The Economics of Historic Preservation

The following is an excerpt from the Keynote Address, delivered by Donovan Rypkem, at HDC’s 2007 Preservation Conference:

Other areas where historic preservation adds to the economic responsibility of sustainable development include heritage tourism. Wherever heritage tourism has been evaluated, a basic tendency is observed: heritage visitors stay longer, spend more per day and, therefore, have a significantly greater per trip economic impact.

In February, Business Week had an article about the importance of artists to a growing local economy. But where do artists choose to live? It isn’t the garden apartment in the suburbs. More often than not, it is in historic neighborhoods.

Perhaps the area of preservation’s economic impact that’s been studied most frequently is the effect of local historic districts on property values. It has been looked at by a number of people and institutions using a variety of methodologies in historic districts all over the country. The most interesting thing is the consistency of the findings. Far and away the most common result is that properties within local historic districts appreciate at rates greater than the local market overall and faster than similar non-designated neighborhoods. Of the several dozen of these analyses, the worst-case scenario is that housing in historic districts appreciates at a rate equivalent to the local market as a whole.Recent analysis indicates that historic districts are also less vulnerable to the volatility that real estate values are often subject to during interest rate fluctuations and economic downturns.

Like it or not we live in an economically globalized world. To be economically sustainable it’s necessary to be economically competitive. But to be competitive in a globalized world a community must position itself to compete not just with other cities in the region but with other cities on the planet. And a large measure of that competitiveness will be based on the quality of life the local community provides, and the built heritage is a major component of the quality of life equation. This is a lesson that is being recognized worldwide.

A great study just released last month in Australia reached this series of conclusions:1) a sustainable city will have to have a sustainable economy; 2) in the 21st century, a competitive, sustainable economy will require a concentration of knowledge workers; 3) knowledge workers are choose where they want to work and live based on the quality of the urban environment; and 4) heritage buildings are an important component of a high quality urban environment.

From the Inter American Development Bank we get, “As the international experience has demonstrated, the protection of cultural heritage is important, especially in the context of the globalization phenomena, as an instrument to promote sustainable development strongly based on local traditions and community resources.”Certainly among the most competitive cities in the world is Singapore. But here’s what Belinda Yuan of Singapore National University says, “the influences of globalization have fostered the rise of heritage conservation as a growing need to preserve the past, both for continued economic growth and for strengthening national cultural identity.”What neither the supporters nor the critics of globalization understand is that there is not one globalization but two, economic globalization and cultural globalization. For those few who recognize the difference, there is an unchallenged assumption that the second is an unavoidable outgrowth of the first. Economic globalization has widespread positive impacts; cultural globalization ultimately diminishes us all. It is through the adaptive reuse of heritage buildings that a community can actively participate in the positive benefits of economic globalization while simultaneously mitigating the negative impacts of cultural globalization.

So there are some ways that heritage conservation contributes to sustainable development through environmental responsibility and through economic responsibility. But I saved the third area, cultural and social responsibility, for last, because in the long run it may well be the most important.First, housing. In the United States today we are facing a crisis in housing. All kinds of solutions, most of them very expensive, are being proposed. But the most obvious is barely on the radar screen, quit tearing down older and historic housing. Houses built before 1950 disproportionately are home to people of modest resources, the vast majority without any subsidy or public intervention of any kind. So you take these two facts, there is an affordable housing crisis and older housing is providing affordable housing and one would think, Well, then, a high priority must be saving that housing stock? Alas, not so.In the last three decades of the 20th century, we lost from our national inventory of older and historic homes 6.3 million year-round housing units! Over 80 percent of those units were single-family residences. Now a few of those burned down or were lost to natural disasters. But the vast majority of them were consciously torn down, were thrown away as being valueless. And today millions of American families are paying the cost by paying for housing they cannot afford. Certainly not every one of those houses could or should have been saved. But if even half were retained instead of razed, the picture today would be much different for the millions of Americans inadequately or unaffordably housed.

For the last thirty years, every day, seven days a week, 52 weeks a year we have lost 577 older and historic houses. For our most historic houses, those built before 1920, in just the decade of the 1990s, 772,000 housing units were lost from our built national heritage.But when there are policies to conserve older housing stock, we are meeting the social responsibility of sustainable development.

But at least as important as the affordability issue is the issue of economic integration. America is a very diverse country racially, ethnically, educationally, economically. But on the neighborhood level, our neighborhoods are not diverse at all. The vast majority of neighborhoods are all white or all black, all rich or all poor. But the exception, virtually everywhere I’ve looked in America, is in historic districts. There rich and poor, Asian and Hispanic, college educated and high school drop out, live in immediate proximity, are neighbors in the truest sense of the word. That is economic integration and sustainable cities are going to need it.

Earlier I mentioned the labor intensity of historic preservation and the jobs it creates as part of the economic component of sustainable development but I want to mention it again in the social context. Those aren’t just jobs. They are good, well-paying jobs, particularly for those without formal advanced education. That too should be part of our social responsibility within sustainable development.

I told you that I work in the area of economic development. Economic development takes many forms; industrial recruitment, job retraining, waterfront development, and others. But historic preservation and downtown revitalization are the only forms of economic development that are simultaneously community development. That too is part of our social responsibility.

So I want to return to the premise with which I started. Green buildings are part of, but in no way are a synonym for sustainable development. That is not to say that we should not all be very pleased that preservationists are beginning to try to enlighten the green building people. Preceding the National Trust conference in Pittsburgh last fall was held a National Summit on the greening of historic properties. This was an excellent step forward and I certainly don’t have any quarrel with any of their conclusions or recommendations. I am certainly not wedded to the Secretary of the Interiors Standards for the Rehabilitation of Historic Buildings. And if the Secretary’s Standards have to be adjusted to be more environmentally sensitive, so be it.Environmentalists cheer when used tires are incorporated into asphalt shingles and recycled newspapers become part of fiberboard. But when we reuse an historic building, we’re recycling the whole thing.

Finally, I’d ask you to take a moment and think of something significant to you personally. Anything. You may think of your children, or your spouse, or your church, or god, or a favorite piece of art hanging in your living room, or your childhood home, or a personal accomplishment of some type.

Now take away your memory. Which of those things are now significant to you? None of them. There can be no significance without memory. Now those same things may still be significant to someone else. But without memory they are not significant to you. And if memory is necessary for significance, it is also necessary for both meaning and value. Without memory nothing has significance, nothing has meaning, nothing has value.That, I think, is the lesson of that old Zen koan, “If a tree falls in a forest and no one hears, did it make a sound?”

Well of course it made a sound; sound comes from the vibration of molecules and a falling tree vibrates molecules. But that sound might as well not have been made, because there is no memory of it.We acquire memories from a sound or a picture, or from a conversation, or from words in a book, or from the stories our grandmother told us. But how is the memory of a city conveyed?

Here’s what Italo Calvino writes, “The city … does not tell its past, but contains it like the lines of a hand, written in the corners of the streets, the gratings of the windows, the banisters of the steps, the antennae of the lightening rods, the poles of the flags, every segment marked in turn with scratches, indentations, scrolls.”

The city tells it own past, transfers its own memory, largely through the fabric of the built environment. Historic buildings are the physical manifestation of memory and it is memory that makes places significant.

To read Donovan Rypkem’s speech in its entirety, click here:

http://www.hdc.org/Conference2007.htm#keynote