Winter Park has some property rights which we enjoy, namely, our high quality of community which is reflected in our high assessed value. Even if you live in a medicore ranch house, it’s worth more than that mediocre ranch house across the border in Casselberry.
Why? Because it’s Winter Park. We paid to get in and we want to preserve our property values, right?
Unfortunately, the debate about historic districts has degenerated into fearmongering and shouting. Those who have a shrill voice scream about their rights, and drown out everyone else.If we don’t all speak up and say “hey we have some rights, too” then what I predicted will come to pass: the historic fabric gets decimated, our quality of life gets diluted, and Winter Park becomes just like everywhere else.
Our property values are higher because we live in a city that has historic character. This historic character has a “spillover” effect onto non-historic properties. Everyone knows this – the realtors, the developers, and especially the newcomers who want to make Winter Park their home. We all bask in this character, at least indirectly (Pigou)
A new historic district will have a positive effect on property values, this is well documented and beyond argument. Winter Park residents should be suspicious of rhetoric claiming that historic preservation is taking away their property rights, because in reality those shrill voices claiming “property rights” are actually threatening all of us.
Worse, these voices are attacking the property values of our children and future generations. By cashing in on current market value, any future higher return is foregone.
Their biggest fear is a restriction in perpetuity, i.e. an historic district. This is, in reality, an asset. No historic district in the country ever, ever has been seen as a mistake or waste of money or something to extinguish, so that is a completely false argument.
In reality, a historic district will reduce the transaction costs of individual real estate owners by reducing the risk that today’s valuable property will be tomorrow’s loss. It will reduce fluctuation in land values…anyone remember 2010? It is doubtful anyone wants to repeat that year.
The government hasn’t been effective in the slightest in regulating the banking industry so a housing bubble will surely come again, it’s just a matter of when. Do you want to be caught in the freefall of another real estate collapse, or do you want to live in a place that has some assurance that land values are stable?
One analogy is a diamond ring. You wouldn’t pull out and pawn the diamond in your wedding ring, would you? That diamond makes it valuable, the ring is worthless without it. So why would you take a treasure like a neighborhood of historic character and make it temporary, easily extinguishable? The surrounding community would be worthless without it. No one does that.
Another analogy is the farmer’s dilemma. Your orange grove produces profit. You would produce even higher profit if you sold the fruit, and then cut down the trees for firewood. But then you wouldn’t have the trees for fruit in the future, and your profits across a period of time would be less. In fact, they would be zero. Well if you have historic homes, but then un-designate them and demolish them, you are doing the same thing. No one does that. (see Hicks).
The last analogy is the radio station. A radio station sets up in an empty storefront on Fairbanks, and starts broadcasting on 91.5 FM. They make a lot of money selling ads but they block another station. The station owner fights it, but the profitable radio station has enough money to hire lawyers and eventually they settle, and the smaller station shuts down. The reason this does NOT happen is because the government regulates the airwaves! Yes, government regulation has some usefuless, and the FCC tells the other radio station to pick a different frequency. Well if developers want to come in and build so badly, the government can tell them where to buy up the dirt – west of 17-92, for example, would be a really good start…or along Fairbanks between Orange and Edgewater. Government should have some backbone here. (Coase)
So if your property values are important, fight for the right of Winter Park’s citizens to democratically vote for historic district status in a simple majority. If you are conservative by nature, then your desire to conserve property values, reduce the volatility of transaction costs, and make Winter Park’s real estate a stable asset for future generations should lead you to this conclusion.
This is not the normal argument I would make for historic district status. Basically, if I have to choose quality over quantity, I choose quality. What I see, however, is too much irrational rhetoric and too little reasoned analysis of the case. This irrational rhetoric ignores the real economics of this issue laid out by the three gentlemen above, and recognized by economists today as the real world in which we live. I trust that this is a thoughtful contribution to the ongoing discussion about Winter Park’s shared vision.