Feature: A New Argument for Old Buildings

By Amy Lambert, AIA and George Poulin, AIA

One of the most repeated criticisms of the historic preservation movement is that preservation adversely impacts housing affordability. In an era when cities across the nation are experiencing affordable housing crises, this tension has fueled a robust debate in which the benefits of historic preservation are pitted against the necessity of affordability. Communities across the Philadelphia region are grappling with these seemingly competing priorities: the desire to preserve neighborhood character and the fundamental need to ensure access to housing. And these challenges must now be considered in the context of climate change and the concomitant imperative to conserve existing resources.  

Fortunately, solutions exist. Older buildings are one of the best sources of affordable, environmentally responsible housing, and there are a variety of sources for funding their preservation and adaptation. Realizing that potential, however, requires the ability to navigate complex funding structures. In addition, expanding the economic programs to meet these needs will require political will. 

Historic preservation is the discipline that was created to meet these challenges. It is a pursuit that understands that modern society and historic resources should exist in productive harmony in order to fulfill the requirements of current and future generations.1 In this endeavor, architecture and preservation naturally align in important ways — many architects actually consider themselves preservationists. One of the greatest talents of architects is problem solving, and that skill is needed to maximize the opportunities that existing buildings offer. 

Preservation is resource management. As the late architect Emanuel Kelly stated in a 2023 interview, “Preservation isn’t just about aesthetics; it’s more about identifying cultural resources that link us to our history.”2 The past is not behind us. It is very much with us and often confronts us with intriguing design challenges. How we respond reflects our values — and the values of preservationists align with those of many architects: sustainability, and economic and cultural responsibility. Our partnership, based on shared goals of transforming the built environment, is powerful.  

The Economic Benefits of Older Buildings 

In cities all across our nation, and in Philadelphia in particular, preservationists are often pitted against pro-development advocates who see high-density new construction as the solution to our cities’ affordable housing crisis. But what we often fail to recognize is the inherent affordability of our existing housing stock [Figure 1].  

Take the Spruce Hill neighborhood of Philadelphia, for example. Well known for its Victorian architecture, the neighborhood enjoys a population density more than twice the average of Philadelphia as a whole.3 The median price of a one-bedroom rental in Spruce Hill is $1,025 per month.4 These affordable units also take the form of “missing middle” housing, a type of house-scale building with multiple units located in walkable neighborhoods, just like Spruce Hill. This figure is in stark contrast to the pricing of new construction. On Chestnut Street alone, between 41st and 46th Streets, more than 1700 units have been constructed in the past five years. In many instances, the new buildings have taken the place of the historic neighborhood fabric, such as the site of the Christ Memorial Reformed Episcopal Church at 43rd and Chestnut. The least expensive one-bedroom apartment in these newly completed buildings starts at $1,600 per month, 50% more expensive than the median rent of the neighborhood as a whole. The historic district designation of Spruce Hill, which is now under review, would usher in a community-led balance between preservation and development, and affordable housing is among the things that will be preserved. 

Meeting the Costs 

Local designation is one of the tools that can help preserve valuable older buildings, but it does not automatically come with financial relief or provide maintenance funding to keep long term residents in place. Indeed, one of the most prevalent criticisms of historic designation is the perceived financial burden it imposes on owners of historic properties. But while the reality of these burdens must be acknowledged, there are now a handful of promising programs at the national and state level that target the reactivation of older buildings, giving them opportunities for continued useful life and economic generation. In recent years, the Philadelphia Historical Commission has also been increasingly sensitive to the financial realities of repairing and maintaining historic properties.  

The statewide Pennsylvania Whole-Home Repairs Program is an important resource for owners of older houses. It was established to reverse years of systemic neglect in our well-used but aging housing inventory. One of the few Pennsylvania state programs to assist homeowners in maintaining their properties, it encourages the extended life of houses by providing a bulwark against rising maintenance and utility burdens. Especially in gentrifying neighborhoods, where housing costs can quickly soar, this additional support for homeowners and small landlords can prevent displacement and stabilize communities. This is as much about people as buildings. As State Senator Nikil Saval, who represents PA District 1, contends, “Preservation is, at its heart, a social practice that honors the sense of belonging, continuity, and stability that beats in the sacred connection between people and place. The Whole-Home Repairs Program protects this connection.” 

Other states do more. Some have tax credits for the repair and rehabilitation of owner-occupied historic properties. The Maryland Sustainable Communities Tax Credit Program offers homeowners a state income tax credit equal to 20 percent of qualified rehabilitation expenditures.5 With similar demographics and aging communities, Pennsylvania would be wise to offer the same. 

New federal initiatives are also responding to the housing crisis and the sustainability concerns of the post-COVID world. A guidebook has been released that details the efforts of twenty agencies, including the General Services Administration (GSA) and Housing and Urban Development (HUD), to reach the dual goals of affordability and low emissions. Among the newest initiatives is a program to incentivize the conversion of commercial properties into affordable housing, which was announced by the White House in October 2023. 

The creative use of Low Income Housing Tax Credits (LIHTCs) can provide another funding stream. LIHTCs usually prioritize the construction of new affordable housing that meets the minimum requirements. They operate not unlike Historic Tax Credits for developers. In New York State, the agency that oversees LIHTCs prioritizes projects that combine the two tax credit programs to support the reuse of existing buildings for low-income residents. This provides another response to the strawman argument that preservation is a roadblock to development or affordability. 

The connection between people and place is at the core of the Wolf Avenue Collective, a new model of affordable housing through community ownership in Missoula, Montana.6 When an 8-unit historic building in a National Register (NR) district was put up for sale, fears of rising rents with new ownership drove a community-led effort to turn renters into shareholders through a housing cooperative. A willing interim buyer held the land while two nonprofits — one specializing in Community Land Trusts and the other a housing lender — worked to create a community land trust with the eager residents becoming collective owners. While Missoula is a Certified Local Government, neither that designation nor the NR status were leveraged in the funding structure, but NeighborWorks Executive Director Kaia Peterson was explicit that the historic significance of the property was a factor. She stressed that the residents were driven by a belief that existing housing which has served the community for generations was a key value worth protecting. This could be a model to replicate in Philadelphia, and one where NR and CLG designations could be leveraged to encourage the affordability of existing historic housing. 

Tax Incentives 

Philadelphia benefits from Historic Preservation Tax Credit (HPTC) programs at both the federal and state levels, which are among the best tools for the rehabilitation of older buildings. They are applicable to properties that are listed on the National Register of Historic Places. While inclusion on the National Register is one of our nation’s highest recognitions of historic significance, it comes with no protections against demolition or insensitive alteration. It does make developers of income-producing properties eligible for federal tax savings of 20% and for up to $500,000 in state tax credits for qualified rehabilitation expenses. Since the program’s inception in 1976, it has leveraged $116.34 billion in private investment to preserve more than 47,000 historic properties. Federal funding has historically been the catalyst for positive and proactive development that has employed architects, improved cities, and bettered lives [Figure 2]. 

The HPTC has been one of the most successful incentive programs in the country, and Harrisburg’s state level program, though far smaller than those in neighboring states, provides a crucial boost to this work. The 1926 Beury Building on North Broad Street in Philadelphia received $200,000 in state tax credits in 2023, which will help to remake the long-vacant bank and office building into a hotel, led by developers Shift Capital. Kalidave LP, spearheaded by developer Guy Laren, is shepherding the 1912 Leader Theater, long hidden behind a mid-century façade on Lancaster Avenue, through a conversion. The movie palace will be transformed into a multi-floor commercial building with help from a $200,000 state tax credit, giving new economic vitality to the thoroughfare that stretches across West Philadelphia.  

MM Partners LLC has also been at the forefront of developing vacant buildings throughout the city with the support of tax credits. While they may not identify as “capital P” preservationists, the tax benefits associated with the National Register designation of many of the buildings they have adapted have made their work possible. Preservation is indeed a big tent endeavor, and the advantages of working with vintage architecture are not only economic.  

“Older buildings by and large tend to be of a much higher quality than anything you could ever afford to build today with higher ceilings, bigger windows, cool original details, and often reusable infrastructure,” says David Waxman, co-founder and managing partner of MM. “In addition, the history of the building typically provides a great back story for marketing purposes. These buildings aren’t cookie cutter like much of the new mid-rise multifamily projects being built here and all over the country.”  

The company’s current portfolio includes the transformation of a nineteenth century trolley barn on Haverford Avenue into loft apartments and the multifamily conversion of a former psychiatric hospital on Henry Avenue in East Falls. MM’s projects have received several Preservation Achievement Awards bestowed by the Preservation Alliance of Greater Philadelphia [Figure 3].  

While historic tax credits can reactivate larger buildings, there is no obvious remedy for the estimated 50,000 vacant houses that dot our city. Sheriff’s sales have not happened in years.7 The Philadelphia Land Bank is a nearly ten-year-old attempt to streamline the redevelopment of vacant and tax-delinquent city-owned properties into productive use. Yet it has released only a fraction of its parcels, most of which are vacant land that has found its way to developers for new construction. These vacant buildings and lots reflect the legacy of redlining, which still marks our racially diverse city. They do not seem to have a hero, and they need one if we are to make the best use of these resources. 

Looking to the future 

As design professionals whose work investigates and shapes the built environment, we must continue to engage with our elected officials and local nonprofits to meet the demands of our communities for affordable homes in a city rich with history. Philadelphia is still beset by mistakes made in the prior century, which we must confront in this one. Structural poverty, racist redlining, uneven public safety, and selective disinvestment will continue to weigh down the entire city. As architects, we have the skills to understand the dynamic relationship between preservation and affordability. Voting, advocacy, and the successful implementation of projects are our professional responsibility. As our nation’s most affordable and historic large city, Philadelphia can seize this moment to demonstrate that preservation and affordability are not just complementary, but intertwined. 

Amy Lambert and George Poulin are both Philadelphia architects serving on the board of the University City Historical Society, a volunteer-run organization dedicated to the preservation of the history, architecture, and cultural heritage of West Philadelphia. 

Photo Above: 4000 block of Sansom Street: “Missing middle” houses, which allow flexible and reversible single-family/multifamily conversion.  Photo credit: Amy Lambert

CITATIONS: 

1. Advisory Council on Historic Preservation and Housing and Urban Development. “Affordable Housing and Historic Preservation,” 2006 

2. https://www.youtube.com/watch?v=FfZNN7s32ZY 

3. https://www.city-data.com/neighborhood/Spruce-Hill-Philadelphia-PA.html 

4. https://issuu.com/universitycity/docs/the_state_of_university_ city_2023_web?fr=sOWE3MzU5OTQ4MjI 

5. https://mht.maryland.gov/Pages/funding/tax-credits-homeowner.aspx 

6. https://www.nwmt.org/wolf-avenue-collective-case-study/ 

7. https://www.inquirer.com/news/sheriffs-office-tax-sales-bid4as-sets-20231224.html