In 2005, Randall Mason published a discussion paper referred to as “Economics and Historic Preservation: A Guide and Review of the Literature”. It was prepared for the Brookings Institution Metropolitan Policy Program. Mason’s review emphasises the enormous benefits of cultural built heritage virtually on the basis of any metric used to assess such benefits. The following excerpts from recent American economic impact studies give an indication of the overwhelmingly positive economic impacts that have been reported for historic preservation;

• Historic preservation acts as a powerful economic engine. A Colorado Historical Society report (based on an economic study conducted by Clarion Associates, et al, 2002) began, “Studies across the country have shown that historic preservation acts as a powerful economic engine, creating tens of thousands of jobs and generating significant household income. Our research shows that this is especially true in Colorado….” Between 1981 and 2002, the study reports $1.5 billion in total expenditures on historic rehabilitation projects in the state, which generated $522.7 million in total household earnings, 21,327 jobs, $4 million in business income taxes, $10.8 million in personal income taxes and $27.4 million in state sales taxes (Colorado Historical Society 2002).
• For every dollar generated in historic preservation grants, two dollars return to the state in direct revenues.
A state-wide study of economic impacts for Florida—Economic Impacts of Historic Preservation in Florida: Executive Summary (Centre for Governmental Responsibility, University of Florida Levin College of Law and the Centre for Urban Policy Research, Rutgers University 2002, based on an exhaustive study by Listokin, Lahr, McLendon and Klein 2002)—begins: “The Economic Impacts of Historic Preservation in Florida … reveals the startling statistic that for every dollar generated in Florida’s historic preservation grants, two dollars return to the state in direct revenues. A dollar directed to the Florida Main Street program… shows a tenfold return.” (p.2, emphasis in original) Annual economic activities in the state attributable to preservation equalled $4.2 billion, which translated to 123,242 jobs and $2.766 billion in income. This includes economic activity related to historic building rehabilitation, heritage tourism, Main Street programs, and historical museums operation.
• Each $1 million spent on non-residential historic rehabilitation creates two jobs more than the same money spent on new construction. Reporting the results of a similar study undertaken for the state of New Jersey, New Jersey Historic Trust 1998 (summarising results from an extensive study conducted by David Listokin and Michael Lahr of Rutgers’ Centre for Urban Policy Research) maintains that: “Each $1 million spent on non-residential historic rehabilitation creates two jobs more than the same money spent on new construction. It also generates $79,000 more in income, $13,000 more in taxes, and $111,000 more in wealth.”
• Heritage tourists stay 4.7 nights longer than the average tourist, and spend 78% more in restaurants than other travellers. In the sector of heritage tourism—an important part of the economic contributions of historic preservation—the researchers found that heritage tourists stay 4.7 nights longer than the average tourist, and spend 78% more in restaurants than other travellers. The study also reports that “preservation in New Jersey creates 21,575 jobs each year, 10,140 of them in the state” and concludes that historic preservation investments create more wealth and more jobs than an equal investment in either new construction or highway construction.
• Positive impacts of the historic rehabilitation tax credit scheme. An economic impact study conducted for Maryland (Lipman, Frizzell and Mitchell 2002) reached similarly positive conclusions specifically with respect to the impacts of the state of Maryland’s rehabilitation tax credit, a major stimulus for preservation investment. In the two years covered by the study (2001-2), the following economic impacts were calculated as positive impacts of the historic rehabilitation tax credits in the Maryland state economy and in local jurisdictions: the tax credit program spurred total rehabilitation investment by private developers and homeowners of $155.5 million during the two-year period; an estimated 2,454 jobs were created throughout the state and in many sectors of its economy: only half were construction sector jobs on-site. Total output in the Maryland economy was increased by $260.5 million and wages increased by $81.6 million; Public revenues increased by an estimated $20.0 million due to the increased rehabilitation spending; the rehabilitation qualified for $38.9 million in State historic preservation tax credits. Each $1.00 in State investment has leveraged $4.00 in construction spending and $.80 in federal tax credits.
• Total public revenues have been increased as a result of the State’s investment in preservation. In addition to these state-wide measures, the study looked closely at three financially successful, private, case-study projects that had used the rehabilitation tax credits. The study found, “Total public revenues (including counties and municipalities) have been increased as a result of the State’s investment, yielding a present value of $1.30 to $5.02 in revenues for every $1.00 of State tax credit investment.”

A study specifically focused on heritage tourism in a nine-county area of western Pennsylvania found direct annual economic impacts of $12.2 million and indirect impacts of $5.6 million. This economic activity was found to support 337 jobs annually. (Strauss, Lord and Powell 2002)

Under the auspices of the National Trust for Historic Preservation, the Main Street Program has spread to hundreds of communities across the country. One of Main Street’s main goals is economic revitalisation, and Program data consistently report positive economic impacts in their communities. Main Street programs have been undertaken in more than 1,700 communities since the early 1980s, accumulating these impressive economic impact statistics:

• total public and private reinvestment: $17 billion
• average reinvestment per community: $9.5 million
• net gain in businesses: 57,470
• net gain in jobs: 231,682
• number of buildings rehabilitated: 93,734

All in all, the “reinvestment ratio” (average number of dollars generated in a community per dollar used to operate the local Main Street program) is documented as $40.35 for every $1 spent! The types of studies cited in this section demonstrate the positive economic benefits of investment in historic preservation activities of several types: building rehabilitation, tax credits, heritage tourism, Main Street revitalisation programs, and so on. This is not to say the benefits are guaranteed or that they always outweigh the costs of preservation. But these studies do present convincing evidence that “preservation pays” (or can pay) when viewed simply in economic terms—both from the perspective of individual investors, and from a public, fiscal policy perspective. These conclusions, coupled with the anecdotal but logical arguments about preservation’s catalytic effect on other economic development activities (forcefully argued in Listokin, Listokin and Lahr, in Rypkema’s many works, and others) leads to the conclusion that historic preservation can (and often does) have net positive effects on a regional or local economy. As Listokin and his colleagues conclude in their New Jersey study, “Our research showed that preservation was often a superior economic catalyst compared with other investments. For example, in New Jersey, $1 million in non-residential historic rehabilitation was found to generate 38.3 jobs nationally and 19.3 jobs in-state. In comparison, $1 million in new non-residential construction was found to generate fewer jobs: 36.1 jobs nationally and 16.7 jobs in-state.” (Listokin and Lahr, 2000)

With such magnificent results, it’s a wonder why Australia has not turned its attention to heritage investment schemes such as those selected by Mason in his review. The answers are all there. For every tax dollar invested, as much as $5 comes back – not to mention the amount of jobs created by the investment. What are we waiting for? Let’s act now before we lose too much of our listed stock to dilapidation, neglect or mismanagement.

Paul Rappoport – Heritage 21 – 13 February 2015