Economics

Preservation & Economics

Every day historic preservation strengthens our economy, but leaders in the field don’t always know how to articulate that connection. Knowing the facts to support our case can help us spell out the many ways in which preservation supports neighborhoods and communities.

The Economics of Historic Preservation Classic

Donovan Rypkema's The Economics Of Historic Preservation: A Community Leader’s Guide, an indispensable tool for historic preservation professionals, is available on Amazon.

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Creates Jobs

Many recent studies indicate that preservation has positive economic impacts on local job creation. In addition, reusing and retrofitting older buildings stimulates the local economy because labor and materials tends to be obtained locally. For example, a 2013 report commissioned by the Utah Heritage Foundation states 7,313 jobs were created annually directly or indirectly by the heritage portion of Utah’s tourism industry. In addition, between 1990 and 2012, nearly $300 million in private capital has been invested in historic buildings in Utah, creating 4,969 total jobs. In Colorado, since 1981 historic preservation projects have led to the creation of nearly 35,000 jobs, generating nearly $2.5 billion. For every $1 million invested to rehabilitate historic buildings in Colorado, 32 new jobs were created.

Increases Property Values

A vast majority of recent studies show that property values have a tendency to rise within historic districts when compared to a similar non-designated neighborhoods. For example, a recent study from Raleigh shows that between 2000-2008, single-family residential properties in three local historic districts increased in value between 84 percent and 111 percent, while in the rest of the city their value only increased 49 percent on a per square.

Designing a 21st-Century City: Historic Preservation and the Raleigh of Tomorrow (2014)

Maintains Neighborhood Character

Recently, a white paper for a special issue of the Journal of American Planning Association and a separate 2016 report for the New York Landmark Conservancy by PlaceEconomics looked at the impacts of historic preservation in New York City. The latter looked at the impact historic preservation has on the economy and vitality of New York by looking at metrics such as heritage tourism, demographics, population density of historic districts, the presence of small businesses and the rise of creative industries. It found, for example, that in boroughs outside Manhattan, historic districts with historically high minority populations maintained their racial makeup. The NYLC report also found that historic districts are the densest neighborhoods. The JAPA paper focused on the impacts of a historic designation on the demographic composition of neighborhoods, and found there are small changes in socioeconomic status, but little evidence of changes in racial composition.

Attracts Investments

Rehabilitation of historic buildings has been found to attract new private investment to historic downtowns and has thus been critical maintaining the long-term economic health of many communities. According to a recent on the impact of historic preservation in Texas, every dollar invested in local communities from federal and state preservation incentive programs triggers $4 to $5 of private-sector investment. Since passage of the Federal Historic Tax Credit in 1978, Texas has benefited from $1.78 billion in private-sector investment in rehabilitation, the result being creation of more than 35,000 in-state jobs and the estimated addition of more than $2.4 billion to the state GDP.

Economic Impact of Historic Preservation in Texas (2015)

Creates and Maintains Affordable Housing

According to a recent New York Historic Districts Council white paper on the relation between affordable housing and historic district designation, rent increase happen at a slower pace in historic district designation neighborhoods than in the rest of the city. The report also found that a higher percentage of subsidized rental units have been maintained over time within historic districts than in neighborhoods outside the districts. Lastly, the report emphasizes that 27% of new subsidized rental units were created in historic districts after designation.

The Intersection of Affordable Housing and Historic Districts (2016)

Conserves Resources

In January 2012 the Preservation Green Lab, a project of the National Trust for Historic Preservation, released The Greenest Building: Quantifying the Environmental Value of Building Reuse, which found that in almost every case, the reuse of existing buildings results in fewer environmental impacts over their life spans compared to demolition and new construction. Conserving buildings prevents demolition waste from entering landfills and reduces sprawl by encouraging the revitalization of our existing communities. Further, historic buildings are often more energy efficient than more contemporary buildings due to careful siting choices and the use of passive heating and cooling systems.

The Greenest Building: Quantifying the Environmental Value of Building Reuse

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Additional Resources

Economics and Historic Preservation: A Guide and Review of the Literature by Randall Mason (2005)