The myth of the Manhattan construction boom

If you read about real estate at all on the internet, you've probably heard about the building boom happening currently in Manhattan.

The downside (one of them) of Manhattans extraordinary building boom: http://t.co/QWs4hxke1a

— Michael Barbaro (@mikiebarb) May 31, 2015

Except a funny thing about this boom is that data says it's not happening.

Real estate reporter Stephen Smith put together this chart using New York City's PLUTO data, and it shows that midway through the 2010s, structures have been added to Manhattan at what looks to be a historically sluggish pace:

Stephen Smith

Manhattan's true boom years came before the Great Depression, when the island was adding structures at a genuinely rapid clip. The Depression slowed down the pace of investment everywhere, and for much of the 1940s the construction was hobbled by wartime restrictions on residential building.

The 1960s saw a temporary surge of construction in advance of a new, more restrictive zoning code, which led to a new, slower pace of building. But the current decade has been slow even by the general postwar standard.

Yet that hasn't stopped the media from running headlines like:

• "City building boom drives up construction costs"
• "New York City's residential skyscraper boom"
• "Amid boom, fear of too many $20 million apartments"
• "Construction boom triggers big jump in NY building costs"

There are a couple of germs of truth behind these headlines. One is that New York City, like the rest of America, entered a profound construction slump during the Great Recession of 2008-'09. Compared with that, anything looks like a boom.

The other truth is that because Manhattan already contains a lot of tall buildings, and because it is already an expensive place to live, it currently features a lot of noteworthy construction projects — very tall luxury apartments.

But a true building boom typically looks nothing like this. A really booming city like Houston would have lots of normal-size new houses aimed at a comfortable but not extraordinarily rich client base.

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