There is a lot of heated debate over Winter Park residents wanting to designate the Orwin Manor subdivision as a historic district. Having lived in a neighborhood in St. Louis years ago, which became a historic district (Benton Park in the City of Saint Louis), I witnessed first hand the property value increases Richard Reep describes below in his article. But I want to point out that in historic districts, all properties are not designated as ‘contributing’ structures. Historic houses and business buildings which are of age and contribute to the historic character, are each catalogued and registered, but many others exist side by side without restriction to preservation.
Below I have posted Richard Reep’s article, it is offered as his opinion, and not reflective of any opinion or position by the Orlando Foundation for Architecture or the AIA Orlando Chapter.
Property Values
by Richard Reep,
Winter Park’s Historic Preservation Board is considering several changes to the Historic Preservation Ordinances. One change, which is under debate currently in Winter Park, is how historic districts are created. Today, the preservation ordinance has the city creating historic districts at its sole discretion. The ordinance change would allow a district’s residents to vote democratically and become a historic district by majority vote. Today’s high price of land and low interest rates is fueling a lot of tear-downs and new “mcmansion” construction. Many who benefit from this activity are strongly lobbying City Hall, making it unlikely the City of Winter Park would overrule these interests and create a new historic district by decree. They claim “property rights” should not be curtailed with a new regulation.
The problem with this viewpoint is that it overlooks property values. Architectural quality contributes to property values, and overrides property rights. Anyone who intuitively favors historic architecture and thinks that democratic processes should be used to create a new historic district also appreciates that property values is more important than property rights. You can read the full essay about this on my Blog, the references are not included below: http://richardreep.com/property-values
“Winter Park has some property rights which we enjoy, namely, our high quality of community which is reflected in our high assessed value. Even if you live in a mediocre ranch house, it’s worth more than that mediocre ranch house across the border in Casselberry.
Why? Because it’s Winter Park. We paid to get in and we want to preserve our property values, right?
Unfortunately, the debate about historic districts has degenerated into fear mongering and shouting. Those who have a shrill voice scream about their rights, and drown out everyone else. If we don’t all speak up and say “hey we have some rights, too” then what I predicted will come to pass: the historic fabric gets decimated, our quality of life gets diluted, and Winter Park becomes just like everywhere else.
Our property values are higher because we live in a city that has historic character. This historic character has a “spillover” effect onto non-historic properties. Everyone knows this – the realtors, the developers, and especially the newcomers who want to make Winter Park their home. We all bask in this character, at least indirectly.
A new historic district will have a positive effect on property values, this is well documented and beyond argument. Winter Park residents should be suspicious of rhetoric claiming that historic preservation is taking away their property rights, because in reality those shrill voices claiming “property rights” are actually threatening all of us. Worse, these voices are attacking the property values of our children and future generations. By cashing in on current market value, any future higher return is foregone. Their biggest fear is a restriction in perpetuity, i.e. an historic district. This is, in reality, an asset. No historic district in the country ever, ever has been seen as a mistake or waste of money or something to extinguish, so that is a completely false argument. In reality, a historic district will reduce the transaction costs of individual real estate owners by reducing the risk that today’s valuable property will be tomorrow’s loss. It will reduce fluctuation in land values…anyone remember 2010? It is doubtful anyone wants to repeat that year.
The government hasn’t been effective in the slightest in regulating the banking industry so a housing bubble will surely come again, it’s just a matter of when. Do you want to be caught in the freefall of another real estate collapse, or do you want to live in a place that has some assurance that land values are stable?
One analogy is a diamond ring. You wouldn’t pull out and pawn the diamond in your wedding ring, would you? That diamond makes it valuable, the ring is worthless without it. So why would you take a treasure like a neighborhood of historic character and make it temporary, easily extinguishable? The surrounding community would be worthless without it. No one does that.
Another analogy is the farmer’s dilemma. Your orange grove produces profit. You would produce even higher profit if you sold the fruit, and then cut down the trees for firewood. But then you wouldn’t have the trees for fruit in the future, and your profits across a period of time would be less. In fact, they would be zero. Well if you have historic homes, but then un-designate them and demolish them, you are doing the same thing. No one does that.
The last analogy is the radio station. A radio station sets up in an empty storefront on Fairbanks, and starts broadcasting on 91.5 FM. They make a lot of money selling ads but they block another station. The station owner fights it, but the profitable radio station has enough money to hire lawyers and eventually they settle, and the smaller station shuts down. The reason this does NOT happen is because the government regulates the airwaves! Yes, government regulation has some usefulness, and the FCC tells the other radio station to pick a different frequency. Well if developers want to come in and build so badly, the government can tell them where to buy up the dirt – west of 17-92, for example, would be a really good start…or along Fairbanks between Orange and Edgewater. Government should have some backbone here.
So if your property values are important, fight for the right of Winter Park’s citizens to democratically vote for historic district status. If you are conservative by nature, then your desire to conserve property values, reduce the volatility of transaction costs, and make Winter Park’s real estate a stable asset for future generations should lead you to this conclusion.
This is not the normal argument I would make for historic district status. Basically, if I have to choose quality over quantity, I choose quality. What I see, however, is too much irrational rhetoric and too little reasoned analysis of the case. This irrational rhetoric ignores the real economics of this issue laid out by the three gentlemen above, and recognized by economists today as the real world in which we live. I trust that this is a thoughtful contribution to the ongoing discussion about Winter Park’s shared vision.”
Richard Reep is an award-winning Architect and Artist with an international following. His architectural practice is centered around hospitality-driven mixed use. Mr. Reep serves as Adjunct Professor teaching design – art, architectural, and urban design – at a variety of institutions. He has taught at University of Florida, Rollins College, and served as guest lecturer at numerous institutions. Mr. Reep serves as art and architectural critic for the Orlando Weekly. His articles have been featured in the Orlando Sentinel, On View Magazine, In Progress Magazine, Planetizen, and Florida Architect. He has been cited in The Economist magazine, Women\’s Wear Daily, The Next Hundred Million by Dr. Joel Kotkin, and is Contributing Editor to The New Geography.