Cents and Sensibilities

Older homes in designated historic districts are drawing attention like never before. Residents not only appreciate these mature neighborhoods and the qualities that make them special, they also appreciate their - well, appreciation.

To answer the often-asked question about the economic impact of designating residential districts as historic, the Los Angeles Conservancy reviewed several studies of historic districts in Texas, Indiana, Georgia and Virginia that found that neighborhoods bearing the "historic" designation appreciated faster over the two decades from the early 1970s to the early 1990s than similar neighborhoods that lacked the designation. Although the data are now somewhat dated, they end to confirm what other researchers have since found regarding the impact of historic designation on property values.

In Galveston, Texas, it was determined that "between 1975 and 1991, prices increased an average of 440% in the East End Historic District and by 165% in the Silk Stocking Historic District. By comparison, the prices in other neighborhoods over the same time period increased an average 80%."

In Elkhart, Ind., the rate of appreciation of properties in a particularly depressed historic residential area mirrored the rate of appreciation of the entire Elkhart market, and in Evansville, appreciation in one designated area outpaced that both in an adjacent undesignated area of the same vintage and residential style and in the overall Evansville market.

In Indianapolis, "property values in the local historic [residential] distric increased at a rate [that] exceeded the rate of both an adjacent, highly similar and unregulated neighborhood and the larger area of Indianapolis."

Other findings pointed to more consistent home ownership in Indianapolic historic districts. "In almost identical Indianapolis neighborhoods, the 1980 ratio of home-owners to renters was close: 34% of residents in Fletcher Place were owners and 29% in Holy Rosary - Danish Church. By 1990, while homeowners increased to 38% in Holy Rosary-Danish Church, the ratio of owners to renters had nearly doubled in Fletcher Place, rising to 66%.

In Rome, GA., the Athens-Clarke County Planning Department found that "between 1980 and 1996, designated properties increased in value 10% more than non-designted properties and locally designated properties increased in value almost 80% more than those only nationally designated."

Virginia cities confirmed the same trend. In Richmond, the value of properties within a designated district, Shockoe Slip, inceased at a steep rate compared to the rest of the city. Between 1980 and 1990, the total assessed valuation rose by 245%, from $23,135,886 to $56,761,000. Citywide, the increase was only 8.9%.

A study of Fredericksburg found that properties in the city's designted historic district gained appreciably more in value over the past 20 years than properties located elsewhere in the city. Between 1971 and 1990, residential properties in the historic district increased in value by an average 674%, while residential properties located elsewhere in the city increased in value by an average of 440%. In 1971, the average residentia property value was $17,920 in the historic district and $17,060 in the rest of the City. By 1990, average values had risen to $138,697 in the historic district and $87,011 outside the district.

It's little wonder that interest in historical districts is on the rise. Ken Bernstein, manager of the Los Angeles city planning department's Office of Historic Resources, told the Los Angeles Times recently that "the success of the Historic Preservation Overlay zones, or HPOZs, has caused an explosion of interest in the last decade." Until ten years ago, there were only eight zones in the city. Today there are 22, and designations are pending in another 16.

From American Bungalow , issue 57, spring 2008, page 125 - 126.