Historic Preservation Ordinances 
 
Local Governmental Relations, January 7, 1998
 
The following is for study only and has NOT been approved by Local Governmental Relations Committee, Executive Committee or the Board of Directors.

Issue:	More localities are considering historic preservation ordinances as the economy picks up pace and growth related issue come to the forefront.
Action:	None necessary at this time. For information only.
Options:	None necessary at this time. For information only.
Status/Summary:	Several communities in California have considered proposals for historic preservation ordinances in recent months, a sure sign of an emerging trend, and one about which REALTORS® should be familiar. Before they endorse a historic preservation ordinance proposal. REALTORS® should scrutinize such provisions as the definition of "historic", the scope of the ordinance, whether or not it is voluntary, the nature of its restrictions, the potential costs and who will be responsible for bearing them.

Introduction

As the California economy regains some of its old momentum, dormant tensions over growth and development revive. In recent elections for example, many urban growth boundary initiatives have appeared on local ballots, and many of them have passed. (See C.A.R. Issues Briefing Paper: Urban Growth Boundaries, May 1997.) Other issues, which are not immediately associated with the growth wars become more prevalent, too. For example, in the past year, REALTORS® at the local level have reported a growing number of ordinance proposals regarding such seemingly unrelated issues as business license taxes, FOR SALE signs and rental inspections. These issues do have a common thread, however. They reflect a community? bustling economy in general, and its active real estate and development activities in particular. The slow-growth camp inevitably sees activities related to growth as a threat and looks for targets to vent its anti-growth sentiments. Another issue that has emerged in the context of the revived growth debate has been historic preservation ordinances. Communities in several different parts of the state have considered such proposals in the past year, a sure sign of an emerging trend, and one about which REALTORS should be knowledgeable. Historic preservation ordinances areintended to restrict development and significant structural changes to specific buildings or in certain neighborhoods that are determined to best represent the community?s historic character.

Discussion

At first glance, historic preservation ordinances may seem well intended. In some cases, they may be. However, in other cases, they are just a vehicle to control growth. Furthermore, if unchallenged they can easily become intrusive of private property rights. It is imperative upon REALTORS® to learn how to tell the difference between a good proposal and one that is overzealous. Here is a checklist: Definition of Historically Significant: What is the definition of the city?s historic character upon which the preservation ordinance is based? This is probably the most important question to ask because if city officials do not spend adequate time developing their vision for the community?s historic character, implementation of the ordinance islikely to become arbitrary. Example: Recently, Palm Springs officials proposed to designate an old, boarded up gas station at the entrance to the city as a historical site. The designation would have prevented the owner from selling it to a developer whowas willing to help pay to move the structure to another location on city owned land. Eventually, strong opposition from REALTORS® and others convinced the city to back off the proposal. The above example shows how historic ordinances can become very arbitrary if they do not incorporate the appropriately restrained definitions and boundaries. Questions to ask about proposed ordinances include:

• Does the city?s historic vision reflect the architecture of a particular historic period, or does it apply to any building built before a certain year?
• If there is an age cutoff, does the city intend to incorporate other criteria to help it differentiate between truly significant buildings and fixer-uppers?
• Does the vision apply to buildings that represent important events in the community?s history or random old buildings to which some residents feel attached based on an arbitrary notion such as "charm" or "character"?

Scope of the Ordinance: If an ordinance is too ambitious, it is certain to fail. If it proposes to encompass large categories of structures, such as any structure within an entire neighborhood, many property owners will feel resentful and uncooperative. Example: Recently, the city of Monterey?s Historic Preservation Commission proposed an amendment to the city?s zoning codes that would allow the designation of Conservation District Overlay Zones. The zones would require non-historic properties within the district to complement neighboring sites that are designated as historic. Under the proposal, all properties--historic and non-historic--would be subject to regulations concerning development, remodeling and/or rehabilitation. This proposal raises several issues. One of these concerns the responsibility for disclosure for owners of properties that are not historically significant but are affected by the overlay zone requirements. Voluntary versus Mandatory: If residents are not given a choice, they will resent participating in a historic preservation ordinance. A better alternative is to set up certain parameters as to what might be considered historic and then allow property owners to volunteer their structure for consideration within these parameters. City officials would determine if the property meets the standards, andif it does, property owners would be able to receive the benefits of owning a historic structure in exchange for conforming to certain development or remodeling standards. Restrictions: Ultimately, the fate of a historic preservation ordinance rests on its restrictions. Once a structure is designated as historic, what limits does this place on the property owner? Can internal remodeling be done to bring facilities such as lighting and plumbing up to modern standards? Do restrictions apply only to certainexterior features? Again, the reasonableness of these restrictions will determine how cooperative residents will be. Costs: A city that is considering a proposal for a historic preservation ordinance also must consider the costs--to the city and to property owners. In many respects, the other features of the ordinance, as mentioned above will determine these. For example, if the proposal is too ambitious, it could be cost prohibitive for the city to administer. If the restrictions placed on property owners are too severe, property owners may not be able to afford them without public assistance. If this is the case, is the city willing to offer such assistance. Example: A program in the city of Riverside illustrates how the public and private sector can cooperate to preserve historic structures in the community. The city?s redevelopment agency acts as a project banker to provide stop-gap insurance for the relocation of old, historic homes. Lenders usually do not fund any project until it is firmly on itsfoundation. The city identifies historic structures, offers to give them to a developer who is willing to relocate the structure, refurbish it to its original form and sell it. The redevelopment agency also provides low-interest loans for rehabilitation of the structures. The structures are relocated to a historic district, where property owners are prohibited from making alterations deemed to detract from the district?s historic flavor. The program benefits the owners of the property where the structureis originally located who wish to develop a new structure on the property. It also benefits the community by reviving and improving property values in older neighborhoods.

Conclusion

Historic Preservation ordinances can bring many benefits to a community. They can improve property values, improve the aesthetic quality of the community (which also can enhance tourism), and owners of historic property can receive tax benefits. Unfortunately, as is often the case, well-intentioned ordinances can become overzealous and counterproductive. It is up to REALTORS® and their allies among property owners, developers and others, to confront city officials before this takes place.