4 Things to Know Before Buying a Historic Home
The pros, cons, and everything you need to know about buying a registered, historic home.
Perhaps you have been searching for several months or even years, and now you have found the perfect home. Your dream comes with elaborately detailed scrollwork, a hand-carved newel post, or stately white columns. It is also listed as a contributing resource to a historic district on the National Register of Historic Places. What does that mean? What things should you consider before determining that this house is for you?
1. By owning a historic home, you become part of something larger.
A listing on the National Register is a particular, upscale amenity that attracts a specific group of homebuyers, suggests Tom Zannelli, a senior sales agent Paragon Real Estate in San Francisco, though their charm can win over unexpected buyers as well. Owning property within a historic district offers you the unique opportunity to interpret and share the history of your home, as a steward of a recognized contributor to our nation’s past.
Thom and Lynn Wood, architects and principals of Time Line Architecture, consciously chose to live in their neighborhood of redeveloped military housing at Fort Ethan Allen in Essex, VT. Both the surroundings and the house encouraged residential re-use, while the space offered uncommon design, craftsmanship, and materials. “It was a chance to be part of something larger and unique,” said Lynn.
2. Buying a historic home offers a significant return on investment.
A National Register citation confirms a home’s historic significance, but the real worth may be realized in the stability and strength of the property’s value. A 2000 study of South Carolina home sales showed that homes in Columbia’s historic districts sold 26 percent faster than the overall market; while historic Beauport owners saw a whopping 21 percent greater sale price. In Rome, GA, properties in designated historic neighborhoods increased in value 10 percent more than similar properties without historic designation between 1980 and 1996. Studies in Texas, New York, and Pennsylvania corroborate the positive effect a historic district designation has on property values, with overall increases between 5 percent and 20 percent. The stability of property value appears to extend to owner tenure as well: There is a reportedly lower owner turnover within historic districts than in neighborhoods lacking that distinction.
3. A historic home’s renovations and additions may be regulated.
National Register inclusion is an acknowledgment of a property’s importance to its community, state, or nation. Some homebuyers may be anxious about this designation from the National Park Service, fearing infringement of their property rights. But largely, these concerns are unfounded, as long as the work receives no federal money and requires no federal license or permit. Owners are under no obligation to restore their property or to open their doors to the public.
Many municipalities, however, have designated design control districts in areas that have been identified as having particular historical, architectural, scenic, cultural, or visual significance. Buildings in these areas may be subject to review for any proposed alteration, addition, or demolition. These preservation ordinances help homeowners protect their investment by preserving the historic character of their neighborhoods. A prospective homebuyer of a property within an established historic district would be well advised to visit the local planning and zoning office to determine what guidelines may apply to them.
Review of any project may run the gamut from a cursory evaluation by a zoning administrator to review by a secondary commission that advises specifically on questions of historic sensitivity and architectural compatibility. For certain types of work, homeowners may need to secure a permit called a Certificate of Appropriateness (COA) or Permit for Minor Work from their planning office or historic review board. Communities that rely on heritage tourism frequently have more stringent review procedures: Historic Savannah requires review for alterations as minor as changing awnings. In New York City’s Row House District, a COA is necessary before changing exterior shutters. Review only applies to the exterior of any structure in a historic district, and does not affect any interior changes.
Some historic district commissions may require replacement of damaged materials in kind, that is, with material or design features original to the building. While the alteration of a historic home may require specific or expensive materials or craftsmanship, it will be balanced with the likelihood that the investment will hold. Additionally, your neighbor’s protected property is also less likely to be altered in a manner that might reduce your property value.
4. A historic home may have access to resources for preservation.
In some instances, buildings listed as contributing resources on the National Register may be eligible for limited financial aid through grants, loans, or tax incentives. Georgia has provided an eight-year freeze on property-tax assessments on designated historic properties. The federal government currently limits tax credit opportunities to structures that are income-producing (rather than strictly residential). Preservation organizations are another resource for modest financial assistance.
Preservation easements may be arranged through local governments or private organizations like Historic New England (formerly the Society for the Preservation of New England Antiquities). These arrangements can lessen the property-tax burden while providing for the preservation, protection, and maintenance of your historic property. Programs differ from one state to another, so check with your State Historic Preservation Office (SHPO), local planning agency, or community historical society.
Thousands of historic districts have been listed by the federal government on the National Register, ranging from the landmark homes of Newport to modest mill housing of New England. For further information, contact the National Register of Historic Places or your local State Historic Preservation Office.