We must reject the proposed Historic Protection Overlay

We all love the Spruce Park Neighborhood and recognize the value of upholding its character, but the HPO would impose deep reaching policy that would unfairly restrict the rights of property owners. The HPO is not the solution we are looking for.

J Real Estate Finan Econ (2013) 46:543–563

DOI 10.1007/s11146-011-9338-8

Historic Preservation: Preserving Value?

Martin D. Heintzelman · Jason J. Altieri

The creation of historic districts has become a common way to preserve historic buildings and neighborhoods. Advocates of historic districts assume that such districts augment, or at least, protect property values for homes within these districts. The existing economic literature supports this conclusion, but most studies seem to fall victim to an endogeneity bias since higher value homes are, all else equal, more likely to be included in districts.

We find evidence that the creation of a local historic district, on average, reduces home prices for homes in that district between 11.6 and 15.5%. This indicates that any restrictions implied by the creation of a district outweigh any benefits to homeowners within the district.

Homes near districts, but not in districts, stand to benefit by receiving the augmented public good. Homes in regulated districts, however, may be affected negatively or positively by designation depending on the relative weight of the increased public good provision versus the implicit cost of restrictions on development and renovation.

We must reject the proposed Historic Protection Overlay

We all love the Spruce Park Neighborhood and recognize the value of upholding its character, but the HPO would impose deep reaching policy that would unfairly restrict the rights of property owners. The HPO is not the solution we are looking for.

J Real Estate Finan Econ (2013) 46:543–563

DOI 10.1007/s11146-011-9338-8

Historic Preservation: Preserving Value?

Martin D. Heintzelman · Jason J. Altieri

The creation of historic districts has become a common way to preserve historic buildings and neighborhoods. Advocates of historic districts assume that such districts augment, or at least, protect property values for homes within these districts. The existing economic literature supports this conclusion, but most studies seem to fall victim to an endogeneity bias since higher value homes are, all else equal, more likely to be included in districts.

We find evidence that the creation of a local historic district, on average, reduces home prices for homes in that district between 11.6 and 15.5%. This indicates that any restrictions implied by the creation of a district outweigh any benefits to homeowners within the district.

Homes near districts, but not in districts, stand to benefit by receiving the augmented public good. Homes in regulated districts, however, may be affected negatively or positively by designation depending on the relative weight of the increased public good provision versus the implicit cost of restrictions on development and renovation.

We must reject the proposed Historic Protection Overlay

We all love the Spruce Park Neighborhood and recognize the value of upholding its character, but the HPO would impose deep reaching policy that would unfairly restrict the rights of property owners. The HPO is not the solution we are looking for.

J Real Estate Finan Econ (2013) 46:543–563

DOI 10.1007/s11146-011-9338-8

Historic Preservation: Preserving Value?

Martin D. Heintzelman · Jason J. Altieri

The creation of historic districts has become a common way to preserve historic buildings and neighborhoods. Advocates of historic districts assume that such districts augment, or at least, protect property values for homes within these districts. The existing economic literature supports this conclusion,

but most studies seem to fall victim to an endogeneity bias since higher value homes are, all else equal, more likely to be included in districts.

We find evidence that the creation of a local historic district, on average, reduces home prices for homes in that district between 11.6 and 15.5%. This indicates that any restrictions implied by the creation of a district outweigh any benefits to homeowners within the district.

Homes near districts, but not in districts, stand to benefit by receiving the augmented public good. Homes in regulated districts, however, may be affected negatively or positively by designation depending on the relative weight of the increased public good provision versus the implicit cost of restrictions on development and renovation.