The Ways Preservation Pays

March 12, 2020
Architecture Sustainability Restoration Urban Design Community & Regional Planning

From affordable housing to sustainable practices, a look at six benefits historic preservation can have on a community’s bottom line. 

My passion for historic preservation began when I was young. An admiration for the beauty of old buildings and the extensive details of these structures ultimately led me to pursue a career as an urban planner. Preservation allows us to maintain the master craftsmanship of historic structures, and as it turns out, preserving and restoring these buildings also holds countless fiscal benefits to the cities in which they reside. 

At RDG, our planners work with administrators and elected officials to create better cities and communities, not only for today’s residents but for future generations as well. Whether it’s promoting healthy lifestyles, increasing job opportunities and incomes, using our infrastructures efficiently or creating affordable housing, we are continuously working towards a more sustainable future. And rather than defaulting to the design of new neighborhoods, which would require installation of new water or sewer lines and erection of new buildings, investing in historic downtowns and residential neighborhoods is not only more sustainable, it’s oftentimes an exceptionally cost-effective approach. 

City of Grinnell Facade Rehabilitation in Grinnell, Iowa by RDG. Photography by IRIS22 Productions.

It used to be that we studied only the most obvious benefits of preservation such as job growth or the economic benefits of tourism, but more recently we’ve begun to investigate the economic benefits to cities that extend far beyond these basic areas. In this post, we’ll look at six benefits of historic preservation, including its impact on affordable housing, small businesses and job creation, local economies, city growth, sustainability and community identity. 

Missing Middle Housing as Affordable Housing 

One of the most important impacts historic preservation has on a community is providing affordable and varied housing options. The most affordable house was built more than 50 years ago; it’s impossible to build a house today for less than $130,000 without heavy subsidies, a fact that prices many first-time homebuyers out of purchasing. Older neighborhoods are home to what has been labeled Missing Middle Housing – existing duplexes, triplexes and small-scale apartments that are often more affordable than newly-constructed single-family homes or condos. These structures were fundamental building blocks of pre-1940s neighborhoods (my old neighborhood in Minneapolis was full of them); however, very few of these types of residences have been built since the 1920s and 1930s. Leveraging existing missing middle housing structures offers greater choice in affordable living, and because these buildings often blend in well with their surroundings, create a sense of connection with the neighborhood.  

Small Business Support and Job Creation

The second major benefit of historic districts is their ability to serve as small business incubators. Older buildings have more affordable rents than new buildings, the latter of which must often recoup the cost of construction. And though our national economic conversations tend to focus on large, Fortune 500 companies it’s actually small companies that employ the largest number of employees. One study conducted by Place Economics asserts that 96 percent of all U.S. businesses employ fewer than 50 people; these same businesses often tend to locate in historic districts (where buildings have more character and affordable rent prices) and can create strong economic opportunities for their local communities. Historic districts draw more businesses and a large percent of accommodation and food service jobs as well. It stands to reason, then, that we should maintain our older buildings to help small businesses, which in turn helps the vitality of our neighborhoods.

City of Grinnell Facade Rehabilitation in Grinnell, Iowa by RDG. Photography by IRIS22 Productions.

In line with supporting small businesses, historic districts also support job creation. Anyone who has worked on an old house knows how much more labor goes into it compared with a new home. It’s much easier to throw up new drywall on a stud wall than it is to repair 100-year-old plaster, which is why preserving an old building has a greater impact per dollar.

Positive Economic Impact

It’s been long known that heritage tourism is an economic benefit of historic preservation, but more recently property values and stability have been studied too. In Nebraska alone, as recently as 2012, heritage tourism accounted for $196 million and 3,000 jobs annually. Heritage tourism is a very real economic force; these tourists stay longer, visit more places and spend more per day than other tourists, and so investments in preserving structures can serve as an investment in a city’s revitalization as a destination. 

Property values are another consideration in preservation’s impact on local economies. In historic districts, homes appreciate faster than in other parts of a city. That same Place Economics study revealed that over 14 years in Indianapolis, a single-family home in a historic district averaged a 7.3 percent rise compared to just 3.5 percent in a non-historic district. While many property owners do not like to see the increase in taxes that often comes with increased property value, the average tax increase for historic homeowners is fairly low, around $15-$25 per year. The money gleaned from these increased taxes, however, has a very big impact on the city overall and can lead to greater enhancements to local neighborhoods and communities.

Meeting a Growing Demand

In 2019, Millennials passed the Baby Boomer generation as the largest age cohort and along with that surge comes more influential buying power. According to a study completed for the National Trust for Historic Preservation, 44 percent of Millennials want to live in character-rich, historic neighborhoods that offer walkability and easy access to amenities. The historic nature of Missing Middle Housing residences checks off most if not all of these demands. What’s more, while many Millennials are not buying homes yet, those who do are buying older homes at a much higher rate than the rest of the population. 

Additional studies have shown historic districts support population growth in general, regardless of the age group. The Place Economics study, for example, showed that in 2010 Philadelphia lost population in its non-historic districts but saw tremendous growth in the city’s historic districts.

A Focus on Sustainability  

One of the greatest benefits historic preservation has on a community is environmental. As designers and planners, we are well aware of the impact the built environment has on our climate – it’s why we and many other firms have signed on to the AIA 2030 Challenge. When it comes to addressing climate change and our built environment, one approach to reducing emissions is to reimagine how we might use structures that already exist. The most sustainable building is one that is already standing and saving an old building instead of demolishing it and starting over is one of the most sustainable acts a city can support. According to International Living Future Institute, it can take between 10 and 80 years for a new, energy-efficient building to overcome, through more efficient operations, the negative climate change impacts that were created during the construction process. Reusing existing buildings can offer a way to avoid unnecessary carbon output while saving communities the economic and environmental expense of new construction. 

Defining a Community’s Identity 

The final consideration around the impact of preservation is the one that drew me to the field in the first place: preservation creates an identity for a community. Each city is filled with a different makeup of historic buildings in a different configuration. It tells the story of who was there when the town was founded, and what their priorities were at the time. Big box stores and franchise restaurants look the same in every single town across America, but buildings constructed 100 years ago each have an identity all their own. Take the 5,000+ Carnegie libraries; all were funded by one man and spread across the U.S., but each is unique, telling the story of its specific community. The payoff here isn’t necessarily tangible, but it is incredibly valuable. The historic buildings that define our neighborhoods and communities ultimately define us. Saving these buildings means making your community yours. 

This article was adapted from a post on The Planning Lady blog.