The first thing to say about Richard Price's new novel is that it is a spectacularly good read. Lush Life is a trip, in every sense, through Manhattan's Lower East Side, the city's original Jewish immigrant, its present quarter of hip and chic, a place where, especially in 2003 when the book is set, everything collides.

Real estate developers tearing down old buildings, converting tenements into million-dollar lofts; Latino families in council estates, trying to get a leg up; gang members trying to get some action; twentysomething wannabe writers and hipsters who work as waiters and drink at bars where mixologists use muddled ginger in cocktails so recherché they think of them as art; Fujianese restaurant workers; old Jews, new Jews, including a tabloid reporter in a Kelly green yarmulke. Oh, and Yemeni grocery store guys who charge a buck to the devout to see the Virgin Mary who has appeared in front on a fridge door.

This is a tiny corner of New York, but the novel makes it into a Middlemarchian microcosm of the city itself. Price - famous for his Spike Lee-adapted novel Clockers as well as his contributions to the hit TV series The Wire - riffs on the city. The sound of the city here is of jackhammer, gunfire, late-night arguments about relationships, but also rap, rock, jazz. No accident that the book takes its title from Billy Strayhorn's terrible, lovely song about a drug-soaked night-time playground of pleasure and grief.

People talk about Price's genius, his ear for dialogue. But it's not reportorial; it's better; it's a kind of hyper-New York talk, the essence of the city talking. There is also bittersweet romance and poetry out of Walt Whitman, who in his prime was certainly “Of Manhattan the son”.

The main character is Eric Cash, a failed actor, a wannabe screenwriter, who works as manager at the ineluctably hip Berkmann's Café. Around four one morning, Cash is heading home with two other white guys, including Ike Marcus, when they encounter two men (one black, one possibly Latino). One of them brandishes a gun. Cash hands over his wallet. Ike, drunk, ballsy, says, “Not tonight, my man” and is shot dead. “Suicide by mouth,” somebody calls it.

What follows is a cracking police procedural and much, much more. It's about how the murder affects everyone, locals, cops, tourists, and the main character itself, the neighbourhood.

Price draws them brilliantly. Although each represents an aspect of the area, and the portraits are often hilariously satiric, they are not caricatures. Unlike Tom Wolfe in Bonfire of the Vanities - to whom Price is often compared for his wicked social observation - Price cares for a lot of his people.

Matty Clark, the chief detective on the case, is the classic Irish cop, solid, guilty, tough, tender, but also an original, and the antidote to the drugged up, feckless, self-pitying Cash. There are the wonderfully realised Dominican detective, Yolanda Bello, Billy Marcus, Ike's endlessly grieving father, and Tristan, the shooter who writes rap, loves his gun, and is, in the end, heartbreaking. Harry Steele, Cash's old friend, is the local godfather of cool. He is the owner of Berkmann's Café, “the restaurant dressed as theatre dressed as nostalgia”.

And there are the ghosts. For Lush Life is also about that other Lower East Side, the one that haunts Eric Cash, himself an “upstate Jew five generations removed from here”. Cash is fascinated by “traces of the 19th-century boomtown everywhere”. In the sub-basement at Berkmann's, where Cash goes to snort cocaine between shifts, are Yiddish names carved into the blackened 19th-century joists.

The past also holds sway on Matty Clark; visiting Steele in his palazzo, a converted desanctified synagogue, he considers the “double layer of evicted ghosts - pauperish tenants, greenhorn parishioners - that still held sway on him, Matty having always been afflicted with Cop's Eyes; the compulsion to imagine the overlay of the dead wherever he went”.

The New York of Lush Life is layered deep in itself, within its generations, the ghosts always at hand, the city changing faster than you can catch it. As Harry Steele says so knowingly of the Lower East Side, and its strivings: “It was over the minute people knew to come here.”

Lush Life by Richard Price
Bloomsbury, £12.99; 464pp Buy the book

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