Historic preservation is one of the few forms of economic activity that appeals to people of virtually every political and social persuasion. For some, historic preservation reflects a commitment to safeguarding open space, architecture, urban quality of life and cultural legacies. To investors, it represents an opportunity to generate high rates of return on capital. To contractors employing specialized craft professionals, it can mean additional work and profits.
Of course, some setbacks exist. While every project is different, estimates show that preserving and adapting an old property can cost 10 percent to 20 percent more per square foot than simply constructing a new one. At the same time, there is no guarantee that the additional expense will translate into higher sales prices given the nature of urban demographics and the fact that dilapidated city structures often are located in blighted areas.
Additionally, many building owners and occupants favor the modern amenities (e.g., technology) that new construction can more easily incorporate. And in an era focused heavily on productivity and minimization of spatial utilization per employee or unit of output, many end users prefer contemporary layouts.
Preservation continues to be propelled forward, however, due to its close ties to the green movement. More consumers are fighting for landmark buildings to be protected and for fewer materials to be discarded in landfills. In 2006, the Oregon National Guard Armory became the first building on the
National Register of Historic Places to be awarded LEED Platinum certification. The restorers maintained the historic appeal of the structure while using modern construction techniques to improve the lighting, air quality and energy efficiency.
Given the influence of the sustainability movement, it is likely that historic preservation will represent a growing source of construction spending going forward.
Tax credits and other incentives available from various levels of government are boosting preservation work as well. For instance, in 2001 the Delaware legislature passed a bill creating tax credits for the rehabilitation of the state’s historic properties. During the course of its first eight years, the
Delaware Historic Preservation Tax Credit Program led to a four-fold increase in annual rehabilitation activity—creating jobs, increasing the local tax base, and encouraging reinvestment in areas already served by infrastructure and public services.
Nearly 30 percent of all the projects utilizing the tax credits cost less than $100,000, and slightly more than a quarter exceeded $2 million in size. Many of the projects in Delaware have occurred in Wilmington, the state’s largest city, but studies also show that the tax credit prompted historic buildings to be brought back to life in every corner of the state.
Similarly, the
Massachusetts Historic Rehabilitation Tax Credit offers a 20 percent credit toward the expense of certified rehabilitation of income-producing properties. The tax credit has been utilized in support of a number of state commercial restoration projects, ranging from a theater in Worcester to hotels in Boston.
Preserving rural heritage is another state priority, with Kentucky displaying strong leadership in retaining historic farmland and structures. State programs encompass more than $17 million in easement purchases on agricultural land, and offer increased funding for the promotion of tourism in rural communities.
Historic preservation represents precisely the type of economic activity the industry needs. It helps the nation conserve energy, shortens commutes, preserves the tax base of historic cities, and creates high-wage and specialized jobs in largely urban contexts.
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| State | Jobs Created |
| Michigan | 25 |
| Colorado | 23 |
| Oklahoma | 20.2 |
| Delaware | 14.6 |
| Rhode Island, Virginia | 11.3 |
| Source: National Trust for Historic Preservation |