ECONOMICS UNIQUENESS

HERITAGE CONSERVATION AND PROPERTY VALUES ■ 109
or political system, there is some basic concept of property rights that applies
to real estate. It is within this property rights and public policy framework that
heritage designation is applied.
Other chapters in the book discuss the principle that total economic value is
made up of both use and non-use values. Within that framework, use value is
further divided into direct use value (providing, for example, income, residential
and commercial space, and industrial space) and indirect use value (contributing
to environmental and aesthetic quality, national identity, community image and
self-esteem, and social interaction). Th is chapter will focus exclusively on direct
use value. It is the direct use value that is most apparent in the actions of the
marketplace—by buyers and sellers, landlords, and tenants.
Th at is not to say that direct use benefi ts are more important than indirect
benefi ts, or that the use values of heritage buildings are more important than
their non-use values. And it is critical to understand that total economic value is
the use value plus non-use values.
Th is chapter, in focusing on direct use values, will address fi ve basic questions:
1. What is the meaning, and impact, of heritage designation?
2. How do researchers measure value change in the marketplace?
3. How does heritage designation infl uence the value of aff ected buildings?
4. Why is the marketplace willing to pay a premium for heritage properties?
5. How does a premium for heritage properties aff ect low-income households?
What Is the Meaning and Impact of
Heritage Designation?
Why do cities and countries around the world designate and, through designation,
protect historic properties? According to Robert Stipe (Stipe 1983), there are
seven reasons, paraphrased here:
• Historic resources physically link us to our past;
• We save our architectural heritage because we have lived with it and it has
become part of our reference and identity;
• Because we live in an age of rapid communication and technological transformations,
in the face of the ensuing homogeneity, we strive to maintain
diff erence and uniqueness;
• Historic sites and structures relate to past events, eras, movements, and
persons that we feel are important to honor and understand;
• We seek to preserve the architecture and cultural landscapes of the past simply
because of their intrinsic value as art;