If you consider what the Dutch considered in the 1600s, New York is much larger than the space the city physical occupies. There is New York State, but the city and the land represent a far reaching presence that affects a good portion of the United States. It’s also an excellent method to look historically at real estate development, which is a very different idea today than it used to be.
When New York was purchased by the Dutch, they employed a classic technique in real estate development by undervaluing the land. The natives of the area saw the hard ground as unsuitable for farming, and the grounds inhospitable for cattle raising. The Dutch, on the other hand, saw New York as a port that would open up global trade.
Although we think of real estate tycoons in a popular sense, like Donald Trump, the tycoons of that era were very different. They did not own construction crews, nor did they purchase existing infrastructure. Like the purchase of New York, land was often researched and purchased for specific business dealings. As US business grew, the opportunities for landowners grew, which is why owning land became such a contentious idea. Today, it’s a concept most of us take for granted. Prior to the 1800s, it was one of the only investment methods one had to try and build a life. Rental income was possible, but investments were to support the area in a very literal sense.
Wealth came from ownership of these properties, but the sense of community, due in part to developers requiring compliance from everyone involved, was very different than it is today.
About the Author: Samuel Phineas Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Samuel Phineas Upham website or Facebook.