Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Historic Preservation Can Work in the Marketplace

By

Houston Strategies – Historic preservation should be a neighborhood choice

“In Houston’s Old Sixth Ward, the city’s first fully protected district, property values have shot up 27 percent in the last year. When given the chance, historic preservation works.”
This is great news! It means there should be absolutely no problem getting voluntary neighborhood buy-in for deed restrictions. If it boosts their values, who could be opposed? Why do we need the government to impose it, when it’s obviously in their own self-interest?

I argued a similar point in comments about the Carroll Gardens’ downzoning. In the case of Historic Preservation, neighbors could voluntarily form a corporation that owns facade easements on their properties. The corporation would protect the historic structures via property rights, as opposed to by mandate. Outsiders could always donate money to the corporation to buy easements on certain historic properties or make repairs. Did you know that facade easement donations by owners of historic buildings are considered tax-deductible contributions?

If a municipality really feels it needs to step in, it could purchase those easements at market price, but it would probably be unnecessary.

  • Larissa Lindsay

    In a historic district, one of the things that make the area significant is the collection of houses, block by block. To get everyone in a neighborhood to agree to being taken over by a corporation, albeit small control, is even less plausible than the 100% suppoort needed to implement deed restrictions if they have never been in place (not just lapsed). The cost to form a corporation, and keep it in place is financially prohibitive to many smaller neighborhoods. Having a municipally designated district also gives residents the right to appeal a ruling on consturction, demolition, etc. through a reliable body of citizens. Having these things in place through only a corporation is restrictive, and does not meet the broader needs of the community.

  • Larissa Lindsay

    In a historic district, one of the things that make the area significant is the collection of houses, block by block. To get everyone in a neighborhood to agree to being taken over by a corporation, albeit small control, is even less plausible than the 100% suppoort needed to implement deed restrictions if they have never been in place (not just lapsed). The cost to form a corporation, and keep it in place is financially prohibitive to many smaller neighborhoods. Having a municipally designated district also gives residents the right to appeal a ruling on consturction, demolition, etc. through a reliable body of citizens. Having these things in place through only a corporation is restrictive, and does not meet the broader needs of the community.

  • Thanks for commenting Larissa,

    Not everyone would have to join the corporation. But, if the value of having a preserved neighborhood is real, then there is a financial incentive to each owner to join such a corporation.

    How is the cost of the corporation financially prohibitive? Is it really that expensive?

    Having a municipally designated district also gives residents the right to appeal a ruling on construction, demolition, etc. through a reliable body of citizens.
    How would the corporation prevent this? And who is the reliable body of residents? People who have historic buildings, or people who want to impose their will on others?

    restrictive, and does not meet the broader needs of the community.
    Restrictive by what standard or metric? Who should decide which needs of a community are priorities? Individual participants, donors, and private property owners or over-ruling authorities who wish to impose their desires on other people?

  • Thanks for commenting Larissa,

    Not everyone would have to join the corporation. But, if the value of having a preserved neighborhood is real, then there is a financial incentive to each owner to join such a corporation.

    How is the cost of the corporation financially prohibitive? Is it really that expensive?

    Having a municipally designated district also gives residents the right to appeal a ruling on construction, demolition, etc. through a reliable body of citizens.
    How would the corporation prevent this? And who is the reliable body of residents? People who have historic buildings, or people who want to impose their will on others?

    restrictive, and does not meet the broader needs of the community.
    Restrictive by what standard or metric? Who should decide which needs of a community are priorities? Individual participants, donors, and private property owners or over-ruling authorities who wish to impose their desires on other people?

  • DBM

    I’ll play devils advocate here:

    In Houston’s Old Sixth Ward, the city’s first fully protected district, property values have shot up 27 percent in the last year. When given the chance, historic preservation works.

    Was the increase in property values clearly attributed to the designation as a historical district? Or is it possible that this is the result of a mistaken “correlation = causation” type of argument?

    Personally, I tend to favor preservation but when I see numbers without supporting cited data or comparison I tend to ask questions about what the cause of such a great increase in property values is compared to similar non-historic neighborhoods.

    As for the forming of corporations in order to communally control facades, easements, etc, I think with a small amount of organization and capital it is a smart solution for neighborhoods that may not be protected as historical districts. It’s not much different than living in a subdivision community and agreeing to keep your home and property up to a certain standard (not that I am a fan of gated communities), and the tax incentive is a nice benefit for the property owners as well.

  • DBM

    I’ll play devils advocate here:

    In Houston’s Old Sixth Ward, the city’s first fully protected district, property values have shot up 27 percent in the last year. When given the chance, historic preservation works.

    Was the increase in property values clearly attributed to the designation as a historical district? Or is it possible that this is the result of a mistaken “correlation = causation” type of argument?

    Personally, I tend to favor preservation but when I see numbers without supporting cited data or comparison I tend to ask questions about what the cause of such a great increase in property values is compared to similar non-historic neighborhoods.

    As for the forming of corporations in order to communally control facades, easements, etc, I think with a small amount of organization and capital it is a smart solution for neighborhoods that may not be protected as historical districts. It’s not much different than living in a subdivision community and agreeing to keep your home and property up to a certain standard (not that I am a fan of gated communities), and the tax incentive is a nice benefit for the property owners as well.

  • It’s impossible to attribute the increase absolutely. But, here are some possibilities:

    It could be the tax incentives for historic properties encouraged homeowners to repair and maintain their homes. So, it wasn’t the protection, but actual improvements that cost money.

    It could be that it is a desirable area with little infil sites available. Thus, the restrictions prevented new supply being developed that would compete.

    It could be the tax deductions, credits, and other incentives instantaneously create value for the property owner.

    It could be something completely different.

  • It’s impossible to attribute the increase absolutely. But, here are some possibilities:

    It could be the tax incentives for historic properties encouraged homeowners to repair and maintain their homes. So, it wasn’t the protection, but actual improvements that cost money.

    It could be that it is a desirable area with little infil sites available. Thus, the restrictions prevented new supply being developed that would compete.

    It could be the tax deductions, credits, and other incentives instantaneously create value for the property owner.

    It could be something completely different.

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