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Historical Preservation Districts and Home Sale Prices: Evidence from the Sacramento Housing Market

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  • David E. Clark

    (Marquette University)

  • William E. Herrin

    (University of the Pacific)

Abstract

During the past two decades, cities have turned increasingly to historic preservation of residential and commercial property as a method to help revive declining metropolitan areas. Sacramento, California, established historical preservation districts in an attempt to protect and maintain older structures while simultaneously increasing their value. Historic preservation, however, imposes strict rules on property owners that make property improvement more expensive than it otherwise would be. This paper uses hedonic price theory on a sample of residential properties in Sacramento to test whether positive externalities resulting from an historic preservation designation outweigh the potential negative impact of a cumbersome set of rules. The findings suggest that an historic preservation designation has a net positive impact on property values in four of the six preservation districts in the sample.

Suggested Citation

  • David E. Clark & William E. Herrin, 1997. "Historical Preservation Districts and Home Sale Prices: Evidence from the Sacramento Housing Market," The Review of Regional Studies, Southern Regional Science Association, vol. 27(1), pages 29-48, Summer.
  • Handle: RePEc:rre:publsh:v:27:y:1997:i:1:p:29-48
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    Cited by:

    1. Gabriel M. Ahlfeldt & Nancy Holman, 2018. "Distinctively Different: A New Approach to Valuing Architectural Amenities," Economic Journal, Royal Economic Society, vol. 128(608), pages 1-33, February.
    2. Angjellari-Dajci, Fiorentina & Cebula, Richard, 2014. "Applying the Hedonic Pricing Model to the Prices of Single-Family Homes in the Oldest U.S. City, St. Augustine, Florida, Testing Whether Property Taxes Are Capitalized into Housing Prices," MPRA Paper 55587, University Library of Munich, Germany.
    3. Andrew Narwold, 2006. "Historical Designation and Residential Property Values," ERSA conference papers ersa06p245, European Regional Science Association.
    4. N. Edward Coulson & Michael L. Lahr, 2005. "Gracing the Land of Elvis and Beale Street: Historic Designation and Property Values in Memphis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 33(3), pages 487-507, September.
    5. Tetsuharu Oba & Douglas Simpson Noonan, 2020. "The Price of Preserving Neighborhoods: The Unequal Impacts of Historic District Designation," Economic Development Quarterly, , vol. 34(4), pages 343-355, November.
    6. Hans R. A. Koster & Jos N. van Ommeren & Piet Rietveld, 2016. "Historic amenities, income and sorting of households," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 203-236.
    7. Coulson, N Edward & Leichenko, Robin M, 2001. "The Internal and External Impact of Historical Designation on Property Values," The Journal of Real Estate Finance and Economics, Springer, vol. 23(1), pages 113-124, July.
    8. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2013. "Urban Renewal after the Berlin Wall," Working Papers 049, Chair for Economic Policy, University of Hamburg.
    9. Rosato, Paolo & Rotaris, Lucia & Breil, Margaretha & Zanatta, Valentina, 2008. "Do We Care about Built Cultural Heritage? The Empirical Evidence Based on the Veneto House Market," Sustainability Indicators and Environmental Valuation Working Papers 42917, Fondazione Eni Enrico Mattei (FEEM).
    10. Douglas S. Noonan, 2013. "Market effects of historic preservation," Chapters, in: Ilde Rizzo & Anna Mignosa (ed.), Handbook on the Economics of Cultural Heritage, chapter 17, pages i-i, Edward Elgar Publishing.
    11. Felix Richter, 2014. "Winner Picking in Urban Revitalization Policies: Empirical Evidence from Berlin," ERSA conference papers ersa14p1424, European Regional Science Association.
    12. Raphael W. Bostic & Stanley D. Longhofer & Christian L. Redfearn, 2007. "Land Leverage: Decomposing Home Price Dynamics," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(2), pages 183-208, June.
    13. David E. Clark, 2004. "Amenity Valuation, Incomplete Compensation and Migration," Working Papers and Research 0402, Marquette University, Center for Global and Economic Studies and Department of Economics.
    14. Zhou, Yang, 2021. "The political economy of historic districts: The private, the public, and the collective," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    15. Gabriel M. Ahlfeldt & Wolfgang Maennig, 2010. "Substitutability and Complementarity of Urban Amenities: External Effects of Built Heritage in Berlin," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(2), pages 285-323, June.
    16. Cebula, Richard J., 2009. "The Hedonic Pricing Model Applied to the Housing Market of the City of Savannah and Its Savannah Historic Landmark District," The Review of Regional Studies, Southern Regional Science Association, vol. 39(1), pages 9-22.
    17. Jeong-Il Park, 2019. "A Multilevel Model Approach for Assessing the Effects of House and Neighborhood Characteristics on Housing Vacancy: A Case of Daegu, South Korea," Sustainability, MDPI, vol. 11(9), pages 1-13, April.
    18. Tan, Shin Bin & Ti, Edward S.W., 2020. "What is the value of built heritage conservation? Assessing spillover effects of conserving historic sites in Singapore," Land Use Policy, Elsevier, vol. 91(C).
    19. Douglas S. Noonan, 2007. "Finding an Impact of Preservation Policies: Price Effects of Historic Landmarks on Attached Homes in Chicago, 1990-1999," Economic Development Quarterly, , vol. 21(1), pages 17-33, February.
    20. Eric Thompson & David Rosenbaum & Benjamin Schmitz, 2011. "Property values on the plains: the impact of historic preservation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(2), pages 477-491, October.
    21. Lori Dickes & Elizabeth Crouch, 2015. "The Impact of Changing Lake Levels on Property Values: A Hedonic Model of Lake Thurmond," The Review of Regional Studies, Southern Regional Science Association, vol. 45(3), pages 221-235, Winter.

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