Supreme City CHAPTER EIGHT STREET OF DREAMS Park Avenue on the island of Manhattan is the end of the American ladder of success. Higher one cannot go. STUART CHASE, 1927 The Building Boom It was the most spectacular decade of building in the city''s history. During World War I both commercial and housing construction declined sharply nationwide, with workers and building materials directed toward military mobilization. But after a severe postwar recession, the economy rebounded robustly in late 1921 and for the next eight years a new building went up in New York City every fifty-one minutes, on average. Older buildings were demolished at an equally rapid rate. The Grand Central Terminal Zone was the eye of this hurricane of construction activity. In the years between the opening of Grand Central and the Lindbergh parade, the assessed value of land in Terminal City shot up nearly 250 percent.
"The city is being rebuilt," wrote The New York Times in late 1926. "In not more than half a dozen years the skyline of midtown Manhattan . [and] Park Avenue has been lifted a hundred feet." The speculative fever was abetted by an acute postwar shortage of housing and office space, and by new sources of investment capital available to real estate developers. "The building orgy outlasted and outdid all others in New York real estate history," explained historian Arthur Pound, "because ways and means were found for getting the little fellow''s money into big deals." The commercial real estate business was no longer governed by transactions between one buyer and one seller. Large landholding companies emerged and sold stock on the open market, making it easier to become a real estate investor "than buying sugar." Small investors were also enticed into purchasing mortgage bonds.
These were created by splitting up large mortgages into smaller, affordable parcels, a practice introduced years earlier by the New York Central and other big railroad companies. Mortgage companies pledged to safeguard the bond holdings of small investors, promising them that their money was more secure than it would be in the vaults of their neighborhood banks. "So assured, a public, ignorant of risk, was drawn into the risky game of real estate speculation," wrote Pound. When the supply of housing and office space finally began to overtake demand in 1927, New York architects and real estate developers remained serenely confident that blue skies were in the financial forecast for years, perhaps decades, to come. After the speculative bubble burst in October 1929, the solemn guarantees of the bond hucksters proved worthless, and investors, small and large, were ruined. But in the buoyant 1920s, such a bleak scenario was beyond imagining for most New Yorkers. The building boom fed on itself. Spiraling land values drove up taxes on older rental properties, providing incentive for owners of prime Manhattan real estate to build taller buildings, with more rental space, on their heavily taxed sites.
City government poured oil on the fire. In 1921, in response to the housing shortage, it exempted new residential construction from real estate taxes for a period of ten years. No single piece of legislation in New York history gave a greater boost to the city''s construction industry. In the 1920s, New York City would account for fully 20 percent of all new residential construction in the country. Builders of large apartment houses were the pacesetters. In 1926, 77 percent of all new residential construction was given over to apartment dwellings. The following year only five new single-family houses were built in all of Manhattan; and for half of that year, the city''s Building Department failed to receive a single application for a permit to put up a private house. Almost none of the new money available for housing went to the construction of apartments for the needy.
The returns were vastly greater on high-end construction on Park Avenue than they would have been on modest apartments on the Lower East Side. Here, as in nearly every other sector of the city''s commercial culture, profit ruled. Development along Park Avenue was accelerated and given a distinctive cast by circumstances peculiar to its real estate market. In any large, thickly settled city, it is exceedingly difficult for a developer to acquire separate, but contiguous, parcels of real estate in order to assemble a building lot of sufficient size to put up a big revenue-generating building. This was the attraction of land leased from the New York Central''s real estate company. The sole owner of a million square feet of prime Midtown land, the Central leased this land and the air rights over it in large, sometimes block-size, parcels. Urban land offered in this way-already assembled into big lots ready for development-was deeply attractive to speculative builders. But only to those with the means and incentive to construct the kind of housing that yielded the highest return on investment: apartments for the hugely rich.
By leasing rather than selling its air rights, the company was able to "exercise a strict supervision over the architectural features of the buildings." This was important to sharp-eyed capitalists like J. P. Morgan and John D. Rockefeller. Stockholders in the New York Central''s real estate company, they also lived in the vicinity of the terminal and were interested in upgrading the area. Though unimaginatively similar in style, the buildings constructed on Grand Central property were among the most substantial and richly appointed in the city, establishing Park Avenue''s reputation as the world''s most fashionable apartment thoroughfare. "Windows and prim greenery and tall, graceful, white facades rise up from either side of the asphalt stream," wrote Zelda Fitzgerald, "while in the center floats .
a thin series of watercolor squares of grass-suggesting the Queen''s Croquet Ground in Alice in Wonderland." Mansions in the Sky By 1927, the commanding apartment buildings along Park Avenue were not just tall; they were immensely tall, true towers, the first skyscrapers built for permanent living. The tallest of them was the Ritz Tower, shooting up from the pavement at the corner of Fifty-seventh Street and Park Avenue. Built for bluebloods and tycoons by Emery Roth, an immigrant Jew from Eastern Europe, it opened in October 1926 and was one of the first residential buildings in New York constructed in sympathy with the city''s landmark zoning law of 1916. Concerned about diminishing sunlight and fresh air in the canyonlike streets created by the closely massed skyscrapers of lower Manhattan, the city placed a limit on the maximum height and bulk of tall buildings. Height limits were based upon the width of the street a building faced; if a developer proposed to exceed the legal limit, the stories above it had to be set back, roughly one foot for each four feet of additional height. Skyscrapers could be of any height, provided they occupied no more than a quarter of their lot. Forced to work within the confines of the so-called zoning envelope, architects began constructing "set-back" skyscrapers, with sections of the buildings set back further and further as they rose from their bases into the island''s sky.
"Wedding cake" architecture, some New Yorkers called it; others compared the new-style skyscrapers to the Hanging Gardens of Babylon with their ascending terraces. Great parts of Midtown were being transformed from "brownstone into Babylon," said The New York Times. Unlike apartment houses built only five years earlier on Park and upper Fifth Avenues, most of them twelve to fifteen stories. The Ritz Tower, however, was forty-one stories high. The tallest inhabited building in the world, it dominated the skyline of Midtown Manhattan as the Woolworth Building did that of lower Manhattan. Residents of its upper stories had unobstructed views in all directions for a distance of twenty-five miles on clear days, "panorama[s] unexcelled in all New York," Emery Roth boasted. It was a new way of living for the rich. They became sky dwellers, their "mansions in the clouds" higher than anyone had ever lived.
In its architectural aspirations alone, the Ritz Tower expressed the shoot-for-the-moon spirit of the Jazz Age. Sculpted in rusticated limestone, it rose from its base "like a telescope," up through its set-back terraces to a square tower crowned by a glistening copper roof. Arthur Brisbane, the internationally known newspaper mogul, had commissioned the building. He wanted to live in it and make money from it. The former editor of William Randolph Hearst''s New York Evening Journal, flagship of the Hearst newspaper chain, Brisbane authored a column, "Today," that was syndicated in two hundred Hearst papers, and lately had become editor of Hearst''s racy tabloid, the New York Daily Mirror. Both he and his boss, close friends who had flirted with socialism in their youth, were aggressive investors in Manhat.