Do Local Historic Districts Protect Property Values?
People often ask, what are the benefits of owning property in a historic district? Historic preservationists often answer that the appearance of the neighborhood is protected and thus, the "quality of life" is preserved.
Now it has been shown that local historic districts also protect property values. A study recently released by the Connecticut Trust for Historic Preservation, entitled "Connecticut Local Historic Districts and Property Values" has demonstrated this. The study was conducted by PlaceEconomics, a real estate and economic development consulting firm located in Washington, DC.
Six historic districts in four Connecticut towns were selected for the study, Canton, Windsor, Norwich and Milford. The towns were selected on the basis of their geographic location and demographics. Property values were compared between the most recent revaluation and the previous revaluation, either five or six years earlier. The percentage of change in value within the historic districts was compared with that of properties outside the districts.
There was no evidence that property values decreased within a historic district. Instead, values in each historic district increased between 4% and 19%. In three out of four of the towns, the properties within the historic districts increased at a greater rate than similar properties outside the districts. The exception was Norwich, where the difference appears to be demographic: this town has a lower median household income and a lower rate of home ownership. Also one of Norwich's historic districts has a higher number of commercial and multifamily properties.
In Milford, the South of the Green Historic District was not included in the study because it was established in 2007 and thus has not been in existence long enough. While the increase in value of properties within the Milford Historic District (North Street area) was greater than those outside the district, the difference was less than one percent. The persons conducting the study wondered why this was so until Assessor Daniel Thomas pointed out that there had been a great demand for shorefront properties in the earlier half of the decade resulting in a significant increase in value for those properties, generally about 25% per year. Milford's historic district does not have any shorefront properties, so, if these were taken out of consideration, the values within the historic district did indeed rise at a more significant rate than those of similar properties outside the district.
This is only a brief summary. To see the complete study, go to the Conn. Historic District website and click on "Documents." Then click on "Property Values LHD 2011.pdf."