ULI Triangle News

Historic Preservation as an Engine for Urban Renaissance

By: Trisha L. Hasch, Urban Planner, City of Raleigh

“After years of steady growth, Raleigh is receiving significant national attention as evident in the regular accolades bestowed on the city,” says Donovan Rypkema, principal of PlaceEconomics, a Washington, DC based real estate and economic development consulting firm. Mr. Rypkema presented at the ULI roundtable on September 9, 2014 to highlight the economic, social, and quality of life attributes of historic preservation. The forum sought to flesh out what exactly is the role of historic preservation in the ongoing revitalization of the Triangle’s downtowns and how developers can leverage the investments made in historic properties to realize an impact of new jobs, new business, and increased property values. Mr. Rypkema was joined by panelists Greg Hatem, President, Empire Properties and Gary Kueber, CEO, Scientific Properties. The session was moderated by David Diaz, Executive Director, Downtown Raleigh Alliance.

historic1The forum was held at the Stockroom at 230 on Fayetteville Street in Downtown Raleigh. This place has special relevance to the talk as a prime example of adaptive reuse of a historic building, in this case, the Carolina Trust Building, constructed in 1902.  Having been in little use since the 1950s, today the building is filled with active uses including offices and spaces for meetings, wedding receptions, and other social gatherings – all contributing to the City’s tax base. This building and approximately 400 others in the Triangle use historic integrity and character as a main draw for citizens, workers, business owners, and national and international visitors contributing mightily to the region’s economic health and long-term sustainability.

In the case of Raleigh, highlighted during the talk, historic preservation is at the heart of Designing a 21st Century city. Historic resources and preservation efforts have contributed to Raleigh’s success as a growing metropolis. From the green squares of the early capital city to streetcar suburbs to modernist neighborhoods, historic fabric helps to make Raleigh a distinctive city for living, working, and playing. The city’s 2030 Comprehensive Plan, adopted in 2009, amended in 2014 and currently undergoing a 5-year update, focuses on historic2increasing density and bringing jobs back downtown after decades of population growth outside the urban core. As Don mentioned, the report utilizes a wide range of indicators to quantify how Raleigh’s historic buildings and districts help to achieve each of the Plan themes highlighted below: from jobs and businesses to diverse, affordable housing options to sustainable development to compact, walkable neighborhoods.

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Raleigh’s historic resources are classified in three ways: (1) the city holds six locally designated historic districts (Historic Overlay Districts) and (2) 156 Raleigh Historic Landmarks. (3) Raleigh also holds 23 National Register historic districts, which are areas that have been designated as being historically significant, but not locally regulated. Contributing income-producing properties in National Register districts are eligible for Federal Historic Rehabilitation Tax Credits, a significant incentive in both large and small rehabilitation projects.

As an example: Downtown Raleigh is a great place to live and work. Stats from Don’s talk: Commercial areas and neighborhoods that contain a mix of new and older smaller buildings, like downtown Raleigh, support greater levels of positive economic and social activity than areas dominated by newer, larger buildings. Older smaller buildings provide space for a strong local economy. Smaller buildings in close proximity generate lots of foot traffic, which benefits local businesses. For example, the Fayetteville Street National Register historic district sees nearly 34,000 pedestrians during an average day’s lunchtime (Downtown Raleigh Alliance pedestrian count 2014). The creative economy thrives in older, mixed-use neighborhoods. Local historic districts contain an above average share of creative jobs: 4.2 percent, compared to 2.2 percent in the entire city. Older business districts provide affordable, flexible space for entrepreneurs from all backgrounds. Two-thirds of new businesses in downtown Raleigh in 2013 choose historic and other older buildings for their location. Older commercial and mixed-use districts contain hidden density. This is true both for residences and businesses. On the commercial side, Raleigh’s historic districts average 5 jobs per acre. This may not sound like much, but it is twice the city’s average of 2.4 jobs per acre. Young people love older buildings. According to the 2014 State of Downtown Raleigh Report, the median age of a downtown area resident is 30. Younger people are also attracted to older buildings as a place to work: over 22 percent of employees in historic districts are age 29 or younger. Nightlife is most alive on streets with a diverse range of building ages. Raleigh areas bear this finding out as well. For example, the nightlife in the Glenwood South District accounted for over 17,000 pedestrians between 8pm and 2am (Downtown Raleigh Alliance 2014 State of Downtown).

Affordability

Across the city, residential properties in historic districts have a range of affordability. While many historic districts have residential per-square-foot prices that are higher than the city average, per-square-foot prices in one third of historic districts are lower than the average. This variety, combined with a broad spread of unit sizes, makes historic districts a good fit for both lower- and higher-income households.

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Walking

Raleigh’s local historic districts represent some of the most walkable parts of the city. Walk Score is a widely recognized rating system for gauging walkability with assigned scores from 1-100. Raleigh’s historic districts average a 73 walk score. Conversely, the city of Raleigh has an average Walk Score of 29, meaning that most neighborhoods are car-dependent. Walk scores also increase property values. Research shows that a 10-point increase in walkability increases property values by 1 to 9 percent. Walkability is also associated with lower capitalization rates and expectations of less risk, making compact, walkable historic neighborhoods a good investment decision.

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Density

Raleigh’s historic districts provide density at a human scale. Residential density in historic districts is 4,647 people per square mile – nearly double the city’s average of 2,528 residents per square mile. Local historic districts are even denser, with 5,458 residents per square mile. Density is often promoted for its contribution to the ability of a city to deliver services, including public transportation, effectively.

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There are sizable fiscal consequences of density. See below for a comparison of two Raleigh neighborhoods of approximately the same size: Oakwood (a local historic district) and Reedham Oaks/Wyndham) a subdivision built in the early 1990s.

Oakwood Reedham Oaks/Wyndham
Population 1664 507
Size 114.5 114.0
Housing Units 794 127
Average of Construction 1925 1992
Average Size of House 2473 3515
Average Value $315,004 $524,077
Taxes per Unit $2,887 $4,805
Population per Acre 14.5 4.4
Square Feet of Road per Unit 1045 2209
Taxes per Acre $22,022 $5,531
Water/Sewer Line per Person (linear feet) 33 49
Water/Sewer Line Replacement Cost per Unit $8,811 $24,781
Annual Property Taxes $2,292,539 $610,068

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Tax credit implications

Incentives are for community building. In other words, historic preservation is the primary way to keep the fabric of the community intact. A building restored affects the surrounding area and sets a pattern for the evolution of an entire area. A prime example is Hargett Street in Downtown Raleigh, home to a variety of buildings in acute disrepair and abandonment 10 years ago. Today the street is home to restaurants, retail, offices and is a hotspot for 1st Friday activities. Its preservation has spurred development throughout downtown and ramifications include new business development, relocation of business, and the attraction of various populations to work, live and enjoy downtown. In East Durham, Liberty Warehouse, presented another opportunity to enhance the community for the long haul. The 200,000 square foot tobacco warehouse was slated for demolition, but developers and the community are working together to preserve aspects of the building in tribute to the context of history in the neighborhood. Another signature historic preservation project is the fully restored, green Golden Belt—one of Durham’s last historic textile mills to be creatively reused. It draws dense arts energy to downtown Durham with artist studios, live/work loft apartments, offices, restaurants, retail, live music, events, and more. According to a recent report, The Golden Belt Neighborhood is ‘alive again’ with an active neighborhood association and restored historic homes. The area is Durham’s up-and-coming historic district.  In the past, North Carolina led the nation in manifesting incentives. The legislature understands the ‘but for’ of tax credits and the disservice their elimination creates for communities across the state. Unfortunately, its good ideology of tax reform is harming its economic development efforts that historic preservation provides.

For more information: Designing a 21st Century City: Historic Preservation and the Raleigh of Tomorrow prepared and written by Donovan Rypkema, Briana Paxton, and Cara Berton of PlaceEconomics with support from City of Raleigh and Wake County staff. The publication is available on line at www.RHDC.org  Charts and graphs in this article are from the draft version of the document.

Download the Historic Preservation presentation

Trisha L. Hasch, Urban Planner, City of Raleigh

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