Look, But Don't Touch
Landmark status for your house can mean money in your pocket, but it may come with strings attached
Rosemary Uzzo is enamored of her 1920 Normandy Revival house and the early-20th-century houses that surround it in Yonkers, New York. She'd never want anything to change the character of the community. But when local officials considered landmarking her Park Hill district, Uzzo balked. "I'm very much attached to the neighborhood and to my home, so it was very difficult for me to take a stand against it," she says. "But it was so restrictive."
Like many homeowners, Uzzo was afraid that owning a "historic" home would mean she couldn't freely make whatever alterations she wanted to her property. For example, if her house had been landmarked (which, in the end, it wasn't), she would have had to get approval for any change to the facade, from a new paint color to replacing roof shingles.
But there are other types of historic-house designations that impose no such constraints, and even come with big advantages. So if you own an old house — or are thinking of buying one — it pays to understand the various ways you can take advantage of its historic status.
The National Register of Historic Places
The best-known historic-house designation is a listing on the National Register of Historic Places, a roster of properties administered by the National Park Service. While such a listing validates a house's period architectural character — and offers prestige that may lead to a modest resale boost — it is considered "honorary" and carries no restrictions on what the owner can do to the property.
That means it offers no protections, either. Two years ago, for example, the National Register-listed Middaugh Mansion, an 1892 Queen Anne in Clarendon Hills, Illinois, was demolished by a local church to enlarge a parking lot. Even the country's nearly 2,500 National Historic Landmarks, a much rarer honorary designation bestowed on properties deemed to "possess exceptional value or quality in illustrating or interpreting the heritage of the United States," can be altered or bulldozed.
So why bother going to the trouble of applying for a National Register listing? The answer is simple: tax breaks. If your house is at least 50 years old and is a good example of a period architectural style, getting it listed can open the door to significant financial benefits — state income-tax credits and/or municipal property-tax reductions — that can offset the cost of fixing the place up. Arizona, for instance, offers owners of National Register-listed houses up to a 50 percent annual reduction in their property taxes. Other states allow municipalities to freeze property taxes on restored houses at their pre-rehabbed rate. (For more information on National Register listing and an application, go to www.cr.nps.gov/nr/listing.htm.
State and Local Designations
In addition to National Register listing are the myriad designations administered by states and municipalities, the most common of which are local historic
districts. Unlike their honorary counterparts, these are considered "restrictive" and require current and potential owners of old houses to weigh the pros and cons more carefully.
On the upside, inclusion in a local historic district can truly accomplish a preservationist's goal of keeping her house and neighborhood intact for future generations. There are also considerable financial benefits, in the form of tax breaks that parallel those for owners of National Register-listed houses, and significantly higher resale values. In Beaufort, South Carolina, for instance, houses in the town's official historic district sold for 21 percent more, all other factors being equal, than houses not in the district, according to a 2000 report by the South Carolina Department of Archives and History. On the downside — as Rosemary Uzzo feared — inclusion in a historic district gives someone else a say in how you maintain or upgrade your property.
George Thomas, an architectural historian in Philadelphia, runs up against this situation all the time. In many historic sections of town, he says, merely adding a new porch light can be prohibited. But that degree of restrictiveness may be the exception more than the rule. In most places, historic-house regulations are not all that oppressive, says Pratt Cassity, director of the University of Georgia's Center for Community Design and Preservation. He surveyed preservation commissions around the country and, based on 700 responses, found that local boards approved requested changes more than 95 percent of the time. (Of course, that may have as much to do with homeowners knowing what alterations will pass muster as it does with rubber-stamp review boards.) Even in places with vigilant historic-review boards, regulations typically end at the front door, with a home's exterior, and often only the facade. Changes that are invisible from the street, such as a rear addition that meets local zoning requirements, are likely to be approved, if they are regulated at all.
To homeowners who truly care about preserving their neighborhood's architectural integrity, abiding by historic-district restrictions is worth the hassle, because the same regulations that impinge on your right to redesign your porch also protect you from a neighbor determined to bulldoze the clapboard saltbox next door and put up a vinyl-sided McMansion in its place. And the cost of making improvements starts to look a lot less daunting when you know that the taxman is footing part of the bill.
The Ultimate Preservation Strategy: Giving It Away
If you're really serious about preserving your old house, take matters into your own hands by granting a preservation easement to a nonprofit organization, such as a local historical society or preservation trust. Not only will you save your house, you'll be making a charitable donation that you can write off on your income taxes.
An easement is basically an attachment to the deed that grants the recipient legal rights to a portion of the property, whether the entire structure, just the facade, or a single room. Once recorded, a preservation easement becomes part of the property's chain of title, binding not only the homeowner who grants it but future owners as well. This may scare away potential buyers who aren't serious about keeping the place intact. It will also reduce the property's appraised market value because you no longer own all of it, but as a result you'll pay less in property taxes, too.
To get the tax write-off, the house must be listed on the National Register of Historic Places, and the easement must go to an approved nonprofit. For more information, go to www2.cr.nps.gov/tps/tax/easement.htm.