(4) Housing Conditions as Affected by the Rent Laws. The urgent necessity for these laws has been abundantly demonstrated.

According to the testimony of the presiding justice of the board of justices of the municipal court, there were on January 1, 1922, upwards of 68,000 cases pending in these courts. Where a jury trial is demanded there is at times a delay of some months in bringing the case to trial. In about 75 per cent of the rent cases a jury trial is demanded.

Owing to the fact that wherever the landlord increases the rent of a single apartment he must make a showing of the net rentals of the entire building, it has become the rule rather than the exception that all the tenants in a given building whose rents are attempted to be unduly increased very properly act together in resisting the increase. The facts bearing upon the question of reasonable rent applicable to one tenant generally apply equally to all. Where the tenants in such a case demand jury trials the law requires that each tenant shall deposit $3 for jury fees in each case, although the cases affecting that building are usually tried together, the proof of rental value being the same, or one case is tried and the others abide the result of the decision in that case.

Only one of the cases result in the remain

The committee had one instance before it in which there were 268 cases, where there was the same landlord and in which the results were based upon the same facts. was tried, under a stipulation whereby the ing 267 cases was made to abide the event of the case tried and like judgments were entered in all of them by consent. There were 268 jury fees paid in this case, which is illustrative of a vast number of the cases, making a total of $804 paid for jury fees in these cases, whereas there was but one jury and the remaining $801 should have been repaid to the tenants who made the deposits. Upwards of $40,000 in excessive jury fees have been deposited by tenants under these circumstances, the return of most of which they have been unable to secure owing to differences of opinion as to the law.

These jury fees from time to time as collected are sent to the Comptroller and the process of having each tenant secure the return of the $3 that belongs to him is so complicated and circuitous that it is practically impossible for them to get back their

money. The law should be amended so as to provide that in all cases in which there has been but one trial or where all the cases are by stipulation tried together there should be but one jury fee paid. The clerks of the courts should be authorized to retain this money for, say, 30 days after the case is decided and required meantime to return it to the tenants, after deducting a single jury fee.

Inasmuch as the rent laws are temporary and the congestion of rent cases is gradually being cleared up by the justices, aided by the decisions on the Rent Laws of the higher courts, your committee is opposed to the appointment of additional municipal justices at this time except in Seventh District, Manhattan, where the population and the business of the court has more than doubled since the present boundaries of the district were laid out.

A special study of the Municipal Court situation should be made with a view to reapportioning the districts, for since the lines. were last fixed there have been great changes in population in some of the boroughs, and in some of the districts there will be a small amount of business, while in others there is an abnormally large amount of business. It is necessary, in many cases, for litigants to travel many miles to the court house, and in their travels to pass the court house of another district.

The records show that in districts in Richmond and Queens there is not enough business to occupy the full time of the justices five days a week. The Committee believes that the present congestion could be largely relieved if there was interborough rotation of justices.

In some districts extra clerks are necessary, and the committee respectfully calls this situation to the attention of the City authorities, so that such additional help may be provided.

The Committee opposes the plan for a central jury part. This means that in the Borough of Brooklyn all who demand a jury trial in rent cases would have to go to the vicinity of Borough Hall. In some instances litigants would have to travel ten or twelve miles, and as most of the trials are attended by women, in many cases accompanied by children, this would be a great hardship. The Municipal Court is a neighborhood court. The judges should be elected by districts. If the people of the neighborhood were required to go miles in order to have a jury trial they would be compelled in many cases to waive the jury trial. The committee is opposed to the abolition of jury trials.

Certain suggestions of amendments to the law have been advanced by Associations of owners of property:

1. We have been asked to recommend that the Legislature shall fix the basis on which the Courts shall determine what is a reasonable rent by way of return on the value of the investment.

After due consideration of this subject we are of the opinion that such legislation would be impracticable and of questionable legality. That is a judicial rather than a legislative function, besides which, although the Courts have differed on the subject, they are approaching in their decisions day by day nearer to a uniform rule and one will doubtless shortly be reached.

2. It has been argued and in our judgment with conclusive force that where a tenant has been in possession under a written lease for a term of one year or more that has expired and he elects to avail himself of the provisions of the Rent Laws to continue in possession beyond the expiration of his term he shall be deemed to be a tenant from year to year dating from the expiration of his lease, subject always to the reservation that he may contest the reasonableness of the rent reserved in the lease and insist upon. the fixing of a reasonable rent by the Court.

It is not just to the landlord that the tenant in such a case should be permitted to hold over after the expiration of his lease from month to month and to retain the premises for the best season of the year and then vacate it at a time when it is difficult to secure a new tenant. It has frequently happened that tenants of this class have taken advantage of these Laws to retain possession until the commencement of the summer season and then to move into the country leaving the premises vacant at a time when other tenants are not procurable for this character of property.

So long as the right is reserved to the tenant, notwithstanding an existing or expired lease, to have the reasonable rental value of the premises determined, there is no hardship in requiring a hold-over tenant to retain and be responsible for the rent for another year. He should not be placed in a better position than the tenant who renews his lease for a year or more.

3. It has been urged that where a tenant has, since the enactment of the Rent Laws, voluntarily entered into a new lease he should not be permitted to defend against the payment of the rent reserved in that lease. The Rent Laws are predicated on the theory that on account of the famine in housing the tenant is under duress and is bound to agree to whatever terms of payment

are insisted upon by the landlord. The Committee is opposed to such an amendment or to any change in the law in that respect. It is against this situation that the Rent Laws were intended to grant relief.

4. We have been requested to urge the repeal of the concluding sentence of Section 6 which provides that:

"The plaintiff shall be entitled in costs only in the event that he recover the full amount demanded in the complaint.'

We do not approve of this suggestion. The landlord should not be encouraged to demand increases of rent that he cannot justify. If the judgment of the court awards him less than the amount claimed by him he should not be permitted to mulet the tenant in the costs of the proceeding. In that event neither party has won and the tenant usually has to employ counsel.

5. The statute should define the method of determining the value of the investment as a basis for fixing the reasonable rental value insofar as this can be lawfully done.

The present situation is unjust to the tenant. In 1919 when the housing shortage was first felt landlords began to increase rents. They continued to increase until the Rent Laws were passed in 1920 so that when these laws were put upon the statute book there had already been large increases which the laws were unable to reach, however excessive they may have been. The laws were properly made and could have been made to apply only to tenants whose rents were increased after they had been enacted.

In offering proof of the value of the property the landlord based that value largely upon the rental returns calculated upon these increased rents. The result has been to create a vicious circle based upon these increases. Every time the rent increases, however unjustifiable, the value goes up proportionately.

Another, and what has become a customary method, of supporting exorbitant rents among a large class of "sharks" that has grown up as the result of the housing famine is to increase the apparent value of the property by fictitious and colorable sales at excessive prices and then make proof of these sales as evidence of the value of the investment. This practice of "wash" sales has reached the dimensions of a recognized industry and is in the hands of men who are not builders, who never heretofore concerned themselves with real estate and who have never constructed a building.