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What's Manhattan worth? A land values index from 1950 to 2014

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  • Barr, Jason
  • Smith, Fred H.
  • Kulkarni, Sayali J.

Abstract

Using vacant land sales, we construct a land values index for Manhattan from 1950 to 2014. We find three major cycles (1950 to 1977, 1977 to 1993, and 1993 to 2009) with land values reaching their nadir in 1977, just after the city's fiscal crisis. Overall, we find the average annual real growth rate to be 5.5%. Since 1993, land prices have risen quite dramatically, and much faster than population or employment growth, at an average annual rate of 15.8%, suggesting that barriers to entry in real estate development are causing prices to rise faster than other measures of local well-being. Further, we estimate the entire amount of developable land on Manhattan in 2014 was worth approximately $1.74 trillion. This would suggest an average annual return of about 6.4% since the island was first inhabited by Dutch settlers in 1626.

Suggested Citation

  • Barr, Jason & Smith, Fred H. & Kulkarni, Sayali J., 2018. "What's Manhattan worth? A land values index from 1950 to 2014," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 1-19.
    • Handle: RePEc:eee:regeco:v:70:y:2018:i:c:p:1-19
    DOI: 10.1016/j.regsciurbeco.2018.02.003
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Value of Dirt: Introducing the Astor Index
      by Jason Barr in Skynomics Blog on 2019-09-03 12:08:02

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    Cited by:

    1. Brueckner, Jan K. & Singh, Ruchi, 2020. "Stringency of land-use regulation: Building heights in US cities," Journal of Urban Economics, Elsevier, vol. 116(C).
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    3. Song, Malin & Ma, Xiaowei & Shang, Yuping & Zhao, Xin, 2020. "Influences of land resource assets on economic growth and fluctuation in China," Resources Policy, Elsevier, vol. 68(C).
    4. John M. Clapp & Jeffrey P. Cohen & Thies Lindenthal, 2023. "Are Estimates of Rapid Growth in Urban Land Values an Artifact of the Land Residual Model?," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 373-421, February.

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    More about this item

    Keywords

    Land values; Manhattan; Price index;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • N9 - Economic History - - Regional and Urban History

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