Mr. ANTHONY. All of them?

Mr. ROPER. Yes, sir.

Mr. ANTHONY. In the case of these large apartment houses where you have decided what shall be a fair rental, do the owners accept your verdict?

Mr. ROPER. Yes, sir; and the verdict takes the place of all evidence in the Municipal Court where the judgment is rendered on it and is enforcible.

Mr. ANTHONY. What is the contention in the case of this large apartment house on Sixteenth Street that you spoke about? As I remember, the commission previously recommended or issued a decision as to what the rents should be in that apartment house?

Mr. ROPER. No, sir; they have not. They have had several complaints from there which have not been heard as yet, but which will be combined with their own initiative schedule this week. The main complaint is that in spite of fairly good service, the rentals are out of all proportion to the conceivable value of six or eight rooms with ordinary service, telephone, etc. The rental for eight rooms is over $300.

Mr. WOOD. And they have recently raised the rents in that apartment house?

Mr. ROPER. I understand they have demanded increases.

The CHAIRMAN. How do you reach a conclusion as to the value of space?

Mr. ROPER. That is reached by considering many kinds of evidence. The rentals are not fixed on a per-room basis or by space. All of the facts and figures are taken into consideration. Perhaps Commissioner Oyster could tell this better, as I do not sit in the deliberations on these cases, and the system of determining this is very largely the same as obtained when Commissioner Oyster was a member and chairman of the Rent Commission.

Mr. KELLEY. I think what the chairman wanted to know was whether you used the reproduction value as the basis in fixing rents? Mr. ROPER. We consider several values. You understand, of course, I do not consider any of them because I am not in the deliberations, but the commission considers first of all, the assessed value, dividing that value by 2 and multiplying by 3 will give the appraised value, which I understand is the value in normal times when the seller does not have to sell and the buyer does not have to buy. That is the appraised value for purposes of taxation. That is one value. Second, the market value of to-day is stated by the owner as evidence at the hearing. Then there is the cost value plus the value of all improvements put on the property since the time of construction. There you have three different values and any other value that may be presented; for instance, the reproduction value, as just mentioned, is considered also. All these values are considered together. The CHAIRMAN. Do you consider the question of vacancies? Mr. ROPER. There are no vacancies to speak of.

The CHAIRMAN. Well, there may not be any vacancies, but would that be taken into consideration?

Mr. ROPER. It would, if it were brought out in evidence that there had been apartments idle.

Mr. WOOD. Is deterioration figured in?

Mr. ROPER. Yes, sir; 2 per cent, as I understand, or very close to that, is allowed for depreciation.

Mr. ANTHONY. What is the basis of gross return that you allow the owner of rented property?

Mr. ROPER. Between 6 and 8 per cent net, allowing him certain credit for his loans and the amount of interest which he pays. Mr. ANTHONY. Wear and tear, and everything?

Mr. ROPER. Yes, sir. It would vary between 6 and 8 per cent, giving the owner the benefit of the higher percentage whenever he keeps up his property in good shape.

Mr. KELLEY. What would that be gross, about 1 per cent a month? Mr. ROPER. Just about, sir. In the ordinary case, slightly over 11 per cent a year.

The CHAIRMAN. What do you expect to do with this additional money?

Mr. ROPER. We expect to run the commission from the 22d of December until May 22.

The CHAIRMAN. Does that contemplate running the commission

until

Mr. ROPER (interposing). Until May 22, the expiry date of the act.
The CHAIRMAN. Then this office expires by limitation of law?
Mr. ROPER. Yes, sir.

The CHAIRMAN. Does this cover an increased force?

Mr. ROPER. No, sir; we have capable people and we do not want employees getting in one another's way. We have a very efficient force, which we increased in May of this year; in fact, practically doubled it.

Mr. KELLEY. This is simply to pay the expenses of the commission from the time the old law stopped until the present law expires?

Mr. ROPER. It is a little better than that, because of our economy. We have an unexpended balance from our appropriation, and instead of running us only to October 22, it will run us to December 22. Mr. KELLEY. This $6,000 is the present balance?

Mr. ROPER. Yes, sir; that is the present balance, and it will be entirely expended by December 22. That makes it necessary to secure as early an appropriation as possible.

The CHAIRMAN. How many people are on your pay roll; what is the average compensation paid; and what is the aggregate pay roll monthly?

Mr. ROPER. There are 3 commissioners, 1 secretary, 1 attorney, 1 advisory assistant, and then there are 10 employees, including the secretary-reporter.

The CHAIRMAN. What is the aggregate monthly pay roll?

Mr. ROPER. The aggregate monthly pay roll is $2,815.94, plus $416.66 for the attorney.

The CHAIRMAN. How many cases are pending for adjudication. before the commission?

Mr. ROPER. There are some 800 rent cases and approximately 100 possession cases. We are up to date, and have been for some time on possession cases.

The CHAIRMAN. How many cases do you dispose of in a month? Mr. ROPER. We dispose of approximately 15 cases per day, and there are only four hearing days in a week. That would be 60 cases a week.

Mr. GALLIVAN. Does the commission take up any cases on its own initiative, or only those that are presented to it?

Mr. ROPER. Under the law they were authorized and directed to take them up on their own initiative, and they have started now to taking them up on their own initiative.

Mr. Wood. Where there is a flagrant case of overcharge on the part of a property owner, has the commission any power to inflict a penalty by an assessment of costs for the hearing, or anything of that character?

Mr. ROPER. There is power to fix certain damages, but it is a very general power. In the case of a flagrant overcharge they are enabled to fix a rent which will be a kind of penalty also. In the case of the Monmouth Hotel, the commission reduced the rents 46 per cent. That was because of the wretched condition of the building, the condition of the service, and construction, generally. That was an apartment house at 1819 G Street.

Mr. WooD. They did not tax them anything on account of the cost of the hearing?

Mr. ROPER. No, sir.

Mr. KELLEY. Where one tenant in an apartment house has a complaint, and your board reviews the situation and finds that the charge is exorbitant, do they then put the new charge into effect for other tenants?

Mr. ROPER. They have not done so previously.

Mr. KELLEY. Are they to do that?

Mr. ROPER. That is a matter of question. That has been a problem for them for sometime, and it is my opinion that they will do that in the future. We have had so much to do in the past in passing upon the complaints that were made, that we have simply passed on to another large apartment house, hoping that the owners would scale their charges down for the sake of fairness. They have done so in a few cases.

Mr. WOOD. Those have been very exceptional cases, have they not? Mr. ROPER. Yes, sir.

Mr. ANTHONY. You mentioned the case of the Monmouth Hotel: How did you fix the value of that building? Did you base it on what it actually cost? That building was erected during the peak of war time construction costs. Did you fix it upon the basis of its actual cost or upon the present day cost?

Mr. ROPER. I will have to ask Capt. Oyster to answer that question. Mr. OYSTER. It has been so long ago that I do not believe I will be competent to answer with reference to it.

Mr. KELLEY. Suppose you answer it in a general way, by stating whether you allowed the actual cost of construction to be the basis of the valuation, if that construction was made at the peak of war prices?

Mr. OYSTER. Well, each case governs itself. In the Monmouth Hotel case, that building was constructed in such a way that there was general complaint. As I recall it, there were 30 or 40 tenants who applied for a readjustment of rent there. We took the value of the property, and other contractors to give us estimates on what the building would cost. We had architects who gave us their views, and we had the assessor of the District to testify as to the ground values. We endeavored to be as liberal as possible in allowing these men a fair return on the investment. The conditions there in the Monmouth Hotel particularly were such that they were not entitled

to much, if anything, for the reason that they were denying the tenants all comforts, heat, elevator service, etc. They furnished some of the apartments, and I think they asked as much as 300 per cent on the value of the furniture, or were asking it. That was in addition to the exorbitant rent they charged them for the rooms. Mr recollection is that we cut those prices quite a good deal, especially on those furnished rooms.

Mr. ANTHONY. What has been the general policy in determining values? Do you determine them on the prewar value of the building, the actual cost of construction, or the present-day value? Would you take the actual cost of the building, if it were put up during the war peak cost of construction?

Mr. OYSTER. We estimated, of course, as to what the buildings cost, and building costs increased during the war anywhere from 10 to 30 per cent.

Mr. ANTHONY. Do you go into the actual costs?

Mr. OYSTER. We took care of each case as it was presented to us separately. Of course, some buildings were much better constructed than others, and we tried to be as liberal as we could toward the investment made by those builders.

Mr. ANTHONY. What is the interest rate for loans of money on apartment buildings now? What does the builder have to pay for his money?

Mr. OYSTER. I understand it is about 7 per cent.

Mr. ANTHONY. What is the highest rate the builder had to pay during the war?

Mr. OYSTER. The highest I ever heard of was about 8 per cent.

Mr. ANTHONY. If you allow a man only 6 per cent net revenue, how can he afford to pay 8 per cent for the money that went into the building?

Mr. ÖYSTER. The secretary of the commission has answered that. Mr. SISSON. I understood the clerk to say that they added that interest in the cost.

Mr. OYSTER. They would not allow them 6 per cent on the borrowed money.

Mr. SISSON. I understood that from the clerk.

The CHAIRMAN. He allowed that as a part of the expense of operating the building.

Mr. ANTHONY. Would it be practicable for anybody to pay 7 per cent for money that goes into rental property? Is not that practically prohibitive?

Mr. OYSTER. If they paid 7 per cent they only get 7 to 8 per cent for it.

Mr. ANTHONY. They used to pay about 5 per cent.

Mr. OYSTER. Before the war you could get money here at 4 per cent on apartment houses. Not many of them paid as much as 5 per cent but during the war the rate increased.

The Rent Commission acted very promptly after organization, and got together the best information they could get from builders and others, and they fixed what they considered a fair and reasonable. increase over the prewar prices. That was a guide in a sense for the Rent Commission, and they have followed it. They followed it until this case went to the Court of Appeals, where the law was declared unconstitutional by a divided court. Then all of these landlords who had had cases determined by the Rent Commission

immediately advanced their rents from 75 to 100 per cent. Those who have increased such prices will probably be handled by the Rent Commission, now that the Supreme Court has declared the law constitutional. I understand many of those people have come in and turned over all of the increased rent that they have collected over the amount fixed by the Rent Commission. That was largely because of the fact that a penalty was attached, and they did not want their action made public. I understand they have returned the excessive rents, or the amounts collected in excess of the rent fixed by the Rent Commission.

Mr. ŠISSON. The tenants will get the benefit of that?

Mr. OYSTER. Yes, sir.

Mr. BYRNS. Did I understand you to say that there was only one suit pending?

Mr. ROPER. No, sir; there is one large suit pending.

Mr. BYRNS. That rather indicates that the landlords of the city here see that the Rent Commission has not done them any serious injustice in fixing the rents.

Mr. ROPER. That is true. In the matter of the Monmouth Hotel, it should be pointed out that the evidence in that case showed that there was a great deal of secondhand material put into the building, even though it was built during the war. The evidence showed that the elevators were second hand, and that even the window frames were second hand. The heating plant was a vapor-heating plant which, according to some of the testimony, had not been tried out thoroughly, and even to-day it will not heat a part of the building. It is impossible to heat it, and the owner has offered $10,000, I am informed, to anybody that would show him what is wrong with the heating plant and how to make it heat the building.

Mr. OYSTER. The moral effect of that was wonderful, and it brought a great many people together on a compromise basis.

The CHAIRMAN. Will you be kind enough to furnish for the record a copy of your pay roll, and a statement of any incidental expenses you may have outside of the pay roll, so that we may have it definitely before us?

Mr. ROPER. I will do so.