Land Regulation and the Creation of Property

In the first chapter of Elizabeth Blackmar’s “Manhattan for Rent, 1785-1850”, she writes that land was initially viewed by the Dutch and British Colonists of New York as an extractive resource. Arguably, the effort to extract the maximum value from New York land can be seen throughout history, down to the present day, albeit, in a very different way. In the early colonial times, land values on Manhattan were very low, as the city was only seen as valuable for its port. The valuable land was that which surrounded the Island, where the main export commodities, fur and timber were found in great quantity. Therefore, the area of lower Manhattan which comprised the port was granted and sold to those who had direct roles servicing and allowing the port to function. Outside of this, the ever present threat from the Native Americans to the north, made the city fairly unattractive and unstable. This instability characterized the New York City real estate market for hundreds of years, and played a role in depressing the city’s value. In fact, while contemporary developers often view regulation of property with contempt, historically, government regulation of real estate in Manhattan has been the catalyst for its explosive growth. It was not until the Commissioners Plan of 1811, which established the grid system and the created the 25’x100’ lots, that New York City began to move northward with any speed or regularity. With the introduction of the Commissioners Plan, speculative investment and development such as that described in Lawrence Veiller and Robert DeForest’s “The Tenement House Problem” could be undertaken. Prior to this, the uncertainty made most of the island unusable, as anything but farmland, in the absence of infrastructure or plans for infrastructure. Just over 100 years later, the 1916 Zoning Ordinance took this further. This revolutionary piece of legislature created, perhaps the strongest and most comprehensive set of planning and land use regulations in history. As described in Keith Revell’s “Regulating the Landscape: Real Estate Values, City Planning, and the 1916 Zoning Ordinance.”, this legislation resulted from the efforts of, primarily private entities, such as the Fifth Avenue Association. Formed of high end retailers, the rapid neighborhood change which Manhattan experienced throughout the latter half of the 19th century, largely resulting from the industrial revolution caused the private retailers to solicit public regulation to protect their considerable investments. Similarly, the disaster that was the 1915 Equitable Life Insurance Building, caused the city planners to realize the negative effects of private land use on both public and private space. Therefore, the regulation of both the use of land, and the physical form of buildings became a widely accepted practice. Throughout New York City’s history, the proactive approach to regulation of land has created a hospitable environment for the creation of one of the world’s most important property markets. This shows that while the imposition by the government on the rights of private property owners is often viewed as a nuisance by developers today, the stability, predictability, and regularity they create is invaluable and necessary for the creation of a functional modern city.