The Value of Limits

In my earlier post about my trip to Minneapolis for the League of Historic American Theaters 2013 Conference, I touched briefly on the positive impact that historic preservation has on property values.  If this seems somewhat counter-intuitive, it shouldn't.  Here's why.

As the income gap in our society grows greater and greater, real estate developers have no incentive to build for any market except the top 1%, soon to be the top 1/2 %.  And therein lies the problem:  more and more developers are chasing a lucrative but shrinking market, leading to an oversupply of "luxury" buildings and a scarcity of affordable structures for everyone else.  Landmarking, and other types of preservation laws, have the effect of focusing development of structures and neighborhoods that serve a wider range not only of incomes, but social and cultural needs as well.  In effect, these laws preserve the diversity that feeds the creative and, ultimately, the economic vitality of all truly great cities. 

There is no better example in the United States of this process than New York City, as this article illustrates.  Of course, it also comments on the predictable whining of local real estate interests, who lament the fact that only 72% percent of the city is completely free to satisfy all of their development fantasies.  But cities cannot live on skyscrapers alone--there simply aren't enough actual or potential users to satisfy the unlimited greed of their would-be builders.  They could, in fact, have a much steadier and therefore more valuable profit stream if they focused on smaller-scale development that made maximum use of existing structures.  But human nature tends to mitigate against the force of this type of logic.  Preservation laws, on the other had, ensure that this logic prevails, at least to a degree--and, ultimately, to the benefit of everyone.

But it won't stop the whining, which has gone on for decades, and doubtless will go on for many decades more.  Let's hope that it never wins the battle for a better civilization.