THE ECONOMICS OF HISTORIC PRESERVATION

Winston Churchill said it best: "We shape our buildings; thereafter, our buildings shape us." The reuse of Utica’s historic buildings can and should be an essential means to “shape” the quality of life in our community and provide an ongoing link to our collective past while simultaneously delivering measurable economic development and stimulating private investment.

A rehabilitated building is not just a capital asset. It has broad economic impact during renovation, as well as a subsequent fiscal benefit in its long-term use, not the least of which is neighborhood revitalization, typically in the older parts of a community. There is not a single sustained success story in downtown revitalization anywhere in the United States where historic preservation was not a key component of the effort.

Additionally, the designation of a property or a district as historic has a positive effect on property values. In 2003, New York City’s Independent Budget Office conducted a study of the effect of local historic district designation and regulation on real-estate prices and “[found evidence of a statistically significant price premium associated with inclusion [of a property] in an historic district. The extent of the premium varied from year to year, ranging from 22.6%... to 71.8%.”

It has been demonstrated time and again that historic preservation projects make a quantifiable, positive financial impact on a community as well. The U.S. Department of Commerce’s Bureau of Economic Analysis has developed an econometric model to measure the local impact of output from a variety of economic activities. They found that manufacturing produces 13 fewer jobs and adds $223,000 less to household income for each million of production than does rehabilitation activity.

Versus new construction, rehabilitation fares equally well. The U.S. Commerce Department compared $1 million spent on rehabilitation and $1 million spent on new construction, and found that rehabilitation created five more construction jobs and three more permanent jobs; kept $120,000 more in the community; increased household incomes by an additional $107,000 and increased retail sales by $142,000 - 20% more than with new construction.

Most recently, a 2006 independent audit of almost 2000 communities taking part in The National Trust for Historic Preservation’s Main Street program found the “reinvestment ratio” (average number of dollars generated in a community per dollar to operate) was $25.76 for every $1 spent.

And in May, the Brookings Institution issued “Restoring Prosperity” which cites historic building stock as a primary asset to the economic revitalization of America’s older industrial cities. The typically low acquisition cost of these buildings, coupled with their unique architecture, and urban location attract and retain the coveted 25-34 year old demographic. The report also found that “in 2000, 25- to 34-year olds were about 33 percent more likely than other Americans to live in a close-in metropolitan neighborhood, up from12 percent in 1990. Downtowns, particularly, have experienced a tremendous surge in young residents: From 1970 to 2000, the number of 25- to 34-year olds living in a sample of the country’s downtowns grew 90 percent, and their share of the overall downtown population nearly doubled, jumping from 13 percent to almost 25 percent.”

Another benefit of historic preservation that has gained major recognition nationwide is heritage tourism. Tourism is the number two industry in New York State, and history-based tourism represents a significant opportunity for the Greater Utica area. According to the Travel Industry Association of America, preservation visitors stay longer, visit twice as many places and spend two-and-a-half times as much money as non-preservation visitors. Visiting historic sites and museums is the third most popular vacation activity for U.S. travelers, and towns and cities that have protected their historic areas show a substantial local economic benefit year after year.

A nice place to visit is also a nice place to live. Historic preservation creates these “livable” cities, prevents sprawl and is a hallmark of smart growth – factors that increasingly dictate which cities thrive, and which ones don’t. Rehabilitation fosters density and diversity, while allowing for growth without pollution - after all, reusing an old building is the ultimate recycling.

For cities like Utica that are trying to reinvent their economy, leveraging our unique assets to create a sense of place, a sense of identity and a sense of community can and should be done through the rehabilitation of our built environment. Preservation has proven itself to be much more than nostalgia. It is a powerful economic engine that creates jobs, increases community reinvestment and raises property values. It is our past, it is our future and it is invaluable.

For more information: www.uticalandmarks.org

Pamela Jardieu is a trustee of the Landmarks Society of Greater Utica, and a Scenic and Historic District Commissioner for the City of Utica.