Tuesday, September 23, 2014

Historic Preservation, It Pays


Savannah, Georgia
Hello Everyone:

If my in-box is any indication, Historic Preservation Tax Credit programs is a hot topic.  Federal and state historic credits are not anything new.  The federal government, through the National Historic Preservation Act of 1966, paved the way financial incentives for rehabilitating older buildings.  Honestly, without any kind of tax incentive, historic preservation would still be the occupation of tea sipping, little old ladies with big hats.  Seriously though, in November the city of Savannah, Georgia will play host to the annual National Trust for Historic Preservation Conference, with the Historic Savannah Foundation and the Savannah College of Art and Design actings as sponsors.  In advance of the Conference, Kenneth Zapp, a professor emeritus at Metropolitan State University in Savannah, Georgia, discusses "The Economic of Historic Preservation" for Business Savannah.  The article does a good job of succinctly explaining why it pays to rehabilitate, rather than tear down, older buildings.

Downtown Savannah
In May of this year, the Historic Savannah Foundation held a seminar on the economics of preservation at SCAD.  The keynote speaker was the expert on the subject, Donovan Rypkema of Place Economics.  The HSF commissioned Mr. Rypkema to study the economic impact of preservation and present his findings at the seminar.  At the conference, Mr. Rypkema presented his conclusions, based on research done in other communities on the merits of preservation.  The presentation was organized into seven themes: jobs, property values, heritage tourism, environmental impact, social impact, and downtown competitiveness.

Jobs: Job generation and retention are always a key issue anywhere you go and especially during an election cycle.  According to one of Mr. Rypkema's findings, "The federal historic tax credit program invested $19.2 billion through jobs.  This cost per job ($8,868) is extremely low compared to other federal stimulus spending...."

Cathedral Historic District
Dubuque, Iowa
Property Values: Rehabilitating older buildings is a good way to raise property values in a neighborhood. For example, the city of Dubuque, Iowa offers financial incentives in the form of revolving loans, historic preservation grants, and an urban revitalization program for properties located in historic districts. (http://www.cityofdubuque.org)  Overall, homes in Dubuque's historic district saw a property value in increase greater than their neighboring communities and the city overall.  In Louisville, Kentucky, properties in the historic district appreciate about 21%, similar to the property value increase in the properties located in Philadelphia's historic district.

Jones Street
Savannah, Georgia
Heritage Tourism: Heritage tourism is not just for getting back in touch with your cultural roots.  Mr. Rypkema's study concluded that "heritage tourists stay longer and spend more.  Subsequently more people visited historic districts than went to..,golf courses."  Historic districts offer a unique way to experience a place by giving a visitor a snapshot of what a place was like during its historically significant period.  To give you an example, in the state of Georgia, "heritage tourists spent $6.147 billion, creating $262 million tax revenue."

Environmental Impact: as the old saying goes, "The greenest building is the one already built."  Mr. Rypkema's study demonstrated that "Preservation projects save 50 percent to 80 precent in infrastructure development."  Adaptive re-use is almost always the more sustainable way to build rather than new construction.

Providence, Rhode Island
Social Impacts: the state of Rhode Island has used preservation as a mechanism for affordable housing units.  Further the state found that it was an effective way to create new districts.

Downtown revitalization: this goes without saying, historic preservation has repeatedly demonstrated to be a highly effective tool for downtown revitalization.  One instrument for downtown revitalization is the highly successful Main Street Program from our friends at the National Trust.  In over thirty-one years of existence, the Main Street Program has been responsible for bringing downtowns back to life, creating 473,000 jobs at the low cost per job of $2,394, and more downtown business openings.  Another bonus, a study found that revitalized downtowns experienced more pedestrian traffic, less automobile noise and pollution.

Mansion in the Spanish oaks
Economic competitiveness: historic preservation is a great tool for enhancing the urban ambiance that millennials find so attractive, places where employees and managers want to live.  Honestly, not every building or place is preservation-worthy, proving preservation-worthiness is all in the details.  What this translates to is preservation work should be appreciated, and not just for the quaint districts.

Historic preservation provides a myriad of economic benefits to cities and towns.  Some of the benefits are immediate, others take time to develop.  It is worth the time and effort to consider preservation a viable option to generating jobs and revenue for a city.  The National Trust for Historic Preservation Conference in November will go into greater detail about the economic benefits of preservation.  Let's hope the powers that be listen carefully.

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