Year-round waterfront living has long been popular in sunny cities such as Miami and Los Angeles. It now is spreading to some of the nation's oldest and coldest towns, the latest sign that real-estate fever and the scarcity of land is prompting developers to take on riskier residential projects. In Boston, new condominiums are popping up along Boston Harbor. In Washington, D.C., developers are starting to lay plans to build housing along the long-neglected Anacostia River. Pittsburgh's Herr's Island, which had been a 42-acre dumping ground full of slaughterhouses and scrap yards, has been transformed by new townhouses. Brooklyn's derelict waterfront was recently re-zoned for residential construction.


 
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In many of these places, the waterfront historically had been reserved for industrial purposes, mainly shipping and manufacturing. When those industries declined after World War II, they left behind polluted waterways and toxic sites that eventually turned into dumping grounds. In Philadelphia and Boston, the waterfront was considered prime property, but for highways, not homes.

With the amount of developable land in the suburbs and cities in short supply, developers now are rediscovering the waterfront, which is being re-zoned and cleaned up. Cities and states have invested billions of dollars into waste-water treatment.

"The water is cleaner than it has been in a century," says Robert Yaro, president of the Regional Plan Association, a think tank that works on planning and development issues in the New York area. "So it means there are now vast areas of waterfront that are empty, available and simply require the appropriate zoning changes."

Even with these changes, building on the water remains a challenge. In New York, for example, waterfront developers must seek clearance from environmental regulators and, in some cases, the U.S. Army Corps of Engineers. That is in addition to the normal plethora of city and state agencies that a developer must appease before construction can begin