Ed Glaeser on historic districts in New York City

by on April 25, 2010 at 11:12 pm in Economics | Permalink

Here is his bottom line:

It’s hard to fault the Landmarks Preservation Commission for stopping development in historic districts. That’s its job: to “safeguard the city’s historic, aesthetic and cultural heritage,” as the city’s administrative code puts it. The real question is whether these vast districts should ever have been created and whether they should remain protected ground in the years ahead. No living city’s future should become a prisoner to its past.

Here is the article.

1 Ben April 25, 2010 at 11:33 pm

Glad to see preservation make an appearance on your blog.

However, Glaeser’s article is misguided. He leads the reader to believe that the majority of Manhattan and New York City is landmarked, when in fact less than 5% is in reality. Likewise, he insists that landmarking freezes development – also not true. While agency review and permits are required, new construction is often allowed – it is not a rarity whatsoever. This is true for both historic districts where new buildings are often constructed and individual landmarks that are often added to.

To claim that landmarking is responsible for high residential prices in NYC is unfair; prices are high in New York because it is a highly sought after locale. NYC is expensive in part because it is historically interesting, among many other reasons – great opportunities, culturally rich, wonderful restaurants, parks, and so on. While there is a common ground between high prices and landmarking, the relationship is not one of cause and effect.

A study conducted by the Independent Budget Office of the City of New York released in September of 2008 showed that landmarking does not exorbitantly increase property values. Rather, it stabilizes property values and produces a sustainable and moderate increase in value over the long run.

Prices are high in New York City because it is New York City. It cannot be solely attributed to what Glaeser posits as the scapegoat known as preservation. Preservation protects NYC and its property values. It certainly does not hold the city hostage.

2 anon April 26, 2010 at 1:22 am

Preservation protects NYC and its property values.

I’m not sure what “protecting property values” means. Please explain.

prices are high in New York because it is a highly sought after locale.

I agree with that. But I wonder what role rent stabilization / control plays in those NYC prices, if any. Serious question.

(I have a friend who rents a 1 BR apt, not a studio, near 69th and Lexington, and it is rent stabilized at about $475 per month.)

3 liberalarts April 26, 2010 at 7:30 am

That lower income people can’t afford to buy or rent those properties and would like to live among the prosperous in cheaper housing in unsurprising. I live in a small town with an historic district. One thing to keep in mind is that historic districts restrict in both boom times and in flat economies. Prior to the establishment of the historic district here, property owners were tearing down or very badly modifying buildings in a way that was permanently destroying the fabric of the victorian district. Without its creation 30 years ago, the ambiance would have been permanently lost, replaced with a bunch of bad 1980s architecture (or worse) that would now be not worth protecting because it would lack charm. There is a reason that tourists don’t go to the suburbs to gawk at their beauty, and there is a reason that wealthy people want to live in protected historic districts.

4 Ben April 26, 2010 at 7:52 am

Ripley – Here is the link to the IBO study – I was off on the year by 5 years: http://www.ibo.nyc.ny.us/iboreports/HistoricDistricts03.pdf

Re: “how do you account for Glaeser’s findings that housing prices have risen much more quickly in historical districts than than in other neighbourhoods” – historic districts are often, if not always, the product of grassroot effort of its residents lobbying the LPC to have their neighborhood landmarked. These residents moved to these areas (or remained in them) as a result of special character. It is in part the same special character that their designation as historic districts is based on. In other words, the historic districts are a product of an already growing market in these areas. I accept that property values and housing prices are higher within historic districts, but I’m not convinced that this is a result of their landmarking. See page 4 of the study linked above. The graph at the bottom of the page shows that increases in property values occurred both inside and outside of the historic district.

Anon, Re: “I’m not sure what ‘protecting property values’ means. Please explain.” – Landmarking has been linked to steady increases in property values. Never has an area which has been landmarked suffered severe disinvestmestment, en masse. There have been isolated incidents of demolition-by-neglect but this is not typical disinvestment. This is usually an indicator of increased property values as the owner seemingly hopes that their building collapses so that they can build a larger and more profitable building. Donovan Rypkema said something like “preservationists are never proved wrong after the fact” vis-a-vis property values. So, landmarking a safeguard and a stimulus.

Re: rent stabilization and rent controls – good question. These controls exist in both historic districts and unprotected areas. To chime in with a more ridiculous rent control anecdote, I know of someone who rents a 900 sq ft apartment in a prime neighborhood, just outside of an historic district, for less than $200 per month.

I should have been more clear – it is undeniable that landmarking benefits property values. This is a benefit of preservation in general which should be more known. But for Glaeser to blame landmarking for New York’s lack of afforable housing options is unfair.

5 NYCer April 26, 2010 at 11:06 am

Scoop,you wrote:
“Today’s architecture, though somewhat better than it was from 1946-1990 is absurdly, incredibly bad at satisfying the innate desires of normal, functional people.”

I am a practicing architect (10 yrs, CHI & NYC). Architects have clients. Clients make ALL the decisions about how much money to spend and what to spend it on. Developers make these decisions based on the demands of the market. If normal functional people really had the desires you suggest, then NYC would be filled with beautiful buildings.

The ugly buildings you see around you, post WWII, are the result of economy of means. Ornament is expensive. Every one loves old and decorative buildings because they don’t have to pay to create them.

6 Ed April 26, 2010 at 12:21 pm

What alot of this commentary misses is how truly awful architecture and urban planning became after World War II. If developers and architects continue to instist on putting up ugly buildings, then we have to limit their ability to put up any buildings.

“(I have a friend who rents a 1 BR apt, not a studio, near 69th and Lexington, and it is rent stabilized at about $475 per month.)”

I used to believe that rent control and rent stabilization kept real estate prices high in New York until I looked at the facts and found out how weak these regulations were and how few buildings were affected by them. Its really just another liberatarian (really corporatist) myth. There are far more serious distortions in the New York real estate market. Same with landmarking, as the above commentator pointed out we are talking about 5% of the city at the most that is affected by this.

7 NYCer April 26, 2010 at 1:07 pm

Scoop:
1) The answer is that not everyone was incredibly poor. The social elites who commisioned all those buildings were incredibly wealthy. To really understand the disparity, compare a wealthy American of today to the poorest of the poor in the Third world.

2) There is nothing in the NYC zoning resolution that requires 8′ ceilings, or any other proscribed ceiling height. Developers are trying to maximize the amount of floor area they can build on a given lot so as to maximize profit.

3) Re: wide open windows. If those who rent or buy apartments demanded the windows you describe, then developers and architects would provide them. Note: it might not be such a good idea have “large windows that open wide” when you are living on the 26th floor!

4) “Can you think of another mass-market technology-and-design industry that venerates the past beyond the present?”

Can you think of another industry where a present day work may literally be juxtaposed with one from a hundred or a thousand years ago? Mass-markets are a new phenomenon. Hundreds of years ago we had only the “regular” market, like the Roman Forum, which is still around, at least as a physical and aesthetic artifact. This is a bit different than tossing your old iPod because you got a new IPhone, no?

What you see as the profession getting worse, is actually the profession getting “better” by becoming more responsive to the demands of the marketplace. That this shift results in ugly buildings and alienating city-scapes is a side effect. Believe me when I say I wish it were not so.

8 Ak Mike April 26, 2010 at 3:41 pm

NYCer – just weighing in on the side of Scoop, with one reservation. Your first point doesn’t go anywhere – irrespective of how wealthy the rich of 100 years ago were, today’s developers are far far wealthier and could easily afford ornament; and what’s more ornament could be very cheap since (as with clothes) it could be done by machine. Architects could but do not advocate for it; clients would accept ornament if it were widely advocated. You can’t deny that it was architects (e.g. Van der Rohe) who led away from ornament, not clients – architects could lead back to it.

Buildings aren’t the only objects where today’s products can be easily compared with those of the past. Everyone is well aware of the clothes and cars of the past – if they wanted that, they could have it. Only in architecture is past design more desireable than of the present.

Windows, on the other hand, cannot open in large modern buildings because that would disrupt the HVAC systems. Technology to overcome this problem has yet to be developed.

9 Benjamin Hemric April 26, 2010 at 5:04 pm

PART I

I agree with the general thesis that landmarking has become excessive in New York City. However, I wonder about the arguments that Glaeser is making in this article.

(Because of its length, I’ve broken my comment up into a few parts.)

10 Benjamin Hemric April 26, 2010 at 5:06 pm

PART III

But, more importantly, Glaeser’s economic arguments seem to me to miss the main arguments made by preservationists (or, at least, their underlying arguments), and thus it seems that the two sides in this “discussion” are really talking past one another. Although I don’t necessarily agree with them, the arguments made by historic preservationists for historic districts seem to me to be the following: 1) historic districts should be designated regardless of whether or not they lead to higher prices; 2) the changes that are being protected against would ultimately lead to a degraded urban environment, and a lesser competitiveness for the city overall, in the long run; 3) rather than “over develop” the City’s historic districts (and, thus, degrade or spoil them), it’s better for the City’s non-historic districts to become more fully developed.

I think of this set of arguments as being the “lifeboat” argument: sure, we must get as many people into a lifeboat as possible; BUT at a certain point you are not helping more people by putting more people in a lifeboat, you are actually helping less — as adding more people is just going to sink the boat for everyone! (Again, I don’t necessarily agree with this argument, but it seems to me that this is what historic district propoinets are saying and Glaeser, in this article at least, doesn’t seem to me to addressing it.)

Benjamin Hemric
April 26, 2010, 5:13 p.m.

11 John Pertz April 26, 2010 at 5:19 pm

Benjamin

I think you make a good point about the Upper East Side. I would like to know what exactly Glazear was talking about in regards to the UES. Does he mean the area between 60-90th street off 5th and Madison? Or does he mean the areas near restaurant row on 2nd avenue? Certainly one can not complain about building restrictions on park avenue which is filled with high density residential development.

I find it hard to believe that the Upper East Side near 5th and Madison could ever get to a point where real estate values decrease due to new development in the area.

Prices are high in that region for a reason. It is one of the richest places on the face of the earth. Restaurants like Nello on 63rd and Madison charge customers 45 dollars for a plate of pasta so they can have the super elites eat there. I just dont envision a pace of development that could ever make that section of town more open to anyone less than the very rich.

However, other parts of the UES like Lennox Hill and Yorkville have had a lot of new development over the past 30 years so I would like to know specifically what Glazear is talking about.

12 Benjamin Hemric April 26, 2010 at 9:12 pm

PART I

Just would like to add that I agree (and also disagree) with some of the other points being made in this thread.

1) Although I too like SOME of the modern additions that have been made to the more traditional sections of New York City, as a whole I also think a large part of the energy behind landmark preservation in general, and the energy behind historic districts in particular, is actually a widespread dislike of the real life streetscapes created by modern architecture (especially when, over time, the modern architecture comes to dominate an area). And this seems to me to be the case, oftentimes, even among people who love modern architecture “in the abstract” (e.g., when seen in photographs, rather than when lived with on a day-to-day basis, etc.).

13 Benjamin Hemric April 26, 2010 at 9:13 pm

PART III

2) Despite the fact that I am skeptical about historic districts, I tend to disagree with the idea that prices in Manhattan would come down significantly if there were no such districts. To me the real problem of affordability isn’t likely to be with the landmarking of historic districts like the Upper East Side and Greenwich Village, etc., as it seems to me that a number of such districts are already high density districts with lots of high rises (for instance historic Greenwich Village has a lot more high rises than people seem to realize).

Rather the “real” problem seems to me to be the “protection” from development of various mid- and low density districts in both Manhattan and the outer boroughs — via not only landmarking but zoning and unofficial community pressure. It seems to me that a lot of these districts are really underdeveloped and would actually benefit from added density.

14 mulp April 27, 2010 at 12:43 am

The Empire State Building was built in the great depression, but has both landmark structural design, plus an architectural style that is still iconic and attractive. The WTC was a landmark structural design, and landmark butt ugly.

The restriction of landmark zones are little different than condo and apartment complex restrictions that prohibit clothes lines.

For those who object to landmark restrictions, you will appreciate the improvement the Chinese have made to old Tibetan temples where more vibrant dayglo colors have been selected to bring out the Tibetan art. No landmark czar dictating some rigid obsolete color scheme.

15 Scoop April 27, 2010 at 10:49 am

— Article Submission
Your accounting for high prices in NYC is just factually incorrect. NYC is a highly sought after locale, but there are virtually no limits to the number of people who can live there, except those that we chose to impose by building restrictions. Eliminate the building restrictions and Manhattan prices, though they’ll always be a bit higher than American norms, will plummet. Glaeser has spent many years incontrovertibly proving just that. Read through his work via Google Scholar.

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