Municipal support for rehabilitation and adaptive reuse of heritage buildings directly benefits municipalities. The City of Victoria, B.C. has implemented a tax incentive program for residential conversion of heritage buildings amounting to a tax exemption from 1 to 10 years based on the cost of seismic upgrading required for the building. The program has stimulated:
the creation of 263 new residential units downtown and $32 million worth of investment in the substantial rehabilitation of 14 heritage buildings
70 units of affordable housing in a former hospital built in 1908 through an adaptive reuse investment of $1.6 million
In the City of Waterloo, the Seagram Lofts adaptive reuse project was waived development charges, a value of about $700,000, as an incentive to redevelop the site. Prior to rehabilitation, the site was taxed as a vacant lot. The real estate value of the site is now $24,000,000, and the City collects $270,000 a year in tax revenue.
(University of Waterloo, 2005)
Property assessment increases that have resulted in a 60.3% increase in property taxes
$55.8 million of private investment
The construction of new “loft-style” condominiums on adjacent vacant lots, which will lead to another increase in the municipal tax base
(Plan Canada, 2003 and TIP Fact Sheet, 2006) Investments in heritage conservation stimulate complementary economic activity, making
neighbourhoods more attractive and strengthening local economies. Investments in the rehabilitation of the Stanley Theatre in Vancouver, B.C. stimulated:
Building permits to increase from 1% to 16% of the permits issued in the general area
(Ryerson University, 2003) Designated heritage properties perform better than average in the real estate market.
A groundbreaking study out of the United States indicates that public works money invested in rehabilitating heritage buildings generates more taxes than the same amount of money invested in new construction. Every $1 million invested nationally and locally in rehabilitation of nonresidential heritage buildings, new nonresidential building, and highway construction generates $202,000, $189,000, and $186,000, respectively, in state and local taxes.
(New Jersey Historic Trust, 1997)
A study investigating almost 3,000 properties in 24
Ontario communities representing a wide variety of sizes
and characteristics found that:
59% of designated heritage properties had higher property values than the average when compared to surrounding market trends within the community
The above study found that during periods of market downturn:
47% of designated heritage properties increased in value despite the downward trend of the market
32% of the properties performed the same as the average
(International Journal of Heritage Studies, 2000)
Barber, S. 2003. Municipal Tax Incentives in Victoria,
British Columbia – A Case Study. Plan Canada. 43(2): 20-23.
City of Victoria. Downtown Heritage Tax Incentive Program (TIP) Fact Sheet. Provided by Steve Barber, City of Victoria. Updated 20 February 2006.
Jones, K. et al. 2003. Beyond Anecdotal Evidence: The Spillover Effects of Investments in Cultural Facilities. Ryerson University.
Listokin, D. and M.L. Lahr. 1997. Economic Impacts of Historic Preservation. New Jersey: New Jersey Historic Trust.
Shipley, R. 2000. Heritage Designation and Property Values: is there an effect? International Journal of Heritage Studies. 6(1): 83-100.
Shipley, R., M. Parsons, and S. Utz. 2005. The Lazarus Effect: An Exploration of the Economics of Heritage Development in Ontario. The Heritage Resource Centre, University of Waterloo.