The Case Against (Most) Historic Preservation

A guest post by Groma Summer Policy Associate Ian McGregor

Like most US cities, Boston is currently dealing with a housing crisis. Rents and home prices in Boston have skyrocketed over the last decade, largely because the supply of housing has not grown fast enough to keep up with the increased demand to live here. The lack of affordable housing means that current renters are under greater financial stress to make ends meet, with some being priced out all together and leaving the city. Meanwhile, people interested in moving to Boston may be put off by the high cost of housing, which constrains the city’s ability to attract talent. As we’ve described elsewhere, building more housing is the essential step towards resolving this crisis and making Boston more affordable, prosperous, and dynamic. 

Restrictive zoning regulations are rightly cited as a key factor that limits the supply of housing, inflates prices, and shackles economic growth. However, this post will focus on another factor that has received less attention: historic preservation policies. 

Historic preservation policies are the protections that cities give to properties that are deemed historically significant. These protections prevent the structures on that land from being demolished or altered in a major way. Cities can designate specific properties as historic, or they can combine a group of adjacent properties into a historic district that receives protections. Generally, any proposed changes to the exterior or land use of a historic property or district must be approved by a municipal landmark commission. 

The impulse behind historic preservation is easy to understand. People value cities with a sense of place, a physical environment that preserves and honors its history, providing a link to the past for future generations. This sentiment is particularly relevant in Boston, which is one of the oldest cities in the US. Boston has sites of national significance and distinctive architectural styles from throughout its nearly 400 years of history. Even the most ardent YIMBYs wouldn’t want to demolish the Old North Church or the Bunker Hill Monument to make room for more apartments. 

That said, it’s important to properly weigh the benefits and costs of any policy, and historic preservation policies have significant costs both in concept and real-life implementation. 

While there are always exceptions, the costs of historic preservation outweigh the benefits in most use cases. Like restrictive zoning, historic preservation imposes a supply restriction that inflates property values and restricts new construction, which hurts housing affordability. It also constrains cities’ ability to change in the face of new economic and environmental conditions, which hurts economic growth. In practice, historic preservation policies are often overly broad and dictated by arbitrary political whims, which exacerbates these costs. The policy of giving historic protections to entire neighborhoods should be abolished, and the designation of individual structures as historic should be limited. Alternative policies can maintain our physical connection to our history without the negative side effects. 

Historic Preservation Hurts Affordability & Dynamism

The debate over historic preservation is really about what kind of city we want to live in. Historic preservation policies are meant to protect critical physical links to our past, which is laudable. Creating protected landmarks can bring people from across the city together in shared history, enhancing a sense of belonging and community. However, there are other important qualities that we need in a city: affordability, economic opportunity, growth, and dynamism. We need cities that are innovative, flexible, and able to respond to the material needs of their citizens. Given the current housing crisis, we have to prioritize these needs when thinking about urban policy. I will argue in this section that current historic preservation cannot be a top policy priority today because it reduces cities’ ability to improve affordability and dynamism.

Housing Affordability

In their chapter of a 2017 book on housing policy, Ingrid Gould Ellen (a professor at NYU in urban policy) and Brian McCabe (a sociology professor at Georgetown) examined the effects of New York City’s historic districts on “soft sites,” which are lots built to under half of their zoned housing capacity. Redeveloping soft sites is one of the fastest ways to increase the housing supply because developers don’t have to get approval from the zoning board to build more units. Ellen & McCabe found that soft sites in historic districts were less likely to be redeveloped than adjacent soft sites outside of the districts. Historic protections blocked the demolition of older buildings to make way for denser housing and made it difficult to add new units to existing soft sites. This is significant because historic districts cover a lot of floor space in New York. Ellen & McCabe estimated there were 119,000 housing units worth of unbuilt, allowable residential floor space in historic districts. Of course, all of those units would not immediately be built if historic designations were removed. However, Ellen & McCabe concluded that removing historic protections would certainly make it more likely that those units would be developed and that historic preservation was acting as a cap on the building of new housing.

Based on principles of supply and demand, we’d expect this supply restriction to increase the cost of housing. A Realtor.com study backs up this intuition. The study, which looked at 2,885 historic homes across the US, found that properties with a historic designation were 5.6% more expensive than similar, non-historic homes in the same ZIP code. The finding that historic preservation increases property values has been supported by other studies in New York, Washington, D.C., and Texas. New York City’s Landmarks Preservation Commission literally says that one of its goals is to “stabilize and improve property values.” 

A good example of how disastrous historic preservation can be for a city’s affordability is Charleston, SC. In 1931, Charleston created the nation’s first historic district in its downtown area. Charleston’s downtown area had avoided much damage during the Civil War and was treasured as a jewel of Southern identity. The designation came in response to the building of a gas station, which residents thought would ruin the neighborhood’s colonial architecture. As Jacob Anbinder, a History PhD student in urban politics at Harvard, has pointed out, the historic district also furthered the segregation already baked into Charleston’s zoning code. The district’s protections against new development assured white residents that the neighborhood would be able to resist any demographic changes and that black residents weren’t welcome. 

Fast forward to 2015, and Charleston’s economy was booming. Thanks to new manufacturing plants and increased trade through its port, Charleston’s metro-area population had increased 11% in the last five years. However, because there was no way to build new housing units in its historic downtown area, the supply of housing barely budged. Property values surged with the influx of new residents, creating an affordable housing crisis. Older residents used the preservation protections to label any new construction as too modern and to block the developments. The nearby suburb of Mount Pleasant actually changed its zoning to allow for less-dense housing.  

Charleston is still facing a housing crisis, with the city needing 16,000 more housing units over the next 10 years to keep up with demand. Charleston had the good fortune of experiencing economic growth and an ensuing population boom, and it needs to be able to meet the current needs of its residents. Skyrocketing housing costs, driven by its historic preservation policies, are hurting average residents, while wealthy downtown property owners benefit from the continued scarcity. Unless Charleston wants to be a city stuck in its past, with a hollowed-out middle class that can’t afford to live there, it must change its historic preservation policies to allow more housing to be built.

Dynamism

Cities have always been centers of change - people, businesses, and entire neighborhoods come and go over time. Dynamic cities are the ones that are able to take advantage of changing conditions to provide opportunities to their residents and to foster economic development. The rapid technological progress and economic growth since the start of the Industrial Revolution have transformed our living standards to be orders of magnitude higher than in the pre-industrial era, and we need our cities to be engines of growth that continue that trajectory so future generations will be able to say the same relative to us. 

A city’s ability to change what economist Adam Millsap calls its “built environment,” “housing, roads, parks, commercial buildings,” is closely intertwined with economic growth. Cities will inevitably go through booms and declines of industries, such as the rise and fall of manufacturing in the Rust Belt in the mid-20th century. In order to continue to flourish, cities’ built environments must be able to quickly adapt to these cycles, increasing housing during the boom and having flexible land use that can attract new businesses after the bust. Otherwise, cities risk their built environment being permanently oriented towards industries that went out of business decades ago.  

Historic preservation limits cities’ ability to change their built environments and to foster economic growth. Historic preservation is often concentrated in downtowns because cities grow out from the center, which has the oldest buildings. Downtowns are usually the densest and most desirable parts of the city, with the highest concentration of businesses, jobs, and leisure activities, and they would be the most natural fit for new housing and commercial developments. However, historic preservation’s limits on exterior changes and new development artificially caps how many businesses and people can move into the busiest and most productive part of the city. The higher housing prices from the limited supply could spur businesses to move to other places with lower housing costs and wages. 

Historic preservation will also prevent cities from adapting properties to be ready for climate change. Many historic buildings were not meant to house people under rising temperatures and more extreme weather, and historic preservation blocks the renovation of old buildings to meet those needs, such as installing central air. Similarly, if we have any intention of reducing carbon emissions, such as replacing gas heating with heat pumps, historic protections will need to be waived to allow old buildings to receive those upgrades. 

Historic preservation protections are relatively recent, and many of the properties that are now considered historic did not have to deal with the rules that developers do now. Every historic building or neighborhood replaced a prior one, and many now-historic buildings very well would not have been built if they had to deal with limits on new development or exterior changes. Cities need the freedom to build new structures that meet today’s needs and that will be seen as historic 50 years from now. As Ben Adler said in his review of The Invention of Brownstone Brooklyn: “Today's architectural landmark was the Victorian era's suburban tract house, or McMansion, decorated with mass-produced moldings and clad in sandstone from Connecticut because it lent an air of grandeur but was cheaper than marble.” We don’t want future generations to look back and think that there wasn’t enough built during this period to be worth preserving.

Historic Preservation Policies Are Overly Broad and Vulnerable to Political Pressures

Beyond their conceptual problems, many historic preservation policies are poorly implemented. 

One issue is that cities often designate entire historic districts, rather than assigning protections to individual properties within those neighborhoods. Given the high costs of preservation protections that I’ve described, there should be a high bar for any property to receive those protections. Applying those protections to an entire neighborhood means that there will be plenty of properties that are probably not truly deserving of protections. It’s doubtful that a city government would be able to justify every building in a historic district being worthy of preservation on its own, and the cost of so many unnecessary protections adds up quickly. Historic districts are far too broad in protecting the many buildings and businesses that just happen to be near historic properties.

The other problem is that historic preservation designations are far too susceptible to influence by the groups that are the most well-connected. The residents who inevitably have the most input on preservation decisions are the wealthiest, most entrenched property owners and politically influential anti-gentrification groups who don’t want their neighborhood to change. Rather than saying that they simply don’t want change or that they want to protect their property values, these NIMBYs can use historic preservation as a vehicle to block new housing developments. 

It’s intuitive that property owners would support preservation, but it may be surprising that activist groups would also support it. Jacob Anbinder has written about how anti-gentrification groups have spun preservation as progressive, even though it fundamentally functions to increase property owners’ wealth at the expense of renters and prospective residents. Some anti-gentrification activists mistakenly think that historic preservation can deter gentrification by preventing developers from building the modern, market-rate apartments that they claim will “price out” poor residents. But, as explained earlier, historic preservation actually increases property values, which would only accelerate the displacement of residents. In addition, blocking new apartments furthers displacement by preventing new units that increase supply from entering the market. 

There are plenty of well-known examples of people using preservation to block new development. A proposed San Francisco apartment building has been delayed for years because residents tried to get the laundromat that was previously on the plot of land declared as historic. A neighbor attempted to scuttle the sale of a home that was going to be demolished in St. Petersburg, FL, by submitting a spurious request to designate it as a historic landmark. Homeowners in Brooklyn were able to convince the city to declare their rowhouses a historic landmark because they feared that new apartments would be built in their neighborhood. 

Even if one thinks that historical preservation is a good idea, it’s clear that historic preservation has been overly applied and co-opted as a cover for NIMBYs to block development. It’s too vulnerable to influence from powerful local interests that use it to their own advantage, and it has become a central part of how cities generate wealth for those able to own property at the expense of everyone else.

Are Preservation Easements a Solution?

A commonly proposed alternative to the designation of individual landmarks by cities is the use of preservation easements. A preservation easement is a private legal agreement by a property owner that places restrictions on changes to or new development on the property. The easement is then transferred to a nonprofit preservation organization or a government agency, which is responsible for enforcing the preservation protections in place. The protections bind future owners of the property to its terms, often permanently but sometimes temporarily. The federal government encourages easements by providing an income tax deduction and tax credits to owners if they donate an easement to a “qualified” easement-holding organization.¹ The idea is that the owner is giving up property rights to new development in the public interest of preservation, so they are owed compensation for the financial loss of those rights.

Preservation easements provide a less coercive avenue for historic preservation because they involve owners voluntarily agreeing to restrictions on development or changes to their property. Cities sometimes try to designate buildings as historic against the wishes of the owner, such as the “historic” laundromat case in San Francisco. Instead of the city forcing historic protections onto an unwilling owner, the owner might voluntarily accept a preservation easement that would provide them with compensation in exchange for some form of development restrictions. This kind of Coasian bargaining reaches a more efficient outcome that preserves historic property without the use of state coercion. 

However, preservation easements aren’t a good alternative to historic preservation because they function nearly identically in effect. Yes, easements are private mechanisms, rather than imposed by the government, but they create similar costs as city-implemented historic preservation policies. Easements still limit the amount of new development possible on a piece of property, which creates a supply restriction that raises the cost of housing in a city. Because easements usually apply in perpetuity, binding even after the property is sold, they limit cities’ ability to change their built environments. Preservation easements negatively affect the features we need in cities, affordability and dynamism, just like normal historic preservation.

Easements are also just as vulnerable to being co-opted by interest groups as city-organized historic preservation policies. Individual owners don’t need to lobby a city to use an easement to restrict their property’s use against dense housing. They can simply donate an easement to one of several common conservation trusts, which will inflate their property value and permanently block new development. A group of nearby owners could all establish easements on their properties, which would have similar effects on development and housing costs as a historic district. 

On top of that, each of the owners would receive tax benefits from the federal government for doing so. These benefits pay owners for locking in easements that block new housing developments. Beyond that, the IRS included preservation easements on its 2020 “Dirty Dozen” list of tax scams because easements have become such a prevalent form of tax avoidance. ProPublica has reported on the tactic of “buying up land, finding an appraiser willing to declare that it has huge development value…then selling stakes in the deal to wealthy investors who extract tax deductions that are often five or more times what they put in.” Annually, more than $2 billion in improper write-offs comes from weaponized preservation easements. 

Preservation easements are ripe for abuse by private actors and, even if used properly, still duplicate similar negative effects as city-managed historic preservation policies. The lack of coercion is a plus, but that doesn’t make up for easements’ downsides. 

The core issue with easements is the core problem with historic preservation - it favors protecting the past at the expense of present needs. If we acknowledge that there are certain historic properties that should be preserved, such as Boston’s Old North Church or old State House, those protections must be given out in a highly selective process that appropriately weighs the benefits and costs. In an ideal world, a neutral third party would objectively weigh whether a building’s historic value overcomes the costs of preserving it, but no such party exists. Mechanisms like preservation easements appear too susceptible to private interests taking advantage of them. Landmark commissions, as currently constructed, are too vulnerable to lobbying by interest groups. 

Solutions

Abolish Historic Districts

This recommendation flows naturally from my earlier discussion of the costs of historic districts. Cities should end all historic districts and, instead, should only be able to give historic protections to specific properties. Allowing cities to only preserve individual landmarks will force cities to affirmatively show the historic worth of each property that receives protection. Instead of declaring a blanket historic district in the Ladder Blocks neighborhood, for example, Boston would have to decide whether the Payless ShoeSource there really counts as historic. It would no longer be possible to slip an undeserving property into a historic district, which would sift out the most egregious inclusions that cause the most market distortions and incur the most costs.

The preservation process might also become less susceptible to intense lobbying by narrow interest groups. Property owners wouldn’t be able to pool their resources to make one big push for a historic district that covers all of their lands. Turning historic preservation campaigns into a series of smaller, individual lobbying efforts would reduce the amount of pressure that preservation boards receive on any one case. This would give the boards more breathing room to actually make decisions based on historic value. 

Reforming Landmark Commissions

Current landmark commissions have enormous power to shape the development of their cities, but they suffer from too much influence from interest groups and overly broad powers. The result is they don’t properly weigh the significant costs of historic preservation when making designations. 

Here are three changes that would force landmark commissions to more accurately weigh their decisions:

1. Ban the establishment of historic districts, so that the commission can only preserve individual pieces of property. As touched on above, this rule would prevent the worst excesses of historic preservation and should reduce the influence of interest groups.

2. Cap the total number of designated landmarks. This would limit the potential for the commission’s scope to increase and place a maximum on the cost of historic preservation protections.

3. For each proposed landmark, require a cost-benefit analysis of the effect of preservation protections on the city’s cost of housing and economy. The report would force the commission to, at a minimum, acknowledge the potential costs of preservation in its process.

A commission that followed these rules wouldn’t be perfect and would, surely, preserve some buildings that didn’t deserve it. However, these rules would eliminate a substantial amount of the negative impact from current preservation policies while still recognizing the value of preserving truly historic places.

Emphasize That Preservationists Should Want To Build Up

This isn’t a policy change, but rather an argument that could be used to appeal to preservationists and to convince them to change their mindset against density in neighborhoods that they want to preserve.

Preservationists often argue against new, dense housing developments because they fear that tall buildings will “ruin” the traditional character of neighborhoods that were built at lower heights. However, as economist Edward Glaeser points out in Triumph of the City, preservationists should actually push new housing developments to be taller because that would reduce the pressure to knock down other buildings that they want to protect.²

The fundamental reason that new buildings are being constructed in “historic” neighborhoods is that there’s an increased demand to live there that isn’t met by the existing housing supply. There will continue to be pressure to build new housing so long as demand exceeds supply. The preservationists could agree to allow, say, a 10 story apartment building to address the need for new housing, which would only demolish one building in the neighborhood. However, if the 10 story building is forced to only be three stories, the excess demand will push developers to demolish several other buildings to build the necessary housing. Since their interest is in protecting the number of existing buildings, the preservationists would be better served if only one building were demolished to build 10 stories at once, rather than seeing multiple buildings demolished to create new housing up to the height limit. Preservationists should encourage new, dense buildings in order to reduce the overall pressure to demolish older ones. 

Conclusion

Cities in the US are facing interlocking crises around the cost of housing, furthering economic growth, and adapting to climate change. Urban residents today have different needs than previous generations, and we need our cities to be able to change to reflect this. Historic preservation stands in the way, by restricting the supply of housing, trapping the built environment in the past, and reigning in growth. There are clear solutions, like ending historic districts and reforming landmark commissions, that we should pursue that will prioritize the present and future, while still protecting valuable physical connections to the past.

1. Easements to Protect Historic Properties: A Useful Historic Preservation Tool with Potential Tax Benefits. National Park Service Technical Preservation Services, 2010, https://www.nps.gov/tps/tax-incentives/taxdocs/easements-historic-properties.pdf

2. Glaeser (2011), pp. 263.