Just the Facts: The Economic Benefits of Historic Preservation

By Derek King:

“Facts do not cease to exist because they are ignored.” -Aldous Huxley

You would think that Buffalo
understands what is possible with preservation. You would think that with the
successes of Shea’s Theatre, Hotel Lafayette, and Larkin Square, people would
finally recognize that preservation is not the antithesis of progress. You
would think that with so much wonderful architecture, Western New York would
have some pride for the buildings that define this city.

You would think that, right?


A recent article on Buffalo Rising highlighted many of the region’s attitudes toward preservation,
aired through comments on a WBEN Facebook Status that asked, “Do we try to
save too much in this town?” 

The response was overwhelmingly
negative, and David Steele’s juxtaposition of the commenters’ callousness
against photos depicting the city’s historic architecture is powerful and
infuriating.


It is infuriating not because of an
“us/them” dynamic, but for the simple lack of informed opinions,
replaced with vitriolic condemnation of preservationists as “stuck in the
past,” or “stopping progress.” It is infuriating because it is
not just an uninformed public, but elected officials like Lackawanna Mayor
Geoff Szymanski, who allow local treasures to be destroyed and
repeat the same misinformed ideas about
preservation
.

Rather than point any fingers
however, preservationists should stop relying on emotional and ideological
appeal to drive their argument. The historic nature and the aesthetic beauty of
these buildings is clearly not enough to convince the people of Buffalo that
its architecture is worth saving.

So, let’s lay out the facts:
preservation IS progress.

Don’t believe me? Here are some
points you may consider:


1) Historic Preservation
Creates Jobs:

How many jobs does a demolition
create? Would it create more work than a project that requires plumbers,
electricians, carpenters, contractors, window specialists, roofers, and
painters? Studies from around the country have proven that preservation related
work creates more jobs than nearly any other industry in the country, including
some of our nation’s staples. In Michigan, $1 million in building
rehabilitation creates 12 more jobs than $1 million in car manufacturing. In
West Virginia, that $1 million creates 20 more jobs than coal mining, and in
Oklahoma, $1 million worth of building rehabilitation is 29 more jobs than
pumping oil.

This is because labor accounts for
70% of the cost of historic rehabilitation. Unlike manufacturing, which can
move its production to wherever a cheaper workforce is, historic preservation
is limited to the labor near the buildings being rehabbed, meaning that a large
portion of money spent on these projects stays within the community.
Between 2009-2010, 145,000 jobs were created merely through rehabilitation
projects that utilized tax credits, not even counting projects that did not
pursue any federal assistance. Those same tax-credit deals have generated over
$6.2 billion in income as well.


This invariably leads to one of the
next most vocal complaints, that historic preservation is a “tax-payer
money trap,” but, if we actually look at the numbers…

 

2) Historic rehabilitation tax
credit programs actually increase tax revenue.

The same 2011 Rutger’s study found that between 2009 and 2010, Federal and State tax credit
programs allocated $1.5 billion in tax credits, and received $1.6 billion in
tax revenue.  Between 1978 and 2011, the federal government’s allocation
of $23.4 billion in tax credits has resulted in $90.4 billion dollars in
economic activity, creating over 2 million jobs the last three decades.

In 2011 alone, the historic tax credit program created 64,000 jobs, 23,000 of
which were in construction and 15,000 of which were in manufacturing. The
program lead to $1.2 billion of investment overall to construction, and $1
billion to manufacturing, accounting for $3.7 billion overall to the GDP, and
$2.7 billion in income.

But, since this is a federal program,
it must be bloated and inefficient, no? Well…

 

3) Historic preservation is one
of the most effective economic development tools there is

Dollar for dollar, no program is more
efficient than historic preservation. Since 1981, 1,600 communities have
revitalized their downtowns using “Main Street” principles of
preserving historic nature of the neighborhood, investing $16.1 billion. The
89,000 building renovations led to 56,000 new businesses, and 227,000 new jobs,
largely because every dollar of public investment lead to $40 of leverage for
private funds (Federal and local funding help investors secure more loans from
banks, who have more confidence in the financial tenability of the project). As
a result, the amount of public investment per job created is only $2,500,
compared to the $50,000-$100,000 for other publicly funded programs.

This efficiency goes right back to
point #2: if the government subsidizes these programs, how can they be making
profit? As a former Philadelphia Mayor Edward Randell noted however, “$1
million rehabilitation expenditure would cost the Treasury $200,000 in lost tax
revenue, it would at the same time generate an estimated $779,478 in wages.
Taxed at 28%, the investment would produce $218,254 in federal tax
revenue.” Not only does it create jobs, but it actually increased total
tax-revenue.

As many anti-preservationists say,
“preservationists should put their money where there mouths are,” but
I’ll take that one step further: municipalities should put more
money into historic preservation funding, because…


 

4) Historic preservation is sound public policy

This is not just because of the
aforementioned job-creation from downtown-revitalization projects, but because
the current model of sprawling suburban neighborhoods, moving further away from
the central core, and continuing to neglect our already-built housing stock, is
unsustainable.

For many, “sustainable” has
become a dirty word, associated with hybrid-driving hippies and hipsters, but
it is not just environmental sustainability we should be concerned with, but
economic sustainability. Did you know that new-construction actually
contributes 31.5 million tons of construction waste annually? Often containing
hazardous materials, this represents almost 24% of the country’s total
municipal solid waste, and contributes to the shortage of available landfill.
Disposal costs for construction and demolition in the Northeast now ranges
between $60 and $140 per ton, and is even being shipped across the country to
find available space.

Since 1950, the urbanized area around
Buffalo and Niagara Falls has
grown three-fold, but the population
has remained the same
. This is
unsustainable growth, and the patterns around the country already show how this
kind of development is harmful to public expenditure. Sprawl requires
infrastructure, including roads, sewer and water, firehouses, and schools, and
the Urban Land Institute estimates that the cost of suburban development is 40
to 400 times greater than compact urban development. The cost of roads around
Baltimore will be in excess of $3.6 billion by 2020, and Minneapolis-St. Paul
is expected to spend $3.1 billion on water and services by 2020.

There are many arguments for
continuing the sprawl outwards, including that these houses will last longer
than historic structures, but…

 


5) When it comes to life expectancy, energy efficiency, and cost effectiveness, sometimes OLD is better than NEW

The life expectancy of a new building
is between 30 and 40 years. The hardiness of 100 year old buildings means,
properly maintained, they will last at least that long, if not longer. Part of
this is the stronger building materials, but it is also connected to better
building practices, including load-bearing walls on the exterior rather than
the interior of the building that carried a majority of the weight. Historic
buildings often have thicker walls, not only making them more expensive to demolish,
but actually giving them excellent thermal insulation.

Demolishing a historic building
doesn’t make much sense, even it is being replaced with an environmentally
friendly and energy efficient new build. The cost to demolish one 2-story
masonry building in a Washington neighborhood is equal to the entire
environmental benefit of 1,344,000 recycled aluminum cans, not to mention the
landfill issue noted above that comes with it. Without demolition,
a rehab project for a commercial building will cost between 12 percent less
to 9 percent more than a comparably sized-new build, but for a
new-build with demolition, rehabs would cost between 3 and
16 percent less. Even when demolition costs are factored, they are often
underestimated: the fact that a building is old does not mean that it will come
down easily. These buildings were designed to last.

This post is merely an introduction
to help clarify some of the glaring misinformation regarding historic
preservation. These five points summarize a handful of ideas from Dovovan
D. Rypkema’s book “The Economics of Historic Preservation. The book
details 100 points in total, and I have excerpted quite liberally from points
#1-14, 22, 39, and 81-84. Dozens of other sources repeat the same things,
however, including 
Rutgers Third Annual “Economic
Impact of the Federal Historic Tax Credit” report published in 2012
. This post doesn’t even address the benefits for tourism, the
misinformation regarding historic districts, or community participation, all of
which make historic preservation even more important to consider.

The facts are out there, but more
pertinent should be the examples around us. The rehabilitation of Hotel
Lafayette has triggered a series of investments downtown, including this
planned mixed-use adaptation of the Rand-Tishman
building.
 The money pumped into the
enormous Larkin Complex has lead to a thriving concert and event venue (Larkin
Square will be hosting a
St. Patrick’s Day event this Friday, March 15th) as well as precipitated the
development of other buildings nearby,
like 500 Seneca. The iconic Grain Elevators were the site of the
inspirational and exciting
City of Night last September, and have
dozens of examples
around the world of how they could be utilized.

The facts are there, but perhaps that
doesn’t matter. Perhaps the same people who cheer when an iconic building gets
destroyed simply don’t care what the facts say, preferring to be blissfully
ignorant than accept that anything “old” could be a part of progress.

That choice is fine for someone
commenting on a Facebook status, but not for elected officials who control the
future of their cities and towns. Buffalo, Lackawanna, and Western New York
deserve better leadership, because while it may be okay for internet
commentators to continue living in ignorance, blissful as it may be, it is
unfair to damage this region’s future when you don’t know the facts.


Derek King is an architectural historian at Preservation Studios

 

 

 

 

 

 

 

 

 

About the author  ⁄ buffalorising

31 comments
Spock
Spock

Whatever> "spocKettle - instead of discussing the topic, that looks mostly like personalized ad hominem insults and changing the subject to one of your shoot-the-messenger style attacks."

What "attack" or "name calling" are you talking about? There is nothing in my comment above that can be spun as such.

Just because I am making some on-topic critical observations about your argument, similar to critical observations you frequently make towards others' comments or posts, does not mean I am attacking anyone. There is a big difference between challenging someone's ideas and "personalized ad hominem insults."

whatever
whatever

spocKettle - instead of discussing the topic, that looks mostly like personalized ad hominem insults and changing the subject to one of your shoot-the-messenger style attacks.

A post titled "Just the Facts" claimed "proof" from studies which it then didn't name, reference, or link so everyone could see what they say and discuss substance based on them. If it was rude for me to point that out, so be it.

An author who claims facts/proof shouldn't be surprised if feedback mentions the underdelivering of those.

Then what js thinks the author meant about something didn't at all match what the post said.

Nothing of that is changed by your name calling or allegations about me.

Spock
Spock

Whatever> "Quite a claim, and notice none of those claimed studies were linked for us to consider their... objectivity..."

Oh, the hilarious irony of BRO's leading phony objectivity user wanting to screen someone's post of a conflicting view for the same thing. Just pretend the author is arguing against preservation and I'll bet your desire to objectivity-check the article will go away.

I too would be curious to see these studies, though even without them, the author's claim makes sense given the labor intensive nature of adaptive reuse projects. I believe BRO published an article not too long ago that mentioned how restoring existing windows involved a lot more manpower than ordering prefabricated materials (Lafayette Hotel I believe).

You're comparison of this to state spending on education, healthcare, and public safety is a red herring since these are public services and HP tax credits are an incentive for projects done with mostly private funds. Apples vs oranges.

It's also an obvious false choice needlessly pitting the public sector's role in preservation vs higher priority areas of spending. (That restored building is going to set criminals free, close schools, and pull the plug on my sick granny? Oh nooooooo!). You could have at least compared this to funding to sprawl subsidies but that may have been too... objective.

whatever
whatever

js - nope, your 'many' is moving the goal post a lot.

Mr. King's 1st item claimed the following

"Studies from around the country have proven that preservation related work creates more jobs than nearly any other industry in the country, including some of our nation's staples."

Quite a claim, and notice none of those claimed studies were linked for us to consider their existence, objectivity, methodologies, or whether they really said what he said they said.

JSmith
JSmith

I think point #1 of this article is that $1 spent on building rehabilitation creates more jobs and local economic spin-off than $1 spent on many other things, in particular on demolition.

whatever
whatever

js - regarding claims of job creation &/or other economic benefits, what you wrote still overlooks the point that the $ (whether private $, taxpayer $, or any combination) could instead be spent instead non-historic things which also would've created a similar amount of jobs &/or other econ benefits.

For examples - if the NYS govt budget is amended next week to transfer some school spending (or state police spending, or prison spending, health spending, etc) to historic rehab spending, then yes more glazers/etc would be paid with that $ but fewer eduction workers (or state cops, guards, nurses, etc) would.

whatever
whatever

grad, no the $25 option is severely restricted (disallows normal daily use) - so it isn't at all a discount or govt subsidy compared to the normal fee of $26.75 amount on my reg for typical car from the mid 2000s.

If anything, the classic car owners are subsidizing the state with that $25. Here's why -

From the NYS DMV website FAQ

"Is a historical registration different from a standard registration?

Yes. You cannot use a historical vehicle for daily transportation. An automobile collector normally registers a historical vehicle or a vintage vehicle to use it for exhibits, club activities, tours, and parades."

So these people are charged $25 to drive on NYS roads maybe a few hundred or a thousand miles per year, while everyone else's car is charged $26.75 to drive unlimited miles (average in U.S. is 15,000 miles/year per car).

If owner of a classic car wants a car for daily normal use like most people do, they have to either pay the same $26.75 as everyone else (either for that car, or pay an additional $26.75 for a different car).

The $25 sounds way too high, not lower at all, compared to what everyone else is charged for use of NYS roads on top of gas taxes and other taxes.

On the building vs car comparison in general - another difference is car owners are never at risk for the Common Council declaring their car a landmark which can't be legally taken to a junkyard or sold for parts. Just sayin.

JSmith
JSmith

Well, sure, it would have been better had the windows never been broken (i.e., if Western New Yorkers had not abandoned the inner city and left the buildings to decay). Clearly there is a massive opportunity cost involved in sprawl and urban decay. But since the windows *have* been broken, we may as well fix them and put some glaziers to work.

grad94
grad94

i'm thinking of another approach to this audience. they probably appreciate classic cars & classic car restorations. i can't think of anyone who doesn't.

so: from rusty front lawn heap to cruise night showpiece = neighborhood eyesore into architectural showpiece.

the obvious comeback is that someone fixing up an old car doesn't get public subsidies. and it is wrong. according to the nysdmv, your antique car (25+ years) can be registered for only $25. for any other vehicle it starts at $26 and goes way up from there.

old cars, old buildings: more in common than you thought.

WithheldName
WithheldName

Bingo. Derek King nails it. Historic Preservation MAKES money in the long run. People like pretty historic buildings. Especially when they form a COHESIVE WHOLE. The sum is greater than the parts.

longgone
longgone

My reply is below. Not sure why it didn't thread.

longgone
longgone

You can try and defend the position. Which is your right. I am just telling you why people do not listen.

Now you can say you're going to force the position, which is your right, but that does not work all of the time. see. Bethlehem Steel. Sometimes you need public support and sadly the preservation community doesn't have as much as they should.

In the proud Buffalo tradition you look outward for who to point the finger at. I am just trying to help you look in the mirror before you go out to battle.

grad94
grad94

not to be pedantic about it, but if someone goes into battle, so to speak, it means that they have done exactly what they were lectured to do: they picked a battle. it seems like no one except preservationists are expected to allow their opponents to set their agenda.

for example, i'm sure that natural gas interests are happy to lecture anti-fracking interests to "pick their battles."

in a city where the bulldozers seem to operate 24/7, we send buildings every day to the landfill with no battle whatsoever.

whatever
whatever

Oui, Reg, les coûts d'opportunité.

'...the money spent to recover from destruction, is actually not a net-benefit to society. The parable, also known as the broken window fallacy or glazier's fallacy, demonstrates how opportunity costs, as well as the law of unintended consequences, affect economic activity in ways that are "unseen" or ignored. ...'

Some of Mr King's facts - many of which look like opinions - somehow overlooked those factors.

whatever
whatever

Good summary, 2020.

To it, I'd add in some cases there's not only disagreement about the importance, but that there's importance on the opposite side than what someone is advocating on the 'preservation' side.

In cases like the Bethlehem building or North Buff church, I think it's as you described - many dissenters disagree about the importance of stopping a demolition or about consequences of public spending priorities if the buildings aren't demoed then receive public $.

But in some other cases like the Peace Bridge houses, or Pano's, or the falling apart grain elevator near the Valley neighborhood - the opposition can be deeper in seeing importance on the other side (in those cases - favoring long term cross border trucking and improving its efficiency, restaurant expansion freedom, safety & business success).

(My intent isn't to rehash arguments about those examples, just to answer what grad wondered about. I also don't know how the word 'injury' was used and by whom, so I've no idea about that part unless it might relate to what I added beyond 2020's points.)

Old First Ward
Old First Ward

Many of us here fully understand, support, and believe in historic preservation.

The general public buys into the final result or the finished product. That is when they become convinced. The WOW effect.

No_Illusions
No_Illusions

You keep saying that, and yet have yet to tell us how we can realistically do this.

Do we give out incentives to motivate companies to choose a classical design over a modern building? Are we just talking about a facade with a modern and energy efficient interior? Where is this money coming from?

I'm all for what you say, but how do you make developers follow suit? Without a plan it seems impossible.

Buff2020
Buff2020

I don't feel injured but people who do see "preservationists" calling upon or attempting to mandate others including them as taxpayers or property owners to invest in objects in which the see neither beauty nor utility. They sense the disdain directed at them by the preservationist for failing to see the beauty and utility that is self apparent to the preservationist. People lash out at attempt to force them invest in that in which they find neither beautiful nor useful.

Mike Puma's post spoke to the beauty. I see/feel it. Many don't see it or relatively speaking find it in places other than architecture. This post speaks to the utility of preservation in general economic terms without speaking to the utility of this particular building. For the preservationist, keeping the beauty by keeping the building from being demolished is an end in itself justifying lawsuits forcing private and/or public investment.

Those not focused on the beauty but rather utility ask: What's the use of the building? How come no one is using it? How much will a user pay in rent/occupancy cost to occupy it? Who is the user? How much will it cost to place it in service? The private owner acting in a rational market will not invest unless there is a return based upon what someone will pay in rent. What's the "gap"? Does the beauty of the building or other benefits justify taxpayer investment? Can that money be better invested elsewhere? To the extent that those questions have not been clearly addressed and quantified, the person focused on utility is frustrated by the energy expended and vitriol when there are seemingly larger issues to which we as a community could be directing our time, energy and effort. They are happy when the building comes down because for them it is neither beautiful or useful and they feel the community can move on to whatever they identify as more important issues. They lash our because they feel that someone is attempting to force them to invest time, attention or money in something where they find no value.

paulsobo
paulsobo

all reasons why reconstructing demolished buildings to restore a streetscape or building world class period buildings is important

history sells

culture sells

john.straubinger@gmail.com
john.straubinger@gmail.com

Excellent presentation of the economic benefits of preservation. Progress in Buffalo is not just a landscape filled with mediocre and unimaginative buildings like the Waterfront Village Office Building, Channel 17's HQ's, HealthNow's HQ's,the space capsule at 77 Broadway, Aquest's space capsule at Delaware and West Mohawk or the office building next to Channel 2 on Delaware. Is their overwhelming redeeming value that they're new or in Buffalo instead of Amherst? Does anyone really believe that the architects who designed Buffalo's buildings 100 years ago are the same kind of architects who design Buffalo's new buildings today? Does anyone really believe that an attempt for an adaptive reuse for Trico is disrupting this year's and next year's construction schedule at the Buffalo Niagara Medical Campus? Especially when there are a multitude of parking lots ready for the Innovation Center's expansion. There is plenty of room for adaptive reuse in Buffalo's built environment. I sometimes wonder if the dislike for older buildings in Buffalo is part of a dislike for Buffalo's past because some blame Buffalo's past for what they don't like about Buffalo's present.

grad94
grad94

well, exactly. i'd like to know what caused this feeling of injury, in their own words, not ours.

longgone
longgone

I 100% with with the FACTS that:

Historic rehabilitation tax credit programs actually increase tax revenue.

Historic preservation is one of the most effective economic development tools there is.

I think the challenge for the preservation community is mostly related to Public Relations and Public Perception.

I'll give you an example. There is no doubt that Tim Tielman cares about Buffalo. There is no doubt that he is trying to make it a better place. That said, to the average citizen who does not follow the ins and outs of this issue, Tim Tielman can do more harm than good.

Take for example the plans he floated for a revised HARBORcenter. These plans were downright silly. Open air hockey rinks scattered around the arena with no understanding or consideration to what a hockey facility needs. Even further, the 'designs' of the hotel were downright comical.

So when Tielman floats these silly ideas out there, he is doing it off the preservation podium. After all, his preservation work is the only reason why people paid attention. Since those plans were silly to almost everyone, they paint the entire preservation community as folks who think like that.

The HARBORcenter project is being built on a parking lot. There is nothing to preserve. The 'Cobblestone District' is also just a series of parking lots for the most part. If someone wants to work off the 'visionary' podium..so be it. But when the local 'preservation' figurehead does it...it's just bad business.

Lesson: Use your voice wisely.

Going a bit further on this, I think at times the preservation community suffers from the 'boy who cried wolf' syndrome. A good example of this are the gain elevators. To almost everyone, these are viewed as eyesores. While there is history behind them, the actual structures are not 'historic' to most. To most people I have spoken with, historic structures are those that can not be built again. A good example of this is the Bethlehem Steel Administration building. No matter how much money returns to the region, a building of this beauty is NEVER.EVER.EVER going to be built again. That's sad. On the other hand, if the grain industry were to ever return, the concrete silos could be built again in a very short time.

When the preservation community fights to save everything, people group every project together.

Lesson: Choose your battles.

Lastly, stop trying to rename everything. A building does not make a historic district. The 'Michigan Street African American Heritage Corridor' is a perfect example of this. It's patronizing and somewhat pompous.

Preservation done right makes perfect economic sense. Stick to the facts and stay away from the fluff...

Travelrrr
Travelrrr

"Resentment" about what, exactly? That these buildings were built by titans of industry? That it represents Old Glory days?

And, on whom are they taking "revenge"? Comerford certainly seems to take out his frustration with Tielman in the form of Friday Afternoon Specials, but how else are we seeing this play out?

grad94
grad94

well done, derek.

maybe we take the rants at a certain facebook page too seriously, but they point to a certain reality: that many people reject preservation out of feelings of resentment and revenge. what i am hoping to understand is what injury caused these people to feel that demolition settles the score?

RaChaCha
RaChaCha

Five stars, Mr. King -- five stars.

Mike Puma
Mike Puma

I think this post is reasonable in trying to explain the top five common criticisms of historic preservation. The reference to the recent BRO post is only the author's note for why he was inspired to use factual, cited evidence to the benefits of preservation. Often times we just say preservation is good and you should believe us. This post goes above and beyond that and explains why preservation makes sense for the economy, sustainability, interesting and varied urban landscapes, etc.

Quixote
Quixote

Mike:

Don't you think you asre reacting a bit too much to the fringe commentariat on BR posts?

When an issue even remotely involving "preservation" is ventilated it is pounced upon both those who see any thought of preservation as destruction and those who who see any replacement as cardinal sin. Do they speak for the majority?

What ends up getting lost in this pillow fight is reasonable and rational debate and discussion. Worse yet it does nothing to address or encourage preservation opportunities before they become preservation issues.

Buff2020
Buff2020

If we could only get around the facts imposed by the second law of thermodynamics.

Mike Puma
Mike Puma

Fixed it. I had to mess with the first few paragraphs in HTML, must have accidentally deleted a letter in the process. Thanks!

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