Impacts of Landmark Designation

Sep 11, 2013

Impacts of Landmark Designation

Property Value

Arguably, the largest area of impact for historic preservation is the residential housing market. This section will cover how historic preservation, in particular landmark designation, affects the price of housing, the possible mix of different types of housing, and any effect on minority and low-income groups.

Historic designation in residential areas usually occurs in one of two ways: 1) designation of an individual property deemed to be historically significant, or 2) designation of an entire neighborhood or a section of a neighborhood as an historic district. Across many studies, a common question has been the effect, if any, of historic designation on the price of land and housing.

Some researchers have demonstrated that the effect of historic designation on price may depend on whether or not a property carries a national or local designation. One study found that a national designation positively impacts the value of the property, while a local designation can negatively impact the property value (Schaeffer and Millerick, 1991). The reasons given are that local historic districts tend to carry more restrictions, while national designations seem to carry more prestige (Schaeffer and Millerick 1991). However, another study found that even though historic designation increased property values of homes inside designated districts in Sacramento, Calif., the designation had an insignificant effect on homes immediately adjacent to historic districts (Clark and Herrin, 1997). A third study rebuts this last point, detecting an external benefit to being near a landmark home or district, even when not sharing the designation (Ford, 1989). In other words, historic designation serves as a "catalyst" for overall neighborhood rejuvenation when households who own homes in a neighborhood adjacent to an historic district restore – or at least rehabilitate – their own homes. These households receive the benefit of living near an historic district without having to incur the regulatory costs that come with a landmark status (Ford 1989). It is this "catalyst" that is seen as the impetus for a wave of restoration and rehabilitation in a given area (Listokin et al 1999; Rypkema, 1994).

It is important to keep in mind that regional and sub-regional housing markets (and aesthetic tastes) differ across the country, as well as within a region. There is one standard for being added to the National Register – the Secretary of the Interior's Standards for Rehabilitation. However, there are thousands of different local historic preservation ordinances, some more stringent than others, that contribute to the overall character of any particular sub-regional housing market.

Community Character

Landmarks define and are defined by community character. This paradox creates frustrations that continually play out in public meetings and the op-ed pages of local newspapers. Should character be strictly aesthetic, or should history and structural function – as illustrated by the "Motor Row" historic district in Chicago's South Loop – also contribute? Does continuity, as seen along many suburban "main streets," create character? If so, does a walking tour of the University of Chicago's Hyde Park campus offend the eyes during the few dozen steps from the Byzantine/Romanesque Rockefeller Chapel to the contemporary Graduate School of Business to the Prairie School Robie House? These are questions that must fall to the individual; and as discussed in other sections of this report, the answers seldom please everyone.

History, aesthetics and function play central roles in defining community character, sometimes to competing or ambiguous ends. In Seattle's Pioneer Square Historic District, many of the buildings date to the late nineteenth century, a time when exterior fire escapes were mandated. Later building codes required a secondary interior staircase to replace the iron fire escapes, which would conduct heat during a fire, creating a burn hazard. When local building owners requested approval from the preservation commission to remove the obsolete exterior stairways, they were advised against it because, through the years, the iron fire escapes had become "authentic" elements of the streetscape (Neil, 1980).

Another example of preservation's uncertain relationship with history and community character comes from a study of public reactions to fake historic architecture in California. Here, the researcher concluded that:

"The findings suggest that when fake architecture is contextual, it adds to community aesthetics by increasing the historic character of a city. Fake architecture was rated as less attractive than historic buildings but more attractive than contemporary architecture. Historic-looking buildings were not viewed as "architectural fakes" but, rather, were viewed as attractive complements to the existing historic buildings in San Luis Obispo. People were able to discriminate between real and fake historic architecture; however, they also viewed fake architecture as more historical than contemporary designs" (Levy, 2005).

An inversion of this example lies in the public buildings of the Jim Crow South, where historic architecture is not forgiven for being fake, but disliked because it, and its symbolism, are real. The segregationist policies that preceded the Civil Rights Movement translated architecturally into separate waiting rooms, restrooms and entrances for blacks and whites. Today, these buildings represent a distinct – and uncomfortable – chapter of American history. But a history professor at the University of South Carolina who studies this "problematical past" argues that the educational benefits of preserving such structures may outweigh the intuitive push to destroy and forget them (Weyeneth, 2005). Sites like the Alamo, where a lopsided battle galvanized Texan secessionism and became a metaphor; the scene of the Haymarket Riot, where an 1886 labor rally just west of Chicago's Loop devolved into a deadly symbol of organized labor's precariousness in nineteenth-century America; and the Lorraine Motel in Memphis, where Martin Luther King, Jr. was assassinated in 1968 (now the National Civil Rights Museum) all attest to the power of landmarking the controversial and the tragic.

Examples like those above indicate that "character" and "historic integrity" are terms that must be defined on a sliding scale and administered according to the broadest possible agreement. Donovan D. Rypkema expresses this in an essay for the APA Journal: "Every new building that we add doesn't have to be the best building downtown; but if it is one more concrete block, Drivit-covered structure, less than the average quality of the whole, the overall physical quality of the downtown can do nothing but decline. Likewise when we are pondering tearing a building down. If it is of a greater quality than the average – and frankly most historic buildings still standing will meet that test – tearing it down reduces the overall quality of downtown" (Rypkema, 2003). Still, the words "historic," "average" and "quality" present a semantic challenge.

Historic preservation also addresses vacant parcels next to older, pre-existing buildings. Conventional wisdom encourages "sympathetic" development, meaning that new construction should follow the size, scale, and setbacks of the structures around it. This maintains a certain aesthetic, or "streetwall," that can be more visually appealing than buildings out of scale from each other.

Energy Consumption

With the recent national emphasis on environmentalism, the idea of embodied energy – "the energy required to extract, process, deliver and install the materials needed to construct a building" – is moving to the forefront of preservation debate (Jackson, 2005). This is challenging the argument that new construction is more energy efficient, and therefore more environmentally friendly. Experts argue that the time necessary for the increased efficiency of some replacement buildings to outweigh the loss of embodied energy on the site is longer than the new structure's life expectancy (Jackson, 2005). When comparing the embodied energy in an existing building and the amount of energy expended to demolish and redevelop the site, it often becomes apparent that the most sustainable route may be to maintain the existing structure (Wilson and Petri, 2007).

The discussion of embodied energy has its genesis in a report published in 1976 by a partnership of University of Illinois academics and New York City architects, Energy Use for Building Construction. Using construction industry data from 1967, the group devised a way to quantify the amount of energy consumed in the construction process (Jackson, 2005). This framework is still used to today. Even though the methodology is used for historic buildings, the sentiment among preservation advocates is that the true embodied energy values of older or historic buildings are possibly undervalued. For instance, Energy Use for Building Construction was compiled using 1967 construction industry data for new construction. But what about a building constructed in 1910 that typically had more volume, with higher ceilings or wider rooms? Or that same 1910 building that used denser building materials that were subject to very different manufacturing processes that may have consumed more energy? (Jackson, 2005)

In the twenty-first century, as fossil fuel conservation intensifies, we should remember that the existing built environment is a huge resource and can be a great asset in the continued "greening" of society. According to architect Carl Elefante, "The greenest building is the one that is already built." However, historic preservation advocates must develop a better green-building rating system that uses embodied energy in a more comprehensive manner (Jackson, 2005). Historic preservationists are also attempting to get more credit for reuse projects in the current LEED environmental rating system (Hughes, 2008). Better assessment and understanding of the energy that is embodied in historic buildings can help reach this goal.


Historic preservation can be an effective tool for job creation. Some experts argue that the rehabilitation of older or historic buildings has a much greater impact on the local economy than new construction. Rehabilitation, as opposed to new construction, offers employment in key construction capacities. New construction will generally be 50% labor and 50% materials. However, rehabilitation will generally be from 60% to 70% labor, with the remainder of a rehabilitation budget in materials. Consider also the demand in construction jobs created once the rehabilitation is finished. Because components of a building have lives of effectively 30 to 50 years, generally if 2% to 3% of a community's buildings are rehabilitated annually, then the theory is that there would be a continual stream of employment in construction (Rypkema 2003).

An extension of this logic is quantified in a study performed by the Center for Urban Policy Research at Rutgers University. David & Barbara Listokin and Michael Lahr discuss and demonstrate how historic preservation positively affects employment and related categories in New Jersey. First, the study discusses the direct benefits or impacts that historic preservation can have via multiplier effects on many categories, particularly on employment. A direct impact is the labor and material purchases that are specifically geared towards historic preservation activities. A multiplier effect known as an indirect impact is the spending on goods and services by people and industries that produce the items that are specifically geared towards historic preservation activities. Another multiplier effect known as an induced impact consists of purchases made by the households of those who are either directly or indirectly involved in historic preservation activities (Listokin, Listokin & Lahr 1998, 455-456). Listokin, Listokin & Lahr (1998) use the example of lumber to show the multiplier effect historic preservation has. Lumber that is purchased at a hardware store for historic preservation activity is a direct impact. The hardware store purchasing that same lumber from the mill to be sold is an indirect impact. The workers that benefited from the sale of the lumber, either from the mill to the hardware store or from the hardware store to the customer, is an induced impact (Listokin, Listokin & Lahr 1998, 455-456).

A study of the economic impacts of historic preservation on construction, both in New Jersey and nationwide, shows that the historic rehabilitation of single-family housing, multi-family housing, and non-residential structures, is a "somewhat more potent economic pump primer than is new construction" of the same (Listokin, Listokin & Lahr 1998, 457). For every $1 million of investment at both the national and state (New Jersey) levels, historic rehabilitation slightly outpaced new construction in the generation of jobs, income, general domestic product (GDP) and general state product (GSP), and state and local taxes (Listokin and Lahr 1997, from Listokin, Listokin and Lahr 1998, 458). (See Table below)


Another consideration of the economic impacts of historic preservation is how it compares to certain non-construction sectors of the economy. For every $1 million of investment at the national level, historic preservation outpaces pharmaceutical production, electronic component production, and book publishing in its positive impact on the economy, except in GDP, to which historic preservation falls slightly behind book publishing in that category (Listokin, Listokin & Lahr 1998, 459). (See Table below)


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