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By Edward L. Glaeser

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City Journal

Edward L. Glaeser
Preservation Follies
Excessive landmarking threatens to make Manhattan a refuge for the rich.
Spring 2010
The destruction of the beautiful old Penn Station gave rise to the landmarking movement in New York.
Alfred Eisenstaedt/Time Life Pictures/Getty Images
The destruction of the beautiful old Penn Station gave rise to the landmarking movement in New York.

New York’s original Pennsylvania Railroad Station opened its doors in November 1910, with its towering Doric columns and a 150-foot-high waiting room based on the Baths of Caracalla in Rome. “As the crowd passed through the doors into the vast concourse,” the New York Times reported, “on every hand were heard exclamations of wonder, for none had any idea of the architectural beauty of the new structure.” But in the mid-1960s, the Pennsylvania Railroad tried to make up for falling revenues by razing the Beaux Arts structure—over the protests of architects and editorial boards—and replacing it with today’s drab station, the new Madison Square Garden, and rent-bearing office towers.

The beloved old station became a martyr for the preservationist cause. In 1965, Mayor Robert Wagner signed the law establishing the Landmarks Preservation Commission. Initially, the move seemed like a harmless sop to the activist architects. But the commission’s power soon grew, partly because it was charged not only with protecting beautiful old structures but also with establishing large historic districts. Today, New York City contains just 1,200 individually landmarked buildings, far fewer than the 25,000 buildings within its 100 historic districts. And in these districts—1,300 acres’ worth in Manhattan alone—almost every action that affects a building’s exterior must pass muster with the commission, from installing air conditioners in windows to mounting intercom boxes next to front doors. A tree can grow in Brooklyn, but not in SoHo, unless the commission decides that its leaves are no affront to that neighborhood.

It is wise and good to protect the most cherished parts of a city’s architectural history. But New York’s vast historic districts, which include thousands of utterly undistinguished structures, don’t accomplish that goal. Worse, they impede new construction, keeping real estate in New York City enormously expensive (despite a housing crash), especially in its most desirable, historically protected areas. It’s time to ask whether New York’s big historic districts make sense.

According to a law passed in 1965, to bestow historic-district status on a neighborhood, the Landmarks Preservation Commission must hold public hearings, vote, and then submit its proposal to the city council, which must approve the designation. Once that happens, the commission has enormous powers over the new district: it may “specify the nature of any construction, reconstruction, alteration or demolition of any landscape feature which may be performed” within that district. The commission began landmarking speedily after the law was passed. From 1966 to 1981, it created 20 historic districts in southern Manhattan, at a rate of about 38 acres per year. (By “southern Manhattan,” I mean the island below 96th Street—the most expensive land in the city and some of the most expensive in the world.)

The largest of these districts was Greenwich Village, which was landmarked in 1969. The plan to submit the Village to the commission’s oversight was embraced by most of its residents, despite their well-known history of fighting the government’s use of eminent domain to seize their property outright. Mayor Wagner said that he was “deeply concerned and sympathetic with the people of the West Village neighborhood in their desire to conserve and build constructively upon a neighborhood life which is an example of city community life at its healthiest.” Mayor-elect John Lindsay and mayor-to-be Ed Koch, a Village resident himself, also favored making the Village a historic district. Two property owners did file a lawsuit against the city, and large property-owning institutions like the New School and Saint Vincent’s Hospital also didn’t want their future building options curtailed. But in the end, the proposal passed, and a similar groundswell helped establish the SoHo Cast Iron District in 1973.

In 1978, the U.S. Supreme Court allowed governments to landmark commercial areas without compensating the owners, giving the Landmarks Preservation Commission a green light to expand farther into areas that had many nonresidential properties. The largest of these was the Upper East Side. Once again, effective organizers, like New Yorker drama critic Brendan Gill, rallied a sophisticated community behind the districting plan. Opponents of the Upper East Side Historic District mounted a spirited defense, challenging the notion that this large swath of Manhattan had any kind of architectural unity, but they were overwhelmed. Paul Goldberger, writing in the Times, noted that the decision put the Koch administration “squarely on the side of preservation, rather than development, of some of the city’s most expensive real estate.”

The Upper East Side Historic District was the high-water mark of preservationism in the age of Ed Koch. From May 1981 to May 1989, the commission added just five new districts in southern Manhattan, a rate of 2.82 acres per year. Perhaps the commissioner during much of this period, Gene Norman, didn’t believe in expansion as much as his predecessors did. Perhaps the commission was busy fighting other battles, like landmarking the Broadway theaters and preventing Saint Bartholomew’s on Park Avenue from erecting a tower. Or perhaps it was the spirit of the expansive eighties, when New York’s growth seemed like a pretty good thing.

But then Norman resigned, and suddenly, perhaps coincidentally, historic districting soared. Between May 1989 and December 1993, 509 extra acres were added—a pace of over 100 acres per year. Tribeca, Ladies’ Mile, and the Upper West Side—a vast collection of extremely heterogeneous buildings, many of them with little architectural distinction—were just a few of the major districts brought under the commission’s control. The bulk of this districting occurred during the mayoralty of David Dinkins. Again, that may be the result of happenstance, or of Dinkins’s appointments to the commission, or of their sense that their decisions wouldn’t be overruled.

But it’s worth noting that the districting explosion stopped as soon as Rudy Giuliani became mayor. Since 1993, the pace of historic districting in southern Manhattan has averaged about seven acres per year. Only one-tenth of the 1,200 acres that are now part of historic districts in southern Manhattan have been added since 1993. The Giuliani and Bloomberg administrations, including their commission chairs—Jennifer Raab, Sheridan Hawkins, and Robert Tierney—have shown far more restraint in increasing their sway over Manhattan than most of their predecessors did.

Nevertheless, the damage has been done. Not counting parks, southern Manhattan contains about 7,700 acres of potentially buildable area. Today, nearly 16 percent of that land is in historic districts and therefore subject to the commission’s authority. This preservation is freezing large tracts of land, rendering them unable to accommodate the thousands of people who would like to live in Manhattan but can’t afford to.

To get an idea of the way that historic districts can freeze a city, consider two recent episodes. In 1999, Citibank sold a one-story branch bank on the corner of 91st and Madison Avenue to a developer who planned a 17-story tower for the site. But the corner was within the prestigious Carnegie Hill Historic District, whose distinguished residents didn’t like the idea of another tower in their neighborhood. Woody Allen made a short video protesting the plan. Kevin Kline recited Richard II: “How sour sweet music is, / When time is broke and no proportion kept!” No New Yorker who grew up hearing Kline play Henry V in Central Park can fault the commission for being swayed by his eloquence. It told the developer to limit the building to nine stories—even though one of the few limits to the commission’s power, explicitly stated in the New York City Administrative Code, is that “nothing contained in this chapter shall be construed as authorizing the commission, in acting with respect to any historic district or improvement therein, . . . to regulate or limit the height and bulk of buildings.”

A few years later, the developer Aby Rosen wanted to erect a 22-story glass tower atop the old Sotheby Parke-Bernet building at 980 Madison Avenue, in the heart of the massive Upper East Side Historic District. Even though the building itself wasn’t landmarked, Rosen and his architect, Lord Norman Foster, proposed keeping the original building’s facade intact and letting the tower rise above it, much as the MetLife building rises above Grand Central Terminal. Once again, well-connected neighbors didn’t like the idea and took their complaints to the Landmarks Preservation Commission. Tom Wolfe, the brilliant chronicler of the foibles of New York and the real-estate industry, penned a 1,500-word piece in the New York Times insinuating that if the commission approved the project, it would betray its mission. Wolfe won, and nothing was built.

Replying to his critics (of whom I was one), Wolfe wrote in the Village Voice that “to take their theory to its logical conclusion would be to develop Central Park. . . . When you consider the thousands and thousands of people who could be housed in Central Park if they would only allow them to build it up, boy, the problem is on the way to being solved!” But building high-rises in dense neighborhoods means that you don’t have to build in green areas, whether they’re urban parks or undeveloped areas far from the city. In fact, a true preservationist should realize that building up in one area reduces the pressure to take down other buildings. Once the landmarks commission decides that a building can be knocked down—as was the case in the Battle of Carnegie Hill—it should logically demand that its replacement be as tall as possible.

Does turning a neighborhood into a historic district actually discourage new construction, as these stories suggest? To find out, I couldn’t simply use data from the U.S. Census to see if regular districts boasted more housing growth than historic districts did, because historic districts don’t match up exactly with census tracts. So I have made comparisons among three kinds of census tracts: those that have no territory within a historic district; those that have some; and those with a majority of land in a historic district.

During the 1980s, the mostly historic tracts added an average of 48 housing units apiece—noticeably fewer than the 280 units added in the partly historic tracts and the 258 units added in the nonhistoric tracts. In the 1990s, the mostly historic tracts lost an average of 94 housing units (thanks to unit consolidation or conversion to other uses), while the partly historic tracts lost an average of 46 units and the nonhistoric tracts added an average of 89 units. In short, census data show that there has indeed been less new housing built in historic districts, even though they are some of the most attractive areas in New York.

A different approach to measuring new construction is to use consumer websites to look at high-rise buildings, which make the biggest contributions to the city’s housing stock. According to Emporis.com, just five residential buildings with more than 15 stories have been erected in historic districts in southern Manhattan since 1970; that’s an average of 0.004 buildings per acre, less than half the rate in nonhistoric southern Manhattan. Nybits.com, another website, lists 234 over-15-story residential buildings built in southern Manhattan since 1981. Of these, just 6 percent were built in historic districts, even though historic districts cover 16 percent of southern Manhattan. Neither website includes every new building erected in the city, but there’s no reason to suspect that they are disproportionately missing new buildings in historic districts. Again, we see that less new housing is built in historic districts—which shouldn’t be much of a surprise.

The laws of supply and demand aren’t usually subject to legislative appeal: when the supply of something desirable is restricted, its price will typically rise. To find out whether prices have risen more quickly in historic districts than elsewhere, I have used data on more than 17,000 Manhattan condominium sales by the First American Corporation. The data cover the years between 1980 and 2002, avoiding the extreme price increases that occurred during the last eight years, and they include the addresses of the condos, making it possible to link them to historic districts.

From 1980 through 1991, the average price of a midsize condominium (between 800 and 1,200 square feet) sold in a historic district was $494,043 in today’s dollars. From 1991 through 2002, that price was $582,671—an 18 percent increase. The average price of a midsize condo outside a historic district, meanwhile, barely rose in real dollars, from $581,865 in the first decade to just $583,352 in the second. In other words, even though condos within historic districts were cheaper than those outside historic districts in the 1980s, they had become equally expensive by the 1990s. Over the entire 1980–2002 period, prices each year rose $6,000 more in historic districts than outside them.

The results tend to get stronger if you look at price per square foot, use statistical techniques to control for unit size, or expand the sample. For example, if you include units between 500 and 1,500 square feet, you’ll find that price per square foot increased by only about $5.50 outside historic districts from the first decade to the second (again, in real dollars)—but that within historic districts, the price per square foot rose from $530 to $596. The increasing cost of property in historic districts remains even if you control for those districts’ amenities, like proximity to Central Park, and if you allow that proximity to become more valuable over time.

Restricting new construction in historic districts drives up the price of housing, then. This, in turn, increasingly makes those districts exclusive enclaves of the well-to-do, educated, and white. Census data about southern Manhattan show that in 2000, average household income in census tracts that were primarily in historic districts was $183,000 (in current dollars), which was 74 percent more than that of households in tracts outside historic districts. Almost three-quarters of the adults in the mostly historic tracts had college degrees, as opposed to 54 percent in tracts outside historic districts. And people in the majority-historic tracts were 20 percent more likely to be white.

This alone isn’t surprising: architectural beauty is a luxury good, so one would expect that the prosperous would be willing to pay more to enjoy it. What’s disturbing is that historic-district status itself seems to make areas more exclusive over time, as limits on new development make it more difficult to build for people with lower incomes. In 1970, families in tracts that would eventually be located at least partly within historic districts had incomes 29 percent higher than families living outside such districts. By 2000, that gap had widened to 54 percent. Similarly, in 1970, people living in areas that would become historic districts were 4 percent more likely to be white than those outside these areas, as opposed to 15 percent 30 years later. Tracts in historic districts have also seen their share of residents with college degrees increase significantly faster than that of tracts outside historic districts.

In The Death and Life of Great American Cities, Jane Jacobs argued that “cities need old buildings” because “if a city area has only new buildings, the enterprises that can exist there are automatically limited to those that can support the high costs of new construction.” Jacobs was surely correct that cities benefit from having some less expensive real estate—but restricting the construction of new buildings doesn’t achieve that end. Prices stay low not when the building stock is frozen but when it increases to meet demand. Preservation doesn’t make New York accessible to a wider range of people; it turns the city into a preserve of the prosperous.

As if it weren’t enough that large historic districts are associated with a reduction in housing supply, higher prices, and increasingly elite residents, there’s also an aesthetic reason to be skeptical about them: they protect an abundance of uninteresting buildings that are less attractive and exciting than new structures that could replace them. Not every city, it’s worth adding, has restricted construction in its most valuable areas. Chicago has allowed an enormous number of high-rise buildings with splendid views of Lake Michigan. The result is a city with a great deal of affordable luxury housing.

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.

Research for this article was supported by the Brunie Fund for New York Journalism.

Edward L. Glaeser is a professor of economics at Harvard University, a City Journal contributing editor, and a Manhattan Institute senior fellow. He is grateful to Kristina Tobio for heroic research assistance.

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