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Home My WebLink About08272014 Historic Preservation Laydown - Economic Benefits 8I27/�� 12 Economic Benefits of historic Preservation Rehab Costs Are Roughly the Same as Building New • If no demolition is required, a major rehabilitation will cost between 12% less and 9% more than new construction. • If constructing a new building requires demolition of a significant existing structure, the cost savings from rehabilitation will be between 3% and 16%. • Life spans for new buildings are often 30-40 years vs. more than 100 years for most historic structures. 2 Creates Jobs • In a typical rehabilitation project, 60% to 70% of the total cost is labor. • Laborers are almost always hired locally. They, in turn, spend their money locally, supporting the local economy. • A California study found that rehabilitation resulted in 10% greater wholesale purchases and 43% greater retail purchases from suppliers than the same amount spent on new construction activity. • $1M spent on building rehabilitation creates: • 12 more jobs than $1M spent on manufacturing in Michigan • 20 more jobs than $1M spent mining coal in West Virginia • 29 more jobs than $1M spend pumping oil in Oklahoma • 22 more jobs than $1M spend cutting timber in Oregon 3 Increases Property Values • In a study of National Register districts in Philadelphia, homes in historic districts received a sales price premium of 131% over comparable properties in undesignated neighborhoods. • A study of nine Texas cities found that local designation increased property values from be- tween 5% and 20%. 4 Conserves Resources • Approximately 25% of the material being added to the landfills is demolition and construc- tion waste. • Demolishing one typical two story commercial building on Main Street eliminates all of the environmental benefits of recycling 1,344,000 aluminum cans. • Historic buildings contain significant embodied energy. That's the amount of energy associ- ated with extracting, processing, manufacturing, transporting and assembling building materials. 5 Uses Existing Public Investments • Every community has significant investments in public infrastructure, including roads, sewers, parks and schools. • Historic preservation directs development to places where infrastructure is already in place. • Rehabbing historic schools instead of building new saves money for education and often cre- ates a better learning environment. 6 Supports Small Business • 75% of all net new jobs in the U.S. are created by small businesses. • Older buildings make ideal locations for small, independent businesses and for start-ups. • 60 cents of every dollar spent at independent businesses remains in the local economy vs. less than 10 cents at national discounters. 7 Revitalizes Main Street Since 1980, local Main Street programs have: • Stimulated $48.9 billion in total private and public investment. • Created 94,176 net new businesses. • Generated 417,919 net new jobs. • Generated a reinvestment ratio of $27 to $1 per community.* •The average number of dollars generated in each community for every dollar used to operate the local Main Street Pro- gram. 8 Attracts Investment "In economics, it is the differentiated product that commands a high premium. If in the long run we want to attract capital, to attract investment in our communities, we must dif- ferentiate them from anywhere else." •Donovan Rypkema 9 Attracts Visitors • 78% of U.S. leisure travelers (118 million adults) participate in cultural and/or heritage activities when traveling. • Cultural heritage travelers spend, on average, $994 per trip compared to $611 for all U.S. trav- elers. • Cultural/heritage travelers took an average of 5 trips in 2008-2009 compared with slightly less than 4 trips for non-cultural/heritage travelers. 10 Prevents Sprawl • Saving historic buildings and keeping our towns and cities healthy reduces the pressure to pave the countryside. • In 1970, the state of Maine spent $8.7M to bus students to and from school. By 1995, with fewer students enrolled, the cost had risen to $54M. • When we reinvest in older neighborhoods, we are reinvesting in inherently sustainable com- munities that are generally dense, walkable, transit-accessible, and feature mixed-uses. 11 Creates Affordable Housing • To replace the current housing units occupied by lower income residents would cost $335 bil- lion. • In 2005, 1,101 unites of affordable housing were created in historic buildings using the federal rehabilitation tax credits. • Historic structures are often located close to services and public transportation, reducing trans- portation costs for residents. 12 Is Good Economic Development • In Nebraska, historic preservation generates $170 million per year: • Between 2001 and 2005, an estimated total of$1.5 billion was spent on rehabilitation of buildings. • Twenty-two jobs are created for every $1M spent on historic preservation, which sup- ported 3,869 jobs in the state in 2009. • Historic designation of neighborhoods and downtowns enhances and protects prop- erty values. Of the districts studied, property values as a whole showed increases in historic districts. References Lahr,Michael L.,David Listokin,et al. Economic Impacts for Historic Preservation in Nebraska. New Brunswick,New Jersey: Center for Urban Policy Research,Rutgers,The State University of New Jersey,October 2007. Mandala Research,LLC."The Cultural and Heritage Travelers Study."2009. Rypkema,Donovan D. The Economics of Historic Preservation: A Community Leader's Guide. Washington,D.C.: National Trust for Historic Preservation,1994. . 2005. "Economics,Sustainability,and Historic Preservation." Speech presented at the National Preservation Conference, Portland,Oregon,October 1,2005.