In these troubled economic times, real estate is a subject of more obsessive interest than usual at dinner parties from Manhattan to Milwaukee. Perhaps it’s time for us to take a longer-range view of the housing market and its endless cycles of boom and bust: Whether you’re a humble tenant or shark-like developer, it should be possible to get a little perspective by examining the great deals of the past.
1. The Antique Homemaker
1 BR “Fixer-Upper” in Ancient Babylon: The world’s oldest rental lease is a clay tablet dated to around 2000 B.C., wherein a certain Akhibe leased a house from Mashqu for one shekel of silver a year — about 0.4 ounces. (Prices don’t quite translate, since that amount of silver is only US$7 today). Rental properties at the time were intimate, one-story mud brick affairs. Not only did they come unfurnished, they were all a “handyman’s dream”: Tenants had to do their own carpentry, even fitting their own doors and windows. Rents were payable in advance every six months. Owners had to think very long-term for investment return. If the house was still in your family about 1,400 years later, under King Nebuchadnezzar in the sixth century B.C., Babylon would be the one of the world’s more desirable place to live, thanks to the fabled Hanging Gardens looming over the ziggurats and huge city walls decorated with colorful enamel images of lions and griffins. Even so, rents had only gone up 10 times the original figure.
26 BR Luxury Villa in Ancient Rome: Agents writing advertising copy for location should try “where the eyes of gods and men are fixed” — one description of the center of Rome, a white-hot real estate market for nearly three centuries. Aristocrats preferred buying to renting: Around 50 B.C., Cicero snapped up a villa on the exclusive Palatine Hill for 3.5 million sestercii — about 4,000 times the annual income of a laborer or legionary. The price was the same for your holiday villa in the Bay of Naples — the Hamptons of Antiquity — which boasted swimming pools, docks for private boats, and the all-important eel farms (a favored delicacy). Luxury villas had become excellent investments: They could be rented in the off-season for a whopping 10,000 sestercii a year and prices never dropped; a century and a half later, around 100 A.D., the poet Martial reports someone paying five times that for a similar space. Despite substantial elbow room, Roman interior décor was peculiar by modern standards (although there might be a small market for it): Violent erotic images of Europa being ravished by Zeus as a bull could grace the dining room wall, alongside paintings of skulls and marble busts of dead relatives.
Footnote: Dog days for tenants: Renters may complain today about the rates in New York, London, and Paris, but things were even harsher in ancient Rome. From the first century A.D., more than a million low-income citizens were crowded into the first great imperial city, and property developers made a killing: Landlords threw up hundreds of six-story tenements called insulae (islands) which were broken into apartments of barely 100 square feet each. And much like today, rates were always being pushed to the limit: “Ever-rising rent was the subject of eternal lamentation in Roman literature,” notes the historian Jerome Carcopino.
Ancient living conditions sound touchingly familiar today. The dwellings were notorious, one historian says, for “the fragility of their construction, the scantiness of their furniture, insufficient light and heat, and the absence of sanitation.” Roman writers such as Juvenal and Martial were constantly whining about claustrophobic spaces, which had no kitchens, bathrooms, or running water, and often had no windows. “Where has the purse of greed yawned wider?” Juvenal asked, wondering why Romans had not set up an altar to Mammon, the god of wealth.
Rome even had the first professional real estate agents. Called (appropriately enough) extractores, they were notoriously skilled at hiding an apartment’s defects and avoiding costly building repairs: “The agents would prop up a tottering wall,” observes one historian, “or paint a huge (ceiling) rift over, and assure the occupants that they could sleep at their ease, all the time that their home was crumbling over their heads.” As Juvenal wailed, sounding like a contemporary tenants’ advocate, “All low-income citizens should have marched out of Rome en masse years ago!”
2. Old World vs. New
Studio in Medieval Tower, Edinburgh — Partial Views: Space was always tight in walled cities, but one of the grungiest addresses in history was central Edinburgh, where overcrowding forced developers to construct incipient skyscrapers that were essentially 11-floor walk-ups. Here, in a narrow alley called a “close,” you could rent a top-floor apartment for a bargain 100 merks — or five and a half pounds sterling. The lower floors were the cheapest, since all upstairs tenants threw their refuse onto the street, creating rank odors and pestilence at ground level. (Residents cried “gardylou!” — a corruption of “gardez l’eau,” French for “watch out for the water!”). There was a recognized system for apartment-hunting: You would hire a savvy teenage “caddie” to guide you through the maze of streets, stopping occasionally in taverns for oysters and claret. But the city’s poor hygiene could lead to drastic eviction proceedings. In 1645, when the plague broke out in Mary King’s Close, city authorities boarded up the alleyway, leaving the residents inside to succumb, one way or the other.
Private Island in Americas, Potential for Development: The colonial era is full of subversive deal-making, but the world’s most notorious real estate coup occurred in 1626, when the energetic Dutch settler Peter Minuit, as an agent for the West India Company, purchased the unimproved woodland “island Manhattes,” covering 15,000 acres, for 60 guilders worth of goods (around $24 today). The 300 resident Native Americans, referred to in documents as the Manhatesen, were not aware they were selling their island paradise at all, thinking instead they were simply allowing the Dutch to share it. As related by Russell Shorto in The Island at the Center of the World, the chief, Sackimas, deemed that the Dutch access to Manhattan’s resources was a reasonable exchange for a valuable array of European items — knives, axes, hoes, awls, cloth, and coats, but probably not beads — and the additional promise of support by the Dutch against enemy tribes. For 40 years, the casual sharing arrangement worked well, with Indians still hunting and fishing in the forests and river-fronts. But then the Manhatesen were squeezed out to a less enviable site off-island — forests in the north, now known as the Bronx. Still, the Dutch were no visionary real estate geniuses: In 1644, they traded Manhattan for Surinam.
Footnote: Fire Sale in the Dakotas: Perhaps the second-most famous U.S. land grab was Congress’ illegal seizure of the Black Hills of South Dakota from the Oglala Lakota in 1877. Gold had been discovered three years earlier in the mountain region, which was guaranteed by an 1851 treaty as part of the 20 million acre Greater Sioux Reservation. When their leader Sitting Bull refused to sell (he picked up a pinch of dust and told negotiators, “not even as much as this”), the Lakota were cornered into a war, defeated, and evicted to a desolate reservation in the parched nearby plains. To add insult to injury, four president’s faces were carved on one of the sacred cliff faces, Mount Rushmore, in the 1930s. In 1980, the Lakota nation sued the U.S. government for violating their treaty rights. They were awarded $106 million compensation, but the Indians refused to touch the money even though their communities remained desperately poor. Today, the amount has grown to over $500 million in the bank, but Lakota leaders say they are still waiting for the U.S. to honor the 1851 treaty and return their homeland, and wear badges saying “The Black Hills are Not For Sale.”
3. This Gentrifying World
6 BR Apartment in Mozart’s Vienna, Walking Distance to Trendy Coffee Houses, Concert Halls: During Vienna’s golden age in the late 1780s, Wolfgang and his wife rented a luxury first-floor apartment in a brownstone building for 1280 gulden a year — the equivalent of $4,000 a month, historians estimate. It was the sort of place a rock star might rent short-term today, with giant bay windows, high ceilings (in this case adorned with stucco cherubs), and space for grand pianos. Leasing procedures were simple in Vienna…provided you weren’t Jewish. Tenants were obliged to sign a police declaration confirming their Christianity and attend compulsory confession every Easter. Unfortunately, the high rent (and his own spendthrift ways) eventually forced Mozart to a cheaper neighborhood called the Trattenhof where, in a rambling apartment complex of over 600 tenants, he paid less than a third the price for the same space.
Lower East Side, Old World Charm, Ideal for Share: In Manhattan’s crowded downtown in the 1870s, a 300-square-foot room in a “three-bedroom” tenement went for $15 a month — about 10 days’ work for an unskilled laborer. Most tenants were forced to share with multiple roommates, piling in a family of up to six people per room. At night, the floors were covered with mattresses and cots, with the sharing of bacteria guaranteed. The darker, rear-facing rooms were cheaper, as were the upper floors, since the winter trip to the WC in the backyard could be a challenge. Ventilation was a serious problem in summer, so tenants migrated to the roof to sleep beneath the stars.
Unfurnished Garret in Depression-era Paris, Suit Artist: To the distress of French landlords, Paris instituted rent control during the First World War, allowing a wave of expat American writers and painters to cling there like barnacles in the 1920s. Hemingway and Fitzgerald also had it good thanks to devaluation of the franc, but Paris became even cheaper during the Depression: In 1934, even the impoverished writer Henry Miller was able to stop sleeping on friends’ floors and acquire his own apartment at 18 Villa Seurat for a song at 700 francs a month (then $46). Fellow writers helped him repaint the walls, a friend donated a record collection, and Anaïs Nin provided a rug and curtains. The previous tenant, actor Antonin Artaud (who had invented the “Theater of Cruelty”) left an out-of-tune piano. It was situated on the second floor, with a sunny parlor, skylight, and galley-sized kitchen, but the main drawback for the bald bohemian was its poor heating. (“No shag-pate, what! I work with hat and shawl!”)
In the same rental market, broke Brit George Orwell found a bargain apartment at 250 francs a month ($16). Orwell took a certain pride in its decrepitude, insisting that he could live on six francs a day (about 40 cents). His diet was mainly bread, margarine, and the occasional glass of wine. It was during this time, biographers suspect, that Orwell contracted the tuberculosis that killed him at age 46. • 18 June 2010
SOURCE/FURTHER READING: Carcopino, Jerome, Daily Life in Ancient Rome: the People and the City at the Height of the Empire, (New York, 2007); Hall, Peter, Cities in Civilization, (New York, 2006); Shorto, Russell, The Island at the Center of the World: the Epic Story of Dutch Manhattan and the Forgotten Colony that Shaped America, (New York, 2004).