Property Rights and Values

Historic Preservation advocates are always banging heads with “property rights” advocates who shun all landmark regulation as a “taking” or private property. The more principled and ideological of these opponents not only oppose landmarking, they also oppose zoning and almost any form of environmental regulation. Indeed, it is environmental laws that really chafe the drawers of property rights types.

Preservation gets thrown into this stew, even though preservation laws are remarkably more flexible than most other types of land use regulation. But most people don’t know that and think preservation is an arcane design police led by pointy-headed architectural historians who don’t know that plastic windows save you thousands in heating bills.

More about plastic windows later (much more)

The fact is , buildings under landmarks laws are almost never restricted as to use – not true of zoning codes. Landmarks agencies can’t tell you what color to paint your house (unlike appearance codes in subdivisions). They can make it very difficult for you to demolish your property – but never impossible.

So why do property rights advocates argue these things? Because they don’t know better, or because they have been fed bad information. Years ago a group in Winnetka got incensed that the town had been surveyed for historic and architectural significance so they sent letters to everyone with the dire hyperbole: “Your House Has Been Targeted!” Similar propaganda campaigns are going on right now in various Chicago neighborhoods.

This is where values come in – as in economic values.

The latest property rights fans (fans always sounds better than fanatics, don’t you think?) in Chicago are fighting for their right to demolish their property and are rightly concerned that landmarking will make demolition difficult. They assume you get tons more money for demolishing a perfectly good building than for rehabbing it. They assume they will make money on a real estate investment.

But these guys have no sense of history, or capitalism. Capitalism means you can make money. It also means you can lose money. The last 30 years of history has seen rising property values. That is an historical anomaly. I can think of houses built for $10,000 in 1860 that sold for $4,000 in 1930. Anyone familiar with real estate blockbusting in the 1960s knows that most houses in changing neighborhoods were sold at a loss (and then resold at a big profit). Throughout the 1970s even when prices rose, 16% interest rates made real estate a weak investment.

The problem with our current housing bubble is that there are lots of people who don’t know this history and assume that if they buy a house for X price now, they get to sell it at 2X five years from now, because that is what they did between 1999 and 2004. So they flip one into another into another and pretty soon an $850,000 two-flat is expected to recapitalize at $1.7 million before the next Olympics.

How much profit is enough? In some of these backlash neighborhoods, old residents fearful of gentrification have joined with their gentrifiers, fearing a loss of their primary asset. Only that is an economic impossibility for old-timers. Anyone who owned a property in any part of Chicago in the 1980s (or even 1994) and still owns it now has doubled if not tripled their asset. Landmarking a two-flat worth $800,000 that was worth $80,000 in 1989 is no hardship.

What if someone is willing to pay that price, add $50,000 to knock it down and then build 3 or 4 units (which may or may not require a zoning change), which they are? How much does teardown add to value? If the suburbs are an indication – nothing.

A smart capitalist does not go into a neighborhood and pay more for a two-flat than anyone else. Some people are buying it for a two-flat, and others might want to tear it down. Moreover, since prices have shot through the roof, the differential for teardowns has grown smaller, at least in most neighborhoods (the case of a two-flat in Streeterville is different). Maybe an $800,000 two-flat gets $850,000 for a teardown. This is less than a 10% premium. Maybe the developer is smart and lowballs it at $750,000 to cover his demo cost. Whatever – as the values shoot up, the increment gets smaller and smaller.

In 1985 I saw a cottage listed on the 800 block of Paulina for $18,000, and a six-flat nearby for $44,000. The average property in that neighborhood today is worth twenty times as much. I can’t see hardships in those numbers. Plus, we are dealing with historic districts here, which even many libertarians will accede to because – like zoning – they affect everyone in an area. In fact, through history, historic district landmarking has preserved and enhanced values.

So should these places have been landmarked in 1985? Sure, but back then preservation was the tool of capitalists trying to gentrify the neighborhood and kick out the working people, so the city was not in favor of it. Tactic failed. The neighborhood gentrified anyway and now preservation is a communist tool stealing people’s hard-flipped money.

The renters who did get gentrified out of the neighborhood are the ones who are out of pocket, but that happened before the landmarking.

Go figure. A little history always messes with people’s principles.

Then again, maybe I’m just sore I didn’t buy that six-flat in 1985.

FIVE AND A HALF YEARS LATER UPDATE:
One of the nice things about my job in the heritage conservation/historic preservation world is that history is on my side. I wrote this three years before the housing bubble burst. I TOLD YOU SO. Just sayin’…..

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Marshall Field’s

The news hit Chicago today that Marshall Field’s will become Macy’s, ending a 130-year old flagship department store name on State Street. Chicago newspapers and Chicagoans are handwringing and preparing CEO Lundgren’s exit papers, and there is plenty of reason to doubt Federated’s wisdom – after all, this is the world’s test market and the only place that has an American Girl store. Yo, Lundgren, you are giving us a New York City name. I love NY as much as anyone, but I can recall a singer at Blues Fest being booed for singing “New York, New York.”

But from a landmark perspective, we are ready – the city already began landmarking Field’s State Street complex, a collection of buildings from 1894-1914 that fill a whole city block, insuring that the trademark clocks and perhaps even the Marshall Field’s nameplates, will remain. Ditto the stained glass and mosaic domes inside.

The new owner got Hizzoner Mayor Daley to go along by promising to bring back Frango mint production to Chicago – the 1999 event by another goofball CEO that caused me to shred my credit card and take my business to Carson’s. I wonder if they will put it back upstairs? That was cool – making chocolates on the upper floors of the State Street store. Of course, Frango’s themselves were the result of a 1929 buyout of another retailer.

Yes, preservation can only keep physical things, like buildings, not businesses or people. Which is good, because buildings are reasonably sturdy and reliable.

I thought Field’s was on to something a year ago with huge video ad screens behind the windows on Washington Street – we need more of that Asian city video building action, but then it went away, another bold move gone awry in the layers of MBA bureaucracy.

Speaking of Macy’s, you know they filmed the 1990s remake of Miracle on 34th Street in Chicago? In SAIC’s own Maclean Building on Michigan Avenue? Beau O’Reilly (prior to his SAIC gig) was walking by the cameras and lights and trailers and an older woman asked him what they were filming. He said “Miracle on 34th Street”. and she said “The original?”

Thanks for the story, Beau.

Facades

On The Face of It: The Facadism Problem

The struggle for historic preservation is complicated when it comes to facades; what everyone sees; the public face of buildings, where the public interest lies. In historic districts, the goal is to preserve the context of a place, defined by facades. Preservation commissions rarely regulate interior spaces in districts. This leads many to assume that preservation is only about the visual exterior façade of a building, which is wrong.

I first attacked “facadism” almost 20 years ago when developers proposed relocating the façade of the 1872 McCarthy Building on Chicago’s Block 37, since only the façade had been designated a landmark. At the time, several Chicago Landmarks were “façade designations” and this encouraged developers to propose picking them up and moving them about like furniture. It is eaiser to save a thing than a place. But it reached a point of absurdity when the city proposed designating the façade of the Ludington Building, an 1891 work of William LeBaron Jenney. Jenney is famous for pioneering the steel frame skyscraper – shouldn’t the designation include the structure? The façade trend hit its peak with the Chicago Tribune Tower façade designation in 1989, and then came back with a vengeance with the 1996 deal to skin and rebuild the Art Deco McGraw Hill Building on Michigan Avenue, the most outrageous (and scarily successful) example of a period that also saw the demolition of all but 5 feet of the Perkins, Fellows and Hamilton Studio of 1917 for the new Park Hyatt tower.

The problem with facades is that they aren’t always a problem. The Old Heidelberg restaurant (now Noble Fool theater), was very much a façade confection in its original iteration, so saving it to a depth of 15 feet preserved its significance. The current debate in Oak Park centers on a district of Tudor facades on Westgate, many of which were added to earlier buildings in the 1920s and 30s to create a sense of place. The demolition-mongers are crowing about the fact that they are just facades. Yes, they are – and they successfully created a sense of place, something developers in Oak Park have been unable to do since.

But if you say facades are okay it pushes the real estate developers, planners and institutional managers – who operate from an MBA/Art of War perspective – to suggest that it can be replicated. This came up with the Westgate facades in Oak Park. Someone suggested you just replicate the style. The knowledgeable eye looks at a 2-story casement window in one of those facades and knows that no steel mill on earth in 2005 can make or fake that window that was rolled 8 times to achieve a narrow profile you cannot have today for love or money. It is only a façade but we are too poor to make that façade today.

The annoying and beautiful thing about preservation is that every case must be decided on its own merits. This makes developers and attorneys insane because they operate from replicable models of consistency and precedent, neither of which is really valid when you are talking about properties with different significance contained in different design elements. The recent restoration of three unlandmarked facades on Wabash and Randolph in front of the Heritage highrise presents a fairly felicitous context for the narrow, elevated-impeded street. The problem arises when the developers take this and run with it into a landmark district, as they have with Jeweler’s Row, where they are building a similar treatment for two landmark buildings with an even taller highrise rising to an astonishing 800 feet. This means that every planner and developer in town will claim precedent for all manner of awful additions.

Preservation is a process. Like history, preservation is about the singularity of each case, its temporal and physical context. It is like New Orleans, this irreplaceable unparalleled indescribable thing. One case is never a perfect parallel for another.

The next façade issue coming up will be the Jenney buildings at LaSalle and Monroe – including a fantastic Victorian lobby at 39 S. LaSalle that gives the lie to any idea that preservation is about facades. In fact, even where we try to preserve facades – in the North Loop Theater district, on Westgate in Oak Park, throughout many historic districts – we are in fact preserving giant outdoor rooms, haptic environments that envelop the visitor just like an interior.

Da Buildings

It is sort of odd that two weeks into this blog I have not yet written about Chicago, where I am, but here is the perfect opportunity: Landmarks Preservation Council of Illinois’ 2005 Chicagoland Watch List, a collection of threatened buildings and districts that LPCI is trying to save. The dire dozen includes buildings as far away as Joliet and Aurora, a superb collection of modern ranch houses in Glencoe on the preservation-challenged North Shore, and buildings throughout Chicago, from the Loop to the North, West and South sides. You can see them at http://www.landmarks.org.

The one they chose to highlight was the one they held the press conference at: The Cermak Road Bridge District. This is a collection of century-old industrial buildings along the Chicago River at Cermak Road (22nd Street), an old riverfront industrial area between Chinatown and Pilsen. It was a smart choice because these are real Chicago buildings, wonderfully muscular brick dreadnoughts grasping the river like a firm handshake or a clap on the shoulder. Da Buildings.

The four buildings date from 1901 to 1924 and include designs by significant local architects that bear the mark of the innovative Prairie School, especially Nimmons & Fellows 1909 Hoyt Building. They epitomize the stereotypical Chicago of the early 20th century, a rough-and-ready can do town. The brick is arranged in piers and set off my ornament but it is thick, abstracted Prairie ornament, capping brick piers that read like ribs. It is the opposite of effete and ornate and it is a Chicago architecture that has simply not been saved enough.

Then there is the bridge. Chicago has 52 movable bridges, more than anywhere else in the U.S., and this is the grandaddy, the 1906 Scherzer rolling life bridge, the most muscular of them all, its racks of cubic counterweights squatting naked above the roadway, exposed for the world to see. This was the last time a bridge showed its muscles – within a decade they had hidden the counterweights beneath the roadway, invisible, and covered the rest with the trappings of culture, Beaux-Arts bridge houses and graceful balustrades. That gave us Michigan Avenue in the 1920s, the first inklings of our latter day status as a refined destination. This was a working bridge with its shirt off.

Cermak Road was Chicago “in every chitlin’ and sparerib” as Nelson Algren said, and we are in danger of losing that as much as we lost the legacy of Louis Sullivan. Sullivan touched many buildings and many more architects worldwide. But we don’t just save buildings because of who they touched or who their architect was. We save them because of who touched them, and the industrial buildings of Chicago were touched by millions. If those bricks could talk they would talk in 50 languages and five generations.

Plus they are good looking, solid and serviceable, with riverside views and the Loop skyline in the distance. Losing a Loop building is a facial scar but losing Cermak Road would be a kick in the guts.

New Orleans III

In the Chicago Tribune this morning architecture critic Blair Kamin made a convincing case for the rebuilding of New Orleans and several cases for historic preservation. There was the issue of the image of the city, defined by its elaborate wrought iron balconies and exuberantly ornamented houses, from the grandest to the meanest, all with a touch of celebration, a bit of show. There was the argument of the city’s unique cultural blend (choose your metaphor: gumbo, jazz, Mardi Gras) and the argument of its tourist attraction.

One of Kamin’s most interesting and astute observations was that neighborhoods built in the post-World War II era were much more easily devastated by flooding than older ones. “Time went forward, but building practices went backward” said Kamin, making one of the most convincing arguments for historic preservation there is: they don’t build them like they used to. Kamin’s argument was mostly about practices like building first floors above raised basements, but it could easily be extended to materials and construction techniques.

Several times in recent years I have tried to get new house developers to say that their products are built better – or as well – as historic houses, and not one has yet taken the bait. We can build houses faster and workers are considerably aided by nail guns and all sorts of precuts, but when I suggest that new suburban homes built since 1990 will not survive longer than their mortgages, no one contradicts me.

Part of the reason for this is construction techniques – a century ago skilled carpenters and craftsmen were less expensive – and part is materials – most of 19th century America was built with old-growth wood. Today you survive on 30-year old pine and spruce and those fabulous glues and steam presses that turn sawdust into steel, at least for a while. Can even the best wood survive a flood? Depends, but old wood, with dense growth rings, with the long-gone possibility of hardwood members, resists water penetration in a way that no postwar house can. New Orleans of course had a terrible termite problem – one of my first thoughts in reaction to the flood was a hope that it had drowned the termites.

The sheer scope of this disaster and the massive belated federal attention to it will bring to bear a host of political and economic pressures that will have a greater impact on what gets preserved than the actual structural integrity of the buildings involved. Kamin ably notes this: absentee owners will push for demolition; planners will seek massive clear sites; politicians will want one glitzy photo-op rather than an everyday rehabilitated neighborhood. They will blame the buildings of course, since they can’t speak for themselves. Which is why the preservationists are there now, seeing what can be saved.

Watch this one closely (i.e., not on television).

New Orleans II

So much has been written about New Orleans. My brother sent a link to a Joel Garreau (Edge City) article in the Washington Post that basically says New Orleans is gone. Sure, the high ground of the Crescent City with its historic districts will still be there for tourists, but the low-lying poverty areas would likely be bulldozed. He also notes that the historic reasons for the city – the port – is no longer in the city. Garreau makes some good points and several people have expressed concern that the rebuilding of New Orleans will turn it into a theme park, or that rich people and a homeless Trent Lott will swipe up all the ocean view property at disaster prices and use FEMA and Halliburton to rebuild it and make a quick killing in real estate, leaving the former poor out of a new cleaner, safer, more boring New Orleans.

This is a worry, although the feds record on infrastructure rebuilding (here and abroad) since 2000 is one of underperformance, there is still the de facto land grab of evacuation, and the potential to draw even more tourists…but…

Remember what happened with Vegas in the early 90s? It decided to go family-friendly and reinvent and clean up its image. Didn’t last. The dirty glitzy Vegas came back within a decade – and they have hardly preserved anything besides that welcome sign. I don’t wanna get too spiritual but places do have a character that can’t be kicked away by disasters man-made or otherwise.

Garreau also mentioned how some disasters – Chicago’s 1871 fire and San Francisco’s 1906 quake and fire – actually made the place stronger and better than before, but claims that won’t happen to a dwindling New Orleans without the logic of a port – it will be left only with its tourism industry.

Yeah, but it is one of the oldest tourism industries in the country. Tourism and individuality and wierdness and borderline legality are part of New Orleans character. I don’t think Halliburton can rebuild that but I’m not so sure they can bury it.

New Orleans

New Orleans

Katrina has devastated New Orleans, a unique American city, unprecedented and unparalleled in its cultural heritage and central to the history of historic preservation. New Orleans preserved landmarks before almost any other city in North America, and it preserved historic districts before any city here save Charleston. In its integration of architecture and culture it even suggested that preservation was about more than buildings: a blend of music and the peoples and practices of three continents stirred into an intriguing and attracting mix. Now, more of it is gone that we yet know.

The Department of Homeland Security failed its first test in New Orleans, abetting a human tragedy that outweighs any concerns of material culture. It failed even though everybody else saw it coming. My newspaper last Sunday was illustrated with cross-sections what kind of flooding would happen in New Orleans with the expected storm surge. Chicago’s Mayor saw that and offered extensive help to FEMA, which was turned down during Day 1 of the weeklong federal bungle. Turns out FEMA is now run by people with no experience in emergency management. On top of bad management, various government muckety-mucks and their mothers have added fabulous insults to the injuries, treating other people as if they were somehow categorically different. Always a mistake. Today Bangladesh offered help.

We still don’t know how much is lost – the French Quarter, the nation’s second historic district protected in 1937, seems relatively unscathed. The Garden District is some distance from the levee breaks, but the Ninth Ward took the brunt of it, an area of preservation outreach in recent years. See http://www.preserveneworleans.com for ways to help. Along the Gulf Coast, historic homes in Ocean Springs, Mississippi, where Louis Sullivan had his vacation escape, are likely gone. Biloxi. Many places seemingly gone forever.

The magnitude is almost unimaginable, except it was imagined, by FEMA before it had its knees cut off, by New Orleans when it tried to build levees, by everybody’s newspaper last Sunday before the thing even hit.

We live in such an instantaneous society with so little memory that the feeble excuses from Washington seem plausible only if you can’t remember the news you read a week ago. Then again, they encourage you to forget – replace this memory with that one – thanks to spin, which is the same as marketing or propaganda. Fortunately, the debacle now is so big and so visible and graphic that even Rovian spinsters can’t put Humpty back together.

Will New Orleans get put back together? Yes, because there is the historic place, and it seems much of its historic core, and by far more importantly, that strange hybrid culture that simply does not exist elsewhere –a place that fostered the sort of individuality that resulted in stranding and death and looting but also a place that recognizes that society and culture are needed, desperately needed, if any of us are to experience our individuality. They had a parade yesterday. New Orleans won’t be a theme park as some pundit suggested this morning, because the same culture that is freaking out Baton Rouge right now will need a place to go and a place to build. Of course it won’t be the same – nothing ever is. Even for a minute. But it will be New Orleans.

One more note on Dennis Hastert’s ill-advised remarks about bulldozing a city built in a terrible location. All cities are built in terrible locations. Amsterdam? Underwater. Venice? Eternally submerging. Mexico City and Chicago built on swamps and landfill, San Francisco and Los Angeles on fault lines. Cities grow where they are needed based on commerce and transportation, which for most of human history meant as close to the damn water as possible. The fact that the ocean and the river were so close meant that New Orleans had to be there.

Still does.

Going Gothic?

Several alert historic preservation alumni sent me this clipping a couple of weeks ago. Turns out the house that Grant Wood used in his famous painting “American Gothic” is threatened with demolition, according to Harry Mount, a writer in Eldon. Not only is the little white cottage with the big Gothic window is empty, boarded-up, and being offered by the State Historical Society for $250 a month, but there is little interest. One neighbor wanted to tear it down in the 1960s but balked at the $200 purchase price.

American Gothic is the most-parodied and recognized painting in American history. The thing that I never knew was that this little landmark house actually inspired the painting in the first place! Mount reports that Grant was driving by the house and burst out laughing at the pretension of this oversized Gothic window on this tiny cottage. Later, searching for a stern couple, he convinced his dentist and his sister to pose as the farmer and wife. His sister eve sued Johnny Carson and Playboy in the 1960s for running a version of the painting with the couple in tiny swimsuits, according to Mount.

You might think someone at the Art Institute of Chicago might be interested – after all, we got the painting, and Wood is our guy, but then again the problem with real estate is location, location, location and the house ain’t in Grant Park. In fact, one of the reasons they can’t rent the 3-bedroom house with decent Victorian details is that everyone in that neighborhood prefers the modernity of the modern mobile trailer home. The barn has already been demolished for three trailers. The only question now is how long until the 75-year old painting’s inspiration and setting turns into another trailer.