ECONOMICS UNIQUENESS

HERITAGE CONSERVATION AND PROPERTY VALUES ■ 129
• Private owners begin to mirror the public sector and invest less in property
maintenance; little new investment takes place.
• Lower levels of maintenance and reinvestment in center-city property lead to
higher vacancy rates, lower rents, and ultimately lower values.
• By this point, social issues such as public safety concerns arise, hastening the
departure of once-stable businesses and many of the remaining middle-class
families.
• Regardless of local systems of taxation—real estate taxes, sales (value added)
taxes, business license fees, building permit fees, and income taxes—revenues
to the public sector decline, leaving even fewer resources to devote to the area.
• At this stage of the process, there is a shift from owner occupancy (whether as
resident or business operator) to tenant occupancy. Th is is oft en accompanied
by a pattern of absentee owners who are usually less accountable for basic
property maintenance.
• At a point when value declines are suffi ciently deep, some property owners
will simply walk away from the property or go into default. Land title and
ownership rights become increasingly unclear and the number of non-paying,
oft en illegal, occupants increases.
• As a result, the neighborhood or the former commercial district has become
almost exclusively home to lower-income households or informal businesses.
Rarely does the decline cycle automatically reverse itself. In fact it is oft en
exacerbated by public policies that may include reduced allocation of resources
for housing, transportation, education, healthcare, recreation, taxation, infrastructure
investment, or other needs. Such policies actually encourage eff ective
abandonment of the center city and older residential neighborhoods. While
many of the underlying causes of this cycle of decline may be social, the most
visible economic eff ect of the decline is on real estate.
Social and real estate –related economic conditions are at the core of a public
policy decision to use the built heritage areas as the focus for downtown
regeneration. Th is represents a sea change from earlier generations’ approach to
heritage conservation, in which the protection of historic buildings was an end
in itself—saving one or more iconic buildings for their own sake. Increasingly,
cities are adopting a strategic approach that employs preservation management
and heritage conservation not as ends in themselves but as the means for broader
development outcomes, specifi cally for attracting the return of middle-class families
and businesses to downtown areas. In this approach, heritage designation
is pursued as just one part of the eff ort to renew and rebuild an area. Research
fi ndings suggest that heritage designation is oft en a key element underpinning
the innovative urban renewal schemes, helping to promote increased rents and
property values. However, as has been noted in this chapter, the historic centers