Building the Skyline
The Birth and Growth of Manhattan’s Skyscrapers
Oxford University Press (2016)
- The first book to cover the economic history of the Manhattan skyline from 1626 to the present
- Presents a unique window into the economics of skyscrapers and demonstrates that fundamentally the skyscraper is a solution to an economic problem: how to accommodate as many people as possible on the same location on planet earth.
- Uses economic theory, statistical analysis, and historical research to understand the emergence and formation of the Manhattan skyline
- Presents a new data set never before analyzed or used to study the skyline or Manhattan’s history
- Debunks myths such as the influence of bedrock on the shape of the skyline, the unaffordability of tenement rent prices, and more
- Makes reasonable and actionable recommendations for affordable housing
Table of Contents
PART I: BEFORE THE SKYSCRAPER REVOLUTION
1. Manhattan’s Natural History
[expand title=” chapter info”]
The story of the Manhattan skyline begins with its natural history. Much has been discussed about the role of the environment and geology in influencing the city’s land use and real estate, but to fully understand how nature affected human behavior requires a review of the landscape before the arrival of the Dutch in 1609. First, this chapter chronicles Manhattan’s geological formation, and the types and depths of its bedrock. Next, the chapter discusses the effect of glaciers and the kinds of geological substances that were deposited after the end of the last Ice Age. Finally, the chapter takes the reader on a tour of Mannahatta, the lush, hilly island of forests and wetlands that was home to the Lenape Indians.[/expand]
2. Mannahatta to Manhattan: Settlement to Grid Plan
[expand title=” chapter info”]
Before the skyline could be built, New York had to create its land and the land market: hills has to be flattened, marshes drained, land distributed, subdivided, and prices assigned. The skyline emerges based on Manhattan’s early history of land formation. This chapter recounts the creation of New Amsterdam and the earliest real estate decisions. Next, the chapter discusses the 1686 Dongan Charter and the sale of water lots, which lead to the expansion of the island. The chapter also discusses the emergence of the land market and land prices in colonial New York. Following that is the history of land subdivisions and the rise of the 25 x 100 square foot lot size during the Dutch period. The chapter then discusses the creation of the Grid Plan of 1811, and how it impacted Manhattan’s real estate. [/expand]
3. Land Use before the Civil War
[expand title=” chapter info”]
This chapter discusses Manhattan’ real estate patterns before the Civil War. Fertile soil locations lead to early agricultural settlements, which influenced the location of skyscrapers two centuries later. The chapter then discusses the economic theory of land use and land values, and how it explains early neighborhood locations in colonial New York. The introduction of mass transit in the 1830s, then gave rise to an inversion of land use. The upper classes “jumped” over the lower classes to live in the northern, suburban fringes. The historical working class districts, formerly on the outskirts of the city, became folded into the center, and thus attracted the great tides of Irish and German immigrants in the mid-19th century. Despite the overcrowding and density, tenement housing was relatively affordable. These dense neighborhoods, however, “blocked” the northward movement of skyscrapers; not the bedrock valley. [/expand]
4. The Tenements and the Skyline
[expand title=” chapter info”]
The location of skyscrapers was not independent or separate from the location of the tenement districts. The “battle for place” meant that dense immigrant enclaves would emerge in some places but not others. Skyscrapers would rise in the “pockets” between the enclaves. This chapter discusses the economic theory of population density and how it can explain the location choices of immigrants and the working classes. It discusses the results of a statistical analysis which can help shed light on where the enclaves emerged and how crowded they were. Next, the chapter discusses the economics of the tenement real estate market including construction and rent prices. Finally, the chapter demonstrates how Manhattan’s long and narrow shaped influenced its land values at the dawn of the Skyscraper Revolution. [/expand]
PART II: THE RISE OF THE SKYLINE
5. The Economics of Skyscraper Height
[expand title=” chapter info”]
The Skyscraper Revolution is born in New York in 1889. This chapter chronicles the economic history of the skyscraper. First the chapter discusses how the skyscraper was a solution to an economic problem of how to house as many people possible on the same geographic coordinates. Next the chapter reviews the different types of height: engineering height, economic height, developer height, and symbolic height and how they have evolved since 1890. Then, the chapter discusses the important engineering, economic and regulatory considerations in determining skyscraper height. The role of zoning and air rights is also discussed. Finally, the chapter concludes with a comparison of the returns to skyscraper construction in 1929 with that of 2013. [/expand]
6. Measuring the Skyline
[expand title=” chapter info”]
This chapter investigates the economics of building height over the 20th century by looking the variables that influence their supply and demand. First a simple theoretical model is presented that shows the determinants of the profit maximizing height of the building. Then the chapter discusses the data that was collected to test the theory. The chapter then discusses the results of a statistical analysis to see why the economic height of skyscrapers has evolved over time. Next is a discussion of the reasons why skyscrapers might be “too tall,” including the role of income inequality, height competition, and over-optimism. The chapter presents a list of the top ten “too tall” buildings in Manhattan. Finally, the chapter concludes with a discussion of why New York has not built the world’s tallest building since 1972. [/expand]
7. The Bedrock Myth
[expand title=” chapter info”]
One of the most-cited facts about the Manhattan skyline is that there are no skyscrapers north of the City Hall and south of 14th Street because of a bedrock valley in this area. This chapter documents how this conclusion is wrong; it is a misreading of history and a confusion of causation with correlation. The chapter begins by chronicling the history of building foundations in the city and how they evolved as buildings became taller. Next several strands of evidence are provided that disprove the “Bedrock Myth.” First engineering evidence shows that very tall buildings were constructed over some of the deepest bedrock in the city; next the economic and theoretical evidence demonstrates that there were no economic supply barriers to constructing tall buildings in the valley. Rather, the problem was one of demand; developers had little incentive to build them in the dense tenement districts because they were not profitable there. [/expand]
8. The Birth of Midtown
[expand title=” chapter info”]
There are two misconceptions about why midtown emerged. First is the bedrock valley and second is Grand Central Station. This chapter demonstrates the true cause of midtown’s rise as a skyscraper district. First the chapter discusses the theory of business clustering, and the forces that drive firms to be either close to each other, or close to their customers or suppliers. Next, the chapter discusses the rise of shopping districts north of 14th Street, which developed to cater to the needs of middle and upper class residents who had been moving north on the island since the 1830s. Then the chapter turns to evidence, demonstrating that midtown was born in the 1880s around Madison Square. The skyscrapers constructed there were to house specific industries that had left downtown to be closer to consumers, such as newspaper publishers and architects. Lastly, this chapter documents the northward movement of midtown over the 20th century, and its movement was seemingly blocked by Central Park. [/expand]
9. Edifice Complex? The Cause of the 1920s Building Boom
[expand title=” chapter info”]
The skyscraper boom of the Roaring 1920s has not been subjected to much rigorous study. What caused it? There are two conventional stories: The ego story and the financing story. The ego story says that the building boom of the Roaring Twenties was caused by egos unleashed by the economic euphoria of the day. The financing story says that real estate bonds were to blame. This chapter argues that the growth of the skyline was a rational response to important structural changes in the economy, which created a tremendous demand for office space in the city; technological progress was also making building skyscrapers much cheaper. Some of the construction was caused by the stock market boom, but the rise of Midtown 2.0 was the central cause. [/expand]
10. What’s Manhattan Worth? 150 Years of Land Values
[expand title=” chapter info”]
Land values and skyscraper height are inextricably linked. But do high land values drive tall buildings or do tall buildings drive up land prices? This chapter first explores the long-run price of land in Manhattan from 1866 to 2013 and documents how land prices have risen and fallen over the period. Today, land values are at their highest level ever, yet it was a long, uneven journey. The chapter provides the first estimates of both the long-run annual return on Manhattan land (6.4%) and the 2013 market value of Manhattan ($1.6 trillion). Next, the chapter turns to the question of causality; the statistical results suggest that height is a response to the rise in land prices, but not the other way around. [/expand]
Epilogue: Resilient Skyline?
[expand title=” info”]
New York is facing two major problems: climate change and a housing shortage. The skyscraper offers a promising solution to both, but New York must reform its land use regulations. This chapter offers several policy recommendations to help alleviate these problems. Reforms include extending Manhattan into New York Bay; the elimination of rent controls; the reforming of zoning, landmarking, and real estate tax policies; and changes and investments in the city’s transportation systems. [/expand]