Miscellany Central: What is historic preservation for?

What is historic preservation for?

Utopia should look new

Matthew Yglesias

May 27

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I have been a homeowner in the Logan Circle Historic District for years now, and I find complying with the rules to be financially costly, logistically annoying, and antithetical to the District of Columbia’s stated goals in terms of ecological sustainability and housing affordability.

Unfortunately, historic preservation policies are very miscellaneous — even the different historic districts around D.C. have different rules — so I always find it challenging to say anything rigorous about them in general.

Mostly, I think the idea that public policy should put an extremely high weight on avoiding changes to the external appearance of things is inherently toxic to the idea of progressive politics, which is about making things change for the better. The Star Trek vision of 2258 where the Golden Gate Bridge is covered in solar panels and Marin County is dotted with cool towers is the way forward.

So I was really excited when Aaron Carr, the founder and executive director of the Housing Rights Initiative, tweeted “Historic district advocates have long contended that neighborhood landmarking is a boon for affordability, but one thing you should know about this claim is that it is a lie. Here's a list of 29 studies that show that district landmarking increases the cost of housing.”

After all, the best kind of empirical evidence is empirical evidence that backs up a position you already strongly hold!

But I poked around at a couple of the studies and then had Marc go through a bunch more of them (thanks, Marc!), and what’s mostly happening is that Carr is doing a fun kind of discourse jiu-jitsu. Preservation advocates just really like old stuff, so they want to encourage states and cities to adopt preservation rules. And then to reassure developers and homeowners, they produce all these studies showing that historic districts raise real estate values. So now along comes Carr to say — “aha! historic districts are bad for affordability!”

It’s a good trick, but it actually raises an interesting question that is bigger and more profound than my specific quibbles with the historic district: Are high property values good? Here I think I want to agree with Carr that the politics of “adopt this regulation because it will enrich incumbent homeowners” is bad, while also maintaining that there is something to the normie homeowner view that you want to see the value of the property you own go up rather than down. And it all does sort of tie back to preservation!

Land and houses

My dad has a vacation house in Brooklin, Maine where I’ve gone for most of my life, so I sometimes look at real estate listings there. Here’s a non-coastal vacant lot for sale for $47,000.

If you buy that land and put a mobile home down on it, then you’ve got yourself a place to live. Now if you buy the land, and then buy the mobile home, and then immediately decide you want to flip the parcel, you will probably be able to sell the combined land-and-home for more than $47,000 because the home is worth something. But if you live in the mobile home for a year, that premium is going to decline. If you live there for five years, it will decline more. A mobile home is like a car or a table or a boat — it gets less valuable over time. The land underneath your mobile home, by contrast, might get more valuable. Today it’s pretty cheap because non-coastal land in rural Maine is generally cheap, even if it’s in a town that has lots of coastline and lots of expensive homes.

But suppose that changes. Maybe thanks to remote work, lots of people who own vacation houses in Brooklin start spending more of the year there, which has positive spillovers to the local economy and drives up the price of the inland plots, too. Well now the value of your land is going to rise, and you’ll be in luck.

The normal way to talk about this, though, is to say that “house prices in Brooklin went up.” That’s because most people — and certainly the kind of people who dominate policy conversations — buy houses that are bundled with land, rather than buying vacant lots and mobile homes.

But I don’t think that changes the fact that houses, considered physical objects, are always going down rather than up in value. I think about my house, which over the course of a few years of living here has needed to have its dryer replaced, has twice needed serious water damage repaired, has twice had to have holes that mice were creeping in through plugged, has once needed an HVAC system replaced, and has once needed to get some ducts redone. A house is a disaster of an investment — constantly breaking. When Redfin says the value of the house has gone up, what they mean is the value of the land underneath the house has gone up.

Old houses, preservation, and affordability

If you think of the price of a dwelling as essentially the joint cost of land and a house, then I think you can see where the idea of preserving old structures as boosting affordability comes from.

If you walk around my neighborhood, you will find some buildings like this one that are old, downscale-looking, and probably relatively affordable.

By contrast, a newer building like this is going to be more expensive.

These buildings are very close to each other so they should have the same land cost. But the new building is nicer, more valuable, and more expensive.

But the reason regulations prohibiting teardowns of old buildings don’t preserve affordability is that they can be purchased and renovated into upscale units.

Now what is true is that if you didn’t have just historic preservation rules but a total ban on residential investment, then the declining value of the structures would wholly or partially offset the rising value of the land and keep the units cheap.

But this would be a terrible housing affordability strategy — you’d essentially be deliberately trapping people in squalid conditions. In “Homelessness is About Housing,” I advocated in favor of re-legalizing old-fashioned rooming houses and Single Resident Occupancy buildings that were pretty squalid on the grounds that a squalid dwelling is better than being out on the streets. But mandatory squalidness is not a good idea.

So I don’t like preservation as an affordability strategy for that reason. But I am also not fully on board with Carr’s idea that low house prices are good, because land being super cheap can also be a form of squalidness.

High housing demand is good

Another affordability strategy for Logan Circle would be to dismiss our elementary school’s awesome principal and get rid of all the teachers, stop maintaining the parks in the neighborhood, close the Shaw Library, shut down the Green Line of the Metro, and tell the police to never patrol here and just respond to 9-1-1 calls.

After all, bad transportation, high crime, crummy schools, and all-around low-quality city services will absolutely make housing cheaper. But making housing more affordable by making a neighborhood a worse place to live is a terrible idea. Conversely, this paper claiming to show that a historic district policy in Kalamazoo, Michigan raised property values might just be showing that it made Kalamazoo a nicer place to live. I haven’t been to Kalamazoo and can’t speak to the situation there in detail, but it would be very unusual for a small midwestern city to be suffering from the kind of acute housing shortages that we see on the coasts or in Denver.

In general, trying to make Kalamazoo a place where more people want to live is a perfectly reasonable goal for Kalamazoo policymakers, and it is one that will necessarily push up land values.

But what has to happen when more people want to live in Kalamazoo is that you build more housing units. Depending on exactly how that new building is done, property values might go up or down. But for example, a law allowing homeowners to build accessory dwelling units on their property is clearly going to increase property values because the ADUs generate rental income. But it also ameliorates housing scarcity and improves affordability by increasing the supply of homes.

The right question to ask about historic preservation and affordability is “How is it impacting supply?” There’s an incredible variety of preservation policies out there and also a variety of local contexts.

What’s really troubling to me are situations like the one shown on the map above, where historic preservation is used as a kind of super-zoning. All of Ward 3 in Washington D.C. should be rezoned for more density, but they do normally allow dense development right by the Red Line metro stations. Yet here we have a low-slung strip mall (Sam’s Park & Shop) and a parking lot directly adjacent to the Cleveland Park Metro that cannot be redeveloped because it’s a historic strip mall.

Know what you’re trying to do

All that being said, I think it would be foolish to look at Sam’s Park & Shop and say that the problem there is preservation per se. The problem of Sam’s Park & Shop is that people in the neighborhood prefer to block new development, and the political system is designed to prioritize hyper-local desires for exclusion over other kinds of goals.

But as another example, we keep having various skirmishes at the Historic Preservation Review Board with regard to solar panels. Under pressure, they keep softening their opposition and no longer strictly prohibit front-facing panels. Nonetheless, this is what they’ve come up with:

The board went on to approve front-facing solar panels for Preister’s Takoma house. It didn’t come without a cost — Preister had revised his design to use a “solar skin” which will make the panels blend in more with the roof, but with a 10% increase in the price of the project and reduced efficiency, which gives him fewer of the solar credits that defray the cost of solar installations.

The preservation board still wants any future such front-facing solar installations to come before them at a hearing, at least for now. That’s because the board wasn’t yet ready to give a blanket approval for such things or let the preservation staff approve them.

The Board is being unreasonable here, but the problem is bigger than the Board. The city government needs to decide whether or not, all things considered, it wants to promote green energy. City officials say they want to promote green energy. City officials have even enacted several subsidy schemes designed to induce people to put solar panels on their houses. But if you actually go to do it, the preservation board may raise your costs by 10% while also reducing the amount of power your panels generate while also wasting tons of time by making you come to meetings.

That’s because the actual rules the city has on the books make “things should look old” into a trump card, at least when you’re talking about activities inside historic districts. Is that a good idea? If the mayor were to list her top five priorities for the city, would she tell you that “make things old-looking” is really high up there? I don’t think that she would. But the rules are what they are. Because my roof tilts backward, I was able to get rooftop solar panels approved without a problem, but when I wanted to install modern, energy-efficient windows, I was told I had to go with a more expensive, less-effective design that better copycats the look of old windows.

Again, do the city’s elected officials in fact believe it is more important to make things look old than to promote energy conservation? I’m skeptical. But that’s what the rule says.

And to me, that’s the fundamental off-the-rails nature of historic preservation policy in the United States — a failure to set goals and priorities. If you’re in Kalamazoo and you are trying to raise real estate values in hopes of attracting new inbound residential investment with some preservation scheme you believe will accomplish that, then knock yourself out. Or if your city has some particular old building that’s super cool and you want to spend public funds on saving it, then sure. But if your city has housing scarcity, then you need to repeal the rules that impede the construction of new units. And if you want to transform the energy system that undergirds our economy, then things are going to have to look different.

“New things are bad” is not a sound basis for making policy, and “new things should look like old things” is borderline absurd.

Miscellany Central

Thursday, May 27, 2021

What is historic preservation for?

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