The Economics of Historic Preservation

The economic costs and benefits of historic preservation are the subject of persistent and urgent questioning in public debates. Whenever historic preservation comes up in public discourse, it seems, economic arguments figure prominently. Sometimes the discussion is about whether historic preservation has some economic value, and the answer generally is “yes.” And sometimes the tougher questions are ventured: does historic preservation of a certain site have more economic value than an alternative investment might have? What are the costs and benefits of regulation? Is preservation an effective way to stimulate economic development? 

These are fundamentally difficult and tricky questions to study. Historic preservation is organized primarily to sustain and create cultural values, like historical associations, senses of place, cultural symbolism, the aesthetic and artistic qualities of architecture, and the like. Studying the economics of this (or any other part of the cultural sector) amounts to calculating the incalculable, or pricing the priceless. Economic analyses can easily determine partial or proxy values for the full value of historic preservation, but what do these tell us? Are they sufficient or even useful? 

A growing number of studies and research projects take on issues in this realm of understanding the economic values of historic preservation. The specific kinds of questions and themes addressed include: Justification of public policies and other investments (especially rehabilitation tax credits); rationales for advocating preservation over new construction; rationales for promoting generally conservative approaches to managing the built environment (falling under the rubrics of “sustainability” or “smart growth”); justifying material support for preservation as an expression of culture (in which a lot of the questioning is identical to that plaguing the arts and culture sectors in general, whether the topic is funding for museums, art, music, or other forms); and how to use economic analysis to inform management decisions for historic preservation sites and programs. 

The historic preservation field suffers, in general, from an absence of an intellectual and research infrastructure to support the full range of activities and debates that define the contemporary preservation field. There is an excellent research infrastructure supporting the work of physical science and material conservation aspects of the field; there is less in the area of historic and cultural aspects of the field; there is almost none in the realm of social sciences, including economics. 

Of the research that has been done on the economics of preservation, much of it is done by economists or other analysts who work outside of the preservation field, but are sympathetic to it.

Such work tends to be less focused on the core ideas behind historic preservation—such as cultural significance, or the historical and aesthetic values of the built environment—and more interested in the measurable, often subsidiary benefits which are expressible as market values. This body of research is varied and seemingly incommensurable, and too little synthesis has been attempted to interpret the greater meaning of this work. There is a growing, multi-faceted effort to undertake more research and advocacy in the area of economics and historic preservation, and this paper intends to urge this work onwards and inform future directions.


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