If You Build It, They Might Come

Manhattan neighborhood and district zoning mapWe talk a lot about New Construction in Manhattan on this blog, mostly because it’s our name, but also because we find it interesting to research certain areas that are growing or have interesting developments under construction or in the works. Yet for all of that, none of New Construction Manhattan’s posts have ever actually compared neighborhood growth, whether it be a comparing specific areas or comparing one neighborhood against Manhattan as a whole. With new and updated mapping and data collection techniques, the 2010 Census was able to accurately depict a number of important statistics, including housing unit growth and vacancy as well as overall population growth.

Unfortunately, the Census didn’t exactly get a warm and welcome response. City officials, including the Mayor, a number of City Councilmembers, and some borough presidents derided what was seen as a vast undercount. Luckily, the areas in which they saw these errors are not in Manhattan, so the following numbers should be pretty accurate, and in any case, they seem to confirm what we’ve been predicting all along.

The first set of data to ponder is the percent change in housing units, or how much residential development, not population growth, has occurred. Using neighborhood tabulation area (NTA) boundaries, it seems that all of Manhattan apart from Greenwich and the West Village and the Upper East and West Sides is growing, with a particularly rapid expansion of housing units in Lower Manhattan and the Chelsea/Midtown West conglomeration.

However, comparing housing growth to vacancy rates yields some interesting results. While housing units actually declined in the Village, the neighborhood has some of the lowest vacancy rates in Manhattan. At the same time, Midtown and the Upper East Side suffer the most from empty units, although it’s possible that the high number of international residents would distort the reality of this number as they are not counted in the Census. Chelsea, Midtown West, Lower Manhattan, and Central Harlem also have issues with high vacancy, most likely from over-development during the housing bubble. In some ways, the law of supply and demand seems to fail, as housing prices in the first three neighborhoods are far higher than those in Harlem despite the fact that they all have similar emptiness level, although this probably has more to do with neighborhood appeal than anything else.

Extrapolating this data into real estate shows that the neighborhoods that have developed rapidly with new construction, such as Clinton and the northern reaches of Chelsea, are actually not filling up much. This doesn’t mean that they aren’t as interesting neighborhoods, but rather they are still both in transition and feeling the effects of a changing and unpredictable economy. As vacancy rates slowly decline as the economy stabilizes, it seems that the populations of these areas will grow as developers lower prices in accordance with demand as they seek new tenants and home buyers, all of whom work together to create great urban neighborhoods. It will be very interesting in another decade to see how New York City has changed, in particular where luxury new construction is taking place and how people will disperse.