Its name may be synonymous with finance, but to growing numbers of New Yorkers Wall Street has a new connotation: home sweet home. Walk down The Street from Broadway, and you’ll pass the Bank of New York, the New York Stock Exchange, and the Banker’s Trust Company Building. But as you head farther toward the East River, the scenery begins to change. The buildings at 37 and 45 Wall Street are both for rent—not to financial firms, but to residential tenants. The former “House of Morgan” at 23 Wall Street will soon become “Downtown by Philippe Starck,” a high-concept luxury development. Restaurateur Giuseppe Cipriani has filled the building that once housed the NYSE, the U.S. Customs House, and the National City Bank with furnished condos. On the next block, the former New York headquarters of Brown Brothers Harriman is now The Crest, an apartment development with plans to expand next door as well.

The Financial District is following what has become a well-established pattern for New York neighborhoods: historical industries pull out, upscale development moves in. Banks and investment firms have been abandoning The Street for midtown for several years, and much like Soho and Tribeca before it, downtown Manhattan is transforming against all odds into a nice place to live. The September 11 attacks and the loss of the World Trade Center only accelerated the trend, tragically exposing the risk of concentrating so many of the world’s leading financial firms. A large portion of the tax incentives and grants aimed at encouraging downtown rebuilding have gone to residential conversions.

To be sure, the Wall Street Journal won’t need to change its name anytime soon. The NYSE is not decamping from its headquarters at Number 11 Wall Street in the foreseeable future, and Deutsche Bank is an example of a financial firm that has stayed in the neighborhood, moving into 60 Wall Street after its office near the World Trade Center was made uninhabitable. Still, as the Financial District becomes more of a mixed-use neighborhood, The Street’s legendary status will almost certainly fade, just as Soho has been redefined as warehouses have been replaced by art galleries and more recently by luxury shops. In a way, Wall Street is returning to its roots as not only a financial but also a residential hub: after all, J.P. Morgan and Alexander Hamilton are among those who once called Wall Street home.

The Financial District is following what has become a well-established pattern for New York neighborhoods: historical industries pull out, upscale development moves in.

A larger question than the future of Wall Street is whether New York itself can maintain its supremacy on the world financial scene, given the regulatory burdens and growing domestic and international competition. Last year, more companies went public on the London Stock Exchange than on the New York Stock Exchange—a recent report from McKinsey, commissioned by mayor Bloomberg and other officials claims that “stringent regulations and high litigation risks” are driving companies to London, which also benefits from closer ties to emerging markets. Citigroup, the world’s largest bank, reported higher fourth-quarter 2006 earnings from commercial and investment banking in Europe than in the United States. In response to such developments, a group of senior academics and industry leaders recently formed the Committee on Capital Markets Regulation to assess the extent to which excessive regulation is driving business across the pond. Meanwhile, many Chinese firms are now listing in Hong Kong, positioning the HKEX at an advantage as the Chinese economy slowly privatizes. The recent merger of the Chicago Mercantile Exchange and the Chicago Board of Trade will make Chicago a leader in the derivatives market.

Meanwhile, on The Street itself, local businesses are responding to the growing residential population. I’ve rented an apartment in the neighborhood for about two years now. About a year ago, diners started putting up signs reading, “Now Open on Sunday.” More recently, plans have been announced for a 24-hour grocery store. If you find yourself living on Wall Street twenty-five years from now, you may have to travel to London or Hong Kong for your stocks and bonds, but at least you won’t have far to go for your bananas and milk.

Adam Wolfe is a Senior Analyst with the Power and Interest News Report.

Image credit: "NYC - Bowling Green: Charging Bull" by Flickr user wallyg