Cedar Street Economics

What to do with the Cedar Street neighborhood?

As one resident said in Jim Schlosser's N&R story today, "this area is up for grabs." Developers are moving in, a number of buildings have already been torn down, so the city has scrambled to come up with a plan to guide development and promote preservation at the same time.

Some see preservation and development as being at odds with one another; Councilman Tom Phillips was quoted in the Rhino Times as saying the neighborhood should be bulldozed for new development. For a lot of people, "new development" means "new buildings."

Actually, a tremendous amount of development -- meaning economic activity -- goes on in existing, historic buildings.

But the renovation economy is not very appealing to politicians because, while it's very easy to point out crisp, new condominiums to constituents and potential new businesses and say, "look what we did!" it's a little harder to point to a multiple-income neighborhood of long standing -- even one that looks pretty good -- and say, "our policies encouraged millions of renovation dollars here, but it's kind of hard to see it, so you'll have to take my word for it."

Here are some things about the renovation economy that Tom and others might want to keep in mind (most of which I gleaned from reading Don Rypkema's stuff on the economics of preservation).

Rehab projects typically require more skilled labor than new construction -- they're simply more challenging than an average framing-and-sheetrock job. That means higher wages for local workers. For the rehabber, the cost of higher wages is offset by the fact that he doesn't have to build from scratch.

If the rehab is being done on a historic property, it might qualify the investor to get up to 50% of his investment back in state and federal tax credits. That means that the local economy not only gets the benefit of the rehab, but half as much again from state and federal coffers will be flowing into the local economy.

Rehab jobs tend to be done by small, locally based companies, unlike big, new developments, which are often built by huge, national companies that take their profits out of town and out of state. If you want to support local entrepreneurs like my neighbor Pete Williams (cabinet maker), my contractor friends David Milsaps, Joe Bower and Joe Thompson, or local window repair expert David Hoggard, rehab is the way to go.

Some features of historic houses have hidden value. Old-fashioned "wavy" glass goes for about $22 a square foot on the free market these days . We saw a rehabbed building in Greenville that used recycled old glass in its new windows -- it must have cost them a fortune! -- but if those Cedar Street houses are torn down, that resource will most likely go into the landfill.

The same goes for things like heart pine flooring, oak mantels, 6" heart-pine turned porch posts, decorative brackets, 6" milled window and door casings, etc. These items will only appreciate in value as they become more rare. You can't get heart pine any more, because it comes only from old-growth pines, and the lumber companies can't afford to let a pine tree grow 100 years any more.

On the other hand, if you want to favor bigger businesses who hire lower-wage laborers, and if you're interested in a newer-but-blander neighborhood that will be an economic monoculture and that will probably display less craftsmanship and style, and will probably look a lot more like condo projects being built all over the U.S., well then bulldozing Cedar Street and building new is the way to go.

UPDATE: Here is a copy of the Cedar Street Strategic Plan that will go before city council on November 15, 2005.