Don't Believe the Hysterical Preservationists; J. Saltzman

Instead, the owner cannot alter the look of his property without the permission of his local government. For Dennis Foley that meant being told by the Arlington County, Virginia, Historic Review Board in 1993that he could not hang wood-grain vinyl shutters on his home. Because he lives in an histor ically protected community, only the more expensive kind made from genuine wood will do.2 Even with this much say-so over changes to private property at the local level, pres ervationists want even more control. In 1993, the National Trust for Historic PresMr. Saltzman teaches American Literature at St. John's School, Houston, Texas. He also volun teers as a Policy Analyst for the Houston Prop erty Rights Association. ervation placed the entire state of Vermont on the Trust's annual list of the 11 most endangered places in America and followed in 1994by putting Cape Cod on the same list. In some cases, state and federal agencies can already direct changes to "historic"

buildings and sites. And preservationists have no qualms about annihilating owners' freedom of choice when it conflicts with preservation ists' wishes for the appearance of proper ties. For example, a recently proposed historical preservation ordinance for Hous ton called for fines of up to $500 per day for violating any article of the ordinance, a penalty the local Preservation Alliance crit icized as too weak to "provide an effective deterrent"3 against unacceptable changes to "historic" buildings. Meanwhile, the Na tional Trust for Historic Preservation ad vises: "The stiffness of the penalty varies with each community depending on the likelihood of non-compliance. ,,4 According to this thinking, local police powers are needed to protect a "historic" property from the whims of its owner. As the Houston Preservation Alliance claims, "historic landmarks are landmarks no mat ter what an owner might think and should be designated and protected accordingly. ,,5 In other words, successful preservation can not occur unless the owner of a "historic"

building or site can be forced to let others manage changes to the appearance of his property. 456 PreservationWithoutCoercion But the coercive preservationists are wrong. Successful preservation does occur voluntarily. In Great Britain, for example, private and voluntary conservation societ ies-including the National Trust and Na tional Trust for Scotland, the Historic Houses Association, and the Landmark Trust-use private donations and some gov ernment grants to acquire, restore, and maintain over 1,800 historic properties, al most all in the British Isles.6 Recently, the Landmark Trust has purchased sites in Italy and the United States. 7 And the Trust gets one third of its annual budget from leasing its properties for holidays or vacations. Uncoerced preservation is also common in America. For example, Kykuit, the Rocke feller family estate near Tarrytown, New York, was given over in 1992 to the (Amer ican) National Trust for Historic Preserva tion, so that the Trust could display the estate's house, gardens, and art collection to the public.8 Just last February, the Heritage Society of Houston received the circa-1870 house of the Reverend Jack Yates, a nine teenth-century African-American civic leader. The Society will spend $300,000 renovating the building, turning it into a museum.9 In 1989, the National Trust for Historic Preservation and Successful Farm ing magazine teamed up in a project called "Bam Again!" to advise farmers on how to restore old barns and gave prizes of up to $1,000 for the best results. 10 Offering prizes can encourage preserva tion, but even better urging comes from market incentives. According to Time, "Bam Again!" prizewinners "spent an av erage of $11,000on their projects, compared with a $25,000-to-$35,000cost for a new metal building.,,11 In general, rehabilitating an old structure is cheaper than building a comparablenew one, especiallywhen the cost of tearing down the existing building is included. 12 Thus, common sense leads investors to restore old buildings conveniently located in or near a downtown. A comprehensive re view of modem economic research on his457 toric preservation appeared in the Summer 1991 issue of the Journal of the American Planning Association and concluded that "gentrification rarely proceeds by central direction, but rather, through the individual investment decisions of hundreds of thou sands of people.,,13 Preservation rules usu ally arrive only after an area has achieved fashionability and stirred investor interest.

For example, renewal preceded local dis trict rules in the Woodland in Waverly neighborhood of Nashville. This locale was first developed between the 1890s and the 1930s. Mter declining through the 1950s and 1960s, the area revived in the 1970s.14 Local historic district controls on demoli tions and design arrived in 1985 once a petition was signed by 80 percent of neigh borhood property owners. So before the controls, Woodland in Waverly had already become a magnet for buyers serious about fixing up old buildings. Restoration has also preceded regulation in Houston, which adopted its first preser vation ordinance in 1995.15 Prior to that, some of the city's oldest neighborhoods have enjoyed a spontaneous revival since the 1970s. Perhaps the best example is the Houston Heights, a neighborhood of four square miles first developed before the tum of the century. Formerly one of Houston's most desir able locations, the Heights deteriorated in the early sixties. Crime soared. Neverthe less, a surplus of Victorian homes and quaint bungalows, available at bargain prices, began attracting buyers in the early 1970s who sought to settle only minutes from downtown and from the city's other major employment centers.

What began as a trickle of new investment in the Heights soon became a deluge. Be tween 1970 and 1980, the price per square foot of single family homes in the Heights increased 17.5 percent, equal to or better than the increases in the more fashionable Houston neighborhoods of Bellaire and West University Place. 16 Between 1990and 1994, average prices rose 25 percent in the Heights while dropping slightly in Bellaire and moving up slowly in West University. 17 458 THE FREEMAN • JULY 1995 Preservationists argue that controls are necessary to draw investors by offering them assurance that a neighbor won't do something distasteful with his property. But investment has flooded the Heights even while the area has lacked the "protection" ofpreservation mandates. Most good homes are restored, not torn down for gaudy re placements, and much of the new construc tion is architecturally compatible with the old, all without a nudge from the heavy hand of government.

The Real Enemy of Preservation In fact, when the hand of government gets involved with old buildings, it usually pushes them down or blocks their recovery. For example, in his 1966 report, "The Fed eral Bulldozer, ,,18 Martin Anderson decried federal urban-renewal schemes of the 1950s and 1960s for leveling tens of thousands of sturdy inner-city homes. No doubt, this scheme destroyed many structures that would now be cherished as "historic" build ings. Today government interference in pres ervation continues. Stringent building codes discourage the restoration of older proper ties. 19 In addition, zoning laws requiring excessive parking and setbacks while re stricting mixed uses complicate efforts to revive older areas. 20 Transportation policies favoring street and highway construction in the suburbs subsidize the flight of people and their money from inner-cities. 21 Fur thermore, when taxes in the central city are higher than those in surrounding jurisdic tions, people move from the former to the latter,22 reducing investment in older build ings at the urban core.

And don't forget obstacles created by the preservation rules themselves. As a 1991 federal report found: Regulations governing the preservation of buildings can also block rehabilitation of older structures. A project may be slowed while a determination is made as to whether an old elementary school or hotel is of historic significance. If the building is labeled as historic, then the planned rehabilitation is sometimes sub ject to lengthy and costly approval pro cesses to ensure authenticity of appear ance. In other cases, where a building is in a historic district or has been individ ually designated as historic, energy efficient enhancements such as replace ment of windows and doors or drilling of holes into side walls for the injection of insulation may be blocked on the basis of strict adherence to preservation stan dards. 23 As one developer testified in the report, a dispute between local and state landmark groups over his plans to renovate three older homes in Louisville "consumed about $20,000 more than I originally planned, in increased carrying costs and lost time, and added considerably to the price of the fin ished product. ,,24Not surprisingly, the 1991 report in the Journal of the American Plan ning Association offers the speculation that prese~vation rules shift small-scale invest ment to areas with comparable properties not covered by the rules. 25 Correlation Is Not Causation But coercive preservationists maintain that their rules encourage investment. For proof, they point to thriving conservation districts. A favorite example is the Lower Downtown (Lo-Do) area of Denver. 26 There, say the preservationists, restrictions enacted in 1988on demolitions and design in Lo-Do .transformed the 20-block area in little more than five years from a run-down warehouse district into a trendy locale for restaurants, bars, shops, small offices, and condos. Historic rules, boast the preserva tionists, are good for business.

But correlation should not be confused with causation. Investment picked up after the installation of preservation controls but not because of them. Yes, the Lower Down town Business Support Program attracted more than $15 million in new investments and 500 new jobs between 1987 and 1991.27 Yet these changes occurred, according to DON'T BELIEVE THE HYSTERICAL PRESERVATIONISTS 459 reports written in 1990 and 1992 for Den ver's planning department, as the city was speeding the regeneration of the area with $114 million in street and sewer improve ments between 1988 and 1993.28 As devel opers know, private investment dollars tend to flow in the direction of such large public outlays for infrastructure. Lo-Do's surplus of sturdy old buildings, available for low prices just as Denver crept out of a local recession,29also made the area ripe for investment, regardless of preserva tion controls. In fact, the 1990 report says that the renovation of Lo-Do buildings was 25 to 30 percent cheaper than new construc tion.30 And a new major-league baseball stadium just outside Lo-Do has strength ened the area as a location for bars and restaurants. Thus, public subsidies and mar ket opportunities, not preservation rules, accelerated Lo-Do's redevelopment.

Lo-Do isn't unique. Scratch a preserva tion district "success story" and you're likely to find public subsidies, tax breaks, or zoning bonuses, 31 with one or more of these channeling investment toward areas favored by the preservationists. Thus, preservation awards may profit some targeted businesses or apartments by giving them an unfair advantage over their local competitors out side the district. If preservation rules were beneficial in themselves, tax breaks and other public assistance would not be needed to funnel investors into historic districts. Property Values Preservationists also argue that their rules serve the public by raising the value of designated properties. How? "Properties with such designation tend to receive a higher degree of maintenance due to pride of ownership and thus maintain or increase in value better than those of comparable actual age without a designation of historical sig nificance,' ,32 explains the National Trust for Historic Preservation.

But the facts say otherwise. The study in the Summer 1991 issue of the Journal ofthe American Planning Association reviewed the impact of local historic designation on Preservation by choice, not by edict, in the Houston Heights. property values around the country in the 1970s and 1980s. In the Park Slope neigh borhood of Brooklyn, "the greatest prop erty value increases occurred prior to des ignation.,,33 Meanwhile, several "blocks in Galveston's Strand historic district . . . experienced an annual growth rate of only about 11 percent from 1974 to 1977, although city values overall rose by 28 percent per year. ,,34 In five Washington, D.C., neigh borhoods, the rate of increase in property values actually slowed after the imposition of local historic controls. 35 Despite the preservationists' beliefs, as sets do not become more valuable because the government has gained more control over them. A study in the May 1994 issue of the Journal of Real Estate Finance and Economics, explains how stringent preser vation rules in Philadelphia weakened the value of small apartment buildings by 24 percent relative to comparable apartments without the rules. 36 And according to the 1992 report written for the Denver planning 460 THE FREEMAN • JULY 1995 department, preservation controls on dem olition and design in Lower Downtown created a "cap on expectations' ,37 for finan cial returns to investors in the district by prohibiting high rises and new parking fa cilities. Only the preservationists would equate progress with scaling back the future value of property.

Censoring Our Choices The economic arguments for historic preservation rules-that they foster com munity benefits like urban renewal, local business growth, and rising property val ues-falsely presume that a political elite knows better how to manage property than do the individuals who actually own the properties. And supplanting the aesthetic choices of the property owner with the edicts of the historical commission isn't just bad economics; it's censorship. The gov ernment has no more business imposing aesthetic controls on our buildings than it does on our clothes or our cars. D 1. "Districts Make The Difference," Southern Living, November 1989, p. 164. 2. "Property owner dramatically demonstrates absurdity of 'historic' preservation rules," Land Rights Letter, April 1994, p. 1. 3. The Greater Houston Preservation Alliance, "Policy Statement Regarding Proposed Historic Preservation Ordi nance and Motions to Amend, Placed Before City Council, September 28, 1994," p. 3.

4. Constance Epton Beaumont, "A Citizen's Guide to Protecting Historic Places: Local Preservation Ordinances," The National Trust for Historic Preservation, May 1992, p. 8. 5. Greater Houston Preservation Alliance, op. cit., p. 2. 6. Francis Golding, "Keeping Britain's Past Alive," a publication of the British Foreign and Commonwealth Office, 1993, pp. 5-6. ' 7. Leslie Geddes-Brown, "Checking in to an English landmark," in House Beautiful, June 1992, p. 50. 8. Susan Mary Alsop, "Legend of Kykuit, " Architectural Digest, May 1992, pp. 136-147. 9. Norma Martin, "Yates historic home dedicated down town," The Houston Chronicle, February 21, 1995, p. 41A. 10. J. D. Reed, "On the Farm: Barn Again!" Time, February 20, 1989, pp. 88-89. 11. Ibid., p. 88. 12. Donovan D. Rypkema, "Preservation Under (Devel opment) Pressure; We Have Consumed Enough of Somebody Else's Assets," in Vital Speeches, February 15, 1990, p. 269.

13. Dennis E. Gale, "The Impacts of Historic District Designation; Planning and Policy Implications," Journal ofthe American Planning Association, Summer 1991, p. 327. 14. "Districts Make the Difference," op. cit. 15. On February 22, Houston adopted a limited ordinance, allowingthe city to designate properties as historic without the owner's permission but also providing some opportunities for the owner to alter or demolish his "historic" property as he sees fit after a 9O-day waiting period. 16. Meredith H. James, "The Effect of Zoning on Resi dential Values," privately published, 1991. 17. "Tracking Houston's Home Prices," The Houston Post, June 12, 1994, p. D-6. 18. Martin Anderson, "The Federal Bulldozer," Urban Renewal, The Record and Controversy, 1966, pp. 491-508. 19. "Not in My Back Yard; Removing Barriers to Afford able Housing," Advisory Commission on Regulatory Barriers to Affordable Housing, The Department of Housing and Urban Development, 1991, p. 3-3.

20. Richard Moe, in "All Adding Up to Noplace; How Transportation Polices Affect Communities," (Vital Speeches, May, 15, 1994, p. 468) explains how such zoning rules com plicate efforts to proceed with new development patterned after older downtown areas. 21. Bennet Roth, "Inner city could be big loser in roads improvement funding," The Houston Chronicle, January 15, 1991, p.1A. 22. "Most Cities Surveyed Have Raised Revenues," Insight, February 25, 1991. 23. "Not in My Back Yard," op. cit., 3-2 to 3-3. 24. Ibid., 3-3. 25. Dennis E. Gale, op. cit., p. 333. 26. Nora Richter Greer, "Preserving Preservation," Ar chitectural Digest, March 1991, p. 88. 27. Karen Weintraub, "Downtown Houston ripe for dra matic turnaround; Denver's success a modelfor Market Square District," The Houston Post, July, 24, 1994, p. A-26. 28. Thomas M. Roelke, "Impact of Historic District Des ignation, Lower Downtown, Denver, Colorado, Second Anal ysis, April 1, 1990-March 31,1992," Denver Officeof Planning and Community Development, p. 25.

29. WilliamHathaway, in "Rocky Mountain High, Lessons from a real estate market that climbed out of a slump" (The Hartford Courant, August 8,1993, p. J-1), says that the Denver economy ended its slump and "improved slowly between 1987 and 1989." 30. "Lower Downtown: Economic Impact of Historic District Designation," Hammer, Silber, George Associates, July 1990, p. 9. 31. See "Zoning Strengthens Character," Southern Living, November 1990, pp. 104-105. Developers following preserva tion and other guidelines in Coral Gables, Florida were "eligible for square footage beyond what normally would be allowed under standard zoning." 32. Bridget Hartman, "Public Benefits," The National Trust for Historic Preservation, p. 36. 33. Dennis E. Gale, op. cit., p. 327. 34. Ibid., p. 326. 35. Ibid., pp. 328-332. This slowingcoincided with slowing property values at this time for the entire city. 36. Paul K. Asabere, et al., "The Adverse Impacts of Local Historic Designation: The Case of Small Apartment Buildings in Philadelphia,' ,Journal ofReal Estate Finance and Econom ics, May 1994, pp. 225-234.

37. Roelke, op. cit., p. 5.