“Homes in both local and national historic districts appreciated in value at a higher rate than houses outside historic districts.”
Donovan Rypkema
“Homes in both local and national historic districts appreciated in value at a higher rate than houses outside historic districts.” Donovan Rypkema
The economic impacts of restoration in historic districts has been shown over and over again in the U.S. and abroad, consultant Donovan Rypkema said Saturday.

The impacts are seen in jobs and household income, property values, heritage tourism and Main Street Programs, he told an audience of about 60.

Examples he gave from his own work or studies by others included:

• In Delaware, for each $1 million of "output" - work or products produced - rehabilitation employed 14.6 people while new construction accounted for 11.2 jobs and manufacturing 9.2 jobs.

Also for each $1 million of product, rehabilitation provided $539,000 in household income, while new construction accounted for $477,668 and manufacturing $343,728.

• In Georgia, the findings were similar, with rehabilitation of historic buildings providing 18.1 jobs and $750 in household income for each $1 million of product. The lowest on his PowerPoint list was auto manufacturing, with 3.5 jobs and $245,000 in household income.

Despite the major airport in Atlanta, air transportation in George provided 8.7 jobs and $476,000 in household income for each $1 million of product.

"Now tell me, which is the economic development strategy?" Rypkema said.

• In Connecticut, every $100 spent rehabilitating a historic building put $80 in workers' pockets, he said. Connecticut has a tax credit for people who rehabilitate historic buildings, he said.

A type of economic analysis the federal government does, Regional Input-Output Modeling System, measures the economic impact industries and businesses have on each other and on regional and national economies. The system has 526 categories.

"Almost none have a much power as fixing up old historic buildings," Rypkema said.

The economic impact on property values also has been widely studied. Years ago, Rypkema said, old buildings were preserved just for the sake of preserving them. Now, however, preservation is part of a bigger picture of the local, regional and national economies.

"Homes in both local and national historic districts appreciated in value at a higher rate than houses outside historic districts," Rypkema said of studies of real estate values.

Being in a historic district doesn't provide protection from demolition, he said, but it does raise and maintain values.

Examples he gave included:

• In Philadelphia, homes gained 2 percent in value immediately after they were included in a historic district, then had values 1 percent higher than the city as a whole for the subsequent years.

People are willing to pay more for houses in a historic district. This is called a premium that buyers will pay.

Houses in a national historic district have a 14.3 percent premium, but in local historic districts where regulations are in place, the premium is 22.5 percent, he said.

• In Cleveland, Ohio, there was a ripple effect, with houses near historic districts rising in value.

• A study in Louisville sorted out all the variables of why people will pay more for a house until the only variable left was location inside or outside a historic district, Rypkema said. Buyers in Louisville were willing to pay $59,000 to $67,000 more for a house in a historic district, and their homes appreciated 21 percent more than the Louisville market as a whole, he said.

• The tax money generated for county, city and school taxing units in North Little Rock, Ark., was demonstrated in a study. Parcels in a historic district had a $31,000 premium, which Rypkema said altogether brought in $40,000 more revenue for the county, $50,000 more for the city and $200,000 for the schools.

A study for the Indiana Landmarks Foundation concluded that local historic districts have the greatest positive impact on property values when four factors are present, Rypkema said.

Those factors are:

• Staffing for preservation issues in local government. Madison is about to hire such a person for a two-year position to work with the Historic Board, property owners and contractors.

• Written, illustrated guidelines that Rypkema said are "understandable by human beings and not just architects." Madison got such guidelines last year with the help of the Landmarks Foundation and its local affiliate, the Cornerstone Society.

• "The decisions are firm and consistent."

• There is "ongoing educational outreach" for homeowners, real estate professionals, bankers and contractors. Rypkema said outreach must always be going on, "not one time, one seminar."

Rypkema said studies also have shown that the investment of public money in historic preservation pays, with $26.67 reaped for each dollar spent.

He said the Main Street Programs are important for local economic development. Madison was one of the first three cities in the U.S. to have a Main Street Program. About one-third of Rypkema's business is international, he said, and around the world people want to know about Main Street Programs.

In communities with Main Street programs, he said, there is net business growth, with a higher ratio of business openings to business closings.

Also, he said, during the previous recession, the largest companies - those with 500 or more employees - lost workers while small businesses added jobs.

"If small businesses had laid off workers at the same rate as Big Business, there would be $3.5 million more unemployed today," Rypkema said. "The heroes of this recession are small businesses."

Rypkema said historic preservation also helps draw heritage tourism. Examples he gave included:

• 16 percent of tourists in Arkansas are there for heritage tours, spend 30 percent more than other visitors and are more likely to be from out of state.

• In Florida, 46.7 million visitors from within the U.S. reported visiting historic sites. That was more than went to amusement parks, beaches, casinos and golf curses, he said.

Rypkema said tax credits for historic preservation have made a difference where they were in place. He cited a study in which 93 percent of the respondents said that knowing they would get a tax credit was essential to their decision to do preservation, and 65.5 percent said they would not have done preservation if there was not a tax credit.

Tax credits, Rypkema said, "are game-changers."

Missouri has the best tax credit in the U.S., he said. There is a federal tax credit that he said "has more than paid for itself."

The cost of the federal stimulus program, he said, was $445,183 for every job created, but when public funds are used to create historic preservation jobs, the cost is $2,394.

"You can't say you're for saving taxpayer dollars and not be for historic preservation," he said.

Before his public speech, Rypkema met privately with all seven members of the City Council and Mayor Tim Armstrong.