30 (or so) Reasons why Historic Neighborhoods Make Great Cities

Preservation Alliance of Greater Philadelphia

October 12, 2012

Impact of Conservation Policies on Real Estate Values

Donovan Rypkema Heritage Strategies International

Washington, DC

Differentiation

Character

Beauty

Engender Creativity

In Migration

Washington Population Growth

1990 - 2000

Density at a Human Scale

Measuring Economic Impact Environmental

Measurables – Compact development/Density

“Relatively high intensity

can be achieved within

constraints posed by the

height, form and texture

of traditional

communities as is

demonstrated in places

such as Georgetown

and Alexandria.”

Economic Integration

Housing at Right Scale

27% of households 1 person

15% of 25-34 year olds live with parents

14% of prospective home buyers will buy smaller

Mirror of the City

Measuring Economic Impact

Neighborhood Measurables – Mirror of the City

Voice at City Hall

Reflect Evolution of the City

Mixed Use

Proximity

Working families needing affordable housing also need proximity – to transportation, schools, work, and shopping. The availability of each of those categories in older neighborhoods is decidedly closer than in new neighborhoods.

Interconnectivity

Property Values

2000 – 2007

• In local historic

district = + $59,000

to $67,000

• Historic district

properties + 21% in

appreciation

Property Values

Property Values – Philadelphia

House Price Appreciation Over Time

(Indexed, 1980 = 100)

Homes in both local and national

historic districts appreciated in

value at a higher rate than houses outside historic

districts

Property Values

Homes in local historic districts enjoy an

immediate 2 percent increase in values relative to the city average, once

local designation has taken

place; and thereafter, they appreciate at an annual

rate that is 1 percent higher than the city

average.

Premium for Properties in Historic Districts (Philadelphia)

0

20

40

60

80

100

120

Not in HistoricDistrcit

In NationalRegister District

In Local District

Base Value Historic District Premium

14.3% 22.5%

Canton, Connecticut

Stability

Single Family Foreclosures

Philadelphia

0

1

2

3

4

5

6

7

8

Foreclosures per 1000 Housing Units

Historic Districts

Comparable Neighborhoods

Philadelphia

Analysis of:

Single Family Houses

6 Historic Districts

10 Comparable Neighborhoods

10/09 – 9/10

Tax Generation

The Federal Tax Credit: A Self-Funding Incentive (1978-2008)

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

Cost to FederalGovernment

Taxes to the FederalGovernment

Inflation Adjusted Dollars (Billions)

$2.0 Million in Business Income Tax

$7.8 Million in Property Tax

Every Year

$10.8 Million in Sales Tax

$15.1 Million in Personal Income Tax

What do State and Local Governments get?

Historic District Parcels

+ $31,000

$40,000 more revenue for County

$50,000 more revenue for

City

$200,000 more revenue for Schools

Analysis of North Little Rock, Arkansas

Catalytic Role of Investment

Cleveland 1994 - 2000

Cleveland 2000 - 2006

Suburbs 2000 - 2006

42.8%

32.7%

27.6%

36.9%

28.7%

27.6%

27.8%

24.9%

20.5%

Impact of Cleveland Restoration Society Loans

Loan Near Loan Not Near Loan

…homeowners are

finding investment in

their community’s

architectural past

can be aesthetically,

culturally, and

financially rewarding.

Jobs

Jobs in Delaware Per $1 Million of output

Household Income in Delaware Per $1 Million of output

Jobs in Georgia In Georgia, $1,000,000 in output from Various

Industries means……

Jobs Salary & Wages

Automobile

Manufacturing

3.5 $245,000

Computer

Manufacturing

4.0 $255,000

Air Transportation 8.7 $476,000

Poultry Processing 10.4 $426,000

New Construction 14.9 $616,000

Rehabilitating

Historic Buildings

18.1 $750,000

Spend $1,000,000 in Indiana

New Construction Rehabilitation

# of Houses 8 10

# of Jobs 15.2 18.8

Household Income $613,500 $782,000

Historic Tax Credit and Job Stimulation

Historic Tax Credit (1978-

2008)

Cost to Taxpayers

$16.6 Billion

Jobs

1,800,000

Cost per Job

$9,222

Stimulus Plan

(2009-2010)

Cost to

Taxpayers

$260.7 Billion

Jobs

585,654

Cost per Job

$445,183

Small Business Incubation

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2000 2002 2004 2006 2008 2010

Georgia January Unemployment Rate

Main Street: Success against the Trend

0

5000

10000

15000

20000

25000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Cumulative Job Gain Georgia Main Street and Better Hometown

Communities

Cumulative Job Gain

Main Street: Success against the Trend

$10,000,000

$11,000,000

$12,000,000

$13,000,000

$14,000,000

$15,000,000

$16,000,000

$17,000,000

$18,000,000

$19,000,000

20

00

20

01

20

02

20

03

20

04

20

05

200

6

20

07

20

08

200

9

20

10

State Revenue Collections (000)

State Revenue Collections

0

1000

2000

3000

4000

5000

6000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Cumulative Business Growth Georgia Main Street and Better Hometown

Communities

Cumulative Business Growth

Main Street – Business Creation

IF Small Business

had laid off workers

at the same rate a

Big Business, there

would be

2,699,921 more

unemployed today

Economic Competitiveness

Quality of Life as Key Economic

Development Variable

Over the long term, places with

strong, distinctive identities are

more likely to prosper than

places without them. Every place

must identify its strongest, most

distinctive features and develop

them or run the risk of being all

things to all persons and nothing

special to any…Livability is not a

middle class luxury. It is an

economic imperative. Nobel Economist Robert Solow

Public Health

Neighborhoods built a half-century or more ago were designed with "walkability" in mind. And living in them reduces an individual's risk of becoming overweight or obese. American Journal of Preventive Medicine

Adaptability

Education

Environment Responsibility

It takes 10 to 80 years of an energy efficient new building to make up for the negative climate change

impacts of construction

Building reuse almost always offers environmental savings over demolition and new construction

0

50

100

150

200

250

300

Pre 1930 1931-1950 1951-1970 1971-1990 Post 1990

Median kBTU/sf

A quarter to a third of

all solid waste is

from construction

debris

What’s the cost in

dollars?

What’s the cost to

the environment?

1,344,000

“Head of Green

Building Council

Links Sustainable

Development and

Heritage

Conservation”

Philippines Green Building Council

Fiscal Responsibility

The Environment AND the Budget

Preservation projects save 50 to 80

percent in infrastructure costs compared to new

suburban development.

The Public Cost of the Geometry of Circles

When you double the distance from the center, you quadruple the area that has to be covered by:

• Water lines • Sewer lines • Streets • Curb and gutter • Street lights • Miles for the

police, ambulance, fire trucks to cover

Here’s a building in your neighborhood commercial district

There is $6,631.25 in current dollars invested in sidewalk, curb, gutter, water line and sewer line to service that building

Every year that building sits empty the taxpayers have thrown away $291.32 of investment

Stranded Investment

Vanishing Inventory

Sustainable Development

Historic Preservation

Reduces

Demand for land

and materials

Reuses

Embodied energy,

skills, labor,

knowledge

Recycles

The whole building

Recycle?

Reuse?

Reduce?

Sustainable Development

Environmental

Responsibility

Economic

Responsibility

Social/Cultural

Responsibility

Viable

Equitable

Livable

Historic

Preservation

Recession Response

Economic

All the evidence demonstrates that

investment in heritage is an inherently sustainable,

long term, and measurably successful solution to economic

recession. Economic

Public Policy Advancement and Sensible Land Use Policy

Historic Preservation isn’t the answer to everything, but

it’s part of the solution of many urban challenges

No

Role

Support

Role

Major

Role

DIRECTIVE

X Coordinate public facilities/services to support revitalization

X Improve and create mix of housing for people of all incomes

X Enhance neighborhood commercial districts

X Reclaim Anacostia waterfront

X Create living and expanded Downtown

X Create new urban neighborhoods on institutional sites

X Leverage transit by promoting transit-oriented development

X Transform public schools into community anchors

X Strategically invest in targeted neighborhoods

X Increase city’s population by 100,000 in next 10 years

Historic Preservation and the 10 Directives

Walkability

The Growing Importance of Walkability

Create Walkable Neighborhoods Walkable communities are desirable places to live, work, learn, worship and play, and therefore a key component of smart growth. Smart Growth America

Two-thirds see being within an easy walk of places in their community as an important factor in deciding where to live. National Association of Realtors Community Preference Survey

The Growing Importance of Walkability

Walker’s Paradise

• 90-100

• Daily errands do not require a car

Very Walkable

• 70-89

• Most errands can be accomplished on foot

Somewhat Walkable

• 50-69

• Some amenities within walking distance

Car Dependent

• 25-49

• A few amenities within walking distance

Car Dependent

• 0-24

• Almost all errands require a car

Historic Preservation in Connecticut: Advancing good urban design principles in

towns and cities of every size

28%

61%

9%

2%

Walker's Paradise:Daily errands donot require a car.

Very Walkable:Most errands canbe accomplishedon foot.

SomewhatWalkable: Someamenities withinwalking distance.

Car Dependent:Almost all errandsrequire a car.

Scores from Walkscore.com

Good urban neighborhoods are walkable. Nearly

90% of historic preservation tax credit projects are in neighborhoods described as Very Walkable or Walker’s Paradise

Environmental

Essential Rightsizing Strategy

Re-adjusting a shrinking city’s built

environment (buildings and

infrastructure) to match its current

and projected population and

development trends

What is Rightsizing?

THE STUDY

20 older industrial cities

22 interviews with

preservationists

16 online surveys completed

by planners

8 follow-up interviews with

planners

5 interviews with “focus

group”

Rightsizing and Historic Preservation: It ain’t just Detroit

Rightsizing is a not just big cities

Between 2000 and 2010, 454 cities lost population

– 5 were over 500,000 in population

– 50 were between 100,000 and 500,000

– 110 were between 50,000 and 100,000

– 239 were between 20,000 and 50,000

Rightsizing is not just the northeast

• 41 states plus Puerto Rico had at least one city over 20,000 that lost population

• Even "growth" states, had cities with shrinking population: California (57); Florida (26); Texas (11), Virginia (11), Arizona (4)

There are rightsizing needs in growing cities

Often cities that are growing still have neighborhoods that could use rightsizing tools and strategies

THE STUDY – PART TWO

20 older industrial cities

All had National Register

Districts

17 had Local Districts

Overlaid historic districts on

Census Block data

Compared population change

2000 to 2010 of historic

districts vs entire city

FINDINGS OF POPULATION STUDY

1 As a whole 20 cities lost 11.6% of

their population.

Local historic districts lost 6.6%

FINDINGS OF POPULATION STUDY

2 In 11 of the 17 that had local

districts the population change was

more favorable than the city as a

whole

FINDINGS OF POPULATION STUDY

3 However, only 14 were CLGs,

many did not have basic

information about historic districts

web accessible, only 2 had

publically available GIS maps

Smart Growth

Smart Growth Principle 1 Mix land uses

Smart Growth Principle 2 Take advantage of compact building design

Smart Growth Principle 3 Create a range of housing opportunities and choices

Smart Growth Principle 4 Create walkable neighborhoods

Smart Growth Principle 5 Foster distinctive, attractive communities with a strong sense of place

Smart Growth Principle 6 Preserve open space, farmland, natural beauty, and critical environmental areas

Smart Growth Principle 7 Strengthen and direct development towards existing communities

Smart Growth Principle 8 Provide a variety of transportation choices

Smart Growth Principle 9 Make development decisions predictable, fair,

and cost effective

Smart Growth Principle 10 Encourage community and stakeholder collaboration in development decisions

Smart Growth Principles

• Create range of housing opportunities and choices

• Create walkable neighborhoods

• Encourage community and stakeholder collaboration

• Foster distinctive, attractive places with a strong Sense of Place

• Make development decisions predictable, fair and cost effective

• Mix land uses

• Preserve open space, farmland, natural beauty and critical environmental areas

• Strengthen and direct development towards existing communities

• Provide a variety of transportation choices

• Take advantage of compact building design

Historic Neighborhoods

X

X

X

X

X

X

X

X

X

X

The preservation movement has one great curiosity. There is never retrospective controversy or regret. Preservationists are the only people in the world who are invariably confirmed in their wisdom after the fact.

John Kenneth Galbraith

Thank you very

much

©Donovan D. Rypkema, 2012 PlaceEconomics

Washington, DC 202-588-6258

Drypkema@PlaceEconomics.com