Things to consider when looking at empirical studies

Historic Property Values and Property Tax Payments
This paper is Chapter 8 of a larger study. http://www.njht.org/dca/njht/publ/chap8.pdf

In the paper it discusses the contextual consideration for historic designation and it’s possible effects on property value. One of the economic considerations not generally carved out is “current use” versus “highest and best use”. “Current use is the existing utilization of a property; highest and best use is the most profitable use incorporating those uses that are legally permissible, physically possible, and financially or economically feasible (Kinnard 1971,39)” So when considering study results you must consider is the study comparing properties that are being used for their highest use. This would be the case in most single family neighborhoods because the highest and best use is R-60 or R-85 or other residential designation where there is no higher underlying zoning use such as commercial or high density residential that you may see with town homes or in very urban environments.

Another factor to consider is whether the area under protection is sufficiently large enough to “achieve the spatial critical mass necessary to encourage rehabilitation by the property owner, financial institution investment, community organization activity, and other spin-offs, which ultimately may translate into enhanced property values.” You can see this in action in Chicago where there is a large, highly-regulated local historic district, surrounded by less stringent districts and then further surrounded by voluntary programs that work because of the critical mass.

Property type is another consideration. Residential property owners are more likely to pay a premium for assurance that desirable neighborhood features will be retained and property values protected. Commercial districts benefit from similar ambiance and perceived image, but it limits what industries are willing to pay a premium.

Other considerations are the difficulty or intricacy of a façade and alteration potential in the property. To put this in terms related to the Oakhurst proposed district; we have less ornate architecture and the majority of the homes have the ability to expand under current zoning. Therefore the impact of local historic designation would be less intrusive.

“The literature on the subject of historic designation’s influence on property value generally points to a positive, or sometimes neutral, effect from designation. Only a handful of studies that specifically consider the costs of alteration and demolition come to a negative impact conclusion” There is a listing in the article of studies from 1974- 1994 that are empirical studies showing considerable benefit to property values from local historic district. It is pointed out that empirical studies do not have the property context to compare to an individual neighborhood. When considering the theoretical considerations/complications mentioned at the beginning of the article one could conclude that it is likely to improve the property values within the proposed local historic district and the surrounding areas.