I love architecture, and thus historic preservation. The designs that span different eras in U.S. history are one of the main qualities differentiating our cities from each other.
So I understand why cities would want to maintain their distinctive architectural characters. Doing so enhances a city's identity — think Brooklyn's brownstones or Boston's three-deckers — and in smaller towns and cities it can be the main economic driver. Had Savannah, Ga., not preserved its historic core, for example, it likely would be just another stagnant Southern city. Across rural America, towns are often made or broken on their ability to re-adapt their old main street buildings.
But historic preservation, if mandated to excess, can hinder good urbanism. I'll explain some of preservation's negative impacts and how they can be reduced through sensible reforms.
One of the problems with historic preservation stems, ironically, from one of its benefits: It improves the quality of a neighborhood by increasing its home values. A Realtor.com study of 2,885 historic homes found that they were 5.6 percent more expensive than similar-sized homes in the same ZIP code. And even if homes aren't historic, they enjoy a 1.4 percent faster increase in property values just from being inside a historic district. But in escalating home prices, preservation works against the more important goal of housing affordability. This may not be a huge problem in smaller cities like Savannah, but it is in bigger cities that have diverse economic functions.
Take Manhattan, for example. According to 2014 data from New York University's Furman Center, it has placed 27 percent of its land plots inside historic districts (compared to under 1 percent in the Bronx, Queens and Staten Island). It's more difficult to make repairs to buildings when they're in these districts, much less demolish them for new structures. That caused these districts to produce far less housing through the 1980s and '90s than non-historic ones did, according to a 2010 study by economist Ed Glaeser. And some districts even lost housing in those decades due to unit consolidation.
Historic preservation also holds back economic development. While a tasteful, well-preserved neighborhood increases home values for individual owners, it may suppress land values by limiting parcels from their optimum use. That reduces a city's potential tax base and stifles creative new projects that might've gone where an out-of-date building now sits.
Manhattan's beautiful First Church of Christ Scientist, for example, has been empty since 2004 because the Landmarks Preservation Commission would not allow its conversion. This forced the church to sell the building, and the purchaser lobbied for 16 years to make it a children's museum. Although the LPC finally approved those plans in June, the prolonged underuse has caused the church to fall into disrepair. Were it active this whole time for a commercial, residential or civic use, it would almost certainly have been better maintained.
But perhaps the main argument against historic districts is aesthetic. Rather than letting neighborhoods develop a nice blend of old and new buildings, it keeps them stuck in time. This may be desirable to those who view cities as museums, but it amounts to a lame bit of romanticism for those who think cities should be dynamic, evolving places.
"As if it weren't enough that large historic districts are associated with a reduction in housing supply, higher prices, and increasingly elite residents," Glaeser wrote, "there's also an aesthetic reason to be skeptical about them: they protect an abundance of uninteresting buildings that are less attractive and exciting than new structures that could replace them."
Glaeser's quote speaks to what should be a rule of thumb for preservation policy: Apply it to specific buildings, not whole districts. There are policies that let cities do this in market-driven ways, incentivizing rather than mandating developers to preserve buildings.
Cities, for instance, can grant property tax relief to owners who restore historic properties, as California municipalities do under the state's Mills Act. Cities can authorize transfers of development rights, as Seattle does, allowing owners to build elsewhere (or sell the rights to build elsewhere to developers) in exchange for maintaining their historic properties. And federal and state historic-tax-credit programs help developers fund repairs and conversions. Cities should make liberal use of these policies, especially if they have an interesting architectural history and lots of developers who specialize in preservation work.
The flipside, though, is to let buildings that surround these historic ones, and that aren't distinctive, be redeveloped for modern uses. That not only advances the goals of housing affordability, economic development and aesthetic diversity but also helps the historic properties themselves by increasing commercial foot traffic.
Atlanta is one city that did this well: It used the Krog Street Market and the Ponce City Market, two old brick warehouses that were converted into mixed-use shopping centers, to anchor new surrounding mid-rise development. This, along with the city's popular 22-mile BeltLine rail-trail, has helped foster a contiguous urban area along the city's eastside.
By contrast, the idea of putting historic status around whole districts, regardless of the merits of individual buildings, is straight out of the top-down-planning playbook. It leads to neighborhoods that are exclusive, static and not even that interesting.
[This article was originally published by Governing Magazine.]
Scott Beyer owns and manages The Market Urbanism Report. He is a roving cross-country journalist who writes regular columns for Forbes, Governing Magazine and HousingOnline.com.
A podcast on Market Urbanism, or the cross between free-market policies and urban issues. We discuss how a liberalized urban approach would lead to more housing, faster transport, improved public services, and better quality of life. Tap to listen.
Market Urbanism Report is sponsored by Panoramic Interests, a progressive developer in San Francisco. Panoramic, which is owned by Patrick Kennedy, specializes in 160 sqft micro-units (called MicroPads) that are built using modular construction materials. Panoramic has long touted these units as a cost-effective way to house San Francisco’s growing homeless population. But Panoramic also builds larger units of between 440-690 sqft. To learn more about Panoramic’s micro-unit model, read MUR’s coverage on the firm in its America’s Progressive Developers series. Or visit Panoramic’s website.
Market Urbanism Report is a media company that advances free-market city policy. We aim for a liberalized approach that produces cheaper housing, faster transport and better quality-of-life.