THE ECONOMIC BENEFITS OF HISTORIC RESIDENTIAL DISTRICTS

The Los Angeles Conservancy is frequently asked whether the creation of historic residential districts, or Historic Preservation Overlay Zones (HPOZs) as they are called in Los Angeles, results in an increase or decrease in neighborhood property values. To assist community groups considering the creation of an HPOZ, the Conservancy has compiled here the most pertinent studies nationwide on the economic impacts of historic residential districts. Although these comprehensive studies were conducted in other regions, it is our intention to illustrate how these results demonstrate economic patterns consistent throughout most historic districts in the United States.

Virginia

"Property values of historic buildings and sites in communities as diverse as Fredericksburg, Richmond, and Staunton significantly outperform the appreciation rates of non-historic properties" (Virginia's Economy and Historic Preservation: The Impact of Preservation on Jobs, Business and Community, 1995, by Donavan D. Rypkema).

Richmond: The value of properties within a local historic district, Shockoe Slip, increased at an incredible rate compared with the rest of the city (non-historic districts): "Between 1980 and 1990, the assessment total made a quantum leap upward by 245%, from $23,135,886 to $56,761,000. Citywide the aggregate value of real estate increased by 8.9%" (The Importance of Historic Preservation in Downtown Richmond: Shockoe Slip Area, A Case Study).

Richmond: "The appreciation of renovated historic properties is substantially greater than the appreciation rates for new construction and unrestored historic properties....The per square footage value of the renovated properties is $21 a square foot greater than that of new construction" (The Importance of Historic Preservation in Downtown Richmond: Franklin Street, A Case Study, 1990, Kim Chen).

Staunton: Between 1987 and 1995, the values of properties in the residential historic districts of Newtown, Beverley, Gospel Hill and Stuart appreciated at 51.9%, 54.2%, 62.8% and 66.0%, respectively, each exceeding the average appreciation rate of non-historic properties in the city, which was only 51.1% during that period (Rypkema).

Staunton: While its historic residential property values increased at a greater rate than did adjacent non-historic residential properties, "in two of the four historic districts that included residential properties, the average value of a house ($51,543 and $64,694) was, in fact, lower than [the] average value of a Staunton non-historic house ($71,395). This further dispels the myth that historic houses are only mansions for the rich. Staunton's historic districts not only provide quality housing for people of more modest means, but reward them with faster rates of appreciation as well" (Rypkema).

Fredericksburg: "Properties within Fredericksburg's historic district gained appreciably more in value over the last 20 years than properties located elsewhere in the city"... "Between 1971 and 1990, residential properties in the historic district increased in value by an average 674%, while residential properties located elsewhere in the city increased in value by an average 410%. In 1971, the average residential property value in the historic district was $17,920 and $17,060 in the rest of the city. By 1990, average values had risen to $138,697 in the historic district and to $87,011 outside the district" (The Economic Benefits of Preserving Community Character: A Case Study from Fredericksburg, Virginia, 1996, Government Finance Research Center).

Texas

Galveston: Information was obtained on sales transacted over a period of six months in the two residential historic districts and in the nearby [non-historic] San Jacinto/South Broadway neighborhood "to compute an average sales price per area. These figures were compared to the results of an early 1970s study of average sales prices. Between 1975 and 1991, prices increased by an average 440% in the East End [historic district] and by 165% in the Silk Stocking [historic] district. By comparison, prices in the San Jacinto neighborhood increased over the same period by an average 80% (The Economic Benefits of Preserving Community Character: A Case Study from Galveston, Texas, 1991, by Government Finance Research Center).

Georgia

Athens: Woodlawn and Boulevard, which are both listed on the National Register for Historic Places and locally designated, demonstrated a 47.75% increase in property tax assessment values between 1976 and 1996. The values of properties in Milledge Circle and West Hancock, the two National Register districts, rose at an average rate of 22.94%. Cloverhurst, King, and Pulaski Heights, three nearby non-designated neighborhoods, showed an average increase in value of 33.87%. Although the non-designated neighborhoods increased in value more than the nationally registered communities, those registered both on the national and local levels strongly surpassed both with a robust increase in values twice that of nationally registered neighborhoods (Economic Benefits of Historic Preservation in Georgia: A Study of Three Communities: Athens, Rome, and Tifton, 1996, by Athens-Clarke County Planning Department).

Rome: Between 1980 and 1996, designated residential historic areas "increased in value 10% more than non-designated properties, and locally designated properties increased in value almost 80% more than those only nationally designated" (Athens-Clarke County Planning Department).

Tifton: "...Designated properties outperformed those that were not located within historically designated districts. Based on the increase in property values from 1983 to 1996, the locally designated areas combined for an average increase of 10.73%, while the non-designated areas averaged 9.39%. Within the downtown area, which is both locally and nationally designated, assessment values grew at an even higher rate, 13.04%" (Athens-Clarke County Planning Department).

Indiana

Anderson: Over a recent period of 15 years, "the values of properties in the study areas steadily appreciated after the creation of historic [residential] districts" (American Planning Association, Historic Preservation and Property Values in Indiana, June 1998 edition of the Planning Advisory Service Memo).

Elkhart: "The rate of appreciation of properties in the historic [residential] district, a particularly depressed area, mirrored the rate of appreciation of the entire Elkhart market" (APA).

Evansville: "The appreciation of properties within the local historic [residential] district outpaced both the adjacent historic district not regulated by the local district and the overall Evansville market" (APA).

Indianapolis: "The property values in the local historic [residential] district increased at a rate [that]...exceeded the rate of both an adjacent, highly similar and unregulated neighborhood and the larger area of Indianapolis within which it sits." Two adjacent, nearly identical historic residential neighborhoods -- Fletcher Place and Holy Rosary-Danish Church -- are both listed in the National Register. However, "since 1980, Fletcher Place has been a locally designated historic district." Although the value of both neighborhoods appreciated between 1982 and 1995, Fletcher Place "appreciated at a significantly greater rate" (APA).

Indianapolis: Local residential historic districts have promoted consistent homeownership. "In these almost identical Indianapolis neighborhoods, the 1980 ratio of homeowners to renters was close- 34% of the residents in Fletcher Place were owners and 29% in Holy Rosary-Danish Church. By 1990, while homeowners increased to 38% in Holy Rosary-Danish Church, the ratio of owners to renters had nearly doubled in Fletcher Place, rising to 66%."

More information

For speeches, short articles, and excerpts from reports on the economic and fiscal impacts of historic preservation in the United States, please order the Dollars & Sense of Historic Preservation, an informative series published by the National Trust for Historic Preservation; 1785 Massachusetts Avenue, N.W.; Washington, D.C. 20036; telephone: (202) 588-6000.

William Miles Residence
2143 W. 20th St., Western Heights

The Western Heights community of Los Angeles, bounded by Washington Boulevard, Western and Arlington Avenues, and the Santa Monica Freeway, is one of our city's lesser-known historic residential neighborhoods. The Miles residence is one of dozens of historic homes in the neighborhood, characterized by diverse architectural styles including Queen Anne, Craftsman, Tudor Revival, and Spanish Colonial Revival. The neighborhood has been working to create a City of Los Angeles Historic Preservation Overlay Zone for Western Heights.