The real estate boom of the 2000s left its mark on many historic neighborhoods. But there are preservation tools available to protect these neighborhoods against increasing development pressures.

From North Carolina Preservation (Fall 2008)

In many of our cities, former streetcar suburbs are now highly desirable urban neighborhoods. They are sought after for their convenient locations, mature trees and landscaping, access to amenities and their comfortable community feel. There are many reasons for their popularity beyond their historic houses. While many people love the details of older homes (the hardwood floors, detailed moldings, unusual windows, etc.), others can't see past the small closets, creaky floors and divided floor plans. The desirability of these neighborhoods and the overall rise in the real estate market have led to rising property values that can become a double-edged sword.

As values have appreciated through the decades, older residents have seen their property values triple, quadruple or more. The accumulated equity can be a blessing, but the corresponding higher tax assessments can be a burden for residents who want to stay in their homes. The trouble really begins when residents look at their assessment, and the land value exceeds the house value. This is the tipping point after which it becomes financially feasible to buy a parcel, demolish a house and rebuild.

Generally known as the "rule of three," the financial model behind teardowns works when a builder can sell a new home for three times what he paid for the lot (old house included). It is a combination of the real estate market and the city's regulatory environment that enables this model. The builder has to be able to build a house that is large and fancy enough to sell for triple the price, and someone has to be willing to buy it.

It can be hard for preservation advocates to argue against market forces that bring a rising tide that supposedly floats all boats. Yet they see all too clearly the tidal wave of large new houses that is swamping the more modest homes in their neighborhood. The successful advocate will get city officials, residents, and (some) builders to understand that a neighborhood is more than just a collection of individual houses. The character of the neighborhood, defined by its houses, landscapes, parks and streets, is the context, the webbing that connects individual houses and their residents to each other and the city.

As the old real estate maxim says, value is all about location, location, location. All the traits that make an older, close-in neighborhood desirable-the convenience, the parks, the mature trees, the porches, etc.-are elements of its character, and the desire to be a part of that neighborhood is what makes a property valuable. When you look at it this way, you realize that it makes sense to protect your neighborhood character and, by doing so, protect your own property value.

So what tools are at your disposal? Recently the City of Raleigh Planning Department conducted a survey of the best management practices for protecting neighborhood character and concluded that rezoning, neighborhood conservation districts, and local historic districts are at the top of the list. Let's take a look at each one of these.

Rezoning

Many of these older neighborhoods were built before citywide zoning was enacted and often contain a mix of housing types and sizes that are difficult to fit retroactively into zoning categories, resulting in a mismatch between the built environment and the zoning code. Typical is a neighborhood of large, wooded lots of half an acre or more in a zoning district that allows for quarter-acre lots. With rising land values in these desirable locations, the splitting of these lots into multiple sites is becoming more common, resulting in houses much closer together and the loss of many mature trees-a dramatic disruption of the neighborhood's spacious, wooded character.

Some residents are working to defend their neighborhood character and their property values by petitioning for a rezoning of their property (for example, from minimum quarter-acre to half-acre lots). They are volunteering to give up their individual development rights in order to protect the quality of the whole neighborhood. They may no longer be able to sell their lot to a developer for subdivision, which might have maximized the price, but they recognize the value of their neighborhood's cohesion. This is not a new approach; many of North Carolina's most desirable historic neighborhoods were similarly "downzoned" in the 1970s, when a wave of new residents came "back to the city." By acting to protect their neighborhood character, neighborhood residents are ensuring the long-term future of their property values.

Neighborhood Conservation Districts

While some are pursuing rezoning to protect their neighborhood character, rezoning remains relatively rare, requiring a forward-thinking, cohesive group of owners and elected officials. The tool that is becoming more common as a way of addressing the teardown issue is the neighborhood conservation district (NCD), also known as neighborhood conservation overlay districts.

The NCD aims to protect neighborhood character by ensuring that new construction, be it a new house or an addition, is compatible with the existing neighborhood. An NCD is an overlay district that sits on top of the underlying zoning and imposes additional or stricter regulations. Depending on the ordinance that underlies the NCD, it can act more like a historic district with a design review board and a demolition delay or it can be a simple zoning district with a list of regulations that are part of an administrative review.

Raleigh was one of the first cities to adopt neighborhood conservation districts, and it now has eighteen on the books. Other NC cities using NCDs include Durham, Chapel Hill, Greensboro, Apex, Boone and Winston-Salem. Each one of these districts operates slightly differently but the basics are the same. The district regulates features that are elements of neighborhood character, most often physical elements that relate the structure to its neighbors and to the street, such as lot size, setbacks, house size, front entry (porches, walkways), parking (garages, driveways), trees, etc.

For example, an NCD protecting a large-lot, wooded neighborhood might specify the minimum lot size, front-yard setbacks, sidewalks and curb/gutter systems, and the preservation of mature trees. An NCD for a dense, bungalow neighborhood might specify minimum and maximum lot sizes, front- and side-yard setbacks, maximum height, and prohibit garages on the side or front of the house. Each district is tailored to fit the character of the neighborhood, making it an ideal way to ensure compatible development.

In Raleigh, PNC is working with neighborhoods experiencing teardowns or incompatible infill that want some form of protection. We are providing resources to help residents put together NCD applications, think carefully about drawing the boundaries of the district, strategize how to gather neighborhood support for the petition, and navigate the public process.

One of the exciting things about NCDs is that they are available to all neighborhoods, regardless of style or historic status. We are particularly interested in mid-century neighborhoods of ranches and modern designs because they are rapidly becoming targets for redevelopment. These are typically small houses on relatively large lots that tend to be affordably priced-ripe for teardowns. The affordability of these neighborhoods will be greatly diminished if a wave of teardowns overwhelms them. These neighborhoods also represent the next wave of historic homes - just as Victorian houses were thirty years ago.

Local Historic Districts

While NCDs are good for protecting overall neighborhood character, they are not focused on preserving individual historic structures. For older neighborhoods with historic integrity or distinctive architectural character, the best way to protect their historic fabric is with a local historic district.

In North Carolina, a historic districts commission can delay demolition by up to 365 days, removing an incentive for demolition and giving time for alternatives to come forward. A few towns (Statesville, Salisbury, New Bern and Apex) have obtained legislative authority to allow a commission to indefinitely delay demolition under certain circumstances, thereby effectively prohibiting demolition. With disincentives for demolition in place, historic districts encourage the rehabilitation of existing homes.

The design review authority of the commission ensures that new construction and alterations to existing houses are compatible with the historic nature of the neighborhood-the ultimate in protecting neighborhood character and continuity. Beyond regulations that determine scale and massing, the guidelines for a historic district address design details that ensure compatibility with the streetscape.

Neighborhoods protected by historic districts become highly desirable places to live, and they prove to be hubs of real estate activity, far from the common misconception that they are frozen in time. They generally see a higher rate of renovation activity than the city overall, a steadier rate of appreciation than similar unprotected districts, and more stable property values that are less affected by the swings of the market. These benefits are due to the incentives for rehabilitation that a district offers and the stable and predictable marketplace that it creates (the same market forces at work behind protective covenants in a new subdivision).

Preservation Easements

A preservation easement is often the best way to protect an individual historic property of exceptional quality or significance. An easement is a legal document that becomes part of the deed and stipulates the property's long-term preservation. A property with a preservation easement can still be renovated and (under most circumstances) enlarged, as long as the changes are appropriately sensitive to the historic material.

Easements on key structures can be part of an overall neighborhood protection strategy. The community's overall awareness of its history and architectural legacy can be raised with the recognition of individual properties, and the effort to save a particular structure can touch off a neighborhood preservation movement.

In the wake of teardowns, infill construction and lot subdivisions, a neighborhood's character can be picked apart one element at a time. New construction that does not consider its context ultimately destroys it. While one house may not seem like a big deal, the first teardown usually starts a domino effect, proving its feasibility and breaking the ice for others. And unfortunately, residents often do not consider neighborhood protections until teardowns are at their door.

There are tools in place for cities and residents that see the value, both in economic terms and in quality of life, in protecting neighborhood character. PNC, and our partners in local preservation organizations and at the National Trust for Historic Preservation, can help find the tools and make the arguments that will unite your community.

Elizabeth Sappenfield is the Urban Issues Director for Preservation North Carolina.