Commission members should be aware of historic preservation's economic benefits to cities and communities. Dozens of studies conducted nationwide in recent decades have demonstrated that historic preservation is an economically sound, fiscally responsible, and cost-effective strategy that produces visible and measurable economic benefits to communities. In short, historic preservation makes good economic sense.

Tax Savings

In addition to the most obvious benefit of enhancing the surrounding physical environment, how can the rehabilitation and preservation of older buildings help a community? Between 2001 and 2005, the Wisconsin Historical Society assisted property owners with $28 million of rehabilitation work on historic homes, leading to $7 million of state tax savings. During these years, the state also recorded $254 million of economic activity in the rehabilitation of income-producing historic buildings.

These tax credits amounted to $50 million in federal tax savings and $13 million in state tax savings for Wisconsin residents. These economic impacts have a ripple effect throughout local economies and promote additional investment and tourism.

Increased Property Values 

Our houses often represent our largest economic asset, and we all want this asset to improve in value. Historic district designation and the use of design review guidelines help to ensure that our investment in a historic area will be protected — from inappropriate new construction, misguided remodeling, or demolition. Studies have shown that over time, property valuation in historic districts tends to increase, sometimes dramatically. No evidence suggests that historic designation and the use of design guidelines lowers property values.

Numerous studies across the country have shown that property values in designated National Register or local historic districts generally increase at a more rapid rate than the market. One example is a four-year study conducted during the 1990s in Knoxville, Tennessee, that compared house sale prices in three similar neighborhoods with varying historical designations. Over the four-year period, the neighborhood with both a local and a National Register designation had increased sale prices of 157%. The second neighborhood, which had National Register status but no local historic zoning, had increased sale prices of 36%. Property values in the neighborhood without any historical zoning or recognition increased by only 20% during the same period.

Locally designated districts protect the composite or overall economic value of a historic area. Every building or parcel in a historic area is influenced by the actions of its neighbors. Every decision one property owner makes has an impact on the property values of another. Design guidelines provide a level playing field for all property owners because they apply equally to everyone in a historic area. Therefore, all property owners' rights are protected from the adverse economic impact that could result from the actions of others. Historic designation and design review not only benefits existing residents of a neighborhood, but it often attracts new buyers who know their investment will be protected.

Enhanced Livability

Quality of life is a key ingredient in most of today's economic decisions. Historic preservation is important because healthy downtowns and neighborhoods reflect a community's self-image. Companies planning to relocate will often consider the economic and physical health of the downtown in their decision-making process. Consider these points:

• More than any other man-made element, historic buildings differentiate one community from all others. Any community can duplicate your community's water lines, industrial park, shopping mall, or tax rate. No community can duplicate your historic resources.
• Many quality-of-life activities—museums, theaters, and libraries—are located in historic buildings and in downtown areas.
• The quality of historic buildings says much about a community's self-image. A community's commitment to itself is a prerequisite for nearly all quality-of-life elements.
• Historic preservation can lead to revitalized commercial areas, and commercial areas that are more active and lively also generally increase safety and diversity.
• Quality-of-life issues and the livability of a community are important factors to Baby Boomers, who make up the largest percentage of the U.S. population and have the highest median household incomes. Baby Boomers typically have an interest in culture and heritage and tend to enjoy entertainment venues, walkable streets, and other aspects commonly associated with preservation.
• Many Baby Boomers in the coming years will be downsizing and choosing urban lifestyles for dining, arts and culture, and convenience. A large number of Boomers don't want to be tied to the car in suburbia. As a result, demand will increase for housing in our downtown areas. Many downtowns are already seeing a surge in conversions of upper floor areas for loft apartments and condos.

• Community Benefits of Preservation
• The Economics of Preservation: Tourism and Jobs