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In 1624, when the Dutch West India Company sent about 30 families to live and work in a tiny settlement on “Nutten Island” (today’s Governors Island), there was plenty of land for families to spread out.

According to the United States Census Bureau, in 2011 the estimated NYC population was over 8,244,000 people. NYC covers only 303 square miles, so that equates to roughly 27,207 people per square mile. This is a far cry from Manila in the Philippines, the most densely populated city in the world, with over 111,000 people per square mile.

Furthermore, NYC only ranks #5 in the US in terms of density, behind 4 other cities located in New Jersey.  However, NYC is more than double the density of the next two largest cities, Chicago and Philadelphia.

So just how much of NYC’s land has been developed to accommodate all these people? And is there any land left to build?

If you consider that there is 27,878,400 square feet per square mile and 303 square miles in NYC, that would mean there is a total of 8,447,155,200 SF of land.  Manhattan accounts for 641,203,200 SF of this total, or less than 8% of the NYC land area.

Property Shark researched all the vacant land in each of the boroughs based on properties classified as vacant and parking lots. Below is a summary of their findings and the % of vacant space:

Borough

SQ Miles

Total Area (SF)

Total Unimproved Land Area *(SF)

% Unimproved Land*

Manhattan

23

641,203,200

19,532,503

3.0%

Bronx

42

1,170,892,800

59,685,245

5.1%

Brooklyn

71

1,979,366,400

70,224,364

3.5%

Queens

109

3,038,745,600

138,704,544

4.6%

Staten Island

58

1,616,947,200

203,230,832

12.6%

NYC

303

8,447,155,200

491,377,488

5.8%

* Not Including park space

As you can see, there is not much land left to develop in Manhattan with only 3% remaining; less than one square mile, whereas Staten Island offers the most land to build. In all, there is less than 20 square miles of open space left in NYC to build.

My grandfather is fond of saying why he likes buying real estate. “They’re not making any more land”. The lack of NYC land, especially land that is being actively marketed, is certainly what is driving record pricing. We have recently witnessed several Manhattan sites trade above $750/BSF. 

These premium sales have, for the most part, been boutique sites. Finding residentially zoned, large scale sites in Manhattan is becoming increasingly difficult, as almost all of it has been developed.

What we are now seeing is a trend where Manhattan developers are building in the outer boroughs. Brooklyn, where residential rents have achieved the same levels as some neighborhoods in Manhattan, has been a much sought after area.

Another trend we are seeing is developers considering commercially zoned land in Manhattan with hopes of rezoning.  Spot variances can be difficult to obtain, but City Planning has shown that they are open to rezoning, under the right circumstances.

As commercially zoned sites are more readily available, developers are looking to buy in at a lesser basis and capitalize if they are successful. If not, they will need to fall back on a commercial game plan, which usually means a hotel, unless the site is in a suitable location for office.  

Developers definitely need to figure out a way to create new product, as there is a massive shortage. According to Corcoran Sunshine, 1,980 units were absorbed during the 12-month period ended March 31st. In contrast, just 1,676 units are expected to be released into the market in each of the next three years.

Our population continues to grow and New York City’s population grew 2.1% in the last 10 years.  Meanwhile, Chicago’s population dropped 6.9% in the same period.  

I applaud the Bloomberg administration as they have looked to rezone areas that have underutilized land. Hopefully they will succeed in some of their final initiatives such as the Park Avenue rezoning, before this administration leaves office. In order for this city to continue to grow, we need to be able to build to support it.

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James P. Nelson, Partner

 

James Nelson is a Partner at Massey Knakal Realty Services. Since 1998, he has been involved in the sale of more than 200 properties and loans with an aggregate value of over $1.3 billion in the NY Metro Area. He can be reached at jnelson@masseyknakal.com or 212-696-2500 x7710.

 

To follow James on Twitter, please go to http://twitter.com/JamesNelsonMKRS or LinkedIn at  http://www.linkedin.com/in/jamesnelsonmasseyknakal.

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