Supporting History

The Economic Benefits of Historic Preservation

June, 2002

Most people already know why historic preservation is a good idea. Some people believe that preserving the American heritage is patriotic. Others feel that restoring existing buildings (rather than building new ones) is environmentally responsible. And others think that preserving the architectural record of our culture gives a sense of constancy and community in such quickly changing times.

But until now, preservationists in Colorado haven't had quantifiable - real dollars and cents - evidence to prove how historic preservation is also a powerful economic engine. That's all changed with the release of a new report entitled "The Economic Benefits of Historic Preservation".

Funded by a grant from the State Historical Fund, the Colorado Historical Foundation hired a consulting team to conduct a study about the economic impacts of historic preservation in Colorado over the past twenty years. Clarion Associates of Colorado, a land-use and real estate consulting firm led the consulting team. Other team members included BBC Research & Consulting and Place Economics of Washington, D.C. The consultants looked at a number of economic indicators and gathered data about both direct and indirect dollars contributed to the state's economy through historic preservation efforts.

The results were surprising. But, even more surprising than the huge dollar amounts generated by various preservation activities was the fact that this study only touched the tip of the economic iceberg! This project was conservative and focused on only a few selected economic activities. It did not venture into such economically significant activities as lodging taxes generated in historic hotels, historic building rehabilitations that used solely private dollars, and the value of the work of thousands of dedicated historic preservation volunteers on local preservation boards.

Even as conservative as the study was, consider these numbers! From a statewide perspective, economic activity triggered by rehabilitation of historic buildings and heritage tourism generated a powerful impact on the economy. Following is a short summary of some of the economic benefits of historic preservation in Colorado:

Rehabilitation of historic buildings: The rehabilitation of historic buildings put $1.5 billion dollars into the state's economy over the past twenty years, creating 21, 327 jobs that generated $522.7 million in household earnings.

Heritage Tourism: Heritage tourists are defined as travelers that incorporate at least one visit to a historic site or landmark, or visitors whose primary reason for traveling is to visit historic places. Those tourists made 4.6 million trips to Colorado in 1999. In that year alone, those trips generated a total of $3.1 billion for the state economy. It should be noted that heritage tourists typically spend more and stay longer than other types of tourists.

Rural Preservation: By promoting reinvestment and revitalization of existing resources, historic preservation can help counter the effects of both sprawl and disinvestment. The economic benefits of rural preservation were difficult to quantify, so no dollar amounts were measured. However, it is clear that the benefits of programs like the Certified Local Governments program, the National Trust for Historic Preservation's Main Street program, and the National Trust's Barn Again! program provide valuable preservation assistance to rural communities.

The study uncovered great news for individual historic property owners and communities. Finally, the myth that historic designation decreases property values and supports gentrification is put to rest!

Property Values: The study found that residential property values in historically designated areas increased or stayed the same as those values in nearby, undesignated areas. None of the case study areas showed any decrease in property values after historic designation.

Affordable Housing: Additionally, though some critics of historic preservation worry that preservation can lead to gentrification of an area by pricing out low- and moderate income households, the study found that the proportion of those residents remained high in historic areas. In fact, historic districts comprise some of Colorado's most economically diverse neighborhoods, making them interesting, pleasant, and valuable places to live.

Financial Incentives for Preservation: Several financial incentives exist for buildings with historic designation. Depending upon the level of designation -- local, state, or national level -- a designated building may be eligible for tax credits, grants, or special loans. Call SHF Technical Advisors at (303) 866-2825 for more information.

For the full story, obtain a copy of the study by visiting www.cohf.org or calling the Office of Archaeology and Historic Preservation at (303) 866-3395.