Crime in New York City has dropped 80% since the early 1990s, a decline unmatched anywhere in the country. The change has yielded an explosion of commerce in once forlorn neighborhoods, a boom in tourism, and a sharp rise in property values. Nowhere were the effects more dramatic than in the city's poorest areas.

When the bullets stopped flying, entrepreneurs snapped up the vacant lots that had served as breeding grounds of crime. Senior citizens were able to visit friends without...