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The Internal and External Impact of Historical Designation on Property Values

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Abstract

Designation of historic properties and historic districts is increasingly used as a means to revive central-city neighborhoods and to promote urban economic development. While preservation activities are thought to generate positive externalities for surrounding neighborhoods, these external effects have been difficult to quantify. Using a database of tax-appraisal records for residential properties in Abilene, Texas, this study demonstrates that there are significant, positive externalities associated with historic designation. We perform simple cost-benefit calculations and find that the internal and external benefits more than outweigh the (nonzero) costs associated with historical designation. Moreover, from the city of Abilene's perspective the property-tax incentives provided to historic reinvestment are outweighed by the added property-tax revenue created by the increased value.

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Authors and Affiliations

  1. Department of Economics, The Pennsylvania State University, University Park, PA, 16802

    N. Edward Coulson

  2. Department of Geography and Center for Urban Policy Research, Rutgers University, New Brunswick, NJ, 08901

    Robin M. Leichenko

Authors
  1. N. Edward Coulson
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  2. Robin M. Leichenko
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Coulson, N.E., Leichenko, R.M. The Internal and External Impact of Historical Designation on Property Values. The Journal of Real Estate Finance and Economics 23, 113–124 (2001). https://doi.org/10.1023/A:1011120908836

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  • DOI: https://doi.org/10.1023/A:1011120908836

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