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The cost-benefit of building rehabs… beneficial both environmentally and economically

June 12, 2012 1 comment
Preservation Hall

Rehabilitation makes environmental and economic sense (Photo credit: JWSherman)

A recent study published by the National Trust for Historic Preservation titled, The Greenest Building: Quantifying the Environmental Value of Building Reuse, has inspired a great deal of discussion. One discussion in particular, an article by Blythe Lawrence published in The Seattle Times (Seattle, WA USA), provided a follow-up comparison of the environmental value and the economic value of rehabilitating an existing building versus constructing a new one. The study looked at the effects a building has on the environment (such as runoff) and the use of nonrenewable resources (like fossil fuels) as well as energy and and resource extraction, and found that “even the most energy efficient new buildings have to stand as long as 80 years before their energy savings offset the negative impacts of constructing them,” as summarized in The Seattle Times article. The article continued to note that, “from an environmental perspective [building reuse is] a no brainer.”

Going one step further, the article noted that if an existing building has a good envelope the cost of rehab is about the same as the cost of new construction for a similar-sized building. If an existing building needs to be demolished as part of a new construction project, in order to clear the property for a replacement building, the economic and environmental costs increase exponentially. Though many, including developers, are often reluctant to accept or acknowledge the viability of rehab projects, the article sums up the reality of the situation stating that “development is about obtaining the maximum return from a piece of property. You don’t have to build a new building to make money.”

The power firms in heritage consulting

Engineering News-Record recently released its list of The Top 200 Environmental Firms. Published annually, this year’s list is based on 2011 revenue.

Rank Company Heritage Services Revenue (million)
1 CH2M HILL Ltd. Yes $3,835
2 URS Corp. Yes $3,362
3 Veolia Environnement SA No $3,294
4 Bechtel Corp. No $2,731
5 Tetra Tech Inc. Yes $2,050
6 AECOM Technology Corp Yes $1,768
7 EnergySolutions Inc. No $1,752
8 The Shaw Group Inc. Yes $1,559
9 Fluor Corp. No $1,236
10 Kiewit Corp. No $1,160

Half of the top ten firms on the list provide in-house compliance services for heritage resources. On a similar list of design firms, seven of the top ten firms were in-house providers of heritage services.

Unfortunately, what most people want to know about these firms isn’t available:  how much of their overall revenue comes from their heritage consulting activities. While most of these companies are publically-traded companies and report their financials, the filings are not fine enough to go down to the level of heritage services. Read more…

Preservation raises US property value

May 16, 2012 Leave a comment

A recent article in the Hartford Courant (Connecticut, USA) publicized two studies done by economist and historic preservationist Donovan Rypkema, studying the effects of historic district designation and property values. The first study evaluated the economic benefits of Connecticut’s historic tax credit incentive program, while the second specifically evaluated property values. The conclusion of both studies is that preservation “makes good economic sense” not only creating jobs but increasing property values. Similar results have emerged from additional studies, including one released by the Alabama State Historic Preservation Office in 2002.

The reports concluded that property values within designated historic districts rose faster than neighboring areas or metropolitan averages. The Connecticut study also noted that historic district designation did not, in any of the districts studied, reduce property values – a fact that should relieve the fears of some homeowners worried that potential restrictions may make it more challenging for them to sell their home. In reality, these studies showed that the restrictions sometimes instituted by local historic commissions are in fact the key factor in the rise in value noting, “character of the neighborhood is important, and the assurance that character will be maintained has an economic value.” Read more…

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