Common Myths about Historic Preservation and Adaptive Reuse
Whether you’re a commercial developer, public entity or homeowner, it can be daunting to consider how to make your historic property work for your needs yet remain feasible for future generations. But let’s be clear – much of what you may have heard about restoration projects probably isn’t true.
Myth #1: It’ll cost way too much to restore this older building.
Fact: Although each rehabilitation project is different, it can be more cost-effective to restore an older building than to pay for new construction. Over time, upgrading an older commercial building or house tends to be less expensive than the cost of demolition plus construction of comparable size and quality. Older buildings contain materials that are durable and can be retrofitted to be more energy efficient.[i] And some tax incentives exist for private owners of historic buildings (see Myth #4).
Developers of commercial buildings are seeing the financial benefits of rehabilitating older buildings. In fact, some say that 90 percent of new development in the next decade will be focused on renovation and adaptive reuse of existing buildings.[ii] According to Fred D. Burkhardt writing in 2017 for Trade & Industry Development, “From a cost perspective, a complete building rehabilitation costs about 16 percent less in construction costs and 18 percent less in construction time than new construction.”
Myth #2: There’s no way this old building can work for what we need.
Fact: Think again. Are you looking only at the existing layout and/or design? Consider creative options – which can be perfectly appropriate in a rehabilitation or adaptive reuse situation. A well-designed expansion or addition to the original structure can add elevators, entries, bathrooms, stairs, and lots of square footage. You can change how a space functions by moving, adding or removing walls, changing out the interior finishes, and re-thinking circulation through the building. Such changes can add impact as they complement or contrast with the more historic aspects of the building, making your project especially unique and memorable. Just be sure, if you’re anticipating claiming historic tax credits for your project, that your changes are in step with the rules of the tax credit program (see Myth #3).
Myth #3: If my property is designated as “historic,” I’ll never be able to make any changes to it.
Fact: Owners of designated historic structures may be able to make very significant changes to their structures, depending on how the project is funded. Historic preservation laws, at their essence, are not meant to prevent change, but, rather, to manage change. The tool to manage change in designated historic structures is the Secretary of Interior’s Standards for Rehabilitation, the nationally accepted benchmark for evaluating such changes. The Standards don’t require that every element of a historic site remain intact: you need not keep every doorknob! However, the most significant, or “character-defining”, historic elements of a property should be retained. New additions to the historic property are allowed but should be compatible with the site’s historic architecture. The Standards urge the repair of deteriorated historic features but do allow for replacement where the severity of deterioration leaves no other option.[iii]
Myth #4: If I buy a historic property, there’s lots of government money available to help me fix it up.
Fact: Few large government or foundation grants are available to owners of historic properties, and even those few typically limit eligibility to government agencies or non-profits. Owners of sites listed in or eligible for the National Register of Historic Places may take advantage of a Federal Rehabilitation Tax Credit that provides a 20% tax offset for the cost of rehabilitation. [iv] In Iowa, “Historically significant” properties may also be eligible to receive a state income tax credit of up to 25% of qualified rehabilitation expenditures, via the state’s Historic Preservation Tax Credit Program. Many other states have similar programs. Tax credits make a strategic and significant impact on the project pro forma, when done correctly.
Myth #5: Historic designation will reduce my property values.
Fact: Study after study across the nation has conclusively demonstrated that historic designation and the creation of historic districts increase property values. Why? In part, historic designation gives a neighborhood or an individual historic site a personality that sets it apart from ordinary properties. Many buyers seek out the unique qualities and ambiance of a historic property.[v] In fact, restoration and adaptive re-use projects tend to revitalize the businesses around them, which ultimately can build or restore economic confidence in a region.[vi]
Also, if your property is within a local historic district, or is on the National Register, that designation gives it a significance that may offer protection over the years from inappropriate new development or misguided remodeling (as enforced by local zoning ordinances and preservation commissions) – which in turn can protect your investment and improve your property and resale values.[vii]
Myth #6: ADA Compliance is impossible in a historic building.
Fact: With the Americans with Disabilities Act (ADA) of 1990, access to properties open to the public is a civil right. This doesn’t mean every property is required to install an elevator. A property should have the highest level of accessibility while minimizing changes to the historic properties’ character, as outlined in the Preservation Brief “Making Historic Properties Accessible”. Historic architects work with you to thoughtfully integrate accessible elements to minimize permanent alterations to historic materials or characteristics.[viii] While the ADA does have some exemptions for historic structures, they are limited to areas that are integral to the historic integrity and can’t be reasonably or readily changed or modified. That doesn’t exempt an owner from accommodating someone with disabilities. It may only mean they must do something else to meet their needs.[ix]
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[i] Excerpted and adapted from “Common Myths About Historic Buildings” by the Wisconsin Historical Society.
[ii] “Adaptive reuse of commercial real estate”, by Saurabh Mahajan, Deloitte Perspectives, www2.deloitte.com, September 7, 2017.
[iii] Excerpted and adapted from “The Top Ten Myths about Historic Preservation” by Ken Bernstein, Manager of the Los Angeles Office of Historic Resources.
[vi] “6 Bold Adaptive Reuse Projects Give Broken-Down Buildings New Leases on Life,” by Sarah Jones, Redshift Blog, June 7, 2019.
[vii] Wisconsin Historical Society
[viii] Excerpted from “Debunking Preservation Myths” by Katie Kangas, Kodet Architectural Group, Minneapolis, MN.
[ix] Excerpted from “Building Preservation Myths – Part Four” by Ben Heimsath, Heimsath Architects, Austin, TX.