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HomeMy WebLinkAboutLandmarks WHS HP Commission Training 3CHAPTER 3 – Community benefits of preservation The Economics of Preservation – Communities & Homes Page 1 Commission members should be aware of historic preservation's economic benefits to cities and communities. Dozens of studies conducted nationwide in recent decades have demonstrated that historic preservation is an economically sound, fiscally responsible, and cost-effective strategy that produces visible and measurable economic benefits to communities. In short, historic preservation makes good economic sense. Tax Savings In addition to the most obvious benefit of enhancing the surrounding physical environment, how can the rehabilitation and preservation of older buildings help a community? Between 2001 and 2005, the Wisconsin Historical Society assisted property owners with $28 million of rehabilitation work on historic homes, leading to $7 million of state tax savings. During these years, the state also recorded $254 million of economic activity in the rehabilitation of income-producing historic buildings. These tax credits amounted to $50 million in federal tax savings and $13 million in state tax savings for Wisconsin residents. These economic impacts have a ripple effect throughout local economies and promote additional investment and tourism. Increased Property Values Our houses often represent our largest economic asset, and we all want this asset to improve in value. Historic district designation and the use of design review guidelines help to ensure that our investment in a historic area will be protected — from inappropriate new construction, misguided remodeling, or demolition. Studies have shown that over time, property valuation in historic districts tends to increase, sometimes dramatically. No evidence suggests that historic designation and the use of design guidelines lowers property values. Numerous studies across the country have shown that property values in designated National Register or local historic districts generally increase at a more rapid rate than the market. One example is a four-year study conducted during the 1990s in Knoxville, Tennessee, that compared house sale prices in three similar neighborhoods with varying historical designations. Over the four-year period, the neighborhood with both a local and a National Register designation had increased sale prices of 157%. The second neighborhood, which had National Register status but no local historic zoning, had increased sale prices of 36%. Property values in the neighborhood without any historical zoning or recognition increased by only 20% during the same period. Locally designated districts protect the composite or overall economic value of a historic area. Every building or parcel in a historic area is influenced by the actions of its neighbors. Every decision one property owner makes has an impact on the property values of another. Design guidelines provide a level playing field for all property owners because they apply equally to everyone in a historic area. Therefore, all property owners' rights are protected from the adverse economic impact that could result from the actions of others. Historic designation and design review not only benefits existing residents of a neighborhood, but it often attracts new buyers who know their investment will be protected. Enhanced Livability Quality of life is a key ingredient in most of today's economic decisions. Historic preservation is important because healthy downtowns and neighborhoods reflect a community's self-image. Companies planning to relocate will often consider the economic and physical health of the downtown in their decision-making process. Consider these points:  More than any other man-made element, historic buildings differentiate one community from all others. Any community can duplicate your community's water lines, industrial park, shopping mall, or tax rate. No community can duplicate your historic resources.  Many quality-of-life activities—museums, theaters, and libraries—are located in historic buildings and in downtown areas.  The quality of historic buildings says much about a community's self- image. A community's commitment to itself is a prerequisite for nearly all quality-of-life elements.  Historic preservation can lead to revitalized commercial areas, and commercial areas that are more active and lively also generally increase safety and diversity.  Quality-of-life issues and the livability of a community are important factors to Baby Boomers, who make up the largest percentage of the U.S. population and have the highest median household incomes. Baby Boomers typically have an interest in culture and heritage and tend to enjoy entertainment venues, walkable streets, and other aspects commonly associated with preservation.  Many Baby Boomers in the coming years will be downsizing and choosing urban lifestyles for dining, arts and culture, and convenience. A large number of Boomers don't want to be tied to the car in suburbia. As a result, demand will increase for housing in our downtown areas. Many downtowns are already seeing a surge in conversions of upper floor areas for loft apartments and condos. The Economics of Preservation – Tourism & Jobs Page 2 In addition to offering tax savings, increasing property values, and enhancing the livability of a community, historic preservation efforts contribute to two other community economic benefits: tourism and job creation. Economic Benefits of Heritage Tourism A phrase that all commission members should have in their vocabulary is "heritage tourism." Across the nation, historic and cultural sites draw more tourists than recreational assets, making heritage tourism one of the fastest growing industries today. Heritage tourism strengthens the local economy by bringing outside dollars into local businesses. Recent studies reveal that a typical heritage tourist stays longer, spends more money, and makes return trips or extends his or her stay much more than the average tourist. Communities that identify, preserve, enhance, and market their unique history and architecture will attract such visitors. Heritage Tourism in Wisconsin In Wisconsin, historic properties draw a substantial number of visitors to the state and constitute a large percentage of its tourism revenue. One of the most popular activities of Wisconsin tourists is sight-seeing, and travelers often select areas to visit based on the availability of historic and scenic sites. According to the Wisconsin Department of Tourism, in 2017 tourism had a $20.6 billion impact on the state economy, with tourism generating $1.5 billion in state and local revenues and sustaining 195,255 jobs in the state. Wisconsin was part of a pilot Heritage Tourism Program that began in 1990 in partnership with the National Trust for Historic Preservation. As one of four states selected to be part of this economic development initiative, Wisconsin became a model for similar efforts across the country. The Heritage Tourism Program is administered through the Department of Tourism and provides professional advice to local projects on tourism development, preservation and marketing, long-term development plans, and enhanced services to increase tourism. Projects developed through this program include:  Timber Trails in Chippewa Valley  Fox-Wisconsin Rivers Heritage Corridor  Wisconsin's Ethnic Settlement Trail  Lake Superior Heritage Highways Another great example of a successful "homegrown" heritage tourism project in Wisconsin is "Wisconsin's Northwest Heritage Passage." In this project, the counties of Barron, Bayfield, Burnett, Polk, Sawyer, and Washburn worked together to produce thousands of maps to highlight the area's historic downtowns, craft shops, farmer's markets, and farms offering direct sales of produce. This map was funded by organizations in each of the counties involved, along with grant funds provided through the Wisconsin Department of Tourism Joint Effort Marketing Program. Comments from small business owners about the "Passage" map indicate the positive impact of this effort:  "Definite impact. We've had our best summer in four years."  "It has dramatically increased awareness of our immediate community and other handmade, homegrown businesses."  "Yes, brought people here from out of the immediate area."  "We had customers come in stating they found us on the map. Great way to promote on a large scale with a small budget."  "I believe your map is responsible for my success this summer!" In addition to the above accolades, the "Passage" program received a Wisconsin Rural Partners, Inc. award as one of the Top Ten Development Initiatives of 2001. Creating Local Preservation Jobs Rehabilitation and revitalization projects create thousands of construction jobs annually, and historic preservation creates more jobs than new construction. On average, $1 million invested in rehabilitation instead of new construction produces:  20 percent more jobs  $120,000 more in the local economy  $107,000 more in household income  $34,000 more in retail sales (The Economics of Historic Preservation, p. 14) Historic preservation creates more jobs largely because rehabilitation projects are more labor intensive than new construction. In new construction, about half of all expenditures are for labor and half are for materials. In a typical historic rehabilitation project, between 60 and 70 percent of the total cost goes toward labor, which has a beneficial ripple effect throughout the local economy. Labor for preservation projects — carpenters, electricians, plumbers, sheet metal workers, painters — is nearly always hired locally. And local wages are spent locally. In addition to construction, historic preservation also generates jobs for architects, accountants, attorneys, engineers, preservationists, real estate brokers, and others. The materials used in preservation projects are much more likely to be purchased locally, whereas materials for new construction are often purchased elsewhere. Across the nation, building rehabilitation outperforms new construction in the number of jobs created, the increase in local household incomes, and the impact on other industries. [Sources: Rypkema, Donovan D. "The Economics of Historic Preservation: A Community Leader's Guide" (Washington, D.C.: National Trust for Historic Preservation, 1994); Wisconsin Department of Tourism. The Power of Wisconsin Tourism (PDF, 76 KB)] The Environmental Impact of Historic Preservation Page 3 Historic preservation conserves resources, encourages sustainable design, and increase the walkability of a community, making it an environmentally friendly approach to community revitalization. Commission members should be aware of historic preservation's economic benefits to cities and communities. Dozens of studies conducted nationwide in recent decades have demonstrated that historic preservation is an economically sound, fiscally responsible, and cost-effective strategy that produces visible and measurable economic benefits to communities. In short, historic preservation makes good economic sense. Resource Conservation and Sustainable Design Preserving and rehabilitating an existing historic building has less negative impact on the environment than new construction. The rehabilitation of older buildings utilizes existing infrastructure, such as water lines, sidewalks, and streets, and preserves existing building materials and architectural elements. Debris from demolition typically makes up 25 to 30 percent of all materials discarded in landfills. The rehabilitation of an existing structure prevents substantial amounts of building material from becoming landfill. The economic revitalization of a historic main street lessens the demand for another strip mall on the edge of town. Historic buildings, particularly vernacular designs, are by nature closely tied to the land and are often compatible with the principles of today's sustainable design for environmentally friendly structures. Features of historic buildings such as porches, large windows, and projecting overhangs take advantage of natural ventilation systems and solar heating. Historic properties typically incorporate the use of shade trees in their setting and are often sited to take advantage of natural wind currents. Preservation encourages the use of natural materials, typically generated at the local level. Conservation of Embodied Energy Historic buildings embody energy that was expended in the past — the energy put forth to make the bricks, clapboard siding, windows, and other elements of the building. Rehabilitating older structures is a cost-effective reuse of these existing assets. If original elements are removed and replaced with new materials, new energy must be applied to make them. On the heels of the energy crisis of the mid-1970s, the consulting firm Booz Allen Hamilton measured the amount of energy inherent in various building materials. They found that the amount of energy required to manufacture eight bricks, haul them to a construction site, and place them in a wall is equal to the amount of energy in a gallon of gasoline. This finding was important because it tells us that existing historic buildings — the heart of many communities' Main Streets and neighborhoods — represent a huge energy investment. This investment is lost when these buildings are torn down. For example, the amount of energy inherent in the bricks alone in a typical three- floor, 20-by-100-foot brick bearing-wall main street building is equal to the amount of energy in more than 3,700 gallons of gasoline — enough to keep the average American driving for almost eight and a half years. Multiply this by the structures that make up a downtown or inner-city residential building stock, and the embodied energy is enormous. Increased Walkability Historic preservation increases the general walkability of a city, town, or village. Historic structures were built and designed with pedestrians, rather than automobiles, in mind. Historic commercial buildings, and many historic residential buildings, were built up to the sidewalk. Unlike their modern-day counterparts, historic commercial buildings have large display windows that passersby can see through, and their entryways are designed to be inviting to pedestrians. This welcoming design encourages interaction, and the more "walkable" a downtown or commercial area is, the more active and vibrant it becomes. And when people can take a pleasant walk to their destination, they may just leave the car at home. Smart Growth Community Planning Page 4 The smart growth planning approach encourages a community to conscientiously direct its growth. Commission members should take an active role in their community's smart growth planning. A term that historic preservation commission members should have in their vocabulary is "smart growth." Smart growth refers to an approach toward community planning and development. The goal of smart growth is for a community to conscientiously direct its growth rather than allowing growth and development to happen randomly, which usually results in misuse of open space and wastes public and private investments. Through smart growth planning, communities recycle existing buildings and land, conserve historic residential neighborhoods and downtown commercial districts, preserve farmland, and maintain community character. Role of Preservation in Smart Growth Planning Historic preservation work plays an important role in smart growth planning. Members of preservation commissions should be actively involved in developing and guiding their community's future through incorporating smart growth into local planning. Wisconsin's comprehensive planning legislation requires community comprehensive plans to address these nine elements:  Issues and opportunities  Housing  Transportation  Utilities and community facilities  Agricultural, natural, and cultural resources  Economic development  Intergovernmental cooperation  Land use  Implementation As part of local government, a preservation commission should participate in the community's comprehensive planning process and take a lead role in developing the cultural resource component of the plan. Community members and groups with a significant interest or experience in historic preservation should also be included in this portion of the planning process. In addition to leading the development of the cultural resource element of a community's comprehensive plan, the preservation commission should also be involved in the entire planning process and contribute to other elements of the plan. The commission's participation will ensure that all elements of the plan incorporate concerns for the community's cultural resources. The commission should have a representative on the planning committee and attend as many meetings as possible. Guide to Smart Growth The Wisconsin Historical Society's State Historic Preservation Office has published "A Guide to Smart Growth and Cultural Resource Planning," which thoroughly addresses a commission's role in the planning process and how to develop the cultural resource portion of a comprehensive plan. This document is a valuable resource that every commission member should have. The booklet outlines the following steps to take when developing the cultural resource element: Organize the Historic Preservation Team Encourage community participation and include representatives from a wide variety of key community groups, such as Native Americans, local historical society members, Main Street program members, local preservation groups, etc. Clarify the group's roles and purpose and discuss views and perceived problems concerning local historic and cultural resources. Create Vision Investigate the concerns and values of the community regarding its historic and cultural resources. Develop overarching goals. Take Stock Collect and evaluate the available information about the community's cultural resources. Decide if an additional survey is needed. Set Goals Assess how existing programs meet the community's need to preserve significant historic and cultural resources. Identify issues and needs and formulate long-range goals. Strategize Develop a strategy statement that proposes specific actions to achieve the stated goals, identifies responsible parties, and defines a time frame. Implement Define how the plan's goals and policies will be carried out. Be sure that the implementation element corresponds to other elements within the overall comprehensive plan. Evaluate Progress Establish a process to measure the progress of reaching the set goals, policies, and strategies.