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More Reasons to Support a Witherspoon-Jackson Historic District

I don’t live in the Witherspoon-Jackson neighborhood. Those who do have written eloquently about its rich, complicated and at times difficult history. They want to preserve the area as Princeton’s 20th historic district. I fully support this, and will add some practical reasons for doing so.

The Historic Preservation Commission has stated publicly that in this proposed “Type II” district, they will only be concerned with what can be seen from the street. If not seen from the street, or if maintenance looks the same, no review is necessary. You can even paint your home’s front any color without a commission review. Many residents have testified to the assistance the commission provides in helping them find less expensive materials that maintain the current “look” of their house.

Many studies have found that historic districts enhance property values. Some people worry that prices will rise too much, increasing taxes on residents. But a New York City review by its Independent Budget Office covering the years from 1975 to 2002 found that the average annual “premium” for property appreciation in a historic district versus similar non-district properties was just 1.2%. A 2007 Tucson review covering 15 cities and states all around the United States (including very high,appreciation, tourist-oriented historic districts in Galveston, San Diego and Savannah) reported premiums of only 0.5-3.0%.

This doesn’t mean a historic district will increase Witherspoon-Jackson taxes 1-2% more each year. It does mean they won’t spike due to a mcmansion next door. Some day, when a resident sells her house, she will benefit from this small extra appreciation.

The tax problem now, without a Witherspoon Jackson Historic District is that much larger, more expensive homes are built in place of torn down smaller ones. When a large home selling for $900K – $1.2M is built, it is assessed at its sale price. When the next revaluation is done, the tax assessor looks at the new large home sold for more than $1 million and attributes part of the price to the land value. He then imputes a new, higher land value to surrounding properties. This greatly increases their total assessment although the house on them has not changed one bit.

The creation of the Witherspoon Jackson Historic District will help stabilize tax assessments throughout the neighborhood for current property owners. Without this historic district, rapid gentrification and market forces result in rapidly rising tax assessments as developers pick off individual properties and build the largest homes that current zoning permits. This would also destroy the nature of the community.

Let’s not become another Manhattan where only the wealthy can live near our center of commerce and culture. Since the end of the 19th century, people of modest means who actually get the hard work done in our town and University – mostly African-Americans, Italians, and now Latinos – have lived in this neighborhood. Let’s designate a Witherspoon Jackson Historic District and allow them to continue living here, rather than pack them off to Trenton.

This will benefit all who live in Princeton by preserving a key part of our history, and maintaining a diverse ethnic and socio-economic population. If you care about this, about greatly slowing gentrification, and keeping housing that’s affordable, please come to the special Council meeting at 7 pm on Monday February 22, at 400 Witherspoon Street. Show your support. Speak a short statement. Our Councilors listen.

John Heilner

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  • John Heilner

    SFB – I’m done wasting my time with you. No we can’t agree that a 2014 study is better than a 2004 study – not when they essentially cover the same long time periods. As for “admitting finally” – if you took the time to read my original letter to the editor, and were honest about it, you would admit that I stated up front that HDs had a 1.2% premium in NYC and 0.5-3.0% nationally, and that these figures include very toney and expensive HDs which the WJHD never will be. It’s all about context.

    Please stop trying to mislead people for your own ends by inaccurate statements about economic research.

  • SFB

    I think we can all agree that a 2014 study is much better than the 2004 study you cited previously. But thanks for taking the time to read these and for admitting, finally, that instead of stabilizing prices, historic designation will lead to higher values and taxes. Property owners in the neighborhood can expect higher taxes, more fees and added bureaucratic intervention if historic designation goes through. Sure, some people will think that’s all worthwhile, but I don’t, especially because the added costs will be burdened onto the least-affluent people in Princeton.

  • John Heilner

    Sorry, SFB, but I only found time to research and respond just now.

    The NBER paper’s summary says, “Since Brooklyn Heights was designated as NYC’s first landmarked neighborhood in 1965, the Landmarks Preservation Commission has designated 120 historic neighborhoods in the city.” They find “heterogeneous impacts across neighborhoods,” and differences across time between 1974-2009. Just because their study was published in 2014 doesn’t make it any more relevant. So they, too, looked at a long time period, just like the NYC IBO that I cited, and found different results among different HD’s.

    The report for The Preservation Alliance of Philadelphia states: “Homes in local historic districts enjoy an immediate 2% increase in values relative to the city average, once local designation has taken place; and thereafter, they appreciate at an annual rate that is 1% higher than the city average.” (p.23)

    So even if this 1%/year premium is quickly reflected in property assessments and taxes, which it will not be, we’re talking $70/year more tax on a WJ property that’s assessed at $350,000 (using Princeton’s approximate tax to assessment ratio of 2%.) Meanwhile – if all this holds – the property owner enjoys an extra appreciation in value of 1% x $350,000 = $3,500/year. Sounds like a good tradeoff to me.

  • SFB

    The National Bureau of Economic Research. The specific report is the one written by Vicki Been (New York University School of Law), Ingrid Gould Ellen (New York University Robert F. Wagner Graduate School of Public Service), Michael Gedal (Federal Reserve Bank of New York), Edward Glaeser (Harvard University), and Brian J. McCabe (Georgetown University). It was published in late 2014. That report found a premium of 20% for historic-designated residential neighborhoods in New York outside Manhattan. It was controlled for structure type and normalized to areas that were not designated.

    The Econsult report prepared for the Preservation Alliance for Greater Philadelphia found a 22.5% premium for local historic districts around the city. That report was published in March 2010. Both these reports are more recent and more regional-specific that the reports you cite. The Wise report also has no serious analysis of likely price inflation as a result of historic designation.

    So you can see, the idea of price ‘stabilization’ is very unlikely. Significant price inflation is a much more likely outcome of historic designation. For people who own houses and can afford higher tax assessments, this may be desirable, but for many others, it will create a burden.

  • John Heilner

    Galveston, San Diego and Savannah were mentioned because they pulled up the average HD premium in that 2007 study to 0.5-3.0%. Without these touristy, high home price places, the differential was more like 0.5-1.5% for the other 12 cities in the study. The W-J HD ain’t going to be no high price touristy place!

  • John Heilner

    SFB – please cite your specific source for this “20% increase” you keep bandying about. I can’t find it. And remember – I’m talking about the differential between appreciation in historic districts and similar non-historic areas, i.e. the impact of designating an historic district.

  • SFB

    The study you cite is out-of-date. Look at the most recent reports, and you will find the statistic about an average 20% increase. It troubles me that the Wise report did not take account of these studies. I suspect that’s because the consultants were selected by and for the Historic Preservation Commission to build a case for historic designation.

  • SFB

    That’s not correct. Older buildings are getting knocked down _because they are in a terrible state of repair_. You know this, because you were involved with the old house at 31-33 Lytle Street. You had an option to preserve that house, and move it to the adjacent lot, but you chose not to, because the house was in a terrible state of repair. It would have been too costly to try to bring it up to standard, so you allowed it to be knocked down. I was in support of your decision. But now you argue that demolition should not be an option for other parties. That’s unreasonable.

    We need to lower the cost of maintaining properties so they don’t end up getting ‘demolished by neglect’. (And remember, you can still demolish buildings in a historic designated neighborhood.) Adding extra standards for fixing up old buildings only makes it harder to maintain them, and increases the likelihood of demolition.

  • John Heilner

    Sorry, but I do believe you’ve got this backwards. Right now affluent buyers are purchasing properties because they can tear down what’s there and build whatever larger, expensive structure they like, with no control on scale and conformity with the existing streetscape. This is what drives out the renters who lived in the previous house.

  • John Heilner

    I have no idea where SFB gets his 20% “average” from. In any case, averages can be very deceiving.

    While the NYC review only goes through 2002-3, it does show that in less expensive areas like Ft. Greene and Stuyvesant Heights – which would be most comparable to Witherspoon-Jackson – the rate of appreciation in the latest years covered (1996-2003) was no higher in the historic districts than in nearby non-historic areas. When you look at Brooklyn as a whole, where most of the NYC IBO’s data comes from – yes the rate of appreciation was somewhat higher in historic districts. But this includes trendy hot areas like Park Slope and Brooklyn Heights. It’s hard to compare apples to apples in all these studies, but if you dig into specific neighborhoods in the NYC study you can. That’s what I’ve tried to do here.

  • SFB

    Thanks for the compliments which I’ll take at face value but I have no interest in paying any extra fees or hiring an accountant to research/apply for tax credits or assistance. i don’t have the money. I don’t think my caring Guatemalan neighbors have extra money either. If you want to historic-preserve the churches, Dorothea’s House or the cemetry, then sign me up, but please leave regular people’s property alone.

  • FreshAir

    OMG, SFB… if you’re really concerned about the extra costs of a HPC impacting your tenants, some of us can pass a paper cup around to collect the tiny fee you might pay IF you want to change something on the front of your masonry building. We may also identify any kind of “historic preservation tax credits”or assistance you’ll receive for owning a historic property. It’s so wonderful to read that you’re a stellar landlord…thinking of others & the greater good. Historic preservation of your unique building seems another opportunity for you to shine.

  • SFB

    I own a rental property. It was formerly the home of Italian masons. I bought it because I was kicked around between 12 rental homes while I was a student and trainee. I know what it’s like to be evicted with 3 days notice. I know what it’s like to have your rent jacked up by 10% every year. And I know what it’s like to have stuff not working in the house but your calls and emails to the landlord go unanswered. I want to ensure that my place is a place where people don’t get ripped off and are treated fairly. I make nothing from the rent. It all goes on maintenance, capital costs, and of course, property taxes. If historic designation goes through, I will have to raise the rent because involving the HPC has costs, and those costs have to be covered. I really don’t want to do that but there is no free lunch. The neighborhood has as many renters as homeowners. They aren’t being represented and many probably have no idea how this is going to affect them.

    Back to your other question. The surveys done in New York and Philadelphia were all over those towns including areas where getnrification is rife. That’s why those studies are relevant, not those from Galveston (Galveston?). Gentrifiers love historic districts because it tends to drive out “undesirable” low-income households (because of the increased costs) and because gentrifiers place a premium on a sense of authenticity and narrative. Already we’re seeing letters in the local papers encouraging people to use historic preservation tax credits to buy homes in the neighborhood, even before the ordinance has gone through! In other words, this is a measure that will be a big advantage to affluent buyers seeking a piece of the action, at the expense of lower-income households especially renters.

  • I live here

    How many historical designation areas used in whatever study concluding that this leads (specifically and uniquely from other factors) to increased property values are areas where HD is preserving the character of a generally lesser income, discriminated-against community vs. another type of “historic” culture. Some historic designations prevent larger sized properties from becoming high density, the WJ neighborhood is high density and preservation may help prevent it from becoming more low density or more “car dense”. Not sure the W-J neighborhood fits exactly into some of these averages.

    SFB do you live in the neighborhood, or own an income/rental property?

  • SFB

    I agree with Mr Heilner’s concerns about the increasing exclusivity of Princeton, but historic designation in the Witherspoon-Jackson neighborhood would be like pouring gasoline on the fire. Up-to-date studies in the New York and Philadelphia areas have shown that historic designation leads to property value increases on the order of an *average* of 20% over and above similar properties nearby. Mr Heilner is citing studies from decades ago, or from other geographical regions, to give an impression that this measure will be minimally impactful, when in fact it is likely to lead to increased tax assessments, gentrification and social exclusion. The concept of price stabilization is fanciful and ignores available studies.
    It’s possible that some homeowners are fine about a measure that will boost up the price of their property, but let’s not kid ourselves that it will have minimal effect. Also, although the Historic Preservation Commission only deals with external features, that means if you want to buid a fence, put up exterior lights, or make almost any kind of addition, you are going to have to get permission from the committee, who may or may not allow you to do what you want. I have a house in this neighborhood and I will be coming on Feb 22 to argue against this measure.

  • I live here

    One aspect that hasn’t been discussed so much is that a great many houses in this neighborhood do not have garages and/or even driveways, houses are very close together and the residential properties are places where people are housed but cars are not. Open porches, very close neighbors, proximity to downtown, schools, recreational facilities like the community pool and soccer fields (and formerly the hospital and medical offices), and to some extent lower car ownership due to lower incomes, make the neighborhood a walking and biking neighborhood. Right now if you own and worship an expensive and/or large vehicle, you’re less likely to buy a property here. Many residents in this neighborhood share a single stack lane driveway with their neighbor, which requires a coordination with and connection to neighbors that I don’t see as much in other Princeton neighborhoods. Looking at new development that’s made its way into the neighborhood, its striking to see what percentage of newer real estate is dedicated to the automobile(s). There are real disadvantages to this non-accommodation of vehicles for sure, but this is one aspect of the structure of the neighborhood that contributes to its culture, for original residents this is part of how a closeness is development, for later-coming residents buying in, its a self-selected group for which factors other than auto-accommodation (or auto worship) were higher than other factors in their cost-benefit analysis when making a choice about where they live. .

  • FreshAir

    Excellent summary, John! Thank you for sharing it. Newer construction does more damage to a hood’s affordability than any other factor over time. As tax assessments rise more steeply, because of higher sale prices, long time residents who sought the lifestyle of an old hood have to move out. Conservation & designation is protective in many ways for residents who love their hoods. Not long ago, Princeton lost the opportunity to conserve the 34 homes that comprised the very historic mid-century Deerpath hood…. one of a kind in the US, with the largest intact concentration of homes from that era. With no backing from town leaders & 5 or 6 dissenting homeowners, that hood will soon be lost to those who appreciate its significance in US history. The organizers of that conservation effort wanted to preserve only 3 key features, but without the backing of Council they failed. It was an extremely short-sighted position Council took, given the vast areas in this region left to be developed here. Let’s hope the greed factor of developers & our short sighted Council doesn’t sell out the W-J hood. Neighbors who love W-J should be able to stay, to celebrate the heritage they have shared.

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