Mayor Bloomberg, having been defeated in his plan to build a Jets stadium on the West Side of Manhattan, is now turning his frustrated real-estate developer ambitions downtown, pressing a campaign to get some of the 10 million square feet of office space planned for ground zero converted to residential uses. While Mr. Bloomberg has his streaks of brilliance, it’s not clear so far that real estate development is among them, and there’s something off-putting about the mayor trying to bully a private developer, Larry Silverstein, into building what the mayor wants rather than what the developer wants. Mr. Silverstein is a professional real estate man with a fiduciary responsibility to his investors and to his family to build on the site in the way that he thinks will earn the highest returns.

It’s not that there’s anything wrong with building new housing downtown or, for that matter, with the construction of new market-rate housing anywhere else in the city. But as the tragedy of Atlantic Yards in Brooklyn shows, once the “affordable housing” pressure groups and their allies in the Bloomberg administration get done chewing up and spitting out a proposed residential development in this city, the result is that private developers are forced to create new subsidized units. These create all the same problems that the state has been trying, however slowly, to phase out in rent-regulation in New York, such as empty-nesters holding on to absurdly under-priced three-bedroom apartments, landlords with little incentive to improve their properties, tenants with little incentive to move into the free market for housing, even if they can afford it.

No wonder that Mr. Silverstein is so far sticking to office space. Perhaps he read a column by Robert L. Bartley that ran in the paper he edited, The Wall Street Journal, on September 23, 2002. “Mayor Michael Bloomberg puts his emphasis not on protecting the vitality of downtown but on building housing. It’s easy to guess that someone who made a fortune selling computer screens sees the future as telecommuting, and underrates face-to-face contact at the highest levels of world commerce,” wrote Bartley, who died on December 10, 2003. He warned, “If the talent and investment in Wall Street dissipates, it will flow partially to midtown, but also to London and points around the globe.”

Mr. Bloomberg was propelled to re-election in part by homeowners in the new New York concerned about preserving the gains in property values that were achieved in the mayor’s first term. Creating more homeowners with a stake in the city’s success is good for the city and good for the mayor politically; it is in part what gives Mr. Bloomberg the political clout to influence ground zero decision-making. But having the mayor rather than the market dictate development decisions in the city subjects private land use decisions to political whim; what other than Mr. Bloomberg’s preferences dictated that the far West Side was right for a football stadium but that ground zero is the place for apartments? Why not apartments for the far West Side?

Mourning, politics, and real estate development make strange bedfellows. As the New York Post has pointed out, the owners of two newspapers commenting and reporting on this drama, the News and the Times, have their own Manhattan commercial real estate holdings of which to think. And the memorial at the World Trade Center site is a separate issue. But in respect of land use on the rest of the site, the decisions are like most other ones about the allocation of resources – best left to the free market, where the ones bearing the risk can make the decisions. In this instance that means letting the lease-holder, Mr. Silverstein, make them without a lot of public second-guessing from the mayor.