The Internal and External Impact of Historical Designation on Property Values

Posted: 3 May 2002

See all articles by N. Edward Coulson

N. Edward Coulson

Pennsylvania State University, College of the Liberal Arts - Department of Economic; National Bureau of Economic Research (NBER)

Robin M. Leichenko

Rutgers, The State University of New Jersey - Geography

Abstract

Designation of historic properties and historic districts is increasingly used as a means to revive central city neighborhoods and to promote urban economic development. While preservation activities are thought to generate positive externalities for surrounding neighborhoods, these external effects have been difficult to quantify. Using a database of tax appraisal records for residential properties in Abilene, Texas, this study demonstates that there are significant, positive externalities associated with historic designation. We perform simple cost-benefit calculations and find that the internal and external benefits more than outweigh the (non-zero) costs associated with historical designation. Moreover, from the city of Abilene's perspective the property tax incentives provided to historic reinvestment are outweighed by the added property tax revenue created by the increased value.

Keywords: historical designation, property values, neighborhoods

Suggested Citation

Coulson, N. Edward and Leichenko, Robin M., The Internal and External Impact of Historical Designation on Property Values. The Journal of Real Estate Finance & Economics, Vol. 23, No. 1. Available at SSRN: https://ssrn.com/abstract=303831

N. Edward Coulson (Contact Author)

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States
814-863-0625 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robin M. Leichenko

Rutgers, The State University of New Jersey - Geography ( email )

New Brunswick, NJ 08901

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