12 Economic Benefits of Historic Preservation

1. Rehab Costs are Roughly the Same as New Construction
  • If no demolition is required, a major rehabilitation will cost between 12% less and 9% more than new construction.
  • If constructing a new building requires demolition of a significant existing structure, the cost savings from rehabilitation will be between 3% and 16%.
  • Life spans for new buildings are often 30-40 years versus more than 100 years for most historic structures.
2. Historic Preservation Creates Jobs
  • In a new construction, the project can be broken down into 50% labor and 50% materials. In a typical rehabilitation project, 70% of the total cost is labor.
  • Laborers are almost always hired locally. In turn, they spend their money locally, supporting the local economy.
  • A California study found that rehabilitation resulted in 10% greater wholesale purchases and 43% greater retail purchases from suppliers than the same amount spent on new construction activity.
  • $1 million spent on building rehabilitation creates:
    • 12 more jobs than $1 million spent on manufacturing in Michigan
    • 20 more jobs than $1 million spent mining coal in West Virginia
    • 29 more jobs than $1 million spent pumping oil in Oklahoma
    • 22 more jobs than $1 million spent cutting timber in Oregon
    • 25% more construction jobs than highways and streets 
3. Historic Preservation Increases Property Values
  • In a study of National Register districts in Philadelphia, homes in historic districts received a sales price premium of 131% over comparable properties in undesignated neighborhoods.
  • A study of 9 Texas cities found that local designation increased property values from between 5% and 20%.
4. Historic Preservation Conserves Resources
  • Approximately 25% of the material being added to the landfills is demolition and construction waste.
  • Demolishing one typical two-story commercial building on Main Street eliminates all of the environmental benefits of recycling 1,344,000 aluminum cans.
  • Historic buildings contain significant embodied energy. That's the amount of energy associated with extracting, processing, manufacturing, transporting, and assembling building materials. To put it into perspective, 8 bricks in a wall have the embodied energy of the equivalent of 1 gallon of gasoline.
5. Historic Preservation Uses Existing Public Investments
  • Every community has significant investments in public infrastructure, including roads, sewers, parks, and schools.
  • Historic preservation directs development to places where infrastructure is already in place.
  • Rehabilitating historic schools instead of building new saves money for education and often creates a better learning environment.
6. Historic Preservation Supports Small Businesses
  • 75% of all net new jobs in the U.S. are created by small businesses.
  • Older buildings make ideal locations for small, independent businesses and for start-ups.
  • $.60 of every dollar spent at independent businesses remains in the local economy versus less than 10 cents at national discounters.
7. Historic Preservation Revitalizes Main Street
From 1980 to December 31, 2011, local Main Street programs have:
  • Stimulated $53.6 billion in total private and public investment
  • Rehabilitated 229,164 buildings
  • Created 104,961 net new businesses
  • Generated 448,835 new jobs
  • Generated a reinvestment ratio of $18 to $1 per community*
*The average number of dollars generated in each community for each dollar used to operate the local Main Street program.
 
8. Historic Preservation Attracts Investment

"In economics, it is the differentiated product that commands a high premium.  If in the long run we want to attract capital, to attract investment in our communities, we must differentiate them from anywhere else."

 - Donovan Rypkema                        

9. Historic Preservation Attracts Visitors
  • Heritage Tourism increased 13% between 1996 and 2002, more than twice the growth of travel overall (5.6%).
  • Heritage Tourism travelers spend more money and stay longer than regular tourists.
  • Heritage tourists spend, on average, $623 per trip compared to $457 for all U.S. travelers.
  • Heritage tourists stay, on average, 5.2 nights away from home as compared to 3.4 nights for other travelers.
  • Heritage tourists are more likely to dine in local restaurants and shop in local stores, bringing money into the local economy.
  • Heritage tourists are more likely to return for another visit.
10. Historic Preservation Prevents Sprawl
  • Saving historic buildings and keeping our towns and cities healthy reduces the pressure to pave the countryside.
  • In 1970, the state of Maine spent $8.7 million to bus students to and from school. By 1995, with fewer students, the cost had risen to $54 million.
  • When we reinvest in older neighborhoods, we are reinvesting in inherently sustainable communities that are generally dense, walkable, transit-accessible, and feature mixed-uses.
11. Historic Preservation Creates Affordable Housing
  • To replace the current housing units occupied by lower income residents would cost $335 billion.
  • In 2005, 1,101 units of affordable housing were created in historic buildings using the federal historic rehabilitation tax credits.
  • Historic structures are often located close to services and public transportation, reducing transportation costs for residents.
12. Historic Preservation is Good Economic Development
In Nebraska, historic preservation generates $170 million per year:
  • Between 2001 and 2005, an estimated total of $1.5 billion was spent on the rehabilitation of buildings.
  • 22 jobs are created for every $1 million spent on historic preservation, which supported 3,869 jobs in the state in 2009.
  • Historic designation of neighborhoods and downtown areas enhances and protects property values. Of the districts studied, property values as a whole showed increases in historic districts.