What Is Preservation Worth? Some Results from Other Places
While
Donovan Rypkema’s aim at the workshop in Hartford
was to show how economists can measure the economic impact of preservation
activities in Connecticut,
in the process he cited results from studies in other places that begin to make
the case that preservation can produce concrete economic benefits. Here are
some of his points:
Jobs and household income: Of more than 500 categories of economic activity recognized by one
common model for measuring economic impact, almost none create as many jobs and
as much household income as historic preservation. Some, such as restaurants,
create more jobs, but at a low income level, while others, such as nuclear
power plants, create high levels of income, but for only a few people.
Compared
to new construction, building rehabilitation spends less on materials (which
tend to come from somewhere else) and more on labor. Because labor tends to be
local, money spent on it will stay longer in the community.
One
of Rypkema’s charts, derived from work by David Listokin of Rutgers University
Center for Urban Policy
Research, compares the economic impact of highway construction, new building
construction and rehabilitation of historic buildings. Listokin finds that, for
every million dollars spent, highway construction creates 33.6 jobs, new
construction 36.1 jobs, and rehabilitation 38.3 jobs. Rehabilitation also
generates more household income and generates more in state and local taxes.
This
confirms results from Norway
and Australia,
both of which have devoted significant portions of their economic stimulus
spending to heritage programs. In Norway, thirteen percent of
stimulus spending goes for preservation, because that was found to be effective
in the last economic downturn. Australia
recently released figures reporting that the in heritage portion of its
stimulus spending it cost $22,000 to create each job. The United States
recently reported spending $248,000 to create each job across all stimulus
programs.
Heritage tourism:
While Rypkema finds the total impact of heritage tourism difficult to measure,
studies consistently show that heritage visitors tend to stay longer and spend
more per day than other tourists.
Center city revitalization: Rypkema says “I cannot identify a single example of
sustained success in downtown revitalization that did not involve historic
preservation.”
Historic
buildings are best suited to the needs of small businesses, and it’s important
to pay attention to them, because most of our economy is driven by small
businesses, not the huge Fortune 500 companies. Small businesses have done
better than large companies at retaining employees. Historic buildings tend to
be better for small businesses because they’re less expensive; “You can’t build
new and rent cheap,” said Rypkema.
Although
there is no objective study, Rypkema said that the National Trust’s Main Street program
has a highly effective engine for downtown revitalization—“the most cost
effective program of economic development in America, bar none.”
Local historic districts:
The effect of local historic districts (LHDs) on property values has been the
most widely studied economic aspect of historic preservation, and the results
have been highly consistent. Studies in districts across the nation, in a wide
variety of economic levels, have shown that property values in historic
districts appreciate more rapidly and consistently than those in both local
markets overall and in comparable non-designated neighborhoods.
This result
might seem puzzling, since LHDs might seem less attractive because they impose
additional burdens on property owners. But their value is that they offer
assurance that surrounding properties will be preserved. In other words, they offer what Rypkema called
“protection from the lunatic across the street.”
In a
study of LHDs in Indiana,
Rypkema found that districts have the greatest impact on property values when
they have
professional
staff,
clear,
written, illustrated guidelines,
firm
but consistent decisions, and
active,
ongoing educational outreach.
State rehabilitation tax credits: The state that has seen the most dramatic results from a
state preservation tax credit is Missouri,
where the rapid turnaround in the fortunes of Saint Louis can be directly attributed to the
credit. Factors that make tax credits more effective are dedicating substantial
funds to the credits (usually not capping them, or at least setting caps high),
so that a lot of projects and large projects can be done, and the ability to
sell the credits, so that even developers who cannot directly benefit can still
use the credits. (On the other hand, he said that the Connecticut Historic
Homeowner Tax Credit, which requires that homeowners sell the credits to
corporations, is “bizarre.”)
Affordable housing:
Rypkema said, “The current need for affordable housing is disproportionately
being met by older and historic houses. The vast majority of this housing is
provided with no subsidies, incentives, or government intervention of any kind.
However the existing supply of older and historic housing is disappearing at an
alarming rate—557 units every day for the last 30 years. If today we had to
replace the older and historic buildings occupied by households below the
poverty level, using the most cost-effective Federal programs, the bill would
be $335 billion.”
Sustainability:
Demolishing a 25 by120-foot downtown commercial building negates the
environmental benefit of recycling 1,344,000 aluminum cans.
Rypkema
has proposed that the city of Tacoma, Washington, require
every demolition request to report the embodied energy represented by the
building to be demolished, as one factor to be considered in determining if
demolition is justified.
Historic
buildings tend to be constructed of the least
energy-consumptive materials—timber, brick, plaster, concrete. New buildings
tend to be constructed of the most
energy-consumptive materials—steel, plastic, vinyl, aluminum.
Preservationists
must stop justifying buildings that waste energy and focus on ways to improve
their performance.
Making a
new aluminum window requires 126 times the energy required to repair historic
wood windows. A far better use of stimulus money would be to train workers to
repair wood windows.
