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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

 

 

 

 

 

 

 

 

 

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Written by Buffalo Rising

Buffalo Rising

Sometimes the authors at Buffalo Rising work on collaborative efforts in order to cover various events and stories. These posts can not be attributed to one single author, as it is a combined effort. Often times a formation of a post gets started by one writer and passed along to one or more writers before completion. At times there are author attributions at the end of one of these posts. Other times, “Buffalo Rising” is simply offered up as the creator of the article. In either case, the writing is original to Buffalo Rising.

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