ECONOMICS UNIQUENESS

HERITAGE CONSERVATION AND PROPERTY VALUES ■ 139
social, educational, and environmental value, they can also have signifi cant
economic value.
Using tools and techniques from traditional real estate valuation approaches
as well as methodologies from environmental economics, analysts around
the world have begun to evaluate the impact of heritage designation and its
accompanying regulations and restrictions on real estate values. Approaches
vary from answering a relatively simple query—“What is the value per square
foot of properties within historic districts as compared to values within the
same city not within a district?”—to more complex hedonic pricing approaches,
such as using linear regression to isolate the contributory value of heritage listing
aft er all other variables have been accounted for.
A growing body of research fi ndings, based on studies of international examples,
consistently demonstrates that heritage conservation pays. And the most
straightforward evidence that heritage pays is the willingness of buyers not just to
pay for heritage properties, but to pay extra for them.
Th is commonly found economic premium has a multitude of public policy
implications. Rising property values will oft en mean increased revenues for
local governments, a greater willingness of fi nancial institutions to make loans, a
greater likelihood of private-sector investment, and fewer heritage buildings lost
to demolition by inaction and neglect.
At the same time, rapidly rising property values oft en mean higher prices for
vacant land, resulting (when there is no, or not enough, protection for heritage
buildings) in demolition of smaller historic buildings to make room to erect larger
new structures. Th e other consequence of rising property values is the potential
adverse eff ect on low-income households, particularly renters, who may suff er
displacement due to the economic as well as social changes. It is important, therefore,
to identify early on strategies to mitigate the threats both to existing buildings
and to long-term residents.
Heritage monuments and historic districts need periodic and oft en substantial
reinvestment in infrastructure upgrades, preservation management,
and conservation works so that these places may contribute to regenerating
the economic, cultural, and social life of city centers. Furthermore, heritage
buildings—which form the core of historic city centers—incorporate aesthetic,
cultural, social, environmental, and educational values that must be
passed on to future generations. Th ese buildings are a unique endowment,
but also a steadily diminishing resource—in some cases even at risk of disappearing.
To counter the possible irreversible loss of heritage buildings and the
non-economic values they hold, heritage buildings need to have economic
value today.
Along with robust commitments of public and/or third-sector 8 funds for
the care and continuance of heritage places, investments are also going to have