The banging of hammers, the clatter of drills, and a sea of scaffolding are greeting visitors to New York’s famed museums this spring.

The city’s cultural institutions are undergoing an unprecedented period of renovation and expansion on the strength of generous philanthropic contributions in the prosperous early years of the century. The action extends beyond marquee projects such as the recent $858 million expansion of the Museum of Modern Art and the $650 million Lincoln Center overhaul; the city is funding more small-scale capital projects than ever, thanks to a decade-old policy change now coming to fruition and a philosophical shift among city officials, who now view cultural institutions as key economic drivers.

“I think there’s a real sensitivity by the administration to how important cultural institutions are to the economics of this city,” the interim director of the Solomon R. Guggenheim Museum, Marc Steglitz, said. The Guggenheim, which is in the midst of a $29 million exterior restoration of its Frank Lloyd Wright-designed building, is not a city-owned museum, but it received municipal funding to cover about a third of the project.

Even though Mayor Giuliani had many storied battles with the art world, the roots of the current building boom date back to his administration, according to the president of the advocacy group Alliance for the Arts, Randall Bourscheidt. Until 1997, city capital funding of cultural organizations was largely limited to the Cultural Institutions Group, a coalition of more than 30 arts organizations that are situated in city-owned facilities or have historical ties to city government. Prompted by a request for funding from the Museum of Modern Art, a private institution, the Giuliani administration changed the policy, giving all nonprofit organizations access to capital money for the first time.

The results are striking. Ten years ago, there were just 44 city-funded capital projects, according to the Department of Cultural Affairs. That number has grown to 215, and the department’s four-year capital budget now tops $1.4 billion.

“There are very few cities in the world that are investing that kind of public money in cultural infrastructure,” Mr. Bourscheidt said. “It started with the Modern and it’s grown tremendously.”

Many also attribute the building trend to Mayor Bloomberg, a longtime arts patron who has served on the boards of the Metropolitan Museum of Art and Lincoln Center. City officials say support for arts infrastructure is part of a growing recognition in urban planning circles that cultural institutions play a crucial role in a city’s economic growth.

“Because of technology, many industries can operate from anywhere, meaning that people often have more choices about where they live,” the commissioner for the Department of Cultural Affairs, Kate Levin, said. “New York’s status as a magnet for artists and audiences is so important to the city’s appeal.”

The transformative power of cultural institutions is clear in East Harlem, where El Museo del Barrio broke ground in March on a $20 million renovation project, and a neighbor, the Museum of the City of New York — which offers free admission to area residents — is spending $28 million on a new wing.

The popularity of the two museums contributed to a 365% rise in East Harlem property values between 1995 and 2005, according to a Corcoran Group real estate vice president who specializes in the area, Jessica Armstead.

The boundaries of the Upper East Side area have “been pushed further north” in recent years, she said. “The museums certainly contribute to the popularity of the area,” she said. “They’re definitely enriching the neighborhood.”

When her clients see the telltale scaffolding that signals construction projects at museums, “they’re very excited,” Ms. Armstead said. “It means they’re building something that’s going to add to the neighborhood.”

El Museo’s city-owned building at Fifth Avenue and 104th Street, once an orphanage, looks “like a prison,” the museum’s director Julian Zugazagoitia, said. The renovation is meant to open the space, literally and figuratively, to the public, with a transparent glass façade and a café intended as a gathering space for the community. “Our renovation is transforming what used to be enclosed, to turn it back to the public,” he said.

The construction boom means materials are harder to come by, the administrative director of the Noguchi Museum, Amy Hau, said. The $8.2 million budget for the museum’s renovation includes contingency funds for rising material costs, she said, but the Long Island City organization had to order bricks for the project nine months in advance. Opened in 1985 in a former photoengraving plant, the museum is building a new entry pavilion, adding climate control to its galleries, and restoring a 1927 garden wall in a project scheduled to be completed this fall.

Of course, city government can’t take all the credit for the spate of museum projects. Museums nationwide have benefited from the robust economy, receiving generous gifts from wealthy individuals and corporations — gifts that will likely decline as the possibility of a recession looms.

“Museums across the country have been in a physical growth mode for the last decade,” the director of the Museum Association of New York, Anne Ackerson, said. “We’re seeing so many because we’ve just come off of a very strong period economically.”

In the short term, museums will continue to expand with funds secured in advance through grants or gifts, Ms. Ackerson said, but the number of new projects likely will fall off in the next few years.

The faltering economy will cause headaches for arts organizations, including the Museum of the City of New York, according to the director, Susan Henshaw Jones. Funding for the first phase of the museum’s project is in place, but it is fund-raising for subsequent phases. The total cost of the project is expected to be $100 million. For now, completion is anticipated in 2012.

“I don’t know where things are going,” Ms. Jones said of the economy. “I’m hoping that we’re going to be able to persevere and get this all done.”

Museum Building Projects Now Under Way

MUSEUM OF ARTS AND DESIGN

MAD’s new $90 million, 4,770-foot building at 2 Columbus Circle is slated to open in September.

COOPER-HEWITT, NATIONAL DESIGN MUSEUM

A project estimated to cost $43 million will renovate the mansion, the former home of Andrew Carnegie, and increase the museum’s gallery space by 70%, while moving the National Design Library to townhouses on East 90th Street from the museum. Construction is scheduled to begin later this year.

QUEENS MUSEUM OF ART

A planned $47 million expansion and partial restoration will double the museum’s size to 100,000 square feet as it expands into the southern half of the New York City Building, which is presently occupied by the Worlds Fair Ice Skating Rink.

LINCOLN CENTER

The $650 million redevelopment will transform Lincoln Center’s 16-acre campus with an extensive renovation of Alice Tully Hall, new restaurants, retail shops, and an overhaul of the Promenade along Columbus Avenue.

MUSEUM OF THE MOVING IMAGE

A $65 million, 66,650-square-foot addition will double the Astoria museum’s size.

BROOKLYN CHILDREN’S MUSEUM

A new $46 million building will increase the museum’s capacity to 400,000 annual visitors, up from 250,000, and become New York’s first “green” museum, as certified by the U.S. Green Building Council’s Leadership in Energy and Environmental Design program.

BROOKLYN ACADEMY OF MUSIC

The performance space completed a six-year, $9 million exterior renovation, including the addition of a 130-foot, undulating glass canopy above the front entrance, in early April.