The Economic Benefits of Historic District Designation
Does Historic District Designation help, or hurt, property values?
That is the clear experience from Historic Districts across the country. Two studies worth reading:
This report examined historic districts in Arizona and nationally, and concluded:
The findings of recent comparative studies of the effects of historic district designations over time, conducted in many different regions of the U.S., converge on a few key findings:
Historic district designation typically increases residential property values by 5-35% per decade over the values in similar, undesignated neighborhoods.
Both nationally designated historic districts and locally designated historic districts outperform similar, undesignated neighborhoods, but districts that carry both local and national designation experience the highest relative increases in property values.
The values of newer properties within designated historic districts increase along with those of older properties.
Local historic district designation decreases investor uncertainty and insulates property values from wild swings in the housing market.
Increasing property taxes due to rising property values in historic districts designated at the national or state levels can be offset by state and federal tax reduction programs.
The tax incentives also provide alternatives to demolition of historic homes, thereby providing stability to the built environments of neighborhoods.
Historic district designation leads to increased levels of home ownership and longer residence by both homeowners and renters.
Designated historic districts tend to have higher rates of participation in neighborhood associations and improvement projects, which protects shared spaces from decline.
Proposed exterior renovations, demolitions, and new construction in locally designated historic districts are reviewed by neighborhood advisory groups and historical commissions, thereby ensuring community involvement in neighborhood planning."
This was a detailed examination of several historic districts in one state, South Carolina, which found:
"Recent studies in South Carolina found that local historic district status increases house values. The market recognizes the extra protection offered by local district status and rewards owners with a higher rate of return on their investments."
In Portland, in particular, it helps.
Irvington became a Historic District in October 2010.
Opponents claimed that historic listing would hurt the value of homes in Irvington, because buyers supposedly don't want to buy in a Historic District.
The truth is that Irvington house values have risen approximately +52% since Historic District listing and Irvington remains a higher-valued neighborhood than Laurelhurst. (Chart below from Zillow.com.)
House values have risen in Laurelhurst as well, of course. Our historic houses on quiet tree-lined streets are very attractive to home buyers. Will Laurelhurst house values stay as strong if developer duplexes like the one below start appearing where your neighbors' beautiful old homes and mature trees now stand? Irvington homeowners won't have to wonder.