ECONOMICS UNIQUENESS

114 ■ THE ECONOMICS OF UNIQUENESS
• Amount of investment in buildings in the designated area;
• Condition of heritage buildings in the area and change in condition over time 2 ;
• Increasing frequency of sales; even if actual sales prices are not available, this
is a good indicator of increased interest (and subsequently value) of a heritage
area; and
• Information about how long a property remains on the market before being
sold; although oft en diffi cult to obtain, this indicates the depth of demand for
properties in the area.
But collecting usable data is just the fi rst step. Th en the question becomes,
“What is it that should be looked at?” It is important to recognize that data
itself in this context are relatively useless; they only become useful when some
comparison is made. Depending on the availability of data and the specifi cs
of the particular situation, there are several approaches to using the data for
analysis, ranging from the very simple to the relatively complex. Below is a
range of those approaches. In each case an appropriate unit of comparison
should be used, for instance adopting U.S. dollars per square foot or euros per
square meter.
• Simple value comparison. What is the diff erence in value between a property
located in a heritage district and a similar property not in the district?
• Before and aft er designation. What was the average value of houses in the
neighborhood before historic designation and aft er historic designation?
• Appreciation compared to the local market. At what rate did properties in the
historic district appreciate (or decline in value) over time and how does that
value change compare with that of properties in the local market that are not
in a historic district?
• Appreciation compared to a similar neighborhood. At what rate did properties
in the historic district appreciate (or decline in value) over time and how does
that value change compare with that of properties in a similar neighborhood
that is not a historic districts?
• Resales of the same property. If a property sold more than once during the
study period, what was the value change and how does that value change compare
to the appreciation rates for non-designated property? 3
For commercial properties, the same approaches listed above can be used if
there are suffi cient sales data. If not, however, the same comparisons can be made
using rents rather than sales.
Th e most elaborate analysis that has been used in heritage property value
studies is known as hedonic pricing. Th is method attempts to identify the
individual components of a property and each component’s contribution to
the overall property value. A study of historic neighborhoods in San Diego,