When in 1849 a grand 40-room Italianate mansion was built within what today are the gates of Greystone on Hudson in New York, it was not called a home, but rather a castle. Greystone Castle stood on the Westchester County hilltop for 120 years, while on neighboring hillsides America’s wealthiest families—including the Rockefellers, the Astors, and the Morgans—built some of the country’s grandest estates.

In June, the first of 20 eventual homes, to be built within the new Greystone on Hudson gated community, listed for $9,995,000 million. The 36-room…