The National Registry of Historic Places has grown over the years and today includes entire historic districts and thousands of individual properties, as well as national and federal properties.
Listing on the Registry is the final step in the process of evaluating and documenting historic properties.
State offices also have their own links. These can be found by using your search engine and typing the keywords historic preservation and the name of the state. Typically a state site offers not only listings of properties and districts, but also special statewide policies or benefits, such as tax credits.
What Makes a Property Historic?
Obviously, not all old, odd or unique properties qualify as being historic.
While the Appraiser may need to obtain the counsel of a professional in the area, such as an architectural historian, a solid foundation in what makes a property historical is essential. But we can say this: "If the property is listed on the National Register of Historic Places or on a state or local registry, then by the fact of being listed, it is a historic property."
Major Categories of Historic Properties
There are three major categories that will cover current thinking in the preservation movement.
First, historic properties are those associated with individuals or events that were significant in the founding of our country.
Second, those buildings that demonstrates styles, engineering or building construction.
And third, properties that are expressive of a particular culture, a particular place or period. These properties can be very old or rare, or can be not so rare, but represent more recent events or individuals.
Benefits and Cost of Historic Properties
Owning historic property provides benefits and/or penalties that do not accrue with the typical property. These costs and benefits can affect market value of the properties. They originate from several sources and include public policy at various levels in the government, market reaction to historic property, and finally, the additional cost of maintaining and/or restoring the property.
Federal incentives have fluctuated with the various administrations over the years and continue to change today. Local governments, private organizations and others provide grants for the purchase, restoration and maintenance of historic properties in various areas across the country.
Today, tax incentives at the state and local levels are the most consistent form of benefit. These can take the form of a tax moratorium which eliminates all tax for a period of time, tax abatement which reduces or defers taxes for a specified period of time, a tax freeze which precludes tax increases over a specified period of time, and tax credits in which a portion of the cost of restoration, maintenance etc, is deducted from the actual tax bill.
Other benefits that are common today are low interest loans for restoration, guaranteed loans, relief from local taxes, exemption from zoning and building code regulations.
Cost for restoring and maintaining historic properties is considerably higher than the remodeling/renovating of the typical, modern building. Restoration can involve historic engineers and specialized craftsman trained in building techniques of the period. Many historic homes were constructed of wood, which is subject to fire, termites, mildew and mold. Wood must be painted and maintained year after year. In many areas, local policies dictate not only type of paint used, but color as well! Violation of ordinances relating to historic properties has resulted in conflicts, litigation and fines.
Many historic properties cannot meet the demands of the economy in a particular area, such as the availability of parking decks or a poor floor plan. Old warehouses, while qualifying as a historic property, may be located in areas where an adaptive use is impractical. The large mansion that was once the main house of a large acreage estate, might be renovated and used as an office building, but is now located in the middle of an industrial area, violating the principle of highest and best use.
Another matter that must be addressed by the appraiser is the cost of rehabilitation or adapting the existing improvements to meet demand. In most cases, the rehabilitation project has high front-end cost involving engineering and other technical consults. Also, the degree of the rehab must be considered. Determining which parts will be reproduced, which will be repaired, left as is, or removed will determine the cost of the project.
Buildings may represent several architectural style or periods, as the improvements were maintained over the years. The bottom line is, can the building be renovated economically to provide the utility and condition that will be required in the adaptive use. The principle of "form follows function" which is used in modern construction and development, must be applied in the opposite manner here. Since the building exist, the adaptive uses must be addressed to determine what functions the building can accommodate if rehabilitation is carried out.
In summation, as in any venture, the cost must be supported by the intended use. If the potential uses are limited, the cost may be prohibitive, even for an adaptive use.
Market Value of Historic Properties
Market Value, by definition, is dependent on the "market" of buyers and sellers. The four forces that affect other properties will affect the historic property. These are utility, scarcity, desire and purchasing power. These are basic to creating and maintaining value in a free society.
The utility of the historic property may be less than ideal, but may be offset by its' style, historical significance, and prestige. Historic properties by their nature are scarce, and typically, scarcity of an item will drive up the value. However. the aspirations of local buyers will determine the "worth" of the historical properties in their area. Each economic area will vary in the members' purchasing power. While utility, scarcity and desire may be of a positive nature, if funds are not available to initiate the rehabilitation project, or purchase the property, it will have little value.