Heritage Business Journal

Job-producing rehabilitation to a historic building in Chicago

In an HBJ post from February (6 February 2012),  Christopher Dore noted a recent report from Colorado that summarized the economic impacts of preservation on local and national economies. Reports like this have become increasingly common as many become more aware and accepting of the positive benefits of preservation. Just during the recent economic slump in the U.S. economy, similar reports have emerged out of Nebraska, Washington state, and Pennsylvania, to name a few, followed in November 2011 by a report from the Advisory Council for Historic Preservation (ACHP), an independent federal agency.

One of the conclusions that emerges from these types of studies, which is particularly relevant in the current economic climate, is that historic preservation activities creates jobs, a point consistently made by Donovan Rypkema, an economist and preservationist and one of the lead authors of the ACHP report, who generalizes that spending for new construction is split about half and half between labor and materials, while between approximately two-thirds and three-quarters of rehabilitation spending goes toward labor and the remaining to materials. This means that rehabilitation projects not only produce jobs and employ local labor, but it puts the money into the hands of those that live in the community rather than sending it outside, which is what typically happens when money is spent on materials. Additionally, small businesses are responsible for creating the vast majority of new jobs in America, and historic buildings often provide the ideal location out of which to run a new or small business carrying on the domino effect of the positive economic benefits of preservation.

The recent report issued by the ACHP includes a number of job creation statistics, demonstrating over and over again that preservation is good not only for property values, tourism, sustainability, social impact, and downtown revitalization, but for creating local jobs: $1 million of rehabilitation spending in Delaware creates 14.6 jobs, compared with only 9.2 when the same dollars are spent on new construction; in Georgia, $1 million of spending in preservation creates more jobs than the same amount of spending in any other industry; and that during its first thirty years the federal historic tax credit (which is currently at risk of being cut) cost approximately $16 billion but created 1.8 million jobs, costing approximately $9,000 per job, while the recent federal stimulus package has spent over sixteen times that amount (approximately $260 billion) in just two years creating less than 600,000 per job at a cost of $445,183 per job! Some compelling facts, strengthened by the broad range of states and studies from which they emerge.