxes and interest at five and one-half per cent. on a mortgage which has been reduced from $1,000,000 to 750,000 Juring the last three years from the profits on the operation of the building. An average depreciation of three per cent was allowed on the building and equipment.
The average occupancy for 1933 was eighty-seven per cent. and bad debts were three and one-half per cent. The report shows that the building at present has an occupancy of ninety-six per cent. with an average room rental per month of $10.50 after allowing for free gas, electricity and refrigeration and conus certifiates. This rent average is a reduction of thirty per cent. from the rental charged in 1930.
In his report Mr. Stern pointed out the earnings record of the big housing project on the $1,500,000 capital stock has been four per cent. for 1930, three and sevententh per cent. for 1931 and ninetenths per cent. for 1932. Mr Stern said the continuous record of earnings through 1930, 1931 and 1932, with only a slight loss in 1933, and the conservative write off for deprectiation and all other charges, was a better record than practicallly any other real estate development in Chicago can claim.
Mr. Stern, who is chairman of the Illinois housing commission, said: “This experiment is related to the present housing program of the federal government. Public works funds are more than justified for investment in the low cost housing field if the rents are low enough to prvide new housing for those who have not been reached by private capital during prosperous eras or in a depression.
“The experience of the Michigan Avenue Gerdens project and many others in America and Europe calls for prompt action on the part of the federal government to start sound projects in Chicago and other industrial centers.”