Manhattan Institute

Bring Back Boomtown

For most of its history, New York was one of America’s great boomtowns, growing at a rate comparable with metro Dallas or Houston today. From America’s first census until 1930, the city’s population expanded by double-digit percentages every decade—and by more than 20 percent in every decade but one. Then, with the Great Depression and World War II, growth slowed, followed by stagnation and then by decline and abandonment, particularly in the 1970s. The greater metro region continued to grow for longer but then it, too, flatlined.

When the boom days ended, New York forgot how to grow. It took on a mindset of stasis and stagnation, adopting a zoning code in 1961 that put a de facto population cap on the city. In the half century since Robert Moses was dethroned as the region’s master builder, the city has built little infrastructure. What incremental expansions have occurred required herculean effort and obscenely high expenditures. Housing has expanded slowly.

These restrictions weren’t a problem when the city began a moderate rebound in the 1980s because there was plenty of slack to take up—land and buildings ready for redevelopment and room on the subways for more riders. A generation later, though, the city has reached the limits of incremental development. Not only has New York City hit a record high for population, but post-recession, it has added 800,000 new jobs. The result has been soaring rents in many neighborhoods as housing supply failed to keep pace with demand, increased traffic congestion, and overcrowded subways and commuter trains.

During its boomtown decades, New York met the challenge of growth with game-changing moves. It built a vast reservoir and aqueduct system to supply the city with the world’s best water. It built airports and huge networks of railroads, subways, highways, and bridges to connect newly developed areas to the center and to connect the city to the rest of the country. It built a park system—including Central Park, the world’s greatest—to give New Yorkers a high quality of life.

Boomtown New York also planned well, starting with the Manhattan grid of 1811. Consolidation in 1898 created modern New York by merging today’s five boroughs into one city. The tenement laws of the late nineteenth century mandated exterior-facing windows, air shafts, and courtyards; the 1916 Zoning Resolution ensured that streets would receive exposure to air and sunlight. These were intelligent rules that enhanced quality of life and promoted the development of buildings that still house millions of New Yorkers today.

Pro-development thinking and planning are absent today, however. It’s hard to imagine New York City or the greater region, under current assumptions, growing by even 25 percent. Austin has grown by more than that percentage just since 2010. New York needs to think like a growth city again. It needs to change the game in terms of housing, reasonably priced infrastructure, and better planning.

If the city can’t grow, it will become a giant income-sorting machine, in which richer people and businesses price out poorer ones. This prospect has already prompted a political response, with the extension of rent regulation and alternative, non-market-based forms of allocating a right to live in New York (such as housing lotteries). These efforts make growth even harder and could send the city back into decline. The city and region both lost population last year, an ominous sign.

Becoming a zero-sum town is anathema to New York’s history as a city of opportunity. To maintain that proud legacy, New York needs more housing—lots more. That means a significant rollback of development regulations to enable more building. It means thinking about new landfill to expand Manhattan, possibly in tandem with sea-level mitigation investments.

And growth can’t just be about the city. Just as Manhattan couldn’t contain the city’s original growth, the five boroughs alone are not enough today. Significant new housing should be built in the suburbs, which need to urbanize near commuter-rail stops (though not in auto-oriented areas). Significant investments in transit are needed, not just within the city but to link suburban developments to the Manhattan core, where the jobs are. Today’s commuter rail should be converted into regional rail, with all-day, high-frequency service that runs not just to but through the city. Paris already has state-of-the-art “through-running” commuter rail, and London is building it, too. Trains in New York’s metro region should seamlessly connect Long Island, Connecticut, Westchester, and New Jersey, with Manhattan as a stop but not an endpoint.

More important than any policy proposal is a change in mentality. The required transformations are possible, but not if the city continues to think like a slow-growing metropolis or continues operating as if the city is “full.” The precondition for change is a reinvigoration of the mindset that sees New York as a growth city.

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