Profiting from the past
The impact of historic preservation on the NC economy
Reprinted from North Carolina Preservation (Winter 1998)
In 1997 Preservation NC commissioned Donovan D. Rypkema, a real estate consultant and nationally renowned author from Washington, D.C., to conduct a study of the economic impact of historic preservation on North Carolina’s economy.
The economic impact of preservation is significant, complex and widespread.
For decades North Carolinians have recognized the value of their historic resources. Elected officials have reinvested in historic courthouses and city halls. Thousands of homeowners have purchased and rehabilitated historic houses. Local history advocates have restored mansions and log cabins as museums, while community activists have put new life into historic schools, adapting them into nonprofit centers, arts facilities, and homes for senior citizens. Public officials have used historic rehabilitation as a tactic to stabilize urban neighborhoods, while downtown merchants have incorporated preservation as a downtown revitalization strategy.
Through these diverse efforts many of North Carolina’s historic resources have been preserved for succeeding generations, while respecting the contributions of earlier generations. The motivations for historic preservation in North Carolina are as diverse as the efforts. Some recognize the cultural contribution to community and family life that structures and sites from an early time provide. Others understand the importance of preserving the architectural quality and character that are all too often not found in today’s buildings. Still other preservation advocates are driven by the sense of identity and appropriate scale that historic buildings provide to neighborhoods and downtowns. Another motivation may be environmental: the reuse and recycling of precious resources. These reasons for historic preservation have been important in the past and will continue to be.
A contribution that has not been fully understood and recognized is the immense impact of historic preservation on the economy of North Carolina.
In North Carolina, a million dollars spent in rehabilitating an older building creates 41.4 jobs—twenty-two in the construction industry and nineteen elsewhere in the economy. That is 5.5 more jobs than the same amount spent in new construction.
Since 1976 the Federal tax incentives for the rehabilitation of designated historic structures have been used in North Carolina in 732 private-sector, income producing development projects representing nearly $325 million in private investment. If the projects not eligible for the federal incentive program (for example, private homes and public sites) were included, the overall impact in North Carolina would easily be doubled—representing over 25,000 jobs, $500 million in household incomes, and a total economic impact on the North Carolina economy of over $1.5 billion.
The North Carolina Main Street program—downtown revitalization in the context of historic preservation—has led to 676 business expansions, 3400 new businesses, 1871 restored facades, 1500 building rehabilitations, and 7200 new jobs—in all, $450 million in new investment.
Tourism is now the second largest industry in North Carolina with employment of 161,000 people and $2.5 billion in annual payroll—and the #1 reason visitors come to North Carolina is this state’s historic resources.
The crafts industry in western North Carolina employs 4,000 crafts workers and artists and adds $48 million annually to those household incomes. While the craft industry is not “historic preservation” per se, often the most effective sites from which to sell those crafts are western North Carolina’s historic buildings and downtowns.
Likewise the movie industry isn’t “historic preservation” but the fabric of the state’s historic commercial areas and residential neighborhoods is a significant draw for the movie industry which cashed direct expenditures of $4.6 billion in North Carolina since 1980.
The incredible success of Preservation North Carolina’s revolving fund over the last 20 years and its involvement with more than 300 properties representing the ultimate reinvestment of well over $60 million is a national model of preservation economics.
I challenge anyone to find an approach to economic development of any kind that makes a more frugal use of public resources with a larger impact on the local economy. — Donovan Rypkema
Nonetheless, the dollar impact of historic preservation on the North Carolina economy cannot be reduced to a single number. Why? Because today North Carolina is using historic resources not as an end, but as a means. A restored storefront on Main Street is historic preservation, but it is also downtown revitalization. A visitor to Biltmore represents tourism dollars, but also historic preservation dollars. A location shoot in an historic neighborhood reflects movie industry impact, but also historic preservation impact. The reinvestment in Edenton’s mill village is community preservation, but at the same time historic preservation.
One strength of historic preservation is that it is a vehicle to achieve a wide range of important goals: economic development, downtown revitalization, neighborhood reinvestment, tourism attraction, crafts vending, movie production, and community building. Each of these have their own local economic impact.
In the end, the message is clear: In addition to the cultural, aesthetic, social, historical, and environmental contributions that historic preservation provides, the economic importance of historic preservation throughout North Carolina is measured in hundreds of millions of dollars and tens of thousands of jobs every single year. Through historic preservation, North Carolina is a better—and richer—place to live, work, and visit.