Private Sector Involvement
in Historic Preservation
KATHRYN WELCH HOWE
In 1973 the American Institute of Architects (AIA) published a full-page advertisement featuring Boston's 1867 Old City Hall with a caption that read, “The Most Promising Trend in Modern Architecture.” At the time, Old City Hall and Ghiradelli Square in San Francisco were two of a handful of successful commercial adaptive use projects nationally. Although teasing at the time, the AIA ad proved to profoundly predictive of the shift that was about to occur in real estate development and historic preservation.
Within a thirty-year period, the number of adaptive use and commercial rehabilitation projects has grown from a few high-risk, hard-fought ventures undertaken by developers who had both the resources and the passion to chance an uncertain market response into a multibillion-dollar business in which nearly every real estate entity participates. The realization that making economic use of historic buildings is an effective preservation solution and, frequently, a financially and politically constructive way to create housing, offices, industrial space, and so forth has caused preservation and real estate interests to find common ground. The National Park Service and the Internal Revenue Service (IRS), both agencies responsible for administering investment tax credits for rehabilitation, estimate that more than $21 billion has been invested in historic properties since the passage of the first investment tax credit program in 1976.
The growth of private sector involvement and investment in historic preservation has occurred in parallel with a changing cultural ethos toward urban life and historical continuity in the United States. This shift in the cultural climate has been reinforced by favorable public policy initiatives, tax incentives, funding programs, innovative development projects, and a positive market response.
The preservation movement itself has turned increasingly from a regulatory approach to more of a market-driven reality. Although the use of regulatory tools such as landmark and historic district ordinances and environmental quality legislation will remain the backbone of protecting historic properties