Rudolf Eberstadt

Contemporary Review 96 (December 1909):660-667.

Eberstadt(1856-1922), a native of Worms, Germany, received his training as an economist and gained an appointement to a chair at the University of Berlin. He became interested in housing at an early date and wrote many publications on this and related subjects of urban land taxation, capital requirements of the housing market, and municipal land policies. He also studied and repaorted on housing conditions in The Netherlands, Britain, and the Rhineland. In 1909, the year this article appeared, he published what became the standard work on German housing before World War I, Das Handbuch des Wohungswesens und der Wohnungsfrage. With the architect and city planner, Bruno Möhring, and traffic engineer Richard Peterson, Eberstadt prepared an entry for the Greater Berlin Competition of 1910 that won second prize. As an important feature of that plan, the three authors advocated a pattern of urbana growth based on large wedges of parks and open space extending outward from the central core of the metropolis. Only the intervening areas were to be developed as radial extensions centered on transportation corridors.
Problems of town development are now being eagerly discussed in England. New measures of, perhaps, fundamental importance have been asked for and proposed. In supporting these claims, the attention of the English people has been turned to certain powers existing in Germany and hitherto not known in England. These powers relate specially to the question of regulating the development of towns by public authority. I shall try to say a few words on some of these problems, comparing the different conditions in England and Germany.

The basis of modern town development, as well as its results, is totally different in England and in Germany. In England the public early became aware of the unsatisfactory and injurious state of things which came about during the industrial evolution of the nineteenth century. A Parliamentary Commission was appointed; the Housing Act of 1851 was passed; other Acts followed; and legislation went on to the Housing of the Working Classes Act and its numerous supplements. The word by which England was guided was "Hygiene"; it was thought that certain requirements of public health must be forced upon the builder, and that thereby, mainly, a satisfactory development of town building might be arrived at. But the cutting up of the sites, and the distribution of streets and roads, were left to individual enterprise, and, generally speaking, no power existed to plan the town and lay out its streets and extension in accordance with a public plan.(1)

In Germany--not to speak of other institutions of no minor importance in town building--the public authority watches over the general construction and planning of streets, and the effects thereby arrived at one time, as it appears, captivated the views of English students.

If in every object there is a contrast between appearance and reality, certainly the contrast is sharpest in town building. I may say that here the contrast is even necessary. For when in reality housing is particularly bad, it is necessary to shape the appearance, to deceive by the external form, to counterbalance the bad state of things by a show of expense on the outside. On the other hand, where every effort is concentrated on the housing itself, little or no importance is attached to dressing up the outward features of the streets. Examples may be found everywhere; in history we may trace them back to the Roman Empire; in these days we can point to them in most countries. Until lately, the judgment of English experts on German town building has been mainly based upon the impression of the display made in our streets; and it is only within the last two years that a gradual change has been noticeable, in effecting which I am glad to say I may claim some share.

If we pass now to consider the town planning authority, I have to state at the outset that we have, in Germany, no town planning Act at all. The law under which the modern evolution of our towns has been guided is called in Prussia the "building line Act "; it was passed in 1875. The difference is a fundamental one. These two words No town planning Act, but a building line Act, will explain in one moment what mistakes have been made, and what powers ruled over our town building outward order and regularity, but not the capacity of guiding the artistic, social and economic development of modern towns. To understand this, a certain knowledge of historical facts is necessary.

To an English mind it may be difficult to conceive that our mighty German Empire is in reality a union of sovereign States (25 in number), of extremely different sizes, ranging from the huge Kingdom of Prussia down to Liliput dukedoms of the size of the Isle of Man, and free towns like Hamburg, Bremen, and Lubeck. Some hundred years ago, under the old Empire, the number of these independent States and territories was much larger. Germany was then merely a geographical notion--I might say, not a nation, but a notion. In its political weakness it was for centuries, almost naturally, the battlefield of Europe, where all nations met to fight out their quarrels. Wars of religion, like the thirty- years' war, wars of succession, wars of conquest, all were fought on our soil. The flourishing country was devastated, the towns ransacked; the whole land was exhausted.

Then upon the princes and regents of the single States devolved the task of what we call the re-establishment of their territories, that is, the restoration of what had been lost-- trade, industry and population. In all parts of Germany the Governments endeavoured to attract a new population and new manufactures for the people to live upon`. Magnificent, admirable work was done by our princes and their able administration.

Now this new population and industry had to be located and settled. And it was mainly settled in the towns, either in towns that had been ravaged and laid waste and had to be rebuilt, or in towns that were totally new founded. Therefore, the re- establishment policy of the seventeenth and eighteenth centuries, in its last and practical effect, was a policy of town building. We may call it a new colonisation This period of town building created model examples in the administrative, social and artistic development of towns' according to the requirements of the time and a truly paternal foresight. But it was the work of our princes and their State administration it belonged to the period of absolutism. The absolute State, in carrying out the designs afore-described, devoted itself to town building and managed every function connected therewith. This is the reason why we had, in Germany, an established authority for town planning; and this authority was handed down to the nineteenth century.

Not many changes occurred during the first half of the nineteenth century. After 1870 however, during the vigorous rise of our towns, there began a period of recasting our administration; a new system of self-government was introduced. The power over town planning passed from the State officials to the new municipal bodies, and there, by degrees, fell almost entirely into the hands of professional speculators. This is the point we are standing at now. We conceive now that the important authority over town planning is a most powerful instrument; that it is by no means beneficial in itself, and that all depends on the spirit in which the right of planning is exercised. Whilst the English people are still looking to the power itself, for its own sake, we know that the main difficulty consists in the application of the power, which, by its own weight, is apt to slide into the hands of professional and private interest.

What then can we learn from experience, and what have we to avoid?

Town planning has to deal with two objects (1) To cut up the land by streets, roads and open spaces; (2) to direct the form of houses erected by building enterprise. All measures taken on both lines stand in the closest connection,

If I were to sum up the questions that arise under one head, I should say Town planning in our days is a problem of economics, a problem of the creation of value, and by this peculiarity the present period is distinguished from earlier times. Formerly, the question of value was by no means decisive in town construction. In England you have, hitherto, only penetrated to the artistic side of the problem; it will cost you dear if you do not attack the economic problem. The contrast between English and German housing, too, is mainly based on problems of valuation. To speak; in concrete figures if in England building land costs £400 to £500 an acre you can plan on it at your ease a garden suburb; if it goes up to £1,000 or £2,000 you can still plan the one-family dwelling house; if, as in Germany, it rises to £10,000 and £15,000 an acre, you are compelled to build four or five-storied tenement houses. Further, if the cost price and market price of a house only differ by the builder's margin, say 10 or 15 per cent., the standard of rents will be fixed accordingly; if the market value of a house can be raised through certain operations by shifting it on to a nominal house-owner, rents will not depend on the natural and economic cost price, but on a speculative capitalised value.

First, we have then to consider the planning out of streets and roads, and their influence on the development of land values. In Germany, town building is characterised by grand imposing streets. If our people were living on asphalte[sic] and feeding on granite certainly they could not be better provided for. An explanation--but not an excuse--for this state of things can be given from historical reasons. The system of town planning handed over to us from the eighteenth century is characterised by a decided predilection for straight and wide streets. Streets were nearly all made uniform. The medieval distinction between main streets and by-lanes was discontinued. Our town builders of the nineteenth century made nearly all streets of equal width, in the large cities generally not less than seventy-five feet, thereby complying with the interests of land speculators, who were consequently entitled to erect five-storied tenement buildings and thus raise the price of land to a five-fold value.

In my first investigations (1892) I established the distinction of streets into traffic streets and residential streets; I should rather call the latter non-traffic streets (verkehrslose Strassen). However the artistic feeling of the architect might be tempted: to project broad imposing avenues, the first duty of the town planner is to make provision for the bulk of the people by devising a suitable system of residential streets. We have, in our medieval towns, examples of the old non- traffic street, showing very commendable methods of cutting up the land.(2) I ought to mention here that to keep traffic out of residential streets is necessary not only in the general interest of the population, but, above all, for the sake of the children, whose health (amongst the working classes) is mainly dependent on the opportunity of moving about in close connection with their dwelling places, without the danger of being run over. In the earlier periods, traffic was excluded from residential streets simply by gates or by employing the cul-de-sac. I may add that in the latest constructions in the workmen's towns in Rhineland, through traffic is prohibited from residential streets by public notice, a placard being posted at the entrance. The consequence is that these streets can be constructed at the lowest expense, with simple methods of pavement and without any side-walk at all.

So far a general agreement has been arrived at. In the practice of town planning, however, at this point arises a serious difficulty; it is the question how to work out the plan. In Germany we have two schools; one insists that the plan should be worked out beforehand in detail; the other one wishes only to lay down the main streets and do the general planning. In England, it must be said, there have recently been brought forward' splendid examples of town plans worked out to the last detail, and they may have given a mighty impulse to the town planning movement; I hardly need name Port Sunlight, Bourneville[sic], Letchworth, the Hampstead suburb. But English people should be aware that these plans were carried through on one estate, by one owner, for public utility, with a mind to exclude professional speculation and rise of land values. These examples cannot be applied to town planning in general; not to towns where the land belongs to several private ground-owners who look forward to a rise and who wish decidedly to raise their land in value.

In general, detailed town planning may prove as it were a pacemaker to speculation, showing the speculator and capitalist where to invest with safety. The town plan naturally points out which lands will become building sites and can be held for the rise. Therefore, it should be remembered that a detailed plan on private lands, if published beforehand, may have injurious effects which as yet have not been faced in this country. Both systems of planning ought to be taken into account, and I suggest that it ought to be considered whether town planning has not to create first only the backbone, the structure of the body of streets. The intermediate streets are to fit the general plan, but might be left to a certain extent to private enterprise.

As for the main streets--traffic streets--I should propose that in practice they should be developed as far out into the county as possible, and even prior to any actual pressing demand. This is an office, I might almost say, a duty, of public enterprise. It should further be recommended that these main streets be fitted with means of transport in advance. Every mile of a main street pushed forward stretches the range of building land on both sides in a multiplied progression. It may sound paradoxical, but I think the best method of promoting the construction of residential streets is--to advance traffic streets. I consider this system of town extension the best way of inducing private owners to sell land, and to stock the market with building sites. It ought to be kept in mind that if you had land at your disposal as large as the Arabian desert, it would not be used as building land unless it were made accessible by traffic streets and communications.

The second point refers to the type of houses. This again is a problem of value. As for workmen's houses, we may draw the limit at £1,500 an acre, or in London at £2,000 an acre, where the one-family house can be built. If the value of land rises beyond that limit, the cottage is no more practicable, and the erection of tenement houses becomes compulsory. Therefore, the question is: how prices of building land will be affected by the measures now impending.

In Germany we have now generally the five-storied tenement house in the large towns; only Bremen forms an exception, and there even the cottage house is oppressed and partly overpowered by the tenement house. The five-storied house, especially the "tenement barrack," as we call it, is the result of a quite recent and wilful development. Until 1870 we had the small house for the bulk of our working people. It has been extirpated by our modem institutions, by mistakes in town planning and in the construction of streets; and by the by-laws framed for huge buildings, calculating the thickness of walls, the width of staircases, the thoroughfares, etc., for the five-storied building, and, thereby, forcing it upon the builder. The consequence of our system was the enormous rise of land, which was over-capitalised and mortgaged, our public ledgers and land registration making it safe to shift land at an inflated price to penniless nominal owners.

The principal advantage of England in town building, compared with Germany, is the proportionately low price of building land. All our difficulties of housing in Germany spring from the high price of land. Building sites in Germany carry about five to seven times the price which is paid in England. The inflation of land values in Germany is altogether an artificial one, and contrary to the laws of public economy; for England is the land of greater capital wealth, of higher wages, and of more intense concentration of the population in towns and industrial centres. Prices of land, therefore, ought to be higher in England. The causes of the inverse condition have been hinted at before.

Apart from town planning, a certain influence on prices of building land in England might be exerted by the taxation of land, and I venture to say a few words about it. I do it with the discretion incumbent on a foreigner, that is, I shall, of course, never touch the political question, but only deal with the economic side.

The new taxation bears upon two objects totally distinct: the one is the reversion of leases or the expiration of leases generally; the other comprises building sites and unbuilt-on land. The one taxes rental value, the other taxes production.

I have nothing to say about the tax on the determination of leases. I personally think it is a good tax. I cannot say it will never affect production at all; every tax does so to a certain extent. But the influence, if any, would be an indirect one and perhaps not an unsatisfactory one. I do not think that this particular tax can be opposed on the principles of political economy.

It is not quite so with the taxation of unbuilt-on land. For there you tax production directly. A widespread theory says Land is a monopoly. If this be true--and under certain conditions it is true--must we not ask: Is this monopolist likely to give up his gain without resistance ? My investigations, on the other hand, say, land may be turned into a monopoly, and, therefore, we have to shape our institutions to prevent this, and not, as often happens, to promote it. I should, therefore, in case of a tax, propose that a duty be imposed, not uniform but on a sliding scale, beginning with low rates and gradually going up with the price, thereby awarding as it were a premium to the owner selling at a fair price and laying a charge on the owner selling at a high price.

It should be understood that in the production of houses the mass of the people have no direct share whatever. They all buy or rent a house or a tenement ready made; exactly--and even, perhaps, with fewer exceptions--as they buy their furniture and their clothes ready made. The production of houses, therefore, is an affair almost exclusively between landowner and builder. The landowner who finances the builder, who finds and procures the capital essential to production, will always get the builder on the terms that he wants. For he stands on the threshold of production

Things would be different in the case of a sliding scale. You must stop land price at a certain height, or else your English cottage home is helplessly destroyed by economic factors. The tax, as I would advise it, then might begin by the rate of 5 per cent. on sites sold up to £500 an acre; and then advance gradually by 1 per cent. for every £100 up to £1,000 an acre. Beyond £1,000 the progression might go on by 1 1/2 or 2 per cent.

I think that a progressive tax would, in the long run, prove an even more favourable measure to your exchequer than an immovable one, and that it might not have unsatisfactory effects on the selling of land and the building trade, provided that the right measures be coupled with it in town extension, construction of main roads and communications, etc. I should add that in my opinion all measures in town planning and taxation should be combined with a thorough regard for the matters of land conveyance, of mortgaging land, and of speculating by way of mortgages, questions closely connected with our subject, but not to be discussed within these lines.(3)

I have had to examine matters from both sides, and so my exposition, perhaps, contains as much of a warning as of a recommendation. In concluding, therefore, I should state that the new powers of controlling town planning and town building are, beyond doubt, necessary for urban development in England; if properly applied, they will lead to decided progress. I merely wish to say that these institutions ought not to be accepted, as it were, with a doctrinaire belief; they should be introduced into English practice with the full benefit of our continental experience. It is a common saying that imitation is the sincerest flattery. However, it seems to me that it is only weak people who would like and need to be flattered. Germany is great enough to have her institutions looked at with a critical and scrutinising eye. The history of our town building policy is a history of long struggles and many miscalculations, and is well worth close study by foreigners. It may teach the English people a useful lesson as to the necessity--and the difficulty--of prohibiting private interest from barring national progress.

1. By "town planning" is meant the drawing up of a general plan for a town or part of a town, fixing in advance the distribution of streets, roads and communications, of open spaces, parks, etc. The plan is either drawn up, or at least confirmed, by public authority. The contrasting system is the unlimited right of the individual landowner to cut up his land by streets and roads as he thinks fit, having no regard to the requirement. of fitting a general plan.

2. Cf. my "Handbuch des Wohnungswesens," 1909, p. 186.

3. Cf. "Handbuch des Wohnungswesens," pp. 113 and 258 seq. 

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