1) JOBS - Historic rehabilitation means jobs—generally well-paid jobs, particularly for those without advanced formal education. Rehabilitation tends to be more labor intensive than new construction, so work restoring historic buildings has a greater job creating impact per dollar spent than new construction.
2) DOWNTOWN REVITLAIZATION - Thirty years ago, the conventional wisdom was that downtowns had been replaced by shopping centers, and if downtowns survived at all it would be exclusively because local government and financial institutions were located there. Of course, that was a prescription for a nine to five, five day a week economic, social, and cultural desert. Thankfully not everyone accepted that premise. In large cities and small towns, the most common and ultimately successful strategy was to identify, protect, reuse, and enhance the historic buildings that differentiated downtown from the mall. For those places wise and farsighted enough to reinvest and redevelop their historic structures rather than raze them, the payoff is clear.
3) HERITAGE TOURISM - Often when “economics” and “historic preservation” appear in the same sentence, the reaction is, “Oh, you must mean heritage tourism.” In fact, tourism is just one economic contributor of historic preservation, but it is an important one. Consistent findings in both the US and internationally indicate that heritage visitors stay longer, visit more places, and spend more per day than do tourists with no interest in historic resources.
4) PROPERTY VALUES - There is no area of preservation economic analysis that has been done more often than measuring the impact of local historic districts on property values. Regardless of the researcher, the methodology, or the location of the study, the results of these analyses have been remarkable consistent: In nearly every instance properties in local historic districts have greater rates of appreciation than properties elsewhere in the same city. Thirty years ago, opponents to the creation of a local historic district usually claimed, “Historic districts mean one more layer of regulation. More regulation means, prima facie, lower property values.” Of course, study after study has demonstrated the opposite has been true; the values of properties have significantly benefited from local district designation. Today the argument – often from the same people who opposed districts early - is more likely to be, “Those damn historic districts will mean my property value is going up, so I’ll have to pay more property taxes.” That does not mean that rising property taxes which cause financial difficulties for some owners should not be addressed. But the short-term cash flow problem is offset 40 to 67 times by the increased wealth.
5) FORECLOUSRE PATTERNS - December 2007 marked the beginning of what has come to be known as the Great Recession. Hardest hit in the recession was the real estate market. While the recession was officially designated as having ended in June, 2009, the real estate market in hundreds of cities didn’t recover until three or four years later. In a few markets a decade after the real estate crash, values have still not reached their pre-recession levels. It isn’t that people who live in historic districts never get fired, or divorced, or run their credit card bills up too high. Rather there is a latent demand for homes in those neighborhoods even in market downturns. As a result, homeowners who find themselves in financial difficulties often find buyers for their homes before they reach the point of foreclosure.
6) STRENGTH IN UP AN DOWN MARKETS - Related to the foreclosure findings is the pattern of value change in both up markets and down markets. As a general pattern, homes in historic districts do better when the market is moving up, fall later and less steeply when markets decline, and begin their value recovery sooner than other neighborhoods.
7) SMALL BUSINESSES - Historic districts and buildings have a competitive advantage. They contain attractive buildings, spaces, and other attributes desirable to small businesses. Small businesses don’t just provide convenience and local jobs; they are also the source of the commercial vitality of a neighborhood. These businesses value the unique character inherent in historic buildings and often the competitive rents in older structures.
8) STARTUPS AND YOUNG BUSINESSES - If small businesses are important, start-up and young businesses (less than 3 years old) are even more so. Almost all net new job creation comes from new businesses. Where do those businesses choose to locate? Often in local historic districts. A business’ location is more than an address. Particularly new and small businesses want their physical location to be a reflection of the quality and character of the goods or services sold within. The quality and character a historic building is an appropriate choice for these entrepreneurs.
9) JOBS IN KNOWLEDGE AND CREATIVE CLASS SECTORS - urbanists, economists, and economic development experts note that the young, well educated, talented workers are essential for a local economy to grow and the city to be vibrant. So where are those knowledge and creative class workers choosing to live and work? While workers in the knowledge and creative fields will never be a large percentage of the entire workforce, they have a disproportionate impact on the economic vitality of a city. And employers of those workers are disproportionately choosing to locate in historic districts.
10) MILLENIALS AND HOUSING - In 2019 the number of Millennials (those born between 1981 and 1996) in the United States surpassed the number of Baby Boomers. That means for the next generation, that age group will have an outsized impact on how and where cities grow. So a city planning for a prosperous future must consider the needs and preferences of Millennials. Many in this age cohort might not identify themselves as “preservationists” but the qualities they are looking for in cities are the qualities found in historic neighborhoods.
11) WALKABILITY AND BIKABILITY - In 2007 Walk Score was released to the public. Since then urban planners, real estate professionals, public health workers, transportation experts, and others have stressed the importance of Walk Score; it has become a basic tool of urban analysis. But most neighborhoods in America are not very walkable. The American Journal of Preventive Medicine noted, “Neighborhoods built a half-century or more ago were designed with ‘walkability’ in mind. And living in them reduces an individual’s risk of becoming overweight or obese.” For multiple reasons people are prioritizing walkability in their choice of where to work and live. The Urban Land Institute reports that 50% of U.S. residents say that walkability is a top priority or a high priority when considering where to live.
12) NEIGHBORHOOD DIVERSITY - Historic districts help to achieve public policy housing goals by providing housing options for a range of household sizes and incomes, while fostering a balance of neighborhood stability and healthy change. In Raleigh housing units come in a variety of sizes. The vast majority—over 75 percent—are modestly sized, with fewer than 2,500 square feet. A diversity of housing sizes results in a diversity of housing price points for both renters and potential owners. It is this range of price options that leads to economic integration within a neighborhood.
13) AFFORDABLE HOUSING - Older housing stock needs to be recognized for its contribution to nearly every city’s affordable housing. The only tool most cities have to prevent the demolition of older housing stock is historic district protection. Not only are historic districts not the cause of the lack of affordable housing, they are a significant part of the solution.
14) FIRST PLACE OF RETURN - Many cities in the United States, primarily in the northeast and Midwest, have been losing population for decades. In recent years, however, some of them have again begun to grow in population. So a question arises – when cities begin to grow after extended periods of population decline, where within the city does that growth take place? The answer – in local historic districts
15) ATTRACTION FOR GROWTH - But it is not just cities who have been in population decline where the historic districts are magnets for growth. It also happens in cities that have not been shrinking.
16) ALLOW CITIES TO EVOLVE - Property rights zealots who think regulations are inherently bad for the economy forget the basic rule of real estate, that the three most important variables are location, location, location. What that means is that the value of an individual building does not somehow magically emerge from within the property boundaries, but from its larger context. The three variables are not roof, walls, and foundation. The value of real estate is driven by its context, and the protection of that context is the economic essence of historic districts. This is a rational economic act. Real estate is inherently a longterm investment. The value of that investment is not driven primarily by what an owner does within her property lines, but what happens to the surrounding area. The economic impact of historic districts is to provide a degree of protection to the value of what for most people is by far their biggest financial asset.
