What would happen if you moved Manhattan to a safer place?
New York City is at significant risk from flooding. The island of Manhattan, in particular, is surrounded by rivers and the sea. As the sea rises, as hurricanes and rain storms intensify, Manhattan will be on the frontline of climate change.
It is possible for big cities, like New York, to fight rising sea levels. London has the Thames Barrier, which protects the city against high tides and storm surges (though not from surface water flooding). Much of the Netherlands exists only because of a huge set of dijks and flood gates, one of the world’s great engineering achievements.
Manhattan has the option to do something similar: according to the the US Army Engineering Corps, it could build a huge, $112bn flood barrier guarding the entrance to New York Harbour from storm surges. The authorities favour a cheaper option, involving a series of flood walls and barriers around New York, which would cost a mere $53 billon, but protect less of the city.
New York can probably afford such an eye watering investment — and perhaps should consider the more expensive option. It is one of the largest, richest cities on earth, with valuable assets to protect. Hurricane Sandy caused at least $19 billion of damage in New York City, for instance.
But other cities will not be so lucky. New Orleans, for example, is smaller, less prosperous and even more threatened by the rising sea. In the UK, Hull and its surrounding area will probably need a huge, multi billion pound barrier across the Humber Estuary. Smaller cities will find this case harder to make. The conversation in both places may be more about adjusting to — or perhaps retreating from — the waves, rather than trying to turn them back.
Rather than focus on the economics of flood barriers, I want to ask a different question: why do we want to keep cities like New York where they are? Why not move Manhattan, piece by piece, to a safer place? Find a new plot of virgin land, in, say, New Jersey and return Manhattan to how it was before the Dutch arrived? It’s a question motivated by climate change, but the answer will be more about economic geography and the magic that makes cities so effective.
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Manhattan was an obvious place for Dutch colonists to develop a trading post. It has a huge natural harbour, facing Europe, and lies on a major river, the Hudson, that flows from the US interior. It is low lying, making water easily accessible. It is roughly in the middle of the eastern seaboard, accessible to Europe and to most places along the east coast. The Romans chose London as their trading centre in Britain for similar reasons: it faces mainland Europe and is at the point where many rivers meet the sea.
In time, New York became North America’s most important centre of trade with Europe. Ships would arrive in its great harbour, bringing goods and people — only some arriving willingly — and sending American exports in the other direction. The opening of the Erie Canal in the 1820s provided access from the Hudson River to the Great Lakes, opening up trade with a rapidly developing mid west.
This maritime trade brought new industries to the city. Early New York was an important manufacturing centre, most notably for textiles; it had ideal access to both raw materials and global export markets. Manhattan was a natural home for early finance and insurance industries, which were geared towards shipping and international trade. As the first Treasury Secretary after independence, New Yorker Alexander Hamilton helped to make Manhattan the pre-eminent financial centre in the USA. New York was also the first place to get incoming manuscripts from Europe, and so the American publishing industry centred on New York, as Duncan Weldon wrote in Two Hundred Years of Muddling Through. And of course, many migrants from many countries arrived in New York, and found work in the city’s booming industries.
Those early economic patterns led New York to evolve into one of the densest, most prosperous cities in the world. Wall Street remains the world’s foremost financial centre, underpinned by the dollar’s status as international reserve currency. New York remains one of the world’s pre-eminent cultural centres, even though few books are now printed there. Despite not being a capital city, New York retains an enormous influence over global politics, home to many international organisations.
And yet many of the original reasons for New York’s success — the natural harbour, the river access, the proximity to Europe, the printing presses — no longer matter much. New York Harbour is still one of the biggest ports in America, but big ships no longer dock in Manhattan. The city’s airports are arguably a more important trading link. Moreover, many of the highly paid jobs in New York could, in theory, be done anywhere in the world with a decent internet connection and stable rule of law. Why, then, does New York persist and remain so desirable, despite exorbitant house prices?
To answer that question, I want to go back to my thought experiment. What would happen if we tried to move Manhattan, building by building, street by street, to a more climate-proof location in New Jersey?
I think that, if you could do the whole move overnight — perhaps temporarily turning Manhattan into a Swiftian flying island — Manhattan would probably remain one of the world’s leading economies. You would need to keep its transport connections, of course — and probably quickly add some housing on the outskirts. Some people and businesses might miss the rivers, the benefits of Manhattan’s unique natural geography. New York would probably be a bit less iconic, and less widely used as a backdrop to movies. But fundamentally, if you kept the same people, the same buildings, the same connections, the city would probably carry on much as it is now. The core of the city — the inimitable collection of people, buildings, services, connections — should be similar to what was there before.
In this hypothetical scenario, the main question would become cost: does the cost of relocating the city outweigh the damage caused by climate change in its current location? But since this scenario only exists in theory, there is no point in assessing it.
What about a more realistic scenario? What if we laid out the plan of Manhattan in New Jersey, and offered every household and business in Manhattan the same plot as they have now? We could also offer a relocation grant to help with the cost of rebuilding, or moving existing buildings. We’d guarantee to build the same infrastructure — the subway, roads, airports and so on — but with brand new stations and trains. And we would also, I guess, set a deadline by which the old Manhattan had to be vacated. I think this is the closest approximation you could get to moving a whole city in real life.
Would it work? I don’t think it would. I think many of Manhattan’s residents and businesses would choose to move elsewhere. I think that many of the plots in “New New York” would lie vacant, and land values would plummet. I think that Manhattan would lose many, if not all, of the advantages that make it one of the most prosperous cities on earth.
Why do I think this would happen? There are several reasons. The disruption of moving — the new city would surely be a building site for at least ten years — would put some people off. The loss of Manhattan’s unique geography — there are few more striking harbours in the world — might sway others. The loss of neighbouring urban areas — I’m not sure we’re taking Brooklyn or Newark with us — would be a problem, especially given commuting patterns around Manhattan. And there may well be some loss of land value from the process, which would make Manhattanites poorer and reduce demand in the economy.
But by far the most important reason is that cities are sticky. People live in cities because other people live in cities. Businesses locate in cities because that’s where other businesses are. We call this “agglomeration” — the idea that people and businesses cluster together, and become more productive as they do so.
But I don’t think we understand agglomeration all that well. People often assume it is about human connections, people rubbing shoulders through their proximity, sharing ideas and developing new ones. I don’t think that’s the primary force; it’s more about minimising risks.
If you want to open a new business, or move and expand an existing one, where do you locate it? You’ll take into account several factors: land prices, access to skills, access to markets, local taxes and regulations. For the kinds of business that now cluster in cities like New York — typically high value services — land is relative unimportant, and a skilled workforce is critical.
And if you are a skilled worker in a particular industry, where do you choose to live? If you can, you choose to live where there are most companies in your industry. That way, if you lose your job or want to change to another company, it should be easy to do so. Much less risky for workers to live in a big city than a one-horse town. If you live in a two-earner household, living somewhere you can access two well-paid jobs is also very attractive — and big cities are much more likely to meet that need. There are also amenity values from living in cities — more earnings means more demand, which means a greater diversity of services and cultural amenities. It’s easier to buy and sell stuff in a metropolis.
And, of course, businesses that rely on skilled labour will want to locate near where the skilled labour wants to live — the two depend on each other. If you break that interdependence — either you move some of the workers or the businesses away — you weaken the forces that make your city work.
But there is another, more basic way that agglomeration is about risk. If you run an international investment bank or a publishing house, it would be a risk to move it to Denver, to Houston, even to Chicago. It would be a risk to just close your office and let all your staff work remotely. New York is the place you do banking, publishing and a whole host of other high value activities. If you move it elsewhere, you might be fine, you might reap the benefits of cheaper land and access to housing. But you might not. And even if that risk is small, it’s enough to keep clusters going. Humans are risk averse, and, in economic terms at least, a big city is the least risky place to be.
So why do I think that moving Manhattan would ruin Manhattan? Because it introduces risk. Is all of your workforce going to move to the new site? Are all of the companies in your industry coming? Will your bagel shop, your cinema, your favourite bar be there? When you force people to make relocation decisions and you introduce risk, it is likely that at least some will choose another option. And once that flow starts, your city starts to lose its status as *the* place for certain industries. If we tried to move Manhattan, maybe Boston, Chicago or Miami might take over Wall Street. Or maybe the finance industry would just stop being so clustered in one place.
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At any rate, the maths are for now heavily in favour of protecting Manhattan, not relocating the city. If we distributed $52 billion to just the residents of Manhattan — ignoring all the businesses and people that work but don’t live there — it would give them little over $30,000 each. Probably not enough for many to relocate. And rebuilding all of the infrastructure elsewhere would cost many times more, even if it would be an upgrade on today’s ageing systems.
But the maths and the physical assets are besides the point. Cities are not just bundles of buildings and infrastructure. They are webs of people, businesses, amenities, institutions, all drawn to the city by each other’s presence in the city.
Even if the waterways and natural resources that put the city on the map are now obsolete, cities still have something worth holding on to. Even if the places they were built turn out to be vulnerable to climate change, they are still worth protecting, up to a point. Cities are one of humanity’s great methods for managing risk. Now many of them will have to manage a risk of a different kind.