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Making the Economic Case for Preservation in Virginia

12-09-2015 17:35

For some time now, several interrelated forces have driven a steadily emerging interest among preservationists in demonstrating and quantifying the economic benefits of historic preservation. Political leadership at all levels of government demands that public expenditures produce measurable economic benefits. The so-called "property rights" movement proclaims that historic district status reduces property values. Such preservation-related efforts as the Main Street program and heritage tourism initiatives have succeeded in stimulating economic development. And the definitions of who is a "preservationist" and what constitutes "preservation" have broadened significantly.

Even in Virginia, the birthplace of American preservation, some politicians still question its economic value, property rights proponents challenge historic districts, and historic preservation is too often seen as "cute," but not central to the economy of the Commonwealth. Consequently, in late 1994 the Preservation Alliance of Virginia--a grassroots advocacy group of some 150 member organizations-- decided to address preservation economics as a priority issue.

The result of that decision--a study entitled Virginia`s Economy and History Preservation: The Impact of Preservation on Jobs, Business, and Community--was published in October. The report offers clear evidence that preservation benefits the state economy in many ways and even benefits it more than does new construction.

Funding for researching, writing, and printing the report came from two Virginia foundations, the Beirne Carter Foundation and the Lucy Pannill Sale Foundation, which gave a total of $20,000. A grant from the National Trust Preservation Services Fund underwrote the costs of a marketing plan and materials to publicize the findings.

The report was designed around five key goals. It had to contain hard numbers, not just anecdotes. It had to be relevant throughout the state and to a variety of constituencies. The document itself was to be "user friendly." The information it induded would be widely distributed to reach decision makers, preservation advocates, and the general public. And the data presented had to be both credible and methodologically defensible.

A first step was to review the existing analyses and available data relating to preservation and economics in Virginia. Fortunately, these included a detailed case study of Fredericksburg from the National Trust publication The Economic Benefits of Preserving Community Character, an extensive economic impact analysis of Colonial Williamsburg, and nearly a dozen other recent studies.

This research pointed toward four separate "stories" about preservation economics in Virginia. First, the Main Street program over the last decade had accumulated detailed information on Virginia`s 20 Main Street communities. Second, the tourism industry was a major beneficiary of preservation and the state Division of Tourism had a wealth of information to provide. Third, the 900 buildings rehabilitated using the federal Historic Rehabilitation Tax Credit certainly had had an economic impact. Fourth, earlier research gave every indication that, far from suffering reduced property values, historic districts in Virginia consistently enjoyed appreciation rates greater than those in surrounding nonhistoric areas.

This body of earlier research provided the opportunity to assemble and illustrate what had already been discovered and to recast the information within the four "story lines." Data from the studies was converted to graphs, used as sidebar quotations, and incorporated into the body of the report.

Main Street data was usable just as received. Numbers of net new jobs and net new business start-ups and the amount of private investment in downtown buildings was made available on a city by city basis.

The Division of Tourism provided the results of an extensive national survey covering who came to Virginia, from where, for how long, spending how much, to see what. Visitors had been asked what they did in Virginia, choosing from 15 categories that induded stopping at discount centers, going to the beach, golfing, and visiting theme parks. Three of the categories dearly appealed to "historic preservation" visitors--those who visited historic sites and monuments, those who stopped at Civil War battlefields, and museum goers. The tourism office reexamined the data to compare these respondents with visitors who went to no historic places.

The Virginia Department of Historic Resources made available information on all of the certified tax act projects undertaken during the last 15 years and the amount of investment associated with each one. Applying these numbers to multipliers found in the U.S. Department of Commerce`s Regional Input-Output Modeling System made it possible to estimate the number of jobs, the amount of household income, and the impact on other industries that the rehab projects represented.

In Staunton, Va., a town of 25,000, the property assessment records were fully computerized. The assessor there sorted the entire data base so that values could be compared for both residential and commercial properties within and outside of the town`s five historic districts.

To make the report "user friendly," the designer created USA Today-syle graphs and charts to convey the numerical information. These graphics should also appeal to newspapers and other media outlets. The report was released on October 4th at a press conference announcing the findings. Also planned were follow-up op-ed pieces in local newspapers, editorial board meetings, newsletter columns for member preservation organizations, press releases for Chambers of Commerce and specialized business publications, and appearances on local television and radio talk shows.

Press releases and other publicity efforts have spotlighted several key findings. For example:

  • Virginia`s 20 Main Street communities have gained more than 1,100 new businesses and nearly 2,200 new jobs and have seen more than $54 million in private investments made in downtown buildings.
  • Historic preservation visitors stayed longer, visited twice as many places, and spent two and one-half times more money in Virginia than did nonpreservation visitors.
  • Fifteen years of historic building rehabilitation has generated $350 million in private investment resulting in 12,697 jobs in Virginia.
  • Property values in every one of Staunton`s historic districts experienced rates of appreciation greater than did those of properties outside the districts.
  • Every $1 million spent on historic rehabilitation in Virginia creates 3.4 more jobs than does the same amount spent on new construction.

An additional finding suggests another important line of argument for the advantage of preservation over new construction: more than 100,000 Virginia households with incomes lower than $20,000 a year live in housing built more than 50 years ago. It would cost the state of Virginia between $5 and $6 billion to replace it.

Virginia`s Economy and Historic Preservation: The Impact of Preservation on Jobs, Business, and Community demonstrates that the question should never again be framed, "Historic preservation or economic growth?" Historic preservation is economic growth and is profiting Virginia`s economy every day.

Publication Date: November/December 1995



#Economics #ForumNews

Author(s):Donovan Rypkema
Volume:2
Issue:1