The south end and midtown are tall, the rest is not. You can stuff way more density into Manhattan than currently exists.
And Brooklyn is shorter yet, of course. Could put way more tall buildings into Brooklyn if you wanted to.
Better transportation in outer burroughs will expand the supply of housing within a reasonable commute distance.
Ideas:
* Invest more in expanding public transportation. More express buses, local buses that run more frequently and on time.
* Deregulate private transportation (taxis, private buses).
* Incentivize commutes during off-peak hours.
* Encourage working remotely or flexible work schedules.
* Find ways to get tractor-trailers out of dense areas.
* Actually start enforcing double-parking and jaywalking laws (this one even pays for itself).
* Encourage business development away from already-congested areas
Where exactly will you find these armies of upper-middle class people? Wages and social mobility continue to decline.
http://www.epi.org/publication/even-the-most-educated-worker...
http://www.theatlantic.com/business/archive/2015/07/america-...
How many buildings are at the economical height or taller? How many are lower?
I've lived in and around NYC my entire life, and I always thought that the shape of the skyline was governed mostly by the underlying granite: lots of support for huge buildings downtown and midtown, not so much everywhere else. But in the past five years or so very tall buildings have been popping up all over. I think it won't be long until you'll have trouble finding the Empire State Building lost amongst it's bigger neighbors.
https://medium.com/@opirmusic/fixing-the-nyc-rent-crisis-or-...
Read Matt Yglesias' "Rent is Too Damn High" book if you want a more thorough treatment the topic.
The best answer for NYC is probably to aggressively gentrify as many neighborhoods as possible, which means (bluntly) displacing most lower income residents and moving in bicycle riding organic jam loving armies of hipsters. This comes with a lot of challenges. The biggest pressure release valve for Manhattan real estate prices has been the very successful gentrification of Brooklyn (and a few years behind is Oakland filling the same role for SF).